ITEM NO. 2 – RATIFICATION OF KPMG AS OUR
2020 INDEPENDENT AUDITOR
ITEM NO. 2 – RATIFICATION OF KPMG AS OUR 2020 INDEPENDENT AUDITOR
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR
THIS PROPOSAL
The Audit Committee of the Board has appointed KPMG LLP as our independent auditor for the fiscal year
ending December 31, 2020, and we are submitting that appointment to our shareholders for ratification on an
advisory basis at the meeting. Although shareholder ratification of KPMG’s appointment is not legally required,
we are submitting this matter to the shareholders, as in the past, as a matter of good corporate practice. In
determining whether to reappoint KPMG as our independent auditor, the Audit Committee considered a number
of factors, including, among others, the firm’s qualifications, industry expertise, prior performance, control
procedures, proposed staffing and the reasonableness of its fees on an absolute basis and as compared with
fees paid by comparable companies.
The Audit Committee of the Board has appointed KPMG LLP as our independent auditor for the fiscal year ending December 31, 2020, and we are submitting that appointment to our shareholders for ratification on an advisory basis at the meeting. Although shareholder ratification of KPMG’s appointment is not legally required, we are submitting this matter to the shareholders, as in the past, as a matter of good corporate practice. In determining whether to reappoint KPMG as our independent auditor, the Audit Committee considered a number of factors, including, among others, the firm’s qualifications, industry expertise, prior performance, control procedures, proposed staffing and the reasonableness of its fees on an absolute basis and as compared with fees paid by comparable companies.
If the shareholders fail to vote on an advisory basis in favor of the appointment, the Audit Committee will reconsider whether to retain KPMG, and may appoint that firm or another without resubmitting the matter to the shareholders. Even if the shareholders ratify the appointment, the Audit Committee may, in its discretion, select a different independent auditor at any time during the year if it determines that such a change would be in the Company’s best interests.
In connection with the audit of the 2019 financial statements, we entered into an engagement letter with KPMG
which sets forth the terms by which KPMG will provide audit services to us. Any future disputes between KPMG
and us under that letter will be subject to certain specified alternative dispute resolution procedures, none of
which are intended to restrict the remedies that our shareholders might independently pursue against KPMG.
In connection with the audit of the 2019 financial statements, we entered into an engagement letter with KPMG which sets forth the terms by which KPMG will provide audit services to us. Any future disputes between KPMG and us under that letter will be subject to certain specified alternative dispute resolution procedures, none of which are intended to restrict the remedies that our shareholders might independently pursue against KPMG.
The following table lists the aggregate fees and costs billed to us by KPMG and its affiliates for the 2018 and
2019 services identified below:
(1) Includes the cost of services rendered in connection with (i) auditing our annual consolidated financial statements, (ii) auditing our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, (iii) reviewing our quarterly financial statements, (iv) auditing the financial statements of several of our subsidiaries, (v) reviewing our registration statements and issuing related comfort letters, (vi) statutory audits for certain of our foreign subsidiaries, and (vii) consultations regarding accounting standards. In addition, the amount listed for 2018 includes a final billing of $785,000 that was received after we finalized our 2019 proxy statement and consequently was not reflected in the auditor fee table included in our 2019 proxy statement.
(2) Includes the cost of preparing agreed upon procedures reports and providing general accounting consulting services.
(3) Includes costs associated with general tax planning, consultation and compliance (which were approximately $1,300,000 in 2018 and approximately $100,000 in 2019).
The Audit Committee maintains written procedures that require it to annually review and pre-approve the scope
of all services to be performed by our independent auditor. This review includes an evaluation of whether the
provision of non-audit services by our independent auditor is compatible with maintaining the auditor’s independence in providing audit and audit-related services. The Committee’s procedures prohibit the independent auditor from providing any non-audit services unless the service is permitted under applicable law and is pre-approved by the Audit Committee or its Chairman. The Chairman is authorized to pre-approve projects if the total anticipated cost of all projects pre-approved by him during any fiscal quarter does not exceed $250,000. The Audit Committee has pre-approved the Company’s independent auditor to provide up to $75,000 per quarter of miscellaneous permitted tax services that do not constitute discrete and separate projects. The Chairman and the Chief Financial Officer are required periodically to advise the full Committee of the scope and cost of services not pre-approved by the full Committee. Although applicable regulations permit us to waive these pre-approval requirements in certain limited circumstances, the Audit Committee did not use these waiver provisions in either 2018 or 2019.
KPMG has advised us that one or more of its partners will be present at the meeting. We understand that these
representatives will be available to respond to appropriate questions and will have an opportunity to make a
statement if they desire to do so.
Ratification of KPMG’s appointment as our independent auditor for 2020 will require the affirmative vote of a
majority of the votes cast on the proposal at the meeting.

                      | Amount Billed |
--------------------- | ------------- | -----------
                      | 2018          | 2019
Audit Fees(1)         | $16,014,014   | $17,639,702
Audit-Related Fees(2) | 106,528       | 153,203
Tax Fees(3)           | 1,318,798     | 119,098
Other                 | —             | —
Total Fees            | $17,439,340   | $17,912,003

ITEM. 2 RATIFICATION KPMG
 2020 INDEPENDENT AUDITOR
. 2 RATIFICATION KPMG
 BOARD UNANIMOUSLY RECOMMENDS VOTE
 PROPOSAL
 Audit Committee KPMG LLP independent auditor fiscal year
 ending December 31, 2020 submitting shareholders ratification
 advisory. shareholder ratification not legally required
 good corporate practice.
 KPMG Audit Committee considered
 factors qualifications industry expertise prior performance control
 procedures staffing reasonableness fees
 comparable companies.
 Audit Committee KPMG LLP independent auditor fiscal year ending December 31, 2020 submitting shareholders ratification advisory. shareholder ratification not legally required good corporate practice. Audit Committee considered factors qualifications industry expertise prior performance control procedures staffing reasonableness fees.
 If shareholders fail vote favor Audit Committee retain KPMG may appoint without resubmitting.shareholders ratify appointment Audit Committee may select different independent auditor if Company’s best interests.
 audit 2019 financial statements entered engagement letter with KPMG
 audit services. future disputes between
 subject to alternative resolution procedures
 remedies shareholders.
 audit 2019 financial statements engagement letter with KPMG terms audit services. future disputes subject to alternative resolution procedures remedies.
 table lists fees costs billed by KPMG for 2018
 2019 services
 Includes cost services auditing annual financial statements internal control financial reporting Act quarterly financial statements financial statements subsidiaries registration statements comfort letters statutory audits for foreign subsidiaries consultations accounting standards. 2018 includes final billing $785,000 received after 2019 proxy statement not reflected in auditor fee table.
 Includes cost preparing procedures reports general accounting consulting services.
 Includes costs tax planning consultation compliance approximately $1,300,000 in 2018 $100,000 in 2019.
Audit Committee procedures annually pre
 services by independent auditor. review includes
 non-audit services independence. procedures prohibit auditor non-audit services unless permitted law pre-approved by Audit Committee or Chairman. Chairman pre projects if cost exceed $250,000. Audit Committee pre-approved independent auditor $75,000 per quarter miscellaneous tax services. Chairman Chief Financial Officer advise full Committee cost services not pre-approved. regulations waive pre-approval requirements Audit Committee use waiver provisions 2018 2019.
 KPMG partners present at meeting.
 respond questions
 statement.
 Ratification KPMG’s independent auditor for 2020 affirmative vote
 majority.
 Audit Fees(1) $16,014,014 $17,639,702
 Audit-Related Fees(2) 106,528 153,203
 Tax Fees(3) 1,318,798 119,098
 Other
 Total Fees $17,439,340 $17,912,003


Movements in total self‐insured risks, restructuring, onerous contracts, store exit costs, and other provisions
(1) The increase in restructuring, onerous contracts, and store exit costs in 2019 is primarily attributable to the recognition of provisions associated with the BIG W network review as outlined in Note 1.4.
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made as to the amount of the obligation. The amount recognised is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
A liability is recognised for benefits accruing to employees in respect of annual leave and long service leave.
Liabilities expected to be settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.
Liabilities which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to the reporting date.
The provision for self-insured risks primarily represents the estimated liability for workers’ compensation and public liability claims.
Provision for restructuring is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected by the restructuring that the restructuring will occur.
An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.

                                         |                    |       | RESTRUCTURING, ONEROUS       |
---------------------------------------- | ------------------ | ----- | ---------------------------- | -----
                                         |                    |       | CONTRACTS, STORE EXIT COSTS, |
                                         | SELF‑INSURED RISKS |       | AND OTHER                    |
                                         | 2019               | 2018  | 2019                         | 2018
                                         | $M                 | $M    | $M                           | $M
Movement:                                |                    |       |                              |
Balance at start of period               | 596                | 593   | 679                          | 800
Net provisions recognised/(reversed) (1) | 177                | 161   | 225                          | 55
Cash payments                            | (157)              | (148) | (162)                        | (178)
Other                                    | (13)               | (10)  | (5)                          | 2
Balance at end of period                 | 603                | 596   | 737                          | 679
Current                                  | 173                | 177   | 280                          | 256
Non‑current                              | 430                | 419   | 457                          | 423
                                         | 603                | 596   | 737                          | 679

Movements in self‐insured risks restructuring onerous contracts store exit costs provisions
 increase in restructuring contracts store exit costs 2019 attributable to provisions BIG W network review Note 1. 4.
 provision recognised when Group present obligation past event probable outflow economic benefits reliable estimate amount. recognised best estimate risks uncertainties.
 liability recognised for benefits annual leave long service leave.
 Liabilities settled within 12 months measured at nominal values remuneration rate.
 Liabilities not measured as present value of estimated future cash outflows services.
 provision for self-insured risks represents estimated liability for workers’ compensation public liability claims.
 Provision for restructuring recognised when Group plan valid expectation.
 onerous contract unavoidable costs exceed economic benefits. reflect least net cost of exiting lower of cost fulfilling compensation penalties from failure.
 RESTRUCTURING
CONTRACTS STORE EXIT COSTS
 SELF‐INSURED RISKS
 2019
 Balance 596 593  679  800
 Net provisions 177 161 225
 Cash payments (157) (148) (162) (178)
 period 603 596  737  679
 173 177 280 256
 Non‐current 430 419 457 423
 603 596 737


Purchases of Accenture plc Class A Ordinary Shares
The following table provides information relating to our purchases of Accenture plc Class A ordinary shares during the fourth quarter of fiscal 2019. For year-to-date information on all of our share purchases, redemptions and exchanges and further discussion of our share purchase activity, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Share Purchases and Redemptions.”
(1) Average price paid per share reflects the total cash outlay for the period, divided by the number of shares acquired, including those acquired by purchase or redemption for cash and any acquired by means of employee forfeiture.
(2) Since August 2001, the Board of Directors of Accenture plc has authorized and periodically confirmed a publicly
announced open-market share purchase program for acquiring Accenture plc Class A ordinary shares. During
the fourth quarter of fiscal 2019, we purchased 2,048,307 Accenture plc Class A ordinary shares under this
program for an aggregate price of $389 million. The open-market purchase program does not have an expiration
date
(3) As of August 31, 2019, our aggregate available authorization for share purchases and redemptions was $3,674 million, which management has the discretion to use for either our publicly announced open-market share purchase program or our other share purchase programs. Since August 2001 and as of August 31, 2019, the Board of Directors of Accenture plc has authorized an aggregate of $35.1 billion for share purchases and redemptions by Accenture plc and Accenture Canada Holdings Inc
(4) During the fourth quarter of fiscal 2019, Accenture purchased 66,017 Accenture plc Class A ordinary shares in transactions unrelated to publicly announced share plans or programs. These transactions consisted of acquisitions of Accenture plc Class A ordinary shares primarily via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture plc Class A ordinary shares under our various employee equity share plans. These purchases of shares in connection with employee share plans do not affect our aggregate available authorization for our publicly announced open-market share purchase and our other share purchase programs.

Period                           | Total Number of Shares Purchased | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)
-------------------------------- | -------------------------------- | -------------------------------- | ------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------
                                 |                                  |                                  |                                                                                | (in millions of U.S. dollars)
June 1, 2019 — June 30, 2019     | 801,659                          | $183.18                          | 785,600                                                                              | $3,924
July 1, 2019 — July 31, 2019     | 462,629                          | $194.65                          | 442,846                                                                              | $3,832
August 1, 2019 — August 31, 2019 | 850,036                          | $193.23                          | 819,861                                                                              | $3,674
Total (4)                        | 2,114,324                        | $189.73                          | 2,048,307                                                                            |

Purchases Accenture plc Class A Ordinary Shares
 table information purchases fourth quarter fiscal 2019. year-to-date information purchases redemptions exchanges Discussion Analysis Financial Condition Results Operations—Liquidity Capital Resources—Share Purchases Redemptions.
 Average price per share reflects cash outlay divided shares acquired including purchase redemption employee forfeiture.
 Since August 2001, Board Directors Accenture plc authorized
 open-market share purchase program shares.
 fourth quarter 2019 purchased 2,048,307 Accenture shares
 aggregate price $389 million. expiration
 date
 August 31, 2019 authorization share purchases redemptions $3,674 million. Since 2001 Board authorized $35. 1 billion share purchases redemptions Accenture Canada Holdings
 fourth quarter fiscal 2019 Accenture purchased 66,017 Class A shares unrelated share plans programs. share withholding payroll tax obligations employee equity share plans.purchases affect authorization open-market programs.
 Shares Purchased Average Price Paid Share Plans Approximate Dollar Value Shares
 millions. dollars
 June 1, 2019 30, 801,659 $183. 18 785,600  $3,924
 July 1 31, 462,629  $194. 65 442,846  $3,832
 August 1 31, 850,036  $193. 23 819,861  $3,674
 2,114,324  $189. 73 2,048,307


The following table sets forth our sources of revenue for each of the periods indicated (in thousands, except for percentages):
Subscription revenue increased by $69.9 million, or 15%, in 2019 when compared to 2018. Subscription revenue growth on a constant currency basis increased 16% in 2019 when compared to 2018. The increase was attributable to new business, which includes new customers, upsells, cross-sells, and renewals from existing customers.
Professional services revenue decreased by $31.3 million, or 48%, in 2019 when compared to 2018. The decrease of professional services revenue is attributable to the continued migration of implementation services to our global partners.
Subscription revenue increased by $76.3 million, or 19%, in 2018 when compared to 2017. The increase was attributable to new business, which included new customers, upsells, and renewals from existing customers. Professional services revenue decreased by $20.4 million, or 24%, in 2018 when compared to 2017. The decrease of professional services revenue is attributable to the execution of our strategic initiative to migrate much of our implementation services to our global partners.

                                                     |          | Year Ended December 31, |
---------------------------------------------------- | -------- | ----------------------- | --------
                                                     | 2019     | 2018                    | 2017
Subscription revenue                                 | $542,968 | $473,052                | $396,764
Percentage of subscription revenue to total revenue  | 94.2%    | 87.9%                   | 82.3%
Professional services revenue                        | $33,555  | $64,839                 | $85,221
Percentage of professional services to total revenue | 5.8%     | 12.1%                   | 17.7%
Total revenue                                        | $576,523 | 537,891                 | 481,985

table sources revenue
 Subscription revenue increased $69. 9 million 15% 2019 2018. increased 16%. new business upsells cross-sells renewals.
 Professional services revenue decreased $31. 3 million 48% 2019. migration services global partners.
 revenue increased $76. 3 million 19% 2018. new business upsells renewals. revenue decreased $20. 4 million 24%, 2018. decrease services global partners.
 December 31,
 2019
 Subscription revenue  $542,968 $473,052 $396,764
 total 94. 2% 87. 9% 82. 3%
 services revenue $33,555 $64,839 $85,221
 revenue 5. 8%. 1%. 7%
 Total revenue $576,523  537,891 481,985


Liquidity and Capital Resources
Cash Flows
A summary of the sources and uses of cash, cash equivalents, restricted cash and restricted cash equivalents is as follows:
Operating Activities
Net cash used in operating activities for the year ended December 29, 2019 was $270.4 million and was primarily the result of: (i) $158.3 million mark-to-market gain on equity investments with readily determinable fair value; (ii) $143.4 million gain on business divestiture; (iii) $128.4 million increase in inventories to support the construction of our solar energy projects; (iv) $66.2 million increase in accounts receivable, primarily driven by billings in excess of collections; (v) $38.2 million increase in contract assets driven by construction activities; (vi) $25.2 million gain on sale of assets; (vii) $17.3 million gain on sale of equity investments without readily determinable fair value; (viii) $8.9 million decrease in operating lease liabilities; (ix) $8.8 million increase in prepaid expenses and other assets, primarily related to movements in prepaid inventory; (x) net loss of $7.7 million; and (xi) $2.2 million increase in project assets, primarily related to the construction of our commercial solar energy projects. This was offset by: (i) $80.1 million depreciation and amortization; (ii) $79.3 million increase in accounts payable and other accrued liabilities; (iii) $50.2 million increase in advances to suppliers; (iv) $33.8 million loss on sale and impairment of residential lease assets; (v) $27.5 million increase in contract liabilities driven by construction activities; (vi) stock-based compensation of $26.9 million; (vii) $9.5 million non-cash interest expense; (viii) $8.6 million decrease in operating lease right-of-use assets; (ix) $7.1 million loss in equity in earnings of unconsolidated investees; (x) $5.9 million non-cash restructuring charges; and (xi) $5.0 million net change in deferred income taxes; and (xii) impairment of long-lived assets of $0.8 million.
In December 2018 and May 2019, we entered into factoring arrangements with two separate third-party factor agencies related to our accounts receivable from customers in Europe. As a result of these factoring arrangements, title of certain accounts receivable balances was transferred to third-party vendors, and both arrangements were accounted for as a sale of financial assets given effective control over these financial assets has been surrendered. As a result, these financial assets have been excluded from our consolidated balance sheets. In connection with the factoring arrangements, we sold accounts receivable invoices amounting to $119.4 million and $26.3 million in fiscal 2019 and 2018, respectively. As of December 29, 2019 and December 30, 2018, total uncollected accounts receivable from end customers under both arrangements were $11.6 million and $21.0 million, respectively.
Net cash used in operating activities in fiscal 2018 was $543.4 million and was primarily the result of: (i) net loss of $917.5 million; (ii) $182.9 million increase in long-term financing receivables related to our net investment in sales-type leases; (iii) $127.3 million decrease in accounts payable and other accrued liabilities, primarily attributable to payments of accrued expenses; (iv) $59.3 million gain on business divestiture; (v) $54.2 million gain on the sale of equity investments; (vi) $43.5 million increase in contract assets driven by construction activities; (vii) $39.2 million increase in inventories due to the support of various construction projects; (viii) $30.5 million decrease in contract liabilities driven by construction activities; (ix) $6.9 million increase in deferred income taxes; (x) $6.8 million increase due to other various activities; and (xi) $0.2 million increase in accounts receivable, primarily driven by billings. This was partially offset by: (i) impairment of property, plant and equipment of $369.2 million; (ii) impairment of residential lease assets of $189.7 million; (iii) net non-cash charges of $162.1 million related to depreciation, stock-based compensation and other non-cash charges; (iv) loss on sale of residential lease assets of $62.2 million; (v) $44.4 million decrease in advance payments made to suppliers; (vi) $39.5 million decrease in project assets, primarily related to the construction of our Commercial solar energy projects; (vii) $22.8 million decrease in prepaid expenses and other assets, primarily related to the receipt of prepaid inventory; (viii) $17.8 million decrease in equity in earnings of unconsolidated investees; (ix) $6.9 million net change in income taxes; (x) $6.4 million unrealized loss on equity investments with readily determinable fair value; and (xi) $3.9 million dividend from equity method investees.
Net cash used in operating activities in fiscal 2017 was $267.4 million and was primarily the result of: (i) net loss of $1,170.9 million; (ii) $216.3 million decrease in accounts payable and other accrued liabilities, primarily attributable to payment of accrued expenses; (iii) $123.7 million increase in long-term financing receivables related to our net investment in sales-type leases; (iv) $38.2 million increase in inventories to support the construction of our solar energy projects; (vi) $25.9 million increase in equity in earnings of unconsolidated investees; (vii) $7.0 million net change in income taxes; (viii) $5.3 million gain on sale of equity method investment; and (ix) $1.2 million decrease in accounts receivable, primarily driven by collections; This was partially offset by: (i) $624.3 million impairment of residential lease assets; (ii) other net non-cash charges of $239.6 million related to depreciation, stock-based compensation and other non-cash charges; (iii) $145.2 million increase in contract liabilities driven by construction activities; (iv) $110.5 million decrease in prepaid expenses and other assets, primarily related to the receipt of prepaid inventory; (v) $89.6 million impairment of 8point3 Energy Partners investment balance; (vi) $68.8 million decrease in advance payments made to suppliers; (vii) $30.1 million dividend from 8point3 Energy Partners; (viii) $10.7 million decrease in contract assets driven by milestone billings; (ix) $2.3 million decrease in project assets, primarily related to the construction of our commercial and power plant solar energy projects
Investing Activities
Net cash provided by investing activities in the year ended December 29, 2019 was $21.4 million, which included (i) proceeds of $60.0 million from sale of property, plant, and equipment; (ii) $42.9 million proceeds from sale of investments; (iii) net proceeds of $40.5 million from business divestiture; and (iv) $2.0 million of proceeds resulting from realization of estimated receivables from a business divestiture. This was offset by (i) cash paid for solar power systems of $53.3 million; (ii) $47.4 million of purchases of property, plant and equipment; (iii) cash paid for investments in unconsolidated investees of $12.4 million; and (iv) $10.9 million of cash de-consolidated from the sale of residential lease assets.
Net cash provided by investing activities in fiscal 2018 was $274.9 million, which included (i) proceeds from the sale of investment in joint ventures and non-public companies of $420.3 million; (ii) proceeds of $23.3 million from business divestiture; and (iii) a $13.0 million dividend from equity method investees. This was partially offset by: (i) $167.0 million in capital expenditures primarily related to the expansion of our solar cell manufacturing capacity and costs associated with solar power systems, leased and to be leased; and (ii) $14.7 million paid for investments in consolidated and unconsolidated investees.
Net cash used in investing activities in fiscal 2017 was $293.1 million, which included (i) $283.0 million in capital expenditures primarily related to the expansion of our solar cell manufacturing capacity and costs associated with solar power systems, leased and to be leased; (ii) $18.6 million paid for investments in consolidated and unconsolidated investees; and (iii) $1.3 million purchase of marketable securities. This was partially offset by proceeds from the sale of investment in joint ventures of $6.0 million and a $3.8 million dividend from equity method investees.
Financing Activities
Net cash provided by financing activities in the year ended December 29, 2019 was $344.3 million, which included: (i) $171.9 million from the common stock offering; (ii) $110.9 million in net proceeds of bank loans and other debt; (iii) $69.2 million net proceeds from the issuance of non-recourse residential financing, net of issuance costs; (iv) $35.5 million of net contributions from noncontrolling interests and redeemable noncontrolling interests related to residential lease projects; (v) $3.0 million of proceeds from issuance of non-recourse power plant and commercial financing, net of issuance costs. This was partially offset by (i) $39.0 million of payment associated with prior business combination; (ii) $5.6 million in purchases of treasury stock for tax withholding obligations on vested restricted stock; and (iii) $1.6 million settlement of contingent consideration arrangement, net of cash received.
Net cash provided by financing activities in fiscal 2018 was $85.8 million, which included: (i) $174.9 million in net proceeds from the issuance of non-recourse residential financing, net of issuance costs; (ii) $129.3 million of net contributions from noncontrolling interests and redeemable noncontrolling interests related to residential lease projects; and (iii) $94.7 million in net proceeds from the issuance of non-recourse power plant and commercial financing, net of issuance costs. This was partially offset by: (i) $307.6 million in net repayments of 0.75% debentures due 2018, bank loans and other debt; and (ii) $5.5 million in purchases of treasury stock for tax withholding obligations on vested restricted stock.
Net cash provided by financing activities in fiscal 2017 was $589.9 million, which included: (i) $351.8 million in net proceeds from the issuance of non-recourse power plant and commercial financing, net of issuance costs; (ii) $179.2 million of net contributions from noncontrolling interests and redeemable noncontrolling interests primarily related to residential lease projects; and (iii) $82.7 million in net proceeds from the issuance of non-recourse residential financing, net of issuance costs. This was partially offset by: (i) 19.1 million in net repayments of bank loans and other debt; and (ii) $4.7 million in purchases of treasury stock for tax withholding obligations on vested restricted stock.

                                                    |                   | Fiscal Year Ended |
--------------------------------------------------- | ----------------- | ----------------- | -----------------
(In thousands)                                      | December 29, 2019 | December 30, 2018 | December 31, 2017
Net cash used in operating activities               | $(270,413)        | $(543,389)        | $(267,412)
Net cash provided by (used in) investing activities | $21,366           | $274,900          | $(293,084)
Net cash provided by financing activities           | $344,314          | $85,847           | $589,932

Liquidity Capital
 Cash Flows
 cash
 Operating Activities
 Net cash $270. 4 million $158. 3 million equity investments $143. million business divestiture $128. million inventories solar energy $66. 2 million accounts receivable $38. 2 million contract assets $25. million sale $17. 3 million equity investments $8. 9 million lease liabilities. million prepaid expenses net loss $7. million $2. 2 million assets. offset $80. 1 million depreciation amortization $79. 3 million accounts payable liabilities $50. 2 million advances suppliers $33. 8 million loss residential lease assets $27. 5 million contract liabilities stock-based compensation $26. 9 million $9. million non interest expense $8. million lease-use assets $7. 1 million loss equity earnings $5. 9 million non-cash restructuring charges.million deferred income taxes impairment long-lived assets $0. 8 million.
 December May 2019 factoring receivable. transferred. excluded consolidated balance sheets. sold receivable $119. 4 million $26. 3 million 2019 2018. December 29, uncollected accounts receivable $11. 6 million $21. 0 million.
 Net cash 2018 $543. 4 million net loss $917. 5 million $182. 9 million increase long-term financing receivables $127. 3 million decrease accounts payable accrued liabilities expenses $59. 3 million gain business divestiture $54. 2 million gain sale equity investments $43. 5 million contract assets $39. 2 million increase inventories $30. 5 million decrease contract liabilities $6. 9 million increase deferred income taxes $6. 8 million $0. 2 million increase accounts receivable. offset impairment property plant equipment $369.impairment residential lease $189. 7 million non-cash charges $162. 1 million depreciation loss sale $62. 2 million $44. 4 million advance payments $39. 5 million assets $22. 8 million prepaid expenses $17. 8 million equity earnings $6. 9 million income taxes $6. 4 million unrealized loss equity investments $3. 9 million dividend.
 cash 2017 $267. 4 million loss $1,170. 9 million $216. 3 million accounts payable liabilities $123. 7 million long financing receivables $38. 2 million increase inventories $25. 9 million equity earnings $7. million income taxes $5. 3 million gain sale equity $1. 2 million decrease accounts receivable offset $624. 3 million impairment net non-cash charges $239. 6 million depreciation compensation.contract liabilities construction $110. 5 million prepaid expenses inventory $89. 6 million 8point3 Energy Partners investment balance $68. 8 million advance payments $30. 1 million dividend $10. 7 million contract assets $2. 3 million project assets solar energy
 Net cash 2019 $21. 4 million proceeds $60. million property $42. 9 million investments proceeds $40. 5 million business divestiture $2. million divestiture. offset cash solar power systems $53. 3 million $47. 4 million purchases property $12. 4 million $10. 9 million sale residential lease assets.
 Net cash 2018 $274. 9 million proceeds $420. 3 million proceeds $23. 3 million business divestiture $13. million dividend equity investees. offset $167. million capital expenditures expansion solar cell manufacturing capacity $14.million.
 Net cash 2017 $293. 1 million $283. million capital expenditures expansion solar cell manufacturing $18. 6 million $1. 3 million marketable securities. offset proceeds sale joint ventures $6. million $3. 8 million dividend equity investees.
 Net cash December 2019 $344. 3 million $171. 9 million common stock offering $110. 9 million proceeds bank loans debt $69. 2 million proceeds non-recourse residential financing $35. 5 million noncontrolling $3. million proceeds power plant commercial financing. offset $39. million prior business combination $5. 6 million treasury stock tax withholding $1. 6 million settlement contingent consideration arrangement.
 Net cash 2018 $85. 8 million $174. 9 million proceeds non-recourse residential financing $129. 3 million contributions noncontrolling $94.million proceeds-recourse power plant commercial financing. offset $307. 6 million repayments. 75% debentures bank loans $5. 5 million purchases treasury stock tax stock.
 cash financing 2017 $589. 9 million $351. 8 million proceeds $179. 2 million contributions residential lease $82. 7 million proceeds residential financing. offset 19. 1 million repayments bank loans $4. 7 million purchases treasury stock tax obligations.
 Fiscal Year
 December 29, 2019 2018 31, 2017
 cash operating activities $(270,413) $(543,389)(267,412)
 investing $21,366 $274,900 $(293,084)
 financing $344,314 $85,847 $589,932


6. Supplemental Financial Information
Cash and cash equivalents (in millions):
The following table presents cash and cash equivalents as reported in our consolidated balance sheets, as well as the sum of cash, cash equivalents and restricted cash as reported on our consolidated statement of cash flows in accordance with our adoption of the ASU discussed in Note 1 – Description of Business and Significant Accounting Policies.

                                           | April 26, 2019 | April 26, 2018
------------------------------------------ | -------------- | --------------
Cash                                       | $ 2,216        | $ 2,727
Cash equivalents                           | 109            | 214
Cash and cash equivalents                  | $ 2,325        | $ 2,941
Short-term restricted cash                 | 5              | 5
Long-term restricted cash                  | 1              | 1
Restricted cash                            | $ 6            | $ 6
Cash, cash equivalents and restricted cash | $ 2,331        | $ 2,947

. Financial Information
 Cash equivalents
 table presents cash equivalents consolidated balance sheets cash flows ASU Note 1 Business Accounting Policies.
 April 26, 2019 2018
 Cash $ 2,216 $ 2,727
 equivalents 109
 $ 2,325 $ 2,941
 Short-term restricted cash 5
 Long-term restricted cash 1
 $ 6
 $ 2,331 $ 2,947


Preliminary Purchase Price Allocation
For the Assemble Systems, PlanGrid, and BuildingConnected acquisitions that were accounted for as business combinations, Autodesk recorded the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair values assigned to the identifiable intangible assets acquired were based on estimates and assumptions determined by management. Autodesk recorded the excess of consideration transferred over the aggregate fair values as goodwill. The goodwill recorded is primarily attributable to synergies expected to arise after the acquisition. There is no amount of goodwill that is deductible for U.S. income tax purposes.
The following table summarizes the fair value of the assets acquired and liabilities assumed by major class for the business combinations that were completed during the fiscal year ended January 31, 2019:
(1) During Q4 of fiscal 2019, Autodesk recorded a measurement period adjustment related to the valuation of the deferred tax liability associated with the Assemble Systems acquisition. This adjustment increased goodwill and reduced net tangible assets by $0.1 million.
For the three business combinations in fiscal 2019, the determination of estimated fair values of certain assets and liabilities is derived from estimated fair value assessments and assumptions by Autodesk. For PlanGrid and BuildingConnected, Autodesk's estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). For the three business combinations in fiscal 2019, the tax impact of the acquisition is also subject to change within the measurement period. Different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill.

                                                               | Assemble Systems (1) | PlanGrid | BuildingConnected | Total
-------------------------------------------------------------- | -------------------- | -------- | ----------------- | --------
Developed technologies                                         | $4.4                 | $78.0    | $12.5             | $94.9
Customer relationships and other non-current intangible assets | 12.0                 | 98.0     | 26.9              | 136.9
Trade name                                                     | 2.8                  | 20.0     | 6.8               | 29.6
Goodwill                                                       | 72.0                 | 588.7    | 206.3             | 867.0
Deferred revenue (current and non-current)                     | (1.7)                | (25.5)   | (2.8)             | (30.0)
Net tangible assets                                            | 4.1                  | 18.4     | 3.5               | 26.0
Total                                                          | $93.6                | $777.6   | $253.2            | $1,124.4

Preliminary Purchase Price Allocation
 Assemble Systems PlanGrid BuildingConnected acquisitions Autodesk recorded assets liabilities assumed estimated fair values date acquisition. values assets estimates management. excess consideration goodwill. goodwill attributable synergies after acquisition. no goodwill deductible U. S. income tax.
 table summarizes fair value assets acquired liabilities assumed business combinations fiscal year January 31, 2019
 Q4 2019 Autodesk recorded adjustment deferred tax liability Assemble Systems acquisition. increased goodwill reduced net tangible assets by $0. 1 million.
 combinations estimated fair values assets assessments assumptions Autodesk. PlanGrid BuildingConnected estimates assumptions subject change one year acquisition. tax impact change. Different estimates assumptions different valuations assets liabilities goodwill.
 Assemble Systems PlanGrid BuildingConnected
 Developed technologies.
 Customer relationships non-current intangible assets.26. 9 136.
 2. 8 20. 6. 29.
 72. 206.
 Deferred revenue. (25. (2. (30.
 4. 18. 3. 5 26.
 $93. 6 $777. $253. $1,124.


AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
10. OTHER NON-CURRENT LIABILITIES
Other non-current liabilities consisted of the following:
The reduction in Deferred rent liability is a result of the Company’s adoption of the new lease accounting standard.

                                | As of             |
------------------------------- | ----------------- | -----------------
                                | December 31, 2019 | December 31, 2018
Deferred rent liability         | $—                | $506.7
Unearned revenue                | 525.9             | 504.6
Other miscellaneous liabilities | 411.1             | 253.8
Other non-current liabilities   | $937.0            | $1,265.1

AMERICAN TOWER CORPORATION SUBSIDIARIES FINANCIAL STATEMENTS millions
. NON-CURRENT LIABILITIES
 reduction Deferred rent liability new lease accounting standard.
 31, 2019
 Deferred rent liability $506.
 Unearned revenue 525. 504.
 liabilities. 253.
 non-current liabilities. $1,265.


Contractual Obligations
The following table summarizes our contractual obligations as of November 29, 2019:
As of November 29, 2019, our Term Loan’s carrying value was $2.25 billion. At our election, the Term Loan will bear interest at either (i) the London Interbank Offered Rate (“LIBOR”) plus a margin, based on our debt ratings, ranging from 0.500% to 1.000% or (ii) a base rate plus a margin, based on our debt ratings, ranging from 0.040% to 0.110%. Interest is payable periodically, in arrears, at the end of each interest period we elect. Based on the LIBOR rate at November 29, 2019, our estimated maximum commitment for interest payments was $23.2 million for the remaining duration of the Term Loan.
As of November 29, 2019, the carrying value of our Notes payable was $1.89 billion. Interest on our Notes is payable semi-annually, in arrears on February 1 and August 1. At November 29, 2019, our maximum commitment for interest payments was $200.1 million for the remaining duration of our Notes.
Our Term Loan and Revolving Credit Agreement contain similar financial covenants requiring us not to exceed a maximum leverage ratio. As of November 29, 2019, we were in compliance with this covenant. We believe this covenant will not impact our credit or cash in the coming fiscal year or restrict our ability to execute our business plan. Our senior notes do not contain any financial covenants.
Under the terms of our Term Loan and Revolving Credit Agreement, we are not prohibited from paying cash dividends unless payment would trigger an event of default or if one currently exists. We do not anticipate paying any cash dividends in the foreseeable future.

(in millions)                           |          |                  | Payment Due by Period |           |
--------------------------------------- | -------- | ---------------- | --------------------- | --------- | -----------------
                                        | Total    | Less than 1 year | 1-3 years             | 3-5 years | More than 5 years
Term Loan and Notes, including interest | $4,373.3 | $3,227.0         | $65.0                 | $65.0     | $1,016.3
Operating lease obligations, net        | 711.5    | 88.7             | 158.0                 | 126.9     | 337.9
Purchase obligations                    | 2,036.5  | 545.0            | 935.8                 | 555.7     | —
Total                                   | $7,121.3 | $3,860.7         | $1,158.8              | $747.6    | $1,354.2

Contractual Obligations
 table summarizes obligations November 29, 2019
 Term value $2. 25 billion. interest London Interbank Offered Rate margin 0. 500% to 1. 000% or base rate margin 0. 040% to. 110%. Interest payable periodically arrears end period. maximum commitment interest $23. 2 million remaining duration.
 value Notes $1. 89 billion. Interest payable semi-annually arrears February 1 August 1. maximum commitment interest $200. 1 million remaining duration.
 Term Loan Revolving Credit Agreement covenants not maximum leverage ratio. compliance covenant. impact credit cash restrict business plan. senior notes financial covenants.
 not prohibited cash dividends default. anticipate paying cash dividends.
 Payment Due Period
 Less than 1 year 1-3 years 3-5 years More than 5 years
 Term Loan Notes including interest $4,373. $3,227. $65.$65. $1,016.
 lease obligations 711. 88.
 2,036. 545. 935. 555.
 $7,121. $3,860. $1,158. $747. $1,354.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (United States Dollars in thousands, except per share data and unless otherwise indicated)
Fair value change in FCR liability
The following table reconciles the beginning and ending measurements of our FCR liability and highlights the activity that drove the fair value change in FCR liability included in our cost of revenue.
(1) Includes: (i) incentive payments from Bank Partners, which is the surplus of finance charges billed to borrowers over an agreedupon portfolio yield, a fixed servicing fee and realized net credit losses, (ii) cash received from recoveries on previously charged-off Bank Partner loans, and (iii) the proceeds received from transferring our rights to Charged-Off Receivables (as defined below) attributable to previously charged-off Bank Partner loans. We consider all monthly incentive payments from Bank Partners during the period to be related to billed finance charges on deferred interest products until monthly incentive payments exceed total billed finance charges on deferred products, which did not occur during any of the periods presented.
(2) Represents the reversal of previously billed finance charges associated with deferred payment loan principal balances that were repaid within the promotional period.
(3) A fair value adjustment is made based on the expected reversal percentage of billed finance charges (expected settlements), which is estimated at each reporting date. The fair value adjustment is recognized in cost of revenue in the Consolidated Statements of Operations.

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

ITEM. MANAGEMENT DISCUSSION ANALYSIS FINANCIAL CONDITION RESULTS States Dollars share
 Fair value change FCR liability
 table reconciles FCR liability cost revenue.
 Includes incentive payments Bank Partners surplus finance charges fixed servicing fee credit losses cash recoveries-off loans proceeds transferring rights Charged-Off Receivables. incentive payments finance charges deferred interest products charges.
 Represents reversal finance charges deferred loan principal balances repaid.
 fair value adjustment expected reversal finance charges estimated reporting date. recognized cost revenue Consolidated Statements Operations.
 Ended December 31,
 2017
 Beginning balance $138,589 $94,148 $68,064
 Receipts(1) 159,527 129,153 109,818
 Settlements(2) (262,449 (181,590) (127,029)
 Fair value changes cost revenue(3) 170,368 96,878 43,295
$138,589,148


Non-operating Corporate
Selling, general and administrative: Selling, general and administrative expenses from our Non-operating Corporate segment for the year ended December 31, 2019 decreased $8.6 million to $24.9 million from $33.5 million for the year ended December 31, 2018. The decrease was driven by reductions in bonus expense, consulting and professional service fees, and employee wage and benefits expenses.
The HC2 Compensation Committee establishes annual salary, cash and equity-based bonus arrangements for certain HC2 executive employees on an annual basis. In determining the amounts payable pursuant to such cash and equity-based bonus arrangements for these employees, the Company has historically measured the growth in the Company’s NAV in accordance with a formula established by HC2’s Compensation Committee ("Compensation NAV") in 2014.
The Compensation NAV is generally determined by dividing the end of year Compensation NAV per share by the beginning year Compensation NAV per share and subtracting 1 from this amount (the "NAV Return"), and then subtracting the required threshold return rate from the NAV Return. The hurdle rate has consistently been set at 7%, and the plan allows for the share of up to 12% of growth over and above the hurdle rate.
HC2’s accrual for cash and equity-based bonus arrangements of HC2 executive employees as of December 31, 2019 and 2018 resulted in a $4.4 million decrease in expense recognized. These changes reflect the underlying performance in the Compensation NAV in the respective periods. In 2019 the NAV did not meet the hurdle rate, while in 2018 it grew approximately 21%.
For 2019, Compensation NAV did not meet the hurdle rate, and declined by 26.1%, resulting primarily from external events that occurred in the fourth quarter at our Insurance segment, with respect to our views on the future of the management fee agreement, along with our expectations of future dividends, after recent and ongoing discussions with our domestic regulator.
In accordance with the terms of the plan, this decline in Compensation NAV directly reduces the deferred cash compensation awarded in 2017 and 2018. The total reduction recognized in 2019 was $0.8 million, related to the claw back of a portion of the 2017 and 2018 awards which were unpaid as of December 31, 2019. In addition, the plan requires that future NAV growth continues to be determined using the high water mark based on the beginning Compensation NAV established at the beginning of 2019.

                                    |         | Years Ended December 31, |
----------------------------------- | ------- | ------------------------ | ---------------------
                                    | 2019    | 2018                     | Increase / (Decrease)
Selling, general and administrative | $24.9   | $33.5                    | $(8.6)
Depreciation and amortization       | 0.1     | 0.1                      | —
Loss from operations                | $(25.0) | $(33.6)                  | $8.6

Non-operating Corporate
 Selling general administrative expenses December 31, 2019 decreased $8. 6 million to $24. 9 million from $33. 5 million 2018. decrease driven by reductions bonus expense consulting fees employee wage benefits expenses.
 HC2 Compensation Committee establishes annual salary cash equity bonus arrangements for employees. measured growth NAV formula 2014.
 determined by dividing subtracting 1 threshold return rate. hurdle rate at 7% plan allows 12% growth over hurdle rate.
 cash equity-based bonus arrangements December 31, 2019 2018 resulted $4. 4 million decrease in expense. performance Compensation NAV. 2019 hurdle rate 2018 grew 21%.
 NAV declined by 26. 1% external events Insurance segment future management fee agreement expectations future dividends discussions domestic regulator.
 decline NAV reduces deferred cash compensation 2017 2018. total reduction 2019 was $0.8 million claw back 2017 2018 awards unpaid December 31, 2019. plan requires future NAV growth high water mark Compensation NAV 2019.
 Years Ended December 31,
 2018 Increase
 Selling general administrative $24. $33.
 Depreciation amortization.
 Loss operations $(25. $8.


The table below summarizes our cash flows from continuing operations activities for each of the last two fiscal years (in thousands):
Operating Activities. Operating cash flows increased $64.4 million in 2019 compared with 2018 primarily due to favorable changes in working capital of  $37.0 million, primarily due to lower income tax payments of$41.3 million, and higher net income adjusted for non-cash items of $27.3 million
Pension and Postretirement Contributions — Our policy is to fund our pension plans at or above the minimum required by law. As of January 1, 2019, the date of our last actuarial funding valuation for our qualified pension plan, there was no minimum contribution funding requirement. In 2019 and 2018, we contributed $6.2 million and $5.5 million, respectively, to our pension and postretirement plans. We do not anticipate making any contributions to our qualified defined benefit pension plan in fiscal 2020. For additional information, refer to Note 12, Retirement Plans, of the notes to the consolidated financial statements.

                                                           | 2019     | 2018
---------------------------------------------------------- | -------- | ----------
Total cash provided by (used in) continuing operations:    |          |
Operating activities                                       | $168,405 | $104,055
Investing activities                                       | (13,819) | 65,661
Financing activities                                       | (5,730)  | (445,529)
Net increase (decrease) in cash from continuing operations | $148,856 | $(275,813)

table summarizes cash flows two years
. increased $64. 4 million 2019 2018 working capital $37. million lower income tax payments$41. 3 million higher net income non-cash $27. 3 million
 Pension Postretirement Contributions pension plans minimum. January 1 2019 no minimum contribution requirement. 2019 2018 contributed $6. 2 million $5. 5 million. contributions pension 2020. Note 12 Retirement Plans consolidated financial statements.
 Total cash operations
 $168,405 $104,055
 Investing (13,819) 65,661
 Financing (5,730)
 Net increase cash $148,856 $(275,813)


18. Trade and other payables  Significant accounting policies that apply to trade and other payables We initially recognise trade and other payables at fair value, which is usually the original invoiced amount. We subsequently carry them at amortised cost using the effective interest method.
a Deferred income recognised in prior periods has substantially been reclassified to contract liabilities on adoption of IFRS 15, see notes 1 and 2. The remaining balance includes £51m (2017/18: £132m, 2016/17: £71m) current and £586m (2017/18: £404m, 2016/17: £375m) non-current liabilities relating to the Broadband Delivery UK programme, for which grants received by the group may be subject to re-investment or repayment depending on the level of take-up.
b Other payables relate to operating lease liabilities and deferred gains on a 2001 sale and finance leaseback transaction.

                                   | 2019  | 2018  | 2017
---------------------------------- | ----- | ----- | -----
At 31 March                        | £m    | £m    | £m
Current                            |       |       |
Trade payables                     | 4,141 | 3,991 | 4,205
Other taxation and social security | 564   | 704   | 704
Other payables                     | 387   | 456   | 672
Accrued expenses                   | 630   | 492   | 382
Deferred income a                  | 68    | 1,525 | 1,474
                                   | 5,790 | 7,168 | 7,437

. Trade payables accounting policies recognise fair value original invoiced. carry amortised cost interest method.
 Deferred income reclassified contract liabilities IFRS 15. remaining balance includes £51m current £586m non-current liabilities Broadband Delivery UK programme grants re-investment repayment take-up.
 payables operating lease liabilities deferred gains 2001 sale leaseback transaction.
 2018 2017
 31 March £m
 Trade payables 4,141 3,991 4,205
 Other taxation social security 704
 Other payables 387 456
 Accrued expenses 630 382
 Deferred income 1,525
 5,790 7,168


ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is listed on the Nasdaq Global Market under the symbol “LWAY.” Trading commenced on March 29, 1988. As of March 16, 2020, there were approximately 147 holders of record of Lifeway’s Common Stock.
Common stock price
The following table shows the high and low sale prices per share of our common stock as reported on the Nasdaq Global Market for each quarter during the two most recent fiscal years:

               |        | Common Stock Price Range 2018
-------------- | ------ | -----------------------------
               | Low    | High
First Quarter  | $ 5.99 | $ 8.40
Second Quarter | $ 4.79 | $ 6.48
Third Quarter  | $ 2.66 | $ 4.63
Fourth Quarter | $ 1.88 | $ 3.39

EQUITY SECURITIES
 common stock Nasdaq Global Market. Trading commenced March 29, 1988. March 16 2020 147 holders Common Stock.
 table high low sale prices Nasdaq years
 First Quarter $ 5. 99 $ 8.
 Second Quarter $ 4. 79 $ 6.
 Third Quarter $ 2. 66 $ 4.
 Fourth Quarter $ 1. 88 $ 3.


TERM DEPOSITS
An analysis of the Group’s term deposits by currencies are as follows:
The effective interest rate for the term deposits of the Group with initial terms of over three months to three years during the year ended 31 December 2019 was 3.57% (2018: 4.08%).
Term deposits with initial terms of over three months were neither past due nor impaired. As at 31 December 2019, the carrying amounts of the term deposits with initial terms of over three months approximated their fair values.

                                | As at 31 December |
------------------------------- | ----------------- | -----------
                                | 2019              | 2018
                                | RMB’Million       | RMB’Million
Included in non-current assets: |                   |
RMB term deposits               | 19,000            | –
Included in current assets:     |                   |
RMB term deposits               | 28,598            | 55,180
USD term deposits               | 16,325            | 6,349
Other currencies                | 1,988             | 1,389
                                | 46,911            | 62,918
                                | 65,911            | 62,918

TERM DEPOSITS
 analysis deposits currencies
 effective interest rate deposits three months to years 31 December 2019 3. 57% (2018 4. 08%).
 deposits three months past due impaired. 31 December 2019 carrying amounts approximated fair values.
 non-current assets
 RMB deposits 19,000
 current assets
 RMB 28,598 55,180
 USD term deposits 16,325 6,349
 Other currencies 1,988,389


Note 19—Earnings Per Share ("EPS")
Basic EPS is computed by dividing net income attributable to Leidos common stockholders by the basic weighted average number of shares outstanding. Diluted EPS is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period. The dilutive effect of outstanding equity-based compensation awards is reflected in diluted EPS by application of the treasury stock method, only in periods in which such effect would have been dilutive for the period.
The Company issues unvested stock awards that have forfeitable rights to dividends or dividend equivalents. These stock awards are dilutive common share equivalents subject to the treasury stock method.
The weighted average number of shares used to compute basic and diluted EPS attributable to Leidos stockholders were:
Anti-dilutive stock-based awards are excluded from the weighted average number of shares outstanding used to compute diluted EPS. For fiscal 2019 and 2017, there were no significant anti-diluted equity awards. For fiscal 2018, there was 1 million of outstanding stock options and vesting stock awards that were anti-dilutive.

                                                                       |                 | Year Ended        |
---------------------------------------------------------------------- | --------------- | ----------------- | -----------------
                                                                       | January 3, 2020 | December 28, 2018 | December 29, 2017
                                                                       |                 | (in millions)     |
Basic weighted average number of shares outstanding                    | 143             | 151               | 152
Dilutive common share equivalents—stock options and other stock awards | 2               | 2                 | 2
Diluted weighted average number of shares outstanding                  | 145             | 153               | 154

19—Earnings Per Share ("EPS")
 computed net income Leidos by shares. Diluted EPS dilutive shares. dilutive effect equity compensation awards reflected in EPS treasury stock method.
 Company issues unvested stock awards forfeitable rights dividends. dilutive treasury stock method.
 weighted average shares EPS
 Anti-dilutive awards excluded. fiscal 2019 2017 no significant anti equity awards. 2018 1 million stock options stock awards anti-dilutive.
 January 3, 2020 December 28, 2018 December 29, 2017
 Basic weighted average shares outstanding 143 151  152
 Dilutive equivalents—stock options awards
 Diluted average 145 153 154


Segment Results
General
Reconciliation of segment revenue to total operating revenue is below:
(1) On May 1, 2017 we sold a portion of our data centers and colocation business. See Note 3—Sale of Data Centers and Colocation Business to our consolidated financial statements in Item 8 of Part II of this report, for additional information.

                                  |         | Year Ended December 31, |
--------------------------------- | ------- | ----------------------- | ------
                                  | 2019    | 2018                    | 2017
                                  |         | (Dollars in millions)   |
Operating revenue                 |         |                         |
International and Global Accounts | $3,596  | 3,653                   | 1,382
Enterprise                        | 6,133   | 6,133                   | 4,186
Small and Medium Business         | 2,956   | 3,144                   | 2,418
Wholesale                         | 4,074   | 4,397                   | 3,026
Consumer                          | 5,642   | 6,116                   | 6,451
Total segment revenue             | $22,401 | 23,443                  | 17,463
Operations and Other(1)           | —       | —                       | 193
Total operating revenue           | $22,401 | 23,443                  | 17,656

Segment Results
 Reconciliation revenue operating
 May 1, 2017 sold data centers colocation business. consolidated financial statements Item 8 Part II.
 Ended December 31,
 millions
 Operating revenue
 International Global Accounts $3,596 3,653
 Enterprise 6,133 4
 Small Medium Business 2,956
 Wholesale 4,074,397
 Consumer 5,642 6,116 6,451
 segment revenue $22,401 23,443 17,463
 Operations
 revenue $22,401


ITEM 3. KEY INFORMATION
Selected Financial Data
The following table sets forth our selected consolidated financial data as of and for each of the years in the five-year period ended December 31, 2019. The consolidated financial data has been derived from, and should be read in conjunction with, our Consolidated Financial Statements prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS), presented in “Item 18. Financial Statements” of this report.
Our selected financial data and our Consolidated Financial Statements are presented in euros, unless otherwise stated.
(1) See Note (C.6) to our Consolidated Financial Statements for more information on earnings per share.
(2) The balances include primarily bonds, private placements and bank loans. See Note (E.3) to our Consolidated Financial Statements for more information on our financial liabilities.

SELECTED FINANCIAL DATA: IFRS                         |        |        |        |        |
----------------------------------------------------- | ------ | ------ | ------ | ------ | ------
€ millions, unless otherwise stated                   | 2019   | 2018   | 2017   | 2016   | 2015
Income Statement Data: Years ended December 31,       |        |        |        |        |
Cloud revenue                                         | 6,933  | 4,993  | 3,769  | 2,993  | 2,286
Software licenses and support revenue                 | 16,080 | 15,628 | 15,780 | 15,431 | 14,928
Cloud and software revenue                            | 23,012 | 20,622 | 19,549 | 18,424 | 17,214
Total revenue                                         | 27,553 | 24,708 | 23,461 | 22,062 | 20,793
Operating profit                                      | 4,473  | 5,703  | 4,877  | 5,135  | 4,252
Profit after tax                                      | 3,370  | 4,088  | 4,046  | 3,629  | 3,056
Profit attributable to owners of parent               | 3,321  | 4,083  | 4,008  | 3,642  | 3,064
Earnings per share(1)                                 |        |        |        |        |
Basic in €                                            | 2.78   | 3.42   | 3.35   | 3.04   | 2.56
Diluted in €                                          | 2.78   | 3.42   | 3.35   | 3.04   | 2.56
Other Data:                                           |        |        |        |        |
Weighted-average number of shares outstanding         |        |        |        |        |
Basic                                                 | 1,194  | 1,194  | 1,197  | 1,198  | 1,197
Diluted                                               | 1,194  | 1,194  | 1,198  | 1,199  | 1,198
Statement of Financial Position Data: At December 31, |        |        |        |        |
Cash and cash equivalents                             | 5,314  | 8,627  | 4,011  | 3,702  | 3,411
Total assets                                          | 60,215 | 51,502 | 42,484 | 44,262 | 41,390
Current financial liabilities(2)                      | 3,273  | 1,125  | 1,561  | 1,813  | 841
Non-current financial liabilities(2)                  | 12,923 | 10,553 | 5,034  | 6,481  | 8,681
Issued capital                                        | 1,229  | 1,229  | 1,229  | 1,229  | 1,229
Total equity                                          | 30,822 | 28,877 | 25,515 | 26,382 | 23,295

ITEM 3.
 Financial Data
 table consolidated financial data five-year period December 31, 2019. derived Consolidated Financial Statements International Financial Reporting Standards 18.
 data euros.
 Note. earnings per share.
 balances include bonds private placements bank loans. Note. 3) financial liabilities.
 FINANCIAL DATA IFRS
 millions 2019 2018 2017 2016 2015
 Income Statement Data Years ended December 31,
 Cloud revenue 6,933 3,769 2,993 2,286
 Software licenses 16,080 15,628
 revenue 23,012 20,622 19,549 18,424
 Total revenue 27,553 24,708 23,461 22,062 20,793
 Operating profit 4,473 5,703 4,877,135
 Profit after tax 3,370 4,088 4,046 3,629
Profit owners 3,321 4,083  4,008 3,642 3,064
 Earnings per
 €.
.
 Weighted-average shares
 1,194
 Financial Position December 31,
 Cash equivalents 5,314  8,627  4,011  3,702  3,411
 Total assets 60,215  51,502  42,484 44,262  41
 3,273  1,125 1,561  1,813
 Non-current 12,923  10,553  5,034  6,481  8,681
 Issued capital 1,229
 Total equity 30,822  28,877  25,515  26,382 23,295


a) Vessels Under Construction and Upgrades
Teekay LNG's share of commitments to fund newbuilding and other construction contract costs as at December 31, 2019 are as follows:
(i) In June 2019, Teekay LNG entered into an agreement with a contractor to supply equipment on certain of its LNG carriers in 2021 and 2022, for an estimated installed cost of approximately $60.6 million. As at December 31, 2019, the estimated remaining cost of this installation is $49.7 million.
(ii) Teekay LNG has a 30% ownership interest in the Bahrain LNG Joint Venture which has an LNG receiving and regasification terminal in Bahrain. The Bahrain LNG Joint Venture has secured undrawn debt financing of $34 million, of which $10 million relates to Teekay LNG's proportionate share of the commitments included in the table above.

                               | Total  | 2020   | 2021   | 2022
------------------------------ | ------ | ------ | ------ | ------
                               | $      | $      | $      | $
Consolidated LNG carriers (i)  | 49,652 | 11,979 | 22,382 | 15,291
Bahrain LNG Joint Venture (ii) | 11,351 | 11,351 | —      | —
                               | 61,003 | 23,330 | 22,382 | 15,291

Vessels Construction Upgrades
 Teekay LNG commitments costs December 31, 2019
 June 2019 Teekay LNG agreement supply equipment LNG carriers 2021 2022 estimated cost $60. 6 million. December 31, 2019 remaining cost $49. 7 million.
 LNG 30% ownership Bahrain LNG Joint Venture LNG terminal Bahrain. debt financing $34 million $10 million Teekay LNG commitments.
 2020 2021 2022
 Consolidated LNG carriers 49,652 11,979 22,382 15,291
 Bahrain LNG Joint Venture


Disaggregated revenue
The Group’s revenues by geographic region based on end-users who purchased our products or services are as follows:
Revenues from the United States totaled approximately $529 million, $386 million, and $281 million for the fiscal years ended 2019, 2018, and 2017, respectively. Revenues from our country of domicile, the United Kingdom, totaled approximately $86 million, $63 million, and $46 million for the fiscal years ended 2019, 2018, and 2017, respectively. No one customer has accounted for more than 10% of revenue for the fiscal years ended 2019, 2018, and 2017.

             |            | Fiscal Year Ended June 30, |
------------ | ---------- | -------------------------- | ------------
             | 2019       | 2018                       | 2017
             |            | (U.S. $ in thousands)      |
             |            | *As Adjusted               | *As Adjusted
Americas     | $603,959   | $439,363                   | $317,432
EMEA         | 474,712    | 347,509                    | 193,790
Asia Pacific | 131,456    | 94,106                     | 115,462
             | $1,210,127 | $880,978                   | $626,684

revenue
 Group’s revenues region end-users
 Revenues United States $529 million $386 million $281 million 2019 2018 2017. United Kingdom $86 million $63 million $46 million. No customer 10% revenue.
 Fiscal Year Ended June 30
 2019 2018
.
 Adjusted
 Americas $603,959 $439,363 $317,432
 EMEA 474,712 347,509 193,790
 Asia Pacific 131,456 94,106 115,462
 $1,210,127 $880,978 $626,684


(1) Totals may not sum due to rounding.
(2) CEO transition costs include stock-based compensation of $16.4 million related to the acceleration of eligible stock awards in conjunction with the Company's former CEOs' transition agreements for the fiscal year ended January 31, 2018.
Our non-GAAP financial measures may exclude the following:
Stock-based compensation expenses. We exclude stock-based compensation expenses from non-GAAP measures primarily because they are non-cash expenses and management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, we believe excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies.
Amortization of developed technologies and purchased intangibles. We incur amortization of acquisition-related developed technology and purchased intangibles in connection with acquisitions of certain businesses and technologies. Amortization of developed technologies and purchased intangibles is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Management finds it useful to exclude these variable charges from our cost of revenues to assist in budgeting, planning and forecasting future periods. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of developed technologies and purchased intangible assets will recur in future periods.
CEO transition costs. We exclude amounts paid to the Company's former CEOs upon departure under the terms of their transition agreements, including severance payments, acceleration of restricted stock units, and continued vesting of performance stock units, and legal fees incurred with the transition. Also excluded from our non-GAAP measures are recruiting costs related to the search for a new CEO. These costs represent non-recurring expenses and are not indicative of our ongoing operating expenses. We further believe that excluding the CEO transition costs from our non-GAAP results is useful to investors in that it allows for period-over-period comparability
Goodwill impairment. This is a non-cash charge to write-down goodwill to fair value when there was an indication that the asset was impaired. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods
Restructuring and other exit costs, net. These expenses are associated with realigning our business strategies based on current economic conditions. In connection with these restructuring actions or other exit actions, we recognize costs related to termination benefits for former employees whose positions were eliminated, the closure of facilities and cancellation of certain contracts. We exclude these charges because these expenses are not reflective of ongoing business and operating results. We believe it is useful for investors to understand the effects of these items on our total operating expenses.
Acquisition related costs. We exclude certain acquisition related costs, including due diligence costs, professional fees in connection with an acquisition, certain financing costs, and certain integration related expenses. These expenses are unpredictable, and dependent on factors that may be outside of our control and unrelated to the continuing operations of the acquired business, or our Company. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition related costs, may not be indicative of such future costs. We believe excluding acquisition related costs facilitates the comparison of our financial results to the Company's historical operating results and to other companies in our industry.
(Gain) loss on strategic investments and dispositions. We exclude gains and losses related to our strategic investments and dispositions from our non-GAAP measures primarily because management finds it useful to exclude these variable gains and losses on these investments and dispositions in assessing our financial results. Included in these amounts are non-cash unrealized gains and losses on the derivative components, dividends received, realized gains and losses on the sales or losses on the impairment of these investments and dispositions. We believe excluding these items is useful to investors because these excluded items do not correlate to the underlying performance of our business and these losses or gains were incurred in connection with strategic investments and dispositions which do not occur regularly.
Discrete tax items. We exclude the GAAP tax provision, including discrete items, from the non-GAAP measure of net (loss) income, and include a non-GAAP tax provision based upon the projected annual non-GAAP effective tax rate. Discrete tax items include income tax expenses or benefits that do not relate to ordinary income from continuing operations in the current fiscal year, unusual or infrequently occurring items, or the tax impact of certain stock-based compensation. Examples of discrete tax items include, but are not limited to, certain changes in judgment and changes in estimates of tax matters related to prior fiscal years, certain costs related to business combinations, certain changes in the realizability of deferred tax assets or changes in tax law. Management believes this approach assists investors in understanding the tax provision and the effective tax rate related to ongoing operations. We believe the exclusion of these discrete tax items provides investors with useful supplemental information about our operational performance.
Establishment of a valuation allowance on certain net deferred tax assets. This is a non-cash charge to record a valuation allowance on certain deferred tax assets. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various cash expenses to assist in budgeting, planning and forecasting future periods
Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded from the non-GAAP measures relate to the tax impact on the difference between GAAP and non-GAAP expenses, primarily due to stock-based compensation, amortization of purchased intangibles and restructuring charges and other exit costs (benefits) for GAAP and non-GAAP measures.

                                          |         | Fiscal Year Ended January 31, |
----------------------------------------- | ------- | ----------------------------- | -------
                                          | 2019    | 2018                          | 2017
                                          |         | (Unaudited)                   |
Diluted net (loss) income per share       | $(0.37) | $(2.58)                       | $(2.61)
Stock-based compensation expense          | 1.12    | 1.11                          | 1.00
Amortization of developed technologies    | 0.08    | 0.08                          | 0.18
Amortization of purchased intangibles     | 0.08    | 0.09                          | 0.14
CEO transition costs (2)                  | —       | 0.09                          | —
Acquisition related costs                 | 0.07    | —                             | —
Restructuring and other exit costs, net   | 0.14    | 0.43                          | 0.35
(Gain) loss on strategic investments      | (0.05)  | 0.08                          | —
Discrete tax provision items              | (0.14)  | (0.09)                        | (0.01)
Income tax effect of non-GAAP adjustments | 0.08    | 0.31                          | 0.45
Non-GAAP diluted income (loss) per share  | $1.01   | $(0.48)                       | $(0.50)

Totals sum due rounding.
 CEO transition costs include stock-based compensation $16. 4 million acceleration stock awards former CEOs' transition agreements fiscal year ended January 31, 2018.
 non-GAAP financial measures exclude
 Stock-based compensation expenses. assess operating expenses budgeting forecasting. varying valuation methodologies award types excluding allows comparisons between core business results other companies.
 Amortization of technologies purchased intangibles. incur amortization acquisition-related technology intangibles acquisitions. Amortization inconsistent affected by timing size. charges budgeting planning forecasting. intangible assets contributed to revenues future. Amortization assets recur future periods.
 CEO transition costs. exclude amounts paid to former CEOs departure transition agreements severance payments acceleration restricted stock units vesting performance stock units legal fees. excluded recruiting costs new CEO. non-recurring expenses not indicative of ongoing operating expenses.excluding CEO transition costs from non-GAAP results useful allows period-over-period comparability
 Goodwill impairment. non-cash charge write-down goodwill fair value asset impaired. management non-cash charges assess operating expenses budgeting planning forecasting
 Restructuring exit costs. realigning business strategies economic conditions. costs termination benefits employees facilities cancellation contracts. exclude charges not reflective business results. useful investors understand effects on total operating expenses.
 Acquisition related costs. exclude due diligence professional fees financing costs integration expenses. expenses unpredictable dependent factors control unrelated business. size complexity acquisition not indicative future costs. excluding costs facilitates comparison financial results historical operating results other companies industry.
 (Gain loss strategic investments dispositions. exclude gains losses non-GAAP measures financial results. Included non-cash unrealized gains losses derivative components dividends realized gains losses sales impairment investments dispositions.excluding items useful investors correlate performance business losses gains incurred strategic investments dispositions.
 Discrete tax items. exclude GAAP tax provision from non-GAAP net income non-GAAP tax provision projected annual non-GAAP tax rate. tax items include expenses ordinary income unusual items tax impact stock-based compensation. include changes judgment estimates costs business combinations realizability deferred tax assets changes tax law. approach assists investors understanding tax provision effective tax rate. exclusion tax items provides supplemental information operational performance.
 valuation allowance on net deferred tax assets. non-cash charge. exclude non-cash charges assess cash expenses budgeting planning forecasting
 Income tax effects GAAP non-GAAP costs expenses. excluded non-GAAP relate due stock-based compensation amortization purchased intangibles restructuring charges exit costs.
 Fiscal Year Ended January 31,
 2019 2018 2017

 Diluted income per share. 37. 58). 61
 Stock-based compensation. 12. 11.
 Amortization technologies. 08.
 purchased intangibles.
 transition costs.
 Acquisition costs. 07
 Restructuring exit costs. 14.
 loss strategic investments. 05. 08
 tax provision. 14. 09.
 Income tax effect non-GAAP adjustments. 08. 31.
 Non-GAAP diluted income (loss share. 01. 48. 50


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share data)
NOTE 20 — Geographic Data
Financial information relating to our operations by geographic area were as follows:
Sales are attributed to countries based upon the origin of the sale.

                       |          | Years Ended December 31, |
---------------------- | -------- | ------------------------ | --------
Net Sales              | 2019     | 2018                     | 2017
United States          | $279,904 | $313,489                 | $287,092
Singapore              | 32,957   | 6,724                    | 5,596
Taiwan                 | 19,810   | 20,802                   | 18,586
China                  | 87,342   | 79,380                   | 66,510
Czech Republic         | 33,214   | 36,528                   | 34,476
Other non-U.S.         | 15,772   | 13,560                   | 10,733
Consolidated net sales | $468,999 | $470,483                 | $422,993

FINANCIAL STATEMENTS
 Geographic Data
 Sales countries origin sale.
 Ended December 31,
 Net Sales
 United States $279,904 $313,489 $287,092
 Singapore 32,957
 Taiwan,802
 China 87,342 79,380
 Czech Republic 33,214 36,528 34,476
. 15,772 13,560 10,733
 Consolidated net sales $468,999 $470,483 $422,993


8. Financing Receivables and Operating Leases
(a) Financing Receivables
Financing receivables primarily consist of lease receivables, loan receivables, and financed service contracts. Lease receivables represent sales-type and direct-financing leases resulting from the sale of Cisco’s and complementary third-party products and are typically collateralized by a security interest in the underlying assets. Lease receivables consist of arrangements with terms of four years on average. Loan receivables represent financing arrangements related to the sale of our hardware, software, and services, which may include additional funding for other costs associated with network installation and integration of our products and services. Loan receivables have terms of three years on average. Financed service contracts include financing receivables related to technical support and advanced services. Revenue related to the technical support services is typically deferred and included in deferred service revenue and is recognized ratably over the period during which the related services are to be performed, which typically ranges from one to three years.
A summary of our financing receivables is presented as follows (in millions):

July 27, 2019             | Lease Receivables | Loan Receivables | Financed Service Contracts | Total
------------------------- | ----------------- | ---------------- | -------------------------- | -------
Gross                     | $2,367            | $5,438           | $2,369                     | $10,174
Residual value            | 142               | —                | —                          | 142
Unearned income           | (137)             | —                | —                          | (137)
Allowance for credit loss | (46)              | (71)             | (9)                        | (126)
Total, net  .             | $2,326            | $5,367           | $2,360                     | $10,053
Reported as:              |                   |                  |                            |
Current .                 | $1,029            | $2,653           | $1,413                     | $5,095
Noncurrent                | 1,297             | 2,714            | 947                        | 4,958
Total, net  .             | $2,326            | $5,367           | $2,360                     | $10,053

. Financing Receivables Operating Leases
 Financing Receivables
 lease loan financed service contracts. Lease sales direct-financing products collateralized security interest. four years. Loan sale hardware software services additional funding network installation. three years. Financed service contracts technical support advanced services. Revenue support deferred revenue recognized one to three years.
 summary financing receivables millions):
 July 27, 2019 Lease Receivables Loan Receivables Financed Service Contracts Total
 Gross $2,367 $5,438 $2 $10,174
 Residual value 142
 Unearned income (137)
 Allowance credit loss
 net. $2,326  $5,367  $2,360 $10,053
 Current. $1,029 $2,653 $1,413 $5,095
 Noncurrent 1,297 2,714
 net. $2,326 $5,367 $2,360 $10,053


Advertising Costs: Advertising costs amounted to $278,057, $365,859, and $378,217, for the years ended September 30, 2019, 2018, and 2017, respectively, and are charged to expense when incurred.
Net Income Per Share: Basic and diluted net income per share is computed by dividing net income by the weighted average number of common shares outstanding and the weighted average number of dilutive shares outstanding, respectively.
There were 268,000 and 108,000 shares for the years ended September 30, 2019 and 2018, respectively, that were excluded from the above calculation as they were considered antidilutive in nature. No shares were considered antidilutive for the year ended September 30, 2017.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. Significant estimates include the rebates related to revenue recognition, stock based compensation and the valuation of inventory, long-lived assets, finite lived intangible assets and goodwill. Actual results may differ materially from these estimates.
Recently Issued Accounting Pronouncements: In February 2016, the FASB issued ASU 2016-02, Leases. There have been further amendments, including practical expedients, with the issuance of ASU 2018-01 in January 2018, ASU 2018-11 in July 2018 and ASU 2018-20 in December 2018. The amended guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The update is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those reporting periods, with early adoption permitted. The guidance will be applied on a modified retrospective basis with the earliest period presented. Based on the effective date, this guidance will apply beginning October 1, 2019. The adoption of ASU 2016-02 will have no impact to retained earnings or net income. Upon adoption of ASU 2016-02 on October 1, 2019, we anticipate recording a right-of-use asset and an offsetting lease liability of approximately $2.3 to $2.9 million.
In January 2017, the FASB issued ASU 2017-04 Intangibles-Goodwill, which offers amended guidance to simplify the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. A goodwill impairment will now be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the amount of goodwill allocated to that reporting unit. This guidance is to be applied on a prospective basis effective for the Company’s interim and annual periods beginning after January 1, 2020, with early adoption permitted for any impairment tests performed after January 1, 2017. The Company does not believe the adoption of this ASU will have a material impact on our financial statements.

                                                    | Year ended September 30, |            |
--------------------------------------------------- | ------------------------ | ---------- | ----------
                                                    | 2019                     | 2018       | 2017
Net income                                          | $4,566,156               | $4,274,547 | $3,847,839
Weighted average common shares                      | 13,442,871               | 13,429,232 | 13,532,375
Dilutive potential common shares                    | 8,343                    | 23,628     | 128,431
Weighted average dilutive common shares outstanding | 13,451,214               | 13,452,860 | 13,660,806
Earnings per share:                                 |                          |            |
Basic                                               | $0.34                    | $0.32      | $0.28
Diluted                                             | $0.34                    | $0.32      | $0.28

Advertising Costs $278,057 $365,859 $378,217 years September 2019 2018 2017 charged expense incurred.
 Net Income Per Share diluted computed common dilutive shares.
 268,000 108,000 shares 2019 2018 excluded antidilutive. No shares antidilutive September 30 2017.
 Use Estimates financial statements requires estimates assumptions assets liabilities revenues expenses contingent assets liabilities. estimates include rebates revenue recognition stock based compensation valuation inventory long-lived assets intangible assets goodwill. results may differ estimates.
 Accounting Pronouncements 2016, FASB issued ASU 2016-02, Leases. amendments ASU 2018-01 January 2018-11 July 2018 2018-20 December 2018. requires recognition lease assets liabilities. effective reporting periods after December 15, 2018 early permitted. retrospective earliest period. October 1, 2019. adoption ASU 2016-02 no impact earnings net income.adoption ASU 2016-02 October 1, 2019 recording right-of-use asset offsetting lease liability $2. 3 $2. 9 million.
 January 2017 FASB issued ASU 2017-04 Intangibles-Goodwill accounting goodwill impairment removing Step 2 test. carrying value fair value goodwill. interim annual periods January 1, 2020 early adoption tests January 1 2017. adoption impact financial statements.
 Year ended September 30,
 2018
 Net income $4,566,156  $4,274,547 $3,847,839
 common shares 13,442,871 13,429,232 13,532,375
 Dilutive potential common shares 8,343 128,431
 13,451,214,806
 Earnings per share
.
.


Restricted Stock Units
The Company grants restricted stock units, or RSUs, to employees with various vesting terms. RSUs entitle the holder to receive, at no cost, one common share for each restricted stock unit on the vesting date as it vests. The Company withholds shares in settlement of employee tax withholding obligations upon the vesting of restricted stock units. Stock-based compensation related to grants of vested RSUs and PSUs was $3.0 million, $1.6, million and $1.0 million in 2019, 2018 and 2017, respectively.
The following table summarizes RSU’s activity under the 2019 Plan and 2009 Plan, and the related weighted average grant date fair value, for 2019, 2018 and 2017:

                               |                  | RSUs & PRSUs Outstanding
------------------------------ | ---------------- | --------------------------------------
                               | Number of Shares | Weighted Average Grant Date Fair Value
                               | (in thousands)   |
Nonvested at January 1, 2017   | 98               | $23.52
Granted                        | 132              | 19.74
Vested                         | (43)             | 20.44
Forfeited                      | (19)             | —
Nonvested at January 1, 2018   | 168              | 21.56
Granted                        | 110              | 11.90
Vested                         | (77)             | 19.18
Forfeited                      | (18)             | —
Nonvested at December 30, 2018 | 183              | 17.22
Granted                        | 353              | 10.77
Vested                         | (118)            | 14.48
Forfeited                      | (41)             | —
Nonvested at December 29, 2019 | 377              | $12.55

Stock Units
 Company grants employees. one share. withholds shares tax obligations vesting. Stock-based compensation RSUs PSUs $3. million $1. 6 million $1. million 2019 2018 2017.
 table summarizes activity 2019 2009 Plan weighted average grant date fair value 2019 2018
 RSUs PRSUs
 Shares Weighted Average Grant Date Fair Value
 Nonvested January 1 2017 $23. 52
 Granted. 74
 Vested. 44
 Forfeited
 Nonvested January 1 2018.
 Granted.
 Vested.
 Forfeited
 Nonvested December 30, 2018.
 Granted.
 Vested.
 Forfeited
 Nonvested December 29, 2019 $12.