Interest Expense:
Interest expense increased in fiscal 2019 compared to fiscal 2018 primarily due to higher average borrowings resulting from our issuance of $10.0 billion of senior notes in November 2017, which was partially offset by a reduction in interest expense resulting primarily from the maturities and repayments of $2.0 billion of senior notes during fiscal 2019 and $6.0 billion of senior notes during fiscal 2018.

Year Ended May 31,    |        |        |                |
--------------------- | ------ | ------ | -------------- | ------
                      |        |        | Percent Change |
(Dollars in millions) | 2019   | Actual | Constant       | 2018
Interest expense      | $2,082 | 3%     | 3%             | $2,025

Interest Expense
 increased 2019 2018 due higher borrowings issuance $10. billion senior notes 2017 offset reduction maturities repayments $2. billion 2019 $6. billion 2018.
 Year Ended May 31,
 Percent Change
 millions 2019 2018
 Interest expense $2,082 3% $2,025


Notes to Consolidated Financial Statements (continued)
Reconciliations of total segment net revenues and total segment operating income to consolidated net revenues and consolidated income before income tax expense are presented in the table below (amounts in millions):
(1) Includes other income and expenses from operating segments managed outside the reportable segments, including our Distribution business. Also includes unallocated corporate income and expenses.
(2) Reflects the net effect from recognition (deferral) of deferred net revenues, along with related cost of revenues, on certain of our online-enabled products.
(3) Intersegment revenues reflect licensing and service fees charged between segments.
(4) Reflects fees and other expenses, such as legal, banking, and professional services fees, related to the acquisition of King and associated integration activities, including related debt financings.
(5) Reflects restructuring initiatives, which include severance and other restructuring-related costs.
(6) Reflects a non-cash accounting charge to reclassify certain cumulative translation gains (losses) into earnings due to the substantial liquidation of certain of our foreign entities.
(7) Reflects the impact of other unusual or unique tax-related items and activities.

                                                                                |        | Years Ended December 31, |
------------------------------------------------------------------------------------------------ | ------ | ------------------------ | ------
                                                                                | 2019   | 2018                     | 2017
Reconciliation to consolidated net revenues:                                                     |        |                          |
Segment net revenues                                                                             | $5,969 | $6,835                   | $6,765
Revenues from non-reportable segments (1)                                                        | 462    | 480                      | 410
Net effect from recognition (deferral) of deferred net revenues (2)                              | 101    | 238                      | (139)
Elimination of intersegment revenues (3)                                                         | (43)   | (53)                     | (19)
Consolidated net revenues                                                                        | $6,489 | $7,500                   | $7,017
Reconciliation to consolidated income before income tax expense:                                 |        |                          |
Segment operating income                                                                         | $2,054 | $2,446                   | $2,417
Operating income (loss) from non-reportable segments (1)                                         | 24     | 31                       | (19)
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues (2) | 52     | 100                      | (71)
Share-based compensation expense                                                                 | (166)  | (209)                    | (178)
Amortization of intangible assets                                                                | (203)  | (370)                    | (757)
Fees and other expenses related to the acquisition of King (4)                                   | —      | —                        | (15)
Restructuring costs (5)                                                                          | (137)  | (10)                     | (15)
Other non-cash charges (6)                                                                       | —      | —                        | (14)
Discrete tax-related items (7)                                                                   | (17)   | —                        | (39)
Consolidated operating income                                                                    | 1,607  | 1,988                    | 1,309
Interest and other expense (income), net                                                         | (26)   | 71                       | 146
Loss on extinguishment of debt                                                                   | —      | 40                       | 12
Consolidated income before income tax expense                                                    | $1,633 | $1,877                   | $1,151

Consolidated Financial Statements
 Reconciliations revenues operating income before tax expense table
 Includes income expenses Distribution business. unallocated corporate income expenses.
 Reflects deferred revenues online-enabled products.
 Intersegment revenues reflect licensing service fees between segments.
 Reflects acquisition King integration debt financings.
 restructuring initiatives severance costs.
 non-cash accounting charge gains liquidation foreign entities.
 impact tax-related items activities.
 Years Ended December 31,
 Reconciliation to consolidated net revenues
 Segment net revenues $5,969 $6,835  $6,765
 Revenues from non-reportable segments 462
 Net effect deferred revenues
 Elimination intersegment revenues
 Consolidated net revenues $6,489 $7,500,017
 Reconciliation to consolidated income before tax expense
 operating income $2,054 $2,446 $2,417
income non-reportable segments 24 31
 52 (71)
 Share-based compensation expense (166) (209) (178)
 Amortization intangible assets (203) (370) (757)
 Fees expenses acquisition King
 Restructuring costs (137)
 non-cash charges
 tax items
 Consolidated operating income 1,607 1,988 1,309
 Interest expense (26) 146
 Loss extinguishment debt
 Consolidated income tax $1,633 $1,877


Allocation of Goodwill to Reporting Segment
The following table shows our goodwill balances by reportable segment:
As noted above, it was determined under a quantitative assessment that there was no impairment of goodwill. However, if we become aware of indicators of impairment in future periods, we may be required to perform an interim assessment for some or all of our reporting units before the next annual assessment. Examples of such indicators may include a decrease in expected net earnings, adverse equity market conditions, a decline in current market multiples, a decline in our common stock price, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, unanticipated competition, strategic decisions made in response to economic or competitive conditions, or a more likely than not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of. In the event of significant adverse changes of the nature described above, we may have to recognize a non-cash impairment of goodwill, which could have a material adverse effect on our consolidated financial condition and results of operations.

(In millions)                                     | Food Care | Product Care | Total
------------------------------------------------- | --------- | ------------ | ---------
Gross Carrying Value at December 31, 2017         | $ 576.5   | $ 1,554.1    | $ 2,130.6
Accumulated impairment                            | (49.6 )   | (141.2)      | (190.8)
Carrying Value at December 31, 2017               | $ 526.9   | $ 1,412.9    | $ 1,939.8
Acquisition, purchase price and other adjustments | (0.6 )    | 18.2         | 17.6
Currency translation                              | (6.6 )    | (3.2)        | (9.8)
Gross Carrying Value at December 31, 2018         | $ 568.9   | $ 1,568.9    | $ 2,137.8
Accumulated impairment                            | (49.2 )   | (141.0)      | (190.2)
Carrying Value at December 31, 2018               | $ 519.7   | $ 1,427.9    | $ 1,947.6
Acquisition, purchase price and other adjustments | 6.3       | 257.0        | 263.3
Currency translation                              | 2.0       | 4.1          | 6.1
Gross Carrying Value at December 31, 2019         | $ 577.2   | $ 1,830.0    | $ 2,407.2
Accumulated impairment                            | (49.3 )   | (141.0)      | (190.3)
Carrying Value at December 31, 2019               | $ 527.9   | $ 1,689.0    | $ 2,216.9

Allocation Goodwill Reporting Segment
 table shows goodwill balances by segment
 no impairment goodwill. indicators impairment interim assessment units before annual assessment. net earnings adverse equity market conditions market multiples common stock price legal factors business climates adverse action unanticipated competition decisions sold. significant adverse changes non impairment goodwill financial condition results operations.
 Product Care
 Gross Carrying Value December 31, 2017 $ 576. $ 1,554. $ 2,130.
 Accumulated impairment (49. (141. (190.
 Carrying Value December 31, 2017 $ 526. $ 1,412. $ 1,939.
 Acquisition purchase adjustments. 18.
 Currency.
 Gross Carrying Value December 31, 2018 $ 568. $ 1,568. $ 2,137.
 Accumulated impairment (49. (141. (190.
 Carrying Value December 31, 2018 $ 519. $ 1,427.$ 1,947.
 adjustments 6. 257. 263.
 2. 4. 6.
 Carrying Value December 31, 2019 $ 577. 1,830. 2,407.
 (49.
 Value December $ 527. 1,689. 2,216.


Item 6. Selected Financial Data
The following selected financial data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this report.
The Consolidated Statements of Income data for fiscal 2019, fiscal 2018 and fiscal 2017, and the Consolidated Balance Sheets data as of April 27, 2019 and April 28, 2018, are derived from, and are qualified by reference to, our audited consolidated financial statements included elsewhere in this report. The Consolidated Statements of Income data for fiscal 2016 and fiscal 2015, and the Consolidated Balance Sheets data as of April 29, 2017, April 30, 2016 and May 2, 2015 are derived from audited consolidated financial statements not included in this report.
(1) Fiscal 2019 includes $3.5 million of pre-tax legal expense relating to the Hetronic litigation. See Note 9, "Commitments and Contingencies," in our consolidated financial statements for more information. During Fiscal 2019, we engaged in initiatives to reduce overall costs and improve operational profitability, which increased costs during the period by $6.9 million.
Fiscal 2019 also includes pre-tax acquisition expenses of $15.4 million related to the acquisition of Grakon, income of $5.8 million for an international government grant for maintaining certain employment levels during the period and $7.4 million of stock-based compensation expense related to the re-estimation of RSA compensation expense based upon target levels of performance.
The results for fiscal 2019 also include a discrete tax benefit from the re-measurement of the deemed repatriated foreign earnings associated with the Tax Cuts and Jobs Act ("U.S. Tax Reform") of $4.8 million and a tax benefit of $2.0 million for foreign investment tax credits. In addition, fiscal 2019 includes net tariff expense on imported Chinese goods of $2.3 million.
(2) Fiscal 2018 includes $8.1 million of pre-tax legal expense relating to the Hetronic litigation. Fiscal 2018 also includes pre-tax acquisition expenses of $6.8 million related to the acquisitions of Procoplast and Pacific Insight, income of $7.3 million for an international government grant for maintaining certain employment levels during the period and a $6.0 million stock-based compensation expense reversal related to the re-estimation of RSA compensation expense based upon threshold levels of performance.
The results for fiscal 2018 also includes a provisional estimated tax charge of $53.7 million as a result of U.S. Tax Reform and a tax benefit of $9.8 million for foreign investment tax credits.
(3) Fiscal 2017 includes $11.0 million of pre-tax legal expense relating to the Hetronic litigation. Fiscal 2017 also includes pre-tax exit costs for two reporting units of $2.3 million, pre-tax acquisition expenses of $1.5 million, primarily related to a potential acquisition we elected not to undertake, and income of $4.5 million for an international government grant for maintaining certain employment levels during the period.
The results for fiscal 2017 include a tax benefit of $4.0 million for foreign investment tax credits, partially offset by a tax expense of $1.7 million on a dividend between foreign entities. (4) Fiscal 2016 includes $9.9 million of pre-tax legal expense relating to the Hetronic litigation.
(5) Fiscal 2015 includes a goodwill pre-tax impairment charge of $11.1 million, a pre-tax gain on the sale of a business of $7.7 million and $3.1 million of pre-tax legal expense relating to the Hetronic litigation. Fiscal 2015 also includes a $5.0 million tax benefit related to the release of a valuation allowance against deferred tax assets in Malta.

                                                        |                    |                    | Fiscal Year Ended  |                    |
------------------------------------------------------- | ------------------ | ------------------ | ------------------ | ------------------ | ---------------
(In Millions, Except Percentages and Per Share Amounts) | April 27, 2019 (1) | April 28, 2018 (2) | April 29, 2017 (3) | April 30, 2016 (4) | May 2, 2015 (5)
Income Statement Data:                                  |                    |                    |                    |                    |
Net Sales                                               | $1,000.3           | $908.3             | $816.5             | $809.1             | $881.1
Income before Income Taxes                              | 103.6              | 123.8              | 115.9              | 110.9              | 120.8
Income Tax Expense                                      | 12.0               | 66.6               | 23.0               | 26.3               | 19.8
Net Income                                              | 91.6               | 57.2               | 92.9               | 84.6               | 101.1
Per Common Share Data:                                  |                    |                    |                    |                    |
Basic Net Income                                        | 2.45               | 1.54               | 2.49               | 2.21               | 2.61
Diluted Net Income                                      | 2.43               | 1.52               | 2.48               | 2.20               | 2.58
Dividends                                               | 0.44               | 0.40               | 0.36               | 0.36               | 0.36
Book Value                                              | 18.43              | 16.82              | 14.53              | 12.61              | 11.82
Balance Sheet Data:                                     |                    |                    |                    |                    |
Total Debt                                              | 292.6              | 57.8               | 27.0               | 57.0               | 5.0
Retained Earnings                                       | 545.2              | 472.0              | 427.0              | 358.6              | 356.5
Fixed Assets, Net                                       | 191.9              | 162.2              | 90.6               | 93.0               | 93.3
Total Equity                                            | 689.7              | 630.0              | 541.1              | 470.1              | 459.0
Total Assets                                            | 1,231.7            | 915.9              | 704.0              | 655.9              | 605.8
Other Financial Data:                                   |                    |                    |                    |                    |
Return on Average Equity                                | 13.9%              | 9.8%               | 18.6%              | 18.2%              | 23.5%
Pre-tax Income as a Percentage of Sales                 | 10.4%              | 13.6%              | 14.2%              | 13.7%              | 13.7%
Net Income as a Percentage of Sales                     | 9.2%               | 6.3%               | 11.4%              | 10.5%              | 11.5%

Item 6. Selected Financial Data
 Item 7 Discussion Analysis Financial Condition Results consolidated financial statements notes.
 Consolidated Statements Income 2019 2017 Balance Sheets April 27, 28, derived statements. 2016 2015, Balance Sheets April 2 derived.
 Fiscal 2019 $3. 5 million pre-tax legal expense Hetronic. Note 9 Contingencies. reduce costs improve profitability increased costs $6. 9 million.
 pre-tax acquisition expenses $15. 4 million Grakon income $5. 8 million government grant $7. 4 million stock-based compensation expense re-estimation compensation.
 tax benefit repatriated foreign earnings Tax Cuts Jobs Act. $4. 8 million tax benefit $2. 0 million foreign investment tax credits. net tariff expense imported Chinese goods $2. 3 million.
 Fiscal 2018 $8. 1 million pre-tax legal expense Hetronic litigation. pre-tax acquisition expenses $6. 8 million Procoplast Pacific Insight income $7.international government grant employment $6. million stock compensation expense reversal RSA.
 2018 tax charge $53. 7 million. Tax Reform tax benefit $9. 8 million foreign investment tax credits.
 2017 $11. million pre-tax expense Hetronic litigation. pre-tax exit costs $2. 3 million acquisition expenses $1. 5 million $4. 5 million grant.
 tax benefit $4. million foreign investment tax credits offset tax expense $1. 7 million dividend entities. 2016 $9. million pre-tax legal expense Hetronic.
 2015 goodwill pre-tax impairment charge $11. 1 million-tax gain sale business $7. 7 million $3. 1 million-tax legal expense Hetronic litigation. $5. million tax benefit valuation allowance deferred tax assets Malta.
 Fiscal Year
 April 27, 2019 28, 2018 2017 2016 2 2015
 Income Statement
 Net Sales $1,000. $908.
Income Taxes 103. 123. 115. 110. 120.
 Tax Expense 12. 66. 23. 26. 19.
 Income 91. 57. 92. 84. 101.
 Share Data
 Income 2. 45. 54. 49. 21. 61
 Income. 52. 58
. 44. 36.
 18. 43 16. 82 14. 53 12. 61 11.
 Balance Sheet Data
 Total Debt 292. 57. 27. 57. 5.
 Earnings 545. 472. 427. 358. 356.
 Fixed Assets 191. 162. 90. 93. 93.
 Total Equity 689. 630. 541. 470. 459.
 Assets 1,231. 915. 704. 655. 605.
 Financial Data
 Average Equity 13. 9. 18. 23.
 Pre-tax Income Percentage 10. 13. 14. 13.
 Income Percentage.2%. 3% 11. 5%.


Note 22. Supplemental Financial Information
Cash paid for income taxes amounted to $77.6 million, $25.9 million and $48.4 million during fiscal 2019, 2018 and 2017, respectively. Cash paid for interest on borrowings amounted to $347.9 million, $85.3 million and $82.5 million during fiscal 2019, 2018 and 2017, respectively.
A summary of additions and deductions related to the valuation allowance for deferred tax asset accounts for the years ended March 31, 2019, 2018 and 2017 follows (amounts in millions):

                                             | Balance at Beginning of Year | Additions Charged to Costs and Expenses | Additions Charged to Other Accounts | Deductions | Balance at End of Year
-------------------------------------------- | ---------------------------- | --------------------------------------- | ----------------------------------- | ---------- | ----------------------
Valuation allowance for deferred tax assets: |                              |                                         |                                     |            |
Fiscal 2019                                  | $204.5                       | $16.2                                   | $175.8                              | $(64.4)    | $332.1
Fiscal 2018                                  | $210.1                       | $36.2                                   | $—                                  | $(41.8)    | $204.5
Fiscal 2017                                  | $161.8                       | $15.2                                   | $37.6                               | $(4.5)     | $210.1

. Information
 Cash income taxes $77. 6 million $25. 9 million $48. 4 million 2019 2018 2017. interest borrowings $347. 9 million $85. 3 million $82. 5 million 2019 2017.
 summary additions deductions valuation deferred tax accounts March 2019 2018 2017
 Balance Additions Costs Expenses End
 Valuation allowance deferred tax assets
 2019 $204. $16. $175. $332.
 2018 $210. $36. $204.
 2017 $161. $15. $37. $210.


The Group has assumed that mortality will be in line with nationally published mortality table S2NA with CMI 2018 projections related to members’ years of birth with long-term rate of improvement of 1.5% per annum. These tables translate into an average life expectancy for a pensioner retiring at age 65 as follows:
It is assumed that 50% of non-retired members of the Scheme will commute the maximum amount of cash at retirement (2018: 50% of
non-retired members of the Scheme will commute the maximum amount of cash at retirement).

                                           | 2019  |       | 2018  |
------------------------------------------ | ----- | ----- | ----- | -----
                                           | Men   | Women | Men   | Women
                                           | Years | Years | Years | Years
Member aged 65 (current life expectancy)   | 86.8  | 88.9  | 87.3  | 89.3
Member aged 45 (life expectancy at age 65) | 88.5  | 90.7  | 89.0  | 91.1

Group assumed mortality mortality table S2NA CMI 2018 projections years birth long-term improvement 1. 5% per annum. tables translate average life expectancy pensioner retiring 65
 50% non-retired members commute maximum cash retirement
 cash.
 Women
 Member aged 65 life expectancy 86. 8 88. 9 87. 3 89. 3
 45 expectancy 65 88. 5 90. 7 89. 91.


Key Performance Indicators
Key performance indicators, which we do not consider to be non-GAAP measures, that we use to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions include Monthly Recurring Revenue ("MRR") and Gross Merchandise Volume ("GMV"). Our key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.
The following table shows MRR and GMV for the years ended December 31, 2019 and 2018.

                          | Years ended December 31, |
------------------------- | ------------------------ | -----------
                          | 2019                     | 2018
                          | (in thousands)           |
Monthly Recurring Revenue | $53,898                  | $40,932
Gross Merchandise Volume  | $61,138,457              | $41,103,238

Key Performance Indicators
 non-GAAP business performance trends financial projections strategic decisions include Monthly Recurring Revenue Gross Merchandise Volume. different.
 table shows MRR GMV years ended December 31, 2019 2018.
 thousands
 Monthly Recurring Revenue $53,898 $40,932
 Gross Merchandise Volume $61,138,457 $41,103,238


FLNG segment
Total operating revenues: On May 31, 2018, the Hilli was accepted by the customer and, accordingly, commenced operations. The Hilli generated $218.1 million of total operating revenues, as a result of a full year of operations during 2019, in relation to her liquefaction services, compared to $127.6 million in 2018.
Vessel operating expenses: The Hilli incurred $53.7 million of vessel operating expenses for the year ended December 31, 2019, as a result of a full year of operations in 2019, compared to $26.3 million in 2018 following commencement of operations on May 31, 2018.
Voyage, charterhire and commission expenses: The decrease in voyage, charterhire and commission expenses of $0.9 million to $0.5 million for the year ended December 31, 2019 compared to $1.4 million in 2018, is due to lower bunker consumption as a result of the Hilli undergoing commissioning in preparation for her commercial readiness in 2018.
Administrative expenses: Administrative expenses increased by $1.5 million to $1.4 million for the year ended December 31, 2019 compared to a credit $0.2 million in 2018, principally due to an increase in corporate expenses, salaries and employee benefits following the full year of operation of the Hilli, compared to seven months in 2018.
Project development expenses: This relates to non-capitalized project-related expenses comprising of legal, professional and consultancy costs. The decrease was due to the commencement of capitalization of engineering consultation fees in relation to the Gimi GTA Project following the Gimi entering Keppel's shipyard for her conversion into a FLNG in December 2018.
Depreciation and amortization: Following the Hilli's commencement of operations on May 31, 2018, depreciation and amortization of the vessel was recognized. A full year of depreciation was recognized for the year ended December 31, 2019 compared to the seven months of depreciation in 2018.
Other operating (losses)/gains: Included in other operating (losses)/gains are: • realized gain on the oil derivative instrument, based on monthly billings above the base tolling fee under the LTA of $13.1 million for the year ended December 31, 2019 compared to $26.7 million in 2018; • unrealized loss on the oil derivative instrument, due to changes in oil prices above a contractual floor price over term of the LTA of $39.1 million for the year ended December 31, 2019 compared to unrealized loss of $10.0 million in 2018; and • write-off of $3.0 million and $12.7 million of unrecoverable receivables relating to OneLNG for the year ended December 31, 2019 and 2018, respectively.
Equity in net losses of affiliates: In April 2018, we and Schlumberger decided to wind down OneLNG and work on FLNG projects on a case-by-case basis.

                                                      |          | December 31, |          |
----------------------------------------------------- | -------- | ------------ | -------- | --------
(in thousands of $)                                   | 2019     | 2018         | Change   | % Change
Total operating revenues                              | 218,096  | 127,625      | 90,471   | 71%
Vessel operating expenses                             | (53,689) | (26,317)     | (27,372) | 104%
Voyage expenses, charter-hire and commission expenses | (460)    | (1,363)      | 903      | (66)%
Administrative expenses                               | (1,371)  | 175          | (1,546)  | (883)%
Project development expenses                          | (2,939)  | (16,526)     | 13,587   | (82)%
Depreciation and amortization                         | (48,088) | (28,193)     | (19,895) | 71%
Other operating (losses)/gains                        | (28,963) | 2,749        | (31,712) | (1,154)%
Operating income                                      | 82,586   | 58,150       | 24,436   | 42%
Equity in net losses of affiliates                    | —        | (2,047)      | 2,047    | (100)%

FLNG segment
 revenues May 31, 2018 Hilli accepted commenced operations. generated $218. 1 million revenues full year operations 2019 $127. 6 million 2018.
 Vessel operating expenses Hilli incurred $53. 7 million December 31, 2019 $26. 3 million 2018.
 Voyage charterhire commission expenses decrease $0. 9 million $0. 5 million 2019 $1. 4 million 2018 lower bunker consumption commissioning commercial readiness.
 Administrative expenses increased $1. 5 million $1. 4 million 2019 $0. 2 million 2018 corporate expenses salaries employee benefits.
 Project development expenses legal professional consultancy costs. engineering consultation fees Gimi GTA Project conversion FLNG 2018.
 Depreciation amortization operations May 31, 2018 recognized. full year depreciation December 31, 2019 seven months 2018.
 operating (losses/gains realized gain oil derivative instrument billings base tolling fee $13.million December 2019 $26. 7 million 2018 unrealized loss oil derivative instrument prices $39. 1 million $10. 0 million 2018 write-off $3. 0 million $12. 7 million unrecoverable receivables OneLNG 2019 2018.
 net losses April 2018 OneLNG FLNG projects case-by-case.
 2019 2018
 revenues 218,096 127,625 90,471 71%
 Vessel operating expenses (53,689) (26,317) (27,372 104%
 Voyage charter-hire commission
 Administrative expenses (1,371
 Project development expenses (2,939) (16,526)
 Depreciation amortization (48,088) (28,193) 71%
 Other operating/gains (28,963)
 Operating income 82,586 58,150 24,436 42%
 Equity net losses affiliates


The reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense is as follows:
(1) In 2018, we recorded $3.5 million of tax expense related to foreign earnings which were not permanently reinvested prior to the enactment of the U.S. Tax Act. After enactment, certain foreign earnings are taxed at higher statutory rates than the U.S. which results in $2.1 million of incremental tax expense in 2019. In 2017, we provided for deferred taxes on all cumulative unremitted foreign earnings, as the earnings were no longer considered permanently reinvested resulting in a charge of $9.5 million.

                                                 |           | Years Ended September 30, |
------------------------------------------------ | --------- | ------------------------- | ----------
                                                 | 2019      | 2018                      | 2017
                                                 |           | (in thousands)            |
Tax expense at U.S. statutory rate               | $ 10,992  | $  3,124                  | $  (3,877)
State income taxes, net of federal tax effect    | 1,416     | (237)                     | (923)
Nondeductible expenses                           | 1,720     | 1,186                     | (185)
Change in reserve for tax contingencies          | (1,468)   | (1,047)                   | (4,435)
Change in deferred tax asset valuation allowance | (10,007)  | 8,784                     | 17,374
Foreign rate differential (1)                    | 2,149     | 5,684                     | 9,912
Tax credits                                      | (4,767)   | (2,656)                   | (3,459)
Impact of U.S. Tax Reform                        | —         | (7,053)                   | —
Global Intangible Low-Tax Income                 | 8,182     | —                         | —
Stock Based Compensation                         | (448)     | 59                        | 16
Non-controlling interest in equity arrangements  | 1,802     | 99                        | —
Other                                            | 1,469     | (850)                     | 235
Provision for income taxes                       | $  11,040 | $  7,093                  | $  14,658

reconciliation income tax. federal tax rate
 2018 recorded $3. million tax expense foreign earnings not reinvested. Tax Act. foreign earnings taxed higher rates. $2. 1 million tax expense 2019. 2017 deferred taxes unremitted foreign earnings $9. 5 million.
 Ended September 30
 2018
 Tax expense. statutory rate $ 10,992 $ 3,124,877
 State income taxes federal tax effect 1,416
 Nondeductible expenses 1,720
 Change reserve tax contingencies (1,468)
 deferred tax asset valuation allowance
 Foreign rate differential 2,149
 Tax credits (4,767)
 Impact. Tax Reform
 Intangible Low-Tax Income 8,182
 Stock Based Compensation
 Non-controlling interest equity arrangements 1,802
 Provision income taxes $ 11,040 $ 7,093 14


(1) For a description and reconciliation of non-GAAP financial measures presented in this document, please see the Non-GAAP Financial Measures page, or visit the Black Knight Investor Relations website at https://investor.blackknightinc.com.
(2) In 2019, the effect of our indirect investment in The Dun and Bradstreet Corporation was a reduction of Net earnings of $73.9 million primarily due to the effect of its purchase accounting adjustments, restructuring charges and other non-operating charges. In 2017, Net earnings includes a one-time, non-cash net tax benefit of $110.9 million related to the revaluation of our deferred income tax assets and liabilities as a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Reform Act”).

(in millions, except per share data)                          | 2019     | 2018     | 2017
------------------------------------------------------------- | -------- | -------- | --------
Revenues                                                      | $1,177.2 | $1,114.0 | $1,051.6
Adjusted Revenues(1)                                          | $1,177.7 | $1,116.5 | $1,056.1
Earnings before equity in losses of unconsolidated affiliates | $182.8   | $168.5   | $254.2
Net earnings(2)                                               | $108.8   | $168.5   | $254.2
Net earnings margin                                           | 9.2%     | 15.1%    | 24.2%
Net earnings attributable to Black Knight                     | $108.8   | $168.5   | $182.3
Net earnings attributable to Black Knight, per diluted share  | $0.73    | $1.14    | $1.47
Adjusted Net Earnings(1)                                      | $295.4   | $277.9   | $209.6
Adjusted EPS(1)                                               | $1.99    | $1.87    | $1.38
Adjusted EBITDA(1)                                            | $583.4   | $542.5   | $505.8
Adjusted EBITDA Margin(1)                                     | 49.5%    | 48.6%    | 47.9%

non-GAAP financial measures Black Knight Investor Relations website.
 2019 investment Dun and Bradstreet Corporation Net earnings $73. million purchase accounting adjustments restructuring charges non-operating charges. 2017-time non tax benefit $110. 9 million revaluation deferred income tax assets liabilities Tax Cuts Jobs Act 2017.
 Revenues $1,177. $1,114. $1,051.
 Adjusted $1,177. $1,116. $1,056.
 Earnings equity losses unconsolidated affiliates $182. $168. $254.
 $108. $168. $254.
 9. 24.
 earnings Black Knight $108. $168. $182.
 earnings share $0. $1. $1.
 Adjusted Net $295. $277. $209.
 $1. $1. $1.
 $583. $542. $505.
 49. 5% 48. 6% 47.


Goodwill Impairment and Restructuring Charges
A goodwill impairment charge of $9.2 million was recorded in 2018 and a $8.4 million goodwill impairment charge was recorded in 2017, both of which related to our Brazilian operations (see Note 7 of the notes to our consolidated financial statements). There were no restructuring charges incurred in the year ended December 31, 2018, compared to $0.8 million incurred in the year ended December 31, 2017. We incurred restructuring charges in the third quarter of 2017 associated with the closure of our Overland Park office, including termination benefits and other reorganization costs, primarily associated with integrating operations.

                                                    | For the Year Ended December 31, |        | Change Amount
--------------------------------------------------- | ------------------------------- | ------ | -------------
                                                    | 2018                            | 2017   |
                                                    | (dollars in thousands)          |        |
Goodwill impairment and restructuring charges:      |                                 |        |
Restructuring charges                               | $ -                             | $752   | $(752)
Goodwill impairment                                 | 9,174                           | 8,418  | 756
Total goodwill impairment and restructuring charges | $9,174                          | $9,170 | $4

Goodwill Impairment Restructuring Charges
 $9. 2 million 2018 $8. 4 million 2017 Brazilian operations Note 7. no restructuring charges December 31, 2018 $0. 8 million 2017. incurred restructuring charges third quarter 2017 closure Overland Park office termination benefits reorganization costs integrating operations.
 Year Ended December Change Amount
 2018 2017
 thousands
 Goodwill impairment restructuring charges
 $752
 9,174 8,418
 $9,174 $9,170 $4


Cost of Revenues and Gross Margins
Cost of revenues consists primarily of manufacturing materials, payroll, shipping and handling costs, manufacturing-related overhead and amortization of certain intangible assets. Our manufacturing operations rely on a limited number of suppliers to provide key components and materials for our products, some of which are a sole source. We order materials and supplies based on backlog and forecasted customer orders.
Tooling and setup costs related to changing manufacturing lots at our suppliers are also included in the cost of revenues. We expense all warranty costs, inventory provisions and amortization of certain intangible assets as cost of revenues. Gross profit and gross margin by segment were as follows (dollars in thousands):
Probe Cards Gross profit in the Probe Cards segment increased in fiscal 2019 compared to fiscal 2018 primarily due to increased sales, offset by higher variable costs and by less favorable product mix.
Systems Gross profit and gross margin in the Systems segment increased in fiscal 2019 compared to fiscal 2018 due to increased sales.
Corporate and Other Corporate and Other includes unallocated expenses relating to amortization of intangible assets, share-based compensation, restructuring charges, net, and acquisition-related costs, including charges related to inventory stepped up to fair value and other costs, which are not used in evaluating the results of, or in allocating resources to, our reportable segments.
Overall Gross profit and gross margin fluctuate with revenue levels, product mix, selling prices, factory loading and material costs. For fiscal 2019 compared to fiscal 2018, gross profit increased due to increased sales while gross margins remained relatively consistent with fluctuations in product mix.
Stock-based compensation expense included in gross profit for fiscal 2019 and 2018 was $4.1 million and $3.5 million, respectively.

             |             | Fiscal 2019 |                     |
------------ | ----------- | ----------- | ------------------- | --------
             | Probe Cards | Systems     | Corporate and Other | Total
Gross profit | $211,382    | $50,927     | $(24,813)           | $237,496
Gross margin | 43.0 %      | 51.9 %      | — %                 | 40.3 %
Fiscal 2018  |             |             |                     |
             | Probe Cards | Systems     | Corporate and Other | Total
Gross profit | $187,320    | $47,074     | $(24,055)           | $210,339
Gross margin | 43.1 %      | 49.3 %      | — %                 | 39.7 %
Fiscal 2017  |             |             |                     |
             | Probe Cards | Systems     | Corporate and Other | Total
Gross profit | $195,903    | $46,647     | $(26,953)           | $215,597
Gross margin | 43.1 %      | 49.8 %      | — %                 | 39.3 %

Cost Revenues Gross Margins
 manufacturing materials payroll shipping handling costs overhead amortization intangible assets. operations rely on limited suppliers components materials sole source. order based on backlog customer orders.
 Tooling setup costs included. expense warranty costs inventory provisions amortization intangible assets. Gross profit margin by segment
 Probe Cards Gross profit increased 2019 increased sales higher variable costs less product mix.
 Systems increased increased sales.
 Corporate Other includes unallocated expenses amortization intangible assets share-based compensation restructuring charges acquisition-related costs inventory value not used.
 Gross profit margin fluctuate with revenue product mix selling prices factory loading material costs. 2019 profit increased sales margins consistent.
 Stock-based compensation expense profit $4. 1 million $3. 5 million.
 Gross profit $211,382 $50,927 $(24,813) $237,496
 Gross margin 43. 9 %.%
 2018
 profit $187,320 $47,074(24,055 $210,339
 43. 1 % 49. 3 %. 7 %
 2017
 profit $195,903 $46,647 $(26,953) $215,597
 43. 1 % 49. 8 %. 3


Manoj Shetty
(1) Represents accelerated vesting of 20,687 stock options. Pursuant to Mr. Shetty's stock option agreement (January 17, 2019), if Mr.
Shetty’s employment is terminated without cause or for good reason within six months following a “change in control”, he will become
immediately vested in all outstanding unvested stock options, and all of Mr. Shetty’s outstanding options shall remain exercisable in
accordance with their terms, but in no event for less than 90 days after such termination
(2) Represents accelerated vesting of 8,107 unvested performance restricted stock units. Pursuant to Mr. Shetty's performance restricted
stock unit agreement (dated January 17, 2019), if Mr. Shetty’s employment is terminated without cause or for good reason within six
months following a “change in control” or if Mr. Shetty's employment is terminated due to death or total disability, all non-vested units
shall accelerate and be vested as of the date of termination.

Type of Payment                                                                                | Termination by Systemax without “Cause” or Resignation by Employee for “good reason” ($) | Termination Due to Death or Total Disability ($) Termination Due to Death or Total Disability ($) Termination Due to Death or Total Disability ($) | Change In Control Only ($) | Termination by Systemax without “Cause” or Resignation by Employee for “good reason” within a certain period of time following a Change in Control ($)
-------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------
Cash Compensation (Salary & Non-Equity Incentive Compensation Cash Compensation (Salary & Non-Equity Incentive | -                                                                                | -                                                                                | -                          | -
Value of Accelerated Vesting of Stock Option Awards                                                            | -                                                                                | -                                                                                | -                          | 74,100 (1)
Value of Accelerated Vesting of Restricted Stock Unit Awards                                                   | -                                                                                | -                                                                                | -                          | -
Value of Accelerated Vesting of Performance Restricted Stock Unit Awards                                       | - -                                                                                | 204,000 (2)                                                                                | -                          | 204,000 (2)
Medical and Other Benefits                                                                                | -                                                                                | -                                                                                | -                          | -
Total                                                                                | -                                                                                | 204,000                                                                                | -                          | 278,100

Manoj Shetty
 Represents accelerated vesting 20,687 stock options. agreement (January 17, if.
 employment terminated within six months
 immediately vested in all outstanding unvested stock options. remain exercisable
 less than 90 days after termination
 Represents accelerated vesting 8,107 unvested performance restricted stock units.
 agreement January 17, if. employment terminated within six
 months or. due death total disability all non-vested units
 accelerate vested date termination.
 Type Payment Termination by Systemax without or Resignation Due to Death or Total Disability Change In Control Only$ Termination Systemax without Resignation Control
 Cash Compensation (Salary Non-Equity Incentive
 Value Accelerated Vesting Stock Option Awards 74,100 (1)
Value Accelerated Vesting Restricted Stock Unit Awards
 Performance Stock Unit Awards 204,000 (2)
 Medical Other Benefits
 Total  204,000  278,100


9 Profit / (loss) on Ordinary Activities
The profit (2018: loss) on ordinary activities before taxation is stated after charging:

                                              | Year-ended 31 March 2019 | Year-ended 31 March 2018 Restated See note 2
--------------------------------------------- | ------------------------ | --------------------------------------------
                                              | $M                       | $M
Depreciation of property, plant and equipment | 11.8                     | 11.6
Amortisation of intangible assets             | 16.9                     | 25.2
Research and development expenditure          | (143.9)                  | (140.3)
Operating lease rentals:                      |                          |
Property                                      | 14.0                     | 12.5
Other                                         | 1.6                      | 1.6
Pension scheme contributions                  | 8.9                      | 8.4
Impairment of trade receivables               | 0.6                      | 0.6
Net foreign currency differences              | (1.5)                    | 6.9

Profit Ordinary Activities
 profit before taxation
 Year-ended 31 March 2019 March 2018
 Depreciation property plant equipment 11.
 Amortisation intangible assets 16. 25.
 Research development expenditure (143. (140.
 Operating lease rentals
 14. 12.
.
 Pension scheme contributions 8.
 Impairment trade receivables.
 foreign currency differences.


Gross profit
The recent shift in our revenue mix toward cloud arrangements has resulted in slower total gross profit growth as our cloud business continues to grow and scale. Revenue from cloud arrangements is generally recognized over the service period, while revenue from term and perpetual license arrangements is generally recognized upfront when the license rights become effective.
Gross profit
The increase in total gross profit in 2019 was primarily due to increases in cloud and maintenance revenue.
Gross profit percent
The decrease in cloud gross profit percent in 2019 was driven by an increase in costs as we accelerated our investments in cloud infrastructure and service delivery to support future growth. The decrease in consulting gross profit percent in 2019 was driven by a decrease in billable hours as consulting resources were transitioning to new projects after completing a large project and an increase in consulting resource availability as we continue growing and leveraging our partner network.

(Dollars in thousands) | 2019     |     | 2018     |     | Change   |
---------------------- | -------- | --- | -------- | --- | -------- | -----
Software license       | $275,792 | 99% | $282,950 | 98% | $(7,158) | (3)%
Maintenance            | 254,924  | 91% | 239,310  | 91% | 15,614   | 7%
Cloud                  | 67,918   | 51% | 45,218   | 55% | 22,700   | 50%
Consulting             | 2,727    | 1%  | 22,338   | 9%  | (19,611) | (88)%
                       | $601,361 | 66% | $589,816 | 66% | $11,545  | 2%

 shift revenue toward cloud profit growth business. Revenue from cloud recognized over service period term perpetual license recognized upfront when license rights effective.
 increase 2019 due to cloud maintenance revenue.
 decrease cloud profit 2019 driven by increase costs cloud infrastructure. decrease consulting decrease billable hours increase availability partner network.
 2019 2018 Change
 Software license  $275,792  99% $282,950 $(7,158) (3)%
 Maintenance  254,924  91% 239,310 7%
 Cloud  67,918  51% 45,218 55% 22,700 50%
 Consulting  2,727  1% 22,338 (19,611)
 $601,361 66% $589,816 $11,545 2%


The breakout of product and service gross profit was as follows:
We assess the carrying value of our inventory on a quarterly basis by estimating future demand and comparing that demand against on-hand and on-order inventory positions. Forecasted revenues information is obtained from the sales and marketing groups and incorporates factors such as backlog and future consolidated revenues. This quarterly process identifies obsolete and excess inventory. Obsolete inventory, which represents items for which there is no demand, is fully reserved. Excess inventory, which represents inventory items that are not expected to be consumed during the next twelve quarters for our Semiconductor Test, Industrial Automation and System Test segments and next four quarters for our Wireless Test segment, is written-down to estimated net realizable value.
During the year ended December 31, 2019, we recorded an inventory provision of $15.2 million included in cost of revenues, primarily due to downward revisions to previously forecasted demand levels for certain products. Of the $15.2 million of total excess and obsolete provisions, $8.7 million was related to Semiconductor Test, $4.0 million was related to Wireless Test, $2.0 million was related to System Test, and $0.5 million was related to Industrial Automation.
During the year ended December 31, 2018, we recorded an inventory provision of $11.2 million included in cost of revenues, primarily due to downward revisions to previously forecasted demand levels for certain products. Of the $11.2 million of total excess and obsolete provisions, $6.8 million was related to Semiconductor Test, $2.5 million was related to Wireless Test, $1.2 million was related to System Test, and $0.7 million was related to Industrial Automation.
During the years ended December 31, 2019 and 2018, we scrapped $9.2 million and $7.0 million of inventory, respectively, and sold $3.2 million and $6.7 million of previously written-down or written-off inventory, respectively. As of December 31, 2019, we had inventory related reserves for amounts which had been written-down or written-off totaling $103.6 million. We have no pre-determined timeline to scrap the remaining inventory.

                            | 2019     | 2018                  | 2018-2019 Dollar/Point Change
--------------------------- | -------- | --------------------- | -----------------------------
                            |          | (dollars in millions) |
Product gross profit        | $1,105.6 | $1,002.5              | $103.1
Percent of product revenues | 58.6%    | 58.0%                 | 0.6
Service gross profit        | $234.2   | $217.9                | $16.3
Percent of service revenues | 57.5%    | 58.7%                 | (1.2)

breakout product service profit
 carrying value inventory quarterly future demand inventory. Forecasted revenues sales marketing backlog future consolidated revenues. obsolete excess inventory. Obsolete inventory no demand reserved. Excess inventory twelve Semiconductor Industrial Wireless written-down net realizable value.
 December 31, 2019 inventory provision $15. 2 million due revisions demand. $8. 7 million Semiconductor Test $4. million Wireless Test $2. million System Test $0. 5 million Industrial Automation.
 December 2018 inventory provision $11. 2 million revisions demand. million $6. 8 million Semiconductor Test $2. 5 million Wireless Test $1. 2 million System Test $0. 7 million Industrial Automation.
 December 31, 2019 2018 scrapped $9. 2 million $7. million inventory sold $3. 2 million $6. 7 million written-down inventory. December 31, 2019 inventory reserves $103. 6 million.no timeline remaining inventory.
 Dollar/Point Change
 Product profit $1,105. $1,002. 5 $103.
 revenues 58. 6%. 0%.
 Service profit $234. $217. 9 $16.
 revenues 57. 5% 58. 7%.


Contractual Obligations
The following table sets forth our future payments due under contractual obligations as of December 31, 2019 (in thousands):
(1) Our debt obligations consist of principal and interest repayments due on our Credit Facility based on current interest rates.
(2) Amounts represent the minimum contractual cash commitments, including the effects of fixed rental escalation clauses and deferred rent, exclusive of certain contingent rents that are not determinable for future periods.
(3) Our purchase obligations consist of purchase commitments with various manufacturing suppliers to ensure the availability of components.
(4) Income tax obligations are a result of the Tax Act and include a transition tax on unremitted foreign earnings and profits, of which we have elected to pay the estimated amount over an eight-year period.
(5) Our pension funding commitments represent the amounts that we are required to pay to fund our pension plans.

                                                      | Total    | 1 year    | Less than 1-3 years | 3-5 years | More than 5 years
----------------------------------------------------- | -------- | --------- | ------------------- | --------- | -----------------
Debt obligations(1)                                   | $341,250 | $17,500   | 35,000              | 288,750   | —
Interest payments associated with debt obligations(1) | 36,555   | 8,532     | 15,726              | 12,297    | —
Operating lease obligations(2)                        | 152,778  | 22,727    | 33,275              | 20,387    | 76,389
Purchase obligations(3)                               | 192,981  | 192,803   | 178                 | —         | —
Income tax obligations(4)                             | 11,724   | 1,117     | 2,234               | 4,884     | 3,489
Pension funding commitment(5)                         | 173,830  | 6,113     | 12,712              | 20,203    | 134,802
Total                                                 | $909,118 | $ 248,792 | $ 99,125            | $ 346,521 | $ 214,680

Contractual Obligations
 future payments December 31, 2019
 debt obligations principal interest repayments Credit Facility interest rates.
 minimum cash commitments rental deferred rent contingent rents.
 purchase obligations suppliers.
 Income tax obligations Tax Act transition tax foreign earnings profits eight-year period.
 pension funding commitments plans.
 1 3-5 5
 Debt obligations(1) $341,250 $17,500  35,000 288,750
 Interest payments 36,555 8,532 15,726 12,297
 Operating lease 152,778 22,727 33,275 20,387
 Purchase obligations(3) 192,981 192,803
 Income tax obligations(4) 11,724 1,117 2,234 4,884
 Pension funding 173,830 6,113 12,712 20,203
 $909,118 $ 248,792 99,125 346,521


14. Income Taxes
The provision for income taxes consists of the following (in millions):

                           |                | Year Ended     |
-------------------------- | -------------- | -------------- | --------------
                           | April 26, 2019 | April 27, 2018 | April 28, 2017
Current:                   |                |                |
Federal                    | $ 26           | $ 764          | $ 22
State                      | 27             | 10             | 3
Foreign                    | 49             | 39             | 41
Total current              | 102            | 813            | 66
Deferred:                  |                |                |
Federal                    | 35             | 239            | 61
State                      | (6 )           | 27             | 17
Foreign                    | (32 )          | 4              | (4 )
Total deferred             | (3 )           | 270            | 74
Provision for income taxes | $ 99           | $ 1,083        | $ 140

. Income Taxes
 Ended
 April 26, 2019 April 27, 2018 28, 2017
 Current
 Federal $ 26 $ 764 $ 22
 State
 Foreign 49 39
 102 813 66
 Deferred
 Federal 35 239 61
 State 17
 Foreign
 deferred 270 74
 income taxes $ 99 $ 1,083 $ 140


ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
NOTE 5. INCOME TAXES
The geographic distribution of pretax income from continuing operations is as follows:

         |           | Years Ended December 31, |
-------- | --------- | ------------------------ | --------
         | 2019      | 2018                     | 2017
Domestic | $(20,597) | $22,325                  | $29,088
Foreign  | 87,791    | 150,051                  | 169,103
Total    | $67,194   | $172,376                 | $198,191

. FINANCIAL STATEMENTS share
. INCOME TAXES
 geographic distribution pretax income
 Ended December 31,
 Domestic $(20,597) $22,325 $29,088
 Foreign 87,791 150,051 169,103
 $67,194 $172,376 $198,191


Revenue
Revenue was $5,517.9 million and $5,878.3 million for 2019 and 2018, respectively. The decrease of $360.4 million, or 6.1% was primarily attributable to an 8.2%, 4.8% and 1.5% decrease in revenue in PSG, ASG and ISG, respectively, which is further explained below. Revenue by reportable segment for each were as follows (dollars in millions):
(1) Certain of the amounts may not total due to rounding of individual amounts.
Revenue from PSG
Revenue from PSG decreased by $249.9 million, or approximately 8%, which was due to a combination of a decrease in volume of products sold and a competitive pricing environment. The revenue in our Protection and Signal Division, Integrated Circuits Division, and High Power Division, decreased by $106.5 million, $96.6 million and $91.5 million, respectively. This was partially offset by an increase in revenue of $30.1 million and $15.0 million from our Foundry Services and Power Mosfet Division, respectively.
Revenue from ASG
Revenue from ASG decreased by $98.9 million, or approximately 5%, which was also due to a combination of a decrease in volume of products sold and a competitive pricing environment. The revenue in our Industrial and Offline Power Division and our Signal Processing, Wireless and Medical Division, decreased by $100.5 million and $56.4 million, respectively. This was partially offset by $84.8 million of revenue from Quantenna, which was acquired during 2019.
Revenue from ISG
Revenue from ISG decreased by $11.6 million, or 1.5%, which was due to a decrease in our Industrial Sensing Division revenue of $20.8 million, primarily due to decreased demand, which was partially offset by an increase in revenue in other divisions.

              | 2019      | As a % of Revenue (1) | 2018      | As a % of Revenue (1)
------------- | --------- | --------------------- | --------- | ---------------------
PSG           | $ 2,788.3 | 50.5 %                | $ 3,038.2 | 51.7 %
ASG           | 1,972.3   | 35.7 %                | 2,071.2   | 35.2 %
ISG           | 757.3     | 13.7 %                | 768.9     | 13.1 %
Total revenue | $ 5,517.9 |                       | $ 5,878.3 |

 $5,517. 9 million $5,878. 3 million 2019 2018. decrease $360. 4 million. 1% 8. 2% 4. 8% 1. 5% decrease PSG ASG ISG. segment
.
 PSG
 decreased $249. 9 million 8% volume competitive pricing. Protection Signal Integrated Circuits High Power decreased $106. 5 million $96. 6 million $91. 5 million. offset $30. 1 million $15. 0 million Foundry Services Power Mosfet Division.
 decreased $98. 9 million 5% competitive pricing. Industrial Offline Power Signal Processing Wireless Medical Division decreased $100. 5 million $56. 4 million. offset $84. 8 million revenue Quantenna acquired 2019.
 decreased $11. 6 million. 5% Industrial Sensing Division revenue $20. 8 million decreased demand offset increase divisions.
 PSG $ 2,788. 5 % 3,038. 7 %
 ASG 1,972.35. 7 % 2,071.
. 13. 7 %. %
 revenue $ 5,517. 5,878.


Item 2. Properties
The Company operates out of several facilities located around the world. Each facility is used for manufacturing its products and for administrative activities. The following table presents the location, size and terms of ownership/occupation:
The Company’s facility located in Mitchel Field, Long Island, New York, is part of the building that the Company constructed in 1981 and expanded in 1988 on land leased from Nassau County. In January 1998, the Company sold this building and the related land lease to Reckson Associates Realty Corp. (“Reckson”), leasing back the space that it presently occupies.
The Company leased its manufacturing and office space from Reckson under an initial 11-year lease followed by two five-year renewal periods which ended in January 2019. On July 25, 2018, the Company signed an amendment to the lease with RA 55 CLB LLC (as successor-in-interest to Reckson) which extended the current lease terms ten years and eight months through September 30, 2029. Pursuant to the amendment to the lease agreement, the Company shall pay a gradually increasing annual rent of $1,046,810 in 2019 to $1,276,056 in 2029. The Company believes the leased space is adequate to meet the Company’s domestic operational needs which encompass the principal operations of the FEI-NY segment and also serves as the Company’s world-wide corporate headquarters.
The Garden Grove, California facility is leased by the Company’s subsidiary, FEI-Zyfer. The facility consists of a combination office and manufacturing space. The Company has signed a second amendment to the lease, which extends the lease an additional 88 months, beginning October 1, 2017 and expiring January 31, 2025. The average annual rent over the period of the amendment is approximately $312,000. The Company believes the leased space is adequate to meet FEI-Zyfer’s operational needs.
The Tianjin, China facility is the location of the Company’s wholly-owned subsidiary, FEI-Asia. The subsidiary’s office and manufacturing facility is located in the Tianjin Free-Trade Zone. The lease was renewable annually with monthly rent of $8,500 through August 2019. As mentioned in Footnote 3, below, FEI-Asia was sold on May 21, 2019 and as a result the lease commitment transferred with the sale.
FEI-Elcom entered into a new lease agreement on February 1, 2018 regarding its Northvale, New Jersey facility. The facility consists of a combination office and manufacturing space. The lease, which expires in January 31, 2021, requires monthly payments of $9,673. The Company believes the leased space is adequate to meet FEI-Elcom’s operational needs.

Location         | Size (sq. ft.) | Own or Lease
---------------- | -------------- | ------------
Long Island, NY  | 93,000         | Lease
Garden Grove, CA | 27,850         | Lease
Tianjin, China   | 28,000         | Lease
Northvale, NJ    | 9,000          | Lease

. Properties
 Company operates facilities. manufacturing administrative activities. table location size ownership
 facility Mitchel Field Long Island New York constructed 1981 expanded 1988 Nassau County. 1998 sold building land to Reckson Realty Corp.
 leased manufacturing office space Reckson 11-year lease two five-year renewal periods ended January 2019. July 25, 2018 amendment lease RA 55 CLB LLC extended lease ten years eight months September 30, 2029. annual rent $1,046,810 2019 to $1,276,056 2029. leased space operational needs world-wide corporate headquarters.
 Garden Grove California facility leased subsidiary FEI-Zyfer. office manufacturing. second amendment 88 months October 1, 2017 expiring January 31, 2025. average annual rent $312,000. space needs.
 Tianjin China facility subsidiary FEI-Asia. manufacturing Tianjin Free-Trade Zone.lease renewable annually monthly rent $8,500 August 2019. FEI-Asia sold May 21, 2019 lease transferred.
 FEI-Elcom new lease February 1 2018 Northvale New Jersey. office manufacturing. expires January 31, 2021 monthly $9,673. space needs.
.
 Long Island NY 93,000
 Garden Grove CA 27,850
 Tianjin 28,000
 Northvale


Contract Costs
The following table provides changes in our contract acquisition costs and fulfillment costs:
Acquisition costs include commission fees paid to employees as a result of obtaining contracts. Fulfillment costs include third party and internal costs associated with the provision, installation and activation of telecommunications services to customers, including labor and materials consumed for these activities.
Deferred acquisition and fulfillment costs are amortized based on the transfer of services on a straight-line basis over the average customer life of 30 months for consumer customers and 12 to 60 months for business customers and amortized fulfillment costs are included in cost of services and products and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next twelve months are included in other current assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond the next twelve months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on an annual basis.

                            | Year Ended December 31, 2019 |
--------------------------- | ---------------------------- | -----------------
                            | Acquisition Costs            | Fulfillment Costs
                            | (Dollars in millions)        |
Beginning of period balance | $322                         | 187
Costs incurred              | 208                          | 158
Amortization                | (204)                        | (124)
End of period balance       | $326                         | 221

Contract Costs
 table changes acquisition fulfillment costs
 Acquisition costs include commission fees. Fulfillment costs third party internal costs telecommunications services labor materials.
 Deferred acquisition fulfillment costs amortized 30 months 12 to 60 months business services products selling administrative expenses consolidated statements operations. deferred costs amortized twelve months included current assets. amortized beyond included non-current assets. Deferred acquisition costs assessed impairment annual.
 Year Ended December 31, 2019
 Acquisition Fulfillment Costs
 millions
 Beginning period balance $322 187
 Costs incurred 208 158
 Amortization (204)
 End balance $326


Realized and unrealized (losses) gains on non-designated derivative instruments. Realized and unrealized (losses) gains related to derivative instruments that are not designated as hedges for accounting purposes are included as a separate line item in the consolidated statements of loss. Net realized and unrealized losses on non-designated derivatives were $13.7 million for 2019, compared to $14.9 million for 2018, as detailed in the table below:
The realized losses relate to amounts we actually realized for settlements related to these derivative instruments in normal course and amounts paid to terminate interest rate swap agreement terminations.
During 2019 and 2018, we had interest rate swap agreements with aggregate average net outstanding notional amounts of approximately $1.1 billion and $1.3 billion, respectively, with average fixed rates of approximately 3.0% and 2.9%, respectively. Short-term variable benchmark interest rates during these periods were generally less than 3.0% and, as such, we incurred realized losses of $8.3 million and $13.9 million during 2019 and 2018, respectively, under the interest rate swap agreements.
We did not incur any realized losses related to the termination of interest rate swaps in 2019, compared to realized losses of $13.7 million during 2018. Primarily as a result of significant changes in long-term benchmark interest rates during 2019 and 2018, we recognized unrealized losses of $7.9 million in 2019 compared to unrealized gains of $33.7 million in 2018 under the interest rate swap agreements.
During the year ended December 31, 2019, we recognized a reversal of previously unrealized losses of $26.9 million on all the warrants held by Teekay to purchase common units of Altera (or the Warrants) as a result of the sale of the Warrants to Brookfield, and we concurrently recognized a realized loss of $25.6 million during the same period. During the year ended December 31, 2018, we recognized unrealized losses of $21.1 million on the Warrants. Please read “Item 18 – Financial Statements: Note 12 – Fair Value Measurements and Financial Instruments.”

                                                               | Year Ended        | Year Ended
-------------------------------------------------------------- | ----------------- | -----------------
                                                               | December 31, 2019 | December 31, 2018
                                                               | $                 | $
Realized (losses) gains relating to:                           |                   |
Interest rate swap agreements                                  | (8,296)           | (13,898)
Interest rate swap agreement terminations                      | —                 | (13,681)
Foreign currency forward contracts                             | (147)             | —
Stock purchase warrants                                        | (25,559)          | —
Forward freight agreements                                     | 1,490             | 137
                                                               | (32,512)          | (27,442)
Unrealized (losses) gains relating to:                         |                   |
Interest rate swap agreements                                  | (7,878)           | 33,700
Foreign currency forward contracts                             | (200)             | —
Stock purchase warrants                                        | 26,900            | (21,053)
Forward freight agreements                                     | (29)              | (57)
                                                               | 18,793            | 12,590
Total realized and unrealized losses on derivative instruments | (13,719)          | (14,852)

unrealized gains non-designated derivative instruments. separate statements loss. losses $13. 7 million 2019 $14. 9 million 2018
 losses relate settlements interest rate swap terminations.
 2019 2018 interest swap agreements net amounts $1. 1 billion $1. 3 billion fixed rates 3. 0% 2. 9%. Short-term variable interest rates less than 3. 0% incurred losses $8. 3 million $13. 9 million 2019 2018.
 losses termination interest rate swaps 2019 losses $13. 7 million 2018. changes long-term interest rates recognized unrealized losses $7. 9 million 2019 gains $33. 7 million 2018.
 December 2019 recognized reversal unrealized losses $26. 9 million warrants Teekay Altera recognized loss $25. 6 million. 2018 unrealized losses $21. 1 million Warrants. 18 Financial Statements Note 12 Fair Value Measurements Financial Instruments.
Year Ended
 December 31, 2019 2018
 gains
 Interest rate swap agreements (8,296 (13,898
 Foreign currency contracts
 Stock warrants (25,559
 freight agreements
 (27,442
 Unrealized gains
 swap agreements (7,878) 33
 Foreign currency contracts
 Stock warrants 26,900 (21,053)
 freight agreements
 18,793
 losses derivative instruments (13,719)


3. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
Cash and cash equivalents primarily consist of deposits held at major banks, Tier-1 commercial paper debt securities and other securities with original maturities of 90 days or less. Marketable securities consist of Tier-1 commercial paper debt securities, corporate debt securities and certain other securities.
The amortized principal amounts of our cash, cash equivalents and marketable securities approximated their fair values at May 31, 2019 and 2018. We use the specific identification method to determine any realized gains or losses from the sale of our marketable securities classified as available-for-sale. Such realized gains and losses were insignificant for fiscal 2019, 2018 and 2017. The following table summarizes the components of our cash equivalents and marketable securities held, substantially all of which were classified as available-for-sale:
As of May 31, 2019 and 2018, approximately 33% and 26%, respectively, of our marketable securities investments mature within one year and 67% and 74%, respectively, mature within one to four years. Our investment portfolio is subject to market risk due to changes in interest rates. As described above, we limit purchases of marketable debt securities to investment-grade securities, which have high credit ratings and also limit the amount of credit exposure to any one issuer. As stated in our investment policy, we are averse to principal loss and seek to preserve our invested funds by limiting default risk and market risk.
Restricted cash that was included within cash and cash equivalents as presented within our consolidated balance sheets as of May 31, 2019 and 2018 and our consolidated statements of cash flows for the years ended May 31, 2019, 2018 and 2017 was nominal.

                                                | May 31, |
----------------------------------------------- | ------- | -------
(in millions)                                   | 2019    | 2018
Corporate debt securities and other             | $22,242 | $44,302
Commercial paper debt securities                | —       | 1,647
Money market funds                              | 5,700   | 6,500
Total investments                               | $27,942 | $52,449
Investments classified as cash equivalents      | $10,629 | $6,808
Investments classified as marketable securities | $17,313 | $45,641

. CASH EQUIVALENTS MARKETABLE SECURITIES
 equivalents deposits banks Tier-1 commercial debt securities maturities 90 days or less. Marketable securities Tier-1 commercial corporate.
 amortized cash equivalents securities fair values May 31, 2019 2018. identification gains losses sale-for-sale. insignificant 2019 2018 2017. table summarizes cash equivalents marketable securities available-for-sale
 May 31, 2019 2018 33% 26%, marketable securities investments mature one year 67% 74% one to four years. portfolio market risk interest rates. limit purchases investment-grade high credit ratings credit exposure issuer. averse to principal loss default risk market risk.
 Restricted cash cash equivalents balance sheets nominal.
 Corporate debt securities $22,242 $44,302
 Commercial paper debt securities 1,647
 Money market funds 5,700 6,500
 Total investments $27,942 $52,449
cash $10,629 $6,808
 securities $17,313,641


During 2019, 2018 and 2017, no income tax benefit or expense was recorded for stock options exercised as an adjustment to equity.
The change in the unrecognized income tax benefits for the years ended December 31, 2019, 2018 and 2017 is reconciled below:
As of December 31, 2019, 2018 and 2017, our total liability for unrecognized tax benefits was $1.5 million, $1.9 million and $2.4 million, respectively, of which $1.4 million, $1.7 million and $2.2 million, respectively, would reduce our effective tax rate if we were successful in upholding all of the uncertain positions and recognized the amounts recorded. We classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. As of December 31, 2019, 2018 and 2017, the balances of accrued interest and penalties were $0.5 million, $0.7 million and $0.8 million, respectively.
We do not anticipate a single tax position generating a significant increase or decrease in our liability for unrecognized tax benefits within 12 months of this reporting date. We file income tax returns in the U.S. for federal and various state jurisdictions and several foreign jurisdictions. We are not currently under audit by the Internal Revenue Service. Generally, we are not subject to changes in income taxes by any taxing jurisdiction for the years prior to 2016.

(In thousands)                                  | 2019   | 2018   | 2017
----------------------------------------------- | ------ | ------ | ------
Balance at beginning of period                  | $1,868 | $2,366 | $2,226
Increases for tax position related to:          |        |        |
Prior years                                     | —      | 3      | 465
Current year                                    | 161    | 254    | 285
Decreases for tax positions related to:         |        |        |
Prior years                                     | (71)   | —      | (14)
Expiration of applicable statute of limitations | (471)  | (755)  | (596)
Balance at end of period                        | $1,487 | $1,868 | $2,366

2019 2018 2017 no income tax benefit expense recorded for stock options equity.
 change in unrecognized income tax benefits 2019 reconciled
 total liability for tax benefits $1. 5 million $1. 9 million $2. 4 million. reduce effective tax rate uncertain positions. classify interest penalties as income tax expense. balances accrued interest penalties $0. 5 million $0. 7 million $0. 8 million.
 anticipate single tax position increase decrease liability tax benefits 12 months. file income tax returns. federal state jurisdictions foreign jurisdictions. not under audit Internal Revenue Service. not subject to changes income taxes years prior to 2016.
 Balance period $1,868 $2,366 $2,226
 Increases tax position
 years
 Decreases tax positions
 statute limitations
 Balance end period $1,487 $1,868 $2,366


Issuer Purchases of Equity Securities
(i) Includes 3,416 shares that have been withheld by the Company to satisfy its tax withholding and remittance obligations in connection with the vesting of restricted stock awards. In addition, the Company exercised a pro-rata portion of the 2022 convertible note hedges (described in Note 12, Indebtedness, of the Notes to the Consolidated Financial Statements) to offset the shares of the Company’s Class A common stock issued to settle the conversion of certain 2022 Notes. The note hedges were net share settled and the Company received 3,643,165 shares of the Company’s Class A common stock from the counterparties in October of 2018.
(ii) Excludes the shares received through the exercise of the note hedges.
(iii) The Company exercised a pro-rata portion of the 2022 convertible note hedges to offset the shares of the Company’s Class A common stock issued to settle the conversion of certain 2022 Notes. The note hedges were net share settled and the Company received 1,096,773 shares of the Company’s Class A common stock from the counterparties in November of 2018.

Period                    | Total number of Shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
------------------------- | -------------------------------- | ---------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------
October 1 to October 31   | 3,646,581 (i)                    | 97.28 (ii)                   | —                                                                                | —
November 1 to November 30 | 1,096,773 (iii)                  | — (ii)                       | —                                                                                | —
December 1 to December 31 | —                                | —                            | —                                                                                | —
Total                     | 4,743,354                        | 97.28 (ii)                   | —                                                                                | —

Issuer Purchases Equity Securities
 Includes 3,416 shares withheld Company tax withholding remittance obligations vesting restricted stock awards. Company exercised pro-rata 2022 convertible note hedges Note 12 Indebtedness Consolidated Financial Statements offset Class A common stock. net share settled received 3,643,165 shares common stock October 2018.
 Excludes shares received note hedges.
 exercised 2022 convertible note hedges offset Class A common stock. net share settled received 1,096,773 shares A common stock November 2018.
 Period Total Shares purchased Average price paid per share shares purchased plans programs Maximum value shares purchased
 October 1 to 31 3,646,581.
 November 1 to 30 1,096,773
 December 1 to 31
 Total 4,743,354.


18. Business Segments
We primarily derive our revenues from sales of our proprietary software (either as a direct license sale or under a subscription delivery model), which also serves as the basis for our recurring service contracts for software support and maintenance and certain transaction-related services. In addition, we provide various other client services, including installation, and managed services such as outsourcing, private cloud hosting and revenue cycle management.
During the first quarter of 2019, we realigned our reporting structure as a result of the divestiture of our investment in Netsmart on December 31, 2018, the evolution of the healthcare IT industry and our increased focus on the payer and life sciences market. As a result, we changed the presentation of our reportable segments to Provider and Veradigm. The new Provider segment is comprised of our core integrated clinical software applications, financial management and patient engagement solutions targeted at clients across the entire continuum of care. The new Veradigm segment primarily focuses on the payer and life sciences market. These changes to our reportable segments had no impact on operating segments. The segment disclosures below for the years ended December 31, 2018 and 2017 have been revised to our current presentation.
We sold all of our investment in Netsmart on December 31, 2018. Prior to the sale, Netsmart comprised a separate reportable segment, which due to its significance to our historical consolidated financial statements and results of operations, is reported as a discontinued operation as a result of the sale. In addition, the results of operations related to two of the product offerings acquired with the EIS Business (Horizon Clinicals and Series2000) are also presented throughout these financial statements as discontinued operations and are included within the Provider reportable segment, except for acquisition-related deferred revenue adjustments, which are included in “Unallocated Amounts”. Refer to Note 17, “Discontinued Operations.”
As a result of the above changes, as of December 31, 2019, we had eight operating segments, which are aggregated into two reportable segments. The Provider reportable segment includes the Hospitals and Health Systems, Ambulatory, CarePort, FollowMyHealth®, EPSiTM, EIS-Classics and 2bPrecise strategic business units, each of which represents a separate operating segment. This reportable segment derives its revenue from the sale of integrated clinical software applications, financial management and patient engagement solutions, which primarily include EHR-related software, connectivity and coordinated care solutions, financial and practice management software, related installation, support and maintenance, outsourcing, private cloud hosting, revenue cycle management, training and electronic claims administration services. The Veradigm reportable segment is comprised of the Veradigm business unit, which represents a separate operating segment. This reportable segment provides data-driven clinical insights with actionable tools for clinical workflow, research, analytics and media. Its solutions, targeted at key healthcare stakeholders, help improve the quality, efficiency and value of healthcare delivery.
Our Chief Operating Decision Maker (“CODM”) uses segment revenues, gross profit and income from operations as measures of performance and to make decisions about the allocation of resources. In determining these performance measures, we do not include in revenue the amortization of acquisition- related deferred revenue adjustments, which reflect the fair value adjustments to deferred revenue acquired in a business combination. We also exclude the amortization of intangible assets, stock-based compensation expense, non-recurring expenses and transaction-related costs, and non-cash asset impairment charges from the operating segment data provided to our CODM. Non-recurring expenses relate to certain severance, product consolidation, legal, consulting and other charges incurred in connection with activities that are considered one-time. Accordingly, these amounts are not included in our reportable segment results and are included in an “Unallocated Amounts” category within our segment disclosure. The “Unallocated Amounts” category also includes (i) corporate general and administrative expenses (including marketing expenses) and certain research and development expenses related to common solutions and resources that benefit all of our business units (refer to discussion above), all of which are centrally managed and (ii) revenue and the associated cost from the resale of certain ancillary products, primarily hardware. We do not track our assets by segment.

                                    |            | Year Ended December 31, |
----------------------------------- | ---------- | ----------------------- | ----------
(In thousands)                      | 2019       | 2018                    | 2017
Revenue:                            |            |                         |
Provider                            | $1,597,115 | $1,616,022              | $1,441,212
Veradigm                            | 161,216    | 140,326                 | 69,879
Unallocated Amounts                 | 13,346     | (6,386)                 | (13,383)
Total revenue                       | $1,771,677 | $1,749,962              | $1,497,708
Gross profit:                       |            |                         |
Provider                            | $672,206   | $710,063                | $674,112
Veradigm                            | 104,896    | 100,708                 | 43,817
Unallocated Amounts                 | (63,522)   | (86,228)                | (85,130)
Total gross profit                  | $713,580   | $724,543                | $632,799
Income (loss) from operations:      |            |                         |
Provider                            | $ 396,724  | $402,544                | $426,099
Veradigm                            | 43,996     | 43,641                  | 23,816
Unallocated Amounts                 | (465,176)  | (539,237)               | (437,431)
Total income (loss) from operations | $(24,456)  | $(93,052)               | $12,484

. Business Segments
 derive revenues from sales proprietary software license subscription basis for recurring service contracts software support maintenance transaction-related services. provide client services installation outsourcing private cloud hosting revenue cycle management.
 2019 realigned reporting structure divestiture investment Netsmart 2018 evolution healthcare IT industry increased focus payer life sciences market. changed reportable segments to Provider Veradigm. Provider segment clinical software financial management patient engagement solutions. Veradigm segment focuses payer life sciences market. changes no impact operating segments. segment disclosures December 31, 2018 2017 revised current presentation.
 sold investment Netsmart December 31, 2018. discontinued operation. (Horizon Clinicals Series2000 discontinued included Provider segment except acquisition-related deferred revenue adjustments “Unallocated Amounts”. Note 17, Operations.
 December 31, 2019 eight operating segments aggregated into two reportable segments.Provider segment includes Hospitals Health Systems Ambulatory CarePort FollowMyHealth® EPSiTM EIS-Classics 2bPrecise units separate. revenue from clinical software financial management patient engagement solutions EHR connectivity care financial practice management installation support outsourcing cloud hosting revenue cycle management training electronic claims administration. Veradigm business unit separate. provides data clinical insights tools workflow research media. solutions improve quality efficiency value healthcare delivery.
 Chief Operating Decision Maker uses revenues gross profit income performance allocation. amortization acquisition deferred revenue adjustments. amortization intangible assets stock-based compensation non expenses transaction-related costs non-cash asset impairment charges. Non-recurring expenses severance product consolidation legal consulting charges. not “Unallocated Amounts”.corporate expenses research development resale ancillary products. assets segment.
 Ended December 31,
 Revenue
 $1,597,115 $1,616,022 $1,441,212
 Veradigm 161,216 140,326 69
 Unallocated Amounts 13,346 (6,386
 revenue $1,771,677 $1,749,962 $1,497,708
 profit
 $672,206 $710,063 $674,112
 Veradigm 104,896 100,708 43,817
 Unallocated Amounts (63,522) (86,228,130
 profit $713,580 $724,543 $632,799
 operations
 396,724 $402,544 $426,099
 43,996,641
 Unallocated Amounts (465,176 (539,237) (437,431
 $(24,456) $(93,052) $12,484


Cash Flows
The following table provides a summary of cash flows from operating, investing and financing activities (in millions):
Operating Activities
The $57.2 million decrease in cash provided by operating activities in 2019 compared to 2018 is primarily related to the timing and amount of cash receipts for Trade receivables, net, higher payments primarily related to income taxes and incentive bonus, and the timing of payments for Trade accounts payable and other accrued liabilities. The $84.4 million increase in cash provided by operating activities in 2018 compared to 2017 was primarily related to increased earnings excluding the prior year effect of the Tax Reform Act and the timing and amount of cash receipts for Trade receivables, net.
Investing Activities
The $406.9 million increase in cash used in investing activities in 2019 compared to 2018 is primarily related to our D&B Investment and our acquisition of Compass Analytics. The $59.4 million increase in cash used in investing activities in 2018 compared to 2017 was primarily related to the HeavyWater and Ernst acquisitions and higher capital expenditures in 2018.
Financing Activities
The $455.1 million increase in cash provided by financing activities in 2019 compared to 2018 is primarily related to an incremental borrowing to fund our D&B Investment as well as fewer share repurchases. The $96.8 million decrease in cash used in financing activities in 2018 compared to 2017 was primarily related to tax distributions to BKFS LLC members and the senior notes redemption fee in 2017.

                                                      | Year ended December 31, |         |          | Variance     |
----------------------------------------------------- | ----------------------- | ------- | -------- | ------------ | ------------
                                                      | 2019                    | 2018    | 2017     | 2019 v. 2018 | 2018 v. 2017
Cash flows provided by operating activities           | $378.3                  | $435.5  | $351.1   | $(57.2)      | $84.4
Cash flows used in investing activities               | (551.0)                 | (144.1) | (84.7)   | (406.9)      | (59.4)
Cash flows provided by (used in) financing activities | 167.8                   | (287.3) | (384.1)  | 455.1        | 96.8
Net (decrease) increase in cash and cash equivalents  | $(4.9)                  | $4.1    | $(117.7) | $(9.0)       | $121.8

Cash Flows
 table cash flows operating investing financing activities
 Operating Activities
 $57. 2 million decrease cash 2019 related timing cash receipts Trade receivables income taxes incentive bonus Trade accounts accrued liabilities. $84. 4 million increase cash 2018 increased earnings Tax Reform Act timing cash receipts Trade receivables.
 Investing Activities
 $406. 9 million increase cash D&B Investment Compass Analytics. $59. 4 million increase cash HeavyWater Ernst acquisitions higher capital expenditures.
 Financing Activities
 $455. 1 million increase cash incremental borrowing D&B Investment fewer share repurchases. $96. 8 million decrease cash financing tax distributions BKFS LLC senior notes redemption fee.
 December
.
 Cash flows operating activities $378. 3 $435. 5 $351. $84.
 flows investing activities (551. (144. (84. (406. (59.
Cash financing 167. 8 (287. 3). 455. 96.
 cash equivalents. 9) $4. 1. 7). $121.


Billings
Group reported billings decreased by $8.3 million or 1.1 per cent to $760.3 million in the year-ended 31 March 2019. This represented a 0.1 per cent decrease on a constant currency (“CC”) basis.
Billings by region
Americas Billings attributable to the Americas decreased by $2.2 million to $267.8 million in the period, representing a 0.8 per cent reduction on a reported basis and 0.7 per cent on a constant currency basis; this decrease largely driven by a decline in Enduser products due to the stronger performance in the prior-year compare as a consequence of the impact of the WannaCry ransomware outbreak and the launch of Intercept X, the Group’s next-gen endpoint product, partially offset by an improved performance in UTM sales.
EMEA Billings attributable to EMEA increased by $0.2 million to $395.3 million in the period, representing 0.1 per cent growth on a reported basis and 0.9 per cent growth on a constant currency basis. An increase in sales of Server products being partially offset by a reduction in endpoint and email products.
APJ Billings attributable to APJ decreased by $6.3 million to $97.2 million in the period, representing 6.1 per cent on a reported basis and 2.8 per cent on a constant currency basis. As in the Americas, growth was negatively impacted by the stronger performance in the prior-year compare compounded by a legacy Network product transition in the first-half of the year partially offset by an improvement in sales of Server products.

                     | FY19          | FY18          | Growth %   | Growth %
-------------------- | ------------- | ------------- | ---------- | --------
                     | $m (Reported) | $m (Reported) | (Reported) | (CC)
Billings by Region:  |               |               |            |
- Americas           | 267.8         | 270.0         | (0.8)      | (0.7)
- EMEA               | 395.3         | 395.1         | 0.1        | 0.9
- APJ                | 97.2          | 103.5         | (6.1)      | (2.8)
                     | 760.3         | 768.6         | (1.1)      | (0.1)
Billings by Product: |               |               |            |
– Network            | 345.9         | 353.4         | (2.1)      | (1.1)
– Enduser            | 377.1         | 383.2         | (1.6)      | (0.7)
– Other              | 37.3          | 32.0          | 16.6       | 17.1
                     | 760.3         | 768.6         | (1.1)      | (0.1)
Billings by Type:    |               |               |            |
– Subscription       | 644.6         | 644.2         | 0.1        | 1.0
– Hardware           | 105.7         | 113.7         | (7.0)      | (6.1)
– Other              | 10.0          | 10.7          | (6.5)      | (4.6)
                     | 760.3         | 768.6         | (1.1)      | (0.1)

 Group decreased $8. 3 million. to $760. 3 million year-ended 31 March 2019. 1 per cent decrease constant currency.
 Americas decreased $2. 2 million to $267. 8 million. 8 per cent reduction. 7 per cent constant currency driven decline Enduser products WannaCry ransomware launch Intercept X offset improved UTM sales.
 EMEA increased $0. 2 million to $395. 3 million. 1 per cent growth. 9 per cent growth constant currency. increase sales Server products offset reduction endpoint email products.
 APJ Billings decreased $6. 3 million to $97. 2 million 6. 1 per cent reported 2. 8 per cent constant currency. growth impacted stronger performance Network product transition improvement sales Server products.
 Growth %
 Billings Region
 Americas 267. 8 270.
 EMEA 395.
APJ 97. 2 103. 5 (6. (2.
 760. 768. 6 (1.
 Billings Product
 Network 345. 9 353. 4 (2.
 377. 383. 2.
 37. 3 32. 16. 17.
 760. 3 768. 6.
 Billings Type
 Subscription 644. 6 644. 2.
 105. 7 113. (7.
 10. 7 (6. 5).
 760. 3 768. 6 (1.