12 Leases
(a) Leases
(i) Amounts recognised in the Consolidated Balance Sheet
The Consolidated Balance Sheet includes the following amounts relating to leases:
Additions to the right-of-use assets during the 2019 financial year were $0.3 million.
(ii) Amounts recognised in the Consolidated Statement of Comprehensive Income
The Consolidated Statement of Comprehensive Income shows the following amounts relating to leases:
The total cash outflow for leases in 2019 was $8.6 million.
(iii) The group’s leasing activities and how these are accounted for
The Group has a number of leases over property, motor vehicles, and connectivity links that have varying terms, escalation clauses and renewal rights.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each year. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
- fixed payments (including in-substance fixed payments), less any lease incentives receivable  fixed payments (including in-substance fixed payments), less any lease incentives receivable
- variable lease payments that are based on an index or a rate
- amounts expected to be payable by the lessee under residual value guarantees
- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the Group’s incremental borrowing rate.
Right-of-use assets are measured at cost comprising the following:
- the amount of the initial measurement of lease liability
- any lease payments made at or before the commencement date, less any lease incentives received
- any initial direct costs, and
- restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT-equipment and small items of office furniture.
(iv) Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the Group. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.

                     | 30 June 2019 | 30 June 2018
-------------------- | ------------ | ------------
                     | $'000        | $'000
Right-of-use assets* |              |
Properties           | 68,569       | 5,070
Motor Vehicles       | 259          | -
Connectivity Links   | 9,696        | -
                     | 78,524       | 5,070

Leases
 Amounts Consolidated Balance Sheet
 amounts leases
 Additions to right-of-use assets 2019 were $0. 3 million.
 Consolidated Statement of Comprehensive Income
 leases
 total cash outflow for leases 2019 was $8. 6 million.
 group’s leasing activities
 leases over property motor vehicles connectivity links varying terms escalation clauses renewal rights.
 Leases recognised as right-of-use liability at date. lease payment allocated between liability finance cost. finance cost charged profit loss lease term constant interest balance liability. right-of-use depreciated over life lease term.
 Assets liabilities lease measured present value basis. Lease liabilities include net value lease payments
 fixed payments
 variable lease payments
 amounts payable under residual value guarantees
 exercise price of purchase option if
 penalties for terminating lease.
lease payments discounted interest rate lease Group’s incremental borrowing rate.
 Right-of-use assets measured at cost
 initial lease liability
 lease payments incentives
 initial direct costs
 restoration costs.
 Payments short-term leases low-value assets recognised expense in profit loss. Short-term leases 12 months or less. Low-value assets IT-equipment office furniture.
 Extension termination options
 in property equipment leases. operational flexibility. exercisable by Group not lessor.
 30 June 2019 June 2018
 Right-of-use assets
 Properties 68,569 5
 Motor Vehicles
 Connectivity Links,696


Stock-Settled Stock Appreciation Rights
Stock-Settled Appreciation Rights (“SSARs”) are rights granted to an employee to receive value equal to the difference in the price of our common shares on the date of the grant and on the date of exercise. This value is settled only in common shares of Agilysys.
We use a Black-Scholes-Merton option pricing model to estimate the fair value of SSARs. The following table summarizes the principal assumptions utilized in valuing SSARs granted in fiscal 2019, 2018 and 2017:
The risk-free interest rate is based on the yield of a zero coupon U.S. Treasury bond whose maturity period approximates the expected life of the SSARs. The expected life is estimated using historical data representing the period of time the awards are expected to be outstanding. The estimated fair value of the SSARs granted is recognized over the vesting period of the awards utilizing the graded vesting method. Under this method, the compensation cost related to unvested amounts begins to be recognized as of the grant date.

                                       | 2019   | 2018            | 2017
-------------------------------------- | ------ | --------------- | -------------
Risk-free interest rate                | 2.68%  | 1.74%-1.94%     | 0.94%-2.14%
Expected life (in years)               | 5      | 5               | 5
Expected volatility                    | 32.42% | 32.42% - 32.84% | 35.25%-40.22%
Weighted average grant date fair value | $4.72  | $3.36           | $3.69

Stock-Settled Appreciation Rights
 employee value equal difference price common shares grant exercise. value settled in shares Agilysys.
 Black-Scholes-Merton option pricing model fair value. table assumptions valuing SSARs 2019 2018
 risk-free interest rate based on yield zero coupon U. S. Treasury bond expected life. estimated historical data. estimated fair value recognized over vesting period graded vesting method. compensation cost unvested amounts recognized grant date.
 Risk-free interest rate 2. 68%. 74%-1 94%.
 Expected life years 5
 Expected volatility 32. 42%.
 average grant date fair value $4. 72 $3. 36


Annual Contract Value (“ACV”) (1) (2)
The change in ACV measures the growth and predictability of future cash flows from committed Pega Cloud and Client Cloud arrangements as of the end of the particular reporting period.
Total ACV, as of a given date, is the sum of the following two components:
• Client Cloud: the sum of (1) the annual value of each term license contract in effect on such date, which is equal to its total license value divided by the total number of years and (2) maintenance revenue reported for the quarter ended on such date, multiplied by four. We do not provide hosting services for Client Cloud arrangements.
• Pega Cloud: the sum of the annual value of each cloud contract in effect on such date, which is equal to its total value divided by the total number of years.
(1) Data Table
(2) As foreign currency exchange rates are an important factor in understanding period to period comparisons, we believe the presentation of ACV growth rates on a constant currency basis enhances the understanding of our results and evaluation of our performance in comparison to prior periods.

                       | December 31, |          | Change   |     |
---------------------- | ------------ | -------- | -------- | --- | -----------------
(Dollars in thousands) | 2019         | 2018     | Reported |     | Constant currency
Maintenance            | $292,696     | $269,708 | $22,988  | 9%  | 8%
Term                   | 231,267      | 190,349  | 40,918   | 21% | 21%
Client Cloud           | 523,963      | 460,057  | 63,906   | 14% | 14%
Pega Cloud             | 169,329      | 109,973  | 59,356   | 54% | 54%
Total ACV              | $693,292     | $570,030 | $123,262 | 22% | 22%

Annual Contract Value (“ACV”)
 change measures growth future cash flows Pega Cloud Client Cloud arrangements reporting period.
 Total ACV sum two components
 Client Cloud annual value license contract maintenance revenue quarter multiplied four. hosting services Client Cloud.
 Pega Cloud annual value contract equal divided years.
 foreign currency exchange rates ACV growth rates constant currency enhances understanding performance.
 December 31,
 2019 Constant currency
 Maintenance  $292,696  $269,708  $22,988 9%
 Term  231,267  190,349  40,918  21%
 Client Cloud 523,963  460,057  63,906  14%
 Pega Cloud 169,329  109,973  59,356 54%
 Total ACV $693,292 | $570,030  $123,262 22%


Net Income (Loss) per Common Share
Basic net income per share is based on the weighted average common and Class A shares outstanding. Diluted net income per share includes any dilutive effects of stock options outstanding and unvested restricted shares.
Basic net income per share was calculated by dividing net income by the weighted-average number of common and Class A shares outstanding during the period. Diluted net income per share was calculated by dividing net income by the weighted-average number of common shares outstanding during the period plus the dilutive effects of stock options and unvested restricted shares. Due to the net loss in the year ended June 3, 2017 restricted shares in the amount of 131,292 were excluded from the calculation of diluted earnings per share because their inclusion would have been
antidilutive. The computations of basic net income per share and diluted net income per share are as follows (in thousands):

                                                         | June 1, 2019 | June 2, 2018 | June 3, 2017
-------------------------------------------------------- | ------------ | ------------ | ------------
Net income (loss) attributable to Cal-Maine Foods, Inc.  | $54,229      | $125,932     | $(74,278)
Basic weighted-average common shares (including Class A) | 48,467       | 48,353       | 48,362
Effect of dilutive securities:                           |              |              |
Common stock options and restricted stock                | 122          | 115          | —
Dilutive potential common shares                         | 48,589       | 48,468       | 48,362
Net income (loss) per common share:                      |              |              |
Basic                                                    | $1.12        | $2.60        | $(1.54)
Diluted                                                  | $1.12        | $2.60        | $(1.54)

Net Income (Loss) per Common Share
 based weighted average common Class A shares. includes dilutive effects stock options unvested restricted shares.
 calculated. Diluted dilutive effects options restricted shares. loss June 3, 2017 restricted shares 131,292 excluded
 antidilutive. computations diluted
 June 1 2019 2 2018 3 2017
 Net income (loss) Cal-Maine Foods, Inc. $54,229 $125,932 $(74,278)
 weighted-average common shares Class A 48,467 48,353 48,362
 Effect dilutive securities
 Common stock options restricted stock
 Dilutive potential common shares 48,589 48,468,362
 Net income (loss) per common share
 $1. $2. 60.
 Diluted.


7 Employees’ information (continued)
Share based payments
Details of share options outstanding under each of the Group’s schemes is set out below:
1 Shares ordinarily exercised immediately on vested date.
2 Relates to non-vested SIP free shares, partnership shares and matching shares granted.
The weighted average exercise prices of the outstanding options and outstanding options exercisable at 31 December 2019 for the Share Option Schemes were 304 pence and 309 pence respectively (2018: 302 pence and 309 pence respectively) and for the Save As You Earn Scheme were 77 pence and 278 respectively (2018: 224 pence and nil respectively).
A Share Option Schemes
Options to subscribe for ordinary shares may be awarded under the intu properties plc Company Share Option Plan and the intu properties plc Non-approved Executive Share Option Scheme.
Such options may not be exercised within three years of grant or before the satisfaction or waiver of any applicable performance conditions and will be forfeited if the employee leaves the Group before their options become capable of exercise, except in certain circumstances. The options will lapse if not exercised within 10 years of the date of grant.
B Performance Share Plan (PSP)
The Company operates a PSP for eligible employees at the discretion of the Remuneration Committee
Awards may be made in the form of nil cost options, a conditional share award or prior to April 2019, a joint share ownership award and fixed-value zero-cost option, and eligible employees may be granted any combination of such awards subject to any individual limits.
The 2020 PSP awards will vest based on (i) 50 per cent of each award – relative Total Shareholder Return vs a bespoke real estate sector peer group (this group being expanded from the very small groups used previously) and (ii) 50 per cent of each award – intu’s Total Property Return vs the MSCI UK Shopping Centre benchmark. This mix of metrics represents a change from the 2019 awards which were based 50 per cent each on relative and absolute TSR targets subject to a Remuneration Committee-operated discretionary assessment of underlying financial performance. It is intended that awards will vest three years following grant (with an additional two year post vesting holding period applying to the net number of shares that vest if the Remuneration Committee considers it appropriate to apply such additional condition).
C Bonus Share Scheme (Bonus Scheme)
Under the Company’s Bonus Scheme, shares may be awarded on a deferred basis as part of a bonus award (Deferred Share Awards).
Deferred Share Awards comprise Restricted Shares and Additional Shares (prior to July 2019). Restricted Shares will vest two or three years after the date of their award and Additional Shares will vest four or five years after the date of award. Vesting is subject, under normal circumstances, to continued employment during the vesting or ‘restricted’ period. There are no further performance conditions applicable to either Restricted Shares or Additional Shares.
Where awarded, the number of Additional Shares would be equal to 50 per cent of the combined total of shares awarded as Restricted Shares and under the Share Incentive Plan (see section D). No Additional Shares were outstanding at 1 January 2014 and no awards of Additional Shares have been made since this time. intu properties
D Share Incentive Plan (SIP)
The Company operates a SIP for all eligible employees, who may receive up to £3,600 worth of shares (Free Shares) as part of their annual bonus. The SIP is an HMRC tax-advantaged scheme.
Any Free Shares awarded under the SIP will be held in trust on behalf of each employee for at least three years following grant, after which time they may be withdrawn, provided the individual employee has remained in employment with the Company. If the Free Shares are held in trust for a further two years, they will qualify for HMRC-approved tax advantages.
As part of the SIP arrangements, the Company also offers eligible employees the opportunity to participate in a Partnership share scheme, under which employees can invest up to £1,800 of pre-tax salary (or, if less, 10 per cent of salary) in any tax year, which will be used to purchase ordinary shares in the Company (Partnership Shares) at the end of a 12-month period. The Group will give each employee one ordinary share (a Matching Share) for every two Partnership Shares purchased by the employee. Matching Shares will be forfeited if the employee leaves the Group within three years of the date of award and will qualify for HMRC-approved tax advantages if they are held in the SIP for five years.
E Save As You Earn Scheme (SAYE)
The Group operates a SAYE under which all eligible UK employees may save up to a maximum of £500 per month for a period of three or five years and use the proceeds at the end of their saving period to purchase shares in the Company. At the start of the saving period, each SAYE participant will be granted an option to purchase such shares at a price usually determined as the average mid-market closing share price of an ordinary share in the Company over the three consecutive dealing days preceding the SAYE invitation date, discounted by up to 20 per cent. Options may normally be exercised within six months following the end of the savings period.
F Joint Share Ownership Plan (JSOP)
Eligible employees were invited to participate in the JSOP which formed part of the intu properties plc Unapproved Share Option Scheme (which was replaced by the Non-approved Executive Share Option Scheme upon its expiry in April 2018) and the PSP. Under the JSOP, shares are held jointly by the employee and the employee share ownership plan trustee with any increases in the share price and dividends paid on those shares being allocated between the joint owners in accordance with the terms of the scheme.
Conditions under which JSOP interests may be exercised (including applicable performance conditions) are the same as those for the Non-approved Executive Share Option Scheme as outlined in section A.

                           | Note | Outstanding 1 January 2019 | Granted during the year | Exercised during the year | Expired/forfeited during the year | Outstanding 31 December 2019 | Exercisable 31 December 2019
-------------------------- | ---- | -------------------------- | ----------------------- | ------------------------- | --------------------------------- | ---------------------------- | ----------------------------
Share Option Schemes       | A    | 7,938,601                  | –                       | –                         | (801,528)                         | 7,137,073                    | 5,687,073
Performance Share Plan1    | B    | 7,008,260                  | 3,734,410               | –                         | (2,228,278)                       | 8,514,392                    | n/a
Bonus Share Scheme         | C    | 1,827,366                  | 556,840                 | (996,503)1                | (16,632)                          | 1,371,071                    | n/a
Share Incentive Plan2      | D    | 243,127                    | 88,027                  | (41,116)1                 | (80,736)                          | 209,302                      | n/a
Save As You Earn Scheme    | E    | 219,136                    | 448,368                 | –                         | (121,172)                         | 546,332                      | 60,443
Joint Share Ownership Plan | F    | 4,345,305                  | –                       | –                         | (1,382,972)                       | 2,962,333                    | 2,962,333

Employees’ information
 Share payments
 share options schemes
 Shares exercised vested date.
 non-vested SIP free shares partnership shares matching shares.
 average exercise prices 31 December 2019 Share Option Schemes 304 309 Save As You Earn Scheme 77 278.
 Share Option Schemes
 Options shares awarded intu properties plc Company Share Option Plan Non-approved Executive Share Option Scheme.
 options not exercised three years grant performance conditions forfeited leaves Group before. options lapse not exercised 10 years grant.
 Performance Share Plan
 Company operates PSP employees Remuneration Committee
 Awards cost options conditional share award joint share ownership fixed-value zero option limits.
 2020 PSP awards vest 50 per cent Total Shareholder Return real estate sector peer group intu’s Total Property Return vs MSCI UK Shopping Centre benchmark. change from 2019 awards TSR targets Remuneration Committee financial performance.awards vest three years following grant additional two year post vesting period net shares if Remuneration Committee.
 Bonus Share Scheme
 shares awarded deferred bonus award.
 Restricted Shares Additional Shares to July 2019. Restricted Shares vest two or three years after award Additional Shares four or five years after. Vesting subject to continued employment. no further performance conditions.
 Additional Shares equal to 50 per cent. No Additional Shares outstanding at 1 January 2014 no awards made.
 Share Incentive Plan
 Company operates for eligible employees receive £3,600 shares annual bonus. tax-advantaged scheme.
 Free Shares awarded held in trust three years following grant withdrawn employment. Shares held two years qualify for HMRC-approved tax advantages.
Company offers employees Partnership share scheme invest £1,800 pre-tax salary 10 per cent salary tax year purchase ordinary shares 12-month period. employee one ordinary share Matching Share for every two Partnership Shares purchased. Matching Shares forfeited if leaves Group within three years qualify for tax advantages SIP for five years.
 Save As You Earn Scheme)
 Group operates employees save £500 per month three or five years use proceeds purchase shares. option purchase shares average mid-market closing share price three days discounted 20 per cent. Options exercised six months following savings period.
 F Joint Share Ownership Plan (JSOP)
 employees participate intu properties plc Unapproved Share Option Scheme replaced Non-approved Executive Share Option Scheme 2018). shares held jointly by employee trustee increases share price dividends allocated between joint owners.
 Conditions JSOP same as Non-approved Executive Share Option Scheme.
1 January 2019 Granted Exercised Expired 31 December 2019 Exercisable
 Share Option Schemes 7,938,601 (801,528) 7,137,073
 Performance Share 7,008,260 3,734,410,228,278 8,514,392
 Bonus Share Scheme 1,827,366 556,840 1,371,071
 Share Incentive 243,127 88,027,116,736 209,302
 Save You Earn Scheme 219,136 448,368,172 546,332 60,443
 Joint Share Ownership Plan 4,345,305 (1,382,972) 2,962,333


Our number of employees is as follows:
On August 3, 2018, we implemented a plan to restructure our organization, which included a reduction in workforce of approximately 40 employees, representing approximately 30% of the Company’s total pre-restructuring workforce. We recorded a charge of $381,000 in the third quarter of 2018 relating to this reduction in force, consisting primarily of one-time severance payments and termination benefits. The Company’s goal in the restructuring is to better focus our workforce on retaining current clients, gaining incremental business from current clients, and winning new business in the market segments where we can leverage our expertise and long history as an EFT pioneer.
Employees

                              | March 1, |
----------------------------- | -------- | ----
Department                    | 2020     | 2019
Sales and Marketing           | 41       | 38
Engineering                   | 13       | 9
Professional Services         | 6        | 6
Customer Support              | 22       | 22
Management and Administration | 18       | 17
Total                         | 100      | 92

employees
 August 3, 2018 implemented plan restructure organization reduction 40 employees 30% pre-restructuring workforce. recorded charge $381,000 third quarter 2018 one-time severance payments termination benefits. goal retaining current clients gaining business new business EFT.
 Employees
 March 1
 Department 2020 2019
 Sales Marketing 41
 Engineering 13 9
 Professional Services 6
 Customer Support 22
 Management Administration 18
 Total 100 92


NOTE 14—INCOME TAXES
Our effective tax rate represents the net effect of the mix of income earned in various tax jurisdictions that are subject to a wide range of income tax rates.
The following is a geographical breakdown of income before the provision for income taxes:

                           |          | Year Ended June 30, |
-------------------------- | -------- | ------------------- | --------
                           | 2019     | 2018                | 2017
Domestic income (loss)     | $269,331 | $238,405            | $110,562
Foreign income             | 171,243  | 147,721             | 138,989
Income before income taxes | $440,574 | $386,126            | $249,551

TAXES
 effective tax rate income jurisdictions.
 geographical breakdown income before taxes
 Ended June 30,
 Domestic income $269,331 $238,405 $110,562
 Foreign income 171,243 147,721 138,989
 Income before taxes $440,574 $386,126 $249,551


ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data has been derived from our consolidated financial statements (in thousands, except per share data). This data should be read together with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the consolidated financial statements and related notes included elsewhere in this annual report. The financial information below is not necessarily indicative of the results of future operations. Future results could differ materially from historical results due to many factors, including those discussed in Item 1A, Risk Factors.
(1) The consolidated balance sheet and statement of operations for the year ended December 31, 2019, includes the acquisition of Speedpay as discussed in Note 3, Acquisition, to our Notes to Consolidated Financial Statements in Part IV, Item 15 of this Form 10-K.
(2) The consolidated balance sheet and statement of operations for the year ended December 31, 2019, reflects the application of Accounting Standards Update (“ASU”) 2016-02, Leases (codified as “ASC 842”) as discussed in Note 14, Leases, to our Notes to Consolidated Financial Statements.
(3) The consolidated balance sheet and statement of operations for the year ended December 31, 2018, reflects the adoption of ASU 2014-09, Revenue from Contracts with Customers (codified as “ASC 606”), as discussed in Note 2, Revenue, to our Notes to Consolidated Financial Statements, including a cumulative adjustment of $244.0 million to retained earnings.
(4) The consolidated statement of operations for the year ended December 31, 2017, reflects the Baldwin Hackett & Meeks, Inc. (“BHMI”) judgment. We recorded $46.7 million in general and administrative expense and $1.4 million in interest expense, as discussed in Note 15, Commitments and Contingencies, to our Notes to Consolidated Financial Statements.
(5) The consolidated balance sheet and statement of operations for the year ended December 31, 2016, reflects the sale of Community Financial Services assets and liabilities.

                                            |             |             | Years Ended December 31, |             |
------------------------------------------- | ----------- | ----------- | ------------------------ | ----------- | -----------
                                            | 2019 (1)(2) | 2018 (3)    | 2017 (4)                 | 2016 (5)    | 2015
Income Statement Data:                      |             |             |                          |             |
Total revenues                              | $ 1,258,294 | $ 1,009,780 | $ 1,024,191              | $ 1,005,701 | $ 1,045,977
Net income                                  | 67,062      | 68,921      | 5,135                    | 129,535     | 85,436
Earnings per share:                         |             |             |                          |             |
Basic                                       | $ 0.58      | $ 0.59      | $ 0.04                   | $ 1.10      | $ 0.73
Diluted                                     | $ 0.57      | $ 0.59      | $ 0.04                   | $ 1.09      | $ 0.72
Weighted average common shares outstanding: |             |             |                          |             |
Basic                                       | 116,175     | 116,057     | 118,059                  | 117,533     | 117,465
Diluted                                     | 118,571     | 117,632     | 119,444                  | 118,847     | 118,919

ITEM 6. SELECTED FINANCIAL DATA
 financial data derived from consolidated financial statements. read with Item 7 Discussion Analysis Financial Condition Results consolidated financial statements notes annual report. financial information not indicative future operations. results differ from historical 1A Risk Factors.
 consolidated balance sheet December 31, 2019 includes acquisition Speedpay Note 3 Acquisition Part IV Item 15 Form 10-K.
 December 2019 Accounting Standards Update 2016-02, Leases.
 balance December 31, 2018 ASU 2014-09 Revenue Contracts Customers adjustment $244. 0 million retained earnings.
 statement December 31, 2017 reflects Baldwin Hackett & Meeks, Inc. judgment. $46. 7 million general administrative expense $1. 4 million interest expense Note 15 Commitments Contingencies.
 balance sheet year December 31, 2016, reflects sale Community Financial Services assets liabilities.
 December

 2019 2018 2017 (4) 2016 (5) 2015
 Income Statement Data
 Total revenues $ 1,258,294 1,009,780 1,024,191 1,005,701 1,045,977
 Net income 67,062 68,921 5,135 129,535 85,436
 Earnings per share
. 58.
.
 average shares
 Basic 116,175 116,057 118,059 117,533 117,465
 Diluted 118,571 117,632 119,444 118,847 118,919


Note 7—Income Taxes
The
Company
is
incorporated
in
Switzerland
but
operates
in
various
countries
with
differing
tax
laws
and
rates.
Further,
a
portion
of
the
Company's
income
(loss)
before
taxes
and
the
provision
for
(benefit
from)
income
taxes
is
generated
outside
of
Switzerland.
Income
from
continuing
operations
before
income
taxes
for
fiscal
years
2019
,
2018
and
2017
is
summarized
as
follows
(in
thousands):

                    |          | Years Ended March 31, |
------------------- | -------- | --------------------- | --------
                    | 2019     | 2018                  | 2017
Swiss               | $212,986 | $177,935              | $161,544
Non-Swiss           | 58,147   | 54,330                | 53,445
Income before taxes | $271,133 | $232,265              | $214,989

7—Income Taxes
 Company
 incorporated Switzerland countries tax laws.
 Company's income taxes taxes Switzerland.
 Income operations taxes 2019 2018 2017 summarized Years Ended March 31, 2019 2018 2017 Swiss $212,986 $177,935 $161,544
 Non-Swiss 58,147 54,330 53,445 Income before taxes $271,133 $232,265 $214,989


Liquidity and Capital Resources
Working Capital
The following table summarizes our cash and cash equivalents, accounts receivable, net and working capital, for the periods indicated (in thousands):
We define working capital as current assets minus current liabilities. Our cash and cash equivalents as of December 31, 2019 are available for working capital purposes. We do not enter into investments for trading purposes, and our investment policy is to invest any excess cash in short term, highly liquid investments that limit the risk of principal loss; therefore, our cash and cash equivalents are held in demand deposit accounts that generate very low returns.

                          |          | As of December 31, |
------------------------- | -------- | ------------------ | -------
                          | 2019     | 2018               | 2017
Cash and cash equivalents | $119,629 | $146,061           | $96,329
Accounts receivable, net  | 76,373   | 49,510             | 40,634
Working capital           | 167,879  | 152,793            | 119,433

Liquidity Capital Resources
 Working Capital
 table summarizes cash equivalents accounts receivable net working capital
 working capital assets minus liabilities. equivalents December 31, 2019 working. trading excess short liquid investments demand deposit accounts low returns.
 December
 Cash equivalents $119,629 $146,061 $96,329
 Accounts receivable net 76,373 49,510 40,634
 Working capital 167,879 152,793 119,433


18. Other Income (Expense), Net
Other income (expense), net consists of the following:

                                                                                |       | Years Ended June 30, |
----------------------------------------------------------------------------------------------- | ----- | -------------------- | -------
($ in millions)                                                                                | 2019  | 2018                 | 2017
Unrealized gains on company owned life insurance contracts and investments held in rabbi trusts | $0.8  | $1.5                 | $1.7
Interest income                                                                                | 0.1   | 0.3                  | 0.3
Foreign exchange                                                                                | (0.4) | (0.7)                | (0.4)
Pension earnings, interest and deferrals                                                        | (0.1) | (2.1)                | (23.8)
Pension curtailment                                                                             | —     | —                    | (0.5)
Other                                                                                | 0.2   | 0.2                  | 1.2
Total other income (expense), net                                                               | $0.6  | $(0.8)               | $(21.5)

18. Income
 Years Ended June 30
 millions 2019 2018 2017
 Unrealized gains life insurance contracts investments trusts. 8 $1. 5 $1. 7
 Interest income. 3.
 Foreign exchange. 4). 7).
 Pension earnings interest deferrals. (23. 8)
 Pension curtailment. 5)
. 2.
 Total income $0. 6. 8).


Below is the summary of the FY17 PRUs vested and earned by each NEO.
(1) The Compensation Committee did not exercise its discretion to reduce any payouts.

NEO                     | Total FY17 PRUs Vested at end of FY18 | Total FY17 PRUs Vested at end of FY19 | Total FY17 PRUs Earned and Vested (1)
----------------------- | ------------------------------------- | ------------------------------------- | -------------------------------------
Gregory S. Clark        | 2,404,175                             | 175,023                               | 2,579,198
Nicholas R. Noviello    | 606,935                               | 44,184                                | 651,119
Amy L. Cappellanti-Wolf | 207,142                               | 15,080                                | 222,222
Samir Kapuria           | 148,322                               | 10,798                                | 159,120
Scott C. Taylor         | 414,287                               | 30,160                                | 444,447

FY17 PRUs vested earned NEO.
 Compensation Committee reduce payouts.
 Gregory. Clark 2,404,175,023 2,579,198
 Nicholas. Noviello 606,935 44,184,119
 Amy. Cappellanti-Wolf 207,142 15,080
 Samir Kapuria 148,322 10,798 159,120
 Scott. Taylor 414,287 30,160 444,447


12. ACCRUED LIABILITIES
The settlement of the deferred compensation liabilities includes the settlement with our former CFO and Executive Vice President that is payable within March 31, 2020 and payroll taxes related to this settlement and the settlement of the Executive Pension Plan with our Chairman, President & CEO. We refer to note 7 for further information.

All figures in USD ‘000                        | 2019   | 2018
---------------------------------------------- | ------ | -----
Accrued Interest                               | 163    | 1,598
Accrued Expenses                               | 11,569 | 7,362
Settlement Deferred Compensation Liabilities   | 3,830  | -
Total as of December 31,                       | 15,562 | 8,960

. ACCRUED LIABILITIES
 former CFO Vice President payable March 2020 payroll taxes Pension Plan Chairman President CEO. note 7.
 figures USD
 Interest 163 1,598
 Expenses 11,569 7,362
 Deferred Compensation Liabilities 3,830
 December 31, 15,562 8,960


4. Debt, Capital Lease Obligations and Other Financing
Debt and capital lease obligations as of September 28, 2019 and September 29, 2018, consisted of the following (in thousands):
On June 15, 2018, the Company entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued an aggregate of$ 150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the “2018 Notes”), in a private placement. The 2018 NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of certain financial ratios such as a total leverage ratio and a minimum interest coverage ratio. The 2018 Notes may be prepaid in whole or in part at any time, subject to payment of a makewhole amount; interest on the 2018 Notes is payable semiannually. At September 28, 2019, the Company was in compliance with the covenants under the 2018 NPA.
In connection with the issuance of the 2018 Notes, on June 15, 2018, the Company repaid, on maturity $175.0 million in principal amount of its previous 5.20% Senior Notes.
On May 15, 2019, the Company refinanced its then-existing senior unsecured revolving credit facility (the "Prior Credit Facility") by entering into a new5 -year senior unsecured revolving credit facility (collectively with the Prior Credit Facility, referred to as the "Credit Facility"), which expanded the maximum commitment from $300.0 million to $350.0 million and extended the maturity from July 5, 2021 to May 15, 2024. The maximum commitment under the Credit Facility may be further increased to $600.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. During fiscal 2019, the highest daily borrowing was $250.0 million; the average daily borrowings were $140.7 million. The Company borrowed $1,084.5 million and repaid $989.5 million of revolving borrowings under the Credit Facility during fiscal 2019. The Company was in compliance with all financial covenants relating to the Credit Agreement, which are generally consistent with those in the 2018 NPA discussed above. The Company is required to pay a commitment fee on the daily unused revolver credit commitment based on the Company's leverage ratio; the fee was 0.125% as of September 28, 2019.

                                                                     | 2019      | 2018
-------------------------------------------------------------------- | --------- | --------
4.05% Senior Notes, due June 15, 2025                                | $100,000  | $100,000
4.22% Senior Notes, due June 15, 2028                                | 50,000    | 50,000
Borrowings under the credit facility                                 | 95,000    | —
Capital lease and other financing obligations                        | 44,492    | 39,857
Unamortized deferred financing fees                                  | (1,512)   | (1,240)
Total obligations                                                    | 287,980   | 188,617
Less: current portion                                                | (100,702) | (5,532)
Long-term debt and capital lease obligations, net of current portion | 187,278   | 183,085

. Debt Capital Lease Obligations Financing
 Debt lease obligations September 28, 2019 29, 2018
 June 15, 2018 Company Note Purchase Agreement issued$ 150. million unsecured senior notes $100. million 4. 05% Series A Senior Notes June 15, 2025 $50. million. 22% Series B Senior Notes June 15, 2028. 2018 NPA includes operational financial covenants financial ratios leverage minimum interest coverage ratio. 2018 Notes prepaid interest payable semiannually. September 28, 2019 compliance covenants 2018 NPA.
 June 15, 2018 repaid $175. million previous 5. 20% Senior Notes.
 May 15, 2019 refinanced credit facility -year facility expanded maximum commitment $300. million to $350. million extended maturity July 5, 2021 to May 15, 2024. $600. million agreement. 2019 highest daily borrowing $250. million average $140. 7 million.Company borrowed $1,084. million repaid $989. 5 million 2019. covenants 2018 NPA. commitment fee daily revolver credit leverage ratio. 125% September 28, 2019.
. Senior Notes due June 15 2025 $100
. 22% Notes June 15 2028
 Borrowings 95,000
 Capital lease financing obligations 44,492 39,857
 Unamortized deferred financing fees
 obligations 287,980 188,617
 (100,702
 Long-term debt capital lease obligations 187,278


During the period 5.0 million (2017/18: 5.0 million) options were granted under the Sharesave Plan, with a weighted average exercise price at the date of exercise of 30 pence per ordinary share (2017/18: 33 pence).
The options outstanding at 30 March 2019 had a weighted average exercise price of 32 pence (2017/18: 33 pence), and a weighted average remaining contractual life of 1.6 years (2017/18: 1.6 years).
In 2018/19, the Group recognised an expense of £2.1m (2017/18: £2.8m), related to all equity-settled share-based payment transactions.
Premier Foods plc Sharesave Plan

                                           | 2018/19     |                                 | 2017/18     |
------------------------------------------ | ----------- | ------------------------------- | ----------- | -------------------------------
                                           |             | Weighted average exercise price |             | Weighted average exercise price
                                           | Options     | (p)                             | Options     | (p)
Outstanding at the beginning of the period | 17,835,628  | 33                              | 20,231,334  | 35
Exercised during the period                | (4,306,470) | 32                              | (3,536,539) | 34
Granted during the period                  | 5,022,240   | 30                              | 4,988,669   | 33
Forfeited/lapsed during the period         | (2,447,511) | 33                              | (3,847,836) | 44
Outstanding at the end of the period       | 16,103,887  | 32                              | 17,835,628  | 33
Exercisable at the end of the period       | 2,673,154   | 32                              | 792,451     | 35

5. million. options granted Sharesave Plan exercise price 30 pence per share 33.
 options outstanding 30 March 2019 32 pence contractual life 1. 6 years.
 2018/19 Group recognised expense £2. 1m (2017/18. equity-settled share-based payment transactions.
 Premier Foods plc Sharesave Plan
 2018/19
 Weighted average exercise price
 Outstanding 17,835,628  33 20,231,334
 Exercised (4,306,470) 32 (3,536,539)
 5,022,240 4,988,669
 Forfeited/lapsed (2,447,511) (3,847,836)
 end period 16,103,887 17,835,628
 2,673,154  792,451


Market Information. Our common stock is traded on the NASDAQ Global Select Market under the symbol “JACK.” The following table sets forth the high and low sales prices for our common stock during the fiscal quarters indicated, as reported on the NASDAQ Composite:
Dividends. In fiscal 2019 and 2018, the Board of Directors declared four cash dividends of$0.40 per share each. Our dividend is subject to the discretion and approval of our Board of Directors and our compliance with applicable law, and depends upon, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, and other factors that our Board of Directors may deem relevant.

     |               |                |           | 16 Weeks
---- | ------------- | -------------- | --------- | -----------
     |               | 12 Weeks Ended |           | Ended
     | September 29, | July 7,        | April 14, | January 20,
     | 2019          | 2019           | 2019      | 2019
High | $91.30        | $87.84         | $85.32    | $90.49
Low  | $70.77        | $75.80         | $75.80    | $74.19
     |               |                |           | 16 Weeks
     |               | 12 Weeks Ended |           | Ended
     | September 30, | July 8,        | April 15, | January 21,
     | 2018          | 2018           | 2018      | 2018
High | $93.98        | $92.46         | $95.99    | $108.55
Low  | $81.87        | $79.23         | $79.30    | $90.59

. common stock traded NASDAQ Global Select Market “JACK. table high low sales prices fiscal quarters Composite
 Dividends. 2019 2018 Board Directors declared four cash dividends$0. 40 per share each. dividend subject Board Directors law depends results financial condition indebtedness capital requirements contractual restrictions factors.
 16 Weeks
 12 Weeks Ended
 September 29, July 7 April 14 January 20
 $91. 30 $87. $85. $90.
 $70. $75. $74.
 16 Weeks
 12 Weeks
 September 30 July 8 April 15 January
 $93. $92. $95. $108.
 $81. $79. $79. $90.


Short-term borrowings and current portion of long-term obligations consist of the following (in thousands):
(1) Net of debt issuance costs of $4.6 million and $4.7 million at September 28, 2019 and September 29, 2018, respectively.

                                               | Fiscal year-end |
---------------------------------------------- | --------------- | ------
                                               | 2019            | 2018
Current portion of Euro Term Loan(1)           | $2,748          | $3,092
1.3% Term loan due 2024                        | 1,367           | 1,448
1.0% State of Connecticut term loan due 2023   | 378             | 374
Capital lease obligations                      | 370             | 158
Line of credit borrowings                      | 10,000          | —
Total current portion of long-term obligations | $14,863         | $5,072

Short long-term obligations
 debt costs $4. 6 million $4. 7 million September 28, 2019 29, 2018.
 year-end
 Euro Term $2,748 $3,092
. loan 2024
. Connecticut loan 2023
 Capital lease obligations
 credit borrowings 10,000
 long-term obligations $14,863 $5,072


Figure 29. 2016/2018 LTIP Award Grants
(1) All of the Market-based PRSUs and one-third of the stock options and service-based RSUs granted to Mr. Anstice under the 2016/2018 LTIP that were scheduled to vest in February 2019 were canceled upon his termination of employment with the Company as of December 5, 2018.
(2) The number of Market-based PRSUs awarded is reflected at target. The final number of shares that may have been earned is 0% to 150% of target.
In February 2019, the committee determined the payouts for the calendar year 2016/2018 LTIP Awards of Market-based PRSUs. The number of shares represented by the Marketbased PRSUs earned over the performance period was based on our stock price performance compared to the market price performance of the SOX index.
Based on the above formula and Market-based PRSU Vesting Summary set forth in Figures 26 and 27, the Company’s stock price performance over the three-year performance period was equal to 89.93% and performance of the SOX index (based on market price) over the same three-year performance period was equal to 84.47%. Lam’s stock price outperformed the SOX index by 5.46%, which resulted in a performance payout of 110.93% to target number of Marketbased PRSUs granted to each NEO. Based on such results, the committee made the following payouts to each NEO for the 2016/2018 LTIP Award of Market-based PRSUs.

Named Executive Officer (1)(2) (1)(2) (1)(2) | Target Award Opportunity ($) | Market-based PRSUs award (#) | Stock Options Award (#) | Service-based RSUs Award (#)
-------------------------------------------- | ---------------------------- | ---------------------------- | ----------------------- | ----------------------------
Timothy M.Archer                             | 4,000,000                    | 28,935                       | 34,722                  | 17,361
Douglas R.Bettinger                          | 2,750,000                    | 19,892                       | 23,871                  | 11,935
Richard A.Gottscho                           | 3,250,000                    | 23,509                       | 28,209                  | 14,105
Patrick J. Lord                              | 1,100,000                    | 7,957                        | —                       | 7,957
Vahid Vahedi                                 | 1,100,000                    | 7,957                        | —                       | 7,957
Seshasayee(Sesha) Varadarajan                | 1,100,000                    | 7,957                        | —                       | 7,957

Figure 29. 2016/2018 LTIP Award Grants
 Market-based PRSUs one-third stock options service RSUs. Anstice February 2019 canceled termination employment December 5, 2018.
 Market-based PRSUs awarded target. final shares earned 0% to 150% target.
 February 2019 committee determined payouts 2016/2018 LTIP Awards PRSUs. shares earned stock price performance SOX index.
 stock price performance 89. 93% SOX index 84. 47%. stock price outperformed SOX 5. 46% payout 110. 93% Marketbased PRSUs. committee payouts 2016/2018 LTIP Award Market-based PRSUs.
 Executive Officer Target Award Market-based PRSUs Stock Options Service-based RSUs
 Timothy M. Archer 4,000,000 28,935 34,722
 Douglas R. Bettinger 2,750,000
 Richard A. Gottscho 3,250,000 23,509 28,209
 Patrick J.Lord 1,100,000 7,957
 Vahid Vahedi 7,957
 Varadarajan 1 7,957


17. Financial Information About Segments
Our operations are divided into two reportable segments: Products and Licensing and Technology Development. The Products and Licensing segment develops and sells products or licenses technologies based on commercially viable concepts developed by the Technology Development segment. The Products and Licensing segment derives its revenue from product sales, funded product development and technology licenses.
Our engineers and scientists collaborate with our network of government, academic and industry experts to identify technologies and ideas with promising market potential. We then compete to win fee-for-service contracts from government agencies and industrial customers who seek innovative solutions to practical problems that require new technology. The Technology Development segment derives its revenue primarily from services. The Technology Development segment provides applied research to customers in our areas of focus.
Our President and Chief Executive Officer and his direct reports collectively represent our chief operating decision makers, and they evaluate segment performance based primarily on revenue and operating income or loss.
Information about the results of operations for each segment is set forth in the table below. There were no significant inter-segment sales during the years ended December 31, 2019 and 2018.
During the years ended December 31, 2019 and 2018, 32% and 24%, respectively, of our total sales took place outside the United States. Customers in China represented 11% of total revenues in the year ended December 31, 2019, while no other single country, outside of the United States, represented more than 10% of total revenues in the year ended December 31, 2018.

                                         | Years ended December 31, |
---------------------------------------- | ------------------------ | -----------
                                         | 2019                     | 2018
Products and Licensing revenue           | $44,491,041              | $21,949,689
Technology Development revenue           | 26,024,674               | 20,967,556
Total revenue                            | $70,515,715              | $42,917,245
Products and Licensing operating income  | $1,807,616               | $499,323
Technology Development operating income  | 1,507,405                | 378,212
Total operating income                   | $3,315,021               | $877,535
Depreciation, Technology Development     | $397,296                 | $379,952
Depreciation, Products and Licensing     | $552,285                 | $273,185
Amortization, Technology Development     | $91,185                  | $130,765
Amortization, Products and Licensing     | $1,462,525               | $418,349

. Financial Information Segments
 operations divided into segments Products Licensing Technology Development. Products Licensing develops sells licenses technologies concepts. revenue from sales development licenses.
 engineers scientists collaborate government experts identify technologies market potential. fee-for-service contracts industrial customers. revenue services. provides research.
 President Chief Executive Officer direct reports evaluate performance revenue operating income loss.
 results table. no significant inter-segment sales December 31, 2019 2018.
 32% 24%, sales outside United States. China 11% revenues no other country 10% revenues 2018.
 Products Licensing revenue $44,491,041 $21,949,689
 Technology Development revenue 26,024,674 20,967,556
 Total revenue $70,515,715 $42,917,245
 Products Licensing income $1,807,616 $499,323
 Technology Development 1,507,405 378,212
 Total $3,315,021 $877,535
 Technology Development $397,296 $379,952
Licensing,285 $273,185
 $91,185 $130,765
 Licensing,462,525 $418,349


Executive Annual Incentive Plan Target Opportunities: The following table presents each NEO’s target incentive opportunity for FY19 under the FY19 Executive Annual Incentive Plan (the ‘‘FY19 EAIP’’):
(1) In connection with Mr. Kapuria’s promotion, his FY19 Individual Annual Incentive Target under the FY19 EAIP increased from 60% to 100% effective May 8, 2018. Mr. Kapuria’s prorated target annual incentive value for FY19 is $427,451.

                        | FY19 Individual Annual | FY19
----------------------- | ---------------------- | ----------
NEO                     | Incentive Target (%)   | Target ($)
Gregory S. Clark        | 150                    | 1,500,000
Nicholas R. Noviello    | 100                    | 650,000
Amy L. Cappellanti-Wolf | 70                     | 308,000
Samir Kapuria(1)        | 100                    | 450,000
Scott C. Taylor         | 100                    | 600,000

Annual Incentive Plan Opportunities incentive FY19
. promotion FY19 Annual Incentive Target increased 60% to 100% May 8 2018. incentive value $427,451.
 Incentive Target$
 Gregory S. Clark 1,500,000
 Nicholas. Noviello 650,000
 Amy L. Cappellanti-Wolf 308,000
 Samir 450,000
 Scott C. Taylor 600,000


Note 11: Income Taxes
The components of income before income taxes and equity income (loss) from equity method investments are as follows (amounts in thousands):
(1) Fiscal years ended March 31, 2018 and 2017 adjusted due to the adoption of ASC 606.

                           |          | Fiscal Years Ended March 31, |
-------------------------- | -------- | ---------------------------- | ------
                           | 2019     | 2018                         | 2017
Domestic (U.S.) (1)        | $95,639  | $141,582                     | $(67)
Foreign (Outside U.S.) (1) | 74,792   | 45,485                       | 9,875
Total (1)                  | $170,431 | $187,067                     | $9,808

Note 11 Income Taxes
 equity income investments
 Fiscal years ended March 31, 2018 2017 adjusted ASC 606.
 2019 2018 2017
 Domestic. $95,639 $141,582
 Foreign (Outside. 74,792 45,485 9,875
 Total $170,431 $187,067 $9,808


Income (Loss) Before Income Taxes
(1) Included in Corporate and Other are the following: contingent consideration adjustments, investment impairment, pension and postretirement plans actuarial (gains) and losses, interest (income) and expense, net foreign exchange (gains) and losses, intercompany eliminations and acquisition related charges.
The increase in income before income taxes in Semiconductor Test from 2018 to 2019 was driven primarily by an increase in semiconductor tester sales for 5G infrastructure and image sensors, partially offset by a decrease in sales in the automotive and analog test segments. The increase in income before income taxes in System Test from 2018 to 2019 was primarily due to higher sales in Storage Test of 3.5” hard disk drive testers, higher sales in Defense/Aerospace test instrumentation and systems, and higher sales in Production Board Test from higher 5G demand. The increase in income before income taxes in Wireless Test from 2018 to 2019 was primarily due to higher demand for millimeter wave and cellular test products driven by new wireless standards and 5G partially offset by lower sales in connectivity test products and services. The decrease in income before income taxes in Industrial Automation from 2018 to 2019 was due primarily to higher sales and marketing, and engineering spending.

                        | 2019   | 2018          | 2018-2019 Change
----------------------- | ------ | ------------- | ----------------
                        |        | (in millions) |
Semiconductor Test      | $417.0 | $397.6        | $19.4
System Test             | 93.5   | 48.9          | 44.6
Wireless Test           | 35.6   | 29.1          | 6.5
Industrial Automation   | (5.9)  | 7.7           | (13.6)
Corporate and Other (1) | (14.4) | (15.4)        | 1.0
                        | $525.8 | $467.8        | $58.0

Income Before Taxes
 Included contingent adjustments investment impairment pension postretirement plans actuarial losses interest expense foreign exchange intercompany eliminations acquisition charges.
 increase income Semiconductor Test 2018 2019 driven sales 5G infrastructure offset decrease automotive analog test. System Test due higher sales Storage Test. Defense/Aerospace test instrumentation Production Board Test 5G demand. increase Wireless Test due higher demand millimeter wave cellular test products wireless standards 5G offset lower sales connectivity test. decrease Industrial Automation higher sales marketing engineering spending.
 millions
 Semiconductor Test $417. $397. $19.
 System Test 93. 48. 44.
 Wireless Test 35. 29.
 Industrial Automation (5. 7. (13.
 Corporate Other (14. (15.
 $525. $467. $58.


ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
NOTE 6. EARNINGS PER SHARE
Basic earnings per share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding (using the if-converted and treasury stock methods), if our outstanding stock options and restricted stock units had been converted to common shares, and if such assumed conversion is dilutive.
The following is a reconciliation of the weighted-average shares outstanding used in the calculation of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017:

                                                                                |         | Years Ended December 31, |
---------------------------------------------------------------------------------- | ------- | ------------------------ | --------
                                                                                | 2019    | 2018                     | 2017
Income from continuing operations                                                  | $56,495 | $147,149                 | $136,101
Income from continuing operations attributable to noncontrolling interest          | 34      | 86                       | —
Income from continuing operations attributable to Advanced Energy Industries, Inc. | $56,461 | $147,063                 | $136,101
Basic weighted-average common shares outstanding                                   | 38,281  | 39,081                   | 39,754
Assumed exercise of dilutive stock options and restricted stock units              | 214     | 271                      | 422
Diluted weighted-average common shares outstanding                                 | 38,495  | 39,352                   | 40,176
Continuing operations:                                                             |         |                          |
Basic earnings per share                                                           | $ 1.47  | $ 3.76                   | $  3.42
Diluted earnings per share                                                         | $ 1.47  | $ 3.74                   | $  3.39

ADVANCED INDUSTRIES. FINANCIAL STATEMENTS share amounts
 6. EARNINGS PER SHARE
 Basic earnings share computed income weighted-average shares. diluted EPS similar denominator increased additional common shares stock options restricted stock units converted common shares conversion.
 reconciliation weighted-average shares basic diluted earnings per share years ended December 31, 2019 2018 2017:
 Income continuing operations $56,495 $147,149 $136,101
 noncontrolling interest
 Advanced Energy Industries. $56,461 $147,063 $136,101
 Basic-average common shares 38,281 39,081  39,754
 dilutive stock options restricted stock units
 Diluted shares 38,495 39,352 40,176
 Basic earnings per share $ 1. 47 $. 76.
 Diluted earnings share. 47 $. 74.


Note 21 Debt due within one year
(1) Includes commercial paper of $1,502 million in U.S. dollars ($1,951 million in Canadian dollars) and $2,314 million in U.S. dollars ($3,156 million in Canadian dollars) as at December 31, 2019 and December 31, 2018, respectively, which were issued under our U.S. commercial paper program and have been hedged for foreign currency fluctuations through forward currency contracts. See Note 26, Financial and capital management, for additional details.
(2) Included in long-term debt due within one year is the current portion of lease liabilities of $775 million as at December 31, 2019 and the current portion of finance leases of $466 million as at December 31, 2018.

FOR THE YEAR ENDED DECEMBER 31         | NOTE | WEIGHTED AVERAGE INTEREST RATE AT DECEMBER 31, 2019 | 2019  | 2018
-------------------------------------- | ---- | --------------------------------------------------- | ----- | -----
Notes payable (1)                      | 26   | 2.03%                                               | 1,994 | 3,201
Loans secured by trade receivables     | 26   | 2.71%                                               | 1,050 | 919
Long-term debt due within one year (2) | 22   | 4.77%                                               | 837   | 525
Total debt due within one year         |      |                                                     | 3,881 | 4,645

Debt
 Includes paper $1,502 million.$1,951 million Canadian $2,314 million.$3,156 million December 31, 2019 2018 issued. commercial paper program hedged currency. Note 26, Financial capital management.
 long-term debt lease liabilities $775 million 2019 finance leases $466 million 31, 2018.
 DECEMBER 31 AVERAGE INTEREST RATE DECEMBER 31, 2019
 Notes payable 26. 03% 1,994 3,201
 Loans trade receivables. 71% 1,050
 Long-term debt 22 4. 77% 837 525
 Total debt 3,881 4,645


CREDIT FACILITIES
Bell Canada may issue notes under its Canadian and U.S. commercial paper programs up to the maximum aggregate principal amount of $3 billion in either Canadian or U.S. currency provided that at no time shall such maximum amount of notes exceed $4 billion in Canadian currency which equals the aggregate amount available under Bell Canada’s committed supporting revolving and expansion credit facilities as at December 31, 2019. The total amount of the net available committed revolving and expansion credit facilities may be drawn at any time.
The table below is a summary of our total bank credit facilities at December 31, 2019.
(1) Bell Canada’s $2.5 billion and additional $500 million committed revolving credit facilities expire in November 2024 and November 2020, respectively, and its $1 billion committed expansion credit facility expires in November 2022. Bell Canada has the option, subject to certain conditions, to convert advances outstanding under the additional $500 million revolving credit facility into a term loan with a maximum one-year term.
(2) As of December 31, 2019, Bell Canada’s outstanding commercial paper included $1,502 million in U.S. dollars ($1,951 million in Canadian dollars). All of Bell Canada’s commercial paper outstanding is included in debt due within one year.

                                                            | TOTAL AVAILABLE | DRAWN | LETTERS OF CREDIT | COMMERCIAL PAPER OUTSTANDING | NET AVAILABLE
----------------------------------------------------------- | --------------- | ----- | ----------------- | ---------------------------- | -------------
Committed credit facilities                                 |                 |       |                   |                              |
Unsecured revolving and expansion credit facilities (1) (2) | 4,000           | –     | –                 | 1,951                        | 2,049
Other                                                       | 106             | –     | 106               | –                            | –
Total committed credit facilities                           | 4,106           | –     | 106               | 1,951                        | 2,049
Total non-committed credit facilities                       | 1,939           | –     | 1,059             | –                            | 880
Total committed and non-committed credit facilities         | 6,045           | –     | 1,165             | 1,951                        | 2,929

 Bell Canada issue notes Canadian U. S. commercial paper programs maximum $3 billion Canadian U. currency exceed $4 billion Canadian equals Bell revolving expansion credit facilities December 31, 2019. total net revolving credit facilities drawn.
 table bank credit facilities December 31, 2019.
 Bell Canada’s $2. 5 billion $500 million revolving credit facilities expire November 2024 2020 $1 billion expansion credit facility expires November 2022. convert advances additional $500 million term loan one-year term.
 December 31, 2019 Bell outstanding commercial paper $1,502 million U. S. dollars ($1,951 million Canadian dollars. commercial paper debt due within one year.
 TOTAL AVAILABLE CREDIT COMMERCIAL PAPER
 Committed credit facilities
 Unsecured revolving expansion 1,951 2,049
 4,106
 non-committed
 non 6,045


(1) Vessel Calendar Days is the total number of days the vessels were in our fleet.
(2) Time Charter Equivalent (“TCE”) Rate, results from Net Voyage Revenue divided by total TCE days.
The change in Voyage revenue is due to two main factors:
i)  The number of TCE days
ii)  The change in the TCE rate achieved.
With regards to i), the decrease in vessel calendar days is mainly due to the disposal of ten vessels in 2018, offset by three 2018 Newbuildings delivered in the latter part of 2018.
With regards to ii), the TCE rate increased by $8,560, or 65.4%. The indicative rates presented by Clarksons Shipping increased by 91.7% for the twelve months of 2019 compared to the same twelve months in 2018 to $31,560 from $16,466, respectively. The rates presented by Clarksons Shipping were significantly influenced by the spike in the Suezmax tanker rates in the fourth quarter of both 2019 and 2018. Our average TCE was also positively impacted by the increased tanker rates towards the end of 2019, but not to the same extent as the rates reported by Clarksons Shipping. We expect this spike to materialize to a larger extent in the first quarter of 2020 compared to the rates reported by Clarksons Shipping.
As a result of i) and ii) net voyage revenues increased by 41.5% from $124.0 million for the year ended December 31, 2018, to $175.5 million for the year ended December 31, 2019.

                                                  |           | Years Ended December 31,     |
------------------------------------------------- | --------- | ---------------------------- | ---------
All figures in USD ‘000, except TCE rate per day  | 2019      | 2018                         | Variance
Voyage Revenue                                    | 317,220   | 289,016                      | 9.8%
Less Voyage expenses                              | (141,770) | (165,012)                    | (14.1%)
Net Voyage Revenue                                | 175,450   | 124,004                      | 41.5%
Vessel Calendar Days (1)                          | 8,395     | 9,747                        | (13.9%)
Less off-hire days                                | 293       | 277                          | 5.8%
Total TCE days                                    | 8,102     | 9,470                        | (14.4%)
TCE Rate per day (2)                              | $21,655   | $13,095                      | 65.4%)
Total Days for vessel operating expenses          | 8,395     | 9,747                        | (13.9%)

Vessel Calendar Days fleet.
 Time Charter Equivalent Rate Net Voyage Revenue divided by TCE days.
 change revenue due to
 number TCE days
 change TCE rate.
 decrease days due disposal ten vessels 2018 offset three Newbuildings.
 TCE rate increased $8,560. 4%. rates Clarksons Shipping increased. 7% twelve 2019 $31,560 $16,466. influenced Suezmax tanker rates. average TCE impacted increased tanker rates not. spike first quarter 2020.
 net voyage revenues increased 41. 5% from $124. million to $175. million 2019.
 figures USD except TCE rate per day
 Voyage Revenue 317,220 289,016 9. 8%
 Less Voyage expenses (141,770). 1%)
 Net Voyage Revenue 175,450 124,004 41. 5%
 Vessel Calendar Days 8,395 9,747 (13. 9%)
 Less off-hire days 293.
 TCE days 8,102 9,470 (14.
 $21,655 $13,095.
 expenses 8,395 9,747.


Note 12—Property, Plant and Equipment
Property, plant and equipment, net consisted of the following:
Depreciation expense was $61 million, $56 million and $55 million for fiscal 2019, 2018 and 2017, respectively.

                                                | January 3, 2020 | December 28, 2018
----------------------------------------------- | --------------- | -----------------
                                                | (in millions)   |
Computers and other equipment                   | $259            | $233
Leasehold improvements                          | 203             | 206
Office furniture and fixtures                   | 37              | 36
Buildings and improvements                      | 23              | 56
Land                                            | 4               | 40
Construction in progress                        | 104             | 15
                                                | 630             | 586
Less: accumulated depreciation and amortization | (343)           | (349)
                                                | $ 287           | $ 237

Plant Equipment
 Depreciation $61 million $56 million $55 million 2019 2018 2017.
 January 3, 2020 December 28, 2018
 Computers equipment $259 $233
 Leasehold improvements
 Office furniture fixtures
 Buildings improvements
 Land
 Construction
 accumulated depreciation amortization (343)
 287


GasLog Ltd. and its Subsidiaries
Notes to the consolidated financial statements (Continued)
For the years ended December 31, 2017, 2018 and 2019
(All amounts expressed in thousands of U.S. Dollars, except share and per share data)
16. Voyage Expenses and Commissions
An analysis of voyage expenses and commissions is as follows:
Bunkers’ consumption and other voyage expenses represents mainly bunkers consumed during vessels’ unemployment and off-hire.

                                               |        | For the year ended December 31, |
---------------------------------------------- | ------ | ------------------------------- | ------
                                               | 2017   | 2018                            | 2019
Brokers’ commissions on revenue                | 6,456  | 7,555                           | 7,527
Bunkers’ consumption and other voyage expenses | 8,948  | 12,819                          | 16,245
Total                                          | 15,404 | 20,374                          | 23,772

GasLog Ltd. Subsidiaries
 consolidated financial statements
 years December 31, 2017 2018 2019
 amounts. Dollars except
. Voyage Expenses Commissions
 analysis expenses
 unemployment off-hire.
 year December 31,
 2017 2018 2019
 commissions revenue 6,456 7,555
 consumption expenses 12,819 16,245
 Total 15,404 20,374 23,772


2. Revenue
The Company is a global manufacturer of component and subsystem devices whose components are found in the primary end-markets of the aerospace, appliance, automotive, commercial vehicle, construction, consumer and industrial equipment, communications (including information processing and storage, networking equipment and wireless and terrestrial voice/data systems), medical, rail and other transportation industries. On April 29, 2018, the Company adopted ASC 606 along with the related amendments using a modified retrospective approach to all contracts open as of that date.
Upon adoption, the Company recognized a $0.1 million increase to opening retained earnings. This adjustment was a result of modifying the METHODE ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-14 Company's revenue recognition pattern for highly customized goods with no alternative use to over time recognition instead of point in time and for deferring revenue related to material rights that we provide to our customers. The overall impact to the Company's financial statements was immaterial. The Company has modified its controls to address the risks present under ASC 606.
As the Company has adopted ASC 606 using the modified retrospective approach, prior periods have not been restated, and as such they are presented under ASC 605. The impact of the changes in accounting policy on fiscal 2019 is provided below.

                      |             | Fiscal Year Ended April 27, 2019 |
--------------------- | ----------- | -------------------------------- | ---------------------
(Dollars in Millions) | As Reported | Adjustments                      | Balance Under ASC 605
Net Sales             | $1,000.3    | $(24.2)                          | $1,024.5
Cost of Products Sold | $734.5      | $(24.2)                          | $758.7
Total Inventories     | $116.7      | $(0.5)                           | $117.2
Contract Assets       | $0.8        | $0.8                             | $—
Contract Liabilities  | $0.3        | $0.3                             | $—
Retained Earnings     | $545.2      | $0.1                             | $545.1

.
 Company global manufacturer subsystem devices aerospace appliance automotive commercial vehicle construction consumer industrial equipment communications medical transportation industries. April 29, 2018 adopted ASC 606 amendments modified retrospective approach contracts.
 recognized $0. 1 million increase retained earnings. modifying ELECTRONICS. revenue recognition pattern customized goods deferring revenue material rights. impact financial statements immaterial. modified controls address risks ASC 606.
 adopted ASC 606 prior periods not restated presented ASC 605. impact changes accounting policy fiscal 2019.
 Fiscal Year Ended April 27, 2019
 Adjustments Balance ASC 605
 Net Sales $1,000. 3. $1,024.
 Cost Products Sold $734. 5. $758.
 Total Inventories $116. $117.
 Contract Assets $0.
 Contract Liabilities.
 Retained Earnings $545. 2 $0.1|.


NOTE 6 - continued
For information on assets provided as collateral security, please refer to note 16. Please refer to note 8 for information on impairment testing.
The depreciation expense related to "Other plant and operating equipment" of USD 1.0m relates to "Administrative expense" (2018: USD 1.1m, 2017: USD 0.9m). Depreciation and impairment losses on tangible fixed assets on "Vessels and capitalized dry-docking" relate to operating expenses.

USDm                                | 2019 | 2018 | 2017
----------------------------------- | ---- | ---- | ----
Other plant and operating equipment |      |      |
Cost:                               |      |      |
Balance as of 1 January             | 5.8  | 3.6  | 2.7
Adjustment on transition to IFRS 16 | 0.3  | -    | -
Additions                           | 2.2  | 2.2  | 1.0
Disposals                           | -0.2 | -    | -0.1
Balance as of 31 December           | 8.1  | 5.8  | 3.6
Depreciation:                       |      |      |
Balance as of 1 January             | 2.8  | 1.7  | 0.9
Disposals                           | -    | -    | -0.1
Depreciation for the year           | 1.0  | 1.1  | 0.9
Balance as of 31 December           | 3.8  | 2.8  | 1.7
Carrying amount as of 31 December   | 4.3  | 3.0  | 1.9

NOTE 6
 collateral security refer note 16. note 8 impairment testing.
 depreciation expense plant operating equipment USD 1. expense USD 1. 2017: USD. 9m. Depreciation impairment losses assets capitalized dry-docking operating expenses.
 2019 2018 2017
 plant operating equipment
 Balance 1 January 5. 8 3. 6.
 Adjustment transition IFRS 16.
 Additions.
.
 Balance 31 December 8. 5. 3.
 Depreciation
 Balance 1 January 2. 8. 7.
 Disposals.
 Depreciation year.
 Balance 31 December 3. 8.
 Carrying amount 31 December 4. 3.


Cash Flows
Year ended December 31, 2018 compared to the year ended December 31, 2019
The following table summarizes our net cash flows from operating, investing and financing activities for the years indicated:
Net Cash Provided By Operating Activities
Net cash provided by operating activities increased by $33.7 million, from $283.7 million during the year ended December 31, 2018 to $317.4 million during the year ended December 31, 2019. The increase was attributable to an increase of $57.7 million caused by movements in working capital accounts due primarily to (a) increased cash from related parties of $56.3 million (mainly collection of Cool Pool receivables), (b) an increase of $20.3 million from movements in other payables and accruals, and (c) an increase of $4.6 million from movements in trade and other receivables, partially offset by an increase in cash collateral on swaps of $22.2 million, an increase of $28.2 million in total revenues (revenues and net pool allocation), partially offset by a decrease of $29.9 million in cash paid for interest including the interest paid for finance leases and a net decrease of $22.3 million from the remaining movements.
Net Cash Used In Investing Activities
Net cash used in investing activities decreased by $250.0 million, from $693.0 million during the year ended December 31, 2018 to $443.0 million during the year ended December 31, 2019. The decrease is attributable to a decrease of $203.7 million in net cash used in payments for the construction costs of newbuildings and other fixed assets, a net increase of $45.5 million in cash from short-term investments in the year ended December 31, 2019, compared to the same period of 2018 and an increase of $0.8 million in cash from interest income.
Net Cash Provided By Financing Activities
Net cash provided by financing activities decreased by $318.0 million, from $368.1 million during the year ended December 31, 2018 to $50.1 million during the year ended December 31, 2019. The decrease is mainly attributable to an increase of $316.0 million in bank loan repayments, a decrease of $208.4 million in proceeds from the GasLog Partners’ issuance of preference units, a decrease of $60.4 million in proceeds from the GasLog Partners’ common unit offerings, an increase of $46.7 million in payments for NOK bond repurchase at a premium, an increase of $26.6 million in cash used for purchases of treasury shares or common units of GasLog Partners, an increase of $18.5 million in payments of loan issuance costs, an increase of $15.4 million in dividend payments on common and preference shares, an increase of $3.7 million in payments for cross currency swaps’ termination, an increase of $2.6 million in payments for lease liabilities, an increase of $0.8 million in payments for equity-related costs and a decrease of $0.5 million in proceeds from stock option exercise, partially offset by an increase of $381.6 million in proceeds from borrowings.

                                          |           | Year ended December 31, |
----------------------------------------- | --------- | ----------------------- | ---------
                                          | 2018      | 2019                    | Change
Amounts in thousands of U.S. dollars      |           |                         |
Net cash provided by operating activities | $283,710  | $317,423                | $33,713
Net cash used in investing activities     | (692,999) | (442,978)               | 250,021
Net cash provided by financing activities | 368,120   | 50,066                  | (318,054)

Cash Flows
 2018 2019
 table summarizes net cash flows from operating investing financing activities
 Net Cash Activities
 increased $33. 7 million from $283. million to $317. 4 million 2019. increase $57. 7 million working capital increased cash from related parties $56. 3 million Pool $20. 3 million payables accruals $4. 6 million trade receivables offset increase cash collateral on swaps $22. 2 million increase $28. 2 million total revenues decrease $29. 9 million cash interest decrease $22. 3 million movements.
 Net Cash Investing Activities
 decreased $250. million from $693. million 2018 to $443. million 2019. $203. 7 million construction increase $45. 5 million from short-term investments increase $0. 8 million interest income.
 Cash Financing Activities
 decreased $318. million from $368. to $50. increase $316. million bank loan repayments decrease $208.GasLog decrease $60. 4 million common unit offerings increase $46. 7 million NOK bond repurchase $26. 6 million cash $18. 5 million loan costs $15. 4 million dividend $3. 7 million cross currency termination $2. 6 million lease liabilities $0. 8 million equity costs decrease $0. 5 million stock option increase $381. 6 million borrowings.
 Year December 31,
 2018 2019
. dollars
 operating activities $283,710 $317,423 $33,713
 investing (692,999 (442,978) 250,021
 financing 368,120 50,066 (318,054)


To keep pace with client and market demand, we maintain an ongoing program of new product development.
Our software engineers are responsible for creating and building our software products. They do so by combining their expertise with input from our sales, marketing and product management groups as to market trends and needs. Our software engineers design and write software and manage its testing and quality assurance. We utilize third-party software developers both domestically and overseas working under our supervision to supplement our software engineers. Using these external software developers in a strategic manner allows us to access highly skilled labor pools, maintain a 24-hour development schedule, decrease time to market, and minimize programming costs.
All phases of research and development, or R&D, including scope approval, functional and implementation design, object modeling and programming, are subject to extensive internal quality assurance testing. We maintain an ongoing focus on improving our quality assurance testing infrastructure and practices. Technical reporting and client support feedback confirm the continuing positive effect of our ongoing enhancement of research and development and quality assurance processes.
Our EFT Arcus product is hosted by third-party cloud services providers. We rely upon those third parties, such as Microsoft Azure, for the continued development and enhancement of their cloud services infrastructures on which our products are hosted. We do not perform significant research and development of cloud services infrastructures using our own personnel.
Our R&D expenditures profile has been as follows ($ in thousands):
Our total R&D expenditures decreased 23% in 2019 as compared to 2018 primarily due to fewer employed software engineers and technical personnel.
Total resources expended for R&D serves to illustrate our total corporate efforts to improve our existing products and to develop new products regardless of whether or not our expenditures for those efforts were expensed or capitalized. Total resources expended for R&D is not a measure of financial performance under GAAP and should not be considered a substitute for R&D expense and capitalized software development costs individually. While we believe the non-GAAP total resources expended for R&D amount provides useful supplemental information regarding our overall corporate product improvement and new product creation activities, there are limitations associated with the use of this non-GAAP measurement. Total resources expended for R&D is a non-GAAP measure not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies since there is no standard for preparing this non-GAAP measure. As a result, this non-GAAP measure of total resources expended for R&D has limitations and should not be considered in isolation from, or as a substitute for, R&D expense and capitalized software development costs individually.
Research and Development

                                       | Year ending December 31, |
-------------------------------------- | ------------------------ | ------
                                       | 2019                     | 2018
R&D expensed                           | $1,355                   | $1,883
Capitalized software development costs | $1,074                   | $1,276
Total resources expensed for R&D       | $2,430                   | $3,159

demand maintain program new product development.
 software engineers creating products. expertise with input sales marketing product management market trends needs. design write manage testing quality assurance. utilize third software developers supplement engineers. skilled labor 24-hour development schedule time to market programming costs.
 phases research development scope approval design modeling programming subject to internal quality assurance testing. focus improving quality assurance testing infrastructure practices. confirm enhancement research development quality assurance processes.
 EFT Arcus product hosted by third-party cloud services providers. rely for development. perform research development using own personnel.
 R&D expenditures profile
 expenditures decreased 23% in 2019 2018 due to fewer employed software engineers technical personnel.
 Total resources expended for R&D efforts improve develop new products. not measure financial performance GAAP substitute for R&D expense capitalized software development costs. non-GAAP resources expended for R&D information improvement creation limitations.resources expended R&D non-GAAP measure comparable no standard. limitations not considered R&D expense software development costs.
 Research Development
 Year ending December 31,
 2018
 R&D expensed $1,355 $1,883
 Capitalized software development costs $1,074 $1,276
 Total resources expensed R&D $2,430 $3,159


The following table provides a reconciliation of Adjusted Gross Profit to Gross Profit, the most directly comparable financial measure presented in accordance with U.S. GAAP:
(a) Represents depreciation and amortization expense included in cost of goods sold
(b) Represents additional operating costs incurred in connection with the start-up of our new manufacturing lines as part of the Freshpet Kitchens expansion project in 2016 that included adding two additional product lines.
(c) Represents non-cash share-based compensation expense included in cost of goods sold.

                                          | Twelve Months Ended December 31, |         |         |         |
----------------------------------------- | -------------------------------- | ------- | ------- | ------- | -------
                                          | 2019                             | 2018    | 2017    | 2016    | 2015
                                          | (Dollars in thousands)           |         |         |         |
Gross Profit                              | $114,197                         | $89,990 | $72,416 | $60,371 | $54,649
Depreciation expense (a)                  | 6,370                            | 6,089   | 5,791   | 4,028   | 2,566
Plant start-up expense (b)                | —                                | —       | —       | 1,628   | —
Non-cash share-based compensation (c)     | 922                              | 859     | 243     | 221     | 201
Adjusted Gross Profit                     | $121,489                         | $96,938 | $78,450 | $66,248 | $57,416
Adjusted Gross Profit as a % of Net Sales | 49.4%                            | 50.2%   | 51.5%   | 51.1%   | 50.6%

table Adjusted Gross Profit. GAAP
 depreciation amortization expense goods sold
 additional operating costs new manufacturing lines Freshpet Kitchens expansion project 2016 product lines.
 non-cash share-based compensation expense goods.
 Twelve Months Ended December 31,
 2019 2018 2017 2016 2015
 Gross Profit $114,197  $89,990 $72,416 $60,371 $54,649
 Depreciation expense 6,370
 Plant start-up expense
 Non-cash share-based compensation
 Adjusted Gross Profit $121,489 $96,938 $78,450 $66,248 $57,416
 Net Sales 49. 4%. 2%. 5%. 1%. 6%


Disaggregation of Revenue
The following table disaggregates revenue generated within the United States (U.S.) from revenue generated from customers outside of the U.S. Revenue
for transaction tax compliance in the U.S. is further disaggregated based on the solutions or services purchased by customers. Total revenues consisted of the
following (in thousands):

                                            |          | For the Year Ended December 31, |
------------------------------------------- | -------- | ------------------------------- | --------
                                            | 2019     | 2018                            | 2017
Revenue (U.S.):                             |          |                                 |
Subscription and returns                    |          |                                 |
Tax determination                           | $203,584 | $147,847                        | $114,575
Tax returns and compliance management       | 127,815  | 91,239                          | 74,454
Interest income on funds held for customers | 3,213    | 1,055                           | -
Total subscription and returns              | 334,612  | 240,141                         | 189,029
Professional services                       | 24,399   | 15,126                          | 12,476
Total revenue (U.S.)                        | 359,011  | 255,267                         | 201,505
Total revenue (non U.S.)                    | 23,410   | 16,831                          | 11,654
Total revenue                               | $382,421 | $272,098                        | $213,159

Disaggregation Revenue
 table disaggregates United States. outside.
 transaction tax compliance. disaggregated solutions. revenues
 Ended December 31,
 Revenue.
 Tax determination $203,584 $147,847 $114,575
 returns compliance 127,815 91,239 74,454
 Interest income funds 3,213 1,055
 subscription returns 334,612 240,141 189,029
 Professional services 24,399 15,126 12,476
 revenue. 359,011 255,267 201,505
. 23,410 16,831 11,654
 $382,421 $272,098 $213,159


2) Cloud Services and Subscriptions:
Cloud services and subscriptions revenues are from hosting arrangements where in connection with the licensing of software, the end user doesn’t take possession of the software, as well as from end-to-end fully outsourced business-to-business (B2B) integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis via an identified line. Our cloud arrangements can be broadly categorized as "platform as a service" (PaaS), "software as a service" (SaaS), cloud subscriptions and managed services.
Cost of Cloud services and subscriptions revenues is comprised primarily of third party network usage fees, maintenance of in-house data hardware centers, technical support personnel-related costs, and some third party royalty costs.
Cloud services and subscriptions revenues increased by $78.8 million or 9.5% during the year ended June 30, 2019 as compared to the prior fiscal year; up 10.8% after factoring the impact of $10.8 million of foreign exchange rate changes. Geographically, the overall change was attributable to an increase in Americas of $61.6 million, an increase in EMEA of $14.7 million, and an increase in Asia Pacific of $2.6 million.
The number of Cloud services deals greater than $1.0 million that closed during Fiscal 2019 was 46 deals, consistent with that in Fiscal 2018.
Cost of Cloud services and subscriptions revenues increased by $19.8 million during the year ended June 30, 2019 as compared to the prior fiscal year, due to an increase in labour-related costs of approximately $19.1 million and an increase in third party network usage fees of $1.3 million. These were partially offset by a decrease in other miscellaneous costs of $0.6 million. The increase in labour-related costs was primarily due to increased headcount from recent acquisitions.
Overall, the gross margin percentage on Cloud services and subscriptions revenues increased to approximately 58% from approximately 56%.
For illustrative purposes only, had we accounted for revenues under proforma Topic 605, Cloud services and subscriptions revenues would have been $901.5 million for the year ended June 30, 2019, which would have been higher by approximately $72.5 million or 8.7% as compared to the prior fiscal year; and would have been up 10.1% after factoring the impact of $11.0 million of foreign exchange rate changes. Geographically, the overall change would have been attributable to an increase in Americas of $56.4 million, and an increase in EMEA of $12.4 million and an increase in Asia Pacific of $3.7 million.
The $6.4 million difference between cloud service and subscription revenues recognized under Topic 606 and those proforma Topic 605 cloud services and subscriptions revenues described above is primarily the result of timing differences on professional services related to cloud contracts, where under Topic 605, revenues would have been deferred over the estimated life of the contract, but under Topic 606 these revenues are recognized as services are performed. For more details, see note 3 "Revenues" to our Consolidated Financial Statements.

                                                           |          |                            | Year Ended June 30, |                            |
---------------------------------------------------------- | -------- | -------------------------- | ------------------- | -------------------------- | --------
(In thousands)                                             | 2019     | Change increase (decrease) | 2018                | Change increase (decrease) | 2017
Cloud Services and Subscriptions:                          |          |                            |                     |                            |
Americas                                                   | $616,776 | $61,553                    | $555,223            | $70,216                    | $485,007
EMEA                                                       | 206,227  | 14,707                     | 191,520             | 40,673                     | 150,847
Asia Pacific                                               | 84,809   | 2,584                      | 82,225              | 12,584                     | 69,641
Total Cloud Services and Subscriptions Revenues            | 907,812  | 78,844                     | 828,968             | 123,473                    | 705,495
Cost of Cloud Services and Subscriptions Revenues          | 383,993  | 19,833                     | 364,160             | 64,310                     | 299,850
GAAP-based Cloud Services and Subscriptions Gross Profit   | $523,819 | $59,011                    | $464,808            | $59,163                    | $405,645
GAAP-based Cloud Services and Subscriptions Gross Margin % | 57.7%    |                            | 56.1%               |                            | 57.5%
% Cloud Services and Subscriptions Revenues by             |          |                            |                     |                            |
Geography:                                                 |          |                            |                     |                            |
Americas                                                   | 67.9%    |                            | 67.0%               |                            | 68.7%
EMEA                                                       | 22.7%    |                            | 23.1%               |                            | 21.4%
Asia Pacific                                               | 9.4%     |                            | 9.9%                |                            | 9.9%

Cloud Services Subscriptions
 revenues from hosting arrangements user outsourced integration solutions. software application hardware or third party customer accesses uses as-needed line. arrangements "platform subscriptions managed services.
 Cost network fees maintenance technical support costs third party royalty costs.
 revenues increased $78. 8 million 9. 5% June 2019 up 10. 8% $10. 8 million foreign exchange rate changes. Americas $61. 6 million EMEA $14. 7 million Asia Pacific $2. 6 million.
 Cloud services deals greater than $1. 0 million 2019 46 deals consistent 2018.
 increased $19. 8 million 2019 due labour-related costs $19. 1 million third party network usage fees $1. 3 million. offset by decrease other miscellaneous costs $0. 6 million. due to increased headcount acquisitions.
 gross margin percentage increased to 58% from.
accounted Topic 605 Cloud services $901. 5 million year June 30 2019 higher $72. 5 million 8. 7% prior up 10. 1% $11. 0 million foreign exchange rate changes. Americas $56. 4 million EMEA $12. 4 million Asia Pacific $3. 7 million.
 $6. 4 million difference revenues Topic timing differences revenues deferred contract Topic 606 recognized performed. note 3 Consolidated Financial Statements.
 Ended June 30
 2019 2018 2017
 Services Subscriptions
 Americas $616,776  $61,553  $555,223 $70,216 $485,007
 EMEA 206,227 14,707 191,520 40,673 150,847
 Asia Pacific 84,809 2,584 82,225 12,584 69,641
 Revenues 907,812 78,844 828,968 123,473 705,495
Cloud Services Subscriptions Revenues 383,993 19,833 364,160 64,310 299,850
 Profit $523,819 $59,011 $464,808 $59 $405,645
 Margin 57. 7%. 1%. 5%
 Americas 67. 0%. 7%
 22. 7% 23. 1% 21.
 Asia Pacific 9. 4%.