| _id | d1a73ca80 |
| title |  |
| text | 19. Related Party Transactions
Key management personnel compensation
All directors and executive management have authority and responsibility for planning, directing and controlling the activities of the Group, and are considered to be key management personnel.
Compensation for the Group’s key management personnel is as follows:

 |
| table | |         | Fiscal Year Ended June 30, |
------------------------------------ | ------- | -------------------------- | -------
                                     | 2019    | 2018                       | 2017
                                     |         | (U.S. $ in thousands)      |
Executive management                 |         |                            |
Short-term compensation and benefits | $3,835  | $2,991                     | $2,860
Post-employment benefits             | 109     | 99                         | 100
Share-based payments                 | 17,144  | 9,335                      | 26,030
                                     | $21,088 | $12,425                    | $28,990
Board of directors                   |         |                            |
Cash remuneration                    | $430    | $362                       | $388
Share-based payments                 | 1,772   | 1,577                      | 1,825
                                     | $2,202  | $1,939                     | $2,213 |


| _id | d1b39e53a |
| title |  |
| text | Defined Benefit Pension Plans

We recognize the funded status of each defined pension benefit plan as the difference between the fair value of plan assets and the projected benefit obligation of the employee benefit plans in the Consolidated Balance Sheets, with a corresponding adjustment to accumulated other comprehensive loss, net of taxes. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability on our Consolidated Balance Sheets. Subsequent changes in the funded status are reflected on

changes in the funded status are reflected on the Consolidated Balance Sheets in unrecognized pension items, a component of AOCL, which are included in total stockholders’ deficit. The amount of unamortized pension items is recorded net of tax.

We have amortized actuarial gains or losses over the average future working lifetime (or remaining lifetime of inactive participants if there are no active participants). We have used the corridor method, where the corridor is the greater of ten percent of the projected benefit obligation or fair value of assets at year end. If actuarial gains or losses do not exceed the corridor, then there is no amortization of gain or loss.

During the year ended December 31, 2017, several of our pension plans transferred in the sale of Diversey. Two international plans were split between Diversey and Sealed Air at the close of the sale. Unless noted, the tables in this disclosure show only activity related to plans retained by Sealed Air.
The following table shows the components of our net periodic benefit cost for the three years ended December 31, for our pension plans charged to operations:

(1) The amount recorded in inventory for the years ended December 31, 2019, 2018 and 2017 was not material.

 |
| table | |        | Year Ended December 31, |
--------------------------------------------------------------------------------------------------------- | ------ | ----------------------- | -----
(In millions)                                                                                | 2019   | 2018                    | 2017
Net periodic benefit (income) cost:                                                                       |        |                         |
U.S. and international net periodic benefit cost included in cost of sales(1)                             | $ 1.1  | $ 0.8                   | $ 1.4
U.S. and international net periodic benefit cost included in selling, general and administrative expenses | 2.8    | 3.5                     | 5.6
U.S. and international net periodic benefit (income) included in other (income) expense                   | (4.4)  | (8.4)                   | (6.0)
Total benefit (income) cost                                                                               | (0.5 ) | (4.1 )                  | $ 1.0 |


| _id | d1b3a8bde |
| title |  |
| text | Significant components of our deferred tax assets and liabilities are as follows:
The deferred tax assets and liabilities for fiscal 2019 and 2018 include amounts related to various acquisitions. The total change in deferred tax assets and liabilities in fiscal 2019 includes changes that are recorded to other comprehensive income (loss), retained earnings and goodwill.

We calculate deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities and measure them using the enacted tax rates and laws that we expect will be in effect when the differences reverse.

 |
| table | |          | September 30,
---------------------------------- | -------- | --------------
                                   | 2019     | 2018
                                   |          | (in thousands)
Deferred tax assets:               |          |
Accrued employee benefits          | $ 11,409 | $ 8,285
Allowances for loss contingencies  | 3,561    | 3,518
Deferred compensation              | 3,071    | 3,272
Intangible assets                  | —        | 1,361
Inventory valuation                | 8,036    | 1,154
Long-term contracts                | 6,995    | 7,751
Prepaid and accrued expenses       | 1,816    | 1,229
Retirement benefits                | 4,967    | 1,398
Tax credit carryforwards           | 33,118   | 35,137
Loss carryforwards                 | 36,248   | 29,097
Other                              | 818      | 264
Total gross deferred tax assets    | 110,039  | 92,466
Valuation allowance                | (69,098) | (81,838)
Total deferred tax assets          | 40,941   | 10,628
Deferred tax liabilities:          |          |
Debt obligation basis difference   | (4,582)  | —
Deferred revenue                   | (12,135) | (2,351)
Intangible assets                  | (18,592) | —
Property, plant and equipment      | (4,524)  | (5,079)
Unremitted earnings                | (977)    | (823)
Other                              | (587)    | (351)
Total deferred tax liabilities     | (41,397) | (8,604)
Net deferred tax asset (liability) | $ (456)  | $ 2,024 |


| _id | d1b3a781a |
| title |  |
| text | Our net sales by offering category for EMEA for 2019 and 2018, were as follows (dollars in thousands):
Net sales in EMEA remained flat (increased 5% excluding the effects of fluctuating foreign currency exchange rates), or down $3.6 million, in 2019 compared to 2018. Net sales of hardware declined 5%, year to year, while net sales of software and services were up 2% and 7%, respectively, year over year. The changes were the result of the following:

• Lower volume of net sales of networking solutions, partially offset by higher volume of net sales of devices, to large enterprise and public sector clients in hardware net sales. • Higher volume of software net sales to large enterprise and public sector clients.
• Higher volume of net sales of cloud solution offerings and increased software referral fees that are recorded on a net sales recognition basis. In addition, there was an increase in the volume of Insight delivered services.

 |
| table | | EMEA       |            |
--------- | ---------- | ---------- | -------
Sales Mix | 2019       | 2018       | %Change
Hardware  | $622,949   | $653,499   | (5%)
Software  | 753,729    | 736,509    | 2%
Services  | 149,966    | 140,233    | 7%
          | $1,526,644 | $1,530,241 | — |


| _id | d1b36dc82 |
| title |  |
| text | Environmental Performance Summary Below are some key environmental indicators, and are compiled based on the “ESG Reporting Guide” in Appendix 27 to the Listing Rules. Unless otherwise specified, the following data covers Tencent’s major office buildings and the main data centres in Mainland China. 1. Emissions 1.1 Office Buildings
Due to its business nature, the significant air emissions of the Group are GHG emissions, arising mainly from fuels and purchased electricity produced from fossil fuels.

The Group’s GHG inventory includes carbon dioxide, methane and nitrous oxide. GHG emissions data for the year ended 31 December 2019 is presented in carbon dioxide equivalent and is calculated based on the “2017 Baseline Emission Factors for Regional Power Grids in China for CDM and CCER Projects” issued by the Ministry of Ecology and Environment of China, and the “2006 IPCC Guidelines for National Greenhouse Gas Inventories” issued by the Intergovernmental Panel on Climate Change (IPCC)

Diesel is consumed by backup power generators.
Hazardous waste produced by the Group’s office buildings mainly includes waste toner cartridge and waste ink cartridge from printing equipment. Waste toner cartridge and waste ink cartridge are centralised and disposed of by printing suppliers. Such data covers all office buildings of the Group in Mainland China.

Non-hazardous waste produced by the Group’s office buildings mainly includes domestic waste and non-hazardous office waste. Domestic waste is disposed of by the property management companies and kitchen waste recycling vendors, and its data is not available, therefore estimation of domestic waste is made with reference to “Handbook on Domestic Discharge Coefficients for Towns in the First Nationwide Census on Contaminant Discharge” published by the State Council. Non-hazardous office waste is centralised

Non-hazardous office waste is centralised for disposal by vendors; hence such data covers all office buildings of the Group in Mainland China.

Hazardous waste produced by the Group’s data centres mainly includes waste lead-acid accumulators. Waste lead-acid accumulators are disposed of by qualified waste recycling vendors.
Non-hazardous waste produced by the Group’s data centres mainly includes waste servers and waste hard drives. Waste servers and destroyed waste hard drives are centralised and recycled by waste recycling vendors. Such data covers all the Group’s data centres.

 |
| table | Indicators                                                   | For the year ended 31 December |
------------------------------------------------------------ | ------------------------------ | ----------
                                                             | 2019                           | 2018
Total GHG emissions (Scopes 1 and 2) (tonnes)                | 113,501.50                     | 102,831.74
Direct GHG emissions (Scope 1) (tonnes)                      | 3,785.86                       | 2,554.31
Including: Gasoline (tonnes)                                 | 197.25                         | 191.00
Diesel (tonnes)                                              | 10.87                          | 11.07
Natural gas (tonnes)                                         | 3,577.74                       | 2,352.24
Indirect GHG emissions (Scope 2) (tonnes)                    | 109,715.64                     | 100,277.43
Including: Purchased electricity (tonnes)                    | 109,715.64                     | 100,277.43
Total GHG emissions per employee (tonnes per employee)       | 1.90                           | 2.01
Total GHG emissions per floor area (tonnes per square metre) | 0.07                           | 0.09
Hazardous waste (tonnes)                                     | 2.40                           | 2.51
Hazardous waste per employee (tonnes per employee)           | 0.00004                        | 0.00005
Non-hazardous waste (tonnes)                                 | 5,227.11                       | 4,566.52
Non-hazardous waste per employee (tonnes per employee)       | 0.09                           | 0.09 |


| _id | d1b3abdac |
| title |  |
| text | Stock Options—Stock options are typically granted at prices not less than 100% of market value of the underlying stock at the date of grant. Stock options typically vest over a period of 3 to 5 years from the grant date and expire 10 years after the grant date. The Company recorded $32.0, $23.2, and $18.3 of compensation expense relating to outstanding options during 2019, 2018 and 2017, respectively, as a component of general and administrative expenses at Corporate.

The Company estimates the fair value of its option awards using the Black-Scholes option valuation model. The stock volatility for each grant is measured using the weighted-average of historical daily price changes of the Company’s common stock over the most recent period equal to the expected life of the grant. The expected term of options granted is derived from historical data to estimate option exercises and employee forfeitures, and represents the period of time that options granted are expected to be

of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The weighted-average fair value of options granted in 2019, 2018 and 2017 were calculated using the following weighted-average assumptions:

 |
| table | | 2019  | 2018  | 2017
------------------------------------ | ----- | ----- | -----
Weighted-average fair value ($)      | 68.05 | 57.75 | 40.87
Risk-free interest rate (%)          | 2.37  | 2.65  | 2.03
Average expected option life (years) | 5.42  | 5.32  | 5.26
Expected volatility (%)              | 19.22 | 18.05 | 18.74
Expected dividend yield (%)          | 0.58  | 0.59  | 0.67 |


| _id | d1b310ef6 |
| title |  |
| text | 15 Financial risk management (continued)
(b) Credit risk
Credit risk arises from cash and cash equivalents, and trade and other receivables.
(i) Cash and cash equivalents and security deposits
Deposits are placed with Australian banks or independently rated parties with a minimum rating of ‘BBB+’. To reduce exposure deposits are placed with a variety of financial institutions.

The credit quality of financial assets can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:
In determining the credit quality of these financial assets, NEXTDC has used the long-term rating from Standard & Poor’s as of July 2019.

 |
| table | | 30 June 2019 | 30 June 2018
----------------- | ------------ | ------------
                  | $'000        | $'000
CASH AT BANK      |              |
AA rated          | 398,999      | 417,982
SECURITY DEPOSITS |              |
AA rated          | 8,822        | 4,151 |


| _id | d1b3258ce |
| title |  |
| text | Acquisitions and divestments
Acquisitions
In 2019, Ericsson made acquisitions with a negative cash flow effect amounting to SEK 1,815 (1,220) million. The acquisitions presented below are not material, but the Company gives the information to provide the reader a summarized view of the content of the acquisitions made. The acquisitions consist primarily of:

Kathrein: On October 2, 2019, the Company acquired assets from Kathrein, a world leading provider of antenna and filter technologies with approximately 4,000 employees. Kathrein’s antenna and filters business has a strong R&D organization with extensive experience in antenna design and research, coupled with a strong IPR portfolio. In addition to broadening Ericsson’s portfolio of antenna and filter products, the acquisition will bring vital competence for the evolution of advanced radio network products.

the evolution of advanced radio network products. The acquired Kathrein business has had a negative impact of SEK –0.5 billion since the acquisition, corresponding to –1 percentage point in Networks operating margin. Balances to facilitate the Purchase price allocation are preliminary.

CSF: On August 20, 2019, the Company acquired 100% of the shares in CSF Holdings Inc. a US-based technology company with approximately 25 employees. CSF strengthens iconectiv’s Business to Consumer (B2C) product platforms to enable growth in messaging and Toll-Free Number (TFN) management. Balances to facilitate the Purchase price allocation are final.

ST-Ericsson: Before ST-Ericsson was a joint venture where Ericsson and ST Microelectronics had a 50/50 ownership. This joint venture consisted of a number of legal entities where the two parties owned different stakes in the different legal entities. In December 2019 the Company initiated transactions to wind-down the legal structure of ST-Ericsson by acquiring the remaining shares in two legal ST-Ericsson entities and costs of SEK –0.3 billion impacted the result. The Company now owns 100% of the shares

result. The Company now owns 100% of the shares in those entities.

In order to finalize a Purchase price allocation all relevant information needs to be in place. Examples of such information are final consideration and final opening balances, they may remain preliminary for a period of time due
to for example adjustments of working capital, tax items or decisions from local authorities.
1) Acquisition-related costs are included in Selling and administrative expenses in the consolidated income statement.

 |
| table | Acquisitions 2017–2019                     |       |       |
------------------------------------------ | ----- | ----- | ----
                                           | 2019  | 2018  | 2017
Total consideration, including cash        | 1,957 | 1,314 | 62
Net assets acquired                        |       |       |
Cash and cash equivalents                  | 142   | 94    | –
Property, plant and equipment              | 353   | 4     | 12
Intangible assets                          | 497   | 481   | 101
Investments in associates                  | 101   | 64    | –
Other assets                               | 1,357 | 254   | 1
Provisions, incl. post-employment benefits | –102  | –     | –
Other liabilities                          | –743  | –494  | 25
Total identifiable net assets              | 1,605 | 403   | 139
Costs recognized in net income             | 153   | –     | –
Goodwill                                   | 199   | 911   | –77
Total                                      | 1,957 | 1,314 | 62
Acquisition-related costs 1)               | 85    | 24    | 49 |


| _id | d1b3b6eb4 |
| title |  |
| text | Operating income in the Transportation Solutions segment decreased $352 million in fiscal 2019 as compared to fiscal 2018. The Transportation Solutions segment’s operating income included the following:
Excluding these items, operating income decreased in fiscal 2019 primarily as a result of lower volume, unfavorable product mix, and price erosion, partially offset by lower material costs.

 |
| table | |        | Fiscal
-------------------------------------------------------------------------------------- | ------ | -------------
                                                                                | 2019   | 2018
                                                                                |        | (in millions)
Acquisition-related charges:                                                           |        |
Acquisition and integration costs                                                      | $  17  | $  8
Charges associated with the amortization of acquisition-related fair value adjustments | —      | 4
                                                                                | 17     | 12
Restructuring and other charges, net                                                   | 144    | 33
Other items                                                                            | 14     | —
Total                                                                                | $  175 | $  45 |


| _id | d1b304548 |
| title |  |
| text | BENEFIT OBLIGATION AND PLAN ASSETS FOR PENSION BENEFIT PLANS
The vested benefit obligation for a defined-benefit pension plan is the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee’s expected date of separation or retirement.
1 The projected benefit obligation was approximately 35% in the U.S. and 65% outside of the U.S. as of December 28, 2019 and December 29, 2018.

2 The fair value of plan assets was approximately 55% in the U.S. and 45% outside of the U.S. as of December 28, 2019 and December 29, 2018.
3 The accumulated other comprehensive loss (income), before tax, was approximately 35% in the U.S. and 65% outside of the U.S. as of December 28, 2019 and December 29, 2018.

Changes in actuarial gains and losses in the projected benefit obligation are generally driven by discount rate movement. We use the corridor approach to amortize actuarial gains and losses. Under this approach, net actuarial gains or losses in excess of 10% of the larger of the projected benefit obligation or the fair value of plan assets are amortized on a straight-line basis.

 |
| table | (In Millions)                                               | Dec 28, 2019 | Dec 29, 2018
----------------------------------------------------------- | ------------ | ------------
Changes in projected benefit obligation:                    |              |
Beginning projected benefit obligation                      | $3,433       | $3,842
Service cost                                                | 54           | 65
Interest cost                                               | 113          | 113
Actuarial (gain) loss                                       | 829          | (204)
Currency exchange rate changes                              | (2)          | (121)
Plan curtailments                                           | —            | (150)
Plan settlements                                            | (57)         | (74)
Other                                                       | (86)         | (38)
Ending projected benefit obligation 1                       | 4,284        | 3,433
Changes in fair value of plan assets:                       |              |
Beginning fair value of plan assets                         | 2,551        | 2,287
Actual return on plan assets                                | 193          | (38)
Employer contributions                                      | 30           | 480
Currency exchange rate changes                              | 3            | (62)
Plan settlements                                            | (57)         | (74)
Other                                                       | (66)         | (42)
Ending fair value of plan assets 2                          | 2,654        | 2,551
Net funded status                                           | $1,630       | $882
Amounts recognized in the Consolidated Balance Sheets       |              |
Other long-term assets                                      | $—           | $244
Other long-term liabilities                                 | $1,630       | $1,126
Accumulated other comprehensive loss (income), before tax 3 | $1,730       | $1,038 |


| _id | d1b3444a4 |
| title |  |
| text | Unrecognized deferred tax assets
Deferred tax assets have not been recognized in respect of the following items, given the volatile nature of the semi-conductor equipment industry. Therefore it is not probable that future taxable profit will be available to offset deductible temporary differences.

1 These credits regards R&D credits generated in the US, in the state of Arizona. However, ASMI does not recognize these credits stemming from prior years due to the fact that utilization of prior year credits is only possibly if and when the credits generated in the current year are fully utilized. Given the level of R&D activity in the US, the company does not expect it could fully utilize the credits generated in the current year and, hence, does not expect to benefit from the available credits

not expect to benefit from the available credits generated in prior years.

 |
| table | | 2019         |
-------------------------------- | ------------ | ----------
                                 | Gross amount | Tax effect
Deductible temporary differences | 20,642       | 4,842
Credits 1)                       | 15,221       | 15,221
Unrecognized deferred tax assets | 35,863       | 20,063 |


| _id | d1b3a4c0a |
| title |  |
| text | TREASURY SHARES
On December 31, 2019, we had 48,866,220 outstanding common shares excluding 2,431,174 treasury shares. This compared to 49,318,898 outstanding common shares and 6,978,496 treasury shares at year-end 2018. Besides the cancellation of 5 million treasury shares in July 2019, the change in the number of treasury shares in 2019 was the result of approximately 950,000 repurchased shares and approximately 498,000 treasury shares that were used as part of share based payments.

 |
| table | | 2018       | 2019
--------------------------------------------------------- | ---------- | ----------
As per January 1:                                         |            |
Issued shares                                             | 62,297,394 | 56,297,394
Treasury shares                                           | 6,157,241  | 6,978,496
Outstanding shares                                        | 56,140,153 | 49,318,898
Changes during the year:                                  |            |
Cancellation of treasury shares                           | 6,000,000  | 5,000,000
Share buybacks                                            | 7,242,734  | 950,902
Treasury shares used for share based performance programs | 421,479    | 498,224
As per December 31:                                       |            |
Issued shares                                             | 56,297,394 | 51,297,394
Treasury shares                                           | 6,978,496  | 2,431,174
Outstanding shares                                        | 49,318,898 | 48,866,220 |


| _id | d1b39398c |
| title |  |
| text | Our CODM evaluates each segment based on Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), and we therefore consider Adjusted EBITDA to be a primary measure of operating performance of our operating segments. We define Adjusted EBITDA as earnings before investment income, interest expense, taxes, depreciation, amortization and stock-based compensation and other adjustments as identified below. The adjustments to our financial results prepared in accordance with

our financial results prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) to calculate Adjusted EBITDA are itemized below (in thousands):

It is not practicable for us to report identifiable assets by segment because these businesses share resources, functions and facilities
We do not have significant long-lived assets outside the United States.

 |
| table | |          | Year Ended February 28, |
----------------------------------------------------------- | -------- | ----------------------- | --------
                                                            | 2019     | 2018                    | 2017
Net income (loss)                                           | $18,398  | $16,617                 | $(7,904)
Investment income                                           | (5,258)  | (2,256)                 | (1,691)
Interest expense                                            | 16,726   | 10,280                  | 9,896
Income tax provision (benefits)                             | (1,330)  | 10,681                  | (1,563)
Depreciation and amortization                               | 20,016   | 22,957                  | 23,469
Stock-based compensation                                    | 11,029   | 9,298                   | 7,833
Impairment loss and equity in net loss of affiliate         | 6,787    | 1,411                   | 1,284
Loss on extinguishment of debt                              | 2,033    | -                       | -
Acquisition and integration related expenses                | 935      | -                       | 4,513
Non-recurring legal expenses, net of reversal of litigation |          |                         |
provision                                                   | (11,020) | 10,738                  | 9,192
Gain on LoJack battery performance legal Settlement         | (18,333) | (28,333)                | -
Restructuring                                               | 8,015    | -                       | -
Other                                                       | 217      | 989                     | 4,339
Adjusted EBITDA                                             | $48,215  | $52,382                 | $49,368 |


| _id | d1b314178 |
| title |  |
| text | Pension benefit commitments
For fiscal 2019, Managing Board members were granted contributions under the BSAV totaling € 5.6 million (2018: € 5.4 million), based on a Supervisory Board decision from November 7, 2019. Of this amount, € 0.02 million (2018: € 0.03 million) relates to the funding of pension commitments earned prior to the transfer to the BSAV.

The expense recognized in fiscal 2019 as a service cost under IFRS for Managing Board members’ entitlements under the BSAV in fiscal 2019 totaled € 5.4 million (2018: € 5.3 million).
Contributions under the BSAV are added to the individual pension accounts in the January following each fiscal year. Until pension payments begin, members’ pension accounts are credited with an annual interest payment (guaranteed interest) on January 1 of each year. The interest rate is currently 0.90%.

The following table shows the individualized contributions (allocations) under the BSAV for fiscal 2019 as well as the defined benefit obligations for pension commitments:
In fiscal 2019, former members of the Managing Board and their surviving dependents received emoluments within the meaning of Section 314 para. 1 No. 6 b of the German Commercial Code totaling € 21.09 million (2018: € 39.9 million).

The defined benefit obligation (DBO) of all pension commitments to former members of the Managing Board and their surviving dependents as of September 30, 2019, amounted to €175.7 million (2018: €168.2 million). This figure is included in NOTE 17 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

1 Deferred compensation totals € 4,125,612 (2018: € 4,115,237), including € 3,703,123 for Joe Kaeser (2018: € 3,694,439), € 361,494 for Klaus Helmrich (2018: € 362,606) and € 60,995 for Prof. Dr. Ralf P. Thomas (2018: € 58,192).

2 In accordance with the provisions of the BSAV, benefits to be paid to Lisa Davis are not in any way secured or funded through the trust associated with the Company’s BSAV plan or with any other trust. They represent only an unsecured, unfunded legal obligation on the part of the Company to pay such benefits in the future under certain conditions, and the payout will only be made from the Company’s general assets.

 |
| table | |           | Total contributions for | Defined benefit obligation for all pension commitments excluding deferred compensation 1 |
--------------------------------------------------------- | --------- | ----------------------- | ---------------------------------------------------------------------------------------- | ----------
(in €)                                                    | 2019      | 2018                    | 2019                                                                                | 2018
Managing Board members in office as of September 30, 2019 |           |                         |                                                                                |
Joe Kaeser                                                | 1,234,800 | 1,210,440               | 14,299,267                                                                               | 12,970,960
Dr. Roland Busch                                          | 616,896   | 604,800                 | 6,071,233                                                                                | 5,121,226
Lisa Davis 2                                              | 616,896   | 604,800                 | 5,701,811                                                                                | 5,322,537
Klaus Helmrich                                            | 616,896   | 604,800                 | 6,473,904                                                                                | 5,714,522
Janina Kugel                                              | 616,896   | 604,800                 | 2,674,432                                                                                | 2,157,427
Cedrik Neike                                              | 616,896   | 604,800                 | 2,349,895                                                                                | 1,757,258
Michael Sen                                               | 616,896   | 604,800                 | 1,862,660                                                                                | 1,239,785
Prof. Dr. Ralf P. Thomas                                  | 616,896   | 604,800                 | 6,184,498                                                                                | 5,235,121
Total                                                     | 5,553,072 | 5,444,040               | 45,617,700                                                                               | 39,518,836 |


| _id | d1a7411b6 |
| title |  |
| text | Under the 2019 Plan, the Compensation Committee set the following non-equity incentive target amounts, non-equity incentive compensation cap percentages and relative percentages weights for each plan component for each of our NEOs in 2019 who are participating in our incentive compensation plans. Under the 2019 Plan, the Compensation Committee set the following non-equity incentive target amounts, non-equity incentive compensation cap percentages and relative percentages weights for each plan component for

percentages weights for each plan component for each of our NEOs in 2019 who are participating in our incentive compensation plans.

As noted above, Messrs Richard, Robert and Bruce Leeds no longer participate in incentive compensation. In addition, as
Mr. Reinhold left Systemax as the Chief Executive Officer in January 2019, he did not participate in the 2019 NEO Plan.

 |
| table | Name          | Target ($) | Cap (%) | Net Sales (%) | Adjusted Operating Income (%) | Strategic Objectives (%) | Corporate Governance (%) | Business Unit/Individual Objectives (%)
------------- | ---------- | ------- | ------------- | ----------------------------- | ------------------------ | ------------------------ | ---------------------------------------
Barry Litwin  | 1,113,750  | 111     | 20            | 60                            | 18                       | 4                        | 0
Thomas Clark  | 225,000    | 150     | 0             | 0                             | 0                        | 0                        | 100
Robert Dooley | 615,000    | 150     | 0             | 0                             | 0                        | 0                        | 100
Eric Lerner   | 300,900    | 150     | 0             | 0                             | 0                        | 0                        | 100
Manoj Shetty  | 241,535    | 150     | 0             | 0                             | 0                        | 0                        | 100 |


| _id | d1b3873a8 |
| title |  |
| text | 4. Inventories
Inventories consisted of the following (in thousands):
We grow and maintain flocks of layers (mature female chickens), pullets (female chickens, under 18 weeks of age), and breeders (male and female chickens used to produce fertile eggs to hatch for egg production flocks). Our total flock at June 1, 2019, consisted of approximately 9.4 million pullets and breeders and 36.2 million layers.

 |
| table | | June 1, 2019 | June 2, 2018
--------------------------------------- | ------------ | ------------
Flocks, net of accumulated amortization | $105,536     | $96,594
Eggs                                    | 14,318       | 17,313
Feed and supplies                       | 52,383       | 54,737
                                        | $172,237     | $168,644 |


| _id | d1b32c3fe |
| title |  |
| text | Revenues
Revenues for our reportable segments were as follows:
The increase in Semiconductor Test revenues of $60.2 million, or 4%, from 2018 to 2019 was driven primarily by an increase in semiconductor tester sales for 5G infrastructure and image sensors and higher service revenue, partially offset by a decrease in sales in the automotive and analog test segments.

The increase in Industrial Automation revenues of $36.6 million, or 14%, from 2018 to 2019 was primarily due to higher demand for collaborative robots. The MiR acquisition was completed in April 2018.
The increase in System Test revenues of $71.4 million, or 33%, 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 Wireless Test revenues of $25.3 million, or 19%, 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.

 |
| table | | 2019     | 2018          | 2018-2019 Dollar Change
--------------------- | -------- | ------------- | -----------------------
                      |          | (in millions) |
Semiconductor Test    | $1,552.6 | $1,492.4      | $60.2
Industrial Automation | 298.1    | 261.5         | 36.6
System Test           | 287.5    | 216.1         | 71.4
Wireless Test         | 157.3    | 132.0         | 25.3
Corporate and Other   | (0.5)    | (1.2)         | 0.7
                      | $2,295.0 | $2,100.8      | $194.2 |


| _id | d1a722c66 |
| title |  |
| text | Cost of Net Revenue and Gross Profit
Cost of net revenue decreased $26.7 million to $149.5 million for the year ended December 31, 2019, as compared to $176.2 million for the year ended December 31, 2018. The decrease was primarily driven by lower sales. The decrease in gross profit percentage for the year ended December 31, 2019, as compared to the year ended December 31, 2018, was due to lower revenue and product mix.

We currently expect that gross profit percentage will fluctuate in the future, from period-to-period, based on changes in product mix, average selling prices, and average manufacturing costs.

 |
| table | | Year Ended December 31, |                        | % Change
------------------- | ----------------------- | ---------------------- | --------
                    | 2019                    | 2018                   | 2019
                    |                         | (dollars in thousands) |
Cost of net revenue | $149,495                | $176,223               | (15)%
% of net revenue    | 47%                     | 46%                    |
Gross profit        | 167,685                 | 208,774                | (20)%
% of net revenue    | 53%                     | 54%                    | |


| _id | d1b37b562 |
| title |  |
| text | Note 2 – Business Combinations

In November 2018, we acquired SmartRG, Inc., a provider of carrier-class, open-source connected home platforms and cloud services for broadband service providers for cash consideration. This transaction was accounted for as a business combination. We have included the financial results of this acquisition in our consolidated financial statements since the date of acquisition. These revenues are included in the Subscriber Solutions & Experience category within the Network Solutions and Services & Support

the Network Solutions and Services & Support reportable segments.

Contingent liabilities with a fair value totaling $1.2 million were recognized at the acquisition date, the payments of which were dependent upon SmartRG achieving future revenue, EBIT or customer purchase order milestones during the first half of 2019. The required milestones were not achieved and therefore, we recognized a gain of $1.2 million upon the reversal of these liabilities during the second quarter of 2019.

An escrow in the amount of $2.8 million was set up at the acquisition date to fund post-closing working capital settlements and to satisfy indemnity obligations to the Company arising from any inaccuracy or breach of representations, warranties, covenants, agreements or obligations of the sellers. The escrow is subject to arbitration. In December 2019, $1.3 million of the $2.8 million was released from the escrow account pursuant to the agreement, with the final settlement of the remaining balance expected

settlement of the remaining balance expected during the fourth quarter of 2020. The remaining minimum and maximum potential release of funds to the seller ranges from no payment to $1.5 million.

We recorded goodwill of $3.5 million as a result of this acquisition, which represents the excess of the purchase price over the fair value of net assets acquired and liabilities assumed. We assessed the recognition and measurement of the assets acquired and liabilities assumed based on historical and forecasted data for future periods and concluded that our valuation procedures and resulting measures were appropriate.

On March 19, 2018, we acquired Sumitomo Electric Lightwave Corp.’s (SEL) North American EPON business and entered into a technology license and OEM supply agreement with Sumitomo Electric Industries, Ltd. (SEI). This acquisition establishes ADTRAN as the North American market leader for EPON solutions for the cable MSO industry and it will accelerate the MSO market’s adoption of our open, programmable and scalable architectures. This transaction was accounted for as a business combination. We have included

for as a business combination. We have included the financial results of this acquisition in our consolidated financial statements since the date of acquisition. These revenues are included in the Access & Aggregation and Subscriber Solutions & Experience categories within the Network Solutions reportable segment.

We recorded a bargain purchase gain of $11.3 million during the first quarter of 2018, net of income taxes, which is subject to customary working capital adjustments between the parties. The bargain purchase gain of $11.3 million represents the difference between the fair-value of the net assets acquired over the cash paid. SEI, an OEM supplier based in Japan, is the global market leader in EPON. SEI’s Broadband Networks Division, through its SEL subsidiary, operated a North American EPON business that

operated a North American EPON business that included sales, marketing, support, and region-specific engineering development. The North American EPON market is primarily driven by the Tier 1 cable MSO operators and has developed more slowly than anticipated. Through the transaction, SEI divested its North American EPON assets and established a relationship with ADTRAN. The transfer of these assets to ADTRAN, which included key customer relationships and a required assumption by ADTRAN of relatively low

a required assumption by ADTRAN of relatively low incremental expenses, along with the value of the technology license and OEM supply agreement, resulted in the bargain purchase gain. We have assessed the recognition and measurement of the assets acquired and liabilities assumed based on historical and forecasted data for future periods and we have concluded that our valuation procedures and resulting measures were appropriate. The gain is included in the line item ”Gain on bargain purchase of a business”

item ”Gain on bargain purchase of a business” in the 2018 Consolidated Statements of Income.

The final allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date for SmartRG and the final allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date for Sumitomo are as follows:
(In thousands)

 |
| table | (In thousands)                                     | Sumitomo | SmartRG
-------------------------------------------------- | -------- | -------
Assets                                             |          |
Tangible assets aquired                            | $1,006   | $8,594
Intangible assets                                  | 22,100   | 9,960
Goodwill                                           | —        | 3,476
Total assets acquired                              | 23,106   | 22,030
Liabilities                                        |          |
Liabilities Assumed                                | (3,978)  | (6,001)
Total liabilities assumed                          | (3,978)  | (6,001)
Total net assets                                   | 19,128   | 16,029
Gain on bargain purchase of a business, net of tax | (11,322) | —
Total purchase price                               | $7,806   | $16,029 |


| _id | d1b392abe |
| title |  |
| text | Stock-based Compensation Expense
The following table sets forth our stock-based compensation expense for the years ended December 31, 2019, 2018 and 2017 (in thousands):

Stock-based compensation awards include employee stock options, restricted stock awards and units, and employee stock purchases. For the year ended December 31, 2019, stock-based compensation expense was $31.6 million, of which $0.2 million related to employee stock options, $29.1 million related to restricted stock awards and units and $2.3 million related to employee stock purchases. For the year ended December 31, 2018, stock-based compensation expense was $31.0 million, of which $0.4 million related to

$31.0 million, of which $0.4 million related to employee stock options, $28.0 million related to restricted stock awards and units and $2.6 million related to employee stock purchases. The increase in stock-based compensation expense in 2019 compared to 2018 was due primarily to a higher volume of restricted stock unit grants.

 |
| table | |         | Years Ended December 31, |
--------------------------------------------- | ------- | ------------------------ | -------
                                              | 2019    | 2018                     | 2017
Research, development and other related costs | $14,643 | $13,168                  | $13,277
Selling, general and administrative           | 16,911  | 17,843                   | 20,185
Total stock-based compensation expense        | $31,554 | $31,011                  | $33,462 |


| _id | d1b2f3bda |
| title |  |
| text | Subsequent to origination, the delinquency and write-off experience is monitored as key credit quality indicators for the portfolio of device payment plan agreement receivables and fixed-term service plans. The extent of collection efforts with respect to a particular customer are based on the results of proprietary custom empirically derived internal behavioral-scoring models that analyze the customer’s past performance to predict the likelihood of the customer falling further delinquent.

These customer-scoring models assess a number of variables, including origination characteristics, customer account history and payment patterns. Based on the score derived from these models, accounts are grouped by risk category to determine the collection strategy to be applied to such accounts.

Collection performance results and the credit quality of device payment plan agreement receivables are continuously monitored based on a variety of metrics, including aging. An account is considered to be delinquent and in default status if there are unpaid charges remaining on the account on the day after the bill’s due date.
At December 31, 2019 and 2018, the balance and aging of the device payment plan agreement receivables on a gross basis was as follows:

 |
| table | | 2019     | 2018
------------------------------------------------ | -------- | --------
Unbilled                                         | $ 12,403 | $ 11,485
Billed:                                          |          |
Current                                          | 815      | 641
Past due                                         | 262      | 209
Device payment plan agreement receivables, gross | $ 13,480 | $ 12,335 |


| _id | d1b3b4c2c |
| title |  |
| text | Audit Fees consist of fees billed for the annual audit of our Company’s Consolidated Financial Statements, the statutory audit of the financial statements of the Company’s subsidiaries and consultations on complex accounting issues relating to the annual audit. Audit Fees also include services that only our independent external auditor can reasonably provide, such as comfort letters and carve-out audits in connection with strategic transactions.

Audit-related services are assurance and related fees consisting of the audit of employee benefit plans, due diligence services related to acquisitions and certain agreed-upon procedures.
Tax Fees include fees billed for tax compliance services, including the preparation of original and amended tax returns and claims for refund; tax consultations, such as assistance in connection with tax audits and expatriate tax compliance.

 |
| table | | 2019      | Percentage of Total Fees | 2018      | Percentage of Total Fees
----------------------------------------------------------------------------------------- | --------- | ------------------------ | --------- | ------------------------
Audit Fees                                                                                |           |                          |           |
Statutory Audit, Certification, Audit of Individual and Consolidated Financial Statements | 4,105,000 | 95.2%                    | 4,556,500 | 96.3%
Audit-Related Fees                                                                        | 209,005   | 4.8%                     | 173,934   | 3.7%
Non-audit Fees                                                                            |           |                          |           |
Tax Fees                                                                                | —         | —                        | —         | —
All Other Fees                                                                            | —         | —                        | —         | —
Total                                                                                | 4,314,005 | 100.0%                   | 4,730,434 | 100% |


| _id | d1b356bf4 |
| title |  |
| text | Net Debt to Adjusted EBITDA Ratio
(UNAUDITED)
($ in millions)
(1) 2017 Adjusted EBITDA shown pro forma, assuming the Level 3 acquisition and the colocation and data center sale took place on January 1, 2017.

 |
| table | | 2019    | 2018   | 2017(1)
------------------------------------------------------------------------------------ | ------- | ------ | -------
Gross Debt                                                                           | $35,039 | 36,352 | 38,053
Cash and cash equivalents                                                            | (1,690) | (488)  | (551)
Net debt                                                                             | $33,349 | 35,864 | 37,502
Adjusted EBITDA excluding integration and transformation costs and special items (1) | $9,070  | 9,040  | 8,686
Net Debt to Adjusted EBITDA Ratio                                                    | 3.7     | 4.0    | 4.3 |


| _id | d1b35c86a |
| title |  |
| text | Contract Assets and Liabilities
Contract assets represent the Company’s rights to consideration in exchange for services transferred to a customer that have not been billed as of the reporting date. While the Company’s rights to consideration are generally unconditional at the time its performance obligations are satisfied, under certain circumstances the related billing occurs in arrears, generally within one month of the services being rendered.

At the inception of a contract, the Company generally expects the period between when it transfers its services to its customers and when the customer pays for such services will be one year or less.
Contract liabilities relate to advance consideration received or the right to consideration that is unconditional from customers for which revenue is recognized when the performance obligation is satisfied and control transferred to the customer.

The table below sets forth the Company’s contract assets and contract liabilities from contracts with customers.
The increase in the contract assets balance during the period was primarily due to $203 million of revenue recognized that was not billed, in accordance with the terms of the contracts, as of December 31, 2019, offset by $193 million of contract assets included in the December 31, 2018 balance that were invoiced to Nielsen’s clients and therefore transferred to trade receivables.

The decrease in the contract liability balance during the period was primarily due to $326 million of advance consideration received or the right to consideration that is unconditional from customers for which revenue was not recognized during the period, offset by $337 million of revenue recognized during the period that had been included in the December 31, 2018 contract liability balance.

 |
| table | (IN MILLIONS)        | Year Ended December 31, |
-------------------- | ----------------------- | ----
                     | 2019                    | 2018
Contract assets      | $218                    | $210
Contract liabilities | $346                    | $359 |


| _id | d1b33a4fe |
| title |  |
| text | Our revenues and operating results are significantly affected by the timing, number and breadth of our theatrical releases and their budgets, the timing of television syndication agreements, and our amortization policy for the first 12 months of commercial exploitation for a film. The timing of releases is determined based on several factors. A significant portion of the films we distribute are delivered to Indian theaters at times when theater attendance has traditionally been highest, including school

has traditionally been highest, including school holidays, national holidays and the festivals. This timing of releases also takes into account competitor film release dates, major cricket events in India and film production schedules. Significant holidays and festivals, such as Diwali, Eid and Christmas, occur during July to December each year, and the Indian Premier League cricket season generally occurs during April and May of each year. The Tamil New Year, called Pongal, falls in January each year

Year, called Pongal, falls in January each year making the quarter ending March an important one for Tamil releases.

Our quarterly results can vary from one period to the next, and the results of one quarter are not necessarily indicative of results for the next or any future quarter. Our revenue and operating results are therefore seasonal in nature due to the impact on income of the timing of new releases as well as timing and quantum of catalogue revenues.

 |
| table | |               | Three Months Ended |                   |
-------------------------------------------------- | ------------- | ------------------ | ----------------- | --------------
                                                   | June 30, 2018 | September 30, 2018 | December 31, 2018 | March 31, 2019
                                                   |               | (in thousands)     |                   |
Revenue                                            | 60,212        | 63,425             | 76,744            | 69,745
Adjustment towards significant financing component | 6,410         | 8,837              | 9,917             | 9,303
Gross Revenue                                      | 66,622        | 72,262             | 86,661            | 79,048 |


| _id | d1b363cfa |
| title |  |
| text | Other Intangible Assets, Net

Other intangible assets include developed technologies, customer relationships, trade names, patents, user lists and the related accumulated amortization. These assets are shown as “Developed technologies, net” and as part of “Other assets” in the Consolidated Balance Sheet. The majority of Autodesk’s other intangible assets are amortized to expense over the estimated economic life of the product, which ranges from two to ten years. Amortization expense for developed technologies, customer relationships,

developed technologies, customer relationships, trade names, patents, and user lists was $33.5 million in fiscal 2019, $36.6 million in fiscal 2018 and $72.2 million in fiscal 2017.

Other intangible assets and related accumulated amortization at January 31 were as follows:
(1) Included in “Other assets” in the accompanying Consolidated Balance Sheets. (2) Includes the effects of foreign currency translation.

 |
| table | | 2019    | 2018
------------------------------------------------------------------------- | ------- | -------
Developed technologies, at cost                                           | $670.2  | $578.5
Customer relationships, trade names, patents, and user lists, at cost (1) | 533.1   | 372.5
Other intangible assets, at cost (2)                                      | 1,203.3 | 951.0
Less: accumulated amortization                                            | (922.5) | (895.8)
Other intangible assets, net                                              | $280.8  | $55.2 |


| _id | d1a7218e8 |
| title |  |
| text | Gross Profit

Gross profit in fiscal year 2019 increased to $444.8 million, or 18.7 percent of net sales from $382.3 million, or 17.7 percent of net sales for fiscal year 2018. Excluding the impact of the surcharge revenue, our gross margin in fiscal year 2019 was 22.9 percent compared to 21.3 percent in fiscal year 2018. The results reflect the impact of improved product mix coupled with capacity gains and operating cost reductions compared to the same period a year ago. Fiscal year 2019 also reflects an $11.4 million

Fiscal year 2019 also reflects an $11.4 million benefit related to an insurance recovery in our third fiscal quarter.

Our surcharge mechanism is structured to recover increases in raw material costs, although in certain cases with a lag effect as discussed above. While the surcharge generally protects the absolute gross profit dollars, it does have a dilutive effect on gross margin as a percent of sales. The following represents a summary of the dilutive impact of the surcharge on gross margin. We present and discuss these financial measures because management believes removing the impact of surcharge provides a more

removing the impact of surcharge provides a more consistent and meaningful basis for comparing results of operations from period to period. See the section “Non-GAAP Financial Measures” below for further discussion of these financial measures.

 |
| table | | Fiscal Year |
---------------------------------------- | ----------- | --------
($ in millions)                          | 2019        | 2018
Net sales                                | $2,380.2    | $2,157.7
Less: surcharge revenue                  | 438.1       | 365.4
Net sales excluding surcharge revenue    | $1,942.1    | $1,792.3
Gross profit                             | $444.8      | $382.3
Gross margin                             | 18.7%       | 17.7%
Gross margin excluding surcharge revenue | 22.9%       | 21.3% |


| _id | d1b34a598 |
| title |  |
| text | 4.4 Operating costs
Cost of revenues includes costs of wireless devices and other equipment sold, network and content costs, and payments to other carriers.
Labour costs (net of capitalized costs) include wages, salaries and related taxes and benefits, post-employment benefit plans service cost, and other labour costs, including contractor and outsourcing costs

Other operating costs include marketing, advertising and sales commission costs, bad debt expense, taxes other than income taxes, IT costs, professional service fees and rent
BCE Total BCE operating costs declined by 0.5% in 2019, compared to last year, driven by reduced costs in Bell Media of 2.5%, while costs in Bell Wireless and Bell Wireline remained relatively stable year over year. These results reflected the benefit from the adoption of IFRS 16 in 2019.

 |
| table | | 2019     | 2018     | $ CHANGE | % CHANGE
-------------------------- | -------- | -------- | -------- | --------
Bell Wireless              | (5,300)  | (5,297)  | (3)      | (0.1%)
Bell Wireline              | (6,942)  | (6,946)  | 4        | 0.1%
Bell Media                 | (2,367)  | (2,428)  | 61       | 2.5%
Inter-segment eliminations | 751      | 738      | 13       | 1.8%
Total BCE operating costs  | (13,858) | (13,933) | 75       | 0.5% |


| _id | d1b3aa4de |
| title |  |
| text | Provision for income taxes

We are a U.S.-based multinational company subject to tax in multiple U.S. and international tax jurisdictions. A substantial portion of our international earnings were generated from subsidiaries organized in Ireland and Singapore. Our results of operations would be adversely affected to the extent that our geographical mix of income becomes more weighted toward jurisdictions with higher tax rates and would be favorably affected to the extent the relative geographic mix shifts to lower tax jurisdictions.

geographic mix shifts to lower tax jurisdictions. Any change in our mix of earnings is dependent upon many factors and is therefore difficult to predict.

The increase in our effective tax rate in fiscal 2019 compared to fiscal 2018 was primarily due to one-time benefits from the 2017 Tax Act in fiscal 2018. In addition, increases in tax expense in fiscal 2019 are attributable to the valuation allowance on capital losses for which we cannot yet recognize a tax benefit.

 |
| table | | Fiscal Year |
------------------------------------------------------- | ----------- | ------
(In millions, except for percentages)                   | 2019        | 2018
Income from continuing operations before income taxes   | $108        | $437
Provision for (benefit from) income taxes               | $92         | $(690)
Effective tax rate on income from continuing operations | 85%         | (158)% |


| _id | d1b2f783e |
| title |  |
| text | Note 7 — Inventories, net
Inventories are used in the manufacture and service of Restaurant/Retail products. The components of inventory, net consist of the following:
At December 31, 2019 and 2018, the Company had recorded inventory write-downs of $9.6 million and $9.8 million , respectively, against Restaurant/Retail inventories, which relate primarily to service parts.

 |
| table | | December 31,   |
--------------- | -------------- | -------
                | (in thousands) |
                | 2019           | 2018
Finished Goods  | $8,320         | $12,472
Work in process | —              | 67
Component parts | 6,768          | 4,716
Service parts   | 4,238          | 5,482
                | $19,326        | $22,737 |


| _id | d1b326030 |
| title |  |
| text | Expected Future Pension Benefit Payments
Future benefit payments are expected to be paid as follows:

 |
| table | | United States  | Foreign
--------- | -------------- | -------
          | (in thousands) |
2020      | $8,027         | $1,237
2021      | 8,416          | 985
2022      | 9,163          | 982
2023      | 9,785          | 1,258
2024      | 10,558         | 1,098
2025-2029 | 59,665         | 6,129 |


| _id | d1b3386b8 |
| title |  |
| text | 3.6 PROFIT FOR THE YEAR
(1) Fiscal 2018 was restated to comply with IFRS 15 and to reflect a change in accounting policy as well as to reclassify results from Cogeco Peer 1 as discontinued operations. For further details, please consult the "Accounting policies" and "Discontinued operations" sections.

(2) The non-controlling interest represents a participation of 21% in Atlantic Broadband's results by Caisse de dépôt et placement du Québec ("CDPQ"), effective since the MetroCast acquisition on January 4, 2018.

Fiscal 2019 profit for the year from continuing operations and profit for the year from continuing operations attributable to owners of the Corporation decreased by 7.2% and 9.4%, respectively, as a result of: • last year's $94 million income tax reduction following the United States tax reform; and • the increase in depreciation and amortization mostly related to the impact of the MetroCast acquisition; partly offset by • higher adjusted EBITDA mainly as a result of the impact of the MetroCast

mainly as a result of the impact of the MetroCast acquisition; • the decrease in financial expense; and • the decrease in integration, restructuring and acquisition costs.

Fiscal 2019 profit for the year and profit for the year attributable to owners of the Corporation increased by 20.0% and 18.4%, respectively, mainly due to a profit for the year from discontinued operations of $75.4 million resulting from the sale of Cogeco Peer 1 in the third quarter of fiscal 2019 compared to a loss for the year from discontinued operations of $24.4 million for the prior year in addition to the elements mentioned above.

 |
| table | Years ended August 31,                                                                     | 2019    | 2018 (1) | Change
------------------------------------------------------------------------------------------ | ------- | -------- | ------
(in thousands of dollars, except percentages and earnings per share)                       | $       | $        | %
Profit for the year from continuing operations                                             | 356,908 | 384,578  | (7.2)
Profit for the year                                                                        | 432,288 | 360,197  | 20.0
Profit for the year from continuing operations attributable to owners of the Corporation   | 339,973 | 375,214  | (9.4)
Profit for the year attributable to owners of the Corporation                              | 415,353 | 350,833  | 18.4
Profit for the year from continuing operations attributable to non-controlling interest(2) | 16,935  | 9,364    | 80.9
Basic earnings per share from continuing operations                                        | 6.89    | 7.61     | (9.5)
Basic earnings per share                                                                   | 8.41    | 7.12     | 18.1 |


| _id | d1b3416dc |
| title |  |
| text | 6. Property, Plant and Equipment
Property, plant and equipment consisted of the following (in thousands):
Depreciation expense was $51.7 million, $51.1 million and $48.8 million in fiscal years 2019, 2018 and 2017, respectively.

The Company maintains insurance for both property damage and business interruption relating to catastrophic events, such as fires. Insurance recoveries received for property damage and business interruption in excess of the net book value of damaged assets, clean-up and demolition costs, and post-event costs are recognized as income in the period received or committed when all contingencies associated with the recoveries are resolved. Gains on insurance recoveries related to business interruption are

recoveries related to business interruption are recorded within “Cost of sales” and any gains or losses related to property damage are recorded within “Other income (expense).” Insurance recoveries related to business interruption are classified as operating cash flows and recoveries related to property damage are classified as investing cash flows in the statement of cash flows. Insurance claims incurred or finalized during the fiscal years ended 2019, 2018, and 2017 did not have a material affect on the

and 2017 did not have a material affect on the Company's consolidated financial statements.

 |
| table | | June 1, 2019 | June 2, 2018
------------------------------ | ------------ | ------------
Land and improvements          | $93,046      | $90,757
Buildings and improvements     | 370,451      | 360,030
Machinery and equipment        | 496,166      | 478,997
Construction-in-progress       | 52,551       | 9,307
                               | 1,012,214    | 939,091
Less: accumulated depreciation | 555,920      | 513,707
                               | $456,294     | $425,384 |


| _id | d1b2ed62c |
| title |  |
| text | 7. Accrued Expenses
Accrued expenses consist of the following (in thousands):

 |
| table | | August 31, 2019 | August 31, 2018
-------------------------------------------------- | --------------- | ---------------
Contract liabilities                               | $511,329        | $—
Deferred income                                    | —               | 691,365
Accrued compensation and employee benefits         | 600,907         | 570,400
Obligation associated with securitization programs | 475,251         | —
Other accrued expenses                             | 1,402,657       | 1,000,979
Accrued expenses                                   | $2,990,144      | $2,262,744 |


| _id | d1b3a7ae0 |
| title |  |
| text | Other income, net
The components of other income, net from continuing operations for the years ended December 31 are as follows:
In 2018, we recorded a $0.5 million adjustment to decrease the fair value of the Company's contingent consideration related to the Brink Acquisition. Also, during 2019 and 2018, the Company incurred a net loss on rental contracts of approximately $1.0 million and $0.9 million, respectively.

 |
| table | | Year ended December 31 (in thousands) |
---------------------------------------------- | ------------------------------------- | ------
                                               | 2019                                  | 2018
Foreign currency loss                          | $(83)                                 | $(258)
Rental loss-net                                | (996)                                 | (865)
Gain on sale of real estate                    | —                                     | 649
Fair value adjustment contingent consideration | —                                     | 450
Other                                          | (424)                                 | 330
Other income, net                              | $(1,503)                              | $306 |


| _id | d1b3b0ad2 |
| title |  |
| text | Net sales by segment and industry end market(1) were as follows:
(1) Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.

 |
| table | |          | Fiscal        |
-------------------------------- | -------- | ------------- | --------
                                 | 2019     | 2018          | 2017
                                 |          | (in millions) |
Transportation Solutions:        |          |               |
Automotive                       | $ 5,686  | $ 6,092       | $  5,228
Commercial transportation        | 1,221    | 1,280         | 997
Sensors                          | 914      | 918           | 814
Total Transportation Solutions   | 7,821    | 8,290         | 7,039
Industrial Solutions:            |          |               |
Industrial equipment             | 1,949    | 1,987         | 1,747
Aerospace, defense, oil, and gas | 1,306    | 1,157         | 1,075
Energy                           | 699      | 712           | 685
Total Industrial Solutions       | 3,954    | 3,856         | 3,507
Communications Solutions:        |          |               |
Data and devices                 | 993      | 1,068         | 963
Appliances                       | 680      | 774           | 676
Total Communications Solutions   | 1,673    | 1,842         | 1,639
Total                            | $ 13,448 | $ 13,988      | $ 12,185 |


| _id | d1b387c0e |
| title |  |
| text | 14. Segment Information
The Company operates under two reportable segments based on the geographic locations of its subsidiaries:
(1)  FEI-NY – operates out of New York and its operations consist principally of precision time and frequency control products used in three principal markets- communication satellites (both commercial and U.S. Government-funded); terrestrial cellular telephone or other ground-based telecommunication stations; and other components and systems for the U.S. military.

The FEI-NY segment also includes the operations of the Company’s wholly-owned subsidiaries, FEI-Elcom and FEI-Asia. FEI- Asia functions as a manufacturing facility for the FEI-NY segment with historically minimal sales to outside customers. FEI- Elcom, in addition to its own product line, provides design and technical support for the FEI-NY segment’s satellite business.

(2)  FEI-Zyfer – operates out of California and its products incorporate Global Positioning System (GPS) technologies into systems and subsystems for secure communications, both government and commercial, and other locator applications. This segment also provides sales and support for the Company’s wireline telecommunications family of products, including US5G, which are sold in the U. S. market.

The Company measures segment performance based on total revenues and profits generated by each geographic location rather than on the specific types of customers or end-users. Consequently, the Company determined that the segments indicated above most appropriately reflect the way the Company’s management views the business.

The accounting policies of the two segments are the same as those described in the “Summary of Significant Accounting Policies.” The Company evaluates the performance of its segments and allocates resources to them based on operating profit which is defined as income before investment income, interest expense and taxes. All acquired assets, including intangible assets, are included in the assets of both reporting segments.

The table below presents information about reported segments for each of the years ended April 30, 2019 and 2018, respectively, with reconciliation of segment amounts to consolidated amounts as reported in the statement of operations or the balance sheet for each of the years (in thousands):

 |
| table | | 2019      | 2018
-------------------------------------------------- | --------- | ----------
Net revenues:                                      |           |
FEI-NY                                             | $38,096   | $26,936
FEI-Zyfer                                          | 12,235    | 15,272
Less intersegment revenues                         | (822 )    | (2,801)
Consolidated revenues                              | $49,509   | $ 39,407
Operating loss:                                    |           |
FEI-NY                                             | $(4,429 ) | $ (15,097)
FEI-Zyfer                                          | 1,730     | 3,164
Corporate                                          | (118 )    | (462)
Consolidated operating loss                        | $(2,817 ) | $ (12,395)
                                                   | 2019      | 2018
Identifiable assets:                               |           |
FEI-NY (approximately $1.5 in China in 2019)       | $54,295   | $ 55,181
FEI-Zyfer                                          | 10,478    | 8,168
less intersegment receivables                      | (8,346 )  | (11,888)
Corporate                                          | 30,344    | 32,123
Consolidated identifiable assets                   | $86,771   | $ 83,584
Depreciation and amortization (allocated):         |           |
FEI-NY                                             | $2,695    | $ 2,355
FEI-Zyfer                                          | 92        | 114
Corporate                                          | 15        | 15
Consolidated depreciation and amortization expense | $2,802    | $ 2,484 |


| _id | d1b3a1c8a |
| title |  |
| text | (3) Accounts Receivable, Net
Accounts receivable, net, is as follows (in thousands):
Bad debt expense for the years ended December 31, 2019, 2018 and 2017 was $0.7 million, $0.1 million and $0.6 million, respectively.

 |
| table | | As of December 31, |
------------------------------- | ------------------ | -------
                                | 2019               | 2018
Accounts receivable             | $69,767            | $41,818
Allowance for doubtful accounts | (1,125)            | (711)
Net accounts receivable         | $68,642            | $41,107 |


| _id | d1b315bcc |
| title |  |
| text | Statement of financial position
Net assets have decreased to $157,164,000 at 30 June 2019 from $163,937,000 at 30 June 2018.
Current assets have decreased from 30 June 2018 by 18% to $75,460,000. This is driven by a reduction in cash assets, a result of continued investment in technology and further investment in iMoney. The current component of the trail commission asset is $25,626,000, which increased by 16% since 30 June 2018.

Non-current assets have increased from 30 June 2018 by 2% to $150,607,000 which is largely due to higher non-current trail commission asset partially offset by capital asset writeoffs and Home Loans Goodwill impairment. The non-current component of the trail commission asset is $88,452,000 which increased by 9% since 30 June 2018, mainly due to sales volume and partner mix.

Current liabilities decreased from 30 June 2018 to 30 June 2019 by 20% to $34,555,000 primarily due to payments to suppliers in addition to trade related payable balances post 30 June 2018.
Non-current liabilities have increased by 9% ending on $34,348,000. This relates to an increase in lease liabilities and deferred tax liabilities.

 |
| table | FINANCIAL PERFORMANCE SUMMARY | 2019  $’000 | 2018  $’000 RESTATED | CHANGE
----------------------------- | ----------- | -------------------- | ------
Current assets                | 75,460      | 91,457               | (18%)
Non-current assets            | 150,607     | 147,234              | 2%
Total assets                  | 226,067     | 238,691              | (5%)
Current liabilities           | 34,555      | 43,336               | (20%)
Non-current liabilities       | 34,348      | 31,418               | 9%
Total liabilities             | 68,903      | 74,754               | (8%)
Net assets                    | 157,164     | 163,937              | (4%)
Equity                        | 157,164     | 163,937              | (4%) |


| _id | d1a73b248 |
| title |  |
| text | Research and Development Expense

Research and development expense increased by $8.7 million in 2019 compared to 2018. The increase was primarily due to a $5.4 million increase in employee-related costs, which includes stock-based compensation, associated with our increased headcount from 229 employees as of December 31, 2018 to 252 employees as of December 31, 2019, a $1.3 million increase in hosting and software related cost to support research and development activities and an increase of $0.4 million in office related expenses to

of $0.4 million in office related expenses to support research and development activities. In addition, a total of $6.5 million of internally-developed software costs during 2019 and $7.7 million of internally-developed software costs during 2018 were capitalized, resulting in an increase of the expense by $1.2 million compared to 2018.

 |
| table | | Year Ended December 31, |                        | Change  |
------------------------ | ----------------------- | ---------------------- | ------- | -----
                         | 2019                    | 2018                   | $       | %
                         |                         | (dollars in thousands) |         |
Research and development | $ 50,024                | $ 41,305               | $ 8,719 | 21.1%
% of revenue             | 25%                     | 28%                    |         | |


| _id | d1b37b828 |
| title |  |
| text | The following table presents the approximate amount of federal, foreign and state operating loss carryforwards and federal tax credit carryforwards available to
reduce future taxable income, along with the respective range of years that the operating loss and tax credit carryforwards would expired if not utilized:
At March 31, 2019, certain of our U.S. and foreign subsidiaries in Brazil, France, Germany, Israel, Japan, Mexico and Korea had tax operating loss and tax credit carry

forwards totaling approximately $263,836. There is a greater likelihood of not realizing the future tax benefits of these net operating losses and other deductible
temporary differences in Brazil, Israel, China, and Korea since these losses and other deductible temporary differences must be used to offset future taxable income of
those subsidiaries, which cannot be assured, and are not available to offset taxable income of other subsidiaries located in those countries. Accordingly, we have

recorded valuation allowances related to the net deferred tax assets in these jurisdictions. Valuation allowances decreased $(12,101), and increased $317 and $6,812
during the years ended March 31, 2017, 2018, and 2019, respectively, as a result of changes in the net operating losses of the subsidiaries or as a result of changes in
foreign currency exchange rates in the countries mentioned above

The decrease in valuation allowance during the year ended March 31, 2017 was also due to the reversal of valuation allowances of $5,530 related to the future
utilization of NOLs totaling $15,878 at a Japanese subsidiary. The related tax benefits upon utilization of the Japanese NOLs expire eight years after they are generated,
and they are not subject to annual utilization limitations. The realization of tax benefits due to the utilization of these NOLs could take an extended period of time to

realize and are dependent upon the Japanese subsidiary’s continuing profitability, and some could expire prior to utilization. The increase in valuation allowance during
the year ended March 31, 2019, was due to the addition of valuation allowances of $3,124 related to the Ethertronics acquisition and $1,763 related to capital and section
1231 losses at AVX Corporation.

The decrease in valuation allowance during the year ended March 31, 2017 was also due to the reversal of valuation allowances of $5,530 related to the future utilization of NOLs totaling $15,878 at a Japanese subsidiary. The related tax benefits upon utilization of the Japanese NOLs expire eight years after they are generated, and they are not subject to annual utilization limitations. The realization of tax benefits due to the utilization of these NOLs could take an extended period of time to realize and

take an extended period of time to realize and are dependent upon the Japanese subsidiary’s continuing profitability, and some could expire prior to utilization. The increase in valuation allowance during the year ended March 31, 2019, was due to the addition of valuation allowances of $3,124 related to the Ethertronics acquisition and $1,763 related to capital and section 1231 losses at AVX Corporation.

Income taxes paid totaled $55,642, $66,354 and $75,640 during the years ended March 31, 2017, 2018 and 2019, respectively

 |
| table | | March 31, 2019 | Beginning expiration year | Ending expiration year
------------------------------------ | -------------- | ------------------------- | ----------------------
Federal operating loss carryforwards | $14,440        | 2026                      | 2036
Federal operating loss carryforwards | 11,895         | No Exp                    | No Exp
Foreign operating loss carryforwards | 178,784        | No Exp                    | No Exp
Foreign operating loss carryforwards | 25,792         | 2020                      | 2039
State operating loss carryforwards   | 3,279          | 2022                      | 2039
Federal tax credit carryforwards     | 17,373         | 2039                      | 2039
Foreign tax credit carryforward      | 4,187          | 2023                      | 2029
State tax credit carryforward        | 8,086          | 2020                      | 2029 |


| _id | d1b316e00 |
| title |  |
| text | Note 13: Supplemental Balance Sheets and Statements of Operations Detail
(1) Fiscal year ended March 31, 2018 adjusted due to the adoption of ASC 606.

 |
| table | | March 31, |
------------------------------------------ | --------- | --------
(amounts in thousands)                     | 2019      | 2018
Accounts receivable:                       |           |
Trade                                      | $176,715  | $166,459
Allowance for doubtful accounts reserve    | (1,206)   | (1,210)
Ship-from-stock and debit (“SFSD”) reserve | (18,862)  | (17,362)
Returns reserves (1)                       | (964)     | (131)
Rebates reserves                           | (967)     | (446)
Price protection reserves                  | (657)     | (420)
Other                                      | —         | (329)
Accounts receivable, net (1)               | $154,059  | $146,561 |


| _id | d1b381278 |
| title |  |
| text | Capital reserve and reserves retained from earnings

Prior to the effective date of the reclassification and demerger of CECONOMY AG on 12 July 2017, METRO AG was not yet a group within the meaning of IFRS 10. Accordingly, combined financial statements of METRO Wholesale & Food Specialist GROUP (hereinafter: MWFS GROUP) were prepared for the IPO prospectus of METRO AG. Equity in the combined financial statements was the residual amount from the combined assets and liabilities of MWFS GROUP. Following the demerger, METRO became an independent group with METRO

METRO became an independent group with METRO AG as the listed parent company. Therefore, the equity in the consolidated financial statements is subdivided according to legal requirements. The subscribed capital of €363 million and the capital reserve of €6,118 million were recognised at the carrying amounts from the METRO AG Annual Financial Statements as of 30 September 2017. For this purpose, a transfer was made from the equity item net assets, recognised as of 1 October 2016, attributable to the former

as of 1 October 2016, attributable to the former METRO GROUP of the combined financial statements of MWFS GROUP. The remaining negative amount of this equity item was reclassified to reserves retained from earnings. It cannot be traced back to a history of loss.

Reserves retained from earnings can be broken down as follows:
1 Previous year: gains/losses on remeasuring financial instruments in the category ‘available for sale’.
2 Adjustment of previous year according to explanation in notes.

 |
| table | € million                                                                                | 30/9/2018 | 30/9/2019
------------------------------------------------------------------------------------------------ | --------- | ---------
Effective portion of gains/losses from cash flow hedges                                          | 0         | 2
Equity and debt instruments1                                                                     | 9         | −3
Currency translation differences from translating the financial statements of foreign operations | −738      | −602
Remeasurement of defined benefit pension plans                                                   | −410      | −500
Income tax on components of other comprehensive income                                           | 91        | 106
Other reserves retained from earnings                                                            | −2,401 2  | −2,782
                                                                                | −3,449    | −3,778 |


| _id | d1a73ec0e |
| title |  |
| text | Note 13. Investments Held in Rabbi Trust
The mutual funds held in the rabbi trust were 66% equity-based and 34% debt-based as of December 31, 2019. Net investment income (losses), included in “Other income (expense), net” in the accompanying Consolidated Statements of Operations consisted of the following (in thousands):

 |
| table | |        | Years Ended December 31, |
------------------------------------------------------------ | ------ | ------------------------ | ------
                                                             | 2019   | 2018                     | 2017
Net realized gains (losses) from sales of trading securities | $143   | $10                      | $195
Dividend and interest income                                 | 419    | 635                      | 422
Net unrealized holding gains (losses)                        | 1,817  | (1,512)                  | 1,002
                                                             | $2,379 | $(867)                   | $1,619 |


| _id | d1b3aa344 |
| title |  |
| text | Fees Paid to the Independent Registered Public Accounting Firm
The following table presents fees for professional audit services and other services rendered to our company by KPMG for our fiscal years ended December 31, 2017 and 2018.

(1) Audit Fees consist of professional services rendered in connection with the audit of our annual consolidated financial statements, including audited financial statements presented in our Annual Report on Form 10-K for the fiscal years ended December 31, 2017 and 2018 and services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings or engagements for those fiscal years.

(2) Audit-Related Fees consist of fees for professional services for assurance and related
services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services could include accounting consultations concerning financial accounting and reporting standards, due diligence procedures in connection with acquisition and procedures related to other attestation services.

(3) Tax Fees consist of fees for professional services for tax compliance, tax advice and tax planning. These services include consultation on tax matters and assistance regarding federal, state and international tax compliance.
(4) All Other Fees consist of license fees for the use of accounting research software.

 |
| table | | 2017           | 2018
---------------------- | -------------- | --------------
                       | (In Thousands) | (In Thousands)
Audit Fees (1)         | $3,747         | $4,476
Audit-Related Fees (2) | —              | —
Tax Fees (3)           | —              | —
All Other Fees (4)     | $3             | $3
Total Fees             | $3,750         | $4,479 |


| _id | d1b31fef6 |
| title |  |
| text | Note 8 – Property, Plant and Equipment
As of December 31, 2019 and 2018, property, plant and equipment was comprised of the following:
Depreciation expense was $12.5 million, $12.7 million and $12.8 million for the years ended December 31, 2019, 2018 and 2017, respectively, which is recorded in cost of sales, selling, general and administrative expense and research and development expense in the consolidated statements of income.

We assess long-lived assets used in operations for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the undiscounted cash flows estimated to be generated by the asset are less than the asset’s carrying value. During the year ended December 31, 2019, the Company recognized impairment charges of $3.9 million related to the abandonment of certain information technology projects in which we had previously capitalized

projects in which we had previously capitalized expenses related to these projects. The impairment charges were determined based on actual costs incurred as part of the projects. No impairment charges were recognized during the years ended December 31, 2018 and 2017.

 |
| table | (In thousands)                           | 2019      | 2018
---------------------------------------- | --------- | ---------
Land                                     | $4,575    | $4,575
Building and land improvements           | 34,797    | 34,379
Building                                 | 68,157    | 68,183
Furniture and fixtures                   | 19,959    | 19,831
Computer hardware and software           | 74,399    | 92,071
Engineering and other equipment          | 130,430   | 127,060
Total Property, Plant and Equipment      | 332,317   | 346,099
Less accumulated depreciation            | (258,609) | (265,464)
Total Property, Plant and Equipment, net | $73,708   | $80,635 |


| _id | d1b3993d2 |
| title |  |
| text | AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
Accounts Receivable and Deferred Rent Asset—The Company derives the largest portion of its revenues and corresponding accounts receivable and the related deferred rent asset from a relatively small number of tenants in the telecommunications industry, and 54% of its current-year revenues are derived from four tenants.

The Company’s deferred rent asset is associated with non-cancellable tenant leases that contain fixed escalation clauses over the terms of the applicable lease in which revenue is recognized on a straight-line basis over the lease term.

The Company mitigates its concentrations of credit risk with respect to notes and trade receivables and the related deferred rent assets by actively monitoring the creditworthiness of its borrowers and tenants. In recognizing tenant revenue, the Company assesses the collectibility of both the amounts billed and the portion recognized in advance of billing on a straight-line basis. This assessment takes tenant credit risk and business and industry conditions into consideration to ultimately determine the

into consideration to ultimately determine the collectibility of the amounts billed. To the extent the amounts, based on management’s estimates, may not be collectible, revenue recognition is deferred until such point as collectibility is determined to be reasonably assured. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectible are charged to bad debt expense included in Selling, general, administrative and development expense in the accompanying

and development expense in the accompanying consolidated statements of operations.

Accounts receivable is reported net of allowances for doubtful accounts related to estimated losses resulting from a tenant’s inability to make required payments and allowances for amounts invoiced whose collectibility is not reasonably assured. These allowances are generally estimated based on payment patterns, days past due and collection history, and incorporate changes in economic conditions that may not be reflected in historical trends, such as tenants in bankruptcy, liquidation or reorganization.

in bankruptcy, liquidation or reorganization. Receivables are written-off against the allowances when they are determined to be uncollectible. Such determination includes analysis and consideration of the particular conditions of the account. Changes in the allowances were as follows:

(1) In 2019, write-offs are primarily related to uncollectible amounts in India. In 2018 and 2017, recoveries include recognition of revenue resulting from collections of previously reserved amounts.

 |
| table | |         | Year Ended December 31, |
------------------------------------ | ------- | ----------------------- | ------
                                     | 2019    | 2018                    | 2017
Balance as of January 1,             | $282.4  | $131.0                  | $45.9
Current year increases               | 104.3   | 157.8                   | 87.2
Write-offs, recoveries and other (1) | (223.4) | (6.4)                   | (2.1)
Balance as of December 31,           | $163.3  | $282.4                  | $131.0 |


| _id | d1b376fda |
| title |  |
| text | CREDIT RISK
In many instances, trade receivables are written off directly to bad debt expense if the account has not been collected after a predetermined period of time.
The following table provides further details on trade receivables, net of allowance for doubtful accounts.

 |
| table | AT DECEMBER 31                                                     | 2019  | 2018
------------------------------------------------------------------ | ----- | -----
Trade receivables not past due                                     | 2,082 | 2,091
Trade receivables past due, net of allowance for doubtful accounts |       |
Under 60 days                                                      | 541   | 508
60 to 120 days                                                     | 232   | 304
Over 120 days                                                      | 64    | 72
Trade receivables, net of allowance for doubtful accounts          | 2,919 | 2,975 |


| _id | d1b37dcae |
| title |  |
| text | Annual Recurring Revenue

Beginning with the fourth quarter of 2018, we began monitoring a new operating metric, total annual recurring revenue (“Total ARR”), which is defined as the annualized value of all recurring revenue contracts active at the end of a reporting period. Total ARR includes the annualized value of subscriptions (“Subscription ARR”) and the annualized value of software support contracts related to perpetual licenses (“Perpetual license support ARR”) active at the end of a reporting period and does not include

end of a reporting period and does not include revenue reported as perpetual license or professional services in our consolidated statement of operations. We are monitoring these metrics because they align with how our customers are increasingly purchasing our solutions and how we are managing our business. These ARR measures should be viewed independently of revenue, unearned revenue, and customer arrangements with termination rights as ARR is an operating metric and is not intended to be combined with or

metric and is not intended to be combined with or replace those items. ARR is not an indicator of future revenue and can be impacted by contract start and end dates and renewal rates.

ARR metrics as of December 31, 2019 and 2018 were as follows (unaudited):

 |
| table | | December 31, |
--------------------------------------------- | ------------ | ------
(in millions, except percentages)             | 2019         | 2018
Total ARR                                     | $179.5       | $162.6
Year-over-year percentage increase            | 10%          | 20%
Subscription ARR                              | $113.9       | $95.9
Year-over-year percentage increase            | 19%          | 32%
Perpetual license support ARR                 | $65.6        | $66.7
Year-over-year percentage increase (decrease) | (2)%         | 6% |