| _id | d1b35f4b6 |
| title |  |
| text | Note 13. INCOME TAXES

In the year ended December 29, 2019, our income tax provision of $26.6 million on a profit before income taxes and equity in earnings (losses) of unconsolidated investees of $26.0 million was primarily due to tax expense in foreign jurisdictions that were profitable. In the year ended December 30, 2018, our income tax provision of $1.0 million on a loss before income taxes and equity in earnings of unconsolidated investees of $898.7 million was primarily due to tax expense in foreign jurisdictions that

due to tax expense in foreign jurisdictions that were profitable, offset by tax benefit related to release of valuation allowance in a foreign jurisdiction, and by a release of tax reserves due to lapse of statutes of limitation.

The geographic distribution of income (loss) from continuing operations before income taxes and equity earnings (losses) of unconsolidated investees and the components of provision for income taxes are summarized below:

 |
| table | |                   | Fiscal Year       |
------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | ----------------- | -----------------
(In thousands)                                                                                | December 29, 2019 | December 30, 2018 | December 31, 2017
Geographic distribution of income (loss) from continuing operations before income taxes and equity in earnings of unconsolidated investees: |                   |                   |
U.S. loss                                                                                | $(84,071)         | $(778,316)        | $(1,242,000)
Non-U.S. income (loss)                                                                                | 110,040           | (120,355)         | 41,250
Income (loss) before income taxes and equity in earnings (loss) of unconsolidated investees                                                 | $25,969           | $(898,671)        | $(1,200,750)
Provision for income taxes:                                                                                |                   |                   |
Current tax (expense) benefit                                                                                |                   |                   |
Federal                                                                                | $(328)            | $(1,155)          | $6,816
State                                                                                | (370)             | (553)             | 6,575
Foreign                                                                                | (24,588)          | (4,100)           | (12,074)
Total current tax (expense) benefit                                                                                | (25,286)          | (5,808)           | 1,317
Deferred tax (expense) benefit                                                                                |                   |                   |
Federal                                                                                | (100)             | —                 | —
State                                                                                | —                 | —                 | 1,450
Foreign                                                                                | (1,245)           | 4,798             | 1,177
Total deferred tax (expense) benefit                                                                                | (1,345)           | 4,798             | 2,627
(Provision for) benefit from income taxes                                                                                | (26,631)          | $(1,010)          | $3,944 |


| _id | d1b34f6b0 |
| title |  |
| text | Foreign Currency Risk

The Group is exposed to translation and transaction foreign exchange risk. Several other currencies in addition to the reporting currency of US dollar are used, including sterling and the euro. The Group experiences currency exchange differences arising upon retranslation of monetary items (primarily short-term inter-Company balances and long-term borrowings), which are recognised as an expense in the period the difference occurs. The Group endeavours to match cash inflows and outflows in the various

to match cash inflows and outflows in the various currencies; the Group typically invoices its customers in their local currency and pays its local expenses in local currency, as a means to mitigate this risk.

The Group is also exposed to exchange differences arising from the translation of its subsidiaries’ Financial Statements into the Group’s reporting currency of US dollar, with the corresponding exchange differences taken directly to equity.
The following table illustrates the movement that ten per cent in the value of sterling or the euro against the US dollar would have had on the Group’s profit or loss for the period and on the Group’s equity as at the end of the period.

Any foreign exchange variance would be recognised as unrealised foreign exchange in the Consolidated Statement of Profit or Loss and have no impact on cash flows.

 |
| table | | Year-ended 31 March 2019 | Year-ended 31 March 2018
------------------------------------------- | ------------------------ | ------------------------
                                            | $M                       | $M
10% movement in sterling to US dollar value |                          |
Profit or loss                              | 1.7                      | 5.1
Equity                                      | 33.8                     | 37.4
10% movement in euro to US dollar value     |                          |
Profit or loss                              | 1.5                      | 7.5
Equity                                      | (9.8)                    | (10.8) |


| _id | d1b33486a |
| title |  |
| text | 15. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

During the quarter ended December 31, 2019, we purchased a group annuity contract to transfer the pension benefit obligations and annuity administration for a select group of retirees or their beneficiaries to an annuity provider. As a result of the transfer of the pension liability to the annuity provider and other lump sum payments to participants of the Pension Plans, we recognized a non-cash pension settlement charge of $6.7 million during the quarter ended December 31, 2019.

In 2019, we recognized a gain on extinguishment of debt from the partial repurchase of our Senior Notes of $0.3 million, $1.1 million and $3.1 million during the quarters ended June 30, 2019, September 30, 2019, and December 31, 2019, respectively.
As part of our integration efforts of FairPoint and continued cost saving initiatives, we incurred severance costs of $8.7 million during the quarter ended December 31, 2019.

 |
| table | |           | Quarter Ended                            |               |
----------------------------------------------------- | --------- | ---------------------------------------- | ------------- | ------------
2019                                                  | March 31, | June 30,                                 | September 30, | December 31,
                                                      |           | (In thousands, except per share amounts) |               |
Net revenues                                          | $338,649  | $333,532                                 | $333,326      | $331,035
Operating income                                      | $16,720   | $14,300                                  | $23,542       | $26,719
Net income (loss) attributable to common stockholders | $(7,265)  | $(7,387)                                 | $257          | $(5,988)
Basic and diluted earnings (loss) per share           | $(0.11)   | $(0.10)                                  | $—            | $(0.08) |


| _id | d1b340804 |
| title |  |
| text | 4. SEGMENT INFORMATION
During the 2019 and 2018 financial years, the Group operated wholly within one business segment being the operation and management of storage centres in Australia and New Zealand.

The Managing Director is the Group’s chief operating decision maker and monitors the operating results on a portfolio wide basis. Monthly management reports are evaluated based upon the overall performance of NSR consistent with the presentation within the consolidated financial statements. The Group’s financing (including finance costs and finance income) are managed on a Group basis and not allocated to operating segments.

The operating results presented in the statement of profit or loss represent the same segment information as reported in internal management information.
The revenue information above excludes interest income and is based on the location of storage centres.

 |
| table | | 2019    | 2018
------------------------------- | ------- | -------
                                | $'000   | $'000
Revenue from external customers |         |
Australia                       | 144,621 | 129,431
New Zealand                     | 13,036  | 8,912
Total                           | 157,657 | 138,343 |


| _id | d1b38522e |
| title |  |
| text | Discussion of the Results of Operations for the years ended December 31, 2019, 2018, and 2017
Revenues
Subscription Solutions

Revenues
Subscription Solutions
Subscription solutions revenues increased $177.2 million, or 38.1%, for the year ended December 31, 2019 compared to the same period in 2018. Subscription solutions revenues increased $155.0 million, or 50.0%, for the year ended December 31, 2018 compared to the same period in 2017. The increase in both periods was primarily a result of growth in MRR driven by the higher number of merchants using our platform.
Merchant Solutions

Merchant solutions revenues increased $327.7 million, or 53.9%, for the year ended December 31, 2019 compared to the same period in 2018. The increase in merchant solutions revenues was primarily a result of Shopify Payments revenue growing by $239.6 million, or 53.3%, in 2019 compared to the same period in 2018. This increase was a result of an increase in the number of merchants using our platform, continued expansion into new geographical regions, and an increase in adoption of Shopify Payments by our

increase in adoption of Shopify Payments by our merchants, which drove $9.1 billion of additional GMV facilitated using Shopify Payments in 2019 compared to the same period in 2018. For the year ended December 31, 2019, the Shopify Payments penetration rate was 42.1%, resulting in GMV of $25.7 billion that was facilitated using Shopify Payments. This compares to a penetration rate of 40.4%, resulting in GMV of $16.6 billion that was facilitated using Shopify Payments in the same period in 2018. As at

Payments in the same period in 2018. As at December 31, 2019 Shopify Payments adoption among our merchants was as follows: United States, 91%; Canada, 90%; Australia, 89%; United Kingdom, 88%; Ireland, 84%; New Zealand, 76%; and other countries where Shopify Payments is available, 70%. Merchant solutions revenues increased $327.7 million, or 53.9%, for the year ended December 31, 2019 compared to the same period in 2018. The increase in merchant solutions revenues was primarily a result of Shopify Payments

was primarily a result of Shopify Payments revenue growing by $239.6 million, or 53.3%, in 2019 compared to the same period in 2018. This increase was a result of an increase in the number of merchants using our platform, continued expansion into new geographical regions, and an increase in adoption of Shopify Payments by our merchants, which drove $9.1 billion of additional GMV facilitated using Shopify Payments in 2019 compared to the same period in 2018. For the year ended December 31, 2019, the Shopify

For the year ended December 31, 2019, the Shopify Payments penetration rate was 42.1%, resulting in GMV of $25.7 billion that was facilitated using Shopify Payments. This compares to a penetration rate of 40.4%, resulting in GMV of $16.6 billion that was facilitated using Shopify Payments in the same period in 2018. As at December 31, 2019 Shopify Payments adoption among our merchants was as follows: United States, 91%; Canada, 90%; Australia, 89%; United Kingdom, 88%; Ireland, 84%; New Zealand, 76%; and

Kingdom, 88%; Ireland, 84%; New Zealand, 76%; and other countries where Shopify Payments is available, 70%.

In addition to the increase in revenue from Shopify Payments, revenue from transaction fees, referral fees from partners, Shopify Capital, and Shopify Shipping increased during the year ended December 31, 2019 compared to the same period in 2018, as a result of the increase in GMV facilitated through our platform.

Merchant solutions revenues increased $245.0 million, or 67.4%, for the year ended December 31, 2018 compared to the same period in 2017. The increase in merchant solutions revenues was primarily a result of Shopify Payments revenue growing by $176.0 million, or 64.4%. Additionally, revenue from transaction fees, referral fees from partners, Shopify Capital, and Shopify Shipping increased for the year ended December 31, 2018 compared to the same period in 2017.

 |
| table | | Years ended December 31,           |            |          | 2019 vs 2018 | 2018 vs 2017
----------------------- | ---------------------------------- | ---------- | -------- | ------------ | ------------
                        | 2019                               | 2018       | 2017     | % Change     | % Change
                        | (in thousands, except percentages) |            |          |              |
Revenues:               |                                    |            |          |              |
Subscription solutions  | $642,241                           | $464,996   | $310,031 | 38.1%        | 50.0%
Merchant solutions      | 935,932                            | 608,233    | 363,273  | 53.9%        | 67.4%
                        | $1,578,173                         | $1,073,229 | $673,304 | 47.0%        | 59.4%
Percentage of revenues: |                                    |            |          |              |
Subscription solutions  | 40.7%                              | 43.3%      | 46.0%    |              |
Merchant solutions      | 59.3 %                             | 56.7 %     | 54.0 %   |              |
Total revenues          | 100.0 %                            | 100.0 %    | 100.0 %  |              | |


| _id | d1b35752c |
| title |  |
| text | GAINS (LOSSES) ON EQUITY INVESTMENTS AND INTEREST AND OTHER, NET
GAINS (LOSSES) ON EQUITY INVESTMENTS, NET
Ongoing mark-to-market net gains and losses reported in 2019 and 2018 were primarily driven by ASML Holding N.V. (ASML) and Cloudera Inc. (Cloudera). During 2019 we sold our equity investment in ASML.
In 2019, we recognized $293 million in observable price adjustments primarily from one investment.

During 2018, we recognized an impairment charge of $290 million in our equity method investment in IMFT. During 2017, we recognized impairment charges in our investments of Cloudera for $278 million and Unisoc for $308 million.

Major drivers of sales of equity investments and other in 2019 were dividends of $632 million from McAfee and a gain of $107 million from our sale of our non-controlling interest in IMFT. In 2017, we recognized $3.4 billion in realized gains on sales of a portion of our interest in ASML.
INTEREST AND OTHER, NET
We recognized a higher net gain in interest and other in 2019 compared to 2018, primarily due to lower loss on debt conversions and larger divestiture gains in 2019 compared to 2018.

We recognized a net gain in interest and other in 2018 compared to a net loss in 2017, primarily due to lower losses on debt conversions, higher assets under construction resulting in more capitalized interest, and larger divestiture gains in 2018 compared to 2017.

 |
| table | Years Ended                                                        | Dec 28, | Dec 29, | Dec 30,
------------------------------------------------------------------ | ------- | ------- | -------
(In Millions)                                                      | 2019    | 2018    | 2017
Ongoing mark-to market adjustments on marketable equity securities | $277    | $(129)  | $ —
Observable price adjustments on non-marketable equity securities   | 293     | 202     | —
Impairment charges                                                 | (122)   | (424)   | (833)
Sale of equity investments and other                               | 1,091   | 226     | 3,484
Gains (losses) one equity investments, net                         | $1,539  | $(125)  | $2,651
Interest and other, net                                            | $484    | $126    | $(349) |


| _id | d1b359ce6 |
| title |  |
| text | Cash and cash equivalents decreased by $78.9 million during the year ended March 31, 2019, as compared to an increase of $177.1 million during the year ended March 31, 2018 and an increase of $44.8 million during the year ended March 31, 2017 as follows (amounts in thousands):
(1) Fiscal years ended March 31, 2018 and 2017 adjusted due to the adoption of ASC 606.
(2) Fiscal year ended March 31, 2018 adjusted due to the adoption of ASC 606.
Operating Cash Flow Activities

During fiscal years 2019, 2018, and 2017, cash provided by operating activities totaled $131.7 million, $120.8 million, and $71.7 million, respectively. During fiscal year 2019, cash provided by operating activities was positively impacted by our net income of $206.6 million, a $7.7 million increase in accounts payable, and a $1.0 million decrease in accrued income taxes. Operating cash flows were negatively impacted by a $70.6 million decrease in other operating liabilities, a $42.8 million increase in

liabilities, a $42.8 million increase in inventories, an $8.9 million increase in accounts receivable, and a $4.4 million increase in prepaid expenses and other assets. The decrease in other operating liabilities was driven by a $46.3 million decrease in accruals for TOKIN anti-trust fines and a $7.8 million decrease in restructuring liabilities. The increase in inventory is due to increased customer demand.

During fiscal year 2018, cash provided by operating activities was positively impacted by our net income of $254.1 million. Excluding the acquired balances from TOKIN, operating cash flows were also positively impacted by a $30.2 million decrease in accounts receivable, a $4.3 million decrease in prepaid expenses and other assets, and a $1.3 million increase in accrued income taxes. Excluding the acquired balances from TOKIN, operating cash flows were negatively impacted by a $16.1 million decrease in

impacted by a $16.1 million decrease in accounts payable and a $13.8 million increase in inventories.

During fiscal year 2017, cash provided by operating activities was positively impacted by our net income of $47.2 million, a $16.8 million decrease in inventories, a $6.2 million increase in accounts payable, and a $1.7 million increase in other operating liabilities. Operating cash flows were negatively impacted by a $2.6 million increase in accounts receivable and a $1.8 million increase in prepaid expenses and other assets.
Investing Cash Flow Activities

During fiscal years 2019, 2018, and 2017, cash provided by (used in) investing activities totaled $(147.0) million, $102.4 million, and $(25.6) million, respectively. During fiscal year 2019, cash used in investing activities included capital expenditures of $146.1 million, primarily related to expanding capacity at our manufacturing facilities in Mexico, Portugal, China, Thailand and Japan, as well as information technology projects in the United States and Mexico. $16.3 million of the $146.1 million in

Mexico. $16.3 million of the $146.1 million in capital expenditures were related to the Customer Capacity Agreements. Additionally, the Company invested $4.0 million in the form of capital contributions to KEMET Jianghai and Novasentis. Offsetting these uses of cash, we had asset sales of $2.3 million and received dividends of $0.8 million.

During fiscal year 2018, cash provided by investing activities was primarily due to $164.0 million in net cash received attributable to the bargain purchase of TOKIN. Additionally, we had proceeds from asset sales of $3.6 million and received dividends of $2.7 million. This was partially offset by capital expenditures of $65.0 million, primarily related to expanding capacity at our manufacturing facilities in Mexico, Portugal, China, Thailand and Japan, as well as for information technology projects in the

as for information technology projects in the United States and Mexico. In addition, the Company invested $3.0 million in the form of capital contributions to Novasentis.

During fiscal year 2017, cash used in investing activities was primarily due to capital expenditures of $25.6 million, primarily related to expanding capacity at our manufacturing facilities in Mexico, Italy, Portugal, and China.
Financing Cash Flow Activities

During fiscal years 2019, 2018, and 2017, cash used in financing activities totaled $56.7 million, $55.8 million, and $0.1 million, respectively. During fiscal year 2019, the Company received $281.8 million in proceeds from the TOKIN Term Loan Facility, net of discount, bank issuance costs, and other indirect issuance costs, $13.4 million in proceeds from advances from customers, as described in the earlier section titled "Customer Advances", received proceeds on an interest free loan from the Portuguese

on an interest free loan from the Portuguese Government of $1.1 million, and received $0.5 million in cash proceeds from the exercise of stock options. The Company made $344.5 million in payments on long term debt, including two quarterly principal payments on the Term Loan Credit Agreement of $4.3 million, for a total of $8.6 million, $323.4 million to repay the remaining balance on the Term Loan Credit Agreement, and one principal payment on the TOKIN Term Loan Facility of $12.4 million. An early payment

Loan Facility of $12.4 million. An early payment premium on the Term Loan Credit Agreement used $3.2 million in cash. Lastly, the Company paid two quarterly cash dividends for a total of $5.8 million.

During fiscal year 2018, cash used in financing activities was impacted by the following payments: (i) $353.0 million to pay off the remaining outstanding balance of the 10.5% Senior Notes, (ii) $33.9 million to repay the remaining outstanding balance of the revolving line of credit, and (iii) three quarterly principal payments on the Term Loan Credit Agreement for $4.3 million each, for a total of $12.9 million. The Company received $329.7 million in proceeds from the Term Loan Credit Agreement, net of

from the Term Loan Credit Agreement, net of discount, bank issuance costs, and other indirect issuance costs, received proceeds from the exercise of stock warrants and stock options for $8.8 million and $5.2 million, respectively, and received $0.3 million in proceeds on an interest free loan from the Portuguese Government.

During fiscal year 2017, the Company made $0.1 million in net payments on long-term debt, had cash outflows of $1.1 million for the purchase of treasury stock, and received $1.1 million from the exercise of stock options.

 |
| table | |           | Fiscal Years Ended March 31, |
---------------------------------------------------------------------- | --------- | ---------------------------- | --------
                                                                       | 2019      | 2018                         | 2017
Net cash provided by (used in) operating activities (1)                | $131,731  | $120,761                     | $71,667
Net cash provided by (used in) investing activities                    | (147,012) | 102,364                      | (25,598)
Net cash provided by (used in) financing activities                    | (56,657)  | (55,798)                     | (125)
Effect of foreign currency fluctuations on cash (2)                    | (6,990)   | 9,745                        | (1,174)
Net increase (decrease) in cash, cash equivalents, and restricted cash | $(78,928) | $177,072                     | $44,770 |


| _id | d1b31dd7c |
| title |  |
| text | 11. Reportable Segments, Geographic Information and Major Customers

Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in assessing performance and allocating resources. The Company uses an internal management reporting system, which provides important financial data to evaluate performance and allocate the Company’s resources on a regional basis. Net sales for the segments are attributed to the region in which the product is

attributed to the region in which the product is manufactured or the service is performed. The services provided, manufacturing processes used, class of customers serviced and order fulfillment processes used are similar and generally interchangeable across the segments. A segment’s performance is evaluated based upon its operating income (loss). A segment’s operating income (loss) includes its net sales less cost of sales and selling and administrative expenses, but excludes corporate and other expenses.

but excludes corporate and other expenses. Corporate and other expenses  fiscal 2019 and the $13.5 million one-time employee bonus paid to full-time, non-executive employees during fiscal 2018 due to the Company's ability to access overseas cash as a result of Tax Reform (the "one-time employee bonus"). These costs are not allocated to the segments, as management excludes such costs when assessing the performance of the segments. Inter-segment transactions are generally recorded at amounts that approximate

generally recorded at amounts that approximate arm’s length transactions. The accounting policies for the segments are the same as for the Company taken as a whole.

Information about the Company’s three reportable segments for fiscal 2019, 2018 and 2017 is as follows (in thousands):

 |
| table | | 2019       | 2018       | 2017
----------------------------------- | ---------- | ---------- | ----------
Net sales:                          |            |            |
AMER                                | $1,429,308 | $1,218,944 | $1,166,346
APAC                                | 1,557,205  | 1,498,010  | 1,279,261
EMEA                                | 309,933    | 281,489    | 192,829
Elimination of inter-segment sales  | (132,012)  | (124,935)  | (110,384)
                                    | 3,164,434  | 2,873,508  | 2,528,052
Operating income (loss):            |            |            |
AMER                                | $57,780    | $38,637    | $41,924
APAC                                | 208,178    | 213,935    | 200,103
EMEA                                | 4,475      | 1,447      | (6,197)
Corporate and other costs           | (128,378)  | (135,736)  | (105,922)
                                    | $142,055   | $118,283   | $129,908
Other income (expense):             |            |            |
Interest expense                    | $(12,853)  | $(12,226)  | $(13,578)
Interest income                     | 1,949      | 4,696      | 5,042
Miscellaneous, net                  | (5,196)    | (3,143)    | 451
Income before income taxes          | $125,955   | $107,610   | $121,823 |


| _id | d1b3391b2 |
| title |  |
| text | ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
NOTE 13. INTANGIBLE ASSETS
Intangible assets consisted of the following as of December 31, 2019 and 2018:
At December 31, 2019, the weighted average remaining useful life of intangibles subject to amortization was approximately 11.2 years.

 |
| table | December 31, 2019      | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount
---------------------- | --------------------- | ------------------------ | -------------------
Technology             | $83,368               | $(14,250)                | $69,118
Customer relationships | 108,995               | (18,197)                 | 90,798
Trademarks and other   | 26,888                | (2,793)                  | 24,095
Total                  | $219,251              | $(35,240)                | $184,011
December 31, 2018      | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount
Technology             | $39,879               | $(7,927)                 | $31,952
Customer relationships | 35,509                | (13,484)                 | 22,025
Trademarks and other   | 2,501                 | (1,568)                  | 933
Total                  | $77,889               | $(22,979)                | $  54,910 |


| _id | d1b3bcbf2 |
| title |  |
| text | NOTE 11 - STOCK CAPITAL (Cont.)
Private placements and public offerings: (Cont.)

The New Warrants have not been registered under the Securities Act of 1933, as amended (the Securities Act), or state securities laws. The shares issuable upon exercise of the New Warrants have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333- 233349). The Exercised Shares have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333225995). The issuance of the Exercised Shares and New Warrants is exempt from the registration

and New Warrants is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act.

Since its inception the Company has raised approximately $64,000, net in cash in consideration for issuances of Common Stock and warrants in private placements and public offerings as well as proceeds from warrants exercises.
Warrants:
The following table sets forth the number, exercise price and expiration date of Company warrants outstanding as of December 31, 2019:

 |
| table | | Outstanding as of December 31, | Exercise | Exercisable
------------------ | ------------------------------ | -------- | -----------
Issuance Date      | 2019                           | price    | Through
Aug 2007- Jan 2011 | 2,016,666                      | 3 - 4.35 | Nov-2022
Jun-2018           | 458,202                        | 9        | Dec-2020
Jun-2018           | 1,158,000                      | 7        | Dec-2021
Aug - 2019         | 842,000                        | 7        | Dec-2021
Total              | 4,474,868                      |          | |


| _id | d1b387dee |
| title |  |
| text | Item 16C. Principal Accountant Fees and Services
Our principal accountant for 2019 and 2018 was KPMG LLP, Chartered Professional Accountants. The following table shows the fees Teekay and our subsidiaries paid or accrued for audit and other services provided by KPMG LLP for 2019 and 2018.

(1) Audit fees represent fees for professional services provided in connection with the audits of our consolidated financial statements and effectiveness of internal control over financial reporting, reviews of our quarterly consolidated financial statements and audit services provided in connection with other statutory or regulatory filings for Teekay or our subsidiaries including professional services in connection with the review of our regulatory filings for public offerings of our subsidiaries.

Audit fees for 2019 and 2018 include approximately $928,300 and $859,000, respectively, of fees paid to KPMG LLP by Teekay LNG that were approved by the Audit Committee of the Board of Directors of the general partner of Teekay LNG. Audit fees for 2019 and 2018 include approximately $588,200 and $517,000, respectively, of fees paid to KPMG LLP by our subsidiary Teekay Tankers that were approved by the Audit Committee of the Board of Directors of Teekay Tankers.

(2) Audit-related fees consisted primarily of accounting consultations, employee benefit plan audits, services related to business acquisitions, divestitures and other attestation services. (3) For 2019 and 2018, tax fees principally included corporate tax compliance fees.

The Audit Committee has the authority to pre-approve audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees. Engagements for proposed services either may be separately pre-approved by the Audit Committee or entered into pursuant to detailed pre-approval policies and procedures established by the Audit Committee, as long as the Audit Committee is informed on a timely basis of any engagement entered into on that basis.

The Audit Committee separately pre-approved all engagements and fees paid to our principal accountants in 2019 and 2018.

 |
| table | Fees (in thousands of U.S. dollars) | 2019  | 2018
----------------------------------- | ----- | -----
Audit Fees (1)                      | 2,723 | 2,529
Audit-Related Fees (2)              | 33    | 59
Tax Fees (3)                        | 23    | 32
Total                               | 2,779 | 2,620
                                    |       | |


| _id | d1b3c769c |
| title |  |
| text | 3.3 Fair value estimation (continued)                                                       If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments mainly include:
Dealer quotes for similar instruments;
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves; and

Other techniques, such as discounted cash flow analysis, are used to determine fair value for financial instruments.
During the year ended 31 December 2019, there was 1 transfer between level 1 and 2 for recurring fair value measurements. For transfers in and out of level 3 measurements see the following table, which presents the changes of financial instruments in level 3 for the years ended 31 December 2019 and 2018:

 |
| table | | Financial assets |             | Financial liabilities |
------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | ----------- | --------------------- | -----------
                                                                                | 2019             | 2018        | 2019                  | 2018
                                                                                | RMB’Million      | RMB’Million | RMB’Million           | RMB’Million
Opening balance – IAS 39                                                                                |                  | 77,131      |                       | 2,154
Adjustment on adoption of IFRS 9                                                                                |                  | 22,976      |                       | –
Opening balance – IFRS 9                                                                                | 83,934           | 100,107     | 4,466                 | 2,154
Additions                                                                                | 39,116           | 51,185      | 75                    | 3,301
Business combination                                                                                | –                | –           | (977)                 | –
Disposals/Settlements                                                                                | (6,714)          | (9,899)     | (1,193)               | –
Transfers                                                                                | (4,552)          | (93,151)    | –                     | –
Changes in fair value recognised in other comprehensive income                                                                        | 328              | 261         | –                     | –
Changes in fair value recognised in profit or loss*                                                                                | 9,241            | 30,485      | (463)                 | (1,063)
Currency translation differences                                                                                | 1,740            | 4,946       | (35)                  | 74
Closing balance                                                                                | 123,093          | 83,934      | 1,873                 | 4,466
* Includes unrealised gains or (losses) recognised in profit or loss attributable to balances held at the end of the reporting period | 3,265            | 6,861       | (463)                 | (1,063) |


| _id | d1b37a694 |
| title |  |
| text | Item 6. Selected Financial Data
Five Years Ended July 27, 2019 (in millions, except per-share amounts)
(1) In the second quarter of fiscal 2019, we completed the sale of the Service Provider Video Software Solutions (SPVSS) business. As a result, revenue from the SPVSS business will not recur in future periods. We recognized an immaterial gain from this transaction. Revenue for the years ended July 27, 2019 and July 28, 2018 include SPVSS revenue of $168 million and $903 million, respectively.

(2) In connection with the Tax Cuts and Jobs Act (“the Tax Act”), we recorded an $872 million charge which was the reversal of the previously recorded benefit associated with the U.S. taxation of deemed foreign dividends recorded in fiscal 2018 as a result of a retroactive final U.S. Treasury regulation issued during the fourth quarter of fiscal 2019. See Note 17 to the Consolidated Financial Statements.

(3) In fiscal 2018, Cisco recorded a provisional tax expense of $10.4 billion related to the enactment of the Tax Act comprised of $8.1 billion of U.S. transition tax, $1.2 billion of foreign withholding tax, and $1.1 billion re-measurement of net deferred tax assets and liabilities (DTA).

(4) In the second quarter of fiscal 2016, Cisco completed the sale of the SP Video CPE Business. As a result, revenue from this portion of the Service Provider Video product category did not recur in future periods. The sale resulted in a pre-tax gain of $253 million net of certain transaction costs. The years ended July 30, 2016 and July 25, 2015 include SP Video CPE Business revenue of $504 million and $1,846 million, respectively.

(5) In fiscal 2016 Cisco recognized total tax benefits of $593 million for the following: i) the Internal Revenue Service (IRS) and Cisco settled all outstanding items related to Cisco’s federal income tax returns for fiscal 2008 through fiscal 2010, as a result of which Cisco recorded a net tax benefit of $367 million; and ii) the Protecting Americans from Tax Hikes Act of 2015 reinstated the U.S. federal research and development (R&D) tax credit permanently, as a result of which Cisco recognized tax

as a result of which Cisco recognized tax benefits of $226 million, of which $81 million related to fiscal 2015 R&D expenses.

At the beginning of fiscal 2019, we adopted Accounting Standards Codification (ASC) 606, a new accounting standard related to revenue recognition, using the modified retrospective method to those contracts that were not completed as of July 28, 2018. See Note 2 to the Consolidated Financial Statements for the impact of this adoption.
No other factors materially affected the comparability of the information presented above.

 |
| table | Years Ended                                  | July 27, 2019 (1)(2) | July 28, 2018 (1)(3) | July 29, 2017 | July 30, 2016 (4)(5) | July 25, 2015 (4)
-------------------------------------------- | -------------------- | -------------------- | ------------- | -------------------- | -----------------
Revenue                                      | $51,904              | $49,330              | $48,005       | $49,247              | $49,161
Net income                                   | $11,621              | $110                 | $9,609        | $10,739              | $8,981
Net income per share—basic                   | $2.63                | $0.02                | $1.92         | $2.13                | $1.76
Net income per share—diluted                 | $2.61                | $0.02                | $1.90         | $2.11                | $1.75
Shares used in per-share calculation—basic   | 4,419                | 4,837                | 5,010         | 5,053                | 5,104
Shares used in per-share calculation—diluted | 4,453                | 4,881                | 5,049         | 5,088                | 5,146
Cash dividends declared per common share     | $1.36                | $1.24                | $1.10         | $0.94                | $0.80
Net cash provided by operating activities    | $15,831              | $13,666              | $13,876       | $13,570              | $12,552 |


| _id | d1b363b10 |
| title |  |
| text | Note 13 Contract costs
The table below provides a reconciliation of the contract costs balance.
Contract costs are amortized over a period ranging from 12 to 84 months.

 |
| table | FOR THE YEAR ENDED DECEMBER 31                                           | 2019  | 2018
------------------------------------------------------------------------ | ----- | -----
Opening balance, January 1                                               | 707   | 636
Incremental costs of obtaining a contract and contract fulfillment costs | 602   | 567
Amortization included in operating costs                                 | (523) | (477)
Impairment charges included in operating costs                           | (3)   | (19)
Ending balance, December 31                                              | 783   | 707 |


| _id | d1a7155e8 |
| title |  |
| text | 5. PROPERTY AND EQUIPMENT, NET
Property and equipment, at cost, consisted of the following at December 31, 2019 and 2018 (in thousands):

Depreciation expense related to property and equipment was approximately $0.04 million and $0.13 million in 2019 and 2018, respectively. Depreciation expense includes depreciation related to finance leases of approximately $0.001 million and $0.002 million for the periods ended December 31, 2019 and 2018, respectively. Our finance leases have original terms of one to three years. The principal payments for these finance leases are reflected as cash outflows from financing activities in the accompanying

from financing activities in the accompanying consolidated statements of cash flows. Future minimum lease payments under our capital leases that have initial terms in excess of one year are included in “Leases” in Note 8.     Depreciation expense related to property and equipment was approximately $0.04 million and $0.13 million in 2019 and 2018, respectively. Depreciation expense includes depreciation related to finance leases of approximately $0.001 million and $0.002 million for the periods ended

million and $0.002 million for the periods ended December 31, 2019 and 2018, respectively. Our finance leases have original terms of one to three years. The principal payments

In connection with the relocation of our corporate headquarters in July 2019, we disposed of a number of assets that were no longer in use. For each of the years ended December 31, 2019 and 2018, we recorded a loss on disposal of fixed assets of approximately $0.01 million.  In connection with the relocation of our corporate headquarters in July 2019, we disposed of a number of assets that were no longer in use. For each of the years ended December 31, 2019 and 2018, we recorded a loss on disposal of fixed

and 2018, we recorded a loss on disposal of fixed assets of approximately $0.01 million.

In connection with the closure of our Lake Mary facility in 2018, we reclassified equipment with a net book value of approximately $0.07 million to assets held for sale. We contracted with a third party for the consignment sale of these assets and completed sales for several assets in 2018 and 2019. For the year ended December 31, 2019, we recognized a net loss of approximately $0.04 million on the sale and/or impairment of assets held for sale. For the year ended December 31, 2018, we recognized a gain of

ended December 31, 2018, we recognized a gain of approximately $0.01 million on assets held for sale. The gains and losses on the sale or impairment of held for sale assets is included in selling, general and administrative expenses in the accompanying statements of comprehensive loss.

 |
| table | | 2019  | 2018
------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----- | -------
Equipment and software, including equipment purchased under capital leases of $6 and $17 at December 31, 2019 and 2018, respectively                                     | $260  | $1,555
Leasehold improvements                                                                                | 33    | 786
Furniture and fixtures                                                                                | 43    | 182
                                                                                | 336   | 2,523
Less accumulated depreciation, including accumulated depreciation for equipment purchased under capital leases of $3 and $13 at December 31, 2019 and 2018, respectively | (266) | (2,394)
                                                                                | $70   | $129 |


| _id | d1b352a18 |
| title |  |
| text | NOTE 14-INFORMATION CONCERNING PRODUCT LINES, GEOGRAPHIC INFORMATION, ACCOUNTS RECEIVABLE AND REVENUE CONCENTRATION
The Company identifies its business segments based on business activities, management responsibility and geographic location. For all periods presented, the Company operated in a single reportable business segment.
The following is a breakdown of revenue by product family (in thousands):

(1) New products include all products manufactured on 180 nanometer or smaller semiconductor processes, eFPGA IP license, QuickAI and SensiML AI software as a service (SaaS) revenues. Mature products include all products produced on semiconductor processes larger than 180 nanometer.

 |
| table | |         | Fiscal Years |
----------------------------- | ------- | ------------ | -------
                              | 2019    | 2018         | 2017
Revenue by product line (1) : |         |              |
New products                  | $3,123  | $5,735       | $5,853
Mature products               | 7,187   | 6,894        | 6,296
Total revenue                 | $10,310 | $12,629      | $12,149 |


| _id | d1b38353c |
| title |  |
| text | Other Operating (Income) Expense, Net

Restructure and asset impairments primarily relate to our continued emphasis to centralize certain key functions. In addition, in 2019, we finalized the sale of our 200mm fabrication facility in Singapore and recognized restructure gains of $128 million. In 2017, we recognized net restructure gains of $15 million related to the sale of our Lexar assets; our assets associated with our 200mm fabrication facility in Singapore; and our 40% ownership interest in Tera Probe, Inc and assembly and test facility

in Tera Probe, Inc and assembly and test facility located in Akita, Japan.

 |
| table | For the year ended                                           | 2019 | 2018  | 2017
------------------------------------------------------------ | ---- | ----- | -----
(Gain) loss on disposition of property, plant, and equipment | $43  | $(96) | $(22)
Restructure and asset impairments                            | (29) | 28    | 18
Other                                                        | 35   | 11    | 5
                                                             | $49  | $(57) | $1 |


| _id | d1b3b8da4 |
| title |  |
| text | FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)
Movement of FVPL is analysed as follows:
Note: During the year ended 31 December 2019, the Group’s additions to FVPL mainly comprised the following:
an investment in a retail company of approximately USD500 million (equivalent to approximately RMB3,550 million) to subscribe for approximately 21% of its equity interests in form of preferred shares, on an outstanding basis;

an additional investment in a real estate O2O platform in the PRC of approximately USD320 million (equivalent to approximately RMB2,258 million). As at 31 December 2019, the Group’s equity interests in this investee company are approximately 9% on an outstanding basis; and

new investments and additional investments with an aggregate amount of approximately RMB38,810 million in listed and unlisted entities mainly operating in the United States, the PRC and other Asian countries. These companies are principally engaged in social networks, Internet platform, technology and other Internet-related business. None of the above investment was individually significant that triggers any disclosure requirements pursuant to Chapter 14 of the Listing Rules at the time of inception.

During the year ended 31 December 2019, except as described in Note 21(b), transfers also mainly comprised an equity investment designated as FVOCI due to the conversion of the redeemable instruments into ordinary shares amounting to RMB1,395 million upon its IPO.
During the year ended 31 December 2019, the Group disposed of certain investments with an aggregate amount of RMB16,664 million, which are mainly engaged in the provision of Internet-related services.

Management has assessed the level of influence that the Group exercises on certain FVPL with shareholding exceeding 20%. Since these investments are either held in form of redeemable instruments or interests in limited life partnership without significant influence, these investments have been classified as FVPL.

 |
| table | | 2019        | 2018
--------------------------------- | ----------- | -----------
                                  | RMB’Million | RMB’Million
At beginning of the year          | 97,877      | –
Adjustment on adoption of IFRS 9  | –           | 95,497
Additions (Note (a))              | 44,618      | 60,807
Transfers (Note (b))              | (1,421)     | (78,816)
Changes in fair value (Note 7(b)) | 9,511       | 28,738
Disposals (Note (c))              | (16,664)    | (14,805)
Currency translation differences  | 2,015       | 6,456
At end of the year                | 135,936     | 97,877 |


| _id | d1b38f2ba |
| title |  |
| text | 18. Revenue
Effective September 1, 2018, the Company adopted ASU 2014-09, Revenue Recognition (Topic 606). The new standard is a comprehensive new revenue recognition model that requires the Company to recognize revenue in a manner which depicts the transfer of goods or services to its customers at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

Prior to the adoption of the new standard, the Company recognized substantially all of its revenue from contracts with customers at a point in time, which was generally when the goods were shipped to or received by the customer, title and risk of ownership had passed, the price to the buyer was fixed or determinable and collectability was reasonably assured (net of estimated returns). Under the new standard, the Company recognizes revenue over time for the majority of its contracts with customers which

majority of its contracts with customers which results in revenue for those customers being recognized earlier than under the previous guidance. Revenue for all other contracts with customers continues to be recognized at a point in time, similar to recognition prior to the adoption of the standard.

Additionally, the new standard impacts the Company’s accounting for certain fulfillment costs, which include upfront costs to prepare for manufacturing activities that are expected to be recovered. Under the new standard, such upfront costs are recognized as an asset and amortized on a systematic basis consistent with the pattern of the transfer of control of the products or services to which to the asset relates.

The Company adopted ASU 2014-09 using the modified retrospective method by applying the guidance to all open contracts upon adoption and recorded a cumulative effect adjustment as of September 1, 2018, net of tax,  effect adjustment (in thousands):
(1) Differences primarily relate to the timing of revenue recognition for over time customers and certain balance sheet reclassifications.

(2) Differences primarily relate to the timing of recognition and recovery of fulfillment costs and certain balance sheet reclassifications.
(3) Included within accrued expenses on the Consolidated Balance Sheets.
(4) Differences included in contract liabilities as of September 1, 2018.

 |
| table | | Balance as of August 31, 2018 | Adjustments due to adoption of ASU 2014-09 | Balance as of September 1, 2018
----------------------------------------------- | ----------------------------- | ------------------------------------------ | -------------------------------
Assets                                          |                               |                                            |
Contract assets(1)                              | $—                            | $591,616                                   | $591,616
Inventories, net(1)                             | $3,457,706                    | $(461,271)                                 | $2,996,435
Prepaid expenses and other current assets(1)(2) | $1,141,000                    | $(37,271)                                  | $1,103,729
Deferred income taxes(1)(2)                     | $218,252                      | $(8,325)                                   | $209,927
Liabilities                                     |                               |                                            |
Contract liabilities(2)(3)                      | $—                            | $690,142                                   | $690,142
Deferred income(2)(3)(4)                        | $691,365                      | $(691,365)                                 | $—
Other accrued expenses(3)(4)                    | $1,000,979                    | $40,392                                    | $1,041,371
Deferred income taxes(1)                        | $114,385                      | $2,977                                     | $117,362
Equity                                          |                               |                                            |
Retained earnings(1)(2)                         | $1,760,097                    | $42,602                                    | $1,802,699 |


| _id | d1b2eb8cc |
| title |  |
| text | Stock Compensation Expense
The following table shows total stock-based compensation expense and related tax benefits included in the Consolidated Statements of Operations for fiscal 2019, 2018 and 2017 (in thousands):

As a result of our acquisition of Rofin on November 7, 2016, we made a payment of $15.3 million due to the cancellation of options held by employees of Rofin. The payment was allocated between total estimated merger consideration of $11.1 million and post-merger stock-based compensation expense of $4.2 million, recorded in the first quarter of fiscal 2017, based on the portion of the total service period of the underlying options that have not been completed by the merger date.

During fiscal 2019, $4.8 million of stock-based compensation cost was capitalized as part of inventory for all stock plans, $4.8 million was amortized into cost of sales and $1.5 million remained in inventory at September 28, 2019. During fiscal 2018, $4.7 million of stock-based compensation cost was capitalized as part of inventory for all stock plans, $4.4 million was amortized into cost of sales and $1.5 million remained in inventory at September 29, 2018.

At fiscal 2019 year-end, the total compensation cost related to unvested stock-based awards granted to employees under our stock plans but not yet recognized was approximately $33.1 million. We do not estimate forfeitures. This cost will be amortized on a straight-line basis over a weighted-average period of approximately 1.5 years.

 |
| table | |         | Fiscal  |
----------------------------------- | ------- | ------- | -------
                                    | 2019    | 2018    | 2017
Cost of sales                       | $4,880  | $4,403  | $3,541
Research and development            | 2,990   | 3,247   | 2,973
Selling, general and administrative | 28,596  | 25,088  | 23,911
Income tax benefit                  | (4,946) | (5,073) | (7,073)
                                    | $31,520 | $27,665 | $23,352 |


| _id | d1b38b20a |
| title |  |
| text | Trading profit
The Group reported Trading profit of £128.5m in the year, growth of £5.5m, up +4.5% compared to 2017/18. Divisional contribution increased by £6.1m to £161.9m. The Grocery business recorded Divisional contribution growth of £8.3m to £138.3m while Sweet Treats Divisional contribution was £2.2m lower than the prior year at £23.6m. Group & corporate costs were £0.6m higher than the prior year.

In the first half of the year, Grocery Divisional contribution benefitted from previous changes in the promotional strategy of Ambrosia. The business reduced the depth of promotional deals it offered which resulted in lower volumes and revenue in the period but growth in Divisional contribution.

Additionally, Divisional contribution margins in the Grocery business grew 2.1 percentage points in the first half compared to the prior year. This is in line with margins two years ago, whereby margins in the prior year were impacted by a longer than expected process to recover input cost inflation seen across the Group’s categories.

 |
| table | £m                       | 2018/19 | 2017/18 | Change
------------------------ | ------- | ------- | ------
Divisional contribution2 |         |         |
Grocery                  | 138.3   | 130.0   | +6.3%
Sweet Treats             | 23.6    | 25.8    | (8.4%)
Total                    | 161.9   | 155.8   | +3.9%
Group & corporate costs  | (33.4)  | (32.8)  | (1.8%)
Trading profit           | 128.5   | 123.0   | +4.5% |


| _id | d1b384572 |
| title |  |
| text | Under Article 35 of our Articles of Association, our financial year extends from January 1 to December 31, which is the period end of each fiscal year. In 2019, the first quarter ended on March 30, the second quarter ended on June 29, the third quarter ended on September 28 and the fourth quarter ended on December 31.
In 2020, the first quarter will end on March 28, the second quarter will end on June 27, the third quarter will end on September 26 and the fourth quarter will end on December 31.

Based on our fiscal calendar, the distribution of our revenues and expenses by quarter may be unbalanced due to a different number of days in the various quarters of the fiscal year and can also differ from equivalent prior years’ periods, as illustrated in the below table for the years 2018, 2019 and 2020.

 |
| table | | Q1   | Q2   | Q3   | Q4
---- | ---- | ---- | ---- | ----
     | Days | Days | Days | Days
2018 | 90   | 91   | 91   | 93
2019 | 89   | 91   | 91   | 94
2020 | 88   | 91   | 91   | 96 |


| _id | d1b363c1e |
| title |  |
| text | Note 8. Goodwill and Intangible Assets, Net
The changes in goodwill by reportable segment are outlined below (in thousands):

On October 21, 2019, we acquired 85% of the issued and outstanding capital stock of OpenEye and recorded $41.4 million of goodwill in the Alarm.com segment. There were no impairments of goodwill recorded during the years ended December 31, 2019, 2018 or 2017. As of December 31, 2019, the accumulated balance of goodwill impairments was $4.8 million, which is related to our acquisition of EnergyHub in 2013.

 |
| table | | Alarm.com | Other | Total
------------------------------- | --------- | ----- | --------
Balance as of January 1, 2018   | $63,591   | $—    | $63,591
Goodwill acquired               | —         | —     | —
Balance as of December 31, 2018 | 63,591    | —     | 63,591
Goodwill acquired               | 41,372    | —     | 41,372
Balance as of December 31, 2019 | $104,963  | $—    | $104,963 |


| _id | d1b39136c |
| title |  |
| text | Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
(a) Cisco common stock is traded on the Nasdaq Global Select Market under the symbol CSCO. Information regarding quarterly cash dividends declared on Cisco’s common stock during fiscal 2019 and 2018 may be found in Supplementary Financial Data on page 106 of this report. There were 39,216 registered shareholders as of August 30, 2019.
(b) Not applicable.

(b) Not applicable.
(c) Issuer purchases of equity securities (in millions, except per-share amounts):

On September 13, 2001, we announced that our Board of Directors had authorized a stock repurchase program. On February 13, 2019, our Board of Directors authorized a $15 billion increase to the stock repurchase program. As of July 27, 2019, the remaining authorized amount for stock repurchases under this program, including the additional authorization, is approximately $13.5 billion with no termination date.

For the majority of restricted stock units granted, the number of shares issued on the date the restricted stock units vest is net of shares withheld to meet applicable tax withholding requirements. Although these withheld shares are not issued or considered common stock repurchases under our stock repurchase program and therefore are not included in the preceding table, they are treated as common stock repurchases in our financial statements as they reduce the number of shares that would have been issued

the number of shares that would have been issued upon vesting (see Note 14 to the Consolidated Financial Statements).

 |
| table | Period                         | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
------------------------------ | -------------------------------- | ---------------------------- | -------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------
April 28, 2019 to May 25, 2019 | 42                               | $54.33                       | 42                                                                               | $15,700
May 26, 2019 to June 22, 2019  | 22                               | $55.07                       | 22                                                                               | $14,465
June 23, 2019 to July 27, 2019 | 18                               | $56.46                       | 18                                                                               | $13,460
Total                          | 82                               | $54.99                       | 82                                                                               | |


| _id | d1b34e3dc |
| title |  |
| text | The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases, and other information. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):

The unrecognized tax benefits relate primarily to federal and state research and development credits and intercompany profit on the transfer of certain IP rights to one of the Company’s foreign subsidiaries as part of the Company’s tax reorganization completed in 2015. The Company’s policy is to account for interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2019, the Company accrued interest or penalties related to uncertain tax positions in

penalties related to uncertain tax positions in the amount of $25,000. As of December 31, 2019, the total amount of unrecognized tax benefits that would affect the Company’s effective tax rate, if recognized, is $97,000.

Because the Company has net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state and foreign taxing authorities may examine the Company’s tax returns for all years from 2000 through the current period.

 |
| table | |        | Years Ended December 31, |
---------------------------------------------------------------------------- | ------ | ------------------------ | -------
                                                                             | 2019   | 2018                     | 2017
Balance at beginning of year                                                 | $4,611 | $4,672                   | $6,232
Gross increases for tax positions of prior years                             | 394    | —                        | —
Gross decreases for federal tax rate change for tax positions of prior years | —      | —                        | (1,670)
Gross increases for tax positions of current year                            | 34     | 45                       | 110
Lapse of statute of limitations                                              | (213)  | (106)                    | —
Balance at end of year                                                       | $4,826 | 4,611                    | 4,672 |


| _id | d1b38e658 |
| title |  |
| text | 15. Revenue from Contracts with Customers
Impact of Adopting Topic 606

The Company adopted Topic 606 at the beginning of fiscal 2019 using the modified retrospective method. The new standard resulted in a change to the timing of revenue recognition for a significant portion of the Company's revenue, whereby revenue is recognized over time, as products are produced, as opposed to at a point in time based upon shipping terms. As a result of the adoption of Topic 606, the following adjustments were made to the opening balances of the Company's Consolidated Balance Sheets (in

of the Company's Consolidated Balance Sheets (in thousands):

The cumulative effect of applying the new guidance in Topic 606 resulted in the Company increasing its fiscal 2019 opening Retained earnings balance by$ 7.8 million due to certain customer contracts requiring revenue recognition over time. Contract assets in the amount of$ 76.4 million were recognized due to the recognition of revenue on an over time basis for some customers rather than at a specific point in time. Inventory declined $69.0 million primarily due to earlier recognition of costs related to

due to earlier recognition of costs related to the contracts for which revenue was recognized on an over time basis. The decline in other accrued liabilities is primarily due to the reclassification of deferred revenue to contract assets for prepayments associated with revenue recognized over time, partially offset by an increase in taxes payable associated with the increase in revenue recognized over time.

 |
| table | | Balance at September 29, 2018  | Impacts due to adoption of Topic
606 | Balance at September 30, 2018
------------------------------------ | ------------------------------ | ------------------------------------ | -----------------------------
ASSETS                               |                                |                                      |
   Contract assets                   | $—                             | $76,417                              | $76,417
   Inventories                       | 794,346                        | (68,959)                             | 725,387
LIABILITIES AND SHAREHOLDERS' EQUITY |                                |                                      |
   Other accrued liabilities         | $68,163                        | $(357)                               | $67,806
   Retained earnings                 | 1,062,246                      | 7,815                                | 1,070,061 |


| _id | d1a725d26 |
| title |  |
| text | Cost of revenues. Cost of revenues increased by 20% to RMB59,659 million for the fourth quarter of 2019 on a year-on-year basis. The increase was mainly due to greater costs of FinTech services, channel costs and content costs. As a percentage of revenues, cost of revenues decreased to 56% for the fourth quarter of 2019 from 59% for the fourth quarter of 2018. The following table sets forth our cost of revenues by line of business for the fourth quarter of 2019 and the fourth quarter of 2018:

Cost of revenues for VAS increased by 28% to RMB26,120 million for the fourth quarter of 2019 on a year-on-year basis. The increase mainly reflected greater channel costs for smart phone games due to increased revenues, including the channel costs attributable to Supercell, as well as higher content costs for services and products such as live broadcast services, online games and music streaming.

Cost of revenues for FinTech and Business Services increased by 32% to RMB21,520 million for the fourth quarter of 2019 on a year-on-year basis. The increase was primarily driven by scale expansion of our payment-related services and cloud business.

Cost of revenues for Online Advertising decreased by 14% to RMB9,241 million for the fourth quarter of 2019 on a year-on-year basis. The decrease was mainly due to lower content costs for video advertising as a result of fewer major content releases, and to cost management.

 |
| table | | Unaudited                           |          |                  |
----------------------------- | ----------------------------------- | -------- | ---------------- | ----------
                              | Three months ended                  |          |                  |
                              | 31 December 2019                    |          | 31 December 2018 |
                              |                                     | % of     |                  | % of
                              |                                     | segment  |                  | segment
                              | Amount                              | revenues | Amount           | revenues
                              |                                     |          | (Restated)       | (Restated)
                              | (RMB in millions, unless specified) |          |                  |
VAS                           | 26,120                              | 50%      | 20,330           | 47%
FinTech and Business Services | 21,520                              | 72%      | 16,310           | 76%
Online Advertising            | 9,241                               | 46%      | 10,800           | 63%
Others                        | 2,778                               | 84%      | 2,304            | 88%
Total cost of revenues        | 59,659                              |          | 49,744           | |


| _id | d1b3c71e2 |
| title |  |
| text | 15. Net Income per Share
The following is a calculation of basic and diluted net income per share (in millions, except per share amounts):
Potential shares from outstanding employee equity awards totaling 1 million, 1 million and 6 million for fiscal 2019, 2018 and 2017, respectively, were excluded from the diluted net income per share calculations as their inclusion would have been anti-dilutive.

 |
| table | |                | Year Ended     |
---------------------------------------------- | -------------- | -------------- | --------------
                                               | April 26, 2019 | April 27, 2018 | April 28, 2017
Numerator:                                     |                |                |
Net income                                     | $ 1,169        | $ 116          | $ 481
Denominator:                                   |                |                |
Shares used in basic computation               | 254            | 268            | 275
Dilutive impact of employee equity award plans | 5              | 8              | 6
Shares used in diluted computation             | 259            | 276            | 281
Net Income per Share:                          |                |                |
Basic                                          | $ 4.60         | $ 0.43         | $ 1.75
Diluted                                        | $ 4.51         | $ 0.42         | $ 1.71 |


| _id | d1b337dbc |
| title |  |
| text | Note 24 Post-employment benefit plans
POST-EMPLOYMENT BENEFIT PLANS COST
We provide pension and other benefits for most of our employees. These include DB pension plans, DC pension plans and OPEBs.

We operate our DB and DC pension plans under applicable Canadian and provincial pension legislation, which prescribes minimum and maximum DB funding requirements. Plan assets are held in trust, and the oversight of governance of the plans, including investment decisions, contributions to DB plans and the selection of the DC plans investment options offered to plan participants, lies with the Pension Fund Committee, a committee of our board of directors.

The interest rate risk is managed using a liability matching approach, which reduces the exposure of the DB plans to a mismatch between investment growth and obligation growth.
The longevity risk is managed using a longevity swap, which reduces the exposure of the DB plans to an increase in life expectancy.
COMPONENTS OF POST-EMPLOYMENT BENEFIT PLANS SERVICE COST

 |
| table | FOR THE YEAR ENDED DECEMBER 31                                               | 2019  | 2018
---------------------------------------------------------------------------- | ----- | -----
DB pension                                                                   | (193) | (213)
DC pension                                                                   | (110) | (106)
OPEBs                                                                        | (3)   | (3)
Less:                                                                        |       |
Capitalized benefit plans cost                                               | 59    | 56
Total post-employment benefit plans service cost included in operating costs | (247) | (266)
Other costs recognized in severance, acquisition and other costs             | –     | (4)
Total post-employment benefit plans service cost                             | (247) | (270) |


| _id | d1b320888 |
| title |  |
| text | Note 16. Share-Based Compensation
Share-Based Compensation Expense
The following table presents the details of the Company's share-based compensation expense (in millions):

(1) During the year ended March 31, 2019, $17.2 million of share-based compensation expense was capitalized to inventory, and $14.9 million of previously capitalized share-based compensation expense in inventory was sold. During the year ended March 31, 2018, $11.9 million of share-based compensation expense was capitalized to inventory and $13.8 million of previously capitalized share-based compensation expense in inventory that was sold. During the year ended March 31, 2017, $11.3 million of share-based

March 31, 2017, $11.3 million of share-based compensation expense was capitalized to inventory. The amount of sharebased compensation included in cost of sales during fiscal 2017 included $14.5 million of previously capitalized sharebased compensation expense in inventory was sold and $4.2 million of share-based compensation expense related to the Company's acquisition of Atmel that was not previously capitalized into inventory.

The amount of unearned share-based compensation currently estimated to be expensed in the remainder of fiscal 2020 through fiscal 2024 related to unvested share-based payment awards at March 31, 2019 is $253.4 million. The weighted average period over which the unearned share-based compensation is expected to be recognized is approximately 1.88 years.

 |
| table | |        | Year Ended March 31, |
--------------------------------------------- | ------ | -------------------- | -----
                                              | 2019   | 2018                 | 2017
Cost of sales (1)                             | $14.9  | $13.8                | $18.7
Research and development                      | 72.0   | 42.5                 | 46.8
Selling, general and administrative           | 62.3   | 36.9                 | 62.6
Special (income) charges and other, net       | 17.2   | —                    | —
Pre-tax effect of share-based compensation    | 166.4  | 93.2                 | 128.1
Income tax benefit                            | 35.5   | 28.3                 | 44.2
Net income effect of share-based compensation | $130.9 | $64.9                | $83.9 |


| _id | d1b31137e |
| title |  |
| text | Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated.
Net cash provided by/(used in) operating activities
Cash provided by operating activities decreased by $10.2 million to $106.5 million in 2019 compared to $116.7 million in 2018. The decrease was primarily due to:

• lower contribution recognized from our participation in the Cool Pool due to lower utilization and a higher number of drydocking days for our vessels for the year ended December 31, 2019;
• $24.9 million of drydocking costs as the majority of our fleet was scheduled for dry-dock during 2019;
• $9.3 million in cash receipts in connection with arbitration proceedings with a former charterer of the Golar Tundra, compared to $50.7 million recovered in 2018; and

• the reduction in the general timing of working capital in 2019 compared to the same period in 2018.
This was partially offset by receipts of $4.0 million in relation to a loss of hire insurance claim on the Golar Viking. There were no comparable receipts in 2018.

Cash provided by operating activities increased by $151.8 million to $116.7 million in 2018 compared to cash utilized of $35.1 million in 2017. The increase in cash utilized in 2018 was primarily due to: • higher contributions recognized from our participation in the Cool Pool as a result of improved utilization and daily hire rates from the Cool Pool vessels; • lower charterhire payments as a result of the expiry of the charter-back arrangement of the Golar Grand from Golar Partners in November 2017; •

Grand from Golar Partners in November 2017; • $50.7 million in cash receipts in connection with arbitration proceedings with a former charterer of the Golar Tundra; and • the improvement on the general timing of working capital in 2018 compared to the same period in 2017.

Net cash used in investing activities
Net cash used in investing activities of $264.4 million in 2019 comprised mainly of:
• $376.3 million of payments made in respect of the conversion of the Gimi into a FLNG;
• $21.0 million additional investments in Golar Power and Avenir; and
• $24.4 million of payments predominately for the installation of the ballast water treatment systems on eight of our vessels.
This was partially offset by receipts of:

This was partially offset by receipts of:
• $115.2 million of proceeds from Keppel's initial subscription and subsequent cash calls in relation to its 30% equity interest in Gimi MS;
• $29.2 million of dividends received from Golar Partners; and
• $9.7 million of cash consideration received from Golar Partners in respect of the remaining net purchase price less working capital adjustments in connection with the Hilli acquisition.

Net cash used in investing activities of $202.5 million in 2018 comprised mainly of:
• the addition of $116.7 million to asset under development relating to payments made in respect of the conversion of the Hilli into a FLNG; and
• additions of $95.5 million to investments in affiliates, which relates principally to capital contributions made to Golar Power of $55.0 million and our investment in Avenir of $24.8 million; and
• additions to vessels and equipment of $33.1 million.

This was partially offset by: • receipt of $9.7 million from Golar Partners in relation to the Hilli Disposal; and • $33.2 million of dividends received from Golar Partners.
Net cash (used in)/provided by financing activities

Net cash used in financing activities is principally generated from funds from new debt, debt refinancings, debt repayments and cash dividends. Net cash used in financing activities of $136.0 million in 2019 arose primarily due to: • scheduled debt repayments of $443.1 million; • $100.0 million repayment of the Margin Loan following refinancing; • $9.1 million repayment upon the extension of the Golar Arctic facility; • payment of dividends of $65.0 million; • financing costs of $24.5 million predominately

• financing costs of $24.5 million predominately in relation to the Gimi debt facility; and • payment of $18.6 million in relation to the 1.5 million treasury shares repurchased on our equity swap in November 2019.

This was partially offset by debt proceeds drawn down of:
• $100.0 million on the new Margin Loan facility;
• $150.0 million on the term loan facility;
• $130.0 million on the Gimi facility; and
• $144.3 million in relation to our lessor VIE's.
Net cash provided by financing activities of $177.4 million in 2018 arose primarily due to proceeds of $1.2 billion from our debt facilities, including:

• $115.0 million further drawdown on the pre-delivery financing in relation to the conversion of the Hilli into a FLNG;
• $960.0 million drawdown on the post-acceptance Hilli sale and leaseback financing in relation to the Hilli Facility; and
• $101.0 million of debt proceeds drawn down by the lessor VIE, which owns the Golar Crystal, upon refinancing of its debt into a long-term loan facility. See note 5 "Variable Interest Entities" of our consolidated financial statements included herein.

This was partially offset by:
• loan repayments of $994.9 million, which includes (i) the repayment of $640.0 million on the pre-delivery financing in relation to the conversion of the Hilli into a FLNG, (ii) payment of $105.0 million in connection with the refinancing of the Golar Crystal facility mentioned above, (iii) payments of $76.9 million in connection with the Golar Tundra financing arrangement and (iv) scheduled repayments on our remaining debt facilities; and

• payment of dividends of $42.9 million.

 |
| table | | 2019    | 2018    | 2017
--------------------------------------------------------------------- | ------- | ------- | -------
(in millions of $)                                                    |         |         |
Net cash provided by/(used in) operating activities                   | 106.5   | 116.7   | (35.1)
Net cash used in investing activities                                 | (264.4) | (202.5) | (419.9)
Net cash (used in)/provided by financing activities                   | (136.0) | 177.4   | 427.4
Net (decrease) increase in cash, cash equivalents and restricted cash | (293.9) | 91.6    | (27.5)
Cash, cash equivalents and restricted cash at beginning of year       | 704.3   | 612.7   | 640.2
Cash, cash equivalents and restricted cash at end of year             | 410.4   | 704.3   | 612.7 |


| _id | d1b33e5e0 |
| title |  |
| text | Note 3: Recent Accounting Pronouncements
Recently Adopted

In May 2014, the FASB released ASU 2014-09, “Revenue from Contracts with Customers,” to supersede nearly all existing revenue recognition guidance under GAAP. The FASB issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016 and December 2016 within ASU 2015–14, ASU 2016–08, ASU 2016–10, ASU 2016–12 and ASU 2016–20, respectively; all of which in combination with ASU 2014-09 were codified as Accounting Standard Codification Topic 606 (“ASC 606”). The core

Codification Topic 606 (“ASC 606”). The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The Company adopted ASC 606 on the first day of the current fiscal year, June 25, 2018, under the modified retrospective approach, applying the amendments to prospective reporting periods. Results for reporting periods beginning on or after June

for reporting periods beginning on or after June 25, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC 605. In connection with the adoption of ASC 606, the Company’s revenue recognition policy has been amended, refer to Note 2—Summary of Significant Accounting Policies for a description of the policy.

The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet as of June 25, 2018 for the adoption of ASC 606 to all contracts with customers that were not completed as of June 24, 2018 was recorded as an adjustment to retained earnings as of the adoption date as follows:

 |
| table | | June 24, 2018 As Reported | Adjustments    | Jun e25, 2018 As Adjusted
-------------------- | ------------------------- | -------------- | -------------------------
                     |                           | (in thousands) |
Total assets         | $12,479,478               | $12,955        | $12,492,433
Deferred profit      | $720,086                  | $(160,695)     | $559,391
Total liabilities    | $5,899,435                | $(126,400)     | $5,773,035
Stockholder’s equity | $6,501,851                | $139,355       | $6,641,206 |


| _id | d1b32cbb0 |
| title |  |
| text | 4. Income Taxes
Provision for Income Taxes
Income (loss) before income tax expense is summarized below (in thousands):
(1) Includes the elimination of intercompany foreign dividends paid to the U.S.

 |
| table | |            | Fiscal Year Ended August 31, |
------------ | ---------- | ---------------------------- | ----------
             | 2019       | 2018                         | 2017
Domestic (1) | $(415,707) | $(426,897)                   | $(373,690)
Foreign (1)  | 866,411    | 800,298                      | 629,923
             | $450,704   | $373,401                     | $256,233 |


| _id | d1a72aac4 |
| title |  |
| text | Discontinued Operations
Year Ended December 31, 2019 Compared with the Years Ended December 31, 2018 and 2017

On December 31, 2018, we sold all of the Class A Common Units of Netsmart owned by the Company. Prior to the sale, Netsmart comprised a separate reportable segment, which due to its significance to our historical consolidated financial statements and results of operations, is now reported as a discontinued operation as a result of the sale for all periods presented. The loss from discontinued operations represents the net of losses incurred by Netsmart for the years ended December 31, 2018 and 2017 partly

the years ended December 31, 2018 and 2017 partly offset by earnings attributable to two solutions acquired during the fourth quarter of 2017 as part of the EIS Business that we no longer support effective as of March 31, 2018. Refer to Note 17, “Discontinued Operations” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K for additional information regarding discontinued operations.

 |
| table | | Year Ended December 31, |           |           | 2019 %           | 2018 %
------------------------------------------------------ | ----------------------- | --------- | --------- | ---------------- | ----------------
(In thousands)                                         | 2019                    | 2018      | 2017      | Change from 2018 | Change from 2017
Loss from discontinued operations                      | $ 0                     | $(72,836) | $(11,915) | (100.0%)         | NM
Gain on sale of Netsmart                               | $ 0                     | 500,471   | 0         | (100.0%)         | NM
Income tax effect on discontinued operations           | $ 0                     | (32,497)  | 42,263    | (100.0%)         | (176.9%)
Income (loss) from discontinued operations, net of tax | $ 0                     | $395,138  | $30,348   | (100.0%)         | NM |


| _id | d1b31f690 |
| title |  |
| text | Selected Current Liabilities
Current liabilities reflected in our consolidated balance sheets include accounts payable and other current liabilities as follows:
Included in accounts payable at December 31, 2019 and 2018, were (i) $106 million and $86 million, respectively, representing book overdrafts and (ii) $469 million and $434 million, respectively, associated with capital expenditures.

 |
| table | | As of December 31,    |
------------------------------- | --------------------- | -----
                                | 2019                  | 2018
                                | (Dollars in millions) |
Accounts payable                | $1,724                | 1,933
Other current liabilities:      |                       |
Accrued rent                    | $75                   | 45
Legal contingencies             | 88                    | 30
Other                           | 223                   | 282
Total other current liabilities | $386                  | 357 |


| _id | d1b3adf26 |
| title |  |
| text | 20. Borrowings and capital resources

The Group’s sources of borrowing for funding and liquidity purposes come from a range of committed bank facilities and through short-term and long-term issuances in the capital markets including bond and commercial paper issues and bank loans. We manage the basis on which we incur interest on debt between fixed interest rates and floating interest rates depending on market conditions using interest rate derivatives. The Group enters into foreign exchange contracts to mitigate the impact of exchange rate

contracts to mitigate the impact of exchange rate movements on certain monetary items.

This section includes an analysis of net debt, which is used to manage capital
Accounting policies

Interest-bearing loans and overdrafts are initially measured at fair value (which is equal to cost at inception), and are subsequently measured at amortised cost, using the effective interest rate method. Where they are identified as a hedged item in a designated fair value hedge relationship, fair value adjustments are recognised in accordance with policy (see note 21 “Capital and financial risk management”). Any difference between the proceeds net of transaction costs and the amount due on settlement or

costs and the amount due on settlement or redemption of borrowings is recognised over the term of the borrowing. Where bonds issued with certain conversion rights are identified as compound instruments they are initially measured at fair value with the nominal amounts recognised as a component in equity and the fair value of future coupons included in borrowings. These are subsequently measured at amortised cost using the effective interest rate method.

Net debt
At 31 March 2019 net debt represented 58% of our market capitalisation (2018: 46%). Average net debt at month end accounting dates over the 12-month period ended 31 March 2019 was €30.9 billion and ranged between net debt of €27.0 billion and €34.1 billion. Our consolidated net debt position at 31 March was as follows:

Notes: 1 Liabilities for payments due to holders of the equity shares in Kabel Deutschland AG under the terms of a domination and profit and loss transfer agreement are now separately disclosed in the consolidated statement of financial position and are no longer presented within short-term borrowings; gross short-term borrowings at 31 March 2018 have therefore been revised to exclude €1,838 million in respect of such liabilities.

2 At 31 March 2019 the amount includes €2,011 million (2018: €1,070 million) in relation to cash received under collateral support agreements
3 Includes €1,919 million (2018: €nil) of spectrum licence payables following the completion of recent auctions in Italy and Spain.

The fair value of the Group’s financial assets and financial liabilities held at amortised cost approximate to fair value with the exception of long-term bonds with a carrying value of €44,439 million (2018: €30,473 million) and a fair value of €43,616 million (2018: €29,724 million). Fair value is based on level 1 of the fair value hierarchy using quoted market prices.

 |
| table | | 2019 €m  | Restated1 2018 €m
---------------------------------------------------------------------------------- | -------- | -----------------
Short-term borrowings                                                              |          |
Bonds                                                                              | (53)     | (3,477)
Commercial paper                                                                   | (873)    | (2,712)
Bank loans                                                                         | (1,220)  | (1,159)
Other short-term borrowings2                                                       | (2,124)  | (1,165)
                                                                                | (4,270)  | (8,513)
Long-term borrowings                                                               |          |
Bonds                                                                              | (44,439) | (30,473)
Bank loans                                                                         | (1,780)  | (2,157)
Other long-term borrowings3                                                        | (2,466)  | (278)
                                                                                | (48,685) | (32,908)
Cash and cash equivalents                                                          | 13,637   | 4,674
Other financial instruments                                                        |          |
Derivative financial instruments included in trade and other receivables (note 14) | 3,634    | 2,629
Derivative financial instruments included in trade and other payables (note 15)    | (2,444)  | (2,383)
Short-term investments (note 13)                                                   | 11,095   | 6,870
                                                                                | 12,285   | 7,116
Net debt                                                                           | (27,033) | (29,631) |


| _id | d1b399c2e |
| title |  |
| text | 20. Geographic Information
The Group’s non-current operating assets by geographic regions are as follows:
Non-current operating assets for this purpose consist of property and equipment, goodwill, intangible assets and other non-current assets.

 |
| table | | Fiscal Year Ended June 30, |
---------------------------- | -------------------------- | --------
                             | 2019                       | 2018
                             | (U.S. $ in thousands)      |
Non-current operating assets |                            |
United States                | $819,227                   | $412,112
Australia                    | 18,842                     | 16,730
India                        | 9,286                      | —
                             | $847,355                   | $428,842 |


| _id | d1b3a59ca |
| title |  |
| text | Note 7 – Inventory
As of December 31, 2019 and 2018, inventory was comprised of the following:

Inventory reserves are established for estimated excess and obsolete inventory equal to the difference between the cost of the inventory and the estimated net realizable value of the inventory based on estimated reserve percentages, which consider historical usage, known trends, inventory age and market conditions. As of December 31, 2019 and 2018, our inventory reserve was $34.1 million and $30.0 million, respectively.

 |
| table | (In thousands)       | 2019    | 2018
-------------------- | ------- | -------
Raw materials        | $36,987 | $45,333
Work in process      | 1,085   | 1,638
Finished goods       | 60,233  | 52,877
Total Inventory, net | $98,305 | $99,848 |