| _id | d1b33d62c |
| title |  |
| text | 13. Income Taxes

On December 22, 2017, the legislation commonly known as the Tax Cuts and Jobs Act (the “TCJA” or the “Act”) was enacted into law. The Act made comprehensive changes to the U.S. tax code, including, but not limited to: (1) reducing the U.S. federal corporate tax rate from 35% to 21%; (2) changing rules related to uses and limitations of net operating loss carry-forwards created in tax years beginning after December 31, 2017 as well as the repeal of the current carryback provisions for net operating losses

carryback provisions for net operating losses arising in tax years ending after December 31, 2017; (3) immediate full expensing of certain qualified property; (4) creating a new limitation on deductible interest expense; (5) eliminating the corporate alternative minimum tax; (6) repeal of the deduction for income attributable to domestic production activities; and (7) changes in the manner in which international operations are taxed in the U.S. including a mandatory one- time transition tax on the

a mandatory one- time transition tax on the accumulated untaxed earnings of foreign subsidiaries of U.S. shareholders.

In response to the TCJA, the U.S. Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of TCJA. The purpose of SAB 118 was to address any uncertainty or diversity of view in applying ASC Topic 740, Income Taxes in the reporting period in which the TCJA was enacted. SAB 118 addresses situations where the accounting is incomplete for certain income tax effects of the TJCA upon issuance of a company’s

effects of the TJCA upon issuance of a company’s financial statements for the reporting period which include the enactment date. SAB 118 allows for a provisional amount to be recorded if it is a reasonable estimate of the impact of the TCJA. Additionally, SAB 118 allows for a measurement period to finalize the impacts of the TCJA, not to extend beyond one year from the date of enactment. For the year ended April 30, 2018, the Company recorded a provisional decrease in its deferred tax assets and

decrease in its deferred tax assets and liabilities for the reduction in the federal tax rate with a corresponding adjustment to the valuation allowance. During the year ended April 30, 2019, the Company completed the accounting for the tax effects of the TCJA with no material changes to the provisional estimate recorded in prior periods.

The TCJA also established the Global Intangible Low-Taxed Income (“GILTI”) provisions that impose a tax on foreign income in excess of a deemed return on tangible assets on foreign corporations. The Company does not anticipate being subject to GILTI due to the sale of Gillam in Fiscal 2018 and the treatment of FEI-Asia as a disregarded entity for U.S. tax purposes.
The provision for income taxes consisted of the following (in thousands):

 |
| table | | 2019   | 2018
---------------------- | ------ | -------
Current:               |        |
Federal                | $8     | $ (869)
Foreign                | 196    | -
State                  | 99     | (124)
Current provision      | 303    | (993)
Deferred:              |        |
Federal                | -      | 10,702
Foreign                | (247 ) | 267
State                  | -      | 1,200
Deferred (benefit) tax | (247 ) | 12,169
Total provision        | $56    | $11,176 |


| _id | d1b3a4aca |
| title |  |
| text | 6. Property and Equipment, Net
Property and equipment, net was comprised of the following (amounts in millions):
Depreciation expense for the years ended December 31, 2019, 2018, and 2017 was $124 million, $138 million, and $130 million, respectively.

 |
| table | | At December 31, |
------------------------------------ | --------------- | -----
                                     | 2019            | 2018
Land                                 | $1              | $1
Buildings                            | 4               | 4
Leasehold improvements               | 252             | 248
Computer equipment                   | 654             | 700
Office furniture and other equipment | 91              | 99
Total cost of property and equipment | 1,002           | 1,052
Less accumulated depreciation        | (749)           | (770)
Property and equipment, net          | $253            | $282 |


| _id | d1b332236 |
| title |  |
| text | Remaining Performance Obligation Associated with Non-Lease Arrangements
A majority of the Company’s revenue is provided over a contract term. When allocating the total contract transaction price to identified performance obligations, a portion of the total transaction price relates to performance obligations that are yet to be satisfied or are partially satisfied as of the end of the reporting period.

In determining the transaction price allocated to remaining performance obligations, the Company does not include non- recurring charges and estimates for usage.
Remaining performance obligations associated with the Company’s contracts reflect recurring charges billed, adjusted to reflect estimates for sales incentives and revenue adjustments.

The table below reflects an estimate of the remaining transaction price of fixed fee, non-lease revenue arrangements to be recognized in the future periods presented. The table below does not include estimated amounts to be recognized in future periods associated with variable usage-based consideration.

 |
| table | | Year Ended June 30, |        |        |       |       |            |
------------------ | ------------------- | ------ | ------ | ----- | ----- | ---------- | --------
                   | 2020                | 2021   | 2022   | 2023  | 2024  | Thereafter | Total
                   | (in millions)       |        |        |       |       |            |
Reportable Segment |                     |        |        |       |       |            |
Zayo Networks      | 621.4               | 295.9  | 117.4  | 36.7  | 14.1  | 17.5       | 1,103.0
zColo              | 21.7                | 11.0   | 6.2    | 3.5   | 2.5   | 2.0        | 46.9
Allstream          | 110.3               | 26.7   | 11.8   | 1.6   | 0.3   | —          | 150.7
Total              | $753.4              | $333.6 | $135.4 | $41.8 | $16.9 | $19.5      | $1,300.6 |


| _id | d1b3a6672 |
| title |  |
| text | Note 11. Other Current Assets
Other current assets consisted of the following (in thousands):

 |
| table | | December 31, |
------------------------------- | ------------ | -------
                                | 2019         | 2018
Investments held in rabbi trust | $13,927      | $11,442
Financial derivatives           | 3,373        | 1,078
Deferred rent                   | 558          | 1,867
Other current assets            | 2,667        | 2,374
                                | $20,525      | $16,761 |


| _id | d1b2ff9bc |
| title |  |
| text | Year ended December 31, 2018 compared with the year ended December 31, 2017:
Revenue in 2018 is derived from multiple license agreements that we entered into with third-parties following negotiations pursuant to our patent licensing and enforcement program. The revenue increase is primarily due to licensing revenues, as further described in "Item 1. Business" - "Licensing and Enforcement - Current Activities, Post 2013".

Cost of revenues includes contingent legal fees directly associated with our licensing and enforcement programs. Cost of revenues increased largely in proportion to increase in revenues.

Selling, general and administrative expenses ("SG&A") consisted primarily of legal fees incurred in operations and employee headcount related expenses. These comprise approximately 74% of total SG&A expense. Litigation expenses increased $4.2 million to $16.5 million in 2018 compared to 2017 and are primarily due to the timing of various outstanding litigation actions. See "Item 3. Legal Proceedings". Employee headcount related expenses increased $1.8 million to $7.2 million in 2018 compared to 2017, and

to $7.2 million in 2018 compared to 2017, and is primarily due to incentive bonuses earned during the year. The balance of SG&A expenses include consulting, other professional services, facilities and other administrative fees and expenses.

Research and Development expenses ("R&D") are primarily from our Finjan Mobile security business and increased by $0.6 million to $2.1 million in 2018 compared to 2017, as we continue to position this business for future growth.
Other income (expense) is primarily due to changes in the fair value of the warrant liability of $3.4 million in 2018 versus a benefit of $2.2 million in 2017, and interest expense of $0.6 million in 2018, net.

We recognized an income tax expense of $8.1 million on pre-tax income of $28.7 million in 2018 as compared to a benefit from the reduction in the valuation allowance of $6.2 million in 2017.

 |
| table | |       | For the Year Ended December 31,   |        |
----------------------------------- | ----- | --------------------------------- | ------ | --------
                                    | 2018  | 2017                              | Change | % Change
                                    |       | (In millions, except percentages) |        |
Revenues                            | $82.3 | $50.5                             | $31.8  | 63%
Cost of revenues                    | 15.3  | 6.0                               | 9.3    | 155%
Gross profit                        | 67.0  | 44.5                              | 22.5   | 51%
Gross margin                        | 81%   | 88%                               |        |
Operating expenses:                 |       |                                   |        |
Selling, general and administrative | 32.2  | 28.6                              | 3.6    | 13%
Research and development            | 2.1   | 1.5                               | 0.6    | 40%
Total operating expenses            | 34.3  | 30.1                              | 4.2    | 14%
Other income (expense)              | (4.0) | 2.2                               | (6.2)  | (282)%
Income before income taxes          | 28.7  | 16.6                              | 12.1   | 73%
Income tax provision (benefit)      | 8.0   | (6.2)                             | 14.2   | (229)%
Net income                          | $20.7 | $22.8                             | $(2.1) | (9)% |


| _id | d1b3a9962 |
| title |  |
| text | Accrued expenses and other consist of the following (in thousands):
At December 31, 2019 and 2018, accounts receivable, accounts payable and accrued expenses are not measured at fair value; however, the Company believes that the carrying amounts of these assets and liabilities are a reasonable estimate of their fair value because of their relative short maturity.

 |
| table | December 31,                     |        |
-------------------------------- | ------ | ------
                                 | 2019   | 2018
Accrued advertising expense      | $1,774 | $1,875
Accrued compensation expense     | 2,955  | 2,813
Reserve for member refunds       | 293    | 382
Other accrued expenses           | 2,455  | 2,266
Deferred rent                    | —      | 517
Total accrued expenses and other | $7,477 | 7,853 |


| _id | d1b3be6fa |
| title |  |
| text | Note 2. Business Acquisitions
Acquisition of Microsemi

The following unaudited pro-forma consolidated results of operations for the fiscal year ended March 31, 2019 and 2018 assume the closing of the Microsemi acquisition occurred as of April 1, 2017. The pro-forma adjustments are mainly comprised of acquired inventory fair value costs and amortization of purchased intangible assets. The pro-forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the

operations that would have been achieved if the acquisition had taken place on April 1, 2017 or of results that may occur in the future (in millions except per share data):

 |
| table | | Year Ended March 31, |
------------------------------------------ | -------------------- | --------
                                           | 2019                 | 2018
Net sales                                  | $5,563.7             | $5,875.0
Net income (loss)                          | $542.0               | $(762.3)
Basic net income (loss) per common share   | $2.29                | $(3.27)
Diluted net income (loss) per common share | $2.17                | $(3.27) |


| _id | d1b2eca42 |
| title |  |
| text | NET INCOME (LOSS) PER COMMON SHARE
Basic net income (loss) per common share is based upon the weighted-average number of common shares outstanding. Diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding and computed as follows:

* For the twelve months ended December 31, 2018, the diluted earnings per common share included the weighted average effect of 215,196 unvested Restricted Stock Units and 716,661 stock options that are potentially dilutive to earnings per share since the exercise price of such securities was less than the average market price during the period. For the twelve months ended December 31, 2017, the diluted earnings per common share included 438,712 unvested Restricted Stock Units and the weighted average

Restricted Stock Units and the weighted average effect of 477,048 stock options that are potentially dilutive to earnings per share since the exercise price of such securities was less than the average market price during the period.

 |
| table | |            | Years Ended                                     |
----------------------------------------------------- | ---------- | ----------------------------------------------- | ----------
                                                      |            | December 31,                                    |
                                                      | 2019       | 2018                                            | 2017
                                                      |            | (In thousands, except share and per share data) |
Numerator:                                            |            |                                                 |
Net income (loss) attributable to common stockholders | $(16,490)  | $19,813                                         | $17,929
Denominator:                                          |            |                                                 |
Weighted-average common shares, basic                 | 27,618,284 | 27,484,655                                      | 25,353,966
Weighted-average common shares, diluted*              | 27,618,284 | 28,416,512                                      | 26,269,727
Net income (loss) per common share:                   |            |                                                 |
Basic:                                                | $(0.60)    | $0.72                                           | $0.71
Diluted:                                              | $(0.60)    | $0.70                                           | $0.68 |


| _id | d1b36ac94 |
| title |  |
| text | ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (United States Dollars in thousands, except per share data and unless otherwise indicated)
Cash flows

Cash flows
We prepare our Consolidated Statements of Cash Flows using the indirect method, under which we reconcile net income to cash flows provided by operating activities by adjusting net income for those items that impact net income, but may not result in actual cash receipts or payments during the period. The following table provides a summary of our operating, investing and financing cash flows for the periods indicated.

 |
| table | |            | Year Ended December 31, |
----------------------------------------- | ---------- | ----------------------- | ---------
                                          | 2019       | 2018                    | 2017
Net cash provided by operating activities | $153,327   | $256,426                | $160,394
Net cash used in investing activities     | $(15,381)  | $(6,581)                | $(4,135)
Net cash used in financing activities     | $(150,604) | $(145,184)              | $(30,535) |


| _id | d1b36e98e |
| title |  |
| text | Products, Support and Professional Services
We are a leading developer and marketer of software enabled solutions and services to the hospitality industry, including: software solutions fully integrated with third party hardware and operating systems; support, maintenance and subscription services; and, professional services. Areas of specialization are point of sale, property management, and a broad range of solutions that support the ecosystem of these core solutions.

We present revenue and costs of goods sold in three categories: • Products (hardware and software) • Support, maintenance and subscription services • Professional services
Total revenue for these three specific areas is as follows:

Products: Products revenue is comprised of revenue from the sale of software along with third party hardware and operating systems. Software sales include up front revenue for licensing our solutions on a perpetual basis. Software sales are driven by our solutions' ability to help our customer meet the demands of their guests and improve operating efficiencies. Our software revenue is also driven by the ability of our customers to configure our solutions for their specific needs and the robust catalog of

their specific needs and the robust catalog of integrations we offer to third party solutions. Our software solutions require varying form factors of third party hardware and operating systems to operate, such as staff facing terminals, kiosk solutions, mobile tablets or servers. Third party hardware and operating system revenue is typically driven by new customer wins and existing customer hardware refresh purchases.

Support, Maintenance and Subscription Services: Technical software support, software maintenance and software subscription services are a significant portion of our consolidated revenue and typically generate higher profit margins than products revenue. Growth has been driven by a strategic focus on developing and promoting these offerings while market demand for maintenance services and updates that enhance reliability, as well as the desire for flexibility in purchasing options, continue to reinforce

in purchasing options, continue to reinforce this trend. Our commitment to exceptional service has enabled us to become a trusted partner with customers who wish to optimize the level of service they provide to their guests and maximize commerce opportunities both on premise and in the cloud.

Professional Services: We have industry-leading expertise in designing, implementing, integrating and installing customized solutions into both traditional and newly created platforms. For existing enterprises, we seamlessly integrate new systems and for start-ups and fast-growing customers, we become a partner that can manage large-scale rollouts and tight construction schedules. Our extensive experience ranges from staging equipment to phased rollouts as well as training staff to provide operational

as well as training staff to provide operational expertise to help achieve maximum effectiveness and efficiencies in a manner that saves our customers time and money.

 |
| table | |          | Year ended March 31, |
---------------------------------------------- | -------- | -------------------- | --------
(In thousands)                                 | 2019     | 2018                 | 2017
Products                                       | $39,003  | $33,699              | $38,339
Support, maintenance and subscription services | 75,496   | 69,068               | 63,308
Professional services                          | 26,343   | 24,593               | 26,031
Total                                          | $140,842 | $127,360             | $127,678 |


| _id | d1b332d58 |
| title |  |
| text | Information About Our Executive Officers
Set forth below are the name, age and position of each of our executive officers
The following are biographical summaries of our executive officers other than Mr. Kirchner, for whom a biographical summary is set forth under “Information about Our Board of Directors.”

Robert Andersen is executive vice president and chief financial officer of Xperi Corporation. He became executive vice president and chief financial officer of Xperi Corporation in January 2014. Prior to joining Xperi Corporation, he served as executive vice president and CFO of G2 Holdings Corp. d/b/a Components Direct. Mr. Andersen previously served as CFO at Phoenix Technologies Ltd. and held senior financial roles at Wind River Systems, Inc. and NextOffice, Inc. His

finance career began at Hewlett-Packard Company, where he served in various controller, treasury and technology finance management roles. Mr. Andersen served on the board of directors of publicly traded Quantum Corporation through March 2017. He currently serves on the board of directors of the Alameda County

Community Food Bank in the role of vice chair. Mr. Andersen holds a B.A. in economics from the University of California, Davis, and an M.B.A. from the Anderson School of Management at the University of California, Los Angeles.

Paul Davis is general counsel and corporate secretary of Xperi Corporation. He joined Xperi Corporation in August 2011, and became general counsel and corporate secretary in July 2013. Before joining Xperi Corporation, he was an attorney at Skadden, Arps, Slate, Meagher & Flom LLP, where his practice focused on mergers and acquisitions, corporate securities matters and corporate governance. Mr. Davis holds a Juris Doctor from the University of California, Hastings College of the Law and B.A. degrees in

Hastings College of the Law and B.A. degrees in history and political science from the University of California, San Diego. While at Hastings, he was magna cum laude, an Order of the Coif member and a managing editor on the Hastings Law Journal.

Murali Dharan has served as president of Tessera Intellectual Property Corp. (“Tessera”) since October of 2017 and is responsible for the strategic direction, management and growth of the Tessera intellectual property licensing business. He has extensive leadership experience, most recently as CEO of IPVALUE, guiding the company from a start-up to an industry leader and helping partners to generate more than $1.6 billion in IP revenue. Prior to joining IPVALUE in 2002,

Mr. Dharan held executive roles at various technology companies, including executive vice president at Preview Systems, vice president and general manager at Silicon Graphics, and vice president and general manager at NEC. Mr. Dharan holds an electrical engineering degree from Anna University in India, a master’s degree in computer science from Indiana University, and an MBA from Stanford University.

Geir Skaaden has served as our chief products and services officer since December 2016 and leads global sales, business development and product management for our portfolio of imaging and audio solutions. He served as DTS’s Executive Vice President, Products, Platforms and Solutions from October 2015 until its acquisition by the Company in December 2016, having previously served as DTS’s Senior Vice President, Corporate Business Development, Digital Content and Media Solutions since December 2013. Prior to

and Media Solutions since December 2013. Prior to that, Mr. Skaaden served as DTS’s Senior Vice President, Products & Platforms from April 2012 to December 2013. From 2008 to 2012, Mr. Skaaden served in a number of positions overseeing numerous aspects including strategic sales, licensing operations, and business development. Prior to joining DTS in 2008, Mr. Skaaden served as the Chief Executive Officer at Neural Audio Corporation from 2004 to 2008, where he previously served as Vice President, Corporate

he previously served as Vice President, Corporate Development from 2002 to 2004. Mr. Skaaden holds a B.A. in Finance from the University of Oregon, a Business degree from the Norwegian School of Management and an M.B.A. from the University of Washington.

We have adopted a written code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons serving similar functions. The text of our code of business conduct and ethics has been posted on our website at http://www.xperi.com. and is included as an exhibit to our Current Report on Form 8-K filed with the SEC on December 1, 2016.

 |
| table | Name            | Age | Position(s)
--------------- | --- | ------------------------------------------------
Jon Kirchner    | 52  | Chief Executive Officer, Director
Robert Andersen | 56  | Chief Financial Officer
Paul Davis      | 44  | General Counsel and Corporate Secretary
Murali Dharan   | 58  | President of Tessera Intellectual Property Corp.
Geir Skaaden    | 53  | Chief Products and Services Officer |


| _id | d1b3b5ad2 |
| title |  |
| text | Hotels sales improvement in the second half was driven by Bars, Food and Accommodation, benefitting from venue refurbishments completed in the year.

Hotels sales increased by 3.7% in F19 or 1.8% on a normalised basis. Comparable sales increased by 1.9% with 3.0% growth in Q4. Sales growth accelerated in the second half due to continued growth in Bars, Food and Accommodation benefitting from venue refurbishments with 49 completed during the year. Gaming sales continue to be more subdued, particularly in Victoria. During the year, five venues were opened or acquired with 328 hotels at year‐end.

Normalised gross profit declined by 54 bps reflecting business mix and increasing input cost prices on Food margins. CODB was well controlled and declined by 18 bps on a normalised basis.
EBIT of $261 million decreased by 0.5% on a normalised basis reflecting a weaker first half trading performance. Normalised EBIT in the second half increased by 1.3%.
Normalised ROFE decreased by 38 bps due to an increase in funds employed driven by refurbishments and acquisitions of hotels.

 |
| table | | F19      | F18      |          |
----------------------------- | -------- | -------- | -------- | -----------------
$ MILLION                     | 53 WEEKS | 52 WEEKS | CHANGE   | CHANGE NORMALISED
Sales                         | 1,671    | 1,612    | 3.7%     | 1.8%
EBITDA                        | 372      | 361      | 3.5%     | 2.5%
Depreciation and amortisation | (111)    | (102)    | 9.9%     | 9.9%
EBIT                          | 261      | 259      | 1.0%     | (0.5)%
Gross margin (%)              | 83.6     | 84.2     | (55) bps | (54) bps
Cost of doing business (%)    | 68.0     | 68.1     | (12) bps | (18) bps
EBIT to sales (%)             | 15.6     | 16.1     | (43) bps | (35) bps
Funds employed                | 2,068    | 1,995    | 3.7%     |
ROFE (%)                      | 12.9     | 13.1     | (20) bps | (38) bps |


| _id | d1b3182b4 |
| title |  |
| text | Stock-based Compensation Expense

The income tax benefit related to share-based compensation was $66 million, $158 million and $97 million for 2019, 2018 and 2017, respectively. The income tax benefits related to share-based compensation for the periods presented prior to the second quarter of 2018 were offset by an increase in the U.S. valuation allowance. Stock-based compensation expense of $30 million and $19 million was capitalized and remained in inventory as of August 29, 2019 and August 30, 2018, respectively. As of August 29, 2019,

30, 2018, respectively. As of August 29, 2019, $439 million of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the fourth quarter of 2023, resulting in a weighted-average period of 1.3 years.

 |
| table | For the year ended                                | 2019 | 2018 | 2017
------------------------------------------------- | ---- | ---- | ----
Stock-based compensation expense by caption       |      |      |
Cost of goods sold                                | $102 | $83  | $88
Selling, general, and administrative              | 73   | 61   | 75
Research and development                          | 68   | 54   | 52
                                                  | $243 | $198 | $215
Stock-based compensation expense by type of award |      |      |
Restricted stock awards                           | $178 | $140 | $144
Stock options                                     | 33   | 55   | 71
ESPP                                              | 32   | 3    | —
                                                  | $243 | $198 | $215 |


| _id | d1b2e55ee |
| title |  |
| text | NOTE 8—INVENTORIES
Inventories consist of the following (in thousands):
At September 30, 2019, work in process and inventoried costs under long-term contracts includes approximately $5.8 million in costs incurred outside the scope of work or in advance of a contract award compared to $0.9 million at September 30, 2018. We believe it is probable that we will recover the costs inventoried at September 30, 2019, plus a profit margin, under contract change orders or awards within the next year.

Costs we incur for certain U.S. federal government contracts include general and administrative costs as allowed by government cost accounting standards. The amounts remaining in inventory at September 30, 2019 and 2018 were $0.5 million and $2.0 million, respectively.

 |
| table | |            | September 30,
--------------------------------------------------------------- | ---------- | -------------
                                                                | 2019       | 2018
Finished products                                               | $10,905    | $7,099
Work in process and inventoried costs under long-term contracts | 46,951     | 63,169
Materials and purchased parts                                   | 48,938     | 23,710
Customer advances                                               | —          | (9,779)
Net inventories                                                 | $  106,794 | $  84,199 |


| _id | d1b347a32 |
| title |  |
| text | Summarised cash flow statement
Cash flow
We generated a net cash inflow from operating activities of £4,256m, down £671m, mainly driven by £2bn contributions to the BT Pension Scheme, offset by favourable working capital movements. In line with our outlook, normalised free cash flowb was £2,440m, down £533m or 18%, driven by increased cash capital expenditure, decrease in EBITDA and higher tax payments.

Free cash flow, which includes specific item outflows of £598m (2017/18: £828m) and a £273m (2017/18: £109m) tax benefit from pension deficit payments, was £619m (2017/18: £1,586m). Last year also included payments of £325m for the acquisition of mobile spectrum.

The spectrum auction bidding took place across the 2017/18 and 2018/19 financial years. Whilst £325m was on deposit with Ofcom at 31 March 2018, we went on to acquire spectrum for a total price of £304m and the excess deposit balance has since been refunded. We made pension deficit payments of £2,024m (2017/18: £872m) and paid dividends to our shareholders of £1,504m (2017/18: £1,523m).

The net cash cost of specific items of £598m (2017/18: £828m) includes restructuring payments of £372m (2017/18: £189m) and regulatory payments of £170m (2017/18: £267m). Last year also included payments of £225m relating to the settlement of warranty claims under the 2015 EE acquisition agreement.
b After net interest paid, before pension deficit payments (including the cash tax benefit of pension deficit payments) and specific items.

 |
| table | | 2019    | 2018    | 2017
------------------------------------------------------------------ | ------- | ------- | -------
Year ended 31 March                                                | £m      | £m      | £m
Cash generated from operations                                     | 4,687   | 5,400   | 6,725
Tax paid                                                           | (431)   | (473)   | (551)
Net cash inflows from operating activities                         | 4,256   | 4,927   | 6,174
Net purchase of property, plant and equipment and software         | (3,637) | (3,341) | (3,119)
Free cash flow                                                     | 619     | 1,586   | 3,055
Interest received                                                  | 23      | 7       | 7
Interest paid                                                      | (531)   | (555)   | (629)
Add back pension deficit payments                                  | 2,024   | 872     | 274
Add back net cash flow from specific items                         | 598     | 828     | 205
Add back net sale of non-current asset investments                 | 1       | 19      | (20)
Add back prepayments in respect of acquisition of spectrum licence | -       | 325     | -
Remove refund on acquisition of spectrum licence                   | (21)    | -       | -
Remove cash tax benefit of pension deficit payments                | (273)   | (109)   | (110)
Normalised free cash flow b                                        | 2,440   | 2,973   | 2,782 |


| _id | d1b3bfd5c |
| title |  |
| text | The table below shows the carrying amounts and estimated fair values of our debt, excluding lease liabilities:
(1) Includes borrowings denominated in currencies other than US Dollars.
(2) At December 31, 2019, the carrying amount and estimated fair value of debt exclude lease liabilities.

In addition to the table above, the Company remeasures amounts related to certain equity compensation that are carried at fair value on a recurring basis in the Consolidated Financial Statements or for which a fair value measurement was required. Refer to Note 21, “Stockholders’ Deficit,” of the Notes to Consolidated Financial Statements for share-based compensation in the Notes to Consolidated Financial Statements. Included among our non-financial assets and liabilities that are not required to be

and liabilities that are not required to be measured at fair value on a recurring basis are inventories, net property and equipment, goodwill, intangible assets and asset retirement obligations.

 |
| table | | December 31, 2019 |            | December 31, 2018 |
---------------------------------------- | ----------------- | ---------- | ----------------- | ----------
(In millions)                            | Carrying Amount   | Fair Value | Carrying Amount   | Fair Value
Term Loan A Facility due July 2022       | $ 474.6           | $ 474.6    | $ —               | $ —
Term Loan A Facility due July 2023(1)    | 223.8             | 223.8      | 222.2             | 222.2
6.50% Senior Notes due December 2020     | —                 | —          | 424.0             | 440.1
4.875% Senior Notes due December 2022    | 421.9             | 450.1      | 421.1             | 421.2
5.25% Senior Notes due April 2023        | 422.0             | 454.1      | 421.2             | 424.5
4.50% Senior Notes due September 2023(1) | 445.6             | 509.5      | 454.9             | 489.9
5.125% Senior Notes due December 2024    | 421.9             | 458.9      | 421.3             | 419.8
5.50% Senior Notes due September 2025    | 397.4             | 441.2      | 397.1             | 394.8
4.00% Senior Notes due December 2027     | 420.4             | 431.5      | —                 | —
6.875% Senior Notes due July 2033        | 445.7             | 528.8      | 445.5             | 453.4
Other foreign borrowings(1)              | 12.1              | 12.4       | 98.5              | 99.2
Other domestic borrowings                | 89.0              | 89.0       | 168.4             | 170.0
Total debt(2)                            | $ 3,774.4         | $ 4,073.9  | $ 3,474.2         | $ 3,535.1 |


| _id | d1b325f2c |
| title |  |
| text | 35 Related party transactions
Key management1 compensation
1 Key management comprises the directors of intu properties plc and the Executive Committee who have been designated as persons discharging managerial responsibility (PDMR).

During 2017 the Group’s joint ventures in intu Puerto Venecia and intu Asturias sold shares in subsidiaries, previously wholly owned by the respective joint ventures, listed on the Spanish MaB to PDMRs of the Group. The total value of the shares at 31 December 2019 is €1.0 million for each joint venture, representing 1 per cent of the respective outstanding share capital. The sale of shares in these entities was required to comply with Spanish MaB free float listing requirements. The Group provided an

float listing requirements. The Group provided an interest-free loan to PDMRs to enable them to purchase the shares. The loans are treated as a taxable benefit which accordingly is included in the above table. In line with the terms of the relevant loan agreements entered into, the loans are repayable in full upon cessation of employment or the sale of the underlying assets. Further to the exchange of contracts in respect of the sale of intu Puerto Venecia in December 2019 and of intu Asturias in January

in December 2019 and of intu Asturias in January 2020, the relevant PDMRs sold these shareholdings in January 2020 and February 2020 respectively. All outstanding loans in respect of the above arrangements have been repaid to the Company in full or in part. For those loans which have been partially repaid, the outstanding balance has been written off by the Company.

 |
| table | Key management1 compensation                |      |
------------------------------------------- | ---- | ----
£m                                          | 2019 | 2018
Salaries and short-term employee benefits   | 4.7  | 4.9
Pensions and other post-employment benefits | 0.3  | 0.8
Share-based payments                        | 1.5  | 1.7
                                            | 6.5  | 7.4 |


| _id | d1b31236e |
| title |  |
| text | Cloud & Cognitive Software revenue increased in 2018 compared to the prior year with growth in all three lines of business, as reported and adjusted for currency. Within Cognitive Applications, the increase was driven by strong double-digit growth in security services, while growth in Cloud & Data Platforms was led by analytics platforms and integration offerings. Transaction Processing Platforms grew with improved revenue performance sequentially in the fourth-quarter 2018 versus the third-quarter 2018

fourth-quarter 2018 versus the third-quarter 2018 reflecting clients’ commitment to the company’s platform for the long term and the value it provides in managing mission-critical workloads. Within Cloud & Cognitive Software, cloud revenue of $3.0 billion grew 10 percent as reported and adjusted for currency compared to the prior year.

* Recast to reflect segment changes.
Gross margin in Cloud & Cognitive Software was impacted by an increased mix toward SaaS, a mix toward security services and increased royalty costs associated with IP licensing agreements compared to the prior year. Pre-tax income improvement year to year was primarily driven by operational efficiencies and mix.

 |
| table | ($ in millions)                 |         |         |
------------------------------- | ------- | ------- | ---------------------------------
For the year ended December 31: | 2018*   | 2017*   | Yr.-to-Yr. Percent/ Margin Change
Cloud & Cognitive Software      |         |         |
External gross profit           | $17,224 | $16,986 | 1.4%
External gross profit margin    | 77.6%   | 78.1%   | (0.5)pts.
Pre-tax income                  | $8,882  | $8,068  | 10.1%
Pre-tax margin                  | 35.0%   | 32.4%   | 2.6pts. |


| _id | d1b3458e0 |
| title |  |
| text | GasLog Ltd. and its Subsidiaries
Notes to the consolidated financial statements (Continued)
For the years ended December 31, 2017, 2018 and 2019
(All amounts expressed in thousands of U.S. Dollars, except share and per share data)
21. Related Party Transactions (Continued)
Compensation of key management personnel
The remuneration of directors and key management was as follows:

 |
| table | |       | For the year ended December 31, |
--------------------------------------------------------- | ----- | ------------------------------- | -----
                                                          | 2017  | 2018                            | 2019
Remuneration                                              | 7,603 | 7,011                           | 7,536
Short-term benefits                                       | 106   | 136                             | 172
Expense recognized in respect of share-based compensation | 1,821 | 1,992                           | 2,044
Total                                                     | 9,530 | 9,139                           | 9,752 |


| _id | d1b3685de |
| title |  |
| text | 4. Income Taxes
Provision for Income Taxes
Income tax expense (benefit) is summarized below (in thousands):

 |
| table | |           | Fiscal Year Ended August 31, |
------------------------ | --------- | ---------------------------- | --------
                         | 2019      | 2018                         | 2017
Current:                 |           |                              |
Domestic–federal         | $(23,675) | $69,080                      | $2,436
Domestic–state           | 1,383     | 134                          | 12
Foreign                  | 175,993   | 178,790                      | 188,872
Total current            | 153,701   | 248,004                      | 191,320
Deferred:                |           |                              |
Domestic–federal         | (8,000)   | (24,342)                     | 253
Domestic–state           | (2,202)   | 93                           | 30
Foreign                  | 17,731    | 62,105                       | (62,537)
Total deferred           | 7,529     | 37,856                       | (62,254)
Total income tax expense | $161,230  | $285,860                     | $129,066 |


| _id | d1b3ad134 |
| title |  |
| text | Our net sales to significant customers as a percentage of total net sales were as follows:
We sell parts to these three transportation customers for certain vehicle platforms under purchase agreements that have no volume commitments and are subject to purchase orders issued from time to time.
No other customer accounted for 10% or more of total net sales during these periods. We continue to focus on broadening our customer base to diversify our end market exposure.

Changes in the level of our customers' orders have, in the past, had a significant impact on our operating results. If a major customer reduces the amount of business it does with us, or substantially changes the terms of that business, there could be an adverse impact on our operating results

 |
| table | |       | Years Ended December 31, |
------------------------ | ----- | ------------------------ | -----
                         | 2019  | 2018                     | 2017
Cummins Inc.             | 16.1% | 15.2%                    | 13.4%
Honda Motor Co.          | 11.6% | 10.5%                    | 11.2%
Toyota Motor Corporation | 9.6%  | 10.5%                    | 10.2% |


| _id | d1b3061a4 |
| title |  |
| text | Financial Condition, Liquidity and Capital Resources

We believe our current world-wide cash balances together with expected future cash flows to be generated from operations and our committed credit facility will be sufficient to support current operations. A significant amount of cash and expected future cash flows are located outside of the U.S. Of the $83.2 million of cash and cash equivalents as of April 27, 2019, $69.9 million was held in subsidiaries outside the U.S. and can be repatriated, primarily through the repayment of intercompany loans and the

the repayment of intercompany loans and the payment of dividends, without creating material additional income tax expense.

Cash flow is summarized below:
Operating Activities — Fiscal 2019 Compared to Fiscal 2018

Net cash provided by operating activities decreased $15.8 million to $102.0 million for fiscal 2019, compared to $117.8 million for fiscal 2018. The decrease was due to lower cash generated from changes in operating assets and liabilities, partially offset by higher net income adjusted for non-cash items. The $42.2 million of cash outflows for operating assets and liabilities was primarily due to higher prepaid expenses and other assets and lower accounts payable and accrued expenses.

Operating Activities — Fiscal 2018 Compared to Fiscal 2017

Net cash provided by operating activities decreased $27.4 million to $117.8 million in fiscal 2018, compared to $145.2 million in fiscal 2017. The decrease was primarily due to lower net income adjusted for non-cash items, partially offset by cash generated from changes in operating assets and liabilities. The $43.6 million of cash inflows for operating assets and liabilities was due to higher accounts payable and accrued expenses and lower prepaid expenses and other assets, offset by higher inventory

and other assets, offset by higher inventory levels.

Investing Activities — Fiscal 2019 Compared to Fiscal 2018
Net cash used in investing activities increased by $291.8 million to $470.8 million in fiscal 2019, compared to $179.0 million in fiscal 2018, primarily due to acquisitions. In fiscal 2019, we paid $422.1 million for the acquisition of Grakon. In fiscal 2018, we paid $130.9 million for the acquisitions of Pacific Insight and Procoplast.
Investing Activities — Fiscal 2018 Compared to Fiscal 2017

Net cash used in investing activities increased by $157.3 million to $179.0 million in fiscal 2018, compared to $21.7 million in fiscal 2017. The increase was primarily due to $130.9 million paid for the acquisitions of Pacific Insight and Procoplast. In addition, purchases of property, plant and equipment for our operations were higher in fiscal 2018 compared to fiscal 2017.
Financing Activities — Fiscal 2019 Compared to Fiscal 2018

Net cash provided by financing activities was $217.4 million in fiscal 2019, compared to net cash used in financing activities of $12.7 million in fiscal 2018. During fiscal 2019, we had net borrowings of $238.5 million which was partially used to fund the acquisition of Grakon. We paid dividends of $16.3 million in fiscal 2019, compared to $14.7 million in fiscal 2018.
Financing Activities — Fiscal 2018 Compared to Fiscal 2017

Net cash used in financing activities decreased $34.3 million to $12.7 million in fiscal 2018, compared to $47.0 million in fiscal 2017. During fiscal 2018, we had net borrowings of $2.0 million, compared to repayments on borrowings of $30.0 million in fiscal 2017. We paid dividends of $14.7 million and $13.7 million in fiscal 2018 and fiscal 2017, respectively. We did not repurchase any common stock in fiscal 2018. In fiscal 2017, we paid $9.8 million for the repurchase of common stock.

 |
| table | |           | Fiscal Year Ended |
------------------------------------------------------------ | --------- | ----------------- | ---------
                                                             | April 27, | April 28,         | April 29,
(Dollars in Millions)                                        | 2019      | 2018              | 2017
Operating activities:                                        |           |                   |
Net Income                                                   | $91.6     | $57.2             | $92.9
Non-cash Items                                               | 52.6      | 17.0              | 32.1
Changes in Operating Assets and Liabilities                  | (42.2)    | 43.6              | 20.2
Net Cash Provided by Operating Activities                    | 102.0     | 117.8             | 145.2
Net Cash Used in Investing Activities                        | (470.8)   | (179.0)           | (21.7)
Net Cash Provided by (Used In) Financing Activities          | 217.4     | (12.7)            | (47.0)
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (11.5)    | 26.0              | (10.3)
Net Increase (Decrease) in Cash and Cash Equivalents         | (162.9)   | (47.9)            | 66.2
Cash and Cash Equivalents at Beginning of the Year           | 246.1     | 294.0             | 227.8
Cash and Cash Equivalents at End of the Year                 | $83.2     | $246.1            | $294.0 |


| _id | d1b37ee24 |
| title |  |
| text | The significant components of the Company’s deferred income tax assets and liabilities as of December 31, 2019 and 2018 are as follows:

In July 2019, the Company formally established its EMEA headquarters in Ireland and its Asia-Pacific headquarters in Singapore. As a result of these actions, the Company transferred regional relationship and territory rights from its Canadian entity to enable each regional headquarters to develop and maintain merchant and commercial operations within its respective region, while keeping the ownership of all of the Company's current developed technology within Canada. These transfers reflect the growing

Canada. These transfers reflect the growing proportion of the Company's business occurring internationally and resulted in a one-time capital gain. As a result of the capital gain, ongoing operations, the recognition of deferred tax assets and liabilities, and the utilization of all applicable credits and other tax attributes, including loss carryforwards, the Company has a provision for income taxes of $29,027 in the year ended December 31, 2019.

During the year ended December 31, 2019, the Company released some of its valuation allowance against its deferred tax assets in Canada, the United States, and Sweden. In the third quarter of 2019, the Company released a portion of its valuation allowance against its Canadian deferred tax assets as a result of the capital gain from the transfer of the regional relationship and territory rights. In the United States, as a result of the acquisition of 6RS the Company released a portion of its valuation

the Company released a portion of its valuation allowance during its fourth quarter against deferred tax assets on its United States net operating losses.

The Company has provided for deferred income taxes for the estimated tax cost of distributable earnings of its subsidiaries of $292.
The Company had no material uncertain income tax positions for the years ended December 31, 2019 and 2018. The Company's accounting policy is to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. In the years ended December 31, 2019 and 2018, there was no interest or penalties related to uncertain tax positions.

The Company remains subject to audit by the relevant tax authorities for the years ended 2012 through 2019.
Investment tax credits, which are earned as a result of qualifying R&D expenditures, are recognized and applied to reduce income tax expense in the year in which the expenditures are made and their realization is reasonably assured.

As at December 31, 2019 and 2018, the Company had unused non-capital tax losses of approximately $209,759 and $53,941 respectively. Of the December 31, 2019 balance, $150,707 of the non-capital tax losses do not expire, while the remaining non-capital losses of $59,052 are due to expire between 2033 and 2039. The Company has U.S. state losses of $298,998 as at December 31, 2019 (December 31, 2018 - $116,026). There is no SR&ED expenditure pool balance as at December 31, 2019 (December 31, 2018 - $9,575).

December 31, 2019 (December 31, 2018 - $9,575). In addition, at December 31, 2019 and 2018, the Company had investment tax credits of $2,111 and $4,179, respectively. The investment tax credits are due to expire between 2035 and 2039.

Expressed in US $000's except share and per share amounts

 |
| table | | December 31, 2019 | December 31, 2018
------------------------------------------------------------- | ----------------- | -----------------
                                                              | $                 | $
Deferred tax assets                                           |                   |
Tax loss carryforwards                                        | 59,407            | 19,540
Temporary differences on capital and intangible assets        | 44,445            | 2,366
Stock-based compensation expense                              | 11,324            | 6,427
Accruals and reserves                                         | 10,397            | 8,384
Share issuance costs                                          | 6,590             | 8,011
Temporary differences related to lease assets and liabilities | 4,526             | —
Investment tax credits                                        | 694               | 5,833
Valuation allowance                                           | (89,363)          | (46,343)
Total deferred tax assets                                     | 48,020            | 4,218
Deferred tax liabilities                                      |                   |
Temporary differences on intangible assets                    | (35,967)          | (5,350)
Other deferred tax liabilities                                | (1,374)           | —
Total deferred tax liabilities                                | (37,341)          | (5,350)
Net deferred tax assets (liabilities)                         | 10,679            | (1,132) |


| _id | d1b36c97c |
| title |  |
| text | Item 6. Selected Financial Data
Five-Year Financial Summary in millions, except per share data (Fiscal years ended June 30,)
(a) Fiscal year 2019 included $1.2 million of acquisition-related costs related to LPW Technology Ltd. See Note 4 in the Notes to the Consolidated Financial Statements included in Item 8. “Financial Statements and Supplementary Data” of this report.

(b) Fiscal year 2018 included $68.3 million of discrete income tax net benefits related to the U.S. tax reform and other legislative changes. See Note 17 in the Notes to the Consolidated Financial Statements included in Item 8. “Financial Statements and Supplementary Data” of this report.

(c) Fiscal year 2017 included $3.2 million of loss on divestiture of business. See Note 4 in the Notes to the Consolidated Financial Statements included in Item 8. "Financial Statements and Supplementary Data" of this report.

(d) Fiscal year 2016 included $22.5 million of excess inventory write-down charges, $12.5 million of goodwill impairment charges and $18.0 million of restructuring and impairment charges including $7.6 million of impairment of intangible assets and property, plant and equipment and $10.4 million of restructuring costs related primarily to an early retirement incentive and other severance related costs.

(e) Fiscal year 2015 included $29.1 million of restructuring costs related principally to workforce reduction, facility closures and write-down of certain assets.

(f) The weighted average common shares outstanding for fiscal years 2016 and 2015 included 5.5 million and 0.9 million less shares, respectively, related to the share repurchase program authorized in October 2014. During the fiscal years ended June 30, 2016 and 2015, we repurchased 3,762,200 shares and 2,995,272 shares, respectively, of common stock for $123.9 million and $124.5 million, respectively.

See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for discussion of factors that affect the comparability of the “Selected Financial Data”.

 |
| table | | 2019 (a) | 2018(b)  | 2017(c)  | 2016(d)(f) | 2015 (e)(f)
------------------------------------------- | -------- | -------- | -------- | ---------- | -----------
Summary of Operations:                      |          |          |          |            |
Net sales                                   | $2,380.2 | $2,157.7 | $1,797.6 | $1,813.4   | $2,226.7
Operating income                            | $241.4   | $189.3   | $121.5   | $70.8      | $119.3
Net income                                  | $167.0   | $188.5   | $47.0    | $11.3      | $58.7
Financial Position at Year-End:             |          |          |          |            |
Cash and cash equivalents                   | $27.0    | $56.2    | $66.3    | $82.0      | $70.0
Total assets                                | $3,187.8 | $3,007.0 | $2,878.1 | $2,794.3   | $2,902.6
Long-term debt, net of current portion      | $550.6   | $545.7   | $550.0   | $611.3     | $603.8
Per Common Share:                           |          |          |          |            |
Net earnings:                               |          |          |          |            |
Basic                                       | $3.46    | $3.96    | $0.99    | $0.23      | $1.11
Diluted                                     | $3.43    | $3.92    | $0.99    | $0.23      | $1.11
Cash dividend-common                        | $0.80    | $0.72    | $0.72    | $0.72      | $0.72
Weighted Average Common Shares outstanding: |          |          |          |            |
Basic                                       | 47.7     | 47.2     | 47.0     | 48.1       | 52.6
Diluted                                     | 48.1     | 47.6     | 47.1     | 48.2       | 52.7 |


| _id | d1b378fa6 |
| title |  |
| text | We do not allocate to our operating segments certain operating expenses that we manage separately at the corporate level and are not used in evaluating the results of, or in allocating resources to, our segments. These unallocated expenses consist primarily of stock-based compensation expense; amortization of intangible assets; restructuring, transition and other costs; and acquisition-related costs.

The following table provides a reconciliation of our total reportable segments’ operating income to our total operating income (loss):

 |
| table | |                | Year Ended     |
--------------------------------------------------------------------- | -------------- | -------------- | --------------
(In millions)                                                         | March 29, 2019 | March 30, 2018 | March 31, 2017
Total segment operating income                                        | $1,414         | $1,584         | $1,026
Reconciling items:                                                    |                |                |
Stock-based compensation expense                                      | 352            | 610            | 440
Amortization of intangible assets                                     | 443            | 453            | 293
Restructuring, transition and other costs                             | 241            | 410            | 273
Acquisition-related costs                                             | 3              | 60             | 120
Other                                                                 | (5)            | 2              | -
Total consolidated operating income (loss) from continuing operations | $380           | $49            | $(100) |


| _id | d1b3bedf8 |
| title |  |
| text | 7. Property, Plant, and Equipment, Net
Net property, plant, and equipment consisted of the following:
Depreciation expense was $510 million, $487 million, and $442 million in fiscal 2019, 2018, and 2017, respectively.

 |
| table | |          | Fiscal Year End
-------------------------------------- | -------- | ---------------
                                       | 2019     | 2018
                                       |          | (in millions)
Property, plant, and equipment, gross: |          |
Land and improvements                  | $  152   | $  171
Buildings and improvements             | 1,393    | 1,379
Machinery and equipment                | 7,298    | 7,124
Construction in process                | 637      | 724
                                       | 9,480    | 9,398
Accumulated depreciation               | (5,906)  | (5,901)
Property, plant, and equipment, net    | $  3,574 | $  3,497 |


| _id | d1b391f92 |
| title |  |
| text | Note 12 – Income Taxes
The provision for income taxes consists of the following for the fiscal years ended December 27, 2019, December 28, 2018 and December 29, 2017:

 |
| table | | December 27, 2019  | December 28, 2018  | December 29, 2017
------------------------------------------- | ------------------ | ------------------ | -----------------
Current income tax expense:                 |                    |                    |
Federal                                     | $4,003             | $2,945             | $3,342
State                                       | 2,144              | 1,943              | 1,403
Total current income tax expense            | 6,147              | 4,888              | 4,745
Deferred income tax expense (benefit):      |                    |                    |
Federal                                     | 1,617              | 2,363              | (1,059)
Foreign                                     | 17                 | (472)              | 215
State                                       | 429                | 663                | 141
Total deferred income tax expense (benefit) | 2,063              | 2,554              | (703)
Total income tax expense                    | $8,210             | $7,442             | $4,042 |


| _id | d1a740248 |
| title |  |
| text | Key Business Metrics
In addition to the measures presented in our consolidated financial statements, we use the following key metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions.
Devices Sold

Devices sold represents the number of wearable devices that are sold during a period, net of expected returns. Devices sold does not include sales of accessories. Growth rates between devices sold and revenue are not necessarily correlated because our revenue is affected by other variables, such as the types of products sold during the period, the introduction of new product offerings with differing U.S. manufacturer’s suggested retail prices, or MSRPs, and sales of accessories and premium services.

Active Users

We grow our community of users through device sales and investment in software to drive engagement. We define an active user as a registered Fitbit user who, within the three months prior to the date of measurement, has (a) an active Fitbit Premium or Fitbit Coach subscription, (b) paired a wearable device or Aria scale with his or her Fitbit account, or (c) logged at least 100 steps with a wearable device or a weight measurement using an Aria scale. Active users can be new users who joined the community

users can be new users who joined the community during the past 90 days, existing users who have remained active, or previously active users who were inactive for 90 days or greater, if they meet the preceding definition of an active user. The active user number excludes users who have downloaded our mobile apps without purchasing any of our wearable devices and users who have downloaded free versions of Fitbit Coach but are not subscribers to its paid premium offerings.

 |
| table | |            | For the Year Ended or As of December 31, |
--------------- | ---------- | ---------------------------------------- | ---------
                | 2019       | 2018                                     | 2017
                |            | (in thousands)                           |
Devices sold    | 15,988     | 13,939                                   | 15,343
Active users    | 29,566     | 27,627                                   | 25,367
Adjusted EBITDA | $(128,333) | $(31,361)                                | $(52,158)
Free cash flow  | $(193,363) | $60,327                                  | $(24,919) |


| _id | d1b3927b2 |
| title |  |
| text | 10 Auditor’s Remuneration
The Group paid the following amounts to its auditor in respect of the audit of the historical financial information and for other non-audit services provided to the Group.

 |
| table | | Year-ended 31 March 2019 | Year-ended 31 March 2018
--------------------------------- | ------------------------ | ------------------------
                                  | $M                       | $M
Audit of the Financial Statements | 0.4                      | 0.4
Subsidiary local statutory audits | 0.2                      | 0.3
Total audit fees                  | 0.6                      | 0.7
Other assurance services          | 0.1                      | 0.1
Total non-audit fees              | 0.1                      | 0.1 |


| _id | d1b3493e6 |
| title |  |
| text | 26 Operating leases
The Group earns rental income by leasing its investment properties to tenants under operating leases.

In the UK the standard shopping centre lease is for a term of 10 to 15 years. Standard lease provisions include service charge payments, recovery of other direct costs and review every five years to market rent. Standard turnover-based leases have a turnover percentage agreed with each lessee which is applied to a retail unit’s annual sales and any excess between the resulting turnover rent and the minimum rent is receivable by the Group and recognised as income in the period in which it arises.

The Group’s secure rental income profile is underpinned by long lease lengths (as mentioned above), high occupancy and upward only rent reviews.
The future minimum lease amounts receivable by the Group under non-cancellable operating leases for continuing operations are as follows:
The income statement includes £12.7 million (2018: £14.4 million) recognised in respect of contingent rents calculated by reference to tenants’ turnover.

 |
| table | £m                                                | 2019    | 2018
------------------------------------------------- | ------- | -------
Not later than one year                           | 322.6   | 374.6
Later than one year and not later than five years | 788.3   | 987.2
Later than five years                             | 657.3   | 973.5
                                                  | 1,768.2 | 2,335.3 |


| _id | d1b33fab2 |
| title |  |
| text | Note 5 – Goodwill and Intangible Assets
Goodwill and indefinite-lived intangible assets consisted of the following:
Goodwill

The Company performed the annual impairment assessment of goodwill for our single reporting unit as of December 31, 2019, noting no impairment loss. The fair value exceeded the carrying value by 2.4%. Considerable management judgment is necessary to evaluate goodwill for impairment. We estimate fair value using widely accepted valuation techniques including discounted cash flows and market multiples analysis with respect to our single reporting unit. These valuation approaches are dependent upon a number

valuation approaches are dependent upon a number of factors, including estimates of future growth rates, our cost of capital, capital expenditures, income tax rates, and other variables. Assumptions used in our valuations were consistent with our internal projections and operating plans. Our discounted cash flows forecast could be negatively impacted by a change in the competitive landscape, any internal decisions to pursue new or different strategies, a loss of a significant customer, or a significant

loss of a significant customer, or a significant change in the market place including changes in the prices paid for our products or changes in the size of the market for our products. Additionally, under the market approach analysis, we used significant other observable inputs including various guideline company comparisons. We base our fair value estimates on assumptions we believe to be reasonable, but which are unpredictable and inherently uncertain. Changes in these estimates or assumptions could

Changes in these estimates or assumptions could materially affect the determination of fair value and the conclusions of the quantitative goodwill test for our one reporting unit.

Indefinite-lived Intangible Assets
The Company performed the annual impairment assessment on the indefinite-lived intangible asset as of December 31, 2019 and 2018, resulting in no impairment losses.

 |
| table | |          | December 31,
----------------------------------------------- | -------- | ------------
                                                | 2019     | 2018
Goodwill                                        | $ 10,368 | $ 10,368
Accumulated impairment losses                   | (1,244 ) | (1,244 )
Goodwill                                        | 9,124    | 9,124
Brand names                                     | 3,700    | 3,700
Goodwill and indefinite lived intangible assets | $ 12,824 | $ 12,824 |


| _id | d1b353c42 |
| title |  |
| text | As of December 31, 2019 and 2018, the fair value of the 2022 Notes, which was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, quoted price of the 2022 Notes in an over-the-counter market (Level 2), and carrying value of debt instruments (carrying value excludes the equity component of the Company’s convertible notes classified in equity) were as follows (in thousands):

In connection with the issuance of the 2022 Notes, the Company entered into capped call transactions with certain counterparties affiliated with the initial purchasers and others. The capped call transactions are expected to reduce potential dilution of earnings per share upon conversion of the 2022 Notes.

Under the capped call transactions, the Company purchased capped call options that in the aggregate relate to the total number of shares of the Company’s common stock underlying the 2022 Notes, with an initial strike price of approximately $33.71 per share, which corresponds to the initial conversion price of the 2022 Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the 2022 Notes, and have a cap price of approximately $47.20.

The cost of the purchased capped calls of $12.9 million was recorded to shareholders’ equity and will not be re-measured.
Based on the closing price of the Company’s common stock of $78.08 on December 31, 2019, the if-converted value of the 2022 Notes was more than their respective principal amounts.

 |
| table | |            | As of December 31, |            |
---------- | ---------- | ------------------ | ---------- | --------------
           | 2019       |                    | 2018       |
           | Fair Value | Carrying Value     | Fair Value | Carrying Value
2022 Notes | $215,801   | $79,224            | $ 189,802  | $94,097 |


| _id | d1a722f4a |
| title |  |
| text | 4 Expenses
The Group has identified a number of significant expense items below that impacted financial performance for the year:
(a) Finance costs
Included in finance costs are costs related to unsecured notes on issue and interest expense on lease liabilities.
Refer to note 16 for details on unsecured notes on issue and note 12 for details on interest expense on lease liabilities for the year.
(b) Data centre rent paid to APDC

NEXTDC Limited acquired Asia Pacific Data Centre ("APDC") on 18 October 2018 (refer to note 26). Prior to acquisition, APDC was the landlord of three of NEXTDC’s data centre facilities: M1 Melbourne, S1 Sydney and P1 Perth. For the year ended 30 June 2018, NEXTDC paid rent and ancillary amounts to APDC totalling $13.8 million that was included in the Consolidated Statement of Comprehensive Income in Data centre facility costs. On early adoption of AASB 16 from 1 July 2018, this rent ceased to be a Data

from 1 July 2018, this rent ceased to be a Data centre facility cost, and became a depreciation expense and finance cost, until 18 October 2018, when the three leases were derecognised on acquisition.

(c) APDC acquisition costs
A number of acquisition related costs were incurred as a result of the acquisition of APDC. Refer note 26 for further details.

 |
| table | |      | 30 June 2019 | 30 June 2018
-------------------------------------------------------------------------------------------------- | ---- | ------------ | ------------
                                                                                | Note | $'000        | $'000
EXPENSE                                                                                |      |              |
Finance costs                                                                                | 4(a) | (54,897)     | (25,803)
Data centre rent paid to APDC (included in Data centre facility costs)                             | 4(b) | -            | (13,785)
APDC transaction costs (included in Professional fees)                                             | 4(c) | (5,459)      | -
Landholder duty on acquisition of APDC properties (included in Office and administrative expenses) | 4(c) | (3,498)      | - |


| _id | d1a739434 |
| title |  |
| text | 3. Operating segments continued
Note
1. Non-current assets excludes trade and other receivables, assets recognised from costs to obtain a contract, defined benefit pension plan surplus and deferred tax asset.
Europe, Middle East and Africa includes United Kingdom non-current assets of $6.9 million (2018 $2.0 million). Americas includes United States non-current assets of $182.4 million (2018 $171.1 million).

 |
| table | | 2019      | 2018
------------------------------ | --------- | ---------
                               | $ million | $ million
Non-current assets1            |           |
Americas                       | 196.9     | 184.6
Asia Pacific                   | 7.4       | 4.4
Europe, Middle East and Africa | 11.5      | 5.1
                               | 215.8     | 194.1 |


| _id | d1b3373e4 |
| title |  |
| text | Unrecognized Tax Benefits
We recognize the benefits of tax return positions if we determine that the positions are “more-likely-than-not” to be sustained by the taxing authority. Interest and penalties accrued on unrecognized tax benefits are recorded as tax expense in the period incurred. The following table reflects changes in the unrecognized tax benefits (in thousands):
Of the unrecognized tax benefits at December 28, 2019, $13.4 million would impact the effective tax rate if recognized.

The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities which might result in proposed assessments. Our estimate for the potential outcome for any uncertain tax issue is judgmental in nature. However, we believe we have adequately provided for any reasonably foreseeable outcome related to those matters.

Our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. As of December 28, 2019, changes to our uncertain tax positions in the next 12 months that are reasonably possible are not expected to have a significant impact on our financial position or results of operations.

At December 28, 2019, our tax years 2016 through 2019, 2015 through 2019 and 2014 through 2019, remain open for examination in the federal, state and foreign jurisdictions, respectively. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses and credits were generated and carried forward, and make adjustments up to the net operating loss and credit carryforward amounts.

 |
| table | |                   | Fiscal Year Ended |
---------------------------------------------------------------------------------------- | ----------------- | ----------------- | -----------------
                                                                                | December 28, 2019 | December 29, 2018 | December 30, 2017
Unrecognized tax benefit, beginning balance                                              | $25,224           | $18,296           | $17,978
Additions based on tax positions related to the current year                             | 3,679             | 1,677             | 694
Additions based on tax positions from prior years                                        | —                 | 5,332             | —
Reductions for tax positions of prior years                                              | (5)               | (7)               | —
Reductions due to lapse of the applicable statute of limitations                         | (98)              | (74)              | (376)
Unrecognized tax benefit, ending balance                                                 | $28,800           | $25,224           | $18,296
Interest and penalties recognized as a component of Provision (benefit) for income taxes | $59               | $71               | $67
Interest and penalties accrued at period end                                             | 212               | 230               | 218 |


| _id | d1a71a278 |
| title |  |
| text | SEGMENT RESULTS
Cubic Transportation Systems

Sales: CTS sales increased 27% to $849.8 million in 2019 compared to $670.7 million in 2018, including the impact of the adoption of ASC 606. The increase in sales was primarily driven by growth in both organic and inorganic business in North America. Sales in 2019 were higher in the U.S. primarily due to system development on contracts in New York, Boston, and the San Francisco Bay Area. Businesses acquired by CTS during fiscal year 2019, whose operations are all located in the U.S., had sales of $74.4

are all located in the U.S., had sales of $74.4 million in fiscal year 2019. Sales increased slightly in Australia between fiscal years 2018 and 2019 as increased system development work on a contract in Brisbane was partially offset by the negative impact of foreign currency exchange rates as well as a decrease in service sales. Sales were lower in the UK primarily due to a decrease in system development work in London and the negative impact of currency exchange rates. The average exchange rates between

rates. The average exchange rates between the prevailing currencies in our foreign operations and the U.S. dollar resulted in a decrease in CTS sales of $22.2 million for 2019 compared to 2018, primarily due to the strengthening of the U.S. dollar against the British pound and Australian dollar.

Amortization of Purchased Intangibles: Amortization of purchased intangibles included in the CTS operating results totaled $22.0 million in 2019 and $5.2 million in 2018. The increase is due to the amortization of purchased intangibles for companies acquired by CTS in fiscal year 2019.

Operating Income: CTS operating income increased 28% in 2019 to $77.2 million compared to $60.4 million in 2018. The increase in operating income was primarily caused by higher margins on increased work on development projects in New York, Boston, the San Francisco Bay Area and Brisbane, as well as the impact of the adoption of ASC 606. These increases in operating income were partially offset by operating losses incurred by businesses acquired by CTS in fiscal 2019 as well as the negative impact of

in fiscal 2019 as well as the negative impact of changes in foreign currency exchange rates. Businesses acquired by CTS in fiscal years 2019 incurred operating losses of $10.1 million in fiscal 2019, which included acquisition transaction costs of $8.1 million and amortization of intangible assets totaling $19.3 million. The average exchange rates between the prevailing currency in our foreign operations and the U.S. dollar resulted in a decrease in CTS operating income of $3.6 million for 2019 compared to

income of $3.6 million for 2019 compared to 2018.

Adjusted EBITDA: CTS Adjusted EBITDA increased 51% to $110.5 million in 2019 compared to $73.3 million in 2018. The increase in Adjusted EBITDA was primarily driven by the same factors that drove the increase in operating income described above excluding the increases in amortization of purchased intangibles and acquisition transaction costs which are excluded from Adjusted EBITDA. Adjusted EBITDA for CTS increased by $2.3 million in 2019 as a result of the adoption of the new revenue recognition standard.

 |
| table | | Fiscal 2019 | Fiscal 2018   | % Change
---------------- | ----------- | ------------- | --------
                 |             | (in millions) |
Sales            | $  849.8    | $  670.7      | 27 %
Operating income | 77.2        | 60.4          | 28
Adjusted EBITDA  | 110.5       | 73.3          | 51 |


| _id | d1b38fe7c |
| title |  |
| text | 4. INVENTORIES
The components of inventories, net, are as follows (in thousands):

 |
| table | | March 30, 2019 | March 31, 2018
----------------- | -------------- | --------------
Raw materials     | $118,608       | $110,389
Work in process   | 272,469        | 221,137
Finished goods    | 120,716        | 140,766
Total inventories | $511,793       | $472,292 |


| _id | d1b36a8ac |
| title |  |
| text | Notes to Consolidated Financial Statements - (Continued) Fiscal Years Ended May 26, 2019, May 27, 2018, and May 28, 2017 (columnar dollars in millions except per share amounts) 3. RESTRUCTURING ACTIVITIES
Pinnacle Integration Restructuring Plan

In December 2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the recently acquired operations of Pinnacle (the "Pinnacle Integration Restructuring Plan") for the purpose of achieving significant cost synergies between the companies. We expect to incur material charges for exit and disposal activities under U.S. GAAP. Although we remain unable to make good faith estimates relating to the entire Pinnacle Integration Restructuring

to the entire Pinnacle Integration Restructuring Plan, we are reporting on actions initiated through the end of fiscal 2019, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows. We expect to incur up to $360.0 million of operational expenditures ($285.0 million of cash charges and $75.0 million of non-cash charges) as well as $85.0 million of capital expenditures under the Pinnacle

of capital expenditures under the Pinnacle Integration Restructuring Plan. We have incurred or expect to incur approximately $260.1 million of charges ($254.0 million of cash charges and $6.1 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan. We expect to incur costs related to the Pinnacle Integration Restructuring Plan over a three-year period.  In December 2018, our Board of Directors (the "Board") approved a restructuring and integration plan

approved a restructuring and integration plan related to the ongoing integration of the recently acquired operations of Pinnacle (the "Pinnacle Integration Restructuring Plan") for the purpose of achieving significant cost synergies between the companies. We expect to incur material charges for exit and disposal activities under U.S. GAAP. Although we remain unable to make good faith estimates relating to the entire Pinnacle Integration Restructuring Plan, we are reporting on actions initiated through the

we are reporting on actions initiated through the end of fiscal 2019, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows. We expect to incur up to $360.0 million of operational expenditures ($285.0 million of cash charges and $75.0 million of non-cash charges) as well as $85.0 million of capital expenditures under the Pinnacle Integration Restructuring Plan. We have incurred or expect

Restructuring Plan. We have incurred or expect to incur approximately $260.1 million of charges ($254.0 million of cash charges and $6.1 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan. We expect to incur costs related to the Pinnacle Integration Restructuring Plan over a three-year period.  In December 2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the recently

to the ongoing integration of the recently acquired operations of Pinnacle (the "Pinnacle Integration Restructuring Plan") for the purpose of achieving significant cost synergies between the companies. We expect to incur material charges for exit and disposal activities under U.S. GAAP. Although we remain unable to make good faith estimates relating to the entire Pinnacle Integration Restructuring Plan, we are reporting on actions initiated through the end of fiscal 2019, including the estimated amounts or

fiscal 2019, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows. We expect to incur up to $360.0 million of operational expenditures ($285.0 million of cash charges and $75.0 million of non-cash charges) as well as $85.0 million of capital expenditures under the Pinnacle Integration Restructuring Plan. We have incurred or expect to incur approximately $260.1 million of charges ($254.0

approximately $260.1 million of charges ($254.0 million of cash charges and $6.1 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan. We expect to incur costs related to the Pinnacle Integration Restructuring Plan over a three-year period.

We anticipate that we will recognize the following pre-tax expenses in association with the Pinnacle Integration Restructuring Plan (amounts include charges recognized from plan inception through the end of fiscal 2019):

 |
| table | | International | Pinnacle Foods | Corporate | Total
---------------------------------------------------- | ------------- | -------------- | --------- | ------
Other cost of goods sold                             | $—            | $5.7           | $—        | $5.7
Total cost of goods sold .                           | —             | 5.7            | —         | 5.7
Severance and related costs                          | 0.7           | 0.6            | 116.8     | 118.1
Accelerated depreciation                             | —             | —              | 6.1       | 6.1
Contract/lease termination .                         | —             | 0.8            | 19.8      | 20.6
Consulting/professional fees .                       | 0.2           | —              | 96.1      | 96.3
Other selling, general and administrative expenses . | 0.1           | —              | 13.2      | 13.3
Total selling, general and administrative expenses   | 1.0           | 1.4            | 252.0     | 254.4
Consolidated total                                   | $1.0          | $7.1           | $252.0    | $260.1 |


| _id | d1a71d82e |
| title |  |
| text | Amortization of Intangible Assets: Substantially all of our intangible assets were acquired through our business combinations. We amortize our intangible assets over, and monitor the appropriateness of, the estimated useful lives of these assets. We also periodically review these intangible assets for potential impairment based upon relevant facts and circumstances. Note 6 of Notes to Consolidated Financial Statements included elsewhere in this Annual report has additional information regarding our

report has additional information regarding our intangible assets and related amortization.

Amortization of intangible assets increased in fiscal 2019 compared to fiscal 2018 primarily due to additional amortization from intangible assets, which primarily included developed technology that we acquired in connection with our recent acquisitions, partially offset by a reduction in expenses associated with certain of our intangible assets that became fully amortized.

 |
| table | Year Ended May 31,                                                      |        |        |                |
----------------------------------------------------------------------- | ------ | ------ | -------------- | ------
                                                                        |        |        | Percent Change |
(Dollars in millions)                                                   | 2019   | Actual | Constant       | 2018
Developed technology                                                    | $857   | 13%    | 14%            | $758
Cloud services and license support agreements and related relationships | 712    | -3%    | -3%            | 731
Other                                                                   | 120    | -9%    | -9%            | 131
Total amortization of intangible assets                                 | $1,689 | 4%     | 4%             | $1,620 |


| _id | d1b3a0baa |
| title |  |
| text | Unaudited Pro Forma Results of Acquirees
Autodesk has included the financial results of each of the acquirees in the consolidated financial statements from the respective dates of acquisition; the revenues and the results of each of the acquirees, except for PlanGrid, have not been material both individually or in the aggregate to Autodesk's fiscal 2019 and 2018 results.

The following unaudited pro forma financial information summarizes the combined results of operations for Autodesk and PlanGrid, as though the companies were combined as of the beginning of Autodesk's fiscal year 2018. The unaudited pro forma financial information was as follows (in millions):

The pro forma financial information for all periods presented includes the business combination accounting effects from the acquisition of PlanGrid including amortization expense from acquired intangible assets, compensation expense, and the interest expense and debt issuance costs related to the term loan agreement. The historical financial information has been adjusted to give effect to pro forma events that are directly attributable to the business combinations and factually supportable. The pro forma

and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the Company’s fiscal 2018.

The pro forma financial information for fiscal 2019 and 2018 combines the historical results of the Company, the adjusted historical results of PlanGrid for fiscal 2019 and 2018 considering the date the Company acquired PlanGrid and the effects of the pro forma adjustments described above

 |
| table | | Fiscal Year ended January 31, |
-------------- | ----------------------------- | --------
               | 2019                          | 2018
Total revenues | $2,632.6                      | $2,099.2
Pretax loss    | (157.5)                       | (724.9)
Net loss       | (200.1)                       | (734.5) |


| _id | d1b3689e4 |
| title |  |
| text | Jack in the Box restaurants offer a broad selection of distinctive products including classic burgers like our Jumbo Jack® and innovative product lines such as Buttery Jack® burgers. We also offer quality products such as breakfast sandwiches with freshly cracked eggs, and craveable favorites such as tacos and curly fries, along with specialty sandwiches, salads, and real ice cream shakes, among other items. We allow our guests to customize their meals to their tastes and order any product when they want

their tastes and order any product when they want it, including breakfast items any time of day (or night). We are known for variety and innovation, which has led to the development of four strong dayparts: breakfast, lunch, dinner, and late-night.

The Jack in the Box restaurant chain was the first major hamburger chain to develop and expand the concept of drive-thru restaurants. In addition to drive-thru windows, most of our restaurants have seating capacities ranging from 20 to 100 people and are open 18-24 hours a day. Drive-thru sales currently account for approximately 70% of sales at company-operated restaurants. The average check in fiscal year2019 was $8.34 for company-operated restaurants.

With a presence in only 21 states and one territory, we believe Jack in the Box is a brand with significant growth opportunities. In fiscal 2019, franchisees continued to expand in existing markets.
The following table summarizes the changes in the number of company-operated and franchise restaurants over the past five years:

Site selections for all new company-operated restaurants are made after an economic analysis and a review of demographic data and other information relating to population density, traffic, competition, restaurant visibility and access, available parking, surrounding businesses, and opportunities for market penetration. Restaurants developed by franchisees are built to brand specifications on sites we have approved.

Our company-operated restaurants have multiple restaurant models with different seating capacities to improve our flexibility in selecting locations. Management believes that this flexibility enables the Company to match the restaurant configuration with the specific economic, demographic, geographic, or physical characteristics of a particular site.

Typical costs to develop a traditional restaurant, excluding the land value, range from approximately$1.4 million to $2.0 million. The majority of our corporate restaurants are constructed on leased land or on land that we purchase and subsequently sell, along with the improvements, in sale and leaseback transactions. Upon completion of a sale and leaseback transaction, the Company’s initial cash investment is reduced to the cost of equipment, which ranges from approximately $0.4 million to $0.5 million.

 |
| table | |       |       | Fiscal Year |       |
----------------------------- | ----- | ----- | ----------- | ----- | -----
                              | 2019  | 2018  | 2017        | 2016  | 2015
Company-operated restaurants: |       |       |             |       |
Beginning of period           | 137   | 276   | 417         | 413   | 431
New                           | —     | 1     | 2           | 4     | 2
Refranchised                  | —     | (135) | (178)       | (1)   | (21)
Closed                        | —     | (5)   | (15)        | —     | (6)
Acquired from franchisees     | —     | —     | 50          | 1     | 7
End of period total           | 137   | 137   | 276         | 417   | 413
% of system                   | 6%    | 6%    | 12%         | 18%   | 18%
Franchise restaurants:        |       |       |             |       |
Beginning of period           | 2,100 | 1,975 | 1,838       | 1,836 | 1,819
New                           | 19    | 11    | 18          | 12    | 16
Refranchised                  | —     | 135   | 178         | 1     | 21
Closed                        | (13)  | (21)  | (9)         | (10)  | (13)
Sold to company               | —     | —     | (50)        | (1)   | (7)
End of period total           | 2,106 | 2,100 | 1,975       | 1,838 | 1,836
% of system                   | 94%   | 94%   | 88%         | 82%   | 82%
System end of period total    | 2,243 | 2,237 | 2,251       | 2,255 | 2,249 |