| _id | d1b32635a |
| title |  |
| text | * Recast to reflect segment changes.
Global Technology Services revenue decreased 0.2 percent as reported (1 percent adjusted for currency) in 2018 compared to the prior year, with Infrastructure & Cloud Services up 0.8 percent as reported (flat adjusted for currency) offset by a decline in Technology Support Services.

In Infrastructure & Cloud Services, the business focused on prioritizing the portfolio to deliver high-value solutions to bring productivity to clients and allow for expanding workloads, while it exited some lower-value offerings. Technology Support Services was impacted by the hardware product cycle dynamics in 2018 but grew its multivendor services offerings. Within GTS, cloud revenue of $8.0 billion grew 22 percent as reported and 21 percent adjusted for currency compared to the prior year.

 |
| table | ($ in millions)                             |           |           |                           |
------------------------------------------- | --------- | --------- | ------------------------- | -----------------------------------------------
For the year ended December 31:             | 2018      | 2017      | Yr.-to-Yr. Percent Change | Yr.-to-Yr. Percent Change Adjusted for Currency
Global Technology Services external revenue | $29,146 * | $29,213 * | (0.2)%                    | (0.8)%
Infrastructure & Cloud Services             | $22,185*  | $22,016*  | 0.8%                      | 0.0%
Technology Support Services                 | 6,961     | 7,196     | (3.3)                     | (3.5) |


| _id | d1b36508c |
| title |  |
| text | Thomas Clark

(1) Represents accelerated vesting of 33,711 stock options. Pursuant to Mr. Clark’s stock option agreements (dated January 17, 2019), if Mr. Clark’s employment is terminated without cause or for good reason within six months following a “change in control”, he will become immediately vested in all outstanding unvested stock options, and all of Mr. Clark’s outstanding options shall remain exercisable in accordance with their terms, but in no event for less than 90 days after such termination. (1) Represents

90 days after such termination. (1) Represents accelerated vesting of 33,711 stock options. Pursuant to Mr. Clark’s stock option agreements (dated January 17, 2019), if Mr. Clark’s employment is terminated without cause or for good reason within six months following a “change in control”, he will become immediately vested in all outstanding unvested stock options, and all of Mr. Clark’s outstanding options shall remain exercisable in accordance with their terms, but in no event for less than 90 days after

but in no event for less than 90 days after such termination. (1) Represents accelerated vesting of 33,711 stock options. Pursuant to Mr. Clark’s stock option agreements (dated January 17, 2019), if Mr. Clark’s employment is terminated without cause or for good reason within six months following a “change in control”, he will become immediately vested in all outstanding unvested stock options, and all of Mr. Clark’s outstanding options shall remain exercisable in accordance with their terms, but in no

in accordance with their terms, but in no event for less than 90 days after such termination.

(2) Represents accelerated vesting of 8,340 unvested performance restricted stock units. Pursuant to Mr. Clark’s performance restricted stock unit agreement (dated January 17, 2019), if Mr. Clark’s employment is terminated without cause or for good reason within six months following a “change in control” or if Mr. Clark's employment is terminated due to death or total disability, all non-vested units shall accelerate and be vested as of the date of termination.

 |
| table | Type of Payment                                                          | Termination by Systemax without “Cause” or Resignation by Employee for “good reason” ($) | Termination Due to Death or Total Disability ($) | Change In Control Only ($) | Termination by Systemax without “Cause” or Resignation by Employee for “good reason” within a certain period of time following a Change in Control ($)
------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------- | ------------------------------------------------ | -------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------
Cash Compensation (Salary & Non-Equity Incentive Compensation)           | -                                                                                | -                                                | -                          | -
Value of Accelerated Vesting of Stock Option Awards                      | -                                                                                | -                                                | -                          | 314,100 (1)
Value of Accelerated Vesting of Restricted Stock Unit Awards             | -                                                                                | -                                                | -                          | -
Value of Accelerated Vesting of Performance Restricted Stock Unit Awards | -                                                                                | 209,800 (2)                                      | -                          | 209,800 (2)
Medical and Other Benefits                                               | -                                                                                | -                                                | -                          | -
Total                                                                    | -                                                                                | 209,800                                          | -                          | 523,900 |


| _id | d1b3be628 |
| title |  |
| text | Statements of Cash Flows
The following table summarizes our cash flow related activities (in thousands):

 |
| table | |        | Years Ended December 31, |
---------------------------------------------------- | ------ | ------------------------ | -------
                                                     | 2019   | 2018                     | 2017
Cash (used in) provided by:                          |        |                          |
Operating activities                                 | $(426) | $(2,694)                 | $14,314
Investing activities                                 | (251)  | (6,876)                  | (5,142)
Financing activities                                 | 5,798  | 3,624                    | 8,420
Net increase (decrease) in cash and cash equivalents | $5,121 | $(5,946)                 | $17,592 |


| _id | d1b38e284 |
| title |  |
| text | Management Discussion and Analysis
Capital Management and Dividend Policy
Notes: (1) Net debt is defined as gross debt less cash and bank balances adjusted for related hedging balances.
(2) Net debt gearing ratio is defined as the ratio of net debt to net capitalisation. Net capitalisation is the aggregate of net debt, shareholders’ funds and non-controlling interests.
(3) Interest cover refers to the ratio of EBITDA and share of associates’ pre-tax profits to net interest expense.

As at 31 March 2019, the Group’s net debt was S$9.9 billion, stable from a year ago.

As at 31 March 2019, the Group’s net debt was S$9.9 billion, stable from a year ago.
The Group has one of the strongest credit ratings among telecommunication companies in the Asia Pacific region. Singtel is currently rated A1 by Moody’s and A+ by S&P Global Ratings. The Group continues to maintain a healthy capital structure.

The Group has one of the strongest credit ratings among telecommunication companies in the Asia Pacific region. Singtel is currently rated A1 by Moody’s and A+ by S&P Global Ratings. The Group continues to maintain a healthy capital structure.
For the financial year ended 31 March 2019, the total ordinary dividend payout, including the proposed final dividend, was 17.5 cents per share or 101% of the Group’s underlying net profit and 88% of the Group’s free cash flow (after interest and tax payments).

For the financial year ended 31 March 2019, the total ordinary dividend payout, including the proposed final dividend, was 17.5 cents per share or 101% of the Group’s underlying net profit and 88% of the Group’s free cash flow (after interest and tax payments).

Singtel is committed to delivering dividends that increase over time with growth in underlying earnings, while maintaining an optimal capital structure and investment grade credit ratings. Barring unforeseen circumstances, it expects to maintain its ordinary dividends at 17.5 cents per share for the next financial year ending 31 March 2020.

 |
| table | | Financial Year ended 31 March |
---------------------------------------------------------------------------- | ----------------------------- | ------
Group                                                                        | 2019                          | 2018
Gross debt (S$ million)                                                      | 10,396                        | 10,402
Net debt (1) (S$ million)                                                    | 9,883                         | 9,877
Net debt gearing ratio (2) (%)                                               | 24.9                          | 24.9
Net debt to EBITDA and share of associates’ pre-tax proﬁts (number of times) | 1.6                           | 1.3
Interest cover (3) (number of times)                                         | 16.2                          | 20.1 |


| _id | d1b35fd94 |
| title |  |
| text | 6. Operating profit
The Group has identified a number of items which are material due to the significance of their nature and/or amount. These are listed separately here to provide a better understanding of the financial performance of the Group:
Following the application of IFRS 16, depreciation of property, plant and equipment has been restated for the year ended 31 March 2018 (note 2).

 |
| table | |      | 2019   | (Restated) 2018
----------------------------------------------- | ---- | ------ | ---------------
                                                | Note | £m     | £m
Staff costs                                     | 7    | (56.0) | (54.5)
Contractor costs                                |      | (0.4)  | (0.4)
Depreciation of property, plant and equipment   | 14   | (4.9)  | (4.9)
Amortisation of intangible assets               | 13   | (4.0)  | (4.1)
Profit on sale of property, plant and equipment |      | 0.1    | – |


| _id | d1b30812a |
| title |  |
| text | Effective Income Tax Rate
A reconciliation of the United States federal statutory income tax rate to our effective income tax rate is as follows:

In 2019 and 2018 we had pre-tax losses of $19,573 and $25,403, respectively, which are available for carry forward to offset future taxable income. We made determinations to provide full valuation allowances for our net deferred tax assets at the end of 2019 and 2018, including NOL carryforwards generated during the years, based on our evaluation of positive and negative evidence, including our history of operating losses and the uncertainty of generating future taxable income that would enable us to

future taxable income that would enable us to realize our deferred tax.

 |
| table | | Year Ended        | Year Ended
-------------------------------------- | ----------------- | -----------------
                                       | December 31, 2018 | December 31, 2019
United States federal statutory rate   | 21.00%            | 21.00%
State taxes, net of federal benefit    | 1.99%             | (0.01)%
Valuation allowance                    | (21.96)%          | (24.33)%
Cumulative effect of accounting change | —                 | 2.07%
R&D Credit                             | 1.34%             | 1.53%
Other                                  | (0.38)%           | (0.27)%
Effective income tax rate              | 1.99%             | (0.01)% |


| _id | d1b34a16a |
| 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)
18. Revenues from Contracts with Customers
The Group has recognized the following amounts relating to revenues:

Revenues from The Cool Pool Limited relate only to the pool revenues received from GasLog’s vessels operating in the Cool Pool and do not include the Net pool allocation to GasLog of ($4,264) for the year ended December 31, 2019 ($17,818 for the year ended December 31, 2018 and $7,254 for the year ended December 31, 2017), which is recorded as a separate line item in the Profit or Loss Statement.

Following the exit from the Cool Pool, management allocates revenues from time charters to two categories: (a) variable rate charters and (b) fixed rate charters. The variable rate charter category contains vessels operating in the LNG carrier spot and short-term market or those which have a variable rate of hire across the charter period.

 |
| table | |         | For the year ended December 31, |
---------------------------------------------------- | ------- | ------------------------------- | -------
                                                     | 2017    | 2018                            | 2019
Revenues from fixed rate time charters               | 485,961 | 515,324                         | 558,266
Revenues from variable rate time charters            | —       | —                               | 64,334
Revenues from The Cool Pool Limited (GasLog vessels) | 38,046  | 102,253                         | 45,253
Revenues from vessel management services             | 1,222   | 767                             | 784
Total                                                | 525,229 | 618,344                         | 668,637 |


| _id | d1a71b952 |
| title |  |
| text | Our primary source of cash is receipts from revenue and, to a lesser extent, proceeds from participation in the employee stock purchase plan. The primary uses of cash are our stock repurchase program as described below, payroll-related expenses, general operating expenses including marketing, travel and office rent, and cost of revenue. Other uses of cash include business acquisitions, purchases of property and equipment and payments for taxes related to net share settlement of equity awards.

Cash Flows from Operating Activities

For fiscal 2019, net cash provided by operating activities of $4.42 billion was primarily comprised of net income adjusted for the net effect of non-cash items. The primary working capital sources of cash were net income coupled with an increase in deferred revenue, which was offset in large part by cash outflows due to an increase in prepaid expenses and other assets. The increase in deferred revenue was primarily driven by increases related to Digital Media offerings with cloud-enabled services and

Media offerings with cloud-enabled services and Digital Experience hosted services. The primary working capital use of cash was due to increases in prepaid expenses with certain vendors, sales commissions paid and capitalized, advanced payments related to income taxes and increase in long-term contract assets.

Cash Flows from Investing Activities
For fiscal 2019, net cash used for investing activities of $455.6 million was primarily due to purchases of property and equipment and our acquisition of the remaining equity interest in Allegorithmic. These cash outflows were offset primarily by proceeds from sales and maturities of short-term investments, net of purchases. See Note 3 of our Notes to Consolidated Financial Statements for more detailed information regarding our acquisitions.

Cash Flows from Financing Activities
For fiscal 2019, net cash used for financing activities was $2.95 billion primarily due to payments for our treasury stock repurchases and taxes related to net share settlement of equity awards, which were offset by proceeds from re-issuance of treasury stock for our employee stock purchase plan. See the section titled “Stock Repurchase Program” discussed below.

We expect to continue our investing activities, including short-term and long-term investments, facilities expansion and purchases of computer systems for research and development, sales and marketing, product support and administrative staff. Furthermore, cash reserves may be used to repurchase stock under our stock repurchase program and to strategically acquire companies, products or technologies that are complementary to our business.

 |
| table | (in millions)                                                          | 2019      | 2018      | 2017
---------------------------------------------------------------------- | --------- | --------- | ---------
Net cash provided by operating activities                              | $4,421.8  | $4,029.3  | $2,912.9
Net cash used for investing activities                                 | (455.6)   | (4,685.3) | (442.9)
Net cash used for financing activities                                 | (2,946.1) | (5.6)     | (1,183.7)
Effect of foreign currency exchange rates on cash and cash equivalents | (12.7)    | (1.7)     | 8.5
Net increase (decrease) in cash and cash equivalents                   | $1,007.4  | $(663.3)  | $1,294.8 |


| _id | d1a724bd8 |
| title |  |
| text | 25. Deferred income
The Group’s deferred income balances relate solely to revenue from contracts with customers.

 |
| table | | 2019      | 2018
----------- | --------- | ---------
            | $ million | $ million
Current     | 53.2      | 55.2
Non-current | 13.6      | 14.4
            | 66.8      | 69.6 |


| _id | d1b2ef044 |
| title |  |
| text | 10. Operating Leases
The Company charters-in vessels from other vessel owners on time-charter-in and bareboat charter contracts, whereby the vessel owner provides use of the vessel to the Company, and, in the case of time-charter-in contracts, also operates the vessel for the Company. A timecharter- in contract is typically for a fixed period of time, although in certain cases the Company may have the option to extend the charter.

The Company typically pays the owner a daily hire rate that is fixed over the duration of the charter. The Company is generally not required to pay the daily hire rate for time-charters during periods the vessel is not able to operate.

With respect to time-charter- With respect to time-charter-in and bareboat charter contracts with an original term of more than one year, for the year ended December 31, 2019, the Company incurred $99.0 million of time-charter and bareboat hire expense related to these time-charter and bareboat charter contracts, of which $68.2 million was allocable to the lease component, and $30.8 million was allocable to the non-lease component.

The amounts allocable to the lease component approximate the cash paid for the amounts included in lease liabilities and are reflected as a reduction in operating cash flows for the year ended December 31, 2019. Three of Teekay Tankers' time-charter-in contracts each have an option to extend the charter for an additional one-year term.

Since it is not reasonably certain that Teekay Tankers will exercise the options, the lease components of the options are not recognized as part of the right-of-use assets and lease liabilities. As at December 31, 2019, the weighted-average remaining lease term and weighted-average discount rate for these time-charter-in and bareboat charter contracts were 2.6 years and 6.1%, respectively.

During the year ended December 31, 2019, Teekay Tankers chartered in two LR2 vessels and one Aframax vessel for periods of 24 months each, Teekay LNG extended the charter-in contract for one LNG carrier for a period of 21 months, and Teekay Parent extended the charterin contract for one FSO unit for a period of 12 months, which resulted in the Company recognizing right-of-use assets and lease liabilities totaling $47.7 million and $47.7 million, respectively.

A maturity analysis of the Company’s operating lease liabilities from time-charter-in and bareboat charter contracts (excluding short-term leases) at December 31, 2019 is as follows:

As at December 31, 2019, minimum commitments to be incurred by the Company under short-term time-charter-in contracts were approximately $4.3 million (2020). As at December 31, 2018, minimum commitments to be incurred by the Company under vessel operating leases by which the Company charters-in vessels were approximately $116.3 million (2019), $90.4 million (2020), $53.4 million (2021), $9.1 million (2022), $9.1 million (2023) and $5.6 million thereafter.

 |
| table | | Lease Commitment | Non-Lease Commitment | Total Commitment
------------------------------------------------------- | ---------------- | -------------------- | ----------------
                                                        | $                | $                    | $
Payments                                                |                  |                      |
2020                                                    | 69,617           | 37,089               | 106,706
2021                                                    | 54,195           | 26,948               | 81,143
2022                                                    | 22,978           | 8,189                | 31,167
2023                                                    | 9,227            | -                    | 9,227
2024                                                    | 5,713            | -                    | 5,713
Thereafter                                              | -                | -                    | -
Total payments                                          | 161,730          | 72,226               | 233,956
Less: imputed interest                                  | (13,128)         |                      |
Carrying value of operating lease liabilities           | 148,602          |                      |
Less current portion                                    | (61,431)         |                      |
Carrying value of long-term operating lease liabilities | 87,171           |                      | |


| _id | d1b369a38 |
| title |  |
| text | Net Revenues by Geographic Region
The following table details our consolidated net revenues by geographic region (amounts in millions):
(1) “EMEA” consists of the Europe, Middle East, and Africa geographic regions
Americas
The decrease in net revenues in the Americas region for 2019, as compared to 2018, was primarily due to lower revenues recognized from the Destiny franchise (reflecting our sale of the publishing rights for Destiny to Bungie in December 2018).
EMEA

EMEA
The decrease in net revenues in the EMEA region for 2019, as compared to 2018, was primarily due to:
lower revenues recognized from the Destiny franchise; and lower revenues recognized from Call of Duty: Black Ops 4, which was released in October 2018, as compared to Call of Duty: WWII, which was released in November 2017.
Asia Pacific
The decrease in net revenues in the Asia Pacific region for 2019, as compared to 2018, was primarily due to:

lower revenues recognized from Hearthstone, primarily due to the prior year including additional digital content delivered in connection with the renewal of our contract with NetEase, Inc. in December 2018, with no equivalent transaction for the franchise in 2019; and lower revenues recognized from the Destiny franchise.

The decrease was partially offset by:• revenues recognized from Crash Team Racing Nitro-Fueled, which was released in June 2019; • revenues from Sekiro: Shadows Die Twice, which was released in March 2019; and • higher revenues recognized from Call of Duty: Modern Warfare, which was released in October 2019, as compared to Call of Duty: Black Ops 4.

 |
| table | |        |        |                      |
---------------------------------- | ------ | ------ | -------------------- | --------
                                   | 2019   | 2018   | Increase/ (decrease) | % Change
Net revenues by geographic region: |        |        |                      |
Americas                           | $3,341 | $3,880 | $(539)               | (14)%
EMEA (1)                           | 2,239  | 2,618  | (379)                | (14)
Asia Pacific                       | 909    | 1,002  | (93)                 | (9)
Consolidated net revenues          | $6,489 | $7,500 | $(1,011)             | (13) |


| _id | d1b33207e |
| title |  |
| text | Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards. Significant components of the Company’s net deferred tax assets and liabilities were as follows:
The increase in the gross deferred tax assets and valuation allowance between fiscal year 2019 and 2018 is primarily due to increases in tax carryforwards.

Realization of the Company’s net deferred tax assets is based upon the weighting of available evidence, including such factors as the recent earnings history and expected future taxable income. The Company believes it is more likely than not that such deferred tax assets will be realized with the exception of $227.0 million primarily related to California deferred tax assets. At June 30, 2019, the Company continued to record a valuation allowance to offset the entire California deferred tax asset balance

the entire California deferred tax asset balance due to the single sales factor apportionment resulting in lower taxable income in California.

At June 30, 2019, the Company had federal net operating loss carryforwards of $109.8 million. The majority of these losses will begin to expire in fiscal year 2020, and are subject to limitation on their utilization.
At June 30, 2019, the Company had state net operating loss carryforwards of $58.5 million. If not utilized, these losses will begin to expire in fiscal year 2020 and are subject to limitation on their utilization.

At June 30, 2019, the Company had state tax credit carryforwards of $322.4 million. Substantially all of these credits can be carried forward indefinitely.

 |
| table | | June 30, 2019  | June 24, 2018
------------------------------------------------- | -------------- | -------------
                                                  | (in thousands) |
Deferred tax assets:                              |                |
Tax carry forwards                                | $231,390       | $206,073
Allowances and reserves                           | 97,671         | 118,559
Equity-based compensation                         | 14,661         | 16,189
Inventory valuation differences                   | 18,516         | 14,021
Prepaid cost sharing                              | 74,139         | 65,644
Outside basis differences of foreign subsidiaries | 16,260         | —
Other                                             | 17,972         | 16,514
Gross deferred tax assets                         | 470,609        | 437,000
Valuation allowance                               | (226,928)      | (199,839)
Net deferred tax assets                           | 243,681        | 237,161
Deferred tax liabilities:                         |                |
Intangible assets                                 | (9,883)        | (21,558)
Convertible debt                                  | (46,993)       | (60,252)
Capita assets                                     | (83,298)       | (61,429)
Amortization of goodwill                          | (11,299)       | (10,738)
Outside basis differences of foreign subsidiaries | —              | (6,656)
Other                                             | (8,752)        | (7,955)
Gross deferred tax liabilities                    | (160,225)      | (168,588)
Net deferred tax assets                           | $83,456        | $68,573 |


| _id | d1a73f046 |
| title |  |
| text | The Monte Carlo simulation assumptions used for the periods presented were as follows:
As of January 3, 2020, there was $12 million of unrecognized compensation cost, net of estimated forfeitures, which is expected to be recognized over a weighted average period of 1.7 years. The fair value of performance-based stock awards that vested in fiscal 2019, 2018 and 2017 was $9 million, $13 million, and $4 million, respectively.

 |
| table | |                 | Year Ended        |
--------------------------------------- | --------------- | ----------------- | -----------------
                                        | January 3, 2020 | December 28, 2018 | December 29, 2017
Expected volatility                     | 22.02%          | 25.37%            | 27.19%
Risk free rate of return                | 2.39%           | 2.35%             | 1.53%
Weighted average grant date stock price | $62.66          | $65.00            | $53.73 |


| _id | d1a7233f0 |
| title |  |
| text | ACCOUNTING POLICY
We measure inventories, including wireless devices and merchandise for resale, at the lower of cost (determined on a weighted average cost basis for Wireless devices and accessories and a first-in, first-out basis for other finished goods and merchandise) and net realizable value. We reverse a previous writedown to net realizable value, not to exceed the original recognized cost, if the inventories later increase in value.
EXPLANATORY INFORMATION

EXPLANATORY INFORMATION
Cost of equipment sales and merchandise for resale includes $2,496 million of inventory costs for 2019 (2018 – $2,515 million).

 |
| table | | As at December 31 | As at December 31
------------------------------------ | ----------------- | -----------------
(In millions of dollars)             | 2019              | 2018
Wireless devices and accessories     | 380               | 399
Other finished goods and merchandise | 80                | 67
Total inventories                    | 460               | 466 |


| _id | d1b3ab8fc |
| title |  |
| text | Issuer Purchases of Equity Securities
The following shares of the Company were repurchased during the quarter ended June 30, 2019:
(1) 250,000 shares were purchased through a publicly announced repurchase plan. There were no shares surrendered to the Company to satisfy tax withholding obligations in connection with employee restricted stock awards.

(2) Total stock repurchase authorizations approved by the Company’s Board of Directors as of February 17, 2015 were for 30.0 million shares. These authorizations have no specific dollar or share price targets and no expiration dates.

 |
| table | | Total Number of Shares Purchased (1) | Average Price of Share | Total Number of Shares Purchased as Part of Publicly Announced Plans (1) | Maximum Number of Shares that May Yet Be Purchased Under the Plans (2)
------------------------ | ------------------------------------ | ---------------------- | ------------------------------------------------------------------------ | ----------------------------------------------------------------------
April 1 - April 30, 2019 | —                                    | $—                     | —                                                                        | 3,732,713
May 1 - May 31, 2019     | 250,000                              | $134.35                | 250,000                                                                  | 3,482,713
June 1 - June 30, 2019   | —                                    | $—                     | —                                                                        | 3,482,713
Total                    | 250,000                              | $134.35                | 250,000                                                                  | 3,482,713 |


| _id | d1b30ab0a |
| title |  |
| text | Note 12. Convertible Notes

In December 2016, the Company entered into the Purchase Agreement with J.P. Morgan Securities LLC and Jefferies LLC, as representatives of the several initial purchasers named therein (collectively, the “Initial Purchasers”), to issue and sell $90,000 in aggregate principal amount of its 5.50% senior convertible notes due 2021 ("Convertible Notes") in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to

1933, as amended (the “Securities Act”), and to non-U.S. persons pursuant to Regulation S under the Securities Act. In December 2016, the Company entered into a purchase agreement (the “Cambridge Purchase Agreement”) with Cambridge Equities, L.P. (“Cambridge”), an entity affiliated with Dr. Patrick Soon-Shiong, the Company’s Chairman and Chief Executive Officer, to issue and sell $10,000 in aggregate principal amount of the Convertible Notes in a private placement pursuant to an exemption from the

placement pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act. In December 2016, pursuant to the exercise of the overallotment by the Initial Purchasers, the Company issued an additional $7,000 principal amount of the Convertible Notes. The total net proceeds from this offering were approximately $102,714 ($9,917 from Cambridge and $92,797 from the Initial Purchasers) after deducting the Initial Purchasers’ discount and debt

the Initial Purchasers’ discount and debt issuance costs of $4,286 in connection with the Convertible Notes offering.

On December 21, 2016, the Company entered into an indenture, relating to the issuance of the Convertible Notes (the “Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The interest rates are fixed at 5.50% per year, payable semi- annually on June 15 and December 15 of each year, beginning on June 15, 2017. The Convertible Notes will mature on December 15, 2021, unless earlier repurchased by the Company or converted pursuant to their terms.

In connection with the offering of the Convertible Notes, on December 15, 2016, the Company entered into a Second Amended and Restated Promissory Note which amended and restated the Amended and Restated Promissory Note, dated May 9, 2016, between the Company and NantCapital, to, among other things, extend the maturity date of the Promissory Note to June 15, 2022 and to subordinate such Promissory Note in right of payment to the Convertible Notes (see Note 20).

The initial conversion rate of the Convertible Notes is 82.3893 shares of common stock per $1 principal amount of Convertible Notes (which is equivalent to an initial conversion price of approximately $12.14 per share). Prior to the close of business on the business day immediately preceding September 15, 2021, the Convertible Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after March 31, 2017 (and only during such calendar quarter), if, for at

only during such calendar quarter), if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of the Company’s common stock on such trading day is greater than or equal to 120% of the conversion price on such trading day; (2) during the five business day period after any five consecutive trading day period in which, for each day of that period, the

period in which, for each day of that period, the trading price per $1 principal amount of the Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions as described in the Indenture agreement.

Upon conversion, the Convertible Notes will be settled in cash, shares of the Company’s common stock or any combination thereof at the Company’s option.

Upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to purchase all or a portion of the Convertible Notes in principal amounts of $1 or an integral multiple thereof, for cash at a price equal to 100% of the principal amount of the Convertible Notes to be purchased plus any accrued and unpaid interest to, but excluding, the fundamental change purchase date. The conversion rate will be subject to adjustment upon the occurrence of certain specified

upon the occurrence of certain specified events.

On or after the date that is one year after the last date of original issuance of the Convertible Notes, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within the five trading days immediately preceding a conversion date is greater than or equal to 120% of the conversion price on each applicable trading day, the Company will make an interest make-whole payment to a converting

an interest make-whole payment to a converting holder (other than a conversion in connection with a make-whole fundamental change in which the conversion rate is adjusted) equal to the sum of the present values of the scheduled payments of interest that would have been made on the Convertible Notes to be converted had such Convertible Notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date if the

conversion date and (ii) the maturity date if the Convertible Notes had not been so converted. The present values of the remaining interest payments will be computed using a discount rate equal to 2.0%. The Company may pay any interest make-whole payment either in cash or in shares of its common stock, at the Company’s election as described in the Indenture. On or after the date that is one year after the last date of original issuance of the Convertible Notes, if the last reported sale price of the

Notes, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within the five trading days immediately preceding a conversion date is greater than or equal to 120% of the conversion price on each applicable trading day, the Company will make an interest make-whole payment to a converting holder (other than a conversion in connection with a make-whole fundamental change in which the

with a make-whole fundamental change in which the conversion rate is adjusted) equal to the sum of the present values of the scheduled payments of interest that would have been made on the Convertible Notes to be converted had such Convertible Notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date if the Convertible Notes had not been so converted. The present values of the remaining interest payments

present values of the remaining interest payments will be computed using a discount rate equal to 2.0%. The Company may pay any interest make-whole payment either in cash or in shares of its common stock, at the Company’s election as described in the Indenture.

The Company accounts for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) by recording the liability and equity components of the convertible debt separately. The liability component is computed based on the fair value of a similar liability that does not include the conversion option. The liability component includes both the value of the embedded interest make-whole derivative and the carrying value of the Convertible Notes. The equity component

of the Convertible Notes. The equity component is computed based on the total debt proceeds less the fair value of the liability component. The equity component is also recorded as debt discount and amortized as interest expense over the expected term of the Convertible Notes.

The liability component of the Convertible Notes on the date of issuance was computed as $83,079, consisting of the value of the embedded interest make-whole derivative of $1,499 and the carrying value of the Convertible Notes of $81,580. Accordingly, the equity component on the date of issuance was $23,921. If the debt is considered current at the balance sheet date, the liability component of the convertible notes will be classified as current liabilities and presented in current portion of convertible

and presented in current portion of convertible notes debt and the equity component of the convertible debt will be considered a redeemable security and presented as redeemable equity on the Company's Consolidated Balance Sheet.

Offering costs of $4,286 related to the issuance of the Convertible Notes were allocated to the liability and equity components in proportion to the allocation of the proceeds and accounted for as deferred financing offering costs and equity issuance costs, respectively. Approximately $972 of this amount was allocated to equity and the remaining $3,314 was capitalized as deferred financing offering costs.

The debt discounts and deferred financing offering costs on the Convertible Notes are being amortized to interest expense over the contractual terms of the Convertible Notes, using the effective interest method at an effective interest rate of 12.82%.
As of December 31, 2019, the remaining life of the Convertible Notes is approximately 24 months.

The following table summarizes how the issuance of the Convertible Notes is reflected in the Company's Consolidated Balance Sheets as of December 31, 2019 and 2018:
(Dollars in thousands, except per share amounts)

 |
| table | | Related party | Others   | Total
---------------------------------------------------------------- | ------------- | -------- | --------
Balance as of December 31, 2019                                  |               |          |
Gross proceeds                                                   | $10,000       | $97,000  | $107,000
Unamortized debt discounts and deferred financing offering costs | (1,136)       | (12,352) | (13,488)
Net carrying amount                                              | $8,864        | $84,648  | $93,512
Balance as of December 31, 2018                                  |               |          |
Gross proceeds                                                   | $10,000       | $97,000  | $107,000
Unamortized debt discounts and deferred financing offering costs | (1,622)       | (17,567) | (19,189)
Net carrying amount                                              | $8,378        | $79,433  | $87,811 |


| _id | d1b3a2bc6 |
| title |  |
| text | 3. Property, Plant and Equipment
Property, plant and equipment as of September 28, 2019 and September 29, 2018 consisted of the following (in thousands):

 |
| table | | 2019      | 2018
------------------------------------------- | --------- | ---------
Land, buildings and improvements            | $289,051  | $267,809
Machinery and equipment                     | 381,656   | 364,034
Computer hardware and software              | 136,227   | 130,645
Capital assets in progress                  | 49,599    | 38,469
Total property, plant and equipment, gross  | 856,533   | 800,957
Less: accumulated depreciation              | (472,309) | (459,651)
Total property, plant and equipment, net    | 384,224   | 341,306 |


| _id | d1b341a38 |
| title |  |
| text | Stock Options
Our stock options are generally exercisable in increments of either one-fourth or one-third per year beginning one year from the date of grant. Stock options issued after February 2014 expire eight years from the date of grant. Options issued prior to February 2014 expire six years from the date of grant. Option activity for 2019 is summarized as follows:
The total intrinsic value was $108 million, $446 million, and $198 million for options exercised in 2019, 2018, and 2017, respectively.

 |
| table | | Number of Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life (In Years) | Aggregate Intrinsic Value
--------------------------------- | ---------------- | ----------------------------------------- | ------------------------------------------------------ | -------------------------
Outstanding as of August 30, 2018 | 18               | $23.38                                    |                                                        |
Granted                           | —                | 44.30                                     |                                                        |
Exercised                         | (5)              | 17.50                                     |                                                        |
Canceled or expired               | (1)              | 22.60                                     |                                                        |
Outstanding as of August 29, 2019 | 12               | 25.94                                     | 4.3                                                    | $220
Exercisable as of August 29, 2019 | 7                | $25.37                                    | 3.7                                                    | $143
Unvested as of August 29, 2019    | 5                | 26.94                                     | 5.5                                                    | 77 |


| _id | d1b39bfe2 |
| title |  |
| text | Acquisition of Fagerdala

On October 2, 2017, the Company acquired Fagerdala Singapore Pte Ltd., a manufacturer and fabricator of polyethylene foam based in Singapore, to join its Product Care division. We acquired 100% of Fagerdala shares for estimated consideration of S$144.7 million, or $106.2 million, net of cash acquired of $13.3 million, inclusive of purchase price adjustments which were finalized in the third quarter of 2018. We acquired Fagerdala to leverage its manufacturing footprint in Asia, experience in foam

footprint in Asia, experience in foam manufacturing and fabrication and commercial organization to expand our presence across multiple industries utilizing fulfillment to distribute goods.

The following table summarizes the consideration transferred to acquire Fagerdala and the final allocation of the purchase price among the assets acquired and liabilities assumed. price among the assets acquired and liabilities assumed.

 |
| table | | Preliminary Allocation | Measurement Period | Final Allocation
----------------------------------------- | ---------------------- | ------------------ | -----------------------
(In millions)                             | As of October 2, 2017  | Adjustments        | As of December 31, 2018
Total consideration transferred           | $ 106.6                | $ (0.4)            | $ 106.2
Assets:                                   |                        |                    |
Cash and cash equivalents                 | 13.3                   | —                  | 13.3
Trade receivables, net                    | 22.4                   | —                  | 22.4
Inventories, net                          | 10.0                   | 0.1                | 10.1
Prepaid expenses and other current assets | 8.4                    | —                  | 8.4
Property and equipment, net               | 23.3                   | —                  | 23.3
Identifiable intangible assets, net       | 41.4                   | 0.7                | 42.1
Goodwill                                  | 39.3                   | (1.5)              | 37.8
Total assets                              | $ 158.1                | $ (0.7)            | $ 157.4
Liabilities:                              |                        |                    |
Short-term borrowings                     | 14.0                   | —                  | 14.0
Accounts payable                          | 6.9                    | —                  | 6.9
Other current liabilities                 | 15.1                   | (0.1)              | 15.0
Long-term debt, less current portion      | 3.8                    | —                  | 3.8
Non-current deferred taxes                | 11.7                   | (0.2)              | 11.5
Total liabilities                         | $ 51.5                 | $ (0.3)            | $ 51.2 |


| _id | d1b34f9ee |
| title |  |
| text | The increase in Global Financing total revenue was driven by an increase in internal revenue, partially offset by a decrease in external revenue. Internal revenue grew 9.5 percent driven by increases in internal financing (up 17.6 percent) and internal used equipment sales (up 6.8 percent).
External revenue declined 6.3 percent due to a decrease in external used equipment sales (down 30.8 percent), partially offset by an increase in external financing (up 4.9 percent).

The increase in Global Financing pre-tax income was primarily driven by an increase in gross profit and a decrease in total expense.

 |
| table | ($ in millions)                 |        |        |
------------------------------- | ------ | ------ | -------------------------
For the year ended December 31: | 2018   | 2017   | Yr.-to-Yr. Percent Change
Results of Operations           |        |        |
External revenue                | $1,590 | $1,696 | (6.3)%
Internal revenue                | 1,610  | 1,471  | 9.5
Total revenue                   | $3,200 | $3,168 | 1.0%
Pre-tax income                  | $1,361 | $1,278 | 6.5% |


| _id | d1b3b91b4 |
| title |  |
| text | Statement of financial position
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Altium Limited has provided financial guarantees in respect of credit card facilities and office leases amounting to US$261,518 (2018: US$283,752).
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2019 and 30 June 2018.
Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment at as 30 June 2019 and 30 June 2018.
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in the relevant notes to the financial statements.

 |
| table | Parent                      |         |
--------------------------- | ------- | -------
                            | 2019    | 2018
                            | US$’000 | US$’000
Total current assets        | 121,041 | 73,202
Total assets                | 383,665 | 336,032
Total current liabilities   | 154,619 | 90,392
Total liabilities           | 155,521 | 92,364
Equity                      |         |
Contributed equity          | 126,058 | 125,635
Foreign currency reserve    | 2,607   | 2,783
Equity compensation reserve | 19,561  | 12,570
Retained profits            | 79,918  | 102,680
Total equity                | 228,144 | 243,668 |


| _id | d1b3336c2 |
| title |  |
| text | This section provides a summary of the capital management activity of the Group during the period, including the Group’s borrowings. The Group manages its liquidity requirements with a range of short-term money market loans, bank loans, and flexible debt instruments with varying maturities.
The Group manages its capital structure with the objective of enhancing long-term shareholder value through funding its business at an optimised weighted average cost of capital.

The Group returns capital to shareholders when consistent with its long-term capital structure objectives and where it will enhance shareholder value. In May 2019, the Group returned $1.7 billion of capital to shareholders through an off-market share buy-back. This resulted in the purchase of 58.7 million shares which were subsequently cancelled. The share buy-back complements dividends of $1.4 billion paid to shareholders this reporting period through the 2018 final and special dividends, and the 2019

2018 final and special dividends, and the 2019 interim dividend, with a total of $3.1 billion returned to shareholders, excluding franking credits.

The Group remains committed to solid investment grade credit ratings and a number of actions can be undertaken to support the credit profile including the sale of non-core assets, further working capital initiatives, and adjusting growth capital expenditure and the property leasing profile. The Group’s credit ratings (1) are BBB (stable outlook) according to S&P and Baa2 (stable outlook) according to Moody’s.

In March 2019, the $500 million domestic Medium Term Notes matured. It was refinanced in April 2019 with $400 million of Medium Term Notes issued to meet the Group’s new Green Bond Framework (Green Bonds). The Green Bonds have been issued for a five-year tenor, maturing in April 2024.
In November 2019, $320 million of undrawn syndicated bank loan facilities are due to mature. The Group intends to refinance this facility at maturity.

(1) These credit ratings have been issued by a credit rating agency which holds an Australian Financial Services Licence with an authorisation to issue credit ratings to wholesale clients only and are for the benefit of the Group’s debt providers.

 |
| table | | OPENING | NON‑CASH  | NET CASH  | CLOSING
----------------------------- | ------- | --------- | --------- | -------
                              | BALANCE | MOVEMENTS | MOVEMENTS | BALANCE
2019                          | $M      | $M        | $M        | $M
Current, unsecured            |         |           |           |
Short-term money market loans | 16      | 2         | 21        | 39
Bank loans                    | 88      | 5         | 142       | 235
Securities                    | 500     | –         | (500)     | –
Total current borrowings      | 604     | 7         | (337)     | 274
Non‑current, unsecured        |         |           |           |
Bank loans                    | 540     | 36        | 102       | 678
Securities                    | 1,668   | 110       | 400       | 2,178
Unamortised borrowing costs   | (9)     | 5         | –         | (4)
Finance leases                | –       | 6         | (3)       | 3
Total non‑current borrowings  | 2,199   | 157       | 499       | 2,855
Total                         | 2,803   | 164       | 162       | 3,129 |


| _id | d1b3457fa |
| title |  |
| text | Note 14 – Employee Benefit Plans
Pension Benefit Plan
We maintain a defined benefit pension plan covering employees in certain foreign countries.
The pension benefit plan obligations and funded status as of December 31, 2019 and 2018, were as follows:

The accumulated benefit obligation was $43.9 million and $37.2 million as of December 31, 2019 and 2018, respectively. The increase in the accumulated benefit obligation and the actuarial loss was primarily attributable to a decrease in the discount rate during 2019.

 |
| table | (In thousands)                                      | 2019      | 2018
--------------------------------------------------- | --------- | ---------
Change in projected benefit obligation:             |           |
Projected benefit obligation at beginning of period | $37,245   | $34,893
Service cost                                        | 1,471     | 1,193
Interest cost                                       | 634       | 727
Actuarial loss - experience                         | 453       | 38
Actuarial loss - assumptions                        | 5,091     | 2,139
Benefit payments                                    | (166)     | (138)
Effects of foreign currency exchange rate changes   | (826)     | (1,607)
Projected benefit obligation at end of period       | 43,902    | 37,245
Change in plan assets:                              |           |
Fair value of plan assets at beginning of period    | 24,159    | 26,624
Actual gain (loss) on plan assets                   | 4,392     | (2,024)
Contributions                                       | —         | 688
Effects of foreign currency exchange rate changes   | (535)     | (1,129)
Fair value of plan assets at end of period          | 28,016    | 24,159
Unfunded status at end of period                    | $(15,886) | $(13,086) |


| _id | d1a73f2c6 |
| title |  |
| text | Selling and Administrative Expenses. Selling and administrative expenses increased $124.2 million in 2019 compared to 2018. Our selling and administrative expenses by major expense type for 2019 and 2018 were as follows (dollars in thousands):
Selling and administrative expenses increased approximately 70 basis points as a percentage of net sales in 2019 compared to 2018. The increase in expenses reflects the addition of PCM to our North America and EMEA segments, effective August 30, 2019.

The addition of PCM and increased variable compensation resulting from increased sales and gross profit in 2019 compared to 2018 were the primary drivers for the $90.9 million increase in personnel costs. PCM was also the primary driver for year over year increases in facilities, travel and entertainment, and marketing expenses.
Depreciation and amortization expense increased approximately $8.8 million year over year, primarily due to additional amortization expense on newly acquired intangible assets.

 |
| table | | 2019     | 2018     | Change
-------------------------------------------- | -------- | -------- | --------
Personnel costs, including teammate benefits | $684,837 | $593,955 | $90,882
Depreciation and amortization                | 46,209   | 37,458   | 8,751
Facility expenses                            | 30,945   | 26,396   | 4,549
Travel and entertainment                     | 28,402   | 25,656   | 2,746
Legal and professional fees                  | 16,839   | 16,103   | 736
Marketing                                    | 11,597   | 10,345   | 1,252
Other                                        | 61,908   | 46,616   | 15,292
Total                                        | $880,737 | $756,529 | $124,208 |


| _id | d1b351dca |
| title |  |
| text | Information about Contract Balances
Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of the Company's deferred revenue balance is related to services revenue, primarily customer support contracts.

In some arrangements the Company allows customers to pay for term based software licenses and products over the term of the software license. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables which are anticipated to be invoiced in the next twelve months are included in Accounts receivable on the consolidated balance sheet. Long term unbilled receivables are included in Other assets. The opening and closing balances of the Company’s

The opening and closing balances of the Company’s accounts receivable, unbilled receivables, and deferred revenues are as follows:

The increase in accounts receivable is primarily a result of an increase in subscription software transactions that are recognized as revenue at the time of sale but paid for over time. The net increase in deferred revenue is primarily the result of an increase in deferred customer support revenue related to software and products revenue transactions and customer support renewals during fiscal 2019.

The amount of revenue recognized in the period that was included in the opening deferred revenue balance was $238,603 for the year ended March 31, 2019. The vast majority of this revenue consists of customer support arrangements. The amount of revenue recognized from performance obligations satisfied in prior periods was not material.
Notes to Consolidated Financial Statements — (Continued) (In thousands, except per share data)

 |
| table | | Accounts Receivable | Unbilled Receivable (current) | Unbilled Receivable (long-term) | Deferred Revenue (current) | Deferred Revenue (long-term)
------------------------------------ | ------------------- | ----------------------------- | ------------------------------- | -------------------------- | ----------------------------
Opening Balance as of March 31, 2018 | $152,219            | $9,900                        | $4,380                          | $241,113                   | $84,661
Increase/(decrease), net             | 9,351               | 5,366                         | 2,836                           | (2,674)                    | 14,596
Ending Balance as of March 31, 2019  | $161,570            | $15,266                       | $7,216                          | $238,439                   | $99,257 |


| _id | d1b305600 |
| title |  |
| text | The movements below in foreign currency translation reserve and cashflow hedge reserve relating to the NSPT Group are presented within non-controlling interest in the Group’s consolidated statement of changes in equity.
Taxation impact on revaluation applies only to cash flow hedges held in NSNZPT, a sub-trust of NSPT, which is subject to New Zealand tax legislation. Deferred tax does not apply to any other cash flow hedges held in the NSPT Group under current Australian tax legislation.

The hedging reserve is used to record gains or losses on derivatives that are designated as cash flow hedges and recognised in other comprehensive income, as described in note 2(m). Amounts are reclassified to profit or loss in the period when the associated hedged transaction takes place.

On 24 June 2019, the Group reset the interest rates associated with AUD denominated interest rate swaps designated as cash flow hedges. This resulted in a cash outflow of $22.9m which reduced the Group’s financial liability as presented in note 9.8. In accordance with AASB 9 Financial instruments, as the nature of the underlying hedged instrument is unchanged the fair value of this outflow remains in the cash flow hedge reserve and will be amortised to the statement of profit or loss in future periods.

The cash flow hedge is included in non-controlling interest in the Consolidated Group and is not classified within other reserves.

 |
| table | NSPT Group                               |          |
---------------------------------------- | -------- | -------
                                         | 2019     | 2018
                                         | $'000    | $'000
Foreign currency translation reserve     |          |
Opening balance at 1 July                | (115)    | 232
Net investment hedge                     | (1,591)  | 1,007
Foreign exchange translation differences | 2,464    | (1,354)
Closing balance at 30 June               | 758      | (115)
Cash flow hedge reserve                  |          |
Opening balance at 1 July                | (2,073)  | (45)
Revaluation of derivatives               | (22,098) | (2,112)
Taxation impact on revaluation           | 290      | 84
Closing balance at 30 June               | (23,881) | (2,073)
Other reserves                           | (23,123) | (2,188) |


| _id | d1b32e9b0 |
| title |  |
| text | In the first quarter of 2019, the Company determined that certain revenue in the IT Services and Hardware segment associated with nonrecurring projects is better aligned with Infrastructure Solutions, rather than Consulting, where it was previously reported.  As a result, the Company reclassed revenue of $26.6 million and $12.3 million from Consulting to Infrastructure Solutions for the twelve months ended December 31, 2018 and 2017, respectively.  This reclassification of revenue

had no impact on the Consolidated Statements of Operations

The following table presents revenues disaggregated by contract type

 |
| table | Year ended December 31,                                    |          |          |
---------------------------------------------------------- | -------- | -------- | --------
(dollars in millions)                                      | 2019     | 2018     | 2017
Entertainment and Communications                           |          |          |
Products and services transferred at a point in time       | $31.7    | $25.3    | $20.6
Products and services transferred over time                | 942.4    | 805.8    | 664.3
Intersegment revenue                                       | 21.6     | 22.3     | 21.2
Total Entertainment and Communications                     | 995.7    | 853.4    | 706.1
IT Services and Hardware                                   |          |          |
Products and services transferred at a point in time       | 138.7    | 142.9    | 80.8
Products and services transferred over time                | 423.9    | 404.2    | 300.0
Intersegment revenue                                       | 4.8      | 3.8      | 4.3
Total IT Services and Hardware                             | 567.4    | 550.9    | 385.1
Total Revenue                                              |          |          |
Total products and services transferred at a point in time | 170.4    | 168.2    | 101.4
Total products and services transferred over time          | 1,366.3  | 1210.0   | 964.3
Total revenue                                              | $1,536.7 | $1,378.2 | $1,065.7 |


| _id | d1a7231d4 |
| title |  |
| text | Market and Market Prices of Common Stock

During 2016 fiscal year and through February 22, 2017, our common stock was traded on the Nasdaq Capital Market under the symbol “ACUR”. On February 23, 2017, our common stock was delisted from the Nasdaq Capital Market due to our failure to comply with Nasdaq’s Listing Rule 5550(b)(1), which requires that we maintain $2.5 million in stockholders’ equity for continued listing (or meet the alternatives of market value of listed securities of $35 million or net income from continuing operations). NASDAQ had

income from continuing operations). NASDAQ had granted us a grace period through February 10, 2017, to regain compliance with Listing Rule 5550(b)(1), but we were unable to regain compliance within such period.

Commencing on February 23, 2017, our common stock was quoted on the OTCQB under the symbol “ACUR”, however commencing June 4, 2018 and lasting until July 2, 2018 it was quoted on the OTC Markets OTC Pink tier. The downgrade was a result of the late filing of our 2017 Annual Report on Form 10-K beyond any applicable grace periods. The Company regained compliance with the OTCQB and effective July 3, 2018 it was quoted on the OTCQB. However, commencing May 20, 2019 as a result of late filing of our 2018

20, 2019 as a result of late filing of our 2018 Annual Report on Form 10-K our common stock was again relegated to the OTC Markets OTC Pink tier. The Company regained compliance with the OTCQB in March, 2020 and effective March 23, 2020 it was quoted on the OTCQB.

Set forth below for the period indicated are the high and low sales prices for our common stock in the OTC Market of OTCQB and Pink tier.
On March 27, 2020 the closing sales price of our common stock was $0.22.

 |
| table | Period                            |       | Sales Prices
--------------------------------- | ----- | ------------
                                  | High  | Low
2019 Fiscal Year                  |       |
First Quarter                     | $0.29 | $0.11
Second Quarter                    | 0.28  | 0.13
Third Quarter                     | 0.45  | 0.14
Fourth Quarter                    | 0.63  | 0.20
2020 Fiscal Year                  |       |
First Quarter thru March 27, 2020 | 0.47  | $0.12 |


| _id | d1b36fd20 |
| title |  |
| text | Income Tax Expense (Benefit)
Significant components of the income tax expense (benefit) were as follows:

 |
| table | |        | Fiscal        |
-------------------------------------- | ------ | ------------- | -----
                                       | 2019   | 2018          | 2017
                                       |        | (in millions) |
Current income tax expense (benefit):  |        |               |
U.S.:                                  |        |               |
Federal                                | $ (28) | $ 20          | $ (9)
State                                  | 2      | 21            | 9
Non-U.S.                               | 229    | 406           | 322
                                       | 203    | 447           | 322
Deferred income tax expense (benefit): |        |               |
U.S.:                                  |        |               |
Federal                                | (25)   | 499           | (119)
State                                  | (8)    | (30)          | (15)
Non-U.S.                               | (185)  | (1,260)       | (8)
                                       | (218)  | (791)         | (142)
Income tax expense (benefit)           | $ (15) | $ (344)       | $ 180 |


| _id | d1b391b6e |
| title |  |
| text | 13. Loss per Share
The following data shows the amounts used in computing loss per share and the effect on earnings and the weighted average number of shares of dilutive potential common shares.

Basic earnings (loss) per share is computed as net income available to common shareholders divided by the weighted average basic shares outstanding. The outstanding shares used to calculate the weighted average basic shares excludes 300,437, 334,817 and 490,355 of restricted shares and performance shares at March 31, 2019, 2018 and 2017, respectively, as these shares were issued but were not vested and, therefore, not considered outstanding for purposes of computing basic earnings per share at the balance

computing basic earnings per share at the balance sheet dates.

Diluted earnings (loss) per share includes the effect of all potentially dilutive securities on earnings per share. We have stock options, stock-settled appreciation rights ("SSARs"), unvested restricted shares and unvested performance shares that are potentially dilutive securities. When a loss is reported, the denominator of diluted earnings per share cannot be adjusted for the dilutive impact of sharebased compensation awards because doing so would be anti-dilutive.

In addition, when a net loss is reported, adjusting the denominator of diluted earnings per share would also be anti-dilutive to the loss per share, even if the entity has net income after adjusting for a discontinued operation. Therefore, for all periods presented, basic weighted-average shares outstanding were used in calculating the diluted net loss per share.

 |
| table | |           | Year ended March 31, |
---------------------------------------------------------------------------- | --------- | -------------------- | ---------
(In thousands, except per share data)                                        | 2019      | 2018                 | 2017
Numerator:                                                                   |           |                      |
Net loss                                                                     | $(13,164) | $(8,350)             | $(11,721)
Denominator:                                                                 |           |                      |
Weighted average shares outstanding - basic and diluted                      | 23,037    | 22,801               | 22,615
Loss per share - basic and diluted:                                          |           |                      |
Net loss per share-basic and diluted                                         | $(0.57)   | $(0.37)              | $(0.52)
Anti-dilutive stock options, SSARs, restricted shares and performance shares | 1,433     | 756                  | 1,004 |


| _id | d1a714cd8 |
| title |  |
| text | The following is a breakdown of revenue by shipment destination (in thousands):
(1) Asia Pacific includes revenue from China $1.1 million or 11% and Japan of $1.8 million or 17% of total revenue in 2019 and $1.8 million or 15% and $1.6 million or 12% of total revenue in 2018, respectively. In 2017, revenue from China and Japan were $1.3 million or 11% and $1.5 million or 12%, respectively.

(2) North America includes revenue from the United States of $4.7 million or 46% of total revenue in 2019, $6.4 million or 50% of total revenue in 2018 and $4.2 million or 34% of total revenue in 2017.

 |
| table | |         |         | Fiscal Years
--------------------- | ------- | ------- | ------------
                      | 2019    | 2018    | 2017
Revenue by geography: |         |         |
Asia Pacific (1)      | $3,049  | $4,905  | $5,810
Europe                | 2,459   | 1,280   | 2,015
North America (2)     | 4,802   | 6,444   | 4,324
Total revenue         | $10,310 | $12,629 | $12,149 |


| _id | d1b3bd98a |
| title |  |
| text | AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
18. EARNINGS PER COMMON SHARE
The following table sets forth basic and diluted net income per common share computational data for the years ended December 31, (shares in thousands, except per share data):

 |
| table | | 2019     | 2018     | 2017
-------------------------------------------------------------------------------------------------- | -------- | -------- | --------
Net income attributable to American Tower Corporation stockholders                                 | $1,887.8 | $1,236.4 | $1,238.9
Dividends on preferred stock                                                                       | —        | (9.4)    | (87.4)
Net income attributable to American Tower Corporation common stockholders                          | $1,887.8 | $1,227.0 | $1,151.5
Basic weighted average common shares outstanding                                                   | 442,319  | 439,606  | 428,181
Dilutive securities                                                                                | 3,201    | 3,354    | 3,507
Diluted weighted average common shares outstanding                                                 | 445,520  | 442,960  | 431,688
Basic net income attributable to American Tower Corporation common stockholders per common share   | $4.27    | $2.79    | $2.69
Diluted net income attributable to American Tower Corporation common stockholders per common share | $4.24    | $2.77    | $2.67 |


| _id | d1b34f200 |
| title |  |
| text | ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated financial data should be read together with our consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this report. The selected consolidated financial data in this section is not intended to replace our consolidated financial statements and the accompanying notes. Our historical results are not necessarily indicative of our future results.

We derived the consolidated statements of operations data for the fiscal years ended December 31, 2019, 2018 and 2017 and the consolidated balance sheets data as of December 31, 2019 and 2018 from our audited consolidated financial statements appearing elsewhere in this report. The consolidated statement of operations data for the years ended December 31, 2016 and 2015 and the consolidated balance sheet data as of December 31, 2017, 2016 and 2015 have been derived from our audited consolidated financial

derived from our audited consolidated financial statements, which are not included in this report.

 |
| table | | Year Ended December 31, |            |                                                        |            |
--------------------------------------------------- | ----------------------- | ---------- | ------------------------------------------------------ | ---------- | ----------
                                                    | 2019                    | 2018       | 2017                                                   | 2016       | 2015
Consolidated Statement of Operations Data           |                         |            | (Dollars in thousands except share and per share data) |            |
Net sales                                           | $ 245,862               | $193,237   | $152,359                                               | $129,707   | $113,505
Cost of goods sold                                  | 131,665                 | 103,247    | 79,943                                                 | 69,336     | 58,856
Gross profit                                        | 114,197                 | 89,990     | 72,416                                                 | 60,371     | 54,649
Selling, general and administrative expenses        | 114,450                 | 94,876     | 75,167                                                 | 62,586     | 58,297
Loss from operations                                | (253)                   | (4,886)    | (2,751)                                                | (2,215)    | (3,648)
Other income (expenses), net                        | 5                       | (102)      | (525)                                                  | (182)      | 449
Interest expense                                    | (991)                   | (296)      | (910)                                                  | (698)      | (455)
Loss before income taxes                            | (1,239)                 | (5,284)    | (4,187)                                                | (3,095)    | (3,653)
Income tax expense                                  | 144                     | 77         | 75                                                     | 66         | 58
Net loss attributable to common stockholders        | $(1,383)                | $(5,361)   | $(4,262)                                               | $(3,161)   | $(3,711)
Net loss per share                                  |                         |            |                                                        |            |
Basic                                               | $(0.04)                 | $(0.15)    | $(0.12)                                                | $(0.09)    | $(0.11)
Diluted                                             | $(0.04)                 | $(0.15)    | $(0.12)                                                | $(0.09)    | $(0.11)
Weighted Average shares of common stock outstanding |                         |            |                                                        |            |
Basic                                               | 35,950,117              | 35,329,170 | 34,487,239                                             | 33,674,416 | 33,497,940
Diluted                                             | 35,950,117              | 35,329,170 | 34,487,239                                             | 33,674,416 | 33,497,940 |


| _id | d1b39fd36 |
| title |  |
| text | ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
Disaggregation of Revenue
The following table presents our sales by product line, which includes certain reclassifications to prior comparative periods to conform to our current year presentation:

 |
| table | |          | Years Ended December 31, |
----------------------- | -------- | ------------------------ | --------
                        | 2019     | 2018                     | 2017
Semiconductor Equipment | $403,018 | $533,770                 | $554,063
Industrial & Medical    | 245,992  | 185,122                  | 116,949
Data Center Computing   | 91,438   | —                        | —
Telecom & Networking    | 48,500   | —                        | —
Total                   | $788,948 | $718,892                 | $671,012 |


| _id | d1b3acef0 |
| title |  |
| text | Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’:
No Director received compensation for loss of office (2018 nil).
There were gains of $2,010,731 (2018 $852,742) on the exercise of options by key management personnel in 2019.
For further details refer to the Report on Directors’ remuneration on pages 77 to 101.

 |
| table | | 2019    | 2018
---------------------------- | ------- | -------
                             | $000    | $000
Short-term employee benefits | 3,540.9 | 3,842.1
Share-based payment          | 1,982.7 | 664.6
                             | 5,523.6 | 4,506.7 |


| _id | d1b32d7cc |
| title |  |
| text | BELL WIRELESS OPERATING METRICS
(1) Our Q1 2018 blended ABPU was adjusted to exclude the unfavourable retroactive impact of the CRTC decision on wireless domestic wholesale roaming rates of $14 million.

(2) At the beginning of Q1 2019, we adjusted our wireless subscriber base to remove 167,929 subscribers (72,231 postpaid and 95,698 prepaid) as follows: (A) 65,798 subscribers (19,195 postpaid and 46,603 prepaid), due to the completion of the shutdown of the CDMA network on April 30, 2019, (B) 49,095 prepaid subscribers as a result of a change to our deactivation policy, mainly from 120 days for Bell/Virgin Mobile and 150 days for Lucky Mobile to 90 days, (C) 43,670 postpaid subscribers relating to IoT due

43,670 postpaid subscribers relating to IoT due to the further refinement of our subscriber definition as a result of technology evolution, and (D) 9,366 postpaid fixed wireless Internet subscribers which were transferred to our retail high-speed Internet subscriber base.

(3) At the beginning of Q4 2018, we adjusted our postpaid wireless subscriber base to remove 20,000 subscribers that we divested to Xplornet as a result of BCE’s acquisition of MTS in 2017.
Blended ABPU of $68.32 increased by 0.8% in 2019, compared to 2018, driven by: • A greater mix of customers subscribing to higher-value monthly plans including unlimited data plans • The flow-through of rate increases • The favourable impact from the subscriber base adjustments performed in Q1 2019

These factors were partly offset by: • Lower data and voice overages driven by increased customer adoption of monthly plans with higher data allotments and richer voice plans • Lower ABPU generated from our long-term mobile services contract with Shared Services Canada (SSC) • The dilutive impact from the continued growth in prepaid customers driven by Lucky Mobile, our low-cost prepaid mobile service

Total gross wireless activations increased by 8.3% in 2019, compared to last year, due to higher prepaid gross activations, offset in part by lower postpaid gross activations. • Postpaid gross activations decreased by 2.9% in 2019, compared to 2018, mainly due to fewer year-over-year customer additions from our contract with SSC as the migration process is essentially complete. Excluding the impact of the SSC contract, postpaid gross activations were higher year over year, driven by our mobile network

year over year, driven by our mobile network quality, strong sales execution and focus on subscriber base management. • Prepaid gross activations increased by 61.9% in 2019, compared to last year, driven by the continued growth from Lucky Mobile along with the benefit from the national retail distribution of Lucky Mobile and Virgin Mobile prepaid services at Dollarama stores

Blended wireless churn of 1.39% increased by 0.07 pts in 2019, compared to 2018. • Postpaid churn of 1.13% improved by 0.03 pts in 2019, compared to last year, driven by the favourable impact from our ongoing investments in customer retention and network speeds • Prepaid churn of 4.44% increased by 1.27 pts in 2019, compared to the prior year, due to greater competitive intensity in the discount mobile market and the impact from the harmonization of our prepaid deactivation policy across all Bell Wireless

deactivation policy across all Bell Wireless brands from 120 days for Bell and Virgin Mobile and 150 days for Lucky Mobile to 90 days

Net activations grew by 7.4% in 2019, compared to 2018, due to higher prepaid net activations, moderated by lower postpaid net activations. • Postpaid net activations decreased by 10.2% in 2019, compared to 2018, driven by lower gross activations • Prepaid net activations increased by 81,325 in 2019, compared to last year, due to higher gross activations, offset in part by greater customer deactivations

Wireless subscribers at December 31, 2019 totaled 9,957,962, an increase of 3.6% from 9,610,482 subscribers reported at the end of 2018. This was comprised of 9,159,940 postpaid subscribers and 798,022 prepaid subscribers, an increase of 3.7% and 2.3%, respectively, year over year. At the end of 2019, the proportion of Bell Wireless customers subscribing to our postpaid service was stable at 92%, compared to last year. At the beginning of Q1 2019, we adjusted our wireless subscriber base to remove 167,929

our wireless subscriber base to remove 167,929 subscribers (72,231 postpaid and 95,698 prepaid) as follows: • 65,798 subscribers (19,195 postpaid and 46,603 prepaid), due to the completion of the shutdown of the CDMA network on April 30, 2019 • 49,095 prepaid subscribers as a result of a change to our deactivation policy, mainly from 120 days for Bell/Virgin Mobile and 150 days for Lucky Mobile to 90 days • 43,670 postpaid subscribers relating to IoT due to the further refinement of our subscriber

due to the further refinement of our subscriber definition as a result of the technology evolution • 9,366 postpaid fixed wireless Internet subscribers which were transferred to our retail high-speed Internet subscriber base

 |
| table | | 2019      | 2018      | CHANGE   | % CHANGE
----------------------------------- | --------- | --------- | -------- | ----------
Blended ABPU ($/month) (1)          | 68.32     | 67.76     | 0.56     | 0.8%
Gross activations                   | 2,117,517 | 1,954,792 | 162,725  | 8.3%
Postpaid                            | 1,568,729 | 1,615,764 | (47,035) | (2.9%)
Prepaid                             | 548,788   | 339,028   | 209,760  | 61.9%
Net activations (losses)            | 515,409   | 479,811   | 35,598   | 7.4%
Postpaid                            | 401,955   | 447,682   | (45,727) | (10.2%)
Prepaid                             | 113,454   | 32,129    | 81,325   | 253.1%
Blended churn % (average per month) | 1.39%     | 1.32%     |          | (0.07) pts
Postpaid                            | 1.13%     | 1.16%     |          | 0.03 pts
Prepaid                             | 4.44%     | 3.17%     |          | (1.27) pts
Subscribers (2) (3)                 | 9,957,962 | 9,610,482 | 347,480  | 3.6%
Postpaid (2) (3)                    | 9,159,940 | 8,830,216 | 329,724  | 3.7%
Prepaid (2)                         | 798,022   | 780,266   | 17,756   | 2.3% |


| _id | d1b326508 |
| title |  |
| text | Cost of Software License Cost of software license consists of the costs associated with software reproduction; media, packaging and delivery; documentation, and other related costs; and royalties on third-party software sold with or as part of our products. In 2019, cost of license decreased by $2.7 million, compared to 2018 principally due to a $1.7 million decrease in third-party software license fees and a $1.0 million decrease in royalty costs. In 2018, cost of software license decreased $0.2 million

cost of software license decreased $0.2 million compared to 2017 principally due to the decrease in license revenue which resulted in lower royalty costs. Royalty costs decreased $2.1 million and were partially offset by a $1.7 million increase in third-party software license fees.

Cost of Cloud Subscriptions, Maintenance and Services Year 2019 compared with year 2018 Cost of cloud subscriptions, maintenance and services consists primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The $46.8 million increase in 2019 compared to 2018 was principally due to a $25.8 million increase in compensation and other personnelrelated expense resulting from

and other personnelrelated expense resulting from increased headcount in cloud operations and professional services, a $9.4 million increase in performance-based compensation expense, and a $8.5 million increase in computer infrastructure costs related to cloud business transition. Year 2019 compared with year 2018 Cost of cloud subscriptions, maintenance and services consists primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services; and

to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The $46.8 million increase in 2019 compared to 2018 was principally due to a $25.8 million increase in compensation and other personnelrelated expense resulting from increased headcount in cloud operations and professional services, a $9.4 million increase in performance-based compensation expense, and a $8.5 million increase in computer infrastructure costs related to cloud business transition.

Year 2019 compared with year 2018
Cost of cloud subscriptions, maintenance and services consists primarily of salaries and other personnel-related expenses of
employees dedicated to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The
$46.8 million increase in 2019 compared to 2018 was principally due to a $25.8 million increase in compensation and other personnel related

expense resulting from increased headcount in cloud operations and professional services, a $9.4 million increase in
performance-based compensation expense, and a $8.5 million increase in computer infrastructure costs related to cloud business
transition.
Year 2018 compared with year 2017
The $27.5 million increase in 2018 compared to 2017 was principally due to an $11.6 million increase in performance-based

compensation expense, an $8.8 million increase in computer infrastructure cost related to cloud business transition, and a $7.0 million
increase in other compensation and other personnel-related expenses resulting from increased headcount in professional services.
Cost of Hardware
As discussed above, we adopted the new revenue recognition standard as of January 1, 2018. As a result, we now recognize our

hardware revenue net of related costs which reduces both hardware revenue and cost of sales as compared to our accounting prior to
2018. Had we presented the results for 2017 under ASC 606, cost of hardware would have been presented as zero as we would have
recognized our hardware revenue net of related costs. In 2019, cost of hardware decreased $3.5 million compared to 2018 on
decreased hardware sales, while in 2018, cost of hardware increased $3.7 million compared with 2017 on increased hardware sales

 |
| table | Year Ended December 31,                               |           |           |           |                         |
----------------------------------------------------- | --------- | --------- | --------- | ----------------------- | -----
                                                      |           |           |           | % Change vs. Prior Year |
                                                      | 2019      | 2018      | 2017      | 2019                    | 2018
(in thousands)                                        |           |           |           |                         |
Cost of software license                              | $ 2,626   | $ 5,297   | $ 5,483   | -50%                    | -3%
Cost of cloud subscriptions, maintenance and services | $282,341  | $235,584  | $208,045  | 20%                     | 13%
Cost of hardware                                      | -         | -         | $32,205   | N/A                     | -100%
Total cost of revenue                                 | $ 284,967 | $ 240,881 | $ 245,733 | 18%                     | -2% |


| _id | d1b2e8924 |
| title |  |
| text | 4. Property and Equipment
Property and equipment consist of the following (in thousands):
Depreciation and amortization expense was $0.9 million and $1.0 million for the years ended December 31, 2019 and 2018, respectively.

 |
| table | As of December 31,                             |         |
---------------------------------------------- | ------- | -------
                                               | 2019    | 2018
Computers, software, furniture and fixtures    | $1,406  | $1,407
Equipment under capital lease  3,348           | 3,348   | 3,525
Less accumulated depreciation and amortization | (3,171) | (2,448)
Property and equipment, net                    | $1,583  | $2,484 |


| _id | d1a722a18 |
| title |  |
| text | Research and development expenses consist primarily of payroll and payroll-related benefits expenses, contracted research and development expenses, and facility costs. Research and development assists with organic growth and improves product stability and functionality, and accordingly, we dedicate extensive efforts to update and upgrade our product offerings. The primary driver is typically budgeted software upgrades and software development.

Research and development expenses decreased by $1.1 million during the year ended June 30, 2019 as compared to the prior fiscal year. This was primarily due to a reduction in contract labour and consulting of $6.8 million and a reduction in the use of facility and related expenses of $4.8 million, partially offset by an increase in payroll and payroll-related benefits of $12.6 million. The increase in payroll and payroll-related benefits was driven primarily by increased headcount from recent acquisitions.

by increased headcount from recent acquisitions. Overall, our research and development expenses, as a percentage of total revenues, remained stable at approximately 11% compared to prior fiscal year.

Our research and development labour resources increased by 336 employees, from 3,331 employees at June 30, 2018 to 3,667 employees at June 30, 2019.

 |
| table | | Change between Fiscal increase (decrease) |
------------------------------------------------- | ----------------------------------------- | -------------
(In thousands)                                    | 2019 and 2018                             | 2018 and 2017
Payroll and payroll-related benefits              | $12,629                                   | $39,119
Contract labour and consulting                    | (6,791)                                   | (3,899)
Share-based compensation                          | (385)                                     | (1,490)
Travel and communication                          | (588)                                     | (343)
Facilities                                        | (4,775)                                   | 7,834
Other miscellaneous                               | (1,163)                                   | 473
Total change in research and development expenses | $(1,073)                                  | $41,694 |


| _id | d1a7166dc |
| title |  |
| text | Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to US$9,319,000 as at 30 June 2019 (2018:
US$6,890,000).
The ageing of the past due but not impaired receivables are as follows:

Accounting policy for trade and other receivables Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Trade receivables generally have 30 to 90 day terms.

AASB 9 Financial Instruments This standard addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model based on expected credit losses for the impairment of financial assets. The Group has applied the new standard on 1 July 2018 using a simplified approach for measuring expected credit losses relating to trade receivables using a lifetime expected loss allowance. To measure the expected

expected loss allowance. To measure the expected credit losses, trade receivables are grouped based on region and ageing. Customers with heightened credit risk are provided for specifically based on historical default rates and forward looking information. Where there is no reasonable expectation of recovery, balances are written-off. The application of the standard did not result in any significant impact on the measurement of the allowance for doubtful debtors.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default

or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to shortterm receivables are not discounted if the effect of discounting is immaterial.

Other receivables are recognised at amortised cost, less any provision for impairment.

 |
| table | | Consolidated |
--------------------- | ------------ | ------
                      | 2019         | 2018
                      | US$000       | US$000
0 to 1 month overdue  | 5,139        | 2,935
1 to 2 months overdue | 1,424        | 1,275
Over 2 months overdue | 2,756        | 2,680
                      | 9,319        | 6,890 |


| _id | d1b38d302 |
| title |  |
| text | Note 12 – Income Taxes
Income tax expense for the fiscal years ended December 27, 2019, December 28, 2018 and December 29, 2017 differed from amounts computed using the statutory federal income tax rate due to the following reasons:

 |
| table | | December 27, 2019  | December 28, 2018  | December 29, 2017
---------------------------------------------- | ------------------ | ------------------ | -----------------
Statutory U.S. Federal tax                     | $6,805             | $5,847             | $6,443
Differences due to:                            |                    |                    |
State and local taxes, net of federal benefit  | 2,078              | 1,906              | 1,112
Change in valuation allowance                  | 95                 | 523                | 289
Impact of the Tax Act                          | —                  | —                  | (3,573)
Stock compensation                             | (676)              | (197)              | 162
Other                                          | (92)               | (637)              | (391)
Income tax expense                             | $8,210             | $7,442             | $4,042 |