we also continued to work diligently to ensure that manufacturing and operating expense levels remain well aligned to business conditions . the market for our systems and aftermarket products and services is represented by a relatively small number of companies . in 2018 , the top 20 semiconductor chip manufacturers accounted for approximately 88.8 % of total semiconductor capital equipment spending , down from 90.9 % in 2017. our net revenue from our ten largest customers accounted for 76.9 % of total revenue for the year ended december 31 , 2018 compared to 73.3 % and 70.2 % of revenue for the years ended december 31 , 2017 and 2016 , respectively . for the year ended december 31 , 2018 , we had two customers representing 20.1 % and 12.1 % of total revenue , respectively . critical accounting estimates management 's discussion and analysis of our financial condition and results of operations are based upon axcelis ' consolidated financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets , liabilities , revenue and expenses , and related disclosure of contingent assets and liabilities . on an on‑going basis , we evaluate our estimates and assumptions . management 's estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and 18 liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . we believe the following accounting policies are critical in the portrayal of our financial condition and results of operations and require management 's most significant judgments and estimates in the preparation of our consolidated financial statements . for additional accounting policies see note 2 to the consolidated financial statements for the year ended december 31 , 2018 included in this annual report on form 10-k. revenue recognition our accounting policies relating to the recognition of revenue require management to make estimates , determinations and judgments based on historical experience and on various other assumptions , which include ( i ) the existence of a contract with the customer , ( ii ) the identification of the performance obligations in the contract , ( iii ) the value of any variable consideration in the contract , ( iv ) the stand alone selling price of multiple obligations in the contract , for the purpose of allocating the consideration in the contract , and ( v ) determining when a performance obligation has been met . our revenue recognition policies are set forth in section ( i ) of note 2 , summary of significant accounting policies , to the consolidated financial statements for the year ended december 31 , 2018 included in this annual report on form 10-k. recognition of revenue based on incorrect judgments , including an erroneous allocation of the estimated sales price between the units of accounting , could result in inappropriate recognition of revenue , or incorrect timing of revenue recognition , which could have a material effect on our financial condition and results of operations . impairment of long‑lived assets we record impairment losses on long‑lived assets when events and circumstances indicate that these assets might not be recoverable . recoverability is measured by a comparison of the assets ' carrying amount to their expected future undiscounted net cash flows . if such assets are considered to be impaired , the impairment is measured based on the amount by which the carrying value exceeds its fair value . actual performance could be materially different from our current forecasts , which could impact estimates of undiscounted cash flows and may result in the impairment of the carrying amount of the long‑lived assets in the future . this could be caused by strategic decisions made in response to economic and competitive conditions , the impact of the economic environment on our customer base or a material adverse change in our relationships with significant customers . we did not record an impairment charge in the years ended december 31 , 2018 , 2017 or 2016. accounts receivable—allowance for doubtful accounts we record an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments . our allowance for doubtful accounts is established based on a specific assessment of collectability of our customer accounts . if the financial condition of our customers were to deteriorate , resulting in an impairment of their ability to make payments , additional allowances may be necessary . inventory—provision for excess and obsolescence and lower of cost or net realizable value we record a provision for estimated excess and obsolete inventory and lower of cost or net realizable value . the provision is determined using management 's assumptions of materials usage , based on estimates of forecasted and historical demand and market conditions . if actual market conditions become less favorable than those projected by management , additional inventory write‑downs may be required . although we make every effort to ensure the accuracy of our forecasts or product demand and pricing assumptions , any significant unanticipated changes in demand , pricing , or technical developments would significantly impact the value of our inventory and our reported operating results . in the future , if we determine that inventory needs 19 to be written down , we will recognize such costs in our cost of revenue at the time of such determination . if we subsequently sell product that has previously been written down , our gross margin in that period will be favorably impacted . story_separator_special_tag 24 operating expenses the following table sets forth our operating expenses : replace_table_token_4_th our operating expenses consist primarily of personnel costs , including salaries , commissions , bonuses , stock-based compensation and related benefits and taxes ; project material costs related to the design and development of new products and enhancement of existing products ; and professional fees , travel and depreciation expenses . personnel costs are our largest expense , representing $ 74.3 million , or 62.1 % of our total operating expenses , for the year ended december 31 , 2018 ; $ 64.5 million , or 63.0 % , of our total operating expenses for the year ended december 31 , 2017 ; and $ 47.6 million , or 57.5 % , of our total operating expenses for the year ended december 31 , 2016. research and development replace_table_token_5_th our ability to remain competitive depends largely on continuously developing innovative technology , with new and enhanced features and systems and introducing them at competitive prices on a timely basis . accordingly , based on our strategic plan , we establish annual r & d budgets to fund programs that we expect will drive competitive advantages . 2018 compared with 2017 research and development expense was $ 51.9 million in 2018 , an increase of $ 8.8 million , or 20.4 % , compared with $ 43.1 million in 2017. the increase was primarily due to increased headcount and to project costs to support development of new purion products and extensions . 2017 compared with 2016 research and development expense was $ 43.1 million in 2017 , an increase of approximately $ 8.7 million , or 25.2 % , compared with $ 34.4 million in 2016. the increase was primarily due to variable incentive plan expense and to a lesser extent to increased headcount . 25 sales and marketing replace_table_token_6_th our sales and marketing expenses result primarily from the sale of our equipment and services through our direct sales force . 2018 compared with 2017 sales and marketing expense was $ 34.6 million in 2018 , an increase of $ 6.1 million , or 21.3 % , compared with $ 28.5 million in 2017. the increase was primarily due to increased headcount . 2017 compared with 2016 sales and marketing expense was $ 28.5 million in 2017 , an increase of $ 4.7 million , or 19.7 % , compared with $ 23.8 million in 2016. the increase was primarily due to variable incentive plan expense and to a lesser extent to increased headcount . general and administrative replace_table_token_7_th our general and administrative expenses result primarily from the costs associated with our executive , finance , information technology , legal and human resource functions . 2018 compared with 2017 general and administrative expense was $ 33.2 million in 2018 , an increase of $ 2.4 million , or 7.8 % compared with $ 30.8 million in 2017. the increase was primarily due to increases in professional and consulting fees and to a lesser extent , increased headcount . 2017 compared with 2016 general and administrative expense was $ 30.8 million in 2017 , an increase of $ 6.4 million , or 26.0 % compared with $ 24.5 million in 2016. the increase was primarily due to variable incentive plan expense and to a lesser extent to increased headcount . 26 restructuring we from time to time incur expenses relating to restructuring . 2017 compared with 2016 during the year ended december 31 , 2016 we recorded $ 0.3 million to restructuring expense due to a consolidation in our customer base . other ( expense ) income other ( expense ) income consists primarily of interest expense relating to the lease obligation we incurred in connection with the 2015 sale of our headquarters facility ( “ sale leaseback ” ) and other financing obligations , foreign exchange gains and losses attributable to fluctuations of the u.s. dollar against the local currencies of certain of the countries in which we operate , as well as interest earned on our invested cash balances . replace_table_token_8_th 2018 compared with 2017 other expense for the year ended december 31 , 2018 was $ 5.3 million , which includes $ 5.1 million of interest expense related to our sale leaseback obligation , $ 1.3 million of foreign currency translation losses , other miscellaneous expense of $ 1.2 million , partially offset by interest income of $ 2.3 million . other expense for the year ended december 31 , 2017 was $ 4.0 million , which includes $ 5.1 million of interest expense related to our sale leaseback obligation and other miscellaneous expense of $ 0.7 million , partially offset by interest income of $ 0.7 million and $ 1.1 million of foreign currency translation gains . 2017 compared with 2016 other expense for the year ended december 31 , 2017 was $ 4.0 million , which includes $ 5.1 million of interest expense related to our sale leaseback obligation and other miscellaneous expense of $ 0.7 million , offset by interest income of $ 0.7 million and $ 1.1 million of foreign currency translation gains . other expense for the year ended december 31 , 2016 was $ 5.6 million and includes interest expense of $ 5.1 million , interest income of $ 0.2 million and $ 0.6 million of foreign currency translation loss . income taxes replace_table_token_9_th 27 2018 compared with 2017 income tax expense was $ 8.8 million for the year ended december 31 , 2018 compared to an income tax benefit of $ 83.1 million in the previous year . the income tax expense of $ 8.8 million in 2018 reflects a net effective tax rate of 16.1 % on our worldwide pre-tax income . the income tax benefit of $ 83.1 million in 2017 was primarily due to the release of our valuation allowance on our deferred tax assets . we have significant net operating loss carryforwards in the united

liquidity and capital resources our liquidity is affected by many factors . some of these relate specifically to the operations of our business . for example , our sales and other factors relate to the uncertainties of global economies , including the availability of credit and the condition of the overall semiconductor capital equipment industry . our established cost structure does not vary significantly with changes in volume . we experience fluctuations in operating results and cash flows depending on fluctuations in our revenue level . in 2018 , $ 47.0 million of cash was provided by operating activities . this compares to $ 56.3 million of cash provided by operations in 2017. cash and cash equivalents at december 31 , 2018 was $ 178.0 million , compared to $ 133.4 million at december 31 , 2017. approximately $ 16.2 million of cash was located in foreign jurisdictions as of december 31 , 2018. in addition to the cash and cash equivalent balance at december 31 , 2018 , we had $ 6.9 million in restricted cash which relates to a $ 5.9 million letter of credit associated with the security deposit for the lease on our corporate headquarters in beverly , massachusetts , a $ 0.8 million letter of credit relating to workers ' compensation insurance , a $ 0.1 million bank guarantee and a $ 0.1 million deposit relating to customs activity . working capital at december 31 , 2018 was $ 311.8 million . at december 31 , 2018 , we had no bank debt . capital expenditures were $ 4.7 million and $ 7.3 million for the years ended december 31 , 2018 and 2017 , respectively .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources our liquidity is affected by many factors . some of these relate specifically to the operations of our business . for example , our sales and other factors relate to the uncertainties of global economies , including the availability of credit and the condition of the overall semiconductor capital equipment industry . our established cost structure does not vary significantly with changes in volume . we experience fluctuations in operating results and cash flows depending on fluctuations in our revenue level . in 2018 , $ 47.0 million of cash was provided by operating activities . this compares to $ 56.3 million of cash provided by operations in 2017. cash and cash equivalents at december 31 , 2018 was $ 178.0 million , compared to $ 133.4 million at december 31 , 2017. approximately $ 16.2 million of cash was located in foreign jurisdictions as of december 31 , 2018. in addition to the cash and cash equivalent balance at december 31 , 2018 , we had $ 6.9 million in restricted cash which relates to a $ 5.9 million letter of credit associated with the security deposit for the lease on our corporate headquarters in beverly , massachusetts , a $ 0.8 million letter of credit relating to workers ' compensation insurance , a $ 0.1 million bank guarantee and a $ 0.1 million deposit relating to customs activity . working capital at december 31 , 2018 was $ 311.8 million . at december 31 , 2018 , we had no bank debt . capital expenditures were $ 4.7 million and $ 7.3 million for the years ended december 31 , 2018 and 2017 , respectively .
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 Suspicious Activity Report : we also continued to work diligently to ensure that manufacturing and operating expense levels remain well aligned to business conditions . the market for our systems and aftermarket products and services is represented by a relatively small number of companies . in 2018 , the top 20 semiconductor chip manufacturers accounted for approximately 88.8 % of total semiconductor capital equipment spending , down from 90.9 % in 2017. our net revenue from our ten largest customers accounted for 76.9 % of total revenue for the year ended december 31 , 2018 compared to 73.3 % and 70.2 % of revenue for the years ended december 31 , 2017 and 2016 , respectively . for the year ended december 31 , 2018 , we had two customers representing 20.1 % and 12.1 % of total revenue , respectively . critical accounting estimates management 's discussion and analysis of our financial condition and results of operations are based upon axcelis ' consolidated financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets , liabilities , revenue and expenses , and related disclosure of contingent assets and liabilities . on an on‑going basis , we evaluate our estimates and assumptions . management 's estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and 18 liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . we believe the following accounting policies are critical in the portrayal of our financial condition and results of operations and require management 's most significant judgments and estimates in the preparation of our consolidated financial statements . for additional accounting policies see note 2 to the consolidated financial statements for the year ended december 31 , 2018 included in this annual report on form 10-k. revenue recognition our accounting policies relating to the recognition of revenue require management to make estimates , determinations and judgments based on historical experience and on various other assumptions , which include ( i ) the existence of a contract with the customer , ( ii ) the identification of the performance obligations in the contract , ( iii ) the value of any variable consideration in the contract , ( iv ) the stand alone selling price of multiple obligations in the contract , for the purpose of allocating the consideration in the contract , and ( v ) determining when a performance obligation has been met . our revenue recognition policies are set forth in section ( i ) of note 2 , summary of significant accounting policies , to the consolidated financial statements for the year ended december 31 , 2018 included in this annual report on form 10-k. recognition of revenue based on incorrect judgments , including an erroneous allocation of the estimated sales price between the units of accounting , could result in inappropriate recognition of revenue , or incorrect timing of revenue recognition , which could have a material effect on our financial condition and results of operations . impairment of long‑lived assets we record impairment losses on long‑lived assets when events and circumstances indicate that these assets might not be recoverable . recoverability is measured by a comparison of the assets ' carrying amount to their expected future undiscounted net cash flows . if such assets are considered to be impaired , the impairment is measured based on the amount by which the carrying value exceeds its fair value . actual performance could be materially different from our current forecasts , which could impact estimates of undiscounted cash flows and may result in the impairment of the carrying amount of the long‑lived assets in the future . this could be caused by strategic decisions made in response to economic and competitive conditions , the impact of the economic environment on our customer base or a material adverse change in our relationships with significant customers . we did not record an impairment charge in the years ended december 31 , 2018 , 2017 or 2016. accounts receivable—allowance for doubtful accounts we record an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments . our allowance for doubtful accounts is established based on a specific assessment of collectability of our customer accounts . if the financial condition of our customers were to deteriorate , resulting in an impairment of their ability to make payments , additional allowances may be necessary . inventory—provision for excess and obsolescence and lower of cost or net realizable value we record a provision for estimated excess and obsolete inventory and lower of cost or net realizable value . the provision is determined using management 's assumptions of materials usage , based on estimates of forecasted and historical demand and market conditions . if actual market conditions become less favorable than those projected by management , additional inventory write‑downs may be required . although we make every effort to ensure the accuracy of our forecasts or product demand and pricing assumptions , any significant unanticipated changes in demand , pricing , or technical developments would significantly impact the value of our inventory and our reported operating results . in the future , if we determine that inventory needs 19 to be written down , we will recognize such costs in our cost of revenue at the time of such determination . if we subsequently sell product that has previously been written down , our gross margin in that period will be favorably impacted . story_separator_special_tag 24 operating expenses the following table sets forth our operating expenses : replace_table_token_4_th our operating expenses consist primarily of personnel costs , including salaries , commissions , bonuses , stock-based compensation and related benefits and taxes ; project material costs related to the design and development of new products and enhancement of existing products ; and professional fees , travel and depreciation expenses . personnel costs are our largest expense , representing $ 74.3 million , or 62.1 % of our total operating expenses , for the year ended december 31 , 2018 ; $ 64.5 million , or 63.0 % , of our total operating expenses for the year ended december 31 , 2017 ; and $ 47.6 million , or 57.5 % , of our total operating expenses for the year ended december 31 , 2016. research and development replace_table_token_5_th our ability to remain competitive depends largely on continuously developing innovative technology , with new and enhanced features and systems and introducing them at competitive prices on a timely basis . accordingly , based on our strategic plan , we establish annual r & d budgets to fund programs that we expect will drive competitive advantages . 2018 compared with 2017 research and development expense was $ 51.9 million in 2018 , an increase of $ 8.8 million , or 20.4 % , compared with $ 43.1 million in 2017. the increase was primarily due to increased headcount and to project costs to support development of new purion products and extensions . 2017 compared with 2016 research and development expense was $ 43.1 million in 2017 , an increase of approximately $ 8.7 million , or 25.2 % , compared with $ 34.4 million in 2016. the increase was primarily due to variable incentive plan expense and to a lesser extent to increased headcount . 25 sales and marketing replace_table_token_6_th our sales and marketing expenses result primarily from the sale of our equipment and services through our direct sales force . 2018 compared with 2017 sales and marketing expense was $ 34.6 million in 2018 , an increase of $ 6.1 million , or 21.3 % , compared with $ 28.5 million in 2017. the increase was primarily due to increased headcount . 2017 compared with 2016 sales and marketing expense was $ 28.5 million in 2017 , an increase of $ 4.7 million , or 19.7 % , compared with $ 23.8 million in 2016. the increase was primarily due to variable incentive plan expense and to a lesser extent to increased headcount . general and administrative replace_table_token_7_th our general and administrative expenses result primarily from the costs associated with our executive , finance , information technology , legal and human resource functions . 2018 compared with 2017 general and administrative expense was $ 33.2 million in 2018 , an increase of $ 2.4 million , or 7.8 % compared with $ 30.8 million in 2017. the increase was primarily due to increases in professional and consulting fees and to a lesser extent , increased headcount . 2017 compared with 2016 general and administrative expense was $ 30.8 million in 2017 , an increase of $ 6.4 million , or 26.0 % compared with $ 24.5 million in 2016. the increase was primarily due to variable incentive plan expense and to a lesser extent to increased headcount . 26 restructuring we from time to time incur expenses relating to restructuring . 2017 compared with 2016 during the year ended december 31 , 2016 we recorded $ 0.3 million to restructuring expense due to a consolidation in our customer base . other ( expense ) income other ( expense ) income consists primarily of interest expense relating to the lease obligation we incurred in connection with the 2015 sale of our headquarters facility ( “ sale leaseback ” ) and other financing obligations , foreign exchange gains and losses attributable to fluctuations of the u.s. dollar against the local currencies of certain of the countries in which we operate , as well as interest earned on our invested cash balances . replace_table_token_8_th 2018 compared with 2017 other expense for the year ended december 31 , 2018 was $ 5.3 million , which includes $ 5.1 million of interest expense related to our sale leaseback obligation , $ 1.3 million of foreign currency translation losses , other miscellaneous expense of $ 1.2 million , partially offset by interest income of $ 2.3 million . other expense for the year ended december 31 , 2017 was $ 4.0 million , which includes $ 5.1 million of interest expense related to our sale leaseback obligation and other miscellaneous expense of $ 0.7 million , partially offset by interest income of $ 0.7 million and $ 1.1 million of foreign currency translation gains . 2017 compared with 2016 other expense for the year ended december 31 , 2017 was $ 4.0 million , which includes $ 5.1 million of interest expense related to our sale leaseback obligation and other miscellaneous expense of $ 0.7 million , offset by interest income of $ 0.7 million and $ 1.1 million of foreign currency translation gains . other expense for the year ended december 31 , 2016 was $ 5.6 million and includes interest expense of $ 5.1 million , interest income of $ 0.2 million and $ 0.6 million of foreign currency translation loss . income taxes replace_table_token_9_th 27 2018 compared with 2017 income tax expense was $ 8.8 million for the year ended december 31 , 2018 compared to an income tax benefit of $ 83.1 million in the previous year . the income tax expense of $ 8.8 million in 2018 reflects a net effective tax rate of 16.1 % on our worldwide pre-tax income . the income tax benefit of $ 83.1 million in 2017 was primarily due to the release of our valuation allowance on our deferred tax assets . we have significant net operating loss carryforwards in the united

