the surcharge mechanism protects our net income on such sales except for the lag effect discussed above . however , surcharges have had a dilutive effect on our gross margin and operating margin percentages as described later in this report . approximately 25 percent of our net sales are sales to customers under firm price sales arrangements . firm price sales arrangements involve a risk of profit margin fluctuations , particularly when raw material prices are volatile . in order to reduce the risk of fluctuating profit margins on these sales , we enter into commodity forward contracts to purchase certain critical raw materials necessary to produce the related products sold . firm price sales arrangements generally include certain annual purchasing commitments and consumption schedules agreed to by the customers at selling prices based on raw material prices at the time the arrangements are established . if a customer fails to meet the volume commitments ( or the consumption schedule deviates from the agreed-upon terms of the firm price sales arrangements ) , the company may need to absorb the gains or losses associated with the commodity forward contracts on a temporary basis . gains or losses associated with commodity forward contracts are reclassified to earnings/loss when earnings are impacted by the hedged transaction . because we value most of our inventory under the lifo costing methodology , changes in the cost of raw materials and production activities are recognized in cost of sales in the current period attempting to match the most recently incurred costs with revenues . gains and or losses on the commodity forward contracts are reclassified from other comprehensive income together with the actual purchase price of the underlying commodities when the underlying commodities are purchased and recorded in inventory . to the extent that the total purchase price of the commodities , inclusive of the gains or losses on the commodity forward contracts , are higher or lower relative to the beginning of year costs , our cost of goods sold reflects such amounts . accordingly , the gains and or losses associated with commodity forward contracts may not impact the same period that the firm price sales arrangements revenue is recognized , and comparisons of gross profit from period to period may be impacted . these firm price sales arrangements are expected to continue as we look to strengthen our long-term customer relationships by expanding , renewing and , in certain cases , extending to a longer term , our customer long-term arrangements . we produce hundreds of grades of materials , with a wide range of pricing and profit levels depending on the grade . in addition , our product mix within a period is subject to the fluctuating order patterns of our customers as well as decisions we may make on participation in certain products based on available capacity including the impacts of capacity commitments we may have under existing customer agreements . while we expect to see positive contribution from a more favorable product mix in our margin performance over time , the impact by period may fluctuate , and period to period comparisons may vary . net pension expense net pension expense , as we define it below , includes the net periodic benefit costs related to both our pension and other postretirement plans . the net periodic benefit costs are determined annually based on beginning of year balances and are recorded ratably throughout the fiscal year , unless a significant re-measurement event occurs . the following is a summary of the net periodic benefit costs for the years ended june 30 , 2019 , 2018 and 2017 : replace_table_token_8_th in september 2016 , we announced changes to retirement plans we offer to certain employees . benefits accrued to eligible participants of our largest qualified defined benefit pension plan and certain non-qualified pension plans were frozen effective december 31 , 2016. approximately 1,900 affected employees were transitioned to the company 's 401 ( k ) plan that has been in effect for eligible employees since 2012 , when the pension plan was closed to new entrants . we recognized the plan freeze during fiscal year 2017 as a curtailment , since it eliminated the accrual for a significant number of participants for all of their future services . we also made a voluntary pension contribution of $ 100.0 million to the affected plan in october 2016 . 19 the service cost component of net pension expense represents the estimated cost of future pension liabilities earned associated with active employees . the pension earnings , interest and deferrals ( “ pension eid ” ) is comprised of the expected return on plan assets , interest costs on the projected benefit obligations of the plans and amortization of actuarial gains and losses and prior service costs . net pension expense is recorded in accounts that are included in both the cost of sales and selling , general and administrative expenses based on the function of the associated employees and in other income ( expense ) , net . the following is a summary of the classification of net pension expense for the years ended june 30 , 2019 , 2018 and 2017 : replace_table_token_9_th as of june 30 , 2019 and 2018 , amounts capitalized in gross inventory were $ 1.7 million and $ 1.7 million , respectively . operating performance overview we believe fiscal year 2019 was a successful year as strong execution of our commercial and manufacturing strategies combined with growing market demand across most markets resulted in our best operating income performance since fiscal year 2013. we made significant progress in the following areas : we expanded customer relationships through market share gains with new and existing customers based on the strength of our solutions focused customer approach . through the ongoing implementation of the carpenter operating model , we have unlocked incremental capacity through efficiency and productivity improvements across our sao and pep businesses . story_separator_special_tag sales to the medical market increased 40 percent to $ 175.3 million from fiscal year 2017. excluding surcharge revenue , sales increased 29 percent on 19 percent higher shipment volume . the results reflect improved product mix for higher value solutions , market share gains with key customers and the positive impact of supply chain inventory rebuilding for titanium materials within the orthopedic and cardiology sub-markets . sales to the energy market of $ 146.5 million reflected a 6 percent increase from fiscal year 2017. excluding surcharge revenue , sales increased 6 percent . the results were driven by an increase in the oil and gas sub-market , particularly rental and replacement activity through our amega west services ( “ amega west ” ) business offset by weaker demand for materials used in power generation applications , which has been significantly impacted by depressed industrial gas turbine industry conditions . transportation market sales increased 9 percent from fiscal year 2017 to $ 157.0 million . excluding surcharge revenue , sales increased 4 percent on 1 percent higher shipment volume . the results reflect a strengthening mix of medium and heavy-duty truck applications , partially offset by softer demand in light duty vehicles applications . industrial and consumer market sales increased 22 percent to $ 364.9 million for fiscal year 2018. excluding surcharge revenue , sales increased 14 percent on 7 percent higher shipment volume . the results reflect the impact of stronger demand for materials used in industrial applications due in part to a moderate increase in recovery of oil and gas activity . 26 gross profit gross profit in fiscal year 2018 increased to $ 382.3 million , or 17.7 percent of net sales from $ 300.8 million , or 16.7 percent of net sales for fiscal year 2017. excluding the impact of the surcharge revenue , our gross margin in fiscal year 2018 was 21.3 percent compared to 19.3 percent in fiscal year 2017. the results reflect the impact of stronger demand and improved product mix coupled with operating cost improvements compared to fiscal year 2017. our surcharge mechanism is structured to recover increases in raw material costs , although in certain cases with a lag effect as discussed above . while the surcharge generally protects the absolute gross profit dollars , it does have a dilutive effect on gross margin as a percent of sales . the following represents a summary of the dilutive impact of the surcharge on gross margin . we present and discuss these financial measures because management believes removing the impact of surcharge provides a more consistent and meaningful basis for comparing results of operations from period to period . see the section “ non-gaap financial measures ” below for further discussion of these financial measures . replace_table_token_19_th selling , general and administrative expenses selling , general and administrative expenses in fiscal year 2018 were $ 193.0 million , or 8.9 percent of net sales ( 10.8 percent of net sales excluding surcharge revenue ) , compared to $ 176.1 million , or 9.8 percent of net sales ( 11.3 percent of net sales excluding surcharge revenue ) , in fiscal year 2017. selling , general and administrative expenses increased in fiscal year 2018 primarily due to higher variable compensation expense partially offset by lower pension expense compared to fiscal year 2017. operating income our operating income in fiscal year 2018 increased to $ 189.3 million , or 8.8 percent of net sales as compared with $ 121.5 million , or 6.8 percent in net sales in fiscal year 2017. excluding surcharge revenue and special items , adjusted operating margin was 10.6 percent for the fiscal year 2018 and 8.0 percent for fiscal year 2017. the increase in the operating margin reflects the stronger demand and improved product mix coupled with operating cost improvements partially offset by higher variable compensation expense compared to fiscal year 2017. operating income has been impacted by special items . the following presents our operating income and operating margin , in each case excluding the impact of surcharge on net sales and the loss on divestiture of business . we present and discuss these financial measures because management believes removing the impact of these items provides a more consistent and meaningful basis for comparing results of operations from period to period . see the section “ non-gaap financial measures ” below for further discussion of these financial measures . 27 replace_table_token_20_th interest expense fiscal year 2018 interest expense was $ 28.3 million compared to $ 29.8 million in fiscal year 2017. we have used interest rate swaps to achieve a level of floating rate debt to fixed rate debt . interest expense for fiscal year 2018 includes net gains from interest rate swaps of $ 0.4 million compared with $ 1.8 million of net gains from interest rate swaps for fiscal year 2017. capitalized interest reduced interest expense by $ 2.8 million for fiscal year 2018 compared to $ 1.3 million in fiscal year 2017. other expense , net other expense , net for fiscal year 2018 was $ 0.8 million as compared with other expense , net of $ 21.5 million for fiscal year 2017. the company adopted the provisions of asu 2017-07 , compensation - retirement benefits ( topic 715 ) , effective july 1 , 2018 on a retrospective basis . for fiscal year ended june 30 , 2018 , $ 0.1 million and $ 2.0 million have been reclassified from cost of goods sold and selling , general and administrative expenses , respectively , to other income ( expense ) , net on the consolidated statements of income . for fiscal year ended june 30 , 2017 , $ 16.5 million and $ 7.8 million have been reclassified from cost of goods sold and selling , general and administrative expenses , respectively , to other income ( expense ) , net on the consolidated statements of income . see note 2 to our consolidated

liquidity and financial resources we ended fiscal year 2019 with $ 27.0 million of cash and cash equivalents , a decrease of $ 29.2 million from fiscal year 2018 . during fiscal year 2019 our cash provided from operating activities was $ 232.4 million as compared with $ 209.2 million in fiscal year 2018 . our free cash flow , which we define under “ non-gaap financial measures ” below , was negative $ 53.7 million as compared to positive $ 34.7 million for the same period a year ago . included in the free cash flow results during the current period is the acquisition of a business , lpw technology ltd. , for a cash purchase price of $ 79.0 million . during the prior fiscal year , we acquired a business , mb calram llc , for a cash purchase price of $ 13.3 million . the free cash flow results also reflect higher capital spending levels in the current period as we increased our investment in key growth initiatives during fiscal year 2019. capital expenditures for property , plant , equipment and software were $ 180.3 million for fiscal year 2019 as compared to $ 135.0 million for fiscal year 2018. in fiscal year 2020 , we expect capital expenditures to be approximately $ 170 million.


 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 financial resources we ended fiscal year 2019 with $ 27.0 million of cash and cash equivalents , a decrease of $ 29.2 million from fiscal year 2018 . during fiscal year 2019 our cash provided from operating activities was $ 232.4 million as compared with $ 209.2 million in fiscal year 2018 . our free cash flow , which we define under “ non-gaap financial measures ” below , was negative $ 53.7 million as compared to positive $ 34.7 million for the same period a year ago . included in the free cash flow results during the current period is the acquisition of a business , lpw technology ltd. , for a cash purchase price of $ 79.0 million . during the prior fiscal year , we acquired a business , mb calram llc , for a cash purchase price of $ 13.3 million . the free cash flow results also reflect higher capital spending levels in the current period as we increased our investment in key growth initiatives during fiscal year 2019. capital expenditures for property , plant , equipment and software were $ 180.3 million for fiscal year 2019 as compared to $ 135.0 million for fiscal year 2018. in fiscal year 2020 , we expect capital expenditures to be approximately $ 170 million.
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 Suspicious Activity Report : the surcharge mechanism protects our net income on such sales except for the lag effect discussed above . however , surcharges have had a dilutive effect on our gross margin and operating margin percentages as described later in this report . approximately 25 percent of our net sales are sales to customers under firm price sales arrangements . firm price sales arrangements involve a risk of profit margin fluctuations , particularly when raw material prices are volatile . in order to reduce the risk of fluctuating profit margins on these sales , we enter into commodity forward contracts to purchase certain critical raw materials necessary to produce the related products sold . firm price sales arrangements generally include certain annual purchasing commitments and consumption schedules agreed to by the customers at selling prices based on raw material prices at the time the arrangements are established . if a customer fails to meet the volume commitments ( or the consumption schedule deviates from the agreed-upon terms of the firm price sales arrangements ) , the company may need to absorb the gains or losses associated with the commodity forward contracts on a temporary basis . gains or losses associated with commodity forward contracts are reclassified to earnings/loss when earnings are impacted by the hedged transaction . because we value most of our inventory under the lifo costing methodology , changes in the cost of raw materials and production activities are recognized in cost of sales in the current period attempting to match the most recently incurred costs with revenues . gains and or losses on the commodity forward contracts are reclassified from other comprehensive income together with the actual purchase price of the underlying commodities when the underlying commodities are purchased and recorded in inventory . to the extent that the total purchase price of the commodities , inclusive of the gains or losses on the commodity forward contracts , are higher or lower relative to the beginning of year costs , our cost of goods sold reflects such amounts . accordingly , the gains and or losses associated with commodity forward contracts may not impact the same period that the firm price sales arrangements revenue is recognized , and comparisons of gross profit from period to period may be impacted . these firm price sales arrangements are expected to continue as we look to strengthen our long-term customer relationships by expanding , renewing and , in certain cases , extending to a longer term , our customer long-term arrangements . we produce hundreds of grades of materials , with a wide range of pricing and profit levels depending on the grade . in addition , our product mix within a period is subject to the fluctuating order patterns of our customers as well as decisions we may make on participation in certain products based on available capacity including the impacts of capacity commitments we may have under existing customer agreements . while we expect to see positive contribution from a more favorable product mix in our margin performance over time , the impact by period may fluctuate , and period to period comparisons may vary . net pension expense net pension expense , as we define it below , includes the net periodic benefit costs related to both our pension and other postretirement plans . the net periodic benefit costs are determined annually based on beginning of year balances and are recorded ratably throughout the fiscal year , unless a significant re-measurement event occurs . the following is a summary of the net periodic benefit costs for the years ended june 30 , 2019 , 2018 and 2017 : replace_table_token_8_th in september 2016 , we announced changes to retirement plans we offer to certain employees . benefits accrued to eligible participants of our largest qualified defined benefit pension plan and certain non-qualified pension plans were frozen effective december 31 , 2016. approximately 1,900 affected employees were transitioned to the company 's 401 ( k ) plan that has been in effect for eligible employees since 2012 , when the pension plan was closed to new entrants . we recognized the plan freeze during fiscal year 2017 as a curtailment , since it eliminated the accrual for a significant number of participants for all of their future services . we also made a voluntary pension contribution of $ 100.0 million to the affected plan in october 2016 . 19 the service cost component of net pension expense represents the estimated cost of future pension liabilities earned associated with active employees . the pension earnings , interest and deferrals ( “ pension eid ” ) is comprised of the expected return on plan assets , interest costs on the projected benefit obligations of the plans and amortization of actuarial gains and losses and prior service costs . net pension expense is recorded in accounts that are included in both the cost of sales and selling , general and administrative expenses based on the function of the associated employees and in other income ( expense ) , net . the following is a summary of the classification of net pension expense for the years ended june 30 , 2019 , 2018 and 2017 : replace_table_token_9_th as of june 30 , 2019 and 2018 , amounts capitalized in gross inventory were $ 1.7 million and $ 1.7 million , respectively . operating performance overview we believe fiscal year 2019 was a successful year as strong execution of our commercial and manufacturing strategies combined with growing market demand across most markets resulted in our best operating income performance since fiscal year 2013. we made significant progress in the following areas : we expanded customer relationships through market share gains with new and existing customers based on the strength of our solutions focused customer approach . through the ongoing implementation of the carpenter operating model , we have unlocked incremental capacity through efficiency and productivity improvements across our sao and pep businesses . story_separator_special_tag sales to the medical market increased 40 percent to $ 175.3 million from fiscal year 2017. excluding surcharge revenue , sales increased 29 percent on 19 percent higher shipment volume . the results reflect improved product mix for higher value solutions , market share gains with key customers and the positive impact of supply chain inventory rebuilding for titanium materials within the orthopedic and cardiology sub-markets . sales to the energy market of $ 146.5 million reflected a 6 percent increase from fiscal year 2017. excluding surcharge revenue , sales increased 6 percent . the results were driven by an increase in the oil and gas sub-market , particularly rental and replacement activity through our amega west services ( “ amega west ” ) business offset by weaker demand for materials used in power generation applications , which has been significantly impacted by depressed industrial gas turbine industry conditions . transportation market sales increased 9 percent from fiscal year 2017 to $ 157.0 million . excluding surcharge revenue , sales increased 4 percent on 1 percent higher shipment volume . the results reflect a strengthening mix of medium and heavy-duty truck applications , partially offset by softer demand in light duty vehicles applications . industrial and consumer market sales increased 22 percent to $ 364.9 million for fiscal year 2018. excluding surcharge revenue , sales increased 14 percent on 7 percent higher shipment volume . the results reflect the impact of stronger demand for materials used in industrial applications due in part to a moderate increase in recovery of oil and gas activity . 26 gross profit gross profit in fiscal year 2018 increased to $ 382.3 million , or 17.7 percent of net sales from $ 300.8 million , or 16.7 percent of net sales for fiscal year 2017. excluding the impact of the surcharge revenue , our gross margin in fiscal year 2018 was 21.3 percent compared to 19.3 percent in fiscal year 2017. the results reflect the impact of stronger demand and improved product mix coupled with operating cost improvements compared to fiscal year 2017. our surcharge mechanism is structured to recover increases in raw material costs , although in certain cases with a lag effect as discussed above . while the surcharge generally protects the absolute gross profit dollars , it does have a dilutive effect on gross margin as a percent of sales . the following represents a summary of the dilutive impact of the surcharge on gross margin . we present and discuss these financial measures because management believes removing the impact of surcharge provides a more consistent and meaningful basis for comparing results of operations from period to period . see the section “ non-gaap financial measures ” below for further discussion of these financial measures . replace_table_token_19_th selling , general and administrative expenses selling , general and administrative expenses in fiscal year 2018 were $ 193.0 million , or 8.9 percent of net sales ( 10.8 percent of net sales excluding surcharge revenue ) , compared to $ 176.1 million , or 9.8 percent of net sales ( 11.3 percent of net sales excluding surcharge revenue ) , in fiscal year 2017. selling , general and administrative expenses increased in fiscal year 2018 primarily due to higher variable compensation expense partially offset by lower pension expense compared to fiscal year 2017. operating income our operating income in fiscal year 2018 increased to $ 189.3 million , or 8.8 percent of net sales as compared with $ 121.5 million , or 6.8 percent in net sales in fiscal year 2017. excluding surcharge revenue and special items , adjusted operating margin was 10.6 percent for the fiscal year 2018 and 8.0 percent for fiscal year 2017. the increase in the operating margin reflects the stronger demand and improved product mix coupled with operating cost improvements partially offset by higher variable compensation expense compared to fiscal year 2017. operating income has been impacted by special items . the following presents our operating income and operating margin , in each case excluding the impact of surcharge on net sales and the loss on divestiture of business . we present and discuss these financial measures because management believes removing the impact of these items provides a more consistent and meaningful basis for comparing results of operations from period to period . see the section “ non-gaap financial measures ” below for further discussion of these financial measures . 27 replace_table_token_20_th interest expense fiscal year 2018 interest expense was $ 28.3 million compared to $ 29.8 million in fiscal year 2017. we have used interest rate swaps to achieve a level of floating rate debt to fixed rate debt . interest expense for fiscal year 2018 includes net gains from interest rate swaps of $ 0.4 million compared with $ 1.8 million of net gains from interest rate swaps for fiscal year 2017. capitalized interest reduced interest expense by $ 2.8 million for fiscal year 2018 compared to $ 1.3 million in fiscal year 2017. other expense , net other expense , net for fiscal year 2018 was $ 0.8 million as compared with other expense , net of $ 21.5 million for fiscal year 2017. the company adopted the provisions of asu 2017-07 , compensation - retirement benefits ( topic 715 ) , effective july 1 , 2018 on a retrospective basis . for fiscal year ended june 30 , 2018 , $ 0.1 million and $ 2.0 million have been reclassified from cost of goods sold and selling , general and administrative expenses , respectively , to other income ( expense ) , net on the consolidated statements of income . for fiscal year ended june 30 , 2017 , $ 16.5 million and $ 7.8 million have been reclassified from cost of goods sold and selling , general and administrative expenses , respectively , to other income ( expense ) , net on the consolidated statements of income . see note 2 to our consolidated

