summary of the twelve months ended december 31 , 2019 revenue grew to a record $ 1.25 billion , an increase of 2.9 % over the $ 1.21 billion in 2018 ; gross profit was a record $ 465.8 million , a 7.0 % increase , compared to the $ 435.3 million in 2018 ; gross margin improved 140 basis points to a record 37.3 % from 35.9 % in 2018 ; operating income increased 29.9 % to a record $ 200.6 million , or 16.1 % of revenue , compared to $ 154.5 million , or 12.7 % , of revenue in 2018 ; net income was a record $ 153.3 million , or $ 2.96 per diluted share , compared to $ 104.0 million , or $ 2.04 per share , in 2018 ; and achieved $ 229.8 million cash flow from operations . we had $ 98.5 million of capital expenditures , or 7.9 % of revenue . net cash flow was a positive $ 17.7 million , which includes the net pay down of $ 117.3 million of long-term debt . summary of the twelve months ended december 31 , 2018 revenue grew to a record $ 1.2 billion , an increase of 15.2 % over the $ 1.05 billion in 2017 ; gross profit was a record $ 435.3 million , a 22.0 % increase , compared to the $ 356.8 million in 2017 ; gross margin improved 210 basis points to 35.9 % from 33.8 % in 2017 ; operating income increased to a record $ 154.5 , or 12.7 % of revenue , compared to 7.5 % , in 2017 ; net income was a record $ 104.0 million , or $ 2.04 per diluted share , compared to a net loss of ( $ 1.8 ) million , or ( $ 0.04 ) per share , in 2017 ; and achieved $ 185.6 million cash flow from operations . we had $ 87.5 million of capital expenditures , or 7.2 % of revenue . net cash flow was a positive $ 36.6 million , which includes the net pay down of $ 56.8 million of long-term debt . - 34 - business outlook and factors relevant to our results of operations we continue to pursue our previously announced goals of achieving revenue of $ 2.5 billion and gross margin of 40 % , representing gross profit of $ 1.0 billion , all by 2025. acquisitions will continue to be a key part of our growth strategy to reach our 2025 revenue goal . we have a solid pipeline of designs and expanded customer relationships across all regions and product lines . the success of our business depends on , among other factors , the strength of the global economy and the stability of the financial markets , our customers ' demand for our products , the ability of our customers to meet their payment obligations , the likelihood of customers not canceling or deferring existing orders , and the strength of consumers ' demand for items containing our products in the end-markets we serve . we believe the long-term outlook for our business remains generally favorable despite the uncertainties in the global economy as we continue to execute on the strategy that has proven successful for us over the years . in april 2019 , the company announced the completion of the acquisition of gfab . in the third quarter of 2019 we entered into a share swap agreement that provides for the acquisition of lsc by the company . at the effective date of the transaction , each share of lsc will be converted into the right to receive twd $ 42.50 per share in cash , or approximately us $ 1.42 per share based on december 31 , 2019 exchange rates . the aggregate consideration to be paid by the company , based on the december 31 , 2019 exchange rate , is approximately $ 437 million . this amount is subject to change , based on the taiwan dollar to united states dollar exchange rate at closing . the acquisition received lsc shareholder approval on october 25 , 2019 , and we anticipate completing the acquisition in the second half of 2020 , subject to customary closing conditions and regulatory approvals . we expect to fund the purchase price of the transaction primarily with proceeds from a new bank financing arrangement . see “ risk factors – the success of our business depends on the strength of the global economy and the stability of the financial markets , and any weaknesses in these areas may have a material adverse effect on our net sales , operating results and financial condition . ” in part i , item 1a of this annual report for additional information . description of sales and expenses net sales the principal factors that have affected or could affect our net sales from period to period are : the condition of the economy in general and of the semiconductor industry in particular ; political tension , including the implementation of tariffs , among and between the countries in which we do business ; our customers ' adjustments in their order levels ; changes in our pricing policies or the pricing policies of our competitors or suppliers ; the addition or termination of key supplier relationships ; the rate of introduction and acceptance by our customers of new products ; our ability to compete effectively with our current and future competitors ; our ability to enter into and renew key corporate and strategic relationships with our customers , vendors and strategic alliances ; changes in foreign currency exchange rates ; a major disruption of our information technology infrastructure ; unforeseen catastrophic events , such as armed conflict , terrorism , fires , typhoons and earthquakes ; and any other disruptions , such as change in the political or governmental policies , story_separator_special_tag - 41 - contractual obligations the following table represents our contractual obligations as of december 31 , 2019 ( in thousands ) : replace_table_token_8_th ( 1 ) interest on long-term debt assumes there are no changes in current interest rates and no changes in long-term debt from the balance outstanding as of december 31 , 2019 , other than required principal payments . the revolver and term loan mature in october 2021. tax liabilities are not included in the above contractual obligations as we can not make reasonable estimates of the amount and period in which those tax liabilities would be paid . see “ accounting for income taxes ” below and note 12 of “ notes to consolidated financial statements ” of this annual report for additional information . in addition to these purchase commitments , we have equity investment obligations for our chengdu facilities of $ 25 million for 2020 , and capital investment obligations of $ 25 million for 2020 and $ 16 million for 2021. critical accounting policies and estimates the preparation of financial statements in conformity with generally accepted principles in the united states of american ( “ u.s . gaap ” ) requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period . on an ongoing basis , we evaluate our estimates , which are based upon historical experiences , market trends and financial forecasts and projections , and upon various assumptions that management believes to be reasonable under the circumstances at that certain point in time . actual results may differ , significantly at times , from these estimates under different assumptions or conditions . we believe the following critical accounting policies and estimates affect the significant estimates and judgments we use in the preparation of our consolidated financial statements , and may involve a higher degree of judgment and complexity than others . revenue recognition we generate revenue primarily through the sale of semiconductor products either directly to a customer or to a distributor . we typically have contracts with our direct customers and distributors and in determining whether a contract exists we evaluate the terms of the agreement , the relationship with the direct customer or distributor and their ability to pay . under revenue recognition guidance , a performance obligation is a promise in a contract to transfer a distinct good or service to the customer , and is considered the unit of account . a contract 's transaction price is allocated to each distinct performance obligation and recognized as revenue when , or as , the performance obligation is satisfied . generally speaking , our primary performance obligation is the delivery of a specific good through the purchase order submitted by our customer and revenue is recognized at the time of shipment or delivery , depending on the contract terms . we record allowances/reserves for the following items : ( i ) ship and debit , which arise when we , from time to time based on market conditions , issue credit to certain distributors upon their shipments to their end customers ; ( ii ) stock rotation , which are contractual obligations that permit certain distributors , up to four times a year , to return a portion of their inventory based on historical shipments to them in exchange for an equal and offsetting order ; and ( iii ) price protection , which arise when market conditions cause average selling prices to decrease and we issue credit to certain distributors on their inventory . ship and debit accruals comprise both claims in process and anticipated claims arising from the eventual sale of distribution inventory that is subject to claim activity . ship and debit reserves are recorded as a reduction to net sales with a corresponding reduction to accounts receivable . stock rotation reserves are recorded as a reduction to net sales with a corresponding reduction to cost of goods sold for the estimated cost of inventory that is expected to be returned . price protection reserves are recorded as a reduction to net sales with a corresponding increase in accrued liabilities . - 42 - we also assess our customer 's ability and intention to pay , which is based on a variety of factors including our customer 's historical payment experience , their financial condition and the condition of the global economy and financial markets . payment terms and conditions typically vary depending on negotiations with the customer . certain customers have limited rights of return or are entitled to price adjustments on products held in their inventory or upon sale to their end customers . we reduce net sales in the period of sale for estimates of product returns , distributor price adjustments and other allowances . our reserve estimates are based upon historical data as well as projections of sales , distributor inventories , price adjustments , average selling prices and market conditions . actual returns and adjustments could be significantly different from our estimates and provisions , resulting in an adjustment to net sales . inventories inventories are stated at the lower of cost or net realizable value . cost is determined principally by the first-in , first-out method . on an ongoing basis , we evaluate our inventory for obsolescence and slow-moving items . this evaluation includes analysis of sales levels , sales projections , and purchases by item , as well as raw material usage related to our manufacturing facilities . if our review indicates a reduction in utility below carrying value , we reduce our inventory to a new cost basis . if future demand or market conditions are different than our current estimates , an inventory adjustment may be required , and would be reflected in cost of goods sold in the period the revision

liquidity requirements our primary liquidity requirements have been to meet our capital expenditure needs and to fund ongoing operations . for 2019 and 2018 our working capital was $ 524.6 million and $ 480.8 million , respectively . in 2019 , our working capital increased due to increases in cash and accounts receivable , reflecting our increased sales . we expect cash generated by our operations together with existing cash , cash equivalents , short-term investments and available credit facilities to be sufficient to satisfy our working capital needs , capital asset purchases , outstanding commitments and other liquidity requirements associated with our existing operations for at least the next 12 months . short-term investments as of december 31 , 2019 , we had short-term investments of approximately $ 4.8 million . these investments are highly liquid with maturity dates greater than three months at the date of purchase . the decrease from $ 7.5 million in 2018 , to $ 4.8 million in 2019 reflects the use of these investments to reduce our debt levels . we generally can access these investments in a relatively short amount of time but in doing so we generally forfeit a portion of interest income . short-term debt our asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $ 126.6 million . at december 31 , 2019 , borrowings were $ 13.3 million and letters of credit were $ 1.4 million under the asia credit facilities . other than two taiwanese credit facilities that are collateralized by assets , our foreign credit lines are unsecured , uncommitted , repayable on demand , terminable by the lender at any time and contain no restrictive covenants . these credit facilities bear interest at libor or similar indices plus a specified margin . interest payments are due quarterly on outstanding amounts under the credit lines . long-term debt we currently have a u.s. banking credit facility ( the “ u.s . credit facility ” ) under which we may draw up to $ 250 million on a revolving basis , in addition to a $ 250 million term loan .


 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 requirements our primary liquidity requirements have been to meet our capital expenditure needs and to fund ongoing operations . for 2019 and 2018 our working capital was $ 524.6 million and $ 480.8 million , respectively . in 2019 , our working capital increased due to increases in cash and accounts receivable , reflecting our increased sales . we expect cash generated by our operations together with existing cash , cash equivalents , short-term investments and available credit facilities to be sufficient to satisfy our working capital needs , capital asset purchases , outstanding commitments and other liquidity requirements associated with our existing operations for at least the next 12 months . short-term investments as of december 31 , 2019 , we had short-term investments of approximately $ 4.8 million . these investments are highly liquid with maturity dates greater than three months at the date of purchase . the decrease from $ 7.5 million in 2018 , to $ 4.8 million in 2019 reflects the use of these investments to reduce our debt levels . we generally can access these investments in a relatively short amount of time but in doing so we generally forfeit a portion of interest income . short-term debt our asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $ 126.6 million . at december 31 , 2019 , borrowings were $ 13.3 million and letters of credit were $ 1.4 million under the asia credit facilities . other than two taiwanese credit facilities that are collateralized by assets , our foreign credit lines are unsecured , uncommitted , repayable on demand , terminable by the lender at any time and contain no restrictive covenants . these credit facilities bear interest at libor or similar indices plus a specified margin . interest payments are due quarterly on outstanding amounts under the credit lines . long-term debt we currently have a u.s. banking credit facility ( the “ u.s . credit facility ” ) under which we may draw up to $ 250 million on a revolving basis , in addition to a $ 250 million term loan .
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 Suspicious Activity Report : summary of the twelve months ended december 31 , 2019 revenue grew to a record $ 1.25 billion , an increase of 2.9 % over the $ 1.21 billion in 2018 ; gross profit was a record $ 465.8 million , a 7.0 % increase , compared to the $ 435.3 million in 2018 ; gross margin improved 140 basis points to a record 37.3 % from 35.9 % in 2018 ; operating income increased 29.9 % to a record $ 200.6 million , or 16.1 % of revenue , compared to $ 154.5 million , or 12.7 % , of revenue in 2018 ; net income was a record $ 153.3 million , or $ 2.96 per diluted share , compared to $ 104.0 million , or $ 2.04 per share , in 2018 ; and achieved $ 229.8 million cash flow from operations . we had $ 98.5 million of capital expenditures , or 7.9 % of revenue . net cash flow was a positive $ 17.7 million , which includes the net pay down of $ 117.3 million of long-term debt . summary of the twelve months ended december 31 , 2018 revenue grew to a record $ 1.2 billion , an increase of 15.2 % over the $ 1.05 billion in 2017 ; gross profit was a record $ 435.3 million , a 22.0 % increase , compared to the $ 356.8 million in 2017 ; gross margin improved 210 basis points to 35.9 % from 33.8 % in 2017 ; operating income increased to a record $ 154.5 , or 12.7 % of revenue , compared to 7.5 % , in 2017 ; net income was a record $ 104.0 million , or $ 2.04 per diluted share , compared to a net loss of ( $ 1.8 ) million , or ( $ 0.04 ) per share , in 2017 ; and achieved $ 185.6 million cash flow from operations . we had $ 87.5 million of capital expenditures , or 7.2 % of revenue . net cash flow was a positive $ 36.6 million , which includes the net pay down of $ 56.8 million of long-term debt . - 34 - business outlook and factors relevant to our results of operations we continue to pursue our previously announced goals of achieving revenue of $ 2.5 billion and gross margin of 40 % , representing gross profit of $ 1.0 billion , all by 2025. acquisitions will continue to be a key part of our growth strategy to reach our 2025 revenue goal . we have a solid pipeline of designs and expanded customer relationships across all regions and product lines . the success of our business depends on , among other factors , the strength of the global economy and the stability of the financial markets , our customers ' demand for our products , the ability of our customers to meet their payment obligations , the likelihood of customers not canceling or deferring existing orders , and the strength of consumers ' demand for items containing our products in the end-markets we serve . we believe the long-term outlook for our business remains generally favorable despite the uncertainties in the global economy as we continue to execute on the strategy that has proven successful for us over the years . in april 2019 , the company announced the completion of the acquisition of gfab . in the third quarter of 2019 we entered into a share swap agreement that provides for the acquisition of lsc by the company . at the effective date of the transaction , each share of lsc will be converted into the right to receive twd $ 42.50 per share in cash , or approximately us $ 1.42 per share based on december 31 , 2019 exchange rates . the aggregate consideration to be paid by the company , based on the december 31 , 2019 exchange rate , is approximately $ 437 million . this amount is subject to change , based on the taiwan dollar to united states dollar exchange rate at closing . the acquisition received lsc shareholder approval on october 25 , 2019 , and we anticipate completing the acquisition in the second half of 2020 , subject to customary closing conditions and regulatory approvals . we expect to fund the purchase price of the transaction primarily with proceeds from a new bank financing arrangement . see “ risk factors – the success of our business depends on the strength of the global economy and the stability of the financial markets , and any weaknesses in these areas may have a material adverse effect on our net sales , operating results and financial condition . ” in part i , item 1a of this annual report for additional information . description of sales and expenses net sales the principal factors that have affected or could affect our net sales from period to period are : the condition of the economy in general and of the semiconductor industry in particular ; political tension , including the implementation of tariffs , among and between the countries in which we do business ; our customers ' adjustments in their order levels ; changes in our pricing policies or the pricing policies of our competitors or suppliers ; the addition or termination of key supplier relationships ; the rate of introduction and acceptance by our customers of new products ; our ability to compete effectively with our current and future competitors ; our ability to enter into and renew key corporate and strategic relationships with our customers , vendors and strategic alliances ; changes in foreign currency exchange rates ; a major disruption of our information technology infrastructure ; unforeseen catastrophic events , such as armed conflict , terrorism , fires , typhoons and earthquakes ; and any other disruptions , such as change in the political or governmental policies , story_separator_special_tag - 41 - contractual obligations the following table represents our contractual obligations as of december 31 , 2019 ( in thousands ) : replace_table_token_8_th ( 1 ) interest on long-term debt assumes there are no changes in current interest rates and no changes in long-term debt from the balance outstanding as of december 31 , 2019 , other than required principal payments . the revolver and term loan mature in october 2021. tax liabilities are not included in the above contractual obligations as we can not make reasonable estimates of the amount and period in which those tax liabilities would be paid . see “ accounting for income taxes ” below and note 12 of “ notes to consolidated financial statements ” of this annual report for additional information . in addition to these purchase commitments , we have equity investment obligations for our chengdu facilities of $ 25 million for 2020 , and capital investment obligations of $ 25 million for 2020 and $ 16 million for 2021. critical accounting policies and estimates the preparation of financial statements in conformity with generally accepted principles in the united states of american ( “ u.s . gaap ” ) requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period . on an ongoing basis , we evaluate our estimates , which are based upon historical experiences , market trends and financial forecasts and projections , and upon various assumptions that management believes to be reasonable under the circumstances at that certain point in time . actual results may differ , significantly at times , from these estimates under different assumptions or conditions . we believe the following critical accounting policies and estimates affect the significant estimates and judgments we use in the preparation of our consolidated financial statements , and may involve a higher degree of judgment and complexity than others . revenue recognition we generate revenue primarily through the sale of semiconductor products either directly to a customer or to a distributor . we typically have contracts with our direct customers and distributors and in determining whether a contract exists we evaluate the terms of the agreement , the relationship with the direct customer or distributor and their ability to pay . under revenue recognition guidance , a performance obligation is a promise in a contract to transfer a distinct good or service to the customer , and is considered the unit of account . a contract 's transaction price is allocated to each distinct performance obligation and recognized as revenue when , or as , the performance obligation is satisfied . generally speaking , our primary performance obligation is the delivery of a specific good through the purchase order submitted by our customer and revenue is recognized at the time of shipment or delivery , depending on the contract terms . we record allowances/reserves for the following items : ( i ) ship and debit , which arise when we , from time to time based on market conditions , issue credit to certain distributors upon their shipments to their end customers ; ( ii ) stock rotation , which are contractual obligations that permit certain distributors , up to four times a year , to return a portion of their inventory based on historical shipments to them in exchange for an equal and offsetting order ; and ( iii ) price protection , which arise when market conditions cause average selling prices to decrease and we issue credit to certain distributors on their inventory . ship and debit accruals comprise both claims in process and anticipated claims arising from the eventual sale of distribution inventory that is subject to claim activity . ship and debit reserves are recorded as a reduction to net sales with a corresponding reduction to accounts receivable . stock rotation reserves are recorded as a reduction to net sales with a corresponding reduction to cost of goods sold for the estimated cost of inventory that is expected to be returned . price protection reserves are recorded as a reduction to net sales with a corresponding increase in accrued liabilities . - 42 - we also assess our customer 's ability and intention to pay , which is based on a variety of factors including our customer 's historical payment experience , their financial condition and the condition of the global economy and financial markets . payment terms and conditions typically vary depending on negotiations with the customer . certain customers have limited rights of return or are entitled to price adjustments on products held in their inventory or upon sale to their end customers . we reduce net sales in the period of sale for estimates of product returns , distributor price adjustments and other allowances . our reserve estimates are based upon historical data as well as projections of sales , distributor inventories , price adjustments , average selling prices and market conditions . actual returns and adjustments could be significantly different from our estimates and provisions , resulting in an adjustment to net sales . inventories inventories are stated at the lower of cost or net realizable value . cost is determined principally by the first-in , first-out method . on an ongoing basis , we evaluate our inventory for obsolescence and slow-moving items . this evaluation includes analysis of sales levels , sales projections , and purchases by item , as well as raw material usage related to our manufacturing facilities . if our review indicates a reduction in utility below carrying value , we reduce our inventory to a new cost basis . if future demand or market conditions are different than our current estimates , an inventory adjustment may be required , and would be reflected in cost of goods sold in the period the revision

