Supplemental Financial Statement Information

Inventories

Inventories are as follows (in thousands):



	As of December 31,
Inventories	2018		2017
Raw materials	$	55,794	$	57,061
Work in process	12,971		9,792
Finished goods	65,583		58,960
Total inventories	$	134,348	$	125,813

Deferred Contract Acquisition Costs

Some of our sales incentive programs meet the definition of an incremental cost of obtaining a customer contract; and therefore, are required to be capitalized under ASC 340-40. We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year.

Sales commissions for renewal of a contract may not be commensurate with the commissions paid for the acquisition of the initial contract because commissions are generally not paid on the renewal of a specifically anticipated contract. Sales commissions for initial contracts are deferred and then amortized generally on a straight-line basis over a period of benefit that we have determined to be three to four years. We determined the period of benefit by taking into consideration our customer contracts, our technology, and other factors.

Upon adoption of ASC 340-40 on January 1, 2018, we capitalized $8.1 million in contract acquisition costs related to contracts that were not completed. For contracts that have durations of less than one year, we follow the practical expedient and expense these costs when incurred. During the year ended December 31, 2018, we amortized $4.4 million of deferred contract acquisition costs, and we recognized no impairment losses in relation to costs capitalized. During the year ended December 31, 2018, an additional $4.9 million of contract acquisition costs were capitalized. Deferred contract acquisition costs are included within other noncurrent assets on our Consolidated Balance Sheets.

Equipment Leased to Customers Under Operating Leases, Net

Equipment leased to customers under operating leases, which is included in property and equipment, net on the Consolidated Balance Sheets, was as follows (in thousands):



	As of December 31,
Equipment Leased to Customers	2018			2017
Equipment leased to customers under operating leases	$	7,376		$	5,432
Accumulated depreciation	(3,555		)	(1,927		)
Equipment leased to customers under operating leases, net	$	3,821		$	3,505

Supplemental Disclosure of Cash Flow Information

Supplemental disclosures about cash flow information are as follows (in thousands):



	For the Year Ended December 31,
	2018		2017			2016
Net cash paid for income taxes	$	16,342	$	23,279		$	6,812
Cash paid for interest expense	3,138		3,174			2,975
Acquisitions of businesses and technology:
Cash paid for businesses and technology purchased, excluding contingent consideration	$	—	$	30,230		$	21,560
Cash acquired in business acquisitions	—		(671		)	(1,628		)
Net cash paid for business acquisitions	$	—	$	29,559		$	19,932
Common stock issued in connection with business acquisitions	$	123	$	—		$	73
Non-cash investing and financing activities:
Non-cash settlement of employee-related liabilities by issuing RSUs	—		1,171			3,059
Property and equipment received, but not paid	1,185		681			1,257

Deferred Cost of Revenue

Deferred cost of revenue related to unrecognized revenue on shipments to customers was $0.4 and $3.5 million as of December 31, 2018 and December 31, 2017, respectively, and is included in other current assets on the Consolidated Balance Sheets.

Accrued and Other Liabilities

Accrued and other liabilities are as follows (in thousands):



Accrued and Other Liabilities	As of December 31,
	2018		2017
Accrued compensation and benefits	$	31,917	$	29,113
Warranty provision – current	11,130		12,931
Contingent consideration – current	8,268		14,922
Debt assumed through business acquisitions	1,451		11,101
Accrued royalty payments	4,839		4,903
Accrued litigation and consulting	2,976		4,277
Technology transfer	3,374		3,593
Hedging liability	3,399		3,281
Deferred rent	1,868		2,846
Sales tax liabilities	2,547		2,574
Restructuring and other	1,971		2,452
Other accrued liabilities	5,583		6,097
Total accrued and other liabilities	$	79,323	$	98,090

Accumulated Other Comprehensive Income (Loss) (“AOCI”)

AOCI classified within stockholders’ equity in our Consolidated Balance Sheets as of December 31, 2018 and 2017 was as follows (in thousands):



Other Comprehensive Income (Loss)	As of December 31,
	2018			2017
Net unrealized investment losses	$	—		$	(697	)
Currency translation gains (losses)	(12,814		)	8,794
Net unrealized gains on cash flow hedges	—			41
Total other comprehensive income (Loss)	$	(12,814	)	$	8,138

There were less than $0.1 and $0.1 million, net of tax, reclassified out of AOCI for the years ended December 31, 2018 and 2017, respectively, consisting of unrealized gains and losses from investments in debt securities reported within interest income and other income, net, in our Consolidated Statements of Operations.