In the third quarter of 2018, we disposed of certain businesses, primarily in our CRM Execution & Support discipline, and recorded a net gain of $178.4 million. Also, during the third quarter, we took certain repositioning actions in an effort to continue to improve our strategic position and achieve operating efficiencies, and we recorded charges of $149.4 million for incremental severance, office lease consolidation and termination, asset write-offs and other charges. See Note 13 to the consolidated financial statements. The impact of the repositioning actions and net gain on sale of subsidiaries on operating expenses for 2018 was (dollars in millions): Operating expenses, which include the net gain from the disposition of subsidiaries and the repositioning charges, as described above, decreased $33.1 million, in 2018 compared to 2017. Salary and service costs, which tend to fluctuate with changes in revenue, increased $78.9 million, or 0.7%, in 2018 compared to 2017. The year-over-year increase primarily reflects the incremental severance and other charges of $73.7 million incurred in connection with the repositioning actions taken in the third quarter of 2018. Occupancy and other costs, which are less directly linked to changes in revenue than salary and service costs, increased $68.8 million, or 5.5%, in 2018 compared to 2017. The year-over-year change reflects a decrease of $4.7 million, which was offset by $73.5 million of repositioning charges primarily related to office lease consolidation and termination actions taken in the third quarter of 2018. Operating margin increased year-over-year to 14.0% from 13.6% and EBITA margin increased year-over-year to 14.6% from 14.4%. The net gain on disposition of subsidiaries and repositioning expenses, increased operating profit and operating margin year-over year by $29.0 million and 0.2%, respectively. Net interest expense increased $ 10.3 million year-over-year to $209.2 million in 20 18 . Interest expense on debt increased $17.4 million to $241.9 million in 2018, primarily due to a reduced benefit from the fixed-to-floating interest rate swaps resulting from higher rates on the floating rate leg. Our long-term debt portfolio at December 31, 2018, after taking into consideration our outstanding interest rate swaps, was approximately 75% fixed rate obligations and 25% floating rate obligations and was unchanged from December 31, 2017. A discussion of our interest rate swaps is included in Note 7 to the consolidated financial statements. Interest income in 2018 increased $7. 5 million  year-over-year to $57.2 million due to higher interest earned on the cash held by our international treasury centers. Our effective tax rate for 2018 decreased year-over-year to 25.6% from 36.9% in 2017. The decrease was primarily attributable to the reduction of the U.S. federal statutory income tax rate to 21% from 35% resulting from the Tax Act. Income tax expense in 2018 was reduced by approximately $19 million, primarily as a result of the successful resolution of foreign tax claims and $7.4 million related to the excess tax benefits from share- based compensation. Additionally, income tax expense for 2018 reflects the following items recorded in the third quarter of 2018 (in millions): Income Taxes Net Interest Expense The net gain resulting from the net disposition of subsidiaries reflects favorable local tax rates applied to certain non-U.S. gains. The tax benefit on the repositioning actions was calculated based on the jurisdictions where the charges were incurred and reflects the likelihood that we will be unable to obtain a tax benefit for all charges incurred. Further, in 2018 we recorded additional income tax expense of $28.9 million reflecting the finalization of the provisional estimate of the effect of the Tax Act recorded in 2017 (see Note 11 to the consolidated financial statements). 22 Increase (Decrease) Repositioning Actions Net Gain on Disposition of Subsidiaries Total Salary and service costs $ 73.7 $ — $ 73.7 Occupancy and other costs 73.5 — 73.5 Net gain on disposition of subsidiaries — (178.4) (178.4) Cost of services 147.2 (178.4) (31.2) Selling, general and administrative expenses 2.2 — 2.2 Depreciation and amortization — — — $ 149.4 $ (178.4) $ (29.0) Increase (Decrease) Income Before Income Taxes Income Tax Expense Net gain on disposition of subsidiaries $ 178.4 $ 11.0 Repositioning actions (149.4) (36.0) Adjustment to provisional effect of the Tax Act — 28.9 $ 29.0 $ 3.9