Infor, Inc. - FORM 10-Q - March 4, 2016

Infor, Inc. - FORM 10-Q - March 4, 2016

Attached files

Attached files

Infor, Inc. Reports

file	filename
EX-31.1 - EX-31.1 - Infor, Inc.	d150093dex311.htm
EX-32.1 - EX-32.1 - Infor, Inc.	d150093dex321.htm
EX-32.2 - EX-32.2 - Infor, Inc.	d150093dex322.htm
EX-31.2 - EX-31.2 - Infor, Inc.	d150093dex312.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2016

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission file number: 333-183494-06

LOGO

INFOR, INC.

(Exact name of registrant as specified in its charter)


DELAWARE		01-0924667
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
641 AVENUE OF THE AMERICAS NEW YORK, NEW YORK		10011
(Address of principal executive offices)		(Zip Code)

(646) 336-1700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Note: The registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, but has not been subject to such filing requirements for the past 90 days since the Company’s registration statement on Form S-4 became effective on February 12, 2016.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The number of shares of our common stock outstanding on February 29, 2016, was 1,000, par value $0.01 per share.

INFOR, INC.

Form 10-Q

Index


PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets at January 31, 2016 and April 30, 2015	3

	Condensed Consolidated Statements of Operations for the three and nine months ended January 31, 2016 and 2015	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended January 31, 2016 and 2015	5

	Condensed Consolidated Statements of Cash Flows for the nine months ended January 31, 2016 and 2015	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	61

Item 4.	Controls and Procedures	62

PART II.	OTHER INFORMATION	63

Item 1.	Legal Proceedings	63

Item 1A.	Risk Factors	63

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63

Item 3.	Defaults Upon Senior Securities	63

Item 4.	Mine Safety Disclosures	63

Item 5.	Other Information	63

Item 6.	Exhibits	63

	Signatures	64

Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q (Quarterly Report) for the quarter ended January 31, 2016, contains forward-looking statements within the meaning of securities laws. The forward-looking statements are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “forecast,” “project,” “should” and similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, statements about our future performance, the continuation of historical trends, the sufficiency of our sources of capital for future needs, the effects of acquisitions, the outcome of pending litigation and the expected impact of recently issued accounting pronouncements. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. The forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those anticipated in the forward-looking statements; including those that are discussed under Risk Factors in documents we have filed with the U.S. Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K/T for our fiscal year ended April 30, 2015, filed with the SEC on June 26, 2015 (our Form 10-K/T), and those that may be discussed in this Quarterly Report under Part II, Item 1A, Risk Factors.

Given these risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements included in this Quarterly Report. The forward-looking statements included in this Quarterly Report reflect management’s opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, whether as a result of new information, future events or otherwise. Readers should carefully review the risk factors described in our Form 10-K/T and in other documents that we file from time to time with the SEC including our Quarterly Reports on Form 10-Q.

Change in Fiscal Year

Unless otherwise indicated, references to our fiscal year mean the fiscal year ended on April 30 of such year. As disclosed in our Current Report on Form 8-K filed with the SEC on April 23, 2014, we have changed our fiscal year end to April 30 effective beginning with our fiscal year 2015. In addition, in transitioning to our new fiscal year end, we reported fiscal 2015 as the 11-month transition period of June 1, 2014 through April 30, 2015. Any reference to fiscal 2015 means the 11-month transition period. See Note 1, Nature of Business and Basis of Presentation - Fiscal Year, for further information.

Available Information

We announce material information, including press releases, analyst presentations and financial information regarding the Company (as defined below), through a variety of means, including the Company’s website (www.infor.com), the Investors subpage of our website (www.infor.com/company/infor-investors-relations/), our blog (blogs.infor.com), press releases, filings with the SEC, public conference calls and social media, including the Company’s Twitter account (twitter.com/infor) and Facebook page (www.facebook.com/infor), in order to achieve broad, non-exclusionary distribution of information to the public. The Investors subpage is accessible by clicking on the tab labeled “Company” on our website home page. We also use these channels to expedite public access to time-critical information regarding the Company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. Therefore, investors should look to these channels for important and time-critical information. In addition, we make available on the Investors subpage of our website (under the link “Investor News”), free of charge, our annual reports on Form 10-K and quarterly reports on Form 10-Q as soon as practicable after we electronically file such reports with the SEC. We encourage investors, the media and others interested in the Company to review the information we post on these various channels, as such information could be deemed to be material information.

Additionally, the public may read and copy any of the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at (800) SEC-0330. Our electronically filed reports can also be obtained on the SEC’s internet site at http://www.sec.gov.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INFOR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts which are actuals)

(unaudited)


	January 31,			April 30,
	2016			2015
ASSETS
Current assets:
Cash and cash equivalents	$	521.9		$	526.7
Accounts receivable, net		371.7			338.0
Prepaid expenses		148.6			113.9
Income tax receivable		68.0			49.6
Other current assets		17.5			17.8
Deferred tax assets		40.3			30.8

Total current assets		1,168.0			1,076.8
Property and equipment, net		113.5			81.8
Intangible assets, net		940.1			731.0
Goodwill		4,308.1			4,045.8
Deferred tax assets		62.6			72.8
Other assets		99.4			40.3

Total assets	$	6,691.7		$	6,048.5

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	75.0		$	62.4
Income taxes payable		41.8			33.5
Accrued expenses		355.2			339.1
Deferred tax liabilities		0.7			1.1
Deferred revenue		902.3			867.0
Current portion of long-term obligations		0.1			0.1

Total current liabilities		1,375.1			1,303.2
Long-term debt, net		5,669.4			5,226.7
Deferred tax liabilities		161.4			107.0
Other long-term liabilities		210.4			208.4

Total liabilities		7,416.3			6,845.3

Commitments and contingencies (Note 14)
Redeemable noncontrolling interests		133.7			—

Stockholders’ deficit:
Common stock, $0.01 par value; 1,000 shares authorized; 1,000 shares issued and outstanding at January 31, 2016 and April 30, 2015		—			—
Additional paid-in capital		1,198.6			1,209.1
Receivable from stockholders		(36.9	)		(35.3	)
Accumulated other comprehensive (loss) income		(311.4	)		(240.6	)
Accumulated deficit		(1,718.5	)		(1,730.0	)

Total Infor, Inc. stockholders’ deficit		(868.2	)		(796.8	)
Noncontrolling interests		9.9			—

Total stockholders’ deficit		(858.3	)		(796.8	)

Total liabilities, redeemable noncontrolling interests and stockholders’ deficit	$	6,691.7		$	6,048.5

The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.

INFOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions)

(unaudited)


	Three Months Ended January 31,						Nine Months Ended January 31,
	2016			2015			2016			2015
Revenues:
Software license fees and subscriptions	$	159.0		$	129.2		$	419.9		$	454.0
Product updates and support fees		349.2			365.2			1,060.1			1,110.9

Software revenues		508.2			494.4			1,480.0			1,564.9
Consulting services and other fees		163.4			163.0			495.2			531.3

Total revenues		671.6			657.4			1,975.2			2,096.2

Operating expenses:
Cost of software license fees and subscriptions⁽¹⁾		45.7			30.9			116.5			93.5
Cost of product updates and support fees ⁽¹⁾		61.7			67.3			186.5			199.6
Cost of consulting services and other fees ⁽¹⁾		141.2			136.5			420.0			421.5
Sales and marketing		109.6			107.7			317.5			355.0
Research and development		114.5			101.6			313.4			307.9
General and administrative		52.8			45.5			143.7			152.0
Amortization of intangible assets and depreciation		65.6			60.1			181.0			186.5
Restructuring costs		12.2			0.3			20.4			11.6
Acquisition-related and other costs		3.4			(1.2	)		15.0			(1.9	)

Total operating expenses		606.7			548.7			1,714.0			1,725.7

Income from operations		64.9			108.7			261.2			370.5

Other expense, net:
Interest expense, net		80.5			86.6			231.6			263.3
Other (income) expense, net		35.7			(40.8	)		9.3			(74.9	)

Total other expense, net		116.2			45.8			240.9			188.4

Income (loss) before income tax		(51.3	)		62.9			20.3			182.1
Income tax provision (benefit)		(5.7	)		11.6			11.2			44.2

Net income (loss)		(45.6	)		51.3			9.1			137.9
Net loss attributable to noncontrolling interests		(1.4	)		—			(2.4	)		—

Net income (loss) attributable to Infor, Inc.	$	(44.2	)	$	51.3		$	11.5		$	137.9

(1)	Excludes amortization of intangible assets and depreciation which are separately stated below.

The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.

INFOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(unaudited)


	Three Months Ended January 31,						Nine Months Ended January 31,
	2016			2015			2016			2015
Net income (loss)	$	(45.6	)	$	51.3		$	9.1		$	137.9

Other comprehensive income (loss):
Unrealized gain (loss) on foreign currency translation, net of tax		(11.9	)		(160.9	)		(74.3	)		(298.2	)
Change in defined benefit plan funding status, net of tax		1.2			0.6			1.4			2.1
Unrealized gain (loss) on derivative instruments, net of tax		1.1			(2.3	)		1.7			(5.3	)

Total other comprehensive income (loss)		(9.6	)		(162.6	)		(71.2	)		(301.4	)

Comprehensive income (loss)		(55.2	)		(111.3	)		(62.1	)		(163.5	)

Noncontrolling interests comprehensive income (loss)		(1.8	)		—			(2.8	)		—

Comprehensive income (loss) attributable to Infor, Inc.	$	(53.4	)	$	(111.3	)	$	(59.3	)	$	(163.5	)

The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.

INFOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	Nine Months Ended January 31,
	2016			2015
Cash flows from operating activities:
Net income	$	9.1		$	137.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		181.0			186.5
Provision for doubtful accounts, billing adjustments and sales allowances		14.7			13.8
Deferred income taxes		(13.9	)		(25.1	)
Non-cash loss (gain) on foreign currency		9.5			(74.8	)
Non-cash interest		19.2			20.0
Equity-based compensation expense		18.9			16.8
Other		1.3			(3.0	)
Changes in operating assets and liabilities (net of effects of acquisitions):
Prepaid expenses and other assets		(41.0	)		(15.9	)
Accounts receivable, net		(16.4	)		(61.8	)
Income tax receivable/payable, net		(18.7	)		28.4
Deferred revenue		27.5			8.0
Accounts payable, accrued expenses and other liabilities		30.3			30.9

Net cash provided by operating activities		221.5			261.7

Cash flows from investing activities:
Acquisitions, net of cash acquired		(549.6	)		(30.1	)
Purchase of other investments		(25.0	)		—
Change in restricted cash		(3.2	)		18.0
Purchases of property, equipment and software		(49.4	)		(28.8	)

Net cash used in investing activities		(627.2	)		(40.9	)

Cash flows from financing activities:
Dividends paid		(35.0	)		(42.7	)
Loans to stockholders		(1.6	)		(0.2	)
Payments on capital lease obligations		(2.4	)		(2.1	)
Proceeds from issuance of debt		495.0			—
Payments on long-term debt		(25.6	)		(80.2	)
Deferred financing fees		(16.5	)		—
Other		(1.2	)		(8.5	)

Net cash provided by (used in) financing activities		412.7			(133.7	)

Effect of exchange rate changes on cash and cash equivalents		(11.8	)		(48.4	)

Net increase (decrease) in cash and cash equivalents		(4.8	)		38.7
Cash and cash equivalents at the beginning of the period		526.7			447.1

Cash and cash equivalents at the end of the period	$	521.9		$	485.8

The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.

INFOR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Nature of Business and Basis of Presentation

Infor, Inc. is one of the largest providers of enterprise software and services in the world. We provide industry-specific and other enterprise software products and related services, primarily to large and medium-sized enterprises in the manufacturing, healthcare, distribution, public sector, automotive, service industries, equipment services, management and rental (ESM&R), consumer products and retail and hospitality industries. We serve a large, diverse and sophisticated customer base across three geographic regions: the Americas; Europe, Middle East and Africa (EMEA); and Asia Pacific (APAC). Our software and services offerings help our customers automate and integrate their critical business processes, which enables them to better manage their business operations generally as well as their suppliers, partners, customers and employees. Our industry-specific approach allows us to focus on specialized software programs that take less time and cost to tailor to target customers’ specific needs during periods of implementation and upgrade. We believe our products and services provide a lower relative total cost of ownership for customers than the offerings of larger competing vendors.

We specialize in and target specific industries, or verticals, and have industry-specific business units that leverage our industry-oriented products and teams. Augmenting our vertical-specific applications, we have horizontal software applications including our customer relationship management (CRM), enterprise asset management (EAM), enterprise resource planning, financial management, human capital management (HCM), performance management, product lifecycle management, property management systems, central reservations systems, supplier relationship management and supply chain management (SCM) suites which, in addition to our proprietary light-weight middleware solution ION^®, are integrated with our enterprise software applications and sold across different verticals. In addition to providing software products, we provide on-going support and maintenance services for our customers through our subscription-based annual maintenance and support programs. We also help our customers implement and use our applications more effectively through our consulting services.

Unless otherwise indicated or the context requires otherwise, hereafter any reference to Infor, we, our, us or the Company refers to Infor, Inc. and its consolidated subsidiaries.

Basis of Presentation

Our Condensed Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) and consider the various staff accounting bulletins and other applicable guidance issued by the SEC. Our Condensed Consolidated Financial Statements include the accounts of Infor, Inc. and our wholly-owned and majority-owned subsidiaries operating in the Americas, EMEA and APAC. Our investments in other non-consolidated entities are accounted for using the equity method or cost method depending upon the level of ownership and/or our ability to exercise significant influence over the operating and financial policies of the investee. All significant intercompany accounts and transactions have been eliminated.

The unaudited Condensed Consolidated Financial Statements and Notes are presented as permitted by FASB requirements for quarterly reports and do not contain all the information and disclosures included in our annual financial statements and related notes as required by GAAP. The Condensed Consolidated Balance Sheet data as of April 30, 2015, and other amounts presented herein as of April 30, 2015, or for the year then ended, were derived from our audited financial statements. The accompanying Condensed Consolidated Financial Statements reflect all adjustments, in the opinion of management, necessary to fairly state our financial position, results of operations and cash flows for the periods presented. These adjustments consist of normal and recurring items. The results of operations for our interim periods are not necessarily indicative of results to be achieved for any future interim period or for our full fiscal year. The accompanying interim Condensed Consolidated Financial Statements should be read in conjunction with our consolidated financial statements and related notes for the fiscal year ended April 30, 2015, included in our Form 10-K/T.

Noncontrolling Interests

We consolidate our majority-owned subsidiaries and reflect redeemable noncontrolling interests and noncontrolling interests on our Condensed Consolidated Balance Sheets for the portion of those entities that we do not own as mezzanine equity on our Condensed Consolidated Balance Sheets and as a component of consolidated equity separate from the equity attributable to Infor, Inc.’s stockholders, respectively. The redeemable noncontrolling interests’ and noncontrolling interests’ share in our net earnings are included in net income (loss) attributable to noncontrolling interests in our Condensed Consolidated Statements of Operations, and their portion of comprehensive income (loss) is included in comprehensive income (loss) attributable to noncontrolling interests in our Condensed Consolidated Statements of Comprehensive Income (Loss).

Noncontrolling interests with redemption features, such as put options, that are not solely within our control (redeemable noncontrolling interests) are reported as mezzanine equity on our Condensed Consolidated Balance Sheets, between liabilities and equity, at the greater of redemption value or initial carrying value. The redeemable noncontrolling interest that we report relates to an 18.52% interest in GT Nexus, Inc. (GT Nexus) that Infor does not own. See Note 3, Acquisitions. The noncontrolling interest that we report as equity on our Condensed Consolidated Balance Sheets relates to a minority interest held in an international subsidiary acquired in the GT Nexus Acquisition (as defined below).

The following table presents a summary of the changes in the redeemable noncontrolling interests for the periods indicated:


(in millions)	Three Months Ended January 31, 2016			Nine Months Ended January 31, 2016
Beginning of period	$	127.8		$	—
Increase due to business combination		—			125.0
Net loss attributable to redeemable noncontrolling interests		(1.6	)		(2.7	)
Redemption value adjustment		7.5			11.4

End of period	$	133.7		$	133.7

Cost Method Investments

We have investments in other entities where we do not hold a controlling interest. We use the cost method of accounting when our voting interests in such entities are less than 20% and we do not have the ability to exercise significant influence over the entities’ operating and financial policies. Our cost method investments are reported at cost and are included in other assets on our Condensed Consolidated Balance Sheets. Dividend income received, if any, is reported in other (income) expense, net, in our Condensed Consolidated Statements of Operations. Our cost method investments are assessed for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. We have not recorded any dividends or other-than-temporary impairment charges related to our cost method investments. The fair values of our cost method investments are not readily available and there are no quoted market prices for these investments.

In the third quarter of fiscal 2016, we acquired a 16.67% equity interest in LogicBlox-Predictix Holdings, Inc. (Predictix), for $25.0 million pursuant to the Stock Purchase Agreement dated as of January 18, 2016, by and among Infor Enterprise Applications, LP (Infor Enterprise), which is an affiliate of the parent company of Infor, and Predictix and the stockholder parties signatory thereto (the Predictix Stock Purchase Agreement). Based in Atlanta, Georgia, Predictix is a provider of cloud-native, predictive, and machine-learning solutions for retailers. We account for our investment in Predictix under the cost method in accordance with applicable accounting principles as we do not have significant influence over Predictix. As of January 31, 2016, our investment in Predictix had a carrying value of approximately $25.0 million.

Business Segments

We view our operations and manage our business as three reportable segments: License, Maintenance, and Consulting. We determine our reportable operating segments in accordance with the provisions in the FASB guidance on segment reporting, which establishes standards for, and requires disclosure of, certain financial information related to reportable operating segments and geographic regions. See Note 16, Segment and Geographic Information.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires us to make certain estimates, judgments and assumptions. These estimates, judgments and assumptions are based upon information available to us at the time that they are made and are believed to be reliable. These estimates, judgments and assumptions can affect the reported amounts of our assets and liabilities as of the date of the financial statements as well as the reported amounts of our revenues and expenses during the periods presented. On an on-going basis we evaluate our estimates and assumptions, including, but not limited to, those related to revenue recognition, allowance for doubtful accounts and sales returns, fair value of equity-based compensation, fair value of acquired intangible assets and goodwill, fair value of contingent consideration related to our acquisitions, useful lives of intangible assets and

property and equipment, income taxes, restructuring obligations, contingencies and litigation, and fair value of derivative financial instruments. We believe these estimates and assumptions are reasonable under the circumstances and they form a basis for making judgments about the carrying values of our assets and liabilities that are not readily apparent from other sources. Differences between these estimates, judgments or assumptions and actual results could materially impact our financial statements. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application.

Fiscal Year

Our fiscal year is from May 1 through April 30 and the third quarter of each fiscal year is from November 1 through January 31. Unless otherwise stated, references to the years 2016 and 2015 relate to our fiscal years ended April 30, 2016 and 2015, respectively. References to future years also relate to our fiscal years ending April 30.

Prior to fiscal 2015, our fiscal year had historically been from June 1 through May 31. Beginning in the first quarter of fiscal 2015, we changed our fiscal year end from May 31 to April 30. This change was effective beginning June 1, 2014, the start of our fiscal year 2015, which ended on April 30, 2015. As a result of this change, for fiscal year 2015 we reported an eleven month transition period from June 1, 2014 to April 30, 2015. Beginning with the first quarter of our fiscal year 2015, we reported our quarterly results in our Quarterly Reports on Form 10-Q based on our new fiscal calendar. Accordingly, as a result of the change in our fiscal year end, our results for the nine months ended January 31, 2015 included the results of May 2014, the last month of our previously reported fiscal year 2014.

2. Summary of Significant Accounting Policies

A detailed description of our significant accounting policies can be found in our financial statements for our fiscal year ended April 30, 2015, which are included in our Form 10-K/T. The following Notes should be read in conjunction with such policies and other disclosures contained therein.

Revenue Recognition

We generate revenues primarily by licensing software and Software-as-a-Service (SaaS) subscriptions, providing software support and product updates, and providing consulting services to our customers. We record all revenues in accordance with the guidance provided by ASC 985-605, Software—Revenue Recognition, and ASC 605, Revenue Recognition. Revenue is recorded net of applicable taxes.

Our software license fees and subscriptions revenues are primarily from sales of perpetual software licenses granting customers use of our software products and access to software products through our SaaS subscription offerings. Software license fees are recognized when the following criteria are met: 1) there is persuasive evidence of an arrangement, 2) the software product has been delivered, 3) the fees are fixed or determinable, and 4) collectability is reasonably assured. SaaS subscription revenues are recognized over the contract term once the software is made available through our SaaS offerings. SaaS subscription revenues are included in software license fees and subscriptions revenues in our Condensed Consolidated Statements of Operations and were approximately $71.8 million and $30.0 million in the third quarter of fiscal 2016 and 2015, respectively, and $164.8 million and $82.9 million in the first nine months of fiscal 2016 and 2015, respectively.

Our product updates and support services entitle our customers to receive, for an agreed upon period, unspecified product upgrades (when and if available), release updates, regulatory updates and patches, as well as support services including access to technical information and technical support staff. The term of product updates and support services is typically twelve months. The product updates and support fees are recorded as product updates and support fees revenue in our Condensed Consolidated Statements of Operations and recognized ratably over the term of the agreement.

We also provide software-related services, including systems implementation and integration services, consulting, training, custom modification and application managed services. Consulting services are generally provided under time and materials contracts. Revenues are recognized as the services are provided and are recorded as consulting services and other fees revenue in our Condensed Consolidated Statements of Operations. Consulting services and other fees also include revenues related to education, hosting services and Inforum, our customer event.

Allowances for Doubtful Accounts, Cancellations and Billing Adjustments

We have established an allowance for estimated billing adjustments and an allowance for estimated amounts that will not be collected. We record provisions for billing adjustments as a reduction of revenue and provisions for doubtful accounts as a component of general and administrative expense in our Condensed Consolidated Statements of Operations.

The following is a rollforward of our allowance for doubtful accounts:


(in millions)
Balance, April 30, 2015	$	11.9
Provision		8.5
Write-offs and recoveries		(7.2	)
Currency translation effect		(0.5	)

Balance, January 31, 2016	$	12.7

Sales Allowances

We do not generally provide a contractual right of return. However, in the course of arriving at practical business solutions to various claims arising from the sale of our products and delivery of our solutions, we have allowed for sales allowances. We record a provision against revenue for estimated sales allowances on license and consulting revenues in the same period the related revenues are recorded or when current information indicates additional allowances are required. The balance of our sales reserve is reflected in deferred revenue on our Condensed Consolidated Balance Sheets.

The following is a rollforward of our sales reserve:


(in millions)
Balance, April 30, 2015	$	7.3
Provision		6.2
Write-offs		(4.2	)
Currency translation effect		(0.2	)

Balance, January 31, 2016	$	9.1

Foreign Currency

The functional currency of our foreign subsidiaries is typically the applicable local currency. The translation from the respective foreign currencies to United States Dollars (U.S. Dollar) is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for income statement accounts using a weighted average exchange rate during the applicable period. Gains or losses resulting from such translation are included as a separate component of accumulated other comprehensive income. Gains or losses resulting from foreign currency transactions are included in foreign currency gain or loss except for the effect of exchange rate fluctuations on long-term intercompany transactions considered to be a long-term investment, which are accumulated and credited or charged to other comprehensive income.

Transaction gains and losses are recognized in our results of operations based on the difference between the foreign exchange rates on the transaction date and on the reporting date. We recognized a net foreign exchange loss of $35.6 million and a net foreign exchange gain of $40.8 million for the three months ended January 31, 2016 and 2015, respectively. In the first nine months of fiscal 2016 and 2015, we recognized a net foreign exchange loss of $9.5 million and a net foreign exchange gain of $74.8 million, respectively. The foreign currency exchange gains and losses are included as a component of other (income) expense, net, in the accompanying Condensed Consolidated Statements of Operations.

Certain foreign currency transaction gains and losses are generated from our intercompany balances that are not considered to be long-term in nature and will be settled between subsidiaries. These intercompany balances are a result of normal transfer pricing transactions among our various operating subsidiaries, as well as certain loans initiated between subsidiaries. We also recognize transaction gains and losses from revaluing our debt denominated in Euros and held by subsidiaries whose functional currency is the U.S. Dollar. See Note 11, Debt.

Adoption of New Accounting Pronouncements

On November 1, 2015, we early adopted the FASB’s updated guidance on simplifying the accounting for measurement-period adjustments relating to business combinations. This guidance requires that an acquirer recognize post-close measurement adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Prior to the issuance of this guidance, entities were required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. We applied the updated guidance prospectively beginning in the third quarter of fiscal 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows.

Recent Accounting Pronouncements — Not Yet Adopted

In May 2014, the FASB issued guidance on the principles for revenue recognition. This guidance is a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new rules establish a core principle that requires the recognition of revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. This guidance was to be effective for annual reporting periods beginning after December 15, 2016 (our fiscal 2018) and early adoption was not permitted. In August 2015, the FASB deferred the effective date by one year, to December 15, 2017, for annual reporting periods beginning after that date (our fiscal 2019). The FASB also decided to allow early adoption of the standard, but not before the original effective date of December 15, 2016. Initial adoption may be accounted for either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of the initial application recognized at the date of adoption. We are currently evaluating how this guidance will affect our revenue recognition, which transition approach we will use upon adoption, and the impact it may have on our financial position, results of operations or cash flows.

In November 2015, the FASB issued guidance simplifying the balance sheet presentation of deferred taxes. Under this guidance, deferred tax assets and deferred tax liabilities are to be classified as non-current in a classified statement of financial position, amending the guidance requiring companies to separate deferred income tax liabilities and assets into current and non-current amounts. This guidance is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods (our first quarter of fiscal 2018), and early adoption is permitted. This guidance may be applied either prospectively to all deferred tax assets and liabilities, or retrospectively to all periods presented. The adoption of this guidance will only impact presentation on our consolidated balance sheets and related disclosures and will not have a material impact on our financial position, results of operations or cash flows. We are currently evaluating the timing of adoption of this guidance and adoption method.

In February 2016, the FASB issued a new leasing standard that will supersede current guidance related to accounting for leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard will be effective for the first interim period within annual periods beginning after December 15, 2018 (our fiscal 2020), with early adoption permitted. The standard is required to be adopted using the modified retrospective approach. We are currently evaluating how this guidance will impact our financial position, results of operations and cash flows.

As of the date of this Quarterly Report, there were no other recent accounting standard updates that we have not yet adopted that we believe would have a material impact on our financial position, results of operations or cash flows.

3. Acquisitions

Fiscal 2016

On September 18, 2015, we acquired a majority ownership stake of 81.48% in GT Nexus, for $550.3 million, net of cash acquired (GT Nexus Acquisition). GT Nexus is a cloud-based supply chain management firm based in Oakland, California. GT Nexus is the cloud platform that some of the world’s largest companies, across many sectors, including manufacturing and retail, use to monitor and orchestrate their global supply chains including automation of sourcing, trade finance and logistics operations. The GT Nexus Acquisition complemented and further expanded our global SCM offerings. The results of operations of GT Nexus have been included in our results of operations from the date of the GT Nexus Acquisition. GT Nexus contributed revenues of $46.7 million and net loss of $12.5 million related to its operations year-to-date in fiscal 2016.

The total consideration for the GT Nexus Acquisition was funded through the issuance of our 5.75% senior secured notes due 2020 (see Note 11, Debt – Senior Secured Notes), together with cash on hand and equity issued to certain shareholders and management of GT Nexus. Transaction and merger related integration costs of $13.4 million associated with the GT Nexus Acquisition were expensed as incurred and are reflected in our results of operations for the nine months ended January 31, 2016, in acquisition-related and other costs. In addition, in the first nine months of fiscal 2016, we took certain actions relating to GT Nexus’ operations to eliminate redundancies, improve our operational efficiency and reduce our operating costs. We may take additional actions in future periods related to GT Nexus as we integrate its operations. See Note 10, Restructuring Charges. The excess of the consideration transferred over the fair values of the net assets acquired and liabilities assumed was recorded as goodwill, which represents operating efficiencies expected to be realized.

The following table summarizes our allocation of the GT Nexus purchase consideration:


(in millions)
Cash	$	14.8
Accounts receivable		36.5
Other current assets		15.3
Identified intangible assets:
Existing technology		93.3
Existing customer relationships		273.5
Tradenames		5.9
Other non-current assets		10.0
Goodwill		368.7
Deferred revenue		(11.3	)
Current liabilities assumed		(31.3	)
Long-term liabilities assumed		(90.0	)
Noncontrolling interests		(10.1	)

Total fair value of net assets acquired		675.3
Less fair value of redeemable noncontrolling interests		(125.0	)

Purchase consideration	$	550.3

Our estimates of fair value and resulting allocation of purchase price related to the GT Nexus Acquisition are preliminary as of January 31, 2016. We are in the process of finalizing the valuation of certain assets and liabilities, primarily income tax liabilities, and as a result the final allocation of the adjusted purchase price may differ from the information presented in these Condensed Consolidated Financial Statements. As of January 31, 2016, based on our current estimation of fair values, the gross contractual accounts receivable at the acquisition date was $37.1 million, and our best estimate of the contractual cash flows not expected to be collected at that date was $0.6 million. The acquired intangible assets relating to GT Nexus’ existing technology, existing customer relationships and tradenames are being amortized over their weighted average estimated useful lives of approximately six years, twelve years and three years, respectively. We have determined that the goodwill arising from the GT Nexus Acquisition will not be deductible for tax purposes.

The 18.52% redeemable noncontrolling interest in GT Nexus includes two redemption features: call options exercisable by the Company and put options exercisable by the redeemable noncontrolling interest holders. Given that the noncontrolling interests are redeemable at the option of the holders, they are reported in the mezzanine section between liabilities and equity on our Condensed Consolidated Balance Sheets. The redeemable noncontrolling interests are puttable at a redemption price of $150.0 million on the first anniversary of the acquisition date. Therefore, we are accreting the redeemable noncontrolling interests, using the effective interest method, from the acquisition date fair value to the redemption value over a one-year period. Accretion adjustments to the carrying value of the redeemable noncontrolling interests are considered deemed dividends and are recorded against additional paid-in capital.

Platform Settlement Services, LLC (PSS), a wholly-owned subsidiary of GT Nexus, is a bankruptcy-remote special purpose entity. PSS was established for the purpose of facilitating the settlement of transactions between GT Nexus customers and their supply chain providers. PSS acts as a collection and paying agent, receiving funds from customers and forwarding to appropriate credit parties. PSS is a custodian of the cash received from its customers and has no legal ownership rights to the funds held in such custodial accounts. Therefore, we do not report any cash in transit in the bank accounts of PSS at period end, nor any cash movements during a reporting period, in our Condensed Consolidated Financial Statements. The balance of cash in transit in custodial accounts held by PSS at January 31, 2016, was $93.1 million.

Fiscal 2015

On September 2, 2014, we acquired the assets of Saleslogix, a division of privately held Swiftpage, Inc., for approximately $30.1 million, net of cash acquired. Based in Scottsdale, Arizona, Saleslogix is a provider of SaaS CRM software accessible via mobile devices, desktops, and laptops. The acquisition of Saleslogix complemented our CRM product offerings and added additional sales and service functionality to our industry-focused Infor CloudSuites in the CRM market. The operating results related to this acquisition have been included in our Condensed Consolidated Financial Statements from the acquisition date.

We recorded approximately $13.4 million of identifiable intangible assets and $18.2 million of goodwill related to our acquisition of Saleslogix. The acquired intangible assets relating to Saleslogix’s existing technology and customer relationships are being amortized over their weighted average estimated useful lives of approximately five and seven years, respectively. We have determined that the goodwill arising from this acquisition will be deductible for tax purposes.

Contingent Consideration

The purchase consideration related to one of our pre-fiscal 2015 acquisitions includes additional contingent cash consideration payable to the sellers if certain future performance conditions are met as detailed in the applicable agreement. The change in the estimated fair value of the contingent consideration, during the contingency period through settlement, is recorded in our results of operations in the period of such change and is included in acquisition-related and other costs in our Consolidated Statements of Operations. As of April 30, 2015, we estimated that no further payments would be required under the contingent consideration arrangement due to the probability of meeting such results and reduced our contingent consideration liability to $0.0 million. In the first quarter of fiscal 2016, we renegotiated the provisions of the applicable contingent consideration agreement with the sellers. As a result of these negotiations, we agreed to an additional one-year contingency period that runs through fiscal 2016 and redefined certain of the contingency conditions. Based on the renegotiated agreement, we estimated the fair value of the remaining contingent consideration to be $0.6 million as of January 31, 2016. The potential undiscounted amount of future payments that we may be required to make related to the contingent consideration arrangement is between $0.0 and $10.0 million.

4. Goodwill

The change in the carrying amount of our goodwill by reportable segment for the period indicated was as follows:


(in millions)	License			Maintenance			Consulting			Total
Balance, April 30, 2015	$	931.5		$	2,851.7		$	262.6		$	4,045.8
Goodwill acquired		335.5			—			33.2			368.7
Currency translation effect		(23.8	)		(75.8	)		(6.8	)		(106.4	)

Balance, January 31, 2016	$	1,243.2		$	2,775.9		$	289.0		$	4,308.1

Goodwill acquired during fiscal 2016 relates to the GT Nexus Acquisition in the second quarter. See Note 3, Acquisitions.

In accordance with the FASB guidance related to goodwill and other intangible assets, we are required to assess the carrying amount of our goodwill for potential impairment annually or more frequently if events or a change in circumstances indicates that impairment may have occurred. We conduct our annual impairment test in the second quarter of each fiscal year as of September 30. We believe that our reportable segments are also representative of our reporting units for purposes of our goodwill impairment testing.

We conducted our most recent annual impairment assessment in the second quarter of fiscal 2016. We chose to perform a Step 1 goodwill impairment assessment as of September 30, 2015. This assessment did not indicate any potential impairment for any of our reporting units and no further testing was required. We believe there was no impairment of our goodwill and no indication of potential impairment existed as of January 31, 2016. We have no accumulated impairment charges related to our goodwill.

5. Fair Value

Fair Value Hierarchy

The FASB has established guidance on financial assets and liabilities and nonfinancial assets and liabilities that are recognized at fair value on a recurring basis and guidance for nonfinancial assets and liabilities that are recognized at fair value on a nonrecurring basis. This guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy which requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to measure fair value.

The three levels of the fair value hierarchy are as follows:


Level 1 —		Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 —		Inputs other than the quoted prices in active markets that are observable either directly or indirectly including: quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 —		Unobservable inputs that are supported by little or no market data, are significant to the fair values of the assets or liabilities, and require the reporting entity to develop its own assumptions.

We measure certain of our financial assets and liabilities at fair value. The following table summarizes the fair value of our financial assets and liabilities that were accounted for at fair value on a recurring basis, by level within the fair value hierarchy, as of January 31, 2016 and April 30, 2015:


	January 31, 2016
	Fair Value Measurements Using Inputs Considered as
(in millions)	Level 1		Level 2		Level 3		Fair Value
Liabilities
Contingent consideration	$	—	$	—	$	0.6	$	0.6
Derivative instruments		—		18.0		—		18.0

Total	$	—	$	18.0	$	0.6	$	18.6


	April 30, 2015
	Fair Value Measurements Using Inputs Considered as
(in millions)	Level 1		Level 2		Level 3		Fair Value
Assets
Cash equivalents	$	27.0	$	—	$	—	$	27.0

Total	$	27.0	$	—	$	—	$	27.0

Liabilities
Derivative instruments	$	—	$	20.8	$	—	$	20.8

Total	$	—	$	20.8	$	—	$	20.8

Cash equivalents include funds held in money market instruments, are reported at their current carrying value which approximates fair value due to the short-term nature of these instruments, and are included in cash and cash equivalents on our Condensed Consolidated Balance Sheets. Our money market instruments are valued using quoted market prices and are included in Level 1 inputs.

Contingent consideration relates to one of our fiscal 2013 acquisitions. The estimated fair value of the contingent consideration was based primarily on our estimates of meeting the applicable contingency conditions as per the terms of the applicable agreement. These include estimates of revenue growth rates and our assessment of the probability of meeting such results, with the probability-weighted earn-out then discounted to estimate fair value. As these are unobservable inputs, the contingent consideration is included in Level 3 inputs. The contingent consideration liability is included in accrued expenses on our Condensed Consolidated Balance Sheets. See Note 3, Acquisitions.

Derivative instruments consist of interest rate swaps entered into to hedge our market risk relating to possible adverse changes in interest rates. The fair value of the interest rate swaps is estimated as the net present value of projected cash flows based upon forward interest rates at the balance sheet date. The models used to value the interest rate swaps are based primarily on readily observable market data, such as LIBOR forward rates, for all substantial terms of the interest rate swap contracts and the credit risk of the counterparties. As such, these derivative instruments are included in Level 2 inputs. See Note 15, Derivative Financial Instruments.

We have had no transfers of assets/liabilities into or out of Levels 1, 2 or 3 during fiscal 2016 or fiscal 2015. The following table reconciles the change in our Level 3 assets/liabilities for the periods indicated:


	Fair Value Measurements Using Significant Unobservable Inputs
(in millions)	Level 3
Balance, April 30, 2015	$	—
Total (gain) loss recorded in earnings		0.6

Balance, January 31, 2016	$	0.6

In addition to the financial assets and liabilities included in the above table, certain nonfinancial assets and liabilities are to be measured at fair value on a nonrecurring basis in accordance with applicable GAAP. In general, nonfinancial assets including goodwill, other intangible assets and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. As of January 31, 2016, we had not recorded any impairment related to such assets and had no other material nonfinancial assets or liabilities requiring adjustments or write-downs to their current fair value.

As allowed by applicable FASB guidance, we have elected not to apply the fair value option for financial assets and liabilities to any of our currently eligible financial assets or liabilities. As of January 31, 2016 and April 30, 2015, our material financial assets and liabilities not carried at fair value included our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses. These financial instruments are recorded at their carrying values which are deemed to approximate fair value, generally due to their short periods to maturity.

Fair Value of Long-Term Debt

To estimate fair value of our long-term debt for disclosure purposes, we used recent market transactions and related market quotes of the bid and ask pricing of our long-term debt (Level 2 on the fair value hierarchy). At January 31, 2016 and April 30, 2015, the total carrying value of our long-term debt was approximately $5.7 billion and $5.2 billion, respectively, and the estimated fair value of our long-term debt was approximately $5.4 billion and $5.4 billion, respectively.

6. Accounts Receivable, Net

Accounts receivable, net is comprised of the following for the periods indicated:


(in millions)	January 31, 2016			April 30, 2015
Accounts receivable	$	340.9		$	308.4
Unbilled accounts receivable		43.5			41.5
Less: allowance for doubtful accounts		(12.7	)		(11.9	)

Accounts receivable, net	$	371.7		$	338.0

Unbilled accounts receivable represents revenue recognized on contracts for which billings have not yet been presented to customers because the amounts were earned but not contractually billable as of the balance sheet date.

7. Intangible Assets, Net

Our intangible assets, net consist of the following for the periods indicated:


	January 31, 2016						April 30, 2015
(in millions)	Gross Carrying Amounts		Accumulated Amortization		Net ⁽¹⁾		Gross Carrying Amounts		Accumulated Amortization		Net		Estimated Useful Lives (in years)
Customer contracts and relationships	$	1,968.9	$	1,243.2	$	725.7	$	1,735.2	$	1,168.4	$	566.8		2–15
Acquired and developed technology		1,106.3		900.3		206.0		1,029.2		868.5		160.7		2–11
Tradenames		137.2		128.8		8.4		132.6		129.1		3.5		1–20

Total	$	3,212.4	$	2,272.3	$	940.1	$	2,897.0	$	2,166.0	$	731.0

(1)	Net intangible assets decreased from April 30, 2015 to January 31, 2016 by approximately $11.2 million due to cumulative foreign currency translation adjustments, reflecting movement in the currencies of the applicable underlying entities.

The following table presents amortization expense recognized in our Condensed Consolidated Statements of Operations, by asset type, for the periods indicated:


	Three Months Ended January 31,				Nine Months Ended January 31,
(in millions)	2016		2015		2016		2015
Customer contracts and relationships	$	37.7	$	35.2	$	104.7	$	108.2
Acquired and developed technology		18.5		17.4		51.0		53.7
Tradenames		0.6		0.2		1.0		2.2

Total	$	56.8	$	52.8	$	156.7	$	164.1

The estimated future annual amortization expense related to these intangible assets as of January 31, 2016, was as follows:


(in millions)
Fiscal 2016 (remaining 3 months)	$	53.5
Fiscal 2017		179.1
Fiscal 2018		131.7
Fiscal 2019		114.3
Fiscal 2020		105.9
Fiscal 2021		100.1
Thereafter		255.5

Total	$	940.1

8. Accrued Expenses

Accrued expenses consisted of the following for the periods indicated:


(in millions)	January 31, 2016		April 30, 2015
Compensation and employee benefits	$	138.5	$	157.3
Taxes other than income		23.1		25.2
Royalties and partner commissions		54.2		54.5
Litigation		1.7		1.6
Professional fees		12.5		8.2
Subcontractor expense		6.9		7.9
Interest		51.9		22.6
Restructuring		11.2		3.7
Asset retirement obligations		2.6		1.4
Deferred rent		2.8		3.5
Other		49.8		53.2

Accrued expenses	$	355.2	$	339.1

Included above in other accrued expenses as of April 30, 2015, is approximately $17.0 million pertaining to dividends accrued related to our funding of interest on our affiliate company’s debt. These dividends were settled in the first quarter of fiscal 2016. See Note 17, Related Party Transactions – Dividends Paid to Affiliates.

9. Equity-Based Compensation

We account for equity-based payments, including grants of employee stock options, restricted stock and other equity-based awards, in accordance with ASC 718, Compensation—Stock Compensation, which requires that equity-based payments (to the extent they are compensatory) be recognized in our results of operations based on their fair values and the estimated number of securities we ultimately expect will vest. We utilize the Option-Pricing Method to estimate the fair value of our equity awards. All equity-based payments are based upon equity issued by Infor Enterprise. Pursuant to applicable FASB guidance related to equity-based awards, we have reflected equity-based compensation expense related to our parent company’s equity grants within our results of operations with an offset to additional paid-in capital.

The following table presents the equity-based compensation expense recognized in our Condensed Consolidated Statements of Operations, by category, for the periods indicated:


	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(in millions)	2016		2015		2016		2015
Cost of software license fees and subscriptions	$	—	$	—	$	—	$	0.2
Cost of product updates and support fees		0.1		—		0.2		0.6
Cost of consulting services and other fees		—		—		—		0.3
Sales and marketing		1.4		0.6		2.1		4.1
Research and development		10.8		1.4		11.4		4.0
General and administrative		3.4		1.8		5.2		7.6

Total	$	15.7	$	3.8	$	18.9	$	16.8

Company Benefit Units

In November 2015, the Company enacted a new equity-based incentive plan (CBU Plan) for the purpose of granting awards to a large portion of our employees. Based on criteria such as tenure, position and personal performance, Infor authorized 1.5 million Company Benefit Units (CBUs) for issuance to employees. During the third quarter of fiscal 2016, 853,000 CBUs were issued to approximately 4,800 employees. The CBUs are non-voting units that vest 25% per year over four years of service. Additionally, a performance condition precludes recognition of compensation cost for accounting purposes until such performance condition is achieved or upon a change of control event, as defined by the CBU Plan agreement. Total unrecognized compensation expense on the CBU’s granted during the third quarter of fiscal 2016 was $7.9 million as of January 31, 2016.

Modification of Management Incentive Units

In fiscal 2012 Infor Enterprise granted Management Incentive Unit (MIU) equity awards to certain employees of Infor. These MIUs are for Class C non-voting units. During fiscal 2014, several of these MIUs were modified to allow for a cash settlement option. See Note 16, Share Purchase and Option Plans, in notes to the consolidated financial statements for the fiscal year ended April 30, 2015, included in our Form 10-K/T, for further details.

In the third quarter of fiscal 2016, certain MIUs with repurchase features that function as in-substance forfeiture provisions were modified to remove the repurchase features. The removal of these features made these grants probable of vesting, resulting in equity-based compensation expense being recognized for the first time on the related modified grants. This modification did not change the classification of the related grants, which remain classified as equity awards. We have recorded incremental equity-based compensation expense of $9.3 million related to these modified grants.

Additionally, in the third quarter of fiscal 2016, certain MIUs without repurchase features which had been modified in fiscal 2014 to add a cash settlement option were further modified to expand the cash settlement option. This modification did not change the classification of the related grants, which remain classified as equity awards. We have recorded incremental equity-based compensation expense of $4.5 million related to these modified grants.

10. Restructuring Charges

We have recorded restructuring charges related to our acquisitions and on occasion to eliminate redundancies, improve our operational efficiency and reduce our operating costs. These cost reduction measures included workforce reductions relating to restructuring our workforce, the exiting of certain leased facilities and the consolidation of space in certain other facilities. In accordance with applicable FASB guidance, our restructuring charges are broken down into acquisition-related and other restructuring costs. These restructuring charges include employee severance costs and costs related to the reduction of office space. No business activities of the companies that we have acquired were discontinued. The workforce reductions were typically from all functional areas of our operations.

Fiscal 2016 Restructuring Charges

During the first nine months of fiscal 2016, we incurred restructuring costs of $15.2 million primarily for employee severance costs related to personnel actions across all functions primarily in the Americas and EMEA regions, and for facility charges related to exiting or consolidation of space in facilities primarily in the Americas region. We made cash payments of approximately $4.6 million during the first nine months of fiscal 2016 related to these actions. We expect to complete the remainder of these actions over the next twelve months.

Fiscal 2016 Acquisition-Related Charges

During the first nine months of fiscal 2016, we incurred acquisition-related restructuring costs of $5.4 million primarily related to the operations of GT Nexus that we acquired in the second quarter of fiscal 2016. These restructuring charges included employee severance costs related to redundant positions and facility charges related to exiting or consolidation of space. During the first nine months of fiscal 2016, we made cash payments of $0.3 million related to these actions. We expect to complete the remainder of these actions over the next twelve months.

Fiscal 2015 Restructuring Charges

During fiscal 2015, we incurred restructuring costs related primarily to employee severance costs for personnel in our sales and professional services organizations primarily in the EMEA region as well as personnel in our product development organization primarily in the APAC region. During the first nine months of fiscal 2016, we recorded restructuring cost reversals of $0.3 million and we made cash payments of approximately $1.4 million related to these actions. The majority of these restructuring activities were completed in fiscal 2015. We expect to complete the remainder of the actions in fiscal 2016.

Previous Restructuring and Acquisition-Related Charges

Prior to fiscal 2015, we had completed certain restructuring activities as well as a series of acquisition-related restructuring actions. During the first nine months of fiscal 2016 we recorded $0.1 million in net adjustments to these restructuring charges and made net cash payments of $1.1 million. The remaining accruals associated with these prior restructuring charges relate primarily to lease obligations associated with the closure of redundant offices acquired in prior business combinations, as well as contractual payment obligations of severed employees. Actions related to these restructuring activities have been completed.

The following table sets forth the reserve activity related to our restructuring plans for the nine-month period ended January 31, 2016. The adjustments to costs in the tables below consist of adjustments to the accrual that were accounted for as an adjustment to current period earnings (Expense) or adjustments to the accrual that were related to the impact of fluctuations in foreign currency exchange rates (Foreign Currency Effect):


					Adjustment to Costs
(in millions)	Balance April 30, 2015		Initial Costs		Expense			Foreign Currency Effect			Cash Payments			Balance January 31, 2016		Total Costs Recognized to Date		Total Expected Program Costs
Fiscal 2016 restructuring
Severance	$	—	$	11.0	$	—		$	(0.2	)	$	(4.3	)	$	6.5	$	11.0	$	11.0
Facilities and other		—		4.2		—			0.1			(0.3	)		4.0		4.1		4.1

Total fiscal 2016 restructuring		—		15.2		—			(0.1	)		(4.6	)		10.5		15.1		15.1

Fiscal 2016 acquisition-related
Severance		—		1.7		—			—			(0.2	)		1.5		1.7		1.7
Facilities and other		—		3.7		—			0.2			(0.1	)		3.8		3.9		3.9

Total fiscal 2016 acquisition-related		—		5.4		—			0.2			(0.3	)		5.3		5.6		5.6

Fiscal 2015 restructuring
Severance		2.2		—		(0.3	)		(0.1	)		(1.4	)		0.4		10.2		10.2

Total fiscal 2015 restructuring		2.2		—		(0.3	)		(0.1	)		(1.4	)		0.4		10.2		10.2

Previous restructuring
Severance		0.6		—		(0.1	)		(0.1	)		(0.2	)		0.2		31.3		31.3
Facilities and other		0.3		—		—			0.1			(0.3	)		0.1		2.3		2.3

Total previous restructuring		0.9		—		(0.1	)		—			(0.5	)		0.3		33.6		33.6

Previous acquisition-related
Severance		0.4		—		—			—			(0.1	)		0.3		40.5		40.5
Facilities and other		0.4		—		0.2			—			(0.5	)		0.1		4.0		4.0

Total previous acquisition-related		0.8		—		0.2			—			(0.6	)		0.4		44.5		44.5

Total restructuring	$	3.9	$	20.6	$	(0.2	)	$	—		$	(7.4	)	$	16.9	$	109.0	$	109.0

The remaining restructuring reserve accruals related to severance and current facilities costs are included in accrued expenses with the long-term facilities cost reserve included in other long-term liabilities on our Condensed Consolidated Balance Sheets.

The following table summarizes the restructuring charges reflected in our results of operations for the periods indicated for each of our reportable segments including charges related to those functions not allocated to our segments.


	Three Months Ended					Nine Months Ended
	January 31,					January 31,
(in millions)	2016		2015			2016		2015
License	$	3.5	$	(0.2	)	$	5.1	$	4.7
Maintenance		1.2		0.1			2.4		1.1
Consulting		1.8		—			2.9		4.3
General and administrative and other functions		5.7		0.4			10.0		1.5

Total restructuring costs	$	12.2	$	0.3		$	20.4	$	11.6

11. Debt

The following table summarizes our long-term debt balances for the periods indicated:


	January 31, 2016									April 30, 2015
	Principal			Net			Contractual			Principal			Net			Contractual
(in millions)	Amount			Amount⁽¹⁾			Rate			Amount			Amount ⁽¹⁾			Rate
First lien Term B-3 due June 3, 2020	$	463.0		$	459.1			3.750	%	$	466.7		$	462.2			3.750	%
First lien Term B-5 due June 3, 2020		2,453.9			2,375.4			3.750	%		2,473.0			2,382.0			3.750	%
First lien Euro Term B due June 3, 2020		366.1			361.6			4.000	%		382.3			377.0			4.000	%
6.5% senior notes due May 15, 2022		1,630.0			1,619.3			6.500	%		1,630.0			1,618.4			6.500	%
5.75% senior notes due May 15, 2022		379.2			373.9			5.750	%		393.0			387.2			5.750	%
5.75% senior secured notes due August 15, 2020		500.0			480.2			5.750	%
Deferred financing fees, debt discounts and premiums, net		(122.7	)		—						(118.2	)		—

Total long-term debt		5,669.5			5,669.5						5,226.8			5,226.8
Less: current portion		(0.1	)		(0.1	)					(0.1	)		(0.1	)

Total long-term debt—non-current	$	5,669.4		$	5,669.4					$	5,226.7		$	5,226.7

(1)	Debt balances net of applicable unamortized debt discounts, premiums and deferred financing fees.

In fiscal 2015 we early adopted the FASB guidance related to simplifying the presentation of debt issuance costs and changed the presentation of our deferred financing fees related to our term loans and senior notes from an asset to a direct deduction from the carrying amount of our long-term debt, consistent with the presentation of debt discounts and premiums. The unamortized balance of our deferred financing fees is included above in deferred financing fees, debt discounts and premiums, net, for the periods indicated.

The weighted average contractual interest rate at January 31, 2016 and April 30, 2015 was 4.80% and 4.80%, respectively. The effective interest rate of each of our debt obligations is not materially different from the contractual interest rate.

The following table summarizes our future repayment obligations related to the principal debt balances for all of our borrowings as of January 31, 2016:


(in millions)
Fiscal 2016 (remaining 3 months)	$	—
Fiscal 2017		1.1
Fiscal 2018		19.1
Fiscal 2019		34.1
Fiscal 2020		34.1
Fiscal 2021		3,694.6
Thereafter		2,009.2

Total	$	5,792.2

Credit Facilities

On April 5, 2012, we entered into a secured credit agreement with Infor (US), Inc. as borrower and a syndicate of certain banks and other financial institutions as lenders which consists of a secured revolving credit facility and a secured term loan facility (the Credit Agreement), which was subsequently amended. See Note 12, Debt, in notes to the consolidated financial statements for the fiscal year ended April 30, 2015, included in our Form 10-K/T, for a description of each amendment.

The credit facilities are guaranteed by Infor, Inc. and certain of our wholly-owned domestic subsidiaries (the Guarantors), and are secured by liens on substantially all of the borrower’s assets and the assets of the Guarantors. Under the Credit Agreement, we are subject to a financial maintenance covenant that is applicable only for the revolving credit facility and then only for those fiscal quarters in which we have significant borrowings under the revolving credit facility outstanding as of the last day of such fiscal quarter. This covenant would require us to maintain a total leverage ratio not to exceed certain levels as of the last day of any such fiscal quarter. We are subject to certain other customary affirmative and negative covenants as well.

Revolver

The secured revolving credit facility (the Revolver) has a maximum availability of $150.0 million. As of January 31, 2016, we have made no draws against the Revolver and no amounts are currently outstanding. However, $11.7 million of letters of credit have reduced the amount available under the Revolver to $138.3 million. Pursuant to the Credit Agreement, there is an undrawn line fee of 0.50% and the Revolver matures on April 5, 2017. Amounts under the Revolver may be borrowed to finance working capital needs and for general corporate purposes. While we have made no draws against the Revolver, interest on any future Revolver borrowings will be based on a fluctuating rate of interest determined by reference to either, at our option, an Adjusted LIBOR rate, plus a margin of 2.75% per annum, or an alternate base rate, plus a margin of 1.75% per annum.

Term Loans

On January 2, 2014, we entered into a $2,550.0 million term loan (the Tranche B-5 Term Loan). Interest on the Tranche B-5 Term Loan is based on a fluctuating rate of interest determined by reference to either, at our option, an Adjusted LIBOR rate, plus a margin of 2.75% per annum, with a LIBOR floor of 1.0%, or an alternate base rate, plus a margin of 1.75% per annum, with a minimum alternative base rate floor of 2.0%. The Tranche B-5 Term Loan matures on June 3, 2020.

On June 3, 2013, we entered into a $483.0 million term loan (the Tranche B-3 Term Loan). Interest on the Tranche B-3 Term Loan is based on a fluctuating rate of interest determined by reference to either, at our option, an Adjusted LIBOR rate, plus a margin of 2.75% per annum, with an Adjusted LIBOR floor of 1.0%, or an alternate base rate, plus a margin of 1.75% per annum, with a minimum alternative base rate floor of 2.0%. The Tranche B-3 Term Loan matures on June 3, 2020.

On June 3, 2013, we entered into a €350.0 million term loan (the Euro Tranche B Term Loan). Interest on the Euro Tranche B Term Loan is based on a fluctuating rate of interest determined by reference to an Adjusted LIBOR rate, plus a margin of 3.0% per annum, with an Adjusted LIBOR floor of 1.0%. The Euro Tranche B Term Loan matures on June 3, 2020.

Interest on the term loans borrowed under the secured term loan facility (the Term Loans) is payable quarterly, in arrears. Quarterly principal payment amounts are set for each of the Term Loans with balloon payments at the applicable maturity dates. The Term Loans are subject to mandatory prepayments in certain situations.

Senior Notes

Our 6.500% and 5.750% Senior Notes (the Senior Notes) bear interest at the applicable rates per annum, which is payable semi-annually in cash in arrears, on May 15 and November 15 each year. The Senior Notes mature on May 15, 2022. The Senior Notes are general unsecured obligations of Infor (US), Inc. and are guaranteed by Infor, Inc. and certain of our wholly-owned domestic subsidiaries. Under the indenture governing the Senior Notes, we are subject to certain customary affirmative and negative covenants.

In connection with the issuance of the Senior Notes, we entered into registration rights agreements with the initial purchasers of the Senior Notes. Under the registration rights agreements, we agreed to file with the SEC a registration statement with respect to an offer to exchange the Senior Notes for a new issue of substantially identical notes no later than 365 days after the date of the original issuance of the notes on April 1, 2015.

Senior Notes Exchange Offer

On January 25, 2016, we filed a Registration Statement on Form S-4 with the SEC (Form S-4), relating to an offer to exchange our Senior Notes (the Exchange Offer) and the related guarantees for the notes that will be registered with the SEC. The Exchange Offer commenced on February 12, 2016, subsequent to the end of the third quarter of fiscal 2016. Under the terms of the Exchange Offer, holders of our Senior Notes can exchange their original 6.500% and 5.750% Senior Notes (the Original Notes) for a like principal amount of 6.500% and 5.750% Senior Notes (the Exchange Notes) that will be registered with the SEC. The terms of the Exchange Notes are substantially identical to those of the Original Notes, except that the transfer restrictions, registration rights and certain additional interest provisions relating to the Original Notes will not apply to the Exchange Notes. The Exchange Offer expires on March 15, 2016, unless extended in our sole discretion. We will not receive any proceeds from the Exchange Offer.

First Lien Senior Secured Notes

On August 25, 2015, in connection with the GT Nexus Acquisition, we issued $500.0 million in aggregate principal amount of 5.750% first lien senior secured notes (the Senior Secured Notes) at an issue price of 99.000% plus accrued interest, if any, from August 25, 2015. The Senior Secured Notes mature on August 15, 2020, and bear interest at the applicable rate per annum that is payable semi-annually in cash in arrears, on February 15 and August 15 each year, beginning on February 15, 2016.

The Senior Secured Notes are first lien senior secured obligations of Infor (US), Inc. and are fully and unconditionally guaranteed on a senior secured basis by Infor, Inc., and certain of our existing and future wholly-owned domestic subsidiaries. Under the indenture governing the Senior Secured Notes, we are subject to certain customary affirmative and negative covenants.

Net proceeds from the issuance of our Senior Secured Notes, after expenses, of approximately $478.5 million were used to fund the GT Nexus Acquisition, including related transaction fees and expenses.

Unrestricted Subsidiary

As of January 31, 2016, we have designated Infor Retail Holdings Inc. (Infor Retail Holdings), a wholly-owned subsidiary of Infor (US), Inc., as an “Unrestricted Subsidiary” as defined under the provisions of our Credit Agreement and the indentures governing our Senior Notes and Senior Secured Notes. The financial position and results of operations of Infor Retail Holdings are included in our Condensed Consolidated Financial Statements. As required by our Credit Agreement and the indentures governing our Senior Notes and Senior Secured Notes, we will present information sufficient to ascertain our financial condition and results of operations excluding our Unrestricted Subsidiaries.

Accordingly, as of January 31, 2016, the financial position of Infor Retail Holdings only reflects our $25.0 million investment in Predictix, acquired in the third quarter of fiscal 2016, with an offsetting credit in equity. See Note 1, Nature of Business and Basis of Presentation – Cost Method Investments. This investment is included in other assets on our Condensed Consolidated Balance Sheets. In addition, Infor Retail Holdings did not have any results of operations to report for the three and nine months ended January 31, 2016, and our Condensed Consolidated Statements of Operations are not impacted by the Unrestricted Subsidiary for any of the periods presented.

Deferred Financing Fees, Debt Discounts and Premiums

As of January 31, 2016 and April 30, 2015, deferred financing fees, net of amortization, related to our Term Loans, Senior Notes, and Secured Senior Notes of $105.1 million and $102.4 million, respectively, were reflected on our Condensed Consolidated Balance Sheets as a direct reduction in the carrying amount of our long-term debt. In addition, we had deferred financing fees, net of amortization, related to the Revolver of $1.6 million and $2.6 million as of January 31, 2016 and April 30, 2015, respectively, which were reflected on our Condensed Consolidated Balance Sheets in other assets. For the three months ended January 31, 2016 and 2015, we amortized $5.3 million and $5.3 million, respectively, in deferred financing fees which are included in interest expense, net in our Condensed Consolidated Statements of Operations. For the first nine months of fiscal 2016 and 2015, we amortized $14.7 million and $15.6 million, respectively, in deferred financing fees.

In addition, we have recorded debt discounts, net of premiums and accumulated amortization, of $17.6 million and $15.8 million as of January 31, 2016 and April 30, 2015, respectively, as a direct reduction of the carrying amount of our long-term debt.

Affiliate Company Borrowings

In addition to the debt held by Infor and its subsidiaries discussed above, certain affiliates of the Company have other borrowings which are not reflected in our Condensed Consolidated Financial Statements for any of the periods presented. These affiliate company borrowings are described below.

Holding Company PIK Notes

On April 8, 2014, Infor Software Parent, LLC (HoldCo), an indirect holding company of Infor, Inc., and its direct subsidiary Infor Software Parent, Inc., issued $750.0 million in aggregate principal amount of 7.125%/7.875% Senior Contingent Cash Pay Notes (the HoldCo Notes) with net proceeds, after expenses, of approximately $737.8 million. The HoldCo Notes mature on May 1, 2021, and bear interest at the applicable rates per annum that is payable semi-annually in arrears, on May 1 and November 1 each year.

Interest is payable entirely in cash, unless certain conditions are satisfied, in which case interest on the HoldCo Notes may be paid by increasing the principal amount of the HoldCo Notes or by issuing new notes (PIK interest), or through a combination of cash and PIK interest. Interest on the notes, if paid in cash, will accrue at a rate of 7.125% per annum. PIK interest on the notes will accrue at a rate of 7.875% per annum. As of January 31, 2016 and April 30, 2015, the total balance outstanding related to the HoldCo Notes was $750.0 million. We may from time-to-time service interest payments related to the HoldCo Notes. Any payment of interest that we may pay will be funded primarily through dividend distributions from Infor to HoldCo. See Note 17, Related Party Transactions – Dividends Paid to Affiliates.

The HoldCo Notes are HoldCo’s general unsecured senior obligations and are not guaranteed by any of HoldCo’s subsidiaries including Infor. The HoldCo Notes rank equally in right of payment with any future unsecured indebtedness of HoldCo, will be effectively subordinated to any future secured indebtedness of HoldCo to the extent of the value of the collateral securing such indebtedness, and will be structurally subordinated to all of the existing and future indebtedness and other liabilities of HoldCo’s subsidiaries, including Infor’s borrowings under its senior secured credit facilities and the Senior Notes.

12. Income Taxes

Income taxes have been provided in accordance with ASC 740, Income Taxes. The effective tax rate for the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. Our effective tax rate may fluctuate as a result of changes in the forecasted annual income level and geographical mix of our operating earnings as well as a result of acquisitions, changes in liabilities recorded for unrecognized tax benefits, changes in the valuation allowances for deferred tax assets, tax settlements with U.S. and foreign tax authorities, and the impact from changes in enacted tax laws.

Our income tax provision and overall effective tax rates were as follows for the periods indicated:


	Three Months Ended						Nine Months Ended
	January 31,						January 31,
(in millions, except percentages)	2016			2015			2016			2015
Income tax provision (benefit)	$	(5.7	)	$	11.6		$	11.2		$	44.2
Effective income tax rate		11.1	%		18.4	%		55.2	%		24.3	%

Our provision for income taxes differs from the tax computed at the U.S. federal statutory rate primarily due to certain earnings considered as indefinitely reinvested in foreign operations, states taxes, and foreign earnings taxed at lower income tax rates than in the U.S.

The change in our effective tax rate for the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015 was primarily driven by a decrease in the proportion of foreign earnings subject to lower tax rates, a reduction in the valuation allowances for various foreign deferred tax assets, an increase in nondeductible taxable income, and an increase in taxes as a result of various tax law changes.

The change in our effective tax rate for the first nine months of fiscal 2016 compared to the corresponding period of fiscal 2015 was primarily driven by a decrease in the proportion of foreign earnings subject to lower tax rates, a reduction in the amount of unrecognized tax benefits, a reduction in the amount of nondeductible taxable income, and an increase in taxes as a result of various tax law changes.

During the upcoming twelve months ending January 31, 2017, we expect a net reduction of approximately $20.1 million of unrecognized tax benefits, primarily due to the expiration of statutes of limitation in various jurisdictions.

Our net deferred tax assets were $102.9 million and $103.6 million as of January 31, 2016 and April 30, 2015, respectively. We believe it is more likely than not that the net deferred tax assets will be realized in the foreseeable future. Realization of our net deferred tax assets is dependent upon our generation of sufficient taxable income in future years in appropriate jurisdictions to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

13. Comprehensive Income (Loss)

Comprehensive income (loss) is the change in equity of a business enterprise from non-stockholder transactions impacting stockholders’ deficit that are not included in the statement of operations and are reported as a separate component of stockholders’ deficit. Other comprehensive income (loss) includes the change in foreign currency translation adjustments, changes in defined benefit plan obligations, and unrealized gain (loss) on derivative instruments.

We report accumulated other comprehensive income (loss) as a separate line item in the stockholders’ deficit section of our Condensed Consolidated Balance Sheets. We report the components of comprehensive income (loss) on our Condensed Consolidated Statements of Comprehensive Income (Loss).

Total accumulated other comprehensive income (loss) and its components were as follows for the periods indicated:


	Foreign			Funded Status			Derivative			Accumulated
	Currency			of Defined			Instruments			Other
	Translation			Benefit			Unrealized			Comprehensive
(in millions)	Adjustment			Pension Plan⁽¹⁾			Gain (Loss)⁽²⁾			Income (Loss)
Balance, April 30, 2015	$	(211.5	)	$	(16.3	)	$	(12.8	)	$	(240.6	)

Other comprehensive income (loss)		(74.3	)		1.4			1.7			(71.2	)
Less: other comprehensive income (loss) attributable to noncontrolling interests		0.4			—			—			0.4

Other comprehensive income (loss) attributable to Infor, Inc.		(73.9	)		1.4			1.7			(70.8	)

Balance, January 31, 2016	$	(285.4	)	$	(14.9	)	$	(11.1	)	$	(311.4	)

(1)	Funded status of defined benefit pension plan is presented net of tax benefit of $4.6 million and $4.6 million as of January 31, 2016 and April 30, 2015, respectively.

(2)	Derivative instruments unrealized gain (loss) is presented net of tax benefit of $6.9 million and $8.0 million as of January 31, 2016 and April 30, 2015, respectively.

The components of other comprehensive income (loss), including amounts reclassified out of accumulated other comprehensive income (loss), were as follows for the periods indicated:


(in millions) Three Months Ended	Before-Tax			Income Tax (Expense) Benefit			Net-of-Tax
January 31, 2016
Foreign currency translation adjustment	$	(11.9	)	$	—		$	(11.9	)
Change in funded status of defined benefit plans		1.2			—			1.2
Derivative instruments unrealized loss		(1.2	)		0.4			(0.8	)
Reclassification adjustments:
Amortization of derivative instruments unrealized loss		3.0			(1.1	)		1.9

Other comprehensive income (loss)	$	(8.9	)	$	(0.7	)	$	(9.6	)

January 31, 2015
Foreign currency translation adjustment	$	(160.9	)	$	—		$	(160.9	)
Change in funded status of defined benefit plans		0.6			—			0.6
Derivative instruments unrealized loss		(3.8	)		1.5			(2.3	)

Other comprehensive income (loss)	$	(164.1	)	$	1.5		$	(162.6	)


(in millions) Nine Months Ended	Before-Tax			Income Tax (Expense) Benefit			Net-of-Tax
January 31, 2016
Foreign currency translation adjustment	$	(74.3	)	$	—		$	(74.3	)
Change in funded status of defined benefit plans		1.4			—			1.4
Derivative instruments unrealized gain (loss)		(6.1	)		2.3			(3.8	)
Reclassification adjustments:
Amortization of derivative instruments unrealized loss		8.9			(3.4	)		5.5

Other comprehensive income (loss)	$	(70.1	)	$	(1.1	)	$	(71.2	)

January 31, 2015
Foreign currency translation adjustment	$	(298.2	)	$	—		$	(298.2	)
Change in funded status of defined benefit plans		2.2			(0.1	)		2.1
Derivative instruments unrealized gain (loss)		(8.7	)		3.4			(5.3	)

Other comprehensive income (loss)	$	(304.7	)	$	3.3		$	(301.4	)

14. Commitments and Contingencies

Leases

We have entered into cancelable and non-cancelable operating leases, primarily related to rental of office space, certain office equipment and automobiles. Total rent expense for operating leases was $14.4 million and $13.8 million for the three-month periods ended January 31, 2016 and January 31, 2015, respectively. For the first nine months of fiscal 2016 and 2015, total rent expense for operating leases was $40.6 million and $42.1 million, respectively.

We have also entered into certain capital lease commitments for buildings, computers and operating equipment and automobiles. Aggregate property acquired through capital leases and the associated depreciation of these assets is included in property and equipment, net on our Condensed Consolidated Balance Sheets. The current portion of capital lease obligations is included in accrued expenses, and the long-term portion of capital lease obligations is included in other long-term liabilities on our Condensed Consolidated Balance Sheets.

Litigation

From time to time, we are subject to litigation in the normal course of business. We accrue for litigation exposure when a loss is probable and estimable. As of January 31, 2016 and April 30, 2015, we have accrued $1.7 million and $1.6 million, respectively, related to current litigation matters. We expense all legal costs to resolve regulatory, legal, tax or other matters in the period incurred.

Patent Infringement Lawsuit by ePlus

On May 19, 2009, ePlus sued Infor (US), Inc. (formerly known as Lawson Software, Inc. (Lawson)), alleging infringement of three separate United States patents. On January 27, 2011, a jury found that Lawson’s S3 Procurement System, when used in combination with certain complementary SCM products we offer that specifically included the Requisition Self Service (RSS) module, infringed two of the ePlus patents. No damages were awarded to ePlus. Following the jury verdict, Lawson developed a design-around product, Requisition Center, which was intended to be a non-infringing replacement product. On May 23, 2011, the Court entered an injunction prohibiting Lawson from licensing, servicing, or supporting in the United States our S3 Procurement System, when used in certain software configurations that included RSS. In September 2011, ePlus moved under the injunction to have Lawson held in contempt. A civil contempt bench trial was conducted in April 2013, resulting in a finding of contempt and an award of damages to ePlus.

Lawson vigorously litigated and defended itself: (a) in its appeal to the United States Court of Appeals for the Federal Circuit from the 2011 judgment of infringement; (b) in the contempt proceedings ePlus had initiated; and (c) in appeals to the Federal Circuit after the District Court declined to vacate the injunction and in regard to its subsequent judgment of civil contempt. As set forth below, that defense strategy has now succeeded completely.

During these proceedings, every patent claim ePlus had asserted against Lawson has been held to be invalid or not infringed. The absence of any valid and infringed patent claim directly led to a ruling by the Court of Appeals for the Federal Circuit on July 25, 2014 in favor of Lawson in all respects. Specifically, the Federal Circuit vacated the District Court’s injunction and contempt orders in their entirety (including all damage awards) and remanded the case back to the District Court “with instructions to dismiss.”

On August 25, 2014, ePlus petitioned the Federal Circuit for a panel rehearing, and/or rehearing en banc. On June 18, 2015, the Federal Circuit issued orders disposing of ePlus’s combined petition. First, the panel that heard the appeal granted the petition for

rehearing “to clarify the decision.” The panel withdrew the opinions issued on July 25, 2014, and substituted a revised opinion (and dissent) that adhered to the previous ruling, namely vacating the District Court’s injunction and contempt orders in their entirety (including all damage awards) and remanding the case to the District Court “with instructions to dismiss.” Second, the petition for en banc review, which had been referred to the active judges of the Court for consideration, was denied. The Federal Circuit issued its mandate on June 25, 2015. On September 8, 2015, the District Court entered a Consent Order that vacated the injunction and contempt orders, dismissed all of ePlus’s claims, entered judgment in favor of Lawson, and awarded $150,000 in taxable costs to Lawson. The entry of the Consent Order was without prejudice to ePlus’s right to seek Supreme Court review of its loss in the Federal Circuit.

ePlus filed a petition for a writ of certiorari from the United States Supreme Court on November 13, 2015, within the extended deadline it obtained for the filing of the petition. On February 29, 2016, the United States Supreme Court denied ePlus’ petition for a writ of certiorari. Apart from purely formal procedural orders, this litigation is now concluded, with Lawson/Infor having achieved a complete victory on every claim asserted against it.

Other Proceedings

We are subject to various other legal proceedings and the risk of litigation by employees, customers, patent owners, suppliers, stockholders or others through private actions, class actions, administrative proceedings or other litigation. While the outcome of these claims cannot be predicted with certainty, we are of the opinion that, based on information presently available, the resolution of any such legal matters existing as of January 31, 2016, will not have a material adverse effect on our financial position, results of operations or cash flows.

Guarantees

We typically grant our customers a warranty that guarantees that our product will substantially conform to Infor’s current specifications for 90 days from the delivery date. We also indemnify our customers from third-party claims of intellectual property infringement relating to the use of our products. Infor’s standard software license agreements contain liability clauses that are limited in amount. We account for these clauses under ASC 460, Guarantees. We do not have a history of incurring costs to settle claims or paying awards under these indemnification obligations. Accordingly, we have not recorded any liabilities related to these agreements as of January 31, 2016 and April 30, 2015.

15. Derivative Financial Instruments

We have entered into certain interest rate swaps with notional amounts totaling $945.0 million to limit our exposure to floating interest rate risk related to a significant portion of the outstanding balance of our Term Loans. See Note 11, Debt. We entered into these interest rate swaps to mitigate our exposure to the variability of the three-month LIBOR for our floating rate debt. We designated these instruments as cash flow hedges upon initiation, they have been highly effective since their inception, and we anticipate that they will be highly effective on an on-going basis. These interest rate swaps had an effective date of March 31, 2015, with a 30-month term expiring September 29, 2017, and have a 1.25% floor.

The following table presents the fair values of the derivative financial instruments included on our Condensed Consolidated Balance Sheets at the dates indicated:


						Balance Sheet			Fair Value at
	Notional		Derivative			Classification			January 31,			April 30,
(in millions, except percentages)	Amount		Base			Asset (Liability)			2016			2015
Accounting cash flow hedges:
Interest rate swap	$	425.3		2.4725	%		Accrued expenses		$	(5.2	)	$	(4.7	)
							Other long-term liabilities			(3.0	)		(4.8	)
Interest rate swap		212.6		2.4740	%		Accrued expenses			(2.6	)		(2.3	)
							Other long-term liabilities			(1.4	)		(2.5	)
Interest rate swap		212.6		2.4750	%		Accrued expenses			(2.6	)		(2.4	)
							Other long-term liabilities			(1.4	)		(2.0	)
Interest rate swap		94.5		2.4725	%		Accrued expenses			(1.1	)		(1.1	)
							Other long-term liabilities			(0.7	)		(1.0	)

Total	$	945.0					Total, net asset	(liability)	$	(18.0	)	$	(20.8	)

The following table presents the before-tax impact of the derivative financial instruments on our other comprehensive income (OCI), accumulated other comprehensive income (AOCI), and our statement of operations for the periods indicated:


			Three Months Ended						Nine Months Ended
	Statement of		January 31,						January 31,
(in millions)	Operations Location		2016			2015			2016			2015
Accounting cash flow hedges:
Interest rate swaps
Effective portion—gain (loss) recognized in OCI			$	(1.2	)	$	(3.8	)	$	(6.1	)	$	(8.7	)

(Gain) loss reclassified from AOCI into net income		Interest expense, net	$	3.0		$	—		$	8.9		$	—

We have no other derivative instruments designated as accounting hedges and no derivatives that are not designated as hedging instruments. The amounts reflected in the above tables do not include any adjustments to reflect the impact of deferred income taxes. For all periods presented, there were no gains or losses recognized in income related to hedge ineffectiveness.

As of January 31, 2016, approximately $11.5 million of the amounts included in accumulated other comprehensive income (loss) related to our derivative instruments is expected to be reclassified into earnings during the next twelve months. This estimate is based on the effective date of our interest rate swaps and the timing of the occurrence of the hedged forecasted transactions. The maximum term over which we are hedging our exposure to the variability of future cash flows (for all forecasted transactions) is approximately 20 months.

16. Segment and Geographic Information

We are a global provider of enterprise business applications software and services focused primarily on medium and large enterprises. We provide industry-specific and other enterprise software products and related services to companies in the manufacturing, distribution, healthcare, public sector, automotive, service industries, ESM&R, consumer products & retail and hospitality industries. We serve customers in the Americas, EMEA and APAC geographic regions.

Segment Information

We view our operations and manage our business as three reportable segments: License, Maintenance and Consulting. See Note 1, Nature of Business and Basis of Presentation – Business Segments. It is around these three key sets of business activities that we have organized our business and established budgets, forecasts and strategic objectives, including go-to-market strategies. Within our organization, multiple sets of information are available reflecting various views of our operations including vertical, geographic, product and/or functional information. However, the financial information provided to and used by our chief operating decision-maker (CODM) to assist in making operational decisions, allocating resources and assessing performance reflects revenues, cost of revenues and sales margin for these three segments.

License—Our License segment develops, markets and distributes enterprise software including the following types of software: enterprise HCM, financial management, business intelligence, asset management, enterprise performance management, supply chain management, service management, manufacturing operations, business project management and property management for hospitality companies. License revenues include license fees resulting from products licensed to our customers on a perpetual basis and subscription revenues related to granting customers access to software products through our SaaS subscription offerings. Product license fees result from a customer’s licensing of a given software product for the first time or with a customer’s licensing of additional users for previously licensed products.

Maintenance—Our Maintenance segment provides software updates and product support including when-and-if-available upgrades, release updates, regulatory updates and patches, access to our knowledge base and technical support team, technical advice

and application management. Generally, these services are provided under annual contracts. Infor’s maintenance agreements are comprehensive customer support programs which entitle customers to various levels of support to meet their specific needs. Infor’s maintenance and customer support offerings are delivered through our global support organization operating from our support centers around the world. Maintenance revenues include product updates and support fees revenues which represent the ratable recognition of fees to enroll and renew licensed products in our maintenance programs. These fees are typically charged annually and are based on the license fees initially paid by the customer. These revenues can fluctuate based on the number and timing of new license contracts, renewal rates and price increases.

Consulting—Our Consulting segment provides software implementation, customization, integration, training and other consulting services related to Infor’s software products. Services in this segment are generally provided under time and materials contracts, and in certain situations, under fixed-fee or maximum-fee contracts. Infor’s consulting offerings range from initial assessment and planning of a project to the actual implementation and post-implementation of a project, including optimizing a customer’s use of our software, as well as training and learning tools designed to help customers become proficient in using Infor’s software quickly and effectively. Consulting services and other revenue include consulting services and other fees revenues from services provided to customers who have licensed Infor’s products.

The measure we use to assess our reportable segments’ operating performance is sales margin. Reportable segment sales margin includes segment revenues net of direct controllable costs. Segment revenues include adjustments to increase revenues that would have been recognized if we had not adjusted certain deferred revenue balances related to acquisitions to their fair values at the time of the acquisition as required by GAAP. Segment costs represent those costs of resources dedicated to each segment, direct sales costs, and allocation of certain operating expenses. Segment costs exclude any allocation of depreciation and amortization related to our acquired intangible assets or restructuring costs.

We do not have any intercompany revenue recorded between reportable segments. The accounting policies for our reportable segments are the same as those used in our consolidated financial statements. We do not assess or report assets or capital expenditures by reportable segment. For disclosure of goodwill by reportable segment see Note 4, Goodwill.

The following table presents financial information for our reportable segments for the periods indicated:


(in millions, except percentages)	Reportable Segment
Three Months Ended	License			Maintenance			Consulting			Total
January 31, 2016
Revenues	$	164.9		$	349.2		$	163.5		$	677.6
Cost of revenues		44.7			61.6			141.2			247.5
Direct sales and marketing costs		91.7			—			—			91.7

Sales margin	$	28.5		$	287.6		$	22.3		$	338.4

Sales margin %		17.3	%		82.4	%		13.6	%		49.9	%
January 31, 2015
Revenues	$	129.3		$	366.6		$	163.1		$	659.0
Cost of revenues		29.8			67.3			136.5			233.6
Direct sales and marketing costs		87.3			—			—			87.3

Sales margin	$	12.2		$	299.3		$	26.6		$	338.1

Sales margin %		9.4	%		81.6	%		16.3	%		51.3	%


(in millions, except percentages)	Reportable Segment
Nine Months Ended	License			Maintenance			Consulting			Total
January 31, 2016
Revenues	$	430.1		$	1,060.6		$	495.3		$	1,986.0
Cost of revenues		113.4			186.3			420.0			719.7
Direct sales and marketing costs		268.3			—			—			268.3

Sales margin	$	48.4		$	874.3		$	75.3		$	998.0

Sales margin %		11.3	%		82.4	%		15.2	%		50.3	%
January 31, 2015
Revenues	$	454.9		$	1,113.7		$	531.7		$	2,100.3
Cost of revenues		89.9			199.0			421.2			710.1
Direct sales and marketing costs		285.7			—			7.2			292.9

Sales margin	$	79.3		$	914.7		$	103.3		$	1,097.3

Sales margin %		17.4	%		82.1	%		19.4	%		52.2	%

The following table presents a reconciliation of our reportable segment revenues, net of the reversal of purchase accounting revenue adjustments, and our reportable segment sales margin to total consolidated revenues and consolidated income (loss) before income tax for the periods indicated:


	Three Months Ended						Nine Months Ended
	January 31,						January 31,
(in millions)	2016			2015			2016			2015
Reportable segment revenues	$	677.6		$	659.0		$	1,986.0		$	2,100.3
Purchase accounting revenue adjustments⁽¹⁾		(6.0	)		(1.6	)		(10.8	)		(4.1	)

Total revenues	$	671.6		$	657.4		$	1,975.2		$	2,096.2

Reportable segment sales margin	$	338.4		$	338.1		$	998.0		$	1,097.3
Other unallocated costs and operating expenses ⁽²⁾		195.7			169.0			535.4			528.7
Amortization of intangible assets and depreciation		65.6			60.1			181.0			186.5
Restructuring costs		12.2			0.3			20.4			11.6

Income from operations		64.9			108.7			261.2			370.5
Total other expense, net		116.2			45.8			240.9			188.4

Income before income tax	$	(51.3	)	$	62.9		$	20.3		$	182.1

(1)	Adjustments to decrease reportable segment revenue for revenue that we would have recognized had we not adjusted acquired deferred revenue as required by GAAP.

(2)

Other unallocated costs and operating expenses include certain sales and marketing expenses, research and development, general and administrative, acquisition-related and other costs, equity-based compensation, as well as adjustments for deferred costs recognized related to acquired deferred revenue.

Geographic Information

The following table presents our revenues summarized by geographic region, based on the location at which each sale originates, for the periods indicated:


(in millions)	Geographic Region
Three Months Ended	Americas		EMEA		APAC		Total
January 31, 2016
Software license fees and subscriptions	$	114.6	$	36.3	$	8.1	$	159.0
Product updates and support fees		227.1		96.4		25.7		349.2

Software revenues		341.7		132.7		33.8		508.2
Consulting services and other fees		86.8		64.3		12.3		163.4

Total revenues	$	428.5	$	197.0	$	46.1	$	671.6

January 31, 2015
Software license fees and subscriptions	$	81.2	$	36.8	$	11.2	$	129.2
Product updates and support fees		232.2		105.7		27.3		365.2

Software revenues		313.4		142.5		38.5		494.4
Consulting services and other fees		79.0		71.4		12.6		163.0

Total revenues	$	392.4	$	213.9	$	51.1	$	657.4


(in millions)	Geographic Region
Nine Months Ended	Americas		EMEA		APAC		Total
January 31, 2016
Software license fees and subscriptions	$	300.1	$	95.3	$	24.5	$	419.9
Product updates and support fees		686.7		295.0		78.4		1,060.1

Software revenues		986.8		390.3		102.9		1,480.0
Consulting services and other fees		264.5		193.5		37.2		495.2

Total revenues	$	1,251.3	$	583.8	$	140.1	$	1,975.2

January 31, 2015
Software license fees and subscriptions	$	283.0	$	129.8	$	41.2	$	454.0
Product updates and support fees		691.7		331.6		87.6		1,110.9

Software revenues		974.7		461.4		128.8		1,564.9
Consulting services and other fees		258.3		228.0		45.0		531.3

Total revenues	$	1,233.0	$	689.4	$	173.8	$	2,096.2

The following table presents our long-lived tangible assets, consisting of property and equipment net of accumulated depreciation, summarized by geographic region:


	Geographic Region
(in millions)	Americas		EMEA		APAC		Total
January 31, 2016	$	81.7	$	20.2	$	11.6	$	113.5
April 30, 2015	$	51.1	$	24.6	$	6.1	$	81.8

The following table sets forth our revenues by country for the periods indicated:


	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(in millions)	2016		2015		2016		2015
United States	$	391.4	$	351.0	$	1,134.9	$	1,098.0
All other countries		280.2		306.4		840.3		998.2

Total revenues	$	671.6	$	657.4	$	1,975.2	$	2,096.2

Revenues attributable to the United States, our country of domicile, and foreign countries are based on the country in which the sales originate.

The following table sets forth long-lived tangible assets by country at the dates indicated:


	January 31,		April 30,
(in millions)	2016		2015
United States	$	79.8	$	48.5
All other countries		33.7		33.3

Total long-lived tangible assets	$	113.5	$	81.8

Only those countries in which revenues or long-lived assets exceed 10% of our consolidated revenues or long-lived assets are reflected in the above tables. In those fiscal periods when a country’s revenues or long-lived tangible assets are less than 10% of the consolidated totals, applicable amounts are included in “all other countries.”

17. Related Party Transactions

Sponsor Transactions

Golden Gate Capital and Summit Partners, L.P. (Summit Partners, and together with Golden Gate Capital, the Sponsors) are our largest investors. We have entered into advisory agreements with our Sponsors pursuant to which we have retained them to provide advisory services relating to financing and strategic business planning, acquisitions and investments, analysis and oversight, executive recruiting and certain other services. We recognize these management fees as a component of general and administrative expenses in our Condensed Consolidated Statement of Operations.

The following table sets forth management fees and expenses rendered under the advisory agreements in connection with acquisitions, debt refinancing and other advisory services for the periods indicated:


	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(in millions)	2016		2015		2016		2015
Golden Gate Capital	$	1.5	$	1.1	$	4.3	$	4.1
Summit Partners		0.5		0.5		1.5		1.5

Total management fees and expenses	$	2.0	$	1.6	$	5.8	$	5.6

At January 31, 2016, $0.9 million of these fees primarily related to Golden Gate Capital remained unpaid.

In connection with the issuance of our Senior Secured Notes in the second quarter of fiscal 2016, we capitalized as deferred financing fees $2.5 million in fees paid to Angel Island Capital Services, LLC, an affiliate of Golden Gate Capital. The deferred financing fees are included in other long-term liabilities on our Condensed Consolidated Balance Sheets as of January 31, 2016. In addition, we expensed buyer transaction fees of approximately $4.8 million payable to Golden Gate Capital and $1.9 million payable to Summit Partners in connection with the GT Nexus Acquisition. These transaction fees are included in acquisition-related and other costs in our Condensed Consolidated Statement of Operations for the nine months ended January 31, 2016. We did not capitalize or expense any similar fees in the comparable period last year.

In the normal course of business, we may sell products and services to companies owned by our Sponsors. Sales to companies owned by Golden Gate Capital and Summit Partners are recognized according to our revenue recognition policy as described in Note 2, Summary of Significant Accounting Policies. Sales to Golden Gate Capital-owned companies were approximately $0.2 million and $0.9 million in the three months and nine months ended January 31, 2016, respectively, and $0.2 million and $0.8 million in the comparable periods of fiscal 2015. We had no sales to companies owned by Summit Partners in the first nine months of fiscal 2016 or the corresponding prior period.

We have made an immaterial amount of payments to companies owned by Golden Gate Capital and Summit Partners for products and services in the current quarter and first nine months of fiscal 2016 and in the comparable periods of fiscal 2015.

Due to/from Affiliates

Infor, through certain of our subsidiaries, had net receivables from our affiliates, primarily HoldCo and Infor Software Parent LLC, of $36.9 million and $35.3 million as of January 31, 2016 and April 30, 2015, respectively. These receivables arose primarily due to our payment of deferred financing fees and interest related to certain acquired debt of Infor Software Parent LLC and are included in receivable from stockholders in the equity section on our Condensed Consolidated Balance Sheets.

Infor has entered into a Tax Allocation Agreement with GGC Software Parent, Inc., and Infor Software Parent LLC (the Tax Allocation Agreement). The Company is included in the GGC Software Parent, Inc. consolidated federal income tax return and the Tax Allocation Agreement sets forth the obligation of Infor and our domestic subsidiaries with regard to preparing and filing tax returns and allocating tax payments under the consolidated reporting rules of the Internal Revenue Code and similar state and local tax laws governing combined or consolidated filings. The Tax Allocation Agreement provides that each domestic subsidiary that is a member of the consolidated, unitary or combined tax group will pay its share of the taxes of the group.

Prior to the second quarter of fiscal 2015, payments of amounts recorded under the terms of the Tax Allocation Agreement were generally recorded as a decrease in our receivable from stockholders. In the first nine months of fiscal 2015, we recorded payments of $5.0 million related to the Tax Allocation Agreement as reductions to our receivable from stockholders.

Beginning in the second quarter of fiscal 2015, primarily due to a change in the legal entities with which we have the Tax Allocation Agreement, certain payments made under the Tax Allocation Agreement have been recorded against affiliate payable, which is included in accounts payable on our Condensed Consolidated Balance Sheets. In the first nine months of fiscal 2016 and 2015, we made payments of $17.6 million and $11.7 million, respectively, under the Tax Allocation Agreement, which were recorded against affiliate payable. We had $4.7 million and $6.4 million payable under the Tax Allocation Agreement as of January 31, 2016 and April 30, 2015, respectively.

Dividends Paid to Affiliates

In the first nine months of fiscal 2016 we paid dividends to certain of our affiliates totaling $35.0 million related to the funding of semi-annual interest on our affiliate’s debt.

In April 2015, HoldCo elected to pay semi-annual interest due related to the HoldCo Notes of approximately $26.7 million in cash (i) with $1.2 million cash on-hand, (ii) with amounts we funded through dividend distributions from Infor to HoldCo of $17.0 million, which were accrued as of April 30, 2015, and (iii) through certain payments made under the Tax Allocation Agreement, totaling $8.5 million. The dividends and amounts due under the Tax Allocation Agreement were paid on May 1, 2015.

In October 2015, HoldCo elected to pay the semi-annual interest due related to the HoldCo Notes of approximately $27.3 million in cash (i) with $0.3 million cash on-hand, (ii) with amounts we funded through dividend distributions from Infor to HoldCo of $18.0 million which were accrued as of October 31, 2015, and (iii) through payments made under the Tax Allocation Agreement of $9.0 million. The dividends and amounts due under the Tax Allocation Agreement were paid on November 2, 2015.

In the first nine months of fiscal 2015 we paid dividends to certain of our affiliates totaling $42.7 million. In October 2014, HoldCo elected to pay interest due related to the HoldCo Notes of $30.1 million in cash and we funded the semi-annual interest due related to the HoldCo Notes through (i) dividend distributions from Infor to HoldCo of $21.6 million and (ii) payments made under the Tax Allocation Agreement of $8.5 million. In October 2014, we made dividend distributions of approximately $21.1 million to Infor Enterprise, an affiliate of the parent company of Infor, to fund equity distributions to members of our executive management team under certain of their equity awards.

In future periods, we may from time-to-time service additional interest payments related to the HoldCo Notes through further dividend distributions.

18. Supplemental Guarantor Financial Information

The Senior Notes and Senior Secured Notes issued by Infor (US), Inc. are fully and unconditionally guaranteed, except for certain customary automatic release provisions, jointly and severally, by Infor, Inc., its parent company, and substantially all of its existing and future wholly-owned domestic subsidiaries (collectively the Guarantor Subsidiaries). See Note 11, Debt. Its other subsidiaries (collectively, the Non-Guarantor Subsidiaries) are not guarantors of our borrowings. The indentures governing the Senior Notes and Senior Secured Notes limit, among other things, the ability of Infor, Inc. and the Guarantor Subsidiaries to incur additional indebtedness; declare or pay dividends; redeem stock or make other distributions to stockholders; make investments; create liens or use assets as security in other transactions; merge or consolidate, or sell, transfer, lease or dispose of substantially all of our assets; enter into transactions with affiliates; and sell or transfer certain assets.

The following tables set forth requisite financial information of Infor, Inc., Infor (US), Inc., the Guarantor Subsidiaries and Non-Guarantor Subsidiaries including our Condensed Consolidating Balance Sheets as of January 31, 2016 and April 30, 2015, our Condensed Consolidating Statements of Operations and our Condensed Consolidating Statements of Comprehensive Income (Loss) for our fiscal quarters and nine-month periods ended January 31, 2016 and 2015, and our Condensed Consolidating Statements of Cash Flows for the nine months ended January 31, 2016 and 2015.

The Infor (US), Inc. (Subsidiary Issuer) column excludes Infor (US), Inc.’s Unrestricted Subsidiary, Infor Retail Holdings, which is included in the Non-Guarantor Subsidiaries column. See Note 11, Debt – Unrestricted Subsidiary.

Condensed Consolidating Balance Sheets


	January 31, 2016
(in millions)	Infor, Inc. (Parent)			Infor (US), Inc. (Subsidiary Issuer)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	57.7		$	—	$	464.2	$	—		$	521.9
Accounts receivable, net		—			158.3			7.3		206.1		—			371.7
Prepaid expenses		—			77.1			24.9		46.6		—			148.6
Income tax receivable		—			52.6			0.6		14.8		—			68.0
Other current assets		—			4.6			0.6		12.3		—			17.5
Affiliate receivable		—			718.0			767.7		55.7		(1,541.4	)		—
Deferred tax assets		—			13.7			4.4		22.3		(0.1	)		40.3

Total current assets		—			1,082.0			805.5		822.0		(1,541.5	)		1,168.0
Property and equipment, net		—			60.4			9.9		43.2		—			113.5
Intangible assets, net		—			427.5			3.0		509.6		—			940.1
Goodwill		—			2,411.8			62.5		1,833.8		—			4,308.1
Deferred tax assets		0.2			—			5.8		62.6		(6.0	)		62.6
Other assets		—			33.9			18.7		46.8		—			99.4
Affiliate receivable		—			638.8			1.4		62.7		(702.9	)		—
Investment in subsidiaries		—			1,989.7			—		—		(1,989.7	)		—

Total assets	$	0.2		$	6,644.1		$	906.8	$	3,380.7	$	(4,240.1	)	$	6,691.7

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	—		$	52.1		$	—	$	22.9	$	—		$	75.0
Income taxes payable		—			—			—		41.8		—			41.8
Accrued expenses		—			153.9			34.1		167.2		—			355.2
Deferred tax liabilities		0.1			—			—		0.7		(0.1	)		0.7
Deferred revenue		—			513.8			17.6		370.9		—			902.3
Affiliate payable		29.5			820.7			639.8		51.4		(1,541.4	)		—
Current portion of long-term obligations		—			0.1			—		—		—			0.1

Total current liabilities		29.6			1,540.6			691.5		654.9		(1,541.5	)		1,375.1
Long-term debt		—			5,669.4			—		—		—			5,669.4
Deferred tax liabilities		—			71.8			—		95.6		(6.0	)		161.4
Affiliate payable		58.3			63.5			0.4		580.7		(702.9	)		—
Other long-term liabilities		—			79.3			19.1		112.0		—			210.4
Losses in excess of investment in subsidiaries		780.5			—			—		—		(780.5	)		—

Total liabilities		868.4			7,424.6			711.0		1,443.2		(3,030.9	)		7,416.3
Redeemable noncontrolling interests		—			—			—		133.7		—			133.7
Total Infor, Inc. stockholders’ equity (deficit)		(868.2	)		(780.5	)		195.8		1,793.9		(1,209.2	)		(868.2	)
Noncontrolling interests		—			—			—		9.9		—			9.9

Total stockholders’ equity (deficit)		(868.2	)		(780.5	)		195.8		1,803.8		(1,209.2	)		(858.3	)

Total liabilities, redeemable noncontrolling interests and stockholders’ equity (deficit)	$	0.2		$	6,644.1		$	906.8	$	3,380.7	$	(4,240.1	)	$	6,691.7


	April 30, 2015
(in millions)	Infor, Inc. (Parent)			Infor (US), Inc. (Subsidiary Issuer)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	86.7		$	—	$	440.0	$	—		$	526.7
Accounts receivable, net		—			145.5			7.8		184.7		—			338.0
Prepaid expenses		—			59.1			12.4		42.4		—			113.9
Income tax receivable		—			34.7			0.2		14.6		0.1			49.6
Other current assets		—			5.9			1.3		10.6		—			17.8
Affiliate receivable		—			521.8			597.8		22.1		(1,141.7	)		—
Deferred tax assets		—			13.3			4.4		13.2		(0.1	)		30.8

Total current assets		—			867.0			623.9		727.6		(1,141.7	)		1,076.8
Property and equipment, net		—			35.9			12.6		33.3		—			81.8
Intangible assets, net		—			520.6			5.8		204.6		—			731.0
Goodwill		—			2,400.6			62.5		1,582.7		—			4,045.8
Deferred tax assets		0.2			—			8.0		72.8		(8.2	)		72.8
Other assets		—			17.3			3.9		19.1		—			40.3
Affiliate receivable		—			751.5			1.4		141.5		(894.4	)		—
Investment in subsidiaries		—			1,557.9			—		—		(1,557.9	)		—

Total assets	$	0.2		$	6,150.8		$	718.1	$	2,781.6	$	(3,602.2	)	$	6,048.5

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	—		$	41.3		$	0.1	$	21.0	$	—		$	62.4
Income taxes payable		—			—			—		33.4		0.1			33.5
Accrued expenses		—			151.0			26.2		161.9		—			339.1
Deferred tax liabilities		0.1			—			—		1.1		(0.1	)		1.1
Deferred revenue		—			512.4			15.2		339.4		—			867.0
Affiliate payable		29.5			591.3			485.3		35.6		(1,141.7	)		—
Current portion of long-term obligations		—			0.1			—		—		—			0.1

Total current liabilities		29.6			1,296.1			526.8		592.4		(1,141.7	)		1,303.2
Long-term debt		—			5,226.7			—		—		—			5,226.7
Deferred tax liabilities		—			86.5			—		28.7		(8.2	)		107.0
Affiliate payable		58.6			169.6			0.3		665.9		(894.4	)		—
Other long-term liabilities		—			80.7			10.8		116.9		—			208.4
Losses in excess of investment in subsidiaries		708.8			—			—		—		(708.8	)		—

Total liabilities		797.0			6,859.6			537.9		1,403.9		(2,753.1	)		6,845.3
Redeemable noncontrolling interests															—
Total Infor, Inc. stockholders’ equity (deficit)		(796.8	)		(708.8	)		180.2		1,377.7		(849.1	)		(796.8	)
Noncontrolling interests		—			—			—		—		—			—

Total stockholders’ equity (deficit)		(796.8	)		(708.8	)		180.2		1,377.7		(849.1	)		(796.8	)

Total liabilities, redeemable noncontrolling interests and stockholders’ equity (deficit)	$	0.2		$	6,150.8		$	718.1	$	2,781.6	$	(3,602.2	)	$	6,048.5

Condensed Consolidating Statements of Operations


	Three Months Ended January 31, 2016
(in millions)	Infor, Inc. (Parent)			Infor (US), Inc. (Subsidiary Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Software license fees and subscriptions	$	—		$	85.2		$	1.9		$	71.9		$	—		$	159.0
Product updates and support fees		—			207.8			7.9			133.5			—			349.2

Software revenues		—			293.0			9.8			205.4			—			508.2
Consulting services and other fees		—			69.8			3.8			89.8			—			163.4

Total revenues		—			362.8			13.6			295.2			—			671.6

Operating expenses:
Cost of software license fees and subscriptions		—			27.0			1.8			16.2			0.7			45.7
Cost of product updates and support fees		—			31.1			0.6			28.8			1.2			61.7
Cost of consulting services and other fees		—			57.4			3.4			78.5			1.9			141.2
Sales and marketing		—			54.5			5.7			47.8			1.6			109.6
Research and development		—			64.2			1.6			45.5			3.2			114.5
General and administrative		—			9.1			33.0			19.3			(8.6	)		52.8
Amortization of intangible assets and depreciation		—			34.5			2.7			28.4			—			65.6
Restructuring costs		—			3.6			0.2			8.4			—			12.2
Acquisition-related and other costs		—			2.3			(0.3	)		1.4			—			3.4
Affiliate (income) expense, net		—			49.0			(39.7	)		(9.3	)		—			—

Total operating expenses		—			332.7			9.0			265.0			—			606.7

Income from operations		—			30.1			4.6			30.2			—			64.9

Other expense, net:
Interest expense, net		—			80.5			—			—			—			80.5
Affiliate interest (income) expense, net		—			(8.1	)		—			8.1			—			—
Other (income) expense, net		—			(5.1	)		—			40.8			—			35.7

Total other expense, net		—			67.3			—			48.9			—			116.2

Income (loss) before income tax		—			(37.2	)		4.6			(18.7	)		—			(51.3	)
Income tax provision (benefit)		—			(11.4	)		0.9			4.8			—			(5.7	)
Equity in (earnings) loss of subsidiaries		44.2			18.4			—			—			(62.6	)		—

Net income (loss)		(44.2	)		(44.2	)		3.7			(23.5	)		62.6			(45.6	)
Net income (loss) attributable to noncontrolling interests		—			—			—			(1.4	)		—			(1.4	)

Net income (loss) attributable to Infor, Inc.	$	(44.2	)	$	(44.2	)	$	3.7		$	(22.1	)	$	62.6		$	(44.2	)


	Three Months Ended January 31, 2015
	Infor, Inc.			Infor (US), Inc.			Guarantor			Non-Guarantor						Total
(in millions)	(Parent)			(Subsidiary Issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Software license fees and subscriptions	$	—		$	74.3		$	2.7		$	52.2		$	—		$	129.2
Product updates and support fees		—			211.7			7.8			145.7			—			365.2

Software revenues		—			286.0			10.5			197.9			—			494.4
Consulting services and other fees		—			67.8			3.1			92.1			—			163.0

Total revenues		—			353.8			13.6			290.0			—			657.4

Operating expenses:
Cost of software license fees and subscriptions		—			18.9			1.7			10.0			0.3			30.9
Cost of product updates and support fees		—			34.5			0.5			31.0			1.3			67.3
Cost of consulting services and other fees		—			53.0			3.9			77.4			2.2			136.5
Sales and marketing		—			51.5			6.1			48.5			1.6			107.7
Research and development		—			54.0			1.8			42.6			3.2			101.6
General and administrative		—			3.5			30.8			19.8			(8.6	)		45.5
Amortization of intangible assets and depreciation		—			36.9			3.5			19.7			—			60.1
Restructuring costs		—			0.2			0.1			—			—			0.3
Acquisition-related and other costs		—			(1.2	)		—			—			—			(1.2	)
Affiliate (income) expense, net		—			55.9			(45.1	)		(10.8	)		—			—

Total operating expenses		—			307.2			3.3			238.2			—			548.7

Income (loss) from operations		—			46.6			10.3			51.8			—			108.7

Other expense, net:
Interest expense, net		—			86.7			—			(0.1	)		—			86.6
Affiliate interest (income) expense, net		—			(9.8	)		—			9.8			—			—
Other (income) expense, net		—			(31.7	)		—			(9.1	)		—			(40.8	)

Total other expense, net		—			45.2			—			0.6			—			45.8

Income (loss) before income tax		—			1.4			10.3			51.2			—			62.9
Income tax provision (benefit)		—			(0.7	)		0.1			12.2			—			11.6
Equity in (earnings) loss of subsidiaries		(51.3	)		(49.2	)		—			—			100.5			—

Net income (loss)		51.3			51.3			10.2			39.0			(100.5	)		51.3
Net income (loss) attributable to noncontrolling interests		—			—			—			—			—			—

Net income (loss) attributable to Infor, Inc.	$	51.3		$	51.3		$	10.2		$	39.0		$	(100.5	)	$	51.3


	Nine Months Ended January 31, 2016
	Infor, Inc.			Infor (US), Inc.			Guarantor			Non-Guarantor						Total
(in millions)	(Parent)			(Subsidiary Issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Software license fees and subscriptions	$	—		$	246.5		$	6.2		$	167.2		$	—		$	419.9
Product updates and support fees		—			626.5			23.7			409.9			—			1,060.1

Software revenues		—			873.0			29.9			577.1			—			1,480.0
Consulting services and other fees		—			222.3			10.7			262.2			—			495.2

Total revenues		—			1,095.3			40.6			839.3			—			1,975.2

Operating expenses:
Cost of software license fees and subscriptions		—			74.5			5.5			35.0			1.5			116.5
Cost of product updates and support fees		—			95.2			1.8			86.0			3.5			186.5
Cost of consulting services and other fees		—			171.5			10.1			232.7			5.7			420.0
Sales and marketing		—			161.1			16.9			135.0			4.5			317.5
Research and development		—			173.0			5.3			126.3			8.8			313.4
General and administrative		—			17.5			91.6			58.6			(24.0	)		143.7
Amortization of intangible assets and depreciation		—			104.3			9.1			67.6			—			181.0
Restructuring costs		—			7.4			0.5			12.5			—			20.4
Acquisition-related and other costs		—			13.1			0.1			1.8			—			15.0
Affiliate (income) expense, net		—			135.7			(112.7	)		(23.0	)		—			—

Total operating expenses		—			953.3			28.2			732.5			—			1,714.0

Income from operations		—			142.0			12.4			106.8			—			261.2

Other expense, net:
Interest expense, net		—			231.6			—			—			—			231.6
Affiliate interest (income) expense, net		—			(25.5	)		—			25.5						—
Other (income) expense, net		—			(13.2	)		—			22.5			—			9.3

Total other expense, net		—			192.9			—			48.0			—			240.9

Income (loss) before income tax		—			(50.9	)		12.4			58.8			—			20.3
Income tax provision (benefit)		—			(17.9	)		2.0			27.1			—			11.2
Equity in loss (earnings) of subsidiaries		(11.5	)		(44.5	)		—			—			56.0			—

Net income (loss)		11.5			11.5			10.4			31.7			(56.0	)		9.1
Net income (loss) attributable to noncontrolling interests		—			—			—			(2.4	)		—			(2.4	)

Net income (loss) attributable to Infor, Inc.	$	11.5		$	11.5		$	10.4		$	34.1		$	(56.0	)	$	11.5


	Nine Months Ended January 31, 2015
	Infor, Inc.			Infor (US), Inc.			Guarantor			Non-Guarantor						Total
(in millions)	(Parent)			(Subsidiary Issuer)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Software license fees and subscriptions	$	—		$	259.3		$	10.0		$	184.7		$	—		$	454.0
Product updates and support fees		—			626.3			23.1			461.5			—			1,110.9

Software revenues		—			885.6			33.1			646.2			—			1,564.9
Consulting services and other fees		—			218.8			10.0			302.5			—			531.3

Total revenues		—			1,104.4			43.1			948.7			—			2,096.2

Operating expenses:
Cost of software license fees and subscriptions		—			57.1			5.9			29.7			0.8			93.5
Cost of product updates and support fees		—			97.2			1.8			96.9			3.7			199.6
Cost of consulting services and other fees		—			157.6			13.3			244.5			6.1			421.5
Sales and marketing		—			173.3			20.4			156.8			4.5			355.0
Research and development		—			162.6			6.4			130.0			8.9			307.9
General and administrative		—			20.4			93.1			62.5			(24.0	)		152.0
Amortization of intangible assets and depreciation		—			110.8			10.1			65.6			—			186.5
Restructuring costs		—			1.7			0.3			9.6			—			11.6
Acquisition-related and other costs		—			(2.9	)		0.2			0.8			—			(1.9	)
Affiliate (income) expense, net		—			175.2			(137.8	)		(37.4	)		—			—

Total operating expenses		—			953.0			13.7			759.0			—			1,725.7

Income from operations		—			151.4			29.4			189.7			—			370.5

Other expense, net:
Interest expense, net		—			263.4			0.2			(0.3	)		—			263.3
Affiliate interest (income) expense, net		—			(31.8	)		(0.1	)		31.9			—			—
Other (income) expense, net		—			(66.9	)		—			(8.0	)		—			(74.9	)

Total other expense, net		—			164.7			0.1			23.6			—			188.4

Income (loss) before income tax		—			(13.3	)		29.3			166.1			—			182.1
Income tax provision (benefit)		—			(6.1	)		8.4			41.9			—			44.2
Equity in loss (earnings) of subsidiaries		(137.9	)		(145.1	)		—			—			283.0			—

Net income (loss)		137.9			137.9			20.9			124.2			(283.0	)		137.9
Net income (loss) attributable to noncontrolling interests		—			—			—			—			—			—

Net income (loss) attributable to Infor, Inc.	$	137.9		$	137.9		$	20.9		$	124.2		$	(283.0	)	$	137.9

Condensed Consolidating Statements of Comprehensive Income (Loss)


	Three Months Ended January 31, 2016
	Infor, Inc.			Infor (US), Inc.			Guarantor		Non-Guarantor						Total
(in millions)	(Parent)			(Subsidiary Issuer)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	(44.2	)	$	(44.2	)	$	3.7	$	(23.5	)	$	62.6		$	(45.6	)

Other comprehensive income (loss):
Unrealized gain (loss) on foreign currency translation, net of tax		—			—			—		(11.9	)		—			(11.9	)
Defined benefit plan funding status, net of tax		—			—			—		1.2			—			1.2
Unrealized gain (loss) on derivative instruments, net of tax		—			1.1			—		—			—			1.1

Total other comprehensive income (loss)		—			1.1			—		(10.7	)		—			(9.6	)

Comprehensive income (loss)		(44.2	)		(43.1	)		3.7		(34.2	)		62.6			(55.2	)

Comprehensive income (loss) attributable to noncontrolling interests		—			—			—		(1.8	)		—			(1.8	)

Comprehensive income (loss) attributable to Infor, Inc.	$	(44.2	)	$	(43.1	)	$	3.7	$	(32.4	)	$	62.6		$	(53.4	)


	Three Months Ended January 31, 2015
	Infor, Inc.			Infor (US), Inc.			Guarantor		Non-Guarantor						Total
(in millions)	(Parent)			(Subsidiary Issuer)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	51.3		$	51.3		$	10.2	$	39.0		$	(100.5	)	$	51.3

Other comprehensive income (loss):
Unrealized gain (loss) on foreign currency translation, net of tax		—			—			—		(160.9	)		—			(160.9	)
Defined benefit plan funding status, net of tax		—			—			—		0.6			—			0.6
Unrealized gain (loss) on derivative instruments, net of tax		—			(2.3	)		—		—			—			(2.3	)

Total other comprehensive income (loss)		—			(2.3	)		—		(160.3	)		—			(162.6	)

Comprehensive income (loss)		51.3			49.0			10.2		(121.3	)		(100.5	)		(111.3	)

Comprehensive income (loss) attributable to noncontrolling interests		—			—			—		—			—			—

Comprehensive income (loss) attributable to Infor, Inc.	$	51.3		$	49.0		$	10.2	$	(121.3	)	$	(100.5	)	$	(111.3	)


	Nine Months Ended January 31, 2016
	Infor, Inc.			Infor (US), Inc.			Guarantor		Non-Guarantor						Total
(in millions)	(Parent)			(Subsidiary Issuer)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	11.5		$	11.5		$	10.4	$	31.7		$	(56.0	)	$	9.1

Other comprehensive income (loss):
Unrealized gain (loss) on foreign currency translation, net of tax		—			—			—		(74.3	)		—			(74.3	)
Defined benefit plan funding status, net of tax		—			—			—		1.4			—			1.4
Unrealized gain (loss) on derivative instruments, net of tax		—			1.7			—		—			—			1.7

Total other comprehensive income (loss)		—			1.7			—		(72.9	)		—			(71.2	)

Comprehensive income (loss)		11.5			13.2			10.4		(41.2	)		(56.0	)		(62.1	)

Comprehensive income (loss) attributable to noncontrolling interests		—			—			—		(2.8	)		—			(2.8	)

Comprehensive income (loss) attributable to Infor, Inc.	$	11.5		$	13.2		$	10.4	$	(38.4	)	$	(56.0	)	$	(59.3	)


	Nine Months Ended January 31, 2015
	Infor, Inc.		Infor (US), Inc.			Guarantor		Non-Guarantor						Total
(in millions)	(Parent)		(Subsidiary Issuer)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	137.9	$	137.9		$	20.9	$	124.2		$	(283.0	)	$	137.9

Other comprehensive income (loss):
Unrealized gain (loss) on foreign currency translation, net of tax		—		—			—		(298.2	)		—			(298.2	)
Defined benefit plan funding status, net of tax		—		0.1			—		2.0			—			2.1
Unrealized gain (loss) on derivative instruments, net of tax		—		(5.3	)		—		—			—			(5.3	)

Total other comprehensive income (loss)		—		(5.2	)		—		(296.2	)		—			(301.4	)

Comprehensive income (loss)		137.9		132.7			20.9		(172.0	)		(283.0	)		(163.5	)

Comprehensive income (loss) attributable to noncontrolling interests		—		—			—		—			—			—

Comprehensive income (loss) attributable to Infor, Inc.	$	137.9	$	132.7		$	20.9	$	(172.0	)	$	(283.0	)	$	(163.5	)

Condensed Consolidating Statements of Cash Flows


	Nine Months Ended January 31, 2016
	Infor, Inc.		Infor (US), Inc.			Guarantor			Non-Guarantor					Total
(in millions)	(Parent)		(Subsidiary Issuer)			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	—	$	92.3		$	3.6		$	125.6		$	—	$	221.5

Cash flows from investing activities:
Acquisitions, net of cash acquired		—		(549.6	)		—			—			—		(549.6	)
Purchase of other investments		—		—			—			(25.0	)		—		(25.0	)
Change in restricted cash		—		—			—			(3.2	)		—		(3.2	)
Purchases of property, equipment and software		—		(33.5	)		(3.6	)		(12.3	)		—		(49.4	)

Net cash used in investing activities		—		(583.1	)		(3.6	)		(40.5	)		—		(627.2	)

Cash flows from financing activities:
Dividends paid		—		(35.0	)		—			—			—		(35.0	)
Loans to stockholders		—		(1.6	)		—			—			—		(1.6	)
Payments on capital lease obligations		—		(0.3	)		—			(2.1	)		—		(2.4	)
Proceeds from issuance of debt		—		495.0			—			—			—		495.0
Payments on long-term debt		—		(25.6	)		—			—			—		(25.6	)
(Payments) proceeds from affiliate within group		—		47.0			—			(47.0	)		—		—
Deferred financing fees		—		(16.5	)		—			—			—		(16.5	)
Other		—		(1.2	)		—			—			—		(1.2	)

Net cash provided by (used in) financing activities		—		461.8			—			(49.1	)		—		412.7

Effect of exchange rate changes on cash and cash equivalents		—		—			—			(11.8	)		—		(11.8	)

Net increase (decrease) in cash and cash equivalents		—		(29.0	)		—			24.2			—		(4.8	)
Cash and cash equivalents at the beginning of the period		—		86.7			—			440.0			—		526.7

Cash and cash equivalents at the end of the period	$	—	$	57.7		$	—		$	464.2		$	—	$	521.9


	Nine Months Ended January 31, 2015
	Infor, Inc.		Infor (US), Inc.			Guarantor			Non-Guarantor					Total
(in millions)	(Parent)		(Subsidiary Issuer)			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	—	$	90.5		$	5.0		$	166.2		$	—	$	261.7

Cash flows from investing activities:
Acquisitions, net of cash acquired		—		(27.3	)		—			(2.8	)		—		(30.1	)
Purchase of other investments		—		—			—			—			—		—
Change in restricted cash		—		18.3			—			(0.3	)		—		18.0
Purchases of property, equipment and software		—		(10.4	)		(5.0	)		(13.4	)		—		(28.8	)

Net cash used in investing activities		—		(19.4	)		(5.0	)		(16.5	)		—		(40.9	)

Cash flows from financing activities:
Dividends paid		—		(42.7	)		—			—			—		(42.7	)
Loans to stockholders		—		(0.2	)		—			—			—		(0.2	)
Payments on capital lease obligations		—		(0.3	)		—			(1.8	)		—		(2.1	)
Payments on long-term debt		—		(80.2	)		—			—			—		(80.2	)
(Payments) proceeds from affiliate within group		—		(0.3	)		—			0.3			—		—
Other		—		(8.5	)		—			—			—		(8.5	)

Net cash provided by (used in) financing activities		—		(132.2	)		—			(1.5	)		—		(133.7	)

Effect of exchange rate changes on cash and cash equivalents		—		—			—			(48.4	)		—		(48.4	)

Net increase (decrease) in cash and cash equivalents		—		(61.1	)		—			99.8			—		38.7
Cash and cash equivalents at the beginning of the period		—		136.6			—			310.5			—		447.1

Cash and cash equivalents at the end of the period	$	—	$	75.5		$	—		$	410.3		$	—	$	485.8

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We have changed our fiscal year end from May 31 to April 30, effective for our fiscal year 2015. Beginning with the first quarter of our fiscal year 2015, we reported our quarterly results based on our new fiscal calendar. Accordingly, in this Quarterly Report on Form 10-Q, we have reported the third quarter of fiscal year 2016 as the three months ended January 31, 2016, and the third quarter of fiscal year 2015 as the three-month period ended January 31, 2015. The nine-month period ended January 31, 2015 includes the results of May 2014, the last month of our previously reported fiscal year 2014. As a result, the year-to-date through January period of fiscal 2015 included four quarter-end months, May 2014, July 2014, October 2014 and January 2015, when sales volumes tend to be higher. In contrast, the year-to-date through January period of fiscal 2016 included May 2015, the first month of the fiscal year, when sales volumes are ordinarily lower. This difference has resulted in difficult year-over-year comparisons for the year-to-date through January Period of fiscal 2016.

The following discussion and analysis of our financial condition and result of operations for the fiscal periods ended January 31, 2016, should be read in conjunction with the audited financial statements of Infor, Inc. for our fiscal year ended April 30, 2015, which are included in our Form 10-K/T, and related notes thereto.

Any reference to Infor, we, our, us or the Company refers to Infor, Inc. and its consolidated subsidiaries.

Management Overview

General

Infor is a global provider of enterprise business applications software and services focused primarily on medium and large enterprises. We design, develop, market, distribute and service enterprise software applications that help organizations manage their businesses. We deliver integrated enterprise business solutions including customer relationship management (CRM), enterprise asset management (EAM), enterprise resource planning, financial management, human capital management (HCM), performance management, product lifecycle management, property management systems, central reservations systems, supplier relationship management and supply chain management (SCM), including business-specific inventory management, transportation logistics, manufacturing and warehouse management software. Infor also offers software license updates and product support as well as other services including consulting, advanced product services, hosting and education.

We offer a broad range of highly functional and technically advanced software applications and industry-specific solutions that we believe help our customers improve their business processes and reduce costs, resulting in better business or operational performance. Our solutions help automate and integrate critical business processes which enable our customers to better manage their suppliers, partners, customers and employees.

We specialize in and target specific industries (or verticals) and have industry-specific business units that leverage our industry-oriented products and teams. We provide industry-specific enterprise software products to companies in the manufacturing, healthcare, distribution, public sector, automotive, service industries, equipment services, management and rental, consumer products and retail, and hospitality industries. Our industry-specific approach allows us to focus on specialized software programs that take less time and cost to meet target customers’ specific needs during periods of implementation and upgrade. Augmenting our vertical-specific applications, we have leading horizontal software applications, including our CRM, EAM, HCM, SCM and financial application suites, which, through our proprietary light-weight middleware solution ION^®, are integrated with our enterprise software applications and sold across verticals. By delivering deep industry functionality coupled with lightweight integration, our customers can take advantage of these mission-critical applications and suites in the cloud, running on Amazon Web Services, a cloud infrastructure industry-leader.

We generate revenue primarily from the sale of perpetual software licenses granting customers use of our software products, providing access to software products through our Software-as-a-Service (SaaS) subscription offerings, providing product updates and support and providing consulting services to our customers. We operate in three segments: License, Maintenance and Consulting. We market and sell our software and services primarily through a direct sales force, which is augmented by systems integrators and resellers. In addition to providing software products, we generate substantial recurring revenue by providing on-going software support services to our customers through our product update and support programs. The product updates and support we provide are valued by our customers as evidenced by our high annual maintenance retention rates. We also help our customers implement and use our applications effectively through our consulting services offerings, including training, implementation and consulting services.

We serve a large, diverse and specialized global customer base across three geographic regions—the Americas, Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC). We have approximately 14,260 employees worldwide and have offices in 43 countries. We have established a worldwide infrastructure for distribution, development and support of our enterprise software.

This worldwide coverage provides us with both economies of scale and the ability to leverage our geographical expertise to effectively enter new markets and segments. In the first nine months of fiscal 2016, the Americas, EMEA and APAC regions generated approximately 63.3%, 29.6% and 7.1% of our revenues, respectively. Though we have a considerable presence outside of the U.S. today, we continue to believe we have significant opportunities to expand internationally and capture market share, especially in the EMEA and APAC regions.

Acquisitions

An acquisition program is an important element of our corporate strategy. We have invested billions of dollars to acquire a number of complementary companies, products, services and technologies. We believe our acquisition program strengthens our competitive position, enhances the products and services that we can offer to customers, expands our customer base, provides greater scale to accelerate innovation, grows our revenues and earnings, and increases our overall value. We expect to continue to acquire companies, products, services and technologies in furtherance of our corporate strategy. See Note 3, Acquisitions, for additional information related to our recent acquisitions.

We believe we can fund future acquisitions with our internally available cash, cash equivalents and marketable securities, cash generated from operations or additional borrowings. We estimate the financial impact of any potential acquisition with regard to earnings, operating margin, cash flow and return on invested capital targets before deciding to move forward with an acquisition.

Fiscal 2016 Acquisitions

On September 18, 2015, we acquired a majority ownership stake of 81.48% in GT Nexus, Inc. (GT Nexus), for $550.3 million, net of cash acquired (the GT Nexus Acquisition). GT Nexus is a cloud-based SCM firm based in Oakland, California and provides the cloud platform that some of the world’s largest companies, across many sectors, such as manufacturing and retail, use to monitor and orchestrate their global supply chains including automation of sourcing, trade finance and logistics operations, enabling Infor to create a global commerce cloud providing end-to-end visibility and control across physical and financial supply chains. We funded the total consideration related to this transaction through the use of the proceeds of the issuance of our Senior Secured Notes discussed below, together with cash on hand and equity issued to certain shareholders and management of GT Nexus.

Fiscal 2015 Acquisitions

In fiscal 2015, we completed one acquisition. On September 2, 2014, we acquired the assets of Saleslogix, a division of privately held Swiftpage, Inc., for approximately $30.1 million, net of cash acquired. Based in Scottsdale, Arizona, Saleslogix is a provider of SaaS CRM software accessible via mobile devices, desktops, and laptops. The acquisition of Saleslogix complemented our CRM product offerings and added additional sales and service functionality to our industry-focused Infor CloudSuites in the high-growth CRM market.

Financing Activities

On August 25, 2015, in connection with the GT Nexus Acquisition, we issued $500.0 million in aggregate principal amount of 5.75% first lien senior secured notes. Net proceeds from the issuance of our Senior Secured Notes, after expenses, of approximately $478.5 million were used to fund the GT Nexus Acquisition, and to pay related transaction fees and expenses. See Liquidity and Capital Resources – Long-Term Debt below for details.

Non-GAAP Financial Measures

Our results of operations in this Management’s Discussion and Analysis are presented in accordance with accounting principles generally accepted in the United States (GAAP). In addition to reporting our financial results in accordance with GAAP, we present certain non-GAAP financial measures as well. Presentation of these non-GAAP measures allows users to review our results of operations from the same perspective as management and our Board of Directors. These non-GAAP measures include non-GAAP revenues. See Non-GAAP Financial Measure Reconciliations below for additional information regarding our use of these non-GAAP financial measures and reconciliations to the corresponding GAAP measures.

Foreign Currency

A significant portion of our business is conducted in currencies other than the U.S. Dollar, particularly the Euro and British Pound. Our revenues and operating expenses are affected by fluctuations in applicable foreign currency exchange rates. Downward fluctuations in the value of the U.S. Dollar compared to a foreign currency generally have the effect of increasing our revenues but also increasing our operating expenses denominated in currencies other than the U.S. Dollar. Similarly, strengthening in the

U.S. Dollar compared to foreign currency exchange rates generally has the effect of reducing our revenues but also reducing our operating expenses denominated in currencies other than the U.S. Dollar. In addition, we have certain intercompany transfer pricing transactions, intercompany loans and other intercompany transactions that are not considered permanent in nature. Fluctuations in applicable foreign currency exchange rates on these intercompany balances may impact our results of operations.

For the third quarter of fiscal 2016, the average exchange rates for the U.S. Dollar against the Euro and British Pound strengthened by approximately 10.7% and 4.3%, respectively, as compared to the average exchange rates for the third quarter of fiscal 2015. For the nine months ended January 31, 2016, the average exchange rates for the U.S. Dollar against the Euro and British Pound strengthened by approximately 14.4% and 6.2%, respectively, as compared to the average exchange rates for the corresponding period of fiscal 2015.

Our international operations have provided and will continue to provide a significant portion of our total revenues and expenses. As a result, total revenues and expenses will continue to be affected by changes in the U.S. Dollar against major international currencies. In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the percent change in the results from one period to another period using constant currency disclosure. To present this information, the most current period results for our entities reporting in currencies other than the U.S. Dollar are converted into U.S. Dollars at constant exchange rates (i.e., the average rates in effect in the prior comparable period) rather than the actual exchange rates in effect during the respective period. In each of the tables below, we present the percent change based on actual results in reported currency and in constant currency.

The following tables summarize the period-over-period change, both in U.S. Dollars and percentages, in revenues and costs and expenses, isolating the fluctuations in exchange rates from changes in activity and pricing on a constant currency basis for the periods indicated:


(in millions, except percentages)	Change Due			Change in						Change Due			Change in
Three Months Ended January 31,	to Currency			Constant						to Currency			Constant
2016 vs. 2015	Fluctuations			Currency			Total Change			Fluctuations			Currency			Total Change
Revenues:
Software license fees and subscriptions	$	(5.1	)	$	34.9		$	29.8			(3.9	)%		27.0	%		23.1	%
Product updates and support fees		(14.8	)		(1.2	)		(16.0	)		(4.1	)		(0.3	)		(4.4	)

Software revenues		(19.9	)		33.7			13.8			(4.0	)		6.8			2.8
Consulting services and other fees		(9.7	)		10.1			0.4			(6.0	)		6.2			0.2

Total revenues	$	(29.6	)	$	43.8		$	14.2			(4.5	)%		6.7	%		2.2	%

Total operating expenses	$	(26.4	)	$	84.4		$	58.0			(4.8	)%		15.4	%		10.6	%


(in millions, except percentages)	Change Due			Change in						Change Due			Change in
Nine Months Ended January 31,	to Currency			Constant						to Currency			Constant
2016 vs. 2015	Fluctuations			Currency			Total Change			Fluctuations			Currency			Total Change
Revenues:
Software license fees and subscriptions	$	(18.8	)	$	(15.3	)	$	(34.1	)		(4.1	)%		(3.4	)%		(7.5	)%
Product updates and support fees		(60.9	)		10.1			(50.8	)		(5.5	)		0.9			(4.6	)

Software revenues		(79.7	)		(5.2	)		(84.9	)		(5.1	)		(0.3	)		(5.4	)
Consulting services and other fees		(40.3	)		4.2			(36.1	)		(7.6	)		0.8			(6.8	)

Total revenues	$	(120.0	)	$	(1.0	)	$	(121.0	)		(5.8	)%		0.0	%		(5.8	)%

Total operating expenses	$	(104.0	)	$	92.3		$	(11.7	)		(6.0	)%		5.3	%		(0.7	)%

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in conformity with GAAP which requires us to make certain estimates, judgments and assumptions. We believe that these estimates, judgments and assumptions are reasonable based upon information available to us at the time that they are made. These estimates, judgments and assumptions can affect the reported amounts of our assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected.

Our critical accounting policies are described in detail in our Management’s Discussion and Analysis of Financial Condition and Results of Operations, as provided in our Form 10-K/T. These policies reflect those areas that require more significant judgments, and use of estimates and assumptions in the preparation of our financial statements and include the following:

•

Revenue Recognition;

•

Business Combinations;

•

Restructuring;

•

Valuation of Accounts Receivable;

•

Valuation and Assessment of Impairment of Goodwill and Intangible Assets;

•

Income Taxes and Valuation of Deferred Tax Assets;

•

Contingencies – Litigation Reserves; and

•

Equity-Based Compensation.

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. Our senior management has reviewed our critical accounting policies and related disclosures with the Audit Committee of our Board of Directors.

There have been no material changes to our critical accounting policies and estimates during the first nine months of fiscal 2016.

Results of Operations

The following tables set forth our unaudited Condensed Consolidated Statements of Operations as the amounts reported in conformity with GAAP, the period-over-period actual percentage change (Actual) and the period-over-period constant currency percentage change (Constant Currency), for the periods indicated:


	Three Months Ended						Quarterly Change						Nine Months Ended						Year-to-Date Change
	January 31,						Fiscal 2016 vs. 2015						January 31,						Fiscal 2016 vs. 2015
(in millions, except percentages)	2016			2015			Actual			Constant Currency			2016			2015			Actual			Constant Currency
Revenues:
Software license fees and subscriptions	$	159.0		$	129.2			23.1	%		27.0	%	$	419.9		$	454.0			(7.5	)%		(3.4	)%
Product updates and support fees		349.2			365.2			(4.4	)		(0.3	)		1,060.1			1,110.9			(4.6	)		0.9

Software revenues		508.2			494.4			2.8			6.8			1,480.0			1,564.9			(5.4	)		(0.3	)
Consulting services and other fees		163.4			163.0			0.2			6.2			495.2			531.3			(6.8	)		0.8

Total revenues		671.6			657.4			2.2			6.7			1,975.2			2,096.2			(5.8	)		0.0

Operating expenses:
Cost of software license fees and subscriptions		45.7			30.9			47.9			52.1			116.5			93.5			24.6			28.8
Cost of product updates and support fees		61.7			67.3			(8.3	)		(3.4	)		186.5			199.6			(6.6	)		(0.4	)
Cost of consulting services and other fees		141.2			136.5			3.4			10.0			420.0			421.5			(0.4	)		8.2
Sales and marketing		109.6			107.7			1.8			5.8			317.5			355.0			(10.6	)		(5.8	)
Research and development		114.5			101.6			12.7			16.2			313.4			307.9			1.8			6.4
General and administrative		52.8			45.5			16.0			22.0			143.7			152.0			(5.5	)		2.2
Amortization of intangible assets and depreciation		65.6			60.1			9.2			12.3			181.0			186.5			(2.9	)		1.2
Restructuring costs		12.2			0.3			NM			NM			20.4			11.6			75.9			84.5
Acquisition-related and other costs		3.4			(1.2	)		NM			NM			15.0			(1.9	)		NM			NM

Total operating expenses		606.7			548.7			10.6			15.4			1,714.0			1,725.7			(0.7	)		5.3

Income from operations		64.9			108.7			(40.3	)		(37.4	)		261.2			370.5			(29.5	)		(25.2	)

Interest expense, net		80.5			86.6			(7.0	)		(7.0	)		231.6			263.3			(12.0	)		(12.0	)
Other (income) expense, net		35.7			(40.8	)		NM			NM			9.3			(74.9	)		NM			NM

Income (loss) before income tax		(51.3	)		62.9			NM			NM			20.3			182.1			(88.9	)		(80.4	)
Income tax provision (benefit)		(5.7	)		11.6			NM			NM			11.2			44.2			(74.7	)		(72.9	)

Net income (loss)		(45.6	)		51.3			NM			NM			9.1			137.9			(93.4	)		(82.8	)
Net loss attributable to noncontrolling interests		(1.4	)		—			NM			NM			(2.4	)		—			NM			NM

Net income (loss) attributable to Infor, Inc.	$	(44.2	)	$	51.3			NM	%		NM	%	$	11.5		$	137.9			(91.7	)%		(81.1	)%

*	NM—Percentage not meaningful

The discussion that follows relating to our results of operations for the comparable three and nine-month periods ended January 31, 2016 and January 31, 2015, should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and related Notes and with the information presented in the above table. This analysis addresses the actual changes in our results of operations for the comparable fiscal periods as presented in accordance with GAAP as well as changes excluding the impact of foreign currency fluctuations, as reflected in the constant currency percentages in the above table and the tables that follow. See Foreign Currency above, for further explanation of the impact on our results of operations.

Revenues


	Three Months Ended				Quarterly Change						Nine Months Ended				Year-to-Date Change
	January 31,				Fiscal 2016 vs. 2015						January 31,				Fiscal 2016 vs. 2015
(in millions, except percentages)	2016		2015		Actual			Constant Currency			2016		2015		Actual			Constant Currency
Revenues:
Software license fees and subscriptions	$	159.0	$	129.2		23.1	%		27.0	%	$	419.9	$	454.0		(7.5	)%		(3.4	)%
Product updates and support fees		349.2		365.2		(4.4	)		(0.3	)		1,060.1		1,110.9		(4.6	)		0.9

Software revenues		508.2		494.4		2.8			6.8			1,480.0		1,564.9		(5.4	)		(0.3	)
Consulting services and other fees		163.4		163.0		0.2			6.2			495.2		531.3		(6.8	)		0.8

Total revenues	$	671.6	$	657.4		2.2	%		6.7	%	$	1,975.2	$	2,096.2		(5.8	)%		0.0	%

Total Revenues. We generate revenues from licensing our software, providing access to our software through SaaS subscriptions, providing product updates and support related to our licensed products and providing consulting services. We utilize written contracts as the means to establish the terms and conditions by which our products, product updates and support and consulting services are sold to our customers. As our product updates and support and consulting services are primarily attributable to our licensed products, growth in our product updates and support and consulting services is generally tied to the level of our license contracting activity.

We recognize revenues pursuant to specific and detailed guidelines applicable to the software industry. License fees revenues from end-users are generally recognized when the software product has been delivered and certain conditions are met. Subscription revenues are recognized over the contract term once the software is made available through our SaaS offerings. Revenues from customer product updates and support contracts are deferred and recognized ratably over the term of the agreements. Revenues from consulting services (including training and implementation services) are recognized as services are provided to customers. See Note 2, Summary of Significant Accounting Policies – Revenue Recognition, in our financial statements related to our fiscal year ended April 30, 2015, as provided in our Form 10-K/T, for a more complete description of our revenue recognition policy.

Total revenues increased 6.7% in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015, excluding the unfavorable foreign currency impact of 4.5%. On a constant currency basis, the increase was primarily due to higher software license fees and subscriptions revenues, which were up 27.0%. Product updates and support fees were relatively flat, down 0.3%, and our consulting services and other fees revenues increased 6.2%. The increase in total revenues also reflects the inclusion of the results of operations of GT Nexus in the current quarter.

For the nine-month period ended January 31, 2016, total revenues were flat compared to the nine-month period ended January 31, 2015, excluding the unfavorable foreign currency impact of 5.8%. On a constant currency basis, our year-to-date product updates and support fees increased 0.9% and our consulting services and other fees revenues increased 0.8%. These increases were offset by a 3.4% decrease in our software license fees and subscriptions revenue primarily due to lower perpetual license revenues, which were down significantly compared to the similar period last year. The decrease in our year-to-date perpetual license revenues within software license fees and subscription revenues was primarily due to the reporting for our change in fiscal year end beginning in the first quarter of fiscal 2015. As a result of changing our fiscal year end to April 30, the first nine months of fiscal 2015 was reported as the nine months ended January 31, 2015, which included May 2014, the last month of our fiscal 2014 as previously reported. Due to our normal quarterly business cycle, we experience a significantly higher level of transaction activity in the last month of a quarter compared to the first month of the quarter as there is a strong push to meet quarter-end quotas and sales compensation targets. As a result, the first nine months of fiscal 2015 included four quarter-end months, May 2014 (the last month of the last quarter of fiscal 2014) and July and October 2014, and January 2015 (the last months of the first, second and third quarters of fiscal 2015). In comparison, the first nine months of fiscal 2016 included the typically lower-volume first month of the quarter, May 2015, and the quarter-end months of July and October 2015, and January 2016. These differences result in difficult year-over-year comparisons for the year-to-date period. Comparing the month of May 2015 to May 2014, on a constant currency basis, total revenues decreased significantly which offset an increase in total revenues over the June 2015 to January 2016 period compared to the similar eight months last year.

Software License Fees and Subscriptions. Our software license fees and subscriptions primarily consist of fees resulting from products licensed to customers on a perpetual basis and subscription revenues related to our SaaS offerings. Product license fees result from a customer’s licensing of a given software product for the first time or with a customer’s licensing of additional users for previously licensed products.

In the third quarter of fiscal 2016, software license fees and subscriptions revenues increased by 27.0% compared to the third quarter of fiscal 2015, excluding the unfavorable foreign currency impact of 3.9%. At constant currency, we reported higher SaaS revenues in the third quarter of fiscal 2016, which contributed an increase of 32.9 points. The increase in SaaS revenues in the current quarter also reflects the inclusion of the results of GT Nexus, acquired in the second quarter of fiscal 2016, with no related amounts in the corresponding prior period. GT Nexus contributed 20.6 points of the increase. The increase in SaaS revenues was across all geographic regions, especially in the Americas, as we continued to see strong demand for our CloudSuite and other subscription offerings. This increase was somewhat offset by lower perpetual license fees revenues, which resulted in a 5.9 point decrease in the third quarter. The decrease in perpetual license fees revenues was experienced across all of our geographic regions, but primarily in our APAC region. We continued to see a shift in our mix of software license business from the sale of perpetual licenses to the sale of SaaS subscriptions, which negatively impacted license fees revenues for the quarter. Revenue from perpetual licensing transactions is generally recorded up-front, while revenue from SaaS transactions is recognized over the term of the subscription contract.

In the nine-month period ended January 31, 2016, license fees and subscriptions revenues decreased by 3.4%, compared to the nine-month period ended January 31, 2015, excluding the unfavorable foreign currency impact of 4.1%. At constant currency, we reported higher year-to-date SaaS revenues for fiscal 2016 which contributed an increase of 18.5 points across all geographic regions, primarily the Americas. This increase was more than offset by lower perpetual license fees revenues, which resulted in a 21.9 point decrease in the first nine months of fiscal 2016. The decrease in perpetual license fees revenues was experienced across all of our geographic regions, primarily the Americas. At constant currency, we believe the year-to-date decrease was primarily the result of reporting for our change in fiscal year end as explained above. Our year-to-date license fees comparison was negatively affected by the change in our fiscal year which drove the focus of our fourth quarter quarterly sales cycle to April 30 in fiscal 2015 compared to May 31 in fiscal 2014. During May 2015, the first month of fiscal 2016, we saw a significant decrease in license transactions and license fees revenues compared to May 2014, the last month of our previously reported fiscal 2014. The decrease related to the difficult May year-over-year comparables. In addition, we continued to see a shift in our software license business from the sale of perpetual licenses to the sale of SaaS subscriptions, which also negatively impacted license fees revenues in the year-to-date period. Revenue from perpetual licensing transactions is generally recorded up-front, while revenue from SaaS transactions is recognized over the term of the subscription contract.

Product Updates and Support Fees. Our product updates and support fees revenues represent the ratable recognition of fees to enroll and renew licensed products in our maintenance programs. These fees are typically charged annually and are based on the license fees initially paid by the customer. Product updates and support revenues can fluctuate based on the number and timing of new license contracts, renewal rates and price increases.

Product updates and support fees were relatively flat, down 0.3%, excluding the unfavorable foreign currency impact of 4.1%, in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015.

Product updates and support fees increased by 0.9%, excluding the unfavorable foreign currency impact of 5.5%, in the nine-month period ended January 31, 2016, compared to the nine-month period ended January 31, 2015.

At constant currency, the year-to-date increase was primarily the result of revenues related to new maintenance pull-through from new license transactions and price increases offsetting customer attrition. The increases in product updates and support fees were across all geographic regions. We continue to experience maintenance retention rates of approximately 93.0%.

Consulting Services and Other Fees. Our consulting services and other fees revenues consist primarily of software-related services, including systems implementation and integration services, consulting, custom modification, hosting services, application managed services and education and training services for customers who have licensed our products. Consulting services and other fees revenues also includes revenues related to hardware systems products and Inforum, our customer event.

Consulting services and other fees increased by 6.2%, excluding the unfavorable foreign currency impact of 6.0%, in the current quarter compared to the third quarter last year. At constant currency, we experienced an increase in consulting services revenues, which accounted for an increase of 3.4 points compared to the third quarter last year, primarily in our Americas and APAC regions with the EMEA region flat quarter-over-quarter. In addition, our other fees revenues increased by 2.9 points.

Consulting services and other fees increased by 0.8%, excluding the unfavorable foreign currency impact of 7.6%, in the nine-month period ended January 31, 2016, compared to the nine-month period ended January 31, 2015. At constant currency, year-to-date consulting services revenues accounted for an increase of 0.4 points compared to the corresponding period last year. We experienced an increase in consulting services revenues in the Americas region which offset decreases in the EMEA and APAC regions. In addition, our other fees revenues increased by 0.4 points.

Deferred Revenue. Certain of our revenues are deferred when all conditions of revenue recognition have not been met. Deferred revenue represents revenue that is to be recognized in future periods when such conditions have been satisfied related to certain license agreements (including SaaS), maintenance contracts and certain consulting arrangements, as discussed above. We had total deferred revenues of $920.0 million at January 31, 2016, compared to $894.1 million at April 30, 2015 and $869.6 million at January 31, 2015.

The following table sets forth the components of deferred revenue as of January 31, 2016, April 30, 2015 and January 31, 2015:


	January 31,		April 30,		January 31,
(in millions)	2016		2015		2015
Software license fees and subscriptions	$	127.7	$	79.5	$	66.1
Product updates and support fees		737.3		754.9		745.5
Consulting services and other fees		55.0		59.7		58.0

Total deferred revenue		920.0		894.1		869.6
Less: current portion		902.3		867.0		851.4

Deferred revenue—non-current	$	17.7	$	27.1	$	18.2

In general, changes in the balance of our deferred revenue are cyclical and primarily driven by the timing of our maintenance services renewal cycles. Our peak renewal activity levels occur in December and May with revenues being recognized ratably over the applicable service periods. We generate substantial recurring product update and support fees revenue from our customer support programs and other software maintenance services. Maintaining our current level of product update and support fees revenue is dependent upon our ability to enroll our customers in our maintenance programs and having our customers renew their maintenance agreements, primarily on an annual basis.

Operating Expenses


	Three Months Ended					Quarterly Change						Nine Months Ended					Year-to-Date Change
	January 31,					Fiscal 2016 vs. 2015						January 31,					Fiscal 2016 vs. 2015
(in millions, except percentages)	2016		2015			Actual			Constant Currency			2016		2015			Actual			Constant Currency
Operating expenses:
Cost of software license fees and subscriptions	$	45.7	$	30.9			47.9	%		52.1	%	$	116.5	$	93.5			24.6	%		28.8	%
Cost of product updates and support fees		61.7		67.3			(8.3	)		(3.4	)		186.5		199.6			(6.6	)		(0.4	)
Cost of consulting services and other fees		141.2		136.5			3.4			10.0			420.0		421.5			(0.4	)		8.2
Sales and marketing		109.6		107.7			1.8			5.8			317.5		355.0			(10.6	)		(5.8	)
Research and development		114.5		101.6			12.7			16.2			313.4		307.9			1.8			6.4
General and administrative		52.8		45.5			16.0			22.0			143.7		152.0			(5.5	)		2.2
Amortization of intangible assets and depreciation		65.6		60.1			9.2			12.3			181.0		186.5			(2.9	)		1.2
Restructuring costs		12.2		0.3			NM			NM			20.4		11.6			75.9			84.5
Acquisition-related and other costs		3.4		(1.2	)		NM			NM			15.0		(1.9	)		NM			NM

Total operating expenses	$	606.7	$	548.7			10.6	%		15.4	%	$	1,714.0	$	1,725.7			(0.7	)%		5.3	%

*	NM—Percentage not meaningful

Cost of Software License Fees and Subscriptions. Cost of software license fees and subscriptions reflects costs related to the sale of our software licenses including royalties to third parties, channel partner commissions and other software delivery expenses, and costs related to our SaaS offerings including salaries, employee benefits, vendor costs associated with providing our subscription offerings, and applicable overhead costs. Our software solutions may include embedded components of third-party vendors for which a fee is paid to the vendor upon the sale of our products. In addition, we resell third-party products in conjunction with the license of our software solutions, which also results in a fee. We also sell our software solutions through our third-party channel relationships which require us to pay applicable commissions to our channel partners. The cost of software license fees and subscriptions is generally higher, as a percentage of revenues, when we sell products of third-party vendors. As a result, software license fees and subscriptions gross margins will vary depending on the proportion of third-party product sales and/or sales through our business partner channel in our revenue mix.

Cost of software license fees and subscriptions increased by 52.1%, excluding the favorable foreign currency impact of 4.2%, in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015. At constant currency, this increase was primarily due to a 54.1 point increase related to higher SaaS costs in-line with our higher subscriptions revenues in the third quarter of fiscal 2016, a 1.0 point increase related to higher channel partner commissions due to the mix of license fees revenues in the current quarter, and 0.7 points related to higher other costs. These increases were somewhat offset by a 3.7 point decrease related to lower third-party royalties.

Cost of license fees and subscriptions for the first nine months of fiscal 2016 increased by 28.8%, excluding the favorable foreign currency impact of 4.2%, compared to the first nine months of fiscal 2015. At constant currency, this increase was primarily due to a 38.5 point increase related to higher SaaS costs in-line with higher subscriptions revenues. This increase was somewhat offset by a 6.1 point decrease related to lower channel partner commissions and a 3.8 point decrease related to lower third-party royalties, in-line with the lower year-to-date license fees revenues.

Cost of Product Updates and Support Fees. Cost of product updates and support fees includes salaries, employee benefits, related travel, third-party maintenance costs associated with embedded and non-embedded third-party products, related channel partner commissions, and the overhead costs of providing our customers product updates and support.

Cost of product updates and support fees decreased by 3.4%, excluding the favorable foreign currency impact of 4.9%, in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015. At constant currency, the decrease was primarily due to a 1.8 point decrease in employee-related support costs and a 1.1 point decrease in overhead allocations due to lower headcount in our customer support organization in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015, as well as a 1.8 point decrease related to lower third-party royalties. These decreases were somewhat offset by a 1.1 point increase related to higher professional fees and 0.3 point increase related to higher channel partner commissions.

For the first nine months of fiscal 2016, cost of product updates and support fees decreased by 0.4%, excluding the favorable foreign currency impact of 6.2%, compared to the corresponding prior period. At constant currency, the year-to-date decrease was primarily due to a 5.2 point decrease in employee-related support costs and overhead allocations in-line with lower headcount and a 1.2 point decrease due to lower channel partner commissions. These decreases were somewhat offset by a 3.1 point increase related to higher professional fees and a 3.0 point increase related to higher third-party royalties.

Cost of Consulting Services and Other Fees. Cost of consulting services and other fees includes salaries, employee benefits, third-party consulting costs, related travel and the overhead costs of providing our customers systems implementation and integration services, consulting, custom modification, hosting services, application managed services and education and training services. Cost of consulting services and other fees also includes costs associated with our hardware business.

Cost of consulting services and other fees increased by 10.0%, excluding the favorable foreign currency impact of 6.6%, in the current quarter compared to the corresponding prior period. At constant currency, cost of consulting services increased 7.5 points due to higher employee-related costs and overhead allocations due to higher headcount in our professional services organizations and 2.5 points related to an increase in other costs.

For the first nine months of fiscal 2016, cost of consulting services and other fees increased by 8.2%, excluding the favorable foreign currency impact of 8.6%, compared to the corresponding prior period. At constant currency, the year-to-date increase was primarily due to a 5.9 point increase in employee-related costs and overhead allocations in-line with higher headcount, a 1.5 point increase due to higher billable contractor costs and a 0.8 point increase related to other costs.

Sales and Marketing. Sales and marketing expenses consist primarily of salaries, commissions, employee benefits, travel, trade show activities, advertising and branding costs, overhead costs related to our sales and marketing personnel, and the costs of Inforum, our customer event.

Sales and marketing expenses increased by 5.8%, excluding the favorable foreign currency impact of 4.0%, in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015. On a constant currency basis, the increase in sales and marketing expenses was primarily due to an increase of 5.6 points due to higher employee-related sales costs and related overhead allocations due to higher headcount in our sales organization in the current quarter compared to last year, as well as a 0.2 point increase in other sales and marketing costs.

Sales and marketing expenses decreased by 5.8%, excluding the favorable foreign currency impact of 4.8%, in the nine-month period ended January 31, 2016, compared to the nine-month period ended January 31, 2015. On a constant currency basis, the year-to-date decrease in sales and marketing expenses was primarily due to a decrease of 3.9 points due to lower employee-related sales costs and related overhead allocations, with lower commission costs in-line with lower licensing activity year-over-year, a decrease in employee travel costs, as well as a decrease in equity-based compensation which more than offset an increase in salaries and benefits related to higher headcount. In addition, sales and marketing expenses decreased 1.7 points due to lower marketing program costs and 0.2 points due to lower professional fees and other sales costs.

Research and Development. Research and development expenses consist primarily of personnel-related expenditures.

Research and development expenses increased by 16.2%, excluding the favorable foreign currency impact of 3.5%, in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015. On a constant currency basis, research and development expenses increased 10.8 points as a result of higher employee-related costs and related overhead allocations due to higher headcount in our development organization, 9.3 points related to higher share-based compensation, and 4.0 points related to higher professional fees in the third quarter of fiscal 2016 compared to the third quarter last year. These increases were somewhat offset by a 7.3 point decrease related to higher capitalization of software development costs in the current quarter as compared to the third quarter last year and 0.6 points related to a decrease in other development costs.

Research and development expenses increased 6.4%, excluding the favorable foreign currency impact of 4.6%, in the nine-month period ended January 31, 2016, compared to the nine-month period ended January 31, 2015. On a constant currency basis, research and development expenses increased 5.8 points related to higher professional fees, 3.6 points as a result of higher employee-related costs and overhead allocations, 2.4 points related to higher share-based compensation, and 0.2 points related to an increase in other development costs. These increases were somewhat offset by a 5.6 point decrease related to higher capitalization of software development costs year-to-date as compared to the corresponding period last year.

General and Administrative. General and administrative expenses consist primarily of personnel-related expenditures for information technology, finance, legal and human resources support functions.

General and administrative expenses increased by 22.0%, excluding the favorable foreign currency impact of 6.0%, in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015. On a constant currency basis, general and administrative expenses increased approximately 9.7 points related to higher consulting and professional fees, 4.1 points due to an increase in employee-related costs, 3.7 points related to overhead allocations, 3.5 points due to higher share-based compensation in the quarter, and a net increase of 2.7 points in other general and administrative expenses. These increases were partially offset by 1.7 points due to lower legal settlement costs in the quarter compared to last year.

General and administrative expenses increased by 2.2%, excluding the favorable foreign currency impact of 7.7%, in the nine-month period ended January 31, 2016, compared to the nine-month period ended January 31, 2015. On a constant currency basis, year-to-date general and administrative expenses increased approximately 3.9 points due to higher employee-related costs, 3.2 points related to overhead allocations and 2.5 points related to higher consulting and professional fees. These increases were partially offset by a decrease of 5.6 points due to lower legal settlement costs incurred in the first nine months of fiscal 2016 compared to the corresponding period last year, 1.6 points due to lower year-to-date share-based compensation, and a net decrease of 0.2 points in other general and administrative expenses.

Amortization of Intangible Assets and Depreciation. Amortization of intangibles assets primarily relates to the on-going amortization of intangible assets acquired in acquisitions. Depreciation expense relates primarily to our computer equipment and purchased software, furniture and fixtures as well as amortization of leasehold improvements.

Amortization of intangible assets and depreciation increased by 12.3%, excluding the favorable foreign currency impact of 3.1%, in the third quarter of fiscal 2016 compared with the third quarter of fiscal 2015.

In the nine-month period ended January 31, 2016, amortization of intangible assets and depreciation increased by 1.2%, compared with the nine-month period ended January 31, 2015, excluding the favorable foreign currency impact of 4.1%.

The quarter-over-quarter and year-to-date increases resulted primarily from higher depreciation of fixed assets and amortization expense related to intangible assets recorded as part of our recent acquisitions. These increases were somewhat offset by lower amortization related to certain of our assets being fully amortized or depreciated in fiscal 2015 with no corresponding expense recorded in fiscal 2016.

Restructuring. We have recorded restructuring charges related to our acquisitions and on occasion to eliminate redundancies, improve our operational efficiency and reduce our operating costs. These cost reduction measures included workforce reductions relating to restructuring our workforce, the exiting of certain leased facilities and the consolidation of space in certain other facilities. These restructuring charges include employee severance costs and costs related to the reduction of office space. See Note 10, Restructuring Charges.

We recorded restructuring charges of approximately $12.2 million and $0.3 million in the third quarter of fiscal 2016 and in the third quarter of fiscal 2015, respectively, related to our various restructuring actions.

We incurred restructuring charges of $20.4 million in the nine-month period ended January 31, 2016, compared to $11.6 million in the nine-month period ended January 31, 2015.

The restructuring charges recorded to date in fiscal 2016 included approximately $12.1 million related to employee severance costs and $8.3 million in accruals for costs related to facilities to be exited. The employee severance costs relate to personnel actions across all functions primarily in the Americas and EMEA regions. The facilities charges relate to exiting or consolidation of space in facilities primarily in the Americas region.

The restructuring charges recorded in fiscal 2015 were related to employee severance costs primarily for personnel in our Americas and EMEA sales function, our professional services function in EMEA and product development functions.

Acquisition-Related and Other Costs. Acquisition-related and other costs include transaction and integration costs related to our acquisitions, primarily professional services fees and certain employee costs related to transitional and certain other employees. Acquisition-related and other costs also include certain costs incurred in financing our acquisitions, reorganizing our operations and other debt financing activities.

In the third quarter of fiscal 2016, we recorded acquisition-related and other costs of $3.4 million, an increase of approximately $4.6 million compared to a $1.2 million net credit in the third quarter of fiscal 2015.

For the nine months ended January 31, 2016, acquisition-related and other costs totaled $15.0 million, a change of approximately $16.9 million compared to a $1.9 million net credit in the comparable nine months of fiscal 2015.

For the three and nine months ended January 31, 2016, acquisition-related and other costs were primarily for the GT Nexus Acquisition in September 2015, costs of the Registration Statement on Form S-4 that we filed with the SEC (Form S-4) related to the Exchange Offer (as defined below), costs related to our investment in LogicBlox-Predictix Holdings, Inc. (Predictix), as well as an adjustment to the estimated fair value of our contingent consideration liability related to previous acquisitions. For the three and nine months ended January 31, 2015, acquisition-related and other costs net credit related primarily to adjustments to the estimated fair value of our contingent consideration liabilities which were somewhat offset by costs related to acquisitions.

Non-Operating Income and Expenses


	Three Months Ended					Quarterly Change						Nine Months Ended					Year-to-Date Change
	January 31,					Fiscal 2016 vs. 2015						January 31,					Fiscal 2016 vs. 2015
(in millions, except percentages)	2016		2015			Actual			Constant Currency			2016		2015			Actual			Constant Currency
Interest expense, net	$	80.5	$	86.6			(7.0	)%		(7.0	)%	$	231.6	$	263.3			(12.0	)%		(12.0	)%
Other (income) expense, net		35.7		(40.8	)		NM			NM			9.3		(74.9	)		NM			NM

Total non-operating expenses	$	116.2	$	45.8			153.7	%		157.2	%	$	240.9	$	188.4			27.9	%		28.2	%

*	NM—Percentage not meaningful

Interest Expense, Net. Interest expense, net consists of the interest expense related to our debt less the interest income on cash and marketable securities.

Interest expense, net decreased by $6.1 million, or 7.0%, to $80.5 million in the quarter ended January 31, 2016, compared to $86.6 million in the quarter ended January 31, 2015. The quarter-over-quarter decrease in our interest expense was primarily due to the refinancing of our Senior Notes in the fourth quarter of fiscal 2015 at more favorable interest rates somewhat offset by interest on our Senior Secured Notes issued in the second quarter of fiscal 2016. See Liquidity and Capital Resources – Long-Term Debt, below. As a result of these refinancing transactions, our interest expense decreased by approximately $8.7 million and amortization of deferred financing fees and net debt discounts decreased $0.3 million in the third quarter of fiscal 2016 compared to the third quarter last year. These decreases were somewhat offset by $2.9 million of additional interest related to our interest rate swaps.

Interest expense, net decreased by $31.7 million, or 12.0% to $231.6 million in the nine-month period ended January 31, 2016, compared to $263.3 million in the nine-month period ended January 31, 2015. Year-to-date, the decrease was primarily due to our refinancing transactions which resulted in a $38.3 million decrease in our interest expense and a $2.0 million decrease in the amortization of deferred financing fees and net debt discounts, which were somewhat offset by a $8.9 million increase in interest related to our interest rate swaps.

Other (Income) Expense, Net. Other (income) expense, net consists of the effects of foreign currency fluctuations, gain/loss on the sale of fixed assets, and other costs.

Other (income) expense, net was net expense of $35.7 million in the quarter ended January 31, 2016, compared to $40.8 million net income in the quarter ended January 31, 2015. The change in other (income) expense, net was primarily due to fluctuations in foreign currency exchange rates.

For the first nine months of fiscal 2016, other (income) expense, net was net expense of $9.3 million compared to net income of $74.9 million in the nine-month period ended January 31, 2015. This change in other (income) expense, net was primarily due to fluctuations in foreign currency exchange rates.

Income Tax Provision


	Three Months Ended						Quarterly Change						Nine Months Ended						Year-to-Date Change
	January 31,						Fiscal 2016 vs. 2015						January 31,						Fiscal 2016 vs. 2015
(in millions, except percentages)	2016			2015			Actual			Constant Currency			2016			2015			Actual			Constant Currency
Income tax provision (benefit)	$	(5.7	)	$	11.6			NM	%		NM	%	$	11.2		$	44.2			(74.7	)%		(72.9	)%
Effective income tax rate		11.1	%		18.4	%								55.2	%		24.3	%

The effective tax rate for the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. Our effective tax rate may fluctuate as a result of changes in the forecasted annual income level and geographical mix of our operating earnings as well as a result of acquisitions, changes in liabilities recorded for unrecognized tax benefits, changes in the valuation allowances for deferred tax assets, tax settlements with U.S. and foreign tax authorities, and the impact from changes in enacted tax laws.

Our provision for income taxes differs from the tax computed at the U.S. federal statutory rate primarily due to certain earnings considered as indefinitely reinvested in foreign operations, state taxes, and foreign earnings taxed at lower income tax rates than in the U.S.

During fiscal 2015, we continued to examine various tax structuring alternatives that may be executed during fiscal year 2016, which would provide additional positive evidence in our valuation allowance considerations that may result in further foreign valuation releases, specifically in the Netherlands. In the Netherlands, the Company continues to remain in a 3-year cumulative loss position as of January 31, 2016 for certain subsidiaries, which constitutes significant negative evidence in our valuation allowance considerations. Based on projected future earnings, the 3-year cumulative income/loss analysis and the evaluation of certain tax planning strategies that would utilize available net operating losses prior to expiration, it is reasonably possible that sufficient positive evidence will exist during the next twelve months to release all or a significant portion of our valuation allowance on the Company’s Netherlands deferred tax assets.

Non-GAAP Financial Measure Reconciliations

Our results of operations in this Management’s Discussion and Analysis are presented in accordance with GAAP. In addition to reporting our financial results in accordance with GAAP, we present our non-GAAP revenues as well. We believe our presentation of non-GAAP revenues provides meaningful insight into our operating performance and an alternative perspective of our results of operations. We use these non-GAAP measures to assess our operating performance, to develop budgets, and to serve as a measurement for incentive compensation awards. Presentation of these non-GAAP measures allows users to review our results of operations from the same perspective as management and our Board of Directors. These non-GAAP financial measures provide users an enhanced understanding of our operations, facilitate analysis and comparisons of our current and past results of operations, facilitate comparisons of our operating results with those of our competitors and provide insight into the prospects of our future performance. We also believe that the non-GAAP measures are useful to users because they provide supplemental information that research analysts frequently use to analyze software companies including those that have recently made significant acquisitions. Additionally, certain non-GAAP disclosures are required by our lenders in our reporting to them.

The method we use to produce non-GAAP results is not in accordance with GAAP and may differ from the methods used by other companies. These non-GAAP results should not be regarded as a substitute for corresponding GAAP measures, but instead should be utilized as a supplemental measure of operating performance in evaluating our business. Non-GAAP measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. As such, these non-GAAP measures should be viewed in conjunction with both our financial statements prepared in accordance with GAAP and the reconciliation of the supplemental non-GAAP financial measures to the comparable GAAP results provided for each period presented below.

Non-GAAP Revenues


	Three Months Ended January 31,				Quarterly Change Fiscal 2016 vs. 2015						Nine Months Ended January 31,				Year-to-Date Change Fiscal 2016 vs. 2015
(in millions, except percentages)	2016		2015		Actual			Constant Currency			2016		2015		Actual			Constant Currency
GAAP revenues	$	671.6	$	657.4		2.2	%		6.7	%	$	1,975.2	$	2,096.2		(5.8	)%		0.0	%
Non-GAAP revenue adjustments:
Purchase accounting impact on software license fees and subscriptions		5.9		0.1								10.2		0.9
Purchase accounting impact on product updates and support fees		—		1.4								0.5		2.8
Purchase accounting impact on consulting services and other fees		0.1		0.1								0.1		0.4

Total non-GAAP revenue adjustments		6.0		1.6								10.8		4.1

Non-GAAP revenues	$	677.6	$	659.0		2.8	%		7.3	%	$	1,986.0	$	2,100.3		(5.4	)%		0.3	%

The non-GAAP adjustments we make to our reported GAAP revenues are primarily related to purchase accounting and other acquisition matters. These amounts reflect adjustments to increase software license fees and subscriptions, product updates and support fees, and consulting services and other fees that we would have recognized if we had not adjusted acquired deferred revenues to their fair values as required by GAAP. Certain deferred revenue for software license fees and subscriptions, product updates and support fees, and consulting services and other fees on the acquired entity’s balance sheet, at the time of the acquisition, were eliminated from our GAAP results as part of the purchase accounting for the acquisition as they do not reflect the fair value of performance obligations to us. As a result, our GAAP results do not, in management’s view, reflect all of our software license fees and subscriptions, product updates and support fees, and consulting services and other fees. We believe the inclusion of the acquisition related revenue adjustments provides users a helpful alternative view of our operations.

Liquidity and Capital Resources


(in millions, except percentages)	Nine Months Ended January 31,
Cash Flows	2016			2015			Change
Cash provided by (used in):
Operating activities		$ 221.5			$ 261.7			(15.4	)%
Investing activities		(627.2	)		(40.9	)		NM
Financing activities		412.7			(133.7	)		NM
Effect of exchange rate changes on cash and cash equivalents		(11.8	)		(48.4	)		(75.6	)

Net change in cash and cash equivalents		$ (4.8)			$ 38.7			(112.4	)%

*	NM—Percentage not meaningful


(in millions, except percentages) Capital Resources	January 31, 2016			April 30, 2015			Change
Working capital deficit	$	(207.1	)	$	(226.4	)		(8.5	)%
Cash and cash equivalents	$	521.9		$	526.7			(0.9	)%

Our most significant source of operating cash flows is cash collections from our customers following the purchase and renewal of their subscriptions for licensed software updates (maintenance) and product support agreements. Payments from customers for these maintenance and support agreements are generally received near the beginning of the contracts’ terms, which are generally one year in length. We also generate significant cash from new software license sales, SaaS subscription arrangements and, to a lesser extent, consulting and other services. Our primary uses of cash from operating activities are for personnel-related expenditures. We also make significant cash payments related to interest payments, taxes and leased facilities. We are highly leveraged and our liquidity requirements are significant, primarily due to debt service requirements.

As part of our business strategy, we may use cash to acquire additional companies or products from time to time to enhance our product lines, which could have a material effect on our capital resources.

In the first nine months of fiscal 2016, we completed the GT Nexus Acquisition for $550.3 million, net of cash acquired. In the comparable nine months last year, we completed one acquisition for a purchase price of $30.1 million, net of cash acquired. See Note 3, Acquisitions.

As of each of our reported balance sheet dates, we have reported a deficit in working capital. This deficit in working capital represents an excess of our current liabilities over our current assets and is primarily the result of the significant balance of deferred revenue, reported as a current liability, at each balance sheet date. Our deferred revenues represent the excess of our collections from, or our billings due from, our customers for which the related revenues have not yet met all the criteria necessary to be recognized as earned in our Condensed Consolidated Statements of Operations. See Note 2, Summary of Significant Accounting Policies – Revenue Recognition, in our Form 10-K/T, for a further description of those criteria.

We believe that cash flows from operations, together with our cash and cash equivalents, borrowing capacity under our revolving credit facility, will be sufficient to meet our cash requirements for working capital, capital expenditures, restructuring activities and investments for the remainder of fiscal 2016 and for the foreseeable future. At some point in the future, we may require additional funds for either operating or strategic purposes and may seek to raise the additional funds through public or private debt or equity financing. If we ever need to seek additional financing, there is no assurance that this additional financing will be available, or if available, will be on reasonable terms. If our liquidity and capital resources are insufficient to meet our requirements or fund our debt service obligations, we could face substantial liquidity problems, may not be able to generate sufficient cash to service all our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Cash Flows from Operating Activities

Net cash provided by operating activities for the nine-month period ended January 31, 2016, was $221.5 million. Our net income adjusted for non-cash items provided $239.8 million in cash due to strong cash flows from operations, and changes in operating assets and liabilities used cash of $18.3 million. The uses of cash were from a $41.0 million increase in prepaid expenses and other assets, primarily due to the timing of certain of our significant service agreements, an $18.7 million increase in income tax receivable/payable, net, and a $16.4 million increase in accounts receivable, net partially due to the timing of our maintenance cycle in EMEA as a significant portion of the support invoicing is completed on a calendar year basis. These uses of cash were partially offset by a $30.3 million increase in accounts payable, accrued expenses and other liabilities partially due to the timing of vendor payments and a $27.5 million increase in deferred revenues primarily due to the timing of maintenance renewals, as a significant portion of our EMEA maintenance renews on December 31.

Net cash provided by operating activities for the nine-month period ended January 31, 2015, was $261.7 million. Our net income plus non-cash items provided $272.1 million in cash due to strong cash flows from operations, while changes in operating assets and liabilities used cash of $10.4 million. These uses of cash were primarily from a $61.8 million increase in accounts receivable, net, and a $15.9 million increase in prepaid expenses and other assets which were somewhat offset by $28.4 million related to our income tax receivable/payable, net and a $30.9 million increase in accounts payable, accrued expenses and other liabilities.

Cash Flows from Investing Activities

Net cash used in investing activities was $627.2 million in the nine-month period ended January 31, 2016. The primary uses of cash were $549.6 million net cash used for our acquisition of GT Nexus, $49.4 million used to purchase property, equipment and software, and $25.0 million for our investment in Predictix.

Net cash used in investing activities was $40.9 million in the nine-month period ended January 31, 2015. The primary uses of cash were $30.1 million net cash used for our acquisition of Saleslogix and $28.8 million used to purchase property, equipment and software. These uses of cash were partially offset by an $18.0 million decrease in restricted cash.

Cash Flows from Financing Activities

Net cash provided by financing activities was $412.7 million in the nine-month period ended January 31, 2016. The source of cash was $495.0 proceeds from the issuance of debt in connection with the GT Nexus Acquisition. This was partially offset by uses of cash, primarily $35.0 million in dividend payments, $25.6 million in debt repayments, and $16.5 million in deferred financing fees related to the issuance of our Senior Secured Notes.

Net cash used in financing activities was $133.7 million in the nine-month period ended January 31, 2015. The primary uses of cash were $80.2 million in debt repayments and $42.7 million in dividend payments.

Effect of Exchange Rate Changes

For the nine months ended January 31, 2016, changes in foreign currency exchange rates resulted in an $11.8 million decrease in our cash and cash equivalents. Exchange rate changes decreased our cash and cash equivalents by $48.4 million during the nine months ended January 31, 2015.

Working Capital Deficit

Our working capital deficit, defined as current assets less current liabilities, was $207.1 million at January 31, 2016, compared to $226.4 million at April 30, 2015. At January 31, 2016, our cash decreased by $4.8 million compared to the balance at April 30, 2015. Generally, increases in current assets are considered to be uses of cash and increases in current liabilities are considered to be sources of cash. During the first nine months of our fiscal 2016, the most significant changes in our current assets were a $34.7 million increase in prepaid expenses and an increase in our accounts receivable, net, of $33.7 million. During this period, the most significant change in our current liabilities was an increase in deferred revenue of $35.3 million, as a significant portion of our EMEA maintenance renews on December 31.

Cash and Cash Equivalents

As of January 31, 2016, we had $521.9 million in cash and cash equivalents including amounts in operating accounts, money market investments and other short-term, highly liquid investments with initial maturities of three months or less. As of January 31, 2016, $70.5 million of our unrestricted cash and cash equivalents are held in the U.S. The remaining $451.4 million of our unrestricted cash and cash equivalents are held in foreign countries. Under current tax laws and regulations, if cash and cash equivalents and short-term investments held outside the U.S. are distributed to the U.S. in the form of dividends or otherwise, we may be subject to additional U.S. income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. It is not practicable to estimate the amount of these potential additional taxes due to the complexities of the tax laws in various jurisdictions, the number of jurisdictions in which we operate, the complexity of our legal entity structure, and the hypothetical nature of the calculations.

Long-Term Debt

The following table summarizes our long-term debt balances for the periods indicated:


	January 31, 2016									April 30, 2015
(in millions)	Principal Amount			Net Amount⁽¹⁾			Contractual Rate			Principal Amount			Net Amount ⁽¹⁾			Contractual Rate
First lien Term B-3 due June 3, 2020	$	463.0		$	459.1			3.750	%	$	466.7		$	462.2			3.750	%
First lien Term B-5 due June 3, 2020		2,453.9			2,375.4			3.750	%		2,473.0			2,382.0			3.750	%
First lien Euro Term B due June 3, 2020		366.1			361.6			4.000	%		382.3			377.0			4.000	%
6.5% senior notes due May 15, 2022		1,630.0			1,619.3			6.500	%		1,630.0			1,618.4			6.500	%
5.75% senior notes due May 15, 2022		379.2			373.9			5.750	%		393.0			387.2			5.750	%
5.75% senior secured notes due August 15, 2020		500.0			480.2			5.750	%
Deferred financing fees, debt discounts and premiums, net		(122.7	)		—						(118.2	)		—

Total long-term debt		5,669.5			5,669.5						5,226.8			5,226.8
Less: current portion		(0.1	)		(0.1	)					(0.1	)		(0.1	)

Total long-term debt—non-current	$	5,669.4		$	5,669.4					$	5,226.7		$	5,226.7

(1)	Debt balances net of applicable unamortized debt discounts, premiums and deferred financing fees.

As of January 31, 2016, we were in compliance with all applicable covenants included in the terms of our credit facilities and the indentures that governs our Senior Notes.

Credit Facilities

Revolver

Term Loans

Senior Notes

Senior Notes Exchange Offer

On January 25, 2016, we filed a Registration Statement on Form S-4 with the SEC, relating to an offer to exchange our Senior Notes (the Exchange Offer) and the related guarantees for the notes that will be registered with the SEC. The Exchange Offer commenced on February 12, 2016, subsequent to the end of the third quarter of fiscal 2016. Under the terms of the Exchange Offer, holders of our Senior Notes can exchange their original 6.500% and 5.750% Senior Notes (the Original Notes) for a like principal amount of 6.500% and 5.750% Senior Notes (the Exchange Notes) that will be registered with the SEC. The terms of the Exchange Notes are substantially identical to those of the Original Notes, except that the transfer restrictions, registration rights and certain additional interest provisions relating to the Original Notes will not apply to the Exchange Notes. The Exchange Offer expires on March 15, 2016, unless extended in our sole discretion. We will not receive any proceeds from the Exchange Offer.

First Lien Senior Secured Notes

Unrestricted Subsidiary

As of January 31, 2016, we have designated Infor Retail Holdings, Inc. (Infor Retail Holdings) as an “Unrestricted Subsidiary” as defined under the provisions of our Credit Agreement and the indentures governing our Senior Notes and Senior Secured Notes. The financial position and results of operations of Infor Retail Holdings are included in our Condensed Consolidated Financial Statements. As required by our Credit Agreement and the indentures governing our Senior Notes and Senior Secured Notes, we are to present information sufficient to ascertain our financial condition and results of operations excluding our Unrestricted Subsidiaries.

Accordingly, as of January 31, 2016, the financial position of Infor Retail Holdings reflects our $25.0 million investment in Predictix, acquired in the third quarter of fiscal 2016, with an offsetting credit in equity. See Note 1, Nature of Business and Basis of Presentation – Cost Method Investments. This investment is included in other assets on our Condensed Consolidated Balance Sheets. In addition, Infor Retail Holdings did not have any results of operations to report for the three and nine months ended January 31, 2016, and our Condensed Consolidated Statements of Operations are not impacted by the Unrestricted Subsidiary for any of the periods presented.

Restricted Cash

We had approximately $11.8 million of restricted cash as of January 31, 2016, of which approximately $1.0 million and $10.8 million have been reflected in other current assets and other assets on our Condensed Consolidated Balance Sheets, respectively.

We had approximately $8.1 million of restricted cash as of April 30, 2015, of which approximately $0.2 million and $7.9 million have been reflected in other current assets and other assets on our Condensed Consolidated Balance Sheets, respectively.

These balances related primarily to various collateral arrangements related to our property leases worldwide.

Disclosures about Contractual Obligations and Commercial Commitments

As disclosed in our Form 10-K/T, our total contractual obligations at April 30, 2015, were $7,331.4 million, not including an estimated liability for uncertain tax positions as we are unable to reasonably estimate when these amounts will ultimately be settled. There were no material additions or changes to our contractual obligations outside the ordinary course of business during the three months ended January 31, 2016, other than the issuance of our Senior Secured Notes on August 25, 2015. See Note 11, Debt – First Lien Senior Secured Notes. At January 31, 2016, we had recorded a liability for uncertain tax positions of $142.3 million. Over the next 12 months, we expect a net reduction of approximately $20.1 million of unrecognized tax benefits, primarily due to the expiration of the statutory limitation periods in the various jurisdictions. See Note 12, Income Taxes.

Off-Balance-Sheet Arrangements

We do not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Foreign Currency

A significant portion of our business is conducted in currencies other than the U.S. Dollar, the currency in which our financial statements are stated. Significant changes in these currencies, especially the Euro and British Pound, relative to the U.S. Dollar could materially impact our revenue, operating results and financial position. We currently do not pursue hedging strategies to mitigate foreign currency exposure.

Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies, for information regarding recently issued accounting pronouncements that may impact our financial statements.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency

A significant portion of our business is conducted in currencies other than the U.S. Dollar, the currency in which our financial statements are stated. Accordingly, we face exposure to adverse movements in foreign currency exchange rates relative to the U.S. Dollar which could materially impact our revenue, operating results and financial position. Our international operations are, for the most part, naturally hedged against exchange rate fluctuations since the majority of revenues and expenses of each foreign affiliate are denominated in the same currency. Therefore, we do not engage in formal hedging activities related to foreign currency exchange rates, but we do periodically review the potential impact of this risk to ensure that the risks of significant potential losses remain minimal. Certain transaction gains and losses are generated from intercompany balances that are not considered to be long-term in nature that will be settled between subsidiaries. We also recognize transaction gains and losses from revaluing debt denominated in Euros and held by subsidiaries whose functional currency is the U.S. Dollar.

Our international revenues and expenses are denominated in foreign currencies, principally the Euro and British Pound. The functional currency of each of our foreign subsidiaries is the local currency. International revenues represented 41.7% and 46.6% of our total revenues for the third quarter of fiscal 2016 and 2015, respectively. International cost of revenues and operating expenses accounted for 40.2% and 46.6% of our total cost of revenues and operating expenses for the third quarter of fiscal 2016 and 2015, respectively. For the first nine months of fiscal 2016 and 2015, international revenues represented 42.5% and 47.6% of our total revenues, respectively. International cost of revenues and operating expenses accounted for 42.1% and 47.2% of our total cost of revenues and operating expenses for the first nine months of fiscal 2016 and 2015, respectively.

As of January 31, 2016 and April 30, 2015, a 10% adverse change in foreign exchange rates versus the U.S. Dollar would have decreased our aggregate reported cash and cash equivalents by approximately 3.9% and 3.4%, respectively. A 10% adverse change in the Euro exchange rate versus the U.S. Dollar would have decreased our aggregate reported cash and cash equivalents by approximately 1.5% and 1.1% as of January 31, 2016 and April 30, 2015, respectively. A 10% adverse change in the British Pound exchange rate versus the U.S. Dollar would have decreased our aggregate reported cash and cash equivalents by approximately 0.5% and 0.6% as of January 31, 2016 and April 30, 2015, respectively.

Interest Rates

We face exposure to changes in interest rates primarily relating to our long-term debt. As of January 31, 2016 and April 30, 2015, we had $5.7 billion and $5.2 billion, respectively, outstanding under our debt agreements. Pursuant to the terms of certain of the debt agreements we have in place at January 31, 2016, interest expense is calculated using the LIBOR or the EURIBOR rates, depending on the debt agreement. In addition, certain of our debt agreements have LIBOR or EURIBOR floors of 1.00% or 2.00%. On January 31, 2016, the three-month LIBOR and EURIBOR rates were 0.61% and -0.16%, respectively. Accordingly, we used the LIBOR/EURIBOR floors, as applicable. An increase in applicable interest rates of 50 basis points over the January 31, 2016, rates would not increase our total monthly interest expense as the LIBOR and EURIBOR floors related to our debt would not be impacted by such a change.

As part of our strategy to limit exposure to interest rate risk, primarily future variability in the three-month LIBOR, we have entered into interest rate swap agreements with notional amounts totaling $945.0 million or approximately 28.8% of our variable rate debt. We entered into the interest rate swaps for hedging purposes only to convert a portion of the interest payments on our variable rate debt to fixed rate payments, not for trading or speculation. We have designated these instruments as cash flow hedges and accounted for them accordingly. For further discussion of these derivative instruments see Note 5, Fair Value, Note 13, Comprehensive Income (Loss) and Note 15, Derivative Financial Instruments.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have established and maintained disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. As required by Rule 13a-15(b) under the Exchange Act, we conducted an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of January 31, 2016.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation and may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended January 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

See Note 14, Commitments and Contingencies — Litigation, for information regarding certain legal proceedings in which we are involved.

ITEM 1A.

RISK FACTORS

A detailed discussion of our risk factors can be found in our Form 10-K/T, in Part I, Item 1A, Risk Factors. There have been no material changes to our risk factors since the filing of our Form 10-K/T. These risk factors could materially harm our business, operating results and financial condition. Additional factors and uncertainties not currently known to us or that we currently consider immaterial could also harm our business, operating results and financial condition.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Not applicable

(b) Not applicable

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

None

ITEM 6.

EXHIBITS

See Index to Exhibits on page 65 of this report

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 4, 2016

Exhibit Index


Exhibit Number		Description of Documents

10.1†		Second Amended and Restated Employment Agreement, dated January 16, 2016, between Infor (US), Inc., a Delaware corporation, and C. James Schaper.

31.1		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act – Charles E. Phillips, Jr.

31.2		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act – Jeffrey M. Laborde

32.1		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act – Charles E. Phillips, Jr.

32.2		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act – Jeffrey M. Laborde

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

†	Previously filed.

Interactive Data Files pursuant to Rule 405 of Regulation S-T. The following unaudited financial statements from Infor, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended January 31, 2016, formatted in eXtensible Business Reporting Language (XBRL)—furnished not filed herewith:

Condensed Consolidated Balance Sheets at January 31, 2016 and April 30, 2015,

ii.

Condensed Consolidated Statements of Operations for the three and nine months ended January 31, 2016 and 2015,

iii.

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended January 31, 2016 and 2015,

iv.

Condensed Consolidated Statements of Cash Flows for the nine months ended January 31, 2016 and 2015, and

Notes to Condensed Consolidated Financial Statements.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company