UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED JULY 31, 2017

OR

☐ 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

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  ☒

Note: The registrant is a voluntary filer and is not subject to the filing requirements. However, 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.

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  ☒    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):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

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

The number of shares of our common stock outstanding on September 5, 2017, was 1,000, par value $0.01 per share.

INFOR, INC.

Form  10-Q

Index

PART I.	FINANCIAL INFORMATION	4
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets at July 31, 2017 and April 30, 2017	4
	Condensed Consolidated Statements of Operations for the three months ended July 31, 2017 and 2016	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended July 31, 2017 and 2016	6
	Condensed Consolidated Statements of Cash Flows for the three months ended July 31, 2017 and 2016	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	59
Item 4.	Controls and Procedures	60
PART II.	OTHER INFORMATION	61
Item 1.	Legal Proceedings	61
Item 1A.	Risk Factors	61
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	61
	Signatures	62

2

Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q for the quarter ended July 31, 2017 (this Quarterly Report on Form 10-Q), 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 (the SEC), including our Annual Report on Form 10-K for our fiscal year ended April 30, 2017, filed with the SEC on June 26, 2017 (our Annual Report on Form 10-K).

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 on Form 10-Q 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 Annual Report on Form 10-K and in other documents that we file from time to time with the SEC including our Quarterly Reports on Form 10-Q.

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 “About-Investors” 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. The information posted on our website, blog or social media is not incorporated into this Quarterly Report on Form 10-Q.

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.

3

PART I. FINANCIAL INFORMATION 

ITEM 1. FINANCIAL STATEMENTS

INFOR, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts which are actuals)

(unaudited)

	July 31,			April 30,
	2017			2017
ASSETS
Current assets:
Cash and cash equivalents	$	277.9		$	305.8
Accounts receivable, net		413.6			446.6
Prepaid expenses		169.3			161.1
Income tax receivable		22.3			24.9
Other current assets		24.1			26.5
Deferred tax assets		—			36.3
Total current assets		907.2			1,001.2
Property and equipment, net		174.5			161.5
Intangible assets, net		769.8			774.6
Goodwill		4,643.2			4,488.0
Deferred tax assets		91.2			71.8
Other assets		101.8			95.4
Total assets	$	6,687.7		$	6,592.5
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	81.3		$	105.1
Income taxes payable		25.0			34.0
Accrued expenses		385.5			478.0
Deferred tax liabilities		—			1.0
Deferred revenue		1,061.7			1,016.5
Current portion of long-term obligations		33.3			32.4
Total current liabilities		1,586.8			1,667.0
Long-term debt, net		5,741.0			5,618.5
Deferred tax liabilities		77.9			91.5
Other long-term liabilities		206.8			209.8
Total liabilities		7,612.5			7,586.8
Commitments and contingencies (Note 14)
Stockholders’ deficit:
Common stock, $0.01 par value; 1,000 shares authorized; 1,000 shares issued and outstanding at July 31, 2017 and April 30, 2017		—			—
Additional paid-in capital		1,290.5			1,215.2
Receivable from stockholders		(59.2	)		(59.2	)
Accumulated other comprehensive (loss) income		(108.7	)		(278.2	)
Accumulated deficit		(2,056.9	)		(1,881.6	)
Total Infor, Inc. stockholders’ deficit		(934.3	)		(1,003.8	)
Noncontrolling interests		9.5			9.5
Total stockholders’ deficit		(924.8	)		(994.3	)
Total liabilities and stockholders’ deficit	$	6,687.7		$	6,592.5

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

4

INFOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions)

(unaudited)

	Three Months Ended
	July 31,
	2017			2016
Revenues:
Software license fees	$	77.8		$	75.3
SaaS subscriptions		123.1			90.1
Software license fees and subscriptions		200.9			165.4
Product updates and support fees		351.2			353.1
Software revenues		552.1			518.5
Consulting services and other fees		207.6			183.1
Total revenues		759.7			701.6
Operating expenses:
Cost of software license fees (1)		12.4			15.5
Cost of SaaS subscriptions (1)		53.2			37.4
Cost of product updates and support fees (1)		59.2			61.4
Cost of consulting services and other fees (1)		164.7			141.9
Sales and marketing		131.1			124.9
Research and development		117.7			110.1
General and administrative		54.4			51.0
Amortization of intangible assets and depreciation		59.5			57.8
Restructuring costs		4.7			20.0
Acquisition-related and other costs		7.4			3.9
Total operating expenses		664.3			623.9
Income from operations		95.4			77.7
Other expense, net:
Interest expense, net		80.0			80.3
Other (income) expense, net		184.7			15.0
Total other expense, net		264.7			95.3
Income (loss) before income tax		(169.3	)		(17.6	)
Income tax provision		5.7			7.8
Net income (loss)		(175.0	)		(25.4	)
Net income attributable to noncontrolling interests		0.3			0.1
Net income (loss) attributable to Infor, Inc.	$	(175.3	)	$	(25.5	)

(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.

5

INFOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(unaudited) 

	Three Months Ended
	July 31,
	2017			2016
Net income (loss)	$	(175.0	)	$	(25.4	)
Other comprehensive income (loss):
Unrealized gain (loss) on foreign currency translation, net of tax		167.6			(38.6	)
Change in defined benefit plan funding status, net of tax		0.1			1.4
Unrealized gain (loss) on derivative instruments, net of tax		1.7			1.5
Total other comprehensive income (loss)		169.4			(35.7	)
Comprehensive income (loss)		(5.6	)		(61.1	)
Noncontrolling interests comprehensive income (loss)		0.2			0.1
Comprehensive income (loss) attributable to Infor, Inc.	$	(5.8	)	$	(61.2	)

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

6

INFOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

	Three Months Ended
	July 31,
	2017			2016
Cash flows from operating activities:
Net income (loss)	$	(175.0	)	$	(25.4	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		59.5			57.8
Provision for doubtful accounts, billing adjustments and sales allowances		6.4			6.0
Deferred income taxes		0.4			(1.3	)
Non-cash loss (gain) on foreign currency		185.0			15.0
Non-cash interest		5.6			7.0
Equity-based compensation expense		0.2			3.5
Other		1.1			0.4
Changes in operating assets and liabilities (net of effects of acquisitions):
Prepaid expenses and other assets		4.0			5.4
Accounts receivable, net		50.3			43.7
Income tax receivable/payable, net		(0.3	)		1.8
Deferred revenue		(6.3	)		7.4
Accounts payable, accrued expenses and other liabilities		(134.7	)		(101.6	)
Net cash (used in) provided by operating activities		(3.8	)		19.7
Cash flows from investing activities:
Acquisitions, net of cash acquired		(69.1	)		(141.7	)
Change in restricted cash		2.5			1.0
Purchases of property, equipment and software		(24.5	)		(26.8	)
Net cash used in investing activities		(91.1	)		(167.5	)
Cash flows from financing activities:
Equity contributions		75.0			144.0
Dividends paid		—			(111.5	)
Distributions under tax sharing arrangement		—			(9.1	)
Payments on capital lease obligations		(0.8	)		(1.2	)
Payments on long-term debt		(8.2	)		(61.7	)
Other		(6.1	)		(0.4	)
Net cash provided by (used in) financing activities		59.9			(39.9	)
Effect of exchange rate changes on cash and cash equivalents		7.1			(6.8	)
Net decrease in cash and cash equivalents		(27.9	)		(194.5	)
Cash and cash equivalents at the beginning of the period		305.8			705.7
Cash and cash equivalents at the end of the period	$	277.9		$	511.2

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

7

INFOR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Nature of Business and Basis of Presentation

Infor, Inc. is a global provider of enterprise software and services. We provide industry-specific and other enterprise software products and related services, primarily to large and medium-sized enterprises in many industries, including manufacturing, distribution, healthcare, public sector, automotive, service industries, equipment services, management and rental (ESM&R), consumer products and retail and hospitality industries. Our software and services offerings are often “mission critical” for many of our customers as they help automate and integrate critical business processes, which enable our customers to better manage their suppliers, partners, customers and employees, as well as their business operations generally. Our industry-specific approach distinguishes us from larger competing enterprise software vendors, whose primary focus is on software programs that are less specialized and more difficult to run in the cloud, and take more time and cost to tailor to 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), financial applications, human capital management (HCM), 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. 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 hosting services industry leader. Additionally, Infor offers the GT Nexus, Inc. (GT Nexus) supply chain network platform to connect companies with their suppliers, distributors, and 3PLs in a commerce cloud. We also provide ongoing support and maintenance services for our customers through our subscription-based annual maintenance and support programs. In addition to providing software products, we help our customers implement and use our applications more effectively through our consulting services.

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 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).

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.

8

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, 2017, and other amounts presented herein as of April 30, 2017, 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, 2017, included in our Annual Report on Form 10-K.

Noncontrolling Interests

We consolidate our majority-owned subsidiaries and reflect noncontrolling interests on our Condensed Consolidated Balance Sheets for the portion of those entities that we do not own as a component of consolidated equity separate from the equity attributable to Infor, Inc.’s stockholders. The 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).

The noncontrolling interest that we report as equity on our Condensed Consolidated Balance Sheets relates to a minority interest held in an international subsidiary of GT Nexus, which we acquired in fiscal 2016.

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.

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 establish 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.

9

Fiscal Year

Our fiscal year is from May 1 through April 30 and the first quarter of each fiscal year is from May 1 through July 31. Unless otherwise stated, references to the years 2018 and 2017 relate to our fiscal years ended April 30, 2018 and 2017, respectively. References to future years also relate to our fiscal years ending April 30.

Revision of Prior Period Financial Statements

In connection with the preparation of our consolidated financial statements for fiscal 2017, we identified and corrected an error in the manner in which we were classifying amounts related to the tax allocation agreement between Infor, Inc. and GGC Software Parent, LLC and Infor Software Parent LLC, parent companies of Infor (the Tax Allocation Agreement). See Note 2 to the financial statements included in our Annual Report on Form 10-K for our fiscal year ended April 30, 2017, Summary of Significant Accounting Policies – Income Taxes. Historically, Infor recorded the differential between GGC Software Parent, LLC’s (our Parent) tax attributes utilized under the separate return method for tax allocation purposes and the amounts paid to our Parent under the Tax Allocation Agreement, whereby Infor pays the Parent for their attributes on the consolidated tax return, which will differ from our calculation under the separate return method, as a current asset in income tax receivable on our Consolidated Balance Sheets. This differential should be recorded as a distribution under the Tax Allocation Agreement and recorded as a decrease in additional paid-in capital on our Consolidated Balance Sheets when cash paid exceeds the benefit received, and as a capital contribution when the benefit exceeds the cash paid under the terms of the Tax Allocation Agreement.

In accordance with accounting guidance found in ASC 250-10 (SEC Staff Accounting Bulletin No. 99, Materiality), we assessed the materiality of these changes and concluded that they were not material to any of our previously issued financial statements. In accordance with accounting guidance found in ASC 250-10 (SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), we revised our previously issued financial statements to correct the effect of the error in the current filing.

Correction of this error resulted in a $9.1 million change in classification from cash flows from operating activities to cash flows from financing activities in our Condensed Consolidated Statement of Cash Flows for the three months ended July 31, 2016. The revision had no impact on our previously issued Condensed Consolidated Statement of Operations for the three months ended July 31, 2016.

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, 2017, which are included in our Annual Report on Form 10-K. 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 SaaS subscriptions, providing software support and product updates and providing consulting services to our customers. We record software license, product updates and support, and related service revenues in accordance with the guidance provided by ASC 985-605, Software—Revenue Recognition, and we record revenues related to non-software deliverables such as SaaS subscriptions and related service revenue in accordance with guidance provided by ASC 605, Revenue Recognition. Revenue is recorded net of applicable taxes.

Our software license fees revenues are primarily from sales of perpetual software licenses granting customers use of our software products. 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.

Our SaaS subscriptions revenues are primarily from granting customers access to software products through our SaaS subscription offerings. SaaS subscription revenues are recognized over the contract term once the software is made available for use in an environment hosted, supported, and maintained by Infor.

10

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 12 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 and SaaS-related consulting 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 services, hosting services and fees related to 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, 2017	$	15.4
Provision		2.2
Write-offs and recoveries		(3.4	)
Currency translation effect		0.4
Balance, July 31, 2017	$	14.6

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, 2017	$	12.2
Provision		4.2
Write-offs		(2.6	)
Currency translation effect		(0.1	)
Balance, July 31, 2017	$	13.7

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 translation of balance sheet accounts are included as a separate component of accumulated other comprehensive income on our Condensed Consolidated Balance Sheets. Gains or losses resulting from foreign currency transactions are included in foreign currency gain or loss as a component of other (income) expense, net, in the accompanying Condensed Consolidated Statements of Operations. Foreign currency gains or losses related to intercompany transactions considered to be long-term investments are included in other comprehensive income (loss) as a net credit or charge.

11

Transaction gains and losses are recognized in our results of operations based on the difference between the foreign currency exchange rates on the transaction date and on the reporting date. We recognized net foreign exchange losses of $184.7 million and $14.8 million for the three months ended July 31, 2017 and 2016, respectively.

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 May 1, 2017, we adopted the FASB guidance on simplifying the balance sheet presentation of deferred taxes. Under this guidance, deferred tax assets and deferred tax liabilities are 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. We adopted this guidance on a prospective basis. The adoption of this guidance only impacted the presentation on our consolidated balance sheets and related disclosures and did not have an impact on our results of operations or cash flows.

On May 1, 2017, we adopted the FASB guidance related to the classification of certain cash receipts and cash payments in the statement of cash flows. This guidance addressed eight specific cash flow issues with the objective of reducing the existing diversity in practice. The guidance was to be effective for the first interim period within annual periods beginning after December 15, 2017 (our fiscal 2019), with early adoption permitted. We elected to early adopt this guidance in the first quarter of fiscal 2018. Our existing cash flow presentation practices related to the applicable issues were consistent with this guidance, and the adoption had no impact on our cash flows, financial position or results of operations.

On May 1, 2017, we adopted the FASB guidance related to improvements to employee share-based payment accounting which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and classification in the statement of cash flows. In addition, this guidance allows companies to make a policy election regarding the impact of forfeitures. Forfeitures can either be estimated to determine the amount of compensation expense to recognize each period or recognized when they occur. We have elected to recognize forfeitures when they occur. The adoption of this guidance had no impact on our financial position, results of operations or cash flows.

We believe that no other new accounting guidance was adopted during the first quarter of fiscal 2018 that would be relevant to the readers of our financial statements.

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. On April 1, 2015, the FASB proposed deferring the effective date by one year to December 15, 2017, for annual reporting periods beginning after that date (our fiscal 2019). The FASB also proposed permitting 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 (full retrospective), or retrospectively with the cumulative effect of initial application recognized at the date of adoption (modified retrospective). Infor plans to adopt this guidance in our first quarter of fiscal 2019 and have not yet determined whether the effect will be material. We are continuing to evaluate the impact of the modified versus the full retrospective method, as well as the impact on our financial position, results of operations or cash flows, and associated processes, systems, and internal controls. Based on initial assessments, Infor believes the new standard will impact the following policies and practices:

• Recognition of software license revenue from term licenses upon delivery of the software, rather than over the term of the arrangement;

• Accounting for deferred commissions including costs that qualify for deferral and the amortization period;

• The removal of the current limitation on contingent revenue may result in revenue being recognized earlier for certain contracts; and

• The removal of the current residual method of allocating software license fees within a multiple element arrangement may impact reported revenues.

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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. Under this guidance, lessees will recognize a right-of-use asset and a lease liability on their consolidated balance sheets for leases with accounting lease terms of more than 12 months. The liability recognized will be the present value of related lease payments, subject to certain adjustments. Leases will continue to be classified as either operating or finance for income statement purposes, which will affect the pattern of expense recognition in the consolidated statements of operations. 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 consolidated financial statements and related disclosures and evaluating the timing of adoption. We expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption, which will have a significant impact on our assets and liabilities. We do not expect that this guidance will have a material impact on our results of operations or cash flows.

In October 2016, the FASB issued new guidance related to accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This guidance amends current GAAP which prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The update requires an entity to recognize the income tax consequences of an intra-entity transfer for assets other than inventory when the transfer occurs. The guidance will be effective for the first interim period within annual periods beginning after December 15, 2017 (our fiscal 2019), with early adoption permitted. The amendments are to be applied on a modified retrospective basis through a cumulative-effect adjustment to the balance sheet as of the beginning of the period of adoption. We are currently evaluating how this guidance will impact our financial position, results of operations and cash flows.

In November 2016, the FASB issued new guidance related to the classifications and presentation of changes in restricted cash in the statement of cash flows. This guidance requires that the statement of cash flows explain the change during the period in total of cash, cash equivalents and restricted cash. Accordingly, amounts generally described as restricted cash are to be combined with unrestricted cash when reconciling the beginning and end of period balances on the statement of cash flows. The guidance will be effective for the first interim period within annual periods beginning after December 15, 2017 (our fiscal 2019), with early adoption permitted. We are currently evaluating how this guidance will impact the classification/presentation of restricted cash on our consolidated statements of cash flows and related disclosures. This guidance will have no impact on our financial position or our results of operations.

In January 2017, the FASB issued guidance that clarifies the definition of a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods (our fiscal 2019). Early adoption is permitted. We are currently evaluating how this guidance will impact our financial position, results of operations and cash flows.

In January 2017, the FASB issued guidance simplifying how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Under this guidance, goodwill impairment will be determined based on the comparison of the fair value of a reporting unit to its carrying amount with an impairment charge recorded for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is to be applied prospectively and is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods (our fiscal 2021). Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We anticipate adopting this guidance early in the second quarter of fiscal 2018 when we perform our annual test for goodwill impairment. Upon adoption, we will adjust our goodwill testing procedures accordingly. We do not expect that this guidance will have a material impact on our financial position, results of operations or cash flows.

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In March 2017, the FASB issued guidance to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. Under this guidance, the service cost component of the net periodic benefit cost is to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. The other components of net benefit cost are to be presented outside of the subtotal of operating income on the income statement and allows only the service cost component of net benefit costs to be eligible for capitalization. This guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods (our fiscal 2019), with early adoption permitted as of the beginning of a fiscal year for which interim or annual statements have not been issued. This guidance is to be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We do not expect that this guidance will have a material impact on our results of operations.

As of the date of this Quarterly Report on Form 10-Q, 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 2018

Birst

On May 31, 2017, we acquired Birst, Inc. (Birst) for $71.0 million, net of cash acquired and including contingent consideration of $0.3 million recorded at the time of the purchase (the Birst Acquisition). The total purchase price may also include up to an additional $29.7 million if certain future performance conditions are met during the 2017 and 2018 calendar years. Based in San Francisco, California, Birst is a pioneer of cloud-native, business intelligence (BI), analytics, and data visualization with approximately 260 employees and more than 300 customers worldwide. Birst is a unique, comprehensive platform for sourcing, refining, and presenting standardized data insights at scale to drive business decisions. Birst connects the entire enterprise through a network of virtualized BI instances on top of a shared common analytical fabric. Birst spans ETL (extract, transform, and load), operational reports, dashboards, semantic understanding, visualization, smart discovery, and data blending to form a rich, simplified end-to-end BI suite in the cloud. The Birst Acquisition provides Infor a cloud BI platform which will significantly expand our analytical applications. The merger consideration was partially funded through new capital contributions by certain of our current equity holders, an affiliate of Koch Industries, Inc. (Koch Industries) and investment funds affiliated with Golden Gate Capital. See Note 17, Related Party Transactions- Equity Contributions.

This acquisition was not significant for financial reporting purposes, and the related results were not material to our results for the three months ended July 31, 2017.

We have recorded approximately $31.5 million of identifiable intangible assets and $44.2 million of goodwill related to the Birst Acquisition. The acquired intangible assets relating to Birst’s trade name, existing technology, customer relationships, and acquired favorable leases are being amortized over their weighted average estimated useful lives of approximately two, four, nine, and five years, respectively. We have determined that the goodwill arising from the Birst Acquisition will not be deductible for tax purposes.

Fiscal 2017

Ciber

On March 31, 2017, we acquired certain assets of Ciber, Inc. (Ciber) related to Ciber’s business of selling and delivering professional services in connection with Infor’s software products, for $15.0 million (the Ciber Acquisition). Based in Greenwood Village, Colorado, Ciber is a longtime Infor services partner specializing in consulting and services around our HCM and financials products and has been recognized as an Infor Services Partner of the Year on multiple occasions. The Ciber Acquisition helped expand our professional service organization’s capabilities in these key solution areas by adding approximately 180 highly-skilled professionals.

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We have recorded approximately $5.5 million of identifiable intangible assets and $6.2 million of goodwill related to the Ciber Acquisition. The acquired intangible assets relating to Ciber’s customer relationships are being amortized over their weighted average estimated useful lives of approximately five years. We have determined that the goodwill arising from the Ciber Acquisition will be deductible for tax purposes.

Accentia

On March 13, 2017, we acquired Accentia Middle East (Accentia), a longtime Infor services partner and exclusive reseller and provider of consulting services across the Middle East, North Africa, and India, for $18.0 million, net of cash acquired (the Accentia Acquisition). Based in Cairo, Egypt, Accentia has approximately 80 employees, additional offices in Dubai (UAE), Jeddah (Saudi Arabia), Casablanca (Morocco), Tunis (Tunisia), and Pune (India), and customers in 17 countries across the region. Accentia has significant expertise in the local market and specializes in Infor M3, our comprehensive, centralized ERP solution for medium to large enterprises in the manufacturing, distribution, and equipment industries. The Accentia Acquisition significantly expanded Infor’s presence in the region.

We have recorded approximately $5.5 million of identifiable intangible assets and $12.4 million of goodwill related to the Accentia Acquisition. The acquired intangible assets relating to Accentia’s customer relationships are being amortized over their weighted average estimated useful lives of approximately seven years. We have determined that a portion of the goodwill arising from the Accentia Acquisition will be deductible for tax purposes.

Starmount

On August 2, 2016, we acquired Starmount, Inc. (Starmount) for $62.1 million, net of cash acquired and including contingent consideration of $9.7 million recorded at the time of the purchase (the Starmount Acquisition). Included in the purchase price is $23.4 million of deferred consideration, which reflects the present value of a deferred payment of $25.0 million due on the first anniversary of the closing date of the Starmount Acquisition. The total purchase price may also include up to an additional $10.3 million if certain future performance conditions are met. Based in Austin, Texas, Starmount is a modern store systems provider serving large and mid-market retailers. Starmount is an innovative mobile-first company providing point-of-sale, mobile shopping assistant, and store inventory management products along with a data-rich commerce hub to engage shoppers, streamline operations, and support consistent cross-channel customer interactions. The Starmount Acquisition enabled us to accelerate delivery of our Infor CloudSuite Retail suite of enterprise applications.

We have recorded approximately $15.1 million of identifiable intangible assets and $47.7 million of goodwill related to the Starmount Acquisition. The acquired intangible assets relating to Starmount’s trade name, existing technology and customer relationships are being amortized over their weighted average estimated useful lives of approximately one, seven and nine years, respectively. We have determined that the goodwill arising from the Starmount Acquisition will not be deductible for tax purposes.

Predictix

On June 27, 2016, we acquired the remaining issued and outstanding capital stock in LogicBlox-Predictix Holdings, Inc. (Predictix) for approximately $125.5 million, net of cash acquired (the Predictix Acquisition). This is in addition to the 16.67% equity interest we acquired in the first quarter of fiscal 2016 for $25.0 million. Based in Atlanta, Georgia, Predictix is a provider of cloud-native, predictive, and machine-learning solutions for retailers. Predictix uses next-generation data science and big data analytics to help solve some of the most complex and challenging problems faced by retailers today. The Predictix Acquisition complemented and further expanded offerings under Infor CloudSuite Retail, our suite of enterprise applications delivered in the cloud and designed for today’s retailing landscape. The merger consideration was partially funded through a new capital contribution made to Infor’s parent company by certain of our equity holders, investment funds affiliated with Golden Gate Capital and investment funds affiliated with Summit Partners L.P. (Summit Partners). See Note 17, Related Party Transactions- Equity Contributions.

We have recorded approximately $37.0 million of identifiable intangible assets and $118.8 million of goodwill related to the Predictix Acquisition. The acquired intangible assets relating to Predictix’ existing technology and customer relationships are being amortized over their weighted average estimated useful lives of approximately five and twelve years, respectively. We have determined that the goodwill arising from the Predictix Acquisition will not be deductible for tax purposes.

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Merit

On May 11, 2016, we acquired Merit Globe AS (Merit) for $23.7 million, net of cash acquired and including contingent consideration of $7.5 million recorded at the time of the purchase (the Merit Acquisition). The total purchase price may also include up to an additional $4.5 million if certain future performance conditions are met. Based in Norway, Merit is a consulting firm specializing in Infor M3 products and services with approximately 250 employees and more than 500 customers in 22 countries, with a concentration in Europe. The Merit Acquisition brought decades of experience of Infor M3 consulting services that expanded and enhanced Infor’s professional services’ capabilities, particularly in the large and growing European Infor M3 customer base.

We have recorded approximately $9.0 million of identifiable intangible assets and $19.0 million of goodwill related to the Merit Acquisition. The acquired intangible assets relating to Merit’s trade name, existing technology and customer relationships are being amortized over their weighted average estimated useful lives of approximately two, two and eight years, respectively. We have determined that the goodwill arising from the Merit Acquisition will not be deductible for tax purposes.

The operating results related to our acquisitions have been included in our Condensed Consolidated Financial Statements from their respective acquisition dates.

Our estimates of fair value and resulting allocation of purchase price related to the acquisitions of Birst, Ciber, and Accentia, are preliminary as of July 31, 2017. 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 prices may differ from the information presented in these unaudited Condensed Consolidated Financial Statements. The measurement period ends on the earlier of one year after the acquisition date or the date we received the information about the facts and circumstances that existed at the acquisition date. Subsequent adjustments, if necessary, will be recognized during the period in which the amounts are determined.

Bankruptcy-Remote Special Purpose Entity

Platform Settlement Services, LLC (PSS), a wholly-owned subsidiary of GT Nexus, which we acquired in fiscal 2016, 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 was $28.6 million and $46.9 million at July 31, 2017 and April 30, 2017, respectively.

Contingent Consideration

The agreements related to certain of our acquisitions include contingent consideration provisions. 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 Condensed Consolidated Statements of Operations.

The purchase consideration related to one of our pre-fiscal 2017 acquisitions included additional contingent cash consideration payable to the sellers if certain performance conditions were met as detailed in the applicable agreement. As of July 31, 2017, we estimated the fair value of the remaining contingent consideration to be $1.7 million, which we anticipate will be paid in the second quarter of fiscal 2018.

The purchase consideration related to the Birst Acquisition, the Merit Acquisition, and the Starmount Acquisition includes additional contingent cash consideration payable to the sellers if certain future performance conditions are met as detailed in the applicable purchase agreements. The potential undiscounted amount of future payments that we may be required to make related to these contingent consideration arrangements is between $0.0 and $56.5 million. As of July 31, 2017, and April 30, 2017, we had recorded liabilities for the estimated fair value of these contingent consideration arrangements totaling approximately $19.7 million and $23.8 million, respectively.

The contingent consideration liabilities are included in accrued expenses and other long-term liabilities on our Condensed Consolidated Balance Sheets.

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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, 2017	$	1,389.5	$	2,767.8	$	330.7	$	4,488.0
Goodwill acquired		44.3		0.2		—		44.5
Currency translation effect		22.7		80.2		7.8		110.7
Balance, July 31, 2017	$	1,456.5	$	2,848.2	$	338.5	$	4,643.2

Goodwill acquired during the first three months of fiscal 2018 totaled $44.5 million and related primarily to the Birst Acquisition. 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 2017. We chose to perform a Step 1 goodwill impairment assessment as of September 30, 2016. 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 July 31, 2017. 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.

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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 July 31, 2017 and April 30, 2017:

	July 31, 2017
	Fair Value Measurements Using Inputs Considered as
(in millions)	Level 1		Level 2		Level 3		Fair Value
Liabilities
Contingent consideration	$	—	$	—	$	21.4	$	21.4
Derivative instruments		—		2.8		—		2.8
Total	$	—	$	2.8	$	21.4	$	24.2

	April 30, 2017
	Fair Value Measurements Using Inputs Considered as
(in millions)	Level 1		Level 2		Level 3		Fair Value
Liabilities
Contingent consideration	$	—	$	—	$	25.5	$	25.5
Derivative instruments		—		4.6		—		4.6
Total	$	—	$	4.6	$	25.5	$	30.1

Contingent consideration relates to certain of our 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 agreements. These include estimates of various operating performance measures and our assessment of the probability of meeting such results, with the probability-weighted earn-out then discounted to estimate fair value. The various operating performance measures included in these contingent consideration agreements relate to revenue growth rates, the level of services, perpetual license revenues and/or SaaS subscription revenues, the ratio of EBITDA to total revenue, and the level of EBITDA. As these are unobservable inputs, the contingent consideration liabilities are included in Level 3 inputs. See Note 3, Acquisitions – Contingent Consideration.

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 2018 or fiscal 2017. 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, 2017	$	25.5
Contingent consideration		0.3
Settlements		(5.5	)
Total (gain) loss recorded in earnings		0.6
Currency translation effect		0.5
Balance, July 31, 2017	$	21.4

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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 July 31, 2017, 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 July 31, 2017 and April 30, 2017, 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 July 31, 2017 and April 30, 2017, the total carrying value of our long-term debt was approximately $5.8 billion and $5.7 billion, respectively, and the estimated fair value of our long-term debt was approximately $5.9 billion and $5.8 billion, respectively.

6. Accounts Receivable, Net

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

	July 31,			April 30,
(in millions)	2017			2017
Accounts receivable	$	369.4		$	408.9
Unbilled accounts receivable		58.8			53.1
Less: allowance for doubtful accounts		(14.6	)		(15.4	)
Accounts receivable, net	$	413.6		$	446.6

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:

	July 31, 2017						April 30, 2017
(in millions)	Gross Carrying Amounts		Accumulated Amortization		Net (1)		Gross Carrying Amounts		Accumulated Amortization		Net		Estimated Useful Lives (in years)
Customer contracts and relationships	$	2,058.2	$	1,436.8	$	621.4	$	2,003.7	$	1,374.4	$	629.3		2 - 15
Acquired and developed technology		1,170.9		1,031.0		139.9		1,130.7		991.2		139.5		1 - 11
Tradenames		140.5		134.1		6.4		137.7		131.9		5.8		1 - 20
Acquired favorable leases		2.2		0.1		2.1		—		—		—		5
Total	$	3,371.8	$	2,602.0	$	769.8	$	3,272.1	$	2,497.5	$	774.6

(1) Net intangible assets increased from April 30, 2017 to July 31, 2017 by approximately $7.6 million due to cumulative foreign currency translation adjustments, reflecting movement in the currencies of the applicable underlying entities.

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

	Three Months Ended
	July 31,
(in millions)	2017		2016
Customer contracts and relationships	$	27.1	$	28.7
Acquired and developed technology		16.4		18.6
Tradenames		0.9		0.6
Acquired favorable leases		0.1		—
Total	$	44.5	$	47.9

The estimated future annual amortization expense related to these intangible assets as of July 31, 2017, was as follows:

(in millions)
Fiscal 2018 (remaining 9 months)	$	107.6
Fiscal 2019		133.2
Fiscal 2020		121.7
Fiscal 2021		113.9
Fiscal 2022		70.4
Fiscal 2023		54.4
Thereafter		168.6
Total	$	769.8

8. Accrued Expenses

Accrued expenses consisted of the following for the periods indicated:

	July 31,		April 30,
(in millions)	2017		2017
Compensation and employee benefits	$	159.9	$	185.7
Taxes other than income		17.9		24.4
Royalties and partner commissions		38.8		44.9
Litigation		5.1		2.5
Professional fees		10.4		38.6
Subcontractor expense		8.9		8.7
Interest		53.6		77.4
Restructuring		11.0		16.5
Asset retirement obligations		2.2		1.7
Deferred rent		3.4		3.6
Deferred acquisition payments		41.1		41.1
Other		33.2		32.9
Accrued expenses	$	385.5	$	478.0

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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. 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 Applications, LP (Infor Enterprise) and IGS Holding LP (IGS Holding), affiliates of the parent company of Infor. 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
	July 31,
(in millions)	2017		2016
Cost of product updates and support fees	$	—	$	0.1
Sales and marketing		—		0.7
Research and development		0.2		0.2
General and administrative		—		2.5
Total	$	0.2	$	3.5

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 2018 Restructuring Charges

During the first three months of fiscal 2018, we incurred restructuring costs of $4.2 million related to employee severance costs primarily for personnel actions taken in our professional services and sales organizations in our EMEA region and facilities charges relate to exiting or consolidation of space in facilities primarily in the Americas region. During the first three months of fiscal 2018, we made cash payments of approximately $1.1 million related to these actions. We expect to complete the remainder of these actions during the remainder of fiscal 2018.

Fiscal 2018 Acquisition-Related Charges

During the first three months of fiscal 2018, we incurred restructuring costs of $0.2 million in employee severance costs related to the Birst Acquisition. We expect to complete these actions during the remainder of fiscal 2018.

Fiscal 2017 Restructuring Charges

During fiscal 2017, we incurred restructuring costs for employee severance costs related to personnel actions across all functions and all geographic regions, primarily in the Americas and EMEA, and for facility charges related to exiting or consolidation of space in facilities primarily in the Americas region. During the first three months of fiscal 2018, we recorded adjustments to these restructuring costs of $0.3 million and we made cash payments of approximately $9.3 million related to these actions. We expect to complete these actions during the remainder of fiscal 2018.

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Fiscal 2017 Acquisition-Related Charges

During fiscal 2017, we incurred acquisition-related restructuring costs related to the operations of our fiscal 2017 acquisitions. These restructuring charges included employee severance costs related to redundant positions and facility charges related to exiting or consolidation of space. During the first three months of fiscal 2018, we made cash payments of $0.1 million related to these actions. We expect to complete these actions during the remainder of fiscal 2018.

Previous Restructuring and Acquisition-Related Charges

Prior to fiscal 2017, we had completed certain restructuring activities related to our ongoing operations as well as a series of acquisition-related restructuring actions. During the first three months of fiscal 2018, we made cash payments of $0.9 million related to these actions. 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 three-month period ended July 31, 2017. 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
	Balance							Foreign					Balance		Total Costs		Total Expected
	April 30,		Initial					Currency		Cash			July 31,		Recognized		Program
(in millions)	2017		Costs		Expense			Effect		Payments			2017		to Date		Costs
Fiscal 2018 restructuring
Severance	$	—	$	4.2	$	—		$	0.1	$	(1.1	)	$	3.2	$	4.2	$	4.2
Total fiscal 2018 restructuring		—		4.2		—			0.1		(1.1	)		3.2		4.2		4.2
Fiscal 2018 acquisition-related
Severance		—		0.2		—			—		—			0.2		0.2		0.2
Total fiscal 2018 acquisition-related		—		0.2		—			—		—			0.2		0.2		0.2
Fiscal 2017 restructuring
Severance		13.1		—		(0.1	)		0.5		(8.7	)		4.8		37.4		37.4
Facilities and other		1.9		—		0.4			—		(0.6	)		1.7		3.0		3.0
Total fiscal 2017 restructuring		15.0		—		0.3			0.5		(9.3	)		6.5		40.4		40.4
Fiscal 2017 acquisition-related
Facilities and other		0.5		—		—			—		(0.1	)		0.4		0.7		0.7
Total fiscal 2017 acquisition-related		0.5		—		—			—		(0.1	)		0.4		0.7		0.7
Previous restructuring
Severance		0.8		—		—			—		(0.2	)		0.6		15.9		15.9
Facilities and other		2.5		—		—			0.1		(0.4	)		2.2		5.4		5.4
Total previous restructuring		3.3		—		—			0.1		(0.6	)		2.8		21.3		21.3
Previous acquisition-related
Severance		0.1		—		—			—		—			0.1		40.5		40.5
Facilities and other		2.5		—		—			0.1		(0.3	)		2.3		4.6		4.6
Total previous acquisition-related		2.6		—		—			0.1		(0.3	)		2.4		45.1		45.1
Total restructuring	$	21.4	$	4.4	$	0.3		$	0.8	$	(11.4	)	$	15.5	$	111.9	$	111.9

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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
	July 31,
(in millions)	2017		2016
License	$	1.8	$	2.7
Maintenance		0.6		5.7
Consulting		2.3		4.0
General and administrative and other functions		—		7.6
Total restructuring costs	$	4.7	$	20.0

11. Debt

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

	July 31, 2017									April 30, 2017
(in millions)	Principal Amount			Net Amount (1)			Contractual Rate			Principal Amount			Net Amount (1)			Contractual Rate
First lien Term B-6 due February 1, 2022	$	2,141.7		$	2,082.6			3.90	%	$	2,147.1		$	2,084.9			3.90	%
First lien Euro Term B-1 due February 1, 2022		1,180.6			1,174.0			3.75	%		1,089.7			1,082.8			3.75	%
5.75% first lien senior secured notes due August 15, 2020		500.0			486.1			5.75	%		500.0			485.0			5.75	%
6.5% senior notes due May 15, 2022		1,630.0			1,621.5			6.50	%		1,630.0			1,621.1			6.50	%
5.75% senior notes due May 15, 2022		414.3			410.1			5.75	%		381.4			377.1			5.75	%
Deferred financing fees, debt discounts and premiums, net		(92.3	)		—						(97.3	)		—
Total long-term debt		5,774.3			5,774.3						5,650.9			5,650.9
Less: current portion		(33.3	)		(33.3	)					(32.4	)		(32.4	)
Total long-term debt - non-current	$	5,741.0		$	5,741.0					$	5,618.5		$	5,618.5

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

The weighted average contractual interest rate at July 31, 2017 and April 30, 2017 was 4.88% and 4.89%, 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 July 31, 2017:

Fiscal 2018 (remaining 9 months)	$	25.0
Fiscal 2019		33.3
Fiscal 2020		33.3
Fiscal 2021		533.3
Fiscal 2022		3,197.4
Fiscal 2023		2,044.3
Thereafter		—
Total	$	5,866.6

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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, 2017, included in our Annual Report on Form 10-K, for a description of each amendment (First Amendment through Eighth 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 $120.0 million. We have made no draws against the Revolver and no amounts are currently outstanding. However, $10.3 million of letters of credit have reduced the amount available under the Revolver to $109.7 million as of July 31, 2017. Pursuant to the Credit Agreement, there is an undrawn line fee of 0.50% and the Revolver matures on April 5, 2019. 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 February 6, 2017, we entered into a $2,147.1 million term loan (the Tranche B-6 Term Loan). Interest on the Tranche B-6 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-6 Term Loan matures on February 1, 2022.

On February 6, 2017, we entered into a €1,000.0 million term loan (the Euro Tranche B-1 Term Loan). Interest on the Euro Tranche B-1 Term Loan is based on a fluctuating rate of interest determined by reference to an Adjusted LIBOR rate, plus a margin of 2.75% per annum, with an Adjusted LIBOR floor of 1.0%. The Euro Tranche B-1 Term Loan matures on February 1, 2022.

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 6.5% and 5.75% senior notes (the Senior Notes) include $1,630.0 million in aggregate principal amount of our 6.5% Senior Notes and €350.0 million in aggregate principal amount of our 5.75% 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.

First Lien Senior Secured Notes

Our 5.75% first lien senior secured notes (the Senior Secured Notes) include $500.0 million in aggregate principal 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 mature on August 15, 2020. 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.

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Unrestricted Subsidiary

We have designated LogicBlox, Inc. (LogicBlox), a wholly-owned subsidiary of Infor (US), Inc., as an “Unrestricted Subsidiary” as defined under the provisions of the Credit Agreement and the indentures governing our Senior Notes and Senior Secured Notes. The financial position and results of operations of LogicBlox are included in our Condensed Consolidated Financial Statements. As required by the 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.

LogicBlox’s financial position as of July 31, 2017, and its results of operations for the first three months of fiscal 2018 were not significant to our consolidated financial position and results of operations as of and for the period ended July 31, 2017. LogicBlox held assets totaling $6.7 million, primarily intangible assets and goodwill as of July 31, 2017. For the three months ended July 31, 2017, LogicBlox recorded revenues of $0.1 million and a loss from operations of $1.4 million.

Deferred Financing Fees, Debt Discounts and Premiums

As of July 31, 2017 and April 30, 2017, deferred financing fees, net of amortization, related to our Term Loans, Senior Notes, and Secured Senior Notes of $75.0 million and $78.9 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 $1.0 million and $1.2 million as of July 31, 2017 and April 30, 2017, respectively, which were reflected on our Condensed Consolidated Balance Sheets in other assets. These deferred financing fees are being amortized over the applicable life of the Term Loans, the Senior Secured Notes and Senior Notes under the effective interest method. For the three months ended July 31, 2017 and 2016, we amortized $4.1 million and $5.4 million, respectively, in deferred financing fees which are included in interest expense, net in our Condensed Consolidated Statements of Operations.

In addition, we have recorded debt discounts, net of premiums and accumulated amortization, of $17.3 million and $18.4 million as of July 31, 2017 and April 30, 2017, 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, accrues at a rate of 7.125% per annum. PIK interest on the HoldCo Notes accrues at a rate of 7.875% per annum. As of July 31, 2017 and April 30, 2017, 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.

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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
	July 31,
(in millions, except percentages)	2017			2016
Income tax provision	$	5.7		$	7.8
Effective income tax rate		(3.4	)%		(44.3	)%

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 first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was primarily driven by an increase in foreign based earnings subject to taxation, an increase in U.S. tax losses subject to a full valuation allowance, and a reduction in the amount of unrecognized tax benefits.

During the upcoming twelve months ending July 31, 2018, we expect a net reduction of approximately $46.8 million of unrecognized tax benefits, primarily due to the expiration of statutes of limitation in various jurisdictions.

Our deferred tax assets were $91.2 million and $108.1 million as of July 31, 2017 and April 30, 2017, 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).

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

(in millions)	Foreign Currency Translation Adjustment			Funded Status of Defined Benefit Pension Plan (1)			Derivative Instruments Unrealized Gain (Loss) (2)			Accumulated Other Comprehensive Income (Loss)
Balance, April 30, 2017	$	(259.4	)	$	(16.0	)	$	(2.8	)	$	(278.2	)
Other comprehensive income (loss)		167.6			0.1			1.7			169.4
Less: other comprehensive (income) loss attributable to noncontrolling interests		0.1			—			—			0.1
Other comprehensive income (loss) attributable to Infor, Inc.		167.7			0.1			1.7			169.5
Balance, July 31, 2017	$	(91.7	)	$	(15.9	)	$	(1.1	)	$	(108.7	)

(1) Funded status of defined benefit pension plan is presented net of tax benefit of $3.4 million and $3.4 million as of July 31, 2017 and April 30, 2017, respectively.

(2) Derivative instruments unrealized gain (loss) is presented net of tax benefit of $1.7 million and $1.8 million as of July 31, 2017 and April 30, 2017, 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
July 31, 2017
Foreign currency translation adjustment	$	167.6		$	—		$	167.6
Change in funded status of defined benefit plans		0.1			—			0.1
Derivative instruments unrealized loss		(1.2	)		1.1			(0.1	)
Reclassification adjustments:
Amortization of derivative instruments unrealized loss		3.0			(1.2	)		1.8
Other comprehensive income (loss)	$	169.5		$	(0.1	)	$	169.4
July 31, 2016
Foreign currency translation adjustment	$	(38.6	)	$	—		$	(38.6	)
Change in funded status of defined benefit plans		1.4			—			1.4
Derivative instruments unrealized loss		(0.6	)		0.2			(0.4	)
Reclassification adjustments:
Amortization of derivative instruments unrealized loss		3.0			(1.1	)		1.9
Other comprehensive income (loss)	$	(34.8	)	$	(0.9	)	$	(35.7	)

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 $14.9 million and $14.5 million for the three-month periods ended July 31, 2017 and 2016, respectively.

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We have also entered into certain capital lease commitments for buildings, company aircraft, 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. Our total capital lease obligations were $8.5 million and $9.0 million as of July 31, 2017, and April 30, 2017, respectively.

Litigation

From time to time, we are subject to litigation in the normal course of business. In accordance with applicable FASB guidance, we accrue for litigation exposure when a loss is probable and estimable, and we provide disclosures of matters for which the likelihood of material loss is at least reasonably possible. As of July 31, 2017 and April 30, 2017, we had accrued $5.1 million and $2.5 million, respectively, related to current litigation matters. We expense all legal costs to resolve regulatory, legal, tax or other matters in the period incurred.

Felleskjøpet Agri SA (FKA) initiated legal proceedings against Infor (Steinhausen) II GmbH (Infor Steinhausen), a wholly-owned subsidiary of the Company, in Norway claiming damages of up to $43.1 million (NOK 370.0 million) related to the suspension of an ERP project. Infor Steinhausen has denied FKA’s claims and asserted counterclaims. Court hearings are scheduled for late calendar 2017 and a court decision is expected in calendar 2018. We intend to vigorously defend FKA’s claims. While we believe we have meritorious defenses against these claims, given the inherent unpredictability of litigation, we cannot at this time estimate the possible outcome of this lawsuit.

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 believe that, based on information presently available, the resolution of any such legal matters existing as of July 31, 2017, 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 July 31, 2017 and April 30, 2017.

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.

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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
(in millions, except percentages)	Notional Amount		Derivative Base			Classification Asset (Liability)	July 31, 2017			April 30, 2017
Accounting cash flow hedges:
Interest rate swap	$	425.3		2.4725	%	Accrued expenses	$	(1.3	)	$	(2.0	)
Interest rate swap		212.6		2.4740	%	Accrued expenses		(0.6	)		(1.1	)
Interest rate swap		212.6		2.4750	%	Accrued expenses		(0.6	)		(1.1	)
Interest rate swap		94.5		2.4725	%	Accrued expenses		(0.3	)		(0.4	)
Total	$	945.0				Total, net asset (liability)	$	(2.8	)	$	(4.6	)

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
	Statement of		July 31,
(in millions)	Operations Location		2017			2016
Accounting cash flow hedges:
Interest rate swaps
Effective portion - gain (loss) recognized in OCI			$	(1.2	)	$	(0.6	)
(Gain) loss reclassified from AOCI into net income		Interest expense, net	$	3.0		$	3.0

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 July 31, 2017, approximately $2.8 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 12 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 two 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.

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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
July 31, 2017
Revenues	$	203.5		$	351.7		$	207.8		$	763.0
Cost of revenues		65.6			59.2			164.7			289.5
Direct sales and other costs		106.2			—			10.6			116.8
Sales margin	$	31.7		$	292.5		$	32.5		$	356.7
Sales margin %		15.6	%		83.2	%		15.6	%		46.7	%
July 31, 2016
Revenues	$	166.1		$	353.4		$	183.1		$	702.6
Cost of revenues		52.9			61.3			141.9			256.1
Direct sales and other costs		97.7			—			12.6			110.3
Sales margin	$	15.5		$	292.1		$	28.6		$	336.2
Sales margin %		9.3	%		82.7	%		15.6	%		47.9	%

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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 July 31,
(in millions)	2017			2016
Reportable segment revenues	$	763.0		$	702.6
Purchase accounting revenue adjustments (1)		(3.3	)		(1.0	)
Total revenues	$	759.7		$	701.6
Reportable segment sales margin	$	356.7		$	336.2
Other unallocated costs and operating expenses (2)		197.1			180.7
Amortization of intangible assets and depreciation		59.5			57.8
Restructuring costs		4.7			20.0
Income from operations		95.4			77.7
Total other expense, net		264.7			95.3
Income (loss) before income tax	$	(169.3	)	$	(17.6	)

(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
July 31, 2017
Software license fees	$	43.6	$	26.1	$	8.1	$	77.8
SaaS subscriptions		92.0		16.6		14.5		123.1
Software license fees and subscriptions		135.6		42.7		22.6		200.9
Product updates and support fees		225.6		98.5		27.1		351.2
Software revenues		361.2		141.2		49.7		552.1
Consulting services and other fees		113.6		76.7		17.3		207.6
Total revenues	$	474.8	$	217.9	$	67.0	$	759.7
July 31, 2016
Software license fees	$	47.1	$	22.7	$	5.5	$	75.3
SaaS subscriptions		70.1		10.4		9.6		90.1
Software license fees and subscriptions		117.2		33.1		15.1		165.4
Product updates and support fees		227.8		98.5		26.8		353.1
Software revenues		345.0		131.6		41.9		518.5
Consulting services and other fees		94.7		73.3		15.1		183.1
Total revenues	$	439.7	$	204.9	$	57.0	$	701.6

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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
July 31, 2017	$	140.3	$	20.2	$	14.0	$	174.5
April 30, 2017	$	131.5	$	17.9	$	12.1	$	161.5

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

	Three Months Ended July 31,
(in millions)	2017		2016
United States	$	429.5	$	400.9
All other countries		330.2		300.7
Total revenues	$	759.7	$	701.6

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

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

	July 31,		April 30,
(in millions)	2017		2017
United States	$	138.2	$	129.5
All other countries		36.3		32.0
Total long-lived tangible assets	$	174.5	$	161.5

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

Our largest investors have historically been our sponsors, Golden Gate Capital and Summit Partners. In fiscal 2017, an affiliate of Koch Industries made a significant investment in Infor becoming another of our largest investors and together with Golden Gate Capital and Summit Partners, our Sponsors. The following is a summary of our transactions with our Sponsors and other related parties.

Sponsor Management and Other Fees

We have entered into advisory agreements with Golden Gate Capital and Summit Partners 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, certain other services and the reimbursement of reasonable out-of-pocket expenses. These advisory agreements are for an initial term of ten years with the annual management fees payable to Golden Gate Capital and Summit Partners on a quarterly basis. In addition, Infor Enterprise, Golden Gate Capital and Summit Partners have entered into a similar advisory agreement with Koch Equity Development LLC (KED), the investment and acquisition subsidiary of Koch Industries. Under these advisory agreements, the total contractual annual management fee due is approximately $8.0 million which is payable to our Sponsors based on the provisions in the applicable agreements. We recognized these management fees as a component of general and administrative expenses in our Consolidated Statement of Operations.

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The following table sets forth management fees and applicable expenses rendered under the advisory agreements for the periods indicated:

	Three Months Ended July 31,
(in millions)	2017		2016
Golden Gate Capital	$	1.2	$	1.4
Summit Partners		0.3		0.6
Koch Industries		1.0		—
Total management fees and expenses	$	2.5	$	2.0

At July 31, 2017, approximately $1.4 million, $1.3 million, and $0.5 million of the Sponsor management fees remained unpaid and related to Koch Industries, Golden Gate Capital, and Summit Partners, respectively.

In addition, under the advisory agreements the Sponsors may be entitled to receive transaction fees in relation to certain consummated transactions including among others, acquisitions and financing transactions. In the first quarter of fiscal 2018 we expensed buyer transaction fees in connection with the Birst Acquisition of $0.4 million, $0.3 million and $0.1 million payable to Koch Industries, Golden Gate Capital and Summit Partners, respectively. In connection with the Predictix Acquisition we expensed buyer transaction fees of approximately $1.1 million payable to Golden Gate Capital and $0.4 million payable to Summit Partners in the first quarter of fiscal 2017. The buyer transaction fees related to the Birst Acquisition and Predictix Acquisition were included in acquisition-related and other costs in our Condensed Consolidated Statement of Operations in the applicable periods.

Related Party Operating Activity

Revenues and Expenses

In the normal course of business, we may sell products and services to companies owned by our Sponsors. Revenues from companies affiliated with Golden Gate Capital, Summit Partners, and Koch Industries are recognized according to our revenue recognition policy as described in Note 2, Summary of Significant Accounting Policies. Revenues from Golden Gate Capital-owned companies were approximately $0.8 million in the three months ended July 31, 2017, and $0.4 million in the comparable period of fiscal 2017. We had revenues of less than $0.1 million from companies owned by Summit Partners in the first three months of fiscal 2018 and no revenues in the corresponding prior period of fiscal 2017. Revenues from companies affiliated with Koch Industries were approximately $4.5 million in the first quarter of fiscal 2018. Koch Industries was not a related party in the corresponding prior period of fiscal 2017.

In addition, we made payments to companies owned by Golden Gate Capital for products and services of $2.0 million and $3.9 million in the first quarter of fiscal 2018 and 2017, respectively. We made payments to companies owned by Summit Partners for products and services of $0.2 million in the first quarter of fiscal 2018 and no payments in the first quarter of fiscal 2017. We made an insignificant amount of payments to Koch Industries affiliated companies in the first quarter of fiscal 2018.

Koch SaaS Agreements

In fiscal 2018, we entered into a SaaS subscription agreement with Flint Hills Resources, LLC, an affiliate of Koch Industries, under which Flint Hills Resources agreed to a five-year subscription to our EAM software. This agreement totals approximately $11.8 million with SaaS subscription revenues of approximately $2.4 million per year. In addition, we entered into other SaaS subscription agreements with affiliates of Koch Industries for various Infor software products over terms from three to five years. These agreements totaled approximately $1.1 million with SaaS subscription revenues of approximately $0.2 million per year. All of these agreements were entered into at our customary rates.

In the fourth quarter of fiscal 2017, we entered into a SaaS subscription agreement with Koch Business Solutions, LP (KBS) under which KBS agreed to a five-year subscription to our CloudSuite HCM and CloudSuite Financials software, both at our customary rates. This agreement totals approximately $43.3 million. SaaS subscription revenues of $6.8 million are expected to be recognized in the first year and approximately $9.1 million per year over each of the remaining four years under the agreement.

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Golden Gate Capital SaaS Agreement

In the second quarter of fiscal 2017, we entered into a SaaS subscription agreement with Golden Gate Capital under which Golden Gate Capital agreed to a three-year subscription to our CloudSuite Financials and Procurement software including related implementation services, both at our customary rates. This agreement and related services total approximately $0.9 million, including SaaS subscription revenue of $0.2 million per year which will be recognized ratably over each of the three years under the agreement, and $0.3 million in consulting services which are to be recognized as the services are provided.

Equity Contributions

In the first quarter of fiscal 2018, we completed the Birst Acquisition. See Note 3, Acquisitions – Fiscal 2018 – Birst. In conjunction with the Birst Acquisition, certain of our Sponsors made new capital contributions to Infor Enterprise, an affiliate of the parent company of Infor, of $75.0 million, which was contributed as equity to Infor, Inc. The proceeds from the new equity contribution were used to fund the Birst Acquisition purchase consideration.

In the fourth quarter of fiscal 2017, an affiliate of Koch Industries completed the purchase of more than $2 billion of preferred and common equity of certain affiliates of the Company under the definitive agreement we previously disclosed in the second quarter of fiscal 2017. Under this agreement, our existing shareholders, including Golden Gate Capital, Summit Partners and certain members of management, maintain control of the Company. In conjunction with the purchase, representatives of Koch Industries have been appointed to hold five of the eleven directors on Infor’s board.

In the first quarter of fiscal 2017, we completed the Predictix Acquisition. See Note 3, Acquisitions – Fiscal 2017 – Predictix. In conjunction with the Predictix Acquisition, certain of our Sponsors made new capital contributions to Infor Enterprise, an affiliate of the parent company of Infor, of $133.0 million, of which $77.0 million was contributed as equity to Infor, Inc. Investment funds affiliated with Golden Gate Capital and investment funds affiliated with Summit Partners contributed approximately $95.2 million and $37.8 million, respectively. The proceeds from the new equity contribution were used to fund the Predictix Acquisition purchase consideration.

Due to/from Affiliates

Infor, through certain of our subsidiaries, had net receivables from our affiliates, HoldCo and GGC Software Parent, LLC, of $59.2 million as of July 31, 2017, and $59.2 million as of April 30, 2017. These receivables arose primarily due to our payment of deferred financing fees and interest related to certain acquired debt of HoldCo and activity related to the Tax Allocation Agreement, discussed below. These receivables are included in receivable from stockholders in the equity section on our Condensed Consolidated Balance Sheets.

We have entered into a Tax Allocation Agreement with GGC Software Parent, LLC, and HoldCo. Infor is included in the GGC Software Parent, LLC 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. In the first three months of fiscal 2018 we did not make any payments under the Tax Allocation Agreement and we made payments of $9.1 million during the corresponding period last year.

Dividends Paid to Affiliates

Fiscal 2018

None

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Fiscal 2017

In the first three months of fiscal 2017, we paid dividends to HoldCo totaling $111.5 million including the following:

In the first quarter of fiscal 2017, we paid dividends to HoldCo totaling $94.0 million. The dividend related to the funding of HoldCo’s quarterly interest on the HoldCo Notes due November 1, 2016 as well as funding of future interest payments related to the HoldCo Notes and future amounts due under our Tax Allocation Agreement. HoldCo then contributed equity of $67.0 million to Infor, Inc.

In the first quarter of fiscal 2017, we also paid dividends to HoldCo totaling $17.5 million related to the funding of quarterly interest on our affiliate’s debt. In April 2016, HoldCo elected to pay quarterly interest due related to the HoldCo Notes of approximately $26.7 million in cash (i) with $0.1 million cash on-hand, (ii) with amounts we funded through dividend distributions from Infor to HoldCo of $17.5 million, which were accrued as of April 30, 2016, and (iii) through certain payments made under the Tax Allocation Agreement, totaling $9.1 million. The dividends and amounts due under the Tax Allocation Agreement were paid on May 2, 2016.

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 July 31, 2017 and April 30, 2017, our Condensed Consolidating Statements of Operations, our Condensed Consolidating Statements of Comprehensive Income (Loss) for our fiscal quarters ended July 31, 2017 and 2016, and our Condensed Consolidating Statements of Cash Flows for the three months ended July 31, 2017 and 2016.

The Infor (US), Inc. (Subsidiary Issuer) column excludes Infor (US), Inc.’s Unrestricted Subsidiary, LogicBlox, which is included in the Non-Guarantor Subsidiaries column retrospectively for all periods presented below. See Note 11, Debt – Unrestricted Subsidiary.

In the third quarter of fiscal 2017, we merged the wholly-owned domestic subsidiaries of GT Nexus into Infor (US), Inc. and accordingly, they are included in the Subsidiary Issuer column retrospectively for all periods presented below.

During the fourth quarter of fiscal 2017, we identified and corrected an error in the manner in which we were classifying amounts related to the Tax Allocation Agreement. Previously, such amounts were presented as a current asset in income tax receivable on our Consolidated Balance Sheets and as an operating activity in our Consolidated Statements of Cash Flows. These amounts are now presented as a decrease in additional paid-in capital and as a financing activity. Presentation in the applicable prior period’s Consolidated Balance Sheets and Consolidating Statements of Cash Flows below has been revised to be consistent with the current period presentation. We have assessed the materiality of these revisions and concluded that they were not material to any of our previously issued financial statements. See Note 1, Nature of Business and Basis of Presentation – Revision of Prior Period Financial Statements.

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Condensed Consolidating Balance Sheets

	July 31, 2017
(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	$	—		$	81.2		$	—	$	196.7	$	—		$	277.9
Accounts receivable, net		—			221.6			12.0		180.0		—			413.6
Prepaid expenses		—			111.1			19.7		38.5		—			169.3
Income tax receivable		—			6.9			0.6		14.9		(0.1	)		22.3
Other current assets		—			7.0			0.1		17.0		—			24.1
Affiliate receivable		—			119.5			187.9		122.0		(429.4	)		—
Total current assets		—			547.3			220.3		569.1		(429.5	)		907.2
Property and equipment, net		—			130.4			7.9		36.2		—			174.5
Intangible assets, net		—			653.6			0.5		115.7		—			769.8
Goodwill		—			2,964.1			62.6		1,616.5		—			4,643.2
Deferred tax assets		—			0.2			0.1		91.0		(0.1	)		91.2
Other assets		—			34.1			4.6		63.1		—			101.8
Affiliate receivable		—			122.9			0.1		135.4		(258.4	)		—
Investment in subsidiaries		—			1,996.3			—		—		(1,996.3	)		—
Total assets	$	—		$	6,448.9		$	296.1	$	2,627.0	$	(2,684.3	)	$	6,687.7
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	—		$	60.5		$	0.2	$	20.6	$	—		$	81.3
Income taxes payable		—			0.2			—		24.9		(0.1	)		25.0
Accrued expenses		—			203.3			22.3		159.9		—			385.5
Deferred revenue		—			694.6			23.7		343.4		—			1,061.7
Affiliate payable		29.5			311.1			5.6		83.2		(429.4	)		—
Current portion of long-term obligations		—			33.3			—		—		—			33.3
Total current liabilities		29.5			1,303.0			51.8		632.0		(429.5	)		1,586.8
Long-term debt		—			5,741.0			—		—		—			5,741.0
Deferred tax liabilities		—			53.9			—		24.1		(0.1	)		77.9
Affiliate payable		58.2			135.0			0.4		64.8		(258.4	)		—
Other long-term liabilities		—			62.6			15.3		128.9		—			206.8
Losses in excess of investment in subsidiaries		846.6			—			—		—		(846.6	)		—
Total liabilities		934.3			7,295.5			67.5		849.8		(1,534.6	)		7,612.5
Total Infor, Inc. stockholders’ equity (deficit)		(934.3	)		(846.6	)		228.6		1,767.7		(1,149.7	)		(934.3	)
Noncontrolling interests		—			—			—		9.5		—			9.5
Total stockholders’ equity (deficit)		(934.3	)		(846.6	)		228.6		1,777.2		(1,149.7	)		(924.8	)
Total liabilities and stockholders’ equity (deficit)	$	—		$	6,448.9		$	296.1	$	2,627.0	$	(2,684.3	)	$	6,687.7

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	April 30, 2017
(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	$	—		$	88.1		$	—	$	217.7	$	—		$	305.8
Accounts receivable, net		—			238.8			14.5		193.3		—			446.6
Prepaid expenses		—			100.9			22.2		38.0		—			161.1
Income tax receivable		—			9.8			0.2		14.9		—			24.9
Other current assets		—			10.3			0.1		16.1		—			26.5
Affiliate receivable		—			120.7			179.0		80.2		(379.9	)		—
Deferred tax assets		—			18.6			5.1		12.7		(0.1	)		36.3
Total current assets		—			587.2			221.1		572.9		(380.0	)		1,001.2
Property and equipment, net		—			121.5			8.0		32.0		—			161.5
Intangible assets, net		—			657.1			0.8		116.7		—			774.6
Goodwill		—			2,914.8			62.5		1,510.7		—			4,488.0
Deferred tax assets		0.1			—			—		71.8		(0.1	)		71.8
Other assets		—			27.4			6.2		61.8		—			95.4
Affiliate receivable		—			118.0			0.1		127.8		(245.9	)		—
Investment in subsidiaries		—			1,809.6			—		—		(1,809.6	)		—
Total assets	$	0.1		$	6,235.6		$	298.7	$	2,493.7	$	(2,435.6	)	$	6,592.5
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	—		$	74.8		$	—	$	30.3	$	—		$	105.1
Income taxes payable		—			—			—		34.0		—			34.0
Accrued expenses		—			264.6			35.2		178.2		—			478.0
Deferred tax liabilities		0.1			—			—		1.0		(0.1	)		1.0
Deferred revenue		—			635.0			22.7		358.8		—			1,016.5
Affiliate payable		29.4			254.2			7.3		89.0		(379.9	)		—
Current portion of long-term obligations		—			32.4			—		—		—			32.4
Total current liabilities		29.5			1,261.0			65.2		691.3		(380.0	)		1,667.0
Long-term debt		—			5,618.5			—		—		—			5,618.5
Deferred tax liabilities		—			72.5			5.0		14.1		(0.1	)		91.5
Affiliate payable		58.2			127.4			0.4		59.9		(245.9	)		—
Other long-term liabilities		—			72.4			7.3		130.1		—			209.8
Losses in excess of investment in subsidiaries		916.2			—			—		—		(916.2	)		—
Total liabilities		1,003.9			7,151.8			77.9		895.4		(1,542.2	)		7,586.8
Total Infor, Inc. stockholders’ equity (deficit)		(1,003.8	)		(916.2	)		220.8		1,588.8		(893.4	)		(1,003.8	)
Noncontrolling interests		—			—			—		9.5		—			9.5
Total stockholders’ equity (deficit)		(1,003.8	)		(916.2	)		220.8		1,598.3		(893.4	)		(994.3	)
Total liabilities and stockholders’ equity (deficit)	$	0.1		$	6,235.6		$	298.7	$	2,493.7	$	(2,435.6	)	$	6,592.5

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Condensed Consolidating Statements of Operations

	Three Months Ended July 31, 2017
(in millions)	Infor, Inc. (Parent)			Infor (US), Inc. (Subsidiary Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Software license fees	$	—		$	36.9		$	2.2		$	38.7		$	—		$	77.8
SaaS subscriptions		—			103.9			2.2			17.0			—			123.1
Software license fees and subscriptions		—			140.8			4.4			55.7			—			200.9
Product updates and support fees		—			203.7			8.7			138.8			—			351.2
Software revenues		—			344.5			13.1			194.5			—			552.1
Consulting services and other fees		—			101.7			5.0			100.9			—			207.6
Total revenues		—			446.2			18.1			295.4			—			759.7
Operating expenses:
Cost of software license fees		—			7.1			0.9			4.4			—			12.4
Cost of SaaS subscriptions		—			45.2			—			7.4			0.6			53.2
Cost of product updates and support fees		—			30.4			0.7			27.2			0.9			59.2
Cost of consulting services and other fees		—			77.0			4.2			81.7			1.8			164.7
Sales and marketing		—			77.2			7.5			45.1			1.3			131.1
Research and development		—			68.0			1.6			45.1			3.0			117.7
General and administrative		—			9.2			33.1			19.7			(7.6	)		54.4
Amortization of intangible assets and depreciation		—			45.6			1.7			12.2			—			59.5
Restructuring costs		—			0.3			0.4			4.0			—			4.7
Acquisition-related and other costs		—			6.3			0.5			0.6			—			7.4
Affiliate (income) expense, net		—			56.2			(40.1	)		(16.1	)		—			—
Total operating expenses		—			422.5			10.5			231.3			—			664.3
Income from operations		—			23.7			7.6			64.1			—			95.4
Other expense, net:
Interest expense, net		—			80.0			—			—			—			80.0
Affiliate interest (income) expense, net		—			1.1			—			(1.1	)		—			—
Other (income) expense, net		—			135.1			0.1			49.5			—			184.7
Total other expense, net		—			216.2			0.1			48.4			—			264.7
Income (loss) before income tax		—			(192.5	)		7.5			15.7			—			(169.3	)
Income tax provision (benefit)		—			3.8			(0.3	)		2.2			—			5.7
Equity in (earnings) loss of subsidiaries		175.0			(21.3	)		—			—			(153.7	)		—
Net income (loss)		(175.0	)		(175.0	)		7.8			13.5			153.7			(175.0	)
Net income (loss) attributable to noncontrolling interests		—			—			—			0.3			—			0.3
Net income (loss) attributable to Infor, Inc.	$	(175.0	)	$	(175.0	)	$	7.8		$	13.2		$	153.7		$	(175.3	)

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	Three Months Ended July 31, 2016
(in millions)	Infor, Inc. (Parent)			Infor (US), Inc. (Subsidiary Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues:
Software license fees	$	—		$	43.8		$	0.9		$	30.6		$	—		$	75.3
SaaS subscriptions		—			79.7			0.4			10.0			—			90.1
Software license fees and subscriptions		—			123.5			1.3			40.6			—			165.4
Product updates and support fees		—			207.0			8.4			137.7			—			353.1
Software revenues		—			330.5			9.7			178.3			—			518.5
Consulting services and other fees		—			82.7			4.7			95.7			—			183.1
Total revenues		—			413.2			14.4			274.0			—			701.6
Operating expenses:
Cost of software license fees		—			9.7			0.8			5.0			—			15.5
Cost of SaaS subscriptions		—			29.8			0.9			6.1			0.6			37.4
Cost of product updates and support fees		—			30.2			0.9			29.2			1.1			61.4
Cost of consulting services and other fees		—			58.1			3.8			77.7			2.3			141.9
Sales and marketing		—			74.6			7.1			41.8			1.4			124.9
Research and development		—			61.8			1.4			43.5			3.4			110.1
General and administrative		—			5.7			34.1			20.0			(8.8	)		51.0
Amortization of intangible assets and depreciation		—			41.8			2.1			13.9			—			57.8
Restructuring costs		—			0.7			(0.1	)		19.4			—			20.0
Acquisition-related and other costs		—			2.8			1.0			0.1			—			3.9
Affiliate (income) expense, net		—			61.9			(48.5	)		(13.4	)		—			—
Total operating expenses		—			377.1			3.5			243.3			—			623.9
Income (loss) from operations		—			36.1			10.9			30.7			—			77.7
Other expense, net:
Interest expense, net		—			80.3			—			—			—			80.3
Affiliate interest (income) expense, net		—			(9.1	)		—			9.1			—			—
Other (income) expense, net		—			(10.6	)		—			25.6			—			15.0
Total other expense, net		—			60.6			—			34.7			—			95.3
Income (loss) before income tax		—			(24.5	)		10.9			(4.0	)		—			(17.6	)
Income tax provision (benefit)		—			(4.3	)		1.4			10.7			—			7.8
Equity in (earnings) loss of subsidiaries		25.4			5.2			—			—			(30.6	)		—
Net income (loss)		(25.4	)		(25.4	)		9.5			(14.7	)		30.6			(25.4	)
Net income (loss) attributable to noncontrolling interests		—			(0.1	)		—			0.2			—			0.1
Net income (loss) attributable to Infor, Inc.	$	(25.4	)	$	(25.3	)	$	9.5		$	(14.9	)	$	30.6		$	(25.5	)

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Condensed Consolidating Statements of Comprehensive Income (Loss)

	Three Months Ended July 31, 2017
	Infor, Inc.			Infor (US), Inc.			Guarantor			Non-Guarantor					Total
(in millions)	(Parent)			(Subsidiary Issuer)			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net income (loss)	$	(175.0	)	$	(175.0	)	$	7.8		$	13.5		$	153.7	$	(175.0	)
Other comprehensive income (loss):
Unrealized gain (loss) on foreign currency translation, net of tax		—			0.1			—			167.5			—		167.6
Defined benefit plan funding status, net of tax		—			—			—			0.1			—		0.1
Unrealized gain (loss) on derivative instruments, net of tax		—			1.7			—			—			—		1.7
Total other comprehensive income (loss)		—			1.8			—			167.6			—		169.4
Comprehensive income (loss)		(175.0	)		(173.2	)		7.8			181.1			153.7		(5.6	)
Comprehensive income (loss) attributable to noncontrolling interests		—			—			—			0.2			—		0.2
Comprehensive income (loss) attributable to Infor, Inc.	$	(175.0	)	$	(173.2	)	$	7.8		$	180.9		$	153.7	$	(5.8	)
	Three Months Ended July 31, 2016
	Infor, Inc.			Infor (US), Inc.			Guarantor			Non-Guarantor					Total
(in millions)	(Parent)			(Subsidiary Issuer)			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net income (loss)	$	(25.4	)	$	(25.4	)	$	9.5		$	(14.7	)	$	30.6	$	(25.4	)
Other comprehensive income (loss):
Unrealized gain (loss) on foreign currency translation, net of tax		—			—			—			(38.6	)		—		(38.6	)
Defined benefit plan funding status, net of tax		—			—			—			1.4			—		1.4
Unrealized gain (loss) on derivative instruments, net of tax		—			1.5			—			—			—		1.5
Total other comprehensive income (loss)		—			1.5			—			(37.2	)		—		(35.7	)
Comprehensive income (loss)		(25.4	)		(23.9	)		9.5			(51.9	)		30.6		(61.1	)
Comprehensive income (loss) attributable to noncontrolling interests		—			(0.1	)		—			0.2			—		0.1
Comprehensive income (loss) attributable to Infor, Inc.	$	(25.4	)	$	(23.8	)	$	9.5		$	(52.1	)	$	30.6	$	(61.2	)
Condensed Consolidating Statements of Cash Flows
	Three Months Ended July 31, 2017
	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	$	—		$	14.2		$	2.0		$	(20.0	)	$	—	$	(3.8	)
Cash flows from investing activities:
Acquisitions, net of cash acquired		—			(70.7	)		—			1.6			—		(69.1	)
Change in restricted cash		—			—			—			2.5			—		2.5
Purchases of property, equipment and software		—			(16.6	)		(1.8	)		(6.1	)		—		(24.5	)
Net cash used in investing activities		—			(87.3	)		(1.8	)		(2.0	)		—		(91.1	)
Cash flows from financing activities:
Equity contributions received		—			75.0			—			—			—		75.0
Payments on capital lease obligations		—			(0.2	)		(0.2	)		(0.4	)		—		(0.8	)
Payments on long-term debt		—			(8.2	)		—			—			—		(8.2	)
Other		—			(0.4	)		—			(5.7	)		—		(6.1	)
Net cash provided by (used in) financing activities		—			66.2			(0.2	)		(6.1	)		—		59.9
Effect of exchange rate changes on cash and cash equivalents		—			—			—			7.1			—		7.1
Net increase (decrease) in cash and cash equivalents		—			(6.9	)		—			(21.0	)		—		(27.9	)
Cash and cash equivalents at the beginning of the period		—			88.1			—			217.7			—		305.8
Cash and cash equivalents at the end of the period	$	—		$	81.2		$	—		$	196.7		$	—	$	277.9

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	Three Months Ended July 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	$	—		$	32.7		$	1.7		$	(14.7)		$	—		$	19.7
Cash flows from investing activities:
Acquisitions, net of cash acquired		—			(125.6	)		—			(16.1	)		—			(141.7	)
Change in restricted cash		—			—			—			1.0			—			1.0
Purchases of property, equipment and software		—			(22.5	)		(1.7	)		(2.6	)		—			(26.8	)
Net cash used in investing activities		—			(148.1	)		(1.7	)		(17.7	)		—			(167.5	)
Cash flows from financing activities:
Equity contributions received		144.0			144.0			—			—			(144.0	)		144.0
Equity contributions made		(144.0	)		—			—			—			144.0			—
Dividends received		111.5			—			—			—			(111.5	)		—
Dividends paid		(111.5	)		(111.5	)		—			—			111.5			(111.5	)
Distributions under tax sharing arrangement		—			(9.1	)		—			—			—			(9.1	)
Payments on capital lease obligations		—			(0.6	)		—			(0.6	)		—			(1.2	)
Payments on long-term debt		—			(61.7	)		—			—			—			(61.7	)
(Payments) proceeds from affiliate within group		—			47.4			—			(47.4	)		—			—
Other		—			(0.4	)		—			—			—			(0.4	)
Net cash provided by (used in) financing activities		—			8.1			—			(48.0	)		—			(39.9	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			(6.8	)		—			(6.8	)
Net increase (decrease) in cash and cash equivalents		—			(107.3	)		—			(87.2	)		—			(194.5	)
Cash and cash equivalents at the beginning of the period		—			163.7			—			542.0			—			705.7
Cash and cash equivalents at the end of the period	$	—		$	56.4		$	—		$	454.8		$	—		$	511.2

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and result of operations for the fiscal period ended July 31, 2017, should be read in conjunction with the audited financial statements of Infor, Inc. for our fiscal year ended April 30, 2017, which are included in our Annual Report on Form 10-K, 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 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 many industries, including manufacturing, distribution, healthcare, public sector, automotive, service industries, equipment services, management and rental (ESM&R), consumer products and retail and hospitality industries. Our software and services offerings are often “mission critical” for many of our customers as they help automate and integrate critical business processes, which enable our customers to better manage their suppliers, partners, customers and employees, as well as their business operations generally. Our industry-specific approach distinguishes us from larger competing enterprise software vendors, whose primary focus is on software programs that are less specialized and more difficult to run in the cloud, and take more time and cost to tailor to 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), financial applications, human capital management (HCM), 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. 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 hosting services industry leader. Additionally, Infor offers the GT Nexus, Inc. (GT Nexus) supply chain network platform to connect companies with their suppliers, distributors, and 3PLs in a commerce cloud. We also provide ongoing support and maintenance services for our customers through our subscription-based maintenance and support programs. In addition to providing software products, we help our customers implement and use our applications more effectively through our consulting services.

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 16,430 employees worldwide and have offices in 45 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 three months of fiscal 2018, the Americas, EMEA and APAC regions generated approximately 62.5%, 28.7% and 8.8% 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, including in the EMEA and APAC regions.

42

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 2018 Acquisitions

Birst

On May 31, 2017, we acquired Birst, Inc. (Birst) for $71.0 million, net of cash acquired and including contingent consideration of $0.3 million recorded at the time of the purchase (the Birst Acquisition). The total purchase price may also include up to an additional $29.7 million if certain future performance conditions are met during the 2017 and 2018 calendar years. Based in San Francisco, California, Birst is a pioneer of cloud-native, business intelligence (BI), analytics, and data visualization with approximately 260 employees and more than 300 customers worldwide. Birst is a unique, comprehensive platform for sourcing, refining, and presenting standardized data insights at scale to drive business decisions. Birst connects the entire enterprise through a network of virtualized BI instances on top of a shared common analytical fabric. Birst spans ETL (extract, transform, and load), operational reports, dashboards, semantic understanding, visualization, smart discovery, and data blending to form a rich, simplified end-to-end BI suite in the cloud. The Birst Acquisition provides Infor a cloud BI platform which will significantly expand our analytical applications. The operating results related to this acquisition have been included in our Condensed Consolidated Financial Statements from the acquisition date.

Fiscal 2017 Acquisitions

In fiscal 2017, we completed five acquisitions.

Ciber

On March 31, 2017, we acquired certain assets of Ciber, Inc. (Ciber) related to Ciber’s business of selling and delivering professional services in connection with Infor’s software products, for $15.0 million (the Ciber Acquisition). Based in Greenwood Village, Colorado, Ciber is a longtime Infor services partner specializing in consulting and services around our HCM and financials products and has been recognized as an Infor Services Partner of the Year on multiple occasions. The Ciber Acquisition helped expand our professional service organization’s capabilities in these key solution areas by adding approximately 180 highly-skilled professionals.

Accentia

On March 13, 2017, we acquired Accentia Middle East (Accentia), a longtime Infor services partner and exclusive reseller and provider of consulting services across the Middle East, North Africa, and India, for $18.0 million, net of cash acquired (the Accentia Acquisition). Based in Cairo, Egypt, Accentia has approximately 80 employees, additional offices in Dubai (UAE), Jeddah (Saudi Arabia), Casablanca (Morocco), Tunis (Tunisia), and Pune (India), and customers in 17 countries across the region. Accentia has significant expertise in the local market and specializes in Infor M3, our comprehensive, centralized ERP solution for medium to large enterprises in the manufacturing, distribution, and equipment industries. The Accentia Acquisition significantly expanded Infor’s presence in the region.

43

Starmount

On August 2, 2016, we acquired Starmount, Inc. (Starmount) for $62.1 million, net of cash acquired and including contingent consideration of $9.7 million recorded at the time of the purchase (the Starmount Acquisition). Included in the purchase price is $23.4 million of deferred consideration, which reflects the present value of a deferred payment of $25.0 million due on the first anniversary of the closing date of the Starmount Acquisition. The total purchase price may also include up to an additional $10.3 million if certain future performance conditions are met. Based in Austin, Texas, Starmount is a modern store systems provider serving large and mid-market retailers. Starmount is an innovative mobile-first company providing point-of-sale, mobile shopping assistant, and store inventory management products along with a data-rich commerce hub to engage shoppers, streamline operations, and support consistent cross-channel customer interactions. The Starmount Acquisition enabled us to accelerate delivery of our Infor CloudSuite Retail suite of enterprise applications.

Predictix

On June 27, 2016, we acquired the remaining issued and outstanding capital stock in LogicBlox-Predictix Holdings, Inc. (Predictix) for approximately $125.5 million, net of cash acquired (the Predictix Acquisition), after having acquired a 16.67% equity interest in the third quarter of fiscal 2016 for $25.0 million. Based in Atlanta, Georgia, Predictix is a provider of cloud-native, predictive, and machine-learning solutions for retailers. The Predictix Acquisition complemented and further expanded offerings under Infor CloudSuite Retail, our suite of enterprise applications delivered in the cloud and designed for today’s retailing landscape.

Merit

On May 11, 2016, we acquired Merit Globe AS (Merit) for $23.7 million, net of cash acquired and including contingent consideration of $7.5 million recorded at the time of the purchase (the Merit Acquisition). The total purchase price may also include up to an additional $4.5 million if certain future performance conditions are met. Based in Norway, Merit is a consulting firm specializing in Infor M3 products and services. The Merit Acquisition brought decades of experience of Infor M3 consulting services that expanded and enhanced Infor’s professional services’ capabilities, particularly in the large and growing European Infor M3 customer base.

Financing Activities

Over the past few fiscal years, we have undertaken significant financing activities in conjunction with our acquisitions and the recapitalization and refinancing of our debt structure.

In the first quarter of fiscal 2018, we completed the Birst Acquisition. See Note 3, Acquisitions – Fiscal 2018—Birst. In conjunction with the Birst Acquisition, certain of our Sponsors made new capital contributions of $75.0 million which were used to fund the Birst Acquisition purchase consideration.

In fiscal 2017 we amended our Credit Agreement to refinance all of our then outstanding first lien term loans under our credit facilities at favorable interest rates and extended the applicable maturity dates.

In the first quarter of fiscal 2017, we completed the Predictix Acquisition. See Note 3, Acquisitions – Fiscal 2017 -Predictix. In conjunction with the Predictix Acquisition, certain of our Sponsors made new capital contributions to Infor Enterprise of $133.0 million, of which $77.0 million was contributed as equity to Infor, Inc. Investment funds affiliated with Golden Gate Capital and investment funds affiliated with Summit Partners contributed approximately $95.2 million and $37.8 million, respectively. The proceeds from the new equity contribution were used to fund the Predictix Acquisition purchase consideration.

In the first quarter of fiscal 2017, we paid dividends to Infor Software Parent, LLC (HoldCo) of $111.5 million and HoldCo made an equity contribution to Infor, Inc. of $67.0 million.

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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 and Adjusted EBITDA. 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 first quarter of fiscal 2018, the average exchange rates for the U.S. Dollar against the Euro and British Pound weakened by approximately 0.7% and strengthened by approximately 7.4%, respectively, as compared to the average exchange rates for the first quarter of fiscal 2017.

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 July 31,	to Currency			Constant					to Currency			Constant
2017 vs. 2016	Fluctuations			Currency		Total Change			Fluctuations			Currency			Total Change
Revenues:
Software license fees	$	0.2		$	2.3	$	2.5			0.2	%		3.1	%		3.3	%
SaaS subscriptions		(0.5	)		33.5		33.0			(0.6	)		37.2			36.6
Software license fees and subscriptions		(0.3	)		35.8		35.5			(0.1	)		21.6			21.5
Product updates and support fees		(2.3	)		0.4		(1.9	)		(0.6	)		0.1			(0.5	)
Software revenues		(2.6	)		36.2		33.6			(0.5	)		7.0			6.5
Consulting services and other fees		(1.3	)		25.8		24.5			(0.7	)		14.1			13.4
Total revenues	$	(3.9	)	$	62.0	$	58.1			(0.5	)%		8.8	%		8.3	%
Total operating expenses	$	(3.7	)	$	44.1	$	40.4			(0.6	)%		7.1	%		6.5	%

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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 Annual Report on Form 10-K. 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 three months of fiscal 2018.

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
	July 31,				Fiscal 2018 vs. 2017
(in millions, except percentages)	2017		2016		Actual			Constant Currency
Revenues:
Software license fees	$	77.8	$	75.3		3.3	%		3.1	%
SaaS subscriptions		123.1		90.1		36.6			37.2
Software license fees and subscriptions		200.9		165.4		21.5			21.6
Product updates and support fees		351.2		353.1		(0.5	)		0.1
Software revenues		552.1		518.5		6.5			7.0
Consulting services and other fees		207.6		183.1		13.4			14.1
Total revenues		759.7		701.6		8.3			8.8
Operating expenses:
Cost of software license fees		12.4		15.5		(20.0	)		(20.6	)
Cost of SaaS subscriptions		53.2		37.4		42.2			42.8
Cost of product updates and support fees		59.2		61.4		(3.6	)		(2.8	)
Cost of consulting services and other fees		164.7		141.9		16.1			16.5
Sales and marketing		131.1		124.9		5.0			5.7

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Research and development		117.7			110.1		6.9		7.5
General and administrative		54.4			51.0		6.7		7.8
Amortization of intangible assets and depreciation		59.5			57.8		2.9		3.6
Restructuring costs		4.7			20.0		(76.5	)	(77.0	)
Acquisition-related and other costs		7.4			3.9		89.7		89.7
Total operating expenses		664.3			623.9		6.5		7.1
Income from operations		95.4			77.7		22.8		23.0
Interest expense, net		80.0			80.3		(0.4	)	(0.4	)
Other (income) expense, net		184.7			15.0		NM		NM
Income (loss) before income tax		(169.3	)		(17.6	)	NM		NM
Income tax provision		5.7			7.8		(26.9	)	(28.2	)
Net income (loss)		(175.0	)		(25.4	)	NM		NM
Net loss attributable to noncontrolling interests		0.3			0.1		200.0		200.0
Net income (loss) attributable to Infor, Inc.	$	(175.3	)	$	(25.5	)	NM	%	NM	%

* NM - Percentage not meaningful

The discussion that follows relating to our results of operations for the comparable three-month periods ended July 31, 2017 and 2016, 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				Quarterly Change
	Ended July 31,				Fiscal 2018 vs. 2017
(in millions, except percentages)	2017		2016		Actual			Constant Currency
Revenues:
Software license fees	$	77.8	$	75.3		3.3	%		3.1	%
SaaS subscriptions		123.1		90.1		36.6			37.2
Software license fees and subscriptions		200.9		165.4		21.5			21.6
Product updates and support fees		351.2		353.1		(0.5	)		0.1
Software revenues		552.1		518.5		6.5			7.0
Consulting services and other fees		207.6		183.1		13.4			14.1
Total revenues	$	759.7	$	701.6		8.3	%		8.8	%

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.

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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, 2017, as provided in our Annual Report on Form 10-K, for a more complete description of our revenue recognition policy.

Total revenues increased 8.8% in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017, excluding the unfavorable foreign currency impact of 0.5%. On a constant currency basis, we realized growth across all of our geographic regions. We experienced significant growth in our SaaS subscriptions revenues, which increased 37.2%, as we expand our CloudSuite offerings and continue to shift our license mix to SaaS subscriptions. As a result of this shift, our SaaS subscriptions now account for over 61.0% of our total software license fees revenues. Our perpetual software license fees revenues increased 3.1%. Our product updates and support fees were relatively flat, up 0.1%, while our consulting services and other fees revenues were up 14.1%. The increase in total revenues reflects the inclusion of the results of operations of our recent acquisitions.

Software License Fees. Our software license fees consist of fees resulting from products licensed to our customers on a perpetual basis. 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 first quarter of fiscal 2018, software license fees increased by 3.1% compared to the first quarter of fiscal 2017, excluding the favorable foreign currency impact of 0.2%. At constant currency, the increase in perpetual license fees revenues was primarily due to a 4.2 point increase related to our EMEA region and a 3.6 point increase related to our APAC region. These increases were somewhat offset by lower perpetual software license fees in our Americas regions, which accounted for a decrease of 4.7 points. We continued to drive a shift in our mix of software license business from the sale of perpetual licenses to the sale of SaaS subscriptions, which negatively impacts license fees revenues. Revenue from perpetual licensing transactions is generally recorded up-front, while revenue from SaaS transactions is recognized over the term of the subscription contract.

SaaS Subscriptions. Our SaaS subscriptions consists of revenues related to granting customers access to our software products through our SaaS subscription offerings.

In the first quarter of fiscal 2018, SaaS subscriptions revenues increased by 37.2% compared to the first quarter of fiscal 2017, excluding the unfavorable foreign currency impact of 0.6%. At constant currency, we reported higher SaaS revenues in the first quarter of fiscal 2018 across all geographic regions, especially in the Americas, which accounted for an increase of approximately 24.4 points. In addition, our EMEA and APAC regions contributed increases of approximately 7.3 points and 5.5 points, respectively. We continued to see strong demand for our expanding CloudSuite portfolio, our cloud enterprise software specialized by industry, as well as our other subscription offerings. The increase in SaaS revenues in the current quarter also reflects the inclusion of the results of operations of our recent acquisitions, which accounted for 6.3 points of the increase.

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

Product updates and support fees were relatively flat with an increase of 0.1% in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017, excluding the unfavorable foreign currency impact of 0.6%. At constant currency, we experienced modest growth in our product updates and support fees in our EMEA and APAC regions, which more than offset a slight decrease in the Americas. The net increase was primarily the result of revenues related to new maintenance pull-through from new perpetual license transactions and price increases, offsetting customer attrition and the negative pressure coming from the shift in our software license business from the sale of perpetual licenses to the sale of SaaS subscriptions, which includes product updates and support. We continue to experience maintenance retention rates of over 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.

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Consulting services and other fees increased by 14.1%, excluding the unfavorable foreign currency impact of 0.7%, in the current quarter compared to the first quarter last year. At constant currency, we experienced an increase in consulting services revenues, which accounted for an increase of 13.7 points compared to the first quarter last year. This increase was experienced across all geographic regions; Americas accounted for an increase of 10.3 points, EMEA 2.7 points, and APAC 0.7 points. In addition, other fees revenues accounted for a 0.4 point increase, primarily in our APAC region. The increase in consulting services and other fees reflects the inclusion of the results of our recent acquisitions, which accounted for 6.9 points of the increase.

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 on-premise license agreements, SaaS subscription agreements, maintenance contracts and certain consulting arrangements, as discussed above. We had total deferred revenues of $1,082.8 million at July 31, 2017, compared to $1,051.0 million at April 30, 2017 and $972.1 million at July 31, 2016.

The following table sets forth the components of deferred revenue:

	July 31,		April 30,		July 31,
(in millions)	2017		2017		2016
Software license fees	$	9.7	$	10.8	$	8.6
SaaS subscriptions		253.7		237.7		150.3
Software license fees and subscriptions		263.4		248.5		158.9
Product updates and support fees		760.5		741.1		757.8
Consulting services and other fees		58.9		61.4		55.4
Total deferred revenue		1,082.8		1,051.0		972.1
Less: current portion		1,061.7		1,016.5		936.9
Deferred revenue - non-current	$	21.1	$	34.5	$	35.2

Within our fiscal year, 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 perpetual license customers in our maintenance programs and having our customers renew their maintenance agreements, primarily on an annual basis. Deferred SaaS subscription revenues are a growing part of our deferred software license fees and subscriptions balance and are less cyclical than the balance of our deferred product updates and support fees revenues.

Operating Expenses

	Three Months Ended				Quarterly Change
	July 31,				Fiscal 2018 vs. 2017
(in millions, except percentages)	2017		2016		Actual			Constant Currency
Operating expenses:
Cost of software license fees	$	12.4	$	15.5		(20.0	)%		(20.6	)%
Cost of SaaS subscriptions		53.2		37.4		42.2			42.8
Cost of product updates and support fees		59.2		61.4		(3.6	)		(2.8	)
Cost of consulting services and other fees		164.7		141.9		16.1			16.5
Sales and marketing		131.1		124.9		5.0			5.7
Research and development		117.7		110.1		6.9			7.5
General and administrative		54.4		51.0		6.7			7.8
Amortization of intangible assets and depreciation		59.5		57.8		2.9			3.6
Restructuring costs		4.7		20.0		(76.5	)		(77.0	)
Acquisition-related and other costs		7.4		3.9		89.7			89.7
Total operating expenses	$	664.3	$	623.9		6.5	%		7.1	%

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Cost of Software License Fees. Cost of software license fees reflects costs related to the sale of our perpetual software licenses including royalties to third parties, channel partner commissions and other software delivery expenses, 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 is generally higher, as a percentage of revenues, when we sell products of third-party vendors. As a result, software license fees 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 decreased by 20.6%, excluding the unfavorable foreign currency impact of 0.6%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. At constant currency, this decrease was primarily due to a 21.7 point decrease related to lower third-party royalties and a 0.7 point decrease related to lower channel partner commissions due to the mix of license fees. These decreases were somewhat offset by a 1.8 point increase related to higher other costs.

Cost of SaaS Subscriptions. Cost of SaaS subscriptions reflects costs related to our SaaS offerings including salaries, employee benefits, vendor costs associated with providing our subscription offerings, and applicable overhead costs.

Cost of SaaS subscriptions increased by 42.8%, excluding the favorable foreign currency impact of 0.6%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. At constant currency, this increase in SaaS costs was in-line with our higher SaaS subscriptions revenues in the first quarter of fiscal 2018, including an increase of 18.7 points due to higher employee-related and overhead costs, primarily as a result of 27.5% higher SaaS headcount in the current quarter compared to last year, a 16.3 point increase related to higher hosting costs, and an increase of 7.8 points related to higher other costs of providing our SaaS subscriptions.

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, share-based compensation expense, and the overhead costs of providing our customers product updates and support.

Cost of product updates and support fees decreased by 2.8%, excluding the favorable foreign currency impact of 0.8%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. At constant currency, the decrease was primarily due to a 2.1 point decrease in employee-related support and overhead costs, a 0.7 point decrease related to lower channel partner commissions and 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, share-based compensation expense, 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 16.5%, excluding the favorable foreign currency impact of 0.4%, in the current quarter compared to the first quarter of fiscal 2017. At constant currency, cost of consulting services increased 12.2 points due to higher employee-related and overhead costs due to 11.4% higher headcount in our professional services organizations in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. The increase in our professional services headcount includes the employees of our recent acquisitions. Cost of consulting services also increased 3.0 points due to higher billable contractor costs and a 1.3 points due to an increase in 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, share-based compensation expense, and the costs of Inforum, our customer event.

Sales and marketing expenses increased by 5.7%, excluding the favorable foreign currency impact of 0.7%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. On a constant currency basis, the increase in sales and marketing expenses was primarily due to an increase of 7.4 points in higher employee-related sales and overhead costs, mostly due to 6.4% higher net headcount in our sales and marketing organizations in the current quarter compared to last year, and a net 0.5 point increase due to higher other sales costs. These increases were somewhat offset by a 1.1 point decrease due to lower marketing program costs in the current quarter, a 0.6 point decrease due to lower professional fees and a 0.5 point decrease due to lower share-based compensation expense.

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Research and Development. Research and development expenses consist primarily of personnel-related expenditures, third-party consulting and professional services, and overhead costs related to our research and development function.

Research and development expenses increased by 7.5%, excluding the favorable foreign currency impact of 0.6%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. On a constant currency basis, the increase in research and development expenses was primarily due to a 6.3 point increase in employee-related sales and overhead costs due to 8.2% higher headcount in our development organization in the current quarter compared to last year, a 1.2 point increase related to lower capitalization of software development costs in fiscal 2018 compared to fiscal 2017, and 0.6 points related to higher professional fees. These increases were somewhat offset by a 0.6 points related to a decrease in other development costs.

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

General and administrative expenses increased by 7.8%, excluding the favorable foreign currency impact of 1.1%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. On a constant currency basis, the increase in general and administrative expenses was primarily due to an increase of 4.4 points due to higher legal settlement costs incurred in fiscal 2018 compared to fiscal 2017, 2.3 points related to higher consulting and professional fees, a 2.1 point increase in employee-related costs, 1.9 points related to overhead allocations, and a net increase of 1.9 points in other general and administrative expenses. These increases were somewhat offset by a 4.8 point decrease due to lower share-based compensation in the quarter compared to last year.

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, costs capitalized for internal use software, as well as leasehold improvements.

Amortization of intangible assets and depreciation increased by 3.6%, excluding the favorable foreign currency impact of 0.7%, in the first quarter of fiscal 2018 compared with the first quarter of fiscal 2017. At constant currency, the increase resulted primarily from higher amortization expense related to intangible assets and depreciation of fixed assets recorded as part of our recent acquisitions, and depreciation of costs capitalized for our internal use software. These increases were somewhat offset by lower amortization and depreciation related to certain of our assets being fully amortized or depreciated in fiscal 2017 with no corresponding expense recorded in fiscal 2018.

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 $4.7 million and $20.0 million in the first quarter of fiscal 2018 and 2017, respectively, related to our various restructuring actions.

The restructuring charges recorded in the first quarter of fiscal 2018 included approximately $4.2 million related to employee severance costs and $0.5 million in accruals for costs related to facilities to be exited. The employee severance costs relate primarily to personnel actions taken in our professional services and sales organizations in our EMEA region. The facilities charges relate to exiting or consolidation of space in facilities primarily in the Americas region. The restructuring charges recorded in the first quarter of fiscal 2017 related primarily to employee severance costs for personnel actions taken in our EMEA region affecting all functional areas.

Acquisition-Related and Other Costs. Acquisition-related and other costs include transaction and integration costs related to our acquisitions, including professional services fees, certain employee costs related to transitional and certain other employees, as well as changes to the estimated fair value of contingent consideration liabilities related to our acquisitions. Acquisition-related and other costs also include certain costs incurred in financing our acquisitions, reorganizing our operations, and other debt and equity financing activities.

In the first quarter of fiscal 2018, we recorded acquisition-related and other costs of $7.4 million, an increase of approximately $3.5 million compared to $3.9 million of acquisition-related and other costs in the first quarter of fiscal 2017.

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For the first quarter of fiscal 2018, acquisition-related and other costs included $6.7 million for costs related to our recent acquisitions, primarily the Birst Acquisition, $0.6 million adjustments to the estimated fair value of our contingent consideration liabilities, as well as $0.1 million in other costs. The fiscal 2017 first quarter costs were primarily for the Predictix Acquisition as well as the GT Nexus Acquisition and the Merit Acquisition.

Non-Operating Income and Expenses 

	Three Months Ended				Quarterly Change
	July 31,				Fiscal 2018 vs. 2017
(in millions, except percentages)	2017		2016		Actual			Constant Currency
Interest expense, net	$	80.0	$	80.3		(0.4	)%		(0.4	)%
Other (income) expense, net		184.7		15.0		NM			NM
Total non-operating expenses	$	264.7	$	95.3		177.8	%		177.6	%

* 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 $0.3 million, or 0.4%, to $80.0 million in the quarter ended July 31, 2017, compared to $80.3 million in the quarter ended July 31, 2016. The quarter-over-quarter decrease in our interest expense was primarily due to $1.4 million lower amortization of deferred financing fees and net debt discounts mostly offset by a $1.1 million increase in interest expense.

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 $184.7 million in the first quarter of fiscal 2018 compared to $15.0 million net expense in the first quarter of fiscal 2017. The change in other (income) expense, net was primarily due to fluctuations in foreign currency exchange rates primarily related to the strengthening of the Euro against the U.S. Dollar and the requisite revaluing of our debt denominated in Euros.

Income Tax Provision

	Three Months Ended						Quarterly Change
	July 31,						Fiscal 2018 vs. 2017
(in millions, except percentages)	2017			2016			Actual			Constant Currency
Income tax provision	$	5.7		$	7.8			(26.9	)%		(28.2	)%
Effective income tax rate		(3.4	)%		(44.3	)%

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.

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The change in our effective tax rate for the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was primarily driven by an increase in foreign based earnings subject to taxation, an increase in U.S. tax losses subject to a full valuation allowance, and a reduction in the amount of unrecognized tax benefits.

During the first quarter of fiscal 2018, we continued to examine various tax structuring alternatives that may be executed during fiscal 2018, which could provide additional positive evidence in our valuation allowance considerations that may result in further foreign valuation releases. Additionally, certain U.S. and foreign valuation allowances could be impacted during fiscal 2018 as a result of the KED investment that was consummated on February 17, 2017.

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 certain non-GAAP financial measures, including non-GAAP revenues, earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA as defined in the indentures that govern our senior notes, and Adjusted EBITDA margin. We believe our presentation of these non-GAAP financial measures provide 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. In addition, Adjusted EBITDA is a key measurement of our operating performance as per the financial covenants in our debt agreements. These measures are a useful tool for investors because 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 these non-GAAP measures are useful to users because they provide supplemental information that research analysts, investment bankers and lenders frequently use to analyze software companies including those that have recently made significant acquisitions. Additionally, certain of these 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				Quarterly Change
	July 31,				Fiscal 2018 vs. 2017
(in millions, except percentages)	2017		2016		Actual			Constant Currency
GAAP revenues	$	759.7	$	701.6		8.3	%		8.8	%
Non-GAAP revenue adjustments - purchase accounting impact:
Software license fees		1.4		—
SaaS subscriptions		1.2		0.7
Product updates and support fees		0.5		0.3
Consulting services and other fees		0.2		—
Total non-GAAP revenue adjustments		3.3		1.0
Non-GAAP revenues	$	763.0	$	702.6		8.6	%		9.2	%

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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 presentation of non-GAAP revenues provides investors and other external users a helpful alternative view of our operations.

Adjusted EBITDA

The following table presents the reconciliation of our GAAP net income attributable to Infor as reported to Adjusted EBITDA for the periods indicated:

	Three Months Ended						Quarterly Change
	July 31,						Fiscal 2018 vs. 2017
(in millions, except percentages)	2017			2016			Actual			Constant Currency
GAAP net income (loss)attributable to Infor, Inc.	$	(175.3	)	$	(25.5	)		NM	%		NM	%
Interest expense, net (1)		80.3			80.6
Income tax provision (2)		7.2			9.2
Amortization of intangible assets and depreciation		59.5			57.8
Purchase accounting impact revenues/costs, net		3.3			1.0
Share-based compensation		0.2			3.5
Acquisition-related and other costs		7.4			3.9
Restructuring costs		4.7			20.0
Foreign currency (gain) loss		184.7			14.8
Other (3)		13.4			21.0
Adjusted EBITDA	$	185.4		$	186.3			(0.5	)%		(0.3	)%
Adjusted EBITDA margin (4)		24.3	%		26.5	%

* NM - Percentage not meaningful

(1) Includes other bank and financing fees associated with our debt as defined by our debt agreements.

(2) Includes income tax provision plus certain other taxes as defined by our debt agreements.

(3) Includes anticipated cost savings related to specific cost saving actions, operating expense reductions and the integration of recent acquisitions, pre-acquisition adjusted EBITDA of recent acquisitions, costs incurred related to sponsor management fees, and other non-recurring costs that are allowed to be added back under the provisions of our debt agreements.

(4) Adjusted EBITDA margin is defined as the ratio of Adjusted EBITDA to Non-GAAP revenues.

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The non-GAAP adjustments we make to our reported GAAP net income (loss) attributable to Infor to get to Adjusted EBITDA include certain non-operating expenses and non-cash charges that are allowed to be added back under the provisions of our debt agreements. These adjustments eliminate the impact of items that we do not consider indicative of our core operating performance or that may vary from period to period without any correlation to the results of our core operations. We believe the presentation of Adjusted EBITDA provides investors and other external users a supplemental measure of our performance and a helpful alternative view of our operations. In addition, the reporting of Adjusted EBITDA is a requirement of our debt agreements.

While Adjusted EBITDA is a key metric that is frequently used by our lenders, analysts and others in their evaluation of our performance, it has limitations as an analytical tool and should not be used in isolation or as a substitute for analysis of our GAAP results as reported. For example, Adjusted EBITDA excludes a number of significant cash and non-cash recurring items including but not limited to interest paid on our debt, income tax payments, the amortization of intangible assets and depreciation of capitalized tangible assets used in generating revenues in our business, and share-based compensation expense.

Liquidity and Capital Resources

	Three Months Ended
(in millions, except percentages)	July 31,
Cash Flows	2017			2016			Change
Cash provided by (used in):
Operating activities	$	(3.8	)	$	19.7			NM	%
Investing activities		(91.1	)		(167.5	)		(45.6	)
Financing activities		59.9			(39.9	)		NM
Effect of exchange rate changes on cash and cash equivalents		7.1			(6.8	)		NM
Net change in cash and cash equivalents	$	(27.9	)	$	(194.5	)		(85.7	)%

* NM - Percentage not meaningful

(in millions, except percentages)	July 31,			April 30,
Capital Resources	2017			2017			Change
Working capital deficit	$	(679.6	)	$	(665.8	)		2.1	%
Cash and cash equivalents	$	277.9		$	305.8			(9.1	)%

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 SaaS subscription arrangements, new perpetual software license sales, 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 and expand our customer base, which could have a material effect on our capital resources.

In the first quarter of fiscal 2018, we completed the Birst Acquisition for $71.0 million, net of cash acquired and including contingent consideration of $0.3 million recorded at the time of the purchase. In the first quarter of fiscal 2017, we completed the Predictix Acquisition for approximately $125.5, net of cash acquired and the Merit Acquisition for $23.7 million, net of cash acquired and including contingent consideration of $7.5 million recorded at the time of the purchase. 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 Annual Report on Form 10-K, for a further description of those criteria.

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We believe that cash flows from operations, together with our cash and cash equivalents, and 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 2018 and for the next 12 months. 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 used in operating activities for the three-month period ended July 31, 2017, was $3.8 million. Our net loss adjusted for non-cash items provided $83.2 million in cash and changes in operating assets and liabilities used cash of $87.0 million. The uses of cash were primarily from a $134.7 million decrease in accounts payable, accrued expenses and other liabilities due to the timing of payments, primarily vendor charges, professional fees, interest payments and accrued bonuses and commissions. These uses of cash were partially offset, primarily by a $50.3 million decrease in accounts receivable, net, primarily due to collections of our strong fourth quarter fiscal 2017 sales.

Net cash provided by operating activities for the three-month period ended July 31, 2016, was $19.7 million. Our net loss adjusted for non-cash items provided $63.0 million in cash and changes in operating assets and liabilities used cash of $43.3 million. The uses of cash were from a $101.6 million decrease in accounts payable and accrued expenses and other liabilities primarily due to the timing of interest payments and vendor payments. These uses of cash were partially offset, primarily by a $43.7 million decrease in accounts receivable, net, primarily in trade accounts receivable and a $7.4 million increase in deferred revenue largely due to the timing of maintenance renewals, as a significant portion of our U.S. maintenance renews on May 31.

Cash Flows from Investing Activities

Net cash used in investing activities was $91.1 million in the three-month period ended July 31, 2017. The primary uses of cash were $69.1 million net cash used for acquisitions, primarily related to the Birst Acquisition, and $24.5 million used to purchase property, equipment and software, including capitalization of internal and external software development costs.

Net cash used in investing activities was $167.5 million in the three-month period ended July 31, 2016. The primary uses of cash were $141.7 million net cash used for the Predictix Acquisition and the Merit Acquisition, and $26.8 million used to purchase property, equipment and software including capitalization of internal and external software development costs.

Cash Flows from Financing Activities

Net cash provided by financing activities was $59.9 million in the three-month period ended July 31, 2017. The primary source of cash was $75.0 million in cash proceeds from equity contributions from certain of our Sponsors, which was partially offset by $8.2 million in debt payments and $5.5 million in payments of contingent consideration liabilities.

Net cash used in financing activities was $39.9 million in the three-month period ended July 31, 2016. The primary uses of cash were $111.5 million in dividend payments and $61.7 million in debt repayments. This was partially offset by $144.0 million in additional cash proceeds from equity transactions related to our Sponsors and our parent holding company.

Effect of Exchange Rate Changes

For the three months ended July 31, 2017, changes in foreign currency exchange rates resulted in a $7.1 million increase in our cash and cash equivalents. Exchange rate changes decreased our cash and cash equivalents by $6.8 million during the three months ended July 31, 2016.

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Working Capital Deficit

Our working capital deficit, defined as current assets less current liabilities, was $679.6 million at July 31, 2017, compared to $665.8 million at April 30, 2017. At July 31, 2017, our cash decreased by $27.9 million compared to the balance at April 30, 2017. 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 three months of our fiscal 2018, the most significant changes in our current assets aside from cash were a $36.3 million decrease in deferred tax assets due to the first quarter of fiscal 2018 adoption of the FASB guidance related to the presentation of deferred taxes on a prospective basis, and a $33.0 million decrease in accounts receivable. During this period, the most significant changes in our current liabilities were a $92.5 million decrease in accrued expenses, a $45.2 million increase in deferred revenue, primarily due to the timing of maintenance renewals, and a $23.8 million decrease in accounts payable.

Cash and Cash Equivalents

As of July 31, 2017, we had $277.9 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 July 31, 2017, $78.6 million of our unrestricted cash and cash equivalents are held in the U.S. The remaining $199.3 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:

	July 31, 2017									April 30, 2017
	Principal			Net			Contractual			Principal			Net			Contractual
(in millions)	Amount			Amount (1)			Rate			Amount			Amount (1)			Rate
First lien Term B-6 due February 1, 2022	$	2,141.7		$	2,082.6			3.90	%	$	2,147.1		$	2,084.9			3.90	%
First lien Euro Term B-1 due February 1, 2022		1,180.6			1,174.0			3.75	%		1,089.7			1,082.8			3.75	%
5.75% first lien senior secured notes due August 15, 2020		500.0			486.1			5.75	%		500.0			485.0			5.75	%
6.5% senior notes due May 15, 2022		1,630.0			1,621.5			6.50	%		1,630.0			1,621.1			6.50	%
5.75% senior notes due May 15, 2022		414.3			410.1			5.75	%		381.4			377.1			5.75	%
Deferred financing fees, debt discounts and premiums, net		(92.3	)		—						(97.3	)		—
Total long-term debt		5,774.3			5,774.3						5,650.9			5,650.9
Less: current portion		(33.3	)		(33.3	)					(32.4	)		(32.4	)
Total long-term debt - non-current	$	5,741.0		$	5,741.0					$	5,618.5		$	5,618.5

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

As of July 31, 2017, 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

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, 2017, included in our Annual Report on Form 10-K, for a description of each amendment (First Amendment through Eighth Amendment).

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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 $120.0 million. We have made no draws against the Revolver and no amounts are currently outstanding. However, $10.3 million of letters of credit have reduced the amount available under the Revolver to $109.7 million as of July 31, 2017. Pursuant to the Credit Agreement, there is an undrawn line fee of 0.50% and the Revolver matures on April 5, 2019. 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 February 6, 2017, we entered into a $2,147.1 million term loan (the Tranche B-6 Term Loan). Interest on the Tranche B-6 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-6 Term Loan matures on February 1, 2022.

On February 6, 2017, we entered into a €1,000.0 million term loan (the Euro Tranche B-1 Term Loan). Interest on the Euro Tranche B-1 Term Loan is based on a fluctuating rate of interest determined by reference to an Adjusted LIBOR rate, plus a margin of 2.75% per annum, with an Adjusted LIBOR floor of 1.0%. The Euro Tranche B-1 Term Loan matures on February 1, 2022.

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 6.5% and 5.75% senior notes (the Senior Notes) include $1,630.0 million in aggregate principal amount of our 6.5% Senior Notes and €350.0 million in aggregate principal amount of our 5.75% 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.

First Lien Senior Secured Notes

Our 5.75% first lien senior secured notes (the Senior Secured Notes) include $500.0 million in aggregate principal 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 mature on August 15, 2020. 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.

Unrestricted Subsidiary

We have designated LogicBlox, Inc. (LogicBlox), a wholly-owned subsidiary of Infor (US), Inc., as an “Unrestricted Subsidiary” as defined under the provisions of the Credit Agreement and the indentures governing our Senior Notes and Senior Secured Notes. The financial position and results of operations of LogicBlox are included in our Condensed Consolidated Financial Statements. As required by the Credit Agreement and the indentures governing the 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.

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LogicBlox’s financial position as of July 31, 2017, and its results of operations for the first three months of fiscal 2018 were not significant to our consolidated financial position and results of operations as of and for the period ended July 31, 2017. LogicBlox held assets totaling $6.7 million, primarily intangible assets and goodwill, as of July 31, 2017. For the three months ended July 31, 2017, LogicBlox recorded revenues of $0.1 million and a loss from operations of $1.4 million. In addition, its adjusted EBITDA for the first three months of fiscal 2018 was a loss of $1.0 million, as calculated based on the provisions of the Credit Agreement.

Restricted Cash

We had approximately $13.7 million of restricted cash as of July 31, 2017, of which approximately $0.8 million and $12.9 million have been reflected in other current assets and other assets on our Condensed Consolidated Balance Sheets, respectively.

We had approximately $13.3 million of restricted cash as of April 30, 2017, of which approximately $1.1 million and $12.2 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 Annual Report on Form 10-K, our total contractual obligations at April 30, 2017 were $7,806.4 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 July 31, 2017. At July 31, 2017, we had recorded a liability for uncertain tax positions of $151.7 million. Over the next 12 months, we expect a net reduction of approximately $46.8 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. 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. 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.

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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. As of July 31, 2017, a 10% adverse change in the Euro exchange rate versus the U.S. Dollar would have increased our Euro denominated debt balances by approximately $159.5 million and resulted in the recognition of a corresponding foreign currency loss within other (income) expense, net, in our Condensed Consolidated Statements of Operations.

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 43.5% and 42.9% of our total revenues for the first quarter of fiscal 2018 and 2017, respectively. International cost of revenues and operating expenses accounted for 38.3% and 42.1% of our total cost of revenues and operating expenses for the first quarter of fiscal 2018 and 2017, respectively.

As of July 31, 2017 and April 30, 2017, 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 5.0% and 4.6%, 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 1.4% as of July 31, 2017 and April 30, 2017, 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 0.7% and 0.6% as of July 31, 2017 and April 30, 2017, respectively.

Interest Rates

We face exposure to changes in interest rates primarily relating to our variable rate long-term debt. As of July 31, 2017 and April 30, 2017, we had $5.8 billion and $5.7 billion, respectively, outstanding under our debt agreements. Pursuant to the terms of certain of the debt agreements related to our term loans we had in place at July 31, 2017, interest expense is calculated using the LIBOR or the EURIBOR rates, depending on the debt agreement. In addition, these debt agreements have LIBOR or EURIBOR floors of 1.00%. On July 31, 2017, the three-month LIBOR and EURIBOR rates were 1.31% and -0.33%, respectively. An increase in the three-month LIBOR interest rate of 50 basis points over the July 31, 2017 rate would lead to an estimated increase of approximately $1.4 million in our total monthly interest expense as such a change would be above the applicable LIBOR floor.

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 28.4% 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 July 31, 2017.

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.

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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 July 31, 2017, 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 Annual Report on Form 10-K, in Part I, Item 1A, Risk Factors. There have been no material changes to our risk factors since the filing of our Annual Report on Form 10-K. 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

(c) 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 63 of this report

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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: September 14, 2017

INFOR, INC.
By:	/s/ KEVIN SAMUELSON
	Kevin Samuelson
	Chief Financial Officer
	(principal financial officer)

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Exhibit Index

Exhibit Number	Description of Documents
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 – Kevin Samuelson
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 – Kevin Samuelson
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

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 July 31, 2017, formatted in eXtensible Business Reporting Language (XBRL) - furnished not filed herewith:

i. Condensed Consolidated Balance Sheets at July 31, 2017 and April 30, 2017,

ii. Condensed Consolidated Statements of Operations for the three months ended July 31, 2017 and 2016,

iii. Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended July 31, 2017 and 2016,

iv. Condensed Consolidated Statements of Cash Flows for the three months ended July 31, 2017 and 2016, and

v. Notes to Condensed Consolidated Financial Statements.

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