Lender Update December 13, 2018
Safe Harbor Message Certain statements contained in this presentation may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, statements about Infor s future financial performance, which may include expected GAAP and non-gaap financial measures, the continuation of historical trends, the sufficiency of our sources of capital for future needs, the effects of acquisitions, and the expected impact of recently issued accounting pronouncements. These statements are based on certain assumptions that we have made as of the date of this presentation and 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, 2018, filed with the SEC on June 28, 2018. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this presentation represent the Company's current views. The Company undertakes no duty to update any forward-looking statements that may be contained in this presentation. Copyright 2018. Infor. All Rights Reserved. (2)
Q2 Fiscal 2019 Three months ended October 31, 2018 Copyright 2018. Infor. All Rights Reserved. (3)
Executive Summary Q219 total pro forma revenue was $799.9M On a constant currency basis, Q219 total pro forma revenue was $811.7M, an increase of 4.2% from Q218 Increase was the result of higher SaaS subscription revenues Q219 pro forma software license fees and subscriptions revenue was $230.4M On a constant currency basis, Q219 pro forma software license fees and subscriptions revenue was $232.7M, an increase of 12.0% from Q218 SaaS revenues increased 21.3% offsetting perpetual license revenue decrease of 4.7% Q219 pro forma product update and support revenue was $348.6M On a constant currency basis, Q219 pro forma product update and support revenue was $353.4M, a decrease of 0.6% from Q218 Retention rates continue to perform well, partially offsetting decreases resulting from UpgradeX conversions and lower perpetual license bookings levels over the past year Q219 pro forma consulting services and other fees revenue was $220.9M On a constant currency basis, Q219 pro forma consulting services and other revenue was $225.6M, an increase of 4.6% from Q218 Consulting services increased in our EMEA and APAC geographies somewhat offset by a decrease in the Americas Other fees revenue also increased due to the timing of Inforum in Q2 this year vs Q1 last year Q219 Adjusted Pro Forma EBITDA was $199.0M On a constant currency basis, Q219 Adjusted Pro Forma EBITDA was $200.8M (24.7% margin), an increase of 0.8% from Q218 Cash balance at the end of Q219 was $284.1M Timing of our maintenance renewal cycle impacted our cash balance in Q219 Copyright 2018. Infor. All Rights Reserved. (4)
Q219 v. Q218 P&L: GAAP Actual Results Currency-adjusted Results $ in millions Actual Actual % Currency Adjusted Actual % Q219 Q218 Variance Variance Impact (1) Q219 Q218 Variance Variance Revenue SaaS subscriptions $ 160.5 $ 132.1 $ 28.4 21.5% $ (1.1) $ 161.6 $ 132.1 $ 29.5 22.3% Software license fees 69.4 72.9 (3.5) -4.8% (1.2) 70.6 72.9 (2.3) -3.2% Software subscriptions and license fees 229.9 205.0 24.9 12.1% (2.3) 232.2 205.0 27.2 13.3% Product updates and support fees 348.6 355.1 (6.5) -1.8% (4.8) 353.4 355.1 (1.7) -0.5% Software revenues 578.5 560.1 18.4 3.3% (7.1) 585.6 560.1 25.5 4.6% Consulting services and other fees 220.9 215.3 5.6 2.6% (4.7) 225.6 215.3 10.3 4.8% Total revenues 799.4 775.4 24.0 3.1% (11.8) 811.2 775.4 35.8 4.6% Expenses Cost of SaaS subscriptions 71.1 58.3 12.8 22.0% (0.4) 71.5 58.3 13.2 22.6% Cost of software license fees 10.8 9.4 1.4 14.9% (0.2) 11.0 9.4 1.6 17.0% Cost of product updates and support fees 57.9 60.9 (3.0) -4.9% (1.0) 58.9 60.9 (2.0) -3.3% Cost of consulting services and other fees 173.9 171.7 2.2 1.3% (3.3) 177.2 171.7 5.5 3.2% Sales and marketing 130.3 139.2 (8.9) -6.4% (1.5) 131.8 139.2 (7.4) -5.3% Research and development 124.8 122.5 2.3 1.9% (2.6) 127.4 122.5 4.9 4.0% General and administrative 57.4 70.1 (12.7) -18.1% (1.7) 59.1 70.1 (11.0) -15.7% Amortization of intangible assets and depreciation 52.9 51.5 1.4 2.7% (0.5) 53.4 51.5 1.9 3.7% Restructuring costs 5.7 5.5 0.2 3.6% (0.1) 5.8 5.5 0.3 5.5% Acquisition-related and other costs 4.3 5.4 (1.1) -20.4% - 4.3 5.4 (1.1) -20.4% Total operating expenses 689.1 694.5 (5.4) -0.8% (11.3) 700.4 694.5 5.9 0.8% Income from operations 110.3 80.9 29.4 36.3% (0.5) 110.8 80.9 29.9 37.0% Interest expense, net 81.1 80.5 0.6 0.7% - 81.1 80.5 0.6 0.7% Other (income) expense, net (59.7) (49.3) (10.4) 21.1% 0.3 (60.0) (49.3) (10.7) 21.7% Income before income taxes 88.9 49.7 39.2 78.9% (0.8) 89.7 49.7 40.0 80.5% Income tax provision 9.5 25.2 (15.7) -62.3% (0.1) 9.6 25.2 (15.6) -61.9% Net income 79.4 24.5 54.9 224.1% (0.7) 80.1 24.5 55.6 226.9% Noncontrolling interests 0.5 0.3 0.2 66.7% (0.1) 0.6 0.3 0.3 100.0% Net income attributable to Infor $ 78.9 $ 24.2 $ 54.7 226.0% $ (0.6) $ 79.5 $ 24.2 $ 55.3 228.5% (1) Currency impact is computed by converting actual results using Q218 exchange rates Copyright 2018. Infor. All Rights Reserved. (5)
Q219 v. Q218 P&L: Pro Forma Pro Forma Results Currency-adjusted Results $ in millions Actual Actual % Currency Adjusted Actual % Q219 (2) Q218 (2) Variance Variance Impact (1) Q219 (2) Q218 (2) Variance Variance Revenue SaaS subscriptions $ 160.8 $ 133.5 $ 27.3 20.4% $ (1.1) $ 161.9 $ 133.5 $ 28.4 21.3% Software license fees 69.6 74.3 (4.7) -6.3% (1.2) 70.8 74.3 (3.5) -4.7% Software subscriptions and license fees 230.4 207.8 22.6 10.9% (2.3) 232.7 207.8 24.9 12.0% Product updates and support fees 348.6 355.5 (6.9) -1.9% (4.8) 353.4 355.5 (2.1) -0.6% Software revenues 579.0 563.3 15.7 2.8% (7.1) 586.1 563.3 22.8 4.0% Consulting services and other fees 220.9 215.7 5.2 2.4% (4.7) 225.6 215.7 9.9 4.6% Total revenues 799.9 779.0 20.9 2.7% (11.8) 811.7 779.0 32.7 4.2% Expenses Cost of SaaS subscriptions 71.1 58.0 13.1 22.6% (0.3) 71.4 58.0 13.4 23.1% Cost of software license fees 10.8 9.4 1.4 14.9% (0.2) 11.0 9.4 1.6 17.0% Cost of product updates and support fees 57.8 59.5 (1.7) -2.9% (1.1) 58.9 59.5 (0.6) -1.0% Cost of consulting services and other fees 173.8 170.0 3.8 2.2% (3.3) 177.1 170.0 7.1 4.2% Sales and marketing costs 129.5 124.4 5.1 4.1% (1.5) 131.0 124.4 6.6 5.3% Research and development 124.3 117.9 6.4 5.4% (2.6) 126.9 117.9 9.0 7.6% General and administrative 56.3 57.3 (1.0) -1.7% (1.6) 57.9 57.3 0.6 1.0% Amortization of intangible assets and depreciation 52.9 51.5 1.4 2.7% (0.5) 53.4 51.5 1.9 3.7% Restructuring costs 5.7 5.5 0.2 3.6% (0.1) 5.8 5.5 0.3 5.5% Acquisition related and other costs 4.3 5.4 (1.1) -20.4% - 4.3 5.4 (1.1) -20.4% Total operating expenses 686.5 658.9 27.6 4.2% (11.2) 697.7 658.9 38.8 5.9% Income from operations 113.4 120.1 (6.7) -5.6% (0.6) 114.0 120.1 (6.1) -5.1% Interest expense, net 81.1 80.5 0.6 0.7% - 81.1 80.5 0.6 0.7% Other (income) expense, net (59.7) (49.3) (10.4) 21.1% 0.3 (60.0) (49.3) (10.7) 21.7% Income before income taxes 92.0 88.9 3.1 3.5% (0.9) 92.9 88.9 4.0 4.5% Income tax provision 9.5 25.2 (15.7) -62.3% (0.1) 9.6 25.2 (15.6) -61.9% Net income 82.5 63.7 18.8 29.5% (0.8) 83.3 63.7 19.6 30.8% Noncontrolling interests 0.5 0.3 0.2 66.7% (0.1) 0.6 0.3 0.3 100.0% Net income attributable to Infor $ 82.0 $ 63.4 $ 18.6 #DIV/0! 29.3% $ (0.7) $ 82.7 $ 63.4 $ 19.3 #DIV/0! 30.4% Add backs 117.0 135.9 (18.9) -13.9% (1.1) 118.1 135.9 (17.8) -13.1% Adjusted EBITDA $ 199.0 $ 199.3 $ (0.3) -0.2% $ (1.8) $ 200.8 $ 199.3 $ 1.5 0.8% Note Pro Forma Results contain reversal of GAAP purchase accounting adjustments and exclude equity compensation expense (1) Currency impact is computed by converting actual results using Q218 exchange rates (2) Q219 and Q218 results exclude equity compensation expense by category as follows: Cost of SaaS subscriptions $ - $ 0.3 Cost of product updates and support fees 0.1 1.4 Cost of consulting services and other fees 0.1 1.7 Sales and marketing 0.8 14.8 Research and development 0.5 4.6 General and administrative 1.1 12.8 Equity-based compensation $ 2.6 $ 35.6 Adjusted EBITDA margin 24.9% 25.6% 24.7% 25.6% Copyright 2018. Infor. All Rights Reserved. (6)
Q219 v. Q218 EBITDA: Pro Forma Pro Forma Results Currency-adjusted Results $ in millions Actual Actual % Currency Adjusted Actual % Q219 Q218 Variance Variance Impact (1) Q219 Q218 Net income attributable to Infor $ 82.0 $ 63.4 $ 18.6 29.3% $ (0.7) $ 82.7 $ 63.4 $ 19.3 30.4% Reconciliation of net income to PF Adjusted EBITDA Net Interest (2) 81.4 80.7 0.7 0.9% - 81.4 80.7 0.7 0.9% Income tax provision (benefit) (3) 10.9 26.6 (15.7) -59.0% (0.1) 11.0 26.6 (15.6) -58.6% Depreciation and amortization 52.9 51.5 1.4 2.7% (0.5) 53.4 51.5 1.9 3.7% FX (gains) losses (59.5) (49.3) (10.2) 20.7% 0.1 (59.6) (49.3) (10.3) 20.9% Pro Forma EBITDA 167.7 172.9 (5.2) -3.0% (1.2) 168.9 172.9 (4.0) -2.3% Acquisition transaction and integration costs 4.3 5.4 (1.1) -20.4% - 4.3 5.4 (1.1) -20.4% Non-recurring, extraordinary, exceptional, unusual (gains) losses 10.4 6.3 4.1 65.1% (0.3) 10.7 6.3 4.4 69.8% Restructuring 5.7 5.5 0.2 3.6% (0.1) 5.8 5.5 0.3 5.5% Other non-operating expenses 2.2 2.2-0.0% - 2.2 2.2-0.0% Cost savings and expense reduction initiatives (4) 8.3 6.2 2.1 33.9% (0.2) 8.5 6.2 2.3 37.1% Pre-acquisition adjusted EBITDA (5) 0.2-0.2 nm - 0.2-0.2 nm Acquisition cost savings (6) 0.2 0.8 (0.6) -75.0% - 0.2 0.8 (0.6) -75.0% Adjusted EBITDA $ 199.0 $ 199.3 $ (0.3) -0.2% $ (1.8) $ 200.8 $ 199.3 $ 1.5 0.8% Note Pro Forma Results contain reversal of GAAP purchase accounting adjustments and exclude equity compensation expense Variance Variance (1) Currency impact is computed by converting actual results using Q218 exchange rates (2) Includes fees associated with debt as defined by Infor's debt agreements (3) Includes other taxes as defined by Infor's debt agreements (4) Anticipated savings yet to be realized related to specific cost saving actions, operating expense reductions and other related initiatives that we expect to take over the next 12 months (5) Pro forma adjustment for pre-acquisition Adjusted EBITDA of recent acquisitions (6) Anticipated cost savings yet to be realized from acquisitions Copyright 2018. Infor. All Rights Reserved. (7)
Y T D Q 2 F i s c a l 2 0 1 9 YTD19 v. YTD18 P&L: GAAP Actual Results Currency-adjusted Results $ in millions Actual Actual % Currency Adjusted Actual % FY19 FY18 Variance Variance Impact (1) FY19 FY18 Variance Variance Revenue SaaS subscriptions $ 316.7 $ 255.2 $ 61.5 24.1% $ (0.6) $ 317.3 $ 255.2 $ 62.1 24.3% Software license fees 135.3 150.7 (15.4) -10.2% (0.9) 136.2 150.7 (14.5) -9.6% Software subscriptions and license fees 452.0 405.9 46.1 11.4% (1.5) 453.5 405.9 47.6 11.7% Product updates and support fees 699.6 706.3 (6.7) -0.9% (2.4) 702.0 706.3 (4.3) -0.6% Software revenues 1,151.6 1,112.2 39.4 3.5% (3.9) 1,155.5 1,112.2 43.3 3.9% Consulting services and other fees 430.5 422.9 7.6 1.8% (3.3) 433.8 422.9 10.9 2.6% Total revenues 1,582.1 1,535.1 47.0 3.1% (7.2) 1,589.3 1,535.1 54.2 3.5% Expenses Cost of SaaS subscriptions 139.3 111.5 27.8 24.9% (0.4) 139.7 111.5 28.2 25.3% Cost of software license fees 20.3 21.8 (1.5) -6.9% (0.1) 20.4 21.8 (1.4) -6.4% Cost of product updates and support fees 113.9 120.1 (6.2) -5.2% (0.8) 114.7 120.1 (5.4) -4.5% Cost of consulting services and other fees 345.2 336.4 8.8 2.6% (2.0) 347.2 336.4 10.8 3.2% Sales and marketing 248.1 270.3 (22.2) -8.2% (0.8) 248.9 270.3 (21.4) -7.9% Research and development 248.3 240.2 8.1 3.4% (2.9) 251.2 240.2 11.0 4.6% General and administrative 117.5 124.5 (7.0) -5.6% (2.0) 119.5 124.5 (5.0) -4.0% Amortization of intangible assets and depreciation 104.5 111.0 (6.5) -5.9% (0.4) 104.9 111.0 (6.1) -5.5% Restructuring costs 10.8 10.2 0.6 5.9% (0.1) 10.9 10.2 0.7 6.9% Acquisition-related and other costs 9.0 12.8 (3.8) -29.7% - 9.0 12.8 (3.8) -29.7% Total operating expenses 1,356.9 1,358.8 (1.9) -0.1% (9.5) 1,366.4 1,358.8 7.6 0.6% Income from operations 225.2 176.3 48.9 27.7% 2.3 222.9 176.3 46.6 26.4% Interest expense, net 161.4 160.5 0.9 0.6% - 161.4 160.5 0.9 0.6% Other (income) expense, net (104.9) 135.4 (240.3) nm 0.7 (105.6) 135.4 (241.0) nm Income (loss) before income taxes 168.7 (119.6) 288.3 nm 1.6 167.1 (119.6) 286.7 nm Income tax provision 11.7 30.9 (19.2) -62.1% (0.1) 11.8 30.9 (19.1) -61.8% Net income (loss) 157.0 (150.5) 307.5 nm 1.7 155.3 (150.5) 305.8 nm Noncontrolling interests 0.8 0.6 0.2 33.3% (0.1) 0.9 0.6 0.3 50.0% Net income (loss) attributable to Infor $ 156.2 $ (151.1) $ 307.3 nm $ 1.8 $ 154.4 $ (151.1) $ 305.5 nm (1) Currency impact is computed by converting actual results using FY18 exchange rates Copyright 2018. Infor. All Rights Reserved. (8)
Y T D Q 2 F i s c a l 2 0 1 9 YTD19 v. YTD18 P&L: Pro Forma Pro Forma Results Currency-adjusted Results $ in millions Actual Actual % Currency Adjusted Actual % YTD FY19 (2) YTD FY18 (2) Variance Variance Impact (1) YTD FY19 (2) YTD FY18 (2) Variance Variance Revenue SaaS subscriptions $ 317.1 $ 257.8 $ 59.3 23.0% $ (0.6) $ 317.7 $ 257.8 $ 59.9 23.2% Software license fees 135.5 153.5 (18.0) -11.7% (0.9) 136.4 153.5 (17.1) -11.1% Software subscriptions and license fees 452.6 411.3 41.3 10.0% (1.5) 454.1 411.3 42.8 10.4% Product updates and support fees 699.6 707.2 (7.6) -1.1% (2.4) 702.0 707.2 (5.2) -0.7% Software revenues 1,152.2 1,118.5 33.7 3.0% (3.9) 1,156.1 1,118.5 37.6 3.4% Consulting services and other fees 430.5 423.5 7.0 1.7% (3.3) 433.8 423.5 10.3 2.4% Total revenues 1,582.7 1,542.0 40.7 2.6% (7.2) 1,589.9 1,542.0 47.9 3.1% Expenses Cost of SaaS subscriptions 139.2 111.2 28.0 25.2% (0.4) 139.6 111.2 28.4 25.5% Cost of software license fees 20.3 21.8 (1.5) -6.9% (0.1) 20.4 21.8 (1.4) -6.4% Cost of product updates and support fees 113.8 118.7 (4.9) -4.1% (0.8) 114.6 118.7 (4.1) -3.5% Cost of consulting services and other fees 344.8 334.7 10.1 3.0% (2.0) 346.8 334.7 12.1 3.6% Sales and marketing costs 246.0 255.5 (9.5) -3.7% (0.9) 246.9 255.5 (8.6) -3.4% Research and development 247.1 235.4 11.7 5.0% (2.9) 250.0 235.4 14.6 6.2% General and administrative 115.1 111.7 3.4 3.0% (1.9) 117.0 111.7 5.3 4.7% Amortization of intangible assets and depreciation 104.5 111.0 (6.5) -5.9% (0.4) 104.9 111.0 (6.1) -5.5% Restructuring costs 10.8 10.2 0.6 5.9% (0.1) 10.9 10.2 0.7 6.9% Acquisition-related and other costs 9.0 12.8 (3.8) -29.7% - 9.0 12.8 (3.8) -29.7% Total operating expenses 1,350.6 1,323.0 27.6 2.1% (9.5) 1,360.1 1,323.0 37.1 2.8% Income from operations 232.1 219.0 13.1 6.0% 2.3 229.8 219.0 10.8 4.9% Interest expense, net 161.4 160.5 0.9 0.6% - 161.4 160.5 0.9 0.6% Other (income) expense, net (104.9) 135.4 (240.3) nm 0.7 (105.6) 135.4 (241.0) nm Income (loss) before income taxes 175.6 (76.9) 252.5 nm 1.6 174.0 (76.9) 250.9 nm Income tax provision 11.7 30.9 (19.2) -62.1% (0.1) 11.8 30.9 (19.1) -61.8% Net income (loss) 163.9 (107.8) 271.7 nm 1.7 162.2 (107.8) 270.0 nm Noncontrolling interests 0.8 0.6 0.2 33.3% (0.1) 0.9 0.6 0.3 50.0% Net income (loss) attributable to Infor $ 163.1 $ (108.4) $ 271.5 nm $ 1.8 $ 161.3 $ (108.4) $ 269.7 nm Add backs 240.8 492.1 (251.3) -51.1% (0.5) 241.3 492.1 (250.8) -51.0% Adjusted EBITDA $ 403.9 $ 383.7 $ 20.2 5.3% $ 1.3 $ 402.6 $ 383.7 $ 18.9 4.9% Note Pro Forma Results contain reversal of GAAP purchase accounting adjustments and exclude equity compensation expense (1) Currency impact is computed by converting actual results using FY18 exchange rates (2) FY19 and FY18 year-to-date results exclude equity compensation expense by category as follows: Cost of SaaS subscriptions $ 0.1 $ 0.3 Cost of product updates and support fees 0.1 1.4 Cost of consulting services and other fees 0.4 1.7 Sales and marketing costs 2.1 14.8 Research and development 1.2 4.8 General and administrative 2.4 12.8 Equity-based compensation $ 6.3 $ 35.8 Adjusted EBITDA margin 25.5% 24.9% 25.3% 24.9% Copyright 2018. Infor. All Rights Reserved. (9)
Y T D Q 2 F i s c a l 2 0 1 9 YTD19 v. YTD18 EBITDA: Pro Forma Pro Forma Results Currency-adjusted Results $ in millions Actual Actual % Currency Adjusted Actual % YTD FY19 YTD FY18 Variance Variance Impact (1) YTD FY19 YTD FY18 Variance Variance Net income (loss) attributable to Infor $ 163.1 $ (108.4) $ 271.5 nm $ 1.8 $ 161.3 $ (108.4) $ 269.7 nm Reconciliation of net income (loss) to PF Adjusted EBITDA Net Interest (2) 162.0 161.0 1.0 0.6% - 162.0 161.0 1.0 0.6% Income tax provision (benefit) (3) 14.0 33.8 (19.8) -58.6% (0.1) 14.1 33.8 (19.7) -58.3% Depreciation and amortization 104.5 111.0 (6.5) -5.9% (0.4) 104.9 111.0 (6.1) -5.5% FX (gains) losses (104.5) 135.4 (239.9) nm 0.6 (105.1) 135.4 (240.5) nm Pro Forma EBITDA 339.1 332.8 6.3 1.9% 1.9 337.2 332.8 4.4 1.3% Acquisition transaction and integration costs 9.0 12.8 (3.8) -29.7% - 9.0 12.8 (3.8) -29.7% Non-recurring, extraordinary, exceptional, unusual (gains) losses 25.2 11.9 13.3 111.8% (0.4) 25.6 11.9 13.7 115.1% Restructuring 10.8 10.2 0.6 5.9% (0.1) 10.9 10.2 0.7 6.9% Other non-operating expenses 4.4 4.8 (0.4) -8.3% - 4.4 4.8 (0.4) -8.3% Cost savings and expense reduction initiatives (4) 15.0 8.8 6.2 70.5% (0.1) 15.1 8.8 6.3 71.6% Pre-acquisition Adjusted EBITDA (5) 0.2 (0.2) 0.4 nm - 0.2 (0.2) 0.4 nm Acquisition cost savings (6) 0.2 2.6 (2.4) -92.3% - 0.2 2.6 (2.4) -92.3% Adjusted EBITDA (7) $ 403.9 $ 383.7 $ 20.2 5.3% $ 1.3 $ 402.6 $ 383.7 $ 18.9 4.9% Note Pro Forma Results contain reversal of GAAP purchase accounting adjustments and exclude equity compensation expense (1) Currency impact is computed by converting actual results using FY18 exchange rates (2) Includes fees associated with debt as defined by Infor's debt agreements (3) Includes other taxes as defined by Infor's debt agreements (4) Anticipated savings yet to be realized related to specific cost saving actions, operating expense reductions and other related initiatives that we expect to take over the next 12 months (5) Pro forma adjustment for pre-acquisition Adjusted EBITDA of recent acquisitions (6) Anticipated cost savings yet to be realized from acquisitions (7) As of Q218, we no longer have any Unrestricted Subsidiaries as defined in Infor s debt agreements. Pursuant to the provisions of our debt agreements, we have excluded adjustments for the Adjusted EBITDA of previously designated Unrestricted Subsidiaries retrospectively. We have excluded $1.0M from YTD FY18 for the "Unrestricted Subsidiaries" as previously reported. Copyright 2018. Infor. All Rights Reserved. (10)
Quarterly Overview: LTM Results $ in millions Quarter Ended January 31, 2018 Quarter Ended April 30, 2018 Quarter Ended July 31, 2018 Quarter Ended October 31, 2018 LTM Ended October 31, Revenues SaaS subscriptions $ 138.1 $ 139.0 $ 156.2 $ 160.5 $ 593.8 Software license fees 75.2 106.7 65.9 69.4 317.2 Software subscriptions and license fees 213.3 245.7 222.1 229.9 911.0 Product updates and support fees 356.4 345.7 351.0 348.6 1,401.7 Software revenues 569.7 591.4 573.1 578.5 2,312.7 Consulting services and other fees 206.8 214.7 209.6 220.9 852.0 Total revenues 776.5 806.1 782.7 799.4 3,164.7 Expenses Cost of SaaS subscriptions 57.6 60.4 68.2 71.1 257.3 Cost of software license fees 11.5 15.8 9.5 10.8 47.6 Cost of product updates and support fees 59.6 58.9 56.0 57.9 232.4 Cost of consulting services and other fees 169.0 180.8 171.3 173.9 695.0 Sales and marketing 123.9 130.7 117.8 130.3 502.7 Research and development 126.0 123.0 123.5 124.8 497.3 General and administrative 105.8 57.0 60.1 57.4 280.3 Amortization of intangible assets and depreciation 95.8 55.0 51.6 52.9 255.3 Restructuring costs 1.7 6.7 5.1 5.7 19.2 Acquisition-related and other costs 5.4 4.7 4.7 4.3 19.1 Total operating expenses 756.3 693.0 667.8 689.1 2,806.2 Income from operations 20.2 113.1 114.9 110.3 358.5 Interest expense, net 78.4 79.0 80.3 81.1 318.8 Other (income) expense, net 126.8 (81.0) (45.2) (59.7) (59.1) Income (loss) before income taxes (185.0) 115.1 79.8 88.9 98.8 Income tax provision (benefit) (18.4) (11.0) 2.2 9.5 (17.7) Net income (loss) (166.6) 126.1 77.6 79.4 116.5 Noncontrolling interests 0.2 0.3 0.3 0.5 1.3 Net income (loss) attributable to Infor $ (166.8) $ 125.8 $ 77.3 $ 78.9 $ 115.2 (1) Presented in compliance with Infor Notes' Indentures 2018 (1) Copyright 2018. Infor. All Rights Reserved. (11)
Quarterly Overview: LTM Results $ in millions Quarter Ended January 31, 2018 Quarter Ended April 30, 2018 Quarter Ended July 31, 2018 Quarter Ended October 31, 2018 LTM Ended October 31, 2018 (1)(2)(9) Net income (loss) attributable to Infor $ (166.8) $ 125.8 $ 77.3 $ 78.9 $ 115.2 Reconciliation of net income (loss) to Adjusted EBITDA: Net Interest (3) 78.7 79.3 80.6 81.4 320.0 Income tax provision (benefit) (4) (17.1) (10.2) 3.1 10.9 (13.3) Amortization of intangible assets and depreciation 95.8 55.0 51.6 52.9 255.3 Purchase accounting impact - SaaS subscriptions 0.7 0.4 0.1 0.3 1.5 Purchase accounting impact - License fees 0.9 0.5-0.2 1.6 Purchase accounting impact - Product updates and support fees 0.3 0.1 - - 0.4 Purchase accounting impact - Consulting services 0.5 0.2 - - 0.7 Equity-based compensation - noncash 5.9 2.6 3.7 2.3 14.5 Acquisition transaction and integration costs 5.4 4.7 4.7 4.3 19.1 Non-recurring, extraordinary, exceptional, unusual (gains) losses 51.1 12.1 14.8 10.7 88.7 Restructuring costs 1.7 6.7 5.1 5.7 19.2 Other non-operating expenses 3.4 2.3 2.2 2.2 10.1 FX (gains) losses 126.7 (81.0) (45.0) (59.5) (58.8) Cumulative effect of changes in accounting principles (5) - - - - 19.1 Cost savings and expense reduction initiatives (6) 3.2 11.8 6.7 8.3 58.1 Pre-acquisition Adjusted EBITDA (7) - - - 0.2 2.2 Acquisition cost savings (8) 0.3 0.1-0.2 1.6 Adjusted EBITDA (9) $ 190.7 $ 210.4 $ 204.9 $ 199.0 855.2 Change in deferred SaaS revenue 63.7 Cash Adjusted EBITDA $ 918.9 Adjusted EBITDA margin 29.0% (1) Presented in compliance with Infor Notes' Indentures (2) Consolidated LTM Adjusted EBITDA and Cash Adjusted EBITDA as of October 31, 2018, pursuant to the provisions of Infor's Credit Agreement were approximately $847.5M and $911.2M (3) Includes fees associated with debt as defined by Infor's debt agreements (4) Includes other taxes as defined by Infor's debt agreements (5) Cumulative effect of change in accounting related to adoption of ASC 606 and ASU 2016-16 at the beginning of FY19 - included in LTM column (6) Anticipated savings yet to be realized related to specific cost saving actions, operating expense reductions and other related initiatives that we expect to take over the next 12 months (7) Pro forma adjustment for pre-acquisition Adjusted EBITDA of recent acquisitions (8) Anticipated cost savings yet to be realized from acquisitions (9) Sum of the quarters presented does not tie to LTM column due to adjustments for cumulative effect of accounting changes, anticipated LTM cost savings and expense reduction initiatives, pre-acquisition LTM Adjusted EBITDA, and anticipated LTM acquisition cost savings Copyright 2018. Infor. All Rights Reserved. (12)
Balance Sheet: GAAP $ in millions October 31, April 30, 2018 2018 Assets Current assets Cash and cash equivalents $ 284.1 $ 417.6 Accounts receivable, net 446.6 505.9 Other current assets 227.5 199.2 Total current assets 958.2 1,122.7 Property and equipment, net of accumulated depreciation 155.5 160.9 Intangible assets, net of accumulated amortization 5,199.7 5,340.3 Other long-term assets 226.9 192.6 Total assets $ 6,540.3 $ 6,816.5 Liabilities and Stockholders' Deficit Current liabilities Accounts payable and accrued liabilities $ 613.8 $ 596.0 Deferred revenue 990.7 1,143.8 Current portion of long-term debt 11.1 42.5 Total current liabilities 1,615.6 1,782.3 Long-term debt, net 5,668.5 5,765.8 Other long-term liabilities 214.3 278.2 Total liabilities 7,498.4 7,826.3 Stockholders' deficit (958.1) (1,009.8) Total liabilities and stockholders' deficit $ 6,540.3 $ 6,816.5 Copyright 2018. Infor. All Rights Reserved. (13)
Statement of Cash Flows: GAAP Six Months Ended $ in millions October 31, 2018 October 31, 2017 Cash flows from operating activities Net income (loss) $ 157.0 $ (150.5) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 104.5 111.0 Non-cash items (70.2) 199.0 Change in working capital (159.9) (154.4) Net cash provided by operating activities 31.4 5.1 Cash flows from investing activities Business and asset acquisitions, net of cash acquired (22.6) (67.0) Purchases of property, equipment and software (37.8) (47.8) Net cash used in investing activities (60.4) (114.8) Cash flows from financing activities Equity contributions - 75.0 Dividends paid (50.0) - Payment of debt obligations (39.3) (17.9) Deferred purchase price and contingent consideration (2.0) (38.6) Deferred financing fees and other financing activities (1.2) (1.2) Net cash provided by (used in) financing activities (92.5) 17.3 Effect of exchange rate on cash, cash equivalents and restricted cash (12.7) 6.1 Net decrease in cash, cash equivalents and restricted cash (134.2) (86.3) Cash, cash equivalents and restricted cash Beginning of the period 429.7 319.1 End of the period $ 295.5 $ 232.8 In fiscal 2019 we adopted new accounting guidance regarding the classification and presentation of changes in restricted cash in our statement of cash flows. As a result, we recast the prior year cash flows to reflect the change in cash, cash equivalents and restricted cash in a manner consistent with the current period. Copyright 2018. Infor. All Rights Reserved. (14)
Debt Summary $ in millions Outstanding USD Outstanding October 31, October 31, Tranche Currency Pricing (1) 2018 2018 Maturity First Lien - Tranche B-6 Term Loan USD AER (2) + 2.75 margin $ 2,100.6 $ 2,100.6 2/1/2022 First Lien - Euro B-2 Term Loan EUR (3) AER (2) + 2.25 margin 987.9 1,119.2 2/1/2022 Infor (US), Inc. Senior Secured Notes USD 5.75% $ 500.0 500.0 8/15/2020 Secured Debt 3,719.8 (e) Infor (US), Inc. Senior Notes USD 6.50% $ 1,630.0 1,630.0 5/15/2022 Infor (US), Inc. Senior Notes EUR (3) 5.75% 350.0 396.5 5/15/2022 Total Debt 5,746.3 (a) Less: Cash Balance (284.1) (f) Net Debt $ 5,462.2 (b) Total Debt $ 5,746.3 Less: Deferred Financing Fees, Debt Discounts and Premiums, net (66.7) Debt - Book Carrying Value $ 5,679.6 LTM Adjusted EBITDA LTM Cash Adjusted EBITDA (4) LTM Adjusted EBITDA per Infor Notes' Indentures - Cash Adjusted EBITDA per Infor's Credit Agreement $ 855.2 (c) $ 911.2 (d) LTM Adjusted EBITDA and Cash Adjusted EBITDA to Total Debt (a)/(c) 6.72 X (a)/(d) 6.31 X LTM Adjusted EBITDA and Cash Adjusted EBITDA to Net Debt (b)/(c) 6.39 X (b)/(d) 5.99 X LTM Adjusted EBITDA and Cash Adjusted EBITDA to Net Secured Debt ((e)+(f))/(c) 4.02 X ((e)+(f))/(d) 3.77 X (1) Reflects current pricing based on our Credit Agreement, as amended, and our outstanding senior notes (2) Adjusted Eurocurrency Rate (AER) - AER floor is 1.00% per annum (3) Euro exchange rate as of October 31, 2018, was 1.1329 (4) Cash Adjusted EBITDA per our Credit Agreement - includes $0.7M in interest income, $63.7M addback for the change in deferred SaaS revenue, less $8.4M related to adoption of ASC 606 Copyright 2018. Infor. All Rights Reserved. (15)
ASC 606 Impact on Q219 Results of Operations Three Months Ended October 31, 2018 As Adjusted Without Impact of Adoption of (in millions) As Reported ASC 606 ASC 606 Revenues: SaaS subscriptions $ 160.5 $ (2.1) $ 158.4 Software license fees 69.4 (1.8) 67.6 Software subscriptions and license fees 229.9 (3.9) 226.0 Product updates and support fees 348.6 0.2 348.8 Software revenues 578.5 (3.7) 574.8 Consulting services and other fees 220.9 1.4 222.3 Total revenues 799.4 (2.3) 797.1 Operating expenses: Sales and marketing 130.3 2.6 132.9 Income from operations 110.3 (4.9) 105.4 Income tax provision 9.5 (0.7) 8.8 Net income (loss) $ 79.4 $ (4.2) $ 75.2 Adjusted EBITDA $ 199.0 $ (4.9) $ 194.1 Copyright 2018. Infor. All Rights Reserved. (16)
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