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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

FOR THE FISCAL YEAR ENDED APRIL 30, 2019

OR

Commission file number: 333-183494-06

INFOR, INC.

(Exact name of registrant as specified in its charter)

641 AVENUE OF THE AMERICAS

NEW YORK, NEW YORK 10011

(Address of principal executive offices, including zip code)

(646) 336-1700

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the act: None

Securities registered pursuant to section 12(g) of the act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☒    No  ☐

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 every Interactive Data File required to be submitted 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 such files).    Yes   ☒    No  ☐

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

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 aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant was zero as of October 31, 2018, the last business day of the registrant’s most recently completed second fiscal quarter. The registrant is a privately held corporation.

The number of shares of the registrant’s common stock outstanding on June 6, 2019, was 1,000, par value $0.01 per share.

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DOCUMENTS INCORPORATED BY REFERENCE

None.

The information required by Items 10 through 14 of Part III of Form 10-K has been omitted from this filing. This information will be included by amendment to this Annual Report in Amendment No. 1 on Form 10-K/A to be filed by Infor, Inc. with the U.S. Securities and Exchange Commission (the SEC) prior to July 29, 2019.

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INFOR, INC.

FORM 10-K

FISCAL YEAR ENDED APRIL 30, 2019

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FORWARD-LOOKING STATEMENTS

In addition to historical information, this Annual Report on Form 10-K for the fiscal year ended April 30, 2019 (the Annual Report), 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, statements about our future acquisitions and product development plans, 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, but not limited to, those that are discussed under Item 1A, Risk Factors, in this Annual Report.

Given these risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements included in this Annual Report. These forward-looking statements 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 this Annual Report and in other documents we file from time to time with the SEC including our Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

INDUSTRY AND MARKET DATA

This Annual Report includes industry data that we obtained from periodic industry publications. As noted in this Annual Report, Gartner, Inc. (Gartner) and International Data Corporation (IDC) were the primary sources for third-party industry data and forecasts, including the Gartner reports “Forecast: Enterprise Application Software, Worldwide, 2017-2023, 1Q19 Update; Published: 25 March 2019; ID: G00383355” (the March 2019 Gartner Report) and “Forecast: Public Cloud Services, Worldwide, 2016-2022, 4Q18 Update; Published: 16 January 2019; ID: G00377251” (the January 2019 Gartner Report). The Gartner Reports described herein, (the Gartner Reports) represent research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Annual Report) and the opinions expressed in the Gartner Reports are subject to change without notice.

The IDC report “Worldwide Software as a Service and Cloud Software Forecast, 2018-2022; published July 2018; IDC #US43821318” (the July 2018 IDC Report) and the represented data, research, opinion or viewpoints published, as part of syndicated service, by IDC, are not representations of fact. The IDC Report speaks as of its original publication date (and not as of the date of this Annual Report) and the opinions expressed in the IDC Report are subject to change without notice.

Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such information included in this Annual Report. We have not independently verified any of the data from these third-party sources or the underlying assumptions on which such data relies.

PART I

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. Unless otherwise indicated, references to our fiscal year mean the fiscal year ended on April 30 of such year. As disclosed in our Current Report on Form 8-K filed with the SEC on April 23, 2014, we changed our fiscal year end from May 31 to April 30 effective beginning with our fiscal 2015. As a result, references to our fiscal 2015 and beyond mean the fiscal year ended on April 30 of such year. In addition, in transitioning to our new fiscal year end, we reported fiscal 2015 as the 11-month transition period of June 1, 2014 through April 30, 2015.

General

Infor is a global leader in business cloud software specialized by industry. We build complete industry suites in the cloud for large enterprises and small-to-midsize companies (SMB) in many industries, including manufacturing, distribution, healthcare, public sector, retail, and hospitality. Our software products are often “mission critical” for many of our customers as they automate and integrate essential business processes to better manage suppliers, partners, customers, employees, and general business operations. Our industry-specific approach differentiates us from our large enterprise software competitors, whose primary focus is on business applications that are less specialized, require costly customization, and impede companies’ ability to maximize the value of their business data. We believe our products better prepare companies to compete in the digital age by modernizing their operations and enabling business insights and analytics derived from “mission critical” data in the enterprise and across the supply chain, as well as providing a lower relative total cost of ownership.

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We specialize in and target specific industries, or verticals, with integrated cloud software suites of our industry-specific applications as well as horizontal (industry-nonspecific) applications. Our industry CloudSuites are built around one of our industry-specific enterprise resource planning (ERP) applications. In addition to ERP, our software enables digital transformation of general business processes, including customer relationship management (CRM), enterprise asset management (EAM), financial management, human capital management (HCM), and supply chain management (SCM). Underlying our software suites is Infor OS, our foundational operating service that streamlines and personalizes the user experience, integrates applications, delivers business insights and analytics, and enables flexibility to support changing business conditions and growth. Our CloudSuites are also integrated with our Infor Nexus commerce network, which helps manage flow of inventory, transactions, and information across a global supply chain between trading partners. Our CloudSuites are also integrated with our Infor Nexus (formerly GT Nexus) commerce digital supply chain network, which helps manage flow of inventory, transactions, and information across a global supply chain between trading partners. Infor Birst is a cloud-based networked business intelligence (BI) and analytics software platform that helps organizations understand and optimize complex processes and delivers insights across the enterprise. Coleman is Infor’s enterprise-grade, industry-specific artificial intelligence (AI) platform for our CloudSuite applications, which mines data and uses powerful machine learning to improve processes such as inventory management, transportation routing, and predictive maintenance. Coleman provides AI-driven recommendations and advice to enable users to make smarter business decisions more quickly.

In addition to providing software products, we provide on-going support and operational services for our customers through our subscription-based annual license, maintenance and support programs. We also help our customers implement and use our applications more effectively through Infor Services, which consists of consulting and implementation services.

We serve a large, diverse and sophisticated global customer base. Our customers range from Fortune 500 enterprises to SMBs. Our market leadership in key verticals, including manufacturing, distribution, healthcare, public sector, retail, and hospitality software, results from the fact that we serve many of the largest and most well-known customers in those verticals. For example, the top 20 aerospace companies, 9 of the top 10 high tech companies, the top 10 pharmaceutical companies, 14 of the top 25 U.S. healthcare delivery networks, 18 of the top 20 automotive suppliers, 14 of the top 20 industrial distributors, 16 of the 20 largest U.S. states, 19 of the 20 largest U.S. cities, 13 of the top 20 global retailers, and 4 of the top 5 brewers use our software products.

We serve customers across three major geographic regions: the Americas; Europe, Middle East and Africa (EMEA); and Asia Pacific (APAC). We have approximately 17,380 employees worldwide and have offices in 44 countries. Across our applications, we offer our solutions in over 40 languages, and we intend to continue to translate our systems into new languages as we enter into new geographical markets. 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. We generated revenues of approximately 60.3% from the Americas, 30.5% from EMEA and 9.2% from APAC in fiscal 2019. Though we have a considerable presence outside of the U.S. today, we believe we have significant opportunities to expand internationally and capture market share, particularly in EMEA as more companies embrace cloud application deployment, and in APAC as countries achieve the critical infrastructure to support cloud business applications.

We generate most of our revenue through sales of the following offerings: (1) software subscriptions and software licenses; (2) maintenance, which refers to our subscription-based services through which customers have access to product updates and technical support for products they license from us; and (3) consulting services. We market and sell our software and services primarily through a direct sales force, which is augmented by systems integrators and resellers.

We view our operations and manage our business as three reportable segments: License, Maintenance, and Consulting. See Note 20, Segment and Geographic Information, in Notes to Consolidated Financial Statements of this Annual Report for additional information.

Corporate Information

Infor, Inc. was formed on June 8, 2009, in the State of Delaware, as Steel Holdings, Inc. by Golden Gate Capital. Steel Holdings acquired SoftBrands, Inc. (SoftBrands) on August 13, 2009. Steel Holdings changed its name to GGC Software Holdings, Inc. (GGC Holdings) on April 25, 2011. GGC Holdings acquired Lawson Software, Inc. (Lawson) on July 5, 2011. Both SoftBrands and Lawson were publicly traded companies prior to the acquisitions. We have maintained the SoftBrands and Lawson brands. On April 26, 2012, we formally changed the name of GGC Software Holdings, Inc. to Infor, Inc. In addition, on June 21, 2012, we changed the name of Lawson Software, Inc. to Infor (US), Inc. Transactions between Infor, Inc. and its subsidiaries have been eliminated for presentation.

The original predecessor of Infor, Inc. was formed in 2002, followed by a series of acquisitions. This entity operated as Infor Global Solutions Intermediate Holdings Ltd. (IGS Intermediate Holdings) from June 7, 2006 until April 5, 2012, when we completed the combination of GGC Holdings and IGS Intermediate Holdings.

Our principal executive offices are located at 641 Avenue of the Americas, New York, NY 10011 and our phone number is (646) 336-1700. Our website is www.infor.com. The information contained or referred to on our website is not part of this Annual Report.

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Corporate Ownership

Infor, Inc. is a privately held corporation. Our largest investors are our sponsors, Koch Equity Development (KED), the investment and acquisition subsidiary of Koch Industries, Inc. (Koch Industries), Golden Gate Capital, and until December 2018, Summit Partners, L.P. (Summit Partners). We have entered into advisory agreements with our sponsors pursuant to which we have retained them to provide advisory services relating to financing and strategic business planning, acquisitions and investments, analysis and oversight, executive recruiting and certain other services.

In January 2019, we announced that KED and Golden Gate Capital had agreed to make additional investments of $1.5 billion in Infor and our affiliate companies. A portion of the proceeds related to these investments was used to acquire Summit Partners’ interest in Infor and the affiliates of Infor’s parent company in December 2018, and approximately $500.0 million was received to repay our Senior Secured Notes in February 2019. In addition, subsequent to fiscal year end, in May 2019, $742.5 million was received in conjunction with the redemption of certain of our affiliate companies’ debt. See Note 12, Debt, and Note 21, Related Party Transactions, in Notes to Consolidated Financial Statements of this Annual Report for additional information.

Koch Industries

Koch Industries, one of the largest private companies in America, is based in Wichita, Kansas. Koch Industries has a presence in about 60 countries and employs more than 130,000 people worldwide, with about 67,000 of those in the U.S. Koch Industries has been estimated by Forbes to have revenues as high as $110 billion. From January 2009 to present, Koch companies have earned more than 1,300 awards for safety, environmental excellence, community stewardship, innovation, and customer service.

In fiscal 2017, an affiliate of KED invested more than $2 billion in Infor. KED focuses its efforts on strategic acquisitions for Koch Industries’ operating companies and industry agnostic principal investments for the group’s own portfolio. As noted above, KED made additional investments in Infor during fiscal 2019 and 2020.

Golden Gate Capital

Golden Gate Capital is a San Francisco-based private equity investment firm with over $15 billion of committed capital. The principals of Golden Gate Capital have a long and successful history of investing with management teams across a wide range of industries and transaction types, including going-privates, corporate divestitures, and recapitalizations, as well as debt and public equity investments.

Golden Gate Capital is one of the most active software investors in the world, having invested in or acquired more than 75 software companies. Notable software investments sponsored by Golden Gate Capital have included Vector Solutions, 20-20 Technologies, Neustar, LiveVox, BMC Software, Ex Libris, and Micro Focus.

Our Strategy

The foundation of Infor’s strategy is our deep commitment to industry specialization. Powered by the cloud, Infor’s complete industry suites incorporate network, analytics, and AI capabilities to make connections across the enterprise and beyond, providing the visibility, insights, and information companies need to perform and serve customers better in dynamic, highly competitive markets. The principal features of our strategy include:

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Our Competitive Strengths

We believe we have the following competitive strengths:

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Our Products and Services

To drive human potential in the enterprise, Infor business software is specialized by industry and built for the cloud to enable networked analytics, an artificial intelligence-led user experience and a global supply chain. We believe we offer a compelling choice to enterprise software customers because of the depth of functionality and insights, from mission-critical ERP, horizontal applications across an enterprise, and throughout the supply chain in our Infor Nexus commerce network. Our investments in data science, artificial intelligence, and user experience design help companies put their data to work with predictive insights and business analytics.

CloudSuite

Infor CloudSuite industry suites offer integrated applications to manage various business processes for customers in specific industries. Infor CloudSuite enables customers to deploy mission critical applications, including ERP, in a multi-tenant cloud environment and take advantage of the computing power of a highly-elastic cloud, which can help provide for greater business insights and more efficient operations.

Infor offers 23 CloudSuites for industries including Aerospace & Defense, Automotive, Chemicals, Distribution, Equipment, Fashion, Federal, Food & Beverage, Healthcare, High Tech, Hospitality, Industrial Manufacturing, Industrial Machinery, Public Sector, and Retail.

A brief overview of our industry-specific software products is provided below:

Manufacturing. Our manufacturing products help our customers manage fluctuating demand and costs. Our software covers many of the core and supporting areas that a manufacturing company needs, from initial forecasting, material and capacity planning through to product lifecycle management, production planning and warehouse management. Our easy-to-use tools and web-enabled technologies help our customers collaborate more effectively across their organizations and supply chain partners and better serve their customers. Features include, among others, powerful planning tools, support for lean manufacturing such as orderless production, advanced warehouse and logistics software products and integrated mobile solutions.

Distribution. Our distribution products are designed to provide our customers with visibility and control to help manage high volumes, thin margins and wide product assortments. Features of our distribution software products include, among others, advanced order promising at point-of-sale, support for multi-channel sales, ability to handle supply and product diversity, auto balancing of stock across facilities and integrated route management.

Healthcare. We offer innovative, industry-leading healthcare solutions used by organizations globally that substantially reduce operating costs by improving the integration, planning, tracking, and management of a healthcare organization’s most vital resources: people, information, supplies, and financial assets. Infor Healthcare solutions help healthcare organizations respond immediately to emerging healthcare needs, improving both the quality of clinical care and the viability of business operations to transform for the future.

Public Sector. Our public sector products are designed for organizations that serve the public. We invest in industry expertise and consult best practices in the government, education, public authorities and utilities industries. Our focus on the public sector allows us to enable our customers to serve their constituents in a personal, responsive and cost-effective fashion. Our public sector focused products are designed to fit most needs without expensive customizations.

Retail. We offer a comprehensive suite of enterprise software products for retail companies. These products offer our retail customers tools to help them deliver seamless omni-channel customer experiences and improve profits. It also helps them gain greater control over their margins, products and relationships throughout the supply chain and networked order management and fulfillment. Additionally, these products help companies to identify and quantify, in advance, potential business process improvements and helps prioritize improvement opportunities within their business.

Hospitality. Our hospitality products are used by hospitality properties worldwide, including some of the world’s most recognizable hotels, resorts, gaming facilities and restaurants. These products are suitable for a hospitality property of any type and size, including global chains, smaller chains, independent hotels or motels and government lodging. Our products help our customers manage their front-office tasks, reservations, housekeeping, sales and marketing, accounting, engineering, banquets and catering, and point of sale transaction management.

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Enterprise Resource Planning

Our ERP products help customers in targeted industries cut costs, improve operational efficiency, and make smarter decisions faster. Our offerings are specifically designed to meet the needs of customers in the manufacturing, distribution, healthcare, public sector, and other services and/or trade-oriented businesses and include the following:

Infor LN. Software designed to manage the demands of larger, multi-site businesses with complex manufacturing and distribution environments. Key capabilities include Financial Management, CRM, Order Management, SCM, Manufacturing Control, Sourcing & Procurement, Project Management, Quality Management and Service Management.

CloudSuite Financials Software designed for customers in service industries such as healthcare and public sector, and includes Financial Management, Supply Management, and Services Management.

Infor M3. Software designed to help customers in process manufacturing, agriculture, and distribution industries. Key products include Financial Management, Manufacturing Operations, SCM, Enterprise Asset Management and Customer Sales & Service.

Enterprise Asset Management

Our EAM products help our customers keep their plant, equipment, and facilities available, reliable, and safe. They are designed to help customers monitor and manage the deployment, performance, and maintenance of company assets to eliminate operational downtimes and reduce costs, as well as provide customers with financial and physical controls required to control their energy consumption and the asset and operating infrastructure that underpins them. Key products include Infor CloudSuite EAM, Infor EAM Energy Performance Management and Infor MP2.

Financial Management

Our financial management products help customers deliver timely, actionable financial information, enforce global financial standards and controls, and improve business transparency. They are designed for budgeting, forecasting, financial reporting, expense management, and compliance. Key products include Infor CloudSuite Financials, Birst Analytics, Infor SunSystems, CloudSuite Expense Management, Infor CloudSuite HCM, CloudSuite EAM Enterprise, CloudSuite Warehouse Management, Infor Governance Risk and Compliance and Infor Dynamic Enterprise Performance Management.

Human Capital Management

CloudSuite Human Capital Management (HCM) capabilities enable our customers to manage their workforce and transform the role of the HR professional from an administrative and policy enforcing role to that of a strategic business partner. Offerings include:

Infor Talent Management. Designed to manage, develop and retain employees. Key capabilities include Talent Acquisition, Goal Management, Performance Management, Compensation Management, Learning and Development, Succession Management and Transition Management.

Infor Global Human Resources. Designed to manage the HR processes related to employees. Key capabilities include Absence Management, Benefits Administration, e-Recruiting, Employee and Manager Self-Service, Human Resources, Payroll, Performance Management for Healthcare, Personnel Administration, Resource Navigator, Teacher Contract Administration and TalentView of Performance.

Infor Workforce Management. Designed to automate and optimize time-intensive staffing and scheduling tasks. Key capabilities include Workforce Planning, Workforce Time and Attendance, Workforce Scheduling, Employee and Manager Self-Service, Workforce Mobility, and Workforce Performance.

Infor Talent Science. Designed to empower HR professionals with data science and analytics, Infor Talent Science helps organizations recruit, retain, and promote top performing employees. Developed by behavioral scientists, the application analyzes individual applicants and employees to determine their “Behavioral DNA” and compares that to the profiles of top-performers in the organization leading to reduced turnover, greater job satisfaction, and increased performance.

Infor HR Service Delivery. Designed as a multi-tier HR service delivery model that empowers employees to take control of routine HR transactions. It includes a personalized, searchable knowledge base and case management tool, to streamline new hire onboarding, voluntary and involuntary offboarding, and total rewards communications.

Infor Learning Management. Designed as a fully-integrated learning management system (LMS) that incorporates a learning content management system, authoring tool, comprehensive learning management reports, and services for e-learning adoption and implementation.

Customer Experience Management

Our CX products help users build deep relationships with their customers and improve service. This software is designed to help users react quickly, intelligently, and personally to customer interactions; plan, execute, and monitor outbound marketing campaigns; and convert customer leads into sales. Key products include CloudSuite CRM, CloudSuite CPQ, Infor Contract Lifecycle Management, Infor Omni Channel Campaign Management, Infor Interaction Advisor, Infor Rhythm.

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Supply Chain Management

Our SCM products are designed to help customers manage their entire supply chain including designing, forecasting, planning and execution. Key products include Infor Nexus, Infor Sales & Operations Planning, Infor Demand Planning, Infor Advanced Planning, Infor Advanced Scheduling, Infor Network Design, Infor Transportation Planning, Infor Warehouse Management and Infor Scheduling.

Infor Nexus Commerce Network

Companies have vast supplier networks that help manufacture, design, distribute, ship, and sell their products. Traditional enterprise software has been limited to data and information contained within a single enterprise, which does not provide companies with visibility across their growing supply chains. In a complex, high velocity supply chain, all partners need to know what was ordered, when it was built, where it is in transit, if the order has changed, and if it has cleared customs. Specialization and speed are moving the future of manufacturing into the commerce cloud. Through our Infor Nexus platform, data from ERP and other systems flows across the supply chain to help companies manage production and monitor goods in transit and at rest.

Birst Analytics

Birst provides a next-generation, cloud-based platform for networked business intelligence (BI). Organizations can achieve a new level of trusted insight and decision making by connecting centralized and decentralized teams and applications via a network of analytics services. Built with patented technologies, Birst puts the power of analytics in the hands of every information worker and dramatically accelerates the process of delivering insights across the enterprise.

Maintenance and Support Services

Our maintenance and technical support programs include product upgrades, updates and corrections for the software under maintenance, as well as various levels of technical support including access to our knowledge base and our product support team, technical advice and application management. These programs are comprehensive customer care programs that entitle our customers to various levels of support to meet their specific needs. Our maintenance and technical support offerings are delivered through the support organization operating from our support centers around the world.

Consulting Services

Our consulting services range from the initial assessment and planning of a project to the actual implementation and post-implementation of a project, including optimizing a customer’s use of its software. We also provide training and learning tools to help our customers become proficient in using our software quickly and effectively. Hook & Loop Digital designs long-term solutions to solve an enterprises’ deep-rooted challenges by building scalable applications that drive real change for our customers and deploying them in the cloud.

Our Industry

The enterprise application software industry is competitive, rapidly changing, and significantly affected by new product offerings, evolving technologies such as AI and analytics, and other market activities. While traditional ERP products focused on “back-office” transactional activities, such as accounting, order management and inventory control, enterprise applications have expanded their focus to include managing customer interactions, managing supply chain and automation of and support for a range of administrative and operational business processes across multiple industries without the need for extensive customization. According to the March 2019 Gartner Report, the worldwide enterprise application software market in 2018 was approximately $211.9 billion (constant U.S. dollars), a 10.7% increase from approximately $191.3 billion (constant U.S. dollars) in 2017. This market is forecasted to be approximately $233.8 billion in revenue for 2019 (constant U.S. dollars), a 10.3% increase over 2018. The enterprise application software market is forecasted to grow at a compounded annual growth rate of 9.4% per annum from 2018 to 2023. In addition, how enterprise software applications are deployed is evolving and becoming more flexible, transitioning from on-site to in the cloud, or a hybrid combination of both. According to the January 2019 Gartner Report, in 2018 the worldwide market for cloud application services, which reflects SaaS revenues, was approximately $87.2 billion (constant U.S. dollars), a 21.2% increase from approximately $71.9 billion (constant US. dollars) in 2017. This market is forecasted to be approximately $103.5 billion in revenue for 2019 (constant U.S. dollars), an 18.7% increase over 2018. The market for cloud application services, or SaaS revenues, is forecasted to grow at a compound annual growth rate of approximately 17.0% per annum from 2017 to 2022. Within this forecast, the SaaS applications with some of the highest growth rates in end-user spending include those related to BI, SCM, ERP, and CRM with forecasted compound annual growth rates from 2017 to 2022 of 23.7%, 21.1%, 19.3%, and 17.7%, respectively.

The enterprise software industry’s pivot to the cloud continues at a rapid pace. Companies have been using edge software applications like CRM and HCM in the cloud for years. With the cloud transformation of software applications, we believe there is strong appetite for companies to expand their cloud ecosystem to include mission critical applications like ERP and Financial Management. The cloud offers increased flexibility, on-demand scalability, faster deployment and upgrades, and enhanced security measures to protect against increasing cyber threats and attacks. It also provides a platform to aggregate enterprise data across applications that were previously siloed enabling deep analytics, machine learning and AI assisted business insights. According to the July 2018 IDC Report, the percent of worldwide application software revenue provided in the public cloud (revenue related to SaaS applications) in 2017 was 31.3%, as compared to 68.7% provided on-

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premise or through other delivery and is anticipated to increase to 44.9% of worldwide application software revenue by 2022. This represents a compound annual growth rate of approximately 7.5% per annum in the penetration of SaaS applications to the total worldwide application software market from 2017 to 2022. Per IDC, the worldwide market for public cloud application revenue is forecasted to grow at a compound annual growth rate of approximately 16.8% per annum from 2017 to 2022.

We believe our target markets are experiencing favorable trends. We believe that strong economic conditions will continue to encourage companies to enhance their enterprise applications software spending as they focus on growth and productivity enhancing initiatives. With market leadership positions in multiple enterprise applications products and industry verticals, we believe that we are well positioned to take advantage of these favorable trends and further enhance our revenue, profitability and market share in the coming years. Geographically, we continue to experience strong market opportunities in the Americas region. We also believe there is significant market opportunity for cloud software products in EMEA and APAC regions as the former continues to embrace cloud application deployments and the latter develops the infrastructure to support such deployments.

A number of factors driving demand for enterprise application software products are listed below:

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Competition

The enterprise software industry is intensely competitive, rapidly changing and significantly affected by new product offerings and other market activities. Some of our competitors have an advantage over us due to their larger customer bases, larger technical staffs, greater brand name recognition, and greater financial and marketing resources. We believe the principal competitive factors affecting our market include:

We believe we have competitive advantages over a number of our competitors. Some of these advantages include:

We frequently encounter competitors such as SAP and Oracle. Both are large, global vendors that are increasingly targeting SMBs, particularly as their traditional larger-customer market becomes saturated. We believe there is demand for a vendor like Infor that can offer scalable applications that are simpler to implement and operate more efficiently than the more complex applications of SAP and Oracle.

We also encounter functionally specific competitors like Workday, who have built native cloud HCM and Financials solutions. We believe our strategy of building core functionality by industry directly into our applications, versus relying on a network of system integrators to customize functionality or connect each installation to other mission critical software is a key differentiator. The breadth of Infor’s cloud solutions also positions us as a complete provider for a range of business functions as cloud ERP continues to grow, and more customers seek enterprise-wide analytics, agility and TCO that cloud applications enable.

Our focus is on delivering differentiated industry-specific solutions with lower total ownership costs including license fees, consulting services and ongoing customer support. By increasing our scale and the range of our products, we believe we can continue to compete and win against SAP, Oracle, Workday and other ERP vendors, globally in our targeted industries.

Sales and Marketing

Sales

We market and sell our software and services solutions primarily through a direct sales force, augmented by strategic alliances with systems integrators and resellers. Our direct sales force operates in a regional “theater” model with four regions: North America, Latin America, Europe, and Asia-Pacific. Within each theater, license and subscription sales and service sales teams are aligned by industry. We also have a telesales group that focuses on inside sales to smaller customers and smaller transactions within larger customer accounts.

In addition to our direct sales teams, we have over 2,100 active partners in our ecosystem with 1,200 resellers supporting our SMB and Public Sector markets around the world and 300 Global and Regional Alliance Partners aligned with our enterprise sales organizations by theater, to provide system integration and consulting services. Whether working with resellers who are trained to independently market and sell our solutions or collaborating with Alliance Partners on large, global projects, these partners provide resources to enter new markets and grow our customer base. In addition to Channel and Alliance Partners we have an array of technology, education, support and service delivery partners who augment and enhance Infor’s product, cloud and vertical strategies. Collectively, our partners engage in joint marketing programs, presentations at seminars, attendance at trade shows and the hosting of conferences to expand our market presence through increased awareness of our software applications.

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Marketing

We have significantly increased our global marketing efforts toward achieving greater brand awareness and visibility through national and international advertising on broadcast and cable news stations, such as MSNBC, Fox Business, CNBC, Golf Channel, and Sky; private airport marketing across North America, Europe and Asia; digital marketing; and sports sponsorships of the NBA’s Brooklyn Nets, PGA Tour professional Brooks Koepka, the Swedish Ski Team, New Zealand’s professional rugby union team the Crusaders, and German Bundesliga team Borussia Dortmund. Our CEO and other C-suite executives frequently appear on national and international news programs as guest commentators to share insight and expertise, including on CNBC, Bloomberg, and Fox Business Network.

Research and Development

Since our inception, we have made substantial investments in software product development. We believe that timely development of new software applications, enhancements to existing software applications and the acquisition of rights to sell or incorporate complementary technologies and products into our software offerings are essential to maintain our competitive position in the market. The business application software market is characterized by rapid technological change, frequent introductions of new products, changes in customer demands and rapidly evolving industry standards. We continue to be committed to significant investment in research and development to enhance our existing products as well as developing new innovative applications.

Our total research and development expenses were $499.0 million for the year ended April 30, 2019, or 15.7% of revenue. As of April 30, 2019, our research and development organization consisted of approximately 5,660 employees, an increase of approximately 5.8% from the end of last year. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for further discussion of research and development expenses.

Trademarks

“Infor,” “Lawson,” “Lawson Software,” “ION,” “Infor10,” “Syteline,” “Visual,” “Infor Nexus,” “Infor Birst,” and “Coleman,” as well as other Infor product and brand names appearing in this document are trademarks of the Company in the U.S. and the European Union, among other jurisdictions. Solely for convenience, the trademarks, service marks and trade names referred to in this Annual Report are listed without the ^®, (TM) and (SM) symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. Other trademarks and trade names appearing in this document are the property of their respective holders. We disclaim proprietary interest in such marks and names of others.

Intellectual Property and Product Liability

We regard certain aspects of our internal operations, software and documentation as proprietary, and rely on a combination of contract, copyright, patent, trademark and trade secret laws and other measures, including confidentiality agreements and other contractual protections, to protect our proprietary information. We currently hold 62 U.S.-issued patents, nine pending U.S. patent applications, 11 foreign equivalent patents, and 16 foreign equivalent patent applications. While our legal and contractual mechanisms for protecting our intellectual property are helpful in protecting our market position, they may be inadequate to fully protect against individuals or companies that seek to misappropriate our proprietary technology. However, we believe that ultimately our success in the market will be more dependent on factors such as the knowledge, ability and experience of our employees, frequent software product enhancements and the timeliness and quality of support services.

We cannot guarantee that these legally available intellectual property protections will be adequate, or that our competitors will not independently develop technologies that are substantially equivalent or superior to our technology. Some of our existing business units that we and our predecessors have acquired over the years have historically licensed software to customers under a model that allowed the customer to access source code for certain product lines. In general, however, our current practice is to license and distribute only object code versions of most of the software we offer, although we often enter into source code escrow arrangements with recognized third-party source code escrow companies on terms that are customary within the software industry, which provide customer access to source code only under very limited circumstances. Access to our source code may increase the likelihood of misappropriation or other misuse of our intellectual property. In addition, the laws of certain countries in which our software products may be licensed do not protect our software products and intellectual property rights to the same extent as the laws of the U.S., and some jurisdictions are less likely to enforce such laws.

We do not believe our software products, third-party software products we offer under sublicense agreements, our trademarks, or other proprietary rights infringe the property rights of third parties. However, we cannot guarantee that third parties will not assert infringement claims against us with respect to current or future software products or that any such assertion may not require us to enter into royalty arrangements or result in costly litigation. Under the license agreements with our customers, we agree to indemnify our customers for third-party claims that may be brought against them asserting that our products infringe the intellectual property rights of those third parties.

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We are also exposed to product liability risks under applicable country and state laws. We generally attempt to limit our exposure to product liability claims with customers as part of our license agreements. However, local laws or unfavorable judicial decisions might diminish or invalidate the scope of these limitations.

Employees

As of April 30, 2019, we had approximately 17,380 employees, including approximately 2,370 in sales and marketing, 5,660 in research and development, 6,470 in services and customer support and 2,880 in administration and other. None of our employees in the U.S. are represented by a labor union. We are party to a collective labor agreement applicable to our employees in Sweden, and in certain other countries outside of the U.S. where we have operations, workers’ councils represent our employees.

Financial Information about Geographic Areas

For financial information about geographic areas see Note 20, Segment and Geographic Information, in Notes to Consolidated Financial Statements of this Annual Report for additional information.

Available Information

We announce material information, including press releases, analyst presentations and financial information regarding the Company, through a variety of means, including the Company’s website (www.infor.com), the Investors subpage of our website (www.infor.com/about/investors), 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-Investor Information” 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 Annual Report. Additionally, our electronically filed reports can be obtained on the SEC’s website at http://www.sec.gov.

We operate in a rapidly changing environment that involves numerous uncertainties and risks. Investors evaluating our company and our business should carefully consider the factors described below and all other information contained in this Annual Report. This section should be read in conjunction with the Consolidated Financial Statements and Notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Annual Report. Any of the following 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.

We face large, established competitors, specialized competitors and substantial price competition.

The nature of the IT industry creates a competitive landscape that is constantly evolving as firms emerge, expand or are acquired, as technology evolves and as delivery models change. In particular, we compete with Oracle, SAP and other larger software companies that have advantages over us due to their larger customer bases, greater name recognition, long operating and product development history, greater international presence and substantially greater financial, technical and marketing resources. If customers or prospects want to reduce the number of their software vendors, they may elect to purchase competing products from Oracle or SAP since those larger vendors offer a wider range of products. Furthermore, Oracle is capable of bundling its software with its database applications, which underlie a significant portion of our installed applications. We also compete with a variety of more specialized software and services vendors, including:

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Some competitors offer payment terms, contractual warranties, implementation terms or guarantees that are more favorable to customers and prospects. Competitors may entice our customers and prospects to switch software vendors by offering those customers or prospects free or heavily discounted products or services, and other more favorable contract terms. We may be unable to continue to compete successfully with new and existing competitors without lowering prices or offering other favorable terms to customers that lower our margins and increase our risks. We expect competition to persist and intensify, which could negatively impact our operating results and market share.

We may need to change our pricing models to compete successfully.

The intense competition we face in the sales of our products and services and general economic and business conditions can put pressure on us to change our prices. If our competitors offer deep discounts on certain products or services or develop products that the marketplace considers more valuable, we may need to lower prices or offer other favorable terms in order to compete successfully. Any such changes may reduce margins and could adversely affect operating results. Our software license updates and product support fees and hardware systems support fees are generally priced as a percentage of our net new software license fees and net new hardware systems products fees, respectively. Our competitors may offer lower pricing on their support offerings, which could put pressure on us to further discount our new license prices.

Our revenues, and in particular our SaaS subscriptions and perpetual software license fees revenues, vary from quarter-to-quarter and are difficult to predict. If we are unsuccessful in achieving anticipated levels of revenue, the value of your investment could decline substantially.

Our software subscription and license fees revenue in any quarter depends upon our subscription activity and perpetual licensing with new and existing customers in each quarter, and our ability to recognize revenues in that quarter under our revenue recognition policies. A significant portion of our future revenue is dependent upon our ability to sell software subscriptions and perpetual licenses to new customers and our existing customers continuing to license and subscribe for additional products, as well as new and existing customers purchasing consulting services and renewing their annual maintenance agreements (if installed customers) or renewing their subscriptions at current or higher service levels (if SaaS customers). If we do not continue to develop or acquire new products, subscription activity and perpetual licensing activity with existing customers will decline. Perpetual licensing activity for our products drives maintenance and services revenues because we sell maintenance and services for only our products. A decrease in perpetual licensing activity will typically lead to a decrease in services revenue in the same or subsequent quarters. If we do not have sufficient new perpetual licensing activity each year, our maintenance revenue and profit for the following year will decline because new customers or sales of additional products to existing customers are needed to offset the percentage of existing customers who scale back their businesses, reduce licenses and maintenance contracts, are acquired, or otherwise choose not to renew annual maintenance. In addition, conversion of our customer base from on-premise maintenance to SaaS subscriptions may lead to a decrease in maintenance revenue. Our sales force and marketing team must continue to generate SaaS subscription and perpetual license sales leads among existing customers and prospective customers. When we “qualify” a lead, that lead becomes part of our sales “pipeline.” If our pipeline does not continue to grow in our different markets and geographies, our revenues will eventually decline. The rate at which we convert our pipeline into actual sales can vary greatly from year to year for the following reasons:

Additionally, some of the important factors that may cause our revenues, operating results and cash flows to fluctuate from quarter to quarter include, without limitation:

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Many of these factors are outside of our control, and the occurrence of one or more of them might cause our operating results to vary widely. As such, we believe that quarter-to-quarter comparisons of our revenues, operating results, changes in our deferred revenue and unbilled deferred revenue balances and cash flows may not be meaningful and should not be relied upon as an indication of future performance.

Because we recognize subscription services revenues ratably over the term of the applicable subscription agreement, decreases or increases related to our subscription renewals or new subscription agreements may not be reflected immediately in our operating results and may be difficult to discern.

We generally recognize subscription services revenues from customers ratably over the terms of the applicable subscription agreements, which are typically one to five years. SaaS subscription services are a single performance obligation satisfied over time, and associated revenue is generally recognized ratably over the contract term once the software is made available to the customer. As a result, the majority of our reported quarterly subscriptions revenues are attributable to the recognition of unearned revenue relating to subscription agreements entered into during previous quarters. A decrease in new or renewed subscription agreements in any one quarter will not be fully reflected in our revenue in that quarter but such a decrease will negatively affect our subscriptions revenues in future quarters. As a result, the effect of significant downturns in sales and market acceptance of our CloudSuite and other SaaS subscription offerings, and potential changes in our pricing policies or rate of renewals in a particular quarter, may not be fully reflected in our results of operations until future periods. In addition, we may be unable to adjust our cost structure to reflect the changes in our subscriptions revenues as a significant majority of our related costs are expensed as incurred, while revenues are recognized over the term of the subscription agreements. As a result, increased growth in the number of our subscription customers could result in our recognition of more costs than revenues in the earlier periods of the terms of the subscription agreements. Our SaaS model also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as revenues from new subscription customers are generally recognized over the applicable subscription term.

Economic, political and market conditions can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability.

Our business is influenced by a range of factors that are beyond our control and that we have no comparative advantage in forecasting. These include:

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Macroeconomic developments could negatively affect our business, operating results or financial condition. For example, the United Kingdom’s vote to exit the EU and past recessions in the U.S. and Europe, including the debt crisis in certain countries in the European Union. A general weakening of, and related declining corporate confidence in, the global economy or the curtailment in government or corporate spending could cause current or potential customers to reduce their information technology budgets or be unable to fund software and services purchases, which could cause customers to delay, decrease or cancel purchases of our products and services or cause customers not to pay us or to delay paying us for previously purchased products and services.

In addition, political unrest in regions like the Middle East, terrorist attacks around the globe and the potential for other hostilities in various parts of the world, potential public health crises and natural disasters continue to contribute to a climate of economic and political uncertainty that could adversely affect our results of operations and financial condition, including our revenue growth and profitability. These factors generally have the strongest effect on our sales of new software licenses and related services and, to a lesser extent, also may affect our renewal rates for software license updates and product support and for SaaS offerings.

Economic conditions and regulatory changes that may result from the United Kingdom’s prospective exit from the European Union could adversely affect our business, financial condition and results of operations

In June 2016, the United Kingdom (the U.K.) held a referendum in which voters approved an exit from the European Union (the E.U.), commonly referred to as “Brexit.” The announcement of Brexit caused significant volatility in global stock markets and currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against foreign currencies in which we conduct business. The announcement of Brexit and likely withdrawal of the U.K. from the E.U. may also create further global economic uncertainty, which may cause our current and future customers to closely monitor their costs and reduce their spending on our products and services.

The U.K. continues to negotiate the terms of its exit from the E.U. At this time the U.K. is expected to depart the E.U. on or before October 31, 2019. However, both the date and the terms of the U.K.’s withdrawal remain highly uncertain. While we have not experienced any material financial impact from Brexit on our business to date, we cannot predict its future implications.

The referendum and ongoing negotiations have created significant uncertainty about the future relationship between the U.K. and the E.U. There can be no assurance regarding the duration of such negotiations or the terms of withdrawal. A withdrawal could significantly disrupt the free movement of goods, services, and people between the U.K. and the E.U., and result in increased legal and regulatory complexities, as well as potential higher costs of conducting business in Europe. Given the lack of comparable precedent, it is unclear how Brexit may negatively impact the economies of the U.K., the E.U. countries and other nations, as well as our operations in these locations. However, any of these effects of Brexit, among others, could adversely affect our financial position, results of operations or cash flows.

Our revenue is heavily dependent on renewal of maintenance agreements by our customers.

We generate substantial recurring revenue from our customer support program and other software maintenance services, most of which renew annually at the customer’s option. The level of our maintenance revenue is directly related to the number of our software products that are in active use by customers. If our customers stop using our products, if we are unable to maintain the rate of addition of new customers, or if our customers determine that they cannot afford maintenance, our maintenance revenue can be expected to decline. We expect that maintenance revenue from legacy products for which we have decreased or curtailed development funding will decline over time.

Our revenue is also dependent on renewal of subscription agreements by our customers.

We generate substantial recurring revenue from our CloudSuite and other SaaS subscription offerings, which generally renew annually once the initial term expires. Our customers have no obligation to renew their subscription agreements after their subscription terms expire, and they may not renew their subscriptions at the same or higher levels. Our subscription renewal rates may fluctuate because of several factors, including our customers’ level of satisfaction with our services, the pricing of our subscription offerings and/or the pricing of our competitors’ offerings, reductions in our customers’ spending levels due to the macroeconomic environment, or other factors. If our customers do not renew their subscription agreements, renew on less favorable terms, or renew for fewer elements of our offerings, our subscriptions revenues may decline over time.

Our sales to government clients subject us to risks including early termination, audits, investigations, sanctions and penalties.

We derive revenues from contracts with the U.S. and foreign governments, state and local governments and their respective agencies, which in many cases permit the customer to terminate their contracts at any time, without cause. Governmental entities are variously pursuing policies that affect our ability to sell our products and services. Changes in government procurement policy, priorities, technology initiatives, and/or contract award criteria may negatively impact our potential for growth in the government sector. There is increased pressure for governments and their agencies, both domestically and internationally, to reduce spending. In many cases, our government contracts are subject to the approval of appropriations being made by legislators and other government funding authorizations to fund the expenditures under these contracts. Contracts may be terminated based upon a lack of appropriated funds. Additionally, government contracts are generally subject to audits and investigations, as well as more stringent regulatory requirements and contract terms than would be applicable to contracts with private-sector clients, which could result in greater exposure to increased compliance costs, liability and restrictions that could adversely impact our financial condition or our ability to compete in these markets, including various civil and criminal penalties and administrative sanctions, termination of contracts, refund of all or a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business.

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We may not retain or attract customers if we do not develop new products and enhance our current products in response to technological changes and competing products.

The enterprise software market is faced with rapid technological change, evolving standards in computer hardware, software development, communications and security infrastructure, and changing needs and expectations of customers. If we are unable to develop new or sufficiently differentiated products and services, enhance and improve our product offerings and support services in a timely manner or position and price our products and services to meet demand, customers may not purchase or subscribe to our services. Building new products and service offerings requires significant time and investment in development. A substantial portion of our research and development resources are devoted to regulatory and maintenance requirements and product upgrades that address new technology support. These demands put significant constraints on our resources available for new product development. We also face uncertainty when we develop or acquire new products because there is no assurance that a sufficient market will develop for those products.

The market for cloud-based applications embodied in the SaaS subscription model may develop more slowly than we expect.

We offer certain of our software applications and functionality within a cloud-based IT environment that we manage and offer via a subscription-based SaaS model. Our success in growing revenue and market share from our SaaS-based software offerings will depend, to a large extent, on the willingness of our customers and the markets we serve to accept this model for commercializing applications that they view as critical to the success of their businesses. Many companies have invested substantial effort and financial resources to integrate traditional enterprise software and IT staffing into their businesses and may be reluctant or unwilling to switch to a recurring fee model for our software applications or to migrate these applications to cloud-based services. Other factors that may affect market acceptance of our SaaS applications include:

The market for these services may not develop further, or may develop more slowly than we expect, either of which would harm our business. Our business model continues to evolve and we may not be able to compete effectively, generate significant revenues or maintain profitability for our SaaS-based offerings. We have and will continue to incur expenses associated with the infrastructures and marketing of our SaaS subscription offerings in advance of our ability to recognize the revenues associated with these offerings. Demand for our CloudSuite offerings and other SaaS subscription offerings may unfavorably impact demand for certain of our other products and services including new software licenses and software license updates and product support services traditionally provided with our offerings that customers host on their own premises. With a continued shift away from the sale of perpetual software licenses to providing access to our software through subscription agreements we may, in the near term, experience a deferral of revenues and to a lesser extent cash received from our customers.

We use a limited number of third-party data centers to deliver our SaaS services. Any disruption of service at these facilities could harm our business.

We manage our SaaS services and serve all of our SaaS customers from a limited number of third-party data center facilities. While we engineer the computer and storage systems upon which our programs run, we do not control the operation of these data center facilities.

The owners of these data facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew these agreements on commercially reasonable terms, we may be required to transfer to new data center facilities or develop our own, and we may incur significant costs in doing so.

Data centers are vulnerable to security breaches, damage or interruption from any number of actions beyond our control, including human error, intentional misconduct, war or terrorist attacks, natural disasters, power losses, hardware failures, systems failures, telecommunications failures and similar events. If these data centers experience disruptions or other performance problems, our reputation and relationship with our customers may be harmed. Disruptions in services or security breaches might reduce our revenue and subject us to potential liability as our customers may ask us to issue credits or take other remedial action, terminate their subscriptions, or sue us.

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The occurrence of a natural disaster, an act of terrorism, vandalism or other misconduct, or a decision to close the facilities without adequate notice or other unanticipated problems could result in lengthy interruptions in our services.

We may be unable to identify or complete suitable acquisitions and investments; and any acquisitions and investments we do complete could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our operating results and the value of your investment.

As part of our business strategy, we intend to pursue strategic acquisitions in the future. We may be unable to identify suitable acquisitions or investment candidates. Even if we identify suitable candidates, we cannot provide assurance that we will be able to make acquisitions or investments on commercially acceptable terms. If we acquire a company, we may incur losses in the operations of that company and we may have difficulty integrating its technology, products, services, personnel and/or operations into our business. In addition, its key personnel may decide not to work for us. These difficulties could disrupt our on-going business, distract our management and workforce, increase our expenses and adversely affect our operating results. We may also incorrectly judge the value or worth of an acquired company or business. Furthermore, we may incur significant debt or issue equity securities to pay for future acquisitions or investments. If we finance acquisitions by issuing debt, we could face constraints related to the terms of and repayment obligation related to the incurrence of indebtedness which could affect the market price of our debt securities. The issuance of equity or convertible securities may be dilutive to our stockholders. If the products of an acquired company are not successful, those remaining assets could become impaired, which may result in an impairment loss that could materially adversely impact our financial position and results of operations. Other inherent risks include:

Charges to earnings resulting from acquisitions may adversely affect our operating results.

Under business combination accounting standards pursuant to the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805, Business Combinations, we recognize the identifiable assets acquired, the liabilities assumed and any non-controlling interests in acquired companies generally at their acquisition date fair values and, in each case, separately from goodwill. Goodwill as of the acquisition date is measured as the excess amount of consideration transferred, which is also generally measured at fair value, and the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed. Our estimates of fair value are based upon assumptions believed to be reasonable but which are inherently uncertain. After we complete an acquisition, the following factors could result in material charges and adversely affect our operating results and may adversely affect our cash flows:

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Substantially all of these costs will be accounted for as expenses that will decrease our net income and earnings per share for the periods in which those costs are incurred. Charges to our operating results in any given period could differ substantially from other periods based on the timing and size of our future acquisitions and the extent of integration activities. A more detailed discussion of our accounting for business combinations and other items is presented in the “Critical Accounting Policies and Estimates” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Competitors may take advantage of our limited intellectual property protection.

We consider certain aspects of our internal operations, software and documentation to be proprietary, and rely on a combination of contract, copyright, trademark and trade secret laws to protect this information. In addition, we currently hold 62 U.S.-issued patents, nine pending U.S. patent applications, 11 foreign equivalent patents and 16 foreign equivalent patent applications. Generally, copyright laws afford only limited protection because those laws do not protect product ideas. In addition, when we license our products to customers, we may provide source code for some of our products. Some customers may also access source code through a source code escrow arrangement. Access to our source code could provide an opportunity for companies to offer competing maintenance and product modification services to our customers, or infringe our intellectual property. Defending our intellectual property rights is time-consuming and costly.

Changes in intellectual property laws may disrupt or eliminate certain of our anticipated revenue stream.

Protecting our global intellectual property rights and combating unlicensed copying and use of software and other intellectual property is difficult. Any patents owned by us may be invalidated, circumvented or challenged. Any of our pending or future patent applications, whether or not being currently challenged, may not be issued with the scope of the claims we seek, if at all. While piracy adversely affects U.S. revenue, the impact on revenue from outside the U.S. is more significant, particularly in countries where laws are less protective of intellectual property rights. Any changes to foreign intellectual property legislation which would restrict our ability to enforce certain intellectual property rights, including with respect to customer non-compliance and anti-assignment and other software license terms, may disrupt or eliminate our anticipated revenue streams from those affected areas.

Others may claim that we infringe their intellectual property rights.

Many participants in the technology industry, and patent holding companies who have no independent product revenue, have an increasing number of patents and have frequently demonstrated a readiness to take legal action based on allegations of patent and other intellectual property infringement. These types of claims are time-consuming and costly to defend and may divert management’s attention from developing our business. If a successful claim is made against us and we fail to develop or license a substitute technology, our business, results of operations, financial condition or cash flows could be adversely affected.

Open source software may diminish our software subscriptions and license fees and impair the ownership of our products.

The open source community is comprised of many different formal and informal groups of companies, software developers and individuals who have created a wide variety of software and have made that software available for use, distribution and modification, often free of charge. Open source software, such as the Linux operating system, has been gaining in popularity among business users. If developers contribute enterprise application software to the open source community, and that software has competitive features and scale to business users in our markets, we will need to change our product pricing and distribution strategy to compete. If one of our developers embedded open source components into one of our products without our knowledge or authorization, our ownership and licensing of that product could be in jeopardy. Depending on the open source license terms, the use of an open source component could mean that all products delivered with that open source component become part of the open source community. In that case, our ownership rights and ability to charge license fees for those delivered products could be diminished or rendered worthless. We currently take steps to train our developers and monitor the content of products in development, but there is no assurance that these steps will always be effective.

Our products are deployed in large and complex systems and may contain defects or security flaws or be implemented incorrectly.

Although our products are tested prior to release, because our products are deployed in large and complex systems, they can only be fully tested for reliability when deployed in networks for long periods of time. Our software programs may contain undetected defects when first introduced or as new versions are released. Our customers might encounter difficulties with the implementation of our products, experience corruption of their data or encounter performance or scaling problems only after our software programs have been deployed. The services needed for implementing our products are also complex, and require knowledge and cooperation between both the customer’s and the service provider’s teams. As a consequence, from time to time we have received customer complaints or been sued. In addition, our products are combined with products from other vendors. As a result, should problems occur, it may be difficult to identify the source of the problem.

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Software and data security are becoming increasingly important because of regulatory restrictions on data privacy and the significant legal exposures and business disruptions stemming from computer viruses and other unauthorized entry or use of computer systems. We may not be able to avoid or limit liability for disputes relating to product performance, software security or the provision of services. Product defects and security flaws could expose us to product liability and warranty claims, could delay the development or release of new products or new versions of our products and could adversely affect market acceptance of our products, which could impact our future sales of products and services. In addition, we may be legally required to publicly report security breaches of our services, which could adversely impact future business prospects for those services.

Privacy and security concerns, including evolving government regulation in the area of consumer data privacy, could adversely affect our business and operating results.

We are in the information technology business, and our products and services store, retrieve, manipulate and manage our customers’ information and data as well as our own. The effectiveness of our software products relies on our customers’ storage and use of data concerning their customers and personnel, including financial, personally identifying and other sensitive data, and our business uses similar systems that require us to store and use data with respect to our customers and personnel. Our collection and our customers’ collection and use of this data might raise privacy and security concerns and negatively impact our business or the demand for our products and services. If a breach of data security were to occur, our business may be materially and adversely impacted and our products may be perceived as less desirable, which would negatively affect our business and operating results.

Regulatory focus on privacy and security concerns continue to increase globally and laws and regulations concerning the handling of personal information are expanding and becoming more complex. Governments in some jurisdictions have enacted or are considering enacting consumer data privacy legislation, including laws and regulations applying to the solicitation, collection, processing, use, disclosure, and retention of consumer data. This legislation could reduce the demand for our software products if we fail to design or enhance our products to enable our customers to comply with the privacy and security measures required by the legislation. Moreover, we may be exposed to liability under existing or new consumer data privacy legislation. Even technical violations of these laws can result in penalties that are assessed for each non-compliant transaction. If we or our customers were found to be subject to and in violation of any of these laws or other data privacy laws or regulations, our business could suffer and we and/or our customers would likely have to change our business practices. In addition, these laws and regulations could impose significant costs on us and our customers.

For example, the E.U. has adopted the General Data Protection Regulation (GDPR), a comprehensive overhaul of its data protection legislation, which became effective in May 2018. GDPR extended the scope of the data protection law to foreign companies processing personal data of E.U. residents and established stringent new obligations on companies regarding the handling of such personal data. Non-compliance with the GDPR may result in severe monetary penalties of up to 4% of worldwide revenue and includes new rights such as the right of erasure of personal data.

In addition, in June 2018, California enacted the California Consumer Privacy Act (CCPA), which is to take effect in January 2020. The CCPA will, among other things, give California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for financial penalties in the event of non-compliance and statutory damages in the event of a data security breach. In September 2018, the CCPA was amended, and there is continued uncertainty as to whether further modifications will be made or how it will be interpreted. We cannot yet predict the impact of the CCPA on our business or operations, but it may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

Changes in regulation and industry practice, including particularly regulation and practice dealing with security and privacy, could cause us additional expense.

Recent legislation has increased the responsibilities of software companies and their clients regarding financial security, identity theft and privacy. In particular, the credit card industry has adopted credit card security guidelines intended to help minimize identity theft and credit card fraud. Our customers may not effectively implement all of the updated security features that we introduce or make all necessary changes to their operating procedures, or they may fail to implement other required security measures. It is possible that, regardless of our efforts to comply with credit card company requirements or to implement sound security measures through our software code, we could be subject to claims from our customers, or their clients, if unauthorized access to credit card data occurs through the use of our software.

Moreover, certain of our customers operate in highly regulated industries and our ability to acquire and maintain their business requires us to meet the standards of such regulated industries. In particular, the evolving security and privacy requirements of our banking customers, as a response to governmental regulation, and in particular the particular commitments of each of our customers in response to these regulatory agencies, can cause such customers not to select us if we don’t implement their requirements, or cause material expenses if they require us to implement these requirements as a condition to continuing as customers. Failure to properly address the requirements of our regulated customers could cause us to lose such customers’ business and could adversely impact our financial condition or results of operations.

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We must protect our information systems against cyber threats, service interruption, misappropriation of data or breaches of security.

We face threats to our network and data security and may experience other cybersecurity incidents, which are becoming increasingly diverse and sophisticated. Third parties may have the technology or expertise to breach the security of our data and our security measures may not prevent physical security or cyber-security breaches, which could result in substantial harm to our business, our reputation or our results of operations. We rely on encryption and/or authentication technology licensed from and, at times, administered by independent third parties to secure transmission of confidential advances in computer capabilities. New discoveries in the field of cryptography or other cyber-security developments could render our security systems and information technology, or those used by our third-party service providers, vulnerable to a breach. In addition, anyone who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations. Cyber-security risks such as hacking, viruses, malicious software, ransomware, phishing attacks, denial of service attacks and other attempts to capture, disrupt or gain unauthorized access to data are rapidly evolving and could lead to disruptions in our data systems, unauthorized release of confidential or otherwise protected information or corruption of data. Any successful efforts by individuals to infiltrate, break into, disrupt, damage or otherwise steal from the Company’s, its licensees’ or its third-party service providers’ security or information systems could damage our reputation and expose us to increased costs, litigation or other liability that could adversely impact our financial condition or results of operations.

Additionally, despite our efforts to address and combat such measures, computer hackers may attempt to penetrate or bypass our data protection and other security measures and gain unauthorized access to our networks, systems and data or compromise the confidential information or data of our customers. Computer hackers may be able to develop and deploy computer viruses, worms, and other malicious software programs that could attack our products and services, exploit potential security vulnerabilities of our products and services, create system disruptions and cause shutdowns or denials of service. Data may also be accessed or modified improperly as a result of employee or supplier error or malfeasance and third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as user names, passwords or other information in order to gain access to our data, our customers’ data or our IT systems. These risks for us will increase as we continue to grow our cloud-based offerings and services and store and process increasingly large amounts of our customers’ confidential information and data and host or manage parts of our customers’ businesses in cloud-based IT environments, especially in customer sectors involving particularly sensitive data such as health sciences, financial services and the government. We also have an active acquisition program and have acquired a number of companies, products, services and technologies over the years. While we make significant efforts to address any IT security issues with respect to our acquisitions, we may still inherit such risks when we integrate these acquisitions within our business.

We could suffer significant damage to our brand and reputation if a cyber-attack or other security incident were to allow unauthorized access to or modification of our customers’ or suppliers’ data, other external data, or our own data or our IT systems or if the services we provide to our customers were disrupted, or if our products or services are perceived as having security vulnerabilities. Customers could lose confidence in the security and reliability of our products and services, including our cloud offerings, and perceive them to be not secure. This could lead to fewer customers using our products and services and result in reduced revenue and earnings. The costs we would incur to address and fix these security incidents would increase our expenses. These types of security incidents could also lead to loss or destruction of information, inappropriate use of proprietary and sensitive data, lawsuits, indemnity obligations, regulatory investigations and financial penalties, and claims and increased legal liability, including in some cases contractual costs related to customer notification and fraud monitoring.

We might experience significant errors or security flaws in our software products and services.

Despite testing prior to their release, software products frequently contain errors or security flaws, especially when first introduced or when new versions are released. The detection and correction of any security flaws can be time-consuming and costly. Errors in our software products could affect the ability of our products to work with other hardware or software products, could delay the development or release of new products or new versions of products and could adversely affect market acceptance of our products. If we experience errors or delays in releasing new software products or new versions of software products, we could lose revenues. In addition, there could be security issues with our products and networks and any security flaws, if exploited, could affect our ability to conduct internal business operations. End users, who rely on our software products and services for applications that are critical to their businesses, may have a greater sensitivity to product errors and security vulnerabilities than customers for software products generally. Software product errors and security flaws in our products or services could expose us to product liability, performance and/or warranty claims as well as harm our reputation, which could impact our future sales of products and services. In addition, we may be legally required to publicly report security breaches of our services, which could adversely impact future business prospects for those services.

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There can be no guarantee that we will receive significant revenues from our current research and development efforts for several years, if at all.

Developing software products is expensive and time consuming, and the investment in product development often involves a long return on investment cycle. We have made and expect to continue to make significant investments in research and development and related product opportunities. Accelerated product introductions and short product life cycles require high levels of expenditures for research and development that could adversely affect our operating results if not offset by revenue increases. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position. However, we typically do not expect to receive significant revenues from these investments for several years, if at all.

Deterioration in our relationships with resellers, systems integrators and other third parties that market and sell our products could reduce our revenues.

Our revenue growth will depend, in part, on adding new partners to expand our sales channels, as well as leveraging our relationships with existing partners. If our relationships with these resellers, system integrators and strategic and technology partners deteriorate or terminate, we may lose sales and marketing opportunities. Some current and potential customers rely on third-party systems integrators to implement and manage new and existing applications. These systems integrators may increase their promotion of competing enterprise software applications, or may otherwise discontinue their relationships with us.

Because we do not own all of the products that we license, we rely on our continued relationships with other software suppliers. Our failure to obtain licenses for third-party technologies could harm our business.

We license third-party software products that we incorporate into, or resell with, our own software products. We also have reseller and alliance relationships with other software suppliers’ businesses that allow us to resell their offerings with our products and services. These relationships and other technology licenses are subject to periodic renewal and may include minimum sales requirements. There can be no assurance that the licenses for these third-party technologies will not be terminated, that the licenses will be available on future terms acceptable to us, or that we will be able to license third-party software for future products. In the event that these third-party products were to become unavailable, we may be unable to readily replace these products with substitute products. Any interruption in the short term could have a detrimental effect on our ability to continue to market and sell those of our products relying on these specific third-party products and could adversely impact our business. Our use of third-party technologies exposes us to increased risks including, but not limited to, risks associated with the integration of new technology into our products, the diversion of our resources from development of our own proprietary technology and our inability to generate revenue from licensed technology sufficient to offset associated acquisition and maintenance costs.

International sales and operations subject us to risks that can adversely affect our operating results.

We derive a substantial portion of our revenues, and have significant operations, outside of the U.S. Our international operations include software development, sales, customer support and administration. We face challenges in managing an organization operating in various countries, which can entail longer payment cycles and difficulties in collecting accounts receivable, fluctuations in currency exchange rates, overlapping tax regimes, difficulties in transferring funds from certain countries and reduced protection for intellectual property rights in some countries. We must comply with a variety of international laws and regulations, including trade restrictions, local labor ordinances, and import and export requirements. The risks and challenges associated with sales to customers outside the U.S. also include:

We may experience foreign currency gains and losses.

Certain transaction gains and losses are generated from intercompany balances that are not considered to be long-term in nature that will be settled between subsidiaries. We also recognize transaction gains and losses from revaluing debt denominated in Euros and held by subsidiaries whose functional currency is the U.S. Dollar. We conduct a significant portion of our business in currencies other than the U.S. Dollar. Our revenues and operating results are affected when the U.S. Dollar strengthens or weakens relative to other currencies. Changes in the value of major foreign currencies, particularly the Euro and the British Pound relative to the U.S. Dollar, can significantly affect our revenues and operating results. Net foreign currency transaction gains and losses, resulting primarily from recognized balance sheet exposures, are recorded within earnings in the period incurred.

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Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our debt obligations.

We have a significant amount of indebtedness. As of April 30, 2019, our total debt outstanding (net of deferred financing fees, discounts and premiums) was $5,181.7 million, and we had unused commitments of $120.0 million under our revolving credit facility (without giving effect to approximately $8.8 million of outstanding letters of credit). Subject to the limits contained in our credit facilities and the indentures governing our senior notes, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify. Specifically, our high level of debt could have important consequences to the holders of our debt, including:

In addition, the annual interest rates applicable to certain of our credit facility agreements are based on a fluctuating rate of interest determined by reference to the London Interbank Offered Rate (LIBOR). Any increase in interest rates applicable to our credit agreement borrowings would increase our cost of borrowing and could adversely affect our financial position, results of operations or cash flows. Further, in July 2017, the U.K.’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. In addition, in April 2018, the Federal Reserve System, in conjunction with the Alternative Reference Rates Committee, announced the replacement of LIBOR with a new index, calculated by short-term repurchase agreements collateralized by U.S. Treasury securities, called the Secured Overnight Financing Rate (SOFR). At this time, it is not possible to predict whether SOFR will attain market traction as a LIBOR replacement. Additionally, it is uncertain if LIBOR will cease to exist after calendar year 2021, or whether additional reforms to LIBOR may be enacted, or whether alternative reference rates will gain market acceptance as a replacement for LIBOR. If LIBOR ceases to exist, we may need to renegotiate certain of our credit facility agreements which could increase our interest rate risk related to debt obligations. The potential effect of the phase-out or replacement of LIBOR on our cost of capital and net investment income cannot yet be determined.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our debt obligations, including our credit facilities and senior notes, depends on our financial condition and operating performance, which in turn are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. The credit facilities and the indentures related to our senior notes restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and any proceeds we do receive may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.

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In addition, the credit facilities and the indentures related to our senior notes contain restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt.

Repayment of our debt is dependent on cash flow generated by our subsidiaries.

Our subsidiaries own substantially all of our assets and conduct substantially all of our operations. Accordingly, repayment of our indebtedness is dependent, to a significant extent, on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness. Each subsidiary is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. A significant portion of our revenue is generated by subsidiaries located outside of the U.S. While the indentures related to our senior notes limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to certain qualifications and exceptions. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.

Litigation may adversely affect our business, financial condition and results of operations.

We are subject to legal and regulatory requirements applicable to our business and industry throughout the world. We are subject to various legal proceedings, including intellectual property infringement claims and the risk of litigation by employees, customers, patent owners, suppliers, stockholders or others through private actions, class actions, administrative proceedings or other litigation. Litigation can be lengthy, expensive, and disruptive to our operations and results cannot be predicted with certainty. There may also be adverse publicity associated with litigation, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results of operations. Additional information regarding certain of the lawsuits we are involved in is discussed under Note 14, Commitments and Contingencies – Litigation, of Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

Regional business disruptions could adversely affect our operating results.

A significant portion of our critical business operations, including research and development, product maintenance, services support, and general and administrative support are concentrated in a few geographic areas. A disruption or failure of our information and communication systems could cause delays in completing sales and providing maintenance and services to customers. A major earthquake, fire or other catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems could severely affect our ability to conduct normal business operations and, as a result, our future operating results could be materially and adversely affected.

We must attract and retain account executives in our sales organization to achieve our revenue goals.

Revenue growth, and in particular software license revenue growth, requires that we have a sufficient number of trained account executives in our sales organization to develop leads and call on prospective customers. Competition in our industry for experienced account executives is intense. Competitors and other software companies may lure away our account executives through signing bonuses and other special incentives. The failure to attract and retain account executives will negatively impact our revenue growth. When we hire a new account executive, the time period required for that person to become productive will vary, depending on their experience and training and the customer pipeline and length of sales cycle.

If we are unable to attract and retain senior management, software developers, services consultants, finance and accounting specialists, and other qualified personnel, we will be unable to develop new products and increase our revenue and profitability.

We also rely on the continued service of our senior management, software developers, services consultants, finance and accounting specialists, and other key employees. In the software industry, there is substantial and continuous competition for highly skilled business, product development, technical, financial and other personnel. The failure to attract, train, retain and effectively manage employees could negatively impact our development and efforts and cause a degradation of our customer service. If we are unable to attract and retain finance and accounting personnel who have experience with the software industry and U.S. accounting requirements, we will have to rely on more costlier contractors to fill the roles necessary for us to meet our governance and regulatory requirements.

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Our periodic workforce restructurings can be disruptive.

We have in the past restructured or made other adjustments to our workforce, including our direct sales force and development and support teams, all of which are important to our business, in response to management changes, product changes, performance issues, acquisitions and other internal and external considerations. In the past, our attempts to realign our sales force and other restructurings have generally resulted in a temporary lack of focus and reduced productivity. These effects could recur in connection with future acquisitions and other restructurings, and we may be required to incur financial charges in the period when we make such decisions, which could have a material adverse impact on our results of operations for that period. We may decide to take additional restructuring actions from time to time to improve our operational efficiencies.

Our insurance coverage might not be sufficient and uninsured losses may occur.

We maintain insurance coverage to protect us against a broad range of risks, at levels we believe are appropriate and consistent with current industry practice. Our objective is to exclude or minimize risk of financial loss at reasonable cost.

Nevertheless, we could still be subject to risks in the following areas, among others:

Any one or more of these events could have an adverse effect on our business, financial position, profit, and cash flows.

We are required to delay revenue recognition into future periods for portions of our license and maintenance fee activity.

Our financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). Under those rules, we are required to defer revenue recognition for software subscriptions and license fees and product updates and support fees in situations that include the following:

We expect that we will continue to defer recognition of portions of our license and maintenance fee activity in each period. The amount of software subscriptions and license fees revenue and product updates and support fees deferred may be significant and will vary each quarter, depending on the specific terms of contracts executed during each quarterly period. As a result, much of the revenue we report in each quarter is attributable to agreements entered into during previous quarters. Consequently, a decline in sales to new customers, renewals by existing customers or market acceptance of our products in any one quarter will not necessarily be fully reflected in the revenues in that quarter and will negatively affect our revenues and profitability in future quarters.

We may have exposure to additional tax liabilities.

As a multinational organization, we are subject to income taxes as well as non-income based taxes in both the U.S. as well as in various foreign jurisdictions. Significant judgment is required in determining our worldwide income tax provision and other tax liabilities. In the ordinary course of a global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain. Although we believe that our tax estimates are reasonable, there is no assurance that the final determination of tax audits or tax disputes will not be different from what is reflected in our historical income tax provisions and accruals. We are also subject to non-income taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes, both in the U.S. and various foreign jurisdictions. We are regularly under audit by tax authorities with respect to these non-income taxes and may have additional exposure to additional non-income tax liabilities.

Our effective tax rate may increase or fluctuate, which could increase our income tax expense and reduce our net income.

Our effective tax rate can be adversely affected by several factors, many of which are outside of our control, including:

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Based upon our corporate structure, a higher proportion of our income before taxes may be subject to U.S. tax compared to our predecessor companies and company groups. Since the combined U.S. federal and state tax rate is typically higher than the tax rates of the non-U.S. jurisdictions in which we operate, our tax expense and cash tax costs may increase as a result.

We report our results of operations in part based on our determination of the amount of taxes owed in the various tax jurisdictions in which we operate. Periodically, we receive notices from the relevant tax authorities claiming that we owe a greater amount of tax than we have reported. We regularly engage in discussions, and sometimes disputes, with these tax authorities regarding the amount of taxes owed. If the ultimate determination of our taxes owed is for an amount in excess of the tax provision we have recorded, our operating results, cash flows, and financial condition could be adversely affected.

In addition, our tax provision could be negatively impacted by changes in the tax laws or other tax reforms in foreign jurisdictions. Faced with continuing global fiscal challenges, many countries, various levels of government, and international organizations are increasingly focused on tax reform and other legislative or regulatory action to increase tax revenue and to ensure that corporations are taxed on a larger percentage of their earnings. For example, the Organisation for Economic Co-operation and Development (OECD), which represents a coalition of member countries, has recently issued recommendations that would make substantial changes to numerous long-standing tax positions and principles. Under its base erosion and profit shifting (BEPS) project, the OECD provided changes to guidance covering various topics, including transfer pricing, country-by-country reporting and definitional changes to permanent establishment. Many of these changes, if implemented, could increase uncertainty in our tax positions and may adversely affect our provision for income taxes, increase our effective tax rate and have a material adverse impact on our operating results, cash flows, and financial condition.

The final impacts of the recently enacted U.S. federal tax reform could materially impact our results of operations.

On December 22, 2017, the U.S. government enacted comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the 2017 Tax Act). The 2017 Tax Act includes numerous changes to the U.S. tax code that affect our business, including among other things: permanently reducing the U.S. federal corporate tax rate from 35.0% to 21.0%; limiting various business deductions including interest expense; modifying the maximum deduction of net operating loss generated in tax years beginning after December 31, 2017; creating a provision to tax global intangible low-taxed income (GILTI) based on the Company’s annual aggregate foreign subsidiaries’ income in excess of certain qualified business asset investment returns; a base-erosion anti-abuse tax (BEAT); a tax on foreign-derived intangible income (FDII); and imposing a one-time repatriation tax on deemed repatriated earnings and profits of U.S.-owned foreign subsidiaries (Transition Tax).

Certain provisions of the 2017 Tax Act impacted Infor in fiscal 2018 including the lower U.S. federal corporate tax rate. Other significant provisions were effective at the beginning of fiscal 2019 including the interest limitation provisions and the GILTI provisions. The final impacts of the 2017 Tax Act may materially impact our financial statements due to among other things; changes in interpretations of the 2017 Tax Act by the Internal Revenue Service, the passage of final proposed regulations defining the application of the 2017 Tax Act, other legislative actions taken to address questions that arise because of the 2017 Tax Act, and any changes in accounting standards for income taxes or related interpretations in response to the 2017 Tax Act. As a result, our financial position, results of operations and cash flows could be adversely affected.

Changes in financial accounting standards or practices may adversely affect our results of operations or cause unexpected fluctuations in our reported operating results.

Changes in GAAP and applicable interpretations could have a negative impact on our reported financial results and may affect our reporting of transactions completed before the effective date of such guidance. We are currently evaluating the impact that new accounting pronouncements and varying interpretations of accounting pronouncements might have on our financial position, results of operations and cash flows. See Note 2, Summary of Significant Accounting Policies Recent Accounting Pronouncements—Not Yet Adopted, in Notes to Consolidated Financial Statements of this Annual Report. Depending upon the outcome of our evaluation of these new accounting pronouncements, and the potential impact of future accounting pronouncements, implementation guidelines, and interpretations, we may be required to modify our reported results or business practices, which could have a material adverse impact on our results of operations.

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The obligations associated with public filings require significant resources and management attention.

We are currently a voluntary filer and not subject to the filing requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. However, we have filed annual, quarterly and current reports with respect to our business and financial condition. In addition, we have developed and maintained what we believe are proper and effective internal controls over financial reporting. The need to maintain the corporate infrastructure demanded of a registrant may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition.

Our Management’s Report on Internal Control over Financial Reporting required pursuant to Section 404 of the Sarbanes-Oxley Act (Section 404) was not subject to attestation by our independent registered public accounting firm. If our independent registered public accounting firm were to perform the requisite work related to attestation, they may find unidentified control issues that could adversely affect investor confidence in our company and, as a result, the value of our company.

We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a registrant. However, the measures we take may not be sufficient to satisfy our obligations. In addition, we cannot predict or estimate the amount of additional costs we may incur in order to comply with these requirements.

None.

Our properties consist primarily of leased office facilities which we use for our sales, marketing, consulting, customer support, product development, executive and administrative functions. Our corporate headquarters and executive offices are located in New York, New York where we currently lease approximately 149,100 square feet of space. The leases on these facilities expire on February 28, 2025 and December 31, 2027. Our main operations center is in Alpharetta, Georgia where we lease approximately 113,800 square feet of space. The lease on this facility expires October 31, 2024. We also lease approximately 623,200 square feet of space in 34 other locations in the U.S., primarily for regional sales and support offices. In addition, internationally we lease or own approximately 2,453,000 square feet of space in 120 locations in 43 countries. Expiration dates of leases on all of our facilities range from 2019 to 2030. We believe that our existing domestic and international facilities are sufficient to meet our current needs. In addition, we believe suitable additional or alternative space would be available on commercially reasonable terms to accommodate expansion of our operations, if required. The restructuring plans we have implemented over the past few years have involved the exit or reduction in space of certain of our leased facilities. See Note 11, Restructuring Charges, in Notes to Consolidated Financial Statements of this Annual Report for additional information. As of April 30, 2019, we have sublet approximately 37,600 square feet of the above space and have identified an additional 34,900 square feet that is being actively marketed for sublease or disposition.

Information regarding our legal proceedings can be found in Note 14, Commitments and Contingencies - Litigation, in Notes to Consolidated Financial Statements of this Annual Report and is incorporated herein by reference.

Not applicable.

PART II

Market Information

There is no established public trading market for our common stock. As of April 30, 2019, there were 1,000 shares of Infor, Inc. common stock authorized, issued and outstanding, each with a par value of $0.01 per share. All the outstanding shares of our common stock are held by Infor Software Parent, LLC.

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Dividends

We may from time-to-time voluntarily service interest payments related to debt held by certain of our affiliate companies which may be funded through dividend distributions to such affiliates. In addition, we may from time-to-time fund equity distributions by our affiliate companies to members of our executive management team under certain of their equity awards through dividend distributions to such affiliates. See Note 17, Dividends, and Note 21, Related Party Transactions – Dividends Paid to Affiliates, in Notes to Consolidated Financial Statements of this Annual Report for additional information.

Purchases of Equity Securities

There were no purchases of our equity securities during fiscal 2019 or 2018.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following table sets forth Infor’s selected historical consolidated financial data for the periods and at the dates indicated and should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7, and our Consolidated Financial Statements and the related Notes to those statements appearing in Part IV, Item 15. The selected consolidated financial data has been derived from our audited Consolidated Financial Statements. Our historical results included below and elsewhere in this Annual Report are not necessarily indicative of Infor’s future performance.

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The following discussion should be read in conjunction with the Selected Historical Consolidated Financial Data presented above, our Consolidated Financial Statements, the Notes to those statements and other financial information appearing elsewhere in this Annual Report.

The discussion and analysis of our financial condition and results of operations are based upon our audited financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of our financial statements, the reported amounts of revenues and expenses during the reporting periods presented, as well as our disclosures of contingent assets and liabilities. 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, useful lives of intangible assets and property and equipment, income taxes, restructuring obligations and contingencies and litigation. We base our estimates and assumptions on our historical experience and on other information available to us at the time that these estimates and assumptions are made. We believe that these estimates and assumptions are reasonable under the circumstances and form the basis for making judgments about the carrying values of our assets and liabilities that are not readily apparent from other sources. Actual results and outcomes could differ from our estimates.

Any reference to we, our, us, Infor 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 enterprises and small-to-midsize companies (SMB) in many industries, including manufacturing, distribution, healthcare, public sector, retail, and hospitality. We deliver integrated enterprise business solutions and offer software license updates and product support as well as other services including consulting, advanced product services, hosting and education.

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We offer a broad range of software applications and industry-specific solutions that we believe help our customers improve their business processes and reduce costs, resulting in better business or operational performance. Our software products are often “mission critical” for many of our customers as they automate and integrate essential business processes to better manage suppliers, partners, customers, employees, and general business operations. Our industry-specific approach differentiates us from our large enterprise software competitors, whose primary focus is on business applications that are less specialized, require costly customization, and impede companies’ ability to maximize the value of their business data. We believe our products better prepare companies to compete in the digital age by modernizing their operations and enabling business insights and analytics derived from “mission critical” data in the enterprise and across the supply chain, as well as providing a lower relative total cost of ownership.

We specialize in and target specific industries, or verticals, with integrated software suites of our industry-specific applications as well as horizontal (industry-nonspecific) applications. Our industry CloudSuites are built around one of our industry-specific ERP applications. Our horizontal applications augment the ERP to manage industry-nonspecific processes, including CRM, EAM, financial management, HCM, and SCM. Underlying our software suites is Infor OS, our foundational operating system that integrates applications, delivers business insights and analytics, and enables flexibility to support changing business conditions and growth. Our suites are also integrated with our Infor Nexus commerce network, which helps manage flow of inventory, transactions, and information across a global supply chain.

We generate revenue primarily from providing access to software products through our SaaS subscription offerings, the sale of perpetual or term software licenses granting customers use of our software products, 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 maintenance 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 sophisticated global customer base across three geographic regions—the Americas, EMEA and APAC. Our customers range from Fortune 500 enterprises to SMBs. We have approximately 17,380 employees worldwide and have offices in 44 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 fiscal 2019, our Americas, EMEA and APAC regions generated approximately 60.3%, 30.5% and 9.2% of our revenues, respectively. Though we have a considerable presence outside of the U.S. today, we believe we have significant opportunities to expand internationally and capture market share, in particular in EMEA as more companies embrace cloud application deployment, and in APAC as countries achieve the critical infrastructure to support cloud business applications.

Fiscal 2019 Overview

Fiscal 2019 realized the completed alignment of Infor’s go-to-market behind our pivot to multi-tenant cloud software, with sales, services, and support business units configured to focus on continuous SaaS customer lifecycle and driving their cloud adoption strategy. We continued to invest in industry specific capabilities within our CloudSuites to minimize the need for customizations while still enabling critical business processes required by customers from core applications. From a competitive perspective, we believe that we have strengthened our position as the provider of the broadest set of enterprise cloud software with deep industry capabilities natively built in the application.

Our cloud revenues have grown to account for approximately 69% of our total software subscriptions and license fees revenues in fiscal 2019. Our cloud customers access our cloud products from 120 countries. The largest global enterprises are embracing the cloud for mission-critical systems such as ours, and we expect this demand to lead to accelerated growth.

We continue to advance technologies that help customers maximize the value of their full range of enterprise technologies by connecting workflows and data across cloud and legacy environments. Our technology solutions such as Infor Operating Service, Coleman Artificial Intelligence, Birst Enterprise Analytics, and Infor Data Lake introduced key capabilities in Fiscal 2019 that streamline user experience across cloud applications, bring together enterprise data from both cloud and legacy software for holistic insights and power recommendations based on machine learning to aid business decisions.

In fiscal 2019, our total revenues were approximately $3.2 billion and were up 3.3%, excluding the unfavorable foreign currency impact of 1.6%, compared to fiscal 2018. We realized growth across all our geographic regions driven by demand for our expanding CloudSuite offerings. Our SaaS subscription revenues were up 22.3%, excluding the unfavorable foreign currency impact of 1.0%, in fiscal 2019 compared to fiscal 2018. The total number of SaaS transactions we entered into in fiscal 2019 increased 33.7% compared to fiscal 2018, including an over 77.0% increase in transactions valued at greater than $1.0 million. With our shift to SaaS subscriptions, our fiscal 2019 perpetual software license fees revenues decreased 10.5%, excluding the unfavorable foreign currency impact of 1.9%, compared to fiscal 2018. Consulting services revenues were also up across all regions more than offsetting a slight decline in our product updates and support fees. Our customer retention rate continues to exceed 93%.

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Adoption of New Accounting Standards

Effective May 1, 2018, we adopted the FASB guidance related to revenue recognition included in ASC 606, Revenue from Contracts with Customers (ASC 606), using the modified retrospective transition method. See Note 2, Summary of Significant Accounting Policies – Adoption of New Accounting Pronouncements, in Notes to Consolidated Financial Statements of this Annual Report for additional information. As a result, we have changed our accounting policy for revenue recognition. Our results of operations for the year ended April 30, 2019, are presented under ASC 606, while amounts for the years ended April 30, 2018 and 2017 have not been adjusted and continue to reflect amounts as originally reported in accordance with our historic accounting under ASC 985-605, Software—Revenue Recognition (ASC 985-605), for revenues related to software license, product updates and support, and related service revenues, and ASC 605, Revenue Recognition (ASC 605), for revenues related to non-software deliverables such as SaaS subscriptions and related service revenue.

U.S. Federal Tax Reform

On December 22, 2017, the U.S. government enacted comprehensive tax reform legislation known as the Tax Cuts and Jobs Act (the 2017 Tax Act). The 2017 Tax Act includes numerous changes to the U.S. tax code that affect our business, including among other things: permanently reducing the U.S. federal corporate tax rate from 35.0.% to 21.0%; limiting various business deductions including interest expense; modifying the maximum deduction of net operating loss generated in tax years beginning after December 31, 2017; creating a provision to tax global intangible low-taxed income (GILTI) based on the Company’s annual aggregate foreign subsidiaries’ income in excess of certain qualified business asset investment returns; a base-erosion anti-abuse tax (BEAT); a tax on foreign-derived intangible income (FDII); and imposing a one-time repatriation tax on deemed repatriated earnings and profits of U.S.-owned foreign subsidiaries (Transition Tax).

Certain provisions of the 2017 Tax Act impacted Infor in fiscal 2018 including the lower U.S. federal corporate tax rate. The reduction in the U.S. federal corporate tax rate was effective as of January 1, 2018, resulting in a blended fiscal 2018 statutory rate for Infor of approximately 30.3% based on pre- and post- 2017 Tax Act rates. Other significant provisions were effective at the beginning of fiscal 2019 including the interest limitation provisions and the GILTI provisions.

In transitioning to the new reformed tax system, the 2017 Tax Act imposed a one-time tax on the deemed repatriation of earnings of certain foreign subsidiaries that were previously tax deferred. The Transition Tax required the Company to include certain untaxed foreign earnings of non-U.S. subsidiaries in our fiscal 2018 taxable income. Such foreign earnings are generally subject to a one-time tax at 15.5% on the amount held in cash or cash equivalents, and at 8.0% on the remaining non-cash amounts. See Note 18, Income Taxes, in Notes to Consolidated Financial Statements of this Annual Report.

During the third quarter of fiscal 2019, we completed our accounting and recorded the applicable adjustments to the SAB 118 provisional amounts for the income tax effects of the 2017 Tax Act recorded in fiscal 2018. Due to the Company’s full U.S. valuation allowance, the adjustments made to the provisional estimate during fiscal 2019 did not have a material impact on our Consolidated Financial Statements. The net change recorded from the completion of our accounting for the provisional estimate was a $22.5 million increase of the estimated Transition Tax liability from $79.7 million to $102.2 million offset by a corresponding adjustment to U.S. deferred tax assets.

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, in Notes to Consolidated Financial Statements of this Annual Report for additional information related to our recent acquisitions. Operating results relating to these acquisitions have been included in our results of operations as of the applicable acquisition dates.

We believe we can fund our future acquisitions with our internally available cash, cash equivalents and marketable securities, cash generated from operations, additional borrowings, or additional equity. 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 2019 Acquisitions

ReServe Interactive

On April 4, 2019, we acquired Efficient Frontiers, Inc. dba ReServe Interactive (the ReServe Interactive Acquisition). Based in Livermore, California, ReServe Interactive is a provider of cloud-based sales and catering, restaurant reservations, and floor management software that serves the restaurant, sports and entertainment, event center, golf and country club, and hotel markets in the U.S. and Canada. The ReServe Interactive Acquisition will enable Infor to offer more functionality through Infor CloudSuite Hospitality, and increase Infor’s presence in non-hotel hospitality venues such as entertainment centers, stadiums, wineries and conference and convention centers.

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Alfa-Beta

On December 3, 2018, we acquired Alfa-Beta Solutions B.V. and Alfa-Beta Solutions GmbH (together, Alfa-Beta) (the Alfa-Beta Acquisition). Based in Arnhem, Netherlands, Alfa-Beta is a consulting firm specializing in Infor M3 and business intelligence in the food & beverage industry across Benelux and Germany. The Alfa-Beta Acquisition expands Infor’s services capabilities to support our growing food & beverage customer base in Europe.

Vivonet

On September 13, 2018, we acquired Vivonet Inc. and Vivonet Acquisition Ltd. (together, Vivonet) for $25.2 million, net of cash acquired and including contingent consideration of $1.3 million recorded at the time of the acquisition (the Vivonet Acquisition). The total purchase price may also include up to an additional $13.7 million if certain future performance conditions are met. Based in Vancouver, Canada, Vivonet is a provider of consumer, operational and enterprise level cloud-based technology solutions for the hospitality industry. Vivonet offers solutions for point-of-sale (POS), kiosks, kitchen systems, payments, labor scheduling, and food and labor cost management to businesses in the hospitality industry across Canada and the United States. The Vivonet Acquisition complements and further expands our hospitality and CloudSuite offerings by adding POS and other functionality and extending our reach to companies in the food service management, full and quick service establishment, and hotel food and beverage outlet micro-verticals.

Fiscal 2018 Acquisitions

Asset Acquisition

On February 2, 2018, we acquired certain assets of Arvato Systems GmbH, based in Guetersloh, Germany. We acquired Arvato’s order management system, Aroma, for $27.9 million, including contingent consideration of $8.1 million. The total purchase price may also include up to an additional $26.9 million if certain future performance conditions are met during our fiscal years 2019 through 2022. The acquired cross-channel commerce management solution, which will be marketed under the name Infor Networked Order Management, provides a wide range of benefits for our customers that complements and further expands Infor CloudSuite Retail and our supply chain management offerings.

Birst

On May 31, 2017, we acquired Birst, Inc. (Birst) for $68.5 million, net of cash acquired and including contingent consideration of $0.3 million recorded at the time of the purchase (the Birst Acquisition). 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.

Fiscal 2017 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 will help 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 $17.7 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), 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.

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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 which was paid on the first anniversary of the closing date of the Starmount Acquisition. 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 enables 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 $22.1 million, net of cash acquired and including contingent consideration of $7.5 million recorded at the time of the purchase (the Merit Acquisition). 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 fiscal 2018, we amended our Credit Agreement to refinance our outstanding Euro-based first lien term loans under our credit facilities at favorable interest rates and extended the maturity date of our revolving credit facility.

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

See Liquidity and Capital Resources – Long-Term Debt, below for details of these financing activities.

In fiscal 2019, our sponsors made new capital contributions to IGS Holding LP (IGS Holdings, an affiliate of the parent company of Infor) of $500.0 million, of which $485.0 million was contributed as equity to Infor, Inc. This $500.0 million represents a portion of the additional investments that we announced on January 16, 2019. Infor’s proceeds from the new equity contribution were used to redeem our Senior Secured Notes. See Note 21, Related Party Transactions and Note 12, Debt, in Notes to Consolidated Financial Statements of this Annual Report.

In fiscal 2018, we completed the Birst Acquisition. See Note 3, Acquisitions – Fiscal 2018—Birst, in Notes to Consolidated Financial Statements of this Annual Report. In conjunction with the Birst Acquisition, certain of our sponsors and senior executives made new capital contributions of $75.0 million which were used to fund the Birst Acquisition purchase consideration.

In fiscal 2017, we completed the Predictix Acquisition. See Note 3, Acquisitions – Predictix, in Notes to Consolidated Financial Statements of this Annual Report. In conjunction with the Predictix Acquisition, certain of the sponsors made new capital contributions to Infor Enterprise Applications, LP (Infor Enterprise), which is 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.

In addition, in the first quarter of fiscal 2017, we paid dividends to Infor Software Parent, LLC (HoldCo), an indirect holding company of Infor, of $111.5 million and HoldCo made an equity contribution to Infor, Inc. of $67.0 million. See Note 21, Related party Transactions – Dividends Paid to Affiliates, in Notes to Consolidated Financial Statements of this Annual Report.

Restructuring Activities

Over the past few years, in response to the challenging and sometimes uncertain domestic and global economic conditions, we have undertaken certain restructuring actions to reduce our headcount and streamline our operations. We have also taken certain actions to better focus our efforts on our targeted industry-specific solutions. In addition, as a result of our active acquisition program, we have taken certain actions related to acquired entities from time-to-time to streamline back-office functions and eliminate redundancies incurred through acquisitions. We also restructured and consolidated office lease arrangements to eliminate redundant locations worldwide.

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Our results for fiscal 2019, 2018 and 2017 include restructuring charges of $32.5 million, $18.6 million and $39.5 million, respectively, relating to these actions. We continue to closely monitor our discretionary spending while preserving targeted investments that we believe will facilitate our long-term growth and increase our operational efficiencies. We may consider possible future actions to reduce our operating costs if circumstances warrant.

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 fiscal 2019, the average exchange rates for the U.S. Dollar against the Euro and British Pound strengthened by approximately 2.9% and 2.6%, respectively, as compared to the average exchange rates for fiscal 2018. For fiscal 2018, the average exchange rates for the U.S. Dollar against the Euro and British Pound weakened by approximately 8.4% and 3.5%, respectively, as compared to the average exchange rates for 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 exchange rates in effect in the prior comparable period) rather than the average 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:

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Critical Accounting Policies and Estimates

Our Consolidated Financial Statements are prepared in conformity with GAAP as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 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 significant accounting policies are described in detail in Note 2, Summary of Significant Accounting Policies, in Notes to Consolidated Financial Statements of this Annual Report. The policies that reflect those areas that require more significant use of estimates, judgments and assumptions in the preparation of our financial statements include the following:

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.

Revenue Recognition

Revenue is a key component of our results of operations and is a key metric used by management and investors to evaluate our performance. We generate revenues primarily by providing SaaS subscriptions and licensing our software, providing software support and product updates, and providing consulting services to our customers. Revenue recognition for software businesses is very complex. We follow specific guidelines in determining the proper amount of revenue to be recorded. However, certain judgments affect the application of our revenue recognition policy. Revenue results are difficult to predict, and any shortfall in revenue or delay in recognizing revenue could cause our operating results to vary significantly from year to year. The significant judgments for revenue recognition typically involve whether collectability can be considered probable and whether fees are fixed or determinable. In addition, our transactions often consist of multiple-element arrangements, which typically include software license fees, maintenance and support fees and consulting service fees. The amounts of revenue reported in our Consolidated Statements of Operations may vary, due to the amount of judgment required to address significant assumptions, risks and uncertainties in applying the guidelines under GAAP.

We apply the provisions of ASC 606 to determine the measurement of revenue and the timing of when it is recognized. Under ASC 606, revenue is measured as the amount of consideration we expect to be entitled to, in exchange for transferring products or providing services to our customers, and is recognized when performance obligations under the terms of contracts with our customers are satisfied. ASC 606 prescribes a five-step model for recognizing revenue from contracts with customers: (1) identify contract(s) with the customer; (2) identify the separate performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the separate performance obligations in the contract; and (5) recognize revenue when (or as) each performance obligation is satisfied.

We account for contracts with our customers when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights regarding products or services to be transferred are identified, payment terms are identified, the contract has commercial substance and collection of the consideration is probable. We utilize written contracts as the means to establish the terms and conditions by which our products, product updates and support and/or consulting services are sold to our customers.

Performance obligations are promises in a contract to transfer distinct products or services to our customers and is the unit of account under ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when or as the performance obligation is satisfied. A product or service is a distinct performance obligation if our customer can both benefit from the product or service either on its own or together with other resources that are readily available to the customer and it is separately identifiable from other items within the context of the contract. Performance obligations are satisfied by transferring control of the product or service to our customers. Control of the product or service is transferred either at a point in time or over time depending on the performance obligation.

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Our revenues are generated primarily by providing access to our SaaS subscriptions, licensing our software, providing product updates and support related to our licensed products, and providing consulting services to our customers. Generally, revenue from software license sales is recognized upon delivery; revenues from SaaS subscriptions and product updates and support are recognized ratably over time; and revenues from consulting services are recognized as performed. Revenue is recorded net of applicable taxes. Our specific revenue recognition policies are as follows:

SaaS Subscriptions

Our SaaS subscriptions revenues are primarily from granting customers the right to access software products through our cloud-based SaaS subscription offerings. Under a SaaS subscription agreement, our customer receives a right to access the software for a specified period of time in an environment hosted, supported, and maintained by Infor. SaaS subscription services are a single performance obligation satisfied over time, and associated revenue is generally recognized ratably over the contract term once the software is made available to the customer. Our SaaS subscription offerings are typically sold with one to five-year subscription terms, generally invoiced in advance of each annual subscription period, and are non-cancelable during the committed subscription term.

Consulting services sold in conjunction with SaaS offerings such as implementation, configuration, customization, training, and data conversion services are considered separate performance obligations. Consequently, they are recognized separately from the SaaS subscription agreement, and applicable revenue is typically recognized as the services are delivered. See Contracts with Multiple Performance Obligations below.

Software License Fees

Our software license fees revenues are primarily from sales of perpetual software licenses, granting customers the license right to use our software products, with no expiration date. Perpetual software licenses are satisfied at a point in time, and associated revenue is recognized upon transfer of control of the software (i.e. when the customer can access, use, and benefit from the software license).

Certain of our software products are offered as term-based license contracts, under which we grant customers the license right to use the software for a specified period. Term software licenses are satisfied at a point in time and associated revenue is recognized upon the later of 1) delivery of the software, or 2) the beginning of the period in which the customer has received the license right to use the software.

For customer contracts that include software license fees, implementation and/or other consulting services, the portion of the transaction price allocated to software licenses is generally recognized when delivered. The implementation and consulting services are typically distinct performance obligations and qualify for separate recognition. The portion of the transaction price allocated to implementation and other consulting services is generally recognized as such services are performed. See Contracts with Multiple Performance Obligations below.

Product Updates and Support Fees

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. These post contract support (PCS) services are stand-ready performance obligations that are satisfied over time, and considered a series of distinct services that are substantially the same with the same duration and measure of progress. Revenues for PCS services are recognized on a straight-line basis over the term of the service period. The term of our product updates and support services agreements is typically 12 months. Agreements are typically invoiced annually in advance of the service period.

Consulting Services and Other Fees

We also provide consulting services, including systems implementation and integration services, consulting, training, and application managed services. Our consulting services are contracted for in conjunction with the licensing of our software products or SaaS subscription offerings and/or on a standalone basis. Most of our services are sold under specific software services agreement terms, are priced separately from other promises, and meet the criteria for being considered separate performance obligations as they do not significantly customize or modify the software, are generally not essential to the functionality of our software products, and are also available from third-party vendors and systems integrators.

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The majority of our consulting services agreements are provided under time and materials contracts, and the performance obligations are satisfied and related revenues are recognized over time as the services are provided.

Our fixed price service contracts typically qualify as performance obligations that are satisfied over time and therefore are recognized on a proportional performance basis. For these fixed price projects, progress is measured based on labor hours performed to date relative to the total expected labor hours to complete the project. When it cannot be demonstrated that services meet the criteria for recognition over time, revenue from fixed price engagements is recognized only at points in time when the customer obtains control of promised products.

Consulting services and other fees also include hosting services. Customers who elect to host their software licenses by Infor have the contractual right to take possession of the software at any time during the hosted period. The customer has the right to choose not to renew hosting services upon its expiration and can deploy the software internally or contract with another party unrelated to Infor to host the software. The software provides standalone usage and functionality and, therefore, is not dependent upon the hosting service. Therefore, customers can self-host and any penalties to do so are insignificant. Accordingly, fees allocated to the hosting performance obligation are recognized once the service begins, separate from software licenses, and then ratably over the term of the hosting service.

Consulting services and other fees also include education services and fees related to Inforum, our customer event. Revenues related to these services are recognized when the services are provided or when the fees are received.

Contracts with Multiple Performance Obligation

We also enter into contracts that may include a combination of our various products and services offerings including SaaS subscriptions, software licenses, product updates and support, consulting services, and hosting services. For contracts with multiple performance obligations, we account for individual performance obligations separately if they are distinct. Significant judgment may be required to identify distinct obligations within a contract. The total transaction price is allocated to the individual performance obligations based on the ratio of the relative established standalone selling prices (SSP), or our best estimate of SSP, of each distinct product or service in the contract. Revenue is then recognized for each distinct performance obligation as described in the specific revenue recognition policies above.

Contract Modifications

Contract modifications may create new, or change existing, enforceable rights and obligations of the parties to the contract. We generally modify an existing contract using a new order form, an addendum, a signed service change order, or new services work orders. A contract modification is accounted for as a new contract if it reflects an increase in scope that is regarded as distinct from the original contract and is priced in-line with the standalone selling price for the related product or services obligated. If a contract modification is not considered a new contract, the modification is combined with the original contract and the impact on the revenue recognition profile depends on whether the remaining products and services are distinct from the original contract. If the remaining goods or services are distinct from those in the original contract, all remaining performance obligations will be accounted for on a prospective basis with unrecognized consideration allocated to the remaining performance obligations. If the remaining goods or services are not distinct, the modification will be treated as if it were a part of the existing contract, and the effect that the contract modification has on the transaction price, and on our measure of progress toward satisfaction of the performance obligations, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification on a cumulative catch-up basis.

Contract Balances

The timing of our revenue recognition may differ from the timing of invoicing to our customers, and these timing differences result in receivables, contract assets, or contract liabilities which are reflected on our Consolidated Balance Sheets. We record contract assets when we have transferred software products or provided services but do not yet have the right to related consideration, or contract liabilities when we have received or have the right to receive consideration but have not yet transferred software products or provided services to our customers. Contract balances are classified as assets or liabilities on a contract-by-contract basis at the end of each reporting period.

Receivables and Contract Assets – We classify the right to consideration in exchange for software products or services transferred to our customers as either a receivable or a contract asset depending on whether those rights are conditional or unconditional. A receivable is a right to consideration that is unconditional as compared to a contract asset, which is a right to consideration that is conditional upon factors other than the passage of time.

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Receivables are comprised of gross amounts due from customers for which we have an unconditional right to collect. The gross amount invoiced includes pass-through taxes and fees, which are recorded as liabilities at the time they are billed. We offset amounts billed and deferred revenue for invoices not billed under a committed contract for which the subscription period has not started as of the balance sheet date. We record receivables within accounts receivable, net, on our Consolidated Balance Sheets.

Contract assets relate to unbilled accounts receivable, which represent revenue recognized on arrangements 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, and the right to consideration is generally subject to milestone completion, client acceptance or factors other than the passage of time. We record contract assets within other current assets on our Consolidated Balance Sheets.

In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts do not include a significant financing component as the period between transfers of goods/services and payment is generally less than one year. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our software products and related services, not to receive financing from our customers or to provide customers with financing.

Contract Liabilities – Deferred Revenues – We record contract liabilities as deferred revenues when we have received or have the right to receive consideration but have not yet transferred software products or provided services to our customers. Deferred revenues represent amounts billed or payments received from customers for SaaS subscriptions, software licenses, product updates and support and/or consulting services in advance of recognizing revenue or performing services. We defer revenue for these undelivered performance obligations and recognize revenues when the applicable software products are delivered or over the periods in which the services are performed, in accordance with our revenue recognition policy for such performance obligations. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The noncurrent portion of deferred revenue is included in other long-term liabilities on our Consolidated Balance Sheets.

Costs to Obtain or Fulfill a Contract – Deferred Costs

Commissions payable to our direct sales force and independent affiliates who resell our software products are considered incremental and recoverable costs of obtaining or fulfilling contracts with our customers. Sales commissions are recorded when a sale is completed or when our SaaS subscription is provisioned, which generally coincides with the timing of revenue recognition in most cases. Certain of these costs are capitalized and amortized ratably over the expected customer relationship period during which we expect to recover those costs. In estimating the expected customer relationship period, we evaluated both quantitative and qualitative factors including the nature of our product/service offerings, expected renewals, and the estimated economic life of the applicable software. The current and noncurrent balances of these deferred costs are included in prepaid expenses and other assets, respectively, on our Consolidated Balance Sheets. The deferred costs are amortized over various periods; generally, five years for maintenance contracts, and three to six years for SaaS subscriptions. Amortization expense related to deferred commissions is included in cost of SaaS subscriptions, cost of product updates and support fees, and sales and marketing expenses in our Consolidated Statements of Operations. We periodically evaluate the expected customer relationship period and whether there have been any changes in our business or market conditions which would indicate that these amortization periods should be adjusted or if there may be potential impairment related to the deferred costs. We have not recorded any impairment loss in relation to these deferred costs.

Business Combinations

We account for business acquisitions in accordance with ASC 805, Business Combinations. ASC 805 requires recognition of the assets acquired and the liabilities assumed separately from goodwill, generally at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While best estimates and assumptions are used as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill, are recorded in the reporting period in which the adjustment amounts are determined. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our results of operations in the reporting period such adjustments are made.

Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets, support obligations assumed, estimated restructuring liabilities, contingent consideration and pre-acquisition contingencies. Although we believe the assumptions and estimates made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

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Examples of critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to:

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

In connection with the purchase price allocations for our business acquisitions, we estimate the fair value of product updates and support, SaaS subscription and service contract obligations assumed. The acquired deferred revenue is recognized at fair value to the extent it represents a legal obligation assumed by Infor. We consider post-contract support (PCS) obligations/services in their entirety, SaaS subscription contracts and service contracts to be legal obligations of the acquired entity. PCS arrangements of acquired entities typically include unspecified product upgrades (when and if available), release updates, regulatory updates and patches, as well as support including access to technical information and technical support staff. SaaS subscription arrangements of acquired entities provide access to product functionality through a hosted environment and other services. We consider PCS and SaaS subscription arrangements to be separate elements when determining the legal obligations assumed from the acquired entity. We expect to fulfill each underlying obligation element of these arrangements. The estimated fair values of these PCS arrangements, SaaS subscription contracts and service contracts are determined utilizing a bottom-up approach. The bottom-up approach, also referred to the cost build-up approach, relies on an estimate of the direct costs and any incremental costs (such as overhead) required to fulfill the performance obligation, plus a reasonable profit margin, to estimate fair value. The estimated direct and incremental costs are reflective of those that we would normally incur to fulfill similar obligations and do not include any costs incurred prior to the business combination or that are not needed to fulfill the obligation.

The purchase agreements related to certain of our business acquisitions may include provisions for the payment of additional cash consideration if certain future performance conditions are met. These contingent consideration arrangements are recognized at their acquisition date fair value and included as part of the purchase price at the acquisition date. The estimated fair value of these contingent consideration arrangements are classified as accrued liabilities or other long-term liabilities on our Consolidated Balance Sheets. As such, their fair value is remeasured each reporting period with any change in fair value being recognized in the applicable period’s results of operations and included in acquisition-related and other costs in our Consolidated Statements of Operations. Measuring the fair value of contingent consideration at the acquisition date, and for all subsequent remeasurement periods, requires a careful examination of the facts and circumstances to determine the probable resolution of the contingency(ies). The estimated fair value of the contingent consideration is 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 and other measures and our assessment of the probability of meeting such results, with the probability-weighted earn-out then discounted to estimate fair value.

In addition, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date and we reevaluate these items periodically with any adjustments to our preliminary estimates being recorded to goodwill provided that we are within the measurement period and we continue to collect information in order to determine their estimated values. Subsequent to the measurement period or our final determination of the uncertain tax positions estimated value or tax related valuation allowances, changes to these uncertain tax positions and tax related valuation allowances will affect our provision for income taxes in our Consolidated Statements of Operations and could have a material impact on our results of operations and financial position.

Restructuring

Costs to exit or restructure certain activities of an acquired company, or our internal operations, are accounted for as one-time termination and exit costs pursuant to ASC 420, Exit or Disposal Cost Obligations. If acquisition related, they are accounted for separately from the business combination. Liabilities for costs associated with an exit or disposal activity are measured at fair value on our Consolidated Balance Sheet and recognized in our Consolidated Statement of Operations in the period in which the liability is incurred. In the normal course of business, Infor may incur restructuring charges related to personnel which are accounted for in accordance with ASC 712, Compensation—Nonretirement Postemployment Benefits. These restructuring charges represent severance associated with redundant positions. When estimating the fair value of facility restructuring activities, assumptions are applied regarding estimated sub-lease payments to be received, which can differ materially from actual results. This may require revision of initial estimates which may materially affect our results of operations and financial position in the period the change in estimate occurs.

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We estimate the amounts of these costs based on our expectations at the time the charges are taken, and we reevaluate the remaining accruals at each reporting date based on current facts and circumstances. If our estimates or expectations change because we are subjected to contractual obligations or negotiations we did not anticipate, we choose to further restructure our operations, or there are other costs or changes we did not foresee, we adjust the restructuring accruals in the period that our estimates change. Such changes are recorded as increases or decreases to the restructuring related charges in our results of operations.

Valuation of Accounts Receivable

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 Consolidated Statements of Operations. We review specific accounts, including significant accounts with balances past due over 90 days, for collectability based on circumstances known at the date of the financial statements.

In judging the adequacy of the allowance for doubtful accounts, we consider multiple factors including historical bad debt experience, the general economic environment, the need for specific customer reserves and the aging of our receivables. To assess the need for specific customer reserves, we evaluate the probability of collection based upon several factors including: 1) third-party credit agency information, 2) customer financial statements and/or 3) customer payment history. A considerable amount of judgment is required in assessing these factors. If the factors used in determining the allowance do not reflect future events, then a change in the allowance for doubtful accounts would be necessary at the time of determination. Such a change may have a significant impact on our future results of operations. Accounts receivable are charged off against the allowance when we determine it is probable the receivable will not be recovered.

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. These estimates are based on historical experience determined by analysis of claim activities, specifically identified customers and other known factors. A considerable amount of judgment is required in assessing these factors. If the historical data utilized does not reflect expected future performance, a change in the allowances would be recorded in the period such determination is made affecting current and future results of operations. The balance of our sales reserve is reflected in deferred revenue on our Consolidated Balance Sheets.

Valuation and Assessment of Impairment of Goodwill and Long-Lived Assets

Goodwill

Our goodwill and intangible assets resulted primarily from our acquisitions. We account for intangible assets and goodwill pursuant to ASC 350, Intangibles—Goodwill and Other. Whenever events or changes in circumstances indicate the carrying amount may not be recoverable we review these assets for impairment or disposal. Events or changes in circumstances that indicate the carrying amount of the assets may not be recoverable include, but are not limited to, a significant decrease in the market value of the business or asset acquired, a significant adverse change in the extent or manner in which the business or asset acquired is used or a significant adverse change in the business climate in which we operate. In order to perform these reviews, we must first determine our reporting units in accordance with ASC 280, Segment Reporting. ASC 280 requires a public enterprise to report financial and descriptive information about its reportable operating segments. Once operating segments are determined, reporting units are identified as an operating segment or one level below an operating segment, if applicable. We believe that our reportable segments are also representative of our reporting units for purposes of our goodwill impairment testing. We have determined that we operate as three reporting units: License, Maintenance and Consulting.

We review goodwill for impairment annually and whenever events or changes in circumstances indicate its carrying value may not be recoverable in accordance with ASC 350, Intangibles—Goodwill and Other. Pursuant to this FASB guidance, our annual testing for goodwill impairment begins with a qualitative comparison of a reporting unit’s fair value to its carrying value to determine if it is more-likely-than-not (i.e. a likelihood of more than 50 percent) that the fair value is less than the carrying value and thus whether any further impairment testing is necessary. If further impairment testing is necessary, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired. If the carrying amount of the net assets exceeds the fair value, an impairment loss would be recognized in an amount equal to the excess. Any loss recognized cannot exceed the carrying amount of goodwill. After a goodwill impairment loss is recognized, the adjusted carrying amount of goodwill is the new accounting basis. A subsequent reversal of a previously recognized goodwill impairment loss is prohibited once the measurement of that loss is completed and the loss has been recognized.

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The estimate of the total fair value of our reporting units requires the use of significant estimates and assumptions including projections of future cash flows and discount rates. The discount rate utilized is based on management’s best estimate of the related risks and return at the time the impairment assessment is made. We perform our annual goodwill impairment test as of September 30. The results of our most recent annual tests performed in fiscal 2019, 2018 and 2017 did not indicate any potential impairment of our goodwill and we have no accumulated impairment charges related to our goodwill.

Long-Lived Assets

The carrying amount of our long-lived intangible assets, other than acquired technology, and our long-lived tangible assets are reviewed whenever circumstances arise that indicate the carrying amount of an asset may not be recoverable. The carrying amount of our acquired technology is reviewed for recoverability on at least an annual basis. The carrying value of our long-lived assets is compared to the undiscounted future cash flows the assets are expected to generate. An asset is considered to be impaired if the carrying value of that asset exceeds the sum of the projected undiscounted future cash flows. In this case the difference between the carrying value and the estimated fair value, based on the discounted future cash flows the asset is expected to generate, is recognized as an impairment loss. The estimated fair value of these long-lived assets requires the use of significant estimates and assumptions including projections of future cash flows and remaining useful lives of the applicable assets. We did not recognize any losses from impairment of our long-lived assets during fiscal 2019 and 2017. In fiscal 2018, we recorded an impairment charge of $45.9 million related to specific long-lived assets. See Note 8, Property and Equipment – Impairment of Capitalized Software, in Notes to Consolidated Financial Statements of this Annual Report.

Income Taxes and Valuation of Deferred Tax Assets

Our provision for income taxes consists of provisions for federal, state, and foreign income taxes. We operate in an international environment with significant operations in various locations outside of the U.S. Accordingly, our combined income tax rate is a composite rate reflecting our operating results in various locations and the applicable rates.

Significant judgment is required in determining our worldwide income tax provision. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Our judgments, assumptions, and estimates relative to the provision for income taxes take into account current tax laws, our interpretation of current tax laws, and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Although we believe that our estimates are reasonable, the final tax outcome of matters could be different from that which is reflected in our historical income tax provision and accruals. Such differences, if identified in future periods, could have a material effect on the amounts recorded in our Consolidated Financial Statements.

We utilize the asset and liability method of accounting for income taxes as set forth in ASC 740 Income Taxes. Under this method, we recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured by applying enacted statutory tax rates that are applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized to the differences between the financial statements carrying amount and the tax bases of existing assets and liabilities. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in net loss (or net income) in the period in which the tax rate change is enacted. The statement also requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets may not be realized.

Our worldwide net deferred tax assets consist primarily of disallowed interest expense carryforwards, net operating loss carryforwards, tax credit carryforwards, and temporary differences between taxable income (loss) on our tax returns and income (loss) before income taxes under GAAP, primarily related to goodwill and compensation. A deferred tax asset generally represents future tax benefits to be received when these carryforwards can be applied against future taxable income or when expenses previously reported in our financial statements become deductible for income tax purposes. We maintain certain strategic management and operational activities in overseas subsidiaries and our foreign earnings are taxed at rates that are similar to the U.S.

On December 22, 2017, the U.S. government enacted the 2017 Tax Act which includes numerous changes to the U.S. tax code that affected our business including the one-time Transition Tax on the deemed repatriation of earnings of certain foreign subsidiaries that were previously tax deferred. As a result, as of April 30, 2018, we provided a $79.7 million provisional estimate of the Transition Tax pursuant to the SEC’s Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118) for U.S. federal and state income taxes on the majority of our undistributed earnings of our foreign subsidiaries. Due to the Company’s full U.S. valuation allowance, this provisional estimate did not have a significant impact on our Consolidated Financial Statements for fiscal 2018. During the third quarter of fiscal 2019, we completed our accounting and recorded the applicable adjustments to the SAB 118 provisional amounts for the income tax effects of the 2017 Tax Act recorded in fiscal 2018. Due to the Company’s full U.S. valuation allowance, the adjustments made to the provisional estimate during the third quarter of fiscal 2019 did not have a material impact on our Consolidated Financial Statements. The net change recorded from the completion of our accounting for the provisional estimate was a $22.5 million increase of the estimated Transition Tax liability from $79.7 million to $102.2 million offset by a corresponding adjustment to U.S. deferred tax assets.

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We have not provided foreign withholding taxes on certain undistributed earnings of our foreign subsidiaries as such earnings are expected to be reinvested indefinitely. In the future, if we should decide to no longer indefinitely reinvest such earnings outside the U.S., we would have to adjust the income tax provision in the period such determination is made.

A valuation allowance is recognized for a portion of our net deferred tax assets in the U.S. as well as certain foreign tax jurisdictions. This valuation allowance is based on our assessment of the realizability of these assets. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Projected future taxable income is based on our expected results and assumptions as to the jurisdiction in which the income will be earned. We expect to continue to provide a valuation allowance against these assets until, or unless, we can sustain a level of profitability in the respective tax jurisdictions that demonstrates our ability to utilize these assets. At that time, the valuation allowance could be reduced in part or in total.

We are subject to the provisions of ASC 740-10, which defines the accounting for uncertainty in income taxes by prescribing thresholds and attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This standard also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosure. The amount of income tax we pay is subject to ongoing audits by federal, state and foreign tax authorities, which may result in proposed assessments. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given with respect to the final outcome of these matters. We adjust reserves for our uncertain tax positions due to changing facts and circumstances, such as the closing of a tax audit, judicial rulings and refinement of estimates or realization of earnings or deductions that differ from our estimates. To the extent that the final outcome of these matters is different from the amounts recorded, such differences generally will impact our provision for income taxes in the period in which such a determination is made.

The provisions of ASC 740-10 contain a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. We recognize interest and penalties related to uncertain tax positions in the provision for income taxes line of our Consolidated Statements of Operations.

The Company is included in the GGC Software Parent, LLC (formerly GGC Software Parent, Inc.) consolidated federal income tax return. The Company and its subsidiaries provide for income taxes under the separate return method, by which Infor, Inc. and its subsidiaries compute tax expense as though they file a separate company tax return.

Contingencies—Litigation Reserves

We may, from time to time, have unresolved regulatory, legal, tax or other matters. We provide for contingent liabilities in accordance with ASC 450, Contingencies. Pursuant to this guidance, a loss contingency is charged to income when it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Disclosure in the notes to the financial statements is required for loss contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred. Gain contingencies are not recorded until realized. We expense all legal costs to resolve regulatory, legal, tax, or other matters in the period incurred.

Periodically, at a minimum at each reporting date, we review the status of each significant matter to assess our potential financial exposure. If a potential loss is considered probable and the amount can be reasonably estimated as defined by the guidance related to accounting for contingencies, we reflect the estimated loss in our results of operations. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability can be reasonably estimated. Because of uncertainties related to these matters, accruals are based on the best information available to us at that time. Further, estimates of this nature are highly subjective, and the final outcome of these matters could vary significantly from the amounts that have been included in the accompanying Consolidated Financial Statements. As additional information becomes available, we reassess the potential liability related to any pending claims and litigation and may revise our estimates accordingly. Such revisions in the estimates of the potential liabilities could have a material impact on our future results of operations, financial position and cash flows.

Litigation by its nature is uncertain and the determination of whether any particular case involves a probable loss and quantifying the amount of loss for purposes of establishing or adjusting applicable reserves requires us to exercise considerable judgment, which is applied as of a certain date. The required reserves may change in the future due to new matters, developments in existing matters, or if we determine to change our strategy with respect to the resolution of any particular matter.

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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 recognize the effects of forfeitures when they occur.

We utilize the Option-Pricing Method to estimate the fair value of our equity awards. This approach models the various classes of equity securities as a series of call options on our total equity. The exercise prices of the call options are derived based on the distribution waterfall of the issuing entity. Assumptions utilized under the Option–Pricing Method include: (a) stock price, derived from the estimated fair value of our total equity, (b) time to expiration, derived from the expected time to a potential liquidity event, (c) risk-free interest rate, derived from the U.S. Treasury rate over the expected time to expiration, (d) expected dividend yield and (e) expected volatility of the total equity value.

Circumstances may change and additional data may become available over time which could result in changes to these input assumptions and our estimates of the number of securities we expect will vest. Such changes could materially impact our fair value estimates and how much we recognize as equity-based compensation.

Results of Operations

The following tables set forth certain line items in our Consolidated Statements of Operations as 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:

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The discussion that follows relates to our results of operations for the comparable fiscal years ended April 30, 2019, 2018 and 2017. This discussion should be read in conjunction with the accompanying audited Consolidated Financial Statements and related Notes of this Annual Report 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 the Foreign Currency discussion, above, for further explanation of the impact on our results of operations. The period-over-period comparison of our results of operations is not necessarily indicative of financial results to be achieved in future periods.

Revenues

Total Revenues. We generate revenues from providing access to our software through SaaS subscriptions, licensing our software, 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 SaaS subscriptions, 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.

Total revenues increased 3.3% in fiscal 2019 compared to fiscal 2018, excluding the unfavorable foreign currency impact of 1.6%. On a constant currency basis, the fiscal 2019 increase was experienced across all geographies; Americas up 1.4%, EMEA up 4.6% and APAC up 12.0%, and was primarily due to the shift in our license mix to SaaS subscriptions revenues which increased 22.3% offsetting a 10.5% decrease in our perpetual software license fees revenues. With our expanding CloudSuite offerings, the shift in our license mix to SaaS subscriptions continues and SaaS subscriptions now account for approximately 69.0% of our total software license fees revenues. Our product updates and support fees decreased slightly, down 0.7%, while our consulting services and other fees revenues were up 3.6%. The increase in total revenues reflects the inclusion of the results of operations of our recent acquisitions. The adoption of ASC 606 had a minimal favorable impact on our total revenues of $16.6 million, or less than 1.0%, compared to fiscal 2018.

Total revenues increased 6.9% in fiscal 2018 compared to fiscal 2017, excluding the favorable foreign currency impact of 2.3%. On a constant currency basis, we realized growth across all our geographic regions with the Americas up 5.4%, EMEA up 8.5% and APAC up 12.5%. We experienced significant growth in our SaaS subscriptions revenues, which increased 34.2%, as we expanded our CloudSuite offerings and continued to shift our license mix to SaaS subscriptions. As a result of this shift, our perpetual software license fees revenues decreased 4.5%. Our product updates and support fees were down slightly, while our consulting services and other fees revenues were up 11.7%.

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

In fiscal 2019, SaaS subscriptions revenues increased by 22.3%, compared to fiscal 2018, excluding the unfavorable foreign currency impact of 1.0%. At constant currency, we reported higher year-to-date SaaS revenues across all geographic regions with the Americas, EMEA, and APAC regions accounting for increases of 13.7 points, 5.7 points and 2.9 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 also reflects the inclusion of the results of operations of our recent acquisitions, which accounted for 1.1 points of the increase.

In fiscal 2018, SaaS subscriptions revenues increased by 34.2% compared to fiscal 2017, excluding the favorable foreign currency impact of 1.1%. At constant currency, we reported higher SaaS revenues in fiscal 2018 across all geographic regions with the Americas, EMEA, and APAC regions accounting for increases of 20.5 points, 9.3 points and 4.4 points, respectively. The increase in fiscal 2018 SaaS revenues also reflected the inclusion of the results of operations of the Birst Acquisition, which accounted for 6.4 points of the increase.

Software License Fees. Our software license fees consist of fees resulting from products licensed and delivered to our customers on a perpetual or term 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 fiscal 2019, software license fees decreased by 10.5% compared to fiscal 2018, excluding the unfavorable foreign currency impact of 1.9%. At constant currency, the decrease in perpetual license fees revenues was primarily due to decreases in our Americas and EMEA regions, which accounted for decreases of 9.9 points and 1.8 points, respectively. These decreases were somewhat offset by an increase of 1.2 points related to our APAC region. The continued shift in our mix of software license business from the sale of perpetual licenses to the sale of SaaS subscriptions 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.

In fiscal 2018, software license fees decreased by 4.5% compared to fiscal 2017, excluding the favorable foreign currency impact of 3.0%. At constant currency, the decrease in perpetual license fees revenues was primarily due to decreases in our Americas and EMEA regions, which accounted for decreases of 4.0 points and 1.2 points, respectively. These decreases were somewhat offset by an increase of 0.7 points related to our APAC region. The decrease in fiscal 2018 software license fees was the result of the shift in our mix of software license business from the sale of perpetual licenses to the sale of SaaS subscriptions.

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.

In fiscal 2019, product updates and support fees decreased by 0.7%, compared to fiscal 2018, excluding the unfavorable foreign currency impact of 1.4%. At constant currency, our Americas region accounted for a decrease of 1.0 points which was somewhat offset by modest growth in our product updates and support fees in our EMEA and APAC regions.

In fiscal 2018, product updates and support fees decreased by 0.6%, compared to fiscal 2017, excluding the favorable foreign currency impact of 2.0%. At constant currency, our Americas region accounted for a decrease of 1.2 points which was somewhat offset by modest growth in our product updates and support fees in our EMEA and APAC regions.

At constant currency, the net decreases in these year-over-year product updates and support fees revenues were primarily the result of the negative pressure 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, as well as customer attrition, offsetting revenues related to new maintenance pull-through from new license transactions and price increases. 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.

Consulting services and other fees increased by 3.6%, excluding the unfavorable foreign currency impact of 2.3% in fiscal 2019 compared fiscal 2018. At constant currency, increases in consulting services revenues accounted for an increase of 4.2 points compared to fiscal 2018. The increase in consulting services was experienced across all geographic regions. Our EMEA, APAC, and Americas regions accounted for increases of 2.2 points, 1.6 point and 0.4 points, respectively. These increases were somewhat offset by a decrease of 0.6 points related to lower other fees revenues. The increase in consulting services and other fees reflects the inclusion of the results of our recent acquisitions, which accounted for 0.9 points of the increase.

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Consulting services and other fees increased by 11.7%, excluding the favorable foreign currency impact of 3.1%, in fiscal 2018 compared to fiscal 2017. At constant currency, we experienced an increase in consulting services revenues which accounted for an increase of 11.2 points compared to fiscal 2017. The increase in consulting services was experienced across all geographic regions with Americas contributing an increase of 6.4 points, EMEA 4.2 points, and APAC 0.6 points. In addition, higher other fees revenues accounted for a 0.5 point 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 SaaS subscription agreements, certain on-premise license agreements, maintenance contracts and certain consulting arrangements, as discussed above. We had total deferred revenues of $1,210.4 million and $1,176.5 million at April 30, 2019 and 2018, respectively.

The following table sets forth the components of deferred revenue:

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 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 subscriptions and license fees balance and are less cyclical than the balance of our deferred product updates and support fees revenues.

Operating Expenses