LSO Resumes Limited Service in Areas Impacted by Hurricane Harvey

AUSTIN, TX—(Marketwired – August 30, 2017) – LSO is committed to the long–term recovery effort for the Texas Gulf Coast, Houston and other areas of Texas and Louisiana affected by Hurricane Harvey.

On Friday August 25, 2017, Hurricane Harvey came ashore along the Texas Gulf Coast bringing with it both historic and devastating winds and flooding throughout the Gulf Coast Region. Like so many thousands of others, LSO's employees and customers have suffered significant personal loss and dealt with the devastation Harvey has brought with it.

Along with the personal impacts of Harvey, LSO and other companies that communities depend on for delivery of much needed supplies have had their operations disrupted, cutting off a major conduit for relief and recovery from the storm. Our hope is to restore service as soon as we are able to safely do so.

Amid the devastation of Harvey, which is still ongoing in some parts of our service area, LSO is thankful that all of its employees are safe and accounted for. The grit and tenacity of our LSO family is second to none and our people, even in the face of their own personal loss, have been working tirelessly to restore services and the vital infrastructure we provide to bring in much needed supplies as the rebuilding process begins. These brave men and women of LSO understand that in times like these, the communities in which they live and serve depend on the services of LSO more than ever. “As part of that effort, LSO is both very humbled and immensely proud to announce that our team, setting their own personal losses aside, are wasting no precious time and are already getting after the effort of helping their communities recover,” said Rick Jones, LSO CEO.

In an effort to help communities through the recovery process, LSO has already restored services in Corpus Christi and started operations in Victoria and College Station. In addition, as of today, LSO will begin limited service in the Houston area for critical “time sensitive” shipments.

For our customers and employees in Beaumont, we urge them to be safe and follow instructions of the local authorities. We hope the storm exits the area quickly.

LSO will continue to update its website as areas become accessible, as we know how much our fellow citizens are depending on us to provide the delivery of not just packages, but relief and recovery from the devastation of Harvey and that every minute counts!

About LSO

LSO, the south's premier regional parcel carrier, was founded in 1991, and is headquartered in Austin, Texas. We offer reliable, efficient Parcel delivery services and logistics solutions in Texas, Oklahoma, Louisiana, Arkansas, Alabama, Tennessee and southeastern New Mexico, plus the country of Mexico. LSO provides a full range of same–day, next day, scheduled and day–definite guaranteed deliveries along with live customer support. LSO has among the highest reliability records and lowest damage rates in the industry offering competitive rates throughout the southern US and Mexico. For more information, visit www.LSO.com or call 1–800–800–8984.

Applied Recognition Sets New Benchmark for Face Recognition Accuracy

TORONTO, ON—(Marketwired – August 30, 2017) – Applied Recognition, Inc. (ARI) announced today that it has reached the 0.2% threshold for Cross–Over Error Rate (CER) in testing against the FERET dataset maintained by the US National Institute of Standards and Technology for facial recognition systems evaluation. The CER — observed when a technology is tuned such that its 'false positive rate' equals its 'false rejection rate' — is the best summary measure of face recognition technologies' efficacy.

The upgrades to Applied Recognition's core face recognition methods that enable this new level of performance are based on advanced machine learning techniques: residual networks are used to generate face vectors and face–to–face comparisons are processed using advanced statistical techniques.

All ARI's SDKs and the line of “Ver–ID” applications will benefit from this update. Ver–ID Credentials, for example, establishes a person's identity by verifying the validity of a government issued photo ID then comparing the photo on the ID to an in–session “selfie”. ARI's liveness–detection technology ensures that the person whose is authenticating against the photoID is in fact the person requesting verification.

“This latest advance in accuracy will further broaden the number of applications where face recognition is the dominant choice to achieve a high degree of security while enhancing customer experience”, said Ray Ganong, Co–CEO of Applied Recognition. “This new level of accuracy supports a completely automated workflow for financial transactions, such as opening a bank account or applying for a loan. Stringent identity verification requirements can be met to facilitate transactions that previously had to take place “face to face”. When combined with other methods of identity verification, such as credit checks and cell phone number verifications, the false authentication rate can be reduced to 1 in 10 million and without the need to route many bona fide applications through exception processes.”

“We now offer our customers 'the best of both worlds'”, according to Don Waugh, Co–CEO. “Looking back, developers seeking high–accuracy face recognition needed to rely on cloud–services with all the attendant problems: privacy concerns, latency, and reliance on a persistent Internet connection. Our technology's accuracy now substantially exceeds that of popular cloud–services while running directly on users' mobile devices or personal computers at sub–second speeds”.

About Applied Recognition

APPLIED RECOGNITION INC. is a leader in face detection, recognition and authentication technology delivering innovative products for consumers, enterprises and application developers. Founded in 2005, Applied Recognition has developed an extensive portfolio of patents for facial recognition & indexing, and for enterprise–grade, biometric authentication technologies.

Applied Recognition serves a broad range of customers, including financial services providers, IoT device manufacturers, and leading software publishers. Licensing is available for software development kits for Windows, Apple, Android and iOS platforms. ARI's “Ver–ID” product line is comprised of ready–to–deploy applications for user authentication, identity verification, digital signatures, enterprise desktop security and emotion recognition. To learn more, visit www.appliedrecognition.com.

Capital Power secures long-term contract for its 99 megawatt New Frontier Wind project

EDMONTON, AB—(Marketwired – August 30, 2017) – Capital Power Corporation (Capital Power or the Company) (TSX: CPX) today announced that development of the New Frontier Wind project (New Frontier Wind) is proceeding immediately. New Frontier Wind is a 99 megawatt (MW) facility located in McHenry County, North Dakota. The Company is in the final stages of selecting a turbine supplier and the project cost is expected to be approximately $182 million (US$145 million). Commercial operation of the facility is expected to commence in December of 2018.

Capital Power will operate New Frontier Wind under a 12–year fixed price contract with an investment grade U.S. financial institution covering 87% of the facility's output. Under the contract, which was executed on August 29, 2017, Capital Power will swap the market revenue from a fixed volume of New Frontier Wind's generation for a fixed price payment over a 12–year term. The agreement will secure long–term predictable revenues, allowing New Frontier Wind to secure renewable energy tax equity financing and provide Capital Power the opportunity to complete its second wind development project in the growing U.S. renewables market.

“New Frontier Wind further advances our strategy of adding shareholder value by growing contracted cashflows by executing on the Company's development activities,” said Brian Vaasjo, President and CEO Capital Power.

Forward–looking information

Forward–looking information or statements included in this press release are provided to inform the Company's shareholders and potential investors about management's assessment of Capital Power's future plans and operations. This information may not be appropriate for other purposes. The forward–looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.

Material forward–looking information in this press release includes disclosures regarding: (i) expectations pertaining to the construction start and completion dates for New Frontier Wind (ii) expectations pertaining to the project costs for New Frontier Wind and (iii) expectations pertaining to the Company securing renewable energy tax equity financing for New Frontier Wind.

These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward–looking statements relate to: (i) electricity and other energy prices, (ii) anticipated facility performance, (iii) business prospects and opportunities including expected growth and capital projects, (iv) status of and impact of policy, legislation and regulations, and (v) effective tax rates.

Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company's expectations. Such material risks and uncertainties are: (i) changes in electricity prices in markets in which the Company operates, (ii) changes in energy commodity market prices and use of derivatives, (iii) regulatory and political environments including changes to environmental, financial reporting, market structure and tax legislation, (iv) facility availability and performance including maintenance of equipment, (v) ability to fund current and future capital and working capital needs, (vi) acquisitions and developments including timing and costs of regulatory approvals and construction, (vii) changes in market prices and availability of fuel, and (viii) changes in general economic and competitive conditions. See Risks and Risk Management in the Company's Management's Discussion and Analysis for the year ended December 31, 2016, prepared as of February 17, 2017, for further discussion of these and other risks.

Readers are cautioned not to place undue reliance on any such forward–looking statements, which speak only as of the specified approval date. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward–looking statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

About Capital Power

Capital Power (TSX: CPX) is a growth–oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns approximately 4,500 megawatts of power generation capacity at 24 facilities and is pursuing contracted generation capacity throughout North America.

Capital Power secures long-term contract for its 99 megawatt New Frontier Wind project

EDMONTON, AB—(Marketwired – August 30, 2017) – Capital Power Corporation (Capital Power or the Company) (TSX: CPX) today announced that development of the New Frontier Wind project (New Frontier Wind) is proceeding immediately. New Frontier Wind is a 99 megawatt (MW) facility located in McHenry County, North Dakota. The Company is in the final stages of selecting a turbine supplier and the project cost is expected to be approximately $182 million (US$145 million). Commercial operation of the facility is expected to commence in December of 2018.

Capital Power will operate New Frontier Wind under a 12–year fixed price contract with an investment grade U.S. financial institution covering 87% of the facility's output. Under the contract, which was executed on August 29, 2017, Capital Power will swap the market revenue from a fixed volume of New Frontier Wind's generation for a fixed price payment over a 12–year term. The agreement will secure long–term predictable revenues, allowing New Frontier Wind to secure renewable energy tax equity financing and provide Capital Power the opportunity to complete its second wind development project in the growing U.S. renewables market.

“New Frontier Wind further advances our strategy of adding shareholder value by growing contracted cashflows by executing on the Company's development activities,” said Brian Vaasjo, President and CEO Capital Power.

Forward–looking information

Forward–looking information or statements included in this press release are provided to inform the Company's shareholders and potential investors about management's assessment of Capital Power's future plans and operations. This information may not be appropriate for other purposes. The forward–looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.

Material forward–looking information in this press release includes disclosures regarding: (i) expectations pertaining to the construction start and completion dates for New Frontier Wind (ii) expectations pertaining to the project costs for New Frontier Wind and (iii) expectations pertaining to the Company securing renewable energy tax equity financing for New Frontier Wind.

These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward–looking statements relate to: (i) electricity and other energy prices, (ii) anticipated facility performance, (iii) business prospects and opportunities including expected growth and capital projects, (iv) status of and impact of policy, legislation and regulations, and (v) effective tax rates.

Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company's expectations. Such material risks and uncertainties are: (i) changes in electricity prices in markets in which the Company operates, (ii) changes in energy commodity market prices and use of derivatives, (iii) regulatory and political environments including changes to environmental, financial reporting, market structure and tax legislation, (iv) facility availability and performance including maintenance of equipment, (v) ability to fund current and future capital and working capital needs, (vi) acquisitions and developments including timing and costs of regulatory approvals and construction, (vii) changes in market prices and availability of fuel, and (viii) changes in general economic and competitive conditions. See Risks and Risk Management in the Company's Management's Discussion and Analysis for the year ended December 31, 2016, prepared as of February 17, 2017, for further discussion of these and other risks.

Readers are cautioned not to place undue reliance on any such forward–looking statements, which speak only as of the specified approval date. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward–looking statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

About Capital Power

Capital Power (TSX: CPX) is a growth–oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns approximately 4,500 megawatts of power generation capacity at 24 facilities and is pursuing contracted generation capacity throughout North America.

VIVUS Announces Settlement with Dr. Reddy's Laboratories on Qsymia(R) Patent Litigation

CAMPBELL, CA—(Marketwired – August 30, 2017) – VIVUS, Inc. (NASDAQ: VVUS) announced today that it has entered into a settlement agreement with Dr. Reddy's Laboratories, S.A. and Dr. Reddy's Laboratories, Inc. (Dr. Reddy's) resolving patent litigation related to Qsymia® (phentermine and topiramate extended–release) capsules CIV. The litigation, which has been pending in the U.S. District Court for the District of New Jersey since 2015, resulted from the submission of an Abbreviated New Drug Application (ANDA) to the U.S. Food and Drug Administration seeking approval to market generic versions of Qsymia. The settlement agreement permits Dr. Reddy's to begin selling a generic version of Qsymia on June 1, 2025, or earlier under certain circumstances. In the event of a launch earlier than June 1, 2025, VIVUS will receive a royalty on sales of the generic version of Qsymia.

This settlement with Dr. Reddy's concludes all patent litigation brought by VIVUS against generic pharmaceutical companies that have filed ANDAs seeking approval to market generic versions of Qsymia®. As required by law, VIVUS and Dr. Reddy's will submit the settlement agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice for review.

“We are pleased to have concluded all patent litigation that we have brought in the context of the generic availability of Qsymia,” said Seth H. Z. Fischer, VIVUS' Chief Executive Officer. “We believe that these settlements underscore the strength of our intellectual property and demonstrate our commitment to defending our existing patents for all our products and technologies. We expect to expand our intellectual property estate as we continue to innovate new treatments that improve and extend the lives of patients with serious unmet medical needs.”

About Qsymia

Qsymia is approved in the United States and is indicated as an adjunct to a reduced–calorie diet and increased physical activity for chronic weight management in adults with an initial body mass index (BMI) of 30 kg/m2 or greater (obese) or 27 kg/m2 or greater (overweight) in the presence of at least one weight–related medical condition such as high blood pressure, type 2 diabetes, or high cholesterol.

The effect of Qsymia on cardiovascular morbidity and mortality has not been established. The safety and effectiveness of Qsymia in combination with other products intended for weight loss, including prescription and over–the–counter drugs, and herbal preparations, have not been established.

Important Safety Information

Qsymia (phentermine and topiramate extended–release) capsules CIV is contraindicated in pregnancy; in patients with glaucoma; in hyperthyroidism; in patients receiving treatment or within 14 days following treatment with monoamine oxidase inhibitors; or in patients with hypersensitivity to sympathomimetic amines, topiramate, or any of the inactive ingredients in Qsymia.

Qsymia can cause fetal harm. Females of reproductive potential should have a negative pregnancy test before treatment and monthly thereafter and use effective contraception consistently during Qsymia therapy. If a patient becomes pregnant while taking Qsymia, treatment should be discontinued immediately, and the patient should be informed of the potential hazard to the fetus.

The most commonly observed side effects in controlled clinical studies, 5% or greater and at least 1.5 times placebo, include paraesthesia, dizziness, dysgeusia, insomnia, constipation, and dry mouth.

About VIVUS

VIVUS is a biopharmaceutical company committed to the development and commercialization of innovative therapies that focus on advancing treatments for patients with serious unmet medical needs. For more information about the company, please visit www.vivus.com.

Certain statements in this press release are forward–looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks, uncertainties and other factors, including risks and uncertainties related to potential change in our business strategy to enhance long–term stockholder value; risks and uncertainties related to our ability to protect our intellectual property and litigation in which we are involved or may become involved; and risks and uncertainties related to our ability to continue to identify, acquire and develop innovative investigational drug candidates and drugs. These risks and uncertainties could cause actual results to differ materially from those referred to in these forward–looking statements. The reader is cautioned not to rely on these forward–looking statements. Investors should read the risk factors set forth in VIVUS' Form 10–K for the year ended December 31, 2016 as filed on March 8, 2017 and as amended by the Form 10–K/A filed on April 26, 2017, and periodic reports filed with the Securities and Exchange Commission. VIVUS does not undertake an obligation to update or revise any forward–looking statements.

   
Workday, Inc.  
Condensed Consolidated Balance Sheets  
(in thousands)  
(unaudited)  
   
    July 31, 2017     January 31, 2017
*As Adjusted
 
Assets                
Current assets:                
  Cash and cash equivalents   $ 748,599     $ 539,923  
  Marketable securities     1,349,191       1,456,822  
  Trade and other receivables, net     370,557       409,780  
  Deferred costs     54,015       51,330  
  Prepaid expenses and other current assets     63,862       66,590  
Total current assets     2,586,224       2,524,445  
Property and equipment, net     438,754       365,877  
Deferred costs, noncurrent     117,736       117,249  
Acquisition–related intangible assets, net     39,110       48,787  
Goodwill     158,540       158,354  
Other assets     66,763       53,570  
Total assets   $ 3,407,127     $ 3,268,282  
Liabilities and stockholders' equity                
Current liabilities:                
  Accounts payable   $ 39,948     $ 26,824  
  Accrued expenses and other current liabilities     80,410       61,582  
  Accrued compensation     105,229       110,625  
  Unearned revenue     1,118,565       1,086,212  
  Current portion of convertible senior notes, net     332,422        
Total current liabilities     1,676,574       1,285,243  
Convertible senior notes, net     216,038       534,423  
Unearned revenue, noncurrent     104,178       135,331  
Other liabilities     39,940       36,677  
Total liabilities     2,036,730       1,991,674  
Stockholders' equity:                
  Common stock     208       202  
  Additional paid–in capital     2,945,596       2,681,200  
  Accumulated other comprehensive income (loss)     (22,197 )     2,071  
  Accumulated deficit     (1,553,210 )     (1,406,865 )
Total stockholders' equity     1,370,397       1,276,608  
Total liabilities and stockholders' equity   $ 3,407,127     $ 3,268,282  

* Prior–period information has been restated for the adoption of ASU No. 2014–09, Revenue from Contracts with Customers (Topic 606), which we adopted on February 1, 2017.

   
Workday, Inc.  
Condensed Consolidated Statements of Operations  
(in thousands, except per share data)  
(unaudited)  
   
    Three Months Ended July 31,     Six Months Ended July 31,  
    2017     2016
*As Adjusted
    2017     2016
*As Adjusted
 
Revenues:                                
  Subscription services   $ 434,527     $ 306,070     $ 834,263     $ 586,238  
  Professional services     90,793       67,587       170,918       135,096  
Total revenues     525,320       373,657       1,005,181       721,334  
Costs and expenses(1):                                
  Costs of subscription services     65,931       51,379       125,729       100,579  
  Costs of professional services     92,264       66,473       169,177       125,900  
  Product development     221,103       161,886       417,542       303,664  
  Sales and marketing     171,952       134,899       327,661       262,518  
  General and administrative     55,699       45,705       106,901       86,888  
Total costs and expenses     606,949       460,342       1,147,010       879,549  
Operating loss     (81,629 )     (86,685 )     (141,829 )     (158,215 )
Other income (expense), net     938       (21,193 )     (725 )     (27,031 )
Loss before provision for (benefit from) income taxes     (80,691 )     (107,878 )     (142,554 )     (185,246 )
Provision for (benefit from) income taxes     1,841       (65 )     4,022       1,070  
Net loss   $ (82,532 )   $ (107,813 )   $ (146,576 )   $ (186,316 )
Net loss per share, basic and diluted   $ (0.40 )   $ (0.55 )   $ (0.71 )   $ (0.95 )
Weighted–average shares used to compute net loss per share, basic and diluted     207,028       197,223       205,453       195,887  
(1) Costs and expenses include share–based compensation expenses as follows:  
    Costs of subscription services   $ 6,580     $ 4,968     $ 12,271     $ 9,365  
    Costs of professional services     9,301       5,969       17,322       11,262  
    Product development     56,923       38,314       107,952       71,282  
    Sales and marketing     25,942       20,844       49,101       39,846  
    General and administrative     22,777       18,127       42,665       34,702  

* Prior–period information has been restated for the adoption of ASU No. 2014–09, Revenue from Contracts with Customers (Topic 606), which we adopted on February 1, 2017.

   
Workday, Inc.  
Condensed Consolidated Statements of Cash Flows  
(in thousands)  
(unaudited)  
   
    Three Months Ended July 31,     Six Months Ended July 31,  
    2017     2016
*As Adjusted
    2017     2016
*As Adjusted
 
Cash flows from operating activities                                
Net loss   $ (82,532 )   $ (107,813 )   $ (146,576 )   $ (186,316 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                                
  Depreciation and amortization     34,021       26,662       67,398       52,786  
  Share–based compensation expenses     121,523       88,222       229,311       166,457  
  Amortization of deferred costs     14,009       10,917       27,646       21,356  
  Amortization of debt discount and issuance costs     6,785       6,690       13,735       13,289  
  Gain on sale of cost method investment     (526 )     (65 )     (526 )     (65 )
  Impairment of cost method investment           15,000             15,000  
  Other     1,933       1,918       4,611       1,600  
  Changes in operating assets and liabilities, net of business combinations:                                
    Trade and other receivables, net     (71,422 )     (52,337 )     40,393       45,982  
    Deferred costs     (19,437 )     (19,541 )     (30,818 )     (28,767 )
    Prepaid expenses and other assets     (8,968 )     (10,070 )     (12,018 )     (7,682 )
    Accounts payable     10,778       1,542       10,213       (180 )
    Accrued expenses and other liabilities     (13,472 )     (6,517 )     (9,383 )     (972 )
    Unearned revenue     22,434       51,914       1,162       76,851  
Net cash provided by (used in) operating activities     15,126       6,522       195,148       169,339  
Cash flows from investing activities                                
Purchases of marketable securities     (285,197 )     (557,180 )     (898,448 )     (1,191,136 )
Maturities of marketable securities     371,471       539,315       813,341       1,164,903  
Sales of available–for–sale securities     180,863       28,652       189,937       28,852  
Business combinations, net of cash acquired           (3,670 )           (3,670 )
Owned real estate projects     (22,996 )     (6,788 )     (52,535 )     (25,774 )
Capital expenditures, excluding owned real estate projects     (38,528 )     (26,539 )     (69,121 )     (61,017 )
Purchases of cost method investments     (5,000 )     (200 )     (5,450 )     (300 )
Sale and maturities of cost method investments     732       315       732       315  
Other           (684 )           (296 )
Net cash provided by (used in) investing activities     201,345       (26,779 )     (21,544 )     (88,123 )
Cash flows from financing activities                                
Proceeds from issuance of common stock from employee equity plans     32,274       25,395       34,527       28,776  
Other     (32 )     195       (76 )     571  
Net cash provided by (used in) financing activities     32,242       25,590       34,451       29,347  
Effect of exchange rate changes     715       (144 )     583       494  
Net increase (decrease) in cash, cash equivalents and restricted cash     249,428       5,189       208,638       111,057  
Cash, cash equivalents and restricted cash at the beginning of period       501,104         405,955         541,894         300,087  
Cash, cash equivalents and restricted cash at the end of period   $ 750,532     $ 411,144     $ 750,532     $ 411,144  

*Prior–period information has been restated for the adoption of ASU No. 2014–09, Revenue from Contracts with Customers (Topic 606), and ASU No. 2016–18, Statement of Cash Flows, Restricted Cash (Topic 230), both of which we adopted on February 1, 2017.

         
    Three Months Ended July 31,   Six Months Ended July 31,
    2017   2016   2017   2016
Supplemental cash flow data                        
Cash paid for interest, net of amounts capitalized   $ 46   $ 2,652   $ 46   $ 2,656
Cash paid for income taxes     1,262     3,566     2,608     4,147
Non–cash investing and financing activities:                        
  Vesting of early exercise stock options   $ 282   $ 460   $ 564   $ 920
  Property and equipment, accrued but not paid     33,219     11,426     33,219     11,426
  Non–cash additions to property and equipment     485     394     627     915
                         
    July 31, 2017   July 31, 2016
*As Adjusted
Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows            
Cash and cash equivalents   $ 748,599   $ 405,529
Restricted cash included in Other assets     1,933     1,615
Restricted cash included in Property and equipment, net         4,000
Total cash, cash equivalents and restricted cash   $ 750,532   $ 411,144
                         
   
Workday, Inc.  
Reconciliation of GAAP to Non–GAAP Data  
Three Months Ended July 31, 2017  
(in thousands, except per share data) (unaudited)  
   
    GAAP     Share–Based Compensation Expenses     Other Operating Expenses (3)     Amortization of Debt Discount and Issuance Costs     Non–GAAP  
Costs and expenses:                                        
Costs of subscription services   $ 65,931     $ (6,580 )   $ (208 )   $     $ 59,143  
Costs of professional services     92,264       (9,301 )     (379 )           82,584  
Product development     221,103       (56,923 )     (6,602 )           157,578  
Sales and marketing     171,952       (25,942 )     (1,126 )           144,884  
General and administrative     55,699       (22,777 )     (754 )           32,168  
Operating income (loss)     (81,629 )     121,523       9,069             48,963  
Operating margin     (15.5 )%     23.1 %     1.7 %     %     9.3 %
Other income (expense), net     938                   6,785       7,723  
Income (loss) before provision for (benefit from) income taxes     (80,691 )     121,523       9,069       6,785       56,686  
Provision for (benefit from) income taxes (1)     1,841                         1,841  
Net income (loss)   $ (82,532 )   $ 121,523     $ 9,069     $ 6,785     $ 54,845  
Net income (loss) per share (2)   $ (0.40 )   $ 0.59     $ 0.04     $ 0.01     $ 0.24  
(1)   The Company's GAAP tax provision is primarily related to state taxes and income tax in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the US. Accordingly, there is no tax impact associated with the non–GAAP adjustments.
(2)   GAAP net loss per share calculated based upon 207,028 basic and diluted weighted–average shares of common stock. Non–GAAP net income per share calculated based upon 225,610 diluted weighted–average shares of common stock.
(3)   Other operating expenses include total employer payroll tax–related items on employee stock transactions of $4.3 million, and amortization of acquisition–related intangible assets of $4.8 million.
     
   
Workday, Inc.  
Reconciliation of GAAP to Non–GAAP Data  
Three Months Ended July 31, 2016  
(in thousands, except per share data) (unaudited)  
   
    GAAP
*As Adjusted
    Share–Based Compensation Expenses     Other Operating Expenses (3)     Amortization of Debt Discount and Issuance Costs     Non–GAAP
*As Adjusted
 
Costs and expenses:                                        
Costs of subscription services   $ 51,379     $ (4,968 )   $ (133 )   $     $ 46,278  
Costs of professional services     66,473       (5,969 )     (226 )           60,278  
Product development     161,886       (38,314 )     (2,566 )           121,006  
Sales and marketing     134,899       (20,844 )     (707 )           113,348  
General and administrative     45,705       (18,127 )     (924 )           26,654  
Operating income (loss)     (86,685 )     88,222       4,556             6,093  
Operating margin     (23.2 )%     23.6 %     1.2 %     %     1.6 %
Other income (expense), net     (21,193 )                 6,690       (14,503 )
Income (loss) before provision for (benefit from) income taxes     (107,878 )     88,222       4,556       6,690       (8,410 )
Provision for (benefit from) income taxes (1)     (65 )                       (65 )
Net income (loss)   $ (107,813 )   $ 88,222     $ 4,556     $ 6,690     $ (8,345 )
Net income (loss) per share (2)   $ (0.55 )   $ 0.45     $ 0.02     $ 0.04     $ (0.04 )
(1)   The Company's GAAP tax provision is primarily related to state taxes and income tax in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the US. Accordingly, there is no tax impact associated with the non–GAAP adjustments.
(2)   Calculated based upon 197,223 basic and diluted weighted–average shares of common stock.
(3)   Other operating expenses include total employer payroll tax–related items on employee stock transactions of $3.2 million, and amortization of acquisition–related intangible assets of $1.4 million recorded as part of product development expenses.

*Prior–period information has been restated for the adoption of ASU No. 2014–09, Revenue from Contracts with Customers (Topic 606), which we adopted on February 1, 2017.

   
Workday, Inc.  
Reconciliation of GAAP to Non–GAAP Data  
Six Months Ended July 31, 2017  
(in thousands, except per share data) (unaudited)  
   
    GAAP     Share–Based Compensation Expenses     Other Operating Expenses (3)     Amortization of Debt Discount and Issuance Costs     Non–GAAP  
Costs and expenses:                                        
Costs of subscription services   $ 125,729     $ (12,271 )   $ (754 )   $     $ 112,704  
Costs of professional services     169,177       (17,322 )     (1,285 )           150,570  
Product development     417,542       (107,952 )     (15,564 )           294,026  
Sales and marketing     327,661       (49,101 )     (2,800 )           275,760  
General and administrative     106,901       (42,665 )     (2,072 )           62,164  
Operating income (loss)     (141,829 )     229,311       22,475             109,957  
Operating margin     (14.1 )%     22.8 %     2.2 %     %     10.9 %
Other income (expense), net     (725 )                 13,735       13,010  
Income (loss) before provision for (benefit from) income taxes     (142,554 )     229,311       22,475       13,735       122,967  
Provision for (benefit from) income taxes (1)     4,022                         4,022  
Net income (loss)   $ (146,576 )   $ 229,311     $ 22,475     $ 13,735     $ 118,945  
Net income (loss) per share (2)   $ (0.71 )   $ 1.12     $ 0.11     $ 0.01     $ 0.53  
(1)   The Company's GAAP tax provision is primarily related to state taxes and income tax in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the US. Accordingly, there is no tax impact associated with the non–GAAP adjustments.
(2)   GAAP net loss per share calculated based upon 205,453 basic and diluted weighted–average shares of common stock. Non–GAAP net income per share calculated based upon 223,825 diluted weighted–average shares of common stock.
(3)   Other operating expenses include total employer payroll tax–related items on employee stock transactions of $12.8 million, and amortization of acquisition–related intangible assets of $9.7 million.
     
   
Workday, Inc.  
Reconciliation of GAAP to Non–GAAP Data  
Six Months Ended July 31, 2016  
(in thousands, except per share data) (unaudited)  
   
    GAAP
*As Adjusted
    Share–Based Compensation Expenses     Other Operating Expenses (3)     Amortization of Debt Discount and Issuance Costs     Non–GAAP
*As Adjusted
 
Costs and expenses:                                        
Costs of subscription services   $ 100,579     $ (9,365 )   $ (452 )   $     $ 90,762  
Costs of professional services     125,900       (11,262 )     (716 )           113,922  
Product development     303,664       (71,282 )     (6,360 )           226,022  
Sales and marketing     262,518       (39,846 )     (1,797 )           220,875  
General and administrative     86,888       (34,702 )     (1,736 )           50,450  
Operating income (loss)     (158,215 )     166,457       11,061             19,303  
Operating margin     (21.9 )%     23.1 %     1.5 %     %     2.7 %
Other income (expense), net     (27,031 )                 13,289       (13,742 )
Income (loss) before provision for (benefit from) income taxes     (185,246 )     166,457       11,061       13,289       5,561  
Provision for (benefit from) income taxes (1)     1,070                         1,070  
Net income (loss)   $ (186,316 )   $ 166,457     $ 11,061     $ 13,289     $ 4,491  
Net income (loss) per share (2)   $ (0.95 )   $ 0.85     $ 0.06     $ 0.06     $ 0.02  
(1)   The Company's GAAP tax provision is primarily related to state taxes and income tax in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the US. Accordingly, there is no tax impact associated with the non–GAAP adjustments.
(2)   GAAP net loss per share calculated based upon 195,887 basic and diluted weighted–average shares of common stock. Non–GAAP net income per share calculated based upon 206,531 diluted weighted–average shares of common stock. 
(3)   Other operating expenses include total employer payroll tax–related items on employee stock transactions of $8.3 million, and amortization of acquisition–related intangible assets of $2.7 million recorded as part of product development expenses. 

*Prior–period information has been restated for the adoption of ASU No. 2014–09, Revenue from Contracts with Customers (Topic 606), which we adopted on February 1, 2017.

   
Workday, Inc.  
Reconciliation of GAAP Cash Flows from Operations to Free Cash Flows  
(A Non–GAAP Financial Measure)  
(in thousands)  
(unaudited)  
   
    Three Months Ended July 31,     Six Months Ended July 31,  
    2017     2016
*As Adjusted
    2017     2016
*As Adjusted
 
Net cash provided by (used in) operating activities   $ 15,126     $ 6,522     $ 195,148     $ 169,339  
Capital expenditures, excluding owned real estate projects     (38,528 )     (26,539 )     (69,121 )     (61,017 )
  Free cash flows   $ (23,402 )   $ (20,017 )   $ 126,027     $ 108,322  
                                 
                                 
    Trailing Twelve Months Ended
July 31,
                 
    2017     2016
*As Adjusted
                 
Net cash provided by (used in) operating activities   $ 376,435     $ 320,589                  
Capital expenditures, excluding owned real estate projects     (128,917 )     (140,895 )                
  Free cash flows   $ 247,518     $ 179,694                  

*Prior–period information has been restated for the adoption of ASU No. 2014–09, Revenue from Contracts with Customers (Topic 606), and ASU No. 2016–18, Statement of Cash Flows, Restricted Cash (Topic 230), both of which we adopted on February 1, 2017.

About Non–GAAP Financial Measures

To provide investors and others with additional information regarding Workday's results, we have disclosed the following non–GAAP financial measures: non–GAAP operating income (loss), non–GAAP net income (loss) per share and free cash flows. Workday has provided a reconciliation of each non–GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The non–GAAP financial measures of non–GAAP operating income (loss) and non–GAAP net income (loss) per share differ from GAAP in that they exclude share–based compensation expenses, employer payroll tax–related items on employee stock transactions, amortization of acquisition–related intangible assets, and non–cash interest expense related to our convertible senior notes. Free cash flows differ from GAAP cash flows from operating activities in that it treats capital expenditures (excluding owned real estate projects) as a reduction to cash flows.

Workday's management uses these non–GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short– and long–term operating plans, and to evaluate Workday's financial performance and the ability of operations to generate cash. Management believes these non–GAAP financial measures reflect Workday's ongoing business in a manner that allows for meaningful period–to–period comparisons and analysis of trends in Workday's business, as they exclude expenses that are not reflective of ongoing operating results. Management also believes that these non–GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday's operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Additionally, management believes information regarding free cash flows provides investors and others with an important perspective on the cash flows generated by normal recurring activities to make strategic acquisitions and investments, to fund ongoing operations and to fund other capital expenditures, after our owned real estate projects.

Management believes excluding the following items from the GAAP Condensed Consolidated Statement of Operations is useful to investors and others in assessing Workday's operating performance due to the following factors:

  • Share–based compensation expenses. Although share–based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude share–based compensation expenses in order to better understand the long–term performance of our core business and to facilitate comparison of our results to those of peer companies. For restricted stock unit awards, the amount of share–based compensation expenses is not reflective of the value ultimately received by the grant recipients. Moreover, determining the fair value of certain of the share–based instruments we utilize involves a high degree of judgment and estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share–based awards. Unlike cash compensation, the value of stock options and shares offered under our Employee Stock Purchase Plan, which are elements of our ongoing share–based compensation expenses, is determined using a complex formula that incorporates factors, such as market volatility and forfeiture rates, that are beyond our control.
  • Other Operating Expenses. Other operating expenses includes employer payroll tax–related items on employee stock transactions and amortization of acquisition–related intangible assets. The amount of employer payroll tax–related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition and thus we do not believe it is reflective of ongoing operations.
  • Amortization of debt discount and issuance costs. Under GAAP, we are required to separately account for liability (debt) and equity (conversion option) components of the convertible senior notes that were issued in private placements in June 2013. Accordingly, for GAAP purposes we are required to recognize the effective interest expense on our convertible senior notes and amortize the issuance costs over the term of the notes. The difference between the effective interest expense and the contractual interest expense, and the amortization expense of issuance costs are excluded from management's assessment of our operating performance because management believes that these non–cash expenses are not indicative of ongoing operating performance. Management believes that the exclusion of the non–cash interest expense provides investors an enhanced view of the Company's operational performance.

Additionally, we believe that the non–GAAP financial measure, free cash flows, is meaningful to investors because we review cash flows generated from or used in operations after deducting certain capital expenditures that are considered to be an ongoing operational component of our business. Capital expenditures deducted from cash flows from operations do not include purchases of land and buildings, and construction costs of our new development center and of other owned buildings. We exclude these owned real estate projects as they are infrequent in nature. For the current fiscal year, these costs primarily represent the construction of our new development center which is anticipated to be completed in fiscal 2020. This provides an enhanced view of cash available to make strategic acquisitions and investments, to fund ongoing operations and to fund other capital expenditures, after our owned real estate projects.

The use of non–GAAP operating income (loss) and non–GAAP net income (loss) per share measures has certain limitations as they do not reflect all items of income and expense that affect Workday's operations. Workday compensates for these limitations by reconciling the non–GAAP financial measures to the most comparable GAAP financial measures. These non–GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non–GAAP measures may differ from the non–GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday's financial information in its entirety and not rely on a single financial measure.