LOGM 2017 Annual Report

Years Ended December 31, 2015 2016 2017 GAAP Diluted net income per diluted share . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.56 $ 0.10 $ 1.93 Add Back: Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03 1.47 1.31 Litigation-related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.19 0.01 0.05 Acquisition-related costs and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.44 1.34 4.72 Less: Income tax effect of non-GAAP items (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.56) (0.89) (3.75) Non-GAAP Net income per diluted share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.66 $ 2.03 $ 4.26 Shares used in computing diluted non-GAAP net income per share . . . . . . . . . . . . 25,780 26,164 51,463 (1) The non-GAAP provision for income taxes and income tax effect of non-GAAP items excludes a net tax benefit of $85.6 million recorded in the fourth quarter of 2017 related to the U.S. Tax Act. Off-Balance Sheet Arrangements We do not engage in any off-balance sheet financing activities, nor do we have any interest in entities referred to as variable interest entities. Contractual Obligations The following table summarizes our contractual obligations at December 31, 2017 and the effect such obligations are expected to have on our liquidity and cash flow in future periods. Payments Due by Period (in thousands) (1) Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . $122,266 $19,842 $56,522 $24,969 $20,933 Contractual commitments, including hosting service agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,980 30,539 15,441 — — Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $168,246 $50,381 $71,963 $24,969 $20,933 (1) Excluded from the table above is $5.1 million related to uncertain tax positions as we are uncertain as to when a cash settlement for these liabilities will occur. The commitments under our operating leases shown above consist primarily of lease payments for our corporate headquarters located in Boston, Massachusetts, our other United States locations, our international locations in Hungary, Germany, India, Australia, the United Kingdom, Ireland and Israel, as well as our contractual obliga- tions related to our data centers (see Note 11 to the Consolidated Financial Statements). Our purchase orders represent authorizations to purchase rather than binding agreements and therefore are not included in the table above. The contractual commitment amounts in the table above are associated with agree- ments that are enforceable and legally binding. Obligations under contracts that we can cancel without significant penalty are not included in the table above. As of December 31, 2017, we had letters of credit and bank guarantees of $8.9 million (of which $1.8 million is collateralized and is classified as restricted cash), primarily related to our corporate headquarters in Boston, Massachusetts. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK . Foreign Currency Exchange Risk. Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates as our non-U.S. sales are recorded by our subsidiaries located in Ire- land, the United Kingdom, Australia and Brazil and as we incur significant operating expenses in our foreign 51