

þ		QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended September 30, ~~2015~~2016



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

(Exact name of registrant as specified in its charter)




DELAWARE		77-0021975
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization)

1 EBIX WAY
JOHNS CREEK, GEORGIA		30097
(Address of principal executive offices)		(Zip Code)



Large accelerated filer oþ	Accelerated filer þo	Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

PART I — FINANCIAL INFORMATION

Item 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(In thousands, except per share data)

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

~~Table of Contents~~

Ebix, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)


	September 30, 2015		December 31, 2014		September 30, 2016		December 31, 2015
ASSETS	(Unaudited)				(Unaudited)
Current assets:
Cash and cash equivalents	$	33,200	$	52,300	$	99,806	$	57,179
Short-term investments	1,014		281		2,975		1,538
Trade accounts receivable, less allowances of $2,406 and $1,619, respectively	47,166		41,100
Deferred tax asset, net	802		2,113
Restricted cash					8,975		—
Trade accounts receivable, less allowances of $1,909 and $3,388, respectively					60,795		47,171
Other current assets	11,058		8,067		12,832		10,942
Total current assets	93,240		103,861		185,383		116,830

Property and equipment, net	33,583		24,661		36,187		34,088
Goodwill	408,093		402,220		428,063		402,259
Intangibles, net	49,591		49,371		38,151		51,848
Indefinite-lived intangibles	30,887		30,887		30,887		30,887
Capitalized software development costs, net					3,173		3,489
Deferred tax asset, net	20,563		18,758		33,435		23,732
Other assets	12,522		4,553		5,836		12,856
Total assets	$	648,479	$	634,311	$	761,115	$	675,989

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	21,703	$	40,121	$	30,353	$	23,043
Accrued payroll and related benefits	6,020		5,280		6,127		4,932
Current portion of long term debt and capital lease obligations, net of discount of $5 and $7, respectively	607		936
Short term debt, net of deferred financing costs of $136 and $0, respectively					12,364		—
Current portion of long term debt and capital lease obligations, net of discount of $0 and $3, respectively					9		606
Current deferred rent	311		268		271		232
Contingent liability for accrued earn-out acquisition consideration	1,690		887		1,621		1,706
Deferred revenue	19,251		22,192		20,334		20,519
Other current liabilities	98		102		242		228
Total current liabilities	49,680		69,786		71,321		51,266

Revolving line of credit	186,465		120,465		134,029		206,465
Long term debt and capital lease obligations, less current portion, net of discount of $0 and $7, respectively	41		593
Long term debt and capital lease obligations, less current portion, net of deferred financing costs of $540 and $0, respectively					108,863		35
Other liabilities	2,157		2,179		3,858		3,332
Contingent liability for accrued earn-out acquisition consideration	6,323		4,480		—		2,571
Deferred revenue	1,803		2,496		1,728		1,968
Long term deferred rent	1,847		2,091		1,110		1,381
Total liabilities	248,316		202,090		320,909		267,018

Commitments and Contingencies, Note 5
Commitments and Contingencies (see Note 5)

Stockholders’ equity:
Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at September 30, 2015 and December 31, 2014	—		—
Common stock, $0.10 par value, 60,000,000 shares authorized, 33,787,094 issued and outstanding, at September 30, 2015 and 36,232,074 issued and 36,191,565 outstanding at December 31, 2014	3,378		3,619
Additional paid-in capital	69,756		137,101
Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at September 30, 2016 and December 31, 2015					—		—
Common stock, $0.10 par value, 60,000,000 shares authorized, 32,382,162 issued and outstanding, at September 30, 2016 and 33,416,110 issued and outstanding at December 31, 2015					3,238		3,342


Treasury stock (no shares as of September 30, 2015 and 40,509 shares as of December 31, 2014)	—			(76		)
Additional paid-in capital							16,229			57,120
Treasury stock (no shares as of September 30, 2016 and December 31, 2015)							—			—
Retained earnings	359,341			309,726			440,604			378,787
Accumulated other comprehensive loss	(32,312		)	(18,149		)	(31,291		)	(30,278		)
Total stockholders’ equity	400,163			432,221
Total Ebix, Inc. stockholders’ equity							428,780			408,971
Noncontrolling interest (see Note 8)							11,426			—
Total stockholders' equity							440,206			408,971
Total liabilities and stockholders’ equity	$	648,479		$	634,311		$	761,115		$	675,989

~~Table of Contents~~

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(In thousands except for share figures)


	Common Stock																						Common Stock
	Issued Shares		Amount			Treasury Stock Shares		Treasury Stock Amount			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total			Issued Shares		Amount			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling interest		Total

Balance, December 31, 2014	36,232,074		$	3,619		(40,509	)	$	(76	)	$	137,101		$	309,726		$	(18,149	)	$	432,221
Net income	—		—			—		—			—			57,604			—			57,604
Balance, December 31, 2015																							33,416,110		$	3,342		$	57,120		$	378,787		$	(30,278	)	$	—	$	408,971
Net income attributable to Ebix, Inc.																							—		—			—			69,218			—			—		69,218
Net income attributable to noncontrolling interest (see Note 8)																																					133		133
Cumulative translation adjustment	—		—			—		—			—			—			(14,163		)	(14,163		)	—		—			—			—			(1,013		)	—		(1,013		)
Repurchase and retirement of common stock	(2,513,692	)	(252		)						(68,541		)							(68,793		)	(1,097,390	)	(110		)	(42,845		)							—		(42,955		)
Vesting of restricted stock	91,011		9			—		—			(9		)	—			—			—			53,282		6			(6		)	—			—			—		—
Exercise of stock options	56,250		6			—		—			1,111			—			—			1,117			13,500		1			28			—			—			—		29
Share based compensation	—		—			—		—			1,244			—			—			1,244			—		—			2,078			—			—			—		2,078
Tax benefit related to share-based compensation	—		—			—		—			63			—			—			63
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested	(38,040	)	(4		)	—		—			(1,137		)	—			—			(1,141		)	(3,340	)	(1		)	(146		)	—			—			—		(147		)
Retirement of treasury stock	(40,509	)	—			40,509		76			(76		)	—			—			—
Recognized controlling ownership of Ebix-IHC joint venture																							—		—			—			—			—			11,293		11,293
Dividends paid	—		—			—		—			—			(7,989		)	—			(7,989		)	—		—			—			(7,401		)	—			—		(7,401		)
Balance, September 30, 2015	33,787,094		$	3,378		—		$	—		$	69,756		$	359,341		$	(32,312	)	$	400,163
Balance, September 30, 2016																							32,382,162		$	3,238		$	16,229		$	440,604		$	(31,291	)	$	11,426	$	440,206

~~Table of Contents~~

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2016			2015
Cash flows from operating activities:
Net income	$	57,604		$	47,011
Net income attributable to Ebix, Inc.							$	69,218		$	57,604
Net income attributable to noncontrolling interest							133			—
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,932			7,442			8,088			7,932
Benefit for deferred taxes	(5,749		)	(1,810		)	(6,250		)	(5,749		)
Share based compensation	1,244			1,333			2,078			1,244
Provision for doubtful accounts	1,950			1,083			700			1,950
Debt discount amortization on promissory note payable	13			26			—			13
Unrealized foreign exchange (gain) loss	(2,008		)	(256		)
Loss on put option	—			(296		)
Unrealized foreign exchange gain							(328		)	(2,008		)
Gain on invesment interest in IHC/Ebix joint venture							(1,162		)	—
Amortization of capitalized software development costs							1,040			—
Reduction of acquisition earnout accruals	(1,533		)	(7,533		)	(1,726		)	(1,533		)
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable	(6,328		)	(1,901		)	(11,205		)	(6,328		)
Other assets	(3,606		)	(3,977		)	(3,402		)	(3,606		)
Accounts payable and accrued expenses	(21,448		)	(8,064		)	(4,499		)	(21,448		)
Accrued payroll and related benefits	1,100			1,027			79			1,100
Deferred revenue	(3,096		)	(704		)	(290		)	(3,096		)
Deferred rent	(111		)	(272		)	(168		)	(111		)
Reserve for potential uncertain income tax return positions	594			9,337			700			594
Liability - securities litigation settlement payment	(690		)	(3,868		)	—			(690		)
Other liabilities	(205		)	(188		)	44			(205		)
Net cash provided by operating activities	25,663			38,390			53,050			25,663

Cash flows from investing activities:
Acquisition of Via Media Health, net of cash acquired	(1,000		)	—			—			(1,000		)
Acquisition of P.B. Systems, net of cash acquired	(11,475		)	—			—			(11,475		)
Acquisition of HealthCare Magic, net of cash acquired	—			(5,856		)
Investment in Joint Venture	(6,000		)	—
Acquisition of CurePet, Inc., net of cash acquired	—			3
Payment of acquisition earn-out contingency, Taimma	—			(2,250		)
Investment in the EbixHealth JV, net of cash acquired							(696		)	(6,000		)
Capitalized software development costs							(1,034		)	—
Purchases of marketable securities	(940		)	(595		)	(1,078		)	(940		)
Capital expenditures	(12,713		)	(15,922		)	(4,420		)	(12,713		)
Net cash used in investing activities	(32,128		)	(24,620		)	(7,228		)	(32,128		)

Cash flows from financing activities:
Proceeds from revolving line of credit, net	66,000			40,625
Proceeds (repayments) from revolving line of credit, net							(72,436		)	66,000
Proceeds from term loan							125,000			—
Principal payments of term loan obligation	—			(31,938		)	(3,125		)	—
Repurchases of common stock	(67,780		)	(16,482		)	(43,775		)	(67,780		)
Excess tax benefit from share-based compensation	63			(3,200		)	—			63
Proceeds from the exercise of stock options	1,117			788			29			1,117
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested	(1,141		)	(37		)	(147		)	(1,141		)
Dividend payments	(7,989		)	(8,652		)	(7,401		)	(7,989		)
Shares reacquired in connection with put option	—			(3,535		)
Principal payments of debt obligations	(638		)	(336		)	(600		)	(638		)
Payments of capital lease obligations	(3		)	(144		)	(4		)	(3		)
Net cash used in financing activities	(10,371		)	(22,911		)	(2,459		)	(10,371		)
Effect of foreign exchange rates on cash	(2,264		)	(183		)	(736		)	(2,264		)
Net change in cash and cash equivalents	(19,100		)	(9,324		)	42,627			(19,100		)
Cash and cash equivalents at the beginning of the period	52,300			56,674			57,179			52,300
Cash and cash equivalents at the end of the period	$	33,200		$	47,350		$	99,806		$	33,200
Supplemental disclosures of cash flow information:
Interest paid	$	4,002		$	802		$	5,318		$	4,002
Income taxes paid	$	24,663		$	10,782		$	14,068		$	24,663

See accompanying notes to the condensed consolidated financial statements.

Supplemental schedule of noncash financing activities:

Effective January 27, 2014 Ebix acquired the entire business of CurePet, Inc. ("CurePet") in an asset purchase agreement with the total purchase consideration being in the amount of $6.35 million of which included a possible future one time contingent

earnout payment of up to $5.0 million based on earned revenues over the subsequent thirty-six month period following the date of the acquisition. This contingent earnout liability is estimated to have a fair value of zero. Additional required cash consideration of $1.35 million was offset against open receivable balances due to Ebix, Inc. from CurePet, and therefore no actual cash outlay was made by Ebix, Inc. Previously during 2012, Ebix acquired a minority19.8% interest in CurePet for cash consideration in the amount of $2.0 million.

During the nine months ended September 30, ~~2015~~2016 there were ~~38,040~~3,340 shares, totaling ~~$1.14 million,~~$147 thousand, used to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vesting.

As of ~~September 30,~~December 31, 2015 there were ~~40,000~~25,000 shares totaling ~~$1.0 million~~$820 thousand of share repurchases that were not settled until ~~October 2015.~~January 2016.

Ebix, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Note 1: Description of Business and Summary of Significant Accounting Policies

Description of Business— Ebix, Inc. and subsidiaries (“Ebix” or the “Company”) is an international supplier of on-demand software and e-commerce solutions to the insurance, healthcare and financial ~~industries.~~industries, as well as e-governance solutions to governmental agencies in the health and education sectors. Ebix provides various application software products for the insurance industry ~~ranging from~~including data exchanges, carrier systems, broker systems, and agency systems, toand custom software development for business entities across the insurance industry. The Company's products feature fully customizable and scalable on-demand software applications designed to streamline the way insurance professionals manage distribution, marketing, sales, customer service, and accounting activities. The Company has its headquarters in Johns Creek, Georgia and also conducts operating activities in Australia, Canada, India, Dubai, New Zealand, Singapore, United Kingdom and Brazil. International revenue accounted for ~~22.7%~~27.8% and ~~32.8%~~22.7% of the Company’s total revenue for the nine months ended September 30, ~~2015~~2016 and ~~2014~~2015, respectively.

The Company’s revenues are derived from four product/service ~~groups.~~channels. Presented in the table below is the breakout of our revenue streams for each of those product/service ~~groups~~channels for the three and nine months ended September 30, ~~2015~~2016 and ~~2014~~.2015.

Summary of Significant Accounting Policies

Basis of Presentation—The accompanying unaudited condensed consolidated financial statements and these notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") with the effect of inter-company balances and transactions eliminated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP and SEC rules have been condensed or omitted as permitted by and pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements contain adjustments (consisting only of normal recurring items) necessary to fairly present the consolidated financial position of the Company and its consolidated results of operations and cash flows. Operating results for the nine months ended September 30, ~~2015~~2016 and ~~2014~~2015 are not necessarily indicative of the results that may be expected for future quarters or the full year of ~~2015.~~2016. The condensed consolidated December 31, ~~2014~~2015 balance sheet included in this interim period filing has been derived from the audited financial statements at that date but does not necessarily include all of the information and related notes required by GAAP for complete financial statements. These condensed interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2014~~2015.

~~Reclassification—~~The change in reserve for potential uncertain income tax return positions had been previously netted against the provision for deferred taxes line in the consolidated statements of cash flows, it is now shown separately. Also, beginning in 2014 the Company has applied the new provisions under Financial Accounting Standard ("FAS") update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, A Similar Tax Loss, or a Tax Credit Carryforward Exists and as more fully described in Note 6 "Income Taxes". A portion of potential uncertain income tax return positions previously reported in "Other Liabilities" on the condensed consolidated balance sheets are now netted against the "Deferred tax asset, net" line in the long term asset section of the condensed consolidated balance sheets.

Advertising—With the exception of certain direct-response costs, advertising costs are expensed as incurred. Advertising costs amounted to ~~$2.1~~$4.7 million and ~~$695 thousand~~$2.1 million in the first nine months of ~~2015~~2016 and ~~2014,~~2015, respectively, and are included in sales and marketing expenses in the accompanying Condensed Consolidated Statements of Income. Sales and marketing expenses ~~have been reduced~~ in the first nine months of ~~2015 as a result of~~2016 include the deferment of $151 thousand (net of amortization) ~~$2.9 million~~ of certain

direct-response advertising costs associated with our ~~recent~~ acquisition of Oakstone, which have been capitalized in accordance with Accounting Standards Codification ("ASC") Topic 340. These costs are being amortized to expense over periods ranging from twelve to twenty-four months based on the type of product the customer purchases.

Fair Value of Financial Instrument—The Company follows the relevant GAAP guidance concerning fair value measurements which provides a consistent framework to define, measure, and disclose the fair value of assets and liabilities in financial statements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability ~~(an~~

(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction. This guidance establishes a three-level hierarchy priority for disclosure of assets and liabilities recorded at fair value. The ordering of priority reflects the degree to which objective data from external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable.

Level 1 Inputs - Unadjusted quoted prices available in active markets for identical investments to the reporting entity at the measurement ~~date~~date.

Level 2 Inputs - Other than quoted prices included in Level 1 inputs, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 Inputs - Unobservable inputs, which are used to the extent that observable inputs are not available, and used in situations where there is little or no market activity for the asset or liability and wherein the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

As of September 30, ~~2015~~2016 the Company had the following financial instruments to which it had to consider fair values and had to make fair value assessments:

Other financial instruments not measured at fair value on the Company's unaudited condensed consolidated balance sheet at September 30, ~~2015~~2016 but which require disclosure of their fair values include: cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, accrued payroll and related benefits, capital lease obligations, and ~~debt under~~ the revolving line of credit and term loan debt under the syndicated credit agreement facility with Regions Financial Corporation. The Company believes that the estimated fair value of such instruments at September 30, ~~2015~~2016 and December 31, ~~2014,~~2015 approximates their carrying value as reported on the unaudited Condensed Consolidated Balance Sheet.

Additional information regarding the Company's assets and liabilities that are measured at fair value on a recurring basis is presented in the following tables:

~~Table of Contents~~


	Fair Values at Reporting Date Using*									Fair Values at Reporting Date Using*
Descriptions	Balance, September 30, 2015		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Balance, September 30, 2016		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)									(In thousands)
Assets
Available-for-sale securities:
Commercial bank certificates of deposits	$	1,014	$	1,014	$	—	$	—		$	2,975	$	2,975	$	—	$	—
Total assets measured at fair value	$	1,014	$	1,014	$	—	$	—		$	2,975	$	2,975	$	—	$	—

Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	$	8,013	$	—	$	—	$	8,013		$	1,621	$	—	$	—	$	1,621
Total liabilities measured at fair value	$	8,013	$	—	$	—	$	8,013		$	1,621	$	—	$	—	$	1,621

(a) The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, projected cash flows, rate of return, and probability assessments.
* During the three months ended September 30, 2015 there were no transfers between fair value Levels 1, 2 or 3.
* During the nine months ended September 30, 2016 there were no transfers between fair value Levels 1, 2 or 3.									* During the nine months ended September 30, 2016 there were no transfers between fair value Levels 1, 2 or 3.

~~Table of Contents~~

For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the nine months ended September 30, ~~2015~~2016 and during the year ended December 31, ~~2014:~~2015:


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)							Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent Liability for Accrued Earn-out Acquisition Consideration		Balance, September 30, 2015			Balance, December 31, 2014				September 30, 2016			December 31, 2015
		(in thousands)							(in thousands)

Beginning balance		$	5,367		$	14,420			$	4,277		$	5,367

Total remeasurement adjustments:
(Gains) or losses included in earnings **		(1,533		)	(10,237		)
Gains included in earnings **									(1,726		)	(1,533		)
Reductions recorded against goodwill		(2,000		)	—				(664		)	(2,000		)
Foreign currency translation adjustments ***		(47		)	(314		)		(266		)	(73		)

Acquisitions and settlements
Business acquisitions		6,226			4,312				—			2,516
Settlement payments		—			(2,814		)		—			—

Ending balance		$	8,013		$	5,367			$	1,621		$	4,277

The amount of total (gains) or losses for the period included in earnings or changes to net assets, attributable to changes in unrealized (gains) or losses relating to assets or liabilities still held at period-end.		$	(1,533	)	$	(8,911	)
The amount of total (gains) losses for the period included in earnings or changes to net assets, attributable to changes in unrealized gains relating to assets or liabilities still held at period-end. Vertex earnout period expired in the third quarter of 2016 and gain was realized.									$	(1,006	)	$	(1,533	)

** recorded as an adjustment to reported general and administrative expenses
** recorded as an reduction to reported general and administrative expenses								** recorded as an reduction to reported general and administrative expenses
*** recorded as a component of other comprehensive income within stockholders' equity	*** recorded as a component of other comprehensive income within stockholders' equity							*** recorded as a component of other comprehensive income within stockholders' equity

Quantitative Information about Level 3 Fair Value Measurements

The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows:

~~Table of Contents~~

Sensitivity to Changes in Significant Unobservable Inputs

As presented in the table above, the significant unobservable inputs used in the fair value measurement of contingent consideration related to business acquisitions are projected revenue forecasts as developed by the relevant members of Company's management team and the probability of achievement of those revenue forecasts. ~~The discount rate used in these calculations is~~ ~~1.75%~~. Significant increases (decreases) in these unobservable inputs in isolation would result in a significantly higher (lower) fair value measurement. The Company applies these terms in its calculation and determination of the fair value of contingent earn out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the corresponding acquired assets and liabilities. During the 1st and 2nd quarter of 2016, certain of the Company's contingent earn out liabilities were adjusted because of changes to anticipated future revenues from these acquired businesses, or as a result of finalizing purchase price allocations that were previously provisional.

Revenue Recognition—The Company derives its revenues primarily from subscription and transaction fees pertaining to services delivered over our exchanges or from our ~~ASP~~application service provider ("ASP") platforms, fees for risk compliance solution services, and fees for software development projects including associated fees for consulting, implementation, training, and project management provided to customers with installed systems and applications. Sales and value-added taxes are not included in revenues, but rather are recorded as a liability until the taxes assessed are remitted to the respective taxing authorities.

In accordance with Financial Accounting Standard Board (“FASB”) and SEC accounting guidance on revenue recognition, the Company considers revenue earned and realizable when: (a) persuasive evidence of the sales arrangement exists, provided that the arrangement fee is fixed or determinable, (b) delivery or performance has occurred, (c) customer acceptance has been received or is assured, if contractually required, and (d) collectability of the arrangement fee is probable. The Company uses signed contractual agreements as persuasive evidence of a sales arrangement. We apply the provisions of the relevant generally accepted accounting principles related to all transactions involving the license of software where the software deliverables are considered more than inconsequential to the other elements in the arrangement.

For contracts that contain multiple deliverables, we analyze the revenue arrangements in accordance with the relevant technical accounting guidance, which provides criteria governing how to determine whether goods or services that are delivered separately in a bundled sales arrangement should be considered as separate units of accounting for the purpose of revenue recognition. These types of arrangements include deliverables pertaining to software licenses, system set-up, and professional services associated with product customization or modification. Delivery of the various contractual elements typically occurs over periods of less than eighteen months. These arrangements generally do not have refund provisions or have very limited refund terms.

Software development arrangements involving significant customization, modification or production are accounted for in accordance with the appropriate technical accounting guidance issued by FASB using the percentage-of-completion method. The Company recognizes revenue using periodic reported actual hours worked as a percentage of total expected hours required to complete the project arrangement and applies the percentage to the total arrangement fee.

Accounts Receivable and the Allowance for Doubtful Accounts Receivable—Reported accounts receivable include $~~39.3~~49.9 million of trade receivables stated at invoice billed amounts and ~~$10.3~~$12.8 million of unbilled receivables, net of the estimated allowance for doubtful accounts receivable in the amount of $~~2.4~~1.9 million,. The unbilled receivables pertain to certain projects for which the timing of billing is tied to contractual milestones. The Company adheres to such contractually stated performance milestones and accordingly issues invoices to customers as per contract billing schedules. Approximately ~~$6.3~~$5.1 million of deferred revenue is included in billed accounts receivable at September 30, ~~2015.~~2016. The Company recognized and recorded bad debt expense in the amount of ~~$1.65~~$243 thousand and $700 thousand for the three and nine-month periods ended September 30, 2016 and $1.7 million and ~~$1.95~~$2.0 million for the three and ~~nine-month~~nine-month periods ended September 30, 2015, ~~and $336 thousand and $1.1 million for the three and~~ ~~nine-month periods ended~~ ~~September 30, 2014~~, respectively. Accounts receivable are written off against the allowance account when the Company has exhausted all reasonable collection efforts. During the nine months ~~ending~~ended September 30, ~~2015 $1.2~~2016, $2.2 million of accounts receivable, which had been specifically reserved for in prior periods, were written off.

Goodwill and Other Indefinite-Lived Intangible Assets—Goodwill represents the cost in excess of the fair value of the net assets of acquired businesses. Indefinite-lived intangible assets represent the fair value of certain acquired contractual customer relationships for which future cash flows are expected to continue indefinitely. In accordance with the relevant FASB accounting guidance, goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment at the reporting unit level on an annual basis or on an interim basis if an event occurs or circumstances change that would likely have reduced the fair value

~~Table of Contents~~

of a reporting unit below its carrying value. Potential impairment indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, and the sale or disposition of a significant portion of the business. The impairment evaluation process involves an assessment of certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of any of our reporting units was less than its carrying amount. If after assessing the totality of events or circumstances, we were to determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company would not perform the two-step quantitative impairment testing described further below.

The aforementioned two-step quantitative testing process involves comparing the reporting unit carrying values to their respective fair values; we determine fair value of our reporting units by applying the discounted cash flow method using the present value of future estimated net cash flows. If the fair value of a reporting unit exceeds its carrying value, then no further testing is required. However, if a reporting unit's fair value were to be less than its carrying value, we would then determine the amount of the impairment charge, if any, which would be the amount that the carrying value of the reporting unit's goodwill exceeded its implied value. Projections of cash flows are based on our views of growth rates, operating costs, anticipated future economic conditions and the appropriate discount rates relative to risk and estimates of residual values. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. The use of different estimates or assumptions for our projected discounted cash flows (e.g., growth rates, future economic conditions, discount rates and estimates of terminal values) when determining the fair value of our reporting units could result in different values and may result in a goodwill impairment charge. In 2015 the goodwill residing in the Broker Systems reporting unit and the Carrier Systems reporting unit, were evaluated for impairment based on an assessment of certain qualitative factors, and were determined not to have been impaired. In 2015 the goodwill residing in the Exchange reporting unit and the Risk Compliance Solutions ("RCS") reporting unit were evaluated for impairment using step-one of the quantitative testing process described above. The fair value of both of these reporting units were found to be greater than their carrying value, and thusly there was no need to proceed to step-two, as there was no impairment indicated. In specific regards to the Risk Compliance Solutions reporting unit, its assessed fair value was $102.0 million which was $13.5 million or 15% in excess of its $88.5 million carrying value. Key assumptions used in the fair value determination were annual revenue growth of 2% to 3% and discount rate of 16%. As of December 31, 2015 there was $64.0 million of goodwill assigned to the RCS reporting unit. A significant reduction in future revenues for the RCS reporting unit would negatively effect the fair value determination for this unit and may result in an impairment to goodwill and a corresponding charge against earnings. We perform our annual goodwill impairment evaluation and testing as of September 30th of each year. This evaluation is done during the fourth quarter each year. During the year ended December 31, ~~2014~~2015 we had no impairment of our reporting unit goodwill balances. ~~The 2015 goodwill impairment evaluation is currently underway and will be completed commensurate with the release of the Company's full year 2015 financial reporting.~~

Changes in the carrying amount of goodwill for the nine months ended September 30, ~~2015~~2016 and the year ended December 31, ~~2014~~2015 are reflected in the following table.


	September 30, 2015			December 31, 2014			September 30, 2016			December 31, 2015
	(In thousands)						(In thousands)
Beginning Balance	$	402,220		$	337,068		$	402,259		$	402,220
Additions (net of adjustments)	10,382			68,503
Additions (see Note 3)							21,789			8,868
Purchase accounting adjustments for acquisitions provisionally recorded (see Note 3 "Business Combinations")							4,298			(2,099		)
Contributed portions of CurePet investment to Joint Ventures,(see Note 8, "Investment in Joint Ventures")							—			(1,783		)
Foreign currency translation adjustments	(4,509		)	(3,351		)	(283		)	(4,947		)
Ending Balance	$	408,093		$	402,220		$	428,063		$	402,259

Capitalized Software Development Costs—In accordance with the relevant FASB accounting guidance regarding the development of software to be sold, leased, or marketed, the Company expenses such costs as they are incurred until technological feasibility has been established, at and after which time those costs are capitalized until the product is available for general release to customers. Costs incurred to enhance our software products, after general market release of the services using the products, are expensed in the period they are incurred.

Finite-lived Intangible Assets—Purchased intangible assets represent the estimated acquisition date fair value of customer relationships, developed technology, trademarks and non-compete agreements obtained in connection with the businesses we acquire. We amortize these intangible assets on a straight-line basis over their estimated useful lives, as follows:



Category		Life (yrs)
Customer relationships		7–20
Developed technology		3–12
Trademarks		3–15
Non-compete agreements		5
Backlog		1.2
Database		10

The carrying value of finite-lived and indefinite-lived intangible assets at September 30, ~~2015~~2016 and December 31, ~~2014~~2015 are as follows:

Amortization expense recognized in connection with acquired intangible assets was ~~$1.8~~$1.7 million and $5.1 million for the three and nine months ended September 30, 2016, respectively, and $1.8 million and $5.4 million for the three and nine months ended September 30, 2015, ~~and $1.9 million and $5.6 million for the three and~~ ~~nine~~ ~~months ended September 30, 2014,~~ respectively.

Foreign Currency Translation—The functional currency for the Company's foreign subsidiaries in India, Dubai, and Singapore is the U.S. dollar because the intellectual property research and development activities provided by its Dubai and Singapore ~~subsidiary,~~subsidiaries, and the product development and information technology enabled services activities for the insurance industry provided by its India subsidiary, both in support of Ebix's operating divisions across the world, are transacted in U.S. dollars.

The functional currency of the Company's other foreign subsidiaries is the local currency of the country in which the subsidiary operates. The assets and liabilities of these foreign subsidiaries are translated into U.S. dollars at the rates of exchange at the balance sheet dates. Income and expense accounts are translated at the average exchange rates in effect during the period. Gains and losses resulting from translation adjustments are included as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets, and are included in the condensed consolidated statements of comprehensive income. Foreign exchange transaction gains and losses that are derived from transactions denominated in a currency other than the subsidiary's functional currency are included in the determination of net income.

Income Taxes—Deferred income taxes are recorded to reflect the estimated future tax effects of differences between the financial statement and tax basis of assets, liabilities, operating losses, and tax credit carry forwards using the tax rates expected to be in effect when the temporary differences reverse. Valuation allowances, if any, are recorded to reduce deferred tax assets to

The Company also applies the relevant FASB accounting guidance on accounting for uncertainty in income taxes positions. This guidance clarifies the accounting for uncertainty in income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. In this regard we recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The Company has applied the provisions under ~~FAS~~FASB update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry Forward, A Similar Tax Loss, or a Tax Credit Carry Forward Exists. Under these provisions, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward in most cases. This provision has been applied ~~and $1.20 million and $1.14 million~~resulting in $341 thousand of unrecognized tax benefits have been applied against both the NOL carry forward amounts as of September 30, ~~2015~~2016 and December 31, ~~2014, respectively.~~2015.

Recent Relevant Accounting Pronouncements—The following is a brief discussion of recently released accounting pronouncements that are pertinent to the Company's business:

In August 2016 the FASB issued Accounting Standards Update ("ASU") No. 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. This ASU addresses the following eight specific cash flow issues: Contingent consideration payments made after a business combination; distributions received from equity method investees; debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and bank-owned life insurance policies; and beneficial interests in securitization transactions; and also addresses separately identifiable cash flows and application of the predominance principle. The amendments in this Update apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the ASU for those issuers would be applied prospectively as of the earliest date practicable. The Company will adopt this ASU in January 2017 and has not yet determined the impact of its adoption.

In March 2016 the FASB issued Accounting Standards Update ("ASU") No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)". The amendments relate to when another party, along with the Company, is involved in providing a good or service to a customer. Topic 606 Revenue from Contracts with Customers requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is an agent). The amendments are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by clarifying the following:

> An entity determines whether it is a principal or an agent for each specified good or service promised to a customer.

> An entity determines the nature of each specified good or service (e.g., whether it is a good, service, or a right to a good or service).

> When another entity is involved in providing goods or services to a customer, an entity that is a principal obtains control of: (a) a good or another asset from the other party that it then transfers to the customer; (b) a right to a service that will be performed by another party, which gives the entity the ability to direct that party to provide the service to the customer on the entity’s behalf; or (c) a good or service from the other party that it combines with other goods or services to provide the specified good or service to the customer.

> The purpose of the indicators in paragraph 606-10-55-39 is to support or assist in the assessment of control. The amendments in paragraph 606-10-55-39A clarify that the indicators may be more or less relevant to the control assessment and that one or more indicators may be more or less persuasive to the control assessment, depending on the facts and circumstances.

The effective date and transition of these amendments is the same as the effective date and transition of ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). The Company will adopt this new technical accounting guidance at that time and does not expect its adoption to have a material effect on its result of operations or financial position.

In March 2016 the FASB issued ASU 2016-07 "Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting". The amendments affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. The amendments eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The Company will adopt this new technical guidance in 2017, and has not yet determined the impact of its adoption.

In March 2016 the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718)”. This amendment simplifies the requirements for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments in this ASU are effective for annual periods beginning after December 31, 2016, and interim periods within those annual periods. The Company will adopt ASU in January 2017, but has not fully assessed the impact its adoption will have on the Company's results of operations or financial position.

In February 2016 the FASB issued ASU 2016-02, "Leases (Topic 842)". This new accounting guidance is intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The ASU will require organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than twelve months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet the new ASU will require both types of leases (i.e., operating and capital) to be recognized on the balance sheet. The FASB lessee accounting model will continue to account for both types of leases. The capital lease will be accounted for in substantially the same manner as capital leases are accounted for under existing GAAP. For operating leases there will have to be the recognition of a lease liability and a lease asset for all such leases greater than one year in term. The leasing standard will be effective for calendar year-end public companies beginning after December 15, 2018. Public companies will be required to adopt the new leasing standard for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all companies and organizations. For calendar year-end public companies, this means an adoption date of January 1, 2019 and retrospective application to previously issued annual and interim financial statements for 2018 and 2017. Lessees with a large portfolio of leases are likely to see a significant increase in balance sheet assets and liabilities. See Note 5 for the Company’s current lease commitments. The Company is evaluating the impact that this new leasing ASU will have on its financial statements.

In September 2015 the FASB issued ~~Accounting Standards Update (ASU)~~ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period ~~Adjustments.~~Adjustments". This pronouncement simplifies the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments eliminate the requirement to retrospectively account for those adjustments.

~~U.S.~~ GAAP currently requires that during the measurement period, the acquirer retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill. Those adjustments are required when new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts initially recognized or would have resulted in the recognition of additional assets or liabilities.

The acquirer also must revise comparative information for prior periods presented in financial statements as needed, including revising depreciation, amortization, or other income effects as a result of changes made to provisional amounts.

The amendments require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record and disclose, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.

For public business entities, the amendments ~~are~~became effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date with earlier application permitted for financial statements that have not been issued. The only disclosures required at transition should be the nature of and reason for the change in accounting principle. An entity should disclose that information in the first annual period of adoption and in the interim periods within the first annual period if there is a measurement-period adjustment during the first annual period in which the changes are effective. The Company adopted this ASU during the third quarter of 2015 and its adoption did not have a material impact on its financial statements.

In November ~~2014~~2015, the FASB issued ~~Accounting Standards Update ("ASU")~~ASU No. ~~2014-17~~2015-17, "~~Business Combinations Pushdown Accounting~~Balance Sheet Classification of Deferred Taxes ~~(a consensus of~~". This ASU requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the ~~FASB Emerging Issues Task Force). The amendments in this ASU apply~~balance sheet. Prior to the ~~separate financial statements~~issuance of ~~an acquired entity~~ASU 2015-17, deferred taxes were required to be presented as a net current asset or liability and ~~its subsidiaries that are~~ a ~~business (either public~~net noncurrent asset or ~~nonpublic)~~liability. We adopted the provisions of ASU 2015-17 upon issuance and prior period amounts have been reclassified to conform to the ~~occurrence~~current period presentation. As of ~~an event in which an acquirer (an individual or an entity) obtains control~~December 31, 2014, the previously reported balance of ~~the acquired entity. The amendments in this ASU provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence~~our net current deferred tax assets of ~~an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting~~$2.11 million was reclassified in the ~~reporting period in which~~consolidated balance sheet and netted against the ~~change-in-control event occurs. If pushdown accounting is~~net long-term deferred tax liabilities. The adoption of ASU 2015-17 did not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable. If an acquired entity elects the option to apply pushdown accounting in its separateimpact our consolidated financial ~~statements, it should disclose information in the current reporting period that enables users~~position, results of financial statements to evaluate the effect of pushdown accounting. The amendments in this ASU were effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control eventsoperations or ~~to its most recent change-in-control event. The Company has adopted this ASU and its adoption has not had a material impact on its financial statements.~~cash flows.

In May 2014 the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers". ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.

An entity should apply the amendments in this ASU using one of the following two methods:

1. Retrospectively to each prior reporting period presented and the entity may elect any of the following practical expedients:

2. Retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. If an entity elects this transition method it also should provide the additional disclosures in reporting periods that include the date of initial application of:

Subsequently, in August 2015 the FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers: Deferral of Effective Date", to defer the effective date of ASU No. 2014-09 for all entities by one year. Accordingly public business entities should apply the guidance of ASU ~~No.~~ 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that annual reporting period.

Although early adoption is allowed, the Company plans to adopt this new accounting standard on its newly revised effective date of January 1, 2018, but it has not presently determined the impact that the adoption of ASU No. 2014-09 will have on its income statement, balance sheet, or statement of cash flows. Furthermore, the Company has not yet determined the method of retrospective adoption it will use as described in first and second paragraphs immediately above.

In a related technical accounting pronouncement in April 2016 the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”, which is an amendment to ASU 2014-09. This amendment provides clarification on two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Topic 606. Public entities should apply the amendments for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Early application for public entities is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The effective date for nonpublic entities is deferred by one year. A summary of this ASU is as follows:

Identifying Performance Obligations

Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments add the following guidance:

1. An entity is not required to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer.

2. An entity is permitted, as an accounting policy election, to account for shipping and handling activities that occur after the customer has obtained control of a good as an activity to fulfill the promise to transfer the good rather than as an additional promised service.

To identify performance obligations in a contract, an entity evaluates whether promised goods and services are distinct. The amendments improve the guidance on assessing the promises are separately identifiable criterion by:

1. Better articulating the principle for determining whether promises to transfer goods or services to a customer are separately identifiable by emphasizing that an entity determines whether the nature of its promise in the contract is to transfer each of the goods or services or whether the promise is to transfer a combined item (or items) to which the promised goods and/or services are inputs.

~~Table~~2. Revising the related factors and examples to align with the improved articulation of ~~Contents~~the separately identifiable principle.

Licensing Implementation Guidance

Topic 606 includes implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to improve the operability and understandability of the licensing implementation guidance by clarifying the following:

1. An entity’s promise to grant a customer a license to intellectual property that has significant standalone functionality (e.g., the ability to process a transaction, perform a function or task, or be played or aired) does not include supporting or maintaining that intellectual property during the license period.

2. An entity’s promise to grant a customer a license to symbolic intellectual property (that is, intellectual property that does not have significant standalone functionality) includes supporting or maintaining that intellectual property during the license period.

3. An entity considers the nature of its promise in granting a license, regardless of whether the license is distinct, in order to apply the other guidance in Topic 606 to a single performance obligation that includes a license and other goods or services (in particular, the guidance on determining whether a performance obligation is satisfied over time or at a point in time and the guidance on how best to measure progress toward the complete satisfaction of a performance obligation satisfied over time).

Note 2: Earnings per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
	2015		2014		2015		2014		2016		2015		2016		2015
	(In thousands, except per share data)								(In thousands, except per share data)
Net income for basic and diluted earnings per share	$	20,232	$	18,015	$	57,604	$	47,011
Net income attributable to Ebix, Inc.									$	24,067	$	20,232	$	69,218	$	57,604
Basic Weighted Average Shares Outstanding	34,304		38,050		35,014		38,264		32,421		34,304		32,716		35,014
Dilutive effect of stock options and restricted stock awards	211		203		227		235		284		211		278		227
Diluted weighted average shares outstanding	34,515		38,253		35,241		38,499		32,705		34,515		32,994		35,241
Basic earnings per common share	$	0.59	$	0.47	$	1.65	$	1.23	$	0.74	$	0.59	$	2.12	$	1.65
Diluted earnings per common share	$	0.59	$	0.47	$	1.63	$	1.22	$	0.74	$	0.59	$	2.10	$	1.63

Note 3: Business Combinations

The Company seeks to execute accretive business acquisitions (which primarily targets businesses that are complementary to Ebix's existing products and services), in combination with organic growth initiatives, as part of its comprehensive business growth and expansion ~~strategy, which primarily consist of businesses that are complementary to Ebix's existing products and services.~~strategy.

During the nine months ended September 30, 2016, the Company completed one business acquisition as follows:

Effective July 1, 2016 Ebix and IHC jointly executed a Call Notice agreement, whereby Ebix purchased additional common units in the EbixHealth JV from IHC constituting eleven percent (11%) of the EbixHealth JV for $2.0 million cash which resulted in Ebix holding an aggregate fifty-one percent (51%) controlling equity interest in the EbixHealth JV. Commensurate with additional equity stake in the joint venture a contemporaneous valuation of the business was completed. In accordance with the technical accounting guidance pertaining to step acquisitions the Company recorded goodwill in the amount of $21.8 million, a non-controlling interest in the amount of $11.3 million, and recognized a $1.2 million gain on its previously carried 40% equity interest in the EbixHealth JV. This recognized gain is reflected as a component of other non-operating income in the accompanying Condensed Consolidated Statement of Income. The valuation of the EbixHealth JV is considered preliminary as the allocation to the identified tangible and intangible assets (e.g. customer lists, trade name, developed technology), and the determination of the residual goodwill has yet to performed, but will be completed in line with the filing of the Company's 2016 annual report on Form 10-K. Previously, effective September 1, 2015 Ebix and Independence Holdings Corporation ("IHC") formed a joint venture named Ebix Health Exchange Holdings, LLC ("EbixHealth JV"). Ebix paid $6.0 million and contributed a license to use certain CurePet software and systems valued by the EbixHealth JV at $2.0 million, for its initial 40% membership interest in the EbixHealth JV.

During the year ended December 31, 2015, the Company completed two business acquisitions, as follows:

The Company acquired PB Systems, Inc. (a U.S. company) and PB Systems Private Limited (an Indian company) (together, being "PB Systems"), effective June 1, 2015. PB Systems develops and implements software solutions for insurance clients. Ebix acquired PB Systems for upfront cash consideration in the amount of $12.4 million, plus possible future contingent earn out payments of up to $8.0 million based on earned revenues over the subsequent twenty-four month period following the effective date of the acquisition. The Company has determined that the fair value of the contingent earn out consideration is zero as of September 30, 2016. In the Company's Form 10-Q for the six months ended June 30, 2015, Form 10-Q for the nine months ended September 30, 2015, Form 10-K for the year ended December 31, 2015, and Form 10-Q for the three months ended March 31, 2016 the Company had disclosed that the valuation and purchase price allocation for the PB Systems acquisition iswas preliminary because all of the information necessary to determine the fair value of the acquired customer relationship intangible asset and ~~will be finalized prior~~fair value of the revenue-based earn out contingent liability was still in the process of being evaluated by management and the Company's external valuation firms. This evaluation was completed during the second quarter ended June 30, 2016 and resulted in a $1.8 million reduction to the developed technology intangible asset, a $1.6 million reduction to the customer relationship intangible

The Company acquired Via Media Health Communications Private Limited ("Via Media Health"), effective March 1, 2015. Via Media Health is one of India’s leading health content and communication companies. Ebix acquired Via Media Health for upfront cash consideration in the amount of $1.0 million, plus a possible future one time contingent earn out payment of up to $372 thousand based on earned revenues over the subsequent ~~twelve~~twelve- month period following the effective date of the acquisition, and an additional possible one time future performance bonus of up to $1.0 million depending upon revenue growth realized in the business over the subsequent twenty-four month period following the effective date of the acquisition. The ~~valuation and purchase price allocation for~~Company has determined that the ~~Via Media Health acquisition remains preliminary and will be finalized prior to December 31, 2015.~~

~~During the year ended December 31, 2014 the Company complete the following business acquisitions, as follows:~~

Effective December 2, 2014, Ebix acquired Oakstone Publishing, LLC ("Oakstone") in a membership interest purchase agreement for total net cash consideration in the amount of $23.72 million ($31.37 million less a closing net working capital adjustment of $7.65 million). Oakstone is leading provider of continuing education, certification materials for physicians, dentists and allied healthcare professionals, as well as wellness resources for various organizations. Ebix acquired allfair value of the outstanding membership interests of Oakstone and funded the purchase using a mix of internal cash reserves and the bank credit line available to Ebix. The Company accounted for this acquisition by recording $28.8 million of goodwill, $1.7 million of intangible assets pertaining to customer relationships, $501 thousand of intangible assets pertaining to acquired technology, and a $6.5 million deferred revenue liability. The valuation and purchase price allocation for the Oakstone acquisition remains preliminary and will be finalized prior to December 31, 2015.

~~On December 1, 2014, Ebix acquired the DCM Group Inc. (d.b.a. i3 Software) ("i3") in an asset purchase agreement for total cash consideration in the amount of $2 million and a possible~~ contingent earn out consideration is zero as of up to $4 million based on earned revenues over the subsequent twenty-four month period following the date of the acquisition. i3 is a provider of software services and solutions to the insurance industry. Ebix acquired all of the assets of i3 and funded the purchase using internal cash reserves. The

OnNovember 3, 2014, Ebix acquired Vertex, Incorporated ("Vertex"), with an effective date of October 1, 2014, in a share purchase agreement for total cash purchase consideration in the amount of $27.25 million and a possible contingent earn out of $2 million based on earned revenues over the subsequent twenty-four month period following the date of the acquisition. Vertex is a specialized software and services firm focused primarily on the life and annuity insurance marketplace since 1991. Ebix acquired all of the outstanding capital stock of Vertex and funded the purchase using a mix of internal cash reserves and the bank credit line available to Ebix. The Company accounted for this acquisition by recording $27.7 million of goodwill, $2.5 million of intangible assets pertaining to customer relationships, and $235 thousand of intangible assets pertaining to acquired technology.

On May 21, 2014, Ebix acquired HealthCare Magic Private Limited ("HealthCare Magic"), a medical advisory service with an online network of approximately fifteen thousand General Physicians and Surgeons spread across fifty specialties including alternative medicine. The Company acquired HealthCare Magic for aggregate cash consideration in the amount of $6.0 million plus a possible future one time contingent earn out payment of up to $12.36 million based on earned revenues over the subsequent twenty-four month period following the effective date of the acquisition. This contingent earnout liability is currently estimated to have a fair value of $596 thousand. The Company funded the HealthCare Magic acquisition from available cash reserves on hand. The Company accounted for this acquisition by recording $5.6 million of goodwill, $452 thousand of intangible assets pertaining to customer relationships, $100 thousand of intangible assets pertaining to acquired technology, $59 thousand on intangible assets pertaining to trademarks and tradenames, and $226 thousand of intangible assets pertaining to non-compete agreements.

On January 27, 2014, Ebix acquired CurePet. CurePet was a developmental-stage enterprise that developed an insurance exchange that connects pet owners, referring veterinarians, animal hospitals, academic institutes, and suppliers of medical and general pet supplies, while providing a wide variety of services related to pet insurance to each constituent including practice management, electronic medical records, and billing. Previously Ebix had a minority investment in CurePet. Ebix acquired the entire business of CurePet in an asset purchase agreement with total purchase consideration being $6.35 million which includes a possible future one time contingent earnout payment of up to $5.0 million based on earned revenues over the subsequent thirty-six month period following the effective date of the acquisition. This contingent earnout liability is currently estimated to have a fair value of zero. Additional required cash consideration of $1.35 million was offset against open accounts receivable balances due to the Company from CurePet, and no actual cash outlay was made by the Company. As discussed in Note 9, "Investment in Joint Venture," to the accompanying financial statements, upon the formation of Ebix Health Solutions, LLC, effective September 1, 2015, a joint venture between Ebix and IHC Health Holdings Corporation, Ebix contributed certain portions of its investment in CurePet to said joint venture as part of the consideration towards Ebix's 40% membership interest. The agreed upon value of the contributed CurePet investment was $2.0 million.30, 2016.

A significant component of the purchase price consideration for many of the Company's business acquisitions is a potential subsequent cash earnout payment based on reaching certain specified future revenue targets. The terms for the contingent earn out payments in most of the Company's business acquisitions typically address the GAAP recognizable revenues achieved by the acquired entity over a one, two, and/or three year period subsequent to the effective date of their acquisition by Ebix. These terms typically establish a minimum threshold revenue target with achievement of revenues recognized over that target being awarded in the form of a specified cash earn out payment. The Company applies these terms in its calculation and determination of the fair value of contingent earn out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the corresponding acquired assets and liabilities. The Company recognizes these potential obligations as contingent liabilities and are reported ~~accordingly~~as such on its Condensed Consolidated Balance Sheets. As discussed in more detail in Note 1, these contingent consideration liabilities are recorded at fair value on the acquisition date and are remeasured quarterly based on the then assessed fair value and adjusted if necessary. During the nine months ended September 30, ~~2015~~2016 and ~~2014~~2015, these aggregate contingent accrued earn-out business acquisition consideration liabilities were reduced by ~~$1.5~~$2.4 million and ~~$7.5~~$1.5 million, respectively, due to remeasurements as based on the then assessed fair value and changes in anticipated future revenue levels. These reductions to the contingent accrued earn-out liabilities resulted in a corresponding reduction of $1.7 million to general and administrative expenses as reported on the Condensed Consolidated Statements of ~~Income.~~Income and a reduction of $664 thousand to goodwill as reported in the enclosed Condensed Consolidated Balance Sheets. As of September 30, ~~2015,~~2016, the total of these contingent liabilities was ~~$8.01~~$1.62 million, of which ~~$6.32 million~~none is reported in long-term liabilities, and ~~$1.69~~$1.62 million is included in current liabilities in the Company's Condensed Consolidated Balance Sheet. As of December 31, ~~2014~~2015 the total of these contingent liabilities was ~~$5.37~~$4.28 million, of which ~~$4.48~~$2.57 million iswas reported in long-term liabilities, and ~~$887 thousand is~~$1.71 million was included in current liabilities in the Company's Condensed Consolidated Balance Sheet.

The aggregated unaudited pro forma financial information pertaining to all of the Company's acquisitions made during the nine months ended September 30, ~~2014~~2015 and September 30, ~~2015,~~2016, which includes the acquisitions of ~~CurePet (acquired in January 2014),~~ Via Media Health (acquired in March 2015), ~~and~~ PB Systems (acquired June 2015), ~~as well as~~and the ~~effect of other businesses acquired in 2014, namely HealthCare Magic (May 2014), Vertex (October 2014), Oakstone (December 2014), and i3~~

~~(December 2014),~~EbixHealth JV (being fully consolidated effective July 1, 2016) as presented in the table below is provided for informational purposes only and is not a projection of the Company's expected results of operations for any future period. No effect has been given in this pro forma information for future synergistic benefits that may still be realized as a result of combining these companies or costs that may yet be incurred in integrating their operations. The ~~2015~~2016 and ~~2014~~2015 pro forma financial information below assumes that all such business acquisitions were made on January 1, ~~2014,~~2015, whereas the Company's reported financial statements for the ~~three and~~ ~~nine~~three months ended September 30, ~~2015~~2016 only include the operating results from these businesses since the effective date that they were acquired by Ebix.

During the three months ended September 30, ~~2015~~2016 the Company's reported total operating revenues increased by ~~$16.0~~$7.8 million or ~~32%~~12% to ~~$66.8~~$74.6 million as compared to ~~$50.8~~$66.8 million during the ~~third quarter of 2014. Revenues increased as a result of revenue growth from Life, Annuity, Underwriting, Health Content services,~~same period in ~~addition to revenue growth generated from the Company's 2014 acquisitions of HealthCare Magic, Vertex, and Oakstone and the 2015 acquisition of PB Systems, partially offset~~2015. Reported revenues were effected by the ~~drop~~continuing weakening in ~~revenue from international locations due~~the foreign currencies in which we conduct operations (particularly in Australia, Brazil, Great Britain, and India) as compared to the strengthening of the U.S. ~~dollar and a modest decrease in revenues from~~dollar. Specifically, the ~~company’s pharmaceutical and P&C carrier backend operations. The~~ adverse impact from fluctuations of the exchange rates for the foreign currencies in the countries in which we conduct operations, ~~which~~ in the aggregate reduced reported revenues inby $348 thousand and $3.3 million for the ~~3rd quarter of 2015 by $3.4 million.~~three and nine months ended September 30, 2016, respectively.

With respect to business acquisitions completed during the years ~~2015~~2016 and ~~2014~~2015 on a pro forma basis, as disclosed in the above ~~“Pro Forma Financial Information”,~~pro forma financial information table, combined revenues ~~decreased 4.1%~~increased 7% and 6% for the ~~third quarter of 2015~~three and nine months ending September 30, 2016, respectively, versus the ~~third quarter of 2014.~~same periods in 2015. The ~~2015~~2016 and ~~2014~~2015 pro forma financial information assumes that all business acquisitions made during this period were made on January 1, ~~2014,~~2015, whereas the Company's reported financial statements for Q3 ~~2015~~2016 and Q3 ~~2014~~2015 only includes the revenues from these businesses since the effective date that they were acquired or consolidated by Ebix, being ~~January 2014 for CurePet, May 2014 for HealthCare Magic, October 2014 for Vertex, December 2014 for Oakstone and i3,~~ March 2015 for Via Media Health, ~~and~~ June 2015 for PB ~~Systems.~~Systems, and July 2016 for the EbixHealth JV.

The above referenced pro forma information and the relative comparative change in pro forma and reported revenues are based on the following premises:

•~~2015~~2016 and ~~2014~~2015 pro forma revenue contains actual revenue of the acquired entities before acquisition date, as reported by the sellers, as well as actual revenue of the acquired entities after ~~acquisition. Whereas~~acquisition, whereas the reported growth in revenues of the acquired entities after acquisition date are only reflected for the period after their acquisition.

•Revenue billed to existing clients from the cross selling of acquired products has been assigned to the acquired section of our business.

•Any existing products sold to new customers obtained through a newly acquired customer base are assigned to the acquired section of our business.

•Pro formas do not include post acquisition revenue reductions as a result of discontinuation of any product lines and/or customer projects by Ebix in ~~its bid~~line with the Company's initiatives to maximize profitability.

Note 4: Debt with Commercial Bank

On ~~February 3, 2015, Ebix, Inc.~~June 17, 2016, the Company and certain of its subsidiaries entered into the ~~First~~Second Amendment (the ~~“First~~“Second Amendment”) to the Regions Secured Credit Facility (as defined below), dated August 5, 2014, among the Company, Regions ~~Financial Corporation~~Bank as Administrative and Collateral Agent ~~(“Regions”~~("Regions"), ~~with~~ Regions ~~MUFG Union Bank N.A.,~~Capital Markets, PNC Capital Markets, LLC, and ~~Silicon Valley Bank~~TD Securities (USA) as joint Lead Arrangers for the syndicate of lenders. The ~~First~~Second Amendment ~~amends~~increases the ~~Regions Credit Facility by increasing the maximum amount by which the Aggregate Revolving Commitments may be increased~~total credit facility to ~~$90~~$400 million from the ~~pre-existing limit~~prior amount of ~~$50~~$240 million, ~~increases~~and expands the syndicated bank group to eleven participants by adding seven new participants which include PNC Bank, National Association BMO Harris Bank N.A., Key Bank National Association, HSBC Bank National, Cadence Bank, the Toronto-Dominion Bank (New York Branch), and Trustmark National Bank. The Credit Agreement (as defined below) now consists of a 5-year revolving credit component in the amount of ~~base~~$275 million, and a 5-year term loan component in the amount of $125 million, with repayments due in the amount $3.13 million due each quarter, starting

September 30, 2016 . The Credit Agreement also contains an accordion feature, which if exercised and approved by all credit parties, would expand the total borrowing capacity under the syndicated credit facility to ~~$190 million from the pre-existing amount of $150 million,~~$500 million. The credit facility carries a leverage-based LIBOR related interest rate, which ~~together with~~currently stands at approximately 2.81%.

On October 8, 2015 Ebix exercised the $50 million accordion feature ~~increases~~under the ~~total~~Regions Secured Credit Facility. TD Bank, NA was added to the syndication group along with four other bank participants which include Regions. The exercise of the accordion feature increased the Aggregate Revolving Commitment under the Credit Agreement ~~capacity amount~~ to $240 million from the prior amount of ~~$200 million, and expands the syndicated bank group to four participants by adding Fifth Third Bank.~~$190 million.

On August 5, 2014, Ebix entered into a credit agreement providing for a $150 million secured syndicated credit facility (the “Regions Secured Credit Facility”) with Regions as administrative agent and Regions with MUFG Union Bank N.A., and Silicon Valley Bank as joint lenders. The financing is comprised of a five-year, $150 million secured revolving credit facility, with an option to expand to $200 million upon request and with additional lender commitments. This new $150 million credit facility with Regions, as administrative agent, replaced the former syndicated $100 million facility that the Company had in place with Citi Bank, N.A. which was paid in full upon the undertaking of this new loan facility with Regions. The interest rate applicable to the Secured Syndicated Credit Facility is LIBOR plus 1.50%. Under the Regions Secured Credit Facility the maximum interest rate that could be charged depending upon the Company's leverage ratio is LIBOR plus 2.25%. The underlying financing agreement contains financial covenants regarding the Company's fixed charge coverage ratio and leverage ratio, as well as certain restrictive covenants pertaining to such matters as the incurrence of new debt and the consummation of new business acquisitions. The Company currently is in compliance with all such financial and restrictive covenants. As of September 30, ~~2015~~2016 the Company's consolidated balance sheet includes ~~$1.40~~$3.38 million of remaining deferred financing ~~costs.~~costs in connection with this credit facility, which are being amortized as a component of interest expense over the five-year term of the financing agreement. In regards to these deferred financing costs, $2.7 million pertains to the revolving line of credit component of the Credit Agreement, and $676 thousand pertains to the term loan component of the Credit Agreement of which $136 thousand is netted against the current portion and $540 thousand is netted against the long-term portions of the term loan as reported on the Condensed Consolidated Balance.

At September 30, ~~2015,~~2016, the outstanding balance on the revolving line of credit under the ~~Regions Secured~~ Credit ~~Facility~~Agreement was ~~$186.5~~$134.0 million and the facility carried an interest rate of ~~2.00%~~2.81%. During the nine months ended September 30, ~~2015, $66.0~~2016, $50.0 million of draws were made off of the revolving credit ~~facility, and no payments were made against~~facility. In June the revolving line of ~~credit.~~credit was refinanced in conjunction with the Second Amendment to the Credit Agreement with $125 million being converted to a term loan, with the resulting balance on the revolving line of credit being $104.0 million (including certain deferred financing costs and before a $15 million draw). The revolving line of credit balance is included in the long-term liabilities section of the Condensed Consolidated Balance Sheets. ~~During~~Prior to the Second Amendment, during the nine months period ended September 30, ~~2015,~~2016, the average and maximum outstanding balances ~~on our~~of the revolving line of credit ~~facilities~~component of the credit facility were ~~$145.1~~$179.4 million and ~~$186.5~~$226.5 million, respectively.

At September 30, 2016, the outstanding balance on the term loan was $121.9 million of which $12.5 million is due within the next twelve months, with the first repayment of $3.13 million having been made on September 30, 2016, as scheduled. This term loan also carried an interest rate of 2.81%. The current and long-term portions of the term loan are included in the respective current and long-term sections of the Condensed Consolidated Balance Sheets, the amounts of which were $12.5 million and $109.4 million respectively at September 30, 2016.

Note 5: Commitments and Contingencies

Contingencies-On December 3, 2012, the Company received a subpoena and letter from the SEC dated November 30, 2012, stating that the SEC is conducting a formal, non-public investigation styled In the Matter of Ebix, Inc. (A-3318) and seeking documents primarily related to the issues raised in the ~~matter styled~~ In re: Ebix, Inc. Securities ~~Litigation, Civil Action No. 1:11-CV-02400-RWS (N.D. Ga.).~~Litigation. On April 16, 2013, the Company received a second subpoena from the SEC seeking additional documents. The Company has cooperated with the SEC to provide the requested documents. The Company has had no substantive communication with the SEC since February 2014.

On June 6, 2013, the Company was notified that the U.S. Attorney for the Northern District of Georgia had opened an investigation into allegations of intentional misconduct that had been brought to its attention from the ~~pending~~then-pending shareholder class action lawsuit against the Company's directors and officers, the media and other sources. The Company has cooperated with the U.S. Attorney's office.

~~Table of Contents~~

continued existence of the ABA as an alleged unreasonable anti-takeover device; and, (iii) Count V, but only to the extent that it relates to the compensation the Board received under the Company’s 2010 Stock Incentive Plan. On September 15, 2014, the Court entered an Order implementing its Memorandum Opinion. On January 16, 2015, the Court entered an Order permitting Plaintiffs to file a Second Amended and Supplemented Complaint. ~~As currently pled,~~On February 10, 2015, Defendants filed a Motion to Dismiss the Second Amended and Supplemented Complaint, ~~asserts~~which was granted in part and denied in part in a January 15, 2016 Memorandum Opinion and Order. The remaining claims are as follows: (i) a purported class and derivative claim for breach of fiduciary duty

by the individual Defendants infor improperly maintaining the ABA as an unreasonable anti-takeover device; (ii) a purported class claim against the individual Defendants for breach of the fiduciary duty of disclosure to the stockholders with respect to the Company’s 2010 Proxy Statement and 2010 Stock Incentive ~~Plan,~~Plan; (iii) a purported derivative claim against the individual Defendants for breach of fiduciary duty to the Company in causing incentive compensation to be awarded to themselves and others under the 2010 Stock Incentive ~~Plan,~~Plan; (iv) a purported class and derivative claim for breach of fiduciary duty by the individual Defendants in adopting ~~the August 5, 2014 Credit Agreement, the November 26, 2014 Director Nomination Agreement with Barrington Capital Group, L.P. and~~ certain bylaw amendments ~~adopted~~on December 19, ~~2014,~~2014; and, (v) a purported class and derivative claim seeking invalidation of the December 19, 2014 bylaw amendments under Delaware ~~law,~~law. Lead Plaintiffs seek declaratory relief with respect to the 2010 Stock Incentive Plan, the 2010 Proxy Statement, and ~~(vi) a purported class claim for breach of fiduciary duty by~~ the ~~individual Defendants for issuing a purportedly materially misleading~~bylaw amendments. Lead Plaintiffs also seek compensatory damages, interest, and ~~incomplete 2014 Proxy Statement. On February 10, 2015, Defendants~~attorneys’ fees and costs. The parties have filed ~~a Motion~~answers to ~~Dismiss~~the remaining claims in the Second Amended and Supplemented Complaint and discovery has commenced. On October 25, 2016, the Court entered an Order permitting Plaintiffs to file a Verified Third Amended and Supplemented Class Action and Derivative Complaint, which ~~is pending.~~was then filed on October 26, 2016. The Company denies any liability and intends to defend the action vigorously.

The Company is involved in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate likely disposition of these matters will not have a material ~~adverse effect~~impact on ~~the Company’s consolidated~~its financial ~~position,~~operating results ~~of operations~~ or ~~liquidity.~~financial position.

Lease Commitments—The Company leases office space under non-cancelable operating leases with expiration dates ranging through 2021, with various renewal options. Capital leases range from three to five years and are primarily for computer equipment. There were multiple assets under various individual capital leases at September 30, ~~2015~~2016 and ~~2014~~.2015. Rental expense for office facilities and certain equipment subject to operating leases for the nine months ended September 30, ~~2015~~2016 and ~~2014~~2015 was $~~4.9~~4.7 million and $4.9 million, respectively.

Self Insurance—For ~~most~~some of the Company’s U.S. employees the Company is self-insured for its health insurance program and has a stop loss policy that limits the individual liability to $120 thousand per person and the aggregate liability to 125% of the expected claims based upon the number of participants and historical claims. As of September 30, ~~2015,~~2016, the amount accrued on the Company’s Condensed Consolidated Balance Sheet for the self-insured component of the Company’s employee health insurance was ~~$276~~$273 thousand. The maximum potential estimated cumulative liability for the annual contract period, which ~~ends~~ended in September 2016, iswas $2.9 million.

Note 6: Income Taxes

The Company recorded an income tax expense of ~~$1.88 million (8.49%~~$789 thousand (3.2%) and ~~$5.41~~$1.1 million ~~(8.59%~~(1.6%) during the three ~~months~~ and nine months ended September 30, ~~2015,~~2016, respectively, which included discrete items for additions to the reserve for uncertain tax positions and prior year true-ups ~~and currency fluctuations~~ups that resulted in a net tax expense charge ~~of $230 thousand.~~that was more than offset by a tax benefit from transferring certain intellectual property intangible assets in Q2. The ~~Company recorded~~ income tax expense exclusive of ~~$4.01 million (18.21%) and $11.55 million (19.72%) during~~discrete items for the three ~~months~~ and nine months ended September 30, ~~2014,~~2016, respectively, ~~which included discrete charges for the increase in the Company’s reserve for uncertain tax positions of $9.34~~is $139 thousand (0.0%) and $2.8 million ~~netted with a benefit for prior year true-ups of $2.91 million.~~(4.0%). Our tax expense and effective tax rate decreased year over year, exclusive of discrete charges, due to favorable changes in the proportion of our taxable income in certain foreign jurisdictions relative to total pre-tax income. The Company expects its full year tax rate before discrete items to be approximately 6%.

The Company’s effective tax rate reflects the benefits of having significant operations outside the United States, which are generally ~~taxes~~taxed at rates lower than the US statutory rate of 35% and where the Company enjoys a tax holiday in India. ~~The~~During 2015, the Company ~~also recently~~ secured an additional tax holiday in India until the year 2020 to support certain portions of its expanding operations there. ~~Prior to this third quarter of 2015, the~~The Company, also, had ~~a concessionary tax rate in Singapore of 10%, however,~~income during the quarter ~~the Company decided to forego further negotiations to retain these concessions and as such our tax rate~~ended September 30, 2016 in Singapore, ~~has reverted back to~~the United Kingdom, Dubai, and Sweden, where the statutory ~~enacted~~ tax rates are lower than the US rate of ~~17% effective January 1, 2015.~~35%.

As of September 30, ~~2015~~2016 a liability of ~~$3.13~~$3.8 million for uncertain tax positions is included in other ~~long term~~long-term liabilities of the Company's Condensed Consolidated Balance Sheet. During the three and nine months ended September 30, 2016 there was $650 and $700 thousand, respectively, in additions to this liability reserve. During the same periods in 2015, there ~~was $0~~were $486 thousand and ~~$108~~$594 thousand ~~respectively,~~ in additions to this liability reserve. The Company recognizes interest accrued and penalties related to unrecognized tax benefits as part of income tax expense.

~~Table of Contents~~

Note 7: Geographic Information

The Company operates with one reportable segment whose results are regularly reviewed by the Company's chief operating decision maker as to performance and allocation of resources. External customer revenues in the tables below are attributed to a

particular country based on whether the customer had a direct contract with the Company which was executed in that particular country for the sale of the Company's products/services with an Ebix subsidiary located in that country.

The impact from fluctuations of the exchange rates for the foreign currencies in the countries in which we conduct operations partially affected reported revenues, and were the primary cause for the drop in 2016 revenues in Australia and Latin America. Specifically, during the first nine months of 2016 the change in foreign currency exchange rates decreased reported Australian operating revenues by ($733) thousand, and Latin America operating revenues by $(491) thousand. India's revenue for the nine months ending September 30, 2016 revenues increased $7.5 million due primarily to the various new e-governance contracts with a number of large clients. Europe's revenues increased $8.2 million due primarily to the execution and commencement of certain significant contracts.

The following enterprise wide information relates to the Company's geographic locations (all amounts in thousands):

As of and for the Nine Months Ended September 30, ~~2015~~2016


	United States		Canada		Latin America		Australia		Singapore		New Zealand		India		Europe		Total		United States		Canada		Latin America		Australia		Singapore		New Zealand		India		Europe		Dubai		Total
External Revenues	$	150,873	$	3,386	$	4,399	$	23,301	$	3,855	$	1,662	$	2,548	$	5,254	$	195,278	$	157,480	$	4,653	$	3,933	$	22,869	$	4,384	$	1,384	$	10,076	$	13,469	$	—	$	218,248
Long-lived assets	$	374,639	$	6,899	$	5,843	$	465	$	68,805	$	204	$	73,921	$	24,463	$	555,239	$	384,511	$	6,736	$	7,328	$	1,256	$	17,505	$	228	$	80,636	$	23,199	$	54,333	$	575,732

As of and for the Nine Months Ended September 30, ~~2014~~2015

United States Canada Latin America Australia Singapore New Zealand India Europe Total
External Revenues $ 103,225
$ 4,206
$ 4,961
$ 28,247
$ 3,194
$ 2,008
$ 1,112
$ 6,735
$ 153,688
Long-lived assets $ 316,810
$ 8,233
$ 10,391
$ 652
$ 68,113
$ 77
$ 38,625
$ 27,286
$ 470,187

~~Note 8: Minority Business Investment~~



	United States		Canada		Latin America		Australia		Singapore		New Zealand		India		Europe		Dubai		Total
External Revenues	$	150,873	$	3,386	$	4,399	$	23,301	$	3,855	$	1,662	$	2,548	$	5,254	$	—	$	195,278
Long-lived assets	$	374,639	$	6,899	$	5,843	$	465	$	68,805	$	204	$	73,921	$	24,463	$	—	$	555,239

In ~~2012, Ebix acquired a minority 19.8% interest in CurePet for cash consideration in~~ the amount of $2.0 million. CurePet is a developmental-stage enterprise that developed an insurance exchange that connects pet owners, referring veterinarians, animal hospitals, academic institutes, and suppliers of medical and general pet supplies, while providing a wide variety of services relatedgeographical information table above the significant changes to pet insurance to each constituent including practice management, electronic medical records, and billing. The Company had been accounting for its minority investment in CurePet using the cost method. As disclosed in Note 3 "Business Combinations," effective January 27, 2014 Ebix acquired the entire business of CurePet in an asset purchase agreement with the total purchase consideration being in the amount of $6.35 million which included a possible contingent earn out payment of up to $5.0 million based on earned revenues over the subsequent thirty-six month period following the date of the acquisition. This contingent earnout liability is currently estimated to have a fair value of zero. During the nine months endedlong-lived assets from September 30, 2015 ~~and 2014 the CurePet business generated $80 and $325 thousand, respectively,~~to September 30, 2016 were comprised of ~~revenue which is included~~a net $9.9 million decrease in the ~~Company’s consolidated revenues reported for~~U.S. associated with transferring $28.8 million of goodwill connected with the ~~same period. As discussed immediately below~~December 2014 acquisition of Oakstone to India, partially offset by an increase in ~~Note 9, "Investment in Joint Venture," upon~~goodwill of $21.8 million associated with fully consolidating the formation of Ebix Health Solutions, LLC, effective September 1, 2015, a joint venture between Ebix and IHC Health Holdings Corporation, Ebix contributed certain portions of its investment in CurePet to said joint venture as partoperations of the ~~consideration towards Ebix's 40% membership interest. The agreed upon value~~EbixHealth JV into the Company's financial statements, a $51.3 million decrease in Singapore (net of ~~the contributed CurePet investment was $2.0 million.~~deferred taxes) with a corresponding $54.3 million increase in Dubai due to transferring certain intangible assets.

Note 9:8: Investment in Joint ~~Venture~~Ventures

Effective February 7, 2016 Ebix and Vayam Technologies Ltd ("Vayam") formed a joint venture named Ebix Vayam Limited JV. This joint venture was established to carry out IT projects in the government sector of the country of India and particularly in regards to the implementation of e-governance projects in the areas of education and healthcare. Ebix has a 51% equity interest in the joint venture, and Vayam has a 49% equity interest in the joint venture. Ebix is fully consolidating the operations of the Ebix Vayam Limited JV into the Company's financial statements and separately reporting the Vayam minority, non-controlling, interest in the joint venture's net income and equity.

Effective September 1, 2015 Ebix and Independence Holdings Corporation ("IHC") formed a joint venture named Ebix Health ~~Solutions,~~Exchange Holdings, LLC ("EbixHealth JV"). This joint venture was established to promote and market ~~a best practices administration~~an administrative data exchange for health and pet insurance lines of business nationally. Ebix paid $6.0 million and contributed a license to use certain ~~portions of its~~ CurePet ~~investment,~~software and systems valued by the EbixHealth JV at $2.0 million, for its initial 40% membership interest in the EbixHealth JV. IHC contributed all if its shares in its existing third party administrator operations (IHC Health Solutions, Inc.), valued by the EbixHealth JV at $18.0 million for its 60% membership interest in the EbixHealth ~~JV. As per~~JV, and received a special distribution of $6.0 million. Effective July 1, 2016 Ebix and IHC jointly executed a Call Notice agreement, whereby Ebix purchased additional common units in the ~~joint venture agreement, any and all losses~~EbixHealth JV from IHC constituting eleven percent (11%) of the EbixHealth JV ~~(excluding certain severance payments to former employees~~for $2.0 million cash which resulted in Ebix holding an aggregate fifty-one percent (51%) of ~~IHC Health Solutions, Inc.) through~~ the ~~period ending December 31, 2016 will be allocated to IHC,~~EbixHealth JV. Commensurate with additional equity stake in the joint venture and ~~IHC~~a new contemporaneous valuation of the business the Company realized a $1.2 million gain on its previously carried 40% equity interest in the EbixHealth JV. This recognized gain is ~~obligated to fund any negative cash flow during this period~~reflected as a ~~loan to~~component of other non-

operating income in the accompanying Condensed Consolidated Statement of Income. The valuation of the EbixHealth JV is considered preliminary as the allocation to the identified tangible and intangible assets (e.g. customer lists, trade name, developed technology), and the determination of the residual goodwill has yet to performed, but will be completed in line with ~~any remaining~~ the ~~balance~~filing of ~~said loan as~~the Company's 2016 annual report on Form 10-K. Beginning July 1, 2016 Ebix is fully consolidating the operations of ~~December 31, 2016 being then converted to contributed capital. Also, as per~~the EbixHealth JV into the Company's financial statements and separately reporting the IHC minority, non-controlling, 49% interest in the joint ~~venture agreement, Ebix has a call right during the two-year period following September 1, 2015 to purchase an additional 10% membership~~venture's net income and equity, and thereby reflecting Ebix's net resulting 51% interest in the EbixHealth JV ~~for~~profits or losses. Furthermore, as a ~~cash amount equal to the then trailing twelve months of revenue of the EbixHealth JV. Furthermore~~related party, IHC also has been and continues to be a customer of Ebix, and during the nine months ending September 30, ~~2015~~2016 the Company recognized ~~$445 thousand~~$1.4 million of revenue from IHC, and as of September 30, ~~2015~~2016 IHC had ~~$318~~$752 thousand of accounts ~~receivables~~receivable with Ebix.

Note 9: Capitalized Software Development Costs

In ~~addition, Ebix will be rendering services to~~accordance with the ~~EbixHealth JV as~~relevant FASB accounting literature, the Company had previously capitalized certain software and product related development costs associated with both its continuing medical education service offerings, and the development of a ~~customer.~~property and casualty underwriting insurance data exchange platform. During the nine months ~~ending~~ended September 30, ~~2015~~2016, the Company ~~did not recognize any revenue from~~capitalized $1.0 million of such development costs. As of September 30, 2016, a total of $3.2 million of remaining unamortized development costs are reported on the ~~EbixHealth JV. Ebix~~Company’s consolidated balance sheet. During the nine months ended September 30, 2016, the Company recognized $1.0 million of amortization expense with regards to these capitalized software development costs, which is ~~accounting~~included in costs of services provided in the Company’s consolidated income statement. The useful life over which these capitalized software development costs are being amortized is eighteen months for the ~~investment in~~continuing medical education products, and six years for the ~~EbixHealth JV using the equity method whereby 40% of the EbixHealth JV periodic profits or losses will be recognized in Ebix's financial statements, after December 16, 2016.~~property and casualty underwriting insurance data exchange platform.

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Note 10: Other ~~Liabilities~~Current Assets

Other ~~liabilities~~current assets at September 30, ~~2015~~2016 and December 31, ~~2014~~2015 consisted of the following:

September 30, 2015 December 31, 2014
(In thousands)
Reserve for potential uncertain income tax return positions $ 3,128
$ 3,020
Unfavorable lease liability, long term portion 224
294
Portion of an unrecognized tax benefit netted against deferred tax asset for a net operating loss carryforward $ (1,195 ) $ (1,135 )
Total $ 2,157
$ 2,179



	September 30, 2016		December 31, 2015
	(In thousands)
Prepaid expenses	$	10,718	$	8,290
Sales taxes receivable from customers	30		120
Due from prior owners of acquired businesses for working capital settlements	945		1,021
Research and development tax credits receivable	383		898
Tax refunds receivable	347		—
Other	409		613
Total	$	12,832	$	10,942

Note 11: Subsequent Events

~~Repurchases of Common Stock~~

Since June 30, 2015 and through September 30, 2015 the Company repurchased 1,169,458 shares of its outstanding common stock for aggregate cash consideration in the amount of $34.3 million and at an average rate of $29.34 per share. Subsequent to September 30th and through November 7, 2015 the Company has re-purchased an additional 20,000 shares of its outstanding common stock for aggregate cash consideration in the amount of $500 thousand and at an average rate of $24.98 per share. All share repurchases were done in accordance with Rule 10b-18 of the Securities Act of 1934 as to the timing, pricing, and volume of such transactions, and were funded from available cash resources, cash generated from the Company's operating activities, and draws from the Company's revolving line of credit with our syndicated commercial banking facility.None.

~~Expansion of Credit Facility~~

Effective October 14, 2015 the Company, in coordination with Regions Financial Corporation ("Regions") as administrative agent and a joint lender, exercised the $50 million accordion feature in the existing Regions Secured Syndicated Credit Facility thereby expanding the total credit facility to $240 million. As part of this credit facility expansion, TD Bank, NA ("TD") was added to the syndication group along with five other bank participants, which include Regions, MUFG Union Bank N.A., Fifth Third Bank, and Silicon Valley Bank as joint lenders. TD commitment level is $25 million. As of November 8, 2015, the outstanding balance on the credit facility was $186.5 million. The expanded credit facility will continue to be used to fund the Company's future growth and share repurchase initiatives.

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Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used herein, the terms “Ebix,” “the Company,” “we,” “our” and “us” refer to Ebix, Inc., a Delaware corporation, and its consolidated subsidiaries as a combined entity, except where it is clear that the terms mean only Ebix, Inc.

Safe Harbor for Forward-Looking Statements—This Form 10-Q and certain information incorporated herein by reference contains forward-looking statements and information within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. This information includes assumptions made by, and information currently available to management, including statements regarding future economic performance and financial condition, liquidity and capital resources, acceptance of the Company’s products by the market, and management’s plans and objectives. In addition, certain statements included in this and our future filings with the Securities and Exchange Commission (“SEC”), in press releases, and in oral and written statements made by us or with our approval, which are not statements of historical fact, are forward-looking statements. Words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “seeks,” “plan,” “project,” “continue,” “predict,” “will,” and other words or expressions of similar meaning are intended by the Company to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are found at various places throughout this report and in the documents incorporated herein by reference. These statements are based on our current expectations about future events or results and information that is currently available to us, involve assumptions, risks, and uncertainties, and speak only as of the date on which such statements are made.

Our actual results may differ materially from those expressed or implied in these forward-looking statements. Factors that may cause such a difference include, but are not limited to, those discussed in Part I, Item 1A, “Risk Factors” in our Form 10-K for the year ended December 31, 2015 which is incorporated by reference herein and identified, and in Part II, Item 1A "Risk Factors" for the ~~nine~~three months ended September 30, ~~2015~~2016 in this Form 10-Q, ~~and in Part I, Item 1A, “Risk Factors” in our 2014 Form 10-K which is incorporated by reference herein,~~ as well as: ~~the risk of an unfavorable outcome of the pending governmental investigations, and the reputational harm caused by such investigations and lawsuits;~~ the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties; pricing and other competitive pressures and the Company’s ability to gain or maintain share of sales as a result of actions by competitors and others; changes in estimates in critical accounting judgments; changes in or failure to comply with laws and regulations, including accounting standards, taxation requirements (including tax rate changes, new tax laws and revised tax interpretations) in domestic or foreign jurisdictions; exchange rate fluctuations and other risks associated with investments and operations in foreign countries (particularly in Australia, Asia, Latin America, and Europe wherein we have significant and/or growing operations); fluctuations in the equity markets, including market disruptions and significant interest rate fluctuations, which may impede our access to, or increase the cost of, external financing; and international conflict, including terrorist acts. The Company undertakes no obligation to update any such factors, or to publicly announce the results of, or changes to any of the forward-looking statements contained herein to reflect future events, developments, changed circumstances, or for any other reason.

Other important factors that could cause actual results to differ materially from those in our specific forward-looking statements included in this Form 10-Q include, but are not limited to, the following:

~~Regarding~~ Our ability to efficiently and effectively integrate acquired business operations, as discussed in Note 3 of the Condensed Notes to the Condensed Consolidated Financial Statements pertaining to the business acquisitions we have made;

Note 4 of the Notes to the Condensed Consolidated Financial Statements, "Debt with Commercial Bank" and our future liquidity needs discussed under “Liquidity and Financial Condition” ~~as pertaining to~~regarding our ability to generate cash from operating activities and any declines in our credit ratings or financial condition which could restrict our access to the capital markets or materially increase our financing costs;

~~With respect to~~

��

Note 5 of the Notes to the Condensed Consolidated Financial Statements, “Commitments and Contingencies”, and “Contractual Obligations and Commercial Commitments” in Managements Discussion and Contingencies”, and “Contractual Obligations and Commercial Commitments” in MD&A, as regarding to changes in the market value of our assets or the ultimate actual cost of our contractual commitments and contingencies;

With respect to Note 3 of the Condensed Notes to the Condensed Consolidated Financial Statements as pertaining to the business acquisitions we have made and our ability to efficiently and effectively integrate acquired business operations;

~~With respect this Management Discussion &~~ Analysis of Financial Condition and Results of Operation ("MD&A") regarding uncertainties pertaining to the actual ultimate cost of our legal contingencies;

MD&A and the analysis of the three and nine month revenue trends ~~including the~~regarding actual realized level of demand for our products during the immediately foreseeable ~~future.~~

future, and fluctuations thereof.

Readers should carefully review the disclosures and the risk factors described in this and other documents we file from time to time with the SEC, including future reports on Forms 10-Q and 8-K, and any amendments thereto. You may obtain our SEC filings at our website, www.ebix.com under the “Investor Information” section, or over the Internet at the SEC’s website, www.sec.gov.

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The following information should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part 1, Item 1 of this Quarterly Report, and the audited consolidated financial statements and notes thereto and ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~MD&A contained in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2014~~2015.

Company Overview

Ebix, Inc. is a ~~leading international~~global supplier of software and e-commerce solutions to the insurance, financial, and healthcare ~~industries.~~industries, as well as e-governance solutions to governmental agencies in the health and education sectors. Ebix provides a variety of application software products for the insurance industry ~~ranging from~~including carrier systems, broker systems, agency systems and data exchanges to custom software development for all entities involved in insurance and financial services. Our goal is to be the leading provider of back-end insurance transaction processing in the world. The Company’s vision is to focus on the convergence of technology platforms for all insurance channels, processes and entities in a manner such that data seamlessly flows once a data entry has been made. Our customers include many of the top insurance sector companies in the world.

The insurance industry continues to undergo significant consolidation driven by the need for, and benefits from, economies of scale and scope in providing insurance services in a competitive environment. Such consolidation has involved both insurance carriers and insurance brokers and is directly impacting the manner in which insurance products are distributed. ~~Furthermore~~In particular the insurance industry has ~~particularly experienced a steady~~continued to experience an increase in initiatives designed to reduce paper-based processes and to improve efficiency both at the back-end and ~~consumer end~~consumer-end sides. Management believes the insurance industry will continue to experience significant change and increased efficiencies through online ~~exchanges, as the transition from paper-based processes are increasingly becoming the norm across world insurance markets.~~exchanges. Changes in the insurance industry are ~~likely~~expected to create new opportunities for the Company.

Ebix strives to work collaboratively with clients to develop innovative technology strategies and solutions that address specific business challenges. Ebix combines the newest technologies with its capabilities in consulting, systems design and integration, IT and business process outsourcing, applications software, and Web and application hosting to meet the individual needs of insurance providers and related entities. We intend to continue to expand both organically and through strategic business acquisitions.

Offices and Geographic Information

The Company has its worldwide headquarters in Johns Creek, Georgia with its international operations being managed from its Singapore offices, and it also has domestic operations in Santa Barbara, Pasadena and Hemet, California; Miami, Florida; Pittsburgh, Pennsylvania; Salt Lake City, Utah; Grove City, Ohio; Bohemia, New York; Norwalk and New Britain, Connecticut; Portland, Michigan; Birmingham, Alabama; Iselin, New Jersey as well as an additional operations office in Johns Creek, Georgia. The Company also has multiple operating facilities and offices in Australia, Brazil, Thailand, New Zealand, the United Kingdom, Canada, Singapore, Dubai, and India. In these operating offices, Ebix employs insurance and technology professionals who provide products, services, support and consultancy to thousands of customers across six continents.

Results of Operations — Three Months Ended September 30, ~~2015~~2016 and ~~2014~~2015

Operating Revenue

The Company derives its revenues primarily from subscription and transaction fees pertaining to services delivered over our exchanges or from our ASP platforms, fees for business process outsourcing services, and fees for software development projects including associated fees for consulting, implementation, training, and project management provided to customers with installed systems. International revenue accounted for ~~22.7%~~27.2% and ~~32.8%~~20.9% of the Company’s total revenue for the ~~nine~~three months ended September 30, ~~2015~~2016 and ~~2014~~,2015, respectively.

Ebix’s revenue streams come from four ~~product~~product/service channels. Presented in the table below is the breakout of our revenues for each of those ~~product~~product/service channels for the three and nine month periods ended September 30, ~~2015~~2016 and ~~2014~~.2015.

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	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
(dollar amounts in thousands)	2015		2014		2015		2014		2016		2015		2016		2015
Exchanges	$	46,209	$	41,757	$	139,712	$	125,212	$	52,016	$	46,209	$	151,424	$	139,712
Broker Systems	3,812		4,511		11,067		13,862		3,557		3,812		10,654		11,067
Risk Compliance Solutions (“RCS”)	15,754		3,346		41,218		10,423		18,076		15,754		53,489		41,218
Carrier Systems	1,038		1,194		3,281		4,191		959		1,038		2,681		3,281
Totals	$	66,813	$	50,808	$	195,278	$	153,688	$	74,608	$	66,813	$	218,248	$	195,278

During the three months ended September 30, ~~2015~~2016 our total operating revenues increased ~~$16.0~~$7.8 million or ~~32%~~12%, to ~~$66.8~~$74.6 million as compared to ~~$50.8~~$66.8 million during the third quarter of ~~2014.~~2015. Revenues increased as a result of continued revenue growth from Life, Annuity, and Underwriting, products and services, in addition to revenue growth generated from the Company's 2014 acquisitions of HealthCare Magic, Vertex, i3, and Oakstone, and the 2015 acquisition of PB Systems, partially offset by the drop in revenue from international locationsprimarily due to the ~~ongoing weakening~~signing and initiation of new customer contracts in the exchange and RCS channel areas; most notably the PPL insurance underwriting exchange platform contract in London and the e-governance contracts in India. Also generating the comparative year over year revenue increase are the revenues from each of the EbixHealth JV and Ebix Vayam Limited JV which Ebix acquired a 51% controlling equity position (refer to Note 8 accompanying the enclosed condensed consolidated financial statements for discussion of the EbixHealth JV). Partially offsetting these revenue increases was the adverse effect of the weakened foreign currencies in ~~comparison~~which we conduct operations (particularly in Australia, Brazil, Great Britain, and India) as compared to the ~~strengthening of the~~ U.S. ~~dollar, and a continued reduction in revenues from the Company’s Health and Pharmaceutical information content services. In particular~~dollar. Specifically, the adverse impact from fluctuations in the exchange rates for the foreign currencies in the countries in which we conduct operations in the aggregate reduced reported revenues for the ~~3rd~~third quarter ~~2015~~2016 by ~~$3.4 million.~~$348 thousand.

With respect to business acquisitions completed during the years ~~2015~~2016 and ~~2014~~2015 on a pro forma basis, as disclosed in the table in Note 3 ~~“Pro Forma Financial Information”~~"Business Combinations" pertaining to pro forma financial information to the enclosed Condensed Consolidated Financial Statements, combined revenues ~~decreased $2.8~~increased $4.8 million or ~~4.1%~~6.8% for Q3 ~~2015~~2016 versus the Q3 ~~2014~~2015 whereas correspondingly, the reported revenue for the three months ended September 30, ~~2015~~2016 increased by ~~$16.0~~$7.8 million or ~~31.5%~~11.7% from the reported revenue during the same period in ~~2014.~~2015. The ~~2015~~2016 and ~~2014~~2015 pro forma financial information assumes that all business acquisitions made during this period were made on January 1, ~~2014,~~2015, whereas the Company's reported financial statements for Q3 ~~2015~~2016 and Q3 ~~2014~~2015 only includes the revenues from these businesses since the effective date that they were acquired by Ebix, being ~~January 2014 for CurePet, May 2014 for HealthCare Magic, October 2014 for Vertex, December 2014 for Oakstone and i3,~~ March 2015 for Via Media Health, ~~and~~ June 2015 for PB ~~Systems.~~Systems, and July 2016 for the EbixHealth JV. The ~~2014~~2015 pro forma financial information includes a full three months of results for ~~CurePet~~Via Media Health, PB Systems, and ~~HealthCare Magic~~the EbixHealth JV as if they had been acquired or consolidated on January 1, ~~2014.~~2015.

The above referenced pro forma information and the relative comparative change in pro forma and reported revenues are based on the following premises:

~~2015~~2016 and ~~2014~~2015 pro forma revenue contains actual revenue of the acquired entities before acquisition date, as reported by the sellers, as well as actual revenue of the acquired entities after ~~acquisition. Whereas~~acquisition, whereas the reported growth in revenues of the acquired entities after acquisition date are only reflected for the period after their acquisition.

Revenue billed to existing clients from the cross selling of acquired products has been assigned to the acquired section of our business.

Any existing products sold to new customers obtained through a newly acquired customer base, are assigned to the acquired section of our business.

Pro formas do not include post acquisition revenue reductions as a result of discontinuation of any product lines and/or customer projects by Ebix in ~~its bid~~line with the Company initiatives to maximize profitability.

Cost of Services Provided

Costs of services provided, which ~~include~~includes costs associated with maintenance, customer support, call center, consulting, implementation and training services, increased ~~$7.5~~$4.6 million or ~~73%~~26%, to $22.4 million in the third quarter of 2016 as compared to $17.8 million in the third quarter of ~~2015 as compared to $10.3 million in the third quarter of 2014.~~2015. This increase is primarily due to ~~greater personnel, facility, and external consulting~~ costs associated with fully consolidating the ~~Q4'2014 acquisitions~~EbixHealth JV and Ebix Vayam Limited JV, and increased costs associated with supporting the increased revenue streams from new e-governance service contracts executed within the Ebix Vayam Limited JV, partially offset by $989 thousand of ~~Oakstone, i3, and Vertex, and our Q2 2015 acquisition of PB Systems.~~reductions in Ebix's pre-existing core internal personnel costs.

Product Development Expenses

The Company’s product development efforts are focused on the development of new processing technologies, software, systems and related services for use by healthcare ~~professions,~~professionals, consumers, insurance carriers, brokers and agents, and the development of new data exchanges for use in the domestic and international insurance markets. Product development expenses

increased ~~$1.6~~$0.2 million or ~~23%~~3%, to $8.6 million during the third quarter of 2016 as compared to $8.3 million during the third quarter of ~~2015 as compared to $6.8 million during the third quarter~~

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~~of 2014.~~2015. This increase is attributable to additional personnel costs for our growing employee base in our continually expanding product development facilities in India.

Sales and Marketing Expenses

Sales and marketing expenses increased ~~$246~~$658 thousand or 7%17%, to $4.46 million in the third quarter of 2016 as compared to $3.81 million in the third quarter of ~~2015 as compared to $3.56 million in the third quarter of 2014.~~2015. This increase is due to additional ~~postage, marketing~~ direct mail ~~and advertising costs.~~marketing costs in support of our continuing medical education services.

General and Administrative Expenses

~~General~~Reported general and administrative expenses ~~increased by $6.1 million or 102%, to~~remained flat at $12.13 million infor the third quarter of ~~2015 as compared~~2016 quarter and 2015. Personnel and related expenses were up $735 thousand, audit and legal expenses were up $465 thousand, and facilities expenses were up $350 thousand, with these comparative cost increases being offset by a $1.4 million comparative reduction to ~~$6.01~~accounts receivable bad debt expense (being $243 thousand in Q3 2016 versus $1.6 million in ~~the third quarter of 2014. This comparative year over year net increase in general~~Q3 2015), and ~~administrative expenses is primarily associated with the~~a $1.2 million reduction into contingent earn out liabilities ~~in connection with prior business acquisitions. In particular~~resulting from the ~~earn out for~~remeasurements of and adjustments to the Company's October 2014 acquisition of Vertex was reduced by $960 thousand and the earn out for the Company's May 2014 acquisition of HealthCare Magic was reduced by $573 thousand both in the 3rd quarter of 2015, whereas in Q3 of 2014 such contingent earn out liabilities associated with the acquisitions of Via Media (March 2015), and PB Systems (June 2015) for which the liabilities were reduced by ~~$5.8 million primarily in connection with the Company's April 2013 acquisition of Qatarlyst.~~$889 thousand and $326 thousand respectively

Amortization and Depreciation Expenses

Amortization and depreciation expenses ~~increased $316 thousand~~decreased $27 thousand or ~~13%~~1% to $2.74 million in the third quarter of 2016 as compared to $2.77 million in the third quarter of 2015, ~~as compared~~due primarily to ~~$2.45 million~~lower amortization costs associated with certain fully amortized intangible assets previously acquired in ~~the third quarter of 2014, due to additional depreciation expense being recognized for newly acquired capital equipment and~~connection with ~~respect to build out additions for our new corporate headquarters office facilities.~~purchased businesses.

Interest Income

Interest income ~~remained essentially flat at~~increased $573 thousand or 924% to $635 thousand in the third quarter of 2016 as compared to $62 thousand in the third quarter of 2015, ~~as compared~~due to ~~$61 thousand~~a 196% increase in ~~the third quarter~~average cash balances held during Q3 of ~~2014.~~2016 versus Q3 of 2015 which increased to $88.9 million from $30.0 million.

Interest Expense

Interest expense increased ~~$666~~$864 thousand or ~~170%~~82%, to $1.9 million in the third quarter of 2016 as compared to $1.1 million in the third quarter of ~~2015 as compared to $392 thousand in the third quarter of 2014.~~2015. Interest expense increased due to the increase in the average outstanding balance on our commercial banking credit facilities, which increased ~~429%~~46% to ~~$167.8~~$244.5 million during Q3 ~~2015~~2016 from ~~$31.8~~$167.9 million during Q3 ~~2014.~~of 2015, as well as an increase in the underlying interest rate which increased to 2.81% for 2016 versus 2.00% for 2015.

Foreign Currency Exchange ~~Gain~~Loss

Net foreign currency exchange gains for the three months ended September 30, ~~2015~~2016 in the amount of ~~$1.1 million~~$578 thousand consists of ~~$51~~$551 thousand of ~~losses realized~~gains incurred upon the settlement of ~~transactions~~receivables or payables denominated in currencies other than the functional currency of the respective operating division ~~recognizing~~recording the ~~transaction,~~instrument, and ~~$1.2 million~~$27 thousand of unrealized gains ~~recognized upon~~pertaining to the remeasurement of ~~certain~~ outstanding receivables or payables denominated in currencies other than the functional currency of the respective operating division recording the instrument.

Non-Operating Income

The non-operating income for the three month ended September 30, 2016 in the amount of $1.2 million is due to the recognition of a gain on the Company's previously carried 40% equity interest in the EbixHealth JV, for which a new contemporaneous valuation of the business was completed in conjunction with Ebix purchasing and additional equity stake in the joint venture providing the Company a 51% controlling interest in the joint venture during the third quarter (refer to Note 8 to the accompanying Condensed Consolidated Financial Statements).

Income Taxes

The Company recorded an income tax expense of $789 thousand (3.2%) and $1.1 million (1.6%) during the three and nine months ended September 30, 2016, respectively, which included discrete items for additions to the reserve for uncertain tax positions and prior year true-ups ups that resulted in a net tax expense charge that was more than offset by a tax benefit from transferring certain intellectual property intangible assets in Q2. The income tax expense exclusive of discrete items for the three

months ended September 30, 2016 and 2015, respectively, is $139 thousand (0.0%) and $1.7 million (7.5%). Our tax expense and effective tax rate decreased year over year, exclusive of discrete charges, due to favorable changes in the proportion of our taxable income in certain foreign jurisdictions relative to total pre-tax income. The Company expects its full year tax rate before discrete items to be approximately 6%.

The Company’s effective tax rate reflects the benefits of having significant operations outside the United States, which are generally taxed at rates lower than the US statutory rate of 35% and where the Company enjoys a tax holiday in India. ~~The~~During 2015, the Company ~~also recently~~ secured an additional tax holiday in India until the year 2020 to support certain portions of its expanding operations there. ~~Prior to this quarter, the~~The Company also had ~~a concessionary tax rate in Singapore of 10%, however,~~income during the quarter the Company decided to forego further negotiations to retain these concessions and as such our tax rate in Singapore has reverted back to the statutory enacted tax rate of 17% effective January 1, 2015.

~~The Company recorded income tax expense of $1.88 million (8.49%) during the three months~~ ended September 30, ~~2015, which included discrete items for prior year true-ups~~2016 in Singapore, the United Kingdom, Dubai, and ~~currency fluctuations that resulted in a net charge~~Sweden, where the statutory tax rates are lower than the US rate of $230 thousand. The Company recorded income tax expense of $4.01 million (18.21%) during the three months and nine months ended September 30, 2014, which included discrete charges for the increase in the Company’s reserve for uncertain tax positions, netted with a benefit for prior year true-ups. Our tax expense and effective tax rate decreased year over year, exclusive of discrete charges, due to favorable changes in the proportion of our taxable income in certain foreign jurisdictions relative to total pre-tax income.35%.

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Results of Operations — Nine Months Ended September 30, ~~2015~~2016 and ~~2014~~2015

Operating Revenue

During the nine months ended September 30, ~~2015~~2016 our total operating revenues increased ~~$41.6~~$23.0 million or ~~27%~~12%, to ~~$195.3~~$218.2 million as compared to ~~$153.7~~$195.3 million during the same period ~~of 2014.~~in 2015. Revenues increased ~~as a result~~primarily due to the signing and initiation of new customer contracts in the exchange and RCS channel areas; most notably the PPL insurance underwriting exchange platform contract in London and the e-governance contracts in India. Also generating the comparative year over year revenue ~~growth from Life, Annuity, Underwriting, and CRM products and services, in addition to revenue growth generated~~increase are the revenues from the ~~Company's 2014 acquisitions~~EbixHealth JV and Ebix Vayam Limited JV for which Ebix acquired a 51% controlling equity position (refer to Note 8 accompanying the enclosed condensed consolidated financial statements for further discussion of ~~HealthCare Magic, Vertex, i3,~~the EbixHealth JV), and ~~Oakstone and~~comparative incremental revenue from the June 2015 acquisition of PB Systems ~~partially offset~~(2015 YTD results only have 4 months of said revenue). Reported revenues were adversely effected by the ~~drop in revenue from international locations due to~~weakened of the ~~ongoing weakening in~~ foreign currencies in ~~comparison~~which we conduct operations (particularly in Australia, Brazil, Great Britain, and India) as compared to ~~the strengthening of~~ the U.S. dollar. ~~In particular~~Specifically, the adverse impact from fluctuations in the exchange rates for the foreign currencies in the countries in which we conduct operations in the aggregate reduced reported revenues for the nine months ending September 30, 2016 by $3.3 million. International revenue accounted for 27.8% and 22.7% of the Company’s total revenue for the nine months ended September 30, 2016 and 2015, ~~by $8.0 million.~~respectively.

With respect to business acquisitions completed during the years ~~2015~~2016 and ~~2014~~2015 on a pro forma basis, as disclosed in the table in Note 3 ~~“Pro Forma Financial Information”~~“Business Combinations" pertaining to pro forma financial information to the enclosed Condensed Consolidated Financial Statements, combined revenues ~~decreased by $7.6~~increased $13.5 million or ~~3.6% decrease~~6.4% for ~~the~~ nine months ~~ending~~ended September 30, ~~2015~~2016 versus the ~~the~~same nine ~~months ending September 30, 2014~~month period in 2015, whereas correspondingly the reported revenue for the nine ~~months~~month ended September 30, ~~2015~~2016 increased by ~~$41.6~~$23.0 million or ~~27.1%~~11.8% from the reported revenue during the same period in ~~2014.~~2015. The ~~2015~~2016 and ~~2014~~2015 pro forma financial information assumes that all business acquisitions made during this period were made on January 1, ~~2014,~~2015, whereas the Company's reported financial statements for ~~YTD~~the nine months period ended September ~~2015~~30, 2016 and ~~YTD September 2014~~2015 only includes the revenues from these businesses since the effective date that they were acquired or fully consolidated by Ebix, being ~~January 2014 for CurePet, May 2014 for HealthCare Magic, October 2014 for Vertex, December 2014 for Oakstone and i3,~~ March 2015 for Via Media Health, ~~and~~ June 2015 for PB ~~Systems.~~Systems, and July 2016 for the EbixHealth JV. The ~~2014~~2015 pro forma financial information includes a full nine months of results for ~~CurePet~~Via Media Health, PB Systems, and ~~HealthCare Magic~~the EbixHealth JV as if they had been acquired on January 1, ~~2014.~~2015.

The above referenced pro forma information and the relative comparative change in pro forma and reported revenues are based on the following premises:

Revenue billed to existing clients from the cross selling of acquired products has been assigned to the acquired section of our business.

Any existing products sold to new customers obtained through a newly acquired customer base, are assigned to the acquired section of our business.

Cost of Services Provided

Costs of services provided ~~which include costs associated with maintenance, support, call center, consulting, implementation and training services,~~ increased ~~$26.1~~$6.6 million or ~~88%~~12%, to ~~$56.0~~$62.6 million in the the nine months ended September 30, ~~2015~~2016 as compared to ~~$29.9~~$56.0 million induring the same period of ~~2014.~~2015. This increase is primarily due to ~~additional personnel, facility, and external consulting~~ costs associated with fully consolidating the ~~Q4 2014 acquisitions~~EbixHealth JV and Ebix Vayam Limited JV, and increased costs associated with supporting the increased revenue

streams from new e-governance service contracts executed within the Ebix Vayam Limited JV, partially offset by $2.9 million of ~~Oakstone, i3, and Vertex, and the Q2 2015 acquisition of PB Systems.~~reductions in Ebix's pre-existing core internal personnel costs.

Product Development Expenses

~~The Company’s product development efforts are focused on the development of new processing technologies, software, systems and related services.~~ Product development expenses increased ~~$2.4~~$2.2 million or ~~12%~~10%, to ~~$22.7~~$24.9 million ~~during~~for the nine months ended September 30, ~~2015~~2016 as compared to ~~$20.2~~$22.7 million during the same period of ~~2014.~~2015. This increase is ~~primarily due~~attributable to additional personnel costs for our continued growing employee base infor our expanded product development facilities in India.

Sales and Marketing Expenses

Sales and marketing expenses increased ~~slightly by $151 thousand~~$2.2 million or 1%20%, to ~~$10.8~~$13.0 million ~~during~~in the the nine months ended September 30, ~~2015~~2016 as compared to ~~$10.6~~$10.8 million during the same period of ~~2014.~~2015. This increase is due to additional ~~postage, marketing~~ direct mail ~~and advertising costs. The net increase~~marketing costs in ~~sales and marketing expenses is associated with additional postage/ marketing direct mail, advertising costs, and trade show costs.~~

~~Table~~support of ~~Contents~~our continuing medical education services offerings.

General and Administrative Expenses

General and administrative expenses increased by ~~$8.1~~$2.0 million or ~~30%~~6%, to ~~$35.0~~$37.0 million ~~during~~in the the nine months ended September 30, ~~2015~~2016 as compared to ~~$26.9~~$35.0 million during the same period of ~~2014.~~2015. This comparative year over year ~~net increase~~rise in general and administrative expenses is ~~primarily associated with~~due to $3.2 million of increased personnel related costs (principally salaries, share-based compensation, payroll taxes and insurance benefits), and $384 thousand of increased legal, audit, and investor relational professional costs. These cost increases were partially offset by a $1.3 million comparative reduction to accounts receivable bad debt expense (being only $700 thousand for the nine months ended September 30, 2016 versus $2.0 million for the same nine month period in 2015). Also, favorably impacting reported general and administrative expenses was a net $1.8 million reduction into contingent earn out liabilities ~~in connection with prior business acquisitions. In particular~~resulting from the remeasurements of and adjustments to the contingent earn out liabilities associated with the acquisitions of Vertex (October 2014),Via Media (March 2015), and PB Systems (June 2015) for which the liabilities were reduced by $720 thousand, $1.5 million, and $326 thousand respectively and Qatarlyst (April 2013) for which the liability was increased by $780 thousand. $326 thousand of the PB Systems earn out liability reduction was recorded as a reduction to general and administrative expenses, and $664 thousand recorded as a reduction to goodwill based on the facts that were available at the time the business acquisition was consummated. The terms for the ~~Company's October 2014 acquisition of Vertex was reduced by $960 thousand and the~~contingent earn out payments in most of the Company's business acquisitions typically address the GAAP recognizable revenues achieved by the acquired entity over a one, two, and/or three year period subsequent to the effective date of their acquisition by Ebix. These terms typically establish a minimum threshold revenue target with achievement of revenues recognized over that target being awarded in the form of a specified earn out payment. The Company applies these terms in its calculation and determination of the fair value of contingent earn out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the ~~Company's May 2014 acquisition of HealthCare Magic was reduced by $573 thousand both in the 3rd quarter of 2015, whereas during~~corresponding acquired assets and liabilities. During the nine months ~~ending~~ended September 30, ~~2014 all such~~2016 the cited contingent earn out liabilities were ~~reduced~~adjusted because of changes to anticipated future revenues from these acquired businesses. The cause for the Vertex,Via Media, and PB Systems contingent liability reductions were due to the fact that the acquired businesses earn out revenue targets were based on revenue run rates at the time of the acquisitions, their growth trajectories, and their client contracts in hand at the ~~aggregate~~time the businesses were acquired, while in recent times their revenues have been impacted downwards by ~~$7.5 million primarily~~certain unforeseen changes in ~~connection with~~terms of the ~~Company's June 2012 acquisition~~pace of ~~PlanetSoft,~~project implementation and resource budget allocation by some of their key clients. The cause for the ~~August 2012 acquisition~~Qatarlyst contingent liability increase is due to Q1 2016 signing of ~~TriSystems,~~the PPL insurance underwriting exchange platform contract in London, and the ~~April 2013 acquisition of Qatarlyst.~~assured revenue stream to be forthcoming from this arrangement.

Amortization and Depreciation Expenses

Amortization and depreciation expenses increased ~~$490~~$156 thousand or 7%2% to ~~$7.9~~$8.1 million ~~during~~in the nine months ended September 30, ~~2015~~2016 as compared to ~~$7.4~~$7.9 million during the same period of ~~2014,~~2015, due to additional depreciation expense ~~being recognized for newly acquired capital equipment and~~in connection with ~~respect to~~the build out ~~additions~~and purchase of equipment for our new corporate headquarters office ~~facilities.~~and campus facilities in Johns Creek, Georgia, and our expanding product development facilities in India.

Interest Income

Interest income ~~decreased $159 thousand or 49%,~~increased 630% to ~~$167 thousand during~~$1.2 million in the nine months ended September 30, ~~2015~~2016 as compared to ~~$326~~$167 thousand during the same period of ~~2014. Interest income decreased as~~2015, due to a ~~result of the year over year decrease~~118% increase in average ~~interest bearing~~ cash balances ~~which decreased 18% to $42.8 million~~held during nine months ending September 30, 2016 versus for the same nine month period in 2015 which increased to $76.0 million from ~~$52.1 million during nine months ending September 30, 2014.~~$34.8 million.

Interest Expense

Interest expense increased ~~$1.55~~$3.0 million or ~~183%,~~124% to ~~$2.4~~$5.4 million ~~during~~in the nine months ended September 30, ~~2015~~2016 as compared to ~~$850 thousand~~$2.4 million during the same period of ~~2014.~~2015. Interest expense increased due to the increase in the average outstanding balance

on our commercial banking credit facilities, which increased ~~515%~~57% to $227.3 million during nine months ending September 30, 2016 from $145.1 million ~~during this~~for the same nine month period ofin 2015, ~~from $23.6 million during~~as well as an increase in the ~~comparative nine month period of 2014.~~underlying interest rate which increased to 2.81% for 2016 versus 2.00% for 2015.

Foreign Currency Exchange Gain

Net foreign currency exchange gains for the nine months ended September 30, ~~2015 was $2.4 million and~~2016 in the amount of $852 thousand of gains consists of ~~$420~~$682 thousand of gains realized upon the settlement of ~~transactions~~receivables or payables denominated in currencies other than the functional currency of the respective operating division ~~recognizing~~recording the ~~transaction,~~instrument, and ~~$1.9 million~~$171 thousand of unrealized gains ~~recognized upon~~pertaining to the remeasurement of ~~certain~~ outstanding receivables or payables denominated in currencies other than the functional currency of the respective operating division recording the instrument.

Income Taxes

The Company recorded an income tax expense of $1.1 million (1.6%) and $5.4 million (8.6%) during the nine months ended September 30, 2016 and 2015, respectively, which included discrete items for additions to the reserve for uncertain tax positions and prior year true-ups ups that resulted in a net tax expense charge that was more than offset by a tax benefit from transferring certain intellectual property intangible assets in Q2. The income tax expense exclusive of discrete items for the nine months ended September 30, 2016 and 2015, respectively, is $2.8 million (4.0%) and of $5.2 million (8.2%). Our tax expense and effective tax rate decreased year over year, exclusive of discrete charges, due to favorable changes in the proportion of our taxable income in certain foreign jurisdictions relative to total pre-tax income. The Company expects its full year tax rate before discrete items to be approximately 6%.

~~The Company recorded income tax expense of $5.41 million (8.59%) during the nine months~~ ended September 30, ~~2015, which included discrete items for prior year true-ups~~2016 in Singapore, the United Kingdom, Dubai, and ~~currency fluctuations that resulted in a net charge~~Sweden, where the statutory tax rates are lower than the US rate of $0.23 million. The Company recorded income tax expense of $11.55 million (19.72%) during the nine months ended September 30, 2014, which included discrete charges for the increase in the Company’s reserve for uncertain tax positions of $9.34 million, netted with a benefit for prior year true-ups of $2.91 million. Our tax expense and effective tax rate decreased year over year, exclusive of discrete charges, due to favorable changes in the proportion of our taxable income in certain foreign jurisdictions relative to total pre-tax income.35%.

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Liquidity and Capital Resources

The Company's ability to generate significant cash flows from ongoing operating activities is one of ~~our~~it's fundamental financial strengths. Our principal sources of liquidity are the cash flows provided by the Company's operating activities, ~~our~~the Company's commercial banking credit facility, and cash and cash equivalents on hand. Due to the effect of temporary or timing differences resulting from the differing treatment of items for tax and accounting purposes (including the treatment of net operating loss carryforwards and minimum alternative tax obligations in the U.S. and ~~India, respectively)~~Great Britain, and India), future cash outlays for income taxes are expected to exceed income tax expense. We intend to utilize cash flows generated by our operations, in combination with our commercial bank credit facility, and the possible issuance of additional equity or debt securities, to fund capital expenditures and organic growth initiatives, to make strategic and accretive business acquisitions in the insurance services sector, and to re-purchase shares of our common stock as market conditions warrant.

We believe that anticipated cash flows provided by our operating activities, together with current cash and cash equivalent balances, access to our credit facilities, and access to the capital markets, if required and available, will be sufficient to meet our projected cash requirements for the foreseeable future, although any projections of future cash needs, cash flows, and the condition of the capital markets in general, as to the availability of debt and equity financing, are subject to substantial uncertainty.

Our cash and cash equivalents were ~~$33.2~~$99.8 million and ~~$52.3~~$57.2 million at September 30, ~~2015~~2016 and December 31, ~~2014,~~2015, respectively. The $8.97 million of restricted cash on the condensed consolidated balance sheet is associated with the EbixHealth JV and pertains to un-remitted insurance premiums and claim funds established for the benefit of various carriers which are held in a fiduciary capacity until disbursed.

The free flow of cash from certain countries where we hold significant cash balances may be subject to repatriation tax effects and other restrictions. Specifically the repatriation of earnings from some of our foreign subsidiaries could result in the application of withholding taxes at that foreign source as well as a tax at the U.S. parent level upon receipt of repatriated amounts. The approximate cash, cash equivalents, and short-term investments balances held in our domestic U.S. operations and each of our foreign subsidiaries as of November ~~6, 2015~~8, 2016 are presented in the table below (figures denominated in thousands):

United States Canada Latin America Australia Singapore New Zealand India Europe Sweden Total
Cash and ST investments $ 15,675
$ 3,013
$ 1,648
$ 4,070
$ 4,837
$ 1,316
$ 10,210
$ 2,289
$ 12
$ 43,070



	United States		Canada		Latin America		Australia		Singapore		New Zealand		India		Europe		Sweden		Total
Cash and ST investments	$	15,101	$	2,496	$	865	$	7,934	$	36,079	$	2,050	$	35,119	$	12,311	$	6	$	111,961

Our current ratio increased ~~moderately~~ to ~~1.88~~2.60 at September 30, ~~2015~~2016 , modestly up from ~~1.49~~2.28 at December 31, ~~2014~~2015 and accordingly our working capital position ~~accordingly has also~~ increased to ~~$43.6~~$114.1 million at September 30, ~~2015~~2016 from ~~$34.1~~$65.6 million at the end of ~~the 2014.~~2015. Our short-term liquidity has improved due to increased cash and cash equivalent balances on hand, increased outstanding trade accounts ~~receivable,~~receivables, and additional prepaid expense assets, partially offset by the ~~reduction~~$12.5 million of short term liability associated with the term loan component of the amended syndicated financing agreement with Regions Bank . The Company's days sales outstanding in accounts ~~payable and accrued liabilities primarily as a result~~receivable ("DSO") was 73 days at September 30, 2016 up 8 days from 65 days at June 30, 2016, due principally to greater aging of the ~~cash~~customer accounts receivable in our Canadian and India subsidiaries, and within the two joint venture operations that Ebix has a controlling position, particularly the Ebix Vayam joint venture in India in which the contracts with the local government agencies have protracted payment of $20.5 million (including interest of $1.6 million) stemming from the settlement and resolution of the Internal Revenue Service's previously disclosed audit of Ebix’s income tax returns for the taxable years 2008 through 2012.terms.

We believe that Ebix's ability to generate sustainable and robust cash flows from operations will enable the Company to continue to fund its current liabilities from current assets including available cash balances for the foreseeable future.

Business Combinations

The Company seeks to execute accretive business acquisitions in combination with organic growth initiatives as part of its comprehensive business growth and expansion strategy. The Company looks to acquire businesses that are complementary to Ebix's existing products and services.

During the nine months ended September 30, 2016, the Company completed one business acquisition as follows:

During the nine months ended September 30, 2016, the Company did not have any business acquisitions.

Effective July 1, 2016 Ebix and IHC jointly executed a Call Notice agreement, whereby Ebix purchased additional common units in the EbixHealth JV from IHC constituting eleven percent (11%) of the EbixHealth JV for $2.0 million cash which resulted in Ebix holding an aggregate fifty-one percent (51%) controlling equity interest in the EbixHealth JV. Commensurate with additional equity stake in the joint venture a contemporaneous valuation of the business was completed. In accordance with the technical accounting guidance pertaining to step acquisitions the Company recorded goodwill in the amount of $21.8 million, a non-controlling interest in the amount of $11.2 million, and recognized a $1.16 million gain on its previously carried 40% equity interest in the EbixHealth JV. This recognized gain is reflected as a component of other non-operating income in the accompanying Condensed Consolidated Statement of Income. The valuation of the EbixHealth JV is considered preliminary as the allocation to the identified tangible and intangible assets (e.g. customer lists, trade name, developed technology), and the determination of the residual goodwill has yet to performed, but will be completed in line with the filing of the Company's 2016 annual report on Form 10-K. Previously, effective September 1, 2015 Ebix and Independence Holdings Corporation ("IHC") formed a joint venture named Ebix Health Exchange Holdings, LLC ("EbixHealth JV"). Ebix paid $6.0 million and contributed a license to use certain CurePet software and systems valued by the EbixHealth JV at $2.0 million, for its initial 40% membership interest in the EbixHealth JV.

During the year ended December 31, 2015, the Company completed two business acquisitions, as follows:

The Company acquired PB Systems, Inc. and PB Systems Private Limited (together being "PB Systems"), effective June 1, 2015. PB Systems develops and implements software solutions for insurance clients. Ebix acquired PB Systems for upfront cash consideration in the amount of $12.4 million, plus a possible future one-time contingent earnout payment of up to $8.0 million based on earned revenues and the reported EBITDA margins over the subsequent twenty-four month period following the effective date of the acquisition. The Company has determined that the fair value of the contingent earn out consideration is zero as of September 30, 2016. In the Company's Form 10-Q for the six months ended June 30, 2015, Form 10-Q for the nine months ended September 30, 2015, Form 10-K for the year ended December 31, 2015, and Form 10-Q for the three months ended March 31, 2016 the Company had disclosed that the valuation and purchase price allocation for the PB Systems acquisition iswas preliminary because all of the information necessary to determine the fair value of the acquired customer relationship intangible asset and ~~will be finalized prior~~fair value of the revenue-based earn out contingent liability was still in the process of being evaluated by management and the Company's external valuation firms. This evaluation was completed during the second quarter ended June 30, 2016 and resulted in a $1.8 million reduction to the developed technology intangible asset, a $1.6 million reduction to the customer relationship intangible asset, a $657 thousand reduction to the deferred tax liability, a $4.4 million reduction to the revenue-based earn out contingent liability, and a corresponding and offsetting $1.6 million reduction to goodwill to what was originally recorded in the second

quarter of 2015. Additionally, since December 31, ~~2015.~~2015 this resulted in a $8.2 million reduction to the customer relationship intangible asset, a $3.2 million reduction to the deferred tax liability, a $664 thousand reduction to the revenue-based earn out contingent liability, and a corresponding and offsetting $4.3 million increase to goodwill.

The Company acquired Via Media Health Communications Private Limited ("Via Media Health"), effective March 1, 2015. Via Media Health is one of India’s leading health content and communication companies. Ebix acquired Via Media Health for upfront cash consideration in the amount of $1.0 million, plus a possible future ~~one-time~~one time contingent ~~earnout~~earn out payment of up to $372 thousand based on earned revenues over the subsequent twelve month period following the effective date of the acquisition, and aan additional possible one time future performance bonus of up to $1.0 million depending upon revenue growth realized in the business ~~over the subsequent~~

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twenty-four month period following the effective date of the acquisition. The valuation and purchase price allocation for the Via Media Health acquisition remains preliminary and will be finalized prior to December 31, 2015.

~~During the year ended December 31, 2014 the Company complete the following business acquisitions, as follows:~~

Effective December 2, 2014, Ebix acquired Oakstone Publishing, LLC ("Oakstone") in a membership interest purchase agreement for total net cash consideration in the amount of $23.72 million ($31.37 million less a closing net working capital adjustment of $7.65 million). Oakstone was leading provider of continuing education, certification materials for physicians, dentists and allied healthcare professionals, as well as wellness resources for various organizations. Ebix acquired all of the outstanding membership interests of Oakstone and funded the purchase using a mix of internal cash reserves and the bank credit line available to Ebix. The Company accounted for this acquisition by recording $28.8 million of goodwill, $1.7 million of intangible assets pertaining to customer relationships, $501 thousand of intangible assets pertaining to acquired technology, and a $6.5 million deferred revenue liability. The valuation and purchase price allocation for the Oakstone acquisition remains preliminary and will be finalized prior to December 31, 2015.

On December 1, 2014, Ebix acquired the DCM Group Inc. (d.b.a. i3 Software) ("i3") in an asset purchase agreement for total cash consideration in the amount of $2 million and a possible contingent earnout of up to $4 million based on earned revenues over the subsequent twenty-four month period following the date of the acquisition. i3 was a provider of software services and solutions to the insurance industry. Ebix acquired all of the assets of i3 and funded the purchase using internal cash reserves. The Company accounted for this acquisition by recording $1.6 million of goodwill, $310 thousand of intangible assets pertaining to customer relationships, and $48 thousand of intangible assets pertaining to acquired technology.

OnNovember 3, 2014, Ebix acquired Vertex, Incorporated ("Vertex"), with an effective date of October 1, 2014, in a share purchase agreement for total cash purchase consideration in the amount of $27.25 million and a possible contingent earnout of $2 million based on earned revenues over the subsequent twenty-four month period following the date of the acquisition. Vertex is a specialized software and services firm focused primarily on the life and annuity insurance marketplace since 1991. Ebix acquired all of the outstanding capital stock of Vertex and funded the purchase using a mix of internal cash reserves and the bank credit line available to Ebix. The Company accounted for this acquisition by recording $27.7 million of goodwill, $2.5 million of intangible assets pertaining to customer relationships, and $235 thousand of intangible assets pertaining to acquired technology.

On May 21, 2014, Ebix acquired HealthCare Magic Private Limited ("HealthCare Magic"), a medical advisory service with an online network of approximately fifteen thousand General Physicians and Surgeons spread across fifty specialties including alternative medicine. The Company acquired HealthCare Magic for aggregate cash consideration in the amount of $6.0 million plus a possible future one time contingent earnout payment of up to $12.36 million based on earned revenues over the subsequent twenty-four month period following the effective date of the acquisition. ~~This contingent earnout liability is currently estimated to have a~~The Company has determined that the fair value of ~~$596 thousand. The Company funded~~ the ~~HealthCare Magic acquisition from available cash reserves on hand. The Company accounted for this acquisition by recording $5.6 million~~contingent earn out consideration is zero as of goodwill, $452 thousand of intangible assets pertaining to customer relationships, $100 thousand of intangible assets pertaining to acquired technology, $59 thousand on intangible assets pertaining to trademarks and tradenames, and $226 thousand of intangible assets pertaining to non-compete agreements.September 30, 2016.

A significant component of the purchase price consideration for many of the Company's business acquisitions is a potential subsequent cash earnout based on reaching certain specified future revenue targets. The terms for the contingent earn out payments in most of the Company's business acquisitions typically address the GAAP recognizable revenues achieved by the acquired entity over a one, two, and/or three year period subsequent to the effective date of their acquisition by Ebix. These terms typically establish a minimum threshold revenue target with achievement of revenues recognized over that target being awarded in the form of a specified earn out payment. The Company applies these terms in its calculation and determination of the fair value of contingent earn out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the corresponding acquired assets and liabilities. The Company recognizes these potential obligations as contingent liabilities. These contingent consideration liabilities are recorded at fair value on the acquisition date

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and are re-measured quarterly based on the ~~then assessed~~then-assessed fair value and adjusted if necessary. As of September 30, ~~2015~~,2016, the total of these contingent liabilities was ~~$8.01~~$1.62 million,, of which ~~$6.32 million~~none is reported in long-term liabilities, and ~~$1.69~~$1.62 million was included in current liabilities in the Company's Condensed Consolidated Balance Sheet. As of December 31, ~~2014~~2015 the total of these contingent liabilities was ~~$5.4~~$4.28 million, of which ~~$4.5~~$2.57 million is reported in long-term liabilities, and ~~$887 thousand~~$1.71 million was included in current liabilities in the Company's Condensed Consolidated Balance Sheet. During the first, second, and third quarters of 2016 the cited contingent earn out liabilities were adjusted because of changes to anticipated future revenues from these acquired businesses.

Operating Activities

Net cash provided by our operating activities was $53.1 million for the nine months ended September 30, 2016. The primary components of the cash provided by our operating activities during the nine month period consisted of net income of $69.2 million, net of $(328) thousand of unrealized foreign currency exchange gains, $8.1 million of depreciation and amortization, $133 thousand of net income attributable to a non-controlling interest, $2.1 million of non-cash share-based compensation, $(1.7) million of reductions to acquisition related contingent earn out liabilities, $1.0 million of amortization of capitalized software development costs, and the $(1.2) million gain on carrying value of investment in joint venture. Partially offsetting this net cash inflow was $(24.3) million of working capital requirements primarily due to increased outstanding trade accounts receivable combined with a reduction in accounts payable and accrued operating and payroll expenses. During the nine months ended September 30, 2016 the Company made $14.1 million of tax payments including $8.3 million of minimum alternative tax payments in India, which is a component of net deferred tax assets on the Company's Condensed Consolidated Balance Sheets.

Net cash used by our operating activities was $25.7 million for the nine months ended September 30, 2015. The primary

components of the cash used in operations during ~~the~~that prior year nine month period consisted of net income of $57.6 million, net of $(2.0) million of unrealized foreign currency exchange gains, $7.9 million of depreciation and amortization, $1.2 million of non-cash share-based compensation, and $(1.5) million of non-cash reductions to acquisition earnout contingent liabilities. Partially offsetting this net cash inflow was $(37.6) million of working capital requirements primarily associated with increased outstanding trade accounts receivable and the cash payment of the $20.5 million assessment (including interest of $1.6 million) stemming from the resolution of the Internal Revenue Service's previously disclosed audit of Ebix’s income tax returns for the taxable years 2008 through 2012.

Investing Activities

Net cash ~~provided by our operating~~used for investing activities ~~was $38.4 million for~~during the nine months ended September 30, ~~2014. The primary components of the cash provided by operations during the nine month period consisted of net income of $47.0 million, net of $(0.6)~~2016 was $7.2 million, of ~~net non-cash gains recognized on derivative instruments~~which $2.5 million was used for the expansion of our product development facilities in India, $1.1 million was used for the continued build out of our global corporate headquarters campus in Johns Creek, Georgia, $664 thousand was used to purchase equipment to support certain of our data exchange facilities within our foreign operations, $1.0 million was used for software development costs that were capitalized, $1.1 million was used for the purchase of marketable securities (specifically bank certificates of

deposit), and ~~foreign currency exchange, $7.4 million~~$696 thousand was used to make the 11% additional controlling equity investment in the EbixHealth JV (net of depreciation and amortization, $(7.5) million of non-cash gains associated with the reduction to acquisition related earnout contingent liabilities, $(5.5) million of working capital requirements primarily associated with increased outstanding trade accounts receivable, reduced trade payables, and reduced deferred revenues, and a $(3.9) million payment in satisfaction of the securities litigation settlement obligation, and $1.3 million of non-cash share-based compensation. During the nine months ended September 30, 2014 the Company made $10.8 million of tax payments including $7.5 million of minimum alternative tax payments in India, which is a component of deferred tax assets on the Company's Condensed Consolidated Balance Sheets.cash acquired).

~~Investing Activities~~

Net cash used for investing activities during the nine months ended September 30, 2015 was $32.1 million, of which ~~$11.5~~

$11.5 million was used for the acquisition of P.B. Systems (net of cash acquired), $8.7 million was used for buying additional land adjacent to, and the continued interior build out of our ~~new~~ global corporate headquarters campus in Johns Creek, Georgia, $6.0 million was used for the Company's 40% investment in the IHC joint venture, $1.0 million was used for the acquisition of Via Media Health, and $4.0 million of capital expenditures pertaining to the enhancement of our technology platforms and the purchases of operating equipment to support our expanding operations, and $940 thousand was used for the purchase of marketable ~~securities (specifically bank certificates of deposit).~~securities.

~~Net cash used for investing activities during~~Financing Activities

During the nine months ended September 30, ~~2014~~2016 net cash used by financing activities was ~~$24.6~~$2.5 million which consisted of ~~which $12.5~~$43.8 million used to repurchase 1.12 million shares of our common stock, $7.4 million was used ~~for the acquisition of a building and land for~~to pay quarterly dividends to our ~~new global corporate headquarters in the Atlanta metropolitan area, $5.9~~common stockholders, $3.13 million was used ~~for~~to make the ~~acquisition of Healthcare Magic (net of cash acquired), $2.3 million~~scheduled payments against the existing term loan with Regions, and $600 thousand was used ~~for the payment of an earnout obligation in connection with our 2012 acquisition of Taimma, $3.4~~to service other debt obligations. Almost completely offsetting these cash outflows was $52.6 million of ~~capital expenditures pertaining to~~net cash inflow provided from the ~~enhancement of our technology platforms~~refinancing and borrowing from the ~~purchases of operating equipment to support our expanding operations,~~recently amended and ~~$0.6 million for the purchase of marketable securities (specifically bank certificates of deposit).~~expanded syndicated credit facility with Regions Bank.

~~Financing Activities~~

During the nine months ended September 30, 2015 net cash used by financing activities was $10.4 million which consisted of $8.0 million used to pay quarterly dividends to our common stockholders, $67.8 million used to repurchase 2.47 million shares of our common stock, and $641 thousand used to make principal payments on long-term debt and capital lease obligations. Partially offsetting these financing cash outflows was $66.0 million provided by draws off the Company's revolving credit facility ~~with Regions,~~ and $39 thousand was provided from the exercise of stock options.

During the nine months ended September 30, 2014 net cash used by financing activities was $22.9 million which consisted of $7.6 million of principal repayments against our former term loan facility with Citibank plus a $24.4 million pay off of the remaining balances on our previous syndicated credit facility with Citibank upon the undertaking of the new syndicated loan facility with Regions Financial Corporation ("Regions"), $8.7 million was used to pay a quarterly dividend to our common stockholders, $16.5 million was used to repurchase shares of our common stock, $3.2 million pertained to the excess tax benefits associated with share-based compensation, $3.5 million was used to re-acquire shares of our common stock previously issued in connection with the put option associated with the 2012 acquisition of PlanetSoft, and $480 thousand was used to make principal

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payments on long-term debt and capital lease obligations. Partially offsetting these financing cash outflows was $40.63 million provided by the Company's new revolving credit facility with Regions (net of the $23.2 million in repayments of the remaining balance from the prior term loan with Citibank) and $788 thousand of proceeds from the exercise of stock options.

Commercial Bank Financing Facility

On ~~October 14, 2015~~June 17, 2016, the Company ~~exercised~~and certain of its subsidiaries entered into the ~~$50 million accordion feature under~~Second Amendment (the “Second Amendment”) to the Regions Secured Credit ~~Agreement (the “Credit Agreement”)~~Facility (as defined below), dated August 5, 2014, among the Company, Regions Bank as Administrative and Collateral Agent ~~(“Regions”~~("Regions"), Regions Capital Markets, PNC Capital Markets, LLC, and ~~Regions , MUFG Union~~TD Securities (USA) as joint Lead Arrangers for the syndicate of lenders. The Second Amendment increases the total credit facility to $400 million from the prior amount of $240 million, and expands the syndicated bank group to eleven participants by adding seven new participants which include PNC Bank, National Association BMO Harris Bank N.A., ~~Fifth Third~~Key Bank National Association, HSBC Bank National, Cadence Bank, the Toronto-Dominion Bank (New York Branch), and ~~Silicon Valley Bank~~Trustmark National Bank. The Credit Agreement (as defined below) now consists of a 5-year revolving credit component in the amount of $275 million, and ~~TD Bank, NA as joint lenders.~~a 5-year term loan component in the amount of $125 million, with repayments due in the amount $3.125 million due each quarter, starting September 30, 2016. The Credit Agreement also contains an accordion feature, which if exercised and approved by all credit parties, would expand the total borrowing capacity under the syndicated credit facility to $500 million. The credit facility carries a leverage-based LIBOR related interest rate, which currently stands at approximately 2.81%.

On October 8, 2015 Ebix exercised the $50 million accordion feature under the Regions Secured Credit Facility. TD Bank, NA was added to the syndication group along with four other bank participants which ~~includes~~include Regions. The exercise of the accordion feature ~~increases~~increased the Aggregate Revolving Commitment under the Credit Agreement to $240 million from the prior amount of $190 million.

On February 3, 2015 the Company and certain of its subsidiaries entered into the First Amendment to the Regions Secured Credit Facility, dated August 5, 2014, among the Company, Regions as Administrative Agent, with Regions, MUFG Union Bank N.A., and Silicon Valley Bank as joint lenders. The First Amendment amends the Credit Agreement by increasing the maximum amount by which the Aggregate Revolving Commitments may be increased to $90 million from the pre-existing limit of $50 million, increased the amount of base facility to $190 million from the pre-existing amount of $150 million, which together with the $50 million accordion feature increased the total Credit Agreement capacity amount to $240 million from the prior amount of $200 million, and expanded the syndicated bank group to four participants by adding Fifth Third Bank.

On August 5, 2014, Ebix entered into a credit agreement providing for a $150 million secured syndicated credit facility (the “Regions Secured Credit Facility”) with Regions as administrative agent and Regions with MUFG Union Bank N.A., and Silicon Valley Bank as joint lenders. The financing is comprised of a five-year, $150 million secured revolving credit facility, with an option to expand to $200 million upon request and with additional lender participation. This new $150 million credit facility with Regions, as administrative agent, replaced the former syndicated $100 million facility that the Company had in place with Citi Bank, N.A. which was paid in full upon the undertaking of this new loan facility with Regions. The interest rate applicable to the Regions Secured Credit Facility is LIBOR plus 1.5%. Under the Regions Secured Credit Facility the maximum interest rate that could be charged depending upon the Company's leverage ratio is LIBOR plus 2.25%. The underlying financing agreement contains financial covenants regarding the Company's annualized fixed charge coverage ratio and leverage ratio, as well as certain restrictive covenants pertaining to such matters as the incurrence of new debt and the consummation of new business acquisitions. The Company currently is in compliance with all such financial and restrictive covenants. As ofAt September 30, ~~2015~~2016 the Company's consolidated balance sheet includes ~~$1.40~~$3.38 million of remaining deferred financing ~~costs.~~costs in connection with this credit facility, which are being amortized as a component of interest expense over the five-year term of the financing agreement. In regards to these deferred financing costs, $2.7 million pertains to the revolving line of credit component of the Credit Agreement, and $676 thousand pertains to the term loan component of the Credit Agreement of which $136 thousand is netted against the current portion and $540 thousand is netted against the long-term portions of the term loan as reported on the Condensed Consolidated Balance.

At September 30, ~~2015,~~2016, the outstanding balance on the revolving line of credit under the ~~Regions Secured Syndicated~~ Credit ~~Facility~~Agreement was ~~$186.5~~$134.0 million and the facility carried an interest rate of ~~2.00%~~2.81%. During the nine months ended September 30, ~~2015, During the nine months ended September 30, 2015, $66.0~~2016, $50.0 million of draws were made off of the revolving credit ~~facility, and no payments were made against~~facility. In June the revolving line of ~~credit.~~credit was refinanced in conjunction with the Second Amendment to the Credit Agreement with $125 million being converted to a term loan, with the resulting balance on the revolving line of credit being $104.0 million (including certain deferred financing costs and before a $15 million draw). The revolving line of credit balance is included in the long-term liabilities section of the Condensed Consolidated Balance Sheets.

During the nine months period ended September 30, ~~2015,~~2016, the average and maximum outstanding balances ~~on our~~of the revolving line of credit ~~facilities~~component of the credit facility were ~~$145.1~~$179.4 million and ~~$186.5~~$226.5 million, respectively.

At September 30, 2016, the outstanding balance on the term loan was $121.9 million of which $12.5 million is due within the next twelve months, with the first repayment of $3.13 million being having been made on September 30, 2016. This term loan also carried an interest rate of 2.81%. The current and long-term portions of the term loan are included in the respective current and long-term sections of the Condensed Consolidated Balance Sheets, the amounts of which were $12.5 million and $109.4 million respectively at September 30, 2016.

Off-Balance Sheet Arrangements

We do not engage in off ~~-balance~~balance sheet financing arrangements.

Recent Accounting Pronouncements

For information about new accounting pronouncements and the potential impact on our Consolidated Financial Statements, see Note 1 of the condensed notes to the Condensed Consolidated Financial Statements in this Form 10-Q and Note 1 of the notes to consolidated financial statements in our ~~2014~~2015 Form 10-K.

Application of Critical Accounting Policies

The preparation of financial statements in conformity ~~with Generally Accepted Accounting Principles (“GAAP”),~~GAAP, as promulgated in the United States, requires our management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures in our Condensed Consolidated Financial Statements and accompanying notes. We believe the most complex and sensitive judgments, because of their significance to the Condensed Consolidated Financial Statements, result primarily from the need to make estimates and assumptions about the effects of matters that are inherently uncertain. The following accounting policies involve the use of “critical accounting estimates” because they are particularly dependent on estimates and assumptions made by management about matters that are uncertain at the time the

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accounting estimates are made. In addition, while we have used our best estimates based on facts and circumstances available to us at the time, different estimates reasonably could have ~~possibly~~ been used in the current period, and changes in the accounting estimates that we used are reasonably likely to occur from period to period both of which may have a material impact on our financial condition and results of operations. For additional information about these policies, see Note 1 of the Condensed Notes to the Condensed Consolidated Financial Statements in this Form 10-Q. Although we believe that our estimates, assumptions and judgments are reasonable, they are limited based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

Revenue Recognition

In accordance with the ~~Financial Accounting Standards Board ("FASB")~~FASB and SEC accounting guidance on revenue recognition the Company considers revenue earned and realizable when: (a) persuasive evidence of the sales arrangement exists, provided that the arrangement fee is fixed or determinable, (b) delivery or performance has occurred, (c) customer acceptance has been received, if contractually required, and (d) collectability of the arrangement fee is probable. The Company uses signed contractual agreements as persuasive evidence of a sales arrangement. We apply the provisions of the relevant generally accepted accounting principles related to all transactions involving the license of software where the software deliverables are considered more than inconsequential to the other elements in the arrangement.

recognition. Generally these types of arrangements include deliverables pertaining to software licenses, system set-up, and professional services associated with product customization or modification. Delivery of the various contractual elements typically occurs over periods of less than eighteen months. These arrangements generally do not have refund provisions or have very limited refund terms.

Allowance for Doubtful Accounts Receivable

Management specifically analyzes accounts receivable and historical bad debts, write-offs, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts.

Valuation of Goodwill and Other Indefinite-Lived Intangible Assets

Goodwill represents the cost in excess of the fair value of the net assets of acquired businesses. Indefinite-lived intangible assets represent the fair value of acquired contractual customer relationships for which future cash flows are expected to continue indefinitely. In accordance with the relevant FASB accounting guidance, goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment at the reporting unit level on an annual basis or on an interim basis if an event occurs or circumstances change that would likely have reduced the fair value of a reporting unit below its carrying value. Potential impairment indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, and the sale or disposition of a significant portion of the business. The impairment evaluation process first involves an assessment of certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of any of our reporting units was less than its carrying amount. If, after assessing the totality of events or circumstances, we were to determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then we would not perform the two-step quantitative impairment testing described further below.

The aforementioned two-step quantitative testing process involves comparing the reporting unit carrying values to their respective fair values. We determine the fair value of our reporting units by applying the discounted cash flow method using the present value of future estimated net cash flows. If the fair value of a reporting unit exceeds its carrying value, then no further testing is required. However, if a reporting unit's fair value were to be less than its carrying value, we would then determine the

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amount of the impairment charge, if any, which would be the amount that the carrying value of the reporting unit's goodwill exceeded its implied value. Projections of cash flows are based on our views of growth rates, operating costs, anticipated future economic conditions and the appropriate discount rates relative to risk and estimates of residual values. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. The use of different estimates or assumptions for our projected discounted cash flows (e.g., growth rates, future economic conditions, discount rates and estimates of terminal values) when determining the fair value of our reporting units could result in different values and may result in a goodwill impairment charge. We perform our annual goodwill impairment evaluation and testing as of September 30th of each year. This evaluation is done during the fourth quarter each year. During the year ended December 31, ~~2014~~2015 we had no impairment of our reporting unit goodwill balances. ~~The 2015 goodwill impairment evaluation is currently underway and will be completed commensurate with the release of the Company's full year 2015 financial reporting.~~

Valuation of Contingent Liabilities related to Earn Out Obligations from Business ~~Acquisitions~~Acquisitions

A significant component of the purchase price consideration for many of the Company's business acquisitions is a potential subsequent cash earnout payment based on reaching certain specified future revenue targets. The terms for the contingent earn out payments in most of the Company's business acquisitions typically address the GAAP recognizable revenues achieved by the acquired entity over a one, two, and/or three year period subsequent to the effective date of their acquisition by Ebix. These terms typically establish a minimum threshold revenue target with achievement of revenues recognized over that target being awarded in the form of a specified cash earn out payment. The Company applies these terms in its calculation and determination of the fair value of contingent earn out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the corresponding acquired assets and liabilities. The Company recognizes these potential obligations as contingent liabilities and are reported ~~accordingly~~as such on its Condensed Consolidated Balance Sheets. ~~As discussed in more detail in Note 1 to~~During the ~~accompanying Condensed Consolidated interim financial statements,~~nine months ended September 30, 2016 and 2015 these aggregate contingent accrued earn-out business acquisition consideration liabilities ~~are recorded at fair value on the acquisition date~~were reduced by $2.4 million and ~~are remeasured quarterly~~$1.5 million, respectively, due to remeasurements as based on the then assessed fair value and ~~adjusted if necessary.~~changes in anticipated future revenue levels. These reductions to the contingent accrued earn-out liabilities resulted in a corresponding reduction of $1.7 million to general and administrative expenses as reported on the Condensed Consolidated Statements of Income and a reduction

of $664 thousand to goodwill as reported on the Condensed Consolidated Balance Sheets. As of September 30, 2016, the total of these contingent liabilities was $1.62 million.

Income Taxes

Deferred income taxes are recorded to reflect the estimated future tax effects of differences between financial statement and tax basis of assets, liabilities, operating losses, and tax credit carry forwards using the tax rates expected to be in effect when the temporary differences reverse. Valuation allowances, if any, are recorded to reduce deferred tax assets to the amount management considers more likely than not to be realized. Such valuation allowances are recorded for the portion of the deferred tax assets that are not expected to be realized based on the levels of historical taxable income and projections for future taxable income over the periods in which the temporary differences will be deductible.

The Company also applies FASB accounting guidance on accounting for uncertainty in income taxes positions. This guidance clarifies the accounting for uncertainty in income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

Foreign Currency Matters

The functional currency for the Company's foreign subsidiaries in India, Dubai, and Singapore is the U.S. dollar because the intellectual property research and development activities provided by its Dubai and Singapore subsidiary, and the product development and information technology enabled services activities for the insurance industry provided by its India ~~subsidiary.~~subsidiary, both in support of Ebix's operating divisions across the world, are transacted in U.S. dollars.

The functional currency of the Company's other foreign subsidiaries is the local currency of the country in which the subsidiary operates. The assets and liabilities of these foreign subsidiaries are translated into U.S. dollars at the rates of exchange at the balance sheet dates. Income and expense accounts are translated at the average exchange rates in effect during the period. Gains and losses resulting from translation adjustments are included as a component of other comprehensive income in the accompanying Condensed Consolidated Balance Sheets. Foreign exchange transaction gains and losses that are derived from transactions denominated in a currency other than the subsidiary's functional currency are included in the determination of net income.

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Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to foreign currency exchange rate risk related to our foreign-based operations where certain transactions are denominated in other than our entity's functional currency and are subject to market risk with respect to fluctuations in the relative value of those currencies. Most of the Company's transactions are denominated in U.S. ~~dollars,~~dollars; however, the Company has significant and expanding operations in Australia, Brazil and Europe, and we conduct transactions in the local currencies of each of those locations. There can be no assurance that fluctuations in the value of foreign currencies will not have a material adverse effect on the Company’s business, operating results, revenues or financial condition. During the nine months ended September 30, ~~2015~~2016 and ~~2014~~2015 the net change in the cumulative foreign currency translation account, which is a component of accumulated other comprehensive loss within stockholders’ equity, were unrealized losses of ~~$14.2~~$1.0 million and ~~$1.9~~$14.2 million, respectively. The Company considered the historical trends in currency exchange rates and determined that it was reasonably possible that adverse changes in our respective foreign currency exchange rates of 20% could be experienced in the near term. Such an adverse change in currency exchange rates would have resulted in reduction to pre-tax income of approximately ~~$1.9~~$3.4 million and ~~$4.0~~$1.9 million for the nine months ended September 30, 2016 and 2015, ~~and 2014,~~ respectively.

The Company's exposure to interest rate risk relates to its interest expense on outstanding debt obligations and to its interest income on existing cash balances. As of September 30, ~~2015~~2016 the Company had ~~$187.1~~$255.9 million of outstanding debt obligations which consisted of a ~~$186.47~~$121.9 million term loan and a $134.0 million balance on our commercial banking revolving line of ~~credit, and a $604 thousand in secured promissory note payable.~~credit. The Company's revolving line of credit bears interest at the rate of LIBOR plus 1.50%, and stood at ~~2.00%~~2.81% at September 30, ~~2015.~~2016. The Company is exposed to market risk in relation to this line of credit in regards to the potential increase in interest expense arising from adverse changes in interest rates. This interest rate risk is estimated as the potential decrease in earnings resulting from a hypothetical ~~30%~~30 basis point increase in the LIBOR rate. Such an adverse change in the LIBOR rate would have resulted in a reduction to pre-tax income of approximately ~~$117~~$430 thousand and ~~$24~~$117 thousand for the nine months ended September 30, ~~2015~~2016 and ~~2014,~~2015, respectively. The Company's average cash balances during the nine months ended September 30, ~~2015~~2016 were ~~$34.8~~$76.0 million and its existing cash balances as of September 30, ~~2015~~2016 were ~~$33.2~~$99.8 million. The Company is exposed to market risk in relation to these cash balances in regards to the potential loss of interest income arising from adverse changes in interest rates. This interest rate risk is estimated as the potential decrease in earnings resulting from a hypothetical ~~20% decrease in~~20 basis point interest rates earned on deposited funds. Such an adverse change in these interest rates would have resulted in a reduction to pre-tax income of approximately ~~$34~~$244 thousand and ~~$60~~$34 thousand for the nine months ended September 30, ~~2015~~2016 and ~~2014,~~2015, respectively.

There were no other material changes to our market risk exposure during the nine months ended September 30, ~~2015~~2016 and ~~2014~~2015. For additional information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures about Market Risk,” in Part II, Item 7A of our ~~2014~~2015 Form 10-K.

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Item 4: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: The Company's management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report.

Internal Control over Financial Reporting: There were no changes in our internal control over financial reporting during the ~~three or~~ nine months ended September 30, ~~2015~~2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II — OTHER INFORMATION

Item 1: LEGAL PROCEEDINGS

On December 3, 2012, the Company received a subpoena and letter from the SEC dated November 30, 2012, stating that the SEC is conducting a formal, non-public investigation styled In the Matter of Ebix, Inc. (A-3318) and seeking documents primarily related to the issues raised in the ~~matter styled~~ In re: Ebix, Inc. Securities ~~Litigation, Civil Action No. 1:11-CV-02400-RWS (N.D. Ga.).~~Litigation. On April 16, 2013, the Company received a second subpoena from the SEC seeking additional documents. The Company has cooperated with the SEC to provide the requested documents. The Company has had no substantive communication with the SEC since February 2014.

Following the announcement on May 1, 2013 of the Company's execution of a merger agreement with affiliates of Goldman Sachs & Co., twelve putative class action complaints challenging the proposed merger were filed in the Delaware Court of Chancery. These complaints name as Defendants some combination of the Company, its directors, Goldman Sachs & Co. and affiliated entities. On June 10, 2013, the twelve complaints were consolidated by the Delaware Court of Chancery, now captioned In re Ebix, Inc. Stockholder Litigation, CA No. ~~8526-VCN.~~8526-VCS. On June 19, 2013, the Company announced that the merger agreement had been terminated pursuant to a Termination and Settlement Agreement dated June 19, 2013. After Defendants moved to dismiss the consolidated proceeding, Lead Plaintiffs amended their operative complaint to drop their claims against Goldman Sachs & Co. and focus their allegations on an Acquisition Bonus Agreement (“ABA”) between the Company and Robin Raina. On September 26, 2013, Defendants moved to dismiss the Amended Consolidated Complaint. On July 24, 2014, the Court issued its Memorandum Opinion that granted in large part the Company’s Motion to Dismiss and narrowed the remaining claims. The only remaining counts are as follows: (i) Counts II and IV, but only to the extent the Plaintiffs seek non-monetary relief for alleged material misstatements related to the ABA base price in the 2010 Proxy Statement; (ii) Count II, but only to the extent it challenges the continued existence of the ABA as an alleged unreasonable anti-takeover device; and, (iii) Count V, but only to the extent that it relates to the compensation the Board received under the Company’s 2010 Stock Incentive Plan. On September 15, 2014, the Court entered an Order implementing its Memorandum Opinion. On January 16, 2015, the Court entered an Order permitting Plaintiffs to file a Second Amended and Supplemented Complaint. ~~As currently pled,~~On February 10, 2015, Defendants filed a Motion to Dismiss the Second Amended and Supplemented Complaint, ~~asserts~~which was granted in part and denied in part in a January 15, 2016 Memorandum Opinion and Order. The remaining claims are as follows: (i) a purported class and derivative claim for breach of fiduciary duty by the individual Defendants infor improperly maintaining the ABA as an unreasonable anti-takeover device; (ii) a purported class claim against the individual Defendants for breach of the fiduciary duty of disclosure to the stockholders with respect to the Company’s 2010 Proxy Statement and 2010 Stock Incentive ~~Plan,~~Plan; (iii) a purported derivative claim against the individual Defendants for breach of fiduciary duty to the Company in causing incentive compensation to be awarded to themselves and others under the 2010 Stock Incentive ~~Plan,~~Plan; (iv) a purported class and derivative claim for breach of fiduciary duty by the individual Defendants in adopting ~~the August 5, 2014 Credit Agreement, the November 26, 2014 Director Nomination Agreement with Barrington Capital Group, L.P. and~~ certain bylaw amendments ~~adopted~~on December 19, ~~2014,~~2014; and, (v) a purported class and derivative claim seeking invalidation of the December 19, 2014 bylaw amendments under Delaware ~~law,~~law. Lead Plaintiffs seek declaratory relief with respect to the 2010 Stock Incentive Plan, the 2010 Proxy Statement, and ~~(vi) a purported class claim for breach of fiduciary duty by~~ the ~~individual Defendants for issuing a purportedly materially misleading~~bylaw amendments. Lead Plaintiffs also seek compensatory damages, interest, and ~~incomplete 2014 Proxy Statement. On February 10, 2015, Defendants~~attorneys’ fees and costs. The parties have filed ~~a Motion~~answers to ~~Dismiss~~the remaining claims in the Second Amended and Supplemented Complaint and discovery has commenced. On October 25, 2016, the Court entered an Order permitting Plaintiffs to file a Verified Third Amended and Supplemented Class Action and Derivative Complaint, which ~~is pending.~~was then filed on October 26, 2016. The Company denies any liability and intends to defend the action vigorously.

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The Company is involved in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate likely disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

Item 1A: RISK FACTORS

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2014,~~2015, which could materially affect the Company's business, financial condition or future results. There have not been any significant changes with respect to the risk factors described in Ebix's ~~2014 Annul~~2015 Annual Report on Form 10-K. The risks described in that ~~2014~~2015 Form 10-K and in this Quarterly Report on Form 10-Q are not the only risks that the Company faces. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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Item 2: REPURCHASES OF EQUITY SECURITIES

The following table contains information with respect to purchases of our common stock made by or on behalf of Ebix during the nine months ended September 30, ~~2015~~,2016, as part of our publicly-announced share repurchase plan:

Total Number of Shares (Units) Purchased Total Number of Shares Purchased as Part of
Publicly-Announced Plans or Programs Average Price Paid Per Share (1) Maximum Number (or
Approximate Dollar Value) of
Shares that May Yet Be
Purchased Under the Plans or Programs (2) (3) (5)
Period

As of December 31, 2014 7,853,514
7,853,514
$ —
$ 71,033,000
January 1, 2015 to March 31, 2015 (4)

994,869
994,869
$ 24.35
$ 46,809,000
April 1, 2015 to June 30, 2015 349,365
349,365
$ 29.36
$ 36,551,000
July 1, 2015 to July 31, 2015 401,125
401,125
$ 30.11
$ 24,472,000
August 1, 2015 to August 31, 2015 673,935
673,935
$ 29.25
$ 104,757,000
September 1, 2015 to September 30, 2015 (6) 94,398
94,398
$ 26.67
$ 102,239,000
Total 10,367,206
10,367,206
$ 102,239,000



	Total Number of Shares (Units) Purchased	Total Number of Shares Purchased as Part of Publicly-Announced Plans or Programs	Average Price Paid Per Share (1)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2) (3) (4)
Period	Total Number of Shares (Units) Purchased		Average Price Paid Per Share (1)

As of December 31, 2015 (3)	10,777,820	10,777,820	$	—	$	88,558,000
January 1, 2016 to March 31, 2016	465,560	465,560	$	30.00	$	74,590,000
April 1, 2016 to June 30, 2016	543,630	543,630	$	44.56	$	50,363,000
July 1, 2016 to July 31, 2016	30,000	30,000	$	52.53	$	48,787,200
August 1, 2016 to August 31, 2016	—	—	$	—	$	48,787,200
September 1, 2016 to September 30, 2016	58,200	58,200	$	54.73	$	45,602,100
Total	11,875,210	11,875,210			$	45,602,100


(1)	Average price paid per share for shares purchased as part of our publicly-announced plan.

(2)

Effective June 30, 2011 the Company's Board of Directors unanimously approved an increase in the size of the Company's authorized share repurchase plan from $45.0 million to $100.0 million. The Board directed that the repurchases be funded with available cash balances and cash generated by the Company's operating activities, and be completed in the subsequent twelve months if possible. As of September 30, 2015 there are no remaining share repurchase authorizations for this plan. Under certain circumstances the aggregate amount of repurchases of the Company's equity shares may be limited by the terms and underlying financial covenants regarding the Company's commercial bank financing facility.

~~(3)~~

Effective June 21, 2013 the Company's Board of Directors unanimously approved an additional authorized share repurchase plan of $100.0 million. The Board directed that the repurchases be funded with available cash balances and cash generated by the Company's operating activities, and be completed in the subsequent twenty four months if possible. Under certain circumstances the aggregate amount of repurchases of the Company's equity shares may be limited by the terms and underlying financial covenants regarding the Company's commercial bank financing facility.


~~(4)~~	~~As of March 31, 2015 there were 64,893 shares totaling $1.94 million of share repurchases that were not settled until April 2015.~~

~~(5)~~

Effective August 19, 2015 the Company's Board of Directors unanimously approved an additional authorized share repurchase plan of $100.0 million. The Board directed that the repurchases be funded with available cash balances and cash generated by the Company's operating activities. Under certain circumstances the aggregate amount of repurchases of the Company's equity shares may be limited by the terms and underlying financial covenants regarding the Company's commercial bank financing facility.


~~(6)~~(3)	As of ~~September 30,~~December 31, 2015 there were ~~40,000~~25,000 shares totaling ~~$1.0~~$820 thousand of share repurchases that were not settled until January 2016.


(4)	As of June 30, 2016 there were 30,000 shares totaling $1.4 million of share repurchases that were not settled until ~~October 2015.~~July 2016.

Item 3: DEFAULTS UPON SENIOR SECURITIES

None.

Item 4: MINE SAFETY DISCLOSURES

Not applicable.

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Item 5: ~~Other Information.~~OTHER INFORMATION

None.

Item 6: EXHIBITS

The exhibits filed herewith or incorporated by reference herein are listed in the Exhibit Index attached hereto.

~~Table of Contents~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




		Ebix, Inc.
Date:	November 9, ~~2015~~2016	By:	/s/ Robin Raina
			Robin Raina
			Chief Executive Officer (Principal Executive Officer)

Date:	November 9, ~~2015~~2016	By:	/s/ Robert F. Kerris
			Robert F. Kerris
			Chief Financial Officer (Principal Financial and Accounting Officer)

~~Table of Contents~~

EXHIBIT INDEX



Exhibits
3.1		Certificate of Incorporation, as amended, of Ebix, Inc. (filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference).
3.2		~~Bylaws of the Company (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference).~~
~~3.3~~		Amended and Restated Bylaws of Ebix, Inc., effective immediately following the Company’s Annual Meeting of Stockholders, held on January 9, 2015 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated December 24, 2014).
10.1*		~~First Amendment to Credit Agreement, dated as of February 3, 2015, by and among Ebix, Inc., as borrower,~~ ~~certain subsidiaries of Ebix, Inc., as guarantors, Regions Financial Corporation as administrative agent, and~~ ~~Regions Capital Markets, MUFG Union Bank N.A., Silicon Valley Bank, and Fifth Third Bank as joint lenders.~~
31.1*		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).
31.2*		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).
32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101**101.0		XBRL (Extensible Business Reporting Language) - The following materials from Ebix, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2015,~~2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statement of Stockholders' Equity and Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements which were tagged as blocks of text.



* Filed herewith
**~~Exhibit 101 to this Quarterly Report on Form 10-Q is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.~~

4348



PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Condensed Consolidated Statements of Income for the three and nine months ended September 30, ~~2015~~2016 and ~~2014~~2015 (unaudited)	2

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, ~~2015~~2016 and ~~2014~~2015 (unaudited)	3

Condensed Consolidated Balance Sheets at September 30, ~~2015~~2016 (unaudited) and December 31, ~~2014~~2015	4

Condensed Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, ~~2015~~2016 (unaudited)	6

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2015~~2016 and ~~2014~~2015 (unaudited)	7

Notes to Condensed Consolidated Financial Statements (unaudited)	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2529

Item 3. Quantitative and Qualitative Disclosures About Market Risk	3742

Item 4. Controls and Procedures	3843

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	3843

Item 1A. Risk Factors	3944

Item 2. Repurchases of Equity Securities	4045

Item 3. Defaults upon Senior Securities	4045

Item 4. Mine Safety Disclosures	4045

Item 5. Other Information	4145

Item 6. Exhibits	4145

SIGNATURES	4247

EXHIBIT INDEX	4348

Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 101


	September 30, 2015			December 31, 2014			September 30, 2016			December 31, 2015
	(In thousands)						(In thousands)
Finite-lived intangible assets:
Customer relationships	$	70,262		$	66,783		$	67,679		$	76,275
Developed technology	17,205			15,664			15,012			15,121
Trademarks	2,739			2,751			2,683			2,729
Non-compete agreements	743			751			764			743
Backlog	140			140			140			140
Database	212			212			212			212
Total intangibles	91,301			86,301			86,490			95,220
Accumulated amortization	(41,710		)	(36,930		)	(48,339		)	(43,372		)
Finite-lived intangibles, net	$	49,591		$	49,371		$	38,151		$	51,848

Indefinite-lived intangibles:
Customer/territorial relationships	$	30,887		$	30,887		$	30,887		$	30,887


	Three Months Ended September 30, 2015				Three Months Ended September 30, 2014				Nine Months Ending September 30, 2015				Nine Months Ending September 30, 2014				Three Months Ended September 30, 2016				Three Months Ended September 30, 2015				Nine Months Ended September 30, 2016				Nine Months Ended September 30, 2015
	As Reported		Pro Forma		As Reported		Pro Forma		As Reported		Pro Forma		As Reported		Pro Forma		As Reported		Pro Forma		As Reported		Pro Forma		As Reported		Pro Forma		As Reported		Pro Forma
	(unaudited)				(unaudited)				(unaudited)				(unaudited)				(unaudited)				(unaudited)				(unaudited)				(unaudited)
	(In thousands, except per share data)																(In thousands, except per share data)
Revenue	$	66,813	$	66,813	$	50,808	$	69,642	$	195,278	$	202,031	$	153,688	$	209,622	$	74,608	$	74,608	$	66,813	$	69,854	$	218,248	$	224,534	$	195,278	$	211,013
Net Income	$	20,232	$	20,232	$	18,015	$	17,711	$	57,604	$	57,834	$	47,011	$	47,075
Net Income attributable to Ebix, Inc.																	$	24,067	$	24,067	$	20,232	$	19,574	$	69,218	$	68,249	$	57,604	$	56,206
Basic EPS	$	0.59	$	0.59	$	0.47	$	0.47	$	1.65	$	1.65	$	1.23	$	1.23	$	0.74	$	0.74	$	0.59	$	0.57	$	2.12	$	2.09	$	1.65	$	1.61
Diluted EPS	$	0.59	$	0.59	$	0.47	$	0.46	$	1.63	$	1.64	$	1.22	$	1.22	$	0.74	$	0.74	$	0.59	$	0.57	$	2.10	$	2.07	$	1.63	$	1.59

(in thousands)

Fair Value at September 30, ~~2015~~2016

Valuation Technique

Significant Unobservable
Input

Contingent acquisition consideration:
(Qatarlyst ~~Vertex, PB Systems, and Via Media acquisitions)~~acquisition)

$~~8,013~~1,621

Discounted cash flow

Projected revenue and probability of achievement