Divestitures

Shadow

In the fourth quarter of fiscal year 2012, we entered into a definitive purchase and sale agreement to divest our Shadow product line to Rocket Software, Inc. The divestiture of the Shadow product line was part of the Plan. The sale closed in October 2012, for total consideration of $33.0 million. Of the total consideration, $3.3 million is held in escrow to secure indemnification claims, if any, for up to 15 months. As of November 30, 2012, the escrow is included in other assets on the consolidated balance sheet.

Revenues and direct expenses of the Shadow product line have been reclassified as discontinued operations for all periods presented. The components included in discontinued operations on the consolidated statements of income are as follows (in thousands):



	Fiscal Year Ended
	November 30, 2012		November 30, 2011		November 30, 2010
Revenue	$	12,518	$	16,267	$	15,561
Income (loss) before income taxes	4,882		4,067		(4,215		)
Income tax provision (benefit)	164		1,079		(1,447		)
Gain on sale, net of tax	12,692		—		—
Income (loss) from discontinued operations, net	$	17,410	$	2,988	$	(2,768	)

The gain on sale of the Shadow product line is calculated as follows (in thousands):



Purchase price	$	31,903
Less: transaction costs	1,264
Less: net assets sold
Accounts receivables	1,592
Goodwill and intangible assets	10,540
Other assets	103
Deferred revenue	(6,859		)
Gain on sale	$	25,263
Tax provision	12,571
Gain on sale, net of tax	$	12,692

The total purchase price was reduced by $1.1 million, the amount of consideration received as part of the total $33.0 million of consideration from Rocket Software, Inc., for a three year distributor license agreement for one of our DataDirect products. The distributor license agreement does not constitute direct cash flows or significant continuing involvement of the Shadow product line, and thus does not preclude us from discontinued operations treatment.

FuseSource

In the third quarter of fiscal year 2012, we entered into a definitive purchase and sale agreement to divest our FuseSource product line to Red Hat, Inc. The divestiture of the FuseSource product line was part of the Plan. The sale closed in September 2012, for total consideration of $21.3 million. Of the total consideration, $2.1 million is held in escrow to secure indemnification claims, if any, for up to 15 months. As of November 30, 2012, the escrow is included in other assets on the consolidated balance sheet.

Revenues and direct expenses of the FuseSource product line have been reclassified as discontinued operations for all periods presented. The components included in discontinued operations on the consolidated statements of income are as follows (in thousands):



	Fiscal Year Ended
	November 30, 2012			November 30, 2011			November 30, 2010
Revenue	$	14,484		$	14,820		$	12,491
Loss before income taxes	(7,118		)	(2,840		)	(211		)
Income tax benefit	(3,000		)	(915		)	(85		)
Gain on sale, net of tax	11,187			—			—
Income (loss) from discontinued operations, net	$	7,069		$	(1,925	)	$	(126	)

The gain on sale of the FuseSource product line is calculated as follows (in thousands):



Purchase price	$	21,300
Less: net assets sold
Accounts receivables	2,749
Goodwill and intangible assets	3,690
Other assets	167
Deferred revenue	(5,148		)
Gain on sale	$	19,842
Tax provision	8,655
Gain on sale, net of tax	$	11,187

Artix, Orbacus and Orbix

In the first quarter of fiscal year 2013, we entered into a definitive purchase and sale agreement to divest our Artix, Orbacus and Orbix product lines to a subsidiary of Micro Focus International plc (Micro Focus). The divestiture of these product lines was part of the Plan. The sale is expected to close in the first quarter of fiscal year 2013, subsequent to our fiscal year end, for total consideration of $15.0 million. As of November 30, 2012, we met the requirements to classify the sale of these product lines as both held for sale and discontinued operations in the consolidated financial statements.

The assets and liabilities being sold to Micro Focus are classified as assets and liabilities held for sale on the consolidated balance sheet as of November 30, 2012 and are recorded at the lower of their carrying values or fair values less costs to sell, and are no longer being depreciated or amortized. The major categories of the assets and liabilities held for sale are as follows (in thousands):



Assets:
Accounts receivable	$	6,046
Goodwill and intangible assets	24,325
Other long-term assets	4
Impairment reserve	(8,601		)
Total assets held for sale	$	21,774
Liabilities:
Deferred revenue	$	5,287
Total liabilities held for sale	$	5,287

Revenues and direct expenses of these product lines have been reclassified as discontinued operations for all periods presented. The components included in discontinued operations on the consolidated statements of income are as follows (in thousands):



	Fiscal Year Ended
	November 30, 2012		November 30, 2011		November 30, 2010
Revenue	$	28,942	$	33,983	$	38,281
Income before income taxes	6,003		13,237		10,719
Income tax provision	3,562		3,596		2,273
Income from discontinued operations, net	$	2,441	$	9,641	$	8,446

In the fourth quarter of fiscal year 2012, we recorded an impairment loss of $8.6 million related to the assets held for sale of the Artix, Orbacus and Orbix product lines. The impairment loss in included in income (loss) from discontinued operations.

Actional, DataXtend, ObjectStore, Savvion and Sonic

In the fourth quarter of fiscal year 2012, we entered into a definitive purchase and sale agreement to divest our Actional, DataXtend, Savvion and Sonic product lines to the investment arm of Trilogy Enterprises (Trilogy). In December 2012, the agreement was amended to include the sale of our ObjectStore product line. The divestiture of these product lines was part of the Plan. The sale closed in December 2012, subsequent to our fiscal year end, for total consideration of $60.5 million. As of November 30, 2012, we met the requirements to classify the sale of these product lines as both held for sale and discontinued operations in the consolidated financial statements.

The assets and liabilities being sold to Trilogy are classified as assets and liabilities held for sale on the consolidated balance sheet as of November 30, 2012 and are recorded at the lower of their carrying values or fair values less costs to sell, and are no longer being depreciated or amortized. The major categories of the assets and liabilities held for sale are as follows (in thousands):



Assets:
Accounts receivable	$	13,691
Other current assets	412
Goodwill and intangible assets	31,693
Other long-term assets	459
Total assets held for sale	$	46,255
Liabilities:
Deferred revenue	$	19,998
Total liabilities held for sale	$	19,998



	Fiscal Year Ended
	November 30, 2012			November 30, 2011			November 30, 2010
Revenue	$	81,576		$	107,821		$	111,177
Loss before income taxes	(18,314		)	(27,484		)	(30,099		)
Income tax benefit	(6,234		)	(10,067		)	(10,077		)
Loss from discontinued operations, net	$	(12,080	)	$	(17,417	)	$	(20,022	)