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Divestitures | 12 Months Ended
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Nov. 30, 2013
Discontinued Operations and Disposal Groups [Abstract] |
Divestitures | Divestitures Under the Plan, we announced that we would divest all product lines which were not considered core product lines of our business: Actional, Artix, DataXtend, FuseSource, ObjectStore, Orbacus, Orbix, Savvion, Shadow and Sonic. The FuseSource and Shadow product lines were divested in fiscal year 2012. The remaining product lines were divested in the first quarter of fiscal year 2013. In the second quarter of fiscal year 2013, we entered into a definitive purchase and sale agreement to divest our Apama product line to Software AG. The sale closed in July 2013 for a purchase price of $44.3 million. Revenues and direct expenses of the divested product lines have been reclassified as discontinued operations for all periods presented. The fiscal year 2012 and 2011 results include revenues and direct expenses of all divested product lines, since we earned revenues and incurred direct expenses for all or part of fiscal year 2012 and 2011 for each of those product lines. The fiscal year 2013 results include the revenues and direct expenses of the product lines which had not been divested prior to the start of fiscal year 2013. Apama In the second quarter of fiscal year 2013, we entered into a definitive purchase and sale agreement to divest our Apama product line to Software AG. The sale closed in July 2013 for a purchase price of $44.3 million. Of the total consideration, $4.5 million is held in escrow to secure indemnification claims, if any, for up to 18 months. As of November 30, 2013, the escrow is included in other assets on the consolidated balance sheet. In connection with the sale, we also entered into a three year distributor license agreement with Software AG for $0.7 million for one of our DataDirect products. The distributor license agreement does not constitute direct cash flows or significant continuing involvement of the Apama product line, and thus does not preclude us from discontinued operations treatment. Revenues and direct expenses of the Apama 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, 2013 |  | November 30, 2012 |  | November 30, 2011
Revenue | $ | 10,550 |  |  | $ | 17,593 |  |  | $ | 27,094 |
Income (loss) before income taxes | (12,482 | ) |  | (18,348 | ) |  | (7,469 | )
Income tax provision (benefit) | (3,152 | ) |  | (5,998 | ) |  | (2,422 | )
Gain on sale, net of tax | 22,070 |  |  | — |  |  | — |
Income (loss) from discontinued operations, net | $ | 12,740 |  |  | $ | (12,350 | ) |  | $ | (5,047 | )
The gain on the sale of the Apama product line was calculated as follows (in thousands):
Purchase price | $ | 44,268 |
Less: transaction costs | 2,029 |
Less: net assets |
Accounts receivable | 2,426 |
Other current assets | 428 |
Goodwill and intangible assets | 6,991 |
Other long-term assets | 426 |
Deferred revenue | (3,917 | )
Gain on sale | 35,885 |
Tax provision | 13,815 |
Gain on sale, net of tax | $ | 22,070 |
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 closed in February 2013 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 sold to Micro Focus were classified as assets and liabilities held for sale on the consolidated balance sheet as of November 30, 2012 and were recorded at the lower of their carrying values or fair values less costs to sell, and were no longer being depreciated or amortized. The major categories of the assets and liabilities held for sale were 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, 2013 |  | November 30, 2012 |  | November 30, 2011
Revenue | $ | 5,786 |  |  | $ | 28,942 |  |  | $ | 33,983 |
Income before income taxes | 2,625 |  |  | 6,003 |  |  | 13,237 |
Income tax provision | (130 | ) |  | 3,562 |  |  | 3,596 |
Gain on sale, net of tax | $ | 2,009 |  |  | $ | — |  |  | $ | — |
Income from discontinued operations, net | $ | 4,764 |  |  | $ | 2,441 |  |  | $ | 9,641 |
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 based on our expectations of a sales price as compared to our estimation of the net assets to be sold at closing. The impairment loss was recorded as a reserve against the assets held for sale as of November 30, 2012 and was included in income (loss) from discontinued operations. The gain on sale of the Artix, Orbacus and Orbix product lines was calculated as follows (in thousands):
Purchase price | $ | 15,000 |
Less: transaction costs | 826 |
Less: indemnification obligation | 30 |
Less: net assets |
Accounts receivables | 2,872 |
Goodwill and intangible assets | 24,325 |
Other assets | 20 |
Impairment reserve | (8,601 | )
Deferred revenue | (6,481 | )
Gain on sale | 2,009 |
Tax provision | — |
Gain on sale, net of tax | $ | 2,009 |
In the first quarter of fiscal year 2013, upon the closing of the sale of Artix, Orbacus and Orbix, we amended the definitive purchase and sale agreement with Micro Focus to provide an additional indemnification obligation with respect to a specified vendor. The fair value of the indemnification obligation on the date the sale closed was $1.0 million. During the fourth quarter of fiscal year 2013, the matter was resolved and our actual indemnification obligation was $30,000. Additionally, since the close of the sale in the first quarter, we have adjusted the net assets sold by an immaterial amount. We have updated the gain on sale calculation as of November 30, 2013 to reflect these changes. The gain recorded in fiscal year 2013 was the result of differences in our estimation of net assets to be sold at closing as of November 30, 2012 versus the actual value of the net assets sold at closing. 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 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 sold to Trilogy were classified as assets and liabilities held for sale on the consolidated balance sheet as of November 30, 2012 and were recorded at the lower of their carrying values or fair values less costs to sell, and were no longer being depreciated or amortized. The major categories of the assets and liabilities held for sale were 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 |
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, 2013 |  | November 30, 2012 |  | November 30, 2011
Revenue | $ | (450 | ) |  | $ | 81,576 |  |  | $ | 107,821 |
Loss before income taxes | (980 | ) |  | (18,314 | ) |  | (27,484 | )
Income tax benefit | (248 | ) |  | (6,234 | ) |  | (10,067 | )
Gain on sale, net of tax | $ | 18,358 |  |  | $ | — |  |  | $ | — |
Income (loss) from discontinued operations, net | $ | 17,626 |  |  | $ | (12,080 | ) |  | $ | (17,417 | )
The gain on sale of the Actional, DataXtend, ObjectStore, Savvion and Sonic product lines was calculated as follows (in thousands):
Purchase price | $ | 60,500 |
Less: transaction costs | 1,211 |
Less: net assets |
Accounts receivables | 12,380 |
Goodwill and intangible assets | 31,693 |
Other assets | 976 |
Deferred revenue | (19,168 | )
Other liabilities | (299 | )
Gain on sale | 33,707 |
Tax provision | 15,349 |
Gain on sale, net of tax | $ | 18,358 |
Note that since the close of the sale in the first quarter, we have adjusted the net assets sold by an immaterial amount. We have updated the gain on sale calculation as of November 30, 2013 to reflect these changes. 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 was held in escrow to secure indemnification claims, if any, for 15 months. As of November 30, 2013 and 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, 2013 |  | November 30, 2012 |  | November 30, 2011
Revenue | $ | — |  |  | $ | 12,518 |  |  | $ | 16,267 |
Income (loss) before income taxes | — |  |  | 4,882 |  |  | 4,067 |
Income tax provision (benefit) | — |  |  | 164 |  |  | 1,079 |
Gain on sale, net of tax | — |  |  | 12,692 |  |  | — |
Income from discontinued operations, net | $ | — |  |  | $ | 17,410 |  |  | $ | 2,988 |
The gain on sale of the Shadow product line was 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, 2013 and 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, 2013 |  | November 30, 2012 |  | November 30, 2011
Revenue | $ | — |  |  | $ | 14,484 |  |  | $ | 14,820 |
Loss before income taxes | — |  |  | (7,118 | ) |  | (2,840 | )
Income tax benefit | — |  |  | (3,000 | ) |  | (915 | )
Gain on sale, net of tax | — |  |  | 11,187 |  |  | — |
Income (loss) from discontinued operations, net | $ | — |  |  | $ | 7,069 |  |  | $ | (1,925 | )
The gain on sale of the FuseSource product line was 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 |

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 144 -Paragraph 43-48 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 + Details
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