Restatement of Previously Issued Consolidated Financial Statements

12 Months Ended

Dec. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Consolidated Financial Statements

The Company has restated its audited consolidated financial statements for the years ended December 31, 2016 and 2015 for the matters described below. The effects of these restatement adjustments on (i) the Company’s Consolidated Balance Sheet at December 31, 2016, (ii) the Company’s Consolidated Statement of Operations for the years ended December 31, 2016 and 2015, (iii) the Company’s Consolidated Statements of Comprehensive Income for the years ended December 31, 2016 and 2015, (iv) the Company’s Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2016 and 2015 and (v) the Company’s Consolidated Statement of Cash Flows for the years ended December 31, 2016 and 2015 are presented below.

The effects of the restatement adjustments on the Company’s unaudited consolidated financial statements as of and for the quarters ended March 31, June 30 and September 31, 2016 and 2015 are included in Note 19, “Summary of Quarterly Results of Operations (Unaudited).”

The individual restatement matters that underlie the restatement adjustments are described below. The restatement adjustments also affect periods prior to 2015 and such adjustments have been reflected in the restated opening stockholders’ equity balances as of January 1, 2015.

Revenue Recognition Adjustments Related to Hosting Services

The Company typically sells hosting services to its subscription services customers, as well as to certain software license customers. As part of the Company’s review of its historical accounting, it has determined that adjustments are required related to certain transactions in each of these two categories of customers that purchase hosting services.

It was observed that in certain instances, the Company has historically entered into hosting arrangements that included various components to the fee structure with certain fees accelerated during the initial years of the arrangement. Historically, the Company recognized the accelerated fees as billed and maintenance and support fees were recognized on a straight-line basis through the term of the arrangement. However, the Company has determined to revise its accounting treatment for certain hosting services to reflect revenue recognition on a straight-line basis for such fees over the appropriate period of time during which (i) the benefits of hosting services were provided to the customer or (ii) the customer benefited from the set-up fees. The revised accounting treatment for the revenue recognition is reflected in the restated consolidated financial statements, whereby there has been a deferral of a portion of the accelerated fees out of the initial period of the arrangement, and recognition of those deferred amounts in the later periods of the hosting services arrangement.

In the case of certain perpetual software license customers, the Company historically recognized the perpetual software license fee revenue on an upfront basis. The Company has determined to revise its accounting treatment of that software license fee revenue to recognize it ratably over a period of time due to the inclusion of hosting services, as part of the same multiple element arrangement. In certain of these cases, the Company had entered into a separate hosting services contract with the customer that the Company has now determined should have been combined with the software license agreement and treated as part of a larger multiple element arrangement.

In accordance with the software revenue recognition rules, since the Company cannot establish vendor specific objective evidence of fair value of the hosting services, the software license element cannot be separated from the hosting services. The revised accounting treatment for the revenue recognition is reflected in the restated consolidated financial statements, whereby the bundled arrangement fees have been recognized ratably over the economic life of the hosting services.

Revenue Recognition Adjustments Related to Establishing Persuasive Evidence of an Arrangement and Other Revenue Adjustments

The Company historically has had, and continues to have, contractual arrangements with certain customers whereby there is an established master services agreement that includes general terms and conditions. Such master services agreements contemplate the delivery by the customer of purchasing documentation for purposes of completing orders, indicating the nature, price and quantity of products and services ordered. In certain cases, the Company historically formed a view that persuasive evidence of an arrangement existed relating to such orders based upon its receipt from a customer of written confirmation of the order and commitment to pay the agreed price, such as a quote approval sent by the customer in response to a quote issued by the Company, but prior to that customer’s subsequent delivery to the Company an executed statement of work or, in some instances, a purchase order, pursuant to a master services agreement.

The Company has determined, in certain situations, to revise the timing of revenue recognition to when it received final formal contract documentation, which occurred in a future period. In those cases where the adjustment to defer revenue has been recorded prior to when cash payment was received from the customer, the balance sheet impact has been to reduce the related accounts receivable balance, whereas the balance sheet impact of these adjustments after the receipt of cash payment from the customer has been to increase accrued liabilities.

The Company also adjusted revenue recognition in connection with certain other transactions, including (i) where the payment obligation on the date of sale was found not to have been fixed and determinable; (ii) where collectibility was not reasonably assured; (iii) where the software delivered to the customer was ultimately deemed not to have met acceptance criteria; or (iv) where formal acceptance was not obtained.

In certain situations, these adjustments represent issues related to the timing of revenue recognition, while in other cases, these adjustments represent amounts that had subsequently been written-off to bad debt expense (whereby now both the revenue and the related bad debt expense has been reversed).

Adjustments Related to Accounting for Acquisitions and Divestiture

The Company has identified and corrected errors related to fees received under license agreements entered into with parties of certain historical acquisitions and a divestiture. In each case, the Company had originally treated the license agreement as a separate transaction and recorded the license fees on a gross basis as revenue. The Company has determined to revise its accounting treatment of the license arrangements, to record the license fees as part of the accounting for the acquisition or divestiture, as follows:

•

In certain cases, the Company entered into a license agreement as part of settling prior intellectual property infringement claims against an acquired entity and/or its selling parent company and affiliates. Historically, the Company had recognized these license fees separately as revenue. However, the Company has determined to net these license fees against the consideration paid as part of the acquisitions, resulting in a reduction of the goodwill and/or intangible assets recorded in purchase accounting.

•

The Company’s consolidated joint venture Zentry LLC (“Zentry”) and the Company’s partner in that joint venture entered into a license agreement in December 2015 at the same time as the formation of the joint venture. Historically, the Company recorded the license fees as revenue separately from the Zentry formation. The Company has determined to net these license fees against the cash contributions paid as part of the joint venture formation, resulting in a reduction of the goodwill and intangible assets recorded in purchase accounting.

•

The Company entered into a licensing agreement in December 2016 with Sequential Technology International, LLC (“STIN”) shortly after closing the divestiture of its activation business to Sequential Technology International Holdings, LLC (“STIH”). Historically, the Company recorded the license fees as revenue separately from the accounting for the divestiture. The Company has determined to classify these license fees as additional gain on sale of the activation exception handling business.

•

The Company made adjustments to reduce the contingent consideration payable to shareholders of Razorsight Corporation (“Razorsight”), which was acquired by the Company in August 2015, and the related losses previously recorded to adjust that liability to fair value, as a result of the determination that many of the sales of Razorsight software that had originally been included in the earn-out calculation have now been adjusted as part of the restatement.


•	The Company made adjustments to record the fair value of the Company’s guarantee of certain of STIN’s debt as part of the divestiture of its activation exception handling business to STIH in December 2016, to record the sellers note extended in the transaction at fair value, and to adjust certain receivables and other assets sold in the transaction.


•	The Company made certain adjustments to the opening balances of Openwave Messaging, Inc. (“Openwave”) and SNCR, LLC (“SNCR, LLC”); impacting deferred revenue, goodwill and intangibles. Adjustments in deferred revenue and intangibles resulted were reported post-acquisition as revenues and costs were realized.

Other Adjustments and Capitalized Software

The Company also identified and corrected certain errors in the amounts reported as capitalized software development. These adjustments were primarily around (i) the recognition of impairment or immediate expensing of certain previously capitalized software development costs and (ii) revisions of amounts capitalized and the timing of when such capitalized costs are amortized. Adjustments pertaining to capitalized software development were driven primarily due to misalignment on the unit of account being measured in tracking project progress and ultimately general release as well as the appropriateness of the capitalization of certain administrative costs.

The Company also identified and corrected certain other errors, primarily due to timing of recognition of (i) stock-based compensation arrangements, (ii) accruals and reserves, (iii) noncontrolling interests and (iv) impairment charges. Impairment charges were primarily due to long-lived asset impairments realized on SNCR, LLC assets, due to continued delays in product development and sales. Additionally, the Company identified certain prior year balance sheet classification adjustments requiring, the most significant of which, a reclassification between cash and restricted cash due to certain contractual restrictions on cash balances, and reclassifications between treasury stock and additional paid-in-capital due to share issuances from the Company’s common stock pool, rather than its treasury stock.

Income Taxes

The Company recorded adjustments to income taxes to reflect the impact of the restatement adjustments, as well as a discrete tax adjustment to record a valuation allowance at a specific foreign jurisdiction in an earlier year than originally recorded. See Note 17 - Income Taxes for discussion of the related impact to the Company’s effective tax rate.

The following table presents the Consolidated Balance Sheet as previously reported, restatement adjustments and the Consolidated Balance Sheet as restated at December 31, 2016:



			Adjustments
	As Previously Reported		Revenue - Hosting			Revenue - Evidence of Arrangement and Other Revenue			Acquisitions & Divestiture			Capitalized Software and Other			Income Taxes			As Restated
ASSETS
Current assets:
Cash and cash equivalents	$	181,018	$	—		$	—		$	—		$	(11,217	)	$	—		$	169,801
Restricted cash	—		—			—			—			41,632			—			41,632
Marketable securities	12,506		—			—			—			—			—			12,506
Accounts receivable, net	137,233		(344		)	(36,509		)	7,896			(802		)	—			107,474
Prepaid expenses and other current assets	33,696		—			—			1,408			(1,166		)	4,339			38,277
Total current assets	364,453		(344		)	(36,509		)	9,304			28,447			4,339			369,690
Restricted cash	30,000		—			—			—			(30,000		)	—			—
Marketable securities	2,974		—			—			—			—			—			2,974
Property and equipment, net	155,599		—			—			(823		)	3,429			—			158,205
Goodwill	269,905		—			—			(41,358		)	—			(3,896		)	224,651
Intangible assets, net	203,864		—			—			(19,830		)	(21,066		)	—			162,968
Deferred tax assets	1,503		—			—			—			—			11,783			13,286
Other assets	7,541		—			—			(70		)	1,187			—			8,658
Note receivable from related party	83,000		—			—			(12,731		)	—			—			70,269
Equity method investment	45,890		—			—			(2,240		)	—			—			43,650
Total Assets	$	1,164,729	$	(344	)	$	(36,509	)	$	(67,748	)	$	(18,003	)	$	12,226		$	1,054,351



				Adjustments
	As Previously Reported			Revenue - Hosting			Revenue - Evidence of Arrangement and Other Revenue			Acquisitions & Divestiture			Capitalized Software and Other			Income Taxes			As Restated
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	15,770		$	—		$	—		$	—		$	1,287		$	—		$	17,057
Accrued expenses	69,435			—			5,274			971			246			956			76,882
Deferred revenues	27,542			33,398			(151		)	(3,360		)	1			—			57,430
Contingent consideration obligation	11,860			—			—			(9,027		)	—			—			2,833
Short-term debt	29,000			—			—			—			—			—			29,000
Total current liabilities	153,607			33,398			5,123			(11,416		)	1,534			956			183,202
Lease financing obligation - long term	12,121			—			—			41			288			—			12,450
Long-term debt	226,291			—			—			—			—			—			226,291
Deferred tax liability	49,822			—			—			—			—			(46,314		)	3,508
Deferred revenues	12,134			52,965			531			—			—			—			65,630
Other liabilities	3,783			—			—			—			1,679			2,731			8,193
Redeemable noncontrolling interests	49,856			—			—			(28,813		)	4,237			—			25,280
Commitments and contingencies
Stockholder's equity
Common stock	5			—			—			—			—			—			5
Treasury stock	(95,183		)	—			—			—			(11,448		)	—			(106,631		)
Additional paid-in capital	575,093			—			—			(7,667		)	3,727			—			571,153
Accumulated other comprehensive loss	(43,253		)	—			658			—			138			107			(42,350		)
Retained earnings	220,453			(86,707		)	(42,821		)	(19,893		)	(18,158		)	54,746			107,620
Total stockholders' equity	657,115			(86,707		)	(42,163		)	(27,560		)	(25,741		)	54,853			529,797
Total liabilities & stockholders' equity	$	1,164,729		$	(344	)	$	(36,509	)	$	(67,748	)	$	(18,003	)	$	12,226		$	1,054,351

The following table presents the Consolidated Statement of Operations as previously reported, restatement adjustments and the Consolidated Statement of Operations as restated for the year ended December 31, 2016:



				Adjustments
	As Previously Reported			Revenue - Hosting			Revenue - Evidence of Arrangement and Other Revenue			Acquisitions & Divestiture			Capitalized Software and Other			Income Taxes			As Restated
Net revenues	$	476,750		$	(39,492	)	$	9,435		$	(20,399	)	$	—		$	—		$	426,294
Costs and expenses:
Cost of services	194,198			—			—			(43		)	529			—			194,684
Research and development	106,681			—			—			—			7,812			—			114,493
Selling, general and administrative	131,106			155			(4,470		)	461			(1,024		)	—			126,228
Net change in contingent consideration obligation	10,930			—			—			(9,736		)	—			—			1,194
Restructuring charges	6,333			—			—			—			—			—			6,333
Depreciation and amortization	99,311			—			—			(4,452		)	11,107			—			105,966
Total costs and expenses	548,559			155			(4,470		)	(13,770		)	18,424			—			548,898
Loss from continuing operations	(71,809		)	(39,647		)	13,905			(6,629		)	(18,424		)	—			(122,604		)
Interest income	2,428			—			—			(340		)	(181		)	—			1,907
Interest expense	(7,013		)	—			—			374			200			(975		)	(7,414		)
Other expense, net	1,863			—			253			(830		)	(264		)	—			1,022
Loss from continuing operations, before taxes	(74,531		)	(39,647		)	14,158			(7,425		)	(18,669		)	(975		)	(127,089		)
Benefit for income taxes	7,990			—			—			—			—			25,230			33,220
Net loss from continuing operations	(66,541		)	(39,647		)	14,158			(7,425		)	(18,669		)	24,255			(93,869		)
Net income from discontinued operations, net of tax	74,533			—			(397		)	17,844			—			(1,420		)	90,560
Net loss	7,992			(39,647		)	13,761			10,419			(18,669		)	22,835			(3,309		)
Net loss attributable to redeemable noncontrolling interests	(11,596		)	—			—			—			(3,607		)	—			(15,203		)
Net loss attributable to Synchronoss	$	19,588		$	(39,647	)	$	13,761		$	10,419		$	(15,062	)	$	22,835		$	11,894

Basic:
Continuing operations	$	(1.26	)																$	(1.81	)
Discontinued operations	1.71																		2.08
	$	0.45																	$	0.27
Diluted:
Continuing operations	$	(1.26	)																$	(1.81	)
Discontinued operations	1.71																		2.08
	$	0.45																	$	0.27
Weighted-average common shares outstanding:
Basic	43,571																		43,551
Diluted	43,571																		43,551


*	Cost of services excludes depreciation and amortization which is shown separately.


†	See Note 3 - Summary of Significant Accounting Policies.



				Adjustments
	As Previously Reported			Revenue - Hosting			Revenue - Evidence of Arrangement and Other Revenue			Acquisitions & Divestiture			Capitalized Software and Other			Income Taxes		As Restated
Net revenues	$	428,117		$	(26,908	)	$	1,442		$	(30,090	)	$	—		$	—	$	372,561
Costs and expenses:
Cost of services	155,287			—			—			(17		)	(460		)	—		154,810
Research and development	91,430			—			—			—			1,333			—		92,763
Selling, general and administrative	88,411			—			(3,042		)	—			(778		)	—		84,591
Net change in contingent consideration obligation	760			—			—			755			—			—		1,515
Restructuring charges	4,946			—			—			—			—			—		4,946
Depreciation and amortization	72,152			—			—			(136		)	(967		)	—		71,049
Total costs and expenses	412,986			—			(3,042		)	602			(872		)	—		409,674
Loss from continuing operations	15,131			(26,908		)	4,484			(30,692		)	872			—		(37,113		)
Interest income	2,047			—			—			—			—			—		2,047
Interest expense	(5,711		)	—			—			—			—			—		(5,711		)
Other expense, net	372			—			(52		)	(16		)	303			—		607
Loss from continuing operations, before taxes	11,839			(26,908		)	4,432			(30,708		)	1,175			—		(40,170		)
Benefit for income taxes	(5,424		)	—			(534		)	—			—			8,346		2,388
Net loss from continuing operations	6,415			(26,908		)	3,898			(30,708		)	1,175			8,346		(37,782		)
Net income from discontinued operations, net of tax	40,267			—			—			—			—			—		40,267
Net loss	46,682			(26,908		)	3,898			(30,708		)	1,175			8,346		2,485
Net loss attributable to redeemable noncontrolling interests	6,052			—			—			—			(6,680		)	—		(628		)
Net loss attributable to Synchronoss	$	40,630		$	(26,908	)	$	3,898		$	(30,708	)	$	7,855		$	8,346	$	3,113

Basic:
Continuing operations	$	0.01																$	(0.88	)
Discontinued operations	0.95																	0.95
	$	0.96																$	0.07
Diluted:
Continuing operations	$	0.01																$	(0.88	)
Discontinued operations	0.95																	0.95
	$	0.96																$	0.07
Weighted-average common shares outstanding:
Basic	42,284																	42,284
Diluted	42,284																	42,284


*	Cost of services excludes depreciation and amortization which is shown separately.


†	See Note 3 - Summary of Significant Accounting Policies.

The following table presents the Consolidated Statement of Comprehensive Income as previously reported, restatement adjustments and the Consolidated Statement of Comprehensive Income as restated for the year ended December 31, 2016:



				Adjustments
	As Previously Reported			Revenue - Hosting			Revenue - Evidence of Arrangement and Other Revenue			Acquisitions & Divestiture		Capitalized Software and Other			Income Taxes			As Restated
Net (loss) income	$	7,992		$	(39,647	)	$	13,761		$	10,419	$	(18,669	)	$	22,835		$	(3,309	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(4,042		)	—			12			—		23			(107		)	(4,114		)
Unrealized gain (loss) on securities	198			—			(141		)	—		(161		)	107			3
Net loss on intra-entity foreign currency transactions	(725		)	—			—			—		—			—			(725		)
Total other comprehensive loss	(4,569		)	—			(129		)	—		(138		)	—			(4,836		)
Comprehensive (loss) income	$	3,423		$	(39,647	)	$	13,632		$	10,419	$	(18,807	)	$	22,835		$	(8,145	)
Comprehensive (loss) attributable to redeemable noncontrolling interests	$	(11,596	)	$	—		$	—		$	—	$	(3,607	)	$	—		$	(15,203	)
Total comprehensive (loss) income attributable to Synchronoss	$	15,019		$	(39,647	)	$	13,632		$	10,419	$	(15,200	)	$	22,835		$	7,058



				Adjustments
	As Previously Reported			Revenue - Hosting			Revenue - Evidence of Arrangement and Other Revenue		Acquisitions & Divestiture			Capitalized Software and Other			Income Taxes			As Restated
Net (loss) income	$	46,682		$	(26,908	)	$	3,898	$	(30,708	)	$	1,175		$	8,346		$	2,485
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(17,281		)	—			547		—			(58		)	(913		)	(17,705		)
Unrealized gain (loss) on securities	(54		)	—			—		—			53			(19		)	(20		)
Net loss on intra-entity foreign currency transactions	(1,335		)	—			—		—			—			—			(1,335		)
Total other comprehensive loss	(18,670		)	—			547		—			(5		)	(932		)	(19,060		)
Comprehensive (loss) income	$	28,012		$	(26,908	)	$	4,445	$	(30,708	)	$	1,170		$	7,414		$	(16,575	)
Comprehensive (loss) attributable to redeemable noncontrolling interests	$	6,052		$	—		$	—	$	—		$	(6,680	)	$	—		$	(628	)
Total comprehensive (loss) income attributable to Synchronoss	$	21,960		$	(26,908	)	$	4,445	$	(30,708	)	$	7,850		$	7,414		$	(15,947	)

The following table presents the Consolidated Statement of Stockholders equity as previously reported, restatement adjustments and the Consolidated Statement of Stockholders’ Equity as restated for the year ended December 31, 2014:



									Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Stockholders’ Equity
	Common Stock			Treasury Stock
	Shares	Amount		Shares		Amount
Balance at December 31, 2014 (As Previously Reported)	46,444	$	4	(3,733	)	$	(66,336	)	$	454,740	$	(20,014	)	$	160,713		529,107
Adjustments from:
Revenue - Hosting, before income tax effect	—	—		—		—			—		—			(20,152		)	(20,152		)
Revenue - Evidence of Arrangement and Other Revenue, before income tax effect	—	—		—		—			—		240			(60,478		)	(60,238		)
Acquisitions & Divestiture, before income tax effect	—	—		—		—			—		—			(5,960		)	(5,960		)
Capitalized Software and Other, before income tax effect	176	—		(159	)	(1,991		)	2,408		281			(4,599		)	(3,901		)
Income tax adjustments	—	—		—		—			—		1,039			23,569			24,608
Total adjustments	176	—		(159	)	(1,991		)	2,408		1,560			(67,620		)	(65,643		)
Balance at December 31, 2014 (As Restated)	46,620	$	4	(3,892	)	$	(68,327	)	$	457,148	$	(18,454	)	$	93,093		$	463,464

The following table presents the Consolidated Statement of Cash Flows as previously reported, restatement adjustments, the effect of early adopting Accounting Standard Update (“ASU”) 2016-18 Statement of Cash Flows (Topic 230) and the Consolidated Statement of Cash Flows as restated for the year ended December 31, 2016:



	As Previously Reported			Adjustments			Effect of Early Adoption of ASU 2016-18		As Restated
Operating activities:
Net loss continuing operations	$	(66,541	)	$	(27,328	)	$	—	$	(93,869	)
Net loss from discontinued operations	74,533			16,027			—		90,560
Gain (loss) on sale of discontinued operations, net of tax	(95,311		)	(17,818		)	—		(113,129		)

Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	99,311			(4,400		)	—		94,911
Impairment of long-lived assets and capitalized software	—			11,055			—		11,055
Amortization of debt issuance costs	1,607			—			—		1,607
Accrued PIK interest	—			(34		)	—		(34		)
Gain (loss) on disposals	(952		)	830			—		(122		)
Discontinued operations non-cash and working capital adjustments	—			371			—		371
Amortization of bond premium	1,416			—			—		1,416
Deferred income taxes	32,826			(15,678		)	—		17,148
Non-cash interest on leased facility	1,111			281			—		1,392
Stock-based compensation	33,979			199			—		34,178
Contingent consideration obligation	10,930			(9,736		)	—		1,194
Changes in operating assets and liabilities:	—			—
Accounts receivable, net of allowance for doubtful accounts	(1,662		)	(11,988		)	—		(13,650		)
Prepaid expenses and other current assets	12,644			19,004			—		31,648
Other assets	10,054			(1,174		)	—		8,880
Accounts payable	(11,139		)	1,050			—		(10,089		)
Accrued expenses	22,024			(29,547		)	—		(7,523		)
Other liabilities	(6,558		)	—			—		(6,558		)
Deferred revenues	24,317			30,856			—		55,173
Net cash provided by operating activities	142,589			(38,030		)	—		104,559

Investing activities:
Purchases of fixed assets	(58,542		)	15,972			—		(42,570		)
Purchases of intangible assets and capitalized software	—			(7,677		)	—		(7,677		)
Purchases of marketable securities available-for-sale	(13,445		)	—			—		(13,445		)
Maturities of marketable securities available-for-sale	82,904			—			—		82,904
Change in restricted cash	(30,000		)	—			30,000		—
Proceeds from the sale of discontinued operations	18,135			9,200			—		27,335
Businesses acquired, net of cash	(98,428		)	12,106			—		(86,322		)
Net cash provided by (used in) investing activities	(99,376		)	29,601			30,000		(39,775		)



Financing activities:
Proceeds from the exercise of stock options	13,912			(279	)	—	13,633
Taxes paid on withholding shares	(8,885		)	8,885		—	—
Debt issuance costs related to the Credit Facility	(1,346		)	—		—	(1,346		)
Borrowings on revolving line of credit	144,000			—		—	144,000
Repayment of revolving line of credit	(115,000		)	—		—	(115,000		)
Repurchases of common stock	(40,025		)	—		—	(40,025		)
Proceeds from the sale of treasury stock in connection with an employee stock purchase plan	2,183			—		—	2,183
Repayments of capital lease obligations	(3,815		)	—		—	(3,815		)
Net cash (used in) provided by financing activities	(8,976		)	8,606		—	(370		)
Effect of exchange rate changes on cash	(853		)	—		—	(853		)
Net increase in cash and cash equivalents	33,384			177		30,000	63,561
Cash and cash equivalents at beginning of period	147,634			238		—	147,872
Cash and cash equivalents at end of period	181,018			415		30,000	211,433
Cash and cash equivalents	181,018			(11,217	)	—	169,801
Restricted cash	—			11,632		30,000	41,632
Total cash and cash equivalents at end of period	181,018			415		30,000	211,433

Supplemental disclosures of cash flow information:
Cash paid for income taxes	4,661						4,661
Cash paid for interest	6,981						6,981

Supplemental disclosures of non-cash investing and financing activities:
Issuance of common stock in connection with Openwave acquisition	$	22,000					$	22,000

See accompanying notes to consolidated financial statements.



	As Previously Reported			Adjustments			As Restated
Operating activities:
Net loss continuing operations	$	6,415		$	(44,197	)	$	(37,782	)
Net loss from discontinued operations	40,267			—			40,267

Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	72,152			(1,103		)	71,049
Amortization of debt issuance costs	1,501			—			1,501
Gain (loss) on disposals	16			—			16
Amortization of bond premium	1,705			—			1,705
Deferred income taxes	8,319			(8,772		)	(453		)
Non-cash interest on leased facility	924			—			924
Stock-based compensation	31,711			(307		)	31,404
Contingent consideration obligation	(772		)	757			(15		)
Changes in operating assets and liabilities:
Accounts receivable, net of allowance for doubtful accounts	(27,577		)	7,803			(19,774		)
Prepaid expenses and other current assets	(8,543		)	(514		)	(9,057		)
Other assets	(4,282		)	531			(3,751		)
Accounts payable	6,185			(13,948		)	(7,763		)
Accrued expenses	16,333			(17,043		)	(710		)
Other liabilities	(402		)	2,530			2,128
Deferred revenues	(4,130		)	26,427			22,297
Net cash provided by operating activities	139,822			(47,836		)	91,986

Investing activities:
Purchases of fixed assets	(59,960		)	2,294			(57,666		)
Purchases of intangible assets and capitalized software	(1,200		)	(1,353		)	(2,553		)
Purchases of marketable securities available-for-sale	(139,569		)	—			(139,569		)
Maturities of marketable securities available-for-sale	106,210			—			106,210
Change in restricted cash	—			—			—
Businesses acquired, net of cash	(131,592		)	30,090			(101,502		)
Net cash provided by (used in) investing activities	(226,111		)	31,031			(195,080		)

Financing activities:
Proceeds from the exercise of stock options	19,936			—			19,936
Taxes paid on withholding shares	(17,043		)	17,043			—
Payments on contingent consideration obligation	(4,468		)	—			(4,468		)
Proceeds from the sale of treasury stock in connection with an employee stock purchase plan	1,902			—			1,902
Repayments of capital lease obligations	(2,021		)	—			(2,021		)
Net cash (used in) provided by financing activities	(1,694		)	17,043			15,349
Effect of exchange rate changes on cash	(350		)	—			(350		)
Net increase in cash and cash equivalents	(88,333		)	238			(88,095		)
Cash and cash equivalents at beginning of period	235,967			—			235,967
Cash and cash equivalents at end of period	$	147,634		$	238		$	147,872

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	29,868					$	29,868
Cash paid for interest	$	5,791					$	5,791

* Note there was no effect of early adopting ASU Topic 230

See accompanying notes to consolidated financial statements.