ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Canada | 98-0154400 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
275 Frank Tompa Drive, Waterloo, Ontario, Canada | N2L 0A1 |
(Address of principal executive offices) | (Zip code) |
Title of each class | Name of each exchange on which registered |
Common stock without par value | NASDAQ Global Select Market |
Page No | ||
Part I | ||
Item 1 | Business | |
Item 1A | Risk Factors | |
Item 1B | Unresolved Staff Comments | |
Item 2 | Properties | |
Item 3 | Legal Proceedings | |
Item 4 | Mine Safety Disclosures | |
Part II | ||
Item 5 | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |
Item 6 | Selected Financial Data | |
Item 7 | Management's Discussion and Analysis of Financial Condition and Results of Operation | |
Item 7A | Quantitative and Qualitative Disclosures about Market Risk | |
Item 8 | Financial Statements and Supplementary Data | |
Item 9 | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | |
Item 9A | Controls and Procedures | |
Item 9B | Other Information | |
Part III | ||
Item 10 | Directors, Executive Officers and Corporate Governance | |
Item 11 | Executive Compensation | |
Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
Item 13 | Certain Relationships and Related Transactions, and Director Independence | |
Item 14 | Principal Accountant Fees and Services | |
Part IV | ||
Item 15 | Exhibits and Financial Statement Schedules | |
Signatures |
i) | Increased compliance with information governance resulting in reduced exposure to risk of regulatory sanctions related to how information is handled and protected; |
ii) | Lower cost of storage and management of information through improved classification and archiving strategies; |
iii) | Reduced infrastructure costs due to, among other factors, legacy decommissioning capabilities of EIM and cloud and hosted services deployment models; |
iv) | Improved innovation, productivity and time-to-market as a result of letting employees, partners and customers work with information and collaborate in ways which are intuitive, automated, and flexible; and |
v) | Increased revenue streams with the enablement of easy expansion across new channels and, ultimately, new markets. |
• | Content Management provides a repository for business documents (such as those created with Microsoft Office, AutoCAD and Adobe Acrobat/PDF) and allows for the organizing, displaying, classifying, access control, version control, event auditing, rendition, and search of documents and other content types. |
• | Collaboration offers a range of software “tools” designed to facilitate people, teams, and partners working with each other in the context of content and business processes. These tools include project and community workspaces, real-time instant messaging, instant online meetings, screen sharing, “wikis”, polls, cloud-based file sharing, blogs, and discussion forums. |
• | Records Management enables control of the complete lifecycle of content management by associating retention and disposition rules to control if and when content can or must be deleted or archived on storage media. |
• | Email Management services are designed to enable the archiving, control, and monitoring of email, regardless of platform, to reduce the size of the email database, improve email server performance, control the lifecycle of email content, and monitor email content to improve compliance. |
• | Archiving helps reduce storage expenses through optimization of storage use. It manages content storage policies according to business context, optimizes storage use, and provides high-end storage services to reduce future storage demands. |
• | Business Process Management provides the software capabilities for analyzing, automating, monitoring and optimizing routine business processes. Customers turn to our BPM offering as an alternative to custom software development tools. BPM often involves interaction with other enterprise applications, such as those from SAP and Oracle. |
• | Dynamic Case Management (DCM) solutions combine workflow, content management, business rules, portal, and collaboration tools to collectively allow for the completion of an entire 'case' or unit of work. Instead of following |
• | Smart Process Applications are a new generation of tailored, prepackaged BPM solutions to manage both structured and unstructured processes. Each application takes advantage of process and case management, content management, capture, collaboration, analytics, customer communications, and information awareness capabilities which increase departmental (such as finance, human resources, marketing) or industry-specific (such as claims management for insurance) efficiencies. |
• | High Volume Imaging provides the software capabilities for digesting, classifying and managing high volumes of business documents in both paper and electronic format. These solutions are typically used in conjunction with highly structured process automation and content retrieval mechanisms. |
• | Strategic Business Planning and Modeling solutions deliver a complete platform for enterprise business planning, modeling, and architecture that enable customers to implement best-practice solutions to their most pressing process and information management challenges and execute on operational planning and transformation initiatives. |
• | Reporting and Analytic solutions deliver dashboard reporting capabilities designed to increase operational visibility, improve performance measurement, determine bottlenecks and identify process issues, and, ultimately, enhance overall business decision-making. |
• | Web Content Management provides software for authoring, maintaining, and administering websites designed to offer a “visitor experience” that integrates content from internal and external sources. |
• | Digital Asset Management provides a set of content management services for browsing, searching, viewing, assembling, and delivering rich media content such as images, audio and video. |
• | Social Media applications help companies “socialize” their web presence by adding blogs, wikis, ratings and reviews, and build communities for public websites and employee intranets. |
• | Customer Communications Management software uses advanced analytics capabilities that make it possible for organizations to process and deliver highly personalized documents in paper or electronic format rather than a “one message fits all” approach. |
• | Portal enables organizations to aggregate, integrate and personalize corporate information and applications and provide a central, contextualized, and personalized view of information for executives, departments, partners, and customers. |
• | Mobility Solutions provide enterprises with packaged applications for enterprise information management systems as well as a mobile application platform for customers, partners, and enterprises to create their own mobile applications and offer information search and access from smartphones, tablets, and other mobile devices. |
• | Capture systems convert documents from analog sources, such as paper or facsimile (fax), to electronic documents and apply value-added functions, such as optical / intelligent character recognition (OCR/ICR) and barcode scanning, and then release these documents into OpenText or third party repositories where they can be stored, managed, and searched. |
• | EDI Services help optimize the efficiency, reliability, and reach of an enterprise's electronic supply chain while reducing costs, infrastructure and overhead. |
• | Fax Management systems automate business fax and electronic document distribution to improve the business impact of company information, increase employee productivity and decrease paper-based operational costs. |
• | Managed File Transfer tools move large files inside and outside the enterprise to address the information governance and information security challenges of exchanging digital content and sensitive intellectual property with employees, partners and customers. |
• | Cloud-based File Sharing helps to share and synchronize files across an organization, across teams and with business partners, while leveraging the latest smartphones and tablets to provide information on the go without sacrificing information governance or security. |
• | Data Integration tools consolidate and transform data and content throughout the entire information ecosystem to increase the business impact of information and unify information channels across application boundaries. |
• | Content Analytics helps information-rich organizations to extract meaning, nuance and content from vast amounts of unstructured content. |
• | Auto Classification improves the quality of information governance through intelligent metadata extraction and accurate classification of information. |
• | Search addresses information security and productivity requirements by securely indexing all information for fast retrieval and real-time monitoring. |
• | Semantic Navigation improves the end-user experience of websites by enabling intuitive visual exploration of site content through contextual navigation. |
• | eDiscovery enables the in-sourcing of legal discovery processes through the ability to classify, analyze and extract relevant information in an automated fashion. |
• | Information Access Platform makes it possible for organizations to deal with the issue of so-called “information silos” resulting from, for instance, numerous legacy systems, multiple business applications for the same solution, in-house built systems and acquired company infrastructure. An information access platform allows organizations to consolidate, decommission, archive, migrate, or otherwise consolidate content from virtually any system or information repository. |
• | On May 23, 2013, we acquired ICCM Professional Services Limited (ICCM), a company based in Malmesbury, United Kingdom, for $18.9 million. ICCM is a provider of IT service management software solutions. |
• | On March 5, 2013, we acquired Resonate KT Limited (RKT), a company based in Cardiff, United Kingdom, for $20.0 million. RKT is a leading provider of software that enables organizations to visualize unstructured data, create new user experiences for ECM and xECM for SAP, as well as build industry-based applications that maximize unstructured data residing within Content Server, a key component of the OpenText ECM suite. |
• | On July 2, 2012, we acquired EasyLink Services International Corporation (EasyLink), a company based in Georgia, USA and a global provider of cloud-based electronic messaging and business integration services for $342.3 million. |
• | On October 31, 2011, we acquired System Solutions Australia Pty Limited (MessageManager), a software company based in Sydney, Australia for $3.3 million. MessageManager specializes in Fax over Internet Protocol (FoIP). |
• | On September 1, 2011, we acquired Operitel Corporation (Operitel), a software company based out of Peterborough, Ontario, Canada, for $7.0 million. Operitel specializes in building enterprise “Learning Portal” solutions. |
• | On July 13, 2011, we acquired Global 360 Holding Corp. (Global 360), a software company based in Dallas, Texas, for $256.6 million. Global 360 offers case management and document-centric business process management (BPM) solutions. The acquisition continued our expansion into the BPM market and added to our technology, talent, services, partner and geographical strengths. |
• | On March 15, 2011, we acquired weComm Limited (weComm), based in London, United Kingdom, for $20.5 million. weComm's software platform offers deployment of media rich applications for mobile devices, including smart phones and tablets. |
• | On February 18, 2011, we acquired Metastorm Inc. (Metastorm) for $182.0 million. Based in Baltimore, Maryland, Metastorm provides Business Process Management (BPM), Business Process Analysis (BPA), and Enterprise Architecture (EA) software that helps enterprises align their strategies with execution. |
• | On October 27, 2010, we acquired StreamServe Inc. (StreamServe), a software company based in Burlington, Massachusetts, for $70.5 million. StreamServe offers enterprise business communication solutions that help organizations process and deliver highly personalized documents in paper or electronic format. |
• | On May 27, 2010, we completed our acquisition of Burntsand Inc. (Burntsand) for $10.8 million. Burntsand, based in Toronto, Ontario, Canada, is a provider of technology consulting services for customers with complex information processing and information management requirements, focusing in particular in areas such as Enterprise Content Management, Collaboration and Service Management. |
• | On April 16, 2010, we acquired for $4.0 million the key assets of New Generation Consulting, Inc., a Chicago, Illinois based professional services company that delivers content enabled solutions to various U.S. based customers. This acquisition enhanced our professional services capabilities for content enabled solutions on Oracle business applications. |
• | On April 1, 2010, we acquired Nstein Technologies Inc. (Nstein), a software company based in Montreal, Quebec, Canada, for $33.9 million, inclusive of cash acquired, and consideration paid in OpenText shares. Nstein provides content management solutions which help enterprises centralize, understand and manage large amounts of content. Nstein's solutions include its patented “Text Mining Engine” which allows users to more easily search through different content and data. |
• | On July 21, 2009, we acquired, by way of merger, all of the issued and outstanding shares of Vignette Corporation (Vignette), an Austin, Texas based company that provides and develops software used for managing and delivering business content for $321.4 million, inclusive of cash acquired, equity consideration provided and the fair value of shares already owned prior to acquisition date. Pursuant to the terms of the merger agreement, each share of common stock of Vignette (not already owned by OpenText) issued and outstanding immediately prior to the effective date of the merger (July 21, 2009) was converted into the right to receive $8.00 in cash and 0.1447 of one OpenText common share (equivalent to a value of $5.33 as of July 21, 2009). |
• | In April 2009, we completed the acquisition of Toronto-based Vizible Corporation (Vizible), a privately held maker of digital media interface solutions for $0.9 million. The addition of Vizible expands our Digital Media solutions. |
• | In July 2008, we completed the acquisition of eMotion LLC from Corbis Corporation, for $4.4 million. This acquisition enhances our capabilities in the “digital asset management” market, providing us a broader portfolio of |
• | In July 2008, we completed the acquisition of substantially all of the assets of a division of Spicer Corporation, a privately held company that specializes in file format viewer solutions for desktop applications, integrated business process management (BPM) systems, and reprographics. We purchased the assets for $11.7 million. |
• | Changes in the demand for our software products and services and for the products and services of our competitors; |
• | The introduction or enhancement of software products and services by us and by our competitors; |
• | Market acceptance of our software products, enhancements and/or services; |
• | Delays in the introduction of software products, enhancements and/or services by us or by our competitors; |
• | Customer order deferrals in anticipation of upgrades and new software products; |
• | Changes in the lengths of sales cycles; |
• | Changes in our pricing policies or those of our competitors; |
• | Delays in software product implementation with customers; |
• | Change in the mix of distribution channels through which our software products are licensed; |
• | Change in the mix of software products and services sold; |
• | Change in the mix of international and North American revenues; |
• | Changes in foreign currency exchange rates and LIBOR rates; |
• | Acquisitions and the integration of acquired businesses; |
• | Restructuring charges taken in connection with any completed acquisition or otherwise; |
• | Changes in general economic and business conditions; and |
• | Changes in general political developments, such as international trade policies and policies taken to stimulate or to preserve national economies. |
• | Grasbrunn facility, located in Germany, totaling approximately 123,000 square feet of office and storage; |
• | Richmond Hill facility, located in Ontario, Canada, totaling approximately 101,000 square feet; |
• | Hyderabad facility, located in India, totaling approximately 99,000 square feet; |
• | Tinton Falls facility, located in New Jersey, United States, totaling approximately 90,000 square feet; |
• | Bellevue facility, located in Washington, United States, totaling approximately 55,000 square feet; |
• | Ottawa facility, located in Ontario, Canada, totaling approximately 33,000 square feet; |
• | Austin facility, located in Texas, United States, totaling approximately 32,000 square feet; |
• | Reading facility, located in Berkshire, United Kingdom, totaling approximately 30,000 square feet; |
• | Konstanz facility, located in Germany, totaling approximately 29,000 square feet; |
• | Norcross facility, located in Georgia, United States, totaling approximately 22,000 square feet; and |
• | Tokyo facility, located in Chiyoda-ku, Tokyo, Japan, totaling approximately 22,000 square feet |
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
NASDAQ (in USD) | TSX (in CAD) | |||
High | Low | High | Low | |
Fiscal Year Ended June 30, 2013: | ||||
Fourth Quarter | $73.77 | $53.62 | $75.19 | $55.01 |
Third Quarter | $60.25 | $53.53 | $60.51 | $55.10 |
Second Quarter | $58.71 | $50.51 | $58.31 | $50.12 |
First Quarter | $57.47 | $44.67 | $56.30 | $44.76 |
Fiscal Year Ended June 30, 2012: | ||||
Fourth Quarter | $62.70 | $45.27 | $62.08 | $46.63 |
Third Quarter | $62.70 | $47.99 | $62.66 | $48.67 |
Second Quarter | $61.94 | $47.52 | $62.83 | $50.55 |
First Quarter | $72.32 | $46.34 | $69.15 | $46.10 |
• | an index of companies in the software application industry which is maintained by Zacks Investment Research, which is the exclusive provider of Morningstar Industry data (herein referred to as the “Morningstar Index”); |
• | the NASDAQ Composite Index; and |
• | the S&P/TSX Composite Index. |
June 30, 2008 | June 30, 2009 | June 30, 2010 | June 30, 2011 | June 30, 2012 | June 30, 2013 | |
Open Text Corporation | $100.00 | $113.46 | $116.95 | $199.44 | $155.45 | $214.24 |
Morningstar Index | $100.00 | $78.87 | $96.55 | $138.38 | $136.32 | $159.13 |
NASDAQ Composite | $100.00 | $80.85 | $93.76 | $124.45 | $133.15 | $156.59 |
S&P/TSX Composite | $100.00 | $65.15 | $79.76 | $106.18 | $90.20 | $94.17 |
Item 6. | Selected Financial Data |
Fiscal Year Ended June 30, | |||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||
(In thousands, except per share data) | |||||||||||||||
Statement of Income Data: | |||||||||||||||
Revenues | $ | 1,363,336 | $ | 1,207,473 | $ | 1,033,303 | $ | 912,023 | $ | 785,665 | |||||
Net income | $ | 148,520 | $ | 125,174 | $ | 123,203 | $ | 89,212 | $ | 56,938 | |||||
Net income per share, basic | $ | 2.53 | $ | 2.16 | $ | 2.16 | $ | 1.59 | $ | 1.09 | |||||
Net income per share, diluted | $ | 2.51 | $ | 2.13 | $ | 2.11 | $ | 1.55 | $ | 1.07 | |||||
Weighted average number of Common Shares outstanding, basic | 58,604 | 57,890 | 57,077 | 56,280 | 52,030 | ||||||||||
Weighted average number of Common Shares outstanding, diluted | 59,062 | 58,734 | 58,260 | 57,385 | 53,271 |
As of June 30, | |||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||
Balance Sheet Data: | |||||||||||||||
Total assets | $ | 2,654,817 | $ | 2,444,293 | $ | 1,932,363 | $ | 1,715,682 | $ | 1,507,236 | |||||
Long-term liabilities * | $ | 789,726 | $ | 788,107 | $ | 477,545 | $ | 404,912 | $ | 500,070 | |||||
Cash dividends per Common Share | $ | 0.30 | $ | — | $ | — | $ | — | $ | — |
• | Total revenue was $1,363.3 million, up 12.9% from Fiscal 2012. |
• | License revenue was $279.6 million, down 4.8% from Fiscal 2012. |
• | GAAP-based EPS, diluted, was $2.51 compared to $2.13 in Fiscal 2012. |
• | Non-GAAP-based EPS, diluted, was $5.57 compared to $4.60 in Fiscal 2012. |
• | GAAP-based operating margin was 14.5% compared to 12.4% in Fiscal 2012. |
• | Non-GAAP-based operating margin was 29.3% compared to 27.3% in Fiscal 2012. |
• | Operating cash flow was $318.5 million, up 19.5% from Fiscal 2012. |
• | Cash and cash equivalents was $470.4 million as of June 30, 2013, compared to $559.7 million as of June 30, 2012. |
• | During Fiscal 2013 we declared our first ever quarterly dividend at the rate of $0.30 per Common Share, equivalent to a cash payout of approximately $17 million. |
• | On May 23, 2013, we acquired ICCM Professional Services Limited (ICCM), a provider of IT service management software solutions, based in Malmesbury, United Kingdom, for $18.9 million. |
• | On March 5, 2013, we acquired Resonate KT Limited (RKT), a company based in Cardiff, United Kingdom, for $20.0 million. RKT is a leading provider of software that enables organizations to visualize unstructured data, create new user experiences for ECM and xECM for SAP, as well as build industry based applications that maximize unstructured data residing within Content Server, a key component of the OpenText ECM suite. |
• | On July 2, 2012, we acquired EasyLink Services International Corporation (EasyLink), a company based in Georgia, USA and a global provider of cloud-based electronic messaging and business integration services for $342.3 million. |
(i) | Revenue recognition, |
(ii) | Goodwill, |
(iii) | Acquired intangibles, |
(iv) | Restructuring charges, |
(v) | Business combinations, |
(vi) | Foreign currency, and |
(vii) | Income taxes. |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Total Revenues by Product Type: | ||||||||||||||||||||
License | $ | 279,598 | $ | (14,121 | ) | $ | 293,719 | $ | 24,517 | $ | 269,202 | |||||||||
Cloud services | 173,799 | 173,799 | — | — | — | |||||||||||||||
Customer support | 658,216 | 1,648 | 656,568 | 96,027 | 560,541 | |||||||||||||||
Professional service and other | 251,723 | (5,463 | ) | 257,186 | 53,626 | 203,560 | ||||||||||||||
Total revenues | 1,363,336 | 155,863 | 1,207,473 | 174,170 | 1,033,303 | |||||||||||||||
Total Cost of Revenues | 485,904 | 67,886 | 418,018 | 76,998 | 341,020 | |||||||||||||||
Total GAAP-based Gross Profit | 877,432 | 87,977 | 789,455 | 97,172 | 692,283 | |||||||||||||||
Total GAAP-based Gross Margin % | 64.4 | % | 65.4 | % | 67.0 | % | ||||||||||||||
Total GAAP-based Operating Expenses | 679,767 | 39,672 | 640,095 | 98,417 | 541,678 | |||||||||||||||
Total GAAP-based Income from Operations | $ | 197,665 | $ | 48,305 | $ | 149,360 | $ | (1,245 | ) | $ | 150,605 | |||||||||
% Revenues by Product Type: | ||||||||||||||||||||
License | 20.5 | % | 24.3 | % | 26.1 | % | ||||||||||||||
Cloud services | 12.7 | % | — | % | — | % | ||||||||||||||
Customer support | 48.3 | % | 54.4 | % | 54.2 | % | ||||||||||||||
Professional service and other | 18.5 | % | 21.3 | % | 19.7 | % | ||||||||||||||
Total Cost of Revenues by Product Type: | ||||||||||||||||||||
License | $ | 16,107 | $ | (1,926 | ) | $ | 18,033 | $ | (251 | ) | $ | 18,284 | ||||||||
Cloud services | 72,365 | 72,365 | — | — | — | |||||||||||||||
Customer support | 106,948 | (3,556 | ) | 110,504 | 23,670 | 86,834 | ||||||||||||||
Professional service and other | 196,874 | (8,035 | ) | 204,909 | 37,055 | 167,854 | ||||||||||||||
Amortization of acquired technology-based intangible assets | 93,610 | 9,038 | 84,572 | 16,524 | 68,048 | |||||||||||||||
Total cost of revenues | $ | 485,904 | $ | 67,886 | $ | 418,018 | $ | 76,998 | $ | 341,020 | ||||||||||
% GAAP-based Gross Margin by Product Type: | ||||||||||||||||||||
License | 94.2 | % | 93.9 | % | 93.2 | % | ||||||||||||||
Cloud services | 58.4 | % | N/A | N/A | ||||||||||||||||
Customer support | 83.8 | % | 83.2 | % | 84.5 | % | ||||||||||||||
Professional service and other | 21.8 | % | 20.3 | % | 17.5 | % | ||||||||||||||
Total Revenues by Geography: | ||||||||||||||||||||
Americas (1) | $ | 734,586 | $ | 99,126 | $ | 635,460 | $ | 90,739 | $ | 544,721 | ||||||||||
EMEA (2) | 492,906 | 18,488 | 474,418 | 55,069 | 419,349 | |||||||||||||||
Asia Pacific(3) | 135,844 | 38,249 | 97,595 | 28,362 | 69,233 | |||||||||||||||
Total revenues | $ | 1,363,336 | $ | 155,863 | $ | 1,207,473 | $ | 174,170 | $ | 1,033,303 | ||||||||||
% Revenues by Geography: | ||||||||||||||||||||
Americas (1) | 53.9 | % | 52.6 | % | 52.7 | % | ||||||||||||||
EMEA (2) | 36.1 | % | 39.3 | % | 40.6 | % | ||||||||||||||
Asia Pacific (3) | 10.0 | % | 8.1 | % | 6.7 | % | ||||||||||||||
Year Ended June 30, | ||||||||||||||||
(In thousands) | 2013 | 2012 | 2011 | |||||||||||||
GAAP-based gross margin | 64.4 | % | 65.4 | % | 67.0 | % | ||||||||||
GAAP-based operating margin | 14.5 | % | 12.4 | % | 14.6 | % | ||||||||||
GAAP-based EPS, diluted | $ | 2.51 | $ | 2.13 | $ | 2.11 | ||||||||||
Non-GAAP-based gross margin (4) | 71.3 | % | 72.5 | % | 73.6 | % | ||||||||||
Non-GAAP-based operating margin (4) | 29.3 | % | 27.3 | % | 27.5 | % | ||||||||||
Non-GAAP-based EPS, diluted (4) | $ | 5.57 | $ | 4.60 | $ | 4.07 |
(1) | Americas primarily consists of countries in North, Central and South America. |
(2) | EMEA primarily consists of countries in Europe, Africa and the United Arab Emirates. |
(3) | Asia Pacific primarily consists of the countries Japan, Australia, Hong Kong, Singapore and New Zealand |
(4) | See "Use of Non-GAAP Financial Measures" (discussed later in the MD&A) for a reconciliation of Non-GAAP-based measures to GAAP-based measures |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
License Revenues: | ||||||||||||||||||||
Americas | $ | 133,936 | $ | (11,757 | ) | $ | 145,693 | $ | 5,738 | $ | 139,955 | |||||||||
EMEA | 116,208 | (4,645 | ) | 120,853 | 10,114 | 110,739 | ||||||||||||||
Asia Pacific | 29,454 | 2,281 | 27,173 | 8,665 | 18,508 | |||||||||||||||
Total License Revenues | 279,598 | (14,121 | ) | 293,719 | 24,517 | 269,202 | ||||||||||||||
Cost of License Revenues | 16,107 | (1,926 | ) | 18,033 | (251 | ) | 18,284 | |||||||||||||
GAAP-based License Gross Profit | $ | 263,491 | $ | (12,195 | ) | $ | 275,686 | $ | 24,768 | $ | 250,918 | |||||||||
GAAP-based License Gross Margin % | 94.2 | % | 93.9 | % | 93.2 | % | ||||||||||||||
% License Revenues by Geography: | ||||||||||||||||||||
Americas | 47.9 | % | 49.6 | % | 52.0 | % | ||||||||||||||
EMEA | 41.6 | % | 41.1 | % | 41.1 | % | ||||||||||||||
Asia Pacific | 10.5 | % | 9.3 | % | 6.9 | % |
Year Ended June 30, | |||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | ||||||||||||||
Cloud Services: | |||||||||||||||||||
Americas | $ | 112,725 | N/A | N/A | — | N/A | |||||||||||||
EMEA | 26,248 | N/A | N/A | — | N/A | ||||||||||||||
Asia Pacific | 34,826 | N/A | N/A | — | N/A | ||||||||||||||
Total Cloud Services Revenues | 173,799 | — | — | — | — | ||||||||||||||
Cost of Cloud Services Revenues | 72,365 | N/A | N/A | — | N/A | ||||||||||||||
GAAP-based Cloud Services Gross Profit | $ | 101,434 | $ | — | $ | — | — | $ | — | ||||||||||
GAAP-based Cloud Services Gross Margin % | 58.4 | % | N/A | N/A | |||||||||||||||
% Cloud Services Revenues by Geography: | |||||||||||||||||||
Americas | 64.9 | % | N/A | N/A | |||||||||||||||
EMEA | 15.1 | % | N/A | N/A | |||||||||||||||
Asia Pacific | 20.0 | % | N/A | N/A |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Customer Support Revenues: | ||||||||||||||||||||
Americas | $ | 354,859 | $ | 1,888 | $ | 352,971 | $ | 53,285 | $ | 299,686 | ||||||||||
EMEA | 251,543 | (2,996 | ) | 254,539 | 31,617 | 222,922 | ||||||||||||||
Asia Pacific | 51,814 | 2,756 | 49,058 | 11,125 | 37,933 | |||||||||||||||
Total Customer Support Revenues | 658,216 | 1,648 | 656,568 | 96,027 | 560,541 | |||||||||||||||
Cost of Customer Support Revenues | 106,948 | (3,556 | ) | 110,504 | 23,670 | 86,834 | ||||||||||||||
GAAP-based Customer Support Gross Profit | $ | 551,268 | $ | 5,204 | $ | 546,064 | $ | 72,357 | $ | 473,707 | ||||||||||
GAAP-based Customer Support Gross Margin % | 83.8 | % | 83.2 | % | 84.5 | % | ||||||||||||||
% Customer Support Revenues by Geography: | ||||||||||||||||||||
Americas | 53.9 | % | 53.8 | % | 53.5 | % | ||||||||||||||
EMEA | 38.2 | % | 38.8 | % | 39.8 | % | ||||||||||||||
Asia Pacific | 7.9 | % | 7.4 | % | 6.7 | % |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Professional Service and Other Revenues: | ||||||||||||||||||||
Americas | $ | 133,074 | $ | (3,722 | ) | $ | 136,796 | $ | 31,716 | $ | 105,080 | |||||||||
EMEA | 98,899 | (127 | ) | 99,026 | 13,338 | 85,688 | ||||||||||||||
Asia Pacific | 19,750 | (1,614 | ) | 21,364 | 8,572 | 12,792 | ||||||||||||||
Total Professional Service and Other Revenues | 251,723 | (5,463 | ) | 257,186 | 53,626 | 203,560 | ||||||||||||||
Cost of Professional Service and Other Revenues | 196,874 | (8,035 | ) | 204,909 | 37,055 | 167,854 | ||||||||||||||
GAAP-based Professional Service and Other Gross Profit | $ | 54,849 | $ | 2,572 | $ | 52,277 | $ | 16,571 | $ | 35,706 | ||||||||||
GAAP-based Professional Service and Other Gross Margin % | 21.8 | % | 20.3 | % | 17.5 | % | ||||||||||||||
% Professional Service and Other Revenues by Geography: | ||||||||||||||||||||
Americas | 52.9 | % | 53.2 | % | 51.6 | % | ||||||||||||||
EMEA | 39.3 | % | 38.5 | % | 42.1 | % | ||||||||||||||
Asia Pacific | 7.8 | % | 8.3 | % | 6.3 | % |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Amortization of acquired technology-based intangible assets | $ | 93,610 | $ | 9,038 | $ | 84,572 | $ | 16,524 | $ | 68,048 |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Research and development | $ | 164,010 | $ | (5,033 | ) | $ | 169,043 | $ | 23,051 | $ | 145,992 | |||||||||
Sales and marketing | 289,157 | 14,613 | 274,544 | 42,212 | 232,332 | |||||||||||||||
General and administrative | 109,325 | 12,253 | 97,072 | 10,376 | 86,696 | |||||||||||||||
Depreciation | 24,496 | 2,909 | 21,587 | (529 | ) | 22,116 | ||||||||||||||
Amortization of acquired customer-based intangible assets | 68,745 | 15,419 | 53,326 | 14,360 | 38,966 | |||||||||||||||
Special charges | 24,034 | (489 | ) | 24,523 | 8,947 | 15,576 | ||||||||||||||
Total operating expenses | $ | 679,767 | $ | 39,672 | $ | 640,095 | $ | 98,417 | $ | 541,678 | ||||||||||
% of Total Revenues: | ||||||||||||||||||||
Research and development | 12.0 | % | 14.0 | % | 14.1 | % | ||||||||||||||
Sales and marketing | 21.2 | % | 22.7 | % | 22.5 | % | ||||||||||||||
General and administrative | 8.0 | % | 8.0 | % | 8.4 | % | ||||||||||||||
Depreciation | 1.8 | % | 1.8 | % | 2.1 | % | ||||||||||||||
Amortization of acquired customer-based intangible assets | 5.0 | % | 4.4 | % | 3.8 | % | ||||||||||||||
Special charges | 1.8 | % | 2.0 | % | 1.5 | % |
Year-over-Year Change between Fiscal | ||||||||
(In thousands) | 2013 and 2012 | 2012 and 2011 | ||||||
Payroll and payroll-related benefits | $ | (594 | ) | $ | 17,875 | |||
Contract labour and consulting | (4,715 | ) | (295 | ) | ||||
Share based compensation | (2,106 | ) | 1,325 | |||||
Travel and communication | (1,453 | ) | (27 | ) | ||||
Facilities | (2,874 | ) | 3,716 | |||||
Other miscellaneous | 6,709 | 457 | ||||||
Total year-over-year change in research and development expenses | $ | (5,033 | ) | $ | 23,051 |
Year-over-Year Change between Fiscal | ||||||||
(In thousands) | 2013 and 2012 | 2012 and 2011 | ||||||
Payroll and payroll-related benefits | $ | 16,632 | $ | 24,721 | ||||
Commissions | (16,385 | ) | 8,836 | |||||
Contract labour and consulting | (2,258 | ) | (837 | ) | ||||
Share based compensation | (361 | ) | 3,244 | |||||
Travel and communication | 2,459 | 3,391 | ||||||
Marketing expenses | 13,148 | 1,388 | ||||||
Facilities | 2,739 | 2,274 | ||||||
Other miscellaneous | (1,361 | ) | (805 | ) | ||||
Total year-over-year change in sales and marketing expenses | $ | 14,613 | $ | 42,212 |
Year-over-Year Change between Fiscal | ||||||||
(In thousands) | 2013 and 2012 | 2012 and 2011 | ||||||
Payroll and payroll-related benefits | $ | 8,040 | $ | 6,881 | ||||
Contract labour and consulting | (1,359 | ) | (350 | ) | ||||
Share based compensation | (593 | ) | 1,882 | |||||
Travel and communication | 3,052 | 167 | ||||||
Facilities | (1,569 | ) | 331 | |||||
Other miscellaneous | 4,682 | 1,465 | ||||||
Total year-over-year change in general and administrative expenses | $ | 12,253 | $ | 10,376 |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Depreciation | $ | 24,496 | $ | 2,909 | $ | 21,587 | $ | (529 | ) | $ | 22,116 |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Amortization of acquired customer-based intangible assets | $ | 68,745 | $ | 15,419 | $ | 53,326 | $ | 14,360 | $ | 38,966 |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Special charges | $ | 24,034 | $ | (489 | ) | $ | 24,523 | $ | 8,947 | $ | 15,576 |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Other income (expense), net | $ | (2,473 | ) | $ | (6,022 | ) | $ | 3,549 | $ | 9,568 | $ | (6,019 | ) |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Interest expense, net | $ | 16,982 | $ | 1,418 | $ | 15,564 | $ | 7,112 | $ | 8,452 |
Year Ended June 30, | ||||||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||||||
Provision for income taxes | $ | 29,690 | $ | 17,519 | $ | 12,171 | $ | (760 | ) | $ | 12,931 |
Year ended June 30, 2013 | ||||||||||||
GAAP-based Measures | GAAP-based Measures % of Revenue | Adjustments | Note | Non-GAAP-based Measures | Non-GAAP-based Measures % of Revenue | |||||||
Cost of revenues | ||||||||||||
Cloud services | $ | 72,365 | $ | (128 | ) | (1) | $ | 72,237 | ||||
Customer support | 106,948 | (434 | ) | (1) | 106,514 | |||||||
Professional service and other | 196,874 | (915 | ) | (1) | 195,959 | |||||||
Amortization of acquired technology-based intangible assets | 93,610 | (93,610 | ) | (2) | — | |||||||
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) | 877,432 | 64.4% | 95,087 | (3) | 972,519 | 71.3% | ||||||
Operating Expenses | ||||||||||||
Research and development | 164,010 | (1,693 | ) | (1) | 162,317 | |||||||
Sales and marketing | 289,157 | (8,429 | ) | (1) | 280,728 | |||||||
General and administrative | 109,325 | (3,976 | ) | (1) | 105,349 | |||||||
Amortization of acquired customer-based intangible assets | 68,745 | (68,745 | ) | (2) | — | |||||||
Special charges | 24,034 | (24,034 | ) | (4) | — | |||||||
GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%) | 197,665 | 14.5% | 201,964 | (5) | 399,629 | 29.3% | ||||||
Other income (expense), net | (2,473 | ) | 2,473 | (6) | — | |||||||
Provision for (recovery of) income taxes | 29,690 | 23,881 | (7) | 53,571 | ||||||||
GAAP-based net income / Non-GAAP-based net income | 148,520 | 180,556 | (8) | 329,076 | ||||||||
GAAP-based earnings per share / Non GAAP-based earnings per share-diluted | $ | 2.51 | $ | 3.06 | (8) | $ | 5.57 |
(1) | Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results. |
(2) | Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results. |
(3) | GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue. |
(4) | Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the periods following the acquisitions and are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results. |
(5) | GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue. |
(6) | Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. |
(7) | Adjustment relates to differences between the GAAP-based tax provision (recovery) and a non-GAAP-based tax rate; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income. |
(8) | Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income: |
Year ended June 30, 2013 | ||||||
Per share diluted | ||||||
Non-GAAP-based net income | $ | 329,076 | $ | 5.57 | ||
Less: | ||||||
Amortization | 162,355 | 2.75 | ||||
Share-based compensation | 15,575 | 0.26 | ||||
Special charges | 24,034 | 0.41 | ||||
Other (income) expense, net | 2,473 | 0.04 | ||||
GAAP-based provision for (recovery of) income taxes | 29,690 | 0.50 | ||||
Non-GAAP based provision for income taxes | (53,571 | ) | (0.90 | ) | ||
GAAP-based net income | $ | 148,520 | $ | 2.51 |
Year ended June 30, 2012 | ||||||||||||
GAAP-based Measures | GAAP-based Measures % of Revenue | Adjustments | Note | Non-GAAP-based Measures | Non-GAAP-based Measures % of Revenue | |||||||
Cost of revenues | ||||||||||||
Customer support | $ | 110,504 | $ | (169 | ) | (1) | $ | 110,335 | ||||
Professional service and other | 204,909 | (647 | ) | (1) | 204,262 | |||||||
Amortization of acquired technology-based intangible assets | 84,572 | (84,572 | ) | (2) | — | |||||||
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) | 789,455 | 65.4% | 85,388 | (3) | 874,843 | 72.5% | ||||||
Operating Expenses | ||||||||||||
Research and development | 169,043 | (3,939 | ) | (1) | 165,104 | |||||||
Sales and marketing | 274,544 | (8,811 | ) | (1) | 265,733 | |||||||
General and administrative | 97,072 | (4,531 | ) | (1) | 92,541 | |||||||
Amortization of acquired customer-based intangible assets | 53,326 | (53,326 | ) | (2) | — | |||||||
Special charges | 24,523 | (24,523 | ) | (4) | — | |||||||
GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%) | 149,360 | 12.4% | 180,518 | (5) | 329,878 | 27.3% | ||||||
Other income (expense), net | 3,549 | (3,549 | ) | (6) | — | |||||||
Provision for (recovery of) income taxes | 12,171 | 31,833 | (7) | 44,004 | ||||||||
GAAP-based net income / Non-GAAP-based net income | 125,174 | 145,136 | (8) | 270,310 | ||||||||
GAAP-based earnings per share / Non GAAP-based earnings per share-diluted | $ | 2.13 | $ | 2.47 | (8) | $ | 4.60 |
(1) | Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results. |
(2) | Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results. |
(3) | GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue. |
(4) | Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the periods following the acquisitions and are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results. |
(5) | GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue. |
(6) | Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. |
(7) | Adjustment relates to differences between the GAAP-based tax provision (recovery) and a non-GAAP-based tax rate; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income. |
(8) | Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income: |
Year ended June 30, 2012 | ||||||
Per share diluted | ||||||
Non-GAAP-based net income | $ | 270,310 | $ | 4.60 | ||
Less: | ||||||
Amortization | 137,898 | 2.35 | ||||
Share-based compensation | 18,097 | 0.31 | ||||
Special charges | 24,523 | 0.42 | ||||
Other (income) expense, net | (3,549 | ) | (0.06 | ) | ||
GAAP-based provision for (recovery of) income taxes | 12,171 | 0.21 | ||||
Non-GAAP based provision for income taxes | (44,004 | ) | (0.76 | ) | ||
GAAP-based net income | $ | 125,174 | $ | 2.13 |
Year ended June 30, 2011 | ||||||||||||
GAAP-based Measures | GAAP-based Measures % of Revenue | Adjustments | Note | Non-GAAP-based Measures | Non-GAAP-based Measures % of Revenue | |||||||
Cost of revenues | ||||||||||||
Customer support | $ | 86,834 | $ | (47 | ) | (1) | $ | 86,787 | ||||
Professional service and other | 167,854 | (432 | ) | (1) | 167,422 | |||||||
Amortization of acquired technology-based intangible assets | 68,048 | (68,048 | ) | (2) | — | |||||||
GAAP-based gross profit and gross margin (%) / Non-GAAP-based gross profit and gross margin (%) | 692,283 | 67.0% | 68,527 | (3) | 760,810 | 73.6% | ||||||
Operating Expenses | ||||||||||||
Research and development | 145,992 | (2,614 | ) | (1) | 143,378 | |||||||
Sales and marketing | 232,332 | (5,568 | ) | (1) | 226,764 | |||||||
General and administrative | 86,696 | (2,648 | ) | (1) | 84,048 | |||||||
Amortization of acquired customer-based intangible assets | 38,966 | (38,966 | ) | (2) | — | |||||||
Special charges | 15,576 | (15,576 | ) | (4) | — | |||||||
GAAP-based income from operations and operating margin (%) / Non-GAAP-based income from operations and operating margin (%) | 150,605 | 14.6% | 133,899 | (5) | 284,504 | 27.5% | ||||||
Other income (expense), net | (6,019 | ) | 6,019 | (6) | — | |||||||
Provision for (recovery of) income taxes | 12,931 | 25,716 | (7) | 38,647 | ||||||||
GAAP-based net income / Non-GAAP-based net income | 123,203 | 114,202 | (8) | 237,405 | ||||||||
GAAP-based earnings per share / Non GAAP-based earnings per share-diluted | $ | 2.11 | $ | 1.96 | (8) | $ | 4.07 |
(1) | Adjustment relates to the exclusion of share based compensation expense from our non-GAAP-based operating expenses as this expense is excluded from our internal analysis of operating results. |
(2) | Adjustment relates to the exclusion of amortization expense from our non-GAAP-based operating expenses as the timing and frequency of amortization expense is dependent on our acquisitions and is hence excluded from our internal analysis of operating results. |
(3) | GAAP-based and Non GAAP-based gross profit stated in dollars, and gross margin stated as a percentage of revenue. |
(4) | Adjustment relates to the exclusion of Special charges from our non-GAAP-based operating expenses as Special charges are generally incurred in the periods following the acquisitions and are not indicative or related to continuing operations and are therefore excluded from our internal analysis of operating results. |
(5) | GAAP-based and Non GAAP-based income from operations stated in dollars, and operating margin stated as a percentage of revenue. |
(6) | Adjustment relates to the exclusion of Other income (expense) from our non-GAAP-based operating expenses as Other income (expense) relates primarily to the transactional impact of foreign exchange and is generally not indicative or related to continuing operations and is therefore excluded from our internal analysis of operating results. |
(7) | Adjustment relates to differences between the GAAP-based tax provision (recovery) and a non-GAAP-based tax rate; these rate differences are due to the income tax effects of expenses that are excluded for the purpose of calculating non-GAAP-based adjusted net income. |
(8) | Reconciliation of non-GAAP-based adjusted net income to GAAP-based net income: |
Year ended June 30, 2011 | ||||||
Per share diluted | ||||||
Non-GAAP-based net income | $ | 237,405 | $ | 4.07 | ||
Less: | ||||||
Amortization | 107,014 | 1.84 | ||||
Share-based compensation | 11,309 | 0.19 | ||||
Special charges | 15,576 | 0.27 | ||||
Other (income) expense, net | 6,019 | 0.10 | ||||
GAAP-based provision for (recovery of) income taxes | 12,931 | 0.22 | ||||
Non-GAAP based provision for income taxes | (38,647 | ) | (0.66 | ) | ||
GAAP-based net income | $ | 123,203 | $ | 2.11 |
As of June 30, | ||||||||||||||||
(In thousands) | 2013 | Change increase (decrease) | 2012 | Change increase (decrease) | 2011 | |||||||||||
Cash and cash equivalents | $ | 470,445 | $ | (89,302 | ) | $ | 559,747 | $ | 275,607 | $ | 284,140 |
Year Ended June 30, | ||||||||||||||||
(In thousands) | 2013 | Change | 2012 | Change | 2011 | |||||||||||
Cash provided by operating activities | $ | 318,502 | $ | 52,012 | $ | 266,490 | $ | 43,269 | $ | 223,221 | ||||||
Cash used in investing activities | $ | (374,394 | ) | $ | (92,855 | ) | $ | (281,539 | ) | $ | 5,729 | $ | (287,268 | ) | ||
Cash provided by (used in) financing activities | $ | (31,118 | ) | $ | (333,702 | ) | $ | 302,584 | $ | 305,287 | $ | (2,703 | ) |
Fiscal years ending June 30, | |||
2014 | $ | 535 | |
2015 | 591 | ||
2016 | 654 | ||
2017 | 728 | ||
2018 | 780 | ||
2019 to 2023 | 5,137 | ||
Total | $ | 8,425 |
Payments due between | |||||||||||||||||||
(In thousands) | Total | Period ending June 30, 2014 | July 1, 2014— June 30, 2016 | July 1, 2016— June 30, 2018 | July 1, 2018 and beyond | ||||||||||||||
Long-term debt obligations | $ | 604,886 | $ | 65,092 | $ | 124,367 | $ | 415,427 | $ | — | |||||||||
Operating lease obligations* | 157,876 | 35,894 | 56,032 | 33,496 | 32,454 | ||||||||||||||
Purchase obligations | 7,778 | 4,605 | 2,864 | 309 | — | ||||||||||||||
$ | 770,540 | $ | 105,591 | $ | 183,263 | $ | 449,232 | $ | 32,454 |
(In thousands) | U.S. Dollar Equivalent at June 30, | |||||||
2013 | 2012 | |||||||
Canadian Dollar | $ | 7,942 | $ | 16,050 | ||||
Swiss Franc | 6,303 | 9,560 | ||||||
Euro | 102,104 | 71,560 | ||||||
British Pound | 24,925 | 11,350 | ||||||
Other foreign currencies | 59,959 | 27,597 | ||||||
Total cash and cash equivalents denominated in foreign currencies | 201,233 | 136,117 | ||||||
U.S. dollar | 269,212 | 423,630 | ||||||
Total cash and cash equivalents | $ | 470,445 | $ | 559,747 |
Name | Age | Office and Position Currently Held With Company |
P. Thomas Jenkins* | 53 | Chairman of the Board |
Mark J. Barrenechea | 48 | President and Chief Executive Officer, Director |
Paul McFeeters | 58 | Chief Financial Officer and Chief Administrative Officer |
Randy Fowlie (2)(3) | 53 | Director |
Brian J. Jackman (1) | 72 | Director |
Stephen J. Sadler | 62 | Director |
Michael Slaunwhite (1)(3) | 52 | Director |
Gail E. Hamilton (2) | 63 | Director |
Katharine B. Stevenson (2) | 51 | Director |
Deborah Weinstein (1)(3) | 53 | Director |
Gordon A. Davies | 51 | Chief Legal Officer and Corporate Secretary |
Sujeet Kini | 51 | Chief Accounting Officer |
Kevin Cochrane | 40 | Chief Marketing Officer |
James McGourlay | 44 | Senior Vice President, Worldwide Customer Service |
Gary Weiss | 46 | Senior Vice President, Portfolio Group |
James Mackey | 42 | Senior Vice President, Corporate Development |
Walter Kohler | 49 | Senior Vice President, Worldwide Professional Services |
Muhi Majzoub | 53 | SVP, Engineering |
Manuel Sousa | 54 | SVP, Global Human Resources |
* | Effective August 1, 2013, Mr. Jenkins' title is Chairman of the Board. For more details, see Item 9B of this Annual Report on Form 10-K. |
(1) | Member of the Compensation Committee. |
(2) | Member of the Audit Committee. |
(3) | Member of the Corporate Governance and Nominating Committee. |
• | Mark Barrenechea - President and Chief Executive Officer (CEO) |
• | Paul McFeeters - Chief Financial Officer and Chief Administrative Officer (CFO) |
• | P. Thomas Jenkins - Executive Chairman and Chief Strategy Officer (Executive Chairman)* |
• | James Mackey - Senior Vice President, Corporate Development |
• | Gordon A. Davies - Chief Legal Officer and Corporate Secretary |
• | Executive Compensation Review - In April 2012, Mercer benchmarked our compensation practices and policies with respect to our eleven most senior positions against similar-sized Canadian and U.S. technology companies in order to allow us to place our compensation practices for these eleven positions in a market context. This benchmarking included a review of base salary, short-term incentives, total cash compensation levels, long-term incentives and total direct compensation. See below for a more detailed discussion of the peer group used for this benchmarking. This information was used to inform compensation decisions in Fiscal 2013. |
• | Long-Term Incentive Plan - Mercer provided assistance in reviewing our existing Long-Term Incentive Plan (LTIP) and assisted in the development of the sixth phase of our LTIP, including confirmation of the constituent companies to be included in the performance peer group. Similar to the previous fiscal year, Mercer was asked to review our granting practices under the LTIP and compare these granting practices to the grants made under other long-term incentive plans implemented by comparable companies throughout North America. |
• | Share Ownership Guidelines - Mercer provided market research assistance in reviewing the reasonableness of our executive share ownership guidelines with respect to levels and the time to achieve them. Mercer was asked to review our share ownership guidelines relative to those of comparable companies throughout North America. |
(in thousands) | Fiscal 2013 | Fiscal 2012 | ||||
Executive Compensation | $ | 137 | $ | 114 | ||
Other Services | $ | 315 | $ | 228 |
• | Strong link to business strategy - Our short and long-term goals should be reflected in our overall compensation program; |
• | Performance sensitive - Compensation should be linked to the operating and market performance of our organization and should fluctuate with such performance; and |
• | Market relevant - Our compensation program should provide market competitive pay in terms of value and structure in order to retain current employees who are performing according to their objectives and to attract new recruits of the highest caliber. |
• | Attract and retain highly qualified executive officers who have a history of proven success; |
• | Align the interests of executive officers with our shareholders' interests and with the execution of our business strategy; |
• | Evaluate executive performance on the basis of key financial measurements which we believe closely correlate to long-term shareholder value; and |
• | Tie compensation awards directly to key financial measurements with evaluations based on achieving and overachieving predetermined objectives. |
• | Competitive compensation; and |
• | An appropriate mix and level of short-term and long-term financial incentives. |
All values in $US millions | Period Ending February 28, 2012 (4) | |||||||||||||||
Company Name | S&P (1) | Revenue (2) | Mkt. Cap. (3) | Net Income | 1-yr TSR | 3-yr TSR | 5-yr TSR | |||||||||
Synopsys Inc. | Y | $ | 1,536 | $ | 4,389 | $ | 221 | 10 | % | 18 | % | 4 | % | |||
Gartner Inc. | Y | $ | 1,469 | $ | 3,759 | $ | 137 | 7 | % | 59 | % | 14 | % | |||
Nuance Communications Inc. | $ | 1,319 | $ | 7,989 | $ | 38 | 39 | % | 43 | % | 13 | % | ||||
Verifone Systems Inc. | Y | $ | 1,310 | $ | 5,113 | $ | 282 | 5 | % | 123 | % | 4 | % | |||
Teletech Holdings Inc. | $ | 1,179 | $ | 865 | $ | 74 | (33 | )% | 21 | % | (13 | )% | ||||
Parametric Technology Corp. | Y | $ | 1,170 | $ | 3,180 | $ | 85 | 13 | % | 49 | % | 7 | % | |||
Akamai Technologies Inc. | $ | 1,159 | $ | 6,408 | $ | 201 | (4 | )% | 26 | % | (7 | )% | ||||
Cadence Design Systems Inc. | Y | $ | 1,150 | $ | 3,225 | $ | 72 | 18 | % | 41 | % | (10 | )% | |||
Sapient Corp. | $ | 1,062 | $ | 1,752 | $ | 74 | 9 | % | 52 | % | 17 | % | ||||
Monster Worldwide Inc. | Y | $ | 1,043 | $ | 854 | $ | 54 | (60 | )% | 2 | % | (33 | )% | |||
Rackspace Hosting Inc. | Y | $ | 1,025 | $ | 6,894 | $ | 76 | 42 | % | 113 | % | n/a | ||||
Mentor Graphics Corp. | Y | $ | 1,015 | $ | 1,659 | $ | 84 | (5 | )% | 51 | % | (2 | )% | |||
Micros Systems Inc. | Y | $ | 1,008 | $ | 4,151 | $ | 144 | 9 | % | 48 | % | 13 | % | |||
Henry (Jack) & Associates | Y | $ | 967 | $ | 2,928 | $ | 137 | 7 | % | 30 | % | 9 | % | |||
Maximus Inc. | $ | 930 | $ | 1,407 | $ | 81 | 14 | % | 33 | % | 24 | % | ||||
Compuware Corp. | $ | 929 | $ | 1,969 | $ | 107 | (20 | )% | 15 | % | — | % | ||||
Tibco Software Inc. | Y | $ | 920 | $ | 4,827 | $ | 112 | 18 | % | 82 | % | 26 | % | |||
Red Hat Inc. | $ | 909 | $ | 9,553 | $ | 107 | 20 | % | 53 | % | 17 | % | ||||
Quest Software Inc. | Y | $ | 857 | $ | 1,670 | $ | 44 | (25 | )% | 21 | % | 4 | % | |||
Informatica Corp. | Y | $ | 784 | $ | 5,278 | $ | 117 | 5 | % | 56 | % | 31 | % | |||
75th %ile | $ | 1,172 | $ | 5,154 | $ | 137 | 16 | % | 55 | % | 16 | % | ||||
50th %ile | $ | 1,034 | $ | 3,492 | $ | 96 | 7 | % | 48 | % | 8 | % | ||||
25th %ile | $ | 929 | $ | 1,731 | $ | 74 | (4 | )% | 28 | % | (2 | )% | ||||
Average | $ | 1,087 | $ | 3,893 | $ | 113 | 3 | % | 48 | % | 6 | % | ||||
Open Text Corporation (5) | $ | 1,033 | $ | 3,537 | $ | 123 | 4 | % | 25 | % | 23 | % |
(1) | Indicates that company is a constituent of the S&P Mid Cap 400 - Software & Services Index, as of December 31, 2011 |
(2) | Revenues as provided in the 2012 Executive Compensation Review |
(3) | Market Capitalization at February 28, 2012 |
(4) | TSR denotes annualized Total Shareholder Return, or change in share price adjusted for dividends |
(5) | Financial information as of June 30, 2011 |
All values in $US millions | |||
Company Name | Revenues (1) | ||
Kansas City Southern | $ | 1,815 | |
Martinrea Intl Inc. | $ | 1,689 | |
Iac/Interactivecorp | $ | 1,637 | |
Alberto-Culver Co | $ | 1,598 | |
Toll Brothers Inc | $ | 1,530 | |
Linear Technology Corp. | $ | 1,484 | |
Old Dominion Freight | $ | 1,481 | |
Ci Financial Corp. | $ | 1,378 | |
American Eqty Invt Life Hldg | $ | 1,286 | |
CCL Industries -Cl B | $ | 1,192 | |
Resmed Inc | $ | 1,092 | |
Kimco Realty Corp. | $ | 1,019 | |
Cec Entertainment Inc. | $ | 817 | |
Corus Entertainment Inc. | $ | 836 | |
Quest Software Inc. | $ | 767 | |
Lululemon Athletica Inc. | $ | 712 | |
Sunstone Hotel Investors Inc. | $ | 644 | |
Alliance Grain Traders Inc. | $ | 642 | |
Capitalsource Inc. | $ | 640 | |
Qlogic Corp. | $ | 597 | |
RLJ Lodging Trust | $ | 549 | |
New Gold Inc. | $ | 530 | |
75th %ile | $ | 1,483 | |
50th %ile | $ | 1,056 | |
25th %ile | $ | 661 | |
Average | $ | 1,088 | |
Open Text Corporation (2) | $ | 1,033 |
(1) | Companies' revenues as provided in the 2012 Executive Compensation Review |
(2) | Financial information as of June 30, 2011 |
• | Understand the competitiveness of the Company's current pay levels for each executive position relative to companies with similar revenues and business characteristics; |
• | Identify and understand any gaps that may exist between the Company's actual compensation levels and market compensation levels; and |
• | Serve as a basis for developing salary adjustments and short-term and long-term incentive award programs for the Compensation Committee's approval. |
• | Base salary; |
• | Total cash compensation (base salary + target annual incentives); and |
• | Total direct compensation (base salary + target annual incentives + target long-term compensation). |
• | Fixed salary and benefits; |
• | Variable short-term incentives; and |
• | The LTIP. |
Named Executive Officer | Fixed Salary Percentage (“Not At Risk”) | Short-Term Incentive Percentage (at 100% target) (“At Risk”) | ||
Mark Barrenechea | 44 | % | 56 | % |
Paul McFeeters | 55 | % | 45 | % |
P. Thomas Jenkins | 44 | % | 56 | % |
James Mackey | 55 | % | 45 | % |
Gordon A. Davies | 73 | % | 27 | % |
• | Base salary; |
• | Perquisites; and |
• | Other benefits. |
• | Participating in an annual executive medical physical examination; |
• | Maintaining membership in a health club; |
• | Car allowances; and |
• | Purchasing financial advice and related services. |
• | Medical health insurance; |
• | Dental insurance; |
• | Life insurance; |
• | Tuition reimbursement programs; and |
• | Tax based retirement savings plans matching contributions. |
Named Executive Officer | Total Target Award as % of Base Salary | Worldwide Revenues | Worldwide Adjusted Operating Income | Board Objectives | ||||
Mark Barrenechea | 125.00 | % | 45 | % | 45 | % | 10 | % |
Paul McFeeters | 82.35 | % | 45 | % | 45 | % | 10 | % |
P. Thomas Jenkins | 125.00 | % | 45 | % | 45 | % | 10 | % |
James Mackey | 82.86 | % | 45 | % | 45 | % | 10 | % |
Gordon A. Davies | 37.50 | % | 45 | % | 45 | % | 10 | % |
Objectives (in millions) | Threshold Target (90% target) | Target | Fiscal 2013 Actual | % of Target Actually Achieved | % of Payment per Fiscal 2013 Payout Table | ||||||||
Worldwide Revenues | $ | 1,287 | $ | 1,430 | $ | 1,363 | 95 | % | 55 | % | |||
Worldwide Adjusted Operating Income | $ | 354 | $ | 393 | $ | 400 | 102 | % | 120 | % |
Revenues and Adjusted Operating Income and Margin Calculation | |||||
% Attainment | % Payment | % Attainment | % Payment | ||
0 - 89% | 0 | % | 101% | 110 | % |
90 - 91% | 15 | % | 102% | 120 | % |
92 - 93% | 40 | % | 103% | 130 | % |
94 - 95% | 55 | % | 104% | 140 | % |
96 - 97% | 70 | % | 105% | 150 | % |
98 - 99% | 85 | % | Over 105% | 300% cap | |
100% | 100 | % | |||
Formula: | |||||
Actual / Budget = % of Attainment | Example: an attainment of 103% results in a % payment of 130% |
Performance Measure: | Payable at Target | Payable at Threshold | Actual Payable ($) | Actual Payable (% of Target) | |||||||
Worldwide Revenues | $ | 348,750 | $ | 52,313 | $ | 191,813 | 55 | % | |||
Worldwide Adjusted Operating Income | $ | 348,750 | $ | 52,313 | $ | 418,500 | 120 | % | |||
Board Objectives | $ | 77,500 | $ | 11,625 | $ | 77,500 | 100 | % | |||
Total | $ | 775,000 | $ | 116,251 | $ | 687,813 | 89 | % |
Performance Measure: | Payable at Target | Payable at Threshold | Actual Payable ($) | Actual Payable (% of Target) | |||||||
Worldwide Revenues | $ | 156,328 | $ | 23,449 | $ | 85,981 | 55 | % | |||
Worldwide Adjusted Operating Income | $ | 156,328 | $ | 23,449 | $ | 187,594 | 120 | % | |||
Board Objectives | $ | 34,740 | $ | 5,211 | $ | 34,740 | 100 | % | |||
Total | $ | 347,396 | $ | 52,109 | $ | 308,315 | 89 | % |
Performance Measure: | Payable at Target | Payable at Threshold | Actual Payable ($) | Actual Payable (% of Target) | |||||||
Worldwide Revenues | $ | 279,158 | $ | 41,874 | $ | 153,536 | 55 | % | |||
Worldwide Adjusted Operating Income | $ | 279,158 | $ | 41,874 | $ | 334,989 | 120 | % | |||
Board Objectives | $ | 62,035 | $ | 9,305 | $ | 62,035 | 100 | % | |||
Total | $ | 620,351 | $ | 93,053 | $ | 550,560 | 89 | % |
Performance Measure: | Payable at Target | Payable at Threshold | Actual Payable ($) | Actual Payable (% of Target) | |||||||
Worldwide Revenues | $ | 66,998 | $ | 10,050 | $ | 36,849 | 55 | % | |||
Worldwide Adjusted Operating Income | $ | 66,998 | $ | 10,050 | $ | 80,397 | 120 | % | |||
Board Objectives | $ | 14,888 | $ | 2,233 | $ | 14,888 | 100 | % | |||
Total | $ | 148,884 | $ | 22,333 | $ | 132,134 | 89 | % |
Performance Measure: | Payable at Target | Payable at Threshold | Actual Payable ($) | Actual Payable (% of Target) | |||||||
Worldwide Revenues | $ | 97,875 | $ | 14,681 | $ | 53,831 | 55 | % | |||
Worldwide Adjusted Operating Income | $ | 97,875 | $ | 14,681 | $ | 83,194 | 85 | % | |||
Board Objectives | $ | 21,750 | $ | 3,263 | $ | 21,750 | 100 | % | |||
Total | $ | 217,500 | $ | 32,625 | $ | 158,775 | 73 | % |
• | The Named Executive Officers and others who are entitled to participate in the stock option plan; |
• | The number of options to be granted under the plan in general and to each recipient in particular; |
• | The date on which each option is granted; and |
• | The other material terms and conditions of each stock option grant. |
• | On the second trading day for the NASDAQ market following the date on which our quarterly or annual financial results, as applicable, are released; and |
• | At a price that is not less than the closing price of our Common Shares on the trading day for the NASDAQ market immediately preceding the applicable grant date. |
Fiscal 2015 LTIP PSUs | |||||||||
Named Executive Officer | Threshold at June 30, 2015 | 100% Achievement at June 30, 2015 | 150% Achievement at June 30, 2015 | ||||||
Mark Barrenechea | $ | 20,360 | $ | 1,357,349 | $ | 2,036,024 | |||
Paul McFeeters | $ | 7,053 | $ | 470,183 | $ | 705,275 | |||
P. Thomas Jenkins | $ | 16,410 | $ | 1,094,014 | $ | 1,641,020 | |||
James Mackey | $ | 2,821 | $ | 188,087 | $ | 282,131 | |||
Gordon A. Davies | $ | 4,864 | $ | 324,274 | $ | 486,411 |
Fiscal 2015 LTIP RSUs | |||
Named Executive Officer | Value at June 30, 2013 | ||
Mark Barrenechea | $ | 678,675 | |
Paul McFeeters | $ | 235,058 | |
P. Thomas Jenkins | $ | 547,007 | |
James Mackey | $ | 94,009 | |
Gordon A. Davies | $ | 162,137 |
Fiscal 2015 LTIP Options | |||
Named Executive Officer | Value at June 30, 2013 | ||
Mark Barrenechea | $ | 475,770 | |
Paul McFeeters | $ | 164,803 | |
P. Thomas Jenkins | $ | 383,482 | |
James Mackey | $ | 65,924 | |
Gordon A. Davies | $ | 113,649 |
Fiscal 2014 LTIP | |||||||||
Named Executive Officer | Threshold at June 30, 2014 | 100% Achievement at June 30, 2014 | 150% Achievement at June 30, 2014 | ||||||
Mark Barrenechea | $ | 32,121 | $ | 2,141,399 | $ | 3,212,099 | |||
Paul McFeeters | $ | 12,399 | $ | 826,570 | $ | 1,239,855 | |||
P. Thomas Jenkins | $ | 32,188 | $ | 2,145,850 | $ | 3,218,775 | |||
James Mackey* | N/A | N/A | N/A | ||||||
Gordon A. Davies | $ | 9,537 | $ | 635,812 | $ | 953,719 |
Fiscal 2013 LTIP | |||||||||
Named Executive Officer | Threshold at June 30, 2013 | 100% Achievement at June 30, 2013 | 150% Achievement at June 30, 2013 | ||||||
Mark Barrenechea* | N/A | N/A | N/A | ||||||
Paul McFeeters | $ | 458,064 | $ | 916,129 | $ | 1,374,193 | |||
P. Thomas Jenkins | $ | 1,288,332 | $ | 2,576,663 | $ | 3,864,995 | |||
James Mackey* | N/A | N/A | N/A | ||||||
Gordon A. Davies | $ | 305,376 | $ | 610,752 | $ | 916,129 |
Executive Chairman | 4x base salary |
CEO/President | 4x base salary |
Other senior management | 1x base salary |
• | voting power which includes the power to vote, or to direct the voting of, such security; and/or |
• | investment power which includes the power to dispose, or to direct the disposition of, such security. |
Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) (4) | Total ($) | ||||||||||||||||
Mark Barrenechea | 2013 | $ | 620,000 | — | $ | 1,404,035 | $ | 492,317 | $ | 687,813 | N/A | $ | 24,536 | (5) | $ | 3,228,701 | ||||||||
President and Chief Executive Officer | 2012 | $ | 310,000 | — | $ | 3,423,031 | $ | 10,753,950 | $ | 240,235 | N/A | $ | 107,021 | (6) (9) | $ | 14,834,237 | ||||||||
2011 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||
Paul McFeeters | 2013 | $ | 421,838 | — | $ | 486,329 | $ | 170,535 | $ | 308,315 | N/A | $ | — | (7) | $ | 1,387,017 | ||||||||
Chief Financial Officer and Chief Administrative Officer | 2012 | $ | 425,499 | — | $ | 627,242 | $ | 1,329,653 | $ | 144,365 | N/A | $ | — | (7) | $ | 2,526,759 | ||||||||
2011 | $ | 396,809 | — | $ | 520,295 | $ | — | $ | 707,114 | N/A | $ | — | (7) | $ | 1,624,218 | |||||||||
P. Thomas Jenkins | 2013 | $ | 496,280 | — | $ | 1,131,642 | $ | 396,819 | $ | 550,560 | N/A | $ | 28,424 | (8) | $ | 2,603,725 | ||||||||
Executive Chairman and Chief Strategy Officer | 2012 | $ | 500,587 | — | $ | 1,628,417 | $ | — | $ | 402,827 | N/A | $ | 32,212 | (6) | $ | 2,564,043 | ||||||||
2011 | $ | 496,011 | — | $ | 1,463,358 | $ | — | $ | 2,142,768 | N/A | $ | 22,709 | (6) | $ | 4,124,846 | |||||||||
James Mackey (11) | 2013 | $ | 262,500 | — | $ | 194,530 | $ | 556,530 | $ | 158,775 | N/A | $ | — | (7) | $ | 1,172,335 | ||||||||
SVP, Corporate Development | 2012 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
2011 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||
Gordon A. Davies | 2013 | $ | 397,024 | — | $ | 335,427 | $ | 117,602 | $ | 132,134 | N/A | $ | — | (7) | $ | 982,187 | ||||||||
Chief Legal Officer and Corporate Secretary | 2012 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | (10 | ) | N/A | |||||||||||||
2011 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | (10 | ) | N/A |
(1) | Performance Share Units (PSUs) and Restricted Share Units (RSUs) were granted pursuant to the Fiscal 2015 LTIP. The amounts set forth in this column represent the aggregate grant date fair value, as computed in accordance with ASC Topic 718 “Compensation-Stock Compensation” (ASC Topic 718). For a discussion of the assumptions used in these valuations, see note 12 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. For the maximum value that may be received under the PSU awards, see the “Maximum” column under “Estimated Future Payouts under Equity Incentive Plan Awards” under the “Grants of Plan-Based Awards in Fiscal 2013” table below. |
(2) | Amounts set forth in this column represent the amount recognized as the aggregate grant date fair value of equity-based compensation awards, as calculated in accordance with ASC Topic 718 for the fiscal year in which the awards were granted. In all cases, these amounts do not reflect whether the recipient has actually realized a financial benefit from the exercise of the awards. For a discussion of the assumptions used in this valuation, see note 12 “Share Capital, Option Plans and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. |
(3) | The amounts set forth in this column for Fiscal 2013 represent payments under the variable short-term incentive plan. |
(4) | The amounts in “All Other Compensation” primarily include (i) medical examinations; (ii) car allowances, (iii) club memberships reimbursed, and (iv) tax preparation and financial advisory fees paid. “All Other Compensation” does not include benefits received by the Named Executive Officers which are generally available to all our salaried employees. |
(5) | Represents amounts we paid or reimbursed for: |
(6) | For details of the amounts of fees or expenses we paid or reimbursed please refer to Summary Compensation Table in Item 11 of our Annual Report on Form 10-K for the corresponding fiscal years ended June 30, 2012 and June 30, 2011. |
(7) | The total value of all perquisites and personal benefits for this Named Executive Officer was less than $10,000, and, therefore, excluded. |
(8) | Represents amounts we paid or reimbursed for: |
(9) | The amounts set forth for Mr. Barrenechea's salary and non-equity incentive awards represent a prorated amount based on Mr. Barrenechea's date of hire in January 2012 with the Company. |
(10) | The executive officer was not a Named Executive Officer during the prior two fiscal years, and, therefore compensation details have been excluded. |
(11) | The amounts set forth for Mr. Mackey's compensation represents a prorated amount based on Mr. Mackey's date of hire in October 2012 with the Company. |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | All Other Option Awards: Number of Securities Underlying (2) | Exercise or Base Price of Option Awards | Grant Date Fair Value of Options (3) | |||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Options (#) | ($/Share) | Awards ($) | |||||||||||
Mark Barrenechea | November 2, 2012 | $ | 116,251 | $ | 775,000 | $ | 2,325,000 | 30,246 | $ | 52.74 | $ | 492,317 | ||||||
Paul McFeeters | November 2, 2012 | $ | 52,109 | $ | 347,396 | $ | 1,042,188 | 10,477 | $ | 52.74 | $ | 170,535 | ||||||
P. Thomas Jenkins | November 2, 2012 | $ | 93,053 | $ | 620,351 | $ | 1,861,050 | 24,379 | $ | 52.74 | $ | 396,819 | ||||||
James Mackey | November 2, 2012 | $ | 43,500 | $ | 290,000 | $ | 870,000 | 4,191 | $ | 52.74 | $ | 68,217 | ||||||
November 2, 2012 | 30,000 | $ | 52.74 | $ | 488,313 | |||||||||||||
Gordon A. Davies | November 2, 2012 | $ | 22,333 | $ | 148,884 | $ | 446,652 | 7,225 | $ | 52.74 | $ | 117,602 |
Estimated Future Payouts Under Equity Incentive Plan Awards (4) | All Other Stock Awards: Number of Securities Underlying | Grant Date Fair Value of Stock | ||||||||||
Name | Grant Date | Threshold (#) | Target (#) | Maximum (#) | Stock (#) | Awards ($) | ||||||
Mark Barrenechea | November 2, 2012 | 297 | 19,824 | 29,736 | 9,912 | $ | 1,404,035 | |||||
Paul McFeeters | November 2, 2012 | 103 | 6,867 | 10,301 | 3,433 | $ | 486,329 | |||||
P. Thomas Jenkins | November 2, 2012 | 240 | 15,978 | 23.967 | 7,989 | $ | 1,131,642 | |||||
James Mackey | November 2, 2012 | 41 | 2,747 | 4,121 | 1,373 | $ | 194,530 | |||||
Gordon A. Davies | November 2, 2012 | 71 | 4,736 | 7,104 | 2,368 | $ | 335,427 |
(1) | Represents the threshold, target and maximum estimated payouts under our short-term incentive plan for Fiscal 2013. For further information, please see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Variable Short-Term Incentives” above. |
(2) | For further information regarding our options granting procedures, please see “Compensation Discussion and Analysis-Aligning Officers' Interests with Shareholders' Interests - Variable Long-Term Incentives - Stock Options” above. |
(3) | Amounts set forth in this column represent the amount recognized as the aggregate grant date fair value of equity-based compensation awards, as calculated in accordance with ASC Topic 718 for the fiscal year in which the awards were granted. In all cases, these amounts do not reflect whether the recipient has actually realized a financial benefit from the exercise of the awards. For a discussion of the assumptions used in this valuation, see note 12 “Share Capital, Option Plan and Share-based Payments” to our Notes to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K. |
(4) | Represents the threshold, target and maximum estimated payouts under our Fiscal 2015 LTIP PSUs. For further information, please see “Compensation Discussion and Analysis - Aligning Officers' Interests with Shareholders' Interests - Variable Long-Term Incentives - LTIP” above. |
Option Awards | Stock Awards (1) | ||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Non- exercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested (#) | Equity Incentive Plan Awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | ||||||||||
Mark Barrenechea | November 2, 2012 | 30,246 | 52.74 | November 2, 2019 | |||||||||||||||
February 3, 2012 | 80,000 | 320,000 | 60.35 | February 3, 2019 | |||||||||||||||
May 3, 2012 | 25,000 | 75,000 | 52.44 | May 3, 2019 | |||||||||||||||
February 3, 2012 | 22,222 | $ | 1,521,540 | ||||||||||||||||
February 3, 2012 | 31,275 | $ | 2,141,399 | ||||||||||||||||
November 2, 2012 | 9,912 | $ | 678,675 | ||||||||||||||||
December 3, 2012 | 19,824 | $ | 1,357,349 | ||||||||||||||||
Paul McFeeters | August 21, 2008 | 50,000 | 34.50 | August 21, 2015 | |||||||||||||||
May 3, 2012 | 18,750 | 56,250 | 52.44 | May 3, 2019 | |||||||||||||||
November 2, 2012 | 10,477 | 52.74 | November 2, 2019 | ||||||||||||||||
October 29, 2010 | 13,380 | $ | 916,129 | ||||||||||||||||
February 3, 2012 | 12,072 | $ | 826,570 | ||||||||||||||||
November 2, 2012 | 3,433 | $ | 235,058 | ||||||||||||||||
December 3, 2012 | 6,867 | $ | 470,183 | ||||||||||||||||
P. Thomas Jenkins | August 21, 2008 | 100,000 | 34.50 | August 21, 2015 | |||||||||||||||
November 2, 2012 | 24,379 | 52.74 | November 2, 2019 | ||||||||||||||||
October 29, 2010 | 37,632 | $ | 2,576,663 | ||||||||||||||||
February 3, 2012 | 31,340 | $ | 2,145,850 | ||||||||||||||||
November 2, 2012 | 7,989 | $ | 547,007 | ||||||||||||||||
December 3, 2012 | 15,978 | $ | 1,094,014 | ||||||||||||||||
James Mackey | November 2, 2012 | 30,000 | 52.74 | November 2, 2019 | |||||||||||||||
November 2, 2012 | 4,191 | 52.74 | November 2, 2019 | ||||||||||||||||
November 2, 2012 | 1,373 | $ | 94,009 | ||||||||||||||||
December 3, 2012 | 2,747 | $ | 188,087 | ||||||||||||||||
Gordon A. Davies | October 29, 2009 | 18,750 | 37.33 | October 29, 2016 | |||||||||||||||
October 29, 2010 | 8,920 | $ | 610,752 | ||||||||||||||||
November 2, 2012 | 7,225 | 52.74 | November 2, 2019 | ||||||||||||||||
February 3, 2012 | 9,286 | $ | 635,812 | ||||||||||||||||
November 2, 2012 | 2,368 | $ | 162,137 | ||||||||||||||||
December 3, 2012 | 4,736 | $ | 324,274 |
(1) | Represents each Named Executive Officer's target number of PSUs granted pursuant to the Fiscal 2013, Fiscal 2014, and Fiscal 2015 LTIPs and the market value as of June 30, 2013 based upon the closing price for the Company's Common Shares as traded on the NASDAQ on such date of $68.47. |
(2) | Options in the table above generally vest annually over a period of 4 years starting from the date of grant. |
Option Awards | Stock Awards (3) | ||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise (1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting (2) ($) | |||||
Mark Barrenechea | — | — | — | $ | — | ||||
Paul McFeeters | 240,000 | 11,827,058 | 8,584 | $ | 428,352 | ||||
P. Thomas Jenkins | 50,000 | 2,043,500 | 32,191 | $ | 1,606,341 | ||||
James Mackey | — | — | — | $ | — | ||||
Gordon A. Davies | 18,750 | 336,075 | 7,154 | $ | 356,985 |
(1) | “Value realized on exercise” is the excess of the market price, at date of exercise, of the shares underlying the options over the exercise price of the options. |
(2) | “Value realized on vesting” is the market price of the underlying shares on the vesting date |
(3) | Relates to the vesting of PSUs under our Fiscal 2012 LTIP |
• | If the Named Executive Officer is terminated without cause; and |
• | If there is a change in control in the ownership of OpenText and subsequent to the change in control, there is a change in the relationship between OpenText and the Named Executive Officer. |
• | The failure by the Named Executive Officer to attempt in good faith to perform his duties, other than as a result of a physical or mental illness or injury; |
• | The Named Executive Officer's willful misconduct or gross negligence of a material nature in connection with the performance of his duties which is or could reasonably be expected to be injurious to the Company; |
• | The breach by the Named Executive Officer of his fiduciary duty or duty of loyalty to the Company; |
• | The Named Executive Officer's intentional and unauthorized removal, use or disclosure of information relating to the Company, including customer information, which is injurious to the Company or its customers; |
• | The willful performance by the Named Executive Officer of any act of dishonesty or willful misappropriation of funds or property of the Company or its affiliates; |
• | The indictment of the Named Executive Officer or a plea of guilty or nolo contender to a felony or other serious crime involving moral turpitude; |
• | The material breach by the Named Executive Officer of any obligation material to his employment relationship with the Company; or |
• | The material breach by the Named Executive Officer of the Company's policies and procedures which breach causes or could reasonably be expected to cause harm to the Company; |
• | The failure by the Named Executive Officer to perform his duties according to the terms of his employment agreement or to perform in a manner satisfactory to the Board after OpenText has given the Named Executive Officer reasonable notice of this failure as well as a reasonable opportunity to correct this failure; however, any such failure: |
• | that follows a diminution in his position or duties or responsibilities, or |
• | that results from a disability of the Named Executive Officer, |
• | The engagement by the Named Executive Officer in any act that is materially harmful to us; |
• | The engagement by the Named Executive Officer in any illegal conduct or any act of dishonesty which benefits the Named Executive Officer at our expense including but not limited to the failure by the Named Executive Officer to: |
• | honour his fiduciary duties to us; and |
• | fulfill his duty to act in our best interests; |
• | The failure of the Named Executive Officer to abide by the terms of any resolution passed by the Board; or |
• | The failure of the Named Executive Officer to abide by our policies, procedures and codes of conduct. |
• | The sale, lease, exchange or other transfer, in one transaction or a series of related transactions, of all or substantially all of the assets of OpenText; |
• | The approval by the holders of common shares of any plan or proposal for the liquidation or dissolution of the Company; |
• | Any transaction in which any person or group acquires ownership of more than 50% of the shares of OpenText's common stock; or |
• | Any transaction in which a majority of the Board is replaced over a twelve-month period and such replacement of the Board was not approved by a majority of the Board still in office at the beginning of such period. |
• | A material diminution in the duties and responsibilities of the Named Executive Officer, other than (a) a change arising solely out of the Company becoming part of a larger organization following the change in control event or any related change in the reporting hierarchy or (b) a reorganization of the Company resulting in similar changes to the duties and responsibilities of similarly situated executive officers; |
• | A material reduction to the Named Executive Officer's compensation, other than a similar reduction to the compensation of similarly situated executive officers; |
• | A relocation of the Named Executive Officer's primary work location more than fifty miles; |
• | A reduction in the title or position of the Named Executive Officer, other than (a) a change arising solely out of the Company becoming part of a larger organization following the change in control event or any related change in the reporting hierarchy or (b) a reorganization of the Company resulting in similar changes to the titles or positions of similarly situated executive officers; |
• | The sale of all or substantially all of the assets of OpenText; |
• | Any transaction in which any person or group acquires ownership of more than 50% of the shares of OpenText's common stock on a fully diluted basis; or |
• | Any transaction which results in more than 50% of the shares of OpenText's common stock, on a fully diluted basis, being held by any person or group who were not shareholders of OpenText as of the date of the applicable contract between OpenText and the Named Executive Officer. |
• | A change in control described above which results in a material change of the Named Executive Officer's position, duties, responsibilities, title or office which were in effect immediately prior to such a change in control (except for a change in any position or duties as an OpenText director or for any other material change that is the result of a promotion), which includes any removal of the Named Executive Officer from, or any failure to re-elect or re-appoint the Named Executive Officer to, any positions or offices he held immediately prior to such a change in control; |
• | A material reduction by either OpenText or by any of OpenText's subsidiaries of the Named Executive Officer's salary, benefits or any other form of remuneration payable by either OpenText or by OpenText's subsidiaries; |
• | Any material failure by either OpenText or by any of OpenText's subsidiaries to provide any of the following benefits listed below, in which the Named Executive Officer is participating or entitled to participate immediately prior to any change in control described in the previous section, or if OpenText or any of OpenText's subsidiaries take any action or fail to take any action, and as a result, the Named Executive Officer's participation in any such plan would be materially and adversely affected or the Named Executive Officer's rights or benefits under or pursuant to any such plan would be materially and adversely affected: |
• | benefit, bonus, profit sharing, incentive, remuneration or compensation plan; |
• | stock ownership or purchase plan; or |
• | pension plan or retirement plan; |
• | Any other material breach of the employment agreement between OpenText and the Named Executive Officer which is committed by OpenText. |
Messrs. Barrenechea, McFeeters, Jenkins, and Davies | ||||
No change in control | Change in control | |||
And within 12 months | ||||
Termination without cause | Change in relationship | Termination without cause | Change in relationship | |
Base | 12 or 24 months, depending on position | 12 or 24 months, depending on position | 24 months | 24 months |
Variable | 12 or 24 months, depending on position, and based on 100% of current year's target | 12 or 24 months, depending on position, and based on 100% of current year's target | 24 months and based on 100% of current year's target | 24 months and based on 100% of current year's target |
LTIP | Prorated for number of months participation at termination date in the applicable 36 month performance period. If termination date is before the commencement of the 19th month a prorated LTIP will not be paid | Prorated for number of months participation at termination date in the applicable 36 month performance period. If termination date is before the commencement of the 19th month a prorated LTIP will not be paid | 100% vesting | 100% vesting |
Options | Vested as of termination date | Vested as of termination date | 100% vesting | 100% vesting |
• | Payment of 24 months of salary; |
• | Payment of 24 months of variable short-term incentive, assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred; |
• | All accrued payments up to the date of termination, including all earned but unpaid short-term incentive amounts and earned but unpaid LTIP; |
• | If the triggering event occurs within twelve months of a change in control, 100% of the LTIP; |
• | All employee and medical benefits provided to Mr. Barrenechea immediately prior to the occurrence of the trigger event for a period of 24 months; and |
• | For a period of 90 days, the right to exercise all options which have vested as of the date of termination; provided, however, all options and RSUs granted to Mr. Barrenechea during Fiscal 2012 (Fiscal 2012 Awards) shall continue to vest during the 24 month period following the date of termination and Mr. Barrenechea shall have another 90 days following this period to exercise the Fiscal 2012 Awards. Following these deadlines, all unvested options and RSUs shall terminate. However, if the triggering event occurs within twelve months of a change in control event, then 100% of all outstanding options and the Fiscal 2012 Awards vest and Mr. Barrenechea shall have 90 days to exercise these options and awards. |
• | Payment of 24 months of salary; |
• | Payment of 24 months of variable short-term incentive, assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred; |
• | All accrued payments up to the date of termination, including all earned but unpaid short-term incentive amounts and earned but unpaid LTIP; |
• | If the triggering event occurs within twelve months of a change in control, 100% of the LTIP; |
• | All employee and medical benefits provided to Mr. McFeeters immediately prior to the occurrence of the trigger event for a period of 24 months; and |
• | For a period of 90 days, the right to exercise all options which have vested as of the date of termination. However, if the triggering event occurs within twelve months of a change in control event, then 100% of all outstanding options vest and Mr. McFeeters shall have 90 days to exercise these options. |
• | Payment of 24 months of salary; |
• | Payment of 24 months of variable short-term incentive, assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred; |
• | All accrued payments up to the date of termination, including all earned but unpaid short-term incentive amounts and earned but unpaid LTIP; |
• | If the triggering event occurs within twelve months of a change in control, 100% of the LTIP; |
• | All employee and medical benefits provided to Mr. Jenkins immediately prior to the occurrence of the trigger event for a period of 24 months; and |
• | For a period of 90 days, the right to exercise all options which have vested as of the date of termination. However, if the triggering event occurs within twelve months of a change in control event, then 100% of all outstanding options vest and Mr. Jenkins shall have 90 days to exercise these options. |
• | Payment of 12 months of salary; |
• | Payment of 12 months of variable short-term incentive, assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred ; |
• | All accrued payments up to the date of termination, including all earned but unpaid short-term incentive amounts and earned but unpaid LTIP; |
• | All employee and medical benefits provided to Mr. Davies immediately prior to the occurrence of the trigger event for a period of 12 months; and |
• | For a period of 90 days, the right to exercise all options which have vested as of the date of termination. |
• | Payment of 24 months of salary; |
• | Payment of 24 months of variable short-term incentive, assuming 100% achievement of the expected targets for the fiscal year in which the triggering event occurred; |
• | All accrued payments up to the date of termination, including all earned but unpaid short-term incentive amounts and earned but unpaid LTIP; |
• | Payment of 100% of the LTIP; |
• | All employee and medical benefits provided to Mr. Davies immediately prior to the occurrence of the trigger event for a period of 24 months; and |
• | 100% of all outstanding options vest and Mr. Davies shall have 90 days to exercise these options. |
Mr. Mackey | ||||
No change in control | Change in control | |||
And within 6 months | ||||
Termination without cause | Change in relationship | Termination without cause | Change in relationship | |
Base | 12 months plus 1 additional month for every year of service over 10 years up to maximum of 24 months | n/a | 12 months plus 1 additional month for every year of service over 10 years up to maximum of 24 months | 12 months plus 1 additional month for every year of service over 10 years up to maximum of 24 months |
Variable | 12 months plus 1 additional month for every year of service over 10 years up to maximum of 24 months and based on actual earned amount from the previous year | n/a | 12 months plus 1 additional month for every year of service over 10 years up to maximum of 24 months and based on actual earned amount from the previous year | 12 months plus 1 additional month for every year of service over 10 years up to maximum of 24 months and based on actual earned amount from the previous year |
LTIP | Prorated for number of months participation at termination date in the applicable 36 month performance period. If termination date is before the commencement of the 19th month a prorated LTIP will not be paid | n/a | Months 0 to 6 - 0% vests Months 7 to 18 - 50% vests Months 19 to 36 - 100% vests | Months 0 to 6 - 0% vests Months 7 to 18 - 50% vests Months 19 to 36 - 100% vests |
Options | Vested as of termination date plus those that vest within 90 days after the termination date | n/a | 100% vesting | 100% vesting |
• | Payment of 12 months of salary; |
• | Payment of 12 months of variable short-term incentive earned for the fiscal year prior to the date of the triggering event; |
• | All accrued payments up to the date of termination, including all earned but unpaid short-term incentive amounts and earned but unpaid LTIP; |
• | If the triggering event occurs within six months of a change in control, (a) 0% of his LTIP if the triggering event occurs within the first six months of the LTIP performance period, (b) 50% of his LTIP if the triggering event occurs between the seventh and eighteenth month of the LTIP performance period and (c) 100% of his LTIP if the triggering event occurs between the nineteenth and thirty-sixth month of the LTIP performance period; |
• | All employee and medical benefits provided to Mr. Mackey immediately prior to the occurrence of the trigger event for a period of 12 months; and |
• | For a period of 90 days, the right to exercise all options which have vested as of the date of termination plus, for another period of 90 days not to exceed 180 days following termination, the right to exercise any unvested options which would have otherwise vested during the first 90 days following termination. Following these periods, all unvested options shall terminate. However, if the triggering event occurs within six months of a change in control event, then 100% of all outstanding options vest and Mr. Mackey shall have 90 days to exercise these options. |
• | Payments in Canadian dollars included herein are converted to U.S. dollars using an exchange rate, as of June 30, 2013, of 0.9552. |
• | The salary and incentive payments are calculated based on the amounts of salary and incentive payments which were payable to each Named Executive Officer as of June 30, 2013; |
• | Payment under the LTIP for Mr. Mackey is calculated as though 50% of the Fiscal 2013 LTIP target bonus has vested and 100% of the Fiscal 2012 LTIP target bonus has vested; |
• | Payment under the LTIP for the other Named Executive Officers is calculated as though 100% of Fiscal 2013 and 100% of Fiscal 2012 has vested; and |
• | The number of options available for vesting is equal to: |
• | with respect to Mr. Barrenechea and Mr. Mackey, the number of options which were scheduled to be outstanding and exercisable by September 30, 2013, plus |
• | with respect only to a change in control in the ownership of OpenText, the number of options which are subject to the acceleration of their vesting dates as a result of such change in control. |
Named Executive Officer | Salary ($) | Short-term Incentive Payment ($) | Gain on Vesting of LTIP ($) | Gain on Vesting of Stock Options ($) | Employee Benefits ($) | Total ($) | |||||||
Mark Barrenechea | Termination Without Cause | 1,240,000 | 1,550,000 | — | 3,622,240 | 49,072 | 6,461,312 | ||||||
Change in Control/ Relationship | 1,240,000 | 1,550,000 | 4,177,423 | 5,797,960 | 49,072 | 12,814,455 | |||||||
Paul McFeeters | Termination Without Cause | 811,921 | 668,641 | — | — | 12,526 | 1,493,088 | ||||||
Change in Control/ Relationship | 811,921 | 668,641 | 1,531,811 | 1,066,491 | 12,526 | 4,091,390 | |||||||
P. Thomas Jenkins | Termination Without Cause | 955,201 | 1,194,001 | — | — | 56,848 | 2,206,050 | ||||||
Change in Control/ Relationship | 955,201 | 1,194,001 | 3,786,870 | 383,482 | 56,848 | 6,376,402 | |||||||
James Mackey | Termination Without Cause | 350,000 | — | — | — | 135 | 350,135 | ||||||
Change in Control/ Relationship | 350,000 | — | 141,048 | 537,824 | 135 | 1,029,007 | |||||||
Gordon A. Davies | Termination Without Cause | 382,080 | 143,280 | — | — | 7,043 | 532,403 | ||||||
Change in Control/ Relationship | 764,161 | 286,560 | 1,122,223 | 697,524 | 14,086 | 2,884,554 |
Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||
Randy Fowlie (3) | $ | 54,175 | $ | 178,093 | $ | — | — | N/A | $ | 232,268 | ||||||||||
Brian Jackman (4) | $ | 60,000 | $ | 125,007 | $ | — | — | N/A | $ | 185,007 | ||||||||||
Stephen Sadler (5) | $ | 45,000 | $ | 125,007 | $ | — | — | N/A | $ | 619,746 | (10 | ) | $ | 789,753 | ||||||
Michael Slaunwhite (6) | $ | 8,750 | $ | 197,651 | $ | — | — | N/A | $ | 206,401 | ||||||||||
Gail E. Hamilton (7) | $ | 74,000 | $ | 125,007 | $ | — | — | N/A | $ | 199,007 | ||||||||||
Katharine B. Stevenson (8) | $ | 70,000 | $ | 125,007 | $ | — | — | N/A | $ | 195,007 | ||||||||||
Deborah Weinstein (9) | $ | 2,313 | $ | 198,296 | $ | — | — | N/A | $ | 200,609 |
(1) | Non-management directors may elect to defer all or a portion of their retainer and/or fees in the form of common stock equivalent units under our Directors' Deferred Share Unit Plan (DSU Plan) based on the value of the Company's shares as of the date fees would otherwise be paid. The DSU Plan became effective February 2, 2010, is available to any non-employee director of the Company and is designed to promote greater alignment of long-term interests between directors of the Company and its shareholders. An eligible director's DSUs will vest at the date of the Company's next annual general meeting. However, such DSUs are not payable by the Company until the non-employee director ceases to be a member of the Board. |
(2) | In Fiscal 2013, Messrs. Fowlie, Jackman, Sadler, and Slaunwhite and Mses. Hamilton, Stevenson and Weinstein received 3,269, 2,368, 2,368, 3,638, 2,368, 2,368, and 3,646 DSUs, respectively. The amounts set forth in this column represents the amount recognized as the aggregate grant date fair value of equity-based compensation awards, as calculated in accordance with ASC Topic 718. These amounts do not reflect whether the recipient has actually realized a financial benefit from the awards. For a discussion of the assumptions used in this valuation, see note 12 “Share Capital, Option Plan and Share-based Payments” to our consolidated financial statements. |
(3) | As of June 30, 2013, Mr. Fowlie holds 47,100 options and 6,517 DSUs. |
(4) | As of June 30, 2013, Mr. Jackman holds 52,600 options and 2,832 DSUs. |
(5) | As of June 30, 2013, Mr. Sadler holds no options and 6,492 DSUs. |
(6) | As of June 30, 2013, Mr. Slaunwhite holds 69,900 options and 8,164 DSUs. |
(7) | As of June 30, 2013, Ms. Hamilton holds 13,100 options and 5,272 DSUs. |
(8) | As of June 30, 2013, Ms. Stevenson holds 22,500 options and 4,052 DSUs. |
(9) | As of June 30, 2013, Ms. Weinstein holds 18,300 options and 6,900 DSUs. |
(10) | During Fiscal 2013, Mr. Sadler received $619,746 in consulting fees for assistance with acquisition-related business activities. Mr. Sadler abstained from voting on all transactions from which he would potentially derive consulting fees. |
Description | Amount and Frequency of Payment | |
Annual retainer fee payable to each non-employee director | $45,000 per director payable at the beginning of the calendar year | |
Annual Independent Lead Director fee payable to the Independent Lead Director | $20,000 payable at the beginning of the calendar year | |
Annual Audit Committee retainer fee payable to each member of the Audit Committee | $25,000 per year payable at $6,250 at the beginning of each quarterly period. | |
Annual Audit Committee Chair retainer fee payable to the Chair of the Audit Committee | $10,000 per year payable at $2,500 at the beginning of each quarterly period. | |
Annual Compensation Committee retainer fee payable to each member of the Compensation Committee | $15,000 per year payable at $3,750 at the beginning of each quarterly period. | |
Annual Compensation Committee Chair retainer fee payable to the Chair of the Compensation Committee | $10,000 per year payable at $2,500 at the beginning of each quarterly period. | |
Annual Corporate Governance Committee retainer fee payable to each member of the Corporate Governance Committee | $8,000 per year payable at $2,000 at the beginning of each quarterly period. | |
Annual Corporate Governance Committee Chair retainer fee payable to the Chair of the Corporate Governance Committee | $6,000 per year payable at $1,500 at the beginning of each quarterly period. |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Common Shares Outstanding | |
FMR LLC (1) 82 Devonshire Street Boston, Massachusetts, 02109 | 9,850,957 | 16.81% | |
Artisan Partners Holding LP (1) 875 East Wisconsin Ave. STE 800, Milwaukee, WI, WI53202 | 3,257,469 | 5.56% | |
P. Thomas Jenkins (2) | 868,087 | 1.46% | |
Mark Barrenechea (3) | 105,000 | * | |
Stephen J. Sadler (4) | 99,124 | * | |
Michael Slaunwhite (5) | 131,096 | * | |
Randy Fowlie (6) | 97,749 | * | |
Brian J. Jackman (7) | 65,064 | * | |
Gail E. Hamilton (8) | 19,504 | * | |
Katharine B. Stevenson (9) | 27,284 | * | |
Deborah Weinstein (10) | 22,832 | * | |
Paul McFeeters (11) | 145,297 | * | |
James Mackey | — | — | |
Gordon A. Davies (12) | 6,811 | * | |
All executive officers and directors as a group (13) | 1,619,526 | 2.72% |
* | Less than 1% |
(1) | Information regarding the shares outstanding is based on information filed in Schedule 13G, 13F, or Schedule 13G/A with the SEC. The percentage of Common Shares outstanding is calculated using the total shares outstanding as of June 30, 2013. |
(2) | Includes 768,087 Common Shares owned, and100,000 options which are exercisable. |
(3) | Includes 105,000 options which are exercisable. |
(4) | Includes 95,000 Common Shares owned, and 4,124 deferred stock units (DSUs) which are exercisable. |
(5) | Includes 55,400 Common Shares owned, 69,900 options which are exercisable and 5,796 DSUs which are exercisable. |
(6) | Includes 46,500 Common Shares owned, 47,100 options which are exercisable and 4,149 DSUs which are exercisable. |
(7) | Includes 12,000 Common Shares owned, 52,600 options which are exercisable and 464 DSUs which are exercisable. |
(8) | Includes 3,500 Common Shares owned, 13,100 options which are exercisable and 2,904 DSUs which are exercisable. |
(9) | Includes 3,100 Common Shares owned, 22,500 options which are exercisable and 1,684 DSUs which are exercisable. |
(10) | Includes 18,300 options which are exercisable and 4,532 DSUs which are exercisable. |
(11) | Includes 76,547 Common Shares owned and 68,750 options which are exercisable. |
(12) | Includes 6,811 Common Shares owned. |
(13) | Includes 1,067,373 Common Shares owned, 522,250 options which are exercisable, 6,250 options which will become exercisable within 60 days of June 30, 2013 and 23,653 DSUs which are exercisable. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants, and rights | Weighted average exercise price of outstanding options, warrants, and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) |
(a) | (b) | (c) | |
Equity compensation plans approved by security holders: | 1,805,391 | $49.44 | 2,652,250 |
Equity compensation plans not approved by security holders : | |||
Under deferred stock awards | 40,229 | n/a | — |
Under performance stock awards | 395,887 | n/a | — |
Under restricted stock awards | 128,275 | n/a | — |
Total | 2,369,782 | n/a | 2,652,250 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
Index to Consolidated Financial Statements and Supplementary Data (Item 8) | Page Number |
Report of Independent Registered Public Accounting Firm | |
Report of Independent Registered Public Accounting Firm | |
Consolidated Balance Sheets at June 30, 2013 and 2012 | |
Consolidated Statements of Income for the years ended June 30, 2013, 2012, and 2011 | |
Consolidated Statements of Comprehensive Income for the years ended June 30, 2013, 2012, and 2011 | |
Consolidated Statements of Shareholders' Equity for the years ended June 30, 2013, 2012, and 2011 | |
Consolidated Statements of Cash Flows for the years ended June 30, 2013, 2012, and 2011 | |
Notes to Consolidated Financial Statements |
Exhibit Number | Description of Exhibit | |
2.1 | Agreement and Plan of Merger between Open Text Corporation, Open Text Inc., Oasis Merger Corporation and Captaris Inc., dated September 3, 2008. (12) | |
2.2 | Agreement and Plan of Merger dated as of May 5, 2009 by and among Open Text Corporation, Scenic Merger Corporation and Vignette Corporation. (13) | |
2.3 | Agreement and Plan of Merger between Open Text Corporation, EPIC Acquisition Sub Inc., a Delaware corporation and an indirect wholly-owned subsidiary of OpenText and EasyLink Services International Corporation dated May 1, 2012. (19) | |
3.1 | Articles of Amalgamation of the Company. (1) | |
3.2 | Articles of Amendment of the Company. (1) | |
3.3 | Articles of Amendment of the Company. (1) | |
3.4 | Articles of Amalgamation of the Company. (1) | |
3.5 | Articles of Amalgamation of the Company, dated July 1, 2001. (2) | |
3.6 | Articles of Amalgamation of the Company, dated July 1, 2002. (3) | |
3.7 | Articles of Amalgamation of the Company, dated July 1, 2003. (4) | |
3.8 | Articles of Amalgamation of the Company, dated July 1, 2004. (5) | |
3.9 | Articles of Amalgamation of the Company, dated July 1, 2005. (6) | |
3.10 | Open Text Corporation By-law, dated December 2, 2010. (15) | |
3.11 | Articles of Continuance of the Company, dated December 29, 2005. (7) | |
4.1 | Form of Common Share Certificate. (1) | |
4.2 | Amended and Restated Shareholders Rights Plan Agreement between Open Text Corporation and Computershare Investor Services, Inc. dated December 2, 2010 (amending and restating the Shareholder Rights Plan Agreement dated as of December 6, 2007 filed as an exhibit to OpenText's Registration Statement on Form S-4, as filed with the SEC on May 28, 2009). (15) | |
10.1 | 1998 Stock Option Plan. (8) | |
10.2* | Indemnity Agreement with Walter Koehler dated August 8, 2005. (6) |
10.3 | 2004 Employee Stock Option Plan. (6) | |
10.4 | Artesia Stock Option Plan. (6) | |
10.5 | Vista Stock Option Plan. (6) | |
10.6* | Form of Indemnity Agreement between the Company and certain of its officers dated September 7, 2006. (9) | |
10.7* | Open Text Corporation Long-Term Incentive Plan dated September 10, 2007. (10) | |
10.8* | Consulting Agreement between Steven Sadler and SJS Advisors Inc. and the Company, dated May 3, 2005. (11) | |
10.9 | Open Text Corporation Directors' Deferred Share Unit Plan effective February 2, 2010. (14) | |
10.10 | Amended and Restated Credit Agreement among Open Text Corporation and certain of its subsidiaries, the Lenders, Barclays Bank PLC, Royal Bank of Canada, Barclays Capital and RBC Capital Markets, dated as of November 9, 2011. (16) | |
10.11* | Restricted Share Unit Grant Agreement, dated February 3, 2012, between Mark Barrenechea and the Company. (17) | |
10.12 | 2004 Stock Option Plan, as amended September 27, 2012 (20) | |
10.13* | OpenText Corporation Long-Term Incentive Plan 2015 for eligible employees, effective October 3, 2012 (21) | |
10.14* | Employment Agreement, dated October 30, 2012 between Mark Barrenechea and the Company (21) | |
10.15* | Amending Agreement to the Restricted Share Unit Grant Agreement, between Mark Barrenechea and the Company (21) | |
10.16* | Employment Agreement, dated January 22, 2013, between Greg Corgan and the Company (22) | |
10.17* | Amendment No. 1 to the Employment Agreement between Mark J. Barrenechea and the Company dated January 24, 2013 (amending the Employment Agreement between Mark J. Barrenechea and the Company dated October 30, 2012) (22) | |
10.18* | Employment Agreement, dated April 23, 2013, between P. Thomas Jenkins and the Company (23) | |
10.19* | Employment Agreement, as of October 1, 2012, between James S. Mackey and the Company | |
10.20* | Employment Agreement, as of December 19, 2012, between Gordon A. Davies and the Company | |
10.21* | Employment Agreement, as of July 30, 2013, between Paul McFeeters and the Company | |
10.22* | Letter Agreement, as of July 30, 2013, between P. Thomas Jenkins and the Company | |
18.1 | Preferability letter dated February 2, 2012 from the Company's auditors, KPMG LLP, regarding a change in the Company's accounting policy relating to the income statement classification of tax related interest and penalties. (18) | |
21.1 | List of the Company's Subsidiaries. | |
23.1 | Consent of Independent Registered Public Accounting Firm. | |
31.1 | Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL instance document | |
101.SCH | XBRL taxonomy extension schema | |
101.CAL | XBRL taxonomy extension calculation linkbase | |
101.DEF | XBRL taxonomy extension definition linkbase | |
101.LAB | XBRL taxonomy extension label linkbase | |
101.PRE | XBRL taxonomy extension presentation |
(1) | Filed as an Exhibit to the Company's Registration Statement on Form F-1 (Registration Number 33-98858) as filed with the Securities and Exchange Commission (the “SEC”) on November 1, 1995 or Amendments 1, 2 or 3 thereto (filed on December 28, 1995, January 22, 1996 and January 23, 1996 respectively), and incorporated herein by reference. |
(2) | Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 28, 2001 and incorporated herein by reference. |
(3) | Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 28, 2002 and incorporated herein by reference. |
(4) | Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 29, 2003 and incorporated herein by reference. |
(5) | Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 13, 2004 and incorporated herein by reference. |
(6) | Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 27, 2005 and incorporated herein by reference. |
(7) | Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on February 3, 2006 and incorporated herein by reference. |
(8) | Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on August 20, 1999 and incorporated herein by reference. |
(9) | Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on September 12, 2006 and incorporated herein by reference. |
(10) | Filed as an Exhibit to the Company's Report on Form 8-K, as filed with the SEC on September 13, 2007 and incorporated herein by reference. |
(11) | Filed as an Exhibit to the Company's Annual Report on Form 10-K, as filed with the SEC on August 26, 2008 and incorporated herein by reference. |
(12) | Filed as an Exhibit to the Company's Report on Form 8-K, as filed with the SEC on September 4, 2008 and incorporated herein by reference. |
(13) | Filed as an Exhibit to the Company's Report on Form 8-K, as filed with the SEC on May 6, 2009 and incorporated herein by reference. |
(14) | Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on April 30, 2010 and incorporated herein by reference. |
(15) | Filed as an Exhibit to the Company's Report on Form 8-K, as filed with the SEC on December 2, 2010 and incorporated herein by reference. |
(16) | Filed as an Exhibit to the Company's Report on Form 8-K, as filed with the SEC on November 9, 2011 and incorporated herein by reference. |
(17) | Filed as an Exhibit to the Company’s Report on Form 8-K, as filed with the SEC on February 8, 2012 and incorporated herein by reference. |
(18) | Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q, as filed with the SEC on February 2, 2012 and incorporated herein by reference. |
(19) | Filed as an Exhibit to the Company’s Report on Form 8-K, as filed with the SEC on July 3, 2012 and incorporated herein by reference. |
(20) | Filed as an Exhibit to the Company’s Report on Form 8-K, as filed with the SEC on October 2, 2012 and incorporated herein by reference |
(21) | Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on November 1, 2012 and incorporated herein by reference |
(22) | Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on January 25, 2013 and incorporated herein by reference |
(23) | Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on April 25, 2013 and incorporated herein by reference |
June 30, 2013 | June 30, 2012 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 470,445 | $ | 559,747 | |||
Accounts receivable trade, net of allowance for doubtful accounts of $4,871 as of June 30, 2013 and $5,655 as of June 30, 2012 (note 3) | 174,927 | 163,664 | |||||
Income taxes recoverable (note 14) | 17,173 | 17,849 | |||||
Prepaid expenses and other current assets | 43,464 | 45,613 | |||||
Deferred tax assets (note 14) | 11,082 | 4,003 | |||||
Total current assets | 717,091 | 790,876 | |||||
Property and equipment (note 4) | 88,364 | 81,157 | |||||
Goodwill (note 5) | 1,246,872 | 1,040,234 | |||||
Acquired intangible assets (note 6) | 363,615 | 312,563 | |||||
Deferred tax assets (note 14) | 135,695 | 115,128 | |||||
Other assets (note 7) | 25,082 | 22,137 | |||||
Deferred charges (note 8) | 67,633 | 68,653 | |||||
Long-term income taxes recoverable (note 14) | 10,465 | 13,545 | |||||
Total assets | $ | 2,654,817 | $ | 2,444,293 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities (note 9) | $ | 188,443 | $ | 132,015 | |||
Current portion of long-term debt (note 10) | 51,742 | 41,374 | |||||
Deferred revenues | 282,387 | 273,987 | |||||
Income taxes payable (note 14) | 4,184 | 27,806 | |||||
Deferred tax liabilities (note 14) | 1,127 | 1,612 | |||||
Total current liabilities | 527,883 | 476,794 | |||||
Long-term liabilities: | |||||||
Accrued liabilities (note 9) | 17,849 | 13,966 | |||||
Deferred credits (note 8) | 11,608 | 10,086 | |||||
Pension liability (note 11) | 24,509 | 22,074 | |||||
Long-term debt (note 10) | 513,750 | 555,000 | |||||
Deferred revenues | 11,830 | 12,653 | |||||
Long-term income taxes payable (note 14) | 140,508 | 147,623 | |||||
Deferred tax liabilities (note 14) | 69,672 | 26,705 | |||||
Total long-term liabilities | 789,726 | 788,107 | |||||
Shareholders’ equity: | |||||||
Share capital (note 12) | |||||||
59,028,886 and 58,358,990 Common Shares issued and outstanding at June 30, 2013 and June 30, 2012, respectively; Authorized Common Shares: unlimited | 651,642 | 635,321 | |||||
Additional paid-in capital | 101,865 | 95,026 | |||||
Accumulated other comprehensive income | 39,890 | 44,364 | |||||
Retained earnings | 572,885 | 442,068 | |||||
Treasury stock, at cost (610,878 and 793,494 shares at June 30, 2013 and at June 30, 2012, respectively) | (29,074 | ) | (37,387 | ) | |||
Total shareholders’ equity | 1,337,208 | 1,179,392 | |||||
Total liabilities and shareholders’ equity | $ | 2,654,817 | $ | 2,444,293 |
Year Ended June 30, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
License | $ | 279,598 | $ | 293,719 | $ | 269,202 | ||||||
Cloud services | 173,799 | — | — | |||||||||
Customer support | 658,216 | 656,568 | 560,541 | |||||||||
Professional service and other | 251,723 | 257,186 | 203,560 | |||||||||
Total revenues | 1,363,336 | 1,207,473 | 1,033,303 | |||||||||
Cost of revenues: | ||||||||||||
License | 16,107 | 18,033 | 18,284 | |||||||||
Cloud services | 72,365 | — | — | |||||||||
Customer support | 106,948 | 110,504 | 86,834 | |||||||||
Professional service and other | 196,874 | 204,909 | 167,854 | |||||||||
Amortization of acquired technology-based intangible assets (note 6) | 93,610 | 84,572 | 68,048 | |||||||||
Total cost of revenues | 485,904 | 418,018 | 341,020 | |||||||||
Gross profit | 877,432 | 789,455 | 692,283 | |||||||||
Operating expenses: | ||||||||||||
Research and development | 164,010 | 169,043 | 145,992 | |||||||||
Sales and marketing | 289,157 | 274,544 | 232,332 | |||||||||
General and administrative | 109,325 | 97,072 | 86,696 | |||||||||
Depreciation | 24,496 | 21,587 | 22,116 | |||||||||
Amortization of acquired customer-based intangible assets (note 6) | 68,745 | 53,326 | 38,966 | |||||||||
Special charges (note 17) | 24,034 | 24,523 | 15,576 | |||||||||
Total operating expenses | 679,767 | 640,095 | 541,678 | |||||||||
Income from operations | 197,665 | 149,360 | 150,605 | |||||||||
Other income (expense), net (note 21) | (2,473 | ) | 3,549 | (6,019 | ) | |||||||
Interest expense, net | (16,982 | ) | (15,564 | ) | (8,452 | ) | ||||||
Income before income taxes | 178,210 | 137,345 | 136,134 | |||||||||
Provision for (recovery of) income taxes (note 14) | 29,690 | 12,171 | 12,931 | |||||||||
Net income for the period | $ | 148,520 | $ | 125,174 | $ | 123,203 | ||||||
Earnings per share—basic (note 22) | $ | 2.53 | $ | 2.16 | $ | 2.16 | ||||||
Earnings per share—diluted (note 22) | $ | 2.51 | $ | 2.13 | $ | 2.11 | ||||||
Weighted average number of Common Shares outstanding—basic | 58,604 | 57,890 | 57,077 | |||||||||
Weighted average number of Common Shares outstanding—diluted | 59,062 | 58,734 | 58,260 | |||||||||
Dividends declared per Common Share | $ | 0.30 | $ | — | $ | — |
Year Ended June 30, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net income for the period | $ | 148,520 | $ | 125,174 | $ | 123,203 | |||||
Other comprehensive income—net of tax: | |||||||||||
Net foreign currency translation adjustments | (1,879 | ) | (9,197 | ) | 15,388 | ||||||
Net unrealized gain (loss) on cash flow hedges | (2,536 | ) | (1,069 | ) | 1,275 | ||||||
Net actuarial gain (loss) relating to defined benefit pension plans | (59 | ) | (5,840 | ) | (214 | ) | |||||
Total other comprehensive income (loss), net, for the period | (4,474 | ) | (16,106 | ) | 16,449 | ||||||
Total comprehensive income | $ | 144,046 | $ | 109,068 | $ | 139,652 |
OPEN TEXT CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands of U.S. dollars and shares) | ||||||||||||||||||||||||||||||
Common Shares | Treasury Stock | Additional Paid in Capital | Accumulated Retained Earnings | Accumulated Other Comprehensive Income | Total | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Balance as of June 30, 2010 | 56,826 | $ | 602,868 | (308 | ) | $ | (14,000 | ) | $ | 61,298 | $ | 193,691 | $ | 44,021 | $ | 887,878 | ||||||||||||||
Issuance of Common Shares | ||||||||||||||||||||||||||||||
Under employee stock option plans | 439 | 10,090 | — | — | — | — | — | 10,090 | ||||||||||||||||||||||
Under employee stock purchase plans | 31 | 1,202 | — | — | — | — | — | 1,202 | ||||||||||||||||||||||
In connection with acquisitions | 6 | 119 | — | — | (119 | ) | — | — | — | |||||||||||||||||||||
Stock compensation | — | — | — | — | 11,234 | — | — | 11,234 | ||||||||||||||||||||||
Income tax effect related to stock options exercised | — | — | — | — | 1,888 | — | — | 1,888 | ||||||||||||||||||||||
Purchase of treasury stock | — | — | (264 | ) | (12,499 | ) | — | — | — | (12,499 | ) | |||||||||||||||||||
Other comprehensive income (loss) - net | — | — | — | — | — | — | 16,449 | 16,449 | ||||||||||||||||||||||
Net income for the year | — | — | — | — | — | 123,203 | — | 123,203 | ||||||||||||||||||||||
Balance as of June 30, 2011 | 57,302 | $ | 614,279 | (572 | ) | $ | (26,499 | ) | $ | 74,301 | $ | 316,894 | $ | 60,470 | $ | 1,039,445 | ||||||||||||||
Issuance of Common Shares | ||||||||||||||||||||||||||||||
Under employee stock option plans | 1,023 | 19,217 | — | — | — | — | — | 19,217 | ||||||||||||||||||||||
Under employee stock purchase plans | 33 | 1,792 | — | — | — | — | — | 1,792 | ||||||||||||||||||||||
In connection with acquisitions | 1 | 33 | — | — | (33 | ) | — | — | — | |||||||||||||||||||||
Stock compensation | — | — | — | — | 18,062 | — | — | 18,062 | ||||||||||||||||||||||
Income tax effect related to stock options exercised | — | — | — | — | 2,696 | — | — | 2,696 | ||||||||||||||||||||||
Purchase of treasury stock | — | — | (221 | ) | (10,888 | ) | — | — | — | (10,888 | ) | |||||||||||||||||||
Other comprehensive income (loss) - net | — | — | — | — | — | — | (16,106 | ) | (16,106 | ) | ||||||||||||||||||||
Net income for the year | — | — | — | — | — | 125,174 | — | 125,174 | ||||||||||||||||||||||
Balance as of June 30, 2012 | 58,359 | $ | 635,321 | (793 | ) | $ | (37,387 | ) | $ | 95,026 | $ | 442,068 | $ | 44,364 | $ | 1,179,392 | ||||||||||||||
Issuance of Common Shares | ||||||||||||||||||||||||||||||
Under employee stock option plans | 627 | 14,205 | — | — | — | — | — | 14,205 | ||||||||||||||||||||||
Under employee stock purchase plans | 42 | 2,095 | — | — | — | — | — | 2,095 | ||||||||||||||||||||||
In connection with acquisitions | 1 | 21 | — | — | (21 | ) | — | — | — | |||||||||||||||||||||
Stock compensation | — | — | — | — | 15,575 | — | — | 15,575 | ||||||||||||||||||||||
Income tax effect related to stock options exercised | — | — | — | — | (402 | ) | — | — | (402 | ) | ||||||||||||||||||||
Issuance of treasury stock | — | — | 182 | 8,313 | (8,313 | ) | — | — | — | |||||||||||||||||||||
Dividend | — | — | — | — | — | (17,703 | ) | — | (17,703 | ) | ||||||||||||||||||||
Other comprehensive income (loss) - net | — | — | — | — | — | — | (4,474 | ) | (4,474 | ) | ||||||||||||||||||||
Net income for the year | — | — | — | — | — | 148,520 | 148,520 | |||||||||||||||||||||||
Balance as of June 30, 2013 | 59,029 | $ | 651,642 | (611 | ) | $ | (29,074 | ) | $ | 101,865 | $ | 572,885 | $ | 39,890 | $ | 1,337,208 |
Year Ended June 30, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income for the period | $ | 148,520 | $ | 125,174 | $ | 123,203 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization of intangible assets | 186,851 | 159,485 | 129,130 | ||||||||
Share-based compensation expense | 15,575 | 18,097 | 11,308 | ||||||||
Excess tax benefits on share-based compensation expense | (915 | ) | (2,723 | ) | (1,888 | ) | |||||
Pension expense | 910 | 543 | 552 | ||||||||
Amortization of debt issuance costs | 2,123 | 1,703 | 1,359 | ||||||||
Amortization of deferred charges and credits | 11,815 | 11,579 | 8,519 | ||||||||
Loss on sale and write down of property and equipment | 24 | 203 | 12 | ||||||||
Deferred taxes | (5,796 | ) | (78,792 | ) | (17,779 | ) | |||||
Impairment and other non cash charges | — | 1,389 | (482 | ) | |||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 17,965 | 5,319 | 200 | ||||||||
Prepaid expenses and other current assets | 4,242 | (2,079 | ) | 1,833 | |||||||
Income taxes | (17,053 | ) | 68,601 | 9,444 | |||||||
Deferred charges and credits | (9,274 | ) | (22,035 | ) | (29,071 | ) | |||||
Accounts payable and accrued liabilities | (41,409 | ) | (17,812 | ) | (21,197 | ) | |||||
Deferred revenue | 5,418 | (4,581 | ) | 10,738 | |||||||
Other assets | (494 | ) | 2,419 | (2,660 | ) | ||||||
Net cash provided by operating activities | 318,502 | 266,490 | 223,221 | ||||||||
Cash flows from investing activities: | |||||||||||
Additions of property and equipment | (23,107 | ) | (25,828 | ) | (36,662 | ) | |||||
Purchase of patents | (192 | ) | (193 | ) | — | ||||||
Purchase of System Solutions Australia Pty Limited, net of cash acquired | (516 | ) | (1,738 | ) | — | ||||||
Purchase of EasyLink Services International Corporation, net of cash acquired | (315,331 | ) | — | — | |||||||
Purchase of Resonate KT Limited, net of cash acquired | (19,366 | ) | — | — | |||||||
Purchase of ICCM Professional Services Limited, net of cash acquired | (11,257 | ) | — | — | |||||||
Purchase of Operitel Corporation, net of cash acquired | — | (7,014 | ) | — | |||||||
Purchase of Global 360 Holding Corp., net of cash acquired | — | (245,653 | ) | — | |||||||
Purchase of StreamServe Inc., net of cash acquired | — | — | (57,221 | ) | |||||||
Purchase of weComm Limited, net of cash acquired | — | — | (20,198 | ) | |||||||
Purchase of Metastorm Inc., net of cash acquired | — | — | (168,657 | ) | |||||||
Purchase of New Generation Consulting Inc | — | — | (471 | ) | |||||||
Purchase consideration for prior period acquisitions | (875 | ) | (1,113 | ) | (4,577 | ) | |||||
Other investing activities | (3,750 | ) | — | 518 | |||||||
Net cash used in investing activities | (374,394 | ) | (281,539 | ) | (287,268 | ) | |||||
Cash flows from financing activities: | |||||||||||
Excess tax benefits on share-based compensation expense | 915 | 2,723 | 1,888 | ||||||||
Proceeds from issuance of Common Shares | 16,347 | 21,270 | 11,512 | ||||||||
Purchase of Treasury Stock | — | (10,888 | ) | (12,499 | ) | ||||||
Proceeds from long-term debt and revolver | — | 648,500 | — | ||||||||
Repayment of long-term debt and revolver | (30,677 | ) | (349,187 | ) | (3,575 | ) | |||||
Debt issuance costs | — | (9,834 | ) | (29 | ) | ||||||
Payments of dividends to shareholders | (17,703 | ) | — | — | |||||||
Net cash provided by (used in) financing activities | (31,118 | ) | 302,584 | (2,703 | ) | ||||||
Foreign exchange gain (loss) on cash held in foreign currencies | (2,292 | ) | (11,928 | ) | 24,698 | ||||||
Increase (decrease) in cash and cash equivalents during the period | (89,302 | ) | 275,607 | (42,052 | ) | ||||||
Cash and cash equivalents at beginning of the period | 559,747 | 284,140 | 326,192 | ||||||||
Cash and cash equivalents at end of the period | $ | 470,445 | $ | 559,747 | $ | 284,140 |
Furniture and fixtures | 5 years |
Office equipment | 5 years |
Computer hardware | 3 years |
Computer software | 3 years |
Leasehold improvements | Lesser of the lease term or 5 years |
Building | 40 years |
Balance as of June 30, 2010 | $ | 4,868 | |
Bad debt expense | 2,602 | ||
Write-off /adjustments | (2,046 | ) | |
Balance as of June 30, 2011 | 5,424 | ||
Bad debt expense | 3,443 | ||
Write-off /adjustments | (3,212 | ) | |
Balance as of June 30, 2012 | 5,655 | ||
Bad debt expense | 2,431 | ||
Write-off /adjustments | (3,215 | ) | |
Balance as of June 30, 2013 | $ | 4,871 |
As of June 30, 2013 | |||||||||||
Cost | Accumulated Depreciation | Net | |||||||||
Furniture and fixtures | $ | 11,524 | $ | (5,645 | ) | $ | 5,879 | ||||
Office equipment | 1,128 | (692 | ) | 436 | |||||||
Computer hardware | 60,666 | (40,826 | ) | 19,840 | |||||||
Computer software | 18,169 | (10,583 | ) | 7,586 | |||||||
Leasehold improvements | 31,951 | (17,656 | ) | 14,295 | |||||||
Buildings | 44,993 | (4,665 | ) | 40,328 | |||||||
Total | $ | 168,431 | $ | (80,067 | ) | $ | 88,364 |
As of June 30, 2012 | |||||||||||
Cost | Accumulated Depreciation | Net | |||||||||
Furniture and fixtures | $ | 10,828 | $ | (4,577 | ) | $ | 6,251 | ||||
Office equipment | 975 | (596 | ) | 379 | |||||||
Computer hardware | 48,834 | (34,799 | ) | 14,035 | |||||||
Computer software | 13,558 | (7,404 | ) | 6,154 | |||||||
Leasehold improvements | 27,643 | (13,777 | ) | 13,866 | |||||||
Buildings | 44,034 | (3,562 | ) | 40,472 | |||||||
Total | $ | 145,872 | $ | (64,715 | ) | $ | 81,157 |
Balance as of June 30, 2011 | $ | 832,481 | |
Acquisition of System Solutions Australia Pty Limited (note 18) | 2,076 | ||
Acquisition of Operitel Corporation (note 18) | 4,395 | ||
Acquisition of Global 360 Holding Corp. (note 18) | 201,934 | ||
Adjustments on account of foreign exchange | (652 | ) | |
Balance as of June 30, 2012 | $ | 1,040,234 | |
Acquisition of EasyLink Services International Corporation (note 18) | 183,616 | ||
Acquisition of Resonate KT Limited (note 18) | 12,976 | ||
Acquisition of ICCM Professional Services Limited (note 18) | 9,865 | ||
Adjustments on account of foreign exchange | 181 | ||
Balance as of June 30, 2013 | $ | 1,246,872 |
As of June 30, 2013 | |||||||||||
Cost | Accumulated Amortization | Net | |||||||||
Technology Assets | $ | 557,039 | $ | (403,126 | ) | $ | 153,913 | ||||
Customer Assets | 503,781 | (294,079 | ) | 209,702 | |||||||
Total | $ | 1,060,820 | $ | (697,205 | ) | $ | 363,615 | ||||
As of June 30, 2012 | |||||||||||
Cost | Accumulated Amortization | Net | |||||||||
Technology Assets | $ | 473,008 | $ | (309,517 | ) | $ | 163,491 | ||||
Customer Assets | 374,396 | (225,324 | ) | 149,072 | |||||||
Total | $ | 847,404 | $ | (534,841 | ) | $ | 312,563 |
Fiscal years ending June 30, | |||
2014 | $ | 106,717 | |
2015 | 83,017 | ||
2016 | 58,067 | ||
2017 | 40,920 | ||
2018 and beyond | 74,894 | ||
Total | $ | 363,615 |
As of June 30, 2013 | As of June 30, 2012 | ||||||
Debt issuance costs | $ | 6,340 | $ | 8,463 | |||
Deposits and restricted cash | 10,205 | 7,515 | |||||
Long-term prepaid expenses and other long-term assets | 8,537 | 6,159 | |||||
Total | $ | 25,082 | $ | 22,137 |
As of June 30, 2013 | As of June 30, 2012 | ||||||
Accounts payable—trade | $ | 8,776 | $ | 7,574 | |||
Accrued salaries and commissions | 50,568 | 50,821 | |||||
Accrued liabilities | 120,981 | 65,838 | |||||
Amounts payable in respect of restructuring and other Special charges (note 17) | 7,130 | 7,068 | |||||
Asset retirement obligations | 988 | 714 | |||||
Total | $ | 188,443 | $ | 132,015 |
As of June 30, 2013 | As of June 30, 2012 | ||||||
Amounts payable in respect of restructuring and other Special charges (note 17) | $ | 2,919 | $ | 1,803 | |||
Other accrued liabilities* | 10,172 | 8,538 | |||||
Asset retirement obligations | 4,758 | 3,625 | |||||
Total | $ | 17,849 | $ | 13,966 |
As of June 30, 2013 | As of June 30, 2012 | ||||||
Long-term debt | |||||||
Term Loan | $ | 555,000 | $ | 585,000 | |||
Mortgage | 10,492 | 11,374 | |||||
565,492 | 596,374 | ||||||
Less: | |||||||
Current portion of long-term debt | |||||||
Term Loan | 41,250 | 30,000 | |||||
Mortgage | 10,492 | 11,374 | |||||
51,742 | 41,374 | ||||||
Non current portion of long-term debt | $ | 513,750 | $ | 555,000 |
As of June 30, 2013 | |||||||||||
Total benefit obligation | Current portion of benefit obligation* | Non-current portion of benefit obligation | |||||||||
CDT defined benefit plan | $ | 23,871 | $ | 535 | $ | 23,336 | |||||
CDT anniversary plan | 425 | 49 | 376 | ||||||||
CDT early retirement plan | — | — | — | ||||||||
IXOS defined benefit plans | 797 | — | 797 | ||||||||
Total | $ | 25,093 | $ | 584 | $ | 24,509 |
As of June 30, 2012 | |||||||||||
Total benefit obligation | Current portion of benefit obligation* | Non-current portion of benefit obligation | |||||||||
CDT defined benefit plan | $ | 21,461 | $ | 475 | $ | 20,986 | |||||
CDT anniversary plan | 457 | 67 | 390 | ||||||||
CDT early retirement plan | 69 | 69 | — | ||||||||
IXOS defined benefit plans | 698 | — | 698 | ||||||||
Total | $ | 22,685 | $ | 611 | $ | 22,074 |
* | The current portion of the benefit obligation has been included within "Accounts payable and accrued liabilities" in the Consolidated Balance Sheets. |
As of June 30, 2013 | As of June 30, 2012 | ||||||
Benefit obligation—as of June 30, 2012 | $ | 21,461 | $ | 18,231 | |||
Service cost | 457 | 326 | |||||
Interest cost | 888 | 873 | |||||
Benefits paid | (466 | ) | (441 | ) | |||
Actuarial loss | 278 | 5,179 | |||||
Foreign exchange (gain) loss | 1,253 | (2,707 | ) | ||||
Benefit obligation—as of June 30, 2013 | 23,871 | 21,461 | |||||
Less: Current portion | (535 | ) | (475 | ) | |||
Non current portion of benefit obligation | $ | 23,336 | $ | 20,986 |
Year Ended June 30, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Pension expense: | ||||||||||||
Service cost | $ | 457 | $ | 326 | $ | 350 | ||||||
Interest cost | 888 | 873 | 868 | |||||||||
Amortization of actuarial gains and losses | 277 | — | — | |||||||||
Net pension expense | $ | 1,622 | $ | 1,199 | $ | 1,218 |
As of June 30, 2013 | As of June 30, 2012 | ||||
Assumptions: | |||||
Salary increases | 2.50 | % | 2.50 | % | |
Pension increases | 2.00 | % | 2.00 | % | |
Discount rate | 3.50 | % | 4.00 | % | |
Employee fluctuation rate: | |||||
to age 30 | 1.00 | % | 1.00 | % | |
to age 35 | 0.50 | % | 0.50 | % | |
to age 40 | — | % | — | % | |
to age 45 | 0.50 | % | 0.50 | % | |
to age 50 | 0.50 | % | 0.50 | % | |
from age 51 | 1.00 | % | 1.00 | % |
Fiscal years ending June 30, | |||
2014 | $ | 535 | |
2015 | 591 | ||
2016 | 654 | ||
2017 | 728 | ||
2018 | 780 | ||
2019 to 2023 | 5,137 | ||
Total | $ | 8,425 |
1998 Stock Option Plan | 2004 Stock Option Plan | Centrinity Stock Option Plan | Gauss Stock Option Plan | Hummingbird Stock Option Plan | IXOS Stock Option Plan | Vista Stock Option Plan | |
Date of inception | Jun-98 | Oct-04 | Jan-03 | Jan-04 | Oct-06 | Mar-04 | Sep-04 |
Eligibility | Eligible employees and directors, as determined by the Board of Directors | Eligible employees, as determined by the Board of Directors | Eligible employees, consultants and directors, as determined by the Board of Directors | Eligible employees as determined by the Board of Directors | Eligible employees, and consultants of Hummingbird Inc. | Eligible employees as determined by the Board of Directors | Former employees, and consultants of Vista Inc. |
Options granted to date | 7,914,290 | 4,575,445 | 414,968 | 51,000 | 355,675 | 210,000 | 43,500 |
Options exercised to date | (5,254,180) | (2,204,850) | (401,468) | (38,000) | (25,309) | (59,250) | (24,625) |
Options cancelled to date | (2,555,110) | (686,875) | (13,500) | (13,000) | (319,695) | (144,750) | (18,875) |
Options outstanding | 105,000 | 1,683,720 | — | — | 10,671 | 6,000 | — |
Termination grace periods | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death | Immediately “for cause”; 90 days for any other reason; 180 days due to death |
Vesting schedule | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified | 25% per year, unless other- wise specified |
Exercise price range | $17.41 - $31.35 | $27.70 - $63.51 | n/a | n/a | $18.36 - $27.75 | $26.24 - $26.24 | n/a |
Expiration dates | 12/11/2013 to 2/3/2016 | 5/1/2015 to 4/26/2020 | n/a | n/a | 10/2/2013 to 10/2/2013 | 1/27/2014 to 1/27/2014 | n/a |
Options Outstanding | Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Number of Options Outstanding as of June 30, 2013 | Weighted Average Remaining Contractual Life (years) | Weighted Average Exercise Price | Number of Options Exercisable as of June 30, 2013 | Weighted Average Exercise Price | ||||||||||||
17.41 | - | 34.50 | 347,921 | 1.98 | $ | 29.67 | 347,921 | $ | 29.67 | ||||||||
37.22 | - | 46.70 | 296,800 | 5.03 | 44.63 | 120,550 | 43.90 | ||||||||||
48.39 | - | 52.44 | 323,125 | 5.46 | 51.99 | 116,875 | 51.31 | ||||||||||
52.74 | - | 58.20 | 277,545 | 6.26 | 53.85 | — | — | ||||||||||
59.27 | - | 59.27 | 67,500 | 6.58 | 59.27 | — | — | ||||||||||
60.35 | - | 60.35 | 420,000 | 5.60 | 60.35 | 85,000 | 60.35 | ||||||||||
61.63 | - | 63.51 | 72,500 | 6.59 | 63.45 | 2,500 | 61.63 | ||||||||||
17.41 | - | 63.51 | 1,805,391 | 4.96 | $ | 49.44 | 672,846 | $ | 39.97 |
Year Ended June 30, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Stock options | $ | 5,751 | $ | 4,567 | $ | 3,546 | ||||||
Performance Share Units (issued under LTIP) | 6,998 | 12,842 | 7,343 | |||||||||
Restricted Share Units (issued under LTIP) | 1,283 | — | — | |||||||||
Restricted Share Units (other) | 549 | 243 | — | |||||||||
Deferred Share Units (directors) | 985 | 415 | 295 | |||||||||
Restricted Stock Awards (legacy Vignette employees) | 9 | 30 | 124 | |||||||||
Total share-based compensation expense | $ | 15,575 | $ | 18,097 | $ | 11,308 |
Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (years) | Aggregate Intrinsic Value ($’000s) | |||||||||
Outstanding at June 30, 2012 | 2,147,151 | $ | 40.07 | |||||||||
Granted | 430,045 | 56.29 | ||||||||||
Exercised | (627,305 | ) | 22.64 | |||||||||
Forfeited or expired | (144,500 | ) | 46.94 | |||||||||
Outstanding at June 30, 2013 | 1,805,391 | $ | 49.44 | 4.96 | $ | 34,355 | ||||||
Exercisable at June 30, 2013 | 672,846 | $ | 39.97 | 3.44 | $ | 19,174 |
Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (years) | Aggregate Intrinsic Value ($’000s) | |||||||||
Outstanding at June 30, 2011 | 2,277,733 | $ | 24.51 | |||||||||
Granted | 944,500 | 54.84 | ||||||||||
Exercised | (1,022,556 | ) | 18.79 | |||||||||
Forfeited or expired | (52,526 | ) | 45.05 | |||||||||
Outstanding at June 30, 2012 | 2,147,151 | $ | 40.07 | 4.34 | $ | 26,541 | ||||||
Exercisable at June 30, 2012 | 960,151 | $ | 25.92 | 2.33 | $ | 23,093 |
Year Ended June 30, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Weighted–average fair value of options granted | $ | 16.78 | $ | 19.39 | $ | 17.89 | ||||||
Weighted-average assumptions used: | ||||||||||||
Expected volatility | 37 | % | 41 | % | 40 | % | ||||||
Risk–free interest rate | 0.66 | % | 0.69 | % | 1.70 | % | ||||||
Expected dividend yield | 0.3 | % | — | % | — | % | ||||||
Expected life (in years) | 4.35 | 4.62 | 4.30 | |||||||||
Forfeiture rate (based on historical rates) | 5 | % | 5 | % | 5 | % | ||||||
Average exercised share price | $ | 56.29 | $ | 49.79 | $ | 51.24 |
Year Ended June 30, | |||||||||||||||
Grants Made Under LTIP | Equity Instrument | Grant Date | End Date | Expected Total LTIP Expense | 2013 | 2012 | 2011 | ||||||||
Fiscal 2012 LTIP | PSU | 3/31/2010 | 9/15/2012 | 17,314 | 579 | 9,284 | 5,964 | ||||||||
Fiscal 2013 LTIP | PSU | 10/29/2010 | 9/15/2013 | 6,489 | 2,999 | 1,896 | 1,379 | ||||||||
Fiscal 2014 LTIP | PSU | 2/3/2012 | 9/15/2014 | 8,046 | 2,832 | 1,662 | — | ||||||||
Fiscal 2015 LTIP | PSU | 12/3/2012 | 9/15/2015 | 2,858 | 588 | — | — | ||||||||
Fiscal 2015 LTIP | RSU | 11/2/2012 | 9/15/2015 | 5,599 | 1,283 | — | — | ||||||||
40,306 | 8,281 | 12,842 | 7,343 |
Payments due between | |||||||||||||||||||
Total | Period ending June 30, 2014 | July 1, 2014— June 30, 2016 | July 1, 2016— June 30, 2018 | July 1, 2018 and beyond | |||||||||||||||
Long-term debt obligations | $ | 604,886 | $ | 65,092 | $ | 124,367 | $ | 415,427 | $ | — | |||||||||
Operating lease obligations* | 157,876 | 35,894 | 56,032 | 33,496 | 32,454 | ||||||||||||||
Purchase obligations | 7,778 | 4,605 | 2,864 | 309 | — | ||||||||||||||
$ | 770,540 | $ | 105,591 | $ | 183,263 | $ | 449,232 | $ | 32,454 |
Year Ended June 30, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Domestic income | $ | (20,525 | ) | $ | (13,064 | ) | $ | 9,039 | |||
Foreign income | 198,735 | 150,409 | 127,095 | ||||||||
Income before income taxes | $ | 178,210 | $ | 137,345 | $ | 136,134 |
Year Ended June 30, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current income taxes: | |||||||||||
Domestic | $ | 747 | $ | 6,147 | $ | 5,693 | |||||
Foreign | 34,739 | 84,816 | 25,017 | ||||||||
35,486 | 90,963 | 30,710 | |||||||||
Deferred income taxes (recoveries): | |||||||||||
Domestic | 3,126 | 6,470 | 1,351 | ||||||||
Foreign | (8,922 | ) | (85,262 | ) | (19,130 | ) | |||||
(5,796 | ) | (78,792 | ) | (17,779 | ) | ||||||
Provision for income taxes | $ | 29,690 | $ | 12,171 | $ | 12,931 |
Year Ended June 30, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Expected statutory rate | 26.5 | % | 27.25 | % | 29.25 | % | |||||
Expected provision for income taxes | $ | 47,226 | $ | 37,427 | $ | 39,819 | |||||
Effect of foreign tax rate differences | (27,026 | ) | (21,496 | ) | (10,258 | ) | |||||
Change in valuation allowance | 2,082 | 15,536 | (4,840 | ) | |||||||
Amortization of deferred charges | 10,922 | 11,112 | 8,535 | ||||||||
Effect of permanent differences | 6,008 | 6,902 | 1,577 | ||||||||
Effect of Canadian to US dollar functional currency election | — | (5,887 | ) | — | |||||||
Withholding taxes and other items | (2,093 | ) | 1,473 | (5,177 | ) | ||||||
Impact of internal reorganization of subsidiaries and integration of acquisitions | (7,429 | ) | (32,896 | ) | (16,725 | ) | |||||
$ | 29,690 | $ | 12,171 | $ | 12,931 |
June 30, | |||||||
2013 | 2012 | ||||||
Deferred tax assets | |||||||
Non-capital loss carryforwards | $ | 55,946 | $ | 47,516 | |||
Capital loss carryforwards | 3,010 | 3,002 | |||||
Undeducted scientific research and development expenses | 72,555 | 60,415 | |||||
Depreciation and amortization | 16,331 | 12,049 | |||||
Restructuring costs and other reserves | 20,325 | 11,274 | |||||
Deferred revenue | 58,471 | 55,267 | |||||
Other | 11,066 | 3,544 | |||||
Total deferred tax asset | $ | 237,704 | $ | 193,067 | |||
Valuation allowance | $ | (80,778 | ) | $ | (63,431 | ) | |
Deferred tax liabilities | |||||||
Scientific research and development tax credits | $ | (7,484 | ) | $ | (8,695 | ) | |
Deferred credits | — | (906 | ) | ||||
Acquired intangibles | (55,128 | ) | (11,040 | ) | |||
Other | (18,336 | ) | (18,181 | ) | |||
Deferred tax liabilities | $ | (80,948 | ) | $ | (38,822 | ) | |
Net deferred tax asset (liability) | $ | 75,978 | $ | 90,814 | |||
Comprised of: | |||||||
Current assets | $ | 11,082 | $ | 4,003 | |||
Long-term assets | 135,695 | 115,128 | |||||
Current liabilities | (1,127 | ) | (1,612 | ) | |||
Long-term liabilities | (69,672 | ) | (26,705 | ) | |||
$ | 75,978 | $ | 90,814 |
Unrecognized tax benefits as of July 1, 2011 | $ | 132,892 | |
Increases on account of current year positions | 5,279 | ||
Increases on account of prior year positions* | 65,994 | ||
Decreases due to settlements with tax authorities | (4,935 | ) | |
Decreases due to lapses of statutes of limitations | (42,949 | ) | |
Unrecognized tax benefits as of July 1, 2012 | $ | 156,281 | |
Increases on account of current year positions | 5,736 | ||
Increases on account of prior year positions** | 22,017 | ||
Decreases due to settlements with tax authorities | (5,138 | ) | |
Decreases due to lapses of statutes of limitations | (29,993 | ) | |
Unrecognized tax benefits as of June 30, 2013 | $ | 148,903 |
* | Included in these balances as of June 30, 2012 are acquired balances of $0.4 million relating to the acquisition of Global 360. |
** | Included in these balances as of June 30, 2013 are acquired balances of $8.8 million relating to the acquisition of EasyLink. |
Year Ended June 30, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Interest expense | $ | (736 | ) | $ | 9,383 | $ | 3,387 | |||||
Penalties expense (recovery) | 65 | (10,764 | ) | 75 | ||||||||
Total | $ | (671 | ) | $ | (1,381 | ) | $ | 3,462 |
As of June 30, 2013 | As of June 30, 2012 | ||||||
Interest expense accrued * | $ | 18,210 | $ | 19,316 | |||
Penalties accrued * | $ | 6,045 | $ | 4,040 |
* | These balances have been included within "Long-term income taxes payable" within the Consolidated Balance Sheets. |
• | Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. |
• | Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. |
June 30, 2013 | June 30, 2012 | ||||||||||||||||||||||
Fair Market Measurements using: | Fair Market Measurements using: | ||||||||||||||||||||||
June 30, 2013 | Quoted prices in active markets for identical assets/ (liabilities) | Significant other observable inputs | Significant unobservable inputs | June 30, 2012 | Quoted prices in active markets for identical assets/ (liabilities) | Significant other observable inputs | Significant unobservable inputs | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Derivative financial instrument asset (liability) (note 16) | $ | (3,170 | ) | n/a | $ | (3,170 | ) | n/a | $ | 283 | n/a | $ | 283 | n/a | |||||||||
$ | (3,170 | ) | n/a | $ | (3,170 | ) | n/a | $ | 283 | n/a | $ | 283 | n/a |
As of June 30, 2013 | As of June 30, 2012 | |||||||
Derivatives | Balance Sheet Location | Fair Value Asset (Liability) | Fair Value Asset (Liability) | |||||
Foreign currency forward contracts designated as cash flow hedges | Prepaid expenses and other current assets (Accounts payable and accrued liabilities) | $ | (3,170 | ) | $ | 283 |
Year Ended June 30, 2013 | ||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||
Foreign currency forward contracts | $ | (1,436 | ) | Operating expenses | $ | 2,017 | N/A | — | ||||||||||||
Year Ended June 30, 2012 | ||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||
Foreign currency forward contracts | $ | (1,909 | ) | Operating expenses | $ | (390 | ) | N/A | — |
Year Ended June 30, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Fiscal 2013 Restructuring Plan | $ | 15,754 | $ | — | $ | — | ||||||
Fiscal 2012 Restructuring Plan | 971 | 16,897 | — | |||||||||
Fiscal 2011 Restructuring Plan | (384 | ) | 1,160 | 8,524 | ||||||||
Fiscal 2010 Restructuring Plan | (2 | ) | (38 | ) | 4,620 | |||||||
Acquisition-related costs | 4,925 | 5,115 | 2,914 | |||||||||
Other charges | 2,770 | 1,389 | (482 | ) | ||||||||
Total | $ | 24,034 | $ | 24,523 | $ | 15,576 |
Fiscal 2013 Restructuring Plan | Workforce reduction | Facility costs | Total | ||||||||
Balance as of June 30, 2012 | $ | — | $ | — | $ | — | |||||
Accruals and adjustments | 9,970 | 5,784 | 15,754 | ||||||||
Cash payments | (6,713 | ) | (1,389 | ) | (8,102 | ) | |||||
Foreign exchange | (52 | ) | 1 | (51 | ) | ||||||
Balance as of June 30, 2013 | $ | 3,205 | $ | 4,396 | $ | 7,601 |
Fiscal 2012 Restructuring Plan | Workforce reduction | Facility costs | Total | ||||||||
Balance as of June 30, 2012 | $ | 4,422 | $ | 3,355 | $ | 7,777 | |||||
Accruals and adjustments | 1,155 | (184 | ) | 971 | |||||||
Cash payments | (5,201 | ) | (1,259 | ) | (6,460 | ) | |||||
Foreign exchange | (67 | ) | 74 | 7 | |||||||
Balance as of June 30, 2013 | $ | 309 | $ | 1,986 | $ | 2,295 |
Fiscal 2012 Restructuring Plan | Workforce reduction | Facility costs | Total | ||||||||
Balance as of June 30, 2011 | $ | — | $ | — | $ | — | |||||
Accruals and adjustments | 13,006 | 3,891 | 16,897 | ||||||||
Cash payments | (8,202 | ) | (486 | ) | (8,688 | ) | |||||
Foreign exchange | (382 | ) | (50 | ) | (432 | ) | |||||
Balance as of June 30, 2012 | $ | 4,422 | $ | 3,355 | $ | 7,777 |
Cash consideration paid | $ | 342,272 | |
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for the year ended June 30, 2013 | $ | 1,850 |
Current assets (inclusive of cash acquired of $26,941) | $ | 74,560 | |
Non-current assets | 35,024 | ||
Intangible customer assets | 126,600 | ||
Intangible technology assets | 70,500 | ||
Total liabilities assumed | (148,028 | ) | |
Total identifiable net assets | 158,656 | ||
Goodwill | 183,616 | ||
$ | 342,272 |
July 2, 2012— June 30, 2013 | ||||
Revenues | $ | 171,569 | ||
Net Income | $ | 10,288 |
Year Ended June 30, | ||||
2012 | ||||
Supplemental Unaudited Pro forma Information | ||||
Total revenues | $ | 1,389,132 | ||
Net income* | $ | 151,369 |
Cash consideration paid | $ | 256,597 | |
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for the year ended June 30, 2012 | $ | 924 | |
Current assets (inclusive of cash acquired of $10,944) | $ | 38,249 | ||
Non-current assets | 6,289 | |||
Intangible customer assets | 58,100 | |||
Intangible technology assets | 40,600 | |||
Total liabilities assumed | (88,575 | )* | ||
Total identifiable net assets | 54,663 | |||
Goodwill | 201,934 | |||
$ | 256,597 |
July 13, 2011— June 30, 2012 | ||||
Revenues | $ | 74,900 | ||
Net Income* | N/A |
Year ended June 30, | ||||||||
2012 | 2011 | |||||||
Supplemental Unaudited Pro forma Information | ||||||||
Total revenues | $ | 1,209,809 | $ | 1,125,366 | ||||
Net income** | $ | 128,924 | $ | 107,636 |
Cash consideration paid | $ | 20,461 | |
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for the year ended June 30, 2011 | $ | 318 |
Current assets (inclusive of cash acquired of $263) | $ | 954 | |
Non-current assets | 328 | ||
Intangible customer assets | 300 | ||
Intangible technology assets | 5,000 | ||
Total liabilities assumed | (2,867 | ) | |
Total identifiable net assets | 3,715 | ||
Goodwill | 16,746 | ||
$ | 20,461 |
March 15, 2011— June 30, 2011 | ||||
Revenues | $ | 311 | ||
Net Loss* | $ | (1,172 | ) |
Year ended June 30, | ||||||
2011 | 2010 | |||||
Supplemental Unaudited Pro forma Information | ||||||
Total revenues | $ | 1,035,175 | $ | 915,870 | ||
Net income | $ | 120,913 | $ | 88,425 |
Cash consideration paid | $ | 182,000 | |
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for the year ended June 30, 2011 | $ | 1,038 |
Current assets (inclusive of cash acquired of $13,343) | $ | 37,494 | |
Non-current assets | 14,281 | ||
Intangible customer assets | 34,300 | ||
Intangible technology assets | 40,700 | ||
Total liabilities assumed | (55,277 | ) | |
Total identifiable net assets | 71,498 | ||
Goodwill | 110,502 | ||
$ | 182,000 |
February 18, 2011— June 30, 2011 | ||||
Revenues | $ | 28,731 | ||
Net Loss* | $ | (5,870 | ) |
Year ended June 30, | ||||||
2011 | 2010 | |||||
Supplemental Unaudited Pro forma Information | ||||||
Total revenues | $ | 1,086,461 | $ | 980,228 | ||
Net income** | $ | 114,054 | $ | 78,186 |
Cash consideration paid | $ | 70,514 | |
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for year ended June 30, 2011 | $ | 1,146 |
Current assets (inclusive of cash acquired of $13,293) | $ | 29,431 | |
Non-current assets | 3,267 | ||
Intangible customer assets | 15,400 | ||
Intangible technology assets | 27,300 | ||
Total liabilities assumed | (43,912 | ) | |
Total identifiable net assets | 31,486 | ||
Goodwill | 39,028 | ||
$ | 70,514 |
October 27, 2010— June 30, 2011 | ||||
Revenues | $ | 43,151 | ||
Net Loss* | $ | (1,978 | ) |
Year ended June 30, | ||||||
2011 | 2010 | |||||
Supplemental Unaudited Pro forma Information | ||||||
Total revenues | $ | 1,053,884 | $ | 974,410 | ||
Net income** | $ | 118,649 | $ | 88,174 |
Year Ended June 30, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Revenues: | |||||||||||
Canada | $ | 103,076 | $ | 103,915 | $ | 85,135 | |||||
United States | 611,902 | 513,530 | 445,511 | ||||||||
United Kingdom | 131,745 | 124,601 | 103,255 | ||||||||
Germany | 138,073 | 130,494 | 124,248 | ||||||||
Rest of Europe | 223,444 | 212,587 | 186,473 | ||||||||
All other countries | 155,096 | 122,346 | 88,681 | ||||||||
Total revenues | $ | 1,363,336 | $ | 1,207,473 | $ | 1,033,303 |
As of June 30, 2013 | As of June 30, 2012 | ||||||
Long-lived assets: | |||||||
Canada | $ | 70,305 | $ | 67,971 | |||
United States | 185,240 | 8,924 | |||||
United Kingdom | 18,694 | 42,211 | |||||
Germany | 5,466 | 6,195 | |||||
Rest of Europe | 167,045 | 265,318 | |||||
All other countries | 5,229 | 3,101 | |||||
Total | $ | 451,979 | $ | 393,720 |
Year Ended June 30, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Cash paid during the period for interest | $ | 16,299 | $ | 15,305 | $ | 8,542 | ||||||
Cash received during the period for interest | $ | 1,439 | $ | 1,396 | $ | 1,203 | ||||||
Cash paid during the period for income taxes | $ | 52,827 | $ | 15,864 | $ | 29,551 |
Year Ended June 30, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Transactional foreign exchange gain (loss) | $ | (2,635 | ) | $ | 3,642 | $ | (6,574 | ) | |||
Gain (loss) on sale of marketable securities | — | — | 443 | ||||||||
Other | 162 | (93 | ) | 112 | |||||||
$ | (2,473 | ) | $ | 3,549 | $ | (6,019 | ) |
Year Ended June 30, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Basic earnings per share | ||||||||||||
Net income | $ | 148,520 | $ | 125,174 | $ | 123,203 | ||||||
Basic earnings per share | $ | 2.53 | $ | 2.16 | $ | 2.16 | ||||||
Diluted earnings per share | ||||||||||||
Net income | $ | 148,520 | $ | 125,174 | $ | 123,203 | ||||||
Diluted earnings per share | $ | 2.51 | $ | 2.13 | $ | 2.11 | ||||||
Weighted-average number of shares outstanding | ||||||||||||
Basic | 58,604 | 57,890 | 57,077 | |||||||||
Effect of dilutive securities | 458 | 844 | 1,183 | |||||||||
Diluted | 59,062 | 58,734 | 58,260 | |||||||||
Excluded as anti-dilutive* | 1,131 | 368 | 48 |
By: | /s/ MARK BARRENECHEA |
Mark Barrenechea President and Chief Executive Officer (Principal Executive Officer) |
By: | /s/ MARK BARRENECHEA |
Mark Barrenechea President and Chief Executive Officer (Principal Executive Officer) | |
/s/ PAUL MCFEETERS | |
Paul McFeeters Chief Financial Officer and Chief Administrative Officer (Principal Financial Officer) | |
/s/ SUJEET KINI | |
Sujeet Kini Chief Accounting Officer (Principal Accounting Officer) |
Signature | Title | Date | ||
/s/ MARK BARRENECHEA | Director, President and Chief Executive Officer (Principal Executive Officer) | August 1, 2013 | ||
Mark Barrenechea | ||||
/S/ P. THOMAS JENKINS | Chairman of the Board | August 1, 2013 | ||
P. Thomas Jenkins | ||||
/S/ RANDY FOWLIE | Director | August 1, 2013 | ||
Randy Fowlie | ||||
/S/ GAIL E. HAMILTON | Director | August 1, 2013 | ||
Gail E. Hamilton | ||||
/S/ BRIAN J. JACKMAN | Director | August 1, 2013 | ||
Brian J. Jackman | ||||
/S/ DEBORAH WEINSTEIN | Director | August 1, 2013 | ||
Deborah Weinstein | ||||
/S/ STEPHEN J. SADLER | Director | August 1, 2013 | ||
Stephen J. Sadler | ||||
/S/ MICHAEL SLAUNWHITE | Director | August 1, 2013 | ||
Michael Slaunwhite | ||||
/S/ KATHARINE B. STEVENSON | Director | August 1, 2013 | ||
Katharine B. Stevenson |
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1. | DEFINITIONS |
(a) | “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. For the purposes of this definition and Agreement, the term “Control” means the possession, direct or indirect, of the power to direct or |
(b) | "Agreement" means this Employment Agreement as may be amended or supplemented from time to time, including any and all schedules annexed hereto; |
(c) | "Annual Base Salary" has the meaning ascribed to that term in Section 6(a) hereof; |
(d) | "Board of Directors" means the board of directors of Open Text Corporation as may be constituted from time to time, and "Directors" means the directors of Open Text Corporation; |
(e) | "Change of Control" means either of the following events: |
(i) | the sale of all or substantially all of the assets of Open Text Corporation; or |
(ii) | any transaction whereby any person, together with Affiliates and Associates of such person, or any group of persons acting in concert (collectively, "Acquiror" or "Acquirors"), acquires beneficial ownership of more than 50% of the issued common shares of Open Text Corporation on a fully diluted basis, or any transaction as a result of which beneficial ownership of common shares constituting more than 50% in the aggregate of the issued common shares of Open Text Corporation on a fully diluted basis cease to be held by persons who are shareholders of Open Text Corporation as at the date hereof or by Affiliates or Associates of such present shareholders; |
(f) | "Compensation Committee" means the compensation committee of the Board of Directors of Open Text Corporation as may be constituted from time to time; |
(g) | "Date of Termination" shall mean the date of termination of the Executive's employment, whether by death of the Executive, by the Executive or by the Corporation pursuant to the terms of this Agreement; |
(h) | "Disability" has the meaning ascribed to that term in Section 12(b) hereof; |
(i) | "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time; |
(j) | "Incumbent Director" shall mean any member of the Board of Directors who was a member of the Board of Directors immediately prior to a Change of Control and any successor to an Incumbent Director who was recommended or appointed to succeed any Incumbent Director by the affirmative vote of the Directors when that affirmative vote includes the affirmative vote of a majority of the Incumbent Directors then on the Board of Directors; |
(k) | "Just Cause" shall mean: |
(i) | the failure by the Executive to perform his duties according to the terms of his employment (other than those (A) that follow a demotion in his position or duties or (B) resulting from the Executive's Disability) after the Corporation has given the Executive reasonable notice of such failure and a reasonable opportunity to correct it; |
(ii) | the engaging by the Executive in any act that is materially injurious to the Corporation, monetarily or otherwise, but not including, following a Change of Control, the expression of opinions contrary to those directors of the Corporation who are not Incumbent Directors or those of the Acquirors; |
(iii) | the engaging by the Executive in any act of dishonesty resulting or intended to result directly or indirectly in personal gain of the Executive at the Corporation's expense, including the failure by the Executive to honor his fiduciary duties to the Corporation and his duty to act in the best interests of the Corporation; |
(iv) | the failure by the Executive to comply with the provisions of Section 12(d) where the Executive elects to terminate his employment with the Corporation unless such termination of employment is properly given in accordance with the terms of Section 15(b) hereof; |
(v) | the failure of the Executive to abide by the terms of any resolution passed by the Board of Directors; or |
(vi) | the failure by the Executive to abide by the policies, procedures and codes of conduct of Open Text Inc. and the Corporation. |
(l) | "Person" or "persons" includes an individual, sole proprietorship, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, and a natural person in his capacity as trustee, executor, administrator or other legal representative; |
(m) | "Parachute Event" means the occurrence of the following without the Executive's written consent (except in connection with the termination of the employment of the Executive for Just Cause or Disability or termination of the Executive's employment because of the death of the Executive): |
(i) | a material change (other than those that are consistent with a promotion) in the Executive's position or duties, responsibilities, title or office in effect immediately prior to the Change of Control (except for a change in any position or duties as a director of the Corporation), which includes any removal of the Executive from or any failure to re-elect or re-appoint the Executive to any such positions or offices; |
(ii) | A material reduction by the Corporation or any of its subsidiaries of the Executive's salary, benefits or any other form of remuneration payable by the Corporation or |
(iii) | Any material failure by the Corporation or its subsidiaries to provide any benefit, bonus, profit sharing, incentive, remuneration or compensation plan, stock ownership or purchase plan, pension plan or retirement plan in which the Executive is participating or entitled to participate immediately prior to a Change of Control, or the Corporation or its subsidiaries taking any action or failing to take any action that would materially and adversely affect the Executive's participation in or materially reduce his rights or benefits under or pursuant to any such plan; or |
(iv) | Any other material breach by the Corporation of this Agreement. |
(n) | "Voluntary Termination" means the termination of the Executive's employment with the Corporation by the Executive at his discretion in accordance with the provisions of Section 12(d) of this Agreement. |
2. | INTENTIONALLY DELETED |
3. | TERM |
4. | DUTIES |
(a) | devote his full time, attention, and best efforts to the business, affairs, and goodwill of |
(b) | perform those duties that may be assigned to the Executive diligently and faithfully to the best of the Executive's abilities and in the best interests of the Corporation; and |
(c) | use his best efforts to promote the interest and goodwill of the Corporation. |
5. | REPORTING PROCEDURES |
6. | REMUNERATION AND BENEFITS |
(a) | The Corporation shall pay to the Executive as compensation for his services provided hereunder an annual base salary ("Annual Base Salary") for each year of the term of this Agreement, which shall be determined by the Reporting Manager and the CEO and set out in a separate document, subject to the provisions of Section 8, and which shall be exclusive of bonuses, benefits and other compensation as provided for herein. The Annual Base Salary shall be payable in accordance with the Corporation's regular payroll practices for senior executives or in such other manner as may be mutually agreed upon, less, in any case, all applicable deductions or withholdings as required by law. As of the date of this Agreement, the Annual Base Salary is $350,000 USD. |
(b) | The Corporation shall provide the Executive with employee benefits comparable to those provided by the Corporation from time to time to other senior executives of the Corporation. Benefits to be enjoyed by the Executive during the term of this Agreement shall include, but not be limited to, those benefits set forth in Schedule “A”, as amended from time to time, and shall include reimbursement of any properly incurred expenses as provided for in Section 11 hereof. |
(c) | You are eligible for inclusion in the Company LTIP plan as it is offered, from time to time. However, participation is not an entitlement, but rather reviewed and approved by senior management and the board of directors at the beginning of each LTIP plan period. Providing the Board of Directors approve subsequent LTIP plans, your plan value will be $290,000 USD. Further details regarding these long-term incentive plans will be distributed to you in the near future. |
7. | ANNUAL PERFORMANCE BONUS |
8. | SALARY AND/OR BONUS ADJUSTMENTS |
9. | OPTIONS |
10. | VACATION |
11. | EXPENSES |
12. | TERMINATION |
(a) | For Just Cause |
(b) | For Disability |
(i) | This Agreement and the Executive's employment hereunder may be immediately terminated by the Corporation by notice to the Executive if the Executive is determined to suffer from disability (hereinafter referred to as “Disability”). The Executive shall be deemed to suffer from Disability if in any year during the employment period, because of ill health, physical or mental disability, or for other causes beyond the control of the Executive, the Executive has been continuously unable or unwilling or has failed to perform the Executive's duties for 120 consecutive days, or if, during any year of the employment period, the Executive has been unable or unwilling or has failed to perform his duties for a total of 180 days, consecutive or not. The CEO, acting reasonably (subject to Section 33 below), shall finally determine if the Executive is suffering from ill health, physical or mental disability or other causes beyond his control during the time periods as hereinbefore set forth in the event of any dispute between the Executive and the Corporation concerning the occurrence of Disability for purposes of this Section. |
(ii) | Notwithstanding any short term or long term corporate benefits or insurance policies relating to disability maintained by the Corporation at the relevant time, if during any period of ill health, physical or mental disability or for other causes beyond the control of the Executive, the Executive has been continuously unable or unwilling or has failed to perform the Executive's duties less than 120 consecutive days (the “Short-Term Illness”), the Executive shall continue to receive all amounts of remuneration and benefits otherwise payable to and enjoyed by the Executive under this Agreement less any and all amounts received by and/or payable to the Executive in connection with benefits paid and/or payable as a result of such Short-Term Illness. |
(iii) | Upon termination of this Agreement and the Executive's employment hereunder as a result of Disability, the Corporation shall pay to the Executive the severance payment provided for in Subsection 13(b) hereof less any and all amounts received by and/or payable to the Executive in connection with benefits paid and/or payable as a result of the Disability. |
(iv) | The term "any year of the employment period" means any period of 12 consecutive months during the employment period. |
(c) | For Death |
(d) | Voluntary Termination by Executive |
(e) | Termination by Corporation Other than For Just Cause, Disability or Death |
13. | SEVERANCE PAYMENTS |
(a) | Upon termination of the Executive's employment for Just Cause, the Executive shall not be entitled to any severance or other payment other than Annual Base Salary earned by the Executive before the Date of Termination calculated pro rata up to and including the Date of Termination and all outstanding and accrued vacation pay to the Date of Termination. Upon termination of the Executive's employment: (i) for death; or (ii) by the voluntary termination of employment by the Executive pursuant to Section 12(d) hereof, the Executive shall not be entitled to any severance or other payment other than Annual Base Salary and any Performance Bonus earned by the Executive before the Date of Termination calculated pro rata up to and including the Date of Termination (which under Section 12(d) shall be as defined therein) and all outstanding and accrued vacation pay to the Date of Termination. |
(b) | If the Executive's employment is terminated by the Corporation for any other reason other than the reasons set forth in Section 12(a) the Executive shall be entitled to an amount equal to the total of: |
(i) | All outstanding base salary earned before the Date of Termination, less any amounts that the Executive received in connection with benefits paid or payable as a result of Disability if applicable; |
(ii) | Any Performance Bonus which has been earned by the Executive before the |
(iii) | Additional payments based on the Executive's length of service with the Corporation, calculated as the Executive's monthly base salary for the number of months set forth in the chart on Exhibit 1, less any amounts received by and/or payable to the Executive in connection with benefits paid or payable as a result of the Disability if applicable (for purposes of this section 12.b.(iii), the Executive's service start date is October 1, 2012); |
(iv) | An amount equal to 1/12 of the Performance Bonus payments earned by the Executive during the bonus year preceding the current bonus year times the number of months referred to in the chart on Exhibit 1, based on the Executive's length of service with the Company. |
(v) | All outstanding and accrued vacation pay; |
(vi) | All properly incurred and reasonable business expenses owing to the Executive as of the Date of Termination; and |
(vii) | The Executive's benefits provided for in Section 6(b) shall continue only through the Date of Termination. If the Executive elects to continue his health and dental insurance coverage pursuant to COBRA, reimbursement for the COBRA premiums for Executive and his dependents for the number of months corresponding to the months of the Executive's severance payments as set forth in the chart on Exhibit 1. |
(c) | Except as expressly stipulated in Sections 12(d) or 15 hereof or in this Section 13(c), any options which have not vested as of the Date of Termination (being in the case where the Corporation gives notice, the date specified by the Corporation as the date on which the Executive's employment will terminate) shall terminate and be of no further force and effect as of the Date of Termination and neither any period of notice nor any payment in lieu thereof upon termination of employment hereunder shall be considered as extending the period of employment for the purposes of vesting of options notwithstanding anything to the contrary in any other agreement between the Corporation and the Executive. Notwithstanding anything contained in this Section 13, in the event of termination by the Corporation other than for Just Cause, the Executive shall have the right to exercise any options which are vested as at the Date of Termination for the 90 Day Period as defined in Section 12(d). Any unvested options which would have otherwise vested during such 90 Day Period shall continue to vest during that period and to the extent any unvested options have vested during such 90 Day Period, the Executive shall also be entitled to exercise those options within a rolling 90 day period after the date of vesting of such options, which period will not exceed 180 days following the Date of Termination. In addition, notwithstanding anything contained in this Section 13 or elsewhere in this Agreement, in the event of termination due to death of the Executive, the estate of the Executive shall be entitled, at any time during the period which is 12 months following the date of death of the Executive (the “12 Month Period”), to exercise any options which have vested as at the date of death of the Executive. In addition, any unvested options which would have otherwise vested during such 12 Month Period shall continue to vest during that period and to the extent of any unvested options have vested during such period, the Executive's estate shall be entitled to exercise those options within a period which starts on the day of vesting and ends 12 months from the date of death of the Executive. |
14. | NO FURTHER ENTITLEMENTS |
15. | OPTION ACCELERATION AND SEVERANCE PAYMENTS ON CHANGE OF CONTROL |
(a) | Termination by the Corporation |
i. | such payments on account of severance as provided for under Section 13(b) of this Agreement; and |
ii. | notwithstanding anything to the contrary in Section 13 hereof or in this Agreement, all options granted by the Corporation to the Executive shall, following the giving of any notice by the Corporation under this Section 15(a), be deemed to vest immediately and shall be exercisable by the Executive for a period of 90 days following the giving of such notice by the Corporation hereunder. |
(b) | Termination by Executive |
i. | such payments on account of severance as provided for under Section 13(b) of this Agreement; |
ii. | notwithstanding anything to the contrary in Section 13 hereof or in this Agreement, all options granted by the Corporation to the Executive shall, following the giving of proper notice by the Executive, under this Section 15(b), be deemed to vest immediately and shall be exercisable by the Executive for a period of 90 days following the giving of such notice. |
16. | DISCLOSURE |
17. | NON-COMPETITION/NON-SOLICITATION/PROPRIETARY RIGHTS AGREEMENT |
18. | RETURN OF MATERIALS |
19. | GOVERNING LAW |
20. | SEVERABILITY |
21. | ENFORCEABILITY |
22. | ASSIGNMENT OF AGREEMENT |
23. | SUCCESSORS |
24. | NOTICES |
(i) | If to the Corporation: |
(ii) | If to the Executive: |
25. | LEGAL ADVICE |
26. | RESIGNATION OF DIRECTORSHIPS, ETC. |
27. | NO DEROGATION |
28. | CURRENCY |
29. | Withholding |
30. | NON-DISPARAGEMENT |
(a) | The Executive acknowledges and agrees that the Corporation may collect, use and disclose his personal information for purposes relating to his employment with the Corporation. The purposes of such collection, use and disclosure include, but are not limited to: |
(i) | ensuring that the Executive is paid for his services to the Corporation which includes disclosure to third party payroll providers; |
(ii) | administering and/or facilitating the provision of any benefits to which the Executive is or may become entitled to, including bonuses, medical, dental, disability and life insurance benefits, pension, group Savings and/or stock options. This shall include the disclosure of the Executive's personal information to the Corporation's third party service providers and administrators; |
(iii) | compliance by the Corporation with any regulatory reporting and withholding requirements relating to the Executive's employment; |
(iv) | in the event of a sale or transfer of all or part of the shares or assets of the Corporation or its subsidiaries or Affiliates, disclosing to any potential acquiring organization the Executive's personal information solely for the purposes of determining the value of the Corporation and its assets and liabilities and to evaluate the Executive's position in the Corporation. If the Executive's personal information is disclosed to any potential acquiring organization, the Corporation will require the potential acquiring organization to agree to protect the privacy of the Executive's personal information in a manner that is consistent with any policy of the Corporation dealing with privacy that may be in effect from time to time and/or any applicable law that may be in effect from time to time; |
(v) | compliance by the Corporation of its obligations to report improper or illegal conduct by any of its directors, officers, employees or agents under any applicable securities, criminal or other law; and |
(vi) | monitoring the Executive's access to the Corporation's electronic media services in order to ensure that the use of such services is in compliance with the Corporation's policies and procedures and is not in violation of any applicable laws. |
(b) | If the Executive's specific consent to the collection, use or disclosure of his personal information is required in the future, the Executive hereby agrees to provide such consent, and if the Executive refuses to provide or withdraws his consent, the Executive acknowledges that his employment and/or his entitlement to certain employment benefits may be negatively affected. |
41. | Counterparts |
) |
(i) | reimbursement of reasonable cell phone expenses consistent with corporate policy; |
(ii) |
(iii) | a $5,000 perquisite allowance per fiscal year, which may be used for reimbursement of the following types of services or fees: |
• | Financial planning |
• | Tax planning |
• | Estate planning |
• | Athletic/Health Club |
• | Additional Life Insurance |
(iv) | the services of Medisys Health Group Inc., for the purposes of obtaining mandatory and regular Health Examinations. |
A. | I understand and agree that I have a responsibility to protect and avoid the unauthorized use or disclosure of confidential information of the Company; and |
B. | I have a responsibility not to solicit or entice away from the Company any customer of the Company or any employee of the Company. |
I. | Confidential Information. For purposes of this Agreement, the term “confidential information” means all information that is not generally known and which I obtained from the Company, or learn, discover, develop, conceive or create during the term of my employment with the Company, and which relates directly to the business or to assets of the Company. Confidential information includes, but is not limited to: inventions, discoveries, know-how ideas, computer programs, designs, algorithms, processes and structures, product information, research and development information, lists of clients and other information related thereto, financial data and information, business plans and processes, and any other information of the Company that the Company informs me, or which I should know by virtue of my position or the circumstances in which I learned it, is to be kept confidential. Confidential information also includes information obtained by the Company in confidence from its vendors or its clients. Confidential information may or may not be labeled as “confidential”. If I am unsure as to whether information is “confidential”, I will as my manager for assistance. |
A. | To keep confidential and hold in secrecy and not disclose, divulge, publish, reveal or otherwise make known, directly or indirectly, or suffer or permit to be disclosed, divulged, published, revealed or otherwise made known to any person whatsoever, or used (except for the benefit and proper purposes of the Company), and shall faithfully do all in my power to assist the Company in holding in secrecy all of the Company’s confidential information as defined above. |
B. | To keep confidential and hold in secrecy and not disclose, divulge, publish, reveal or otherwise make known, directly or indirectly, or suffer or permit to be disclosed, divulged, revealed or otherwise made known to any person whatsoever, or used (except for the benefit and proper purposes of the Company) any and all secrets or confidential information related to the Company’s |
II. | Agreement Not to Solicit. I agree that while I am an employee of the Company and for six (6) months thereafter that I will: |
A. | not solicit or entice or attempt to solicit or entice away from the Company any of the employees of the Company to enter into employment or service with any person, business, firm or corporation other than the Company. |
B. | not solicit or entice or attempt to solicit or entice away from the Company any customer or any other person, firm or corporation dealing with the Company. |
III. | Return of Documents. Upon the cessation of my employment with the Company for any reason, I agree to return to the Company all records, documents, memoranda, or other papers, copies or recordings, tapes, disks containing software, computer source code listings, routines, file layouts, record layouts, system design information, models manuals, documentation and notes as are in my possession or control. I acknowledge and agree that all such items are strictly confidential and are the sole and exclusive property of the Company. |
IV. | General. |
A. | I further represent and warrant that I have not entered into any Agreement with any previous or present employer which would prevent me from accepting employment with the Company or which would prevent me from lawfully executing this Agreement. |
B. | I understand that the obligations outlined in this Agreement are the concern and responsibility of all employees of the Company. I agree to report in writing any violations of these policies to my manager or to the SVP, Global Human Resources. |
C. | All the provisions of this Agreement will be deemed severable, and if any part of any provision is held illegal, void or invalid under applicable law, such provision may be changed to the extent reasonably necessary to make the provision, as so changed, legal, valid and binding. If any provision of this Agreement is held illegal, void of invalid in its entirety, the remaining provisions of this Agreement will not in any way be affected or impaired, but will remain binding in accordance with its terms. |
D. | This Agreement and all the rights and obligations arising herefrom shall be interpreted and applied in accordance with the laws of the Province of Ontario and in the courts of the Province of Ontario there shall be exclusive jurisdiction to determine all disputes relating to this Agreement and all the rights and obligations created hereby. I hereby irrevocably attorn to the jurisdiction of the courts of the Province of Ontario. |
E. | I acknowledge that my employment with the Company is contingent on my acceptance and my observance of this Agreement, and that such employment is adequate and sufficient consideration to bind me to all of the covenants and agreements made by me under this Agreement. |
Length of Service (years) | Severance Payments in Months |
Less than 10 years of employment | 12 months |
More than 10 years of employment | 12 months, plus one (1) additional month for each year of employment in excess of 10 years, up to a maximum of 24 months |
Executive Title | Required Equity Ownership |
Executive Chairman* | 4x base salary |
CEO/President* | 4x base salary |
Executive Leadership Team | 1x base salary |
(i) | reimbursement of reasonable cell-phone or Blackberry expenses consistent with corporate policy; |
(ii) | each fiscal year you will be entitled to a USD$5,000 perquisite allowance which may be used for reimbursement of the following types of services or fees: |
• | Financial planning |
• | Tax planning |
• | Estate planning |
• | Athletic/Health Club |
(iii) | the services of Medisys Health Group Inc, or a provider of your choice (Medcam), shall be retained to provide annual mandatory and regular Health Examinations to our senior executive team. |
___________________________ [Name of Witness] |
Executive Title | Required Equity Ownership |
Executive Chairman* | 4x base salary |
CEO/President* | 4x base salary |
Executive Leadership Team | 1x base salary |
(i) | reimbursement of reasonable cell-phone or Blackberry expenses consistent with corporate policy; |
(ii) | each fiscal year you will be entitled to a USD$5,000 perquisite allowance which may be used for reimbursement of the following types of services or fees: |
• | Financial planning |
• | Tax planning |
• | Estate planning |
• | Athletic/Health Club |
(iii) | the services of Medisys Health Group Inc, or a provider of your choice (Medcam) shall be retained to provide annual mandatory and regular Health Examinations to our senior executive team. |
1. | Employment |
2. | Chairman Role |
3. | Employment Compensation |
4. | Chairman Compensation |
5. | Insurance and Indemnification |
6. | Acknowledgement |
7. | General |
Corporation Name | Jurisdiction |
Easylink Services Australia Pty Limited | Australia |
Global 360 (Australia) Pty Limited | Australia |
Metastorm Pty Limited | Australia |
Open Text Pty Limited | Australia |
Xpedite Systems Pty Limited | Australia |
Open Text Software Austria GmbH | Austria |
Easylink Do Brasil Comunicacoes Ltda | Brazil |
Open Text Brasil Comercio De Software LTDA | Brazil |
8493642 Canada Inc. | Canada |
Open Text Canada Ltd. | Canada |
Open Text Conseil Inc. | Canada |
Open Text Software Technology (Shanghai) Co., Limited | China |
GN Comtext (Cyprus) Ltd | Cyprus |
Open Text s.r.o. | Czech Republic |
Easylink Services International Corporation | Delaware, USA |
Easylink Services Latin America, Inc. | Delaware, USA |
Easylink Services USA, Inc. | Delaware, USA |
Open Text Holdings Inc. | Delaware, USA |
Open Text Inc. | Delaware, USA |
Open Text USA Inc. | Delaware, USA |
Vignette Partnership LP | Delaware, USA |
Xpedite Systems Holdings, Inc. | Delaware, USA |
Xpedite Systems Worldwide, Inc. | Delaware, USA |
Xpedite Systems, LLC | Delaware, USA |
Open Text A/S | Denmark |
Easylink Services International Limited | England & Wales |
Global 360 UK Limited | England & Wales |
Hummingbird UK Limited | England & Wales |
ICCM Professional Services Ltd. | England & Wales |
Metastorm Limited | England & Wales |
Metastorm UK Limited | England & Wales |
Open Text UK Limited | England & Wales |
Resonate KT Ltd. | England & Wales |
StreamServe Limited | England & Wales |
Sysgenics Limited | England & Wales |
Xpedite Systems (UK) Limited | England & Wales |
Open Text OY | Finland |
Easylink Services (France) S.A.R.L. | France |
Nstein Technologies France S.A.S.U. | France |
Open Text SARL | France |
Xpedite Systems Participations E.U.R.L. | France |
Xpedite Systems SA | France |
Easylink Services (Deutschland) GMBH | Germany |
Global 360 Germany GmbH | Germany |
Open Text Document Technologies GmbH | Germany |
Open Text Software GmbH | Germany |
Xpedite Systems GmbH | Germany |
Easylink Services (Hong Kong) Limited | Hong Kong |
Global 360 China Limited | Hong Kong |
Open Text (Hong Kong) Limited | Hong Kong |
Xpedite Systems Limited | Hong Kong |
Easylink Services Corporation India Private Limited | India |
Open Text Corporation India Private Limited | India |
Open Text Technologies India Private Limited | India |
Vignette India Private Limited | India |
Open Text Ireland Limited | Ireland |
Open Text S.r.l. | Italy |
Xpedite Systems S.r.l. | Italy |
Easylink Services K.K. | Japan |
Open Text K.K. | Japan |
Xpedite Inc. | Japan |
Open Text Finance S.a.r.l. | Luxembourg |
Open Text SA | Luxembourg |
The Easylink Services Corporation SDN. BHD. | Malaysia |
Xpedite Systems Incorporated (Malaysia) SDN. BHD. | Malaysia |
Metastorm Government Solutions, LLC | Maryland |
Open Text European Holdings Coöperatief U.A. | Netherlands |
Open Text International B.V. | Netherlands |
StreamServe S.a.r.l. B.V. | Netherlands - Luxembourg |
Open Text New Zealand Limited | New Zealand |
Xpedite Systems Limited | New Zealand |
Open Text ULC | Nova Scotia, Canada |
Operitel Corporation | Ontario, Canada |
Open Text Venture Capital Investment Limited Partnership | Ontario, Canada |
2016090 Ontario Inc. | Ontario, Canada |
2016091 Ontario Inc. | Ontario, Canada |
Open Text Sp.z.o.o. | Poland |
Nstein Technologies Inc. | Quebec, Ontario |
Easylink Services Korea Corporation | Republic of Korea |
Xpedite, Ltd | Republic of Korea |
Easylink Services Corp. Pte Ltd | Singapore |
Open Text (Asia) Pte Limited | Singapore |
Xpedite Systems Pte Ltd | Singapore |
Open Text South Africa Pty Limited | South Africa |
Global 360 Spain S.L.U. | Spain |
Open Text Software S.L.U. | Spain |
Xpedite Systems Spain, SA | Spain |
Open Text AB | Sweden |
StreamServe Development AB | Sweden |
Open Text AG | Switzerland |
Xpedite Systems AG | Switzerland |
Open Text Public Sector Solutions, Inc | Virginia, USA |
1. | I have reviewed this Annual Report on Form 10-K of Open Text Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ MARK BARRENECHEA | |
Mark Barrenechea President and Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of Open Text Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ PAUL MCFEETERS | |
Paul McFeeters Chief Financial Officer and Chief Administrative Officer |
/s/ MARK BARRENECHEA |
Mark Barrenechea President and Chief Executive Officer |
/s/ PAUL MCFEETERS |
Paul McFeeters Chief Financial Officer and Chief Administrative Officer |
Income Taxes (Components Of The Deferred Tax Assets And Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Deferred tax assets | ||
Non-capital loss carryforwards | $ 55,946 | $ 47,516 |
Capital loss carryforwards | 3,010 | 3,002 |
Undeducted scientific research and development expenses | 72,555 | 60,415 |
Depreciation and amortization | 16,331 | 12,049 |
Restructuring costs and other reserves | 20,325 | 11,274 |
Deferred revenue | 58,471 | 55,267 |
Other | 11,066 | 3,544 |
Total deferred tax asset | 237,704 | 193,067 |
Valuation allowance | (80,778) | (63,431) |
Deferred tax liabilities | ||
Scientific research and development tax credits | (7,484) | (8,695) |
Deferred credits | 0 | (906) |
Acquired intangibles | (55,128) | (11,040) |
Other | (18,336) | (18,181) |
Deferred tax liabilities | (80,948) | (38,822) |
Net deferred tax asset (liability) | 75,978 | 90,814 |
Current assets | 11,082 | 4,003 |
Long-term assets | 135,695 | 115,128 |
Current liabilities | 1,127 | 1,612 |
Long-term liabilities | $ 69,672 | $ 26,705 |
Derivative Instruments And Hedging Activities (Fair Value Of Derivative Instruments In The Condensed Consolidated Balance Sheets) (Details) (USD $)
|
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Notional amount of forward contracts held to sell U.S. dollars in exchange for Canadian dollars | $ 99,600,000 | $ 99,600,000 |
Prepaid Expenses and Other Current Assets [Member] | Cash Flow Hedging [Member] | Designated As Hedging Instrument [Member] | Foreign Exchange Forward [Member]
|
||
Derivatives, Fair Value [Line Items] | ||
Fair Value Asset (Liability) | $ (3,170,000) | $ 283,000 |
Segment Information (Entity-Wide Disclosure On Geographic Areas, Long-Lived Assets In Individual Foreign Countries By Country) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Long-lived assets | $ 451,979 | $ 393,720 |
Canada [Member]
|
||
Long-lived assets | 70,305 | 67,971 |
United States [Member]
|
||
Long-lived assets | 185,240 | 8,924 |
United Kingdom [Member]
|
||
Long-lived assets | 18,694 | 42,211 |
Germany [Member]
|
||
Long-lived assets | 5,466 | 6,195 |
Rest of Europe [Member]
|
||
Long-lived assets | 167,045 | 265,318 |
All Other Countries [Member]
|
||
Long-lived assets | $ 5,229 | $ 3,101 |
Long-Term Debt
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | LONG-TERM DEBT Long-term debt Long-term debt is comprised of the following:
Term Loan and Revolver Our credit facility consists of a $600 million term loan facility (the Term Loan) and a $100 million committed revolving credit facility (the Revolver). Borrowings under the credit agreement are secured by a first charge over substantially all of our assets. We entered into and borrowed the full amount under the Term Loan from this credit agreement on November 9, 2011. The Term Loan has a five year term and repayments made under the Term Loan are equal to 1.25% of the original principal amount at each quarter for the first 2 years, 1.88% for years 3 and 4 and 2.5% for year 5. The Term Loan bears interest at a floating rate of LIBOR plus 2.25% starting in the last quarter of Fiscal 2013. For Fiscal 2012 and the first nine months of Fiscal 2013 interest was at a floating rate of LIBOR plus 2.5%. For the year ended June 30, 2013, we recorded interest expense of $15.5 million relating to the Term Loan (June 30, 2012—$10.9 million). For the year ended June 30, 2012, we recorded interest expense of $2.7 million relating to our previously outstanding term loan (June 30, 2011—$7.3 million). The Revolver has a five year term with no fixed repayment date prior to the end of the term. As of June 30, 2013, we have not drawn any amounts on the Revolver. Mortgage We currently have an "open" mortgage with a bank where we can pay all or a portion of the mortgage on or before August 1, 2014. The original principal amount of the mortgage was Canadian $15.0 million and interest accrues monthly at a variable rate of Canadian prime plus 0.50%. Principal and interest are payable in monthly installments of Canadian $0.1 million with a final lump sum principal payment due on maturity. The mortgage is secured by a lien on our headquarters in Waterloo, Ontario, Canada. We first entered into this mortgage in December 2005. As of June 30, 2013, the carrying value of the mortgage was $10.5 million (June 30, 2012—$11.4 million). As of June 30, 2013, the carrying value of the Waterloo building that secures the mortgage was $16.1 million (June 30, 2012—$16.3 million). For the year ended June 30, 2013, we recorded interest expense of $0.4 million relating to the mortgage (June 30, 2012—$0.4 million, June 30, 2011—$0.6 million). |
Basis Of Presentation (Narrative) (Details) (Change In Accounting Method Accounted For As Change In Estimate [Member], USD $)
In Millions, unless otherwise specified |
Jun. 30, 2012
|
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Change In Accounting Method Accounted For As Change In Estimate [Member]
|
|
Change in Accounting Estimate [Line Items] | |
Deferred tax assets | $ 34.9 |
Allowance For Doubtful Accounts
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Allowance For Doubtful Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Allowance For Doubtful Accounts | ALLOWANCE FOR DOUBTFUL ACCOUNTS
Included in accounts receivable are unbilled receivables in the amount of $34.2 million as of June 30, 2013 (June 30, 2012—$18.0 million). The increase in unbilled receivables relates primarily to our cloud services revenue, which is billed to customers on a monthly basis at the commencement of the month immediately following the month the revenue is earned. |
Acquisitions
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | ACQUISITIONS Fiscal 2013 ICCM Professional Services Limited On May 23, 2013, we acquired ICCM Professional Services Limited (ICCM), a provider of IT service management software solutions, based in Malmesbury, United Kingdom. Total consideration for ICCM was $18.9 million, comprised of $16.4 million paid in cash ($11.3 million - net of cash acquired), and $2.5 million currently held back and unpaid in accordance with the purchase agreement. In accordance with ASC Topic 805 "Business Combinations" (ASC Topic 805), this acquisition was accounted for as a business combination. Acquisition related costs for ICCM included in Special charges in the Consolidated Statements of Income for the year ended June 30, 2013 were $0.3 million. The results of operations of ICCM have been consolidated with those of OpenText beginning May 23, 2013. The acquisition had no significant impact on revenues and net earnings for the year ended June 30, 2013. There was also no significant impact on the Company's revenues and net earnings on a pro forma basis for all periods presented. Resonate KT Limited On March 5, 2013, we acquired Resonate KT Limited (RKT), based in Cardiff, United Kingdom. RKT is a leading provider of software that enables organizations to visualize unstructured data, create new user experiences for Enterprise Content Management (ECM) and xECM for SAP, as well as build industry based applications that maximize unstructured data residing within Content Server, a key component of the OpenText ECM suite. Total consideration for RKT was $20.0 million paid in cash ($19.4 million - net of cash acquired). In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. Acquisition related costs for RKT included in Special charges in the Consolidated Statements of Income for the year ended June 30, 2013 were $0.4 million. The results of operations of RKT have been consolidated with those of OpenText beginning March 5, 2013. The acquisition had no significant impact on revenues and net earnings for the year ended June 30, 2013. There was also no significant impact on the Company's revenues and net earnings on a pro forma basis for all periods presented. EasyLink Services International Corporation On July 2, 2012, we acquired EasyLink Services International Corporation (EasyLink), a global provider of cloud-based electronic messaging and business integration services, based in Atlanta, Georgia. The acquisition extends our product offerings as we continue to evolve in the Enterprise Information Management market category. Total consideration for EasyLink was $342.3 million, paid in cash. In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. The results of operations of EasyLink have been consolidated with those of OpenText beginning July 2, 2012. The following tables summarize the consideration paid for EasyLink and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date:
The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 2, 2012, are set forth below:
No portion of the goodwill recorded upon the acquisition of EasyLink is expected to be deductible for tax purposes. Included within current assets were accounts receivable of $26.2 million at July 2, 2012. This amount has been substantially collected as of June 30, 2013. The amount of EasyLink’s revenues and net income included in our Consolidated Statements of Income for the year ended June 30, 2013, and the unaudited pro forma revenues and net income of the combined entity, had the acquisition been consummated as of July 1, 2011, are set forth below:
*Included in pro forma net income are estimated amortization charges relating to the allocated values of intangible assets. In addition, for the year ended June 30, 2012, pro forma net income includes a $44.6 million tax recovery relating to certain one-time tax benefits and a charge of $21.3 million for acquisition related costs and pre-acquisition accounting adjustments. The results of operations of EasyLink were combined with OpenText as of July 2, 2012 and hence there is no "reportable" pro forma impact on revenues and net income for the year ended June 30, 2013. The unaudited pro forma financial information in the table above is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented or the results that may be realized in the future. Fiscal 2012 System Solutions Australia Pty Limited (MessageManager) On October 31, 2011, we acquired MessageManager, a software company based in Sydney, Australia. MessageManager specializes in Fax over Internet Protocol (FoIP). Total consideration for MessageManager was $3.3 million, paid in cash (inclusive of $1.2 million of cash acquired). In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. Acquisition related costs for MessageManager included in Special charges in the Consolidated Statements of Income for the year ended June 30, 2012 were $0.06 million. The results of operations of MessageManager have been consolidated with those of OpenText beginning October 31, 2011. The acquisition had no significant impact on revenues and net earnings for the year ended June 30, 2012. There was also no significant impact on the Company's revenues and net earnings on a pro forma basis for all periods presented. Operitel Corporation (Operitel) On September 1, 2011, we acquired Operitel, a software company based in Peterborough, Ontario, Canada. Operitel specializes in building enterprise “Learning Portal” solutions. Total consideration for Operitel was approximately $7.0 million, paid in cash. In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. Acquisition related costs for Operitel included in Special charges in the Consolidated Statements of Income for the year ended June 30, 2012 were $0.09 million. The results of operations of Operitel have been consolidated with those of OpenText beginning September 1, 2011. The acquisition had no significant impact on revenues and net earnings for the year ended June 30, 2012. There was also no significant impact on the Company's revenues and net earnings on a pro forma basis for all periods presented. Global 360 Holding Corp. (Global 360) On July 13, 2011, we acquired Global 360, a software company based in Dallas, Texas. Global 360 offers case management and document-centric business process management (BPM) solutions. The acquisition of Global 360 for $256.6 million in cash adds complementary BPM software to our ECM Suite. In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. The results of operations of Global 360 have been consolidated with those of OpenText beginning July 13, 2011. The following tables summarize the consideration paid for Global 360 and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date:
The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 13, 2011, are set forth below:
* Included in total liabilities assumed is approximately $24.3 million of deferred revenue. As of June 30, 2013 approximately $20.0 million of the total cash consideration remains held by an escrow agent for indemnification purposes. No portion of the goodwill recorded upon the acquisition of Global 360 is expected to be deductible for tax purposes. Included within current assets were accounts receivable of $11.9 million at July 13, 2011. This amount has been substantially collected as of June 30, 2012. The amount of Global 360’s revenues and net income included in our Consolidated Statements of Income for the year ended June 30, 2012, and the unaudited pro forma revenues and net income of the combined entity, had the acquisition been consummated as of July 1, 2010, are set forth below:
*During the quarter ended June 30, 2012, Global 360 became substantially integrated into our operations and financial results, to the extent that it is no longer practicable to separately identify expenses and net income that are attributed solely from this acquisition. **Included in pro forma net income are estimated amortization charges relating to the allocated values of intangible assets for all periods reported above. The unaudited pro forma financial information in the table above is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented or the results that may be realized in the future. Fiscal 2011 weComm Limited (weComm) On March 15, 2011, we acquired weComm, a software company based in London, United Kingdom. weComm's software platform offers deployment of media rich applications for mobile devices, including smart phones and tablets. The acquisition of weComm facilitates our delivery of a platform to customers whereby we can help customers provide rich, immersive mobile applications more cost-effectively across a multitude of mobile operating systems and devices. In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. The results of operations of weComm have been consolidated with those of OpenText beginning March 15, 2011. The following tables summarize the consideration paid for weComm and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date:
The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of March 15, 2011 are set forth below:
No portion of the goodwill recorded upon the acquisition of weComm is expected to be deductible for tax purposes. Included within current assets were accounts receivable of $0.19 million at March 15, 2011. This amount has been substantially collected as of June 30, 2011. The amount of weComm's revenue and net loss included in our Consolidated Statements of Income for the year ended June 30, 2011 and the unaudited pro forma revenues and net income of the combined entity had the acquisition been consummated as of July 1, 2009, are set forth below:
*Included within net loss for the period reported above are $0.4 million of amortization charges relating to the allocated values of intangible assets and $0.17 million of restructuring charges included within Special charges (note 17). The unaudited pro forma financial information in the table above is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented or the result that may be realized in the future. Metastorm Inc. (Metastorm) On February 18, 2011, we acquired Metastorm, a software company based in Baltimore, Maryland. Metastorm provides Business Process Management (BPM), Business Process Analysis (BPA), and Enterprise Architecture (EA) software that helps enterprises align their strategies with execution. The acquisition of Metastorm adds complementary technology and expertise that can be used to enhance our BPM solutions portfolio. In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. The results of operations of Metastorm have been consolidated with those of OpenText beginning February 18, 2011. The following tables summarize the consideration paid for Metastorm and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date:
The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of February 18, 2011 are set forth below:
The fair value of goodwill recorded above includes an amount of $10.6 million which is expected to be deductible for tax purposes. Included within current assets were accounts receivable of $11.0 million at February 18, 2011. This amount has been substantially collected as of June 30, 2011. The amount of Metastorm's revenue and net loss included in our Consolidated Statements of Income for the year ended June 30, 2011 and the unaudited pro forma revenues and net income of the combined entity had the acquisition been consummated as of July 1, 2009, are set forth below:
*Included within net loss for the period reported above are $5.1 million of estimated amortization charges relating to the allocated values of intangible assets and $4.4 million of restructuring charges included within Special charges (note 17). **Included in pro forma net income for the year ended June 30, 2011 are non-recurring charges in the amount of $0.7 million, recorded by Metastorm in connection with acquisition costs incurred by Metastorm and employee stock based compensations and bonuses. Estimated amortization charges relating to the allocated values of intangible assets are also included within pro forma net income for all the periods reported above. The unaudited pro forma financial information in the table above is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented or the result that may be realized in the future. StreamServe Inc. (StreamServe) On October 27, 2010, we acquired StreamServe, a software company based in Burlington, Massachusetts. StreamServe offers enterprise business communication solutions that help organizations process and deliver highly personalized documents in paper or electronic format. The acquisition of StreamServe for $70.5 million in cash adds complementary document output and customer communication management software to our ECM Suite, while enhancing our SAP partnership and extending our reach in the Nordic market. In accordance with ASC Topic 805, this acquisition was accounted for as a business combination. The results of operations of StreamServe have been consolidated with those of OpenText beginning October 27, 2010. The following tables summarize the consideration paid for StreamServe and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date:
The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of October 27, 2010, are set forth below:
No portion of the goodwill recorded upon the acquisition of StreamServe is expected to be deductible for tax purposes. Included within current assets were accounts receivable of $11.0 million at October 27, 2010. This amount has been substantially collected as of June 30, 2011. The amount of StreamServe's revenue and net loss included in our Consolidated Statements of Income for the year ended June 30, 2011 and the unaudited pro forma revenues and net income of the combined entity had the acquisition been consummated as of July 1, 2009, are set forth below:
*Included within net loss for the period from October 27, 2010 to June 30, 2011 are $5.4 million of amortization charges relating to the allocated values of intangible assets and $3.7 million of restructuring charges included within Special charges (note 17). **Included in pro forma net income for the year ended June 30, 2011 are non-recurring charges in the amount of $3.3 million recorded by StreamServe in connection to acquisition costs incurred by StreamServe and the acceleration of the vesting of StreamServe employee stock options. Estimated amortization charges relating to the allocated values of intangible assets are also included within pro forma net income for all the periods reported above. The unaudited pro forma financial information in the table above is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented or the result that may be realized in the future. |
Long-Term Debt (Term Loan And Revolver) (Narrative) (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | 2 Months Ended | 12 Months Ended | 2 Months Ended | |||||
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Jun. 30, 2012
Old Term Loan [Member]
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Jun. 30, 2011
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Dec. 31, 2011
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Jun. 30, 2013
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Jun. 30, 2012
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Nov. 09, 2011
Term Loan [Member]
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Dec. 31, 2011
Revolving Credit Facility [Member]
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Nov. 09, 2011
Revolving Credit Facility [Member]
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Nov. 09, 2011
LIBOR [Member]
Term Loan [Member]
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Debt Instrument [Line Items] | |||||||||
Credit agreement, maximum capacity | $ 600 | $ 100 | |||||||
Term loan period, years | 5 years | ||||||||
Term loan repayment as percentage of principal in year 1 | 1.25% | ||||||||
Term loan repayment as percentage of principal in year 2 | 1.25% | ||||||||
Term loan repayment as percentage of principal in year 3 | 1.88% | ||||||||
Term loan repayment as percentage of principal in year 4 | 1.88% | ||||||||
Term loan repayment as percentage of principal in year 5 | 2.50% | ||||||||
Interest addition to floating rate | 2.25% | ||||||||
Interest expense | $ 2.7 | $ 7.3 | $ 15.5 | $ 10.9 | |||||
Revolver credit agreement term, years | 5 years |
Allowance For Doubtful Accounts (Changes In Carrying Amount Of Allowance For Doubtful Accounts) (Details) (USD $)
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Allowance For Doubtful Accounts [Abstract] | |||
Unbilled Contracts Receivable | $ 34,200,000 | $ 18,000,000 | |
Beginning balance of allowance for doubtful accounts | 5,655,000 | 5,424,000 | 4,868,000 |
Bad debt expense for the period | 2,431,000 | 3,443,000 | 2,602,000 |
Write-off /adjustments | (3,215,000) | (3,212,000) | (2,046,000) |
Ending balance of allowance for doubtful accounts | $ 4,871,000 | $ 5,655,000 | $ 5,424,000 |
Pension Plans And Other Post Retirement Benefits
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans And Other Post Retirement Benefits | PENSION PLANS AND OTHER POST RETIREMENT BENEFITS The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT) and Open Text Software GmbH (IXOS) as of June 30, 2013 and June 30, 2012:
CDT Defined Benefit Plan CDT sponsors an unfunded defined benefit pension plan covering substantially all CDT employees (CDT pension plan) which provides for old age, disability and survivors’ benefits. Benefits under the CDT pension plan are generally based on age at retirement, years of service and the employee’s annual earnings. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. The following are the details of the change in the benefit obligation for the CDT pension plan for the periods indicated:
The following are the details of net pension expense for the CDT pension plan for the periods indicated:
The CDT pension plan is an unfunded plan and therefore no contributions have been made since the inception of the plan. Actuarial gains and losses in excess of 10% of the greater of the projected benefit obligation or the market-related value of plan obligations are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan's active employees. There is approximately $0.3 million in accumulated other comprehensive income related to the CDT pension plan that is expected to be recognized as a component of net periodic benefit costs over the next fiscal year. In determining the fair value of the CDT pension plan benefit obligations as of June 30, 2013 and June 30, 2012, respectively, we used the following weighted-average key assumptions:
Anticipated pension payments under the CDT pension plan for the fiscal years indicated below are as follows:
CDT Anniversary Plan CDT’s long-term employee benefit obligations arise under CDT’s “anniversary plan”. The obligation is unfunded and is carried at its fair value. IXOS Defined Benefit Plans Included in our pension liability, as of June 30, 2013, is a net amount of $0.8 million (June 30, 2012—$0.7 million) that relates to two IXOS defined benefit pensions plans (IXOS pension plans) in connection with certain former members of the IXOS Board of Directors and certain IXOS employees, respectively. The net periodic pension cost with respect to the IXOS pension plans is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and the expected return on plan assets. |
Income Taxes (Changes In Balance Of Gross Unrecognized Tax Benefits (Including Interest And Penalties)) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||
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Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||||||
Unrecognized Tax Benefits | $ 156,281 | $ 132,892 | ||||||
Increases on account of current year positions | 5,736 | 5,279 | ||||||
Increases on account of prior year positions | 22,017 | [1] | 65,994 | [2] | ||||
Decreases due to settlements with tax authorities | (5,138) | (4,935) | ||||||
Decreases due to lapses of statutes of limitations | (29,993) | (42,949) | ||||||
Unrecognized Tax Benefits | 148,903 | 156,281 | ||||||
Streamserve Inc [Member]
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Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||||||
Increases on account of prior year positions | 400 | |||||||
EasyLink Services International Corporation [Member]
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Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||||||
Increases on account of prior year positions | $ 8,800 | |||||||
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Special Charges (Tables)
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Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Special Charges Related To Restructuring Plan | Special charges include costs that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition related costs and other similar charges.
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Fiscal 2013 Restructuring Plan [Member]
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Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Restructuring Reserve | A reconciliation of the beginning and ending liability for the year ended June 30, 2013 is shown below.
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Fiscal 2012 Restructuring Plan [Member]
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Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Restructuring Reserve | A reconciliation of the beginning and ending liability for the years ended June 30, 2013 and June 30, 2012 are shown below.
|
Share Capital, Option Plans And Share-Based Payments (Schedule Of Weighted-Average Fair Value Of Options And Weighted-Average Assumptions Used) (Details) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Weighted-average fair value of options granted (in dollars per share) | $ 16.78 | $ 19.39 | $ 17.89 |
Expected volatility | 37.00% | 41.00% | 40.00% |
Risk–free interest rate | 0.66% | 0.69% | 1.70% |
Expected dividend yield | 0.30% | 0.00% | 0.00% |
Expected life (in years) | 4 years 4 months 6 days | 4 years 7 months 13 days | 4 years 3 months 18 days |
Forfeiture rate (based on historical rates) | 5.00% | 5.00% | 5.00% |
Average exercised share price (in dollars per share) | $ 56.29 | $ 49.79 | $ 51.24 |
Other Assets (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Other Assets, Noncurrent Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Other Assets |
|
Supplemental Cash Flow Disclosures
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Disclosures | SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid for taxes for the year ended June 30, 2013 include payments of $24.2 million relating to taxes exigible on internal reorganizations of our international subsidiaries. |
Segment Information
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION ASC Topic 280, “Segment Reporting” (ASC Topic 280), establishes standards for reporting, by public business enterprises, information about operating segments, products and services, geographic areas, and major customers. The method of determining what information, under ASC Topic 280, to report is based on the way that an entity organizes operating segments for making operational decisions and how the entity’s management and chief operating decision maker (CODM) assess an entity’s financial performance. Our operations are analyzed by management and our CODM as being part of a single industry segment: the design, development, marketing and sales of Enterprise Information Management software and solutions. The following table sets forth the distribution of revenues, by significant geographic area, for the periods indicated:
The following table sets forth the distribution of long-lived assets, representing property and equipment and intangible assets, by significant geographic area, as of the periods indicated below.
Long-lived assets in United States increased primarily on account of the acquisition of EasyLink. |
Segment Information (Revenue From External Customers Attributed To Foreign Countries By Geographic Area) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Total revenues | $ 1,363,336 | $ 1,207,473 | $ 1,033,303 |
Canada [Member]
|
|||
Total revenues | 103,076 | 103,915 | 85,135 |
United States [Member]
|
|||
Total revenues | 611,902 | 513,530 | 445,511 |
United Kingdom [Member]
|
|||
Total revenues | 131,745 | 124,601 | 103,255 |
Germany [Member]
|
|||
Total revenues | 138,073 | 130,494 | 124,248 |
Rest of Europe [Member]
|
|||
Total revenues | 223,444 | 212,587 | 186,473 |
All Other Countries [Member]
|
|||
Total revenues | $ 155,096 | $ 122,346 | $ 88,681 |
Derivative Instruments And Hedging Activities (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets | Fair Value of Derivative Instruments in the Consolidated Balance Sheets (see note 15)
|
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Effects Of Derivative Instruments On Income And Other Comprehensive Income (OCI) | Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI)
|
Allowance For Doubtful Accounts (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Allowance For Doubtful Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Changes In Carrying Amount Of Allowance For Doubtful Accounts |
|
Long-Term Debt (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Long-term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Long-Term Debt | Long-term debt is comprised of the following:
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Segment Information (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue From External Customers Attributed To Foreign Countries By Geographic Area | The following table sets forth the distribution of revenues, by significant geographic area, for the periods indicated:
|
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Entity-Wide Disclosure On Geographic Areas, Long-Lived Assets In Individual Foreign Countries By Country | The following table sets forth the distribution of long-lived assets, representing property and equipment and intangible assets, by significant geographic area, as of the periods indicated below.
Long-lived assets in United States increased primarily on account of the acquisition of EasyLink. |
Subsequent Events
|
12 Months Ended |
---|---|
Jun. 30, 2013
|
|
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS As part of our quarterly, non cumulative dividend program we declared, on July 31, 2013, a dividend of $0.30 per Common Share. The record date for this dividend is August 30, 2013 and the payment date is September 30, 2013. We expect to continue paying such quarterly dividends in the approximate range of 20% of our on-going cash flow from operating activities. |
Accounts Payable And Accrued Liabilities (Schedule Of Current Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable-trade | $ 8,776 | $ 7,574 |
Accrued salaries and commissions | 50,568 | 50,821 |
Accrued liabilities | 120,981 | 65,838 |
Amounts payable in respect of restructuring and other Special charges (note 16) | 7,130 | 7,068 |
Asset retirement obligations | 988 | 714 |
Accounts payable and accrued liabilities | $ 188,443 | $ 132,015 |
Pension Plans And Other Post Retirement Benefits (Components Of Net Pension Expense For CDT Pension Plan) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 457 | $ 326 | |
Interest cost | 888 | 873 | |
Net pension expense | 910 | 543 | 552 |
CDT Pension Plan [Member]
|
|||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 457 | 326 | 350 |
Interest cost | 888 | 873 | 868 |
Amortization of actuarial gains and losses | 277 | 0 | 0 |
Net pension expense | $ 1,622 | $ 1,199 | $ 1,218 |
Accounts Payable And Accrued Liabilities (Narrative) (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Accounts Payable and Accrued Liabilities [Abstract] | ||
Present value of asset retirement obligation | $ 5.7 | $ 4.3 |
Undiscounted value of asset retirement obligation | $ 6.1 | $ 4.8 |
Guarantees And Contingencies (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contractual Obligations | We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows:
*Net of $2.0 million of sublease income to be received from properties which we have subleased to third parties. |
Pension Plans And Other Post Retirement Benefits (Narrative) (Details) (USD $)
|
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Net pension liabilities | $ 23,336,000 | $ 20,986,000 |
CDT Pension Plan [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Accumulated other comprehensive income related to CDT pension plan | 300,000 | |
IXOS AG Defined Benefit Plans [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Net pension liabilities | $ 800,000 | $ 700,000 |
Derivative Instruments And Hedging Activities (Effects Of Derivative Instruments On Income And Other Comprehensive Income (OCI)) (Details) (Cash Flow Hedging [Member], Foreign Exchange Forward [Member], USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Derivatives, Fair Value [Line Items] | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | $ (1,436) | $ (1,909) |
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | 0 |
Operating Expenses [Member]
|
||
Derivatives, Fair Value [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | $ 2,017 | $ (390) |
Acquisitions (Details) (USD $)
|
12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 8 Months Ended | 12 Months Ended | 0 Months Ended | 4 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
May 23, 2013
ICCM Professional Services Limited [Member]
|
Jun. 30, 2013
ICCM Professional Services Limited [Member]
|
Mar. 05, 2013
Resonate KT Limited [Member]
|
Jun. 30, 2013
Resonate KT Limited [Member]
|
Jul. 02, 2012
EasyLink Services International Corporation [Member]
|
Jun. 30, 2013
EasyLink Services International Corporation [Member]
|
Jun. 30, 2013
EasyLink Services International Corporation [Member]
|
Jun. 30, 2012
EasyLink Services International Corporation [Member]
|
Jul. 02, 2012
EasyLink Services International Corporation [Member]
Customer Assets [Member]
|
Jul. 02, 2012
EasyLink Services International Corporation [Member]
Technology Assets [Member]
|
Oct. 31, 2011
System Solutions Australia Pty Limited [Member]
|
Jun. 30, 2012
System Solutions Australia Pty Limited [Member]
|
Jun. 30, 2012
Operitel Corporation [Member]
|
Sep. 01, 2011
Operitel Corporation [Member]
|
Jul. 13, 2011
Global 360 Holding Corporation [Member]
|
Jun. 30, 2012
Global 360 Holding Corporation [Member]
|
Jun. 30, 2012
Global 360 Holding Corporation [Member]
|
Jun. 30, 2011
Global 360 Holding Corporation [Member]
|
Jun. 30, 2013
Global 360 Holding Corporation [Member]
|
Jul. 13, 2011
Global 360 Holding Corporation [Member]
Customer Assets [Member]
|
Jul. 13, 2011
Global 360 Holding Corporation [Member]
Technology Assets [Member]
|
Oct. 27, 2010
Streamserve Inc [Member]
|
Jun. 30, 2011
Streamserve Inc [Member]
|
Jun. 30, 2011
Streamserve Inc [Member]
|
Jun. 30, 2010
Streamserve Inc [Member]
|
Oct. 27, 2010
Streamserve Inc [Member]
Customer Assets [Member]
|
Oct. 27, 2010
Streamserve Inc [Member]
Technology Assets [Member]
|
Feb. 18, 2011
Metastorm Inc [Member]
|
Jun. 30, 2011
Metastorm Inc [Member]
|
Jun. 30, 2011
Metastorm Inc [Member]
|
Jun. 30, 2010
Metastorm Inc [Member]
|
Feb. 18, 2011
Metastorm Inc [Member]
Customer Assets [Member]
|
Feb. 18, 2011
Metastorm Inc [Member]
Technology Assets [Member]
|
Mar. 15, 2011
weComm Limited [Member]
|
Jun. 30, 2011
weComm Limited [Member]
|
Jun. 30, 2011
weComm Limited [Member]
|
Jun. 30, 2010
weComm Limited [Member]
|
Mar. 15, 2011
weComm Limited [Member]
Customer Assets [Member]
|
Mar. 15, 2011
weComm Limited [Member]
Technology Assets [Member]
|
||||||||||||||||||||||||||||
Business Acquisition, Cost of Acquired Entity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash consideration paid | $ 16,400,000 | $ 20,000,000 | $ 342,272,000 | $ 256,597,000 | $ 70,514,000 | $ 182,000,000 | $ 20,461,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash acquired from acquisition | 11,300,000 | 19,400,000 | 26,941,000 | 1,200,000 | 10,944,000 | 13,293,000 | 13,343,000 | 263,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for the three month ended March 31, 2013 | 4,925,000 | 5,115,000 | 2,914,000 | 300,000 | 400,000 | 1,850,000 | 60,000 | 90,000 | 924,000 | 1,146,000 | 1,038,000 | 318,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Purchase Price Allocation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current assets | 74,560,000 | 38,249,000 | 29,431,000 | 37,494,000 | 954,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-current assets | 35,024,000 | 6,289,000 | 3,267,000 | 14,281,000 | 328,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets | 126,600,000 | 70,500,000 | 58,100,000 | 40,600,000 | 15,400,000 | 27,300,000 | 34,300,000 | 40,700,000 | 300,000 | 5,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities assumed | (148,028,000) | (88,575,000) | [1] | (43,912,000) | (55,277,000) | (2,867,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total identifiable net assets | 158,656,000 | 54,663,000 | 31,486,000 | 71,498,000 | 3,715,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | 183,616,000 | 201,934,000 | 39,028,000 | 110,502,000 | 16,746,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration transferred | 18,900,000 | 342,272,000 | 3,300,000 | 7,000,000 | 256,597,000 | 70,514,000 | 182,000,000 | 20,461,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill expected to be deductible for tax purposes | 0 | 0 | 0 | 10,600,000 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of accounts receivable acquired | 26,200,000 | 11,900,000 | 11,000,000 | 11,000,000 | 190,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actual revenues | 171,569,000 | 74,900,000 | 43,151,000 | 28,731,000 | 311,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actual net income | 10,288,000 | (1,978,000) | [2] | (5,870,000) | [3] | (1,172,000) | [4] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | 1,389,132,000 | 1,209,809,000 | 1,125,366,000 | 1,053,884,000 | 974,410,000 | 1,086,461,000 | 980,228,000 | 1,035,175,000 | 915,870,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 151,369,000 | [5] | 128,924,000 | [6] | 107,636,000 | [6] | 118,649,000 | [7] | 88,174,000 | [7] | 114,054,000 | [8] | 78,186,000 | [8] | 120,913,000 | 88,425,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax recovery relating to certain one-time tax benefits | 44,600,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition related costs | 21,300,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization charges | 5,400,000 | 5,100,000 | 400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges | 3,700,000 | 4,400,000 | 170,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent consideration arrangements, range of outcomes, maximum | 2,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred revenue | 24,300,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business acquisition amount held in escrow | 20,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business acquisitions acquiree nonrecurring charges | $ 3,300,000 | $ 700,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Special Charges (Schedule Of Special Charges Related To Restructuring Plan) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2011
|
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Restructuring Cost and Reserve [Line Items] | |||
Acquisition-related costs | $ 4,925 | $ 5,115 | $ 2,914 |
Other charges | 2,770 | 1,389 | (482) |
Total special charges (recoveries) | 24,034 | 24,523 | 15,576 |
Fiscal 2013 Restructuring Plan [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Special charges | 15,754 | 0 | 0 |
Fiscal 2012 Restructuring Plan [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Special charges | 971 | 16,897 | 0 |
Fiscal Two Thousand And Eleven Restructuring Plan [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Special charges | (384) | 1,160 | 8,524 |
Cash Liability Portion [Member] | Fiscal Two Thousand And Ten Restructuring Plan [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Special charges | $ (2) | $ (38) | $ 4,620 |
Special Charges
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Jun. 30, 2013
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Restructuring, Settlement and Impairment Provisions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Charges | SPECIAL CHARGES Special charges include costs that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition related costs and other similar charges.
Reconciliations of the liability relating to each of our materially outstanding restructuring plans are provided below: Fiscal 2013 Restructuring Plan In the first quarter of Fiscal 2013, we began to implement restructuring activities to streamline our operations (Fiscal 2013 Restructuring Plan). These charges relate to workforce reductions and facility consolidations. Since the inception of the Fiscal 2013 Restructuring Plan, $15.8 million of cost have been recorded within Special charges. The recognition of these charges requires management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we will conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. A reconciliation of the beginning and ending liability for the year ended June 30, 2013 is shown below.
Fiscal 2012 Restructuring Plan In the first quarter of Fiscal 2012, we began to implement restructuring activities to streamline our operations (Fiscal 2012 Restructuring Plan). These charges relate to workforce reductions and facility consolidations. The recognition of these charges requires management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. On a quarterly basis, we will conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. Since the inception of the Fiscal 2012 restructuring plan, $17.9 million of costs have been recorded within Special charges. We do not expect to incur any further significant charges related to the Fiscal 2012 Restructuring Plan. A reconciliation of the beginning and ending liability for the years ended June 30, 2013 and June 30, 2012 are shown below.
Acquisition-related costs Included within Special charges for the year ended June 30, 2013 are costs incurred directly in relation to acquisitions in the amount of $2.9 million (June 30, 2012—$1.8 million, June 30, 2011—$2.9 million). Additionally, we incurred costs relating to financial advisory, legal, valuation and audit services and other miscellaneous costs necessary to integrate acquired companies into our organization for the year ended June 30, 2013 in the amount of $2.0 million (June 30, 2012—$3.3 million, June 30, 2011—nil). Other charges Included within Special charges for the year ended June 30, 2013 are "other charges" including $1.9 million relating to interest accrued on certain pre-acquisition sales tax liabilities, a charge of $0.4 million relating to an allocated portion of a litigation settlement reached in relation to a legacy acquisition litigation matter, and a charge of $0.5 million relating to miscellaneous other charges. Included within Special charges for the year ended June 30, 2012 are a recovery of $0.8 million relating to a reduction in an asset retirement obligation associated with a leased facility, a recovery of $0.5 million relating to a new sublease on a restructured facility acquired in a prior period and $2.7 million related to the write-off of debt issuance costs associated with our old term loan that was repaid after we entered into our new credit facility on November 9, 2011. Included within Special charges for the year ended June 30, 2011 are a recovery of $1.0 million relating to a reduction in an asset retirement obligation associated with a leased facility, and a charge of $0.5 million relating to a revised sublease assumption on a restructured facility acquired in a prior period. |
Consolidated Statements Of Other Comprehensive Income (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
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Statement of Other Comprehensive Income [Abstract] | |||
Net income for the period | $ 148,520 | $ 125,174 | $ 123,203 |
Net foreign currency translation adjustments | (1,879) | (9,197) | 15,388 |
Net unrealized gain (loss) on cash flow hedges | (2,536) | (1,069) | 1,275 |
Net actuarial gain (loss) relating to defined benefit pension plans | (59) | (5,840) | (214) |
Total other comprehensive income (loss), net, for the period | (4,474) | (16,106) | 16,449 |
Total comprehensive income | $ 144,046 | $ 109,068 | $ 139,652 |
Basis Of Presentation
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12 Months Ended |
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Jun. 30, 2013
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Basis Of Presentation [Abstract] | |
Basis Of Presentation | BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of Open Text Corporation and our wholly-owned subsidiaries, collectively referred to as “OpenText” or the “Company”. All inter-company balances and transactions have been eliminated. These consolidated financial statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented and includes the financial results of EasyLink Services International Corporation (EasyLink), with effect from July 2, 2012, Resonate KT Limited (RKT), with effect from March 5, 2013 and ICCM Professional Services Limited (ICCM), with effect from May 23, 2013 (see note 18). Pursuant to our adoption of Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220)-Presentation of Comprehensive Income” and Accounting Standards Update No. 2011-12, “Comprehensive Income (Topic 220)-Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”, we elected to present separate consolidated statements of comprehensive income for the year ended June 30, 2013 (Fiscal 2013), for the year ended June 30, 2012 (Fiscal 2012) and for the year ended June 30, 2011 (Fiscal 2011). Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements. These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, significant estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) allowance for doubtful accounts, (iii) testing of goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) restructuring accruals, (viii) acquisition accruals and pre-acquisition contingencies, (ix) asset retirement obligations, (x) the realization of investment tax credits, (xi) the valuation of stock options granted and liabilities related to share-based payments, including the valuation of our long-term incentive plan, (xii) the valuation of financial instruments, (xiii) the valuation of pension assets and obligations, and (xiv) accounting for income taxes. Reclassifications Cloud Services Starting in the first quarter for the year ended June 30, 2013 (Fiscal 2013), in light of our acquisition of EasyLink on July 2, 2012, we adopted a policy to classify revenues and cost of revenues relating to "Cloud Services" as a separate line item within "Revenues" and "Cost of revenues", respectively, on the Consolidated Statements of Income. No prior period comparative figures have been adjusted to conform to current period presentation since such prior period amounts are not material. Research and Development Tax Credits Non-refundable research and development tax credits are reflected as a component of "Income tax" expense on the Consolidated Statements of Income. Certain prior period comparative figures have been adjusted on the Consolidated Balance Sheets to conform to current period presentation. As of June 30, 2012, long-term “Deferred tax assets” have been increased from previously reported amounts by approximately $34.9 million, with a corresponding decrease to “Long-term income taxes recoverable”. There was no change to total assets, liabilities, or shareholders' equity as a result of this reclassification. The prior period comparative figures on the Consolidated Statements of Income have not been adjusted as the amounts are not material. Certain other prior year balances have been reclassified to conform to the current year's presentation. Such reclassifications were not considered material and did not affect our consolidated total revenues, consolidated operating income or consolidated net income. |
Property and Equipment
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | PROPERTY AND EQUIPMENT
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Pension Plans And Other Post Retirement Benefits (Schedule Of Weighted-Average Key Assumptions Used For CDT Pension Plan) (Details) (CDT Pension Plan [Member])
|
12 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
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Defined Benefit Plan Disclosure [Line Items] | ||
Salary increases | 2.50% | 2.50% |
Pension increases | 2.00% | 2.00% |
Discount rate | 3.50% | 4.00% |
To Age 30 [Member]
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||
Defined Benefit Plan Disclosure [Line Items] | ||
Employee fluctuation rate | 1.00% | 1.00% |
To Age 35 [Member]
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Defined Benefit Plan Disclosure [Line Items] | ||
Employee fluctuation rate | 0.50% | 0.50% |
To Age 40 [Member]
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Defined Benefit Plan Disclosure [Line Items] | ||
Employee fluctuation rate | 0.00% | 0.00% |
To Age 45 [Member]
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Defined Benefit Plan Disclosure [Line Items] | ||
Employee fluctuation rate | 0.50% | 0.50% |
To Age 50 [Member]
|
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Defined Benefit Plan Disclosure [Line Items] | ||
Employee fluctuation rate | 0.50% | 0.50% |
From Age 51 [Member]
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Defined Benefit Plan Disclosure [Line Items] | ||
Employee fluctuation rate | 1.00% | 1.00% |
Significant Accounting Policies
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12 Months Ended | ||||||||||||||||
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Jun. 30, 2013
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Accounting Policies [Abstract] | |||||||||||||||||
Significant Accounting Policies | Cash and cash equivalents Cash and cash equivalents include investments that have terms to maturity of three months or less. Cash equivalents are recorded at cost and typically consist of term deposits, commercial paper, certificates of deposit and short-term interest bearing investment-grade securities of major banks in the countries in which we operate. Allowance for doubtful accounts We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make payments. We evaluate the creditworthiness of our customers prior to order fulfillment and based on these evaluations, we adjust our credit limit to the respective customer. In addition to these evaluations, we conduct on-going credit evaluations of our customers' payment history and current creditworthiness. The allowance is maintained for 100% of all accounts deemed to be uncollectible and, for those receivables not specifically identified as uncollectible, an allowance is maintained for a specific percentage of those receivables based upon the aging of accounts, our historical collection experience and current economic expectations. To date, the actual losses have been within our expectations. No single customer accounted for more than 10% of the accounts receivable balance as of June 30, 2013 and 2012. Property and equipment Property and equipment are stated at the lower of cost or net realizable value, and shown net of depreciation which is computed on a straight-line basis over the estimated useful lives of the related assets. Gains and losses on asset disposals are taken into income in the year of disposition. Fully depreciated property and equipment are retired from the balance sheet when they are no longer in use. We did not recognize any significant property impairment charges in Fiscal 2013, Fiscal 2012, or Fiscal 2011. The following represents the estimated useful lives of property and equipment:
Acquired intangibles Acquired intangibles consist of acquired technology and customer relationships associated with various acquisitions. Acquired technology is initially recorded at fair value based on the present value of the estimated net future income-producing capabilities of software products acquired on acquisitions. We amortize acquired technology over its estimated useful life on a straight-line basis. Customer relationships represent relationships that we have with customers of the acquired companies and are either based upon contractual or legal rights or are considered separable; that is, capable of being separated from the acquired entity and being sold, transferred, licensed, rented or exchanged. These customer relationships are initially recorded at their fair value based on the present value of expected future cash flows. We amortize customer relationships on a straight-line basis over their estimated useful lives. We continually evaluate the remaining estimated useful life of our intangible assets being amortized to determine whether events and circumstances warrant a revision to the remaining period of amortization. Impairment of long-lived assets We account for the impairment and disposition of long-lived assets in accordance with ASC Topic 360, “Property, Plant, and Equipment” (Topic 360). We test long-lived assets or asset groups, such as property and equipment and definite lived intangible assets, for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated useful life. Recoverability is assessed based on comparing the carrying amount of the asset to the aggregate pre-tax undiscounted cash flows expected to result from the use and eventual disposal of the asset or asset group. Impairment is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss, if any, is measured as the amount by which the carrying amount exceeds fair value, which for this purpose is based upon the discounted projected future cash flows of the asset or asset group. We have not recorded any impairment charges for long-lived assets during Fiscal 2013, Fiscal 2012 and Fiscal 2011. Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. The carrying amount of goodwill is periodically reviewed for impairment (at a minimum annually) and whenever events or changes in circumstances indicate that the carrying value of this asset may not be recoverable. Our operations are analyzed by management and our chief operating decision maker (CODM) as being part of a single industry segment: the design, development, marketing and sales of Enterprise Information Management software and solutions. Therefore, our goodwill impairment assessment is based on the allocation of goodwill to a single reporting unit. Effective Fiscal 2013, we opted to perform a qualitative assessment to test our reporting unit's goodwill for impairment. Based on our qualitative assessment, if we determine that the fair value of our reporting unit is more likely than not (i.e., a likelihood of more than 50 percent) to be less than its carrying amount, the two step impairment test will be performed. In the first step, we compare the fair value of our reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired and we are not required to perform further testing. If the carrying value of the net assets of our reporting unit exceeds its fair value, then we must perform the second step of the impairment test in order to determine the implied fair value of our reporting unit's goodwill. If the carrying value our reporting unit's goodwill exceeds its implied fair value, then we would record an impairment loss equal to the difference. Our annual impairment analysis of goodwill was performed as of April 1, 2013. Our qualitative assessment indicated that there were no indications of impairment and the fair value of our reporting unit was in excess of its carrying value and therefore there was no impairment of goodwill required to be recorded for Fiscal 2013 (No impairments were recorded for Fiscal 2012 and Fiscal 2011). Derivative financial instruments We use derivative financial instruments to manage foreign currency rate risk. We account for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging” (Topic 815), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of the reporting date. Topic 815 also requires that changes in our derivative financial instruments' fair values be recognized in earnings; unless specific hedge accounting and documentation criteria are met (i.e. the instruments are accounted for as hedges). We recorded the effective portions of the gain or loss on derivative financial instruments that were designated as cash flow hedges in accumulated other comprehensive income in our accompanying Consolidated Balance Sheets. Any ineffective or excluded portion of a designated cash flow hedge, if applicable, was recognized in our Consolidated Statement of Income. Asset retirement obligations We account for asset retirement obligations in accordance with ASC Topic 410, “Asset Retirement and Environmental Obligations” (Topic 410), which applies to certain obligations associated with “leasehold improvements” within our leased office facilities. Topic 410 requires that a liability be initially recognized for the estimated fair value of the obligation when it is incurred. The associated asset retirement cost is capitalized as part of the carrying amount of the long-lived asset and depreciated over the remaining life of the underlying asset and the associated liability is accreted to the estimated fair value of the obligation at the settlement date through periodic accretion charges recorded within general and administrative expenses. When the obligation is settled, any difference between the final cost and the recorded amount is recognized as income or loss on settlement. Business combinations We apply the provisions of ASC Topic 805, “Business Combinations” (Topic 805), in the accounting for our acquisitions. It requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Costs to exit or restructure certain activities of an acquired company or our internal operations are accounted for as one-time termination and exit costs pursuant to ASC Topic 420, “Exit or Disposal Cost Obligations” (Topic 420) and are accounted for separately from the business combination. For a given acquisition, we generally identify certain pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as a part of the purchase price allocation and, if so, to determine the estimated amounts. If we determine that a pre-acquisition contingency (non-income tax related) is probable in nature and estimable as of the acquisition date, we record our best estimate for such a contingency as a part of the preliminary purchase price allocation. We often continue to gather information and evaluate our pre-acquisition contingencies throughout the measurement period and if we make changes to the amounts recorded or if we identify additional pre-acquisition contingencies during the measurement period, such amounts will be included in the purchase price allocation during the measurement period and, subsequently, in our results of operations. Uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We review these items during the measurement period as we continue to actively seek and collect information relating to facts and circumstances that existed at the acquisition date. Changes to these uncertain tax positions and tax related valuation allowances made subsequent to the measurement period, or if they relate to facts and circumstances that did not exist at the acquisition date, are recorded in our provision for income taxes in our Consolidated Statement of Income. Revenue recognition License revenues We recognize revenues in accordance with ASC Topic 985-605, “Software Revenue Recognition” (Topic 985-605). We record product revenues from software licenses and products when persuasive evidence of an arrangement exists, the software product has been shipped, there are no significant uncertainties surrounding product acceptance by the customer, the fees are fixed and determinable, and collection is considered probable. We use the residual method to recognize revenues on delivered elements when a license agreement includes one or more elements to be delivered at a future date if evidence of the fair value of all undelivered elements exists. If an undelivered element for the arrangement exists under the license arrangement, revenues related to the undelivered element is deferred based on vendor-specific objective evidence (VSOE) of the fair value of the undelivered element. Our multiple-element sales arrangements include arrangements where software licenses and the associated post contract customer support (PCS) are sold together. We have established VSOE of the fair value of the undelivered PCS element based on the contracted price for renewal PCS included in the original multiple element sales arrangement, as substantiated by contractual terms and our significant PCS renewal experience, from our existing worldwide base. Our multiple element sales arrangements generally include irrevocable rights for the customer to renew PCS after the bundled term ends. The customer is not subject to any economic or other penalty for failure to renew. Further, the renewal PCS options are for services comparable to the bundled PCS and cover similar terms. It is our experience that customers generally exercise their renewal PCS option. In the renewal transaction, PCS is sold on a stand-alone basis to the licensees one year or more after the original multiple element sales arrangement. The exercised renewal PCS price is consistent with the renewal price in the original multiple element sales arrangement, although an adjustment to reflect consumer price changes is not uncommon. If VSOE of fair value does not exist for all undelivered elements, all revenues are deferred until sufficient evidence exists or all elements have been delivered. We assess whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring. Our sales arrangements generally include standard payment terms. These terms effectively relate to all customers, products, and arrangements regardless of customer type, product mix or arrangement size. Exceptions are only made to these standard terms for certain sales in parts of the world where local practice differs. In these jurisdictions, our customary payment terms are in line with local practice. Cloud revenues Cloud revenues consist of subscription revenues for our software as a service offering. The majority of the contracts for our software as a service offering are based on customers' usage over a period and the revenue associated with those contracts are recognized once the usage has been measured, the fee fixed and determinable and collection is probable. Some of the contracts for our software as a service offering have an established fixed periodic fee and the revenue associated with those contracts are recognized ratably over the term of the contract. Service revenues Service revenues consist of revenues from consulting, implementation, training and integration services. These services are set forth separately in the contractual arrangements such that the total price of the customer arrangement is expected to vary as a result of the inclusion or exclusion of these services. For those contracts where the services are not essential to the functionality of any other element of the transaction, we determine VSOE of fair value for these services based upon normal pricing and discounting practices for these services when sold separately. These consulting and implementation services contracts are primarily time and materials based contracts that are, on average, less than six months in length. Revenues from these services are recognized at the time such services are rendered. We also enter into contracts that are primarily fixed fee arrangements wherein the services are not essential to the functionality of a software element. In such cases, the proportional performance method is applied to recognize revenues. Revenues from training and integration services are recognized in the period in which these services are performed. Customer support revenues Customer support revenues consist of revenues derived from contracts to provide PCS to license holders. These revenues are recognized ratably over the term of the contract. Advance billings of PCS are not recorded to the extent that the term of the PCS has not commenced and payment has not been received. Deferred revenues Deferred revenues primarily relate to support agreements which have been paid for by customers prior to the performance of those services. Generally, the services will be provided in the twelve months after the signing of the agreement. Long-term sales contracts We entered into certain long-term sales contracts involving the sale of integrated solutions that include the modification and customization of software and the provision of services that are essential to the functionality of the other elements in this arrangement. As prescribed by ASC Topic 985-605, we recognize revenues from such arrangements in accordance with the contract accounting guidelines in ASC Topic 605-35, “Construction-Type and Production-Type Contracts” (Topic 605-35), after evaluating for separation of any non-Topic 605-35 elements in accordance with the provisions of ASC Topic 605-25, “Multiple-Element Arrangements” (Topic 605-25). When circumstances exist that allow us to make reasonably dependable estimates of contract revenues, contract costs and the progress of the contract to completion, we account for sales under such long-term contracts using the percentage-of-completion (POC) method of accounting. Under the POC method, progress towards completion of the contract is measured based upon either input measures or output measures. We measure progress towards completion based upon an input measure and calculate this as the proportion of the actual hours incurred compared to the total estimated hours. For training and integration services rendered under such contracts, revenues are recognized as the services are rendered. We will review, on a quarterly basis, the total estimated remaining costs to completion for each of these contracts and apply the impact of any changes on the POC prospectively. If at any time we anticipate that the estimated remaining costs to completion will exceed the value of the contract, the resulting loss will be recognized immediately. When circumstances exist that prevent us from making reasonably dependable estimates of contract revenues, we account for sales under such long-term contracts using the completed contract method. Sales to resellers and channel partners We execute certain sales contracts through resellers and distributors (collectively, resellers) and also large, well-capitalized partners such as SAP AG and Accenture Inc. (collectively, channel partners). We recognize revenues relating to sales through resellers when all the recognition criteria have been met, in other words, persuasive evidence of an arrangement exists, delivery has occurred in the reporting period, the fee is fixed and determinable, and collectability is probable. Typically, we recognize revenues to resellers only after the reseller communicates the occurrence of end-user sales to us, since we do not have privity of contract with the end-user. In addition we assess the creditworthiness of each reseller and if the reseller is newly formed, undercapitalized or in financial difficulty any revenues expected to emanate from such resellers are deferred and recognized only when cash is received and all other revenue recognition criteria are met. We recognize revenues relating to sales through channel partners in the reporting period in which we receive evidence, from the channel partner, of end user sales (collectively, the documentation) and all other revenue recognition criteria have been met. As a result, if the documentation is not received within a given reporting period we recognize the revenues in a period subsequent to the period in which the channel partner completes the sale to the end user. Rights of return and other incentives We do not generally offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, do not provide for or make estimates of rights of return and similar incentives. Research and development costs Research and development costs internally incurred in creating computer software to be sold, licensed or otherwise marketed are expensed as incurred unless they meet the criteria for deferral and amortization, as described in ASC Topic 985-20, “Costs of Software to be Sold, Leased, or Marketed” (Topic 985-20). In accordance with Topic 985-20, costs related to research, design and development of products are charged to expenses as incurred and capitalized between the dates that the product is considered to be technologically feasible and is considered to be ready for general release to customers. In our historical experience, the dates relating to the achievement of technological feasibility and general release of the product have substantially coincided. In addition, no significant costs are incurred subsequent to the establishment of technological feasibility. As a result, we do not capitalize any research and development costs relating to internally developed software to be sold, licensed or otherwise marketed. Income taxes We account for income taxes in accordance with ASC Topic 740, “Income Taxes” (Topic 740). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that we consider it is more likely than not that a deferred tax asset will not be realized. In determining the valuation allowance, we consider factors such as the reversal of deferred income tax liabilities, projected taxable income, and the character of income tax assets and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense. We account for our uncertain tax provisions by using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is measured as the maximum amount which is more likely than not to be realized. The tax position is derecognized when it is no longer more likely than not that the position will be sustained on audit. On subsequent recognition and measurement the maximum amount which is more likely than not to be recognized at each reporting date will represent the Company's best estimate, given the information available at the reporting date, although the outcome of the tax position is not absolute or final. Upon adopting the revisions in ASC Topic 740, we elected to follow an accounting policy to classify accrued interest related to liabilities for income taxes within the “Interest expense” line and penalties related to liabilities for income taxes within the “Other expense” line of our Consolidated Statements of Income, however, in Fiscal 2012 we changed this policy to recognize both items within the "Provision for (recovery of) Income Taxes" line of our Consolidated Statements of Income (see note 14 for more details). Fair value of financial instruments Carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable and accounts payable (trade and accrued liabilities) approximate their fair value due to the relatively short period of time between origination of the instruments and their expected realization. The fair value of our total long-term debt approximates its carrying value. We apply the provisions of ASC 820, “Fair Value Measurements and Disclosures”, to our derivative financial instruments that we are required to carry at fair value pursuant to other accounting standards (see note 15 for more details). Foreign currency Our Consolidated Financial Statements are presented in U.S. dollars. In general, the functional currency of our subsidiaries is the local currency. For each subsidiary, assets and liabilities denominated in foreign currencies are translated into U.S dollars at the exchange rates in effect at balance sheet dates and revenues and expenses are translated at the average exchange rates prevailing during the month of the transaction. The effect of foreign currency translation adjustments not affecting net income are included in Shareholders' equity under the “Cumulative translation adjustment” account as a component of “Accumulated other comprehensive income (loss)”. Transactional foreign currency gains (losses) included in the consolidated statements of income under the line item “Other income (expense)” for Fiscal 2013, Fiscal 2012 and Fiscal 2011 were $(2.6) million, $3.6 million and $(6.6) million, respectively. Restructuring charges We record restructuring charges relating to contractual lease obligations and other exit costs in accordance with ASC Topic 420, “Exit or Disposal Cost Obligations” (ASC Topic 420). ASC Topic 420 requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at its fair value in the period in which the liability is incurred. In order to incur a liability pursuant to ASC Topic 420, our management must have established and approved a plan of restructuring in sufficient detail. A liability for a cost associated with involuntary termination benefits is recorded when benefits have been communicated and a liability for a cost to terminate an operating lease or other contract is incurred when the contract has been terminated in accordance with the contract terms or we have ceased using the right conveyed by the contract, such as vacating a leased facility. The recognition of restructuring charges requires us to make certain judgments regarding the nature, timing and amount associated with the planned restructuring activities, including estimating sub-lease income and the net recoverable amount of equipment to be disposed of. At the end of each reporting period, we evaluate the appropriateness of the remaining accrued balances (see note 17 for more details). Litigation We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 "Loss Contingencies" (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with ASC Topic 450-20. As of the date of this filing on Form 10-K for the year ended June 30, 2013, we do not believe that the outcomes of any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized (see note 13 for more details). Net income per share Basic net income per share is computed using the weighted average number of Common Shares outstanding including contingently issuable shares where the contingency has been resolved. Diluted net income per share is computed using the weighted average number of Common Shares and stock equivalents outstanding using the treasury stock method during the year (see note 22 for more details). Share-based payment We measure share-based compensation costs, in accordance with ASC Topic 718, “Compensation - Stock Compensation” (Topic 718) on the grant date, based on the calculated fair value of the award. We have elected to treat awards with graded vesting as a single award when estimating fair value. Compensation cost is recognized on a straight-line basis over the employee requisite service period, which in our circumstances is the stated vesting period of the award, provided that total compensation cost recognized at least equals the pro rata value of the award that has vested. Compensation cost is initially based on the estimated number of options for which the requisite service is expected to be rendered. This estimate is adjusted in the period once actual forfeitures are known (see note 12 for more details). Accounting for Pensions, post-retirement and post-employment benefits Pension expense is accounted for in accordance with ASC Topic 715, “Compensation-Retirement Benefits” (Topic 715). Pension expense consists of: actuarially computed costs of pension benefits in respect of the current year of service, imputed returns on plan assets (for funded plans) and imputed interest on pension obligations. The expected costs of post retirement benefits, other than pensions, are accrued in the financial statements based upon actuarial methods and assumptions. The over-funded or under-funded status of defined benefit pension and other post retirement plans are recognized as an asset or a liability (with the offset to “Accumulated Other Comprehensive Income” within “Shareholders' equity”), respectively, on the Consolidated Balance Sheet (see note 11 for more details). Recent Accounting Pronouncements In February 2013, the FASB issued Accounting Standards Update No. 2013-02, “Comprehensive Income (Topic 220)-Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (ASU 2013-02), to improve the reporting of reclassifications out of accumulated other comprehensive income. ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety from accumulated other comprehensive income to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 is effective prospectively for us in our first quarter of our fiscal year ending June 30, 2014 (Fiscal 2014) with earlier adoption permitted. We are currently evaluating the impact of our pending adoption of ASU 2013-02 on our consolidated financial statements. On July 18, 2013, the FASB issued Accounting Standards Update No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (ASU 2013-11). ASU 2013-11, which is effective prospectively for fiscal years, and interim periods withing those years, beginning after December 15, 2013, is expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. We are currently evaluating the impact of our pending adoption of ASU 2013-02 on our Consolidated Financial Statements. |
Pension Plans And Other Post Retirement Benefits (Tables)
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of CDT Defined Benefit Plan And CDT Long-Term Employee Benefit Obligations | The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT) and Open Text Software GmbH (IXOS) as of June 30, 2013 and June 30, 2012:
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Schedule Of The Change In The Benefit Obligation Of CDT Defined Benefit Plan | The following are the details of the change in the benefit obligation for the CDT pension plan for the periods indicated:
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Components Of Net Pension Expense For CDT Pension Plan | The following are the details of net pension expense for the CDT pension plan for the periods indicated:
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Schedule Of Weighted-Average Key Assumptions Used For CDT Pension Plan | In determining the fair value of the CDT pension plan benefit obligations as of June 30, 2013 and June 30, 2012, respectively, we used the following weighted-average key assumptions:
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Anticipated Pension Payments Under CDT Pension Plan | Anticipated pension payments under the CDT pension plan for the fiscal years indicated below are as follows:
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Other Income (Expense)
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense) | OTHER INCOME (EXPENSE) Other Income (expense) is comprised of the following:
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Significant Accounting Policies (Policies)
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Accounting Policies [Abstract] | |||||||||||||||||
Asset Retirement Obligations Policy Operating Leases [Policy Text Block] | Asset retirement obligations We account for asset retirement obligations in accordance with ASC Topic 410, “Asset Retirement and Environmental Obligations” (Topic 410), which applies to certain obligations associated with “leasehold improvements” within our leased office facilities. Topic 410 requires that a liability be initially recognized for the estimated fair value of the obligation when it is incurred. The associated asset retirement cost is capitalized as part of the carrying amount of the long-lived asset and depreciated over the remaining life of the underlying asset and the associated liability is accreted to the estimated fair value of the obligation at the settlement date through periodic accretion charges recorded within general and administrative expenses. When the obligation is settled, any difference between the final cost and the recorded amount is recognized as income or loss on settlement. |
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Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of long-lived assets We account for the impairment and disposition of long-lived assets in accordance with ASC Topic 360, “Property, Plant, and Equipment” (Topic 360). We test long-lived assets or asset groups, such as property and equipment and definite lived intangible assets, for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated useful life. Recoverability is assessed based on comparing the carrying amount of the asset to the aggregate pre-tax undiscounted cash flows expected to result from the use and eventual disposal of the asset or asset group. Impairment is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss, if any, is measured as the amount by which the carrying amount exceeds fair value, which for this purpose is based upon the discounted projected future cash flows of the asset or asset group. We have not recorded any impairment charges for long-lived assets during Fiscal 2013, Fiscal 2012 and Fiscal 2011. |
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Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include investments that have terms to maturity of three months or less. Cash equivalents are recorded at cost and typically consist of term deposits, commercial paper, certificates of deposit and short-term interest bearing investment-grade securities of major banks in the countries in which we operate. |
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Property and equipment | Property and equipment Property and equipment are stated at the lower of cost or net realizable value, and shown net of depreciation which is computed on a straight-line basis over the estimated useful lives of the related assets. Gains and losses on asset disposals are taken into income in the year of disposition. Fully depreciated property and equipment are retired from the balance sheet when they are no longer in use. We did not recognize any significant property impairment charges in Fiscal 2013, Fiscal 2012, or Fiscal 2011. The following represents the estimated useful lives of property and equipment:
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Business combinations | Business combinations We apply the provisions of ASC Topic 805, “Business Combinations” (Topic 805), in the accounting for our acquisitions. It requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Costs to exit or restructure certain activities of an acquired company or our internal operations are accounted for as one-time termination and exit costs pursuant to ASC Topic 420, “Exit or Disposal Cost Obligations” (Topic 420) and are accounted for separately from the business combination. For a given acquisition, we generally identify certain pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as a part of the purchase price allocation and, if so, to determine the estimated amounts. If we determine that a pre-acquisition contingency (non-income tax related) is probable in nature and estimable as of the acquisition date, we record our best estimate for such a contingency as a part of the preliminary purchase price allocation. We often continue to gather information and evaluate our pre-acquisition contingencies throughout the measurement period and if we make changes to the amounts recorded or if we identify additional pre-acquisition contingencies during the measurement period, such amounts will be included in the purchase price allocation during the measurement period and, subsequently, in our results of operations. Uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We review these items during the measurement period as we continue to actively seek and collect information relating to facts and circumstances that existed at the acquisition date. Changes to these uncertain tax positions and tax related valuation allowances made subsequent to the measurement period, or if they relate to facts and circumstances that did not exist at the acquisition date, are recorded in our provision for income taxes in our Consolidated Statement of Income |
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Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Acquired intangibles Acquired intangibles consist of acquired technology and customer relationships associated with various acquisitions. Acquired technology is initially recorded at fair value based on the present value of the estimated net future income-producing capabilities of software products acquired on acquisitions. We amortize acquired technology over its estimated useful life on a straight-line basis. Customer relationships represent relationships that we have with customers of the acquired companies and are either based upon contractual or legal rights or are considered separable; that is, capable of being separated from the acquired entity and being sold, transferred, licensed, rented or exchanged. These customer relationships are initially recorded at their fair value based on the present value of expected future cash flows. We amortize customer relationships on a straight-line basis over their estimated useful lives. We continually evaluate the remaining estimated useful life of our intangible assets being amortized to determine whether events and circumstances warrant a revision to the remaining period of amortization |
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Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. The carrying amount of goodwill is periodically reviewed for impairment (at a minimum annually) and whenever events or changes in circumstances indicate that the carrying value of this asset may not be recoverable. Our operations are analyzed by management and our chief operating decision maker (CODM) as being part of a single industry segment: the design, development, marketing and sales of Enterprise Information Management software and solutions. Therefore, our goodwill impairment assessment is based on the allocation of goodwill to a single reporting unit. Effective Fiscal 2013, we opted to perform a qualitative assessment to test our reporting unit's goodwill for impairment. Based on our qualitative assessment, if we determine that the fair value of our reporting unit is more likely than not (i.e., a likelihood of more than 50 percent) to be less than its carrying amount, the two step impairment test will be performed. In the first step, we compare the fair value of our reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired and we are not required to perform further testing. If the carrying value of the net assets of our reporting unit exceeds its fair value, then we must perform the second step of the impairment test in order to determine the implied fair value of our reporting unit's goodwill. If the carrying value our reporting unit's goodwill exceeds its implied fair value, then we would record an impairment loss equal to the difference. Our annual impairment analysis of goodwill was performed as of April 1, 2013. Our qualitative assessment indicated that there were no indications of impairment and the fair value of our reporting unit was in excess of its carrying value and therefore there was no impairment of goodwill required to be recorded for Fiscal 2013 (No impairments were recorded for Fiscal 2012 and Fiscal 2011). |
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Derivatives, Policy [Policy Text Block] | Derivative financial instruments We use derivative financial instruments to manage foreign currency rate risk. We account for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging” (Topic 815), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of the reporting date. Topic 815 also requires that changes in our derivative financial instruments' fair values be recognized in earnings; unless specific hedge accounting and documentation criteria are met (i.e. the instruments are accounted for as hedges). We recorded the effective portions of the gain or loss on derivative financial instruments that were designated as cash flow hedges in accumulated other comprehensive income in our accompanying Consolidated Balance Sheets. Any ineffective or excluded portion of a designated cash flow hedge, if applicable, was recognized in our Consolidated Statement of Income. |
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Allowance For Doubtful Accounts, Policy [Policy Text Block] | Allowance for doubtful accounts We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make payments. We evaluate the creditworthiness of our customers prior to order fulfillment and based on these evaluations, we adjust our credit limit to the respective customer. In addition to these evaluations, we conduct on-going credit evaluations of our customers' payment history and current creditworthiness. The allowance is maintained for 100% of all accounts deemed to be uncollectible and, for those receivables not specifically identified as uncollectible, an allowance is maintained for a specific percentage of those receivables based upon the aging of accounts, our historical collection experience and current economic expectations. To date, the actual losses have been within our expectations. No single customer accounted for more than 10% of the accounts receivable balance as of June 30, 2013 and 2012. |
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Revenue Recognition, Policy [Policy Text Block] | Revenue recognition License revenues We recognize revenues in accordance with ASC Topic 985-605, “Software Revenue Recognition” (Topic 985-605). We record product revenues from software licenses and products when persuasive evidence of an arrangement exists, the software product has been shipped, there are no significant uncertainties surrounding product acceptance by the customer, the fees are fixed and determinable, and collection is considered probable. We use the residual method to recognize revenues on delivered elements when a license agreement includes one or more elements to be delivered at a future date if evidence of the fair value of all undelivered elements exists. If an undelivered element for the arrangement exists under the license arrangement, revenues related to the undelivered element is deferred based on vendor-specific objective evidence (VSOE) of the fair value of the undelivered element. Our multiple-element sales arrangements include arrangements where software licenses and the associated post contract customer support (PCS) are sold together. We have established VSOE of the fair value of the undelivered PCS element based on the contracted price for renewal PCS included in the original multiple element sales arrangement, as substantiated by contractual terms and our significant PCS renewal experience, from our existing worldwide base. Our multiple element sales arrangements generally include irrevocable rights for the customer to renew PCS after the bundled term ends. The customer is not subject to any economic or other penalty for failure to renew. Further, the renewal PCS options are for services comparable to the bundled PCS and cover similar terms. It is our experience that customers generally exercise their renewal PCS option. In the renewal transaction, PCS is sold on a stand-alone basis to the licensees one year or more after the original multiple element sales arrangement. The exercised renewal PCS price is consistent with the renewal price in the original multiple element sales arrangement, although an adjustment to reflect consumer price changes is not uncommon. If VSOE of fair value does not exist for all undelivered elements, all revenues are deferred until sufficient evidence exists or all elements have been delivered. We assess whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring. Our sales arrangements generally include standard payment terms. These terms effectively relate to all customers, products, and arrangements regardless of customer type, product mix or arrangement size. Exceptions are only made to these standard terms for certain sales in parts of the world where local practice differs. In these jurisdictions, our customary payment terms are in line with local practice. Cloud revenues Cloud revenues consist of subscription revenues for our software as a service offering. The majority of the contracts for our software as a service offering are based on customers' usage over a period and the revenue associated with those contracts are recognized once the usage has been measured, the fee fixed and determinable and collection is probable. Some of the contracts for our software as a service offering have an established fixed periodic fee and the revenue associated with those contracts are recognized ratably over the term of the contract. Service revenues Service revenues consist of revenues from consulting, implementation, training and integration services. These services are set forth separately in the contractual arrangements such that the total price of the customer arrangement is expected to vary as a result of the inclusion or exclusion of these services. For those contracts where the services are not essential to the functionality of any other element of the transaction, we determine VSOE of fair value for these services based upon normal pricing and discounting practices for these services when sold separately. These consulting and implementation services contracts are primarily time and materials based contracts that are, on average, less than six months in length. Revenues from these services are recognized at the time such services are rendered. We also enter into contracts that are primarily fixed fee arrangements wherein the services are not essential to the functionality of a software element. In such cases, the proportional performance method is applied to recognize revenues. Revenues from training and integration services are recognized in the period in which these services are performed. Customer support revenues Customer support revenues consist of revenues derived from contracts to provide PCS to license holders. These revenues are recognized ratably over the term of the contract. Advance billings of PCS are not recorded to the extent that the term of the PCS has not commenced and payment has not been received. |
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Revenue Recognition, Deferred Revenue [Policy Text Block] | Deferred revenues Deferred revenues primarily relate to support agreements which have been paid for by customers prior to the performance of those services. Generally, the services will be provided in the twelve months after the signing of the agreement. |
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Revenue Recognition, Long-term Contracts [Policy Text Block] | Long-term sales contracts We entered into certain long-term sales contracts involving the sale of integrated solutions that include the modification and customization of software and the provision of services that are essential to the functionality of the other elements in this arrangement. As prescribed by ASC Topic 985-605, we recognize revenues from such arrangements in accordance with the contract accounting guidelines in ASC Topic 605-35, “Construction-Type and Production-Type Contracts” (Topic 605-35), after evaluating for separation of any non-Topic 605-35 elements in accordance with the provisions of ASC Topic 605-25, “Multiple-Element Arrangements” (Topic 605-25). When circumstances exist that allow us to make reasonably dependable estimates of contract revenues, contract costs and the progress of the contract to completion, we account for sales under such long-term contracts using the percentage-of-completion (POC) method of accounting. Under the POC method, progress towards completion of the contract is measured based upon either input measures or output measures. We measure progress towards completion based upon an input measure and calculate this as the proportion of the actual hours incurred compared to the total estimated hours. For training and integration services rendered under such contracts, revenues are recognized as the services are rendered. We will review, on a quarterly basis, the total estimated remaining costs to completion for each of these contracts and apply the impact of any changes on the POC prospectively. If at any time we anticipate that the estimated remaining costs to completion will exceed the value of the contract, the resulting loss will be recognized immediately. When circumstances exist that prevent us from making reasonably dependable estimates of contract revenues, we account for sales under such long-term contracts using the completed contract method. |
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Revenue Recognition Sales to Resellers and Channel Partners [Policy Text Block] | Sales to resellers and channel partners We execute certain sales contracts through resellers and distributors (collectively, resellers) and also large, well-capitalized partners such as SAP AG and Accenture Inc. (collectively, channel partners). We recognize revenues relating to sales through resellers when all the recognition criteria have been met, in other words, persuasive evidence of an arrangement exists, delivery has occurred in the reporting period, the fee is fixed and determinable, and collectability is probable. Typically, we recognize revenues to resellers only after the reseller communicates the occurrence of end-user sales to us, since we do not have privity of contract with the end-user. In addition we assess the creditworthiness of each reseller and if the reseller is newly formed, undercapitalized or in financial difficulty any revenues expected to emanate from such resellers are deferred and recognized only when cash is received and all other revenue recognition criteria are met. We recognize revenues relating to sales through channel partners in the reporting period in which we receive evidence, from the channel partner, of end user sales (collectively, the documentation) and all other revenue recognition criteria have been met. As a result, if the documentation is not received within a given reporting period we recognize the revenues in a period subsequent to the period in which the channel partner completes the sale to the end user. |
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Revenue Recognition, Sales Returns [Policy Text Block] | Rights of return and other incentives We do not generally offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, do not provide for or make estimates of rights of return and similar incentives. |
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Research, Development, and Computer Software, Policy [Policy Text Block] | Research and development costs Research and development costs internally incurred in creating computer software to be sold, licensed or otherwise marketed are expensed as incurred unless they meet the criteria for deferral and amortization, as described in ASC Topic 985-20, “Costs of Software to be Sold, Leased, or Marketed” (Topic 985-20). In accordance with Topic 985-20, costs related to research, design and development of products are charged to expenses as incurred and capitalized between the dates that the product is considered to be technologically feasible and is considered to be ready for general release to customers. In our historical experience, the dates relating to the achievement of technological feasibility and general release of the product have substantially coincided. In addition, no significant costs are incurred subsequent to the establishment of technological feasibility. As a result, we do not capitalize any research and development costs relating to internally developed software to be sold, licensed or otherwise marketed. |
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Income Tax, Policy [Policy Text Block] | Income taxes We account for income taxes in accordance with ASC Topic 740, “Income Taxes” (Topic 740). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that we consider it is more likely than not that a deferred tax asset will not be realized. In determining the valuation allowance, we consider factors such as the reversal of deferred income tax liabilities, projected taxable income, and the character of income tax assets and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense. We account for our uncertain tax provisions by using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is measured as the maximum amount which is more likely than not to be realized. The tax position is derecognized when it is no longer more likely than not that the position will be sustained on audit. On subsequent recognition and measurement the maximum amount which is more likely than not to be recognized at each reporting date will represent the Company's best estimate, given the information available at the reporting date, although the outcome of the tax position is not absolute or final. Upon adopting the revisions in ASC Topic 740, we elected to follow an accounting policy to classify accrued interest related to liabilities for income taxes within the “Interest expense” line and penalties related to liabilities for income taxes within the “Other expense” line of our Consolidated Statements of Income, however, in Fiscal 2012 we changed this policy to recognize both items within the "Provision for (recovery of) Income Taxes" line of our Consolidated Statements of Income (see note 14 for more details). |
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair value of financial instruments Carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable and accounts payable (trade and accrued liabilities) approximate their fair value due to the relatively short period of time between origination of the instruments and their expected realization. The fair value of our total long-term debt approximates its carrying value. We apply the provisions of ASC 820, “Fair Value Measurements and Disclosures”, to our derivative financial instruments that we are required to carry at fair value pursuant to other accounting standards (see note 15 for more details). |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign currency Our Consolidated Financial Statements are presented in U.S. dollars. In general, the functional currency of our subsidiaries is the local currency. For each subsidiary, assets and liabilities denominated in foreign currencies are translated into U.S dollars at the exchange rates in effect at balance sheet dates and revenues and expenses are translated at the average exchange rates prevailing during the month of the transaction. The effect of foreign currency translation adjustments not affecting net income are included in Shareholders' equity under the “Cumulative translation adjustment” account as a component of “Accumulated other comprehensive income (loss)”. Transactional foreign currency gains (losses) included in the consolidated statements of income under the line item “Other income (expense)” for Fiscal 2013, Fiscal 2012 and Fiscal 2011 were $(2.6) million, $3.6 million and $(6.6) million, respectively. |
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Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | Restructuring charges We record restructuring charges relating to contractual lease obligations and other exit costs in accordance with ASC Topic 420, “Exit or Disposal Cost Obligations” (ASC Topic 420). ASC Topic 420 requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at its fair value in the period in which the liability is incurred. In order to incur a liability pursuant to ASC Topic 420, our management must have established and approved a plan of restructuring in sufficient detail. A liability for a cost associated with involuntary termination benefits is recorded when benefits have been communicated and a liability for a cost to terminate an operating lease or other contract is incurred when the contract has been terminated in accordance with the contract terms or we have ceased using the right conveyed by the contract, such as vacating a leased facility. The recognition of restructuring charges requires us to make certain judgments regarding the nature, timing and amount associated with the planned restructuring activities, including estimating sub-lease income and the net recoverable amount of equipment to be disposed of. At the end of each reporting period, we evaluate the appropriateness of the remaining accrued balances (see note 17 for more details). |
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Litigation [Policy Text Block] | Litigation We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 "Loss Contingencies" (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with ASC Topic 450-20. As of the date of this filing on Form 10-K for the year ended June 30, 2013, we do not believe that the outcomes of any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized (see note 13 for more details). |
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Earnings Per Share, Policy [Policy Text Block] | Net income per share Basic net income per share is computed using the weighted average number of Common Shares outstanding including contingently issuable shares where the contingency has been resolved. Diluted net income per share is computed using the weighted average number of Common Shares and stock equivalents outstanding using the treasury stock method during the year (see note 22 for more details). |
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Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Share-based payment We measure share-based compensation costs, in accordance with ASC Topic 718, “Compensation - Stock Compensation” (Topic 718) on the grant date, based on the calculated fair value of the award. We have elected to treat awards with graded vesting as a single award when estimating fair value. Compensation cost is recognized on a straight-line basis over the employee requisite service period, which in our circumstances is the stated vesting period of the award, provided that total compensation cost recognized at least equals the pro rata value of the award that has vested. Compensation cost is initially based on the estimated number of options for which the requisite service is expected to be rendered. This estimate is adjusted in the period once actual forfeitures are known (see note 12 for more details). |
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Pension and Other Postretirement Plans, Policy [Policy Text Block] | Accounting for Pensions, post-retirement and post-employment benefits Pension expense is accounted for in accordance with ASC Topic 715, “Compensation-Retirement Benefits” (Topic 715). Pension expense consists of: actuarially computed costs of pension benefits in respect of the current year of service, imputed returns on plan assets (for funded plans) and imputed interest on pension obligations. The expected costs of post retirement benefits, other than pensions, are accrued in the financial statements based upon actuarial methods and assumptions. The over-funded or under-funded status of defined benefit pension and other post retirement plans are recognized as an asset or a liability (with the offset to “Accumulated Other Comprehensive Income” within “Shareholders' equity”), respectively, on the Consolidated Balance Sheet (see note 11 for more details). |
Pension Plans And Other Post Retirement Benefits (Schedule Of The Change In The Benefit Obligation Of CDT Defined Benefit Plan) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
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Jun. 30, 2013
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Jun. 30, 2012
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Compensation and Retirement Disclosure [Abstract] | ||
Benefit obligation-beginning of period | $ 21,461 | $ 18,231 |
Service cost | 457 | 326 |
Interest cost | 888 | 873 |
Benefits paid | (466) | (441) |
Actuarial (gain) loss | 278 | 5,179 |
Foreign exchange (gain) loss | 1,253 | (2,707) |
Benefit obligation-end of period | 23,871 | 21,461 |
Less: current portion | (535) | (475) |
Noncurrent portion of benefit obligation | $ 23,336 | $ 20,986 |
Other Income (Expense) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2011
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Other Income and Expenses [Abstract] | |||
Transactional foreign exchange gain (loss) | $ (2,635) | $ 3,642 | $ (6,574) |
Gain (loss) on sale of marketable securities | 0 | 0 | 443 |
Other | 162 | (93) | 112 |
Other income (expense), net | $ (2,473) | $ 3,549 | $ (6,019) |
Acquired Intangible Assets (Tables)
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Jun. 30, 2013
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Acquired Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation Of Acquired Intangibles By Asset Class |
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Calculation Of Estimated Future Amortization Expense | The following table shows the estimated future amortization expense for the fiscal years indicated below. This calculation assumes no future adjustments to acquired intangible assets:
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Special Charges (Narrative) (Details) (USD $)
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12 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2011
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Restructuring Cost and Reserve [Line Items] | |||
Acquisition-related costs | $ 4,925,000 | $ 5,115,000 | $ 2,914,000 |
Other charges | 2,770,000 | 1,389,000 | (482,000) |
Special Charges [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Acquisition-related costs | 2,900,000 | 1,800,000 | 2,900,000 |
Acquisition-integration related costs | 2,000,000 | 3,300,000 | 0 |
Recovery ARO [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Other charges | 1,900,000 | 800,000 | 1,000,000 |
Litigation Settlement [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Other charges | 400,000 | ||
Miscellaneous Other Charges [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Other charges | 500,000 | ||
Recovery Sublease [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Other charges | 500,000 | ||
Write-off of Debt Issuance Costs [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Other charges | 2,700,000 | ||
Charge Revised Sublease [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Other charges | 500,000 | ||
Fiscal 2013 Restructuring Plan [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | 7,601,000 | 0 | |
Special charges recorded to date | 15,800,000 | ||
Accruals and adjustments | 15,754,000 | ||
Restructuring Reserve, Settled with Cash | (8,102,000) | ||
Foreign exchange | (51,000) | ||
Fiscal 2013 Restructuring Plan [Member] | Employee Severance [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | 3,205,000 | 0 | |
Accruals and adjustments | 9,970,000 | ||
Restructuring Reserve, Settled with Cash | (6,713,000) | ||
Foreign exchange | (52,000) | ||
Fiscal 2013 Restructuring Plan [Member] | Facility Costs [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | 4,396,000 | 0 | |
Accruals and adjustments | 5,784,000 | ||
Restructuring Reserve, Settled with Cash | (1,389,000) | ||
Foreign exchange | 1,000 | ||
Fiscal 2012 Restructuring Plan [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | 2,295,000 | 7,777,000 | 0 |
Special charges recorded to date | 17,900,000 | ||
Accruals and adjustments | 971,000 | 16,897,000 | |
Restructuring Reserve, Settled with Cash | (6,460,000) | (8,688,000) | |
Foreign exchange | 7,000 | (432,000) | |
Fiscal 2012 Restructuring Plan [Member] | Employee Severance [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | 309,000 | 4,422,000 | 0 |
Accruals and adjustments | 1,155,000 | 13,006,000 | |
Restructuring Reserve, Settled with Cash | (5,201,000) | (8,202,000) | |
Foreign exchange | (67,000) | (382,000) | |
Fiscal 2012 Restructuring Plan [Member] | Facility Costs [Member]
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Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | 1,986,000 | 3,355,000 | 0 |
Accruals and adjustments | (184,000) | 3,891,000 | |
Restructuring Reserve, Settled with Cash | (1,259,000) | (486,000) | |
Foreign exchange | $ 74,000 | $ (50,000) |
Significant Accounting Policies (Property, Plant and Equipment Useful Lives) (Details)
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12 Months Ended |
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Jun. 30, 2013
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Furniture and fixtures [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated useful lives of capital assets | 5 years |
Office equipment [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated useful lives of capital assets | 5 years |
Computer hardware [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated useful lives of capital assets | 3 years |
Computer software [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated useful lives of capital assets | 3 years |
Leasehold improvements [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated useful lives of capital assets | 5 years |
Buildings [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated useful lives of capital assets | 40 years |