8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 19, 2012

COMVERSE TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

NEW YORK	001-35303	13-3238402
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

810 Seventh Avenue

New York, New York

10019

(Address of Principal Executive Offices)

(Zip Code)

Registrant's telephone number, including area code: (212) 739-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01     Completion of Acquisition or Disposition of Assets.

On August 1, 2012, Comverse Technology, Inc. ("CTI" and together with its subsidiaries, the "Company"), certain other shareholders of Starhome B.V. ("Starhome") and Starhome entered into a Share Purchase Agreement (the “Starhome Share Purchase Agreement”) with Fortissimo Capital Fund II (Israel), L.P., Fortissimo Capital Fund III (Israel), L.P. and Fortissimo Capital Fund III (Cayman), L.P. (collectively, “Fortissimo”) pursuant to which Fortissimo agreed to purchase all of the outstanding share capital of Starhome (the “Starhome Disposition”). On September 19, 2012, CTI contributed to Comverse, Inc. ("Comverse"), its wholly-owned subsidiary, its interest in Starhome, including its rights and obligations under the Starhome Share Purchase Agreement discussed below. The Starhome Disposition was completed on October 19, 2012.

Under the terms of the Starhome Share Purchase Agreement, Starhome’s shareholders received aggregate cash proceeds of approximately $81.3 million, subject to adjustment for fees, transaction expenses and certain taxes. Of this amount, $10.5 million is held in escrow to cover potential post-closing indemnification claims, with $5.5 million being released after 18 months and the remainder released after 24 months, in each case, less any claims made on or prior to such dates. Comverse received aggregate net cash consideration (including amounts deposited in escrow at closing) of approximately $37.2 million, after payments that CTI agreed to make to certain other Starhome shareholders of approximately $4.5 million.

Starhome is a provider of wireless service mobility solutions that enhance international roaming. Wireless operators use Starhome’s software–based solutions to generate additional revenue and to improve profitability by directing international roaming traffic to preferred networks and by providing a wide range of services to subscribers traveling outside their home network.

The information set forth in Item 8.01 below and in Exhibit 99.1 hereto includes historical financial information that presents the Company's recast consolidated financial statement information and CTI Parent Company condensed financial statement information as of January 31, 2012 and 2011 and for the fiscal years ended January 31, 2012, 2011 and 2010 to reflect Starhome as discontinued operations. Such historical financial information is incorporated into this item by reference. The recast consolidated financial statement information is also intended to satisfy the requirements for presentation of pro forma information related to the completion of the Starhome Disposition.

Item 8.01             Other Events

Financial Presentation

This Current Report on Form 8-K (this “Form 8-K”) presents the Company's recast consolidated financial statement information and CTI Parent Company condensed financial statement information as of January 31, 2012 and 2011 and for the fiscal years ended January 31, 2012, 2011 and 2010 to reflect the results of operations and the assets and liabilities of Starhome B.V. (“Starhome”), a majority-owned subsidiary of CTI, as discontinued operations. Further, because the Company, as a result of the discontinued operations, is recasting the financial statements included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2012 (the "2011 Form 10-K"), the Company has presented consolidated statements of comprehensive loss to reflect the retrospective effect of adoption of the updated guidance issued by the Financial Accounting Standards Board ("FASB") in June 2011 and has retrospectively adjusted its consolidated balance sheet as of January 31, 2012 to reflect changes to provisional purchase price allocation for several acquisitions completed during the fiscal year ended January 31, 2012 as more fully explained below. The revised financial statement information presentation is included in Exhibit 99.1 hereto and incorporated by reference herein. The information contained in this Form 8-K is not an amendment to, a material recast of or a restatement of, the 2011 Form 10-K.

Explanatory Note

As a result of the anticipated Starhome Disposition, in CTI's Quarterly Report on Form 10-Q for the quarter ended July 31, 2012 (the “Q2 Form 10-Q”), the results of operations of Starhome were included in discontinued operations, less applicable income taxes, as a separate component of net income (loss) in the Company's condensed consolidated statements of operations for all periods presented and the assets and liabilities of Starhome were included in discontinued operations as separate components to the Company's condensed consolidated balance sheets as of all dates presented. In this Form 8-K the Company is presenting recast financial statement information as of January 31, 2012 and 2011 and for the fiscal years ended January 31, 2012, 2011 and 2010 consistent with the presentation included in its Q2 Form 10-Q. As of January 31, 2012 and 2011, Starhome's total assets were $49.7 million and $44.3 million, respectively, and total liabilities were $33.4 million and $36.1 million, respectively.  For the fiscal years ended January 31, 2012, 2011 and 2010, Starhome's total revenue were $45 million, $37.2 million and $37.5 million, respectively, income before taxes was $8.5 million, $3.1 million and $3.3 million, respectively, and income after taxes was $7.8 million, $2.8 million and $3.0 million, respectively.  The recast consolidated statements of cash flows includes Starhome's cash flow as cash flows from discontinued operations. For the fiscal years ended January 31, 2012, 2011 and 2010, Starhome's cash provided by operating activities was $11.8 million, $7.6 million and approximately $4.5 million, respectively.

Verint Systems Inc., CTI's majority-owned subsidiary, adjusted provisional purchase price allocations for several acquisitions completed during the fiscal year ended January 31, 2012 resulting from additional information obtained about facts and circumstances that existed as of the respective acquisition dates.  Accordingly, the consolidated balance sheet as of January 31, 2012 presented in Exhibit 99.1 has been recast to reflect the impact of these adjustments.  These adjustments resulted in decreases in (i) goodwill of $2.9 million, (ii) intangible assets, net of $0.6 million, (iii) accounts payable and accrued expenses of $0.2 million, and (iv) long-term deferred income tax liabilities of $3.1 million and a $0.2 million increase in long-term deferred tax assets.

In June 2011, the FASB issued guidance on the presentation of comprehensive income in financial statements. Entities are required to present total comprehensive income either in a single, continuous statement of comprehensive income or in two separate, but consecutive statements. The Company adopted this standard as of February 1, 2012, and now presents net income and other comprehensive income in two separate, consecutive statements in its consolidated financial statements. In this Form 8-K the Company is retrospectively applying the FASB's guidance by presenting a separate statement of comprehensive income for the fiscal years ended January 31, 2012, 2011 and 2010 consistent with the presentation included in its Q2 Form 10-Q.

The presentation of Starhome as discontinued operations and the presentation of comprehensive income in a separate statement affects only the manner in which certain financial information was previously reported. The retrospective application of this guidance had no impact on the Company's consolidated financial condition or results of operations.

Item 9.01.Financial Statements and Exhibits

(d) Exhibit Description

99.1 Unaudited - Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive Loss, Consolidated Statements of Cash Flow and Consolidated Statements of Equity, and Unaudited Parent Company condensed financial statement information.

SIGNATURES

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

		COMVERSE TECHNOLOGY, INC.
October 19, 2012	By:	/s/ Joel E. Legon
		Joel E. Legon
		Senior Vice President, Interim Chief Financial Officer

EX-99.1

EXHIBIT 99.1

COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share and per share data)

	January 31,
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	483,171		$	560,181
Restricted cash and bank time deposits	41,756			73,117
Auction rate securities	272			72,441
Accounts receivable, net of allowance of $12,097 and $13,064, respectively	286,767			312,005
Inventories, net	41,689			62,808
Deferred cost of revenue	46,315			51,599
Deferred income taxes	23,208			39,644
Prepaid expenses and other current assets	100,742			90,864
Current assets of discontinued operations	40,773			34,483
Total current assets	1,064,693			1,297,142
Property and equipment, net	74,540			65,635
Goodwill	1,049,672			959,665
Intangible assets, net	206,264			196,460
Deferred cost of revenue	121,163			158,814
Deferred income taxes	19,620			20,766
Other assets	101,455			106,740
Noncurrent assets of discontinued operations	8,961			9,780
Total assets	$	2,646,368		$	2,815,002
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	374,716		$	394,590
Convertible debt obligations	2,195			2,195
Deferred revenue	504,663			543,809
Deferred income taxes	9,798			13,661
Bank loans	6,228			6,000
Litigation settlement	—			146,150
Income taxes payable	8,473			11,382
Other current liabilities	41,950			50,280
Current liabilities of discontinued operations	27,984			24,598
Total current liabilities	976,007			1,192,665
Bank loans	591,151			583,234
Deferred revenue	227,985			261,466
Deferred income taxes	81,599			52,953
Other long-term liabilities	211,444			227,329
Noncurrent liabilities of discontinued operations	5,430			11,468
Total liabilities	2,093,616			2,329,115
Commitments and contingencies
Equity:
Comverse Technology, Inc. shareholders’ equity:
Common stock, $0.10 par value - authorized, 600,000,000 shares; issued 219,708,779 and 204,937,882 shares, respectively; outstanding, 218,636,842 and 204,533,916 shares, respectively	21,971			20,494
Treasury stock, at cost, 1,071,937 and 403,966 shares, respectively	(8,011		)	(3,484		)
Additional paid-in capital	2,198,086			2,088,717
Accumulated deficit	(1,766,364		)	(1,707,638		)
Accumulated other comprehensive (loss) income	(4,174		)	14,919
Total Comverse Technology, Inc. shareholders’ equity	441,508			413,008
Noncontrolling interest	111,244			72,879
Total equity	552,752			485,887
Total liabilities and equity	$	2,646,368		$	2,815,002

COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except share and per share data)

	Fiscal Years Ended January 31,
	2012			2011			2010
Revenue:
Product revenue	$	666,851		$	676,066		$	618,749
Service revenue	886,954			913,569			879,731
Total revenue	1,553,805			1,589,635			1,498,480
Costs and expenses:
Product costs	274,474			258,187			245,579
Service costs	462,754			452,771			464,674
Research and development, net	205,239			245,342			259,746
Selling, general and administrative	566,587			673,512			704,815
Other operating expense (income):
Litigation settlements	4,880			(17,500		)	—
Impairment of intangible assets	—			—			3,356
Restructuring charges	20,728			29,934			15,413
Total other operating expense	25,608			12,434			18,769
Total costs and expenses	1,534,662			1,642,246			1,693,583
Income (loss) from operations	19,143			(52,611		)	(195,103		)
Interest income	4,174			4,093			7,043
Interest expense	(33,332		)	(30,813		)	(25,381		)
Loss on extinguishment of debt	(8,136		)	—			—
Other income (expense), net	21,630			5,974			(18,095		)
Income (loss) before income tax (provision) benefit	3,479			(73,357		)	(231,536		)
Income tax (provision) benefit	(42,259		)	(36,932		)	7,297
Net loss from continuing operations	(38,780		)	(110,289		)	(224,239		)
Income (loss) from discontinued operations, net of tax	7,761			(8,213		)	(40,013		)
Net loss	(31,019		)	(118,502		)	(264,252		)
Less: Net income attributable to noncontrolling interest	(27,707		)	(13,820		)	(7,783		)
Net loss attributable to Comverse Technology, Inc.	$	(58,726	)	$	(132,322	)	$	(272,035	)
Weighted average common shares outstanding:
Basic and Diluted	208,301,686			205,162,720			204,513,420
Loss per share attributable to Comverse Technology, Inc.’s shareholders:
Basic (loss) income per share
Continuing operations	$	(0.31	)	$	(0.62	)	$	(1.14	)
Discontinued operations	0.03			(0.02		)	(0.19		)
Basic loss per share	$	(0.28	)	$	(0.64	)	$	(1.33	)
Diluted (loss) income per share
Continuing operations	$	(0.31	)	$	(0.62	)	$	(1.14	)
Discontinued operations	0.03			(0.03		)	(0.19		)
Diluted loss per share	$	(0.28	)	$	(0.65	)	$	(1.33	)
Net loss attributable to Comverse Technology, Inc.
Net loss from continuing operations	$	(63,913	)	$	(127,413	)	$	(232,408	)
Income (loss) from discontinued operations, net of tax	5,187			(4,909		)	(39,627		)
Net loss attributable to Comverse Technology, Inc.	$	(58,726	)	$	(132,322	)	$	(272,035	)

2

COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(In thousands)

	Fiscal Years Ended January 31,
	2012			2011			2010
Net loss	$	(31,019	)	$	(118,502	)	$	(264,252	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	(2,059		)	(840		)	14,570
Unrealized (loss) gain on available-for-sale securities, net of reclassification adjustments and tax	(21,634		)	(7,818		)	15,308
Unrealized gain (loss) on cash flow hedges, net of reclassification adjustments and tax	280			(206		)	3,815
Other comprehensive (loss) income, net of tax	(23,413		)	(8,864		)	33,693
Comprehensive loss, net of tax	(54,432		)	(127,366		)	(230,559		)
Less: comprehensive income attributable to noncontrolling interest	(23,387		)	(9,294		)	(14,283		)
Comprehensive loss attributable to Comverse Technology, Inc.	$	(77,819	)	$	(136,660	)	$	(244,842	)

3

COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

(UNAUDITED)

(In thousands, except share data)

	Common Stock														Accumulated Other Comprehensive Income (Loss)
	Number of Shares		Par Value			Treasury Stock			Additional Paid-in Capital			Accumulated Deficit			Unrealized Gains (Losses) on Available-for- Sale Securities			Unrealized (Losses) Gains on Derivatives			Cumulative Translation Adjustment			Total Accumulated Other Comprehensive Income (Loss)			Comverse Technology,  Inc.’s Shareholders’ Equity			Noncontrolling Interest			Total Equity
Balance, January 31, 2009	204,111,096		$	20,421		$	(1,219	)	$	1,945,273		$	(1,303,281	)	$	10,302		$	(3,028	)	$	(15,210	)	$	(7,936	)	$	653,258		$	109,929		$	763,187
Net loss	—		—			—			—			(272,035		)	—			—			—			—			(272,035		)	7,783			(264,252		)
Other comprehensive income, net of tax	—		—			—			—			—			15,361			3,813			8,019			27,193			27,193			6,500			33,693
Stock-based compensation expense	—		—			—			11,322			—			—			—			—			—			11,322			—			11,322
Common stock issued for restricted and deferred stock awards	158,829		16			—			(16		)	—			—			—			—			—			—			—			—
Impact from equity transactions of subsidiaries and other	—		—			—			3,107			—			—			—			—			—			3,107			29,498			32,605
Repurchase of common stock	(47,901	)	—			(359		)	—			—			—			—			—			—			(359		)	—			(359		)
Forfeitures of restricted stock	(148,639	)	(15		)	—			15			—			—			—			—			—			—			—			—
Dividends to noncontrolling interest	—		—			—			—			—			—			—			—			—			—			(66,474		)	(66,474		)
Balance, January 31, 2010	204,073,385		$	20,422		$	(1,578	)	$	1,959,701		$	(1,575,316	)	$	25,663		$	785		$	(7,191	)	$	19,257		$	422,486		$	87,236		$	509,722
Net loss	—		—			—			—			(132,322		)	—			—			—			—			(132,322		)	13,820			(118,502		)
Other comprehensive income (loss), net of tax	—		—			—			—			—			(7,792		)	(37		)	3,491			(4,338		)	(4,338		)	(4,526		)	(8,864		)
Stock-based compensation   expense	—		—			—			10,402			—			—			—			—			—			10,402			—			10,402
Common stock issued for restricted and deferred stock awards	709,513		72			—			(72		)	—			—			—			—			—			—			—			—

COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

(UNAUDITED)

(In thousands, except share data)

	Common Stock													Accumulated Other Comprehensive Income (Loss)
	Number of Shares		Par Value		Treasury Stock			Additional Paid-in Capital			Accumulated Deficit			Unrealized Gains (Losses) on Available-for- Sale Securities			Unrealized (Losses) Gains on Derivatives			Cumulative Translation Adjustment			Total Accumulated Other Comprehensive Income (Loss)			Comverse Technology,  Inc.’s Shareholders’ Equity			Noncontrolling Interest			Total Equity
Sale of Verint Systems, Inc. shares of common stock, net of tax	—		—		—			52,203			—			—			—						—			52,203			7,117			59,320
Impact from equity transactions of subsidiaries and other	—		—		—			66,483			—			—			—			—			—			66,483			886			67,369
Sale of Ulticom, Inc.	—		—		—			—			—			—			—			—			—			—			(7,808		)	(7,808		)
Repurchase of common stock	(248,982	)	—		(1,906		)	—			—			—			—			—			—			(1,906		)	—			(1,906		)
Dividends to noncontrolling   interest	—		—		—			—			—			—			—			—			—			—			(23,846		)	(23,846		)
Balance, January 31, 2011	204,533,916		$	20,494	$	(3,484	)	$	2,088,717		$	(1,707,638	)	$	17,871		$	748		$	(3,700	)	$	14,919		$	413,008		$	72,879		$	485,887
																							—
Net loss	—		—		—			—			(58,726		)	—			—			—			—			(58,726		)	27,707			(31,019		)
Other comprehensive income (loss), net of tax	—		—		—			—			—			(21,631		)	(234		)	2,772			(19,093		)	(19,093		)	(4,320		)	(23,413		)
Stock-based compensation    expense	—		—		—			9,073			—			—			—			—			—			9,073			—			9,073
Common stock issued for   restricted and deferred stock awards	1,931,361		193		—			(193		)	—			—			—			—						—			—			—
Exercises of stock options	377,300		38		—			2,075			—			—			—			—			—			2,113			—			2,113
Impact from equity transactions of   subsidiaries and other	—		—		—			17,160			—			—			—			—			—			17,160			16,908			34,068
Common stock issued for settlement of shareholders class action	12,462,236		1,246		—			81,254			—			—			—			—			—			82,500			—			82,500
Repurchase of common stock	(667,971	)	—		(4,527		)	—			—			—			—			—			—			(4,527		)	—			(4,527		)
Dividends to noncontrolling interest	—		—		—			—			—			—			—			—			—			—			(1,930		)	(1,930		)
Balance, January 31, 2012	218,636,842		$	21,971	$	(8,011	)	$	2,198,086		$	(1,766,364	)	$	(3,760	)	$	514		$	(928	)	$	(4,174	)	$	441,508		$	111,244		$	552,752

COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Fiscal Years Ended January 31,
	2012			2011			2010
Cash flows from operating activities:
Net loss	$	(31,019	)	$	(118,502	)	$	(264,252	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash items	140,226			177,474			189,087
Changes in operating assets and liabilities, net of effects of business combinations:
Accounts receivable	19,208			(8,007		)	(351		)
Inventories	(1,946		)	(2,880		)	(7,080		)
Deferred cost of revenue	41,199			43,801			12,734
Prepaid expenses and other current assets	11,142			4,473			(7,912		)
Accounts payable and accrued expenses	(49,753		)	(56,896		)	(42,869		)
Deferred revenue	(74,318		)	(164,051		)	(6,527		)
Other assets and liabilities	(101,080		)	2,783			29,069
Other, net	275			(7,675		)	9
Net cash used in operating activities—continuing operations	(46,066		)	(129,480		)	(98,092		)
Net cash provided by (used in) operating activities—discontinued operations	11,782			2,198			(2,628		)
Net cash used in operating activities	(34,284		)	(127,282		)	(100,720		)
Cash flows from investing activities:
Proceeds from sales and maturities of investments	75,475			57,256			175,206
Proceeds from sale of Verint Systems, Inc. shares of common stock	—			76,475			—
Proceeds from sale of Ulticom, Inc., net of cash sold	—			2,627			—
Acquisition of businesses, net of cash acquired	(109,780		)	(23,485		)	(96		)
Purchase of property and equipment	(18,455		)	(19,789		)	(22,808		)
Capitalization of software development costs	(3,399		)	(2,527		)	(2,715		)
Net change in restricted cash and bank time deposits	29,414			6,966			(58,774		)
Proceeds from asset sales	1,421			27,345			60
Settlement of derivative financial instruments not designated as hedges	(1,313		)	(34,783		)	(19,414		)
Other, net	172			(12		)	(7		)
Net cash (used in) provided by investing activities—continuing operations	(26,465		)	90,073			71,452
Net cash (used) in provided by investing activities—discontinued operations	(525		)	65,305			9,229
Net cash (used in) provided by investing activities	(26,990		)	155,378			80,681
Cash flows from financing activities:
Debt issuance costs and other debt-related costs	(15,276		)	(4,039		)	(152		)
Borrowings under lines of credit	—			12,000			—
Repurchase of convertible debt obligations	597,136			—			—
Proceeds from borrowings, net of original issuance discount	—			—			(417,282		)
Repayment of bank loans, long-term debt and other financing obligations	(593,580		)	(44,163		)	(6,088		)
Repurchase of common stock of CTI and subsidiaries	(6,182		)	(6,052		)	(359		)
Excess tax benefits from stock awards plans	847			815			—
Proceeds from exercises of stock options of CTI and subsidiary	14,587			40,787			—
Dividends paid to noncontrolling interest	(1,930		)	(2,191		)	(4,145		)
Other, net	(1,969		)	—			(106		)
Net cash used in financing activities—continuing operations	(6,367		)	(2,843		)	(428,132		)
Net cash used in financing activities—discontinued operations	—			(21,467		)	(63,803		)
Net cash used in financing activities	(6,367		)	(24,310		)	(491,935		)
Effects of exchange rates on cash and cash equivalents	1,888			2,732			7,919
Net (decrease) increase in cash and cash equivalents	(65,753		)	6,518			(504,055		)
Cash and cash equivalents, beginning of year including cash of discontinued operations	581,390			574,872			1,078,927
Cash and cash equivalents, end of year including cash of discontinued operations	$	515,637		$	581,390		$	574,872
Less: Cash and cash equivalents of discontinued operations, end of year	(32,466		)	(21,209		)	(26,068		)
Cash and cash equivalents, end of year	$	483,171		$	560,181		$	548,804

COMVERSE TECHNOLOGY, INC. (PARENT COMPANY ONLY)

CONDENSED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share and per share data)

	January 31,
	2012			2011
ASSETS
Current assets:
Cash and cash equivalents	$	171,046		$	197,840
Restricted cash	—			33,367
Auction rate securities	272			72,441
Prepaid expenses and other current assets	3,808			2,242
Total current assets	175,126			305,890
Property and equipment, net	1,564			1,815
Advances to and investments in subsidiaries	435,094			441,449
Investment in discontinued operations	9,359			3,984
Other assets	800			1,662
Total assets	$	621,943		$	754,800
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and other current liabilities	$	27,757		$	37,797
Convertible debt obligations	2,195			2,195
Litigation settlement	—			146,150
Total current liabilities	29,952			186,142
Other long-term liabilities	150,483			155,650
Total liabilities	180,435			341,792
Commitments and contingencies
Equity:
Common stock, $0.10 par value—authorized, 600,000,000 shares; issued, 219,708,779 and 204,937,882 shares, respectively; outstanding, 218,636,842 and 204,553,916, respectively	21,971			20,494
Treasury stock, at cost, 1,071,937 and 403,966 shares, respectively	(8,011		)	(3,484		)
Additional paid-in capital	2,198,086			2,088,717
Accumulated deficit	(1,766,364		)	(1,707,638		)
Accumulated other comprehensive (loss) income	(4,174		)	14,919
Total equity	441,508			413,008
Total liabilities and equity	$	621,943		$	754,800

COMVERSE TECHNOLOGY, INC. (PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except share and per share data)

	Fiscal Years Ended January 31,
	2012			2011			2010
Management fees	$	—		$	—		$	60
Selling, general and administrative expenses	(73,753		)	(84,504		)	(49,291		)
Litigation settlement	(4,880		)	17,500			—
Loss from operations	(78,633		)	(67,004		)	(49,231		)
Interest income	1,758			1,922			3,271
Interest expense	(14		)	(10		)	(103		)
Other-than-temporary impairment of investments	—			(407		)	(6,914		)
Other income	29,587			17,184			92
Loss before income taxes	(47,302		)	(48,315		)	(52,885		)
Income tax benefit	5,675			4,445			47,617
Equity in losses of subsidiaries from continuing operations, net of tax	(22,286		)	(83,543		)	(227,140		)
Net loss from continuing operations	(63,913		)	(127,413		)	(232,408		)
Loss from discontinued operations, net of tax	5,187			(4,909		)	(39,627		)
Net loss	$	(58,726	)	$	(132,322	)	$	(272,035	)
Weighted average shares outstanding
Basic and diluted	208,301,686			205,162,720			204,513,420
Loss per share:
Basic
Continuing operations	$	(0.31	)	$	(0.62	)	$	(1.14	)
Discontinued operations	$	0.03		$	(0.02	)	$	(0.19	)
Basic loss per share	$	(0.28	)	$	(0.64	)	$	(1.33	)
Diluted
Continuing operations	$	(0.31	)	$	(0.62	)	$	(1.14	)
Discontinued operations	$	0.03		$	(0.03	)	$	(0.19	)
Diluted loss per share	$	(0.28	)	$	(0.65	)	$	(1.33	)

COMVERSE TECHNOLOGY, INC. (PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(In thousands)

	Fiscal Years Ended January 31,
	2012			2011			2010
Net loss	$	(58,726	)	$	(132,322	)	$	(272,035	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	2,772			3,491			8,019
Unrealized (loss) gain on available-for-sale securities, net of reclassification adjustments and tax	(21,631		)	(7,792		)	15,361
Unrealized (loss) gain on cash flow hedges, net of reclassification adjustments and tax	(234		)	(37		)	3,813
Other comprehensive (loss) income, net of tax	(19,093		)	(4,338		)	27,193
Comprehensive loss, net of tax	$	(77,819	)	$	(136,660	)	$	(244,842	)

COMVERSE TECHNOLOGY, INC. (PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

	Fiscal Years Ended January 31,
	2012			2011			2010
Net cash used in operating activities	$	(139,642	)	$	(97,062	)	$	(23,045	)
Cash flows from investing activities:
Proceeds from sales and maturities of investments	74,950			57,218			26,370
Proceeds from sale of Verint Systems, Inc. shares of common stock	—			76,475			—
Proceeds from sale of Ulticom, Inc.	—			13,211			—
Purchase of property and equipment	(4		)	(84		)	(891		)
Payments from subsidiaries, net	6,949			68,247			6,150
Net change in restricted cash	33,367			(7,223		)	(26,144		)
Dividend received from discontinued operations	—			42,399			135,323
Net cash provided by investing activities	115,262			250,243			140,808
Cash flows from financing activities:
Repurchase of convertible debt obligations	—			—			(417,282		)
Repurchase of common stock	(4,527		)	(1,906		)	(359		)
Proceeds from exercise of stock options	2,113			—			—
Net cash used in financing activities	(2,414		)	(1,906		)	(417,641		)
Net (decrease) increase in cash and cash equivalents	(26,794		)	151,275			(299,878		)
Cash and cash equivalents, beginning of year	197,840			46,565			346,443
Cash and cash equivalents, end of year	$	171,046		$	197,840		$	46,565