SCHEDULE I. CONDENSED FINANCIAL INFORMATION OF REGISTRANT

COMVERSE TECHNOLOGY, INC. (PARENT COMPANY ONLY)

CONDENSED BALANCE SHEETS

(In thousands, except share and per share data)


	January 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	197,840		$	46,565
Restricted cash		33,367			9,046
Auction rate securities		72,441			35,846
Prepaid expenses and other current assets		2,242			10,244

Total current assets		305,890			101,701
Property and equipment, net		1,815			1,984
Advances to and investments in subsidiaries		445,433			527,617
Investment in discontinued operations		—			56,797
Auction rate securities		—			78,804
Other assets		1,662			30,141

Total assets	$	754,800		$	797,044

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and other current liabilities	$	37,797		$	47,706
Convertible debt obligations		2,195			—
Litigation settlement		146,150			61,100

Total current liabilities		186,142			108,806
Convertible debt obligations		—			2,195
Litigation settlement		—			112,500
Other long-term liabilities		155,650			151,057

Total liabilities		341,792			374,558

Commitments and contingencies
Equity:
Common stock, $0.10 par value—authorized, 600,000,000 shares; issued, 204,937,882 and 204,228,369 shares, respectively; outstanding, 204,553,916 and 204,073,385, respectively		20,494			20,422
Treasury stock, at cost, 403,966 and 154,984 shares, respectively		(3,484	)		(1,578	)
Additional paid-in capital		2,088,717			1,959,701
Accumulated deficit		(1,707,638	)		(1,575,316	)
Accumulated other comprehensive income		14,919			19,257

Total equity		413,008			422,486

Total liabilities and equity	$	754,800		$	797,044

See notes to condensed financial statements.

COMVERSE TECHNOLOGY, INC. (PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)


	Fiscal Years Ended January 31,
	2011			2010			2009
Management fees	$	—		$	60		$	60
Selling, general and administrative expenses		(84,504	)		(49,291	)		(45,143	)
Litigation settlement		17,500			—			—

Loss from operations		(67,004	)		(49,231	)		(45,083	)
Interest income		1,922			3,271			14,819
Interest expense		(10	)		(103	)		(7,335	)
Other-than-temporary impairment of investments		(407	)		(6,914	)		(86,475	)
Other income		17,184			92			14,436

Loss before income taxes		(48,315	)		(52,885	)		(109,638	)
Income tax benefit (expense)		4,445			47,617			(15,370	)
Equity in losses of subsidiaries from continuing operations, net of tax		(81,747	)		(225,162	)		(193,883	)

Net loss from continuing operations		(125,617	)		(230,430	)		(318,891	)
Loss from discontinued operations, net of tax		(6,705	)		(41,605	)		(6,361	)

Net loss	$	(132,322	)	$	(272,035	)	$	(325,252	)

Weighted average shares outstanding
Basic and diluted		205,162,720			204,513,420			204,171,793

Loss per share:
Basic
Continuing operations	$	(0.61	)	$	(1.13	)	$	(1.56	)

Discontinued operations	$	(0.03	)	$	(0.20	)	$	(0.03	)

Basic loss per share	$	(0.64	)	$	(1.33	)	$	(1.59	)

Diluted
Continuing operations	$	(0.62	)	$	(1.13	)	$	(1.56	)

Discontinued operations	$	(0.03	)	$	(0.20	)	$	(0.03	)

Diluted loss per share	$	(0.65	)	$	(1.33	)	$	(1.59	)

See notes to condensed financial statements.

COMVERSE TECHNOLOGY, INC. (PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)


	Fiscal Years Ended January 31,
	2011			2010			2009
Net cash used in operating activities	$	(97,062	)	$	(23,045	)	$	(26,294	)

Cash flows from investing activities:
Proceeds from sales and maturities of investments		57,218			26,370			74,331
Proceeds from sale of Verint Systems, Inc. shares of common stock		76,475			—			—
Proceeds from sale of Ulticom, Inc.		13,211			—			—
Purchases of investments		—			—			(48,949	)
Purchase of property and equipment		(84	)		(891	)		(17	)
Payments from subsidiaries, net		68,247			6,150			120,370
Net change in restricted cash		(7,223	)		(26,144	)		—
Dividend received from discontinued operations		42,399			135,323			—

Net cash provided by investing activities		250,243			140,808			145,735

Cash flows from financing activities:
Repurchase of convertible debt obligations		—			(417,282	)		—
Repayment of bank loans and long-term debt		—			—			(17	)
Repurchase of common stock		(1,906	)		(359	)		(386	)

Net cash used in financing activities		(1,906	)		(417,641	)		(403	)

Net increase (decrease) in cash and cash equivalents		151,275			(299,878	)		119,038
Cash and cash equivalents, beginning of year		46,565			346,443			227,405

Cash and cash equivalents, end of year	$	197,840		$	46,565		$	346,443

See notes to condensed financial statements.

NOTES TO CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

1. BASIS OF PRESENTATION

Comverse Technology, Inc. (the "Parent Company") is a holding company that conducts substantially all of its business operations through its subsidiaries. Under a parent-only presentation, the Parent Company's investments in its consolidated subsidiaries are presented under the equity method of accounting. Losses of a subsidiary, if any, are applied against the investment in subsidiary balance and then to the balance of the advances to the subsidiary if the investment in subsidiary balance has been reduced to zero. Accordingly, non-trade advances to subsidiaries and investments in subsidiaries are presented together as "Advances to and investments in subsidiaries" on the condensed balance sheets. On December 3, 2010, the Parent Company sold its subsidiary, Ulticom, Inc. to a third party (the "Ulticom Sale") for an aggregate consideration of up to $17.2 million. As a result of the Ulticom Sale, the results of operations of Ulticom, including the gain on the sale of Ulticom, net of tax, of $2.9 million, are reflected in discontinued operations, less applicable income taxes, as a separate component of net loss in the Parent Company's statements of operations for all fiscal periods presented and the investment in Ulticom is reflected in "Investment in discontinued operations" in the Parent Company's balance sheet as of January 31, 2010. See Note 8, Discontinued Operations. These parent-only condensed financial statements should be read in conjunction with Comverse Technology, Inc.'s audited consolidated financial statements included in Item 15 of this Annual Report.

Restrictions on Access to Subsidiary Cash

The Parent Company's Verint subsidiary has long-term debt outstanding as of January 31, 2011 and 2010 which places restrictions on the declaration or payment of any dividends whether in cash or property to the Parent Company. As of January 31, 2011 and 2010, the Parent Company's Comverse Ltd. subsidiary was required to maintain an aggregate of $25.0 million and $45.0 million, respectively, as compensating cash balances under the terms of lines of credit that Comverse Ltd. had with two banks, restricting Comverse Ltd.'s ability to use such funds. In addition, pursuant to its investment agreements, the Parent Company's Starhome subsidiary is precluded from paying cash dividends to its shareholders without the approval of certain minority shareholders. As the restricted net assets represent a significant portion of the Company's consolidated net assets, these condensed financial statements have been presented on a "parent-only" basis.

2. RESTRICTED CASH AND AUCTION RATE SECURITIES

As of January 31, 2011 and 2010, restricted cash includes proceeds from the sale of auction rate securities ("ARS") (including interest thereon) that are restricted pursuant to the consolidated shareholder class action settlement agreement. In addition, as of January 31, 2011 and 2010, all ARS are restricted pursuant to such settlement agreement. See Note 3, Investments, and Note 26, Commitments and Contingencies, of the consolidated financial statements for disclosures relating to restrictions on ARS and cash proceeds from the sale and redemption of ARS. As of January 31, 2011, $33.4 million of sales proceeds (including interest thereon) were classified in "Restricted cash." As of January 31, 2010, $9.0 million and $17.1 million of sales proceeds (including interest thereon) were classified in "Restricted cash" and within "Other assets" as long-term restricted cash, respectively.

3. DEBT

As of January 31, 2011 and 2010, the Parent Company had $2.2 million aggregate principal amount of outstanding convertible debt obligations (the "Convertible Debt Obligations"). During the fiscal year ended January 31, 2010, the Parent Company commenced a tender offer, in accordance with the terms of the indenture, pursuant to which the Parent Company purchased $417.3 million in aggregate principal amount of its Convertible Debt Obligations. Refer to Note 12, Debt, of the consolidated financial statements for a description of the significant provisions of the Convertible Debt Obligations and the purchase of the Convertible Debt Obligations during the fiscal year ended January 31, 2010.

4. COMMITMENTS AND CONTINGENCIES

The Parent Company is a party to various lawsuits, as discussed in Note 26, Commitments and Contingencies, of the consolidated financial statements. In December, 2009, the Parent Company entered into agreements to settle a shareholder class action and consolidated shareholder derivative actions for an aggregate amount of $174.4 million, including legal fees and expenses of the plaintiffs of $9.4 million, which has been accrued for during the fiscal year ended January 31, 2007. The agreement to settle the consolidated shareholder class action was amended on June 19, 2010. Pursuant to the amendment, CTI agreed to waive certain rights to terminate the settlement in exchange for a deferral of the timing of scheduled payments of the settlement consideration and the right to a credit (the "Opt-out Credit") in respect of a portion of the settlement funds that would have been payable to a class member that elected not to participate in and be bound by the settlement. See Note 26, Commitments and Contingencies, Settlement Agreements, of the consolidated financial statements for a more comprehensive discussion of the settlements.

5. SALE OF SHARES OF VERINT SYSTEMS' COMMON STOCK

Effective July 15, 2010, CTI made a demand pursuant to the Original Registration Rights Agreement to have up to 2.8 million shares of Verint Systems' common stock registered in a registration statement on Form S-1. On January 14, 2011, CTI completed the sale of 2.3 million shares of Verint Systems' common stock in a secondary public offering for aggregate proceeds net of underwriting discounts and commissions of $76.5 million. The sale of shares of Verint Systems' common stock was accounted for as an equity transaction. As a result, the Parent Company increased "Additional paid-in capital" by $52.2 million, increased "Accumulated other comprehensive income" by $2.6 million and reduced investments in subsidiaries by $4.5 million. See Note 25, Related Party Transactions, Sale of Shares of Verint Systems' Common Stock, of the consolidated financial statements for further details.

6. PERPETUAL PREFERRED STOCK OF SUBSIDIARY

On May 25, 2007, the Parent Company entered into an agreement with its subsidiary, Verint Systems, to purchase an aggregate of 293,000 shares of Verint Systems' Series A Convertible Perpetual Preferred Stock (the "preferred stock") for an aggregate purchase price of $293.0 million. See Note 25, Related Party Transactions, Verint's Series A Convertible Perpetual Preferred Stock, of the consolidated financial statements for a more comprehensive discussion, including the terms of the preferred stock.

7. ULTICOM'S SPECIAL CASH DIVIDENDS

In December 2010, Ulticom, Inc. paid a special cash dividend in the aggregate amount of $64.1 million to its shareholders of which the Parent Company received $42.4 million and the remaining amount was paid to Ulticom, Inc.'s minority shareholders. The special cash dividend was paid immediately prior to the Ulticom Sale.

In April 2009, Ulticom, Inc. paid a special cash dividend of $199.6 million to its shareholders, of which the Parent Company received $135.3 million and the remaining amount was paid to Ulticom, Inc.'s minority shareholders.

See Note 25, Related Party Transactions, Ulticom's 2010 Special Cash Dividend and Ulticom's 2009 Special Cash Dividend and Stock Option Modification, of the consolidated financial statements for further disclosure relating to Ulticom's special cash dividends.

8. DISCONTINUED OPERATIONS

Ulticom, Inc. was a majority-owned subsidiary of the Parent Company prior to its sale on December 3, 2010. For a more comprehensive discussion of the Ulticom Sale, see Note 19, Discontinued Operations, of the consolidated financial statements.

The equity in losses of Ulticom, net of tax, and the gain on the sale of Ulticom, net of tax, of $2.9 million are reflected in discontinued operations, less applicable income taxes, as a separate component of net loss in the Parent Company's statements of operations for all fiscal periods presented, and the investment in Ulticom is reflected in "Investment in discontinued operations" in the Parent Company's balance sheet as of January 31, 2010.

The amounts included in discontinued operations were as follows:


	Fiscal Years Ended January 31,
	2011			2010			2009
	(in thousands)
Equity in losses of discontinued operations, net of tax	$	(9,632	)	$	(41,605	)	$	(6,361	)
Gain on sale of discontinued operation, net of tax		2,927			—			—

Loss from discontinued operation, net of tax	$	(6,705	)	$	(41,605	)	$	(6,361	)