0001140361-14-040165.txt : 20141105 0001140361-14-040165.hdr.sgml : 20141105 20141104173623 ACCESSION NUMBER: 0001140361-14-040165 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20141031 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20141105 DATE AS OF CHANGE: 20141104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUWARE CORP CENTRAL INDEX KEY: 0000859014 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 382007430 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20900 FILM NUMBER: 141194337 BUSINESS ADDRESS: STREET 1: ONE CAMPUS MARTIUS CITY: DETROIT STATE: MI ZIP: 48226-5099 BUSINESS PHONE: 3132277300 MAIL ADDRESS: STREET 1: ONE CAMPUS MARTIUS CITY: DETROIT STATE: MI ZIP: 48226-5099 FORMER COMPANY: FORMER CONFORMED NAME: COMPUWARE CORPORATION DATE OF NAME CHANGE: 19940506 8-K 1 form8k.htm COMPUWARE CORPORATION 8-K 10-31-2014 form8k.htm
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 31, 2014

COMPUWARE CORPORATION
(Exact name of registrant as specified in its charter)

Commission File Number:  000-20900
 
 Michigan    38-2007430
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)

One Campus Martius, Detroit, Michigan
  
48226-5099
 (Address of Principal Executive Offices)  
(Zip Code)

Registrant’s telephone number, including area code (313) 227-7300
 
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):
 
  o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

  o 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 October 31, 2014, Compuware Corporation (“Compuware”) announced that it has completed its previously announced distribution of an aggregate of 31,384,920 shares of common stock of Covisint Corporation (“Covisint”), as a pro rata dividend on shares of Compuware common stock, and on shares of Compuware common stock deliverable under restricted stock units relating to Compuware common stock (“RSUs”), outstanding at the close of business on the record date of October 20, 2014.  Based on the number of Compuware shares outstanding and shares deliverable under RSUs as of the record date, holders of Compuware common stock received 0.14025466 shares of Covisint common stock in the distribution with respect to each outstanding share of Compuware common stock they owned at the close of business on the record date, and holders of RSUs received 0.14025466 shares of Covisint common stock in the distribution with respect to each share of Compuware common stock deliverable under the RSUs they held at the close of business on the record date.

In September 2013, Covisint completed its initial public offering of 7,360,000 shares of its common stock representing approximately 19.7% of the economic interest in and the voting power of, its capital stock for a purchase price of $10.00 per share (the “IPO”).  Prior to the IPO, Covisint was a wholly-owned subsidiary of Compuware.  After the IPO, Compuware held 80.3% of the economic interest in and voting power of Covisint’s capital stock.  Following the distribution on October 31, 2014, Compuware will no longer hold any shares of Covisint common stock.
 
Item 8.01:
Other Events
 
A copy of the press release announcing completion of the distribution, as described in Item 2.01 above, is attached hereto as Exhibit 99.1 and incorporated herein by reference.
 
Item 9.01: Financial Statements and Exhibits

(b) Pro Forma Financial Information

Exhibit 99.2 to this Current Report on Form 8-K contains the required unaudited pro forma condensed consolidated balance sheet of the Company as of June 30, 2014, and the unaudited pro forma consolidated statements of operations for the fiscal years ended March 31, 2012, 2013 and 2014 and for the three months ended June 30, 2014 reflecting the distribution of Covisint described in Item 2.01 above.
 
(d) Exhibits.

 
Press Release, dated October 31, 2014.
 
 
Unaudited pro forma consolidated financial statements.
 
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.

 
COMPUWARE CORPORATION
     
Date: November 4, 2014
By:
/s/ Joseph R. Angileri
 
Name:
Joseph R. Angileri
 
Title:
Chief Financial Officer


EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm
Exhibit 99.1
 
NEWS RELEASE
 
COMPUWARE CORPORATION
  
 
Corporate Headquarters
One Campus Martius · Detroit, Michigan 48226
(313) 227-7300
 
For Immediate Release
October 31, 2014
Compuware Announces Completion of Spin-Off of Covisint
 
DETROIT, October 31, 2014 -- Compuware Corporation (“Compuware”) (Nasdaq: CPWR), the technology performance company, today announced that it has completed its previously announced distribution of all of its 31,384,920 shares of Covisint Corporation (“Covisint”) (Nasdaq: COVS) common stock as a pro rata dividend on shares of Compuware common stock, and on shares of Compuware common stock deliverable under restricted stock units relating to Compuware common stock (“RSUs”), outstanding on October 20, 2014, the record date.
 
Based on the number of Compuware shares outstanding and shares deliverable under RSUs as of October 20, 2014, the record date for the distribution, holders of Compuware common stock received 0.14025466 shares of Covisint common stock in the distribution with respect to each outstanding share of Compuware common stock they owned at the close of business on the record date, and holders of RSUs received 0.14025466 shares of Covisint common stock in the distribution with respect to each share of Compuware common stock deliverable under the RSUs they held at the close of business on the record date.
 
Fractional shares of Covisint common stock were not distributed to Compuware shareholders or RSU holders. Instead, the fractional shares of Covisint common stock will be aggregated and sold in the open market, with the net proceeds distributed pro rata in the form of cash payments to Compuware shareholders and RSU holders who would otherwise receive Covisint fractional shares. The spin-off is expected to be taxable for U.S. federal income tax purposes. Thus, the value of the Covisint common stock, as well as any cash received in lieu of fractional shares, will generally be taxable. Compuware shareholders and RSU holders should consult their tax advisors with respect to U.S. federal, state, local and foreign tax consequences of the distribution, including, without limitation, the potential imposition of withholding taxes on the distribution of Covisint common stock.
 
With the completion of the distribution, Compuware no longer owns shares of Covisint common stock.
 
Compuware common stock trades on Nasdaq under the symbol “CPWR.”  Covisint common stock trades on Nasdaq under the symbol “COVS.”
 
Compuware Corporation
 
Compuware Corporation is the technology performance company, and we exist solely to help our customers optimize the performance of their most important and innovative technologies-those that drive their businesses forward. Today, more than 7,100 companies, including many of the world's largest organizations, depend on Compuware and our new generation approach to performance management to do just that. Learn more at: http://www.compuware.com.
 
 
 
 
Compuware Announces Completion of Spin-Off of Covisint
October 31, 2014
Page 2
 
Additional Information and Where to Find It
 
On October 6, 2014, Compuware filed a preliminary proxy statement with the SEC in connection with the solicitation of proxies for a special meeting of shareholders related to the proposed acquisition of Compuware by affiliates of Thoma Bravo, LLC. Prior to the special meeting, Compuware will file with the SEC a definitive proxy statement, together with a WHITE proxy card. Promptly after filing the definitive proxy statement with the SEC, Compuware will mail the definitive proxy statement and a WHITE proxy card to each shareholder entitled to vote at the special meeting. INVESTORS AND SECURITY HOLDERS OF COMPUWARE ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING WHITE PROXY CARD AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The definitive proxy statement (including the WHITE proxy card), the preliminary proxy statement, and any other documents filed by Compuware with the SEC (when they become available), may be obtained free of charge at the SEC’s website (http://www.sec.gov) or at Compuware’s website (http://www.compuware.com) or by writing to Compuware’s Secretary at One Campus Martius, Detroit, MI 48226.
 
Participants in the Solicitation
 
Compuware and its directors and executive officers may be deemed to be participants in the solicitation of proxies from Compuware’s shareholders with respect to the proposed acquisition of Compuware by affiliates of Thoma Bravo, LLC. Detailed information regarding the names, affiliations and interests of individuals who are participants in the solicitation of proxies of Compuware’s shareholders is available in Compuware’s preliminary proxy statement. Additional information about Compuware’s directors and executive officers is set forth in the proxy statement on Schedule 14A filed with the SEC on February 14, 2014, and the Annual Report on Forms 10-K and 10-K/A for the fiscal year ended March 31, 2014.
 
Press Contact
 
Lisa Elkin, Senior Vice President, Marketing, Communications and Investor Relations, +1-313-227-7345
 
Certain statements in this release that are not historical facts, including those regarding the Company’s future plans, objectives and expected performance, are “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements represent our outlook only as of the date of this release. While we believe any forward-looking statements we have made are reasonable, actual results could differ materially since the statements are based on our current expectations and are subject to risks and uncertainties. These risks and uncertainties are discussed in the Company’s reports filed with the Securities and Exchange Commission. Readers are cautioned to consider these factors when relying on such forward-looking information. The Company does not undertake, and expressly disclaims any obligation, to update or alter its forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
 
 
 EX-99.2 3 ex99_2.htm EXHIBIT 99.2 ex99_2.htm
Exhibit 99.2

COMPUWARE CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

On October 31, 2014, Compuware Corporation (the “Company”) completed its distribution of its shares in Covisint Corporation (“Covisint”).

The accompanying unaudited pro forma consolidated financial statements of Compuware Corporation and its subsidiaries (collectively, the “Company”, Compuware”, “we”, “our” and “us”) were derived from the Company’s historical consolidated financial statements and contain the required unaudited pro forma condensed consolidated balance sheet of the Company as of June 30, 2014, and the unaudited pro forma consolidated statements of operations for the fiscal years ended March 31, 2012, 2013 and 2014 and for the three months ended June 30, 2014.

In connection with the distribution, we intend to proportionately adjust the exercise prices of outstanding options to purchase shares of the Company to maintain the aggregate intrinsic value of such options as of the date of the distribution, pursuant to the terms of these awards. The adjustment will result in the reduction of the per share exercise price of each Option by an amount equal to the product of the Covisint share value (determined by averaging the daily volume weighted average trading price of Covisint on October 30th, October 31st, November 3rd and November 4th), multiplied by the distribution ratio of 0.14025466 (the “Exercise Price Reduction”). The actual Exercise Price Reduction will not be determined until after the NASDAQ market close on November 4th. As a result of this modification, we expect to record additional stock compensation expense related to these awards during the three months ending December 31, 2014 for vested awards and over the remaining vesting period for unvested awards. We do not expect these charges to have a material impact on our financial position, results of operations or cash flows and these charges are not reflected in the Pro Forma Consolidated Financial Statements presented herein.

The following unaudited pro forma consolidated financial statements are furnished for informational purposes only and do not purport to reflect the Company’s financial position and results of operations had the disposition occurred on the date as indicated above. Further, these financial statements are not necessarily indicative of the Company’s future financial position and future results of operations and should be read in conjunction with the accompanying notes and with the historical consolidated financial statements of the Company and related notes thereto included in its Annual Report on Form 10-K for the year ended March 31, 2014 and its Quarterly Report on Form 10-Q for the three months ended June 30, 2014, both filed with the Securities and Exchange Commission. The unaudited pro forma consolidated statements of operations give effect to the disposition by removing the results of the Covisint subsidiary as if the disposition had occurred as of April 1, 2011 and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma consolidated financial information. The unaudited pro forma condensed consolidated balance sheet reflects the disposition of Covisint as if it had occurred on June 30, 2014. The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable.

 
 
 
 
 
COMPUWARE CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2014
(Unaudited, In Thousands)
 
ASSETS
  
As Reported
    
Pro Forma Adjustments
    
Pro Forma
  
   
 
    
(a)
    
(c)
    
 
  
CURRENT ASSETS:
                        
Cash and cash equivalents
   $ 275,514     $ (43,129 )   $       $ 232,385  
Accounts receivable, net
     288,031       (18,732 )           269,299  
Deferred tax asset, net
     36,770       (1,431 )           35,339  
Income taxes refundable
     4,519       -             4,519  
Prepaid expenses and other current assets
     27,629       (6,277 ) (b)           21,352  
Total current assets
     632,463       (69,569 )     -       562,894  
                                 
PROPERTY AND EQUIPMENT, LESS ACCUMULATED
                                
DEPRECIATION AND AMORTIZATION
     283,107       (4,940 )             278,167  
                                 
CAPITALIZED SOFTWARE AND OTHER
                                
INTANGIBLE ASSETS, NET
     96,868       (21,329 )             75,539  
                                 
ACCOUNTS RECEIVABLE
     165,010       -               165,010  
                                 
GOODWILL
     647,445       (25,385 )             622,060  
                                 
DEFERRED TAX ASSET, NET
     16,582       (127 )     (2,444 )     14,011  
                                 
OTHER ASSETS
     24,613       (6,350 )             18,263  
                                 
TOTAL ASSETS
   $ 1,866,088     $ (127,700 )   $ (2,444 )   $ 1,735,944  
                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                                
                                 
CURRENT LIABILITIES:
                                
Accounts payable
   $ 14,133     $ (3,963 )   $       $ 10,170  
Accrued expenses
     75,448       (697 ) (b)             74,751  
Income taxes payable
     16,249       (41 )     40,450       56,658  
Deferred revenue
     354,683       (14,807 )             339,876  
Total current liabilities
     460,513       (19,508 )     40,450       481,455  
                                 
DEFERRED REVENUE
     274,482       (9,119 )             265,363  
                                 
ACCRUED EXPENSES
     19,927       (56 )             19,871  
                                 
DEFERRED TAX LIABILITY, NET
     33,857       1,140               34,997  
Total liabilities
     788,779       (27,543 )     40,450       801,686  
                                 
SHAREHOLDERS' EQUITY:
                                
Compuware shareholders' equity
     1,061,362       (84,210 )     (42,894 )     934,258  
Non-controlling interest
     15,947       (15,947 )             -  
Total shareholders' equity
     1,077,309       (100,157 )     (42,894 )     934,258  
                                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
   $ 1,866,088     $ (127,700 )   $ (2,444 )   $ 1,735,944  
 
See notes to consolidated financial statements.

 
 
 
 
 
COMPUWARE CORPORATION AND SUBSIDIARIES
Pro Forma Statement of Operations
Year Ended March 31, 2012
(Unaudited, In Thousands, Except Per Share Data)

   
As Reported
    
Results of
Operations of
Divested
Business
    
Pro Forma
  
REVENUES:
        
(d)
        
Software license fees
   $ 195,751     $ -     $ 195,751  
Maintenance fees
     380,968       -       380,968  
Subscription fees
     76,246       -       76,246  
Services fees
     36,795       -       36,795  
Application services fees
     73,731       (73,731 )     -  
                         
Total revenues
     763,491       (73,731 )     689,760  
                         
OPERATING EXPENSES:
                        
Cost of software license fees
     16,391       -       16,391  
Cost of maintenance fees
     34,715       -       34,715  
Cost of subscription fees
     29,102       -       29,102  
Cost of services
     36,276       -       36,276  
Cost of application services
     72,384       (72,384 )     -  
Technology development and support
     94,233       (1,420 )     92,813  
Sales and marketing
     242,211       -       242,211  
Administrative and general
     154,366       (3,897 )     150,469  
Restructuring costs
     -       -       -  
                         
Total operating expenses
     679,678       (77,701 )     601,977  
                         
INCOME FROM CONTINUING OPERATIONS
     83,813       3,970       87,783  
                         
OTHER INCOME, NET
     1,633       -       1,633  
                         
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
                        
TAX PROVISION
     85,446       3,970       89,416  
                         
INCOME TAX PROVISION - CONTINUING OPERATIONS
     22,005       1,830       23,835  
                         
                         
INCOME FROM CONTINUING OPERATIONS, NET OF TAX
   $ 63,441     $ 2,140     $ 65,581  
                         
                         
                         
EARNINGS PER SHARE BASED ON CONTINUING OPERATIONS
                        
Basic earnings per share
   $ 0.29             $ 0.30  
Diluted earnings per share
   $ 0.29             $ 0.29  

See notes to consolidated financial statements.

 
 
 
 
 
COMPUWARE CORPORATION AND SUBSIDIARIES
Pro Forma Statement of Operations
Year Ended March 31, 2013
(Unaudited, In Thousands, Except Per Share Data)

   
As Reported
    
Results of
Operations of
Divested
Business
    
Pro Forma
  
REVENUES:
        
(d)
        
Software license fees
   $ 159,093     $ -     $ 159,093  
Maintenance fees
     361,359       -       361,359  
Subscription fees
     79,862       -       79,862  
Services fees
     32,896       -       32,896  
Application services fees
     90,694       (90,694 )     -  
                         
Total revenues
     723,904       (90,694 )     633,210  
                         
OPERATING EXPENSES:
                        
Cost of software license fees
     18,986       -       18,986  
Cost of maintenance fees
     31,621       -       31,621  
Cost of subscription fees
     30,264       -       30,264  
Cost of services
     31,777       -       31,777  
Cost of application services
     83,298       (83,298 )     -  
Technology development and support
     95,356       (1,420 )     93,936  
Sales and marketing
     220,714       -       220,714  
Administrative and general
     153,733       (4,519 )     149,214  
Restructuring costs
     15,751       (34 )     15,717  
                         
Total operating expenses
     681,500       (89,271 )     592,229  
                         
INCOME FROM CONTINUING OPERATIONS
     42,404       (1,423 )     40,981  
                         
OTHER INCOME (EXPENSE), NET
     (1,170 )     -       (1,170 )
                         
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
                        
TAX PROVISION
     41,234       (1,423 )     39,811  
                         
INCOME TAX PROVISION - CONTINUING OPERATIONS
     15,917       1,139       17,056  
                         
                         
INCOME FROM CONTINUING OPERATIONS, NET OF TAX
   $ 25,317     $ (2,562 )   $ 22,755  
                         
                         
EARNINGS PER SHARE BASED ON CONTINUING OPERATIONS
                        
Basic earnings per share
   $ 0.12             $ 0.11  
Diluted earnings per share
   $ 0.12             $ 0.10  

See notes to consolidated financial statements.

 
 
 
 

COMPUWARE CORPORATION AND SUBSIDIARIES
Pro Forma Statement of Operations
Year Ended March 31, 2014
(Unaudited, In Thousands, Except Per Share Data)

   
As Reported
    
Results of
Operations of
Divested
Business
    
Pro Forma
  
REVENUES:
        
(d)
        
Software license fees
   $ 159,197     $ -     $ 159,197  
Maintenance fees
     353,374       -       353,374  
Subscription fees
     80,857       -       80,857  
Services fees
     30,193       -       30,193  
Application services fees
     97,135       (97,135 )     -  
                         
Total revenues
     720,756       (97,135 )     623,621  
                         
OPERATING EXPENSES:
                        
Cost of software license fees
     20,310       -       20,310  
Cost of maintenance fees
     28,387       -       28,387  
Cost of subscription fees
     32,406       -       32,406  
Cost of services
     25,662       -       25,662  
Cost of application services
     117,155       (117,155 )     -  
Technology development and support
     86,181       (1,522 )     84,659  
Sales and marketing
     216,115       -       216,115  
Administrative and general
     134,695       (7,273 )     127,422  
Restructuring costs
     11,990       (399 )     11,591  
                         
Total operating expenses
     672,901       (126,349 )     546,552  
                         
INCOME FROM CONTINUING OPERATIONS
     47,855       29,214       77,069  
                         
OTHER INCOME, NET
     3,288       (23 )     3,265  
                         
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
                        
TAX PROVISION
     51,143       29,191       80,334  
                         
INCOME TAX PROVISION - CONTINUING OPERATIONS
     12,944       11,466       24,410  
                         
                         
INCOME FROM CONTINUING OPERATIONS
                        
INCLUDING NON-CONTROLLING INTEREST
     38,199       17,725       55,924  
                         
Less: Net loss attributable to the non-controlling interest in
                        
Covisint Corporation
     (3,458 )     3,458       -  
                         
INCOME FROM CONTINUING OPERATIONS ATTRIBUTABLE TO
                        
COMPUWARE CORPORATION, NET OF TAX
   $ 41,657     $ 14,267     $ 55,924  
                         
EARNINGS PER SHARE BASED ON CONTINUING OPERATIONS
                        
ATTRIBUTABLE TO COMPUWARE CORPORATION
                        
Basic earnings per share
   $ 0.19             $ 0.26  
Diluted earnings per share
   $ 0.19             $ 0.25  
                         
Dividends declared per common share
   $ 0.50             $ 0.50  

See notes to consolidated financial statements.


 
 
 
 
COMPUWARE CORPORATION AND SUBSIDIARIES
Pro Forma Statement of Operations
Three Months Ended June 30, 2014
(Unaudited, In Thousands, Except Per Share Data)
 
   
As Reported
    
Results of
Operations of
Divested
Business
    
Pro Forma
  
REVENUES:
        
(d)
        
Software license fees
   $ 26,687     $ -     $ 26,687  
Maintenance fees
     88,460       -       88,460  
Subscription fees
     19,362       -       19,362  
Services fees
     8,414       -       8,414  
Application services fees
     21,587       (21,587 )     -  
                         
Total revenues
     164,510       (21,587 )     142,923  
                         
OPERATING EXPENSES:
                        
Cost of software license fees
     4,995       -       4,995  
Cost of maintenance fees
     6,922       -       6,922  
Cost of subscription fees
     8,202       -       8,202  
Cost of services
     6,732       -       6,732  
Cost of application services
     30,902       (30,902 )     -  
Technology development and support
     19,952       (385 )     19,567  
Sales and marketing
     53,103       -       53,103  
Administrative and general
     34,013       (2,055 )     31,958  
Restructuring costs
     2,975       -       2,975  
                         
Total operating expenses
     167,796       (33,342 )     134,454  
                         
INCOME (LOSS) FROM CONTINUING OPERATIONS
     (3,286 )     11,755       8,469  
                         
OTHER INCOME, NET
     223       (22 )     201  
                         
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
                        
TAX PROVISION
     (3,063 )     11,733       8,670  
                         
INCOME TAX BENEFIT - CONTINUING OPERATIONS
     (1,707 )     4,366       2,659  
                         
INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING
                        
NON-CONTROLLING INTEREST
     (1,356 )     7,367       6,011  
Less: Net loss attributable to the non-controlling interest in
                        
Covisint Corporation
     (1,408 )     1,408       -  
                         
INCOME FROM CONTINUING OPERATIONS ATTRIBUTABLE TO
                        
COMPUWARE CORPORATION, NET OF TAX
   $ 52     $ 5,959     $ 6,011  
                         
EARNINGS PER SHARE BASED ON CONTINUING OPERATIONS
                        
ATTRIBUTABLE TO COMPUWARE CORPORATION
                        
Basic earnings per share
   $ 0.00             $ 0.03  
Diluted earngings per share
   $ 0.00             $ 0.03  
                         
Dividends declared per common share
   $ 0.125             $ 0.125  

See notes to consolidated financial statements.

 
 
 

COMPUWARE CORPORATION AND SUBSIDIARIES

Notes to Unaudited Pro Forma Consolidated Financial Statements

 
(a)
The adjustment reflects the elimination of assets and liabilities attributable to Covisint including the non-controlling interest activity and balances attributable to the portion of the economic interest in Covisint that we did not own since Covisint’s IPO.

 
(b)
At June 30, 2014, amounts due to Covisint of $4.1 million were treated as intercompany balances which were eliminated in consolidation. The adjustment includes the balances due to Covisint primarily for cash received by the Company on behalf of Covisint and for amounts determined to be due to Covisint under our tax sharing agreement. These amounts are generally cash-settled during the subsequent quarter.

 
(c)
Records the Company’s estimated income tax liability ($40.5 million based on June 30, 2014 market value per share of Covisint common stock) on the distribution of Covisint stock to Compuware shareholders assuming the closing of Compuware’s Agreement and Plan of Merger with Project Copper Holdings, LLC and Project Copper Merger Corp., both affiliates of Thoma Bravo LLC, dated September 2, 2014. The final tax liability will depend upon the market value of Covisint common stock as of the spin date among other things.

As a result of the distribution of its remaining Covisint stock, the Company increased its valuation allowance related to the Brownfield Redevelopment tax credit carryforward deferred tax asset.

 
(d)
The results of operations of the divested business represent the operations of Covisint. Variances from Covisint’s stand-alone financial statements are primarily related to application of the accounting rules under generally accepted accounting principles in the United States for allocation of general and administrative costs to discontinued operations versus the amounts historically charged to Covisint, as well as, the impact of certain intercompany transactions which were not eliminated for Covisint’s stand-alone financial statements.

 

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