Financial Information

View 2007 Financials as PDF

Sterling Commerce, Inc.
(An Indirect Subsidiary of AT&T Inc.)
Consolidated Balance Sheets
(Dollars in Thousands)

Assets

Current assets:

Cash

$

41,218

$

24,657

Restricted cash

18,166

17,386

Accounts receivable, net of allowance of $3,280

and $5,847 as of December 31, 2007 and 2006

230,810

Deferred income taxes, net

31,456

25,256

Prepaid expenses and other current assets

25,664

22,123

Total current assets

347,314

289,914

Non-current assets:

Property and equipment, net

64,441

60,064

Capitalized software development costs, net

101,708

81,651

Intangible assets, net

213,592

259,681

Goodwill

476,832

508,796

Other assets

69,413

89,155

Total non-current assets

925,986

999,347

Total assets

$

1,273,300

$

1,289,261

Liabilities and Stockholder's Equity

Current liabilities:

Accounts payable and accrued liabilities

$

113,782

$

107,556

Due to affiliates

28,861

201,874

Deferred revenue

205,239

166,152

Total current liabilities

347,882

475,582

Non-current liabilities:

Deferred income taxes, net

32,907

92,835

Non-current deferred revenue

31,775

52,852

Note payable due to affiliate

410,173

410,173

Other non-current liabilities

126,278

61,149

Total non-current liabilities

601,133

617,009

Stockholder's equity:

6.35% Cumulative Redeemable Preferred stock,

$1.00 par value, 30,000 shares authorized,

17,000 issued and outstanding

170,000

-

Common stock, $1.00 par value, 1,000 shares

authorized, 1,000 issued and outstanding

1

1

Additional paid-in capital

2,472,731

2,472,731

Retained deficit

(2,327,566)

(2,281,095)

Accumulated other comprehensive income

9,119

5,033

Total stockholder's equity

324,285

196,670

Total liabilities and stockholder's equity

$

1,273,300

$

1,289,261

2007

2006

2005

Revenues

$

633,787

$

545,953

$

490,332

Operating expenses:

Total cost of revenues

211,862

165,011

140,663

Sales and marketing

202,308

157,973

142,239

General and administrative

67,150

55,981

57,874

Research and development

82,981

76,309

60,942

Amortization of AT&T acquisition intangibles

50,896

51,261

51,298

AT&T expense allocation

29,066

26,666

20,065

644,263

533,201

473,081

Operating (loss) income

(10,476)

12,752

17,251

Interest expense, net

(45,629)

(41,970)

(32,152)

Other (expense) income, net

(1,580)

(4,260)

3,221

(57,685)

(33,478)

(11,680)

Income tax benefit

15,051

29,958

18,485

(42,634)

$

(3,520)

$

6,805

Consolidated Statements of Cash Flows
(Dollars in Thousands)

2007

2006

2005

Operating activities

Net (loss) income

$

(42,634)

$

(3,520)

$

6,805

Adjustments to reconcile net (loss) income to net cash

provided by operating activities:

Depreciation and amortization

116,126

110,862

112,910

Provision for allowances for doubtful accounts

40

(572)

1,032

Deferred income taxes

(32,147)

(31,664)

(41,789)

Loss on disposal of property and equipment

3,608

2,809

1,000

Changes in operating assets and liabilities:

Accounts receivable

(17,179)

(36,221)

(9,007)

Prepaid expenses and other current assets

(3,541)

(15,065)

(16,154)

Accounts payable and accrued liabilities

15,396

(9,362)

12,048

Deferred revenue

18,010

53,514

31,076

Other

18,988

2,929

3,816

Net cash provided by operating activities

76,667

73,710

101,737

Investing activities

Business acquisitions, net of cash received

1,075

(181,201)

(147,197)

Purchases of property and equipment

(32,634)

(35,285)

(22,301)

Proceeds from the sale of property and equipment

-

59,656

-

Purchases and capitalized cost of software development

(24,555)

(20,479)

(22,189)

(56,114)

(177,309)

(191,687)

Financing activities

Net cash (paid to) received from affiliates

(173,013)

102,725

95,371

Principal payments for equipment subject to capital lease

(1,420)

(534)

(738)

Proceeds from issuance of preferred stock

170,000

-

-

Net cash (used in) provided by financing activities

(4,433)

102,191

94,633

Effect of foreign exchange rate on cash

441

1,576

-

16,561

168

4,683

Cash at beginning of year

24,657

24,489

19,806

Cash at end of year

$

41,218

$

24,657

$

24,489

Supplemental cash flow information

Income taxes paid

$

3,862

$

15,776

$

21,886

Capital lease obligations and notes payable incurred

3,220

540

437

Interest paid

46,087

42,696

33,219