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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~October~~April 3130, ~~2012~~2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NO. 000-25285

SERENA SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE

94-2669809

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1850 GATEWAY DRIVE, SAN MATEO, CALIFORNIA 94404-4060

(Address of principal executive offices, including zip code)

650-481-3400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~October~~April 3130, ~~2012~~2013, 9899,~~754~~148,~~671~~724 shares of the registrant’s common stock, $0.01 par value per share, were outstanding.

INDEX

		Page
PART I: FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets		3
	Condensed Consolidated Statements of Comprehensive Income		4
	Condensed Consolidated Statements of Comprehensive Loss		4
	Condensed Consolidated Statements of Cash Flows		5
	Notes to Condensed Consolidated Financial Statements		6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		1415
Item 3	Quantitative and Qualitative Disclosures About Market Risk		2126
Item 4	Controls and Procedures		2126
PART II: OTHER INFORMATION
Item 1	Legal Proceedings		2327
Item 1A	Risk Factors		2327
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		2327
Item 3	Defaults Upon Senior Securities		23
Item 5	Other Information		27
Item 4	Mine Safety Disclosures		23
Item 6	Exhibits		27
Item 5	Other Information		23
SIGNATURES			28
Item 6	Exhibits		24
SIGNATURES			25

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

SERENA SOFTWARE, INC.

~~Condensed~~CONDENSED ~~Consolidated~~CONSOLIDATED ~~Balance~~BALANCE ~~Sheets~~SHEETS

(In thousands, except ~~share~~par ~~data~~values)

(Unaudited)

	October 31,			January 31,
	April 30,2013			January 31,2013
	2012			2012
ASSETS
Current assets:
Cash and cash equivalents	$	94103,~~568~~719		$	~~109~~97,~~688~~315
Accounts receivable, net of allowance of $1,039 and $963 at October 31, 2012 and January 31, 2012, respectively		23,182			23,747
Accounts receivable, net of allowance of $915 and $1,094 at April 30, 2013 and January 31, 2013, respectively		11,359			16,113
Deferred tax assets, net		5,~~016~~705			5,~~015~~730
Prepaid expenses and other current assets		613,~~474~~086			79,~~779~~405
Total current assets		~~129~~133,~~240~~869			~~146~~128,~~229~~563
Property and equipment, net		53,~~053~~961			4,~~879~~314
Intangible assets, net		5336,~~881~~191			7745,~~264~~661
Goodwill		462,400			462,400
Other long-term assets		4,~~844~~595			35,~~600~~089
TOTAL ASSETS	$	~~655~~641,~~418~~016		$	~~694~~646,~~372~~027
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,~~571~~472		$	12,~~515~~330
Accrued expenses		1514,~~825~~241			1817,~~916~~507
Accrued interest payable		21,~~527~~941			74,~~030~~614
Current portion of long-term debt		25,000			—
Deferred revenue		71,860			67,056
Income taxes payable		335			683
Total current liabilities		90,514			91,507
Deferred revenue		56,657			68,861
Long-term debt		410,042			410,042
Total current liabilities		101,915			97,005
Long-term deferred revenue		9,531			9,026
Long-term debt		410,042			442,765
Deferred tax liabilities, net		5,608			9,326
Long-term deferred revenue		7,527			9,443
Other long-term liabilities		4,591			4,563
Deferred tax liabilities, net		10,960			20,835
Total liabilities		520,286			524,464
Other long-term liabilities		4,936			5,423
Total liabilities		535,380			575,471
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued and outstanding		—			—
Series A Preferred stock, $0.01 par value; 1 share authorized; none issued and outstanding		—			—
Series A Preferred stock, $0.01 par value; 1 share authorized, issued and outstanding		—			—
Common stock, $0.01 par value; 200,000,000 shares authorized; 98,754,671 and 98,392,478 shares issued and outstanding at October 31, 2012 and January 31, 2012, respectively		987			984
Common stock, $0.01 par value; 200,000,000 shares authorized; 99,148,724 and 99,084,473 shares issued and outstanding at April 30, 2013 and January 31, 2013, respectively		991			991
Additional paid-in capital		517,~~288~~388			516,~~578~~986
Accumulated other comprehensive loss		(1,~~856~~807	)		(1,~~573~~809	)
Accumulated deficit		(~~396~~395,~~381~~842	)		(~~397~~394,~~088~~605	)
Total stockholders’ equity		120,~~038~~730			~~118~~121,~~901~~563
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	~~655~~641,~~418~~016		$	~~694~~646,~~372~~027

See accompanying notes to condensed consolidated financial statements.

SERENA SOFTWARE, INC.

~~Condensed~~CONDENSED ~~Consolidated~~CONSOLIDATED ~~Statements~~STATEMENTS ofOF ~~Comprehensive~~COMPREHENSIVE ~~Income~~LOSS

For the Three ~~and Nine~~ Months Ended ~~October~~April 3130, ~~2012~~2013 and ~~2011~~2012

(In thousands)

(Unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011			2012			2011
	2013			2012
Revenue:
Software licenses	$	134,~~419~~587		$	147,~~637~~929		$	~~32,938~~		$	~~38,347~~
Maintenance		3433,~~307~~193			3534,~~163~~362			~~103,244~~			~~106,179~~
Professional services		54,~~438~~524			5,~~858~~628			~~17,349~~			~~17,483~~
Total revenue		5342,~~164~~304			5547,~~658~~919			~~153,531~~			~~162,009~~
Cost of revenue:
Software licenses		~~884~~246			~~1,006~~547			~~1,856~~			~~1,803~~
Maintenance		2,~~904~~998			2,~~949~~874			~~8,561~~			~~8,662~~
Professional services		54,~~312~~333			5,~~263~~534			~~16,631~~			~~16,425~~
Amortization of technology		—459			21—			—			~~3,672~~
Total cost of revenue		98,~~100~~036			98,~~239~~955			~~27,048~~			~~30,562~~
Gross profit		4434,~~064~~268			4638,~~419~~964			~~126,483~~			~~131,447~~
Operating expenses:
Sales and marketing		13,~~835~~045			1514,~~446~~833			~~42,983~~			~~45,646~~
Research and development		6,~~985~~732			6,~~757~~975			~~20,695~~			~~20,296~~
General and administrative		3,~~603~~120			3,~~406~~915			~~11,870~~			~~10,573~~
Amortization of intangible assets		9,~~077~~145			9,~~198~~183			~~27,336~~			~~27,599~~
Restructuring, acquisition and other charges		13,~~265~~608			~~662~~392			~~3,274~~			~~2,331~~
Total operating expenses		3435,~~765~~650			35,~~469~~298			~~106,158~~			~~106,445~~
Operating income		9,299			10,950			20,325			25,002
Operating (loss) income		(1,382	)		3,666
Other income (expense):
Interest income		4635			3452			~~144~~			~~105~~
Interest expense		(76,~~338~~502	)		(67,~~830~~168	)		~~(22,004~~	)		~~(20,222~~	)
Loss on early extinguishment of debt		—			—			(154	)		—
Amend and extend transaction fees		—			(577	)
Amend and extend transaction fees		—			—			(577	)		(1,487	)
Total other expense, net		(6,467	)		(7,693	)
Total other expense, net		(7,292	)		(6,796	)		(22,591	)		(21,604	)
Loss before income taxes		(7,849	)		(4,027	)
Income (loss) before income taxes		2,007			4,154			(2,266	)		3,398
Income tax benefit		(6,612	)		(914	)
Income tax (benefit) provision		(2,127	)		952			(2,973	)		492
Net loss		(1,237	)		(3,113	)
Net income		4,134			3,202			707			2,906
Foreign currency translation adjustments		2			(243	)
Foreign currency translation adjustments		102			(422	)		(283	)		(450	)
Comprehensive loss	$	(1,235	)	$	(3,356	)
Comprehensive income	$	4,236		$	2,780		$	424		$	2,456

See accompanying notes to condensed consolidated financial statements.

SERENA SOFTWARE, INC.

~~Condensed~~CONDENSED ~~Consolidated~~CONSOLIDATED ~~Statements~~STATEMENTS ofOF ~~Cash~~CASH ~~Flows~~FLOWS

For the ~~Nine~~Three Months Ended ~~October~~April 3130, ~~2012~~2013 and ~~2011~~2012

(In thousands)

(Unaudited)

	Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011
	2013			2012
Cash flows from operating activities:
Net income	$	707		$	2,906
Net loss	$	(1,237	)	$	(3,113	)
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		2910,~~289~~064			339,~~441~~815
Stock-based compensation		~~1,388~~507			~~888~~484
Deferred income taxes		~~(9,875~~24	)		(123,~~205~~559	)
Interest expense, net of interest paid		(4,495	)		(3,004	)
Amortization of debt issuance costs		413			549
Loss on early extinguishment of debt		154			—
Amend and extend transaction fees		—			577
Amortization of debt issuance costs		1,528			1,041
Amend and extend transaction fees		577			1,487
Other non-cash		(60	)		—
Changes in operating assets and liabilities:
Accounts receivable		~~565~~4,754			(26,~~008~~696	)
Prepaid expenses and other assets		1(4,~~711~~076	)		~~258~~(430	)
Accounts payable		16142			~~(944~~992	)
Income taxes payable		(1,540	)		(1,218	)
Income taxes (receivable) payable		(3,711	)		866
Accrued expenses and other liabilities		(21,~~254~~418	)		(4,~~357~~976	)
Deferred revenue		(14,120	)		(15,271	)
Accrued interest payable		(2,673	)		(3,348	)
Net cash provided by operating activities		3,591			1,014
Deferred revenue		5,309			7,118
Net cash provided by operating activities		8,098			11,671
Cash flows from investing activities:
Purchases of property and equipment		(~~1,876~~79	)		(~~3,077~~438	)
Purchases of intangible assets		(41,~~190~~513	)		(~~305~~100	)
Net cash used in investing activities		(61,~~066~~592	)		(~~3,382~~538	)
Cash flows from financing activities:
Exercise of stock options under employee stock option plan		469			467
Repurchase of common stock		(724	)		(2	)
Repurchase of common stock for taxes due from option exercises and restricted stock unit releases		(113	)		(149	)
Proceeds from borrowings		~~84,400~~—			—84,400
Payments on debt		~~(92,277~~—	)		(4284,~~500~~400	)
Debt issuance costs paid		~~(3,807~~—	)		(13,~~958~~757	)
Net cash used in financing activities		(~~12,362~~104	)		(443,~~456~~839	)
Effect of exchange rate changes on cash		~~(283~~2	)		(~~450~~243	)
Net decrease in cash and cash equivalents		(15,120	)		(47,274	)
Net increase in cash and cash equivalents		6,404			7,051
Cash and cash equivalents at beginning of period		~~109~~97,~~688~~315			~~126~~109,~~374~~688
Cash and cash equivalents at end of period	$	94103,~~568~~719		$	79116,~~100~~739
Supplemental disclosures of cash flow information:
Income taxes paid, net of refunds	$	~~8,264~~817		$	141,~~161~~703
Interest expense paid	$	248,~~970~~762		$	229,~~185~~967

See accompanying notes to condensed consolidated financial statements.

SERENA SOFTWARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Basis of Presentation

The unaudited condensed consolidated financial statements of Serena Software, Inc. (“Serena” or the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information as well as the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet as of January 31, ~~2012~~2013, is derived from the audited consolidated financial statements for the year ended January 31, ~~2012~~2013. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. The results of operations for the three ~~and nine~~ months ended ~~October~~ April 3130, ~~2012~~2013, are not necessarily indicative of the results that may be expected for the year ending January 31, ~~2013~~2014, or any future period. The information included in this Quarterly Report on Form 10-Q (“Report”) should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors,” “Quantitative and Qualitative Disclosures About Market Risk,” and the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, ~~2012~~2013.

~~The~~Use ~~preparation~~ of ~~financial~~Estimates statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates under different assumptions or conditions.

~~Immaterial~~The ~~Correction~~preparation of ~~Prior~~the ~~Period~~financial ~~Errors~~statements and related disclosures in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. To the extent there are material differences between the Company’s estimates and the actual results, the Company’s future consolidated results of operations may be affected.

During the second quarter of 2012 the Company concluded that previously reported interest expense and accrued interest on long-term debt were overstated. The Company assessed the materiality of these errors, using relevant quantitative and qualitative factors, and determined that these errors, both individually and in the aggregate, were not material to any previously reported period but could have been material if recorded in the second quarter of 2012. Accordingly, the Company revised the consolidated balance sheet as of January 31, 2012 by reducing accrued interest on long-term debt by approximately $1.8 million with a corresponding decrease in accumulated deficit. The impact of the errors for the year ended January 31, 2010 would decrease accumulated deficit as of the beginning of such year by approximately $1.3 million. The impact of the errors in fiscal 2010 and 2011 is a decrease in interest expense of approximately $0.2 million and $0.3 million for the years ended January 31, 2010 and 2011, respectively, and a decrease in accrued interest on long-term debt of approximately $0.2 million and $0.5 million as of January 31, 2010 and 2011, respectively. The revised financial data will be reflected when those periods are published again in future filings.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies as compared to the accounting policies described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements in Item 8 of Part II of the Company’s Annual Report on Form 10-K for the year ended January 31, ~~2012~~2013.

Recent Accounting Pronouncements

In ~~September~~February ~~2011~~2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. ~~2011~~2013-0802, Topic 350 ~~- Intangibles~~– -Comprehensive ~~Goodwill~~Income ~~and Other~~ (“ASU ~~2011~~2013-0802”), which amends Topic ~~350~~220 ~~and provides entities an option~~ to ~~perform~~ aimprove ~~qualitative assessment to determine whether further impairment testing on goodwill is necessary. Specifically, an entity has~~ the ~~option~~reporting toof ~~first~~classifications ~~assess~~out ~~qualitative~~of ~~factors~~accumulated toother ~~determine~~comprehensive ~~whether~~income ~~it is necessary~~ to ~~perform~~ the ~~current~~respective ~~two-step~~line ~~test. If~~items anin ~~entity~~net ~~believes,~~income. asASU a2013-02 ~~result of its qualitative assessment,~~is ~~that~~effective itfor ~~is more-likely-than-not that the fair value of a~~ reporting ~~unit~~ isperiods ~~less~~beginning ~~than~~after ~~its carrying amount, the quantitative~~December ~~impairment test is required. Otherwise~~15, ~~no further testing is required~~2012. The Company adopted this standard in the ~~first~~three ~~quarter~~months ofended April 30, 2013. The adoption did not impact the Company’s ~~adoption~~consolidated results of ~~the~~operations ~~standard~~or ~~during~~financial condition as the ~~first~~Company ~~quarter~~does ofnot ~~fiscal~~currently ~~2013~~have ~~did~~any ~~not~~significant ~~impact~~reclassifications ~~its~~out ~~consolidated results~~ of ~~operations~~accumulated orother ~~financial~~comprehensive ~~condition~~income (loss).

In June 2011, the FASB issued ASU No. 2011-05, Topic 220 - Presentation of Comprehensive Income (“ASU 2011-05”), which requires companies to present net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements. In addition, in December 2011, the FASB issued ASU No. 2011-12, Topic 220 - Comprehensive Income (“ASU 2011-12”), which defers the requirement to present components of reclassifications of other comprehensive income on the face of the income statement. The Company adopted both standards in the first quarter of 2013. The Company’s adoption of the standards during the first quarter of fiscal 2013 did not impact its consolidated results of operations or financial condition.

In May 2011, the FASB issued ASU No. 2011-04, Topic 820 - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”), which amends the fair value measurement guidance and

includes some enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for Level 3 measurements based on unobservable inputs. The Company adopted this standard in the first quarter of 2013. The Company’s adoption of the standard during the first quarter of fiscal 2013 did not impact its consolidated results of operations or financial condition.

2. FAIR VALUE MEASUREMENTS

The following table represents the Company’s financial instruments measured at fair value on a recurring basis (in thousands):

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant UnobservableInputs
	Quoted Prices inActive Marketsfor Identical Assets(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservable Inputs(Level 3)		Total
	(Level 1)		(Level 2)		(Level 3)		Total
As of April 30, 2013:
As of October 31, 2012:
Money market funds (1)	$	76,295	$	—	$	—	$	76,295
Money market funds (1)	$	74,351	$	—	$	—	$	74,351
As of January 31, 2013:
As of January 31, 2012:
Money market funds (1)		68,971		—		—		68,971
Money market funds (1)	$	78,669	$	—	$	—	$	78,669

(1)

Included in cash and cash equivalents on the condensed consolidated balance sheets

~~The~~6 carrying amount of the Company’s financial instruments including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair values due to their short-term maturities. The fair value of long-term debt is disclosed in Note 4.

The carrying amount of the Company’s financial instruments including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair values due to their short-term maturities. The estimated fair value of the Company’s long-term debt is disclosed in Note 4 herein.

3. GOODWILL AND INTANGIBLE ASSETS

Goodwill

There were no changes in the carrying amount of goodwill during the three ~~and nine~~ months ended ~~October~~April 3130, ~~2012~~2013. ~~There~~Goodwill ~~were~~is nonot ~~impairments~~amortized, tobut ~~goodwill~~instead ~~during~~tested ~~the~~for ~~three~~impairment ~~and~~annually ~~nine~~during ~~months~~the ~~ended~~fourth ~~October 31,~~quarter. ~~2012~~Goodwill ~~and~~may ~~October 31,~~also ~~2011.~~be ~~The~~tested ~~required~~for impairment between annual tests in the presence of impairment ~~test~~indicators. isThere ~~performed~~were inno impairments to goodwill during the ~~fourth~~three ~~quarter~~months ~~each~~ended ~~fiscal~~April 30, ~~year~~2013 and 2012, respectively.

Intangible Assets

OnIn May 14, 2012, the Company entered into an agreement with a third-party to license ~~certain~~ source code owned by the third party. As part of the agreement, the third-party was required to complete ~~certain~~ source code enhancements. The Company paid a total consideration of $45.04 million, inof ~~consideration~~which in$4.0 ~~the~~million ~~second~~was ofpaid ~~quarter~~in of fiscal ~~2013~~year 2013 and the remaining $1.54 million iswas ~~payable~~paid ~~upon~~in ~~completion~~the ofthree ~~the required~~months ~~source~~ended ~~code~~April 30, ~~development~~2013. The total consideration ~~paid to date~~ of $45.04 million, along with $0.1 million in internal development costs, was capitalized within intangible assets on the condensed consolidated balance sheet asin fiscal 2013. The intangible asset is being amortized over its estimated useful life of ~~October 31,~~3 ~~2012. Amortization~~years ~~will~~on ~~commence~~a ~~upon~~straight-line ~~general~~basis ~~availability~~with a corresponding charge to amortization of technology within costs of revenue in the consolidated ~~products~~statements of comprehensive loss.

The Company’s intangible assets were as follows (in thousands):


	As of April 30, 2013
	Gross		Accumulated Amortization			Net
Technology, licenses and patents	$	184,213	$	(179,597	)	$	4,616
Customer relationships		278,900		(249,294	)		29,606
Trademarks		14,300		(12,778	)		1,522
Internal-use software		6,827		(6,380	)		447

Total	$	484,240	$	(448,049	)	$	36,191


	As of January 31, 2013
	Gross		Accumulated Amortization			Net
Technology, licenses and patents	$	184,213	$	(179,159	)	$	5,054
Customer relationships		278,900		(240,663	)		38,237
Trademarks		14,300		(12,334	)		1,966
Internal-use software		6,711		(6,307	)		404

Total	$	484,124	$	(438,463	)	$	45,661

As of April 30, 2013, the estimated future amortization expense of the Company’s intangible assets is as follows (in thousands):


For the remaining nine months ending January 31, 2014	$	28,800
For year ending January 31, 2015		5,920
For year ending January 31, 2016		1,453
For year ending January 31, 2017		18

Total	$	36,191

The Company tests its long-lived assets for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. A long-lived asset is not recoverable, and therefore subject to impairment charge, if its carrying amount exceeds the undiscounted cash flows associated with it. There were no impairment charges in the three month periods ended April 30, 2013 and 2012, respectively.

The Company’s intangible assets were as follows (in thousands):

	As of October 31, 2012
	Gross		AccumulatedAmortization			Net
Amortizing intangible assets:
Technology, licenses and patents	$	182,832	$	(178,700	)	$	4,132
Customer relationships		278,900		(232,031	)		46,869
Trademarks		14,300		(11,890	)		2,410
Internal-use software		6,845		(6,375	)		470
Total	$	482,877	$	(428,996	)	$	53,881
	As of January 31, 2012
	Gross		AccumulatedAmortization			Net
Amortizing intangible assets:
Technology, licenses and patents	$	178,699	$	(178,699	)	$	—
Customer relationships		278,900		(206,030	)		72,870
Trademarks		14,300		(10,559	)		3,741
Internal-use software		6,649		(5,996	)		653
Total	$	478,548	$	(401,284	)	$	77,264

As of October 31, 2012, the estimated future amortization expense of intangible is as follows (in thousands):

For remaining three months of year ending January 31, 2013	$	9,505
For year ending January 31, 2014		37,910
For year ending January 31, 2015		5,409
For year ending January 31, 2016		1,057
Total	$	53,881

The Company tests its long-lived assets for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. A long-lived asset is not recoverable, and therefore subject to impairment charge, if its carrying amount exceeds the undiscounted cash flows associated with it. There were no impairment charges in the three and nine month periods ended October 31, 2012 and 2011.

4. DEBT

The following table summarized the Company’s long-term debt (in thousands, except percentages):

	October 31,2012			January 31,2012
	April 30,2013			January 31,2013
2016 Tranche B Term Loans: due March 10, 2016, three-month LIBOR plus 4.00% with a 1.00% LIBOR floor	$	117,399		$	—
2016 Tranche B term loans: due March 10, 2016, three-month LIBOR plus 4.00% with a 1.00% LIBOR floor	$	117,399		$	117,399
2013 Term Loans: due March 10, 2013, three-month LIBOR plus 2.00%		—			117,399
2016 Extended term loans: due March 10, 2016, three-month LIBOR plus 4.00%		191,101			191,101
2016 Extended Term Loans: due March 10, 2016, three-month LIBOR plus 4.00%		191,101			191,101
Senior Subordinated Notes: due March 15, 2016, 10.375%		101,542			101,542
Senior Subordinated Notes: due March 15, 2016, 10.375%		126,542			134,265
Total	$	410,042		$	410,042
Total long-term debt		435,042			442,765
Less current portion		(25,000	)		—
Total long-term debt, less current portion	$	410,042		$	442,765

Senior Secured Credit Agreement

On March 10, 2006, the Company entered into a senior secured credit agreement (the “senior secured credit agreement” or the “Credit Facility”). The Credit Facility originally provided for (1) a seven-year term loan in the amount of $400.0 million amortizing at a rate of 1.00% per year on a quarterly basis for the first six and three-quarters years with the balance paid at maturity and (2) a six-year revolving credit facility that permitted loans in an aggregate amount of up to $75.0 million, including a letter of credit facility and a swing-line facility. In addition, subject to certain terms and conditions, the Credit Facility provided for one or more uncommitted incremental term loan or revolving credit facilities in an aggregate amount not to exceed $150.0 million.

First Amend and Extend Transaction

On March ~~10, 2006, the Company entered into a senior secured credit agreement (the “Credit Facility”). On March~~ 2, 2011, the Company entered into an amendment to its Credit Facility to ~~extend~~ extend the final maturity of the outstanding term loans, extend the commitment termination date for a portion of the revolving credit facility and amend the financial covenants (the “~~1st~~First ~~Amendment~~Amend and Extend Transaction”). As a result of the ~~1st~~First Amend ~~Amendment~~and Extend Transaction, $191.1 million of the existing term loans were extended with a new maturity date of March 10, 2016 (the “2016 Extended Term Loans”), and $20.0 million of the existing revolving credit commitments were extended with a new maturity date of March 10, 2015 (the “Extended Revolving Credit Commitments”). The maturity date of the 2016 Extended Term Loans is subject to a springing maturity date that is the 180th day prior to March 10, 2016, if any of the senior subordinated notes remain outstanding as of the springing maturity date. The remaining $124.9 million of the existing term loans that were not extended (the “2013 Term Loans”), and the remaining $55.0 million of the existing revolving ~~credit~~ credit commitments that were not extended, ~~continue~~continued to mature on March 10, 2013 and March 10, 2012, respectively. As a result of the First Amend and Extend Transaction, the interest rate margins were increased by 200 basis points for the extended facilities. After giving effect to the amendment, the aggregate principal amount outstanding under the senior secured credit agreement did not change, and the principal amount of the term loans continue to amortize at a rate of 1.00% per year on a quarterly basis.

Second Amend and Extend Transaction

On April 12, 2012, the Company entered into an Extension Agreement and Amendment (the “Second Amend and Extend Transaction”) to the Credit Facility to extend the final maturity date of the 2013 Term Loans. As a result of the Second Amend and Extend Transaction, $117.4 million of the 2013 Term Loans were extended through a combination of the establishment of a series of term loans to new and existing lenders and the repayment of certain amounts to existing and departing lenders. This resulted in $84.4 million of the 2013 Term Loans being effectively repaid or extinguished and the same amount being considered new borrowings. The Company refers to the incremental term loans and the newly extended term loans as the “2016 Tranche B Term Loans.” The 2016 Tranche B Term Loans have an applicable margin for London Interbank Offered Rate, or LIBOR, based loans of 4.0% (or, if the Company exceeds a specified leverage ratio, 4.25%, which was 200 basis points higher than the interest rate under the 2013 Term Loans) and a LIBOR floor of 1.0%. The other terms and conditions of the 2016 Tranche B Term Loans are the same as those for the 2016 Extended Term Loans. After giving effect to the Second Amend and Extend Transaction, all of the Company’s outstanding term loans under the Credit Facility have a final maturity date of March 10, 2016 and the aggregate principal amount of the term loans outstanding under the Credit Facility did not change. The Company paid each lender holding 2016 Tranche B Term Loans an original issue discount equal to 1.5% of the principal amount of 2016 Tranche B Term Loans held by such lender.

The Credit Facility bears an annual commitment fee on the undrawn portion of that facility commencing on the date of execution and delivery of the senior secured credit agreement. As a result of the cancellation of the non-extended 2012 revolving credit commitment totaling $55.0 million during the quarter ended October 31, 2011, the annual commitment fee is limited to the amount of undrawn Extended Revolving Credit Commitments, which was equal to $20.0 million as of April 30, 2013. Effective February 1, 2011, the annual commitment fee is 0.375% per annum.

1st Amendment, the interest rate margins were increased by 200 basis points for the extended facilities. After giving effect to the 1st Amendment, the aggregate principal amount outstanding under the senior secured credit agreement did not change, and the principal amount of the term loans continue to amortize at a rate of 1.00% per year on a quarterly basis.

Second Amend and Extend Transaction

On April 12, 2012, the Company entered into an Extension Agreement and Amendment (the “2nd Amendment”) to its Credit Facility to extend the final maturity date of its 2013 Term Loans. As a result of the 2nd Amendment, $117.4 million of the 2013 Term Loans were extended through a combination of the establishment of a series of term loans to new and existing lenders and the repayment of certain amounts to existing and departing lenders. This resulted in $84.4 million of the 2013 Term Loans being effectively repaid or extinguished and the same amount being considered new borrowings. The Company refers to the incremental term loans and the newly extended term loans as the “2016 Tranche B Term Loans.” The 2016 Tranche B Term Loans have an applicable margin for London Interbank Offered Rate, or LIBOR, based loans of 4.0% (or, if we exceed a specified leverage ratio, 4.25%, which is 200 basis points higher than the interest rate under the 2013 Term Loans) and a LIBOR floor of 1.0%. The other terms and conditions of the 2016 Tranche B Term Loans are the same as those for the 2016 Extended Term Loans. After giving effect to the 2nd Amendment, all of the Company’s outstanding term loans under the Credit Facility have a final maturity date of March 10, 2016 and the aggregate principal amount of the term loans outstanding under the Credit Facility did not change. The Company paid each lender holding 2016 Tranche B Term Loans an original issue discount equal to 1.5% of the principal amount of 2016 Tranche B Term Loans held by such lender.

The Credit Facility bears an annual commitment fee on the undrawn portion of that facility commencing on the date of execution and delivery of the senior secured credit agreement. As a result of the cancellation of the non-extended 2012 revolving credit commitment totaling $55.0 million during the quarter ended October 31, 2011, the annual commitment fee is limited to the amount of undrawn Extended Revolving Credit Commitments, which was equal to $20.0 million as of October 31, 2012. Effective February 1, 2011, the annual commitment fee is 0.375% per annum.

Senior Subordinated Notes

The Company has outstanding $~~126~~101.5 million principal amount of senior subordinated notes, which bear interest at a rate of 10.375%, payable semi-annually on March 15 and September 15, and which mature on March 15, 2016. Each of the Company’s domestic subsidiaries that guarantees the obligations under the Company’s ~~Credit~~senior ~~Facility~~secured credit agreement will jointly, severally and unconditionally guarantee the notes on an unsecured ~~senior~~ senior subordinated basis. The Company does not have any domestic subsidiaries and, accordingly, there are no guarantors. The notes are the Company’s unsecured, senior subordinated obligations, and the guarantees, if any, will be unsecured, ~~senior~~ senior subordinated obligations of the guarantors. The notes are governed by the terms and conditions of an indenture dated as of March 10, 2006 (the “Indenture”). The notes are subject to redemption at the Company’s option pursuant ~~under~~to the terms and conditions specified in the ~~indenture related to the notes~~Indenture, and may be redeemed at the option of the holders at 101% of their face amount, plus accrued and unpaid interest, upon certain change of control events.

~~During~~From ~~the~~fiscal ~~nine~~year ~~months~~2009 ~~ended~~through ~~October 31~~fiscal year 2010, the Company repurchased an aggregate of $57 million of principal amount of its original outstanding ~~2012~~$200.0 million senior subordinated notes. In fiscal year 2011, the Company repurchased an aggregate of $78.7 million of principal amount of its original outstanding $200 million senior subordinated notes. ~~for~~The repurchases resulted in a ~~total~~net ~~cost~~loss of $70.92 million from the extinguishment of debt. In fiscal year 2013, ~~resulting~~the Company repurchased an aggregate of $32.7 million of principal amount of the senior subordinated notes in atwo ~~loss~~separate onprivately ~~early~~negotiated ~~extinguishment~~transactions. The repurchases resulted in a net loss of $01.20 million from the extinguishment of debt. The Company ~~did~~may, ~~not~~from time to time, continue to repurchase ~~any~~the senior subordinated ~~debt~~notes ~~during~~in open market or privately negotiated purchases or otherwise, or redeem the ~~quarter~~senior subordinated ~~ended~~notes ~~October 31,~~pursuant ~~2012~~to the terms of the Indenture.

Debt Covenants

The ~~senior~~Credit ~~subordinated~~Facility ~~notes~~ and the ~~credit~~Indenture ~~facility~~ contain various covenants, including, among other things, limitations on additional indebtedness, capital expenditures, restricted payments, the incurrence of liens, transactions with affiliates and sales of assets. In addition, the ~~credit~~Credit ~~facility~~Facility requires the Company to comply with certain financial covenants, including leverage and interest coverage ratios and capital expenditure limitations. The Company was in compliance with all of the covenants ofunder the ~~credit~~Credit ~~facility~~Facility as of ~~October~~April 3130, ~~2012~~2013.

The estimated fair values of the Company’s long-term debt are as follows (in thousands):

	Carrying Amount		Fair Value
As of October 31, 2012:
As of April 30, 2013:
2016 Tranche B Term Loans	$	117,399	$	~~117~~118,~~692~~432
2016 Extended Term Loans		191,101		~~189~~192,~~668~~305
Senior Subordinated Notes		~~126~~101,542		~~130~~102,~~338~~943
As of January 31, 2012:
As of January 31, 2013:
2013 Tranche B Term Loans	$	117,399	$	~~115~~118,~~932~~432
2016 Extended Term Loans		191,101		~~187~~191,~~279~~827
Senior Subordinated Notes		~~134~~101,~~265~~542		~~138~~103,~~293~~959

The term loans and senior subordinated notes are measured at fair value using significant other observable inputs ~~(Level~~categorized as Level 2) within the fair value hierarchy. These measurements consider inputs such as observable prices for similar instruments, quoted prices in markets that are not active, or other inputs that are observable, either directly or indirectly, including price quotes from independent pricing vendors and broker-dealers and available trade, bid and other market information.

5. RESTRUCTURING, ACQUISITION AND OTHER CHARGES

The agreements underlying the Company’s debt include financial covenants based on Adjusted EBITDA. Restructuring, acquisition and other charges are a component of the Adjusted EBITDA and are recorded as a separate line within the condensed consolidated statements of comprehensive loss.

Restructuring, acquisition and other charges consisted of the following (in thousands):

	Three Months Ended October 31,					Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011		2012			2011
	2013			2012
Restructuring	$	~~(71~~3,132	)	$	—	$	~~(71~~	)	$	~~163~~
Acquisition and Other Charges:
Sponsor and administration fees, acquisitions and costs related to issuance of debt		311			309		932			931
Acquisitions and costs related to issuance of debt		17			38
Severance, facility and other charges not part of restructuring and not part of ongoing operations		1,025			353		2,413			1,237
Sponsor and administration fees paid to Silver Lake		198			281
Total	$	1,265		$	662	$	3,274		$	2,331
Severance, facility and other charges not part of restructuring and not part of ongoing operations		261			73
Total	$	3,608		$	392

~~During~~In ~~the~~February ~~quarter ended April 30~~2013, ~~2011,~~ the Company ~~implemented~~initiated a restructuring plan (the “February 2013 Restructuring Plan”) in anresponse to a ~~effort~~decline in revenues and to better align its business operations ~~with~~to market opportunities. As part of the ~~current~~February ~~market~~2013 ~~and~~Restructuring ~~macroeconomic~~Plan, ~~conditions~~the Company reduced its workforce by approximately 8% (55 employees) in the three months ended April 30, 2013 affecting all parts of the organization. The ~~2011~~February 2013 Restructuring Plan consisted of certain workforce reductions world-wide, and facility closures. ~~The~~in ~~Company~~the ~~recorded~~North ~~net~~America ~~restructuring~~and ~~charges~~Europe ~~of $163,000~~regions. ~~during~~During the ~~nine~~three months ended ~~October~~April 3130, 2013, ~~2011~~the Company recorded net restructuring charges of $3.1 million. Restructuring charges were based on the Company’s restructuring plans that were committed by management. Any changes in the estimates of executing the approved plans are reflected in the Company’s results of operations. Restructuring liabilities are reported within other accrued expenses in the condensed consolidated balance sheets. All of the restructuring charges have been paid as of October 31, 2012 and the Company made adjustment for a change in estimate of $71,000 during both the three and nine months ended October 31, 2012.

The following table summarizes restructuring charges on the February 2013 Restructuring Plan (in thousands):


	Severance, payroll taxes employee benefits and other miscellaneous			Facilities closures			Total restructuring charges and accruals
Accrued	$	3,038		$	94		$	3,132
Paid/Written-off		(2,267	)		(89	)		(2,356	)

Balances as of April 30, 2013	$	771		$	5		$	776

6. STOCK-BASED COMPENSATION

Stock-Based Compensation Plans

In March 2006, the Company established the 2006 Stock Incentive Plan (the “2006 Plan”) governing, among other things, the grant of stock options, restricted stock units (“RSUs”), and other forms of share-based incentives to ~~our~~its employees, directors and consultants. In the quarter ended October 31, 2009, the Company completed a tender offer permitting all eligible employees and its independent directors to exchange, on a one-for-one basis, stock options granted under the 2006 Plan for new stock options granted under Serena’s Amended and Restated 2006 Stock Incentive Plan (the “Amended 2006 Plan”) having a lower exercise price and different vesting terms. In addition, as part of the Company’s merger in March 2006, the Company assumed certain stock options that were held by management participants immediately prior to the merger.

Stock Option Activities

The stock option grants generally vest either over a three-year period (“time-based options”) or based on the achievement of certain performance targets over a three fiscal year period (“performance-based options”). AsAll ~~described~~options ~~below,~~granted have a maximum contractual life of ten years from the date of grant. For performance-based options, ~~were~~the ~~modified~~actual onnumber ~~October~~of ~~10,~~option ~~2012, which~~grants ~~resulted~~eligible into ~~the~~vest ~~extension~~during ofa ~~the~~fiscal ~~vesting~~year ~~periods~~range from 50% to 150% of ~~performance-based~~the number of options initially granted, inand ~~prior~~is ~~years~~dependent byupon ~~approximately~~levels ~~one~~of toachievement ~~two~~of ~~years~~certain performance ~~depending~~targets onif ~~the~~baseline ~~year~~performance ofconditions ~~initial~~are ~~grant~~met. ~~All~~Based ~~options~~upon ~~granted~~current ~~have~~expectations aof ~~maximum~~performance ~~contractual~~targets ~~life~~achievement, approximately $0.1 million of ~~ten~~expense ~~years from~~is expected to be recognized over the ~~date~~remaining future vesting periods of approximately ~~grant~~3 years.

The following table sets forth a summary of stock option activity:

	OptionsAvailable forGrant			Number ofOptionsOutstanding			WeightedAverageExercise Price(Per Share)		WeightedAverageRemainingContractual Term(In Years)		AggregateIntrinsicValue(In thousands)
Balances as of January 31, 2012		3,970,302			8,582,511		$	2.79
Granted		(1,775,000	)		1,775,000			3.58
Exercised					(121,854	)		1.25
Cancelled (1)					(389,273	)		1.25
Cancelled		793,056			(793,056	)		3.11
Restricted stock units granted, net of cancellations (2)		(125,000	)		—			—
Balances as of October 31, 2012		2,863,358			9,053,328		$	3.00		7.1	$	4,565
As of October 31, 2012:
Vested and expected to vest					8,935,770		$	3.00		7.1	$	4,537
Vested and exercisable					4,259,888		$	2.69		5.9	$	3,394

(1) Represents cancelled options which are not returned to the available-for-grant stock option pool.

(2) RSUs are granted from the stock option pool. In the nine months ended October 31, 2012, a total of 250,000 units were granted and 125,000 units were cancelled and returned to the available-for-grant stock option pool.

The ~~pre-tax~~following ~~intrinsic~~table ~~value~~sets offorth ~~options~~a ~~exercised,~~summary ~~representing the difference between the fair value~~ of ~~the Company’s common~~ stock ~~on the date of exercise and the exercise price of each~~ option, ~~$0.3 million for the nine months ended October 31, 2012.~~ activity:


	Options Available for Grant			Number of Options Outstanding			Weighted Average Exercise Price (Per share)		Weighted Average Grant Date Fair Value (Per share)		Weighted Average Remaining Contractual Term (In years)		Aggregate Intrinsic Value (In thousands)
Balances as of January 31, 2013		4,112,156			7,799,011		$	3.02				5.75	$	1,091
Granted		(3,055,000	)		3,055,000			2.50	$	0.84
Exercised		—			(13,167	)		1.25					$	16
Expired (1)		—			(115,516	)		—
Cancelled		1,585,191			(1,585,191	)		3.11
Restricted stock units granted, net of cancellations (2)		(2,187,100	)		—			—

Balances as of April 30, 2013		455,247			9,140,137		$	2.85				7.13	$	930


As of April 30, 2013:
Vested and expected to vest					8,701,743		$	2.85				7.07	$	930
Vested and exercisable					3,176,656		$	2.69				5.07	$	930

(1)	Represents cancelled options which are not returned to the available-for-grant stock option pool.

(2)	RSUs are granted from the available-for-grant stock option pool. In the three months ended April 30, 2013, a total of 2.2 million units were granted with no units cancelled and returned to the available-for-grant stock option pool.

The pre-tax intrinsic value of options exercised represents the difference between the fair value of the Company’s common stock on the date of exercise and the exercise price of each option.

Aggregated intrinsic value represents the difference between the fair value of the Company’s stock on the date of grant and the exercise price multiplied by the number of related options. To assist management in determining the estimated fair value of the Company’s common stock, the Company engages a third-party valuation specialist to perform a valuation on a semi-annual basis as of January 31 and July 31. In estimating the fair value of the Company’s common stock, the external valuation firm employs a two-step approach that first estimates the fair value of the Company as a whole, and then allocates the adjusted value of shareholders’ equity to the Company’s common stock.

Restricted Stock Unit Activities

Restricted Stock ~~Unit~~Units (“RSUs”) generally vest on the third anniversary of the date of grant.

The following table sets forth a summary of RSU activity:

	Shares			WeightedAverageGrant DateFair Value		WeightedAverageRemainingContractual Term(In ~~Years~~years)		AggregateIntrinsicValue(In thousands)
Balances as of January 31, 2012		1,315,000		$	3.04
Balances as of January 31, 2013		445,000		$	3.42		1.71	$	1,113
Granted		~~250~~2,~~000~~187,100			32.5850				`
Cancelled		(125,000	)		3.06
Vested		(100,000	)		3.08
Vested		(495,000	)		3.00
Cancelled		—			—
Balances as of October 31, 2012		945,000		$	3.20		1.0	$	3,289
Balances as of April 30, 2013		2,532,100		$	2.64		2.76	$	6,330
As of October 31, 2012:
As of April 30, 2013:
Vested and expected-to-vest RSUs		2,198,215					02.975	$	35,~~141~~496

Stock-~~based~~Based Compensation Expense

The Company determines the fair value of its stock options utilizing the Black-Scholes option pricing model, which incorporates various assumptions including volatility, risk-free interest rate, expected term, and dividend yield. The Company determines the fair value of its RSUs based upon the fair value of the shares of its common stock at the date of grant.

The Company utilizes the graded-vesting attribution method for recognizing stock-based compensation expense. Compensation expense is only recorded for those awards that are expected to vest. Compensation expense for awards with performance-based vesting is recognized only for awards that are deemed probable of achieving the performance condition over the performance-based vesting period.

OnAs ~~October~~of April 1030, ~~2012~~2013, ~~the~~total ~~Company~~unrecognized ~~modified~~compensation ~~the~~costs ~~performance~~related ~~targets~~to ~~on approximately 3.0 million~~ unvested ~~performance-based~~ stock options ~~to align the performance targets with the Company’s recent financial forecasts. The original performance targets were established on the original respective grant dates~~ and noRSUs ~~expense had been recognized as the performance conditions~~ were ~~not deemed probable of achievement~~$3.3 ~~The~~million ~~modification~~and ~~resulted in re-measurement of the awards with a resulting fair value of approximately~~ $36.1 million, respectively. ~~Assuming~~Costs ~~baseline~~related ~~performance~~to ~~conditions~~unvested ~~are~~stock ~~met,~~options ~~the~~are expected ~~revised~~to ~~performance~~be ~~targets~~recognized ~~result~~over ~~in potential~~a ~~levels~~period ~~of achievement~~ ranging from ~~50%~~approximately 2 to ~~150%~~3 ofyears ~~the~~and ~~base~~costs ~~award~~related ~~value.~~to ~~Based~~the ~~upon~~RSUs ~~current~~are ~~expectations of achievement, approximately $1.1 million is~~ expected to be recognized over ~~the~~a ~~vesting~~period ~~periods~~ of ~~the~~3 ~~modified~~years ~~awards ranging~~ from ~~6 months to 2.5 years of which approximately $0.1 million was recognized during~~ the ~~three~~grant ~~months and nine months ended October 31, 2012~~date.

11Stock-based compensation expense for the three months ended April 30, 2013 and 2012 is categorized as follows (in thousands):


	Three Months Ended April 30,
	2013			2012
Cost of revenue - maintenance	$	16		$	16
Cost of revenue - professional services		(28	)		9
Sales and marketing		173			137
Research and development		107			64
General and administrative		239			258

Total stock-based compensation expense		507			484
Income tax benefit		(193	)		(188	)

Total stock-based compensation expense, net of tax	$	314		$	296

7. SEGMENT

The Company’s chief operating decision maker (“CODM”), who is the Chief Executive Officer, allocates resources and assesses performance based on financial information of the Company. The CODM reviews financial information presented on an entity-level basis accompanied by disaggregated information about revenues by product type and information about geographic regions for purposes of making operating decisions and assessing financial performance. The entity level financial information is identical to the information presented in the accompanying consolidated statements of comprehensive loss. Accordingly, the Company has determined that it operates in a single operating and reportable segment: enterprise change management software.

InThe ~~addition, the~~ Company ~~modified~~attributes ~~the~~revenues ~~vesting~~to geographic ~~schedule~~region ofgenerally ~~the modified performance-~~based ~~options~~on ~~and approximately 0.8 million unvested RSUs in~~ the ~~event~~country ofto awhich ~~change of control or~~ the ~~Company’s~~products ~~public~~are ~~offering~~shipped. The ~~Company also modified the RSUs to allow for full vesting if the holder is terminated without cause or resigns for good reason within twelve months~~ following atable ~~change~~shows ofnet ~~control~~revenues ofby ~~the~~geographic ~~Company.~~region ~~These modifications were not made~~ (in ~~contemplation~~thousands): ~~of the occurrence of such events.~~

As of October 31, 2012, total unrecognized compensation costs related to unvested stock options and RSUs was $5.8 million. Costs related to unvested stock options are expected to be recognized over a period ranging from approximately 2 to 3 years and costs related to the RSUs are expected to be recognized over a period of 3 years from the grant date.


	For the Three Months Ended April 30,
	2013		2012
North America:
Software licenses	$	1,973	$	5,442
Maintenance and professional services		25,104		26,940

		27,077		32,382

Europe, Asia and South America:
Software licenses		2,615		2,487
Maintenance and professional services		12,612		13,050

		15,227		15,537

Total	$	42,304	$	47,919

~~Stock-based~~No ~~compensation~~customer ~~expense~~accounted for ~~the three~~10% ~~and~~or ~~nine~~more ~~months~~of ~~ended~~consolidated ~~October 31,~~revenues ~~2012~~for ~~and~~the ~~2011~~three ismonths ~~categorized~~ended asApril 30, ~~follows~~2013 ~~(in thousands):~~and 2012, respectively.

	Three Months Ended October 31,					Nine Months Ended October 31,
	2012			2011		2012		2011
Cost of revenue - maintenance	$	13		$	16	$	43	$	46
Cost of revenue - professional services		20			1		27		54
Sales and marketing		(55	)		48		157		414
Research and development		66			66		190		(181	)
General and administrative		335			265		971		555
Total	$	379		$	396	$	1,388	$	888

8. INCOME TAXES

7Income tax benefit was $6.6 ~~INCOME~~million ~~TAXES~~in the three months ended April 30, 2013, as compared to income tax benefit of $0.9 million in the three months ended April 30, 2012. The Company’s effective income tax rate for the three months ended April 30, 2013, differs from the federal statutory rate of 35% primarily due to the impacts of permanently reinvested foreign earnings, the domestic production deduction, research and development credits, and state taxes. During periods where the Company experiences pre-tax losses, these items will generally increase the effective income tax rate above the statutory rate, whereas during periods where the Company experiences pre-tax profits, they will reduce the effective income tax rate below the statutory rate. Accordingly, the effective tax rate was higher in the three months ended April 30, 2013, as compared to the three months ended April 30, 2012, due to larger pre-tax losses.

~~Income~~At ~~tax~~January 31, ~~benefit~~2013, ~~was $2.1 million and $3.0 million in~~ the ~~three~~Company ~~and~~had ~~nine~~total ~~months ended October 31~~federal, ~~2012, respectively, as~~state ~~compared~~and toforeign ~~income~~unrecognized tax ~~expense~~benefits of $13.~~0 million and $0.~~5 million, inincluding ~~the~~interest ~~three~~of ~~and nine months ended October~~$0.8 ~~31, 2011, respectively~~million. ~~The~~During ~~Company’s effective income tax rates for~~ the three ~~and nine~~ months ended ~~October~~April 3130, ~~2012~~2013, ~~differ from~~there ~~the~~were ~~federal~~no ~~statutory~~material ~~rate~~changes ~~of 35% primarily due~~ to the ~~impacts~~total ofunrecognized ~~permanently~~tax ~~reinvested foreign earnings~~benefit, ~~the domestic production deduction~~ and ~~state taxes. During periods where~~ the Company ~~experiences losses, these items will generally~~accrued ~~increase~~immaterial ~~the~~amounts ~~effective~~in ~~income tax rate above the statutory rate, and reduce the effective income tax rate below the statutory rate during periods where the Company has income~~interest.

AtThe ~~January 31,~~Company ~~2012,~~files ~~the~~tax ~~Company~~returns ~~had~~in ~~total~~the U.S. federal, jurisdiction and in various state and foreign jurisdictions. ~~unrecognized~~The statute of limitations on the Company’s federal tax ~~benefit~~return offilings ~~$4.6~~remains open for the years ended January ~~million~~31, ~~including~~2010 ~~interest~~through ofJanuary 31, $12012.~~0 million.~~ ~~During~~The statute of limitations on the ~~nine~~Company’s ~~months~~major ~~ended~~state tax return ~~October~~filings remains open for the years ended January 31, ~~2012~~2009 through January 31, 2012. The statute of limitations on the ~~total~~Company’s ~~unrecognized~~U.K. income tax ~~benefits~~filings remains open for the years ended January 31, ~~including~~1999 ~~interest~~through January 31, 2012. ~~was~~Over ~~reduced~~the bynext twelve months, the Company expects a decrease of $10.35 million ~~due~~in toits aunrecognized ~~favorable~~tax ~~state~~benefits ~~audit~~primarily ~~resolution~~as ~~and~~a result of expiring statutes of limitation. ~~The~~and ~~Company~~settlements ~~accrued~~with ~~immaterial~~certain ~~amounts~~state intaxing ~~interest~~authorities.

~~The~~13 Company files tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The statute of limitations on the Company’s federal tax return filings remains open for the years ended January 31, 2010 through January 31, 2012. The statute of limitations on the Company’s major state tax return filings remains open for the years ended January 31, 2009 through January 31, 2012. The statute of limitations on the Company’s U.K. income tax filings remains open for the years ended January 31, 1999 through January 31, 2012. Over the next twelve months, the Company expects a decrease of $0.2 million in its unrecognized tax benefits primarily as a result of expiring statutes of limitation.

9. COMMITMENTS AND CONTINGENCIES

Commitments

The following table summarizes the Company’s future principal contractual obligations as of April 30, 2013 (in thousands):


			Payments Due by Period (1)
			Remainder of		Fiscal year ended January 31,
	Total		2014		2015		2016		2017			2018		Thereafter
Operating leases	$	14,448	$	2,587	$	2,842	$	2,300	$	2,188		$	1,996	$	2,535
Credit Facility:
2016 Tranche B Term Loans: due March 10, 2016		117,399		—		—				117,399	(3)		—		—
2016 Extended Term Loans: due March 10, 2016		191,101		—		—				191,101	(3)		—		—
Senior Subordinated Notes: due March 15, 2016		101,542		—		—				101,542			—		—
Interest payments on long-term debt (2)		71,438		18,403		24,481		24,481		4,073			—		—

	$	495,928	$	20,990	$	27,323	$	26,781	$	416,303		$	1,996	$	2,535

(1)	This table excludes the Company’s unrecognized tax benefits totaling $3.5 million as of April 30, 2013, since the Company has determined that the timing of payments with respect to these liabilities cannot be reasonably estimated.

(2)

Scheduled interest payments are calculated through the instrument’s due date and assume no principal pay-downs, borrowings or early repayments triggered by the occurrence of certain events. Scheduled interest payments on debt include the 2016 extended term loans due March 10, 2016, at an assumed annual rate of 4.20%, which is the rate in effect as of April 30, 2013, the 2016 Tranche B Term Loans due March 10, 2016, at an assumed annual rate of 5.00%, which is the rate in effect as of April 30, 2013, the commitment fee on the unutilized amount of the 2015 extended revolving credit facility due March 10, 2015, at an assumed annual rate of 0.375%, which is the rate in effect as of April 30, 2013, and the ten year senior subordinated notes due March 15, 2016, at the stated annual rate of 10.375%.

(3)	Subject to springing maturity that is the 180^th day prior to March 10, 2016 if the Senior Subordinated Notes remain outstanding as of such springing maturity date.

Office Facility Leases

The Company leases its office facilities under operating lease agreements that expire from 2013 to ~~2018~~2022. The terms of the lease agreements provide for rental payments on a ~~graduated~~gradual basis. The Company recognizes rent expense on a straight-line basis over the lease period.

Long -Term Debt

As of ~~October~~April 3130, ~~2012~~2013, wethe Company had total outstanding ~~$435~~debt ~~million~~of in$410.0 ~~aggregate indebtedness~~million. All of this debt matures in March 2016. Details of long -term debt isare disclosed in Note 4 herein.

Customer Indemnification

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of agreements with such parties, services to be provided by the Company or from intellectual property infringement claims made by third parties

Legal Proceedings

The Company is involved in various legal proceedings that have arisen during the ordinary course of its business. The reasonably possible or probable range of loss from the final resolution of these matters, individually or in the aggregate, is not expected to be material.

910. SUBSEQUENT ~~EVENT~~EVENTS

~~Subsequent~~In toJune ~~October 31~~2013, ~~2012,~~the ~~through~~Company initiated a restructuring plan (the ~~filing~~“June of2013 ~~this~~Restructuring ~~report,~~Plan”) to eliminate certain management layers and reduce redundant personnel across the Company. ~~redeemed~~The ~~$25.0~~Company ~~million~~expects to eliminate approximately 22% of its workforce (137 employees and contractors) affecting all parts of the 10organization.~~375%~~ ~~senior~~The Company expects to record restructuring ~~subordinated~~charges ~~notes~~related onto ~~November 2~~severance, ~~2012.~~payroll ~~The~~taxes ~~total~~and ~~consideration~~employee ~~was~~benefits within a range of $254.81 million, ~~resulting~~to $4.6 million in afiscal ~~loss~~year on2014. ~~early~~The ~~extinguishment~~Company ofmay $0also restructure facilities and terminate certain contracts which could lead to additional charges.8 The ~~million~~June 2013 Restructuring Plan is expected to be completed in fiscal year 2014, with the majority of payments made in the same period.

1314

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This ~~report~~Quarterly Report on Form 10-Q (“Report”), including the following “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto included elsewhere in this Report, and contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to safe harbors under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements about financial projections, operational plans and objectives, future economic performance and other projections and estimates contained in this ~~report~~ Report. When used in this ~~report~~Report, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, they are subject to important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including those risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2012~~2013, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in, or incorporated by reference into, this Report. We assume no obligation to update ~~any~~the forward-looking ~~statements~~information contained in this ~~report~~Report. It is important that the discussion below be read together with the ~~attached~~ unaudited ~~condensed~~ condensed consolidated financial statements and notes thereto in this Report and the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2012~~2013, and in Part II, Item 1A, and elsewhere in this Report.

Business and Market Environment

At Serena Software, we design, develop, and sell ~~products,~~“orchestrated” ~~solutions~~application ~~and~~lifecycle ~~services~~management ~~that~~(“ALM”), ~~together~~application ~~provide~~release ~~our~~management, ~~customers~~and ~~with Orchestrated~~ information technology (“IT”) software ~~Solutions. We~~and ~~are~~solutions, ~~focused~~which onwe ~~serving~~refer to collectively as our ~~enterprise~~“Orchestrated ~~customers~~IT” ~~and enhancing~~management solutions. Our primary goal is to provide Orchestrated IT solutions that advance the business value of IT. We are ~~the~~a ~~largest~~leading ~~global~~ALM ~~independent~~ software ~~company~~vendor and a leader in ~~terms~~orchestrating the convergence of ~~revenue~~application ~~solely~~development ~~focused~~and onIT operations, which we refer to as “DevOps.” Our Orchestrated IT solutions simplify and automate the transition of new versions of applications into production by managing request, development, release, change and support processes across ITheterogeneous environments, including mainframe and non-mainframe environments.

Our ~~products,~~expenses ~~solutions~~have ~~and~~historically ~~services~~been ~~address~~driven ~~the~~by ~~complexity~~personnel-related ofcosts, ~~application~~including ~~lifecycle~~wages, ~~management~~commissions, ~~and~~bonuses, ITvacation, ~~service~~employee ~~management~~benefits, ~~within~~stock-based ~~both~~compensation, ~~mainframe~~ and ~~distributed systems environments. Our revenue is generated by software licenses~~travel, ~~maintenance~~and ~~contracts~~we ~~and~~expect ~~professional~~this ~~services~~trend to continue. InDuring the ~~third~~first quarter of ~~2013~~fiscal year 2014, we have continued to experience a global macroeconomic environment in which our customers exercised care and conservatism in their investment prioritization and project deployments. We expect that our customers will continue to remain cautious with their IT spending in the near term, particularly within Europe.

In June 2013, our board of directors approved a plan to focus our strategy on our key product lines. We intend to focus our Go-To-Market strategy on our core mainframe and distributed system products and release management product line, and streamline and simplify our organizational structure. We initiated the June 2013 Restructuring Plan to eliminate certain management layers and reduce redundant personnel across the Company. We expect to eliminate approximately 22% of our workforce (137 employees and contractors) affecting all parts of the organization. We expect to record restructuring charges related to severance, payroll taxes and employee benefits within a range of $4.1 million to $4.6 million in fiscal year 2014. We may also restructure facilities and terminate certain contracts which could lead to additional charges. The June 2013 Restructuring Plan is expected to be completed in fiscal year 2014, with the majority of payments to be made in the same period. We expect to reduce our operating expenses (exclusive of amortization of intangible assets and restructuring, acquisition and other charges) for fiscal year 2014 by approximately 17% to 19% when compared to similar operating expenses for fiscal year 2013.

Executive Summary

Our financial highlights for the three ~~and nine~~ months ended ~~October~~April 3130, ~~2012~~ 2013 and ~~October 31~~2012, ~~2011~~respectively were as follows (in thousands, except percentages):

	Three Months Ended October 31,												Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011			$ Change			% Change			2012			2011			$ Change			% Change
	2013			2012			$ Change			% Change
Revenue	$	5342,~~164~~304		$	5547,~~658~~919		$	(25,~~494~~615	)		-4(12	%)	$	~~153,531~~		$	~~162,009~~		$	~~(8,478~~	)		-5	%
Operating Income		9,299			10,950			(1,651	)		-15	%		20,325			25,002			(4,677	)		-19	%
Operating (loss) income		(1,382	)		3,666			(5,048	)		(138	%)
Percentage of revenue		17(3	%)		208	%								13	%		15	%
Net income (loss)		4,134			3,202			932			29	%		707			2,906			(2,199	)		-76	%
Net loss		(1,237	)		(3,113	)		1,876			(60	%)
Percentage of revenue		8(3	%)		(6	%)								0	%		2	%
Operating cash flows		8,098			11,671			(3,573	)		(31	%)

• Revenue: During the three months ended ~~October~~April 3130, ~~2012~~2013, we experienced net revenue declines in software licenses, maintenance contracts and professional services, compared to the prior year period. The declines were led by, on a percentage basis, software licenses and professional services and to a lesser extent maintenance contracts.

• Operating (Loss) Income: ~~Operating~~We ~~income~~incurred ~~declined~~an operating loss for the three months ended ~~October~~April 3130, ~~2012~~2013, compared to operating income in the prior year period, primarily due to lower revenue, ~~increased investment in research~~ and ~~development, and~~ increased restructuring and other charges, ~~all~~ partially offset by declines in ~~sales~~other ~~and~~operating ~~marketing~~ expenses.

• Net ~~Income~~Loss: Net ~~income~~loss increased for the three months ended ~~October~~April 3130, ~~2012~~2013, compared to the prior year period, primarily due to ~~income~~lower ~~tax~~revenue ~~benefits~~and higher restructuring and other charges partially offset by ~~lower~~declines in other operating ~~income~~expenses, aslower ~~discussed~~interest ~~above~~and other debt-related expense, and higher income tax benefit.

• Operating Cash Flows: Operating cash flows ~~increased~~decreased during the ~~nine~~three months ended ~~October~~April 3130, ~~2012~~2013, compared to the prior year period, primarily due to ~~lower~~ net ~~income~~loss ~~offset~~incurred byduring the quarter, lower ~~taxes~~receipts ~~paid,~~from ~~and~~customers ~~improved~~as ~~timing~~a result of ~~receipts~~lower ~~from~~sales, ~~our~~higher ~~customers~~payments made to vendors due to timing and higher severance and related payments tomade ~~our~~from ~~vendors~~the implementation of the February 2013 Restructuring Plan.

~~Critical~~16 ~~Accounting Policies and Estimates~~

The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, trade accounts receivable and allowance for doubtful accounts, impairment or disposal of long-lived assets, accounting for income taxes, impairment of goodwill, valuation of our common stock, and accounting for options and RSUs, among other things. In many instances, we could have reasonably used different accounting estimates, and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by us. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation of our financial condition or results of operations could be affected.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. We base our estimates and assumptions on current facts, historical experience, and various other factors that we believe are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, trade accounts receivable and allowance for doubtful accounts, impairment or disposal of long-lived assets, accounting for income taxes, impairment of goodwill, valuation of our common stock, and accounting for options and RSUs, among other things. In many instances, we could have reasonably used different accounting estimates. In addition, changes in accounting estimates are reasonably likely to occur from period to period. Thus, actual results could differ significantly from the estimates made by us. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation of our financial condition or results of operations could be affected.

An accounting policy is considered to be critical if the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the effect of the estimates and assumptions on financial condition or operating performance is material. The accounting policies we believe to reflect our more significant estimates, judgments and assumptions and are most critical to understanding and evaluating our reported financial results are as follows:

•

Revenue recognition,

•

Stock-based compensation,

•

Valuation of long-lived assets, including goodwill, and

•

Accounting for income taxes.

In the ~~nine~~three months ended ~~October~~April 3130, ~~2012~~2013, there was no significant change in the above critical accounting policies or the underlying assumptions and estimates used in their application. See our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2012~~2013, filed with the SEC on ~~April~~March 3029, ~~2012~~2013, for further information regarding our critical accounting policies and estimates. See Recent Accounting Pronouncements in the condensed consolidated financial statements in Item 1 of Part I of this quarterly report for a full description of recent accounting pronouncements, including the actual and expected dates of adoption and estimated effects on our consolidated results of operations and financial condition.

Recent Accounting Pronouncements

See Recent Accounting Pronouncements in the condensed consolidated financial statements in Item 1 of Part I of this Report for a full description of recent accounting pronouncements, including the actual and expected dates of adoption and estimated effects on our consolidated results of operations and financial condition.

Results of Operations

Revenue

The following table summarizes software licenses, maintenance and professional services revenues for the periods indicated (in thousands, except percentages):

	Three Months Ended October 31,												Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011			$ Change			% Change			2012			2011			$ Change			% Change
	2013			2012			$ Change			% Change
Software licenses	$	134,~~419~~587		$	147,~~637~~929		$	(13,~~218~~342	)		-8(42	%)	$	~~32,938~~		$	~~38,347~~		$	~~(5,409~~	)		~~-14~~	%
Percentage of revenue		2511	%		2616	%								21	%		24	%
Maintenance		3433,~~307~~193			3534,~~163~~362			(~~856~~1,169	)		-2(3	%)		~~103,244~~			~~106,179~~			~~(2,935~~	)		-3	%
Percentage of revenue		6578	%		6372	%								67	%		65	%
Professional services		54,~~438~~524			5,~~858~~628			(~~420~~1,104	)		-7(20	%)		~~17,349~~			~~17,483~~			~~(134~~	)		-1	%
Percentage of revenue		1011	%		1112	%								12	%		11	%
Total revenue	$	5342,~~164~~304		$	5547,~~658~~919		$	(25,~~494~~615	)		-4(12	%)	$	~~153,531~~		$	~~162,009~~		$	~~(8,478~~	)		-5	%

~~Software~~The ~~licenses~~decrease ~~revenue declined~~ in ~~the~~software ~~three~~license ~~months~~revenue ~~ended~~in ~~October 31~~2013, ~~2012,~~ compared to ~~the same prior year period~~2012, ~~primarily~~was due to ~~lower~~a decline in sales of our mainframe and distributed system products, ~~most predominantly Serena Service Manager and Serena Release Manager,~~ partially offset by ~~higher~~growth in sales of our ~~mainframe~~release ~~products,~~management ~~including ChangeMan ZMF~~products. ~~Software~~The ~~license~~decline ~~revenue declined~~ in ~~the~~sales ~~nine~~was ~~months ended October 31~~due, ~~2012,~~in ~~compared to the prior year period~~part, ~~primarily due~~ to ~~lower~~ sales ofmanagement ~~our distributed system products~~ and ~~mainframe~~execution ~~products.~~issues, ~~Maintenance~~particularly ~~revenue~~within ~~declined~~our ~~in both~~North ~~the~~America ~~three~~ and ~~nine~~Asia ~~months~~Pacific ~~ended October 31~~Regions, ~~2012,~~and higher ~~compared~~employee toturnover ~~the~~within ~~respective~~our ~~prior~~North ~~year~~America ~~periods,~~sales ~~primarily~~organization. ~~due~~We toexpect ~~recent~~software ~~declines in total~~ license ~~revenues. Professional services~~ revenue ~~declined~~for inour ~~both~~fiscal ~~the~~quarter ~~three~~ending ~~and nine months ended October~~July 31, ~~2012,~~2013 ~~compared~~ to ~~the~~increase ~~respective~~over ~~prior~~the ~~year~~current ~~periods,~~fiscal ~~primarily~~quarter ~~due~~and todecline awhen ~~declines~~compared into the ~~number~~same ofquarter ~~consulting engagements~~last year.

Maintenance revenue declined in 2013, compared to 2012, primarily due to recent declines in total license revenues and maintenance contract renewals. We expect maintenance revenue to remain generally flat in the near term as maintenance contracts continue to renew at consistent rates and we continue to sell software licenses.

Professional services revenue declined in 2013, compared to 2012, primarily due to a decline in consulting engagements as a result of lower software license sales and the loss of a long standing engagement with a customer in the United States.

Gross Profit

The following table summarizes gross profit for the periods indicated (in thousands, except percentages):

	Three Months Ended October 31,												Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011			$ Change			% Change			2012			2011			$ Change			% Change
	2013			2012			$ Change			% Change
Software licenses gross profit	$	124,~~535~~341		$	137,~~631~~382		$	(13,~~096~~041	)		-8(41	%)	$	~~31,082~~		$	~~36,544~~		$	~~(5,462~~	)		~~-15~~	%
Percentage of software licenses revenue		9395	%		93	%								94	%		95	%
Maintenance gross profit		3130,~~403~~195			3231,~~214~~488			(~~811~~1,293	)		-3(4	%)		~~94,683~~			~~97,517~~			~~(2,834~~	)		-3	%
Percentage of maintenance revenue		9291	%		92	%								92	%		92	%
Professional services gross profit		~~126~~191			~~595~~94			~~(469~~97	)		~~-79~~103	%		~~718~~			~~1,058~~			~~(340~~	)		~~-32~~	%
Percentage of professional services revenue		24	%		102	%								4	%		6	%
Amortization of technology		—459			~~(21~~0	)		21459			-100	%		—			~~(3,672~~	)		~~3,672~~			~~-100~~	%
Percentage of total revenue		01	%		0	%								0	%		-2	%
Total gross profit	$	4434,~~064~~268		$	4638,~~419~~964		$	(24,~~355~~696	)		-5(12	%)	$	~~126,483~~		$	~~131,447~~		$	~~(4,964~~	)		-4	%
Percentage of revenue		83	%		83	%								82	%		81	%
Percentage of total revenue		81	%		81	%

Software ~~license~~licenses gross profit as a percentage of software licenses revenue ~~was~~increased ~~unchanged~~in ~~during the three months ended October 31~~2013, ~~2012~~compared ~~and~~to ~~was down slightly during the nine months ended October 30,~~ 2012, primarily ~~compared~~due to ~~the~~lower ~~respective~~royalties ~~prior~~and ~~year~~sales ~~periods.~~commission ~~The slight decrease in the nine month period is primarily attributable to an increase in commissions~~ earned by ~~external~~third ~~business partners~~parties.

15Maintenance gross profit as a percentage of maintenance revenue decreased in 2013, compared to 2012, mainly due to declines in revenue partially offset by reductions in costs as a result of our effort to maintain operational efficiencies and the impact of variable compensation.

Professional services gross profit as a percentage of professional services revenue increased during 2013, compared to 2012, due to reductions in costs as a result of lower headcount and the impact of variable compensation partially offset by lower revenue.

Amortization of technology increased in 2013, compared to 2012, primarily due to the addition of new intangibles in late fiscal 2013. We expect amortization of intangibles to increase due to the impact of a full year of expensing of the assets added in late 2012.

We expect our gross profit as a percentage of revenue for the quarter ending July 31, 2013 to remain relatively flat compared to the quarter ended April 30, 2013.

Maintenance gross profit as a percentage of maintenance revenue was unchanged during the three and nine months ended October 31, 2012, compared to the respective prior year periods, as declines in revenue were offset with reductions in costs as a result of our effort to maintain cost efficiencies and the impact of variable compensation. Professional services gross profit as a percentage of professional services revenue declined significantly during the three and nine months ended October 31, 2012, compared to the respective prior year periods, due to lower revenue and continued investments to build out our professional services capabilities, partially offset by declines in variable compensation. Acquired technology became fully amortized in the third quarter of fiscal 2012.

Operating Expenses

The following table summarizes operating expenses for the periods indicated (in thousands, except percentages):

	Three Months Ended October 31,												Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011			$ Change			% Change			2012			2011			$ Change			% Change
	2013			2012			$ Change			% Change
Sales and marketing	$	13,~~835~~045		$	1514,~~446~~833		$	(1,~~611~~788	)		~~-10~~(12	%)	$	~~42,983~~		$	~~45,646~~		$	~~(2,663~~	)		-6	%
Percentage of revenue		2631	%		2831	%								28	%		28	%
Research and development		6,~~985~~732			6,~~757~~975			~~228~~(243	)		(3	%)	$	~~20,695~~		$	~~20,296~~			~~399~~			2	%
Percentage of revenue		1316	%		1214	%								13	%		13	%
General and administrative		3,~~603~~120			3,~~406~~915			~~197~~(795	)		6(20	%)	$	~~11,870~~		$	~~10,573~~			~~1,297~~			12	%
Percentage of revenue		7	%		68	%								8	%		7	%
Amortization of intangible assets		9,~~077~~145			9,~~198~~183			(~~121~~38	)		-1(0	%)	$	~~27,336~~		$	~~27,599~~			~~(263~~	)		-1	%
Percentage of revenue		1722	%		1719	%								18	%		17	%
Restructuring, acquisition & other charges		1,265			662			603			91	%	$	3,274		$	2,331			943			40	%
Restructuring, acquisition and other charges		3,608			392			3,216			820	%
Percentage of revenue		29	%		1	%								2	%		1	%
Total operating expenses	$	3435,~~765~~650		$	35,~~469~~298		$	~~(704~~352	)		-21	%	$	~~106,158~~		$	~~106,445~~		$	~~(287~~	)		0	%
Percentage of revenue		6584	%		6473	%								69	%		66	%

Sales and marketing expenses ~~declined~~decreased ~~during~~in ~~the three and nine months ended October 30~~2013, ~~2012,~~ compared to ~~the respective prior year periods~~2012, primarily due to declines in personnel-related expenses, ~~including variable compensation~~ as a result of lower ~~revenue~~headcount ~~partially~~and ~~offset~~lower byvariable ~~higher~~compensation ~~recruiting~~resulting ~~and~~from ~~staff~~lower ~~development expenses~~revenue.

Research and development expenses ~~increased~~decreased ~~slightly~~in ~~during the three and nine months ended October 30~~2013, ~~2012,~~ compared to ~~the respective prior year periods~~2012, primarily due to anlower ~~increase~~capital ~~in personnel-related expenses~~spending, ~~including~~travel ~~stock-based~~and ~~compensation~~related asexpenses weand ~~continued~~the toimpact ~~invest~~of inlower ~~new~~variable ~~product innovation and expand our product portfolio~~compensation.

General and administrative expenses ~~increased~~decreased ~~during~~in ~~the three and nine months ended October 30~~2013, ~~2012,~~ compared to ~~the respective prior year periods~~2012, primarily due to ~~increases~~decreases in personnel-related ~~expenses~~ costs including ~~stock-based~~variable compensation and ~~higher~~bad ~~recruiting~~debt ~~expenses~~expense.

Amortization of intangible assets ~~declined~~decreased ~~slightly~~in ~~during the three and nine months ended October 30~~2013, ~~2012,~~ compared to ~~the respective prior year periods~~2012, ~~primarily~~ due to certain intangible assets being fully amortized in the ~~prior year periods~~current period.

~~Restructuring,~~19 acquisitions and other charges increased during the three and nine months ended October 30, 2012, compared to the respective prior year periods, due to increases in severance and related charges as a result of our effort to maintain cost efficiencies, increases in non-recurring professional services, including legal and consulting fees, and non-recurring facility-related charges.

Other Expense and Income Tax Provision

The following table summarizes other expense, net and income tax provision for the periods indicated (in thousands, except percentages):

	Three Months Ended October 31,												Nine Months Ended October 31,
	2012			2011			$ Change			% Change			2012			2011			$ Change			% Change
Interest income	$	46		$	34		$	12			35	%	$	144		$	105		$	39			37	%
Interest expense		(7,338	)		(6,830	)		(508	)		7	%		(22,004	)		(20,222	)		(1,782	)		9	%
Loss on early extinguishment of debt		—			—			—			—			(154	)		—			(154	)		n/m
Amend and extend transaction fees		—			—			—			—			(577	)		(1,487	)		910			-61	%
Total other expense, net	$	(7,292	)	$	(6,796	)	$	(496	)		7	%	$	(22,591	)	$	(21,604	)	$	(987	)		5	%
Percentage of revenues		n/m			n/m									n/m			n/m
Income tax provision		(2,137	)		952			(3,079	)		-323	%		(2,973	)		492			(3,465	)		-704	%
Effective tax rate		-106	%		23	%								131	%		14	%

~~Interest~~Restructuring, ~~expense~~acquisition ~~increased~~and ~~due~~other tocharges ~~higher~~consisted ~~rates on our term loans as a result~~ of the ~~2nd~~following ~~Amendment~~(in tothousands, ~~our~~except ~~credit~~percentages): ~~facility, partially offset by declines in overall balances due to repayments.~~

During the nine months ended October 31, 2012, we repurchased $7.7 million of senior subordinated notes for a total cost of $7.9 million, resulting in a loss on early extinguishment of $0.2 million.


	Three Months Ended April 30,
	2013			2012			$ Change			% Change

Restructuring	$	3,132		$	—		$	3,132			100	%
Acquisition and Other Charges:

Acquisitions and costs related to issuance of debt		17			38			(21	)		(55	%)

Sponsor and administration fees paid to Silver Lake		198			281			(83	)		(30	%)

Severance, facility and other charges not part of restructuring and not part of ongoing operations		261			73			188			258	%

Total restructuring, acquisition and other charges	$	3,608		$	392		$	3,216			820	%

Percentage of revenue		9	%		1	%

~~During~~Restructuring, ~~the~~acquisition ~~nine~~and ~~months~~other ~~ended~~charges ~~October 31~~increased in 2013, compared to 2012, weprimarily ~~incurred~~due $0to recognition of severance and facilities related charges as a result of workforce reductions from our February 2013 Restructuring Plan.6 ~~million~~The inCompany ~~fees~~reduced ~~associated~~its ~~with~~workforce by approximately 8% during the ~~2nd~~three ~~Amendment~~months ended April 30, as2013 ~~compared~~which toaffected ~~$1.5~~all ~~million~~parts of ~~paid~~the organization including facility closures in ~~conjunction~~the ~~with~~North America and Europe regions. Restructuring charges were based on the ~~1st~~Company’s ~~Amendment~~restructuring toplans ~~our~~that ~~credit~~were committed by management. Restructuring liabilities are reported within ~~facility~~other accrued expenses in the ~~prior~~condensed ~~year~~consolidated ~~period~~balance sheets.

~~Our~~Other ~~effective~~Income ~~income~~(Expense) tax rates for the three and nine months ended October 31, 2012, differ from the federal statutory rate of 35% primarily due to the impacts of permanently reinvested foreign earnings, the domestic production deduction, and state taxes. During periods where we experience losses, these items will generally increase the effective income tax rate above the statutory rate, whereas they will reduce the effective income tax rate below the statutory rate during periods when we have income. See Note 7 of the notes to our unaudited condensed consolidated financial statements included elsewhere in this report for further information regarding income taxes and their impact on our results of operations and financial position.

The following table summarizes total other income (expense) for the periods indicated (in thousands, except percentages):


	Three Months Ended April 30,
	2013			2012			$ Change			% Change
Interest income	$	35		$	52		$	(17	)		(33	%)
Interest expense		(6,502	)		(7,168	)		666			(9	%)
Amend and extend transaction fees		—			(577	)		577			(100	%)

Total other expense, net	$	(6,467	)	$	(7,693	)	$	1,226			(16	%)

Percentage of revenue		(15	%)		(16	%)

Total other expense decreased in 2013, compared to 2012, primarily due to a reduction in interest expense as a result of lower outstanding debt balances and the absence of amend and extend transaction fees on our term loans which was fully recognized in 2012.

For additional information regarding the Credit Facility, see “Liquidity and Capital Resources—Senior Secured Credit Agreement” below and Note 4 of notes to our consolidated financial statements in this Report.

Income Tax Benefit

The following table summarizes total income tax benefit for the periods indicated (in thousands, except percentages):


	Three Months Ended April 30,
	2013			2012			$ Change			% Change
Income tax benefit	$	(6,612	)	$	(914	)	$	(5,698	)		623	%
Percentage of revenue		(16	%)		(2	%)

Effective tax rate		84	%		23	%

Income tax benefit was $6.6 million in the three months ended April 30, 2013, as compared to income tax benefit of $0.9 million in the three months ended April 30, 2012. Our effective income tax rate differs from the federal statutory rate of 35% primarily due to the impacts of permanently reinvested foreign earnings, the domestic production deduction, research and development credits, and state taxes. During periods where we experience pre-tax losses, these items will generally increase the effective income tax rate above the statutory rate, whereas during periods where we experience pre-tax profits, they will reduce the effective income tax rate below the statutory rate. Accordingly the effective tax rate was higher in the three months ended April 30, 2013, as compared to the three months ended April 30, 2012, due to larger pre-tax loss. See Note 8 of the notes to consolidated financial statements included in this Report for further information regarding income taxes and their impact on our results of operations and financial position.

Liquidity and Capital Resources

The following table summarizes our cash flows for the periods indicated (in thousands):

	Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011
	2013			2012
Cash flows provided by operating activities	$	38,~~591~~098		$	111,~~014~~671
Cash flows used in investing activities		(61,~~066~~592	)		(~~3,382~~538	)
Cash flows used in financing activities		(~~12,362~~104	)		(443,~~456~~839	)

To date, we have financed our operations and met our capital requirements through cash flows from operations. Our liquidity requirements are significant, primarily due to debt service obligations. We believe that current cash and cash equivalents, and cash flows from operations will satisfy our working capital and capital expenditure requirements ~~for~~at ~~the twelve~~least ~~months~~through ~~ending October~~April 3130, ~~2013~~2014. As of ~~October~~April 3130, ~~2012~~2013, we had $94103.67 million in cash and cash equivalents. Approximately 2026% of our cash and cash equivalents were held by foreign subsidiaries as of that date. Our intent is to permanently ~~reinvest~~ reinvest our earnings from ~~certain~~ foreign operations. We do not anticipate a need to repatriate dividends from foreign operations that are permanently reinvested in order to fund operations. If such funds were repatriated to the United States, we would be required to accrue and pay applicable U.S. and foreign taxes. At some point in the future, we may require additional funds for either operating or strategic purposes or to refinance our existing indebtedness and may seek to raise additional funds through public or private debt or equity financing. If we are required to seek additional financing in the future through public or private debt or equity financing, there is no assurance that this additional financing will be available or, if available, will be upon reasonable terms and not legally or structurally senior to or on parity with our existing debt obligations.

Summary of Cash Flows

During the ~~nine~~ three months ended ~~October~~April 3130, ~~2012~~2013, cash and cash equivalents ~~decreased~~increased by $156.24 million. The ~~decrease~~increase was primarily due to the ~~result~~timing of ~~cash~~payments ~~used~~made into ~~investing~~various ~~and~~parties ~~financing~~related ~~activities~~to ofour ~~$6.1~~operating ~~million~~activities, and ~~$12.4 million, respectively, partially offset by~~ cash ~~generated~~ ~~from~~used ~~operations~~in ofinvesting $3activities.6 ~~million.~~

Net Cash Provided by Operating Activities:. Cash ~~flows~~flow from operations for the ~~nine~~three months ended ~~October~~April 3120, ~~2012~~ ~~increased~~2013 decreased by $23.6 million,. ~~compared~~The decrease was due to the ~~prior~~$1.2 ~~year~~million ~~period.~~of ~~The~~net ~~increase~~loss ~~was~~incurred, and the ~~result~~timing of ~~lower~~payments ~~net~~made ~~income~~to ~~offset~~various vendors, bytax ~~lower~~authorities, ~~taxes~~and ~~paid~~severance and ~~improved~~related ~~timing~~payments ofmade ~~receipts~~as ~~from~~a ~~our~~result ~~customers~~of ~~and~~our ~~payments~~February to2013 ~~our~~Restructuring ~~vendors~~Plan.

Net Cash Used in Investing Activities:. Net cash used in investing activities for the ~~nine~~three months ended ~~October~~April 3130, ~~2012~~2013 increased by $21.71 million, ~~compared~~primarily due to ~~the~~ ~~prior year period. The increase was~~ the ~~result~~ purchases of intangible assets, ~~primarily~~mainly athe ~~technology~~remaining ~~licensing~~payment ~~agreement,~~of ~~partially~~a ~~offset~~technology ~~by decreases in capital expenditures~~licensing agreement.

Net Cash Used In Financing Activities:. Net cash used in financing activities for the ~~nine~~three months ended ~~October~~April 3130, ~~2012~~ 2013 decreased by $323.17 million, ~~compared~~primarily due to the ~~prior~~absence ~~year period. The decrease was the result~~ of ~~lower net~~ debt ~~purchases partially offset by higher debt~~ issuance costs ~~compared to the prior year period~~payments. Net debt repurchases were $7.9 million for the nine months ended October 31, 2012, compared to $42.5 million for the prior year period. Debt issuance costs paid in conjunction with the 2nd Amendment during the nine months ended October 31, 2012 were $3.8 million, as compared to $1.9 million paid in conjunction with the 1st Amendment in the prior year period.

~~Contractual~~21 ~~Obligations and Commitments~~

The following table summarizes of our various contractual commitments as of October 31, 2012, including the redemption of $25.0 million of senior subordinated notes (the loss on early extinguishment of $0.8 million is not included in the schedule below) on November 2, 2012 as discussed in Note 9 of the notes to our unaudited condensed consolidated financial statements.

	Payments Due by Period
	Total		Remainder of 2013		1-3 years		3-5 years		Thereafter
Operating leases	$	12,730	$	710	$	5,158	$	3,382	$	3,480
Credit Facility:
2016 Tranche B Term Loans: due March 10, 2016		117,399		—		—		117,399		—
2016 Extended Term Loans: due March 10, 2016		191,101		—		—		191,101		—
Senior Subordinated Notes: due March 15, 2016		126,542		25,000		—		101,542		—
Interest payments on long-term debt		84,530		3,487		48,967		32,076		—
	$	532,302	$	29,197	$	54,125	$	445,500	$	3,480

Contractual Obligations and Commitments

~~This~~The ~~table~~following ~~excludes~~is ~~our~~a ~~unrecognized~~summary ~~tax~~of ~~benefit~~our ~~totaling~~various ~~$3.2~~contractual ~~million~~commitments as of ~~October~~April 3130, ~~2012~~2013, ~~because~~including wenon-cancelable ~~have determined~~operating ~~that~~lease ~~the~~agreements ~~timing~~for ofoffice ~~payments~~space ~~with~~that ~~respect~~expire tobetween ~~this~~fiscal ~~liability~~years 2014 ~~cannot~~and be2022 ~~reasonably~~(in ~~estimated.~~thousands):


			Payments Due by Period (1)
			Remainder of		Fiscal year ended January 31,
	Total		2014		2015		2016		2017			2018		Thereafter
Operating leases	$	14,448	$	2,587	$	2,842	$	2,300	$	2,188		$	1,996	$	2,535
Credit Facility:
2016 Tranche B Term Loans: due March 10, 2016		117,399		—		—				117,399	(3)		—		—
2016 Extended Term Loans: due March 10, 2016		191,101		—		—				191,101	(3)		—		—
Senior Subordinated Notes: due March 15, 2016		101,542		—		—				101,542			—		—
Interest payments on long-term debt (2)		71,438		18,403		24,481		24,481		4,073			—		—

	$	495,928	$	20,990	$	27,323	$	26,781	$	416,303		$	1,996	$	2,535

(1)	This table excludes our unrecognized tax benefits totaling $3.5 million as of April 30, 2013 since we have determined that the timing of payments with respect to these liabilities cannot be reasonably estimated.

(2)

Scheduled interest payments on debt are calculated through the instrument’s due date and assume no principal pay-downs or borrowings. Scheduled interest payments on debt include the 2016 Extended Term Loans due March 10, 2016 at an assumed annual rate of 4.20%, which is the rate in effect as of April 30, 2013, the 2016 Tranche B Term Loans due March 10, 2016 at an assumed annual rate of 5.00%, which is the rate in effect as of April 30, 2013, the commitment fee on the unutilized amount of the 2015 extended revolving credit facility due March 10, 2015 at an assumed annual rate of 0.375%, which is the rate in effect as of April 30, 2013, and the ten year senior subordinated notes due March 15, 2016 at the stated annual rate of 10.375%.

(3)	Subject to springing maturity that is the 180^th day prior to March 10, 2016, if the Senior Subordinated Notes remain outstanding as of such springing maturity date.

Senior Secured Credit Agreement

In March 2006, we entered into a senior secured credit agreement (the “Credit Facility”),. ~~which~~The ~~was~~senior ~~amended~~secured incredit ~~March~~agreement ~~2011~~originally ~~and April~~provided ~~2012.~~for ~~As of October~~(1) ~~31,~~a ~~2012,~~seven-year ~~the~~term ~~aggregate~~loan ~~principal~~in the amount ~~outstanding~~of ~~under our Credit Facility was~~ $~~308~~400.50 million, ~~which~~amortizing ~~consisted~~at a rate of ~~$191.~~1.00% per ~~million~~year ofon ~~2016~~a ~~Extended~~quarterly ~~Term~~basis ~~Loans~~for ~~and~~the ~~$117.4~~first ~~million~~six ofand ~~the~~three-quarter ~~2016~~years ~~Tranche~~after Bthe ~~Term~~closing ~~Loans.~~date ~~The 2016~~of ~~Extended~~the ~~Term~~merger ~~Loans~~in ~~bear~~March ~~interest~~2006, atwith athe ~~rate~~balance ~~equal~~payable toat ~~LIBOR~~maturity, ~~plus~~and ~~4.00%.~~(2) a ~~That~~six-year revolving ~~rate~~credit ~~was~~facility ~~4.25%~~that aspermits ofloans ~~October 31,~~in ~~2012.~~an ~~The~~aggregate ~~2016~~amount ~~Tranche~~of Bup ~~Term~~to ~~Loans~~$75.0 ~~bear~~million, ~~interest~~which atincludes a ~~rate~~letter ~~equal~~of tocredit ~~LIBOR~~facility ~~plus~~and ~~4.00%~~a ~~with~~swing aline 1facility.~~00%~~ ~~LIBOR~~In ~~floor.~~addition, ~~That~~subject ~~rate~~to ~~was 5.00%~~certain asterms ofand ~~October 31~~conditions, ~~2012.~~the ~~The~~senior ~~Extended~~secured ~~Revolving~~credit agreement ~~Credit~~provides ~~Commitments,~~for ofone ~~which~~or ~~none~~more ~~was~~uncommitted ~~outstanding~~incremental asterm ofloan ~~October 31,~~or ~~2012,~~revolving ~~bear~~credit ~~interest~~facilities atin aan ~~rate~~aggregate ~~equal~~amount not to ~~three-month~~exceed ~~LIBOR~~$150.0 ~~plus 3~~million.~~75%.~~

~~The~~On March 2, 2011, we entered into an amendment to our Credit Facility ~~bears~~to anextend ~~annual~~the ~~commitment~~final ~~fee~~maturity ondate for the ~~undrawn~~repayment of a portion of ~~that~~outstanding ~~facility~~term ~~commencing~~loans, onextend the commitment termination date of ~~execution~~the ~~and~~commitments ~~delivery~~for a portion of the ~~senior secured~~revolving credit ~~agreement~~facility and provide for additional flexibility in the financial covenants under the Credit Facility (the “First Amend and Extend Transaction”). As a result of the ~~cancellation~~amendment, $191.1 million of the ~~non-~~existing term loans were extended ~~2012~~and ~~revolving~~will ~~credit~~mature ~~commitment~~on ~~totaling~~March 10, 2016 (the “2016 Extended Term Loans”), and $5520.0 million ~~during~~of the ~~quarter~~existing ~~ended~~revolving ~~October~~credit commitments were extended and will terminate on March 3110, ~~2011,~~2015 (the ~~annual~~“Extended ~~commitment~~Revolving ~~fee~~Credit Commitments”). The maturity date of the 2016 Extended Term Loans is ~~limited~~subject to a springing maturity date that is the ~~undrawn~~180th ~~portion~~day prior to March 10, 2016 if any of the senior ~~Extended~~subordinated ~~Revolving~~notes ~~Credit~~remain ~~Commitments,~~outstanding ~~which~~as ~~was~~of ~~equal~~the tospringing maturity date. The $20124.09 million asof the existing term loans that were not extended (the “2013 Term Loans”), and the $55.0 million of ~~October~~the existing revolving credit commitments that were not extended, would continue to mature on March 3110, 2013 and March 10, 2012, respectively. ~~Effective~~As ~~February~~a result of the amendment, the interest rate margins were increased by 200 basis points for the extended facilities. In addition, the maximum total leverage ratio stepped up to 5.50x beginning with the fiscal quarter ended April 130, 2011 and through the test periods ended on July 31, 2012 and stepped down to 5.00x thereafter for both the ~~annual~~extended ~~commitment~~facilities ~~fee~~and non-extended isfacilities. 0After giving effect to the amendment, the aggregate principal amount outstanding under the senior secured credit agreement did not change, and the principal amount of the term loans would continue to amortize at a rate of 1.~~375~~00% per ~~annum~~year on a quarterly basis.

~~All~~22 ~~of our obligations under the Credit Facility are secured by:~~

• a perfected lien on and pledge of (1) the capital stock and intercompany notes of each existing and future direct and indirect domestic subsidiary of the company, (2) all the intercompany notes of the company and (3) 65% of the capital stock of each existing and future direct and indirect first-tier foreign subsidiary of the company, and

• a perfected first priority lien, subject to agreed-upon exceptions, on, and security interest in, substantially all of the tangible and intangible properties and assets of the company and each guarantor.

On April 12, 2012, we entered into an Extension Agreement and Amendment No. 1 (the “Second Amend and Extend Transaction”) to our Credit Facility to extend the final maturity date of the 2013 Term Loans that were not extended in the First Amend and Extend Transaction. As a result of the Second Amend and Extend Transaction, $117.4 million of the 2013 Term Loans were extended through a combination of the establishment of a new series of term loans and borrowing of incremental term loans under the Credit Facility. In connection with the Second Amend and Extend Transaction, certain holders of 2013 Term Loans that did not elect to extend their loans were repaid and replaced with new lenders, and certain holders had their holdings reallocated. We refer to the incremental term loans, which have identical terms and will be deemed for all purposes under the senior secured credit agreement to be the same class of loans, and the newly extended term loans as the “2016 Tranche B Term Loans.” The 2016 Tranche B Term Loans have an applicable margin for London Interbank Offered Rate, or LIBOR, -based loans of 4.0% (or, if we exceed a specified leverage ratio, 4.25%) (which was 200 basis points higher than the interest rate under the 2013 Term Loans) and a LIBOR floor of 1.0%. The other terms and conditions of the 2016 Tranche B Term Loans are the same as those for the 2016 Extended Term Loans. After giving effect to the Second Amend and Extend Transaction and the repayment of the remaining 2013 Term Loans, all of our outstanding term loans under the Credit Facility have a final maturity date of March 10, 2016, the principal amount of all term loans will continue to amortize at a rate of 1.00% per year on a quarterly basis, and the aggregate principal amount of the term loans outstanding under the Credit Facility did not change. We paid each lender holding 2016 Tranche B Term Loans an original issue discount equal to 1.5% of the principal amount of 2016 Tranche B Term Loans held by such lender.

As of October 31, 2012, the aggregate principal amount outstanding under our Credit Facility was $308.5 million, which consisted of $191.1 million of 2016 Extended Term Loans and $117.4 million of the 2016 Tranche B Term Loans. The 2016 Extended Term Loans bear interest at a rate equal to LIBOR plus 4.00%. That rate was 4.20% as of April 30, 2013. The 2016 Tranche B Term Loans bear interest at a rate equal to LIBOR plus 4.00% with a 1.00% LIBOR floor. That rate was 5.00% as of April 30, 2013. The Extended Revolving Credit Commitments, of which none was outstanding as of April 30, 2013, bear interest at a rate equal to three-month LIBOR plus 3.75%.

The Credit Facility bears an annual commitment fee on the undrawn portion of that facility commencing on the date of execution and delivery of the senior secured credit agreement. As a result of the cancellation of the non-extended 2012 revolving credit commitment totaling $55.0 million during the quarter ended October 31, 2011, the annual commitment fee is limited to the undrawn portion of the Extended Revolving Credit Commitments, which was equal to $20.0 million as of April 30, 2013. Effective February 1, 2011, the annual commitment fee is 0.375% per annum.

All of our obligations under the Credit Facility are secured by:

•

a perfected lien on and pledge of (1) the capital stock and intercompany notes of each existing and future direct and indirect domestic subsidiary of the Company, (2) all the intercompany notes of the Company and (3) 65% of the capital stock of each existing and future direct and indirect first-tier foreign subsidiary of the Company, and

•

a perfected first priority lien, subject to agreed-upon exceptions, on, and security interest in, substantially all of the tangible and intangible properties and assets of the Company and each guarantor.

Senior Subordinated Notes

We have outstanding $~~126~~101.5 million principal amount of senior subordinated notes as of ~~October~~April 3130, ~~2012~~2013, which bear interest at a rate of 10.375%, payable semi-annually on March 15 and September 15, and which mature on March 15, 2016. Each of our domestic subsidiaries that guarantees our obligations under our Credit Facility will jointly, severally and unconditionally guarantee the notes on an unsecured senior subordinated basis. We do not have any domestic subsidiaries and, accordingly, there are no guarantors. The notes are our unsecured, senior subordinated obligations, and the guarantees, if any, will be unsecured, senior subordinated obligations of the guarantors. The notes are governed by the terms and conditions of an indenture dated March 10, 2006 (“Indenture”). The notes are subject to redemption at our option pursuant to the terms and conditions specified in the Indenture, and may be redeemed at the option of the holders at 101% of their face amount, plus accrued and unpaid interest, upon certain change of control events. We may from time to time repurchase the senior subordinated notes in open market or privately negotiated purchases or redeem the senior subordinated notes pursuant to the terms of the Indenture.

~~During~~23 the nine months ended October 31, 2012, we repurchased $7.7 million of senior subordinated notes for a total cost of $7.9 million, resulting in a loss on early extinguishment of $0.2 million. On November 2, 2012, we redeemed $25.0 million of aggregate principal of the senior subordinated notes at a redemption price equal to 103.458% of the principal amount in accordance with the terms of our optional redemption right under the Indenture. The total consideration was $25.8 million, which will result in a loss on early extinguishment of $0.8 million during the quarter ending January 31, 2013. We may from time to time repurchase the senior subordinated notes in open market or privately negotiated purchases or redeem the senior subordinated notes pursuant to the terms of the Indenture.

Covenant Compliance

Our Credit Facility and the Indenture contain various covenants that limit our ability to engage in specified types of transactions. These covenants limit our and our restricted subsidiaries’ ability to, among other things:

•

incur additional indebtedness or issue certain preferred shares;

•

pay dividends on, redeem or repurchase our capital stock or make other restricted payments;

•

make investments;

•

make capital expenditures;

•

create certain liens;

•

sell certain assets;

•

enter into agreements that restrict the ability of our subsidiaries to make dividend or other payments to us;

•

guarantee indebtedness;

•

engage in transactions with affiliates;

•

prepay, repurchase or redeem the notes;

•

create or designate unrestricted subsidiaries; and

•

consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.

We24 are required to satisfy and maintain specified financial ratios and other financial condition tests under the Credit Facility and Indenture as described below. We were in compliance with all of the covenants under the Credit Facility and Indenture as of October 31, 2012. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will meet those ratios and tests in the future. A breach of any of these covenants would result in a default (which, if not cured, could mature into an event of default) and in certain cases an immediate event of default under our Credit Facility. Upon the occurrence of an event of default under our Credit Facility, all amounts outstanding under our Credit Facility could be declared to be (or could automatically become) immediately due and payable and all commitments to extend further credit could be terminated.

~~Under~~We ~~the~~are ~~Indenture,~~required ~~our ability~~ to ~~incur~~satisfy ~~additional debt~~ and ~~make~~maintain ~~certain restricted payments, subject to~~ specified ~~exceptions,~~financial isratios ~~tied~~and toother anfinancial ~~Adjusted~~condition ~~EBITDA~~tests, including ~~(as~~a ~~defined~~minimum ~~below)~~interest tocoverage ~~fixed~~ratio ~~charges~~and ~~(as~~a ~~defined~~maximum ~~below)~~total ~~ratio~~leverage ~~of at least 2~~ratio.~~0x.~~ We ~~may~~were ~~incur~~in ~~certain~~compliance ~~debt~~with ~~and~~all ~~make~~of ~~certain~~the ~~restricted~~covenants ~~payments~~under ~~and~~the ~~certain~~Credit ~~permitted~~Facility ~~investments~~and ~~without~~Indenture ~~regard~~as toof ~~the ratio~~April 30, ~~such~~2013. asOur ~~our~~ ability to ~~incur~~meet upthose tofinancial anratios ~~aggregate~~and ~~principal~~tests can ~~amount~~be ofaffected ~~$625.0 million~~by ~~under~~events beyond our ~~senior~~control, ~~secured~~and ~~credit~~we ~~agreement~~cannot ~~(subject~~assure toyou ~~reduction~~that ~~for~~we ~~mandatory~~will ~~prepayments~~meet ~~under~~those ~~our~~ratios ~~senior secured credit agreement~~ and ~~inclusive~~tests ~~of amounts~~in ~~outstanding~~the ~~under~~future. ~~our~~A ~~senior~~breach ~~secured~~of ~~credit~~any ~~agreement~~of ~~from~~these ~~time~~covenants towould ~~time;~~result asin ofa ~~October 31,~~default ~~2012~~(which, weif ~~had~~not ~~$308.5~~cured, ~~million~~could ~~outstanding~~mature ~~under~~into ~~our~~an ~~term~~event ~~loan~~of default) and ~~none~~in ~~outstanding~~certain ~~under~~cases ~~our~~an ~~revolving~~immediate ~~credit~~event ~~facility),~~of todefault ~~acquire~~under ~~persons~~the ~~engaged in~~Credit aFacility. ~~similar~~Upon ~~business~~the ~~that~~occurrence ~~become~~of ~~restricted~~an ~~subsidiaries~~event ~~and~~of todefault ~~make~~under ~~other investments equal to~~ the ~~greater~~Credit ofFacility, ~~$25.0~~all ~~million~~amounts oroutstanding 2%under ofthe ~~our~~Credit ~~consolidated~~Facility ~~assets.~~could ~~“Fixed~~be ~~charges”~~declared isto ~~defined~~be in(or ~~the~~could ~~Indenture~~automatically become) asimmediately ~~consolidated~~due ~~Interest~~and ~~Expense less~~payable ~~interest~~and ~~income,~~all ~~adjusted~~commitments ~~for~~to ~~acquisitions,~~extend ~~and~~ further ~~adjusted~~credit ~~for~~could ~~non-cash~~be ~~interest expense~~terminated.

Under the ~~Credit Facility~~Indenture, weour ~~are required~~ability to incur ~~maintain~~additional adebt ~~rolling~~and ~~twelve-month~~make ~~consolidated~~certain ~~Adjusted~~restricted ~~EBITDA~~payments, subject to ~~consolidated~~specified ~~Interest~~exceptions, ~~Expense~~is tied to an “Adjusted EBITDA” (as defined below) ~~ratio~~to ~~of a minimum of 2.00x at the end of each quarter.~~ “~~Consolidated~~fixed ~~Interest Expense~~charges” is(as defined inbelow) ~~the~~ratio ~~senior secured~~of ~~credit~~at ~~agreement~~least as2.0x. ~~consolidated~~We ~~cash~~may ~~interest~~incur ~~expense~~certain debt ~~less cash interest income~~ and ismake ~~further adjusted for~~ certain ~~non-cash~~restricted ~~interest~~payments ~~expenses~~ and ~~other~~certain ~~items.~~permitted Weinvestments ~~are~~without ~~also~~regard ~~required~~ to ~~maintain~~the aratio, ~~rolling~~such ~~twelve-month consolidated Total Debt (~~as ~~defined~~our ~~below)~~ability to ~~consolidated~~incur ~~Adjusted~~up ~~EBITDA~~to ~~ratio~~an ofaggregate aprincipal ~~maximum~~amount of 5$625.~~00x~~0 million atunder ~~the~~our ~~end~~senior ofsecured ~~each~~credit ~~quarter~~agreement ~~beginning~~(subject ~~with~~to reduction ~~the~~for ~~fiscal~~mandatory ~~year~~prepayments ~~ending~~under ~~January 31,~~our ~~2011. Under the terms of the~~ senior secured credit agreement, ~~as amended~~ and ~~restated, the~~inclusive ~~maximum~~of ~~total~~amounts ~~leverage~~outstanding ~~ratio~~under ~~stepped~~our upsenior tosecured ~~5.50x~~credit ~~beginning~~agreement ~~with~~from ~~the~~time ~~fiscal~~to ~~quarter~~time); ~~ending~~to ~~April 30,~~acquire ~~2011~~persons ~~through~~engaged ~~the~~in ~~test~~a ~~period~~similar ~~ended~~business ~~July 31,~~that ~~2012~~become restricted subsidiaries and ~~stepped down~~ to ~~5.00x~~make ~~thereafter.~~other ~~“Consolidated~~investments ~~Total~~equal ~~Debt”~~to ~~is defined in~~ the ~~senior~~greater ~~secured~~of ~~credit~~$25.0 ~~agreement~~million asor ~~total~~2% ~~debt~~of ~~other~~our ~~than~~consolidated ~~certain~~assets. ~~indebtedness~~As ~~and~~of isApril 30, ~~reduced~~2013, bywe ~~the~~had ~~amount~~$308.5 ofmillion ~~cash~~outstanding ~~and~~under ~~cash equivalents on~~ our ~~consolidated~~term ~~balance~~loan ~~sheet~~and inno ~~excess~~money ofoutstanding ~~$5.0~~under ~~million. As of October 31, 2012,~~ our ~~consolidated~~revolving credit ~~Total~~facility. ~~Debt~~“Fixed ~~was~~charges” ~~$345.5~~is ~~million,~~defined ~~consisting~~in ofthe ~~total~~Indenture ~~debt~~as ~~other~~consolidated ~~than~~Interest ~~certain~~Expense ~~indebtedness~~less ~~totaling~~interest ~~$435.0 million~~income, ~~net~~adjusted offor ~~cash~~acquisitions, and ~~cash~~further ~~equivalents~~adjusted infor ~~excess~~non-cash ofinterest $5expense.0 ~~million totaling $89.6 million.~~

Under the Credit Facility, we are required to maintain a rolling twelve-month consolidated Adjusted EBITDA to “Consolidated Interest Expense” (as defined below) ratio of a minimum of 2.00x at the end of each quarter. “Consolidated Interest Expense” is defined in the senior secured credit agreement as consolidated cash interest expense less cash interest income and is further adjusted for certain non-cash interest expenses and other items. We are also required to maintain a rolling twelve-month “Consolidated Total Debt” (as defined below) to consolidated Adjusted EBITDA ratio of a maximum of 5.00x at the end of each quarter beginning with the fiscal year ending January 31, 2011. Under the terms of the senior secured credit agreement, as amended and restated, the maximum total leverage ratio stepped up to 5.50x beginning with the fiscal quarter ending April 30, 2011 through the test period ended July 31, 2012 and stepped down to 5.00x thereafter. “Consolidated Total Debt” is defined in the senior secured credit agreement as total debt other than certain indebtedness and is reduced by the amount of cash and cash equivalents on our consolidated balance sheet in excess of $5.0 million. As of April 30, 2013, our Consolidated Total Debt was $311.3 million, consisting of total debt other than certain indebtedness totaling $410.0 million, net of cash and cash equivalents in excess of $5.0 million totaling $98.7 million.

The breach of financial covenants in our Credit Facility (i.e., those that require the maintenance of ratios based on Adjusted EBITDA) would force us to seek a waiver or amendment with the lenders under our Credit Facility, and no assurance can be given that we will be able to obtain any necessary waivers or amendments on satisfactory terms, if at all. The lenders would likely condition any waiver or amendment, if given, on additional consideration from us, such as a consent fee, a higher interest rate, principal repayment or more restrictive covenants and limitations on our business. Any such breach, if not waived by the lenders, would result in an event of default under that agreement, in which case the lenders could elect to declare all amounts borrowed due and payable. Any such acceleration would also result in a default under the Indenture. Additionally, under our debt agreements, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is also tied to ratios based on Adjusted EBITDA.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is a non-GAAP financial measure used to determine our compliance with certain covenants contained in our Credit Facility. “Adjusted EBITDA” represents EBITDA further adjusted to exclude certain defined unusual items and other adjustments permitted in calculating covenant compliance under our Credit Facility. We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors and lenders regarding our compliance with the financial covenants under our Credit Facility.

Adjusted EBITDA does not represent net income (loss) or cash flow from operations as those terms are defined by GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. While Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. Adjusted EBITDA does not reflect the impact of earnings or charges resulting from matters that we may consider not to be indicative of our ongoing operations. In particular, the definition of Adjusted EBITDA in our Credit Facility allows us to add back certain defined non-cash, extraordinary, unusual or non-recurring charges that are deducted in calculating GAAP net income (loss). Our Credit Facility requires that Adjusted EBITDA be calculated for the most recent four fiscal quarters. As a result, Adjusted EBITDA can be disproportionately affected by a particularly strong or weak quarter and may not be comparable to Adjusted EBITDA for any subsequent four-quarter period or any complete fiscal year.

2025

The following is a reconciliation of net income, a GAAP measure of our operating results, to Adjusted EBITDA as defined in our debt agreements (in thousands):

	Three Months Ended October 31,						Nine Months Ended October 31,
	Three Months Ended April 30,
	2012			2011			2012			2011
	2013			2012
Net income	$	4,143		$	3,202		$	707		$	2,906
Net loss	$	(1,237	)	$	(3,113	)
Non-operating expense, net (1)		76,~~292~~467			67,~~796~~693			~~22,591~~			~~21,604~~
Income tax (benefit) provision		(2,136	)		952			(2,973	)		492
Income tax benefit		(6,612	)		(914	)
Amortization expense (2)		9,~~077~~604			9,~~219~~183			~~27,336~~			~~31,271~~
Stock-based compensation		~~379~~507			~~396~~484			~~1,388~~			~~888~~
Restructuring, acquisition and other charges(3)		1,265			662			3,274			2,331
Restructuring, acquisition and other charges (3)		3,608			392
Sub-total		2012,~~020~~337			2113,~~227~~725			~~52,323~~			~~59,492~~
Depreciation (2)		~~646~~459			~~734~~632			~~1,953~~			~~2,171~~
Adjusted EBITDA	$	2012,~~666~~796		$	2114,~~961~~357		$	~~54,276~~		$	~~61,663~~

(1)	Non-operating expense, net includes interest income, interest expense including amortization of debt issuance costs, and amend and extend transaction fees.

(2)	Depreciation and amortization expense includes depreciation of fixed assets and amortization of intangibles.

(3)

Restructuring, acquisition, and other charges include charges related to restructuring plans; acquisitions-related costs; and other charges including sponsor and administration fees, costs related to issuance of debt, and severance, facility and other charges that are not part of restructuring and not part of ongoing operations.

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

Our exposures to market risk have not changed materially since January 31, ~~2012~~2013. For quantitative and qualitative disclosures about market risk, see Part II, Item 7A Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2012~~2013.

ITEM 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer, and Acting Chief Financial Officer, with the assistance of senior management personnel, have conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)) as of ~~October~~April 3130, ~~2012~~2013. We perform this evaluation on a quarterly basis so that the conclusions concerning the effectiveness of our disclosure controls and procedures can be reported in our annual and quarterly reports filed under the Exchange Act. Based on this evaluation, and subject to the limitations described below, our Chief Executive Officer, and Acting Chief Financial ~~Officer~~ Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~October~~April 3130, ~~2012~~2013.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended ~~October~~April 3130, ~~2012~~2013 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

21Limitations on Effectiveness of Controls. Our management, including our Chief Executive Officer, and Acting Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can only provide reasonable, not absolute, assurances that the objectives of the control system are met. The design of a control system reflects resource constraints, and the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of error or fraud, if any, have been or will be detected.

Limitations on Effectiveness of Controls. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can only provide reasonable, not absolute, assurances that the objectives of the control system are met. The design of a control system reflects resource constraints, and the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of error or fraud, if any, have been or will be detected.

PART II—OTHER INFORMATION

ITEM 1.

Legal Proceedings

Information with respect to this Item may be found in Note 89 of notes to our unaudited condensed consolidated financial statements in Part I, Item I of this ~~quarterly report~~Report, which information is incorporated into this Item 1 by reference.

ITEM 1A.

Risk Factors

~~There~~In ~~have~~addition ~~been~~to ~~no material~~the ~~changes~~information ~~from~~in this Report, you should carefully consider the ~~risk~~risks factors ~~associated~~relating ~~with~~to our business, financial condition and results of operations as set forth in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2012~~2013. This section supplements and updates those Risk Factors.

We may not achieve the results expected from our restructuring plans, which could have a material adverse effect on our business, operating results and financial condition.

In June 2013, our board of directors approved a plan to focus our strategy on our key product lines and restructure the Company. We intend to focus our Go-To-Market strategy on our core mainframe and distributed system products and release management product line, and streamline and simplify our organizational structure. In order to deliver on this strategy, we initiated the June 2013 Restructuring Plan to eliminate certain management layers and reduce redundant personnel across the company. We expect this plan to involve significant transitions as we eliminate approximately 137 employees and contractors, and to incur significant restructuring charges as we implement these activities. In addition, in February 2013, we implemented a separate restructuring plan that reduced our workforce by approximately 8% and affected all parts of the organization, including facility closures in the North America and Europe regions. These changes to our business may be disruptive and may negatively impact sales of software licenses, particularly in the quarter ending July 31, 2013, and our restructured operations may not be more efficient or effective than our current business. Any decision to limit investment in any products may result in the recording of additional charges, such as technology-related write-offs, or claims from third parties who were resellers or users of discontinued products. Further, any estimates relating to liabilities for excess facilities are affected by changes in real estate market conditions. Our restructuring activities, including any related charges and headcount reductions, could have a material adverse effect on our business, operating results and financial condition.

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

~~Effective~~During asthe ofquarter ~~September~~ended April 1830, ~~2012~~2013, aour ~~total~~current ofemployees ~~495~~exercised 13,~~000~~167 options in exchange for common shares for an aggregate exercise price of ~~our~~$32,918. ~~common~~The ~~stock~~options were ~~issuable~~effected tothrough ~~officers~~a combination of cash and ~~employees~~net exercises, with 6,584 shares applied to the payment of the ~~company~~exercise asprices, a2,889 ~~result~~shares ofapplied to the ~~vesting~~payment of ~~restricted~~applicable ~~stock~~tax ~~units~~and ~~in accordance~~withholding ~~with~~obligations ~~the~~and ~~terms~~3,694 ofshares ~~restricted~~issued ~~stock~~to ~~unit~~the ~~agreements~~employees. ~~dated~~In asaddition, a total of ~~September 18~~100,000 ~~2009.~~shares ~~All~~of ~~officers~~our ~~and~~common ~~employees~~stock ~~with~~were issuable to an employee as a result of the vesting of restricted stock units. The employee paid ~~their~~the respective tax and ~~withholding~~withholdings ~~obligations~~ through the net issuance of shares,. ~~with~~A ~~186~~total of 39,~~336~~234 shares of common stock were applied to the payment of applicable tax and withholding obligations and ~~308~~60,~~664~~766 shares of common stock were issued to the ~~officers and employees in the aggregate~~employee. No consideration was furnished by ~~such officers~~the ~~and~~employee ~~employees~~ in exchange for the shares of common stock. The shares of our common stock were issued under an exemption from registration requirements pursuant to Rule 701 of the Securities Act of 1933, as amended, which provides an exemption for offers and sales of securities pursuant to certain compensatory benefit plans.

~~ITEM~~The 3.shares ~~Defaults~~of ~~Upon~~our ~~Senior~~common stock were issued under an exemption from registration requirements pursuant to Rule 701, adopted pursuant to Section 3(b) of the Securities Act of 1933, as amended, which provides an exemption for offers and sales of securities pursuant to certain compensatory benefit plans.

Not Applicable

ITEM 4. Mine Safety Disclosures

Not Applicable

ITEM 5.

Other Information

~~Not~~In ~~Applicable~~June 2013, our board of directors approved the June 2013 Restructuring Plan, to eliminate certain management layers and reduce redundant personnel across the Company. We expect to eliminate approximately 137 employees and contractors, and estimate these restructuring charges related to severance, payroll taxes and employee benefits to be within a range of $4.1 million to $4.6 million. The June 2013 Restructuring Plan is expected to be completed in fiscal year 2014, with payments substantially made in the same fiscal year.

ITEM 6.

Exhibits

See Exhibit Index on the page immediately preceding the exhibits for a list of exhibits filed as part of this ~~Quarterly~~ Report ~~on Form 10-Q~~, which Exhibit Index is incorporated herein by reference.

2427

SIGNATURES

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

SERENA SOFTWARE, INC. By: /s/ ~~Joseph~~Edward ~~Passarello~~Malysz ~~Joseph~~Edward ~~Passarello~~Malysz Senior Vice President, ~~Finance~~General Counsel and Secretary, and Acting Chief Financial Officer (Principal Financial and Accounting Officer)

Date: ~~December~~June 1410, ~~2012~~2013

2528

EXHIBIT INDEX

10.1*		~~First~~FY ~~Amendment~~2014 Executive Annual Incentive Plan (incorporated by reference to ~~Amended~~Exhibit ~~and~~10.35 ~~Restated~~to ~~2006~~the ~~Stock~~registrant’s ~~Incentive~~Annual ~~Plan~~Report on Form 10-K (File No. 000-25285) filed by the registrant with the SEC on March 29, 2013)
10.2*		Form of ~~First~~Restricted ~~Amendment~~Stock toUnit ~~Time~~Agreement ~~and~~(Retention ~~Performance~~Award) ~~Option Grant Notice~~ under Amended and Restated 2006 Stock Incentive Plan (FYincorporated ~~2010~~by ~~Awards~~reference to Exhibit 10.01 to the registrant’s Current Report on Form 8-K (File No. 000-25285) filed by the registrant with the SEC on March 21, 2013)
10.3*		Form of ~~First~~Change ~~Amendment~~in toControl ~~Time~~Agreement between Serena Software, Inc. and ~~Performance~~Greg ~~Option~~Hughes ~~Grant~~(incorporated ~~Notice~~by ~~under~~reference ~~Amended~~to ~~and~~Exhibit ~~Restated~~10.06 ~~2006~~to ~~Stock~~the ~~Incentive~~registrant’s ~~Plan~~Current Report on Form 8-K (FYFile ~~2011~~No. ~~Awards~~000-25285) filed by the registrant with the SEC on May 7, 2013)
10.4*		~~Form~~Employment ofOffer ~~First~~Letter ~~Amendment~~between toSerena ~~Time~~Software, Inc. and ~~Performance~~Greg ~~Option~~Hughes, ~~Grant~~dated ~~Notice~~May ~~under~~1, ~~Amended~~2013 ~~and~~(incorporated ~~Restated~~by ~~2006~~reference ~~Stock~~to ~~Incentive~~Exhibit ~~Plan~~10.07 to the registrant’s Current Report on Form 8-K (FYFile ~~2012~~No. ~~Awards~~000-25285) filed by the registrant with the SEC on May 7, 2013)
10.5*		~~Form~~Agreement ofand ~~First~~Release ~~Amendment~~between toSerena ~~Time~~Software, Inc. and ~~Performance~~Joseph ~~Option~~Passarello, ~~Grant~~dated ~~Notice~~May ~~under~~1, ~~Amended~~2013 ~~and~~(incorporated ~~Restated~~by ~~2006~~reference ~~Stock~~to ~~Incentive~~Exhibit ~~Plan~~10.08 to the registrant’s Current Report on Form 8-K (FYFile ~~2013~~No. ~~Awards~~000-25285) filed by the registrant with the SEC on May 7, 2013)
10.6*		Form of Time and Performance Option Agreement under Amended and Restated 2006 Stock Incentive Plan
10.7*		Form of First Amendment to Restricted Stock Unit Agreement under Amended and Restated 2006 Stock Incentive Plan
10.8*		Form of Restricted Stock Unit Agreement under Amended and Restated 2006 Stock Incentive Plan
31.01†		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02†		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01‡		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.02‡		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101††		The following financial information from Serena Software, Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended ~~October~~April 3130, ~~2012~~2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of ~~October~~April 3130, ~~2012~~2013 (Unaudited) and January 31, ~~2012~~2013, (ii) Condensed Consolidated Statements of Operations (Unaudited) for the three ~~and six~~ months ended ~~October~~April 3130, ~~2012~~2013 and ~~2011~~2012, (iii) Condensed Consolidated Statements of Cash Flows (Unaudited) for the three ~~and six~~ months ended ~~October~~April 3130, ~~2012~~2013 and ~~2011~~2012 and (iv) the Notes to Condensed Consolidated Financial Statements (Unaudited)

* Indicates a management contract or compensatory plan or arrangement. ~~Exhibit is incorporated by reference to the corresponding exhibit to the registrant’s quarterly report on Form 8-K (File No. 000-25285), filed by the registrant with the SEC on October 12, 2012.~~

†	Exhibit is filed herewith.

‡	Exhibit is furnished rather than filed, and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

††

The information in these exhibits is furnished and deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and is not subject to liability under these sections, in accordance with Rule 406T of Regulation S-T.

2629

Large accelerated filer

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Non-accelerated filer

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Smaller reporting company

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