Deltek (PROJ) 8-K/A Unaudited Pro Forma Condensed Consolidated Financial Statements

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma condensed consolidated financial data set forth below gives effect to the acquisition of Maconomy A/S (“Maconomy”) by Deltek, Inc. (“Deltek” or the “Company”) by the application of the pro forma adjustments to the historical consolidated financial statements of the Company. Such unaudited pro forma financial information is based on the historical financial statements of the Company and Maconomy and certain adjustments which the Company believes to be reasonable based on current available information, to give effect to this transaction, which are described in the notes to the statements below.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2010 gives effect to the acquisition of Maconomy as if it had occurred on such date. The unaudited pro forma condensed consolidated statements of operations give effect to the acquisition as if it had occurred as of January 1, 2009.

The unaudited pro forma condensed consolidated financial data does not purport to represent what the Company’s results of operations actually would have been if the acquisition of Maconomy had occurred on January 1, 2009 or what such results will be for any future periods or what the consolidated balance sheet would have been if the acquisition had occurred on March 31, 2010. In addition, no adjustments have been made for non-recurring integration related activities or efficiencies that may have been achieved if the acquisition had occurred on January 1, 2009.

The actual results in the periods following the acquisition may differ significantly from that reflected in the unaudited pro forma condensed consolidated financial data for a number of reasons including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma condensed consolidated financial data and the actual amounts and the completion of a final valuation of the acquisition.

The unaudited pro forma condensed consolidated financial data have been prepared giving effect to the acquisition, which is accounted for as a purchase business combination in accordance with the Financial Accounting Standards Board Accounting Standards Codification 805, “Business Combinations.” The unaudited pro forma adjustments are based on management’s preliminary estimates of the values of the tangible and intangible assets and liabilities acquired. As a result, the actual adjustments may differ materially from those presented in the unaudited pro forma statements. A change in the unaudited pro forma adjustments of the purchase price for the acquisition would primarily result in a reallocation affecting the value assigned to tangible and intangible assets. The income statement effect of these changes will depend on the nature and amount of the assets or liabilities adjusted.

The financial information for Deltek has been extracted without adjustment from the Company’s historical audited consolidated statement of operations for the year ended December 31, 2009 contained in the Company’s Annual Report on Form 10-K for the year ended December 31,2009, the unaudited condensed consolidated statement of operations for the three months ended March 31, 2010 and the unaudited condensed consolidated balance sheet at March 31, 2010 contained in the Company’s Quarterly Report on Form 10-Q.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The financial information of Maconomy has been extracted from the historical financial statements of Maconomy which were prepared in Danish Krone (DKK) and prepared in accordance with International Financial Reporting Standards as adopted by the IASB (IFRS) which is a method of accounting different from accounting principles generally accepted in the United States of America (U.S. GAAP).

Unaudited adjustments have been made to present the Maconomy IFRS information under U.S. GAAP. The basis for these adjustments is explained in the notes to the unaudited pro forma condensed consolidated financial statements. After application of U.S. GAAP adjustments, the DKK amounts have been translated to U.S. Dollars using the following exchange rates:

		DKK/$
Year ended December 31, 2009	Average Spot Rate	0.18729
Three months ended March 31, 2010	Average Spot Rate	0.18612
March 31, 2010	Period End Rate	0.18080

This information should be read in conjunction with the accompanying notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements, Deltek’s historical financial statements and accompanying notes in both our Annual Report on Form 10-K for the Year Ended December 31, 3009 and our Quarterly Report on Form 10-Q for the Three Months ended March 31, 2010, and Maconomy’s historical financial statements and the accompanying notes that are included in this Current Report on Form 8-K/A.

Deltek, Inc.

Unaudited Pro forma Consolidated Statement of Operations

For the Year Ended December 31, 2009

(in thousands, except per share data)

				Pro Forma Adjustments
	Deltek, Inc.			Maconomy A/S IFRS (in DKK) Note 3			Maconomy A/S IFRS (in $)			Adjustments			Note	Pro forma Combined ($)
REVENUES:
Software license fees	$	58,907		kr	52,654		$	9,862		$	(2,726	)	4 a) 1 & 2	$	66,043
Consulting Services		77,807			85,510			16,015			(1,048	)	4 a) 1		92,774
Maintenance and support services		125,545			80,260			15,032			341		4 a) 1 & 2		140,918
Other revenues		3,562			1,657			310			—				3,872
Total revenue		265,821			220,081			41,219			(3,433	)			303,607
COST OF REVENUES:
Cost of software license fees		5,873			8,902			1,667			2,526		6 a & e		10,066
Cost of consulting services		65,833			67,983			12,733			566		6 d		79,132
Cost of maintenance and support services		22,463			10,329			1,935			67		6 d		24,465
Cost of other revenues		4,717			1,945			364			—				5,081
Total cost of revenues		98,886			89,159			16,699			3,159				118,744
GROSS PROFIT		166,935			130,922			24,520			(6,592	)			184,863
OPERATING EXPENSES:
Research and development		43,486			30,863			5,780			3,782		4 b & 6 d		53,048
Sales and marketing		44,784			52,144			9,766			6,703		6 a & d		61,253
General and administrative expenses		35,494			36,510			6,838			4		6 d		42,336
Restructuring charge		3,866			—			—			—				3,866
Total operating expenses		127,630			119,517			22,384			10,489				160,503
INCOME FROM OPERATIONS		39,305			11,405			2,136			(17,081	)			24,360
Interest income		46			546			102			(45	)	6 c		103
Interest expense		(7,603	)		(117	)		(22	)		—				(7,625	)
Other income, net		43			662			124			—				167
INCOME BEFORE INCOME TAXES		31,791			12,496			2,340			(17,126	)			17,005
Income tax expense (benefit)		10,395			(9,560	)		(1,791	)		(4,459	)	6 f		4,145
NET INCOME	$	21,396		kr	22,056		$	4,131		$	(12,667	)		$	12,860
EARNINGS PER SHARE
Basic	$	0.38												$	0.20
Diluted	$	0.37												$	0.20
COMMON SHARES AND EQUIVALENTS OUTSTANDING
Basic		56,778									6,844		7		63,622
Diluted		57,596									6,844		7		64,440

See notes to unaudited pro forma condensed consolidated financial statements.

Deltek, Inc.

Unaudited Pro forma Condensed Consolidated Statement of Operations

For the Three Months Ended March 31, 2010

(in thousands, except per share data)

				Pro Forma Adjustments
	Deltek, Inc.			Maconomy A/S IFRS (in DKK) Note 3			Maconomy A/S IFRS (in $)			Adjustments			Note	Pro forma Deltek
REVENUES:
Software license fees	$	14,004		kr	12,053		$	2,243		$	(652	)	4 a) 1 & 2	$	15,595
Consulting Services		17,218			23,869			4,443			(39	)	4 a) 1		21,622
Maintenance and support services		32,571			20,559			3,826			203		4 a) 1 & 2		36,600
Other revenues		11			186			35			—				46
Total revenue		63,804			56,667			10,547			(488	)			73,863
COST OF REVENUES:
Cost of software license fees		1,020			2,164			403			421		6 a & e		1,844
Cost of consulting services		14,565			18,840			3,506			127		6 d		18,198
Cost of maintenance and support services		6,114			2,827			526			16		6 d		6,656
Cost of other revenues		18			309			58			—				76
Total cost of revenues		21,717			24,140			4,493			564				26,774
GROSS PROFIT		42,087			32,527			6,054			(1,052	)			47,089
OPERATING EXPENSES:
Research and development		11,103			8,621			1,605			872		4 b & 6 d		13,580
Sales and marketing		11,041			13,698			2,549			1,406		6 a & d		14,996
General and administrative expenses		9,753			10,052			1,871			(90	)	6 b & d		11,534
Restructuring charge		973			—			—			—				973
Total operating expenses		32,870			32,371			6,025			2,188				41,083
INCOME FROM OPERATIONS		9,217			156			29			(3,240	)			6,006
Interest income		12			91			17			(12	)	6 c		17
Interest expense		(2,706	)		(33	)		(6	)		—				(2,712	)
Other income, net		49			1,723			321			—				370
INCOME BEFORE INCOME TAXES		6,572			1,937			361			(3,252	)			3,681
Income tax expense		2,406			178			34			(782	)	6 f		1,658
NET INCOME	$	4,166		kr	1,759		$	327		$	(2,470	)		$	2,023
EARNINGS PER SHARE
Basic	$	0.06												$	0.03
Diluted	$	0.06												$	0.03
COMMON SHARES AND EQUIVALENTS OUTSTANDING
Basic		64,440											7		64,440
Diluted		65,717											7		65,732

See notes to unaudited pro forma condensed consolidated financial statements.

Deltek, Inc

Unaudited Pro Forma Condensed Consolidated Balance Sheet

At March 31, 2010

(in thousands, except share data)

				Pro Forma Adjustments
	Deltek, Inc.			Maconomy A/S IFRS (in DKK)			Maconomy A/S IFRS (in $)			Adjustments			Note	Pro forma Deltek
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents	$	119,252		kr	52,234		$	9,444		$	(80,912	)	5 a	$	47,784
Accounts receivable, net		39,215			67,238			12,157			—				51,372
Deferred income taxes		2,790			—			—			—				2,790
Prepaid expenses and other current assets		10,828			5,951			1,076			—				11,904
Income taxes receivable		145			—			—			857		5 f		1,002
TOTAL CURRENT ASSETS		172,230			125,423			22,677			(80,055	)			114,852
PROPERTY AND EQUIPMENT, NET		10,630			5,344			966			—				11,596
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET		507			32,653			5,904			(5,904	)	4 b, 5 b		507
LONG TERM DEFERRED INCOME TAXES		7,763			15,727			2,843			71		5g		10,677
INTANGIBLE ASSETS, NET		15,459			12,718			2,299			38,489		5 b		56,247
GOODWILL		70,200			—			—			38,453		5 c		108,653
OTHER ASSETS		3,119			5,064			916			—				4,035
TOTAL ASSETS	$	279,908		kr	196,929		$	35,605		$	(8,946	)		$	306,567
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	30,220		kr	—		$	—		$	—			$	30,220
Accounts payable and accrued expenses		26,592			43,403			7,847			9,441		5 a & e, 6 b		43,880
Accrued liability for redemption of stock in recapitalization		317			—			—			—				317
Deferred revenues		46,579			50,600			9,149			(5,105	)	4 a) 1 & 2, 5 d		50,623
Income taxes payable		—			378			68			(68	)	5f		—
TOTAL CURRENT LIABILITIES		103,708			94,381			17,064			4,268				125,040
LONG TERM DEBT		121,723			—			—			—				121,723
DEFERRED TAX LIABILITY		—			—			—			10,902		5g		10,902
OTHER TAX LIABILITIES		1,898			—			—			—				1,898
OTHER LONG TERM LIABILITIES		4,623			3,898			705			1,231		5 a & e		6,559
TOTAL LIABILITIES		231,952			98,279			17,769			16,401				266,122
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred Stock		—			—			—			—				—
Common stock		67			42,874			7,752			(7,752	)	5 i		67
Class A Common Stock		—			—			—			—				—
Additional paid-in capital		252,987			62,121			11,231			(11,231	)	5 i		252,987
Accumulated deficit		(204,343	)		2,272			411			(7,922	)	4 a) 1 & 2, 5 a & i, 6 b		(211,854	)
Accumulated other comprehensive deficit		(755	)		(8,617	)		(1,558	)		1,558		5 i		(755	)
TOTAL STOCKHOLDERS’ EQUITY		47,956			98,650			17,836			(25,347	)			40,445
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	279,908		kr	196,929		$	35,605		$	(8,946	)		$	306,567

See notes to unaudited pro forma condensed consolidated financial statements.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of transaction

On June 3, 2010, Deltek, Inc. (“Deltek” or the “Company) commenced a tender offer for 100% of the stock of Maconomy A/S (“Maconomy”). Maconomy is an international provider of software solutions and services for professional services firms. On July 6, 2010, having concluded that all of the terms of the tender offer had been satisfied, the Company announced that it would complete the purchase of the tendered shares on July 9, 2010. The tender offer was at an offering price of DKK 20.50 per share or approximately $3.40 per share at June 3, 2010. As of September 21, 2010, the Company owned approximately 98% of the outstanding shares of Maconomy. The Company has initiated a mandatory redemption procedure to acquire all remaining shares of Maconomy for DKK 20.50 per share in accordance with the Danish Companies Act. The Maconomy shares on NASDAQ OMX Copenhagen were delisted as of August 19, 2010.

2. Basis of Presentation

The unaudited pro forma condensed consolidated statements of operations are based on the historical statements of Deltek and Maconomy, after giving effect to the acquisition of Maconomy as if it occurred on January 1, 2009 and for the unaudited condensed consolidated balance sheet on March 31, 2010. The historical consolidated financial information has been adjusted in the accompanying unaudited pro forma condensed consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the transaction, (2) factually supportable and, (3) with respect to the unaudited pro forma condensed consolidated statements of operations, expected to have a continuing impact on the consolidated results and excluding nonrecurring charges directly attributable to the transaction. The financial information of Maconomy was prepared in accordance with International Financial Reporting Standards as adopted by the IASB (IFRS) and in Danish Krone. Adjustments have been made to the Maconomy information to present it in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and in U.S. Dollars.

The unaudited pro forma financial information is not intended to reflect the financial position and results of operations which would have actually resulted had the Maconomy acquisition been effected on the dates indicated above. Further, the pro forma results of operations are not necessarily indicative of the results of operations that may be obtained in the future.

3. Reclassifications

Certain balances were reclassified from the financial statements of Maconomy so their presentation would be consistent with Deltek.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following reclassifications were made to the balance sheet as of March 31, 2010 (in thousands):

	Increase (Decrease)
	(in DKK)			(in $)
Receivable	kr	(762	)	$	(138	)
Prepaid expenses and other current assets		762			138
Property and equipment, net		870			157
Capitalized software development costs, net		32,653			5,904
Intangible assets, net		(33,523	)		(6,061	)
Deposits		(5,064	)		(916	)
Other assets		5,064			916
Accounts payable and accrued expenses		36,559			6,610
Other current liabilities		(35,516	)		(6,421	)
Deferred revenues		957			173
Other long term liabilities		3,000			542
Reserve for earnout		(5,000	)		(904	)
Reserve for currency translation adjustments		8,617			1,558
Accumulated other comprehensive deficit		(8,617	)		(1,558	)

The following reclassifications were made to the income statement for the year ended December 31, 2009 and for the three months ended March 31, 2010 (in thousands):

	Increase (Decrease)
	Year Ended December 31, 2009						Three Months Ended March 31, 2010
	(in DKK)			(in $)			(in DKK)			(in $)
Consulting services	kr	2,890		$	541		kr	520		$	97
Other Revenues		(2,890	)		(541	)		(520	)		(97	)
Software development performed for own account		(17,880	)		(3,349	)		(4,152	)		(773	)
Cost of software license fees		8,902			1,667			2,164			403
Cost of consulting services		67,983			12,734			18,840			3,507
Cost of maintenance and support services		10,329			1,935			2,827			526
Cost of other revenues		1,945			364			309			58
External project costs		(15,519	)		(2,907	)		(3,190	)		(594	)
Research and development		30,863			5,780			8,621			1,605
Sales and marketing		52,144			9,766			13,698			2,549
General and administrative		36,510			6,838			10,052			1,871
Other external expenses		(51,254	)		(9,599	)		(12,761	)		(2,375	)
Employee expenses		(151,128	)		(28,304	)		(42,406	)		(7,893	)
Depreciation and amortization		(8,668	)		(1,623	)		(2,308	)		(430	)
Interest income		(977	)		(183	)		(1,725	)		(320	)
Interest expense		302			57			—			—
Other income, net		662			127			1,723			321

In addition, the financial information of Maconomy has been translated from Danish Krone to U.S. Dollars. The translation of the unaudited pro forma consolidated statement of operations for the year ended December 31, 2009 used an exchange rate of DKK 0.18729/$. The translation of the unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2010 used an exchange rate of DKK 0.18612/$. The translation of the unaudited pro forma condensed consolidated balance sheet at March 31, 2010 used an exchange rate of DKK 0.18080/$.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. U.S. GAAP Adjustments

The following adjustments have been made to align the Maconomy IFRS financial information with Deltek, Inc.’s U.S. GAAP accounting policies.

a) Revenue recognition

Adjustment reflects the following:

1) For software related deliverables in a multiple element arrangement under IFRS, Maconomy followed the substance of arrangement and the overall arrangement economics and allocated the consideration received to separate elements based on their fair values. U.S. GAAP permits the use of the residual method to determine the amount of revenue to allocate and recognize for the delivered element, typically the license element, if vendor-specific objective evidence, or “VSOE”, of fair value exists for the undelivered elements, typically post contract support (“PCS”) and consulting services. If VSOE does not exist for the undelivered elements, deferral of revenues for software license and other undelivered elements are required. It was determined that Maconomy did not have VSOE of fair value for undelivered elements for certain arrangements involving sale of license, PCS and consulting services. The impact of this difference resulted in the following adjustments (in thousands):

	Year Ended December 31, 2009			Three Months Ended March  31, 2010
Software license fees	$	(2,183	)	$	(527	)
Consulting services	$	(1,048	)	$	(39	)
Maintenance and support services	$	(34	)	$	9

The related balance sheet impact for the three months ended March 31, 2010 was an increase to deferred revenue of $3.7 million.

2) U.S. GAAP requires companies to recognize revenue related to support and maintenance services over the period during which those services are expected to be provided. This period would include the implied services period during the implementation of the software which is considered the period between the license delivery date and go-live date, prior to the start of the formal support and maintenance services agreement. Under U.S. GAAP, a portion of software license fees should be allocated to the implied services period and recognized separately. Under IFRS, Maconomy did not attribute any revenue to the implied services period. The impact of this difference resulted in the following adjustments (in thousands):

	Year Ended December 31, 2009			Three Months Ended March  31, 2010
Software license fees	$	(543	)	$	(125	)
Maintenance and support services	$	375		$	194

The related balance sheet impact for the three months ended March 31, 2010 was an increase to deferred revenue of $119,000.

b) Software development costs

Reflects an adjustment to expense the portion of software development costs capitalized under IFRS as these costs have not met the criteria for capitalization under U.S. GAAP, resulting in an increase to “Research and Development” expense of $3.3 million and $773,000 for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively. The impact to the balance sheet as of March 31, 2010 was to decrease capitalized software development costs by $4.0 million.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5. Unaudited Pro Forma Condensed Consolidated Balance Sheet Adjustments

The allocation of the estimated consideration to the identifiable tangible and intangible assets and liabilities assumed based on their estimated fair values as of the acquisition date is summarized in the following table (in thousands):

	Note	Amount
Accounts receivable		$	12,157
Other assets			1,076
Income taxes receivable	f		857
Fixed assets			966
Deferred income taxes	g		2,914
Other noncurrent assets			916
Intangible assets	b		40,788
Goodwill	c		38,453
Accounts payable and accrued expenses	a, e		(7,842	)
Deferred revenue	d		(4,044	)
Deferred tax liability	g		(10,902	)
Other tax liabilities	h		—
Other long term liabilities	a, e		(673	)
Total purchase price	a	$	74,666

Except as noted below, the carrying value of assets and liabilities in Maconomy’s financial statements are considered to be a proxy for the fair value of those assets and liabilities. As this allocation is based on preliminary estimates, additional adjustments to record the fair value of all assets and liabilities and adjustments for consistency of accounting policies to reflect Maconomy under U.S. GAAP may be required.

For purposes of the pro forma analysis, the following adjustments were made to reflect our preliminary estimate of the fair value of the net assets acquired:

a) The total preliminary purchase price for the shares of outstanding common stock of Maconomy is $74.7 million which is summarized in the following table (in thousands):

Cash paid for common stock as of September 21, 2010	$	78,414
Cash paid for common stock issued pursuant to stock options exercised as of September 21, 2010		2,498
Gain on common stock purchased prior to the acquisition		89
Estimated fair value of remaining common stock to be purchased		1,702
Estimated fair value of common stock to be purchased upon future exercises of stock options		1,407
Cash acquired		(9,444	)
Total purchase price	$	74,666

At the March 31, 2010 exchange rate of 0.1808, the Company’s cash expenditure for the 21.2 million shares of outstanding common stock of Maconomy at 20.50 DKK per share totaled $78.4 million. The Company paid approximately $11.1 million prior to the acquisition of Maconomy on July 9, 2010, $65.4 million on July 9, 2010 and $2.0 million in August 2010. For the shares that were purchased prior to the acquisition at a price lower than 20.50 DKK, a gain of $89,000 was recorded to “Accumulated Deficit”.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In addition, the Company paid cash in September 2010 of $2.5 million for the approximately 1.5 million shares of common stock that were issued upon the exercise of vested common stock options of Maconomy at 20.50 DKK per share less the amount the employee paid to exercise the stock options.

The Company will acquire for $1.7 million approximately 0.5 million remaining shares of Maconomy through the mandatory redemption procedure, which is expected to be completed in November 2010. The estimated fair value of the remaining stock to be purchased was determined based on a purchase price of 20.50 DKK per share. This amount is recorded in “Accounts Payable and Accrued Expenses”.

The Company will also acquire for $1.4 million the shares of common stock that will be issued upon the exercise of stock options of Maconomy that will vest in February 2011 and November 2011. The fair value of the purchase of these shares is based on the present value of the purchase price of 20.50 DKK per share less the amount the employee will pay to exercise the stock options. Of this amount, $144,000 is recorded as “Accounts Payable and Accrued Expenses” and $1.3 million is recorded as “Other Long Term Liabilities”.

b) The intangible assets of Maconomy have been increased $38.5 million to a total value of $40.8 million to reflect our preliminary estimate of the fair value of intangible assets, including trade names, technology, maintenance agreements, and customer relationships. The capitalized software development costs have been decreased $1.9 million to a value of $0 since the technology was provided a fair value as an intangible asset.

c) Goodwill is calculated as the difference between the fair value of the consideration expected to be transferred and the values assigned to the identifiable tangible and intangible assets acquired and liabilities assumed. The acquired goodwill presented in the above table reflects the estimated goodwill from the preliminary purchase price allocation of $38.5 million.

d) Deferred revenue represents advance payments for support and maintenance services. The fair value was estimated based on a cost build-up approach. The cost build-up approach determines fair value by estimating the costs related to supporting the obligation plus an assumed profit which approximates, in theory, the amount that would be required to pay third party to assume the obligation. As a result, the deferred revenues of Maconomy have been decreased $8.9 million to $4.0 million, which represents the estimated fair value of the contractual obligations assumed.

e) The liability for the earnout for the IP rights in which the Company intends to pay in cash was valued at fair value which decreased the liability by $37,000 of which $5,000 was recorded as “Accounts Payable and Accrued Expenses” and $32,000 was as “Other Long Term Liabilities”.

f) Income tax receivable, net of a reclass made in purchase accounting of Maconomy’s historical income tax payable, reflects the estimated impact of purchase accounting adjustments for fair values of intangible assets acquired and deferred revenue obligations assumed.

g) Deferred tax liabilities, current and long term, reflects a deferred income tax liability representing the estimated impact of purchase accounting adjustments for identifiable intangible assets. The estimate of the deferred tax liabilities was determined based on the excess book basis over tax basis resulting from the fair value adjustments using the statutory tax rate for the jurisdictions holding the assets. This estimate is preliminary and is subject to change based upon management’s final determination of the fair values of the identifiable intangible assets acquired and liabilities assumed by each taxing jurisdiction.

h) Other tax liabilities represents provisions for uncertain tax positions in accordance with U.S. GAAP, which requires that any tax benefit of a filing position would be more likely than not sustained upon examination. As this same requirement does not exist under IFRS, Maconomy was not required to record a provision for

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

uncertain tax positions. Maconomy’s pre-acquisition accounting approach for uncertain tax positions was based on Maconomy’s management estimates and assumptions. As the Company has not completed its assessment of Maconomy’s uncertain tax positions, final assessments of uncertain tax positions could differ materially from the amounts included in the unaudited pro forma condensed consolidated financial statements. Accordingly, the Company has not adjusted Maconomy’s historical book values for uncertain tax positions in the unaudited pro forma condensed consolidated financial statements.

i) Maconomy’s historical stockholder’s equity was reversed.

6. Unaudited Pro Forma Condensed Consolidated Statement of Operations Adjustments

a) Amortization Expense

Definite lived intangible assets were recorded at their fair value of approximately $40.8 million. The weighted average useful life of the intangible assets is estimated at 7.6 years. An adjustment to record estimated amortization expense of $9.8 million and $2.0 million was made for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively. The following table sets forth the components and the estimated useful lives of the intangible assets acquired associated with the acquisition (in thousands):

	Preliminary Fair Value		Estimated Life
Technology		10,288	5 years
In process research and development		108	—
Maintenance agreements		20,195	10 years
Customer relationships		5,894	4 years
Tradenames		4,303	Indefinite
	$	40,788

Technology is being amortized using an accelerated amortization method and the related amortization expense is included in “Cost of Software License Fees” expense. The pro forma adjustment for technology amortization was $3.6 million and $706,000 for the year ended December 31, 2009 and March 31, 2010, respectively. The maintenance agreements are being amortized using an accelerated amortization method and the related amortization expense is included in “Sales and Marketing” expense. The pro forma adjustment for the maintenance agreements amortization was $3.8 million and $850,000 for the year ended December 31, 2009 and March 31, 2010, respectively. The customer relationships are being amortized using an accelerated amortization method and the related amortization expense is included in “Sales and Marketing” expense. The pro forma adjustment for customer relationships amortization was $2.4 million and $455,000 for the year ended December 31, 2009 and March 31, 2010, respectively.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the estimated future amortization expense for the remaining nine months of 2010 and years thereafter (in thousands):

Years Ending December 31,
2010-remaining	$	5,862
2011		6,174
2012		4,531
2013		2,889
2014		1,836
Thereafter		3,672
Total	$	24,964

b) Transaction Costs

We have estimated that total acquisition related costs will be approximately $7.7 million. Of these costs approximately $7.6 million was accrued as a pro forma adjustment in “Accounts payable and Accrued Expenses” in the unaudited condensed consolidated balance sheet at March 31, 2010. The remaining transaction costs are reflected in the historical unaudited condensed consolidated balance sheet of Deltek at March 31, 2010. Because we are required to expense these costs as they are incurred, we have charged the pro forma adjustment to retained earnings as of March 31, 2010. No adjustment has been made to the unaudited pro forma consolidated statement of operations for the year ended December 31, 2009 as no transaction costs were incurred during that period. The unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2010 was adjusted by $92,000 to eliminate the transaction costs reflected in “General and Administrative Expenses” which were incurred and expensed for that period as they are non-recurring.

c) Interest income

To record reduction of interest income due to reduction in cash and cash equivalents for payment of purchase price, based on our average actual yield earned during the periods presented.

d) Stock Compensation

We anticipate issuing approximately 1,140,000 stock options to key employees of Maconomy subsequent to the acquisition. An adjustment to record pro forma stock-based compensation expense of $1.5 million and $346,000, net of the amount reflected on the historical books of Maconomy, was made for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively as if these stock options were granted on January 1, 2009.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the pro forma stock-based compensation expense adjustment included in the related financial statement line items (in thousands):

	Year Ended December 31, 2009		Three Months Ended March 31, 2010
Included in cost of revenue:
Cost of consulting services	$	566	$	127
Cost of maintenance and support services		67		16
Total included in cost of revenue		633		143
Included in operating expenses:
Research and development		434		99
Sales and marketing		457		101
General and administrative		4		3
Total included in operating expenses		895		203
Total	$	1,528	$	346

e) Capitalized Software Amortization

In regards to Maconomy’s historical capitalized software development costs which were expensed for U.S. GAAP (Note 4), the related amortization expense was removed from “Cost of Software License Fees” of $1.0 million and $285,000 for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively.

f) Income taxes

To record income tax impact on pro forma adjustments at an average statutory tax rate of approximately 26% and 24% for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively. The pro forma combined provision for income taxes does not reflect the amounts that would have resulted had Deltek and Maconomy filed consolidated income tax returns during the periods presented.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7. Adjustment to Common Shares and Equivalents Outstanding

Pro forma earnings per common share basic and diluted for the year ended December 31, 2009 and the three months ended March 31, 2010, have been calculated based on the estimated weighted average number of common shares outstanding on a pro forma basis, as described below. For purposes of these pro forma financial statements, the common stock rights offering that we completed in June 2009 was given effect in the computation of basic and diluted earnings per share for the year ended December 31, 2009 as if it occurred on January 1, 2009. On June 1, 2009 we issued 20 million shares of common stock at a subscription price of $3.00 per shares. Net proceeds from the offering after deducting fees and offering expenses were $58.2 million. On a pro forma basis, the proceeds from the rights offering combined with available cash on January 1, 2009 were used to finance the acquisition of Maconomy.

The following table sets forth the computation of pro forma basic and diluted earnings per share for the year ended December 31, 2009 (dollars in thousands, except share and per share data):

	For the Year Ended December 31, 2009
	Historical		Pro forma
Basic earnings per share computation:
Net income (A)	$	21,396	$	12,860
Weighted average common shares–basic historical		56,777,552		56,777,552
Pro forma adjustment for rights offering as of 1/1/2009		—		6,844,250
Weighted average common shares–basic adjusted (B)		56,777,552		63,621,802
Basic net income per share (A/B)	$	0.38	$	0.20
Diluted earnings per share computation:
Net income (A)	$	21,396	$	12,860
Shares computation:
Weighted average common shares–basic adjusted		56,777,552		63,621,802
Effect of dilutive stock options, restricted stock, and ESPP		818,774		818,774
Pro forma effect of stock options issued to Maconomy		—		—
Weighted average common shares–diluted (C)		57,596,326		64,440,576
Diluted net income per share (A/C)	$	0.37	$	0.20

For the year ended December 31, 2009 there was no dilutive effect for the stock options issued to Maconomy’s key employees on January 1, 2009, for pro forma purposes, as the options were out-of-the-money based on their exercise price when compared to the average common stock price for the period and therefore, considered anti-dilutive.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the computation of pro forma basic and diluted earnings per share for the three months ended March 31, 2010 (dollars in thousands, except share and per share data):

	For the Three Months Ended March 31, 2010
	Historical		Pro forma
Basic earnings per share computation:
Net income (A)	$	4,166	$	2,023
Weighted average common shares–basic (B)		64,440,373		64,440,373
Basic net income per share (A/B)	$	0.06	$	0.03
Diluted earnings per share computation:
Net income (A)	$	4,166	$	2,023
Shares computation:
Weighted average common shares–basic		64,440,373		64,440,373
Effect of dilutive stock options, restricted stock, and ESPP		1,277,052		1,277,052
Pro forma effect of stock options issued to Maconomy		—		14,347
Weighted average common shares–diluted (C)		65,717,425		65,731,772
Diluted net income per share (A/C)	$	0.06	$	0.03

For the three months ended March 31, 2010 the dilutive effect for the approximate 1,140,000 stock options granted to Maconomy’s key employees on January 1, 2009, for pro forma purposes, was 14,347 shares and the remaining amount of the grant was considered anti-dilutive based on the treasury stock method to compute dilutive weighted average shares.