Concur (CNQR) 8-K/A Completion of Acquisition or Disposition of Assets

Exhibit 99.02 Pro Forma Financial Statement Information

Item 9.01(b)(1)

CONCUR TECHNOLOGIES, INC.

UNAUDITED PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 2005

(in thousands)

	Concur			Outtask			Pro Forma			Combined
Assets
Current assets:
Cash and cash equivalents	$	16,022		$	1,427		$	(8,386	) (a)	$	9,063
Accounts receivable, net of allowance		13,712			2,751						16,463
Prepaid expenses		1,866			—						1,866
Other current assets		4,285			55						4,340
Total current assets		35,885			4,233			(8,386	)		31,732
Property and equipment, net		16,268			775						17,043
Restricted cash		500			—						500
Acquired intangible assets, net		1,805			—			10,200	(a)		12,005
Goodwill		3,704			—			53,536	(a)		57,240
Deposits and other assets		6,016			455			(418	) (e)		6,053
Total assets	$	64,178		$	5,463		$	54,932		$	124,573
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,525		$	82					$	2,607
Accrued compensation		1,321			299		$	751	(d)		2,371
Other accrued liabilities		2,224			670						2,894
Current portion of long-term obligations		159			125						284
Current portion of deferred revenues		14,796			1,182			(759	) (c)		15,219
Total current liabilities		21,025			2,358						23,301
Long-term debt		—			—			18,000	(a)		18,000
Long-term obligations, net of current portion		3,025			119						3,144
Long-term deferred revenues, net of current portion		7,313			—						7,313
Total liabilities		31,363			2,477			17,992			51,832
Stockholders’ equity:
Convertible preferred stock, common stock additional paid-in capital and accumulated other comprehensive income		236,560			23,162			(23,162 26,039 13,887	) (b)   (a)   (a)		276,486
Accumulated deficit		(203,745	)		(20,176	)		20,176	(b)		(203,745	)
Total stockholders’ equity		32,815			2,986			36,940			72,741
Total liabilities and stockholders’ equity	$	64,178		$	5,463		$	54,932		$	124,573

See notes to unaudited pro forma combined consolidated financial statements

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Item 9.01(b)(2)

CONCUR TECHNOLOGIES, INC.

UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005

(in thousands except per share amounts)

	Concur			Outtask			Pro Forma			Combined
Revenues, net	$	71,831		$	14,393		$	(646	) (g)	$	85,578
Operating expenses:
Cost of operations		28,450			4,108						32,558
Sales and marketing		17,484			3,296						20,780
Systems development and programming		9,336			1,830			150	(i)		11,316
General and administrative		10,319			3,204						13,523
Stock based compensation		—			10,009			(10,009	) (i)		—
Amortization of intangible assets		1,140			—			1,684	(f)		2,824
Total expenses		66,729			22,447			(8,175	)		81,001
Income from operations		5,102			(8,054	)		7,529			4,577
Interest income		352			29			(168	) (j)		213
Interest expense		(7	)		(19	)		(1,136	) (j)		(1,162	)
Other income/(expense), net		(81	)		(151	)		174	(h)		(58	)
Income tax provision		—			(53	)					(53	)
Net income	$	5,366		$	(8,248	)	$	6,399		$	3,517
Net income per share - basic	$	0.16								$	0.10
Net income per share - diluted	$	0.15								$	0.09
Shares used in calculation of net income per share:
Basic		32,906						1,722			34,628
Diluted		36,348						2,648			38,996

See notes to unaudited pro forma combined consolidated financial statements

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Item 9.01(b)(3)

CONCUR TECHNOLOGIES, INC.

UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2005

(in thousands except per share amounts)

	Concur			Outtask			Pro Forma			Combined
Revenues, net	$	19,267		$	3,940		$	(132	) (g)	$	23,075
Operating expenses:
Cost of operations		8,254			1,079						9,333
Sales and marketing		4,755			946						5,701
Systems development and programming		2,223			498			150	(i)		2,871
General and administrative		3,105			863						3,968
Stock based compensation		—			10,009			(10,009	) (i)		—
Amortization of intangible assets		285			—			421	(f)		706
Total expenses		18,622			13,395			(9,438	)		22,579
Income from operations		645			(9,455	)		9,306			496
Interest income		106			23			(42	) (j)		87
Interest expense		(1	)		(5	)		(344	) (j)		(350	)
Other expense, net		(42	)		(174	)		174	(h)		(42	)
Income tax provision		(60	)		(10	)					(70	)
Net income	$	648		$	(9,621	)	$	9,094		$	121
Net income per share - basic	$	0.02								$	0.00
Net income per share - diluted	$	0.02								$	0.00
Shares used in calculation of net income per share:
Basic		33,301						1,722			35,023
Diluted		36,505						2,648			39,153

See notes to unaudited pro forma combined consolidated financial statements

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Item 9.01(b)(4)

Concur Technologies

Notes to Unaudited Pro Forma Combined Financial Statements

April 11, 2006

(1) Basis of Presentation

The unaudited pro forma combined balance sheet as of December 31, 2005, gives effect to the acquisition of Outtask, Inc., a Delaware corporation (Outtask), by Concur Technologies, Inc., a Delaware corporation (Concur) as if the transaction had occurred on December 31, 2005. The unaudited pro forma combined statements of operations for the three month period ended December 31, 2005, and for the year ended September 30, 2005, gives effect to the acquisition of Outtask as if the transaction had occurred at the beginning of the period presented. Historically, the fiscal year of Outlook ended on December 31, and Concur Technologies, Inc., on September 30. For the purposes of preparing the unaudited pro forma combined balance sheet at December 31, 2005, and statement of operations for the quarter ended December 31, 2005, the Outtask financial statements have been presented using the same periods as Concur. For purposes of preparing the unaudited pro forma combined statement of operations for the year ended September 30, 2005, due to the close proximity of fiscal years ends, Outtask’s year ended December 31, 2005, is combined with Concur’s fiscal year ended September 30, 2005, all in accordance with the rules of the Securities and Exchange Commission.

The pro forma combined financial statements are presented for illustrative purposes only and should not be construed to be indicative of the actual combined results of operations as they may exist in the future. The pro forma adjustments are based on the consideration exchanged by Concur for the fair value of the assets acquired and liabilities assumed.

The unaudited pro forma combined consolidated financial statements do not purport to represent what Concur’s financial position or results of operations would actually have been if the acquisition had in fact occurred on such date or to project Concur’s financial position or results of operations as of any future date or for any future period.

(2) Acquisition of Outtask, Inc.

On January 23, 2006, Concur completed and announced its acquisition of Outtask through the merger of a wholly-owned subsidiary of Concur with and into Outtask, with Outtask surviving as a wholly-owned subsidiary of Concur (the Merger). Concur will account for the Merger under the purchase method of accounting.

Prior to the Merger, Outtask was a privately held corporation that provided hosted travel management and corporate expense solutions. In connection with the Merger, Outtask’s operations in Alexandria, Virginia were maintained and became part of Concur’s world wide operations. Concur is headquartered in Redmond, Washington.

Under the Merger Agreement, all outstanding equity securities of Outtask, including all issued and outstanding options to purchase shares of Outtask common stock, were exchanged for cash, shares of Concur common stock and options to purchase shares of Concur common stock. Subject to specified holdback provisions, at closing on January 23, 2006, approximately $23.3 million in cash, 1.7 million shares of Concur common stock and options to purchase 1.2 million shares of Concur common stock became issuable to Outtask security holders. Of the cash issued at closing, $4.5 million is being withheld by Concur for specified holdbacks. In addition, if certain combined company performance metrics are achieved for the period ending September 30, 2006, additional contingent consideration of up to $12.5 million of cash and up to approximately 0.6 million shares of Concur common stock will be issued to the stockholders and option holders of Outtask, subject to specified holdback provisions.

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The total purchase consideration was as follows:

(in millions)
Purchase Consideration
Cash	$	23.3
Equity, common stock		26.0
Equity, options		13.9
Transaction costs		3.1
Acquisition bonuses		0.7
Total	$	67.0

Concur accounted for the acquisition in accordance with SFAS No. 141 “Business Combinations” (SFAS141). The primary identified intangibles were related to trade name, trademarks, technology, non-compete agreements and customer relationships.

(in millions)
Preliminary Purchase Price Allocation
Cash and cash equivalents	$	1.4
Accounts receivable		2.7
Prepaid expenses and other current assets		0.1
Property and equipment		0.8
Goodwill		53.5
Trade name and trademarks		0.2
Technology		3.4
Non-compete agreements		0.2
Customer relationships		6.4
Accounts payable		(0.1	)
Accrued expenses		(1.1	)
Deferred revenue		(0.5	)
Total	$	67.0

The purchase price set forth above is tentative and preliminary and may be materially different from the final purchase price allocation. Amounts allocated to identified intangibles will be amortized over the remaining useful lives, which have been estimated as one year for trade name and trademarks, four and six years for two technology elements, respectively, two years for non-compete agreements, and nine to eleven years for customer relationships.

(3) Nonrecurring Charges

In the quarter ended December 31, 2005, Outtask recorded stock based compensation associated with variable option accounting of $9.8 million.

(4) Pro Forma Adjustments

(a) The total consideration of $67.0.million consisted of Concur’s common stock valued at $26.0 million, options to purchase Concur’s common stock valued at $13.9 million, cash of $23.3 million, transaction costs of $3.1 million, and employee acquisition bonuses of $0.7 million. The $26.0 million in stock consideration assumes all 1.7 million shares available were exchanged with a stock price of $15.12, which represented the average stock price two days prior and subsequent to the date of acquisition.

To fund a portion of the cash consideration, Concur established a term lending facility of up to $14.0 million and a revolving line of credit facility of up to $8.0 million with a commercial bank.

Concur engaged a third party appraiser to perform the appraisal of the intangible assets acquired in the Merger, and to assist in the allocation of the purchase price. The following values have been allocated to the intangible assets based on their preliminary fair values as determined by the appraisal: $0.2 million to trade name and trademarks, $3.4 million to technology, $0.2 million to non-compete agreements, and $6.4 million to customer relationships. The excess of the total purchase price over preliminary fair values of all identifiable assets acquired, net of liabilities, amounted to $53.5 million.

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Outtask’s trade name and trademarks were preliminarily estimated to have a remaining economic useful life of approximately one year, as product branding will be merged into Concur’s branding during this period. The relief from royalty method, a form of the income approach, was used to estimate the preliminary fair value.

Certain elements of Outtask’s developed software technology were preliminarily identified as having value for Concur’s current and future operations. These elements were Outtask’s Travel and T&E technologies. In the valuation of Outtask’s developed software technology, the excess earnings method, a form of the income approach, was used to estimate the preliminary fair value. The Travel and T&E technology assets were preliminarily evaluated to have remaining useful lives of six and four years, respectively.

The non-compete agreements entered into as of the acquisition date by key Outtask employees were preliminarily estimated to have remaining economic useful lives of two years. A “with and without” method, a form of the income approach, was used to estimate the preliminary fair value.

Customer relationships included all Outtask customer contracts established as of January 23, 2006, the date of the acquisition. The Travel and T&E customer relationships were preliminarily estimated to have remaining useful lives of nine to eleven years, respectively. In the valuation process of the customer relationships, the excess earnings method, a form of the income approach, was used to estimate the preliminary fair value.

(b) To eliminate Outtask’s historical equity and redeemable preferred stock.

(c) To adjust assets and liabilities to fair values as of the acquisition date.

(d) To reflect employee bonuses payable at the date of acquisition.

(e) To eliminate Outtask’s deferred transaction costs.

(f) To record amortization of acquired intangibles associated with Concur’s acquisition of Outtask.

(g) To adjust revenues resulting from amortization of set-up fees and software implementation fees.

(h) To eliminate nonrecurring costs associated with Outtask litigation concerning equity rights.

(i) To eliminate stock based compensation expense associated with variable option accounting.

(j) To record interest expense associated with debt, and reduce interest income for cash expended.

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