Computer Associates 2004 Annual Report Download - page 41

Item 6. Selected Financial Data.
The fiscal year 2004, 2003, and 2002 information set forth below should be read in conjunction with Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Financial Statements
and Supplementary Data,” included elsewhere in this Annual Report on Form 10-K and was derived from the audited
financial statements. The restated fiscal year 2001 and 2000 information set forth below is unaudited. The following table
has been adjusted to remove the historical results of ACCPAC, which has been classified as a discontinued operation for
all periods presented (see Item 1, “Business — Business Developments” and Note 2 of the Consolidated Financial
Statements for information concerning the ACCPAC divestiture).
Year Ended March 31,
STATEMENT OF OPERATIONS DATA 2004 2003 2002 2001(1) 2000(1)
(in millions, except per share amounts)
Revenue ............................................................................................ $3,276 $3,027 $2,886 $4,662 $6,014
(Loss) income from continuing operations(2) ...................................... (36) (270) (1,096) (251) 687
Basic (loss) earnings from continuing operations per share(2) ............ $ (0.06) $ (0.47) $ (1.90) $ (0.43) $ 1.27
Diluted (loss) earnings from continuing operations per share(2) ........ (0.06) (0.47) (1.90) (0.43) 1.23
Dividends declared per common share ............................................ 0.08 0.08 0.08 0.08 0.08
March 31,
BALANCE SHEET AND OTHER DATA 2004 2003 2002 2001(1) 2000(1)
(in millions)
Cash provided by continuing operating activities .............................. $ 1,280 $ 1,310 $ 1,244 $ 1,360 $ 1,550
Working capital(3) ................................................................................ 903 16 524 380 843
Total assets(3) ...................................................................................... 10,679 11,261 12,371 14,453 16,949
Deferred subscription revenue(4) ........................................................ 4,296 3,774 3,226 1,875 —
Long-term debt (less current maturities) .......................................... 2,298 2,298 3,334 3,629 4,527
Stockholders’ equity .......................................................................... 4,718 4,363 4,617 5,780 6,704
(1) As previously reported on Form 8-K filed with the Securities and Exchange Commission on April 26, 2004, the Company restated certain financial data
for the fiscal years ended March 31, 2001 and 2000. See “Restatement of Previously Reported Selected Financial Data” below for additional informa-
tion, including a reconciliation of previously reported selected financial data for 2001 and 2000.
(2) Effective April 1, 2003, the Company began charging to expense the computed value of all newly granted stock-based compensation over the vesting
period. The computed fair value at the date of grant is calculated using the fair value based methodology under SFAS No. 123, “Accounting for Stock-
Based Compensation” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of
FASB Statement No. 123.” See Note 1 “Accounting for Stock-Based Compensation” of the Consolidated Financial Statements for additional information.
We reported an after-tax charge of approximately $8 million ($0.01 per share) for stock-based compensation in fiscal year 2004. Our adoption of SFAS
No. 142, “Goodwill and Other Intangible Assets,” had the effect of prospectively eliminating the amortization of goodwill and certain other intangible
assets beginning on April 1, 2002. See Note 1 “Goodwill” of the Consolidated Financial Statements for additional information. We amortized goodwill
and assembled workforce for fiscal years 2002, 2001, and 2000 of $458 million ($0.79 per share), $462 million ($0.79 per share), and $225 million ($0.40
per share), respectively.
(3) Certain prior year balances have been reclassified to conform to the current year’s presentation. See Note 1 of the Consolidated Financial Statements
for additional information.
(4) Represents the aggregate portion of all undiscounted contractual and committed license agreements pursuant to our Business Model for which revenue
has been deferred and will be recognized ratably. This balance is the sum of the following components: deferred subscription revenue (uncollected) —
current and deferred subscription revenue (uncollected) — noncurrent, which are reported as contra accounts receivable in Note 5 of the Consolidated
Financial Statements; deferred subscription revenue (collected) — current and deferred subscription revenue (collected) — noncurrent, which are
reported as liabilities on the Consolidated Balance Sheets.
Restatement of Previously Reported Selected Financial Data
Following the completion of the investigation by the Audit Committee of the Company’s Board of Directors on April 26,
2004, we filed a Current Report on Form 8-K to restate certain financial data for the fiscal years ended March 31, 2001
and 2000. The revised financial data is unaudited. None of the adjustments set forth affect the amounts shown in our
Consolidated Balance Sheets as of March 31, 2004, 2003, or 2002, and the related Consolidated Statements of
Operations, Stockholders’ Equity and Cash Flows for each of the fiscal years ended March 31, 2004, 2003, or 2002. See
Item 3, “Legal Proceedings,” and Note 7 of the Consolidated Financial Statements for additional information concerning
the Audit Committee’s investigation.
The Audit Committee’s investigation included a detailed review of our compliance with American Institute of Certified
Public Accountants’ Statement of Position (SOP) 97-2, “Software Revenue Recognition.” Under SOP 97-2, a
requirement for revenue recognition is “persuasive evidence of an arrangement.” Pursuant to paragraph 16 of SOP 97-2,
if a vendor has a customary business practice of utilizing written contracts, which is our general business practice, then to
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