Computer Associates 2004 Annual Report Download - page 97

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The Company maintains a defined contribution plan, the Computer Associates Savings Harvest Plan (CASH Plan), for the
benefit of the U.S. employees of the Company. The CASH Plan is intended to be a qualified plan under Section 401(a) of
the Internal Revenue Code of 1986 (the Code), and contains a qualified cash or deferred arrangement as described under
Section 401(k) of the Code. Pursuant to the CASH Plan, eligible participants may elect to contribute a percentage of their
base compensation. The matching contributions to the CASH Plan, excluding the discontinued operations of ACCPAC,
totaled approximately $12 million in each of the fiscal years ended March 31, 2004, 2003, and 2002. In addition, the
Company may make discretionary contributions to the CASH Plan. The discretionary contributions to the CASH Plan,
excluding the discontinued operations of ACCPAC, totaled approximately $20 million in each of the fiscal years ended
March 31, 2004 and 2003 and $23 million for the fiscal year ended March 31, 2002.
The Company made contributions to international retirement plans of $20 million, $17 million, and $15 million in the fiscal
years ended March 31, 2004, 2003, and 2002, respectively.
Note 11 — Rights Plan
Each outstanding share of the Company’s common stock carries a stock purchase right issued under the Company’s
Rights Agreement, dated June 18, 1991, as amended May 17, 1995, May 23, 2001, and November 9, 2001 (the Rights
Agreement). Under certain circumstances, each right may be exercised to purchase one one-thousandth of a share of
Series One Junior Participating Preferred Stock, Class A, for $150. Under certain circumstances, following (i) the acquisition
of 20% or more of the Company’s outstanding common stock by an Acquiring Person (as defined in the Rights
Agreement), (ii) the commencement of a tender offer or exchange offer which would result in a person or group owning
20% or more of the Company’s outstanding common stock, or (iii) the determination by the Company’s Board of
Directors and a majority of the Disinterested Directors (as defined in the Rights Agreement) that a 15% stockholder is
an Adverse Person (as defined in the Rights Agreement), each right (other than rights held by an Acquiring Person or
Adverse Person) may be exercised to purchase common stock of the Company or a successor company with a market
value of twice the $150 exercise price. The rights, which are redeemable by the Company at one cent per right, expire
in November 2006.
Note 12 — Restatement of Quarterly Reports on Form 10-Q (Unaudited)
The Company has amended its previously filed Quarterly Reports on Form 10-Q for the quarterly periods ended June 30,
2003, September 30, 2003, and December 31, 2003. The primary purpose of the restatement is to correct the method
the Company used to account for subscription revenue associated with Business Model contracts that replaced existing
Business Model contracts. Previously, the remaining deferred subscription revenue balance associated with the contract
that was being replaced was amortized over the term of the original contract. In accordance with SOP 97-2, the correct,
and revised, method amortizes the remaining deferred subscription revenue balance over the term of the new contract.
The adjustments decreased revenue by $3 million, $5 million, and $7 million for the first, second, and third quarters,
respectively, of the fiscal year ended March 31, 2004, and increased deferred subscription revenue by a cumulative
amount of approximately $13 million. Such deferred subscription revenue will be recognized in subsequent periods. The
impact of these adjustments is as follows:
2004 Quarterly Results
June 30 September 30 December 31
Previously Previously Previously
Reported(1) Restated Reported(1) Restated Reported(1) Restated
(in millions, except per share amounts)
Revenue .................................................................... $789 $786 $808 $803 $844 $837
Income (loss) from continuing operations ................ 10 8 (87) (90) 21 17
Basic earnings (loss) from continuing
operations per share .............................................. 0.02 0.01 (0.15) (0.16) 0.04 0.03
Diluted earnings (loss) from continuing
operations per share .............................................. 0.02 0.01 (0.15) (0.16) 0.04 0.03
(1) As adjusted to reflect the operating results of ACCPAC as discontinued operation.
CA 2004 FORM 10-K | PAGE 69
Note 10 — Profit-Sharing Plan