Computer Associates 2009 Annual Report Download - page 102

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The provision (benefit) for income taxes is allocated as follows:
(IN MILLIONS) 2009 2008 2007
YEAR ENDED MARCH 31,
Continuing operations $ 408 $ 308 $ 33
Discontinued operations —— (1)
$ 408 $ 308 $ 32
The tax expense from continuing operations is reconciled to the tax expense from continuing operations computed at
the federal statutory tax rate as follows:
(IN MILLIONS) 2009 2008 2007
YEAR ENDED MARCH 31,
Tax expense at U.S. federal statutory tax rate $ 386 $ 283 $ 54
Increase in tax expense resulting from:
U.S. share-based compensation 448
Effect of international operations (11) (24) (47)
Corporate tax rate changes 826 —
State taxes, net of federal tax benefit 23 (17)
Valuation allowance 7(11) 8
Other, net 12 27 27
Tax expense from continuing operations $ 408 $ 308 $ 33
Deferred income taxes reflect the impact of temporary differences between the carrying amounts of assets and liabilities
recognized for financial reporting purposes and the amounts recognized for tax purposes. The tax effects of the
temporary differences are as follows:
(IN MILLIONS) 2009 2008
MARCH 31,
Deferred tax assets:
Modified accrual basis accounting $ 445 $ 428
Acquisition accruals —6
Share-based compensation 84 102
Accrued expenses 73 48
Net operating losses 179 206
Purchased intangibles amortizable for tax purposes 24 28
Depreciation 20 26
Deductible state tax and interest benefits 31 42
Purchased software 13 18
Other 44 42
Total deferred tax assets 913 946
Valuation allowances (76) (118)
Total deferred tax assets, net of valuation allowances 837 828
Deferred tax liabilities:
Other intangible assets 86 105
Capitalized development costs 135 113
Total deferred tax liabilities 221 218
Net deferred tax asset $ 616 $ 610
In management’s judgment, it is more likely than not that the total deferred tax assets, net of valuation allowance, of
approximately $837 million will be realized as reductions to future taxable income or by utilizing available tax planning
strategies. Worldwide net operating loss carryforwards (NOLs) totaled approximately $608 million and $697 million as
92