Computer Associates 2009 Annual Report Download - page 86

Download and view the complete annual report

Please find page 86 of the 2009 Computer Associates annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

separately for the liability and equity components of the instruments. The debt will be recognized at the present value of
its cash flows discounted using the issuer’s nonconvertible debt borrowing rate at the time of issuance. The equity
component will be recognized as the difference between the proceeds from the issuance of the convertible debt
instrument and the fair value of the liability. FSP No. APB 14-1 will also require an accretion of the resulting debt
discount over the expected life of the debt. The proposed transition guidance requires retrospective application to all
periods presented, and does not grandfather existing instruments. FSP No. APB 14-1 is effective for fiscal years
beginning after December 15, 2008. The Company plans to adopt FSP APB 14-1 on April 1, 2009.
Upon adoption of FSP APB 14-1, the Company will be required to revise prior period financial statements. Total
stockholders’ equity will increase by $11 million for the March 31, 2009 reporting period. The Company’s reported net
income will decrease by $15 million, $14 million and $13 million for March 31, 2009, 2008 and 2007, respectively. The
Company’s basic earnings per share will decrease by approximately $0.03, $0.02 and $0.02 for the fiscal years ended
March 31, 2009, 2008 and 2007, respectively. The Company’s diluted net income per share will decrease by
approximately $0.02 for the fiscal year ended March 31, 2007. Diluted net income per share for the fiscal years ended
March 31, 2009 and 2008 will not be affected.
In June 2008, the FASB issued Emerging Issues Task Force (EITF) 03-6-1, “Determining Whether Instruments Granted in
Share-Based Payment Transactions are Participating Securities.” FSP EITF No. 03-6-1 clarifies that unvested share-based
payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are
participating securities and are to be included in the computation of earnings per share under the two-class method
described in SFAS No. 128, “Earnings Per Share.” FSP EITF No. 03-6-1 is effective for fiscal years beginning after
December 15, 2008 and requires all presented prior-period earnings per share data to be adjusted retrospectively. FSP
EITF No. 03-6-1 will not have a material impact on the Company’s Consolidated Financial Statements.
(t) Reclassifications: Certain prior year balances have been reclassified to conform to the current period’s presentation.
Effective with the filing of the Company’s Quarterly Report on Form 10-Q for the first quarter of fiscal year 2009, the
Company refined the classification of certain costs reported on its Consolidated Statement of Operations to better
reflect the allocation of various expenses to the new line items and to better align the Company’s reported financial
statements with the Company’s internal view of its business performance. To maintain consistency and comparability,
the Company reclassified prior-year amounts to conform to the current-year Consolidated Statements of Operations
presentation. These expense reclassifications had no effect on previously reported total expenses or total revenue.
The following table summarizes the expense section of the Company’s Consolidated Statements of Operations for the
reported prior periods indicated, giving effect to the reclassifications described above.
(IN MILLIONS)
PREVIOUSLY
REPORTED
1
REVISED
PREVIOUSLY
REPORTED
1
REVISED
YEAR ENDED
MARCH 31, 2008
YEAR ENDED
MARCH 31, 2007
Costs of licensing and maintenance $ 267 $ 272 $ 244 $ 250
Cost of professional services 350 368 326 333
Amortization of capitalized software costs 117 117 354 354
Selling and marketing 1,258 1,327 1,269 1,340
General and administrative 632 530 646 549
Product development and enhancements 516 526 544 557
Depreciation and amortization of other intangible assets 156 156 148 148
Other (gains) expenses, net 6 6 (13) (13)
Restructuring and other 121 121 201 201
Charge for in-process research and development costs — — 10 10
Total expenses before interest and taxes $ 3,423 $ 3,423 $ 3,729 $ 3,729
1 As reported in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008.
(u) Statements of Cash Flows: Interest payments for the fiscal years ended March 31, 2009, 2008 and 2007 were
approximately $103 million, $133 million and $112 million, respectively. Income taxes paid for these fiscal years were
approximately $351 million, $374 million and $296 million, respectively.
76