Computer Associates 2006 Annual Report Download - page 129

Note 1 — Significant Accounting Policies (Continued)
comprehensive income (loss), net of applicable tax, for the fiscal years ended March 31, 2006, 2005, and 2004, are
included within the Consolidated Statements of Stockholders’ Equity.
Net Income (Loss) From Continuing Operations per Share: Basic and dilutive income (loss) per share from
continuing operations are computed by dividing net loss by the weighted-average number of common shares
outstanding for the period.
2006 2005 2004
Year Ended March 31,
(restated) (restated)
(in millions, except per share
amounts)
Income (loss) from continuing operations, net of taxes ............. $156 $ 26 $ (89)
Interest expense associated with the Convertible Senior Notes, net of
tax
(1)
................................................ 5 — —
Numerator in calculation of diluted Income (loss) per share ......... $161 $ 26 $ (89)
Weighted average shares outstanding and common share equivalents
Weighted average common shares outstanding ................... 581 588 580
Weighted average Convertible Senior Note shares outstanding ....... 23 — —
Weighted average awards outstanding ......................... 3 2 —
Denominator in calculation of diluted earnings Income (loss) per
share................................................ 607 590 580
Diluted income (loss) per share from continuing operations
(2)
........ $0.26 $0.04 $(0.15)
(1) If the common share equivalents for the 5% Convertible Senior Notes (27 million shares) issued in March 2002 and the 1.625% Convertible
Senior Notes (23 million shares) issued in December 2002 (collectively, the Notes) had been dilutive, interest expense, net of tax, related to
the Notes would have been added back to income from continuing operations to calculate diluted earnings per share from continuing
operations. The related interest expense, net of tax, for each of the fiscal years ended March 31, 2005 and 2004 totaled approximately
$25 million.
(2) If all common share equivalents for the fiscal years ended March 31, 2005 and 2004 had been dilutive, the weighted average shares
outstanding and common share equivalents would have been 640 million and 635 million, respectively.
Reclassifications: Certain prior year balances have been reclassified to conform with the current year’s
presentation.
Approximately $47 million of “Unearned professional services”, a component of “Trade and installment accounts
receivable, net”, at March 31, 2005 has been reclassified to “Accrued expenses and other current liabilities” on the
Consolidated Balance Sheet to conform to the March 31, 2006 presentation.
Approximately $270 million associated with deferred maintenance revenue was reclassified from “Non-current
liabilities” to “Current liabilities” to conform to the March 31, 2006 presentation. The reclassification was made
since these amounts are expected to be recognized as revenue within twelve months of the reporting date. This
amount is reflected as a separate line item on the Consolidated Balance Sheet.
Approximately $10 million of professional services related receivables were reclassified for the period ended
March 31, 2005 from “Billed accounts receivable,” to “Other Receivables” to conform to the March 31, 2006
presentation. Both are components of “Trade and installment accounts receivable, net” shown on the Consolidated
Balance Sheet. See Note 5, “Trade and Installment Account Receivable”. There was no impact to net accounts
receivable, current or non-current, due to this reclassification.
A reclassification was made to increase the accounts receivable balance by $20 million ($2 million current and
$18 million non-current) and the allowance for doubtful accounts by $20 million ($2 million current and $18 million
non-current). The reclassification was made to adjust the presentation of a valuation reserve that had previously
been netted against the gross accounts receivable. See Note 5, “Trade and Installment Account Receivable”, and in
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