Computer Associates 2006 Annual Report Download - page 130

Note 1 — Significant Accounting Policies (Continued)
Schedule II, “Valuation and Qualifying Accounts”. There was no impact to net accounts receivable, current or non-
current, due to this reclassification.
A reclassification entry was made to increase deferred tax assets — current and non-current by $47 million and
$25 million, respectively, and to increase deferred tax liabilities — current and noncurrent by $6 million and
$66 million respectively, to conform to the March 31, 2006 presentation. The reclassification was made to better
reflect the gross deferred tax assets and liabilities by taxing jurisdiction.
Note 2 — Acquisitions, Divestitures and Restructuring
Acquisitions
During the fourth quarter of fiscal year 2006, the Company completed its acquisition of Wily. Wily is a provider of
enterprise application management software solutions that enable companies to manage their web applications and
infrastructure. The total purchase price of the acquisition was approximately $374 million which included a
holdback of approximately 10% of the initial purchase price. The acquisition of Wily has been accounted for as a
purchase and accordingly, its results of operations have been included in the Consolidated Financial Statements
since the date of its acquisition, March 3, 2006.
The acquisition cost of Wily has been allocated to assets acquired and liabilities assumed based on estimated fair
values at the date of acquisition as follows:
(in millions)
Cash and cash equivalents . .............................................. $ 13
Purchased software .................................................... 54
Deferred tax assets .................................................... 34
Other assets assumed................................................... 8
Other intangibles — customer relationships .................................. 119
Other intangibles — tradenames ........................................... 7
Goodwill............................................................ 232
Deferred tax liabilities .................................................. (74)
Deferred revenue...................................................... (10)
Other liabilities assumed . . .............................................. (9)
Purchase price........................................................ $374
Purchased software products are being amortized over an estimated life of eight years, and customer relationships
and tradenames will be amortized over ten years.
The allocation of the purchase price is based upon estimates which may be revised within one year of the date of
acquisition as additional information becomes available. It is anticipated that the final purchase price allocation will
not differ materially from the preliminary allocation presented above.
The allocation of a significant portion of the Wily purchase price to goodwill was predominantly due to the
relatively short lives of the acquired developed technology assets, whereby a substantial amount of the purchase
price was based on earnings beyond the estimated lives of the intangible assets.
During the third quarter of fiscal year 2006, the Company completed its acquisition of iLumin. The total purchase
price of the acquisition was approximately $48 million. iLumin was a privately held provider of enterprise message
management and archiving software. iLumin’s Assentor product line has been added to the Company’s storage
management business unit. The acquisition of iLumin has been accounted for as a purchase and accordingly, its
results of operations have been included in the Consolidated Financial Statements since the date of its acquisition,
October 14, 2005.
110