Computer Associates 2007 Annual Report Download - page 126
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On May 23, 2007, a lawsuit captioned The Bank of New York v. CA, Inc. et al., Index No. 07/601738, was filed in the Supreme
Court of the State of New York, New York County. The complaint seeks unspecified damages and other relief, including
acceleration of principal, based upon a claim for breach of contract. Specifically, the complaint alleges that the Company failed
to comply with certain purported obligations in connection with its 5.625% Senior Notes due 2014, issued in November 2004,
insofar as the Company failed to carry out a purported obligation to cause a registration statement to become effective to
permit the exchange of the notes for substantially similar securities of the Company registered under the Securities Act that
would be freely tradable, and, having failed to effect such exchange offer, failed to carry out the purported obligation to pay
additional interest of 0.5% per annum after November 18, 2006. The Company has not yet responded to the complaint.
Although the ultimate outcome cannot be determined, the Company believes that the claims are unfounded and that the
Company has meritorious defenses. In the opinion of management, the resolution of this lawsuit is not expected to have a
material adverse effect on the Company’s financial position, results of operations, or cash flows.
The Company, various subsidiaries, and certain current and former officers have been named as defendants in various other
lawsuits and claims arising in the normal course of business. The Company believes that it has meritorious defenses in
connection with such lawsuits and claims, and intends to vigorously contest each of them. In the opinion of the Company’s
management, the results of these other lawsuits and claims, either individually or in the aggregate, are not expected to have a
material adverse effect on the Company’s financial position, results of operations, or cash flows.
Note 9 — Income Taxes
The amounts of income (loss) from continuing operations before taxes attributable to domestic and foreign operations are as
follows:
(IN MILLIONS) 2007 2006 2005
YEAR ENDED MARCH 31,
Domestic $111 (84) (208)
Foreign 43 205 241
$154 121 33
Income tax expense (benefit) consists of the following:
(IN MILLIONS) 2007 2006 2005
YEAR ENDED MARCH 31,
Current:
Federal $211 $ 108 $ 50
Federal tax cost of repatriation under the American Jobs Creation Act —55 —
State 6520
Foreign 65 137 129
282 305 199
Deferred:
Federal (51) (180) (138)
Federal tax cost of repatriation under the American Jobs Creation Act —(55) 55
State (25) (32) (27)
Foreign (173) (73) (82)
(249) (340) (192)
Total:
Federal 160 (72) (88)
Federal tax cost of repatriation under the American Jobs Creation Act ——55
State (19) (27) (7)
Foreign (108) 64 47
$33 $(35) $ 7
114