Computer Associates 2007 Annual Report Download - page 132

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The Company recognized share-based compensation in the following line items in the Consolidated Statements of Operations
for the periods indicated:
(IN MILLIONS) 2007 2006 2005
YEAR ENDED MARCH 31,
Cost of professional services $4 $3 $ 5
Selling, general, and administrative 63 64 60
Product development and enhancements 26 32 35
Share-based compensation expense before tax 93 99 100
Income tax benefit (27) (28) (27)
Net compensation expense $66 $71 $ 73
The decrease in share-based compensation expense in fiscal year 2007 as compared with fiscal years 2006 and 2005 was
principally the result of an increase in the Company’s estimated forfeiture rate of share-based awards based on historical
experience.
The Company adjusts share-based compensation on a quarterly basis for changes to the estimate of expected equity award
forfeitures based on a review of recent forfeiture activity and expected future employee turnover. The effect of adjusting the
forfeiture rate is recognized in the period the forfeiture estimate is changed.
The following table summarizes information about unrecognized share-based compensation costs as of March 31, 2007:
UNRECOGNIZED
COMPENSATION
COSTS
(IN MILLIONS)
WEIGHTED AVERAGE PERIOD
EXPECTED TO BE
RECOGNIZED
(IN YEARS)
Stock option awards $27 1.4
Restricted stock unit awards 17 1.1
Restricted stock awards 39 1.6
Performance share unit awards 16 1.4
Stock purchase plan 20.3
Total unrecognized share-based compensation costs $ 101 1.4
There were no capitalized share-based compensation costs at March 31, 2007, 2006 or 2005.
Stock Option Awards
As of March 31, 2007, options outstanding that have vested and are expected to vest are as follows:
NUMBER
OF SHARES
(IN MILLIONS)
WEIGHTED AVERAGE
EXERCISE PRICE
WEIGHTED AVERAGE
REMAINING
CONTRACTUAL LIFE
(IN YEARS)
AGGREGATE INTRINSIC
VALUE
1
Vested 16.9 $ 29.78 4.3 $ 33.5
Expected to vest 4.0 $ 24.76 7.7 $ 8.6
Total 20.9 $ 28.82 4.9 $ 42.1
1 These amounts represent the difference between the exercise price and $25.91, the closing price of the Company’s stock on March 30, 2007, the last trading day of the Company’s fiscal year as
reported on the New York Stock Exchange.
Options outstanding that are expected to vest are net of estimated future option forfeitures.
120