Computer Associates 2008 Annual Report Download - page 89

common stock repurchase plan. On August 15, 2006, the Company announced the commencement of a tender offer to
purchase outstanding shares of the Company’s common stock, at a price not less than $22.50 and not greater than
$24.50 per share. This tender offer represented the initial phase of the up to $2 billion stock repurchase plan that the
Company announced in June 2006, which replaced the prior $600 million common stock repurchase plan. In the tender
offer, the Company offered to purchase for cash up to approximately 41 million shares of its common stock, par value
$0.10 per share, including the Associated Rights to Purchase Series One Junior Participating Preferred Stock, Class A at
a per share purchase price of not less than $22.50 nor greater than $24.50, net to the seller in cash, without interest.
The tender offer also allowed the Company the right to purchase up to approximately 11 million additional shares
without amending or extending the offer.
On September 14, 2006, the expiration date of the tender offer, the Company purchased approximately 41 million
shares at a purchase price of $24.00 per share, for a total price of approximately $989 million, which excludes bank,
legal and other associated charges of approximately $2 million. Upon completion of the tender offer, the Company
retired all the shares that were purchased, which resulted in a reduction of the common stock issued and outstanding as
reflected in the Company’s stockholders’ equity on the Consolidated Balance Sheet as of March 31, 2007. A total of
$750 million was drawn down from the Company’s revolving credit facility (the 2004 Revolving Credit Facility) in
September 2006 in order to finance a portion of the tender offer. The Company’s borrowing rate as of March 31, 2008
was 3.83%. The maximum committed amount available under the 2008 Revolving Credit Facility is $1 billion, exclusive
of incremental credit increases of up to an additional $250 million which are available subject to certain conditions and
the agreement of the Company’s lenders. Total interest expense relating to the borrowing for the fiscal year 2008 and
2007 was approximately $44 million and $25 million, respectively.
(s) Reclassifications: Certain prior year balances have been reclassified to conform to the current period’s presentation.
Statement of Operations: Effective with the filing of this fiscal year 2008 10-K Report, the Company revised its
Consolidated Statement of Operations in order to provide further clarity into its financial results. The Company has
modified its financial statements to identify certain costs of sales on the Consolidated Statement of Operations. The
Company continues to report “Amortization of capitalized software costs” and “Cost of professional services” as
separate line items on the Consolidated Statements of Operations and has now added a new line item entitled “Costs of
licensing and maintenance.” Costs of licensing and maintenance includes technical support costs (previously reported as
part of “Product development and enhancements”), royalties (previously reported as part of “Commissions, royalties and
bonuses”), and other manufacturing and distribution costs (previously included within “Selling, general, and
administrative”). The Company has also modified its financial statements by separating “Selling and marketing” costs
from “Selling, general and administrative” costs and “Commissions, royalties and bonuses” costs. The remaining
unallocated amounts previously reported under “Selling, general and administrative” and “Commissions, royalties and
bonuses” have been included with “General and administrative” expenses. To maintain consistency and comparability, the
Company reclassified prior-year amounts to conform to the current-year Consolidated Statement of Operations
presentation. These expense reclassifications had no effect on previously reported total expenses or total revenue.
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