Computer Associates 2008 Annual Report Download - page 91

Download and view the complete annual report

Please find page 91 of the 2008 Computer Associates annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

Approximately $18 million of deferred tax assets that were reported as “Deferred income taxes — noncurrent” as of
March 31, 2007 have been reclassified to “Deferred income taxes — current” on the Consolidated Balance Sheets to
conform to the March 31, 2008 presentation.
(t) Corrections of Prior Period Errors: During the third quarter of fiscal year 2008, the Company determined that “Federal,
state and foreign income taxes payable — current” and “Deferred income taxes — current” were each overstated by
approximately $32 million, principally related to errors in preparing the year-end estimated tax provisions for North
America. The March 31, 2007 Consolidated Balance Sheet presented in this Form 10-K has been adjusted to reflect the
correction of this error. The impact of this correction is not considered material to the March 31, 2007 financial
statements and does not affect the previously reported Consolidated Statements of Operations or total Cash Flows from
Operations.
In the fourth quarter of fiscal year 2008, the Company identified approximately $36 million of tax-related errors from
periods prior to fiscal year 2006. Accordingly, the Consolidated Balance Sheet for March 31, 2007 presented in this
Form 10-K has been adjusted to reduce “Deferred income taxes” in the noncurrent assets section of the balance sheet
by $26 million and increase “Federal, state and foreign income taxes payable” by $10 million to reflect the correction of
these errors, with a corresponding $36 million reduction recorded as a reduction to “Retained earnings.” The Company
also recorded an adjustment to “Retained earnings” as of March 31, 2005 in the Consolidated Statements of
Stockholders’ Equity. The correction of these errors does not impact the Consolidated Statements of Operations or the
Statements of Cash Flows contained in this Form 10-K and these corrections were not considered material to prior
period financial statements.
(u) Statements of Cash Flows: Interest payments for the fiscal years ended March 31, 2008, 2007 and 2006 were
approximately $133 million, $112 million and $114 million, respectively. Income taxes paid for these fiscal years were
approximately $374 million, $296 million and $207 million, respectively.
Note 2 — Acquisitions and Divestitures
Acquisitions
Acquisitions are accounted for as purchases and, accordingly, their results of operations have been included in the
Consolidated Financial Statements since the dates of their acquisitions. The purchase price for the Company’s
acquisitions is allocated to the assets acquired and liabilities assumed from the acquired entity. These allocations are
based upon estimates which may be revised within one year of the date of acquisition as additional information
becomes available. The Company’s acquisitions during fiscal year 2008 were considered immaterial compared with the
results of the Company’s operations and therefore purchase accounting information and pro-forma disclosure are not
presented.
During fiscal year 2007, the Company acquired the following companies:
•Cybermation, Inc., a privately held provider of enterprise workload automation solutions.
•MDY Group International, Inc., a privately held provider of enterprise records management software and services.
•XOsoft, Inc., a privately held provider of complete recovery management solutions.
•Cendura Corporation, a privately held provider of IT service management service delivery solutions.
The total cost of these acquisitions was approximately $173 million, net of approximately $20 million of cash and cash
equivalents acquired and excluding a holdback of approximately $9 million.
The acquisitions of Cybermation, MDY, XOsoft and Cendura were accounted for as purchases and accordingly, their
results of operations have been included in the Consolidated Financial Statements since the dates of their acquisitions.
The Company recorded a charge of approximately $10 million for in-process research and development costs associated
with the acquisition of XOsoft during the second quarter of fiscal year 2007. Total goodwill recognized in these
transactions amounted to approximately $117 million, which includes a downward adjustment recorded in fiscal year
81