Computer Associates 2008 Annual Report Download - page 95

certain countries, the Company elected to provide termination benefits in excess of legal requirements subsequent to
the initial implementation of the plan. These additional costs have been recognized as incurred in accordance with
SFAS No. 146. The Company reduced the accrual for severance related costs by approximately $1 million for the fiscal
year ended March 31, 2008 due to revised estimates, and incurred approximately $22 million of severance costs for the
fiscal year ended March 31, 2007. The Company has recognized substantially all of the severance related costs
associated with the fiscal 2006 plan. Final payment of these amounts is dependent upon settlement with the works
councils in certain international locations.
Facilities Abandonment: The Company recorded the costs associated with lease termination or abandonment when the
Company ceased to utilize the leased property. Under SFAS No. 146, the liability associated with lease termination
and/or abandonment is measured as the present value of the total remaining lease costs and associated operating costs,
less probable sublease income. The Company accretes its obligations related to facilities abandonment to the then-
present value and, accordingly, recognizes accretion expense as a restructuring expense in future periods. The Company
incurred approximately $3 million in costs for the fiscal year ended March 31, 2008 and reduced the accrual for facilities
abandonment related costs by approximately $3 million for the fiscal year ended March 31, 2007 due to revised
estimates for sublease income on certain properties. The Company has recognized substantially all of the facilities
abandonment costs associated with the fiscal 2006 plan.
Accrued restructuring costs and changes in the accruals for fiscal years 2007 and 2008 associated with the fiscal 2006
plan were as follows:
(IN MILLIONS) SEVERANCE
FACILITIES
ABANDONMENT
Accrued balance as of March 31, 2006 $ 18 $ 27
Additions (reductions) 22 (3)
Payments (34) (10)
Accrued balance as of March 31, 2007 614
(Reductions) additions (1) 3
Payments (4) (7)
Accrued balance as of March 31, 2008 $1 $10
The liability balance for the severance portion of the remaining reserve is included in the “Salaries, wages and
commissions” line on the Consolidated Balance Sheets for the respective periods. The liability for the facilities
abandonment portion of the remaining reserve is included in the “Accrued expenses and other current liabilities” line
item on the Consolidated Balance Sheets.
Other
During the fiscal years ended March 31, 2008 and 2007, the Company incurred approximately $12 million and
$15 million, respectively, in legal fees in connection with matters under review by the Special Litigation Committee,
composed of independent members of the Board of Directors (refer to Note 8, “Commitments and Contingencies” in
these Notes to the Consolidated Financial Statements for additional information). Additionally, during fiscal 2008 and
fiscal 2007, the Company recorded impairment charges of approximately $6 million and $4 million, respectively, for
software that was capitalized for internal use but was determined to be impaired for future periods. The Company also
incurred an impairment charge of approximately $12 million in fiscal year 2007, relating to certain separately identifiable
intangible assets acquired in conjunction with a prior year acquisition that were not subject to amortization. During
fiscal year 2008, the Company incurred an approximate $4 million expense related to a loss on the sale of an
investment in marketable securities associated with the closure of an international location. During fiscal year 2007, the
Company incurred an approximate $4 million expense in connection with the Company’s Deferred Prosecution
Agreement entered into with the United States Attorney’s Office for the Eastern District of New York.
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