-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LlpaT4HjsBKu0G2u/Ah8Z8f3qin6L2/WTPjkFVVLAcYlQRAYJ74gNpBp2b8Ux8Ho p0PR9ZkUaQdZK5CgdUrJQg== 0000356028-97-000009.txt : 19970926 0000356028-97-000009.hdr.sgml : 19970926 ACCESSION NUMBER: 0000356028-97-000009 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970330 FILED AS OF DATE: 19970925 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER ASSOCIATES INTERNATIONAL INC CENTRAL INDEX KEY: 0000356028 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 132857434 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-09247 FILM NUMBER: 97685591 BUSINESS ADDRESS: STREET 1: ONE COMPUTER ASSOCIATES PLAZA CITY: ISLANDIA STATE: NY ZIP: 11788 BUSINESS PHONE: 5163425224 11-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------------------- FORM 11-K (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the Fiscal Year ended March 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from _______ to _________ Commission file number 0-10180 COMPUTER ASSOCIATES SAVINGS HARVEST PLAN (Full title of the Plan) Computer Associates International, Inc. One Computer Associates Plaza Islandia, NY 11788-7000 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) ITEM 1. Financial Statements and Exhibits. (a) The financial statements filed herewith consist of the following: Report of Independent Auditors F-1 Statement of Net Assets Available for Benefits March 30, 1997 and 1996 F-2 Statements of Changes in Net Assets Available for Benefits Years Ended March 30, 1997 and 1996 F-4 Notes to Financial Statements - March 30, 1997 F-6 ITEM 27a - Schedule of Assets Held for Investment purposes as of March 30, 1997 F-13 ITEM 27d - Schedule of Reportable Transactions as of March 30, 1997 F-14 (b) The exhibits filed in connection with this Annual Report are as follows: Exhibit Number Document Exhibit 23(a) Consent of Ernst & Young SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Plan Committee (who administer the Computer Associates Savings Harvest Plan) have duly caused this Annual Report to be signed by the undersigned thereunto duly authorized. COMPUTER ASSOCIATES SAVINGS HARVEST PLAN Date: September 25, 1996 By:/s/Peter Schwartz ------------------ Peter Schwartz Member, Plan Committee Financial Statements and Schedules Computer Associates Savings Harvest Plan Years ended March 30, 1997 and 1996 with Report of Independent Auditors Computer Associates Savings Harvest Plan Financial Statements and Schedules Years ended March 30, 1997 and 1996
Contents Report of Independent Auditors 1 Financial Statements Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 4 Notes to Financial Statements 6 Schedules Item 27(a) - Schedule of Assets Held for Investment Purposes 13 Item 27(d) - Schedule of Reportable Transactions 14
Schedules 1 Report of Independent Auditors Administrative Committee Computer Associates Savings Harvest Plan We have audited the accompanying statements of net assets available for benefits of Computer Associates Savings Harvest Plan as of March 30, 1997 and 1996, and the related statements of changes in net assets available for the benefits for the years then ended. These financial statements are the responsibility of the Plans management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Computer Associates Savings Harvest Plan at March 30, 1997 and 1996, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules 27(a) schedule of assets held for investment purposes as of March 30, 1997 and 27(d) schedule of reportable transactions for the year ended March 30, 1997, are presented for purposes of complying with the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the 1997 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1997 financial statements taken as a whole. September 15, 1997 2 Computer Associates Savings Harvest Plan Statement of Net Assets Available for Benefits March 30, 1997
U.S. Equity Growth and Computer Retirement Intermediate Puritan Index Magellan Income Associates Money Market Participant Total Bond Fund Fund Portfolio Fund Portfolio Stock Fund Portfolio Loans Fund ---------------------------------------------------------------------------------------------------------------- Assets Investments, at fair value $345,246,903 $17,230,435 $44,659,246 $26,241,453 $32,326,423 $33,061,068 $153,194,518 $38,533,760 Loans receivable from employees 9,748,596 $9,748,596 Contributions receivable: Computer Associates International Inc. 11,592,381 11,592,381 ---------------------------------------------------------------------------------------------------------------- Total assets 366,587,880 17,230,435 44,659,246 26,241,453 32,326,423 33,061,068 164,786,899 38,533,760 9,748,596 ---------------------------------------------------------------------------------------------------------------- Net assets available for benefits $366,587,880 $17,230,435 $44,659,246 $26,241,453 $32,326,423 $33,061,068 $164,786,899 $38,533,760 $9,748,596 ================================================================================================================ See accompanying notes.
3 Computer Associates Savings Harvest Plan Statement of Net Assets Available for Benefits March 30, 1996
U.S. Equity Growth and Computer Retirement Intermediate Puritan Index Magellan Income Associates Money Market Participant Total Bond Fund Fund Portfolio Fund Portfolio Stock Fund Portfolio Loans Fund ---------------------------------------------------------------------------------------------------------------- Assets Investments, at fair value $398,299,929 $22,818,847 $53,919,515 $20,922,304 $52,694,872 $26,850,494 $162,934,025 $58,159,872 Loans receivable from employees 9,590,175 $9,590,175 Contributions receivable: Computer Associates International Inc. 16,529,376 16,529,364 12 ---------------------------------------------------------------------------------------------------------------- Total assets 424,419,480 22,818,847 53,919,515 20,922,304 52,694,872 26,850,494 179,463,389 58,159,884 9,590,175 ---------------------------------------------------------------------------------------------------------------- Net assets available for benefits $424,419,480 $22,818,847 $53,919,515 $20,922,304 $52,694,872 $26,850,494 $179,463,389 $58,159,884 $9,590,175 ================================================================================================================ See accompanying notes.
4 Computer Associates Savings Harvest Plan Statement of Changes in Net Assets Available for Benefits Year ended March 30, 1997
U.S. Equity Growth and Computer Retirement Intermediate Puritan Index Magellan Income Associates Money Market Participant Total Bond Fund Fund Portfolio Fund Portfolio Stock Fund Portfolio Loans Fund ---------------------------------------------------------------------------------------------------------------- Additions Contributions: Computer Associates International, Inc. $ 11,628,366 $ 290,866 $ 649,514 $ 416,269 $ 810,130 $ 701,164 $ 13,022,371 $ (4,261,948)$ Employees 8,189,022 1,010,009 2,386,412 1,722,230 3,166,087 2,927,345 6,060,440 (9,083,501) Interest income from investment 21,286,436 1,412,399 6,279,134 726,820 8,069,690 1,768,975 253,100 2,776,318 Net realized and unrealized appreciation (depreciation) in fair value of investments (27,891,719) (479,381) (544,902) 3,594,830 (4,215,570) 2,691,058 (28,937,754) Transfer from other plans 466,518 419,679 46,839 ---------------------------------------------------------------------------------------------------------------- Total additions 13,678,623 2,233,893 8,770,158 6,460,149 7,830,337 8,088,542 ( 9,601,843)(10,149,452) 46,839 Deductions Withdrawals and distributions (71,383,710) (4,109,393)(11,820,192) (3,522,806)(14,233,903) (6,445,344) (16,531,198)(13,644,033) (1,076,841) Interfund transfers, net (3,708,852) (6,203,974) 2,382,713 (13,962,939) 4,570,344 11,460,486 4,273,799 1,188,423 Administrative expenses (126,513) (4,060) (6,261) (907) (1,944) (2,968) (3,935) (106,438) ---------------------------------------------------------------------------------------------------------------- Total (deductions) additions (71,510,223) (7,822,305)(18,030,427) (1,141,000)(28,198,786) (1,877,968) (5,074,647) (9,476,672) 111,582 ================================================================================================================ Net additions (deductions) (57,831,600) (5,588,412)( 9,260,269) 5,319,149 (20,368,449) 6,210,574 (14,676,490)(19,626,124) 158,421 Net assets available for benefits at beginning of year 424,419,480 22,818,847 53,919,515 20,922,304 52,694,872 26,850,494 179,463,389 58,159,884 9,590,175 ---------------------------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $366,587,880 $17,230,435 $44,659,246 $26,241,453 $32,326,423 $ 33,061,068 $164,786,899 $38,533,760 $9,748,596 ================================================================================================================ See accompanying notes.
5 Computer Associates Savings Harvest Plan Statement of Changes in Net Assets Available for Benefits Year ended March 30, 1996
U.S. Equity Growth and Computer Retirement Intermediate Puritan Index Magellan Income Associates Money Market Participant Total Bond Fund Fund Portfolio Fund Portfolio Stock Fund Portfolio Loans Fund ---------------------------------------------------------------------------------------------------------------- Additions Contributions: Computer Associates International, Inc. $ 19,790,229 $ 381,171 $ 767,204 $ 342,398 $ 943,182 $ 603,760 $ 17,518,295 $ ( 765,781)$ Employees 35,861,049 1,346,484 2,805,215 1,396,309 4,004,080 2,478,992 4,344,268 19,485,701 Interest income from investment 11,951,440 1,459,072 2,900,995 550,506 3,432,148 1,229,913 247,958 2,130,848 Net realized and unrealized appreciation in fair value of investments 95,412,986 217,078 6,437,803 4,150,264 4,614,843 4,519,934 75,473,064 Transfer from other plans 44,722,875 4,386,601 11,665,316 19,534,997 7,444,453 1,691,508 ---------------------------------------------------------------------------------------------------------------- Total additions 207,738,579 7,790,406 24,576,533 6,439,477 32,529,250 8,832,599 97,583,585 28,295,221 1,691,508 Deductions Withdrawals and distributions (27,740,675) (1,686,679)( 4,190,512) (1,104,688)( 5,183,540) (1,835,053) ( 5,888,672)( 6,951,273) ( 900,258) Interfund transfers, net (2,684,749) (7,330,389) 1,834,083 1,220,019 5,630,115 ( 6,542,772) 6,730,663 1,143,030 Administrative expenses (181,211) (5,182) (7,419) (584) (1,514) (2,660) (3,168) (160,684) ---------------------------------------------------------------------------------------------------------------- Total (deductions) additions (27,921,886) (4,376,610)(11,528,320) 728,811 ( 3,965,035) 3,792,402 (12,434,612) ( 381,294) 242,772 ================================================================================================================ Net additions 179,816,693 3,413,796 13,048,213 7,168,288 28,564,215 12,625,001 85,148,973 27,913,927 1,934,280 Net assets available for benefits at beginning of year 244,602,787 19,405,051 40,871,302 13,754,016 24,130,657 14,225,493 94,314,416 30,245,957 7,655,895 ---------------------------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $424,419,480 $22,818,847 $53,919,515 $20,922,304 $52,694,872 $ 26,850,494 $179,463,389 $58,159,884 $9,590,175 ================================================================================================================ See accompanying notes.
6 Computer Associates Savings Harvest Plan Notes to Financial Statements March 30, 1997 1. Description of the Plan General The following description of the Computer Associates Savings Harvest Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plans provisions. The Plan is a defined contribution plan covering all eligible salaried employees. The Plan has been amended to allow an employee to participate in the Plan with respect to employee contributions as of the first of the month following date of hire. This change was effective November 1, 1995. Eligibility with respect to employer matching and discretionary contributions occurs in the month following completion of one full year of service to Computer Associates International, Inc. (the Company). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). As a result of an acquisition by the Plan sponsor, the assets of the Preferred Systems, Inc. 401(k) Savings Plan were transferred into the Plan during the Plan year ended March 30, 1997. Substantially all the assets of the Legent Retirement Security were transferred into the Plan during the Plan year end March 30, 1996, with the remaining assets being transferred into the Plan during the Plan year ended March 30, 1997. The Plan sponsor also acquired Cheyenne Software, Inc. during the plan year ended March 30, 1997, however the assets of the Cheyenne Software, Inc. 401(k) Plan were not transferred into the Plan until the first quarter of the 1998 Plan year. The Plan has been amended for these acquisitions. Contributions During each payroll period, Plan participants may elect to contribute a percentage of their base compensation ranging from 2% to 15%. Each participant can change this election at any time but not more than once quarterly. To comply with the Tax Reform Act of 1986, pre-tax contributions elected by any participant may not exceed $9,500 and $9,240 for the calendar years ended December 31, 1996 and 1995, respectively. Participants may contribute on an after-tax basis as well. 7 Computer Associates Savings Harvest Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) For eligible participants, the Company makes a matching contribution to the Plan on behalf of each participant equal to 50% of such participants contribution up to a maximum of 2.5% of the participants base compensation. (Contributions are subject to certain IRS limitations).The matching contributions for the years ended March 30, 1997 and 1996 were $4,946,628 and $4,543,334, respectively. During the 1997 Plan year, substantially all matching contributions were funded from Plan forfeitures. In addition to its matching contribution, the Company may contribute to the Plan on behalf of eligible participants, a discretionary contribution in an amount that the Board of Directors of the Company may, in its sole discretion, determine. The discretionary contributions for the years ended March 30, 1997 and 1996 were $15,592,381 and $16,529,376, respectively. The discretionary contribution is allocated to each participant generally in the same ratio that the participants base compensation for the Plan year bears to the base compensation of all participants for such Plan year. The discretionary contribution for the year ended March 30, 1997 was funded with $4,000,000 from Plan forfeitures and 263,463 common shares of the Company valued at $11,592,381. The Plan was amended during the year to allow for the use of forfeitures for company discretionary contributions. The discretionary contribution for the year ended March 30, 1996 included 228,385 common shares of the Company valued at $16,529,364. Participant Accounts A separate account is established and maintained in the name of each participant and reflects the participants balance invested therein. Such balance includes earnings and losses allocated to the participants accounts based upon the percentage investment of the account balance to the total fund balances. 8 Computer Associates Savings Harvest Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) Vesting The matching and discretionary contributions made by the Company vest as follows: <3 years of service 0% Vested >3 but <4 years of service 20% Vested >4 but <5 years of service 40% Vested >5 but <6 years of service 60% Vested >6 but <7 years of service 80% Vested >7 years of service 100% Vested In addition, 100% vesting occurs upon death or total disability of a participant, upon attainment of normal retirement age, or upon termination of the Plan. Investment Options The assets of the Plan are invested by Fidelity in seven separate funds: Fidelity Intermediate Bond Fund, which invests in high and upper medium grade fixed income obligations with intermediate maturities. Fidelity Puritan Fund, which invests in a wide variety of securities of U.S. and foreign issuers, including some emerging markets. Fidelity Magellan Fund, which invests in common stock and securities convertible to common stock. Fidelity Growth and Income Portfolio, which invests in common stock, securities convertible to common stock, preferred stock and fixed income securities. U.S. Equity Index, which invests primarily in the common stock of the 500 companies that make up the S&Ps 500 index. Computer Associates Stock Fund, which is invested in the common stock of the Company. 9 Computer Associates Savings Harvest Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) Fidelity Retirement Money Market Portfolio, which invests in high quality, U.S. dollar denominated money market instruments. Participants may direct future contributions or transfer their current investment balances between funds on a daily basis in increments of 1%. Effective May 1, 1997, the Company added the Fidelity Diversified International Fund to the investment options available to Plan participants. The Fidelity Diversified International Fund is invested primarily in stocks outside the United States that are included in the Morgan Stanley EAFE Index. Payment of Benefits The Plan provides for benefit distributions to Plan participants or their beneficiaries upon the participants retirement, termination of employment or death. Any participant may apply to withdraw all or part of his/her vested account balance subject to specific hardship withdrawal provision criteria in the Plan and the approval of the Plan Committee. Participant Loans Receivable Any participant may take a loan from his/her account based upon certain provisions of the Plan being met. Upon the death, retirement or termination of employment of the participant, the Plan may deduct the total unpaid balance or any portion thereof from any payment or distribution to which the participant or his beneficiaries may be entitled. Loans bear interest at market rates and are fixed at the time the loan is applied for. The rate at March 30, 1997 was 9.25%. All loans must be repaid in equal bimonthly installments. Loans generally extend from one to five years. Expense Allocation To the extent that the costs of recordkeeping and administration of the funds are not covered by Plan forfeitures, they are borne by the Plan sponsor, (the Company). Such costs for Plan years 1997 and 1996 were $98,002 and $152,711, respectively, and were covered by Plan forfeitures. 10 Computer Associates Savings Harvest Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 2. Significant Accounting Policies Valuation of Investments Investments in Fidelity funds and Computer Associates Stock Fund are stated at fair value based upon quoted prices in published sources. The realized net gain or loss on sale of investments is the difference between the proceeds received and the average cost of investments sold. The unrealized net gain or loss is the difference between the fair value and the cost of investments for each year. These combined amounts are included in the statement of changes in net assets available for benefits. 11 Computer Associates Savings Harvest Plan Notes to Financial Statements (continued) 3. Investments The following investments represent 5% or more of the Plans net assets at March 30, 1997, which are represented at fair value as determined by quoted market prices.
Number of Units Fair Value ------------------------ Intermediate Bond Fund 1,740,448 $ 17,230,435 Puritan Fund 2,575,504 44,659,246 U.S. Equity Index Portfolio 952,849 26,241,453 Magellan Fund 403,073 32,326,423 Growth and Income Portfolio 1,067,175 33,061,068 Computer Associates Stock Fund 4,166,291 153,194,518 Retirement Money Market Portfolio 38,533,760 38,533,760
4. Income Tax Status The Internal Revenue Service has ruled that the Plan qualifies under Section 401(a) of the Internal Revenue Code (the Code), and its related trust is therefore exempt from Federal income tax under Section 501 of the Code. The Plan was restated in its entirety effective March 31, 1992. The Company has received a favorable tax determination letter from the Internal Revenue Service dated June 12, 1995 and is in compliance with the Tax Reform Act of 1986. The Company is not aware of any course of action or series of events that might adversely affect the qualified status of the Plan. 12 Computer Associates Savings Harvest Plan Notes to Financial Statements (continued) 5. Reconciliation of Financial Statements to form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
March 30,1997 ------------- Net assets available for benefits per the financial statements $ 366,587,880 Amounts allocated to withdrawing participants 3,628,748 ------------- Net assets available for benefits per the Form 5500 $ 362,959,132 =============
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
Year ended March 30, 1997 ------------- Benefits paid to participants per the financial statements $ 71,383,710 Add: Amounts allocated to withdrawing participants at March 30, 1997 3,628,748 Less: Amounts allocated to withdrawing participants at March 30, 1996 2,210,178 ------------- Benefits paid to participants per the form 5500 $ 72,802,280 =============
Schedules 13 Computer Associates Savings Harvest Plan Item 27(a) Schedule of Assets Held for Investment Purposes March 30, 1997
Identity of Issue, Borrower, Number Current Lessor or Similar Party of Units Cost Value - --------------------------------------------------------------------- Fidelity Intermediate Bond Fund 1,740,448 $ 18,099,299 $ 17,230,435 Fidelity Puritan Fund 2,575,504 41,919,792 44,659,246 Fidelity U.S. Equity Index Portfolio 952,848 20,008,262 26,241,453 Fidelity Magellan Fund 402,072 31,759,428 32,326,423 Fidelity Growth and Income Portfolio 1,067,175 28,197,797 33,061,068 Fidelity Retirement Money Market Portfolio 38,533,760 38,533,760 38,533,760 Computer Associates Stock Fund 4,166,290 122,713,972 153,194,518 Participant Loans* 9,748,596 9,748,596 ------------------------- Total $310,980,906 $354,995,499 *Details available upon request.
14 Computer Associates Savings Harvest Plan Item 27(d) Schedule of Reportable Transactions Year ended March 30, 1997
Number of Purchase Number Sales Cost of Net Gain Identity of Party Involved Purchases Price of Sales Price Assets (Loss) - --------------------------------------------------------------------------------------------------------- Category (iii) a series of security transactions in excess of 5% of plan assets Computer Associates Stock Fund 252 $219,829,909 251 $200,631,662 $168,960,371 $31,671,291 Magellan Fund 251 27,234,423 247 43,387,302 44,217,773 (830,471) Growth and Income Portfolio 252 35,893,420 243 32,373,904 30,484,011 1,889,893 Retirement Money Market Portfolio 254 150,953,244 252 170,579,356 170,579,356 Puritan Fund 249 18,315,441 236 27,030,808 25,729,708 1,301,100 U.S. Equity Index Portfolio 251 17,271,728 234 15,547,409 13,682,759 1,864,650 There were no category (i), (ii) or (iv) reportable transactions during the period ended March 30, 1997.
EX-23 2 Exhibit 23 (a) Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-20797 and the Post Effective Amendment No. 1 to the said Registration Statement and Form S-8 No. 333-04801) pertaining to the Computer Associates Savings Harvest Plan of Computer Associates International, Inc. and in the related prospectus of our report dated September 15, 1997 with respect to the financial statements and schedules of the Computer Associates Savings Harvest Plan included in its Annual Report (Form 11-K) for the year ended March 30, 1997. Ernst & Young LLP New York, New York September 25, 1997 -----END PRIVACY-ENHANCED MESSAGE-----