Computer Associates 2007 Annual Report Download - page 61

(aggregate price of $460 million), subject to the upper limit of $30.00 discussed below. The 1.625% Notes Call Spread is
designed to partially mitigate the potential dilution from conversion of the 1.625% Notes, depending upon the market price of
our common stock at such time. The 1.625% Notes Call Spread can be exercised in December 2009 at an exercise price of
$20.04 per share.To limit the cost of the 1.625% Notes Call Spread, an upper limit of $30.00 per share has been set, such that
if the price of the common stock is above that limit at the time of exercise, the number of shares eligible to be purchased will be
proportionately reduced based on the amount by which the common share price exceeds $30.00 at the time of exercise. As of
March 31, 2007, the estimated fair value of the 1.625% Notes Call Spread was approximately $122 million, which was based
upon independent valuations from third-party financial institutions.
3% Concord Convertible Notes
In connection with our acquisition of Concord in June 2005, we assumed $86 million in 3% convertible senior notes due 2023.
In accordance with the notes’ terms, we redeemed (for cash) the notes in full in July 2005.
International Line of Credit
An unsecured and uncommitted multi-currency line of credit is available to meet short-term working capital needs for our
subsidiaries operating outside the United States. The line of credit is available on an offering basis, meaning that transactions
under the line of credit will be on such terms and conditions, including interest rate, maturity, representations, covenants and
events of default, as mutually agreed between our subsidiaries and the local bank at the time of each specific transaction. As of
March 31, 2007, the amount available under this line totaled approximately $20 million and approximately $3 million was
pledged in support of bank guarantees. Amounts drawn under these facilities as of March 31, 2007 were minimal.
In addition to the above facility, we use guarantees and letters of credit issued by financial institutions to guarantee
performance on certain contracts. At March 31, 2007, none of these arrangements had been drawn down by third parties.
Share Repurchases, Stock Option Exercises and Dividends
We repurchased approximately $1.21 billion of common stock in connection with our publicly announced corporate buyback
program in fiscal year 2007 compared with $590 million in fiscal year 2006; we received approximately $41 million in
proceeds resulting from the exercise of Company stock options in fiscal year 2007 compared with $97 million in fiscal year
2006; and we paid dividends of $88 million, $93 million and $47 million in each of the fiscal years 2007, 2006 and 2005,
respectively.
As announced in April 2005, beginning in fiscal year 2006 we increased our annual cash dividend to $0.16 per share, which
was paid out in quarterly installments of $0.04 per share as and when declared by the Board of Directors.
On June 29, 2006, our Board of Directors authorized a plan to repurchase up to $2 billion of shares of our common stock in
fiscal year 2007. This new plan replaced the prior $600 million common stock repurchase plan. We expected to finance the
repurchase plan through a combination of cash on hand and bank financing.
On August 15, 2006, we announced the commencement of a $1 billion tender offer to repurchase outstanding common stock,
at a price not less than $22.50 and not greater than $24.50 per share.
On September 14, 2006, the expiration date of the tender offer, we accepted for purchase 41,225,515 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. Upon completion of the tender offer, we retired all of the shares that were repurchased. There were no share
repurchases in the third or fourth quarters of fiscal year 2007.
On May 23, 2007, we announced that as part of our previously authorized share repurchase plan of up to $2 billion, we will
repurchase $500 million of our shares under an Accelerated Share Repurchase program (ASR).We anticipate that the ASR will
be completed during the first half of fiscal year 2008. Any potential future repurchases will be considered in the normal course
of business.
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