Computer Associates 2009 Annual Report Download - page 81

are subject to different levels of protection depending upon the jurisdiction. The Company historically has not
experienced any losses in its cash and cash equivalent portfolios.
Amounts included in accounts receivable expected to be collected from customers, as disclosed in Note 6, “Trade and
Installment Accounts Receivable,” have limited exposure to concentration of credit risk due to the diverse customer base
and geographic areas covered by operations. Unbilled amounts due under the Company’s prior business model that are
expected to be collected from customers include one large IT outsourcer with a license arrangement that extends
through fiscal year 2012 with a net unbilled receivable balance of approximately $232 million at March 31, 2009.
Prior to fiscal year 2001, the Company sold individual accounts receivable from certain financial institutions to a third
party subject to certain recourse provisions. The outstanding principal balance subject to recourse of these receivables
was approximately $38 million and $81 million as of March 31, 2009 and March 31, 2008, respectively. As of
March 31, 2009, the Company has established a liability for the fair value of the recourse provisions of approximately
$2 million associated with these receivables.
(m) Cash, Cash Equivalents and Marketable Securities: All financial instruments purchased with an original maturity of
three months or less are considered cash equivalents. The Company has determined that all of its investment securities
should be classified as available-for-sale. Available-for-sale securities are carried at fair value, with unrealized gains and
losses reported in the Stockholders’ Equity of the balance sheet under the caption “Accumulated Other Comprehensive
Loss.” The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to
maturity. Such amortization and accretion is included in the “Interest expense, net” line item in the Consolidated
Statements of Operations. Realized gains and losses and declines in value judged to be other than temporary on
available-for-sale securities are included in the “General, and administrative” line item in the Consolidated Statements of
Operations. The cost of securities sold is based on the specific identification method. Interest and dividends on securities
classified as available-for-sale are included in the “Interest expense, net” line item in the Consolidated Statements of
Operations.
The Company’s cash, cash equivalents and marketable securities are held in numerous locations throughout the world,
with approximately 50% residing outside the United States at March 31, 2009. Marketable securities were less than
$1 million at March 31, 2009 and March 31, 2008.
Total interest income, which primarily related to the Company’s cash and cash equivalent balances, for the fiscal years
ended March 31, 2009, 2008 and 2007 was approximately $70 million, $92 million and $66 million, respectively, and is
included in the “Interest expense, net” line item in the Consolidated Statements of Operations.
(n) Restricted Cash: The Company’s insurance subsidiary requires a minimum restricted cash balance of $50 million. In
addition, the Company has other restricted cash balances, including cash collateral for letters of credit. The total amount
of restricted cash as of March 31, 2009 and 2008 was approximately $56 million and $62 million, respectively, and is
included in the “Other noncurrent assets, net” line item on the Consolidated Balance Sheets.
(o) Long-Lived Assets
Property and Equipment: Land, buildings, equipment, furniture, and improvements are stated at cost. Depreciation and
amortization are provided over the estimated useful lives of the assets by the straight-line method. Building and
improvements are estimated to have 5- to 40-year lives, and the remaining property and equipment are estimated to
have 3- to 7-year lives.
A summary of property and equipment is as follows:
(DOLLARS IN MILLIONS) 2009 2008
MARCH 31,
Land and buildings $ 199 $ 256
Equipment, furniture, and improvements 1,258 1,236
1,457 1,492
Accumulated depreciation and amortization (1,015) (996)
Net property and equipment $ 442 $ 496
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