Computer Associates 2010 Annual Report Download - page 27

Fluctuations in foreign currencies could result in translation losses.
Our consolidated financial results are reported in U.S. dollars. Most of the revenue and expenses of our foreign subsidiaries are
denominated in local currencies. Given that cash is typically received over an extended period of time for many of our license
agreements and given that a substantial portion of our revenue is generated outside of the U.S., foreign currency fluctuations
could result in substantial changes in reported revenues and operating results due to the foreign currency impact upon
translation of these transactions into U.S. dollars.
In the normal course of business, we employ various strategies to manage these risks, including the use of derivative
instruments. To the extent that these strategies do not manage all of the risks inherent in our foreign exchange exposures
cause our earnings and expenses to fluctuate more than they would have had these strategies not been employed,
fluctuations of the exchange rates of foreign currencies against the U.S. dollar could materially adversely affect our business,
financial condition, operating results and cash flow.
Failure by us to execute our restructuring plans successfully could result in total costs that are greater than
expected or revenues that are less than anticipated.
We have announced restructuring plans, which include workforce reductions as well as global facility consolidations and other
cost reduction initiatives. We may have further workforce reductions or restructuring actions in the future. Risks associated
with these actions and other workforce management issues include delays in implementation of anticipated workforce
reductions, changes in restructuring plans that increase or decrease the number of employees affected, adverse effects on
employee morale and the failure to meet operational targets due to the loss of employees, any of which may impair our
ability to achieve anticipated cost reductions or may otherwise harm our business, which could materially adversely affect our
financial condition, operating results and cash flow.
We have outsourced various functions to third parties and these arrangements may not be successful, thereby
resulting in increased costs, or may adversely affect service levels and our public reporting.
We have outsourced various functions to third parties including certain development and other administrative functions and
may outsource additional functions to third-party providers in the future. We rely on those third parties to provide services on
a timely and effective basis. Although we periodically monitor the performance of these third parties and maintain
contingency plans in case the third parties are unable to perform as agreed, we do not ultimately control the performance of
our outsourcing partners. The failure of third-party outsourcing partners to perform as expected or as required by contract
could result in significant disruptions and costs to our operations, which could materially adversely affect our business,
financial condition, operating results and cash flow and our ability to file our financial statements with the Securities and
Exchange Commission timely or accurately.
Potential tax liabilities may materially adversely affect our results.
We are subject to income taxes in the United States and in numerous foreign jurisdictions. Significant judgment is required in
determining our worldwide provision for income taxes. In the ordinary course of our business, we engage in many
transactions and calculations where the ultimate tax determination is uncertain. We are regularly under audit by tax
authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related
litigation could be materially different from that which is reflected in our income tax provisions and accruals. Additional tax
assessments resulting from audit, litigation, or changes in tax laws may result in increased tax provisions or payments which
could materially adversely affect our financial condition, operating results and cash flow in the period or periods in which that
determination is made.
Item 2. Properties.
Our principal real estate properties are located in areas necessary to meet sales and operating requirements. All of the
properties are considered to be both suitable and adequate to meet current and anticipated operating requirements.
As of March 31, 2010, we leased 68 facilities throughout the United States and 92 facilities outside the United States. Our
lease obligations expire on various dates with the longest commitment extending to 2023. We believe all of our leases will be
renewable at market terms at our option as they become due.
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