Computer Associates 2005 Annual Report Download - page 127

Table of Contents
Note 6 — Debt (Continued)
The maturities of outstanding debt are as follows:
Year Ended March 31,
2006 2007 2008 2009 2010 Thereafter
(in millions)
Amount due $ 826 $
—
$
—
$ 350 $ 960 $ 500
Note 7 — Commitments and Contingencies
The Company leases real estate and certain data processing and other equipment with lease terms expiring through 2023. The leases are
operating leases and provide for renewal options and additional rentals based on escalations in operating expenses and real estate taxes.
The Company has no material capital leases.
Rental expense under operating leases for facilities and equipment was $216 million, $220 million, and $246 million for the years ended
March 31, 2005, 2004, and 2003, respectively. Rental expense for the years ended March 31, 2005, 2004, and 2003 includes sublease
income of $30 million, $42 million and $39 million, respectively.
Future minimum lease payments under non-cancelable operating leases at March 31, 2005, were as follows:
(in millions)
2006 $ 158
2007 122
2008 92
2009 69
2010 54
Thereafter 136
Total 631
Less income from sublease (132)
Net minimum operating lease payments $ 499
The Company has commitments to invest approximately $3 million in connection with joint venture agreements.
In prior fiscal years, the Company sold individual accounts receivable under the prior business model to an external third party subject to
certain recourse provisions. The outstanding principal balance of these receivables subject to recourse approximated $183 million and
$207 million as of March 31, 2005 and 2004, respectively.
Stockholder Class Action and Derivative Lawsuits Filed Prior to 2004
The Company, its former Chairman and CEO Charles B. Wang, its former Chairman and CEO Sanjay Kumar, and its Executive Vice
President Russell M. Artzt were defendants in a number of stockholder class action lawsuits, the first of which was filed July 23, 1998,
alleging that a class consisting of all persons who purchased the Company’ s common stock during the period from January 20, 1998
until July 22, 1998 were harmed by misleading statements, misrepresentations, and omissions regarding the Company’ s future financial
performance. These cases, which sought monetary damages, were consolidated into a single action in the United States District Court for
the Eastern District of New York (the Federal Court), the proposed class was certified, and discovery was completed. Additionally, in
February and March 2002, a number of stockholder lawsuits were filed in the Federal Court against the Company and Messrs. Wang,
Kumar, Ira H. Zar, the Company’ s former Chief Financial Officer, and in one instance, Mr. Artzt. The lawsuits generally alleged, among
other things, that the Company made misleading statements of material fact or omitted to state material facts necessary in order to make
the statements, in light of the circumstances under which they were made, not misleading in connection with the Company’ s financial
performance. Each of the named individual plaintiffs in the 2002 lawsuits sought to represent a class consisting of purchasers of the
Company’ s common stock and call options and sellers of put options for the period from May 28, 1999, through February 25, 2002. The
2002 cases were consolidated, and the Company’ s former independent auditor, Ernst & Young LLP, was named as a defendant. In
addition, in May 2003, a class action lawsuit captioned John A. Ambler v. Computer Associates International, Inc., et al. was filed in the
Federal Court. The complaint in this matter, a purported class action on behalf of the Computer Associates Savings Harvest Plan (the
CASH Plan) and the participants in, and beneficiaries of the CASH Plan for a class period running from March 30, 1998, through
May 30, 2003, asserted claims of breach of fiduciary duty under ERISA, the federal Employee Retirement Income Security Act. The
named defendants were the Company, the Company’ s Board of Directors, the CASH Plan, the Administrative Committee of the CASH
Plan, and the following current or formeremployees and/or former directors of the Company: Charles B. Wang; Sanjay Kumar; Ira Zar;
Russell M. Artzt; Peter A. Schwartz; Charles P. McWade; and various unidentified alleged fiduciaries of the CASH Plan. The complaint
alleged that the defendants breached their fiduciary duties by causing the CASH Plan to invest in Company securities and sought
damages in an unspecified amount.
80