Computer Associates 2005 Annual Report Download - page 64

Table of Contents
operating activities was positively impacted by a reduction in cash paid for interest of approximately $17 million. Cash generated from
continuing operations activities for the fiscal year ended March 31, 2005 was negatively impacted by the $75 million payment in
connection with agreements reached with the USAO and the SEC. Refer to “Other matters” below for additional information.
During fiscal year 2005, we issued $1 billion of Senior Notes and redeemed approximately $660 million in outstanding debt compared to
a net debt reduction of approximately $826 million in fiscal year 2004. During fiscal year 2004, we used existing cash balances and cash
from operations to repay approximately $826 million in outstanding debt compared to a net debt reduction of approximately
$730 million in fiscal year 2003.
As of March 31, 2005 and 2004, our debt arrangements consisted of the following:
2005 2004
Maximum
Outstandin
g
Maximu
m
Outstandin
g
Debt Arrangements Available Balance
Availabl
e Balance
(in millions)
2002 Revolving Credit Facility (terminated December 2004) $
––
$
––
$ 470 $
––
2004 Revolving Credit Facility (expires December 2008) 1,000
––
––
––
Commercial paper 400
––
400
––
6.375% Senior Notes due April 2005
––
825
––
825
5.000% Convertible Senior Notes (called March 2005)
––
––
––
660
6.500% Senior Notes due April 2008
––
350
––
350
4.750% Senior Notes due November 2009
––
500
––
––
1.625% Convertible Senior Notes due December 2009
––
460
––
460
5.625% Senior Notes due November 2014
––
500
––
––
International line of credit 5
––
5
––
Other
––
1
––
5
Total $ 2,636 $ 2,300
At March 31, 2005, we had $2.636 billion in debt and $3.125 billion in cash and marketable securities. Our net liquidity position was,
therefore, approximately $489 million.
We expect to use existing cash balances and future cash generated from operations to pay our debt balances as they mature and, based on
historical precedent, we expect to continue to generate annual cash flow from operations in excess of $1 billion.
In December 2004, we entered into a new unsecured, revolving credit facility (the 2004 Revolving Credit Facility). The maximum
amount available at any time under the 2004 Revolving Credit Facility is $1 billion. The 2004 Revolving Credit Facility expires
December 2008 and no amount was drawn as of March 31, 2005. Refer to Note 6, “Debt” of the Consolidated Financial Statements for
additional information.
The new credit facility replaces the 2002 Revolving Credit Facility that was due to expire in January 2005. The 2002 Revolving Credit
Facility was terminated effective December 2, 2004 and was undrawn as of that date.
In November 2004, we issued an aggregate of $1 billion of unsecured senior notes (2005 Senior Notes) in a transaction pursuant to
Rule 144A. We issued $500 million of 4.75%, 5-year notes due November 2009 and $500 million of 5.625%, 10-year notes due
November 2014. Refer to Note 6, “Debt” of the Consolidated Financial Statements for additional information.
In March 2005, we redeemed our outstanding $660 million aggregate principal amount 5% Convertible Senior Notes (5% Notes) that
were due March 15, 2007. The 5% Notes were issued in fiscal year 2002 and were eligible to be called for redemption as of March 2005.
Substantially all of the 5% Note holders converted their holdings into common stock of the Company (aggregate 27 million shares).
Refer to Note 6, “Debt” of the Consolidated Financial Statements for additional information.
In March 2005, we exercised our call spread repurchase option that was entered into concurrently with the issuance of the 5%
Convertible Senior Notes in 2002, to buy 27 million shares of our common stock at the exercise price of $24.83 (aggregate price
$673 million).
In April 2005, we repaid, as scheduled, the $825 million 6.375% Senior Notes with our available cash balances. In the remainder of
fiscal year 2006, we expect to use cash balances for acquisitions of strategic technology, for continued investment in product
development and enhancements, to pay dividends, and to repurchase our common stock, as approved by the Board of Directors.
29