Computer Associates 2006 Annual Report Download - page 72

Capital resource requirements as of March 31, 2006 consisted of lease obligations for office space, equipment,
mortgage and loan obligations, our ERP implementation, and amounts due as a result of product and company
acquisitions. Refer to “Contractual Obligations and Commitments” for additional information.
It is expected that existing cash, cash equivalents, marketable securities, the availability of borrowings under
existing and renewable credit lines and in the capital markets, and cash expected to be provided from operations will
be sufficient to meet ongoing cash requirements. We expect our long-standing history of providing extended
payment terms to our customers to continue.
We expect to use existing cash balances and future cash generated from operations to fund financing activities such
as the repayment of our debt balances as they mature as well as the repurchase of shares of common stock and the
payment of dividends as approved by our Board of Directors. Cash generated will also be used for investing
activities such as future acquisitions as well as additional capital spending, including our continued investment in
our ERP implementation.
Off-Balance Sheet Arrangements
We have commitments to invest approximately $3 million in connection with joint venture agreements.
Prior to fiscal year 2001, we sold individual accounts receivable under the prior business model to a third party
subject to certain recourse provisions. The outstanding principal balance subject to recourse of these receivables
approximated $146 million and $183 million as of March 31, 2006 and 2005, respectively. As of March 31, 2006,
we have not incurred any losses related to these receivables. Other than the commitments and recourse provisions
described above, we do not have any other off-balance sheet arrangements with unconsolidated entities or related
parties and, accordingly, off-balance sheet risks to our liquidity and capital resources from unconsolidated entities
are limited.
Contractual Obligations and Commitments
We have commitments under certain contractual arrangements to make future payments for goods and services.
These contractual arrangements secure the rights to various assets and services to be used in the future in the normal
course of business. For example, we are contractually committed to make certain minimum lease payments for the
use of property under operating lease agreements. In accordance with current accounting rules, the future rights and
related obligations pertaining to such contractual arrangements are not reported as assets or liabilities on our
Consolidated Balance Sheets. We expect to fund these contractual arrangements with cash generated from
operations in the normal course of business.
The following table summarizes our contractual arrangements at March 31, 2006 and the timing and effect that such
commitments are expected to have on our liquidity and cash flow in future periods. In addition, the table
summarizes the timing of payments on our debt obligations as reported on our Consolidated Balance Sheet as of
March 31, 2006.
Total
Less Than
1 Year
1-3
Years
3-5
Years
More than
5 Years
Payments Due by Period
(in millions)
Contractual Obligations
Long-term debt obligations (inclusive of
interest) ............................ $2,223 $ 85 $506 $1,048 $584
Operating lease obligations
(1)
.............. 612 128 186 111 187
Purchase obligations ..................... 118 50 37 25 6
Other long-term liabilities
(2)
............... 78 17 25 14 22
Total ................................ $3,031 $280 $754 $1,198 $799
(1) The contractual obligations for noncurrent operating leases include sublease income totaling $93 million expected to be received in the
following periods: $25 million (less than 1 year); $40 million (1-3 years); $18 million (3-5 years); and $10 million (more than 5 years).
(2) Other long-term liabilities primarily relate to operating expenses associated with operating lease obligations.
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