Computer Associates 2007 Annual Report Download - page 116

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Other Indebtedness
(IN MILLIONS)
MAXIMUM
AVAILABLE
OUTSTANDING
BALANCE
MAXIMUM
AVAILABLE
OUTSTANDING
BALANCE
2007 2006
YEAR ENDED MARCH 31,
International line of credit $20 $ — $5 $—
Capital lease obligations and other —23—6
International Line of Credit
An unsecured and uncommitted multi-currency line of credit is available to meet short-term working capital needs for the
Company’s subsidiaries operating outside the United States. The line of credit is available on an offering basis, meaning that
transactions under the line of credit will be on such terms and conditions, including interest rate, maturity, representations,
covenants and events of default, as mutually agreed between the Company’s subsidiaries and the local bank at the time of
each specific transaction. As of March 31, 2007, the amount available under this line totaled approximately $20 million and
approximately $3 million was pledged in support of bank guarantees. Amounts drawn under these facilities as of March 31,
2007 were minimal.
In addition to the above facility, the Company and its subsidiaries use guarantees and letters of credit issued by financial
institutes to guarantee performance on certain contracts. At March 31, 2007, none of these arrangements had been drawn
down by third parties.
Other
As of March 31, 2007 and 2006, the Company had various other debt obligations outstanding, which approximated
$23 million and $6 million, respectively.
At March 31, 2007, our senior unsecured notes were rated Ba1, BB, and BB+ by Moody’s Investor Service (Moody’s), Standard
and Poor’s (S&P) and Fitch Ratings (Fitch), respectively. The outlook on these unsecured notes is negative by all three rating
agencies. As of May 2007, the Company’s rating and outlook remained unchanged. Peak borrowings under all debt facilities
during the fiscal year 2007 totaled approximately $2.58 billion, with a weighted average interest rate of 5.4%.
The Company conducts an ongoing review of its capital structure and debt obligations as part of its risk management strategy.
Excluding the 2004 Revolving Credit Facility, the fair value of the Company’s long-term debt, including the current portion of
long-term debt, was $1.92 billion and $1.96 billion at March 31, 2007 and 2006, respectively. The fair value of long-term debt
is based on quoted market prices. See also Note 1, “Significant Accounting Policies”.
Interest expense for the fiscal years ended March 31, 2007, 2006, and 2005 was $122 million, $95 million, and $153 million,
respectively.
The maturities of outstanding debt are as follows:
(IN MILLIONS) 2008 2009 2010 2011 2012 THEREAFTER
YEAR ENDED MARCH 31,
Amount due $ 11 $ 1,109 $ 963 $ — $ — $ 500
Note 8 — 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 $196 million, $199 million, and $187 million for the
fiscal years ended March 31, 2007, 2006, and 2005, respectively. Rental expense for the fiscal years ended March 31, 2007,
2006, and 2005 includes sublease income of $31 million, $10 million and $16 million, respectively.
104