Computer Associates 2007 Annual Report Download - page 58

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principally due to improvements in the receivable cycle attained in the third quarter which was primarily related to the transfer
of our interest in committed installments to third party financial institutions, as well as the timing of tax related disbursements.
Unbilled amounts under the Company’s business model are mostly collectible over one to six years. As of March 31, 2007, on
a cumulative basis, approximately 53%, 85%, 94%, 97%, 99% and 100% of amounts due from customers recorded under the
Company’s business model come due within fiscal years ended 2008 through 2013, respectively.
Unbilled amounts under the prior business model are collectible over one to five years. As of March 31, 2007, on a cumulative
basis, approximately 28%, 51%, 72%, 91%, and 100% of amounts due from customers recorded under the prior business
model come due within fiscal years ended 2008 through 2012, respectively.
Fiscal Year 2007 compared to Fiscal Year 2006
Operating Activities
Cash generated by continuing operating activities for fiscal year 2007 was $1.07 billion, representing a decline of
approximately $312 million compared to the prior year period. The decline was driven primarily by higher disbursements
to vendors and higher payroll related disbursements of approximately $318 million in the aggregate and higher cash payments
for income taxes of approximately $89 million. Additionally, collections from customers declined approximately $39 million.
The higher disbursements and lower collections were partially offset by $150 million in restitution fund payments in fiscal year
2006 that did not recur in fiscal year 2007. The higher payroll related disbursements were primarily the result of increased
personnel costs from acquisitions, as well as the funding of our fiscal year 2007 contributions to the CA Savings Harvest Plan,
a 401(k) plan, which were not pre-funded in fiscal year 2006, as well as higher payments for commissions due to increased
commission costs in the fourth quarter of fiscal year 2006.
Investing Activities
Cash used in investing activities for fiscal year 2007 was $202 million compared to $847 million for the prior year period. Cash
paid for acquisitions, net of cash acquired, was $212 million for fiscal year 2007 as compared to approximately $1.01 billion
for fiscal year 2006. Proceeds from the sale of assets were approximately $223 million for fiscal year 2007 which included
proceeds on the sale of our corporate headquarters in Islandia, New York of approximately $201 million. Proceeds received
from the sale of marketable securities in fiscal year 2007 declined approximately $354 million to $44 million as compared to
the prior fiscal year.
Financing Activities
Cash used in financing activities for fiscal year 2007 was $515 million compared to $1.47 billion in the prior fiscal year. The
cash used in fiscal year 2007 was primarily the result of the repurchase of approximately 51 million shares for $1.21 billion,
partly offset by new borrowings of $750 million under the Company’s $1 billion revolving credit facility.The cash used in fiscal
year 2006 was primarily the result of the $912 million repayment of the Company’s 6.375% Senior Notes and the 3% Concord
Convertible Notes, as well as share repurchases of $590 million.
Fiscal Year 2006 compared to Fiscal Year 2005
Operating Activities
Cash generated from continuing operating activities for fiscal year 2006 of $1.38 billion declined by approximately 10%
compared to the prior year’s cash from continuing operations of $1.53 billion. The decrease in cash generated from continuing
operations was the result of several factors. We experienced an increase of approximately $254 million in collections on
accounts receivable compared to the prior year.This increase was more than offset by year over year increases in payments for
taxes of approximately $195 million, incremental restitution fund payments of $75 million, and higher payments to vendors
and employees of approximately $165 million. The level of payments to vendors in fiscal year 2006 was favorably impacted by
our concerted effort to extend payment terms. In fiscal year 2006, we experienced an increase in accounts payable and
accrued expenses of approximately $106 million, compared to the prior year which experienced a decrease of $141 million.
Investing Activities
Cash used in investing activities was approximately $847 million compared to $740 million in the prior year. The change in
cash from investing activities primarily relates to $1.01 billion of cash used to fund fiscal year 2006 acquisitions. Partly
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