Computer Associates 2007 Annual Report Download - page 62

Effect of Exchange Rate Changes
There was $93 million favorable impact to our cash flows in fiscal year 2007 predominantly due to the weakening of the
U.S. Dollar against the British pound and the euro, each by approximately 7%. In fiscal year 2006, we had a negative $63 million
impact to our cash flows, predominantly due to the weakening of the British pound and the euro against the U.S. dollar of
approximately 8% and 6%, respectively.
Other Matters
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, our 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%.
In March 2005, we pre-funded contributions to the CA Savings Harvest Plan, a 401(k) plan. We elected not to pre-fund our
contribution as of March 31, 2007 or 2006 as a result of IRS Treasury Regulations eliminating the tax benefit associated with
the pre-funding of elective and matching contributions.
Capital resource requirements as of March 31, 2007 and 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
$115 million and $146 million as of March 31, 2007 and 2006, respectively. As of March 31, 2007, 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.
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