Computer Associates 2008 Annual Report Download - page 53

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Off-Balance Sheet Arrangements
Prior to fiscal 2001, we sold individual accounts receivable to a third party subject to certain recourse provisions. The
outstanding principal balance subject to recourse of these receivables approximated $81 million and $115 million as of
March 31, 2008 and 2007, respectively. As of March 31, 2008, 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 as of March 31, 2008 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 Sheets as of March 31, 2008.
(IN MILLIONS) TOTAL
LESS THAN
1 YEAR
1–3
YEARS
3–5
YEARS
MORE THAN
5 YEARS
PAYMENTS DUE BY PERIOD
Contractual Obligations
Long-term debt obligations (inclusive of interest) $ 2,992 $ 451 $ 1,114 $ 866 $ 561
Operating lease obligations
1
787 147 215 137 288
Purchase obligations 93 61 31 1 —
Other obligations
2
223 107 65 33 18
Total $ 4,095 $ 766 $ 1,425 $ 1,037 $ 867
1 The contractual obligations for noncurrent operating leases include sublease income totaling $67 million expected to be received in the following periods: $24 million (less than 1 year);
$28 million (1–3 years); $14 million (3–5 years); and $1 million (more than 5 years).
2 Includes $55 million of estimated liabilities for unrecognized tax benefits.
As of March 31, 2008, we have no material capital lease obligations, either individually or in the aggregate.
Critical Accounting Policies and Estimates
We review our financial reporting and disclosure practices and accounting policies quarterly to help ensure that they
provide accurate and transparent information relative to the current economic and business environment. Note 1,
“Significant Accounting Policies” in the Notes to the Consolidated Financial Statements contains a summary of the
significant accounting policies that we use. Many of these accounting policies involve complex situations and require a
high degree of judgment, either in the application and interpretation of existing accounting literature or in the
development of estimates that impact our financial statements. On an ongoing basis, we evaluate our estimates and
judgments based on historical experience as well as other factors that are believed to be reasonable under the
circumstances. These estimates may change in the future if underlying assumptions or factors change.
We consider the following significant accounting polices to be critical because of their complexity and the high degree
of judgment involved in implementing them.
Revenue Recognition
We generate revenue from the following primary sources: (1) licensing software products; (2) providing customer
technical support (referred to as maintenance); and (3) providing professional services, such as consulting and
education. Revenue is recorded net of applicable sales taxes.
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