Computer Associates 2012 Annual Report Download - page 50

Debt Arrangements
Our debt arrangements consisted of the following:
AT MARCH 31,
2012 2011
(in millions)
Revolving credit facility due August 2012 $— $ 250
Revolving credit facility due August 2016 ——
5.375% Notes due November 2019 750 750
6.125% Notes due December 2014, net of unamortized premium from fair value hedge of $27 and $15 527 515
Other indebtedness, primarily capital leases 29 42
Unamortized discount for Notes (5) (6)
Total debt outstanding 1,301 1,551
Less the current portion (14) (269)
Total long-term debt portion $ 1,287 $ 1,282
We have entered into interest rate swaps to convert $500 million of our 6.125% Notes into floating interest rate payments through
December 1, 2014. Under the terms of the swaps, we will pay quarterly interest at an average rate of 2.88% plus the three-month
LIBOR rate, and will receive payment at 5.625%. The LIBOR based rate is set quarterly three months prior to the date of the interest
payment. At March 31, 2012, the fair value of these derivatives was an asset of $27 million, of which $11 million is included in
“Other current assets” and $16 million is included in “Other noncurrent assets, net” in the Consolidated Balance Sheet. The carrying
value of the 6.125% Notes was adjusted by an amount that is equal and offsetting to the fair value of the swaps.
In April 2011, we repaid the $250 million outstanding balance of our revolving credit facility that was due August 2012. In August
2011, we replaced the revolving credit facility due August 2012 with a new revolving credit facility due August 2016. The maximum
committed amount available under the revolving credit facility due August 2016 is $1 billion. The facility also provides us with an
option to increase the available credit by an amount up to $500 million. This option is subject to certain conditions and the agreement
of the facility lenders.
At March 31, 2012, our senior unsecured notes were rated Baa2 (stable) by Moody’s Investor Services, BBB+ (stable) by Standard
and Poor’s, and BBB+ (stable) by Fitch Ratings.
For further information on our debt balances, refer to Note 9, “Debt,” in the Notes to the Consolidated Financial Statements.
Stock Repurchases
On May 12, 2011, our Board of Directors approved a stock repurchase program that authorized us to acquire up to an additional $500
million of our common stock, in addition to the previous $500 million program approved on May 12, 2010.
Under the $2.5 billion capital allocation program approved by our Board of Directors on January 23, 2012, we are authorized to
acquire up to $1.5 billion of our common stock through fiscal 2014, including $232 million remaining at December 31, 2011 under
our previous share repurchase authorizations described above. As part of the capital allocation program, we entered into an
accelerated share repurchase agreement in the fourth quarter of fiscal 2012 with a bank to purchase $500 million of our common
stock. The total number of shares repurchased will depend on our average stock price during the period of the agreement. Under the
agreement, we paid $500 million to the bank for an initial delivery of approximately 15 million shares and will either receive or
deliver additional shares at settlement. The fair market value of approximately 15 million shares on the date received was
approximately $375 million and is included in “Treasury stock” in our Consolidated Balance Sheet at March 31, 2012. The remaining
$125 million is included in “Additional paid-in capital” in our Consolidated Balance Sheet at March 31, 2012. The accelerated share
repurchase transaction is expected to be completed by the end of the first quarter of fiscal 2013. Including the initial accelerated share
repurchase delivery, we repurchased approximately 41 million shares our common stock for approximately $925 million during fiscal
2012. The timing and amount of share repurchases will be determined by our management based on evaluation of market conditions,
trading price, legal requirements, and other factors.
Dividends
We have paid cash dividends each year since July 1990. For fiscal 2012, 2011 and 2010, we paid annual cash dividends of $0.40,
$0.16 and $0.16 per share, respectively. We paid cash dividends of $0.05 per share in each of the first three quarters of fiscal 2012.
On January 23, 2012 our Board of Directors approved a capital allocation program that targets the return of up to $2.5 billion to
shareholders through fiscal 2014. This includes an increase in the annual dividend from $0.20 to $1.00 per share on our common
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