Computer Associates 2012 Annual Report Download - page 88

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Note 12 — Commitments and Contingencies
The Company leases real estate, data processing and other equipment with lease terms expiring through fiscal year 2023. Certain
leases provide for renewal options and additional rentals based on escalations in operating expenses and real estate taxes.
Rental expense, including short term leases, maintenance charges and taxes on leased facilities, was approximately $168 million,
$150 million and $145 million for fiscal years 2012, 2011 and 2010, respectively. Rental expense for fiscal years 2012, 2011 and
2010 included sublease income of approximately $9 million, $10 million and $18 million, respectively.
Future minimum lease payments under non-cancelable operating leases at March 31, 2012, were as follows:
FISCAL YEAR (in millions)
2013 $ 103
2014 91
2015 77
2016 60
2017 47
Thereafter 157
Total 535
Less income from sublease (23)
Net minimum operating lease payments $ 512
The Company has additional commitments to purchase goods and services of approximately $199 million in future periods,
approximately $195 million of which expires by fiscal year 2017.
Litigation: The Company, various subsidiaries, and certain current and former officers have been named as defendants in various
lawsuits and claims arising in the normal course of business. The Company believes that it has meritorious defenses in connection
with these lawsuits and claims, and intends to vigorously contest each of them.
Based on the Company’s experience, management believes that the damages amounts claimed in a case are not a meaningful
indicator of the potential liability. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to
predict the ultimate outcome of cases. In the opinion of the Company’s management based upon information currently available to
the Company, while the outcome of these lawsuits and claims is uncertain, the likely results of these lawsuits and claims against the
Company, either individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial
position, results of operations or cash flows, although the effect could be material to the Company’s results of operations or cash
flows for any interim reporting period. For some of these matters, the calculation of a range of reasonably possible loss is not possible
due to the stage of the matter and/or other particular circumstances of the matter. For others, a range of reasonably possible loss can
be calculated. For those matters for a which such a range can be calculated, the Company estimates that in the aggregate, the
reasonably possible range of loss is from zero to $30 million in addition to amounts, if any, that have been accrued for those matters.
The Company is obligated to indemnify its officers and directors under certain circumstances to the fullest extent permitted by
Delaware law. As a part of that obligation, the Company has advanced and will continue to advance certain attorneys’ fees and
expenses incurred by current and former officers and directors in various lawsuits and investigations.
Note 13 — Stockholders’ Equity
Stock Repurchases: In January 2012, the Company’s Board of Directors approved a $2.5 billion capital allocation program that
includes an authorization for the Company to acquire up to $1.5 billion of its common stock through fiscal year 2014. Included in this
amount is approximately $232 million remaining under the Company’s previously approved share repurchase authorization.
In January 2012, the Company entered into an Accelerated Share Repurchase (ASR) agreement with a bank under which the
Company will repurchase $500 million of its common stock. The total number of shares repurchased will depend on the Company’s
average stock price during the period of the agreement. Under the agreement, the Company 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
the Company’s Consolidated Balance Sheet at March 31, 2012. The remaining $125 million is included in “Additional paid-in
capital” in the Company’s Consolidated Balance Sheet at March 31, 2012. The ASR transaction is expected to be completed by the
end of the first quarter of fiscal year 2013.
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