Computer Associates 2015 Annual Report Download - page 23

We are regularly under audit by tax authorities. Although we believe our tax estimates are reasonable, the final
determination of tax audits and any related litigation could be materially different from that which is reflected in our
income tax provisions and accruals. Additional tax assessments resulting from audit, litigation or changes in tax laws may
result in increased tax provisions or payments which could materially adversely affect our business, financial condition,
operating results and cash flow in the period or periods in which that determination is made.
Changes in market conditions or our credit ratings could increase our interest costs and adversely affect the
cost of refinancing our debt and our ability to refinance our debt, which could materially adversely affect our
business, financial condition, operating results and cash flow.
At March 31, 2015, we had $1,263 million of debt outstanding, consisting mostly of unsecured senior note obligations. Refer
to Note 8, ‘‘Debt,’’ in the Notes to the Consolidated Financial Statements for the payment schedule of our long-term debt
obligations. Our senior unsecured notes are rated by Moody’s Investors Service, Fitch Ratings, and Standard and Poor’s.
These agencies or any other credit rating agency could downgrade or take other negative action with respect to our credit
ratings in the future. If our credit ratings were downgraded or other negative action is taken, we could be required to,
among other things, pay additional interest on outstanding borrowings under our principal revolving credit agreement. Any
downgrades could affect our ability to obtain additional financing in the future and may affect the terms of any such
financing.
We expect that existing cash, cash equivalents, marketable securities, cash provided from operations and our bank credit
facilities will be sufficient to meet ongoing cash requirements. However, our failure to generate sufficient cash as our debt
becomes due or to renew credit lines prior to their expiration could materially adversely affect our business, financial
condition, operating results and cash flow.
Failure by us to effectively execute on our announced workforce reductions, workforce rebalancing and facilities
consolidations could result in total costs that are greater than expected or revenues that are less than
anticipated.
In recent years, we have announced workforce reductions, workforce rebalancing, global facilities consolidations and other
cost reduction initiatives to reallocate resources of our business as part of our strategy. We may have further workforce
reductions, workforce rebalancing, global facilities consolidations and other cost reduction initiatives in the future. Risks
associated with these actions and other workforce management issues include delays in implementation, changes in plans
that increase or decrease the number of employees affected, adverse effects on employee morale and the failure to meet
operational targets due to the loss of employees, any of which may impair our ability to achieve anticipated cost reductions
or may otherwise harm our business, which could materially adversely affect our financial condition, operating results and
cash flow.
We have outsourced various functions to third parties. These arrangements may not be successful or fully
secure, which could result in increased costs or an increased chance of a cybersecurity breach, which could
adversely affect customer service levels.
We have outsourced various functions to third parties, including certain product development and administrative functions
and hosting for our SaaS business, and we may outsource additional functions to third parties in the future. These
outsourced functions may involve confidential and/or personally identifiable information. We rely on these third parties to
provide outsourced services on a timely and effective basis and to adequately address their own cybersecurity threats.
Although we periodically monitor the performance of these third parties and maintain contingency plans in case the third
parties are unable to perform as agreed, we do not ultimately control the performance of these third parties. The failure of
third-party outsourcing partners or vendors to perform as expected could result in significant disruptions and costs to our
operations or our customers’ operations, including the potential loss of personally identifiable information of our customers,
employees and business partners and could subject us to legal action by government authorities or private parties, which
could materially adversely affect our business, financial condition, operating results and cash flow.
Changes in generally accepted accounting principles may materially adversely affect our reported results of
operation or financial condition.
From time to time, the Financial Accounting Standards Board (‘‘FASB’’) issues new accounting principles, including the
May 2014 Accounting Standards Update (ASU) No. 2014-09 regarding revenue recognition (refer to ‘‘Note 1 — Significant
Accounting Policies’’ for additional information). Changes to existing rules, or changes to the interpretations of existing
rules, could lead to changes in our accounting practices, and such changes could materially adversely affect our reported
financial results.
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