Computer Associates 2015 Annual Report Download - page 86

Rental expense, including short-term leases, maintenance charges and taxes on leased facilities, was approximately
$144 million, $144 million and $148 million for fiscal years 2015, 2014 and 2013, respectively. Rental expense does not
include rent expense associated with facilities exited as part of the Company’s Fiscal 2014 Plan or previous restructuring
plans and actions.
Future minimum lease payments under non-cancelable operating leases, including facilities exited as part of the Company’s
Fiscal 2014 Plan and previous restructuring plans and actions, at March 31, 2015 were as follows:
FISCAL YEAR (in millions)
2016 $80
2017 71
2018 64
2019 52
2020 47
Thereafter 85
Total $ 399
Less income from sublease (23)
Net minimum operating lease payments $ 376
The Company has additional commitments to purchase goods and services of approximately $235 million in future periods,
approximately $220 million of which expires by fiscal year 2020.
Litigation: The Company, various subsidiaries, and certain current and former officers have been or, from time to time, may
be named as defendants in various lawsuits and claims arising in the normal course of business. The Company may also
become involved with contract issues and disputes with customers, including government customers.
On March 24, 2014, the U.S. Department of Justice (DOJ) filed under seal in the United States District Court for the
District of Columbia a complaint against the Company in partial intervention under the qui tam provisions of the civil False
Claims Act (FCA). The underlying complaint was filed under seal by an individual plaintiff on August 24, 2009. On May 29,
2014, the case was unsealed. Both the DOJ and the individual plaintiff have filed amended complaints. The current
complaints relate to government sales transactions under the Company’s General Services Administration (GSA) schedule
contract, entered into in 2002 and extended until present through subsequent amendments. In sum and substance, the
current complaints allege that the Company provided inaccurate commercial discounting information to the GSA during
contract negotiations and that, as a result, the GSA’s contract discount was lower than it otherwise would have been. In
addition, the complaints allege that the Company failed to apply the full negotiated discount in some instances and to pay
sufficient rebates pursuant to the contract’s price reduction clause. In addition to FCA claims, the current complaints also
assert common law causes of action. The DOJ complaint seeks an unspecified amount of damages, including treble damages
and civil penalties. The complaint by the individual plaintiff alleges that the U.S. government has suffered damages in excess
of $100 million and seeks an unspecified amount of damages, including treble damages and civil penalties. The Company
filed motions to dismiss the current complaints. On March 31, 2015, the court issued decisions denying the Company’s
motion to dismiss the DOJ complaint, and granting in part and denying in part the Company’s motion to dismiss the
individual plaintiff’s complaint. On April 22, 2015, the court set a discovery schedule for the case. On October 30, 2014, the
GSA Suspension and Debarment Division issued a Show Cause Letter to the Company in response to the complaints
summarized above. In sum, the letter called on the Company to demonstrate why the U.S. government should continue to
contract with the Company, given the litigation allegations made in these complaints. On December 19, 2014, the Company
provided a detailed response to the Show Cause Letter. The response pointed out that the allegations in this litigation are
being contested and have not been adjudicated. It also included a summary of the Company’s positions with respect to the
allegations and the manner in which the Company believes that it meets the criteria for being a party with which the U.S.
government should continue to contract. That response is currently under consideration by the GSA Suspension and
Debarment Division. The Company cannot predict the amount of damages likely to result from the litigation summarized
above. Although the timing and ultimate outcome of this litigation and the Show Cause Letter cannot be determined, the
Company believes that the material aspects of the liability theories set forth in the litigation complaints are unfounded and
that it is a responsible party with whom the U.S. government should continue to contract. The Company also believes that it
has meritorious defenses and intends to vigorously contest the lawsuit.
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