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At September 30, 2009, we had $355.8 million in short-term revolving credit available under a $420.0million five-year credit agreement with certain banks and financial institutions expiring on June 9, 2010.This credit facility supports an uncommitted $500.0 million commercial paper program under which $435.8million remained available for issuance via private placement at September 30, 2009. We also had $14.0million available in uncommitted short-term bank lines of credit. The revolving credit facility is subject tovarious financial covenants, including, but not limited to, minimum requirements related to our interestcoverage ratio and maintenance of working capital as well as limitations on our capitalization ratio,indebtedness, investments and liens. Interest rates on loans under the revolving credit facility are determinedat the time of issuance and depend on the type of loan issued. As of September 30, 2009, there were noamounts outstanding under the revolving credit facility and we were in compliance with the financialcovenants related to this facility. In addition, at September 30, 2009, the banking/finance segment had$295.0 million available in uncommitted short-term bank lines of credit under the Federal Reserve system,$235.1 million available in secured Federal Reserve Bank short-term discount window and $63.8 millionavailable in secured FHLB short-term borrowing capacity.In March 2008, we filed an automatic shelf registration statement with the SEC as a “well-knownseasoned issuer”. Using the shelf registration statement, we may sell, at any time and from time to time, inone or more offerings, our shares of common stock, shares of preferred stock, debt securities, convertiblesecurities, warrants or units.Our ability to access the capital markets in a timely manner depends on a number of factors, includingour credit rating, the condition of the global economy, investors’ willingness to purchase our securities,interest rates, credit spreads and the valuation levels of equity markets. If we are unable to access capitalmarkets in a timely manner, our business could be adversely impacted.Uses of CapitalWe expect that our main uses of cash will be to expand our core business, make strategic acquisitions,acquire shares of our common stock, fund property and equipment purchases, pay operating expenses of thebusiness, enhance technology infrastructure and business processes, pay stockholder dividends and repayand service debt.On September 17, 2009, our Board of Directors declared a regular quarterly cash dividend of $0.21 pershare payable on October 15, 2009 to stockholders of record on October 5, 2009.We maintain a stock repurchase program to manage our equity capital with the objective ofmaximizing shareholder value. Our stock repurchase program is affected through regular open-marketpurchases and private transactions in accordance with applicable laws and regulations. During fiscal year2009, we repurchased 5.5 million shares of our common stock at a cost of $376.9 million. The commonstock repurchases made as of September 30, 2009 reduced our capital in excess of par value to nil and theexcess amount was recognized as a reduction to retained earnings. At September 30, 2009, approximately9.6 million shares of our common stock remained available for repurchase under our stock repurchaseprogram. Our stock repurchase program is not subject to an expiration date.The funds that we manage have their own resources available for purposes of providing liquidity tomeet shareholder redemptions, including securities that can be sold or provided to investors as in-kindredemptions, and lines of credit. While we have no contractual obligation to do so, we may voluntarily electto provide the funds with direct or indirect financial support based on our business objectives.50
Contractual Obligations and Commercial CommitmentsContractual Obligations and CommitmentsThe following table summarizes contractual cash obligations and commitments. We believe that wecan meet these obligations and commitments through existing liquid assets, continuing cash flows fromoperations and borrowing capacity under current credit facilities.(in millions)as of September 30, 2009TotalPayments Due by PeriodLess than1 Year1-3Years3-5YearsMore than5 YearsNon-current debt .................................. $ 57.0 $ 15.0 $ 2.0 $ 18.5 $ 21.5Operating leases 1 .................................. 262.1 45.3 78.2 67.6 71.0Purchase obligations 2 ............................... 150.7 71.7 46.6 26.4 6.0Total Contractual Obligations .................... 469.8 132.0 126.8 112.5 98.5Loan origination commitments ....................... 186.8 144.2 8.1 0.4 34.1Capital contribution commitments 3 .................... 65.8 28.3 32.7 4.6 0.2Total Contractual Obligations and Commitments 4 ..... $722.4 $304.5 $167.6 $117.5 $132.81 Operating lease obligations are presented net of future receipts on contractual sublease arrangements totaling$11.3 million.2 Purchase obligations include contractual amounts that will be due to purchase goods and services to be used in ouroperations and may be cancelled at earlier times than those indicated under certain conditions that may includetermination fees.3 Capital contribution commitments relate to our agreements to fund certain of our sponsored investment products.4 The table excludes future cash payments for unrecognized tax benefits. As of September 30, 2009, our consolidatedbalance sheet reflects a liability for unrecognized tax benefits of $76.0 million, and approximately $13.6 million ofaccrued interest (see Note 14 – Taxes on Income in the notes to consolidated financial statements in Item 8 of Part II ofthis Form 10-K). However, because of the high degree of uncertainty regarding the timing of future cash outflows ofliabilities for unrecognized tax benefits, a reasonable estimate of the period of cash payments beyond the next twelvemonths from the balance sheet date of September 30, 2009, cannot be made. The amount of unrecognized tax benefitsand related interest that are expected to be paid in the next twelve months are $4.7 million and $2.0 million.Contingent ObligationsWe are obligated to cover shortfalls for automobile loan securitization trusts that are structured asqualified special entities in amounts due to holders of asset-backed securities up to certain levels. AtSeptember 30, 2009, the maximum potential amount of future payments related to these guarantees was$7.4 million and the fair value of the guarantees recognized as banking/finance liabilities in ourconsolidated balance sheet was not significant. During fiscal year 2009, we increased the amount of cash ondeposit by $37.6 million to replace the letters of credit for the securitization trusts. As a result, themaximum potential amounts of future payments related to the guarantees were reduced by the same amount.At September 30, 2009, the banking/finance segment had issued financial standby letters of credittotaling $6.3 million on which beneficiaries would be able to draw upon in the event of non-performance byour customers, primarily in relation to lease and lien obligations of these banking customers. These standbyletters of credit were secured by marketable securities with a fair value of $8.3 million at September 30,2009.51
- Page 9 and 10: Performance GraphThe following perf
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Contractual Obligations and Commercial CommitmentsContractual Obligations and CommitmentsThe following table summarizes contractual cash obligations and commitments. We believe that wecan meet these obligations and commitments through existing liquid assets, continuing cash flows fromoperations and borrowing capacity under current credit facilities.(in millions)as of September 30, 2009TotalPayments Due by PeriodLess than1 Year1-3Years3-5YearsMore than5 YearsNon-current debt .................................. $ 57.0 $ 15.0 $ 2.0 $ 18.5 $ 21.5Operating leases 1 .................................. 262.1 45.3 78.2 67.6 71.0Purchase obligations 2 ............................... 150.7 71.7 46.6 26.4 6.0Total Contractual Obligations .................... 469.8 132.0 126.8 112.5 98.5Loan origination commitments ....................... 186.8 144.2 8.1 0.4 34.1Capital contribution commitments 3 .................... 65.8 28.3 32.7 4.6 0.2Total Contractual Obligations and Commitments 4 ..... $722.4 $304.5 $167.6 $117.5 $132.81 Operating lease obligations are presented net of future receipts on contractual sublease arrangements totaling$11.3 million.2 Purchase obligations include contractual amounts that will be due to purchase goods and services to be used in ouroperations and may be cancelled at earlier times than those indicated under certain conditions that may includetermination fees.3 Capital contribution commitments relate to our agreements to fund certain of our sponsored investment products.4 The table excludes future cash payments for unrecognized tax benefits. As of September 30, 2009, our consolidatedbalance sheet reflects a liability for unrecognized tax benefits of $76.0 million, and approximately $13.6 million ofaccrued interest (see Note 14 – Taxes on Income in the notes to consolidated financial statements in Item 8 of Part II ofthis Form 10-K). However, because of the high degree of uncertainty regarding the timing of future cash outflows ofliabilities for unrecognized tax benefits, a reasonable estimate of the period of cash payments beyond the next twelvemonths from the balance sheet date of September 30, 2009, cannot be made. The amount of unrecognized tax benefitsand related interest that are expected to be paid in the next twelve months are $4.7 million and $2.0 million.Contingent ObligationsWe are obligated to cover shortfalls for automobile loan securitization trusts that are structured asqualified special entities in amounts due to holders of asset-backed securities up to certain levels. AtSeptember 30, 2009, the maximum potential amount of future payments related to these guarantees was$7.4 million and the fair value of the guarantees recognized as banking/finance liabilities in ourconsolidated balance sheet was not significant. During fiscal year 2009, we increased the amount of cash ondeposit by $37.6 million to replace the letters of credit for the securitization trusts. As a result, themaximum potential amounts of future payments related to the guarantees were reduced by the same amount.At September 30, 2009, the banking/finance segment had issued financial standby letters of credittotaling $6.3 million on which beneficiaries would be able to draw upon in the event of non-performance byour customers, primarily in relation to lease and lien obligations of these banking customers. These standbyletters of credit were secured by marketable securities with a fair value of $8.3 million at September 30,2009.51