[January 22, 2013] |
|
CA Technologies Reports Third Quarter Fiscal Year 2013 Results
NEW YORK --(Business Wire)--
CA Technologies (NASDAQ:CA) today reported financial results for its
third quarter of fiscal year 2013, ended December 31, 2012.
FINANCIAL OVERVIEW
|
|
Third Quarter FY13 vs. FY12
|
(in millions, except share data)
|
|
FY13
|
|
FY12***
|
|
% Change
|
|
% Change CC**
|
Revenue
|
|
$
|
1,195
|
|
$
|
1,263
|
|
(5
|
%)
|
|
(4
|
%)
|
GAAP Income from continuing operations
|
|
$
|
251
|
|
$
|
263
|
|
(5
|
%)
|
|
(3
|
%)
|
Non-GAAP Income from continuing operations*
|
|
$
|
288
|
|
$
|
319
|
|
(10
|
%)
|
|
(8
|
%)
|
GAAP Diluted EPS from continuing operations
|
|
$
|
0.55
|
|
$
|
0.54
|
|
2
|
%
|
|
4
|
%
|
Non-GAAP Diluted EPS from continuing operations*
|
|
$
|
0.63
|
|
$
|
0.65
|
|
(3
|
%)
|
|
(2
|
%)
|
Cash Flow from continuing operations
|
|
$
|
566
|
|
$
|
396
|
|
43
|
%
|
|
42
|
%
|
* Non-GAAP income and earnings per share are non-GAAP financial
measures, as noted in the discussion of non-GAAP results below. A
reconciliation of non-GAAP financial measures to their comparable GAAP
financial measures is included in the tables following this news release.
**CC: Constant Currency
*** Third Quarter FY12 included a single license payment for $39 million
in connection with a 2009 litigation settlement. In the third quarter of
fiscal year 2012, the payment added $39 million in our Mainframe
Solutions segment and in the software fees and other line of revenue;
approximately 2 percentage points to GAAP and non-GAAP operating margin;
GAAP and non-GAAP operating income of $36 million; GAAP and non-GAAP EPS
of $0.05; and cash flow from continuing operations of $39 million.
EXECUTIVE COMMENTARY
"I am very pleased to be a part of the CA Technologies team," said CA
Technologies CEO Mike Gregoire. "While we are encouraged by improvements
we saw in the business during our third quarter, including increased
demand for our Nimsoft, Infrastructure Management and Service
Virtualization offerings, we know that we need to do more to accelerate
innovation, gain market share and better differentiate our solutions in
the marketplace.
"We also know there is room for improvement in our cost of sales and in
the speed and intensity with which we pursue our objectives," he
continued. "Over the next few months we will perform a detailed
diagnostic of where we are, and lay out a plan on how to achieve our
strategic and financial goals."
REVENUE AND BOOKINGS
About 62 percent of the Company's third quarter fiscal year 2013 revenue
came from North America, while 38 percent came from International
operations.
Revenue year-over-year:
-
Total revenue was $1.195 billion, down 4 percent in constant currency
and 5 percent as reported. A $39 million single license payment the
Company received in the third quarter of fiscal year 2012 added 3
percentage points to the decrease in the third quarter of fiscal year
2013 revenue.
-
Total revenue backlog was $7.488 billion, down 8 percent in constant
currency and 7 percent as reported. The current portion of revenue
backlog was $3.495 billion, down 2 percent in constant currency and as
reported. The Company continues to see a drop in backlog as contracts
come off the balance sheet prior to an expected increase in the fiscal
year 2014 renewals.
-
North America revenue was $745 million, down 6 percent in constant
currency and as reported. The single license payment contributed 5
percentage points to this decrease.
-
International revenue was $450 million, down 2 percent in constant
currency and 5 percent as reported.
Bookings year-over-year:
-
Total bookings in the third quarter were $1.261 billion, down 2
percent in constant currency and as reported. The single license
payment in the third quarter of fiscal year 2012 added 3 percentage
points of decline to fiscal year 2013 total bookings. The Company
executed a total of 18 license agreements with incremental contract
values in excess of $10 million each, for an aggregate contract value
of $477 million. During the third quarter of fiscal year 2012, the
Company executed a total of 12 license agreements with incremental
contract values in excess of $10 million each, for an aggregate
contract value of $452 million.
-
The weighted average duration of subscription and maintenance bookings
for the quarter was 2.97 years, compared with 3.53 years for the same
period in fiscal year 2012.
-
North America bookings were $685 million, down 11 percent in constant
currency and as reported. The single license payment in the third
quarter of fiscal year 2012 added 5 percentage points of decline from
the year ago period.
-
International bookings were $576 million, up 13 percent in constant
currency and 11 percent as reported.
EXPENSES AND MARGIN
Year-over-year GAAP results:
-
Operating expenses, before interest and income taxes, were $825
million, down 2 percent in constant currency and 3 percent as reported.
-
Operating income, before interest and income taxes, was $370 million,
down 10 percent in constant currency and as reported.
-
Operating margin was 31 percent, down 2 percentage points from the
prior year period.
Year-over-year non-GAAP results exclude purchased software and other
intangibles amortization, share-based compensation, and certain other
gains and losses. The results also include gains and losses on hedges
that mature within the quarter, but exclude gains and losses of hedges
that do not mature within the quarter.
-
Operating expenses, before interest and income taxes, were $767
million, down 1 percent in constant currency and 3 percent as
reported. The decrease in operating expenses was primarily due to
lower general and administrative, sales and marketing and product
development costs, offset in part by higher severance costs.
-
Operating income, before interest and income taxes, was $428 million,
down 9 percent in constant currency and 10 percent as reported.
-
Operating margin was 36 percent, down 2 percentage points from the
prior year period.
The single license payment added $0.05 to GAAP and non-GAAP earnings per
share and 2 percentage points to GAAP and non-GAAP operating margin in
the third quarter of fiscal year 2012.
For the third quarter of fiscal year 2013, the Company's effective GAAP
tax rate was 29.9 percent, compared with 34.9 percent in the prior year
period. The Company's effective non-GAAP tax rate was 30.7 percent,
compared with 31.5 percent in the prior year period.
SEGMENT INFORMATION
-
Mainframe Solutions revenue was $622 million, down 8 percent in
constant currency and 9 percent as reported. The single license
payment in the third quarter of fiscal 2012 contributed 6 percentage
points to the year-over-year decline. Operating expense was $248
million and operating profit was $374 million. Operating margin was 60
percent, up 1 percentage point from a year ago.
-
Enterprise Solutions revenue was $476 million, flat in constant
currency and as reported. Operating expense was $426 million and
operating profit was $50 million. Operating margin was 11 percent,
down 1 percentage point from a year ago.
-
Services revenue was $97 million, down 5 percent in constant currency
and 6 percent as reported. Operating expense was $93 million and
operating profit was $4 million. Operating margin was 4 percent, down
7 percentage points from a year ago.
CASH FLOW FROM CONTINUING OPERATIONS
Cash flow from continuing operations in the third quarter was $566
million, compared with $396 million in the prior year. The quarter
included an increase of $150 million in single installment payments
year-over-year, primarily attributable to one single installment payment
of more than $100 million.
CAPITAL STRUCTURE
-
Cash, cash equivalents and investments at Dec. 31, 2012 were $2.548
billion.
-
With $1.301 billion in total debt outstanding and a borrowing position
of $140 million on the Company's notional pooling arrangement, the
Company's net cash, cash equivalents and investments were $1.107
billion.
-
During the quarter, the Company repurchased 3.4 million shares in the
market for approximately $75 million.
-
The Company is currently authorized to repurchase an additional $579
million of common stock through fiscal year 2014.
-
The Company's outstanding share count at Dec. 31, 2012 was 451 million.
-
During the quarter, the Company distributed $114 million in dividends.
BUSINESS HIGHLIGHTS
During the third quarter, the Company announced:
-
Michael
P. Gregoire's election as the
Company's chief executive officer and addition to the Company's Board
of Directors, and Bill McCracken's retirement as chief executive
officer and Board member, effective January 7, 2013.
-
Adoption of a Stockholder
Protection Rights Agreement to replace the Company's existing
Rights Agreement, which expired on November 30, 2012.
OUTLOOK FOR FISCAL YEAR 2013 Update
The Company reaffirmed its revenue and GAAP and non-GAAP earnings per
share from continuing operations and cash flow from continuing
operations guidance for fiscal year 2013. The following guidance
consists of "forward-looking statements" (as defined below).
The Company expects the following:
-
Total revenue growth in a range of negative 3 percent to negative 1
percent in constant currency. At Dec. 31, 2012 exchange rates, this
translates to reported revenue of $4.58 billion to $4.67 billion.
-
GAAP diluted earnings per share from continuing operations growth in
constant currency in a range of 8 percent to 12 percent. At Dec. 31,
2012 exchange rates, this translates to GAAP reported diluted earnings
per share of $2.00 to $2.08.
-
Non-GAAP diluted earnings per share from continuing operations growth
in constant currency in a range of 6 percent to 10 percent. At Dec.
31, 2012 exchange rates, this translates to reported non-GAAP diluted
earnings per share of $2.36 to $2.44.
-
Cash flow from continuing operations growth in a range of negative 8
percent to negative 4 percent in constant currency. At Dec. 31, 2012
exchange rates, this translates to reported cash flow from continuing
operations of $1.39 billion to $1.45 billion.
This outlook also assumes no material acquisitions and a partial
currency hedge of operating income. The Company continues to expect a
full-year GAAP operating margin of 30 percent and a non-GAAP operating
margin of 36 percent. The Company also continues to expect an effective
full-year GAAP and non-GAAP tax rate to come in closer to the high-end
of the 30 to 31 percent range provided at the outset of the fiscal year.
The Company anticipates approximately 449 million shares outstanding at
fiscal year 2013 year end and weighted average diluted shares
outstanding of approximately 457 million for the fiscal year.
Webcast
This news release and the accompanying tables should be read in
conjunction with additional content that is available on the Company's
website, including a supplemental financial package, as well as a
webcast that the Company will host at 5 p.m. ET today to discuss its
unaudited third quarter results. The webcast will be archived on the
website. Individuals can access the webcast, as well as this press
release and supplemental financial information, at http://ca.com/invest
or listen to the call at 1-877-561-2748. The international participant
number is 1-720-545-0044.
About CA Technologies
CA Technologies (NASDAQ: CA) provides IT management solutions that help
customers manage and secure complex IT environments to support agile
business services. Organizations leverage CA Technologies software and
SaaS solutions to accelerate innovation, transform infrastructure and
secure data and identities, from the data center to the cloud. Learn
more about CA Technologies at www.ca.com.
Follow CA Technologies
Non-GAAP Financial Measures
This news release, the accompanying tables and the additional content
that is available on the Company's website, including a supplemental
financial package, includes certain financial measures that exclude the
impact of certain items and therefore have not been calculated in
accordance with U.S. generally accepted accounting principles (GAAP).
Non-GAAP metrics for operating expenses, operating income, operating
margin, income from continuing operations and diluted earnings per share
exclude the following items: non-cash amortization of purchased software
and other intangibles, share-based compensation, fiscal year 2007
restructuring costs and certain other gains and losses, which includes
the gains and losses since inception of hedges that mature within the
quarter, but exclude gains and losses of hedges that do not mature
within the quarter. In fiscal year 2011, non-GAAP income also excludes
recoveries and certain costs associated with derivative litigation
matters. The effective tax rate on GAAP and non-GAAP income from
operations is the Company's provision for income taxes expressed as a
percentage of pre-tax GAAP and non-GAAP income from continuing
operations, respectively. These tax rates are determined based on an
estimated effective full year tax rate, with the effective tax rate for
GAAP generally including the impact of discrete items in the period such
items arise and the effective tax rate for non-GAAP generally allocating
the impact of discrete items pro rata to the fiscal year's remaining
reporting periods. Adjusted cash flow from operations excludes
restructuring and other payments. Free cash flow excludes purchases of
property, equipment and capitalized software development costs. We
present constant currency information to provide a framework for
assessing how our underlying businesses performed excluding the effect
of foreign currency rate fluctuations. To present this information,
current and comparative prior period results for entities reporting in
currencies other than U.S. dollars are converted into U.S. dollars at
the exchange rate in effect on March 31, 2012, which was the last day of
our prior fiscal year. Constant currency excludes the impacts from the
Company's hedging program. The constant currency calculation for
annualized subscription and maintenance bookings is calculated by
dividing the subscription and maintenance bookings in constant currency
by the weighted average subscription and maintenance duration in years.
These non-GAAP financial measures may be different from non-GAAP
financial measures used by other companies. Non-GAAP financial measures
should not be considered as a substitute for, or superior to, measures
of financial performance prepared in accordance with GAAP. By excluding
these items, non-GAAP financial measures facilitate management's
internal comparisons to the Company's historical operating results and
cash flows, to competitors' operating results and cash flows, and to
estimates made by securities analysts. Management uses these non-GAAP
financial measures internally to evaluate its performance and they are
key variables in determining management incentive compensation. The
Company believes these non-GAAP financial measures are useful to
investors in allowing for greater transparency of supplemental
information used by management in its financial and operational
decision-making. In addition, the Company has historically reported
similar non-GAAP financial measures to its investors and believes that
the inclusion of comparative numbers provides consistency in its
financial reporting. Investors are encouraged to review the
reconciliation of the non-GAAP financial measures used in this news
release to their most directly comparable GAAP financial measures, which
are attached to this news release.
Cautionary Statement Regarding Forward-Looking Statements
The declaration and payment of future dividends is subject to the
determination of the Company's Board of Directors, in its sole
discretion, after considering various factors, including the Company's
financial condition, historical and forecast operating results, and
available cash flow, as well as any applicable laws and contractual
covenants and any other relevant factors. The Company's practice
regarding payment of dividends may be modified at any time and from time
to time.
Repurchases under the Company's stock repurchase program are expected to
be made with cash on hand and may be made from time to time, subject to
market conditions and other factors, in the open market, through
solicited or unsolicited privately negotiated transactions or otherwise.
The program, which is authorized through the fiscal year ending March
31, 2014, does not obligate the Company to acquire any particular amount
of common stock, and it may be modified or suspended at any time at the
Company's discretion.
Certain statements in this communication (such as statements containing
the words "believes," "plans," "anticipates," "expects," "estimates,"
"targets" and similar expressions) constitute "forward-looking
statements" that are based upon the beliefs of, and assumptions made by,
the Company's management, as well as information currently available to
management. These forward-looking statements reflect the Company's
current views with respect to future events and are subject to certain
risks, uncertainties, and assumptions. A number of important factors
could cause actual results or events to differ materially from those
indicated by such forward-looking statements, including: the ability to
achieve success in the Company's strategy by, among other things,
effectively rebalancing the Company's sales force to increase
penetration in growth markets and with large enterprises that have not
historically been significant customers, enabling the sales force to
sell new products, improving the Company's brand in the marketplace and
ensuring the Company's set of cloud computing, Software-as-a-Service and
other new offerings address the needs of a rapidly changing market,
while not adversely affecting the demand for the Company's traditional
products or its profitability; global economic factors or political
events beyond the Company's control; general economic conditions and
credit constraints, or unfavorable economic conditions in a particular
region, industry or business sector; the failure to adapt to
technological changes and introduce new software products and services
in a timely manner; competition in product and service offerings and
pricing; the failure to expand partner programs; the ability to retain
and attract adequate qualified personnel; the ability to integrate
acquired companies and products into existing businesses; the ability to
adequately manage and evolve financial reporting and managerial systems
and processes; the ability of the Company's products to remain
compatible with ever-changing operating environments; breaches of the
Company's software products and the Company's and customers' data
centers and IT environments; discovery of errors in the Company's
software and potential product liability claims; the failure to protect
the Company's intellectual property rights and source code; risks
associated with sales to government customers; access to software
licensed from third parties; risks associated with the use of software
from open source code sources; access to third-party code and
specifications for the development of code; third-party claims of
intellectual property infringement or royalty payments; fluctuations in
the number, terms and duration of the Company's license agreements as
well as the timing of orders from customers and channel partners; the
failure to renew large license transactions on a satisfactory basis;
changes in market conditions or the Company's credit ratings;
fluctuations in foreign currencies; the failure to effectively execute
the Company's workforce reductions; successful outsourcing of various
functions to third parties; events or circumstances that would require
us to record a goodwill impairment charge; potential tax liabilities;
acquisition opportunities that may or may not arise; and other factors
described more fully in the Company's filings with the Securities and
Exchange Commission. Should one or more of these risks or uncertainties
occur, or should our assumptions prove incorrect, actual results may
vary materially from those described herein as believed, planned,
anticipated, expected, estimated, targeted or similarly expressed in a
forward-looking manner. The Company assumes no obligation to update the
information in this communication, except as otherwise required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Copyright © 2013 CA, Inc. All Rights Reserved. One CA Plaza, Islandia,
N.Y. 11749. All other trademarks, trade names, service marks, and logos
referenced herein belong to their respective companies.
Table 1
|
CA Technologies
|
Consolidated Statements of Operations
|
(unaudited)
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
December 31,
|
|
December 31,
|
Revenue
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Subscription and maintenance revenue
|
|
$
|
966
|
|
$
|
1,006
|
|
$
|
2,906
|
|
|
$
|
3,035
|
Professional services
|
|
|
97
|
|
|
103
|
|
|
283
|
|
|
|
289
|
Software fees and other
|
|
|
132
|
|
|
154
|
|
|
303
|
|
|
|
302
|
Total revenue
|
|
$
|
1,195
|
|
$
|
1,263
|
|
$
|
3,492
|
|
|
$
|
3,626
|
Expenses
|
|
|
|
|
|
|
|
|
Costs of licensing and maintenance
|
|
$
|
72
|
|
$
|
69
|
|
$
|
210
|
|
|
$
|
207
|
Cost of professional services
|
|
|
92
|
|
|
91
|
|
|
266
|
|
|
|
270
|
Amortization of capitalized software costs
|
|
|
66
|
|
|
59
|
|
|
197
|
|
|
|
164
|
Selling and marketing
|
|
|
331
|
|
|
342
|
|
|
953
|
|
|
|
1,038
|
General and administrative
|
|
|
96
|
|
|
113
|
|
|
304
|
|
|
|
331
|
Product development and enhancements
|
|
|
120
|
|
|
126
|
|
|
368
|
|
|
|
384
|
Depreciation and amortization of other intangible assets
|
|
|
39
|
|
|
44
|
|
|
120
|
|
|
|
134
|
Other (gains) expenses, net
|
|
|
9
|
|
|
6
|
|
|
(14
|
)
|
|
|
10
|
Total expenses before interest and income taxes
|
|
$
|
825
|
|
$
|
850
|
|
$
|
2,404
|
|
|
$
|
2,538
|
Income from continuing operations before interest and income taxes
|
|
$
|
370
|
|
$
|
413
|
|
$
|
1,088
|
|
|
$
|
1,088
|
Interest expense, net
|
|
|
12
|
|
|
9
|
|
|
33
|
|
|
|
24
|
Income from continuing operations before income taxes
|
|
$
|
358
|
|
$
|
404
|
|
$
|
1,055
|
|
|
$
|
1,064
|
Income tax expense
|
|
|
107
|
|
|
141
|
|
|
342
|
|
|
|
337
|
Income from continuing operations
|
|
$
|
251
|
|
$
|
263
|
|
$
|
713
|
|
|
$
|
727
|
Income from discontinued operations, net of income taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
13
|
Net income
|
|
$
|
251
|
|
$
|
263
|
|
$
|
713
|
|
|
$
|
740
|
|
|
|
|
|
|
|
|
|
Basic income per share
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.55
|
|
$
|
0.54
|
|
$
|
1.54
|
|
|
$
|
1.46
|
Income from discontinued operations
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
0.03
|
Net income
|
|
$
|
0.55
|
|
$
|
0.54
|
|
$
|
1.54
|
|
|
$
|
1.49
|
Basic weighted average shares used in computation
|
|
|
452
|
|
|
483
|
|
|
458
|
|
|
|
492
|
|
|
|
|
|
|
|
|
|
Diluted income per share
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.55
|
|
$
|
0.54
|
|
$
|
1.53
|
|
|
$
|
1.46
|
Income from discontinued operations
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
0.02
|
Net income
|
|
$
|
0.55
|
|
$
|
0.54
|
|
$
|
1.53
|
|
|
$
|
1.48
|
Diluted weighted average shares used in computation
|
|
|
453
|
|
|
484
|
|
|
460
|
|
|
|
493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2
|
CA Technologies
|
Condensed Consolidated Balance Sheets
|
(in millions)
|
|
|
|
|
|
|
|
December 31,
|
|
March 31,
|
|
|
2012
|
|
2012
|
|
|
(unaudited)
|
|
|
Cash and cash equivalents
|
|
$
|
2,353
|
|
|
$
|
2,679
|
|
Short-term investments
|
|
|
195
|
|
|
|
-
|
|
Trade accounts receivable, net
|
|
|
786
|
|
|
|
902
|
|
Deferred income taxes
|
|
|
326
|
|
|
|
231
|
|
Other current assets
|
|
|
143
|
|
|
|
153
|
|
Total current assets
|
|
$
|
3,803
|
|
|
$
|
3,965
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
339
|
|
|
$
|
386
|
|
Goodwill
|
|
|
5,856
|
|
|
|
5,856
|
|
Capitalized software and other intangible assets, net
|
|
|
1,296
|
|
|
|
1,389
|
|
Deferred income taxes
|
|
|
21
|
|
|
|
151
|
|
Other noncurrent assets, net
|
|
|
243
|
|
|
|
250
|
|
Total assets
|
|
$
|
11,558
|
|
|
$
|
11,997
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
19
|
|
|
$
|
14
|
|
Deferred revenue (billed or collected)
|
|
|
2,234
|
|
|
|
2,658
|
|
Deferred income taxes
|
|
|
14
|
|
|
|
14
|
|
Other current liabilities
|
|
|
1,074
|
|
|
|
1,065
|
|
Total current liabilities
|
|
$
|
3,341
|
|
|
$
|
3,751
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
$
|
1,282
|
|
|
$
|
1,287
|
|
Deferred income taxes
|
|
|
44
|
|
|
|
44
|
|
Deferred revenue (billed or collected)
|
|
|
957
|
|
|
|
972
|
|
Other noncurrent liabilities
|
|
|
521
|
|
|
|
546
|
|
Total liabilities
|
|
$
|
6,145
|
|
|
$
|
6,600
|
|
|
|
|
|
|
Common stock
|
|
$
|
59
|
|
|
$
|
59
|
|
Additional paid-in capital
|
|
|
3,582
|
|
|
|
3,491
|
|
Retained earnings
|
|
|
5,229
|
|
|
|
4,865
|
|
Accumulated other comprehensive loss
|
|
|
(119
|
)
|
|
|
(108
|
)
|
Treasury stock
|
|
|
(3,338
|
)
|
|
|
(2,910
|
)
|
Total stockholders' equity
|
|
$
|
5,413
|
|
|
$
|
5,397
|
|
Total liabilities and stockholders' equity
|
|
$
|
11,558
|
|
|
$
|
11,997
|
|
|
|
|
|
|
|
|
|
|
Table 3
|
CA Technologies
|
Condensed Consolidated Statements of Cash Flows
|
(unaudited)
|
(in millions)
|
|
|
|
|
|
Three Months Ended
|
|
|
December 31,
|
|
|
2012
|
|
2011
|
Operating activities from continuing operations:
|
|
|
|
|
Income from continuing operations
|
|
$
|
251
|
|
|
$
|
263
|
|
|
|
|
|
|
Adjustments to reconcile income from continuing operations to net
cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
105
|
|
|
|
103
|
|
Provision for deferred income taxes
|
|
|
48
|
|
|
|
(45
|
)
|
Provision for bad debts
|
|
|
1
|
|
|
|
(3
|
)
|
Share-based compensation expense
|
|
|
18
|
|
|
|
20
|
|
Asset impairments and other non-cash items
|
|
|
3
|
|
|
|
6
|
|
Foreign currency transaction gains
|
|
|
-
|
|
|
|
(3
|
)
|
Changes in other operating assets and liabilities, net of effect of
acquisitions:
|
|
|
|
|
Increase in trade accounts receivable
|
|
|
(201
|
)
|
|
|
(243
|
)
|
Increase in deferred revenue
|
|
|
257
|
|
|
|
94
|
|
Increase in taxes payable, net
|
|
|
57
|
|
|
|
182
|
|
Decrease in accounts payable, accrued expenses and other
|
|
|
(48
|
)
|
|
|
(44
|
)
|
Increase in accrued salaries, wages and commissions
|
|
|
47
|
|
|
|
26
|
|
Changes in other operating assets and liabilities
|
|
|
28
|
|
|
|
40
|
|
Net cash provided by operating activities - continuing operations
|
|
$
|
566
|
|
|
$
|
396
|
|
Investing activities from continuing operations:
|
|
|
|
|
Acquisitions of businesses, net of cash acquired, and purchased
software
|
|
$
|
(6
|
)
|
|
$
|
(4
|
)
|
Purchases of property and equipment
|
|
|
(9
|
)
|
|
|
(13
|
)
|
Capitalized software development costs
|
|
|
(44
|
)
|
|
|
(41
|
)
|
Purchases of investments, net
|
|
|
(29
|
)
|
|
|
(2
|
)
|
Net cash used in investing activities - continuing operations
|
|
$
|
(88
|
)
|
|
$
|
(60
|
)
|
Financing activities from continuing operations:
|
|
|
|
|
Dividends paid
|
|
$
|
(114
|
)
|
|
$
|
(25
|
)
|
Purchases of common stock
|
|
|
(77
|
)
|
|
|
(200
|
)
|
Debt (repayments) borrowings, net
|
|
|
(31
|
)
|
|
|
58
|
|
Exercise of common stock options and other
|
|
|
-
|
|
|
|
1
|
|
Net cash used in financing activities - continuing operations
|
|
$
|
(222
|
)
|
|
$
|
(166
|
)
|
Net change in cash and cash equivalents before effect of exchange
rate
changes on cash - continuing operations
|
|
$
|
256
|
|
|
$
|
170
|
|
Effect of exchange rate changes on cash
|
|
$
|
11
|
|
|
$
|
(11
|
)
|
Cash provided by (used in) operating activities - discontinued
operations
|
|
|
-
|
|
|
|
(4
|
)
|
Increase in cash and cash equivalents
|
|
$
|
267
|
|
|
$
|
155
|
|
Cash and cash equivalents at beginning of period
|
|
$
|
2,086
|
|
|
$
|
2,203
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,353
|
|
|
$
|
2,358
|
|
|
|
|
|
|
|
|
|
|
Table 4
|
CA Technologies
|
Operating Segments
|
(unaudited)
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2012
|
|
Nine Months Ended December 31, 2012
|
|
|
|
|
Mainframe Solutions (1)
|
|
Enterprise Solutions (1)
|
|
Services(1)
|
|
Total
|
|
Mainframe Solutions (1)
|
|
Enterprise Solutions (1)
|
|
Services(1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (2)
|
|
$
|
622
|
|
|
$
|
476
|
|
|
$
|
97
|
|
|
$
|
1,195
|
|
|
$
|
1,869
|
|
|
$
|
1,340
|
|
|
$
|
283
|
|
|
$
|
3,492
|
|
|
|
Expenses (3)
|
|
|
248
|
|
|
|
426
|
|
|
|
93
|
|
|
|
767
|
|
|
|
755
|
|
|
|
1,195
|
|
|
|
269
|
|
|
|
2,219
|
|
|
|
Segment profit
|
|
$
|
374
|
|
|
$
|
50
|
|
|
$
|
4
|
|
|
$
|
428
|
|
|
$
|
1,114
|
|
|
$
|
145
|
|
|
$
|
14
|
|
|
$
|
1,273
|
|
|
|
Segment operating margin
|
|
|
60
|
%
|
|
|
11
|
%
|
|
|
4
|
%
|
|
|
36
|
%
|
|
|
60
|
%
|
|
|
11
|
%
|
|
|
5
|
%
|
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
$
|
428
|
|
|
|
|
|
|
|
|
$
|
1,273
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
80
|
|
|
|
Other intangibles amortization
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
41
|
|
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
62
|
|
|
|
Other (gains) expenses, net (4)
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
33
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
$
|
358
|
|
|
|
|
|
|
|
|
$
|
1,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2011
|
|
Nine Months Ended December 31, 2011
|
|
|
|
|
Mainframe Solutions (1)
|
|
Enterprise Solutions (1)
|
|
Services(1)
|
|
Total
|
|
Mainframe Solutions (1)
|
|
Enterprise Solutions (1)
|
|
Services(1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (2)
|
|
$
|
682
|
|
|
$
|
478
|
|
|
$
|
103
|
|
|
$
|
1,263
|
|
|
$
|
1,983
|
|
|
$
|
1,354
|
|
|
$
|
289
|
|
|
$
|
3,626
|
|
|
|
Expenses (3)
|
|
|
277
|
|
|
|
419
|
|
|
|
92
|
|
|
|
788
|
|
|
|
861
|
|
|
|
1,223
|
|
|
|
272
|
|
|
|
2,356
|
|
|
|
Segment profit
|
|
$
|
405
|
|
|
$
|
59
|
|
|
$
|
11
|
|
|
$
|
475
|
|
|
$
|
1,122
|
|
|
$
|
131
|
|
|
$
|
17
|
|
|
$
|
1,270
|
|
|
|
Segment operating margin
|
|
|
59
|
%
|
|
|
12
|
%
|
|
|
11
|
%
|
|
|
38
|
%
|
|
|
57
|
%
|
|
|
10
|
%
|
|
|
6
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
$
|
475
|
|
|
|
|
|
|
|
|
$
|
1,270
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
76
|
|
|
|
Other intangibles amortization
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
50
|
|
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
61
|
|
|
|
Other (gains) expenses, net (4)
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
24
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
$
|
404
|
|
|
|
|
|
|
|
|
$
|
1,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
• Mainframe Solutions - Our Mainframe Solutions segment addresses
the mainframe market and is focused on making significant
investments in order to be innovative in key management disciplines
across our broad portfolio of products. Ongoing development is
guided by customer needs, our cross-enterprise management philosophy
and our Mainframe 2.0 strategy, which offers management capabilities
designed to appeal to the next generation of mainframe staff while
also offering productivity improvements to today's mainframe
experts. Our mainframe business assists customers by addressing
three major challenges: lowering costs, providing high service
levels by sustaining critical workforce skills and increasing
agility to help deliver on business goals.
• Enterprise Solutions - Our Enterprise Solutions segment includes
products that operate on non-mainframe platforms, such as service
assurance, security (identity and access management), service and
portfolio management, virtualization and service automation, SaaS,
and cloud offerings. Our offerings help customers address their
regulatory compliance demands, privacy needs, and internal
security policies. Enterprise Solutions also focuses on delivering
growth to the Company in the form of new customer acquisitions and
revenue, while leveraging non-traditional routes-to-market and
delivery models.
• Services - Our Services segment offers implementation,
consulting, education and training services to customers, which is
intended to promote a seamless customer experience and to increase
the value that customers realize from our solutions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
We regularly enter into a single arrangement with a customer that
includes Mainframe Solutions segment software products, Enterprise
Solutions segment software products and Services. The amount of
contract revenue assigned to segments is generally based on the
manner in which the proposal is made to the customer. The software
product revenue is assigned to the Mainframe Solutions and
Enterprise Solutions segments based on either: (1) a list price
allocation method (which allocates a discount in the total contract
price to the individual products in proportion to the list price of
the product); (2) allocations included within internal contract
approval documents; or (3) the value for individual software
products as stated in the customer contract. The price for the
implementation, consulting, education and training services is
separately stated in the contract and these amounts of contract
revenue are assigned to the Services segment. The contract value
assigned to each segment is then recognized in a manner consistent
with the revenue recognition policies we apply to the customer
contract for purposes of preparing the Condensed Consolidated
Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
Segment expenses include costs that are controllable by segment
managers (i.e., direct costs) and, in the case of the Mainframe
Solutions and Enterprise Solutions segments, an allocation of shared
and indirect costs (i.e., allocated costs). Segment-specific direct
costs include a portion of selling and marketing costs, licensing
and maintenance costs, product development costs, general and
administrative costs and amortization of the cost of internally
developed software. Allocated segment costs primarily include
indirect selling and marketing costs and general and administrative
costs that are not directly attributable to a specific segment. The
basis for allocating shared and indirect costs between the Mainframe
Solutions and Enterprise Solutions segments is dependent on the
nature of the cost being allocated and is either in proportion to
segment revenues or in proportion to the related direct cost
category. Expenses for the Services segment consist only of direct
costs and there are no allocated or indirect costs for the Services
segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
|
Other (gains) expenses, net consists of other unallocated costs
including foreign exchange derivative (gains) losses, and other
miscellaneous costs.
|
|
|
|
Table 5
|
CA Technologies
|
Constant Currency Summary
|
(unaudited)
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
|
|
|
|
2012
|
|
2011
|
|
% Increase (Decrease) in $ US
|
|
% Increase (Decrease) in Constant Currency (1)
|
|
2012
|
|
2011
|
|
% Increase (Decrease) in $ US
|
|
% Increase (Decrease) in Constant Currency (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
|
$
|
1,261
|
|
$
|
1,284
|
|
(2
|
%)
|
|
(2
|
%)
|
|
$
|
2,651
|
|
$
|
3,121
|
|
(15
|
%)
|
|
(14
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
$
|
745
|
|
$
|
791
|
|
(6
|
%)
|
|
(6
|
%)
|
|
$
|
2,201
|
|
$
|
2,242
|
|
(2
|
%)
|
|
(1
|
%)
|
|
|
International
|
|
|
450
|
|
|
472
|
|
(5
|
%)
|
|
(2
|
%)
|
|
|
1,291
|
|
|
1,384
|
|
(7
|
%)
|
|
(1
|
%)
|
|
|
Total revenue
|
|
$
|
1,195
|
|
$
|
1,263
|
|
(5
|
%)
|
|
(4
|
%)
|
|
$
|
3,492
|
|
$
|
3,626
|
|
(4
|
%)
|
|
(1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and maintenance
|
|
$
|
966
|
|
$
|
1,006
|
|
(4
|
%)
|
|
(3
|
%)
|
|
$
|
2,906
|
|
$
|
3,035
|
|
(4
|
%)
|
|
(2
|
%)
|
|
|
Professional services
|
|
|
97
|
|
|
103
|
|
(6
|
%)
|
|
(5
|
%)
|
|
|
283
|
|
|
289
|
|
(2
|
%)
|
|
1
|
%
|
|
|
Software fees and other
|
|
|
132
|
|
|
154
|
|
(14
|
%)
|
|
(14
|
%)
|
|
|
303
|
|
|
302
|
|
0
|
%
|
|
1
|
%
|
|
|
Total revenue
|
|
$
|
1,195
|
|
$
|
1,263
|
|
(5
|
%)
|
|
(4
|
%)
|
|
$
|
3,492
|
|
$
|
3,626
|
|
(4
|
%)
|
|
(1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mainframe solutions
|
|
$
|
622
|
|
$
|
682
|
|
(9
|
%)
|
|
(8
|
%)
|
|
$
|
1,869
|
|
$
|
1,983
|
|
(6
|
%)
|
|
(3
|
%)
|
|
|
Enterprise solutions
|
|
|
476
|
|
|
478
|
|
0
|
%
|
|
0
|
%
|
|
|
1,340
|
|
|
1,354
|
|
(1
|
%)
|
|
1
|
%
|
|
|
Services
|
|
|
97
|
|
|
103
|
|
(6
|
%)
|
|
(5
|
%)
|
|
|
283
|
|
|
289
|
|
(2
|
%)
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest and income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP (2)
|
|
$
|
767
|
|
$
|
788
|
|
(3
|
%)
|
|
(1
|
%)
|
|
$
|
2,219
|
|
$
|
2,356
|
|
(6
|
%)
|
|
(3
|
%)
|
|
|
Total GAAP
|
|
|
825
|
|
|
850
|
|
(3
|
%)
|
|
(2
|
%)
|
|
|
2,404
|
|
|
2,538
|
|
(5
|
%)
|
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Constant currency information is presented to provide a framework
for assessing how our underlying businesses performed excluding the
effect of foreign currency rate fluctuations. To present this
information, current and comparative prior period results for
entities reporting in currencies other than US dollars are converted
into US dollars at the exchange rate in effect on March 31, 2012,
which was the last day of our prior fiscal year. Constant currency
excludes the impacts from the Company's hedging program.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Refer to Table 7 for a reconciliation of total expenses before
interest and income taxes to total non-GAAP operating expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
|
|
Table 6
|
CA Technologies
|
Reconciliation of Select GAAP Measures to Non-GAAP Measures
|
(unaudited)
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
GAAP net income
|
|
$
|
251
|
|
|
$
|
263
|
|
|
$
|
713
|
|
|
$
|
740
|
|
|
|
GAAP income from discontinued operations, net of income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(13
|
)
|
|
|
GAAP income from continuing operations
|
|
$
|
251
|
|
|
$
|
263
|
|
|
$
|
713
|
|
|
$
|
727
|
|
|
|
GAAP income tax expense
|
|
|
107
|
|
|
|
141
|
|
|
|
342
|
|
|
|
337
|
|
|
|
Interest expense, net
|
|
|
12
|
|
|
|
9
|
|
|
|
33
|
|
|
|
24
|
|
|
|
GAAP income from continuing operations before interest and income
taxes
|
|
$
|
370
|
|
|
$
|
413
|
|
|
$
|
1,088
|
|
|
$
|
1,088
|
|
|
|
GAAP operating margin (% of revenue) (1)
|
|
|
31
|
%
|
|
|
33
|
%
|
|
|
31
|
%
|
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments to expenses:
|
|
|
|
|
|
|
|
|
|
|
Costs of licensing and maintenance(2)
|
|
$
|
1
|
|
|
$
|
-
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
|
Cost of professional services(2)
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
3
|
|
|
|
Amortization of capitalized software costs(3)
|
|
|
26
|
|
|
|
27
|
|
|
|
80
|
|
|
|
76
|
|
|
|
Selling and marketing(2)
|
|
|
6
|
|
|
|
9
|
|
|
|
24
|
|
|
|
25
|
|
|
|
General and administrative(2)
|
|
|
6
|
|
|
|
5
|
|
|
|
21
|
|
|
|
17
|
|
|
|
Product development and enhancements(2)
|
|
|
4
|
|
|
|
5
|
|
|
|
12
|
|
|
|
14
|
|
|
|
Depreciation and amortization of other intangible assets(4)
|
|
|
14
|
|
|
|
16
|
|
|
|
41
|
|
|
|
50
|
|
|
|
Other (gains) expenses, net (5)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
(5
|
)
|
|
|
Total Non-GAAP adjustment to operating expenses
|
|
$
|
58
|
|
|
$
|
62
|
|
|
$
|
185
|
|
|
$
|
182
|
|
|
|
Non-GAAP income from continuing operations before interest and
income taxes
|
|
$
|
428
|
|
|
$
|
475
|
|
|
$
|
1,273
|
|
|
$
|
1,270
|
|
|
|
Non-GAAP operating margin (% of revenue) (6)
|
|
|
36
|
%
|
|
|
38
|
%
|
|
|
36
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
12
|
|
|
|
9
|
|
|
|
33
|
|
|
|
24
|
|
|
|
GAAP income tax expense
|
|
|
107
|
|
|
|
141
|
|
|
|
342
|
|
|
|
337
|
|
|
|
Non-GAAP adjustment to income tax expense(7)
|
|
|
21
|
|
|
|
6
|
|
|
|
39
|
|
|
|
56
|
|
|
|
Non-GAAP income tax expense
|
|
$
|
128
|
|
|
$
|
147
|
|
|
$
|
381
|
|
|
$
|
393
|
|
|
|
Non-GAAP income from continuing operations
|
|
$
|
288
|
|
|
$
|
319
|
|
|
$
|
859
|
|
|
$
|
853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
GAAP operating margin is calculated by dividing GAAP income from
continuing operations before interest and income taxes by total
revenue (refer to Table 1 for total revenue).
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Non-GAAP adjustment consists of share-based compensation.
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
Non-GAAP adjustment consists of purchased software amortization.
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
|
Non-GAAP adjustment consists of other intangibles amortization.
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
Non-GAAP adjustment consists of other miscellaneous costs including
gains and losses since inception of hedges that mature within the
quarter, but exclude gains and losses of hedges that do not mature
within the quarter.
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
Non-GAAP operating margin is calculated by dividing non-GAAP income
from continuing operations before interest and income taxes by total
revenue (refer to Table 1 for total revenue).
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
|
The full year non-GAAP income tax expense is different from GAAP
income tax expense because of the difference in non-GAAP income from
continuing operations before income taxes. On an interim basis, this
difference would also include a difference in the impact of discrete
and permanent items where for GAAP purposes the effect is recorded
in the period such items arise, but for non-GAAP such items are
recorded pro rata to the fiscal year's remaining reporting periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
|
|
Table 7
|
CA Technologies
|
Reconciliation of GAAP to Non-GAAP
|
Operating Expenses and Diluted Earnings per Share
|
(unaudited)
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
Operating Expenses
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest and income taxes
|
|
$
|
825
|
|
|
$
|
850
|
|
|
$
|
2,404
|
|
$
|
2,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating adjustments:
|
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
26
|
|
|
|
27
|
|
|
|
80
|
|
|
76
|
|
|
|
Other intangibles amortization
|
|
|
14
|
|
|
|
16
|
|
|
|
41
|
|
|
50
|
|
|
|
Share-based compensation
|
|
|
18
|
|
|
|
20
|
|
|
|
62
|
|
|
61
|
|
|
|
Other (gains) expenses, net (1)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
2
|
|
|
(5
|
)
|
|
|
Total non-GAAP operating adjustment
|
|
$
|
58
|
|
|
$
|
62
|
|
|
$
|
185
|
|
$
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP operating expenses
|
|
$
|
767
|
|
|
$
|
788
|
|
|
$
|
2,219
|
|
$
|
2,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
Diluted EPS from Continuing Operations
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted EPS from continuing operations
|
|
$
|
0.55
|
|
|
$
|
0.54
|
|
|
$
|
1.53
|
|
$
|
1.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments, net of taxes:
|
|
|
|
|
|
|
|
|
|
|
Purchased software and other intangibles amortization
|
|
|
0.06
|
|
|
|
0.06
|
|
|
|
0.18
|
|
|
0.18
|
|
|
|
Share-based compensation
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
0.09
|
|
|
0.08
|
|
|
|
Other (gains) expenses, net (1)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
Non-GAAP effective tax rate adjustments (2)
|
|
|
(0.01
|
)
|
|
|
0.02
|
|
|
|
0.05
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS from continuing operations
|
|
$
|
0.63
|
|
|
$
|
0.65
|
|
|
$
|
1.85
|
|
$
|
1.71
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Non-GAAP adjustment consists of other miscellaneous costs including
gains and losses since inception of hedges that mature within the
quarter, but exclude gains and losses of hedges that do not mature
within the quarter.
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
The non-GAAP effective tax rate is equal to the full year GAAP
effective tax rate, therefore no adjustment is required on an annual
basis. On an interim basis, the difference in non-GAAP income tax
expense and GAAP income tax expense relates to the difference in
non-GAAP income from continuing operations before income taxes, and
includes a difference in the impact of discrete and permanent items
where for GAAP purposes, the effect is recorded in the period such
items arise but for non-GAAP purposes, such items are recorded pro
rata to the fiscal year's remaining reporting periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
|
|
|
|
|
|
Table 8
|
CA Technologies
|
Effective Tax Rate Reconciliation
|
GAAP and Non-GAAP
|
(unaudited)
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
December 31, 2012
|
|
December 31, 2012
|
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before interest and income taxes (1)
|
|
$ 370
|
|
$ 428
|
|
$ 1,088
|
|
$ 1,273
|
|
|
Interest expense, net
|
|
12
|
|
12
|
|
33
|
|
33
|
|
|
Income from continuing operations before income taxes
|
|
$ 358
|
|
$ 416
|
|
$ 1,055
|
|
$ 1,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory tax rate
|
|
35%
|
|
35%
|
|
35%
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax at statutory rate
|
|
$ 125
|
|
$ 146
|
|
$ 369
|
|
$ 434
|
|
|
Adjustments for discrete and permanent items (2)
|
|
(18)
|
|
(18)
|
|
(27)
|
|
(53)
|
|
|
Total tax expense
|
|
$ 107
|
|
$ 128
|
|
$ 342
|
|
$ 381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (3)
|
|
29.9%
|
|
30.7%
|
|
32.4%
|
|
30.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
December 31, 2011
|
|
December 31, 2011
|
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before interest and income taxes (1)
|
|
$ 413
|
|
$ 475
|
|
$ 1,088
|
|
$ 1,270
|
|
|
Interest expense, net
|
|
9
|
|
9
|
|
24
|
|
24
|
|
|
Income from continuing operations before income taxes
|
|
$ 404
|
|
$ 466
|
|
$ 1,064
|
|
$ 1,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory tax rate
|
|
35%
|
|
35%
|
|
35%
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax at statutory rate
|
|
$ 141
|
|
$ 163
|
|
$ 372
|
|
$ 436
|
|
|
Adjustments for discrete and permanent items (2)
|
|
-
|
|
(16)
|
|
(35)
|
|
(43)
|
|
|
Total tax expense
|
|
$ 141
|
|
$ 147
|
|
$ 337
|
|
$ 393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (3)
|
|
34.9%
|
|
31.5%
|
|
31.7%
|
|
31.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Refer to Table 6 for a reconciliation of income from continuing
operations before interest and income taxes on a GAAP basis to
income from continuing operations before interest and income taxes
on a non-GAAP basis.
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
The effective tax rate for GAAP generally includes the impact of
discrete and permanent items in the period such items arise, whereas
the effective tax rate for non-GAAP generally allocates the impact
of such items pro rata to the fiscal year's remaining reporting
periods.
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
The effective tax rate on GAAP and non-GAAP income from continuing
operations is the Company's provision for income taxes expressed as
a percentage of GAAP and non-GAAP income from continuing operations
before income taxes, respectively. The non-GAAP effective tax rate
is equal to the full year GAAP effective tax rate. On an interim
basis, the effective tax rates are determined based on an estimated
effective full year tax rate after the adjustments for the impacts
of certain discrete items (such as changes in tax rates,
reconciliations of tax returns to tax provisions and resolutions of
tax contingencies).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
|
|
Table 9
|
CA Technologies
|
Reconciliation of Projected GAAP Earnings per Share to
|
Projected Non-GAAP Earnings per Share
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ending
|
Projected Diluted EPS from Continuing
Operations
|
|
March 31, 2013
|
|
|
|
|
|
|
|
Projected GAAP diluted EPS from continuing operations range
|
|
$
|
2.00
|
|
to
|
|
$
|
2.08
|
|
|
|
|
|
|
|
Non-GAAP adjustments, net of taxes:
|
|
|
|
|
|
|
Purchased software and other intangibles amortization
|
|
|
0.24
|
|
|
|
|
0.24
|
Share-based compensation
|
|
|
0.12
|
|
|
|
|
0.12
|
|
|
|
|
|
|
|
Projected non-GAAP diluted EPS from continuing operations range
|
|
$
|
2.36
|
|
to
|
|
$
|
2.44
|
|
Refer to the discussion of non-GAAP financial measures included in the
accompanying press release for additional information.
Table 10
|
CA Technologies
|
Reconciliation of Projected GAAP Operating Margin to
|
Projected Non-GAAP Operating Margin
|
(unaudited)
|
|
|
|
|
|
Fiscal Year Ending
|
Projected Operating Margin
|
|
March 31, 2013
|
|
|
|
Projected GAAP operating margin
|
|
30%
|
|
|
|
Non-GAAP adjustments, net of taxes:
|
|
|
Purchased software and other intangibles amortization
|
|
4%
|
Share-based compensation
|
|
2%
|
|
|
|
Projected non-GAAP operating margin
|
|
36%
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in the
accompanying press release for additional information.
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