[January 26, 2016] |
|
CA Technologies Reports Third Quarter Fiscal Year 2016 Results
CA Technologies (NASDAQ:CA) today reported financial results for its
third quarter fiscal 2016, which ended December 31, 2015.
Mike Gregoire, CA Technologies Chief Executive Officer, said:
"I am pleased to report that total new sales, revenue, earnings and cash
flow from operations outperformed our expectations. Third quarter
results benefited from the combination of strong performance from recent
acquisitions, a higher level of renewal bookings growth, and better
sales execution, relative to our expectations. It shows that our
strategy is beginning to gather momentum. I am really happy to see that
our acquisitions are beginning to deliver on their potential.
"We feel that we are near an inflection point in the business. We stand
by our fiscal 2016 and medium-term guidance. As we said in November, we
expect our upcoming fiscal 2017 to be the year CA crosses into
sustained, albeit initially modest, revenue growth. That said, we know
there is still work to be done to grow at a rate that is representative
of CA's true potential.
"As the pendulum swings towards the desire to reduce complexity and
consolidate around full suite solutions providers who can operate
globally at scale, customers are finding CA and its broad portfolio to
be more attractive than point product vendors. We are investing in
innovation that matters to ensure that CA solutions are meaningful,
compelling and can drive growth for years to come, while maintaining
rigorous fiscal and execution discipline."
FINANCIAL OVERVIEW
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(dollars in millions, except share data)
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Third Quarter FY16 vs. FY15
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FY16
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FY15
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% Change
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% Change CC**
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Revenue
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$1,034
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|
$1,091
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(5)%
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(1)%
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GAAP Income from Continuing Operations
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|
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$219
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$218
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0%
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13%
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Non-GAAP Income from Continuing Operations*
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$268
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$297
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(10)%
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(2)%
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GAAP Diluted EPS from Continuing Operations
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$0.52
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$0.49
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6%
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18%
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Non-GAAP Diluted EPS from Continuing Operations*
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$0.63
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$0.67
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(6)%
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1%
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Cash Flow from Continuing Operations
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$332
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$313
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6%
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18%
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* 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
REVENUE AND BOOKINGS
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(dollars in millions)
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Third Quarter FY16 vs. FY15
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FY16
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% of Total
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FY15
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% of Total
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% Change
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% Change CC**
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North America Revenue
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$702
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68%
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$709
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65%
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(1)%
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0%
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International Revenue
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$332
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32%
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$382
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35%
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(13)%
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(1)%
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Total Revenue
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$1,034
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|
|
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$1,091
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(5)%
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(1)%
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|
|
|
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|
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North America Bookings
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$727
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59%
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$615
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58%
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18%
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19%
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International Bookings
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$515
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41%
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$452
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42%
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14%
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29%
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Total Bookings
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$1,242
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$1,067
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16%
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23%
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Current Revenue Backlog
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$3,030
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$3,189
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(5)%
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(2)%
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Total Revenue Backlog
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$6,800
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$6,685
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2%
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5%
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**CC: Constant Currency
-
Total revenue declined primarily as a result of an unfavorable foreign
exchange effect of $51 million. Our fiscal 2016 acquisitions of Rally
Software Development Corp. and Xceedium, Inc., contributed
approximately 3 points of revenue growth for the quarter.
-
Total bookings grew primarily due to an increase in Mainframe
Solutions renewals and bookings related to our acquisitions of Rally
and Xceedium.
-
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 $593 million. During the third quarter of fiscal
2015, 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 $394 million.
-
The weighted average duration of subscription and maintenance bookings
for the quarter was 3.76 years, compared with 3.29 years for the same
period in fiscal 2015.
EXPENSES AND MARGIN
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(dollars in millions)
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Third Quarter FY16 vs. FY15
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FY16
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FY15
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% Change
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% Change CC**
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GAAP
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Operating Expenses Before Interest and Income Taxes
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$741
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$773
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(4)%
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(2)%
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Operating Income Before Interest and Income Taxes
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$293
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$318
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(8)%
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2%
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Operating Margin
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28%
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29%
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Effective Tax Rate
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21.2%
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28.8%
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Non-GAAP*
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Operating Expenses Before Interest and Income Taxes
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$644
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$680
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(5)%
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(2)%
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Operating Income Before Interest and Income Taxes
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|
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$390
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$411
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(5)%
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3%
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Operating Margin
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38%
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38%
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Effective Tax Rate
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28.5%
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25.6%
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*A reconciliation of non-GAAP financial measures to their comparable
GAAP financial measures is included in the tables following this news
release. Year-over-year non-GAAP results exclude purchased software and
other intangibles amortization, share-based compensation, amortization
of internal software costs, Board approved workforce rebalancing
initiatives 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 on hedges that do not mature within the quarter.
**CC: Constant Currency
-
GAAP and Non-GAAP third quarter operating expenses decreased primarily
as a result of a favorable foreign exchange effect and a decrease in
non-acquisition personnel-related costs, partially offset by costs
from our acquisitions of Rally and Xceedium.
-
GAAP EPS in the third quarter of fiscal 2016 was positively impacted
by $0.05 from a decrease in the GAAP effective tax rate and by $0.02
from the accelerated share repurchase that was completed in November
2015. These items were partially offset by a negative $0.05 impact
from unfavorable foreign exchange.
-
Non-GAAP EPS in the third quarter of fiscal 2016 was negatively
affected by $0.06 from unfavorable foreign exchange and by $0.03 due
to an increase in the Non-GAAP effective tax rate. These items were
partially offset by a $0.02 increase from the accelerated share
repurchase.
SELECTED HIGHLIGHTS FROM THE QUARTER
-
At CA World in November, the Company:
-
Customer traction for CA Technologies innovations continued in the
quarter, as highlighted by:
-
A large global financial institution's expanded use of CA
Agile Central from a single division across its global
operations.
-
A multi-national conglomerate's selection of CA
Project & Portfolio Management (PPM) after extensive
evaluation in a highly competitive win.
-
CA
API Management added one of the largest insurance companies in
the world and an international financial technology company among
its new customers; expansion wins included a major US airline and
a leading global payments company.
-
CA
Privileged Access Management was chosen in two highly
competitive wins by a large U.S. federal agency and by a global
mass media and entertainment conglomerate.
-
Solutions Leadership & Recognition for the quarter included:
-
CA Technologies was again recognized as a leader in the Gartner
Magic Quadrant for Integrated IT Portfolio Analysis Applications,
2015.(1)
-
CA Technologies was named a leader in Privilege Management by
KuppingerCole.(2)
-
CA Technologies was named a leader in Privileged Identity
Management by Ovum.(3)
SEGMENT INFORMATION
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(dollars in millions)
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Third Quarter FY16 vs. FY15
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Revenue
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% Change
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% Change CC**
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Operating Margin
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FY16
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FY15
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FY16
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FY15
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Mainframe Solutions
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$554
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$596
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(7)%
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(2)%
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61%
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58%
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Enterprise Solutions
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$398
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$405
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(2)%
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3%
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12%
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14%
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Services
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$82
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$90
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(9)%
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(4)%
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6%
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6%
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**CC: Constant Currency
-
Mainframe Solutions revenue declined primarily due to an unfavorable
foreign exchange effect and, to a lesser extent, insufficient revenue
from prior period new sales to offset the decline in revenue
contribution from renewals. Operating margin increased compared with
the year-ago period primarily due to the decrease in total operating
costs.
-
Enterprise Solutions revenue declined due to an unfavorable foreign
exchange effect. Excluding the unfavorable effect of foreign exchange,
Enterprise Solutions revenue increased as a result of additional
revenue associated with our second quarter fiscal 2016 acquisitions,
which contributed approximately 8 points of revenue growth for the
quarter. Operating margin decreased primarily due to our second
quarter fiscal 2016 acquisitions.
-
Services revenue decreased primarily due to an unfavorable foreign
exchange effect and, to a lesser extent, lower professional services
engagements in the first half of fiscal 2016 and fiscal 2015.
Operating margin was consistent with the year-ago period.
CASH FLOW FROM OPERATIONS
-
Cash flow from operations for the third quarter of fiscal 2016 was
$332 million, versus $313 million in the year ago period. Cash flow
from operations increased compared with the year-ago period primarily
due to a decrease in vendor disbursements and payroll, partially
offset by the decrease in cash collections due to an unfavorable
effect of foreign exchange.
CAPITAL STRUCTURE
-
Cash, cash equivalents and investments at December 31, 2015 were
$2.353 billion.
-
With $1.964 billion in total debt outstanding and $139 million in
notional pooling, the Company's net cash, cash equivalents and
investments position was $250 million.
-
In November 2015, the Company repurchased 22 million shares of common
stock in a private transaction for $590 million.
-
The Company has completed its prior $1 billion stock repurchase
program authorized in May 2014.
-
The Company's Board of Directors approved a new $750 million stock
repurchase program which the Company expects to begin to execute in
fiscal 2017.
-
The Company distributed $105 million in dividends to shareholders.
-
The Company's outstanding share count at December 31, 2015 was 412
million.
-
The Company announced its intention to increase the dividend per share
of Common Stock in fiscal year 2017, subject to quarterly approval of
its board of directors, to $1.02 per share for the year (or $0.255 per
share on a quarterly basis).
OUTLOOK FOR FISCAL YEAR 2016
The Company reaffirmed the following outlook, which represents
"forward-looking statements" (as defined below).
The Company expects the following:
-
Total revenue to change in a range of minus 1 percent to flat in
constant currency, unchanged from previous guidance. The Company
currently expects total revenue to be at the lower end of this range
due primarily to the greater portion of new sales bookings recognized
ratably in the first half of fiscal 2016, compared to historical
trends. At December 31, 2015 exchange rates, this translates to
reported revenue of $3.99 billion to $4.03 billion.
-
GAAP diluted earnings per share from continuing operations to increase
in a range of 8 percent to 13 percent in constant currency. At
December 31, 2015 exchange rates, this translates to reported GAAP
diluted earnings per share from continuing operations of $1.74 to
$1.80.
-
Non-GAAP diluted earnings per share from continuing operations to
increase in a range of 4 percent to 7 percent in constant currency. At
December 31, 2015 exchange rates, this translates to reported non-GAAP
diluted earnings per share from continuing operations of $2.39 to
$2.45.
-
Cash flow from continuing operations to increase in the range of 2
percent to 7 percent in constant currency, unchanged from previous
guidance. At December 31, 2015 exchange rates, this translates to
reported cash flow from continuing operations of $0.97 billion to
$1.02 billion.
This outlook assumes no further material acquisitions. The Company
expects a full-year GAAP operating margin of 28 percent and non-GAAP
operating margin of 38 percent, unchanged from previous guidance.
The Company also expects a full-year GAAP and non-GAAP effective tax
rate of between 28 percent and 29 percent, unchanged from previous
guidance.
The Company anticipates approximately 412 million shares outstanding at
fiscal 2016 year-end and weighted average diluted shares outstanding of
approximately 427 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
conference call and webcast that the Company will host at 5:00 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 the press release and supplemental financial information at http://ca.com/invest
or can listen to the call at 1-877-561-2748. The international
participant number is 1-720-545-0044.
(1) Gartner, Inc., "Magic Quadrant for Integrated IT Portfolio Analysis
Applications, 2015," Daniel B. Stang and Jim Duggan, November 30, 2015.
The Gartner Report(s) described herein, (the "Gartner Report(s)")
represent(s) research opinion or viewpoints published, as part of a
syndicated subscription service, by Gartner, Inc. ("Gartner"), and are
not representations of fact. Each Gartner Report speaks as of its
original publication date (and not as of the date of this
[Annual/Quarterly Report]) and the opinions expressed in the Gartner
Report(s) are subject to change without notice.
Gartner does not endorse any vendor, product or service depicted in
its research publications, and does not advise technology users to
select only those vendors with the highest ratings or other designation.
Gartner research publications consist of the opinions of Gartner's
research organization and should not be construed as statements of fact.
Gartner disclaims all warranties, expressed or implied, with respect to
this research, including any warranties of merchantability or fitness
for a particular purpose.
(2) KuppingerCole Leadership Compass: Privilege Management, December 2015
(3) Ovum Decision Matrix: Selecting a Privileged Identity Management
Solution, 2015-2016
About CA Technologies
CA Technologies (NASDAQ: CA) creates software that fuels transformation
for companies and enables them to seize the opportunities of the
Application Economy. Software is at the heart of every business in every
industry. From planning, to development, to management and security, CA
is working with companies worldwide to change the way we live, transact,
and communicate - across mobile, private and public cloud, distributed
and mainframe environments. Learn more 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, include 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: share-based compensation expense; non-cash
amortization of purchased software and other intangible assets; charges
relating to rebalancing initiatives that are large enough to require
approval from the Company's Board of Directors and certain other gains
and losses, which include 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. The Company began expensing costs
for internally developed software where development efforts commenced in
the first quarter of fiscal 2014. Due to this change, the Company
excludes amortization of internally developed software costs previously
capitalized from these non-GAAP metrics. 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 in which 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 payments associated with the fiscal 2014
Board-approved rebalancing initiative as described above, capitalized
software development costs as described above, and restructuring and
other payments. Free cash flow excludes purchases of property and
equipment and capitalized software development costs. The Company
presents constant currency information to provide a framework for
assessing how the Company's 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 the last day of the Company's
prior fiscal year (i.e., March 31, 2015, March 31, 2014 and March 31,
2013, respectively). 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 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 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 relating to the future) 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, enabling the Company's sales force to accelerate
growth of new product sales (at levels sufficient to offset any decline
in revenue in the Company's Mainframe Solutions segment), improving the
Company's brand, technology and innovation awareness in the marketplace,
ensuring the Company's offerings for cloud computing, application
development and IT operations (DevOps), Software-as-a-Service (SaaS),
and mobile device management, as well as 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
to an extent greater than anticipated, and effectively managing the
strategic shift in the Company's business model to develop more easily
installed software, provide additional SaaS offerings and refocus the
Company's professional services and education engagements on those
engagements that are connected to new product sales, without affecting
the Company's performance to an extent greater than anticipated; the
failure to innovate or adapt to technological changes and introduce new
software products and services in a timely manner; competition in
product and service offerings and pricing; the ability of the Company's
products to remain compatible with ever-changing operating environments,
platforms or third party products; global economic factors or political
events beyond the Company's control and other business and legal risks
associated with non-U.S. operations; the failure to expand partner
programs; the ability to retain and attract qualified professionals;
general economic conditions and credit constraints, or unfavorable
economic conditions in a particular region, industry or business sector;
the ability to successfully integrate acquired companies and products
into the Company's existing business; risks associated with sales to
government customers; breaches of the Company's data center, network, as
well as the Company's software products, and the IT environments of the
Company's vendors and customers; the ability to adequately manage,
evolve and protect the Company's information systems, infrastructure and
processes; fluctuations in foreign exchange rates; discovery of errors
or omissions in the Company's software products or documentation and
potential product liability claims; the failure to protect the Company's
intellectual property rights and source code; the failure to renew large
license transactions on a satisfactory basis; access to software
licensed from third parties; risks associated with the use of software
from open source code sources; 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; events or
circumstances that would require the Company to record an impairment
charge relating to the Company's goodwill or capitalized software and
other intangible assets balances; potential tax liabilities; changes in
market conditions or the Company's credit ratings; the failure to
effectively execute the Company's workforce reductions, workforce
rebalancing and facilities consolidations; successful and secure
outsourcing of various functions to third parties; changes in generally
accepted accounting principles; 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 the
Company's 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 © 2016 CA, Inc. All Rights Reserved. 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:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Subscription and maintenance
|
|
$
|
828
|
|
$
|
892
|
|
$
|
2,496
|
|
$
|
2,709
|
|
Professional services
|
|
|
82
|
|
|
90
|
|
|
244
|
|
|
268
|
|
Software fees and other
|
|
|
124
|
|
|
109
|
|
|
276
|
|
|
262
|
|
Total revenue
|
|
$
|
1,034
|
|
$
|
1,091
|
|
$
|
3,016
|
|
$
|
3,239
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Costs of licensing and maintenance
|
|
$
|
73
|
|
$
|
74
|
|
$
|
209
|
|
$
|
217
|
|
Cost of professional services
|
|
|
75
|
|
|
84
|
|
|
224
|
|
|
253
|
|
Amortization of capitalized software costs
|
|
|
65
|
|
|
62
|
|
|
192
|
|
|
204
|
|
Selling and marketing
|
|
|
277
|
|
|
283
|
|
|
751
|
|
|
782
|
|
General and administrative
|
|
|
90
|
|
|
90
|
|
|
279
|
|
|
269
|
|
Product development and enhancements
|
|
|
133
|
|
|
143
|
|
|
420
|
|
|
443
|
|
Depreciation and amortization of other intangible assets
|
|
|
27
|
|
|
31
|
|
|
83
|
|
|
99
|
|
Other expenses, net
|
|
|
1
|
|
|
6
|
|
|
2
|
|
|
21
|
|
Total expenses before interest and income taxes
|
|
$
|
741
|
|
$
|
773
|
|
$
|
2,160
|
|
$
|
2,288
|
|
Income from continuing operations before interest and income taxes
|
|
$
|
293
|
|
$
|
318
|
|
$
|
856
|
|
$
|
951
|
|
Interest expense, net
|
|
|
15
|
|
|
12
|
|
|
36
|
|
|
38
|
|
Income from continuing operations before income taxes
|
|
$
|
278
|
|
$
|
306
|
|
$
|
820
|
|
$
|
913
|
|
Income tax expense
|
|
|
59
|
|
|
88
|
|
|
222
|
|
|
248
|
|
Income from continuing operations
|
|
$
|
219
|
|
$
|
218
|
|
$
|
598
|
|
$
|
665
|
|
Income from discontinued operations, net of income taxes
|
|
$
|
4
|
|
$
|
4
|
|
$
|
11
|
|
$
|
30
|
|
Net income
|
|
$
|
223
|
|
$
|
222
|
|
$
|
609
|
|
$
|
695
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.52
|
|
$
|
0.49
|
|
$
|
1.37
|
|
$
|
1.50
|
|
Income from discontinued operations
|
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.07
|
|
Net income
|
|
$
|
0.53
|
|
$
|
0.50
|
|
$
|
1.40
|
|
$
|
1.57
|
|
Basic weighted average shares used in computation
|
|
|
420
|
|
|
440
|
|
|
431
|
|
|
440
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common share:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.52
|
|
$
|
0.49
|
|
$
|
1.37
|
|
$
|
1.49
|
|
Income from discontinued operations
|
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.07
|
|
Net income
|
|
$
|
0.53
|
|
$
|
0.50
|
|
$
|
1.40
|
|
$
|
1.56
|
|
Diluted weighted average shares used in computation
|
|
|
421
|
|
|
441
|
|
|
432
|
|
|
441
|
|
|
|
|
|
|
|
|
|
|
|
Results reflect the discontinued operations associated with the CA
ERwin Data Modeling and CA arcserve data protection businesses.
|
|
|
|
Table 2
|
CA Technologies
|
Condensed Consolidated Balance Sheets
|
(in millions)
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
March 31,
|
|
|
|
2015
|
|
2015
|
|
|
|
(unaudited)
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,353
|
|
|
$
|
2,804
|
|
|
Trade accounts receivable, net
|
|
|
618
|
|
|
|
652
|
|
|
Deferred income taxes
|
|
|
341
|
|
|
|
318
|
|
|
Other current assets
|
|
|
142
|
|
|
|
213
|
|
|
Total current assets
|
|
$
|
3,454
|
|
|
$
|
3,987
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
249
|
|
|
$
|
252
|
|
|
Goodwill
|
|
|
6,123
|
|
|
|
5,806
|
|
|
Capitalized software and other intangible assets, net
|
|
|
866
|
|
|
|
731
|
|
|
Deferred income taxes
|
|
|
55
|
|
|
|
92
|
|
|
Other noncurrent assets, net
|
|
|
110
|
|
|
|
111
|
|
|
Total assets
|
|
$
|
10,857
|
|
|
$
|
10,979
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
8
|
|
|
$
|
10
|
|
|
Deferred revenue (billed or collected)
|
|
|
1,983
|
|
|
|
2,114
|
|
|
Deferred income taxes
|
|
|
7
|
|
|
|
7
|
|
|
Other current liabilities
|
|
|
701
|
|
|
|
807
|
|
|
Total current liabilities
|
|
$
|
2,699
|
|
|
$
|
2,938
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
$
|
1,956
|
|
|
$
|
1,253
|
|
|
Deferred income taxes
|
|
|
53
|
|
|
|
45
|
|
|
Deferred revenue (billed or collected)
|
|
|
667
|
|
|
|
863
|
|
|
Other noncurrent liabilities
|
|
|
255
|
|
|
|
255
|
|
|
Total liabilities
|
|
$
|
5,630
|
|
|
$
|
5,354
|
|
|
|
|
|
|
|
|
Common stock
|
|
$
|
59
|
|
|
$
|
59
|
|
|
Additional paid-in capital
|
|
|
3,638
|
|
|
|
3,631
|
|
|
Retained earnings
|
|
|
6,506
|
|
|
|
6,221
|
|
|
Accumulated other comprehensive loss
|
|
|
(469
|
)
|
|
|
(418
|
)
|
|
Treasury stock
|
|
|
(4,507
|
)
|
|
|
(3,868
|
)
|
|
Total stockholders' equity
|
|
$
|
5,227
|
|
|
$
|
5,625
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
10,857
|
|
|
$
|
10,979
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3
|
CA Technologies
|
Condensed Consolidated Statements of Cash Flows
|
(unaudited)
|
(in millions)
|
|
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
|
|
2015
|
|
2014
|
|
Operating activities from continuing operations:
|
|
|
|
|
|
Net income
|
|
$
|
223
|
|
|
$
|
222
|
|
|
Income from discontinued operations
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
Income from continuing operations
|
|
$
|
219
|
|
|
$
|
218
|
|
|
Adjustments to reconcile income from continuing operations to net
cash provided
|
|
|
|
|
|
by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
92
|
|
|
|
93
|
|
|
Deferred income taxes
|
|
|
(25
|
)
|
|
|
(13
|
)
|
|
Provision for bad debts
|
|
|
(1
|
)
|
|
|
-
|
|
|
Share-based compensation expense
|
|
|
25
|
|
|
|
23
|
|
|
Asset impairments and other non-cash items
|
|
|
1
|
|
|
|
1
|
|
|
Foreign currency transaction gains
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
Changes in other operating assets and liabilities, net of effect of
acquisitions:
|
|
|
|
|
|
Increase in trade accounts receivable
|
|
|
(181
|
)
|
|
|
(172
|
)
|
|
Increase in deferred revenue
|
|
|
143
|
|
|
|
52
|
|
|
Increase in taxes payable, net
|
|
|
51
|
|
|
|
76
|
|
|
Decrease in accounts payable, accrued expenses and other
|
|
|
(41
|
)
|
|
|
(16
|
)
|
|
Increase in accrued salaries, wages and commissions
|
|
|
23
|
|
|
|
17
|
|
|
Changes in other operating assets and liabilities
|
|
|
27
|
|
|
|
36
|
|
|
Net cash provided by operating activities - continuing operations
|
|
$
|
332
|
|
|
$
|
313
|
|
|
Investing activities from continuing operations:
|
|
|
|
|
|
Acquisitions of businesses, net of cash acquired, and purchased
software
|
|
$
|
(1
|
)
|
|
$
|
(20
|
)
|
|
Purchases of property and equipment
|
|
|
(11
|
)
|
|
|
(12
|
)
|
|
Net cash used in investing activities - continuing operations
|
|
$
|
(12
|
)
|
|
$
|
(32
|
)
|
|
Financing activities from continuing operations:
|
|
|
|
|
|
Dividends paid
|
|
$
|
(105
|
)
|
|
$
|
(111
|
)
|
|
Purchases of common stock
|
|
|
(590
|
)
|
|
|
(75
|
)
|
|
Notional pooling borrowings, net
|
|
|
10
|
|
|
|
25
|
|
|
Debt borrowings (repayments), net
|
|
|
298
|
|
|
|
(502
|
)
|
|
Debt issuance costs
|
|
|
(1
|
)
|
|
|
-
|
|
|
Exercise of common stock options
|
|
|
1
|
|
|
|
11
|
|
|
Other financing activities
|
|
|
(5
|
)
|
|
|
-
|
|
|
Net cash used in financing activities - continuing operations
|
|
$
|
(392
|
)
|
|
$
|
(652
|
)
|
|
Effect of exchange rate changes on cash
|
|
$
|
(37
|
)
|
|
$
|
(125
|
)
|
|
Net change in cash and cash equivalents - continuing operations
|
|
$
|
(109
|
)
|
|
$
|
(496
|
)
|
|
Cash provided by (used in) operating activities - discontinued
operations
|
|
$
|
4
|
|
|
$
|
(14
|
)
|
|
Net effect of discontinued operations on cash and cash equivalents
|
|
$
|
4
|
|
|
$
|
(14
|
)
|
|
Decrease in cash and cash equivalents
|
|
$
|
(105
|
)
|
|
$
|
(510
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
$
|
2,458
|
|
|
$
|
3,193
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,353
|
|
|
$
|
2,683
|
|
|
|
|
|
|
|
|
Results reflect the discontinued operations associated with the CA
ERwin Data Modeling business.
|
|
|
|
Table 4
|
CA Technologies
|
Operating Segments
|
(unaudited)
|
(dollars in millions)
|
|
|
|
|
Three Months Ended December 31, 2015
|
|
|
Nine Months Ended December 31, 2015
|
|
|
|
Mainframe Solutions (1)
|
|
Enterprise Solutions (1)
|
|
Services (1)
|
|
Total
|
|
|
Mainframe Solutions (1)
|
|
Enterprise Solutions (1)
|
|
Services (1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (2)
|
|
$
|
554
|
|
|
|
$
|
398
|
|
|
|
$
|
82
|
|
|
|
$
|
1,034
|
|
|
|
$
|
1,668
|
|
|
|
$
|
1,104
|
|
|
|
$
|
244
|
|
|
|
$
|
3,016
|
|
|
Expenses (3)
|
|
|
218
|
|
|
|
|
349
|
|
|
|
|
77
|
|
|
|
|
644
|
|
|
|
|
641
|
|
|
|
|
996
|
|
|
|
|
227
|
|
|
|
|
1,864
|
|
|
Segment profit
|
|
$
|
336
|
|
|
|
$
|
49
|
|
|
|
$
|
5
|
|
|
|
$
|
390
|
|
|
|
$
|
1,027
|
|
|
|
$
|
108
|
|
|
|
$
|
17
|
|
|
|
$
|
1,152
|
|
|
Segment operating margin
|
|
|
61
|
%
|
|
|
|
12
|
%
|
|
|
|
6
|
%
|
|
|
|
38
|
%
|
|
|
|
62
|
%
|
|
|
|
10
|
%
|
|
|
|
7
|
%
|
|
|
|
38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
|
|
|
$
|
390
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,152
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106
|
|
|
Other intangibles amortization
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
|
|
Internally developed software products amortization
|
|
|
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86
|
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70
|
|
|
Other gains, net (4)
|
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
$
|
278
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2014
|
|
|
Nine Months Ended December 31, 2014
|
|
|
|
Mainframe Solutions (1)
|
|
Enterprise Solutions (1)
|
|
Services (1)
|
|
Total
|
|
|
Mainframe Solutions (1)
|
|
Enterprise Solutions (1)
|
|
Services (1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (2)
|
|
$
|
596
|
|
|
|
$
|
405
|
|
|
|
$
|
90
|
|
|
|
$
|
1,091
|
|
|
|
$
|
1,820
|
|
|
|
$
|
1,151
|
|
|
|
$
|
268
|
|
|
|
$
|
3,239
|
|
|
Expenses (3)
|
|
|
248
|
|
|
|
|
347
|
|
|
|
|
85
|
|
|
|
|
680
|
|
|
|
|
717
|
|
|
|
|
999
|
|
|
|
|
256
|
|
|
|
|
1,972
|
|
|
Segment profit
|
|
$
|
348
|
|
|
|
$
|
58
|
|
|
|
$
|
5
|
|
|
|
$
|
411
|
|
|
|
$
|
1,103
|
|
|
|
$
|
152
|
|
|
|
$
|
12
|
|
|
|
$
|
1,267
|
|
|
Segment operating margin
|
|
|
58
|
%
|
|
|
|
14
|
%
|
|
|
|
6
|
%
|
|
|
|
38
|
%
|
|
|
|
61
|
%
|
|
|
|
13
|
%
|
|
|
|
4
|
%
|
|
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
|
|
|
$
|
411
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,267
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87
|
|
|
Other intangibles amortization
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
|
|
|
Internally developed software products amortization
|
|
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
117
|
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65
|
|
|
Other (gains) expenses, net (4)
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
$
|
306
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
913
|
|
|
|
|
(1)
|
|
The Company's Mainframe Solutions and Enterprise Solutions segments
comprise its software business organized by the nature of the
Company's software offerings and the platform on which the products
operate. The Services segment comprises product implementation,
consulting, customer education and customer training, including
those directly related to the Mainframe Solutions and Enterprise
Solutions software that the Company sells to its customers.
|
|
|
|
(2)
|
|
The Company regularly enters into a single arrangement with a
customer that includes mainframe solutions, enterprise solutions and
services. The amount of contract revenue assigned to operating
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 operating segment is then
recognized in a manner consistent with the revenue recognition
policies the Company applies to the customer contract for purposes
of preparing the 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 and general and
administrative costs. Allocated segment costs primarily include
indirect and non-segment specific direct 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 of cost of professional services and other
direct costs included within selling and marketing and general and
administrative expenses. There are no allocated or indirect costs
for the Services segment.
|
|
|
|
(4)
|
|
Other (gains) expenses, net consists of costs associated with the
FY2014 Board approved rebalancing initiative (the Fiscal 2014 Plan),
certain foreign exchange derivative hedging gains and losses, and
other miscellaneous costs.
|
|
|
|
|
|
Results reflect the discontinued operations associated with the CA
ERwin Data Modeling and CA arcserve data protection businesses.
|
|
Table 5
|
CA Technologies
|
Constant Currency Summary
|
(unaudited)
|
(dollars in millions)
|
|
|
|
|
Three Months Ended December 31,
|
|
Nine Months Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
% Increase (Decrease) in $ US
|
|
% Increase (Decrease) in Constant Currency (1)
|
|
2015
|
|
2014
|
|
% Increase (Decrease) in $ US
|
|
% Increase (Decrease) in Constant Currency (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
|
$
|
1,242
|
|
$
|
1,067
|
|
16
|
%
|
|
23
|
%
|
|
$
|
3,287
|
|
$
|
2,540
|
|
29
|
%
|
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
$
|
702
|
|
$
|
709
|
|
(1
|
)%
|
|
0
|
%
|
|
$
|
2,031
|
|
$
|
2,084
|
|
(3
|
)%
|
|
|
(2
|
)%
|
|
International
|
|
|
332
|
|
|
382
|
|
(13
|
)%
|
|
(1
|
)%
|
|
|
985
|
|
|
1,155
|
|
(15
|
)%
|
|
|
0
|
%
|
|
Total revenue
|
|
$
|
1,034
|
|
$
|
1,091
|
|
(5
|
)%
|
|
(1
|
)%
|
|
$
|
3,016
|
|
$
|
3,239
|
|
(7
|
)%
|
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and maintenance
|
|
$
|
828
|
|
$
|
892
|
|
(7
|
)%
|
|
(2
|
)%
|
|
$
|
2,496
|
|
$
|
2,709
|
|
(8
|
)%
|
|
|
(2
|
)%
|
|
Professional services
|
|
|
82
|
|
|
90
|
|
(9
|
)%
|
|
(4
|
)%
|
|
|
244
|
|
|
268
|
|
(9
|
)%
|
|
|
(3
|
)%
|
|
Software fees and other
|
|
|
124
|
|
|
109
|
|
14
|
%
|
|
18
|
%
|
|
|
276
|
|
|
262
|
|
5
|
%
|
|
|
10
|
%
|
|
Total revenue
|
|
$
|
1,034
|
|
$
|
1,091
|
|
(5
|
)%
|
|
(1
|
)%
|
|
$
|
3,016
|
|
$
|
3,239
|
|
(7
|
)%
|
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mainframe solutions
|
|
$
|
554
|
|
$
|
596
|
|
(7
|
)%
|
|
(2
|
)%
|
|
$
|
1,668
|
|
$
|
1,820
|
|
(8
|
)%
|
|
|
(3
|
)%
|
|
Enterprise solutions
|
|
|
398
|
|
|
405
|
|
(2
|
)%
|
|
3
|
%
|
|
|
1,104
|
|
|
1,151
|
|
(4
|
)%
|
|
|
1
|
%
|
|
Services
|
|
|
82
|
|
|
90
|
|
(9
|
)%
|
|
(4
|
)%
|
|
|
244
|
|
|
268
|
|
(9
|
)%
|
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest and income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP (2)
|
|
$
|
644
|
|
$
|
680
|
|
(5
|
)%
|
|
(2
|
)%
|
|
$
|
1,864
|
|
$
|
1,972
|
|
(5
|
)%
|
|
|
(1
|
)%
|
|
Total GAAP
|
|
|
741
|
|
|
773
|
|
(4
|
)%
|
|
(2
|
)%
|
|
|
2,160
|
|
|
2,288
|
|
(6
|
)%
|
|
|
(3
|
)%
|
|
|
|
(1)
|
|
Constant currency information is presented to provide a framework
for assessing how the Company's 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, 2015, which was the last day of the 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.
|
|
|
|
|
|
Results reflect the discontinued operations associated with the CA
ERwin Data Modeling and CA arcserve data protection businesses.
|
|
|
|
|
|
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,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
GAAP net income
|
|
$
|
223
|
|
|
$
|
222
|
|
|
$
|
609
|
|
|
$
|
695
|
|
|
GAAP income from discontinued operations, net of income taxes
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(11
|
)
|
|
|
(30
|
)
|
|
GAAP income from continuing operations
|
|
$
|
219
|
|
|
$
|
218
|
|
|
$
|
598
|
|
|
$
|
665
|
|
|
GAAP income tax expense
|
|
|
59
|
|
|
|
88
|
|
|
|
222
|
|
|
|
248
|
|
|
Interest expense, net
|
|
|
15
|
|
|
|
12
|
|
|
|
36
|
|
|
|
38
|
|
|
GAAP income from continuing operations before interest and income
taxes
|
|
$
|
293
|
|
|
$
|
318
|
|
|
$
|
856
|
|
|
$
|
951
|
|
|
GAAP operating margin (% of revenue) (1)
|
|
|
28
|
%
|
|
|
29
|
%
|
|
|
28
|
%
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments to expenses:
|
|
|
|
|
|
|
|
|
|
Costs of licensing and maintenance (2)
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
Cost of professional services (2)
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
3
|
|
|
Amortization of capitalized software costs (3)
|
|
|
65
|
|
|
|
62
|
|
|
|
192
|
|
|
|
204
|
|
|
Selling and marketing (2)
|
|
|
9
|
|
|
|
8
|
|
|
|
25
|
|
|
|
23
|
|
|
General and administrative (2)
|
|
|
9
|
|
|
|
8
|
|
|
|
25
|
|
|
|
21
|
|
|
Product development and enhancements (2)
|
|
|
4
|
|
|
|
4
|
|
|
|
12
|
|
|
|
14
|
|
|
Depreciation and amortization of other intangible assets (4)
|
|
|
11
|
|
|
|
14
|
|
|
|
36
|
|
|
|
45
|
|
|
Other (gains) expenses, net (5)
|
|
|
(4
|
)
|
|
|
(6
|
)
|
|
|
(2
|
)
|
|
|
2
|
|
|
Total Non-GAAP adjustment to operating expenses
|
|
$
|
97
|
|
|
$
|
93
|
|
|
$
|
296
|
|
|
$
|
316
|
|
|
Non-GAAP income from continuing operations before interest and
income taxes
|
|
$
|
390
|
|
|
$
|
411
|
|
|
$
|
1,152
|
|
|
$
|
1,267
|
|
|
Non-GAAP operating margin (% of revenue) (6)
|
|
|
38
|
%
|
|
|
38
|
%
|
|
|
38
|
%
|
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
15
|
|
|
|
12
|
|
|
|
36
|
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income tax expense
|
|
|
59
|
|
|
|
88
|
|
|
|
222
|
|
|
|
248
|
|
|
Non-GAAP adjustment to income tax expense (7)
|
|
|
48
|
|
|
|
14
|
|
|
|
96
|
|
|
|
103
|
|
|
Non-GAAP income tax expense
|
|
$
|
107
|
|
|
$
|
102
|
|
|
$
|
318
|
|
|
$
|
351
|
|
|
Non-GAAP income from continuing operations
|
|
$
|
268
|
|
|
$
|
297
|
|
|
$
|
798
|
|
|
$
|
878
|
|
|
|
|
(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)
|
|
For the three month periods ending December 31, 2015 and 2014,
non-GAAP adjustment consists of $39 million and $28 million of
purchased software amortization and $26 million and $34 million of
internally developed software products amortization, respectively.
For the nine month periods ending December 31, 2015 and 2014,
non-GAAP adjustment consists of $106 million and $87 million of
purchased software amortization and $86 million and $117 million of
internally developed software products amortization, respectively.
|
|
|
|
(4)
|
|
Non-GAAP adjustment consists of other intangibles amortization.
|
|
|
|
(5)
|
|
Non-GAAP adjustment consists of charges relating to the FY2014 Board
approved rebalancing initiative (the Fiscal 2014 Plan) and certain
other gains and losses, including gains and losses since inception
of hedges that mature within the quarter, but excludes 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.
|
|
|
|
|
|
Results reflect the discontinued operations associated with the CA
ERwin Data Modeling and CA arcserve data protection businesses.
|
|
|
|
|
|
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
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest and income taxes
|
|
$
|
741
|
|
|
$
|
773
|
|
|
$
|
2,160
|
|
|
$
|
2,288
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating adjustments:
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
39
|
|
|
|
28
|
|
|
|
106
|
|
|
|
87
|
|
|
Other intangibles amortization
|
|
|
11
|
|
|
|
14
|
|
|
|
36
|
|
|
|
45
|
|
|
Internally developed software products amortization
|
|
|
26
|
|
|
|
34
|
|
|
|
86
|
|
|
|
117
|
|
|
Share-based compensation
|
|
|
25
|
|
|
|
23
|
|
|
|
70
|
|
|
|
65
|
|
|
Other (gains) expenses, net (1)
|
|
|
(4
|
)
|
|
|
(6
|
)
|
|
|
(2
|
)
|
|
|
2
|
|
|
Total non-GAAP operating adjustment
|
|
$
|
97
|
|
|
$
|
93
|
|
|
$
|
296
|
|
|
$
|
316
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP operating expenses
|
|
$
|
644
|
|
|
$
|
680
|
|
|
$
|
1,864
|
|
|
$
|
1,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
Diluted EPS from Continuing Operations
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted EPS from continuing operations
|
|
$
|
0.52
|
|
|
$
|
0.49
|
|
|
$
|
1.37
|
|
|
$
|
1.49
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments, net of taxes:
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
0.07
|
|
|
|
0.05
|
|
|
|
0.18
|
|
|
|
0.14
|
|
|
Other intangibles amortization
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.06
|
|
|
|
0.08
|
|
|
Internally developed software products amortization
|
|
|
0.05
|
|
|
|
0.05
|
|
|
|
0.14
|
|
|
|
0.19
|
|
|
Share-based compensation
|
|
|
0.05
|
|
|
|
0.04
|
|
|
|
0.12
|
|
|
|
0.11
|
|
|
Other (gains) expenses, net (1)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
-
|
|
|
|
-
|
|
|
Non-GAAP effective tax rate adjustments (2)
|
|
|
(0.07
|
)
|
|
|
0.03
|
|
|
|
(0.04
|
)
|
|
|
(0.04
|
)
|
|
Total non-GAAP adjustment
|
|
$
|
0.11
|
|
|
$
|
0.18
|
|
|
$
|
0.46
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS from continuing operations
|
|
$
|
0.63
|
|
|
$
|
0.67
|
|
|
$
|
1.83
|
|
|
$
|
1.97
|
|
|
|
|
(1)
|
|
Other (gains) expenses, net consists of costs associated with the
FY2014 Board approved rebalancing initiative (the Fiscal 2014 Plan),
certain foreign exchange derivative hedging gains and losses, and
other miscellaneous costs.
|
|
|
|
(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.
|
|
|
|
|
|
Results reflect the discontinued operations associated with the CA
ERwin Data Modeling and CA arcserve data protection businesses.
|
|
|
|
|
|
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, 2015
|
|
December 31, 2015
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before interest and income taxes (1)
|
|
$
|
293
|
|
|
$
|
390
|
|
|
$
|
856
|
|
|
$
|
1,152
|
|
|
Interest expense, net
|
|
|
15
|
|
|
|
15
|
|
|
|
36
|
|
|
|
36
|
|
|
Income from continuing operations before income taxes
|
|
$
|
278
|
|
|
$
|
375
|
|
|
$
|
820
|
|
|
$
|
1,116
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Tax at statutory rate
|
|
$
|
97
|
|
|
$
|
131
|
|
|
$
|
287
|
|
|
$
|
391
|
|
|
Adjustments for discrete and permanent items (2)
|
|
|
(38
|
)
|
|
|
(24
|
)
|
|
|
(65
|
)
|
|
|
(73
|
)
|
|
Total tax expense
|
|
$
|
59
|
|
|
$
|
107
|
|
|
$
|
222
|
|
|
$
|
318
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (3)
|
|
|
21.2
|
%
|
|
|
28.5
|
%
|
|
|
27.1
|
%
|
|
|
28.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31, 2014
|
|
December 31, 2014
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before interest and income taxes (1)
|
|
$
|
318
|
|
|
$
|
411
|
|
|
$
|
951
|
|
|
$
|
1,267
|
|
|
Interest expense, net
|
|
|
12
|
|
|
|
12
|
|
|
|
38
|
|
|
|
38
|
|
|
Income from continuing operations before income taxes
|
|
$
|
306
|
|
|
$
|
399
|
|
|
$
|
913
|
|
|
$
|
1,229
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Tax at statutory rate
|
|
$
|
107
|
|
|
$
|
140
|
|
|
$
|
320
|
|
|
$
|
430
|
|
|
Adjustments for discrete and permanent items (2)
|
|
|
(19
|
)
|
|
|
(38
|
)
|
|
|
(72
|
)
|
|
|
(79
|
)
|
|
Total tax expense
|
|
$
|
88
|
|
|
$
|
102
|
|
|
$
|
248
|
|
|
$
|
351
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (3)
|
|
|
28.8
|
%
|
|
|
25.6
|
%
|
|
|
27.2
|
%
|
|
|
28.6
|
%
|
|
|
|
(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.
|
|
|
|
|
|
Results reflect the discontinued operations associated with the CA
ERwin Data Modeling and CA arcserve data protection businesses.
|
|
|
|
|
|
Certain non-material differences may arise versus actual from impact
of rounding.
|
|
|
|
|
Table 9
|
CA Technologies
|
Reconciliation of Projected GAAP Metrics to Projected Non-GAAP
Metrics
|
(unaudited)
|
|
|
|
|
Fiscal Year Ending
|
|
Projected Diluted EPS from Continuing
Operations
|
|
March 31, 2016
|
|
|
|
|
|
|
|
Projected GAAP diluted EPS from continuing operations range
|
|
$
|
1.74
|
to
|
$
|
1.80
|
|
|
|
|
|
|
|
Non-GAAP adjustments, net of taxes:
|
|
|
|
|
|
Purchased software amortization
|
|
|
0.24
|
|
|
0.24
|
|
Other intangibles amortization
|
|
|
0.07
|
|
|
0.07
|
|
Internally developed software products amortization
|
|
|
0.18
|
|
|
0.18
|
|
Share-based compensation
|
|
|
0.16
|
|
|
0.16
|
|
Total non-GAAP adjustment
|
|
$
|
0.65
|
|
$
|
0.65
|
|
|
|
|
|
|
|
Projected non-GAAP diluted EPS from continuing operations range
|
|
$
|
2.39
|
to
|
$
|
2.45
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ending
|
|
Projected Operating Margin
|
|
March 31, 2016
|
|
|
|
|
|
|
|
Projected GAAP operating margin
|
|
|
28%
|
|
|
|
|
|
|
|
|
Non-GAAP operating adjustments:
|
|
|
|
|
|
Purchased software amortization
|
|
|
4%
|
|
|
Other intangibles amortization
|
|
|
1%
|
|
|
Internally developed software products amortization
|
|
|
3%
|
|
|
Share-based compensation
|
|
|
2%
|
|
|
Total non-GAAP operating adjustment
|
|
|
10%
|
|
|
|
|
|
|
|
|
Projected non-GAAP operating margin
|
|
|
38%
|
|
|
|
|
|
|
|
|
Refer to the discussion of non-GAAP financial measures included in
the accompanying press release for additional information.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160126006642/en/
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