ISLANDIA, N.Y., July 21 /PRNewswire-FirstCall/ -- CA Technologies
(Nasdaq: CA) today reported financial results for its first quarter
ended June 30, 2010.
- Revenue $1.091 Billion, Up
3 Percent in Constant Currency and 5 Percent as
Reported
- GAAP EPS $0.43, Up 7 Percent in Constant Currency and Up
16 Percent as Reported
- Non-GAAP EPS $0.45, Down
1 Percent in Constant Currency and Flat as
Reported
- Reaffirms Revenue, Cash Flow 2011 Fiscal Year Outlook;
Increases GAAP and non-GAAP EPS Guidance
FINANCIAL OVERVIEW
|
|
|
|
First Quarter FY11 vs.
FY10
|
|
|
(in millions, except share
data)
|
|
FY11
|
FY10
|
% Change
|
% Change CC**
|
|
|
Revenue
|
|
$1,091
|
$1,044
|
5%
|
3%
|
|
|
GAAP Income from Continuing
Operations
|
|
$223
|
$195
|
14%
|
5%
|
|
|
Non-GAAP Income from Continuing
Operations*
|
|
$235
|
$245
|
(4%)
|
(5)%
|
|
|
GAAP Diluted EPS from Continuing
Operations
|
|
$0.43
|
$0.37
|
16%
|
7%
|
|
|
Non-GAAP Diluted EPS from
Continuing Operations*
|
|
$0.45
|
$0.45
|
0%
|
(1%)
|
|
|
Cash Flow from
Operations
|
|
$117
|
$262
|
(55%)
|
(55%)
|
|
|
*Non-GAAP income from continuing
operations and earnings per share from continuing operations 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
|
|
|
|
|
|
|
|
|
EXECUTIVE COMMENTARY
"In fiscal 2011, our focus is on execution as we grow our
core mainframe business and continue to build out our product
platforms in virtualization management, service assurance, and
identity and access management, which serve as on-ramps to emerging
technologies in the cloud and software as a service," said Chief
Executive Officer Bill McCracken.
"First quarter revenue and earnings met our expectations and we
will continue to make changes to the Company's operations to
improve execution and accelerate the sale of new products. We
believe these actions will help us realize our long-term strategic
and financial goals and further unlock shareholder value.
"Customer requirements drive our business model. During the
first quarter we introduced more than 20 new products and invested
in our CA World user conference, demonstrating the power of
our product portfolio to more than 5,000 customers and prospects,"
continued McCracken. "In addition, to better align the
Company with our target markets, we divested certain non-strategic
products and created two new organizations – the Customer
Solutions Group and the Technology and Development Group.
Working with our existing sales organization, the new organizations
will drive collaboration and accountability across the Company,
while enabling CA Technologies to deliver even greater customer
service and product innovation."
FIRST QUARTER REVENUE AND BOOKINGS
Total revenue growth in the first quarter can be attributed
primarily to increased execution of services engagements and
revenue associated with the sale of software products obtained
through the acquisition of NetQoS, Nimsoft and 3Tera. Bookings were
down primarily due to a renewal portfolio that was only about one
half of the portfolio available in the year ago period.
Weighted average contract duration was down due to lower scheduled
contract renewals in the first quarter of fiscal 2011 compared with
the first quarter of fiscal 2010 and a higher percentage of new
product transactions that generally are for a shorter duration than
renewals of existing contracts. However, the decrease in
duration contributed to current revenue backlog growth compared
with the prior year period, which is an important indicator of
future revenue levels.
- Revenue was $1.091 billion, up 3
percent in constant currency and 5 percent as reported.
- Total revenue backlog was $7.7
billion, up 2 percent in constant currency and flat as
reported. The current portion of revenue backlog was
$3.4 billion, up 4 percent in
constant currency and 2 percent as reported.
- North America revenue was
$666 million, up 6 percent in
constant currency and 7 percent as reported.
- International revenue was $425
million, down 1 percent in constant currency and up 1
percent as reported.
- Total bookings in the first quarter were $750 million, down 36 percent in constant
currency and 37 percent as reported primarily due to the above
mentioned smaller renewal portfolio.
- The Company signed six license agreements with aggregate values
greater than $10 million for a total
of $188 million, compared to 13 deals
for a total of $634 million in the
first quarter of fiscal year 2010. The first quarter of fiscal year
2010 included several contract extensions with terms greater than
4.5 years, four of which had a combined incremental value of
approximately $465 million. The
majority of these extensions were with managed services providers
who traditionally extend contracts for longer than average
lengths.
- The weighted average duration of subscription and maintenance
bookings for the quarter was 2.9 years, down from 4.2 years in the
prior year period.
- North America bookings were
$459 million, down 40 percent in
constant currency and as reported.
- International bookings were $291
million, down 27 percent in constant currency and 31 percent
as reported.
FIRST QUARTER EXPENSES AND MARGIN
Year-over-year GAAP results:
- Operating expenses, before interest and income taxes, were
$767 million, up 8 percent in
constant currency and 7 percent as reported.
- Operating income from continuing operations, before interest
and income taxes, was $324 million,
down 8 percent in constant currency and flat as reported.
- Operating margin was 30 percent, down 1 percentage point.
Expenses, operating income from continuing operations, and
operating margin for the first quarter were all unfavorably
affected by increased costs associated with CA World—the Company's
user conference—and additional costs associated with recently
acquired businesses.
Year-over-year non-GAAP results:
- Operating expenses, before interest and income taxes, were
$724 million, up 8 percent in
constant currency and 10 percent as reported.
- Operating income from continuing operations, before interest
and income taxes, was $367 million,
down 6 percent in constant currency and 5 percent as reported.
- Operating margin was 34 percent, a decrease of 3 percentage
points.
Non-GAAP results also were affected by the increased expenses
described above.
In the first quarter, the Company reported a GAAP tax rate of 28
percent and a non-GAAP tax rate of 34 percent.
CASH FLOW FROM OPERATIONS
Cash flow from operations was $117
million compared to $262
million in the prior year. The first quarter of fiscal year
2010 included an upfront cash payment of more than $100 million associated with a large contract
renewal. In addition, first quarter 2011 cash flow was affected by
the increase in expenses.
CAPITAL STRUCTURE
- Cash and cash equivalents were $2.476
billion.
- With $1.558 billion in total debt
outstanding, the Company's net cash position was $918 million.
- The Company repurchased approximately 2 million shares of stock
in the first quarter for a total of $40
million under the stock repurchase program authorized by the
Board of Directors in May, 2010. Between July 1, 2010 and July 20,
2010, the Company purchased an additional 1 million shares
at a cost of $20 million.
BUSINESS HIGHLIGHTS
During the first quarter the Company announced:
- The appointment of Arthur F.
Weinbach as its non-executive chairman of the Board.
- The appointment of two senior executives to further strengthen
its management team: David C.
Dobson, Executive Vice President and Group Executive,
Customer Solutions Group, and Phillip J.
Harrington, Jr., Executive Vice President, Risk and Chief
Administrative Officer.
- The divestiture of its non-strategic Information Governance
business to Autonomy Corporation plc, a global leader in
infrastructure software.
- A new stock repurchase program that authorizes the Company to
buy up to $500 million of its common
stock.
- The return of the Company to the Fortune 500.
OUTLOOK FOR FISCAL YEAR 2011
Beginning in the first quarter of fiscal year 2011, the Company
is excluding share-based compensation expense from its non-GAAP
financial measures. The following guidance, which represents
"forward-looking statements" (as defined below), takes into account
the exclusion of share-based compensation expense from future
non-GAAP results. To enable fiscal year 2011 guidance for non-GAAP
earnings per share from continuing operations to be compared to
fiscal year 2010 full year results, the Company provides full
fiscal year 2010 results for non-GAAP earnings per share from
continuing operations excluding share-based compensation expense
below.
The Company reaffirmed its outlook issued on May 13, 2010 for revenue and cash flow and
increased guidance for GAAP and non-GAAP earnings per share from
continuing operations. The Company also updated projected as
reported numbers based on June 30,
2010 exchange rates:
- Total revenue growth in a range of 3 percent to 5 percent in
constant currency. At June 30,
2010 exchange rates, this translates to reported revenue of
$4.4 billion to $4.5 billion;
- GAAP diluted earnings per share growth in constant currency in
a range of 5 percent to 13 percent, a two percentage point increase
on the top end of previous guidance. At June
30, 2010 exchange rates, this translates to reported diluted
earnings per share of $1.51 to
$1.63;
- Non-GAAP diluted earnings per share growth in constant currency
in a range of 7 percent to 14 percent, a two percentage point
increase on the top end from pervious guidance. At June 30, 2010 exchange rates, this translates to
reported non-GAAP diluted earnings per share of $1.82 to $1.94. Fiscal year 2010 non-GAAP diluted
earnings per share from continuing operations was $1.74 excluding share-based compensation expense;
and,
- Cash flow from operations growth in a range of 2 percent to 7
percent in constant currency. At June 30,
2010 exchange rates, this translates to reported cash flow
from operations of $1.38 billion to $1.45
billion.
This outlook also assumes no material acquisitions and a partial
currency hedge of operating income. The Company also expects a
full-year GAAP and non-GAAP tax rate in a range of 33 percent to 34
percent.
The Company anticipates approximately 510 million shares
outstanding at fiscal year 2011 year-end, and a weighted average
diluted shares outstanding of approximately 511 million for the
fiscal year. Guidance does not include the impact from any future
stock repurchases.
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 first
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- 545-1407. The international
participant number is 1-719-325-4895.
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About CA Technologies
CA Technologies (NASDAQ: CA) is an IT management software and
solutions company with expertise across all IT environments – from
mainframe and distributed, to virtual and cloud. CA Technologies
manages and secures IT environments and enables customers to
deliver more flexible IT services. CA Technologies innovative
products and services provide the insight and control essential for
IT organizations to power business agility. The majority of the
Global Fortune 500 relies on CA Technologies to manage evolving IT
ecosystems. For additional information, visit CA Technologies at
www.ca.com.
Follow CA Technologies
- CA Social Media Page
- CA Newsletters
- CA Press Releases
- CA Podcasts
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 from continuing operations, operating
margin, income from continuing operations and diluted earnings per
share from continuing operations exclude the following items:
non-cash amortization of purchased software and other intangibles,
share-based compensation, pre-fiscal year 2010 restructuring and
other charges and 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. Non-GAAP income
from continuing operations also excludes the interest on
convertible bonds. 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 pre-tax GAAP and non-GAAP
income from continuing operations, respectively. Such 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 income from continuing operations generally
allocating the impact of discrete items pro rata to the fiscal
year's remaining reporting periods. Non-GAAP adjusted cash flow
excludes restructuring and other payments. Free cash flow excludes
capital expenditures. 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 US dollars are converted into US dollars at
the exchange rate in effect on March
31, 2010, 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
Certain statements in this communication (such as statements
containing the words "believes," "plans," "anticipates," "expects,"
"estimates" 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, increasing sales in new and emerging
enterprises and markets, enabling the sales force to sell new
products and Software-as-a-Service offerings and improving the
Company's brand in the marketplace; global economic factors or
political events beyond the Company's control; general economic
conditions, including concerns regarding a global recession and
credit constraints, or unfavorable economic conditions in a
particular region, industry or business sector; failure to expand
channel partner programs; the ability to adequately manage and
evolve financial reporting and managerial systems and processes;
the ability to successfully acquire technology and software that
are consistent with our strategy and integrate acquired companies
and products into existing businesses; competition in product and
service offerings and pricing; the ability to retain and attract
qualified key personnel; the ability to adapt to rapid
technological and market changes; the ability of the Company's
products to remain compatible with ever-changing operating
environments; access to software licensed from third parties,
third-party code and specifications for the development of code;
use of software from open source code sources; discovery of errors
in the Company's software and potential product liability claims;
significant amounts of debt and possible future credit rating
changes; the failure to protect the Company's intellectual property
rights and source code; fluctuations in the number, terms and
duration of our license agreements as well as the timing of orders
from customers and channel partners; reliance upon large
transactions with customers; risks associated with sales to
government customers; breaches of the Company's software products
and the Company's and customers' data centers and IT environments;
access to third-party microcode; third-party claims of intellectual
property infringement or royalty payments; fluctuations in foreign
currencies; failure to successfully execute restructuring plans;
successful outsourcing of various functions to third parties;
potential tax liabilities; and these factors and the other factors
described more fully in the Company's filings with the Securities
and Exchange Commission. 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 © 2010 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.
Contacts:
|
Dan Kaferle
|
Kelsey Doherty
|
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|
Public Relations
|
Investor Relations
|
|
|
(631) 342-2111
|
(212) 415-6844
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daniel.kaferle@ca.com
|
kelsey.doherty@ca.com
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|
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|
Table 1
CA Technologies
Condensed Consolidated
Statements of Operations
(in millions, except per share
amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
Revenue
|
2010
|
|
2009
|
|
|
Subscription and maintenance
revenue
|
$ 961
|
|
$
941
|
|
|
Professional services
|
78
|
|
70
|
|
|
Software fees and
other
|
52
|
|
33
|
|
|
Total revenue
|
1,091
|
|
1,044
|
|
|
Expenses
|
|
|
|
|
|
Costs of licensing and
maintenance
|
77
|
|
66
|
|
|
Cost of professional
services
|
71
|
|
66
|
|
|
Amortization of capitalized
software costs
|
45
|
|
33
|
|
|
Selling and marketing
|
299
|
|
280
|
|
|
General and
administrative
|
117
|
|
110
|
|
|
Product development and
enhancements
|
128
|
|
117
|
|
|
Depreciation and amortization of
other intangible assets
|
44
|
|
38
|
|
|
Other (gains) expenses,
net
|
(11)
|
|
7
|
|
|
Restructuring and
other
|
(3)
|
|
2
|
|
|
Total expenses before interest
and income taxes
|
767
|
|
719
|
|
|
Income from continuing
operations before interest and income taxes
|
324
|
|
325
|
|
|
Interest expense, net
|
13
|
|
17
|
|
|
Income from continuing
operations before income taxes
|
311
|
|
308
|
|
|
Income tax expense
|
88
|
|
113
|
|
|
INCOME FROM CONTINUING
OPERATIONS
|
223
|
|
195
|
|
|
Loss from discontinued
operations, net of income taxes
|
6
|
|
-
|
|
|
NET INCOME
|
$ 217
|
|
$
195
|
|
|
|
|
|
|
|
|
Basic income (loss) per
share
|
|
|
|
|
|
Income from continuing
operations
|
$ 0.43
|
|
$
0.37
|
|
|
Loss from discontinued
operations
|
(0.01)
|
|
-
|
|
|
Net Income
|
$ 0.42
|
|
$
0.37
|
|
|
Basic weighted average shares
used in computation
|
510
|
|
516
|
|
|
|
|
|
|
|
|
Diluted income (loss) per
share
|
|
|
|
|
|
Income from continuing
operations
|
$ 0.43
|
|
$
0.37
|
|
|
Loss from discontinued
operations
|
(0.01)
|
|
-
|
|
|
Net Income
|
$ 0.42
|
|
$
0.37
|
|
|
Diluted weighted average shares
used in computation
|
511
|
|
540
|
|
|
|
|
|
|
|
|
Certain balances have been
revised to reflect the discontinued operations associated with the
sale of the Information Governance business.
|
|
|
|
|
|
|
|
Table 2
CA Technologies
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
March 31,
|
|
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$ 2,476
|
|
$
2,583
|
|
|
Trade and installment accounts
receivable, net
|
638
|
|
931
|
|
|
Deferred income taxes -
current
|
260
|
|
360
|
|
|
Other current assets
|
219
|
|
116
|
|
|
|
|
|
|
|
|
Total current
assets
|
3,593
|
|
3,990
|
|
|
Installment accounts receivable,
due after one year, net
|
-
|
|
46
|
|
|
Property and equipment,
net
|
438
|
|
452
|
|
|
Goodwill
|
5,567
|
|
5,667
|
|
|
Capitalized software and other
intangible assets, net
|
1,190
|
|
1,150
|
|
|
Deferred income taxes -
noncurrent
|
313
|
|
355
|
|
|
Other noncurrent assets,
net
|
190
|
|
178
|
|
|
|
|
|
|
|
|
Total assets
|
$11,291
|
|
$
11,838
|
|
|
|
|
|
|
|
|
Current portion of long-term
debt and loans payable
|
$
15
|
|
$
15
|
|
|
Deferred revenue (billed or
collected) - current
|
2,276
|
|
2,555
|
|
|
Deferred income taxes -
current
|
47
|
|
51
|
|
|
Other current
liabilities
|
700
|
|
967
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
3,038
|
|
3,588
|
|
|
|
|
|
|
|
|
Long-term debt, net of current
portion
|
1,543
|
|
1,530
|
|
|
Deferred income taxes -
noncurrent
|
133
|
|
134
|
|
|
Deferred revenue (billed or
collected) - noncurrent
|
962
|
|
1,068
|
|
|
Other noncurrent
liabilities
|
513
|
|
535
|
|
|
|
|
|
|
|
|
Total liabilities
|
6,189
|
|
6,855
|
|
|
|
|
|
|
|
|
Common stock
|
59
|
|
59
|
|
|
Additional paid-in
capital
|
3,577
|
|
3,657
|
|
|
Retained earnings
|
3,557
|
|
3,361
|
|
|
Accumulated other comprehensive
loss
|
(163)
|
|
(130)
|
|
|
Treasury stock
|
(1,928)
|
|
(1,964)
|
|
|
|
|
|
|
|
|
Total stockholders’
equity
|
5,102
|
|
4,983
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity
|
$11,291
|
|
$
11,838
|
|
|
|
|
|
|
Table 3
CA Technologies
Condensed Consolidated
Statements of Cash Flows
(in millions)
(unaudited)
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
|
|
|
|
2010
|
|
2009
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
Net
income
|
$ 217
|
|
$ 195
|
|
|
Adjustments to reconcile net income to net cash
provided by operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
89
|
|
73
|
|
|
Provision for deferred income
taxes
|
116
|
|
6
|
|
|
Provision for bad
debt
|
3
|
|
-
|
|
|
Share based compensation
expense
|
19
|
|
27
|
|
|
Amortization of discount on
convertible debt
|
-
|
|
8
|
|
|
Asset impairments and other
non-cash charges
|
5
|
|
1
|
|
|
Foreign currency transaction
gains
|
(2)
|
|
-
|
|
|
Changes in other operating assets and liabilities,
net
of
effect of acquisitions:
|
|
|
|
|
|
Decrease in trade and
installment accounts receivable, net
|
326
|
|
239
|
|
|
Decrease in deferred
revenue
|
(310)
|
|
(94)
|
|
|
Decrease in taxes payable,
net
|
(191)
|
|
(75)
|
|
|
Decrease in accounts payable,
accrued expenses and other
|
(4)
|
|
(14)
|
|
|
Decrease in accrued salaries,
wages and commissions
|
(105)
|
|
(63)
|
|
|
Decrease in restructuring
liabilities
|
(34)
|
|
(19)
|
|
|
Changes in other operating
assets and liabilities
|
(12)
|
|
(22)
|
|
|
NET CASH PROVIDED BY OPERATING
ACTIVITIES
|
117
|
|
262
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
Acquisitions, primarily businesses, net of cash
acquired,
|
|
|
|
|
|
and
purchased software
|
(9)
|
|
(3)
|
|
|
Purchases of property and equipment
|
(25)
|
|
(25)
|
|
|
Cash
proceeds from divestiture of assets
|
16
|
|
-
|
|
|
Capitalized software development costs
|
(42)
|
|
(37)
|
|
|
Other investing activities
|
(16)
|
|
(2)
|
|
|
NET CASH USED IN INVESTING
ACTIVITIES
|
(76)
|
|
(67)
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
Dividends paid
|
(21)
|
|
(21)
|
|
|
Purchases of common stock
|
(55)
|
|
-
|
|
|
Debt
repayments
|
(3)
|
|
(1)
|
|
|
Exercise of common stock options and other
|
4
|
|
-
|
|
|
NET CASH USED IN FINANCING
ACTIVITIES
|
(75)
|
|
(22)
|
|
|
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS BEFORE
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
(34)
|
|
173
|
|
|
Effect of exchange rate changes
on cash
|
(73)
|
|
93
|
|
|
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS
|
(107)
|
|
266
|
|
|
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD
|
2,583
|
|
2,712
|
|
|
CASH AND CASH EQUIVALENTS AT END
OF PERIOD
|
$2,476
|
|
$2,978
|
|
|
|
|
|
|
Table 4
CA Technologies
Constant Currency
Summary
(in millions)
(unaudited)
|
|
|
|
Three Months Ended June
30,
|
|
|
|
2010
|
|
2009
|
|
% Increase (Decrease) in $
US
|
|
% Increase (Decrease) in
Constant Currency (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
$ 750
|
|
$ 1,192
|
|
(37%)
|
|
(36%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
North America
|
$ 666
|
|
$ 625
|
|
7%
|
|
6%
|
|
|
International
|
425
|
|
419
|
|
1%
|
|
(1%)
|
|
|
Total revenue
|
$ 1,091
|
|
$ 1,044
|
|
5%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Subscription and
maintenance
|
$ 961
|
|
$ 941
|
|
2%
|
|
1%
|
|
|
Professional
services
|
78
|
|
70
|
|
11%
|
|
11%
|
|
|
Software fees and
other
|
52
|
|
33
|
|
58%
|
|
51%
|
|
|
Total revenue
|
$ 1,091
|
|
$ 1,044
|
|
5%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest
and
income taxes:
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP
(2)
|
$ 724
|
|
$ 657
|
|
10%
|
|
8%
|
|
|
Total GAAP
|
$ 767
|
|
$ 719
|
|
7%
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Constant currency
information is presented to provide a framework to assess how the
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, 2010, which was the
last day of fiscal year 2010. Constant currency excludes the
impacts from the Company's hedging program.
|
|
(2) Refer to Table 6 for a
reconciliation of total expenses before interest and income taxes
on a GAAP basis to total expenses before interest and income taxes
on a non-GAAP basis.
|
|
|
|
Certain balances have been
revised to reflect the discontinued operations associated with the
sale of the Information Governance business.
|
|
|
|
|
|
|
|
|
|
|
Table 5
CA Technologies
Reconciliation of GAAP Results
to Non-GAAP Net Income
(in millions, except per share
amounts)
(unaudited)
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
Total revenue
|
$ 1,091
|
|
$ 1,044
|
|
|
Total expenses before interest
and income taxes
|
767
|
|
719
|
|
|
|
|
|
|
|
|
Income from continuing
operations before interest and
|
|
|
|
|
|
income taxes
(1)
|
324
|
|
325
|
|
|
GAAP Operating
Margin (% of revenue)
|
30%
|
|
31%
|
|
|
|
|
|
|
|
|
Non-GAAP operating
adjustments:
|
|
|
|
|
|
Purchased software
amortization
|
22
|
|
13
|
|
|
Intangibles
amortization
|
16
|
|
13
|
|
|
Share-based
compensation
|
19
|
|
27
|
|
|
Restructuring and
other (2)
|
-
|
|
2
|
|
|
Hedging (gains)/losses,
net (3)
|
(14)
|
|
7
|
|
|
Total non-GAAP operating
adjustments
|
43
|
|
62
|
|
|
Non-GAAP income from continuing
operations before
|
|
|
|
|
|
interest and income
taxes
|
367
|
|
387
|
|
|
Non-GAAP Operating
Margin (% of revenue)
|
34%
|
|
37%
|
|
|
|
|
|
|
|
|
Interest expense, net
|
13
|
|
17
|
|
|
Interest on dilutive convertible
bonds
|
-
|
|
(10)
|
|
|
Non-GAAP income from continuing
operations before
|
|
|
|
|
|
income
taxes
|
354
|
|
380
|
|
|
|
|
|
|
|
|
Income tax expense
(4)
|
119
|
|
135
|
|
|
|
|
|
|
|
|
Non-GAAP income from continuing
operations (5)
|
$ 235
|
|
$ 245
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS from
continuing operations (5)(6)
|
$ 0.45
|
|
$ 0.45
|
|
|
Diluted weighted average shares
used in
|
|
|
|
|
|
computation
(6)
|
511
|
|
540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Condensed
Consolidated Statements of Operations on Table 1 for a bridge from
income from continuing operations before interest and income taxes
to income from continuing operations.
|
|
(2) Excludes $3 of benefit
related to the Fiscal 2010 restructuring plan for the three months
ended June 30, 2010.
|
|
(3) Consists of 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.
|
|
(4) The effective tax rate
on non-GAAP income from continuing operations is the Company's
provision for income taxes expressed as a percentage of non-GAAP
income from continuing operations before income taxes. Such
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).
|
|
(5) Non-GAAP income from
continuing operations and the number of shares used in the
computation of non-GAAP diluted EPS from continuing operations have
been adjusted to reflect the dilutive impact of the Company’s
1.625% Convertible Senior Notes and stock awards outstanding for
the period ending June 30, 2009.
|
|
(6) The calculation of the
non-GAAP diluted EPS from continuing operations includes certain
adjustments required by ASC 260-10-45 which treats certain stock
awards as participating securities for the computation of earnings
per share. As a result, non-GAAP diluted EPS from continuing
operations may not equal the non-GAAP income from continuing
operations divided by the diluted weighted average shares.
|
|
Refer to the discussion of
non-GAAP financial measures included in the accompanying press
release for additional information.
|
|
Certain balances have been
revised to reflect the discontinued operations associated with the
sale of the Information Governance business.
|
|
|
|
|
|
|
Table 6
CA Technologies
Reconciliation of GAAP to
Non-GAAP
Operating Expenses and Diluted
Earnings per Share
(in millions)
(unaudited)
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
|
|
|
Operating Expenses
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
Total expenses before interest
and income taxes
|
$ 767
|
|
$ 719
|
|
|
|
|
|
|
|
|
Non-GAAP operating
adjustments:
|
|
|
|
|
|
Purchased software
amortization
|
22
|
|
13
|
|
|
Intangibles
amortization
|
16
|
|
13
|
|
|
Share-based
compensation
|
19
|
|
27
|
|
|
Restructuring and
other
|
-
|
|
2
|
|
|
Hedging (gains)/losses,
net (1)
|
(14)
|
|
7
|
|
|
Total non-GAAP operating
adjustments
|
43
|
|
62
|
|
|
|
|
|
|
|
|
Total non-GAAP operating
expenses
|
$ 724
|
|
$ 657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
|
|
|
Diluted EPS from Continuing
Operations
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
GAAP diluted EPS from continuing
operations
|
$0.43
|
|
$0.37
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments, net of
taxes
|
|
|
|
|
|
Purchased software and
intangibles amortization
|
0.05
|
|
0.03
|
|
|
Share-based
compensation
|
0.02
|
|
0.03
|
|
|
Restructuring and
other
|
-
|
|
-
|
|
|
Hedging (gains)/losses,
net (1)
|
(0.02)
|
|
0.01
|
|
|
Non-GAAP effective tax
rate adjustments (2)
|
(0.03)
|
|
0.01
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS from
continuing operations
|
$0.45
|
|
$0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Consists of 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 effective tax rate
on non-GAAP income from continuing operations is the Company's
provision for income taxes expressed as a percentage of non-GAAP
income from continuing operations before income taxes. Such
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 balances have been
revised to reflect the discontinued operations associated with the
sale of the Information Governance business.
|
|
|
|
|
|
|
Table 7
CA Technologies
Effective Tax Rate
Reconciliation
GAAP and Non-GAAP
(in millions)
(unaudited)
|
|
|
|
Three Months Ended
|
|
|
|
June 30, 2010
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Income from continuing
operations before income taxes (1)
|
$ 311
|
|
$
354
|
|
|
|
|
|
|
|
|
Statutory tax rate
|
35%
|
|
35%
|
|
|
|
|
|
|
|
|
Tax at statutory rate
|
109
|
|
124
|
|
|
|
|
|
|
|
|
Adjustments for discrete and
permanent items (2)
|
(21)
|
|
(5)
|
|
|
|
|
|
|
|
|
Total tax expense
|
$ 88
|
|
$
119
|
|
|
|
|
|
|
|
|
Effective tax rate
(3)
|
28.3%
|
|
33.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Refer to Table 5 for a
reconciliation of income from continuing operations before interest
and income taxes on a GAAP basis to income from continuing
operations before 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. Such 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 balances have been
revised to reflect the discontinued operations associated with the
sale of the Information Governance business.
|
|
|
|
|
|
|
Table 8
CA Technologies
Reconciliation of Projected GAAP
Earnings per Share to
Projected Non-GAAP Earnings per
Share
(unaudited)
|
|
|
Fiscal Year Ending
|
|
|
March 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
Projected GAAP Diluted EPS From
Continuing Operations Range
|
$1.51
|
to
|
$1.63
|
|
|
|
|
|
|
Non-GAAP Adjustments, Net of
Taxes:
|
|
|
|
|
Purchased Software
and Intangibles Amortization
|
0.19
|
|
0.19
|
|
Share-based
Compensation
|
0.12
|
|
0.12
|
|
|
|
|
|
|
Non-GAAP Projected Diluted
Operating EPS From Continuing Operations Range
|
$1.82
|
to
|
$1.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to the discussion of
non-GAAP financial measures included in the accompanying press
release for additional information.
|
|
|
|
|
|
SOURCE CA Technologies