ISLANDIA, N.Y., Oct. 21 /PRNewswire-FirstCall/ --
- Revenue $1.110 Billion, Up
5 Percent in Constant Currency and Up 4 Percent as
Reported
- GAAP EPS $0.43, Up 14
Percent in Constant Currency and Up 5 Percent as
Reported
- Non-GAAP EPS $0.49, Up 10
Percent in Constant Currency and Up 9 percent as
Reported
- Reaffirms 2011 Fiscal Year Outlook
CA Technologies (Nasdaq: CA) today reported financial results
for its second quarter ended Sept. 30,
2010.
FINANCIAL OVERVIEW
|
|
|
|
Second
Quarter FY11 vs. FY10
|
|
|
(in millions, except share
data)
|
|
FY11
|
FY10
|
% Change
|
% Change CC**
|
|
|
Revenue
|
|
$1,110
|
$1,067
|
4%
|
5%
|
|
|
GAAP Income from Continuing
Operations
|
|
$222
|
$218
|
2%
|
11%
|
|
|
Non-GAAP Income from Continuing
Operations*
|
|
$251
|
$248
|
1%
|
3%
|
|
|
GAAP Diluted EPS from Continuing
Operations
|
|
$0.43
|
$0.41
|
5%
|
14%
|
|
|
Non-GAAP Diluted EPS from
Continuing Operations*
|
|
$0.49
|
$0.45
|
9%
|
10%
|
|
|
Cash Flow from
Operations
|
|
$130
|
$120
|
8%
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
*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
EXECUTIVE COMMENTARY
"CA Technologies recorded a good second quarter," said Chief
Executive Officer Bill McCracken.
"We delivered solid financial performance by growing revenue,
earnings per share and cash flow. We also continued to take more
steps in support of our corporate strategy by building out our
virtualization management, security management and cloud offerings
through a number of key acquisitions and the announcement of new
industry-leading solutions.
"I see our second quarter results as a strong indication that
our strategy to manage and secure physical, virtual and cloud
environments is the right strategy," McCracken continued. "The
changes we made to our organization and our focus on rigorous
execution are beginning to pay off. These results, along with
our view of the back half of the year, give us the confidence to
reaffirm our full-year outlook."
SECOND QUARTER REVENUE AND BOOKINGS
Total revenue growth in the second quarter can be attributed
primarily to a significant increase in sales of the Company's
service assurance, project and portfolio management, and identity
and access management products. In addition, the services and
education business showed healthy growth.
- Revenue was $1.110 billion, up 5
percent in constant currency and 4 percent as reported.
- Total revenue backlog was $7.832
billion, up 2 percent in both constant currency and as
reported. The current portion of revenue backlog was
$3.463 billion, up 3 percent in both
constant currency and as reported.
- North America revenue was
$675 million, up 8 percent in both
constant currency and as reported.
- International revenue was $435
million, up 2 percent in constant currency and down 2
percent as reported.
- Total bookings in the second quarter were $1.018 billion, up 10 percent in constant
currency and up 9 percent as reported primarily driven by new
distributed product sales, partially offset by lower mainframe
capacity sales compared with the previous year.
- The Company signed 14 license agreements with aggregate values
greater than $10 million for a total
of $361 million, compared to 18
agreements for a total of $366
million in the second quarter of fiscal year 2010.
- The weighted average duration of subscription and maintenance
bookings for the quarter was 3.47 years, compared to 3.26 years in
the prior year period.
- North America bookings were
$674 million, up 15 percent in
constant currency and 14 percent as reported.
- International bookings were $344
million, up 1 percent in constant currency and flat as
reported.
SECOND QUARTER EXPENSES AND MARGIN
Year-over-year GAAP results:
- Operating expenses, before interest and income taxes, were
$803 million, up 9 percent in
constant currency and 10 percent as reported.
- Operating income, before interest and income taxes, was
$307 million, down 2 percent in
constant currency and down 9 percent as reported.
- Operating margin was 28 percent, down 4 percentage points from
the prior year period.
Expenses, operating income, and operating margin for the second
quarter were affected by increased costs associated with
acquisitions. This was offset in part by a $10 million benefit from a one-time sale of an
equity interest, which translated to a $0.01 benefit to GAAP and non-GAAP EPS.
Year-over-year non-GAAP results, which excludes purchased
software and intangibles amortization, pre-fiscal year 2010
restructuring costs and other costs, share-based compensation
expense, and includes gains and losses on hedges that mature within
the quarter, but excludes gains and losses on hedges that do not
mature within the quarter:
- Operating expenses, before interest and income taxes, were
$721 million, up 8 percent in
constant currency and up 7 percent as reported.
- Operating income, before interest and income taxes, was
$389 million, flat in constant
currency and down 1 percent as reported.
- Operating margin was 35 percent, a decrease of 2 percentage
points.
Non-GAAP results also were affected by the increased expenses
described above.
In the second quarter, the Company reported a GAAP tax rate of
25 percent and a non-GAAP tax rate of 34 percent.
CASH FLOW FROM OPERATIONS
Cash flow from operations was $130
million compared to $120
million in the prior year. Second quarter cash flow was
affected by a year-over-year $60
million increase in single installment payments from
customers.
CAPITAL STRUCTURE
- Cash and cash equivalents were $2.525
billion.
- With $1.567 billion in total debt
outstanding, the Company's net cash position was $958 million.
- The Company repurchased approximately 5 million shares of stock
in the second quarter for a total of $96
million under the $500 million
stock repurchase program authorized by the Board of Directors in
May 2010.
QUARTER HIGHLIGHTS
During the second quarter the Company announced:
- The acquisition of Arcot Systems, Inc., a leader in providing
advanced authentication and fraud prevention solutions through on
premises software or cloud services, in an all-cash transaction
valued at $200 million;
- The acquisition of privately-held 4Base Technology, a
virtualization and cloud infrastructure consulting firm. Terms of
the transaction were not disclosed;
- An agreement to acquire Hyperformix, a leading provider of
capacity management software for dynamic physical, virtual, and
cloud IT infrastructures. Terms of the transaction were not
disclosed and the sale is expected to close in the third
quarter;
- A strategic alliance with Fujitsu Limited that will enhance
each company's service assurance product portfolio and cloud
computing strategy; and,
- The general availability of five products in its powerful CA
Virtual suite, which offer comprehensive management capabilities to
provision, control, assure, secure and optimize virtual
environments. The Company also announced enhancements to CA
Identity Manager for automated provisioning to cloud applications
including Google Apps and salesforce.com's enterprise cloud
computing platform.
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 to be compared to fiscal year 2010 full year
results, the Company provides full fiscal year 2010 results for
non-GAAP earnings per share excluding stock-based compensation
expense below.
The Company reaffirmed its revised outlook issued on
July 21, 2010 for revenue and cash
flow, and GAAP and non-GAAP earnings per share. The Company also
updated projected as reported numbers based on Sept. 30, 2010 exchange rates:
- Total revenue growth in a range of 3 percent to 5 percent in
constant currency. At Sept. 30,
2010 exchange rates, this translates to reported revenue of
$4.45 billion to $4.55 billion;
- GAAP diluted earnings per share from continuing operations
growth in constant currency in a range of 5 percent to 13 percent.
At Sept. 30, 2010 exchange rates,
this translates to reported diluted earnings per share of
$1.54 to $1.66;
- Non-GAAP diluted earnings per share from continuing operations
growth in constant currency in a range of 7 percent to 14 percent.
At Sept. 30, 2010 exchange rates,
this translates to reported non-GAAP diluted earnings per share of
$1.85 to $1.97. Fiscal year 2010
non-GAAP diluted earnings per share 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 Sept. 30,
2010 exchange rates, this translates to reported cash flow
from operations of $1.400 billion to $1.475
billion.
Both GAAP and non-GAAP diluted earnings per share dollar ranges
provided have increased to reflect currency fluctuations,
year-to-date performance and reduced share count. Both GAAP
and non-GAAP earnings per share on the low and high end of the
range have increased by $0.03.
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 506 million shares
outstanding at fiscal year 2011 year-end and a weighted average
diluted shares outstanding of approximately 508 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 second
quarter results. The webcast will be archived on the Company
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 1-800-776-0420. The
international participant number is 1-913-312-1407.
(Logo:
http://photos.prnewswire.com/prnh/20100516/NY05617LOGO )
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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
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- Social Media Page
- Press Releases
- 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, operating margin, income from
operations and diluted earnings per share 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 also excludes the interest on convertible
bonds. 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 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 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
|
|
|
Public Relations
|
Investor Relations
|
|
|
(631) 342-2111
|
(212) 415-6844
|
|
|
daniel.kaferle@ca.com
|
kelsey.doherty@ca.com
|
|
|
|
|
Table
1
|
|
CA
Technologies
|
|
Condensed
Consolidated Statements of Operations
|
|
(in
millions, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
Revenue
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
Subscription and maintenance
revenue
|
$ 961
|
|
$ 969
|
|
$1,922
|
|
$1,910
|
|
|
Professional services
|
79
|
|
70
|
|
157
|
|
140
|
|
|
Software fees and
other
|
70
|
|
28
|
|
122
|
|
61
|
|
|
Total revenue
|
1,110
|
|
1,067
|
|
2,201
|
|
2,111
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Costs of licensing and
maintenance
|
74
|
|
72
|
|
151
|
|
138
|
|
|
Cost of professional
services
|
75
|
|
59
|
|
146
|
|
125
|
|
|
Amortization of capitalized
software costs
|
48
|
|
34
|
|
93
|
|
67
|
|
|
Selling and marketing
|
308
|
|
284
|
|
607
|
|
564
|
|
|
General and
administrative
|
113
|
|
119
|
|
230
|
|
229
|
|
|
Product development and
enhancements
|
125
|
|
114
|
|
253
|
|
231
|
|
|
Depreciation and amortization of
other intangible assets
|
45
|
|
39
|
|
89
|
|
77
|
|
|
Other expenses, net
|
15
|
|
7
|
|
4
|
|
14
|
|
|
Restructuring and
other
|
-
|
|
-
|
|
(3)
|
|
2
|
|
|
Total expenses before interest
and income taxes
|
803
|
|
728
|
|
1,570
|
|
1,447
|
|
|
Income from continuing
operations before interest and income taxes
|
307
|
|
339
|
|
631
|
|
664
|
|
|
Interest expense, net
|
12
|
|
22
|
|
25
|
|
39
|
|
|
Income from continuing
operations before income taxes
|
295
|
|
317
|
|
606
|
|
625
|
|
|
Income tax expense
|
73
|
|
99
|
|
161
|
|
212
|
|
|
INCOME FROM CONTINUING
OPERATIONS
|
$ 222
|
|
$ 218
|
|
$ 445
|
|
$ 413
|
|
|
Loss from discontinued
operations, net of income taxes
|
-
|
|
-
|
|
6
|
|
-
|
|
|
NET INCOME
|
$ 222
|
|
$ 218
|
|
$ 439
|
|
$ 413
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per
share
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$ 0.43
|
|
$ 0.42
|
|
$ 0.86
|
|
$ 0.79
|
|
|
Loss from discontinued
operations
|
-
|
|
-
|
|
(0.01)
|
|
-
|
|
|
Net Income
|
$ 0.43
|
|
$ 0.42
|
|
$ 0.85
|
|
$ 0.79
|
|
|
Basic weighted average shares
used in computation
|
507
|
|
518
|
|
508
|
|
517
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per
share
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$ 0.43
|
|
$ 0.41
|
|
$ 0.86
|
|
$ 0.78
|
|
|
Loss from discontinued
operations
|
-
|
|
-
|
|
(0.01)
|
|
-
|
|
|
Net Income
|
$ 0.43
|
|
$ 0.41
|
|
$ 0.85
|
|
$ 0.78
|
|
|
Diluted weighted average shares
used in computation
|
508
|
|
542
|
|
509
|
|
541
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
March
31,
|
|
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
2,525
|
|
$ 2,583
|
|
|
Trade and installment accounts
receivable, net
|
697
|
|
931
|
|
|
Deferred income taxes -
current
|
198
|
|
360
|
|
|
Other current assets
|
235
|
|
116
|
|
|
|
|
|
|
|
|
Total current
assets
|
3,655
|
|
3,990
|
|
|
Installment accounts receivable,
due after one year, net
|
-
|
|
46
|
|
|
Property and equipment,
net
|
449
|
|
452
|
|
|
Goodwill
|
5,594
|
|
5,667
|
|
|
Capitalized software and other
intangible assets, net
|
1,157
|
|
1,150
|
|
|
Deferred income taxes -
noncurrent
|
435
|
|
355
|
|
|
Other noncurrent assets,
net
|
209
|
|
178
|
|
|
|
|
|
|
|
|
Total assets
|
$
11,499
|
|
$ 11,838
|
|
|
|
|
|
|
|
|
Current portion of long-term
debt and loans payable
|
$
15
|
|
$
15
|
|
|
Deferred revenue (billed or
collected) - current
|
2,183
|
|
2,555
|
|
|
Deferred income taxes -
current
|
55
|
|
51
|
|
|
Other current
liabilities
|
739
|
|
967
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
2,992
|
|
3,588
|
|
|
|
|
|
|
|
|
Long-term debt, net of current
portion
|
1,552
|
|
1,530
|
|
|
Deferred income taxes -
noncurrent
|
207
|
|
134
|
|
|
Deferred revenue (billed or
collected) - noncurrent
|
942
|
|
1,068
|
|
|
Other noncurrent
liabilities
|
516
|
|
535
|
|
|
|
|
|
|
|
|
Total liabilities
|
6,209
|
|
6,855
|
|
|
|
|
|
|
|
|
Common stock
|
59
|
|
59
|
|
|
Additional paid-in
capital
|
3,580
|
|
3,657
|
|
|
Retained earnings
|
3,759
|
|
3,361
|
|
|
Accumulated other comprehensive
loss
|
(88)
|
|
(130)
|
|
|
Treasury stock
|
(2,020)
|
|
(1,964)
|
|
|
|
|
|
|
|
|
Total stockholders’
equity
|
5,290
|
|
4,983
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity
|
$
11,499
|
|
$ 11,838
|
|
|
|
|
|
|
Table
3
|
|
CA
Technologies
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(in
millions)
|
|
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
September
30,
|
|
|
|
2010
|
|
2009
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
Net
income
|
$ 222
|
|
$ 218
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
93
|
|
73
|
|
|
Provision for deferred
income taxes
|
71
|
|
62
|
|
|
Provision for bad
debts
|
2
|
|
3
|
|
|
Share based compensation
expense
|
21
|
|
26
|
|
|
Amortization of discount
on convertible debt
|
-
|
|
12
|
|
|
Asset impairments and
other non-cash activities
|
(6)
|
|
1
|
|
|
Foreign currency
transaction gains
|
2
|
|
(9)
|
|
|
Changes in other operating assets and liabilities, net of
effect of acquisitions:
|
|
|
|
|
|
Increase in trade and
installment accounts receivable, net
|
(47)
|
|
(49)
|
|
|
Decrease in deferred
revenue
|
(203)
|
|
(223)
|
|
|
Decrease in taxes payable,
net
|
(33)
|
|
(21)
|
|
|
Increase in accounts
payable, accrued expenses and other
|
3
|
|
1
|
|
|
Increase in accrued
salaries, wages and commissions
|
29
|
|
19
|
|
|
Decrease in restructuring
liabilities
|
(10)
|
|
(14)
|
|
|
Changes in other operating
assets and liabilities
|
(14)
|
|
21
|
|
|
NET CASH PROVIDED BY OPERATING
ACTIVITIES
|
130
|
|
120
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
Acquisitions, primarily businesses, net of cash
acquired,
|
|
|
|
|
|
and
purchased software
|
(19)
|
|
(2)
|
|
|
Purchases of property and equipment
|
(22)
|
|
(17)
|
|
|
Cash
proceeds from divestiture of assets
|
10
|
|
-
|
|
|
Capitalized software development costs
|
(31)
|
|
(50)
|
|
|
NET CASH USED IN INVESTING
ACTIVITIES
|
(62)
|
|
(69)
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
Dividends paid
|
(20)
|
|
(21)
|
|
|
Purchases of common stock
|
(100)
|
|
(45)
|
|
|
Debt
repayments
|
(4)
|
|
(3)
|
|
|
Exercise of common stock options and other
|
-
|
|
2
|
|
|
NET CASH USED IN FINANCING
ACTIVITIES
|
(124)
|
|
(67)
|
|
|
DECREASE IN CASH AND CASH
EQUIVALENTS BEFORE
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
(56)
|
|
(16)
|
|
|
Effect of exchange rate changes
on cash
|
105
|
|
63
|
|
|
INCREASE IN CASH AND CASH
EQUIVALENTS
|
49
|
|
47
|
|
|
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD
|
2,476
|
|
2,978
|
|
|
CASH AND CASH EQUIVALENTS AT END
OF PERIOD
|
$2,525
|
|
$3,025
|
|
|
|
|
|
|
Table
4
|
|
CA
Technologies
|
|
Constant
Currency Summary
|
|
(in
millions)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
|
|
2010
|
|
2009
|
|
%
Increase
(Decrease)
in $
US
|
|
%
Increase
(Decrease)
in
Constant
Currency
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
$ 1,018
|
|
$ 934
|
|
9%
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
North America
|
$ 675
|
|
$ 624
|
|
8%
|
|
8%
|
|
|
International
|
435
|
|
443
|
|
(2%)
|
|
2%
|
|
|
Total revenue
|
$ 1,110
|
|
$ 1,067
|
|
4%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Subscription and
maintenance
|
$ 961
|
|
$ 969
|
|
(1%)
|
|
1%
|
|
|
Professional
services
|
79
|
|
70
|
|
13%
|
|
13%
|
|
|
Software fees and
other
|
70
|
|
28
|
|
150%
|
|
150%
|
|
|
Total revenue
|
$ 1,110
|
|
$ 1,067
|
|
4%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest
and income taxes:
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP
(2)
|
$ 721
|
|
$ 675
|
|
7%
|
|
8%
|
|
|
Total GAAP
|
$ 803
|
|
$ 728
|
|
10%
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended September 30,
|
|
|
|
2010
|
|
2009
|
|
%
Increase
(Decrease)
in $
US
|
|
%
Increase
(Decrease)
in
Constant
Currency
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
$ 1,768
|
|
$ 2,126
|
|
(17%)
|
|
(16%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
North America
|
$ 1,341
|
|
$ 1,249
|
|
7%
|
|
7%
|
|
|
International
|
860
|
|
862
|
|
0%
|
|
1%
|
|
|
Total revenue
|
$ 2,201
|
|
$ 2,111
|
|
4%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Subscription and
maintenance
|
$ 1,922
|
|
$ 1,910
|
|
1%
|
|
1%
|
|
|
Professional
services
|
157
|
|
140
|
|
12%
|
|
12%
|
|
|
Software fees and
other
|
122
|
|
61
|
|
100%
|
|
95%
|
|
|
Total revenue
|
$ 2,201
|
|
$ 2,111
|
|
4%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest
and income taxes:
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP
(2)
|
$ 1,445
|
|
$ 1,331
|
|
9%
|
|
9%
|
|
|
Total GAAP
|
$ 1,570
|
|
$ 1,447
|
|
9%
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
Certain non-material
differences may arise versus actual from impact of rounding.
|
|
|
|
|
|
|
|
|
|
|
Table
5
|
|
CA
Technologies
|
|
Reconciliation of GAAP Results
to Non-GAAP Net Income
|
|
(in
millions, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
$ 1,110
|
|
$ 1,067
|
|
$ 2,201
|
|
$ 2,111
|
|
|
Total expenses before interest
and income taxes
|
803
|
|
728
|
|
1,570
|
|
1,447
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations before interest and
|
|
|
|
|
|
|
|
|
|
income taxes
(1)
|
307
|
|
339
|
|
631
|
|
664
|
|
|
GAAP Operating
Margin (% of revenue)
|
28%
|
|
32%
|
|
29%
|
|
31%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
adjustments:
|
|
|
|
|
|
|
|
|
|
Purchased software
amortization
|
22
|
|
12
|
|
44
|
|
26
|
|
|
Intangibles
amortization
|
17
|
|
13
|
|
33
|
|
26
|
|
|
Share-based
compensation
|
21
|
|
26
|
|
40
|
|
53
|
|
|
Restructuring and other
(2)
|
1
|
|
-
|
|
1
|
|
2
|
|
|
Hedging (gains)/losses,
net (3)
|
21
|
|
2
|
|
7
|
|
9
|
|
|
Total non-GAAP operating
adjustments
|
82
|
|
53
|
|
125
|
|
116
|
|
|
Non-GAAP income from continuing
operations before
|
|
|
|
|
|
|
|
|
|
interest and income
taxes
|
389
|
|
392
|
|
756
|
|
780
|
|
|
Non-GAAP Operating
Margin (% of revenue)
|
35%
|
|
37%
|
|
34%
|
|
37%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
12
|
|
22
|
|
25
|
|
39
|
|
|
Interest on dilutive convertible
bonds
|
-
|
|
(14)
|
|
-
|
|
(24)
|
|
|
Non-GAAP income from continuing
operations before
|
|
|
|
|
|
|
|
|
|
income
taxes
|
377
|
|
384
|
|
731
|
|
765
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(4)
|
126
|
|
136
|
|
245
|
|
271
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income from continuing
operations (5)
|
$ 251
|
|
$ 248
|
|
$ 486
|
|
$ 494
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS from
continuing operations (5)(6)
|
$ 0.49
|
|
$ 0.45
|
|
$ 0.94
|
|
$ 0.90
|
|
|
Diluted weighted average shares
used in
|
|
|
|
|
|
|
|
|
|
computation
(6)
|
508
|
|
542
|
|
509
|
|
541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 six months
ended September 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 three and six months ended September 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.
|
|
|
|
Certain non-material
differences may arise versus actual from impact of rounding.
|
|
|
|
|
|
|
|
|
|
|
Table
6
|
|
CA
Technologies
|
|
Reconciliation of GAAP to
Non-GAAP
|
|
Operating
Expenses and Diluted Earnings per Share
|
|
(in
millions, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
Operating Expenses
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest
and income taxes
|
$ 803
|
|
$ 728
|
|
$1,570
|
|
$1,447
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
adjustments:
|
|
|
|
|
|
|
|
|
|
Purchased software
amortization
|
22
|
|
12
|
|
44
|
|
26
|
|
|
Intangibles
amortization
|
17
|
|
13
|
|
33
|
|
26
|
|
|
Share-based
compensation
|
21
|
|
26
|
|
40
|
|
53
|
|
|
Restructuring and
other
|
1
|
|
-
|
|
1
|
|
2
|
|
|
Hedging (gains)/losses,
net (1)
|
21
|
|
2
|
|
7
|
|
9
|
|
|
Total non-GAAP operating
adjustments
|
82
|
|
53
|
|
125
|
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP operating
expenses
|
$ 721
|
|
$ 675
|
|
$1,445
|
|
$1,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
Diluted EPS from Continuing
Operations
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted EPS from continuing
operations
|
$0.43
|
|
$0.41
|
|
$ 0.86
|
|
$ 0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments, net of
taxes
|
|
|
|
|
|
|
|
|
|
Purchased software and
intangibles amortization
|
0.05
|
|
0.03
|
|
0.10
|
|
0.06
|
|
|
Share-based
compensation
|
0.03
|
|
0.03
|
|
0.05
|
|
0.06
|
|
|
Restructuring and
other
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Hedging (gains)/losses,
net (1)
|
0.03
|
|
-
|
|
0.01
|
|
-
|
|
|
Non-GAAP effective tax
rate adjustments (2)
|
(0.05)
|
|
(0.02)
|
|
(0.08)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS from
continuing operations
|
$0.49
|
|
$0.45
|
|
$ 0.94
|
|
$ 0.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
Certain non-material
differences may arise versus actual from impact of rounding.
|
|
|
|
|
|
|
|
|
|
|
Table
7
|
|
CA
Technologies
|
|
Effective
Tax Rate Reconciliation
|
|
GAAP and
Non-GAAP
|
|
(in
millions)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
September
30, 2010
|
|
September
30, 2010
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations before income taxes (1)
|
$ 295
|
|
$ 377
|
|
$ 606
|
|
$ 731
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory tax rate
|
35%
|
|
35%
|
|
35%
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax at statutory rate
|
103
|
|
132
|
|
212
|
|
256
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for discrete and
permanent items (2)
|
(30)
|
|
(6)
|
|
(51)
|
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total tax expense
|
$ 73
|
|
$ 126
|
|
$ 161
|
|
$ 245
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
(3)
|
24.9%
|
|
33.5%
|
|
26.6%
|
|
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.
|
|
|
|
Certain non-material
differences may arise versus actual from impact of rounding.
|
|
|
|
|
|
|
|
|
|
|
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
|
$1.54
|
to
|
$1.66
|
|
|
|
|
|
|
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
|
$1.85
|
to
|
$1.97
|
|
|
|
|
|
|
|
|
|
|
|
Refer to the discussion of
non-GAAP financial measures included in the accompanying press
release for additional information.
|
|
|
|
Certain non-material differences
may arise versus actual from impact of rounding.
|
|
|
|
|
|
Table
9
|
|
CA
Technologies
|
|
Reconciliation of Share-based
Compensation
|
|
(in
millions)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Costs of licensing and
maintenance
|
$ 1
|
|
$ 1
|
|
$ 2
|
|
$ 2
|
|
Costs of professional
services
|
1
|
|
-
|
|
2
|
|
1
|
|
Selling and marketing
|
8
|
|
9
|
|
15
|
|
17
|
|
General and
administrative
|
6
|
|
10
|
|
10
|
|
22
|
|
Product development and
enhancements
|
5
|
|
6
|
|
11
|
|
11
|
|
Share-based compensation expense
before tax
|
21
|
|
26
|
|
40
|
|
53
|
|
Income tax benefit
|
(7)
|
|
(9)
|
|
(13)
|
|
(18)
|
|
Net share-based
compensation expense
|
$14
|
|
$17
|
|
$27
|
|
$35
|
|
|
|
|
|
|
|
|
|
|
Certain
non-material differences may arise
versus actual from impact of rounding.
|
|
|
|
|
|
|
|
|
|
SOURCE CA Technologies
Copyright . 21 PR Newswire