UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report:
May
7, 2015
(Date
of earliest event reported)
CA,
Inc.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other jurisdiction of incorporation)
1-9247
(Commission File Number)
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13-2857434
(IRS Employer Identification No.)
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520 Madison Avenue New York, New York (Address
of principal executive offices)
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10022 (Zip Code)
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(800) 225-5224
(Registrant’s telephone number,
including area code)
Not applicable
(Former name or former address, if
changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On May 7, 2015, CA, Inc. (the “Company”) issued a press release
announcing its financial results for the fiscal quarter and fiscal year
ended March 31, 2015. A copy of the press release is attached as
Exhibit 99.1 hereto and is incorporated herein by reference.
In accordance with General Instruction B.2. of Form 8-K, the information
in this Current Report on Form 8-K furnished pursuant to Item 2.02,
including Exhibit 99.1, shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liability of that section,
and it shall not be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as
expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
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Description
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99.1
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Press release dated May 7, 2015 relating to CA, Inc.’s financial
results.
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SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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CA, Inc.
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Date:
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May 7, 2015
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By:
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/s/ C.H.R. DuPree
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C.H.R. DuPree
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Senior Vice President, Chief Governance
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Counsel, and Corporate Secretary
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Exhibit Index
Exhibit No.
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Description
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99.1
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Press release dated May 7, 2015 relating to CA, Inc.’s financial
results.
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Exhibit 99.1
CA
Technologies Reports Fourth Quarter and Full Fiscal Year 2015 Results
-
Company
Meets Fiscal Year 2015 Guidance Metrics
-
Fourth
Quarter and FY2015 Revenue of $1.023 Billion and $4.262 Billion,
Compared With $1.084 Billion and $4.412 Billion Last Year, Respectively
-
Fourth
Quarter and FY2015 GAAP EPS of $0.33 and $1.82, Compared With $0.23
and $1.96 Last Year, Respectively
-
Fourth
Quarter and FY2015 Non-GAAP EPS of $0.56 and $2.53, Compared With
$0.62 and $3.02 Last Year, Respectively
-
Fourth
Quarter and FY2015 Cash Flow From Continuing Operations of $485
Million and $1,030 Million, Compared With $478 Million and $973
Million Last Year, Respectively
-
Issues
FY2016 Outlook
NEW YORK--(BUSINESS WIRE)--May 7, 2015--CA Technologies (NASDAQ:CA)
today reported financial results for its fourth quarter and full fiscal
year 2015, ended March 31, 2015.
Mike Gregoire, CA Technologies Chief Executive Officer, said:
"In fiscal year 2015, we focused our efforts on our go-to-market
strategy, introduced new products and strengthened relationships with
our customers. As demonstrated by this quarter’s results, however, we
still have work to do to drive the kind of growth that our company has
the potential to achieve.
"I am convinced that we have set in place the appropriate strategy to
transform CA and return it to growth. We are making progress in
differentiating and building new products that help our customers
succeed in the Application Economy. We have also significantly improved
the underlying efficiency of our business.
"In fiscal year 2016, we will make the required investments to drive
innovation, while continuing to demonstrate financial discipline by
expanding full year operating margin by two percentage points to 39
percent*, excluding the impact of any future material acquisitions.
"Over the medium term, I am confident that we can achieve sustainable
low- to mid-single digit cash flow growth."
*This is a non-GAAP metric. GAAP margin is expected to improve three
percentage points to 30 percent.
FINANCIAL OVERVIEW
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(dollars in millions, except share data)
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Fourth Quarter FY15 vs. FY14
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Full Year FY15 vs. FY14
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FY15
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FY14
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% Change
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% Change CC**
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FY15
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FY14
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% Change
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% Change CC**
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Revenue
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$1,023
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$1,084
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(6)%
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(1)%
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$4,262
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$4,412
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(3)%
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(2)%
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GAAP Income from Continuing Operations
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$145
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$101
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44%
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49%
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$810
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$887
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(9)%
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(6)%
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Non-GAAP Income from Continuing Operations*
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$247
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$280
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(12)%
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(13)%
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$1,125
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$1,366
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(18)%
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(16)%
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GAAP Diluted EPS from Continuing Operations
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$0.33
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$0.23
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43%
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48%
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$1.82
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$1.96
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(7)%
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(5)%
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Non-GAAP Diluted EPS from Continuing Operations*
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$0.56
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$0.62
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(10)%
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(11)%
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$2.53
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$3.02
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(16)%
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(15)%
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Cash Flow from Continuing Operations
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$485
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$478
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1%
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8%
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$1,030
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$973
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6%
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9%
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* Non-GAAP income and non-GAAP 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
Fourth Quarter
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(dollars in millions)
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Fourth Quarter FY15 vs. FY14
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FY15
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% of Total
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FY14
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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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$682
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67%
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$692
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64%
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(1)%
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(1)%
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International Revenue
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$341
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33%
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$392
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36%
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(13)%
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(1)%
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Total Revenue
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$1,023
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$1,084
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(6)%
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(1)%
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North America Bookings
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$727
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68%
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$762
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63%
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(5)%
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(2)%
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International Bookings
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$342
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32%
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$454
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37%
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(25)%
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(11)%
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Total Bookings
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$1,069
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$1,216
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(12)%
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(5)%
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Current Revenue Backlog
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$3,141
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$3,500
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(10)%
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(3)%
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Total Revenue Backlog
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$6,530
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$7,639
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(15)%
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(8)%
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**CC: Constant Currency
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-
Total revenue decreased primarily due to lower subscription and
maintenance revenue. In addition, there was an unfavorable foreign
exchange effect on total revenue of $53 million.
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The Company's bookings were affected by an unfavorable foreign
exchange rate and fewer than expected early renewals, as well as a
year-over-year decrease in new product sales and services engagements.
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The Company executed a total of 19 license agreements with incremental
contract values in excess of $10 million each, for an aggregate
contract value of $507 million. During the fourth quarter of fiscal
2014, the Company executed a total of 16 license agreements with
incremental contract values in excess of $10 million each, for an
aggregate contract value of $456 million.
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The weighted average duration of subscription and maintenance bookings
for the quarter was 3.05 years, compared with 3.15 years for the same
period in fiscal 2014.
Full Year
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(dollars in millions)
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Full Year FY15 vs. FY14
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FY15
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% of Total
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FY14
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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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$2,766
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65%
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$2,820
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64%
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(2)%
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(2)%
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International Revenue
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$1,496
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35%
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$1,592
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36%
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(6)%
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(2)%
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Total Revenue
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$4,262
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$4,412
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(3)%
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(2)%
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North America Bookings
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$2,353
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65%
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$2,652
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60%
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(11)%
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(11)%
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International Bookings
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$1,256
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35%
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$1,769
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40%
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(29)%
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(23)%
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Total Bookings
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$3,609
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$4,421
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(18)%
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(15)%
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**CC: Constant Currency
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Total revenue decreased primarily due to lower subscription and
maintenance revenue and professional services revenue. In addition,
there was an unfavorable foreign exchange effect on total revenue of
$71 million.
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The Company's total bookings were affected by a year-over-year
decrease in renewals within subscription and maintenance bookings.
Renewals were affected by a difficult year-over-year comparison that
included a four-year contract renewal with a large systems integrator
for more than $300 million in fiscal 2014 and by a lower value of
contracts that renewed prior to their scheduled expiration dates.
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The Company executed a total of 51 license agreements with incremental
contract values in excess of $10 million each, for an aggregate
contract value of $1.448 billion. During fiscal 2014, the Company
executed a total of 54 license agreements with incremental contract
values in excess of $10 million each, for an aggregate contract value
of $1.973 billion.
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The weighted average duration of subscription and maintenance bookings
for fiscal 2015 was 3.24 years, compared with 3.35 years for fiscal
2014.
EXPENSES AND MARGIN
Fourth Quarter
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(dollars in millions)
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Fourth Quarter FY15 vs. FY14
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FY15
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FY14
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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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$812
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$899
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(10)%
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(5)%
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Operating Income Before Interest and Income Taxes
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$211
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$185
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14%
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18%
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Operating Margin
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21%
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17%
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Effective Tax Rate
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28.2%
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40.6%
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Non-GAAP*
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Operating Expenses Before Interest and Income Taxes
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$693
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$764
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(9)%
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(2)%
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Operating Income Before Interest and Income Taxes
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$330
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$320
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3%
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2%
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Operating Margin
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32%
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30%
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Effective Tax Rate
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23.1%
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8.2%
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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, capitalization
(an add-back) and 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
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GAAP and non-GAAP operating expenses were favorably affected by
foreign exchange.
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GAAP operating expenses in the fourth quarter fiscal 2014 were
affected by $37 million in expenses associated with the Company's
fiscal 2014 rebalancing plan (the Fiscal 2014 Plan), which resulted in
an unfavorable effect of $0.08 per diluted share.
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GAAP and non-GAAP operating expenses were favorably affected by lower
selling and marketing costs and adversely affected by severance costs.
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GAAP EPS was positively affected by $0.06 due to a lower effective tax
rate.
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Non-GAAP EPS was adversely affected by $0.11 due to a higher effective
tax rate in the fourth quarter of fiscal 2015. The Company recognized
a net benefit of approximately $181 million in the first quarter of
fiscal 2014 which favorably affected the non-GAAP effective tax rate
for the fourth quarter of fiscal 2014. This net discrete tax benefit
was primarily as a result of the resolution of uncertain tax positions
relating to U.S. and non-U.S. jurisdictions.
Full Year
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(dollars in millions)
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Full Year FY15 vs. FY14
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FY15
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FY14
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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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$3,100
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$3,342
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(7)%
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(5)%
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Operating Income Before Interest and Income Taxes
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$1,162
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$1,070
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9%
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9%
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Operating Margin
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27%
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24%
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Effective Tax Rate
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27.4%
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12.7%
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Non-GAAP*
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Operating Expenses Before Interest and Income Taxes
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$2,665
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$2,793
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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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$1,597
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$1,619
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(1)%
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(1)%
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Operating Margin
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37%
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37%
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Effective Tax Rate
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27.4%
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12.7%
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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, capitalization
(an add-back) and 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
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GAAP and non-GAAP operating expenses were favorably affected by
foreign exchange.
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GAAP operating expenses were favorably affected by a decrease of $151
million in expenses associated with the Fiscal 2014 Plan, which
resulted in a favorable effect of $0.30 per diluted share.
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GAAP and non-GAAP EPS were adversely affected by $0.36 and $0.50,
respectively, due to a higher tax rate in fiscal 2015. The Company
recognized a net benefit of approximately $168 million in fiscal 2014,
primarily from the resolution of uncertain tax positions relating to
U.S. and non-U.S. jurisdictions.
SELECTED HIGHLIGHTS
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Corporate announcements during the fourth quarter include:
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Jeffrey G. Katz, formerly the founding chairman, president and
chief executive officer of Orbitz Worldwide, Inc., was elected to
the Company's Board of Directors.
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Michael C. Bisignano joined the Company as executive vice
president and general counsel.
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The Company joined the World Economic Forum’s (WEF) Partnering
Against Corruption Initiative (PACI) and appointed members to the
WEF Technology Pioneers Selection Committee 2015.
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Solutions leadership for Fiscal 2015, CA is recognized as a Leader by
industry analyst firms including Gartner and Forrester:
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CA Technologies achieved a Leadership rating in Forrester API
Management Wave.*
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CA Technologies positioned as a Leader in the new Gartner Magic
Quadrant for Data Center Infrastructure Management Tools**
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CA Technologies is positioned as a Leader in Forrester Wave
reports in the Project & Portfolio Management (PPM) space*
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CA Technologies positioned as a Leader in the Gartner Magic
Quadrant for Integrated IT Portfolio Analysis Applications*** and
rated Strong Positive in the Gartner Marketscope for IT Project
and Portfolio Management Software Applications**** for three
consecutive years each.
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Customer traction for CA Technologies innovations during fiscal 2015
included:
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A large health insurance company based in the U.S. selected CA
Security solutions to authenticate application access for
employees, business partners and consumer customers, ensuring that
identities of its constituents are appropriately secured.
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Toyota Finance Australia selected CA Executive Playbook to help
their business have better clarity of their IT expenditure and
align investments with strategic objectives.
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A large financial services company is incorporating the full suite
of CA Virtualization and Automation solutions to improve speed and
quality of application production.
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Together with a partner, CA signed a multi-million dollar contract
with a large government entity to help improve the quality of a
high-profile, consumer-facing healthcare application.
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Tata Sky, India's leading direct broadcast television provider,
selected CA Application Performance Management, CA Unified
Infrastructure Management and CA Workload Automation.
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A French airline is now working with CA Service Virtualization to
increase the speed and stability of application updates for their
new mobile booking system.
SEGMENT INFORMATION
Fourth Quarter
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(dollars in millions)
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Fourth Quarter FY15 vs. FY14
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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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FY15
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FY14
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FY15
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FY14
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Mainframe Solutions
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$572
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$613
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(7)%
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(2)%
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56%
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54%
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Enterprise Solutions
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$368
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$381
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(3)%
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2%
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4%
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-4%
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Services
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$83
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$90
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(8)%
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(3)%
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-4%
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1%
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**CC: Constant Currency
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-
Mainframe Solutions revenue was lower compared with the year-ago
period primarily due to an unfavorable foreign exchange effect and, to
a lesser extent, insufficient revenue from prior period new sales.
-
Enterprise Solutions revenue increased, excluding the unfavorable
foreign exchange effect. Enterprise Solutions operating margin for the
fourth quarter of fiscal 2015 increased compared with the year-ago
period primarily driven by a decrease in selling and marketing
expenses.
-
Services revenue was lower as a result of the smaller size and number
of services engagements during the fourth quarter of fiscal 2015.
Operating margin for the Company’s Services segment decreased as a
result of an increase in severance costs.
Full Year
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(dollars in millions)
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Full Year FY15 vs. FY14
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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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FY15
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FY14
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FY15
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FY14
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Mainframe Solutions
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$2,392
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$2,478
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(3)%
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(2)%
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59%
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60%
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Enterprise Solutions
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$1,519
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$1,555
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(2)%
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(1)%
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11%
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7%
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Services
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$351
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$379
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(7)%
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(6)%
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3%
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6%
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**CC: Constant Currency
|
|
-
Mainframe Solutions revenue decreased primarily due to insufficient
revenue from prior period new sales to offset the decline in revenue
contribution from renewals. In addition, there was an unfavorable
foreign exchange effect of $40 million for fiscal 2015.
-
Enterprise Solutions revenue decreased compared with the year-ago
period primarily due to an unfavorable foreign exchange effect and
lower new sales. Enterprise Solutions operating margin for fiscal 2015
increased compared with the year-ago period primarily as a result of
lower commissions and personnel-related expenses.
-
Services revenue decreased primarily as a result of the smaller size
and number of services engagements during fiscal 2015, including
non-core engagements with government customers that are not directly
related to the Company’s software product sales. Operating margin for
the Company’s Services segment decreased as a result of an increase in
severance costs.
CASH FLOW FROM OPERATIONS
-
Cash flow from continuing operations for the fourth quarter was $485
million, compared with $478 million in the prior year.
-
For the full year, cash flow from continuing operations was $1,030
million, compared with $973 million in the prior fiscal year. This
increase was primarily due to lower cash tax payments.
CAPITAL STRUCTURE
-
Cash, cash equivalents and investments at March 31, 2015 were $2.804
billion.
-
With $1.263 billion in total debt outstanding and $138 million in
notional pooling, the Company’s net cash, cash equivalents and
investments position was $1.403 billion.
-
In the fourth quarter of fiscal 2015, the Company repurchased 2.9
million shares of common stock for $90 million. For fiscal 2015, the
Company repurchased 7.2 million shares of stock for $215 million.
-
As of March 31, 2015, the Company is currently authorized to purchase
$785 million of its common stock under its current stock repurchase
program that was authorized in May 2014.
-
During the fourth quarter of fiscal 2015, the Company distributed $111
million in dividends to shareholders. For fiscal 2015, the Company
distributed $444 million in dividends to shareholders.
-
The Company’s outstanding share count at March 31, 2015 was 436
million.
OUTLOOK FOR FISCAL 2016
The following outlook for fiscal 2016 contains "forward-looking
statements" (as defined below).
The Company expects the following:
-
Total revenue to decrease 2 percent in constant currency. At March 31,
2015 exchange rates, this translates to reported revenue of $3.95
billion to $3.99 billion.
-
GAAP diluted earnings per share from continuing operations to increase
in a range of 12 percent to 17 percent in constant currency. At
March 31, 2015 exchange rates, this translates to reported GAAP
diluted earnings per share from continuing operations of $1.83 to
$1.90.
-
Non-GAAP diluted earnings per share from continuing operations to
increase in a range of 2 percent to 5 percent in constant currency. At
March 31, 2015 exchange rates, this translates to reported non-GAAP
diluted earnings per share from continuing operations of $2.38 to
$2.45.
-
Cash flow from continuing operations to increase in a range of 2
percent to 7 percent in constant currency. At March 31, 2015 exchange
rates, this translates to reported cash flow from continuing
operations of $0.97 billion to $1.01 billion.
This outlook assumes no material acquisitions and a partial currency
hedge of operating income. The Company expects a full-year GAAP
operating margin of 30 percent and non-GAAP operating margin of 39
percent. The Company also expects a full-year GAAP and non-GAAP
effective tax rate of between 28 percent and 29 percent.
The Company anticipates approximately 433 million shares outstanding at
fiscal 2016 year-end and weighted average diluted shares outstanding of
approximately 437 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 fourth quarter and full fiscal year
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.
* The Forrester Wave™: API Management Solutions, Q3 2014, September
29, 2014
|
The Forrester Wave™: Strategic Planning for the BT Agenda, Q1 2015,
March 13, 2015
|
The Forrester Wave™: Portfolio Management For The BT Agenda, Q1
2015, March 18, 2015
|
The Forrester Wave™: Portfolio Management For The Tech Management
Agenda, Q1 2015, March 18, 2015
|
** Gartner, Inc., “Magic Quadrant for Data Center Infrastructure
Management Tools,” Jay E Pultz et al, September 22, 2014
|
***Gartner, Inc., “Magic Quadrant for Integrated IT Portfolio
Analysis Applications,” Daniel B. Stang, Jim Duggan, November 18,
2014
|
****Gartner, Inc. “MarketScope for IT Project and Portfolio
Management Software Applications” Daniel B. Stang, Robert A.
Handler, May 16, 2014
|
|
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.
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
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Twitter
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Social Media Page
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Press Releases
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Blogs
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, fiscal 2007
restructuring costs 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. As a result, product development and enhancement
expenses are expected to increase in future periods as the amount
capitalized for internally developed software costs decreases. Due to
this change, the Company also adds back capitalized internal software
costs and 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, March 31, 2013
and March 31, 2012, 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 are expected to
be made with cash on hand and may be made from time to time, subject to
market conditions and other factors, in the open market, through
solicited or unsolicited privately negotiated transactions or otherwise.
The program 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; 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 © 2015 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
|
|
Fiscal Year Ended
|
|
|
March 31,
|
|
March 31,
|
Revenue:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Subscription and maintenance
|
|
$
|
851
|
|
|
$
|
910
|
|
|
$
|
3,560
|
|
|
$
|
3,683
|
|
Professional services
|
|
|
83
|
|
|
|
90
|
|
|
|
351
|
|
|
|
379
|
|
Software fees and other
|
|
|
89
|
|
|
|
84
|
|
|
|
351
|
|
|
|
350
|
|
Total revenue
|
|
$
|
1,023
|
|
|
$
|
1,084
|
|
|
$
|
4,262
|
|
|
$
|
4,412
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Costs of licensing and maintenance
|
|
$
|
80
|
|
|
$
|
80
|
|
|
$
|
297
|
|
|
$
|
296
|
|
Cost of professional services
|
|
|
85
|
|
|
|
89
|
|
|
|
338
|
|
|
|
353
|
|
Amortization of capitalized software costs
|
|
|
69
|
|
|
|
67
|
|
|
|
273
|
|
|
|
271
|
|
Selling and marketing
|
|
|
278
|
|
|
|
306
|
|
|
|
1,060
|
|
|
|
1,104
|
|
General and administrative
|
|
|
108
|
|
|
|
118
|
|
|
|
377
|
|
|
|
395
|
|
Product development and enhancements
|
|
|
160
|
|
|
|
156
|
|
|
|
603
|
|
|
|
574
|
|
Depreciation and amortization of other intangible assets
|
|
|
30
|
|
|
|
31
|
|
|
|
129
|
|
|
|
144
|
|
Other expenses, net (1)
|
|
|
2
|
|
|
|
52
|
|
|
|
23
|
|
|
|
205
|
|
Total expenses before interest and income taxes
|
|
$
|
812
|
|
|
$
|
899
|
|
|
$
|
3,100
|
|
|
$
|
3,342
|
|
Income from continuing operations before interest and income taxes
|
|
$
|
211
|
|
|
$
|
185
|
|
|
$
|
1,162
|
|
|
$
|
1,070
|
|
Interest expense, net
|
|
|
9
|
|
|
|
15
|
|
|
|
47
|
|
|
|
54
|
|
Income from continuing operations before income taxes
|
|
$
|
202
|
|
|
$
|
170
|
|
|
$
|
1,115
|
|
|
$
|
1,016
|
|
Income tax expense
|
|
|
57
|
|
|
|
69
|
|
|
|
305
|
|
|
|
129
|
|
Income from continuing operations
|
|
$
|
145
|
|
|
$
|
101
|
|
|
$
|
810
|
|
|
$
|
887
|
|
Income from discontinued operations, net of income taxes
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
36
|
|
|
$
|
27
|
|
Net income
|
|
$
|
151
|
|
|
$
|
107
|
|
|
$
|
846
|
|
|
$
|
914
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share:
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.33
|
|
|
$
|
0.23
|
|
|
$
|
1.83
|
|
|
$
|
1.97
|
|
Income from discontinued operations
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.08
|
|
|
|
0.06
|
|
Net income
|
|
$
|
0.34
|
|
|
$
|
0.24
|
|
|
$
|
1.91
|
|
|
$
|
2.03
|
|
Basic weighted average shares used in computation
|
|
|
437
|
|
|
|
442
|
|
|
|
439
|
|
|
|
446
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common share:
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.33
|
|
|
$
|
0.23
|
|
|
$
|
1.82
|
|
|
$
|
1.96
|
|
Income from discontinued operations
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.08
|
|
|
|
0.06
|
|
Net income
|
|
$
|
0.34
|
|
|
$
|
0.24
|
|
|
$
|
1.90
|
|
|
$
|
2.02
|
|
Diluted weighted average shares used in computation
|
|
|
439
|
|
|
|
444
|
|
|
|
441
|
|
|
|
448
|
|
(1)
|
|
Other 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. For the twelve month period ending March
31, 2014, costs associated with the Fiscal 2014 Plan were $168
million.
|
|
|
|
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)
|
|
|
|
March 31,
|
|
March 31,
|
|
|
2015
|
|
2014
|
|
|
(unaudited)
|
|
|
Cash and cash equivalents
|
|
$
|
2,804
|
|
|
$
|
3,252
|
|
Trade accounts receivable, net
|
|
|
652
|
|
|
|
800
|
|
Deferred income taxes
|
|
|
318
|
|
|
|
315
|
|
Other current assets
|
|
|
213
|
|
|
|
192
|
|
Total current assets
|
|
$
|
3,987
|
|
|
$
|
4,559
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
252
|
|
|
$
|
295
|
|
Goodwill
|
|
|
5,806
|
|
|
|
5,922
|
|
Capitalized software and other intangible assets, net
|
|
|
731
|
|
|
|
1,063
|
|
Deferred income taxes
|
|
|
92
|
|
|
|
59
|
|
Other noncurrent assets, net
|
|
|
111
|
|
|
|
118
|
|
Total assets
|
|
$
|
10,979
|
|
|
$
|
12,016
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
10
|
|
|
$
|
514
|
|
Deferred revenue (billed or collected)
|
|
|
2,114
|
|
|
|
2,419
|
|
Deferred income taxes
|
|
|
7
|
|
|
|
9
|
|
Other current liabilities
|
|
|
807
|
|
|
|
980
|
|
Total current liabilities
|
|
$
|
2,938
|
|
|
$
|
3,922
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
$
|
1,253
|
|
|
$
|
1,252
|
|
Deferred income taxes
|
|
|
45
|
|
|
|
67
|
|
Deferred revenue (billed or collected)
|
|
|
863
|
|
|
|
872
|
|
Other noncurrent liabilities
|
|
|
255
|
|
|
|
333
|
|
Total liabilities
|
|
$
|
5,354
|
|
|
$
|
6,446
|
|
|
|
|
|
|
Common stock
|
|
$
|
59
|
|
|
$
|
59
|
|
Additional paid-in capital
|
|
|
3,631
|
|
|
|
3,610
|
|
Retained earnings
|
|
|
6,221
|
|
|
|
5,818
|
|
Accumulated other comprehensive loss
|
|
|
(418
|
)
|
|
|
(171
|
)
|
Treasury stock
|
|
|
(3,868
|
)
|
|
|
(3,746
|
)
|
Total stockholders’ equity
|
|
$
|
5,625
|
|
|
$
|
5,570
|
|
Total liabilities and stockholders’ equity
|
|
$
|
10,979
|
|
|
$
|
12,016
|
|
|
Table 3
|
CA Technologies
|
Condensed Consolidated Statements of Cash Flows
|
(unaudited)
|
(in millions)
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2015
|
|
2014
|
Operating activities from continuing operations:
|
|
|
|
|
Net income
|
|
$
|
151
|
|
|
$
|
107
|
|
Income from discontinued operations
|
|
|
(6
|
)
|
|
|
(6
|
)
|
Income from continuing operations
|
|
$
|
145
|
|
|
$
|
101
|
|
Adjustments to reconcile income from continuing operations to net
cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
99
|
|
|
|
98
|
|
Deferred income taxes
|
|
|
(10
|
)
|
|
|
6
|
|
Provision for bad debts
|
|
|
2
|
|
|
|
2
|
|
Share-based compensation expense
|
|
|
22
|
|
|
|
18
|
|
Asset impairments and other non-cash items
|
|
|
4
|
|
|
|
1
|
|
Foreign currency transaction (gains) losses
|
|
|
(3
|
)
|
|
|
7
|
|
Changes in other operating assets and liabilities, net of effect of
acquisitions:
|
|
|
|
|
Increase in trade accounts receivable
|
|
|
(12
|
)
|
|
|
(91
|
)
|
Increase in deferred revenue
|
|
|
307
|
|
|
|
326
|
|
Decrease in taxes payable, net
|
|
|
(132
|
)
|
|
|
(84
|
)
|
Increase in accounts payable, accrued expenses and other
|
|
|
29
|
|
|
|
62
|
|
Increase in accrued salaries, wages and commissions
|
|
|
22
|
|
|
|
29
|
|
Changes in other operating assets and liabilities
|
|
|
12
|
|
|
|
3
|
|
Net cash provided by operating activities - continuing operations
|
|
$
|
485
|
|
|
$
|
478
|
|
Investing activities from continuing operations:
|
|
|
|
|
Acquisitions of businesses, net of cash acquired, and purchased
software
|
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
Purchases of property and equipment
|
|
|
(7
|
)
|
|
|
(13
|
)
|
Capitalized software development costs
|
|
|
-
|
|
|
|
(1
|
)
|
Maturities of investments
|
|
|
-
|
|
|
|
7
|
|
Decrease in restricted cash
|
|
|
-
|
|
|
|
50
|
|
Net cash (used in) provided by investing activities - continuing
operations
|
|
$
|
(13
|
)
|
|
$
|
37
|
|
Financing activities from continuing operations:
|
|
|
|
|
Dividends paid
|
|
$
|
(111
|
)
|
|
$
|
(112
|
)
|
Purchases of common stock
|
|
|
(90
|
)
|
|
|
(167
|
)
|
Notional pooling borrowings (repayments), net
|
|
|
83
|
|
|
|
(6
|
)
|
Debt repayments
|
|
|
(1
|
)
|
|
|
(3
|
)
|
Exercise of common stock options and other
|
|
|
1
|
|
|
|
19
|
|
Net cash used in financing activities - continuing operations
|
|
$
|
(118
|
)
|
|
$
|
(269
|
)
|
Effect of exchange rate changes on cash
|
|
$
|
(222
|
)
|
|
$
|
24
|
|
Net change in cash and cash equivalents - continuing operations
|
|
$
|
132
|
|
|
$
|
270
|
|
Cash (used in) provided by operating activities - discontinued
operations
|
|
$
|
(11
|
)
|
|
$
|
8
|
|
Net effect of discontinued operations on cash and cash equivalents
|
|
$
|
(11
|
)
|
|
$
|
8
|
|
Increase in cash and cash equivalents
|
|
$
|
121
|
|
|
$
|
278
|
|
Cash and cash equivalents at beginning of period
|
|
$
|
2,683
|
|
|
$
|
2,974
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,804
|
|
|
$
|
3,252
|
|
|
Results reflect the discontinued operations associated with the CA
ERwin Data Modeling and CA arcserve data protection businesses.
|
|
Table 4
|
CA Technologies
|
Operating Segments
|
(unaudited)
|
(dollars in millions)
|
|
|
|
Three Months Ended March 31, 2015
|
|
Fiscal Year Ended March 31, 2015
|
|
|
Mainframe
|
|
Enterprise
|
|
|
|
|
|
Mainframe
|
|
Enterprise
|
|
|
|
|
|
|
Solutions (1)
|
|
Solutions (1)
|
|
Services (1)
|
|
Total
|
|
Solutions (1)
|
|
Solutions (1)
|
|
Services (1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (2)
|
|
$
|
572
|
|
|
$
|
368
|
|
|
$
|
83
|
|
|
$
|
1,023
|
|
|
$
|
2,392
|
|
|
$
|
1,519
|
|
|
$
|
351
|
|
|
$
|
4,262
|
|
Expenses (3)
|
|
|
253
|
|
|
|
354
|
|
|
|
86
|
|
|
|
693
|
|
|
|
970
|
|
|
|
1,353
|
|
|
|
342
|
|
|
|
2,665
|
|
Segment profit
|
|
$
|
319
|
|
|
$
|
14
|
|
|
$
|
(3
|
)
|
|
$
|
330
|
|
|
$
|
1,422
|
|
|
$
|
166
|
|
|
$
|
9
|
|
|
$
|
1,597
|
|
Segment operating margin
|
|
|
56
|
%
|
|
|
4
|
%
|
|
|
-4
|
%
|
|
|
32
|
%
|
|
|
59
|
%
|
|
|
11
|
%
|
|
|
3
|
%
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
$
|
330
|
|
|
|
|
|
|
|
|
$
|
1,597
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
124
|
|
Other intangibles amortization
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
58
|
|
Software development costs capitalized
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
-
|
|
Internally developed software products amortization
|
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
149
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
87
|
|
Other expenses, net (4)
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
17
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
47
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
$
|
202
|
|
|
|
|
|
|
|
|
$
|
1,115
|
|
|
|
|
|
Three Months Ended March 31, 2014
|
|
Fiscal Year Ended March 31, 2014
|
|
|
Mainframe
|
|
Enterprise
|
|
|
|
|
|
Mainframe
|
|
Enterprise
|
|
|
|
|
|
|
Solutions (1)
|
|
Solutions (1)
|
|
Services (1)
|
|
Total
|
|
Solutions (1)
|
|
Solutions (1)
|
|
Services (1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (2)
|
|
$
|
613
|
|
|
$
|
381
|
|
|
$
|
90
|
|
|
$
|
1,084
|
|
|
$
|
2,478
|
|
|
$
|
1,555
|
|
|
$
|
379
|
|
|
$
|
4,412
|
|
Expenses (3)
|
|
|
280
|
|
|
|
395
|
|
|
|
89
|
|
|
|
764
|
|
|
|
996
|
|
|
|
1,440
|
|
|
|
357
|
|
|
|
2,793
|
|
Segment profit
|
|
$
|
333
|
|
|
$
|
(14
|
)
|
|
$
|
1
|
|
|
$
|
320
|
|
|
$
|
1,482
|
|
|
$
|
115
|
|
|
$
|
22
|
|
|
$
|
1,619
|
|
Segment operating margin
|
|
|
54
|
%
|
|
|
-4
|
%
|
|
|
1
|
%
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
7
|
%
|
|
|
6
|
%
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
$
|
320
|
|
|
|
|
|
|
|
|
$
|
1,619
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
|
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
116
|
|
Other intangibles amortization
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
60
|
|
Software development costs capitalized
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
(33
|
)
|
Internally developed software products amortization
|
|
|
|
|
|
|
|
|
38
|
|
|
|
|
|
|
|
|
|
155
|
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
81
|
|
Other expenses, net (4)
|
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
170
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
54
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
$
|
170
|
|
|
|
|
|
|
|
|
$
|
1,016
|
|
(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 expenses, net includes charges relating to 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 March 31,
|
|
Fiscal Year Ended March 31,
|
|
|
|
|
|
|
|
|
% Increase
|
|
|
|
|
|
|
|
% Increase
|
|
|
|
|
|
|
% Increase
|
|
(Decrease)
|
|
|
|
|
|
% Increase
|
|
(Decrease)
|
|
|
|
|
|
|
(Decrease)
|
|
in Constant
|
|
|
|
|
|
(Decrease)
|
|
in Constant
|
|
|
2015
|
|
2014
|
|
in $ US
|
|
Currency (1)
|
|
2015
|
|
2014
|
|
in $ US
|
|
Currency (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
|
$
|
1,069
|
|
|
$
|
1,216
|
|
|
(12
|
)%
|
|
(5
|
)%
|
|
$
|
3,609
|
|
|
$
|
4,421
|
|
|
(18
|
)%
|
|
(15
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
$
|
682
|
|
|
$
|
692
|
|
|
(1
|
)%
|
|
(1
|
)%
|
|
$
|
2,766
|
|
|
$
|
2,820
|
|
|
(2
|
)%
|
|
(2
|
)%
|
International
|
|
|
341
|
|
|
|
392
|
|
|
(13
|
)%
|
|
(1
|
)%
|
|
|
1,496
|
|
|
|
1,592
|
|
|
(6
|
)%
|
|
(2
|
)%
|
Total revenue
|
|
$
|
1,023
|
|
|
$
|
1,084
|
|
|
(6
|
)%
|
|
(1
|
)%
|
|
$
|
4,262
|
|
|
$
|
4,412
|
|
|
(3
|
)%
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and maintenance
|
|
$
|
851
|
|
|
$
|
910
|
|
|
(6
|
)%
|
|
(2
|
)%
|
|
$
|
3,560
|
|
|
$
|
3,683
|
|
|
(3
|
)%
|
|
(2
|
)%
|
Professional services
|
|
|
83
|
|
|
|
90
|
|
|
(8
|
)%
|
|
(3
|
)%
|
|
|
351
|
|
|
|
379
|
|
|
(7
|
)%
|
|
(6
|
)%
|
Software fees and other
|
|
|
89
|
|
|
|
84
|
|
|
6
|
%
|
|
11
|
%
|
|
|
351
|
|
|
|
350
|
|
|
0
|
%
|
|
2
|
%
|
Total revenue
|
|
$
|
1,023
|
|
|
$
|
1,084
|
|
|
(6
|
)%
|
|
(1
|
)%
|
|
$
|
4,262
|
|
|
$
|
4,412
|
|
|
(3
|
)%
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mainframe solutions
|
|
$
|
572
|
|
|
$
|
613
|
|
|
(7
|
)%
|
|
(2
|
)%
|
|
$
|
2,392
|
|
|
$
|
2,478
|
|
|
(3
|
)%
|
|
(2
|
)%
|
Enterprise solutions
|
|
|
368
|
|
|
|
381
|
|
|
(3
|
)%
|
|
2
|
%
|
|
|
1,519
|
|
|
|
1,555
|
|
|
(2
|
)%
|
|
(1
|
)%
|
Services
|
|
|
83
|
|
|
|
90
|
|
|
(8
|
)%
|
|
(3
|
)%
|
|
|
351
|
|
|
|
379
|
|
|
(7
|
)%
|
|
(6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses before interest and income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP (2)
|
|
$
|
693
|
|
|
$
|
764
|
|
|
(9
|
)%
|
|
(2
|
)%
|
|
$
|
2,665
|
|
|
$
|
2,793
|
|
|
(5
|
)%
|
|
(2
|
)%
|
Total GAAP
|
|
|
812
|
|
|
|
899
|
|
|
(10
|
)%
|
|
(5
|
)%
|
|
|
3,100
|
|
|
|
3,342
|
|
|
(7
|
)%
|
|
(5
|
)%
|
(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, 2014, 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
|
|
Fiscal Year Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
GAAP net income
|
|
$
|
151
|
|
|
$
|
107
|
|
|
$
|
846
|
|
|
$
|
914
|
|
GAAP income from discontinued operations, net of income taxes
|
|
|
(6
|
)
|
|
|
(6
|
)
|
|
|
(36
|
)
|
|
|
(27
|
)
|
GAAP income from continuing operations
|
|
$
|
145
|
|
|
$
|
101
|
|
|
$
|
810
|
|
|
$
|
887
|
|
GAAP income tax expense (benefit)
|
|
|
57
|
|
|
|
69
|
|
|
|
305
|
|
|
|
129
|
|
Interest expense, net
|
|
|
9
|
|
|
|
15
|
|
|
|
47
|
|
|
|
54
|
|
GAAP income from continuing operations before interest and income
taxes
|
|
$
|
211
|
|
|
$
|
185
|
|
|
$
|
1,162
|
|
|
$
|
1,070
|
|
GAAP operating margin (% of revenue) (1)
|
|
|
21
|
%
|
|
|
17
|
%
|
|
|
27
|
%
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments to expenses:
|
|
|
|
|
|
|
|
|
Costs of licensing and maintenance (2)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
4
|
|
Cost of professional services (2)
|
|
|
1
|
|
|
|
1
|
|
|
|
4
|
|
|
|
4
|
|
Amortization of capitalized software costs (3)
|
|
|
69
|
|
|
|
67
|
|
|
|
273
|
|
|
|
271
|
|
Selling and marketing (2)
|
|
|
7
|
|
|
|
6
|
|
|
|
30
|
|
|
|
28
|
|
General and administrative (2)
|
|
|
8
|
|
|
|
6
|
|
|
|
29
|
|
|
|
26
|
|
Product development and enhancements (4)
|
|
|
5
|
|
|
|
3
|
|
|
|
19
|
|
|
|
(14
|
)
|
Depreciation and amortization of other intangible assets (5)
|
|
|
13
|
|
|
|
12
|
|
|
|
58
|
|
|
|
60
|
|
Other expenses, net (6)
|
|
|
15
|
|
|
|
39
|
|
|
|
17
|
|
|
|
170
|
|
Total Non-GAAP adjustment to operating expenses
|
|
$
|
119
|
|
|
$
|
135
|
|
|
$
|
435
|
|
|
$
|
549
|
|
Non-GAAP income from continuing operations before interest and
income taxes
|
|
$
|
330
|
|
|
$
|
320
|
|
|
$
|
1,597
|
|
|
$
|
1,619
|
|
Non-GAAP operating margin (% of revenue) (7)
|
|
|
32
|
%
|
|
|
30
|
%
|
|
|
37
|
%
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
9
|
|
|
|
15
|
|
|
|
47
|
|
|
|
54
|
|
GAAP income tax expense (benefit)
|
|
|
57
|
|
|
|
69
|
|
|
|
305
|
|
|
|
129
|
|
Non-GAAP adjustment to income tax expense (benefit) (8)
|
|
|
17
|
|
|
|
(44
|
)
|
|
|
120
|
|
|
|
70
|
|
Non-GAAP income tax expense
|
|
$
|
74
|
|
|
$
|
25
|
|
|
$
|
425
|
|
|
$
|
199
|
|
Non-GAAP income from continuing operations
|
|
$
|
247
|
|
|
$
|
280
|
|
|
$
|
1,125
|
|
|
$
|
1,366
|
|
(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 March 31, 2015 and 2014, non-GAAP
adjustment consists of $37 million and $29 million of purchased
software amortization and $32 million and $38 million of internally
developed software products amortization, respectively. For the
twelve month periods ending March 31, 2015 and 2014, non-GAAP
adjustment consists of $124 million and $116 million of purchased
software amortization and $149 million and $155 million of
internally developed software products amortization, respectively.
|
|
|
|
(4)
|
|
For the three and twelve month periods ending March 31, 2015,
non-GAAP adjustment consists of $5 million and $19 million of
share-based compensation, respectively. For the three and twelve
month periods ending March 31, 2014, non-GAAP adjustment consists of
$4 million and $19 million of share-based compensation and ($1)
million and ($33) million of software development costs capitalized,
respectively.
|
|
|
|
(5)
|
|
Non-GAAP adjustment consists of other intangibles amortization.
|
|
|
|
(6)
|
|
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.
|
|
|
|
(7)
|
|
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).
|
|
|
|
(8)
|
|
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
|
|
Fiscal Year Ended
|
|
|
March 31,
|
|
March 31,
|
Operating Expenses
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Total expenses before interest and income taxes
|
|
$
|
812
|
|
|
$
|
899
|
|
|
$
|
3,100
|
|
|
$
|
3,342
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating adjustments:
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
37
|
|
|
|
29
|
|
|
|
124
|
|
|
|
116
|
|
Other intangibles amortization
|
|
|
13
|
|
|
|
12
|
|
|
|
58
|
|
|
|
60
|
|
Software development costs capitalized
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(33
|
)
|
Internally developed software products amortization
|
|
|
32
|
|
|
|
38
|
|
|
|
149
|
|
|
|
155
|
|
Share-based compensation
|
|
|
22
|
|
|
|
18
|
|
|
|
87
|
|
|
|
81
|
|
Other expenses, net (1)
|
|
|
15
|
|
|
|
39
|
|
|
|
17
|
|
|
|
170
|
|
Total non-GAAP operating adjustment
|
|
$
|
119
|
|
|
$
|
135
|
|
|
$
|
435
|
|
|
$
|
549
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP operating expenses
|
|
$
|
693
|
|
|
$
|
764
|
|
|
$
|
2,665
|
|
|
$
|
2,793
|
|
|
|
|
|
Three Months Ended
|
|
Fiscal Year Ended
|
|
|
March 31,
|
|
March 31,
|
Diluted EPS from Continuing Operations
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
GAAP diluted EPS from continuing operations
|
|
$
|
0.33
|
|
|
$
|
0.23
|
|
|
$
|
1.82
|
|
|
$
|
1.96
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments, net of taxes:
|
|
|
|
|
|
|
|
|
Purchased software amortization
|
|
|
0.06
|
|
|
|
0.04
|
|
|
|
0.20
|
|
|
|
0.22
|
|
Other intangibles amortization
|
|
|
0.02
|
|
|
|
0.01
|
|
|
|
0.10
|
|
|
|
0.11
|
|
Software development costs capitalized
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.06
|
)
|
Internally developed software products amortization
|
|
|
0.05
|
|
|
|
0.05
|
|
|
|
0.24
|
|
|
|
0.30
|
|
Share-based compensation
|
|
|
0.04
|
|
|
|
0.02
|
|
|
|
0.14
|
|
|
|
0.16
|
|
Other expenses, net (1)
|
|
|
0.02
|
|
|
|
0.05
|
|
|
|
0.03
|
|
|
|
0.33
|
|
Non-GAAP effective tax rate adjustments (2)
|
|
|
0.04
|
|
|
|
0.22
|
|
|
|
-
|
|
|
|
-
|
|
Total non-GAAP adjustment
|
|
$
|
0.23
|
|
|
$
|
0.39
|
|
|
$
|
0.71
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS from continuing operations
|
|
$
|
0.56
|
|
|
$
|
0.62
|
|
|
$
|
2.53
|
|
|
$
|
3.02
|
|
(1)
|
|
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.
|
|
|
|
(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
|
|
Fiscal Year Ended
|
|
|
March 31, 2015
|
|
March 31, 2015
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before interest and income taxes (1)
|
|
$
|
211
|
|
|
$
|
330
|
|
|
$
|
1,162
|
|
|
$
|
1,597
|
|
Interest expense, net
|
|
|
9
|
|
|
|
9
|
|
|
|
47
|
|
|
|
47
|
|
Income from continuing operations before income taxes
|
|
$
|
202
|
|
|
$
|
321
|
|
|
$
|
1,115
|
|
|
$
|
1,550
|
|
|
|
|
|
|
|
|
|
|
Statutory tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
Tax at statutory rate
|
|
$
|
71
|
|
|
$
|
112
|
|
|
$
|
390
|
|
|
$
|
543
|
|
Adjustments for discrete and permanent items (2)
|
|
|
(14
|
)
|
|
|
(38
|
)
|
|
|
(85
|
)
|
|
|
(118
|
)
|
Total tax expense
|
|
$
|
57
|
|
|
$
|
74
|
|
|
$
|
305
|
|
|
$
|
425
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (3)
|
|
|
28.2
|
%
|
|
|
23.1
|
%
|
|
|
27.4
|
%
|
|
|
27.4
|
%
|
|
|
|
|
Three Months Ended
|
|
Fiscal Year Ended
|
|
|
March 31, 2014
|
|
March 31, 2014
|
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before interest and income taxes (1)
|
|
$
|
185
|
|
|
$
|
320
|
|
|
$
|
1,070
|
|
|
$
|
1,619
|
|
Interest expense, net
|
|
|
15
|
|
|
|
15
|
|
|
|
54
|
|
|
|
54
|
|
Income from continuing operations before income taxes
|
|
$
|
170
|
|
|
$
|
305
|
|
|
$
|
1,016
|
|
|
$
|
1,565
|
|
|
|
|
|
|
|
|
|
|
Statutory tax rate
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
Tax at statutory rate
|
|
$
|
60
|
|
|
$
|
107
|
|
|
$
|
356
|
|
|
$
|
548
|
|
Adjustments for discrete and permanent items (2)
|
|
|
9
|
|
|
|
(82
|
)
|
|
|
(227
|
)
|
|
|
(349
|
)
|
Total tax (benefit) expense
|
|
$
|
69
|
|
|
$
|
25
|
|
|
$
|
129
|
|
|
$
|
199
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate (3)
|
|
|
40.6
|
%
|
|
|
8.2
|
%
|
|
|
12.7
|
%
|
|
|
12.7
|
%
|
|
(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
|
|
$
|
1.83
|
|
|
to
|
$
|
1.90
|
|
|
|
|
|
|
|
Non-GAAP adjustments, net of taxes:
|
|
|
|
|
|
Purchased software amortization
|
|
|
0.17
|
|
|
|
|
0.17
|
|
Other intangibles amortization
|
|
|
0.06
|
|
|
|
|
0.06
|
|
Internally developed software products amortization
|
|
|
0.18
|
|
|
|
|
0.18
|
|
Share-based compensation
|
|
|
0.14
|
|
|
|
|
0.14
|
|
Total non-GAAP adjustment
|
|
$
|
0.55
|
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
Projected non-GAAP diluted EPS from continuing operations range
|
|
$
|
2.38
|
|
|
to
|
$
|
2.45
|
|
|
|
|
|
Fiscal Year Ending
|
Projected Operating Margin
|
|
March 31, 2016
|
|
|
|
|
|
|
Projected GAAP operating margin
|
|
|
|
30
|
%
|
|
|
|
|
|
|
|
Non-GAAP operating adjustments:
|
|
|
|
|
|
Purchased software amortization
|
|
|
|
3
|
%
|
|
Other intangibles amortization
|
|
|
|
1
|
%
|
|
Internally developed software products amortization
|
|
|
|
3
|
%
|
|
Share-based compensation
|
|
|
2
|
%
|
|
Total non-GAAP operating adjustment
|
|
|
9
|
%
|
|
|
|
|
|
|
|
Projected non-GAAP operating margin
|
|
|
39
|
%
|
|
Refer to the discussion of non-GAAP financial measures included in the
accompanying press release for additional information.
CONTACT:
CA Technologies
Jennifer Hallahan, 212-415-6924
Public
Relations
jennifer.hallahan@ca.com
or
Jonathan Doros,
212-415-6870
Investor Relations
jonathan.doros@ca.com
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