CA Technologies
Jul 21, 2010

CA Technologies Reports First Quarter 2011 Results

ISLANDIA, N.Y., July 21, 2010 /PRNewswire via COMTEX News Network/ -- CA Technologies (Nasdaq: CA) today reported financial results for its first quarter ended June 30, 2010.

FINANCIAL OVERVIEW



                                   First Quarter FY11 vs. FY10
                                   ---------------------------
    (in millions,                                            % Change
     except share data) FY11      FY10        % Change       CC**
    ------------------- ----      ----        --------      ---------
    Revenue                $1,091     $1,044             5%            3%
    -------------------    ------     ------           ---           ---
    GAAP Income from
     Continuing
     Operations              $223       $195            14%            5%
    ----------------         ----       ----           ---           ---
    Non-GAAP Income
     from Continuing
     Operations*             $235       $245           (4%)          (5)%
    ----------------         ----       ----          ----           ---
    GAAP Diluted EPS
     from Continuing
     Operations             $0.43      $0.37            16%            7%
    ----------------        -----      -----           ---           ---
    Non-GAAP  Diluted
     EPS from
     Continuing
     Operations*            $0.45      $0.45             0%          (1%)
    -----------------       -----      -----           ---          ----
    Cash Flow from
     Operations              $117       $262          (55%)         (55%)
    --------------           ----       ----         -----         -----


    *Non-GAAP income from continuing operations and earnings per share
    from continuing operations are non-GAAP financial measures, as
    noted in the discussion of non-GAAP results below. A reconciliation
    of non-GAAP financial measures to their comparable GAAP financial
    measures is included in the tables following this news release.
    **CC: Constant Currency


EXECUTIVE COMMENTARY

"In fiscal 2011, our focus is on execution as we grow our core mainframe business and continue to build out our product platforms in virtualization management, service assurance, and identity and access management, which serve as on-ramps to emerging technologies in the cloud and software as a service," said Chief Executive Officer Bill McCracken. "First quarter revenue and earnings met our expectations and we will continue to make changes to the Company's operations to improve execution and accelerate the sale of new products. We believe these actions will help us realize our long-term strategic and financial goals and further unlock shareholder value.

"Customer requirements drive our business model. During the first quarter we introduced more than 20 new products and invested in our CA World user conference, demonstrating the power of our product portfolio to more than 5,000 customers and prospects," continued McCracken. "In addition, to better align the Company with our target markets, we divested certain non-strategic products and created two new organizations - the Customer Solutions Group and the Technology and Development Group. Working with our existing sales organization, the new organizations will drive collaboration and accountability across the Company, while enabling CA Technologies to deliver even greater customer service and product innovation."

FIRST QUARTER REVENUE AND BOOKINGS

Total revenue growth in the first quarter can be attributed primarily to increased execution of services engagements and revenue associated with the sale of software products obtained through the acquisition of NetQoS, Nimsoft and 3Tera. Bookings were down primarily due to a renewal portfolio that was only about one half of the portfolio available in the year ago period. Weighted average contract duration was down due to lower scheduled contract renewals in the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010 and a higher percentage of new product transactions that generally are for a shorter duration than renewals of existing contracts. However, the decrease in duration contributed to current revenue backlog growth compared with the prior year period, which is an important indicator of future revenue levels.

FIRST QUARTER EXPENSES AND MARGIN

Year-over-year GAAP results:

Expenses, operating income from continuing operations, and operating margin for the first quarter were all unfavorably affected by increased costs associated with CA World--the Company's user conference--and additional costs associated with recently acquired businesses.

Year-over-year non-GAAP results:

Non-GAAP results also were affected by the increased expenses described above.

In the first quarter, the Company reported a GAAP tax rate of 28 percent and a non-GAAP tax rate of 34 percent.

CASH FLOW FROM OPERATIONS

Cash flow from operations was $117 million compared to $262 million in the prior year. The first quarter of fiscal year 2010 included an upfront cash payment of more than $100 million associated with a large contract renewal. In addition, first quarter 2011 cash flow was affected by the increase in expenses.

CAPITAL STRUCTURE

BUSINESS HIGHLIGHTS

During the first quarter the Company announced:

OUTLOOK FOR FISCAL YEAR 2011

Beginning in the first quarter of fiscal year 2011, the Company is excluding share-based compensation expense from its non-GAAP financial measures. The following guidance, which represents "forward-looking statements" (as defined below), takes into account the exclusion of share-based compensation expense from future non-GAAP results. To enable fiscal year 2011 guidance for non-GAAP earnings per share from continuing operations to be compared to fiscal year 2010 full year results, the Company provides full fiscal year 2010 results for non-GAAP earnings per share from continuing operations excluding share-based compensation expense below.

The Company reaffirmed its outlook issued on May 13, 2010 for revenue and cash flow and increased guidance for GAAP and non-GAAP earnings per share from continuing operations. The Company also updated projected as reported numbers based on June 30, 2010 exchange rates:

This outlook also assumes no material acquisitions and a partial currency hedge of operating income. The Company also expects a full-year GAAP and non-GAAP tax rate in a range of 33 percent to 34 percent.

The Company anticipates approximately 510 million shares outstanding at fiscal year 2011 year-end, and a weighted average diluted shares outstanding of approximately 511 million for the fiscal year. Guidance does not include the impact from any future stock repurchases.

Webcast

This news release and the accompanying tables should be read in conjunction with additional content that is available on the Company's website, including a supplemental financial package, as well as a webcast that the Company will host at 5 p.m. ET today to discuss its unaudited first quarter results. The webcast will be archived on the website. Individuals can access the webcast, as well as this press release and supplemental financial information, at http://ca.com/invest or listen to the call at 1-877- 545-1407. The international participant number is 1-719-325-4895.

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About CA Technologies

CA Technologies (NASDAQ: CA) is an IT management software and solutions company with expertise across all IT environments - from mainframe and distributed, to virtual and cloud. CA Technologies manages and secures IT environments and enables customers to deliver more flexible IT services. CA Technologies innovative products and services provide the insight and control essential for IT organizations to power business agility. The majority of the Global Fortune 500 relies on CA Technologies to manage evolving IT ecosystems. For additional information, visit CA Technologies at www.ca.com.

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Non-GAAP Financial Measures

This news release, the accompanying tables and the additional content that is available on the Company's website, including a supplemental financial package, includes certain financial measures that exclude the impact of certain items and therefore have not been calculated in accordance with U.S. generally accepted accounting principles (GAAP). Non-GAAP metrics for operating expenses, operating income from continuing operations, operating margin, income from continuing operations and diluted earnings per share from continuing operations exclude the following items: non-cash amortization of purchased software and other intangibles, share-based compensation, pre-fiscal year 2010 restructuring and other charges and include the gains and losses since inception of hedges that mature within the quarter, but exclude gains and losses of hedges that do not mature within the quarter. Non-GAAP income from continuing operations also excludes the interest on convertible bonds. The effective tax rate on GAAP and non-GAAP income from continuing operations is the Company's provision for income taxes expressed as a percentage of pre-tax GAAP and non-GAAP income from continuing operations, respectively. Such tax rates are determined based on an estimated effective full year tax rate, with the effective tax rate for GAAP generally including the impact of discrete items in the period such items arise and the effective tax rate for non-GAAP income from continuing operations generally allocating the impact of discrete items pro rata to the fiscal year's remaining reporting periods. Non-GAAP adjusted cash flow excludes restructuring and other payments. Free cash flow excludes capital expenditures. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than US dollars are converted into US dollars at the exchange rate in effect on March 31, 2010, which was the last day of our prior fiscal year. Constant currency excludes the impacts from the Company's hedging program. The constant currency calculation for annualized subscription and maintenance bookings is calculated by dividing the subscription and maintenance bookings in constant currency by the weighted average subscription and maintenance duration in years. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. By excluding these items, non-GAAP financial measures facilitate management's internal comparisons to the Company's historical operating results and cash flows, to competitors' operating results and cash flows, and to estimates made by securities analysts. Management uses these non-GAAP financial measures internally to evaluate its performance and they are key variables in determining management incentive compensation. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency of supplemental information used by management in its financial and operational decision-making. In addition, the Company has historically reported similar non-GAAP financial measures to its investors and believes that the inclusion of comparative numbers provides consistency in its financial reporting. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this news release to their most directly comparable GAAP financial measures, which are attached to this news release.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this communication (such as statements containing the words "believes," "plans," "anticipates," "expects," "estimates" and similar expressions) constitute "forward-looking statements" that are based upon the beliefs of, and assumptions made by, the Company's management, as well as information currently available to management. These forward-looking statements reflect the Company's current views with respect to future events and are subject to certain risks, uncertainties, and assumptions. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the ability to achieve success in the Company's strategy by, among other things, increasing sales in new and emerging enterprises and markets, enabling the sales force to sell new products and Software-as-a-Service offerings and improving the Company's brand in the marketplace; global economic factors or political events beyond the Company's control; general economic conditions, including concerns regarding a global recession and credit constraints, or unfavorable economic conditions in a particular region, industry or business sector; failure to expand channel partner programs; the ability to adequately manage and evolve financial reporting and managerial systems and processes; the ability to successfully acquire technology and software that are consistent with our strategy and integrate acquired companies and products into existing businesses; competition in product and service offerings and pricing; the ability to retain and attract qualified key personnel; the ability to adapt to rapid technological and market changes; the ability of the Company's products to remain compatible with ever-changing operating environments; access to software licensed from third parties, third-party code and specifications for the development of code; use of software from open source code sources; discovery of errors in the Company's software and potential product liability claims; significant amounts of debt and possible future credit rating changes; the failure to protect the Company's intellectual property rights and source code; fluctuations in the number, terms and duration of our license agreements as well as the timing of orders from customers and channel partners; reliance upon large transactions with customers; risks associated with sales to government customers; breaches of the Company's software products and the Company's and customers' data centers and IT environments; access to third-party microcode; third-party claims of intellectual property infringement or royalty payments; fluctuations in foreign currencies; failure to successfully execute restructuring plans; successful outsourcing of various functions to third parties; potential tax liabilities; and these factors and the other factors described more fully in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Copyright © 2010 CA, Inc. All Rights Reserved. One CA Plaza, Islandia, N.Y. 11749. All other trademarks, trade names, service marks, and logos referenced herein belong to their respective companies.


    Contacts:   Dan Kaferle                Kelsey Doherty
                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
                                                           June 30,
                                                           --------

      Revenue                                         2010                2009
                                                      ----                ----
      Subscription and maintenance revenue            $961                $941
      Professional services                             78                  70
      Software fees and other                           52                  33
      Total revenue                                  1,091               1,044
                                                     -----               -----
      Expenses
      Costs of licensing and maintenance                77                  66
      Cost of professional services                     71                  66
      Amortization of capitalized software
       costs                                            45                  33
      Selling and marketing                            299                 280
      General and administrative                       117                 110
      Product development and enhancements             128                 117
      Depreciation and amortization of other
       intangible assets                                44                  38
      Other (gains) expenses, net                      (11)                  7
      Restructuring and other                           (3)                  2
      Total expenses before interest and
       income taxes                                    767                 719
                                                       ---                 ---
      Income from continuing operations
       before interest and income taxes                324                 325
      Interest expense, net                             13                  17
                                                       ---                 ---
      Income from continuing operations
       before income taxes                             311                 308
      Income tax expense                                88                 113
      INCOME FROM CONTINUING OPERATIONS                223                 195
      Loss from discontinued operations, net
       of income taxes                                   6                   -
                                                       ---                 ---
      NET INCOME                                      $217                $195
                                                      ====                ====

      Basic income (loss) per share
      Income from continuing operations              $0.43               $0.37
      Loss from discontinued operations              (0.01)                  -
      Net Income                                     $0.42               $0.37
                                                     =====               =====
      Basic weighted average shares used in
       computation                                     510                 516

      Diluted income (loss) per share
      Income from continuing operations              $0.43               $0.37
      Loss from discontinued operations              (0.01)                  -
                                                     -----                 ---
      Net Income                                     $0.42               $0.37
                                                     =====               =====
      Diluted weighted average shares used
       in computation                                  511                 540



      Certain balances have been revised to reflect the discontinued
      operations associated with the sale of the Information Governance
      business.

      Table 2
       CA Technologies
      Condensed Consolidated Balance Sheets
      (in millions)
      (unaudited)






                                           June         March
                                            30,          31,
                                            2010          2010
                                            ----          ----

      Cash and cash equivalents           $2,476        $2,583
      Trade and installment accounts
       receivable, net                       638           931
      Deferred income taxes - current        260           360
      Other current assets                   219           116
                                             ---           ---

      Total current assets                 3,593         3,990
      Installment accounts receivable,
       due after one year, net                 -            46
      Property and equipment, net            438           452
      Goodwill                             5,567         5,667
      Capitalized software and other
       intangible assets, net              1,190         1,150
      Deferred income taxes -noncurrent      313           355
      Other noncurrent assets, net           190           178
                                             ---           ---

      Total assets                       $11,291       $11,838
                                         =======       =======

      Current portion of long-term debt
       and loans payable                     $15           $15
      Deferred revenue (billed or
       collected) -current                 2,276         2,555
      Deferred income taxes - current         47            51
      Other current liabilities              700           967
                                             ---           ---

      Total current liabilities            3,038         3,588

      Long-term debt, net of current
       portion                             1,543         1,530
      Deferred income taxes -noncurrent      133           134
      Deferred revenue (billed or
       collected) -noncurrent                962         1,068
      Other noncurrent liabilities           513           535
                                             ---           ---

      Total liabilities                    6,189         6,855
                                           -----         -----

      Common stock                            59            59
      Additional paid-in capital           3,577         3,657
      Retained earnings                    3,557         3,361
      Accumulated other comprehensive
       loss                                 (163)         (130)
      Treasury stock                     (1,928)        (1,964)
                                          ------        ------

      Total stockholders' equity           5,102         4,983
                                           -----         -----

      Total liabilities and
       stockholders' equity              $11,291       $11,838
                                         =======       =======


                                 Table 3
                             CA Technologies
             Condensed Consolidated Statements of Cash Flows
                              (in millions)
                               (unaudited)

                                                        Three Months Ended
                                                             June 30,
                                                             --------
                                                         2010         2009
                                                         ----         ----
     OPERATING ACTIVITIES:
             Net income                                  $217         $195
             Adjustments to reconcile net income to
              net cash
              provided by operating activities:
            Depreciation and amortization                  89           73
            Provision for deferred income taxes           116            6
            Provision for bad debt                          3            -
            Share based compensation expense               19           27
            Amortization of discount on convertible
             debt                                           -            8
            Asset impairments and other non-cash
             charges                                        5            1
            Foreign currency transaction gains             (2)           -
             Changes in other operating assets and
              liabilities, net
              of effect of acquisitions:
            Decrease in trade and installment
             accounts receivable, net                     326          239
            Decrease in deferred revenue                 (310)         (94)
            Decrease in taxes payable, net               (191)         (75)
            Decrease in accounts payable, accrued
             expenses and other                            (4)         (14)
            Decrease in accrued salaries, wages and
             commissions                                 (105)         (63)
            Decrease in restructuring liabilities         (34)         (19)
            Changes in other operating assets and
             liabilities                                  (12)         (22)
     NET CASH PROVIDED BY OPERATING
      ACTIVITIES                                          117          262
                                                          ---          ---
     INVESTING ACTIVITIES:
              Acquisitions, primarily businesses, net
               of cash acquired,
              and purchased software                       (9)          (3)
              Purchases of property and equipment         (25)         (25)
              Cash proceeds from divestiture of assets     16            -
              Capitalized software development costs      (42)         (37)
              Other investing activities                  (16)          (2)
     NET CASH USED IN INVESTING ACTIVITIES                (76)         (67)
                                                          ---          ---
     FINANCING ACTIVITIES:
              Dividends paid                              (21)         (21)
              Purchases of common stock                   (55)           -
              Debt repayments                              (3)          (1)
              Exercise of common stock options and
               other                                        4            -
     NET CASH USED IN FINANCING ACTIVITIES                (75)         (22)
                                                          ---          ---
     (DECREASE) INCREASE IN CASH AND CASH
      EQUIVALENTS BEFORE
         EFFECT OF EXCHANGE RATE CHANGES ON CASH          (34)         173
     Effect of exchange rate changes on cash              (73)          93
                                                          ---          ---
      (DECREASE) INCREASE IN CASH AND CASH
       EQUIVALENTS                                       (107)         266
     CASH AND CASH EQUIVALENTS AT BEGINNING
      OF PERIOD                                         2,583        2,712
                                                        -----        -----
     CASH AND CASH EQUIVALENTS AT END OF
      PERIOD                                           $2,476       $2,978
                                                       ======       ======



                                   Table 4
                               CA Technologies
                          Constant Currency Summary
                                (in millions)
                                 (unaudited)

                                       Three Months Ended June 30,
                             ----------------------------------------------
                                                                     %
                                                                 Increase
                                                                (Decrease)
                                                      %             in
                                                  Increase       Constant
                                                 (Decrease)      Currency
                             2010       2009       in $ US          (1)
                             ----       ----     -----------    -----------

     Bookings                $750      $1,192         (37%)        (36%)

     Revenue:
        North America        $666        $625            7%           6%
        International         425         419            1%         (1%)
                              ---         ---          ---         ----
        Total revenue      $1,091      $1,044            5%           3%

     Revenue:
        Subscription and
         maintenance         $961        $941            2%           1%
        Professional
         services              78          70           11%          11%
        Software fees and
         other                 52          33           58%          51%
                              ---         ---          ---          ---
        Total revenue      $1,091      $1,044            5%           3%

     Total expenses
      before interest
      and
     income taxes:
        Total Non-GAAP (2)   $724        $657           10%           8%
        Total GAAP           $767        $719            7%           8%


    (1)  Constant currency information is presented to provide a
         framework to assess how the underlying businesses performed
         excluding the effect of foreign currency rate fluctuations.  To
         present this information, current and comparative prior period
         results for entities reporting in currencies other than US dollars
         are converted into US dollars at the exchange rate in effect on
         March 31, 2010, which was the last day of fiscal year 2010.
         Constant currency excludes the impacts from the Company's hedging
         program.
    (2)  Refer to Table 6 for a reconciliation of total expenses before
         interest and income taxes on a GAAP basis to total expenses before
         interest and income taxes on a non-GAAP basis.

         Certain balances have been revised to reflect the discontinued
         operations associated with the sale of the Information Governance
         business.

                                Table 5
                            CA Technologies
         Reconciliation of GAAP Results to Non-GAAP Net Income
                (in millions, except per share amounts)
                              (unaudited)

                                                        Three Months Ended
                                                             June 30,
                                                             --------
                                                         2010           2009
                                                         ----           ----

      Total revenue                                    $1,091         $1,044
      Total expenses before interest and income
       taxes                                              767            719
                                                          ---            ---

      Income from continuing operations before
       interest and
          income taxes (1)                                324            325
          GAAP Operating Margin (% of revenue)             30%            31%

      Non-GAAP operating adjustments:
         Purchased software amortization                   22             13
         Intangibles amortization                          16             13
         Share-based compensation                          19             27
         Restructuring and other (2)                        -              2
         Hedging (gains)/losses, net (3)                  (14)             7
      Total non-GAAP operating adjustments                 43             62
                                                          ---            ---
      Non-GAAP income from continuing
       operations before
          interest and income taxes                       367            387
          Non-GAAP Operating Margin (% of revenue)         34%            37%

      Interest expense, net                                13             17
      Interest on dilutive convertible bonds                -            (10)
                                                          ---            ---
      Non-GAAP income from continuing
       operations before
          income taxes                                    354            380

      Income tax expense (4)                              119            135
                                                          ---            ---

      Non-GAAP income from continuing
       operations (5)                                    $235           $245
                                                         ====           ====

      Non-GAAP diluted EPS from continuing
       operations (5)(6)                                $0.45          $0.45
                                                        =====          =====
      Diluted weighted average shares used in
           computation (6)                                511            540





    (1)  See the Condensed Consolidated Statements of Operations on Table
    1 for a bridge from income from continuing operations before
    interest and income taxes to income from continuing operations.
    (2)  Excludes $3 of benefit related to the Fiscal 2010 restructuring
    plan for the three months ended June 30, 2010.
    (3)  Consists of gains and losses since inception of hedges that
    mature within the quarter, but exclude gains and losses of hedges
    that do not mature within the quarter.
    (4)  The effective tax rate on non-GAAP income from continuing
    operations is the Company's provision for income taxes expressed as
    a percentage of non-GAAP income from continuing operations before
    income taxes.  Such tax rates are determined based on an estimated
    effective full year tax rate after the adjustments for the impacts
    of certain discrete items (such as changes in tax rates,
    reconciliations of tax returns to tax provisions and resolutions of
    tax contingencies).
    (5)  Non-GAAP income from continuing operations and the number of
    shares used in the computation of non-GAAP diluted EPS from
    continuing operations have been adjusted to reflect the dilutive
    impact of the Company's 1.625% Convertible Senior Notes and stock
    awards outstanding for the period ending June 30, 2009.
    (6)  The calculation of the non-GAAP diluted EPS from continuing
    operations includes certain adjustments required by ASC 260-10-45
    which treats certain stock awards as participating securities for
    the computation of earnings per share.  As a result, non-GAAP
    diluted EPS from continuing operations may not equal the non-GAAP
    income from continuing operations divided by the diluted weighted
    average shares.
      Refer to the discussion of non-GAAP financial measures included in
      the accompanying press release for additional information.
      Certain balances have been revised to reflect the discontinued
      operations associated with the sale of the Information Governance
      business.

                         Table 6
                     CA Technologies
            Reconciliation of GAAP to Non-GAAP
    Operating Expenses and Diluted Earnings per Share
                      (in millions)
                       (unaudited)

                                                Three Months
                                                    Ended
                                                  June 30,
                                                  --------
       Operating Expenses                      2010        2009
       ------------------                      ----        ----

      Total expenses before interest and
       income taxes                            $767        $719

      Non-GAAP operating adjustments:
         Purchased software amortization         22          13
         Intangibles amortization                16          13
         Share-based compensation                19          27
         Restructuring and other                  -           2
         Hedging (gains)/losses, net (1)        (14)          7
      Total non-GAAP operating
       adjustments                               43          62
                                                ---         ---

      Total non-GAAP operating expenses        $724        $657
                                               ====        ====


                                               Three Months
                                                   Ended
                                                 June 30,
                                                 --------
      Diluted EPS from Continuing
       Operations                              2010        2009
      ---------------------------              ----        ----

      GAAP diluted EPS from continuing
       operations                             $0.43       $0.37

      Non-GAAP adjustments, net of
       taxes
        Purchased software and intangibles
         amortization                          0.05        0.03
        Share-based compensation               0.02        0.03
        Restructuring and other                   -           -
        Hedging (gains)/losses, net (1)       (0.02)       0.01
        Non-GAAP effective tax rate
         adjustments (2)                      (0.03)       0.01
                                              -----        ----

      Non-GAAP diluted EPS from
       continuing operations                  $0.45       $0.45
                                              =====       =====




    (1)  Consists of gains and losses since inception of hedges that
    mature within the quarter, but exclude gains and losses of hedges
    that do not mature within the quarter.

    (2)  The effective tax rate on non-GAAP income from continuing
    operations is the Company's provision for income taxes expressed as
    a percentage of non-GAAP income from continuing operations before
    income taxes.  Such tax rates are determined based on an estimated
    effective full year tax rate after the adjustments for the impacts
    of certain discrete items (such as changes in tax rates,
    reconciliations of tax returns to tax provisions and resolutions of
    tax contingencies).
      Refer to the discussion of Non-GAAP financial measures included in
      the accompanying press release for additional information.
      Certain balances have been revised to reflect the discontinued
      operations associated with the sale of the Information Governance
      business.

                            Table 7
                        CA Technologies
               Effective Tax Rate Reconciliation
                       GAAP and Non-GAAP
                         (in millions)
                          (unaudited)

                                            Three Months Ended
                                              June 30, 2010
                                              -------------
                                           GAAP      Non-GAAP
                                           ----      --------

      Income from continuing operations
       before income taxes (1)              $311          $354

      Statutory tax rate                      35%           35%

      Tax at statutory rate                  109           124

      Adjustments for discrete and
       permanent items (2)                   (21)           (5)
                                             ---           ---

      Total tax expense                      $88          $119

      Effective tax rate (3)                28.3%         33.5%




    (1)  Refer to Table 5 for a reconciliation of income from continuing
    operations before interest and income taxes on a GAAP basis to
    income from continuing operations before income taxes on a non-GAAP
    basis.

    (2)  The effective tax rate for GAAP generally includes the impact of
    discrete and permanent items in the period such items arise, whereas
    the effective tax rate for non-GAAP generally allocates the impact
    of such items pro rata to the fiscal year's remaining reporting
    periods.

    (3)  The effective tax rate on GAAP and non-GAAP income from
    continuing operations is the Company's provision for income taxes
    expressed as a percentage of GAAP and non-GAAP income from
    continuing operations before income taxes, respectively.  Such tax
    rates are determined based on an estimated effective full year tax
    rate after the adjustments for the impacts of certain discrete items
    (such as changes in tax rates, reconciliations of tax returns to tax
    provisions and resolutions of tax contingencies).

      Refer to the discussion of non-GAAP financial measures included in
      the accompanying press release for additional information.

      Certain balances have been revised to reflect the discontinued
      operations associated with the sale of the Information Governance
      business.

                                 Table 8
                             CA Technologies
         Reconciliation of Projected GAAP Earnings per Share to
                  Projected Non-GAAP Earnings per Share
                               (unaudited)

                                                               Fiscal Year
                                                                 Ending
                                                             March 31, 2011
                                                             --------------


    Projected GAAP Diluted EPS From Continuing
     Operations Range                                     $1.51   to   $1.63

    Non-GAAP Adjustments, Net of Taxes:
         Purchased Software and Intangibles Amortization   0.19         0.19
         Share-based Compensation                          0.12         0.12
                                                           ----         ----

    Non-GAAP Projected Diluted Operating EPS From
     Continuing Operations Range                          $1.82   to   $1.94
                                                          =====        =====








    Refer to the discussion of non-GAAP financial measures included in
    the accompanying press release for additional information.

SOURCE CA Technologies

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