CA Technologies
Oct 21, 2010

CA Technologies Reports Second Quarter 2011 Results

ISLANDIA, N.Y., Oct 21, 2010 /PRNewswire via COMTEX News Network/ --

CA Technologies (Nasdaq: CA) today reported financial results for its second quarter ended Sept. 30, 2010.

FINANCIAL OVERVIEW



                                   Second Quarter FY11 vs. FY10
                                   ----------------------------
    (in millions,                                            % Change
     except share data) FY11      FY10        % Change       CC**
    ------------------- ----      ----        --------      ---------
    Revenue                $1,110     $1,067             4%            5%
    -------------------    ------     ------           ---           ---
    GAAP Income from
     Continuing
     Operations              $222       $218             2%           11%
    ----------------         ----       ----           ---           ---
    Non-GAAP Income
     from Continuing
     Operations*             $251       $248             1%            3%
    ----------------         ----       ----           ---           ---
    GAAP Diluted EPS
     from Continuing
     Operations             $0.43      $0.41             5%           14%
    ----------------        -----      -----           ---           ---
    Non-GAAP  Diluted
     EPS from
     Continuing
     Operations*            $0.49      $0.45             9%           10%
    -----------------       -----      -----           ---           ---
    Cash Flow from
     Operations              $130       $120             8%           11%
    --------------           ----       ----           ---           ---



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

**CC: Constant Currency

EXECUTIVE COMMENTARY

"CA Technologies recorded a good second quarter," said Chief Executive Officer Bill McCracken. "We delivered solid financial performance by growing revenue, earnings per share and cash flow. We also continued to take more steps in support of our corporate strategy by building out our virtualization management, security management and cloud offerings through a number of key acquisitions and the announcement of new industry-leading solutions.

"I see our second quarter results as a strong indication that our strategy to manage and secure physical, virtual and cloud environments is the right strategy," McCracken continued. "The changes we made to our organization and our focus on rigorous execution are beginning to pay off. These results, along with our view of the back half of the year, give us the confidence to reaffirm our full-year outlook."

SECOND QUARTER REVENUE AND BOOKINGS

Total revenue growth in the second quarter can be attributed primarily to a significant increase in sales of the Company's service assurance, project and portfolio management, and identity and access management products. In addition, the services and education business showed healthy growth.

SECOND QUARTER EXPENSES AND MARGIN

Year-over-year GAAP results:

Expenses, operating income, and operating margin for the second quarter were affected by increased costs associated with acquisitions. This was offset in part by a $10 million benefit from a one-time sale of an equity interest, which translated to a $0.01 benefit to GAAP and non-GAAP EPS.

Year-over-year non-GAAP results, which excludes purchased software and intangibles amortization, pre-fiscal year 2010 restructuring costs and other costs, share-based compensation expense, and includes gains and losses on hedges that mature within the quarter, but excludes gains and losses on hedges that do not mature within the quarter:

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

In the second quarter, the Company reported a GAAP tax rate of 25 percent and a non-GAAP tax rate of 34 percent.

CASH FLOW FROM OPERATIONS

Cash flow from operations was $130 million compared to $120 million in the prior year. Second quarter cash flow was affected by a year-over-year $60 million increase in single installment payments from customers.

CAPITAL STRUCTURE

QUARTER HIGHLIGHTS

During the second 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 to be compared to fiscal year 2010 full year results, the Company provides full fiscal year 2010 results for non-GAAP earnings per share excluding stock-based compensation expense below.

The Company reaffirmed its revised outlook issued on July 21, 2010 for revenue and cash flow, and GAAP and non-GAAP earnings per share. The Company also updated projected as reported numbers based on Sept. 30, 2010 exchange rates:

Both GAAP and non-GAAP diluted earnings per share dollar ranges provided have increased to reflect currency fluctuations, year-to-date performance and reduced share count. Both GAAP and non-GAAP earnings per share on the low and high end of the range have increased by $0.03.

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

The Company anticipates approximately 506 million shares outstanding at fiscal year 2011 year-end and a weighted average diluted shares outstanding of approximately 508 million for the fiscal year. Guidance does not include the impact from any future stock repurchases.

Webcast

This news release and the accompanying tables should be read in conjunction with additional content that is available on the Company's website, including a supplemental financial package, as well as a webcast that the Company will host at 5 p.m. ET today to discuss its unaudited second quarter results. The webcast will be archived on the Company website. Individuals can access the webcast, as well as this press release and supplemental financial information, at http://ca.com/invest or listen to the call at 1-800-776-0420. The international participant number is 1-913-312-1407.

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About CA Technologies

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

Follow CA Technologies

Non-GAAP Financial Measures

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

Cautionary Statement Regarding Forward-Looking Statements

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

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


    Contacts:     Dan Kaferle              Kelsey Doherty
                  Public Relations         Investor Relations
                   (631) 342-2111          (212) 415-6844
                  daniel.kaferle@ca.com     kelsey.doherty@ca.com


                                           Table 1
                                       CA Technologies
                       Condensed Consolidated Statements of Operations
                           (in millions, except per share amounts)
                                         (unaudited)


                                Three Months Ended       Six Months Ended
                                  September 30,           September 30,
                                  -------------           -------------
     Revenue                    2010           2009   2010           2009
                                ----           ----   ----           ----
     Subscription and
      maintenance revenue       $961           $969 $1,922         $1,910
     Professional services        79             70    157            140
     Software fees and other      70             28    122             61
     Total revenue             1,110          1,067  2,201          2,111
                               -----          -----  -----          -----
     Expenses
     Costs of licensing and
      maintenance                 74             72    151            138
     Cost of professional
      services                    75             59    146            125
     Amortization of
      capitalized software
      costs                       48             34     93             67
     Selling and marketing       308            284    607            564
     General and
      administrative             113            119    230            229
     Product development and
      enhancements               125            114    253            231
     Depreciation and
      amortization of other
      intangible assets           45             39     89             77
     Other expenses, net          15              7      4             14
     Restructuring and other       -              -     (3)             2
     Total expenses before
      interest and income
      taxes                      803            728  1,570          1,447
                                 ---            ---  -----          -----
     Income from continuing
      operations before
      interest and income
      taxes                      307            339    631            664
     Interest expense, net        12             22     25             39
                                 ---            ---    ---            ---
     Income from continuing
      operations before income
      taxes                      295            317    606            625
     Income tax expense           73             99    161            212
     INCOME FROM CONTINUING
      OPERATIONS                $222           $218   $445           $413
     Loss from discontinued
      operations, net of
      income taxes                 -              -      6              -
                                 ---            ---                   ---
     NET INCOME                 $222           $218   $439           $413
                                ====           ====   ====           ====

     Basic income (loss) per
      share
     Income from continuing
      operations               $0.43          $0.42  $0.86          $0.79
     Loss from discontinued
      operations                   -              -  (0.01)             -
     Net Income                $0.43          $0.42  $0.85          $0.79
                               =====          =====  =====          =====
     Basic weighted average
      shares used in
      computation                507            518    508            517

     Diluted income (loss) per
      share
     Income from continuing
      operations               $0.43          $0.41  $0.86          $0.78
     Loss from discontinued
      operations                   -              -  (0.01)             -
                                 ---            ---  -----            ---
     Net Income                $0.43          $0.41  $0.85          $0.78
                               =====          =====  =====          =====
     Diluted weighted average
      shares used in
      computation                508            542    509            541



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


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

                                                   September          March
                                                       30,             31,
                                                        2010            2010
                                                        ----            ----

      Cash and cash equivalents                       $2,525          $2,583
      Trade and installment accounts receivable,
       net                                               697             931
      Deferred income taxes - current                    198             360
      Other current assets                               235             116
                                                         ---             ---

      Total current assets                             3,655           3,990
      Installment accounts receivable, due after
       one year, net                                       -              46
      Property and equipment, net                        449             452
      Goodwill                                         5,594           5,667
      Capitalized software and other intangible
       assets, net                                     1,157           1,150
      Deferred income taxes - noncurrent                 435             355
      Other noncurrent assets, net                       209             178
                                                         ---             ---

      Total assets                                   $11,499         $11,838
                                                     =======         =======

      Current portion of long-term debt and
       loans payable                                     $15             $15
      Deferred revenue (billed or collected) -
       current                                         2,183           2,555
      Deferred income taxes - current                     55              51
      Other current liabilities                          739             967
                                                         ---             ---

      Total current liabilities                        2,992           3,588

      Long-term debt, net of current portion           1,552           1,530
      Deferred income taxes - noncurrent                 207             134
      Deferred revenue (billed or collected) -
       noncurrent                                        942           1,068
      Other noncurrent liabilities                       516             535
                                                         ---             ---

      Total liabilities                                6,209           6,855
                                                       -----           -----

      Common stock                                        59              59
      Additional paid-in capital                       3,580           3,657
      Retained earnings                                3,759           3,361
      Accumulated other comprehensive loss               (88)           (130)
      Treasury stock                                  (2,020)         (1,964)
                                                      ------          ------

      Total stockholders' equity                       5,290           4,983
                                                       -----           -----

      Total liabilities and stockholders' equity     $11,499         $11,838
                                                     =======         =======


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

                                                          Three Months Ended
                                                             September 30,
                                                             -------------
                                                           2010          2009
                                                           ----          ----
     OPERATING ACTIVITIES:
             Net income                                    $222          $218
             Adjustments to reconcile net income to net
              cash provided by operating activities:
            Depreciation and amortization                    93            73
            Provision for deferred income taxes              71            62
            Provision for bad debts                           2             3
            Share based compensation expense                 21            26
            Amortization of discount on convertible
             debt                                             -            12
            Asset impairments and other non-cash
             activities                                      (6)            1
            Foreign currency transaction gains                2            (9)
             Changes in other operating assets and
              liabilities, net of effect of
              acquisitions:
            Increase in trade and installment accounts
             receivable, net                                (47)          (49)
            Decrease in deferred revenue                   (203)         (223)
            Decrease in taxes payable, net                  (33)          (21)
            Increase in accounts payable, accrued
             expenses and other                               3             1
            Increase in accrued salaries, wages and
             commissions                                     29            19
            Decrease in restructuring liabilities           (10)          (14)
            Changes in other operating assets and
             liabilities                                    (14)           21

     NET CASH PROVIDED BY OPERATING ACTIVITIES              130           120
                                                            ---           ---
     INVESTING ACTIVITIES:
              Acquisitions, primarily businesses, net of
               cash acquired,
              and purchased software                        (19)           (2)
              Purchases of property and equipment           (22)          (17)
              Cash proceeds from divestiture of assets       10             -
              Capitalized software development costs        (31)          (50)
     NET CASH USED IN INVESTING ACTIVITIES                  (62)          (69)
                                                            ---           ---
     FINANCING ACTIVITIES:
              Dividends paid                                (20)          (21)
              Purchases of common stock                    (100)          (45)
              Debt repayments                                (4)           (3)
              Exercise of common stock options and other      -             2
     NET CASH USED IN FINANCING ACTIVITIES                 (124)          (67)
                                                           ----           ---
     DECREASE IN CASH AND CASH EQUIVALENTS
      BEFORE
         EFFECT OF EXCHANGE RATE CHANGES ON CASH            (56)          (16)
     Effect of exchange rate changes on cash                105            63
                                                            ---           ---
      INCREASE IN CASH AND CASH EQUIVALENTS                  49            47
     CASH AND CASH EQUIVALENTS AT BEGINNING OF
      PERIOD                                              2,476         2,978
                                                          -----         -----
     CASH AND CASH EQUIVALENTS AT END OF PERIOD          $2,525        $3,025
                                                         ======        ======


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


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

     Bookings         $1,018         $934                9%              10%

     Revenue:
        North America   $675         $624                8%               8%
        International    435          443              (2%)               2%
                         ---          ---             ----              ---
        Total revenue $1,110       $1,067                4%               5%

     Revenue:
        Subscription
         and
         maintenance    $961         $969              (1%)               1%
        Professional
         services         79           70               13%              13%
        Software fees
         and other        70           28              150%             150%
                         ---          ---              ---              ---
        Total revenue $1,110       $1,067                4%               5%

     Total
      expenses
      before
      interest and
      income
      taxes:
        Total Non-
         GAAP (2)       $721         $675                7%               8%
        Total GAAP      $803         $728               10%               9%

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

     Bookings         $1,768       $2,126             (17%)            (16%)

     Revenue:
        North America $1,341       $1,249                7%               7%
        International    860          862                0%               1%
                         ---          ---              ---              ---
        Total revenue $2,201       $2,111                4%               4%

     Revenue:
        Subscription
         and
         maintenance  $1,922       $1,910                1%               1%
        Professional
         services        157          140               12%              12%
        Software fees
         and other       122           61              100%              95%
                         ---          ---              ---              ---
        Total revenue $2,201       $2,111                4%               4%

     Total
      expenses
      before
      interest and
      income
      taxes:
        Total Non-
         GAAP (2)     $1,445       $1,331                9%               9%
        Total GAAP    $1,570       $1,447                9%               9%




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

    (2)  Refer to Table 6 for a reconciliation of total expenses before
    interest and income taxes on a GAAP basis to total expenses before
    interest and income taxes on a non-GAAP basis.

       Certain balances have been revised to reflect the discontinued
       operations associated with the sale of the Information Governance
       business.
       Certain non-material differences may arise versus actual from impact
       of rounding.

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


                               Three Months Ended        Six Months Ended
                                 September 30,            September 30,
                                 -------------            -------------
                               2010           2009    2010           2009
                               ----           ----    ----           ----

     Total revenue           $1,110         $1,067  $2,201         $2,111
     Total expenses
      before interest and
      income taxes              803            728   1,570          1,447
                                ---            ---   -----          -----

     Income from
      continuing
      operations before
      interest and
        income taxes (1)        307            339     631            664
         GAAP Operating
          Margin (% of
          revenue)               28%            32%     29%            31%

     Non-GAAP operating
      adjustments:
        Purchased software
         amortization            22             12      44             26
        Intangibles
         amortization            17             13      33             26
        Share-based
         compensation            21             26      40             53
        Restructuring and
         other (2)                1              -       1              2
        Hedging
         (gains)/losses, net
         (3)                     21              2       7              9
     Total non-GAAP
      operating
      adjustments                82             53     125            116
                                ---            ---     ---            ---
     Non-GAAP income
      from continuing
      operations before
         interest and income
          taxes                 389            392     756            780
         Non-GAAP Operating
          Margin (% of
          revenue)               35%            37%     34%            37%

     Interest expense,
      net                        12             22      25             39
     Interest on dilutive
      convertible bonds           -            (14)      -            (24)
                                ---            ---     ---            ---
     Non-GAAP income
      from continuing
      operations before
         income taxes           377            384     731            765

     Income tax expense
      (4)                       126            136     245            271
                                ---            ---     ---            ---

     Non-GAAP income
      from continuing
      operations (5)           $251           $248    $486           $494
                               ====           ====    ====           ====

     Non-GAAP diluted
      EPS from continuing
      operations (5)(6)       $0.49          $0.45   $0.94          $0.90
                              =====          =====   =====          =====
     Diluted weighted
      average shares used
      in
          computation (6)       508            542     509            541





    (1)  See the Condensed Consolidated Statements of Operations on Table
    1 for a bridge from income from continuing operations before
    interest and income taxes to income from continuing operations.

    (2)  Excludes $3 of benefit related to the Fiscal 2010 restructuring
    plan for the six months ended September 30, 2010.

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

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

    (5)  Non-GAAP income from continuing operations and the number of
    shares used in the computation of non-GAAP diluted EPS from
    continuing operations have been adjusted to reflect the dilutive
    impact of the Company's 1.625% Convertible Senior Notes and stock
    awards outstanding for the three and six months ended September 30,
    2009.

    (6)  The calculation of the non-GAAP diluted EPS from continuing
    operations includes certain adjustments required by ASC 260-10-45
    which treats certain stock awards as participating securities for
    the computation of earnings per share.  As a result, non-GAAP
    diluted EPS from continuing operations may not equal the non-GAAP
    income from continuing operations divided by the diluted weighted
    average shares.

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

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

      Certain non-material differences may arise versus actual from impact
      of rounding.

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


                                 Three Months
                                    Ended           Six Months Ended
                                September 30,         September 30,
                                -------------         -------------
      Operating Expenses       2010           2009     2010           2009
      ------------------       ----           ----     ----           ----

     Total expenses before
      interest and income
      taxes                    $803           $728   $1,570         $1,447

     Non-GAAP operating
      adjustments:
        Purchased software
         amortization            22             12       44             26
        Intangibles
         amortization            17             13       33             26
        Share-based
         compensation            21             26       40             53
        Restructuring and
         other                    1              -        1              2
        Hedging
         (gains)/losses, net
         (1)                     21              2        7              9
     Total non-GAAP
      operating adjustments      82             53      125            116
                                ---            ---      ---            ---

     Total non-GAAP
      operating expenses       $721           $675   $1,445         $1,331
                               ====           ====   ======         ======


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

     GAAP diluted EPS from
      continuing operations   $0.43          $0.41    $0.86          $0.78

     Non-GAAP adjustments,
      net of taxes
       Purchased software and
        intangibles
        amortization           0.05           0.03     0.10           0.06
       Share-based
        compensation           0.03           0.03     0.05           0.06
       Restructuring and
        other                     -              -        -              -
       Hedging
        (gains)/losses, net
        (1)                    0.03              -     0.01              -
       Non-GAAP effective
        tax rate adjustments
        (2)                   (0.05)         (0.02)   (0.08)             -
                              -----          -----    -----            ---

     Non-GAAP diluted EPS
      from continuing
      operations              $0.49          $0.45    $0.94          $0.90
                              =====          =====    =====          =====




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

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

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

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

      Certain non-material differences may arise versus actual from impact
      of rounding.

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



                                Three Months Ended       Six Months Ended
                                September 30, 2010      September 30, 2010
                                ------------------      ------------------
                               GAAP       Non-GAAP   GAAP       Non-GAAP
                               ----       --------   ----       --------

     Income from continuing
      operations before income
      taxes (1)                 $295           $377   $606           $731

     Statutory tax rate           35%            35%    35%            35%

     Tax at statutory rate       103            132    212            256

     Adjustments for discrete
      and permanent items (2)    (30)            (6)   (51)           (11)
                                 ---            ---    ---            ---

     Total tax expense           $73           $126   $161           $245

     Effective tax rate (3)     24.9%          33.5%  26.6%          33.5%




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

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

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

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

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

      Certain non-material differences may arise versus actual from impact
      of rounding.

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



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


    Projected GAAP Diluted EPS From Continuing
     Operations Range                                    $1.54   to  $1.66

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

    Non-GAAP Projected Diluted Operating EPS From
     Continuing Operations Range                         $1.85   to  $1.97
                                                         =====       =====




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

    Certain non-material differences may arise versus actual from impact
    of rounding.

                                     Table 9
                                 CA Technologies
                   Reconciliation of Share-based Compensation
                                  (in millions)
                                   (unaudited)



                                          Three Months        Six Months
                                             Ended              Ended
                                         September 30,      September 30,
                                         -------------      -------------
                                       2010       2009  2010       2009
                                       ----       ----  ----       ----

    Costs of licensing and maintenance   $1         $1    $2         $2
    Costs of professional services        1          -     2          1
    Selling and marketing                 8          9    15         17
    General and administrative            6         10    10         22
    Product development and
     enhancements                         5          6    11         11
                                        ---        ---   ---        ---
    Share-based compensation expense
     before tax                          21         26    40         53
    Income tax benefit                   (7)        (9)  (13)       (18)
                                        ---        ---   ---        ---
         Net share-based compensation
          expense                       $14        $17   $27        $35
                                        ===        ===   ===        ===



    Certain non-material differences may arise versus actual from impact
    of rounding.

SOURCE CA Technologies

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