CA Technologies
CA, INC. (Form: 10-Q, Received: 07/23/2010 16:25:55)
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
     
þ   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2010
or
     
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 1-9247
CA, Inc.
(Exact name of registrant as specified in its charter)
     
Delaware   13-2857434
(State or other jurisdiction of   (I.R.S. Employer Identification Number)
incorporation or organization)    
     
One CA Plaza    
Islandia, New York   11749
(Address of principal executive offices)   (Zip Code)
1-800-225-5224
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ       No o
     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ       No o
     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
             
Large accelerated filer þ   Accelerated filer o   Non-accelerated filer o   Smaller reporting company o
    (Do not check if a smaller reporting company)
     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o       No þ
     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
     
Title of Class   Shares Outstanding
Common Stock   as of July 16, 2010
par value $0.10 per share   515,987,829
 
 

 


 

CA, INC. AND SUBSIDIARIES
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  EX-10.1
  EX-10.2
  EX-12.1
  EX-15
  EX-31.1
  EX-31.2
  EX-32

 


Table of Contents

PART I. FINANCIAL INFORMATION
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
CA, Inc.:
We have reviewed the condensed consolidated balance sheet of CA, Inc. and subsidiaries as of June 30, 2010, and the related condensed consolidated statements of operations and cash flows for the three-month periods ended June 30, 2010 and 2009. These condensed consolidated financial statements are the responsibility of the Company’s management.
We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of CA, Inc. and subsidiaries as of March 31, 2010, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated May 14, 2010, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 2010, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
/s/ KPMG LLP
New York, New York
July 23, 2010

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Table of Contents

Item 1.
CA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)
(in millions, except share and per share amounts)
                 
    June 30,     March 31,  
    2010     2010  
ASSETS
               
CURRENT ASSETS
               
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 of accumulated depreciation of $637 and $630, respectively
    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  
 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES
               
Current portion of long-term debt and loans payable
  $ 15     $ 15  
Accounts payable
    91       81  
Accrued salaries, wages and commissions
    209       348  
Accrued expenses and other current liabilities
    365       425  
Deferred revenue (billed or collected) – current
    2,276       2,555  
Taxes payable, other than income taxes payable – current
    35       82  
Federal, state and foreign income taxes payable – current
          31  
Deferred income taxes – current
    47       51  
 
           
TOTAL CURRENT LIABILITIES
    3,038       3,588  
Long-term debt, net of current portion
    1,543       1,530  
Federal, state and foreign income taxes payable – noncurrent
    370       400  
Deferred income taxes – noncurrent
    133       134  
Deferred revenue (billed or collected) – noncurrent
    962       1,068  
Other noncurrent liabilities
    143       135  
 
           
TOTAL LIABILITIES
    6,189       6,855  
 
           
STOCKHOLDERS’ EQUITY
               
Preferred stock, no par value, 10,000,000 shares authorized; No shares issued and outstanding
           
Common stock, $0.10 par value, 1,100,000,000 shares authorized; 589,695,081 and 589,695,081 shares issued; 510,533,135 and 509,469,998 shares outstanding, respectively
    59       59  
Additional paid-in capital
    3,577       3,657  
Retained earnings
    3,557       3,361  
Accumulated other comprehensive loss
    (163 )     (130 )
Treasury stock, at cost, 79,161,946 shares and 80,225,083 shares, respectively
    (1,928 )     (1,964 )
 
           
TOTAL STOCKHOLDERS’ EQUITY
    5,102       4,983  
 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 11,291     $ 11,838  
 
           
See accompanying Notes to the Condensed Consolidated Financial Statements.

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CA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)
(in millions, except per share amounts)
                 
    For the Three  
    Months Ended  
    June 30,  
    2010     2009  
REVENUE
               
 
               
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  
Costs 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  
See accompanying Notes to the Condensed Consolidated Financial Statements.

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CA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)
(in millions)
                 
    For the 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 current 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 of 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  
 
           
See accompanying Notes to the Condensed Consolidated Financial Statements.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
NOTE 1 -- ACCOUNTING POLICIES
NOTE A — ACCOUNTING POLICIES
Basis of Presentation:
The accompanying unaudited Condensed Consolidated Financial Statements of CA, Inc. (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), as defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2010 (2010 Form 10-K).
In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, these estimates may ultimately differ from actual results.
Operating results for the three months ended June 30, 2010 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2011.
Divestiture:
In June 2010, the Company sold its Information Governance business to Autonomy Corporation plc (Autonomy). The results of operations and loss on discontinued operations associated with this business have been presented as discontinued operations in the accompanying Condensed Consolidated Statements of Operations for the three months ended June 30, 2010 and 2009. The effects of the discontinued operations were considered immaterial to the Company’s Condensed Consolidated Balance Sheet at March 31, 2010 and Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2010 and 2009. See Note M, “Divestitures,” for additional information.
Cash Dividends:
The Company’s Board of Directors declared the following dividends during the three months ended June 30, 2010 and 2009:
                         
Declaration Date   Per Share Dividend   Record Date   Total Amount   Payment Date
    (in millions)
Three Months Ended June 30, 2010:
                       
May 12, 2010
  $ 0.04     May 31, 2010   $ 21     June 16, 2010
Three Months Ended June 30, 2009:
                       
May 20, 2009
  $ 0.04     May 31, 2009   $ 21     June 16, 2009
Cash and Cash Equivalents:
The Company’s cash and cash equivalents are held in numerous locations throughout the world, with approximately 46% being held by the Company’s foreign subsidiaries outside the United States at June 30, 2010.
Deferred Revenue (Billed or Collected):
The Company accounts for unearned revenue on billed amounts due from customers on a gross basis. Unearned revenue on billed installments (collected or uncollected) is reported as deferred revenue in the liability section of the Company’s Condensed Consolidated Balance Sheets. Deferred revenue (billed or collected) excludes unbilled contractual commitments executed under license and maintenance agreements that will be billed in future periods.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
Stock Repurchases:
In April 2010, the Company completed the stock repurchase program of $250 million authorized by its Board of Directors on October 29, 2008 by repurchasing approximately 0.8 million shares of its common stock for approximately $19 million. On May 12, 2010, the Company’s Board of Directors approved a new stock repurchase program that authorizes the Company to acquire up to $500 million of its common stock. Under the new program, during the quarter ended June 30, 2010, the Company repurchased approximately 2.0 million shares of its common stock for approximately $40 million, of which, approximately $36 million was settled through cash payment as of June 30, 2010.
Statement of Cash Flows:
For the three months ended June 30, 2010 and 2009, interest payments were approximately $35 million and $30 million, respectively, and income taxes paid were approximately $87 million and $120 million, respectively.
Non-cash financing activities for the three months ended June 30, 2010 and 2009 consisted of treasury shares issued in connection with the following: share-based incentive awards granted under the Company’s equity compensation plans of approximately $61 million (net of approximately $25 million of taxes withheld) and $61 million (net of approximately $21 million of taxes withheld), respectively; and discretionary stock contributions to the CA, Inc. Savings Harvest Plan of approximately $25 million and $24 million, respectively. Non-cash financing activities for the three months ended June 30, 2009 included treasury shares issued in connection with the Company’s Employee Stock Purchase Plan of approximately $13 million. The Company discontinued its Employee Stock Purchase Plan effective with the close of the purchase period on June 30, 2009.
NOTE 2 -- COMPREHENSIVE INCOME
NOTE B — COMPREHENSIVE INCOME
Comprehensive income includes net income, unrealized gains on cash flow hedges and foreign currency translation adjustments. The components of comprehensive income for the three months ended June 30, 2010 and 2009 are as follows:
                 
    Three Months  
    Ended June 30,  
    2010     2009  
    (in millions)  
Net income
  $ 217     $ 195  
Net unrealized gain on cash flow hedges, net of tax
    1       1  
Foreign currency translation adjustments
    (34 )     41  
 
           
Total comprehensive income
  $ 184     $ 237  
 
           

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
NOTE 3 -- INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE
NOTE C — INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE
Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of net income per share under the two-class method. Under the two-class method, net income is reduced by the amount of dividends declared in the period for each class of common stock and participating securities. The remaining undistributed income is then allocated to common stock and participating securities as if all of the net income for the period had been distributed. Basic net income per common share excludes dilution and is calculated by dividing net income allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted net income per common share is calculated by dividing net income allocable to common shares by the weighted-average number of common shares as of the balance sheet date, as adjusted for the potential dilutive effect of non-participating share-based awards and convertible notes. The following table reconciles net income per common share for the three months ended June 30, 2010 and 2009.
                 
    Three Months  
    Ended June 30,  
    2010     2009  
    (in millions, except per share  
    amounts)  
Basic income from continuing operations per common share:
               
Income from continuing operations
  $ 223     $ 195  
Less: Income from continuing operations allocable to participating securities
    (3 )     (2 )
 
           
Income from continuing operations allocable to common shares
  $ 220     $ 193  
 
           
Weighted-average common shares outstanding
    510       516  
Basic income from continuing operations per common share
  $ 0.43     $ 0.37  
 
               
Diluted income from continuing operations per common share:
               
Income from continuing operations
  $ 223     $ 195  
Add: Interest expense associated with Convertible Senior Notes, net of tax
          6  
Less: Income from continuing operations allocable to participating securities
    (3 )     (2 )
 
           
Income from continuing operations allocable to common shares
  $ 220     $ 199  
 
           
 
               
Weighted average shares outstanding and common share equivalents
               
Weighted average common shares outstanding
    510       516  
Weighted average shares outstanding upon conversion of Convertible Senior Notes
          23  
Weighted average effect of share-based payment awards
    1       1  
 
           
Denominator in calculation of diluted income per share
    511       540  
 
           
 
               
Diluted income from continuing operations per common share
  $ 0.43     $ 0.37  
For the three months ended June 30, 2010 and 2009, respectively, approximately 10 million and 14 million of restricted stock awards and options to purchase common stock were excluded from the calculation because their effect on income per share was anti-dilutive during the respective periods. Weighted average restricted stock awards of 7 million and 5 million common shares for the three months ended June 30, 2010 and 2009, respectively, were considered participating securities in the calculation of net income available to common shareholders.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
NOTE 4 -- ACCOUNTING FOR SHARE-BASED COMPENSATION
NOTE D — ACCOUNTING FOR SHARE-BASED COMPENSATION
The Company recognized share-based compensation in the following line items on the Condensed Consolidated Statements of Operations for the periods indicated:
                 
    Three Months  
    Ended June 30,  
    2010     2009  
    (in millions)  
Costs of licensing and maintenance
  $ 1     $ 1  
Costs of professional services
    1       1  
Selling and marketing
    7       8  
General and administrative
    4       12  
Product development and enhancements
    6       5  
 
           
Share-based compensation expense before tax
    19       27  
Income tax benefit
    (6 )     (9 )
 
           
Net share-based compensation expense
  $ 13     $ 18  
 
           
There were no capitalized share-based compensation costs at June 30, 2010 or 2009.
The following table summarizes information about unrecognized share-based compensation costs as of June 30, 2010:
                 
            Weighted  
    Unrecognized     Average Period  
    Compensation     Expected to be  
    Costs     Recognized  
    (in millions)     (in years)  
Stock option awards
  $ 5       3.1  
Restricted stock units
    15       2.4  
Restricted stock awards
    88       2.2  
Performance share units
    39       3.1  
 
             
Total unrecognized share-based compensation costs
  $ 147       2.5  
 
             
The value of performance share unit (PSU) awards is marked to the closing price of the Company’s common stock on the last trading day of the quarter until the PSUs are granted. Compensation costs for the PSUs are amortized over the requisite service periods based on the expected level of achievement of the performance targets. At the conclusion of the performance periods for the PSUs, the applicable number of shares of restricted stock awards (RSAs), restricted stock units (RSUs) or unrestricted shares granted may vary based upon the level of achievement of the performance targets and the approval of the Company’s Compensation and Human Resources Committee (who may reduce any award for any reason in their discretion).
The fiscal years 2010 and 2009 1-year PSUs under the Company’s long-term incentive plans were granted in the first quarter of fiscal years 2011 and 2010, respectively. The table below summarizes the RSAs and RSUs granted under these PSUs:

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
                                                 
                    RSAs   RSUs
                            Weighted           Weighted Average
Incentive Plans       Performance   Shares   Average Grant   Shares   Grant Date Fair
for Fiscal Years       Period   (in millions )   Date Fair Value   ( in millions )   Value
  2010    
 
  1-year     2.2     $ 21.47       - (1)   $ 21.38  
  2009    
 
  1-year     0.9     $ 18.05       - (1)   $ 17.96  
 
(1)   Shares granted were fewer than 0.1 million.
The fiscal year 2008 3-year PSUs under the Company’s long-term incentive plan were granted in the first quarter of fiscal year 2011, resulting in the issuance of approximately 0.3 million unrestricted shares with a weighted average grant date fair value of $21.47.
Share-based awards were granted under the Company’s fiscal year 2010 and 2009 Sales Retention Equity Programs in the first quarter of fiscal years 2011 and 2010, respectively. The table below summarizes the RSAs and RSUs granted under these programs:
                                                 
                    RSAs   RSUs
                            Weighted           Weighted Average
Incentive Plans       Performance   Shares   Average Grant   Shares   Grant Date Fair
for Fiscal Years       Period   (in millions)   Date Fair Value   (in millions)   Value
  2010    
 
  1-year     0.4     $ 21.47       0.1     $ 21.36  
  2009    
 
  1-year     0.5     $ 18.05       0.2     $ 17.84  
The table below summarizes all of the RSUs and RSAs, including grants made pursuant to the long-term incentive plans discussed above, granted during the three months ended June 30, 2010 and 2009:
                 
    Three Months
    Ended June 30,
    2010   2009
    (shares in millions)
RSUs
               
Shares
    0.5       0.6  
Weighted Avg. Grant Date Fair Value (1)
  $ 21.39     $ 17.40  
RSAs
               
Shares
    4.6       3.7  
Weighted Avg. Grant Date Fair Value (2)
  $ 21.46     $ 18.04  
 
(1)   The fair value is based on the quoted market value of the Company’s common stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting of the RSUs, which is calculated using a risk free interest rate.
 
(2)   The fair value is based on the quoted market value of the Company’s common stock on the grant date.
For the three months ended June 30, 2010, the Company issued options for approximately 1.0 million shares of common stock. The weighted average fair value and assumptions used for the options granted in the three months ended June 30, 2010 were: fair value, $5.62; dividend yield, 0.82%; expected volatility factor, 0.34; risk-free interest rate, 1.9%; and expected term, 4.5 years. For the three months ended June 30, 2009, the Company did not issue options.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
NOTE 5 -- TRADE AND INSTALLMENT ACCOUNTS RECEIVABLE
NOTE E — TRADE AND INSTALLMENT ACCOUNTS RECEIVABLE
Trade and installment accounts receivable, net represent amounts due from the Company’s customers. These accounts receivable balances are presented net of allowance for doubtful accounts and unamortized discounts. Unamortized discounts reflect imputed interest for the time value of money for license agreements signed prior to October 2000 (prior business model). These balances include revenue recognized in advance of customer billings but do not include unbilled contractual commitments executed under license agreements implemented since October 2000. The components of trade and installment accounts receivable, net are as follows:
                 
    June 30,     March 31,  
    2010     2010  
    (in millions)  
Current:
               
Accounts receivable — billed
  $ 478     $ 768  
Accounts receivable — unbilled
    70       72  
Other receivables
    24       26  
Unbilled amounts due within the next 12 months — prior business model
    93       93  
Less: Allowance for doubtful accounts
    (24 )     (24 )
Less: Unamortized discounts
    (3 )     (4 )
 
           
Trade and installment accounts receivable, net
  $ 638     $ 931  
 
           
 
               
Noncurrent:
               
Unbilled amounts due beyond the next 12 months — prior business model
  $     $ 46  
 
           
Installment accounts receivable, due after one year, net
  $     $ 46  
 
           
NOTE 6 -- GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS
NOTE F — GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS
The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at June 30, 2010 were approximately $7,115 million and $5,925 million, respectively. These amounts include fully amortized intangible assets of approximately $5,180 million, which is composed of purchased software of approximately $4,633 million, internally developed software of approximately $427 million and other identified intangible assets subject to amortization of approximately $120 million. The remaining gross carrying amounts and accumulated amortization for capitalized software and other intangible assets that are not fully amortized are as follows:

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
                         
    As of June 30, 2010  
    Gross              
    Amortizable     Accumulated     Net  
    Assets     Amortization     Assets  
    (in millions)  
Purchased software products
  $ 673     $ 157     $ 516  
Capitalized development cost and other intangibles:
                       
Internally developed software products
    649       204       445  
Other identified intangible assets subject to amortization
    599       384       215  
Other identified intangible assets not subject to amortization
    14             14  
 
                 
Total capitalized software and other intangible assets
  $ 1,935     $ 745     $ 1,190  
 
                 
Based on the capitalized software and other intangible assets recorded through June 30, 2010, the annual amortization expense over the next five fiscal years is expected to be as follows:
                                         
    Year Ended March 31,  
    2011     2012     2013     2014     2015  
    (in millions)  
Capitalized software:
                                       
Purchased
  $ 84     $ 73     $ 66     $ 58     $ 47  
Internally developed
    106       110       97       78       53  
Other identified intangible assets subject to amortization
    66       44       38       33       29  
 
                             
Total
  $ 256     $ 227     $ 201     $ 169     $ 129  
 
                             
For the three months ended June 30, 2010, goodwill activity was as follows:
         
    Amounts  
    (in millions)  
Balance at March 31, 2010
  $ 5,667  
Amounts allocated to loss on discontinued operations
    (11 )
Purchase price allocation
    (58 )
Foreign currency translation adjustment
    (31 )
 
     
Balance at June 30, 2010
  $ 5,567  
 
     
NOTE 7 -- DERIVATIVES AND FAIR VALUE MEASUREMENTS
NOTE G – DERIVATIVES AND FAIR VALUE MEASUREMENTS
The Company is exposed to financial market risks arising from changes in interest rates and foreign exchange rates. Changes in interest rates could affect the Company’s monetary assets and liabilities, and foreign exchange rate changes could affect the Company’s foreign currency denominated monetary assets and liabilities and forecasted transactions. The Company enters into derivative contracts with the intent of mitigating a portion of these risks.
Interest rate swaps: During the first quarter of fiscal year 2011, the Company entered into two interest rate swaps with a total notional value of $200 million to swap a total of $200 million of its 6.125% Senior Notes due December 2014 into floating interest rate debt through December 1, 2014. As a result, the Company has five separate interest rate swaps with a total notional value of $500 million to swap a total of $500 million of its 6.125% Senior Notes due December 2014 into floating interest rate debt through December 1, 2014. These swaps are designated as fair value hedges and are being accounted for in accordance with the shortcut method of FASB ASC Topic 815.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
As of June 30 and March 31, 2010, the fair value of these derivatives was $18 million and $1 million, respectively, and is included in “Other current assets” in the Company’s Condensed Consolidated Balance Sheets.
During fiscal year 2009, the Company entered into two separate interest rate swaps with a total notional value of $250 million to hedge a portion of its variable interest rate payments. These derivatives are designated as cash flow hedges. The effective portion of these cash flow hedges is recorded as “Accumulated other comprehensive loss” in the Company’s Condensed Consolidated Balance Sheets and is reclassified into “Interest expense, net,” in the Company’s Condensed Consolidated Statements of Operations in the same period during which the hedged transaction affects earnings. Any ineffective portion of the cash flow hedges would be recorded immediately to “Interest expense, net”; however, no ineffectiveness existed at June 30 or March 31, 2010.
At June 30 and March 31, 2010, approximately $2 million and $4 million, respectively, of the Company’s interest rate derivatives are included in “Accrued expenses and other current liabilities” on the Company’s Condensed Consolidated Balance Sheets.
Foreign currency contracts: The Company enters into foreign currency option and forward contracts to manage foreign currency risks. The Company has not designated its foreign exchange derivatives as hedges. Accordingly, changes in fair value from these contracts are recorded as “Other (gains) expenses, net” in the Company’s Condensed Consolidated Statements of Operations. As of June 30, 2010, foreign currency contracts outstanding consisted of contracts with a total notional value of approximately $513 million and durations of less than nine months. The net fair value of these contracts at June 30, 2010 was approximately $22 million, of which approximately $26 million is included in “Other current assets” and approximately $4 million is included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheets.
A summary of the effect of the interest rate and foreign exchange derivatives on the Company’s Condensed Consolidated Statements of Operations is as follows:
                 
    Amount of Net (Gain)/Loss Recognized in the
    Condensed Consolidated Statement of Operations
    (in millions)
    Three Months   Three Months
    Ended   Ended
Location of Amounts Recognized   June 30, 2010   June 30, 2009
 
Interest expense, net – interest rate swaps designated as cash flows hedges
  $ 2     $ 2  
Interest expense, net – interest rate swaps designated as fair value hedges
  $ (3 )      
Other (gains) expenses, net – foreign currency contracts
  $ (13 )   $ 20  
For the Company’s cash flow hedges, the amount of loss recorded in “Accumulated other comprehensive loss” in the Company’s Condensed Consolidated Balance Sheet was approximately $2 million at June 30, 2010. The amount of loss reclassified from “Accumulated other comprehensive income” into “Interest expense, net” in the Company’s Condensed Consolidated Statement of Operations was approximately $2 million for the three months ended June 30, 2010. Approximately $2 million is expected to be released from “Accumulated other comprehensive loss” to income in connection with the Company’s monthly interest payments on the hedged debt by the end of the third quarter of fiscal year 2011.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
Items Measured at Fair Value on a Recurring Basis
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30 and March 31, 2010.
                         
    Fair Value Measurement at Reporting Date Using  
    (in millions)  
            Quoted Prices in        
            Active Markets for     Significant Other  
    Estimated Fair     Identical Assets     Observable Inputs  
Description   Value     (Level 1) (1)     (Level 2) (2)  
 
At June 30, 2010
                       
Assets:
                       
Money markets (3)
  $ 1,639     $ 1,639     $  
Foreign exchange derivatives not designated as hedges
    26             26  
Interest rate derivatives designated as fair value hedges
    18             18  
 
                 
Total Assets
  $ 1,683     $ 1,639     $ 44  
 
                 
Liabilities:
                       
Foreign exchange derivatives not designated as hedges
  $ 4     $     $ 4  
Interest rate derivatives designated as cash flow hedges
    2             2  
 
                 
Total Liabilities
  $ 6     $     $ 6  
 
                 
 
At March 31, 2010
                       
Assets:
                       
Money markets (4)
  $ 1,805     $ 1,805     $  
Interest rate derivatives designated as fair value hedges
    1             1  
 
                 
Total Assets
  $ 1,806     $ 1,805     $ 1  
 
                 
Liabilities:
                       
Interest rate derivatives designated as cash flow hedges
  $ 4     $     $ 4  
 
                 
Total Liabilities
  $ 4     $     $ 4  
 
                 
 
(1)   Level 1 is defined as quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities.
 
(2)   Level 2 is defined as quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly.
 
(3)   At June 30, 2010, the Company had approximately $1,589 million and $50 million of investments in money market funds classified as “Cash and cash equivalents” and “Other noncurrent assets, net” for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheets.
 
(4)   At March 31, 2010, the Company had approximately $1,755 million and $50 million of investments in money market funds classified as “Cash and cash equivalents” and “Other noncurrent assets, net” for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheets.
At June 30 and March 31, 2010, the Company did not have any assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
The following table presents the carrying amounts and estimated fair values of the Company’s instruments that are not measured at fair value on a recurring basis at June 30, 2010:
                 
    At June 30, 2010
    (in millions)
    Carrying Value   Estimated Fair Value
 
Liabilities:
               
Long-term debt (1)
  $ 1,558     $ 1,655  
 
               
Facilities abandonment reserve (2)
  $ 63     $ 71  
 
(1)   Estimated fair value of long-term debt is based on quoted prices for similar liabilities for which significant inputs are observable except for certain long-term lease obligations, for which fair value approximates carrying value.
 
(2)   Estimated fair value for the facilities abandonment reserve was determined using the Company’s current incremental borrowing rate. The facilities abandonment reserve includes approximately $22 million in “Accrued expenses and other current liabilities” and approximately $41 million in “Other noncurrent liabilities” on the Company’s Condensed Consolidated Balance Sheets.
The following table presents the carrying amounts and estimated fair values of the Company’s instruments that are not measured at fair value on a recurring basis at March 31, 2010:
                 
    At March 31, 2010
    (in millions)
    Carrying Value   Estimated Fair Value
 
Assets:
               
Noncurrent portion of installment accounts receivable (1)
  $ 46     $ 46  
 
               
Liabilities:
               
Long-term debt (2)
  $ 1,545     $ 1,600  
 
Facilities abandonment reserve (3)
  $ 69     $ 79  
 
(1)   Estimated fair value of the noncurrent portion of installment accounts receivable approximates carrying value due to the relatively short term to maturity.
 
(2)   Estimated fair value of long-term debt is based on quoted prices for similar liabilities for which significant inputs are observable except for certain long-term lease obligations, for which fair value approximates carrying value.
 
(3)   Estimated fair value for the facilities abandonment reserve was determined using the Company’s current incremental borrowing rate. The facilities abandonment reserve includes approximately $22 million in “Accrued expenses and other current liabilities” and approximately $47 million in “Other noncurrent liabilities” on the Company’s Condensed Consolidated Balance Sheets.
The carrying value of financial instruments classified as current assets and current liabilities, such as cash and cash equivalents, accounts payable, accrued expenses, and short-term debt, approximate fair value due to the short-term maturity of the instruments. The fair values of derivatives and long-term debt, including current maturities, have been based on quoted market prices.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
NOTE 8 -- RESTRUCTURING
NOTE H — RESTRUCTURING
Fiscal 2010 restructuring plan: The fiscal 2010 restructuring plan (Fiscal 2010 Plan) was approved on March 31, 2010. The Fiscal 2010 Plan is composed of a workforce reduction of approximately 1,000 positions and global facilities consolidations. These actions are intended to better align the Company’s cost structure with the skills and resources required to more effectively pursue opportunities in the marketplace and execute the Company’s long-term growth strategy. Actions under the Fiscal 2010 Plan are expected to be substantially completed by the end of the second quarter of fiscal year 2011.
For the three months ended June 30, 2010, restructuring activity under the Fiscal 2010 plan was as follows:
                 
            Facilities  
    Severance     Abandonment  
    (in millions)  
Accrued balance as of March 31, 2010
  $ 46     $ 2  
Changes in estimate
    (3 )      
Payments
    (22 )      
Accretion and other
    (1 )      
 
           
Accrued balance as of June 30, 2010
  $ 20     $ 2  
 
           
The liability balance for the severance portion of the remaining reserve is included in the “Accrued salaries, wages and commissions” line item on the Company’s Condensed Consolidated Balance Sheets.
Fiscal 2007 restructuring plan: In August 2006, the Company announced the fiscal 2007 restructuring plan (Fiscal 2007 Plan) to significantly improve the Company’s expense structure and increase its competitiveness. The Fiscal 2007 Plan’s objectives included a workforce reduction, global facilities consolidations and other cost reduction initiatives. The Company has recognized substantially all of the costs associated with the Fiscal 2007 Plan.
The reduction in workforce included approximately 3,100 individuals under the Fiscal 2007 Plan. Most of these actions have been completed; however, final payment of the severance amounts is dependent upon settlement with the works councils in certain international locations. The Company has also recognized substantially all of the facilities abandonment costs associated with the Fiscal 2007 Plan.
For the three months ended June 30, 2010, restructuring activity under the Fiscal 2007 Plan was as follows:
                 
            Facilities  
    Severance     Abandonment  
    (in millions)  
Accrued balance as of March 31, 2010
  $ 8     $ 60  
Payments
    (2 )     (4 )
 
           
Accrued balance as of June 30, 2010
  $ 6     $ 56  
 
           
The liability balance for the severance portion of the remaining reserve is included in the “Accrued salaries, wages and commissions” line item on the Company’s Condensed Consolidated Balance Sheets. The liability for the facilities abandonment portion of the remaining reserve is included in the “Accrued expenses and other current liabilities” and “Other noncurrent liabilities” line items on the Company’s Condensed Consolidated Balance Sheets. “Accretion and other” includes accretion of the Company’s lease obligations related to facilities abandonment as well as changes in the assumptions related to future sublease income. These costs are included in the “General and administrative” expense line item of the Company’s Condensed Consolidated Statement of Operations.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
NOTE 9 -- INCOME TAXES
NOTE I — INCOME TAXES
Income tax expense for the three months ended June 30, 2010 was $88 million compared with income tax expense of $113 million for the three months ended June 30, 2009. During the three months ended June 30, 2010, the Company had a net tax benefit of $13 million resulting primarily from the resolution of uncertain tax positions in respect of its international profile. The Company’s effective income tax rate, excluding the impact of discrete items, for the three months ended June 30, 2010 of 32.5% was different from the effective income tax rate of 35.7% for the three months ended June 30, 2009 primarily due to the worldwide mix of estimated consolidated earnings before taxes and additional accruals and changes in estimates related to uncertain tax positions. The results of the Company’s international operations, the outcome of tax audits and any other changes in potential tax liabilities may result in additional tax expense or benefit in future periods, which are not considered in the Company’s estimated annual effective tax rate. However, the Company does not currently view any such items as material to the results of operations or financial position.
NOTE 10 -- COMMITMENTS AND CONTINGENCIES
NOTE J — COMMITMENTS AND CONTINGENCIES
Certain legal proceedings in which the Company is involved are discussed in Note 9, “Commitments and Contingencies,” in the Notes to the Consolidated Financial Statements included in the Company’s 2010 Annual Financial Statements. The following discussion should be read in conjunction with the Company’s 2010 Annual Financial Statements.
Stockholder Derivative Litigation
In June and July 2004, three purported derivative actions were filed in the United States District Court for the Eastern District of New York (the Federal Court) by Ranger Governance, Ltd. (Ranger), Bert Vladimir and Irving Rosenzweig against certain current or former employees and/or directors of the Company. In November 2004, the Federal Court issued an order consolidating the three actions into Computer Associates International, Inc., Derivative Litigation , No. 04 Civ. 2697 (E.D.N.Y.) (the Derivative Action). The derivative plaintiffs filed a consolidated amended complaint (the Consolidated Complaint) on January 7, 2005. The Consolidated Complaint names as defendants Charles Wang, Sanjay Kumar, Ira Zar, Charles McWade, Peter Schwartz, William de Vogel, Richard Grasso, Roel Pieper, Russell Artzt, Alfonse D’Amato, Lewis Ranieri, Stephen Richards, Steven Woghin, David Kaplan, David Rivard, Lloyd Silverstein, Michael A. McElroy, Gary Fernandes, Robert E. La Blanc, Jay W. Lorsch, Kenneth Cron, Walter P. Schuetze, KPMG LLP, and Ernst & Young LLP. The Company is named as a nominal defendant. The Consolidated Complaint seeks from one or more of the defendants (1) contribution towards the consideration the Company had previously agreed to provide then current and former stockholders in settlement of certain class action litigation commenced against the Company and certain officers and directors in 1998 and 2002; (2) compensatory and consequential damages in an amount not less than $500 million in connection with the investigations giving rise to the Deferred Prosecution Agreement (DPA) entered into between the Company and the United States Attorney’s Office in 2004 and a consent to enter into a final judgment (Consent Judgment) in a parallel proceeding brought by the SEC regarding certain of the Company’s past accounting practices, including its revenue recognition policies and procedures during certain periods prior to the adoption of the Company’s new business model in October 2000. (In May 2007, based upon the Company’s compliance with the terms of the DPA, the Federal Court ordered dismissal of the charges that had been filed against the Company in connection with the DPA, and the DPA expired. The injunctive provisions of the Consent Judgment permanently enjoining the Company from violating certain provisions of the federal securities laws remain in effect.); (3) unspecified relief for violations of Section 14(a) of the Exchange Act for alleged false and material misstatements made in the Company’s proxy statements issued in 2002 and 2003; (4) relief for alleged breach of fiduciary duty; (5) unspecified compensatory, consequential and punitive damages based upon allegations of corporate waste and fraud; (6) unspecified damages for breach of duty of reasonable care; (7) restitution and rescission of the compensation earned under the Company’s executive compensation plan; and (8) pursuant to Section 304 of the Sarbanes-Oxley Act, reimbursement

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
of bonus or other incentive-based equity compensation and alleged profits realized from sales of securities issued by the Company. Although no relief is sought from the Company, the Consolidated Complaint seeks monetary damages, both compensatory and consequential, from the other defendants, including current or former employees and/or directors of the Company, Ernst & Young LLP and KPMG LLP in an amount totaling not less than $500 million.
On February 1, 2005, the Company established a Special Litigation Committee of members of its Board of Directors who are independent of the defendants to, among other things, control and determine the Company’s response to the Derivative Action. On April 13, 2007, the Special Litigation Committee issued its reports, which announced the Special Litigation Committee’s conclusions, determinations, recommendations and actions with respect to the claims asserted in the Derivative Action. The Special Litigation Committee also served a motion which seeks to dismiss and realign the claims and parties in accordance with the Special Litigation Committee’s recommendations. As summarized below, the Special Litigation Committee concluded as follows:
    The Special Litigation Committee has concluded that it would be in the best interests of the Company to pursue certain of the claims against Messrs. Wang and Schwartz.
 
    The Special Litigation Committee has concluded that it would be in the best interests of the Company to pursue certain of the claims against the former Company executives who have pled guilty to various charges of securities fraud and/or obstruction of justice — including Messrs. Kaplan, Richards, Rivard, Silverstein, Woghin and Zar. The Special Litigation Committee has determined and directed that these claims be pursued by the Company using counsel retained by the Company, unless the Special Litigation Committee is able to successfully conclude its ongoing settlement negotiations with these individuals.
 
    The Special Litigation Committee has reached a settlement (subject to court approval) with Messrs. Kumar, McWade and Artzt.
 
    The Special Litigation Committee believes that the claims against current and former Company directors Messrs. Cron, D’Amato, de Vogel, Fernandes, Grasso, La Blanc, Lorsch, Pieper, Ranieri and Schuetze should be dismissed. The Special Litigation Committee has concluded that these directors did not breach their fiduciary duties and the claims against them lack merit.
 
    The Special Litigation Committee has concluded that it would be in the best interests of the Company to seek dismissal of the claims against Ernst & Young LLP, KPMG LLP and Mr. McElroy.
By letter dated July 19, 2007, counsel for the Special Litigation Committee advised the Federal Court that the Special Litigation Committee had reached a settlement of the Derivative Action with two of the three derivative plaintiffs — Bert Vladimir and Irving Rosenzweig. In connection with the settlement, both of these plaintiffs have agreed to support the Special Litigation Committee’s motion to dismiss and to realign. The Company has agreed to pay the attorney’s fees of Messrs. Vladimir and Rosenzweig in an amount up to $525,000 each. If finalized, this settlement would require approval of the Federal Court. On July 23, 2007, Ranger filed a letter with the Federal Court objecting to the proposed settlement.
On October 29, 2007, the Federal Court denied the Special Litigation Committee’s motion to dismiss and realign, without prejudice to renewing the motion following a decision by the United States Court of Appeals for the Second Circuit (the Second Circuit) on an appeal brought by Ranger in connection with other derivative litigation. On December 14, 2009, the Company and the Special Litigation Committee renewed the motion to dismiss and realign. That motion is currently pending.
Texas Litigation
On August 9, 2004, a petition was filed by Sam Wyly and Ranger against the Company in the District Court of Dallas County, Texas, seeking to obtain a declaratory judgment that plaintiffs did not breach two separation agreements they entered into with the Company in 2002 (the 2002 Agreements). On

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
February 18, 2005, Mr. Wyly filed a separate lawsuit in the United States District Court for the Northern District of Texas alleging that he is entitled to attorneys’ fees in connection with the original litigation filed in the District Court of Dallas County, Texas. The two actions have been consolidated and transferred to the Federal Court. On March 31, 2005, the plaintiffs amended their complaint to allege a claim that they were defrauded into entering the 2002 Agreements and to seek rescission of those agreements and damages. On September 29, 2009, the Federal Court entered an order granting the Company’s motion for summary judgment, and dismissing the action in its entirety. That order was appealed to the Second Circuit on October 28, 2009. On July 19, 2010, the Second Circuit affirmed the judgment of the Federal Court dismissing this action in its entirety. Although the ultimate outcome cannot be determined, the Company believes that the claims are unfounded and that the Company has meritorious defenses.
Other Civil Actions
The Company, various subsidiaries, and certain current and former officers have been named as defendants in various other lawsuits and claims arising in the normal course of business. The Company believes that it has meritorious defenses in connection with such lawsuits and claims, and intends to vigorously contest each of them. In the opinion of the Company’s management, although the outcome of the matters listed in this Note as well as these other lawsuits and claims is uncertain, the results of pending matters against the Company, either individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows, although the effect could be material to the Company’s results of operations or cash flows for any interim reporting period.
The Company is obligated to indemnify its officers and directors under certain circumstances to the fullest extent permitted by Delaware law. As a part of that obligation, the Company has advanced and will continue to advance certain attorneys’ fees and expenses incurred by current and former officers and directors in various litigations and investigations arising out of similar allegations, including the litigation described above.
NOTE 11 -- DEFERRED REVENUE
NOTE K — DEFERRED REVENUE:
The components of “Deferred revenue (billed or collected) — current” and “Deferred revenue (billed or collected) — noncurrent” as of June 30, 2010 and March 31, 2010 are as follows:
                 
    June 30,     March 31,  
    2010     2010  
    (in millions)  
Current:
               
Subscription and maintenance
  $ 2,121     $ 2,389  
Professional services
    141       151  
Financing obligations and other
    14       15  
 
           
Total deferred revenue (billed or collected) — current
    2,276       2,555  
 
           
 
               
Noncurrent:
               
Subscription and maintenance
    941       1,042  
Professional services
    19       24  
Financing obligations and other
    2       2  
 
           
Total deferred revenue (billed or collected) — noncurrent
    962       1,068  
 
           
Total deferred revenue (billed or collected)
  $ 3,238     $ 3,623  
 
           

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
NOTE 12 -- ACQUISITIONS
NOTE L — ACQUISITIONS
The following represents the allocation of the purchase price and estimated useful lives to the acquired net assets of Nimsoft AS (Nimsoft), 3Tera, Inc. (3Tera) and Oblicore, Inc. (Oblicore). Revision of the value assigned to purchased software from the original amount reported for fiscal year 2010 was approximately $54 million. The amortization effects were immaterial. During the three months ended June 30, 2010, the Company finalized the purchase price allocation for 3Tera. The Company has not completed its review of historical tax records for Nimsoft and Oblicore, therefore, final purchase price allocation has yet to be determined for those acquisitions.
                 
            Estimated
(dollars in millions)   Amount   Useful Life
 
Finite-lived intangible assets (1)
  $ 46     5-6 years
Purchased software
    319     10 years
Goodwill
    133     Indefinite
Deferred tax liabilities
    (23 )      
Other assets net of other liabilities assumed
    (2 )      
 
Purchase Price
  $ 473          
 
 
(1)   Includes customer relationships and trade names.
The excess purchase price over the estimated value of the net tangible and identifiable intangible assets was recorded as goodwill. The allocation of a significant portion of the purchase price to goodwill was predominantly due to the intangible assets that are not separable, such as assembled workforce and going concern.
The pro forma effects of the acquisitions to the Company’s revenues and results of operations during fiscal year 2010 were considered immaterial, both individually and in the aggregate.
The Company had approximately $72 million and $74 million of accrued acquisition-related costs as of June 30, 2010 and March 31, 2010, respectively. Approximately $64 million of the accrued acquisition related costs at June 30, 2010 and March 31, 2010, related to purchase price amounts withheld subject to indemnification protections.
Acquisition-related costs are comprised of employee costs, duplicate facilities and other acquisition-related costs that are incurred as a result of the Company’s prior period acquisitions.
NOTE 13 -- DIVESTITURES
NOTE M — DIVESTITURES
Discontinued Operations: In June 2010, the Company sold its Information Governance business, consisting primarily of the CA Records Manager and CA Message Manager software offerings and related professional services, for approximately $19 million to Autonomy. The loss from discontinued operations of approximately $6 million included in the Company’s Consolidated Statement of Operations for the period ended June 30, 2010 consists of a loss from operations of approximately $1 million, net of taxes of approximately $1 million, and a loss upon disposal of approximately $5 million, inclusive of taxes of approximately $4 million.

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CA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(unaudited)
The Information Governance business results for the three months ended June 30, 2010 and 2009 are summarized as follows:
                 
    For the Three Months     For the Three Months  
    Ended June 30, 2010     Ended June 30, 2009  
    (in millions)  
Subscription and maintenance revenue
  $ 2     $ 5  
Professional services
    1       1  
 
           
Total revenue
  $ 3     $ 6  
 
           
 
               
Loss upon disposal of discontinued operation, inclusive of taxes
  $ 5     $  
Loss from discontinued operation, net of taxes
  $ 1     $  

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Item 2:
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statement
This Quarterly Report on Form 10-Q (Form 10-Q) contains certain forward-looking information relating to CA, Inc. (the “Company,” “Registrant,” “CA,” “we,” “our,” or “us”), that is based on the beliefs of, and assumptions made by, our management as well as information currently available to management. When used in this Form 10-Q, the words “anticipate,” “believe,” “estimate,” “expect” and similar expressions are intended to identify forward-looking information. Such information includes, for example, the statements made in this Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A), but also appears in other parts of this Form 10-Q. This forward-looking information reflects our current views with respect to future events and is 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 this Form 10-Q and the Company’s other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should our assumptions prove incorrect, actual results may vary materially from those described in this Form 10-Q as anticipated, believed, estimated, or expected. We do not intend to update these forward-looking statements, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. This MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes to the financial statements. References in this Form 10-Q to fiscal 2010 and fiscal 2009 are to our fiscal years ended on March 31, 2010 and 2009, respectively.
OVERVIEW
We are the leading independent enterprise IT management software and service company with deep expertise across IT environments — from mainframe and physical to virtual and cloud. We develop and deliver software and services that help organizations manage and secure their IT infrastructures and deliver more flexible IT services. This allows companies to more effectively and efficiently respond to business needs. We address virtually all of the components of the computing environment, including people, information, processes, systems, networks, applications and databases, regardless of the hardware

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Item 2:
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
or software customers are using. We have a broad portfolio of software products that address our customers’ needs with a specific focus on service management and assurance; mainframe; project and portfolio management; security (identity and access management); virtualization and automation; and cloud computing. We deliver our products on-premise or, for certain products, via Software-as-a-Service (SaaS).
We license our products worldwide. We service companies across most major industries worldwide, including banks, insurance companies, other financial services providers, governmental agencies, manufacturers, technology companies, retailers, educational institutions and health care institutions. These customers typically maintain IT infrastructures that are both complex and central to their objectives for operational excellence.
We offer our software products and solutions directly to our customers through our direct sales force and indirectly through global systems integrators, managed service providers, technology partners, value-added resellers, exclusive representatives and distributors and volume partners.
For further discussion of our business and business model, see our Annual Report on Form 10-K for the fiscal year ended March 31, 2010 (the 2010 Form 10-K). For further discussion of our Critical Accounting Policies and Business Practices, see “Critical Accounting Policies and Business Practices.”

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Item 2:
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
QUARTERLY UPDATE
    In June 2010, the Company sold its Information Governance business, which consisted primarily of the CA Records Manager and CA Message Manager software offerings, to Autonomy Corporation plc (Autonomy) for approximately $19 million.
 
    In June 2010, the Company contributed capital and technology to Watermark Medical, LLC, a privately-held medical products and service company that currently services the sleep-disorder and breathing market. The investment represented the Company’s entry into the emerging SaaS based healthcare cloud market.
 
    In June 2010, to better align the Company with our target markets, we 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 us to deliver even greater customer service and product innovation. The Company appointed David C. Dobson as Executive Vice President and Group Executive, Customer Solutions Group, George J. Fischer as Executive Vice President and Group Executive, Worldwide Sales and Operations, and Ajei S. Gopal as Executive Vice President, Technology and Development.
 
    In May 2010, the Company’s Board of Directors approved a new stock repurchase program that authorizes the Company to buy up to $500 million of its common stock.
 
    In May 2010, the Company held CA World, its 14 th user conference, in Las Vegas, at which it officially announced its brand name change to CA Technologies. The Company also unveiled CA Cloud-Connected Management Suite, which, will address the emerging challenges presented by the cloud.
 
    In May 2010, Arthur F. Weinbach was appointed as the Company’s non-executive chairman of the Board. Mr. Weinbach succeeds William E. McCracken, who became the Company’s Chief Executive Officer in January 2010.
 
    In April 2010, the Company attained the International Organization for Standardization (ISO)/IEC 20000-1:2005 and ISO/IEC 27001:2005 certifications for its Global IT Operations demonstrating leadership in IT service management and information security.

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Item 2:
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
PERFORMANCE INDICATORS
Management uses several quantitative performance indicators to assess our financial results and condition. Following is a summary of the principal quantitative performance indicators that management uses to review performance:
                                 
    The First Quarter            
    of Fiscal           Percent
    2011   2010 (1)   Change   Change
    (dollars in millions)
Total revenue
  $ 1,091     $ 1,044     $ 47       5 %
Subscription and maintenance revenue
  $ 961     $ 941     $ 20       2 %
Net income
  $ 217     $ 195     $ 22       11 %
Cash provided by operating activities
  $ 117     $ 262     $ (145 )     (55 )%
Total bookings
  $ 750     $ 1,192     $ (442 )     (37 )%
Subscription and maintenance bookings
  $ 637     $ 1,086     $ (449 )     (41 )%
Weighted average subscription and maintenance license agreement duration in years
    2.92       4.21       (1.29 )     (31 )%
Annualized subscription and maintenance bookings
  $ 218     $ 258     $ (40 )     (16 )%
                                         
            Change       Change
    June 30,   March 31,   From   June 30,   From Prior
    2010   2010 (1)   Year End   2009   Year Quarter
    (in millions)
Cash and cash equivalents
  $ 2,476     $ 2,583     $ (107 )   $ 2,978     $ (502 )
Total debt
  $ 1,558     $ 1,545     $ 13     $ 1,919     $ (361 )
 
                                       
Total expected future cash collections from committed contracts (2)
  $ 5,104     $ 5,547     $ (443 )   $ 5,019     $ 85  
Total revenue backlog (2)
  $ 7,704     $ 8,193     $ (489 )   $ 7,709     $ (5
 
(1)   Previously reported information has been reclassified to exclude the discontinued operations sold to Autonomy where applicable.
 
(2)   Refer to the discussion in the “Liquidity and Capital Resources” section of this MD&A for additional information on expected future cash collections from committed contracts, billings backlog and revenue backlog.
Analyses of our performance indicators, including general trends, can be found in the “Results of Operations” and “Liquidity and Capital Resources” sections of this MD&A.
Subscription and Maintenance Revenue — Subscription and maintenance revenue is the amount of revenue recognized ratably during the reporting period from: (i) subscription license agreements that were in effect during the period, generally including maintenance that is bundled with and not separately identifiable from software usage fees or product sales, (ii) maintenance agreements associated with providing customer technical support and access to software fixes and upgrades that are separately identifiable from software usage fees or product sales, and (iii) license agreements bundled with additional products, maintenance or professional services for which Vendor Specific Objective Evidence (VSOE) has not been established. These amounts include the sale of products directly by us, as well as by distributors and volume partners, value-added resellers and exclusive representatives to end-users, where the

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contracts incorporate the right for end-users to receive unspecified future software products, and other contracts entered into in close proximity or contemplation of such agreements.
Total Bookings — Total bookings includes the incremental value of all subscription, maintenance and professional service contracts and software fees and other contracts entered into during the reporting period.
Subscription and Maintenance Bookings — Subscription and maintenance bookings is the aggregate incremental amount we expect to collect from our customers over the terms of the underlying subscription and maintenance agreements entered into during a reporting period. These amounts include the sale of products directly by us and may include additional products, services or other fees for which we have not established VSOE. Subscription and maintenance bookings also includes indirect sales by distributors and volume partners, value-added resellers and exclusive representatives to end-users, where the contracts incorporate the right for end-users to receive unspecified future software products, and other contracts without these rights entered into in close proximity or contemplation of such agreements. These amounts are expected to be recognized ratably as subscription and maintenance revenue over the applicable term of the agreements. Subscription and maintenance bookings excludes the value associated with certain perpetual licenses, license-only indirect sales, and professional services arrangements.
The license and maintenance agreements that contribute to subscription and maintenance bookings represent binding payment commitments by customers over periods that range generally from three to five years on a weighted average basis, although in certain cases customer commitments can be for longer or shorter periods. These current period bookings are often renewals of prior contracts that also had various durations, usually from three to five years. The amount of new subscription and maintenance bookings recorded in a period is affected by the volume, duration and value of contracts renewed during that period. Our subscription and maintenance bookings typically increases in each consecutive quarter during a fiscal year, with the first quarter having the least bookings and the fourth quarter having the most bookings. However, subscription and maintenance bookings may not always follow the pattern of increasing in consecutive quarters during a fiscal year, and the quarter-to-quarter differences in subscription and maintenance bookings may vary. Given the varying durations of the contracts being renewed, year-over-year comparisons of bookings are not always indicative of the overall bookings trend. We believe our revenue backlog is our best indicator of future revenue due to the high percentage of our revenue that is recognized from license agreements that are already committed and being recognized ratably.
Additionally, period-to-period changes in subscription and maintenance bookings do not necessarily correlate to changes in cash receipts. The contribution to current period revenue from subscription and maintenance bookings from any single license or maintenance agreement is relatively small, since revenue is recognized ratably over the applicable term for these agreements.
Weighted Average Subscription and Maintenance License Agreement Duration in Years — The weighted average subscription and maintenance license agreement duration in years reflects the duration of all subscription and maintenance agreements executed during a period, weighted by the total contract value of each individual agreement.
Annualized Subscription and Maintenance Bookings — Annualized subscription and maintenance bookings is an indicator that normalizes the bookings recorded in the current period to account for contract length. It is calculated by dividing the total value of all new subscription and maintenance license agreements entered into during a period by the weighted average subscription and license agreement duration in years for all such subscription and maintenance license agreements recorded during the same period.
Total Revenue Backlog — Total revenue backlog represents the aggregate amount we expect to recognize as revenue in the future as either subscription and maintenance revenue, professional services revenue or software fees and other revenue associated with contractually committed amounts billed or to be billed as of the balance sheet date. Total revenue backlog is composed of amounts recognized as liabilities in our Condensed Consolidated Balance Sheets as deferred revenue (billed or collected) as well as unearned amounts yet to be billed under subscription and maintenance and software fees and other agreements. Classification of amounts as current and non-current depends on when such amounts are expected to be earned and therefore

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recognized as revenue. Amounts that are expected to be earned and therefore recognized as revenue in 12 months or less are classified as current, while amounts expected to be earned in greater than 12 months are classified as non-current. The portion of the total revenue backlog that relates to subscription and maintenance agreements is recognized as revenue evenly on a monthly basis over the duration of the underlying agreements and is reported as subscription and maintenance revenue in our Condensed Consolidated Statements of Operations.
“Deferred revenue (billed or collected)” is composed of: (i) amounts received from customers in advance of revenue recognition, (ii) amounts billed but not collected for which revenue has not yet been earned, and (iii) amounts received in advance of revenue recognition from financial institutions where we have transferred our interest in committed installments (referred to as “Financing obligations and other” in Note K, “Deferred Revenue” in the Notes to our Condensed Consolidated Financial Statements).
RESULTS OF OPERATIONS
The following table presents changes in the line items on our Condensed Consolidated Statements of Operations for the first quarter of fiscal 2011 and 2010 measured by Dollar Change, Percentage of Dollar Change, and Percentage of Total Revenue. These comparisons of past financial results are not necessarily indicative of future results.
                                                 
    First Quarter of Fiscal 2011 compared with First Quarter Fiscal 2010
                            Percentage    
                    Dollar   of   Percentage of
                    Change   Dollar   Total
                    2011/   Change   Revenue
    2011   2010 (1)   2010   2011/2010   2011   2010
    (dollars in millions)                        
Revenue
                                               
Subscription and maintenance revenue
  $ 961     $ 941     $ 20       2 %     88 %     90 %
Professional services
    78       70       8       11       7       7  
Software fees and other
    52       33       19       58       5       3  
     
Total revenue
    1,091       1,044       47       5       100       100  
     
Expenses
                                               
Costs of licensing and maintenance
    77       66       11       17       7       6  
Costs of professional services
    71       66       5       8       7       6  
Amortization of capitalized software costs
    45       33       12       36       4       3  
Selling and marketing
    299       280       19       7       27       27  
General and administrative
    117       110       7       6       11       11  
Product development and enhancements
    128       117       11       9       12       11  
Depreciation and amortization of other intangible assets
    44       38       6       16       4       4  
Other (gains) expenses, net
    (11 )     7       (18 )   NM     (1 )     1  
Restructuring and other
    (3 )     2       (5 )   NM            
     
Total expenses before interest and income taxes
    767       719       48       7       70       69  
     
Income before interest and income taxes
    324       325       (1 )           30       31  
Interest expense, net
    13       17       (4 )     (24 )     1       2  
     
Income before income taxes
    311       308       3       1       29       30  
Income tax expense
    88       113       (25 )     (22 )     8       11  
     
Income from continuing operations
    223       195       28       14       20       19  
     
Loss from discontinued operations
    6             6             (1 )      
     
Net Income
  $ 217     $ 195     $ 22       11 %     20 %     19 %
 
Note — Amounts may not add to their respective totals due to rounding.
 
(1)   Previously reported information has been reclassified to exclude the discontinued operations sold to Autonomy.

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Bookings
Total Bookings
For the first quarter of fiscal 2011 and 2010, total bookings were $750 million and $1,192 million, respectively. The decrease in bookings was mainly attributable to the decrease in subscription and maintenance bookings, as described further below.
Subscription and Maintenance Bookings
For the first quarter of fiscal 2011 and 2010, we added subscription and maintenance bookings of $637 million and $1,086 million, respectively. The decrease in subscription and maintenance bookings was primarily attributable to lower scheduled contract renewals during the first quarter of fiscal 2011. Generally, quarters with smaller renewal inventories result in a lower level of bookings not only because renewal bookings will be less but because renewals remain an important selling opportunity for new products. The renewal portfolio is weighted more heavily towards the second half of fiscal 2011. Thus, we would expect higher levels of bookings in the second half of fiscal 2011 as compared with the first half of fiscal 2011. Currently, we expect total fiscal 2011 renewals to be slightly lower than total fiscal 2010 renewals. During the first quarter of fiscal 2011, we renewed a total of 6 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $188 million. During the first quarter of fiscal 2010, we renewed a total of 13 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $634 million.
For the first quarter of fiscal 2011, annualized subscription and maintenance bookings decreased $40 million from the prior year period to $218 million. The weighted average subscription and maintenance duration in years decreased to 2.92 from 4.21 in the prior year period. This decrease was primarily attributable to the lower amount of scheduled contract renewals in the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010 and by a higher percentage of new product transactions that generally are for a shorter duration than renewals of existing contracts. In the first quarter of fiscal 2010 several contract extensions were executed with terms greater than four and one half years, four of which had a combined incremental contract value of approximately $465 million. Three of these four contracts were with managed service providers, who traditionally extend contracts for longer than average lengths.
Revenue
Total Revenue
As more fully described below, the increase in total revenue in the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010 was primarily attributable to revenue associated with our acquisition of NetQoS, Inc., Nimsoft AS and 3Tera, Inc. (our fiscal 2010 acquisitions), which occurred during the second half of fiscal 2010, a favorable foreign exchange effect of $15 million and an increase in professional services revenue.
Price changes do not have a material impact on revenue in a given period as a result of our ratable subscription model.
Subscription and Maintenance Revenue
The increase in subscription and maintenance revenue for the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010 was primarily due to a favorable foreign exchange effect of $13 million.
Professional Services
Professional services revenue increased in the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010, due to the increased execution of engagements under service contracts during the first quarter of fiscal 2011 and an increase in revenue associated with our fiscal 2010 acquisitions, which occurred during the second half of fiscal 2010.

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Software Fees and Other
Software fees and other revenue primarily consists of revenue that is recognized on an up-front basis. This includes revenue generated through transactions with distributors and volume partners, value-added resellers and exclusive representatives (sometimes referred to as our “indirect” or “channel” revenue) and certain revenue associated with products sold on an up-front basis. Software fees and other revenue increased for the first quarter of fiscal 2011 as compared with the first quarter of fiscal 2010 primarily due to a $19 million increase in revenue associated with acquired new products and existing application management products sold on an up-front basis. Approximately $9 million of these revenues were primarily from products acquired from one of our fiscal 2010 acquisitions, which occurred during the second half of fiscal 2010.
Total Revenue by Geography
The following table presents the revenue earned from the United States and international geographic regions and corresponding percentage changes for the first quarter of fiscal 2011 and 2010, respectively. These comparisons of financial results are not necessarily indicative of future results.
                                                 
    First Quarter of Fiscal ,     Dollar     Percentage  
    2011     %     2010 (1)     %     Change     Change  
                                    (dollars in millions)  
United States
  $ 624       57 %   $ 580       56 %   $ 44       8 %
International
    467       43 %     464       44 %     3       1 %
 
                                     
 
  $ 1,091       100 %   $ 1,044       100 %   $ 47       5 %
 
                                     
 
(1)   Previously reported information has been reclassified to exclude the discontinued operations sold to Autonomy.
Revenue in the United States increased by $44 million, or 8%, for the first quarter of fiscal 2011 primarily due to higher subscription revenue resulting from subscription licenses executed in prior periods and higher software fees and other revenue, as described above. International revenue increased by $3 million, or 1%, for the first quarter of fiscal 2011 as compared with the first quarter of fiscal 2010. Excluding a favorable foreign exchange effect of $15 million, international revenue would have decreased $12 million, primarily attributable to the decrease in business in the Asia Pacific and Japan Region.
Expenses
Costs of Licensing and Maintenance
Costs of licensing and maintenance include technical support, royalties, and other manufacturing and distribution costs. The increase in costs of licensing and maintenance for the first quarter of fiscal 2011 as compared with the first quarter of fiscal 2010 was primarily due to a $7 million increase in support and manufacturing costs associated with our fiscal 2010 acquisitions, which occurred during the second half of fiscal 2010, and an increase in royalty fees of $4 million.
Costs of Professional Services
Costs of professional services consist primarily of our personnel-related costs associated with providing professional services and training to customers. For the first quarter of fiscal 2011, the costs of professional services increased as compared with the prior year period primarily due to increased business activity. As a result of the increase in revenues, margins on professional services increased to 9% in the first quarter of fiscal 2011 as compared with 6% in the first quarter of fiscal 2010.
Amortization of Capitalized Software Costs
Amortization of capitalized software costs consists of the amortization of both purchased software and internally generated capitalized software development costs. Internally generated capitalized software development costs relate to new products and significant enhancements to existing software products that have reached the technological feasibility stage.
The increase in amortization of capitalized software costs for the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010 was primarily due to the increase in activities relating to projects that have reached technological feasibility in recent periods.

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Selling and Marketing
Selling and marketing expenses include the costs relating to our sales force, our channel partners, our corporate and business marketing and our customer training programs. The increase in selling and marketing expenses for the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010 was primarily due to promotion expenses of $14 million attributable to CA World, our flagship customer and partner trade show, which occurred in the first quarter of fiscal 2011. The previous CA World event occurred during the third quarter of fiscal 2009.
General and Administrative
General and administrative expenses include the costs of corporate and support functions, including our executive leadership and administration groups, finance, legal, human resources, corporate communications and other costs such as provisions for doubtful accounts. For the first quarter of fiscal 2011, general and administrative costs increased as compared with the prior year period primarily due to the costs associated with our fiscal 2010 acquisitions, which occurred during the second half of fiscal 2010.
Product Development and Enhancements
For the first quarter of fiscal 2011 and 2010, product development and enhancements expenses represented approximately 12% and 11% of total revenue, respectively. Expenses increased during the first quarter of fiscal 2011 as a result of our continued investment in product development and enhancements for emerging technologies, as well as a broadening of our enterprise product offerings. A portion of these expenses are a result of our fiscal 2010 acquisitions, which occurred during the second half of fiscal 2010.
Depreciation and Amortization of Other Intangible Assets
The increase in depreciation and amortization of other intangible assets for the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010 was primarily due to the increase in depreciation and amortization expenses for acquired assets.
Other (Gains) Expenses, Net
Other (gains) expenses, net includes gains and losses attributable to divested assets, foreign currency exchange rate fluctuations, and certain other items. For the first quarter of fiscal 2011, other (gains) expenses, net included $13 million of gains relating to our foreign exchange derivative contracts, partially offset by $3 million of expenses in connection with litigation claims. For the first quarter of fiscal 2010, other (gains) expenses, net primarily related to $5 million of expenses in connection with litigation claims.
Restructuring and Other
For the first quarter of fiscal 2011, we recorded a credit of approximately $3 million related to the reduction of the severance costs related to the Fiscal 2010 Plan and Fiscal 2007 Plan. The severance portion of the remaining liability balance is included in the “Accrued salaries, wages and commissions” line item on our Condensed Consolidated Balance Sheets. The facilities abandonment portion of the remaining liability balance is included in the “Accrued expenses and other current liabilities” and “Other noncurrent liabilities” line items on our Condensed Consolidated Balance Sheets. Final payment of these amounts is dependent upon settlement with the works councils in certain international locations and our ability to negotiate lease terminations. (Refer to Note H, “Restructuring,” in the Notes to the Condensed Consolidated Financial Statements for additional information.)
Interest Expense, Net
The decrease in interest expense, net, for the first quarter of fiscal 2011 compared with the first quarter of fiscal 2010 was primarily due to the decrease in interest expense resulting from our overall decrease in debt. During the third quarter of fiscal 2010, we reduced our debt outstanding and increased our weighted average maturity, enhancing our capital structure and financial flexibility.
Income Taxes
Income tax expense for the first quarter of fiscal 2011 was $88 million compared with income tax expense of $113 million for the first quarter of fiscal 2010. During the first quarter of fiscal 2011, we had a net tax benefit of $13 million resulting primarily from the resolution of

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uncertain tax positions in respect of our international profile. Our effective income tax rate, excluding the impact of discrete items, for the first quarter of fiscal 2011 of 32.5% was different from the effective income tax rate of 35.7% for the first quarter of fiscal 2010 primarily due to the worldwide mix of estimated consolidated earnings before taxes and additional accruals and changes in estimates related to uncertain tax positions. The results of our international operations, the outcome of tax audits and any other changes in potential tax liabilities may result in additional tax expense or benefit in future periods, which are not considered in our estimated annual effective tax rate. However, we do not currently view any such items as material to the results of operations or financial position.
Liquidity and Capital Resources
Our cash and cash equivalent balances are held in numerous locations throughout the world, with 46% held in our subsidiaries outside the United States at June 30, 2010. Cash and cash equivalents totaled $2,476 million as of June 30, 2010, representing a decrease of $107 million from the March 31, 2010 balance of $2,583 million. Cash and cash equivalents decreased by $107 million during the first quarter of fiscal 2011, which includes a $73 million negative translation effect that foreign currency exchange rates had on cash held outside the United States in currencies other than the U.S. dollar.
Sources and Uses of Cash
Cash provided by operating activities, representing our primary source of liquidity, was $117 million and $262 million for the first quarter of fiscal 2011 and 2010, respectively. For the first quarter of fiscal 2011, accounts receivable decreased by $326 million, excluding the effect of foreign exchange, compared with a decline in the first quarter of fiscal 2010 of $239 million. In the first quarter of fiscal 2011, accrued salaries, wages and commissions decreased $105 million, excluding the effect of foreign exchange, compared with a decrease in the prior year period of $63 million.
Under our subscription and maintenance agreements, customers generally make installment payments over the term of the agreement, often with at least one payment due at contract execution, for the right to use our software products and receive product support, software fixes and new products when available. The timing and actual amounts of cash received from committed customer installment payments under any specific agreement can be affected by several factors, including the time value of money and the customer’s credit rating. Often, the amount received is the result of direct negotiations with the customer when establishing pricing and payment terms. In certain instances, the customer negotiates a price for a single up-front installment payment and seeks its own internal or external financing sources. In other instances, we may assist the customer by arranging financing on their behalf through a third-party financial institution. Alternatively, we may decide to transfer our rights to the future committed installment payments due under the license agreement to a third-party financial institution in exchange for a cash payment. Once transferred, the future committed installments are payable by the customer to the third-party financial institution. Whether the future committed installments have been financed directly by the customer with our assistance or by the transfer of our rights to future committed installments to a third party, such financing agreements may contain limited recourse provisions with respect to our continued performance under the license agreements. Based on our historical experience, we believe that any liability that we may incur as a result of these limited recourse provisions will be immaterial.
Amounts billed or collected as a result of a single installment for the entire contract value, or a substantial portion of the contract value, rather than being invoiced and collected over the life of the license agreement are reflected in the liability section of our Condensed Consolidated Balance Sheets as “Deferred revenue (billed or collected).” Amounts received from either a customer or a third-party financial institution that are attributable to later years of a license agreement have a positive impact on billings and cash provided by operating activities in the current period. Accordingly, to the extent such collections are attributable to the later years of a license agreement, billings and cash provided by operating activities during the license’s later years will be lower than if the payments were received over the license term. We are unable to predict with certainty the amount of cash to be collected from single installments for the entire contract value, or a substantial portion of the contract value, under new or renewed license agreements to be executed in future periods.

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For the first quarter of fiscal 2011, gross receipts related to single installments for the entire contract value, or a substantial portion of the contract value, were $90 million compared with $164 million in the first quarter of fiscal 2010, which included one transaction for which we received an installment in excess of $100 million.
In any quarter, we may receive payments in advance of the contractually committed date on which the payments were otherwise due. In limited circumstances, we may offer discounts to customers to ensure payment in the current period of invoices that have been billed, but might not otherwise be paid until a subsequent period because of payment terms or other factors. Historically, any such discounts have not been material.
Our estimate of the fair value of net installment accounts receivable recorded under the prior business model approximates carrying value. Amounts due from customers under our current business model are offset by deferred revenue related to these license agreements, leaving no or minimal net carrying value on the balance sheets for such amounts. The fair value of such amounts may exceed or be less than this carrying value but cannot be practically assessed since there is no existing market for a pool of customer receivables with contractual commitments similar to those owned by us. The actual fair value may not be known until these amounts are sold, securitized or collected. Although these customer license agreements commit the customer to payment under a fixed schedule, to the extent amounts are not yet due and payable by the customer, the agreements are considered executory in nature due to our ongoing commitment to provide maintenance and unspecified future software products as part of the agreement terms.
We can estimate the total amounts to be billed from committed contracts, referred to as our “Billings backlog,” and the total amount to be recognized as revenue from committed contracts, referred to as our “Revenue backlog.” The aggregate amounts of our billings backlog and trade and installment receivables already reflected on our Condensed Consolidated Balance Sheets represent the amounts we expect to collect in the future from committed contracts.
                         
    June 30,     March 31,     June 30,  
    2010     2010 (1)     2009 (1)  
    (in millions)     (in millions)     (in millions)  
Billings Backlog:
                       
Amounts to be billed — current
  $ 1,913     $ 1,884     $ 1,765  
Amounts to be billed — noncurrent
    2,553       2,686       2,509  
 
                 
Total billings backlog
  $ 4,466     $ 4,570     $ 4,274  
 
                 
 
                       
Revenue Backlog:
                       
Revenue to be recognized within the next 12 months — current
  $ 3,419     $ 3,521     $ 3,358  
Revenue to be recognized beyond the next 12 months — noncurrent
    4,285       4,672       4,351  
 
                 
Total revenue backlog
  $ 7,704     $ 8,193     $ 7,709  
 
                 
 
                       
Deferred revenue (billed or collected)
  $ 3,238     $ 3,616     $ 3,426  
Unearned revenue yet to be billed
    4,466       4,577       4,283  
 
                 
Total revenue backlog
  $ 7,704     $ 8,193     $ 7,709  
 
                 
 
Note:   Revenue Backlog includes deferred subscription and maintenance and professional services revenue
 
(1)   Previously reported information has been reclassified to exclude the discontinued operations sold to Autonomy.
“Revenue to be recognized within the next 12 months – current” increased from the prior year period despite the decrease in our bookings. As discussed above in subscription and maintenance bookings, we saw a significant decrease in weighted average subscription and maintenance duration on a year-over-year basis. This decrease in weighted average subscription and maintenance duration contributed to current revenue backlog growth compared to the prior year period which is an important indicator of future revenue levels. Total revenue backlog decreased from March 31, 2010, primarily because of the lower bookings in the first quarter of fiscal 2011 was attributable to the smaller renewal portfolio as compared to the renewals in the quarter ended March 31, 2010.

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We can also estimate the total cash to be collected in the future from committed contracts, referred to as our “Expected future cash collections” by adding the total billings backlog to the current and non-current Trade and installment accounts receivable, net from our Condensed Consolidated Balance Sheets.
                         
    June 30,     March 31,     June 30,  
    2010     2010 (1)     2009 (1)  
    (in millions)     (in millions)     (in millions)  
Expected future cash collections:
                       
Total billings backlog
  $ 4,466     $ 4,570     $ 4,274  
Trade and installment accounts receivable — current, net
    638       931       662  
Installment accounts receivable — noncurrent, net
          46       83  
 
                 
Total expected future cash collections
  $ 5,104     $ 5,547     $ 5,019  
 
                 
 
(1)   Previously reported information has been reclassified to exclude the discontinued operations sold to Autonomy.
In any fiscal year, cash generated by operating activities typically increases in each consecutive quarter throughout the fiscal year, with the fourth quarter being the highest and the first quarter being the lowest, which may even be negative. The timing of cash generated during the fiscal year is affected by many factors, including the timing of new or renewed contracts and the associated billings, as well as the timing of any customer financing or transfer of our interest in such contractual installments. Other factors that influence the levels of cash generated throughout the quarter can include the level and timing of expenditures.
Cash Generated by Operating Activities
                         
    First Quarter of Fiscal     Change  
(in millions)   2011     2010     2011/ 2010  
Cash collections from billings (1)
  $ 1,138     $ 1,255     $ (117 )
Vendor disbursements and payroll (1)
    (890 )     (846 )     (44 )
Income tax (payments) receipts, net
    (87 )     (120 )     33  
Other disbursements, net (2)
    (44 )     (27 )     (17 )
 
                 
Cash generated by operating activities
  $ 117     $ 262     $ (145 )
 
                 
 
(1)   Amounts include VAT and sales taxes.
 
(2)   Amounts include interest, restructuring and miscellaneous receipts and disbursements.
Operating Activities:
Cash generated by operating activities for the first quarter of fiscal 2011 was $117 million, representing a decrease of $145 million compared with the first quarter of fiscal 2010. The decrease was driven primarily by lower collections of $117 million, mostly due to a $74 million decrease in single-installment receipts. Vendor disbursements and payroll increased $44 million in the first quarter of fiscal 2011 as compared with the first quarter of fiscal 2010, primarily attributable to personnel related costs associated with our fiscal 2010 acquisitions.
Investing Activities:
Cash used in investing activities for the first quarter of fiscal 2011 was $76 million compared with $67 million for the first quarter of fiscal 2010. The increase in cash used in investing activities was primarily due to the increase in cash paid for acquisitions that occurred in the first quarter of fiscal 2011 as compared with the first quarter of fiscal 2010 and a $15 million equity investment in Watermark Medical, LLC, a privately-held medical products and services company. These increases were partially offset by the proceeds received from the sale of our Information Governance business to Autonomy Corporation plc.

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Financing Activities:
Cash used in financing activities for the first quarter of fiscal 2011 was $75 million compared with $22 million in the first quarter of fiscal 2010. The increase in cash used in financing activities was primarily due to the repurchase of treasury shares of $55 million during the first quarter of fiscal 2011.
Debt Obligations
As of June 30, 2010 and March 31, 2010, our debt obligations consisted of the following:
                                 
    June 30, 2010     March 31, 2010  
    Maximum     Outstanding     Maximum     Outstanding  
    Available     Balance     Available     Balance  
    (in millions)  
2008 Revolving Credit Facility (expires August 2012)
  $ 1,000     $ 250     $ 1,000     $ 250  
5.375% Senior Notes due November 2019
          750             750  
6.125% Senior Notes due December 2014
          518             501  
International line of credit
    25             25        
Capital lease obligations and other
          40             44  
 
                           
Total
          $ 1,558             $ 1,545  
Our debt obligations at June 30, 2010 remain unchanged from March 31, 2010, except for the fair value adjustment of $17 million relating to our interest rates swaps on our 6.125% Senior Notes Due December 2014.
For additional information concerning our debt obligations, refer to our Consolidated Financial Statements and Notes thereto included in our 2010 Form 10-K.
Other Matters
As of June 30, 2010, our senior unsecured notes were rated Baa3, BBB, and BBB by Moody’s Investors Service (Moody’s), Standard and Poor’s (S&P) and Fitch Ratings (Fitch), respectively. In July 2010, Fitch upgraded our rating to BBB+.
The outlook on these unsecured notes is stable, positive, and stable by Moody’s, S&P and Fitch, respectively.
Peak borrowings under all debt facilities during the first quarter of fiscal 2011 totaled $1,558 million, with a weighted average interest rate of 5%.
As of June 30, 2010, we remained authorized to purchase an aggregate amount of up to $460 million of additional common shares under our $500 million stock repurchase program that was approved by our Board of Directors in May 2010.
We expect that existing cash, cash equivalents, the availability of borrowings under existing and renewable credit lines, and cash expected to be provided from operations will be sufficient to meet ongoing cash requirements. We expect our long-standing history of providing extended payment terms to our customers to continue.
We expect to use existing cash balances and future cash generated from operations to fund capital spending, including our continued investment in our enterprise resource planning implementation, future acquisitions and financing activities such as the repayment of our debt balances as they mature, the payment of dividends, and the potential repurchase of shares of common stock in accordance with any plans approved by our Board of Directors.

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Effect of Exchange Rate Changes
There was a $73 million unfavorable impact to our cash balances in the first quarter of fiscal 2011 predominantly due to the strengthening of the U.S. dollar against the euro, the Australian dollar, the British pound and the Brazilian real of 9%, 8%, 2% and 1%, respectively.
There was a $93 million favorable impact to our cash balances in the first quarter of fiscal 2010 predominantly due to the weakening of the U.S. dollar against the euro, the Australian dollar, the British pound and the Brazilian real of 6%, 16%, 15% and 19%, respectively.
CRITICAL ACCOUNTING POLICIES AND BUSINESS PRACTICES
The preparation of financial statements in accordance with generally accepted accounting principles requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. We base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances. Our estimates form the basis for making judgments about amounts and timing of revenue and expenses, the carrying values of assets and the recorded amounts of liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and such estimates may change if the underlying conditions or assumptions change. Information with respect to our critical accounting policies that we believe could have the most significant effect on our reported results or require subjective or complex judgments by management is contained in our 2010 Form 10-K under Management’s Discussion and Analysis of Financial Condition and Results of Operations. We believe that at June 30, 2010, there has been no material change to this information.
Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to a variety of risks, including foreign currency exchange rate fluctuations, interest rate changes and changes in the market value of our investments. In the normal course of business, we employ established policies and procedures to manage these risks including the use of derivative instruments. There have been no material changes in our financial risk management strategy or our portfolio management strategy, which is described in our 2010 Form 10-K, subsequent to March 31, 2010.
Item 4: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of the end of the period covered by this quarterly report.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Refer to Note J, “Commitments and Contingencies,” in the Notes to the Condensed Consolidated Financial Statements for information regarding certain legal proceedings, the contents of which are herein incorporated by reference.
Item 1A. RISK FACTORS
Current and potential stockholders should consider carefully the risk factors described in more detail in our 2010 Form 10-K. We believe that as of June 30, 2010, there has been no material change to this information. Any of these factors, or others, many of which are beyond our control, could materially adversely affect our business, financial condition, operating results, cash flow and stock price.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table sets forth, for the months indicated, our purchases of common stock in the first quarter of fiscal year 2011:
ISSUER PURCHASES OF EQUITY SECURITIES
                                 
                            Approximate
                    Total Number   Dollar Value of
                    of Shares   Shares that
                    Purchased as   May Yet Be
    Total Number   Average   Part of Publicly   Purchased Under
    of Shares   Price Paid   Announced Plans   the Plans
Period   Purchased   per Share   or Programs   or Programs
    (dollars in thousands, except average price paid per share)
April 1, 2010 - April 30, 2010
    832,600     $ 23.44       832,600     $  
May 1, 2010 - May 31, 2010
    525,000     $ 19.96       525,000     $ 489,523  
June 1, 2010 - June 30, 2010
    1,514,113     $ 19.59       1,514,113     $ 459,866  
 
                               
Total
    2,871,713               2,871,713          
 
                               
During April 2010, we completed the stock repurchase program of $250 million authorized by our Board of Directors on October 29, 2008, by repurchasing approximately 0.8 million shares of our common stock for approximately $19 million.
On May 12, 2010, our Board of Directors approved a stock repurchase program that authorizes us to acquire up to $500 million of our common stock. We will fund the program with available cash on hand and repurchase shares on the open market from time to time based on market conditions and other factors.
Under the new program, we repurchased approximately 2.0 million shares of our common stock for approximately $40 million, of which, approximately $36 million was settled through cash payment as of June 30, 2010.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. REMOVED AND RESERVED
Item 5. OTHER INFORMATION
None.

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Item 6. EXHIBITS
Regulation S-K
Exhibit Number
         
3.1
  Amended and Restated Certificate of Incorporation.   Filed as Exhibit 3.3 to the Company’s Current Report on Form 8-K dated March 6, 2006.**
 
       
3.2
  By-Laws of the Company, as amended.   Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated February 23, 2007.**
 
       
10.1*
  Schedules A, B, and C (as amended) to CA, Inc. Change in Control Severance Policy.   Filed herewith.
 
       
10.2*
  Employment Agreement, dated June 23, 2010, between the Company and David C. Dobson.   Filed herewith.
 
       
12.1
  Statement of Ratio of Earnings to Fixed Charges.   Filed herewith.
 
       
15
  Accountants’ acknowledgment letter.   Filed herewith.
 
       
31.1
  Certification of the Principal Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.   Filed herewith.
 
       
31.2
  Certification of the Principal Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.   Filed herewith.
 
       
32
  Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002.   Filed herewith.
 
       
 
*   Management contract or compensatory plan or arrangement
 
**   Incorporated herein by reference.

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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 thereunto duly authorized.
         
  CA, INC.
 
 
  By:   /s/ William E. McCracken    
    William E. McCracken   
    Chief Executive Officer   
 
     
  By:   /s/ Nancy E. Cooper    
    Nancy E. Cooper   
    Executive Vice President and
Chief Financial Officer 
 
 
Dated: July 23, 2010

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Exhibit 10.1
CA, Inc. Change in Control Severance Policy
(Amended and Restated Effective September 10, 2008)
(Schedules as of June 25, 2010)
Schedule A
(2.99 Multiple)
Chief Executive Officer (William E. McCracken)
Executive Vice President and Chief Financial Officer (Nancy E. Cooper)
Executive Vice President and Group Executive, Customer Solutions Group (David C. Dobson)
Executive Vice President and Group Executive, Worldwide Sales and Operations (George J. Fischer)
[Employees may be added or eliminated from time to time]
Schedule B
(2.00 Multiple)
Executive Vice President, Risk, and Chief Administrative Officer (Phillip J. Harrington)
Executive Vice President and General Counsel (Amy Fliegelman Olli)
[Employees may be added or eliminated from time to time]
Schedule C
(1.00 Multiple)
Executive Vice President, Global Human Resources (Andrew Goodman)
Executive Vice President, Development and Technology (Ajei S. Gopal)
Executive Vice President, Corporate Strategy (Jacob Lamm)
Corporate Controller (Richard J. Beckert)
[Employees may be added or eliminated from time to time]

 

Exhibit 10.2
Execution Copy
EMPLOYMENT AGREEMENT
          This Employment Agreement, dated as of June 23, 2010, (the “ Effective Date ”) entered into by and between CA, Inc. (the “ Company ”) and David Dobson (the “ Employee ”).
     1.  Employment, Duties, Authority and Work Standards . The Company hereby agrees to employ the Employee on the Effective Date as Executive Vice President, Group Executive-Customer Solutions Group, with such duties and responsibilities to be determined by the Company from time to time and the Employee hereby accepts such positions and agrees to serve the Company in such capacities during the Employment Period (as defined below). The Employee shall report directly to the Company’s Chief Executive Officer. The Employee’s duties, responsibilities and authority shall be such duties, responsibilities and authority as are consistent with the above job title and such other duties, responsibilities and authority as the Chief Executive Officer shall from time to time specify. The Employee will (a) serve the Company (and such of its subsidiary companies as the Company may designate) faithfully, diligently and to the best of the Employee’s ability under the direction of the Chief Executive Officer and (b) devote his full working time and best efforts, attention and energy to the performance of his duties to the Company.
     2.  Laws; Other Agreements . The Employee represents that his employment hereunder will not violate any law or duty by which he is bound, and will not conflict with or violate any agreement or instrument to which the Employee is a party or by which he is bound.
     3.  Compensation .
          (a) In consideration of services that the Employee will render to the Company, the Company agrees to pay the Employee, during the Employment Period, the sum of $700,000 per annum (the “ Base Salary ”), payable semi-monthly concurrent with the Company’s normal payroll cycle, subject to annual review by the Compensation and Human Resources Committee of the Board of Directors (the “ Compensation Committee ”).
          (b) In addition to the Base Salary, during the Employment Period, the Employee shall have an opportunity to earn an annual cash bonus (“ Annual Bonus ”) under the Company’s Annual Performance Bonus program in accordance with Section 4.4 of the Company’s 2007 Incentive Plan, as amended and restated, or any successor thereto (the “ Incentive Plan ”). The Employee’s Annual Bonus target for the fiscal year commencing on April 1, 2010 shall equal $700,000, to be pro-rated based on the number days the Employee served the Company during the fiscal year commencing on April 1, 2010. The Employee’s Annual Bonus targeted amount and the other terms and conditions of such Annual Performance Bonus shall be subject to determination and approval of the Compensation Committee. For each fiscal year thereafter the Employee’s Annual Bonus target will be subject to the review and approval of the Compensation Committee.
          (c) In addition, the Employee shall also be eligible to receive a targeted Long-Term Performance Bonus of $2,400,000 for the performance period commencing on April 1, 2010

 


 

under the Company’s Long-Term Performance Bonus program as set forth in Section 4.5 of the Incentive Plan, provided that such targeted amount and the other terms and conditions of such Long-Term Performance Bonus shall be subject to determination and approval of the Compensation Committee in accordance with the terms of the Incentive Plan. For the fiscal year commencing on April 1, 2010 the Employee’s Long Term Performance Bonus shall be pro-rated based on the number days the Employee served the Company during the fiscal year commencing on April 1, 2010. For each fiscal year thereafter the Employee’s Long-Term Performance Bonus target will be subject to the review and approval of the Compensation Committee.
          (d) All payments to the Employee shall be subject to applicable tax withholding.
     4.  Cash Equalization Payment . The Employee shall be entitled to a cash equalization payment equal to $250,000 (the “ Cash Equalization Payment ”) in lieu of forfeited benefits associated with the Employee’s previous employment. The Cash Equalization Payment will be paid to the Employee in two equal installments. The first installment shall be paid to the Employee on the first available payroll following his first month of employment and the second installment will be paid to the Employee on the first available payroll after 6 months of employment with the Company.
     5.  Equity Awards.
(a) As of the Effective Date the Company will grant the Employee 70,000 restricted shares of CA, Inc. common stock (the “ Restricted Stock Award ”) which shall vest in approximately three equal installments on the first, second and third anniversaries of the Effective Date. The Restricted Stock Award is subject to the terms of the Incentive Plan and shall be subject to the approval of the Compensation Committee.
(b) As of the Effective Date the Company will grant the Employee 75,000 options to purchase shares of CA, Inc. common stock with an exercise price equal to fair market value of CA, Inc. common stock on the Effective Date (the “ Option Award ”). The Option Award is an award of non-qualified options which shall vest in approximately three equal installments on the first, second and third anniversaries of the Effective Date. The Option Award is subject to the terms of the Incentive Plan and shall be subject to the approval of the Compensation Committee.
     6.  Termination; Termination Payments. Unless the Employee’s employment shall sooner terminate for any reason pursuant to Section 6 of this Agreement, the “ Employment Period ” shall commence on the Effective Date and shall initially terminate on the three-year anniversary from the Effective Date, except that beginning June 30, 2013 and each anniversary thereafter, the Employment Period will automatically extend for one year unless either the Employee or the Company gives at least 90 days’ advanced written notice of non-extension (a “ Notice of Non-Extension ”). For purposes of this Agreement, “Employment Period” refers to the period of the Employee’s employment that is governed by the terms of this Agreement. Upon either party giving the other a Notice of Non-Extension, the Employment Period will end on June 30th of such year in which notice was given and the Employee’s employment will no longer be subject to the terms of this Agreement.
          (a) In the event that the Employee’s employment is terminated during the Employment Period either (i) by the Employee for Good Reason (as defined in Appendix A) or (ii) by the Company without Cause (as defined in Appendix A), other than as a result of the Employee’s death or disability (within the meaning of the Company’s long-term disability program then in effect), subject to the Employee’s execution, delivery and non-revocation, within fifty-five (55) days following the Termination Date, of a valid and effective release and

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waiver in a form satisfactory to the Company, the Company shall pay the Employee a lump sum cash amount equal to $1,400,000, such lump sum payment to be made no later than the sixtieth (60th) day (or the next following business day if the sixtieth day is not a business day) following the Termination Date. Additionally, the Employee shall be eligible to receive a portion of any outstanding Annual Bonus, provided that such payment (i) shall be made only after the end of the applicable performance cycle, (ii) shall be based upon the actual performance of the Company achieved as determined in the sole discretion of the Company (provided, however, that negative discretion shall only be applied if, and to the extent, it is applied generally to the executive management team) and (iii) shall be pro-rated for the portion of the performance period that has been completed by the Employee through the Termination Date (provided, however, that nothing herein shall be construed to accelerate the vesting of any Performance Share Award). The Employee’s unvested Equity Awards granted pursuant to Sections 5(a) and 5(b) of this Agreement shall accelerate and vest immediately upon the Termination Date. Notwithstanding the foregoing, in accordance with the terms of the Incentive Plan, the Employee will have ninety (90) days from the Termination Date to exercise any vested but unexercised Stock Option Awards as of such date.
          (b) Except as expressly provided herein, upon the termination of the Employee’s employment for any reason, the rights of the Employee with respect to any shares of restricted stock or options to purchase shares of CA, Inc. common stock held by the Employee as of the Termination Date, shall be subject to the applicable rules of the plan or agreement under which such restricted stock or options were granted as they exist from time to time. In addition, upon the termination of the Employee’s employment for any reason, the Company shall pay to the Employee his Base Salary through the Termination Date. Any vested benefits and other amounts that the Employee is otherwise entitled to receive under any employee benefit plan, policy, practice or program of the Company or any of its affiliates shall be payable in accordance with such employee benefit plan, policy, practice or program as the case may be, provided that the Employee shall not be entitled to receive any other payments or benefits in the nature of severance or termination pay.
          (c) In the event that the Employee resigns other than for Good Reason, is terminated for Cause, dies or becomes disabled (within the meaning of the Company’s long-term disability program then in effect) during the Employment Period, no benefits shall be payable to the Employee under Section 6(a) of this Agreement, but the terms and conditions of Section 6(b) shall remain in effect.
          (d) If the Employee is a participant in the Company’s Change in Control Severance Policy (the “ CIC Severance Policy ”) and a “Change in Control” occurs (as defined therein), any payments and benefits provided in the CIC Severance Policy that the Employee is entitled to will reduce (but not below zero) the corresponding payment or benefit provided under this Agreement. It is the intent of this provision to pay or to provide to the Employee the greater of the two payments or benefits but not to duplicate them.
     7.  Benefits and Perquisites. During the term of the Employee’s employment, the Employee shall be eligible to participate in all retirement, welfare and benefit plans and perquisites generally made available to other senior employees of the Company. For the term of this Agreement, the Company shall provide the Employee with a Company car and driver for the Employee’ commute from home to work in order to help maintain the confidentiality of business matters and to increase productivity when traveling.

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     8.  No Duration of Employment . Notwithstanding anything else contained in this Agreement to the contrary, the Company and the Employee each acknowledge and agree that the Employee’s employment with the Company may be terminated by either the Company upon 60 days’ written notice to the Employee (subject to the provisions of Section 6 of this Agreement) or by the Employee upon 60 days’ written notice to the Company (subject to the provisions of Section 6 of this Agreement), at any time and for any reason, with or without cause; provided that this Agreement may be terminated for Cause immediately upon written notice from the Company to the Employee; and provided further that the Company may determine to waive all or part of the Employee’s 60 days’ notice period at its discretion. In addition, this Agreement shall automatically terminate upon the Employee’s death or disability (determined in accordance with the Company’s practices and policies). Upon termination of the Employee’s employment for any reason whatsoever, the Company shall have no further obligations to the Employee other than those set forth in Section 6 of this Agreement. The effective date of the Employee’s termination of employment shall be referred to herein as the “ Termination Date .”
     9.  General .
          (a) Any notice required or permitted to be given under this Agreement shall be made either:
               (i) by personal delivery to the Employee or, in the case of the Company, to the Company’s principal office (the “ Principal Office ”) located at One CA Plaza, Islandia, New York 11749, Attention: Executive Vice President — Global Human Resources, or
               (ii) in writing and sent by registered mail, postage prepaid, to the Employee’s residence, or, in the case of the Company, to the Company’s Principal Office.
          (b) This Agreement shall be binding upon the Employee and his heirs, executors, assigns, and administrators and shall inure to the benefit of the Company, its successors and assigns and any subsidiary or parent of the Company.
          (c) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles. Any action relating to this Agreement shall be brought exclusively in the state or federal courts of the State of New York, County of Suffolk.
          (d) This Agreement, the Employment and Confidentiality Agreement to be executed by the Employee on or about the Effective Date and the other documents referred to herein represent the entire agreement between the Employee and the Company related to the Employee’s employment and supersede any and all previous oral or written communications, representations or agreements related thereto. This Agreement may only be modified in writing jointly executed by the Employee and a duly authorized representative of the Company. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. However , this Agreement will not be effective until the date it has been executed by both parties.
          (e) The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, and the validity and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not in any way be impaired and shall remain enforceable to the fullest extent permitted by law. In addition, waiver by any party hereto of any breach or default by the

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other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his rights hereunder on any occasion or series of occasions.
          (f) The parties agree that this Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations promulgated thereunder (“ Section 409A ”) or an exemption from Section 409A. In the event that after execution of this Agreement either party makes a determination inconsistent with the preceding sentence, it shall promptly notify the other party of the basis for its determination. The parties agree to renegotiate in good faith the terms of this Agreement at no additional cost to the Company, if the Employee determines that this Agreement as structured would have adverse tax consequences to him under applicable law. To extent that the Employee would otherwise be entitled to any payment under this Agreement or any plan or arrangement of the Company or its affiliates, that constitutes “deferred compensation” subject to Section 409A and that if paid during the six months beginning on the Termination Date would be subject to the Section 409A additional tax because the Employee is a “specified employee” (within the meaning of Section 409A and as determined by the Company), the payment will be paid to the Employee on the earlier of the six-month anniversary of the Termination Date, a change in ownership or effective control of the Company (within the meaning of Section 409A) or the Employee’s death. Similarly, to the extent that the Employee would otherwise be entitled to any benefit (other than a payment) during the six months beginning on the Termination Date that would be subject to the Section 409A additional tax, the benefit will be delayed and will begin being provided on the earlier of the six-month anniversary of the Termination Date, a change in ownership or effective control of the Company (within the meaning of Section 409A) or the Employee’s death. In addition, any payment or benefit due upon a termination of employment that represents a “deferral of compensation” within the meaning of Section 409A shall be paid or provided to the Employee only upon a “separation from service” as defined in Treas. Reg. 1.409A-1(h). To the extent applicable, each severance payment made under this Agreement shall be deemed to be separate payments, amounts payable under Section 6 of this Agreement shall be deemed not to be a “deferral of compensation” subject to Section 409A to the extent provided in the exceptions in Treas. Reg. 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception under subparagraph (iii)) and other applicable provisions of Treas. Reg. 1.409A-1 through 1.409A-6.
          Notwithstanding anything to the contrary in this Agreement or elsewhere, any payment or benefit under this Agreement or otherwise that is exempt from Section 409A pursuant to Treas. Reg. 1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to the Employee only to the extent that the expenses are not incurred, or the benefits are not provided, beyond the last day of the Employee’s second taxable year following the Employee’s taxable year in which the “separation from service” occurs; and provided further that such expenses shall be reimbursed no later than the last day of the Employee’s third taxable year following the taxable year in which the Employee’s “separation from service” occurs. Except as otherwise expressly provided herein, to the extent any expense reimbursement or the provision of any in-kind benefit under this Agreement is determined to be subject to Section 409A of the Code, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other calendar year (except for any life-time or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which the Employee incurred such expenses, and in no event shall any right to reimbursement or

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the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.
CAUTION TO EXECUTIVE: This Agreement affects important rights. DO NOT sign it unless you have read it carefully and are satisfied that you understand it completely .
                     
            CA, INC.    
 
                   
/s/ David Dobson       By:   /s/ Andrew Goodman
             
Name:
  David Dobson           Name:   Andrew Goodman
 
              Title:   Executive Vice President,
 
                  Global Human Resources
Date:
  June 23, 2010           Date:   June 23, 2010

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Appendix A
          For purposes of this Agreement, “ Cause ” means any of the following:
          (1) The Employee’s continued failure, either due to willful action or as a result of gross neglect, to substantially perform his duties and responsibilities to the Company and its affiliates (the “ Group ”) under this Agreement (other than any such failure resulting from the Employee’s incapacity due to physical or mental illness) that, if capable of being cured, has not been cured within thirty (30) days after written notice is delivered to the Employee, which notice specifies in reasonable detail the manner in which the Company believes the Employee has not substantially performed his duties and responsibilities.
          (2) The Employee’s engagement in conduct which is demonstrably and materially injurious to the Group, or that materially harms the reputation or financial position of the Group, unless the conduct in question was undertaken in good faith on an informed basis with due care and with a rational business purpose and based upon the honest belief that such conduct was in the best interest of the Group.
          (3) The Employee’s indictment or conviction of, or plea of guilty or nolo contendere to, a felony or any other crime involving dishonesty, fraud or moral turpitude.
          (4) The Employee’s being found liable in any SEC or other civil or criminal securities law action or entering any cease and desist order with respect to such action (regardless of whether or not he admits or denies liability).
          (5) The Employee’s breach of his fiduciary duties to the Group which may reasonably be expected to have a material adverse effect on the Group. However, to the extent the breach is curable, the Company must give the Employee notice and a reasonable opportunity to cure.
          (6) The Employee’s (i) obstructing or impeding, (ii) endeavoring to influence, obstruct or impede or (iii) failing to materially cooperate with, any investigation authorized by the Board or any governmental or self-regulatory entity (an “ Investigation ”). However, the Employee’s failure to waive attorney-client privilege relating to communications with his own attorney in connection with an Investigation shall not constitute “Cause”.
          (7) The Employee’s purposely withholding, removing, concealing, destroying, altering or by any other means falsifying any material which is requested in connection with an Investigation.
          (8) The Employee’s disqualification or bar by any governmental or self-regulatory authority from serving in the capacity contemplated by this Agreement or his loss of any governmental or self-regulatory license that is reasonably necessary for him to perform his responsibilities to the Group under this Agreement, if (a) the disqualification, bar or loss continues for more than 30 days and (b) during that period the Group uses its good faith efforts to cause the disqualification or bar to be lifted or the license replaced. While any disqualification, bar or loss continues during the Employee’s employment, he will serve in the capacity contemplated by this Agreement to whatever extent legally permissible and, if his employment is not permissible, he will be placed on leave (which will be paid to the extent legally permissible).

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          (9) The Employee’s unauthorized use or disclosure of confidential or proprietary information, or related materials, or the violation of any of the terms of the Employment and Confidentiality Agreement executed by the Employee or any Company standard confidentiality policies and procedures, which may reasonably be expected to have a material adverse effect on the Group and that, if capable of being cured, has not been cured within thirty (30) days after written notice is delivered to the Employee by the Company, which notice specifies in reasonable detail the alleged unauthorized use or disclosure or violation.
          (10) The Employee’s violation of the Group’s (i) Workplace Violence Policy or (ii) policies on discrimination, unlawful harassment or substance abuse.
          For this definition, no act or omission by the Employee will be “willful” unless it is made by the Employee in bad faith or without a reasonable belief that his act or omission was in the best interests of the Group.

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          For purposes of this Agreement, “ Good Reason ” shall mean any of the following:
          (1) Any material and adverse change in the Employee’s level or Executive Vice President title;
          (2) Any material and adverse reduction in the Employee’s authorities or responsibilities other than any isolated, insubstantial and inadvertent failure by the Company that is not in bad faith and is cured promptly on the Employee’s giving the Company notice (and for purposes of clarification, a change in the number of direct reports will not constitute a material and adverse reduction in the Employee’s authorities or responsibilities);
          (3) Any material reduction by the Company in the Employee’s Base Salary or target level of Annual Bonus as set forth in Sections 3(a) and (b), respectively, other than any such reduction that is (i) part of a broad-based salary reduction program for executive officers of the Company that does not exceed 10% or (ii) agreed to by the Employee in writing; or
          (4) The Company’s material breach of this Agreement;
          provided that (A) no alleged action, reduction or breach set forth in (1) through (4) above shall be deemed to constitute “Good Reason” unless such action, reduction or breach remains uncured, as the case may be, after the expiration of thirty (30) days following delivery to the Company from the Employee of a written notice, setting forth such course of conduct deemed by the Employee to constitute “Good Reason”; (B) such written notice must be delivered to the Company within ninety (90) days after the Employee obtains knowledge of such breach constituting “Good Reason”; and (C) the Employee must terminate employment within two years after the Employee obtains knowledge of such breach constituting “Good Reason”. The Company’s placing the Employee on paid leave for up to ninety (90) consecutive days while it is determining whether there is a basis to terminate the Employee’s employment for Cause will not constitute “Good Reason”.

9

Exhibit 12.1
CA, Inc.
STATEMENT OF RATIOS OF EARNINGS TO FIXED CHARGES
(in millions, except ratios)
                                                 
                    Years Ended March 31,                     Three Months Ended  
    2006     2007     2008     2009     2010     June 30, 2010  
     
Earnings available for fixed charges:
                                               
 
                                               
Earnings from continuing operations before income taxes, minority interest and discontinued operations
  $ 98     $ 130     $ 775     $ 1,065     $ 1,171     $ 311  
 
                                               
Add: Fixed charges
    192       229       248       191       162       30  
 
                                               
Less: Minority interest in pre-tax loss of subsidiaries that have not incurred fixed charges
    1                                
     
 
                                               
Total earnings available for fixed charges
  $ 291     $ 359     $ 1,023     $ 1,256     $ 1,333     $ 341  
     
 
                                               
Fixed charges:
                                               
 
                                               
Interest expense(1)
  $ 122     $ 153     $ 169     $ 130     $ 102     $ 21  
Interest portion of rental expense
    70       76       79       61       60       9  
     
 
                                               
Total fixed charges
  $ 192     $ 229     $ 248     $ 191     $ 162     $ 30  
     
 
                                               
RATIOS OF EARNINGS TO FIXED CHARGES
    1.52       1.57       4.13       6.58       8.23       11.37  
 
                                               
Deficiency of earnings to fixed charges
    n/a       n/a       n/a       n/a       n/a       n/a  
 
(1)   Includes amortization of discount related to indebtedness

Exhibit 15
July 23, 2010
CA, Inc.
One CA Plaza
Islandia, New York 11749
Re: Registration Statement No. 333-151619 on Form S-3 and Registration Statement Nos. 333-146173, 333-120849, 333-108665, 333-100896, 333-88916, 333-32942, 333-31284, 333-83147, 333-80883, 333-79727, 333-62055, 333-19071, 333-04801, 333-127602, 333-127601, 333-126273, 33-64377, 33-53915, 33-53572, 33-34607, 33-18322, 33-20797, 2-92355, 2-87495 and 2-79751 on Form S-8.
With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated July 23, 2010 related to our review of interim financial information.
Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.
/s/ KPMG LLP
New York, New York

Exhibit 31.1
CEO CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William E. McCracken, certify that:
1.   I have reviewed this Quarterly Report on Form 10-Q of CA, Inc. for its most recent fiscal quarter;
 
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
         
     
Date: July 23, 2010  /s/ William E. McCracken    
  William E. McCracken   
  Chief Executive Officer   
  CA, Inc.   
 

Exhibit 31.2
CFO CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Nancy E. Cooper, certify that:
1.   I have reviewed this Quarterly Report on Form 10-Q of CA, Inc. for its most recent fiscal quarter;
 
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
         
     
Date: July 23, 2010  /s/ Nancy E. Cooper    
  Nancy E. Cooper   
  Executive Vice President and Chief Financial Officer
CA, Inc. 
 
 

 

Exhibit 32
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the Quarterly Report on Form 10-Q of CA, Inc., a Delaware corporation (the “Company”), for the fiscal quarter ended June 30, 2010 as filed with the Securities and Exchange Commission (the “Report”), each of William E. McCracken, Chief Executive Officer of the Company, and Nancy E. Cooper, Executive Vice President and Chief Financial Officer of the Company, hereby certifies, pursuant to §906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350), that to his or her knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
         
   
/s/ William E. McCracken    
William E. McCracken   
Chief Executive Officer   
July 23, 2010 
 
   
/s/ Nancy E. Cooper    
Nancy E. Cooper   
Executive Vice President and Chief Financial Officer   
July 23, 2010   
 
The foregoing certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that Section. The foregoing certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference.