- Company Meets Fiscal Year 2015
Guidance Metrics
- Fourth Quarter and FY2015 Revenue of
$1.023 Billion and $4.262 Billion, Compared With $1.084 Billion and
$4.412 Billion Last Year, Respectively
- Fourth Quarter and FY2015 GAAP EPS
of $0.33 and $1.82, Compared With $0.23 and $1.96 Last Year,
Respectively
- Fourth Quarter and FY2015 Non-GAAP
EPS of $0.56 and $2.53, Compared With $0.62 and $3.02 Last Year,
Respectively
- Fourth Quarter and FY2015 Cash Flow
From Continuing Operations of $485 Million and $1,030 Million,
Compared With $478 Million and $973 Million Last Year,
Respectively
- Issues FY2016 Outlook
CA Technologies (NASDAQ:CA) today reported financial results for
its fourth quarter and full fiscal year 2015, ended March 31,
2015.
Mike Gregoire, CA Technologies Chief Executive Officer,
said:
"In fiscal year 2015, we focused our efforts on our go-to-market
strategy, introduced new products and strengthened relationships
with our customers. As demonstrated by this quarter’s results,
however, we still have work to do to drive the kind of growth that
our company has the potential to achieve.
"I am convinced that we have set in place the appropriate
strategy to transform CA and return it to growth. We are making
progress in differentiating and building new products that help our
customers succeed in the Application Economy. We have also
significantly improved the underlying efficiency of our
business.
"In fiscal year 2016, we will make the required investments to
drive innovation, while continuing to demonstrate financial
discipline by expanding full year operating margin by two
percentage points to 39 percent*, excluding the impact of any
future material acquisitions.
"Over the medium term, I am confident that we can achieve
sustainable low- to mid-single digit cash flow growth."
*This is a non-GAAP metric. GAAP margin is expected to improve
three percentage points to 30 percent.
FINANCIAL OVERVIEW
(dollars in millions, except share data)
Fourth
Quarter FY15 vs. FY14 Full Year FY15 vs. FY14
FY15 FY14
%Change
%ChangeCC**
FY15 FY14
%Change
%ChangeCC**
Revenue $1,023 $1,084 (6)% (1)% $4,262
$4,412 (3)% (2)% GAAP Income from Continuing
Operations $145 $101 44% 49% $810 $887
(9)% (6)% Non-GAAP Income from Continuing Operations*
$247 $280 (12)% (13)% $1,125 $1,366
(18)% (16)% GAAP Diluted EPS from Continuing
Operations $0.33 $0.23 43% 48% $1.82
$1.96 (7)% (5)% Non-GAAP Diluted EPS from Continuing
Operations* $0.56 $0.62 (10)% (11)% $2.53
$3.02 (16)% (15)% Cash Flow from Continuing
Operations $485 $478 1% 8%
$1,030 $973 6% 9%
* Non-GAAP income and non-GAAP earnings per share are non-GAAP
financial measures, as noted in the discussion of non-GAAP results
below. A reconciliation of non-GAAP financial measures to their
comparable GAAP financial measures is included in the tables
following this news release.
**CC: Constant Currency
REVENUE AND BOOKINGS
Fourth
Quarter
(dollars in millions)
Fourth Quarter FY15 vs.
FY14 FY15
% ofTotal
FY14 % ofTotal
%Change
%ChangeCC**
North America Revenue $682 67% $692 64%
(1)% (1)% International Revenue $341 33% $392
36% (13)% (1)% Total Revenue $1,023
$1,084 (6)% (1)%
North America Bookings $727 68% $762
63% (5)% (2)% International Bookings $342
32% $454 37% (25)% (11)% Total
Bookings $1,069 $1,216
(12)% (5)%
Current Revenue Backlog $3,141
$3,500 (10)% (3)%
Total Revenue Backlog $6,530 $7,639
(15)% (8)%
**CC: Constant Currency
- Total revenue decreased primarily due
to lower subscription and maintenance revenue. In addition, there
was an unfavorable foreign exchange effect on total revenue of $53
million.
- The Company's bookings were affected by
an unfavorable foreign exchange rate and fewer than expected early
renewals, as well as a year-over-year decrease in new product sales
and services engagements.
- The Company executed a total of 19
license agreements with incremental contract values in excess of
$10 million each, for an aggregate contract value of $507 million.
During the fourth quarter of fiscal 2014, the Company executed a
total of 16 license agreements with incremental contract values in
excess of $10 million each, for an aggregate contract value of $456
million.
- The weighted average duration of
subscription and maintenance bookings for the quarter was 3.05
years, compared with 3.15 years for the same period in fiscal
2014.
Full
Year
(dollars in millions)
Full Year FY15 vs. FY14
FY15 % ofTotal FY14
% ofTotal %Change
%ChangeCC**
North America Revenue $2,766 65% $2,820 64%
(2)% (2)% International Revenue $1,496 35%
$1,592 36% (6)% (2)% Total Revenue
$4,262 $4,412 (3)%
(2)%
North America Bookings $2,353 65%
$2,652 60% (11)% (11)% International
Bookings $1,256 35% $1,769 40% (29)%
(23)% Total Bookings $3,609
$4,421 (18)% (15)%
**CC: Constant Currency
- Total revenue decreased primarily due
to lower subscription and maintenance revenue and professional
services revenue. In addition, there was an unfavorable foreign
exchange effect on total revenue of $71 million.
- The Company's total bookings were
affected by a year-over-year decrease in renewals within
subscription and maintenance bookings. Renewals were affected by a
difficult year-over-year comparison that included a four-year
contract renewal with a large systems integrator for more than $300
million in fiscal 2014 and by a lower value of contracts that
renewed prior to their scheduled expiration dates.
- The Company executed a total of 51
license agreements with incremental contract values in excess of
$10 million each, for an aggregate contract value of $1.448
billion. During fiscal 2014, the Company executed a total of 54
license agreements with incremental contract values in excess of
$10 million each, for an aggregate contract value of $1.973
billion.
- The weighted average duration of
subscription and maintenance bookings for fiscal 2015 was 3.24
years, compared with 3.35 years for fiscal 2014.
EXPENSES AND MARGIN
Fourth
Quarter
(dollars in millions)
Fourth Quarter FY15 vs.
FY14 FY15 FY14
%Change
%ChangeCC**
GAAP Operating Expenses Before Interest and Income
Taxes $812 $899 (10)% (5)% Operating Income
Before Interest and Income Taxes $211 $185 14%
18% Operating Margin 21% 17%
Effective Tax Rate 28.2% 40.6%
Non-GAAP* Operating Expenses Before Interest and
Income Taxes $693 $764 (9)% (2)% Operating
Income Before Interest and Income Taxes $330 $320 3%
2% Operating Margin 32% 30%
Effective Tax Rate 23.1% 8.2%
*A reconciliation of non-GAAP financial measures to their
comparable GAAP financial measures is included in the tables
following this news release. Year-over-year non-GAAP results
exclude purchased software and other intangibles amortization,
share-based compensation, capitalization (an add-back) and
amortization of internal software costs, Board approved workforce
rebalancing initiatives and certain other gains and losses. The
results also include gains and losses on hedges that mature within
the quarter, but exclude gains and losses on hedges that do not
mature within the quarter.
**CC: Constant Currency
- GAAP and non-GAAP operating expenses
were favorably affected by foreign exchange.
- GAAP operating expenses in the fourth
quarter fiscal 2014 were affected by $37 million in expenses
associated with the Company's fiscal 2014 rebalancing plan (the
Fiscal 2014 Plan), which resulted in an unfavorable effect of $0.08
per diluted share.
- GAAP and non-GAAP operating expenses
were favorably affected by lower selling and marketing costs and
adversely affected by severance costs.
- GAAP EPS was positively affected by
$0.06 due to a lower effective tax rate.
- Non-GAAP EPS was adversely affected
by $0.11 due to a higher effective tax rate in the fourth
quarter of fiscal 2015. The Company recognized a net benefit of
approximately $181 million in the first quarter of fiscal
2014 which favorably affected the non-GAAP effective tax rate for
the fourth quarter of fiscal 2014. This net discrete tax benefit
was primarily as a result of the resolution of uncertain tax
positions relating to U.S. and non-U.S. jurisdictions.
Full
Year
(dollars in millions)
Full Year FY15 vs. FY14
FY15 FY14 %Change
%ChangeCC**
GAAP Operating Expenses Before Interest and Income
Taxes $3,100 $3,342 (7)% (5)% Operating Income
Before Interest and Income Taxes $1,162 $1,070 9%
9% Operating Margin 27% 24%
Effective Tax Rate 27.4% 12.7%
Non-GAAP* Operating Expenses Before Interest and
Income Taxes $2,665 $2,793 (5)% (2)% Operating
Income Before Interest and Income Taxes $1,597 $1,619
(1)% (1)% Operating Margin 37% 37%
Effective Tax Rate 27.4% 12.7%
*A reconciliation of non-GAAP financial measures to their
comparable GAAP financial measures is included in the tables
following this news release. Year-over-year non-GAAP results
exclude purchased software and other intangibles amortization,
share-based compensation, capitalization (an add-back) and
amortization of internal software costs, Board approved workforce
rebalancing initiatives and certain other gains and losses. The
results also include gains and losses on hedges that mature within
the quarter, but exclude gains and losses on hedges that do not
mature within the quarter.
**CC: Constant Currency
- GAAP and non-GAAP operating expenses
were favorably affected by foreign exchange.
- GAAP operating expenses were favorably
affected by a decrease of $151 million in expenses associated with
the Fiscal 2014 Plan, which resulted in a favorable effect of $0.30
per diluted share.
- GAAP and non-GAAP EPS were adversely
affected by $0.36 and $0.50, respectively, due to a higher tax rate
in fiscal 2015. The Company recognized a net benefit of
approximately $168 million in fiscal 2014, primarily from the
resolution of uncertain tax positions relating to U.S. and non-U.S.
jurisdictions.
SELECTED HIGHLIGHTS
- Corporate announcements during the
fourth quarter include:
- Jeffrey G. Katz, formerly the founding
chairman, president and chief executive officer of Orbitz
Worldwide, Inc., was elected to the Company's Board of
Directors.
- Michael C. Bisignano joined the Company
as executive vice president and general counsel.
- The Company joined the World Economic
Forum’s (WEF) Partnering Against Corruption Initiative (PACI) and
appointed members to the WEF Technology Pioneers Selection
Committee 2015.
- Solutions leadership for Fiscal 2015,
CA is recognized as a Leader by industry analyst firms including
Gartner and Forrester:
- CA Technologies achieved a Leadership
rating in Forrester API Management Wave.*
- CA Technologies positioned as a
Leader in the new Gartner Magic Quadrant for Data Center
Infrastructure Management Tools**
- CA Technologies is positioned as a
Leader in Forrester Wave reports in the Project & Portfolio
Management (PPM) space*
- CA Technologies positioned as a Leader
in the Gartner Magic Quadrant for Integrated IT Portfolio Analysis
Applications*** and rated Strong Positive in the Gartner
Marketscope for IT Project and Portfolio Management Software
Applications**** for three consecutive years each.
- Customer traction for CA Technologies
innovations during fiscal 2015 included:
- A large health insurance company based
in the U.S. selected CA Security solutions to authenticate
application access for employees, business partners and consumer
customers, ensuring that identities of its constituents are
appropriately secured.
- Toyota Finance Australia selected CA
Executive Playbook to help their business have better clarity of
their IT expenditure and align investments with strategic
objectives.
- A large financial services company is
incorporating the full suite of CA Virtualization and Automation
solutions to improve speed and quality of application
production.
- Together with a partner, CA signed a
multi-million dollar contract with a large government entity to
help improve the quality of a high-profile, consumer-facing
healthcare application.
- Tata Sky, India's leading direct
broadcast television provider, selected CA Application Performance
Management, CA Unified Infrastructure Management and CA Workload
Automation.
- A French airline is now working
with CA Service Virtualization to increase the speed and
stability of application updates for their new mobile booking
system.
SEGMENT INFORMATION
Fourth
Quarter
(dollars in millions)
Fourth Quarter FY15 vs.
FY14 Revenue %Change
%ChangeCC**
Operating Margin FY15 FY14
FY15 FY14 Mainframe
Solutions $572 $613 (7)% (2)% 56%
54% Enterprise Solutions $368 $381 (3)%
2% 4% -4% Services $83 $90 (8)%
(3)% -4% 1%
**CC: Constant Currency
- Mainframe Solutions revenue was lower
compared with the year-ago period primarily due to an unfavorable
foreign exchange effect and, to a lesser extent, insufficient
revenue from prior period new sales.
- Enterprise Solutions revenue increased,
excluding the unfavorable foreign exchange effect. Enterprise
Solutions operating margin for the fourth quarter of fiscal 2015
increased compared with the year-ago period primarily driven by a
decrease in selling and marketing expenses.
- Services revenue was lower as a result
of the smaller size and number of services engagements during the
fourth quarter of fiscal 2015. Operating margin for the Company’s
Services segment decreased as a result of an increase in severance
costs.
Full
Year
(dollars in millions)
Full Year FY15 vs. FY14
Revenue %Change
%ChangeCC**
Operating Margin FY15 FY14
FY15 FY14 Mainframe
Solutions $2,392 $2,478 (3)% (2)% 59%
60% Enterprise Solutions $1,519 $1,555 (2)%
(1)% 11% 7% Services $351 $379
(7)% (6)% 3% 6%
**CC: Constant Currency
- Mainframe Solutions revenue decreased
primarily due to insufficient revenue from prior period new sales
to offset the decline in revenue contribution from renewals. In
addition, there was an unfavorable foreign exchange effect of $40
million for fiscal 2015.
- Enterprise Solutions revenue decreased
compared with the year-ago period primarily due to an unfavorable
foreign exchange effect and lower new sales. Enterprise Solutions
operating margin for fiscal 2015 increased compared with the
year-ago period primarily as a result of lower commissions and
personnel-related expenses.
- Services revenue decreased primarily as
a result of the smaller size and number of services engagements
during fiscal 2015, including non-core engagements with government
customers that are not directly related to the Company’s software
product sales. Operating margin for the Company’s Services segment
decreased as a result of an increase in severance costs.
CASH FLOW FROM OPERATIONS
- Cash flow from continuing operations
for the fourth quarter was $485 million, compared with $478 million
in the prior year.
- For the full year, cash flow from
continuing operations was $1,030 million, compared with $973
million in the prior fiscal year. This increase was primarily due
to lower cash tax payments.
CAPITAL STRUCTURE
- Cash, cash equivalents and investments
at March 31, 2015 were $2.804 billion.
- With $1.263 billion in total debt
outstanding and $138 million in notional pooling, the Company’s net
cash, cash equivalents and investments position was $1.403
billion.
- In the fourth quarter of fiscal 2015,
the Company repurchased 2.9 million shares of common stock for $90
million. For fiscal 2015, the Company repurchased 7.2 million
shares of stock for $215 million.
- As of March 31, 2015, the Company
is currently authorized to purchase $785 million of its common
stock under its current stock repurchase program that was
authorized in May 2014.
- During the fourth quarter of fiscal
2015, the Company distributed $111 million in dividends to
shareholders. For fiscal 2015, the Company distributed $444 million
in dividends to shareholders.
- The Company’s outstanding share count
at March 31, 2015 was 436 million.
OUTLOOK FOR FISCAL 2016
The following outlook for fiscal 2016 contains "forward-looking
statements" (as defined below).
The Company expects the following:
- Total revenue to decrease 2 percent in
constant currency. At March 31, 2015 exchange rates, this
translates to reported revenue of $3.95 billion to $3.99
billion.
- GAAP diluted earnings per share from
continuing operations to increase in a range of 12 percent to 17
percent in constant currency. At March 31, 2015 exchange
rates, this translates to reported GAAP diluted earnings per share
from continuing operations of $1.83 to $1.90.
- Non-GAAP diluted earnings per share
from continuing operations to increase in a range of 2 percent to 5
percent in constant currency. At March 31, 2015 exchange
rates, this translates to reported non-GAAP diluted earnings per
share from continuing operations of $2.38 to $2.45.
- Cash flow from continuing operations to
increase in a range of 2 percent to 7 percent in constant currency.
At March 31, 2015 exchange rates, this translates to reported
cash flow from continuing operations of $0.97 billion to $1.01
billion.
This outlook assumes no material acquisitions and a partial
currency hedge of operating income. The Company expects a full-year
GAAP operating margin of 30 percent and non-GAAP operating margin
of 39 percent. The Company also expects a full-year GAAP and
non-GAAP effective tax rate of between 28 percent and 29
percent.
The Company anticipates approximately 433 million shares
outstanding at fiscal 2016 year-end and weighted average diluted
shares outstanding of approximately 437 million for the fiscal
year.
Webcast
This news release and the accompanying tables should be read in
conjunction with additional content that is available on the
Company’s website, including a supplemental financial package, as
well as a conference call and webcast that the Company will host at
5:00 p.m. ET today to discuss its unaudited fourth quarter and full
fiscal year results. The webcast will be archived on the website.
Individuals can access the webcast, as well as the press release
and supplemental financial information at http://ca.com/invest or can listen to the call at
1-877-561-2748. The international participant number is
1-720-545-0044.
* The Forrester Wave™: API Management Solutions, Q3 2014, September
29, 2014 The Forrester Wave™: Strategic Planning for the BT Agenda,
Q1 2015, March 13, 2015 The Forrester Wave™: Portfolio Management
For The BT Agenda, Q1 2015, March 18, 2015 The Forrester Wave™:
Portfolio Management For The Tech Management Agenda, Q1 2015, March
18, 2015 ** Gartner, Inc., “Magic Quadrant for Data Center
Infrastructure Management Tools,” Jay E Pultz et al, September 22,
2014 ***Gartner, Inc., “Magic Quadrant for Integrated IT Portfolio
Analysis Applications,” Daniel B. Stang, Jim Duggan, November 18,
2014 ****Gartner, Inc. “MarketScope for IT Project and Portfolio
Management Software Applications” Daniel B. Stang, Robert A.
Handler, May 16, 2014
Gartner does not endorse any vendor, product or service depicted
in its research publications, and does not advise technology users
to select only those vendors with the highest ratings or other
designation. Gartner research publications consist of the opinions
of Gartner's research organization and should not be construed as
statements of fact. Gartner disclaims all warranties, expressed or
implied, with respect to this research, including any warranties of
merchantability or fitness for a particular purpose.
About CA Technologies
CA Technologies (NASDAQ:CA) creates software that fuels
transformation for companies and enables them to seize the
opportunities of the application economy. Software is at the heart
of every business in every industry. From planning, to development,
to management and security, CA is working with companies worldwide
to change the way we live, transact, and communicate - across
mobile, private and public cloud, distributed and mainframe
environments. Learn more at www.ca.com.
Follow CA Technologies
- Twitter
- Social Media Page
- Press Releases
- Blogs
Non-GAAP Financial Measures
This news release, the accompanying tables and the additional
content that is available on the Company's website, including a
supplemental financial package, include certain financial measures
that exclude the impact of certain items and therefore have not
been calculated in accordance with U.S. generally accepted
accounting principles (GAAP). Non-GAAP metrics for operating
expenses, operating income, operating margin, income from
continuing operations and diluted earnings per share exclude the
following items: share-based compensation expense; non-cash
amortization of purchased software and other intangible assets;
charges relating to rebalancing initiatives that are large enough
to require approval from the Company's Board of Directors, fiscal
2007 restructuring costs and certain other gains and losses, which
include the gains and losses since inception of hedges that mature
within the quarter, but exclude gains and losses of hedges that do
not mature within the quarter. The Company began expensing costs
for internally developed software where development efforts
commenced in the first quarter of fiscal 2014. As a result, product
development and enhancement expenses are expected to increase in
future periods as the amount capitalized for internally developed
software costs decreases. Due to this change, the Company also adds
back capitalized internal software costs and excludes amortization
of internally developed software costs previously capitalized from
these non-GAAP metrics. The effective tax rate on GAAP and non-GAAP
income from operations is the Company's provision for income taxes
expressed as a percentage of pre-tax GAAP and non-GAAP income from
continuing operations, respectively. These tax rates are determined
based on an estimated effective full year tax rate, with the
effective tax rate for GAAP generally including the impact of
discrete items in the period in which such items arise and the
effective tax rate for non-GAAP generally allocating the impact of
discrete items pro rata to the fiscal year's remaining reporting
periods. Adjusted cash flow from operations excludes payments
associated with the fiscal 2014 Board-approved rebalancing
initiative as described above, capitalized software development
costs as described above, and restructuring and other payments.
Free cash flow excludes purchases of property and equipment and
capitalized software development costs. The Company presents
constant currency information to provide a framework for assessing
how the Company's underlying businesses performed excluding the
effect of foreign currency rate fluctuations. To present this
information, current and comparative prior period results for
entities reporting in currencies other than U.S. dollars are
converted into U.S. dollars at the exchange rate in effect on the
last day of the Company's prior fiscal year (i.e., March 31, 2015,
March 31, 2014, March 31, 2013 and March 31, 2012, respectively).
Constant currency excludes the impacts from the Company's hedging
program. The constant currency calculation for annualized
subscription and maintenance bookings is calculated by dividing the
subscription and maintenance bookings in constant currency by the
weighted average subscription and maintenance duration in years.
These non-GAAP financial measures may be different from non-GAAP
financial measures used by other companies. Non-GAAP financial
measures should not be considered as a substitute for, or superior
to, measures of financial performance prepared in accordance with
GAAP. By excluding these items, non-GAAP financial measures
facilitate management's internal comparisons to the Company's
historical operating results and cash flows, to competitors'
operating results and cash flows, and to estimates made by
securities analysts. Management uses these non-GAAP financial
measures internally to evaluate its performance and they are key
variables in determining management incentive compensation. The
Company believes these non-GAAP financial measures are useful to
investors in allowing for greater transparency of supplemental
information used by management in its financial and operational
decision-making. In addition, the Company has historically reported
similar non-GAAP financial measures to its investors and believes
that the inclusion of comparative numbers provides consistency in
its financial reporting. Investors are encouraged to review the
reconciliation of the non-GAAP financial measures used in this news
release to their most directly comparable GAAP financial measures,
which are attached to this news release.
Cautionary Statement Regarding Forward-Looking
Statements
The declaration and payment of future dividends is subject to
the determination of the Company's Board of Directors, in its sole
discretion, after considering various factors, including the
Company's financial condition, historical and forecast operating
results, and available cash flow, as well as any applicable laws
and contractual covenants and any other relevant factors. The
Company's practice regarding payment of dividends may be modified
at any time and from time to time.
Repurchases under the Company's stock repurchase program are
expected to be made with cash on hand and may be made from time to
time, subject to market conditions and other factors, in the open
market, through solicited or unsolicited privately negotiated
transactions or otherwise. The program does not obligate the
Company to acquire any particular amount of common stock, and it
may be modified or suspended at any time at the Company's
discretion.
Certain statements in this communication (such as statements
containing the words "believes," "plans," "anticipates," "expects,"
"estimates," "targets" and similar expressions relating to the
future) constitute "forward-looking statements" that are based upon
the beliefs of, and assumptions made by, the Company's management,
as well as information currently available to management. These
forward-looking statements reflect the Company's current views with
respect to future events and are subject to certain risks,
uncertainties, and assumptions. A number of important factors could
cause actual results or events to differ materially from those
indicated by such forward-looking statements, including: the
ability to achieve success in the Company's strategy by, among
other things, enabling the Company's sales force to accelerate
growth of new product sales (at levels sufficient to offset any
decline in revenue in the Company's Mainframe Solutions segment),
improving the Company's brand, technology and innovation awareness
in the marketplace, ensuring the Company's offerings for cloud
computing, application development and IT operations (DevOps),
Software-as-a-Service (SaaS), and mobile device management, as well
as other new offerings, address the needs of a rapidly changing
market, while not adversely affecting the demand for the Company's
traditional products or its profitability to an extent greater than
anticipated, and effectively managing the strategic shift in the
Company's business model to develop more easily installed software,
provide additional SaaS offerings and refocus the Company's
professional services and education engagements on those
engagements that are connected to new product sales, without
affecting the Company's performance to an extent greater than
anticipated; the failure to innovate or adapt to technological
changes and introduce new software products and services in a
timely manner; competition in product and service offerings and
pricing; the ability of the Company's products to remain compatible
with ever-changing operating environments, platforms or third party
products; global economic factors or political events beyond the
Company's control; the failure to expand partner programs; the
ability to retain and attract qualified professionals; general
economic conditions and credit constraints, or unfavorable economic
conditions in a particular region, industry or business sector; the
ability to successfully integrate acquired companies and products
into the Company's existing business; risks associated with sales
to government customers; breaches of the Company's data center,
network as well as the Company's software products, and the IT
environments of the Company's vendors and customers; the ability to
adequately manage, evolve and protect the Company's information
systems, infrastructure and processes; fluctuations in foreign
exchange rates; discovery of errors or omissions in the Company's
software products or documentation and potential product liability
claims; the failure to protect the Company's intellectual property
rights and source code; the failure to renew large license
transactions on a satisfactory basis; access to software licensed
from third parties; risks associated with the use of software from
open source code sources; third-party claims of intellectual
property infringement or royalty payments; fluctuations in the
number, terms and duration of the Company's license agreements, as
well as the timing of orders from customers and channel partners;
events or circumstances that would require the Company to record an
impairment charge relating to the Company's goodwill or capitalized
software and other intangible assets balances; potential tax
liabilities; changes in market conditions or the Company's credit
ratings; the failure to effectively execute the Company's workforce
reductions, workforce rebalancing and facilities consolidations;
successful and secure outsourcing of various functions to third
parties; changes in generally accepted accounting principles; and
other factors described more fully in the Company's filings with
the Securities and Exchange Commission. Should one or more of these
risks or uncertainties occur, or should the Company's assumptions
prove incorrect, actual results may vary materially from those
described herein as believed, planned, anticipated, expected,
estimated, targeted or similarly expressed in a forward-looking
manner. The Company assumes no obligation to update the information
in this communication, except as otherwise required by law. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof.
Copyright © 2015 CA, Inc. All Rights Reserved. All other
trademarks, trade names, service marks, and logos referenced herein
belong to their respective companies.
Table 1 CA Technologies Consolidated Statements of
Operations (unaudited) (in millions, except per share amounts)
Three Months Ended Fiscal Year Ended
March 31,
March 31,
Revenue:
2015
2014
2015
2014
Subscription and maintenance
$
851
$
910
$
3,560
$
3,683
Professional services 83 90 351 379 Software fees and other
89 84 351 350
Total revenue $ 1,023 $ 1,084 $ 4,262 $
4,412
Expenses: Costs of licensing and maintenance $
80 $ 80 $ 297 $ 296 Cost of professional services 85 89 338 353
Amortization of capitalized software costs 69 67 273 271 Selling
and marketing 278 306 1,060 1,104 General and administrative 108
118 377 395 Product development and enhancements 160 156 603 574
Depreciation and amortization of other intangible assets 30 31 129
144 Other expenses, net (1) 2 52
23 205
Total expenses before interest and
income taxes $ 812 $ 899 $ 3,100 $ 3,342
Income from continuing operations before interest and
income taxes $ 211 $ 185 $ 1,162 $ 1,070 Interest expense, net
9 15 47 54
Income from continuing operations before income taxes $ 202
$ 170 $ 1,115 $ 1,016 Income tax expense 57 69
305 129
Income from
continuing operations $ 145 $ 101 $ 810 $ 887 Income from
discontinued operations, net of income taxes $ 6 $ 6
$ 36 $ 27
Net income $ 151 $ 107
$ 846 $ 914
Basic income per common
share: Income from continuing operations $ 0.33 $ 0.23 $ 1.83 $
1.97 Income from discontinued operations 0.01
0.01 0.08 0.06
Net income
$ 0.34 $ 0.24 $ 1.91 $ 2.03
Basic
weighted average shares used in computation 437 442 439 446
Diluted income per common share: Income from
continuing operations $ 0.33 $ 0.23 $ 1.82 $ 1.96 Income from
discontinued operations 0.01 0.01
0.08 0.06
Net income $ 0.34
$ 0.24 $ 1.90 $ 2.02
Diluted
weighted average shares used in computation 439 444 441 448 (1)
Other expenses, net consists of costs associated with the
FY2014 Board approved rebalancing initiative (the Fiscal 2014
Plan), certain foreign exchange derivative hedging gains and
losses, and other miscellaneous costs. For the twelve month period
ending March 31, 2014, costs associated with the Fiscal 2014 Plan
were $168 million. Results reflect the discontinued
operations associated with the CA ERwin Data Modeling and CA
arcserve data protection businesses.
Table 2 CA
Technologies Condensed Consolidated Balance Sheets (in
millions) March 31, March 31, 2015 2014
(unaudited) Cash and cash equivalents $ 2,804 $ 3,252 Trade
accounts receivable, net 652 800 Deferred income taxes 318 315
Other current assets 213 192
Total
current assets $ 3,987 $ 4,559 Property and equipment,
net $ 252 $ 295 Goodwill 5,806 5,922 Capitalized software and other
intangible assets, net 731 1,063 Deferred income taxes 92 59 Other
noncurrent assets, net 111 118
Total
assets $ 10,979 $ 12,016 Current portion
of long-term debt $ 10 $ 514 Deferred revenue (billed or collected)
2,114 2,419 Deferred income taxes 7 9 Other current liabilities
807 980
Total current
liabilities $ 2,938 $ 3,922 Long-term debt, net of
current portion $ 1,253 $ 1,252 Deferred income taxes 45 67
Deferred revenue (billed or collected) 863 872 Other noncurrent
liabilities 255 333
Total
liabilities $ 5,354 $ 6,446 Common stock $
59 $ 59 Additional paid-in capital 3,631 3,610 Retained earnings
6,221 5,818 Accumulated other comprehensive loss (418 ) (171 )
Treasury stock (3,868 ) (3,746 )
Total
stockholders’ equity $ 5,625 $ 5,570
Total
liabilities and stockholders’ equity $ 10,979 $ 12,016
Table 3 CA Technologies Condensed
Consolidated Statements of Cash Flows (unaudited) (in millions)
Three Months Ended
March 31,
2015
2014
Operating activities from continuing operations: Net income
$ 151 $ 107 Income from discontinued operations (6 )
(6 ) Income from continuing operations $ 145 $ 101
Adjustments to reconcile income from
continuing operations to net cash provided by operating
activities:
Depreciation and amortization 99 98 Deferred income taxes (10 ) 6
Provision for bad debts 2 2 Share-based compensation expense 22 18
Asset impairments and other non-cash items 4 1 Foreign currency
transaction (gains) losses (3 ) 7 Changes in other operating assets
and liabilities, net of effect of acquisitions: Increase in trade
accounts receivable (12 ) (91 ) Increase in deferred revenue 307
326 Decrease in taxes payable, net (132 ) (84 ) Increase in
accounts payable, accrued expenses and other 29 62 Increase in
accrued salaries, wages and commissions 22 29 Changes in other
operating assets and liabilities 12 3
Net cash provided by operating activities - continuing
operations $ 485 $ 478
Investing activities
from continuing operations: Acquisitions of businesses, net of
cash acquired, and purchased software $ (6 ) $ (6 ) Purchases of
property and equipment (7 ) (13 ) Capitalized software development
costs - (1 ) Maturities of investments - 7 Decrease in restricted
cash - 50
Net cash (used in)
provided by investing activities - continuing operations $ (13
) $ 37
Financing activities from continuing
operations: Dividends paid $ (111 ) $ (112 ) Purchases of
common stock (90 ) (167 ) Notional pooling borrowings (repayments),
net 83 (6 ) Debt repayments (1 ) (3 ) Exercise of common stock
options and other 1 19
Net cash used
in financing activities - continuing operations $ (118 ) $ (269
) Effect of exchange rate changes on cash $ (222 ) $ 24
Net change in cash and cash equivalents - continuing
operations $ 132 $ 270 Cash (used in) provided by operating
activities - discontinued operations $ (11 ) $ 8
Net
effect of discontinued operations on cash and cash equivalents
$ (11 ) $ 8
Increase in cash and cash equivalents $
121 $ 278
Cash and cash equivalents at beginning of period $
2,683 $ 2,974
Cash and cash equivalents at end of
period $ 2,804 $ 3,252
Results reflect the discontinued
operations associated with the CA ERwin Data Modeling and CA
arcserve data protection businesses.
Table 4 CA Technologies Operating
Segments (unaudited) (dollars in millions) Three
Months Ended March 31, 2015 Fiscal Year Ended March 31, 2015
Mainframe
Enterprise
Mainframe
Enterprise
Solutions (1)
Solutions (1)
Services (1) Total
Solutions (1)
Solutions (1)
Services (1) Total Revenue (2)
$
572
$
368
$
83
$
1,023
$
2,392
$
1,519
$
351
$
4,262
Expenses (3) 253 354 86
693 970 1,353 342
2,665
Segment profit $ 319 $ 14
$ (3 ) $ 330 $ 1,422 $ 166 $ 9 $
1,597
Segment operating margin 56 % 4 % -4 % 32 % 59
% 11 % 3 % 37 %
Segment profit $ 330 $ 1,597
Less: Purchased software amortization 37 124 Other
intangibles amortization 13 58 Software development costs
capitalized - - Internally developed software products amortization
32 149 Share-based compensation expense 22 87 Other expenses, net
(4) 15 17 Interest expense, net 9 47
Income from continuing operations before income taxes $ 202
$ 1,115 Three Months Ended March 31,
2014 Fiscal Year Ended March 31, 2014
Mainframe
Enterprise
Mainframe
Enterprise
Solutions (1)
Solutions (1)
Services (1) Total
Solutions (1)
Solutions (1)
Services (1) Total Revenue (2) $ 613 $ 381 $ 90 $ 1,084 $
2,478 $ 1,555 $ 379 $ 4,412 Expenses (3) 280
395 89 764 996
1,440 357 2,793
Segment profit $ 333 $ (14 ) $ 1 $ 320
$ 1,482 $ 115 $ 22 $ 1,619
Segment
operating margin 54 % -4 % 1 % 30 % 60 % 7 % 6 % 37 %
Segment profit $ 320 $ 1,619
Less: Purchased software
amortization 29 116 Other intangibles amortization 12 60 Software
development costs capitalized (1 ) (33 ) Internally developed
software products amortization 38 155 Share-based compensation
expense 18 81 Other expenses, net (4) 39 170 Interest expense, net
15 54
Income from continuing
operations before income taxes $ 170 $ 1,016 (1)
The Company’s Mainframe Solutions and Enterprise Solutions
segments comprise its software business organized by the nature of
the Company’s software offerings and the platform on which the
products operate. The Services segment comprises product
implementation, consulting, customer education and customer
training, including those directly related to the Mainframe
Solutions and Enterprise Solutions software that the Company sells
to its customers. (2) The Company regularly enters into a
single arrangement with a customer that includes mainframe
solutions, enterprise solutions and services. The amount of
contract revenue assigned to operating segments is generally based
on the manner in which the proposal is made to the customer. The
software product revenue is assigned to the Mainframe Solutions and
Enterprise Solutions segments based on either: (1) a list price
allocation method (which allocates a discount in the total contract
price to the individual products in proportion to the list price of
the product); (2) allocations included within internal contract
approval documents; or (3) the value for individual software
products as stated in the customer contract. The price for the
implementation, consulting, education and training services is
separately stated in the contract and these amounts of contract
revenue are assigned to the Services segment. The contract value
assigned to each operating segment is then recognized in a manner
consistent with the revenue recognition policies the Company
applies to the customer contract for purposes of preparing the
Consolidated Financial Statements. (3) Segment expenses
include costs that are controllable by segment managers (i.e.,
direct costs) and, in the case of the Mainframe Solutions and
Enterprise Solutions segments, an allocation of shared and indirect
costs (i.e., allocated costs). Segment-specific direct costs
include a portion of selling and marketing costs, licensing and
maintenance costs, product development costs and general and
administrative costs. Allocated segment costs primarily include
indirect and non-segment specific direct selling and marketing
costs and general and administrative costs that are not directly
attributable to a specific segment. The basis for allocating shared
and indirect costs between the Mainframe Solutions and Enterprise
Solutions segments is dependent on the nature of the cost being
allocated and is either in proportion to segment revenues or in
proportion to the related direct cost category. Expenses for the
Services segment consist of cost of professional services and other
direct costs included within selling and marketing and general and
administrative expenses. There are no allocated or indirect costs
for the Services segment. (4) Other expenses, net includes
charges relating to the FY2014 Board approved rebalancing
initiative (the Fiscal 2014 Plan), certain foreign exchange
derivative hedging gains and losses, and other miscellaneous costs.
Results reflect the discontinued operations associated with
the CA ERwin Data Modeling and CA arcserve data protection
businesses.
Table 5 CA Technologies
Constant Currency Summary (unaudited) (dollars in millions)
Three Months Ended March 31, Fiscal Year Ended
March 31,
% Increase
% Increase
% Increase
(Decrease)
% Increase
(Decrease)
(Decrease)
in Constant
(Decrease)
in Constant
2015 2014
in $ US
Currency (1)
2015 2014
in $ US
Currency (1)
Bookings $
1,069
$
1,216
(12 )% (5 )% $
3,609
$
4,421
(18 )% (15 )%
Revenue: North America $ 682 $ 692 (1
)% (1 )% $ 2,766 $ 2,820 (2 )% (2 )% International 341
392 (13 )% (1 )% 1,496
1,592 (6 )% (2 )% Total revenue $ 1,023 $ 1,084 (6 )% (1 )%
$ 4,262 $ 4,412 (3 )% (2 )%
Revenue: Subscription and
maintenance $ 851 $ 910 (6 )% (2 )% $ 3,560 $ 3,683 (3 )% (2 )%
Professional services 83 90 (8 )% (3 )% 351 379 (7 )% (6 )%
Software fees and other 89 84 6 % 11 %
351 350 0 % 2 % Total revenue $ 1,023 $
1,084 (6 )% (1 )% $ 4,262 $ 4,412 (3 )% (2 )%
Segment
Revenue: Mainframe solutions $ 572 $ 613 (7 )% (2 )% $ 2,392 $
2,478 (3 )% (2 )% Enterprise solutions 368 381 (3 )% 2 % 1,519
1,555 (2 )% (1 )% Services 83 90 (8 )% (3 )% 351 379 (7 )% (6 )%
Total expenses before interest and income taxes:
Total non-GAAP (2) $ 693 $ 764 (9 )% (2 )% $ 2,665 $ 2,793 (5 )% (2
)% Total GAAP 812 899 (10 )% (5 )% 3,100 3,342 (7 )% (5 )% (1)
Constant currency information is presented to provide a
framework for assessing how the Company's underlying businesses
performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other
than U.S. dollars are converted into U.S. dollars at the exchange
rate in effect on March 31, 2014, which was the last day of the
prior fiscal year. Constant currency excludes the impacts from the
Company's hedging program. (2) Refer to Table 7 for a
reconciliation of total expenses before interest and income taxes
to total non-GAAP operating expenses. Results reflect
the discontinued operations associated with the CA ERwin Data
Modeling and CA arcserve data protection businesses. Certain
non-material differences may arise versus actual from impact of
rounding.
Table 6 CA Technologies
Reconciliation of Select GAAP Measures to Non-GAAP Measures
(unaudited) (dollars in millions) Three Months Ended
Fiscal Year Ended
March 31,
March 31,
2015
2014
2015
2014
GAAP net income $ 151 $ 107 $ 846 $ 914 GAAP income from
discontinued operations, net of income taxes (6 ) (6
) (36 ) (27 ) GAAP income from continuing operations
$ 145 $ 101 $ 810 $ 887 GAAP income tax expense (benefit) 57 69 305
129 Interest expense, net 9 15
47 54 GAAP income from continuing operations
before interest and income taxes $ 211 $ 185 $ 1,162
$ 1,070 GAAP operating margin (% of revenue) (1) 21 %
17 % 27 % 24 %
Non-GAAP adjustments to expenses: Costs of licensing and
maintenance (2) $ 1 $ 1 $ 5 $ 4 Cost of professional services (2) 1
1 4 4 Amortization of capitalized software costs (3) 69 67 273 271
Selling and marketing (2) 7 6 30 28 General and administrative (2)
8 6 29 26 Product development and enhancements (4) 5 3 19 (14 )
Depreciation and amortization of other intangible assets (5) 13 12
58 60 Other expenses, net (6) 15 39
17 170 Total Non-GAAP adjustment to
operating expenses $ 119 $ 135 $ 435 $ 549
Non-GAAP income from continuing operations before interest
and income taxes $ 330 $ 320 $ 1,597 $ 1,619 Non-GAAP operating
margin (% of revenue) (7) 32 % 30 % 37 % 37 % Interest
expense, net 9 15 47 54 GAAP income tax expense (benefit) 57 69 305
129 Non-GAAP adjustment to income tax expense (benefit) (8)
17 (44 ) 120 70 Non-GAAP
income tax expense $ 74 $ 25 $ 425 $ 199
Non-GAAP income from continuing operations $ 247 $
280 $ 1,125 $ 1,366 (1) GAAP operating
margin is calculated by dividing GAAP income from continuing
operations before interest and income taxes by total revenue (refer
to Table 1 for total revenue). (2) Non-GAAP adjustment
consists of share-based compensation. (3) For the three
month periods ending March 31, 2015 and 2014, non-GAAP adjustment
consists of $37 million and $29 million of purchased software
amortization and $32 million and $38 million of internally
developed software products amortization, respectively. For the
twelve month periods ending March 31, 2015 and 2014, non-GAAP
adjustment consists of $124 million and $116 million of purchased
software amortization and $149 million and $155 million of
internally developed software products amortization, respectively.
(4) For the three and twelve month periods ending March 31,
2015, non-GAAP adjustment consists of $5 million and $19 million of
share-based compensation, respectively. For the three and twelve
month periods ending March 31, 2014, non-GAAP adjustment consists
of $4 million and $19 million of share-based compensation and ($1)
million and ($33) million of software development costs
capitalized, respectively. (5) Non-GAAP adjustment consists
of other intangibles amortization. (6) Non-GAAP adjustment
consists of charges relating to the FY2014 Board approved
rebalancing initiative (the Fiscal 2014 Plan) and certain other
gains and losses, including gains and losses since inception of
hedges that mature within the quarter, but excludes gains and
losses of hedges that do not mature within the quarter. (7)
Non-GAAP operating margin is calculated by dividing non-GAAP income
from continuing operations before interest and income taxes by
total revenue (refer to Table 1 for total revenue). (8) The
full year non-GAAP income tax expense is different from GAAP income
tax expense because of the difference in non-GAAP income from
continuing operations before income taxes. On an interim basis,
this difference would also include a difference in the impact of
discrete and permanent items where for GAAP purposes the effect is
recorded in the period such items arise, but for non-GAAP such
items are recorded pro rata to the fiscal year's remaining
reporting periods. Refer to the discussion of non-GAAP
financial measures included in the accompanying press release for
additional information. Results reflect the discontinued
operations associated with the CA ERwin Data Modeling and CA
arcserve data protection businesses. Certain non-material
differences may arise versus actual from impact of rounding.
Table 7 CA Technologies Reconciliation of GAAP to
Non-GAAP Operating Expenses and Diluted Earnings per
Share (unaudited) (in millions, except per share amounts)
Three Months Ended Fiscal Year Ended
March 31,
March 31,
Operating
Expenses
2015
2014
2015
2014
Total expenses before interest and income taxes $
812
$ 899 $
3,100
$ 3,342 Non-GAAP operating adjustments: Purchased software
amortization 37 29 124 116 Other intangibles amortization 13 12 58
60 Software development costs capitalized - (1 ) - (33 ) Internally
developed software products amortization 32 38 149 155 Share-based
compensation 22 18 87 81 Other expenses, net (1) 15
39 17 170 Total non-GAAP
operating adjustment $ 119 $ 135 $ 435 $ 549
Total non-GAAP operating expenses $ 693 $ 764
$ 2,665 $ 2,793 Three Months
Ended Fiscal Year Ended
March 31,
March 31,
Diluted EPS from
Continuing Operations
2015
2014
2015
2014
GAAP diluted EPS from continuing operations $ 0.33 $ 0.23 $
1.82 $ 1.96 Non-GAAP adjustments, net of taxes: Purchased
software amortization 0.06 0.04 0.20 0.22 Other intangibles
amortization 0.02 0.01 0.10 0.11 Software development costs
capitalized - - - (0.06 ) Internally developed software products
amortization 0.05 0.05 0.24 0.30 Share-based compensation 0.04 0.02
0.14 0.16 Other expenses, net (1) 0.02 0.05 0.03 0.33 Non-GAAP
effective tax rate adjustments (2) 0.04 0.22
- - Total non-GAAP adjustment $
0.23 $ 0.39 $ 0.71 $ 1.06
Non-GAAP diluted EPS from continuing operations $ 0.56 $
0.62 $ 2.53 $ 3.02 (1) Non-GAAP
adjustment consists of charges relating to the FY2014 Board
approved rebalancing initiative (the Fiscal 2014 Plan) and certain
other gains and losses, including gains and losses since inception
of hedges that mature within the quarter, but excludes gains and
losses of hedges that do not mature within the quarter. (2)
The non-GAAP effective tax rate is equal to the full year GAAP
effective tax rate, therefore no adjustment is required on an
annual basis. On an interim basis, the difference in non-GAAP
income tax expense and GAAP income tax expense relates to the
difference in non-GAAP income from continuing operations before
income taxes, and includes a difference in the impact of discrete
and permanent items where for GAAP purposes the effect is recorded
in the period such items arise but for non-GAAP purposes such items
are recorded pro rata to the fiscal year's remaining reporting
periods. Refer to the discussion of non-GAAP financial
measures included in the accompanying press release for additional
information. Results reflect the discontinued operations
associated with the CA ERwin Data Modeling and CA arcserve data
protection businesses. Certain non-material differences may
arise versus actual from impact of rounding.
Table 8
CA Technologies Effective Tax Rate Reconciliation
GAAP and Non-GAAP (unaudited) (dollars in millions)
Three Months Ended Fiscal Year Ended
March 31,
2015
March 31,
2015
GAAP
Non-GAAP
GAAP
Non-GAAP
Income from continuing operations before interest and income
taxes (1) $ 211 $ 330 $ 1,162 $ 1,597 Interest expense, net
9 9 47 47 Income
from continuing operations before income taxes $ 202 $ 321 $ 1,115
$ 1,550 Statutory tax rate 35 % 35 % 35 % 35 % Tax at
statutory rate $ 71 $ 112 $ 390 $ 543 Adjustments for discrete and
permanent items (2) (14 ) (38 ) (85 )
(118 ) Total tax expense $ 57 $ 74 $ 305 $ 425 Effective tax
rate (3) 28.2 % 23.1 % 27.4 % 27.4 % Three Months
Ended Fiscal Year Ended
March 31,
2014
March 31,
2014
GAAP
Non-GAAP
GAAP
Non-GAAP
Income from continuing operations before interest and income
taxes (1) $ 185 $ 320 $ 1,070 $ 1,619 Interest expense, net
15 15 54 54 Income
from continuing operations before income taxes $ 170 $ 305 $ 1,016
$ 1,565 Statutory tax rate 35 % 35 % 35 % 35 % Tax at
statutory rate $ 60 $ 107 $ 356 $ 548 Adjustments for discrete and
permanent items (2) 9 (82 ) (227 )
(349 ) Total tax (benefit) expense $ 69 $ 25 $ 129 $ 199
Effective tax rate (3) 40.6 % 8.2 % 12.7 % 12.7 % (1)
Refer to Table 6 for a reconciliation of income from
continuing operations before interest and income taxes on a GAAP
basis to income from continuing operations before interest and
income taxes on a non-GAAP basis. (2) The effective tax rate
for GAAP generally includes the impact of discrete and permanent
items in the period such items arise, whereas the effective tax
rate for non-GAAP generally allocates the impact of such items pro
rata to the fiscal year's remaining reporting periods. (3)
The effective tax rate on GAAP and non-GAAP income from continuing
operations is the Company's provision for income taxes expressed as
a percentage of GAAP and non-GAAP income from continuing operations
before income taxes, respectively. The non-GAAP effective tax rate
is equal to the full year GAAP effective tax rate. On an interim
basis, the effective tax rates are determined based on an estimated
effective full year tax rate after the adjustments for the impacts
of certain discrete items (such as changes in tax rates,
reconciliations of tax returns to tax provisions and resolutions of
tax contingencies). Refer to the discussion of non-GAAP
financial measures included in the accompanying press release for
additional information. Results reflect the discontinued
operations associated with the CA ERwin Data Modeling and CA
arcserve data protection businesses. Certain non-material
differences may arise versus actual from impact of rounding.
Table 9 CA Technologies Reconciliation of
Projected GAAP Metrics to Projected Non-GAAP Metrics
(unaudited) Fiscal Year Ending
Projected Diluted
EPS from Continuing Operations
March 31,
2016
Projected GAAP diluted EPS from continuing operations
range
$
1.83
to
$
1.90
Non-GAAP adjustments, net of taxes: Purchased software
amortization 0.17 0.17 Other intangibles amortization 0.06 0.06
Internally developed software products amortization 0.18 0.18
Share-based compensation 0.14 0.14
Total non-GAAP adjustment $ 0.55 $ 0.55
Projected non-GAAP diluted EPS from continuing operations range $
2.38 to $ 2.45 Fiscal Year Ending
Projected Operating
Margin
March 31,
2016
Projected GAAP operating margin 30 % Non-GAAP
operating adjustments: Purchased software amortization 3 % Other
intangibles amortization 1 % Internally developed software products
amortization 3 % Share-based compensation 2 % Total non-GAAP
operating adjustment 9 % Projected non-GAAP operating margin
39 %
Refer to the discussion of non-GAAP financial measures included
in the accompanying press release for additional information.
CA TechnologiesJennifer Hallahan, 212-415-6924Public
Relationsjennifer.hallahan@ca.comorJonathan Doros,
212-415-6870Investor Relationsjonathan.doros@ca.com
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