- Achieved FY2018 Guidance for
Revenue, Operating Margin, and EPS, and Exceeded for CFFO
- 4Q and FY2018 Revenue of $1.083
Billion and $4.235 Billion, Respectively
- 4Q and FY2018 GAAP EPS of $0.49 and
$1.13, Respectively
- 4Q and FY2018 Non-GAAP EPS of $0.62
and $2.59, Respectively
- 4Q and FY2018 Cash Flow From
Operations of $548 Million and $1,198 Million,
Respectively
- Company Issues FY2019 Guidance Under
ASC 605; Anticipates Charge Between $140 Million and $160
Million Related to Restructuring Plan to Better Align Business
Priorities
CA Technologies (NASDAQ:CA) today reported financial results for
its fourth quarter and full fiscal year 2018, which ended
March 31, 2018.
Mike Gregoire, CA Technologies Chief Executive Officer,
said:
"I'm pleased that CA delivered our second consecutive year of
total revenue growth and achieved our guidance for the year. Our
portfolio of solutions is more relevant today than ever before, as
we enable customers to deliver rich, secure user experiences
augmented by data and analytics.
As we continue to evolve CA to take advantage of market
opportunities, we are rebalancing resources to accelerate the shift
of more of our business to a subscription-based model. We will be
investing more heavily and in a more focused way against this
strategic priority. I am optimistic about where we are positioned
today and our opportunities for FY19 and beyond."
ORGANIZATIONAL UPDATE
Adam Elster, our former President of Global Field Operations, is
leaving CA. Interim leadership is in place pending an external
search for Elster’s replacement that is underway.
Gregoire commented, “Adam has been a tremendous contributor to
CA, and a great partner to me personally. Since taking on
responsibility for global field operations, he has sharpened the
technology know-how and customer-first focus of the team and laid
the foundation of key go-to-market processes that are essential to
competing and winning in today’s highly competitive environment. We
wish Adam well in all his future endeavors.”
FINANCIAL OVERVIEW
(dollars in
millions, except share data)
Fourth Quarter FY18
vs. FY17 Full Year FY18 vs. FY17
FY18 FY17
%Change
%ChangeCC*
FY18 FY17
%Change
%ChangeCC*
Revenue $1,083 $1,012 7% 4% $4,235
$4,036 5% 4% GAAP Net Income $207 $157
32% 27% $476 $775 (39)% (37)% Non-GAAP
Net Income* $258 $227 14% 17% $1,091
$1,042 5% 6% GAAP Diluted EPS $0.49 $0.38
29% 26% $1.13 $1.85 (39)% (38)%
Non-GAAP Diluted EPS* $0.62 $0.54 15% 17%
$2.59 $2.48 4% 6% Cash Flow provided by
Operations $548 $420 30% 29%
$1,198 $1,078 11% 8%
* Non-GAAP income, Non-GAAP earnings per share and CC or
Constant Currency are non-GAAP financial measures, as noted in
"Non-GAAP Financial Measures" below. A reconciliation of non-GAAP
financial measures to their comparable GAAP financial measures is
included in the tables following this news release.
REVENUE AND BOOKINGS
Fourth Quarter
(dollars in millions)
Fourth Quarter FY18 vs. FY17 FY18
% ofTotal FY17 %
ofTotal
%Change
%ChangeCC*
North America Revenue $714 66% $683 67%
5% 4% International Revenue $369 34% $329
33% 12% 2% Total Revenue $1,083
$1,012 7% 4%
North America Bookings $1,112 73% $1,049
74% 6% 6% International Bookings $411
27% $374 26% 10% 2% Total Bookings
$1,523 $1,423 7%
5%
Current Revenue Backlog $3,372
$3,240 4% 1% Total Revenue
Backlog $7,515 $7,556
(1)% (3)%
*CC or Constant Currency is a non-GAAP financial measure, as
noted in "Non-GAAP Financial Measures" below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
- Total revenue increased primarily due
to an increase in software fees and other revenue and, to a lesser
extent, an increase in subscription and maintenance revenue. Our
fourth quarter fiscal 2017 acquisition of Veracode, Inc. (Veracode)
contributed approximately 4 points of revenue growth for the
quarter.
- Total bookings grew due to an increase
in renewal bookings and an increase in new product sales.
- The Company executed a total of 18
license agreements with incremental contract values in excess of
$10 million each, for an aggregate contract value of $800 million.
During the fourth quarter of fiscal 2017, the Company executed a
total of 26 license agreements with incremental contract values in
excess of $10 million each, for an aggregate contract value of $754
million.
- The weighted average duration of
subscription and maintenance bookings for the quarter was 3.67
years, compared with 3.56 years for the same period in fiscal
2017.
Full Year
(dollars in millions)
Full Year FY18 vs. FY17 FY18
% ofTotal FY17 %
ofTotal %Change
%ChangeCC*
North America Revenue $2,813 66% $2,716 67%
4% 3% International Revenue $1,422 34%
$1,320 33% 8% 4% Total Revenue $4,235
$4,036 5% 4%
North America Bookings $2,794 69%
$3,329 70% (16)% (16)% International Bookings
$1,280 31% $1,434 30% (11)%
(15)% Total Bookings $4,074 $4,763
(14)% (16)%
*CC or Constant Currency is a non-GAAP financial measure, as
noted in "Non-GAAP Financial Measures" below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
- Total revenue increased primarily due
to an increase in software fees and other revenue and, to a lesser
extent, an increase in subscription and maintenance revenue. Our
acquisitions of Automic Holding GmbH (Automic) and Veracode
contributed approximately 5 points of revenue growth for the
year.
- Total bookings decreased due to a
decline in renewal bookings, which included a large system
integrator transaction that occurred in the first quarter of fiscal
2017 with an incremental contract value in excess of $475
million.
- The Company executed a total of 49
license agreements with incremental contract values in excess of
$10 million each, for an aggregate contract value of $1.518
billion. During fiscal 2017, the Company executed a total of 72
license agreements with incremental contract values in excess of
$10 million each, for an aggregate contract value of $2.450
billion.
- The weighted average duration of
subscription and maintenance bookings for fiscal 2018 was 3.25
years, compared with 3.83 years for fiscal 2017.
EXPENSES, MARGIN AND EARNINGS PER SHARE
Fourth Quarter
(dollars in millions)
Fourth Quarter FY18 vs. FY17 FY18
FY17 %Change
%ChangeCC**
GAAP Operating Expenses Before Interest and Income
Taxes $816 $797 2% (1)% Operating Income
Before Interest and Income Taxes $267 $215 24%
21% Diluted EPS $0.49 $0.38 29% 26% Operating
Margin 25% 21% Effective Tax
Rate 14.8% 20.7%
Non-GAAP*
Operating Expenses Before Interest and Income Taxes $717
$693 3% (3)% Operating Income Before Interest and
Income Taxes $366 $319 15% 18% Diluted EPS
$0.62 $0.54 15% 17% Operating Margin 34%
32% Effective Tax Rate 24.6%
24.8%
*Refer to the discussion of Non-GAAP financial measures included
in this news release and the reconciliation of non-GAAP financial
measures to their comparable GAAP financial measures included in
the tables following this news release.
**CC or Constant Currency is a non-GAAP financial measure, as
noted in "Non-GAAP Financial Measures" below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
- GAAP and non-GAAP operating expenses
increased primarily due to operating costs from our Veracode
acquisition, which were mainly personnel-related.
- GAAP income tax expense included a $28
million tax benefit relating to the refinement of the provisional
amount previously recorded for the impact from the US Tax Cuts and
Jobs Act, enacted on December 22, 2017 (“US Tax Reform”). GAAP EPS
was positively impacted by $0.07 from the US Tax Reform adjustment.
Non-GAAP income tax expense excluded the aforementioned tax benefit
relating to US Tax Reform.
- GAAP EPS was positively impacted by
$0.09 from an increase in GAAP operating margin. Non-GAAP EPS was
positively impacted by $0.11 from an increase in non-GAAP operating
margin.
Full Year
(dollars in millions)
Full Year FY18 vs. FY17 FY18
FY17 %Change
%ChangeCC**
GAAP Operating Expenses Before Interest and Income
Taxes $3,116 $2,901 7% 5% Operating Income
Before Interest and Income Taxes $1,119 $1,135 (1)%
0% Diluted EPS $1.13 $1.85 (39)% (38)%
Operating Margin 26% 28%
Effective Tax Rate 53.4% 27.8%
Non-GAAP* Operating Expenses Before Interest and
Income Taxes $2,684 $2,531 6% 4% Operating
Income Before Interest and Income Taxes $1,551 $1,505
3% 4% Diluted EPS $2.59 $2.48 4% 6%
Operating Margin 37% 37%
Effective Tax Rate 24.9% 27.8%
*Refer to the discussion of Non-GAAP financial measures included
in this news release and the reconciliation of non-GAAP financial
measures to their comparable GAAP financial measures included in
the tables following this news release.
**CC or Constant Currency is a non-GAAP financial measure, as
noted in "Non-GAAP Financial Measures" below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
- GAAP and non-GAAP operating expenses
increased primarily due to operating costs from our Automic and
Veracode acquisitions, which were mainly personnel-related.
- GAAP operating expenses were also
affected by higher amortization expenses of purchased software and
other intangible assets from our Automic and Veracode
acquisitions.
- GAAP income tax expense included a $290
million tax charge relating to the US Tax Reform. This tax charge
was comprised of $194 million related to the deemed US repatriation
of earnings held by non-US subsidiaries, which is payable over
eight years, and $96 million related to the re-measurement of
deferred tax assets and liabilities for the change in income tax
rates. GAAP EPS was negatively impacted by $0.70 from the US Tax
Reform adjustment. Non-GAAP income tax expense excluded the
aforementioned tax charge relating to US Tax Reform. Non-GAAP EPS
was positively impacted by $0.10 from a decrease in the non-GAAP
effective tax rate.
- Non-GAAP EPS was positively impacted by
$0.16 from an increase in non-GAAP operating margin, partially
offset by a $0.12 impact from our Automic and Veracode
acquisitions.
SELECTED QUARTERLY HIGHLIGHTS
- Jean M. Hobby, a 33-year veteran of
PricewaterhouseCoopers LLP whose tenure included roles as CFO,
global strategy partner, and head of its Technology, Media and
Telecom practice, was elected to CA Technologies Board of
Directors.
- Ava M. Hahn, formerly general counsel
at Kleiner Perkins Caufield & Byers, joined CA Technologies as
Executive Vice President, General Counsel and Corporate
Secretary.
- CA Technologies was named as a World's
Most Ethical Company by the Ethisphere Institute for the third
consecutive year.
- CA Veracode, Inc. was named a Leader in
the Gartner Magic Quadrant for Application Security Testing for the
fifth consecutive time.(1)(5)
- CA Technologies was named a Leader in
the Gartner Magic Quadrant for Application Performance Monitoring
Suites. (2)(5)
- CA Technologies was named a Leader in
the Gartner Magic Quadrant for Identity Governance and
Administration for the second consecutive year. (3)(5)
- CA Technologies received the highest
product scores in Continuous Testing and API/Web Service Testing
Use Cases in Gartner's report on Critical Capabilities for Software
Test Automation. (4)(5)
SEGMENT INFORMATION
Fourth Quarter
(dollars in millions)
Fourth Quarter FY18 vs. FY17 Revenue
%Change
%ChangeCC*
Operating Margin FY18 FY17
FY18 FY17 Mainframe
Solutions $549 $535 3% (1)% 61%
59% Enterprise Solutions $453 $400 13% 10%
6% 1% Services $81 $77
5% 1% 6% -3%
*CC or Constant Currency is a non-GAAP financial measure, as
noted in "Non-GAAP Financial Measures" below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
- Mainframe Solutions revenue increased
due to a favorable foreign exchange effect. Mainframe Solutions
operating margin increased primarily due to a decrease in corporate
overhead costs.
- Enterprise Solutions revenue increased
primarily due to revenue generated from our Veracode acquisition
which contributed approximately 9 points of revenue growth for the
quarter. Enterprise Solutions operating margin increased primarily
due the increase in revenue.
- Services revenue increased primarily
due to professional services revenue generated from our Veracode
acquisition and a favorable foreign exchange. Operating margin for
Services increased primarily due to an increase in professional
services revenue from our Veracode acquisition and a decrease in
personnel-related costs as a result of severance actions during the
fourth quarter of fiscal 2017.
Full Year
(dollars in millions)
Full Year FY18 vs. FY17 Revenue
%Change
%ChangeCC*
Operating Margin FY18 FY17
FY18 FY17 Mainframe
Solutions $2,176 $2,182 0% (1)% 64%
61% Enterprise Solutions $1,748 $1,553 13%
11% 9% 11% Services $311
$301 3% 2% 3% 0%
*CC or Constant Currency is a non-GAAP financial measure, as
noted in "Non-GAAP Financial Measures" below. A reconciliation of
non-GAAP financial measures to their comparable GAAP financial
measures is included in the tables following this news release.
- Mainframe Solutions revenue was
generally consistent with the prior year as a result of a favorable
foreign exchange effect. Mainframe Solutions operating margin
increased primarily due to a decrease in corporate overhead costs
and the Mainframe Solutions portion of the litigation settlement
costs incurred during fiscal 2017.
- Enterprise Solutions revenue increased
due to revenue generated from our Automic and Veracode
acquisitions, which contributed approximately 12 points of revenue
growth for the year, partially offset by a decrease in sales from
our more mature Enterprise Solutions products. Enterprise Solutions
operating margin decreased primarily due to costs associated with
our Automic and Veracode acquisitions, which were mainly
personnel-related.
- Services revenue increased due to
professional services revenue generated from our Automic and
Veracode acquisitions. Operating margin for Services increased
primarily due to an increase in professional services revenue from
our Automic and Veracode acquisitions and a decrease in
personnel-related costs resulting from severance actions during
fiscal 2017.
CASH FLOW FROM OPERATIONS
- Cash flow from operations for the
fourth quarter was $548 million, compared with $420 million in the
prior year. Cash flow from operations increased primarily due to an
increase in cash collections from billings, partially offset by an
increase in vendor disbursements and payroll.
- For the full year, cash flow from
operations was $1.198 billion, compared with $1.078 billion in the
prior fiscal year. Cash flow from operations increased primarily
due to an increase in cash collections from billings mainly from
collections from our Automic and Veracode acquisitions and a
decrease in income tax payments, net, partially offset by an
increase in vendor disbursements and payroll mainly from
disbursements from our Automic and Veracode acquisitions.
CAPITAL STRUCTURE
- Cash and cash equivalents at
March 31, 2018 were $3.405 billion.
- Approximately 53% of the Company's cash
and cash equivalents were held by foreign subsidiaries outside the
United States at March 31, 2018.
- With $2.783 billion in total debt
outstanding and $137 million in notional pooling, the Company’s net
cash position was $485 million.
- For fiscal 2018, the Company
repurchased 5 million shares of stock for $163 million.
- As of March 31, 2018, the Company
was authorized to purchase $487 million of its common stock under
its current stock repurchase program.
- During the fourth quarter of fiscal
2018, the Company distributed $107 million in dividends to
shareholders. For fiscal 2018, the Company distributed $428 million
in dividends to shareholders.
- The Company’s outstanding share count
at March 31, 2018 was 412 million.
FISCAL 2019 RESTRUCTURING CHARGE
On May 2, 2018, the Company's Board of Directors approved a
restructuring plan (“Fiscal 2019 Plan”) to better align its
business priorities.
The Fiscal 2019 Plan comprises the termination of approximately
800 employees and facility exits and 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, which includes a particular focus on
shifting more of the Company’s business to a subscription-based
model.
Actions under the Fiscal 2019 Plan are expected to be
substantially completed by the end of fiscal 2019. Under the Fiscal
2019 Plan, the Company expects to incur a pre-tax charge between
approximately $140 million and $160 million (including severance
costs between approximately $90 million and $100 million and
facility exit and consolidation costs between approximately $50
million and $60 million).
OUTLOOK FOR FISCAL 2019
The following outlook for fiscal 2019 is based upon exchange
rates on the last day of the preceding quarter, which was March 31,
2018, and is under the ASC 605 Revenue Standard. It assumes no
material acquisitions, takes into account the costs and payments
associated with the restructuring charge discussed above, and
contains “forward-looking statements” (as defined below). As the
Company implements the ASC 606 Revenue Standard for fiscal 2019, we
will be reporting results under both the ASC 605 and ASC 606
Revenue Standards during fiscal 2019 but will be providing guidance
that primarily messages the business to ASC 605 results for
comparability purposes.
The Company expects the following:*
- Total revenue to change in a range of
flat to plus 1 percent as reported and minus 1 percent to flat in
constant currency. At March 31, 2018 exchange rates, this
translates to reported revenue of $4.25 billion to $4.29
billion.
- Full-year GAAP operating margin between
24 percent and 26 percent and non-GAAP operating margin of 37
percent. The Company also expects a full-year GAAP and non-GAAP
effective tax rate of approximately 22 percent.**
- GAAP diluted earnings per share to
increase in a range of 58 percent to 65 percent as reported and 50
percent to 58 percent in constant currency. At March 31, 2018
exchange rates, this translates to reported GAAP diluted earnings
per share of $1.78 to $1.87.
- Non-GAAP diluted earnings per share to
increase in a range of 6 percent to 8 percent as reported and 2
percent to 4 percent in constant currency. At March 31, 2018
exchange rates, this translates to reported non-GAAP diluted
earnings per share of $2.75 to $2.81.
- Approximately 406 million shares
outstanding at fiscal 2019 year-end and weighted average diluted
shares outstanding of approximately 412 million for the fiscal
year.
- Cash flow from operations to decrease
in a range of 5 percent to 1 percent as reported and 7 percent to 3
percent in constant currency. At March 31, 2018 exchange
rates, this translates to reported cash flow from operations of
$1.14 billion to $1.18 billion. This includes the impact related to
the restructuring charge, which is estimated to be in the range of
$80 million to $100 million. It also includes an estimated
cash tax headwind of approximately $50 million compared to fiscal
2018 due to the convergence of ASC 606 and US Tax Reform. We
estimate the impact of cash taxes in fiscal 2019 to create an
approximate 4 point headwind to cash flow from operations and the
impact of restructuring to create a 6 to 8 point headwind to cash
flow from operations.
*In the outlook section, certain non-material differences
between growth rates and translated dollar amounts may arise from
impact of rounding.
**The tax rate guidance provided above assumes no further
material refinements of the provisional amount previously recorded
for the impact from US Tax Reform.
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.
(1)
Gartner, Inc. “Magic Quadrant for
Application Security Testing” by Ayal Tirosh, Dionisio Zumerle, and
Mark Horvath, March 19, 2018.
(2)
Gartner, Magic Quadrant for Application
Performance Monitoring Suites, by Will Cappelli, Sanjit Ganguli and
Federico De Silva, March 19, 2018.
(3)
Gartner, Magic Quadrant for Identity
Governance and Administration, by Felix Gaehtgens, Brian Iverson,
Kevin Kampman, February 21, 2018.
(4)
Gartner, Critical Capabilities for
Software Test, by Joachim Herschmann, Jim Scheibmeir, Thomas E.
Murphy, February 5, 2018
(5)
The Gartner Report(s) described herein,
(the "Gartner Report(s)") represent(s) research opinion or
viewpoints published, as part of a syndicated subscription service,
by Gartner, Inc. ("Gartner"), and are not representations of fact.
Each Gartner Report speaks as of its original publication date (and
not as of the date of this Annual Report) and the opinions
expressed in the Gartner Report(s) are subject to change without
notice.
Gartner does not endorse any vendor,
product or service depicted in its research publications, and does
not advise technology users to select only those vendors with the
highest ratings or other designation. Gartner research publications
consist of the opinions of Gartner's research organization and
should not be construed as statements of fact. Gartner disclaims
all warranties, expressed or implied, with respect to this
research, including any warranties of merchantability or fitness
for a particular purpose.
About CA Technologies
CA Technologies (NASDAQ: CA) creates software that fuels
transformation for companies and enables them to seize the
opportunities of the Application Economy. Software is at the heart
of every business in every industry. From planning, to development,
to management and security, CA is working with companies worldwide
to change the way we live, transact, and communicate - across
mobile, private and public cloud, distributed and mainframe
environments. Learn more at www.ca.com.
Follow CA Technologies
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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, net income, and
diluted earnings per share exclude the following items: non-cash
amortization of purchased software, internally developed software
and other intangible assets; share-based compensation expense;
charges relating to restructuring and rebalancing initiatives that
are large enough to require approval from the Company's Board of
Directors 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 effective tax rate on GAAP and non-GAAP
income from operations is the Company's provision for income taxes
expressed as a percentage of pre-tax GAAP and non-GAAP income from
operations, respectively. These tax rates are determined based on
an estimated effective full year tax rate, with the effective tax
rate for GAAP 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. The non-GAAP effective
tax rate is typically equal to the full year GAAP effective tax
rate, therefore no adjustment is required on an annual basis.
However, to minimize certain distortions that otherwise would have
resulted from applying this methodology to the significant
non-recurring impact on the Company’s tax expense from enactment of
the US Tax Reform in the third quarter of fiscal 2018, such impact
was recorded as a discrete item in fiscal 2018 only for purposes of
the GAAP effective tax rate, but excluded from the non-GAAP
effective tax rate, which also yields different full-year effective
tax rates for the Company’s GAAP and non-GAAP results in fiscal
2018. Non-GAAP diluted earnings per share also excludes the impact
of the US Tax Reform. Non-GAAP adjusted cash flow from operations
excludes payments associated with the Board-approved rebalancing
initiative, restructuring and other payments. Non-GAAP free cash
flow excludes purchases of property and equipment. 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, 2018, March 31, 2017 and March 31, 2016, 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
Certain statements in this release (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 business strategy by,
among other things, ensuring that any new offerings address the
needs of a rapidly changing market while not adversely affecting
the demand for the Company’s traditional products or the Company’s
profitability to an extent greater than anticipated, enabling the
Company’s sales force to execute renewals within the Company’s
existing customer base at acceptable renewal rates, enabling the
Company’s sales force to expand relationships with the Company’s
global customer base and address opportunities with new customers
(for example, in geographic regions where the Company has
underserved, or with chief information security officers and chief
development officers, who have not been traditional customers) at
levels sufficient to offset any decline in revenue in the Company’s
Mainframe Solutions segment and in certain mature product lines in
the Company’s Enterprise Solutions segment, effectively managing
the strategic shift in the Company’s business model to increase
sales through digital sales forces and indirectly through the
Company’s partners, as well as provide additional Software as a
Service offerings, offer try-and-buy models 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 financial performance to an extent greater
than anticipated, and effectively managing the Company’s pricing
and other go-to-market strategies, as well as improving the
Company’s brand, technology and innovation awareness in the
marketplace; the failure to innovate or adapt to technological
changes or develop and introduce new software products and services
in a timely and market-accepted 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 and other
business and legal risks associated with global operations; the
failure to sell and renew license agreement on a satisfactory
basis; the failure to expand partner programs and failure by the
Company’s partners to leverage their sales channels to drive
revenue growth; the ability to retain and attract qualified
professionals; changes in generally accepted accounting principles,
which includes adoption of revenue recognition requirements under
Accounting Standards Codification Topic 606; the ability to
successfully integrate acquired companies and products into the
Company’s existing business; hacking or other cybersecurity attacks
on the Company’s data center, network and software products, or the
IT environments of the Company’s business partners and customers;
the ability to adequately manage, evolve and protect the Company’s
information systems, infrastructure and processes; general economic
conditions and credit constraints, or unfavorable economic
conditions in a particular region, business or industry sector;
risks associated with sales to government customers; fluctuations
in foreign exchange rates; discovery of errors or omissions in the
Company’s software products; the failure to protect the Company’s
intellectual property rights and source code; 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 and/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 partners; potential tax liabilities; changes in market
conditions or the Company’s credit ratings; 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; the failure to effectively
execute on the Company’s announced restructuring plans;
successful and secure outsourcing of various functions to third
parties; the continued payment of dividends and repurchasing of
shares of the Company’s common stock; and other factors described
more fully in the Company’s other 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 the
forward-looking information described herein as believed, planned,
anticipated, expected, estimated, targeted or similarly identified.
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, which speak
only as of the date hereof.
Copyright © 2018 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:
2018
2017
2018
2017
Subscription and maintenance $ 840 $ 812 $ 3,326 $ 3,279
Professional services 81 77 311 301 Software fees and other
162 123 598 456
Total revenue $ 1,083 $
1,012 $ 4,235 $ 4,036
Expenses: Costs of licensing and
maintenance $ 79 $ 71 $ 302 $ 273 Cost of professional services 75
78 298 300 Amortization of capitalized software costs 66 61 271 243
Selling and marketing 283 281 1,061 1,028 General and
administrative 107 118 406 375 Product development and enhancements
166 158 642 586 Depreciation and amortization of other intangible
assets 28 21 107 77 Other expenses, net 12 9
29 19
Total expenses before interest and income taxes
$ 816 $ 797 $ 3,116 $ 2,901
Income before interest and income
taxes $ 267 $ 215 $ 1,119 $ 1,135 Interest expense, net
24 17 98 62
Income before income taxes
$ 243 $ 198 $ 1,021 $ 1,073 Income tax expense 36 41
545 298
Net Income $ 207 $ 157 $ 476 $ 775
Basic income per common share: $ 0.50 $ 0.38 $ 1.14 $
1.85
Basic weighted average shares used in computation 412
413 414 414
Diluted income per common share: $ 0.49 $
0.38 $ 1.13 $ 1.85
Diluted weighted average shares used in
computation 414 415 415 415
Table 2
CA Technologies Condensed Consolidated Balance Sheets
(in millions) March 31, March 31, 2018 2017
(unaudited) Cash and cash equivalents $ 3,405 $ 2,771 Trade
accounts receivable, net 793 764 Other current assets 210
198
Total current assets $ 4,408 $ 3,733
Property and equipment, net 237 237 Goodwill 6,804 6,857
Capitalized software and other intangible assets, net 1,111 1,307
Deferred income taxes 346 327 Other noncurrent assets, net
154 149
Total assets $ 13,060 $ 12,610 Current
portion of long-term debt $ 269 $ 18 Deferred revenue (billed or
collected) 2,289 2,222 Other current liabilities 763
766
Total current liabilities $ 3,321 $ 3,006
Long-term debt, net of current portion 2,514 2,773 Deferred income
taxes 111 119 Deferred revenue (billed or collected) 820 794 Other
noncurrent liabilities 399 229
Total
liabilities $ 7,165 $ 6,921 Common stock $ 59 $
59 Additional paid-in capital 3,744 3,702 Retained earnings 6,971
6,923 Accumulated other comprehensive loss (290) (483) Treasury
stock (4,589) (4,512)
Total stockholders’
equity $ 5,895 $ 5,689
Total liabilities and stockholders’
equity $ 13,060 $ 12,610
Table 3 CA
Technologies Condensed Consolidated Statements of Cash
Flows (unaudited) (in millions)
Three Months
Ended
March 31,
2018
2017
Operating activities: Net income $ 207 $ 157 Adjustments to
reconcile net income to net cash by operating activities:
Depreciation and amortization 94 82 Deferred income taxes (2 ) (1 )
Provision for bad debts 1 1 Share-based compensation expense 31 28
Other non-cash items 1 1 Foreign currency transaction losses - 1
Changes in other operating assets and liabilities, net of effect of
acquisitions: Increase in trade accounts receivable (68 ) (142 )
Increase in deferred revenue 345 356 Decrease in taxes payable, net
(94 ) (85 ) Decrease in accounts payable, accrued expenses and
other (5 ) (38 ) Increase in accrued salaries, wages and
commissions 23 44 Changes in other operating assets and
liabilities, net 15 16
Net cash
provided by operating activities $ 548 $ 420
Investing activities: Acquisitions of businesses, net of
cash acquired, and purchased software $ - $ (1,240 ) Purchases of
property and equipment (14 ) (17 ) Other investing activities
- (1 )
Net cash used in investing
activities $ (14 ) $ (1,258 )
Financing activities:
Dividends paid $ (107 ) $ (107 ) Purchases of common stock (20 ) -
Notional pooling repayments, net (13 ) (3 ) Debt (repayments)
borrowings, net (5 ) 849 Debt issuance costs - (5 ) Exercise of
common stock options 11 - Payments related to tax withholding for
share-based compensation (1 ) (1 )
Net cash (used
in) provided by financing activities (135 ) 733 Effect of
exchange rate changes on cash, cash equivalents and restricted cash
34 48
Increase (decrease) in cash,
cash equivalents and restricted cash $ 433 $ (57 )
Cash,
cash equivalents and restricted cash at beginning of period
2,974 2,829
Cash, cash equivalents
and restricted cash at end of period $ 3,407 $ 2,772
Table 4 CA Technologies
Operating Segments (unaudited) (dollars in millions)
Three Months Ended March
31, 2018 Fiscal Year Ended March 31, 2018
MainframeSolutions (1)
EnterpriseSolutions (1)
Services (1) Total
MainframeSolutions (1)
EnterpriseSolutions (1)
Services (1) Total Revenue (2) $ 549 $ 453 $ 81 $ 1,083 $
2,176 $ 1,748 $ 311 $ 4,235 Expenses (3) 213 428
76 717 785 1,597 302
2,684
Segment profit $ 336 $ 25 $ 5 $ 366 $ 1,391 $ 151 $ 9
$ 1,551
Segment operating margin 61% 6% 6% 34% 64% 9% 3% 37%
Segment profit $ 366 $ 1,551
Less: Purchased
software amortization 59 235 Other intangibles amortization 10 41
Internally developed software products amortization 7 36
Share-based compensation expense 31 120 Other (gains) expenses, net
(4) (8) - Interest expense, net 24 98
Income
before income taxes $ 243 $ 1,021 Three
Months Ended March 31, 2017 Fiscal Year Ended March 31, 2017
MainframeSolutions (1)
EnterpriseSolutions (1)
Services (1) Total
MainframeSolutions (1)
EnterpriseSolutions (1)
Services (1) Total Revenue (2) $ 535 $ 400 $ 77 $ 1,012 $
2,182 $ 1,553 $ 301 $ 4,036 Expenses (3) 217 397
79 693 851 1,378 302
2,531
Segment profit $ 318 $ 3 $ (2) $ 319 $ 1,331 $ 175 $
(1) $ 1,505
Segment operating margin 59% 1% -3% 32% 61% 11%
0% 37%
Segment profit $ 319 $ 1,505
Less:
Purchased software amortization 44 164 Other intangibles
amortization 6 19 Internally developed software products
amortization 17 79 Share-based compensation expense 28 108 Other
expenses, net (4) 9 - Interest expense, net 17 62
Income before income taxes $ 198 $ 1,073 (1)
The Company’s Mainframe Solutions and Enterprise Solutions segments
are comprised of its software business organized by the nature of
the Company’s software offerings and the platforms on which the
products operate. The Services segment is comprised of product
implementation, consulting, customer education and customer
training services, 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 assigned to the Mainframe Solutions
and Enterprise Solutions segments is 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 products); (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 generally 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 (gains)
expenses, net consists of costs associated with certain foreign
exchange derivative hedging gains and losses, and other
miscellaneous costs.
Table 5 CA
Technologies Constant Currency Summary (unaudited)
(dollars in millions)
Three Months Ended March 31, Fiscal Year Ended
March 31,
2018
2017
% Increase(Decrease)in $ US
% Increase(Decrease)in ConstantCurrency
(1)
2018 2017
% Increase(Decrease)in $ US
% Increase(Decrease)in ConstantCurrency
(1)
Bookings $ 1,523 $ 1,423 7% 5% $ 4,074 $ 4,763 (14)%
(16)%
Revenue: North America $ 714 $ 683 5% 4% $
2,813 $ 2,716 4% 3% International 369 329 12% 2%
1,422 1,320 8% 4% Total revenue $ 1,083 $ 1,012 7% 4%
$ 4,235 $ 4,036 5% 4%
Revenue: Subscription and
maintenance $ 840 $ 812 3% 0% $ 3,326 $ 3,279 1% 0% Professional
services 81 77 5% 1% 311 301 3% 2% Software fees and other
162 123 32% 28% 598 456 31% 30% Total revenue
$ 1,083 $ 1,012 7% 4% $ 4,235 $ 4,036 5% 4%
Segment
Revenue: Mainframe solutions $ 549 $ 535 3% (1)% $ 2,176 $
2,182 0% (1)% Enterprise solutions 453 400 13% 10% 1,748 1,553 13%
11% Services 81 77 5% 1% 311 301 3% 2%
Total expenses
before interest and income taxes: Total GAAP $ 816 $ 797 2%
(1)% $ 3,116 $ 2,901 7% 5% Total non-GAAP (2) 717 693 3% (3)% 2,684
2,531 6% 4% (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, 2017, 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. 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,
2018
2017
2018
2017
GAAP net (loss) income $ 207 $ 157 $ 476 $ 775 GAAP income tax
expense 36 41 545 298 Interest expense, net 24 17
98 62 GAAP income before interest and income taxes $
267 $ 215 $ 1,119 $ 1,135 GAAP operating margin (% of revenue) (1)
25% 21% 26% 28% Non-GAAP adjustments to expenses: Costs of
licensing and maintenance (2) $ 3 $ 2 $ 8 $ 7 Cost of professional
services (2) 1 - 3 3 Amortization of capitalized software costs (3)
66 61 271 243 Selling and marketing (2) 9 9 38 37 General and
administrative (2) 12 11 45 38 Product development and enhancements
(2) 6 6 26 23 Depreciation and amortization of other intangible
assets (4) 10 6 41 19 Other (gains) expenses, net (5) (8)
9 - - Total Non-GAAP adjustment to operating
expenses $ 99 $ 104 $ 432 $ 370 Non-GAAP income before interest and
income taxes $ 366 $ 319 $ 1,551 $ 1,505 Non-GAAP operating margin
(% of revenue) (6) 34% 32% 37% 37% Interest expense, net 24
17 98 62 GAAP income tax expense 36 41 545 298 Non-GAAP adjustment
to income tax expense (7) 20 34 107 103 Non-GAAP adjustment US Tax
Reform (8) 28 - (290) - Non-GAAP income
tax expense $ 84 $ 75 $ 362 $ 401 Non-GAAP net income $ 258 $ 227 $
1,091 $ 1,042 (1) GAAP operating margin is calculated
by dividing GAAP income 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, 2018 and 2017, non-GAAP
adjustment consists of $59 million and $44 million of purchased
software amortization and $7 million and $17 million of internally
developed software products amortization, respectively. For the
twelve month periods ending March 31, 2018 and 2017, non-GAAP
adjustment consists of $235 million and $164 million of purchased
software amortization and $36 million and $79 million of internally
developed software products amortization, respectively. (4)
Non-GAAP adjustment consists of other intangibles amortization.
(5) Non-GAAP adjustment consists 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.
(6) Non-GAAP operating margin is calculated by dividing
non-GAAP income before interest and income taxes by total revenue
(refer to Table 1 for total revenue). (7) The full year
non-GAAP income tax expense is different from GAAP income tax
expense because of the difference in non-GAAP income 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. (8) The Company’s
tax expense from enactment of the US Tax Reform in the third
quarter of fiscal 2018 was recorded as a discrete item in fiscal
2018 only for purposes of the GAAP income tax expense, and was
excluded from the non-GAAP income tax expense. Refer to the
discussion of non-GAAP financial measures included in the
accompanying press release for additional information.
Certain non-material differences may arise versus actual from
impact of rounding.
Table 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
2018
2017
2018
2017
Total expenses before interest and income taxes $ 816 $ 797
$ 3,116 $ 2,901 Non-GAAP operating adjustments: Purchased
software amortization 59 44 235 164 Other intangibles amortization
10 6 41 19 Internally developed software products amortization 7 17
36 79 Share-based compensation 31 28 120 108 Other (gains)
expenses, net (1) (8) 9 - - Total
non-GAAP operating adjustment $ 99 $ 104 $ 432 $ 370 Total
non-GAAP operating expenses $ 717 $ 693 $ 2,684 $ 2,531
Three Months Ended Fiscal Year Ended
March 31,
March 31,
Diluted
EPS
2018
2017
2018
2017
GAAP diluted EPS $ 0.49 $ 0.38 $ 1.13 $ 1.85 Non-GAAP
adjustments: Purchased software amortization 0.14 0.10 0.56 0.39
Other intangibles amortization 0.02 0.01 0.09 0.04 Internally
developed software products amortization 0.02 0.04 0.09 0.19
Share-based compensation 0.08 0.07 0.29 0.26 Other (gains)
expenses, net (1) (0.02) 0.02 - - Tax effect of non-GAAP
adjustments (0.06) (0.05) (0.26) (0.25) Non-GAAP effective tax rate
adjustments (2) (0.05) (0.03) 0.69 -
Total non-GAAP adjustment $ 0.13 $ 0.16 $ 1.46 $ 0.63
Non-GAAP diluted EPS $ 0.62 $ 0.54 $ 2.59 $ 2.48 (1)
Other (gains) expenses, net consists of costs associated with
certain foreign exchange derivative hedging gains and losses, and
other miscellaneous costs. (2) The effective tax rate on
GAAP and non-GAAP income from operations is the Company's provision
for income taxes expressed as a percentage of pre-tax GAAP and
non-GAAP income from operations, respectively. These tax rates are
determined based on an estimated effective full year tax rate, with
the effective tax rate for GAAP including the impact of discrete
items in the period in which such items arise and the effective tax
rate for non-GAAP allocating the impact of discrete items pro rata
to the fiscal year's remaining reporting periods. The non-GAAP
effective tax rate is typically equal to the full year GAAP
effective tax rate, therefore no adjustment is required on an
annual basis. However, to minimize certain distortions that
otherwise would have resulted from applying this methodology to the
significant non-recurring impact on the Company’s tax expense from
enactment of the US Tax Reform in the third quarter of fiscal 2018,
such impact was recorded as a discrete item in fiscal 2018 only for
purposes of the GAAP effective tax rate, but excluded from the
non-GAAP effective tax rate, which also yields different full-year
effective tax rates for the Company’s GAAP and non-GAAP results in
fiscal 2018.
Refer to the discussion of non-GAAP
financial measures included in the accompanying press release for
additional information.
Certain non-material differences may arise versus actual
from impact of rounding.
Table 8
CA Technologies
Effective Tax Rate
Reconciliation
GAAP and Non-GAAP
(unaudited) (dollars in millions) Three Months Ended
Fiscal Year Ended
March 31,
2018
March 31,
2018
GAAP
Non-GAAP
GAAP
Non-GAAP
Income before interest and income taxes (1) $ 267 $ 366 $
1,119 $ 1,551 Interest expense, net 24 24 98
98 Income before income taxes $ 243 $ 342 $ 1,021 $ 1,453
Statutory tax rate 31.55% 31.55% 31.55% 31.55% Tax at
statutory rate $ 77 $ 108 $ 322 $ 458 Adjustments for discrete and
permanent items (2) (41) (52) 223 194 US Tax Reform Adjustment (2)
- 28 - (290) Total tax expense $ 36 $
84 $ 545 $ 362 Effective tax rate (2) 14.81% 24.56% 53.38%
24.91% Three Months Ended Fiscal Year Ended
March 31,
2017
March 31,
2017
GAAP
Non-GAAP
GAAP
Non-GAAP
Income before interest and income taxes (1) $ 215 $ 319 $
1,135 $ 1,505 Interest expense, net 17 17 62
62 Income before income taxes $ 198 $ 302 $ 1,073 $ 1,443
Statutory tax rate 35.00% 35.00% 35.00% 35.00% Tax at
statutory rate $ 69 $ 106 $ 376 $ 505 Adjustments for discrete and
permanent items (2) (28) (31) (78)
(104) Total tax expense $ 41 $ 75 $ 298 $ 401 Effective tax
rate (2) 20.71% 24.83% 27.77% 27.79% (1) Refer to
Table 6 for a reconciliation of income before interest and income
taxes on a GAAP basis to income before interest and income taxes on
a non-GAAP basis. (2) The effective tax rate on GAAP and
non-GAAP income from operations is the Company's provision for
income taxes expressed as a percentage of pre-tax GAAP and non-GAAP
income from operations, respectively. These tax rates are
determined based on an estimated effective full year tax rate, with
the effective tax rate for GAAP including the impact of discrete
items in the period in which such items arise and the effective tax
rate for non-GAAP allocating the impact of discrete items pro rata
to the fiscal year's remaining reporting periods. The non-GAAP
effective tax rate is typically equal to the full year GAAP
effective tax rate, therefore no adjustment is required on an
annual basis. However, to minimize certain distortions that
otherwise would have resulted from applying this methodology to the
significant non-recurring impact on the Company’s tax expense from
enactment of the US Tax Reform in the third quarter of fiscal 2018,
such impact was recorded as a discrete item in fiscal 2018 only for
purposes of the GAAP effective tax rate, but excluded from the
non-GAAP effective tax rate, which also yields different full-year
effective tax rates for the Company’s GAAP and non-GAAP results in
fiscal 2018. Refer to the discussion of non-GAAP financial
measures included in the accompanying press release for additional
information. Certain non-material differences may arise
versus actual from impact of rounding.
Table 9
CA Technologies Reconciliation of Projected GAAP Metrics
to Projected Non-GAAP Metrics (unaudited) Fiscal Year
Ending
Projected Diluted
EPS
March 31,
2019
Projected GAAP diluted EPS range $ 1.78
to
$ 1.87 Non-GAAP adjustments: Purchased software amortization
0.46 0.46 Other intangibles amortization 0.09 0.09 Internally
developed software products amortization 0.02 0.02 Share-based
compensation 0.29 0.29 Restructuring expense 0.38 0.33 Tax effect
of non-GAAP adjustments (0.27) (0.25) Total non-GAAP
adjustment $ 0.97 $ 0.94 Projected non-GAAP diluted EPS
range $ 2.75 to $ 2.81 Fiscal Year Ending
Projected Operating
Margin
March 31,
2019
Projected GAAP operating margin range 24% to 26%
Non-GAAP operating adjustments: Purchased software amortization 4%
4% Other intangibles amortization 1% 1% Internally developed
software products amortization 0% 0% Share-based compensation 3% 3%
Restructuring expense 5% 3% Total non-GAAP operating
adjustment 13% 11% Projected non-GAAP
operating margin 37% to 37% Refer to the
discussion of non-GAAP financial measures included in the
accompanying press release for additional information.
Certain non-material differences may arise versus actual from
impact of rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180508006642/en/
CA TechnologiesDarlan MonterisiCorporate Communications(646)
826-6071darlan.monterisi@ca.comorJennifer
DiClericoCorporate Communications(212) 415-6997jennifer.diclerico@ca.comorTraci TsuchiguchiInvestor Relations(650)
534-9814traci.tsuchiguchi@ca.comorStefan PutyeraInvestor
Relations(631) 342-4710stefan.putyera@ca.com
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