Delaware
|
13-2857434
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
|
|
One CA Plaza
Islandia, New York
|
11749
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of Class
|
|
Shares Outstanding
|
Common Stock
|
|
as of October 22, 2012
|
par value $0.10 per share
|
|
459,287,341
|
|
|
Page
|
PART I.
|
Financial Information
|
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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||
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Item 1.
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||
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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|
September 30,
2012 |
|
March 31,
2012 |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,086
|
|
|
$
|
2,679
|
|
Short-term investments
|
162
|
|
|
—
|
|
||
Trade accounts receivable, net
|
584
|
|
|
902
|
|
||
Deferred income taxes
|
228
|
|
|
231
|
|
||
Other current assets
|
144
|
|
|
153
|
|
||
TOTAL CURRENT ASSETS
|
$
|
3,204
|
|
|
$
|
3,965
|
|
Property and equipment, net of accumulated depreciation of $750 and $707, respectively
|
$
|
350
|
|
|
$
|
386
|
|
Goodwill
|
5,856
|
|
|
5,856
|
|
||
Capitalized software and other intangible assets, net
|
1,312
|
|
|
1,389
|
|
||
Deferred income taxes
|
169
|
|
|
151
|
|
||
Other noncurrent assets, net
|
249
|
|
|
250
|
|
||
TOTAL ASSETS
|
$
|
11,140
|
|
|
$
|
11,997
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES
|
|
|
|
||||
Current portion of long-term debt
|
$
|
14
|
|
|
$
|
14
|
|
Accounts payable
|
90
|
|
|
95
|
|
||
Accrued salaries, wages and commissions
|
236
|
|
|
350
|
|
||
Accrued expenses and other current liabilities
|
435
|
|
|
444
|
|
||
Deferred revenue (billed or collected)
|
2,101
|
|
|
2,658
|
|
||
Taxes payable, other than income taxes payable
|
39
|
|
|
80
|
|
||
Federal, state and foreign income taxes payable
|
204
|
|
|
96
|
|
||
Deferred income taxes
|
14
|
|
|
14
|
|
||
TOTAL CURRENT LIABILITIES
|
$
|
3,133
|
|
|
$
|
3,751
|
|
Long-term debt, net of current portion
|
$
|
1,280
|
|
|
$
|
1,287
|
|
Federal, state and foreign income taxes payable
|
417
|
|
|
430
|
|
||
Deferred income taxes
|
44
|
|
|
44
|
|
||
Deferred revenue (billed or collected)
|
826
|
|
|
972
|
|
||
Other noncurrent liabilities
|
110
|
|
|
116
|
|
||
TOTAL LIABILITIES
|
$
|
5,810
|
|
|
$
|
6,600
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Preferred stock, no par value, 10,000,000 shares authorized; No shares issued and outstanding
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, $0.10 par value, 1,100,000,000 shares authorized; 589,695,081 and 589,695,081 shares issued; 453,908,420 and 466,183,134 shares outstanding, respectively
|
59
|
|
|
59
|
|
||
Additional paid-in capital
|
3,566
|
|
|
3,491
|
|
||
Retained earnings
|
5,092
|
|
|
4,865
|
|
||
Accumulated other comprehensive loss
|
(118
|
)
|
|
(108
|
)
|
||
Treasury stock, at cost, 135,786,661 and 123,511,947 shares, respectively
|
(3,269
|
)
|
|
(2,910
|
)
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
$
|
5,330
|
|
|
$
|
5,397
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
11,140
|
|
|
$
|
11,997
|
|
|
For the Three
Months Ended September 30, |
|
For the Six
Months Ended September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
REVENUE
|
|
|
|
|
|
|
|
||||||||
Subscription and maintenance revenue
|
$
|
963
|
|
|
$
|
1,022
|
|
|
$
|
1,940
|
|
|
$
|
2,029
|
|
Professional services
|
95
|
|
|
96
|
|
|
186
|
|
|
186
|
|
||||
Software fees and other
|
94
|
|
|
82
|
|
|
171
|
|
|
148
|
|
||||
TOTAL REVENUE
|
$
|
1,152
|
|
|
$
|
1,200
|
|
|
$
|
2,297
|
|
|
$
|
2,363
|
|
EXPENSES
|
|
|
|
|
|
|
|
||||||||
Costs of licensing and maintenance
|
$
|
69
|
|
|
$
|
71
|
|
|
$
|
138
|
|
|
$
|
138
|
|
Cost of professional services
|
88
|
|
|
91
|
|
|
174
|
|
|
179
|
|
||||
Amortization of capitalized software costs
|
67
|
|
|
55
|
|
|
131
|
|
|
105
|
|
||||
Selling and marketing
|
317
|
|
|
370
|
|
|
622
|
|
|
696
|
|
||||
General and administrative
|
98
|
|
|
104
|
|
|
208
|
|
|
218
|
|
||||
Product development and enhancements
|
123
|
|
|
140
|
|
|
248
|
|
|
258
|
|
||||
Depreciation and amortization of other intangible assets
|
40
|
|
|
43
|
|
|
81
|
|
|
90
|
|
||||
Other (gains) expenses, net
|
13
|
|
|
(7
|
)
|
|
(23
|
)
|
|
4
|
|
||||
TOTAL EXPENSES BEFORE INTEREST AND INCOME TAXES
|
$
|
815
|
|
|
$
|
867
|
|
|
$
|
1,579
|
|
|
$
|
1,688
|
|
Income from continuing operations before interest and income taxes
|
$
|
337
|
|
|
$
|
333
|
|
|
$
|
718
|
|
|
$
|
675
|
|
Interest expense, net
|
10
|
|
|
6
|
|
|
21
|
|
|
15
|
|
||||
Income from continuing operations before income taxes
|
$
|
327
|
|
|
$
|
327
|
|
|
$
|
697
|
|
|
$
|
660
|
|
Income tax expense
|
105
|
|
|
91
|
|
|
235
|
|
|
196
|
|
||||
INCOME FROM CONTINUING OPERATIONS
|
$
|
222
|
|
|
$
|
236
|
|
|
$
|
462
|
|
|
$
|
464
|
|
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
NET INCOME
|
$
|
222
|
|
|
$
|
236
|
|
|
$
|
462
|
|
|
$
|
477
|
|
BASIC INCOME PER SHARE
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.48
|
|
|
$
|
0.47
|
|
|
$
|
0.99
|
|
|
$
|
0.92
|
|
Income from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
||||
Net income
|
$
|
0.48
|
|
|
$
|
0.47
|
|
|
$
|
0.99
|
|
|
$
|
0.95
|
|
Basic weighted average shares used in computation
|
458
|
|
|
493
|
|
|
462
|
|
|
497
|
|
||||
DILUTED INCOME PER SHARE
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.48
|
|
|
$
|
0.47
|
|
|
$
|
0.99
|
|
|
$
|
0.92
|
|
Income from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
||||
Net income
|
$
|
0.48
|
|
|
$
|
0.47
|
|
|
$
|
0.99
|
|
|
$
|
0.95
|
|
Diluted weighted average shares used in computation
|
459
|
|
|
494
|
|
|
463
|
|
|
498
|
|
|
For the Three
Months Ended September 30, |
|
For the Six
Months Ended September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income
|
$
|
222
|
|
|
$
|
236
|
|
|
$
|
462
|
|
|
$
|
477
|
|
OTHER COMPREHENSIVE (LOSS)/INCOME
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
16
|
|
|
(85
|
)
|
|
(10
|
)
|
|
(68
|
)
|
||||
TOTAL OTHER COMPREHENSIVE INCOME
|
$
|
16
|
|
|
$
|
(85
|
)
|
|
$
|
(10
|
)
|
|
$
|
(68
|
)
|
COMPREHENSIVE INCOME
|
$
|
238
|
|
|
$
|
151
|
|
|
$
|
452
|
|
|
$
|
409
|
|
|
For the Six
Months Ended September 30, |
||||||
|
2012
|
|
2011
|
||||
OPERATING ACTIVITIES FROM CONTINUING OPERATIONS:
|
|
|
|
||||
Net income
|
$
|
462
|
|
|
$
|
477
|
|
Income from discontinued operations
|
—
|
|
|
(13
|
)
|
||
Income from continuing operations
|
$
|
462
|
|
|
$
|
464
|
|
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
212
|
|
|
195
|
|
||
Provision for deferred income taxes
|
(2
|
)
|
|
123
|
|
||
Provision for bad debts
|
3
|
|
|
—
|
|
||
Share-based compensation expense
|
44
|
|
|
41
|
|
||
Asset impairments and other non-cash items
|
3
|
|
|
9
|
|
||
Foreign currency transaction losses (gains)
|
19
|
|
|
(1
|
)
|
||
Changes in other operating assets and liabilities, net of effect of acquisitions:
|
|
|
|
||||
Decrease in trade accounts receivable
|
306
|
|
|
255
|
|
||
Decrease in deferred revenue
|
(677
|
)
|
|
(483
|
)
|
||
Increase (decrease) in taxes payable, net
|
17
|
|
|
(215
|
)
|
||
Increase in accounts payable, accrued expenses and other
|
11
|
|
|
10
|
|
||
Decrease in accrued salaries, wages and commissions
|
(113
|
)
|
|
(21
|
)
|
||
Changes in other operating assets and liabilities
|
(13
|
)
|
|
(44
|
)
|
||
NET CASH PROVIDED BY OPERATING ACTIVITIES – CONTINUING OPERATIONS
|
$
|
272
|
|
|
$
|
333
|
|
INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:
|
|
|
|
||||
Acquisitions of businesses, net of cash acquired, and purchased software
|
$
|
(12
|
)
|
|
$
|
(369
|
)
|
Purchases of property and equipment
|
(32
|
)
|
|
(40
|
)
|
||
Proceeds from divestiture of assets
|
—
|
|
|
7
|
|
||
Capitalized software development costs
|
(78
|
)
|
|
(96
|
)
|
||
Purchases of investments
|
(154
|
)
|
|
(71
|
)
|
||
Proceeds from sale of investments
|
—
|
|
|
27
|
|
||
Maturities of investments
|
—
|
|
|
43
|
|
||
Other investing activities
|
2
|
|
|
(1
|
)
|
||
NET CASH USED IN INVESTING ACTIVITIES – CONTINUING OPERATIONS
|
$
|
(274
|
)
|
|
$
|
(500
|
)
|
FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:
|
|
|
|
||||
Dividends paid
|
$
|
(235
|
)
|
|
$
|
(50
|
)
|
Purchases of common stock
|
(344
|
)
|
|
(353
|
)
|
||
Debt borrowings
|
513
|
|
|
164
|
|
||
Debt repayments
|
(487
|
)
|
|
(353
|
)
|
||
Exercise of common stock options and other
|
22
|
|
|
11
|
|
||
NET CASH USED IN FINANCING ACTIVITIES – CONTINUING OPERATIONS
|
$
|
(531
|
)
|
|
$
|
(581
|
)
|
Effect of exchange rate changes on cash
|
$
|
(60
|
)
|
|
$
|
(85
|
)
|
NET CHANGE IN CASH AND CASH EQUIVALENTS – CONTINUING OPERATIONS
|
$
|
(593
|
)
|
|
$
|
(833
|
)
|
CASH USED IN OPERATING ACTIVITIES – DISCONTINUED OPERATIONS
|
$
|
—
|
|
|
$
|
(17
|
)
|
CASH PROVIDED BY INVESTING ACTIVITIES – DISCONTINUED OPERATIONS
|
—
|
|
|
4
|
|
||
NET EFFECT OF DISCONTINUED OPERATIONS ON CASH AND CASH EQUIVALENTS
|
$
|
—
|
|
|
$
|
(13
|
)
|
DECREASE IN CASH AND CASH EQUIVALENTS
|
$
|
(593
|
)
|
|
$
|
(846
|
)
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
$
|
2,679
|
|
|
$
|
3,049
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
2,086
|
|
|
$
|
2,203
|
|
•
|
Level 1: Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
|
•
|
Level 2: Quoted prices for identical assets and liabilities in markets that are not active, or quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and
|
•
|
Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
|
(1)
|
Included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheets.
|
|
Six Months Ended
September 30, 2011 |
||
|
(in millions)
|
||
Subscription and maintenance revenue
|
$
|
15
|
|
Total revenue
|
$
|
15
|
|
Loss from operations of discontinued components, net of tax benefit of $6 million
|
$
|
(10
|
)
|
Gain on disposal of discontinued components, net of taxes
|
23
|
|
|
Income from discontinued operations, net of taxes
|
$
|
13
|
|
(in millions)
|
Accrued
Balance at March 31, 2012 |
|
Expense
|
|
Change
in
Estimate
|
|
Payments
|
|
Accretion
and Other
|
|
Accrued
Balance at September 30, 2012 |
||||||||||||
Severance
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
3
|
|
Facilities abandonment
|
40
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(3
|
)
|
|
32
|
|
||||||
Total accrued liabilities
|
$
|
53
|
|
|
|
|
|
|
|
|
|
|
$
|
35
|
|
(in millions)
|
Accrued
Balance at March 31, 2011 |
|
Expense
|
|
Change
in
Estimate
|
|
Payments
|
|
Accretion
and Other
|
|
Accrued
Balance at September 30, 2011 |
||||||||||||
Severance
|
$
|
8
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
37
|
|
Facilities abandonment
|
47
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
1
|
|
|
42
|
|
||||||
Total accrued liabilities
|
$
|
55
|
|
|
|
|
|
|
|
|
|
|
$
|
79
|
|
|
September 30,
2012 |
|
March 31,
2012 |
||||
|
(in millions)
|
||||||
Accounts receivable – billed
|
$
|
511
|
|
|
$
|
812
|
|
Accounts receivable – unbilled
|
72
|
|
|
80
|
|
||
Other receivables
|
21
|
|
|
26
|
|
||
Less: Allowances
|
(20
|
)
|
|
(16
|
)
|
||
Trade accounts receivable, net
|
$
|
584
|
|
|
$
|
902
|
|
|
At September 30, 2012
|
||||||||||||||||||
|
Gross
Amortizable
Assets
|
|
Less: Fully
Amortized
Assets
|
|
Remaining
Amortizable
Assets
|
|
Accumulated
Amortization
on Remaining
Amortizable
Assets
|
|
Net
Assets
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Purchased software products
|
$
|
5,631
|
|
|
$
|
4,740
|
|
|
$
|
891
|
|
|
$
|
275
|
|
|
$
|
616
|
|
Internally developed software products
|
1,444
|
|
|
615
|
|
|
829
|
|
|
293
|
|
|
536
|
|
|||||
Other intangible assets
|
812
|
|
|
429
|
|
|
383
|
|
|
223
|
|
|
160
|
|
|||||
Total capitalized software costs and other intangible assets
|
$
|
7,887
|
|
|
$
|
5,784
|
|
|
$
|
2,103
|
|
|
$
|
791
|
|
|
$
|
1,312
|
|
|
At March 31, 2012
|
||||||||||||||||||
|
Gross
Amortizable
Assets
|
|
Less: Fully
Amortized
Assets
|
|
Remaining
Amortizable
Assets
|
|
Accumulated
Amortization
on Remaining
Amortizable
Assets
|
|
Net
Assets
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Purchased software products
|
$
|
5,628
|
|
|
$
|
4,733
|
|
|
$
|
895
|
|
|
$
|
228
|
|
|
$
|
667
|
|
Internally developed software products
|
1,366
|
|
|
574
|
|
|
792
|
|
|
258
|
|
|
534
|
|
|||||
Other intangible assets
|
814
|
|
|
412
|
|
|
402
|
|
|
214
|
|
|
188
|
|
|||||
Total capitalized software costs and other intangible assets
|
$
|
7,808
|
|
|
$
|
5,719
|
|
|
$
|
2,089
|
|
|
$
|
700
|
|
|
$
|
1,389
|
|
|
Year Ended March 31,
|
||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Capitalized software:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchased
|
$
|
107
|
|
|
$
|
99
|
|
|
$
|
88
|
|
|
$
|
86
|
|
|
$
|
84
|
|
Internally developed
|
157
|
|
|
152
|
|
|
128
|
|
|
97
|
|
|
63
|
|
|||||
Other intangible assets
|
54
|
|
|
48
|
|
|
40
|
|
|
26
|
|
|
9
|
|
|||||
Total
|
$
|
318
|
|
|
$
|
299
|
|
|
$
|
256
|
|
|
$
|
209
|
|
|
$
|
156
|
|
|
September 30,
2012 |
|
March 31,
2012 |
||||
|
(in millions)
|
||||||
Current:
|
|
|
|
||||
Subscription and maintenance
|
$
|
1,943
|
|
|
$
|
2,479
|
|
Professional services
|
140
|
|
|
162
|
|
||
Financing obligations and other
|
18
|
|
|
17
|
|
||
Total deferred revenue (billed or collected) – current
|
$
|
2,101
|
|
|
$
|
2,658
|
|
Noncurrent:
|
|
|
|
||||
Subscription and maintenance
|
$
|
787
|
|
|
$
|
935
|
|
Professional services
|
37
|
|
|
35
|
|
||
Financing obligations and other
|
2
|
|
|
2
|
|
||
Total deferred revenue (billed or collected) – noncurrent
|
$
|
826
|
|
|
$
|
972
|
|
Total deferred revenue (billed or collected)
|
$
|
2,927
|
|
|
$
|
3,630
|
|
|
Amount of Net (Gain)/Loss Recognized in the
Condensed Consolidated Statements of Operations
(in millions)
|
||||||
|
Three Months Ended
September 30, 2012 |
|
Three Months Ended
September 30, 2011 |
||||
Interest expense, net – interest rate swaps designated as fair value hedges
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
Other (gains) expenses, net – foreign currency contracts
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
Amount of Net (Gain)/Loss Recognized in the
Condensed Consolidated Statements of Operations
(in millions)
|
||||||
|
Six Months Ended
September 30, 2012 |
|
Six Months Ended
September 30, 2011 |
||||
Interest expense, net – interest rate swaps designated as fair value hedges
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
Other (gains) expenses, net – foreign currency contracts
|
$
|
10
|
|
|
$
|
1
|
|
|
At September 30, 2012
|
|
At March 31, 2012
|
|
||||||||||||||||||||
|
Fair Value
Measurement Using
Input Types
|
|
Estimated
Fair
Value
|
|
Fair Value
Measurement Using
Input Types
|
|
Estimated
Fair
Value
|
|
||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
977
|
|
|
$
|
—
|
|
|
$
|
977
|
|
(1)
|
$
|
1,374
|
|
|
$
|
—
|
|
|
$
|
1,374
|
|
(2)
|
Foreign exchange derivatives
(3)
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
||||||
Interest rate derivatives
(3)
|
—
|
|
|
25
|
|
|
25
|
|
|
—
|
|
|
27
|
|
|
27
|
|
|
||||||
Total Assets
|
$
|
977
|
|
|
$
|
33
|
|
|
$
|
1,010
|
|
|
$
|
1,374
|
|
|
$
|
29
|
|
|
$
|
1,403
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange derivatives
(3)
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
Total Liabilities
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
(1)
|
At
September 30, 2012
, the Company had approximately
$927 million
and
$50 million
of investments in money market funds classified as “Cash and cash equivalents” and “Other noncurrent assets, net” for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheet.
|
(2)
|
At
March 31, 2012
, the Company had approximately
$1,324 million
and
$50 million
of investments in money market funds classified as “Cash and cash equivalents” and “Other noncurrent assets, net” for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheet.
|
(3)
|
See Note H, “Derivatives” for additional information. Interest rate derivatives fair value excludes accrued interest.
|
|
At September 30, 2012
|
|
At March 31, 2012
|
||||||||||||
(in millions)
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Total debt
(1)
|
$
|
1,294
|
|
|
$
|
1,437
|
|
|
$
|
1,301
|
|
|
$
|
1,408
|
|
Facilities abandonment reserve
(2)
|
$
|
33
|
|
|
$
|
38
|
|
|
$
|
42
|
|
|
$
|
48
|
|
(1)
|
Estimated fair value of total debt is based on quoted prices for similar liabilities for which significant inputs are observable except for certain long-term lease obligations, for which fair value approximates carrying value (Level 2).
|
(2)
|
Estimated fair value for the facilities abandonment reserve is determined using the Company’s incremental borrowing rate at
September 30, 2012
and
March 31, 2012
. At
September 30, 2012
and
March 31, 2012
, the facilities abandonment reserve included approximately
$14 million
and
$16 million
, respectively, in “Accrued expenses and other current liabilities” and approximately
$19 million
and
$26 million
, respectively, in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets (Level 3).
|
Declaration Date
|
|
Dividend Per Share
|
|
Record Date
|
|
Total Amount
|
|
Payment Date
|
||||
May 8, 2012
|
|
$
|
0.25
|
|
|
May 22, 2012
|
|
$
|
119
|
|
|
June 12, 2012
|
August 2, 2012
|
|
$
|
0.25
|
|
|
August 14, 2012
|
|
$
|
116
|
|
|
September 11, 2012
|
Declaration Date
|
|
Dividend Per Share
|
|
Record Date
|
|
Total Amount
|
|
Payment Date
|
||||
May 12, 2011
|
|
$
|
0.05
|
|
|
May 23, 2011
|
|
$
|
25
|
|
|
June 16, 2011
|
August 3, 2011
|
|
$
|
0.05
|
|
|
August 16, 2011
|
|
$
|
25
|
|
|
September 14, 2011
|
|
Three
Months Ended September 30, |
|
Six
Months Ended September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Basic income from continuing operations per common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
222
|
|
|
$
|
236
|
|
|
$
|
462
|
|
|
$
|
464
|
|
Less: Income from continuing operations allocable to participating securities
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(6
|
)
|
||||
Income from continuing operations allocable to common shares
|
$
|
220
|
|
|
$
|
233
|
|
|
$
|
457
|
|
|
$
|
458
|
|
Weighted average common shares outstanding
|
458
|
|
|
493
|
|
|
462
|
|
|
497
|
|
||||
Basic income from continuing operations per common share
|
$
|
0.48
|
|
|
$
|
0.47
|
|
|
$
|
0.99
|
|
|
$
|
0.92
|
|
Diluted income from continuing operations per common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
222
|
|
|
$
|
236
|
|
|
$
|
462
|
|
|
$
|
464
|
|
Less: Income from continuing operations allocable to participating securities
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(6
|
)
|
||||
Income from continuing operations allocable to common shares
|
$
|
220
|
|
|
$
|
233
|
|
|
$
|
457
|
|
|
$
|
458
|
|
Weighted average shares outstanding and common share equivalents:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
458
|
|
|
493
|
|
|
462
|
|
|
497
|
|
||||
Weighted average effect of share-based payment awards
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Denominator in calculation of diluted income per share
|
459
|
|
|
494
|
|
|
463
|
|
|
498
|
|
||||
Diluted income from continuing operations per common share
|
$
|
0.48
|
|
|
$
|
0.47
|
|
|
$
|
0.99
|
|
|
$
|
0.92
|
|
|
Three Months
Ended September 30, |
|
Six Months
Ended September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
(in millions)
|
||||||||||||||
Costs of licensing and maintenance
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Cost of professional services
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Selling and marketing
|
8
|
|
|
6
|
|
|
18
|
|
|
16
|
|
||||
General and administrative
|
7
|
|
|
4
|
|
|
15
|
|
|
12
|
|
||||
Product development and enhancements
|
4
|
|
|
4
|
|
|
8
|
|
|
9
|
|
||||
Share-based compensation expense before tax
|
$
|
21
|
|
|
$
|
16
|
|
|
$
|
44
|
|
|
$
|
41
|
|
Income tax benefit
|
(8
|
)
|
|
(6
|
)
|
|
(16
|
)
|
|
(14
|
)
|
||||
Net share-based compensation expense
|
$
|
13
|
|
|
$
|
10
|
|
|
$
|
28
|
|
|
$
|
27
|
|
|
Unrecognized
Compensation
Costs
|
|
Weighted
Average Period
Expected to be
Recognized
|
||
|
(in millions)
|
|
(in years)
|
||
Stock option awards
|
$
|
7
|
|
|
2.3
|
Restricted stock units
|
19
|
|
|
2.1
|
|
Restricted stock awards
|
81
|
|
|
2.1
|
|
Performance share units
|
30
|
|
|
2.8
|
|
Total unrecognized share-based compensation costs
|
$
|
137
|
|
|
2.3
|
|
Six Months
Ended September 30, |
||||
|
2012
|
|
2011
|
||
Weighted average fair value
|
9.09
|
|
|
5.99
|
|
Dividend yield
|
3.96
|
%
|
|
0.91
|
%
|
Expected volatility factor
(1)
|
59
|
%
|
|
33
|
%
|
Risk-free interest rate
(2)
|
0.8
|
%
|
|
1.7
|
%
|
Expected life (in years)
(3)
|
4.5
|
|
|
4.5
|
|
(1)
|
Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the market prices of the Company’s traded options.
|
(2)
|
The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant.
|
(3)
|
The expected life is the number of years the Company estimates, based primarily on historical experience, that options will be outstanding prior to exercise.
The Company’s computation of expected life was determined based on the simplified method (the average of the vesting period and option term).
|
|
Three Months
Ended September 30, |
|
Six Months
Ended September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
|
(shares in millions)
|
|
|
||||||||||
RSUs
|
|
|
|
|
|
|
|
||||||||
Shares
|
—
|
|
(1)
|
—
|
|
|
0.7
|
|
|
0.7
|
|
||||
Weighted avg. grant date fair value
(2)
|
$
|
23.63
|
|
|
$
|
—
|
|
|
$
|
24.29
|
|
|
$
|
24.08
|
|
RSAs
|
|
|
|
|
|
|
|
||||||||
Shares
|
—
|
|
(1)
|
—
|
|
(1)
|
3.6
|
|
|
3.6
|
|
||||
Weighted avg. grant date fair value
(3)
|
$
|
25.54
|
|
|
$
|
22.47
|
|
|
$
|
26.23
|
|
|
$
|
24.65
|
|
(1)
|
Less than 0.1 million
.
|
(2)
|
The fair value is based on the quoted market value of the Company’s common stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate.
|
(3)
|
The fair value is based on the quoted market value of the Company’s common stock on the grant date.
|
Three Months Ended September 30, 2012
|
|
Mainframe
Solutions
|
|
Enterprise
Solutions
|
|
Services
|
|
Total
|
||||||||
(dollars in millions)
|
|
|
|
|
||||||||||||
Revenue
|
|
$
|
619
|
|
|
$
|
438
|
|
|
$
|
95
|
|
|
$
|
1,152
|
|
Expenses
|
|
247
|
|
|
410
|
|
|
89
|
|
|
746
|
|
||||
Segment profit
|
|
$
|
372
|
|
|
$
|
28
|
|
|
$
|
6
|
|
|
$
|
406
|
|
Segment operating margin
|
|
60
|
%
|
|
6
|
%
|
|
6
|
%
|
|
35
|
%
|
||||
Depreciation and amortization
|
|
$
|
27
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
67
|
|
Segment profit
|
$
|
406
|
|
Less:
|
|
||
Purchased software amortization
|
27
|
|
|
Other intangibles amortization
|
13
|
|
|
Share-based compensation expense
|
21
|
|
|
Other (gains) expenses, net
(1)
|
8
|
|
|
Interest expense, net
|
10
|
|
|
Income from continuing operations before income taxes
|
$
|
327
|
|
(1)
|
Other (gains) expenses, net consists of other unallocated costs including foreign exchange derivative (gains) losses, and other miscellaneous costs.
|
Six Months Ended September 30, 2012
|
|
Mainframe
Solutions
|
|
Enterprise
Solutions
|
|
Services
|
|
Total
|
||||||||
(dollars in millions)
|
||||||||||||||||
Revenue
|
|
$
|
1,247
|
|
|
$
|
864
|
|
|
$
|
186
|
|
|
$
|
2,297
|
|
Expenses
|
|
507
|
|
|
769
|
|
|
176
|
|
|
1,452
|
|
||||
Segment profit
|
|
$
|
740
|
|
|
$
|
95
|
|
|
$
|
10
|
|
|
$
|
845
|
|
Segment operating margin
|
|
59
|
%
|
|
11
|
%
|
|
5
|
%
|
|
37
|
%
|
||||
Depreciation and amortization
|
|
$
|
53
|
|
|
$
|
78
|
|
|
$
|
—
|
|
|
$
|
131
|
|
Segment profit
|
$
|
845
|
|
Less:
|
|
||
Purchased software amortization
|
54
|
|
|
Other intangibles amortization
|
27
|
|
|
Share-based compensation expense
|
44
|
|
|
Other (gains) expenses, net
(1)
|
2
|
|
|
Interest expense, net
|
21
|
|
|
Income from continuing operations before income taxes
|
$
|
697
|
|
(1)
|
Other (gains) expenses, net consists of other unallocated costs including foreign exchange derivative (gains) losses, and other miscellaneous costs.
|
Three Months Ended September 30, 2011
|
|
Mainframe
Solutions
|
|
Enterprise
Solutions
|
|
Services
|
|
Total
|
||||||||
(dollars in millions)
|
||||||||||||||||
Revenue
|
|
$
|
655
|
|
|
$
|
449
|
|
|
$
|
96
|
|
|
$
|
1,200
|
|
Expenses
|
|
308
|
|
|
422
|
|
|
92
|
|
|
822
|
|
||||
Segment profit
|
|
$
|
347
|
|
|
$
|
27
|
|
|
$
|
4
|
|
|
$
|
378
|
|
Segment operating margin
|
|
53
|
%
|
|
6
|
%
|
|
4
|
%
|
|
32
|
%
|
||||
Depreciation and amortization
|
|
$
|
25
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
57
|
|
Segment profit
|
$
|
378
|
|
Less:
|
|
||
Purchased software amortization
|
26
|
|
|
Other intangibles amortization
|
15
|
|
|
Share-based compensation expense
|
16
|
|
|
Other (gains) expenses, net
(1)
|
(12
|
)
|
|
Interest expense, net
|
6
|
|
|
Income from continuing operations before income taxes
|
$
|
327
|
|
(1)
|
Other (gains) expenses, net consists of other unallocated costs including foreign exchange derivative (gains) losses, and other miscellaneous costs.
|
Six Months Ended September 30, 2011
|
|
Mainframe
Solutions
|
|
Enterprise
Solutions
|
|
Services
|
|
Total
|
||||||||
(dollars in millions)
|
||||||||||||||||
Revenue
|
|
$
|
1,301
|
|
|
$
|
876
|
|
|
$
|
186
|
|
|
$
|
2,363
|
|
Expenses
|
|
584
|
|
|
804
|
|
|
180
|
|
|
1,568
|
|
||||
Segment profit
|
|
$
|
717
|
|
|
$
|
72
|
|
|
$
|
6
|
|
|
$
|
795
|
|
Segment operating margin
|
|
55
|
%
|
|
8
|
%
|
|
3
|
%
|
|
34
|
%
|
||||
Depreciation and amortization
|
|
$
|
49
|
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
112
|
|
Segment profit
|
$
|
795
|
|
Less:
|
|
||
Purchased software amortization
|
49
|
|
|
Other intangibles amortization
|
34
|
|
|
Share-based compensation expense
|
41
|
|
|
Other (gains) expenses, net
(1)
|
(4
|
)
|
|
Interest expense, net
|
15
|
|
|
Income from continuing operations before income taxes
|
$
|
660
|
|
(1)
|
Other (gains) expenses, net consists of other unallocated costs including foreign exchange derivative (gains) losses, and other miscellaneous costs.
|
(in millions)
|
Three Months Ended
September 30, 2012 |
|
Six Months Ended
September 30, 2012 |
|
Three Months Ended
September 30, 2011 |
|
Six Months Ended
September 30, 2011 |
||||||||
United States
|
$
|
685
|
|
|
$
|
1,368
|
|
|
$
|
690
|
|
|
$
|
1,362
|
|
Europe
|
266
|
|
|
538
|
|
|
302
|
|
|
600
|
|
||||
Other
|
201
|
|
|
391
|
|
|
208
|
|
|
401
|
|
||||
Total revenue
|
$
|
1,152
|
|
|
$
|
2,297
|
|
|
$
|
1,200
|
|
|
$
|
2,363
|
|
|
Second Quarter Comparison Fiscal 2013 Versus Fiscal 2012
|
|||||||||||||
|
|
|
|
|
|
|
Percent
|
|||||||
|
2013
|
|
2012
|
|
Change
|
|
Change
|
|||||||
|
(dollars in millions)
|
|
|
|||||||||||
Total revenue
|
$
|
1,152
|
|
|
$
|
1,200
|
|
|
$
|
(48
|
)
|
|
(4
|
)%
|
Income from continuing operations
|
$
|
222
|
|
|
$
|
236
|
|
|
$
|
(14
|
)
|
|
(6
|
)%
|
Cash provided by operating activities – continuing operations
|
$
|
89
|
|
|
$
|
190
|
|
|
$
|
(101
|
)
|
|
(53
|
)%
|
Total bookings
|
$
|
837
|
|
|
$
|
972
|
|
|
$
|
(135
|
)
|
|
(14
|
)%
|
Subscription and maintenance bookings
|
$
|
626
|
|
|
$
|
761
|
|
|
$
|
(135
|
)
|
|
(18
|
)%
|
Weighted average subscription and maintenance license agreement duration in years
|
3.11
|
|
|
3.59
|
|
|
(0.48
|
)
|
|
(13
|
)%
|
|
First Half Comparison Fiscal 2013 Versus Fiscal 2012
|
|||||||||||||
|
|
|
|
|
|
|
Percent
|
|||||||
|
2013
|
|
2012
|
|
Change
|
|
Change
|
|||||||
|
(dollars in millions)
|
|
|
|||||||||||
Total revenue
|
$
|
2,297
|
|
|
$
|
2,363
|
|
|
$
|
(66
|
)
|
|
(3
|
)%
|
Income from continuing operations
|
$
|
462
|
|
|
$
|
464
|
|
|
$
|
(2
|
)
|
|
—
|
%
|
Cash provided by operating activities – continuing operations
|
$
|
272
|
|
|
$
|
333
|
|
|
$
|
(61
|
)
|
|
(18
|
)%
|
Total bookings
|
$
|
1,390
|
|
|
$
|
1,837
|
|
|
$
|
(447
|
)
|
|
(24
|
)%
|
Subscription and maintenance bookings
|
$
|
1,009
|
|
|
$
|
1,449
|
|
|
$
|
(440
|
)
|
|
(30
|
)%
|
Weighted average subscription and maintenance license agreement duration in years
|
2.99
|
|
|
3.44
|
|
|
(0.45
|
)
|
|
(13
|
)%
|
|
September 30, 2012
|
|
March 31, 2012
|
|
Change
From
Year End
|
|
September 30, 2011
|
|
Change
From Prior
Year Quarter
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash, cash equivalents and investments
(1)
|
$
|
2,248
|
|
|
$
|
2,679
|
|
|
$
|
(431
|
)
|
|
$
|
2,382
|
|
|
$
|
(134
|
)
|
Total debt
|
$
|
1,294
|
|
|
$
|
1,301
|
|
|
$
|
(7
|
)
|
|
$
|
1,310
|
|
|
$
|
(16
|
)
|
Total expected future cash collections from committed contracts
(2)
|
$
|
5,117
|
|
|
$
|
5,745
|
|
|
$
|
(628
|
)
|
|
$
|
5,630
|
|
|
$
|
(513
|
)
|
Total revenue backlog
(2)
|
$
|
7,460
|
|
|
$
|
8,473
|
|
|
$
|
(1,013
|
)
|
|
$
|
8,067
|
|
|
$
|
(607
|
)
|
Total current revenue backlog
(2)
|
$
|
3,453
|
|
|
$
|
3,714
|
|
|
$
|
(261
|
)
|
|
$
|
3,546
|
|
|
$
|
(93
|
)
|
(1)
|
At
September 30, 2012
and
March 31, 2012
, investments were
$162 million
and less than $1 million, respectively. At
September 30, 2011
, investments were
$179 million
.
|
(2)
|
Refer to the discussion in the “Liquidity and Capital Resources” section of this MD&A for additional information on expected future cash collections from committed contracts, billings backlog and revenue backlog.
|
|
Second Quarter Comparison Fiscal 2013 Versus Fiscal 2012
|
|||||||||||||||||||
|
|
|
|
|
Dollar Change
|
|
Percentage Change
|
|
Percentage of
Total Revenue
|
|||||||||||
|
2013
|
|
2012
|
|
2013 / 2012
|
|
2013 / 2012
|
|
2013
|
|
2012
|
|||||||||
|
(in millions)
|
|
|
|
|
|
|
|||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription and maintenance revenue
|
$
|
963
|
|
|
$
|
1,022
|
|
|
$
|
(59
|
)
|
|
(6
|
)%
|
|
84
|
%
|
|
85
|
%
|
Professional services
|
95
|
|
|
96
|
|
|
(1
|
)
|
|
(1
|
)
|
|
8
|
|
|
8
|
|
|||
Software fees and other
|
94
|
|
|
82
|
|
|
12
|
|
|
15
|
|
|
8
|
|
|
7
|
|
|||
Total revenue
|
$
|
1,152
|
|
|
$
|
1,200
|
|
|
$
|
(48
|
)
|
|
(4
|
)%
|
|
100
|
%
|
|
100
|
%
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Costs of licensing and maintenance
|
$
|
69
|
|
|
$
|
71
|
|
|
$
|
(2
|
)
|
|
(3
|
)%
|
|
6
|
%
|
|
6
|
%
|
Cost of professional services
|
88
|
|
|
91
|
|
|
(3
|
)
|
|
(3
|
)
|
|
8
|
|
|
8
|
|
|||
Amortization of capitalized software costs
|
67
|
|
|
55
|
|
|
12
|
|
|
22
|
|
|
6
|
|
|
5
|
|
|||
Selling and marketing
|
317
|
|
|
370
|
|
|
(53
|
)
|
|
(14
|
)
|
|
28
|
|
|
31
|
|
|||
General and administrative
|
98
|
|
|
104
|
|
|
(6
|
)
|
|
(6
|
)
|
|
9
|
|
|
9
|
|
|||
Product development and enhancements
|
123
|
|
|
140
|
|
|
(17
|
)
|
|
(12
|
)
|
|
11
|
|
|
12
|
|
|||
Depreciation and amortization of other intangible assets
|
40
|
|
|
43
|
|
|
(3
|
)
|
|
(7
|
)
|
|
3
|
|
|
4
|
|
|||
Other (gains) expenses, net
|
13
|
|
|
(7
|
)
|
|
20
|
|
|
NM
|
|
|
1
|
|
|
(1
|
)
|
|||
Total expenses before interest and income taxes
|
$
|
815
|
|
|
$
|
867
|
|
|
$
|
(52
|
)
|
|
(6
|
)%
|
|
71
|
%
|
|
72
|
%
|
Income from continuing operations before interest and income taxes
|
$
|
337
|
|
|
$
|
333
|
|
|
$
|
4
|
|
|
1
|
%
|
|
29
|
%
|
|
28
|
%
|
Interest expense, net
|
10
|
|
|
6
|
|
|
4
|
|
|
67
|
|
|
1
|
|
|
1
|
|
|||
Income from continuing operations before income taxes
|
$
|
327
|
|
|
$
|
327
|
|
|
$
|
—
|
|
|
—
|
%
|
|
28
|
%
|
|
27
|
%
|
Income tax expense
|
105
|
|
|
91
|
|
|
14
|
|
|
15
|
|
|
9
|
|
|
8
|
|
|||
Income from continuing operations
|
$
|
222
|
|
|
$
|
236
|
|
|
$
|
(14
|
)
|
|
(6
|
)%
|
|
19
|
%
|
|
20
|
%
|
|
First Half Comparison Fiscal 2013 Versus Fiscal 2012
|
|||||||||||||||||||
|
|
|
|
|
Dollar Change
|
|
Percentage Change
|
|
Percentage of
Total Revenue
|
|||||||||||
|
2013
|
|
2012
|
|
2013 / 2012
|
|
2013 / 2012
|
|
2013
|
|
2012
|
|||||||||
|
(in millions)
|
|
|
|
|
|
|
|||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription and maintenance revenue
|
$
|
1,940
|
|
|
$
|
2,029
|
|
|
$
|
(89
|
)
|
|
(4
|
)%
|
|
85
|
%
|
|
86
|
%
|
Professional services
|
186
|
|
|
186
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|||
Software fees and other
|
171
|
|
|
148
|
|
|
23
|
|
|
16
|
|
|
7
|
|
|
6
|
|
|||
Total revenue
|
$
|
2,297
|
|
|
$
|
2,363
|
|
|
$
|
(66
|
)
|
|
(3
|
)%
|
|
100
|
%
|
|
100
|
%
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Costs of licensing and maintenance
|
$
|
138
|
|
|
$
|
138
|
|
|
$
|
—
|
|
|
—
|
%
|
|
6
|
%
|
|
6
|
%
|
Cost of professional services
|
174
|
|
|
179
|
|
|
(5
|
)
|
|
(3
|
)
|
|
8
|
|
|
8
|
|
|||
Amortization of capitalized software costs
|
131
|
|
|
105
|
|
|
26
|
|
|
25
|
|
|
6
|
|
|
4
|
|
|||
Selling and marketing
|
622
|
|
|
696
|
|
|
(74
|
)
|
|
(11
|
)
|
|
27
|
|
|
29
|
|
|||
General and administrative
|
208
|
|
|
218
|
|
|
(10
|
)
|
|
(5
|
)
|
|
9
|
|
|
9
|
|
|||
Product development and enhancements
|
248
|
|
|
258
|
|
|
(10
|
)
|
|
(4
|
)
|
|
11
|
|
|
11
|
|
|||
Depreciation and amortization of other intangible assets
|
81
|
|
|
90
|
|
|
(9
|
)
|
|
(10
|
)
|
|
4
|
|
|
4
|
|
|||
Other (gains) expenses, net
|
(23
|
)
|
|
4
|
|
|
(27
|
)
|
|
NM
|
|
|
(1
|
)
|
|
—
|
|
|||
Total expenses before interest and income taxes
|
$
|
1,579
|
|
|
$
|
1,688
|
|
|
$
|
(109
|
)
|
|
(6
|
)%
|
|
69
|
%
|
|
71
|
%
|
Income from continuing operations before interest and income taxes
|
$
|
718
|
|
|
$
|
675
|
|
|
$
|
43
|
|
|
6
|
%
|
|
31
|
%
|
|
29
|
%
|
Interest expense, net
|
21
|
|
|
15
|
|
|
6
|
|
|
40
|
|
|
1
|
|
|
1
|
|
|||
Income from continuing operations before income taxes
|
$
|
697
|
|
|
$
|
660
|
|
|
$
|
37
|
|
|
6
|
%
|
|
30
|
%
|
|
28
|
%
|
Income tax expense
|
235
|
|
|
196
|
|
|
39
|
|
|
20
|
|
|
10
|
|
|
8
|
|
|||
Income from continuing operations
|
$
|
462
|
|
|
$
|
464
|
|
|
$
|
(2
|
)
|
|
—
|
%
|
|
20
|
%
|
|
20
|
%
|
|
Second Quarter Comparison Fiscal 2013 Versus Fiscal 2012
|
|||||||||||||||||||
|
2013
|
|
%
|
|
2012
|
|
%
|
|
Dollar
Change
|
|
Percentage
Change
|
|||||||||
|
(dollars in millions)
|
|||||||||||||||||||
United States
|
$
|
685
|
|
|
59
|
%
|
|
$
|
690
|
|
|
57
|
%
|
|
$
|
(5
|
)
|
|
(1
|
)%
|
International
|
467
|
|
|
41
|
%
|
|
510
|
|
|
43
|
%
|
|
(43
|
)
|
|
(8
|
)%
|
|||
Total Revenue
|
$
|
1,152
|
|
|
100
|
%
|
|
$
|
1,200
|
|
|
100
|
%
|
|
$
|
(48
|
)
|
|
(4
|
)%
|
|
First Half Comparison Fiscal 2013 Versus Fiscal 2012
|
|||||||||||||||||||
|
2013
|
|
%
|
|
2012
|
|
%
|
|
Dollar
Change
|
|
Percentage
Change
|
|||||||||
|
(dollars in millions)
|
|||||||||||||||||||
United States
|
$
|
1,368
|
|
|
60
|
%
|
|
$
|
1,362
|
|
|
58
|
%
|
|
$
|
6
|
|
|
—
|
%
|
International
|
929
|
|
|
40
|
%
|
|
1,001
|
|
|
42
|
%
|
|
(72
|
)
|
|
(7
|
)%
|
|||
Total Revenue
|
$
|
2,297
|
|
|
100
|
%
|
|
$
|
2,363
|
|
|
100
|
%
|
|
$
|
(66
|
)
|
|
(3
|
)%
|
Mainframe Solutions
|
|
|
|
||||
|
Second Quarter
Fiscal 2013 |
|
Second Quarter
Fiscal 2012 |
||||
|
(dollars in millions)
|
||||||
Revenue
|
$
|
619
|
|
|
$
|
655
|
|
Expenses
|
247
|
|
|
308
|
|
||
Segment profit
|
$
|
372
|
|
|
$
|
347
|
|
Segment operating margin
|
60
|
%
|
|
53
|
%
|
||
|
|
|
|
||||
|
First Half
Fiscal 2013 |
|
First Half
Fiscal 2012 |
||||
|
(dollars in millions)
|
||||||
Revenue
|
$
|
1,247
|
|
|
$
|
1,301
|
|
Expenses
|
507
|
|
|
584
|
|
||
Segment profit
|
$
|
740
|
|
|
$
|
717
|
|
Segment operating margin
|
59
|
%
|
|
55
|
%
|
Enterprise Solutions
|
|
|
|
||||
|
Second Quarter
Fiscal 2013 |
|
Second Quarter
Fiscal 2012 |
||||
|
(dollars in millions)
|
||||||
Revenue
|
$
|
438
|
|
|
$
|
449
|
|
Expenses
|
410
|
|
|
422
|
|
||
Segment profit
|
$
|
28
|
|
|
$
|
27
|
|
Segment operating margin
|
6
|
%
|
|
6
|
%
|
||
|
|
|
|
||||
|
First Half
Fiscal 2013 |
|
First Half
Fiscal 2012 |
||||
|
(dollars in millions)
|
||||||
Revenue
|
$
|
864
|
|
|
$
|
876
|
|
Expenses
|
769
|
|
|
804
|
|
||
Segment profit
|
$
|
95
|
|
|
$
|
72
|
|
Segment operating margin
|
11
|
%
|
|
8
|
%
|
Services
|
|
|
|
||||
|
Second Quarter
Fiscal 2013 |
|
Second Quarter
Fiscal 2012 |
||||
|
(dollars in millions)
|
||||||
Revenue
|
$
|
95
|
|
|
$
|
96
|
|
Expenses
|
89
|
|
|
92
|
|
||
Segment profit
|
$
|
6
|
|
|
$
|
4
|
|
Segment operating margin
|
6
|
%
|
|
4
|
%
|
||
|
|
|
|
||||
|
First Half
Fiscal 2013 |
|
First Half
Fiscal 2012 |
||||
|
(dollars in millions)
|
||||||
Revenue
|
$
|
186
|
|
|
$
|
186
|
|
Expenses
|
176
|
|
|
180
|
|
||
Segment profit
|
$
|
10
|
|
|
$
|
6
|
|
Segment operating margin
|
5
|
%
|
|
3
|
%
|
(in millions)
|
September 30,
2012 |
|
March 31,
2012 |
|
September 30,
2011 |
||||||
Billings backlog:
|
|
|
|
|
|
||||||
Amounts to be billed – current
|
$
|
2,179
|
|
|
$
|
2,220
|
|
|
$
|
2,171
|
|
Amounts to be billed – noncurrent
|
2,354
|
|
|
2,623
|
|
|
2,858
|
|
|||
Total billings backlog
|
$
|
4,533
|
|
|
$
|
4,843
|
|
|
$
|
5,029
|
|
Revenue backlog:
|
|
|
|
|
|
||||||
Revenue to be recognized within the next 12 months – current
|
$
|
3,453
|
|
|
$
|
3,714
|
|
|
$
|
3,546
|
|
Revenue to be recognized beyond the next 12 months – noncurrent
|
4,007
|
|
|
4,759
|
|
|
4,521
|
|
|||
Total revenue backlog
|
$
|
7,460
|
|
|
$
|
8,473
|
|
|
$
|
8,067
|
|
Deferred revenue (billed or collected)
|
$
|
2,927
|
|
|
$
|
3,630
|
|
|
$
|
3,038
|
|
Unearned revenue yet to be billed
|
4,533
|
|
|
4,843
|
|
|
5,029
|
|
|||
Total revenue backlog
|
$
|
7,460
|
|
|
$
|
8,473
|
|
|
$
|
8,067
|
|
(in millions)
|
September 30,
2012 |
|
March 31,
2012 |
|
September 30,
2011 |
||||||
Expected future cash collections:
|
|
|
|
|
|
||||||
Total billings backlog
|
$
|
4,533
|
|
|
$
|
4,843
|
|
|
$
|
5,029
|
|
Trade accounts receivable, net
|
584
|
|
|
902
|
|
|
601
|
|
|||
Total expected future cash collections
|
$
|
5,117
|
|
|
$
|
5,745
|
|
|
$
|
5,630
|
|
|
Second Quarter of Fiscal
|
|
Change
|
||||||||
|
2013
|
|
2012
|
|
2013 / 2012
|
||||||
|
(in millions)
|
||||||||||
Cash collections from billings
(1)
|
$
|
836
|
|
|
$
|
978
|
|
|
$
|
(142
|
)
|
Vendor disbursements and payroll
(1)
|
(708
|
)
|
|
(778
|
)
|
|
70
|
|
|||
Income tax (payments) receipts, net
|
(25
|
)
|
|
(23
|
)
|
|
(2
|
)
|
|||
Other disbursements, net
(2)
|
(14
|
)
|
|
13
|
|
|
(27
|
)
|
|||
Cash generated by continuing operating activities
|
$
|
89
|
|
|
$
|
190
|
|
|
$
|
(101
|
)
|
(1)
|
Amounts include value added taxes and sales taxes.
|
(2)
|
Amounts include interest, restructuring and miscellaneous receipts and disbursements.
|
|
First Half of Fiscal
|
|
Change
|
||||||||
|
2013
|
|
2012
|
|
2013 / 2012
|
||||||
|
(in millions)
|
||||||||||
Cash collections from billings
(1)
|
$
|
2,015
|
|
|
$
|
2,240
|
|
|
$
|
(225
|
)
|
Vendor disbursements and payroll
(1)
|
(1,626
|
)
|
|
(1,665
|
)
|
|
39
|
|
|||
Income tax (payments) receipts, net
|
(150
|
)
|
|
(221
|
)
|
|
71
|
|
|||
Other disbursements, net
(2)
|
33
|
|
|
(21
|
)
|
|
54
|
|
|||
Cash generated by continuing operating activities
|
$
|
272
|
|
|
$
|
333
|
|
|
$
|
(61
|
)
|
(1)
|
Amounts include value added taxes and sales taxes.
|
(2)
|
Amounts include interest, restructuring, $35 million in cash proceeds received from the aforementioned intellectual property transaction and miscellaneous receipts and disbursements.
|
|
September 30, 2012
|
|
March 31, 2012
|
||||
|
(in millions)
|
||||||
Revolving credit facility due August 2016
|
$
|
—
|
|
|
$
|
—
|
|
5.375% Senior Notes due November 2019
|
750
|
|
|
750
|
|
||
6.125% Senior Notes due December 2014, net of unamortized premium from fair value hedge of $25 and $27
|
525
|
|
|
527
|
|
||
Other indebtedness, primarily capital leases
|
24
|
|
|
29
|
|
||
Unamortized discount for Notes
|
(5
|
)
|
|
(5
|
)
|
||
Total debt outstanding
|
1,294
|
|
|
1,301
|
|
||
Less the current portion
|
(14
|
)
|
|
(14
|
)
|
||
Total long-term debt portion
|
$
|
1,280
|
|
|
$
|
1,287
|
|
(1)
|
Included in “Accrued expenses and other current liabilities” in our Condensed Consolidated Balance Sheets.
|
Period
|
Total Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
|
Approximate
Dollar Value of
Shares that
May Yet Be
Purchased Under
the Plans
or Programs
|
||||||
|
(in thousands, except average price paid per share)
|
|||||||||
July 1, 2012 - July 31, 2012
|
652
|
|
$
|
24.30
|
|
652
|
|
$
|
887,761
|
|
August 1, 2012 - August 31, 2012
|
5,828
|
|
$
|
25.46
|
|
5,828
|
|
$
|
739,374
|
|
September 1, 2012 - September 30, 2012
|
3,206
|
|
$
|
26.75
|
|
3,206
|
|
$
|
653,616
|
|
Total
|
9,686
|
|
|
9,686
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation.
|
|
Filed as Exhibit 3.3 to the
Company’s Current Report
on Form 8-K dated March 6,
2006.*
|
|
|
|
|
|
3.2
|
|
By-Laws of the Company, as amended.
|
|
Filed as Exhibit 3.1 to the
Company’s Current Report
on Form 8-K dated
February 23, 2007.*
|
|
|
|
|
|
10.1**
|
Summary description of amended financial planning benefit.
|
|
Filed herewith.
|
|
|
|
|
|
|
12.1
|
|
Statement of Ratio of Earnings to Fixed Charges.
|
|
Filed herewith.
|
|
|
|
|
|
15
|
|
Accountants’ acknowledgment letter.
|
|
Filed herewith.
|
|
|
|
|
|
31.1
|
|
Certification of the Principal Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
31.2
|
|
Certification of the Principal Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
32
|
|
Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
|
|
|
|
|
101
|
|
The following financial statements from CA, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended, September 30, 2012 formatted in XBRL (eXtensible Business Reporting Language):
|
|
Filed herewith.
|
|
|
|
|
|
|
(i) Unaudited Condensed Consolidated Balance Sheets — September 30, 2012 and March 31, 2012.
|
|
|
|
|
|
|
|
|
|
(ii) Unaudited Condensed Consolidated Statements of Operations — Three and Six Months Ended September 30, 2012 and 2011.
|
|
|
|
|
|
|
|
|
|
(ii) Unaudited Condensed Consolidated Statements of Comprehensive Income — Three and Six Months Ended September 30, 2012 and 2011.
|
|
|
|
|
|
|
|
|
|
(iii) Unaudited Condensed Consolidated Statements of Cash Flows — Six Months Ended September 30, 2012 and 2011.
|
|
|
|
|
|
|
|
|
|
(iv) Notes to unaudited Condensed Consolidated Financial Statements — September 30, 2012.
|
|
|
*
|
Incorporated herein by reference.
|
**
|
Management contract or compensatory plan or arrangement.
|
CA, INC.
|
|
|
|
By:
|
/s/ William E. McCracken
|
|
William E. McCracken
|
|
Chief Executive Officer
|
|
|
By:
|
/s/ Richard J. Beckert
|
|
Richard J. Beckert
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
Tax planning and tax preparation;
|
2.
|
Estate planning;
|
3.
|
Investment planning;
|
4.
|
Insurance planning;
|
5.
|
Retirement planning; and
|
6.
|
Compensation and benefit planning.
|
|
|
Fiscal Year
|
|
Six Months Ended
|
||||||||||||||||||||
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
September 30,
2012 |
||||||||||||
Earnings available for fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings from continuing operations before income taxes, minority interest and discontinued operations
|
|
$
|
762
|
|
|
$
|
1,049
|
|
|
$
|
1,152
|
|
|
$
|
1,209
|
|
|
$
|
1,354
|
|
|
$
|
697
|
|
Add: Fixed charges
|
|
248
|
|
|
191
|
|
|
156
|
|
|
121
|
|
|
123
|
|
|
49
|
|
||||||
Total earnings available for fixed charges
|
|
$
|
1,010
|
|
|
$
|
1,240
|
|
|
$
|
1,308
|
|
|
$
|
1,330
|
|
|
$
|
1,477
|
|
|
$
|
746
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense(1)
|
|
$
|
169
|
|
|
$
|
130
|
|
|
$
|
102
|
|
|
$
|
68
|
|
|
$
|
64
|
|
|
$
|
32
|
|
Interest portion of rental expense
|
|
79
|
|
|
61
|
|
|
54
|
|
|
53
|
|
|
59
|
|
|
17
|
|
||||||
Total fixed charges
|
|
$
|
248
|
|
|
$
|
191
|
|
|
$
|
156
|
|
|
$
|
121
|
|
|
$
|
123
|
|
|
$
|
49
|
|
RATIOS OF EARNINGS TO FIXED CHARGES
|
|
4.07
|
|
|
6.49
|
|
|
8.38
|
|
|
10.99
|
|
|
12.01
|
|
|
15.22
|
|
||||||
Deficiency of earnings to fixed charges
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
(1)
|
Includes amortization of discount related to indebtedness
|
1.
|
I have reviewed the Quarterly Report on Form 10-Q of CA, Inc. for its most recent fiscal quarter;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
|
|
|
Date:
|
October 26, 2012
|
|
|
|
|
|
/s/ William E. McCracken
|
|
|
|
|
|
|
|
William E. McCracken
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Chief Executive Officer
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CA, Inc.
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1.
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I have reviewed the Quarterly Report on Form 10-Q of CA, Inc. for its most recent fiscal quarter;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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Date:
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October 26, 2012
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/s/ Richard J. Beckert
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Richard J. Beckert
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Executive Vice President and Chief Financial Officer
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CA, Inc.
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/s/ William E. McCracken
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William E. McCracken
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Chief Executive Officer
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October 26, 2012
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/s/ Richard J. Beckert
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Richard J. Beckert
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Executive Vice President and Chief Financial Officer
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October 26, 2012
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