(Mark One)
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ü
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Annual Report Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
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For the fiscal year ended March 31, 2014
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OR
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Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Delaware
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13-2857434
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
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520 Madison Avenue,
New York, New York
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10022
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(Address of Principal Executive Offices)
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(Zip Code)
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(Title of each class)
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(Name of each exchange on which registered)
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Common stock, par value $0.10 per share
Stock Purchase Rights Preferred Stock, Class A
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The NASDAQ Stock Market LLC
The NASDAQ Stock Market LLC
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Part I
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Part II
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Part III
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Part IV
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•
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In March 2014, we opened a new center in Bangalore that will focus on organic innovation and developing differentiated, next generation solutions in emerging technologies like mobility, digital payments, big data, data science analytics and advanced analytics.
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•
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In March 2014, we entered into a definitive agreement to divest our CA ERwin Data Modeling solution assets. The transaction continued to rationalize our portfolio and further sharpens our focus on core capabilities, such as Management Cloud, application development and IT operations (DevOps) and Security across mainframe, distributed, cloud and mobile environments.
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•
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In February 2014, we launched the CA Management Cloud for Mobility, a comprehensive portfolio of solutions to help enterprises of all sizes manage and secure their devices, content and applications.
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In December 2013, we launched a global marketing campaign “CA at the Center” to promote interest in CA Technologies and to showcase the innovation and capability we are delivering to businesses around the world.
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In November 2013, we announced the general availability of Cloud Storage for Systems z, a technology designed to help customers drive down the cost of storing data processed on IBM System z by backing up the data and archiving it to the cloud.
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In October 2013, we announced the availability of CA Nimsoft Monitor Snap
—
a free, feature-rich version of our CA Nimsoft Monitor solution.
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In October 2013, we opened our CA Silicon Valley Technology Center in Santa Clara, California. This Center consolidates various research and development capabilities and increases our focus on emerging technologies, including cloud, Software-as-a-Service (SaaS), mobility and big data.
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•
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In August 2013, we issued $250 million of 2.875% Senior Notes due August 2018 and $250 million of 4.500% Senior Notes due August 2023 for an aggregate principal amount of $500 million. We intend to use the net proceeds of the offering for general corporate purposes, which may include the repayment of our 6.125% Senior Notes due December 2014.
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•
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In June 2013, we acquired Layer 7 Technologies (Layer 7), a leading provider of Application Programming Interface (API) management and security. Layer 7 complements CA Technologies’ current Identity and Access Management suite, including CA SiteMinder®, and our technologies focused on DevOps, including the CA LISA® suite.
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•
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In May 2014, Amit Chatterjee was named Executive Vice President, Enterprise Solutions and Technology Group.
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•
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In January 2014, Adam Elster was named Executive Vice President and Group Executive, Worldwide Sales and Services.
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•
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In August 2013, Lauren P. Flaherty was named Executive Vice President and Chief Marketing Officer.
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•
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Innovating in key product areas to extend our market leadership and differentiation.
Our product development strategy is built around three key growth areas, where we are focused on innovating and delivering differentiated products and solutions: DevOps, Management Cloud, and Security across multiple platforms. We innovate and build products to help customers manage and transform their businesses in an increasingly software- and new application-driven economy and business environment. First, we will enable businesses to accelerate and automate the continuous delivery of next-generation applications by delivering a highly differentiated DevOps suite including Application Delivery, Application Performance Management and Infrastructure Management solutions. Second, we will connect operational IT to strategic business outcomes and manage the business side of IT through greater analytics and insight from our Management Cloud offerings such as Project and Portfolio Management, IT Service Management and IT Financial Management. Finally, we will advance our security leadership with solutions that address the increasing challenges of composite application architectures through Identity and Access Management, Data-centric Security and API Management.
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•
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Addressing shifts in market dynamics and technology.
We will innovate to deliver new differentiated solutions that enable our customers to manage the challenges and capture the opportunities of disruptive technologies such as the ability to harvest big data, the shift to software-defined IT, the proliferation of mobile technologies, social access (or social credentials) authentication, and the always on, ubiquitously connected “Internet of Things.” We will continue to align our sales, marketing and development spending with the areas that maximize our return on investment.
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•
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Accelerating growth in our global customer base.
We are focused on maintaining strong relationships with our core, large enterprise customer base, and will proactively target growth with these customers as well as new large enterprises we do not currently serve. In parallel, we are broadening our customer base to new buyer segments beyond the customer’s Chief Information Officer and IT department and increasingly to geographic regions we have underserved. We are making adjustments to our sales, service and marketing resources to reach these customers and respond to changes in customer buying behaviors, such as the need for solutions that are simple and cost-effective to buy, install, deploy, manage and secure.
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•
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Pursuing new business models and expanded routes to market.
While our traditional on-premise software delivery remains core to our enterprise customers, we see SaaS and managed services as increasingly attractive for our customers. This simplifies their decision-making and accelerates the value they can derive from new solution investments. This delivery model allows us to extend our market reach, speed adoption of our solutions, improve our efficiencies, and compete more effectively for a larger number of customers globally.
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•
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DevOps
includes application delivery, application performance management, and infrastructure management.
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•
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Application Delivery
is based on service virtualization, which is a technology that allows customers to develop and test applications by simulating different environments and conditions to resolve software defects and performance issues earlier, lower development costs and deliver business services faster with superior quality. Our CA LISA®Suite provides service virtualization solutions for developing applications in composite and cloud environments. Complementary to CA LISA® Suite, our CA LISA® Release Automation (Nolio) solution provides the ability to move application software efficiently and reliably through the development process and into production across different IT environments spanning physical, virtual and cloud.
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•
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Application Performance Management
(APM) solutions help organizations ensure quality of service and quality of experience for critical business applications to maximize revenue, end-user productivity and customer satisfaction. CA APM allows users to monitor, analyze, and report on transactions throughout their IT environment-whether physical, virtual, mobile or cloud-so that they can quickly identify issues and resolve problems before they disrupt critical services.
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•
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Infrastructure Management
solutions monitor the performance and capacity of most aspects of a company’s IT environment, including the performance of servers, switches, routers, and electricity usage. Our solutions scale to meet the needs of some of the largest telecommunications companies, financial services companies and governments in the world. In addition we offer lighter weight solutions designed for medium-size customers and departmental use cases.
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Management Cloud
includes our IT Business Management (ITBM) solutions which help customers optimize their investments, projects, resources and processes. ITBM comprises core project and portfolio management and service management applications that are delivered both through SaaS and on premise. For example, with our market-leading CA Clarity™ Project & Portfolio Management, we help customers improve technology investment decision-making, optimize their resources and execute projects at a higher value and with less risk. CA Service Management solutions help organizations improve service quality and end-user productivity by automating service requests, improving operational processes, and mitigating software compliance risk. Management Cloud also includes Enterprise Mobility Management Solutions, which address the challenges presented by the management of mobile devices, applications, content and emails within an enterprise.
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Security (Identity and Access Management)
delivers
identity-centric security solutions to meet the needs of today’s mobile, cloud-connected, open enterprise. We provide a broad suite of identity and access management, API security and management, and data protection solutions that give our customers the ability to centrally manage and control access to applications and data, in both on-premise and cloud deployments, and across Web, mobile, and API channels. Our security solutions can control identities and access throughout the entire interaction - from the device to the data center. This enables us to provide a complete, end-to-end, multi-channel security solution.
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Technology partners help us ensure that our software remains compatible with complementary hardware and software, and help us adapt and respond to the emergence of new technologies and trends.
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We also work with global systems integrators who offer our software and solutions in their business practices and leverage their process design, planning and vertical expertise to provide holistic solutions and implementation services for our customers. Regional solution providers have sales and implementation resources to deliver and support IT solutions and have local market knowledge.
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For customers of all sizes who prefer to buy IT Management-as-a-Service rather than through a traditional licensed software model, we have tailored our technology solutions and partner strategies to enable a large cross-section of service providers to deliver IT Management-as-a-Service. These service provider partners range from the largest global IT outsourcing and telecommunications firms to regional and local infrastructure service and managed service providers. Service providers are both buyers of technology and “sell through” partners to buyers of IT Management-as-a-Service.
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A typical designated CPU (central processing unit) license, under which the customer may use the licensed product on a single, designated CPU.
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A MIPS (millions of instructions per second)-based license, which allows the customer to use the licensed product on one or more CPUs, limited by the aggregate MIPS rating of the CPUs covered by the license.
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A user-based license, under which the customer may use the licensed product by or for the agreed number of licensed users.
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A designated server license, under which the customer may use a certain distributed product on a single, designated server. The licensed products must be licensed for use with a specific operating system.
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•
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Effectively manage our sales force to enable us to maintain and enhance our strong relationships in our traditional customer base and to increase penetration and accelerate growth in customer segments and geographic regions where we currently may not have a strong presence or we have underserved and where we may have a dependence on unfamiliar distribution partners and routes;
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Enable our sales force to sell new products, including instances where our offerings are of a type not previously provided by us, to our traditional core and new customers, or where a competitor already has an established relationship with a potential new customer;
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Ensure our cloud computing, application development and IT operations (DevOps), SaaS, mobile device management and other new offerings address the needs of a rapidly changing market, while not adversely affecting the demand for our traditional products or our profitability.
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Foreign exchange currency rates;
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Local economic conditions;
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Political stability and acts of terrorism;
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Workforce reorganizations in various locations, including global reorganizations of sales, research and development, technical services, finance, human resources and facilities functions;
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Effectively staffing key managerial and technical positions;
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Successfully localizing software products for a significant number of international markets;
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Restrictive employment regulation;
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Trade restrictions such as tariffs, duties, taxes or other controls;
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International intellectual property laws, which may be more restrictive or may offer lower levels of protection than U.S. law;
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Compliance by CA Technologies and our partners (including unaffiliated third-party partners) with differing and changing local laws and regulations in multiple international locations as well as compliance with U.S. laws and regulations where applicable in these international locations; and
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Developing and executing an effective go-to-market strategy in various locations.
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We may find that the acquired company or assets do not improve our financial and strategic position as planned;
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We may have difficulty integrating the operations, facilities, personnel and commission plans of the acquired business;
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We may have difficulty retaining the skills needed to further market, sell or provide services on the acquired products in a manner that will be accepted by the market;
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We may have difficulty incorporating the acquired technologies or products into our existing product lines;
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We may have product liability, customer liability or intellectual property liability associated with the sale of the acquired company’s products;
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Our ongoing business may be disrupted by transition or integration issues and our management’s attention may be diverted from other business initiatives;
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We may be unable to obtain timely approvals from governmental authorities under applicable competition and antitrust laws;
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An acquisition may result in increased litigation risk, including litigation from terminated employees or third parties;
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Our due diligence process may fail to identify significant issues with the acquired company’s product quality, financial disclosures, accounting practices, internal control deficiencies, including material weaknesses, product architecture, legal and tax contingencies and other matters; and
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We may not be able to realize the benefits of recognized goodwill and intangible assets and this may result in the potential impairment of these assets.
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Legal actions by customers or government authorities against us that could, whether or not successful, be costly, distracting and time-consuming;
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Failure to successfully complete service engagements for product installations and implementations.
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Fiscal 2014
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Fiscal 2013
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High
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Low
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High
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Low
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||||||||
Fourth Quarter
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$
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34.43
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$
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30.53
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$
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25.52
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$
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22.65
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Third Quarter
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$
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33.66
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$
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28.70
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$
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25.50
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$
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21.77
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Second Quarter
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$
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31.26
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$
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27.98
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$
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27.31
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$
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24.07
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First Quarter
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$
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29.23
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$
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24.30
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$
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27.78
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$
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24.39
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Period
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Total Number Of Shares Purchased
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Average Price Paid Per Share
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Total Number Of Shares Purchased As Part Of Publicly Announced Plans Or Programs
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Approximate Dollar Value Of Shares That May Yet Be Purchased Under The Plans Or Programs
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(in thousands, except average price paid per share)
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||||||||||||
January 1, 2014 — January 31, 2014
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—
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$
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—
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—
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$
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167,271
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February 1, 2014 — February 28, 2014
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—
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$
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—
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—
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$
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167,271
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March 1, 2014 — March 31, 2014
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5,198
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$
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32.13
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5,198
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$
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—
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Total
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5,198
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5,198
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Year Ended March 31,
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||||||||||||||||||
Statement Of Operations And Other Data
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2014
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2013
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2012
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2011
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2010
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(in millions, except per share amounts)
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Revenue
(1)
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$
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4,515
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$
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4,610
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$
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4,779
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$
|
4,396
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$
|
4,195
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Income from continuing operations
(1) (2)
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$
|
899
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$
|
939
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$
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923
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|
$
|
808
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|
|
$
|
744
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Cash provided by operating activities — continuing operations
(1)
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$
|
997
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|
|
$
|
1,390
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$
|
1,488
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|
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$
|
1,359
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|
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$
|
1,318
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Basic income per common share from continuing operations
(1)
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$
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2.00
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|
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$
|
2.03
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$
|
1.88
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|
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$
|
1.58
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|
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$
|
1.43
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Diluted income per common share from continuing operations
(1)
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$
|
1.99
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|
|
$
|
2.03
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|
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$
|
1.87
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|
|
$
|
1.57
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|
|
$
|
1.38
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Dividends declared per common share
(3)
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$
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1.00
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$
|
1.00
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$
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0.40
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$
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0.16
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|
$
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0.16
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At March 31,
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||||||||||||||||||
Balance Sheet Data
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2014
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|
2013
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|
2012
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2011
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|
2010
|
||||||||||
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(in millions)
|
||||||||||||||||||
Working capital surplus
(4)
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$
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637
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$
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585
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$
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214
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$
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448
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$
|
409
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Working capital surplus, excluding current deferred revenue
(1) (5)
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$
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3,096
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$
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3,050
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$
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2,855
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$
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3,027
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$
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2,894
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Total assets
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$
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12,016
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$
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11,815
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$
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11,997
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$
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12,411
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$
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11,888
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Long-term debt (less current maturities)
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$
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1,252
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$
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1,274
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$
|
1,287
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$
|
1,282
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$
|
1,530
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Stockholders’ equity
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$
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5,570
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$
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5,450
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|
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$
|
5,397
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$
|
5,620
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$
|
4,987
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(1)
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Information presented excludes the results of our discontinued operations.
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(2)
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In fiscal 2014 and 2010, we incurred after-tax charges of $116 million and $33 million, respectively, for rebalancing, restructuring and other costs.
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(3)
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In fiscal 2014 and 2013, dividends declared per common share were $0.25 per quarter. Dividends declared per common share were $0.05 in each of the first three quarters of fiscal 2012 and $0.25 in the fourth quarter of fiscal 2012. In fiscal 2011 and 2010, dividends declared per common share were $0.04 per quarter.
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(4)
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Working capital surplus is current assets less current liabilities.
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(5)
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Deferred revenue includes amounts billed or collected in advance of revenue recognition, including subscription license agreements, maintenance and professional services. It does not include unearned revenue on future installments not yet billed at the respective balance sheet dates.
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•
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Innovating in key product areas to extend our market leadership and differentiation.
Our product development strategy is built around three key growth areas, where we are focused on innovating and delivering differentiated products and solutions: application development and IT operations (DevOps), Management Cloud, and Security across multiple platforms.
|
•
|
Addressing shifts in market dynamics and technology.
We will innovate to deliver new differentiated solutions that enable our customers to manage the challenges and capture the opportunities of disruptive technologies such as the ability to harvest big data, the shift to software-defined IT, the proliferation of mobile technologies, social access (or social credentials) authentication, and the always on, ubiquitously connected “Internet of Things.”
|
•
|
Accelerating growth in our global customer base.
We are focused on maintaining strong relationships with our core, large enterprise customer base, and will proactively target growth with these customers as well as new large enterprises we do not currently serve. In parallel, we are broadening our customer base to new buyer segments beyond the customer’s Chief Information Officer and IT department and increasingly to geographic regions we have underserved.
|
•
|
Pursuing new business models and expanded routes to market.
While our traditional on-premise software delivery remains core to our enterprise customers, we see SaaS and managed services as increasingly attractive for our customers. This simplifies their decision-making and accelerates the value they can derive from new solution investments.
|
•
|
Mainframe Solutions products are designed mainly for the IBM System z mainframe platform, which runs many of our largest customers’ mission-critical applications. We help customers seamlessly manage their mainframe as part of their evolving data center through flexible management approaches, cross-platform visibility and workload portability.
|
•
|
Enterprise Solutions products operate on non-mainframe platforms and include our DevOps, Management Cloud, and Security product groups. DevOps includes application delivery, application performance management and infrastructure management. Management Cloud
helps customers optimize their investments, projects, resources and processes. Security delivers
identity-centric security solutions to meet the needs of today’s mobile, cloud-connected, open enterprise.
|
•
|
Services helps customers reach their IT and business goals by enabling the rapid implementation and adoption of our mainframe solutions and enterprise solutions.
|
•
|
Total revenue
decreased
$95 million, or
2%
, as a result of a decline in subscription and maintenance revenue and a decline in software fees and other revenue. The
decrease
in subscription and maintenance revenue for fiscal
2014
compared with fiscal
2013
was primarily attributable to a decrease in fiscal 2014 and prior period enterprise solutions new product sales. In addition, there was an
unfavorable
foreign exchange effect of
$37 million
compared with fiscal
2013
.
|
•
|
Due to sales under-performance in fiscal 2014, we expect a year-over-year percentage decline in total revenue for fiscal 2015 compared with fiscal 2014 similar to or slightly below the year-over-year percentage decline in total revenue for fiscal 2014 compared with fiscal 2013. We expect year-over-year revenue growth to decline by a low-single-digit percentage in the first half of fiscal 2015 and to improve through the second half of fiscal 2015.
|
•
|
Total bookings
increased
11%
primarily as a result of a year-over-year increase in renewals within subscription and maintenance bookings, partially offset by a decrease in total new product and mainframe solutions capacity sales.
|
•
|
Mainframe solutions renewals, and to a lesser extent, enterprise solutions renewals, increased year-over-year primarily as a result of the timing of our renewal portfolio.
|
•
|
Within total bookings, total new product and mainframe solutions capacity sales decreased by approximately 10% for fiscal 2014 compared with fiscal 2013 primarily due to a decrease in mainframe solutions capacity sales in the fourth quarter of fiscal 2014. Mainframe solutions new product sales decreased by a percentage in the low teens and capacity sales decreased in a mid-30% range. Enterprise solutions new product sales decreased by a mid-single-digit percentage.
|
•
|
We expect our fiscal 2015 renewal portfolio to decline by a high-single-digit percentage compared with fiscal 2014. Excluding the impact from a contract renewal with a large system integrator which occurred during fiscal 2014, we expect the value of our fiscal 2015 renewal portfolio to be consistent with the value of our fiscal 2014 renewal portfolio.
|
•
|
Total expenses before interest and income taxes
increased
5%
compared with the year-ago period, primarily due to expenses associated with the Fiscal 2014 Plan recognized within “Other (gains) expenses, net”, increases in product development and enhancements expenses and costs of licensing and maintenance. These increases were partially offset by a decrease in selling and marketing expenses, driven mostly by the lower number of employees involved in selling and marketing activities, and a decrease in amortization of capitalized software costs.
|
•
|
Product development and enhancements expenses increased as the amount capitalized for internally developed software costs decreased.
|
•
|
Income tax expense for fiscal
2014
and fiscal
2013
was
$140 million
and
$354 million
, respectively. This decrease was primarily due to the favorable resolutions of uncertain tax positions relating to U.S. and non-U.S. jurisdictions.
|
•
|
Our fiscal 2014 and 2013 effective tax rate was 13.5% and 27.4%, respectively. We expect a full-year effective tax rate of about 30% for fiscal 2015.
|
•
|
Diluted income per common share from continuing operations
decreased
to
$1.99
from
$2.03
, primarily due to the decrease in revenue, partially offset by a decrease in income tax expense.
|
•
|
Mainframe Solutions revenue
decreased
compared with the year-ago period primarily due to an unfavorable foreign exchange effect. Excluding the effect of foreign exchange, Mainframe Solutions revenue would have increased slightly primarily as a result of improved renewal yields. Mainframe Solutions operating margin increased primarily as a result of a decrease in selling and marketing expenses.
|
•
|
Enterprise Solutions revenue
decreased
compared with the year-ago period primarily due to a decrease in new product sales in both the current and prior fiscal year. This decline in revenue was primarily from a decrease in sales of certain mature product lines, partially offset by an increase in sales of recently acquired products. Enterprise Solutions operating margin increased as a result of the decrease in selling and marketing expenses and product development and enhancement expenses during fiscal 2014.
|
•
|
Services revenue
decreased
slightly compared with fiscal
2013
primarily due to a decrease in engagements relating to customer education and government agencies. Operating margin for Services remained consistent for fiscal 2014 compared with fiscal 2013.
|
•
|
Net cash provided by operating activities — continuing operations
decreased
28%
compared with the year-ago period primarily due to higher income tax payments of
$176 million
, payments associated with the Fiscal 2014 Plan of $108 million and an increase in internally developed software costs recognized as expense of approximately $125 million.
|
•
|
We expect cash flow from operations to increase by a percentage between the mid-single digits and the low teens for fiscal 2015 compared with fiscal 2014, primarily as a result of expected lower cash payments relating to income taxes and lower payments associated with the Fiscal 2014 Plan.
|
•
|
In the fourth quarter of fiscal 2014, the Company entered into a definitive agreement to divest its CA ERwin Data Modeling solution assets (ERwin). The Company expects to close the sale of ERwin during fiscal 2015. The results of these business operations are presented in income from discontinued operations for all periods.
|
•
|
The divestiture is part of our continued effort to rationalize our portfolio and further sharpen our focus on core capabilities, such as Management Cloud, application development and IT operations (DevOps) and Security across mainframe, distributed, cloud and mobile environments.
|
|
|
Year Ended March 31,
|
|
Change
|
|
Percent Change
|
|||||||||
|
|
2014
(1)
|
|
2013
(1)
|
|
||||||||||
|
|
(dollars in millions)
|
|
|
|||||||||||
Total revenue
|
|
$
|
4,515
|
|
|
$
|
4,610
|
|
|
$
|
(95
|
)
|
|
(2
|
)%
|
Income from continuing operations
|
|
$
|
899
|
|
|
$
|
939
|
|
|
$
|
(40
|
)
|
|
(4
|
)%
|
Cash provided by operating activities — continuing operations
|
|
$
|
997
|
|
|
$
|
1,390
|
|
|
$
|
(393
|
)
|
|
(28
|
)%
|
Total bookings
|
|
$
|
4,521
|
|
|
$
|
4,082
|
|
|
$
|
439
|
|
|
11
|
%
|
Subscription and maintenance bookings
|
|
$
|
3,718
|
|
|
$
|
3,214
|
|
|
$
|
504
|
|
|
16
|
%
|
Weighted average subscription and maintenance license agreement duration in years
|
|
3.35
|
|
|
3.27
|
|
|
0.08
|
|
|
2
|
%
|
|
|
At March 31,
|
|
Change
|
|
Percent Change
|
|||||||||
|
|
2014
|
|
2013
|
|
||||||||||
|
|
(dollars in millions)
|
|
|
|||||||||||
Cash, cash equivalents and short-term investments
(2)
|
|
$
|
3,252
|
|
|
$
|
2,776
|
|
|
$
|
476
|
|
|
17
|
%
|
Total debt
|
|
$
|
1,766
|
|
|
$
|
1,290
|
|
|
$
|
476
|
|
|
37
|
%
|
Total expected future cash collections from committed contracts
(1) (3)
|
|
$
|
5,155
|
|
|
$
|
5,169
|
|
|
$
|
(14
|
)
|
|
—
|
%
|
Total revenue backlog
(1) (3)
|
|
$
|
7,704
|
|
|
$
|
7,747
|
|
|
$
|
(43
|
)
|
|
(1
|
)%
|
Total current revenue backlog
(1) (3)
|
|
$
|
3,542
|
|
|
$
|
3,545
|
|
|
$
|
(3
|
)
|
|
—
|
%
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
(2)
|
At March 31, 2014, short-term investments were less than $1 million. At March 31, 2013, short-term investments were $183 million.
|
(3)
|
Refer to the discussion in the “Liquidity and Capital Resources” section of this MD&A for additional information about expected future cash collections from committed contracts, billing backlog and revenue backlog.
|
|
|
Year Ended March 31,
|
|
Dollar Change
2014/2013
|
|
Percent Change
2014/2013
|
|
Dollar Change
2013/2012
|
|
Percent Change
2013/2012
|
||||||||||||||||
|
|
2014
(1)
|
|
2013
(1)
|
|
2012
(1)
|
|
|||||||||||||||||||
|
|
(dollars in millions)
|
||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subscription and maintenance
|
|
$
|
3,747
|
|
|
$
|
3,833
|
|
|
$
|
3,994
|
|
|
$
|
(86
|
)
|
|
(2
|
)%
|
|
$
|
(161
|
)
|
|
(4
|
)%
|
Professional services
|
|
379
|
|
|
382
|
|
|
382
|
|
|
(3
|
)
|
|
(1
|
)%
|
|
—
|
|
|
—
|
%
|
|||||
Software fees and other
|
|
389
|
|
|
395
|
|
|
403
|
|
|
(6
|
)
|
|
(2
|
)%
|
|
(8
|
)
|
|
(2
|
)%
|
|||||
Total revenue
|
|
$
|
4,515
|
|
|
$
|
4,610
|
|
|
$
|
4,779
|
|
|
$
|
(95
|
)
|
|
(2
|
)%
|
|
$
|
(169
|
)
|
|
(4
|
)%
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs of licensing and maintenance
|
|
$
|
303
|
|
|
$
|
282
|
|
|
$
|
284
|
|
|
$
|
21
|
|
|
7
|
%
|
|
$
|
(2
|
)
|
|
(1
|
)%
|
Cost of professional services
|
|
353
|
|
|
354
|
|
|
357
|
|
|
(1
|
)
|
|
—
|
%
|
|
(3
|
)
|
|
(1
|
)%
|
|||||
Amortization of capitalized software costs
|
|
282
|
|
|
317
|
|
|
223
|
|
|
(35
|
)
|
|
(11
|
)%
|
|
94
|
|
|
42
|
%
|
|||||
Selling and marketing
|
|
1,150
|
|
|
1,273
|
|
|
1,388
|
|
|
(123
|
)
|
|
(10
|
)%
|
|
(115
|
)
|
|
(8
|
)%
|
|||||
General and administrative
|
|
395
|
|
|
405
|
|
|
462
|
|
|
(10
|
)
|
|
(2
|
)%
|
|
(57
|
)
|
|
(12
|
)%
|
|||||
Product development and enhancements
|
|
587
|
|
|
489
|
|
|
509
|
|
|
98
|
|
|
20
|
%
|
|
(20
|
)
|
|
(4
|
)%
|
|||||
Depreciation and amortization of other intangible assets
|
|
144
|
|
|
158
|
|
|
176
|
|
|
(14
|
)
|
|
(9
|
)%
|
|
(18
|
)
|
|
(10
|
)%
|
|||||
Other (gains) expenses, net
|
|
208
|
|
|
(5
|
)
|
|
15
|
|
|
213
|
|
|
NM
|
|
|
(20
|
)
|
|
(133
|
)%
|
|||||
Total expense before interest and income taxes
|
|
$
|
3,422
|
|
|
$
|
3,273
|
|
|
$
|
3,414
|
|
|
$
|
149
|
|
|
5
|
%
|
|
$
|
(141
|
)
|
|
(4
|
)%
|
Income before interest and income taxes
|
|
$
|
1,093
|
|
|
$
|
1,337
|
|
|
$
|
1,365
|
|
|
$
|
(244
|
)
|
|
(18
|
)%
|
|
$
|
(28
|
)
|
|
(2
|
)%
|
Interest expense, net
|
|
54
|
|
|
44
|
|
|
35
|
|
|
10
|
|
|
23
|
%
|
|
9
|
|
|
26
|
%
|
|||||
Income before income taxes
|
|
$
|
1,039
|
|
|
$
|
1,293
|
|
|
$
|
1,330
|
|
|
$
|
(254
|
)
|
|
(20
|
)%
|
|
$
|
(37
|
)
|
|
(3
|
)%
|
Income tax expense
|
|
140
|
|
|
354
|
|
|
407
|
|
|
(214
|
)
|
|
(60
|
)%
|
|
(53
|
)
|
|
(13
|
)%
|
|||||
Income from continuing operations
|
|
$
|
899
|
|
|
$
|
939
|
|
|
$
|
923
|
|
|
$
|
(40
|
)
|
|
(4
|
)%
|
|
$
|
16
|
|
|
2
|
%
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
|
|
Percentage of Total Revenue
for the Year Ended March 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
Revenue:
|
|
|
|
|
|
|
|||
Subscription and maintenance
|
|
83
|
%
|
|
83
|
%
|
|
84
|
%
|
Professional services
|
|
8
|
|
|
8
|
|
|
8
|
|
Software fees and other
|
|
9
|
|
|
9
|
|
|
8
|
|
Total revenue
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Expenses:
|
|
|
|
|
|
|
|||
Costs of licensing and maintenance
|
|
7
|
%
|
|
6
|
%
|
|
6
|
%
|
Cost of professional services
|
|
8
|
|
|
8
|
|
|
7
|
|
Amortization of capitalized software costs
|
|
6
|
|
|
7
|
|
|
5
|
|
Selling and marketing
|
|
25
|
|
|
28
|
|
|
29
|
|
General and administrative
|
|
9
|
|
|
9
|
|
|
10
|
|
Product development and enhancements
|
|
13
|
|
|
11
|
|
|
11
|
|
Depreciation and amortization of other intangible assets
|
|
3
|
|
|
3
|
|
|
4
|
|
Other (gains) expenses, net
|
|
5
|
|
|
—
|
|
|
—
|
|
Total expenses before interest and income taxes
|
|
76
|
%
|
|
71
|
%
|
|
71
|
%
|
Income before interest and income taxes
|
|
24
|
%
|
|
29
|
%
|
|
29
|
%
|
Interest expense, net
|
|
1
|
|
|
1
|
|
|
1
|
|
Income before income taxes
|
|
23
|
%
|
|
28
|
%
|
|
28
|
%
|
Income tax expense
|
|
3
|
|
|
8
|
|
|
9
|
|
Income from continuing operations
|
|
20
|
%
|
|
20
|
%
|
|
19
|
%
|
|
|
Fiscal 2014
Compared With
Fiscal 2013
|
|
Fiscal 2013
Compared With
Fiscal 2012
|
||||||||||||||||||||||||||||||
|
|
(dollars in millions)
|
||||||||||||||||||||||||||||||||
|
|
2014
(1)
|
|
% Of Total
|
|
2013
(1)
|
|
% Of Total
|
|
%
Change
|
|
2013
(1)
|
|
% Of Total
|
|
2012
(1)
|
|
% Of Total
|
|
%
Change
|
||||||||||||||
United States
|
|
$
|
2,677
|
|
|
59
|
%
|
|
$
|
2,716
|
|
|
59
|
%
|
|
(1
|
)%
|
|
$
|
2,716
|
|
|
59
|
%
|
|
$
|
2,779
|
|
|
58
|
%
|
|
(2
|
)%
|
International
|
|
1,838
|
|
|
41
|
%
|
|
1,894
|
|
|
41
|
%
|
|
(3
|
)%
|
|
1,894
|
|
|
41
|
%
|
|
2,000
|
|
|
42
|
%
|
|
(5
|
)%
|
||||
Total
|
|
$
|
4,515
|
|
|
100
|
%
|
|
$
|
4,610
|
|
|
100
|
%
|
|
(2
|
)%
|
|
$
|
4,610
|
|
|
100
|
%
|
|
$
|
4,779
|
|
|
100
|
%
|
|
(4
|
)%
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
|
2014
|
|
2013
|
|
2012
|
||||||
Fiscal 2014 Plan
|
|
$
|
171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Legal settlements
|
|
29
|
|
|
18
|
|
|
9
|
|
|||
(Gains) losses from foreign exchange derivative contracts
|
|
(20
|
)
|
|
11
|
|
|
(3
|
)
|
|||
Losses from foreign exchange rate fluctuations
|
|
38
|
|
|
1
|
|
|
7
|
|
|||
Assignment of rights to intellectual property
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|||
Other miscellaneous items
|
|
(10
|
)
|
|
—
|
|
|
2
|
|
|||
Total
|
|
$
|
208
|
|
|
$
|
(5
|
)
|
|
$
|
15
|
|
Mainframe Solutions
|
|
Fiscal 2014
(1)
|
|
Fiscal 2013
(1)
|
|
Fiscal 2012
(1)
|
||||||
Revenue
|
|
$
|
2,478
|
|
|
$
|
2,489
|
|
|
$
|
2,612
|
|
Expenses
|
|
987
|
|
|
1,028
|
|
|
1,157
|
|
|||
Segment profit
|
|
$
|
1,491
|
|
|
$
|
1,461
|
|
|
$
|
1,455
|
|
Segment operating margin
|
|
60
|
%
|
|
59
|
%
|
|
56
|
%
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
Enterprise Solutions
|
|
Fiscal 2014
(1)
|
|
Fiscal 2013
(1)
|
|
Fiscal 2012
(1)
|
||||||
Revenue
|
|
$
|
1,658
|
|
|
$
|
1,739
|
|
|
$
|
1,785
|
|
Expenses
|
|
1,514
|
|
|
1,599
|
|
|
1,691
|
|
|||
Segment profit
|
|
$
|
144
|
|
|
$
|
140
|
|
|
$
|
94
|
|
Segment operating margin
|
|
9
|
%
|
|
8
|
%
|
|
5
|
%
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
Services
|
|
Fiscal 2014
|
|
Fiscal 2013
|
|
Fiscal 2012
|
||||||
Revenue
|
|
$
|
379
|
|
|
$
|
382
|
|
|
$
|
382
|
|
Expenses
|
|
357
|
|
|
358
|
|
|
359
|
|
|||
Segment profit
|
|
$
|
22
|
|
|
$
|
24
|
|
|
$
|
23
|
|
Segment operating margin
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
|
Fiscal 2014 Quarter Ended
|
|
Total
(1)
|
||||||||||||||||
|
|
June 30
(1)
|
|
September 30
(1)
|
|
December 31
(1)
|
|
March 31
(1)
|
|
|||||||||||
|
|
(dollars in millions, except per share amounts)
|
||||||||||||||||||
Revenue
|
|
$
|
1,120
|
|
|
$
|
1,132
|
|
|
$
|
1,155
|
|
|
$
|
1,108
|
|
|
$
|
4,515
|
|
Percentage of annual revenue
|
|
25
|
%
|
|
25
|
%
|
|
25
|
%
|
|
25
|
%
|
|
100
|
%
|
|||||
Costs of licensing and maintenance
|
|
$
|
70
|
|
|
$
|
73
|
|
|
$
|
78
|
|
|
$
|
82
|
|
|
$
|
303
|
|
Cost of professional services
|
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
89
|
|
|
$
|
353
|
|
Amortization of capitalized software costs
|
|
$
|
69
|
|
|
$
|
72
|
|
|
$
|
72
|
|
|
$
|
69
|
|
|
$
|
282
|
|
Income from continuing operations
|
|
$
|
331
|
|
|
$
|
236
|
|
|
$
|
228
|
|
|
$
|
104
|
|
|
$
|
899
|
|
Basic income per common share from continuing operations
|
|
$
|
0.73
|
|
|
$
|
0.52
|
|
|
$
|
0.51
|
|
|
$
|
0.23
|
|
|
$
|
2.00
|
|
Diluted income per common share from continuing operations
|
|
$
|
0.73
|
|
|
$
|
0.52
|
|
|
$
|
0.50
|
|
|
$
|
0.23
|
|
|
$
|
1.99
|
|
|
|
Fiscal 2013 Quarter Ended
|
|
Total
(1)
|
||||||||||||||||
|
|
June 30
(1)
|
|
September 30
(1)
|
|
December 31
(1)
|
|
March 31
(1)
|
|
|||||||||||
|
|
(dollars in millions, except per share amounts)
|
||||||||||||||||||
Revenue
|
|
$
|
1,137
|
|
|
$
|
1,144
|
|
|
$
|
1,186
|
|
|
$
|
1,143
|
|
|
$
|
4,610
|
|
Percentage of annual revenue
|
|
24
|
%
|
|
25
|
%
|
|
26
|
%
|
|
25
|
%
|
|
100
|
%
|
|||||
Costs of licensing and maintenance
|
|
$
|
68
|
|
|
$
|
69
|
|
|
$
|
71
|
|
|
$
|
74
|
|
|
$
|
282
|
|
Cost of professional services
|
|
$
|
86
|
|
|
$
|
88
|
|
|
$
|
92
|
|
|
$
|
88
|
|
|
$
|
354
|
|
Amortization of capitalized software costs
(2)
|
|
$
|
64
|
|
|
$
|
67
|
|
|
$
|
65
|
|
|
$
|
121
|
|
|
$
|
317
|
|
Income from continuing operations
|
|
$
|
236
|
|
|
$
|
218
|
|
|
$
|
247
|
|
|
$
|
238
|
|
|
$
|
939
|
|
Basic income per common share from continuing operations
|
|
$
|
0.50
|
|
|
$
|
0.47
|
|
|
$
|
0.54
|
|
|
$
|
0.52
|
|
|
$
|
2.03
|
|
Diluted income per common share from continuing operations
|
|
$
|
0.50
|
|
|
$
|
0.47
|
|
|
$
|
0.54
|
|
|
$
|
0.52
|
|
|
$
|
2.03
|
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
(2)
|
Includes impairment of $55 million in the fourth quarter of fiscal 2013 relating to purchased software (see Note 6, “Long Lived Assets,” in the Notes to the Consolidated Financial Statements for additional information).
|
|
|
March 31, 2014
(1)
|
|
March 31, 2013
(1)
|
||||
|
|
(in millions)
|
||||||
Billings backlog:
|
|
|
|
|
||||
Amounts to be billed — current
|
|
$
|
1,986
|
|
|
$
|
2,140
|
|
Amounts to be billed — noncurrent
|
|
2,369
|
|
|
2,173
|
|
||
Total billings backlog
|
|
$
|
4,355
|
|
|
$
|
4,313
|
|
Revenue backlog:
|
|
|
|
|
||||
Revenue to be recognized within the next 12 months — current
|
|
$
|
3,542
|
|
|
$
|
3,545
|
|
Revenue to be recognized beyond the next 12 months — noncurrent
|
|
4,162
|
|
|
4,202
|
|
||
Total revenue backlog
|
|
$
|
7,704
|
|
|
$
|
7,747
|
|
Deferred revenue (billed or collected)
|
|
$
|
3,349
|
|
|
$
|
3,434
|
|
Total billings backlog
|
|
4,355
|
|
|
4,313
|
|
||
Total revenue backlog
|
|
$
|
7,704
|
|
|
$
|
7,747
|
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
|
|
March 31, 2014
(1)
|
|
March 31, 2013
(1)
|
||||
|
|
(in millions)
|
||||||
Expected future cash collections:
|
|
|
|
|
||||
Total billings backlog
|
|
$
|
4,355
|
|
|
$
|
4,313
|
|
Trade accounts receivable, net
|
|
800
|
|
|
856
|
|
||
Total expected future cash collections
|
|
$
|
5,155
|
|
|
$
|
5,169
|
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
|
Year Ended March 31,
|
|
$ Change
|
||||||||||||||||
|
2014
(1)
|
|
2013
(1)
|
|
2012
(1)
|
|
2014 / 2013
|
|
2013 / 2012
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash collections from billings
(2)
|
$
|
4,756
|
|
|
$
|
4,824
|
|
|
$
|
5,107
|
|
|
$
|
(68
|
)
|
|
$
|
(283
|
)
|
Vendor disbursements and payroll
(2)
|
(3,093
|
)
|
|
(3,110
|
)
|
|
(3,226
|
)
|
|
17
|
|
|
116
|
|
|||||
Income tax payments, net
|
(500
|
)
|
|
(324
|
)
|
|
(411
|
)
|
|
(176
|
)
|
|
87
|
|
|||||
Other disbursements, net
(3)
|
(166
|
)
|
|
—
|
|
|
18
|
|
|
(166
|
)
|
|
(18
|
)
|
|||||
Net cash provided by continuing operating activities
|
$
|
997
|
|
|
$
|
1,390
|
|
|
$
|
1,488
|
|
|
$
|
(393
|
)
|
|
$
|
(98
|
)
|
(1)
|
Information presented excludes the results of our discontinued operations.
|
(2)
|
Amounts include value added taxes and sales taxes.
|
(3)
|
For fiscal 2014, amount includes $108 million of payments associated with the Fiscal 2014 Plan, interest, prior period restructuring plans and miscellaneous receipts and disbursements. For fiscal 2013, amount includes interest, restructuring payments and $35 million in cash proceeds received from the aforementioned intellectual property transaction in the first quarter of fiscal 2013 and miscellaneous receipts and disbursements. For fiscal 2012, amount includes interest, restructuring payments and miscellaneous receipts and disbursements.
|
|
|
At March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(in millions)
|
||||||
Revolving credit facility due June 2018
|
|
—
|
|
|
—
|
|
||
5.375% Senior Notes due December 2019
|
|
750
|
|
|
750
|
|
||
6.125% Senior Notes due December 2014, net of unamortized premium from fair value hedge of $8 and $19
|
|
508
|
|
|
519
|
|
||
2.875% Senior Notes due August 2018
|
|
250
|
|
|
—
|
|
||
4.500% Senior Notes due August 2023
|
|
250
|
|
|
—
|
|
||
Other indebtedness, primarily capital leases
|
|
13
|
|
|
26
|
|
||
Unamortized discount for Notes
|
|
(5
|
)
|
|
(5
|
)
|
||
Total debt outstanding
|
|
$
|
1,766
|
|
|
$
|
1,290
|
|
Less the current portion
|
|
(514
|
)
|
|
(16
|
)
|
||
Total long-term debt portion
|
|
$
|
1,252
|
|
|
$
|
1,274
|
|
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less Than
1 Year
|
|
1–3
Years
|
|
3–5
Years
|
|
More Than
5 Years
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Long-term debt obligations (inclusive of interest)
|
|
$
|
2,156
|
|
|
$
|
579
|
|
|
$
|
120
|
|
|
$
|
366
|
|
|
$
|
1,091
|
|
Operating lease obligations
(1)
|
|
447
|
|
|
95
|
|
|
146
|
|
|
101
|
|
|
105
|
|
|||||
Purchase obligations
|
|
113
|
|
|
85
|
|
|
25
|
|
|
3
|
|
|
—
|
|
|||||
Other obligations
(2)
|
|
56
|
|
|
18
|
|
|
17
|
|
|
9
|
|
|
12
|
|
|||||
Total
|
|
$
|
2,772
|
|
|
$
|
777
|
|
|
$
|
308
|
|
|
$
|
479
|
|
|
$
|
1,208
|
|
(1)
|
The contractual obligations for noncurrent operating leases exclude sublease income totaling $23 million expected to be received in the following periods: $5 million (less than 1 year); $7 million (1–3 years); $5 million (3–5 years); and $6 million (more than 5 years).
|
(2)
|
$202 million of estimated liabilities related to unrecognized tax benefits are excluded from the contractual obligations table because we could not make a reasonable estimate of when those amounts will become payable.
|
•
|
Historical information, such as general collection history of multi-year software agreements;
|
•
|
Current customer information and events, such as extended delinquency, requests for restructuring and filings for bankruptcy;
|
•
|
Results of analyzing historical and current data; and
|
•
|
The overall macroeconomic environment.
|
|
|
Incorporated by Reference
|
|
||
Exhibit Number
|
Exhibit Description
|
Form
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
3.1
|
Restated Certificate of Incorporation.
|
8-K
|
3.3
|
03/09/06
|
|
3.2
|
By-Laws of the Company, as amended.
|
8-K
|
3.1
|
02/28/07
|
|
4.1
|
Restated Certificate of Designation of Series One Junior Participating Preferred Stock, Class A of the Company.
|
8-K
|
3.2
|
03/09/06
|
|
4.2
|
Stockholder Protection Rights Agreement dated November 8, 2012 between the Company and Computershare Shareowner Services LLC, as Rights Agent, including as Exhibit A the forms of Rights Certificate and of Election to Exercise and as Exhibit B the form of Certificate of Designation and Terms of the Participating Preferred Stock of the Company.
|
8-K
|
4.1
|
11/08/12
|
|
4.3
|
Indenture with respect to the Company’s 4.75% Senior Notes due 2009 and 6.125% Senior Notes due 2014 dated November 18, 2004 between the Company and The Bank of New York, as Trustee.
|
8-K
|
4.2
|
11/19/04
|
|
4.4
|
Purchase Agreement dated November 15, 2004 among the Initial Purchasers of the 4.75% Senior Notes due 2009 and 6.125% Senior Notes due 2014 and the Company.
|
8-K
|
4.1
|
11/19/04
|
|
4.5
|
First Supplemental Indenture dated November 30, 2007 to the Indenture dated November 18, 2004 between the Company and The Bank of New York, as trustee.
|
8-K
|
4.1
|
01/09/08
|
|
4.6
|
Indenture dated June 1, 2008 between the Company and U.S. Bank National Association, as trustee, relating to the senior debt securities, the senior subordinated debt securities and the junior subordinated debt securities, as applicable.
|
S-3
|
4.1
|
06/12/08
|
|
4.7
|
Officers’ Certificates dated November 13, 2009 establishing the terms of the Company’s 5.375% Senior Notes due 2019 pursuant to the Indenture dated June 1, 2008 (including the form of the Senior Notes).
|
8-K
|
4.2
|
11/13/09
|
|
4.8
|
Officers’ Certificate dated August 16, 2013 establishing the terms of the Company’s 2.875% Senior Notes due 2018 and 4.500% Senior Notes due 2023 pursuant to the Indenture dated June 1, 2008 (including the forms of the Senior Notes).
|
8-K
|
4.2
|
08/16/13
|
|
4.9
|
Addendum to Registration Rights Agreement dated November 30, 2007 relating to $500,000,000 6.125% Senior Notes Due 2014.
|
8-K
|
99.3
|
01/09/08
|
|
|
|
Incorporated by Reference
|
|
||
Exhibit Number
|
Exhibit Description
|
Form
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
10.1*
|
CA, Inc. 2002 Incentive Plan (amended and restated effective as of April 27, 2007).
|
10-K
|
10.9
|
05/30/07
|
|
10.2*
|
CA, Inc. 2002 Compensation Plan for Non-Employee Directors.
|
DEF 14A
|
Exhibit C
|
07/26/02
|
|
10.3
|
Deferred Prosecution Agreement, including the related Information and Stipulation of Facts.
|
8-K
|
10.1
|
09/22/04
|
|
10.4
|
Final Consent Judgment of Permanent Injunction and Other Relief, including SEC complaint.
|
8-K
|
10.2
|
09/22/04
|
|
10.5*
|
Form of Restricted Stock Unit Certificate under the CA, Inc. 2002 Incentive Plan.
|
10-Q
|
10.1
|
02/09/05
|
|
10.6*
|
Form of Non-Qualified Stock Option Certificate under the CA, Inc. 2002 Incentive Plan.
|
10-Q
|
10.2
|
02/09/05
|
|
10.7*
|
Form of Non-Qualified Stock Option Award Certificate under the CA, Inc. 2002 Incentive Plan.
|
8-K
|
10.5
|
06/02/06
|
|
10.8*
|
Form of Non-Qualified Stock Option Award Certificate (Employment Agreement) under the CA, Inc. 2002 Incentive Plan.
|
8-K
|
10.6
|
06/02/06
|
|
10.9*
|
Form of Incentive Stock Option Award Certificate under the CA, Inc. 2002 Incentive Plan.
|
8-K
|
10.7
|
06/02/06
|
|
10.10*
|
Form of Incentive Stock Option Award Certificate (Employment Agreement) under the CA, Inc. 2002 Incentive Plan.
|
8-K
|
10.8
|
06/02/06
|
|
10.11*
|
Program whereby certain designated employees, including the Company’s Named Executive Officers, are provided with certain covered medical services, effective August 1, 2005.
|
8-K
|
10.1
|
08/02/05
|
|
10.12*
|
Amended and Restated CA, Inc. Executive Deferred Compensation Plan, effective November 20, 2006.
|
10-Q
|
10.1
|
02/06/07
|
|
10.13*
|
Form of Deferral Election.
|
10-K
|
10.52
|
07/31/06
|
|
10.14
|
Lease dated August 15, 2006 among the Company, Island Headquarters Operators LLC and Islandia Operators LLC.
|
8-K
|
10.2
|
08/21/06
|
|
10.15*
|
CA, Inc. 2007 Incentive Plan.
|
8-K
|
10.1
|
08/27/07
|
|
10.16*
|
Form of Award Agreement under the CA, Inc. 2007 Incentive Plan - Restricted Stock Units.
|
8-K
|
10.2
|
08/27/07
|
|
10.17*
|
Form of Award Agreement under the CA, Inc. 2007 Incentive Plan - Restricted Stock Awards.
|
8-K
|
10.3
|
08/27/07
|
|
10.18*
|
Form of Award Agreement under the CA, Inc. 2007 Incentive Plan - Non-Qualified Stock Awards.
|
8-K
|
10.4
|
08/27/07
|
|
10.19
|
Settlement Agreement dated December 21, 2007 between the Company and The Bank of New York, as trustee, Linden Capital L.P. and Swiss Re Financial Products Corporation.
|
8-K
|
99.2
|
01/09/08
|
|
10.20*
|
First Amendment to CA, Inc. Executive Deferred Compensation Plan, effective February 25, 2008.
|
10-K
|
10.68
|
05/23/08
|
|
10.21*
|
First Amendment to Adoption Agreement for CA, Inc. Executive Deferred Compensation Plan, effective February 25, 2008.
|
10-K
|
10.69
|
05/23/08
|
|
|
|
Incorporated by Reference
|
|
||
Exhibit Number
|
Exhibit Description
|
Form
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
10.22*
|
Amended and Restated Employment Agreement dated September 30, 2009 between the Company and Amy Fliegelman Olli.
|
10-Q
|
10.2
|
10/23/09
|
|
10.23*
|
Director Retirement Donation Policy.
|
10-Q
|
10.9
|
10/23/09
|
|
10.24*
|
Non-Qualified Stock Option Certificate for William E. McCracken.
|
10-Q
|
10.10
|
10/23/09
|
|
10.25*
|
Form of Restricted Stock Unit Award Agreement for certain Named Executive Officers.
|
10-Q
|
10.3
|
01/29/10
|
|
10.26*
|
Homeowners Relocation Policy for Senior Executives.
|
10-K
|
10.57
|
05/14/10
|
|
10.27*
|
Renters Relocation Policy for Senior Executives.
|
10-K
|
10.58
|
05/14/10
|
|
10.28*
|
Employment Agreement dated May 6, 2010 between the Company and William E. McCracken.
|
8-K
|
10.1
|
05/06/10
|
|
10.29*
|
CA, Inc. Special Retirement Vesting Benefit Policy.
|
10-Q
|
10.1
|
01/26/11
|
|
10.30*
|
CA, Inc. 2003 Compensation Plan for Non-Employee Directors (amended and restated dated December 31, 2010).
|
10-Q
|
10.2
|
01/26/11
|
|
10.31*
|
Letter dated May 18, 2011 from the Company to Richard J. Beckert regarding terms of employment.
|
10-Q
|
10.1
|
07/22/11
|
|
10.32*
|
Letter dated April 26, 2011 from the Company to Peter JL Griffiths regarding terms of employment.
|
10-Q
|
10.1
|
10/28/11
|
|
10.33*
|
CA, Inc. 2011 Incentive Plan.
|
DEF 14A
|
Exhibit B
|
06/10/11
|
|
10.34*
|
Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Restricted Stock Units.
|
10-Q
|
10.4
|
10/28/11
|
|
10.35*
|
Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Restricted Stock Awards.
|
10-Q
|
10.5
|
10/28/11
|
|
10.36*
|
Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Restricted Stock Awards (special retirement vesting).
|
10-Q
|
10.6
|
10/28/11
|
|
10.37*
|
Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Non-Qualified Stock Options.
|
10-Q
|
10.7
|
10/28/11
|
|
10.38*
|
CA, Inc. 2012 Employee Stock Purchase Plan.
|
DEF 14A
|
Exhibit C
|
06/10/11
|
|
10.39
|
Credit Agreement dated August 19, 2011.
|
8-K
|
10.1
|
08/24/11
|
|
10.40*
|
Form of Transitional Award Agreement under the CA, Inc. 2007 Incentive Plan - Restricted Stock Awards.
|
10-K
|
10.55
|
05/11/12
|
|
10.41*
|
Form of Transitional Award Agreement under the CA, Inc. 2011 Incentive Plan - Restricted Stock Awards.
|
10-K
|
10.56
|
05/11/12
|
|
10.42*
|
Amended Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Restricted Stock Units.
|
10-K
|
10.57
|
05/11/12
|
|
10.43*
|
Amended Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Restricted Stock Awards.
|
10-K
|
10.58
|
05/11/12
|
|
10.44*
|
Amended Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Restricted Stock Awards (special retirement vesting).
|
10-K
|
10.59
|
05/11/12
|
|
|
|
Incorporated by Reference
|
|
||
Exhibit Number
|
Exhibit Description
|
Form
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
10.45*
|
Amended Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Non-Qualified Stock Options.
|
10-K
|
10.60
|
05/11/12
|
|
10.46*
|
Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Non-Qualified Stock Options (Canadian employees).
|
10-K
|
10.61
|
05/11/12
|
|
10.47*
|
CA, Inc. 2012 Compensation Plan for Non-Employee Directors.
|
DEF 14A
|
Exhibit B
|
06/11/12
|
|
10.48*
|
Separation Agreement and General Claims Release dated May 1, 2012 between the Company and David C. Dobson.
|
10-Q
|
10.1
|
07/27/12
|
|
10.49*
|
General Claims Release dated May 24, 2012 between the Company and Nancy E. Cooper.
|
10-Q
|
10.2
|
07/27/12
|
|
10.50*
|
Bring-down General Claims Release dated July 18, 2012 between the Company and David C. Dobson.
|
10-Q
|
10.3
|
07/27/12
|
|
10.51*
|
Summary description of amended financial planning benefit.
|
10-Q
|
10.1
|
10/26/12
|
|
10.52*
|
Employment Agreement dated December 10, 2012 between the Company and Michael P. Gregoire.
|
8-K
|
10.1
|
12/12/12
|
|
10.53*
|
Consulting Agreement dated December 11, 2012 between the Company and William E. McCracken.
|
8-K
|
10.2
|
12/12/12
|
|
10.54*
|
CA, Inc. Change in Control Severance Policy (amended and restated effective January 7, 2013).
|
10-Q
|
10.3
|
01/24/13
|
|
10.55*
|
Amended Form of Award Agreement under the CA, Inc. 2011 Incentive Plan - Non-Qualified Stock Options (Canadian employees).
|
10-K
|
10.64
|
05/09/13
|
|
10.56*
|
Separation Agreement and General Claims Release dated May 30, 2013 between the Company and William E. McCracken.
|
10-Q
|
10.1
|
07/25/13
|
|
10.57*
|
Amended and Restated Credit Agreement dated June 7, 2013.
|
8-K
|
10.1
|
06/10/13
|
|
10.58*
|
Form of Sign-On Award Agreement for Lauren P. Flaherty under the CA, Inc. 2011 Incentive Plan - Restricted Stock Units.
|
10-Q
|
10.2
|
10/25/13
|
|
10.59*
|
Form of Sign-On Award Agreement for Lauren P. Flaherty under the CA, Inc. 2011 Incentive Plan - Nonqualified Stock Options.
|
10-Q
|
10.3
|
10/25/13
|
|
10.60*
|
Letter dated January 21, 2014 from the Company to Adam Elster regarding terms of employment.
|
8-K
|
10.1
|
01/21/14
|
|
10.61*
|
Schedules A, B, and C (as amended effective January 21, 2014) to CA, Inc. Change in Control Severance Policy.
|
8-K
|
10.1
|
05/14/14
|
|
10.62*
|
Separation Agreement and General Claims Release dated February 14, 2014 between the Company and George J. Fischer.
|
|
|
|
X
|
10.63*
|
CA, Inc. Executive Severance Policy effective May 13, 2014.
|
|
|
|
X
|
10.64*
|
Summary description of Director compensation.
|
|
|
|
X
|
|
|
Incorporated by Reference
|
|
||
Exhibit Number
|
Exhibit Description
|
Form
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
12.1
|
Statement of Ratios of Earnings to Fixed Charges.
|
|
|
|
X
|
21
|
Subsidiaries of the Registrant.
|
|
|
|
X
|
23
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
X
|
24
|
Power of Attorney
|
|
|
|
X
|
31.1
|
Certification of the CEO pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
X
|
31.2
|
Certification of the CFO pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
X
|
32†
|
Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
X
|
101
|
The following financial statements from CA, Inc.’s Annual Report on Form 10-K for the year ended March 31, 2014, formatted in XBRL (eXtensible Business Reporting Language):
|
|
|
|
X
|
|
(i) Consolidated Balance Sheets - March 31, 2014 and March 31, 2013.
|
|
|
|
|
|
(ii) Consolidated Statements of Operations - Years Ended March 31, 2014, 2013 and 2012.
|
|
|
|
|
|
(iii) Consolidated Statements of Comprehensive Income - Years Ended March 31, 2014, 2013 and 2012.
|
|
|
|
|
|
(iv) Consolidated Statements of Stockholders’ Equity - Years Ended March 31, 2014, 2013 and 2012.
|
|
|
|
|
|
(v) Consolidated Statements of Cash Flows - Years Ended March 31, 2014, 2013 and 2012.
|
|
|
|
|
|
(vi) Notes to Consolidated Financial Statements - March 31, 2014.
|
|
|
|
|
|
|
CA, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Michael P. Gregoire
|
|
|
|
|
|
|
Michael P. Gregoire
|
|
|
|
Chief Executive Officer
|
|
|
By:
|
/s/ Michael P. Gregoire
|
|
|
|
|
|
|
Michael P. Gregoire
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
By:
|
/s/ Richard J. Beckert
|
|
|
|
|
|
|
Richard J. Beckert
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
By:
|
/s/ Neil A. Manna
|
|
|
|
|
|
|
Neil A. Manna
|
|
|
|
Senior Vice President, Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
*
|
|
Director
|
Jens Alder
|
|
|
|
|
|
*
|
|
Director
|
Raymond J. Bromark
|
|
|
|
|
|
*
|
|
Director
|
Gary J. Fernandes
|
|
|
|
|
|
*
|
|
Director
|
Michael P. Gregoire
|
|
|
|
|
|
*
|
|
Director
|
Rohit Kapoor
|
|
|
|
|
|
*
|
|
Director
|
Kay Koplovitz
|
|
|
|
|
|
*
|
|
Director
|
Christopher B. Lofgren
|
|
|
|
|
|
*
|
|
Director
|
Richard Sulpizio
|
|
|
|
|
|
*
|
|
Director
|
Laura S. Unger
|
|
|
|
|
|
*
|
|
Director
|
Arthur F. Weinbach
|
|
|
|
|
|
*
|
|
Director
|
Renato (Ron) Zambonini
|
|
|
|
|
*By:
|
/s/ C.H.R. DuPree
|
|
C.H.R. DuPree
|
|
Attorney-in-fact
|
|
March 31,
|
||||||
(in millions, except share amounts)
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,252
|
|
|
$
|
2,593
|
|
Short-term investments
|
—
|
|
|
183
|
|
||
Trade accounts receivable, net
|
800
|
|
|
856
|
|
||
Deferred income taxes
|
315
|
|
|
346
|
|
||
Other current assets
|
192
|
|
|
148
|
|
||
Total current assets
|
$
|
4,559
|
|
|
$
|
4,126
|
|
Property and equipment, net of accumulated depreciation of $828 and $786, respectively
|
$
|
295
|
|
|
$
|
311
|
|
Goodwill
|
5,922
|
|
|
5,864
|
|
||
Capitalized software and other intangible assets, net
|
1,063
|
|
|
1,242
|
|
||
Deferred income taxes
|
59
|
|
|
77
|
|
||
Other noncurrent assets, net
|
118
|
|
|
195
|
|
||
Total assets
|
$
|
12,016
|
|
|
$
|
11,815
|
|
Liabilities and stockholders' equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
514
|
|
|
$
|
16
|
|
Accounts payable
|
129
|
|
|
93
|
|
||
Accrued salaries, wages and commissions
|
275
|
|
|
304
|
|
||
Accrued expenses and other current liabilities
|
470
|
|
|
423
|
|
||
Deferred revenue (billed or collected)
|
2,459
|
|
|
2,465
|
|
||
Taxes payable, other than income taxes payable
|
66
|
|
|
77
|
|
||
Federal, state and foreign income taxes payable
|
—
|
|
|
151
|
|
||
Deferred income taxes
|
9
|
|
|
12
|
|
||
Total current liabilities
|
$
|
3,922
|
|
|
$
|
3,541
|
|
Long-term debt, net of current portion
|
$
|
1,252
|
|
|
$
|
1,274
|
|
Federal, state and foreign income taxes payable
|
182
|
|
|
338
|
|
||
Deferred income taxes
|
67
|
|
|
124
|
|
||
Deferred revenue (billed or collected)
|
890
|
|
|
969
|
|
||
Other noncurrent liabilities
|
133
|
|
|
119
|
|
||
Total liabilities
|
$
|
6,446
|
|
|
$
|
6,365
|
|
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; 438,740,478 and 448,149,131 shares outstanding, respectively
|
59
|
|
|
59
|
|
||
Additional paid-in capital
|
3,610
|
|
|
3,593
|
|
||
Retained earnings
|
5,818
|
|
|
5,357
|
|
||
Accumulated other comprehensive loss
|
(171
|
)
|
|
(155
|
)
|
||
Treasury stock, at cost, 150,954,603 and 141,545,950 shares, respectively
|
(3,746
|
)
|
|
(3,404
|
)
|
||
Total stockholders' equity
|
$
|
5,570
|
|
|
$
|
5,450
|
|
Total liabilities and stockholders' equity
|
$
|
12,016
|
|
|
$
|
11,815
|
|
|
Year Ended March 31,
|
||||||||||
(in millions, except per share amounts)
|
2014
|
|
2013
|
|
2012
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Subscription and maintenance
|
$
|
3,747
|
|
|
$
|
3,833
|
|
|
$
|
3,994
|
|
Professional services
|
379
|
|
|
382
|
|
|
382
|
|
|||
Software fees and other
|
389
|
|
|
395
|
|
|
403
|
|
|||
Total revenue
|
$
|
4,515
|
|
|
$
|
4,610
|
|
|
$
|
4,779
|
|
Expenses:
|
|
|
|
|
|
||||||
Costs of licensing and maintenance
|
$
|
303
|
|
|
$
|
282
|
|
|
$
|
284
|
|
Cost of professional services
|
353
|
|
|
354
|
|
|
357
|
|
|||
Amortization of capitalized software costs, including impairment of $55 for fiscal year 2013
|
282
|
|
|
317
|
|
|
223
|
|
|||
Selling and marketing
|
1,150
|
|
|
1,273
|
|
|
1,388
|
|
|||
General and administrative
|
395
|
|
|
405
|
|
|
462
|
|
|||
Product development and enhancements
|
587
|
|
|
489
|
|
|
509
|
|
|||
Depreciation and amortization of other intangible assets
|
144
|
|
|
158
|
|
|
176
|
|
|||
Other (gains) expenses, net
|
208
|
|
|
(5
|
)
|
|
15
|
|
|||
Total expenses before interest and income taxes
|
$
|
3,422
|
|
|
$
|
3,273
|
|
|
$
|
3,414
|
|
Income from continuing operations before interest and income taxes
|
$
|
1,093
|
|
|
$
|
1,337
|
|
|
$
|
1,365
|
|
Interest expense, net
|
54
|
|
|
44
|
|
|
35
|
|
|||
Income from continuing operations before income taxes
|
$
|
1,039
|
|
|
$
|
1,293
|
|
|
$
|
1,330
|
|
Income tax expense
|
140
|
|
|
354
|
|
|
407
|
|
|||
Income from continuing operations
|
$
|
899
|
|
|
$
|
939
|
|
|
$
|
923
|
|
Income from discontinued operations, net of income taxes
|
15
|
|
|
16
|
|
|
28
|
|
|||
Net income
|
$
|
914
|
|
|
$
|
955
|
|
|
$
|
951
|
|
Basic income per common share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
2.00
|
|
|
$
|
2.03
|
|
|
$
|
1.88
|
|
Income from discontinued operations
|
0.03
|
|
|
0.04
|
|
|
0.06
|
|
|||
Net income
|
$
|
2.03
|
|
|
$
|
2.07
|
|
|
$
|
1.94
|
|
Basic weighted average shares used in computation
|
446
|
|
|
456
|
|
|
486
|
|
|||
Diluted income per common share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
1.99
|
|
|
$
|
2.03
|
|
|
$
|
1.87
|
|
Income from discontinued operations
|
0.03
|
|
|
0.04
|
|
|
0.06
|
|
|||
Net income
|
$
|
2.02
|
|
|
$
|
2.07
|
|
|
$
|
1.93
|
|
Diluted weighted average shares used in computation
|
448
|
|
|
457
|
|
|
487
|
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
914
|
|
|
$
|
955
|
|
|
$
|
951
|
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(16
|
)
|
|
(47
|
)
|
|
(43
|
)
|
|||
Total other comprehensive loss
|
$
|
(16
|
)
|
|
$
|
(47
|
)
|
|
$
|
(43
|
)
|
Comprehensive income
|
$
|
898
|
|
|
$
|
908
|
|
|
$
|
908
|
|
(in millions, except per share amounts)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Total Stockholders' Equity
|
||||||||||||
Balance at March 31, 2011
|
|
$
|
59
|
|
|
$
|
3,615
|
|
|
$
|
4,106
|
|
|
$
|
(65
|
)
|
|
$
|
(2,095
|
)
|
|
$
|
5,620
|
|
Net income
|
|
|
|
|
|
951
|
|
|
|
|
|
|
951
|
|
||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(43
|
)
|
|
|
|
(43
|
)
|
||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
908
|
|
|||||||||||
Share-based compensation
|
|
|
|
89
|
|
|
|
|
|
|
|
|
89
|
|
||||||||||
Dividends declared
|
|
|
|
|
|
(192
|
)
|
|
|
|
|
|
(192
|
)
|
||||||||||
Release of restricted stock, exercise of common stock options and other items
|
|
|
|
(88
|
)
|
|
|
|
|
|
110
|
|
|
22
|
|
|||||||||
Accelerated share repurchase
|
|
|
|
(125
|
)
|
|
|
|
|
|
(375
|
)
|
|
(500
|
)
|
|||||||||
Treasury stock purchased
|
|
|
|
|
|
|
|
|
|
(550
|
)
|
|
(550
|
)
|
||||||||||
Balance at March 31, 2012
|
|
$
|
59
|
|
|
$
|
3,491
|
|
|
$
|
4,865
|
|
|
$
|
(108
|
)
|
|
$
|
(2,910
|
)
|
|
$
|
5,397
|
|
Net income
|
|
|
|
|
|
955
|
|
|
|
|
|
|
955
|
|
||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(47
|
)
|
|
|
|
(47
|
)
|
||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
908
|
|
|||||||||||
Share-based compensation
|
|
|
|
78
|
|
|
|
|
|
|
|
|
78
|
|
||||||||||
Dividends declared
|
|
|
|
|
|
(463
|
)
|
|
|
|
|
|
(463
|
)
|
||||||||||
Release of restricted stock, exercise of common stock options, ESPP and other items
|
|
|
|
(101
|
)
|
|
|
|
|
|
126
|
|
|
25
|
|
|||||||||
Accelerated share repurchase
|
|
|
|
125
|
|
|
|
|
|
|
(125
|
)
|
|
—
|
|
|||||||||
Treasury stock purchased
|
|
|
|
|
|
|
|
|
|
(495
|
)
|
|
(495
|
)
|
||||||||||
Balance at March 31, 2013
|
|
$
|
59
|
|
|
$
|
3,593
|
|
|
$
|
5,357
|
|
|
$
|
(155
|
)
|
|
$
|
(3,404
|
)
|
|
$
|
5,450
|
|
Net income
|
|
|
|
|
|
914
|
|
|
|
|
|
|
914
|
|
||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(16
|
)
|
|
|
|
(16
|
)
|
||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
898
|
|
|||||||||||
Share-based compensation
|
|
|
|
82
|
|
|
|
|
|
|
|
|
82
|
|
||||||||||
Dividends declared
|
|
|
|
|
|
(453
|
)
|
|
|
|
|
|
(453
|
)
|
||||||||||
Release of restricted stock, exercise of common stock options, ESPP and other items
|
|
|
|
(65
|
)
|
|
|
|
|
|
163
|
|
|
98
|
|
|||||||||
Treasury stock purchased
|
|
|
|
|
|
|
|
|
|
(505
|
)
|
|
(505
|
)
|
||||||||||
Balance at March 31, 2014
|
|
$
|
59
|
|
|
$
|
3,610
|
|
|
$
|
5,818
|
|
|
$
|
(171
|
)
|
|
$
|
(3,746
|
)
|
|
$
|
5,570
|
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Operating activities from continuing operations:
|
|
|
|
|
|
||||||
Net income
|
$
|
914
|
|
|
$
|
955
|
|
|
$
|
951
|
|
Income from discontinued operations
|
(15
|
)
|
|
(16
|
)
|
|
(28
|
)
|
|||
Income from continuing operations
|
$
|
899
|
|
|
$
|
939
|
|
|
$
|
923
|
|
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
426
|
|
|
475
|
|
|
399
|
|
|||
Deferred income taxes
|
(69
|
)
|
|
13
|
|
|
(16
|
)
|
|||
Provision for bad debts
|
7
|
|
|
7
|
|
|
(1
|
)
|
|||
Share-based compensation expense
|
82
|
|
|
78
|
|
|
89
|
|
|||
Asset impairments and other non-cash items
|
10
|
|
|
12
|
|
|
20
|
|
|||
Foreign currency transaction losses
|
10
|
|
|
16
|
|
|
8
|
|
|||
Changes in other operating assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
||||||
Decrease (increase) in trade accounts receivable
|
42
|
|
|
35
|
|
|
(45
|
)
|
|||
(Decrease) increase in deferred revenue
|
(103
|
)
|
|
(128
|
)
|
|
97
|
|
|||
Decrease in taxes payable, net
|
(331
|
)
|
|
(56
|
)
|
|
(46
|
)
|
|||
Increase in accounts payable, accrued expenses and other
|
82
|
|
|
6
|
|
|
6
|
|
|||
(Decrease) increase in accrued salaries, wages and commissions
|
(28
|
)
|
|
(42
|
)
|
|
58
|
|
|||
Changes in other operating assets and liabilities
|
(30
|
)
|
|
35
|
|
|
(4
|
)
|
|||
Net cash provided by operating activities - continuing operations
|
$
|
997
|
|
|
$
|
1,390
|
|
|
$
|
1,488
|
|
Investing activities from continuing operations:
|
|
|
|
|
|
||||||
Acquisitions of businesses, net of cash acquired, and purchased software
|
$
|
(133
|
)
|
|
$
|
(76
|
)
|
|
$
|
(387
|
)
|
Purchases of property and equipment
|
(65
|
)
|
|
(50
|
)
|
|
(72
|
)
|
|||
Proceeds from sale of assets
|
12
|
|
|
—
|
|
|
7
|
|
|||
Capitalized software development costs
|
(40
|
)
|
|
(165
|
)
|
|
(180
|
)
|
|||
Purchases of investments
|
(9
|
)
|
|
(346
|
)
|
|
(108
|
)
|
|||
Proceeds from sale of investments
|
—
|
|
|
—
|
|
|
207
|
|
|||
Maturities of investments
|
191
|
|
|
163
|
|
|
80
|
|
|||
Decrease in restricted cash
|
50
|
|
|
—
|
|
|
—
|
|
|||
Other investing activities
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|||
Net cash provided by (used in) investing activities - continuing operations
|
$
|
5
|
|
|
$
|
(473
|
)
|
|
$
|
(455
|
)
|
Financing activities from continuing operations:
|
|
|
|
|
|
||||||
Dividends paid
|
$
|
(453
|
)
|
|
$
|
(463
|
)
|
|
$
|
(192
|
)
|
Purchases of common stock, including accelerated share repurchase
|
(507
|
)
|
|
(493
|
)
|
|
(1,053
|
)
|
|||
Notional pooling borrowings
|
3,702
|
|
|
1,143
|
|
|
476
|
|
|||
Notional pooling repayments
|
(3,734
|
)
|
|
(1,139
|
)
|
|
(331
|
)
|
|||
Debt borrowings
|
498
|
|
|
—
|
|
|
—
|
|
|||
Debt repayments
|
(15
|
)
|
|
(13
|
)
|
|
(268
|
)
|
|||
Debt issuance costs
|
(5
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Exercise of common stock options and other
|
93
|
|
|
27
|
|
|
40
|
|
|||
Net cash used in financing activities - continuing operations
|
$
|
(421
|
)
|
|
$
|
(938
|
)
|
|
$
|
(1,330
|
)
|
Effect of exchange rate changes on cash
|
$
|
62
|
|
|
$
|
(83
|
)
|
|
$
|
(67
|
)
|
Net change in cash and cash equivalents - continuing operations
|
$
|
643
|
|
|
$
|
(104
|
)
|
|
$
|
(364
|
)
|
Cash provided by (used in) operating activities - discontinued operations
|
$
|
16
|
|
|
$
|
18
|
|
|
$
|
(10
|
)
|
Cash provided by investing activities - discontinued operations
|
—
|
|
|
—
|
|
|
4
|
|
|||
Net effect of discontinued operations on cash and cash equivalents
|
$
|
16
|
|
|
$
|
18
|
|
|
$
|
(6
|
)
|
Increase (decrease) in cash and cash equivalents
|
$
|
659
|
|
|
$
|
(86
|
)
|
|
$
|
(370
|
)
|
Cash and cash equivalents at beginning of period
|
$
|
2,593
|
|
|
$
|
2,679
|
|
|
$
|
3,049
|
|
Cash and cash equivalents at end of period
|
$
|
3,252
|
|
|
$
|
2,593
|
|
|
$
|
2,679
|
|
•
|
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, 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.
|
(dollars in millions)
|
Layer 7
|
|
Estimated
Useful Life
|
|||
Finite-lived intangible assets
(1)
|
$
|
26
|
|
|
3 years
|
|
Purchased software
|
87
|
|
|
5 years
|
|
|
Goodwill
|
55
|
|
|
Indefinite
|
|
|
Deferred tax liabilities
|
(13
|
)
|
|
—
|
|
|
Other assets net of other liabilities assumed
(2)
|
—
|
|
|
—
|
|
|
Purchase price
|
$
|
155
|
|
|
|
(1)
|
Includes customer relationships and trade names.
|
(2)
|
Includes approximately
$9 million
of cash acquired.
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Subscription and maintenance
|
$
|
24
|
|
|
$
|
25
|
|
|
$
|
27
|
|
Software fees and other
|
8
|
|
|
8
|
|
|
8
|
|
|||
Total revenue
|
$
|
32
|
|
|
$
|
33
|
|
|
$
|
35
|
|
Income from operations of discontinued components, net of tax expense of $8 million, $9 million and $9 million, respectively
|
$
|
15
|
|
|
$
|
16
|
|
|
$
|
15
|
|
|
Year Ended March 31,
|
||
(in millions)
|
2012
|
||
Subscription and maintenance
|
$
|
15
|
|
Total revenue
|
$
|
15
|
|
Loss from operations of discontinued component, net of tax benefit of $6 million
|
$
|
(10
|
)
|
Gain on disposal of discontinued component, net of income taxes
|
23
|
|
|
Income from discontinued operations, net of income taxes
|
$
|
13
|
|
(in millions)
|
Accrued Balance at March 31, 2013
|
|
Expense
|
|
Change in
Estimate
|
|
|
Payments
|
|
Accretion
and Other
|
|
|
Accrued Balance at March 31, 2014
|
||||||||||
Severance charges
|
$
|
16
|
|
|
$
|
160
|
|
|
$
|
(12
|
)
|
|
$
|
(113
|
)
|
|
$
|
4
|
|
|
$
|
55
|
|
Facility exit charges
|
23
|
|
|
22
|
|
|
—
|
|
|
(13
|
)
|
|
(3
|
)
|
|
29
|
|
||||||
Total accrued liabilities
|
$
|
39
|
|
|
|
|
|
|
|
|
|
|
$
|
84
|
|
(in millions)
|
Accrued Balance at March 31, 2012
|
|
Expense
|
|
Change in
Estimate
|
|
|
Payments
|
|
Accretion
and Other
|
|
|
Accrued Balance at March 31, 2013
|
||||||||||
Severance charges
|
$
|
13
|
|
|
$
|
18
|
|
|
$
|
(6
|
)
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
16
|
|
Facility exit charges
|
40
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(4
|
)
|
|
23
|
|
||||||
Total accrued liabilities
|
$
|
53
|
|
|
|
|
|
|
|
|
|
|
$
|
39
|
|
(in millions)
|
Accrued Balance at March 31, 2011
|
|
Expense
|
|
Change in
Estimate
|
|
|
Payments
|
|
Accretion
and Other
|
|
|
Accrued Balance at March 31, 2012
|
||||||||||
Severance charges
|
$
|
8
|
|
|
$
|
49
|
|
|
$
|
(8
|
)
|
|
$
|
(36
|
)
|
|
$
|
—
|
|
|
$
|
13
|
|
Facility exit charges
|
47
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
4
|
|
|
40
|
|
||||||
Total accrued liabilities
|
$
|
55
|
|
|
|
|
|
|
|
|
|
|
$
|
53
|
|
|
At March 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Accounts receivable – billed
|
$
|
739
|
|
|
$
|
796
|
|
Accounts receivable – unbilled
|
61
|
|
|
63
|
|
||
Other receivables
|
19
|
|
|
21
|
|
||
Less: Allowances
|
(19
|
)
|
|
(24
|
)
|
||
Trade accounts receivable, net
|
$
|
800
|
|
|
$
|
856
|
|
|
At March 31.
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Land and buildings
|
$
|
222
|
|
|
$
|
210
|
|
Equipment, software developed for internal use, furniture and leasehold improvements
|
901
|
|
|
887
|
|
||
|
1,123
|
|
|
1,097
|
|
||
Accumulated depreciation and amortization
|
(828
|
)
|
|
(786
|
)
|
||
Property and equipment, net
|
$
|
295
|
|
|
$
|
311
|
|
|
At March 31, 2014
|
||||||||||||||||||
(in millions)
|
Gross
Amortizable
Assets
|
|
|
Less: Fully
Amortized
Assets
|
|
|
Remaining
Amortizable
Assets
|
|
|
Accumulated
Amortization
on Remaining
Amortizable
Assets
|
|
|
Net
Assets
|
|
|||||
Purchased software products
|
$
|
5,706
|
|
|
$
|
4,849
|
|
|
$
|
857
|
|
|
$
|
309
|
|
|
$
|
548
|
|
Internally developed software products
|
1,561
|
|
|
757
|
|
|
804
|
|
|
397
|
|
|
407
|
|
|||||
Other intangible assets
|
846
|
|
|
489
|
|
|
357
|
|
|
249
|
|
|
108
|
|
|||||
Total capitalized software and other intangible assets
|
$
|
8,113
|
|
|
$
|
6,095
|
|
|
$
|
2,018
|
|
|
$
|
955
|
|
|
$
|
1,063
|
|
|
At March 31, 2013
|
||||||||||||||||||
(in millions)
|
Gross
Amortizable
Assets
|
|
|
Less: Fully
Amortized
Assets
|
|
|
Remaining
Amortizable
Assets
|
|
|
Accumulated
Amortization
on Remaining
Amortizable
Assets
|
|
|
Net
Assets
|
|
|||||
Purchased software products
|
$
|
5,604
|
|
|
$
|
4,735
|
|
|
$
|
869
|
|
|
$
|
309
|
|
|
$
|
560
|
|
Internally developed software products
|
1,528
|
|
|
661
|
|
|
867
|
|
|
327
|
|
|
540
|
|
|||||
Other intangible assets
|
820
|
|
|
429
|
|
|
391
|
|
|
249
|
|
|
142
|
|
|||||
Total capitalized software and other intangible assets
|
$
|
7,952
|
|
|
$
|
5,825
|
|
|
$
|
2,127
|
|
|
$
|
885
|
|
|
$
|
1,242
|
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Depreciation
|
$
|
84
|
|
|
$
|
104
|
|
|
$
|
111
|
|
Amortization of purchased software products
|
117
|
|
|
163
|
|
|
103
|
|
|||
Amortization of internally developed software products
|
165
|
|
|
154
|
|
|
120
|
|
|||
Amortization of other intangible assets
|
60
|
|
|
54
|
|
|
65
|
|
|||
Total depreciation and amortization expense
|
$
|
426
|
|
|
$
|
475
|
|
|
$
|
399
|
|
|
Year Ended March 31,
|
||||||||||||||||||
(in millions)
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||
Purchased software products
|
$
|
113
|
|
|
$
|
111
|
|
|
$
|
108
|
|
|
$
|
105
|
|
|
$
|
62
|
|
Internally developed software products
|
150
|
|
|
118
|
|
|
85
|
|
|
40
|
|
|
11
|
|
|||||
Other intangible assets
|
53
|
|
|
34
|
|
|
11
|
|
|
5
|
|
|
1
|
|
|||||
Total
|
$
|
316
|
|
|
$
|
263
|
|
|
$
|
204
|
|
|
$
|
150
|
|
|
$
|
74
|
|
(in millions)
|
Mainframe Solutions
|
|
Enterprise Solutions
|
|
Services
|
|
Total
|
||||||||
Balance at March 31, 2012
|
$
|
4,179
|
|
|
$
|
1,596
|
|
|
$
|
81
|
|
|
$
|
5,856
|
|
Acquisitions
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Foreign currency translation adjustment
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Balance at March 31, 2013
|
$
|
4,178
|
|
|
$
|
1,605
|
|
|
$
|
81
|
|
|
$
|
5,864
|
|
Acquisitions
|
—
|
|
|
55
|
|
|
—
|
|
|
55
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Balance at March 31, 2014
|
$
|
4,178
|
|
|
$
|
1,663
|
|
|
$
|
81
|
|
|
$
|
5,922
|
|
|
At March 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Current:
|
|
|
|
||||
Subscription and maintenance
|
$
|
2,277
|
|
|
$
|
2,290
|
|
Professional services
|
149
|
|
|
154
|
|
||
Software fees and other
|
33
|
|
|
21
|
|
||
Total deferred revenue (billed or collected) – current
|
$
|
2,459
|
|
|
$
|
2,465
|
|
Noncurrent:
|
|
|
|
||||
Subscription and maintenance
|
$
|
863
|
|
|
$
|
934
|
|
Professional services
|
26
|
|
|
33
|
|
||
Software fees and other
|
1
|
|
|
2
|
|
||
Total deferred revenue (billed or collected) – noncurrent
|
$
|
890
|
|
|
$
|
969
|
|
Total deferred revenue (billed or collected)
|
$
|
3,349
|
|
|
$
|
3,434
|
|
|
At March 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Revolving credit facility due June 2018
|
$
|
—
|
|
|
$
|
—
|
|
5.375% Senior Notes due December 2019
|
750
|
|
|
750
|
|
||
6.125% Senior Notes due December 2014, net of unamortized premium from fair value hedge of $8 and $19
|
508
|
|
|
519
|
|
||
2.875% Senior Notes due August 2018
|
250
|
|
|
—
|
|
||
4.500% Senior Notes due August 2023
|
250
|
|
|
—
|
|
||
Other indebtedness, primarily capital leases
|
13
|
|
|
26
|
|
||
Unamortized discount for Senior Notes
|
(5
|
)
|
|
(5
|
)
|
||
Total debt outstanding
|
$
|
1,766
|
|
|
$
|
1,290
|
|
Less the current portion
|
(514
|
)
|
|
(16
|
)
|
||
Total long-term debt portion
|
$
|
1,252
|
|
|
$
|
1,274
|
|
|
Year Ended March 31,
|
||||||||||||||||||||||
(in millions)
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
||||||||||||
Amount due
|
$
|
514
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
246
|
|
|
$
|
999
|
|
|
At March 31,
|
||||
|
2014
|
|
2013
|
||
Applicable margin on Base Rate borrowing
|
0.125
|
%
|
|
0.250
|
%
|
Weighted average interest rate on outstanding borrowings
|
—
|
%
|
|
—
|
%
|
Applicable margin on Eurocurrency Rate borrowing
|
1.000
|
%
|
|
1.100
|
%
|
Facility commitment fee
|
0.125
|
%
|
|
0.150
|
%
|
|
At March 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Total borrowings outstanding at beginning of year
(1)
|
$
|
136
|
|
|
$
|
139
|
|
Borrowings
|
3,702
|
|
|
1,143
|
|
||
Repayments
|
(3,734
|
)
|
|
(1,139
|
)
|
||
Foreign currency exchange effect
|
35
|
|
|
(7
|
)
|
||
Total borrowings outstanding at end of year
(1)
|
$
|
139
|
|
|
$
|
136
|
|
(1)
|
Included in “Accrued expenses and other current liabilities” in the Company’s Consolidated Balance Sheets.
|
|
Amount of Net (Gain)/Loss Recognized in the
Consolidated Statements of Operations
|
||||||||||
Location of Amounts Recognized
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Interest expense, net – interest rate swaps designated as fair value hedges
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
Other (gains) expenses, net – foreign currency contracts
|
$
|
(20
|
)
|
|
$
|
11
|
|
|
$
|
(3
|
)
|
|
At March 31, 2014
|
|
At March 31, 2013
|
|
||||||||||||||||||||
|
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
|
$
|
1,277
|
|
|
$
|
—
|
|
|
$
|
1,277
|
|
(1)
|
$
|
1,280
|
|
|
$
|
—
|
|
|
$
|
1,280
|
|
(2)
|
Foreign exchange derivatives
(3)
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
||||||
Interest rate derivatives
(3)
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
19
|
|
|
19
|
|
|
||||||
Total assets
|
$
|
1,277
|
|
|
$
|
10
|
|
|
$
|
1,287
|
|
|
$
|
1,280
|
|
|
$
|
20
|
|
|
$
|
1,300
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange derivatives
(3)
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(1)
|
At
March 31, 2014
, the Company had approximately
$1,277 million
and
less than $1 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 Consolidated Balance Sheet.
|
(2)
|
At
March 31, 2013
, the Company had approximately
$1,230 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 Consolidated Balance Sheet.
|
(3)
|
See Note 9, “Derivatives” for additional information. Interest rate derivatives fair value excludes accrued interest.
|
|
At March 31, 2014
|
|
At March 31, 2013
|
||||||||||||
(in millions)
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Total debt
(1)
|
$
|
1,766
|
|
|
$
|
1,884
|
|
|
$
|
1,290
|
|
|
$
|
1,413
|
|
Facility exit reserve
(2)
|
$
|
30
|
|
|
$
|
33
|
|
|
$
|
23
|
|
|
$
|
27
|
|
(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 facility exit reserve is determined using the Company’s incremental borrowing rate at
March 31, 2014
and
2013
. At
March 31, 2014
and
2013
, the facility exit reserve included approximately
$12 million
and
$6 million
, respectively, in “Accrued expenses and other current liabilities” and approximately
$18 million
and
$17 million
, respectively, in “Other noncurrent liabilities” in the Company’s Consolidated Balance Sheets (Level 3).
|
Fiscal Year
|
(in millions)
|
||
2015
|
$
|
95
|
|
2016
|
82
|
|
|
2017
|
64
|
|
|
2018
|
54
|
|
|
2019
|
47
|
|
|
Thereafter
|
105
|
|
|
Total
|
$
|
447
|
|
Less income from sublease
|
(23
|
)
|
|
Net minimum operating lease payments
|
$
|
424
|
|
Declaration Date
|
|
Dividend Per Share
|
|
Record Date
|
|
Total Amount
|
|
Payment Date
|
||||
May 9, 2013
|
|
$
|
0.25
|
|
|
May 23, 2013
|
|
$
|
114
|
|
|
June 11, 2013
|
August 1, 2013
|
|
$
|
0.25
|
|
|
August 22, 2013
|
|
$
|
114
|
|
|
September 10, 2013
|
November 6, 2013
|
|
$
|
0.25
|
|
|
November 21, 2013
|
|
$
|
113
|
|
|
December 10, 2013
|
February 5, 2014
|
|
$
|
0.25
|
|
|
February 20, 2014
|
|
$
|
112
|
|
|
March 18, 2014
|
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
|
November 7, 2012
|
|
$
|
0.25
|
|
|
November 20, 2012
|
|
$
|
114
|
|
|
December 11, 2012
|
February 7, 2013
|
|
$
|
0.25
|
|
|
February 21, 2013
|
|
$
|
114
|
|
|
March 19, 2013
|
|
Year Ended March 31,
|
||||||||||
(in millions, except per share amounts)
|
2014
|
|
2013
|
|
2012
|
||||||
Basic income from continuing operations per common share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
899
|
|
|
$
|
939
|
|
|
$
|
923
|
|
Less: Income from continuing operations allocable to participating securities
|
(9
|
)
|
|
(12
|
)
|
|
(11
|
)
|
|||
Income from continuing operations allocable to common shares
|
$
|
890
|
|
|
$
|
927
|
|
|
$
|
912
|
|
Weighted average common shares outstanding
|
446
|
|
|
456
|
|
|
486
|
|
|||
Basic income from continuing operations per common share
|
$
|
2.00
|
|
|
$
|
2.03
|
|
|
$
|
1.88
|
|
Diluted income from continuing operations per common share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
899
|
|
|
$
|
939
|
|
|
$
|
923
|
|
Less: Income from continuing operations allocable to participating securities
|
(9
|
)
|
|
(12
|
)
|
|
(11
|
)
|
|||
Income from continuing operations allocable to common shares
|
$
|
890
|
|
|
$
|
927
|
|
|
$
|
912
|
|
Weighted average shares outstanding and common share equivalents:
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
446
|
|
|
456
|
|
|
486
|
|
|||
Weighted average effect of share-based payment awards
|
2
|
|
|
1
|
|
|
1
|
|
|||
Denominator in calculation of diluted income per share
|
448
|
|
|
457
|
|
|
487
|
|
|||
Diluted income from continuing operations per common share
|
$
|
1.99
|
|
|
$
|
2.03
|
|
|
$
|
1.87
|
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Costs of licensing and maintenance
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Cost of professional services
|
4
|
|
|
4
|
|
|
4
|
|
|||
Selling and marketing
|
29
|
|
|
31
|
|
|
36
|
|
|||
General and administrative
|
26
|
|
|
23
|
|
|
27
|
|
|||
Product development and enhancements
|
19
|
|
|
17
|
|
|
19
|
|
|||
Share-based compensation expense before tax
|
$
|
82
|
|
|
$
|
78
|
|
|
$
|
89
|
|
Income tax benefit
|
(26
|
)
|
|
(25
|
)
|
|
(29
|
)
|
|||
Net share-based compensation expense
|
$
|
56
|
|
|
$
|
53
|
|
|
$
|
60
|
|
|
Unrecognized Share-Based Compensation Costs
|
|
Weighted Average Period Expected to be Recognized
|
||
|
(in millions)
|
|
(in years)
|
||
Stock option awards
|
$
|
8
|
|
|
2.0
|
Restricted stock units
|
17
|
|
|
1.9
|
|
Restricted stock awards
|
51
|
|
|
1.8
|
|
Performance share units
|
16
|
|
|
2.3
|
|
Total unrecognized share-based compensation costs
|
$
|
92
|
|
|
1.9
|
|
Number of Shares
(in millions)
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Life
(in years)
|
|
Aggregate Intrinsic Value
(1)
(in millions)
|
|||||
Vested
|
0.7
|
|
|
$
|
26.07
|
|
|
4.0
|
|
$
|
3.7
|
|
Expected to vest
(2)
|
2.7
|
|
|
26.06
|
|
|
7.4
|
|
13.2
|
|
||
Total
|
3.4
|
|
|
$
|
26.06
|
|
|
6.7
|
|
$
|
16.9
|
|
(1)
|
These amounts represent the difference between the exercise price and
$30.98
, the closing price of the Company’s common stock on
March 31, 2014
, the last trading day of the Company’s fiscal year as reported on the NASDAQ Stock Market for all in-the-money options.
|
(2)
|
Outstanding options expected to vest are net of estimated future forfeitures.
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|||
|
(in millions)
|
|
||||
Outstanding at March 31, 2011
|
8.0
|
|
|
$
|
23.03
|
|
Granted
|
0.6
|
|
|
21.89
|
|
|
Exercised
|
(1.8
|
)
|
|
20.79
|
|
|
Expired or terminated
|
(1.0
|
)
|
|
23.46
|
|
|
Outstanding at March 31, 2012
|
5.8
|
|
|
$
|
23.52
|
|
Granted
|
1.8
|
|
|
24.39
|
|
|
Exercised
|
(1.2
|
)
|
|
17.17
|
|
|
Expired or terminated
|
(0.4
|
)
|
|
22.09
|
|
|
Outstanding at March 31, 2013
|
6.0
|
|
|
$
|
25.17
|
|
Granted
|
1.7
|
|
|
27.86
|
|
|
Exercised
|
(3.5
|
)
|
|
25.06
|
|
|
Expired or terminated
|
(0.5
|
)
|
|
25.95
|
|
|
Outstanding at March 31, 2014
|
3.7
|
|
|
$
|
26.13
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||||||||||
Range of Exercise Prices
|
Shares
|
|
Aggregate Intrinsic Value
|
|
Weighted Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
|
Shares
|
|
Aggregate Intrinsic Value
|
|
Weighted Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
||||||||||
(in millions)
|
|
(in millions)
|
|
(in years)
|
|
|
(in millions)
|
|
(in millions)
|
|
(in years)
|
|
|||||||||||||
$13.18 — $20.00
|
—
|
|
|
$
|
0.1
|
|
|
1.6
|
|
$
|
16.77
|
|
|
—
|
|
|
$
|
0.1
|
|
|
0.2
|
|
$
|
15.10
|
|
$20.01 — $25.00
|
1.2
|
|
|
9.3
|
|
|
6.5
|
|
23.38
|
|
|
0.3
|
|
|
2.6
|
|
|
7.2
|
|
23.15
|
|
||||
$25.01 — $30.00
|
2.0
|
|
|
8.2
|
|
|
6.7
|
|
26.69
|
|
|
0.3
|
|
|
1.0
|
|
|
1.5
|
|
27.61
|
|
||||
$30.01 — over
|
0.5
|
|
|
0.4
|
|
|
8.1
|
|
30.56
|
|
|
0.1
|
|
|
—
|
|
|
1.0
|
|
32.80
|
|
||||
|
3.7
|
|
|
$
|
18.0
|
|
|
6.8
|
|
$
|
26.13
|
|
|
0.7
|
|
|
$
|
3.7
|
|
|
4.0
|
|
$
|
26.07
|
|
|
Year Ended March 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Weighted average fair value
|
$
|
5.20
|
|
|
$
|
4.26
|
|
|
$
|
5.99
|
|
Dividend yield
|
4.05
|
%
|
|
4.06
|
%
|
|
0.91
|
%
|
|||
Expected volatility factor
(1)
|
30
|
%
|
|
31
|
%
|
|
33
|
%
|
|||
Risk-free interest rate
(2)
|
1.5
|
%
|
|
1.0
|
%
|
|
1.7
|
%
|
|||
Expected life (in years)
(3)
|
6.0
|
|
|
4.9
|
|
|
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 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).
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Cash received from options exercised
|
$
|
88
|
|
|
$
|
21
|
|
|
$
|
37
|
|
Intrinsic value of options exercised
|
$
|
19
|
|
|
$
|
10
|
|
|
$
|
9
|
|
|
RSAs
|
|
RSUs
|
||||||||||
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
||||||
|
(in millions)
|
|
|
(in millions)
|
|
||||||||
Outstanding at March 31, 2011
|
5.8
|
|
|
$
|
20.56
|
|
|
1.0
|
|
|
$
|
20.03
|
|
Granted
|
3.8
|
|
|
24.54
|
|
|
0.7
|
|
|
24.06
|
|
||
Released
|
(3.0
|
)
|
|
21.57
|
|
|
(0.3
|
)
|
|
20.70
|
|
||
Forfeitures
|
(0.9
|
)
|
|
22.33
|
|
|
(0.2
|
)
|
|
21.61
|
|
||
Outstanding at March 31, 2012
|
5.7
|
|
|
$
|
22.41
|
|
|
1.2
|
|
|
$
|
21.91
|
|
Granted
|
3.5
|
|
|
26.21
|
|
|
0.9
|
|
|
23.72
|
|
||
Released
|
(3.6
|
)
|
|
22.22
|
|
|
(0.6
|
)
|
|
21.03
|
|
||
Forfeitures
|
(0.6
|
)
|
|
24.69
|
|
|
(0.1
|
)
|
|
23.38
|
|
||
Outstanding at March 31, 2013
|
5.0
|
|
|
$
|
24.98
|
|
|
1.4
|
|
|
$
|
23.28
|
|
Granted
|
2.7
|
|
|
27.06
|
|
|
0.7
|
|
|
25.45
|
|
||
Released
|
(2.6
|
)
|
|
24.49
|
|
|
(0.6
|
)
|
|
23.01
|
|
||
Forfeitures
|
(0.8
|
)
|
|
26.14
|
|
|
(0.1
|
)
|
|
24.41
|
|
||
Outstanding at March 31, 2014
|
4.3
|
|
|
$
|
26.38
|
|
|
1.4
|
|
|
$
|
24.47
|
|
|
|
|
RSAs
|
|
RSUs
|
||||||||||
Incentive Plans for Fiscal Years
|
Performance Period
|
|
Shares
(in millions)
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
(in millions)
|
|
Weighted Average Grant Date Fair Value
|
||||||
2013
|
1 year
|
|
0.4
|
|
|
$
|
27.11
|
|
|
0.1
|
|
|
$
|
26.12
|
|
2012
|
1 year
|
|
1.2
|
|
|
$
|
26.39
|
|
|
0.2
|
|
|
$
|
25.40
|
|
2011
|
1 year
|
|
1.1
|
|
|
$
|
24.68
|
|
|
0.1
|
|
|
$
|
24.48
|
|
Incentive Plans for Fiscal Years
|
Performance Period
|
|
Unrestricted Shares
(in millions)
|
|
Weighted Average Grant Date Fair Value
|
|||
2010
|
3 years
|
|
0.2
|
|
|
$
|
26.39
|
|
2009
|
3 years
|
|
0.2
|
|
|
$
|
24.68
|
|
|
|
|
RSAs
|
|
RSUs
|
||||||||||
Incentive Plans for Fiscal Years
|
Performance Period
|
|
Shares
(in millions)
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
(in millions)
|
|
Weighted Average Grant Date Fair Value
|
||||||
2013
|
1 year
|
|
0.2
|
|
|
$
|
27.11
|
|
|
0.1
|
|
|
$
|
24.13
|
|
2012
|
1 year
|
|
0.2
|
|
|
$
|
26.39
|
|
|
0.1
|
|
|
$
|
23.41
|
|
2011
|
1 year
|
|
0.3
|
|
|
$
|
24.68
|
|
|
0.1
|
|
|
$
|
24.09
|
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Domestic
|
$
|
699
|
|
|
$
|
903
|
|
|
$
|
809
|
|
Foreign
|
340
|
|
|
390
|
|
|
521
|
|
|||
Income from continuing operations before income taxes
|
$
|
1,039
|
|
|
$
|
1,293
|
|
|
$
|
1,330
|
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
190
|
|
|
$
|
271
|
|
|
$
|
267
|
|
State
|
33
|
|
|
39
|
|
|
37
|
|
|||
Foreign
|
(14
|
)
|
|
31
|
|
|
119
|
|
|||
Total current
|
$
|
209
|
|
|
$
|
341
|
|
|
$
|
423
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
(82
|
)
|
|
$
|
(18
|
)
|
|
$
|
4
|
|
State
|
(12
|
)
|
|
3
|
|
|
(22
|
)
|
|||
Foreign
|
25
|
|
|
28
|
|
|
2
|
|
|||
Total deferred
|
$
|
(69
|
)
|
|
$
|
13
|
|
|
$
|
(16
|
)
|
Total:
|
|
|
|
|
|
||||||
Federal
|
$
|
108
|
|
|
$
|
253
|
|
|
$
|
271
|
|
State
|
21
|
|
|
42
|
|
|
15
|
|
|||
Foreign
|
11
|
|
|
59
|
|
|
121
|
|
|||
Total income tax expense from continuing operations
|
$
|
140
|
|
|
$
|
354
|
|
|
$
|
407
|
|
|
Year Ended March 31,
|
||||||||||
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Tax expense at U.S. federal statutory tax rate
|
$
|
364
|
|
|
$
|
452
|
|
|
$
|
465
|
|
Effect of international operations
|
(144
|
)
|
|
(128
|
)
|
|
(89
|
)
|
|||
U.S. federal and state tax contingencies
|
(123
|
)
|
|
(8
|
)
|
|
23
|
|
|||
Domestic manufacturing deduction
|
(24
|
)
|
|
(21
|
)
|
|
(19
|
)
|
|||
State taxes, net of U.S. federal tax benefit
|
19
|
|
|
23
|
|
|
17
|
|
|||
Valuation allowance
|
23
|
|
|
11
|
|
|
(15
|
)
|
|||
Other, net
|
25
|
|
|
25
|
|
|
25
|
|
|||
Income tax expense from continuing operations
|
$
|
140
|
|
|
$
|
354
|
|
|
$
|
407
|
|
|
At March 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Deferred tax assets:
|
|
|
|
||||
Modified accrual basis accounting for revenue
|
$
|
373
|
|
|
$
|
379
|
|
Share-based compensation
|
30
|
|
|
38
|
|
||
Accrued expenses
|
36
|
|
|
42
|
|
||
Net operating losses
|
131
|
|
|
158
|
|
||
Intangible assets amortizable for tax purposes
|
4
|
|
|
7
|
|
||
Deductible state tax and interest benefits
|
20
|
|
|
51
|
|
||
Other
|
65
|
|
|
55
|
|
||
Total deferred tax assets
|
$
|
659
|
|
|
$
|
730
|
|
Valuation allowances
|
(87
|
)
|
|
(83
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
$
|
572
|
|
|
$
|
647
|
|
Deferred tax liabilities:
|
|
|
|
||||
Purchased software
|
$
|
76
|
|
|
$
|
95
|
|
Depreciation
|
6
|
|
|
13
|
|
||
Other intangible assets
|
34
|
|
|
43
|
|
||
Capitalized development costs
|
158
|
|
|
209
|
|
||
Total deferred tax liabilities
|
$
|
274
|
|
|
$
|
360
|
|
Net deferred tax asset
|
$
|
298
|
|
|
$
|
287
|
|
|
At March 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Balance at beginning of year
|
$
|
382
|
|
|
$
|
523
|
|
Additions for tax positions related to the current year
|
20
|
|
|
30
|
|
||
Additions for tax positions from prior years
|
70
|
|
|
60
|
|
||
Reductions for tax positions from prior years
|
(233
|
)
|
|
(158
|
)
|
||
Settlement payments
|
(61
|
)
|
|
(55
|
)
|
||
Statute of limitations expiration
|
(11
|
)
|
|
(15
|
)
|
||
Translation and other
|
3
|
|
|
(3
|
)
|
||
Balance at end of year
|
$
|
170
|
|
|
$
|
382
|
|
•
|
United States — federal tax years are open for years 2011 and forward;
|
•
|
Brazil — tax years are open for years 2008 and forward;
|
•
|
Canada — tax years are open for years 2009 and forward; and
|
•
|
Italy — tax years are open for years 2008 and forward.
|
Year Ended March 31, 2014
|
|
Mainframe
Solutions
|
|
|
Enterprise
Solutions
|
|
|
Services
|
|
Total
|
||||||
(dollars in millions)
|
||||||||||||||||
Revenue
|
|
$
|
2,478
|
|
|
$
|
1,658
|
|
|
$
|
379
|
|
|
$
|
4,515
|
|
Expenses
|
|
987
|
|
|
1,514
|
|
|
357
|
|
|
2,858
|
|
||||
Segment profit
|
|
$
|
1,491
|
|
|
$
|
144
|
|
|
$
|
22
|
|
|
$
|
1,657
|
|
Segment operating margin
|
|
60
|
%
|
|
9
|
%
|
|
6
|
%
|
|
37
|
%
|
||||
Depreciation
|
|
$
|
50
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
84
|
|
Segment profit
|
$
|
1,657
|
|
Less:
|
|
||
Purchased software amortization
|
117
|
|
|
Other intangibles amortization
|
60
|
|
|
Software development costs capitalized
|
(33
|
)
|
|
Internally developed software products amortization
|
165
|
|
|
Share-based compensation expense
|
82
|
|
|
Other (gains) expenses, net
(1)
|
173
|
|
|
Interest expense, net
|
54
|
|
|
Income from continuing operations before income taxes
|
$
|
1,039
|
|
(1)
|
Other (gains) expenses, net consists of approximately
$171 million
of costs associated with the Fiscal 2014 Plan and other miscellaneous costs.
|
Year Ended March 31, 2013
|
|
Mainframe
Solutions
|
|
|
Enterprise
Solutions
|
|
|
Services
|
|
Total
|
||||||
(dollars in millions)
|
||||||||||||||||
Revenue
|
|
$
|
2,489
|
|
|
$
|
1,739
|
|
|
$
|
382
|
|
|
$
|
4,610
|
|
Expenses
|
|
1,028
|
|
|
1,599
|
|
|
358
|
|
|
2,985
|
|
||||
Segment profit
|
|
$
|
1,461
|
|
|
$
|
140
|
|
|
$
|
24
|
|
|
$
|
1,625
|
|
Segment operating margin
|
|
59
|
%
|
|
8
|
%
|
|
6
|
%
|
|
35
|
%
|
||||
Depreciation
|
|
$
|
61
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
104
|
|
Segment profit
|
$
|
1,625
|
|
Less:
|
|
||
Purchased software amortization
(1)
|
163
|
|
|
Other intangibles amortization
|
54
|
|
|
Software development costs capitalized
|
(161
|
)
|
|
Internally developed software products amortization
|
154
|
|
|
Share-based compensation expense
|
78
|
|
|
Other (gains) expenses, net
|
—
|
|
|
Interest expense, net
|
44
|
|
|
Income from continuing operations before income taxes
|
$
|
1,293
|
|
(1)
|
Amount includes impairment recorded in the fourth quarter of fiscal year 2013 of approximately
$55 million
relating to purchased software (see Note 6, “Long Lived Assets,” in the Notes to the Consolidated Financial Statements for additional information).
|
Year Ended March 31, 2012
|
|
Mainframe
Solutions
|
|
|
Enterprise
Solutions
|
|
|
Services
|
|
Total
|
||||||
(dollars in millions)
|
||||||||||||||||
Revenue
|
|
$
|
2,612
|
|
|
$
|
1,785
|
|
|
$
|
382
|
|
|
$
|
4,779
|
|
Expenses
|
|
1,157
|
|
|
1,691
|
|
|
359
|
|
|
3,207
|
|
||||
Segment profit
|
|
$
|
1,455
|
|
|
$
|
94
|
|
|
$
|
23
|
|
|
$
|
1,572
|
|
Segment operating margin
|
|
56
|
%
|
|
5
|
%
|
|
6
|
%
|
|
33
|
%
|
||||
Depreciation
|
|
$
|
67
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
111
|
|
Segment profit
|
$
|
1,572
|
|
Less:
|
|
||
Purchased software amortization
|
103
|
|
|
Other intangibles amortization
|
65
|
|
|
Software development costs capitalized
|
(171
|
)
|
|
Internally developed software products amortization
|
120
|
|
|
Share-based compensation expense
|
89
|
|
|
Other (gains) expenses, net
(1)
|
1
|
|
|
Interest expense, net
|
35
|
|
|
Income from continuing operations before income taxes
|
$
|
1,330
|
|
(1)
|
Other (gains) expenses, net includes miscellaneous costs.
|
(in millions)
|
United States
|
|
EMEA
(1)
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
Year Ended March 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
From unaffiliated customers
|
$
|
2,677
|
|
|
$
|
1,093
|
|
|
$
|
745
|
|
|
$
|
—
|
|
|
$
|
4,515
|
|
Between geographic areas
(2)
|
446
|
|
|
—
|
|
|
—
|
|
|
(446
|
)
|
|
—
|
|
|||||
Total revenue
|
$
|
3,123
|
|
|
$
|
1,093
|
|
|
$
|
745
|
|
|
$
|
(446
|
)
|
|
$
|
4,515
|
|
Property and equipment, net
|
$
|
125
|
|
|
$
|
116
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
295
|
|
Total assets
|
$
|
8,908
|
|
|
$
|
2,076
|
|
|
$
|
1,032
|
|
|
$
|
—
|
|
|
$
|
12,016
|
|
Total liabilities
|
$
|
4,919
|
|
|
$
|
890
|
|
|
$
|
637
|
|
|
$
|
—
|
|
|
$
|
6,446
|
|
Year Ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
From unaffiliated customers
|
$
|
2,716
|
|
|
$
|
1,104
|
|
|
$
|
790
|
|
|
$
|
—
|
|
|
$
|
4,610
|
|
Between geographic areas
(2)
|
460
|
|
|
—
|
|
|
—
|
|
|
(460
|
)
|
|
—
|
|
|||||
Total revenue
|
$
|
3,176
|
|
|
$
|
1,104
|
|
|
$
|
790
|
|
|
$
|
(460
|
)
|
|
$
|
4,610
|
|
Property and equipment, net
|
$
|
138
|
|
|
$
|
108
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
311
|
|
Total assets
|
$
|
8,897
|
|
|
$
|
1,911
|
|
|
$
|
1,007
|
|
|
$
|
—
|
|
|
$
|
11,815
|
|
Total liabilities
|
$
|
4,802
|
|
|
$
|
939
|
|
|
$
|
624
|
|
|
$
|
—
|
|
|
$
|
6,365
|
|
Year Ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
From unaffiliated customers
|
$
|
2,779
|
|
|
$
|
1,182
|
|
|
$
|
818
|
|
|
$
|
—
|
|
|
$
|
4,779
|
|
Between geographic areas
(2)
|
472
|
|
|
—
|
|
|
—
|
|
|
(472
|
)
|
|
—
|
|
|||||
Total revenue
|
$
|
3,251
|
|
|
$
|
1,182
|
|
|
$
|
818
|
|
|
$
|
(472
|
)
|
|
$
|
4,779
|
|
Property and equipment, net
|
$
|
181
|
|
|
$
|
121
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
386
|
|
Total assets
|
$
|
9,078
|
|
|
$
|
1,904
|
|
|
$
|
1,015
|
|
|
$
|
—
|
|
|
$
|
11,997
|
|
Total liabilities
|
$
|
4,911
|
|
|
$
|
1,009
|
|
|
$
|
680
|
|
|
$
|
—
|
|
|
$
|
6,600
|
|
(1)
|
Consists of Europe, the Middle East and Africa.
|
(2)
|
Represents royalties from foreign subsidiaries determined as a percentage of certain amounts invoiced to customer.
|
Description
|
|
Balance at Beginning of Period
|
|
Additions/(Deductions) Charged/(Credited) to Costs and Expenses
|
|
Deductions
(1)
|
|
Balance at End of Period
|
||||||||
Allowance for doubtful accounts
(in millions)
|
|
|
|
|
|
|
|
|
||||||||
Year ended March 31, 2014
|
|
$
|
24
|
|
|
$
|
4
|
|
|
$
|
(9
|
)
|
|
$
|
19
|
|
Year ended March 31, 2013
|
|
$
|
16
|
|
|
$
|
9
|
|
|
$
|
(1
|
)
|
|
$
|
24
|
|
Year ended March 31, 2012
|
|
$
|
22
|
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
$
|
16
|
|
(1)
|
Write-off of amounts against allowance provided
|
a.
|
To the extent I deemed appropriate, I took advantage of this period to consider this Agreement before signing it;
|
e.
|
To the extent I decide to sign and return this Agreement to the Company prior to the 21 days that I have been provided to consider it, I acknowledge that I have done so voluntarily;
|
f.
|
In the event the Company makes changes to the offer contained in this Agreement, whether material or immaterial, I understand that any such changes will not restart the 21 day consideration period provided for in Paragraph 1 above;
|
g.
|
The Company advised me to discuss this Agreement with my attorney (at my own expense) before signing it and I decided to seek legal advice or not seek legal advice to the extent I deemed appropriate; and,
|
h.
|
I understand that the waiver and release contained in this Agreement does not apply to any rights or claims that may arise after the date that I execute the Agreement.
|
a.
|
Keep me on its payroll with full pay and benefits through June 30, 2014 (the period through June 30, 2014 shall be hereinafter referred to as the “Transition Period”). During the Transition Period, I will work with Company officials to ensure an orderly transition of my responsibilities as the Company’s Executive Vice President & Group Executive of Worldwide Sales and Services. Although I will remain on payroll, the Company and I agree that I will not report to work after January 16, 2014, that my Company network access will be terminated on January 16, 2014 and that I will not perform any work on behalf of the Company unless reasonably requested to do so by Guy Di Lella, Chief Human Resources Officer. I agree to make myself available, as reasonably requested by the Company to assist in any transition of work or related matters during the Transition Period. I understand and agree that my employment will officially terminate as of the close of business on June 30, 2014 (the “Termination Date”). Finally, I understand and agree that I will not receive incentive compensation for the Company’s fiscal year that begins on April 1, 2014.
|
b.
|
Pay me my CA Fiscal Year 2014 Annual Performance Cash Bonus based upon the terms of that Bonus and as determined by the Company’s Compensation and Human Resources Committee of the Board of Directors (the “Compensation Committee”).
|
c.
|
Award me a prorated portion of my CA Fiscal Year 2012, 2013 & 2014 Three-Year Performance Share Awards in accordance with the terms and conditions of the applicable Plan governing such awards, such pro-ration to be based upon the portion of the applicable performance periods that have been completed through my Termination Date. I understand and agree that such share grants (i) shall be made only after the end of the applicable performance cycle, (ii) shall be based upon actual performance achieved as determined in the sole discretion of the Compensation Committee (provided that negative discretion shall only be applied to the extent it is applied generally to the executive management team) and (iii) that nothing herein shall be construed to accelerate the vesting of any Performance Share Award. I understand that the Company anticipates that these awards, if any, will be made in June, 2014, June, 2015 and June 2016 contemporaneous with awards made to other Company executives.
|
d.
|
Offer me and directly pay for Senior Executive Outplacement through Crenshaw Associates. The Company has paid a one-time fee for the services of Crenshaw Associates. I understand and agree that if I want to add to or change these services that I must do so at my own expense.
|
e.
|
Continue my participation in the Ayco Company LP Comprehensive Counseling Program for Company Executives until May 31, 2015, which shall include Tax Preparation Services through Ayco for my calendar year 2014 income tax return.
|
1.
|
On or about ______, 2014, I signed a Separation Agreement and General Claims Release (“Agreement”) presented to me by the Company.
|
2.
|
Paragraph 4 of the Agreement requires me to sign a 2
nd
Release as a condition of receiving the Additional Payment described in Paragraph 4 of the Agreement.
|
3.
|
To date, I have received all of the benefits that have come due as outlined in Paragraph 3 of the Agreement.
|
4.
|
In consideration for the Additional Payment described in Paragraph 4 of the Agreement, I hereby waive any rights I may have to benefits under the CA, Inc. Severance Plan. I shall not be entitled to any other severance amounts or benefits from the Company following the effective date of the 2
nd
Release.
|
5.
|
By signing this 2
nd
Release, I reaffirm each and every provision of the Agreement (which is incorporated herein by reference) as of today’s date and specifically acknowledge that I am waiving any and all claims of any nature or kind that I may have against the Company (whether known or unknown to me) that accrued or could have accrued between the time that I signed the Agreement and the time I sign this 2
nd
Release.
|
1.
|
I acknowledge that in my capacity as a senior executive of the Company I was privy to a wide range of confidential information. Some examples of the types of confidential information that I learned in my role include (but are not limited to): The Company's short-term and long-term business and technology strategy and overall strategic plan; the strategies the Company utilized and the strategies the Company was developing to compete effectively in the marketplace; information about the Company's growth strategy including entities it was considering acquiring or developing strategic partnerships with; information about the Company's sales strategies and pricing plans; information concerning existing or prospective customers; and, information about the Company's product roadmap.
|
2.
|
I agree that the Company would be severely damaged if I disclosed confidential information that I learned during my tenure to a competitor or if I accepted a position with a competitor that involved sales or sales-related activities or the development or oversight of corporate or technology strategy. I further acknowledge that it would be impossible for me to work in a sales or strategic position with the Company's competitors without inevitably using and/or disclosing confidential information that I learned in my senior executive role with the Company. Therefore, in furtherance of my duty of loyalty to the Company and to prevent this harm, I promise that until
March 31, 2015,
I will not:
|
a.
|
accept or act in an executive or senior position (as an owner, employee, consultant or in any other capacity) involving sales or sales-related activities or the development or oversight of corporate or technology strategy with any of the following companies or their affiliates or successors in interest (the "Restricted” Company or Companies): Gartner, BMC, Compuware, IBM, HP, EMC, Oracle, VMWare, ServiceNow, Solar Winds, AppDynamics or New Relic. Notwithstanding the above, I understand that after June 30, 2014, the Company will permit me to accept employment with a division of a Restricted Company only if (1) such division does not license or lease products or provide services that are competitive with products that are licensed or leased or services that are provided by CA; and, (2) my employment at the Restricted Company will not involve or influence the strategy or sales of any division of a Restricted Company that is competitive with the business of CA. I understand and agree that before accepting such position with a division of a Restricted Company, I must request and receive the written approval of the Company’s Chief Human Resources, such approval not to be unreasonably withheld;
|
b.
|
solicit, call on, service or induce others to solicit, call on or service any "Customer" for the purpose of inducing it to license or lease a product or purchase a service that competes with a product or service offered by the Company. A "Customer," for purposes of this Agreement, is any person or business entity that licensed or leased a CA product or purchased a service within the 18 months preceding my Termination Date;
|
c.
|
solicit, call on, or induce others to solicit or call on, any "Prospective Customer" for the purpose of inducing it to license or lease a product or purchase a service which competes with a product or service offered by the Company. A
"Prospective Customer," for purposes of this Agreement, is any person or business entity that I solicited (whether directly or through another CA employee or agent at my direction) on behalf of the Company anytime within the 9 months preceding my Termination Date; and,
|
d.
|
solicit or encourage or endeavor to cause, directly or indirectly, any employee or contractor of the Company to leave his or her employment or placement with the Company, or breach his or her Confidentiality Agreement or employment or placement agreement with the Company.
|
3.
|
This Non-Competition Agreement shall be governed by and, for all purposes, construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in such state. The federal or state courts of the State of New York, County of Suffolk shall have sole and exclusive jurisdiction over any claim or cause of action relating to this Agreement, my employment with the Company, or my separation from the Company. I will accept service of process as provided under New York law or by registered mail, return receipt requested, and waive any objection based upon
forum non conveniens
or as to personal jurisdiction over me in the state or federal courts of the State of New York, County of Suffolk. The choice of forum set forth in this paragraph shall not be deemed to preclude the enforcement of any judgment obtained in such forum in any other jurisdiction.
|
4.
|
I understand and agree that if the Company brings a lawsuit against me to enforce any of its rights under this Non-Competition Agreement and is deemed to be the prevailing party by a court of law in such lawsuit, I will be required to repay to the
|
5.
|
This Non-Competition Agreement shall inure to the benefit of and may be enforced by CA, its successors and assigns. I understand and agree that this Non-Competition Agreement is personal to me and I may not assign it.
|
a.
|
To the extent Executive deemed appropriate, Executive took advantage of this period to consider this Agreement before signing it;
|
b.
|
Executive carefully read this Agreement;
|
c.
|
Executive fully understands it;
|
d.
|
Executive is entering into this Agreement knowingly and voluntarily;
|
e.
|
To the extent Executive decides to sign and return this Agreement to the Company prior to the 21 days that Executive has been provided to consider it, Executive acknowledges that he/she has done so voluntarily;
|
f.
|
In the event the Company makes changes to the offer contained in this Agreement, whether material or immaterial, Executive understands that any such changes will not restart the 21 day consideration period provided for above;
|
g.
|
The Company advised Executive to discuss this Agreement with his/her attorney (at Executive's own expense) before signing it and Executive decided to seek legal advice or not seek legal advice to the extent Executive deemed appropriate; and,
|
h.
|
Executive understands that the waiver and release contained in this Agreement does not apply to any rights or claims that may arise after the date that Executive executes the Agreement.
|
a.
|
Pay Executive the payments and benefits pursuant to Section 3 of the Policy which are:
|
b.
|
Subject to Section 4 of the Policy, the cash payments specified in clauses (i) and (ii) of this Section 3.a shall be paid no later than the sixtieth (60
th
) day (or next following business day if the sixtieth day is not a business day) following the Termination Date, provided that, if and to the extent necessary to prevent an Executive who is a "specified employee" under Section 409A from being subject to adverse tax consequences under Section 409A, the payments specified in clause (i) and (ii) of Section 3.a of the Policy shall not be paid until the first day after the six month anniversary of the Termination Date or, if earlier, the Executive’s death. The amounts under clause (iii) of Section 3.a shall be paid at the time that awards are paid under the Company Incentive Plan. All amounts payable under this Policy shall be without interest if paid when due. All other outstanding benefits and awards to which Executive may be entitled shall be governed by the terms of the applicable plans and award agreements.
|
a.
|
Any rights Executive may have under this Agreement;
|
b.
|
Any rights Executive may have to continued health or dental benefits under a Company-sponsored benefit plan. Any such benefits shall be
|
c.
|
Any rights Executive may have under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”);
|
d.
|
Any rights Executive may have related to vested monies that he or she may have within the Company’s 401(k) plan;
|
e.
|
Any claim Executive may have to reimbursement of business-related expenses that Executive incurred while performing his/her job for the Company. Such amounts will be paid if deemed owing in accordance with Company policy; and,
|
f.
|
Any claim Executive may have for indemnity under state law which cannot be waived by virtue of state law or any rights to indemnity under by-laws or other corporate documents of the Company.
|
a.
|
disclosure of any confidential information or trade secrets of the Company; and
|
b.
|
retention of any confidential materials (including product, sales, and marketing information, development documents or materials, drawings, or other intellectual property) created or used by the Executive or others during the Executive's employment or any other property (intellectual or physical) that belongs to the Company.
|
Annual Fee Description
|
Fee Prior to April 1, 2014
|
Fee Effective April 1, 2014
|
||||
Non-Employee Director
|
|
$275,000
|
|
|
$325,000
|
|
Chairman of the Board
|
|
$100,000
|
|
|
$100,000
|
|
Audit Committee Chairman
|
|
$25,000
|
|
|
$25,000
|
|
Compensation and Human Resources Committee Chairman
|
|
$15,000
|
|
|
$15,000
|
|
Compliance and Risk Committee Chairman
|
|
$10,000
|
|
|
$10,000
|
|
Corporate Governance Committee Chairman
|
|
$10,000
|
|
|
$10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
||||||||||
Earnings available for fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations before income taxes, minority interest and discontinued operations
|
|
$
|
1,130
|
|
|
$
|
1,185
|
|
|
$
|
1,330
|
|
|
$
|
1,293
|
|
|
$
|
1,039
|
|
Add: Fixed charges
|
|
156
|
|
|
121
|
|
|
115
|
|
|
113
|
|
|
123
|
|
|||||
Total earnings available for fixed charges
|
|
$
|
1,286
|
|
|
$
|
1,306
|
|
|
$
|
1,445
|
|
|
$
|
1,406
|
|
|
$
|
1,162
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
(1)
|
|
$
|
102
|
|
|
$
|
68
|
|
|
$
|
64
|
|
|
$
|
64
|
|
|
$
|
75
|
|
Interest portion of rental expense
|
|
54
|
|
|
53
|
|
|
51
|
|
|
49
|
|
|
48
|
|
|||||
Total fixed charges
|
|
$
|
156
|
|
|
$
|
121
|
|
|
$
|
115
|
|
|
$
|
113
|
|
|
$
|
123
|
|
RATIOS OF EARNINGS TO FIXED CHARGES
|
|
8.24
|
|
|
10.79
|
|
|
12.57
|
|
|
12.44
|
|
|
9.45
|
|
|||||
Deficiency of earnings to fixed charges
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
(1)
|
Includes amortization of discount related to indebtedness
|
Name of Subsidiary
|
Jurisdiction of Incorporation or Organization
|
CA Canada Company
|
Canada
|
CA Computer Associates European Holding GmbH
|
Germany
|
CA Europe S.à.r.l.
|
Switzerland
|
CA Foreign, Inc.
|
Delaware
|
CA Global Holdings
|
Bermuda
|
CA Japan Ltd.
|
Japan
|
CA Management, Inc.
|
Delaware
|
CA Marketing Corporation
|
Delaware
|
CA (Pacific) Pty Ltd
|
Australia
|
CA Programas de Computador, Participações e Serviços Ltda.
|
Brazil
|
CA SAS
|
France
|
CA Software Holding B.V.
|
Netherlands
|
Computer Associates Holding Limited
|
United Kingdom
|
Computer Associates Japan Holdings, Y.K.
|
Japan
|
Computer Associates UK Limited
|
United Kingdom
|
Sterling Software (Netherlands) IV B.V.
|
Netherlands
|
Signature
|
|
|
/s/ Michael P. Gregoire
|
Michael P. Gregoire
Director and Chief Executive Officer
(Principal Executive Officer)
|
|
|
/s/ Richard J. Beckert
|
Richard J. Beckert
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
/s/ Neil A. Manna
|
Neil A. Manna
Senior Vice President, Chief Accounting Officer
(Principal Accounting Officer)
|
|
Signature
|
|
|
/s/ Jens Alder
|
Jens Alder
|
|
|
/s/ Raymond J. Bromark
|
Raymond J. Bromark
|
|
|
/s/ Gary J. Fernandes
|
Gary J. Fernandes
|
|
|
/s/ Rohit Kapoor
|
Rohit Kapoor
|
|
|
/s/ Kay Koplovitz
|
Kay Koplovitz
|
|
|
/s/ Christopher B. Lofgren
|
Christopher B. Lofgren
|
|
|
/s/ Richard Sulpizio
|
Richard Sulpizio
|
|
|
/s/ Laura S. Unger
|
Laura S. Unger
|
|
|
/s/ Arthur F. Weinbach
|
Arthur F. Weinbach
|
|
|
/s/ Renato (Ron) Zambonini
|
Renato (Ron) Zambonini
|
1.
|
I have reviewed this Annual Report on Form 10-K of CA, Inc.;
|
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:
|
May 19, 2014
|
|
|
|
|
|
/s/ Michael P. Gregoire
|
|
|
|
|
|
|
|
Michael P. Gregoire
|
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of CA, Inc.;
|
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:
|
May 19, 2014
|
|
|
|
|
|
/s/ Richard J. Beckert
|
|
|
|
|
|
|
|
Richard J. Beckert
|
|
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
/s/ Michael P. Gregoire
|
Michael P. Gregoire
|
Chief Executive Officer
|
May 19, 2014
|
|
/s/ Richard J. Beckert
|
Richard J. Beckert
|
Executive Vice President and Chief Financial Officer
|
May 19, 2014
|