Delaware | 13-2857434 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
520 Madison Avenue, New York, New York | 10022 |
(Address of principal executive offices) | (Zip Code) |
(Check one:) | |||
Large accelerated filer | þ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Title of Class | Shares Outstanding | |
Common Stock | as of January 20, 2016 | |
par value $0.10 per share | 416,762,791 |
Page | ||
PART I. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
December 31, 2015 | March 31, 2015 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,353 | $ | 2,804 | |||
Trade accounts receivable, net | 618 | 652 | |||||
Deferred income taxes | 341 | 318 | |||||
Other current assets | 142 | 213 | |||||
Total current assets | $ | 3,454 | $ | 3,987 | |||
Property and equipment, net of accumulated depreciation of $846 and $812, respectively | $ | 249 | $ | 252 | |||
Goodwill | 6,123 | 5,806 | |||||
Capitalized software and other intangible assets, net | 866 | 731 | |||||
Deferred income taxes | 55 | 92 | |||||
Other noncurrent assets, net | 110 | 111 | |||||
Total assets | $ | 10,857 | $ | 10,979 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 8 | $ | 10 | |||
Accounts payable | 84 | 105 | |||||
Accrued salaries, wages and commissions | 179 | 219 | |||||
Accrued expenses and other current liabilities | 371 | 428 | |||||
Deferred revenue (billed or collected) | 1,983 | 2,114 | |||||
Taxes payable, other than income taxes payable | 65 | 55 | |||||
Federal, state and foreign income taxes payable | 2 | — | |||||
Deferred income taxes | 7 | 7 | |||||
Total current liabilities | $ | 2,699 | $ | 2,938 | |||
Long-term debt, net of current portion | $ | 1,956 | $ | 1,253 | |||
Federal, state and foreign income taxes payable | 154 | 150 | |||||
Deferred income taxes | 53 | 45 | |||||
Deferred revenue (billed or collected) | 667 | 863 | |||||
Other noncurrent liabilities | 101 | 105 | |||||
Total liabilities | $ | 5,630 | $ | 5,354 | |||
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; 412,442,259 and 435,502,730 shares outstanding, respectively | 59 | 59 | |||||
Additional paid-in capital | 3,638 | 3,631 | |||||
Retained earnings | 6,506 | 6,221 | |||||
Accumulated other comprehensive loss | (469 | ) | (418 | ) | |||
Treasury stock, at cost, 177,252,822 and 154,192,351 shares, respectively | (4,507 | ) | (3,868 | ) | |||
Total stockholders’ equity | $ | 5,227 | $ | 5,625 | |||
Total liabilities and stockholders’ equity | $ | 10,857 | $ | 10,979 |
For the Three Months Ended December 31, | For the Nine Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue: | |||||||||||||||
Subscription and maintenance | $ | 828 | $ | 892 | $ | 2,496 | $ | 2,709 | |||||||
Professional services | 82 | 90 | 244 | 268 | |||||||||||
Software fees and other | 124 | 109 | 276 | 262 | |||||||||||
Total revenue | $ | 1,034 | $ | 1,091 | $ | 3,016 | $ | 3,239 | |||||||
Expenses: | |||||||||||||||
Costs of licensing and maintenance | $ | 73 | $ | 74 | $ | 209 | $ | 217 | |||||||
Cost of professional services | 75 | 84 | 224 | 253 | |||||||||||
Amortization of capitalized software costs | 65 | 62 | 192 | 204 | |||||||||||
Selling and marketing | 277 | 283 | 751 | 782 | |||||||||||
General and administrative | 90 | 90 | 279 | 269 | |||||||||||
Product development and enhancements | 133 | 143 | 420 | 443 | |||||||||||
Depreciation and amortization of other intangible assets | 27 | 31 | 83 | 99 | |||||||||||
Other expenses, net | 1 | 6 | 2 | 21 | |||||||||||
Total expenses before interest and income taxes | $ | 741 | $ | 773 | $ | 2,160 | $ | 2,288 | |||||||
Income from continuing operations before interest and income taxes | $ | 293 | $ | 318 | $ | 856 | $ | 951 | |||||||
Interest expense, net | 15 | 12 | 36 | 38 | |||||||||||
Income from continuing operations before income taxes | $ | 278 | $ | 306 | $ | 820 | $ | 913 | |||||||
Income tax expense | 59 | 88 | 222 | 248 | |||||||||||
Income from continuing operations | $ | 219 | $ | 218 | $ | 598 | $ | 665 | |||||||
Income from discontinued operations, net of income taxes | 4 | 4 | 11 | 30 | |||||||||||
Net income | $ | 223 | $ | 222 | $ | 609 | $ | 695 | |||||||
Basic income per common share: | |||||||||||||||
Income from continuing operations | $ | 0.52 | $ | 0.49 | $ | 1.37 | $ | 1.50 | |||||||
Income from discontinued operations | 0.01 | 0.01 | 0.03 | 0.07 | |||||||||||
Net income | $ | 0.53 | $ | 0.50 | $ | 1.40 | $ | 1.57 | |||||||
Basic weighted average shares used in computation | 420 | 440 | 431 | 440 | |||||||||||
Diluted income per common share: | |||||||||||||||
Income from continuing operations | $ | 0.52 | $ | 0.49 | $ | 1.37 | $ | 1.49 | |||||||
Income from discontinued operations | 0.01 | 0.01 | 0.03 | 0.07 | |||||||||||
Net income | $ | 0.53 | $ | 0.50 | $ | 1.40 | $ | 1.56 | |||||||
Diluted weighted average shares used in computation | 421 | 441 | 432 | 441 |
For the Three Months Ended December 31, | For the Nine Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 223 | $ | 222 | $ | 609 | $ | 695 | |||||||
Other comprehensive loss: | |||||||||||||||
Foreign currency translation adjustments | (30 | ) | (78 | ) | (51 | ) | (162 | ) | |||||||
Total other comprehensive loss | $ | (30 | ) | $ | (78 | ) | $ | (51 | ) | $ | (162 | ) | |||
Comprehensive income | $ | 193 | $ | 144 | $ | 558 | $ | 533 |
For the Nine Months Ended December 31, | |||||||
2015 | 2014 | ||||||
Operating activities from continuing operations: | |||||||
Net income | $ | 609 | $ | 695 | |||
Income from discontinued operations | (11 | ) | (30 | ) | |||
Income from continuing operations | $ | 598 | $ | 665 | |||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | |||||||
Depreciation and amortization | 275 | 303 | |||||
Deferred income taxes | (53 | ) | (62 | ) | |||
Provision for bad debts | — | 1 | |||||
Share-based compensation expense | 70 | 65 | |||||
Asset impairments and other non-cash items | 1 | 1 | |||||
Foreign currency transaction losses | 5 | 1 | |||||
Changes in other operating assets and liabilities, net of effect of acquisitions: | |||||||
Decrease in trade accounts receivable | 50 | 91 | |||||
Decrease in deferred revenue | (353 | ) | (445 | ) | |||
Increase in taxes payable, net | 53 | 34 | |||||
Decrease in accounts payable, accrued expenses and other | (50 | ) | (38 | ) | |||
Decrease in accrued salaries, wages and commissions | (43 | ) | (62 | ) | |||
Changes in other operating assets and liabilities | 10 | (9 | ) | ||||
Net cash provided by operating activities - continuing operations | $ | 563 | $ | 545 | |||
Investing activities from continuing operations: | |||||||
Acquisitions of businesses, net of cash acquired, and purchased software | $ | (648 | ) | $ | (32 | ) | |
Purchases of property and equipment | (34 | ) | (46 | ) | |||
Proceeds from sale of short-term investments | 48 | — | |||||
Net cash used in investing activities - continuing operations | $ | (634 | ) | $ | (78 | ) | |
Financing activities from continuing operations: | |||||||
Dividends paid | $ | (325 | ) | $ | (333 | ) | |
Purchases of common stock | (705 | ) | (125 | ) | |||
Notional pooling borrowings | 3,237 | 4,226 | |||||
Notional pooling repayments | (3,230 | ) | (4,145 | ) | |||
Debt borrowings | 1,100 | — | |||||
Debt repayments | (408 | ) | (507 | ) | |||
Debt issuance costs | (4 | ) | — | ||||
Exercise of common stock options | 5 | 25 | |||||
Other financing activities | (23 | ) | — | ||||
Net cash used in financing activities - continuing operations | $ | (353 | ) | $ | (859 | ) | |
Effect of exchange rate changes on cash | $ | (38 | ) | $ | (310 | ) | |
Net change in cash and cash equivalents - continuing operations | $ | (462 | ) | $ | (702 | ) | |
Cash provided by (used in) operating activities - discontinued operations | $ | 11 | $ | (37 | ) | ||
Cash provided by investing activities - discontinued operations | — | 170 | |||||
Net effect of discontinued operations on cash and cash equivalents | $ | 11 | $ | 133 | |||
Decrease in cash and cash equivalents | $ | (451 | ) | $ | (569 | ) | |
Cash and cash equivalents at beginning of period | $ | 2,804 | $ | 3,252 | |||
Cash and cash equivalents at end of period | $ | 2,353 | $ | 2,683 |
(dollars in millions) | Rally | Other Fiscal Year 2016 Acquisitions | Estimated Useful Life | ||||||
Finite-lived intangible assets (1) | $ | 78 | $ | 14 | 1-15 years | ||||
Purchased software | 176 | 96 | 5-7 years | ||||||
Goodwill | 261 | 60 | Indefinite | ||||||
Deferred tax liabilities, net | (46 | ) | (25 | ) | — | ||||
Other assets net of other liabilities assumed (2) | 50 | 2 | — | ||||||
Purchase price | $ | 519 | $ | 147 |
(1) | Includes customer relationships and trade names. |
(2) | Includes approximately $13 million of cash acquired and approximately $48 million of short-term investments acquired relating to Rally. |
Three Months Ended December 31, | |||||||
(in millions) | 2015 | 2014 | |||||
Subscription and maintenance | $ | 5 | $ | 7 | |||
Software fees and other | 2 | 2 | |||||
Total revenue | $ | 7 | $ | 9 | |||
Income from operations of discontinued components, net of tax expense of $2 million and $2 million, respectively | $ | 4 | $ | 4 |
Nine Months Ended December 31, | |||||||
(in millions) | 2015 | 2014 | |||||
Subscription and maintenance | $ | 16 | $ | 38 | |||
Software fees and other | 6 | 17 | |||||
Total revenue | $ | 22 | $ | 55 | |||
Income from operations of discontinued components, net of tax expense of $6 million and $8 million, respectively | $ | 11 | $ | 10 | |||
Gain on disposal of discontinued component, net of tax | — | 20 | |||||
Income from discontinued operations, net of tax | $ | 11 | $ | 30 |
(in millions) | Accrued Balance at March 31, 2015 | Expense | Change in Estimate | Payments | Accretion and Other | Accrued Balance at December 31, 2015 | |||||||||||||||||
Severance charges | $ | 28 | $ | — | $ | (2 | ) | $ | (22 | ) | $ | — | $ | 4 | |||||||||
Facility exit charges | 21 | — | — | (3 | ) | — | 18 | ||||||||||||||||
Total accrued liabilities | $ | 49 | $ | 22 |
(in millions) | Accrued Balance at March 31, 2014 | Expense | Change in Estimate | Payments | Accretion and Other | Accrued Balance at December 31, 2014 | |||||||||||||||||
Severance charges | $ | 55 | $ | 21 | $ | (3 | ) | $ | (50 | ) | $ | (1 | ) | $ | 22 | ||||||||
Facility exit charges | 29 | — | — | (7 | ) | (1 | ) | 21 | |||||||||||||||
Total accrued liabilities | $ | 84 | $ | 43 |
December 31, 2015 | March 31, 2015 | ||||||
(in millions) | |||||||
Accounts receivable – billed | $ | 562 | $ | 591 | |||
Accounts receivable – unbilled | 55 | 63 | |||||
Other receivables | 13 | 15 | |||||
Less: Allowances | (12 | ) | (17 | ) | |||
Trade accounts receivable, net | $ | 618 | $ | 652 |
At December 31, 2015 | |||||||||||||||||||
Gross Amortizable Assets | Less: Fully Amortized Assets | Remaining Amortizable Assets | Accumulated Amortization on Remaining Amortizable Assets | Net Assets | |||||||||||||||
(in millions) | |||||||||||||||||||
Purchased software products | $ | 5,987 | $ | 4,863 | $ | 1,124 | $ | 513 | $ | 611 | |||||||||
Internally developed software products | 1,485 | 994 | 491 | 341 | 150 | ||||||||||||||
Other intangible assets | 926 | 608 | 318 | 213 | 105 | ||||||||||||||
Total capitalized software and other intangible assets | $ | 8,398 | $ | 6,465 | $ | 1,933 | $ | 1,067 | $ | 866 |
At March 31, 2015 | |||||||||||||||||||
Gross Amortizable Assets | Less: Fully Amortized Assets | Remaining Amortizable Assets | Accumulated Amortization on Remaining Amortizable Assets | Net Assets | |||||||||||||||
(in millions) | |||||||||||||||||||
Purchased software products | $ | 5,717 | $ | 4,859 | $ | 858 | $ | 413 | $ | 445 | |||||||||
Internally developed software products | 1,486 | 835 | 651 | 414 | 237 | ||||||||||||||
Other intangible assets | 836 | 556 | 280 | 231 | 49 | ||||||||||||||
Total capitalized software and other intangible assets | $ | 8,039 | $ | 6,250 | $ | 1,789 | $ | 1,058 | $ | 731 |
Year Ended March 31, | |||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||
(in millions) | |||||||||||||||||||
Purchased software products | $ | 145 | $ | 152 | $ | 147 | $ | 104 | $ | 85 | |||||||||
Internally developed software products | 110 | 79 | 37 | 10 | 1 | ||||||||||||||
Other intangible assets | 43 | 15 | 8 | 7 | 6 | ||||||||||||||
Total | $ | 298 | $ | 246 | $ | 192 | $ | 121 | $ | 92 |
(in millions) | Mainframe Solutions | Enterprise Solutions | Services | Total | |||||||||||
Balance at March 31, 2015 | $ | 4,178 | $ | 1,547 | $ | 81 | $ | 5,806 | |||||||
Acquisitions | — | 321 | — | 321 | |||||||||||
Foreign currency translation adjustment | — | (4 | ) | — | (4 | ) | |||||||||
Balance at December 31, 2015 | $ | 4,178 | $ | 1,864 | $ | 81 | $ | 6,123 |
December 31, 2015 | March 31, 2015 | ||||||
(in millions) | |||||||
Current: | |||||||
Subscription and maintenance | $ | 1,793 | $ | 1,966 | |||
Professional services | 113 | 115 | |||||
Software fees and other | 77 | 33 | |||||
Total deferred revenue (billed or collected) – current | $ | 1,983 | $ | 2,114 | |||
Noncurrent: | |||||||
Subscription and maintenance | $ | 640 | $ | 832 | |||
Professional services | 24 | 28 | |||||
Software fees and other | 3 | 3 | |||||
Total deferred revenue (billed or collected) – noncurrent | $ | 667 | $ | 863 | |||
Total deferred revenue (billed or collected) | $ | 2,650 | $ | 2,977 |
Amount of Net (Gain)/Loss Recognized in the Condensed Consolidated Statements of Operations | |||||||||||||||
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
(in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Interest expense, net – interest rate swaps designated as fair value hedges | $ | — | $ | (2 | ) | $ | — | $ | (8 | ) | |||||
Other expenses, net – foreign currency contracts | $ | (3 | ) | $ | (10 | ) | $ | — | $ | (22 | ) |
At December 31, 2015 | At March 31, 2015 | ||||||||||||||||||||||
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) | $ | 593 | $ | — | $ | 593 | $ | 749 | $ | — | $ | 749 | |||||||||||
Foreign exchange derivatives (2) | — | 16 | 16 | — | 5 | 5 | |||||||||||||||||
Total assets | $ | 593 | $ | 16 | $ | 609 | $ | 749 | $ | 5 | $ | 754 | |||||||||||
Liabilities: | |||||||||||||||||||||||
Foreign exchange derivatives (2) | $ | — | $ | 6 | $ | 6 | $ | — | $ | 3 | $ | 3 | |||||||||||
Total liabilities | $ | — | $ | 6 | $ | 6 | $ | — | $ | 3 | $ | 3 |
(1) | The Company’s investments in money market funds are classified as “Cash and cash equivalents” in its Condensed Consolidated Balance Sheets. |
(2) | See Note I, “Derivatives” for additional information. |
At December 31, 2015 | At March 31, 2015 | ||||||||||||||
(in millions) | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||
Liabilities: | |||||||||||||||
Total debt (1) | $ | 1,964 | $ | 2,041 | $ | 1,263 | $ | 1,376 | |||||||
Facility exit reserve (2) | $ | 18 | $ | 20 | $ | 21 | $ | 23 |
(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 December 31, 2015 and March 31, 2015. At December 31, 2015 and March 31, 2015, the facility exit reserve included approximately $4 million and $4 million, respectively, in “Accrued expenses and other current liabilities” and approximately $14 million and $17 million, respectively, in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets (Level 3). |
Declaration Date | Dividend Per Share | Record Date | Total Amount | Payment Date | ||||
May 5, 2015 | $0.25 | May 28, 2015 | $110 | June 16, 2015 | ||||
August 6, 2015 | $0.25 | August 27, 2015 | $110 | September 15, 2015 | ||||
November 5, 2015 | $0.25 | November 19, 2015 | $105 | December 8, 2015 |
Declaration Date | Dividend Per Share | Record Date | Total Amount | Payment Date | ||||
May 15, 2014 | $0.25 | May 29, 2014 | $111 | June 17, 2014 | ||||
July 31, 2014 | $0.25 | August 21, 2014 | $111 | September 9, 2014 | ||||
November 6, 2014 | $0.25 | November 20, 2014 | $111 | December 9, 2014 |
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(in millions, except per share amounts) | |||||||||||||||
Basic income from continuing operations per common share: | |||||||||||||||
Income from continuing operations | $ | 219 | $ | 218 | $ | 598 | $ | 665 | |||||||
Less: Income from continuing operations allocable to participating securities | (2 | ) | (2 | ) | (6 | ) | (7 | ) | |||||||
Income from continuing operations allocable to common shares | $ | 217 | $ | 216 | $ | 592 | $ | 658 | |||||||
Weighted average common shares outstanding | 420 | 440 | 431 | 440 | |||||||||||
Basic income from continuing operations per common share | $ | 0.52 | $ | 0.49 | $ | 1.37 | $ | 1.50 | |||||||
Diluted income from continuing operations per common share: | |||||||||||||||
Income from continuing operations | $ | 219 | $ | 218 | $ | 598 | $ | 665 | |||||||
Less: Income from continuing operations allocable to participating securities | (2 | ) | (2 | ) | (6 | ) | (7 | ) | |||||||
Income from continuing operations allocable to common shares | $ | 217 | $ | 216 | $ | 592 | $ | 658 | |||||||
Weighted average shares outstanding and common share equivalents: | |||||||||||||||
Weighted average common shares outstanding | 420 | 440 | 431 | 440 | |||||||||||
Weighted average effect of share-based payment awards | 1 | 1 | 1 | 1 | |||||||||||
Denominator in calculation of diluted income per share | 421 | 441 | 432 | 441 | |||||||||||
Diluted income from continuing operations per common share | $ | 0.52 | $ | 0.49 | $ | 1.37 | $ | 1.49 |
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(in millions) | |||||||||||||||
Costs of licensing and maintenance | $ | 2 | $ | 2 | $ | 5 | $ | 4 | |||||||
Cost of professional services | 1 | 1 | 3 | 3 | |||||||||||
Selling and marketing | 9 | 8 | 25 | 23 | |||||||||||
General and administrative | 9 | 8 | 25 | 21 | |||||||||||
Product development and enhancements | 4 | 4 | 12 | 14 | |||||||||||
Share-based compensation expense before tax | $ | 25 | $ | 23 | $ | 70 | $ | 65 | |||||||
Income tax benefit | (8 | ) | (7 | ) | (22 | ) | (20 | ) | |||||||
Net share-based compensation expense | $ | 17 | $ | 16 | $ | 48 | $ | 45 |
Unrecognized Share-Based Compensation Costs | Weighted Average Period Expected to be Recognized | ||||
(in millions) | (in years) | ||||
Stock option awards | $ | 5 | 1.9 | ||
Restricted stock units | 20 | 2.0 | |||
Restricted stock awards | 68 | 2.0 | |||
Performance share units | 27 | 2.4 | |||
Total unrecognized share-based compensation costs | $ | 120 | 2.1 |
Nine Months Ended December 31, | |||||||
2015 | 2014 | ||||||
Weighted average fair value | $ | 4.68 | $ | 5.87 | |||
Dividend yield | 3.37 | % | 3.29 | % | |||
Expected volatility factor (1) | 23 | % | 29 | % | |||
Risk-free interest rate (2) | 1.9 | % | 2.1 | % | |||
Expected life (in years) (3) | 6.0 | 6.0 |
(1) | Expected volatility is measured using historical daily price changes of the Company’s common 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). |
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 | |||||
2015 | 1 year | 0.5 | $31.41 | 0.1 | $30.42 | |||||
2014 | 1 year | 0.7 | $29.91 | 0.1 | $28.92 |
Incentive Plans for Fiscal Years | Performance Period | Shares of Common Stock (in millions) | Weighted Average Grant Date Fair Value | |||
2013 | 3 years | 0.1 | $31.41 |
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 | |||||
2015 | 1 year | 0.2 | $30.45 | 0.1 | $27.50 | |||||
2014 | 1 year | 0.2 | $28.69 | 0.1 | $25.73 |
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(shares in millions) | |||||||||||||||
RSAs: | |||||||||||||||
Shares | — | (3) | 0.1 | 2.8 | 3.1 | ||||||||||
Weighted average grant date fair value (1) | $ | 26.53 | $ | 29.72 | $ | 30.63 | $ | 28.97 | |||||||
RSUs: | |||||||||||||||
Shares | — | — | (3) | 0.9 | 0.8 | ||||||||||
Weighted average grant date fair value (2) | $ | — | $ | 27.98 | $ | 28.72 | $ | 26.92 |
(1) | The fair value is based on the quoted market value of the Company’s common stock on the grant date. |
(2) | The fair value is based on the quoted market value of the Company’s common stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate. |
(3) | Less than 0.1 million. |
Nine Months Ended December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Total borrowings outstanding at beginning of period (1) | $ | 138 | $ | 139 | |||
Borrowings | 3,237 | 4,226 | |||||
Repayments | (3,230 | ) | (4,145 | ) | |||
Foreign exchange effect | (6 | ) | (82 | ) | |||
Total borrowings outstanding at end of period (1) | $ | 139 | $ | 138 |
(1) | Included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheets. |
Three Months Ended December 31, 2015 | Mainframe Solutions | Enterprise Solutions | Services | Total | |||||||||||
(dollars in millions) | |||||||||||||||
Revenue | $ | 554 | $ | 398 | $ | 82 | $ | 1,034 | |||||||
Expenses | 218 | 349 | 77 | 644 | |||||||||||
Segment profit | $ | 336 | $ | 49 | $ | 5 | $ | 390 | |||||||
Segment operating margin | 61 | % | 12 | % | 6 | % | 38 | % | |||||||
Depreciation | $ | 9 | $ | 7 | $ | — | $ | 16 |
(in millions) | |||
Segment profit | $ | 390 | |
Less: | |||
Purchased software amortization | 39 | ||
Other intangibles amortization | 11 | ||
Internally developed software products amortization | 26 | ||
Share-based compensation expense | 25 | ||
Other gains, net (1) | (4 | ) | |
Interest expense, net | 15 | ||
Income from continuing operations before income taxes | $ | 278 |
(1) | Other gains, net consists of costs associated with certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. |
Nine Months Ended December 31, 2015 | Mainframe Solutions | Enterprise Solutions | Services | Total | |||||||||||
(dollars in millions) | |||||||||||||||
Revenue | $ | 1,668 | $ | 1,104 | $ | 244 | $ | 3,016 | |||||||
Expenses | 641 | 996 | 227 | 1,864 | |||||||||||
Segment profit | $ | 1,027 | $ | 108 | $ | 17 | $ | 1,152 | |||||||
Segment operating margin | 62 | % | 10 | % | 7 | % | 38 | % | |||||||
Depreciation | $ | 27 | $ | 20 | $ | — | $ | 47 |
(in millions) | |||
Segment profit | $ | 1,152 | |
Less: | |||
Purchased software amortization | 106 | ||
Other intangibles amortization | 36 | ||
Internally developed software products amortization | 86 | ||
Share-based compensation expense | 70 | ||
Other gains, net (1) | (2 | ) | |
Interest expense, net | 36 | ||
Income from continuing operations before income taxes | $ | 820 |
(1) | Other gains, net consists of costs associated with certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. |
Three Months Ended December 31, 2014 | Mainframe Solutions | Enterprise Solutions | Services | Total | |||||||||||
(dollars in millions) | |||||||||||||||
Revenue | $ | 596 | $ | 405 | $ | 90 | $ | 1,091 | |||||||
Expenses | 248 | 347 | 85 | 680 | |||||||||||
Segment profit | $ | 348 | $ | 58 | $ | 5 | $ | 411 | |||||||
Segment operating margin | 58 | % | 14 | % | 6 | % | 38 | % | |||||||
Depreciation | $ | 10 | $ | 7 | $ | — | $ | 17 |
(in millions) | |||
Segment profit | $ | 411 | |
Less: | |||
Purchased software amortization | 28 | ||
Other intangibles amortization | 14 | ||
Internally developed software products amortization | 34 | ||
Share-based compensation expense | 23 | ||
Other gains, net (1) | (6 | ) | |
Interest expense, net | 12 | ||
Income from continuing operations before income taxes | $ | 306 |
(1) | Other gains, net consists of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. |
Nine Months Ended December 31, 2014 | Mainframe Solutions | Enterprise Solutions | Services | Total | |||||||||||
(dollars in millions) | |||||||||||||||
Revenue | $ | 1,820 | $ | 1,151 | $ | 268 | $ | 3,239 | |||||||
Expenses | 717 | 999 | 256 | 1,972 | |||||||||||
Segment profit | $ | 1,103 | $ | 152 | $ | 12 | $ | 1,267 | |||||||
Segment operating margin | 61 | % | 13 | % | 4 | % | 39 | % | |||||||
Depreciation | $ | 33 | $ | 21 | $ | — | $ | 54 |
(in millions) | |||
Segment profit | $ | 1,267 | |
Less: | |||
Purchased software amortization | 87 | ||
Other intangibles amortization | 45 | ||
Internally developed software products amortization | 117 | ||
Share-based compensation expense | 65 | ||
Other expenses, net (1) | 2 | ||
Interest expense, net | 38 | ||
Income from continuing operations before income taxes | $ | 913 |
(1) | Other expenses, net consists of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. |
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(in millions) | |||||||||||||||
United States | $ | 671 | $ | 668 | $ | 1,935 | $ | 1,967 | |||||||
EMEA (1) | 230 | 263 | 679 | 781 | |||||||||||
Other | 133 | 160 | 402 | 491 | |||||||||||
Total revenue | $ | 1,034 | $ | 1,091 | $ | 3,016 | $ | 3,239 |
(1) | Consists of Europe, the Middle East and Africa. |
• | Innovating in key product areas to extend our market position 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), Agile Management and Security across multiple platforms. |
• | Addressing shifts in market dynamics and technology. We will innovate to deliver new, relevant, and differentiated solutions that enable our customers to build and manage increasingly complex IT environments and to embrace and benefit from the rapidly emerging application economy. We are investing in areas such as Open Source, big data (the massive amounts of data generated and stored within and outside the enterprise) and data analytics, the Internet of Things (the ubiquitously connected network of devices, from servers to sensors, that has changed how we view computing), containers (a better approach to implementing code), making use of Application Programming Interfaces to deliver revenue, and an Agile approach to software development. |
• | 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 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 many large enterprise customers, we see cloud-based and lightweight try-and-buy models as increasingly attractive for our customers. Our platform agnostic strategy allows customers to plan, develop, manage and secure their IT environment regardless of whether an application resides in the cloud or on a mainframe or whether it’s on-demand or on-premise. |
• | 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 the mainframe as part of their strategy to succeed in the Application Economy through unified management approaches, end-to-end visibility and application portability. |
• | Enterprise Solutions products operate on mainly non-mainframe platforms and include our DevOps, Agile Management and Security product groups. Our DevOps solutions include Application Delivery solutions, Application Performance Management solutions and Infrastructure Management solutions. Our suite of management applications delivered from the cloud enables increased speed and scale and includes our IT Business Management solutions, API Management solutions and Enterprise Mobility Management solutions. Our Security solutions focus on smart authentication and deliver identity-centric security solutions to meet the needs of today’s mobile, cloud-connected, open enterprises to succeed in the Application Economy. |
• | 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 declined $57 million primarily as a result of an unfavorable foreign exchange effect of $51 million and, to a lesser extent, a decrease in subscription and maintenance revenue. These decreases were partially offset by an increase in revenue associated with our fiscal 2016 acquisitions of Rally and Xceedium, primarily reflected within Software fees and other revenue. |
• | As a result of insufficient revenue from new sales to offset the decline in revenue contribution from renewals and an expected unfavorable foreign exchange effect, we expect a year-over-year decrease in total revenue for fiscal 2016 compared with fiscal 2015. Excluding the expected unfavorable foreign exchange effect, we currently expect fiscal 2016 revenue to be consistent or slightly down as compared with fiscal 2015. |
• | Total bookings increased 16% primarily due to an increase in Mainframe Solutions renewals, an increase in contract duration and bookings related to our second quarter fiscal 2016 acquisitions of Rally and Xceedium. |
• | Renewal bookings increased by a percentage in the low twenties compared with the year-ago period primarily due to an increase in Mainframe Solutions renewals. These renewals increased primarily due to the timing of several contracts renewing prior to their scheduled expiration date. |
• | Total new product sales increased by a percentage in the mid-single digits compared with the year-ago period due to new product sales in connection with our second quarter fiscal 2016 acquisitions. Our second quarter fiscal 2016 acquisitions contributed approximately ten percent growth in the quarter. |
• | Mainframe Solutions new product sales, including capacity, increased by a percentage in the high single digits compared with the year-ago period primarily due to new sales made in connection with the increase in renewals. |
• | Enterprise Solutions new product sales increased by a percentage in the low single digits compared with the year-ago period primarily due to new sales that are associated with our second quarter fiscal 2016 acquisitions, which contributed mid-teens growth in the quarter. |
• | We expect our fiscal 2016 renewal portfolio to increase by a percentage in the mid-twenties compared with fiscal 2015. Excluding the large system integrator renewal that occurred during the second quarter of fiscal 2016, we currently expect our fiscal 2016 renewal portfolio to be generally consistent or increase by a percentage in the low single digits. |
• | Operating expenses decreased primarily as a result of a favorable foreign exchange effect and a decrease in non-acquisition personnel-related costs, partially offset by costs from our second quarter fiscal 2016 acquisitions of Rally and Xceedium. |
• | We anticipate a fiscal 2016 effective tax rate between 28% and 29%. |
• | Diluted income per common share from continuing operations increased to $0.52 from $0.49 primarily due to a decrease in the effective tax rate for the quarter and a decrease in the weighted average shares outstanding compared with the year-ago period as a result of the share repurchase arrangement with Careal Holding AG (Careal). These items were partially offset by an unfavorable foreign exchange effect. |
• | Mainframe Solutions revenue decreased primarily due to an unfavorable foreign exchange effect and, to a lesser extent, insufficient revenue from prior period new sales to offset the decline in revenue contribution from renewals. Mainframe Solutions operating margin increased compared with the year-ago period primarily due to the decrease in total operating costs. |
• | Enterprise Solutions revenue decreased due to an unfavorable foreign exchange effect. Excluding the unfavorable effect of foreign exchange, Enterprise Solutions revenue increased as a result of additional revenue associated with our second quarter fiscal 2016 acquisitions of Rally and Xceedium. Enterprise Solutions operating margin decreased primarily due to an increase in expenses as a result of our second quarter fiscal 2016 acquisitions of Rally and Xceedium. |
• | Services revenue decreased primarily due to an unfavorable foreign exchange effect and, to a lesser extent, a decline in professional services engagements in the first half of fiscal 2016 and fiscal 2015. Operating margin for professional services was consistent with the year-ago period. |
• | Net cash provided by operating activities from continuing operations was $332 million, representing an increase of $19 million. Net cash provided by operating activities increased compared with the year-ago period due to the decrease in vendor disbursements and payroll of $59 million, partially offset by the decrease in cash collections of $21 million, primarily as a result of an unfavorable effect of foreign exchange, an increase in income tax payments, net of $11 million and the increase in other disbursements, net of $8 million. |
• | In October 2015, we entered into an agreement with Bank of America, N.A. for a $300 million term loan with a maturity date of April 20, 2022. |
• | In November 2015, we entered into and closed on an arrangement with Careal to repurchase 22 million shares of our common stock in a private transaction. |
• | In November 2015, we held our user conference, CA World ‘15. This event showcased our unique strength in serving customers in the Application Economy. The event highlighted our solutions as well as our vision of the future to thousands of customers and partners. |
• | In November 2015, our Board of Directors (the Board) approved a new stock repurchase program that authorized the Company to acquire up to $750 million of its common stock. At December 31, 2015, the new $750 million stock repurchase program remained fully outstanding. We anticipate repurchasing shares of our common stock under this new stock repurchase program beginning in fiscal 2017. |
• | In November 2015, we announced our intention to increase the dividend per share in fiscal 2017, subject to quarterly Board approval, to $1.02 per share for the year, or $0.255 per share on a quarterly basis. This would be an increase from the current $1.00 per share annual dividend, or $0.25 per share on a quarterly basis. |
Third Quarter Comparison Fiscal | ||||||||||||||
2016 (1) | 2015 (1) | Dollar Change | Percentage Change | |||||||||||
(dollars in millions) | ||||||||||||||
Total revenue | $ | 1,034 | $ | 1,091 | $ | (57 | ) | (5 | )% | |||||
Income from continuing operations | $ | 219 | $ | 218 | $ | 1 | — | % | ||||||
Net cash provided by operating activities - continuing operations | $ | 332 | $ | 313 | $ | 19 | 6 | % | ||||||
Total bookings | $ | 1,242 | $ | 1,067 | $ | 175 | 16 | % | ||||||
Subscription and maintenance bookings | $ | 1,013 | $ | 880 | $ | 133 | 15 | % | ||||||
Weighted average subscription and maintenance license agreement duration in years | 3.76 | 3.29 | 0.47 | 14 | % |
(1) | Information presented excludes the results of our discontinued operations. |
First Nine Months Comparison Fiscal | ||||||||||||||
2016 (1) | 2015 (1) | Dollar Change | Percentage Change | |||||||||||
(dollars in millions) | ||||||||||||||
Total revenue | $ | 3,016 | $ | 3,239 | $ | (223 | ) | (7 | )% | |||||
Income from continuing operations | $ | 598 | $ | 665 | $ | (67 | ) | (10 | )% | |||||
Net cash provided by operating activities - continuing operations | $ | 563 | $ | 545 | $ | 18 | 3 | % | ||||||
Total bookings | $ | 3,287 | $ | 2,540 | $ | 747 | 29 | % | ||||||
Subscription and maintenance bookings | $ | 2,730 | $ | 2,054 | $ | 676 | 33 | % | ||||||
Weighted average subscription and maintenance license agreement duration in years | 4.00 | 3.32 | 0.68 | 20 | % |
(1) | Information presented excludes the results of our discontinued operations. |
December 31, 2015 | March 31, 2015 | Change From Year End | December 31, 2014 | Change From Prior Year Quarter | |||||||||||||||
(in millions) | |||||||||||||||||||
Cash and cash equivalents | $ | 2,353 | $ | 2,804 | $ | (451 | ) | $ | 2,683 | $ | (330 | ) | |||||||
Total debt | $ | 1,964 | $ | 1,263 | $ | 701 | $ | 1,260 | $ | 704 | |||||||||
Total expected future cash collections from committed contracts (1) (2) | $ | 4,768 | $ | 4,205 | $ | 563 | $ | 4,601 | $ | 167 | |||||||||
Total revenue backlog (1) (2) | $ | 6,800 | $ | 6,530 | $ | 270 | $ | 6,685 | $ | 115 | |||||||||
Total current revenue backlog (1) (2) | $ | 3,030 | $ | 3,141 | $ | (111 | ) | $ | 3,189 | $ | (159 | ) |
(1) | Information presented excludes the results of our discontinued operations. |
(2) | Refer to the discussion in the “Liquidity and Capital Resources” section of this MD&A for additional information on expected future cash collections from committed contracts, billing backlog and revenue backlog. |
Third Quarter Comparison Fiscal 2016 Versus Fiscal 2015 | ||||||||||||||||||||
Dollar Change | Percentage Change | Percentage of Total Revenue | ||||||||||||||||||
2016 (1) | 2015 (1) | 2016 / 2015 | 2016 / 2015 | 2016 | 2015 | |||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Subscription and maintenance | $ | 828 | $ | 892 | $ | (64 | ) | (7 | )% | 80 | % | 82 | % | |||||||
Professional services | 82 | 90 | (8 | ) | (9 | ) | 8 | 8 | ||||||||||||
Software fees and other | 124 | 109 | 15 | 14 | 12 | 10 | ||||||||||||||
Total revenue | $ | 1,034 | $ | 1,091 | $ | (57 | ) | (5 | )% | 100 | % | 100 | % | |||||||
Expenses: | ||||||||||||||||||||
Costs of licensing and maintenance | $ | 73 | $ | 74 | $ | (1 | ) | (1 | )% | 7 | % | 7 | % | |||||||
Cost of professional services | 75 | 84 | (9 | ) | (11 | ) | 7 | 8 | ||||||||||||
Amortization of capitalized software costs | 65 | 62 | 3 | 5 | 6 | 6 | ||||||||||||||
Selling and marketing | 277 | 283 | (6 | ) | (2 | ) | 27 | 26 | ||||||||||||
General and administrative | 90 | 90 | — | — | 9 | 8 | ||||||||||||||
Product development and enhancements | 133 | 143 | (10 | ) | (7 | ) | 13 | 13 | ||||||||||||
Depreciation and amortization of other intangible assets | 27 | 31 | (4 | ) | (13 | ) | 3 | 3 | ||||||||||||
Other expenses, net | 1 | 6 | (5 | ) | (83 | ) | — | 1 | ||||||||||||
Total expenses before interest and income taxes | $ | 741 | $ | 773 | $ | (32 | ) | (4 | )% | 72 | % | 71 | % | |||||||
Income from continuing operations before interest and income taxes | $ | 293 | $ | 318 | $ | (25 | ) | (8 | )% | 28 | % | 29 | % | |||||||
Interest expense, net | 15 | 12 | 3 | 25 | 1 | 1 | ||||||||||||||
Income from continuing operations before income taxes | $ | 278 | $ | 306 | $ | (28 | ) | (9 | )% | 27 | % | 28 | % | |||||||
Income tax expense | 59 | 88 | (29 | ) | (33 | ) | 6 | 8 | ||||||||||||
Income from continuing operations | $ | 219 | $ | 218 | $ | 1 | — | % | 21 | % | 20 | % |
(1) | Information presented excludes the results of our discontinued operations. |
First Nine Months Comparison Fiscal 2016 Versus Fiscal 2015 | ||||||||||||||||||||
Dollar Change | Percentage Change | Percentage of Total Revenue | ||||||||||||||||||
2016 (1) | 2015 (1) | 2016 / 2015 | 2016 / 2015 | 2016 | 2015 | |||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Subscription and maintenance | $ | 2,496 | $ | 2,709 | $ | (213 | ) | (8 | )% | 83 | % | 84 | % | |||||||
Professional services | 244 | 268 | (24 | ) | (9 | ) | 8 | 8 | ||||||||||||
Software fees and other | 276 | 262 | 14 | 5 | 9 | 8 | ||||||||||||||
Total revenue | $ | 3,016 | $ | 3,239 | $ | (223 | ) | (7 | )% | 100 | % | 100 | % | |||||||
Expenses: | ||||||||||||||||||||
Costs of licensing and maintenance | $ | 209 | $ | 217 | $ | (8 | ) | (4 | )% | 7 | % | 7 | % | |||||||
Cost of professional services | 224 | 253 | (29 | ) | (11 | ) | 7 | 8 | ||||||||||||
Amortization of capitalized software costs | 192 | 204 | (12 | ) | (6 | ) | 6 | 6 | ||||||||||||
Selling and marketing | 751 | 782 | (31 | ) | (4 | ) | 25 | 24 | ||||||||||||
General and administrative | 279 | 269 | 10 | 4 | 9 | 8 | ||||||||||||||
Product development and enhancements | 420 | 443 | (23 | ) | (5 | ) | 14 | 14 | ||||||||||||
Depreciation and amortization of other intangible assets | 83 | 99 | (16 | ) | (16 | ) | 3 | 3 | ||||||||||||
Other expenses, net | 2 | 21 | (19 | ) | (90 | ) | — | 1 | ||||||||||||
Total expenses before interest and income taxes | $ | 2,160 | $ | 2,288 | $ | (128 | ) | (6 | )% | 72 | % | 71 | % | |||||||
Income from continuing operations before interest and income taxes | $ | 856 | $ | 951 | $ | (95 | ) | (10 | )% | 28 | % | 29 | % | |||||||
Interest expense, net | 36 | 38 | (2 | ) | (5 | ) | 1 | 1 | ||||||||||||
Income from continuing operations before income taxes | $ | 820 | $ | 913 | $ | (93 | ) | (10 | )% | 27 | % | 28 | % | |||||||
Income tax expense | 222 | 248 | (26 | ) | (10 | ) | 7 | 8 | ||||||||||||
Income from continuing operations | $ | 598 | $ | 665 | $ | (67 | ) | (10 | )% | 20 | % | 21 | % |
(1) | Information presented excludes the results of our discontinued operations. |
Third Quarter Comparison Fiscal 2016 Versus Fiscal 2015 | ||||||||||||||||||||
2016 (1) | Percentage of Total Revenue | 2015 (1) | Percentage of Total Revenue | Dollar Change | Percentage Change | |||||||||||||||
(dollars in millions) | ||||||||||||||||||||
United States | $ | 671 | 65 | % | $ | 668 | 61 | % | $ | 3 | — | % | ||||||||
International | 363 | 35 | 423 | 39 | (60 | ) | (14 | ) | ||||||||||||
Total Revenue | $ | 1,034 | 100 | % | $ | 1,091 | 100 | % | $ | (57 | ) | (5 | )% |
(1) | Information presented excludes the results of our discontinued operations. |
First Nine Months Comparison Fiscal 2016 Versus Fiscal 2015 | ||||||||||||||||||||
2016 (1) | Percentage of Total Revenue | 2015 (1) | Percentage of Total Revenue | Dollar Change | Percentage Change | |||||||||||||||
(dollars in millions) | ||||||||||||||||||||
United States | $ | 1,935 | 64 | % | $ | 1,967 | 61 | % | $ | (32 | ) | (2 | )% | |||||||
International | 1,081 | 36 | 1,272 | 39 | (191 | ) | (15 | ) | ||||||||||||
Total Revenue | $ | 3,016 | 100 | % | $ | 3,239 | 100 | % | $ | (223 | ) | (7 | )% |
(1) | Information presented excludes the results of our discontinued operations. |
Third Quarter Fiscal 2016 | Third Quarter Fiscal 2015 | ||||||
(dollars in millions) | |||||||
Fiscal 2014 Plan | $ | — | $ | (1 | ) | ||
Legal settlements | 1 | 11 | |||||
Gains from foreign exchange derivative contracts | (3 | ) | (10 | ) | |||
Losses from foreign exchange rate fluctuations | 4 | 3 | |||||
Other miscellaneous items | (1 | ) | 3 | ||||
Total | $ | 1 | $ | 6 |
First Nine Months Fiscal 2016 | First Nine Months Fiscal 2015 | ||||||
(dollars in millions) | |||||||
Fiscal 2014 Plan | $ | — | $ | 20 | |||
Legal settlements | (14 | ) | 13 | ||||
Gains from foreign exchange derivative contracts | — | (22 | ) | ||||
Losses from foreign exchange rate fluctuations | 16 | 8 | |||||
Other miscellaneous items | — | 2 | |||||
Total | $ | 2 | $ | 21 |
Mainframe Solutions | Third Quarter Fiscal 2016 (1) | Third Quarter Fiscal 2015 (1) | |||||
(dollars in millions) | |||||||
Revenue | $ | 554 | $ | 596 | |||
Expenses | 218 | 248 | |||||
Segment profit | $ | 336 | $ | 348 | |||
Segment operating margin | 61 | % | 58 | % |
(1) | Information presented excludes the results of our discontinued operations. |
Mainframe Solutions | First Nine Months Fiscal 2016 (1) | First Nine Months Fiscal 2015 (1) | |||||
(dollars in millions) | |||||||
Revenue | $ | 1,668 | $ | 1,820 | |||
Expenses | 641 | 717 | |||||
Segment profit | $ | 1,027 | $ | 1,103 | |||
Segment operating margin | 62 | % | 61 | % |
(1) | Information presented excludes the results of our discontinued operations. |
Enterprise Solutions | Third Quarter Fiscal 2016 (1) | Third Quarter Fiscal 2015 (1) | |||||
(dollars in millions) | |||||||
Revenue | $ | 398 | $ | 405 | |||
Expenses | 349 | 347 | |||||
Segment profit | $ | 49 | $ | 58 | |||
Segment operating margin | 12 | % | 14 | % |
(1) | Information presented excludes the results of our discontinued operations. |
Enterprise Solutions | First Nine Months Fiscal 2016 (1) | First Nine Months Fiscal 2015 (1) | |||||
(dollars in millions) | |||||||
Revenue | $ | 1,104 | $ | 1,151 | |||
Expenses | 996 | 999 | |||||
Segment profit | $ | 108 | $ | 152 | |||
Segment operating margin | 10 | % | 13 | % |
(1) | Information presented excludes the results of our discontinued operations. |
Services | Third Quarter Fiscal 2016 | Third Quarter Fiscal 2015 | |||||
(dollars in millions) | |||||||
Revenue | $ | 82 | $ | 90 | |||
Expenses | 77 | 85 | |||||
Segment profit | $ | 5 | $ | 5 | |||
Segment operating margin | 6 | % | 6 | % |
Services | First Nine Months Fiscal 2016 | First Nine Months Fiscal 2015 | |||||
(dollars in millions) | |||||||
Revenue | $ | 244 | $ | 268 | |||
Expenses | 227 | 256 | |||||
Segment profit | $ | 17 | $ | 12 | |||
Segment operating margin | 7 | % | 4 | % |
• | Renewal Bookings: For the third quarter of fiscal 2016, renewal bookings increased by a percentage in the low twenties compared with the third quarter of fiscal 2015 primarily due to an increase in Mainframe Solutions renewals. These renewals increased primarily due to the timing of several contracts renewing prior to their scheduled expiration dates in the fourth quarter of fiscal 2016 and during fiscal 2017 and an increase weighted average subscription and maintenance license agreement duration in years (contract duration). In the third quarter of fiscal 2016, contracts renewed prior to their scheduled expiration dates primarily due to customer requests relating to additional capacity. We believe this represents a positive reflection on the current mainframe cycle. In any given quarter, renewals can close before their scheduled renewal date for a number of reasons, including customer preference, customer needs for additional products or capacity, or our preference. The level of contracts closed prior to scheduled expiration dates and the reasons for such closings can vary from quarter to quarter. Excluding the unfavorable effect of foreign exchange, renewal bookings for the third quarter of fiscal 2016 would have increased by approximately 30% compared with the third quarter of fiscal 2015. |
• | Renewal Yield: For the third quarter of fiscal 2016, our percentage renewal yield was in the mid-80 percentage range. This was primarily due to a large North American financial services customer transitioning to an application that required fewer of our products to support their business. Excluding this one large customer that elected not to renew, our percentage renewal yield would have been in the low-90 percentage range. |
• | License Agreements over $10 million: During the third quarter of fiscal 2016, we executed a total of 18 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $593 million. During the third quarter of fiscal 2015, we executed a total of 18 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $394 million. |
• | Annualized Subscription and Maintenance Bookings and Weighted Average Subscription and Maintenance License Agreement Duration in Years: Annualized subscription and maintenance bookings increased from $267 million in the third quarter of fiscal 2015 to $269 million in the third quarter of fiscal 2016. The weighted average subscription and maintenance license agreement duration in years increased from 3.29 in the third quarter of fiscal 2015 to 3.76 in the third quarter of fiscal 2016. This increase was primarily a result of the contract lengths of the larger deals entered into during the third quarter of fiscal 2016. Although each contract is subject to terms negotiated by the respective parties, we do not expect the weighted average subscription and maintenance agreement duration in years to change materially from historical levels for end-user contracts. |
• | Mainframe Solutions New Product Sales: For the third quarter of fiscal 2016, Mainframe Solutions new product sales, including capacity, increased by a percentage in the high single digits compared with the year-ago period primarily due to new sales made in connection with the increase in renewals. Excluding the unfavorable effect of foreign exchange, Mainframe Solutions new product sales, including capacity, increased by a percentage in mid-teens compared with the year-ago period. Overall, we expect our mainframe solutions revenue to decline by a percentage in the low single digits over the medium term, which we believe is in line with the mainframe market. |
• | Enterprise Solutions New Product Sales: For the third quarter of fiscal 2016, Enterprise Solutions new product sales increased by a percentage in the low single digits compared with the year-ago period due to new product sales that are associated with our second quarter fiscal 2016 acquisitions, which contributed mid-teens growth in the quarter. Excluding the unfavorable effect of foreign exchange, Enterprise Solutions new product sales increased by a percentage in the high single digits. |
• | Renewal Bookings: |
• | License Agreements over $10 million: During the first nine months of fiscal 2016, we executed a total of 35 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $1,694 million. During the first nine months of fiscal 2015, we executed a total of 32 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $941 million. |
• | Annualized Subscription and Maintenance Bookings and Weighted Average Subscription and Maintenance License Agreement Duration in Years: Annualized subscription and maintenance bookings increased from $619 million in the first nine months of fiscal 2015 to $683 million in the first nine months of fiscal 2016. The weighted average subscription and maintenance license agreement duration in years increased from 3.32 in the first nine months of fiscal 2015 to 4.00 in the first nine months of fiscal 2016. This increase was primarily a result of the aforementioned renewal with a large system integrator which had a term greater than 5 years. |
• | Full Year 2016 Outlook: As a result of the terms of the aforementioned large system integrator renewal and our third quarter renewals, we now expect our fiscal 2016 renewal portfolio to increase by a percentage in the mid-twenties compared with fiscal 2015. Excluding the aforementioned large system integrator renewal, we currently expect our fiscal 2016 renewal portfolio to be generally consistent or increase by a percentage in the low single digits. Excluding the unfavorable effect of foreign exchange only, we currently expect our fiscal 2016 renewal portfolio to increase by approximately thirty percent. Excluding both the aforementioned large system integrator renewal and the unfavorable effect of foreign exchange, we currently expect our fiscal 2016 renewal portfolio to increase by a percentage in the mid to high single digits. |
• | Mainframe Solutions New Product Sales: For the first nine months of fiscal 2016, Mainframe Solutions new product sales, including capacity, increased by a percentage in the mid-twenties compared with the year-ago period primarily due to the aforementioned renewal with a large system integrator and new product sales in connection with other renewals. Excluding the unfavorable effect of foreign exchange, Mainframe Solutions new product sales increased by a percentage in the mid-thirties. |
• | Enterprise Solutions New Product Sales: For the first nine months of fiscal 2016, Enterprise Solutions new product sales increased by a percentage in the mid-single digits compared with the year-ago period primarily as a result of Enterprise Solutions new product sales associated with our second quarter fiscal 2016 acquisitions. Excluding the unfavorable effect of foreign exchange, Enterprise Solutions new product sales increased by a percentage in the low teens. Excluding our second quarter fiscal 2016 acquisitions, Enterprise Solutions new product sales decreased by a percentage in the low single digits for the first nine months of fiscal 2016 compared with the year-ago period. Excluding both the unfavorable effect of foreign exchange and second quarter fiscal 2016 acquisitions, Enterprise Solutions new product sales increased by a percentage in the mid-single digits for the first nine months of fiscal 2016 compared with the year-ago period. |
(in millions) | December 31, 2015 (1) | March 31, 2015 (1) | December 31, 2014 (1) | ||||||||
Billings backlog: | |||||||||||
Amounts to be billed – current | $ | 1,880 | $ | 1,867 | $ | 2,044 | |||||
Amounts to be billed – noncurrent | 2,270 | 1,686 | 1,888 | ||||||||
Total billings backlog | $ | 4,150 | $ | 3,553 | $ | 3,932 | |||||
Revenue backlog: | |||||||||||
Revenue to be recognized within the next 12 months – current | $ | 3,030 | $ | 3,141 | $ | 3,189 | |||||
Revenue to be recognized beyond the next 12 months – noncurrent | 3,770 | 3,389 | 3,496 | ||||||||
Total revenue backlog | $ | 6,800 | $ | 6,530 | $ | 6,685 | |||||
Deferred revenue (billed or collected) | $ | 2,650 | $ | 2,977 | $ | 2,753 | |||||
Total billings backlog | 4,150 | 3,553 | 3,932 | ||||||||
Total revenue backlog | $ | 6,800 | $ | 6,530 | $ | 6,685 |
(1) | Information presented excludes the results of our discontinued operations. |
(in millions) | December 31, 2015 (1) | March 31, 2015 (1) | December 31, 2014 (1) | ||||||||
Expected future cash collections: | |||||||||||
Total billings backlog | $ | 4,150 | $ | 3,553 | $ | 3,932 | |||||
Trade accounts receivable, net | 618 | 652 | 669 | ||||||||
Total expected future cash collections | $ | 4,768 | $ | 4,205 | $ | 4,601 |
(1) | Information presented excludes the results of our discontinued operations. |
Third Quarter of Fiscal | Change | ||||||||||
2016 (1) | 2015 (1) | 2016 / 2015 | |||||||||
(in millions) | |||||||||||
Cash collections from billings (2) | $ | 1,051 | $ | 1,072 | $ | (21 | ) | ||||
Vendor disbursements and payroll (2) | (628 | ) | (687 | ) | 59 | ||||||
Income tax payments, net | (68 | ) | (57 | ) | (11 | ) | |||||
Other disbursements, net (3) | (23 | ) | (15 | ) | (8 | ) | |||||
Net cash provided by operating activities - continuing operations | $ | 332 | $ | 313 | $ | 19 |
(1) | Information presented excludes the results of our discontinued operations. |
(2) | Amounts include value added taxes and sales taxes. |
(3) | For the third quarter of fiscal 2016, amount includes payments associated with the Fiscal 2014 Plan of $1 million, interest, prior period restructuring plans and miscellaneous receipts and disbursements. For the third quarter of fiscal 2015, amount includes payments associated with the Fiscal 2014 Plan of $9 million, interest, prior period restructuring plans and miscellaneous receipts and disbursements. |
First Nine Months of Fiscal | Change | ||||||||||
2016 (1) | 2015 (1) | 2016 / 2015 | |||||||||
(in millions) | |||||||||||
Cash collections from billings (2) | $ | 2,884 | $ | 3,105 | $ | (221 | ) | ||||
Vendor disbursements and payroll (2) | (2,069 | ) | (2,224 | ) | 155 | ||||||
Income tax payments, net | (199 | ) | (238 | ) | 39 | ||||||
Other disbursements, net (3) | (53 | ) | (98 | ) | 45 | ||||||
Net cash provided by operating activities - continuing operations | $ | 563 | $ | 545 | $ | 18 |
(1) | Information presented excludes the results of our discontinued operations. |
(2) | Amounts include value added taxes and sales taxes. |
(3) | For the first nine months of fiscal 2016, amount includes payments associated with the Fiscal 2014 Plan of $5 million, interest, prior period restructuring plans and miscellaneous receipts and disbursements. For the first nine months of fiscal 2015, amount includes payments associated with the Fiscal 2014 Plan of $55 million, interest, prior period restructuring plans and miscellaneous receipts and disbursements. |
December 31, 2015 | March 31, 2015 | ||||||
(in millions) | |||||||
Revolving credit facility | $ | — | $ | — | |||
5.375% Senior Notes due December 2019 | 750 | 750 | |||||
3.600% Senior Notes due August 2020 | 400 | — | |||||
2.875% Senior Notes due August 2018 | 250 | 250 | |||||
4.500% Senior Notes due August 2023 | 250 | 250 | |||||
Term Loan due April 20, 2022 | 300 | — | |||||
Other indebtedness, primarily capital leases | 18 | 17 | |||||
Unamortized discount for Senior Notes | (4 | ) | (4 | ) | |||
Total debt outstanding | $ | 1,964 | $ | 1,263 | |||
Less the current portion | (8 | ) | (10 | ) | |||
Total long-term debt portion | $ | 1,956 | $ | 1,253 |
Nine Months Ended December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Total borrowings outstanding at beginning of period (1) | $ | 138 | $ | 139 | |||
Borrowings | 3,237 | 4,226 | |||||
Repayments | (3,230 | ) | (4,145 | ) | |||
Foreign exchange effect | (6 | ) | (82 | ) | |||
Total borrowings outstanding at end of period (1) | $ | 139 | $ | 138 |
(1) | Included in “Accrued expenses and other current liabilities” in our Condensed Consolidated Balance Sheets. |
• | Enable our sales force to accelerate growth of new product sales (at levels sufficient to offset any decline in revenue in our Mainframe Solutions segment): |
▪ | in our Platinum customer accounts where we already have strong relationships; |
▪ | in our Named customer accounts where a competitor already has an established relationship; and |
▪ | in our Growth customer accounts where we currently do not have a strong presence and where we may have a dependence on unfamiliar distribution routes and offerings of a type not previously provided by us; |
• | Improve CA Technologies brand, technology and innovation awareness in the marketplace; |
• | Ensure our offerings for cloud computing, application development and IT operations (DevOps), SaaS, and mobile device management, as well as other new offerings, address the needs of a rapidly changing market, while not adversely affecting the demand for our traditional products or our profitability to an extent greater than anticipated; and |
• | Effectively manage the strategic shift in our business model to develop more easily installed software, provide additional SaaS offerings and refocus our professional services and education engagements on those engagements that are connected to new product sales, without affecting our performance to an extent greater than anticipated. |
• | Foreign exchange rates; |
• | Local economic conditions; |
• | Political stability and acts of terrorism; |
• | Workforce reorganizations in various locations, including global reorganizations of sales, research and development, technical services, finance, human resources and facilities functions; |
• | Effectively staffing key managerial and technical positions; |
• | Successfully localizing software products for a significant number of international markets; |
• | Restrictive employment regulation; |
• | Trade restrictions such as tariffs, duties, taxes or other controls; |
• | International intellectual property laws, which may be more restrictive or may offer lower levels of protection than U.S. law; |
• | Developing and executing an effective go-to-market strategy in various locations; and |
• | Compliance by us and our partners (including unaffiliated third-party partners) with differing, changing and potentially inconsistent local laws, regulations and interpretations in multiple international jurisdictions, as well as compliance with U.S. laws and regulations where applicable in these international locations, such as anti-corruption, anti-money laundering, export control and data privacy laws and regulations, including the U.S. Foreign Corrupt Practices Act of 1977, the UK Bribery Act of 2010, trade controls and sanctions administered by the U.S. Office of Foreign Assets Control and similar laws and regulations in other jurisdictions. |
• | We may find that the acquired company or assets do not improve our financial and strategic position as planned; |
• | We may have difficulty integrating the operations, facilities, personnel and commission plans of the acquired business; |
• | We may have difficulty forecasting or reporting results subsequent to acquisitions; |
• | 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; |
• | We may have difficulty incorporating the acquired technologies or products into our existing product lines; |
• | We may have product liability, customer liability or intellectual property liability associated with the sale of the acquired company’s products; |
• | Our ongoing business may be disrupted by transition or integration issues and our management’s attention may be diverted from other business initiatives; |
• | We may be unable to obtain timely approvals from governmental authorities under applicable competition and antitrust laws; |
• | We may have difficulty maintaining uniform standards, controls, procedures and policies; |
• | Our relationships with current and new employees, customers and distributors could be impaired; |
• | An acquisition may result in increased litigation risk, including litigation from terminated employees or third parties; |
• | 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 |
• | 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. |
• | Loss of or delay in revenue and loss of market share; |
• | Loss of customers, including the inability to obtain repeat business with existing key customers; |
• | Damage to our reputation; |
• | Failure to achieve market acceptance; |
• | Diversion of development resources; |
• | Remediation efforts that may be required; |
• | Increased service and warranty costs; |
• | Legal actions by customers or government authorities against us that could, whether or not successful, be costly, distracting and time-consuming; |
• | Increased insurance costs; and |
• | Failure to successfully complete service engagements for product installations and implementations. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
(in thousands, except average price paid per share) | ||||||||||||||
October 1, 2015 - October 31, 2015 | — | $ | — | — | $ | 670,185 | ||||||||
November 1, 2015 - November 30, 2015 | 22,000 | $ | 26.91 | (1) | 22,000 | $ | 750,000 | |||||||
December 1, 2015 - December 31, 2015 | — | $ | — | — | $ | 750,000 | ||||||||
Total | 22,000 | 22,000 |
(1) | Includes transaction costs relating to the November 2015 share repurchase arrangement. |
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 | 3/9/06 | ||||||
3.2 | By-Laws of the Company, as amended. | 10-K | 3.2 | 5/8/15 | ||||||
4.1 | Stockholder Protection Rights Agreement, dated as of November 30, 2015 (the “Rights Agreement”), between CA, Inc. (the “Company”) and Computershare Trust Company, N.A., 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, Class A of the Company. | 8-K | 4.1 | 12/1/15 | ||||||
10.1 | Share Repurchase Agreement, dated November 17, 2015 by and between CA, Inc. and Careal Holding AG. | 8-K | 10.1 | 11/18/15 | ||||||
10.2 | Term Loan Agreement dated October 20, 2015. | 10-Q | 10.3 | 10/22/15 | ||||||
12 | Statement of Ratios of Earnings to Fixed Charges. | X | ||||||||
15 | Accountants’ Acknowledgment Letter. | X | ||||||||
31.1 | Certification of the Principal Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||
31.2 | Certification of the Principal Financial Officer 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 Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): | X | ||||||||
(i) Condensed Consolidated Balance Sheets - December 31, 2015 (Unaudited) and March 31, 2015. | ||||||||||
(ii) Unaudited Condensed Consolidated Statements of Operations - Three and Nine Months Ended December 31, 2015 and 2014. | ||||||||||
(iii) Unaudited Condensed Consolidated Statements of Comprehensive Income - Three and Nine Months Ended December 31, 2015 and 2014. | ||||||||||
(iv) Unaudited Condensed Consolidated Statements of Cash Flows - Nine Months Ended December 31, 2015 and 2014. | ||||||||||
(v) Notes to Condensed Consolidated Financial Statements - December 31, 2015. |
† | Furnished herewith |
CA, INC. | |
By: | /s/ Michael P. Gregoire |
Michael P. Gregoire | |
Chief Executive Officer | |
By: | /s/ Richard J. Beckert |
Richard J. Beckert | |
Executive Vice President and Chief Financial Officer |
Fiscal Year | Nine Months Ended | |||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | December 31, 2015 | |||||||||||||||||||
Earnings available for fixed charges: | ||||||||||||||||||||||||
Earnings from continuing operations before income taxes, minority interest and discontinued operations | $ | 1,139 | $ | 1,291 | $ | 1,260 | $ | 1,016 | $ | 1,115 | $ | 820 | ||||||||||||
Add: Fixed charges | 121 | 115 | 113 | 123 | 125 | 79 | ||||||||||||||||||
Total earnings available for fixed charges | $ | 1,260 | $ | 1,406 | $ | 1,373 | $ | 1,139 | $ | 1,240 | $ | 899 | ||||||||||||
Fixed charges: | ||||||||||||||||||||||||
Interest expense (1) | $ | 68 | $ | 64 | $ | 64 | $ | 75 | $ | 77 | $ | 59 | ||||||||||||
Interest portion of rental expense | 53 | 51 | 49 | 48 | 48 | 20 | ||||||||||||||||||
Total fixed charges | $ | 121 | $ | 115 | $ | 113 | $ | 123 | $ | 125 | $ | 79 | ||||||||||||
RATIOS OF EARNINGS TO FIXED CHARGES | 10.41 | 12.23 | 12.15 | 9.26 | 9.92 | 11.38 | ||||||||||||||||||
Deficiency of earnings to fixed charges | n/a | n/a | n/a | n/a | n/a | n/a |
(1) | Includes amortization of discount related to indebtedness |
1. | I have reviewed the Quarterly Report on Form 10-Q of CA, Inc. for its most recent fiscal quarter; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Date: | January 27, 2016 | /s/ Michael P. Gregoire | |||||
Michael P. Gregoire | |||||||
Chief Executive Officer | |||||||
CA, Inc. |
1. | I have reviewed the Quarterly Report on Form 10-Q of CA, Inc. for its most recent fiscal quarter; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Date: | January 27, 2016 | /s/ Richard J. Beckert | |||||
Richard J. Beckert | |||||||
Executive Vice President and Chief Financial Officer | |||||||
CA, Inc. |
/s/ Michael P. Gregoire |
Michael P. Gregoire |
Chief Executive Officer |
January 27, 2016 |
/s/ Richard J. Beckert |
Richard J. Beckert |
Executive Vice President and Chief Financial Officer |
January 27, 2016 |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Jan. 20, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CA, INC. | |
Entity Central Index Key | 0000356028 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 416,762,791 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2015 |
Mar. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 846 | $ 812 |
Preferred stock, No par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, Shares issued | 0 | 0 |
Preferred stock, Shares outstanding | 0 | 0 |
Common stock, Par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, Shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, Shares issued | 589,695,081 | 589,695,081 |
Common stock, Shares outstanding | 412,442,259 | 435,502,730 |
Treasury stock, Shares | 177,252,822 | 154,192,351 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 223 | $ 222 | $ 609 | $ 695 |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (30) | (78) | (51) | (162) |
Total other comprehensive loss | (30) | (78) | (51) | (162) |
Comprehensive income | $ 193 | $ 144 | $ 558 | $ 533 |
Accounting Policies |
9 Months Ended |
---|---|
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | NOTE A – ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements of CA, Inc. (Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, for interim financial information and with the instructions to Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2015 (2015 Form 10-K). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, these estimates may ultimately differ from actual results. Operating results for the three and nine months ended December 31, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2016. Divestitures: In the second quarter of fiscal year 2015, the Company sold its CA arcserve data protection solution assets (arcserve). In the fourth quarter of fiscal year 2014, the Company identified its CA ERwin Data Modeling solution assets (ERwin) as available for sale. The results of operations associated with these businesses have been presented as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. The effects of the discontinued operations were immaterial to the Company’s Condensed Consolidated Balance Sheets at December 31, 2015 and March 31, 2015. See Note C, “Divestitures,” for additional information. Cash and Cash Equivalents: The Company’s cash and cash equivalents are held in numerous locations throughout the world, with approximately 84% being held by the Company’s foreign subsidiaries outside the United States at December 31, 2015. New Accounting Pronouncements: In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In July 2015, the FASB issued a one-year deferral of the effective date of the new revenue recognition standard. The new standard will be effective for the Company's first quarter of fiscal year 2019 and early application for fiscal year 2018 is permitted. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. ASU 2014-09 is expected to have a significant impact on the Company’s revenue recognition policies and disclosures. The Company has not yet selected a transition method nor has it determined when it will adopt the standard and the effect of the standard on its ongoing financial reporting. In April 2015, the FASB issued Accounting Standards Update No. 2015-03 (ASU 2015-03), Simplifying the Presentation of Debt Issuance Costs (Topic 835), which changes the required presentation of debt issuance costs from an asset on the balance sheet to a deduction from the related debt liability. This guidance will be effective for the Company in its first quarter of fiscal year 2017 and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17), Balance Sheet Classification of Deferred Taxes (Topic 740), to simplify the presentation of deferred taxes in the statement of financial position. The updated guidance requires that deferred tax assets and liabilities be classified as non-current in the consolidated balance sheets. The standard will be effective for the Company’s first quarter of fiscal year 2018 and early adoption is permitted. This guidance may be applied either prospectively to all deferred tax assets and liabilities, or retrospectively to all periods presented. The Company is currently in the process of assessing the impact on its consolidated financial statements and evaluating the adoption methods. |
Acquisitions |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | NOTE B – ACQUISITIONS On July 8, 2015, the Company completed its acquisition of Rally Software Development Corp. (Rally), a provider of Agile development software and services. The acquisition of Rally broadens the Company’s solution set and capabilities to better serve customers in the application economy. Pursuant to the terms of the acquisition agreement and related tender offer, the Company acquired 100% of the outstanding shares of Rally common stock for approximately $519 million. The preliminary purchase price allocation for Rally is provided within the table below. The preliminary purchase price allocation for the Company’s other acquisitions during fiscal year 2016, including the second quarter acquisition of Xceedium, Inc. (Xceedium), is included within the “Other Fiscal Year 2016 Acquisitions” column below. The acquisition of Xceedium and the Company’s other acquisitions during fiscal year 2016 were immaterial, both individually and in the aggregate.
The excess purchase price over the estimated value of the net tangible and identifiable intangible assets was recorded to goodwill. The preliminary allocation of the purchase price to goodwill was predominantly due to synergies the Company expects to achieve through integration of the acquired technology with the Company’s existing product portfolio and the intangible assets that are not separable, such as assembled workforce and going concern. The goodwill relating to the Company’s acquisition of Rally is not expected to be deductible for tax purposes and is allocated to the Enterprise Solutions segment. The allocation of purchase price to acquired identifiable assets, including intangible assets, is preliminary because the Company has not completed its analysis of the historical tax records for Rally. The goodwill relating to the Company’s other fiscal year 2016 acquisitions is not expected to be deductible for tax purposes and is allocated to the Enterprise Solutions segment. Transaction costs for the Company’s fiscal year 2016 acquisitions, which are primarily included in “General and administrative” in the Company’s Condensed Consolidated Statements of Operations, were less than $1 million and $20 million for the three and nine months ended December 31, 2015, respectively. The pro forma effects of the Company’s fiscal year 2016 acquisitions on the Company’s revenues and results of operations during fiscal years 2016 and 2015 were considered immaterial. The Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2015 included total revenue of $38 million and $63 million, respectively, since the date of acquisition through December 31, 2015 for the Company’s fiscal year 2016 acquisitions of Rally and Xceedium. The Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2015 included net loss of $22 million and $35 million, respectively, since the date of acquisition through December 31, 2015 for the Company’s fiscal year 2016 acquisitions of Rally and Xceedium. Revenues and results of operations since the date of acquisition for the Company’s other fiscal 2016 acquisitions were considered immaterial. The Company had approximately $5 million and $27 million of accrued acquisition-related costs at December 31, 2015 and March 31, 2015, respectively, related to purchase price amounts withheld subject to indemnification protections. |
Divestitures |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIVESTITURES | NOTE C – DIVESTITURES In the second quarter of fiscal year 2015, the Company sold arcserve for approximately $170 million and recognized a gain on disposal of approximately $20 million, including tax expense of approximately $77 million. The effective tax rate on the disposal was unfavorably affected by non-deductible goodwill of approximately $109 million. In the fourth quarter of fiscal year 2014, the Company identified ERwin as available for sale. The divestiture of arcserve and the planned divestiture of ERwin result from an effort to rationalize the Company’s product portfolio within the Enterprise Solutions segment. The income from discontinued operations relating to both ERwin and the sale of arcserve for the three and nine months ended December 31, 2015 and 2014 consisted of the following:
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Severance and Exit Costs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEVERANCE AND EXIT COSTS | NOTE D – SEVERANCE AND EXIT COSTS Fiscal Year 2015 Severance Actions: During the fourth quarter of fiscal year 2015, the Company committed to and initiated severance actions (Fiscal 2015 Severance Actions) to further improve efficiencies in its operations and align its business with strategic objectives and cost savings initiatives. These actions comprised the termination of approximately 690 employees and resulted in a charge of approximately $40 million during the fourth quarter of fiscal year 2015. The Fiscal 2015 Severance Actions were substantially completed by the first quarter of fiscal year 2016. Fiscal Year 2014 Rebalancing Plan: In fiscal year 2014, the Company’s Board of Directors (the Board) approved and committed to a rebalancing plan (Fiscal 2014 Plan) to better align its business priorities. This included a termination of approximately 1,900 employees and global facility consolidations. Costs associated with the Fiscal 2014 Plan are presented in “Other expenses, net” in the Company’s Condensed Consolidated Statements of Operations. The total amount incurred under the Fiscal 2014 Plan was approximately $188 million. Severance and facility consolidation actions under the Fiscal 2014 Plan were substantially completed by the end of fiscal year 2014. Accrued severance and exit costs and changes in the accruals during the nine months ended December 31, 2015 and 2014 were as follows:
The balance at December 31, 2015 includes a severance accrual of approximately $2 million for plans and actions prior to the Fiscal 2015 Severance Actions. The severance liabilities are included in “Accrued salaries, wages and commissions” in the Condensed Consolidated Balance Sheets. The facility exit liabilities are included in “Accrued expenses and other current liabilities” and “Other noncurrent liabilities” in the Condensed Consolidated Balance Sheets. Accretion and other includes accretion of the Company’s lease obligations related to facility exits as well as changes in the assumptions related to future sublease income. These costs are included in “General and administrative” expense in the Condensed Consolidated Statements of Operations. |
Trade Accounts Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TRADE ACCOUNTS RECEIVABLE | NOTE E – TRADE ACCOUNTS RECEIVABLE Trade accounts receivable, net represents amounts due from the Company’s customers and is presented net of allowances. These balances include revenue recognized in advance of customer billings but do not include unbilled contractual commitments executed under license agreements. The components of “Trade accounts receivable, net” were as follows:
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Goodwill, Capitalized Software and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS | NOTE F – GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at December 31, 2015 were as follows:
The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at March 31, 2015 were as follows:
Based on the capitalized software and other intangible assets recorded through December 31, 2015, the projected annual amortization expense for fiscal year 2016 and the next four fiscal years is expected to be as follows:
The Company evaluates the useful lives and recoverability of capitalized software and other intangible assets when events or changes in circumstances indicate that an impairment may exist. These evaluations require complex assumptions about key factors such as future customer demand, technology trends and the impact of those factors on the technology the Company acquires and develops for its products. Impairments or revisions to useful lives could result from the use of alternative assumptions that reflect reasonably possible outcomes related to future customer demand or technology trends for assets within the Enterprise Solutions segment. Goodwill activity by segment for the nine months ended December 31, 2015 was as follows:
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Deferred Revenue |
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Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEFERRED REVENUE | NOTE G – DEFERRED REVENUE The current and noncurrent components of “Deferred revenue (billed or collected)” at December 31, 2015 and March 31, 2015 were as follows:
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Debt |
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Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE H – DEBT Term Loan: On October 20, 2015, the Company entered into a Term Loan Agreement with Bank of America, N.A. (Term Loan Agreement). The Term Loan Agreement provides for a $300 million term loan (Term Loan) with a maturity date of April 20, 2022. From April 1, 2017 through January 1, 2021, the Term Loan Agreement will require quarterly principal amortization payments in an amount equal to 1.25%, and, commencing April 1, 2021 and thereafter, 2.50%, of the stated principal amount of the Term Loan made on the funding date of October 22, 2015. The Company may, at any time on or after October 20, 2016, prepay the outstanding principal amount of the Term Loan in whole or in part without premium or penalty. The Term Loan will bear interest at a rate dependent on the Company’s credit ratings applicable from time to time and, at the Company’s option, will be calculated according to a base rate or a Eurodollar rate, as the case may be, plus an applicable margin. Depending on the Company’s credit ratings, the applicable margin for any portion of the Term Loan accruing interest based on the base rate ranges from 0.125% to 1.000% and the applicable margin for any portion of the Term Loan accruing interest based on the Eurodollar rate ranges from 1.125% to 2.000%. At the Company’s current credit ratings, the applicable margin would be 0.500% for interest at the base rate and 1.500% for interest at the Eurodollar rate. The Term Loan Agreement provides that the Company may use the proceeds of the Term Loan for general corporate purposes of the Company and its subsidiaries, which may include, but is not limited to, share repurchases, acquisitions and the refinancing of existing indebtedness. The Term Loan Agreement also contains covenants and events of default consistent with the Company’s revolving credit facility. Senior Notes: In August 2015, the Company issued $400 million of 3.600% Senior Notes due August 2020 (3.600% Notes) for proceeds of approximately $400 million, reflecting a discount of less than $1 million. The 3.600% Notes are senior unsecured obligations that rank equally in right of payment with all of the Company’s existing and future unsecured and unsubordinated obligations and are redeemable by the Company at any time, subject to a “make-whole” premium of 30 basis points. Interest on the 3.600% Notes is payable semiannually in February and August, beginning February 2016. In the event of a change of control, each note holder will have the right to require the Company to repurchase all or any part of the holder’s 3.600% Notes in cash at a price equal to 101% of the principal amount of such 3.600% Notes plus accrued and unpaid interest, if any, to the date of repurchase. This is subject to the right of holders of record on the relevant interest payment date to receive interest due. The 3.600% Notes contain customary covenants and events of default. The maturity of the 3.600% Notes may be accelerated by holders upon certain events of default, including failure to make payments when due and failure to comply with covenants. The Company capitalized transaction costs of approximately $3 million associated with the 3.600% Notes and will amortize these costs to “Interest expense, net” in the Company's Condensed Consolidated Statements of Operations. Revolving Credit Facility: In April 2015, the Company amended its revolving credit facility to extend the termination date from June 2018 to June 2019. The maximum committed amount available under the revolving credit facility is $1 billion. The facility also provides the Company with an option to increase the available credit by an amount up to $500 million. This option is subject to certain conditions and the agreement of the facility lenders. The Company capitalized transaction costs of less than $1 million associated with the April 2015 amendment of the revolving credit facility. These fees are being amortized to “Interest expense, net” in the Company’s Condensed Consolidated Statements of Operations. In July 2015 and in connection with the acquisition of Rally, the Company borrowed $400 million under its revolving credit facility. The interest rate applicable to the Company at the time of borrowing under the revolving credit facility was approximately 1.19%. In August 2015, the Company repaid the $400 million borrowing under its revolving credit facility with proceeds received from the Company’s issuance of the 3.600% Notes described above. Interest expense in connection with the borrowing under the revolving credit facility was less than $1 million for the nine months ended December 31, 2015. At December 31, 2015 and March 31, 2015, there were no outstanding borrowings under the revolving credit facility. For additional information concerning the Company’s debt obligations, refer to the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s 2015 Form 10-K. |
Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES | NOTE I – DERIVATIVES The Company is exposed to financial market risks arising from changes in interest rates and foreign exchange rates. Changes in interest rates could affect the Company’s monetary assets and liabilities, and foreign exchange rate changes could affect the Company’s foreign currency denominated monetary assets and liabilities and forecasted transactions. The Company enters into derivative contracts with the intent of mitigating a portion of these risks. Interest Rate Swaps: At December 31, 2015 and March 31, 2015, the Company had no interest rate swap derivatives outstanding. Foreign Currency Contracts: The Company enters into foreign currency option and forward contracts to manage foreign currency risks. The Company has not designated its foreign exchange derivatives as hedges. Accordingly, changes in fair value from these contracts are recorded as “Other expenses, net” in the Company’s Condensed Consolidated Statements of Operations. At December 31, 2015, foreign currency contracts outstanding consisted of purchase and sale contracts with a total gross notional value of approximately $1,128 million and durations of less than three months. The net fair value of these contracts at December 31, 2015 was a net asset of approximately $10 million, of which approximately $16 million is included in “Other current assets” and approximately $6 million is included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheet. At March 31, 2015, foreign currency contracts outstanding consisted of purchase and sale contracts with a total gross notional value of approximately $298 million and durations of less than three months. The net fair value of these contracts at March 31, 2015 was a net asset of approximately $2 million, of which approximately $5 million is included in “Other current assets” and approximately $3 million is included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheet. A summary of the effect of the interest rate and foreign exchange derivatives on the Company’s Condensed Consolidated Statements of Operations was as follows:
The Company is subject to collateral security arrangements with most of its major counterparties. These arrangements require the Company or the counterparty to post collateral when the derivative fair values exceed contractually established thresholds. The aggregate fair values of all derivative instruments under these collateralized arrangements were either in a net asset position or under the established threshold at December 31, 2015 and March 31, 2015. The Company posted no collateral at December 31, 2015 or March 31, 2015. Under these agreements, if the Company’s credit ratings had been downgraded one rating level, the Company would still not have been required to post collateral. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | NOTE J – FAIR VALUE MEASUREMENTS The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis at December 31, 2015 and March 31, 2015:
At December 31, 2015 and March 31, 2015, the Company did not have any assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The carrying values of financial instruments classified as current assets and current liabilities, such as cash and cash equivalents, short-term investments, accounts payable, accrued expenses, and short-term borrowings, approximate fair value due to the short-term maturity of the instruments. The following table presents the carrying amounts and estimated fair values of the Company’s other financial instruments that were not measured at fair value on a recurring basis at December 31, 2015 and March 31, 2015:
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Commitments and Contingencies |
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Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE K – COMMITMENTS AND CONTINGENCIES The Company, various subsidiaries, and certain current and former officers have been or, from time to time, may be named as defendants in various lawsuits and claims arising in the normal course of business. The Company may also become involved with contract issues and disputes with customers, including government customers. On March 24, 2014, the U.S. Department of Justice (DOJ) filed under seal in the United States District Court for the District of Columbia a complaint against the Company in partial intervention under the qui tam provisions of the civil False Claims Act (FCA). The underlying complaint was filed under seal by an individual plaintiff on August 24, 2009. On May 29, 2014, the case was unsealed. Both the DOJ and the individual plaintiff have filed amended complaints. The current complaints relate to government sales transactions under the Company’s General Services Administration (GSA) schedule contract, entered into in 2002 and extended until present through subsequent amendments. In sum and substance, the current complaints allege that the Company provided inaccurate commercial discounting information to the GSA during contract negotiations and that, as a result, the GSA’s contract discount was lower than it otherwise would have been. In addition, the complaints allege that the Company failed to apply the full negotiated discount in some instances and to pay sufficient rebates pursuant to the contract’s price reduction clause. In addition to FCA claims, the current complaints also assert common law causes of action. The DOJ complaint seeks an unspecified amount of damages, including treble damages and civil penalties. The complaint by the individual plaintiff alleges that the U.S. government has suffered damages in excess of $100 million and seeks an unspecified amount of damages, including treble damages and civil penalties. The Company filed motions to dismiss the current complaints. On March 31, 2015, the court issued decisions denying the Company's motion to dismiss the DOJ complaint, and granting in part and denying in part the Company's motion to dismiss the individual plaintiff's complaint. The discovery phase of the case is proceeding pursuant to the court’s scheduling orders. On October 30, 2014, the GSA Suspension and Debarment Division issued a Show Cause Letter to the Company in response to the complaints summarized above. In sum, the letter called on the Company to demonstrate why the U.S. government should continue to contract with the Company, given the litigation allegations made in these complaints. On December 19, 2014, the Company provided a detailed response to the Show Cause Letter. In July 2015, after the Company agreed to assume certain additional reporting requirements during the pendency of the litigation, the GSA Suspension and Debarment Division advised the Company that it had concluded its review and determined that the Company is a responsible contractor with which government agencies could continue to contract. The Company cannot predict the amount of damages likely to result from the litigation summarized above. Although the timing and ultimate outcome of this litigation cannot be determined, the Company believes that the material aspects of the liability theories set forth in the litigation complaints are unfounded. The Company also believes that it has meritorious defenses and intends to vigorously contest the lawsuit. Based on the Company’s experience, management believes that the damages amounts claimed in a case are not a meaningful indicator of the potential liability. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of cases. The Company believes that it has meritorious defenses in connection with its current lawsuits and material claims and disputes, and intends to vigorously contest each of them. In the opinion of the Company’s management based upon information currently available to the Company, while the outcome of these lawsuits, claims and disputes is uncertain, the likely results of these lawsuits, claims and disputes are not expected, either individually or in the aggregate, to have a material adverse effect on the Company’s financial position, results of operations or cash flows, although the effect could be material to the Company’s results of operations or cash flows for any interim reporting period. For some of these matters, the Company is unable to estimate a range of reasonably possible loss due to the stage of the matter and/or other particular circumstances of the matter. For others, a range of reasonably possible loss can be estimated. For those matters for which such a range can be estimated, the Company estimates that, in the aggregate, the range of reasonably possible loss is from zero to $35 million. This is in addition to amounts, if any, that have been accrued for those matters. The Company is obligated to indemnify its officers and directors under certain circumstances to the fullest extent permitted by Delaware law. As a part of that obligation, the Company may, from time to time, advance certain attorneys’ fees and expenses incurred by officers and directors in various lawsuits and investigations, as permitted under Delaware law. |
Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | NOTE L – STOCKHOLDERS’ EQUITY Stock Repurchases: On May 14, 2014, the Board approved a stock repurchase program that authorized the Company to acquire up to $1 billion of its common stock. In November 2015, the Company entered into and closed on an arrangement with Careal Holding AG (Careal) to repurchase 22 million shares of its common stock in a private transaction. The transaction was valued with an effective share repurchase price of $26.81 per share, which represented a 3% discount to the 10-trading day volume weighted average price of the Company’s common stock using a reference date of November 5, 2015. The Company’s payment to Careal upon closing was reduced by $0.25 per share to account for the Company’s dividend that was paid on December 8, 2015 to stockholders of record on November 19, 2015. As a result of the share repurchase and dividend payment, in total the Company paid Careal approximately $590 million during the third quarter of fiscal year 2016 in connection with the 22 million shares repurchased. The transaction was funded with U.S. cash on hand and effectively concludes CA's prior $1 billion stock repurchase program approved by the Board on May 14, 2014. Including the November 2015 share repurchase arrangement with Careal, the Company repurchased approximately 26 million shares of its common stock for approximately $707 million during the nine months ended December 31, 2015. Prior to entering into and closing on the share repurchase arrangement, Careal held approximately 28.7% of the Company’s total outstanding stock. In connection with the share repurchase arrangement, Careal transferred an additional 37 million shares of the Company’s common stock to an entity wholly owned by Martin Haefner, a 50% owner of Careal. Upon completion of the share repurchase arrangement and the share transfer described above, Careal’s and Martin Haefner’s ownership interests are approximately 16.0% and 8.9%, respectively, of the Company’s total outstanding common stock. Thus, Careal and its shareholders collectively own, directly and indirectly, approximately 24.9% of the Company’s total outstanding common stock. In connection with the share repurchase arrangement with Careal, the Company agreed that it will indemnify Careal for certain potential tax matters resulting solely from the Company’s breach of the covenant relating to the post-closing holding of the repurchased shares under this arrangement. The Company believes that the occurrence of an event that could trigger the indemnification is within its control and is remote. Therefore, the Company has not recorded a liability related to such indemnification. The maximum potential future payment under this indemnification, excluding interest and penalties, if any, is estimated to be approximately CHF 101 million (which translated to approximately $101 million at December 31, 2015). Any changes to the Company’s assessment of the probability of the occurrence of an event that could trigger the indemnification provision may result in the Company recording a liability in the future, which would impact the results of operations for that period. On November 13, 2015, the Board approved a new stock repurchase program that authorized the Company to acquire up to $750 million of its common stock, which remained fully outstanding at December 31, 2015. Accumulated Other Comprehensive Loss: Foreign currency translation losses included in “Accumulated other comprehensive loss” in the Company’s Condensed Consolidated Balance Sheets at December 31, 2015 and March 31, 2015 were approximately $469 million and $418 million, respectively. Cash Dividends: The Board declared the following dividends during the nine months ended December 31, 2015 and 2014: Nine Months Ended December 31, 2015: (in millions, except per share amounts)
Nine Months Ended December 31, 2014: (in millions, except per share amounts)
Rights Plan: Under the Stockholder Protection Rights Agreement dated November 30, 2015 (Rights Agreement), each outstanding share of the Company's common stock carries a right (Right). The Rights will trade with the common stock until the Separation Time, which is the next business day following the earlier of (i) the tenth business day (or such later day designated by resolution of the Board) after any person commences a tender or exchange offer that would result in such person (together with its affiliates and associates) becoming the beneficial owner of 20% or more of the Company’s common stock (other than Martin Haefner and Eva Maria Bucher-Haefner and their respective affiliates and associates, who are “grandfathered” under this provision so long as their aggregate ownership of common stock does not exceed 25% of the shares of the Company’s outstanding common stock) (Acquiring Person); or (ii) the date of a “Flip-in” Trigger. A “Flip-in” Trigger will occur upon the earlier of (i) a public announcement by the Company that any person has become an Acquiring Person or (ii) an Acquiring Person acquires more than 50% of the Company’s outstanding shares of common stock. On or after the Separation Time, each Right would initially entitle the holder to purchase, for $120, one one-thousandth (0.001) of a share of the Company’s participating preferred stock. The participating preferred stock would be designed so that each one one-thousandth of a share of participating preferred stock has economic and voting terms similar to those of one share of common stock. If a “Flip-in” Trigger occurs, the Rights owned by the Acquiring Person, its affiliates and associates, or transferees thereof would automatically become void and each other Right will automatically become a right to buy, for the exercise price of $120, that number of shares of the Company’s common stock (or, at the Company’s option, participating preferred stock) having a market value of twice the exercise price. The Rights may also be redeemed by the Board, at any time until a “Flip‑in” Trigger has occurred, at a redemption price of $0.001 per Right. In addition, in connection with a Qualified Offer, holders of 10% of the Company’s common stock (excluding shares held by the offeror and its affiliates and associates), upon providing proper written notice, may direct the Board to call a special meeting of shareholders for the purposes of voting on a resolution authorizing the redemption of the Rights pursuant to the provisions of the Rights Agreement. Such meeting must be held on or prior to the 90th business day following the Company’s receipt of such written notice. A Qualified Offer means an offer that, among other things, is a fully financed all-cash tender offer or an exchange offer offering common shares of the offeror or a combination thereof; is an offer with respect to which the Board has not received an inadequacy opinion from its financial advisors; is an offer that is subject only to the minimum tender condition and other usual and customary terms and conditions; is an offer that includes a commitment of the offeror that the offer will remain open for a certain prescribed period of time; is an offer that contains a minimum tender condition of at least 50%; and is an offer pursuant to which the offeror has committed to consummate a prompt second step transaction. The Rights will expire on November 30, 2018, unless earlier redeemed by the Board, provided that if the stockholders do not ratify the Rights Agreement, the Rights will expire on November 30, 2016. |
Income From Continuing Operations Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE | NOTE M – INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE Basic net income per common share excludes dilution and is calculated by dividing net income allocable to common shares by the weighted average number of common shares outstanding for the period. Diluted net income per common share is calculated by dividing net income allocable to common shares by the weighted average number of common shares, as adjusted for the potential dilutive effect of non-participating share-based awards. The following table presents basic and diluted income from continuing operations per common share information for the three and nine months ended December 31, 2015 and 2014:
For the three months ended December 31, 2015 and 2014, respectively, approximately 2 million and 1 million shares of Company common stock underlying restricted stock awards and options to purchase common stock were excluded from the calculation because their effect on income per share was anti-dilutive during the respective periods. Weighted average restricted stock awards of approximately 4 million and 5 million for the three months ended December 31, 2015 and 2014, respectively, were considered participating securities in the calculation of net income allocable to common stockholders. For the nine months ended December 31, 2015 and 2014, respectively, approximately 2 million and 1 million shares of Company common stock underlying restricted stock awards and options to purchase common stock were excluded from the calculation because their effect on income per share was anti-dilutive during the respective periods. Weighted average restricted stock awards of approximately 4 million and 4 million for the nine months ended December 31, 2015 and 2014, respectively, were considered participating securities in the calculation of net income allocable to common stockholders. |
Accounting for Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTING FOR SHARE-BASED COMPENSATION | NOTE N – ACCOUNTING FOR SHARE-BASED COMPENSATION The Company recognized share-based compensation in the following line items in the Condensed Consolidated Statements of Operations for the periods indicated:
The following table summarizes information about unrecognized share-based compensation costs at December 31, 2015:
There were no capitalized share-based compensation costs for the three and nine months ended December 31, 2015 and 2014. The value of performance share units (PSUs) is determined using the closing price of the Company’s common stock on the last trading day of the quarter until the awards are granted. Compensation costs for the PSUs are amortized over the requisite service periods based on the expected level of achievement of the performance targets. At the conclusion of the performance periods for the PSUs, the applicable number of shares of common stock, restricted stock awards (RSAs) or restricted stock units (RSUs) granted may vary based upon the level of achievement of the performance targets and the approval of the Company’s Compensation and Human Resources Committee (which may reduce any award for any reason in its discretion). For the nine months ended December 31, 2015 and 2014, the Company issued stock options for approximately 0.9 million shares and 0.6 million shares, respectively. The weighted average fair values and assumptions used for the options granted were as follows:
The table below summarizes the RSAs and RSUs granted under the 1-year PSUs for the Company’s fiscal year 2015 and 2014 incentive plan years. The RSAs and RSUs were granted in the first quarter of fiscal years 2016 and 2015, respectively. The RSAs and RSUs vest 34% on the date of grant and 33% on the first and second anniversaries of the grant date.
The table below summarizes the shares of common stock issued under the 3-year PSUs for the Company’s fiscal year 2013 incentive plan year in the first quarter of fiscal year 2016.
The table below summarizes the RSAs and RSUs granted under the 1-year PSUs for the Company’s fiscal year 2015 and 2014 sales retention equity programs. The RSAs and RSUs were granted in the first quarter of fiscal years 2016 and 2015, respectively. The RSAs and RSUs vest on the third anniversary of the grant date.
The table below summarizes all of the RSAs and RSUs, including grants made pursuant to the long-term incentive plans discussed above, granted during the three and nine months ended December 31, 2015 and 2014:
Employee Stock Purchase Plan: The Company maintains the 2012 Employee Stock Purchase Plan (ESPP) for all eligible employees. The ESPP offer period is semi-annual and allows participants to purchase the Company’s common stock at 95% of the closing price of the stock on the last day of the offer period. The ESPP is non-compensatory. For the six-month offer period ended June 30, 2015, the Company issued approximately 0.1 million shares under the ESPP at $27.83 per share. For the six-month offer period ended December 31, 2015, the Company issued approximately 0.1 million shares under the ESPP at $27.13 per share. As of December 31, 2015, approximately 29.2 million shares are available for future issuances under the ESPP. |
Income Taxes |
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Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE O – INCOME TAXES Income tax expense for the three and nine months ended December 31, 2015 was approximately $59 million and $222 million, respectively, compared with income tax expense for the three and nine months ended December 31, 2014 of approximately $88 million and $248 million, respectively. For the three and nine months ended December 31, 2015, the Company recognized a net discrete tax benefit of approximately $19 million and $16 million, respectively, resulting primarily from the resolution of uncertain tax positions for non-U.S. jurisdictions, refinements of tax positions taken in prior periods and the retroactive reinstatement in December 2015 of the research and development tax credit in the U.S. For the three and nine months ended December 31, 2014, the Company recognized a net discrete tax benefit of approximately $6 million and $23 million, respectively, resulting from the resolution of uncertain tax positions upon the completion of the examination of the Company's U.S. federal income tax returns for the tax years ended March 31, 2012 and 2011, the expiration of the statute of limitations relating to uncertain tax positions for a non-U.S. jurisdiction and the retroactive reinstatement in December 2014 of the research and development tax credit in the U.S. The Company’s estimated annual effective tax rate, which excludes the impact of discrete items, for the nine months ended December 31, 2015 and 2014 was 29.0% and 29.7%, respectively. Changes in tax laws, the outcome of tax audits and any other changes in potential tax liabilities may result in additional tax expense or benefit in fiscal year 2016, which are not considered in the Company’s estimated annual effective tax rate. While the Company does not currently view any such items as individually material to the results of the Company’s consolidated financial position or results of operations, the impact of certain items may yield additional tax expense or benefit in the remaining quarter of fiscal year 2016 and the Company is anticipating a fiscal year 2016 effective tax rate between 28% and 29%. |
Supplemental Statement of Cash Flows Information |
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SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION | NOTE P – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION For the nine months ended December 31, 2015 and 2014, interest payments, net were approximately $56 million and $65 million, respectively, and income taxes paid, net from continuing operations were approximately $199 million and $238 million, respectively. For the nine months ended December 31, 2015 and 2014, the excess tax benefits from share-based incentive awards included in financing activities from continuing operations were approximately $3 million and $3 million, respectively. Non-cash financing activities for the nine months ended December 31, 2015 and 2014 consisted of treasury common shares issued in connection with the following: share-based incentive awards issued under the Company’s equity compensation plans of approximately $42 million (net of approximately $28 million of income taxes withheld) and $43 million (net of approximately $27 million of income taxes withheld), respectively; discretionary stock contributions to the CA, Inc. Savings Harvest Plan of approximately $24 million and $26 million, respectively; and treasury common shares issued in connection with the Company’s Employee Stock Purchase Plan of approximately $5 million and $5 million, respectively. The Company uses a notional pooling arrangement with an international bank to help manage global liquidity. Under this pooling arrangement, the Company and its participating subsidiaries may maintain either cash deposit or borrowing positions through local currency accounts with the bank, so long as the aggregate position of the global pool is a notionally calculated net cash deposit. Because it maintains a security interest in the cash deposits and has the right to offset the cash deposits against the borrowings, the bank provides the Company and its participating subsidiaries favorable interest terms on both. The activity under this notional pooling arrangement for the nine months ended December 31, 2015 and 2014 was as follows:
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Segment Information |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | NOTE Q – SEGMENT INFORMATION The Company’s Mainframe Solutions and Enterprise Solutions segments comprise its software business organized by the nature of the Company’s software offerings and the platform on which the products operate. The Services segment comprises product implementation, consulting, customer education and customer training, including those directly related to the Mainframe Solutions and Enterprise Solutions software that the Company sells to its customers. Segment expenses do not include share-based compensation expense; amortization of purchased software; amortization of other intangible assets; certain foreign exchange derivative hedging gains and losses; charges relating to rebalancing initiatives that are large enough to require approval from the Board (i.e., costs associated with the Company’s Fiscal 2014 Plan); and other miscellaneous costs. The Company considers all costs of internally developed software as segment expense in the period the costs are incurred and as a result, the Company excludes amortization of internally developed software costs previously capitalized from segment expenses. A measure of segment assets is not currently provided to the Company’s Chief Executive Officer and has therefore not been disclosed. The Company’s segment information for the three and nine months ended December 31, 2015 and 2014 was as follows:
Reconciliation of segment profit to income from continuing operations before income taxes for the three months ended December 31, 2015:
Reconciliation of segment profit to income from continuing operations before income taxes for the nine months ended December 31, 2015:
Reconciliation of segment profit to income from continuing operations before income taxes for the three months ended December 31, 2014:
Reconciliation of segment profit to income from continuing operations before income taxes for the nine months ended December 31, 2014:
The table below summarizes the Company’s revenue from the United States and from international (i.e., non-U.S.) locations:
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Accounting Policies (Policies) |
9 Months Ended |
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Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements of CA, Inc. (Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, for interim financial information and with the instructions to Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2015 (2015 Form 10-K). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, these estimates may ultimately differ from actual results. Operating results for the three and nine months ended December 31, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2016. |
Divestitures | Divestitures: In the second quarter of fiscal year 2015, the Company sold its CA arcserve data protection solution assets (arcserve). In the fourth quarter of fiscal year 2014, the Company identified its CA ERwin Data Modeling solution assets (ERwin) as available for sale. The results of operations associated with these businesses have been presented as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. The effects of the discontinued operations were immaterial to the Company’s Condensed Consolidated Balance Sheets at December 31, 2015 and March 31, 2015. See Note C, “Divestitures,” for additional information. |
Cash and Cash Equivalents | Cash and Cash Equivalents: The Company’s cash and cash equivalents are held in numerous locations throughout the world, with approximately 84% being held by the Company’s foreign subsidiaries outside the United States at December 31, 2015. |
New Accounting Pronouncements | New Accounting Pronouncements: In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In July 2015, the FASB issued a one-year deferral of the effective date of the new revenue recognition standard. The new standard will be effective for the Company's first quarter of fiscal year 2019 and early application for fiscal year 2018 is permitted. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. ASU 2014-09 is expected to have a significant impact on the Company’s revenue recognition policies and disclosures. The Company has not yet selected a transition method nor has it determined when it will adopt the standard and the effect of the standard on its ongoing financial reporting. In April 2015, the FASB issued Accounting Standards Update No. 2015-03 (ASU 2015-03), Simplifying the Presentation of Debt Issuance Costs (Topic 835), which changes the required presentation of debt issuance costs from an asset on the balance sheet to a deduction from the related debt liability. This guidance will be effective for the Company in its first quarter of fiscal year 2017 and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17), Balance Sheet Classification of Deferred Taxes (Topic 740), to simplify the presentation of deferred taxes in the statement of financial position. The updated guidance requires that deferred tax assets and liabilities be classified as non-current in the consolidated balance sheets. The standard will be effective for the Company’s first quarter of fiscal year 2018 and early adoption is permitted. This guidance may be applied either prospectively to all deferred tax assets and liabilities, or retrospectively to all periods presented. The Company is currently in the process of assessing the impact on its consolidated financial statements and evaluating the adoption methods. |
Acquisitions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition purchase price allocation |
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Divestitures (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income from discontinued operations | The income from discontinued operations relating to both ERwin and the sale of arcserve for the three and nine months ended December 31, 2015 and 2014 consisted of the following:
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Severance and Exit Costs (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued severance and exit costs activity | Accrued severance and exit costs and changes in the accruals during the nine months ended December 31, 2015 and 2014 were as follows:
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Trade Accounts Receivable (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of trade accounts receivable, net | The components of “Trade accounts receivable, net” were as follows:
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Goodwill, Capitalized Software and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized software and other intangible assets | The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at December 31, 2015 were as follows:
The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at March 31, 2015 were as follows:
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Projected annual amortization expense | Based on the capitalized software and other intangible assets recorded through December 31, 2015, the projected annual amortization expense for fiscal year 2016 and the next four fiscal years is expected to be as follows:
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Goodwill activity by segment | Goodwill activity by segment for the nine months ended December 31, 2015 was as follows:
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Deferred Revenue (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of deferred revenue (billed or collected) | The current and noncurrent components of “Deferred revenue (billed or collected)” at December 31, 2015 and March 31, 2015 were as follows:
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Derivatives (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of interest rate and foreign exchange derivatives | A summary of the effect of the interest rate and foreign exchange derivatives on the Company’s Condensed Consolidated Statements of Operations was as follows:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis | The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis at December 31, 2015 and March 31, 2015:
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Carrying amounts and estimated fair values of other financial instruments not measured at fair value on a recurring basis | The following table presents the carrying amounts and estimated fair values of the Company’s other financial instruments that were not measured at fair value on a recurring basis at December 31, 2015 and March 31, 2015:
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Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends | Cash Dividends: The Board declared the following dividends during the nine months ended December 31, 2015 and 2014: Nine Months Ended December 31, 2015: (in millions, except per share amounts)
Nine Months Ended December 31, 2014: (in millions, except per share amounts)
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Income From Continuing Operations Per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of basic and diluted income from continuing operations per common share | The following table presents basic and diluted income from continuing operations per common share information for the three and nine months ended December 31, 2015 and 2014:
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Accounting for Share-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recognized share-based compensation | The Company recognized share-based compensation in the following line items in the Condensed Consolidated Statements of Operations for the periods indicated:
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Unrecognized share-based compensation costs | The following table summarizes information about unrecognized share-based compensation costs at December 31, 2015:
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Weighted average fair values and assumptions used for options granted | The weighted average fair values and assumptions used for the options granted were as follows:
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Summary of RSAs and RSUs granted under 1-year PSUs for Incentive Plan Years |
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Summary of shares of common stock issued under 3-year PSUs for Incentive Plan Years |
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Summary of RSAs and RSUs granted under 1-year PSUs for Sales Retention Equity Programs |
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Summary of all RSAs and RSUs granted, including grants made pursuant to long-term incentive plans | The table below summarizes all of the RSAs and RSUs, including grants made pursuant to the long-term incentive plans discussed above, granted during the three and nine months ended December 31, 2015 and 2014:
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Supplemental Statement of Cash Flows Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notional pooling arrangement | The activity under this notional pooling arrangement for the nine months ended December 31, 2015 and 2014 was as follows:
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment information |
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Reconciliation of segment profit to income from continuing operations before income taxes | Reconciliation of segment profit to income from continuing operations before income taxes for the nine months ended December 31, 2014:
Reconciliation of segment profit to income from continuing operations before income taxes for the nine months ended December 31, 2015:
Reconciliation of segment profit to income from continuing operations before income taxes for the three months ended December 31, 2015:
Reconciliation of segment profit to income from continuing operations before income taxes for the three months ended December 31, 2014:
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Revenue from the United States and international locations | The table below summarizes the Company’s revenue from the United States and from international (i.e., non-U.S.) locations:
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Accounting Policies (Details) |
Dec. 31, 2015 |
---|---|
Accounting Policies [Abstract] | |
Percentage of cash and cash equivalents held by the Company's foreign subsidiaries outside the United States | 84.00% |
Acquisitions 2 (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Jul. 08, 2015 |
Mar. 31, 2015 |
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Business Combinations [Abstract] | ||||||
Accrued acquisition-related costs related to purchase price amounts withheld to support indemnification obligations | $ 5 | $ 5 | $ 27 | |||
Business Acquisition | ||||||
Total revenue for the fiscal year 2016 acquisitions of Rally and Xceedium | 1,034 | $ 1,091 | 3,016 | $ 3,239 | ||
Net loss for the fiscal year 2016 acquisitions of Rally and Xceedium | 223 | $ 222 | 609 | $ 695 | ||
Rally | ||||||
Business Acquisition | ||||||
Percentage of outstanding shares of Rally common stock acquired | 100.00% | |||||
Purchase price for Rally | $ 519 | 519 | $ 519 | |||
Fiscal Year 2016 Acquisitions | General and Administrative | ||||||
Business Acquisition | ||||||
Transaction costs for fiscal year 2016 acquisitions | less than $1 million | |||||
Transaction costs for fiscal year 2016 acquisitions | 20 | |||||
Rally and Xceedium | ||||||
Business Acquisition | ||||||
Total revenue for the fiscal year 2016 acquisitions of Rally and Xceedium | $ 38 | 63 | ||||
Net loss for the fiscal year 2016 acquisitions of Rally and Xceedium | $ (22) | $ (35) |
Divestitures 1 (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income from discontinued operations | ||||
Income from discontinued operations, net of tax | $ 4 | $ 4 | $ 11 | $ 30 |
Discontinued Operations | ||||
Income from discontinued operations | ||||
Total revenue | 7 | 9 | 22 | 55 |
Income from operations of discontinued components, net of tax expense | 4 | 4 | 11 | 10 |
Gain on disposal of discontinued component, net of tax | 0 | 20 | ||
Income from discontinued operations, net of tax | 11 | 30 | ||
Tax expense on income from operations of discontinued components | 2 | 2 | 6 | 8 |
Discontinued Operations | Subscription and Maintenance | ||||
Income from discontinued operations | ||||
Total revenue | 5 | 7 | 16 | 38 |
Discontinued Operations | Software Fees and Other | ||||
Income from discontinued operations | ||||
Total revenue | $ 2 | $ 2 | $ 6 | $ 17 |
Divestitures 2 (Details) - Arcserve $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2014
USD ($)
| |
Disposal Groups, Including Discontinued Operations [Line Items] | |
Proceeds from sale of arcserve | $ 170 |
Gain on disposal of arcserve, net of tax | 20 |
Tax expense related to gain on disposal of arcserve | 77 |
Goodwill written off related to sale of arcserve | $ 109 |
Severance and Exit Costs 1 (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Accrued severance and exit costs activity | ||
Accrued beginning balance | $ 49 | $ 84 |
Accrued ending balance | 22 | 43 |
Severance Charges | ||
Accrued severance and exit costs activity | ||
Accrued beginning balance | 28 | 55 |
Expense | 0 | 21 |
Change in estimate | (2) | (3) |
Payments | (22) | (50) |
Accretion and other | 0 | (1) |
Accrued ending balance | 4 | 22 |
Facility Exit Charges | ||
Accrued severance and exit costs activity | ||
Accrued beginning balance | 21 | 29 |
Expense | 0 | 0 |
Change in estimate | 0 | 0 |
Payments | (3) | (7) |
Accretion and other | 0 | (1) |
Accrued ending balance | $ 18 | $ 21 |
Severance and Exit Costs 2 (Details) $ in Millions |
6 Months Ended | 11 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2015
Employee
|
Mar. 31, 2014
USD ($)
Employee
|
Dec. 31, 2015
USD ($)
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||||
Accrued balance | $ 84 | $ 22 | $ 49 | $ 43 | |
Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued balance | $ 55 | 4 | 28 | $ 22 | |
Fiscal 2015 Severance Actions | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of employees terminated | Employee | 690 | ||||
Fiscal 2015 Severance Actions | Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected cost | $ 40 | ||||
Fiscal 2014 Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of employees terminated | Employee | 1,900 | ||||
Cost incurred to date | 188 | ||||
Plans and Actions Prior to Fiscal 2015 Severance Actions | Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued balance | $ 2 |
Trade Accounts Receivable (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Mar. 31, 2015 |
---|---|---|
Components of trade accounts receivable, net | ||
Accounts receivable - billed | $ 562 | $ 591 |
Accounts receivable - unbilled | 55 | 63 |
Other receivables | 13 | 15 |
Less: Allowances | (12) | (17) |
Trade accounts receivable, net | $ 618 | $ 652 |
Goodwill, Capitalized Software and Other Intangible Assets 1 (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Mar. 31, 2015 |
---|---|---|
Capitalized software and other intangible assets | ||
Gross amortizable assets | $ 8,398 | $ 8,039 |
Less: Fully amortized assets | 6,465 | 6,250 |
Remaining amortizable assets | 1,933 | 1,789 |
Accumulated amortization on remaining amortizable assets | 1,067 | 1,058 |
Net assets | 866 | 731 |
Purchased Software Products | ||
Capitalized software and other intangible assets | ||
Gross amortizable assets | 5,987 | 5,717 |
Less: Fully amortized assets | 4,863 | 4,859 |
Remaining amortizable assets | 1,124 | 858 |
Accumulated amortization on remaining amortizable assets | 513 | 413 |
Net assets | 611 | 445 |
Internally Developed Software Products | ||
Capitalized software and other intangible assets | ||
Gross amortizable assets | 1,485 | 1,486 |
Less: Fully amortized assets | 994 | 835 |
Remaining amortizable assets | 491 | 651 |
Accumulated amortization on remaining amortizable assets | 341 | 414 |
Net assets | 150 | 237 |
Other Intangible Assets | ||
Capitalized software and other intangible assets | ||
Gross amortizable assets | 926 | 836 |
Less: Fully amortized assets | 608 | 556 |
Remaining amortizable assets | 318 | 280 |
Accumulated amortization on remaining amortizable assets | 213 | 231 |
Net assets | $ 105 | $ 49 |
Goodwill, Capitalized Software and Other Intangible Assets 2 (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Projected annual amortization expense | |
2016 | $ 298 |
2017 | 246 |
2018 | 192 |
2019 | 121 |
2020 | 92 |
Purchased Software Products | |
Projected annual amortization expense | |
2016 | 145 |
2017 | 152 |
2018 | 147 |
2019 | 104 |
2020 | 85 |
Internally Developed Software Products | |
Projected annual amortization expense | |
2016 | 110 |
2017 | 79 |
2018 | 37 |
2019 | 10 |
2020 | 1 |
Other Intangible Assets | |
Projected annual amortization expense | |
2016 | 43 |
2017 | 15 |
2018 | 8 |
2019 | 7 |
2020 | $ 6 |
Goodwill, Capitalized Software and Other Intangible Assets 3 (Details) $ in Millions |
9 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Goodwill activity by segment | |
Balance at March 31, 2015 | $ 5,806 |
Acquisitions | 321 |
Foreign currency translation adjustment | (4) |
Balance at December 31, 2015 | 6,123 |
Mainframe Solutions | |
Goodwill activity by segment | |
Balance at March 31, 2015 | 4,178 |
Acquisitions | 0 |
Foreign currency translation adjustment | 0 |
Balance at December 31, 2015 | 4,178 |
Enterprise Solutions | |
Goodwill activity by segment | |
Balance at March 31, 2015 | 1,547 |
Acquisitions | 321 |
Foreign currency translation adjustment | (4) |
Balance at December 31, 2015 | 1,864 |
Services | |
Goodwill activity by segment | |
Balance at March 31, 2015 | 81 |
Acquisitions | 0 |
Foreign currency translation adjustment | 0 |
Balance at December 31, 2015 | $ 81 |
Goodwill, Capitalized Software and Other Intangible Assets 4 (Details) |
9 Months Ended |
---|---|
Dec. 31, 2015 | |
Enterprise Solutions | |
Finite-Lived Intangible Assets | |
Uncertainty, Continued marketability of goods and services | The Company evaluates the useful lives and recoverability of capitalized software and other intangible assets when events or changes in circumstances indicate that an impairment may exist. These evaluations require complex assumptions about key factors such as future customer demand, technology trends and the impact of those factors on the technology the Company acquires and develops for its products. Impairments or revisions to useful lives could result from the use of alternative assumptions that reflect reasonably possible outcomes related to future customer demand or technology trends for assets within the Enterprise Solutions segment. |
Deferred Revenue (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Mar. 31, 2015 |
---|---|---|
Current: | ||
Total deferred revenue (billed or collected) - current | $ 1,983 | $ 2,114 |
Noncurrent: | ||
Total deferred revenue (billed or collected) - noncurrent | 667 | 863 |
Total deferred revenue (billed or collected) | 2,650 | 2,977 |
Subscription and Maintenance | ||
Current: | ||
Total deferred revenue (billed or collected) - current | 1,793 | 1,966 |
Noncurrent: | ||
Total deferred revenue (billed or collected) - noncurrent | 640 | 832 |
Professional Services | ||
Current: | ||
Total deferred revenue (billed or collected) - current | 113 | 115 |
Noncurrent: | ||
Total deferred revenue (billed or collected) - noncurrent | 24 | 28 |
Software Fees and Other | ||
Current: | ||
Total deferred revenue (billed or collected) - current | 77 | 33 |
Noncurrent: | ||
Total deferred revenue (billed or collected) - noncurrent | $ 3 | $ 3 |
Debt (Details) - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Oct. 20, 2015 |
Aug. 31, 2015 |
Jul. 31, 2015 |
Apr. 30, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Jul. 08, 2015 |
Mar. 31, 2015 |
|
Debt Instrument [Line Items] | ||||||||
Proceeds from issuance of debt | $ 1,100 | $ 0 | ||||||
Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, Face amount | $ 300 | |||||||
Debt instrument, Maturity date | Apr. 20, 2022 | |||||||
Term Loan | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, Interest rate range, Minimum | 0.125% | |||||||
Debt instrument, Interest rate range, Maximum | 1.00% | |||||||
Debt instrument, Interest rate | 0.50% | |||||||
Term Loan | Eurodollar Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, Interest rate range, Minimum | 1.125% | |||||||
Debt instrument, Interest rate range, Maximum | 2.00% | |||||||
Debt instrument, Interest rate | 1.50% | |||||||
Term Loan | April 1, 2017 through January 1, 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, Principal amortization payments, Percentage | 1.25% | |||||||
Term Loan | April 1, 2021 and Thereafter | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, Principal amortization payments, Percentage | 2.50% | |||||||
3.600% Senior Notes due August 2020 (3.600% Notes) | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, Face amount | $ 400 | |||||||
Debt instrument, Maturity date | Aug. 01, 2020 | |||||||
Debt instrument, Interest rate | 3.60% | |||||||
Proceeds from issuance of debt | $ 400 | |||||||
Debt instrument, Discount | less than $1 million | |||||||
Additional basis points (make-whole premium) for redemption of Senior Notes | 0.30% | |||||||
Change of control repurchase percentage for Senior Notes | 101.00% | |||||||
Debt issuance costs capitalized | $ 3 | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, Maturity date | Jun. 07, 2019 | |||||||
Debt instrument, Interest rate | 1.19% | |||||||
Maximum committed amount available under revolving credit facility | $ 1,000 | |||||||
Maximum available credit increase under revolving credit facility | $ 500 | |||||||
Transaction costs capitalized | less than $1 million | |||||||
Proceeds from borrowing under revolving credit facility | $ 400 | |||||||
Repayment of borrowing under revolving credit facility | $ 400 | |||||||
Interest expense related to borrowing under revolving credit facility | less than $1 million | |||||||
Outstanding borrowings under revolving credit facility | $ 0 | $ 0 |
Derivatives 1 (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Interest Rate Swaps | Fair Value Hedges | Interest Expense, Net | ||||
Effect of interest rate and foreign exchange derivatives | ||||
Amount of net (gain)/loss from derivative instruments recognized in the Condensed Consolidated Statements of Operations | $ 0 | $ (2) | $ 0 | $ (8) |
Foreign Currency Contracts | Other Expenses, Net | ||||
Effect of interest rate and foreign exchange derivatives | ||||
Amount of net (gain)/loss from derivative instruments recognized in the Condensed Consolidated Statements of Operations | $ (3) | $ (10) | $ 0 | $ (22) |
Derivatives 2 (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Mar. 31, 2015 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Collateral posted under collateralized security arrangements | $ 0 | $ 0 |
Interest Rate Swaps | Fair Value Hedges | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of interest rate derivative assets | 0 | 0 |
Foreign Currency Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional value of derivative instruments | $ 1,128 | $ 298 |
Tenure of foreign currency contracts outstanding | less than three months | less than three months |
Net fair value of foreign currency contracts | $ 10 | $ 2 |
Foreign Currency Contracts | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign currency contracts included in "Other current assets" | 16 | 5 |
Foreign Currency Contracts | Accrued Expenses and Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of foreign currency contracts included in "Accrued expenses and other current liabilities" | $ 6 | $ 3 |
Fair Value Measurements 1 (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions |
Dec. 31, 2015 |
Mar. 31, 2015 |
|||||
---|---|---|---|---|---|---|---|
Assets: | |||||||
Foreign exchange derivatives | [1] | $ 16 | $ 5 | ||||
Total assets | 609 | 754 | |||||
Liabilities: | |||||||
Foreign exchange derivatives | [1] | 6 | 3 | ||||
Total liabilities | 6 | 3 | |||||
Money Market Funds | Cash and Cash Equivalents | |||||||
Assets: | |||||||
Money market funds | [2] | 593 | 749 | ||||
Fair Value, Inputs, Level 1 | |||||||
Assets: | |||||||
Foreign exchange derivatives | [1] | 0 | 0 | ||||
Total assets | 593 | 749 | |||||
Liabilities: | |||||||
Foreign exchange derivatives | [1] | 0 | 0 | ||||
Total liabilities | 0 | 0 | |||||
Fair Value, Inputs, Level 1 | Money Market Funds | Cash and Cash Equivalents | |||||||
Assets: | |||||||
Money market funds | [2] | 593 | 749 | ||||
Fair Value, Inputs, Level 2 | |||||||
Assets: | |||||||
Foreign exchange derivatives | [1] | 16 | 5 | ||||
Total assets | 16 | 5 | |||||
Liabilities: | |||||||
Foreign exchange derivatives | [1] | 6 | 3 | ||||
Total liabilities | 6 | 3 | |||||
Fair Value, Inputs, Level 2 | Money Market Funds | Cash and Cash Equivalents | |||||||
Assets: | |||||||
Money market funds | [2] | 0 | 0 | ||||
Fair Value, Inputs, Level 3 | |||||||
Assets: | |||||||
Total assets | 0 | 0 | |||||
Liabilities: | |||||||
Total liabilities | $ 0 | $ 0 | |||||
|
Fair Value Measurements 2 (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Mar. 31, 2014 |
|||||
---|---|---|---|---|---|---|---|---|---|
Liabilities: | |||||||||
Facility exit reserve | $ 22 | $ 49 | $ 43 | $ 84 | |||||
Facility Exit | |||||||||
Liabilities: | |||||||||
Facility exit reserve | 18 | 21 | $ 21 | $ 29 | |||||
Carrying Value | |||||||||
Liabilities: | |||||||||
Total debt | [1] | 1,964 | 1,263 | ||||||
Carrying Value | Facility Exit | |||||||||
Liabilities: | |||||||||
Facility exit reserve | [2] | 18 | 21 | ||||||
Estimated Fair Value | |||||||||
Liabilities: | |||||||||
Total debt | [1] | 2,041 | 1,376 | ||||||
Estimated Fair Value | Facility Exit | |||||||||
Liabilities: | |||||||||
Facility exit reserve | [2] | $ 20 | $ 23 | ||||||
|
Fair Value Measurements 3 (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Mar. 31, 2014 |
---|---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Facility exit reserve | $ 22 | $ 49 | $ 43 | $ 84 |
Facility Exit | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Facility exit reserve | 18 | 21 | $ 21 | $ 29 |
Facility Exit | Accrued Expenses and Other Current Liabilities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Facility exit reserve | 4 | 4 | ||
Facility Exit | Other Noncurrent Liabilities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Facility exit reserve | $ 14 | $ 17 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
May. 29, 2014 |
Dec. 31, 2015 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Alleged damages suffered | excess of $100 million | |
Loss contingency, Range of reasonably possible loss, Minimum | $ 0 | |
Loss contingency, Range of reasonably possible loss, Maximum | $ 35 |
Stockholders' Equity 1 (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
|
Cash dividends | ||||||
Declaration date | Nov. 05, 2015 | Aug. 06, 2015 | May 05, 2015 | Nov. 06, 2014 | Jul. 31, 2014 | May 15, 2014 |
Dividend per share (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 |
Record date | Nov. 19, 2015 | Aug. 27, 2015 | May 28, 2015 | Nov. 20, 2014 | Aug. 21, 2014 | May 29, 2014 |
Total amount | $ 105 | $ 110 | $ 110 | $ 111 | $ 111 | $ 111 |
Payment date | Dec. 08, 2015 | Sep. 15, 2015 | Jun. 16, 2015 | Dec. 09, 2014 | Sep. 09, 2014 | Jun. 17, 2014 |
Stockholders' Equity 2 (Details) $ / shares in Units, SFr in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 21, 2015 |
Nov. 20, 2015
$ / shares
shares
|
Nov. 16, 2015 |
Dec. 31, 2015
USD ($)
shares
|
Dec. 08, 2015
USD ($)
$ / shares
|
Dec. 31, 2015
CHF (SFr)
$ / shares
|
Sep. 30, 2015
$ / shares
|
Jun. 30, 2015
$ / shares
|
Dec. 31, 2014
$ / shares
|
Sep. 30, 2014
$ / shares
|
Jun. 30, 2014
$ / shares
|
Dec. 31, 2015
USD ($)
shares
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2015
USD ($)
|
Nov. 13, 2015
USD ($)
|
Mar. 31, 2015
USD ($)
|
May. 14, 2014
USD ($)
|
|
Equity [Abstract] | |||||||||||||||||
Accumulated other comprehensive loss | $ (469,000,000) | $ (418,000,000) | |||||||||||||||
Rights plan, Stockholder Protection Rights Agreement effective date | Nov. 30, 2015 | ||||||||||||||||
Rights plan, Beneficial ownership percentage with grandfathered exclusion, Minimum | 20.00% | ||||||||||||||||
Rights plan, Grandfathered shares percentage, Maximum | 25.00% | ||||||||||||||||
Rights plan, Flip-in Trigger | A “Flip-in” Trigger will occur upon the earlier of (i) a public announcement by the Company that any person has become an Acquiring Person or (ii) an Acquiring Person acquires more than 50% of the Company’s outstanding shares of common stock. | ||||||||||||||||
Rights plan, Purchase price | $ 120 | ||||||||||||||||
Rights plan, Shares | shares | 0.001 | ||||||||||||||||
Rights plan, Exercise price | $ 120 | ||||||||||||||||
Rights plan, Redemption price per Right | $ 0.001 | ||||||||||||||||
Rights plan, Qualified offer | 10.00% | ||||||||||||||||
Rights plan, Minimum tender condition | 50.00% | ||||||||||||||||
Rights plan, Rights expiration date | Nov. 30, 2018 | ||||||||||||||||
Rights plan, Rights expiration date, Rights Agreement not ratified | Nov. 30, 2016 | ||||||||||||||||
Stock Repurchase Program [Line Items] | |||||||||||||||||
Dividend per share (in dollars per share) paid reducing purchase price | $ / shares | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | |||||||||||
Payments for repurchases of common stock | $ 705,000,000 | $ 125,000,000 | |||||||||||||||
Careal Share Repurchase Arrangement | |||||||||||||||||
Stock Repurchase Program [Line Items] | |||||||||||||||||
Shares of common stock transferred by Careal to entity wholly owned by Martin Haefner | shares | 37,000,000 | ||||||||||||||||
Ownership percentage of Martin Haefner's wholly owned entity of Careal | 50.00% | ||||||||||||||||
Indemnification, Maximum potential future payment | $ 101 | 101,000,000 | |||||||||||||||
Careal | |||||||||||||||||
Stock Repurchase Program [Line Items] | |||||||||||||||||
Shareholder ownership percentage of total Company stock outstanding before share repurchase arrangement | 28.70% | ||||||||||||||||
Shareholder ownership percentage of total Company stock outstanding after share repurchase arrangement | 16.00% | ||||||||||||||||
Martin Haefner | |||||||||||||||||
Stock Repurchase Program [Line Items] | |||||||||||||||||
Shareholder ownership percentage of total Company stock outstanding after share repurchase arrangement | 8.90% | ||||||||||||||||
Careal and its Shareholders Collectively | |||||||||||||||||
Stock Repurchase Program [Line Items] | |||||||||||||||||
Shareholder ownership percentage of total Company stock outstanding after share repurchase arrangement | 24.90% | ||||||||||||||||
Prior $1 Billion Stock Repurchase Program | |||||||||||||||||
Stock Repurchase Program [Line Items] | |||||||||||||||||
Stock repurchase program, Authorized amount | $ 1,000,000,000 | ||||||||||||||||
Shares of common stock repurchased | shares | 26,000,000 | ||||||||||||||||
Stock repurchase program, Remaining authorized common stock repurchase amount | 0 | ||||||||||||||||
Value of common stock repurchased | $ 707,000,000 | ||||||||||||||||
Prior $1 Billion Stock Repurchase Program | Careal Share Repurchase Arrangement | |||||||||||||||||
Stock Repurchase Program [Line Items] | |||||||||||||||||
Shares of common stock repurchased | shares | 22,000,000 | ||||||||||||||||
Effective share repurchase price (in dollars per share) | $ / shares | $ 26.81 | ||||||||||||||||
Discount to weighted average price of company stock | 3.00% | ||||||||||||||||
Dividend per share (in dollars per share) paid reducing purchase price | $ / shares | $ 0.25 | ||||||||||||||||
Payments for repurchases of common stock | $ 590,000,000 | ||||||||||||||||
Current $750 Million Stock Repurchase Program | |||||||||||||||||
Stock Repurchase Program [Line Items] | |||||||||||||||||
Stock repurchase program, Authorized amount | $ 750,000,000 | ||||||||||||||||
Stock repurchase program, Remaining authorized common stock repurchase amount | $ 750,000,000 |
Income From Continuing Operations Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Basic income from continuing operations per common share: | ||||
Income from continuing operations | $ 219 | $ 218 | $ 598 | $ 665 |
Less: Income from continuing operations allocable to participating securities | (2) | (2) | (6) | (7) |
Income from continuing operations allocable to common shares | $ 217 | $ 216 | $ 592 | $ 658 |
Weighted average common shares outstanding | 420 | 440 | 431 | 440 |
Basic income from continuing operations per common share (in dollars per share) | $ 0.52 | $ 0.49 | $ 1.37 | $ 1.50 |
Diluted income from continuing operations per common share: | ||||
Income from continuing operations | $ 219 | $ 218 | $ 598 | $ 665 |
Less: Income from continuing operations allocable to participating securities | (2) | (2) | (6) | (7) |
Income from continuing operations allocable to common shares | $ 217 | $ 216 | $ 592 | $ 658 |
Weighted average shares outstanding and common share equivalents: | ||||
Weighted average common shares outstanding | 420 | 440 | 431 | 440 |
Weighted average effect of share-based payment awards | 1 | 1 | 1 | 1 |
Denominator in calculation of diluted income per share | 421 | 441 | 432 | 441 |
Diluted income from continuing operations per common share (in dollars per share) | $ 0.52 | $ 0.49 | $ 1.37 | $ 1.49 |
Income from continuing operations per common share, Other disclosures [Abstract] | ||||
Number of anti-dilutive restricted stock awards and options excluded from the calculation | 2 | 1 | 2 | 1 |
Weighted average restricted stock awards considered participating securities | 4 | 5 | 4 | 4 |
Accounting for Share-Based Compensation 1 (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Recognized share-based compensation | ||||
Share-based compensation expense before tax | $ 25 | $ 23 | $ 70 | $ 65 |
Income tax benefit | (8) | (7) | (22) | (20) |
Net share-based compensation expense | 17 | 16 | 48 | 45 |
Costs of Licensing and Maintenance | ||||
Recognized share-based compensation | ||||
Share-based compensation expense before tax | 2 | 2 | 5 | 4 |
Cost of Professional Services | ||||
Recognized share-based compensation | ||||
Share-based compensation expense before tax | 1 | 1 | 3 | 3 |
Selling and Marketing | ||||
Recognized share-based compensation | ||||
Share-based compensation expense before tax | 9 | 8 | 25 | 23 |
General and Administrative | ||||
Recognized share-based compensation | ||||
Share-based compensation expense before tax | 9 | 8 | 25 | 21 |
Product Development and Enhancements | ||||
Recognized share-based compensation | ||||
Share-based compensation expense before tax | $ 4 | $ 4 | $ 12 | $ 14 |
Accounting for Share-Based Compensation 2 (Details) $ in Millions |
9 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Unrecognized share-based compensation costs | |
Unrecognized share-based compensation costs | $ 120 |
Weighted average period expected to be recognized (in years) | 2 years 1 month 6 days |
Stock Option Awards | |
Unrecognized share-based compensation costs | |
Unrecognized share-based compensation costs | $ 5 |
Weighted average period expected to be recognized (in years) | 1 year 10 months 24 days |
Restricted Stock Units | |
Unrecognized share-based compensation costs | |
Unrecognized share-based compensation costs | $ 20 |
Weighted average period expected to be recognized (in years) | 2 years |
Restricted Stock Awards | |
Unrecognized share-based compensation costs | |
Unrecognized share-based compensation costs | $ 68 |
Weighted average period expected to be recognized (in years) | 2 years |
Performance Share Units | |
Unrecognized share-based compensation costs | |
Unrecognized share-based compensation costs | $ 27 |
Weighted average period expected to be recognized (in years) | 2 years 4 months 24 days |
Accounting for Share-Based Compensation 3 (Details) - $ / shares |
9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||
Weighted average fair values and assumptions used for options granted | |||||||||
Weighted average fair value (in dollars per share) | $ 4.68 | $ 5.87 | |||||||
Dividend yield | 3.37% | 3.29% | |||||||
Expected volatility factor | [1] | 23.00% | 29.00% | ||||||
Risk-free interest rate | [2] | 1.90% | 2.10% | ||||||
Expected life (in years) | [3] | 6 years | 6 years | ||||||
|
Accounting for Share-Based Compensation 4 (Details) - $ / shares shares in Millions |
3 Months Ended | 9 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Jun. 30, 2015 |
Dec. 31, 2014 |
Jun. 30, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||||
Restricted Stock Awards (RSAs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.0 | [1] | 0.1 | 2.8 | 3.1 | ||||||||||
Weighted average grant date fair value (in dollars per share) | [2] | $ 26.53 | $ 29.72 | $ 30.63 | $ 28.97 | ||||||||||
Restricted Stock Units (RSUs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.0 | 0.0 | [1] | 0.9 | 0.8 | ||||||||||
Weighted average grant date fair value (in dollars per share) | [3] | $ 0.00 | $ 27.98 | $ 28.72 | $ 26.92 | ||||||||||
Fiscal Year 2015 Incentive Plan Year | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Performance period (in years) | 1 year | ||||||||||||||
Fiscal Year 2015 Incentive Plan Year | Restricted Stock Awards (RSAs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.5 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 31.41 | ||||||||||||||
Fiscal Year 2015 Incentive Plan Year | Restricted Stock Units (RSUs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.1 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 30.42 | ||||||||||||||
Fiscal Year 2014 Incentive Plan Year | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Performance period (in years) | 1 year | ||||||||||||||
Fiscal Year 2014 Incentive Plan Year | Restricted Stock Awards (RSAs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.7 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 29.91 | ||||||||||||||
Fiscal Year 2014 Incentive Plan Year | Restricted Stock Units (RSUs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.1 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 28.92 | ||||||||||||||
Fiscal Year 2013 Incentive Plan Year | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Performance period (in years) | 3 years | ||||||||||||||
Shares | 0.1 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 31.41 | ||||||||||||||
Fiscal Year 2015 Sales Retention Equity Program | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Performance period (in years) | 1 year | ||||||||||||||
Fiscal Year 2015 Sales Retention Equity Program | Restricted Stock Awards (RSAs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.2 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 30.45 | ||||||||||||||
Fiscal Year 2015 Sales Retention Equity Program | Restricted Stock Units (RSUs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.1 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 27.50 | ||||||||||||||
Fiscal Year 2014 Sales Retention Equity Program | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Performance period (in years) | 1 year | ||||||||||||||
Fiscal Year 2014 Sales Retention Equity Program | Restricted Stock Awards (RSAs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.2 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 28.69 | ||||||||||||||
Fiscal Year 2014 Sales Retention Equity Program | Restricted Stock Units (RSUs) | |||||||||||||||
Summary of PSUs granted under long-term incentive plans | |||||||||||||||
Shares | 0.1 | ||||||||||||||
Weighted average grant date fair value (in dollars per share) | $ 25.73 | ||||||||||||||
|
Accounting for Share-Based Compensation 5 (Details) - $ / shares shares in Millions |
3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||||
Restricted Stock Awards (RSAs) | |||||||||||||
Summary of all RSAs and RSUs granted | |||||||||||||
Shares | 0.0 | [1] | 0.1 | 2.8 | 3.1 | ||||||||
Weighted average grant date fair value (in dollars per share) | [2] | $ 26.53 | $ 29.72 | $ 30.63 | $ 28.97 | ||||||||
Restricted Stock Units (RSUs) | |||||||||||||
Summary of all RSAs and RSUs granted | |||||||||||||
Shares | 0.0 | 0.0 | [1] | 0.9 | 0.8 | ||||||||
Weighted average grant date fair value (in dollars per share) | [3] | $ 0.00 | $ 27.98 | $ 28.72 | $ 26.92 | ||||||||
|
Accounting for Share-Based Compensation 6 (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||
Capitalized share-based compensation costs | $ 0 | $ 0 | $ 0 | $ 0 | ||
Stock options issued | 0.9 | 0.6 | ||||
Computation of expected life, Simplified method | The Company’s computation of expected life was determined based on the simplified method (the average of the vesting period and option term). | |||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of stock closing price on last day of offer period that ESPP participants can purchase Company stock | 95.00% | 95.00% | ||||
Number of shares issued under ESPP | 0.1 | 0.1 | ||||
Share price issued under ESPP (in dollars per share) | $ 27.13 | $ 27.83 | ||||
Number of shares available for future issuances under ESPP | 29.2 | 29.2 | 29.2 | |||
Restricted Stock Awards (RSAs) | 1-year PSUs for Incentive Plan Years | Grant Date | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 34.00% | |||||
Restricted Stock Awards (RSAs) | 1-year PSUs for Incentive Plan Years | First Anniversary | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 33.00% | |||||
Restricted Stock Awards (RSAs) | 1-year PSUs for Incentive Plan Years | Second Anniversary | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 33.00% | |||||
Restricted Stock Awards (RSAs) | 1-year PSUs for Sales Retention Equity Programs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period from grant date (in years) | 3 years | |||||
Restricted Stock Units (RSUs) | 1-year PSUs for Incentive Plan Years | Grant Date | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 34.00% | |||||
Restricted Stock Units (RSUs) | 1-year PSUs for Incentive Plan Years | First Anniversary | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 33.00% | |||||
Restricted Stock Units (RSUs) | 1-year PSUs for Incentive Plan Years | Second Anniversary | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 33.00% | |||||
Restricted Stock Units (RSUs) | 1-year PSUs for Sales Retention Equity Programs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period from grant date (in years) | 3 years |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 59 | $ 88 | $ 222 | $ 248 |
Net discrete tax benefit recognized | $ 19 | $ 6 | $ 16 | $ 23 |
Estimated annual effective tax rate, which excludes impact of discrete items | 29.00% | 29.70% | ||
Minimum | ||||
Expected Effective Tax Rate [Line Items] | ||||
Expected fiscal year 2016 effective tax rate | 28.00% | |||
Maximum | ||||
Expected Effective Tax Rate [Line Items] | ||||
Expected fiscal year 2016 effective tax rate | 29.00% |
Supplemental Statement of Cash Flows Information 1 (Details) - Notional Pooling Arrangement - USD ($) $ in Millions |
9 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
||||
Notional pooling arrangement | |||||
Total borrowings outstanding at beginning of period | [1] | $ 138 | $ 139 | ||
Borrowings | 3,237 | 4,226 | |||
Repayments | (3,230) | (4,145) | |||
Foreign exchange effect | (6) | (82) | |||
Total borrowings outstanding at end of period | [1] | $ 139 | $ 138 | ||
|
Supplemental Statement of Cash Flows Information 2 (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Supplemental Cash Flow Information [Abstract] | ||
Interest payments, net | $ 56 | $ 65 |
Income taxes paid, net from continuing operations | 199 | 238 |
Excess tax benefits from share-based incentive awards included in financing activities from continuing operations | 3 | 3 |
Share-based incentive awards, Non-cash financing activities | 42 | 43 |
Withholding taxes on share-based incentive awards, Non-cash financing activities | 28 | 27 |
Discretionary stock contributions to CA, Inc. Savings Harvest Plan, Non-cash financing activities | 24 | 26 |
Treasury common shares issued in connection with Employee Stock Purchase Plan, Non-cash financing activities | $ 5 | $ 5 |
Segment Information 1 (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|||||||||||
Segment information | ||||||||||||||
Revenue | $ 1,034 | $ 1,091 | $ 3,016 | $ 3,239 | ||||||||||
Income from continuing operations before interest and income taxes | 293 | 318 | 856 | 951 | ||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||||||||||||
Segment profit | 293 | 318 | 856 | 951 | ||||||||||
Share-based compensation expense | 25 | 23 | 70 | 65 | ||||||||||
Other (gains) expenses, net | (4) | [1] | (6) | [2] | (2) | [1] | 2 | [3] | ||||||
Interest expense, net | 15 | 12 | 36 | 38 | ||||||||||
Income from continuing operations before income taxes | 278 | 306 | 820 | 913 | ||||||||||
Purchased Software Products | ||||||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||||||||||||
Amortization of intangible assets | 39 | 28 | 106 | 87 | ||||||||||
Other Intangible Assets | ||||||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||||||||||||
Amortization of intangible assets | 11 | 14 | 36 | 45 | ||||||||||
Internally Developed Software Products | ||||||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||||||||||||
Amortization of intangible assets | 26 | 34 | 86 | 117 | ||||||||||
Mainframe Solutions | ||||||||||||||
Segment information | ||||||||||||||
Revenue | 554 | 596 | 1,668 | 1,820 | ||||||||||
Expenses | 218 | 248 | 641 | 717 | ||||||||||
Income from continuing operations before interest and income taxes | $ 336 | $ 348 | $ 1,027 | $ 1,103 | ||||||||||
Segment operating margin | 61.00% | 58.00% | 62.00% | 61.00% | ||||||||||
Depreciation | $ 9 | $ 10 | $ 27 | $ 33 | ||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||||||||||||
Segment profit | 336 | 348 | 1,027 | 1,103 | ||||||||||
Enterprise Solutions | ||||||||||||||
Segment information | ||||||||||||||
Revenue | 398 | 405 | 1,104 | 1,151 | ||||||||||
Expenses | 349 | 347 | 996 | 999 | ||||||||||
Income from continuing operations before interest and income taxes | $ 49 | $ 58 | $ 108 | $ 152 | ||||||||||
Segment operating margin | 12.00% | 14.00% | 10.00% | 13.00% | ||||||||||
Depreciation | $ 7 | $ 7 | $ 20 | $ 21 | ||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||||||||||||
Segment profit | 49 | 58 | 108 | 152 | ||||||||||
Services | ||||||||||||||
Segment information | ||||||||||||||
Revenue | 82 | 90 | 244 | 268 | ||||||||||
Expenses | 77 | 85 | 227 | 256 | ||||||||||
Income from continuing operations before interest and income taxes | $ 5 | $ 5 | $ 17 | $ 12 | ||||||||||
Segment operating margin | 6.00% | 6.00% | 7.00% | 4.00% | ||||||||||
Depreciation | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||||||||||||
Segment profit | 5 | 5 | 17 | 12 | ||||||||||
Total Reportable Segments | ||||||||||||||
Segment information | ||||||||||||||
Revenue | 1,034 | 1,091 | 3,016 | 3,239 | ||||||||||
Expenses | 644 | 680 | 1,864 | 1,972 | ||||||||||
Income from continuing operations before interest and income taxes | $ 390 | $ 411 | $ 1,152 | $ 1,267 | ||||||||||
Segment operating margin | 38.00% | 38.00% | 38.00% | 39.00% | ||||||||||
Depreciation | $ 16 | $ 17 | $ 47 | $ 54 | ||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||||||||||||
Segment profit | $ 390 | $ 411 | $ 1,152 | $ 1,267 | ||||||||||
|
Segment Information 2 (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|||
Revenue from the United States and international locations | ||||||
Revenue | $ 1,034 | $ 1,091 | $ 3,016 | $ 3,239 | ||
United States | ||||||
Revenue from the United States and international locations | ||||||
Revenue | 671 | 668 | 1,935 | 1,967 | ||
EMEA | ||||||
Revenue from the United States and international locations | ||||||
Revenue | [1] | 230 | 263 | 679 | 781 | |
Other | ||||||
Revenue from the United States and international locations | ||||||
Revenue | $ 133 | $ 160 | $ 402 | $ 491 | ||
|
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