S-4/A

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As filed with the Securities and Exchange Commission on October 6, 2006

Registration No. 333-126641

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Amendment No. 4
To
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CA, Inc.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of Incorporation or Organization)	7372 (Primary Standard Industrial Classification Code Number)	13-2857434 (I.R.S. Employer Identification Number)
One CA Plaza Islandia, New York 11749-7000 (Address, including zip code, and telephone number, including area code, of the registrant's principal executive offices)
KENNETH V. HANDAL, ESQ. Executive Vice President, Governance, Co-General Counsel and Corporate Secretary CA, Inc. One CA Plaza Islandia, New York 11749-7000 (631) 342-6000 (Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy to:

ROBERT W. DOWNES
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004

Approximate date of commencement of proposed offer to the public:
As soon as practicable after the effective date of this registration statement.

        If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Dated    •    , 2006

CA, Inc.

Offer to Exchange

$500,000,000
4.750% Series B Senior Notes due 2009 that have been registered under the Securities Act of 1933
for
all outstanding unregistered 4.750% Senior Notes due 2009

$500,000,000
5.625% Series B Senior Notes due 2014 that have been registered under the Securities Act of 1933
for
all outstanding unregistered 5.625% Senior Notes due 2014

        We are offering to exchange (1) $500,000,000 aggregate principal amount of the outstanding, unregistered 4.750% Senior Notes due 2009 issued by CA, Inc. that you now hold for new, substantially identical 4.750% Series B Senior Notes due 2009 that will be free of the transfer restrictions of the old notes and (2) $500,000,000 aggregate principal amount of the outstanding, unregistered 5.625% Senior Notes due 2014 issued by CA, Inc. that you now hold for new, substantially identical 5.625% Series B Senior Notes due 2014 that will be free of the transfer restrictions on the old notes. These offers will expire at 5:00 p.m., New York City time, on     •    , 2006, unless we extend the deadline. You must tender your old, unregistered notes of a series by the deadline to obtain new, registered notes of the same series and the liquidity benefits the new notes of that series offer.

        We agreed with the initial purchasers of the old notes to make these offers and to register the issuance of the new notes after the initial sale of the old notes. This offer applies to any and all old notes tendered by the deadline.

        We will not list the new notes on any established exchange. The new notes of a series will have the same financial terms and covenants as the old notes of the same series, and are subject to the same business and financial risks.

        See "Risk Factors" in our Form 10-K, as well as in our Quarterly Report on Form 10-Q for fiscal quarter ended June 30, 2006 and "Risk Factors" herein beginning on page 16 for a discussion of the factors that you should consider in connection with the exchange offers and an exchange of old notes for new notes.

        Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is    •    , 2006

TABLE OF CONTENTS

	Page
Forward-Looking Statements	3
Summary	4
Risk Factors	16
Use of Proceeds	17
The Exchange Offers	18
How to Tender Your Old Notes	21
Description of the New Notes	29
Material U.S. Federal Income Tax Considerations	40
Plan of Distribution	41
Where You Can Find More Information	43
Incorporation of Certain Documents By Reference	43
Validity of the New Notes	44
Experts	44

        This document incorporates important business and financial information about CA, Inc. from documents that are not included in or delivered with this document. You should rely only on the information contained in and incorporated by reference in this prospectus. We have not authorized anyone to provide you with information different from that included or incorporated by reference in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, or, in the case of an incorporated document, the date of its filing, regardless of the time of delivery of this prospectus or of any exchange of our 4.750% Senior Notes due 2009 for substantially similar 4.750% Series B Senior Notes due 2009 or our 5.625% Senior Notes due 2014 for substantially similar 5.625% Series B Senior Notes due 2014. You can obtain documents incorporated by reference in this document, other than some exhibits to those documents, by requesting them in writing or by telephone from us at the following:

CA, Inc.
One CA Plaza
Islandia, New York 11749-7000
Attention: Investor Relations
(631) 342-6000

         You will not be charged for any of the documents that you request. If you would like to request documents, please do so by    •    , 2006 in order to receive them before the exchange offers expire on    •    , 2006.

        We are not making these exchange offers to, nor will we accept surrenders for exchange from, holders of old notes in any jurisdiction in which the exchange offers would violate securities or blue sky laws.

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FORWARD-LOOKING STATEMENTS

        This registration statement contains or incorporates by reference certain forward-looking information relating to CA, Inc. ("CA", "we", "our" or "us") that is based on the beliefs of, and assumptions made by, our management as well as information currently available to our management. When used in this registration statement and the documents incorporated by reference herein, the words "anticipate", "believe", "estimate", "expect" and similar expressions are intended to identify forward-looking information. Such information includes, for example, the statements made under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook for Fiscal Year 2007" under Item 7 of our Form 10-K, but also appears in this registration statement, other parts of our Form 10-K and other documents incorporated by reference herein. This forward-looking information reflects our current views with respect to future events and is subject to certain risks, uncertainties, and assumptions, some of which are described under "Risk Factors" under Item 1A of our Form 10-K and elsewhere in our Form 10-K as well as in our quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2006, which we refer to as our Form 10-Q. Should one or more of these risks or uncertainties occur, or should our assumptions prove incorrect, actual results may vary materially from those described in this registration statement and the documents incorporated by reference herein as anticipated, believed, estimated or expected. We do not intend to update these forward-looking statements.

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SUMMARY

This brief summary highlights selected information contained in this document and the documents we have incorporated in this document by reference. It does not contain all of the information that is important to you. We urge you to read carefully the entire document, the documents incorporated in this document by reference and the other documents to which this document refers, including our consolidated financial statements and the notes to those financial statements, which are incorporated in this document by reference.

CA, Inc.

        CA is one of the world's largest independent providers of information technology (IT) management software. We develop, market, deliver and license software products that allow organizations to run, manage, and automate aspects of their computing environments, or IT infrastructures, which are critical to their business.

        We are considered an Independent Software Vendor (ISV). ISVs develop and license software products that can increase the efficiency of computer hardware platforms or operating systems sold by other vendors.

        Our software helps our customers dynamically manage all of the people, processes, computers, networks and the range of technologies that make up their IT infrastructure. We have a broad portfolio of software products and services that span the areas of infrastructure management, security management, storage management and business service optimization. Our solutions work across all networks and systems, across distributed and mainframe environments, and across all major hardware and software platforms in use by our customers.

        Because many organizations have increased their investments in technology over the years, their IT infrastructures are complex and security has become an increasing concern. Customers therefore place high value on software and services that can help them manage their entire IT infrastructures better and more securely.

        On August 4, 2006, Moody's confirmed CA's Ba1 senior unsecured rating and assigned a negative rating outlook, concluding a review for possible downgrade initiated on June 30, 2006.

        Our principal executive offices are located at One CA Plaza, Islandia, New York 11749-7000, and our main telephone number is (631) 342-6000.

        For a further discussion of our businesses, we urge you to read our Form 10-K, incorporated by reference herein. See "Incorporation of Certain Documents By Reference" below.

Previously Announced Restatements of Financial Statements

        In our Annual Report on Form 10-K for fiscal year 2006 filed in July 2006, which we refer to as our 2006 Annual Report, we restated financial information for the years ended March 31, 2002 through 2005 and restated quarterly financial information for each interim period during fiscal years ended March 31, 2005 and 2006. We restated these prior fiscal periods principally to reflect additional (i) non-cash stock-based compensation expense relating to employee stock option grants prior to fiscal year 2002, (ii) subscription revenue relating to the early renewal of certain contracts, and (iii) sales commission expense that should have been recorded in the third quarter of fiscal year 2006.

        For more information about the restatements, please read our 2006 Annual Report.

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Disclosure Controls and Procedures
and
Internal Control Over Financial Reporting

        As previously reported in Part II, Item 9A of our 2006 Annual Report, and Part 1, Item 4 of our Form 10-Q management conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of March 31, 2006. During this evaluation, management identified material weaknesses in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934), as more fully described below. Consequently, management concluded that as of March 31, 2006 our disclosure controls and procedures were not effective.

        Additionally, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2006 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). During this evaluation, management identified material weaknesses in our internal control over financial reporting relating to (i) an ineffective control environment due to a lack of effective communication policies and procedures, (ii) ineffective policies and procedures relating to controls over the accounting for sales commissions, (iii) ineffective policies and procedures relating to the identification, analysis and documentation of non-routine tax matters, (iv) ineffective policies and procedures relating to the accounting for and disclosure of stock-based compensation relating to stock options, and (v) ineffective policies and procedures designated to identify, quantify and record the impact on subscription revenue when license agreements have been cancelled and renewed more than once prior to the expiration date of each successive license agreement. Management concluded that, as of March 31, 2006, our internal control over financial reporting was not effective based upon the criteria in Internal Control—Integrated Framework issued by COSO. Additionally, our independent registered public accounting firm, KPMG LLP, audited and issued a report on the effectiveness of our internal controls over financial reporting as of March 31, 2006. In that report, which is included in the 2006 Annual Report, KPMG LLP, our independent registered public accounting firm, stated that, in their opinion, because of the material weaknesses referenced above, we did not maintain effective internal control over financial reporting as of March 31, 2006, based on criteria established in the COSO framework referenced above. These material weaknesses in our internal control over financial reporting continue to persist through the current fiscal quarter with the exception of item (iv) above which was remediated during the Company's first quarter of fiscal year 2007. As such, we plan to implement various steps and procedures to help remediate these material weaknesses and we expect that such material weaknesses will be fully remediated by the end of our fiscal year 2007.

        With regard to the first material weakness referenced above, we did not maintain an effective control environment due to a lack of effective communication policies and procedures. Specifically, (i) there was a lack of coordination and communication among certain of our senior executives with responsibility for the sales and finance functions and within the sales and finance functions regarding potentially significant financial information; and (ii) there were communications by certain senior executives that failed to set a proper tone, which could discourage escalation of information of possible importance in clarifying or resolving financial issues. These deficiencies resulted in more than a remote likelihood that a material misstatement of the annual or interim financial statements would not be prevented or detected and contributed to the second and third material weaknesses referenced above.

        With regard to the second material weakness referenced above, our policies and procedures relating to controls over the accounting for sales commissions were not effective. Specifically, we did not effectively estimate, record and monitor our sales commissions and related accruals. Moreover, we did not reconcile our commission expense accrual to actual payments on a timely basis. These deficiencies resulted in a material error in the recognition of commission expense, which resulted in a

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restatement of the interim financial statements for the three and nine-month periods ended December 31, 2005.

        With regard to the third material weakness referenced above, our policies and procedures relating to the identification, analysis and documentation of non-routine tax matters were not effective. Additionally, our tax function did not provide timely communication to management of our assumptions regarding certain non-routine tax matters. This deficiency resulted in a material error in the recognition of taxes associated with our cash repatriation, which occurred in the fourth quarter of fiscal year 2006.

        With regard to the fourth material weakness referenced above, our policies and procedures relating to the accounting for and disclosure of stock-based compensation relating to stock options were not effective. Specifically, controls, including monitoring controls, were not effective in ensuring the existence, completeness, valuation and presentation of our granting of stock options, which then impacted our determination of the fair value associated with these awards and recognition of stock-based compensation expense over the related vesting periods from fiscal years 2002 through 2006. This deficiency resulted in material errors in the recognition of compensation expense, additional paid-in capital, deferred taxes and related financial disclosures relating to such stock options, which contributed to a restatement of annual financial statements for fiscal years 2002 through 2005, and for interim financial statements for fiscal years 2005 and 2006.

        With regard to the fifth material weakness referenced above, our policies and procedures were not effectively designed to identify, quantify and record the impact on subscription revenue when license agreements have been cancelled and renewed more than once prior to the expiration date of each successive license agreement. This deficiency resulted in material errors in the recognition of revenue, which contributed to a restatement of annual financial statements for fiscal years 2004 and 2005, and for interim financial statements for fiscal years 2005 and 2006.

        Each of the material weaknesses referenced above individually resulted in more than a remote likelihood that a material misstatement of our interim or annual financial statements would not have been prevented or detected. Accordingly, we plan to implement the procedures and steps noted below to enhance our internal control over financial reporting and our disclosure controls and procedures so as to remediate these weaknesses:

        (i) Specific remediation actions planned for fiscal year 2007 with respect to our material weakness in internal control over financial reporting related to an ineffective control environment due to a lack of effective communication policies and procedures include the following:

•

Implementing personnel and organizational changes, which include: (i) appointing a new Chief Operating Officer and a new Chief Financial Officer; (ii) realignment of reporting of the Chief Financial Officer from Chief Operating Officer to the Chief Executive Officer; (iii) reorganization of the Sales Function including (a) eliminating the position of Executive Vice President Worldwide Sales, and the establishment of direct reporting of the field sales organization to the Chief Operating Officer and (b) appointing a Senior Vice President Sales Operations with direct reporting to the Chief Operating Officer;



•

Implementing recurring meetings with representation from key departments including legal, finance, operations and human resources to address operating and financial performance, as well as the identification, tracking and communication of information of potential significance to financial reporting and disclosure issues; and



•

The provision of focused training relating to ethics, our Code of Conduct and our core values.

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        (ii) Specific remediation actions planned for fiscal year 2007 with respect to our material weakness in internal control over financial reporting related to sales commissions include the following:

•

Review of commissions accounting procedures by the Internal Audit Department;



•

Appointment of a quality review team to assess the adequacy and efficacy of the business processes, IT Systems and financial oversight for the administration of sales commissions;



•

Formalization of policies and procedures including communication and reporting responsibilities among our sales, human resources and finance functions to ensure that the administration, payments of and accounting for commissions expense are coordinated;



•

Reconciliation of commission expense accruals to actual commission payments on a quarterly basis; and



•

Monitoring of progress on remediation and to provide governance, including organizational alignment, by a cross functional review committee.

        (iii) Specific remediation actions planned for fiscal year 2007 with respect to our material weakness in internal control over financial reporting related to non-routine tax matters include the following:

•

Review of the tax department's policies and procedures including its use of external advisors;



•

Establishment of new documentation and analysis requirements for non-routine tax matters to ensure among other things, that accounting conclusions involving such matters are thoroughly documented and identify the critical factors that support the basis for such conclusions; and



•

Formalization of communication and review of non-routine tax matters between the tax function and senior finance management.

        (iv) With respect to our material weakness in internal control over financial reporting related to the accounting for and disclosure of stock-based compensation relating to stock options issued prior to fiscal year 2002, our remediation efforts have included the development and implementation of policies and procedures beginning in fiscal year 2002 which have resulted in the timely communication of stock option grants to employees. During the first quarter of fiscal year 2007, we implemented procedures that resulted in the proper recognition and disclosure of stock-based compensation expense for stock options issued prior to fiscal year 2002. Accordingly, no further remediation is deemed necessary with respect to this material weakness.

        (v) Specific remediation actions planned for fiscal 2007 with respect to our material weakness in internal control over financial reporting related to accounting for subscription revenue when license agreements have been cancelled and renewed more than once prior to the expiration date of each successive license agreement include the following:

•

Formalization of policies and procedures, as well as provision of training, on the identification, quantification and recording of the impact on subscription revenue of such license agreements.

        With the exception of item (iv) above, the remediation of the material weaknesses described above is ongoing and we intend to continue implementing the steps listed above under the belief that our efforts, when fully implemented, will be effective in remediating such material weaknesses. Moreover, management will continue to monitor the results of the remediation activities and test the new controls as part of our review of our internal control over financial reporting for fiscal year 2007. We expect that the material weaknesses referenced above will be fully remediated by the end of fiscal year 2007.

        In addition, as previously reported in our amended Annual Report on Form 10-K/A for the fiscal year ended March 31, 2005, we had previously determined that, as of the end of fiscal year 2005, there were three material weaknesses in our internal control over financial reporting relating to (i) improper accounting of credits attributable to software contracts executed under our prior business model, which

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resulted in financial statement restatements of prior years, (ii) an ineffective control environment associated with our EMEA region businesses and (iii) improper accounting for recording revenue from renewals of certain prior business model license agreements, which resulted in financial statement restatements of prior years. During fiscal year 2006 numerous steps were taken to remediate these material weaknesses and as of the end of fiscal year 2006 these three material weaknesses were fully remediated.

        We have also made numerous changes in our internal control over financial reporting in order to implement and abide by certain requirements of the Deferred Prosecution Agreement between us and the U.S. Attorney's Office and the Final Consent Judgment between us and the SEC. These changes are described in our Proxy Statement for the 2006 Annual Meeting of Stockholders, under the heading "Audit and Compliance Committee Report—Status of the Company's Compliance with the Deferred Prosecution Agreement and Final Consent Judgment" and "Note 7—Commitments and Contingencies—The Government Investigations" in the Notes to our Consolidated Condensed Financial Statements in our Form 10-K and "Note J—Commitments and Contingencies—The Government Investigations" in the Notes to our Consolidated Financial Statements in our Form 10-Q. The latter two of which are incorporated by reference into this prospectus.

        Furthermore, in the first quarter of fiscal year 2007, we began migrating certain financial and sales processing systems to SAP, an enterprise resource planning ("ERP") system, at our North American operations. This change in information system platform for our financial and operational systems is part of our on-going project to implement SAP at all of our facilities worldwide, which is expected to be completed over the next few years. In connection with the SAP implementation, we are updating our internal control over financial reporting, as necessary, to accommodate modifications to our business and accounting procedures. We believe we are taking the necessary precautions to ensure that the transition to the new ERP system will not have a negative impact on our internal control environment.

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The Exchange Offers

The Exchange Offers	We are offering to exchange $1,000 principal amount of our 4.750% Series B Senior Notes due 2009 registered under the Securities Act of 1933, which we refer to as the "new notes due 2009", for each $1,000 principal amount of our outstanding 4.750% Senior Notes due 2009 issued on November 18, 2004 in a private offering, which we refer to as the "old notes due 2009". We are also offering to exchange $1,000 principal amount of our 5.625% Series B Senior Notes due 2014 registered under the Securities Act of 1933 (the "Securities Act"), which we refer to as the "new notes due 2014", for each $1,000 principal amount of our outstanding 5.625% Senior Notes due 2014 issued on November 18, 2004 in a private offering, which we refer to as the "old notes due 2014". We collectively refer to the old notes due 2009 and the old notes due 2014 as the "old notes" and the new notes due 2009 and the new notes due 2014 as the "new notes". In order to exchange an old note, you must follow the required procedures and we must accept the old note for exchange. We will exchange all old notes validly offered for exchange, or "tendered", and not validly withdrawn. As of the date of this document, there is $500 million aggregate principal amount of old notes due 2009 outstanding and $500 million aggregate principal amount of old notes due 2014 outstanding.
Expiration and Exchange Dates	Our exchange offers expire at 5:00 p.m., New York City time, on •, 2006, unless we extend the deadline. We will complete the exchanges and issue new notes in exchange for the old notes or the old notes will be returned promptly upon expiration or termination of the offers, as applicable.
Accrued Interest on the New Notes and the Old Notes	The new notes will bear interest from June 1, 2006, the last maturity date of any interest installment on which interest was paid on the old notes. If you hold old notes and they are accepted for exchange:
	•	you will waive your right to receive any interest on your old notes accrued from June 1, 2006 to the date the new notes are issued.
	•	you will receive the same interest payment on December 1, 2006, which is the next interest payment date with respect to the old notes and the first interest payment date with respect to the new notes that you would have received had you not accepted the applicable exchange offer.

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Registration Rights	You have the right to exchange old notes of a series that you now hold for new notes of the same series. We intend to satisfy this right by these exchange offers. The new notes of a series will have substantially identical terms to the old notes of the same series, except the new notes will be registered under the Securities Act and will not have any registration rights. After the exchange offers are complete, you will no longer be entitled to any exchange or registration rights with respect to your notes.
Conditions	Each exchange offer is subject to customary conditions, which include, among other things, the absence of any law or rule which would impair our ability to proceed. Each offer applies to any and all old notes of a series validly tendered by the deadline. We will not, however, be required to accept for exchange, or exchange new notes for, any old notes and we may terminate an exchange offer as provided in this document if, in our judgment, any of the conditions listed under "How to Tender Your Old Notes—Conditions" has occurred or exists and, with respect to the first two conditions, has not been satisfied or waived prior to the expiration of the exchange offer.
Resale without Further Registration	We believe that you may offer for resale, resell and otherwise transfer the new notes without complying with the registration and prospectus delivery provisions of the Securities Act if the following is true:
	•	you acquire the new notes issued in that exchange offer in the ordinary course of your business,
	•	you are not an "affiliate", as defined under Rule 405 of the Securities Act, of CA,
	•	you are not participating, and do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the new notes issued to you in that exchange offer.
	By signing the letter of transmittal and exchanging your old notes as described below, you will be making representations to this effect.
	If you are a broker-dealer that acquired old notes of a series as a result of market-making or other trading activities, you must deliver a prospectus in connection with any resale of the new notes of the same series as described in this summary under "Restrictions on Sale by Broker-Dealers" below.

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	We base our belief on interpretations by the SEC staff in no-action letters issued to other issuers in exchange offers like ours. We cannot guarantee that the SEC would make a similar decision about our exchange offers. If our belief is wrong, you could incur liability under the Securities Act. We will not protect you against any loss incurred as a result of this liability under the Securities Act.
Liability under the Securities Act	You also may incur liability under the Securities Act if:
	(1)    any of the representations listed above are not true, and
	(2)    you transfer any new note issued to you in an exchange offer
	without:
	•	delivering a prospectus meeting the requirements of the Securities Act
		or
	•	an exemption from the requirements of the Securities Act to register your new notes.
	We will not protect you against any loss incurred as a result of this liability under the Securities Act.
Restrictions on Sale by Broker-Dealers	If you are a broker-dealer that has received new notes of a series for your own account in exchange for old notes of that series that were acquired as a result of market-making or other trading activities, you must acknowledge in a letter of transmittal that you will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes. A broker-dealer may use this prospectus for 90 days after the last exchange date for an offer to resell, a resale or other retransfer of the new notes issued to it in an exchange offer.
Procedures for Tendering Old Notes	If you hold old notes and want to accept the applicable exchange offer, you must either:
	complete, sign and date the accompanying letter of transmittal, and deliver it, together with your old notes and any other required documents, to the exchange agent, or
	if you hold old notes registered in the name of a broker-dealer, arrange for The Depository Trust Company to give the exchange agent the required information for a book-entry transfer.
	You must mail or otherwise deliver this documentation or information to The Bank of New York, as exchange agent, or The Depository Trust Company at the address under "How to Tender Your Old Notes—Exchange Agent" below.

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Special Procedures for Beneficial Owners	If you hold old notes registered in the name of a broker-dealer, commercial bank, trust company or other nominee and you wish to exchange your old notes in the applicable exchange offer, you should promptly contact the registered holder of the old notes and instruct it to tender on your behalf.
	If you wish to tender on your own behalf, you must, before completing and executing the letter of transmittal for the applicable exchange offer and delivering your old notes, either arrange to have your old notes registered in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take a long time.
Failure to Exchange Will Affect You Adversely	If you are eligible to participate in the exchange offers and you do not tender your old notes, you will not have any further registration or exchange rights and your old notes will continue to be subject to transfer restrictions. These transfer restrictions and the availability of new notes could adversely affect the trading market for your old notes.
Guaranteed Delivery Procedures	If you wish to exchange your old notes and:
	•	you cannot send the required documents to the exchange agent by the expiration date of the applicable exchange offer,
	•	you cannot complete the procedure for book-entry transfer on time, or
	•	your old notes are not immediately available,
	then you must follow the procedures described under "How to Tender Your Old Notes—Guaranteed Delivery Procedures" below.
Withdrawal Rights	You may withdraw your tender at any time before 5:00 p.m., New York City time, on [Date—the business day before the day the offers expire], 2006, unless we have already accepted your offer to exchange your old notes.
Accounting Treatment	We will not recognize a gain or loss for accounting purposes as a result of the exchanges.
Federal Income Tax Consequences	The exchanges will not be taxable events for U.S. federal income tax purposes. This means you will not recognize any taxable gain or loss or any interest income as a result of any exchange.
Exchange Agent	The Bank of New York is the exchange agent for the exchange offers. The Bank of New York is also the trustee under the indenture governing the notes.

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Absence of Appraisal Rights	As a holder of old notes you are not entitled to appraisal or dissenters' rights under Delaware law, the indenture governing the old notes or the indenture that will govern the new notes. See "The Exchange Offers—Terms of the Exchange Offers—No Appraisal or Dissenters' Rights" for more information.
Regulatory Approvals	We do not have to comply with any federal or state regulatory requirements and we do not have to obtain any approvals in connection with the exchange offers.

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The New Notes

The new notes of a series have the same financial terms and covenants as the old notes of the same series. In this document we sometimes refer to the old notes and the new notes together as the "notes". The terms of the new notes are as follows:

Issuer	CA, Inc.
Securities Offered	$500,000,000 aggregate principal amount of 4.750% Series B Senior Notes due 2009 and $500,000,000 aggregate principal amount of 5.625% Series B Senior Notes due 2014.
Maturity	The new notes due 2009 will mature on December 1, 2009 and the new notes due 2014 will mature on December 1, 2014.
Interest Payment Dates	Interest on the old notes began accruing on November 18, 2004, the date we issued the old notes. Interest is payable on the old notes, and will be payable on the new notes, on June 1 and December 1 of each year. The first interest payment date for the new notes will be December 1, 2006.
Optional Redemption	We may redeem all of the notes of each series at any time and some of the notes of each series from time to time, at our option, at a redemption price equal to the greater of (1) 100% of the aggregate principal amount of the notes of such series being redeemed and (2) the sum of the remaining scheduled payments of principal and interest in respect of the notes being redeemed (not including any portion of the payments of interest accrued as of the date of redemption) discounted to its present value, on a semi-annual basis, at the treasury rate plus 15 basis points in the case of the notes due 2009 and 20 basis points in the case of the notes due 2014, plus, in each case, accrued and unpaid interest to the date of redemption. See "Description of the New Notes—Optional Redemption" below.
Ranking	The new notes will be senior unsecured and unsubordinated indebtedness and will rank equally with all of our existing and future senior unsecured and unsubordinated indebtedness. The new notes will be effectively subordinated to all of our existing and future secured indebtedness to the extent of the assets securing that indebtedness and to the indebtedness of our subsidiaries.
Restrictions	The indenture for the notes, among other things, contains restrictions on our ability to:
	•	create liens;
	•	engage in sale and leaseback transactions; and,
	•	consolidate, merge or transfer all or substantially all of our assets.

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These covenants are described in greater detail under "Description of the New Notes" below. These covenants are subject to important exceptions and qualifications, which are also described under "Description of the New Notes" below.

Ratio of Earnings to Fixed Charges

        The following table sets forth our ratios of earnings to fixed charges for the periods indicated.

	Fiscal Year Ended March 31,
									Three-Months Ended June 30, 2006
	2002		2003		2004		2005	2006
	(in millions, except ratios)
Ratio of Earnings to Fixed Charges		n/a		n/a		n/a	1.15	1.74	2.01
Deficiency of Earnings to Fixed Charges	$	1,529	$	495	$	114	n/a	n/a	n/a

        For purposes of this computation, earnings are defined as pre-tax earnings or loss from continuing operations of the Company plus fixed charges. Fixed charges are the sum of (i) interest expensed, (ii) amortization of deferred financing costs and debt discounts and (iii) the portion of operating lease rental expense that is representative of the interest factor (deemed to be one third). The ratio of earnings to fixed charges of the Company was less than 1.00 for the years ended March 31, 2002, 2003 and 2004; thus earnings available for fixed charges were inadequate to cover fixed charges for such periods. The deficiency in earnings to fixed charges for the years ended March 31, 2002, 2003 and 2004 was $1,529 million, $495 million and $114 million, respectively.

15

RISK FACTORS

You should consider carefully the risk factor described below, together with the other matters described in this document or incorporated by reference, including under "Risk Factors" in our Form 10-K and our Form 10-Q before deciding to exchange your old notes for new notes. The risk factors below and in our Form 10-K and our Form 10-Q apply to both the old notes and the new notes.

If you do not participate in the applicable exchange offer, it may be harder for you to resell and transfer your old notes.

        The old notes were not registered under the Securities Act or under the securities laws of any state. Thus, you may not resell the old notes, offer them for resale or otherwise transfer them unless they are subsequently registered or resold under an exemption from the registration requirements of the Securities Act and applicable state securities laws. If you do not exchange your old notes of a series for new notes of the same series in the applicable exchange offer, or if you do not properly tender your old notes in the applicable exchange offer, you will not be able to resell, offer to resell or otherwise transfer your old notes unless they are registered under the Securities Act or unless you resell them, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act. In addition, you will no longer be able to obligate us to register your old notes under the Securities Act.

16

USE OF PROCEEDS

        We will not receive any cash proceeds from the issuance of the new notes as described in this document. We will receive in exchange old notes in like principal amount. The old notes of a series surrendered in exchange for the new notes of the same series will be retired and canceled and cannot be reissued. Therefore, the issuance of the new notes will not result in any change in our indebtedness.

        We used the cash proceeds from the issuance of the old notes to repay $825 million aggregate principal amount outstanding of our 6.375% senior notes due in April 2005 and for general corporate purposes.

17

THE EXCHANGE OFFERS

Why We Are Offering to Exchange Your Old Notes of a Series for New Notes of the Same Series

        We originally sold the outstanding 4.750% Senior Notes due 2009 and 5.625% Senior Notes due 2014 on November 18, 2004, in a transaction exempt from the registration requirements of the Securities Act. Banc of America Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Barclays Capital Inc., BNP Paribas Securities Corp., KeyBanc Capital Markets, Mitsubishi Securities International plc, Wachovia Capital Markets, LLC, ABN AMRO Incorporated and Scotia Capital (USA) Inc., as the initial purchasers, then resold the notes to qualified institutional buyers under Rule 144A under the Securities Act and to persons in offshore transactions under Regulation S under the Securities Act. As of the date of this document, $500 million aggregate principal amount of the notes due 2009 and $500 million aggregate principal amount of the notes due 2014 is outstanding.

        As a condition to the initial sale of the old notes, we entered into a registration rights agreement with the initial purchasers under which we agreed that we would, at our cost:

(1)

file an exchange offer registration statement under the Securities Act with the SEC by July 16, 2005,



(2)

use our best efforts to cause the exchange offer registration statement to be declared effective under the Securities Act by September 24, 2005,



(3)

commence and complete the exchange offers promptly, but by no later than October 24, 2005, and



(4)

keep each exchange offer open for not less than 20 business days (or longer if required by applicable law) after the date notice of each exchange offer is mailed to holders of the old notes.

        We agreed to issue and exchange the new notes of a series for all old notes of the same series that are tendered and not withdrawn before the applicable exchange offer expires.

        We have filed a copy of the registration rights agreement as Exhibit 4.3 to our Current Report on Form 8-K dated November 15, 2004, and it is incorporated by reference to the registration statement of which this document is a part. We intend to satisfy some of our obligations under the registration rights agreement with the registration statement.

Terms of the Exchange Offers

        Timing of the Exchange Offers.    We are offering the new notes of a series in exchange for your old notes of the same series. We will keep each exchange offer open for at least 20 business days, or longer if required by applicable law, after the date notice of the exchange offer is mailed to the holders of the old notes.

        You May Tender Your Old Notes Only in Multiples of $1,000.    On the terms and subject to the conditions in this document and in the accompanying letter of transmittal, we will accept any and all old notes validly tendered and not validly withdrawn before 5:00 p.m., New York City time, on [Exchange Date]. We will issue $1,000 principal amount of new notes of a series in exchange for each $1,000 principal amount of outstanding old notes of the same series accepted in the applicable exchange offer. You may tender some or all of your old notes under the applicable exchange offer. However, you may tender old notes only in multiples of $1,000.

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        Form and Terms of the New Notes.    The form and terms of the new notes of a series will be the same as the form and terms of the old notes of the same series except that:

•

the new notes will have a different CUSIP number from the old notes,



•

the new notes will be registered under the Securities Act and will not have legends restricting their transfer,



•

the new notes will not contain terms providing for payment of liquidated damages under circumstances relating to the timing of the exchange offers, as described under "Liquidated Damages" below and



•

holders of the new notes will not be entitled to any registration rights under the registration rights agreement because these rights will terminate when the applicable exchange offer is completed.

        The new notes of a series will evidence the same debt as the old notes of the same series and will be issued under, and be entitled to the benefits of, the indenture governing the old notes. We will treat the old notes and new notes of the same series as a single class of debt securities under the indenture.

        Who Will Receive This Document.    We will mail this document and the letter of transmittal to all registered holders of the old notes as of [Record Date].

        No Appraisal or Dissenters' Rights.    In connection with the exchange offers, you do not have any appraisal or dissenters' rights under the General Corporation Law of the State of Delaware or the indenture governing the old notes. We intend to conduct the exchange offers in accordance with the registration rights agreement, the applicable requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the SEC relating to exchange offers.

        Acceptance of Tendered Old Notes.    We will be deemed to have accepted validly tendered old notes when, as and if we have given oral or written notice of acceptance to The Bank of New York, as the exchange agent for the exchange offers. The exchange agent will act as agent for the tendering holders for the purpose of receiving the new notes from us.

        If we do not accept your old notes tendered for exchange because you:

•

invalidly tendered your old notes, or



•

some other events specified in this document have occurred, or



•

you submitted your old notes for a greater principal amount than you wanted to exchange,

we will return the certificates for the unaccepted old notes, without expense, to you. If you tender old notes by book-entry transfer in the exchange agent account at The Depository Trust Company in accordance with the book-entry transfer procedures described below, any non-exchanged old notes will be credited to an account maintained with The Depository Trust Company promptly after the expiration date of the applicable exchange offer.

Expiration Date

        Each exchange offer will expire at 5:00 p.m., New York City time, on    •    , 2006, unless we extend an exchange offer in our sole discretion. If we extend an exchange offer, the expiration date is the latest date and time to which we extend that exchange offer.

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We Can Amend or Extend an Exchange Offer

        We can extend an exchange offer. To do so we must:

•

notify the exchange agent of any extension either orally or in writing, and



•

make an announcement of the extension before 9:00 a.m., New York City time, on the next business day after the previous date that exchange offer was scheduled to expire.

        We also reserve the right to:

•

delay accepting any old notes, or



•

terminate an exchange offer and refuse to accept any old notes not previously accepted if either of the first two conditions described below under "How to Tender Your Old Notes—Conditions" shall have occurred and they have not been satisfied or we have not waived them prior to expiration of the exchange offer.

If we delay, extend or terminate an exchange offer, we must give oral or written notice to the exchange agent.

        We may also amend the terms of an exchange offer in any way we determine is advantageous to holders of the old notes. If this change is material, we will promptly disclose that amendment in a manner reasonably calculated to inform holders of the old notes and we will extend the offer period if necessary so that five business days remain in the offer following notice of the material change.

        We do not have to publish, advertise or otherwise communicate any public announcement of any delay, extension, amendment or termination that we may choose to make, other than by making a timely release to the Dow Jones News Service.

Interest on the New Notes

        Interest is payable on the old notes, and will be payable on the new notes, on June 1 and December 1 of each year. The new notes will accrue interest on the same terms as the old notes, at the rate of 4.750% per year for the notes due 2009 and at the rate of 5.625% per year for the notes due 2014 from June 1, 2006, the last maturity date of any interest installment on which interest was paid on the old notes. If you hold old notes and they are accepted for exchange you will waive your right to receive any payment in respect of interest on your old notes accrued from June 1, 2006 to the date the new notes are issued. Thus, if you exchange your old notes for new notes you will receive the same interest payment on December 1, 2006, which is the next interest payment date with respect to the old notes and the first interest payment date with respect to the new notes, that you would have received had you not accepted the applicable exchange offer.

Resale of the New Notes

        We believe that you will be allowed to resell the new notes to the public without registration under the Securities Act and without delivering a prospectus that satisfies the requirements of the Securities Act, if you can make the representations set forth in the letter of transmittal, described in "How To Tender Your Old Notes—Representations on Tendering Old Notes". If you intend to participate in a distribution of new notes, however, you must comply with the registration requirements of the Securities Act and deliver a prospectus, unless an exemption from registration is otherwise available. In addition, you cannot be an "affiliate" of CA, as defined in Rule 405 under the Securities Act. You must represent to us in the letter of transmittal accompanying this document that you meet these conditions exempting you from the registration requirements.

        We base our view on interpretations by the staff of the SEC in no-action letters issued to other issuers in exchange offers like ours. We have not, however, asked the SEC to consider this particular

20

exchange offer in the context of a no-action letter. Therefore, you cannot be sure that the SEC will treat these exchange offers in the same way it has treated other exchange offers in the past. If our belief is wrong, you could incur liability under the Securities Act. We will not protect you against any loss incurred as a result of this liability under the Securities Act.

        A broker-dealer that has bought old notes of a series for market-making or other trading activities must deliver a prospectus in order to resell any new notes of the same series it has received for its own account in the exchange. A broker-dealer may use this prospectus to resell any of its new notes. We agreed in the registration rights agreement to make this prospectus, and any amendment or supplement to this prospectus, available to any broker-dealer that requests copies until 90 days after the last exchange date for use in connection with a resale. See "Plan of Distribution" below for more information regarding broker-dealers.

Shelf Registration Statement

        We will file a shelf registration statement with the SEC if:

(1)

applicable law or SEC policy does not permit the exchange offer, or



(2)

the exchange offer is not completed by September 24, 2005.

        The shelf registration statement will register the old notes for public resale. We will use our best efforts to cause the shelf registration statement to become effective and to keep the shelf registration statement effective until November 18, 2006.

Liquidated Damages

        We will have to pay higher annual interest rates on the notes if:

•

we fail to file either an exchange offer registration statement or a shelf registration statement with the SEC by July 16, 2005,



•

either the exchange offer registration statement or the shelf registration statement is not declared effective by the SEC by September 24, 2005,



•

the exchange offer is not consummated by October 24, 2005, or



•

after the exchange offer registration statement or the shelf registration statement, as the case may be, is declared effective by the SEC, that registration statement ceases to be effective or usable (subject to certain exceptions).

        Each of these events is termed a "Registration Default". The rate of additional interest will be at a rate of 0.25% per year from and including the date that any Registration Default occurs for the first 90 days after the date the Registration Default occurs, increasing thereafter by 0.25% per year regardless of the number of Registration Defaults until all Registration Defaults have been cured. In no event can the rate of additional interest exceed 0.50% per year regardless of the number of Registration Defaults.

HOW TO TENDER YOUR OLD NOTES

Procedures for Tendering

        To tender your old notes in the applicable exchange offer, you must do the following:

•

properly complete, sign and date the letter of transmittal or a facsimile of the letter of transmittal,

21

•

if the letter of transmittal so requires, have the signatures on the letter of transmittal or facsimile of the letter of transmittal guaranteed and



•

mail or otherwise deliver the letter of transmittal, or facsimile, together with your old notes and any other required documents, to the exchange agent before 5:00 p.m., New York City time, on the expiration date of the applicable exchange offer.

        In order for the tender to be effective, the exchange agent must receive the old notes, a completed letter of transmittal and all other required documents before 5:00 p.m., New York City time, on the applicable expiration date.

        You may also deliver your old notes by using the book-entry transfer procedures described below. DTC authorizes its participants that hold old notes on behalf of beneficial owners of old notes through DTC to tender their old notes as if they were holders. To effect a tender of old notes, DTC participants should:

•

complete and sign the letter of transmittal or a manually signed facsimile of the letter,



•

have the signature on the letter of transmittal or facsimile of the letter of transmittal guaranteed if the instructions to the letter of transmittal so require,



•

mail or deliver the letter of transmittal, or the manually signed facsimile, to the exchange agent according to the procedure described under "Procedures for Tendering" above and



•

transmit their acceptance to DTC through its automated tender offer program for which the transaction will be eligible and follow the procedure for book-entry transfer described below under "Book-Entry Transfer".

You must follow all procedures to effect a valid tender. Delivery of documents to DTC in accordance with its procedures does not constitute delivery to the exchange agent.

        By tendering, you will make the representations described under the heading "Representations on Tendering Old Notes". In addition, each participating broker-dealer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. See "Plan of Distribution".

        Your tender and our acceptance of the tender will constitute the agreement between you and us set forth in this document and in the letter of transmittal.

You have the sole risk of the method you choose to have the old notes and the letter of transmittal and all other required documents delivered to the exchange agent.

        As an alternative to delivery by mail, holders may wish to consider overnight or hand delivery service. In all cases, you should allow sufficient time to assure delivery to the exchange agent before the applicable expiration date. No letter of transmittal, old notes or book-entry confirmation should be sent to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or nominees to effect the above transactions on their behalf.

Beneficial Owners

        If you hold old notes and your old notes are registered in the name of a broker-dealer, commercial bank, trust company or other nominee and you wish to tender your old notes, you should contact the registered holder promptly and instruct it to tender on your behalf. See "Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included with the letter of transmittal.

        If you hold old notes that are registered as described above and you want to tender on your own behalf, you must, before completing and executing the letter of transmittal and delivering your old notes, either make appropriate arrangements to register ownership of the old notes in your name or

22

obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take a long time.

Signatures on Letter of Transmittal

        Generally, an eligible guarantor institution must guarantee signatures on a letter of transmittal or a notice of withdrawal unless the old notes are tendered:

•

by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal, or



•

for the account of an eligible guarantor institution.

        An "eligible guarantor institution" is:

•

a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc.,



•

a commercial bank or trust company having an office or correspondent in the United States, or



•

an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act which is a member of one of the recognized signature guarantee programs identified in the letter of transmittal.

        If a person other than the registered holder of any old notes listed in the letter of transmittal signed the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power. The bond power must authorize this person to tender the old notes on behalf of the registered holder and must be signed by the registered holder as the registered holder's name appears on the old notes.

        If trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity sign the letter of transmittal or any old notes or bond powers, these persons should so indicate when signing, and unless waived by us, submit with the letter of transmittal evidence satisfactory to us of their authority to so act.

Book-Entry Transfer

        Within two business days after the date of this prospectus, the exchange agent will establish a new account or utilize an existing account with respect to the old notes at the book-entry transfer facility, The Depository Trust Company, for the purpose of facilitating the exchange offers. Subject to the establishment of the accounts, any financial institution that is a participant in DTC's system may make book-entry delivery of the old notes by causing DTC to transfer the old notes into the exchange agent's account with respect to the old notes in accordance with DTC's procedures. Although delivery of the old notes may be effected through book-entry transfer into the exchange agent's account at DTC, the exchange agent must receive an appropriate letter of transmittal properly completed and duly executed with any required signature guarantee or an agent's message and all other required documents at its address listed below under "Exchange Agent" on or before the expiration date of the applicable exchange offer, or, if the guaranteed delivery procedures described below are complied with, within the time period provided under those procedures.

Delivery of Documents to DTC Does Not Constitute Delivery to the Exchange Agent

        The term "agent's message" means a message transmitted by DTC to, and received by, the exchange agent, which states that DTC has received an express acknowledgment from the participant in DTC tendering the old notes stating:

•

the aggregate principal amount of the old notes which have been tendered by the participant,

23

•

that the participant has received, and agrees to be bound by, the terms of the letter of transmittal and



•

that we may enforce this agreement against the participant.

        Delivery of an agent's message will also constitute an acknowledgment from the tendering DTC participant that the representations contained in the letter of transmittal and described below in this document are true and correct.

Acceptance of Tendered Notes

        We will determine, in our sole discretion, all questions as to the validity, form, acceptance, withdrawal and eligibility, including time of receipt, of tendered old notes. We reserve the absolute right:

•

to reject any and all old notes not properly tendered,



•

to reject any old notes if our acceptance would, in the opinion of our counsel, be unlawful, or



•

to waive any irregularities or conditions of tender as to particular old notes.

        Our interpretation of the terms and conditions of the exchange offers, including the instructions in the letter of transmittal, will be final and binding on all parties.

        Unless waived, you must cure any defects or irregularities in connection with tenders of old notes within a period of time that we will determine. Neither we, nor the exchange agent, nor any other person will be liable for failure to give notice of any defect or irregularity with respect to any tender of old notes. We will not deem a tender of an old note to have been made until the defects or irregularities mentioned above have been cured or waived.

        The exchange agent will return to the tendering holders any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived, unless otherwise provided in the letter of transmittal, promptly after the applicable exchange offer expires.

Representations on Tendering Old Notes

        By surrendering old notes of a series in the applicable exchange offer, you will be telling us that, among other things:

•

you are acquiring the new notes of the same series issued in that exchange offer in the ordinary course of your business,



•

you are not an "affiliate", as defined in Rule 405 under the Securities Act, of CA,



•

you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate, in the distribution of the new notes issued to you in that exchange offer,



•

you have full power and authority to tender, sell, assign and transfer the old notes tendered,



•

we will acquire good, marketable and unencumbered title to the old notes being tendered, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sale agreements or other obligations relating to their sale or transfer, and not subject to any adverse claim when the old notes are accepted by us, and



•

you acknowledge and agree that if you are a broker-dealer registered under the Exchange Act or you are participating in that exchange offer for the purposes of distributing the new notes, you must comply with the registration and prospectus delivery requirements of the Securities Act in

24

connection with a secondary resale of the new notes, and you cannot rely on the position of the SEC's staff in their no-action letters.

        If you are a broker-dealer and you will receive new notes of a series for your own account in exchange for old notes of the same series that were acquired as a result of market-making activities or other trading activities, you will be required to acknowledge in the letter of transmittal that you will deliver a prospectus in connection with any resale of the new notes.

Guaranteed Delivery Procedures

        If you wish to tender your old notes and:

•

you cannot deliver your old notes, the letter of transmittal or any other required documents to the exchange agent before the applicable expiration date,



•

you cannot complete the procedure for book-entry transfer before the applicable expiration date, or



•

your old notes are not immediately available in order for you to meet the applicable expiration date deadline,

        then you may participate in the applicable exchange offer if:

(1)

the tender is made through an eligible institution,



(2)

before the applicable expiration date, the exchange agent receives from the eligible guarantor institution a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by us, by facsimile transmission, mail or hand delivery, containing:



•

the name and address of the holder of the old notes, the certificate number or numbers of the old notes and the principal amount of old notes tendered,



•

a statement that the tender is being made thereby, and



•

a guarantee that, within five business days after the applicable expiration date, the eligible guarantor institution will deposit the letter of transmittal or facsimiles of the letter of transmittal, together with the certificate or certificates representing the old notes in proper form for transfer or an agent's message and a confirmation of book-entry transfer of the old notes into the exchange agent's account at DTC, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent, and



(3)

the exchange agent receives, within five business days after the applicable expiration date:



•

a properly completed and executed letter of transmittal or facsimile or an agent's message in the case of a book-entry transfer,



•

the certificate or certificates representing all tendered old notes in proper form for transfer or a confirmation of book-entry transfer of the old notes into the exchange agent's account at the book-entry transfer facility, and



•

all other documents required by the letter of transmittal.

25

Withdrawal of Tenders

        Except as otherwise provided in this document, you may withdraw your tender of old notes at any time before 5:00 p.m., New York City time, on the business day immediately preceding the date the applicable exchange offer expires.

        To withdraw a tender of old notes in an exchange offer, the exchange agent must receive a letter or facsimile notice of withdrawal at its address set forth below under "Exchange Agent" before 5:00 p.m., New York City time, on the business day immediately preceding the applicable expiration date. Any notice of withdrawal must:

•

specify the name of the person who deposited the old notes to be withdrawn,



•

identify the old notes to be withdrawn including the certificate number or numbers and aggregate principal amount of old notes to be withdrawn or, in the case of old notes transferred by book-entry transfer, the name and number of the account at DTC to be credited and otherwise comply with the procedures of the transfer agent,



•

be signed by the holder in the same manner as the original signature on the letter of transmittal by which the old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee under the indenture governing the old notes register the transfer of the old notes into the name of the person withdrawing the tender, and



•

specify the name in which the old notes being withdrawn are to be registered, if different from that of the person who deposited the notes.

        We will determine in our sole discretion all questions as to the validity, form and eligibility, including time of receipt, of notices of withdrawal. Our determination will be final and binding on all parties. Any old notes withdrawn in this manner will be deemed not to have been validly tendered for purposes of the applicable exchange offer. We will not issue new notes unless the old notes withdrawn in this manner are validly retendered. We will return to you any old notes that you have tendered but that we have not accepted for exchange without cost promptly after withdrawal, rejection of tender or termination of the applicable exchange offer. You may retender properly withdrawn old notes by following one of the procedures described above under "Procedures for Tendering" at any time before the applicable expiration date.

Conditions

        Despite any other term of the exchange offers, we will not be required to accept for exchange, or exchange new notes for, any old notes and we may terminate an exchange offer as provided in this document, if in our judgment, any of the conditions listed below has occurred or exists and, with respect to the first two conditions listed below, has not been satisfied or waived prior to the expiration of the exchange offer:

•

any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to that exchange offer which, in our reasonable judgment, might materially impair our ability to proceed with that exchange offer,



•

any law, statute, rule or regulation is proposed, adopted or enacted, or the staff of the SEC interprets any existing law, statute, rule or regulation in a manner, which, in our reasonable judgment, might materially impair our ability to proceed with that exchange offer, or



•

any governmental approval, which we deem necessary for the consummation of the exchange offer, has not been obtained.

26

        The conditions listed above are for our sole benefit and we may assert these rights regardless of the circumstances giving rise to any of these conditions. We may waive these conditions in our reasonable discretion in whole or in part at any time and from time to time. If we fail at any time to exercise any of the above rights, the failure will not be deemed a waiver of those rights, and those rights will be deemed ongoing rights which may be asserted at any time and from time to time.

        If we determine in our reasonable discretion that we may terminate an exchange offer, we may:

•

refuse to accept any old notes and return all tendered old notes to the tendering holders, or



•

extend that exchange offer and retain all old notes tendered before that exchange offer expires, subject, however, to the rights of holders to withdraw these old notes, or



•

waive unsatisfied conditions with respect to that exchange offer and accept all properly tendered old notes that have not been withdrawn. If this waiver constitutes a material change to that exchange offer, we will disclose this change by means of a prospectus supplement that will be distributed to the registered holders of the old notes to which that exchange offer relates. If that exchange offer would otherwise expire, we will extend it for 5-10 business days, depending on how significant the waiver is and the manner of disclosure to registered holders.

Exchange Agent

        We have appointed The Bank of New York as the exchange agent for the exchange offers. You should direct any questions, requests for assistance and requests for additional copies of this document or of the letter of transmittal to The Bank of New York, as follows:

By Mail, Hand or Overnight Courier:

The Bank of New York
Corporate Trust Operations
Reorganization Unit
101 Barclay Street—7E
New York, New York 10286
Attention: Carolle Montreuil

By Facsimile:

(212) 815-1915

Confirm by Telephone:

(212) 815-5920

        The Bank of New York is also the trustee under the indenture governing the notes.

Fees and Expenses

        We will pay the expenses of these exchange offers. We are making the principal solicitation for tenders of old notes by mail. Our officers and regular employees, however, may make additional solicitation by telegraph, facsimile, e-mail, telephone or in person. We have not retained any dealer-manager in connection with the exchange offers and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offers. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with providing the services. We may also reimburse brokerage houses and other custodians, nominees and fiduciaries for their out-of-pocket expenses incurred in forwarding copies of this document, letters of transmittal and related documents to beneficial holders of the old notes.

27

        We will pay any transfer taxes applicable to the exchange of old notes. If, however, a transfer tax is imposed for any reason other than the exchange, then the person surrendering the notes will pay the amount of any transfer taxes. If you do not submit satisfactory evidence of payment of taxes or of an exemption with the letter of transmittal, we will bill you directly for the amount of those transfer taxes.

Accounting Treatment

        We will record the new notes of a series at the same carrying value as the old notes of the same series as reflected in our accounting records on the date of exchange. Therefore, we will not recognize a gain or loss for accounting purposes. The expenses associated with the exchange offers will be expensed as incurred. We will continue to amortize the unamortized debt issuance costs of the old notes over the term of the new notes.

Voluntary Participation

You do not have to participate in the exchange offer applicable to your old notes. You should carefully consider whether to accept the terms and conditions of the applicable offer. We urge you to consult your financial and tax advisors in deciding what action to take with respect to the applicable exchange offer. See "Risk Factors—If you do not participate in the applicable exchange offer, it may be harder for you to resell and transfer your old notes" for more information about the risks of not participating in the exchange offer applicable to your old notes.

Consequences of Failure to Exchange

        If you are eligible to participate in an exchange offer but do not tender your old notes, you will not have any further registration rights and your old notes will continue to be subject to transfer restrictions. Accordingly, you may resell your old notes that are not exchanged only:

•

to us, on redemption of notes or otherwise,



•

so long as the old notes are eligible for resale under Rule 144A under the Securities Act, to a person whom you reasonably believe is a "qualified institutional buyer" within the meaning of Rule 144A purchasing for its own account or for the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A,



•

in accordance with Rule 144 under the Securities Act or another exemption from the registration requirements of the Securities Act,



•

outside the U.S. to a foreign person in accordance with the requirements of Regulation S under the Securities Act, or



•

under an effective registration statement under the Securities Act, in each case in accordance with all other applicable securities laws.

Regulatory Approvals

        We do not have to comply with any federal or state regulatory requirements and we do not have to obtain any approvals in connection with the exchange offers.

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DESCRIPTION OF THE NEW NOTES

        We issued the old notes, and will issue the new notes, under the indenture, dated as of November 18, 2004, between us and The Bank of New York, as trustee. The following description of the material provisions of the indenture is only a summary. It does not set out the indenture in its entirety. We urge you to read the indenture because it, and not this description, defines your rights as a holder of the notes.

        In this section, the terms the "Company", "we", "us" and "our" refer to CA, Inc. and not to any of the subsidiaries. The definitions of some capitalized terms used in the following summary are set forth below under "Certain Definitions".

        We will consider the old notes of a series and the new notes of the same series collectively to be a single class for all purposes under the indenture, including waivers, amendments, redemptions and offers to purchase.

General

        The notes due 2009 and the notes due 2014 will constitute two separate series of securities under the indenture and will each be limited initially to $500,000,000 aggregate principal amount. The new notes will be issued only in fully registered form, without coupons, in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The new notes due 2009 will mature on December 1, 2009 and the new notes due 2014 will mature on December 1, 2014 (each date is referred to as the "stated maturity date" with respect to each series of notes), unless earlier redeemed by us, and upon surrender will be repaid at 100% of the principal amount thereof. Principal and interest on the new notes are payable in immediately available funds in U.S. dollars, or in such other coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

        The new notes due 2009 and the new notes due 2014 will bear interest at the rate of 4.750% and 5.625% per annum, respectively, from June 1, 2006, or from the most recent interest payment date to which interest has been paid or provided for. Interest on the new notes shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest on the new notes will be payable semi-annually on each June 1 and December 1 (each such date is referred to as an "interest payment date"), beginning on December 1, 2006, until the principal amount has been paid or made available for payment, to holders of notes at the close of business on the May 15 or November 15, as the case may be, immediately preceding the applicable interest payment date.

        Principal of, premium, if any, and interest on, the new notes will be payable, and the new notes may be exchanged or transferred, at the office or agency of the Company in the Borough of Manhattan, The City of New York (which initially shall be the corporate trust office of the trustee, at 101 Barclay Street, Floor 8W, New York, New York 10286), except that, at the option of the Company, payment of interest may be made by check mailed to the registered holders of the new notes at their registered addresses. No service charge will be made for any registration of transfer or exchange of new notes, but the Company may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection with such transfer or exchange.

        In any case where the date of payment of the principal of or interest on the new notes or the date fixed for redemption of the new notes shall not be a "Business Day" (as defined below), then payment of principal or interest need not be made on such date at such place but may be made on the next succeeding Business Day, with the same force and effect as if made on the applicable payment date or the date fixed for redemption, and no interest shall accrue for the period after such date. A "Business Day" shall mean a day which is not, in New York City, a Saturday, Sunday, a legal holiday or a day on which banking institutions are authorized or obligated by law to close.

29

        We may issue additional notes under the indenture having the same terms in all respect as the notes of either series (other than the issue date, initial interest accrual date and, in some circumstances, the initial interest payment date). The new notes of each series registered hereby and any additional notes of such series will be consolidated with and form a single series for all purposes under the indenture, will vote together as one class on all matters, will bear the same CUSIP number and will be fungible to the extent specified.

Optional Redemption

        The notes of each series will be redeemable, at our option, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days' notice. Upon redemption of the notes of a series, we will pay a redemption price equal to the greater of (1) 100% of the principal amount of the notes to be redeemed and (2) the sum of the present values of the Remaining Scheduled Payments (as defined below) of the notes to be redeemed, discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 15 basis points in the case of the notes due 2009 and 20 basis points in the case of the notes due 2014, plus in each case, accrued interest thereon to the redemption date.

        "Treasury Rate" means, for any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity, computed as the second Business Day immediately preceding that redemption date, of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.

        "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes.

        "Comparable Treasury Price" means, with respect to any redemption date, (1) the average of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, on the third Business Day preceding such redemption date, as contained in the daily statistical release, or any successor release, published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (2) if the release, or any successor release, is not published or does not contain these prices on that business day, (a) the average of the Reference Treasury Dealer Quotations for this redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations, or (b) if the trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of all of these quotations.

        "Independent Investment Banker" means the Reference Treasury Dealer appointed by us.

        "Reference Treasury Dealer" means each of Banc of America Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and their successors and one other nationally recognized investment banking firm that is a primary U.S. Government securities dealers specified from time to time by us so long as the entity is a primary U.S. Government securities dealer.

        "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

        "Remaining Scheduled Payments" means, with respect to each note to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related

30

redemption date for such redemption; provided, however, that, if such redemption date is not an interest payment date with respect to such note, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to such redemption date.

        Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of notes to be redeemed. If less than all the notes of a series are to be redeemed, the notes to be redeemed shall be selected by the trustee by such method as the trustee deems fair and appropriate. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the notes or portions thereof called for redemption.

        Except as described above, the notes will not be redeemable by us prior to maturity and will not be entitled to the benefit of any sinking fund.

Ranking

        The new notes will be our unsecured and unsubordinated obligations and will rank equally in right of payment with all of our existing and future senior unsecured and unsubordinated obligations. The new notes are structurally subordinated to the indebtedness of our subsidiaries and effectively subordinated to our secured indebtedness to the extent of the value of the assets securing such indebtedness.

        We are obligated to pay reasonable compensation to the trustee and to indemnify the trustee against certain losses, liabilities and expenses incurred by the trustee in connection with its duties relating to the notes. The trustee's claims for these payments will generally be senior to those of holders of notes in respect of all funds collected or held by the trustee.

        The notes are exclusively our obligations. As a result, our cash flow and our ability to service our indebtedness, including the notes, is partially dependent upon the earnings of our subsidiaries. In addition, we are particularly dependent on the distribution of earnings, loans or other payments by our subsidiaries to us. Our subsidiaries are separate and distinct legal entities. Our subsidiaries have no obligation to pay any amounts due on the notes or to provide us with funds for our payment obligations, whether by dividends, distributions, loans or other payments. In addition, any payment of dividends, distributions, loans or advances by our subsidiaries to us could be subject to statutory or contractual restrictions. Payments to us by our subsidiaries will also be contingent upon our subsidiaries' earnings and business considerations. Our right to receive any assets of any subsidiary upon its liquidation or reorganization, and, therefore, our right to participate in those assets, will be effectively subordinated to the claims of that subsidiary's creditors, including trade creditors. In addition, even if we were a creditor of any of our subsidiaries our right as a creditor would be subordinate to any security interest in the assets of our subsidiaries and any indebtedness of our subsidiaries senior to the indebtedness held by us.

Covenants

        Except as discussed below, we are not restricted by the indenture from:

•

incurring any type of indebtedness or other obligation;



•

paying dividends or making distributions on our capital stock; or



•

purchasing or redeeming our capital stock.

        We are not required to maintain any financial ratios or specified levels of net worth or liquidity.

        In addition, we are not required to repurchase or redeem or otherwise modify the terms of the notes upon a change in control or other events involving the Company which may adversely affect the creditworthiness of the notes.

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        The indenture contains various covenants, including, among others, the following:

        Limitations on Liens.    Neither we nor any Restricted Subsidiary will, directly or indirectly, issue, incur, create, assume or guarantee any indebtedness secured by a mortgage, security interest, pledge, lien, charge or other encumbrance upon any of our Principal Property or upon any shares of stock or indebtedness of any Restricted Subsidiary (whether such Principal Property, shares or indebtedness are now existing or owned or hereafter created or acquired) unless prior to or at the same time, the notes are equally and ratably secured with or, at our option, prior to, such secured indebtedness. Mortgages, security interests, pledges, liens, charges and other encumbrances are collectively referred to in this offering circular as "mortgages."

        This restriction does not apply to:

(1)

mortgages on property, shares of stock or indebtedness or other assets existing at the time any corporation becomes a Restricted Subsidiary of ours or of any of our subsidiaries; provided that such mortgage was not incurred in anticipation of the corporation becoming a Restricted Subsidiary;



(2)

mortgages on property, shares of stock or indebtedness existing at the time of acquisition by us, or any Restricted Subsidiary (which may include property previously leased by us and leasehold interests on the property, provided that the lease terminates prior to or upon the acquisition) or mortgages on property, shares of stock or indebtedness to secure the payment of all or any part of the purchase price of the property, shares of stock or indebtedness, or mortgages on property, shares of stock or indebtedness to secure any indebtedness for borrowed money incurred prior to, at the time of, or within 270 days after, the latest of the acquisition, or, in the case of property, the completion of construction, the completion of improvements or the beginning of substantial commercial operation of such property for the purpose of financing all or any part of the purchase price of the property, the construction or the making of the improvements;



(3)

mortgages in favor of us;



(4)

mortgages existing at the date of the indenture;



(5)

mortgages on property or other assets of a corporation existing at the time a corporation is merged into or consolidated with either of us or any Restricted Subsidiary or at the time of a sale, lease or other disposition of the properties of a corporation as an entirety or substantially as an entirety to either of us or any of our Restricted Subsidiaries, provided that this mortgage was not incurred in anticipation of the merger or consolidation or sale, lease or other disposition;



(6)

mortgages in favor of the United States of America or any state, territory or possession thereof (or the District of Columbia), to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of constructing or improving the property subject to such mortgages;



(7)

mortgages created in connection with a project financed with, and created to secure, a Nonrecourse Obligation;



(8)

mortgages securing all of the notes; or



(9)

extensions, renewals or replacements of any mortgage referred to in clauses (1) through (8) without increase of the principal of the indebtedness secured by the mortgage; provided, however, that any mortgages permitted by any of clauses (1) through (8) shall not extend to or

32

cover any property of the Company or any Restricted Subsidiary, as the case may be, other than the property specified in these clauses and improvements to this property.

        We and any Restricted Subsidiary are permitted to issue, incur, create, assume or guarantee indebtedness secured by a mortgage which we would otherwise not be permitted to without equally and ratably securing the notes, if after giving effect to the indebtedness, the aggregate amount of all indebtedness secured by mortgages (not including mortgages permitted under clauses (1) through (9) above) does not exceed 10% of our Consolidated Net Assets.

        Limitation on Sale/Leaseback Transactions.    Neither we nor any Restricted Subsidiary will enter into any sale/leaseback transaction with respect to any Principal Property, whether now owned or hereafter acquired by us or any Restricted Subsidiary unless:

(a)

we or such Restricted Subsidiary would be able to incur indebtedness secured by a mortgage on the Principal Property involved in the transaction at least equal in amount to the Attributable Debt with respect to the sale/leaseback transaction, without equally and ratably securing the notes under the covenant described in "—Limitations on Liens" above; or



(b)

the proceeds of the sale of the Principal Property to be leased are at least equal to such property's fair market value, as determined by the board of directors of the Company, and the proceeds are applied within 180 days of the effective date of the sale/leaseback transaction to the purchase, construction, development or acquisition of assets or to the repayment of indebtedness of us or any Restricted Subsidiary.

        This restriction does not apply to transactions:

(1)

entered into prior to the date of the indenture;



(2)

between us and any Restricted Subsidiary or between Restricted Subsidiaries;



(3)

under which the rent payable pursuant to such lease is to be reimbursed under a contract with the U.S. Government or any instrumentality or agency thereof;



(4)

involving leases for no longer than three years; or



(5)

in which the lease for the property or asset is entered into within 270 days after the later of the date of acquisition, completion of construction or commencement of full operations of such property or asset.

        A "sale/leaseback transaction" means an arrangement relating to property now owned or hereafter acquired whereby either we transfer, or any Restricted Subsidiary transfers, such property to a person and either we or any Restricted Subsidiary leases it back from such person.

        Notwithstanding the restrictions outlined in the preceding paragraph, we and any Restricted Subsidiary will be permitted to enter into sale/leaseback transactions which would otherwise be subject to such restrictions, without applying the net proceeds of such transactions in the manner set forth in clause (b) above, provided that after giving effect thereto, the aggregate amount of the Attributable Debt with respect to such sale/leaseback transactions, together with the aggregate amount of all debt secured by mortgages permitted by clauses (1) through (9) under "—Limitations on Liens" above, does not exceed 10% of our Consolidated Net Assets.

        Merger, Consolidation or Sale of Assets.    We may, without the consent of the holders of any outstanding notes, consolidate with or sell, lease or convey all or substantially all of our assets to, or merge with or into, any other person or entity, provided that:

(1)

we shall be the continuing entity, or the successor entity formed from the consolidation or merger or the entity which received the transfer of the assets is organized under the laws of any domestic jurisdiction and expressly assumes the due and punctual payment of the principal

33

of, premium and interest on the notes and the performance of every covenant in the indenture;

(2)

immediately after giving effect to the transaction, no event of default and no event which, after notice or the lapse of time, or both, would become an event of default shall have occurred and be continuing; and



(3)

an officers' certificate and legal opinion is delivered to the trustee, each stating that the consolidation, merger, conveyance or transfer complies with clauses (1) and (2) above.

        The successor person or entity will succeed to us, and be substituted for us, and may exercise all of our rights and powers under the indenture, but in the case of a lease of all or substantially all of our assets we will not be released from the obligation to pay the principal of and interest on the notes.

Defaults

        Each of the following is an "event of default" with respect to any series of the notes under the indenture:

(1)

a default in any payment of interest, including additional interest, if any, on any note of such series when due, which default continues for 30 days or more;



(2)

default in the payment of principal of any note of such series when due at its stated maturity date, upon optional redemption, upon declaration or otherwise;



(3)

a failure by us to comply with our other agreements contained in the indenture continuing for 90 days after written notice as provided in the indenture;



(4)

(a) a failure to make any payment at maturity, including any applicable grace period, on any of our indebtedness in an amount in excess of $50,000,000 and continuance of this failure to pay or (b) a default on any of our indebtedness, which default results in the acceleration of indebtedness in an amount in excess of $50,000,000 without this indebtedness having been discharged or the acceleration having been cured, waived, rescinded or annulled, in the case of (a) or (b) above, for a period of 30 days or more after written notice thereof to us by the trustee or to us and the trustee by the holders of not less than 25% in principal amount of outstanding notes of such series; provided, however, that if the failure, default or acceleration referred to in (a) or (b) above shall cease or be cured, waived, rescinded or annulled, then the event of default shall be deemed cured; and



(5)

the occurrence of various events of bankruptcy, insolvency or reorganization involving us.

        The foregoing constitute events of default whatever the reason for any such event of default and whether it is voluntary or involuntary or is effected by operation of any law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. A default under one series of notes will not necessarily be a default under the other series of notes.

        If an event of default with respect to any series of the notes, other than an event of default described in clause (5) above, occurs and is continuing, then the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes of such series by notice to us may declare the principal of, and accrued but unpaid interest on, all the notes of such series to be due and payable. Upon this declaration, principal and interest on the notes of such series will be immediately due and payable. If an event of default described in clause (5) above occurs and is continuing, the principal of, and accrued but unpaid interest on, all the notes will become immediately due and payable without any declaration or other act on the part of the trustee or any holders. Under some circumstances, the

34

holders of a majority in aggregate principal amount of the outstanding notes of any series may rescind any acceleration with respect to the notes of such series and its consequences.

        If an event of default occurs and is continuing, the trustee, in conformity with its duties under the indenture, will exercise all rights or powers under the indenture at the request or direction of any of the holders provided the holders provide the trustee with a reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no holder of notes of any series may pursue any remedy with respect to the indenture or the notes unless:

(1)

the holder previously notified the trustee that an event of default is continuing;



(2)

holders of at least 25% in aggregate principal amount of the outstanding notes of such series requested the trustee to pursue the remedy;



(3)

the holders offered the trustee security or indemnity reasonably satisfactory to the trustee against any loss, liability or expense;



(4)

the trustee has not complied with the holder's request within 60 days after the receipt of the request and the offer of security or indemnity; and



(5)

the holders of a majority in principal amount of the outstanding notes of such series have not given the trustee a direction inconsistent with the request within the 60-day period.

        Generally, the holders of a majority in principal amount of the outstanding notes of any series are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or of exercising any trust or power conferred on the trustee with respect to the notes of such series. The trustee, however, may refuse to follow any direction that conflicts with law or the indenture or that the trustee determines is unduly prejudicial to the rights of any other holder or that would involve the trustee in personal liability.

        If a default with respect to any series of the notes occurs and is continuing and is known to the trustee, the trustee must mail to each holder of notes of such series notice of the default within 90 days after it is known to the trustee. Except in the case of a default in the payment of principal of, premium, if any, or interest on any note, the trustee may withhold notice if the trustee determines in good faith that withholding notice is not opposed to the interests of the holders. In addition, we are required to deliver to the trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers of the certificate know of any default that occurred during the previous fiscal year. We also are required to notify the trustee within 30 days of the occurrence of any event which would constitute various defaults, their status and what action we are taking or propose to take in respect of these defaults.

Amendments and Waivers

        We and the trustee may amend the indenture as to any series of notes with the consent of the holders of a majority in principal amount of the notes of such series then outstanding. Any past default or compliance with any provisions of the indenture or the notes of such series may be waived with the consent of the holders of a majority in principal amount of the notes of such series then outstanding. These consents may be obtained through a tender offer or exchange offer for the notes of such series.

        Without the consent of each holder of an outstanding note, we may not amend the indenture as to such series to:

(1)

reduce the amount of notes of such series whose holders must consent to an amendment, supplement or waiver;



(2)

reduce the rate of or extend the time for payment of interest on any note of such series;

35

(3)

reduce the principal of or extend the stated maturity date of any note of such series;



(4)

reduce the premium payable upon any redemption of any note of such series or change the time at which any note of such series may be redeemed;



(5)

make any note of such series payable in money other than that stated in the note of such series;



(6)

impair the right of any holder to receive payment of principal of and interest on the holder's notes of such series on or after the due dates for the payment of the principal or interest or to institute suit for the enforcement of any payment on or with respect to the holder's notes of such series;



(7)

make any changes that would affect the ranking of the notes of such series in a manner adverse to the holders; or



(8)

make any change in the amendment or waiver provisions relating to such series which require each holder's consent.

        We and the trustee may, however, amend the indenture without the consent of any holder as to any series to:

(1)

to cure any ambiguity, omission, defect or inconsistency as to such series;



(2)

to provide for the assumption by a successor corporation of our obligations under the indenture as to such series;



(3)

to add guarantees or collateral security with respect to the notes of such series;



(4)

to add to our covenants under the indenture for the benefit of the holders or to surrender any right or power conferred upon us as to such series;



(5)

to make any change that does not adversely affect the rights of any holder of notes of such series; or



(6)

to comply with any requirement of the SEC regarding qualification of the indenture under the Trust Indenture Act.

        It is not necessary that any consent of the holders of any series required under the indenture approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. After an amendment under the indenture becomes effective, we are required to mail to all holders of notes of the relevant series a notice briefly describing such amendment. However, the failure to give such notice to all holders of such series or any defect in the notice will not impair or affect the validity of the amendment with respect to the holders of notes of such series.

Transfer and Exchange

        A holder may transfer or exchange new notes in accordance with the indenture. Upon any transfer or exchange, the registrar of the new notes and the trustee may require a holder to furnish appropriate endorsements and transfer documents and we may require a holder to pay any taxes required by law or permitted by the indenture, including any transfer tax or other similar governmental charge payable as part of the transfer or exchange. We are not required to transfer or exchange any new note selected for redemption or to transfer or exchange any new note for a period of 15 days prior to a selection of new notes to be redeemed. The new notes will be issued in registered form and the registered holder of a new note will be treated as the owner of the new note for all purposes.

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Defeasance

        With respect to any series of notes, we at any time may terminate all of our obligations under the notes and the indenture ("legal defeasance"), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and to maintain a registrar and paying agent in respect of the notes. We at any time may terminate our obligations with respect to any series of notes under the covenants described under "—Covenants" and the occurrence of an event of default described in clause (4) under "—Defaults" above ("covenant defeasance").

        We may exercise our legal defeasance option notwithstanding our prior exercise of our covenant defeasance option. If we exercise our legal defeasance option, payment of the notes may not be accelerated because of an event of default with respect thereto. If we exercise our covenant defeasance option, payment of the notes of the relevant series may not be accelerated because of an event of default described in clause (3) (except for the covenants described under "—Covenants—Merger, Consolidation or Sale of Assets") or clause (4) under "—Defaults" above.

        To exercise either defeasance option:

(1)

we must irrevocably deposit with the trustee, in trust for the benefit of the holders of the notes of the relevant series, money or U.S. government obligations which will provide cash at the times and in the amounts as will be sufficient to pay principal and interest when due on all the notes of such series to maturity or redemption;



(2)

we must deliver to the trustee an opinion of counsel which will provide that the holders of the notes of such series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the deposit and defeasance and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as would have been the case if the deposit and defeasance had not occurred; and



(3)

in the case of legal defeasance only, the opinion of counsel referred to in (2) above must be based on a ruling of the U.S. Internal Revenue Service or other change in applicable U.S. federal income tax law.

Concerning the Trustee

        The Bank of New York is the trustee under the indenture and is also registrar and paying agent of the new notes and the exchange agent in each exchange offer.

        The indenture contains limitations on the rights of the trustee, should it become our creditor, to obtain payment of claims in some cases, or to realize on property received in respect of any of these claims as security or otherwise. The trustee is permitted to engage in other transactions with us and our subsidiaries and affiliates. However, if the trustee acquires any conflicting interest it must either eliminate its conflict within 90 days, apply to the SEC for permission to continue or resign as trustee under the indenture.

Governing Law

        The indenture provides that it and the new notes will be governed by, and construed in accordance with, the laws of the State of New York.

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Definitions

        "Attributable Debt" when used in connection with a sale/leaseback transaction involving a Principal Property shall mean, at the time of determination, the lesser of:

(a)

the fair value of such property (as determined in good faith by the board of directors of the Company); or



(b)

the present value of the total net amount of rent required to be paid under such lease during the remaining term thereof (including any renewal term or period for which such lease has been extended), discounted at the rate of interest set forth or implicit in the terms of such lease or, if not practicable to determine such rate, the weighted average interest rate per annum borne by all outstanding securities issued under the indenture compounded semi-annually in either case as determined by the principal accounting or financial officer of the Company.

        For purposes of the foregoing definition, rent shall not include amounts required to be paid by the lessee, whether or not designated as rent or additional rent, on account of or contingent upon maintenance and repairs, insurance, taxes, assessments, water rates and similar charges. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall be the lesser of the net amount determined assuming termination upon the first date such lease may be terminated (in which case the net amount shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) or the net amount determined assuming no such termination.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Consolidated Net Assets" means as of any particular time the aggregate amount of assets at the end of the most recently completed fiscal quarter after deducting therefrom all current liabilities except for:

(a)

notes and loans payable;



(b)

current maturities of long-term debt; and



(c)

current maturities of obligations under capital leases,

        all as set forth on the most recent consolidated balance sheet of the Company and its consolidated subsidiaries and computed in accordance with U.S. generally accepted accounting principles.

        "default" means any event which is, or after notice or passage of time or both would be, an event of default.

        "indebtedness" means, with respect to any person, obligations (other than Nonrecourse Obligations) of such person for borrowed money or evidenced by bonds, debentures, notes or similar instruments.

        "Nonrecourse Obligation" means indebtedness or other obligations substantially related to (1) the acquisition of assets not previously owned by the Company or any of its Restricted Subsidiaries or (2) the financing of a project involving the development or expansion of properties of the Company or any of its Restricted Subsidiaries, as to which the oblige with respect to such indebtedness or obligation has no recourse to the Company or any Restricted Subsidiary or any assets of the Company or any Restricted Subsidiaries other than the assets which were acquired with the proceeds of such transaction or the project financed with the proceeds of such transaction (and the proceeds thereof).

        "person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

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        "Principal Property" means the land, land improvements, buildings and fixtures (to the extent they constitute real property interests) (including any leasehold interest therein) constituting the principal corporate office, any manufacturing plant or any manufacturing facility (whether now owned or hereafter acquired) which:

(a)

is owned by the Company or any subsidiary of the Company;



(b)

is located within any of the present 50 states of the United States of America (or the District of Columbia);



(c)

has not been determined in good faith by the Board of Directors of the Company not to be materially important to the total business conducted by the Company and its subsidiaries taken as a whole; and



(d)

has a book value on the date as of which the determination is being made in excess of 0.75% of Consolidated Net Assets of the Company as most recently determined on or prior to such date.

        "Restricted Subsidiary" means any subsidiary which owns any Principal Property; provided, however, that the term "Restricted Subsidiary" does not include:

(a)

any subsidiary which is principally engaged in leasing or in financing receivables, or which is principally engaged in financing the Company's operations outside the United States of America; or



(b)

any subsidiary less than 80% of the voting stock of which is owned, directly or indirectly, by the Company or by one or more other subsidiaries, or by the Company and one or more other subsidiaries if the common stock of such subsidiary is traded on any national securities exchange or quoted on the NASDAQ National Market or in the over-the-counter market.

Book-Entry Delivery and Form

        The certificates representing the notes will be issued in fully registered form, without coupons. The notes will be deposited with, or on behalf of, The Depository Trust Company, New York, New York ("DTC"), and registered in the name of Cede & Co., as DTC's nominee, in the form of one or more global certificates.

39

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

        The exchange of old notes of a series for new notes of that series will not be treated as a taxable transaction for U.S. Federal income tax purposes because the terms of the new notes will not be considered to differ materially in kind or in extent from the terms of the old notes. Rather, the new notes you receive will be treated as a continuation of your investment in the old notes. As a result, you will not recognize gain or loss upon the exchange of your old notes of a series for new notes of that series. In addition, your basis and holding period in the new notes will be the same as your basis and holding period in the old notes exchanged therefore.

If you are considering exchanging your old notes for new notes, you should consult your own tax advisors concerning the tax consequences of the exchange arising under state, local or foreign laws.

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PLAN OF DISTRIBUTION

        If you want to participate in an exchange offer you must represent, among other things, that:

•

you are acquiring the new notes issued in that exchange offer in the ordinary course of your business,



•

you are not an "affiliate", as defined in Rule 405 under the Securities Act, of CA; and



•

you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in a distribution of the new notes issued in that exchange offer.

        If you are unable to make the above representations you are a "restricted holder". A restricted holder will not be able to participate in the applicable exchange offer and may only sell its old notes under a registration statement containing the selling security holder information required by Item 507 of Regulation S-K of the Securities Act, or under an exemption from the registration requirement of the Securities Act.

        If you are a broker-dealer who holds old notes that were acquired for your own account as a result of market-marking activities or other trading activities, you may exchange old notes in the applicable exchange offer. As a broker-dealer, you may be deemed to be an "underwriter" within the meaning of the Securities Act, and, consequently, must deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the new notes you receive in that exchange offer.

        Each participating broker-dealer is required to acknowledge in the letter of transmittal that it acquired the old notes as a result of market-making activities or other trading activities and that it will deliver a prospectus in connection with the resale of the new notes. We have agreed that, for a period of up to 90 days after the last exchange date, we will use our best efforts to:

•

keep the exchange offer registration statement continuously effective, supplemented and amended as required by the registration rights agreement to the extent necessary to ensure that it is available for resale of old notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities,



•

ensure that the exchange offer registration statement conforms with the requirements of the registration rights agreement, the Securities Act and the policies, rules and regulations of the SEC as announced from time to time, and



•

make this prospectus available to participating broker-dealers for use in connection with any resale.

During this period of time, delivery of this prospectus, as it may be amended or supplemented, will satisfy the prospectus delivery requirements of a participating broker-dealer engaged in market-making or other trading activities.

        Based on interpretations by the staff of the SEC, we believe that new notes issued in each exchange offer may be offered for resale, resold and otherwise transferred by their holder, other than a participating broker-dealer, without compliance with the registration and prospectus delivery requirements of the Securities Act.

        We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by participating broker-dealers for their own account under an exchange offer may be sold from time to time in one or more transactions in the over-the-counter market,

•

in negotiated transactions,



•

through the writing of options on the new notes, or

41

•

a combination of methods of resale.

        The new notes may be sold from time to time:

•

at market prices prevailing at the time of resale,



•

at prices related to prevailing market prices, or



•

at negotiated prices.

Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any participating broker-dealer and/or the purchasers of any new notes.

        Any participating broker-dealer that resells new notes received by it for its own account under an exchange offer and any broker or dealer that participates in a distribution of the new notes may be deemed to be an "underwriter" within the meaning of the Securities Act. Any profit on any resale of new notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        For a period of 180 days after the expiration date, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incidental to the exchange offers other than commissions and concessions of any brokers or dealers and will indemnify holders of the notes, including any broker-dealers, against some liabilities, including liabilities under the Securities Act, as set forth in the registration rights agreement.

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WHERE YOU CAN FIND MORE INFORMATION

        We are subject to the informational requirements of the Exchange Act and in accordance therewith file reports and other information with the SEC at 100 F Street, N.E., Washington, D.C. 20549 and copies of this material can be obtained from the Public Reference Section of the SEC at that address at prescribed rates. Further information on the operation of the SEC's Public Reference Room in Washington D.C. can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains a Web site that contains reports, proxy statements and other information about issuers, like CA, who file electronically with the SEC. The address of that site is http://www.sec.gov.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

(a)

We hereby incorporate herein by reference the following sections of our Annual Report on Form 10-K, which was filed with the SEC on July 31, 2006, as called for by Item 14 of Form S-4: "Item 1. Business", "Item 2. Properties", "Note 7, Commitments and Contingencies" to the Consolidated Financial Statements, "Item 6. Selected Financial Data", "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations", "Item 7A. Quantitative and Qualitative Disclosures About Market Risk", "Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure" and "List of Consolidated Financial Statements and Financial Statement Schedules".






In addition, we are hereby incorporating herein by reference the balance of the information in our Annual Report on Form 10-K that appears in sections not specifically referred to in the preceding sentence, including without limitation the section entitled "Item 1A. Risk Factors".



(b)

We hereby incorporate by reference the following sections of our quarterly report on Form 10-Q as filed with the SEC on August 14, 2006: "Part I, Item 1. Financial Statements", "Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations", "Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk" and "Part II, Item 1. Legal Proceedings".



(c)

We hereby incorporate herein by reference our current reports on Form 8-K and 8-K/A as filed with the SEC on October 19, 2005, December 30, 2005, April 7, 2006, April 21, 2006, April 25, 2006, May 11, 2006, May 15, 2006, May 30, 2006, June 2, 2006, June 13, 2006, June 29, 2006, June 30, 2006, July 11, 2006, July 25, 2006, July 28, 2006, July 31, 2006, August 2, 2006, August 7, 2006, August 14, 2006, August 21, 2006, September 6, 2006, September 7, 2006 and September 14, 2006.

        The documents enumerated above, are hereinafter referred to as "Incorporated Documents".

        Information furnished under Items 2.02 or 7.01 of any of our Current Reports on Form 8-K is not incorporated by reference in this prospectus or the registration statement of which this prospectus is a part.

        Any statement contained in an Incorporated Document shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed Incorporated Document modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.

        You should rely only on the information contained in this document or that we have referred you to. We have not authorized anyone to provide you with information that is different. Neither the making of the exchange offer pursuant to this document nor the acceptance of old notes for tender or exchange pursuant thereto shall under any circumstances create any implication that there has been no

43

change in the affairs of CA, Inc. since the date hereof or that the information contained herein is correct as of any time subsequent to the date hereof.

        Each broker-dealer who holds old notes acquired for its own account as a result of market-making or other trading activities and who receives new notes for its own account in exchange for old notes pursuant to an exchange offer must deliver a copy of this prospectus in connection with any resale of new notes.

VALIDITY OF THE NEW NOTES

        The validity of the new notes will be passed upon for us by Sullivan & Cromwell LLP, New York, New York.

EXPERTS

        The consolidated financial statements and schedule of CA, Inc. and subsidiaries as of March 31, 2006 and 2005, and for each of the years in the three-year period ended March 31, 2006, and management's assessment of the effectiveness of internal control over financial reporting as of March 31, 2006 have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

        The audit report on management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting as of March 31, 2006, expresses KPMG LLP's opinion that CA, Inc. did not maintain effective internal control over financial reporting as of March 31, 2006 because of the effect of material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states: (i) the Company did not maintain an effective control environment due to a lack of effective communication policies and procedures; (ii) the Company's policies and procedures relating to controls over the accounting for sales commissions were not effective; (iii) the Company's policies and procedures relating to the identification, analysis and documentation of non-routine tax matters were not effective; (iv) the Company's policies and procedures relating to the accounting for and disclosure of stock-based compensation relating to stock options were not effective; and (v) the Company's policies and procedures were not effectively designed to identify, quantify and record the impact on subscription revenue when license agreements have been cancelled and renewed more than once prior to the expiration date of each successive license agreement.

        The audit report on management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting as of March 31, 2006, contains an explanatory paragraph that states that in conducting the Company's evaluation of the effectiveness of its internal control over financial reporting, management has excluded the acquisition of Wily Technology, Inc., which was completed by the Company during the fourth quarter of fiscal year 2006. KPMG LLP's audit of internal control over financial reporting of CA, Inc. and subsidiaries also excluded an evaluation of the internal control over financial reporting of Wily Technology, Inc.

        The audit report on the consolidated financial statements and the related consolidated financial statement schedule contains an explanatory paragraph that states that the consolidated financial statements as of March 31, 2005 and for each of the years in the two-year period ended March 31, 2005 have been restated.

        With respect to the unaudited interim financial information for the periods ended June 30, 2006 and 2005, which is incorporated herein by reference, the independent registered public accounting firm has reported that they applied limited procedures in accordance with the professional standards for a review of such information. However, their separate report included in the Company's quarterly report

44

on Form 10-Q for the quarter ended June 30, 2006, and incorporated by reference herein, states that they did not audit and they do not express an opinion on the interim financial information. As discussed in the consolidated condensed financial statements, the Company has restated the consolidated condensed statements of operations and cash flows for the three-month period ended June 30, 2005 to reflect the effects of certain prior period restatements that were previously disclosed in the consolidated financial statements in the Company's Form 10-K for the fiscal year ended March 31, 2006. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. The accountants are not subject to the liability provisions of Section 11 of the Securities Act for their reports on the unaudited interim financial information because those reports are not "reports" or a "part" of the registration statement prepared or certified by the accountants within the meaning of Section 7 and 11 of the Securities Act.

        The consolidated financial statements of Niku Corporation and subsidiaries as of January 31, 2005 and 2004, and for each of the years in the three-year period ended January 31, 2005 have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

        The consolidated financial statements of iLumin Software Services, Inc. and subsidiaries as of and for the nine months ended September 30, 2005 and the year ended December 31, 2004 have been incorporated by reference herein and in the registration statement in reliance upon the report of Perlson, Touhy & Company, LLP, independent auditors, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

        The consolidated financial statements of Wily Technology, Inc. incorporated in this Prospectus by reference to the Current Report on Form 8-K/A of CA, Inc. filed on July 31, 2006 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

        The consolidated financial statements of Wily Technology, Inc. incorporated in this Prospectus by reference to the Current Report on Form 8-K/A of CA, Inc. filed on July 31, 2006 have been so incorporated in reliance on the report of Rowbotham & Company LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

45

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20. Indemnification of Directors and Officers.

        As permitted by Section 145 of the Delaware General Corporation Law, Article EIGHTH of the Registrant's Restated Certificate of Incorporation, as amended, provides:

The corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein, shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any By Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

        The Registrant's Restated Certificate of Incorporation, as amended, also limits the personal liability of directors for monetary damages in certain instances and eliminates director liability for monetary damages arising from any breach of a directors' duty of care.

        The Registrant maintains insurance on behalf of any person who is or was a director, officer, employee or agent of the Registrant, or is or was serving at the request of the Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in such capacity, or arising out of his status as such, whether or not the Registrant would have the power to indemnify him against such liability under the provisions of the Registrant's Restated Certificate of Incorporation, as amended.

Item 21. Exhibits and Financial Statement Schedules.

(a)

Exhibits

Exhibits	Description
3.1	Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q for fiscal quarter ended December 31, 2005).
3.2	Bylaws of the Registrant, as amended (incorporated herein by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated February 1, 2005).
4.1	Registration Rights Agreement dated April 18, 2004 among the Registrant and the Initial Purchasers of the 4.750% Senior Notes due 2009 and the 5.625% Senior Notes due 2014 (incorporated by reference to Exhibit 4.3 to the Registrant's Current Report on Form 8-K dated November 15, 2004).
4.2	Indenture, dated as of November 18, 2004, between the Company and The Bank of New York, as trustee, with respect to the Registrant's 4.750% Senior Notes due 2009 and 5.625% Senior Notes due 2014 (incorporated by reference herein to Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated November 15, 2004).
4.3	Form of New Notes (included in Exhibit 4.2).

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5.1	Opinion of Sullivan & Cromwell LLP regarding the validity of the 4.750% Series B Senior Notes due 2009 and 5.625% Series B Senior Notes due 2014 being registered.*
8.1	Opinion of Sullivan & Cromwell LLP regarding tax matters.**
12.1	Computation of Ratio of Earnings to Fixed Charges.*
15.1	Letter regarding unaudited interim financial information.*
23.1	Consent of KPMG LLP, independent registered public accounting firm.*
23.2	Consent of Sullivan & Cromwell LLP (included in the opinions filed as Exhibit 5.1 and Exhibit 8.1 hereto).
23.3	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.*
23.4	Consent of Rowbotham & Company, independent registered public accounting firm.*
23.5	Consent of Perlson, Touhy & Company, LLP, independent accounting firm.*
23.6	Consent of KPMG, LLP, independent registered public accounting firm.*
24.1	Power of Attorney (included in the signature page attached hereto).
25.1	Statement of Eligibility of the Trustee with respect to 4.750% Series B Senior Notes due 2009.**
25.2	Statement of Eligibility of the Trustee with respect to 5.625% Series B Senior Notes due 2014.**
99.1	Form of Letter of Transmittal.**
99.2	Form of Notice of Guaranteed Delivery.**
99.3	Form of Exchange Agent Agreement.**
99.4	The Company's Annual Report on Form 10-K for fiscal year ended March 31, 2006.**
99.5	The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006.*

*

Filed herewith.

**

Previously filed.

(b)

Financial Statement Schedules

        All other schedules for which provisions are made in the applicable accounting regulation of the Securities and Exchange Commission are not required or are inapplicable and therefore have been omitted, or the required information has been incorporated by reference herein or disclosed in the financial statements which form a part of this Registration Statement/Prospectus.

Item 22. Undertakings.

        The undersigned registrant hereby undertakes:

(1)

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the

II-2

opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(2)

To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.



(3)

The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.



(4)

That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.



(5)

(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:



(i)

to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;



(ii)

to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;



(iii)

to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.



(b)

That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;



(c)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

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(d)

That, for the purpose of determining liability under Securities Act of 1933 to any purchaser:



(i)

If the registrant is relying on Rule 430(B):



(A)

Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and



(B)

Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of registration statement in reliance on Rule 430(B) relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or made in any such document immediately prior to such effective date; or



(ii)

If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than the registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.



(e)

That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:



The undersigned registrant undertakes that in primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)

Any preliminary prospectus or prospectus of the undersigned relating to the offering required to be file pursuant to Rule 424;



(ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

II-4

(iii)

The portion of any other fee writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and



(iv)

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(6)

The undersigned registrant hereby undertakes that:

(a)

For purposes of determining any liability under The Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(b)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Islandia, County of Suffolk, the State of New York, on the 6th day of October, 2006.

CA, INC.
By:	/s/  KENNETH V. HANDAL Name:  KENNETH V. HANDAL Title:    Executive Vice President, Governance, Co-General Counsel and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS that the individuals whose signatures appear below constitute and appoint Kenneth V. Handal and Lawrence Egan, and each of them, his or her true and lawful attorney-in-fact and agents with full and several power of substitution, for him or her and his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post- effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done.

        Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to the Registration Statement has been signed below by the following persons in the capacities indicated:

Signature	Title	Date
* LEWIS S. RANIERI	Non-Executive Chairman of the Board of Directors	October 6, 2006
* JOHN A. SWAINSON	Chief Executive Officer (Principal Executive Officer)	October 6, 2006
/s/  NANCY E. COOPER NANCY E. COOPER	Chief Financial Officer	October 6, 2006
* ROBERT G. CIRABISI	Senior Vice President, Corporate Controller and Principal Accounting Officer	October 6, 2006
* KENNETH D. CRON	Director	October 6, 2006

II-6

* ALFONSE M. D'AMATO	Director	October 6, 2006
* GARY J. FERNANDES	Director	October 6, 2006
* ROBERT E. LA BLANC	Director	October 6, 2006
* JAY W. LORSCH	Director	October 6, 2006
* WILLIAM E. MCCRACKEN	Director	October 6, 2006
* WALTER P. SCHUETZE	Director	October 6, 2006
* LAURA S. UNGER	Director	October 6, 2006
* RON ZAMBONINI	Director	October 6, 2006

*By:  /s/  KENNETH V. HANDAL KENNETH V. HANDAL, as Attorney-in-Fact

II-7

INDEX TO EXHIBITS

        Certain of the following documents are filed herewith. Certain other of the following documents has been previously filed with the Securities and Exchange Commission and, pursuant to Rule 12b-32, is incorporated herein by reference.

Exhibits	Description
3.1	Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q for fiscal quarter ended December 31, 2005).
3.2	Bylaws of the Registrant, as amended (incorporated herein by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated February 1, 2005).
4.1	Registration Rights Agreement dated April 18, 2004 among the Registrant and the Initial Purchasers of the 4.750% Senior Notes due 2009 and the 5.625% Senior Notes due 2014 (incorporated by reference to Exhibit 4.3 to the Registrant's Current Report on Form 8-K dated November 15, 2004).
4.2	Indenture, dated as of November 18, 2004, between the Company and The Bank of New York, as trustee, with respect to the Registrant's 4.750% Senior Notes due 2009 and 5.625% Senior Notes due 2014 (incorporated by reference herein to Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated November 15, 2004).
4.3	Form of New Notes (included in Exhibit 4.2).
5.1	Opinion of Sullivan & Cromwell LLP regarding the validity of the 4.750% Series B Senior Notes due 2009 and 5.625% Series B Senior Notes due 2014 being registered.*
8.1	Opinion of Sullivan & Cromwell LLP regarding tax matters.**
12.1	Computation of Ratio of Earnings to Fixed Charges.*
15.1	Letter regarding unaudited interim financial information.*
23.1	Consent of KPMG LLP, independent registered public accounting firm.*
23.2	Consent of Sullivan & Cromwell LLP (included in the opinions filed as Exhibit 5.1 and Exhibit 8.1 hereto).
23.3	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.*
23.4	Consent of Rowbotham & Company, independent registered public accounting firm.*
23.5	Consent of Perlson, Touhy & Company, LLP, independent accounting firm.*
23.6	Consent of KPMG, LLP, independent registered public accounting firm.*
24.1	Power of Attorney (included in the signature page attached hereto).
25.1	Statement of Eligibility of the Trustee with respect to 4.750% Series B Senior Notes due 2009.**
25.2	Statement of Eligibility of the Trustee with respect to 5.625% Series B Senior Notes due 2014.**
99.1	Form of Letter of Transmittal.**
99.2	Form of Notice of Guaranteed Delivery.**
99.3	Form of Exchange Agent Agreement.**
99.4	The Company's Annual Report on Form 10-K for fiscal year ended March 31, 2006.**
99.5	The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006.*

*

Filed herewith.

**

Previously filed.

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TABLE OF CONTENTS
FORWARD-LOOKING STATEMENTS
SUMMARY
CA, Inc.
Previously Announced Restatements of Financial Statements
Disclosure Controls and Procedures and Internal Control Over Financial Reporting
The Exchange Offers
The New Notes
Ratio of Earnings to Fixed Charges
RISK FACTORS
USE OF PROCEEDS
THE EXCHANGE OFFERS
HOW TO TENDER YOUR OLD NOTES
By Mail, Hand or Overnight Courier
By Facsimile
Confirm by Telephone
DESCRIPTION OF THE NEW NOTES
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
VALIDITY OF THE NEW NOTES
EXPERTS
PART II

Item 20. Indemnification of Directors and Officers.
Item 21. Exhibits and Financial Statement Schedules.
Item 22. Undertakings.

SIGNATURES
INDEX TO EXHIBITS

EX-5.1

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Exhibit 5.1

October 6, 2006

CA, Inc.,
    One CA Plaza,
        Islandia, New York 11749.

Ladies and Gentlemen:

        In connection with the registration under the Securities Act of 1933 (the "Act") of $500,000,000 principal amount of 4.750% Series B Senior Notes due 2009 and $500,000,000 principal amount of 5.625% Series B Senior Notes due 2014 (the "Securities") of CA, Inc. a Delaware corporation (the "Company"), we, as your counsel, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion.

        Upon the basis of such examination, we advise you that, in our opinion, when the Registration Statement has become effective under the Act and the terms of the Securities and of their issuance and sale have been duly established in conformity with the Indenture so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, and the Securities have been duly executed and authenticated in accordance with the Indenture and issued and delivered as contemplated in the Registration Statement, the Securities will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

        In rendering the foregoing opinion we are expressing no opinion as to Federal or state laws relating to fraudulent transfers.

        The foregoing opinion is limited to the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction.

        Also, we have relied as to certain matters on information obtained from public officials, officers of the Company and other sources believed by us to be responsible, and we have assumed that the Indenture has been duly authorized, executed and delivered by the Trustee thereunder, an assumption which we have not independently verified.

        We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading "Validity of the New Notes" in the Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.

Very truly yours,

/s/ Sullivan & Cromwell LLP

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Exhibit 5.1

EX-12.1

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Exhibit 12.1

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

CA, Inc.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in millions, except ratios)

	Years Ended March, 31
									Three-Months Ended June 30, 2006
	2002		2003		2004		2005	2006
Earnings available for fixed charges:
Earnings from continuing operations before income taxes, minority interest and discontinued operations	(1,528	)	(495	)	(114	)	33	121	43
Add: Fixed charges	330		272		205		221	165	42
Less: Minority Interest in pre-tax loss of subsidiaries that have not incurred fixed charges	(1	)	0		0		0	1	0
Total earnings available for fixed charges	(1,199	)	(223	)	91		254	287	85
Fixed charges:
Interest expense(1)	249		193		136		153	95	25
Interest portion of rental expense	81		79		69		68	70	17
Total Fixed Charges	330		272		205		221	165	42
RATIO OF EARNINGS TO FIXED CHARGES	n/a		n/a		n/a		1.15	1.74	2.01
Deficiency of Earnings to Fixed Charges	1,529		495		114		n/a	n/a	n/a

(1)

Includes amortization of discount related to indebtedness

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Exhibit 12.1

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
CA, Inc. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (in millions, except ratios)

EX-15.1

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Exhibit 15.1

October 5, 2006

CA, Inc.
One CA Plaza
Islandia, New York 11749

Re:

Registration Statement on Amendment No. 4 to Form S-4 to be filed
on or about October 5, 2006

        With respect to the subject registration statement, we acknowledge our awareness of the use therein of our report dated August 14, 2006 related to our review of interim financial information. As discussed in Note A to the consolidated condensed financial statements, the Company has restated the consolidated condensed statements of operations and cash flows for the three-month period ended June 30, 2005 to reflect the effects of certain prior period restatements that were previously disclosed in Note 12 of the consolidated financial statements in the Company's Form 10-K for the fiscal year ended March 31, 2006.

        Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such reports are not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.

/s/ KPMG LLP
New York, New York

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Exhibit 15.1

EX-23.1

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
CA, Inc.:

        We consent to incorporation by reference in this registration statement on Amendment No. 4 to Form S-4 of CA, Inc. and subsidiaries of our report dated July 31, 2006, with respect to the consolidated balance sheets of CA, Inc. and subsidiaries as of March 31, 2006 and 2005, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended March 31, 2006, and the related financial statement schedule, and our report dated July 31, 2006, with respect to management's assessment of the effectiveness of internal control over financial reporting as of March 31, 2006, and the effectiveness of internal control over financial reporting as of March 31, 2006, which reports appear in the March 31, 2006, annual report on Form 10-K of CA, Inc., incorporated herein by reference and to the reference to our firm under the headings "Summary—Disclosure Controls and Procedures and Internal Control Over Financial Reporting" and "Experts" in the prospectus.

        Our report dated July 31, 2006, on management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting as of March 31, 2006, expresses our opinion that CA, Inc. did not maintain effective internal control over financial reporting as of March 31, 2006 because of the effect of material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states: (i) the Company did not maintain an effective control environment due to a lack of effective communication policies and procedures; (ii) the Company's policies and procedures relating to controls over the accounting for sales commissions were not effective; (iii) the Company's policies and procedures relating to the identification, analysis and documentation of non-routine tax matters were not effective; (iv) the Company's policies and procedures relating to the accounting for and disclosure of stock-based compensation relating to stock options were not effective; and (v) the Company's policies and procedures were not effectively designed to identify, quantify and record the impact on subscription revenue when license agreements have been cancelled and renewed more than once prior to the expiration date of each successive license agreement.

        Additionally, our report dated July 31, 2006, on management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting as of March 31, 2006, contains an explanatory paragraph that states that in conducting the Company's evaluation of the effectiveness of its internal control over financial reporting, management has excluded the acquisition of Wily Technology, Inc., which was completed by the Company during the fourth quarter of fiscal year 2006. Our audit of internal control over financial reporting of CA, Inc. and subsidiaries also excluded an evaluation of the internal control over financial reporting of Wily Technology, Inc.

        Our report dated July 31, 2006, on the consolidated financial statements and the related financial statement schedule contains an explanatory paragraph which states that the consolidated financial statements as of March 31, 2005 and for each of the years in the two-year period ended March 31, 2005 have been restated.

/s/ KPMG LLP

New York, New York
October 5, 2006

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

EX-23.3

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EXHIBIT 23.3

Consent of Independent Accountants

        We hereby consent to the incorporation by reference in this Amendment No. 4 to Registration Statement on Form S-4 of CA, Inc. of our report dated December 23, 2005 relating to the consolidated financial statements of Wily Technology, Inc., which appears in CA, Inc.'s Current Report on Form 8-K/A filed on July 31, 2006. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

San Francisco, California
October 5, 2006

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EXHIBIT 23.3

Consent of Independent Accountants

EX-23.4

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Exhibit 23.4

Consent of Independent Accounts

        We hereby consent to the incorporation by reference in this Amendment No. 4 to Registration Statement on Form S-4 of CA, Inc. of our report dated June 15, 2006 relating to the consolidated financial statements of Wily Technology, Inc. and subsidiaries, which appears in CA, Inc.'s Current Report on Form 8-K/A filed on July 31, 2006. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ Rowbotham & Company LLP

San Francisco, California
October 5, 2006

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Exhibit 23.4

Consent of Independent Accounts

EX-23.5

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Exhibit 23.5

Consent of Independent Auditors

        We consent to the incorporation by reference in the registration statement on Form S-4 (No. 333-126641) of CA, Inc. of our report dated December 5, 2005, with respect to the consolidated balance sheets of iLumin Software Services, Inc. and subsidiaries as of the nine months ended September 30, 2005 and the year ended December 31, 2004, and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the nine months ended September 30, 2005 and the year ended December 31, 2004, which report appears in the Current Report on Form 8-K/A of CA, Inc. dated December 30, 2005.

/s/ Perlson, Touhy & Company LLP

Perlson, Touhy & Company, LLP
North Massapequa, New York

October 5, 2006

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Exhibit 23.5

Consent of Independent Auditors

EX-23.6

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Exhibit 23.6

Consent of Independent Registered Public Accounting Firm

The Board of Directors
CA, Inc.:

        We consent to the use of our report dated April 14, 2005, with respect to the consolidated balance sheets of Niku Corporation and subsidiaries as of January 31, 2005 and 2004, the related consolidated statements of operations and comprehensive income (loss), stockholders' equity (deficit), and cash flows for each of the years in the three-year period ended January 31, 2005, incorporated herein by reference and to the reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG, LLP

Mountain View, CA
October 5, 2006

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Exhibit 23.6

Consent of Independent Registered Public Accounting Firm

EX-99.5

Exhibit 99.5

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended June 30, 2006
or
o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period ended from                       to

Commission File Number 1-9247

CA, Inc.

(Exact name of registrant as specified in its charter)

Delaware	13-2857434
(State or other jurisdiction of	(I.R.S. Employer Identification Number)
incorporation or organization)
One CA Plaza
Islandia, New York	11749
(Address of principal executive offices)	(Zip Code)

(631) 342-6000

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes  x    No  o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer    x Accelerated filer    o Non-accelerated filer    o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  x    No  o.

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Title of Class	Shares Outstanding
Common Stock	as of August 8, 2006
par value $0.10 per share	567,685,256

CA, INC. AND SUBSIDIARIES

INDEX

		Page
PART I.	Financial Information	1
	Review Report of Independent Registered Public Accounting Firm	1
Item 1.	Consolidated Condensed Financial Statements	2
	Consolidated Condensed Balance Sheets — June 30, 2006 and March 31, 2006	2
	Consolidated Condensed Statements of Operations — Three Months Ended June 30, 2006 and 2005 (restated)	3
	Consolidated Condensed Statements of Cash Flows — Three Months Ended June 30, 2006 and 2005 (restated)	4
	Notes to the Consolidated Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Quarterly Update	24
	Performance Indicators	26
	Results of Operations	27
	Liquidity and Capital Resources	32
	Outlook	39
	Critical Accounting Policies and Business Practices	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	46
PART II.	Other Information	49
Item 1.	Legal Proceedings	49
Item 1a	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 6.	Exhibits	50
	Signatures	52
EX-15: ACCOUNTANTS’ ACKNOWLEDGEMENT LETTER
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32: CERTIFICATION

PART I. FINANCIAL INFORMATION

REVIEW REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

CA, Inc.

We have reviewed the accompanying consolidated condensed balance sheet of CA, Inc. and subsidiaries as of June 30, 2006, and the related consolidated condensed statements of operations and cash flows for the three-month periods ended June 30, 2006 and 2005. These consolidated condensed financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated condensed financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with standards established by the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of CA, Inc. and subsidiaries as of March 31, 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated July 31, 2006, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated condensed balance sheet as of March 31, 2006, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note A to the consolidated condensed financial statements, the Company has restated the consolidated condensed statements of operations and cash flows for the three-month period ended June 30, 2005 to reflect the effects of certain prior period restatements that were previously disclosed in Note 12 of the consolidated financial statements in the Company’s Form 10-K for the fiscal year ended March 31, 2006.

/s/ KPMG LLP

New York, New York

August 14, 2006

1

Item 1. Consolidated Condensed Financial Statements

CA, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(unaudited)

(in millions, except share amounts)

	June 30,			March 31,
	2006			2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,500		$	1,831
Marketable securities	22			34
Trade and installment accounts receivable, net	514			505
Deferred income taxes	263			228
Other current assets	69			50
TOTAL CURRENT ASSETS	2,368			2,648
Installment accounts receivable, due after one year, net	385			449
Property and equipment, net	645			634
Purchased software products, net	383			461
Goodwill, net	5,377			5,308
Deferred income taxes	149			150
Other noncurrent assets	821			788
TOTAL ASSETS	$	10,128		$	10,438
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current portion of long-term debt and loans payable	$	1		$	1
Accounts payable	179			277
Salaries, wages, and commissions	226			292
Accrued expenses and other current liabilities	498			509
Deferred subscription revenue (collected) — current	1,500			1,517
Deferred maintenance revenue	261			250
Taxes payable, other than income taxes payable	47			129
Federal, state, and foreign income taxes payable	331			370
Deferred income taxes	27			32
TOTAL CURRENT LIABILITIES	3,070			3,377
Long-term debt, net of current portion	1,810			1,810
Deferred income taxes	44			46
Deferred subscription revenue (collected) — noncurrent	557			448
Other noncurrent liabilities	76			77
TOTAL LIABILITIES	5,557			5,758
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; 630,920,596 shares issued	63			63
Additional paid-in capital	4,477			4,495
Retained earnings	1,762			1,750
Accumulated other comprehensive loss	(125		)	(134		)
Unearned compensation	(4		)	(6		)
Treasury stock, at cost, 64,028,904 shares and 59,167,446 shares, respectively	(1,602		)	(1,488		)
TOTAL STOCKHOLDERS’ EQUITY	4,571			4,680
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,128		$	10,438

See Notes to the Consolidated Condensed Financial Statements.

2

CA, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

(in millions, except per share amounts)

	For the Three
	Months Ended
	June 30,
	2006			2005
				(restated)
REVENUE
Subscription revenue	$	739		$	702
Maintenance	103			107
Software fees and other	24			37
Financing fees	8			14
Professional services	82			67
TOTAL REVENUE	956			927
EXPENSES
Amortization of capitalized software costs	105			113
Cost of professional services	72			60
Selling, general, and administrative	434			389
Product development and enhancements	179			172
Commissions, royalties and bonuses	71			62
Depreciation and amortization of other intangible assets	34			30
Other gains, net	(1		)	(3		)
Restructuring and other	11			—
Charge for in-process research and development costs	—			4
TOTAL EXPENSES BEFORE INTEREST AND TAXES	905			827
Income before interest and taxes	51			100
Interest expense, net	8			9
Income before income taxes	43			91
Income tax expense (benefit)	8			(6		)
NET INCOME	$	35		$	97
BASIC INCOME PER SHARE	$	0.06		$	0.17
Basic weighted average shares used in computation	568			587
DILUTED INCOME PER SHARE	$	0.06		$	0.16
Diluted weighted average shares used in computation	597			612

See Notes to the Consolidated Condensed Financial Statements.

3

CA, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

(in millions)

	For the Three Months
	Ended June 30,
	2006			2005
				(restated)
OPERATING ACTIVITIES:
Net income	$	35		$	97
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	139			143
Provision for deferred income taxes	(54		)	(78		)
Non-cash compensation expense related to stock and pension plans	23			31
Non-cash charge for purchased in-process research and development	—			4
Foreign currency transaction gain — before taxes	(1		)	(3		)
Changes in other operating assets and liabilities:
Decrease in trade and current installment accounts receivable, net	36			160
Decrease in noncurrent installment accounts receivable, net	45			13
Decrease in deferred subscription revenue (collected) — current	(49		)	(73		)
Increase in deferred subscription revenue (collected) — noncurrent	102			20
Increase (decrease) in deferred maintenance revenue	4			(24		)
Decrease in taxes payable, net	(132		)	(88		)
Decrease in accounts payable, accrued expenses and other	(113		)	(56		)
Restructuring and other, net	11			—
Changes in other operating assets and liabilities, excluding effects of acquisitions	(92		)	(53		)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	(46		)	93
INVESTING ACTIVITIES:
Acquisitions, primarily goodwill, purchased software, and other intangible assets, net of cash acquired	(95		)	(324		)
Settlements of purchase accounting liabilities	(4		)	(3		)
Purchases of property and equipment, net	(59		)	(28		)
Sales of marketable securities	12			179
Increase (decrease) in restricted cash	8			(3		)
Capitalized software development costs	(9		)	(22		)
NET CASH USED IN INVESTING ACTIVITIES	(147		)	(201		)
FINANCING ACTIVITIES:
Dividends paid	(23		)	(24		)
Purchases of treasury stock	(157		)	(84		)
Debt repayments	—			(825		)
Exercise of common stock options and other	6			50
NET CASH USED IN FINANCING ACTIVITIES	(174		)	(883		)
DECREASE IN CASH AND CASH EQUIVALENTS BEFORE EFFECT OF EXCHANGE RATE CHANGES ON CASH	(367		)	(991		)
Effect of exchange rate changes on cash	36			(62		)
DECREASE IN CASH AND CASH EQUIVALENTS	(331		)	(1,053		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	1,831			2,829
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,500		$	1,776

See Notes to the Consolidated Condensed Financial Statements.

4

CA, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2006

NOTE A – BASIS OF PRESENTATION

The accompanying unaudited Consolidated Condensed Financial Statements of CA, Inc. (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. 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-month period ended June 30, 2006 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2007. 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, 2006.

The Consolidated Condensed Statements of Operations and Cash Flows for the three-month period ended June 30, 2005 included in this Form 10-Q have been restated to reflect the effects of certain prior period restatements that were previously disclosed in Note 12 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006.

The following tables summarize the Consolidated Statements of Operations and Cash Flows for the periods indicated, giving effect to the restatement adjustments described above. Quarterly information presented below is unaudited.

FISCAL YEAR 2006 UNAUDITED QUARTERLY STATEMENT OF OPERATIONS DATA

	For the Three Months
	Ended June 30, 2005
	Previously
	Reported(1)			Restated
	(unaudited)
	(in millions, except per share data)
Subscription revenue (2)	$	695		$	702
Total revenue	920			927
Selling, general, and administrative	388			389
Product development and enhancements	171			172
Total expenses before interest and taxes	825			827
Income before interest and taxes	95			100
Income before taxes	86			91
Income tax benefit	(8		)	(6		)
Net income	94			97
Basic income per share	$	0.16		$	0.17
Diluted income per share	$	0.15		$	0.16

(1)As reported in the Company’s Form 10-Q for the period ended June 30, 2005

(2)As reported in Note A — “Revenue Reclassification” in the Company’s Form 10-Q for the period ended September 30, 2005. The balance was adjusted from $684 million as reported in the Company’s Form 10-Q for the period ended June 30, 2005, in order to conform to quarterly presentation of subscription revenue.

5

FISCAL YEAR 2006 UNAUDITED QUARTERLY CASH FLOW STATEMENT DATA

	For the Three Months
	Ended June 30, 2005
	Previously
	Reported(1)			Restated
	(unaudited)
	(in millions, except per share data)
Net income	$	94		$	97
Provision for deferred income taxes	(80		)	(78		)
Non-cash compensation expense related to stock and pension plans	29			31
Decrease in noncurrent installment accounts receivable, net	$	20		$	13

(1)As reported in the Company’s Form 10-Q for the period ended June 30, 2005.

Reclassifications: Certain prior year balances have been reclassified to conform with the current period’s presentation.

Approximately $134 million of current liabilities that were components of “Accounts payable” at March 31, 2006 has been reclassified to “Accrued expenses and other current liabilities” on the Consolidated Condensed Balance Sheet to conform to the June 30, 2006 presentation.

Basis of Revenue Recognition: The Company generates revenue from the following primary sources: (1) licensing software products; (2) providing customer technical support (referred to as maintenance); and (3) providing professional services, such as consulting and education.

The Company recognizes revenue pursuant to the requirements of Statement of Position (SOP) 97-2, “Software Revenue Recognition,” issued by the American Institute of Certified Public Accountants, as amended by SOP 98-9 “Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.” In accordance with SOP 97-2, the Company begins to recognize revenue from licensing and supporting its software products when all of the following criteria are met: (1) the Company has evidence of an arrangement with a customer; (2) the Company delivers the products; (3) license agreement terms are deemed fixed or determinable and free of contingencies or uncertainties that may alter the agreement such that it may not be complete and final; and (4) collection is probable.

Under the Company’s business model, software license agreements include flexible contractual provisions that, among other things, allow customers to receive unspecified future software upgrades for no additional fee. These agreements combine the right to use the software products with maintenance for the term of the agreement. Under these agreements, once all four of the above noted revenue recognition criteria are met, the Company is required to recognize revenue ratably over the term of the license agreement. For license agreements signed prior to October 2000 (the prior business model), once all four of the above noted revenue recognition criteria were met, software license fees were recognized as revenue up-front, and the maintenance fees were deferred and subsequently recognized as revenue over the term of the license.

Revenue from professional service arrangements is generally recognized as the services are performed. Revenues from committed professional services arrangements that are sold as part of a software transaction are deferred and recognized on a ratable basis over the life of the related software transaction. If it is not probable that a project will be completed or the payment will be received, revenue is deferred until the uncertainty is removed.

Revenue from sales to distributors, resellers, and value-added resellers (VARs) is recognized when all four of the SOP 97-2 revenue recognition criteria noted above are met and when these entities sell the software product to their customers. This is commonly referred to as the sell-through method. Beginning July 1, 2004, a majority of sales of products to distributors, resellers and VARs incorporate the right for the end-users to receive certain unspecified future software upgrades and revenue from those contracts is therefore recognized on a ratable basis.

6

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, 2006.

Cash Dividends: In June, 2006, the Company’s Board of Directors declared a quarterly cash dividend of $0.04 per share. The dividend totaled approximately $23 million and was paid on June 30, 2006 to stockholders of record on June 19, 2006.

In May 2005, the Company’s Board of Directors declared a quarterly cash dividend of $0.04 per share. The dividend totaled approximately $24 million and was paid on June 30, 2005 to stockholders of record on June 15, 2005.

Statement of Cash Flows: For the three-month periods ended June 30, 2006 and 2005, interest payments were $44 million and $70 million, respectively, and income taxes paid were $129 million and $111 million, respectively. The decrease in interest payments is a result of the decrease in average debt outstanding from the first quarter of fiscal year 2006 to the first quarter of fiscal year 2007.

Derivatives: Derivatives are accounted for in accordance with U.S. GAAP and the Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities” (FAS 133). For the quarter ended June 30, 2006, the Company entered into derivative contracts with a total notional value of 30 million euros. The Company entered into these contracts with the intent of mitigating a certain portion of the Company’s euro operating exposure and are part of the Company’s on-going risk management program. These contracts did not qualify for hedging treatment under FAS 133 and did not result in any significant gains or losses for the quarter. As of June 30, 2006, the Company had no derivative contracts outstanding.

NOTE B – COMPREHENSIVE INCOME

Comprehensive income includes unrealized gains and losses on the Company’s available-for-sale securities, net of related taxes, and foreign currency translation adjustments. The components of comprehensive income for the three-month periods ended June 30, 2006 and 2005 are as follows:

	For the Three Months
	Ended June 30,
	2006		2005
			(restated)
	(in millions)
Net income	$	35	$	97
Foreign currency translation adjustment	9		(43		)
Comprehensive income	$	44	$	54

NOTE C – EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing (i) the sum of net income and the after-tax amount of interest expense recognized in the period associated with outstanding, dilutive Convertible Senior Notes by (ii) the sum of the weighted average number of common shares outstanding for the period and dilutive common share equivalents.

7

	For the Three Months
	Ended June 30,
	2006		2005
			(restated)
	(in millions, except per share amounts)
Net income	$	35	$	97
Interest expense associated with Convertible Senior Notes, net of tax	1		1
Numerator in calculation of diluted earnings per share	$	36	$	98
Weighted average shares outstanding and common share equivalents
Weighted average common shares outstanding	568		587
Weighted average Convertible Senior Note shares outstanding	23		23
Weighted average equity awards outstanding	6		2
Denominator in calculation of diluted earnings per share	597		612
Diluted earnings per share	$	0.06	$	0.16

NOTE D – ACCOUNTING FOR SHARE-BASED COMPENSATION

Effective April 1, 2005, the Company adopted, under the modified retrospective basis, the provisions of Statement of Financial Accounting Standards (SFAS) No. 123(R) (revised 2004), “Share-Based Payment”, which establishes accounting for share-based awards exchanged for employee services. Under the provisions of SFAS No. 123(R), share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the award).

The Company recognized share-based compensation in the following line items on the Consolidated Condensed Statements of Operations for the periods indicated:

	For the Three Months
	Ended June 30,
	2006		2005
			(restated)
	(in millions)
Cost of professional services	$	1	$	1
Selling, general, and administrative	13		20
Product development and enhancement	5		10
Share-based compensation expense before tax	19		31
Income tax benefit	5		8
Net compensation expense	$	14	$	23

The decrease in share-based compensation expense for the three-month period ended June 30, 2006, as compared with the corresponding prior year period was principally the result of (1) awards granted in July 2000 becoming fully amortized in fiscal year 2006, (2) a decrease in expense for performance-based stock units resulting from a decrease in the Company’s stock price as well as a reduction in the anticipated payout percentages and (3) an increase in the Company’s estimated forfeiture rate of share-based awards.

Total unrecognized compensation costs related to non-vested awards, expected to be recognized over a weighted average period of 1.6 years, amounted to $159 million at June 30, 2006.

There were no capitalized share-based compensation costs at June 30, 2006 or 2005.

8

Share-based incentive awards are provided to employees under the terms of the Company’s equity compensation plans (the Plans). The Plans are administered by the Compensation and Human Resource Committee of the Board of Directors (the Committee). Awards under the Plans may include at-the-money stock options, premium-priced stock options, restricted stock awards (RSAs), restricted stock units (RSUs), performance share units (PSUs), or any combination thereof. The non-employee members of the Company’s Board of Directors also receive deferred stock units under a separate director compensation plan.

RSAs are stock awards issued to employees that are subject to specified restrictions and a risk of forfeiture. The restrictions typically lapse over a two or three year period. The fair value of the awards is determined and fixed based on the Company’s stock price on the grant date.

RSUs are stock awards that are issued to employees that entitle the holder to receive shares of common stock as the awards vest, typically over a two- or three-year period. The fair value of the awards is determined and fixed based on the Company’s stock price on the grant date, except that for RSUs not entitled to dividend equivalents, the stock price is reduced by the present value of the expected dividend stream during the vesting period which is calculated using the risk-free interest rate.

PSUs are awards issued under the long-term incentive plan for senior executives where the number of shares ultimately granted to the employee depends on Company performance measured against specified targets and is determined after a one-year or three-year period as applicable, the “1-year and 3-year PSUs”, respectively. The fair value of each award is estimated on the date that the performance targets are established based on the fair value of the Company’s stock, adjusted for dividends as described above for RSUs, and the Company’s estimate of the level of achievement of its performance targets as described below. The Company is required to recalculate the fair value of issued PSUs each reporting period until they are granted, as defined in SFAS No. 123(R). The adjustment is based on the fair value of the Company’s stock on the reporting period date, adjusted for dividends as described above for RSUs.

Stock options are awards which allow the employee to purchase shares of the Company’s stock at a fixed price. Beginning in fiscal year 2002, stock options are granted at an exercise price equal to or greater than the Company’s stock price on the date of grant. Awards granted after fiscal year 2001 generally vest one-third per year, become fully vested two or three years from the grant date and have a contractual term of ten years.

Additional information relating to the Company’s Plans, all of which have been approved by stockholders, are discussed in more detail in Note 9 of the Company’s Financial Statements included in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2006.

Under the Company’s long-term incentive program for fiscal year 2007, which is more fully described in a Current Report filed on Form 8-K dated June 26, 2006, senior executives were issued PSUs, under which the senior executives are eligible to receive RSAs or RSUs and unrestricted shares in the future if certain targets are achieved. Each quarter, the Company compares the performance the Company expects to achieve with the performance targets. As of June 30, 2006, the Company believes its actual performance will not materially deviate from the previously established performance target for the fiscal year 2007 1-year and 3-year PSUs. As such, the Company has accrued compensation cost based on 100% of the 1-year and 3-year PSUs initially expected to be earned under the fiscal year 2007 long-term incentive program. Compensation cost will continue to be amortized over the requisite service period of the awards. At the conclusion of the performance period for the fiscal year 2007 1-year and 3-year PSUs, the number of shares of RSAs or RSUs or unrestricted stock, as applicable, issued may vary based upon the level of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized will be based on a comparison of the final performance metrics to the specified targets.

Under the Company’s long-term incentive plan for fiscal year 2006, which is more fully described in the Company’s proxy statement dated July 26, 2005, senior executives were granted stock options and issued PSUs, under which the senior executives are eligible to receive RSAs or RSUs and unrestricted shares in the future if certain targets are achieved. In the first quarter of fiscal year 2007, the Company granted 0.3 million

9

RSAs under the 1-year PSU with a weighted average grant date fair value of $21.88. The 3-year PSUs have not yet been granted. Consequently, each quarter, the Company compares the performance the Company expects to achieve with the performance targets for the 3-year PSUs. As of June 30, 2006, the Company has accrued compensation cost based on its current expectation of achievement of approximately 80% of the 3-year PSU awards under the long-term incentive plan. Compensation cost for both the 1-year and 3-year awards will continue to be amortized over the requisite service period of the awards. At the conclusion of the performance period for the 3-year PSUs, the number of shares of unrestricted stock issued may vary based upon the level of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized will be based on a comparison of the final performance metrics to the specified targets.

The Company estimates the fair value of stock options using the Black-Scholes valuation model, consistent with the provisions of SFAS No. 123(R). Key input assumptions used to estimate the fair value of stock options include the grant price of the award, the expected option term, volatility of the Company’s stock, the risk-free interest rate, and the Company’s dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options granted in the quarters ended June 30, 2006 and 2005. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards.

For the three-month periods ended June 30, 2006 and 2005, the Company issued options covering 0.4 million and 2.5 million shares of common stock, respectively. The decrease in options granted in the first quarter of fiscal year 2007, as compared with the first quarter of fiscal year 2006, was mostly attributable to the timing of the granting of option awards to senior management. In fiscal year 2006, options granted to senior management were made in the first fiscal quarter, whereas in fiscal year 2007, options granted to senior management were made in the second fiscal quarter. Options covering approximately 2 million shares of common stock were granted during the second quarter of fiscal year 2007 through August 7, 2006 at an exercise price equal to the Company’s stock price on the date of grant. The weighted average fair value at the date of grant for options granted during the three-month periods ended June 30, 2006 and 2005 was $8.66 and $15.06, respectively. The weighted average assumptions that were used for option grants in the respective periods are as follows:

	For the Three Months
	Ended June 30,
	2006		2005
Dividend yield	.72	%	.57	%
Expected volatility factor(1)	.41		.56
Risk-free interest rate(2)	4.9	%	4.1	%
Expected term (in years)(3)	4.5		6.0

(1)Measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the market prices of the Company’s traded options.

(2)The risk-free rate for periods within the contractual term of the share options is based on the U.S. Treasury yield curve in effect at the time of grant.

(3)The expected term is the number of years that the Company estimates, based primarily on historical experience, that options will be outstanding prior to exercise. The decrease in the expected term in fiscal year 2007 as compared with fiscal year 2006 was primarily due to the exclusion of employee exercise behavior related to grants authorized prior to fiscal year 1997, which expired prior to fiscal year 2007, in estimating the expected term in fiscal year 2007.

For the fiscal year 2007 grants, the Company changed its compensation structure toward a greater use of RSAs and a lesser use of RSUs.

10

For the three-month periods ended June 30, 2006 and 2005, the Company issued restricted stock units covering 0.3 million and 1.8 million shares of common stock, respectively. The weighted average grant date fair market value of these grants was $21.95 and $27.00, respectively.

For the three-month periods ended June 30, 2006 and 2005, the Company issued restricted stock awards of 2.4 million and 0.3 million shares of common stock, respectively. The weighted average grant date fair market value of these grants was $21.92 and $27.29, respectively.

NOTE E – ACCOUNTS RECEIVABLE

The Company uses installment license agreements as a standard business practice and has a history of successfully collecting substantially all amounts due under the original payment terms without making concessions on payments, software products, maintenance, or professional services. Net trade and installment accounts receivable represent financial assets derived from the committed amounts due from the Company’s customers that have been earned by the Company. These accounts receivable balances are reflected net of unamortized discounts based on imputed interest for the time value of money for license agreements under our prior business model, unearned revenue attributable to maintenance, unearned professional services contracted for in the license agreement, and allowances for doubtful accounts. These balances do not include unbilled contractual commitments executed under the Company’s current business model. Such committed amounts are summarized in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Trade and Installment Accounts Receivable are comprised of the following components:

	June 30,			March 31,
	2006			2006
	(in millions)
Current:
Accounts receivable	$	511		$	828
Other receivables	82			77
Unbilled amounts due within the next 12 months — prior business model	281			254
Less: Allowance for doubtful accounts	(23		)	(25		)
Less: Unearned revenue — current	(337		)	(629		)
Net trade and installment accounts receivable — current	$	514		$	505
Noncurrent:
Unbilled amounts due beyond the next 12 months — prior business model	444			511
Less: Allowance for doubtful accounts	(20		)	(20		)
Less: Unearned revenue — noncurrent	(39		)	(42		)
Net installment accounts receivable — noncurrent	$	385		$	449

11

The components of unearned revenue consist of the following:

	June 30,		March 31,
	2006		2006
	(in millions)
Current:
Unamortized discounts	$	38	$	44
Unearned maintenance	4		4
Deferred subscription revenue (billed, uncollected)	250		534
Unearned professional services	45		47
Total unearned revenue — current	$	337	$	629
Noncurrent:
Unamortized discounts	$	32	$	34
Unearned maintenance	7		8
Total unearned revenue — noncurrent	$	39	$	42

NOTE F – IDENTIFIED INTANGIBLE ASSETS

In the table below, capitalized software includes both purchased and internally developed software costs; other identified intangible assets includes both purchased customer relationships and trademarks/trade name costs. Internally developed capitalized software costs and other identified intangible asset costs are included in “Other noncurrent assets, net” on the Consolidated Condensed Balance Sheets.

The gross carrying amounts and accumulated amortization for identified intangible assets are as follows:

	As of June 30, 2006
	Gross		Accumulated		Net
	Assets		Amortization		Assets
	(in millions)
Capitalized software:
Purchased	$	4,775	$	4,392	$	383
Internally developed	566		375		191
Other identified intangible assets subject to amortization	650		279		371
Other identified intangible assets not subject to amortization	26		—		26
Total	$	6,017	$	5,046	$	971

	As of March 31, 2006
	Gross		Accumulated		Net
	Assets		Amortization		Assets
	(in millions)
Capitalized software:
Purchased	$	4,760	$	4,299	$	461
Internally developed	558		363		195
Other identified intangible assets subject to amortization	628		266		362
Other identified intangible assets not subject to amortization	26		—		26
Total	$	5,972	$	4,928	$	1,044

12

In connection with the acquisition of Cybermation, Inc. (Cybermation) and MDY Group International, Inc. (MDY) during the first quarter of fiscal year 2007, the Company recognized a total of approximately $15 million and $22 million of purchased software and other identified intangible assets subject to amortization, respectively. Refer to Note G, “Acquisitions,” for additional information relating to the Cybermation and MDY acquisitions.

For the first three months of fiscal years 2006 and 2005, amortization of capitalized software costs was $105 million and $113 million, respectively, and amortization of other identified intangible assets was $13 million and $11 million, respectively.

Based on the identified intangible assets recorded through June 30, 2006, annual amortization expense is expected to be as follows:

	Year Ended March 31,
	2007		2008		2009		2010		2011		2012
	(in millions)
Capitalized software:
Purchased	$	297	$	53	$	43	$	32	$	20	$	12
Internally developed	53		49		41		33		22		5
Other identified intangible assets subject to amortization	40		53		53		53		53		32
Total	$	390	$	155	$	137	$	118	$	95	$	49

The carrying value of goodwill was $5.38 billion and $5.31 billion as of June 30, 2006 and March 31, 2006, respectively. During the three-month period ended June 30, 2006, goodwill increased by approximately $72 million as a result of the Company’s first quarter acquisitions. Refer to Note G, “Acquisitions,” for additional information relating to the Cybermation and MDY acquisitions.

NOTE G – ACQUISITIONS

During the first quarter of fiscal year 2007, the Company acquired the following companies for a total cost of approximately $95 million, net of approximately $4 million of cash and cash equivalents acquired:

•Cybermation, Inc., a privately-held provider of enterprise workload automation solutions.

•MDY Group International, Inc., a privately-held provider of enterprise records management software and services.

The acquisitions of Cybermation and MDY were accounted for as purchases and accordingly, their results of operations have been included in the Consolidated Condensed Financial Statements since the dates of their acquisitions. Total goodwill recognized in those transactions amounted to approximately $72 million. The allocation of a significant portion of the purchase price to goodwill was predominantly due to the relatively short lives of the developed technology assets; whereby a substantial amount of the purchase price was based on anticipated earnings beyond the estimated lives of the intangible assets. The acquisitions included net deferred tax liabilities of approximately $12 million.

The purchase price allocations for Cybermation and MDY are based upon estimates which may be revised within one year of the date of acquisition as additional information becomes available. It is anticipated that the final purchase price allocation for these acquisitions will not differ materially from their preliminary allocations, respectively.

13

Accrued acquisition-related costs and changes in these accruals, including additions related to the Company’s acquisitions of Cybermation, MDY and prior years acquisitions were as follows:

	Duplicate
	Facilities and			Employee
	Other Costs			Costs
	(in millions)
Balance as of March 31, 2006	$	60		$	52
Additions	—			1
Settlements	(3		)	(1		)
Adjustments	—			—
Balance as of June 30, 2006	$	57		$	52

The liabilities for duplicate facilities and other costs relate to operating leases, which are actively being renegotiated and expire at various times through 2010, negotiated buyouts of the operating lease commitments, and other contractual liabilities. The liabilities for employee costs relate to involuntary termination benefits. Adjustments, to the corresponding liability and related goodwill accounts, are recorded when obligations are settled at amounts more or less than those originally estimated. The remaining liability balances are included in the “Accrued expenses and other liabilities” line item on the Consolidated Condensed Balance Sheets.

NOTE H — RESTRUCTURING AND OTHER

Fiscal 2006 Restructuring Plan

In July 2005, the Company announced a restructuring plan (the fiscal 2006 plan) to increase efficiency and productivity and to more closely align its investments with strategic growth opportunities. The total cost of the plan is expected to be $100 million. The Company accounted for the individual components of the restructuring plan as follows:

Severance:  The fiscal 2006 plan included a workforce reduction of approximately five percent or 800 positions worldwide. The termination benefits the Company offered in connection with this workforce reduction were substantially the same as the benefits the Company has provided historically for non-performance-based workforce reductions, and in certain countries have been provided based upon statutory minimum requirements. The employee termination obligations incurred in connection with the restructuring plan were provided in accordance with SFAS No. 112,  “Employers’ Accounting for Post Employment Benefits, an Amendment of FASB Statements No. 5 and 43.”  In certain countries, the Company elected to provide termination benefits in excess of legal requirements subsequent to the initial implementation of the plan. These additional costs have been recognized as incurred in accordance with SFAS No. 146,  “Accounting for Costs Associated with Exit or Disposal Activities”  (SFAS 146). The Company incurred approximately $9 million of severance costs during the first quarter of fiscal year 2007 and approximately $45 million since the plan’s inception. The Company anticipates the severance portion of this restructuring plan will cost approximately $60 million and anticipates that the remaining amount will be incurred by the end of fiscal year 2007. Final payment of these amounts is dependent upon settlement with the works councils in certain international locations and the Company’s ability to negotiate lease terminations.

14

Facilities Abandonment:  The Company recorded the costs associated with lease termination and/or abandonment when the Company ceased to utilize the leased property. Under SFAS 146, the liability associated with lease termination and/or abandonment is measured as the present value of the total remaining lease costs and associated operating costs, less probable sublease income. The Company incurred approximately $1 million of facilities abandonment related costs during the first quarter of fiscal year 2007 and approximately $31 million since the plan’s inception. The Company will accrete its obligations related to the facilities abandonment to the then-present value and, accordingly, will recognize accretion expense as a restructuring expense in future periods. The Company anticipates the facilities abandonment portion of the restructuring plan will cost up to a total of $40 million, and anticipates that the remaining amount will be incurred by the end of fiscal year 2007.

Accrued restructuring costs and changes in these accruals for the fiscal year ended March 31, 2006 were as follows:

				Facilities
	Severance			Abandonment
	(in millions)
Balance at March 31, 2006	$	18		$	27
Additions	9			1
Payments	(7		)	(4		)
Balance at June 30, 2006	$	20		$	24

The liability balance is included in “Accrued expenses and other current liabilities” on the Consolidated Condensed Balance Sheet at June 30, 2006.

Other:

During the first quarter of fiscal year 2007, the Company incurred approximately $1 million in connection with certain DPA related costs (see also note J, “Commitments and Contingencies”).

NOTE I – INCOME TAXES

Income tax expense for the quarter ended June 30, 2006 was $8 million compared with a tax benefit of $6 million for the quarter ended June 30, 2005. For the quarter ended June 30, 2006, the tax provision reflected a net benefit of approximately $7 million, primarily arising from the resolution of certain international tax contingencies. For the quarter ended June 30, 2005, a tax benefit of approximately $36 million was recorded reflecting IRS Notice 2005-38 which permitted the utilization of foreign tax credits in calculating the tax cost of repatriating funds as provided by the American Jobs Creation Act of 2004. This Act introduced a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer. The Act, signed into law in October 2004, resulted in an estimated tax charge of $55 million in fiscal year 2005.

NOTE J – COMMITMENTS AND CONTINGENCIES

Certain legal proceedings in which we are involved are discussed in Note 7, “Commitments and Contingencies” to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2006 (the Form 10-K), filed with the Securities and Exchange Commission. The following discussion should be read in conjunction with the Form 10-K.

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Stockholder Class Action and Derivative Lawsuits Filed Prior to 2004

The Company, its former Chairman and CEO Charles B. Wang, its former Chairman and CEO Sanjay Kumar, its former Chief Financial Officer Ira Zar, and its Executive Vice President Russell M. Artzt were defendants in one or more stockholder class action lawsuits, filed in July 1998, February 2002, and March 2002 in the United States District Court for the Eastern District of New York (the Federal Court), alleging, among other things, that a class consisting of all persons who purchased the Company’s common stock during the period from January 20, 1998 until July 22, 1998 were harmed by misleading statements, misrepresentations, and omissions regarding the Company’s future financial performance. In addition, in May 2003, a class action lawsuit captioned John A. Ambler v. Computer Associates International, Inc., et al. was filed in the Federal Court. The complaint in this matter, a purported class action on behalf of the Computer Associates Savings Harvest Plan (the CASH Plan) and the participants in, and beneficiaries of, the CASH Plan for a class period running from March 30, 1998, through May 30, 2003, asserted claims of breach of fiduciary duty under the federal Employee Retirement Income Security Act (ERISA). The named defendants were the Company, the Company’s Board of Directors, the CASH Plan, the Administrative Committee of the CASH Plan, and the following current or former employees and/or former directors of the Company: Messrs. Wang; Kumar; Zar; Artzt; Peter A. Schwartz; and Charles P. McWade; and various unidentified alleged fiduciaries of the CASH Plan. The complaint alleged that the defendants breached their fiduciary duties by causing the CASH Plan to invest in Company securities and sought damages in an unspecified amount.

A derivative lawsuit was filed against certain current and former directors of the Company, based on essentially the same allegations as those contained in the February and March 2002 stockholder lawsuits discussed above. This action was commenced in April 2002 in Delaware Chancery Court, and an amended complaint was filed in November 2002. The defendants named in the amended complaint were the Company as a nominal defendant, current Company directors Mr. Lewis S. Ranieri, and The Honorable Alfonse M. D’Amato, and former Company directors Ms. Shirley Strum Kenny and Messrs. Wang, Kumar, Artzt, Willem de Vogel, Richard Grasso, and Roel Pieper. The derivative suit alleged breach of fiduciary duties on the part of all the individual defendants and, as against the former management director defendants, insider trading on the basis of allegedly misappropriated confidential, material information. The amended complaint sought an accounting and recovery on behalf of the Company of an unspecified amount of damages, including recovery of the profits allegedly realized from the sale of common stock of the Company.

On August 25, 2003, the Company announced the settlement of all outstanding litigation related to the above-referenced stockholder and derivative actions as well as the settlement of an additional derivative action that had been pending in Delaware. As part of the class action settlement, which was approved by the Federal Court in December 2003, the Company agreed to issue a total of up to 5.7 million shares of common stock to the stockholders represented in the three class action lawsuits, including payment of attorneys’ fees. The Company has completed the issuance of the settlement shares as well as payment of $3.3 million to the plaintiffs’ attorneys in legal fees and related expenses.

In settling the derivative suit, which settlement was also approved by the Federal Court in December 2003, the Company committed to maintain certain corporate governance practices. Under the settlement, the Company and the individual defendants were released from any potential claim by stockholders arising from accounting-related or other public statements made by the Company or its agents from January 1998 through February 2002 (and from January 1998 through May 2003 in the case of the employee ERISA action), and the individual defendants were released from any potential claim by the Company or its stockholders relating to the same matters.

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On October 5, 2004 and December 9, 2004, four purported Company stockholders served motions to vacate the Order of Final Judgment and Dismissal entered by the Federal Court in December 2003 in connection with the settlement of the derivative action. These motions primarily seek to void the releases that were granted to the individual defendants under the settlement. On December 7, 2004, a motion to vacate the Order of Final Judgment and Dismissal entered by the Federal Court in December 2003 in connection with the settlement of the 1998 and 2002 stockholder lawsuits discussed above was filed by Sam Wyly and certain related parties. The motion seeks to reopen the settlement to permit the moving stockholders to pursue individual claims against certain present and former officers of the Company. The motion states that the moving stockholders do not seek to file claims against the Company. These motions (the 60(b) Motions) have been fully briefed. On June 14, 2005, the Federal Court granted movants’ motion to be allowed to take limited discovery prior to the Federal Court’s ruling on the 60(b) Motions. No hearing date is currently set for the 60(b) Motions.

The Government Investigation

In 2002, the United States Attorney’s Office for the Eastern District of New York (USAO) and the staff of the Northeast Regional Office of the Securities and Exchange Commission (SEC) commenced an investigation concerning certain of the Company’s past accounting practices, including the Company’s revenue recognition procedures in periods prior to the adoption of the Company’s business model in October 2000.

In response to the investigation, the Board of Directors authorized the Audit Committee (now the Audit and Compliance Committee) to conduct an independent investigation into the timing of revenue recognition by the Company. On October 8, 2003, the Company reported that the ongoing investigation by the Audit and Compliance Committee had preliminarily found that revenues were prematurely recognized in the fiscal year ended March 31, 2000, and that a number of software license agreements appeared to have been signed after the end of the quarter in which revenues associated with such software license agreements had been recognized in that fiscal year. Those revenues, as the Audit and Compliance Committee found, should have been recognized in the quarter in which the software license agreements were signed. Those preliminary findings were reported to government investigators.

Following the Audit and Compliance Committee’s preliminary report and at its recommendation, four executives who oversaw the relevant financial operations during the period in question, including Ira Zar, resigned at the Company’s request. On January 22, 2004, one of these individuals pled guilty to federal criminal charges of conspiracy to obstruct justice in connection with the ongoing investigation. On April 8, 2004, Mr. Zar and two other former executives pled guilty to charges of conspiracy to obstruct justice and conspiracy to commit securities fraud in connection with the investigation, and Mr. Zar also pled guilty to committing securities fraud. The SEC filed related actions against each of the four former executives alleging that they participated in a widespread practice that resulted in the improper recognition of revenue by the Company. Without admitting or denying the allegations in the complaints, Mr. Zar and the two other executives each consented to a permanent injunction against violating, or aiding and abetting violations of, the securities laws, and also to a permanent bar from serving as an officer or director of a publicly held company. Litigation with respect to the SEC’s claims for disgorgement and penalties is continuing.

A number of other employees, primarily in the Company’s legal and finance departments were terminated or resigned as a result of matters under investigation by the Audit and Compliance Committee, including Steven Woghin, the Company’s former General Counsel. Stephen Richards, the Company’s former Executive Vice President of Sales, resigned from his position and was relieved of all duties in April 2004, and left the Company at the end of June 2004. Additionally, on April 21, 2004, Sanjay Kumar resigned as Chairman, director and Chief Executive Officer of the Company, and assumed the role of Chief Software Architect. Thereafter, Mr. Kumar resigned from the Company effective June 30, 2004.

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In April 2004, the Audit and Compliance Committee completed its investigation and determined that the Company should restate certain financial data to properly reflect the timing of the recognition of license revenue for the Company’s fiscal years ended March 31, 2001 and 2000. The Audit and Compliance Committee believes that the Company’s financial reporting related to contracts executed under its current business model is unaffected by the improper accounting practices that were in place prior to the adoption of the business model in October 2000 and that had resulted in the restatement, and that the historical issues it had identified in the course of its independent investigation concerned the premature recognition of revenue. However, certain of these prior period accounting errors have had an impact on the subsequent financial results of the Company as described in Note 12 to the Consolidated Financial Statements in the Company’s amended Annual Report on Form 10-K/A for the fiscal year ended March 31, 2005. The Company continues to implement and consider additional remedial actions it deems necessary.

On September 22, 2004, the Company reached agreements with the USAO and the SEC by entering into a Deferred Prosecution Agreement (the DPA) with the USAO and consenting to the entry of a Final Consent Judgment in a parallel proceeding brought by the SEC (the Consent Judgment, and together with the DPA, the Agreements). The Federal Court approved the DPA on September 22, 2004 and entered the Consent Judgment on September 28, 2004. The Agreements resolve the USAO and SEC investigations into certain of the Company’s past accounting practices, including its revenue recognition policies and procedures, and obstruction of their investigations.

Under the DPA, the Company has agreed to establish a $225 million fund for purposes of restitution to current and former stockholders of the Company, with $75 million to be paid within 30 days of the date of approval of the DPA by the Federal Court, $75 million to be paid within one year after the approval date and $75 million to be paid within 18 months after the approval date. The Company made the first $75 million restitution payment into an interest-bearing account under terms approved by the USAO on October 22, 2004. The Company made the second $75 million restitution payment into an interest-bearing account under terms approved by the USAO on September 22, 2005. The Company made the third and final $75 million restitution payment into an interest-bearing account under terms approved by the USAO on March 22, 2006. Pursuant to the DPA, the Company proposed and the USAO accepted, on or about November 4, 2004, the appointment of Kenneth R. Feinberg as Fund Administrator. Also, pursuant to the Agreements, Mr. Feinberg submitted to the USAO on or about June 28, 2005, a Plan of Allocation for the Restitution Fund (the Plan). The Plan was approved by the Federal Court on August 18, 2005. The payment of these restitution funds is in addition to the amounts that the Company previously agreed to provide current and former stockholders in settlement of certain private litigation in August 2003 (see “—Stockholder Class Action and Derivative Lawsuits Filed Prior to 2004”). This amount was paid by the Company in December 2004 in shares at a then total value of approximately $174 million.

Under the Agreements, the Company also agreed, among other things, to take the following actions by December 31, 2005: (1) to add a minimum of two new independent directors to its Board of Directors; (2) to establish a Compliance Committee of the Board of Directors; (3) to implement an enhanced compliance and ethics program, including appointment of a Chief Compliance Officer; (4) to reorganize its Finance and Internal Audit Departments; and (5) to establish an executive disclosure committee. The reorganization of the Finance Department is in progress and the reorganization of the Internal Audit Department is substantially complete. On December 9, 2004, the Company announced that Patrick J. Gnazzo had been named Senior Vice President, Business Practices, and Chief Compliance Officer, effective January 10, 2005. On February 11, 2005, the Board of Directors elected William McCracken to serve as a new independent director, and also changed the name of the Audit Committee of the Board of Directors to the Audit and Compliance Committee of the Board of Directors and amended the Committee’s charter. On April 11, 2005, the Board of Directors elected Ron Zambonini to serve as a new independent director. On November 11, 2005, the Board of Directors elected Christopher Lofgren to serve as a new independent

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director. Under the Agreements, the Company has also agreed to the appointment of an Independent Examiner to examine the Company’s practices for the recognition of software license revenue, its ethics and compliance policies and other specified matters. Under the Agreements, the Independent Examiner also reviews the Company’s compliance with the Agreements and periodically reports findings and recommendations to the USAO, SEC and Board of Directors. On March 16, 2005, the Federal Court appointed Lee S. Richards III, Esq. of Richards Spears Kibbe & Orbe LLP, to serve as Independent Examiner. Mr. Richards will serve for a term of 18 months unless his term of appointment is extended under conditions specified in the Agreements. On September 15, 2005, Mr. Richards issued his six-month report concerning his recommendations regarding best practices concerning certain areas specified in the Agreements. On December 15, 2005, March 15, 2006 and June 15, 2006, Mr. Richards issued his first three quarterly reports concerning the Company’s compliance with the Agreements.

Under the Agreements, if at the conclusion of the Independent Examiner’s initial 18-month appointment, less than all recommended reforms (to the extent deemed significant by the USAO and the SEC) have been substantially implemented for at least two successive quarters, or significant exceptions have been noted in the course of the Independent Examiner’s most recent quarterly review, the USAO and the SEC may, in their discretion, extend the term of appointment of the Independent Examiner until such time as all recommended reforms (to the extent deemed significant by the USAO and the SEC) have been substantially implemented for at least two successive quarters, or no significant exceptions have been noted in the course of the Independent Examiner’s most recent quarterly review. In his Fourth Report dated June 15, 2006, the Independent Examiner expressed the view that, in light of certain internal control issues, which are described in Item 9A of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006, he is no longer able to conclude that the Company will be able to meet its obligation under the Agreements to have improved internal controls and reorganized the Finance Department prior to September 16, 2006. Consequently, the Company believes that the term of the Independent Examiner may be extended beyond September 16, 2006. Whether the USAO and the SEC will decide to extend the term or take any other action in connection with the Agreements will be made by them in their discretion. The Company is continuing to review these matters to determine what further steps it should take to address the internal control issues referenced above.

Pursuant to the DPA, the USAO will defer and subsequently dismiss prosecution of a two-count information filed against the Company charging it with committing securities fraud and obstruction of justice if the Company abides by the terms of the DPA, which currently is set to expire within 30 days after the Independent Examiner’s term of engagement is completed. Pursuant to the Consent Judgment with the SEC, the Company is permanently enjoined from violating Section 17(a) of the Securities Act of 1933 (the Securities Act), Sections 10(b), 13(a) and 13(b)(2) of the Securities Exchange Act of 1934 (the Exchange Act) and Rules 10b-5, 12b-20, 13a-1 and 13a-13 under the Exchange Act. Pursuant to the Agreements, the Company has also agreed to comply in the future with federal criminal laws, including securities laws. In addition, the Company has agreed not to make any public statement, in litigation or otherwise, contradicting its acceptance of responsibility for the accounting and other matters that are the subject of the investigations, or the related allegations by the USAO, as set forth in the DPA.

Under the Agreements, the Company also is required to cooperate fully with the USAO and SEC concerning their ongoing investigations into the misconduct of any present or former employees of the Company. The Company has also agreed to fully support efforts by the USAO and SEC to obtain disgorgement of compensation from any present or former officer of the Company who engaged in any improper conduct while employed at the Company.

After the Independent Examiner’s term expires, the USAO will seek to dismiss its charges against the Company. However, the Company shall be subject to prosecution at any time if the USAO determines that the Company has deliberately given materially false, incomplete or misleading information pursuant to the DPA, has committed any federal crime after the date of the DPA or has knowingly, intentionally and materially violated any provision of the DPA (including any of those described above). Also, as indicated above, the USAO and SEC may require that the term of the DPA be extended beyond 18 months.

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On September 22, 2004, Mr. Woghin, the Company’s former General Counsel, pled guilty to conspiracy to commit securities fraud and obstruction of justice under a two-count information filed against him by the USAO. The SEC also filed a complaint in the Federal Court against Mr. Woghin alleging that he violated Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act, and Rules 10b-5 and 13b2-1 thereunder. The complaint further alleged that under Section 20(e) of the Exchange Act, Mr. Woghin aided and abetted the Company’s violations of Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1 and 13a-13 thereunder. Mr. Woghin consented to a partial judgment imposing a permanent injunction against him from committing such violations in the future and a permanent bar from being an officer or director of a public company. The SEC’s claims for disgorgement and civil penalties against Mr. Woghin are pending.

Additionally, on September 22, 2004, the SEC filed complaints in the Federal Court against Sanjay Kumar and Stephen Richards alleging that they violated Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act, and Rules 10b-5 and 13b2-1 thereunder. The complaints further alleged that under Section 20(e) of the Exchange Act, Messrs. Kumar and Richards aided and abetted the Company’s violations of Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1 and 13a-13 thereunder. The complaint seeks to enjoin Messrs. Kumar and Richards from further violations of the Securities Act and the Exchange Act and for disgorgement of gains they received as a result of these violations. On June 14, 2006, Messrs. Kumar and Richards consented to a partial judgment imposing a permanent injunction against them prohibiting them from committing such violations of the federal securities laws in the future and permanently barring them from serving as an officer or director of public companies. The SEC’s claims against Messrs. Kumar and Richards for disgorgement of ill-gotten gains and civil penalties are pending.

On September 23, 2004, the USAO filed, in the Federal Court, a ten-count indictment charging Messrs. Kumar and Richards with conspiracy to commit securities fraud and wire fraud, committing securities fraud, filing false SEC filings, conspiracy to obstruct justice and obstruction of justice. Additionally, Mr. Kumar was charged with one count of making false statements to an agent of the Federal Bureau of Investigation and Mr. Richards was charged with one count of perjury in connection with sworn testimony before the SEC. On or about June 29, 2005, the USAO filed a superseding indictment against Messrs. Kumar and Richards, dropping one count and adding several allegations to certain of the nine remaining counts. On April 24, 2006, Messrs. Kumar and Richards pled guilty to all counts in the superseding indictment filed by the USAO. Sentencing of Messrs. Kumar and Richards is expected to take place on October 12, 2006.

On April 21, 2006, Thomas M. Bennett, the Company’s former Senior Vice President, Business Development, was arrested pursuant to an arrest warrant issued by the Federal Court. The arrest warrant charges Mr. Bennett with three counts of conspiracy to commit obstruction of justice in violation of Title 18, United States Code, Sections 1510(a) and 1505, and Title 18, United States Code, Section 371. On June 21, 2006, Mr. Bennett pled guilty to one count of conspiracy to obstruct justice. Sentencing of Mr. Bennett is currently scheduled to take place in October 2006.

As required by the Agreements, the Company continues to cooperate with the USAO and SEC in connection with their ongoing investigations of the conduct described in the Agreements, including providing documents and other information to the USAO and SEC. The Company cannot predict at this time the outcome of the USAO’s and SEC’s ongoing investigations, including any actions the Company may have to take in response to these investigations.

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Derivative Actions Filed in 2004

In June 2004, a purported derivative action was filed in the Federal Court by Ranger Governance Ltd. against certain current or former employees and/or directors of the Company. In July 2004, two additional purported derivative actions were filed in the Federal Court by purported Company stockholders against certain current or former employees and/or directors of the Company. In November 2004, the Federal Court issued an order consolidating these three derivative actions. The plaintiffs filed a consolidated amended complaint (the Consolidated Complaint) on January 7, 2005. The Consolidated Complaint names as defendants Messrs. Wang, Kumar, Zar, Artzt, D’Amato, Richards, Ranieri and Woghin; David Kaplan; David Rivard; Lloyd Silverstein; Michael A. McElroy; Messrs. McWade and Schwartz; Gary Fernandes; Robert E. La Blanc; Jay W. Lorsch; Kenneth Cron; Walter P. Schuetze; Messrs. de Vogel and Grasso; Roel Pieper; KPMG LLP; and Ernst & Young LLP. The Company is named as a nominal defendant. The Consolidated Complaint alleges a claim against Messrs. Wang, Kumar, Zar, Kaplan, Rivard, Silverstein, Artzt, D’Amato, Richards, McElroy, McWade, Schwartz, Fernandes, La Blanc, Ranieri, Lorsch, Cron, Schuetze, de Vogel, Grasso, Pieper and Woghin for contribution towards the consideration the Company had previously agreed to provide current and former stockholders in settlement of certain class action litigation commenced against the Company and certain officers and directors in 1998 and 2002 (see “—Stockholder Class Action and Derivative Lawsuits Filed Prior to 2004”) and seeks on behalf of the Company compensatory and consequential damages in an amount no less than $500 million in connection with the USAO and SEC investigations (see “—The Government Investigation”). The Consolidated Complaint also alleges a claim seeking unspecified relief against Messrs. Wang, Kumar, Zar, Kaplan, Rivard, Silverstein, Artzt, D’Amato, Richards, McElroy, McWade, Fernandes, La Blanc, Ranieri, Lorsch, Cron, Schuetze, de Vogel and Woghin for violations of Section 14(a) of the Exchange Act for alleged false and material misstatements made in the Company’s proxy statements issued in 2002 and 2003. The Consolidated Complaint also alleges breach of fiduciary duty by Messrs. Wang, Kumar, Zar, Kaplan, Rivard, Silverstein, Artzt, D’Amato, Richards, McElroy, McWade, Schwartz, Fernandes, La Blanc, Ranieri, Lorsch, Cron, Schuetze, de Vogel, Grasso, Pieper and Woghin. The Consolidated Complaint also seeks unspecified compensatory, consequential and punitive damages against Messrs. Wang, Kumar, Zar, Kaplan, Rivard, Silverstein, Artzt, D’Amato, Richards, McElroy, McWade, Schwartz, Fernandes, La Blanc, Ranieri, Lorsch, Cron, Schuetze, de Vogel, Grasso, Pieper and Woghin based upon allegations of corporate waste and fraud. The Consolidated Complaint also seeks unspecified damages against Ernst & Young LLP and KPMG LLP, for breach of fiduciary duty and the duty of reasonable care, as well as contribution and indemnity under Section 14(a) of the Exchange Act. The Consolidated Complaint requests restitution and rescission of the compensation earned under the Company’s executive compensation plan by Messrs. Artzt, Kumar, Richards, Zar, Woghin, Kaplan, Rivard, Silverstein, Wang, McElroy, McWade and Schwartz. Additionally, pursuant to Section 304 of the Sarbanes-Oxley Act, the Consolidated Complaint seeks reimbursement of bonus or other incentive-based equity compensation received by defendants Wang, Kumar, Schwartz and Zar, as well as alleged profits realized from their sale of securities issued by the Company during the time periods they served as the Chief Executive Officer (Messrs. Wang and Kumar) and Chief Financial Officer (Mr. Zar) of the Company. Although no relief is sought from the Company, the Consolidated Complaint seeks monetary damages, both compensatory and consequential, from the other defendants, including current or former employees and/or directors of the Company, KPMG LLP and Ernst & Young LLP in an amount totaling not less than $500 million.

The consolidated derivative action has been stayed pending resolution of the 60(b) Motions (see “—Stockholder Class Action and Derivative Lawsuits Filed Prior to 2004”). Also, on February 1, 2005, the Company established a Special Litigation Committee of independent members of its Board of Directors to, among other things, control and determine the Company’s response to this litigation. The Special Litigation Committee is continuing to review these matters.

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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 has advanced and will continue to advance certain attorneys’ fees and expenses incurred by current and former officers and directors in various litigations and investigations arising out of similar allegations, including the litigation described above.

Texas Litigation

On August 9, 2004, a petition was filed by Sam Wyly and Ranger Governance, Ltd. against the Company in the District Court of Dallas County, Texas, seeking to obtain a declaratory judgment that plaintiffs did not breach two separation agreements they entered into with the Company in 2002 (the 2002 Agreements). Plaintiffs seek to obtain this declaratory judgment in order to file a derivative suit on behalf of the Company (see “—Derivative Actions Filed in 2004” above). On September 3, 2004, the Company filed an answer to the petition and on September 10, 2004, the Company filed a notice of removal seeking to remove the action to federal court. On February 18, 2005, Mr. Wyly filed a separate lawsuit in the United States District Court for the Northern District of Texas (the Texas Federal Court) alleging that he is entitled to attorneys’ fees in connection with the original litigation filed in Texas. The two actions have been consolidated. On March 31, 2005, the plaintiffs amended their complaint to allege a claim that they were defrauded into entering the 2002 Agreements and to seek rescission of those agreements and damages. The amended complaint in the Ranger Governance litigation seeks rescission of the 2002 Agreements, unspecified compensatory, consequential and exemplary damages and a declaratory judgment that the 2002 Agreements are null and void and that plaintiffs did not breach the 2002 Agreements. On May 11, 2005, the Company moved to dismiss the Texas litigation. On July 21, 2005, the plaintiffs filed a motion for summary judgment. On July 22, 2005, the Texas Federal Court dismissed the latter two motions without prejudice to refiling the motions later in the action. On September 1, 2005, the Texas Federal Court granted the Company’s motion to transfer the action to the Federal Court.

Other Civil Actions

In June 2004, a lawsuit captioned Scienton Technologies, Inc. et al. v. Computer Associates International, Inc., was filed in the Federal Court. The complaint seeks monetary damages in various amounts, some of which are unspecified, but which are alleged to exceed $868 million, based upon claims for, among other things, breaches of contract, misappropriation of trade secrets, and unfair competition. This matter is in the early stages of discovery. Although the ultimate outcome cannot be determined, the Company believes that the claims are unfounded and that the Company has meritorious defenses. In the opinion of management, the resolution of this lawsuit is not likely to result in the payment of any amount approximating the alleged damages and in any event, is not expected to have a material adverse effect on the financial position of the Company.

In September 2004, two complaints to compel production of the Company’s books and records, including files that have been produced by the Company to the USAO and SEC in the course of their joint investigation of the Company’s accounting practices (see “—The Government Investigation”) were filed by two purported stockholders of the Company in Delaware Chancery Court pursuant to Section 220 of the Delaware General Corporation Law. The first complaint was filed on September 15, 2004, after the Company denied the purported stockholder access to some of the files requested in her initial demand, in particular files that had been produced by the Company to the USAO and SEC during the course of their joint investigation. This complaint concerns the inspection of certain Company documents to determine whether the Company has been involved in obstructing the joint investigation by the USAO and SEC and whether certain Company employees have breached their fiduciary duties to the Company and wasted corporate assets; these individuals include Messrs. Kumar, Wang, Zar, Silverstein, Woghin, Richards, Artzt, Cron, D’Amato, La Blanc, Ranieri, Lorsch, Schuetze, Vieux, Fernandes, de Vogel, Grasso and Goldstein and Ms. Kenny. The Company filed its answer to this complaint on October 15, 2004. On October 11, 2005, the Special Litigation Committee (see “—Derivative Actions Filed in 2004”) moved to

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stay this action. On December 13, 2005, the Delaware state court denied that motion. The second complaint, filed on September 21, 2004, concerns the inspection of documents related to Mr. Kumar’s compensation, the independence of the Board of Directors and ability of the Board of Directors to sue for return of that compensation. The Company filed its answer to this complaint on October 15, 2004.

On August 10, 2006, a purported derivative action was filed in the Federal Court by Charles Federman against certain current or former directors of the Company. The complaint names as individual defendants Messrs. Cron, D’Amato, Fernandes, La Blanc, Lorsch, McCracken, Ranieri, Schuetze, Swainson, Zambonini, Artzt, DeVogel, Grasso and Pieper, and Mss. Unger and Strum Kenny. The Company is named as a nominal defendant. The complaint alleges purported claims against the individual defendants for breach of fiduciary duty, abuse of control, gross mismanagement, corporate waste, and violations of Section 14(a) of the Exchange Act for alleged false and material misstatements made in the Company’s proxy statements issued in 2003, 2004 and 2005. The premise for these purported claims are the disclosures made by the Company in its Annual Report on Form 10-K for the fiscal year ended March 31, 2006, filed on July 31, 2006, concerning the Company’s restatement of prior fiscal periods to reflect additional (a) non-cash, stock-based compensation expense relating to employee stock option grants prior to the Company’s fiscal year 2002, (b) subscription revenue relating to the early renewal of certain license agreements, and (c) sales commission expense that should have been recorded in the third quarter of the Company’s fiscal year 2006. The complaint seeks relief against the individual defendants of an unspecified amount of compensatory damages, equitable relief including an order setting aside the election to the Company’s Board of Directors of defendants D’Amato, Fernandes, La Blanc, Lorsch, McCracken, Ranieri, Schuetze, Swainson, Unger, and Zambonini, an award of plaintiff’s costs and expenses, including reasonable attorneys’ fees, as well as other unspecified damages allegedly sustained by the Company. In the opinion of management, the resolution of this lawsuit is not expected to have a material adverse effect on the financial position of the Company.

The Company, various subsidiaries, and certain current and former officers have been named as defendants in various other lawsuits and claims arising in the normal course of business. The Company believes that it has meritorious defenses in connection with such lawsuits and claims, and intends to vigorously contest each of them. In the opinion of the Company’s management, the results of these other lawsuits and claims, either individually or in the aggregate, are not expected to have a material effect on the Company’s financial position, results of operations, or cash flow.

NOTE K – SUBSEQUENT EVENTS

In July 2006, the Company acquired XOsoft, Inc., a privately held company that provided continuous application availability solutions that minimize application downtime and accelerate time to recovery.

In August 2006, the Company announced a new cost reduction and restructuring plan (the Fiscal 2007 Plan) that is expected to cost approximately $200 million through fiscal year 2008.

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Item 2:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (Form 10-Q) contains certain forward-looking information relating to CA, Inc. (the “Company,” “Registrant,” “CA,” “we,” “our,” or “us”) that is based on the beliefs of and assumptions made by our management as well as information currently available to management. When used in this Form 10-Q, the words “anticipate,” “believe,” “estimate,” “expect,” and similar expressions are intended to identify forward-looking information. Such information includes, for example, the statements made under the caption “Outlook” in this MD&A, but also appears in other parts of this Form 10-Q. This forward-looking information reflects our current views with respect to future events and is subject to certain risks, uncertainties, and assumptions, some of which are described below in the section “Risk Factors” and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2006 filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should our assumptions prove incorrect, actual results may vary materially from those described in this Form 10-Q as anticipated, believed, estimated, or expected. We do not intend to update these forward-looking statements.

QUARTERLY UPDATE

•In April 2006, we transitioned our human resources applications worldwide and certain financial and sales processing systems, for our North American operations to SAP, an enterprise resource planning (“ERP”) system. This change in our information system platform for the Company’s financial and operational systems is part of our on-going project to implement SAP at all of the Company’s facilities worldwide, which is expected to be completed over the next few years.

•In May 2006, we completed the acquisition of Cybermation, a privately-held provider of enterprise workload automation solutions. The acquisition extends the Company’s workload automation portfolio, which helps customers unify and simplify their IT environments by automating the scheduling and deployment of workloads across mainframe and distributed systems.

•In June 2006, our Board of Directors authorized a $2 billion common stock repurchase plan for fiscal year 2007 which will replace the prior $600 million common stock repurchase plan. We expect to execute the repurchase in two phases in the amount of $1 billion per phase and to finance the stock repurchase plan through a combination of cash on hand and bank financing.

•In June 2006, we completed the acquisition of MDY Group International, Inc. (MDY), a privately-held provider of enterprise records management software and services. MDY’s solutions help organizations to centrally manage physical and electronic records distributed across the enterprise, regardless of location or origin. The acquisition will help our customers more easily fulfill their company-wide compliance, corporate governance and legal discovery requirements.

•In June 2006, we announced that James E. Bryant was named Executive Vice President and Chief Administrative Officer of the Company, reporting to our Chief Executive Officer.

•In July 2006, we acquired XOsoft, Inc., a privately held company that provided continuous application availability solutions that minimize application downtime and accelerate time to recovery. The acquisition enables us to offer a complete recovery management solution that allows customers to minimize the risk of data loss, reduce the time spent on backups and expedite recovery of critical business services.

•In July 2006, we announced that Nancy E. Cooper was named Executive Vice President and Chief Financial Officer of the Company, reporting to our Chief Executive Officer. Her appointment is expected to be effective on or about August 15, 2006.

•In August 2006, we announced that Dr. Ajei S. Gopal has joined CA as Senior Vice President and General Manager of the Enterprise Systems Management (ESM) business unit. Mr. Gopal succeeds Al Nugent who was recently appointed our Chief Technology Officer.

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•In August 2006, we announced a fiscal year 2007 cost reduction and restructuring plan that is expected to yield approximately $200 million in annualized savings when completed. The plan’s objectives include a workforce reduction of approximately 1,700 positions, including 300 positions associated with consolidated joint ventures, and facilities consolidations and other cost reduction initiatives. We expect to incur total pre-tax restructuring charges of approximately $200 million over the 2007 and 2008 fiscal years in connection with the plan.

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PERFORMANCE INDICATORS

Management uses several quantitative performance indicators to assess our financial results and condition. Each provides a measurement of the performance of our business model and how well we are executing our plan.

Our subscription-based business model is unique among our competitors in the software industry and particularly during the period in which license agreements under our prior business model come up for renewal, it is difficult to compare our results for many of our performance indicators with those of our competitors. The following is a summary of the principal quantitative performance indicators that management uses to review performance:

	For the Three Months
	Ended June 30,									Percent
	2006			2005			Change			Change
	(restated)
	(dollars in millions)
Subscription revenue	$	739		$	702		$	37		5	%
Total revenue	$	956		$	927		$	29		3	%
Subscription revenue as a percent of total revenue	77		%	76		%	1		%	1	%
New deferred subscription value (direct)	$	384		$	336		$	48		14	%
New deferred subscription value (indirect)	$	49		$	43		$	6		14	%
Weighted average license agreement duration in years (direct)	2.48			2.70			(0.22		)	(8	)%
Cash (used in) provided by operating activities	$	(46	)	$	93		$	(139	)	N/A
Net income	$	35		$	97		$	(62	)	(64	)%

	June 30,		March 31,					Percent
	2006		2006		Change			Change
	(dollars in millions)
Total cash, cash equivalents, and marketable securities	$	1,522	$	1,865	$	(343	)	(18	)%
Total debt	$	1,811	$	1,811	$	—		—

Analyses of our performance indicators, including general trends, can be found in the “Results of Operations” and “Liquidity and Capital Resources” sections of this MD&A. The performance indicators discussed below are those that we believe are unique because of our subscription-based business model.

Subscription Revenue — Subscription revenue is the ratable revenue recognized in a period from amounts previously recorded as deferred subscription value. If the weighted average life of our license agreements remains constant, an increase in deferred subscription value will ultimately result in an increase in subscription revenue.

Deferred Subscription Value — Under our business model, the portion of the license contract value that has not yet been earned creates what we refer to as deferred subscription value. As revenue is ratably recognized (evenly on a monthly basis), it is reported as “Subscription revenue” on our Consolidated Condensed Statements of Operations, and the deferred subscription value attributable to that contract is correspondingly reduced. When recognized as revenue, the amount is reported on the “Subscription revenue” line item in our Consolidated Condensed Statements of Operations. If a customer pays for software prior to the recognition of revenue, the amount is reported as a liability entitled “Deferred subscription revenue (collected)” on our Consolidated Condensed Balance Sheets. Customers do not always pay for software in equal annual installments over the life of a license agreement. The amount collected under a license agreement for the next twelve months but not yet recognized as revenue is reported as a liability entitled “Deferred subscription revenue (collected) — current” on our Consolidated Condensed Balance Sheets. The amount paid under a license agreement for periods subsequent to the next twelve months, which will be recognized as revenue on a monthly basis only in those future years, is reported as a liability entitled “Deferred subscription revenue

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(collected) — noncurrent” on our Consolidated Condensed Balance Sheets. The increase or decrease in current payments attributable to periods subsequent to the next twelve months is reported as an operating activity entitled “Deferred subscription revenue (collected) — noncurrent” in our Consolidated Condensed Statements of Cash Flows.

Payments received in the current period that are attributable to later years of a license agreement have a positive impact in the current period on billings and cash provided by continuing operating activities. Accordingly, to the extent such payments are attributable to the later years of a license agreement, the license would provide a correspondingly reduced contribution to billings and cash from operating activities during the license’s later years.

New Deferred Subscription Value — New deferred subscription value represents the total incremental value (contract value) of software licenses sold in a period, which will be accounted for under our subscription model of revenue recognition. In the second quarter of fiscal year 2005, we began offering more flexible license terms to our channel partners’ end users, necessitating ratable recognition of revenue for the majority of our indirect business. Prior to July 1, 2004, such channel license revenue had been recorded up-front on a sell-through basis (when a distributor, reseller, or VAR sells the software product to its customers) and reported on the “Software fees and other” line item on the Consolidated Condensed Statements of Operations. New deferred subscription value excludes the value associated with single-year maintenance-only license agreements, license-only indirect sales, and professional services arrangements and does not include that portion of bundled maintenance or unamortized discounts that are converted into subscription revenue upon renewal of prior business model contracts.

New deferred subscription value is what we expect to collect over time from our customers based upon contractual license agreements entered into during a reporting period. This amount is recognized as subscription revenue ratably over the applicable software license term. The license agreements that contribute to new deferred subscription value represent binding payment commitments by customers over periods generally up to three years. Our new deferred subscription value typically increases in each consecutive fiscal quarter, with the fourth quarter being the strongest. However, since new deferred subscription value is impacted by the volume and dollar amount of contracts coming up for renewal and the amount of early contract renewals, the change in new deferred subscription value, relative to previous periods, does not necessarily correlate to the change in billings or cash receipts, relative to previous periods. The contribution to current period revenue from new deferred subscription value from any single license agreement is relatively small, since revenue is recognized ratably over the applicable license agreement term.

Weighted Average License Agreement Duration in Years — The weighted average license agreement duration in years reflects the duration of all software licenses executed during a period, weighted to reflect the contract value of each individual software license. The weighted average duration is impacted by the volume and dollar amount of contracts coming up for renewal, and therefore may change from period to period and will not necessarily correlate to the prior year periods.

RESULTS OF OPERATIONS

Revenue:

The following table presents the percentage of total revenue and the percentage of period-over-period dollar change for the revenue line items on our Consolidated Condensed Statements of Operations for the three-month periods ended June 30, 2006 and 2005. These comparisons of past financial results are not necessarily indicative of future results.

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	For the Three Months
	Ended June 30,
					Percentage
	Percentage of				of
	Total				Dollar
	Revenue				Change
					2006/
	2006		2005		2005
			(restated)
Revenue
Subscription revenue	77	%	76	%	5	%
Maintenance	11	%	11	%	(4	)%
Software fees and other	3	%	4	%	(35	)%
Financing fees	1	%	2	%	(43	)%
Professional services	8	%	7	%	22	%
Total revenue	100	%	100	%	3	%

Total Revenue

Total revenue for the quarter ended June 30, 2006 increased $29 million, or 3%, from the prior year comparable quarter to $956 million. As more fully described below, the increase was primarily due to growth in subscription revenue and professional services revenue. These increases were partly offset by declines in maintenance and software fees and other revenue.

Subscription Revenue

Subscription revenue represents the portion of revenue ratably recognized on software license agreements entered into under our business model. Some of the licenses recorded between October 2000, when our business model was implemented, and the first quarter of fiscal year 2007 continued to contribute to subscription revenue on a monthly, ratable basis. As a result, subscription revenue for the quarter ended June 30, 2006 includes the ratable recognition of contracts recorded in the first quarter of fiscal year 2007, as well as contracts and related renewals recorded between October 2000 and the end of fiscal year 2006, depending on the contract length.

Subscription revenue for the quarter ended June 30, 2006 increased $37 million, or 5%, from the comparable prior year quarter to $739 million. Sales made directly to our end-user customers, which we define as our direct business, contributed approximately $693 million to subscription revenue compared to $671 million in the comparable prior year quarter. The increase was primarily due to increases in new deferred subscription value from acquired products as well as the manner in which we record maintenance revenue under our business model, as described below. Sales made through our channel partners, which we define as our indirect business, contributed approximately $46 million to subscription revenue compared to $31 million in the comparable prior year period primarily due to the continued transition of indirect revenue to the ratable model, which began in the second quarter of fiscal year 2005.

For the quarters ended June 30, 2006 and 2005, we added new deferred subscription value related to our direct business of $384 million and $336 million, respectively. Licenses executed under our business model in the quarters ended June 30, 2006 and 2005 had weighted average durations of 2.48 and 2.70 years, respectively. In addition, we recorded $49 million of new deferred subscription value for the quarter ended June 30, 2006 related to our indirect business, compared to $43 million in the prior year.

Under the prior business model, maintenance revenue was separately identified and was reported on the “Maintenance” line item in the Consolidated Condensed Statements of Operations. Under our business model, maintenance that is bundled with product sales is not separately identified in our customers’ license agreements and therefore is included within the “Subscription revenue” line item in the Consolidated Condensed Statements of Operations. Under the prior business model, financing revenue was also separately identified in the Consolidated Condensed Statements of Operations. Under our business model, financing

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fees are no longer applicable and the entire contract value is now recognized as subscription revenue over the term of the contract. The quantification of the impact that each of these factors had on the increase in subscription revenue is not determinable.

Maintenance

Maintenance revenue for the quarter ended June 30, 2006 decreased $4 million, or 4%, from the comparable prior year quarter to $103 million. In the first quarter of fiscal year 2007, we recorded approximately $11 million of additional separately identifiable maintenance revenue as a result of acquisitions completed subsequent to the first quarter of fiscal year 2006. After excluding the impact of these acquisitions, the decrease in maintenance revenue is a result of our transition to, and the increased number of license agreements under, our business model, where maintenance revenue, bundled along with license revenue, is reported on the “Subscription revenue” line item on the Consolidated Condensed Statements of Operations. The combined maintenance and license revenue on these types of license agreements is recognized on a monthly basis ratably over the term of the agreement. The quantification of the impact that our transition to the new business model had on maintenance revenue is not determinable since maintenance bundled with software licenses under our business model is not separately identified. The amount of maintenance revenue reported on this line item from our indirect business for the three month periods ended June 30, 2006 and 2005 was $15 million and $13 million, respectively.

Software Fees and Other

Software fees and other revenue consist of revenue related to distribution and OEM channel partners (sometimes referred to as our “indirect” or “channel” revenue) that has been recorded on an up-front sell-through basis, certain revenue associated with acquisitions prior to the transition to our business model, revenue from joint ventures, royalty revenue and other revenue. New deferred subscription value related to acquisitions is initially recorded on the acquired company’s systems generally under a perpetual or up-front model, and is typically converted to our ratable model within the first fiscal year after the acquisition. As these contracts are renewed under our business model, revenue is recognized ratably as subscription revenue on a monthly basis over the term of the agreement.

Software fees and other revenue for the first quarter of fiscal year 2007 decreased $13 million, or 35%, from the comparable prior year quarter to $24 million. This reduction is principally due to a $8 million decline in prior business model revenue, as ratable revenue from new business model contracts was recognized as subscription revenue in the Consolidated Condensed Statements of Operations. Additionally, we experienced declines in indirect revenue of $2 million associated with the transition to our subscription model, as well as revenue from acquisitions and royalties, as compared with the comparable prior year period.

Financing Fees

Financing fees result from the initial discounting to present value of product sales with extended payment terms under the prior business model, which required up-front revenue recognition. This discount initially reduced the related installment accounts receivable and is referred to as “Unamortized discounts.” The related unamortized discount is amortized over the life of the applicable license agreement and is reported as financing fees. Under our business model, additional unamortized discounts are no longer recorded, since we no longer recognize revenue on an up-front basis for sales of products with extended payment terms. As expected, for the quarter ended June 30, 2006, these fees decreased $6 million, or 43%, from the comparable prior year quarter to $8 million. The decrease is attributable to the discontinuance of offering license agreements under the prior business model and is expected to decline to zero over the next several years.

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Professional Services

Professional services revenue for the quarter ended June 30, 2006 increased $15 million, or 22%, from the prior year comparable quarter to $82 million. The increase was attributable to professional service engagements relating to companies acquired subsequent to the first quarter of fiscal year 2006 of approximately $5 million, growth in security software engagements which utilize Access Control and Identity Management solutions, growth in IT Service and Asset Management solutions, and project and portfolio management services tied to Clarity solutions.

Total Revenue by Geography

The following table presents the amount of revenue earned from the United States and international geographic regions and corresponding percentage changes for the three-month periods ended June 30, 2006 and 2005. These comparisons of financial results are not necessarily indicative of future results.

	Three Months Ended June 30,
	(dollars in millions)
									Dollar			Percentage
	2006		%		2005		%		Change			Change
					(restated)
United States	$	518	54	%	$	484	52	%	$	34		7	%
International	438		46	%	443		48	%	(5		)	(1	)%
	$	956	100	%	$	927	100	%	$	29		3	%

Revenue in the United States increased by approximately $34 million, or 7%, and was primarily attributable to growth from acquisitions. International revenue declined by approximately $5 million, or approximately 1%, for the first quarter of fiscal year 2007 as compared with the first quarter of fiscal year 2006.

Price changes did not have a material impact on revenue in the first quarter of fiscal year 2007 or on the comparable prior fiscal year period.

Expenses:

The following table presents expenses as a percentage of total revenue and the percentage of period-over-period dollar change for the line items on our Consolidated Condensed Statements of Operations for the three-month periods ended June 30, 2006 and 2005. These comparisons of financial results are not necessarily indicative of future results.

	For the Three Months
	Ended June 30,
	Percentage of				Percentage of
	Total				Dollar
	Revenue				Change
					2006/
	2006		2005		2005
			(restated)
Operating expenses
Amortization of capitalized software costs	11	%	12	%	(7	)%
Cost of professional services	8	%	6	%	20	%
Selling, general, and administrative	45	%	42	%	12	%
Product development and enhancements	19	%	19	%	4	%
Commissions, royalties and bonuses	7	%	7	%	15	%
Depreciation and amortization of other intangible assets	4	%	3	%	13	%
Other gains, net	—		—		(67	)%
Restructuring and other	1	%	—		N/A
Charge for in-process research and development costs	—		—		(100	)%
Total operating expenses	95	%	89	%	9	%
Interest expense, net	1	%	1	%	(11	)%

Note — Amounts may not add to their respective totals due to rounding.

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Amortization of Capitalized Software Costs

Amortization of capitalized software costs consists of the amortization of both purchased software and internally generated capitalized software development costs. Internally generated capitalized software development costs are related to new products and significant enhancements to existing software products that have reached the technological feasibility stage. Amortization of capitalized software costs for the quarter ended June 30, 2006 decreased $8 million, or 7%, from the comparable prior year quarter to $105 million primarily due to certain software costs being fully amortized.

Cost of Professional Services

Cost of professional services consists primarily of the personnel-related costs associated with providing professional services and training to customers. Cost of professional services for the quarter ended June 30, 2006 increased $12 million, or 20%, from the comparable prior year quarter to $72 million primarily as a result of the increases in professional services revenue.

Selling, General and Administrative (SG&A)

SG&A expenses for the quarter ended June 30, 2006 increased $45 million, or 12%, from the comparable prior year quarter to $434 million. The increase was primarily attributable to higher personnel costs of approximately $35 million principally related to recent acquisitions, as well as increases in selling and marketing related costs of approximately $11 million.

Product Development and Enhancements

For the quarter ended June 30, 2006, product development and enhancement expenditures, which include product support, increased $7 million, or 4%, from the comparable prior year quarter to $179 million. For the quarters ended June 30, 2006 and 2005, product development and enhancement expenditures represented approximately 19% of total revenue in each year. During the first quarter of fiscal year 2007, we continued to focus on and invest in product development and enhancements for emerging technologies such as wireless networks and smartphones, as well as a broadening of our enterprise product offerings.

Commissions, Royalties and Bonuses

Commissions, royalties and bonuses for the first quarter of fiscal year 2007 increased $9 million, or 15%, from the comparable prior year quarter to $71 million. The increase was primarily due to higher bonuses resulting from acquisition-related retention payments and an increase in the number of non-sales individuals compensated through annual incentive compensation (bonus) plans. Sales commissions are expensed in the period in which they are earned by employees, which is typically upon the signing of a contract while bonuses are typically estimated and accrued based on projections of full year performance.

Depreciation and Amortization of Other Intangible Assets

Depreciation and amortization of other intangible assets for the quarter ended June 30, 2006 increased $4 million, or 13%, from the comparable prior year quarter to $34 million. The increase in depreciation and amortization of other intangible assets was primarily due to the amortization of intangibles recognized in conjunction with recent acquisitions and the SAP ERP system that went live in April 2006.

Other Gains, Net

Other gains, net include gains and losses attributable to divested assets, certain foreign currency exchange rate fluctuations, and certain other infrequent events. For the quarter ended June 30, 2006, other gains, net decreased $2 million to a reported gain of $1 million.

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Restructuring and Other

We recorded restructuring charges of approximately $10 million for the first quarter of fiscal year 2007 for severance and other termination benefits and facility closures in connection with the fiscal 2006 restructuring plan (FY06 Plan) announced in July 2005. This plan was designed to more closely align our investments with strategic growth opportunities and included a workforce reduction of approximately five percent or 800 positions worldwide. The plan was expected to yield about $75 million in savings on an annualized basis, once the reductions were fully implemented. We anticipate the FY06 Plan will cost up to $100 million. The associated liability balance is included in “Accrued expenses and other current liabilities” on the Consolidated Condensed Balance Sheets. Approximately $1 million of other charges for the first quarter of fiscal year 2007 relate primarily to certain costs in connection with the Company’s Deferred Prosecution Agreement entered into with the United States Attorney’s Office for the Eastern District of New York.

Interest Expense, net

Net interest expense for the first quarter of fiscal year 2007 decreased $1 million, or 11%, as compared to the prior fiscal year first quarter to $8 million. The decrease was primarily due to less interest paid on debt outstanding as we repaid the 6.375% Senior Notes in April 2005. This savings was partially offset by a decrease in our average cash balance during the quarter ended June 30, 2006 as compared to the quarter ended June 30, 2005.

Income Taxes

Income tax expense for the quarter ended June 30, 2006 was $8 million compared with a tax benefit of $6 million for the quarter ended June 30, 2005. For the quarter ended June 30, 2006, the tax provision reflected a net benefit of approximately $7 million, primarily arising from the resolution of certain international tax contingencies. For the quarter ended June 30, 2005, a tax benefit of approximately $36 million was recorded reflecting IRS Notice 2005-38 which permitted the utilization of foreign tax credits in calculating the tax cost of repatriating funds as provided by the American Jobs Creation Act of 2004. This Act introduced a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer. The Act resulted in an estimated tax charge of $55 million in the fiscal year ended March 31, 2005.

We are subject to tax in many jurisdictions and a certain degree of estimation is required in recording assets and liabilities related to income taxes. We believe that adequate provision has been made for any adjustments that may result from tax examinations. The outcome of tax examinations, however, cannot be predicted with certainty as tax matters could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle. Should any issues addressed in our tax audits be resolved in a manner not consistent with management’s expectations, we could be required to adjust its provision for income tax in the period such resolution occurs.

LIQUIDITY AND CAPITAL RESOURCES

Cash, cash equivalents and marketable securities totaled $1.52 billion at June 30, 2006, a decrease of $0.35 billion from the March 31, 2006 balance of $1.87 billion.

Sources and Uses of Cash

Cash (used in) generated from operating activities for the quarters ended June 30, 2006 and 2005 was $(46) million and $93 million, respectively. In the first quarter of fiscal year 2007, cash used in operating activities was negatively impacted by a decline in accounts payable, accrued expenses and other current liabilities of approximately $113 million. This decline was primarily related to management’s determination in the fourth quarter of fiscal year 2006 that its payable cycle had exceeded an optimal level and that it should be reduced. Other contributing factors include higher disbursements for commissions as well as a contribution to the CA Savings Harvest Plan, a 401(k) plan, which was not pre-funded in fiscal year 2006.

The Company’s estimate of the fair value of net installment accounts receivable recorded under the prior business model approximates carrying value. Amounts due from customers under our business model are

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offset by deferred subscription value related to these license agreements, leaving no or minimal net carrying value on the balance sheet for such amounts. The fair value of such amounts may exceed this carrying value but cannot be practically assessed since there is no existing market for a pool of customer receivables with contractual commitments similar to those owned by us. The actual fair value may not be known until these amounts are sold, securitized, or collected. Although these customer license agreements commit the customer to payment under a fixed schedule, the agreements are considered executory in nature due to the ongoing commitment to provide unspecified future upgrades as part of the agreement terms.

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Under our business model, we can estimate the total amounts to be billed and/or collected at the conclusion of a reporting period. For current business model contracts, amounts we expect to bill within the next fiscal year at June 30, 2006, increased by approximately $5 million to approximately $1.69 billion from the prior year. Amounts we expect to bill for periods after 12 months declined by $34 million to $1.20 billion. These declines are due to a combination of accelerated customer payments and the timing of the renewal of existing contracts. The estimated amounts expected to be collected and a reconciliation of such amounts to the amounts we recorded as accounts receivable are as follows:

Reconciliation of Amounts to be Collected to Accounts Receivable

	June 30,			March 31,
	2006			2006
	(in millions)
Current:
Accounts receivable	$	511		$	828
Other receivables	82			77
Amounts to be billed within the next 12 months — business model	1,685			1,680
Amounts to be billed within the next 12 months — prior business model	281			254
Less: allowance for doubtful accounts	(23		)	(25		)
Net amounts expected to be collected — current	2,536			2,814
Less:
Unamortized discounts	(38		)	(44		)
Unearned maintenance	(4		)	(4		)
Deferred subscription revenue — current, billed	(250		)	(534		)
Deferred subscription value — current, uncollected	(823		)	(476		)
Deferred subscription value — noncurrent, uncollected,
Related to current accounts receivable	(862		)	(1,204		)
Unearned professional services	(45		)	(47		)
Trade and installment accounts receivable — current, net	514			505
Non-Current:
Amounts to be billed beyond the next 12 months — business model	1,202			1,236
Amounts to be billed beyond the next 12 months — prior business model	444			511
Less: allowance for doubtful accounts	(20		)	(20		)
Net amounts expected to be collected — noncurrent	1,626			1,727
Less:
Unamortized discounts	(32		)	(34		)
Unearned maintenance	(7		)	(8		)
Deferred subscription value — noncurrent, uncollected	(1,202		)	(1,236		)
Installment accounts receivable — noncurrent, net	385			449
Total accounts receivable, net	$	899		$	954

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	June 30,		March 31,
	2006		2006
	(in millions)
Deferred Subscription Value:
Deferred subscription revenue (collected) — current	$	1,500	$	1,517
Deferred subscription revenue (collected) — noncurrent	557		448
Deferred subscription revenue current, billed	250		534
Deferred subscription value — current, uncollected	823		476
Deferred subscription value — noncurrent, uncollected, related to current accounts receivable	862		1,204
Deferred subscription value — noncurrent, uncollected	1,202		1,236
Aggregate deferred subscription value balance	$	5,194	$	5,415

Approximately 10% of the total deferred subscription value balance of approximately $5.19 billion at June 30, 2006 is associated with multi-year contracts signed with the U.S. Federal Government and other U.S. state and local governmental agencies that are generally subject to annual fiscal funding approval and/or may be terminated at the convenience of the government. While funding under these contracts is not assured, we do not believe any circumstances exist which might indicate that such funding will not be approved and paid in accordance with the terms of our contracts. For any contracts with governmental agencies who are first-time customers that are subject to annual fiscal funding approval, we generally do not record the deferred subscription value for the unbilled portion of the contract until the funding is approved. We also receive contracts from non-U.S. governmental agencies that contain similar provisions. The total balance of deferred subscription value related to non-U.S. governmental agencies that may be terminated at the convenience of the agencies is not material to the overall deferred subscription value balance.

First Quarter Comparison — Fiscal Year 2007 versus Fiscal Year 2006

Operating Activities:

Cash used in operating activities was $46 million, representing a decline of approximately $139 million as compared to the comparable prior year period. The decline was driven primarily by higher disbursements to vendors of approximately $90 million and higher payroll related disbursements of approximately $71 million. The higher payroll related disbursements were primarily the result of increased personnel costs from acquisitions as well as higher payments for commissions due to increased commission cost in the fourth quarter in the fiscal year 2006 as compared to the comparable prior year period.

Investing Activities:

Cash used in investing activities for the first quarter of fiscal year 2007 was $147 million as compared to $201 million for the comparable prior year period. The reduction in cash used in investing activities was primarily related to lower amounts paid for acquisitions, net of cash acquired. Partially offsetting this was lower proceeds from the sale of marketable securities.

Financing Activities:

Cash used in financing activities for the quarter ended June 30, 2006 was $174 million compared to $883 million in the comparable prior year period. The reduction relates primarily to the repayment of debt in the prior year, partially offset by an increase in the repurchase of treasury stock.

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Liquidity

As of June 30, 2006 and March 31, 2006, our debt arrangements consisted of the following:

	June 30, 2006				March 31, 2006
	Maximum		Outstanding		Maximum		Outstanding
	Available		Balance		Available		Balance
	(in millions)
Debt Arrangements:
6.500% Senior Notes due April 2008	$	—	$	350	$	—	$	350
4.750% Senior Notes due December 2009	—		500		—		500
1.625% Convertible Senior Notes due December 2009	—		460		—		460
5.625% Senior Notes due December 2014	—		500		—		500
International line of credit	5		—		5		—
Other	—		1		—		1
Total			$	1,811			$	1,811

2004 Revolving Credit Facility

In December 2004, we entered into a new unsecured, revolving credit facility (the 2004 Revolving Credit Facility). The maximum committed amount available under the 2004 Revolving Credit Facility is $1 billion, exclusive of incremental credit increases of up to an additional $250 million which are available subject to certain conditions and the agreement of our lenders. The 2004 Revolving Credit Facility expires December 2008 and no amount was drawn as of June 30, 2006 or March 31, 2006. Refer to Note 6, “Debt”, in the Notes to the Company’s Consolidated Financial Statements for fiscal year 2006 in the Form 10-K for additional information.

Borrowings under the 2004 Revolving Credit Facility will bear interest at a rate dependent on our credit ratings at the time of such borrowings and will be calculated according to a base rate or a Eurocurrency rate, as the case may be, plus an applicable margin and utilization fee. Depending on our credit rating at the time of borrowing, the applicable margin can range from 0% to 0.325% for a base rate borrowing and from 0.50% to 1.325% for a Eurocurrency borrowing, and the utilization fee can range from 0.125% to 0.250%. At our current credit ratings in August 2006, the applicable margin would be 0.025% for a base rate borrowing and 1.025% for a Eurocurrency borrowing, and the utilization fee would be 0.125%. In addition, we must pay facility fees quarterly at rates dependent on our credit ratings. The facility fees can range from 0.125% to 0.30% of the aggregate amount of each lender’s full revolving credit commitment (without taking into account any outstanding borrowings under such commitments). At our current credit ratings in August 2006, the facility fee is 0.225% of the aggregate amount of each lender’s revolving credit commitment.

The 2004 Revolving Credit Facility contains customary covenants for transactions of this type, including two financial covenants: (i) for the 12 months ending each quarter-end, the ratio of consolidated debt for borrowed money to consolidated cash flow, each as defined in the 2004 Revolving Credit Facility, must not exceed 3.25 for the quarter ending December 31, 2004 and 2.75 for quarters ending March 31, 2005 and thereafter; and (ii) for the 12 months ending each quarter-end, the ratio of consolidated cash flow to the sum of interest payable on, and amortization of debt discount in respect of, all consolidated debt for borrowed money, as defined in the 2004 Revolving Credit Facility, must not be less than 5.00. In addition, as a condition precedent to each borrowing made under the 2004 Revolving Credit Facility, as of the date of such borrowing, (i) no event of default shall have occurred and be continuing and (ii) we are to reaffirm that the representations and warranties made in the 2004 Revolving Credit Facility (other than the representation with respect to material adverse changes, but including the representation regarding the absence of certain material litigation) are correct. As of August 14, 2006, we are in compliance with these debt covenants.

The Company has announced a $2 billion stock repurchase program to be completed in fiscal year 2007. Depending on how the Company chooses to finance the stock repurchase, the Company’s ability to borrow under the 2004 Revolving Credit Facility could be restricted, unless the Company obtains a waiver from the credit facility lending banks. If necessary, the Company will seek a waiver of the restriction.

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Fiscal Year 1999 Senior Notes

In fiscal year 1999, the Company issued $1.75 billion of unsecured Senior Notes in a transaction pursuant to Rule 144A under the Securities Act of 1933 (Rule 144A). Amounts borrowed, rates, and maturities for each issue were $575 million at 6.25% due April 15, 2003, $825 million at 6.375% due April 15, 2005, and $350 million at 6.5% due April 15, 2008. In April 2005, the Company repaid the $825 million remaining balance of the 6.375% Senior Notes from available cash balances. As of June 30, 2006, $350 million of the 6.5% Senior Notes remained outstanding.

Fiscal Year 2005 Senior Notes

In November 2004, the Company issued an aggregate of $1 billion of unsecured Senior Notes (2005 Senior Notes) in a transaction pursuant to Rule 144A. The Company issued $500 million of 4.75%, 5-year notes due December 2009 and $500 million of 5.625%, 10-year notes due December 2014. The Company has the option to redeem the 2005 Senior Notes at any time, at redemption prices equal to the greater of (i) 100% of the aggregate principal amount of the notes of such series being redeemed and (ii) the present value of the principal and interest payable over the life of the 2005 Senior Notes, discounted at a rate equal to 15 basis points and 20 basis points for the 5-year notes and 10-year notes, respectively, over a comparable U.S. Treasury bond yield. The maturity of the 2005 Senior Notes may be accelerated by the holders upon certain events of default, including failure to make payments when due and failure to comply with covenants in the 2005 Senior Notes. The 5-year notes were issued at a price equal to 99.861% of the principal amount and the 10-year notes at a price equal to 99.505% of the principal amount for resale under Rule 144A and Regulation S. The Company also agreed for the benefit of the holders to register the 2005 Senior Notes under the Securities Act of 1933 pursuant to a registered exchange offer so that the 2005 Senior Notes may be sold in the public market. Because the Company did not meet certain deadlines for completion of the exchange offer, the interest rate on the 2005 Senior Notes increased by 25 basis points as of September 27, 2005 and increased by an additional 25 basis points as of December 26, 2005 since the delay was not cured prior to that date. Upon the earlier to occur of (i) the completion of the exchange offer and (ii) November 18, 2006 (when the 2005 Senior Notes may be sold without restriction under Rule 144), such additional interest on the 2005 Senior Notes will no longer be payable. The Company expects to register the 2005 Senior Notes in the second quarter of fiscal year 2007. The Company used the net proceeds from this issuance to repay debt as described above.

1.625% Convertible Senior Notes

In fiscal year 2003, the Company issued $460 million of unsecured 1.625% Convertible Senior Notes (1.625% Notes), due December 15, 2009, in a transaction pursuant to Rule 144A. The 1.625% Notes are senior unsecured indebtedness and rank equally with all existing senior unsecured indebtedness. Concurrent with the issuance of the 1.625% Notes, we entered into call spread repurchase option transactions to partially mitigate potential dilution from conversion of the 1.625% Notes. For further information, refer to our Annual Report on Form 10-K for the fiscal year ended March 31, 2006, Note 6, “Debt”.

3% Concord Convertible Notes

In connection with our acquisition of Concord in June 2005, we assumed $86 million in 3% convertible senior notes due 2023. In accordance with the notes’ terms, we redeemed (for cash) the notes in full in July 2005.

International Line of Credit

An unsecured and uncommitted multi-currency line of credit is available to meet short-term working capital needs for our subsidiaries operating outside the United States. The line of credit is available on an offering basis, meaning that transactions under the line of credit will be on such terms and conditions, including interest rate, maturity, representations, covenants and events of default, as mutually agreed between our subsidiaries and the local bank at the time of each specific transaction. As of June 30, 2006,

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this line totaled approximately $5 million and approximately $3 million was pledged in support of bank guarantees. Amounts drawn under these facilities as of June 30, 2006 were minimal.

In addition to the above facility, our foreign subsidiaries use guarantees issued by commercial banks to guarantee performance on certain contracts. At June 30, 2006 the aggregate amount of significant guarantees outstanding was approximately $5 million, none of which had been drawn down by third parties.

Effect of Exchange Rate Changes

There was a $36 million favorable impact to our cash flows in the quarter ended June 30, 2006 predominantly due to the strengthening of the British pound and the euro against the dollar. This is compared to a negative impact of approximately $62 million in the comparable prior year period, which was predominantly due to the weakening of the British pound and the euro against the US dollar.

Other Matters

In June 2006, our senior unsecured notes ratings were rated at Ba1, BBB-, and BBB- by Moody’s, S&P and Fitch, respectively, all with a negative outlook. Following the announcement of the delayed filing of our Form 10-K beyond its extended due date of June 29, 2006 and the announcement of our $2 billion stock buy back program, S&P and Fitch downgraded our ratings to BB and BB+, respectively. As of July 2006, Moody’s placed us under review for possible downgrade, the outlook from Fitch is negative and S&P has placed our notes on CreditWatch with negative implications. On August 2, 2006, Moody’s confirmed our Ba1 rating with negative outlook. Peak borrowings under all debt facilities during the first quarter of fiscal year 2007 totaled approximately $1.81 billion, with a weighted average interest rate of 5.1%.

Capital resource requirements as of June 30, 2006 consisted of lease obligations for office space, equipment, mortgage and loan obligations, our ERP implementation, and amounts due as a result of product and company acquisitions.

It is expected that existing cash, cash equivalents, marketable securities, the availability of borrowings under existing and renewable credit lines and in the capital markets, and cash expected to be provided from operations will be sufficient to meet ongoing cash requirements.

We expect to use existing cash balances and future cash generated from operations to fund financing activities such as the repayment of our debt balances as they mature as well as the repurchase of shares of common stock and the payment of dividends as approved by our Board of Directors. Cash generated will also be used for investing activities such as future acquisitions as well as additional capital spending, including our continued investment in our ERP implementation.

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OUTLOOK

This outlook for fiscal year 2007 contains certain forward looking statements and information relating to us that are based on the beliefs and assumptions made by management, as well as information currently available to management. Should business conditions change or should our assumptions prove incorrect, actual results may vary materially from those described below. We do not intend to update these forward looking statements.

This outlook is also premised on the assumption that there will be limited-to-modest improvements in the current economic and IT environments. We also believe that customers will continue to be cautious with their technology purchases.

Our outlook for fiscal year 2007 is to generate revenue of approximately $3.9 billion, earnings per share of approximately $0.44 as calculated on a GAAP basis, and cash generated from operations of $1.3 billion.

This outlook assumes:

•We will incur approximately $105 million (pre-tax) in non-cash stock-based compensation charges in connection with SFAS No. 123(R) (we incurred approximately $99 million of total stock-based compensation charges in fiscal year 2006);

•Management will take appropriate actions to reduce commission costs for fiscal year 2007 as compared to fiscal year 2006;

•Cash generated from operations will be negatively impacted by an additional $200 million in tax payments, higher disbursements due to a decline in the days payables cycle which primarily occurred in the first quarter of fiscal year 2007, and lower collections from contracts with accelerated payment terms; and

•Our effective tax rate should be approximately 34% in fiscal year 2007.

This outlook has not been adjusted to reflect the $2 billion common stock repurchase plan for fiscal year 2007 or the impact of any related financing activities. This outlook also assumes that the Company will take steps to achieve certain cost savings, including the recently announced fiscal year 2007 restructuring plan. These steps will have related non-operating costs that will have a negative effect on GAAP earnings per share and cash generated from operations, which have not been reflected in the above outlook as the timing of such costs and related payments have not yet been determined.

CRITICAL ACCOUNTING POLICIES AND BUSINESS PRACTICES

A detailed discussion of our critical accounting policies and the use of estimates in applying those policies is included in our Form 10-K for the year ended March 31, 2006. In many cases, a high degree of judgment is required, either in the application and interpretation of accounting literature or in the development of estimates that impact our financial statements. These estimates may change in the future if underlying assumptions or factors change. The following is a summary of the critical accounting policies for which estimates were updated as of June 30, 2006.

Revenue Recognition

We generate revenue from the following primary sources: (1) licensing software products; (2) providing customer technical support (referred to as maintenance); and (3) providing professional services, such as consulting and education.

We recognize revenue pursuant to the requirements of Statement of Position 97-2 “Software Revenue Recognition” (SOP 97-2), issued by the American Institute of Certified Public Accountants, as amended by SOP 98-9 “Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.” In accordance with SOP 97-2, we begin to recognize revenue from licensing and supporting our software products when all of the following criteria are met: (1) we have evidence of an arrangement with a customer; (2) we deliver the products; (3) license agreement terms are deemed fixed or determinable and free of contingencies or uncertainties that may alter the agreement such that it may not be complete and final; and (4) collection is probable.

Our software licenses generally do not include acceptance provisions. An acceptance provision allows a customer to test the software for a defined period of time before committing to license the software. If a

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license agreement includes an acceptance provision, we do not record deferred subscription value or recognize revenue until the earlier of the receipt of a written customer acceptance or, if not notified by the customer to cancel the license agreement, the expiration of the acceptance period.

Under our business model, software license agreements include flexible contractual provisions that, among other things, allow customers to receive unspecified future software upgrades for no additional fee. These agreements combine the right to use the software product with maintenance for the term of the agreement. Under these agreements, we recognize revenue ratably over the term of the license agreement beginning upon completion of the four SOP 97-2 recognition criteria noted above. For license agreements signed prior to October 2000 (the prior business model), once all four of the above noted revenue recognition criteria were met, software license fees were recognized as revenue up-front, and the maintenance fees were deferred and subsequently recognized as revenue over the term of the license.

Maintenance revenue is derived from two primary sources: (1) combined license and maintenance agreements recorded under the prior business model; and (2) stand-alone maintenance agreements.

Under the prior business model, maintenance and license fees were generally combined into a single license agreement. The maintenance portion was deferred and amortized into revenue over the initial license agreement term. Some of these license agreements have not reached the end of their initial terms and, therefore, continue to amortize. This amortization is recorded on the “Maintenance” line item on the Consolidated Condensed Statements of Operations. The deferred maintenance portion, which was optional to the customer, was determined using its fair value based on annual, fixed maintenance renewal rates stated in the agreement. For license agreements entered into under our current business model, maintenance and license fees continue to be combined; however, the maintenance is inclusive for the entire term. We report such combined fees on the “Subscription revenue” line item on the Consolidated Condensed Statements of Operations.

We also record stand-alone maintenance revenue earned from customers who elect optional maintenance. Revenue from such renewals is recognized as maintenance revenue over the term of the renewal agreement.

The “Deferred maintenance revenue” line item on our Consolidated Condensed Balance Sheets principally represents payments received in advance of maintenance services rendered.

Revenue from professional service arrangements is recognized pursuant to the provisions of SOP 97-2, which in most cases is as the services are performed. Revenues from professional services that are sold as part of a software transaction are deferred and recognized on a ratable basis over the life of the related software transaction. If it is not probable that a project will be completed or the payment will be received, revenue is deferred until the uncertainty is removed.

Revenue from sales to distributors, resellers, and VARs is recognized when all four of the SOP 97-2 revenue recognition criteria noted above are met and when these entities sell the software product to their customers. This is commonly referred to as the sell-through method. Beginning July 1, 2004, sales of our products made by distributors, resellers and VARs to their customers incorporate the right for the end-users to receive certain upgraded software products at no additional fee. Accordingly, revenue from those contracts is recognized on a ratable basis.

We have an established business practice of offering installment payment options to customers and have a history of successfully collecting substantially all amounts due under such agreements. We assess collectibility based on a number of factors, including past transaction history with the customer and the creditworthiness of the customer. If, in our judgment, collection of a fee is not probable, we will not recognize revenue until the uncertainty is removed through the receipt of cash payment.

Our standard licensing agreements include a product warranty provision for all products. Such warranties are accounted for in accordance with SFAS No. 5, “Accounting for Contingencies.” The likelihood that we would be required to make refunds to customers under such provisions is considered remote.

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Under the terms of substantially all of our license agreements, we have agreed to indemnify customers for costs and damages arising from claims against such customers based on, among other things, allegations that our software products infringe the intellectual property rights of a third party. In most cases, in the event of an infringement claim, we retain the right to (i) procure for the customer the right to continue using the software product; (ii) replace or modify the software product to eliminate the infringement while providing substantially equivalent functionality; or (iii) if neither (i) nor (ii) can be reasonably achieved, we may terminate the license agreement and refund to the customer a pro-rata portion of the fees paid. Such indemnification provisions are accounted for in accordance with SFAS No. 5. The likelihood that we would be required to make refunds to customers under such provisions is considered remote. In most cases and where legally enforceable, the indemnification is limited to the amount paid by the customer.

Accounts Receivable

The allowance for doubtful accounts is a valuation account used to reserve for the potential impairment of accounts receivable on the balance sheet. In developing the estimate for the allowance for doubtful accounts, we rely on several factors, including:

•Historical information, such as general collection history of multi-year software agreements;

•Current customer information/events, such as extended delinquency, requests for restructuring, and filing for bankruptcy;

•Results of analyzing historical and current data; and

•The overall macroeconomic environment.

The allowance is comprised of two components: (a) specifically identified receivables that are reviewed for impairment when, based on current information, we do not expect to collect the full amount due from the customer; and (b) an allowance for losses inherent in the remaining receivable portfolio based on the analysis of the specifically reviewed receivables.

We expect the allowance for doubtful accounts to continue to decline as net installment accounts receivable under the prior business model are billed and collected. Under our business model, amounts due from customers are offset by deferred subscription value (unearned revenue) related to these amounts, resulting in little or no carrying value on the balance sheet. Therefore, a smaller allowance for doubtful accounts is required.

Sales Commissions

We accrue sales commissions based on, among other things, estimates of how our sales personnel will perform against specified annual sales quotas. These estimates involve assumptions regarding the Company’s projected new product sales and billings. All of these assumptions reflect our best estimates, but these items involve uncertainties, and as a result, if other assumptions had been used in the period, sales commission expense could have been impacted for that period. Under our current sales compensation model, during periods of high growth and sales of new products relative to revenue in that period, the amount of sales commission expense attributable to the license agreement would be recognized fully in the year and could negatively impact income and earnings per share in that period, particularly in the second half of the fiscal year when new contract values are traditionally higher than in the first half.

The 2007 sales commissions plan has been modified and will continue to be evaluated during the current fiscal year. While revised, the plan is still subject to risks similar to those identified in our Annual Report on Form 10-K for fiscal year 2006 including the risk that, as in fiscal year 2006, commissions expense could be higher than anticipated. As set forth below in Item 4, at the end of fiscal year 2006, we had a material weakness in our internal control over financial reporting due to ineffective policies and procedures relating to controls over the accounting for sales commissions. Specifically, we did not effectively estimate, record and monitor our sales commissions and related accruals. While we have started the process of remediating this material weakness, the material weakness in the Company’s internal control over financial reporting related to accounting for commissions persists and has not been fully remediated. Refer to Item 4, “Controls and Procedures”, for additional information on our remediation plans.

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Income Taxes

When we prepare our Consolidated Condensed financial statements, we estimate our income taxes in each of the jurisdictions in which we operate. We record this amount as a provision for taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” This process requires us to estimate our actual current tax liability in each jurisdiction; estimate differences resulting from differing treatment of items for financial statement purposes versus tax return purposes (known as “temporary differences”), which result in deferred tax assets and liabilities; and assess the likelihood that our deferred tax assets and net operating losses will be recovered from future taxable income. If we believe that recovery is not likely, we establish a valuation allowance. We have recognized as a deferred tax asset a portion of the tax benefits connected with losses related to operations. As of June 30, 2006, our gross deferred tax assets, net of a valuation allowance, totaled $625 million. Realization of these deferred tax assets assumes that we will be able to generate sufficient future taxable income so that these assets will be realized. The factors that we consider in assessing the likelihood of realization include the forecast of future taxable income and available tax planning strategies that could be implemented to realize the deferred tax assets.

Deferred tax assets result from acquisition expenses, such as duplicate facility costs, employee severance and other costs that are not deductible until paid, net operating losses (NOLs) and temporary differences between the taxable cash payments received from customers and the ratable recognition of revenue in accordance with GAAP. The NOLs expire between 2007 and 2026. Additionally, approximately $57 million of the valuation allowance at both June 30, 2006 and March 31, 2006, is attributable to acquired NOLs which are subject to annual limitations under IRS Code Section 382. Future results may vary from these estimates.

We believe that adequate accruals have been made for contingencies related to income taxes, and have classified these in current and long-term liabilities based upon our estimate of when the ultimate resolution of the contingent liability will occur. The ultimate resolution of the contingent liabilities will take place upon the earlier of (i) the settlement date with the applicable taxing authorities or (ii) the date when the tax authorities are statutorily prohibited from adjusting the Company’s tax computations. Any difference between the amount accrued and the ultimate settlement amount if any, will be released to income or recorded as a reduction of goodwill depending upon whether the liability was initially recorded in purchase accounting.

Goodwill, Capitalized Software Products, and Other Intangible Assets

SFAS No. 142, “Goodwill and Other Intangible Assets,” requires an impairment-only approach to accounting for goodwill. Absent any prior indicators of impairment, we perform an annual impairment analysis during the fourth quarter of our fiscal year. We performed our annual assessment for fiscal year 2006 and concluded that there were no impairments to record.

The SFAS No. 142 goodwill impairment model is a two-step process. The first step is used to identify potential impairment by comparing the fair value of a reporting unit with its net book value (or carrying amount), including goodwill. If the fair value exceeds the carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.

Determining the fair value of a reporting unit under the first step of the goodwill impairment test, and determining the fair value of individual assets and liabilities of a reporting unit (including unrecognized

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intangible assets) under the second step of the goodwill impairment test, is judgmental in nature and often involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such charge. Estimates of fair value are primarily determined using discounted cash flow and are based on our best estimate of future revenue and operating costs and general market conditions. These estimates are subject to review and approval by senior management. This approach uses significant assumptions, including projected future cash flow, the discount rate reflecting the risk inherent in future cash flow, and a terminal growth rate.

The carrying value of capitalized software products, both purchased software and internally developed software, and other intangible assets, are reviewed on a regular basis for the existence of internal and external facts or circumstances that may suggest impairment. The facts and circumstances considered include an assessment of the net realizable value for capitalized software products and the future recoverability of cost for other intangible assets as of the balance sheet date. It is not possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude thereof.

Accounting for Business Combinations

The allocation of purchase price for acquisitions requires extensive use of accounting estimates and judgements to allocate the purchase price to the identifiable tangible and intangible assets acquired, including in-process research and development, and liabilities assumed based on their respective fair values.

Product Development and Enhancements

We account for product development and enhancements in accordance with SFAS No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed .” SFAS No. 86 specifies that costs incurred internally in researching and developing a computer software product should be charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established and assumptions are used that reflect our best estimates. If other assumptions had been used in the current period to estimate technological feasibility, the reported product development and enhancement expense could have been impacted. Annual amortization of capitalized software costs is the greater of the amount computed using the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the software product, generally estimated to be five years from the date the product reached technological feasibility. The Company amortized capitalized software costs using the straight-line method in fiscal years 2006, and through the first quarter of fiscal year 2007, as anticipated future revenue is projected to increase for several years considering the Company is continuously integrating current software technology into new software products.

Accounting for Share-Based Compensation

We currently maintain share-based compensation plans. We use the Black-Scholes option-pricing model to compute the estimated fair value of certain stock-based awards. The Black-Scholes model includes assumptions regarding dividend yields, expected volatility, expected lives, and risk-free interest rates. These assumptions reflect our best estimates, but these items involve uncertainties based on market and other conditions outside of our control. As a result, if other assumptions had been used, stock-based compensation expense could have been materially impacted. Furthermore, if different assumptions are used in future periods, stock-based compensation expense could be materially impacted in future years.

As described in Note D, “Accounting for Share-Based Compensation,” in the Notes to the Consolidated Condensed Financial Statements, performance share units (PSUs) are awards under the long-term incentive plan for senior executives where the number of shares or restricted shares as applicable, ultimately received by the employee depends on Company performance measured against specified targets and will be determined after a three-year or one-year period as applicable. The fair value of each award is estimated on the date that the performance targets

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are established based on the fair value of the Company’s stock and the Company’s estimate of the level of achievement of its performance targets. The Company is required to recalculate the fair value of issued PSUs each reporting period until they are granted. The adjustment is based on the fair value of the Company’s stock on the reporting period date. Each quarter, the Company compares the actual performance the Company expects to achieve with the performance targets.

Legal Contingencies

We are currently involved in various legal proceedings and claims. Periodically, we review the status of each significant matter and assess our potential financial exposure. If the potential loss from any legal proceeding or claim is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgment is required in both the determination of probability of a loss and the determination as to whether an exposure is reasonably estimable. Due to the uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to our pending litigation and claims, and may revise our estimates. Such revisions could have a material impact on our results of operations and financial condition. Refer to Note J, “Commitments and Contingencies”, in the Notes to the Consolidated Condensed Financial Statements for a description of our material legal proceedings.

New Accounting Standards

In July 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with FASB Statement No. 109,  Accounting for Income Taxes . FIN 48 provides guidance relative to the recognition, derecognition and measurement of tax positions for financial statement purposes. The standard also requires expanded disclosures. FIN 48 is effective for fiscal years beginning after December 15, 2006. We are currently evaluating the impact of this standard on our Consolidated Condensed Financial Statements.

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Item 3:

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Interest Rate Risk

Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio, debt, and installment accounts receivable. We have a prescribed methodology whereby we invest our excess cash in liquid investments that are comprised of money market funds and debt instruments of government agencies and high-quality corporate issuers (Standard & Poor’s single “A” rating and higher). To mitigate risk, many of the securities have a maturity date within one year, and holdings of any one issuer, excluding the U.S. government, do not exceed 10% of the portfolio. Periodically, the portfolio is reviewed and adjusted if the credit rating of a security held has deteriorated.

As of June 30, 2006, our outstanding debt approximated $1.81 billion, most of which was in fixed rate obligations. If market rates were to decline, we could be required to make payments on the fixed rate debt that would exceed those based on current market rates. Each 25 basis point decrease in interest rates would have an associated annual opportunity cost of approximately $5 million. Each 25 basis point increase or decrease in interest rates would have no material annual effect on variable rate debt interest based on the balances of such debt as of June 30, 2006.

As of June 30, 2006, we did not utilize derivative financial instruments to mitigate the above mentioned interest rate risks.

We offer financing arrangements with installment payment terms in connection with our software license agreements. The aggregate amounts due from customers include an imputed interest element, which can vary with the interest rate environment. Each 25 basis point increase in interest rates would have an associated annual opportunity cost of approximately $9 million.

Foreign Currency Exchange Risk

We conduct business on a worldwide basis through subsidiaries in 46 countries and, as such, a portion of our revenues, earnings, and net investments in foreign affiliates are exposed to changes in foreign exchange rates. We seek to manage our foreign exchange risk in part through operational means, including managing expected local currency revenues in relation to local currency costs and local currency assets in relation to local currency liabilities. In October 2005, the Board of Directors adopted our Risk Management Policy and Procedures, which authorizes us to manage, based on management’s assessment, our risks/exposures to foreign currency exchange rates through the use of derivative financial instruments (e.g., forward contracts, options, swaps) or other means. We have not historically used, and do not anticipate using, derivative financial instruments for speculative purposes.

Derivatives are accounted for in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and the Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”). For the first quarter ended June 30, 2006, we entered into derivative contracts with a total notional value of 30 million euros. Derivatives with a notional value of 30 million euros were entered into with the intent of mitigating a certain portion of our euro operating exposure and are part of the Company’s on-going risk management program. Hedge accounting under SFAS No. 133 was not applied to any of the derivatives entered into during the first quarter of the fiscal year ended March 31, 2007. As of June 30, 2006, there were no derivative contracts outstanding. In July 2006, the Company entered into similar derivative contracts as those entered during the quarter ended June 30, 2006 relating to the Company’s operating exposures.

Equity Price Risk

As of June 30, 2006, we had $22 million in investments in marketable equity securities of publicly traded companies. These securities were considered available-for-sale with any unrealized gains or temporary losses deferred as a component of stockholders’ equity.

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Item 4: CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and acting Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s management, with participation of the Company’s Chief Executive Officer and acting Chief Financial Officer, has conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q.

As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006, the Company determined that, as of the end of the fiscal year 2006, there were material weaknesses affecting its internal control over financial reporting and, as a result of those material weaknesses, the Company’s disclosure controls and procedures were not effective. As described below, the Company is in the process of remediating those material weaknesses. Consequently, based on the evaluation described above, the Company’s management, including its Chief Executive Officer and acting Chief Financial Officer, have concluded that, as of the end of the first quarter of fiscal year 2007, the Company’s disclosure controls and procedures were not effective.

Changes in internal control over financial reporting

During the first quarter of fiscal year 2007, the Company was engaged in the assessment and evaluation of its internal control over financial reporting for fiscal year 2006 as described below. The Company has made changes to its internal control over financial reporting during the first quarter of fiscal year 2007 that address these material weaknesses as described below.

Changes under the DPA

As previously reported, and as described more fully in Note J, “Commitments and Contingencies” of the Condensed Consolidated Financial Statements of this Form 10-Q, in September 2004 the Company reached agreements with the USAO and SEC by entering into the DPA with the USAO and by consenting to the SEC’s filing of a Final Consent Judgment (Consent Judgment) in the United States District Court for the Eastern District of New York. The DPA requires the Company to, among other things, undertake certain reforms that will affect its internal control over financial reporting. These include implementing a worldwide financial and enterprise resource planning (“ERP”) information technology system to improve internal controls, reorganizing and enhancing the Company’s Finance and Internal Audit Departments, and establishing new records management policies and procedures.

The Company believes that these and other reforms, such as procedures to assure proper recognition of revenue, should enhance its internal control over financial reporting. For more information regarding the DPA, refer to the Company’s Current Report on Form 8-K filed with the SEC on September 22, 2004 and the exhibits thereto, including the DPA. For more information regarding the Company’s compliance with the DPA and the Consent Judgment, refer to the information under the heading “Status of the Company’s Compliance with the Deferred Prosecution Agreement and Final Consent Judgment” in the Company’s definitive proxy materials filed on July 26, 2005 and Note J, “Commitments and Contingencies — The Government Investigation”, in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Changes to remediate material weaknesses

As previously reported in its Annual Report on Form 10-K for fiscal year 2006, the Company determined that, as of the end of fiscal year 2006, there were material weaknesses in its internal control over financial reporting relating to (1) an ineffective control environment due to a lack of effective communication policies and procedures, (2) ineffective policies and procedures relating to controls over the accounting for sales commissions, (3) ineffective policies and procedures relating to the identification, analysis and documentation of non-routine tax matters, (4) ineffective policies and procedures relating to the accounting for and disclosure of stock-based compensation relating to stock options and (5) ineffective policies and procedures designated to identify, quantify and record the impact on subscription revenue when license agreements have been cancelled and renewed more than once prior to the

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expiration date of each successive license agreement. These material weaknesses in our internal control over financial reporting continue to persist through the current fiscal quarter with the exception of item (iv) above which was remediated during the Company’s first quarter of fiscal year 2007. Accordingly, we plan to implement the procedures and steps noted below to enhance our internal control over financial reporting and our disclosure controls and procedures so as to remediate these weaknesses:

(i) Specific remediation actions planned for fiscal year 2007 with respect to our material weakness in internal control over financial reporting related to an ineffective control environment due to a lack of effective communication policies and procedures include the following:

•Personnel and organizational changes:

•Appointment of a new Chief Operating Officer and the appointment of a new Chief Financial Officer expected to be effective on or about August 15, 2006;

•Realignment of reporting of the Chief Financial Officer from Chief Operating Officer to the Chief Executive Officer;

•Reorganization of the Sales Function including:

•Elimination of the position Executive Vice President Worldwide Sales, and establishment of direct reporting of the field sales organization to the Chief Operating Officer;

•Appointment of a Senior Vice President Sales Operations with direct reporting to the Chief Operating Officer;

•Implementation of recurring meetings with representation from key departments including legal, finance, operations and human resources to address operating and financial performance, as well as the identification, tracking and communication of information of potential significance to financial reporting and disclosure issues; and

•Provision of focused training relating to ethics, the Company’s Code of Conduct and its core values.

(ii) Specific remediation actions planned for fiscal year 2007 with respect to our material weakness in internal control over financial reporting related to accounting for sales commissions include the following:

•Review of commissions accounting procedures by the Internal Audit Department;

•Appointment of a quality review team to assess the adequacy and efficacy of the business processes, IT Systems and financial oversight for the administration of sales commissions;

•Formalization of policies and procedures including communication and reporting responsibilities among the Company’s sales, human resources and finance functions to ensure that the administration, payments of and accounting for commissions expense are coordinated;

•Reconciliation of commission expense accruals to actual commission payments on a quarterly basis; and

•Monitoring of progress on remediation and to provide governance, including organizational alignment, by a cross functional review committee.

(iii) Specific remediation actions planned for fiscal year 2007 with respect to our material weakness in internal control over financial reporting related to the identification, analysis and documentation of non-routine tax matters include the following:

•Review of the tax department’s policies and procedures including its use of external advisors;

•Establishment of new documentation and analysis requirements for non-routine tax matters to ensure among other things, that accounting conclusions involving such matters are thoroughly documented and identify the critical factors that support the basis for such conclusions; and

•Formalization of communication and review of non-routine tax matters between the tax function and senior finance management.

(iv) With respect to our material weakness in internal control over financial reporting related to the accounting for and disclosure of stock-based compensation relating to stock options issued prior to fiscal year 2002 included the development and implementation of policies and procedures beginning in fiscal year 2002 which have resulted in the timely communication of stock option grants to employees. During the first quarter of fiscal year 2007, the Company implemented procedures that resulted in the proper recognition and

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disclosure of stock-based compensation expense for stock options issued prior to fiscal year 2002. Accordingly, no further remediation is deemed necessary with respect to this material weakness.

(v) Specific remediation actions planned for fiscal year 2007 with respect to our material weakness in internal control over financial reporting related to accounting for subscription revenue when license agreements have been cancelled and renewed more than once prior to the expiration date of each successive license agreement include the following:

•Formalization of policies and procedures, as well as provision of training, on the identification, quantification and recording of the impact on subscription revenue of such license agreements.

With the exception of item (iv) above, the remediation of the material weaknesses described above is ongoing and the Company intends to continue implementing the steps listed above under the belief that our efforts, when fully implemented, will be effective in remediating such material weaknesses. Moreover, management will continue to monitor the results of the remediation activities and test the new controls as part of our review of our internal control over financial reporting for fiscal year 2007. We expect that the material weaknesses referenced above will be fully remediated by the end of fiscal year 2007.

Other changes in internal controls over financial reporting

In the first quarter of fiscal year 2007, the Company began migrating certain financial and sales processing systems to SAP, an enterprise resource planning (“ERP”) system, at its North American operations. This change in information system platform for the Company’s financial and operational systems is part of its on-going project to implement SAP at all of the Company’s facilities worldwide, which is expected to be completed over the next few years. In connection with the SAP implementation, the Company is updating its internal control over financial reporting, as necessary, to accommodate modifications to its business and accounting procedures. The Company believes it is taking the necessary precautions to ensure that the transition to the new ERP system will not have a negative impact on its internal control environment.

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PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Refer to Note J, “Commitments and Contingencies”, in the Notes to the Consolidated Condensed Financial Statements for information regarding legal proceedings.

Item 1a. RISK FACTORS

Current and potential stockholders should consider carefully the risks factors described in more detail in our Annual Report on Form 10-K for the fiscal year ended March 31, 2006. We believe that as of June 30, 2006, there has been no material change to this information. Any of these factors, or others, many of which are beyond our control, could negatively affect our revenue, profitability and cash flow.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth, for the months indicated, our purchases of common stock in the first quarter of fiscal year 2007:

				Total Number	Approximate
				of Shares	Dollar Value of
				Purchased as	Shares that
				Part of Publicly	May Yet Be
	Total Number	Average		Announced	Purchased Under
	of Shares	Price Paid		Plans	the Plans
Period	Purchased	per Share		or Programs	or Programs
	(in thousands, except average price paid per share)
April 1, 2006 — April 30, 2006	1,750	$	26.47	1,750	$	553,641
May 1, 2006 — May 31, 2006	3,105	23.65		3,105	$	480,142
June 1, 2006 — June 30, 2006	1,717	21.41		1,717	$	443,347
Total	6,572			6,572

Our corporate buyback program was originally announced in August 1990 (the 1990 Program) and has been subsequently amended by the Board of Directors from time to time to increase the number of shares of our common stock we have been authorized to repurchase. In April 2005, the Board of Directors authorized the repurchase of up to $400 million in shares of Company stock during fiscal year 2006 (the Fiscal 2006 Program), subject to the share limits imposed under the 1990 Program. Repurchases during fiscal year 2006 through October 24, 2005 were made under the Fiscal 2006 Program. Effective October 25, 2005, the Board of Directors amended the Fiscal 2006 Program to authorize us to spend up to $600 million to repurchase shares of Company stock during fiscal year 2006, representing a $200 million increase in the amount previously authorized for expenditure in fiscal year 2006 for stock repurchases (the amended Fiscal 2006 Program). As part of the approval of the amended Fiscal 2006 Program, the Board of Directors terminated the 1990 Program and resolved that the Board of Directors would henceforth express its authorization to management to repurchase shares of Company stock only in dollars, and not in shares, as had been the case under the 1990 Program.

In March 2006, we announced that our Board of Directors had authorized a $600 million common stock repurchase plan for fiscal year 2007, beginning April 1, 2006. The plan called for quarterly common stock buybacks of $150 million, which were to be made in the open market or in private transactions.

In June 2006, our Board of Directors authorized a $2 billion common stock repurchase plan for fiscal year 2007 which will replace the prior $600 million common stock repurchase plan. As of June 30, 2006, approximately $443 million were available to be repurchased under our buyback program. The program has no expiration date.

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Item 6. EXHIBITS

Regulation S-K
Exhibit Number
10.1	Amended and Restated CA, Inc. Executive Deferred Compensation Plan, effective April 1, 2006.	Previously filed as Exhibit 10.51 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006, and incorporated herein by reference.
10.2	Form of Deferral Election.	Previously filed as Exhibit 10.52 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006, and incorporated herein by reference.
10.3	Agreement, effective as of April 1, 2006, between the Company and Jeff Clarke.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 4, 2006, and incorporated herein by reference.
10.4	Amended and restated employment agreement, dated June 27, 2006, between the Company and Mike Christenson.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 26, 2006, and incorporated herein by reference.
10.5	Employment agreement, dated June 28, 2006, between the Company and James Bryant.	Previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 26, 2006, and incorporated herein by reference.
10.6	Form of RSU Award Certificate.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 2, 2006, and incorporated herein by reference.
10.7	Form of RSU Award Certificate (Employment Agreement).	Previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 2, 2006, and incorporated herein by reference.
10.8	Form of Restricted Stock Award Certificate.	Previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K dated June 2, 2006, and incorporated herein by reference.
10.9	Form of Restricted Stock Award Certificate (Employment Agreement).	Previously filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K dated June 2, 2006, and incorporated herein by reference.
10.10	Form of Non-Qualified Stock Option Award Certificate.	Previously filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K dated June 2, 2006, and incorporated herein by reference.
10.11	Form of Non-Qualified Stock Option Award Certificate (Employment Agreement).	Previously filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K dated June 2, 2006, and incorporated herein by reference.
10.12	Form of Incentive Stock Option Award Certificate.	Previously filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K dated June 2, 2006, and incorporated

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Regulation S-K
Exhibit Number
		herein by reference.
10.13	Form of Incentive Stock Option Award Certificate (Employment Agreement).	Previously filed as Exhibit 10.8 to the Company’s Current Report on Form 8-K dated June 2, 2006, and incorporated herein by reference.
10.14	CA, Inc. Change in Control Severance Policy.	Previously filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2006, and incorporated herein by reference.
10.15	Separation Agreement and General Claims Release, dated as of July 24, 2006, between CA, Inc. and Gregory Corgan.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 24, 2006, and incorporated herein by reference.
10.16	Employment Agreement, dated as of July 31, 2006, between CA, Inc. and Kenneth V. Handal.	Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 27, 2006, and incorporated herein by reference.
10.16	Employment Agreement, dated as of August 1, 2006, between CA, Inc. and Nancy Cooper.	Previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated July 27, 2006, and incorporated herein by reference.
15	Accountants’ acknowledgement letter.	Filed herewith.
31.1	Certification of the CEO pursuant to §302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
31.2	Certification of the CFO pursuant to §302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
32	Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CA, INC.
	By:	/s/ John A. Swainson
		John A. Swainson
		President and Chief Executive Officer
	By:	/s/ Robert G. Cirabisi
		Robert G. Cirabisi
		Acting Chief Financial Officer, Senior Vice
		President, Corporate Controller, and Principal
		Accounting Officer
Dated: August 14, 2006

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