10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                     

Commission File Number: 001-16393

BMC Software, Inc.

(Exact name of registrant as specified in its charter)

Delaware	74-2126120
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
2101 CityWest Boulevard Houston, Texas	77042-2827
(Address of principal executive offices)	(Zip Code)

(713) 918-8800

(Registrant’s telephone number, including area code)

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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

As of January 24, 2013, there were 142,889,000 outstanding shares of Common Stock, par value $.01, of the registrant.

BMC SOFTWARE, INC.

QUARTER ENDED DECEMBER 31, 2012

INDEX

		PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets at December 31, 2012 (Unaudited) and March 31, 2012		3
	Condensed Consolidated Statements of Comprehensive Income for the quarters and nine months ended December 31, 2012 and 2011 (Unaudited)		4
	Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2012 and 2011 (Unaudited)		5
	Notes to Condensed Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		37
Item 4.	Controls and Procedures		38
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		39
Item 1A.	Risk Factors		39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 6.	Exhibits		40
	Signatures		41

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BMC SOFTWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except par value data)

	December 31,			March 31,
	2012			2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,057.9		$	1,496.9
Short-term investments		123.6			86.1
Trade accounts receivable, net		265.8			296.7
Trade finance receivables, net		69.5			108.0
Deferred tax assets		79.8			71.0
Other current assets		116.9			122.2
Total current assets		1,713.5			2,180.9
Property and equipment, net		89.6			87.8
Software development costs, net		268.0			244.7
Long-term investments		71.6			52.6
Long-term trade finance receivables, net		42.9			80.1
Intangible assets, net		209.3			257.5
Goodwill		1,720.6			1,720.6
Other long-term assets		213.3			240.2
Total assets	$	4,328.8		$	4,864.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	38.1		$	31.5
Finance payables		10.7			1.2
Accrued liabilities		270.4			321.4
Deferred revenue		979.2			1,059.5
Total current liabilities		1,298.4			1,413.6
Long-term deferred revenue		796.9			934.4
Long-term borrowings		1,308.6			821.6
Other long-term liabilities		244.8			249.0
Total liabilities		3,648.7			3,418.6
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $.01 par value, 1.0 shares authorized, none issued and outstanding		—			—
Common stock, $.01 par value, 600.0 shares authorized, 249.1 shares issued		2.5			2.5
Additional paid-in capital		1,029.5			1,179.5
Retained earnings		3,503.4			3,245.3
Accumulated other comprehensive income		23.3			31.9
		4,558.7			4,459.2
Treasury stock, at cost (106.4 and 87.4 shares)		(3,878.6	)		(3,013.4	)
Total stockholders’ equity		680.1			1,445.8
Total liabilities and stockholders’ equity	$	4,328.8		$	4,864.4

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

BMC SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions, except per share data)

(Unaudited)

	Quarter Ended						Nine Months Ended
	December 31,						December 31,
	2012			2011			2012			2011
Revenue:
License	$	232.3		$	225.0		$	613.1		$	644.2
Maintenance		288.7			272.3			853.0			807.4
Professional services		59.2			50.9			166.7			155.7
Total revenue		580.2			548.2			1,632.8			1,607.3
Operating expenses:
Cost of license revenue		41.1			38.6			120.8			116.2
Cost of maintenance revenue		51.3			46.2			155.1			139.5
Cost of professional services revenue		56.3			52.8			168.5			153.4
Selling and marketing expenses		175.8			154.1			503.7			452.3
Research and development expenses		41.9			38.5			116.5			121.5
General and administrative expenses		56.2			50.4			175.1			160.0
Amortization of intangible assets		10.0			5.8			33.5			26.5
Total operating expenses		432.6			386.4			1,273.2			1,169.4
Operating income		147.6			161.8			359.6			437.9
Other income (loss), net:
Interest and other income, net		1.8			2.3			7.6			8.7
Interest expense		(12.7	)		(4.5	)		(33.6	)		(15.2	)
Gain (loss) on investments, net		0.3			(1.3	)		0.6			(3.4	)
Total other loss, net		(10.6	)		(3.5	)		(25.4	)		(9.9	)
Earnings before income taxes		137.0			158.3			334.2			428.0
Provision for income taxes		30.7			38.4			75.9			97.7
Net earnings	$	106.3		$	119.9		$	258.3		$	330.3
Basic earnings per share	$	0.71		$	0.72		$	1.66		$	1.92
Diluted earnings per share	$	0.70		$	0.71		$	1.63		$	1.88
Shares used in computing basic earnings per share		149.7			167.2			155.8			172.0
Shares used in computing diluted earnings per share		152.6			169.5			158.9			175.2
Net earnings	$	106.3		$	119.9		$	258.3		$	330.3
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax provision (benefit) of $(1.9), $(0.8), $0.7 and $(1.2), respectively		16.0			17.4			(8.0	)		(15.9	)
Unrealized gain (loss) on available-for-sale securities, net of tax provision (benefit) of $0, $0.1, $(0.2) and $(0.2), respectively		0.1			0.3			(0.4	)		(0.6	)
Loss on cash flow hedge, net of tax		(0.2	)		—			(0.2	)		—
Total other comprehensive income (loss)		15.9			17.7			(8.6	)		(16.5	)
Total comprehensive income	$	122.2		$	137.6		$	249.7		$	313.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

BMC SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Nine Months Ended
	December 31,
	2012			2011
Cash flows from operating activities:
Net earnings	$	258.3		$	330.3
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		173.2			161.6
Deferred income tax benefit		(5.7	)		(2.5	)
Share-based compensation expense		115.9			92.7
Other non-cash items		2.9			2.4
Changes in operating assets and liabilities, net of acquisitions:
Trade accounts receivable		28.0			47.1
Trade finance receivables		77.1			91.9
Prepaid and other current assets		16.7			6.3
Other long-term assets		7.4			17.8
Accrued and other current liabilities		(31.4	)		(47.8	)
Deferred revenue		(212.7	)		(88.6	)
Other long-term liabilities		(5.5	)		(9.1	)
Other operating assets and liabilities		(6.3	)		(14.7	)
Net cash provided by operating activities		417.9			587.4
Cash flows from investing activities:
Proceeds from maturities of investments		69.0			24.8
Proceeds from sales of investments		13.3			4.4
Purchases of investments		(139.2	)		(30.0	)
Cash paid for acquisitions, net of cash acquired, and other investments		(19.4	)		(163.0	)
Capitalization of software development costs		(94.2	)		(97.7	)
Purchases of property and equipment		(19.3	)		(17.6	)
Other investing activities		1.9			—
Net cash used in investing activities		(187.9	)		(279.1	)
Cash flows from financing activities:
Purchases of common stock, including accelerated share repurchase		(1,150.0	)		(630.5	)
Repurchases of stock to satisfy employee tax withholding obligations		(38.1	)		(31.7	)
Proceeds from stock options exercised and other		50.7			41.9
Excess tax benefit from share-based compensation expense		5.8			13.6
Repayments of borrowings and capital lease obligations		(21.4	)		(20.7	)
Proceeds from borrowings, net of issuance costs		494.7			—
Net cash used in financing activities		(658.3	)		(627.4	)
Effect of exchange rate changes on cash and cash equivalents		(10.7	)		(22.3	)
Net change in cash and cash equivalents		(439.0	)		(341.4	)
Cash and cash equivalents, beginning of period		1,496.9			1,660.9
Cash and cash equivalents, end of period	$	1,057.9		$	1,319.5
Supplemental disclosure of cash flow information:
Cash paid for interest	$	33.7		$	22.7
Cash paid for income taxes, net of amounts refunded	$	58.3		$	20.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

BMC SOFTWARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of BMC Software, Inc. and its subsidiaries (collectively, we, us, our, the Company or BMC). All significant intercompany balances and transactions have been eliminated in consolidation. These financial statements reflect all normal recurring adjustments necessary to fairly present our financial position and results of operations as of and for the periods presented herein. These financial statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the SEC). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

Interim results are not necessarily indicative of results for a full year. Our results reflect the seasonality of our business and generally tend to be stronger in the third and fourth quarters of our fiscal year, as compared to the first and second quarters of our fiscal year; however, general economic conditions also have an impact on our business and financial results. These financial statements should be read in conjunction with our annual audited consolidated financial statements for the fiscal year ended March 31, 2012, as filed with the SEC on Form 10-K.

(2) Business Combinations

During the nine months ended December 31, 2012, we completed three business combinations for combined purchase consideration of $19.5 million. The purchase consideration was allocated to acquired assets and assumed liabilities consisting primarily of $19.2 million of acquired technology, with weighted average economic lives of approximately three years, in addition to other tangible assets and liabilities. These acquisitions resulted in a preliminary allocation of $2.7 million to goodwill assigned to our Enterprise Service Management-Solutions segment. We are in the process of finalizing our assessment of the fair value of acquired assets and assumed liabilities, primarily as it relates to tax attributes, and will adjust the purchase price allocations when they are finalized.

(3) Financial Instruments

We measure certain financial instruments at fair value on a recurring basis using the following valuation techniques:

(A) Market approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

(B) Income approach — Uses valuation techniques to convert future estimated cash flows to a single present amount based on current market expectations about those future amounts, using present value techniques.

6

The fair values of our financial instruments were determined using the following input levels and valuation techniques:

	Valuation	December 31, 2012								March 31, 2012
	Technique	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
		(In millions)
Assets
Cash equivalents
Money-market funds	A	$	26.2	$	—	$	—	$	26.2	$	769.3	$	—	$	—	$	769.3
United States Treasury securities	A		150.0		—		—		150.0		49.9		—		—		49.9
Short-term and long-term investments
United States Treasury securities	A		128.7		—		—		128.7		92.2		—		—		92.2
Auction rate securities	B		—		—		18.7		18.7		—		—		26.9		26.9
United States government agency bonds	A		—		15.4		—		15.4		—		—		—		—
Corporate bonds and commercial paper	A		—		12.0		—		12.0		—		—		—		—
Mutual funds	A		20.4		—		—		20.4		19.6		—		—		19.6
Foreign currency forward contracts	A		—		3.8		—		3.8		—		8.1		—		8.1
Total		$	325.3	$	31.2	$	18.7	$	375.2	$	931.0	$	8.1	$	26.9	$	966.0
Liabilities
Foreign currency forward contracts	A	$	—	$	2.3	$	—	$	2.3	$	—	$	0.6	$	—	$	0.6
Interest rate swap	B		—		—		0.2		0.2		—		—		—		—
Total		$	—	$	2.3	$	0.2	$	2.5	$	—	$	0.6	$	—	$	0.6

Level 1 classification is applied to any asset or liability that has a readily available quoted market price from an active market where there is significant transparency in the executed/quoted price.

Level 2 classification is applied to assets and liabilities that have evaluated prices where the data inputs to these valuations are observable either directly or indirectly, but do not represent quoted market prices from an active market.

Level 3 classification is applied to assets and liabilities when prices are not derived from existing market data and requires us to develop our own assumptions about how market participants would value the asset or liability.

The following table summarizes the activity in our Level 3 financial instruments for the quarters and nine months ended December 31, 2012 and 2011, respectively:

	Quarter Ended								Nine Months Ended
	December 31, 2012								December 31, 2012
	Auction Rate Securities		Interest Rate Swap			Total			Auction Rate Securities			Interest Rate Swap			Total
	(In millions)
Balance at the beginning of the period	$	18.6	$	—		$	18.6		$	26.9		$	—		$	26.9
Redemption and sales		—		—			—			(7.6	)		—			(7.6	)
Change in fair value included in other comprehensive income		0.1		(0.2	)		(0.1	)		(0.6	)		(0.2	)		(0.8	)
Balance at the end of the period	$	18.7	$	(0.2	)	$	18.5		$	18.7		$	(0.2	)	$	18.5

7

	Quarter Ended			Nine Months Ended
	December 31, 2011			December 31, 2011
	Auction Rate Securities
	(In millions)
Balance at the beginning of the period	$	25.6		$	27.2
Redemption and sales		(0.1	)		(0.5	)
Change in fair value included in other comprehensive income		0.4			(0.8	)
Balance at the end of the period	$	25.9		$	25.9

Investments

Our cash, cash equivalents and investments were comprised of the following:

	December 31, 2012						March 31, 2012
	Cash and Cash Equivalents		Short-term Investments		Long-term Investments		Cash and Cash Equivalents		Short-term Investments		Long-term Investments
	(In millions)
Measured at fair value:
Available-for-sale
United States Treasury securities	$	150.0	$	113.2	$	15.5	$	49.9	$	86.1	$	6.1
Auction rate securities		—		—		18.7		—		—		26.9
United States government agency bonds		—		5.0		10.4		—		—		—
Corporate bonds and commercial paper		—		5.4		6.6		—		—		—
Trading
Mutual funds		—		—		20.4		—		—		19.6
Total debt and equity investments measured at fair value		150.0		123.6		71.6		49.9		86.1		52.6
Cash on hand		829.7		—		—		632.6		—		—
Certificates of deposit		52.0		—		—		45.1		—		—
Money-market funds		26.2		—		—		769.3		—		—
Total cash, cash equivalents and investments	$	1,057.9	$	123.6	$	71.6	$	1,496.9	$	86.1	$	52.6
Amounts included in accumulated other comprehensive income from available-for-sale securities (pre-tax):
Unrealized losses*	$	—	$	—	$	3.0	$	—	$	—	$	2.4

* The unrealized losses on available-for-sale securities at December 31, 2012 and March 31, 2012 relate to the auction rate securities.

8

The following summarizes the underlying contractual maturities of our available-for-sale investments in debt securities at December 31, 2012:

			Fair
	Cost		Value
	(In millions)
Due in one year or less	$	273.6	$	273.6
Due between one and two years		32.5		32.5
Due after ten years		21.7		18.7
Total	$	327.8	$	324.8

At December 31, 2012 and March 31, 2012, we held auction rate securities with a par value of $21.7 million and $29.3 million, respectively, which were classified as available-for-sale. The total estimated fair value of our auction rate securities was $18.7 million and $26.9 million at December 31, 2012 and March 31, 2012, respectively. Our auction rate securities consist entirely of bonds issued by public agencies that are backed by student loans with at least a 97% guarantee by the federal government under the United States Department of Education’s Federal Family Education Loan Program. All of these bonds are currently rated investment grade by Moody’s or Standard and Poor’s. Auctions for these securities began failing in early 2008 and have continued to fail, resulting in our continuing to hold such securities and the issuers paying interest at the maximum contractual rates. We do not believe that any of the underlying issuers of these auction rate securities is presently at risk of default or that the underlying credit quality of the assets backing the auction rate security investments has been impacted by the reduced liquidity of these investments. Due to the illiquidity in the auction rate securities market caused by failed auctions, we estimated the fair value of these securities using internally developed models of the expected cash flows of the securities on a discounted basis. These models incorporate assumptions about the expected cash flows of the underlying student loans discounted at an estimate of the rate of return required by investors, which includes an adjustment to reflect a lack of liquidity in the market for these securities. The range of and weighted average discount rates used in our valuation models at December 31, 2012 were 3.6% to 4.1%, and 3.9%, respectively. Significant increases (decreases) in the discount rate used in the valuation would result in decreases (increases) in the fair value of the auction rate securities. Periodically, the issuers of certain of our auction rate securities have redeemed portions of our holdings at par value plus accrued interest. There were no redemptions during the quarter ended December 31, 2012. During the nine months ended December 31, 2012, issuers redeemed available-for-sale holdings of $7.6 million par value. During the quarter and nine months ended December 31, 2011, issuers redeemed available-for-sale holdings of $0.1 million and $0.5 million par value, respectively.

The unrealized loss on our available-for-sale auction rate securities, which had a fair value of $18.7 million at December 31, 2012, was $3.0 million and was recorded in accumulated other comprehensive income as we believe the decline in fair value of these auction rate securities is temporary. In making this determination, we primarily considered the financial condition and near-term prospects of the issuers, the probability scheduled cash flows will continue to be made and the likelihood we would be required to sell the investments before recovery of our cost basis. These available-for-sale auction rate securities have been in an unrealized loss position for greater than twelve months. Because of the uncertainty related to the timing of liquidity associated with these auction rate securities, these securities were classified as long-term investments at December 31, 2012 and March 31, 2012.

Derivative Financial Instruments

We operate globally and are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of business.

Our foreign currency exposures relate primarily to certain foreign currency denominated assets and liabilities, primarily non-U.S. dollar denominated accounts receivable, cash and intercompany balances held by U.S. dollar functional currency entities. To minimize the risk from changes in foreign currency exchange rates, we have established a program that utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. Gains or losses on our foreign currency exposures are offset by gains or losses on the foreign currency forward contracts entered into under this program. These foreign currency forward contracts generally have terms of one month or less and are generally entered into at the prevailing market exchange rate at the end of each month. We do not use foreign currency forward contracts for speculative purposes. While these foreign currency forward contracts are utilized to hedge foreign currency exposures, they are not formally designated as hedges for accounting purposes, and therefore, the changes in the fair values of these contracts are recognized currently in earnings. We record these foreign currency forward contracts at fair value as either assets or liabilities depending on their net settlement position with each respective counterparty at the balance sheet date.

9

The fair value of our outstanding foreign currency forward contracts that closed in a gain position at December 31, 2012 and March 31, 2012 was $3.8 million and $8.1 million, respectively, and was recorded within other current assets in our condensed consolidated balance sheets. The fair value of our outstanding foreign currency forward contracts that closed in a loss position at December 31, 2012 and March 31, 2012 was $2.3 million and $0.6 million, respectively, and was recorded within accrued liabilities in our condensed consolidated balance sheets. The notional amounts at contract exchange rates of our foreign currency forward contracts outstanding were:

	Notional Amount
	December 31,		March 31,
	2012		2012
	(In millions)
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)
Euro	$	180.9	$	214.2
Australian dollar		31.8		29.9
Chinese yuan renminbi		14.9		11.7
Swiss franc		9.5		6.8
Singapore dollar		6.4		3.8
Brazilian real		5.9		8.7
Danish krone		4.9		3.9
South Korean won		3.2		2.6
Norwegian krone		2.8		2.9
New Zealand dollar		2.5		3.4
British pound		—		19.2
Swedish krona		0.5		8.2
Mexican peso		—		3.2
Other		3.3		3.5
Total	$	266.6	$	322.0
Foreign Currency Forward Contracts (pay United States dollar/receive foreign currency)
Israeli shekel	$	165.0	$	158.2
Indian rupee		12.0		15.0
British pound		3.2		—
Other		0.7		4.8
Total	$	180.9	$	178.0

Our use of foreign currency forward contracts is intended to offset gains and losses associated with foreign currency exposures. Therefore, the notional amounts and currencies underlying our foreign currency forward contracts will fluctuate period to period as they are principally dependent on the balances and currency denomination of monetary assets and liabilities maintained by our global entities. The net effect of the foreign currency forward contracts for the quarter and nine months ended December 31, 2012, was a gain of $4.6 million and $9.2 million, respectively, which, after including gains and losses on our foreign currency exposures, resulted in a $0.1 million net loss and a $0.6 million net gain, respectively, recorded in interest and other income, net. The net effect of the foreign currency forward contracts for the quarter and nine months ended December 31, 2011, was a loss of $1.7 million and $7.6 million, respectively, which, after including gains and losses on our foreign currency exposures, resulted in net losses of $0.6 million and $2.5 million, respectively, recorded in interest and other income, net.

In November 2012, we entered into a $200.0 million unsecured term loan due November 2015 (the Term Loan) with variable-rate interest payments (see Note 4). To minimize the impact of changes in interest rates on our interest payments, in November 2012, we also entered into an interest rate swap agreement with a financial institution to swap variable-rate interest payments for fixed-rate interest payments on a notional amount of $200.0 million. The interest rate swap matures in November 2015 and has periodic interest settlements, both consistent with the terms of our Term Loan. We have designated the interest rate swap as a cash flow hedge of the variability of interest payments under the Term Loan due to changes in the LIBOR benchmark interest rate.

10

At December 31, 2012, the fair value of our interest rate swap was a liability of $0.2 million and was recorded within other liabilities in our condensed consolidated balance sheets, with the effective portion of the loss recognized in other comprehensive income. There was no hedge ineffectiveness during the quarter or nine months ended December 31, 2012. Periodic settlements on the interest rate swap are recorded as interest expense in the condensed consolidated statements of comprehensive income and are reflected within cash flows from operating activities in our condensed consolidated statements of cash flows.

We estimated the fair value of the interest rate swap using an internally developed model of the expected cash flows of the interest payments on a discounted basis. This model incorporates assumptions about the expected cash flows of the interest payments discounted at a market rate, which includes an adjustment to reflect our entity-specific risk. The discount rate used in our valuation model at December 31, 2012 equates to a weighted average of 1.5% and will fluctuate with the U.S. Treasury yield curve in future periods. Significant increases (decreases) in the interest rates used in the valuation would result in increases (decreases) in the fair value of the interest rate swap.

We are exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments, but we do not expect any counterparties to fail to meet their obligations given their high credit ratings. In addition, we diversify this risk across several counterparties and utilize netting agreements to mitigate the counterparty credit risk.

Trade Finance Receivables

A substantial portion of our trade finance receivables is transferred to financial institutions on a non-recourse basis. We utilize wholly-owned finance subsidiaries in these finance receivables transfers. These entities are consolidated into our financial position and results of operations. We account for such transfers as sales in accordance with applicable accounting rules pertaining to the transfer of financial assets and the sale of future revenue when we have surrendered control of such receivables (including determining that such assets have been isolated beyond our reach and the reach of our creditors) and when we do not have significant continuing involvement in the generation of cash flows due the financial institutions. During the quarter and nine months ended December 31, 2012, we transferred $43.2 million and $155.0 million, respectively, of such receivables through these programs. During the quarter and nine months ended December 31, 2011, we transferred $49.0 million and $208.0 million, respectively, of such receivables through these programs. Finance receivables are typically transferred within several months after origination and the outstanding principal balance at the time of transfer typically approximates fair value.

For those finance receivables not transferred, we evaluate the credit risk of finance receivables in our portfolio based on regional characteristics specific to the risk climate in each of our geographic operations as well as based on internal credit quality indicators for individual receivables. We evaluate the credit risk of finance receivables using an internal credit rating system based on whether an individual receivable meets specific internal criteria including counterparty credit rating and receivable maturity date and assign an internal credit rating of 1, 2 or 3, with a credit rating of 1 representing the best credit quality.

For all regions and credit categories, a finance receivable will be specifically reserved once deemed uncollectible. As of December 31, 2012, we held $112.4 million of finance receivables, net of $0.3 million of specific receivables which have been fully reserved.

At December 31, 2012, our finance receivables balance, net of allowance, by region and by class of internal credit rating was as follows:

	North America		EMEA		Asia Pacific		Latin America		Total
	(In millions)
Class 1	$	27.9	$	45.1	$	4.4	$	1.2	$	78.6
Class 2		3.2		19.0		6.9		3.9		33.0
Class 3		0.1		—		0.2		0.5		0.8
Balance at the end of the period	$	31.2	$	64.1	$	11.5	$	5.6	$	112.4

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Other Financial Instruments

The carrying values and fair values of our debt instruments at December 31, 2012 and March 31, 2012 are as follows:

	December 31, 2012				March 31, 2012
	Carrying value		Fair value		Carrying value		Fair value
	(In millions)
Senior unsecured notes due June 2018 (Level 2)	$	299.0	$	363.5	$	298.9	$	368.4
Senior unsecured notes due February 2022 (Level 2)		497.6		521.3		497.4		506.6
Senior unsecured notes due December 2022 (Level 2)		297.7		308.0		—		—
Term Loan due November 2015 (Level 3)		200.0		200.3		—		—

The fair values of the senior unsecured notes due June 2018, February 2022 and December 2022 were determined using quoted market prices. We estimated the fair value of the Term Loan using an internally developed model of the expected cash flows of the principal and interest payments on a discounted basis. This model incorporates assumptions about the expected cash flows of the principal and interest payments discounted at a market rate, which includes an adjustment to reflect our entity-specific risk. The discount rate used in our valuation model at December 31, 2012 equates to a weighted average of 2.0% and will fluctuate with the U.S. Treasury yield curve in future periods. Significant increases in the entity-specific risk used in the valuation would result in decreases in the fair value of the Term Loan.

The carrying values of all other financial instruments, consisting primarily of trade and finance receivables, accounts payable and other borrowings, approximate their respective fair values.

(4) Long-Term Borrowings

Long-term borrowings at December 31, 2012 and March 31, 2012 consisted of:

	December 31,			March 31,
	2012			2012
	(In millions)
Senior unsecured notes due June 2018 (net of $1.0 million and $1.1 million of unamortized discount at December 31, 2012 and March 31, 2012, respectively)	$	299.0		$	298.9
Senior unsecured notes due February 2022 (net of $2.4 million and $2.6 million of unamortized discount at December 31, 2012 and March 31, 2012, respectively)		497.6			497.4
Senior unsecured notes due December 2022 (net of $2.3 million of unamortized discount at December 31, 2012)		297.7			—
Term Loan due November 2015		200.0			—
Capital leases and other obligations		38.0			46.3
Total		1,332.3			842.6
Less current maturities of capital leases and other obligations (included in accrued liabilities)		(23.7	)		(21.0	)
Long-term borrowings	$	1,308.6		$	821.6

In June 2008, we issued $300.0 million of senior unsecured notes due June 2018. Net proceeds to us after original issuance discount and issuance costs amounted to $295.6 million. These senior notes were issued at an original issuance discount of $1.8 million and bear interest at a rate of 7.25% per annum, payable semi-annually in June and December of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 50 basis points, plus accrued and unpaid interest.

In February 2012, we issued $500.0 million of senior unsecured notes due February 2022. Net proceeds to us after original issuance discount and issuance costs amounted to $493.3 million. These senior notes were issued at an original issuance discount of $2.7 million and bear interest at a rate of 4.25% per annum, payable semi-annually in February and August of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 35 basis points, plus accrued and unpaid interest.

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In November 2012, we issued $300.0 million of senior unsecured notes due December 2022. Net proceeds to us after original issuance discount and issuance costs amounted to $295.1 million. These senior notes were issued at an original issuance discount of $2.3 million and bear interest at a rate of 4.5% per annum, payable semi-annually in June and December of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 45 basis points, plus accrued and unpaid interest.

In November 2012, we entered into a $200.0 million unsecured term loan agreement, due November 2015, with an institutional lender. Net proceeds to us after issuance costs amounted to $199.6 million. The Term Loan bears interest at a variable rate equal to the one-month LIBOR plus 1.625%, based upon our current debt rating, and is payable monthly. We concurrently entered into an interest rate swap agreement to hedge the variability of cash interest payments due to changes in the LIBOR benchmark interest rate, fixing our interest rate at 2.033%. The Term Loan may be prepaid at our option any time after the second anniversary of the closing date at the principal amount plus a 0.50% premium.

In November 2010, we entered into a credit agreement with certain institutional lenders providing for an unsecured revolving credit facility in an amount up to $400.0 million which is scheduled to expire on November 30, 2014 (the Credit Facility). Subject to certain conditions, at any time prior to maturity, we may invite existing and new lenders to increase the size of the Credit Facility up to a maximum of $600.0 million. The Credit Facility includes provisions for swing line loans of up to $25.0 million and standby letters of credit of up to $50.0 million. Revolving loans under the Credit Facility bear interest, at the Company’s option, at a rate equal to either (i) the base rate (as defined) plus a margin based on the credit ratings of our senior unsecured notes due June 2018, or (ii) the LIBOR rate (as defined) plus a margin based on the credit ratings of our senior notes due June 2018, for interest periods of one, two, three or nine months. As of December 31, 2012 and through January 28, 2013, we have not borrowed any funds under the Credit Facility.

The above credit facilities are subject to covenants limiting, among other things, the creation of liens securing indebtedness and sale-leaseback transactions. At December 31, 2012, we were in compliance with all debt covenants.

(5) Income Taxes

Income tax expense was $30.7 million and $75.9 million for the quarter and nine months ended December 31, 2012, respectively, resulting in effective tax rates of 22.4% and 22.7%, respectively. Income tax expense was $38.4 million and $97.7 million for the quarter and nine months ended December 31, 2011, respectively, resulting in effective tax rates of 24.3% and 22.8%, respectively. Our effective tax rate generally differs from the U.S. federal statutory rate of 35% due to favorable tax rates associated with earnings from lower tax rate jurisdictions throughout the world and our policy of indefinitely reinvesting earnings from certain jurisdictions (primarily in Europe), as well as due to additional accruals, changes in estimates, releases and settlements with taxing authorities related to our uncertain tax positions and benefits associated with income attributable to both domestic production activities and the extraterritorial income exclusion. During the quarter and nine months ended December 31, 2012, the overall favorable effects of foreign tax rates on our effective tax rate were 9.6% and 9.4% of pre-tax earnings, respectively. During the quarter and nine months ended December 31, 2011, the overall favorable effects of foreign tax rates on our effective tax rate were 7.3% and 8.6% of pre-tax earnings, respectively. During the nine months ended December 31, 2011, we also recorded discrete net tax benefits of $6.2 million associated with tax authority settlements related to prior years’ tax matters which favorably impacted our effective tax rate by 1.4% of pre-tax earnings. Our effective tax rate could fluctuate on a quarterly basis and could be adversely affected to the extent forecasted earnings for the year are lower than anticipated in countries with lower statutory rates and higher than anticipated in countries with higher statutory rates.

We file a federal income tax return in the United States as well as income tax returns in various local, state and foreign jurisdictions. Our tax years are closed with the United States Internal Revenue Service (the IRS) through the tax year ended March 31, 2007, except for one issue related to the year ended March 31, 2006. We received a Notice of Deficiency from the IRS related to this issue and in July 2011 filed a petition for hearing with the U.S. Tax Court. A trial was held in May 2012 and post-trial briefs have been submitted. We are currently awaiting the Tax Court’s ruling. In December 2012, the IRS completed its examination of our federal income tax return for the years ended March 31, 2009 and 2010, and there were no unagreed issues. In addition, certain tax years related to local, state, and foreign jurisdictions remain subject to examination. To provide for potential tax exposures, we maintain a liability for unrecognized tax benefits which we believe is adequate.

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(6) Share-Based Compensation

During the quarter and nine months ended December 31, 2012, we granted 2.2 million and 4.2 million nonvested stock units, respectively, at a weighted average grant date fair value of $40.44 and $41.96, respectively, consisting of both time-based and market-based awards, to our executive officers, non-executive employees and non-employee board members. Time-based nonvested stock units primarily vest in annual increments over one or three years. Market-based nonvested stock units vest in 50% increments over two- and three-year periods upon achievement of certain targets related to our relative shareholder return as compared to the NASDAQ-100 Index over each performance period.

During the quarter and nine months ended December 31, 2012, we issued 0.4 million and 1.4 million shares, respectively, of common stock related to exercises of stock options, and 1.3 million and 2.8 million shares, respectively, of common stock related to vesting of nonvested stock units.

At December 31, 2012, we had approximately $264.1 million of total unrecognized compensation costs related to share-based awards that are expected to be recognized as expense over a remaining weighted-average period of two years.

Share-based compensation expense as recorded in our condensed consolidated statements of comprehensive income is summarized as follows:

	Quarter Ended				Nine Months Ended
	December 31,				December 31,
	2012		2011		2012		2011
	(In millions)
Cost of license revenue	$	1.9	$	1.1	$	5.2	$	3.4
Cost of maintenance revenue		3.6		3.7		12.3		11.0
Cost of professional services revenue		1.5		1.4		4.6		3.9
Selling and marketing expenses		16.4		9.3		44.3		28.4
Research and development expenses		5.0		3.1		11.4		9.6
General and administrative expenses		13.1		12.5		38.1		36.4
Total share-based compensation expense	$	41.5	$	31.1	$	115.9	$	92.7

(7) Stockholders’ Equity

Earnings Per Share

The two-class method is utilized for the computation of earnings per share (EPS). The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Income allocated to these participating securities is excluded from net earnings allocated to common shares and was insignificant for the quarter and nine months ended December 31, 2011. There were no participating securities outstanding during the quarter and nine months ended December 31, 2012.

Basic earnings per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding share-based awards and other dilutive securities using the treasury stock method.

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The following table summarizes our basic and diluted EPS computations for the quarters and nine months ended December 31, 2012 and 2011:

	Quarter Ended				Nine Months Ended
	December 31,				December 31,
	2012		2011		2012		2011
	(In millions, except per share data)
Basic earnings per share:
Net earnings allocated to common shares	$	106.3	$	119.9	$	258.3	$	330.3
Weighted average number of common shares outstanding		149.7		167.2		155.8		172.0
Basic earnings per share	$	0.71	$	0.72	$	1.66	$	1.92
Diluted earnings per share:
Net earnings allocated to common shares	$	106.3	$	119.9	$	258.3	$	330.3
Weighted average number of common shares outstanding		149.7		167.2		155.8		172.0
Incremental shares from assumed conversions of share-based awards		2.9		2.3		3.1		3.2
Adjusted weighted average number of common shares outstanding		152.6		169.5		158.9		175.2
Diluted earnings per share	$	0.70	$	0.71	$	1.63	$	1.88

For the quarter and nine months ended December 31, 2012, 0.6 million and 1.2 million weighted average potential common shares, respectively, have been excluded from the calculation of diluted EPS as they were anti-dilutive. For the quarter and nine months ended December 31, 2011, 4.9 million and 1.8 million weighted average potential common shares, respectively, have been excluded from the calculation of diluted EPS as they were anti-dilutive.

Treasury Stock

Our Board of Directors has authorized a total of $6.0 billion to repurchase common stock under a common stock repurchase program, including a new $1 billion stock repurchase authorization approved in October 2012. On November 23, 2012, we entered into an accelerated share repurchase agreement (the ASR) to repurchase $750 million of our common stock under this program. Under the terms of the ASR, we paid $750 million to a financial institution and initially received 13.1 million shares of common stock, or 70% of the number of shares to be repurchased if such shares were repurchased at a price equal to the closing price of our common stock on November 23, 2012. The specific number of shares that we will ultimately repurchase under the ASR will be based generally on the daily discounted volume-weighted average share price of our common stock during the repurchase period, subject to other adjustments pursuant to the terms and conditions of the ASR. The ASR contemplates that the repurchase period will last no longer than approximately seven months from the execution of the agreement. At the completion of the repurchase period, we may be entitled to receive additional shares of our common stock from the financial institution or, under certain circumstances specified in the ASR, we may be required to deliver shares or make a cash payment (at our option) to the financial institution. Under the terms of the ASR, the maximum number of shares that could be delivered is 25.0 million.

The fair market value of the 13.1 million shares initially delivered was approximately $525.0 million and was included in treasury stock, reducing the weighted average number of basic and diluted common shares used to calculate EPS. The remaining $225.0 million was included in additional paid-in capital (APIC) and will be reclassified from APIC to treasury stock upon final settlement of the ASR. As of December 31, 2012, based on the daily discounted volume-weighted average price of our common stock since the effective date of the ASR, the financial institution would be required to deliver 5.6 million shares to us for the $225.0 million portion of the ASR that has not yet been settled. These shares were not included in the calculation of diluted weighted average common shares outstanding during the period because their effect was anti-dilutive.

During the quarter and nine months ended December 31, 2012, we repurchased a total of 14.3 million and 22.6 million shares, respectively, valued at $575.0 million and $925.0 million, respectively, under the Board authorizations. At December 31, 2012, approximately $700.2 million remains authorized in the stock repurchase program, which does not have an expiration date. During the quarter and nine months ended December 31, 2012, we repurchased 0.4 million and 0.9 million shares, respectively, for $18.1 million and $38.1 million, respectively, to satisfy employee tax withholding obligations upon the vesting of share-based awards.

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Shareholder Rights Agreement

On May 12, 2012, our Board of Directors authorized and declared a dividend of one preferred share purchase right (a Right) for each outstanding common share through a shareholder rights agreement (the Rights Agreement). Each Right, once exercisable, represents the right to purchase one one-thousandth of a series B junior participating preferred share, par value $0.01, for $180, or an equivalent value of common shares determined at 50% of the then-current market price of BMC’s common stock, provided sufficient common shares are then unissued. The Rights become exercisable in the event any individual person or entity (including the ownership of their related affiliates) acquires 10% or more of the outstanding share capital of the Company without the approval of BMC’s Board of Directors, and until such time are inseparable from and trade with BMC’s common stock. The Rights have a de minimus fair value and are accounted for as a component of stockholders’ equity. The Rights Agreement expires May 11, 2013.

(8) Guarantees and Contingencies

Guarantees

Under our standard software license agreements, we agree to indemnify, defend and hold harmless our licensees from and against certain losses, damages and costs arising from claims alleging the licensees’ use of our software infringes the intellectual property rights of a third party. Also, under these standard license agreements, we represent and warrant to licensees that our software products operate substantially in accordance with published specifications.

Other guarantees include promises to indemnify, defend and hold harmless each of our executive officers, non-employee directors and certain key employees from and against losses, damages and costs incurred by each such individual in administrative, legal or investigative proceedings arising from alleged wrongdoing by the individual while acting in good faith within the scope of his or her job duties on our behalf.

We also had outstanding letters of credit, performance bonds and similar instruments at December 31, 2012 of approximately $52.3 million primarily in support of performance obligations to various customers, but also related to facilities and other obligations.

Historically, we have not incurred significant costs related to such indemnifications, warranties and guarantees. As such, and based on other factors, no provision or accrual for these items has been made.

Contingencies

We are party to various labor claims brought by certain former international employees alleging that amounts are due to such employees for unpaid commissions and other compensation. The claims are in various stages and are not expected to be fully resolved in the near future; however, we intend to vigorously contest all of the claims. Taking into account accruals recorded by us, we believe the likelihood of a material adverse effect on our financial statements resulting from these claims is remote. However, we cannot predict the timing or ultimate outcome of these matters.

We are currently litigating a matter in Brazilian courts as to whether a tax applies to the remittance of software payments from our Brazilian operations. In February 2007, a law was enacted that clarified that this particular tax did not apply to the remittance of software payments, retroactive to January 1, 2006. We continue to pursue a favorable resolution on this matter for years prior to January 1, 2006. While we believe we will ultimately prevail based on the merits of our position, if we do not, we could incur a charge of up to approximately $11 million based on current exchange rates; however, we cannot predict the timing or ultimate outcome of this matter.

We are subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. Taking into account accruals recorded by us, we believe the likelihood of a material adverse effect on our financial statements resulting from any of these matters is remote.

(9) Segment Reporting

We are organized into two primary business units, Enterprise Service Management (ESM) and Mainframe Service Management (MSM). ESM derives its revenue from our performance management, automation, IT service management, and Atrium solution suites (collectively, ESM-Solutions), along with professional services revenue derived from consulting, implementation, integration and educational services related principally to the delivery of our ESM solutions (ESM-Services). MSM derives its revenue from solution suites for mainframe data and performance management and enterprise workload automation. Beginning in the first quarter of fiscal 2013, we expanded our ESM segment reporting to include separate financial information for both ESM-Solutions and ESM-Services, consistent with the manner in which business segment performance is being assessed internally for evaluating performance and making resource allocation decisions.

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Segment performance is measured based on internal segment operating income. Segment operating income for ESM-Solutions and MSM reflects segment revenue less direct and allocated indirect segment operating expenses. Direct segment operating expenses primarily include cost of revenue, selling and marketing, research and development and general and administrative expenses that can be specifically identified to a particular segment and are directly controllable by segment management, while allocated indirect segment operating expenses primarily include indirect costs within these operating expense categories that are not specifically identified to a particular segment or controllable by segment management. Indirect operating expenses are allocated to ESM-Solutions and MSM based on budgeted bookings, revenue and other allocation methods that management believes to be reasonable. Segment operating income for ESM-Services reflects professional services revenue less direct segment operating expenses consisting primarily of cost of professional services revenue and direct selling and marketing costs. The Company has reclassified all periods presented to conform to the current period presentation.

Our measure of segment operating income does not include the effect of share-based compensation expenses, amortization of acquired technology and other intangible assets, the costs associated with severance, exit costs and related charges or proxy contest costs, which are collectively included in unallocated operating expenses below. Assets and liabilities are reviewed by management at the consolidated level only.

The following tables summarize segment performance for the quarters and nine months ended December 31, 2012 and 2011:

	Enterprise Service Management							Mainframe Service Management		Consolidated
Quarter Ended December 31, 2012	Solutions		Services			Total
						(In millions)
Revenue:
License	$	131.3	$	—		$	131.3	$	101.0	$	232.3
Maintenance		164.3		—			164.3		124.4		288.7
Professional services		—		59.2			59.2		—		59.2
Total revenue		295.6		59.2			354.8		225.4		580.2
Direct and allocated indirect segment operating expenses:		224.1		60.1			284.2		85.8		370.0
Segment operating income (loss)		71.5		(0.9	)		70.6		139.6		210.2
Unallocated operating expenses											(62.6	)
Other loss, net											(10.6	)
Earnings before income taxes										$	137.0

	Enterprise Service Management							Mainframe Service Management		Consolidated
Quarter Ended December 31, 2011	Solutions		Services			Total
						(In millions)
Revenue:
License	$	133.7	$	—		$	133.7	$	91.3	$	225.0
Maintenance		147.7		—			147.7		124.6		272.3
Professional services		—		50.9			50.9		—		50.9
Total revenue		281.4		50.9			332.3		215.9		548.2
Direct and allocated indirect segment operating expenses:		199.1		57.0			256.1		79.4		335.5
Segment operating income (loss)		82.3		(6.1	)		76.2		136.5		212.7
Unallocated operating expenses											(50.9	)
Other loss, net											(3.5	)
Earnings before income taxes										$	158.3

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	Enterprise Service Management							Mainframe Service Management		Consolidated
Nine Months Ended December 31, 2012	Solutions		Services			Total
						(In millions)
Revenue:
License	$	357.4	$	—		$	357.4	$	255.7	$	613.1
Maintenance		482.8		—			482.8		370.2		853.0
Professional services		—		166.7			166.7		—		166.7
Total revenue		840.2		166.7			1,006.9		625.9		1,632.8
Direct and allocated indirect segment operating expenses:		652.3		180.5			832.8		243.4		1,076.2
Segment operating income (loss)		187.9		(13.8	)		174.1		382.5		556.6
Unallocated operating expenses											(197.0	)
Other loss, net											(25.4	)
Earnings before income taxes										$	334.2

	Enterprise Service Management							Mainframe Service Management		Consolidated
Nine Months Ended December 31, 2011	Solutions		Services			Total
						(In millions)
Revenue:
License	$	398.2	$	—		$	398.2	$	246.0	$	644.2
Maintenance		434.5		—			434.5		372.9		807.4
Professional services		—		155.7			155.7		—		155.7
Total revenue		832.7		155.7			988.4		618.9		1,607.3
Direct and allocated indirect segment operating expenses:		597.9		165.9			763.8		243.9		1,007.7
Segment operating income (loss)		234.8		(10.2	)		224.6		375.0		599.6
Unallocated operating expenses											(161.7	)
Other loss, net											(9.9	)
Earnings before income taxes										$	428.0

(10) New Accounting Pronouncements Not Yet Adopted

In December 2011, the Financial Accounting Standards Board issued guidance requiring new disclosures regarding balance sheet offsetting. This guidance requires entities to disclose the gross amounts of certain recognized financial assets and liabilities, to reconcile these amounts to the net positions recognized in the balance sheet and to provide qualitative disclosures about the rights of offset relating to these financial assets and liabilities. This new disclosure guidance is effective for us beginning with our first quarter of fiscal 2014.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

It is important that this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) be read in conjunction with: (i) the attached unaudited condensed consolidated financial statements and notes thereto, (ii) the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2012, and (iii) our discussion of risks and uncertainties included within the section entitled Risk Factors in our Annual Report on Form 10-K for the year ended March 31, 2012.

This MD&A contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which are identified by the use of the words “believe,” “expect,” “anticipate,” “estimate,” “will,” “contemplate,” “would” and similar expressions that contemplate future events. Such forward-looking statements are based on management’s reasonable current assumptions and expectations. Numerous important factors, risks and uncertainties, including but not limited to those summarized under Risk Factors in our Annual Report on Form 10-K for the year ended March 31, 2012, affect our operating results and could cause our actual results, levels of activity, performance or achievement to differ materially from the results expressed or implied by these or any other forward-looking statements made by us or on our behalf. There can be no assurance that future results will meet expectations.

BMC, BMC Software and the BMC Software logo are the exclusive properties of BMC Software, Inc., are registered with the U.S. Patent and Trademark Office, and may be registered or pending registration in other countries. All other BMC trademarks, service marks and logos may be registered or pending registration in the U.S. or in other countries. All other trademarks or registered trademarks are the property of their respective owners.

Unless indicated otherwise, results of operations data in this MD&A are presented in accordance with United States generally accepted accounting principles (GAAP). Additionally, in an effort to provide investors with additional information regarding our results of operations, certain non-GAAP financial measures including non-GAAP operating income, non-GAAP net earnings and non-GAAP diluted earnings per share are provided in this MD&A. See Non-GAAP Financial Measures and Reconciliations below for an explanation of our use of non-GAAP financial measures and reconciliations to their corresponding measures calculated in accordance with GAAP.

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Overview

A summary of select operating metrics for the quarter and nine months ended December 31, 2012 is as follows:

• Total bookings, which represent the contract value of new transactions that we closed and recorded, were $514.3 million for the quarter, representing a decrease of $10.1 million, or 1.9%, from the prior year quarter, and for the nine months ended December 31, 2012 were $1,415.0 million, representing a decrease of $107.2 million, or 7.0%, from the prior year period. Within the first nine months of the prior fiscal year, one large transaction generated total bookings of over $100 million, principally related to our MSM business.

• Total license bookings were $228.3 million for the quarter, representing a decrease of $8.5 million, or 3.6%, from the prior year quarter, and for the nine months ended December 31, 2012 were $544.0 million, representing a decrease of $72.8 million, or 11.8%, from the prior year period. During the quarter, we closed 41 transactions with license bookings over $1 million (with total license bookings of $115.4 million) compared to 42 transactions with license bookings over $1 million (with total license bookings of $117.7 million) in the prior year quarter. During the nine months ended December 31, 2012, we closed 96 transactions with license bookings over $1 million (with total license bookings of $262.5 million) compared to 110 transactions with license bookings over $1 million (with total license bookings of $336.2 million) in the prior year period.

• Within our ESM-Solutions segment, where we evaluate performance on the basis of license bookings, total license bookings for the quarter decreased by $10.3 million, or 8.2%, from the prior year quarter, and for the nine months ended December 31, 2012 decreased by $19.4 million, or 5.5%, from the prior year period. We estimate that the impact of foreign currency exchange rate changes, while nominal for the quarter, contributed to an approximate $4 million, or 1%, reduction in ESM license bookings for the nine month period. The license bookings decreases for both the quarter and nine month periods were driven primarily by a number of large, forecasted license transactions that failed to close at the end of the quarter, which we attribute to a combination of difficult macroeconomic conditions, perceived uncertainty related to our strategic announcements early in the quarter and preceding press coverage related to activist investor activity, as well as internal sales execution issues. Additionally, while sales force capacity has reached planned levels, we believe that overall productivity for both the quarter and nine month periods was negatively impacted by lower sales force and sales management tenure and experience levels, particularly in certain regions.

• Within our MSM segment, where we evaluate performance based on total and annualized bookings, total bookings for the trailing twelve months ended December 31, 2012 decreased by $161.4 million, or 17.4%, and on an annualized basis, after normalizing for contract length, decreased by $38.6 million, or 13.2%, as compared to the prior year period. These trailing twelve month decreases were attributable primarily to the large prior year transaction referred to above as well as the timing of other transaction renewal cycles. Over the trailing 36 months ended December 31, 2012, total MSM bookings decreased by $35.6 million, or 1.4%, and on an annualized basis, after normalizing for contract length, decreased by $9.9 million, or 1.2%, as compared to the prior year period.

• Total revenue for the quarter was $580.2 million, representing an increase of $32.0 million, or 5.8%, over the prior year quarter, and for the nine months ended December 31, 2012 was $1,632.8 million, representing an increase of $25.5 million, or 1.6%, over the prior year period. Revenue contributed by Numara Software, Inc., which we acquired during the fourth quarter of fiscal 2012, was $20.2 million and $56.3 million for the quarter and nine months ended December 31, 2012, respectively. The increase in revenue for the quarter was reflective of increases of $7.3 million, or 3.2%, $16.4 million, or 6.0%, and $8.3 million, or 16.3%, in license, maintenance and professional services revenue, respectively. The increase for the nine months ended December 31, 2012 was reflective of increases of $45.6 million, or 5.6%, and $11.0 million, or 7.1%, in maintenance and professional services revenue, respectively, partially offset by a decrease of $31.1 million, or 4.8%, in license revenue. On a segment basis, ESM-Solutions revenue for the quarter increased by $14.2 million, or 5.0%, ESM-Services revenue increased by $8.3 million, or 16.3%, and MSM revenue increased by $9.5 million, or 4.4%, as compared to the prior year quarter. For the nine months ended December 31, 2012, ESM-Solutions revenue increased by $7.5 million, or 0.9%, ESM-Services revenue increased by $11.0 million, or 7.1%, and MSM revenue increased by $7.0 million, or 1.1%, over the prior year period. We estimate that foreign currency exchange rate fluctuations negatively affected revenue by approximately $3 million, or 1%, for the quarter, and approximately $19 million, or 1%, for the nine months ended December 31, 2012, as compared to the respective prior year periods, on a constant currency basis.

• Operating income for the quarter was $147.6 million, representing a decrease of $14.2 million, or 8.8%, from the prior year quarter, and for the nine months ended December 31, 2012 was $359.6 million, representing a decrease of $78.3 million, or 17.9%, from the prior year period. Non-GAAP operating income for the quarter was $210.2 million, representing a decrease of $2.5 million, or 1.2%, from the prior year quarter, and for the nine months ended December 31, 2012 was $556.6 million, representing a decrease of $43.0 million, or 7.2%, from the prior year period.

20

• Net earnings for the quarter were $106.3 million, representing a decrease of $13.6 million, or 11.3%, from the prior year quarter, and for the nine months ended December 31, 2012 were $258.3 million, representing a decrease of $72.0 million, or 21.8%, from the prior year period. Non-GAAP net earnings for the quarter were $150.5 million, representing a decrease of $6.4 million, or 4.1%, from the prior year quarter, and for the nine months ended December 31, 2012 were $397.2 million, representing a decrease of $42.4 million, or 9.6%, from the prior year period.

• Diluted earnings per share for the quarter was $0.70, representing a decrease of $0.01 per share, or 1.4%, from the prior year quarter, and for the nine months ended December 31, 2012 was $1.63, representing a decrease of $0.25 per share, or 13.3%, from the prior year period. Non-GAAP diluted earnings per share was $0.99, representing an increase of $0.06 per share, or 6.5%, over the prior year quarter, and for the nine months ended December 31, 2012 was $2.50, representing a decrease of $0.01 per share, or 0.4%, from the prior year period.

• Cash flows from operations for the nine months ended December 31, 2012 were $417.9 million, representing a decrease of $169.5 million, or 28.9%, from the prior year period. We closed out the quarter with a solid balance sheet at December 31, 2012, including $1.3 billion in cash, cash equivalents and investments and $1.8 billion in deferred revenue.

We continue to invest in our technology leadership, including in the areas of cloud computing and software-as-a-service (SaaS). In addition to our ongoing product development efforts, we consummated three strategic acquisitions in our ESM segment during the nine months ended December 31, 2012, acquiring Abydos Limited, a provider of workflow management solutions, VaraLogix, Inc., an application release automation provider, and my-eService, Inc., a provider of self-service IT support solutions.

We also continue to enhance shareholder value by returning cash to shareholders through our stock repurchase program. In October 2012, our Board of Directors approved a new $1 billion stock repurchase program, and in November 2012, we entered into an accelerated share repurchase agreement to repurchase $750 million of our common stock under this program. Initial shares received under this repurchase agreement were 13.1 million, for a total value of $525.0 million. During the quarter and nine months ended December 31, 2012, we repurchased a total of 14.3 million and 22.6 million shares, respectively, for a total value of $575.0 million and $925.0 million, respectively.

Our earnings are subject to volatility as a significant portion of our operating expenses is fixed in the short-term, and we plan a portion of our expense run-rate based on our expectations of future revenue. In addition, a significant amount of our license transactions are completed during the final weeks and days of each quarter and therefore, we generally do not know whether revenue has met our expectations until after the end of the quarter. If a shortfall in revenue were to occur in any given quarter, there would be an immediate, and possibly significant, impact to our overall earnings and, most likely, our stock price.

Because our software solutions are designed for and marketed to companies looking to improve the management of their IT infrastructure and processes, demand for our products, and therefore our financial results, are dependent upon customers continuing to value such solutions and to invest in such technology. There are a number of trends that have historically influenced demand for IT management software, including, among others, business demands placed on IT, computing capacity within IT departments, complexity of IT systems and IT operational costs. Our financial results are also influenced by many economic and industry conditions, including, but not limited to, general economic and market conditions in the United States and other economies in which we market products, changes in foreign currency exchange rates, general levels of customer spending, IT budgets, the competitiveness of the IT management software and solutions industry, the adoption rate for Business Service Management and the stability of the mainframe market.

21

Results of Operations and Financial Condition

The following table sets forth, for the periods indicated, the percentages that selected items in the condensed consolidated statements of comprehensive income represent of total revenue. These financial results are not necessarily indicative of future results.

	Percentage of Total Revenue
	Quarter Ended						Nine Months Ended
	December 31,						December 31,
	2012			2011			2012			2011
Revenue:
License		40.0	%		41.0	%		37.5	%		40.1	%
Maintenance		49.8	%		49.7	%		52.2	%		50.2	%
Professional services		10.2	%		9.3	%		10.2	%		9.7	%
Total revenue		100.0	%		100.0	%		100.0	%		100.0	%
Operating expenses:
Cost of license revenue		7.1	%		7.0	%		7.4	%		7.2	%
Cost of maintenance revenue		8.8	%		8.4	%		9.5	%		8.7	%
Cost of professional services revenue		9.7	%		9.6	%		10.3	%		9.5	%
Selling and marketing expenses		30.3	%		28.1	%		30.8	%		28.1	%
Research and development expenses		7.2	%		7.0	%		7.1	%		7.6	%
General and administrative expenses		9.7	%		9.2	%		10.7	%		10.0	%
Amortization of intangible assets		1.7	%		1.1	%		2.1	%		1.6	%
Total operating expenses		74.6	%		70.5	%		78.0	%		72.8	%
Operating income		25.4	%		29.5	%		22.0	%		27.2	%
Other loss, net		(1.8	)%		(0.6	)%		(1.6	)%		(0.6	)%
Earnings before income taxes		23.6	%		28.9	%		20.5	%		26.6	%
Provision for income taxes		5.3	%		7.0	%		4.6	%		6.1	%
Net earnings		18.3	%		21.9	%		15.8	%		20.5	%

22

Revenue

The following tables provide information regarding software license and software maintenance revenue for the quarters and nine months ended December 31, 2012 and 2011:

	Quarter Ended							Nine Months Ended
	December 31,							December 31,
Software License Revenue	2012		2011		% Change			2012		2011		% Change
	(In millions)							(In millions)
Enterprise Service Management	$	131.3	$	133.7		(1.8	)%	$	357.4	$	398.2		(10.2	)%
Mainframe Service Management		101.0		91.3		10.6	%		255.7		246.0		3.9	%
Total software license revenue	$	232.3	$	225.0		3.2	%	$	613.1	$	644.2		(4.8	)%

	Quarter Ended							Nine Months Ended
	December 31,							December 31,
Software Maintenance Revenue	2012		2011		% Change			2012		2011		% Change
	(In millions)							(In millions)
Enterprise Service Management	$	164.3	$	147.7		11.2	%	$	482.8	$	434.5		11.1	%
Mainframe Service Management		124.4		124.6		(0.2	)%		370.2		372.9		(0.7	)%
Total software maintenance revenue	$	288.7	$	272.3		6.0	%	$	853.0	$	807.4		5.6	%

	Quarter Ended							Nine Months Ended
	December 31,							December 31,
Total Software Revenue	2012		2011		% Change			2012		2011		% Change
	(In millions)							(In millions)
Enterprise Service Management	$	295.6	$	281.4		5.0	%	$	840.2	$	832.7		0.9	%
Mainframe Service Management		225.4		215.9		4.4	%		625.9		618.9		1.1	%
Total software revenue	$	521.0	$	497.3		4.8	%	$	1,466.1	$	1,451.6		1.0	%

Software License Revenue

License revenue for the quarter ended December 31, 2012 was $232.3 million, an increase of $7.3 million, or 3.2%, over the prior year quarter. This increase was attributable to an increase in MSM license revenue, partially offset by a decrease in ESM license revenue, as further discussed below. Recognition of license revenue that was deferred in prior periods increased $2.3 million for the quarter ended December 31, 2012 as compared to the prior year quarter. Of the license revenue transactions recorded, the percentage of license revenue recognized upfront was 58% in the current quarter as compared to 55% in the prior year quarter.

License revenue for the nine months ended December 31, 2012 was $613.1 million, a decrease of $31.1 million, or 4.8%, from the prior year period. This decrease was attributable to a decrease in ESM license revenue, partially offset by an increase in MSM license revenue, as further discussed below. Recognition of license revenue that was deferred in prior periods decreased $16.2 million for the nine months ended December 31, 2012 as compared to the prior year period. Of the license revenue transactions recorded, the percentage of license revenue recognized upfront was 59% in the current nine month period as compared to 54% in the prior year period.

ESM license revenue was $131.3 million, or 56.5%, and $357.4 million, or 58.3%, of our total license revenue for the quarter and nine months ended December 31, 2012, respectively, and $133.7 million, or 59.4%, and $398.2 million, or 61.8%, of our total license revenue for the quarter and nine months ended December 31, 2011, respectively. ESM license revenue for the quarter ended December 31, 2012 decreased by $2.4 million, or 1.8%, from the prior year quarter, due to a $4.8 million reduction in upfront license revenue recognized in connection with new transactions, partially offset by a $2.4 million increase in the recognition of previously deferred license revenue. The decrease in upfront license revenue recognized in the quarter ended December 31, 2012 was attributable to a decrease in license transaction bookings, partially offset by a higher percentage of license transaction bookings that were recognized as revenue upfront rather than ratably over the underlying contractual maintenance terms. ESM license revenue for the nine months ended December 31, 2012 decreased by $40.8 million, or 10.2%, from the prior year period, due to a $19.7 million decrease in the recognition of previously deferred license revenue and a $21.0 million reduction in upfront license revenue in connection with new transactions. The decrease in upfront license revenue recognized in the nine months ended December 31, 2012 was attributable to a decrease in license transaction bookings along with a lower percentage of such bookings that were recognized as revenue upfront rather than ratably over the underlying contractual maintenance terms.

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MSM license revenue was $101.0 million, or 43.5%, and $255.7 million, or 41.7%, of our total license revenue for the quarter and nine months ended December 31, 2012, and $91.3 million, or 40.6%, and $246.0 million, or 38.2%, of our total license revenue for the quarter and nine months ended December 31, 2011. MSM license revenue for the quarter ended December 31, 2012 increased by $9.7 million, or 10.6%, over the prior year quarter. This increase was due primarily to a $9.8 million increase in the amount of upfront license revenue recognized in connection with new transactions, while the recognition of previously deferred license revenue remained relatively flat. The increase in upfront license revenue recognized in the quarter ended December 31, 2012 was attributable to an increase in the percentage of license transaction bookings that were recognized as revenue upfront rather than ratably over the underlying contractual maintenance terms along with an increase in license transaction bookings. MSM license revenue for the nine months ended December 31, 2012 increased by $9.7 million, or 3.9%, over the prior year period, due to a $6.2 million increase in upfront license revenue in connection with new transactions and a $3.5 million increase in the recognition of previously deferred license revenue. The increase in upfront license revenue recognized in the nine months ended December 31, 2012 was attributable to a higher percentage of license transaction bookings that were recognized as revenue upfront rather than ratably over the underlying contractual maintenance terms, partially offset by a decrease in license transaction bookings.

Deferred License Revenue

For the quarters ended December 31, 2012 and 2011, our recognized license revenue was impacted by the changes in our deferred license revenue balance as follows:

	Quarter Ended						Nine Months Ended
	December 31,						December 31,
	2012			2011			2012			2011
	(In millions)
Deferrals of license revenue	$	94.9		$	107.6		$	224.0		$	281.6
Recognition from deferred license revenue		(98.1	)		(95.8	)		(290.8	)		(307.0	)
Impact of foreign currency exchange rate changes		(0.8	)		—			(2.3	)		(2.0	)
Net increase (decrease) in deferred license revenue	$	(4.0	)	$	11.8		$	(69.1	)	$	(27.4	)
Deferred license revenue balance at end of period	$	621.6		$	658.7		$	621.6		$	658.7

The primary reasons for license revenue deferrals include, but are not limited to, customer transactions that include products for which the maintenance pricing is based on a combination of undiscounted license list prices, net license fees or discounted license list prices, certain arrangements that include unlimited licensing rights, time-based licenses that are recognized over the term of the arrangement, customer transactions that include products with differing maintenance periods and other transactions for which we do not have or are not able to determine vendor-specific objective evidence of the fair value of the maintenance and/or professional services. The contract terms and conditions that result in deferral of revenue recognition for a given transaction result from arm’s length negotiations between us and our customers. We anticipate our transactions will continue to include such contract terms that result in deferral of the related license revenue as we expand our offerings to meet customers’ product, pricing and licensing needs.

Once it is determined that license revenue for a particular contract must be deferred, based on the contractual terms and application of revenue recognition policies to those terms, we recognize such license revenue either ratably over the term of the contract or when the revenue recognition criteria are met. Because of this, we generally know the timing of the subsequent recognition of license revenue at the time of deferral. Therefore, the amount of license revenue to be recognized from the deferred revenue balance in each future quarter is generally predictable. At December 31, 2012, the deferred license revenue balance was $621.6 million. Estimated future recognition from deferred license revenue at December 31, 2012 is (in millions):

Remainder of fiscal 2013	$	92.6
Fiscal 2014		260.7
Fiscal 2015 and thereafter		268.3
	$	621.6

24

Software Maintenance Revenue

Maintenance revenue for the quarter ended December 31, 2012 was $288.7 million, an increase of $16.4 million, or 6.0%, over the prior year quarter, due to an increase in ESM maintenance revenue, partially offset by a nominal decrease in MSM maintenance revenue, as discussed below. Maintenance revenue for the nine months ended December 31, 2012 was $853.0 million, an increase of $45.6 million, or 5.6%, over the prior year period, due to an increase in ESM maintenance revenue, partially offset by a decrease in MSM maintenance revenue, as discussed below. Maintenance revenue included revenue from our SaaS offerings, which is included in our ESM segment, of $6.8 million and $2.6 million for the quarters ended December 31, 2012 and 2011, respectively, and $18.7 million and $6.0 million for the nine months ended December 31, 2012 and 2011, respectively.

ESM maintenance revenue was $164.3 million, or 56.9%, and $482.8 million, or 56.6%, of our total maintenance revenue for the quarter and nine months ended December 31, 2012, respectively, and $147.7 million, or 54.2%, and $434.5 million, or 53.8%, of our total maintenance revenue for the quarter and nine months ended December 31, 2011, respectively. ESM maintenance revenue for the quarter ended December 31, 2012 increased by $16.6 million, or 11.2%, over the prior year quarter. ESM maintenance revenue for the nine months ended December 31, 2012 increased by $48.3 million, or 11.1%, over the prior year period. These increases were attributable primarily to an expanded installed ESM customer license base and increases in SaaS subscription revenue.

MSM maintenance revenue was $124.4 million, or 43.1%, and $370.2 million, or 43.4%, of our total maintenance revenue for the quarter and nine months ended December 31, 2012, respectively, and $124.6 million, or 45.8%, and $372.9 million, or 46.2%, of our total maintenance revenue for the quarter and nine months ended December 31, 2011, respectively. MSM maintenance revenue for the quarter ended December 31, 2012 decreased by $0.2 million, or 0.2%, from the prior year quarter. MSM maintenance revenue for the nine months ended December 31, 2012 decreased by $2.7 million, or 0.7%, from the prior year period.

Deferred Maintenance Revenue

At December 31, 2012, the deferred maintenance revenue balance was $1.1 billion. Estimated future recognition from deferred maintenance revenue at December 31, 2012 is (in millions):

Remainder of fiscal 2013	$	210.7
Fiscal 2014		503.4
Fiscal 2015 and thereafter		397.4
	$	1,111.5

25

Domestic vs. International Revenue

	Quarter Ended							Nine Months Ended
	December 31,							December 31,
	2012		2011		% Change			2012		2011		% Change
	(In millions)							(In millions)
License:
Domestic	$	101.0	$	107.4		(6.0	)%	$	282.7	$	314.9		(10.2	)%
International		131.3		117.6		11.6	%		330.4		329.3		0.3	%
Total license revenue		232.3		225.0		3.2	%		613.1		644.2		(4.8	)%
Maintenance:
Domestic		158.0		144.6		9.3	%		470.8		432.5		8.9	%
International		130.7		127.7		2.3	%		382.2		374.9		1.9	%
Total maintenance revenue		288.7		272.3		6.0	%		853.0		807.4		5.6	%
Professional services:
Domestic		26.4		25.7		2.7	%		77.4		77.1		0.4	%
International		32.8		25.2		30.2	%		89.3		78.6		13.6	%
Total professional services revenue		59.2		50.9		16.3	%		166.7		155.7		7.1	%
Total domestic revenue		285.4		277.7		2.8	%		830.9		824.5		0.8	%
Total international revenue		294.8		270.5		9.0	%		801.9		782.8		2.4	%
Total revenue	$	580.2	$	548.2		5.8	%	$	1,632.8	$	1,607.3		1.6	%

We estimate that foreign currency exchange rate fluctuations caused an approximate $3 million and $19 million decrease in our international revenue for the quarter and nine months ended December 31, 2012, respectively, as compared to the respective prior year periods.

Domestic License Revenue

Domestic license revenue was $101.0 million, or 43.5%, and $282.7 million, or 46.1%, of our total license revenue for the quarter and nine months ended December 31, 2012, respectively, and $107.4 million, or 47.7%, and $314.9 million, or 48.9%, of our total license revenue for the quarter and nine months ended December 31, 2011, respectively. Domestic license revenue for the quarter ended December 31, 2012 decreased by $6.4 million, or 6.0%, from the prior year quarter, due to a $4.4 million decrease in ESM license revenue and a $2.0 million decrease in MSM license revenue. Domestic license revenue for the nine months ended December 31, 2012 decreased by $32.2 million, or 10.2%, from the prior year period, due to a $27.5 million decrease in ESM license revenue and a $4.7 million decrease in MSM license revenue.

International License Revenue

International license revenue was $131.3 million, or 56.5%, and $330.4 million, or 53.9%, of our total license revenue for the quarter and nine months ended December 31, 2012, respectively, and $117.6 million or 52.3%, and $329.3 million, or 51.1%, of our total license revenue for the quarter and nine months ended December 31, 2011, respectively.

International license revenue for the quarter ended December 31, 2012 increased by $13.7 million, or 11.6%, over the prior year quarter, due to an $11.6 million increase in MSM license revenue and a $2.1 million increase in ESM license revenue. The MSM license revenue increase was attributable primarily to increases of $13.7 million and $1.2 million in our Europe, Middle East and Africa (EMEA) and Asia Pacific markets, respectively, partially offset by a decrease of $3.1 million in our Canada market. The ESM license revenue increase was attributable primarily to an $11.4 million increase in our Asia Pacific market, partially offset by decreases of $7.4 million and $1.9 million in our EMEA and Canada markets, respectively.

International license revenue for the nine months ended December 31, 2012 increased by $1.1 million, or 0.3%, over the prior year period, due to a $14.4 million increase in MSM license revenue, partially offset by a $13.3 million decrease in ESM license revenue. The MSM license revenue increase was attributable to increases of $11.2 million, $4.5 million and $2.3 million in our EMEA, Asia Pacific and Latin America markets, respectively, partially offset by a $3.6 million decrease in our Canada market. The ESM license revenue decrease was attributable to decreases of $16.5 million, $3.1 million and $1.7 million in our EMEA, Canada and Latin America markets, respectively, partially offset by an $8.0 million increase in our Asia Pacific market.

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Domestic Maintenance Revenue

Domestic maintenance revenue was $158.0 million, or 54.7%, and $470.8 million, or 55.2%, of our total maintenance revenue for the quarter and nine months ended December 31, 2012, respectively, and $144.6 million, or 53.1%, and $432.5 million, or 53.6%, of our total maintenance revenue for the quarter and nine months ended December 31, 2011, respectively. Domestic maintenance revenue for the quarter ended December 31, 2012 increased by $13.4 million, or 9.3%, over the prior year quarter, due to a $13.2 million increase in ESM maintenance revenue and a $0.2 million increase in MSM maintenance revenue. Domestic maintenance revenue for the nine months ended December 31, 2012 increased by $38.3 million, or 8.9%, over the prior year period, due to a $36.2 million increase in ESM maintenance revenue and a $2.1 million increase in MSM maintenance revenue.

International Maintenance Revenue

International maintenance revenue was $130.7 million, or 45.3%, and $382.2 million, or 44.8%, of our total maintenance revenue for the quarter and nine months ended December 31, 2012, respectively, and $127.7 million or 46.9%, and $374.9 million, or 46.4%, of our total maintenance revenue for the quarter and nine months ended December 31, 2011, respectively.

International maintenance revenue for the quarter ended December 31, 2012 increased by $3.0 million, or 2.3%, over the prior year quarter, due to a $3.4 million increase in ESM maintenance revenue, partially offset by a $0.4 million decrease in MSM maintenance revenue. The ESM maintenance revenue increase was attributable primarily to increases of $2.1 million and $1.0 million in our Asia Pacific and Canada markets, respectively.

International maintenance revenue for the nine months ended December 31, 2012 increased by $7.3 million, or 1.9%, over the prior year period, due to a $12.1 million increase in ESM maintenance revenue, partially offset by a $4.8 million decrease in MSM maintenance revenue. The ESM maintenance revenue increase was attributable primarily to increases of $5.3 million, $4.6 million and $2.7 million in our Asia Pacific, EMEA and Canada markets, respectively. The MSM maintenance revenue decrease was attributable primarily to decreases of $3.3 million and $2.4 million in our Latin America and EMEA markets, respectively.

Professional Services Revenue

Professional services revenue for the quarter ended December 31, 2012 increased by $8.3 million, or 16.3%, over the prior year quarter, which is reflective of a $7.6 million, or 30.2%, increase in international professional services revenue and a $0.7 million, or 2.7%, increase in domestic professional services revenue. This increase was attributable primarily to increases in implementation, consulting and education services revenue period over period. Professional services revenue for the nine months ended December 31, 2012 increased by $11.0 million, or 7.1%, over the prior year period, which is reflective of a $10.7 million, or 13.6%, increase in international professional services revenue and a $0.3 million, or 0.4%, increase in domestic professional services revenue. This increase was attributable primarily to increases in implementation and consulting revenue, partially offset by a decrease in education services revenue period over period.

Operating Expenses

	Quarter Ended							Nine Months Ended
	December 31,							December 31,
	2012		2011		% Change			2012		2011		% Change
	(In millions)							(In millions)
Cost of license revenue	$	41.1	$	38.6		6.5	%	$	120.8	$	116.2		4.0	%
Cost of maintenance revenue		51.3		46.2		11.0	%		155.1		139.5		11.2	%
Cost of professional services revenue		56.3		52.8		6.6	%		168.5		153.4		9.8	%
Selling and marketing expenses		175.8		154.1		14.1	%		503.7		452.3		11.4	%
Research and development expenses		41.9		38.5		8.8	%		116.5		121.5		(4.1	)%
General and administrative expenses		56.2		50.4		11.5	%		175.1		160.0		9.4	%
Amortization of intangible assets		10.0		5.8		72.4	%		33.5		26.5		26.4	%
Total operating expenses	$	432.6	$	386.4		12.0	%	$	1,273.2	$	1,169.4		8.9	%

We estimate that foreign currency exchange rate fluctuations caused an approximate $2 million and $25 million decrease in our international operating expenses for the quarter and nine months ended December 31, 2012, respectively, as compared to the respective prior year periods.

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Cost of License Revenue

Cost of license revenue consists primarily of the amortization of capitalized software costs for internally developed products, the amortization of acquired technology for products acquired through business combinations, license-based royalties to third parties and production and distribution costs for initial product licenses. For the quarter and nine months ended December 31, 2012, cost of license revenue was $41.1 million, or 7.1%, and $120.8 million, or 7.4%, of total revenue, respectively, and 17.7% and 19.7% of license revenue, respectively. For the quarter and nine months ended December 31, 2011, cost of license revenue was $38.6 million, or 7.0%, and $116.2 million, or 7.2%, of total revenue, respectively, and 17.2% and 18.0% of license revenue, respectively.

Cost of license revenue for the quarter ended December 31, 2012 increased by $2.5 million, or 6.5%, over the prior year quarter. This increase was attributable primarily to a $5.2 million increase in the amortization of capitalized software development costs, partially offset by a $3.2 million decrease in the amortization of acquired technology. Cost of license revenue for the nine months ended December 31, 2012 increased by $4.6 million, or 4.0%, over the prior year period. This increase was attributable to a $10.6 million increase in the amortization of capitalized software development costs and a $1.8 million increase in share-based compensation expense, partially offset by a $5.7 million decrease in the amortization of acquired technology and a $2.1 million net decrease in other expenses. The increases in the amortization of capitalized software development costs are related to increases in the amount of costs capitalized in prior periods related to development activities and represented an increased investment in software development. The decreases in amortization of acquired technology were attributable to a reduction in amortization associated with intangible assets acquired in connection with past acquisitions that became fully amortized, partially offset by an increase in amortization associated with intangible assets acquired in connection with our fiscal 2012 and 2013 acquisitions.

Cost of Maintenance Revenue

Cost of maintenance revenue consists primarily of the costs associated with customer support and research and development personnel that provide maintenance, enhancement and support services to our customers, as well as internal and third party infrastructure hosting and support costs associated with our SaaS offerings. For the quarter and nine months ended December 31, 2012, cost of maintenance revenue was $51.3 million, or 8.8%, and $155.1 million, or 9.5%, of total revenue, respectively, and 17.8% and 18.2% of maintenance revenue, respectively. For the quarter and nine months ended December 31, 2011, cost of maintenance revenue was $46.2 million, or 8.4%, and $139.5 million, or 8.7%, of total revenue, respectively, and 17.0% and 17.3% of maintenance revenue, respectively.

Cost of maintenance revenue for the quarter ended December 31, 2012 increased by $5.1 million, or 11.0%, over the prior year quarter. This increase was attributable to a $3.6 million increase in personnel costs and a $1.5 million net increase in other expenses.

Cost of maintenance revenue for the nine months ended December 31, 2012 increased by $15.6 million, or 11.2%, over the prior year period. This increase was attributable to a $7.8 million increase in personnel costs, a $3.3 million increase in third party SaaS hosting and support costs, a $1.3 million increase in share-based compensation expense, a $1.2 million increase in third party maintenance outsourcing costs and a $2.0 million net increase in other expenses.

Cost of Professional Services Revenue

Cost of professional services revenue consists primarily of salaries, related personnel costs and third party subcontracting fees associated with implementation, consulting and education services that we provide to our customers and the related infrastructure to support this business. For the quarter and nine months ended December 31, 2012, cost of professional services revenue was $56.3 million, or 9.7%, and $168.5 million, or 10.3%, of total revenue, respectively, and 95.1% and 101.1% of professional services revenue, respectively. For the quarter and nine months ended December 31, 2011, cost of professional services revenue was $52.8 million, or 9.6%, and $153.4 million, or 9.5%, of total revenue, respectively, and 103.7% and 98.5% of professional services revenue, respectively.

Cost of professional services revenue for the quarter ended December 31, 2012 increased by $3.5 million, or 6.6%, over the prior year quarter. This increase was attributable to a $2.3 million increase in personnel and related costs, due principally to an increase in professional services headcount, and a $1.2 million net increase in other expenses.

Cost of professional services revenue for the nine months ended December 31, 2012 increased by $15.1 million, or 9.8%, over the prior year period. This increase was attributable to a $13.2 million increase in personnel and related costs, due principally to an increase in professional services headcount, a $1.1 million increase in facilities expense and a $2.0 million net increase in other expenses, partially offset by a $1.2 million decrease in third party subcontracting fees.

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Selling and Marketing Expenses

Selling and marketing expenses consist primarily of salaries, related personnel costs, sales commissions and costs associated with advertising, marketing, industry trade shows and sales seminars. For the quarter and nine months ended December 31, 2012, selling and marketing expenses were $175.8 million, or 30.3%, and $503.7 million, or 30.8%, of total revenue, respectively. For the quarter and nine months ended December 31, 2011, selling and marketing expenses were $154.1 million, or 28.1%, and $452.3 million, or 28.1%, of total revenue, respectively.

Selling and marketing expenses for the quarter ended December 31, 2012 increased by $21.7 million, or 14.1%, over the prior year quarter. This increase was attributable to a $9.3 million increase in sales personnel and related costs, a $7.1 million increase in share-based compensation expense, both principally due to an increase in sales personnel headcount as well as sales retention efforts, a $2.7 million increase in bad debt expense, a $1.0 million increase in marketing campaign expenditures and a $1.6 million net increase in other expenses.

Selling and marketing expenses for the nine months ended December 31, 2012 increased by $51.4 million, or 11.4%, over the prior year period. This increase was attributable to a $25.0 million increase in sales personnel and related costs, a $15.9 million increase in share-based compensation expense, both principally due to an increase in sales personnel headcount as well as sales retention efforts, a $2.6 million increase in bad debt expense, a $2.5 million increase in marketing campaign expenditures, a $2.1 million increase in third party consulting fees, a $1.5 million increase in facilities expense and a $1.8 million net increase in other expenses.

Research and Development Expenses

Research and development expenses consist primarily of salaries and personnel costs and third party subcontracting fees related to software developers and development support personnel, including product management, software programmers, testing and quality assurance personnel and writers of technical documentation, such as product manuals and installation guides. These expenses also include computer hardware and software costs, telecommunications costs and personnel costs associated with our development and production labs. For the quarter and nine months ended December 31, 2012, research and development expenses were $41.9 million, or 7.2%, and $116.5 million, or 7.1%, of total revenue, respectively. For the quarter and nine months ended December 31, 2011, research and development expenses were $38.5 million, or 7.0%, and $121.5 million, or 7.6%, of total revenue, respectively.

Research and development expenses for the quarter ended December 31, 2012 increased by $3.4 million, or 8.8%, over the prior year quarter. This increase was attributable to a $4.5 million decrease in capitalized research and development costs related to software development projects, a $1.9 million increase in share-based compensation expense, a $1.6 million increase in third party contractor fees and a $1.6 million net increase in other expenses, partially offset by a $6.2 million decrease in personnel costs.

Research and development expenses for the nine months ended December 31, 2012 decreased by $5.0 million, or 4.1%, from the prior year period. This decrease was attributable to a $15.1 million decrease in personnel costs, partially offset by a $4.6 million increase in third party contractor fees, a $2.4 million decrease in capitalized research and development costs related to software development projects, a $1.8 million increase in share-based compensation expense and a $1.3 million net increase in other expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related personnel costs of executive management, finance and accounting, facilities management, legal and human resources. Other costs included in general and administrative expenses include fees paid for outside accounting and legal services, consulting projects and insurance. For the quarter and nine months ended December 31, 2012, general and administrative expenses were $56.2 million, or 9.7%, and $175.1 million, or 10.7%, of total revenue, respectively. For the quarter and nine months ended December 31, 2011, general and administrative expenses were $50.4 million, or 9.2%, and $160.0 million, or 10.0%, of total revenue, respectively.

General and administrative expenses for the quarter ended December 31, 2012 increased by $5.8 million, or 11.5%, over the prior year quarter. This increase was attributable primarily to a $4.8 million increase in personnel costs and a $2.2 million increase in professional fees, partially offset by a $1.3 million reduction in proxy contest costs.

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General and administrative expenses for the nine months ended December 31, 2012 increased by $15.1 million, or 9.4%, over the prior year period. This increase was attributable to a $6.9 million increase in personnel costs, a $4.9 million increase in proxy contest costs, a $4.9 million increase in other professional fees and a $1.7 million increase in share-based compensation expense, partially offset by a $3.3 million net decrease in other expenses.

Amortization of Intangible Assets

Amortization of intangible assets consists of the amortization of customer relationships and other intangible assets recorded in connection with our business combinations. For the quarter and nine months ended December 31, 2012, amortization of intangible assets was $10.0 million and $33.5 million, respectively. For the quarter and nine months ended December 31, 2011, amortization of intangible assets was $5.8 million and $26.5 million, respectively.

Amortization of intangible assets for the quarter ended December 31, 2012 increased by $4.2 million, or 72.4%, over the prior year period. This increase was attributable primarily to an accounting correction made during the prior year quarter, related to the foreign currency impacts of certain intangible assets associated with a fiscal 2000 business combination, which had the effect of decreasing intangible asset amortization expense by $4.5 million for the quarter ended December 31, 2011.

Amortization of intangible assets for the nine months ended December 31, 2012 increased by $7.0 million, or 26.4%, over the prior year period. This increase was attributable primarily to the accounting correction recorded in the prior year period, as noted above, which had the effect of decreasing intangible asset amortization expense by $4.5 million for the nine months ended December 31, 2011. The remaining increase is due to amortization associated with intangible assets acquired in connection with our fiscal 2012 and 2013 acquisitions, partially offset by a reduction in amortization associated with intangible assets acquired in connection with past acquisitions that became fully amortized.

Other Income (Loss), Net

Other income (loss), net, consists primarily of interest earned, realized gains and losses on investments, interest expense on our outstanding borrowings and foreign currency gains and losses. Other income (loss), net, for the quarter and nine months ended December 31, 2012, was a loss of $10.6 million and $25.4 million, respectively. Other income (loss), net, for the quarter and nine months ended December 31, 2011, was a loss of $3.5 million and $9.9 million, respectively.

The change in other income (loss), net for the quarter ended December 31, 2012 was attributable primarily to an $8.2 million increase in interest expense, primarily due to the issuance of our senior unsecured notes due February 2022 and December 2022 and the execution of our unsecured term loan due November 2015 (the Term Loan), partially offset by an increase in net gains on investments of $1.6 million.

The change in other income (loss), net for the nine months ended December 31, 2012 was attributable primarily to an $18.4 million increase in interest expense, primarily due to the issuance of our senior unsecured notes due February 2022 and December 2022 and the execution of our Term Loan, partially offset by an increase in net gains on investments of $4.0 million.

Income Taxes

Income tax expense was $30.7 million and $75.9 million for the quarter and nine months ended December 31, 2012, respectively, resulting in effective tax rates of 22.4% and 22.7%, respectively. Income tax expense was $38.4 million and $97.7 million for the quarter and nine months ended December 31, 2011, respectively, resulting in effective tax rates of 24.3% and 22.8%, respectively. Our effective tax rate generally differs from the U.S. federal statutory rate of 35% due to favorable tax rates associated with earnings from lower tax rate jurisdictions throughout the world and our policy of indefinitely reinvesting earnings from certain jurisdictions (primarily in Europe), as well as due to additional accruals, changes in estimates, releases and settlements with taxing authorities related to our uncertain tax positions and benefits associated with income attributable to both domestic production activities and the extraterritorial income exclusion. During the quarter and nine months ended December 31, 2012, the overall favorable effect of foreign tax rates on our effective tax rate was 9.6% and 9.4% of pre-tax earnings, respectively. During the quarter and nine months ended December 31, 2011, the overall favorable effect of foreign tax rates on our effective tax rate was 7.3% and 8.6% of pre-tax earnings, respectively. During the nine months ended December 31, 2011, we also recorded discrete net tax benefits of $6.2 million associated with tax authority settlements related to prior years’ tax matters which favorably impacted our effective tax rate by 1.4% of pre-tax earnings. Our effective tax rate could fluctuate on a quarterly basis and could be adversely affected to the extent forecasted earnings for the year are lower than anticipated in countries with lower statutory rates and higher than anticipated in countries with higher statutory rates.

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Non-GAAP Financial Measures and Reconciliations

In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The primary non-GAAP financial measures we focus on are: (i) non-GAAP operating income, (ii) non-GAAP net earnings, and (iii) non-GAAP diluted earnings per share. Each of these financial measures excludes the impact of certain items and therefore has not been calculated in accordance with GAAP. These non-GAAP financial measures exclude share-based compensation expense; the amortization of intangible assets; severance, exit costs and related charges; proxy contest costs; as well as the related tax impacts of these items; and certain discrete tax items. Each of the non-GAAP adjustments is described in more detail below. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is also included below.

We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our operating results because they exclude amounts that BMC management and the Board of Directors do not consider part of core operating results when assessing the performance of the organization. In addition, we have historically reported similar non-GAAP financial measures and we believe that inclusion of these non-GAAP financial measures provides consistency and comparability with past reports of financial results. Accordingly, we believe these non-GAAP financial measures are useful to investors in allowing for greater transparency of supplemental information used by management.

While we believe that these non-GAAP financial measures provide useful supplemental information, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Items such as share-based compensation expense; the amortization of intangible assets; severance, exit costs and related charges; proxy contest costs; as well as the related tax impacts of these items; and certain discrete tax items that are excluded from our non-GAAP financial measures can have a material impact on net earnings. As a result, these non-GAAP financial measures should not be considered in isolation from, or as a substitute for, net earnings, cash flow from operations or other measures of performance prepared in accordance with GAAP. We compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reconciling the non-GAAP financial measures to their most comparable GAAP financial measure. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures below.

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For a detailed explanation of the adjustments made to comparable GAAP financial measures, the reasons why management uses these measures and the usefulness of these measures, see items (1) – (6) below.

	Quarter Ended					Nine Months Ended
	December 31,					December 31,
	2012			2011		2012		2011
	(In millions)
Operating income:
GAAP operating income	$	147.6		$	161.8	$	359.6	$	437.9
Share-based compensation expense (1)		41.5			31.1		115.9		92.7
Amortization of intangible assets (2)		20.5			19.5		67.4		66.1
Severance, exit costs and related charges (3)		1.9			0.3		8.8		2.9
Proxy contest costs (4)		(1.3	)		—		4.9		—
Non-GAAP operating income	$	210.2		$	212.7	$	556.6	$	599.6

	Quarter Ended						Nine Months Ended
	December 31,						December 31,
	2012			2011			2012			2011
	(In millions)
Net earnings:
GAAP net earnings	$	106.3		$	119.9		$	258.3		$	330.3
Share-based compensation expense (1)		41.5			31.1			115.9			92.7
Amortization of intangible assets (2)		20.5			19.5			67.4			66.1
Severance, exit costs and related charges (3)		1.9			0.3			8.8			2.9
Proxy contest costs (4)		(1.3	)		—			4.9			—
Provision for income taxes on above pre-tax non-GAAP adjustments (5)		(18.4	)		(13.9	)		(58.1	)		(46.2	)
Certain discrete tax items (6)		—			—			—			(6.2	)
Non-GAAP net earnings	$	150.5		$	156.9		$	397.2		$	439.6

	Quarter Ended						Nine Months Ended
	December 31,						December 31,
	2012			2011			2012			2011
Diluted earnings per share*:
GAAP diluted earnings per share	$	0.70		$	0.71		$	1.63		$	1.88
Share-based compensation expense (1)		0.27			0.18			0.73			0.53
Amortization of intangible assets (2)		0.13			0.12			0.42			0.38
Severance, exit costs and related charges (3)		0.01			—			0.06			0.02
Proxy contest costs (4)		(0.01	)		—			0.03			—
Provision for income taxes on above pre-tax non-GAAP adjustments (5)		(0.12	)		(0.08	)		(0.37	)		(0.26	)
Certain discrete tax items (6)		—			—			—			(0.04	)
Non-GAAP diluted earnings per share*	$	0.99		$	0.93		$	2.50		$	2.51

* Non-GAAP diluted earnings per share is computed independently for each period presented. The sum of GAAP diluted earnings per share and non-GAAP adjustments per share may not equal non-GAAP diluted earnings per share due to rounding differences.

(1) Share-based compensation expense. Our non-GAAP financial measures exclude the compensation expenses required to be recorded by GAAP for equity awards to employees and directors. Management and the Board of Directors believe it is useful in evaluating corporate performance during a particular time period to review the supplemental non-GAAP financial measures, excluding expenses related to share-based compensation, because these costs are generally fixed at the time an award is granted, are then expensed over several years and generally cannot be changed or influenced by management once granted.

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(2) Amortization of intangible assets. Our non-GAAP financial measures exclude costs associated with the amortization of intangible assets, which are included in cost of license revenue and amortization of intangible assets in our condensed consolidated statements of comprehensive income. Management and the Board of Directors believe it is useful in evaluating corporate performance during a particular time period to review the supplemental non-GAAP financial measures, excluding amortization of intangible assets, because these costs are fixed at the time of an acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by management after the acquisition.

(3) Severance, exit costs and related charges. Our non-GAAP financial measures exclude severance, exit costs and related charges, and any subsequent changes in estimates, as they relate to our corporate restructuring and exit activities. Management and the Board of Directors believe it is useful in evaluating corporate performance during a particular time period to review the supplemental non-GAAP financial measures, excluding severance, exit costs and related charges, in order to provide comparability and consistency with historical operating results.

(4) Proxy contest costs. During the first quarter of fiscal 2013, the Company became engaged in a proxy contest initiated by a shareholder of the Company. We recorded a charge of approximately $6.2 million for unplanned proxy contest expenses during the first quarter of fiscal 2013, consisting primarily of outside financial advisory, legal, solicitation and consulting fees. During the third quarter of fiscal 2013, we renegotiated certain of these fees and recorded a corresponding reduction to proxy contest costs. Management and the Board of Directors believe it is useful in evaluating corporate performance during a particular time period to review the supplemental non-GAAP financial measures, excluding such costs, in order to provide comparability and consistency with historical operating results.

(5) Provision for income taxes on above pre-tax non-GAAP adjustments. Our non-GAAP financial measures exclude the tax impact of the above pre-tax non-GAAP adjustments. This amount is calculated using the tax rates of each country to which these pre-tax non-GAAP adjustments relate. Management excludes the non-GAAP adjustments on a net-of-tax basis in evaluating our performance. Therefore, we exclude the tax impact of these charges when presenting non-GAAP financial measures.

(6) Certain discrete tax items. Our non-GAAP financial measures exclude net tax benefits of $6.2 million for the nine months ended December 31, 2011 associated with tax authority settlements related to prior years’ tax matters. Management excludes the impact of these items in evaluating our performance. Therefore, we exclude these items when presenting non-GAAP financial measures.

Liquidity and Capital Resources

At December 31, 2012, we had $1.3 billion in cash, cash equivalents and investments, approximately 77% of which was held by our international subsidiaries and was largely generated from our international operations. Our international operations have generated $715.8 million of earnings that we have determined will be invested indefinitely in those operations. If such earnings were to be repatriated, we would incur a United States federal income tax liability that is not currently accrued in our financial statements. We also had outstanding letters of credit, performance bonds and similar instruments at December 31, 2012 of approximately $52.3 million primarily in support of performance obligations to various customers, but also related to facilities and other obligations.

At December 31, 2012 and March 31, 2012, we held auction rate securities with a par value of $21.7 million and $29.3 million, respectively, which were classified as available-for-sale. The total estimated fair value of our auction rate securities was $18.7 million and $26.9 million at December 31, 2012 and March 31, 2012, respectively. Our auction rate securities consist entirely of bonds issued by public agencies that are backed by student loans with at least a 97% guarantee by the federal government under the United States Department of Education’s Federal Family Education Loan Program. All of these bonds are currently rated investment grade by Moody’s or Standard and Poor’s. Auctions for these securities began failing in early 2008 and have continued to fail, resulting in our continuing to hold such securities and the issuers paying interest at the maximum contractual rates. We do not believe that any of the underlying issuers of these auction rate securities is presently at risk of default or that the underlying credit quality of the assets backing the auction rate security investments has been impacted by the reduced liquidity of these investments. Due to the illiquidity in the auction rate securities market caused by failed auctions, we estimated the fair value of these securities using internally developed models of the expected cash flows of the securities on a discounted basis. These models incorporate assumptions about the expected cash flows of the underlying student loans discounted at an estimate of the rate of return required by investors, which includes an adjustment to reflect a lack of liquidity in the market for these securities. Periodically, the issuers of certain of our auction rate securities have redeemed portions of our holdings at par value plus accrued interest. There were no redemptions during the quarter ended December 31, 2012. During the nine months ended December 31, 2012, issuers redeemed available-for-sale holdings of $7.6 million par value. During the quarter and nine months ended December 31, 2011, issuers redeemed available-for-sale holdings of $0.1 million and $0.5 million par value, respectively.

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In June 2008, we issued $300.0 million of senior unsecured notes due June 2018. Net proceeds to us after original issuance discount and issuance costs amounted to $295.6 million. These senior notes were issued at an original issuance discount of $1.8 million and bear interest at a rate of 7.25% per annum, payable semi-annually in June and December of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 50 basis points, plus accrued and unpaid interest.

In February 2012, we issued $500.0 million of senior unsecured notes due February 2022. Net proceeds to us after original issuance discount and issuance costs amounted to $493.3 million. These senior notes were issued at an original issuance discount of $2.7 million and bear interest at a rate of 4.25% per annum, payable semi-annually in February and August of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 35 basis points, plus accrued and unpaid interest.

In November 2012, we issued $300.0 million of senior unsecured notes due December 2022. Net proceeds to us after original issuance discount and issuance costs amounted to $295.1 million. These senior notes were issued at an original issuance discount of $2.3 million and bear interest at a rate of 4.5% per annum, payable semi-annually in June and December of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 45 basis points, plus accrued and unpaid interest.

In November 2012, we entered into a $200.0 million unsecured term loan agreement, due November 2015, with an institutional lender. Net proceeds to us after issuance costs amounted to $199.6 million. The Term Loan bears interest at a variable rate equal to the one-month LIBOR plus 1.625%, based upon our current debt rating, and is payable monthly. The Term Loan may be prepaid at our option any time after the second anniversary of the closing date at the principal amount plus a 0.50% premium. We concurrently entered into an interest rate swap agreement to hedge the variability of cash interest payments due to changes in the LIBOR benchmark interest rate, fixing our interest rate at 2.033%. The interest rate swap matures in November 2015 and has periodic interest settlements, both consistent with the terms of our Term Loan. We have designated the interest rate swap as a cash flow hedge of the variability of interest payments under the Term Loan due to changes in the LIBOR benchmark interest rate. At December 31, 2012, the fair value of our interest rate swap was a liability of $0.2 million and was recorded within other liabilities in our condensed consolidated balance sheets.

In November 2010, we entered into a credit agreement with certain institutional lenders providing for an unsecured revolving credit facility in an amount up to $400.0 million which is scheduled to expire on November 30, 2014 (the Credit Facility). Subject to certain conditions, at any time prior to maturity, we may invite existing and new lenders to increase the size of the Credit Facility up to a maximum of $600.0 million. The Credit Facility includes provisions for swing line loans of up to $25.0 million and standby letters of credit of up to $50.0 million. Revolving loans under the Credit Facility bear interest, at the Company’s option, at a rate equal to either (i) the base rate (as defined) plus a margin based on the credit ratings of our senior unsecured notes due June 2018, or (ii) the LIBOR rate (as defined) plus a margin based on the credit ratings of our senior notes due June 2018, for interest periods of one, two, three or six months. As of December 31, 2012 and through January 28, 2013, we have not borrowed any funds under the Credit Facility.

These credit facilities are subject to covenants limiting, among other things, the creation of liens securing indebtedness and sale-leaseback transactions.

We believe that our existing cash and investment balances, funds generated from operating activities and available credit under the Credit Facility will be sufficient to meet our working and other capital requirements for the foreseeable future. In the normal course of business, we evaluate the merits of acquiring technology or businesses, or establishing strategic relationships with or investing in these businesses. We may elect to use available cash and investments to fund such activities in the future. In the event additional needs for cash arise, we might find it advantageous to utilize third party financing sources based on factors such as our then available cash and its source (i.e., cash held in the United States versus international locations), the cost of financing and our internal cost of capital.

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We may from time to time seek to repurchase or retire securities, including outstanding borrowings and equity securities, in open market repurchases, unsolicited or solicited privately negotiated transactions or in such other manner as will comply with the provisions of the Exchange Act and the rules and regulations thereunder. Such repurchases or exchanges, if any, will depend on a number of factors, including, but not limited to, prevailing market conditions, our liquidity requirements and contractual restrictions, if applicable. The amount of repurchases, which is subject to management discretion, may be material and may change from period to period.

Our cash flows for the nine months ended December 31, 2012 and 2011 were:

	Nine Months Ended
	December 31,
	2012			2011
	(In millions)
Net cash provided by operating activities	$	417.9		$	587.4
Net cash used in investing activities		(187.9	)		(279.1	)
Net cash used in financing activities		(658.3	)		(627.4	)
Effect of exchange rate changes on cash and cash equivalents		(10.7	)		(22.3	)
Net change in cash and cash equivalents	$	(439.0	)	$	(341.4	)

Cash Flows from Operating Activities

Our primary method for funding operations and growth has been through cash flows generated from operating activities. Net cash provided by operating activities for the nine months ended December 31, 2012 decreased by $169.5 million from the prior year period, attributable primarily to a decrease in net income and the net impact of working capital changes.

Cash Flows from Investing Activities

Net cash used in investing activities for the nine months ended December 31, 2012 decreased by $91.2 million from the prior year period. This decrease was attributable primarily to a decrease in cash paid for acquisitions and increases in proceeds from maturities and sales of investments, partially offset by an increase in purchases of investments.

Cash Flows from Financing Activities

Net cash used in financing activities for the nine months ended December 31, 2012 increased by $30.9 million over the prior year period, attributable primarily to an increase in purchases of common stock, including accelerated share repurchase, partially offset by an increase in proceeds from borrowings.

Treasury Stock Purchases

Our Board of Directors has authorized a total of $6.0 billion to repurchase common stock under a common stock repurchase program, including a new $1 billion stock repurchase authorization approved in October 2012. On November 23, 2012, we entered into an accelerated share repurchase agreement (the ASR) to repurchase $750 million of our common stock under this program. Under the terms of the ASR, we paid $750 million to a financial institution and initially received 13.1 million shares of common stock, or 70% of the number of shares to be repurchased if such shares were repurchased at a price equal to the closing price of our common stock on November 23, 2012. The specific number of shares that we will ultimately repurchase under the ASR will be based generally on the daily discounted volume-weighted average share price of our common stock during the repurchase period, subject to other adjustments pursuant to the terms and conditions of the ASR. The ASR contemplates that the repurchase period will last no longer than approximately seven months from the execution of the agreement. At the completion of the repurchase period, we may be entitled to receive additional shares of our common stock from the financial institution or, under certain circumstances specified in the ASR, we may be required to deliver shares or make a cash payment (at our option) to the financial institution. Under the terms of the ASR, the maximum number of shares that could be delivered is 25.0 million.

The fair market value of the 13.1 million shares initially delivered was approximately $525.0 million and was included in treasury stock, reducing the weighted average number of basic and diluted common shares used to calculate EPS. The remaining $225.0 million was included in additional paid-in capital (APIC) and will be reclassified from APIC to treasury stock upon final settlement of the ASR. As of December 31, 2012, based on the daily discounted volume-weighted average price of our common stock since the effective date of the ASR, the financial institution would be required to deliver 5.6 million shares to us for the $225.0 million portion of the ASR that has not yet been settled. These shares were not included in the calculation of diluted weighted average common shares outstanding during the period because their effect was anti-dilutive.

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During the quarter and nine months ended December 31, 2012, we repurchased a total of 14.3 million and 22.6 million shares, respectively, valued at $575.0 million and $925.0 million, respectively, under the Board authorizations. At December 31, 2012, approximately $700.2 million remains authorized in the stock repurchase program, which does not have an expiration date. During the quarter and nine months ended December 31, 2012, we repurchased 0.4 million and 0.9 million shares, respectively, for $18.1 million and $38.1 million, respectively, to satisfy employee tax withholding obligations upon the vesting of share-based awards.

The repurchase of stock will continue to be funded primarily with existing cash as well as cash generated from domestic operations and, therefore, affects our overall domestic versus international liquidity balances. See PART II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds below for a monthly detail of treasury stock purchases for the quarter ended December 31, 2012.

Shareholder Rights Agreement

On May 12, 2012, our Board of Directors authorized and declared a dividend of one preferred share purchase right (a Right) for each outstanding common share through a shareholder rights agreement (the Rights Agreement). Each Right, once exercisable, represents the right to purchase one one-thousandth of a series B junior participating preferred share, par value $0.01, for $180, or an equivalent value of common shares determined at 50% of the then-current market price of BMC’s common stock, provided sufficient common shares are then unissued. The Rights become exercisable in the event any individual person or entity (including the ownership of their related affiliates) acquires 10% or more of the outstanding share capital of the Company without the approval of BMC’s Board of Directors, and until such time are inseparable from and trade with BMC’s common stock. The Rights have a de minimus fair value and are accounted for as a component of stockholders’ equity. The Rights Agreement expires May 11, 2013.

Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. On an on-going basis, we make and evaluate estimates and judgments, including those related to revenue recognition, capitalized software development costs, share-based compensation, goodwill and intangible assets, valuation of investments and accounting for income taxes. We base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances; the results of which form the basis for making judgments about amounts and timing of revenue and expenses, the carrying values of assets and the recorded amounts of liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and such estimates may change if the underlying conditions or assumptions change. We have discussed the development and selection of the critical accounting policies and estimates with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed our related disclosures. The critical accounting policies related to the estimates and judgments are discussed in our Annual Report on Form 10-K for the year ended March 31, 2012 under Management’s Discussion and Analysis of Financial Condition and Results of Operations. There have been no changes to our critical accounting policies and estimates during the nine months ended December 31, 2012.

New Accounting Pronouncements Not Yet Adopted

In December 2011, the Financial Accounting Standards Board issued guidance requiring new disclosures regarding balance sheet offsetting. This guidance requires entities to disclose the gross amounts of certain recognized financial assets and liabilities, to reconcile these amounts to the net positions recognized in the balance sheet and to provide qualitative disclosures about the rights of offset relating to these financial assets and liabilities. This new disclosure guidance is effective for us beginning with our first quarter of fiscal 2014.

Available Information

Our internet website address is http://www.bmc.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available through the investor relations page of our internet website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC). Our internet website and the information contained therein or connected thereto are not intended to be incorporated into this Quarterly Report on Form 10-Q.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to a variety of risks, including foreign currency exchange rate fluctuations, the impact of changes in interest rates on our investments and long-term borrowings and changes in market prices of our debt and equity securities. In the normal course of business, we employ established policies and procedures to manage these risks including the use of derivative instruments. There have been no material changes in our foreign currency exchange rate risk management strategy or our portfolio management strategy subsequent to March 31, 2012. However, in November 2012, we entered into an unsecured term loan agreement with variable-rate interest payments. In order to minimize the increased interest rate risk exposure, we entered into an interest rate swap agreement to hedge the variability of the cash interest payments. Overall, the risk profile of our market risk sensitive instruments remains substantially unchanged from the description in our Annual Report on Form 10-K for the year ended March 31, 2012.

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

Based on management’s evaluation (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO)), as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) are effective.

Changes in Internal Control over Financial Reporting

There was no change to our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 and Rule 15d-15 under the Exchange Act that occurred during our third fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no items that require disclosure under this item.

Item 1A. Risk Factors

There have been no material changes to the risk factors as presented in our Annual Report on Form 10-K for the year ended March 31, 2012 other than the update included below.

Our business could be negatively affected as a result of actions of shareholders.

Campaigns by stockholders to effect changes at publicly traded companies are sometimes led by investors seeking to increase short-term shareholder value through actions such as financial restructuring, increased debt, special dividends, stock repurchases or sales of assets or the entire company. In connection with our 2012 Annual Meeting of Stockholders, we were engaged in a contested election with an activist shareholder for seats on the Board of Directors, which ultimately resulted in a settlement. Future proxy contests, if any, could be costly and time-consuming, disrupt our operations and divert the attention of management and our employees from executing our strategic plan. Additionally, perceived uncertainties as to our future direction as a result of shareholder activism or changes to the composition of the Board of Directors may lead to the perception of a change in the direction of the business, instability or lack of continuity which may be exploited by our competitors, cause concern to our current or potential customers, and make it more difficult to attract and retain qualified personnel. If customers choose to delay, defer or reduce transactions with us or transact with our competitors instead of us because of any such issues, then our bookings, revenue, earnings and operating cash flows could be adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program (2)		Total Dollar Value of Shares Purchased as Part of a Publicly Announced Program (2)		Approximate Dollar Value of Shares that may yet be Purchased Under the Program (2)
October 1—31, 2012		1,104,699	$	42.09		1,034,483	$	43,492,979	$	1,456,767,133
November 1—30, 2012		13,385,210	$	40.21		13,222,958		531,543,642	$	700,223,491
December 1—31, 2012		205,685	$	40.76		—		—	$	700,223,491
Total		14,695,594	$	40.36		14,257,441	$	575,036,621	$	700,223,491

(1) Includes 438,153 shares of our common stock withheld by us to satisfy employee tax withholding obligations.

(2) Our Board of Directors has authorized a total of $6.0 billion to repurchase common stock under a common stock repurchase program, including a new $1 billion stock repurchase authorization approved in October 2012. On November 23, 2012, we entered into an accelerated share repurchase agreement to repurchase $750 million of our common stock under this program, and initially received 13.1 million shares of common stock, valued at $525.0 million. At December 31, 2012, approximately $700.2 million remains authorized for repurchase, after consideration of the $750 million paid under the accelerated share repurchase agreement, and the program does not have an expiration date.

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Item 6. Exhibits

(a) Exhibits.

10.41	Accelerated Share Repurchase Agreement dated November 23, 2012.
31.1	Certification of Chief Executive Officer of BMC Software, Inc. pursuant to Section 13a-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer of BMC Software, Inc. pursuant to Section 13a-14(a) of the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer of BMC Software, Inc. pursuant to Section 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer of BMC Software, Inc. pursuant to Section 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

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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.

	BMC SOFTWARE, INC.
January 28, 2013	By:	/s/ ROBERT E. BEAUCHAMP
		Robert E. Beauchamp
		Chairman of the Board, President and Chief Executive Officer
January 28, 2013	By:	/s/ STEPHEN B. SOLCHER
		Stephen B. Solcher
		Senior Vice President and Chief Financial Officer

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Exhibits

INDEX

10.41	Accelerated Share Repurchase Agreement dated November 23, 2012.
31.1	Certification of Chief Executive Officer of BMC Software, Inc. pursuant to Section 13a-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer of BMC Software, Inc. pursuant to Section 13a-14(a) of the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer of BMC Software, Inc. pursuant to Section 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer of BMC Software, Inc. pursuant to Section 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

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EX-10.41

Exhibit 10.41

	November 23, 2012
To:	BMC Software, Inc.
	2101 CityWest Boulevard
	Houston, Texas 77042-2827
	Attention:             Corey Walsh
	Vice President, Treasurer
	Telephone:           (713) 918-2385
	Facsimile:             (713) 918-1236
From	Morgan Stanley & Co. LLC
	1585 Broadway
	New York, NY 10036-8293
Re:	Issuer Forward Repurchase Transaction
	(Confirm Number: DP1:3192477)

Ladies and Gentlemen:

The purpose of this communication (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between Morgan Stanley & Co. LLC (“Dealer”) and BMC Software, Inc. (“Counterparty”) on the Trade Date specified below (the “Transaction”). The terms of the Transaction shall be set forth in this Confirmation. This Confirmation shall constitute a “Confirmation” as referred to in the ISDA Master Agreement specified below.

1. This Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (including the Annex thereto) (the “2006 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency between the 2006 Definitions and the Equity Definitions, the Equity Definitions will govern.

This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement (the “ISDA Form”) as if Dealer and Counterparty had executed an agreement in such form (without any Schedule but with (i) the election of an executed guarantee of Morgan Stanley dated as of the Trade Date in substantially the form attached hereto as Annex C as a Credit Support Document, (ii) the election of Morgan Stanley as a Credit Support Provider in relation to Party A and (iii) the additional elections set forth in this Confirmation). The Transaction shall be the only Transaction under the Agreement. Notwithstanding the foregoing, (i) no transaction now existing or hereafter entered into between Dealer and Counterparty shall constitute a Specified Transaction for the purpose of the Agreement, and (ii) the Transaction shall not constitute a Transaction (as such term is defined in the ISDA Form) under any other agreement, including any ISDA Master Agreement currently existing or entered into from time to time between Dealer or any of its affiliates and Counterparty.

All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any inconsistency between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern. The Transaction is a Share Forward Transaction within the meaning set forth in the Equity Definitions.

2. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms:
Trade Date:	November 23, 2012
Seller:	Dealer
Buyer:	Counterparty
Shares:	The common stock of Counterparty, par value USD 0.01 per share (Ticker Symbol: “BMC”)
Prepayment:	Applicable
Prepayment Amount:	As provided in Annex B to this Confirmation.
Prepayment Date:	The first Exchange Business Day following the Trade Date
Exchange:	Nasdaq Global Select Market
Related Exchange(s):	All Exchanges
Calculation Agent:	Dealer. Upon request by Counterparty, the Calculation Agent shall deliver, within five Exchange Business Days following the date of such request, a written explanation describing in reasonable detail any calculation or adjustment made hereunder by the Calculation Agent, including, where applicable, the methodology and data applied; provided, however, that nothing in this provision shall require the Calculation Agent to disclose any proprietary models or proprietary methodology or violate applicable laws, regulations or policies or contractual obligations in connection with delivery of such explanation.
Valuation Terms:
Averaging Dates:	Each of the consecutive Exchange Business Days commencing on, and including, the Exchange Business Day immediately following the Trade Date and ending on, and including, the Final Averaging Date.
Final Averaging Date:	The Scheduled Final Averaging Date; provided that Dealer shall have the right, in its absolute discretion, at any time and from time to time, to accelerate the Final Averaging Date, in whole or in part, to any date that is on or after the Scheduled Earliest Acceleration Date by written notice to Counterparty no later than 8:00 P.M., New York City time, on the Exchange Business Day immediately following the accelerated Final Averaging Date.
	In the case of any acceleration of the Final Averaging Date with respect to less than all of the then-current Prepayment Amount (such portion, the “Accelerated Portion”) (any such Valuation Date for which the Accelerated Portion is less than the full Prepayment Amount, a “Partial Acceleration Date”), the Transaction shall be considered two Transactions with terms identical to those of the original Transaction except that (1) the first such resulting Transaction (the “Accelerated Transaction”) shall have a Prepayment Amount equal to the Accelerated Portion and a number of Initial Shares, rounded to the nearest whole number, equal to the number of Initial Shares immediately preceding the Partial Acceleration Date multiplied by a fraction the numerator of which is the Accelerated Portion and the denominator of which is the Prepayment Amount immediately preceding the Partial Acceleration Date (the “Accelerated Initial Shares”), (2) the second such resulting transaction (the “Remaining Transaction”) shall have a Prepayment Amount equal to the Prepayment Amount immediately preceding the Partial Acceleration Date minus the Accelerated Portion and a number of Initial Shares equal to the Initial Shares immediately preceding the Partial Acceleration Date minus the Accelerated Initial Shares and (3) for the avoidance of doubt, following settlement of the Accelerated Transaction, the Remaining Transaction shall be treated for all purposes as the sole Transaction hereunder.

2

	The Dealer may only elect to declare a Partial Acceleration Date if the related Accelerated Portion is at least USD 150,000,000.
	In the case of a Partial Acceleration Date, the Dealer shall specify in its written notice to Counterparty designating a Valuation Date in connection with a Partial Acceleration Date the Accelerated Portion for such Valuation Date.
Scheduled Final Averaging Date:	As provided in Annex B to this Confirmation.
Scheduled Earliest Acceleration Date:	As provided in Annex B to this Confirmation.
Valuation Date:	The Final Averaging Date.
Averaging Date Disruption:	Modified Postponement, provided that notwithstanding anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Averaging Date, the Calculation Agent may, if appropriate in light of market conditions, regulatory considerations or otherwise, take any or all of the following actions: (i) postpone the Scheduled Final Averaging Date in accordance with Modified Postponement (as modified herein) and/or (ii) determine that such Averaging Date is a Disrupted Day only in part, in which case the Calculation Agent shall (x) determine the VWAP Price for such Disrupted Day based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event and (y) determine the Settlement Price based on an appropriately weighted average instead of the arithmetic average described under “Settlement Price” below. Any such adjustment will be made in good faith and in a commercially reasonable manner. Any Exchange Business Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be an Exchange Business Day; if a closure of the Exchange prior to its normal close of trading on any Exchange Business Day is scheduled following the date hereof, then such Exchange Business Day shall be deemed to be a Disrupted Day in full. Section 6.6(a) of the Equity Definitions is hereby amended by replacing the word “shall” in the fifth line thereof with the word “may,” and by deleting clause (i) thereof, and Section 6.7(c)(iii)(A) of the Equity Definitions is hereby amended by replacing the word “shall” in the sixth and eighth line thereof with the word “may.”
Market Disruption Events:	Section 6.3(a) of the Equity Definitions is hereby amended (A) by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” in clause (ii) thereof, and (B) by replacing the words “or (iii) an Early Closure.” therein with “(iii) an Early Closure, or (iv) a Regulatory Disruption.”
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
Regulatory Disruption:	Any event that Dealer, in good faith based on advice of counsel, determines makes it appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures for Dealer to refrain from or decrease any market activity in connection with the Transaction. Dealer shall notify Counterparty as soon as reasonably practicable that a Regulatory Disruption has occurred and the Averaging Dates affected by it.

3

Settlement Terms:
Initial Share Delivery:	On the Initial Share Delivery Date, Dealer shall deliver to Counterparty the Initial Shares.
Initial Share Delivery Date:	The first Exchange Business Day following the Trade Date.
Initial Shares:	As provided in Annex B to this Confirmation, as adjusted as described under “Final Averaging Date” above.
Settlement Date:	The date that falls one Settlement Cycle following the Valuation Date.
Settlement:	On the Settlement Date, Dealer shall deliver to Counterparty the Number of Shares to be Delivered, if a positive number. If the Number of Shares to be Delivered is a negative number, the Counterparty Settlement Provisions in Annex A shall apply.
Number of Shares to be Delivered:	A number of Shares equal to (a) the Prepayment Amount divided by (b) (i) the Settlement Price minus (ii) the Discount; provided that the Number of Shares to be Delivered as so determined shall be reduced by the number of Initial Shares.
Settlement Price:	The arithmetic average of the VWAP Prices for all Averaging Dates.
VWAP Price:	For any Averaging Date, the Rule 10b-18 dollar volume weighted average price per Share for such day based on transactions executed during such day, as reported on Bloomberg Page “BMC.Q <Equity> AQR SEC” (or any successor thereto) or, in the event such price is not so reported on such day for any reason or is manifestly incorrect, as reasonably determined by the Calculation Agent using a volume weighted method.
Discount:	As provided in Annex B to this Confirmation.
Excess Dividend Amount:	For the avoidance of doubt, all references to the Excess Dividend Amount in Section 9.2(a)(iii) of the Equity Definitions shall be deleted.
Other Applicable Provisions:	To the extent either party is obligated to deliver Shares hereunder, the provisions of the last sentence of Section 9.2 and Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Counterparty is the Issuer of the Shares) and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction.
Dividends:
Dividend:	Any dividend or distribution on the Shares other than any dividend or distribution of the type described in Sections 11.2(e)(i), 11.2(e)(ii)(A) or 11.2(e)(ii)(B) of the Equity Definitions.

4

Share Adjustments:
Method of Adjustment:	Calculation Agent Adjustment; provided that the declaration or payment of Dividends shall not be a Potential Adjustment Event.
	It shall constitute an additional Potential Adjustment Event if the Scheduled Final Averaging Date is postponed pursuant to “Averaging Date Disruption” above, in which case the Calculation Agent may, in its commercially reasonable discretion, adjust any relevant terms of the Transaction as the Calculation Agent determines appropriate to account for the economic effect on the Transaction of such postponement.
Extraordinary Events:
Consequences of Merger Events:
(a) Share-for-Share:	Modified Calculation Agent Adjustment
(b) Share-for-Other:	Cancellation and Payment
(c) Share-for-Combined:	Component Adjustment
Tender Offer:	Applicable
Consequences of Tender Offers:
(a) Share-for-Share:	Modified Calculation Agent Adjustment
(b) Share-for-Other:	Modified Calculation Agent Adjustment
(c) Share-for-Combined:	Modified Calculation Agent Adjustment
Composition of Combined Consideration:	Not Applicable
Consequences of Announcement Events:	Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the Equity Definitions; provided that references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall be replaced by references to “Announcement Date.” An Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article 12 of the Equity Definitions is applicable.
Announcement Event:	The occurrence of an Announcement Date in respect of a potential Acquisition Transaction (as defined in Section 9 below).
Announcement Date:	The date of the first public announcement in relation to an Acquisition Transaction, or any publicly announced change or amendment to the announcement giving rise to an Announcement Date.
Provisions applicable to Merger
Events and Tender Offers:	The consequences set forth opposite “Consequences of Merger Events” and “Consequences of Tender Offers” above shall apply regardless of whether a particular Merger Event or Tender Offer relates to an Announcement Date for which an adjustment has been made pursuant to Consequences of Announcement Events, without duplication of any such adjustment.
New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety (including the word “and” following such clause (i)) and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.

5

Nationalization, Insolvency or Delisting:	Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.
Additional Disruption Events:
Change in Law:	Applicable
Failure to Deliver:	Applicable
Insolvency Filing:	Applicable
Hedging Disruption:	Applicable
Increased Cost of Hedging:	Applicable
Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	As provided in Annex B to this Confirmation.
Increased Cost of Stock Borrow:	Applicable
Initial Stock Loan Rate:	As provided in Annex B to this Confirmation.
Hedging Party:	For all applicable Potential Adjustment Events and Extraordinary Events, Dealer
Determining Party:	For all Extraordinary Events, Dealer
Non-Reliance:	Applicable
Agreements and Acknowledgments Regarding Hedging Activities:	Applicable
Additional Acknowledgments:	Applicable
3.      Account Details:
(a) Account for payments to Counterparty:	To Be Provided By Counterparty.
(b) Account for payments to Dealer:	To Be Provided By Dealer.
4.      Offices:
(a) The Office of Counterparty for the Transaction is: Counterparty is not a Multibranch Party
(b) The Office of Dealer for the Transaction is: New York
5.      Notices: For purposes of this Confirmation:
(a) Address for notices or communications to Counterparty:
BMC Software, Inc.
2101 CityWest Boulevard
Houston, Texas 77042-2827

6

	Attention:	Corey Walsh
		Vice President, Treasurer
	Telephone:	(713) 918-2385
	Facsimile:	(713) 918-1236
(b) Address for notices or communications to Dealer:
	Morgan Stanley & Co.
	1221 Avenue of the Americas, 34th Floor
	New York, NY 10020
	Attention: Anthony Cicia
	Telephone: (212) 762-4828
	Facsimile: (212) 507-4338
	Email: Anthony.Cicia@morganstanley.com

6. Additional Provisions Relating to Transactions in the Shares.

(a) Counterparty acknowledges and agrees that the Initial Shares delivered on the Initial Share Delivery Date may be sold short to Counterparty. Counterparty further acknowledges and agrees that Dealer may, during (i) the period from the date hereof to the Valuation Date or, if later, the Scheduled Earliest Acceleration Date without regard to any adjustment thereof pursuant to “Special Provisions regarding Transaction Announcements” below, and (ii) the period from and including the first Settlement Valuation Date to and including the last Settlement Valuation Date, if any (together, the “Relevant Period”), purchase Shares in connection with the Transaction, which Shares may be used to cover all or a portion of such short sale or may be delivered to Counterparty. Such purchases will be conducted independently of Counterparty. The timing of such purchases by Dealer, the number of Shares purchased by Dealer on any day, the price paid per Share pursuant to such purchases and the manner in which such purchases are made, including without limitation whether such purchases are made on any securities exchange or privately, shall be within the absolute discretion of Dealer. It is the intent of the parties that the Transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the parties agree that this Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c), and Counterparty shall not take any action that results in the Transaction not so complying with such requirements. Without limiting the generality of the preceding sentence, Counterparty acknowledges and agrees that (A) Counterparty does not have, and shall not attempt to exercise, any influence over how, when or whether Dealer effects any purchases of Shares in connection with the Transaction, (B) during the period beginning on (but excluding) the date of this Confirmation and ending on (and including) the last day of the Relevant Period, neither Counterparty nor its officers or employees shall, directly or indirectly, communicate any information regarding Counterparty or the Shares to any employee of Dealer or its Affiliates responsible for trading the Shares and identified in writing to Counterparty in connection with the transactions contemplated hereby, (C) Counterparty is entering into the Transaction in good faith and not as part of a plan or scheme to evade compliance with federal securities laws including, without limitation, Rule 10b-5 promulgated under the Exchange Act and (D) Counterparty will not alter or deviate from this Confirmation or enter into or alter a corresponding hedging transaction with respect to the Shares. Counterparty also acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer or director of Counterparty is aware of any material nonpublic information regarding Counterparty or the Shares.

(b) Counterparty agrees that neither Counterparty nor any of its Affiliates or agents shall take any action that would cause Regulation M to be applicable to any purchases of Shares, or any security for which the Shares are a reference security (as defined in Regulation M), by Counterparty or any of its affiliated purchasers (as defined in Regulation M) during the Relevant Period unless Counterparty has delivered written notice to Dealer of the relevant restricted period (as defined in Regulation M) not later than the Scheduled Trading Day immediately preceding the first day of such restricted period, in which case an Additional Termination Event shall occur with the Transaction as the sole Affected Transaction and Counterparty as the sole Affected Party and Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement; Counterparty acknowledges that, in addition, delivery of any such notice may cause a Disrupted Day to occur pursuant to “Regulatory Disruption” above.

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(c) Counterparty shall, at least one day prior to the first day of the Relevant Period, notify Dealer of the total number of Shares purchased in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception contained in Rule 10b-18(b)(4) by or for Counterparty or any of its affiliated purchasers during each of the four calendar weeks preceding the first day of the Relevant Period and during the calendar week in which the first day of the Relevant Period occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated purchaser” each being used as defined in Rule 10b-18).

(d) During the Relevant Period, Counterparty shall (i) notify Dealer prior to the opening of trading in the Shares on any day on which Counterparty makes, or expects to be made, any public announcement (as defined in Rule 165(f) under the Securities Act of 1933, as amended (the “Securities Act”) of any merger, acquisition, or similar transaction involving a recapitalization relating to Counterparty (other than any such transaction in which the consideration consists solely of cash and there is no valuation period), (ii) promptly notify Dealer following any such announcement that such announcement has been made, and (iii) promptly deliver to Dealer following the making of any such announcement a certificate indicating (A) Counterparty’s average daily Rule 10b-18 purchases (as defined in Rule 10b-18) during the three full calendar months preceding the date of the announcement of such transaction and (B) Counterparty’s block purchases (as defined in Rule 10b-18) effected pursuant to paragraph (b)(4) of Rule 10b-18 during the three full calendar months preceding the date of the announcement of such transaction. In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders. Counterparty acknowledges that any such public announcement may result in a Regulatory Disruption and may cause the Relevant Period to be suspended. Accordingly, Counterparty acknowledges that its actions in relation to any such announcement or transaction must comply with the standards set forth in Section 6(a).

(e) Without the prior written consent of Dealer, Counterparty shall not, and shall use reasonable efforts to cause any “affiliated purchasers” (as defined in Rule 10b-18) not to, directly or indirectly (including, without limitation, by means of a cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable for Shares during the Relevant Period; provided that any purchases or deemed purchases of Shares made by Counterparty or any affiliated purchaser pursuant to any employee stock option plan, employee stock purchase plan, or any similar employee stock program now existing or hereafter entered into shall not be subject to this Section 6(e).

(f) Notwithstanding anything to the contrary in this Confirmation, the Agreement or the Definitions, under no circumstances will any Payment Obligation (as defined in Section 10(a) below) payable in connection with any early termination or cancellation of the Transaction include the effects of any Dividends declared or paid by Counterparty.

7. Representations, Warranties and Agreements.

(a) In addition to the representations, warranties and agreements in the Agreement and those contained elsewhere herein, Counterparty represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

(i) As of the Trade Date, and as of any date on which Counterparty gives to Dealer a Notice of Termination Cash Payment under (and as defined in) Section 10(a) below, (A) none of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(ii) Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Dealer is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

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(iii) The Shares are not subject to a third-party tender offer, and Counterparty is not engaged in a self-tender offer subject to Rule 13e-1 or Rule 13e-4 under the Exchange Act, as applicable.

(iv) Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request. Counterparty has publicly disclosed on October 31, 2012 its intention to institute a program for the acquisition of Shares.

(v) Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act, and will not engage in any other securities or derivative transaction to such ends.

(vi) Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(vii) On the Trade Date, the Prepayment Date, the Initial Share Delivery Date and the Settlement Date, Counterparty is not, or will not be, “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase the Shares hereunder in compliance with the corporate laws of the jurisdiction of its incorporation.

(viii) No state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares.

(ix) Counterparty understands no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any governmental agency.

(b) Each of Dealer and Counterparty agrees and represents that (i) it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended and (ii) the Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(c) Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act, by virtue of Section 4(2) thereof. Accordingly, Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof, and (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws.

(d) Counterparty agrees and acknowledges that Dealer is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge that it is the intent of the parties that (A) this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy Code and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code and a “payment or other transfer of property” within the meaning of Sections 362 and 546 of the Bankruptcy Code, and (B) Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 546(g), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code.

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8. Agreements and Acknowledgements Regarding Hedging.

Counterparty acknowledges and agrees that:

(a) During the Relevant Period, Dealer and its Affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction;

(b) Dealer and its Affiliates also may be active in the market for Shares other than in connection with hedging activities in relation to the Transaction;

(c) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Settlement Price and/or the VWAP Price; and

(d) Any market activities of Dealer and its Affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the Settlement Price and/or the VWAP Price, each in a manner that may be adverse to Counterparty.

9. Special Provisions regarding Transaction Announcements.

(a) If a Transaction Announcement occurs on or prior to the Settlement Date or the Cash Settlement Payment Date, as the case may be, then the Calculation Agent shall make such adjustments to the exercise, settlement, payment or any other terms of the Transaction as the Calculation Agent reasonably determines appropriate (including, for the avoidance of doubt, to the Discount), at such time or at multiple times as the Calculation Agent reasonably determines appropriate, to account for the economic effect on the Transaction of such Transaction Announcement (including adjustments to account for changes in volatility, expected dividends, stock loan rate and liquidity relevant to the Shares or to the Transaction). If a Transaction Announcement occurs after the Trade Date but prior to the Scheduled Earliest Acceleration Date, the Scheduled Earliest Acceleration Date shall be adjusted to be the date of such Transaction Announcement.

(b) “Transaction Announcement” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding to enter into an Acquisition Transaction, (iii) the announcement of an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, or (iv) any other announcement that in the reasonable judgment of the Calculation Agent may result in an Acquisition Transaction. For the avoidance of doubt, announcements as used in this definition of Transaction Announcement refer to any public announcement whether made by the Issuer or a third party.

“Acquisition Transaction” means (i) any Merger Event (and for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “20%” and to “50%” by “75%” and as if the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition were deleted) or Tender Offer, or any other transaction involving the merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 20% of the market capitalization of Counterparty and (v) any transaction in which Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).

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10. Other Provisions.

(a) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If either party would owe the other party any amount pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), any such Payment Obligation shall be satisfied by delivery of the Share Termination Alternative (as defined below) unless Counterparty, in its sole discretion, elects to satisfy or to require Dealer to satisfy, as the case may be, any such Payment Obligation, in whole or in part, by paying cash by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 9:30 A.M. New York City time on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable (“Notice of Termination Cash Payment”); provided that if Dealer would owe Counterparty the Payment Obligation and Counterparty has elected to require that Dealer satisfy such Payment Obligation by paying cash only in part, Dealer shall have the right, in its sole discretion, to elect to satisfy any portion of such Payment Obligation for which Counterparty has not so elected by delivering the Share Termination Alternative, notwithstanding Counterparty’s failure to elect; and provided further that Counterparty shall be deemed to have given to Dealer a Notice of Termination Cash Payment and elected for Dealer to pay cash in respect of any Payment Obligation in the event of (i) an Insolvency, a Nationalization, a Merger Event or a Tender Offer, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, which Event of Default or Termination Event resulted from an event or events within Counterparty’s control. Unless Counterparty has given (or is deemed to have given) a Notice of Termination Cash Payment to Dealer in respect of the entire Payment Obligation, the following provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Extraordinary Event, as applicable, with respect to the Payment Obligation or such portion of the Payment Obligation for which the Notice of Termination Cash Payment has not been elected or deemed elected (the “Applicable Portion”):

Share Termination Alternative:	Applicable and means, if delivery pursuant to the Share Termination Alternative is owed by Dealer, that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, or such later date as the Calculation Agent may reasonably determine (the “Share Termination Payment Date”), in satisfaction of the Payment Obligation or the Applicable Portion, as the case may be. If delivery pursuant to the Share Termination Alternative is owed by Counterparty, paragraphs 2 through 5 of Annex A shall apply as if such delivery were a settlement of the Transaction to which Net Share Settlement (as defined in Annex A) applied, the Cash Settlement Payment Date were the Early Termination Date, the Forward Cash Settlement Amount were zero (0) minus the Payment Obligation (or the Applicable Portion, as the case may be) owed by Counterparty, and “Shares” as used in Annex A were replaced by “Share Termination Delivery Units.”
Share Termination Delivery Property:	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation (or the Applicable Portion, as the case may be) divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.
Share Termination Unit Price:	The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to the parties at the time of notification of the Payment Obligation.

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Share Termination Delivery Unit:	In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, one Share or a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.
Failure to Deliver:	Applicable
Other applicable provisions:	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Counterparty is the issuer of the Shares or any portion of the Share Termination Delivery Units) and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”.

(b) Equity Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy. For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.

(c) [Reserved.]

(d) Staggered Settlement. If Dealer would owe Counterparty any Shares pursuant to the “Settlement Terms” above, Dealer may, by notice to Counterparty on or prior to the Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares deliverable on such Nominal Settlement Date on two or more dates (each, a “Staggered Settlement Date”) or at two or more times on the Nominal Settlement Date as follows: (i) in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) or delivery times and how it will allocate the Shares it is required to deliver under “Settlement Terms” above among the Staggered Settlement Dates or delivery times; and (ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date.

(e) Adjustments. For the avoidance of doubt, whenever the Calculation Agent is called upon to make an adjustment pursuant to the terms of this Confirmation or the Definitions to take into account the effect of an event, the Calculation Agent shall make such adjustment by reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable hedge position.

(f) Transfer and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, to (i) any of its Affiliates or (ii) any entities sponsored or organized by, or on behalf of or for the benefit of, Dealer, in each case with the consent of Counterparty, such consent not to be unreasonably withheld.

(g) Additional Termination Event. It shall constitute an Additional Termination Event with respect to which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party and Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement if:

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(i) at any time during the Relevant Period, the price per Share on the Exchange, as determined by the Calculation Agent, is at or below the Threshold Price (as provided in Annex B to this Confirmation); or

(ii) Counterparty declares or pays any Dividend (as defined above) to holders of record as of any date occurring during the period beginning on, and including, the Trade Date to, and including, the Settlement Date or, if the provisions of Annex A apply, the Cash Settlement Payment Date.

(h) Amendments to Equity Definitions. The following amendments shall be made to the Equity Definitions:

(i) Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “diluting or concentrative effect on the theoretical value of the relevant Shares” and replacing them with the words “material economic effect on the relevant Transaction”;

(ii) The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction or Share Forward Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has an economic effect on the Transaction and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and the portion of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of doubt, adjustments may be made to account solely for changes in volatility, stock loan rate or liquidity relative to the relevant Shares)”;

(iii) Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “diluting or concentrative effect on the theoretical value of the relevant Shares” and replacing them with the words “economic effect on the relevant Transaction”;

(iv) Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that issuer”;

(v) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and (B) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and

(vi) Section 12.9(b)(v) of the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) replacing in the penultimate sentence the words “either party” with “the Hedging Party” and (4) deleting clause (X) in the final sentence.

(i) No Netting and Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise.

(j) Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.

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(k) Designation by Dealer. Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Counterparty, Dealer (the “Designator”) may designate any of its Affiliates (the “Designee”) to deliver or take delivery, as the case may be, and otherwise perform its obligations to deliver, if any, or take delivery of, as the case may be, any such Shares or other securities in respect of the Transaction, and the Designee may assume such obligations, if any. Such designation shall not relieve the Designator of any of its obligations, if any, hereunder. Notwithstanding the previous sentence, if the Designee shall have performed the obligations, if any, of the Designator hereunder, then the Designator shall be discharged of its obligations, if any, to Counterparty to the extent of such performance.

(l) Termination Currency. The Termination Currency shall be USD.

(m) Waiver of Trial by Jury. EACH OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF DEALER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

(n) Governing Law; Jurisdiction. THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

(o) Suitability. Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million.

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Please confirm your agreement to be bound by the terms stated herein by executing the copy of this Confirmation enclosed for that purpose and returning it to us by mail or facsimile transmission to the address for Notices indicated above.

Yours sincerely,
MORGAN STANLEY & CO. LLC
By:	/s/ Serkan Savasoglu
Name:	Serkan Savasoglu
Title:	Managing Director

Confirmed as of the date first above written:
BMC SOFTWARE, INC.
By:	/s/ Stephen B. Solcher
Name:	Stephen B. Solcher
Title:	Senior Vice President, Chief Financial Officer

ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1. The following Counterparty Settlement Provisions shall apply to the extent indicated under the Confirmation:

Settlement Currency:	USD
Settlement Method Election:	Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to Dealer in writing on the date it notifies Dealer of its election that, as of such date, (A) none of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.
Electing Party:	Counterparty
Settlement Method
Election Date:	The date 10 Exchange Business Days prior to the Valuation Date; provided that if Dealer accelerates the Final Averaging Date pursuant to the proviso to the definition of Final Averaging Date, the Settlement Method Election Date shall be the second Exchange Business Day immediately following the Valuation Date.
Default Settlement Method:	Net Share Settlement
Special Settlement:	Either (i) a settlement to which this Annex A applies that follows the occurrence of a Transaction Announcement to which Section 9 of this Confirmation applies or (ii) any settlement to which paragraphs 2 through 5 of this Annex A apply that follows a termination or cancellation of the Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions to which Section 10(a) of this Confirmation applies.
Forward Cash Settlement
Amount:	The Number of Shares to be Delivered multiplied by the Settlement Valuation Price.
Settlement Valuation Price:	The arithmetic average of the VWAP Prices for all Settlement Valuation Dates, subject to Averaging Date Disruption, determined as if each Settlement Valuation Date were an Averaging Date (with Averaging Date Disruption applying as if the last Settlement Valuation Date were the Final Averaging Date and the Settlement Valuation Price were the Settlement Price).
Settlement Valuation Dates:	A number of Scheduled Trading Days selected by Dealer in its reasonable discretion, beginning on the Scheduled Trading Day immediately following the later of the Settlement Method Election Date and the Final Averaging Date.
Cash Settlement:	If Cash Settlement is applicable, then Counterparty shall pay to Dealer the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.
Cash Settlement Payment Date:	The date one Settlement Cycle following the last Settlement Valuation Date.
Net Share Settlement Procedures:	If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 5 below.

A-1

2. Net Share Settlement shall be made by delivery on the Settlement Date of a number of Shares equal to the product of 100% and the absolute value of the Number of Shares to be Delivered; provided that in the case of a Special Settlement, Net Share Settlement shall be made (i) by delivery on the Cash Settlement Payment Date (such date, the “Net Share Settlement Date”) of a number of Shares (the “Restricted Payment Shares”) with a value equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the realizable market value thereof to Dealer (which value shall take into account an illiquidity discount resulting from the fact that the Restricted Payment Shares will not be registered for resale), as determined by the Calculation Agent (the “Restricted Share Value”), and paragraph 3 of this Annex A shall apply to such Restricted Payment Shares, and (ii) by delivery of the Make-Whole Payment Shares as described in paragraph 4 below.

3. (a) All Restricted Payment Shares and Make-Whole Payment Shares shall be delivered to Dealer (or any affiliate of Dealer designated by Dealer) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof.

(b) As of or prior to the date of delivery, Dealer and any potential purchaser of any such Shares from Dealer (or any affiliate of Dealer designated by Dealer) identified by Dealer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements of equity securities of similar size (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them).

(c) As of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with Dealer (or any affiliate of Dealer designated by Dealer) in connection with the private placement of such Shares by Counterparty to Dealer (or any such affiliate) and the private resale of such Shares by Dealer (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance commercially reasonably satisfactory to Dealer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates, and shall provide for the payment by Counterparty of all reasonable fees and expenses in connection with such resale, including all reasonable fees and expenses of counsel for Dealer, and shall contain representations, warranties and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales.

(d) Counterparty shall not take or cause to be taken any action that would make unavailable either (i) the exemption set forth in Section 4(2) of the Securities Act for the sale of any Restricted Payment Shares or Make-Whole Payment Shares by Counterparty to Dealer or (ii) an exemption from the registration requirements of the Securities Act reasonably acceptable to Dealer for resales of Restricted Payment Shares and Make-Whole Payment Shares by the Dealer (or an affiliate of Dealer).

(e) Counterparty expressly agrees and acknowledges that the public disclosure of all material information relating to Counterparty is within Counterparty’s control.

A-2

4. If Restricted Payment Shares are delivered in accordance with paragraph 3 above, on the last Settlement Valuation Date, a balance (the “Settlement Balance”) shall be established with an initial balance equal to the absolute value of the Forward Cash Settlement Amount. Following the delivery of Restricted Payment Shares or any Make-Whole Payment Shares, Dealer shall sell all such Restricted Payment Shares or Make-Whole Payment Shares in a commercially reasonable manner. At the end of each Exchange Business Day upon which sales have been made, the Settlement Balance shall be reduced by an amount equal to the aggregate proceeds received by Dealer or its affiliate upon the sale of such Restricted Payment Shares or Make-Whole Payment Shares, less a customary and commercially reasonable private placement fee for private placements of common stock by similar issuers and of similar size. If, on any Exchange Business Day, all Restricted Payment Shares and Make-Whole Payment Shares have been sold and the Settlement Balance has not been reduced to zero, Counterparty shall at its sole discretion (i) deliver to Dealer or as directed by Dealer one Settlement Cycle following such Exchange Business Day an additional number of Shares (the “Make-Whole Payment Shares” and, together with the Restricted Payment Shares, the “Payment Shares”) equal to (x) the Settlement Balance as of such Exchange Business Day divided by (y) the Restricted Share Value of the Make-Whole Payment Shares as of such Exchange Business Day or (ii) promptly deliver to Dealer cash in an amount equal to the then remaining Settlement Balance. This provision shall be applied successively until either the Settlement Balance is reduced to zero or the aggregate number of Restricted Payment Shares and Make-Whole Payment Shares equals the Maximum Deliverable Number. If on any Exchange Business Day, Restricted Payment Shares and Make-Whole Payment Shares remain unsold and the Settlement Balance has been reduced to zero, Dealer shall promptly return such unsold Restricted Payment Shares or Make-Whole Payment Shares.

5. Notwithstanding the foregoing, in no event shall Counterparty be required to deliver more than the Maximum Deliverable Number of Shares hereunder. “Maximum Deliverable Number” means the number of Shares set forth as such in Annex B to this Confirmation. Counterparty represents and warrants to Dealer (which representation and warranty shall be deemed to be repeated on each day from the date hereof to the Settlement Date or, if Counterparty has elected to deliver any Payment Shares hereunder in connection with a Special Settlement, to the date on which resale of such Payment Shares is completed (the “Final Resale Date”)) that the Maximum Deliverable Number is equal to or less than the number of authorized but unissued Shares of Counterparty that are not reserved for future issuance in connection with transactions in such Shares (other than the transactions under this Confirmation) on the date of the determination of the Maximum Deliverable Number (such Shares, the “Available Shares”). In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable because the Maximum Deliverable Number is not equal to or less than the Available Shares (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually obligated to deliver, from time to time and only as the shares become available until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent that, (i) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the date hereof (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved or (iii) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions. Counterparty shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver such Shares thereafter.

A-3

ANNEX B

Prepayment Amount:	USD 750,000,000
Scheduled Final Averaging Date:	June 28, 2013 (or if such date is not an Exchange Business Day, the next following Exchange Business Day).
Scheduled Earliest Acceleration
Date:	[                ] (or if such date is not an Exchange Business Day, the next following Exchange Business Day).
Initial Shares:	13,062,951 Shares
Discount:	USD [                ]
Maximum Stock Loan Rate:	100 basis points per annum
Initial Stock Loan Rate:	25 basis points per annum
Threshold Price:	USD 15.00
Maximum Deliverable Number:	25,000,000 Shares

B-1

ANNEX C

1585 BROADWAY NEW YORK, NY 10036-8293

November 23, 2012

To:

BMC SOFTWARE INC.

2101 CITYWEST BLVD SUITE 2015A

HOUSTON, TX 77042-2827

Ladies and Gentlemen:

In consideration of BMC SOFTWARE INC. (hereinafter “Counterparty”) having entered into or entering into that certain trade dated as of November 23, 2012, Confirm Number DP1:3192477 with Morgan Stanley & Co. LLC (hereinafter “Obligor”) (such confirmation exchanged between the parties hereinafter the “Confirmation”), Morgan Stanley, a Delaware corporation (hereinafter “Guarantor”), hereby irrevocably and unconditionally guarantees to Counterparty, with effect from the date of the Confirmation, the due and punctual payment of all amounts payable by Obligor under the Confirmation when the same shall become due and payable, whether on scheduled payment dates, upon demand, upon declaration of termination or otherwise, in accordance with, and subject to, the terms of the Confirmation and giving effect to any applicable grace period. Upon failure of Obligor punctually to pay any such amounts, and upon written demand by Counterparty to Guarantor at its address set forth in the signature block of this guarantee (the “Guarantee”) (or to such other address as Guarantor may specify in writing), Guarantor agrees to pay or cause to be paid such amounts; provided that delay by Counterparty in giving such demand shall in no event affect Guarantor’s obligations under this Guarantee. This Guarantee is of payment and not of collection.

Guarantor hereby agrees that its obligations hereunder shall be continuing and unconditional and will not be discharged except by complete payment of the amounts payable under the Confirmation, irrespective of (1) any claim as to the Confirmation’s validity, regularity or enforceability or the lack of authority of Obligor to execute or deliver the Confirmation; or (2) any change in or amendment to the Confirmation; or (3) any waiver or consent by Counterparty with respect to any provisions thereof; or (4) the absence or existence of any action to enforce the Confirmation, or the recovery of any judgment against Obligor or of any action to enforce a judgment against Obligor under the Confirmation; or (5) the dissolution, winding up, liquidation or insolvency of Obligor, including any discharge of obligations therefrom; or (6) any similar circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor generally.

Guarantor hereby waives diligence, presentment, demand on Obligor for payment or otherwise (except as provided hereinabove), filing of claims, requirement of a prior proceeding against Obligor and protest or notice, except as provided for in the Confirmation with respect to amounts payable by Obligor. If at any time payment under the Confirmation is rescinded or must be otherwise restored or returned by Counterparty upon the insolvency, bankruptcy or reorganization of Obligor or Guarantor or otherwise, Guarantor’s obligations hereunder with respect to such payment shall be reinstated upon such restoration or return being made by Counterparty.

Guarantor represents to Counterparty, as of the date hereof, that:

1. it is duly organized and validly existing under the laws of the jurisdiction of its incorporation and has full power and legal right to execute and deliver this Guarantee and to perform the provisions of this Guarantee on its part to be performed;

2. its execution, delivery and performance of this Guarantee have been and remain duly authorized by all necessary corporate action and do not contravene any provision of its certificate of incorporation or by-laws or any law, regulation or contractual restriction binding on it or its assets;

C-1

3. all consents, authorizations, approvals and clearances (including, without limitation, any necessary exchange control approval) and notifications, reports and registrations requisite for its due execution, delivery and performance of this Guarantee have been obtained from or, as the case may be, filed with the relevant governmental authorities having jurisdiction and remain in full force and effect and all conditions thereof have been duly complied with and no other action by, and no notice to or filing with, any governmental authority having jurisdiction is required for such execution, delivery or performance; and

4. this Guarantee is its legal, valid and binding obligation enforceable against it in accordance with its terms except as enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ right or by general equity principles.

Each of the provisions contained in this Guarantee shall be severable and distinct from one another and if one or more of such provisions are now or hereafter becomes invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Guarantee shall not in any way be affected, prejudiced or impaired thereby.

By accepting this Guarantee and executing the Confirmation, Counterparty agrees that Guarantor shall be subrogated to all rights of Counterparty against Obligor in respect of any amounts paid by Guarantor pursuant to this Guarantee, provided that Guarantor shall be entitled to enforce or to receive any payment arising out of or based upon such right of subrogation only to the extent that it has paid all amounts payable by Obligor under the Confirmation.

This Guarantee shall expire on June 28, 2013, however, this guarantee may be terminated upon 15 days prior written notice to that effect actually received by Counterparty. Such expiration or termination shall not, however, affect or reduce Guarantor’s obligation hereunder for any liability of Obligor incurred with respect to transactions entered into by Obligor prior to such expiration.

This Guarantee shall be governed by and construed in accordance with the laws of the State of New York, without reference of its choice of law doctrine. All capitalized terms not otherwise defined herein shall have the respective meanings assigned to them in the Confirmation.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

C-2

MORGAN STANLEY
By:
Name:
Title:	Authorized Signatory
Address:	1585 Broadway
	New York, NY 10036
Attn:	Treasurer
Fax No.:	212-762-0337
Phone:	212-761-4000

Signature page to Morgan Stanley Guarantee issued to BMC SOFTWARE INC.

and dated November 23, 2012

C-3

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

OF BMC SOFTWARE, INC.

I, Robert E. Beauchamp, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BMC Software, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 28, 2013

By:	/s/ ROBERT E. BEAUCHAMP
	Robert E. Beauchamp (Chief Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

OF BMC SOFTWARE, INC.

I, Stephen B. Solcher, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BMC Software, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 28, 2013

By:	/s/ STEPHEN B. SOLCHER
	Stephen B. Solcher (Chief Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER

OF BMC SOFTWARE, INC.

PURSUANT TO 18 U.S.C. § 1350

Based on my knowledge, I, Robert E. Beauchamp, Chief Executive Officer of BMC Software, Inc. (the “Company”), hereby certify that the accompanying report on Form 10-Q for the period ending December 31, 2012 and filed with the Securities and Exchange Commission on the date hereof pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the “Report”) by the Company fully complies with the requirements of that section.

Based on my knowledge, I further certify that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ROBERT E. BEAUCHAMP

Robert E. Beauchamp

January 28, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION OF

CHIEF FINANCIAL OFFICER

OF BMC SOFTWARE, INC.

PURSUANT TO 18 U.S.C. § 1350

Based on my knowledge, I, Stephen B. Solcher, Chief Financial Officer of BMC Software, Inc. (the “Company”), hereby certify that the accompanying report on Form 10-Q for the period ending December 31, 2012 and filed with the Securities and Exchange Commission on the date hereof pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the “Report”) by the Company fully complies with the requirements of that section.

Based on my knowledge, I further certify that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ STEPHEN B. SOLCHER

Stephen B. Solcher

January 28, 2013

XML

Income Taxes (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Income Taxes [Line Items]
Provision for income taxes	$ 30.7	$ 38.4	$ 75.9	$ 97.7
Effective tax rate	22.40%	24.30%	22.70%	22.80%
United States federal statutory rate			35.00%
Overall effect of foreign tax rates on effective tax rate	9.60%	7.30%	9.40%	8.60%
Discrete tax benefits associated with tax authority settlement				$ 6.2
Prior years' impact of discrete net tax benefits on effective tax rate				1.40%

XML

Segment Reporting (Summary Of Segment Performance) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Revenue:
License	$ 232.3	$ 225.0	$ 613.1	$ 644.2
Maintenance	288.7	272.3	853.0	807.4
Professional services	59.2	50.9	166.7	155.7
Total revenue	580.2	548.2	1,632.8	1,607.3
Direct and allocated indirect segment operating expenses:	370.0	335.5	1,076.2	1,007.7
Segment operating income (loss)	210.2	212.7	556.6	599.6
Unallocated operating expenses	(62.6)	(50.9)	(197.0)	(161.7)
Other loss, net	(10.6)	(3.5)	(25.4)	(9.9)
Earnings before income taxes	137.0	158.3	334.2	428.0
Enterprise Service Management [Member]
Revenue:
License	131.3	133.7	357.4	398.2
Maintenance	164.3	147.7	482.8	434.5
Professional services	59.2	50.9	166.7	155.7
Total revenue	354.8	332.3	1,006.9	988.4
Direct and allocated indirect segment operating expenses:	284.2	256.1	832.8	763.8
Segment operating income (loss)	70.6	76.2	174.1	224.6
Enterprise Service Management [Member] | Solutions [Member]
Revenue:
License	131.3	133.7	357.4	398.2
Maintenance	164.3	147.7	482.8	434.5
Total revenue	295.6	281.4	840.2	832.7
Direct and allocated indirect segment operating expenses:	224.1	199.1	652.3	597.9
Segment operating income (loss)	71.5	82.3	187.9	234.8
Enterprise Service Management [Member] | Services [Member]
Revenue:
Professional services	59.2	50.9	166.7	155.7
Total revenue	59.2	50.9	166.7	155.7
Direct and allocated indirect segment operating expenses:	60.1	57.0	180.5	165.9
Segment operating income (loss)	(0.9)	(6.1)	(13.8)	(10.2)
Mainframe Service Management [Member]
Revenue:
License	101.0	91.3	255.7	246.0
Maintenance	124.4	124.6	370.2	372.9
Total revenue	225.4	215.9	625.9	618.9
Direct and allocated indirect segment operating expenses:	85.8	79.4	243.4	243.9
Segment operating income (loss)	$ 139.6	$ 136.5	$ 382.5	$ 375.0

XML

Long-Term Borrowings (Long-Term Borrowings) (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Senior Unsecured Notes Due June 2018 [Member]
Debt Instrument [Line Items]
Unamortized discount	$ 1.0	$ 1.1
Senior Unsecured Notes Due February 2022 [Member]
Debt Instrument [Line Items]
Unamortized discount	2.4	2.6
Senior Unsecured Notes Due December 2022 [Member]
Debt Instrument [Line Items]
Unamortized discount	$ 2.3

XML

Financial Instruments (Summary Of Activity In Level 3 Financial Instruments) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at the beginning of the period	$ 18.6		$ 26.9
Redemption and sales			(7.6)
Change in fair value included in other comprehensive income	(0.1)		(0.8)
Balance at the end of the period	18.5		18.5
Auction Rate Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at the beginning of the period	18.6	25.6	26.9	27.2
Redemption and sales		(0.1)	(7.6)	(0.5)
Change in fair value included in other comprehensive income	0.1	0.4	(0.6)	(0.8)
Balance at the end of the period	18.7	25.9	18.7	25.9
Interest Rate Swap [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at the beginning of the period
Redemption and sales
Change in fair value included in other comprehensive income	(0.2)		(0.2)
Balance at the end of the period	$ (0.2)		$ (0.2)

XML

Stockholder's Equity (Computation Of Basic And Diluted EPS) (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Basic earnings per share:
Net earnings allocated to common shares	$ 106.3	$ 119.9	$ 258.3	$ 330.3
Weighted average number of common shares outstanding	149.7	167.2	155.8	172.0
Basic earnings per share	$ 0.71	$ 0.72	$ 1.66	$ 1.92
Diluted earnings per share:
Net earnings allocated to common shares	$ 106.3	$ 119.9	$ 258.3	$ 330.3
Weighted average number of common shares outstanding	149.7	167.2	155.8	172.0
Incremental shares from assumed conversions of share-based awards	2.9	2.3	3.1	3.2
Adjusted weighted average number of common shares outstanding	152.6	169.5	158.9	175.2
Diluted earnings per share	$ 0.70	$ 0.71	$ 1.63	$ 1.88

XML

Long-Term Borrowings (Unsecured Term Loan Due November 2015) (Detail) (USD $) In Millions, unless otherwise specified	9 Months Ended	1 Months Ended
	Dec. 31, 2012	Nov. 30, 2012 Unsecured Debt [Member]	Dec. 31, 2012 Unsecured Debt [Member]
Proforma Debt Instrument [Line Items]
Unsecured term loan		$ 200.0	$ 200.0
Debt instrument, maturity date	November 2015	November 2015
Net proceeds after issuance costs		$ 199.6
Debt instrument variable rate		1.625%
Debt instrument description on variable rate		One-month LIBOR plus 1.625%
Fixed interest rate on interest rate swap		2.033%
Premium percentage on principal payment		0.50%

XML

Financial Instruments

9 Months Ended

Dec. 31, 2012

Financial Instruments

(3) Financial Instruments

We measure certain financial instruments at fair value on a recurring basis using the following valuation techniques:

(A) Market approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

(B) Income approach — Uses valuation techniques to convert future estimated cash flows to a single present amount based on current market expectations about those future amounts, using present value techniques.

The fair values of our financial instruments were determined using the following input levels and valuation techniques:

	Valuation	December 31, 2012								March 31, 2012
	Technique	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
		(In millions)
Assets
Cash equivalents
Money-market funds	A	$	26.2	$	—	$	—	$	26.2	$	769.3	$	—	$	—	$	769.3
United States Treasury securities	A		150.0		—		—		150.0		49.9		—		—		49.9
Short-term and long-term investments
United States Treasury securities	A		128.7		—		—		128.7		92.2		—		—		92.2
Auction rate securities	B		—		—		18.7		18.7		—		—		26.9		26.9
United States government agency bonds	A		—		15.4		—		15.4		—		—		—		—
Corporate bonds and commercial paper	A		—		12.0		—		12.0		—		—		—		—
Mutual funds	A		20.4		—		—		20.4		19.6		—		—		19.6
Foreign currency forward contracts	A		—		3.8		—		3.8		—		8.1		—		8.1
Total		$	325.3	$	31.2	$	18.7	$	375.2	$	931.0	$	8.1	$	26.9	$	966.0
Liabilities
Foreign currency forward contracts	A	$	—	$	2.3	$	—	$	2.3	$	—	$	0.6	$	—	$	0.6
Interest rate swap	B		—		—		0.2		0.2		—		—		—		—
Total		$	—	$	2.3	$	0.2	$	2.5	$	—	$	0.6	$	—	$	0.6

Level 1 classification is applied to any asset or liability that has a readily available quoted market price from an active market where there is significant transparency in the executed/quoted price.

Level 2 classification is applied to assets and liabilities that have evaluated prices where the data inputs to these valuations are observable either directly or indirectly, but do not represent quoted market prices from an active market.

Level 3 classification is applied to assets and liabilities when prices are not derived from existing market data and requires us to develop our own assumptions about how market participants would value the asset or liability.

The following table summarizes the activity in our Level 3 financial instruments for the quarters and nine months ended December 31, 2012 and 2011, respectively:

	Quarter Ended								Nine Months Ended
	December 31, 2012								December 31, 2012
	Auction Rate Securities		Interest Rate Swap			Total			Auction Rate Securities			Interest Rate Swap			Total
	(In millions)
Balance at the beginning of the period	$	18.6	$	—		$	18.6		$	26.9		$	—		$	26.9
Redemption and sales		—		—			—			(7.6	)		—			(7.6	)
Change in fair value included in other comprehensive income		0.1		(0.2	)		(0.1	)		(0.6	)		(0.2	)		(0.8	)
Balance at the end of the period	$	18.7	$	(0.2	)	$	18.5		$	18.7		$	(0.2	)	$	18.5

	Quarter Ended			Nine Months Ended
	December 31, 2011			December 31, 2011
	Auction Rate Securities
	(In millions)
Balance at the beginning of the period	$	25.6		$	27.2
Redemption and sales		(0.1	)		(0.5	)
Change in fair value included in other comprehensive income		0.4			(0.8	)
Balance at the end of the period	$	25.9		$	25.9

Investments

Our cash, cash equivalents and investments were comprised of the following:

	December 31, 2012						March 31, 2012
	Cash and Cash Equivalents		Short-term Investments		Long-term Investments		Cash and Cash Equivalents		Short-term Investments		Long-term Investments
	(In millions)
Measured at fair value:
Available-for-sale
United States Treasury securities	$	150.0	$	113.2	$	15.5	$	49.9	$	86.1	$	6.1
Auction rate securities		—		—		18.7		—		—		26.9
United States government agency bonds		—		5.0		10.4		—		—		—
Corporate bonds and commercial paper		—		5.4		6.6		—		—		—
Trading
Mutual funds		—		—		20.4		—		—		19.6
Total debt and equity investments measured at fair value		150.0		123.6		71.6		49.9		86.1		52.6
Cash on hand		829.7		—		—		632.6		—		—
Certificates of deposit		52.0		—		—		45.1		—		—
Money-market funds		26.2		—		—		769.3		—		—
Total cash, cash equivalents and investments	$	1,057.9	$	123.6	$	71.6	$	1,496.9	$	86.1	$	52.6
Amounts included in accumulated other comprehensive income from available-for-sale securities (pre-tax):
Unrealized losses*	$	—	$	—	$	3.0	$	—	$	—	$	2.4

* The unrealized losses on available-for-sale securities at December 31, 2012 and March 31, 2012 relate to the auction rate securities.

The following summarizes the underlying contractual maturities of our available-for-sale investments in debt securities at December 31, 2012:

			Fair
	Cost		Value
	(In millions)
Due in one year or less	$	273.6	$	273.6
Due between one and two years		32.5		32.5
Due after ten years		21.7		18.7
Total	$	327.8	$	324.8

At December 31, 2012 and March 31, 2012, we held auction rate securities with a par value of $21.7 million and $29.3 million, respectively, which were classified as available-for-sale. The total estimated fair value of our auction rate securities was $18.7 million and $26.9 million at December 31, 2012 and March 31, 2012, respectively. Our auction rate securities consist entirely of bonds issued by public agencies that are backed by student loans with at least a 97% guarantee by the federal government under the United States Department of Education’s Federal Family Education Loan Program. All of these bonds are currently rated investment grade by Moody’s or Standard and Poor’s. Auctions for these securities began failing in early 2008 and have continued to fail, resulting in our continuing to hold such securities and the issuers paying interest at the maximum contractual rates. We do not believe that any of the underlying issuers of these auction rate securities is presently at risk of default or that the underlying credit quality of the assets backing the auction rate security investments has been impacted by the reduced liquidity of these investments. Due to the illiquidity in the auction rate securities market caused by failed auctions, we estimated the fair value of these securities using internally developed models of the expected cash flows of the securities on a discounted basis. These models incorporate assumptions about the expected cash flows of the underlying student loans discounted at an estimate of the rate of return required by investors, which includes an adjustment to reflect a lack of liquidity in the market for these securities. The range of and weighted average discount rates used in our valuation models at December 31, 2012 were 3.6% to 4.1%, and 3.9%, respectively. Significant increases (decreases) in the discount rate used in the valuation would result in decreases (increases) in the fair value of the auction rate securities. Periodically, the issuers of certain of our auction rate securities have redeemed portions of our holdings at par value plus accrued interest. There were no redemptions during the quarter ended December 31, 2012. During the nine months ended December 31, 2012, issuers redeemed available-for-sale holdings of $7.6 million par value. During the quarter and nine months ended December 31, 2011, issuers redeemed available-for-sale holdings of $0.1 million and $0.5 million par value, respectively.

The unrealized loss on our available-for-sale auction rate securities, which had a fair value of $18.7 million at December 31, 2012, was $3.0 million and was recorded in accumulated other comprehensive income as we believe the decline in fair value of these auction rate securities is temporary. In making this determination, we primarily considered the financial condition and near-term prospects of the issuers, the probability scheduled cash flows will continue to be made and the likelihood we would be required to sell the investments before recovery of our cost basis. These available-for-sale auction rate securities have been in an unrealized loss position for greater than twelve months. Because of the uncertainty related to the timing of liquidity associated with these auction rate securities, these securities were classified as long-term investments at December 31, 2012 and March 31, 2012.

Derivative Financial Instruments

We operate globally and are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of business.

Our foreign currency exposures relate primarily to certain foreign currency denominated assets and liabilities, primarily non-U.S. dollar denominated accounts receivable, cash and intercompany balances held by U.S. dollar functional currency entities. To minimize the risk from changes in foreign currency exchange rates, we have established a program that utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. Gains or losses on our foreign currency exposures are offset by gains or losses on the foreign currency forward contracts entered into under this program. These foreign currency forward contracts generally have terms of one month or less and are generally entered into at the prevailing market exchange rate at the end of each month. We do not use foreign currency forward contracts for speculative purposes. While these foreign currency forward contracts are utilized to hedge foreign currency exposures, they are not formally designated as hedges for accounting purposes, and therefore, the changes in the fair values of these contracts are recognized currently in earnings. We record these foreign currency forward contracts at fair value as either assets or liabilities depending on their net settlement position with each respective counterparty at the balance sheet date.

The fair value of our outstanding foreign currency forward contracts that closed in a gain position at December 31, 2012 and March 31, 2012 was $3.8 million and $8.1 million, respectively, and was recorded within other current assets in our condensed consolidated balance sheets. The fair value of our outstanding foreign currency forward contracts that closed in a loss position at December 31, 2012 and March 31, 2012 was $2.3 million and $0.6 million, respectively, and was recorded within accrued liabilities in our condensed consolidated balance sheets. The notional amounts at contract exchange rates of our foreign currency forward contracts outstanding were:

	Notional Amount
	December 31,		March 31,
	2012		2012
	(In millions)
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)
Euro	$	180.9	$	214.2
Australian dollar		31.8		29.9
Chinese yuan renminbi		14.9		11.7
Swiss franc		9.5		6.8
Singapore dollar		6.4		3.8
Brazilian real		5.9		8.7
Danish krone		4.9		3.9
South Korean won		3.2		2.6
Norwegian krone		2.8		2.9
New Zealand dollar		2.5		3.4
British pound		—		19.2
Swedish krona		0.5		8.2
Mexican peso		—		3.2
Other		3.3		3.5
Total	$	266.6	$	322.0
Foreign Currency Forward Contracts (pay United States dollar/receive foreign currency)
Israeli shekel	$	165.0	$	158.2
Indian rupee		12.0		15.0
British pound		3.2		—
Other		0.7		4.8
Total	$	180.9	$	178.0

Our use of foreign currency forward contracts is intended to offset gains and losses associated with foreign currency exposures. Therefore, the notional amounts and currencies underlying our foreign currency forward contracts will fluctuate period to period as they are principally dependent on the balances and currency denomination of monetary assets and liabilities maintained by our global entities. The net effect of the foreign currency forward contracts for the quarter and nine months ended December 31, 2012, was a gain of $4.6 million and $9.2 million, respectively, which, after including gains and losses on our foreign currency exposures, resulted in a $0.1 million net loss and a $0.6 million net gain, respectively, recorded in interest and other income, net. The net effect of the foreign currency forward contracts for the quarter and nine months ended December 31, 2011, was a loss of $1.7 million and $7.6 million, respectively, which, after including gains and losses on our foreign currency exposures, resulted in net losses of $0.6 million and $2.5 million, respectively, recorded in interest and other income, net.

In November 2012, we entered into a $200.0 million unsecured term loan due November 2015 (the Term Loan) with variable-rate interest payments (see Note 4). To minimize the impact of changes in interest rates on our interest payments, in November 2012, we also entered into an interest rate swap agreement with a financial institution to swap variable-rate interest payments for fixed-rate interest payments on a notional amount of $200.0 million. The interest rate swap matures in November 2015 and has periodic interest settlements, both consistent with the terms of our Term Loan. We have designated the interest rate swap as a cash flow hedge of the variability of interest payments under the Term Loan due to changes in the LIBOR benchmark interest rate.

At December 31, 2012, the fair value of our interest rate swap was a liability of $0.2 million and was recorded within other liabilities in our condensed consolidated balance sheets, with the effective portion of the loss recognized in other comprehensive income. There was no hedge ineffectiveness during the quarter or nine months ended December 31, 2012. Periodic settlements on the interest rate swap are recorded as interest expense in the condensed consolidated statements of comprehensive income and are reflected within cash flows from operating activities in our condensed consolidated statements of cash flows.

We estimated the fair value of the interest rate swap using an internally developed model of the expected cash flows of the interest payments on a discounted basis. This model incorporates assumptions about the expected cash flows of the interest payments discounted at a market rate, which includes an adjustment to reflect our entity-specific risk. The discount rate used in our valuation model at December 31, 2012 equates to a weighted average of 1.5% and will fluctuate with the U.S. Treasury yield curve in future periods. Significant increases (decreases) in the interest rates used in the valuation would result in increases (decreases) in the fair value of the interest rate swap.

We are exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments, but we do not expect any counterparties to fail to meet their obligations given their high credit ratings. In addition, we diversify this risk across several counterparties and utilize netting agreements to mitigate the counterparty credit risk.

Trade Finance Receivables

A substantial portion of our trade finance receivables is transferred to financial institutions on a non-recourse basis. We utilize wholly-owned finance subsidiaries in these finance receivables transfers. These entities are consolidated into our financial position and results of operations. We account for such transfers as sales in accordance with applicable accounting rules pertaining to the transfer of financial assets and the sale of future revenue when we have surrendered control of such receivables (including determining that such assets have been isolated beyond our reach and the reach of our creditors) and when we do not have significant continuing involvement in the generation of cash flows due the financial institutions. During the quarter and nine months ended December 31, 2012, we transferred $43.2 million and $155.0 million, respectively, of such receivables through these programs. During the quarter and nine months ended December 31, 2011, we transferred $49.0 million and $208.0 million, respectively, of such receivables through these programs. Finance receivables are typically transferred within several months after origination and the outstanding principal balance at the time of transfer typically approximates fair value.

For those finance receivables not transferred, we evaluate the credit risk of finance receivables in our portfolio based on regional characteristics specific to the risk climate in each of our geographic operations as well as based on internal credit quality indicators for individual receivables. We evaluate the credit risk of finance receivables using an internal credit rating system based on whether an individual receivable meets specific internal criteria including counterparty credit rating and receivable maturity date and assign an internal credit rating of 1, 2 or 3, with a credit rating of 1 representing the best credit quality.

For all regions and credit categories, a finance receivable will be specifically reserved once deemed uncollectible. As of December 31, 2012, we held $112.4 million of finance receivables, net of $0.3 million of specific receivables which have been fully reserved.

At December 31, 2012, our finance receivables balance, net of allowance, by region and by class of internal credit rating was as follows:

	North America		EMEA		Asia Pacific		Latin America		Total
	(In millions)
Class 1	$	27.9	$	45.1	$	4.4	$	1.2	$	78.6
Class 2		3.2		19.0		6.9		3.9		33.0
Class 3		0.1		—		0.2		0.5		0.8
Balance at the end of the period	$	31.2	$	64.1	$	11.5	$	5.6	$	112.4

Other Financial Instruments

The carrying values and fair values of our debt instruments at December 31, 2012 and March 31, 2012 are as follows:

	December 31, 2012				March 31, 2012
	Carrying value		Fair value		Carrying value		Fair value
	(In millions)
Senior unsecured notes due June 2018 (Level 2)	$	299.0	$	363.5	$	298.9	$	368.4
Senior unsecured notes due February 2022 (Level 2)		497.6		521.3		497.4		506.6
Senior unsecured notes due December 2022 (Level 2)		297.7		308.0		—		—
Term Loan due November 2015 (Level 3)		200.0		200.3		—		—

The fair values of the senior unsecured notes due June 2018, February 2022 and December 2022 were determined using quoted market prices. We estimated the fair value of the Term Loan using an internally developed model of the expected cash flows of the principal and interest payments on a discounted basis. This model incorporates assumptions about the expected cash flows of the principal and interest payments discounted at a market rate, which includes an adjustment to reflect our entity-specific risk. The discount rate used in our valuation model at December 31, 2012 equates to a weighted average of 2.0% and will fluctuate with the U.S. Treasury yield curve in future periods. Significant increases in the entity-specific risk used in the valuation would result in decreases in the fair value of the Term Loan.

The carrying values of all other financial instruments, consisting primarily of trade and finance receivables, accounts payable and other borrowings, approximate their respective fair values.

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Stockholders' Equity (Narrative) (Detail) (USD $) Share data in Millions, except Per Share data, unless otherwise specified	1 Months Ended		3 Months Ended		9 Months Ended						1 Months Ended
	Nov. 30, 2012	Oct. 31, 2012	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Nov. 23, 2012	May 12, 2012	Mar. 31, 2012	Dec. 31, 2012 Treasury Stock [Member]	May 31, 2012 Series B Preferred Stock [Member]	May 12, 2012 Series B Preferred Stock [Member]	Mar. 31, 2012 Series B Preferred Stock [Member]
Conversion of Stock [Line Items]
Weighted average potential anti-dilutive common shares excluded from the calculation of diluted EPS			0.6	4.9	1.2	1.8
Amount authorized by Board of Directors to repurchase common stock					$ 6,000,000,000
Stock repurchase program additional authorized amount		1,000,000,000
Accelerated share repurchase agreement expected contract value	750,000,000
Accelerated share repurchase agreement amount paid	750,000,000
Percentage of shares repurchased	70.00%
Shares of common stock received	13,100,000
Stock repurchase program, period					7 months
Maximum number of shares that could be delivered under the terms of ASR							25.0
Fair value of treasury stock			3,878,600,000		3,878,600,000				3,013,400,000	525,000,000
Additional paid-in capital			1,029,500,000		1,029,500,000				1,179,500,000	225,000,000
Number of shares required to be delivered from unsettled ASR					5.6
Shares repurchased, shares			14.3		22.6
Shares repurchased, amount			575,000,000		925,000,000
Remaining authorized amount in stock repurchase program			700,200,000
Shares repurchased to satisfy employee tax withholding obligations, shares			0.4		0.9
Repurchases of stock to satisfy employee tax withholding obligations			$ 18,100,000		$ 38,100,000	$ 31,700,000
Conversion rights exercisable by common share holders											One one-thousandth of a series B junior participating preferred share
Preferred stock, par value			$ 0.01		$ 0.01				$ 0.01				$ 0.01
Preferred stock, exercisable price												180
Percentage of market price used to calculate exercise price of rights												50.00%
Class of warrant or right ownership requirement description for exercise of rights								10% or more
Shareholder rights agreement expiration date								May 11, 2013

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Financial Instruments (Notional Amounts At Contract Exchange Rates Of Foreign Currency Forward Contracts) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	$ 266.6	$ 322.0
Foreign Currency Forward Contracts (pay United States dollar/receive foreign currency)	180.9	178.0
Euro [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	180.9	214.2
Australian Dollar [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	31.8	29.9
Chinese Yuan Renminbi [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	14.9	11.7
Swiss Franc [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	9.5	6.8
Singapore Dollar [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	6.4	3.8
Brazilian Real [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	5.9	8.7
Danish Krone [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	4.9	3.9
South Korean Won [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	3.2	2.6
Norwegian Krone [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	2.8	2.9
New Zealand Dollar [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	2.5	3.4
British Pound [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)		19.2
Foreign Currency Forward Contracts (pay United States dollar/receive foreign currency)	3.2
Swedish krona [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	0.5	8.2
Mexican Peso [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)		3.2
Other [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)	3.3	3.5
Foreign Currency Forward Contracts (pay United States dollar/receive foreign currency)	0.7	4.8
Israeli Shekel [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (pay United States dollar/receive foreign currency)	165.0	158.2
Indian Rupee [Member]
Derivative [Line Items]
Foreign Currency Forward Contracts (pay United States dollar/receive foreign currency)	$ 12.0	$ 15.0

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Financial Instruments (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Mar. 31, 2012
Guarantee by the federal government for bonds issued by public agencies			97.00%		97.00%
Discount rate used in internally developed models, minimum			3.60%
Discount rate used in internally developed models, maximum			4.10%
Discount rate used in internally developed models, weighted average			3.90%
Redemption of available-for-sale holdings by issuers of auction rate securities	$ 0	$ 0.1	$ 7.6	$ 0.5
Unrealized loss on available-for-sale auction rate securities	0.1	0.3	(0.4)	(0.6)
Foreign currency forward contracts that closed in a gain position	3.8		3.8		8.1
Foreign currency forward contracts that closed in a loss position	2.3		2.3		0.6
Interest rate swap maturity date			November 2015
Debt instrument, maturity date			November 2015
Interest rate swap liability	0.2		0.2
Hedge ineffectiveness	0		0
Trade finance receivables transferred to financial institutions on a non-recourse basis	43.2	49.0	155.0	208.0
Finance receivables	112.4		112.4
Specific finance receivables fully reserved	0.3		0.3
Unsecured Term Loan Due November 2015 [Member]
Unsecured term loan	200.0		200.0
Foreign Currency Forward Exchange Contract [Member]
Effect of foreign currency forward contracts	4.6	(1.7)	9.2	(7.6)
Net effect of foreign currency forward contracts after including gains and losses on foreign currency exposure	(0.1)	(0.6)	0.6	(2.5)
Auction Rate Securities [Member]
Par value of Auction rate securities held Available-for-sale securities in auction rate securities held			21.7		29.3
Fair value of available-for-sale auction rate securities	18.7		18.7		26.9
Unrealized loss on available-for-sale auction rate securities			3.0
Interest Rate Swap [Member]
Discount rate used in internally developed models, weighted average			1.50%
Derivative notional amount	$ 200.0		$ 200.0
Term Loan [Member]
Discount rate used in internally developed models, weighted average			2.00%

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Guarantees And Contingencies (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012
Contingencies And Commitments [Line Items]
Outstanding letters of credit, performance bonds and similar instruments	$ 52.3
Maximum estimated charge from litigation of foreign tax dispute	$ 11

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Financial Instruments (Finance Receivables Balance, Net Of Allowance, By Region And By Class Of Internal Credit Rating) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	$ 112.4
Class 1 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	78.6
Class 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	33.0
Class 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	0.8
North America [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	31.2
North America [Member] | Class 1 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	27.9
North America [Member] | Class 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	3.2
North America [Member] | Class 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	0.1
EMEA [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	64.1
EMEA [Member] | Class 1 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	45.1
EMEA [Member] | Class 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	19.0
EMEA [Member] | Class 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance
Asia Pacific [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	11.5
Asia Pacific [Member] | Class 1 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	4.4
Asia Pacific [Member] | Class 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	6.9
Asia Pacific [Member] | Class 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	0.2
Latin America [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	5.6
Latin America [Member] | Class 1 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	1.2
Latin America [Member] | Class 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	3.9
Latin America [Member] | Class 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance Receivables Balance	$ 0.5

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Financial Instruments - (Carrying Values And Fair Values Of Debt Instruments) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Senior Unsecured Notes Due June 2018 (Level 2) [Member]
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items]
Senior unsecured notes due, Carrying value	$ 299.0	$ 298.9
Senior unsecured notes due, Fair value	363.5	368.4
Senior Unsecured Notes Due February 2022 (Level 2) [Member]
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items]
Senior unsecured notes due, Carrying value	497.6	497.4
Senior unsecured notes due, Fair value	521.3	506.6
Senior Unsecured Notes Due December 2022 (Level 2) [Member]
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items]
Senior unsecured notes due, Carrying value	297.7
Senior unsecured notes due, Fair value	308.0
Term Loan Due November 2015 (Level 3) [Member]
Schedule Of Carrying Values And Estimated Fair Values Of Debt Instruments [Line Items]
Senior unsecured notes due, Carrying value	200.0
Senior unsecured notes due, Fair value	$ 200.3

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Business Combinations

9 Months Ended

Dec. 31, 2012

Business Combinations

(2) Business Combinations

During the nine months ended December 31, 2012, we completed three business combinations for combined purchase consideration of $19.5 million. The purchase consideration was allocated to acquired assets and assumed liabilities consisting primarily of $19.2 million of acquired technology, with weighted average economic lives of approximately three years, in addition to other tangible assets and liabilities. These acquisitions resulted in a preliminary allocation of $2.7 million to goodwill assigned to our Enterprise Service Management-Solutions segment. We are in the process of finalizing our assessment of the fair value of acquired assets and assumed liabilities, primarily as it relates to tax attributes, and will adjust the purchase price allocations when they are finalized.

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Long-Term Borrowings (Long-Term Borrowings) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2012 Senior Unsecured Notes Due June 2018 [Member]	Mar. 31, 2012 Senior Unsecured Notes Due June 2018 [Member]	Dec. 31, 2012 Senior Unsecured Notes Due February 2022 [Member]	Mar. 31, 2012 Senior Unsecured Notes Due February 2022 [Member]	Dec. 31, 2012 Senior Unsecured Notes Due December 2022 [Member]	Dec. 31, 2012 Unsecured Debt [Member]	Nov. 30, 2012 Unsecured Debt [Member]
Debt Instrument [Line Items]
Senior unsecured notes due			$ 299.0	$ 298.9	$ 497.6	$ 497.4	$ 297.7
Term loan due								200.0	200.0
Capital leases and other obligations	38.0	46.3
Total	1,332.3	842.6
Less current maturities of capital leases and other obligations (included in accrued liabilities)	(23.7)	(21.0)
Long-term borrowings	$ 1,308.6	$ 821.6

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Share-Based Compensation (Narrative) (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended	9 Months Ended
	Dec. 31, 2012	Dec. 31, 2012
Vesting period	Annual increments over one or three years	50% increments over two- and three-year periods upon achievement of certain targets related to our relative shareholder
Total unrecognized compensation costs related to stock options, nonvested stock and nonvested stock units	$ 264.1	$ 264.1
Weighted-average period (in years) to recognize total unrecognized compensation costs related to stock options, nonvested stock and nonvested stock units		2 years
Stock Options [Member]
Issuance of shares related to exercises of stock options	0.4	1.4
Nonvested Stock Units [Member]
Issuance of shares related to vesting of nonvested stock units	1.3	2.8
Time Based And Market Based Nonvested Stock [Member]
Nonvested stock units granted	2.2	4.2
Granted, weighted average grant date fair value	$ 40.44	$ 41.96

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Current assets:
Cash and cash equivalents	$ 1,057.9	$ 1,496.9
Short-term investments	123.6	86.1
Trade accounts receivable, net	265.8	296.7
Trade finance receivables, net	69.5	108.0
Deferred tax assets	79.8	71.0
Other current assets	116.9	122.2
Total current assets	1,713.5	2,180.9
Property and equipment, net	89.6	87.8
Software development costs, net	268.0	244.7
Long-term investments	71.6	52.6
Long-term trade finance receivables, net	42.9	80.1
Intangible assets, net	209.3	257.5
Goodwill	1,720.6	1,720.6
Other long-term assets	213.3	240.2
Total assets	4,328.8	4,864.4
Current liabilities:
Trade accounts payable	38.1	31.5
Finance payables	10.7	1.2
Accrued liabilities	270.4	321.4
Deferred revenue	979.2	1,059.5
Total current liabilities	1,298.4	1,413.6
Long-term deferred revenue	796.9	934.4
Long-term borrowings	1,308.6	821.6
Other long-term liabilities	244.8	249.0
Total liabilities	3,648.7	3,418.6
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $.01 par value, 1.0 shares authorized, none issued and outstanding
Common stock, $.01 par value, 600.0 shares authorized, 249.1 shares issued	2.5	2.5
Additional paid-in capital	1,029.5	1,179.5
Retained earnings	3,503.4	3,245.3
Accumulated other comprehensive income	23.3	31.9
Total stockholders' equity before treasury stock	4,558.7	4,459.2
Treasury stock, at cost (106.4 and 87.4 shares)	(3,878.6)	(3,013.4)
Total stockholders' equity	680.1	1,445.8
Total liabilities and stockholders' equity	$ 4,328.8	$ 4,864.4

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Segment Reporting (Narrative) (Detail)	Dec. 31, 2012 Segment
Segment Reporting Information [Line Items]
Number of business units	2

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net earnings	$ 258.3	$ 330.3
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	173.2	161.6
Deferred income tax benefit	(5.7)	(2.5)
Share-based compensation expense	115.9	92.7
Other non-cash items	2.9	2.4
Changes in operating assets and liabilities, net of acquisitions:
Trade accounts receivable	28.0	47.1
Trade finance receivables	77.1	91.9
Prepaid and other current assets	16.7	6.3
Other long-term assets	7.4	17.8
Accrued and other current liabilities	(31.4)	(47.8)
Deferred revenue	(212.7)	(88.6)
Other long-term liabilities	(5.5)	(9.1)
Other operating assets and liabilities	(6.3)	(14.7)
Net cash provided by operating activities	417.9	587.4
Cash flows from investing activities:
Proceeds from maturities of investments	69.0	24.8
Proceeds from sales of investments	13.3	4.4
Purchases of investments	(139.2)	(30.0)
Cash paid for acquisitions, net of cash acquired, and other investments	(19.4)	(163.0)
Capitalization of software development costs	(94.2)	(97.7)
Purchases of property and equipment	(19.3)	(17.6)
Other investing activities	1.9
Net cash used in investing activities	(187.9)	(279.1)
Cash flows from financing activities:
Purchases of common stock, including accelerated share repurchase	(1,150.0)	(630.5)
Repurchases of stock to satisfy employee tax withholding obligations	(38.1)	(31.7)
Proceeds from stock options exercised and other	50.7	41.9
Excess tax benefit from share-based compensation expense	5.8	13.6
Repayments of borrowings and capital lease obligations	(21.4)	(20.7)
Proceeds from borrowings, net of issuance costs	494.7
Net cash used in financing activities	(658.3)	(627.4)
Effect of exchange rate changes on cash and cash equivalents	(10.7)	(22.3)
Net change in cash and cash equivalents	(439.0)	(341.4)
Cash and cash equivalents, beginning of period	1,496.9	1,660.9
Cash and cash equivalents, end of period	1,057.9	1,319.5
Supplemental disclosure of cash flow information:
Cash paid for interest	33.7	22.7
Cash paid for income taxes, net of amounts refunded	$ 58.3	$ 20.8

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Long-Term Borrowings (Senior Unsecured Notes Due February 2022) (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	9 Months Ended
	Feb. 29, 2012	Dec. 31, 2012
Proforma Debt Instrument [Line Items]
Debt instrument, maturity date		November 2015
Senior Unsecured Notes Due February 2022 [Member]
Proforma Debt Instrument [Line Items]
Senior unsecured debt	$ 500.0
Debt instrument, maturity date		February 2022
Net proceeds after original issuance discount and issuance costs	493.3
Original issuance discount	$ 2.7
Interest rate on senior unsecured notes	4.25%
Redemption options of senior notes		The greater of (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 35 basis points, plus accrued and unpaid interest.
Percentage of principal amount of senior notes to be redeemed		100.00%
Number of basis points to be added to the discounted present value of remaining scheduled payments		0.35%

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Segment Reporting (Tables)

9 Months Ended

Dec. 31, 2012

Summary Of Segment Performance

The following tables summarize segment performance for the quarters and nine months ended December 31, 2012 and 2011:

	Enterprise Service Management							Mainframe Service Management		Consolidated
Quarter Ended December 31, 2012	Solutions		Services			Total
						(In millions)
Revenue:
License	$	131.3	$	—		$	131.3	$	101.0	$	232.3
Maintenance		164.3		—			164.3		124.4		288.7
Professional services		—		59.2			59.2		—		59.2
Total revenue		295.6		59.2			354.8		225.4		580.2
Direct and allocated indirect segment operating expenses:		224.1		60.1			284.2		85.8		370.0
Segment operating income (loss)		71.5		(0.9	)		70.6		139.6		210.2
Unallocated operating expenses											(62.6	)
Other loss, net											(10.6	)
Earnings before income taxes										$	137.0

	Enterprise Service Management							Mainframe Service Management		Consolidated
Quarter Ended December 31, 2011	Solutions		Services			Total
						(In millions)
Revenue:
License	$	133.7	$	—		$	133.7	$	91.3	$	225.0
Maintenance		147.7		—			147.7		124.6		272.3
Professional services		—		50.9			50.9		—		50.9
Total revenue		281.4		50.9			332.3		215.9		548.2
Direct and allocated indirect segment operating expenses:		199.1		57.0			256.1		79.4		335.5
Segment operating income (loss)		82.3		(6.1	)		76.2		136.5		212.7
Unallocated operating expenses											(50.9	)
Other loss, net											(3.5	)
Earnings before income taxes										$	158.3

	Enterprise Service Management							Mainframe Service Management		Consolidated
Nine Months Ended December 31, 2012	Solutions		Services			Total
						(In millions)
Revenue:
License	$	357.4	$	—		$	357.4	$	255.7	$	613.1
Maintenance		482.8		—			482.8		370.2		853.0
Professional services		—		166.7			166.7		—		166.7
Total revenue		840.2		166.7			1,006.9		625.9		1,632.8
Direct and allocated indirect segment operating expenses:		652.3		180.5			832.8		243.4		1,076.2
Segment operating income (loss)		187.9		(13.8	)		174.1		382.5		556.6
Unallocated operating expenses											(197.0	)
Other loss, net											(25.4	)
Earnings before income taxes										$	334.2

	Enterprise Service Management							Mainframe Service Management		Consolidated
Nine Months Ended December 31, 2011	Solutions		Services			Total
						(In millions)
Revenue:
License	$	398.2	$	—		$	398.2	$	246.0	$	644.2
Maintenance		434.5		—			434.5		372.9		807.4
Professional services		—		155.7			155.7		—		155.7
Total revenue		832.7		155.7			988.4		618.9		1,607.3
Direct and allocated indirect segment operating expenses:		597.9		165.9			763.8		243.9		1,007.7
Segment operating income (loss)		234.8		(10.2	)		224.6		375.0		599.6
Unallocated operating expenses											(161.7	)
Other loss, net											(9.9	)
Earnings before income taxes										$	428.0

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Long-Term Borrowings (Senior Unsecured Notes Due December 2022) (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	9 Months Ended
	Nov. 30, 2012	Dec. 31, 2012
Proforma Debt Instrument [Line Items]
Debt instrument, maturity date		November 2015
Senior Unsecured Notes Due December 2022 [Member]
Proforma Debt Instrument [Line Items]
Senior unsecured debt	$ 300.0
Debt instrument, maturity date		December 2022
Net proceeds after original issuance discount and issuance costs	295.1
Original issuance discount	$ 2.3
Interest rate on senior unsecured notes	4.50%
Redemption options of senior notes		The greater of (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 45 basis points, plus accrued and unpaid interest.
Percentage of principal amount of senior notes to be redeemed		100.00%
Number of basis points to be added to the discounted present value of remaining scheduled payments		0.45%

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Financial Instruments (Input Levels And Valuation Techniques For Determination Of Fair Values Of Financial Instruments) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Liabilities
Interest rate swap	$ 0.2
Recurring [Member]
Assets
Total	375.2	966.0
Liabilities
Total	2.5	0.6
Recurring [Member] | Valuation Technique A [Member]
Assets
Foreign currency forward contracts	3.8	8.1
Liabilities
Foreign currency forward contracts	2.3	0.6
Recurring [Member] | Valuation Technique B [Member]
Liabilities
Interest rate swap	0.2
Recurring [Member] | Money-Market Funds [Member] | Valuation Technique A [Member]
Assets
Cash equivalents	26.2	769.3
Recurring [Member] | United States Treasury Securities [Member] | Valuation Technique A [Member]
Assets
Cash equivalents	150.0	49.9
Short-term and long-term investments	128.7	92.2
Recurring [Member] | Auction Rate Securities [Member] | Valuation Technique B [Member]
Assets
Short-term and long-term investments	18.7	26.9
Recurring [Member] | United States Government Agency Bonds [Member] | Valuation Technique A [Member]
Assets
Short-term and long-term investments	15.4
Recurring [Member] | Corporate Bonds And Commercial Paper [Member] | Valuation Technique A [Member]
Assets
Short-term and long-term investments	12.0
Recurring [Member] | Mutual Funds [Member] | Valuation Technique A [Member]
Assets
Short-term and long-term investments	20.4	19.6
Recurring [Member] | Level 1 [Member]
Assets
Total	325.3	931.0
Recurring [Member] | Level 1 [Member] | Money-Market Funds [Member] | Valuation Technique A [Member]
Assets
Cash equivalents	26.2	769.3
Recurring [Member] | Level 1 [Member] | United States Treasury Securities [Member] | Valuation Technique A [Member]
Assets
Cash equivalents	150.0	49.9
Short-term and long-term investments	128.7	92.2
Recurring [Member] | Level 1 [Member] | Mutual Funds [Member] | Valuation Technique A [Member]
Assets
Short-term and long-term investments	20.4	19.6
Recurring [Member] | Level 2 [Member]
Assets
Total	31.2	8.1
Liabilities
Total	2.3	0.6
Recurring [Member] | Level 2 [Member] | Valuation Technique A [Member]
Assets
Foreign currency forward contracts	3.8	8.1
Liabilities
Foreign currency forward contracts	2.3	0.6
Recurring [Member] | Level 2 [Member] | United States Government Agency Bonds [Member] | Valuation Technique A [Member]
Assets
Short-term and long-term investments	15.4
Recurring [Member] | Level 2 [Member] | Corporate Bonds And Commercial Paper [Member] | Valuation Technique A [Member]
Assets
Short-term and long-term investments	12.0
Recurring [Member] | Level 3 [Member]
Assets
Total	18.7	26.9
Liabilities
Total	0.2
Recurring [Member] | Level 3 [Member] | Valuation Technique B [Member]
Liabilities
Interest rate swap	0.2
Recurring [Member] | Level 3 [Member] | Auction Rate Securities [Member] | Valuation Technique B [Member]
Assets
Short-term and long-term investments	$ 18.7	$ 26.9

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Basis of Presentation

9 Months Ended

Dec. 31, 2012

Basis of Presentation

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of BMC Software, Inc. and its subsidiaries (collectively, we, us, our, the Company or BMC). All significant intercompany balances and transactions have been eliminated in consolidation. These financial statements reflect all normal recurring adjustments necessary to fairly present our financial position and results of operations as of and for the periods presented herein. These financial statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the SEC). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

Interim results are not necessarily indicative of results for a full year. Our results reflect the seasonality of our business and generally tend to be stronger in the third and fourth quarters of our fiscal year, as compared to the first and second quarters of our fiscal year; however, general economic conditions also have an impact on our business and financial results. These financial statements should be read in conjunction with our annual audited consolidated financial statements for the fiscal year ended March 31, 2012, as filed with the SEC on Form 10-K.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1.0	1.0
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	600.0	600.0
Common stock, shares issued	249.1	249.1
Treasury stock, shares	106.4	87.4

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New Accounting Pronouncements Not Yet Adopted (Policies)

9 Months Ended

Dec. 31, 2012

New Accounting Pronouncements Not Yet Adopted

New Accounting Pronouncements Not Yet Adopted

In December 2011, the Financial Accounting Standards Board issued guidance requiring new disclosures regarding balance sheet offsetting. This guidance requires entities to disclose the gross amounts of certain recognized financial assets and liabilities, to reconcile these amounts to the net positions recognized in the balance sheet and to provide qualitative disclosures about the rights of offset relating to these financial assets and liabilities. This new disclosure guidance is effective for us beginning with our first quarter of fiscal 2014.

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Document and Entity Information	9 Months Ended
	Dec. 31, 2012	Jan. 24, 2013
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	BMC
Entity Registrant Name	BMC SOFTWARE INC
Entity Central Index Key	0000835729
Current Fiscal Year End Date	--03-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		142,889,000

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Financial Instruments (Tables)

9 Months Ended

Dec. 31, 2012

Input Levels And Valuation Techniques For Determination Of Fair Values Of Financial Instruments

The fair values of our financial instruments were determined using the following input levels and valuation techniques:

	Valuation	December 31, 2012								March 31, 2012
	Technique	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
		(In millions)
Assets
Cash equivalents
Money-market funds	A	$	26.2	$	—	$	—	$	26.2	$	769.3	$	—	$	—	$	769.3
United States Treasury securities	A		150.0		—		—		150.0		49.9		—		—		49.9
Short-term and long-term investments
United States Treasury securities	A		128.7		—		—		128.7		92.2		—		—		92.2
Auction rate securities	B		—		—		18.7		18.7		—		—		26.9		26.9
United States government agency bonds	A		—		15.4		—		15.4		—		—		—		—
Corporate bonds and commercial paper	A		—		12.0		—		12.0		—		—		—		—
Mutual funds	A		20.4		—		—		20.4		19.6		—		—		19.6
Foreign currency forward contracts	A		—		3.8		—		3.8		—		8.1		—		8.1
Total		$	325.3	$	31.2	$	18.7	$	375.2	$	931.0	$	8.1	$	26.9	$	966.0
Liabilities
Foreign currency forward contracts	A	$	—	$	2.3	$	—	$	2.3	$	—	$	0.6	$	—	$	0.6
Interest rate swap	B		—		—		0.2		0.2		—		—		—		—
Total		$	—	$	2.3	$	0.2	$	2.5	$	—	$	0.6	$	—	$	0.6

Summary Of Activity In Level 3 Financial Instruments

The following table summarizes the activity in our Level 3 financial instruments for the quarters and nine months ended December 31, 2012 and 2011, respectively:

	Quarter Ended								Nine Months Ended
	December 31, 2012								December 31, 2012
	Auction Rate Securities		Interest Rate Swap			Total			Auction Rate Securities			Interest Rate Swap			Total
	(In millions)
Balance at the beginning of the period	$	18.6	$	—		$	18.6		$	26.9		$	—		$	26.9
Redemption and sales		—		—			—			(7.6	)		—			(7.6	)
Change in fair value included in other comprehensive income		0.1		(0.2	)		(0.1	)		(0.6	)		(0.2	)		(0.8	)
Balance at the end of the period	$	18.7	$	(0.2	)	$	18.5		$	18.7		$	(0.2	)	$	18.5

	Quarter Ended			Nine Months Ended
	December 31, 2011			December 31, 2011
	Auction Rate Securities
	(In millions)
Balance at the beginning of the period	$	25.6		$	27.2
Redemption and sales		(0.1	)		(0.5	)
Change in fair value included in other comprehensive income		0.4			(0.8	)
Balance at the end of the period	$	25.9		$	25.9

Components Of Cash, Cash Equivalents And Investments

Our cash, cash equivalents and investments were comprised of the following:

	December 31, 2012						March 31, 2012
	Cash and Cash Equivalents		Short-term Investments		Long-term Investments		Cash and Cash Equivalents		Short-term Investments		Long-term Investments
	(In millions)
Measured at fair value:
Available-for-sale
United States Treasury securities	$	150.0	$	113.2	$	15.5	$	49.9	$	86.1	$	6.1
Auction rate securities		—		—		18.7		—		—		26.9
United States government agency bonds		—		5.0		10.4		—		—		—
Corporate bonds and commercial paper		—		5.4		6.6		—		—		—
Trading
Mutual funds		—		—		20.4		—		—		19.6
Total debt and equity investments measured at fair value		150.0		123.6		71.6		49.9		86.1		52.6
Cash on hand		829.7		—		—		632.6		—		—
Certificates of deposit		52.0		—		—		45.1		—		—
Money-market funds		26.2		—		—		769.3		—		—
Total cash, cash equivalents and investments	$	1,057.9	$	123.6	$	71.6	$	1,496.9	$	86.1	$	52.6
Amounts included in accumulated other comprehensive income from available-for-sale securities (pre-tax):
Unrealized losses*	$	—	$	—	$	3.0	$	—	$	—	$	2.4

* The unrealized losses on available-for-sale securities at December 31, 2012 and March 31, 2012 relate to the auction rate securities.

Contract Maturities Of Available For Sale Investments In Debt Securities

The following summarizes the underlying contractual maturities of our available-for-sale investments in debt securities at December 31, 2012:

			Fair
	Cost		Value
	(In millions)
Due in one year or less	$	273.6	$	273.6
Due between one and two years		32.5		32.5
Due after ten years		21.7		18.7
Total	$	327.8	$	324.8

Notional Amounts At Contract Exchange Rates Of Foreign Currency Forward Contracts

The notional amounts at contract exchange rates of our foreign currency forward contracts outstanding were:

	Notional Amount
	December 31,		March 31,
	2012		2012
	(In millions)
Foreign Currency Forward Contracts (receive United States dollar/pay foreign currency)
Euro	$	180.9	$	214.2
Australian dollar		31.8		29.9
Chinese yuan renminbi		14.9		11.7
Swiss franc		9.5		6.8
Singapore dollar		6.4		3.8
Brazilian real		5.9		8.7
Danish krone		4.9		3.9
South Korean won		3.2		2.6
Norwegian krone		2.8		2.9
New Zealand dollar		2.5		3.4
British pound		—		19.2
Swedish krona		0.5		8.2
Mexican peso		—		3.2
Other		3.3		3.5
Total	$	266.6	$	322.0
Foreign Currency Forward Contracts (pay United States dollar/receive foreign currency)
Israeli shekel	$	165.0	$	158.2
Indian rupee		12.0		15.0
British pound		3.2		—
Other		0.7		4.8
Total	$	180.9	$	178.0

Finance Receivables Balance, Net Of Allowance, By Region And By Class Of Internal Credit Rating

At December 31, 2012, our finance receivables balance, net of allowance, by region and by class of internal credit rating was as follows:

	North America		EMEA		Asia Pacific		Latin America		Total
	(In millions)
Class 1	$	27.9	$	45.1	$	4.4	$	1.2	$	78.6
Class 2		3.2		19.0		6.9		3.9		33.0
Class 3		0.1		—		0.2		0.5		0.8
Balance at the end of the period	$	31.2	$	64.1	$	11.5	$	5.6	$	112.4

Carrying Values And Fair Values Of Debt Instruments

The carrying values and fair values of our debt instruments at December 31, 2012 and March 31, 2012 are as follows:

	December 31, 2012				March 31, 2012
	Carrying value		Fair value		Carrying value		Fair value
	(In millions)
Senior unsecured notes due June 2018 (Level 2)	$	299.0	$	363.5	$	298.9	$	368.4
Senior unsecured notes due February 2022 (Level 2)		497.6		521.3		497.4		506.6
Senior unsecured notes due December 2022 (Level 2)		297.7		308.0		—		—
Term Loan due November 2015 (Level 3)		200.0		200.3		—		—

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Revenue:
License	$ 232.3	$ 225.0	$ 613.1	$ 644.2
Maintenance	288.7	272.3	853.0	807.4
Professional services	59.2	50.9	166.7	155.7
Total revenue	580.2	548.2	1,632.8	1,607.3
Operating expenses:
Cost of license revenue	41.1	38.6	120.8	116.2
Cost of maintenance revenue	51.3	46.2	155.1	139.5
Cost of professional services revenue	56.3	52.8	168.5	153.4
Selling and marketing expenses	175.8	154.1	503.7	452.3
Research and development expenses	41.9	38.5	116.5	121.5
General and administrative expenses	56.2	50.4	175.1	160.0
Amortization of intangible assets	10.0	5.8	33.5	26.5
Total operating expenses	432.6	386.4	1,273.2	1,169.4
Operating income	147.6	161.8	359.6	437.9
Other income (loss), net:
Interest and other income, net	1.8	2.3	7.6	8.7
Interest expense	(12.7)	(4.5)	(33.6)	(15.2)
Gain (loss) on investments, net	0.3	(1.3)	0.6	(3.4)
Total other loss, net	(10.6)	(3.5)	(25.4)	(9.9)
Earnings before income taxes	137.0	158.3	334.2	428.0
Provision for income taxes	30.7	38.4	75.9	97.7
Net earnings	106.3	119.9	258.3	330.3
Basic earnings per share	$ 0.71	$ 0.72	$ 1.66	$ 1.92
Diluted earnings per share	$ 0.70	$ 0.71	$ 1.63	$ 1.88
Shares used in computing basic earnings per share	149.7	167.2	155.8	172.0
Shares used in computing diluted earnings per share	152.6	169.5	158.9	175.2
Net earnings	106.3	119.9	258.3	330.3
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax provision (benefit) of $(1.9), $(0.8), $0.7 and $(1.2), respectively	16.0	17.4	(8.0)	(15.9)
Unrealized gain (loss) on available-for-sale securities, net of tax provision (benefit) of $0, $0.1, $(0.2) and $(0.2), respectively	0.1	0.3	(0.4)	(0.6)
Loss on cash flow hedge, net of tax	(0.2)		(0.2)
Total other comprehensive income (loss)	15.9	17.7	(8.6)	(16.5)
Total comprehensive income	$ 122.2	$ 137.6	$ 249.7	$ 313.8

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Share-Based Compensation

9 Months Ended

Dec. 31, 2012

Share-Based Compensation

(6) Share-Based Compensation

During the quarter and nine months ended December 31, 2012, we granted 2.2 million and 4.2 million nonvested stock units, respectively, at a weighted average grant date fair value of $40.44 and $41.96, respectively, consisting of both time-based and market-based awards, to our executive officers, non-executive employees and non-employee board members. Time-based nonvested stock units primarily vest in annual increments over one or three years. Market-based nonvested stock units vest in 50% increments over two- and three-year periods upon achievement of certain targets related to our relative shareholder return as compared to the NASDAQ-100 Index over each performance period.

During the quarter and nine months ended December 31, 2012, we issued 0.4 million and 1.4 million shares, respectively, of common stock related to exercises of stock options, and 1.3 million and 2.8 million shares, respectively, of common stock related to vesting of nonvested stock units.

At December 31, 2012, we had approximately $264.1 million of total unrecognized compensation costs related to share-based awards that are expected to be recognized as expense over a remaining weighted-average period of two years.

Share-based compensation expense as recorded in our condensed consolidated statements of comprehensive income is summarized as follows:

	Quarter Ended				Nine Months Ended
	December 31,				December 31,
	2012		2011		2012		2011
	(In millions)
Cost of license revenue	$	1.9	$	1.1	$	5.2	$	3.4
Cost of maintenance revenue		3.6		3.7		12.3		11.0
Cost of professional services revenue		1.5		1.4		4.6		3.9
Selling and marketing expenses		16.4		9.3		44.3		28.4
Research and development expenses		5.0		3.1		11.4		9.6
General and administrative expenses		13.1		12.5		38.1		36.4
Total share-based compensation expense	$	41.5	$	31.1	$	115.9	$	92.7

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Income Taxes

9 Months Ended

Dec. 31, 2012

Income Taxes

(5) Income Taxes

Income tax expense was $30.7 million and $75.9 million for the quarter and nine months ended December 31, 2012, respectively, resulting in effective tax rates of 22.4% and 22.7%, respectively. Income tax expense was $38.4 million and $97.7 million for the quarter and nine months ended December 31, 2011, respectively, resulting in effective tax rates of 24.3% and 22.8%, respectively. Our effective tax rate generally differs from the U.S. federal statutory rate of 35% due to favorable tax rates associated with earnings from lower tax rate jurisdictions throughout the world and our policy of indefinitely reinvesting earnings from certain jurisdictions (primarily in Europe), as well as due to additional accruals, changes in estimates, releases and settlements with taxing authorities related to our uncertain tax positions and benefits associated with income attributable to both domestic production activities and the extraterritorial income exclusion. During the quarter and nine months ended December 31, 2012, the overall favorable effects of foreign tax rates on our effective tax rate were 9.6% and 9.4% of pre-tax earnings, respectively. During the quarter and nine months ended December 31, 2011, the overall favorable effects of foreign tax rates on our effective tax rate were 7.3% and 8.6% of pre-tax earnings, respectively. During the nine months ended December 31, 2011, we also recorded discrete net tax benefits of $6.2 million associated with tax authority settlements related to prior years’ tax matters which favorably impacted our effective tax rate by 1.4% of pre-tax earnings. Our effective tax rate could fluctuate on a quarterly basis and could be adversely affected to the extent forecasted earnings for the year are lower than anticipated in countries with lower statutory rates and higher than anticipated in countries with higher statutory rates.

We file a federal income tax return in the United States as well as income tax returns in various local, state and foreign jurisdictions. Our tax years are closed with the United States Internal Revenue Service (the IRS) through the tax year ended March 31, 2007, except for one issue related to the year ended March 31, 2006. We received a Notice of Deficiency from the IRS related to this issue and in July 2011 filed a petition for hearing with the U.S. Tax Court. A trial was held in May 2012 and post-trial briefs have been submitted. We are currently awaiting the Tax Court’s ruling. In December 2012, the IRS completed its examination of our federal income tax return for the years ended March 31, 2009 and 2010, and there were no unagreed issues. In addition, certain tax years related to local, state, and foreign jurisdictions remain subject to examination. To provide for potential tax exposures, we maintain a liability for unrecognized tax benefits which we believe is adequate.

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Business Combinations (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Dec. 31, 2012
Business Acquisition [Line Items]
Acquisition price of business	$ 19.5
Assets and liabilities consisting primarily of acquired technology	19.2
Weighted average economic lives	3 years
Enterprise Service Management-Solutions [Member]
Business Acquisition [Line Items]
Purchase consideration allocated to goodwill	$ 2.7

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Long-Term Borrowings (Tables)

9 Months Ended

Dec. 31, 2012

Long-Term Borrowings

Long-term borrowings at December 31, 2012 and March 31, 2012 consisted of:

	December 31,			March 31,
	2012			2012
	(In millions)
Senior unsecured notes due June 2018 (net of $1.0 million and $1.1 million of unamortized discount at December 31, 2012 and March 31, 2012, respectively)	$	299.0		$	298.9
Senior unsecured notes due February 2022 (net of $2.4 million and $2.6 million of unamortized discount at December 31, 2012 and March 31, 2012, respectively)		497.6			497.4
Senior unsecured notes due December 2022 (net of $2.3 million of unamortized discount at December 31, 2012)		297.7			—
Term Loan due November 2015		200.0			—
Capital leases and other obligations		38.0			46.3
Total		1,332.3			842.6
Less current maturities of capital leases and other obligations (included in accrued liabilities)		(23.7	)		(21.0	)
Long-term borrowings	$	1,308.6		$	821.6

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Segment Reporting

9 Months Ended

Dec. 31, 2012

Segment Reporting

(9) Segment Reporting

We are organized into two primary business units, Enterprise Service Management (ESM) and Mainframe Service Management (MSM). ESM derives its revenue from our performance management, automation, IT service management, and Atrium solution suites (collectively, ESM-Solutions), along with professional services revenue derived from consulting, implementation, integration and educational services related principally to the delivery of our ESM solutions (ESM-Services). MSM derives its revenue from solution suites for mainframe data and performance management and enterprise workload automation. Beginning in the first quarter of fiscal 2013, we expanded our ESM segment reporting to include separate financial information for both ESM-Solutions and ESM-Services, consistent with the manner in which business segment performance is being assessed internally for evaluating performance and making resource allocation decisions.

Segment performance is measured based on internal segment operating income. Segment operating income for ESM-Solutions and MSM reflects segment revenue less direct and allocated indirect segment operating expenses. Direct segment operating expenses primarily include cost of revenue, selling and marketing, research and development and general and administrative expenses that can be specifically identified to a particular segment and are directly controllable by segment management, while allocated indirect segment operating expenses primarily include indirect costs within these operating expense categories that are not specifically identified to a particular segment or controllable by segment management. Indirect operating expenses are allocated to ESM-Solutions and MSM based on budgeted bookings, revenue and other allocation methods that management believes to be reasonable. Segment operating income for ESM-Services reflects professional services revenue less direct segment operating expenses consisting primarily of cost of professional services revenue and direct selling and marketing costs. The Company has reclassified all periods presented to conform to the current period presentation.

Our measure of segment operating income does not include the effect of share-based compensation expenses, amortization of acquired technology and other intangible assets, the costs associated with severance, exit costs and related charges or proxy contest costs, which are collectively included in unallocated operating expenses below. Assets and liabilities are reviewed by management at the consolidated level only.

The following tables summarize segment performance for the quarters and nine months ended December 31, 2012 and 2011:

	Enterprise Service Management							Mainframe Service Management		Consolidated
Quarter Ended December 31, 2012	Solutions		Services			Total
						(In millions)
Revenue:
License	$	131.3	$	—		$	131.3	$	101.0	$	232.3
Maintenance		164.3		—			164.3		124.4		288.7
Professional services		—		59.2			59.2		—		59.2
Total revenue		295.6		59.2			354.8		225.4		580.2
Direct and allocated indirect segment operating expenses:		224.1		60.1			284.2		85.8		370.0
Segment operating income (loss)		71.5		(0.9	)		70.6		139.6		210.2
Unallocated operating expenses											(62.6	)
Other loss, net											(10.6	)
Earnings before income taxes										$	137.0

	Enterprise Service Management							Mainframe Service Management		Consolidated
Quarter Ended December 31, 2011	Solutions		Services			Total
						(In millions)
Revenue:
License	$	133.7	$	—		$	133.7	$	91.3	$	225.0
Maintenance		147.7		—			147.7		124.6		272.3
Professional services		—		50.9			50.9		—		50.9
Total revenue		281.4		50.9			332.3		215.9		548.2
Direct and allocated indirect segment operating expenses:		199.1		57.0			256.1		79.4		335.5
Segment operating income (loss)		82.3		(6.1	)		76.2		136.5		212.7
Unallocated operating expenses											(50.9	)
Other loss, net											(3.5	)
Earnings before income taxes										$	158.3

	Enterprise Service Management							Mainframe Service Management		Consolidated
Nine Months Ended December 31, 2012	Solutions		Services			Total
						(In millions)
Revenue:
License	$	357.4	$	—		$	357.4	$	255.7	$	613.1
Maintenance		482.8		—			482.8		370.2		853.0
Professional services		—		166.7			166.7		—		166.7
Total revenue		840.2		166.7			1,006.9		625.9		1,632.8
Direct and allocated indirect segment operating expenses:		652.3		180.5			832.8		243.4		1,076.2
Segment operating income (loss)		187.9		(13.8	)		174.1		382.5		556.6
Unallocated operating expenses											(197.0	)
Other loss, net											(25.4	)
Earnings before income taxes										$	334.2

	Enterprise Service Management							Mainframe Service Management		Consolidated
Nine Months Ended December 31, 2011	Solutions		Services			Total
						(In millions)
Revenue:
License	$	398.2	$	—		$	398.2	$	246.0	$	644.2
Maintenance		434.5		—			434.5		372.9		807.4
Professional services		—		155.7			155.7		—		155.7
Total revenue		832.7		155.7			988.4		618.9		1,607.3
Direct and allocated indirect segment operating expenses:		597.9		165.9			763.8		243.9		1,007.7
Segment operating income (loss)		234.8		(10.2	)		224.6		375.0		599.6
Unallocated operating expenses											(161.7	)
Other loss, net											(9.9	)
Earnings before income taxes										$	428.0

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Stockholders' Equity

9 Months Ended

Dec. 31, 2012

Stockholders' Equity

(7) Stockholders’ Equity

Earnings Per Share

The two-class method is utilized for the computation of earnings per share (EPS). The two-class method requires a portion of net income to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Income allocated to these participating securities is excluded from net earnings allocated to common shares and was insignificant for the quarter and nine months ended December 31, 2011. There were no participating securities outstanding during the quarter and nine months ended December 31, 2012.

Basic earnings per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding share-based awards and other dilutive securities using the treasury stock method.

The following table summarizes our basic and diluted EPS computations for the quarters and nine months ended December 31, 2012 and 2011:

	Quarter Ended				Nine Months Ended
	December 31,				December 31,
	2012		2011		2012		2011
	(In millions, except per share data)
Basic earnings per share:
Net earnings allocated to common shares	$	106.3	$	119.9	$	258.3	$	330.3
Weighted average number of common shares outstanding		149.7		167.2		155.8		172.0
Basic earnings per share	$	0.71	$	0.72	$	1.66	$	1.92
Diluted earnings per share:
Net earnings allocated to common shares	$	106.3	$	119.9	$	258.3	$	330.3
Weighted average number of common shares outstanding		149.7		167.2		155.8		172.0
Incremental shares from assumed conversions of share-based awards		2.9		2.3		3.1		3.2
Adjusted weighted average number of common shares outstanding		152.6		169.5		158.9		175.2
Diluted earnings per share	$	0.70	$	0.71	$	1.63	$	1.88

For the quarter and nine months ended December 31, 2012, 0.6 million and 1.2 million weighted average potential common shares, respectively, have been excluded from the calculation of diluted EPS as they were anti-dilutive. For the quarter and nine months ended December 31, 2011, 4.9 million and 1.8 million weighted average potential common shares, respectively, have been excluded from the calculation of diluted EPS as they were anti-dilutive.

Treasury Stock

Our Board of Directors has authorized a total of $6.0 billion to repurchase common stock under a common stock repurchase program, including a new $1 billion stock repurchase authorization approved in October 2012. On November 23, 2012, we entered into an accelerated share repurchase agreement (the ASR) to repurchase $750 million of our common stock under this program. Under the terms of the ASR, we paid $750 million to a financial institution and initially received 13.1 million shares of common stock, or 70% of the number of shares to be repurchased if such shares were repurchased at a price equal to the closing price of our common stock on November 23, 2012. The specific number of shares that we will ultimately repurchase under the ASR will be based generally on the daily discounted volume-weighted average share price of our common stock during the repurchase period, subject to other adjustments pursuant to the terms and conditions of the ASR. The ASR contemplates that the repurchase period will last no longer than approximately seven months from the execution of the agreement. At the completion of the repurchase period, we may be entitled to receive additional shares of our common stock from the financial institution or, under certain circumstances specified in the ASR, we may be required to deliver shares or make a cash payment (at our option) to the financial institution. Under the terms of the ASR, the maximum number of shares that could be delivered is 25.0 million.

The fair market value of the 13.1 million shares initially delivered was approximately $525.0 million and was included in treasury stock, reducing the weighted average number of basic and diluted common shares used to calculate EPS. The remaining $225.0 million was included in additional paid-in capital (APIC) and will be reclassified from APIC to treasury stock upon final settlement of the ASR. As of December 31, 2012, based on the daily discounted volume-weighted average price of our common stock since the effective date of the ASR, the financial institution would be required to deliver 5.6 million shares to us for the $225.0 million portion of the ASR that has not yet been settled. These shares were not included in the calculation of diluted weighted average common shares outstanding during the period because their effect was anti-dilutive.

During the quarter and nine months ended December 31, 2012, we repurchased a total of 14.3 million and 22.6 million shares, respectively, valued at $575.0 million and $925.0 million, respectively, under the Board authorizations. At December 31, 2012, approximately $700.2 million remains authorized in the stock repurchase program, which does not have an expiration date. During the quarter and nine months ended December 31, 2012, we repurchased 0.4 million and 0.9 million shares, respectively, for $18.1 million and $38.1 million, respectively, to satisfy employee tax withholding obligations upon the vesting of share-based awards.

Shareholder Rights Agreement

On May 12, 2012, our Board of Directors authorized and declared a dividend of one preferred share purchase right (a Right) for each outstanding common share through a shareholder rights agreement (the Rights Agreement). Each Right, once exercisable, represents the right to purchase one one-thousandth of a series B junior participating preferred share, par value $0.01, for $180, or an equivalent value of common shares determined at 50% of the then-current market price of BMC’s common stock, provided sufficient common shares are then unissued. The Rights become exercisable in the event any individual person or entity (including the ownership of their related affiliates) acquires 10% or more of the outstanding share capital of the Company without the approval of BMC’s Board of Directors, and until such time are inseparable from and trade with BMC’s common stock. The Rights have a de minimus fair value and are accounted for as a component of stockholders’ equity. The Rights Agreement expires May 11, 2013.

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Guarantees and Contingencies

9 Months Ended

Dec. 31, 2012

Guarantees and Contingencies

(8) Guarantees and Contingencies

Guarantees

Under our standard software license agreements, we agree to indemnify, defend and hold harmless our licensees from and against certain losses, damages and costs arising from claims alleging the licensees’ use of our software infringes the intellectual property rights of a third party. Also, under these standard license agreements, we represent and warrant to licensees that our software products operate substantially in accordance with published specifications.

Other guarantees include promises to indemnify, defend and hold harmless each of our executive officers, non-employee directors and certain key employees from and against losses, damages and costs incurred by each such individual in administrative, legal or investigative proceedings arising from alleged wrongdoing by the individual while acting in good faith within the scope of his or her job duties on our behalf.

We also had outstanding letters of credit, performance bonds and similar instruments at December 31, 2012 of approximately $52.3 million primarily in support of performance obligations to various customers, but also related to facilities and other obligations.

Historically, we have not incurred significant costs related to such indemnifications, warranties and guarantees. As such, and based on other factors, no provision or accrual for these items has been made.

Contingencies

We are party to various labor claims brought by certain former international employees alleging that amounts are due to such employees for unpaid commissions and other compensation. The claims are in various stages and are not expected to be fully resolved in the near future; however, we intend to vigorously contest all of the claims. Taking into account accruals recorded by us, we believe the likelihood of a material adverse effect on our financial statements resulting from these claims is remote. However, we cannot predict the timing or ultimate outcome of these matters.

We are currently litigating a matter in Brazilian courts as to whether a tax applies to the remittance of software payments from our Brazilian operations. In February 2007, a law was enacted that clarified that this particular tax did not apply to the remittance of software payments, retroactive to January 1, 2006. We continue to pursue a favorable resolution on this matter for years prior to January 1, 2006. While we believe we will ultimately prevail based on the merits of our position, if we do not, we could incur a charge of up to approximately $11 million based on current exchange rates; however, we cannot predict the timing or ultimate outcome of this matter.

We are subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. Taking into account accruals recorded by us, we believe the likelihood of a material adverse effect on our financial statements resulting from any of these matters is remote.

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New Accounting Pronouncements Not Yet Adopted

9 Months Ended

Dec. 31, 2012

New Accounting Pronouncements Not Yet Adopted

(10) New Accounting Pronouncements Not Yet Adopted

In December 2011, the Financial Accounting Standards Board issued guidance requiring new disclosures regarding balance sheet offsetting. This guidance requires entities to disclose the gross amounts of certain recognized financial assets and liabilities, to reconcile these amounts to the net positions recognized in the balance sheet and to provide qualitative disclosures about the rights of offset relating to these financial assets and liabilities. This new disclosure guidance is effective for us beginning with our first quarter of fiscal 2014.

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Long-Term Borrowings (Senior Unsecured Notes Due June 2018) (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	9 Months Ended
	Jun. 30, 2008	Dec. 31, 2012
Proforma Debt Instrument [Line Items]
Debt instrument, maturity date		November 2015
Senior Unsecured Notes Due June 2018 [Member]
Proforma Debt Instrument [Line Items]
Senior unsecured debt	$ 300.0
Debt instrument, maturity date		June 2018
Net proceeds after original issuance discount and issuance costs	295.6
Original issuance discount	$ 1.8
Interest rate on senior unsecured notes	7.25%
Redemption options of senior notes		The greater of (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 50 basis points, plus accrued and unpaid interest.
Percentage of principal amount of senior notes to be redeemed		100.00%
Number of basis points to be added to the discounted present value of remaining scheduled payments		0.50%

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Stockholders' Equity (Tables)

9 Months Ended

Dec. 31, 2012

Computation Of Basic And Diluted EPS

The following table summarizes our basic and diluted EPS computations for the quarters and nine months ended December 31, 2012 and 2011:

	Quarter Ended				Nine Months Ended
	December 31,				December 31,
	2012		2011		2012		2011
	(In millions, except per share data)
Basic earnings per share:
Net earnings allocated to common shares	$	106.3	$	119.9	$	258.3	$	330.3
Weighted average number of common shares outstanding		149.7		167.2		155.8		172.0
Basic earnings per share	$	0.71	$	0.72	$	1.66	$	1.92
Diluted earnings per share:
Net earnings allocated to common shares	$	106.3	$	119.9	$	258.3	$	330.3
Weighted average number of common shares outstanding		149.7		167.2		155.8		172.0
Incremental shares from assumed conversions of share-based awards		2.9		2.3		3.1		3.2
Adjusted weighted average number of common shares outstanding		152.6		169.5		158.9		175.2
Diluted earnings per share	$	0.70	$	0.71	$	1.63	$	1.88

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Financial Instruments (Components Of Cash, Cash Equivalents And Investments) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Mar. 31, 2012
Auction Rate Securities [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	$ 18.7	$ 26.9
Cash, Cash Equivalents And Investments [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Total debt and equity investments measured at fair value	150.0	49.9
Total cash, cash equivalents and investments	1,057.9	1,496.9
Cash, Cash Equivalents And Investments [Member] | United States Treasury Securities [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	150.0	49.9
Cash, Cash Equivalents And Investments [Member] | Cash On Hand [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Other measurement basis	829.7	632.6
Cash, Cash Equivalents And Investments [Member] | Certificates Of Deposit [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Other measurement basis	52.0	45.1
Cash, Cash Equivalents And Investments [Member] | Money-Market Funds [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Other measurement basis	26.2	769.3
Short-Term Investments [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Total debt and equity investments measured at fair value	123.6	86.1
Total cash, cash equivalents and investments	123.6	86.1
Short-Term Investments [Member] | United States Treasury Securities [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	113.2	86.1
Short-Term Investments [Member] | United States Government Agency Bonds [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	5.0
Short-Term Investments [Member] | Corporate Bonds And Commercial Paper [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	5.4
Long-Term Investments [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Total debt and equity investments measured at fair value	71.6	52.6
Total cash, cash equivalents and investments	71.6	52.6
Amounts included in accumulated other comprehensive income from available-for-sale securities (pre-tax):
Unrealized losses	3.0	2.4
Long-Term Investments [Member] | United States Treasury Securities [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	15.5	6.1
Long-Term Investments [Member] | Auction Rate Securities [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	18.7	26.9
Long-Term Investments [Member] | United States Government Agency Bonds [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	10.4
Long-Term Investments [Member] | Corporate Bonds And Commercial Paper [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Available-for-sale	6.6
Long-Term Investments [Member] | Mutual Funds [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Trading	$ 20.4	$ 19.6

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Share-Based Compensation (Share-Based Compensation Expense) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 41.5	$ 31.1	$ 115.9	$ 92.7
Cost Of License Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	1.9	1.1	5.2	3.4
Cost Of Maintenance Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	3.6	3.7	12.3	11.0
Cost Of Professional Services Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	1.5	1.4	4.6	3.9
Selling And Marketing Expenses [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	16.4	9.3	44.3	28.4
Research And Development Expenses [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	5.0	3.1	11.4	9.6
General And Administrative Expenses [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 13.1	$ 12.5	$ 38.1	$ 36.4

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Foreign currency translation adjustment, tax provision (benefit)	$ (1.9)	$ (0.8)	$ 0.7	$ (1.2)
Unrealized gain (loss) on available-for-sale securities, tax provision (benefit)	$ 0	$ 0.1	$ (0.2)	$ (0.2)

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Long-Term Borrowings

9 Months Ended

Dec. 31, 2012

Long-Term Borrowings

(4) Long-Term Borrowings

Long-term borrowings at December 31, 2012 and March 31, 2012 consisted of:

	December 31,			March 31,
	2012			2012
	(In millions)
Senior unsecured notes due June 2018 (net of $1.0 million and $1.1 million of unamortized discount at December 31, 2012 and March 31, 2012, respectively)	$	299.0		$	298.9
Senior unsecured notes due February 2022 (net of $2.4 million and $2.6 million of unamortized discount at December 31, 2012 and March 31, 2012, respectively)		497.6			497.4
Senior unsecured notes due December 2022 (net of $2.3 million of unamortized discount at December 31, 2012)		297.7			—
Term Loan due November 2015		200.0			—
Capital leases and other obligations		38.0			46.3
Total		1,332.3			842.6
Less current maturities of capital leases and other obligations (included in accrued liabilities)		(23.7	)		(21.0	)
Long-term borrowings	$	1,308.6		$	821.6

In June 2008, we issued $300.0 million of senior unsecured notes due June 2018. Net proceeds to us after original issuance discount and issuance costs amounted to $295.6 million. These senior notes were issued at an original issuance discount of $1.8 million and bear interest at a rate of 7.25% per annum, payable semi-annually in June and December of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 50 basis points, plus accrued and unpaid interest.

In February 2012, we issued $500.0 million of senior unsecured notes due February 2022. Net proceeds to us after original issuance discount and issuance costs amounted to $493.3 million. These senior notes were issued at an original issuance discount of $2.7 million and bear interest at a rate of 4.25% per annum, payable semi-annually in February and August of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 35 basis points, plus accrued and unpaid interest.

In November 2012, we issued $300.0 million of senior unsecured notes due December 2022. Net proceeds to us after original issuance discount and issuance costs amounted to $295.1 million. These senior notes were issued at an original issuance discount of $2.3 million and bear interest at a rate of 4.5% per annum, payable semi-annually in June and December of each year. These senior notes are redeemable at our option at any time in whole or, from time to time, in part at a redemption price equal to the greater of: (i) 100% of the principal amount of these senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted at the applicable United States Treasury rate plus 45 basis points, plus accrued and unpaid interest.

In November 2012, we entered into a $200.0 million unsecured term loan agreement, due November 2015, with an institutional lender. Net proceeds to us after issuance costs amounted to $199.6 million. The Term Loan bears interest at a variable rate equal to the one-month LIBOR plus 1.625%, based upon our current debt rating, and is payable monthly. We concurrently entered into an interest rate swap agreement to hedge the variability of cash interest payments due to changes in the LIBOR benchmark interest rate, fixing our interest rate at 2.033%. The Term Loan may be prepaid at our option any time after the second anniversary of the closing date at the principal amount plus a 0.50% premium.

In November 2010, we entered into a credit agreement with certain institutional lenders providing for an unsecured revolving credit facility in an amount up to $400.0 million which is scheduled to expire on November 30, 2014 (the Credit Facility). Subject to certain conditions, at any time prior to maturity, we may invite existing and new lenders to increase the size of the Credit Facility up to a maximum of $600.0 million. The Credit Facility includes provisions for swing line loans of up to $25.0 million and standby letters of credit of up to $50.0 million. Revolving loans under the Credit Facility bear interest, at the Company’s option, at a rate equal to either (i) the base rate (as defined) plus a margin based on the credit ratings of our senior unsecured notes due June 2018, or (ii) the LIBOR rate (as defined) plus a margin based on the credit ratings of our senior notes due June 2018, for interest periods of one, two, three or nine months. As of December 31, 2012 and through January 28, 2013, we have not borrowed any funds under the Credit Facility.

The above credit facilities are subject to covenants limiting, among other things, the creation of liens securing indebtedness and sale-leaseback transactions. At December 31, 2012, we were in compliance with all debt covenants.

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Financial Instruments (Contract Maturities Of Available-For-Sale Investments In Debt Securities) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012
Investments Classified By Contractual Maturity Date [Line Items]
Due in one year or less, Cost	$ 273.6
Due between one and two years, Cost	32.5
Due after ten years, Cost	21.7
Maturities of available-for-sale investments in debt securities at Cost	327.8
Due in one year or less, Fair Value	273.6
Due between one and two years, Fair Value	32.5
Due after ten years, Fair Value	18.7
Maturities of available-for-sale investments in debt securities at Fair Value	$ 324.8

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Long-Term Borrowings (Narrative) (Detail) (Credit Facility [Member], USD $) In Millions, unless otherwise specified	1 Months Ended
	Nov. 30, 2010
Credit Facility [Member]
Debt Instrument [Line Items]
Maximum amount of credit facility	$ 600.0
Expiration date of credit facility	Nov. 30, 2014
Amount of unsecured revolving credit facility	400.0
Provisions for swing line loans (maximum)	25.0
Provision for standby letters of credit (maximum)	$ 50.0

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Share-Based Compensation (Tables)

9 Months Ended

Dec. 31, 2012

Share-Based Compensation Expense

Share-based compensation expense as recorded in our condensed consolidated statements of comprehensive income is summarized as follows:

	Quarter Ended				Nine Months Ended
	December 31,				December 31,
	2012		2011		2012		2011
	(In millions)
Cost of license revenue	$	1.9	$	1.1	$	5.2	$	3.4
Cost of maintenance revenue		3.6		3.7		12.3		11.0
Cost of professional services revenue		1.5		1.4		4.6		3.9
Selling and marketing expenses		16.4		9.3		44.3		28.4
Research and development expenses		5.0		3.1		11.4		9.6
General and administrative expenses		13.1		12.5		38.1		36.4
Total share-based compensation expense	$	41.5	$	31.1	$	115.9	$	92.7