OIL & GAS

CA, one of the world's largest management software companies, today reported financial results for its third quarter fiscal year 2006, ended December 31, 2005. CA said its net profit was $59 million, or 10 cents a share, in the fiscal third quarter, including discontinued operations. Not counting those operations, CA would have earned $56 million, or 9 cents a share, up from $31 million, or 5 cents a share, a year ago. Revenue for the three-month period that ended Dec. 31 rose to $967 million from $917 million. If not for an unfavorable impact of foreign exchange rates, the company's revenue would have risen a stronger 8%, CA said. Operating earnings climbed to 24 cents a share from 18 cents a share in the comparable quarter a year ago. On that basis, the company was expected to earn 24 cents a share from operations on revenue of $967.8 million for the quarter. "In the third quarter, CA continued to make enhancements to the business to drive long-term growth," said CA President and Chief Executive Officer John Swainson. "We have the right strategy in place to transform the business and establish CA as the company customers turn to for end-to-end enterprise IT management solutions that unify and simplify their IT environments." CA reported total revenues for the quarter of $967 million, an increase of 5 percent over the prior year period, or 8 percent on a constant currency basis. Revenue results reflect an increase in subscription revenue related to the Company's continued transition to its ratable business model and the effect of its recent acquisitions. CA's income from continuing operations of $56 million for the quarter increased 81 percent from the prior year's third quarter principally as a result of higher revenue and lower interest and taxes. CA reported $422 million in cash flow from continuing operations in the third quarter, compared to $365 million reported in the similar period last year. On a comparable basis, non-GAAP adjusted cash flow from continuing operations was $433 million (adjusted for $11 million in restructuring payments) versus $460 million reported the prior year (adjusted for $20 million in restructuring payments and a $75 million payment to the Restitution Fund). For the first nine months ended December 31, cash flow from continuing operations was $814 million, up 3 percent from the $789 million reported in the prior year period. Non-GAAP adjusted cash flow from continuing operations for the first nine months of the fiscal year was up 17 percent to $904 million (adjusted for $75 million in payments to the Restitution Fund and $15 million in restructuring payments), from $775 million reported in the prior year (adjusted for a $75 million Restitution Fund payment, $20 million for restructuring payments and $109 million in tax benefits). Billings for the third quarter were $1.29 billion, down 1 percent from the prior year period and up 2 percent on a constant currency basis. Organic billings for the quarter decreased approximately 5 percent, or 2 percent on a constant currency basis. Billings for the trailing twelve months, which normalize quarterly fluctuations and other factors, were $4.45 billion, an increase of 1 percent over the prior year comparable twelve month period. Organic billings for the trailing twelve months decreased approximately 2 percent. Currency fluctuations had an immaterial impact on billings for the trailing twelve months compared to the prior year comparable period. As is normal in our industry, some customers pay the entire contract value in one single installment at the outset rather than being invoiced on an annual basis over the life of the contract. In the third quarter, CA executed two contracts with an outsourcer that provided for single payments. These two contracts had a favorable impact on third quarter billings and cash flows, contributing an incremental $59 million more in the period than if the contracts were invoiced on an annual basis over the term of these contracts. Based on its strong year-to-date cash flow performance, CA increased its full-year guidance for non-GAAP adjusted cash flow from continuing operations growth over the prior year from 10 percent growth, to an expected growth range of 12 percent to 15 percent. The Company also reiterated its full-year guidance of billings growth of mid-to-high single digits. "Despite the inherently variable nature in billings from quarter to quarter, we have an excellent pipeline going forward and we are confident in our ability to deliver strong fourth quarter performance," said CA Chief Operating Officer Jeff Clarke. Total bookings for the third quarter, which include $82 million from the Company's indirect business, decreased 14 percent over the prior year period to $832 million. This decline was primarily due to an expected decrease in early contract renewals, as the Company has focused on driving new contract value. North American direct bookings for the quarter grew 11 percent; however, this gain was more than offset by a decline in international bookings. Total expenses for the quarter were $899 million compared with $870 million in the prior year, up 3 percent, primarily due to restructuring charges, acquisitions and new marketing initiatives. The balance of cash and marketable securities at December 31, 2005, was $1.83 billion, up from $1.64 billion at September 30, 2005. With $1.81 billion in total debt outstanding, the Company has a net cash position of approximately $22 million. During the quarter, the Company repurchased almost 4 million shares of its stock at an aggregate cost of $107 million. Since the beginning of its fiscal year 2006 through today, CA has repurchased approximately 14 million shares of its stock at an aggregate cost of approximately $400 million. The Company intends to repurchase $600 million of its shares during fiscal year 2006. Recent Progress Since reporting second quarter results in October, CA: * Launched its Enterprise IT Management (EITM) vision for unifying and simplifying the management of IT across the enterprise, which included 26 fully EITM-enabled products, including Unicenter r11, the first major Unicenter version in more than four years; * Unveiled a new global branding program, changed its name to CA, launched a modified logo and unveiled a new marketing campaign, "Believe Again"; * Announced an agreement to acquire Wily Technology, a leader in enterprise application management, in January, for approximately $375 million in cash. * The transaction is expected to close by the end of the current quarter; * Formed a partnership with Garnett & Helfrich Capital to divest CA's open source database unit, Ingres, in a move to further focus CA's product line on strategic core capabilities where the Company can obtain market leadership, and recognized a pretax gain of approximately $8 million; * Acquired Control-F1 to provide leading-edge support automation solutions to increase customers' IT efficiencies; * Divested MultiGen-Paradigm, Inc., to further focus CA's product line; and * Named to CA's Board of Directors, Christopher B. Lofgren, Ph.D., president, chief executive officer and a member of the Board of Directors for Schneider National, Inc.