OIL & GAS

Computer Associates International, Inc. today announced that it has entered into a definitive agreement to sell its 90 percent ownership of its ACCPAC International, Inc. subsidiary to The Sage Group, plc (Sage). The total value of the transaction is $110 million. After transaction and other costs, CA will receive approximately $88 million in cash for its 90 percent share. The sale is subject to regulatory approvals and is expected to close by the end of February. It culminates CA's multi-year effort to exit the business applications market and focus on the company's announced strategy of offering the industry's most complete management software portfolio. ACCPAC specializes in accounting, CRM, HR, warehouse management, manufacturing, EDI, and point-of-sale software for small and medium-sized businesses. "CA's strong commitment to addressing the enterprise management challenges of our customers has made us a world leader in our core management software markets," said CA Chairman and CEO Sanjay Kumar. "The sale of ACCPAC to Sage supports that focus -- while providing opportunities for ACCPAC employees and transitioning customers to a company that is ideally positioned to care for them." Financial Impact The sale of ACCPAC is expected to result in a book gain of approximately $88 million before taxes, which will be recorded upon closing of the transaction. The closing is expected in the company's fourth fiscal quarter ending March 31, 2004. The projected impact on operating (non-GAAP) earnings is expected to be immaterial in the December and March quarters. As a result of the proposed sale, CA is required to present the assets and liabilities of ACCPAC as "Assets Held for Sale" pursuant to Financial Accounting Standards Board Statement Number 144 "Accounting for the Impairment or Disposal of Long-Lived Assets." Therefore, beginning December 31, 2003, these assets and liabilities will be presented separately on the balance sheet, and the income statement will reflect the operating results of ACCPAC as discontinued operations, net of taxes. This change will cause CA's reported top-line revenue and related expenses to be reduced by ACCPAC's actual revenues and expenses, and CA's historical revenues and expenses will be reclassified accordingly. (Please refer to the table below for selected historical data related to ACCPAC.) CA estimates that ACCPAC will generate approximately $28 million in revenue and incur $27 million of expenses before taxes for the quarter ending December 31, 2003. As a result of the accounting treatment described above, CA's previous projections for revenue and expenses will be reduced by $28 million and $27 million, respectively, for that quarter. There will be a similar impact on the quarter ending March 31, 2004. Table 1 Computer Associates International, Inc. Selected Historical Financial Data Related To ACCPAC (In thousands) (Unaudited) Year ended Six Months ended March 31, September 30, Statement of Operations Data 2002 2003 2002 2003 Software Fees $44,466 $45,618 $18,950 $23,777 Maintenance 33,939 43,109 20,237 25,238 Total Revenues 78,405 88,727 39,187 49,015 Total Costs 88,281 83,300 40,066 49,327 Income (loss) before taxes $(9,876) $ 5,427 $ (879) $ (312) March 31, Sept. 30, Balance Sheet and Other Data 2002 2003 2003 Total Assets $65,259 $65,869 $54,007 Total Liabilities 67,343 57,683 45,426 Cash provided by operating activities (fytd) 2,358 21,027 4,703