Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Sep. 30, 2014 | Oct. 16, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'CA, INC. | ' |
Entity Central Index Key | '0000356028 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Current Fiscal Year End Date | '--03-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 444,906,148 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $3,193 | $3,252 |
Trade accounts receivable, net | 511 | 800 |
Deferred income taxes | 328 | 315 |
Other current assets | 199 | 192 |
Total current assets | 4,231 | 4,559 |
Property and equipment, net of accumulated depreciation of $845 and $828, respectively | 278 | 295 |
Goodwill | 5,811 | 5,922 |
Capitalized software and other intangible assets, net | 869 | 1,063 |
Deferred income taxes | 67 | 59 |
Other noncurrent assets, net | 116 | 118 |
Total assets | 11,372 | 12,016 |
Current liabilities: | ' | ' |
Current portion of long-term debt | 510 | 514 |
Accounts payable | 111 | 129 |
Accrued salaries, wages and commissions | 190 | 275 |
Accrued expenses and other current liabilities | 429 | 510 |
Deferred revenue (billed or collected) | 1,957 | 2,419 |
Taxes payable, other than income taxes payable | 32 | 66 |
Federal, state and foreign income taxes payable | 55 | 0 |
Deferred income taxes | 6 | 9 |
Total current liabilities | 3,290 | 3,922 |
Long-term debt, net of current portion | 1,253 | 1,252 |
Federal, state and foreign income taxes payable | 155 | 182 |
Deferred income taxes | 45 | 67 |
Deferred revenue (billed or collected) | 779 | 872 |
Other noncurrent liabilities | 107 | 151 |
Total liabilities | 5,629 | 6,446 |
Stockholders' equity: | ' | ' |
Preferred stock, no par value, 10,000,000 shares authorized; No shares issued and outstanding | 0 | 0 |
Common stock, $0.10 par value, 1,100,000,000 shares authorized; 589,695,081 and 589,695,081 shares issued; 440,334,597 and 438,740,478 shares outstanding, respectively | 59 | 59 |
Additional paid-in capital | 3,588 | 3,610 |
Retained earnings | 6,069 | 5,818 |
Accumulated other comprehensive loss | -255 | -171 |
Treasury stock, at cost, 149,360,484 and 150,954,603 shares, respectively | -3,718 | -3,746 |
Total stockholders' equity | 5,743 | 5,570 |
Total liabilities and stockholders' equity | $11,372 | $12,016 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accumulated depreciation | $845 | $828 |
Preferred stock, No par value (in dollars per share) | $0 | $0 |
Preferred stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, Shares issued | 0 | 0 |
Preferred stock, Shares outstanding | 0 | 0 |
Common stock, Par value (in dollars per share) | $0.10 | $0.10 |
Common stock, Shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, Shares issued | 589,695,081 | 589,695,081 |
Common stock, Shares outstanding | 440,334,597 | 438,740,478 |
Treasury stock, Shares | 149,360,484 | 150,954,603 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenue: | ' | ' | ' | ' |
Subscription and maintenance | $908 | $922 | $1,817 | $1,844 |
Professional services | 91 | 97 | 178 | 195 |
Software fees and other | 80 | 86 | 153 | 161 |
Total revenue | 1,079 | 1,105 | 2,148 | 2,200 |
Expenses: | ' | ' | ' | ' |
Costs of licensing and maintenance | 71 | 71 | 143 | 139 |
Cost of professional services | 88 | 88 | 169 | 176 |
Amortization of capitalized software costs | 75 | 69 | 142 | 135 |
Selling and marketing | 253 | 248 | 499 | 517 |
General and administrative | 87 | 91 | 179 | 182 |
Product development and enhancements | 150 | 142 | 300 | 274 |
Depreciation and amortization of other intangible assets | 34 | 37 | 68 | 73 |
Other expenses, net | 1 | 14 | 15 | 140 |
Total expenses before interest and income taxes | 759 | 760 | 1,515 | 1,636 |
Income from continuing operations before interest and income taxes | 320 | 345 | 633 | 564 |
Interest expense, net | 12 | 13 | 26 | 24 |
Income from continuing operations before income taxes | 308 | 332 | 607 | 540 |
Income tax expense (benefit) | 73 | 101 | 160 | -21 |
Income from continuing operations | 235 | 231 | 447 | 561 |
Income from discontinued operations, net of income taxes | 21 | 9 | 26 | 14 |
Net income | $256 | $240 | $473 | $575 |
Basic income per common share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.53 | $0.51 | $1.01 | $1.24 |
Income from discontinued operations (in dollars per share) | $0.05 | $0.02 | $0.06 | $0.03 |
Net income (in dollars per share) | $0.58 | $0.53 | $1.07 | $1.27 |
Basic weighted average shares used in computation | 440 | 448 | 440 | 449 |
Diluted income per common share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.53 | $0.51 | $1 | $1.23 |
Income from discontinued operations (in dollars per share) | $0.05 | $0.02 | $0.06 | $0.03 |
Net income (in dollars per share) | $0.58 | $0.53 | $1.06 | $1.26 |
Diluted weighted average shares used in computation | 441 | 450 | 441 | 450 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $256 | $240 | $473 | $575 |
Other comprehensive (loss) income: | ' | ' | ' | ' |
Foreign currency translation adjustments | -94 | 23 | -84 | -20 |
Total other comprehensive (loss) income | -94 | 23 | -84 | -20 |
Comprehensive income | $162 | $263 | $389 | $555 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities from continuing operations: | ' | ' |
Net income | $473 | $575 |
Income from discontinued operations | -26 | -14 |
Income from continuing operations | 447 | 561 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 210 | 208 |
Deferred income taxes | -49 | -59 |
Provision for bad debts | 1 | 5 |
Share-based compensation expense | 42 | 40 |
Asset impairments and other non-cash items | 0 | 4 |
Foreign currency transaction losses | 3 | 2 |
Changes in other operating assets and liabilities, net of effect of acquisitions: | ' | ' |
Decrease in trade accounts receivable | 263 | 259 |
Decrease in deferred revenue | -497 | -580 |
Decrease in taxes payable, net | -42 | -270 |
(Decrease) increase in accounts payable, accrued expenses and other | -22 | 12 |
Decrease in accrued salaries, wages and commissions | -79 | -71 |
Changes in other operating assets and liabilities | -45 | -35 |
Net cash provided by operating activities - continuing operations | 232 | 76 |
Investing activities from continuing operations: | ' | ' |
Acquisitions of businesses, net of cash acquired, and purchased software | -12 | -125 |
Purchases of property and equipment | -34 | -35 |
Capitalized software development costs | 0 | -35 |
Purchases of short-term investments | 0 | -9 |
Maturities of short-term investments | 0 | 184 |
Net cash used in investing activities - continuing operations | -46 | -20 |
Financing activities from continuing operations: | ' | ' |
Dividends paid | -222 | -228 |
Purchases of common stock | -50 | -200 |
Notional pooling borrowings | 2,703 | 1,609 |
Notional pooling repayments | -2,647 | -1,639 |
Debt borrowings | 0 | 498 |
Debt repayments | -5 | -8 |
Debt issuance costs | 0 | -4 |
Exercise of common stock options and other | 14 | 55 |
Net cash (used in) provided by financing activities - continuing operations | -207 | 83 |
Effect of exchange rate changes on cash | -185 | 36 |
Net change in cash and cash equivalents - continuing operations | -206 | 175 |
Cash (used in) provided by operating activities - discontinued operations | -23 | 22 |
Cash provided by investing activities - discontinued operations | 170 | 0 |
Net effect of discontinued operations on cash and cash equivalents | 147 | 22 |
(Decrease) increase in cash and cash equivalents | -59 | 197 |
Cash and cash equivalents at beginning of period | 3,252 | 2,593 |
Cash and cash equivalents at end of period | $3,193 | $2,790 |
Accounting_Policies
Accounting Policies | 6 Months Ended | |
Sep. 30, 2014 | ||
Accounting Policies [Abstract] | ' | |
ACCOUNTING POLICIES | ' | |
NOTE A – ACCOUNTING POLICIES | ||
Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements of CA, Inc. (Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, for interim financial information and with the instructions to Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014 (2014 Form 10-K). | ||
In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature. | ||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, these estimates may ultimately differ from actual results. | ||
Operating results for the three and six months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2015. | ||
Divestitures: In the second quarter of fiscal year 2015, the Company sold its CA arcserve data protection solution assets (arcserve). In the fourth quarter of fiscal year 2014, the Company identified its CA ERwin Data Modeling solution assets (ERwin) as available for sale. The results of operations associated with these businesses have been presented as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. The effects of the discontinued operations were immaterial to the Company’s Condensed Consolidated Balance Sheets at September 30, 2014 and March 31, 2014. See Note B, “Divestitures,” for additional information. | ||
Cash and Cash Equivalents: The Company’s cash and cash equivalents are held in numerous locations throughout the world, with approximately 63% being held by the Company’s foreign subsidiaries outside the United States at September 30, 2014. | ||
Fair Value Measurements: Fair value is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market participants. The Company is required to classify certain assets and liabilities based on the following fair value hierarchy: | ||
• | Level 1: Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; | |
• | Level 2: Quoted prices for identical assets and liabilities in markets that are not active, or quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and | |
• | Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. | |
See Note H, “Fair Value Measurements,” for additional information. | ||
Deferred Revenue (Billed or Collected): The Company accounts for unearned revenue on billed amounts due from customers on a gross basis. Unearned revenue on billed installments (collected or uncollected) is reported as deferred revenue in the liability section of the Company’s Condensed Consolidated Balance Sheets. Deferred revenue (billed or collected) excludes unbilled contractual commitments executed under license and maintenance agreements that will be billed in future periods. See Note F, “Deferred Revenue,” for additional information. | ||
New Accounting Pronouncements: In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for annual and interim periods in fiscal years beginning after December 15, 2016. Early application is not permitted. ASU 2014-09 is effective for the Company in its first quarter of fiscal year 2018 using either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. ASU 2014-09 is expected to have a significant impact on the Company’s revenue recognition policies and disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Divestitures
Divestitures | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | |||||||
DIVESTITURES | ' | |||||||
NOTE B – DIVESTITURES | ||||||||
In July 2014, the Company sold arcserve for approximately $170 million and recognized a gain on disposal of approximately $19 million, including tax expense of approximately $77 million. The effective tax rate on the disposal was adversely affected by non-deductible goodwill of $109 million. In the fourth quarter of fiscal year 2014, the Company identified ERwin as available for sale. The divestiture of arcserve and the planned divestiture of ERwin result from an effort to rationalize the Company’s product portfolio within the Enterprise Solutions segment. | ||||||||
The income from discontinued operations relating to both ERwin and the sale of arcserve for the three and six months ended September 30, 2014 and 2013 consisted of the following: | ||||||||
Three Months Ended | ||||||||
September 30, | ||||||||
(in millions) | 2014 | 2013 | ||||||
Subscription and maintenance | $ | 10 | $ | 23 | ||||
Software fees and other | 5 | 12 | ||||||
Total revenue | $ | 15 | $ | 35 | ||||
Income from operations of discontinued components, net of tax expense of $2 million and $5 million, respectively | $ | 2 | $ | 9 | ||||
Gain on disposal of discontinued component, net of tax | 19 | — | ||||||
Income from discontinued operations, net of tax | $ | 21 | $ | 9 | ||||
Six Months Ended | ||||||||
September 30, | ||||||||
(in millions) | 2014 | 2013 | ||||||
Subscription and maintenance | $ | 31 | $ | 45 | ||||
Software fees and other | 15 | 23 | ||||||
Total revenue | $ | 46 | $ | 68 | ||||
Income from operations of discontinued components, net of tax expense of $6 million and $9 million, respectively | $ | 7 | $ | 14 | ||||
Gain on disposal of discontinued component, net of tax | 19 | — | ||||||
Income from discontinued operations, net of tax | $ | 26 | $ | 14 | ||||
Severance_and_Exit_Costs
Severance and Exit Costs | 6 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||||||
SEVERANCE AND EXIT COSTS | ' | |||||||||||||||||||||||
NOTE C – SEVERANCE AND EXIT COSTS | ||||||||||||||||||||||||
Fiscal Year 2014 Rebalancing Plan: In fiscal year 2014, the Company’s Board of Directors approved and committed to a rebalancing plan (Fiscal 2014 Plan) to better align its business priorities. This included a termination of approximately 1,900 employees and global facility consolidations. Costs associated with the Fiscal 2014 Plan are presented in “Other expenses, net” in the Company’s Condensed Consolidated Statement of Operations. The total amount incurred to date for severance and facility exit costs under the Fiscal 2014 Plan is approximately $170 million and $22 million, respectively. The Company expects total costs of the Fiscal 2014 Plan to be approximately $195 million (including severance costs of approximately $173 million and global facility exit costs of approximately $22 million). Severance and facility consolidation actions under the Fiscal 2014 Plan were substantially completed by the end of fiscal year 2014. | ||||||||||||||||||||||||
Accrued severance and exit costs and changes in the accruals during the six months ended September 30, 2014 and 2013 were as follows: | ||||||||||||||||||||||||
(in millions) | Accrued | Expense | Change in | Payments | Accretion | Accrued | ||||||||||||||||||
Balance at | Estimate | and Other | Balance at | |||||||||||||||||||||
31-Mar-14 | 30-Sep-14 | |||||||||||||||||||||||
Severance charges | $ | 55 | $ | 21 | $ | (1 | ) | $ | (43 | ) | $ | (2 | ) | $ | 30 | |||||||||
Facility exit charges | 29 | — | — | (5 | ) | (1 | ) | 23 | ||||||||||||||||
Total accrued liabilities | $ | 84 | $ | 53 | ||||||||||||||||||||
(in millions) | Accrued | Expense | Change in | Payments | Accretion | Accrued | ||||||||||||||||||
Balance at | Estimate | and Other | Balance at | |||||||||||||||||||||
31-Mar-13 | 30-Sep-13 | |||||||||||||||||||||||
Severance charges | $ | 16 | $ | 111 | $ | (9 | ) | $ | (69 | ) | $ | 3 | $ | 52 | ||||||||||
Facility exit charges | 23 | 19 | — | (6 | ) | (3 | ) | 33 | ||||||||||||||||
Total accrued liabilities | $ | 39 | $ | 85 | ||||||||||||||||||||
Balances at September 30, 2014 and 2013 include facility exit accruals of approximately $11 million and $15 million, respectively, for plans and actions prior to fiscal year 2014. Balance at September 30, 2013 included a severance accrual of approximately $7 million for plans and actions prior to the Fiscal 2014 Plan. | ||||||||||||||||||||||||
The severance liabilities are included in “Accrued salaries, wages and commissions” in the Condensed Consolidated Balance Sheets. The facility exit liabilities are included in “Accrued expenses and other current liabilities” and “Other noncurrent liabilities” in the Condensed Consolidated Balance Sheets. | ||||||||||||||||||||||||
Accretion and other includes accretion of the Company’s lease obligations related to facility exits as well as changes in the assumptions related to future sublease income. These costs are included in “General and administrative” expense in the Condensed Consolidated Statements of Operations. |
Trade_Accounts_Receivable
Trade Accounts Receivable | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
TRADE ACCOUNTS RECEIVABLE | ' | |||||||
NOTE D – TRADE ACCOUNTS RECEIVABLE | ||||||||
Trade accounts receivable, net represents amounts due from the Company’s customers and is presented net of allowances. These balances include revenue recognized in advance of customer billings but do not include unbilled contractual commitments executed under license agreements. The components of “Trade accounts receivable, net” were as follows: | ||||||||
September 30, | March 31, | |||||||
2014 | 2014 | |||||||
(in millions) | ||||||||
Accounts receivable – billed | $ | 447 | $ | 739 | ||||
Accounts receivable – unbilled | 69 | 61 | ||||||
Other receivables | 13 | 19 | ||||||
Less: Allowances | (18 | ) | (19 | ) | ||||
Trade accounts receivable, net | $ | 511 | $ | 800 | ||||
Goodwill_Capitalized_Software_
Goodwill, Capitalized Software and Other Intangible Assets | 6 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS | ' | |||||||||||||||||||
NOTE E – GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS | ||||||||||||||||||||
The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at September 30, 2014 were as follows: | ||||||||||||||||||||
At September 30, 2014 | ||||||||||||||||||||
Gross | Less: Fully | Remaining | Accumulated | Net | ||||||||||||||||
Amortizable | Amortized | Amortizable | Amortization | Assets | ||||||||||||||||
Assets | Assets | Assets | on Remaining | |||||||||||||||||
Amortizable | ||||||||||||||||||||
Assets | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Purchased software products | $ | 5,698 | $ | 4,853 | $ | 845 | $ | 356 | $ | 489 | ||||||||||
Internally developed software products | 1,486 | 794 | 692 | 389 | 303 | |||||||||||||||
Other intangible assets | 839 | 491 | 348 | 271 | 77 | |||||||||||||||
Total capitalized software and other intangible assets | $ | 8,023 | $ | 6,138 | $ | 1,885 | $ | 1,016 | $ | 869 | ||||||||||
The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at March 31, 2014 were as follows: | ||||||||||||||||||||
At March 31, 2014 | ||||||||||||||||||||
Gross | Less: Fully | Remaining | Accumulated | Net | ||||||||||||||||
Amortizable | Amortized | Amortizable | Amortization | Assets | ||||||||||||||||
Assets | Assets | Assets | on Remaining | |||||||||||||||||
Amortizable | ||||||||||||||||||||
Assets | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Purchased software products | $ | 5,706 | $ | 4,849 | $ | 857 | $ | 309 | $ | 548 | ||||||||||
Internally developed software products | 1,561 | 757 | 804 | 397 | 407 | |||||||||||||||
Other intangible assets | 846 | 489 | 357 | 249 | 108 | |||||||||||||||
Total capitalized software and other intangible assets | $ | 8,113 | $ | 6,095 | $ | 2,018 | $ | 955 | $ | 1,063 | ||||||||||
Based on the capitalized software and other intangible assets recorded through September 30, 2014, the projected annual amortization expense for fiscal year 2015 and the next four fiscal years is expected to be as follows: | ||||||||||||||||||||
Year Ended March 31, | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Purchased software products | $ | 114 | $ | 110 | $ | 108 | $ | 104 | $ | 62 | ||||||||||
Internally developed software products | 149 | 109 | 79 | 37 | 10 | |||||||||||||||
Other intangible assets | 58 | 35 | 8 | 3 | 1 | |||||||||||||||
Total | $ | 321 | $ | 254 | $ | 195 | $ | 144 | $ | 73 | ||||||||||
In the second quarter of fiscal year 2015, the Company recorded an impairment of $13 million relating to capitalized software and other intangible assets within the Enterprise Solutions segment. This adjustment is a result of the Company’s continued effort to rationalize its product portfolio. The impairment was included in “Amortization of capitalized software costs” in the Condensed Consolidated Statement of Operations for the three and six months ended September 30, 2014. Amortization of capitalized software costs was not included in segment expenses (see Note O, “Segment Information,” for additional information). | ||||||||||||||||||||
The Company evaluates the useful lives and recoverability of capitalized software and other intangible assets when events or changes in circumstances indicate that an impairment may exist. These evaluations require complex assumptions about key factors such as future customer demand, technology trends and the impact of those factors on the technology the Company acquires and develops for its products. Impairments or revisions to useful lives could result from the use of alternative assumptions that reflect reasonably possible outcomes related to future customer demand or technology trends for assets within the Enterprise Solutions segment. | ||||||||||||||||||||
Goodwill activity by segment for the six months ended September 30, 2014 was as follows: | ||||||||||||||||||||
(in millions) | Mainframe Solutions | Enterprise Solutions | Services | Total | ||||||||||||||||
Balance at March 31, 2014 | $ | 4,178 | $ | 1,663 | $ | 81 | $ | 5,922 | ||||||||||||
Divestiture adjustment | — | (109 | ) | — | (109 | ) | ||||||||||||||
Foreign currency translation adjustment | — | (2 | ) | — | (2 | ) | ||||||||||||||
Balance at September 30, 2014 | $ | 4,178 | $ | 1,552 | $ | 81 | $ | 5,811 | ||||||||||||
Deferred_Revenue
Deferred Revenue | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||
DEFERRED REVENUE | ' | |||||||
NOTE F – DEFERRED REVENUE | ||||||||
The current and noncurrent components of “Deferred revenue (billed or collected)” at September 30, 2014 and March 31, 2014 were as follows: | ||||||||
September 30, | March 31, | |||||||
2014 | 2014 | |||||||
(in millions) | ||||||||
Current: | ||||||||
Subscription and maintenance | $ | 1,804 | $ | 2,237 | ||||
Professional services | 128 | 149 | ||||||
Software fees and other | 25 | 33 | ||||||
Total deferred revenue (billed or collected) – current | $ | 1,957 | $ | 2,419 | ||||
Noncurrent: | ||||||||
Subscription and maintenance | $ | 745 | $ | 845 | ||||
Professional services | 31 | 26 | ||||||
Software fees and other | 3 | 1 | ||||||
Total deferred revenue (billed or collected) – noncurrent | $ | 779 | $ | 872 | ||||
Total deferred revenue (billed or collected) | $ | 2,736 | $ | 3,291 | ||||
Derivatives
Derivatives | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||
DERIVATIVES | ' | |||||||||||||||
NOTE G – DERIVATIVES | ||||||||||||||||
The Company is exposed to financial market risks arising from changes in interest rates and foreign exchange rates. Changes in interest rates could affect the Company’s monetary assets and liabilities, and foreign exchange rate changes could affect the Company’s foreign currency denominated monetary assets and liabilities and forecasted transactions. The Company enters into derivative contracts with the intent of mitigating a portion of these risks. | ||||||||||||||||
Interest Rate Swaps: The Company has interest rate swaps with a total notional value of $500 million, which swap a total of $500 million of its 6.125% Senior Notes due December 2014 into floating interest rate debt through December 1, 2014. These swaps are designated as fair value hedges. | ||||||||||||||||
At September 30, 2014, the fair value of these derivatives was an asset of approximately $2 million, which is included in “Other current assets” in the Company’s Condensed Consolidated Balance Sheet. | ||||||||||||||||
At March 31, 2014, the fair value of these derivatives was an asset of approximately $8 million, which is included in “Other current assets” in the Company’s Condensed Consolidated Balance Sheet. | ||||||||||||||||
Foreign Currency Contracts: The Company enters into foreign currency option and forward contracts to manage foreign currency risks. The Company has not designated its foreign exchange derivatives as hedges. Accordingly, changes in fair value from these contracts are recorded as “Other expenses, net” in the Company’s Condensed Consolidated Statements of Operations. | ||||||||||||||||
At September 30, 2014, foreign currency contracts outstanding consisted of purchase and sales contracts with a total gross notional value of approximately $961 million and durations of less than six months. The net fair value of these contracts at September 30, 2014 was a net asset of approximately $22 million, of which approximately $25 million is included in “Other current assets” and approximately $3 million is included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheet. | ||||||||||||||||
At March 31, 2014, foreign currency contracts outstanding consisted of purchase and sales contracts with a total gross notional value of approximately $250 million and durations of less than three months. The net fair value of these contracts at March 31, 2014 was a net asset of approximately $1 million, of which approximately $2 million is included in “Other current assets” and approximately $1 million is included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheet. | ||||||||||||||||
A summary of the effect of the interest rate and foreign exchange derivatives on the Company’s Condensed Consolidated Statements of Operations was as follows: | ||||||||||||||||
Amount of Net Gain Recognized in the Condensed Consolidated Statements of Operations | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Interest expense, net – interest rate swaps designated as fair value hedges | $ | (3 | ) | $ | (3 | ) | $ | (6 | ) | $ | (6 | ) | ||||
Other expenses, net – foreign currency contracts | $ | (17 | ) | $ | (6 | ) | $ | (12 | ) | $ | (15 | ) | ||||
The Company is subject to collateral security arrangements with most of its major counterparties. These arrangements require the Company or the counterparty to post collateral when the derivative fair values exceed contractually established thresholds. The aggregate fair values of all derivative instruments under these collateralized arrangements were in a net asset position at September 30, 2014 and March 31, 2014. The Company posted no collateral at September 30, 2014 or March 31, 2014. Under these agreements, if the Company’s credit ratings had been downgraded one rating level, the Company would still not have been required to post collateral. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||||||||||||||
NOTE H – FAIR VALUE MEASUREMENTS | |||||||||||||||||||||||||
The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis at September 30, 2014 and March 31, 2014: | |||||||||||||||||||||||||
At September 30, 2014 | At March 31, 2014 | ||||||||||||||||||||||||
Fair Value | Estimated | Fair Value | Estimated | ||||||||||||||||||||||
Measurement Using | Fair | Measurement Using | Fair | ||||||||||||||||||||||
Input Types | Value | Input Types | Value | ||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Money market funds | $ | 1,040 | $ | — | $ | 1,040 | (1) | $ | 1,277 | $ | — | $ | 1,277 | (2) | |||||||||||
Foreign exchange derivatives (3) | — | 25 | 25 | — | 2 | 2 | |||||||||||||||||||
Interest rate derivatives (3) | — | 2 | 2 | — | 8 | 8 | |||||||||||||||||||
Total assets | $ | 1,040 | $ | 27 | $ | 1,067 | $ | 1,277 | $ | 10 | $ | 1,287 | |||||||||||||
Liabilities: | |||||||||||||||||||||||||
Foreign exchange derivatives (3) | $ | — | $ | 3 | $ | 3 | $ | — | $ | 1 | $ | 1 | |||||||||||||
Total liabilities | $ | — | $ | 3 | $ | 3 | $ | — | $ | 1 | $ | 1 | |||||||||||||
-1 | At September 30, 2014, the Company had approximately $1,040 million and less than $1 million of investments in money market funds classified as “Cash and cash equivalents” and “Other noncurrent assets, net” for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheet. | ||||||||||||||||||||||||
-2 | At March 31, 2014, the Company had approximately $1,277 million and less than $1 million of investments in money market funds classified as “Cash and cash equivalents” and “Other noncurrent assets, net” for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheet. | ||||||||||||||||||||||||
-3 | See Note G, “Derivatives” for additional information. Interest rate derivatives fair value excludes accrued interest. | ||||||||||||||||||||||||
At September 30, 2014 and March 31, 2014, the Company did not have any assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). | |||||||||||||||||||||||||
The carrying values of financial instruments classified as current assets and current liabilities, such as cash and cash equivalents, short-term investments, accounts payable, accrued expenses, and short-term borrowings, approximate fair value due to the short-term maturity of the instruments. | |||||||||||||||||||||||||
The following table presents the carrying amounts and estimated fair values of the Company’s other financial instruments that were not measured at fair value on a recurring basis at September 30, 2014 and March 31, 2014: | |||||||||||||||||||||||||
At September 30, 2014 | At March 31, 2014 | ||||||||||||||||||||||||
(in millions) | Carrying | Estimated | Carrying | Estimated | |||||||||||||||||||||
Value | Fair Value | Value | Fair Value | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Total debt (1) | $ | 1,763 | $ | 1,859 | $ | 1,766 | $ | 1,884 | |||||||||||||||||
Facility exit reserve (2) | $ | 23 | $ | 25 | $ | 29 | $ | 33 | |||||||||||||||||
-1 | Estimated fair value of total debt is based on quoted prices for similar liabilities for which significant inputs are observable except for certain long-term lease obligations, for which fair value approximates carrying value (Level 2). | ||||||||||||||||||||||||
-2 | Estimated fair value for the facility exit reserve is determined using the Company’s incremental borrowing rate at September 30, 2014 and March 31, 2014. At September 30, 2014 and March 31, 2014, the facility exit reserve included approximately $9 million and $11 million, respectively, in “Accrued expenses and other current liabilities” and approximately $14 million and $18 million, respectively, in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets (Level 3). |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
NOTE I – COMMITMENTS AND CONTINGENCIES | |
The Company, various subsidiaries, and certain current and former officers have been or, from time to time, may be named as defendants in various lawsuits and claims arising in the normal course of business. The Company may also become involved with contract issues and disputes with customers, including government customers. | |
On March 24, 2014, the U.S. Department of Justice (DOJ) filed under seal in the United States District Court for the District of Columbia a complaint against the Company in partial intervention under the qui tam provisions of the civil False Claims Act (FCA). The underlying complaint was filed under seal by an individual plaintiff on August 24, 2009. On May 29, 2014, the case was unsealed. Both the DOJ and the individual plaintiff have filed amended complaints. The current complaints relate to government sales transactions under the Company’s General Services Administration (GSA) schedule contract, entered into in 2002 and extended until present through subsequent amendments. In sum and substance, the current complaints allege that the Company provided inaccurate commercial discounting information to the GSA during contract negotiations and that, as a result, the GSA’s contract discount was lower than it otherwise would have been. In addition, the complaints allege that the Company failed to apply the full negotiated discount in some instances and to pay sufficient rebates pursuant to the contract’s price reduction clause. In addition to FCA claims, the current complaints also assert common law causes of action. The DOJ complaint seeks an unspecified amount of damages, including treble damages and civil penalties. The complaint by the individual plaintiff alleges that the U.S. government has suffered damages in excess of $100 million and seeks an unspecified amount of damages, including treble damages and civil penalties. The Company has filed motions to dismiss the current complaints. Those motions are pending and discussions with the DOJ and GSA are continuing. The Company cannot predict the amount of damages likely to result from this matter. Although the timing and ultimate outcome of this matter cannot be determined, the Company believes that the material aspects of the liability theories set forth in the complaints are unfounded. The Company also believes that it has meritorious defenses and intends to vigorously contest the lawsuit. | |
Based on the Company’s experience, management believes that the damages amounts claimed in a case are not a meaningful indicator of the potential liability. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of cases. The Company believes that it has meritorious defenses in connection with its current lawsuits and material claims and disputes, and intends to vigorously contest each of them. | |
In the opinion of the Company’s management based upon information currently available to the Company, while the outcome of these lawsuits, claims and disputes is uncertain, the likely results of these lawsuits, claims and disputes are not expected, either individually or in the aggregate, to have a material adverse effect on the Company’s financial position, results of operations or cash flows, although the effect could be material to the Company’s results of operations or cash flows for any interim reporting period. For some of these matters, the Company is unable to estimate a range of reasonably possible loss due to the stage of the matter and/or other particular circumstances of the matter. For others, a range of reasonably possible loss can be estimated. For those matters for which such a range can be estimated, the Company estimates that, in the aggregate, the range of reasonably possible loss is from zero to $30 million. This is in addition to amounts, if any, that have been accrued for those matters. | |
The Company is obligated to indemnify its officers and directors under certain circumstances to the fullest extent permitted by Delaware law. As a part of that obligation, the Company may, from time to time, advance certain attorneys’ fees and expenses incurred by officers and directors in various lawsuits and investigations, as permitted under Delaware law. |
Stockholders_Equity
Stockholders' Equity | 6 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Equity [Abstract] | ' | ||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||
NOTE J – STOCKHOLDERS’ EQUITY | |||||||||
Stock Repurchases: In May 2014, the Company’s Board of Directors approved a stock repurchase program that authorizes the Company to acquire up to $1 billion of its common stock. During the six months ended September 30, 2014, the Company repurchased approximately 1.7 million shares of its common stock for approximately $50 million. At September 30, 2014, the Company remained authorized to purchase approximately $950 million of its common stock under its current stock repurchase program. | |||||||||
Accumulated Other Comprehensive Loss: Foreign currency translation losses included in “Accumulated other comprehensive loss” in the Company’s Condensed Consolidated Balance Sheets at September 30, 2014 and March 31, 2014 were approximately $255 million and $171 million, respectively. | |||||||||
Cash Dividends: The Company’s Board of Directors declared the following dividends during the six months ended September 30, 2014 and 2013: | |||||||||
Six Months Ended September 30, 2014: | |||||||||
(in millions, except per share amounts) | |||||||||
Declaration Date | Dividend Per Share | Record Date | Total Amount | Payment Date | |||||
May 15, 2014 | $0.25 | May 29, 2014 | $111 | June 17, 2014 | |||||
July 31, 2014 | $0.25 | August 21, 2014 | $111 | September 9, 2014 | |||||
Six Months Ended September 30, 2013: | |||||||||
(in millions, except per share amounts) | |||||||||
Declaration Date | Dividend Per Share | Record Date | Total Amount | Payment Date | |||||
May 9, 2013 | $0.25 | May 23, 2013 | $114 | June 11, 2013 | |||||
August 1, 2013 | $0.25 | August 22, 2013 | $114 | September 10, 2013 |
Income_From_Continuing_Operati
Income From Continuing Operations Per Common Share | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE | ' | |||||||||||||||
NOTE K – INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE | ||||||||||||||||
Basic net income per common share excludes dilution and is calculated by dividing net income allocable to common shares by the weighted average number of common shares outstanding for the period. Diluted net income per common share is calculated by dividing net income allocable to common shares by the weighted average number of common shares, as adjusted for the potential dilutive effect of non-participating share-based awards. | ||||||||||||||||
The following table presents basic and diluted income from continuing operations per common share information for the three and six months ended September 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions, except per share amounts) | ||||||||||||||||
Basic income from continuing operations per common share: | ||||||||||||||||
Income from continuing operations | $ | 235 | $ | 231 | $ | 447 | $ | 561 | ||||||||
Less: Income from continuing operations allocable to participating securities | (2 | ) | (2 | ) | (4 | ) | (6 | ) | ||||||||
Income from continuing operations allocable to common shares | $ | 233 | $ | 229 | $ | 443 | $ | 555 | ||||||||
Weighted average common shares outstanding | 440 | 448 | 440 | 449 | ||||||||||||
Basic income from continuing operations per common share | $ | 0.53 | $ | 0.51 | $ | 1.01 | $ | 1.24 | ||||||||
Diluted income from continuing operations per common share: | ||||||||||||||||
Income from continuing operations | $ | 235 | $ | 231 | $ | 447 | $ | 561 | ||||||||
Less: Income from continuing operations allocable to participating securities | (2 | ) | (2 | ) | (4 | ) | (6 | ) | ||||||||
Income from continuing operations allocable to common shares | $ | 233 | $ | 229 | $ | 443 | $ | 555 | ||||||||
Weighted average shares outstanding and common share equivalents: | ||||||||||||||||
Weighted average common shares outstanding | 440 | 448 | 440 | 449 | ||||||||||||
Weighted average effect of share-based payment awards | 1 | 2 | 1 | 1 | ||||||||||||
Denominator in calculation of diluted income per share | 441 | 450 | 441 | 450 | ||||||||||||
Diluted income from continuing operations per common share | $ | 0.53 | $ | 0.51 | $ | 1 | $ | 1.23 | ||||||||
For the three months ended September 30, 2014 and 2013, respectively, approximately 2 million and 2 million shares of Company common stock underlying restricted stock awards and options to purchase common stock were excluded from the calculation because their effect on income per share was anti-dilutive during the respective periods. Weighted average restricted stock awards of approximately 5 million and 5 million for the three months ended September 30, 2014 and 2013, respectively, were considered participating securities in the calculation of net income allocable to common stockholders. | ||||||||||||||||
For the six months ended September 30, 2014 and 2013, respectively, approximately 2 million and 2 million shares of Company common stock underlying restricted stock awards and options to purchase common stock were excluded from the calculation because their effect on income per share was anti-dilutive during the respective periods. Weighted average restricted stock awards of approximately 4 million and 5 million for the six months ended September 30, 2014 and 2013, respectively, were considered participating securities in the calculation of net income allocable to common stockholders. |
Accounting_for_ShareBased_Comp
Accounting for Share-Based Compensation | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
ACCOUNTING FOR SHARE-BASED COMPENSATION | ' | |||||||||||||||
NOTE L – ACCOUNTING FOR SHARE-BASED COMPENSATION | ||||||||||||||||
The Company recognized share-based compensation in the following line items in the Condensed Consolidated Statements of Operations for the periods indicated: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Costs of licensing and maintenance | $ | 1 | $ | 1 | $ | 2 | $ | 2 | ||||||||
Cost of professional services | 1 | 1 | 2 | 2 | ||||||||||||
Selling and marketing | 8 | 7 | 15 | 14 | ||||||||||||
General and administrative | 7 | 6 | 13 | 12 | ||||||||||||
Product development and enhancements | 5 | 5 | 10 | 10 | ||||||||||||
Share-based compensation expense before tax | $ | 22 | $ | 20 | $ | 42 | $ | 40 | ||||||||
Income tax benefit | (7 | ) | (6 | ) | (13 | ) | (13 | ) | ||||||||
Net share-based compensation expense | $ | 15 | $ | 14 | $ | 29 | $ | 27 | ||||||||
The following table summarizes information about unrecognized share-based compensation costs at September 30, 2014: | ||||||||||||||||
Unrecognized Share-Based Compensation Costs | Weighted Average Period Expected to be Recognized | |||||||||||||||
(in millions) | (in years) | |||||||||||||||
Stock option awards | $ | 7 | 2 | |||||||||||||
Restricted stock units | 23 | 2.2 | ||||||||||||||
Restricted stock awards | 81 | 2.2 | ||||||||||||||
Performance share units | 29 | 2.8 | ||||||||||||||
Total unrecognized share-based compensation costs | $ | 140 | 2.3 | |||||||||||||
There were no capitalized share-based compensation costs for the three and six months ended September 30, 2014 and 2013. | ||||||||||||||||
The value of performance share unit (PSU) awards is determined using the closing price of the Company’s common stock on the last trading day of the quarter until the PSUs are granted. Compensation costs for the PSUs are amortized over the requisite service periods based on the expected level of achievement of the performance targets. At the conclusion of the performance periods for the PSUs, the applicable number of shares of restricted stock awards (RSAs), restricted stock units (RSUs) or unrestricted shares granted may vary based upon the level of achievement of the performance targets and the approval of the Company’s Compensation and Human Resources Committee (which may reduce any award for any reason in its discretion). | ||||||||||||||||
For the six months ended September 30, 2014 and 2013, the Company issued stock options for approximately 0.6 million shares and 1.6 million shares, respectively. The weighted average fair values and assumptions used for the options granted were as follows: | ||||||||||||||||
Six Months Ended | ||||||||||||||||
September 30, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted average fair value | $ | 5.87 | $ | 5.19 | ||||||||||||
Dividend yield | 3.29 | % | 4.05 | % | ||||||||||||
Expected volatility factor (1) | 29 | % | 30 | % | ||||||||||||
Risk-free interest rate (2) | 2.1 | % | 1.5 | % | ||||||||||||
Expected life (in years) (3) | 6 | 6 | ||||||||||||||
-1 | Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the market prices of the Company’s traded options. | |||||||||||||||
-2 | The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant. | |||||||||||||||
-3 | The expected life is the number of years the Company estimates that options will be outstanding prior to exercise. The Company’s computation of expected life was determined based on the simplified method (the average of the vesting period and option term). | |||||||||||||||
The shares under the 1-year PSU awards for the fiscal year 2014 and 2013 incentive plan years under the Company’s long-term incentive plans were granted in the first six months of fiscal years 2015 and 2014, respectively. The awards vest 34% on the date of grant and 33% on the first and second anniversaries of the grant date. The table below summarizes the RSAs and RSUs granted under these PSUs: | ||||||||||||||||
RSAs | RSUs | |||||||||||||||
Incentive Plans for Fiscal Years | Performance Period | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | |||||||||||
(in millions) | (in millions) | |||||||||||||||
2014 | 1 year | 0.7 | $29.91 | 0.1 | $28.92 | |||||||||||
2013 | 1 year | 0.4 | $27.11 | 0.1 | $26.12 | |||||||||||
Share-based awards were granted under the Company’s fiscal year 2014 and 2013 sales retention equity programs in the first six months of fiscal years 2015 and 2014, respectively. These awards vest on the third anniversary of the grant date. The table below summarizes the RSAs and RSUs granted under these programs: | ||||||||||||||||
RSAs | RSUs | |||||||||||||||
Incentive Plans for Fiscal Years | Performance Period | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | |||||||||||
(in millions) | (in millions) | |||||||||||||||
2014 | 1 year | 0.2 | $28.69 | 0.1 | $25.73 | |||||||||||
2013 | 1 year | 0.2 | $27.11 | 0.1 | $24.13 | |||||||||||
The table below summarizes all of the RSAs and RSUs, including grants made pursuant to the long-term incentive plans discussed above, granted during the three and six months ended September 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(shares in millions) | ||||||||||||||||
RSAs: | ||||||||||||||||
Shares | 0.1 | — | (1) | 3 | 2.7 | |||||||||||
Weighted average grant date fair value (2) | $ | 28.29 | $ | 30.39 | $ | 28.95 | $ | 27.01 | ||||||||
RSUs: | ||||||||||||||||
Shares | — | (1) | — | (1) | 0.8 | 0.8 | ||||||||||
Weighted average grant date fair value (3) | $ | 26.33 | $ | 30.13 | $ | 26.91 | $ | 25.37 | ||||||||
-1 | Less than 0.1 million. | |||||||||||||||
-2 | The fair value is based on the quoted market value of the Company’s common stock on the grant date. | |||||||||||||||
-3 | The fair value is based on the quoted market value of the Company’s common stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate. | |||||||||||||||
Employee Stock Purchase Plan: The Company maintains the 2012 Employee Stock Purchase Plan (ESPP) for all eligible employees. The ESPP offer period is semi-annual and allows participants to purchase the Company’s common stock at 95% of the closing price of the stock on the last day of the offer period. The ESPP is non-compensatory. For the six-month offer period ended June 30, 2014, the Company issued approximately 0.1 million shares under the ESPP at $27.30 per share. As of September 30, 2014, approximately 29.5 million shares are available for future issuances under the ESPP. |
Income_Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
INCOME TAXES | ' |
NOTE M – INCOME TAXES | |
Income tax expense for the three and six months ended September 30, 2014 was approximately $73 million and $160 million, respectively, compared with income tax expense of approximately $101 million for the three months ended September 30, 2013 and an income tax benefit of approximately $21 million for the six months ended September 30, 2013. For the three and six months ended September 30, 2014, the Company recognized a discrete tax benefit of approximately $19 million resulting from the resolutions of uncertain tax positions upon the completion of the examination of the Company's U.S. federal income tax returns for the tax years ended March 31, 2011 and 2012. For the six months ended September 30, 2013, the Company recognized a net discrete tax benefit of approximately $179 million, resulting primarily from the resolutions of uncertain tax positions upon the completion of the examination of the Company’s U.S. federal income tax returns for the tax years ended March 31, 2005, 2006 and 2007. The examinations of the Company’s U.S. federal income tax returns have been concluded through the fiscal year ended March 31, 2012. | |
The Company’s estimated annual effective tax rate, which excludes the impact of discrete items, for the six months ended September 30, 2014 and 2013 was 29.2% and 29.2%, respectively. Changes in tax laws, the outcome of tax audits and any other changes in potential tax liabilities may result in additional tax expense or benefit in fiscal year 2015, which are not considered in the Company’s estimated annual effective tax rate. While the Company does not currently view any such items as individually material to the results of the Company’s consolidated financial position or results of operations, the impact of certain items may yield additional tax expense or benefit in the remaining quarters of fiscal year 2015 and the Company is anticipating a fiscal year 2015 effective tax rate of approximately 30%. |
Supplemental_Statement_of_Cash
Supplemental Statement of Cash Flows Information | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Supplemental Cash Flow Elements [Abstract] | ' | |||||||
SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION | ' | |||||||
NOTE N – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION | ||||||||
For the six months ended September 30, 2014 and 2013, interest payments, net were approximately $40 million and $31 million, respectively, and income taxes paid, net were approximately $181 million and $246 million, respectively. For the six months ended September 30, 2014 and 2013, the excess tax benefits from share-based incentive awards included in financing activities from continuing operations were approximately $3 million and $3 million, respectively. | ||||||||
Non-cash financing activities for the six months ended September 30, 2014 and 2013 consisted of treasury common shares issued in connection with the following: share-based incentive awards issued under the Company’s equity compensation plans of approximately $42 million (net of approximately $27 million of income taxes withheld) and $46 million (net of approximately $27 million of income taxes withheld), respectively; and discretionary stock contributions to the CA, Inc. Savings Harvest Plan of approximately $26 million and $28 million, respectively. Non-cash financing activities for the six months ended September 30, 2014 and 2013 included approximately $3 million and $2 million, respectively, in treasury common shares issued in connection with the Company’s Employee Stock Purchase Plan. | ||||||||
The Company uses a notional pooling arrangement with an international bank to help manage global liquidity. Under this pooling arrangement, the Company and its participating subsidiaries may maintain either cash deposit or borrowing positions through local currency accounts with the bank, so long as the aggregate position of the global pool is a notionally calculated net cash deposit. Because it maintains a security interest in the cash deposits and has the right to offset the cash deposits against the borrowings, the bank provides the Company and its participating subsidiaries favorable interest terms on both. The activity under this cash pooling arrangement for the six months ended September 30, 2014 and 2013 was as follows: | ||||||||
Six Months Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Total borrowings outstanding at beginning of period (1) | $ | 139 | $ | 136 | ||||
Borrowings | 2,703 | 1,609 | ||||||
Repayments | (2,647 | ) | (1,639 | ) | ||||
Foreign currency exchange effect | (56 | ) | 20 | |||||
Total borrowings outstanding at end of period (1) | $ | 139 | $ | 126 | ||||
-1 | Included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheets. |
Segment_Information
Segment Information | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||||
NOTE O – SEGMENT INFORMATION | ||||||||||||||||
The Company’s Mainframe Solutions and Enterprise Solutions segments comprise its software business organized by the nature of the Company’s software offerings and the platform on which the products operate. The Services segment comprises product implementation, consulting, customer education and customer training, including those directly related to the Mainframe Solutions and Enterprise Solutions software that the Company sells to its customers. | ||||||||||||||||
Segment expenses do not include share-based compensation expense; amortization of purchased software; amortization of other intangible assets; certain foreign exchange derivative hedging gains and losses; costs associated with the Company’s Fiscal 2014 Plan; and other miscellaneous costs. The Company considers all costs of internally developed software as segment expense in the period the costs are incurred and as a result, the Company will add back capitalized internal software costs and exclude amortization of internally developed software costs previously capitalized from segment expenses. A measure of segment assets is not currently provided to the Company’s Chief Executive Officer and has therefore not been disclosed. | ||||||||||||||||
The Company’s segment information for the three and six months ended September 30, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended September 30, 2014 | Mainframe | Enterprise | Services | Total | ||||||||||||
(dollars in millions) | Solutions | Solutions | ||||||||||||||
Revenue | $ | 610 | $ | 378 | $ | 91 | $ | 1,079 | ||||||||
Expenses | 234 | 327 | 89 | 650 | ||||||||||||
Segment profit | $ | 376 | $ | 51 | $ | 2 | $ | 429 | ||||||||
Segment operating margin | 62 | % | 13 | % | 2 | % | 40 | % | ||||||||
Depreciation | $ | 11 | $ | 7 | $ | — | $ | 18 | ||||||||
Reconciliation of segment profit to income from continuing operations before income taxes for the three months ended September 30, 2014: | ||||||||||||||||
(in millions) | ||||||||||||||||
Segment profit | $ | 429 | ||||||||||||||
Less: | ||||||||||||||||
Purchased software amortization | 31 | |||||||||||||||
Other intangibles amortization | 16 | |||||||||||||||
Software development costs capitalized | — | |||||||||||||||
Internally developed software products amortization | 44 | |||||||||||||||
Share-based compensation expense | 22 | |||||||||||||||
Other expenses, net (1) | (4 | ) | ||||||||||||||
Interest expense, net | 12 | |||||||||||||||
Income from continuing operations before income taxes | $ | 308 | ||||||||||||||
-1 | Other expenses, net consists of approximately $12 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||||||||||
Six Months Ended September 30, 2014 | Mainframe | Enterprise | Services | Total | ||||||||||||
(dollars in millions) | Solutions | Solutions | ||||||||||||||
Revenue | $ | 1,224 | $ | 746 | $ | 178 | $ | 2,148 | ||||||||
Expenses | 469 | 652 | 171 | 1,292 | ||||||||||||
Segment profit | $ | 755 | $ | 94 | $ | 7 | $ | 856 | ||||||||
Segment operating margin | 62 | % | 13 | % | 4 | % | 40 | % | ||||||||
Depreciation | $ | 23 | $ | 14 | $ | — | $ | 37 | ||||||||
Reconciliation of segment profit to income from continuing operations before income taxes for the six months ended September 30, 2014: | ||||||||||||||||
(in millions) | ||||||||||||||||
Segment profit | $ | 856 | ||||||||||||||
Less: | ||||||||||||||||
Purchased software amortization | 59 | |||||||||||||||
Other intangibles amortization | 31 | |||||||||||||||
Software development costs capitalized | — | |||||||||||||||
Internally developed software products amortization | 83 | |||||||||||||||
Share-based compensation expense | 42 | |||||||||||||||
Other expenses, net (1) | 8 | |||||||||||||||
Interest expense, net | 26 | |||||||||||||||
Income from continuing operations before income taxes | $ | 607 | ||||||||||||||
-1 | Other expenses, net consists of approximately $21 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||||||||||
Three Months Ended September 30, 2013 | Mainframe | Enterprise | Services | Total | ||||||||||||
(dollars in millions) | Solutions | Solutions | ||||||||||||||
Revenue | $ | 624 | $ | 384 | $ | 97 | $ | 1,105 | ||||||||
Expenses | 232 | 337 | 88 | 657 | ||||||||||||
Segment profit | $ | 392 | $ | 47 | $ | 9 | $ | 448 | ||||||||
Segment operating margin | 63 | % | 12 | % | 9 | % | 41 | % | ||||||||
Depreciation | $ | 13 | $ | 9 | $ | — | $ | 22 | ||||||||
Reconciliation of segment profit to income from continuing operations before income taxes for the three months ended September 30, 2013: | ||||||||||||||||
(in millions) | ||||||||||||||||
Segment profit | $ | 448 | ||||||||||||||
Less: | ||||||||||||||||
Purchased software amortization | 31 | |||||||||||||||
Other intangibles amortization | 15 | |||||||||||||||
Software development costs capitalized | (8 | ) | ||||||||||||||
Internally developed software products amortization | 38 | |||||||||||||||
Share-based compensation expense | 20 | |||||||||||||||
Other expenses, net (1) | 7 | |||||||||||||||
Interest expense, net | 13 | |||||||||||||||
Income from continuing operations before income taxes | $ | 332 | ||||||||||||||
-1 | Other expenses, net consists of approximately $2 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||||||||||
Six Months Ended September 30, 2013 | Mainframe | Enterprise | Services | Total | ||||||||||||
(dollars in millions) | Solutions | Solutions | ||||||||||||||
Revenue | $ | 1,243 | $ | 762 | $ | 195 | $ | 2,200 | ||||||||
Expenses | 475 | 688 | 178 | 1,341 | ||||||||||||
Segment profit | $ | 768 | $ | 74 | $ | 17 | $ | 859 | ||||||||
Segment operating margin | 62 | % | 10 | % | 9 | % | 39 | % | ||||||||
Depreciation | $ | 27 | $ | 17 | $ | — | $ | 44 | ||||||||
Reconciliation of segment profit to income from continuing operations before income taxes for the six months ended September 30, 2013: | ||||||||||||||||
(in millions) | ||||||||||||||||
Segment profit | $ | 859 | ||||||||||||||
Less: | ||||||||||||||||
Purchased software amortization | 59 | |||||||||||||||
Other intangibles amortization | 29 | |||||||||||||||
Software development costs capitalized | (31 | ) | ||||||||||||||
Internally developed software products amortization | 76 | |||||||||||||||
Share-based compensation expense | 40 | |||||||||||||||
Other expenses, net (1) | 122 | |||||||||||||||
Interest expense, net | 24 | |||||||||||||||
Income from continuing operations before income taxes | $ | 540 | ||||||||||||||
-1 | Other expenses, net consists of approximately $119 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||||||||||
The table below summarizes the Company’s revenue from the United States and from international (i.e., non-U.S.) locations: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
United States | $ | 656 | $ | 671 | $ | 1,299 | $ | 1,328 | ||||||||
EMEA (1) | 259 | 267 | 518 | 531 | ||||||||||||
Other | 164 | 167 | 331 | 341 | ||||||||||||
Total revenue | $ | 1,079 | $ | 1,105 | $ | 2,148 | $ | 2,200 | ||||||||
-1 | Consists of Europe, the Middle East and Africa. |
Accounting_Policies_Policies
Accounting Policies (Policies) | 6 Months Ended | |
Sep. 30, 2014 | ||
Accounting Policies [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements of CA, Inc. (Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, for interim financial information and with the instructions to Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014 (2014 Form 10-K). | ||
In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature. | ||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, these estimates may ultimately differ from actual results. | ||
Operating results for the three and six months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2015. | ||
Divestitures | ' | |
Divestitures: In the second quarter of fiscal year 2015, the Company sold its CA arcserve data protection solution assets (arcserve). In the fourth quarter of fiscal year 2014, the Company identified its CA ERwin Data Modeling solution assets (ERwin) as available for sale. The results of operations associated with these businesses have been presented as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. The effects of the discontinued operations were immaterial to the Company’s Condensed Consolidated Balance Sheets at September 30, 2014 and March 31, 2014. See Note B, “Divestitures,” for additional information. | ||
Cash and Cash Equivalents | ' | |
Cash and Cash Equivalents: The Company’s cash and cash equivalents are held in numerous locations throughout the world, with approximately 63% being held by the Company’s foreign subsidiaries outside the United States at September 30, 2014. | ||
Fair Value Measurements | ' | |
Fair Value Measurements: Fair value is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market participants. The Company is required to classify certain assets and liabilities based on the following fair value hierarchy: | ||
• | Level 1: Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; | |
• | Level 2: Quoted prices for identical assets and liabilities in markets that are not active, or quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and | |
• | Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. | |
See Note H, “Fair Value Measurements,” for additional information. | ||
Deferred Revenue (Billed or Collected) | ' | |
Deferred Revenue (Billed or Collected): The Company accounts for unearned revenue on billed amounts due from customers on a gross basis. Unearned revenue on billed installments (collected or uncollected) is reported as deferred revenue in the liability section of the Company’s Condensed Consolidated Balance Sheets. Deferred revenue (billed or collected) excludes unbilled contractual commitments executed under license and maintenance agreements that will be billed in future periods. See Note F, “Deferred Revenue,” for additional information. | ||
New Accounting Pronouncements | ' | |
New Accounting Pronouncements: In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for annual and interim periods in fiscal years beginning after December 15, 2016. Early application is not permitted. ASU 2014-09 is effective for the Company in its first quarter of fiscal year 2018 using either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. ASU 2014-09 is expected to have a significant impact on the Company’s revenue recognition policies and disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Divestitures_Tables
Divestitures (Tables) | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | |||||||
Income from discontinued operations | ' | |||||||
The income from discontinued operations relating to both ERwin and the sale of arcserve for the three and six months ended September 30, 2014 and 2013 consisted of the following: | ||||||||
Three Months Ended | ||||||||
September 30, | ||||||||
(in millions) | 2014 | 2013 | ||||||
Subscription and maintenance | $ | 10 | $ | 23 | ||||
Software fees and other | 5 | 12 | ||||||
Total revenue | $ | 15 | $ | 35 | ||||
Income from operations of discontinued components, net of tax expense of $2 million and $5 million, respectively | $ | 2 | $ | 9 | ||||
Gain on disposal of discontinued component, net of tax | 19 | — | ||||||
Income from discontinued operations, net of tax | $ | 21 | $ | 9 | ||||
Six Months Ended | ||||||||
September 30, | ||||||||
(in millions) | 2014 | 2013 | ||||||
Subscription and maintenance | $ | 31 | $ | 45 | ||||
Software fees and other | 15 | 23 | ||||||
Total revenue | $ | 46 | $ | 68 | ||||
Income from operations of discontinued components, net of tax expense of $6 million and $9 million, respectively | $ | 7 | $ | 14 | ||||
Gain on disposal of discontinued component, net of tax | 19 | — | ||||||
Income from discontinued operations, net of tax | $ | 26 | $ | 14 | ||||
Severance_and_Exit_Costs_Table
Severance and Exit Costs (Tables) | 6 Months Ended | |||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||||||
Accrued severance and exit costs activity | ' | |||||||||||||||||||||||
Accrued severance and exit costs and changes in the accruals during the six months ended September 30, 2014 and 2013 were as follows: | ||||||||||||||||||||||||
(in millions) | Accrued | Expense | Change in | Payments | Accretion | Accrued | ||||||||||||||||||
Balance at | Estimate | and Other | Balance at | |||||||||||||||||||||
31-Mar-14 | 30-Sep-14 | |||||||||||||||||||||||
Severance charges | $ | 55 | $ | 21 | $ | (1 | ) | $ | (43 | ) | $ | (2 | ) | $ | 30 | |||||||||
Facility exit charges | 29 | — | — | (5 | ) | (1 | ) | 23 | ||||||||||||||||
Total accrued liabilities | $ | 84 | $ | 53 | ||||||||||||||||||||
(in millions) | Accrued | Expense | Change in | Payments | Accretion | Accrued | ||||||||||||||||||
Balance at | Estimate | and Other | Balance at | |||||||||||||||||||||
31-Mar-13 | 30-Sep-13 | |||||||||||||||||||||||
Severance charges | $ | 16 | $ | 111 | $ | (9 | ) | $ | (69 | ) | $ | 3 | $ | 52 | ||||||||||
Facility exit charges | 23 | 19 | — | (6 | ) | (3 | ) | 33 | ||||||||||||||||
Total accrued liabilities | $ | 39 | $ | 85 | ||||||||||||||||||||
Trade_Accounts_Receivable_Tabl
Trade Accounts Receivable (Tables) | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Components of trade accounts receivable, net | ' | |||||||
The components of “Trade accounts receivable, net” were as follows: | ||||||||
September 30, | March 31, | |||||||
2014 | 2014 | |||||||
(in millions) | ||||||||
Accounts receivable – billed | $ | 447 | $ | 739 | ||||
Accounts receivable – unbilled | 69 | 61 | ||||||
Other receivables | 13 | 19 | ||||||
Less: Allowances | (18 | ) | (19 | ) | ||||
Trade accounts receivable, net | $ | 511 | $ | 800 | ||||
Goodwill_Capitalized_Software_1
Goodwill, Capitalized Software and Other Intangible Assets (Tables) | 6 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
Capitalized software and other intangible assets | ' | |||||||||||||||||||
The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at September 30, 2014 were as follows: | ||||||||||||||||||||
At September 30, 2014 | ||||||||||||||||||||
Gross | Less: Fully | Remaining | Accumulated | Net | ||||||||||||||||
Amortizable | Amortized | Amortizable | Amortization | Assets | ||||||||||||||||
Assets | Assets | Assets | on Remaining | |||||||||||||||||
Amortizable | ||||||||||||||||||||
Assets | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Purchased software products | $ | 5,698 | $ | 4,853 | $ | 845 | $ | 356 | $ | 489 | ||||||||||
Internally developed software products | 1,486 | 794 | 692 | 389 | 303 | |||||||||||||||
Other intangible assets | 839 | 491 | 348 | 271 | 77 | |||||||||||||||
Total capitalized software and other intangible assets | $ | 8,023 | $ | 6,138 | $ | 1,885 | $ | 1,016 | $ | 869 | ||||||||||
The gross carrying amounts and accumulated amortization for capitalized software and other intangible assets at March 31, 2014 were as follows: | ||||||||||||||||||||
At March 31, 2014 | ||||||||||||||||||||
Gross | Less: Fully | Remaining | Accumulated | Net | ||||||||||||||||
Amortizable | Amortized | Amortizable | Amortization | Assets | ||||||||||||||||
Assets | Assets | Assets | on Remaining | |||||||||||||||||
Amortizable | ||||||||||||||||||||
Assets | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Purchased software products | $ | 5,706 | $ | 4,849 | $ | 857 | $ | 309 | $ | 548 | ||||||||||
Internally developed software products | 1,561 | 757 | 804 | 397 | 407 | |||||||||||||||
Other intangible assets | 846 | 489 | 357 | 249 | 108 | |||||||||||||||
Total capitalized software and other intangible assets | $ | 8,113 | $ | 6,095 | $ | 2,018 | $ | 955 | $ | 1,063 | ||||||||||
Projected annual amortization expense | ' | |||||||||||||||||||
Based on the capitalized software and other intangible assets recorded through September 30, 2014, the projected annual amortization expense for fiscal year 2015 and the next four fiscal years is expected to be as follows: | ||||||||||||||||||||
Year Ended March 31, | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Purchased software products | $ | 114 | $ | 110 | $ | 108 | $ | 104 | $ | 62 | ||||||||||
Internally developed software products | 149 | 109 | 79 | 37 | 10 | |||||||||||||||
Other intangible assets | 58 | 35 | 8 | 3 | 1 | |||||||||||||||
Total | $ | 321 | $ | 254 | $ | 195 | $ | 144 | $ | 73 | ||||||||||
Goodwill activity by segment | ' | |||||||||||||||||||
Goodwill activity by segment for the six months ended September 30, 2014 was as follows: | ||||||||||||||||||||
(in millions) | Mainframe Solutions | Enterprise Solutions | Services | Total | ||||||||||||||||
Balance at March 31, 2014 | $ | 4,178 | $ | 1,663 | $ | 81 | $ | 5,922 | ||||||||||||
Divestiture adjustment | — | (109 | ) | — | (109 | ) | ||||||||||||||
Foreign currency translation adjustment | — | (2 | ) | — | (2 | ) | ||||||||||||||
Balance at September 30, 2014 | $ | 4,178 | $ | 1,552 | $ | 81 | $ | 5,811 | ||||||||||||
Deferred_Revenue_Tables
Deferred Revenue (Tables) | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||
Components of deferred revenue (billed or collected) | ' | |||||||
The current and noncurrent components of “Deferred revenue (billed or collected)” at September 30, 2014 and March 31, 2014 were as follows: | ||||||||
September 30, | March 31, | |||||||
2014 | 2014 | |||||||
(in millions) | ||||||||
Current: | ||||||||
Subscription and maintenance | $ | 1,804 | $ | 2,237 | ||||
Professional services | 128 | 149 | ||||||
Software fees and other | 25 | 33 | ||||||
Total deferred revenue (billed or collected) – current | $ | 1,957 | $ | 2,419 | ||||
Noncurrent: | ||||||||
Subscription and maintenance | $ | 745 | $ | 845 | ||||
Professional services | 31 | 26 | ||||||
Software fees and other | 3 | 1 | ||||||
Total deferred revenue (billed or collected) – noncurrent | $ | 779 | $ | 872 | ||||
Total deferred revenue (billed or collected) | $ | 2,736 | $ | 3,291 | ||||
Derivatives_Tables
Derivatives (Tables) | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||
Effect of interest rate and foreign exchange derivatives | ' | |||||||||||||||
A summary of the effect of the interest rate and foreign exchange derivatives on the Company’s Condensed Consolidated Statements of Operations was as follows: | ||||||||||||||||
Amount of Net Gain Recognized in the Condensed Consolidated Statements of Operations | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Interest expense, net – interest rate swaps designated as fair value hedges | $ | (3 | ) | $ | (3 | ) | $ | (6 | ) | $ | (6 | ) | ||||
Other expenses, net – foreign currency contracts | $ | (17 | ) | $ | (6 | ) | $ | (12 | ) | $ | (15 | ) |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||||||||||
The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis at September 30, 2014 and March 31, 2014: | |||||||||||||||||||||||||
At September 30, 2014 | At March 31, 2014 | ||||||||||||||||||||||||
Fair Value | Estimated | Fair Value | Estimated | ||||||||||||||||||||||
Measurement Using | Fair | Measurement Using | Fair | ||||||||||||||||||||||
Input Types | Value | Input Types | Value | ||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Money market funds | $ | 1,040 | $ | — | $ | 1,040 | (1) | $ | 1,277 | $ | — | $ | 1,277 | (2) | |||||||||||
Foreign exchange derivatives (3) | — | 25 | 25 | — | 2 | 2 | |||||||||||||||||||
Interest rate derivatives (3) | — | 2 | 2 | — | 8 | 8 | |||||||||||||||||||
Total assets | $ | 1,040 | $ | 27 | $ | 1,067 | $ | 1,277 | $ | 10 | $ | 1,287 | |||||||||||||
Liabilities: | |||||||||||||||||||||||||
Foreign exchange derivatives (3) | $ | — | $ | 3 | $ | 3 | $ | — | $ | 1 | $ | 1 | |||||||||||||
Total liabilities | $ | — | $ | 3 | $ | 3 | $ | — | $ | 1 | $ | 1 | |||||||||||||
-1 | At September 30, 2014, the Company had approximately $1,040 million and less than $1 million of investments in money market funds classified as “Cash and cash equivalents” and “Other noncurrent assets, net” for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheet. | ||||||||||||||||||||||||
-2 | At March 31, 2014, the Company had approximately $1,277 million and less than $1 million of investments in money market funds classified as “Cash and cash equivalents” and “Other noncurrent assets, net” for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheet. | ||||||||||||||||||||||||
-3 | See Note G, “Derivatives” for additional information. Interest rate derivatives fair value excludes accrued interest. | ||||||||||||||||||||||||
Carrying amounts and estimated fair values of other financial instruments not measured at fair value on a recurring basis | ' | ||||||||||||||||||||||||
The following table presents the carrying amounts and estimated fair values of the Company’s other financial instruments that were not measured at fair value on a recurring basis at September 30, 2014 and March 31, 2014: | |||||||||||||||||||||||||
At September 30, 2014 | At March 31, 2014 | ||||||||||||||||||||||||
(in millions) | Carrying | Estimated | Carrying | Estimated | |||||||||||||||||||||
Value | Fair Value | Value | Fair Value | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Total debt (1) | $ | 1,763 | $ | 1,859 | $ | 1,766 | $ | 1,884 | |||||||||||||||||
Facility exit reserve (2) | $ | 23 | $ | 25 | $ | 29 | $ | 33 | |||||||||||||||||
-1 | Estimated fair value of total debt is based on quoted prices for similar liabilities for which significant inputs are observable except for certain long-term lease obligations, for which fair value approximates carrying value (Level 2). | ||||||||||||||||||||||||
-2 | Estimated fair value for the facility exit reserve is determined using the Company’s incremental borrowing rate at September 30, 2014 and March 31, 2014. At September 30, 2014 and March 31, 2014, the facility exit reserve included approximately $9 million and $11 million, respectively, in “Accrued expenses and other current liabilities” and approximately $14 million and $18 million, respectively, in “Other noncurrent liabilities” in the Company’s Condensed Consolidated Balance Sheets (Level 3). |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 6 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Equity [Abstract] | ' | ||||||||
Cash dividends | ' | ||||||||
Cash Dividends: The Company’s Board of Directors declared the following dividends during the six months ended September 30, 2014 and 2013: | |||||||||
Six Months Ended September 30, 2014: | |||||||||
(in millions, except per share amounts) | |||||||||
Declaration Date | Dividend Per Share | Record Date | Total Amount | Payment Date | |||||
May 15, 2014 | $0.25 | May 29, 2014 | $111 | June 17, 2014 | |||||
July 31, 2014 | $0.25 | August 21, 2014 | $111 | September 9, 2014 | |||||
Six Months Ended September 30, 2013: | |||||||||
(in millions, except per share amounts) | |||||||||
Declaration Date | Dividend Per Share | Record Date | Total Amount | Payment Date | |||||
May 9, 2013 | $0.25 | May 23, 2013 | $114 | June 11, 2013 | |||||
August 1, 2013 | $0.25 | August 22, 2013 | $114 | September 10, 2013 |
Income_From_Continuing_Operati1
Income From Continuing Operations Per Common Share (Tables) | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Reconciliation of basic and diluted income from continuing operations per common share | ' | |||||||||||||||
The following table presents basic and diluted income from continuing operations per common share information for the three and six months ended September 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions, except per share amounts) | ||||||||||||||||
Basic income from continuing operations per common share: | ||||||||||||||||
Income from continuing operations | $ | 235 | $ | 231 | $ | 447 | $ | 561 | ||||||||
Less: Income from continuing operations allocable to participating securities | (2 | ) | (2 | ) | (4 | ) | (6 | ) | ||||||||
Income from continuing operations allocable to common shares | $ | 233 | $ | 229 | $ | 443 | $ | 555 | ||||||||
Weighted average common shares outstanding | 440 | 448 | 440 | 449 | ||||||||||||
Basic income from continuing operations per common share | $ | 0.53 | $ | 0.51 | $ | 1.01 | $ | 1.24 | ||||||||
Diluted income from continuing operations per common share: | ||||||||||||||||
Income from continuing operations | $ | 235 | $ | 231 | $ | 447 | $ | 561 | ||||||||
Less: Income from continuing operations allocable to participating securities | (2 | ) | (2 | ) | (4 | ) | (6 | ) | ||||||||
Income from continuing operations allocable to common shares | $ | 233 | $ | 229 | $ | 443 | $ | 555 | ||||||||
Weighted average shares outstanding and common share equivalents: | ||||||||||||||||
Weighted average common shares outstanding | 440 | 448 | 440 | 449 | ||||||||||||
Weighted average effect of share-based payment awards | 1 | 2 | 1 | 1 | ||||||||||||
Denominator in calculation of diluted income per share | 441 | 450 | 441 | 450 | ||||||||||||
Diluted income from continuing operations per common share | $ | 0.53 | $ | 0.51 | $ | 1 | $ | 1.23 | ||||||||
Accounting_for_ShareBased_Comp1
Accounting for Share-Based Compensation (Tables) | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Recognized share-based compensation | ' | |||||||||||||||
The Company recognized share-based compensation in the following line items in the Condensed Consolidated Statements of Operations for the periods indicated: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Costs of licensing and maintenance | $ | 1 | $ | 1 | $ | 2 | $ | 2 | ||||||||
Cost of professional services | 1 | 1 | 2 | 2 | ||||||||||||
Selling and marketing | 8 | 7 | 15 | 14 | ||||||||||||
General and administrative | 7 | 6 | 13 | 12 | ||||||||||||
Product development and enhancements | 5 | 5 | 10 | 10 | ||||||||||||
Share-based compensation expense before tax | $ | 22 | $ | 20 | $ | 42 | $ | 40 | ||||||||
Income tax benefit | (7 | ) | (6 | ) | (13 | ) | (13 | ) | ||||||||
Net share-based compensation expense | $ | 15 | $ | 14 | $ | 29 | $ | 27 | ||||||||
Unrecognized share-based compensation costs | ' | |||||||||||||||
The following table summarizes information about unrecognized share-based compensation costs at September 30, 2014: | ||||||||||||||||
Unrecognized Share-Based Compensation Costs | Weighted Average Period Expected to be Recognized | |||||||||||||||
(in millions) | (in years) | |||||||||||||||
Stock option awards | $ | 7 | 2 | |||||||||||||
Restricted stock units | 23 | 2.2 | ||||||||||||||
Restricted stock awards | 81 | 2.2 | ||||||||||||||
Performance share units | 29 | 2.8 | ||||||||||||||
Total unrecognized share-based compensation costs | $ | 140 | 2.3 | |||||||||||||
Weighted average fair values and assumptions used for options granted | ' | |||||||||||||||
The weighted average fair values and assumptions used for the options granted were as follows: | ||||||||||||||||
Six Months Ended | ||||||||||||||||
September 30, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted average fair value | $ | 5.87 | $ | 5.19 | ||||||||||||
Dividend yield | 3.29 | % | 4.05 | % | ||||||||||||
Expected volatility factor (1) | 29 | % | 30 | % | ||||||||||||
Risk-free interest rate (2) | 2.1 | % | 1.5 | % | ||||||||||||
Expected life (in years) (3) | 6 | 6 | ||||||||||||||
-1 | Expected volatility is measured using historical daily price changes of the Company’s stock over the respective expected term of the options and the implied volatility derived from the market prices of the Company’s traded options. | |||||||||||||||
-2 | The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant. | |||||||||||||||
-3 | The expected life is the number of years the Company estimates that options will be outstanding prior to exercise. The Company’s computation of expected life was determined based on the simplified method (the average of the vesting period and option term). | |||||||||||||||
Summary of RSAs and RSUs granted under 1-year PSUs for fiscal year 2014 and 2013 Incentive Plans | ' | |||||||||||||||
The table below summarizes the RSAs and RSUs granted under these PSUs: | ||||||||||||||||
RSAs | RSUs | |||||||||||||||
Incentive Plans for Fiscal Years | Performance Period | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | |||||||||||
(in millions) | (in millions) | |||||||||||||||
2014 | 1 year | 0.7 | $29.91 | 0.1 | $28.92 | |||||||||||
2013 | 1 year | 0.4 | $27.11 | 0.1 | $26.12 | |||||||||||
Summary of RSAs and RSUs granted under 1-year PSUs for fiscal year 2014 and 2013 Sales Retention Equity Programs | ' | |||||||||||||||
The table below summarizes the RSAs and RSUs granted under these programs: | ||||||||||||||||
RSAs | RSUs | |||||||||||||||
Incentive Plans for Fiscal Years | Performance Period | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | |||||||||||
(in millions) | (in millions) | |||||||||||||||
2014 | 1 year | 0.2 | $28.69 | 0.1 | $25.73 | |||||||||||
2013 | 1 year | 0.2 | $27.11 | 0.1 | $24.13 | |||||||||||
Summary of all RSAs and RSUs granted | ' | |||||||||||||||
The table below summarizes all of the RSAs and RSUs, including grants made pursuant to the long-term incentive plans discussed above, granted during the three and six months ended September 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(shares in millions) | ||||||||||||||||
RSAs: | ||||||||||||||||
Shares | 0.1 | — | (1) | 3 | 2.7 | |||||||||||
Weighted average grant date fair value (2) | $ | 28.29 | $ | 30.39 | $ | 28.95 | $ | 27.01 | ||||||||
RSUs: | ||||||||||||||||
Shares | — | (1) | — | (1) | 0.8 | 0.8 | ||||||||||
Weighted average grant date fair value (3) | $ | 26.33 | $ | 30.13 | $ | 26.91 | $ | 25.37 | ||||||||
-1 | Less than 0.1 million. | |||||||||||||||
-2 | The fair value is based on the quoted market value of the Company’s common stock on the grant date. | |||||||||||||||
-3 | The fair value is based on the quoted market value of the Company’s common stock on the grant date reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate. |
Supplemental_Statement_of_Cash1
Supplemental Statement of Cash Flows Information (Tables) | 6 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Supplemental Cash Flow Elements [Abstract] | ' | |||||||
Activity under cash pooling arrangement | ' | |||||||
The activity under this cash pooling arrangement for the six months ended September 30, 2014 and 2013 was as follows: | ||||||||
Six Months Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Total borrowings outstanding at beginning of period (1) | $ | 139 | $ | 136 | ||||
Borrowings | 2,703 | 1,609 | ||||||
Repayments | (2,647 | ) | (1,639 | ) | ||||
Foreign currency exchange effect | (56 | ) | 20 | |||||
Total borrowings outstanding at end of period (1) | $ | 139 | $ | 126 | ||||
-1 | Included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheets. |
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Segment information | ' | |||||||||||||||
Three Months Ended September 30, 2014 | Mainframe | Enterprise | Services | Total | ||||||||||||
(dollars in millions) | Solutions | Solutions | ||||||||||||||
Revenue | $ | 610 | $ | 378 | $ | 91 | $ | 1,079 | ||||||||
Expenses | 234 | 327 | 89 | 650 | ||||||||||||
Segment profit | $ | 376 | $ | 51 | $ | 2 | $ | 429 | ||||||||
Segment operating margin | 62 | % | 13 | % | 2 | % | 40 | % | ||||||||
Depreciation | $ | 11 | $ | 7 | $ | — | $ | 18 | ||||||||
Six Months Ended September 30, 2014 | Mainframe | Enterprise | Services | Total | ||||||||||||
(dollars in millions) | Solutions | Solutions | ||||||||||||||
Revenue | $ | 1,224 | $ | 746 | $ | 178 | $ | 2,148 | ||||||||
Expenses | 469 | 652 | 171 | 1,292 | ||||||||||||
Segment profit | $ | 755 | $ | 94 | $ | 7 | $ | 856 | ||||||||
Segment operating margin | 62 | % | 13 | % | 4 | % | 40 | % | ||||||||
Depreciation | $ | 23 | $ | 14 | $ | — | $ | 37 | ||||||||
Six Months Ended September 30, 2013 | Mainframe | Enterprise | Services | Total | ||||||||||||
(dollars in millions) | Solutions | Solutions | ||||||||||||||
Revenue | $ | 1,243 | $ | 762 | $ | 195 | $ | 2,200 | ||||||||
Expenses | 475 | 688 | 178 | 1,341 | ||||||||||||
Segment profit | $ | 768 | $ | 74 | $ | 17 | $ | 859 | ||||||||
Segment operating margin | 62 | % | 10 | % | 9 | % | 39 | % | ||||||||
Depreciation | $ | 27 | $ | 17 | $ | — | $ | 44 | ||||||||
Three Months Ended September 30, 2013 | Mainframe | Enterprise | Services | Total | ||||||||||||
(dollars in millions) | Solutions | Solutions | ||||||||||||||
Revenue | $ | 624 | $ | 384 | $ | 97 | $ | 1,105 | ||||||||
Expenses | 232 | 337 | 88 | 657 | ||||||||||||
Segment profit | $ | 392 | $ | 47 | $ | 9 | $ | 448 | ||||||||
Segment operating margin | 63 | % | 12 | % | 9 | % | 41 | % | ||||||||
Depreciation | $ | 13 | $ | 9 | $ | — | $ | 22 | ||||||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | |||||||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes for the six months ended September 30, 2014: | ||||||||||||||||
(in millions) | ||||||||||||||||
Segment profit | $ | 856 | ||||||||||||||
Less: | ||||||||||||||||
Purchased software amortization | 59 | |||||||||||||||
Other intangibles amortization | 31 | |||||||||||||||
Software development costs capitalized | — | |||||||||||||||
Internally developed software products amortization | 83 | |||||||||||||||
Share-based compensation expense | 42 | |||||||||||||||
Other expenses, net (1) | 8 | |||||||||||||||
Interest expense, net | 26 | |||||||||||||||
Income from continuing operations before income taxes | $ | 607 | ||||||||||||||
-1 | Other expenses, net consists of approximately $21 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes for the three months ended September 30, 2014: | ||||||||||||||||
(in millions) | ||||||||||||||||
Segment profit | $ | 429 | ||||||||||||||
Less: | ||||||||||||||||
Purchased software amortization | 31 | |||||||||||||||
Other intangibles amortization | 16 | |||||||||||||||
Software development costs capitalized | — | |||||||||||||||
Internally developed software products amortization | 44 | |||||||||||||||
Share-based compensation expense | 22 | |||||||||||||||
Other expenses, net (1) | (4 | ) | ||||||||||||||
Interest expense, net | 12 | |||||||||||||||
Income from continuing operations before income taxes | $ | 308 | ||||||||||||||
-1 | Other expenses, net consists of approximately $12 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes for the three months ended September 30, 2013: | ||||||||||||||||
(in millions) | ||||||||||||||||
Segment profit | $ | 448 | ||||||||||||||
Less: | ||||||||||||||||
Purchased software amortization | 31 | |||||||||||||||
Other intangibles amortization | 15 | |||||||||||||||
Software development costs capitalized | (8 | ) | ||||||||||||||
Internally developed software products amortization | 38 | |||||||||||||||
Share-based compensation expense | 20 | |||||||||||||||
Other expenses, net (1) | 7 | |||||||||||||||
Interest expense, net | 13 | |||||||||||||||
Income from continuing operations before income taxes | $ | 332 | ||||||||||||||
-1 | Other expenses, net consists of approximately $2 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||||||||||
Reconciliation of segment profit to income from continuing operations before income taxes for the six months ended September 30, 2013: | ||||||||||||||||
(in millions) | ||||||||||||||||
Segment profit | $ | 859 | ||||||||||||||
Less: | ||||||||||||||||
Purchased software amortization | 59 | |||||||||||||||
Other intangibles amortization | 29 | |||||||||||||||
Software development costs capitalized | (31 | ) | ||||||||||||||
Internally developed software products amortization | 76 | |||||||||||||||
Share-based compensation expense | 40 | |||||||||||||||
Other expenses, net (1) | 122 | |||||||||||||||
Interest expense, net | 24 | |||||||||||||||
Income from continuing operations before income taxes | $ | 540 | ||||||||||||||
-1 | Other expenses, net consists of approximately $119 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||||||||||
Revenue from the United States and international locations | ' | |||||||||||||||
The table below summarizes the Company’s revenue from the United States and from international (i.e., non-U.S.) locations: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
United States | $ | 656 | $ | 671 | $ | 1,299 | $ | 1,328 | ||||||||
EMEA (1) | 259 | 267 | 518 | 531 | ||||||||||||
Other | 164 | 167 | 331 | 341 | ||||||||||||
Total revenue | $ | 1,079 | $ | 1,105 | $ | 2,148 | $ | 2,200 | ||||||||
-1 | Consists of Europe, the Middle East and Africa. |
Accounting_Policies_Details
Accounting Policies (Details) | Sep. 30, 2014 |
Accounting Policies [Abstract] | ' |
Percentage of cash and cash equivalents held by the Company's foreign subsidiaries outside the United States | 63.00% |
Divestitures_1_Details
Divestitures 1 (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income from discontinued operations | ' | ' | ' | ' |
Income from discontinued operations, net of tax | $21 | $9 | $26 | $14 |
Discontinued Components [Member] | ' | ' | ' | ' |
Income from discontinued operations | ' | ' | ' | ' |
Total revenue | 15 | 35 | 46 | 68 |
Income from operations of discontinued components, net of tax expense | 2 | 9 | 7 | 14 |
Gain on disposal of discontinued component, net of tax | 19 | 0 | 19 | 0 |
Income from discontinued operations, net of tax | 21 | 9 | 26 | 14 |
Tax expense on income from operations of discontinued components | 2 | 5 | 6 | 9 |
Discontinued Components [Member] | Subscription and Maintenance [Member] | ' | ' | ' | ' |
Income from discontinued operations | ' | ' | ' | ' |
Total revenue | 10 | 23 | 31 | 45 |
Discontinued Components [Member] | Software Fees and Other [Member] | ' | ' | ' | ' |
Income from discontinued operations | ' | ' | ' | ' |
Total revenue | $5 | $12 | $15 | $23 |
Divestitures_2_Details
Divestitures 2 (Details) (USD $) | 6 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 | Jul. 31, 2014 |
Arcserve [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Proceeds from sale of discontinued component | ' | $170 |
Gain on disposal of discontinued component, net of tax | ' | 19 |
Tax expense related to gain on disposal of discontinued component | ' | 77 |
Goodwill written off related to sale of discontinued component | $109 | $109 |
Severance_and_Exit_Costs_1_Det
Severance and Exit Costs 1 (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Severance Charges [Member] | Severance Charges [Member] | Facility Exit Charges [Member] | Facility Exit Charges [Member] | ||||
Accrued severance and exit costs activity | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued beginning balance | $53 | $84 | $85 | $39 | $55 | $16 | $29 | $23 |
Expense | ' | ' | ' | ' | 21 | 111 | 0 | 19 |
Change in estimate | ' | ' | ' | ' | -1 | -9 | 0 | 0 |
Payments | ' | ' | ' | ' | -43 | -69 | -5 | -6 |
Accretion and other | ' | ' | ' | ' | -2 | 3 | -1 | -3 |
Accrued ending balance | $53 | $84 | $85 | $39 | $30 | $52 | $23 | $33 |
Severance_and_Exit_Costs_2_Det
Severance and Exit Costs 2 (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Severance [Member] | Severance [Member] | Severance [Member] | Severance [Member] | Facility Exit [Member] | Facility Exit [Member] | Facility Exit [Member] | Facility Exit [Member] | Fiscal 2014 Plan [Member] | Fiscal 2014 Plan [Member] | Fiscal 2014 Plan [Member] | Plans and Actions Prior to Fiscal 2014 Plan [Member] | Plans and Actions Prior to Fiscal 2014 Plan [Member] | Plans and Actions Prior to Fiscal 2014 Plan [Member] | ||||
Employee | Severance [Member] | Facility Exit [Member] | Severance [Member] | Facility Exit [Member] | Facility Exit [Member] | |||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Workforce rebalancing (number of employees) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,900 | ' | ' | ' | ' | ' |
Cost incurred to date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $170 | $22 | ' | ' | ' |
Expected cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 195 | 173 | 22 | ' | ' | ' |
Accrued balance | $53 | $84 | $85 | $39 | $30 | $55 | $52 | $16 | $23 | $29 | $33 | $23 | ' | ' | ' | $7 | $11 | $15 |
Trade_Accounts_Receivable_Deta
Trade Accounts Receivable (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Millions, unless otherwise specified | ||
Components of trade accounts receivable, net | ' | ' |
Accounts receivable - billed | $447 | $739 |
Accounts receivable - unbilled | 69 | 61 |
Other receivables | 13 | 19 |
Less: Allowances | -18 | -19 |
Trade accounts receivable, net | $511 | $800 |
Goodwill_Capitalized_Software_2
Goodwill, Capitalized Software and Other Intangible Assets 1 (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Millions, unless otherwise specified | ||
Capitalized software and other intangible assets | ' | ' |
Gross amortizable assets | $8,023 | $8,113 |
Less: Fully amortized assets | 6,138 | 6,095 |
Remaining amortizable assets | 1,885 | 2,018 |
Accumulated amortization on remaining amortizable assets | 1,016 | 955 |
Net assets | 869 | 1,063 |
Purchased Software Products [Member] | ' | ' |
Capitalized software and other intangible assets | ' | ' |
Gross amortizable assets | 5,698 | 5,706 |
Less: Fully amortized assets | 4,853 | 4,849 |
Remaining amortizable assets | 845 | 857 |
Accumulated amortization on remaining amortizable assets | 356 | 309 |
Net assets | 489 | 548 |
Internally Developed Software Products [Member] | ' | ' |
Capitalized software and other intangible assets | ' | ' |
Gross amortizable assets | 1,486 | 1,561 |
Less: Fully amortized assets | 794 | 757 |
Remaining amortizable assets | 692 | 804 |
Accumulated amortization on remaining amortizable assets | 389 | 397 |
Net assets | 303 | 407 |
Other Intangible Assets [Member] | ' | ' |
Capitalized software and other intangible assets | ' | ' |
Gross amortizable assets | 839 | 846 |
Less: Fully amortized assets | 491 | 489 |
Remaining amortizable assets | 348 | 357 |
Accumulated amortization on remaining amortizable assets | 271 | 249 |
Net assets | $77 | $108 |
Goodwill_Capitalized_Software_3
Goodwill, Capitalized Software and Other Intangible Assets 2 (Details) (USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Projected annual amortization expense | ' |
2015 | $321 |
2016 | 254 |
2017 | 195 |
2018 | 144 |
2019 | 73 |
Purchased Software Products [Member] | ' |
Projected annual amortization expense | ' |
2015 | 114 |
2016 | 110 |
2017 | 108 |
2018 | 104 |
2019 | 62 |
Internally Developed Software Products [Member] | ' |
Projected annual amortization expense | ' |
2015 | 149 |
2016 | 109 |
2017 | 79 |
2018 | 37 |
2019 | 10 |
Other Intangible Assets [Member] | ' |
Projected annual amortization expense | ' |
2015 | 58 |
2016 | 35 |
2017 | 8 |
2018 | 3 |
2019 | $1 |
Goodwill_Capitalized_Software_4
Goodwill, Capitalized Software and Other Intangible Assets 3 (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Goodwill activity by segment | ' |
Balance at March 31, 2014 | $5,922 |
Divestiture adjustment | -109 |
Foreign currency translation adjustment | -2 |
Balance at September 30, 2014 | 5,811 |
Mainframe Solutions [Member] | ' |
Goodwill activity by segment | ' |
Balance at March 31, 2014 | 4,178 |
Divestiture adjustment | 0 |
Foreign currency translation adjustment | 0 |
Balance at September 30, 2014 | 4,178 |
Enterprise Solutions [Member] | ' |
Goodwill activity by segment | ' |
Balance at March 31, 2014 | 1,663 |
Divestiture adjustment | -109 |
Foreign currency translation adjustment | -2 |
Balance at September 30, 2014 | 1,552 |
Services [Member] | ' |
Goodwill activity by segment | ' |
Balance at March 31, 2014 | 81 |
Divestiture adjustment | 0 |
Foreign currency translation adjustment | 0 |
Balance at September 30, 2014 | $81 |
Goodwill_Capitalized_Software_5
Goodwill, Capitalized Software and Other Intangible Assets 4 (Details) (USD $) | 3 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Uncertainty, Continued marketability of goods and services | ' | 'The Company evaluates the useful lives and recoverability of capitalized software and other intangible assets when events or changes in circumstances indicate that an impairment may exist. These evaluations require complex assumptions about key factors such as future customer demand, technology trends and the impact of those factors on the technology the Company acquires and develops for its products.B Impairments or revisions to useful lives could result from the use of alternative assumptions that reflect reasonably possible outcomes related to future customer demand or technology trends for assets within the Enterprise Solutions segment. |
Enterprise Solutions [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Impairment of capitalized software and other intangible assets | $13 | $13 |
Deferred_Revenue_Details
Deferred Revenue (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Millions, unless otherwise specified | ||
Current: | ' | ' |
Total deferred revenue (billed or collected) - current | $1,957 | $2,419 |
Noncurrent: | ' | ' |
Total deferred revenue (billed or collected) - noncurrent | 779 | 872 |
Total deferred revenue (billed or collected) | 2,736 | 3,291 |
Subscription and Maintenance [Member] | ' | ' |
Current: | ' | ' |
Total deferred revenue (billed or collected) - current | 1,804 | 2,237 |
Noncurrent: | ' | ' |
Total deferred revenue (billed or collected) - noncurrent | 745 | 845 |
Professional Services [Member] | ' | ' |
Current: | ' | ' |
Total deferred revenue (billed or collected) - current | 128 | 149 |
Noncurrent: | ' | ' |
Total deferred revenue (billed or collected) - noncurrent | 31 | 26 |
Software Fees and Other [Member] | ' | ' |
Current: | ' | ' |
Total deferred revenue (billed or collected) - current | 25 | 33 |
Noncurrent: | ' | ' |
Total deferred revenue (billed or collected) - noncurrent | $3 | $1 |
Derivatives_1_Details
Derivatives 1 (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Interest Rate Swaps [Member] | Fair Value Hedges [Member] | Interest Expense, Net [Member] | ' | ' | ' | ' |
Effect of interest rate and foreign exchange derivatives | ' | ' | ' | ' |
Amount of net gain from derivative instruments recognized in the Condensed Consolidated Statements of Operations | ($3) | ($3) | ($6) | ($6) |
Foreign Currency Contracts [Member] | Other Expenses, Net [Member] | ' | ' | ' | ' |
Effect of interest rate and foreign exchange derivatives | ' | ' | ' | ' |
Amount of net gain from derivative instruments recognized in the Condensed Consolidated Statements of Operations | ($17) | ($6) | ($12) | ($15) |
Derivatives_2_Details
Derivatives 2 (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Mar. 31, 2014 |
6.125% Senior Notes due December 2014 [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Total value of Senior Notes subject to fair value interest rate swaps | $500 | ' |
Senior Notes, Interest rate | 6.13% | ' |
Interest Rate Swaps [Member] | Other Current Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of interest rate derivative assets | 2 | 8 |
Interest Rate Swaps [Member] | Fair Value Hedges [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Notional value of derivative instruments | 500 | ' |
Foreign Currency Contracts [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Notional value of derivative instruments | 961 | 250 |
Tenure of foreign currency contracts outstanding | 'less than six months | 'less than three months |
Net fair value of foreign currency contracts | 22 | 1 |
Foreign Currency Contracts [Member] | Other Current Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of foreign currency contracts included in "Other current assets" | 25 | 2 |
Foreign Currency Contracts [Member] | Accrued Expenses and Other Current Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of foreign currency contracts included in "Accrued expenses and other current liabilities" | $3 | $1 |
Fair_Value_Measurements_1_Deta
Fair Value Measurements 1 (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Sep. 30, 2014 | Mar. 31, 2014 | ||
In Millions, unless otherwise specified | ||||
Assets: | ' | ' | ||
Foreign exchange derivatives | $25 | [1] | $2 | [1] |
Interest rate derivatives | 2 | [1] | 8 | [1] |
Total assets | 1,067 | 1,287 | ||
Liabilities: | ' | ' | ||
Foreign exchange derivatives | 3 | [1] | 1 | [1] |
Total liabilities | 3 | 1 | ||
Money Market Funds [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | 1,040 | [2] | 1,277 | [3] |
Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Foreign exchange derivatives | 0 | [1] | 0 | [1] |
Interest rate derivatives | 0 | [1] | 0 | [1] |
Total assets | 1,040 | 1,277 | ||
Liabilities: | ' | ' | ||
Foreign exchange derivatives | 0 | [1] | 0 | [1] |
Total liabilities | 0 | 0 | ||
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | 1,040 | 1,277 | ||
Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Assets: | ' | ' | ||
Foreign exchange derivatives | 25 | [1] | 2 | [1] |
Interest rate derivatives | 2 | [1] | 8 | [1] |
Total assets | 27 | 10 | ||
Liabilities: | ' | ' | ||
Foreign exchange derivatives | 3 | [1] | 1 | [1] |
Total liabilities | 3 | 1 | ||
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | ' | ' | ||
Assets: | ' | ' | ||
Money market funds | $0 | $0 | ||
[1] | See Note G, bDerivativesb for additional information. Interest rate derivatives fair value excludes accrued interest. | |||
[2] | At SeptemberB 30, 2014, the Company had approximately $1,040 million and less than $1 million of investments in money market funds classified as bCash and cash equivalentsb and bOther noncurrent assets, netb for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheet. | |||
[3] | At MarchB 31, 2014, the Company had approximately $1,277 million and less than $1 million of investments in money market funds classified as bCash and cash equivalentsb and bOther noncurrent assets, netb for restricted cash amounts, respectively, in its Condensed Consolidated Balance Sheet. |
Fair_Value_Measurements_2_Deta
Fair Value Measurements 2 (Details) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 | ||
In Millions, unless otherwise specified | ||||
Carrying Value [Member] | ' | ' | ||
Liabilities: | ' | ' | ||
Total debt | $1,763 | [1] | $1,766 | [1] |
Facility exit reserve | 23 | [2] | 29 | [2] |
Estimated Fair Value [Member] | ' | ' | ||
Liabilities: | ' | ' | ||
Total debt | 1,859 | [1] | 1,884 | [1] |
Facility exit reserve | $25 | [2] | $33 | [2] |
[1] | Estimated fair value of total debt is based on quoted prices for similar liabilities for which significant inputs are observable except for certain long-term lease obligations, for which fair value approximates carrying value (Level 2). | |||
[2] | Estimated fair value for the facility exit reserve is determined using the Companybs incremental borrowing rate at SeptemberB 30, 2014 and MarchB 31, 2014. At SeptemberB 30, 2014 and MarchB 31, 2014, the facility exit reserve included approximately $9 million and $11 million, respectively, in bAccrued expenses and other current liabilitiesb and approximately $14 million and $18 million, respectively, in bOther noncurrent liabilitiesb in the Companybs Condensed Consolidated Balance Sheets (Level 3). |
Fair_Value_Measurements_3_Deta
Fair Value Measurements 3 (Details) (USD $) | 6 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 | Mar. 31, 2014 |
Cash and Cash Equivalents [Member] | Money Market Funds [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Cash and cash equivalents, Fair value disclosure | 1,040 | 1,277 |
Other Noncurrent Assets, Net [Member] | Money Market Funds [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Other noncurrent assets, net, Fair value disclosure | 'less than $1 million | 'less than $1 million |
Accrued Expenses and Other Current Liabilities [Member] | Facility Exit [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Accrued expenses and other current liabilities, Fair value disclosure | 9 | 11 |
Other Noncurrent Liabilities [Member] | Facility Exit [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Other noncurrent liabilities, Fair value disclosure | 14 | 18 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 4 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Commitments and Contingencies Disclosure [Abstract] | ' |
Alleged damages suffered | 'excess of $100 million |
Loss contingency, Range of reasonably possible loss, Minimum | $0 |
Loss contingency, Range of reasonably possible loss, Maximum | $30 |
Stockholders_Equity_1_Details
Stockholders' Equity 1 (Details) (USD $) | 3 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 |
Cash dividends | ' | ' | ' | ' |
Declaration date | 31-Jul-14 | 15-May-14 | 1-Aug-13 | 9-May-13 |
Dividend per share (in dollars per share) | $0.25 | $0.25 | $0.25 | $0.25 |
Record date | 21-Aug-14 | 29-May-14 | 22-Aug-13 | 23-May-13 |
Total amount | $111 | $111 | $114 | $114 |
Payment date | 9-Sep-14 | 17-Jun-14 | 10-Sep-13 | 11-Jun-13 |
Stockholders_Equity_2_Details
Stockholders' Equity 2 (Details) (USD $) | 1 Months Ended | 6 Months Ended | |
Share data in Millions, unless otherwise specified | 31-May-14 | Sep. 30, 2014 | Mar. 31, 2014 |
Equity [Abstract] | ' | ' | ' |
Stock repurchase program, Authorized amount | $1,000,000,000 | ' | ' |
Shares of common stock repurchased | ' | 1.7 | ' |
Value of common stock repurchased | ' | 50,000,000 | ' |
Remaining authorized common stock repurchase amount | ' | 950,000,000 | ' |
Accumulated other comprehensive loss | ' | ($255,000,000) | ($171,000,000) |
Income_From_Continuing_Operati2
Income From Continuing Operations Per Common Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Basic income from continuing operations per common share: | ' | ' | ' | ' |
Income from continuing operations | $235 | $231 | $447 | $561 |
Less: Income from continuing operations allocable to participating securities | -2 | -2 | -4 | -6 |
Income from continuing operations allocable to common shares | 233 | 229 | 443 | 555 |
Weighted average common shares outstanding | 440 | 448 | 440 | 449 |
Basic income from continuing operations per common share (in dollars per share) | $0.53 | $0.51 | $1.01 | $1.24 |
Diluted income from continuing operations per common share: | ' | ' | ' | ' |
Income from continuing operations | 235 | 231 | 447 | 561 |
Less: Income from continuing operations allocable to participating securities | -2 | -2 | -4 | -6 |
Income from continuing operations allocable to common shares | $233 | $229 | $443 | $555 |
Weighted average shares outstanding and common share equivalents: | ' | ' | ' | ' |
Weighted average common shares outstanding | 440 | 448 | 440 | 449 |
Weighted average effect of share-based payment awards | 1 | 2 | 1 | 1 |
Denominator in calculation of diluted income per share | 441 | 450 | 441 | 450 |
Diluted income from continuing operations per common share (in dollars per share) | $0.53 | $0.51 | $1 | $1.23 |
Income from continuing operations per common share, Other disclosures [Abstract] | ' | ' | ' | ' |
Number of anti-dilutive restricted stock awards and options excluded from the calculation | 2 | 2 | 2 | 2 |
Weighted average restricted stock awards considered participating securities | 5 | 5 | 4 | 5 |
Accounting_for_ShareBased_Comp2
Accounting for Share-Based Compensation 1 (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Recognized share-based compensation | ' | ' | ' | ' |
Share-based compensation expense before tax | $22 | $20 | $42 | $40 |
Income tax benefit | -7 | -6 | -13 | -13 |
Net share-based compensation expense | 15 | 14 | 29 | 27 |
Costs of Licensing and Maintenance [Member] | ' | ' | ' | ' |
Recognized share-based compensation | ' | ' | ' | ' |
Share-based compensation expense before tax | 1 | 1 | 2 | 2 |
Cost of Professional Services [Member] | ' | ' | ' | ' |
Recognized share-based compensation | ' | ' | ' | ' |
Share-based compensation expense before tax | 1 | 1 | 2 | 2 |
Selling and Marketing [Member] | ' | ' | ' | ' |
Recognized share-based compensation | ' | ' | ' | ' |
Share-based compensation expense before tax | 8 | 7 | 15 | 14 |
General and Administrative [Member] | ' | ' | ' | ' |
Recognized share-based compensation | ' | ' | ' | ' |
Share-based compensation expense before tax | 7 | 6 | 13 | 12 |
Product Development and Enhancements [Member] | ' | ' | ' | ' |
Recognized share-based compensation | ' | ' | ' | ' |
Share-based compensation expense before tax | $5 | $5 | $10 | $10 |
Accounting_for_ShareBased_Comp3
Accounting for Share-Based Compensation 2 (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Unrecognized share-based compensation costs | ' |
Unrecognized share-based compensation costs | $140 |
Weighted average period expected to be recognized (in years) | '2 years 3 months 18 days |
Stock Option Awards [Member] | ' |
Unrecognized share-based compensation costs | ' |
Unrecognized share-based compensation costs | 7 |
Weighted average period expected to be recognized (in years) | '2 years 0 months 0 days |
Restricted Stock Units [Member] | ' |
Unrecognized share-based compensation costs | ' |
Unrecognized share-based compensation costs | 23 |
Weighted average period expected to be recognized (in years) | '2 years 2 months 12 days |
Restricted Stock Awards [Member] | ' |
Unrecognized share-based compensation costs | ' |
Unrecognized share-based compensation costs | 81 |
Weighted average period expected to be recognized (in years) | '2 years 2 months 12 days |
Performance Share Units [Member] | ' |
Unrecognized share-based compensation costs | ' |
Unrecognized share-based compensation costs | $29 |
Weighted average period expected to be recognized (in years) | '2 years 9 months 18 days |
Accounting_for_ShareBased_Comp4
Accounting for Share-Based Compensation 3 (Details) (USD $) | 6 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | |||
Weighted average fair values and assumptions used for options granted | ' | ' | ||
Weighted average fair value (in dollars per share) | $5.87 | $5.19 | ||
Dividend yield | 3.29% | 4.05% | ||
Expected volatility factor | 29.00% | [1] | 30.00% | [1] |
Risk-free interest rate | 2.10% | [2] | 1.50% | [2] |
Expected life (in years) | '6 years | [3] | '6 years | [3] |
[1] | Expected volatility is measured using historical daily price changes of the Companybs stock over the respective expected term of the options and the implied volatility derived from the market prices of the Companybs traded options. | |||
[2] | The risk-free rate for periods within the contractual term of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant. | |||
[3] | The expected life is the number of years the Company estimates that options will be outstanding prior to exercise. The Companybs computation of expected life was determined based on the simplified method (the average of the vesting period and option term). |
Accounting_for_ShareBased_Comp5
Accounting for Share-Based Compensation 4 (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Restricted Stock Awards (RSAs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | 0.1 | 0 | [1] | 3 | 2.7 | |||
Weighted average grant date fair value (in dollars per share) | $28.29 | [2] | $30.39 | [2] | $28.95 | [2] | $27.01 | [2] |
Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | 0 | [1] | 0 | [1] | 0.8 | 0.8 | ||
Weighted average grant date fair value (in dollars per share) | $26.33 | [3] | $30.13 | [3] | $26.91 | [3] | $25.37 | [3] |
1-Year PSUs for Fiscal Year 2014 Incentive Plans [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Performance period (in years) | ' | ' | '1 year | ' | ||||
1-Year PSUs for Fiscal Year 2014 Incentive Plans [Member] | Restricted Stock Awards (RSAs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | ' | ' | 0.7 | ' | ||||
Weighted average grant date fair value (in dollars per share) | ' | ' | $29.91 | ' | ||||
1-Year PSUs for Fiscal Year 2014 Incentive Plans [Member] | Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | ' | ' | 0.1 | ' | ||||
Weighted average grant date fair value (in dollars per share) | ' | ' | $28.92 | ' | ||||
1-Year PSUs for Fiscal Year 2013 Incentive Plans [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Performance period (in years) | ' | ' | ' | '1 year | ||||
1-Year PSUs for Fiscal Year 2013 Incentive Plans [Member] | Restricted Stock Awards (RSAs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | ' | ' | ' | 0.4 | ||||
Weighted average grant date fair value (in dollars per share) | ' | ' | ' | $27.11 | ||||
1-Year PSUs for Fiscal Year 2013 Incentive Plans [Member] | Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | ' | ' | ' | 0.1 | ||||
Weighted average grant date fair value (in dollars per share) | ' | ' | ' | $26.12 | ||||
1-Year PSUs for Fiscal Year 2014 Sales Retention Equity Programs [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Performance period (in years) | ' | ' | '1 year | ' | ||||
1-Year PSUs for Fiscal Year 2014 Sales Retention Equity Programs [Member] | Restricted Stock Awards (RSAs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | ' | ' | 0.2 | ' | ||||
Weighted average grant date fair value (in dollars per share) | ' | ' | $28.69 | ' | ||||
1-Year PSUs for Fiscal Year 2014 Sales Retention Equity Programs [Member] | Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | ' | ' | 0.1 | ' | ||||
Weighted average grant date fair value (in dollars per share) | ' | ' | $25.73 | ' | ||||
1-Year PSUs for Fiscal Year 2013 Sales Retention Equity Programs [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Performance period (in years) | ' | ' | ' | '1 year | ||||
1-Year PSUs for Fiscal Year 2013 Sales Retention Equity Programs [Member] | Restricted Stock Awards (RSAs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | ' | ' | ' | 0.2 | ||||
Weighted average grant date fair value (in dollars per share) | ' | ' | ' | $27.11 | ||||
1-Year PSUs for Fiscal Year 2013 Sales Retention Equity Programs [Member] | Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ||||
Shares | ' | ' | ' | 0.1 | ||||
Weighted average grant date fair value (in dollars per share) | ' | ' | ' | $24.13 | ||||
[1] | Less than 0.1 million. | |||||||
[2] | The fair value is based on the quoted market value of the Companybs common stock on the grant date. | |||||||
[3] | The fair value is based on the quoted market value of the Companybs common stock on the grant date reduced by the present value of dividends expected to be paid on the Companybs common stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate. |
Accounting_for_ShareBased_Comp6
Accounting for Share-Based Compensation 5 (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Restricted Stock Awards (RSAs) [Member] | ' | ' | ' | ' | ||||
Summary of all RSAs and RSUs granted | ' | ' | ' | ' | ||||
Shares | 0.1 | 0 | [1] | 3 | 2.7 | |||
Weighted average grant date fair value (in dollars per share) | $28.29 | [2] | $30.39 | [2] | $28.95 | [2] | $27.01 | [2] |
Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' | ||||
Summary of all RSAs and RSUs granted | ' | ' | ' | ' | ||||
Shares | 0 | [1] | 0 | [1] | 0.8 | 0.8 | ||
Weighted average grant date fair value (in dollars per share) | $26.33 | [3] | $30.13 | [3] | $26.91 | [3] | $25.37 | [3] |
[1] | Less than 0.1 million. | |||||||
[2] | The fair value is based on the quoted market value of the Companybs common stock on the grant date. | |||||||
[3] | The fair value is based on the quoted market value of the Companybs common stock on the grant date reduced by the present value of dividends expected to be paid on the Companybs common stock prior to vesting of the RSUs, which is calculated using a risk-free interest rate. |
Accounting_for_ShareBased_Comp7
Accounting for Share-Based Compensation 6 (Details) (USD $) | 6 Months Ended | 6 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Employee Stock Purchase Plan [Member] | Employee Stock Purchase Plan [Member] | 1-Year PSU Awards [Member] | 1-Year PSU Awards [Member] | 1-Year PSU Awards [Member] | Share-Based Awards Under Sales Retention Equity Programs [Member] | |||
Grant Date [Member] | First Anniversary [Member] | Second Anniversary [Member] | ||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options issued | 0.6 | 1.6 | ' | ' | ' | ' | ' | ' |
Computation of expected life, Simplified method | 'The Companybs computation of expected life was determined based on the simplified method (the average of the vesting period and option term). | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Award vesting percentage | ' | ' | ' | ' | 34.00% | 33.00% | 33.00% | ' |
Award vesting period from grant date (in years) | ' | ' | ' | ' | ' | ' | ' | '3 years |
Percentage of stock closing price on last day of offer period that ESPP participants can purchase Company stock | ' | ' | 95.00% | ' | ' | ' | ' | ' |
Number of shares issued under ESPP | ' | ' | 0.1 | ' | ' | ' | ' | ' |
Share price issued under ESPP (in dollars per share) | ' | ' | $27.30 | ' | ' | ' | ' | ' |
Number of shares available for future issuances under ESPP | ' | ' | ' | 29.5 | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Income tax expense (benefit) | $73 | $101 | $160 | ($21) |
Net discrete tax benefit recognized primarily from resolutions of uncertain tax positions upon completion of U.S. federal income tax returns examination | $19 | ' | $19 | $179 |
Estimated annual effective tax rate, which excludes impact of discrete items | ' | ' | 29.20% | 29.20% |
Expected fiscal year 2015 effective tax rate | ' | ' | 30.00% | ' |
Supplemental_Statement_of_Cash2
Supplemental Statement of Cash Flows Information 1 (Details) (Notional Pooling Arrangement [Member], USD $) | 6 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | ||
Notional Pooling Arrangement [Member] | ' | ' | ||
Activity under cash pooling arrangement | ' | ' | ||
Total borrowings outstanding at beginning of period | $139 | [1] | $136 | [1] |
Borrowings | 2,703 | 1,609 | ||
Repayments | -2,647 | -1,639 | ||
Foreign currency exchange effect | -56 | 20 | ||
Total borrowings outstanding at end of period | $139 | [1] | $126 | [1] |
[1] | Included in bAccrued expenses and other current liabilitiesb in the Companybs Condensed Consolidated Balance Sheets. |
Supplemental_Statement_of_Cash3
Supplemental Statement of Cash Flows Information 2 (Details) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Supplemental Cash Flow Information [Abstract] | ' | ' |
Interest payments, net | $40 | $31 |
Income taxes paid, net | 181 | 246 |
Excess tax benefits from share-based incentive awards included in financing activities from continuing operations | 3 | 3 |
Share-based incentive awards, Non-cash financing activities | 42 | 46 |
Withholding taxes on share-based incentive awards, Non-cash financing activities | 27 | 27 |
Discretionary stock contributions to CA, Inc. Savings Harvest Plan, Non-cash financing activities | 26 | 28 |
Treasury common shares issued in connection with Employee Stock Purchase Plan, Non-cash financing activities | $3 | $2 |
Segment_Information_1_Details
Segment Information 1 (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Segment information | ' | ' | ' | ' | ||||
Revenue | $1,079 | $1,105 | $2,148 | $2,200 | ||||
Income from continuing operations before interest and income taxes | 320 | 345 | 633 | 564 | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | ' | ' | ' | ||||
Segment profit | 320 | 345 | 633 | 564 | ||||
Software development costs capitalized | 0 | -8 | 0 | -31 | ||||
Share-based compensation expense | 22 | 20 | 42 | 40 | ||||
Other expenses, net | -4 | [1] | 7 | [2] | 8 | [3] | 122 | [4] |
Interest expense, net | 12 | 13 | 26 | 24 | ||||
Income from continuing operations before income taxes | 308 | 332 | 607 | 540 | ||||
Purchased Software Products [Member] | ' | ' | ' | ' | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | ' | ' | ' | ||||
Amortization of intangible assets | 31 | 31 | 59 | 59 | ||||
Other Intangible Assets [Member] | ' | ' | ' | ' | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | ' | ' | ' | ||||
Amortization of intangible assets | 16 | 15 | 31 | 29 | ||||
Internally Developed Software Products [Member] | ' | ' | ' | ' | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | ' | ' | ' | ||||
Amortization of intangible assets | 44 | 38 | 83 | 76 | ||||
Mainframe Solutions [Member] | ' | ' | ' | ' | ||||
Segment information | ' | ' | ' | ' | ||||
Revenue | 610 | 624 | 1,224 | 1,243 | ||||
Expenses | 234 | 232 | 469 | 475 | ||||
Income from continuing operations before interest and income taxes | 376 | 392 | 755 | 768 | ||||
Segment operating margin | 62.00% | 63.00% | 62.00% | 62.00% | ||||
Depreciation | 11 | 13 | 23 | 27 | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | ' | ' | ' | ||||
Segment profit | 376 | 392 | 755 | 768 | ||||
Enterprise Solutions [Member] | ' | ' | ' | ' | ||||
Segment information | ' | ' | ' | ' | ||||
Revenue | 378 | 384 | 746 | 762 | ||||
Expenses | 327 | 337 | 652 | 688 | ||||
Income from continuing operations before interest and income taxes | 51 | 47 | 94 | 74 | ||||
Segment operating margin | 13.00% | 12.00% | 13.00% | 10.00% | ||||
Depreciation | 7 | 9 | 14 | 17 | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | ' | ' | ' | ||||
Segment profit | 51 | 47 | 94 | 74 | ||||
Services [Member] | ' | ' | ' | ' | ||||
Segment information | ' | ' | ' | ' | ||||
Revenue | 91 | 97 | 178 | 195 | ||||
Expenses | 89 | 88 | 171 | 178 | ||||
Income from continuing operations before interest and income taxes | 2 | 9 | 7 | 17 | ||||
Segment operating margin | 2.00% | 9.00% | 4.00% | 9.00% | ||||
Depreciation | 0 | 0 | 0 | 0 | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | ' | ' | ' | ||||
Segment profit | 2 | 9 | 7 | 17 | ||||
Total Reportable Segments [Member] | ' | ' | ' | ' | ||||
Segment information | ' | ' | ' | ' | ||||
Revenue | 1,079 | 1,105 | 2,148 | 2,200 | ||||
Expenses | 650 | 657 | 1,292 | 1,341 | ||||
Income from continuing operations before interest and income taxes | 429 | 448 | 856 | 859 | ||||
Segment operating margin | 40.00% | 41.00% | 40.00% | 39.00% | ||||
Depreciation | 18 | 22 | 37 | 44 | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ' | ' | ' | ' | ||||
Segment profit | $429 | $448 | $856 | $859 | ||||
[1] | Other expenses, net consists of approximately $12 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||
[2] | Other expenses, net consists of approximately $2 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||
[3] | Other expenses, net consists of approximately $21 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. | |||||||
[4] | Other expenses, net consists of approximately $119 million of costs associated with the Fiscal 2014 Plan, certain foreign exchange derivative hedging gains and losses, and other miscellaneous costs. |
Segment_Information_2_Details
Segment Information 2 (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Revenue from the United States and international locations | ' | ' | ' | ' | ||||
Total revenue | $1,079 | $1,105 | $2,148 | $2,200 | ||||
United States [Member] | ' | ' | ' | ' | ||||
Revenue from the United States and international locations | ' | ' | ' | ' | ||||
Total revenue | 656 | 671 | 1,299 | 1,328 | ||||
EMEA [Member] | ' | ' | ' | ' | ||||
Revenue from the United States and international locations | ' | ' | ' | ' | ||||
Total revenue | 259 | [1] | 267 | [1] | 518 | [1] | 531 | [1] |
Other [Member] | ' | ' | ' | ' | ||||
Revenue from the United States and international locations | ' | ' | ' | ' | ||||
Total revenue | $164 | $167 | $331 | $341 | ||||
[1] | Consists of Europe, the Middle East and Africa. |
Segment_Information_3_Details
Segment Information 3 (Details) (Fiscal 2014 Plan [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Fiscal 2014 Plan [Member] | ' | ' | ' | ' |
Segment Reporting [Line Items] | ' | ' | ' | ' |
Rebalancing charges | $12 | $2 | $21 | $119 |