0000356028
2008-03-31
0000356028
2008-09-30
0000356028
2009-10-16
0000356028
2009-09-30
0000356028
2009-03-31
0000356028
2009-07-01
2009-09-30
0000356028
2008-07-01
2008-09-30
0000356028
2008-04-01
2008-09-30
0000356028
2009-04-01
2009-09-30
iso4217:USD
xbrli:shares
xbrli:shares
iso4217:USD
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 1 - us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-->
<!-- xbrl,ns -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="left">
</div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">NOTE A — BASIS OF PRESENTATION
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying unaudited Condensed Consolidated Financial Statements of CA, Inc. (the Company)
have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), as
defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)
270, for interim financial information and with the instructions to Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by GAAP for complete
financial statements. 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, 2009 (2009 Form 10-K).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Operating results for the three and six months ended September 30, 2009 are not necessarily
indicative of the results that may be expected for the fiscal year ending March 31, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain prior year balances have been reclassified to conform to the current period’s presentation.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Basis of Revenue Recognition:</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company generates revenue from the following primary sources: (1) licensing software products;
(2) providing customer technical support (referred to as “maintenance”); and (3) providing
professional services, such as product implementation, consulting and education. Revenue is
recorded net of applicable sales taxes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company begins to recognize revenue from licensing and maintenance when all of the following
criteria are met: (1) the Company has evidence of an arrangement with a customer; (2) the Company
delivers the products; (3) license agreement terms are fixed or determinable and free of
contingencies or uncertainties that may alter the agreement such that it may not be complete and
final; and (4) collection is probable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s software licenses generally do not include acceptance provisions. An acceptance
provision allows a customer to test the software for a defined period of time before committing to
license the software. If a license agreement includes an acceptance provision, the Company does not
recognize revenue until the earlier of the receipt of a written customer acceptance or, if not
notified by the customer to cancel the license agreement, the expiration of the acceptance period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Under the Company’s subscription model, implemented in October 2000, software license agreements
typically combine the right to use specified software products, the right to maintenance, and the
right to receive unspecified future software products for no additional fee during the term of the
agreement. Under these subscription licenses, once all four of the above-noted revenue recognition
criteria are met, the Company is required under GAAP to recognize revenue ratably over the term of
the license agreement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For license agreements signed prior to October 2000, once all four of the above-noted revenue
recognition criteria were met, software license fees were recognized as revenue generally when the
software was delivered to the customer, or “up-front” (as the contracts did not include a right to
unspecified future software products), and the maintenance fees were deferred and subsequently
recognized as revenue over the term of the license. Currently, a relatively small amount of the
Company’s revenue from software licenses is recognized on an up-front basis, subject to meeting the
same revenue recognition criteria as described above. Software fees from such licenses are
recognized up-front and are reported in the “Software fees and other” line item in the Condensed
Consolidated Statements of Operations. Maintenance fees from such licenses are recognized ratably
over the term of the license and are recorded on the “Subscription and maintenance revenue” line
item in the Condensed Consolidated Statements of Operations. License agreements with software fees
that are recognized up-front do not include the right to receive unspecified future software
products. However, in the event such license agreements are executed within close proximity to or
in contemplation of other license agreements, for which we do not have vendor specific objective
evidence (VSOE) of fair value and are accounted for under the Company’s subscription model, with
the same customer, the licenses together may be considered a single multi-element agreement, and all such
revenue is required to be recognized ratably and is recorded as “Subscription and maintenance
revenue” in the Condensed Consolidated Statements of Operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Since the Company implemented its subscription model in October 2000, the Company’s practice with
respect to products of newly acquired businesses with established VSOE has been to record revenue
initially on the acquired company’s systems, generally under an up-front model; and, starting
within the first fiscal year after the acquisition, to enter new licenses for such products under
the Company’s subscription model, following which revenue is recognized ratably and recorded as
“Subscription and maintenance revenue.” In some instances, the Company sells newly developed and
recently acquired products on an up-front model. The software license fees from these contracts
are presented as “Software fees and other.” Selling such licenses under an up-front model may
result in higher total revenue in a current reporting period than if such licenses were based on
the Company’s subscription model and the associated revenue recognized ratably.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Revenue from professional service arrangements is generally recognized as the services are
performed. Revenue from committed professional services that are sold as part of a subscription
license agreement is deferred and recognized on a ratable basis over the term of the related
software license. If it is not probable that a project will be completed or the payment will be
received, revenue recognition is deferred until the uncertainty is removed.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Revenue from sales to distributors, resellers, and value-added resellers commences when all four
revenue recognition criteria noted above are met and when these entities sell the software product
to their customers. This is commonly referred to as the sell-through method. Revenue from the
sales of products to distributors, resellers and value-added resellers that include licensing terms
providing the right for the end-users to receive certain unspecified future software products is
recognized on a ratable basis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company has an established business practice of offering installment payment options to
customers and has a history of successfully collecting substantially all amounts due under such
agreements. The Company assesses collectability based on a number of factors, including past
transaction history with the customer and the creditworthiness of the customer. If, in the
Company’s judgment, collection of a fee is not probable, revenue will not be recognized until the
uncertainty is removed, which is generally through the receipt of cash payment.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For further information, refer to the Company’s Consolidated Financial Statements and Notes thereto
included in the Company’s 2009 Form 10-K.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u><i>Cash Dividends:</i></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2009, the Company’s Board of Directors declared a quarterly cash dividend of $0.04 per
share. The dividend totaled approximately $21 million and was paid on August 19, 2009 to
stockholders of record at the close of business on August 10, 2009. In May 2009, the Company’s
Board of Directors declared a quarterly cash dividend of $0.04 per share. The dividend totaled
approximately $21 million and was paid on June 16, 2009 to stockholders of record at the close of
business on May 31, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In September 2008, the Company’s Board of Directors declared a quarterly cash dividend of $0.04 per
share. The dividend totaled approximately $20 million and was paid on September 30, 2008 to
stockholders of record at the close of business on September 22, 2008. In June 2008, the Company’s
Board of Directors declared a quarterly cash dividend of $0.04 per share. The dividend totaled
approximately $21 million and was paid on June 27, 2008 to stockholders of record at the close of
business on June 17, 2008.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u><i>Cash and Cash Equivalents: </i></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s cash and cash equivalents are held in numerous locations throughout the world, with
approximately 43% and 50% held by the Company’s foreign subsidiaries outside the United States as
of September 30, 2009 and March 31, 2009, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u><i>Restricted Cash: </i></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s insurance subsidiary requires a minimum restricted cash balance of $50 million. In
addition, the Company has other restricted cash balances, including cash collateral for letters of
credit. The total amount of restricted cash was approximately $56 million as of September 30, 2009
and March 31, 2009 and is included in the “Other noncurrent assets, net” line item in the Condensed
Consolidated Balance Sheets. These amounts consist of $50 million in money market funds with the
remainder predominantly in cash.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u><i>Deferred Revenue (Billed or Collected)</i></u><i>:</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company accounts for unearned revenue on billed amounts due from customers on a “gross method”
of presentation. Under the gross method, unearned revenue on billed installments (collected or
uncollected) is reported as deferred revenue in the liability section of the balance sheet. The
components of “Deferred revenue (billed or collected) — current” and “Deferred revenue (billed or
collected) — noncurrent” as of September 30, 2009 and March 31, 2009 are as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><i>(in millions)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Current:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Subscription and maintenance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,021</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,272</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Professional services
</div></td>
<td> </td>
<td> </td>
<td align="right">148</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">150</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Financing obligations and other
</div></td>
<td> </td>
<td> </td>
<td align="right">17</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total deferred revenue (billed or collected) — current
</div></td>
<td> </td>
<td> </td>
<td align="right">2,186</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,431</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Noncurrent:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Subscription and maintenance
</div></td>
<td> </td>
<td> </td>
<td align="right">1,058</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">987</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Professional services
</div></td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Financing obligations and other
</div></td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total deferred revenue (billed or collected) -
noncurrent
</div></td>
<td> </td>
<td> </td>
<td align="right">1,065</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,000</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total deferred revenue (billed or collected)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,251</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,431</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Deferred revenue (billed or collected) excludes unrealized revenue from contractual obligations
that will be billed by the Company in future periods.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u><i>Concentration of Credit Risk:</i></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Financial instruments that potentially subject the Company to concentration of credit risk consist
primarily of cash equivalents, derivatives and accounts receivable. The Company holds cash and cash
equivalents in major financial institutions and related money market funds. The Company has not
historically experienced any losses in its cash and cash equivalent portfolios.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Amounts included in accounts receivable expected to be collected from customers, as disclosed in
Note E, “Trade and Installment Accounts Receivable,” have limited exposure to concentration of
credit risk due to the diverse customer base and geographic areas covered by operations. Unbilled
amounts due under the Company’s prior business model that are expected to be collected from
customers include one large IT outsourcer with a license arrangement that extends through fiscal
year 2012 with a net unbilled receivable balance of approximately $185 million at September 30,
2009.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Prior to fiscal year 2001, the Company sold individual accounts receivable from certain financial
institutions to a third party subject to certain recourse provisions. The outstanding principal
balances subject to recourse
of these receivables were approximately $20 million and $38 million as of September 30 and March
31, 2009, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u><i>Stock Repurchases:</i></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the second quarter of fiscal year 2010, the Company entered into a brokerage arrangement
with a third-party financial institution to purchase the Company’s common stock in the open market
on the Company’s behalf. The Company acquired approximately 2 million of its common shares for
approximately $50 million under this arrangement during the second quarter of fiscal year 2010,
approximately $45 million of which was paid to the third-party financial institution in settlement
of purchases during the quarter. As of September 30, 2009, the Company remained authorized to
purchase an aggregate amount of up to approximately $196 million of additional common shares under
its current stock repurchase program.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u><i>Statement of Cash Flows:</i></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the six-month periods ended September 30, 2009 and 2008, interest payments were $34 million and
$57 million, respectively, and income taxes paid were $176 million and $137 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Non-cash financing activities for the six-month periods ended September 30, 2009 and 2008 consisted
of treasury shares issued in connection with the following: share-based incentive awards issued
under the Company’s equity compensation plans of approximately $63 million (net of approximately
$22 million of withholding taxes) and $52 million (net of approximately $25 million of withholding
taxes), respectively; the Company’s Employee Stock Purchase Plan of approximately $21 million and
$17 million, respectively; and discretionary stock contributions to the CA, Inc. Savings Harvest
Plan of approximately $33 million and $19 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u><i>Adoption of new accounting standards:</i></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Effective September 15, 2009, the Company adopted the requirements of FASB ASC 105 (previously SFAS
No 168, <i>“FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles"</i>). FASB ASC 105 is effective for financial statements issued for interim and annual
periods ending after September 15, 2009 and establishes the ASC as the source of authoritative
GAAP, except for rules and interpretive releases of the Securities and Exchange Commission (SEC),
which are sources of authoritative GAAP for SEC registrants. The adoption of the ASC was not
intended to change or alter existing GAAP and therefore did not have any impact on the Company’s
consolidated financial statements. References to the relevant ASC section and the previously
existing GAAP standard have been provided for accounting standards adopted in fiscal year 2010 but
prior to the effective date of the ASC.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Effective April 1, 2009, the Company adopted the fair value measurement and disclosure requirements
of FASB ASC 820 (previously SFAS No. 157, “<i>Fair Value Measurements"</i>) for all nonfinancial assets
and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis (at least annually), for which the requirements were
adopted on April 1, 2008. The April 1, 2009 adoption did not have an impact on the Condensed
Consolidated Financial Statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Effective April 1, 2009, the Company adopted the requirements of FASB ASC 260-10-45 (previously
FASB Staff Position (FSP) Emerging Issues Task Force (EITF) No. 03-6-1 (FSP EITF 03-6-1),
"<i>Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating
Securities</i>”) for unvested share-based payment awards that contain non-forfeitable rights to
dividends or dividend equivalents (whether paid or unpaid). These awards are treated as
participating securities and are included in the computation of earnings per share under the
two-class method. This adoption required all prior-period earnings per share data to be adjusted
retrospectively. The adoption did not have a
material impact on the Company’s previously reported
earnings per share. See Note C, “Income Per Common Share” for additional information regarding the
Company’s earnings per share calculation.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Effective April 1, 2009, the Company adopted the requirements of FASB ASC 470-20 (previously FSP
Accounting Principles Board Opinion (APB) No. 14-1, “<i>Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement</i>))” for convertible
debt instruments that have cash settlement features. These requirements included separation of the
liability and equity components of the instruments. The debt is recognized at the present value of
its cash flows discounted using the issuer’s nonconvertible debt borrowing rate at the time of
issuance with the resulting debt discount being amortized over the expected life of the debt. The
equity component is recognized as the difference between the proceeds from the issuance of the
convertible debt instrument and the fair value of the liability. The adoption required
retrospective application to all periods presented, and did not grandfather existing
instruments. Accordingly, the accompanying Condensed Consolidated Balance Sheet as of March 31,
2009 and the Condensed Consolidated Statements of Operations for the three and six months ended
September 30, 2008 have been revised.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company estimated a borrowing rate of 11% for a similar non-convertible instrument at the time
the Company’s $460 million 1.625% Convertible Senior Notes due December 2009 (the 1.625% Senior
Notes) were issued. The fair value at issuance of the liability component of the 1.625% Senior
Notes assuming an interest rate of 11% was $251 million, reflecting a discount of $209 million.
This discount is being amortized to interest expense over a seven-year period ending December 2009,
the date on which holders of the 1.625% Senior Notes may first require the Company to repurchase
all or a portion of their 1.625% Senior Notes at a price of $20.04 per share.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Condensed Consolidated Balance Sheet as of March 31, 2009 has been revised to reflect a
reduction in current debt of $29 million for the remaining unamortized discount, an increase in
additional paid in capital of $129 million for the equity component (net of deferred taxes of $80
million), a decrease in retained earnings of $111 million for the cumulative expense from
amortization of the discount, and a decrease to deferred tax assets of $11 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Condensed Consolidated Statement of Operations for the three months ended September 30, 2008
has been revised to reflect an increase in interest expense of $11 million, a decrease in income
tax expense of approximately $4 million, a decrease in net income of $7 million and a decrease in
basic earnings per share of $0.01. The Condensed Consolidated Statement of Operations for the six
months ended September 30, 2008 has been revised to reflect an increase in interest expense of $18
million, a decrease in income tax expense of approximately $7 million, a decrease in net income of
$11 million and a decrease in basic earnings per share of $0.02. Diluted net income per share for
the three and six months ended September 30, 2008 was not affected. The recognition of interest
expense at 11% decreased the Company’s reported net income for fiscal year 2009 by approximately
$23 million as compared with the stated interest rate of 1.625%.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The unamortized discount associated with the 1.625% Senior Notes was approximately $9 million at
September 30, 2009. Total interest expense associated with the 1.625% Senior Notes was
approximately $14 million and $24 million for the three and six months ended September 30, 2009,
respectively and approximately $13 million and $22 million for the three and six months ended
September 30, 2008, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Concurrent with the issuance of the 1.625% Senior Notes, the Company entered into call spread
repurchase option transactions to partially mitigate potential dilution from conversion of the
1.625% Senior Notes. See the Notes to the Consolidated Financial Statements included in the
Company’s 2009 Form 10-K for more information about the call spread repurchase options.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Effective April 1, 2009, the Company adopted the disclosure requirements of FASB ASC 820-10-50
(previously FSP FAS 107-1 and APB 28-1, <i>“Interim Disclosures About Fair Value of Financial</i>
<i>Instruments"</i>). These disclosures have been provided in Note G, “Derivatives and Fair Value
Measurements.”
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Effective April 1, 2009, the Company adopted the requirements of FASB ASC 855 (previously FASB
SFAS No. 165, <i>“Subsequent Events”) </i>for subsequent events, which established standards for the
accounting for and disclosure of events that occur after the balance sheet date but before
financial statements are available to be issued (subsequent events). These standards are largely
the same guidance on subsequent events which previously existed only in auditing literature. The
requirements include disclosure of the date through which subsequent events have been evaluated, as
well as whether that date
is the date the financial statements were issued or the date the financial statements were
available to be issued.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For purposes of this interim financial information, October 23, 2009 is the date through which
subsequent events have been evaluated and represents the date the financial statements were issued.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 2 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">NOTE B — COMPREHENSIVE INCOME
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Comprehensive income includes net income, unrealized gains on cash flow hedges and foreign currency
translation adjustments. The components of comprehensive income for the three and six months ended
September 30, 2009 and 2008 are as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Ended September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Ended September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008<sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008<sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><i>(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">218</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">202</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">413</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">398</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net unrealized gain on cash flow hedges,
net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency translation adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right">32</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(53</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">73</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total comprehensive income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">250</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">149</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">487</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">351</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Net income for the three and six months ended September 30, 2008 has been revised to reflect
the retrospective adoption of new accounting standards. For further information refer to Note A,
“Basis of Presentation,” in the Notes to these Condensed Consolidated Financial Statements.</td>
</tr>
</table>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">NOTE C — INCOME PER COMMON SHARE
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Effective April 1, 2009, the Company adopted the requirements of FASB ASC 260-10-45 (previously FSP
EITF 03-6-1, “<i>Determining Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities</i>”) for unvested share-based payment awards that contain non-forfeitable
rights to dividends or dividend equivalents (whether paid or unpaid). These awards are treated as
participating securities and are included in the computation of earnings per share under the
two-class method. This adoption required all prior-period earnings per share data to be adjusted
retrospectively. The implementation of this accounting standard and the adoption of FASB ASC 470-20
(previously FSP APB 14-1) resulted in a reduction of $0.02 and $0.03 in basic earnings per common
share as reported in the Condensed Consolidated Statement of Operations for the three and six
months ended September 30, 2008, respectively. Diluted earnings per common share was not affected.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Under the two-class method, net earnings are reduced by the amount of dividends declared in the
period for each class of common stock and participating securities. The remaining undistributed
earnings are then allocated to common stock and participating securities as if all of the net
earnings for the period had been distributed. Basic earnings per common share excludes dilution
and is calculated by dividing net earnings allocable to common shares by the weighted-average
number of common shares outstanding for the period. Diluted earnings per common share is
calculated by dividing net earnings allocable to common shares by the weighted-average number of
common shares as of the balance sheet date, as adjusted for the potential dilutive effect of
non-participating share-based awards and convertible
notes. The following table reconciles
earnings per common share under the new methodology for the three and six months ended September
30, 2009 and 2008.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008<sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008<sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><i>(in millions, except per share amounts)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic earnings per common share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">218</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">202</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">413</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">398</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: Net income allocable to participating securities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income allocable to common shares
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">216</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">200</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">409</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">394</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted-average common shares outstanding
</div></td>
<td> </td>
<td> </td>
<td align="right">518</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">514</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">517</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">513</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic earnings per common share
</div></td>
<td> </td>
<td> </td>
<td align="right">0.42</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.39</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.79</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.77</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted earnings per common share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">218</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">202</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">413</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">398</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Add: Interest expense associated with Convertible
Senior Notes, net of tax
</div></td>
<td> </td>
<td> </td>
<td align="right">8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less: Net income allocable to participating securities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income allocable to common shares
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">224</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">208</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">423</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">407</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average shares outstanding and common share
equivalents
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average common shares outstanding
</div></td>
<td> </td>
<td> </td>
<td align="right">518</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">514</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">517</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">513</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average shares outstanding upon conversion of
Convertible Senior Notes
</div></td>
<td> </td>
<td> </td>
<td align="right">23</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average effect of share-based payment awards
</div></td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Denominator in calculation of diluted income per share
</div></td>
<td> </td>
<td> </td>
<td align="right">542</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">538</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">541</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">537</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted income per share
</div></td>
<td> </td>
<td> </td>
<td align="right">0.41</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.39</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.78</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.76</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Net income for the three and six months ended September 30, 2008 has been revised to reflect
the retrospective adoption of new accounting standards. For further information refer to Note A,
“Basis of Presentation.”</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the three months ended September 30, 2009 and 2008, approximately 14 million and 11
million of restricted stock awards and options to purchase common stock, respectively, were
excluded from the calculation, as their effect on earnings per share was anti-dilutive during the
respective periods. For the six months ended September 30, 2009 and 2008, approximately 14 million
and 11 million of restricted stock awards and options to purchase common stock, respectively, were
excluded from the calculation, as their effect on earnings per share was anti-dilutive during the
respective periods.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE D — ACCOUNTING FOR SHARE-BASED COMPENSATION
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognized share-based compensation in the following line items on the Condensed
Consolidated Statements of Operations for the periods indicated:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Ended September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Ended September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14"><i>(in millions)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Costs of licensing and maintenance
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Costs of professional services
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Selling and marketing
</div></td>
<td> </td>
<td> </td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">General and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Product development and enhancements
</div></td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Share-based compensation expense before tax
</div></td>
<td> </td>
<td> </td>
<td align="right">26</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Income tax benefit
</div></td>
<td> </td>
<td> </td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net share-based compensation expense
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">17</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">There were no capitalized share-based compensation costs at September 30, 2009 or 2008.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes information about unrecognized share-based compensation costs as of
September 30, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Weighted</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrecognized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Average Period</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Compensation</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Expected to be</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Costs</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Recognized</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><i>(in millions)</i></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i>(in years)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock units
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted stock awards
</div></td>
<td> </td>
<td> </td>
<td align="right">71</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.6</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Performance share units
</div></td>
<td> </td>
<td> </td>
<td align="right">54</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total unrecognized share-based compensation costs
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The value of performance share unit (PSU) awards are marked to 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) or 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 has
discretion to reduce any award for any reason).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the three and six months ended September 30, 2009, the Company issued options covering 0.1
million shares of common stock. The weighted average fair value and assumptions used for options
granted in the three and six months ended September 30, 2009 were: fair value, $6.81; dividend
yield, 0.77%; expected volatility factor, 0.33; risk-free interest rate, 2.3%; and expected term, 6
years. For the three and six months ended September 30, 2008 the Company did not issue options.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The table below summarizes all of the RSUs and RSAs, including grants provided pursuant to the
long-term incentive plans discussed above, granted during the three and six months ended September
30, 2009 and 2008:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7">Three Months</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7">Six Months</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Ended September 30,</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Ended September 30,</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15"><i>(shares in millions)</i></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">RSUs
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Shares
</div></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">—</td>
<td nowrap="nowrap" align="right">(1)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td> </td>
<td align="right">0.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.3</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Weighted Avg. Grant Date Fair
Value <sup style="font-size: 85%; vertical-align: text-top">(2)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">18.64</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21.45</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">17.46</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">24.36</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">RSAs
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Shares
</div></td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td> </td>
<td align="right">4.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Weighted Avg. Grant Date Fair
Value <sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">20.88</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">22.72</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">18.37</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">25.32</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Shares granted amounted to less than 0.1 million.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>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.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(3)</td>
<td> </td>
<td>The fair value is based on the quoted market value of the Company’s common stock on the
grant date.</td>
</tr>
</table>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">NOTE E — TRADE AND INSTALLMENT ACCOUNTS RECEIVABLE
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company uses installment license agreements as a standard business practice and has a history
of successfully collecting substantially all amounts due under the original payment terms without
making concessions on payments, software products, maintenance, or professional services. Net trade
and installment accounts receivable represent amounts due from the Company’s customers. These
accounts receivable balances are presented net of allowances for doubtful accounts and unamortized
discounts. Unamortized discounts reflect imputed interest for the time value of money for license
agreements under the Company’s prior business model. These balances do not include unbilled
contractual commitments executed under the Company’s current business model. The components of Net
trade and installment accounts receivable are as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><i>(in millions)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Current:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Accounts receivable — billed
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">557</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">658</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Accounts receivable — unbilled
</div></td>
<td> </td>
<td> </td>
<td align="right">67</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">71</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Other receivables
</div></td>
<td> </td>
<td> </td>
<td align="right">24</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Unbilled amounts due within the next 12 months — prior business model
</div></td>
<td> </td>
<td> </td>
<td align="right">102</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">108</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Less: Allowance for doubtful accounts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Less: Unamortized discounts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net trade and installment accounts receivable — current
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">718</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">839</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Noncurrent:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Unbilled amounts due beyond the next 12 months —
prior business model
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">132</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Less: Unamortized discounts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net installment accounts receivable — noncurrent
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">84</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">128</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">NOTE F — GOODWILL, CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The gross carrying amounts and accumulated amortization for capitalized software and other
intangible assets at September 30, 2009 were approximately $6,496 million and $5,774 million,
respectively. These amounts include fully amortized intangible assets of approximately $5,067
million, which is composed of purchased software of approximately $4,547 million, internally
developed software of approximately $400 million and other identified intangible assets subject to
amortization of approximately $120 million. The remaining gross carrying amounts and accumulated
amortization for capitalized software and other intangible assets that are not fully amortized are
as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000">As of September 30, 2009</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amortizable</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Net</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Assets</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amortization</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Assets</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10"><i>(in millions)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Capitalized software:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Purchased
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">321</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">193</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">128</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Internally developed
</div></td>
<td> </td>
<td> </td>
<td align="right">544</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">165</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">379</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other identified intangible assets subject to amortization
</div></td>
<td> </td>
<td> </td>
<td align="right">550</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">349</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">201</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other identified intangible assets not subject to amortization
</div></td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,429</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">707</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">722</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Internally developed capitalized software costs and other identified intangible asset costs are
included in “Other noncurrent assets, net” on the Condensed Consolidated Balance Sheets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Based on the capitalized software and other intangible assets recorded through September 30, 2009,
the annual amortization expense over the next five fiscal years is expected to be as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="18" style="border-bottom: 0px solid #000000">Year Ended March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2012</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2013</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2014</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10"><i>(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Capitalized software:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Purchased
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">51</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">28</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Internally developed
</div></td>
<td> </td>
<td> </td>
<td align="right">85</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">97</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">84</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">51</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other identified intangible assets subject to amortization
</div></td>
<td> </td>
<td> </td>
<td align="right">54</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">190</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">191</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">144</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">116</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">85</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The carrying value of goodwill was approximately $5,366 million and $5,364 million as of September
30, 2009 and March 31, 2009, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">NOTE G — DERIVATIVES AND FAIR VALUE MEASUREMENTS
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is exposed to certain financial market risks relating to its business operations,
including changes in interest rates, which could impact the value of its financial assets and
liabilities, and foreign exchange rate risks associated with the Company’s foreign operations,
which could affect 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.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the first six months of fiscal years 2010 and 2009, the Company did not designate its
foreign exchange derivatives as hedges. Accordingly, all foreign exchange derivatives are
recognized on the Condensed Consolidated Balance Sheets at fair value and unrealized and realized
changes in fair value from these contracts are recorded as “Other expenses, net” in the Company’s
Condensed Consolidated Statements of Operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During fiscal year 2009, the Company entered into interest rate swaps with a total notional value
of $250 million to hedge a portion of its variable interest rate payments. These derivatives are
designated as cash
flow hedges. The effective portion of these cash flow hedges are recorded as
“Accumulated other comprehensive loss” in the Company’s Condensed Consolidated Balance Sheet and
reclassified into “Interest expense, net,” in the Company’s Condensed Consolidated Statements of
Operations in the same period during which the hedged transaction affects earnings. Any
ineffective portions of the cash flow hedges are recorded immediately to “Interest expense, net.”
No ineffectiveness existed at September 30, 2009 or at March 31, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following tables present the Company’s assets and liabilities that are measured at fair value
on a recurring basis at September 30 and March 31, 2009:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10">Fair Value Measurement at Reporting Date Using</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000"><i>(in millions)</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Significant</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Estimated Fair</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Quoted Prices in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Value at</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Active Markets for</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Observable</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Identical Assets</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Inputs</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">Description</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">(Level 1)<sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">(Level 2)<sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="13" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,503</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,503</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Government securities
</div></td>
<td> </td>
<td> </td>
<td align="right">645</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">645</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,148</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,148</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Liabilities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange derivatives <sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5</td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate derivatives <sup style="font-size: 85%; vertical-align: text-top">(4)</sup>
</div></td>
<td> </td>
<td align="left"></td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left"></td>
<td align="right">6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Liabilities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Level 1 is defined as quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Level 2 is defined as quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial
instruments for which significant inputs are observable, either directly or indirectly.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(3)</td>
<td> </td>
<td>Foreign exchange derivatives are not designated as hedges.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(4)</td>
<td> </td>
<td>Interest rate derivatives are designated as cash flow hedges.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10">Fair Value Measurement at Reporting Date Using</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 0px solid #000000"><i>(in millions)</i></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Significant</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Quoted Prices in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Estimated Fair</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Active Markets for</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Observable</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Value at</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Identical Assets</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Inputs</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">Description</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">March 31, 2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Level 1)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(Level 2)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,617</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,617</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Government securities
</div></td>
<td> </td>
<td> </td>
<td align="right">405</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">405</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,022</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,022</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Liabilities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate derivatives <sup style="font-size: 85%; vertical-align: text-top">(1)</sup>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Liabilities
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Interest rate derivatives are designated as cash flow hedges.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At September 30 and March 31, 2009, the Company did not have any assets or liabilities measured at
fair value on a recurring basis using significant unobservable inputs (Level 3).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At September 30 and March 31, 2009, the Company had approximately $1,453 million and $1,567
million, respectively, of investments in money market funds classified as “Cash and cash
equivalents” in its Condensed Consolidated Balance Sheet. The Company also had approximately $645
million and $405 million, respectively, in treasury bills, classified as “Cash and cash
equivalents.” The Company had $50 million of money market funds in restricted cash amounts
classified as “Other noncurrent assets, net” at both September 30 and March 31, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At September 30, 2009, approximately $5 million of foreign exchange derivatives were included in
“Other Current Liabilities”. At March 31, 2009, the Company had no foreign exchange derivative
contracts outstanding. At September 30 and March 31, 2009, approximately $6 million and $7
million, respectively, of the Company’s interest rate derivatives are included in “Other current
liabilities.”
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Accumulated other comprehensive loss includes approximately $6 million for the six months ended
September 30, 2009 related to the Company’s interest rate derivatives. The amount of loss
reclassified from accumulated other comprehensive income into “Interest expense, net” was
approximately $1 million and $3 million for the three and six months ended September 30, 2009. In
the next twelve months, approximately $6 million is expected to be reclassified from “Accumulated
other comprehensive loss” to income.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the effect of the interest rate and foreign exchange derivatives on the Company’s
Condensed Consolidated Statement of Operations is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="45%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7">Derivative (Gain) Loss Recognized in Earnings</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><i>(in millions)</i></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center">Location in Statement of Operations</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Three Months Ended</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Three Months Ended</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000">of Derivative (Gain) Loss</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">September 30, 2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">September 30, 2008</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest expenses, net <sup style="font-size: 85%; vertical-align: text-top">(1)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other expenses, net <sup style="font-size: 85%; vertical-align: text-top">(2)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(34</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Interest rate derivatives designated as cash flow hedges.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Foreign exchange derivatives not designated as hedges.</td>
</tr>
</table>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="45%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7">Derivative (Gain) Loss Recognized in Earnings</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><i>(in millions)</i></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center">Location in Statement of Operations</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Six Months Ended</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Six Months Ended</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000">of Derivative (Gain) Loss</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">September 30, 2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">September 30, 2008</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest expenses, net <sup style="font-size: 85%; vertical-align: text-top">(1)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other expenses, net <sup style="font-size: 85%; vertical-align: text-top">(2)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">25</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(33</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Interest rate derivatives designated as cash flow hedges.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Foreign exchange derivatives not designated as hedges.</td>
</tr>
</table>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>The following table presents the carrying amounts and estimated fair values of the Company’s
instruments that are not measured at fair value on a recurring basis:</td>
</tr>
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7">At September 30, 2009</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><i>(in millions)</i></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Carrying Value</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Estimated Fair Value</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td colspan="9" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Noncurrent portion of installment accounts receivable <sup style="font-size: 85%; vertical-align: text-top">(1)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">84</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">84</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Liabilities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term debt <sup style="font-size: 85%; vertical-align: text-top">(2)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">1,934</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2,029</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Facilities abandonment reserve <sup style="font-size: 85%; vertical-align: text-top">(3)</sup>
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">70</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">77</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Estimated fair value of the noncurrent portion of installment accounts receivable
approximates carrying value due to the relatively short term to maturity.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>Estimated fair value of long-term 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. Estimated fair value of long-term debt includes $60
million for the conversion feature of the 1.625% Convertible Senior Notes. See the Notes to the
Consolidated Financial Statements included in the Company’s 2009 Form 10-K for more information
about the 1.625% Convertible Senior Notes.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(3)</td>
<td> </td>
<td>Estimated fair value for the facilities abandonment reserve was determined using the
Company’s current incremental borrowing rate. The facilities abandonment reserve includes
approximately $24 million in “Accrued expenses and other current liabilities” and approximately $46
million in “Other noncurrent liabilities” line items on the Condensed Consolidated Balance
Sheet.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of the Company’s call spread repurchase option associated with the 1.625% Senior
Notes at September 30, 2009 was $59 million which was based on quoted prices for similar
securities. See the Notes to the Consolidated Financial Statements included in the Company’s 2009
Form 10-K for more information about the call spread repurchase options.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:RestructuringAndRelatedActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">NOTE H — RESTRUCTURING
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Fiscal 2007 Plan: </i>In August 2006, the Company announced the Fiscal 2007 plan to significantly
improve the Company’s expense structure and increase its competitiveness. The Fiscal 2007 plan’s
objectives included a workforce reduction, global facilities consolidations and other cost
reduction initiatives. The Company has recognized substantially all of the costs associated with
the Fiscal 2007 plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company currently estimates a reduction in workforce of approximately 3,100 individuals under
the Fiscal 2007 plan. Most of these actions have been completed; however, final payment of the
severance amounts is dependent upon settlement with the works councils in certain international
locations. The Company has also recognized substantially all of the facilities abandonment costs
associated with the Fiscal 2007 plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the six months ended September 30, 2009, restructuring activity under the Fiscal 2007 plan was
as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Facilities</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Severance</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Abandonment</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><i>(in millions)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued balance as of March 31, 2009
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">45</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">71</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Payments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued balance as of
September 30, 2009
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">22</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">62</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The liability balance for the severance portion of the remaining reserve is included in the
“Accrued salaries, wages and commissions” line on the Condensed Consolidated Balance Sheets. The
liability for the facilities abandonment portion of the remaining reserve is included in the
“Accrued expenses and other current liabilities” and “Other noncurrent liabilities” line items on
the Condensed Consolidated Balance Sheets.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">NOTE I — INCOME TAXES
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Income tax expense for the three and six months ended September 30, 2009 was $99 million and $212
million, respectively, compared with the three and six months ended September 30, 2008 of $115
million and $216 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the three and six months ended September 30, 2009, the Company’s tax provision included a
benefit from the resolution of uncertain tax positions relating to non-U.S. jurisdictions which
resulted in a decrease in the liability for uncertain tax positions of $16 million. As a result,
the Company recognized a tax benefit of $7 million, with the remainder offset against existing tax
refund claims and deferred tax assets previously recorded. For the six months ended September 30,
2008, the Company’s tax provision included a benefit from the settlement of a U.S. federal income
tax audit for the fiscal years 2001 through 2004, which resulted in a decrease in the liability for
uncertain tax positions of $55 million. As a result of this settlement, during the first quarter of
fiscal year 2009, the Company recognized a tax benefit of $11 million and a reduction of goodwill
by $10 million, with the remainder offset against existing tax refund claims and deferred tax
assets previously recorded.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 10 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NOTE J — COMMITMENTS AND CONTINGENCIES
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain legal proceedings in which the Company is involved are discussed in Note 8, “Commitments
and Contingencies,” in the Notes to the Consolidated Financial Statements included in the Company’s
2009 Form 10-K. The following discussion should be read in conjunction with the 2009 Form 10-K.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Stockholder Class Action and Derivative Lawsuits Filed Prior to 2004 — Background </u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company, its former Chairman and CEO Charles B. Wang, its former Chairman and CEO Sanjay Kumar,
its former Chief Financial Officer Ira Zar, and its Vice Chairman and Founder Russell M. Artzt were
defendants in one or more stockholder class action lawsuits filed in July 1998, February 2002, and
March 2002 in the United States District Court for the Eastern District of New York (the Federal
Court), alleging, among other things, that a class consisting of all persons who purchased the
Company’s Common Stock during the period from January 20, 1998 until July 22, 1998 were harmed by
misleading statements, misrepresentations, and omissions regarding the Company’s future financial
performance.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In addition, in May 2003, a class action lawsuit captioned <i>John A. Ambler v. Computer Associates
International, Inc., et al. </i>was filed in the Federal Court. The complaint in this matter, a
purported class action on behalf of the CA Savings Harvest Plan (the CASH Plan) and the
participants in, and beneficiaries of, the CASH Plan for a class period from March 30, 1998 through
May 30, 2003, asserted claims of breach of fiduciary duty under the federal Employee Retirement
Income Security Act (ERISA). The named defendants were the Company, the Company’s Board of
Directors, the CASH Plan, the Administrative Committee of the CASH Plan, and the following current
or former employees and/or former directors of the Company: Messrs. Wang, Kumar, Zar, Artzt, Peter
A. Schwartz (the Company’s former Chief Financial Officer), and Charles P. McWade (the Company’s
former head of Financial Reporting and Business Development); and various unidentified alleged
fiduciaries of the CASH Plan. The complaint alleged that the defendants breached their fiduciary
duties by causing the CASH Plan to invest in Company securities and sought damages in an
unspecified amount.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A stockholder derivative lawsuit was filed by Charles Federman against certain then current and
former directors of the Company, based on essentially the same allegations as those contained in
the February and March 2002 stockholder lawsuits discussed above. This action was commenced in
April 2002 in the Delaware Chancery Court, and an amended complaint was filed in November 2002. The
defendants named in the amended complaint were former Company directors The Honorable Alfonse M.
D’Amato, Shirley Strum Kenny and Messrs. Wang, Kumar, Artzt, Willem de Vogel, Richard Grasso, Roel
Pieper, and Lewis S. Ranieri. The Company was named as a nominal defendant. The derivative suit
alleged breach of fiduciary duties on the part of all the individual defendants and, as against the
former management director defendants, insider trading on the basis of allegedly misappropriated
confidential, material information. The amended complaint sought an accounting and recovery on
behalf of the Company of an unspecified amount of damages, including recovery of the profits
allegedly realized from the sale of Common Stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On August 25, 2003, the Company announced the settlement of the above-described class action
lawsuits against the Company and certain of its present and former officers and directors, alleging
misleading statements, misrepresentations, and omissions regarding the Company’s financial
performance, as well as breaches of fiduciary duty. At the same time, the Company also announced
the settlement of a derivative lawsuit, in which the Company was named as a nominal defendant,
filed against certain present and former officers and directors of the Company, alleging breaches
of fiduciary duty and, against certain management directors, insider trading, as well as the
settlement of an additional derivative action filed by Charles Federman that had been pending in
the Federal Court. As part of the class action settlement, which was approved by the Federal Court
in December 2003, the Company agreed to issue a total of up to 5.7 million shares of Common Stock
to the stockholders represented in the three class action lawsuits, including payment of attorneys’
fees. The Company completed the issuance of the settlement shares as well as payment of $3.3
million to the plaintiffs’ attorneys in legal fees and related expenses in 2004.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In settling the derivative suits, which settlement was approved by the Federal Court in December
2003, the Company committed to maintain certain corporate governance practices. Under the
settlement, the Company, the individual defendants and all other then current and former officers
and directors of the Company were released from any potential claim by stockholders arising from
accounting-related or other public statements made by the Company or its agents from January 1998
through February 2002 (and from March 11, 1998 through May 2003 in the case of the employee ERISA
action). The individual defendants were released from any potential claim by or on behalf of the
Company relating to the same matters.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On October 5, 2004 and December 9, 2004, four purported Company stockholders served motions to
vacate the Order of Final Judgment and Dismissal entered by the Federal Court in December 2003 in
connection with the settlement of the derivative action. These motions primarily sought to void the
releases that were granted to the individual defendants under the settlement. On December 7, 2004,
a motion to vacate the Order of Final Judgment and Dismissal entered by the Federal Court in
December 2003 in connection with the settlement of the 1998 and 2002 stockholder lawsuits discussed
above (together with the October 5, 2004 and December 9, 2004 motions, the 60(b) Motions) was filed
by Sam Wyly and certain related parties (the Wyly Litigants). The motion sought to reopen the
settlement to permit the moving stockholders to pursue individual claims against certain present
and former officers of the Company. The motion stated that the moving stockholders did not seek to
file claims against the Company.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Derivative Actions Filed in 2004 </u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June and July 2004, three purported derivative actions were filed in the Federal Court by Ranger
Governance, Ltd. (Ranger), Bert Vladimir and Irving Rosenzweig against certain current or former
employees and/or directors of the Company (the Derivative Actions). In November 2004, the Federal
Court issued an order consolidating the Derivative Actions. The plaintiffs filed a consolidated
amended complaint (the Consolidated Complaint) on January 7, 2005. The Consolidated Complaint names
as defendants Messrs. Wang, Kumar, Zar, McWade, Schwartz, de Vogel, Grasso, Pieper, Artzt, D’Amato,
and Ranieri, Stephen Richards, Steven Woghin, David Kaplan, David Rivard, Lloyd Silverstein,
Michael A. McElroy, Gary Fernandes, Robert E. La Blanc, Jay W. Lorsch, Kenneth Cron, Walter P.
Schuetze, KPMG LLP, and Ernst & Young LLP. The Company is named as a nominal defendant. The
Consolidated Complaint seeks from one or more of the defendants (1) contribution towards the
consideration the Company had previously agreed to provide then current and former stockholders in
settlement of certain class action litigation commenced against the Company and certain officers
and directors in 1998 and 2002 (see “Stockholder Class Action and Derivative Lawsuits Filed Prior
to 2004 — Background”), (2) compensatory and consequential damages in an amount not less than $500
million in connection with the investigations giving rise to the Deferred Prosecution Agreement
(DPA) entered into between the Company and the United States Attorney’s Office (USAO) in 2004 and a
consent to enter into a final judgment (Consent Judgment) in a parallel proceeding brought by the
SEC regarding certain of the Company’s past accounting practices, including its revenue recognition
policies and procedures during certain periods prior to the adoption of the Company’s new business
model in October 2000. (In May 2007, based upon the Company’s compliance with the terms of the DPA,
the Federal Court ordered dismissal of the charges that had been filed against the Company in
connection with the DPA, and the DPA expired. The injunctive provisions of the Consent Judgment
permanently enjoining the Company from violating certain provisions of the federal securities laws
remain in effect.), (3) unspecified relief for violations of Section 14(a) of the Exchange Act for
alleged false and material misstatements made in the Company’s proxy statements issued in 2002 and
2003, (4) relief for alleged breach of fiduciary duty, (5) unspecified compensatory, consequential
and punitive damages based upon allegations of corporate waste and fraud, (6) unspecified damages
for breach of duty of reasonable care, (7) restitution and rescission of the compensation earned
under the Company’s executive compensation plan and (8) pursuant to Section 304 of the
Sarbanes-Oxley Act, reimbursement of bonus or other incentive-based equity compensation and alleged
profits realized from sales of securities issued by the Company. Although no relief is sought
from
the Company, the Consolidated Complaint seeks monetary damages, both compensatory and
consequential, from the other defendants, including current or former employees and/or directors of
the Company, Ernst & Young LLP and KPMG LLP in an amount totaling not less than $500 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On February 1, 2005, the Company established a Special Litigation Committee of independent members
of its Board of Directors to, among other things, control and determine the Company’s response to
the Derivative Actions and the 60(b) Motions. On April 13, 2007, the Special Litigation Committee
issued its reports, which announced the Special Litigation Committee’s conclusions, determinations,
recommendations and actions with respect to the claims asserted in the Derivative Actions and the
60(b) Motions. The Special Litigation Committee also served a motion which seeks to dismiss and
realign the claims and parties in accordance with the Special Litigation Committee’s
recommendations. As summarized below, the Special Litigation Committee concluded as follows:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><b>•</b> </b>The Special Litigation Committee has concluded that it would be in the best interests of the
Company to pursue certain of the claims against Messrs. Wang and Schwartz.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><b>•</b> </b>The Special Litigation Committee has concluded that it would be in the best interests of the
Company to pursue certain of the claims against the former Company executives who have pled guilty
to various charges of securities fraud and/or obstruction of justice — including Messrs. Kaplan,
Richards, Rivard, Silverstein, Woghin and Zar. The Special Litigation Committee has determined and
directed that these claims be pursued by the Company using counsel retained by the Company, unless
the Special Litigation Committee is able to successfully conclude its ongoing settlement
negotiations with these individuals.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><b>•</b> </b>The Special Litigation Committee has reached a settlement (subject to court approval) with
Messrs. Kumar, McWade and Artzt.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><b>•</b> </b>The Special Litigation Committee believes that the claims (the Director Claims) against former
Company directors Messrs. Cron, D’Amato, de Vogel, Fernandes, Grasso, La Blanc, Lorsch, Pieper,
Ranieri and Schuetze, Ms. Kenny, and Alex Vieux should be dismissed. The Special Litigation
Committee has concluded that these directors did not breach their fiduciary duties and the claims
against them lack merit.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><b><b>•</b> </b>The Special Litigation Committee has concluded that it would be in the best interests of the
Company to seek dismissal of the claims against Ernst & Young LLP, KPMG LLP and Mr. McElroy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Special Litigation Committee served a motion which sought dismissal of the Director Claims, the
claims against Ernst & Young LLP, KPMG LLP and Mr. McElroy, and certain other claims. In addition,
the Special Litigation Committee asked for the Federal Court’s approval for the Company to be
realigned as the plaintiff with respect to claims against certain other parties, including Messrs.
Wang and Schwartz.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Current Procedural Status of Stockholder Class Action and Derivative Lawsuits Filed Prior to
2004 and Derivative Actions Filed in 2004 </u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">By letter dated July 19, 2007, counsel for the Special Litigation Committee advised the Federal
Court that the Special Litigation Committee had reached a settlement of the Derivative Actions with
two of the three derivative plaintiffs — Bert Vladimir and Irving Rosenzweig. In connection with
the settlement, both of these plaintiffs have agreed to support the Special Litigation Committee’s
motion to dismiss and to realign. The Company has agreed to pay the attorney’s fees of Messrs.
Vladimir and Rosenzweig in an amount up to $525,000 each. If finalized, this settlement would
require approval of the Federal Court. On July 23, 2007, Ranger filed a letter with the Federal
Court objecting to the proposed settlement. On October 29, 2007, the Federal Court denied the
Special Litigation Committee’s motion to dismiss and realign, without prejudice to renewing the
motion after a decision by the appellate court regarding the Federal Court’s decisions concerning
the 60(b) Motions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In a memorandum and order dated August 2, 2007, the Federal Court denied all of the 60(b) Motions
and reaffirmed the 2003 settlements (the August 2 decision). On August 24, 2007, Ranger and the
Wyly Litigants filed notices of appeal of the August 2 decision. On August 16, 2007, the Special
Litigation
Committee filed a motion to amend or clarify the August 2 decision, and the Company
joined that motion. On September 12, 2007 and October 4, 2007, the Federal Court issued opinions
denying the motions to amend or clarify, and several parties then appealed these decisions. On
July 23, 2009, the United States Court of Appeals for the Second Circuit issued a summary order
affirming the August 2, September 12 and October 4, 2007 decisions of the Federal Court referenced
above. The summary order also acknowledged that the Ranger Governance litigation that was part of
the 2004 Derivative Actions was not before the Second Circuit and, therefore, the Company could
renew its motion to dismiss and realign that had been dismissed without prejudice in the October
29, 2007 decision referenced above. On August 31, 2009, Ranger and the Wyly Litigants filed
petitions for rehearing before the Second Circuit, which were denied by the Second Circuit on
October 19, 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Texas Litigation </u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On August 9, 2004, a petition was filed by Sam Wyly and Ranger against the Company in the District
Court of Dallas County, Texas, seeking to obtain a declaratory judgment that plaintiffs did not
breach two separation agreements they entered into with the Company in 2002 (the 2002 Agreements).
On February 18, 2005, Mr. Wyly filed a separate lawsuit in the United States District Court for the
Northern District of Texas (the Texas Federal Court) alleging that he is entitled to attorneys’
fees in connection with the original litigation filed in the District Court of Dallas County,
Texas. The two actions have been consolidated and transferred to the Federal Court. On March 31,
2005, the plaintiffs amended their complaint to allege a claim that they were defrauded into
entering the 2002 Agreements and to seek rescission of those agreements and damages. On September
18, 2009, the Federal Court issued an order granting the Company’s motion for summary judgment, and
dismissing the action in its entirety.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Other Civil Actions</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In 2004, the Company entered a voluntary disclosure agreement (VDA) with the State of Delaware, by
which the Company agreed to disclose information about its failure to comply with certain abandoned
property (“escheatment”) procedures and, in return, the State agreed, among other things, not to
impose interest or conduct an audit. The Company engaged an independent consultant to review its
records and provide an estimate of its liability to the State. The State refused to accept that
estimate. In October 2008, the Company commenced an action entitled <i>CA, Inc. v. Cordrey, et al,</i>
Civil Action No. 4111-CC in the Delaware Chancery Court (the Delaware Court) seeking, among other
things, to compel the State to abide by its obligations under the VDA. In November 2008, the State
filed a suit in the Delaware Court entitled <i>Cordrey, et al v. CA, Inc. et al </i>, Civil Action
No. 4195-CC, that seeks to enforce a request for payment of abandoned property liability, compel an
audit and impose interest. By an amended complaint, dated March 2, 2009, the State alleged, among
other things, that the Company made material misrepresentations in and unreasonably delayed the VDA
process and the state added causes of action for fraud and/or negligent misrepresentation. Although
the ultimate outcome cannot be determined, the Company believes that the State’s claims are
unfounded and that the Company has meritorious defenses. In the opinion of management, the
resolution of this lawsuit is not expected to have a material adverse effect on the Company’s
financial position, results of operations, or cash flows.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In December 2008, a lawsuit captioned <i>Information Protection and Authentication of Texas LLC v.
Symantec Corp., et al. </i>was filed in the United States District Court for the Eastern District of
Texas. The complaint seeks monetary damages in an undisclosed amount against twenty-two separate
defendants including the Company based upon claims for direct and contributory infringement of two
separate patents. The complaint does not disclose which of the Company’s products allegedly
infringe the claimed patents. In discovery, plaintiff has asserted that three of CA’s security
products containing firewall technology are at issue in this suit. In March 2009, the Company both
answered the complaint and filed a cross-complaint seeking a declaratory judgment that the Company
does not infringe the claimed patents and that such patents are invalid. Although the ultimate
outcome cannot be determined, the Company believes that the claims are unfounded and that the
Company has meritorious defenses. In the opinion of management, the resolution of this lawsuit is
not expected to have a material adverse effect on the Company’s financial position, results of
operations, or cash flows.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company, various subsidiaries, and certain current and former officers have been named as
defendants in various other lawsuits and claims arising in the normal course of business. The
Company believes that it has meritorious defenses in connection with such lawsuits and claims, and
intends to vigorously contest each of them. In the opinion of the Company’s management, the results
of these other lawsuits and claims, either individually or in the aggregate, are not expected to
have a material adverse effect on the Company’s financial position, results of operations, or cash
flows, although the impact could be material to any individual reporting period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is obligated to indemnify its officers and directors under certain circumstances to the
fullest extent permitted by Delaware law. As a part of that obligation, the Company has advanced
and will continue to advance certain attorneys’ fees and expenses incurred by current and former
officers and directors in various litigations and investigations arising out of similar
allegations, including the litigation described above.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Additional information about litigation involving the Company’s directors and executive officers is
contained in the Company’s periodic and other reports filed with the SEC.
</div>
</div>
69000000
87000000
-63000000
-33000000
-246000000
157000000
73000000
37000000
78000000
39000000
-15000000
9000000
-1000000
-2000000
18000000
6000000
14000000
7000000
155000000
128000000
false
--03-31
2009-09-30
10-Q
0000356028
521721310
Yes
Large Accelerated Filer
7700000000
CA, INC.
No
Yes
120000000
83000000
839000000
718000000
128000000
84000000
85000000
43000000
84000000
64000000
1015000000
1088000000
-183000000
-109000000
3686000000
3611000000
18000000
20000000
60000000
29000000
68000000
34000000
11241000000
11401000000
4169000000
4359000000
2795000000
2399000000
2712000000
3025000000
-396000000
313000000
2712000000
3025000000
0.1
0.1
1100000000
1100000000
589695081
589695081
514292558
516865988
59000000
59000000
155000000
80000000
139000000
73000000
1556000000
777000000
1458000000
733000000
621000000
643000000
95000000
68000000
2431000000
2186000000
1000000000
1065000000
513000000
482000000
268000000
269000000
40000000
50000000
136000000
121000000
133000000
146000000
0.77
0.39
0.79
0.42
0.76
0.39
0.78
0.41
-150000000
156000000
48000000
53000000
306000000
249000000
232000000
110000000
230000000
120000000
5364000000
5366000000
614000000
317000000
625000000
317000000
216000000
115000000
212000000
99000000
-78000000
-13000000
299000000
190000000
-85000000
-96000000
-78000000
-44000000
-428000000
-317000000
-14000000
-1000000
-24000000
-13000000
-39000000
-22000000
6879000000
6591000000
11241000000
11401000000
4049000000
3691000000
284000000
308000000
1940000000
975000000
1919000000
973000000
1287000000
1291000000
-390000000
-89000000
-128000000
-136000000
272000000
382000000
398000000
202000000
413000000
218000000
638000000
330000000
664000000
339000000
362000000
373000000
105000000
134000000
715000000
733000000
123000000
115000000
67000000
38000000
61000000
28000000
-7000000
2000000
0
45000000
41000000
42000000
21000000
5000000
45000000
42000000
0
0
10000000
10000000
0
0
0
0
0
0
7000000
2000000
442000000
462000000
11000000
3000000
356000000
4000000
243000000
120000000
234000000
115000000
4000000
0
2000000
0
2673000000
3044000000
2194000000
1107000000
2122000000
1072000000
608000000
311000000
567000000
286000000
4362000000
4810000000
163000000
84000000
126000000
59000000
187000000
94000000
142000000
71000000
75402523
72829093
1873000000
1795000000
537000000
538000000
541000000
542000000
513000000
514000000
517000000
518000000
The Condensed Consolidated Statement of Cash Flows for the six months ended September 30, 2008 has been revised to reflect the retrospective adoption of new accounting standards. For further information refer to Note A, "Basis of Presentation," in the Notes to these Condensed Consolidated Financial Statements.
The Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2008 have been revised to reflect the retrospective adoption of new accounting standards. For further information refer to Note A, "Basis of Presentation," in the Notes to these Condensed Consolidated Financial Statements.
The Condensed Consolidated Balance Sheet as of March 31, 2009 has been revised to reflect the retrospective adoption of new accounting standards. For further information refer to Note A, "Basis of Presentation," in the Notes to these Condensed Consolidated Financial Statements.