Computer Associates 2006 Annual Report Download - page 26

• In October 2005, we completed the acquisition of iLumin Software Services, Inc. (iLumin), a privately
held provider of enterprise message management and archiving software, for a total purchase price of
approximately $48 million. iLumin’s Assentor product line has been added to our Storage Management
business unit.
• In July 2005, we completed the acquisition of Niku Corporation (Niku), a provider of IT management
and governance solutions, for a total purchase price of approximately $345 million. Niku is now part of
our Business Service Optimization business unit.
• In June 2005, we completed the acquisition of Concord Communications, Inc. (Concord), a provider of
network service management software solutions, for a total purchase price of approximately
$359 million. Concord’s solutions are now part of our Enterprise Systems Management business unit.
• In November 2005, we held CAWorld where we unveiled our Enterprise IT Management, or EITM, strategy
and announced 26 EITM-enabled products, including the release of Unicenter r11. This was CA’s first
Unicenter upgrade in 4 years and one of CA’s biggest product launches ever.
• In July 2005, we announced a restructuring plan to more closely align our investments with strategic growth
opportunities. We recorded charges of approximately $66 million in fiscal year 2006 for severance and other
termination benefits and facility closures in connection with our restructuring plan, which included a
workforce reduction of approximately five percent or 800 positions worldwide. The plan is expected to yield
about $75 million in savings on an annualized basis, once the reductions are fully implemented. We
anticipate the total restructuring plan will cost up to $85 million.
• We have increased our operations in India, primarily in product support and development. This has increased
the efficiency of our support and development activities.
• During fiscal year 2006, we repurchased approximately $590 million in Company stock.
We began the implementation of a new enterprise resource planning system which we expect will improve the
efficiency of the Company’s operations and enable us to take advantage of business intelligence tools to generate the
data needed to analyze our business in real-time. We have spent approximately $129 million on this project through
fiscal year 2006 and expect to spend approximately $100 million in fiscal year 2007. Phase one of the implementation
was completed in the first quarter of fiscal year 2007, which covered operating activities in North America and
Worldwide Human Resources.
(b) Financial Information About Segments
Our global business is principally in a single industry segment — the design, development, marketing, licensing,
and support of software products that can operate on a wide range of hardware platforms and operating systems.
Refer to Note 4, “Segment and Geographic Information”, in the Notes to the Consolidated Financial Statements for
financial data pertaining to our segment and geographic operations.
(c) Narrative Description of the Business
We are one of the world’s largest providers of IT management software. We have a clear vision of how organizations
can better manage all of their hardware, software, databases and applications to realize the full power of technology.
We help customers close the gap between the promise of IT and what it actually delivers.
Our EITM strategy for managing IT helps customers unify and simplify the management of heterogeneous business
processes, IT services, applications, users and assets in a secure and automated way across the enterprise. As a
result, customers can reduce cost, reduce risk, improve service and better align their IT to the needs of their
organization.
Growth Strategy
To build our business, we are pursuing a four-part growth strategy:
1. Internal Product Development
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