Computer Associates 2005 Annual Report Download - page 6

I offer this brief history simply to provide a context for the position the company finds itself in today.
We leave fiscal 2005 :
 Led by a new, experienced senior management team
 With an infrastructure that promotes integrity, compliance and good
corporate governance; and
 Having started the long and critical task of rebuilding the culture of
CA and restoring the morale and pride among our employees.
CA’S PROGRESS
CA has begun to gain traction from some of the growth initiatives put in place last year. For fiscal
2005 , CA increased revenue 7 percent to $3.5 billion and increased new deferred subscription
revenue (or bookings) 48 percent year over year. This brings the total balance of committed future
revenue from signed customer contracts to approximately
$5.6 billion at March 31 , 2005 , an
increase of 30 percent compared with the prior fiscal year.
We generated earnings from continuing operations of $0.02 a share for fiscal 2005 , compared
with a loss of $0.04 per share in fiscal 2004 . At the same time, we strengthened our balance
sheet. We generated over $1.5 billion of cash flow from operations, marking the eighth consecutive
year our cash flow from operations has exceeded $1 billion. Our net cash level of approximately
$500 million is the highest in the company’s history.
Our strong cash position gives us the flexibility to invest in our business, increase our dividend
and repurchase our stock. Accordingly, on April
12 , 2005 , we announced that the Board of
Directors authorized CA to double our dividend and buy back up to $400 million in CA stock in fiscal
2006 . Both moves reinforce the confidence our Board of Directors and our senior management
team have in our ability to build shareholder value.
No longer distracted and consumed by internal challenges,
CA is once again resolutely focused
on our success in the market by delivering quality products to our customers and providing
outstanding returns to shareholders.
CA’S CORE STRENGTHS
CA is singularly well positioned as we enter our 29 th year. We have a stable base of revenue and cash
flow from a remarkably loyal base of customers in large and midsized companies who use our
products to help them efficiently manage everything from
PC s and wireless devices to mainframes.
More important, the investments the company made over the last
10 years in Systems
Management and Security are starting to bear fruit, as companies recognize the need to securely
manage their
IT systems to meet a proliferating array of regulatory requirements – including the
Sarbanes-Oxley Act, Basel
II and HIPAA .
At the same time, the overwhelming majority of customers I talk to say they want to reduce the
complexity and the number of vendors they deal with and to form a small number of trusted
partnerships that can provide them with a broad range of integrated solutions leading to a competitive
advantage in the marketplace.
Customers tell me that they believe that
CA can be one of these partners if we live up to our
promises and deliver products of great and lasting value. In particular, they tell me that
CA
needs to focus its sales team on building relationships with them and delivering our products as
solutions to their business problems.
CA 2005 PAGE 04
We have a stable base of revenue and cash flow from a remarkably
loyal base of customers in large and midsized companies
who use our products to help them efficiently manage everything
from PCs and wireless devices to mainframe computers.
Letter from President and Chief Executive Officer John Swainson