MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statement
This Quarterly Report on Form 10-Q (Form 10-Q) contains certain forward-looking information relating to CA, Inc. (the "Company," "Registrant," "CA," "we," "our," or "us"), that is based on the beliefs of, and assumptions made by, our management as well as information currently available to management. When used in this Form 10-Q, the words "anticipate," "believe," "estimate," "expect" and similar expressions are intended to identify forward-looking information. Such information includes, for example, the statements made in this Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A), but also appears in other parts of this Form 10-Q. This forward-looking information reflects our current views with respect to future events and is subject to certain risks, uncertainties, and assumptions, some of which are described below in the section "Risk Factors" and under the caption "Risk Factors" in Part I Item 1A and elsewhere in our Annual Report on Form 10-K for the fiscal year ended March 31, 2008. Should one or more of these risks or uncertainties occur, or should our assumptions prove incorrect, actual results may vary materially from those described in this Form 10-Q as anticipated, believed, estimated, or expected. We do not intend to update these forward-looking statements. This MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes to the financial statements.
The product and services names mentioned in this Form 10-Q are used for identification purposes only and may be protected by trademarks, trade names, services marks and/or other intellectual property rights of the Company and/or other parties in the United States and/or other jurisdictions. The absence of a specific attribution in connection with any such mark or name does not constitute a waiver of any such right. References in this Form 10-Q to fiscal 2009 and fiscal 2008 are to our fiscal years ended on March 31, 2009 and 2008, respectively.
OVERVIEW
We are one of the world's leading independent information technology (IT) management software companies, helping organizations use IT to better perform, compete, innovate and grow. We help customers govern, manage and secure their entire IT operation - all of the people, information, processes, systems, networks, applications and databases, from a Web service to the mainframe, regardless of the hardware or software they are using.
We license our products worldwide, principally to large IT service providers, financial services companies, governmental agencies, retailers, manufacturers, educational institutions, and healthcare institutions. These customers typically maintain IT infrastructures that are both complex and central to their objectives for operational excellence.
We offer our software products and solutions directly to our customers through our direct sales force and indirectly through global systems integrators, value-added partners, original equipment manufacturers, and distribution partners.
For further discussion of our business and business model, see our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 (the 2008 Form 10-K). For further discussion of our Critical Accounting Policies and Business Practices, see "Critical Accounting Policies and Business Practices," which is included in Item 2 of Part I of this Form 10-Q.
We have assessed and will continue to assess the impact on our business of the general economic downturn and the related impact on the financial services sector in particular. Approximately one third of our revenue comes from arrangements with financial institutions (i.e., banking, brokerage and insurance companies). The majority of these arrangements are for the renewal of mainframe capacity and maintenance associated with transactions processed by such financial institutions. While we cannot predict what impact there may be on our business from further consolidation of the financial industry sector, or the impact from the economy in general on our business, to date the impact has not been

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS material to our balance sheet, results of operations or cash flows. The vast majority of our subscription and maintenance revenue in any particular reporting period comes from contracts signed in prior periods, generally pursuant to contracts ranging in duration from three to five years.
In the ordinary course of business we review our cash and investment balances with respect to counterparty exposure. To date we have not experienced any significant impact as a result of the recent financial credit crisis. In the future, our (or our customer's) ability to finance transactions, or our ability to obtain liquidity at favorable terms could be adversely affected.
QUARTERLY UPDATE
• In July 2008, CA announced the launch of a customized channel partner program dedicated to its global Internet Security partners focus on CA's anti-malware product portfolio. The Program for Internet Security will help value-added resellers (VARS), retailers and technology partners to market and sell solutions to service small, medium and large organizations, as well as the home and home office market.

• In August 2008, CA and Arcot Systems announced the availability of a solution designed to help organizations reduce the risk of fraud and identity theft in online transactions through risk-based authentication.

• In September 2008, CA enhanced its market leading CA Clarity™ Project and Portfolio Manager (PPM) solution by fully integrating cost and schedule measurement functionality to help U.S. Federal government agencies and contractors conform to the ANSI/EIA-748 standard for Earned Value Management Systems.

• In September 2008, CA announced its intent to provide broad-based support for Microsoft's virtualization technology across its Recovery Management, Virtualization Management, Security and Systems Management products. This support will help Microsoft customers to effectively manage, govern and secure even the most complex virtualized environments.

• In September 2008, CA announced CA GRC Manager NERC Program Accelerator, a complete North American Electric Reliability Corporation (NERC) compliance program for power and utility customers.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PERFORMANCE INDICATORS Management uses several quantitative performance indicators to assess our financial results and condition. Following is a summary of the principal quantitative performance indicators that management uses to review performance: Three Months Ended September 30, Percent 2008 2007 Change Change (dollars in millions) Total revenue $ 1,107 $ 1,067 $ 40 4 % Subscription and maintenance revenue $ 975 $ 936 $ 39 4 % Net income $ 209 $ 137 $ 72 53 % Cash provided by operating activities $ 218 $ 193 $ 25 13 % Total bookings $ 1,502 $ 1,041 $ 461 44 % Subscription and maintenance bookings $ 1,393 $ 897 $ 496 55 % Weighted average subscription and maintenance duration in years 4.14 2.97 1.17 39 % Annualized subscription and maintenance bookings $ 336 $ 302 $ 34 11 % Six Months Ended September 30, Percent 2008 2007 Change Change (dollars in millions) Total revenue $ 2,194 $ 2,092 $ 102 5 % Subscription and maintenance revenue $ 1,940 $ 1,843 $ 97 5 % Net income $ 409 $ 266 $ 143 54 % Cash provided by operating activities $ 272 $ 180 $ 92 51 % Total bookings $ 2,532 $ 1,936 $ 596 31 % Subscription and maintenance bookings $ 2,311 $ 1,659 $ 652 39 % Weighted average subscription and maintenance duration in years 3.84 2.96 0.88 30 % Annualized subscription and maintenance bookings $ 602 $ 560 $ 42 8 % Change From Change Sept. 30, March 31, Fiscal Sept. 30, From Prior 2008 2008 Year End 2007 Year Quarter (in millions) Cash, cash equivalents and marketable securities(1) $ 2,400 $ 2,796 $ (396 ) $ 1,890 $ 510 Total debt $ 2,239 $ 2,582 $ (343 ) $ 2,578 $ (339 ) Total expected future cash collections from committed contracts(2) $ 4,723 $ 4,362 $ 361 $ 4,185 $ 538 Total revenue backlog(2) $ 7,005 $ 6,858 $ 147 $ 6,175 $ 830

(1) Marketable securities were $1 million as of September 30, 2008 and March 31, 2008.

(2) Refer to the discussion in the "Liquidity and Capital Resources" section of this MD&A for additional information on expected future cash collections from committed contracts, billings backlog and revenue backlog.

Analyses of our performance indicators, including general trends, can be found in the "Results of Operations" and "Liquidity and Capital Resources" sections of this MD&A. The performance indicators discussed below are those that we believe are unique because of our subscription-based business model.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Subscription and Maintenance Revenue - Subscription and maintenance revenue is the amount of revenue recognized ratably during the reporting period from both:
(i) subscription license agreements that were in effect during the period, which generally include maintenance that is bundled with and not separately identifiable from software usage fees or product sales, and (ii) maintenance agreements associated with providing customer technical support and access to software fixes and upgrades that are separately identifiable from software usage fees or product sales. These amounts include the sale of products directly by CA, as well as by distributors, resellers and value-added resellers to end-users, where the contracts incorporate the right for end-users to receive unspecified future software products and other contracts entered into in close proximity or contemplation of such agreements. Total Bookings - Effective April 1, 2008, we changed our measurement of our new business activity from new deferred subscription value to total bookings. In addition to what was previously included in new deferred subscription value, subscription and maintenance bookings now includes the value of maintenance contracts committed by customers in the current period that were separate from license subscription contracts, whereas new deferred subscription value excluded certain of these types of agreements. The bookings amounts disclosed in this MD&A include the effects of this change. The incremental value of these agreements was $49 million for the quarter ended September 30, 2007. Total bookings also includes the new professional services and software fees and other contracts that were not previously included in new deferred subscription value. Subscription and Maintenance Bookings - Subscription and maintenance bookings is the aggregate incremental amount we expect to collect from our customers over the terms of the underlying subscription and maintenance license agreements entered into during a reporting period. These amounts include the sale of products directly by CA, as well as by distributors, resellers and value-added resellers to end-users, where the contracts incorporate the right for end-users to receive unspecified future software products, and other contracts entered into in close proximity or contemplation of such agreements. These amounts are expected to be recognized ratably as subscription and maintenance revenue over the applicable software license terms. Subscription and maintenance bookings typically excludes the value associated with certain perpetual based licenses, license-only indirect sales, and professional services arrangements. The license agreements that contribute to subscription and maintenance bookings represent binding payment commitments by customers over periods generally from three to five years, although in certain cases customer commitments can be for longer periods. The amount of new subscription and maintenance bookings recorded in a period is affected by the volume and amount of contracts renewed during that period. Typically, our subscription and maintenance bookings increase in each consecutive quarter during a fiscal year, with the first quarter being the weakest and the fourth quarter being the strongest. However, as we make efforts to improve the balance of the distribution of our contract renewals throughout the fiscal year, subscription and maintenance bookings may not always follow the pattern of increasing in consecutive quarters during a fiscal year, and the quarter to quarter differences in subscription and maintenance bookings may be more moderate. Additionally, changes in subscription and maintenance bookings, relative to previous periods, do not necessarily correlate to changes in billings or cash receipts, relative to previous periods. The contribution to current period revenue from subscription and maintenance bookings from any single license agreement is relatively small, since revenue is recognized ratably over the applicable license agreement term. Weighted Average Subscription and Maintenance Duration in Years - The weighted average subscription and maintenance duration in years reflects the average duration of all subscription and maintenance licenses executed during a period, weighted by the contract value of each individual license. Effective April 1, 2008, our calculation of weighted average agreement duration now includes all subscription and maintenance contracts for both direct and indirect channels, whereas the prior calculation reflected direct product subscription licenses only. This modification has also been reflected in the weighted average agreement duration from the first quarter of fiscal year 2008 for comparison purposes and resulted in a

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS decrease of 0.2 years for the second quarter of fiscal year 2008. The increase in the weighted average license agreement duration in years for the second quarter of fiscal 2009 compared with the second quarter of fiscal 2008 was attributable to an increase in the number and amounts of contracts executed with contract terms longer than the historical averages, including several large contracts with terms of approximately five years, two of which had a combined contract value of approximately $550 million.
Annualized Subscription and Maintenance Bookings- Annualized subscription and maintenance bookings is an indicator of future revenue to be realized on an annual basis from contracts signed during the period. It is calculated by dividing the total value of all new term-based software license agreements entered into during a period by the weighted average duration in years of all such license agreements recorded during the same period.
Total Revenue Backlog - Total revenue backlog represents the aggregate amount the Company expects to recognize as revenue in the future as either subscription and maintenance revenue or professional services revenue associated with contractually committed amounts billed or to be billed as of the balance sheet date. Total revenue backlog is comprised of amounts recognized as a liability in our Condensed Consolidated Balance Sheets as "Deferred revenue (billed or collected)" as well as unearned amounts associated with balances yet to be billed under subscription and maintenance agreements. Amounts are classified as current or non-current depending on when they are expected to be earned and therefore recognized as revenue. The portion of the total revenue backlog that relates to subscription and maintenance licenses is recognized as revenue evenly on a monthly basis over the duration of the underlying license agreements and is reported as "Subscription and maintenance revenue" in our Condensed Consolidated Statements of Operations.
"Deferred revenue (billed or collected)" is comprised of: (i) amounts received in advance of revenue recognition from the customer, (ii) amounts billed but not collected for which revenue has not yet been earned, and (iii) amounts received in advance of revenue recognition from financial institutions where the Company has transferred its interest in committed installments (referred to as "Financing obligations" in Note A, "Basis of Presentation" in the Condensed Consolidated Financial Statements).

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following table presents changes in the line items on our Condensed Consolidated Statement of Operations for the three- and six-month periods ended September 30, 2008 and 2007 measured by Dollar Change, Percentage of Dollar Change, and Percentage of Total Revenue. Past financial results are not necessarily indicative of future results. Three Months Ended September 30, Percentage Percentage Dollar of of Change Dollar Total 2008/ Change Revenue 2008 2007 2007 2008/2007 2008 2007 (dollars in millions) Revenue Subscription and maintenance revenue $ 975 $ 936 $ 39 4 % 88 % 88 % Professional services 94 95 (1 ) (1 ) 9 9 Software fees and other 38 36 2 6 3 3 Total revenue $ 1,107 $ 1,067 $ 40 4 % 100 % 100 % Expenses Costs of licensing and maintenance $ 80 $ 69 $ 11 16 % 7 % 6 % Cost of professional services 84 91 (7 ) (8 ) 8 9 Amortization of capitalized software costs 29 29 - - 3 3 Selling and marketing 311 317 (6 ) (2 ) 28 30 General and administrative 110 151 (41 ) (27 ) 10 14 Product development and enhancements 120 126 (6 ) (5 ) 11 12 Depreciation and amortization of other intangible assets 37 38 (1 ) (3 ) 3 4 Other expenses (gains), net 6 (11 ) 17 (155 ) 1 (1 ) Restructuring and other - 13 (13 ) (100 ) - 1 Total expenses before interest and income taxes 777 823 (46 ) (6 ) 70 77 Income before interest and income taxes 330 244 86 35 30 23 Interest expense, net 2 13 (11 ) (85 ) - 1 Income before income taxes 328 231 97 42 30 22 Income tax expense 119 94 25 27 11 9 Net income $ 209 $ 137 $ 72 53 % 19 % 13 %

Note - Amounts may not add to their respective totals due to rounding.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Six Months Ended September 30, Percentage Percentage Dollar of of Change Dollar Total 2008/ Change Revenue 2008 2007 2007 2008/2007 2008 2007 (dollars in millions) Revenue Subscription and maintenance revenue $ 1,940 $ 1,843 $ 97 5 % 88 % 88 % Professional services 187 188 (1 ) (1 ) 9 9 Software fees and other 67 61 6 10 3 3 Total revenue $ 2,194 $ 2,092 $ 102 5 % 100 % 100 % Expenses Costs of licensing and maintenance $ 155 $ 135 $ 20 15 % 7 % 6 % Cost of professional services 163 186 (23 ) (12 ) 7 9 Amortization of capitalized software costs 60 58 2 3 3 3 Selling and marketing 608 623 (15 ) (2 ) 28 30 General and administrative 232 283 (51 ) (18 ) 11 14 Product development and enhancements 243 255 (12 ) (5 ) 11 12 Depreciation and amortization of other intangible assets 73 77 (4 ) (5 ) 3 4 Other expenses (gains), net 18 (5 ) 23 (460 ) 1 - Restructuring and other 4 25 (21 ) (84 ) - 1 Total expenses before interest and income taxes 1,556 1,637 (81 ) (5 ) 71 78 Income before interest and income taxes 638 455 183 40 29 22 Interest expense, net 6 27 (21 ) (78 ) - 1 Income before income taxes 632 428 204 48 29 20 Income tax expense 223 162 61 38 10 8 Net income $ 409 $ 266 $ 143 54 % 19 % 13 %

Note - Amounts may not add to their respective totals due to rounding.
Revenue
The increase in total revenue for both the three- and six-month periods ended September 30, 2008 was primarily due to growth in subscription and maintenance revenue. Total revenue was favorably impacted by foreign exchange of approximately $42 million and $100 million for the three- and six-month periods ended September 30, 2008, respectively.
Price changes do not have a material impact on revenue in a given period as a result of our ratable subscription model. Subscription and Maintenance Revenue
Subscription and maintenance revenue is the amount of revenue recognized ratably during the reporting period from both: (i) subscription license agreements that were in effect during the period, which generally include maintenance that is bundled with and not separately identifiable from software usage fees or product sales, and (ii) maintenance agreements associated with providing customer technical support and access to software fixes and upgrades which are separately identifiable from software usage fees or product sales.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Subscription and Maintenance Bookings
For the three-month periods ended September 30, 2008 and 2007, we added . . .