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.
A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, including:
the timing of orders from customers and channel partners may cause fluctuations in some of our key financial metrics; given the global nature of our business, economic factors or political events beyond our control can affect our business in unpredictable ways; changes to the compensation of our sales organization and changes to our sales coverage model and organization could adversely affect our business, financial condition, operating results and cash flow; if we do not adequately manage and evolve our financial reporting and managerial systems and processes, including the successful implementation of our enterprise resource planning software, our ability to manage and grow our business may be harmed; we may encounter difficulty in successfully integrating acquired companies and products into our existing businesses; we are subject to intense competition in product and service offerings and pricing and increased competition is expected in the future; our business may suffer if it is not able to retain and attract qualified personnel, including key managerial, technical, marketing and sales personnel; failure to adapt to technological change in a timely manner could materially adversely affect our revenue and earnings; if our products do not remain compatible with ever-changing operating environments, we could lose customers and the demand for our products and services could decrease; we may lose access to third party operating systems or certain third party software that we use in daily operations, either of which could delay product development and production; certain software we use is from open source code sources, which, under certain circumstances, may lead to unintended consequences; discovery of errors in our software could materially adversely affect our revenue and earnings and subject us to product liability claims, which may be costly and time consuming; our credit ratings have been downgraded in the past and could be downgraded further which would require us to pay additional interest under our credit agreement and could adversely affect our ability to borrow; we have a significant amount of debt; the failure to protect our intellectual property rights and source code would weaken our competitive position; we may become dependent upon large transactions with customers; our sales to government customers subject us to risks, including early termination, audits, investigations, sanctions and penalties; our software products, our customers' and our data centers and IT environments may be subject to hacking or other breaches, harming the market perception of the effectiveness of our products; general economic conditions, including concerns regarding a potential global recession and credit constraints, or unfavorable economic conditions in a particular region, business or industry sector, may lead our customers to delay or forgo technology investments and could have other impacts; the market for some or all of our key product areas may not grow; the use of third party microcode could negatively affect our product development; we may lose access to third party operating systems, which could negatively affect our product development; third parties could claim that our products infringe their intellectual property rights or that we owe royalty payments; fluctuations in foreign currencies could result in translation losses; we have outsourced various functions to third parties and these arrangements may not be successful; potential tax liabilities may materially adversely affect our results; and these factors and the other factors described more fully in our filings with the Securities and Exchange Commission. 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, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS statements that speak only as of the date hereof. 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.
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." 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 our financial institution customers. 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 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.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUARTERLY UPDATE
• In October 2008, CA announced plans to expand its India Technology Center (ITC) with the construction of a new 180,000 square foot building on the CA campus in Hyderabad.

• In October 2008, CA announced that its Board of Directors approved a new stock repurchase program that authorizes the Company to buy up to $250 million of its common stock.

• In November 2008, CA announced the Software-as-a-Service (SaaS) delivery option for its leading enterprise-class PPM solution, CA Clarity Project & Portfolio Manager (PPM). By extending the availability options for its award-winning CA Clarity PPM product, CA now provides CIOs and business executives with best-in-class functionality through a flexible SaaS delivery model.

• In November 2008, CA announced that Kay Koplovitz was elected to its Board of Directors. Ms. Koplovitz was named to the Board's Corporate Governance Committee.

• In November 2008, CA held its 13th user conference CA World in Las Vegas. CA World 2008 brought together more than 5,000 IT professionals from more than 70 countries to exchange IT management strategies for transforming IT from a cost center into an enabler of innovation and business growth.

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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 December 31, Percent 2008 2007 Change Change (dollars in millions) Total revenue $ 1,042 $ 1,100 $ (58 ) (5) % Subscription and maintenance revenue $ 919 $ 968 $ (49 ) (5) % Net income $ 213 $ 163 $ 50 31 % Cash provided by operating activities $ 292 $ 233 $ 59 25 % Total bookings $ 1,248 $ 1,270 $ (22 ) (2) % Subscription and maintenance bookings $ 1,113 $ 1,113 $ - - % Weighted average subscription and maintenance duration in years 3.10 2.94 0.16 5 % Annualized subscription and maintenance bookings $ 359 $ 379 $ (20 ) (5) % Nine Months Ended December 31, Percent 2008 2007 Change Change (dollars in millions) Total revenue $ 3,236 $ 3,192 $ 44 1 % Subscription and maintenance revenue $ 2,859 $ 2,811 $ 48 2 % Net income $ 622 $ 429 $ 193 45 % Cash provided by operating activities $ 564 $ 413 $ 151 37 % Total bookings $ 3,780 $ 3,206 $ 574 18 % Subscription and maintenance bookings $ 3,424 $ 2,772 $ 652 24 % Weighted average subscription and maintenance duration in years 3.60 2.95 0.65 22 % Annualized subscription and maintenance bookings $ 951 $ 940 $ 11 1 % Change From Change Dec. 31, March 31, Fiscal Dec. 31, From Prior 2008 2008 Year End 2007 Year Quarter (in millions) Cash, cash equivalents and marketable securities(1) $ 2,369 $ 2,796 $ (427 ) $ 2,078 $ 291 Total debt $ 2,118 $ 2,582 $ (464 ) $ 2,575 $ (457 ) Total expected future cash collections from committed contracts(2) $ 4,937 $ 4,362 $ 575 $ 4,475 $ 462 Total revenue backlog(2) $ 7,031 $ 6,858 $ 173 $ 6,354 $ 677

(1) Marketable securities were $0.2 million as of December 31, 2008 and $0.8 million as of 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 - Total bookings includes the incremental value of all subscription, maintenance and professional service contracts, software fees and other contracts entered into during the reporting period. 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 $59 million for the quarter ended December 31, 2007. Total bookings also includes the value of 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 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 without these rights 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 term of the agreement. Subscription and maintenance bookings typically excludes the value associated with certain perpetual based licenses, license-only indirect sales, and professional services arrangements. The license and maintenance agreements that contribute to subscription and maintenance bookings represent binding payment commitments by customers over periods that range generally from three to five years, although in certain cases customer commitments can be for longer or shorter periods. The amount of new subscription and maintenance bookings recorded in a period is affected by the volume and value 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 or maintenance agreement is relatively small, since revenue is recognized ratably over the applicable agreement term. Weighted Average Subscription and Maintenance Duration in Years - The weighted average subscription and maintenance duration in years reflects the duration of all subscription and maintenance agreements executed during a period, weighted by the contract value of each individual agreement. Effective April 1, 2008, our calculation of weighted average subscription and maintenance duration in years now includes all subscription and maintenance contracts from both direct and indirect channels, whereas the prior

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS calculation reflected direct product subscription licenses only. This modification has also been reflected in the weighted average subscription and maintenance duration in years from the first quarter of fiscal year 2008 for comparison purposes and resulted in a decrease of 0.22 years for the third quarter of fiscal year 2008. The increase in the weighted average subscription and maintenance duration in years for the third quarter and first nine months of fiscal 2009 compared with the comparable prior year periods was attributable to an increase in the number and dollar values of contracts executed with contract terms longer than the historical averages.
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 and maintenance 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 agreements is recognized as revenue evenly on a monthly basis over the duration of the underlying 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 nine-month periods ended December 31, 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 December 31, 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 $ 919 $ 968 $ (49 ) (5 )% 88 % 88 % Professional services 87 92 (5 ) (5 ) 8 8 Software fees and other 36 40 (4 ) (10 ) 4 4 Total revenue 1,042 1,100 (58 ) (5 )% 100 % 100 % Expenses Costs of licensing and maintenance 70 64 6 9 % 7 % 6 % Cost of professional services 76 92 (16 ) (17 ) 7 8 Amortization of capitalized software costs 31 29 2 7 3 3 Selling and marketing 307 333 (26 ) (8 ) 29 30 General and administrative 110 123 (13 ) (11 ) 11 11 Product development and enhancements 115 135 (20 ) (15 ) 11 12 Depreciation and amortization of other intangible assets 36 40 (4 ) (10 ) 3 4 Other (gains) expenses, net (14 ) 13 (27 ) (208 ) (1 ) 1 Restructuring and other 2 22 (20 ) (91 ) - 2 Total expenses before interest and income taxes 733 851 (118 ) (14 ) 70 77 Income before interest and income taxes 309 249 60 24 30 23 Interest expense, net 8 10 (2 ) (20 ) 1 1 Income before income taxes 301 239 62 26 29 22 Income tax expense 88 76 12 16 8 7 Net income $ 213 $ 163 $ 50 31 % 20 % 15 %

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 Nine Months Ended December 31, 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 $ 2,859 $ 2,811 $ 48 2 % 88 % 88 % Professional services 274 280 (6 ) (2 ) 9 9 Software fees and other 103 101 2 2 3 3 . . .