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CA98
Charles B. Wang
Chairman and
Chief Executive Officer
Computer Associates International, Inc. Annual Report 1998
Unicenter®TND
Unleashed!
Framework Is Everywhere
Jasmine™Blooms
As Good As
IT
Gets
CA. Voted
The Best Place
To Work
™

Table of contents

  • Page 1
    CA98 Computer Associates International, Inc. Annual Report 1998 Unicenter TND Unleashed ! Framework Is Everywhere ® ™ Jasmine Blooms ™ As Good As IT Gets CA. Voted The Best Place To Work Charles B. Wang Chairman and Chief Executive Officer

  • Page 2
    ... 6 CA In The News 1 0 Enterprise Management 1 2 Unicenter TNG /TND ® ™ 16 As Good As IT Gets 22 Information Management 24 Bringing IT All Together-Harmony 26 Jasmine 30 Ingres 34 Opal ™ ® ™ Page 8 ™ Reigns Page 16 II Page 26 38 CA. Voted The Best Place To Work 42 Executive Officers...

  • Page 3
    ... Income (In Millions) • Pretax income excluding interest and the effect of the charges for purchased research and development associated with acquisitions. Average Market Capitalization (In Billions) • Based on average stock price and shares outstanding for each fiscal year. CA98 1

  • Page 4
    ... Letter Dear Stockholder, Creativity, vision, and hard work. Together, these made fiscal 1998 a year of superlatives for CA. This year's Annual Report clearly reflects those qualities- qualities that resulted in the introduction of highly acclaimed technology, an effective global marketing strategy...

  • Page 5
    ... of our new state-of-the-art European headquarters in the United Kingdom. The new facility will be a center for support, marketing, and training across Europe. Incorporating an on-site day care and fitness center, the new facility will reflect CA's corporate philosophy of integrating work and family...

  • Page 6
    ... state-of-the-art management software for specific areas, such as Networks, Security, Software Distribution, Help Desk, Asset Management, Storage, and Electronic Commerce. All are based on CA's industry-leading Unicenter TNG technology. Workgroup Edition offers best-in-class solutions for workgroups...

  • Page 7
    ... on CA's core enterprise and information management technologies, in addition to the largest number of user forums and educational programs to date. Leading industry analysts called CA-World " a golden opportunity to get critical training in a very pleasant atmosphere." New European Headquarters...

  • Page 8
    ...business executives work to reduce risks, increase efficiencies, respond to customers, and add to the bottom line, they wrestle with a proliferation of information, strive for efficient global communication, and struggle to keep their company nimble and responsive. Managing all the technologies that...

  • Page 9
    ... future looks very bright for Computer Associates' flagship product, Unicenter TNG." - Valerie O'Connell Aberdeen Group C Security Performance Availability Storage Virus Protection Problem Software Internet Technology Assets Noncomputing Devices A gives IT managers a business-process focus rather...

  • Page 10
    ... Birth Of A Neugent â„¢ Neural Network Technology Comes Of Age CA's Neugent technology, software agents that apply neural networks to address compelling business problems, transforms every aspect of enterprise systems management in bold new ways. Neural network technology rationalizes the behavior...

  • Page 11
    ...As Gets IT CA Introduces New Enterprise And Workgroup Edition Management Products By Ellen Wheeler Unicenter TNG's loyal following has grown over the past five years at large and midsized organizations. But CA recognized that businesses of all sizes are faced with complex computer networks and can...

  • Page 12
    ... of enterprise management products in April 1998. The Enterprise Edition family is based on Unicenter TNG technology. It contains standalone products in the areas of Network, Security, Software Delivery, Help Desk, Asset Management, Storage, and Web/e-Commerce. Although these products function...

  • Page 13
    ... is second to none." - Valerie O'Connell Source Destination Options Schedule Submit Job Unicenter Workgroup Edition rounds out CA's enterprise management offerings. Through the technical excellence, Cancel scope, and scalability of its Unicenter products, CA has proven to be willing and able to...

  • Page 14
    ..., Computer Associates has led the industry in the development of solutions that sustain this advantage by organizing and managing business-critical information. This year, CA has raised the bar with a new strategy, called HarmonyTM, and a series of next-generation solutions that gives businesses new...

  • Page 15
    ... large and â„¢ â„¢ only embraces CA information management tools, but also supports any information management solutions, regardless of their platform - mainframe, UNIX, or Windows NT. "Users will find that 'Harmonized' CA products enable them to adopt new technology faster than ever, and make it...

  • Page 16
    ... Emerges Today By Andy Phillips Providing forward-looking technology to help our clients meet their business objectives has always been Computer Associates' goal. This is especially challenging in a world where new technologies are constantly emerging and continual innovation is a standard business...

  • Page 17
    ... product and service delivery. "IDC expects that Jasmine will be very successful, propelling the object database management systems market 'over the chasm' and into mainstream use." - Steve McClure International Data Corporation asmine is a pure object database and Internet application development...

  • Page 18
    ...E M E N T Ingres II Information Anywhere, Anytime By Ed McNealy Tens of thousands of organizations rely on CA's more traditional relational database solutions to address their evolving requirements. The Harmony relational solution, Ingres II, delivers the latest technologies to meet these critical...

  • Page 19
    ...a client/server environment. Ingres II was the only solution." - Karen Bishop Management Information Office, International Missions Board Guinea-Bissaau Guinea Sierra Leone Liberia Côte d' Ivoire Equat Benin Togo Ghana Stop Video Database Processing. The ability to leverage new operating system...

  • Page 20
    ... G E M E N T Opal Protecting The Legacy By Audrey Watson Virtually all organizations have significant investments in legacy applications. CA recognizes the value of these mainframe and enterprise-server systems as they continue to be the foundation for most companies' mission-critical applications...

  • Page 21
    ... of their diverse information management needs. The Opal Modern Interface allows deployment on traditional PCs, on network computers, or in a Web browser. Opal provides access to information from any source in the enterprise. Companies can deploy this modernized system over the Internet or intranet...

  • Page 22
    ... career advancement tracks in the industry. To bring out the best in every employee, CA spends millions annually on training and development programs. They offer virtually continuous rounds of technical workshops and developer seminars worldwide, and generous tuition-reimbursement programs. CA...

  • Page 23
    ... 500. CA employees work on the broadest product portfolio in the industry, which includes systems and network management, 6. 7 . database and applications development, and business applications software. CA is a Fortune 500 company, CA makes more kinds of software for more kinds of computers...

  • Page 24
    ... President State University of New York at Stony Brook Sanjay Kumar President and Chief Operating Officer Computer Associates International, Inc. Charles B. Wang Chairman and Chief Executive Officer Computer Associates International, Inc. Russell M. Artzt Executive Vice President Research and...

  • Page 25
    Financial Review 1998 46 47 48 54 56 57 Report of Management Report of Independent Auditors Management's Discussion and Analysis Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Stockholders' Equity 58 59 Consolidated Statements of Cash Flows Notes to ...

  • Page 26
    ... and Chief Financial Officer Islandia, New York May 19, 1998 CHARLES B. WANG Chairman of the Board and Chief Executive Officer The financial statements of the Company have been audited by Ernst & Young LLP, independent auditors. Their accompanying report is based on an audit conducted in accordance...

  • Page 27
    ... in mainframe product revenue related to the continued demand for less restrictive enterprise licensing pricing options. The client/server business, including CA's ARCserve, Ingres II, and Unicenter, showed strong growth, increasing 44% over fiscal year 1997. Unicenter TNG (The Next Generation...

  • Page 28
    ... base into other markets; the strength of its distribution channels; the ability either internally or through third-party service providers to support client implementation of the Company's products; the Company's ability to manage fixed and variable expense growth relative to revenue growth; and...

  • Page 29
    ... problems associated with Year 2000 compliance. Such problems may negatively affect future operating results. The Company recognizes the significance of the Year 2000 problem as it relates to its internal systems. It has an overall plan and a systematic process in place to make its internal...

  • Page 30
    ...Purchased Software Products, net of accumulated amortization of $1,305 and $1,079 Excess of Cost Over Net Assets Acquired, net of accumulated amortization of $205 and $139 Other Assets Total Assets...capital Retained earnings Equity adjustment Treasury stock, at cost - 84,869,026 shares for 1998 and 87...

  • Page 31
    ...of Common Stock options and other 401(k) discretionary contribution Translation adjustment in 1997 Net change attributable to unrealized loss on marketable securities Purchases of treasury stock Net Income (Loss) Basic Earnings (Loss) Per Share Basic weighted average shares used in computation* 66...

  • Page 32
    ... of cost over net assets acquired is being amortized by the straight-line method over 20 years. Costs of purchased software, acquired rights to market software products, and software development costs (costs incurred after development of a working model or a detailed program design) are capitalized...

  • Page 33
    ... design, development, marketing, and support of a broad range of computer software products for the management of information systems used to manage mainframe, midrange, server, workstation and PC systems deployed throughout a business enterprise. The acquisition was accounted for as a purchase. The...

  • Page 34
    ... was approximately 6%. On February 24, 1998, Quick Access Inc., (a wholly owned subsidiary of the Company) entered into an 85 million pounds sterling (approximately U.S. $142 million) 364-day revolving credit facility to finance the construction of a European headquarters in the United Kingdom. The...

  • Page 35
    ...are outstanding under the 1991 Plan were exercisable. These options are exercisable at $3.33-$47.25 per share. The 1993 Stock Option Plan for Non-Employee Directors (the " 1993 Plan" ) provides for non-statutory options to purchase up to a total of 337,500 shares of Common Stock of the Company to be...

  • Page 36
    ... 2000, and further subject to significant limitations on transfer during the seven years following vesting. If the closing price of the Company's stock on the New York Stock Exchange exceeds $53.33 for 60 trading days within any twelve-month period, all 20.25 million shares under the 1995 Stock Plan...

  • Page 37
    ... located at 1717 Motor Parkway, Islandia, New York, on Wednesday, August 12, 1998 at 10:00 a.m. E.D.T. Investor Relations Computer Associates International, Inc. One Computer Associates Plaza Islandia, NY 11788-7000 General Company information and quarterly earnings can be obtained via the Internet...

  • Page 38
    ... Intl. G.m.B.H. Donska 9 10000 Praha 10 (420) (2) 67 20 63 60 Computer Associates International Ltd. 3008-12 Convention Plaza Office Tower 30th Floor 1 Harbour Road Wanchai (852) 2587 1388 Belgium Computer Associates S.A. - N.V. 34, Boulevard de la Woluwe Woluwedal B-1200 Bruxelles (32) (2) 773...

  • Page 39
    India Computer Associates Pte. Ltd. Liaison Office 511/512 Merchant Chambers 98A Hill Road, Bandra (West) Mumbai 400 050 (91) (22) 643 4681/2 Japan Computer Associates Japan Ltd. Shinjuku Mitsui Building 2-1-1, Nishi-Shinjuku, Shinjuku, Tokyo, 163-0439 Japan (81) (3) 5320 8080 Norway Computer ...

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  • Page 41
    One Computer Associates Plaza Islandia, New York 11788-7000 www.cai.com Printed in the U.S.A. US0698EN Printed on recycled paper containing ten percent post-consumer waste. ©1998 Computer Associates International, Inc., Islandia, NY 11788-7000. All product names referenced herein are trademarks ...