Computer Associates International, Inc. today announced it has reached agreements with the Department of Justice and the Securities and Exchange Commission in connection with CA’s improper recognition of revenue and related reporting practices during the period January 1, 1998 through September 30, 2000, and the actions of former employees to impede the investigation.

“With these agreements, CA has taken a critical step in closing this deeply troubling chapter in its history,” said CA Chairman Lewis Ranieri. “On behalf of the Company and all its employees, we tender our sincere apologies to our shareholders and customers.

“Some former members of CA’s management engaged in illegal activity,” Ranieri said. “Violations of law and ethical standards, including securities fraud, obstructing a government investigation, and lying to CA’s Board of Directors and CA’s lawyers cannot be condoned. We fully support the government’s efforts to bring all responsible parties to justice. In addition, we will do everything in our power to help the government recover unjust enrichments. The Restitution Fund, the numerous changes we have made over the past year, and the changes we will make in the future will help rebuild confidence in our Company.”

Under the terms of the agreements announced today, CA has accepted full responsibility for its conduct during the period, which resulted in the improper accounting practices and subsequent misstatement of revenue, and for impeding and failing to cooperate with the investigation by the Department of Justice and the Securities and Exchange Commission.

In addition, CA has agreed to:

*Establish a Restitution Fund of $225 million to compensate present and former CA shareholders for losses caused by the misconduct of certain former Company executives; 

*Provide active assistance to government investigators — including legal and accounting aid — to obtain disgorgement of compensation from any present or former CA officer or employee who engaged in any improper conduct while employed at CA;

*Take numerous steps to strengthen CA’s corporate governance, management team, and financial reporting and processes. CA will also enhance its compliance and ethics training; and

*Adhere to relevant provisions of securities laws and continue to cooperate with the government.

CA’s agreement with the U.S. Attorney for the Eastern District of New York further states that — in recognition of CA’s remedial actions to date, its acceptance of responsibility for its conduct, and its commitment to executing the terms of the agreement — the U.S. Attorney’s Office will recommend to the U.S. District Court that prosecution of CA be deferred for a period of 18 months following the appointment of an independent examiner or, until the independent examiner’s work is completed, whichever is later. If it is determined after that time period that CA is in material compliance with all of its obligations under the agreement, the U.S. Attorney’s Office will seek dismissal with prejudice of the charges and the agreement will expire.

“These agreements recognize the efforts CA has made over the past year to assist the government’s investigation and to take the necessary remedial actions, including terminating those responsible. We are committed to meeting all the conditions of the agreements, and have already made significant enhancements to our senior management team, corporate governance initiatives and financial reporting processes,” Ranieri said. “We will provide government investigators with all the information available and all the resources necessary to recover any compensation received as the result of improper conduct. The CA Board of Directors fully supports this effort.”

“CA’s Board of Directors, and specifically Walter Schuetze and Lewis Ranieri, worked diligently and expediently to investigate wrongdoing at CA and reach an agreement with the government,” said CA Chief Executive Officer Kenneth Cron. “Our employees around the globe pulled together to persevere through a trying climate, and our customers and investors showed us they believe in the future of CA and the future of management software. Now we can put even more focus on evolving the Company and making the investments and commitments necessary to grow the business.”

CA today is also filing with the Securities and Exchange Commission an amendment to its April 26, 2004 8-K Report, in which CA provided restated financial information for the fiscal years ended March 31, 2000 and 2001. The amendment discloses CA’s plans to provide audited restated financial statements for those fiscal years, and certain additional information related to the restatement. CA will file a further amendment once this information is complete. 

Conference Call

CA will hold a webcast to discuss the agreement at 3 p.m. EDT today. On the call will be Ranieri, Cron and COO Jeff Clarke. Investors and the media can access the webcast at