UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q


              _X_ Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                For the quarterly period ended December 31, 2000
                                       or
              ___ Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
               For the transition period ended from _____ to _____

                          Commission File Number 1-9247

                     Computer Associates International, Inc.
             (Exact name of registrant as specified in its charter)

                     Delaware                      13-2857434
        (State or other jurisdiction of          (I.R.S. Employer
        incorporation or organization)          Identification No.)

                          One Computer Associates Plaza
                            Islandia, New York 11749
               (Address of principal executive offices) (Zip Code)

                                 (631) 342-5224
              (Registrant's telephone number, including area code)

                                 Not applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                         Yes _X_                 No ___

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
Common Stock, as of the latest practicable date:


     Title of Class                                   Shares Outstanding
      Common Stock                                  as of February 5, 2001
 par value $.10 per share                                  576,278,645

COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES INDEX PART I. Financial Information: Page No. Item 1. Consolidated Condensed Balance Sheets - December 31 and March 31, 2000.............................. 1 Consolidated Condensed Statements of Operations - Three Months Ended December 31, 2000 and 1999............... 2 Consolidated Condensed Statements of Operations - Nine Months Ended December 31, 2000 and 1999................ 3 Consolidated Condensed Statements of Cash Flows - Nine Months Ended December 31, 2000 and 1999................ 4 Notes to Consolidated Condensed Financial Statements........ 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................... 9 Item 3. Quantitative and Qualitative Disclosure of Market Risk....... 18 PART II. Other Information: Item 1. Legal Proceedings........................................... 19 Item 6. Exhibits and Reports on Form 8-K............................ 20

Part I. FINANCIAL INFORMATION Item 1: COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (in millions) <TABLE> <CAPTION> December 31, March 31, 2000 2000 ----------- -------- (unaudited) <S> <C> <C> ASSETS: Cash and cash equivalents $ 461 $ 1,307 Marketable securities 86 80 Trade and installment accounts receivable, net 1,772 2,175 Other current assets 138 430 ------ ------ TOTAL CURRENT ASSETS 2,457 3,992 Installment accounts receivable, due after one year,net 3,536 3,812 Property and equipment, net 827 829 Purchased software products, net 2,418 2,598 Goodwill and other intangible assets, net 5,576 6,032 Other assets 232 230 ------ ------ TOTAL ASSETS $15,046 $17,493 ====== ====== LIABILITIES AND STOCKHOLDERS' EQUITY: Loans payable and current portion of long-term debt $ 1,045 $ 919 Other current liabilities 1,422 2,085 Long-term debt 3,675 4,527 Deferred income taxes 2,197 2,365 Deferred maintenance revenue 486 560 Stockholders' equity 6,221 7,037 ------ ------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $15,046 $17,493 ====== ====== <FN> See Notes to Consolidated Condensed Financial Statements </FN> </TABLE>

COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited) (in millions, except per share amounts) <TABLE> <CAPTION> For the Three Months Ended December 31, 2000 1999 ------ ------ <S> <C> <C> Product and other $ 663 $1,548 Professional services 120 126 ------ ------ REVENUE 783 1,674 Costs and expenses: Selling, general and administrative 624 536 Product development and enhancements 172 150 Commissions and royalties 88 89 Depreciation and amortization 279 160 ------ ------ TOTAL OPERATING COSTS 1,163 935 (Loss) income before other expenses (380) 739 Interest expense, net 88 97 ------ ------ (Loss) income before income taxes (468) 642 (Benefit) provision for income taxes (126) 241 ------ ------ NET (LOSS) INCOME $ (342) $ 401 ====== ====== BASIC (LOSS) EARNINGS PER SHARE $ (.59) $ .74 ====== ====== Basic weighted average shares used in computation 577 540 DILUTED (LOSS) EARNINGS PER SHARE $ (.59) $ .72 ====== ====== Diluted weighted average shares used in computation 577* 559 <FN> *Common share equivalents are not included since they would be antidilutive. </FN> <FN> See Notes to Consolidated Condensed Financial Statements. </FN> </TABLE>

COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited) (in millions, except per share amounts) <TABLE> <CAPTION> For the Nine Months Ended December 31, 2000 1999 ------ ------ <S> <C> <C> Product and other $3,050 $3,812 Professional services 415 385 ------ ------ REVENUE 3,465 4,197 Costs and expenses: Selling, general and administrative 1,949 1,362 Product development and enhancements 521 412 Commissions and royalties 238 229 Depreciation and amortization 831 430 Purchased research and development - 646 1995 Stock Plan (184) - ------ ------ TOTAL OPERATING COSTS 3,355 3,079 Income before other expenses 110 1,118 Interest expense, net 265 244 ------ ------ (Loss) income before income taxes (155) 874 Provision for income taxes 26 570 ------ ------ NET (LOSS) INCOME $ (181) $ 304 ====== ====== BASIC (LOSS) EARNINGS PER SHARE $ (.31) $ .56 ====== ====== Basic weighted average shares used in computation 584 538 DILUTED (LOSS) EARNINGS PER SHARE $ (.31) $ .55 ====== ====== Diluted weighted average shares used in computation 584* 555 <FN> * Common share equivalents are not included since they would be antidilutive. </FN> <FN> See Notes to Consolidated Condensed Financial Statements. </FN> </TABLE>

COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited) (in millions) <TABLE> <CAPTION> For the Nine Months Ended December 31, 2000 1999 ----- ----- <S> <C> <C> OPERATING ACTIVITIES: Net (loss) income $(181) $ 304 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 831 430 Provision for deferred income taxes 117 76 Charge for purchased research and development - 646 Compensation (gain) expense related to stock and pension plans (146) 28 Decrease (increase) in noncurrent installment accounts receivable, net 221 (909) (Decrease) increase in deferred maintenance revenue (66) 5 Changes in other operating assets and liabilities, excluding effects of acquisitions (42) 254 ----- ----- NET CASH PROVIDED BY OPERATING ACTIVITIES 734 834 INVESTING ACTIVITIES: Acquisitions, primarily purchased software, marking rights and intangibles, net of cash acquired (178) (3,647) Settlement of purchase accounting liabilities (351) (492) Dispositions of businesses 158 - Purchases of property and equipment, net (86) (119) (Purchases) sales of marketable securities, net (7) 127 Capitalized development costs (36) (25) ----- ----- NET CASH USED IN INVESTING ACTIVITIES (500) (4,156) FINANCING ACTIVITIES: Debt (repayments) borrowings, net (688) 3,163 Dividends paid (24) (21) Exercise of common stock options 45 81 Purchases of treasury stock (406) - ----- ----- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (1,073) 3,223 DECREASE IN CASH AND CASH EQUIVALENTS BEFORE EFFECT OF EXCHANGE RATE CHANGES ON CASH (839) (99) Effect of exchange rate changes on cash (7) (6) ----- ----- DECREASE IN CASH AND CASH EQUIVALENTS (846) (105) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,307 399 ----- ----- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 461 $ 294 ===== ===== <FN> See notes to Consolidated Financial Statements. </FN> </TABLE>

COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS DECEMBER 31, 2000 (unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the nine months ended December 31, 2000 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2001. For further information, refer to the consolidated financial statements and footnotes thereto included in Computer Associates International, Inc.'s (the "Registrant" or the "Company") Annual Report on Form 10-K for the fiscal year ended March 31, 2000. Cash Dividends: In December 2000, the Company's Board of Directors declared its regular, semi-annual cash dividend of $.04 per share. The dividend was paid on January 10, 2001 to stockholders of record on December 22, 2000. Statements of Cash Flows: For the nine months ended December 31, 2000 and 1999, interest payments were $292 million and $243 million respectively, and income taxes paid were $201 million and $246 million, respectively. Reclassifications: Certain prior balances have been reclassified to conform with the current period presentation. Comprehensive (Loss) Income: Comprehensive (loss) income includes foreign currency translation adjustments and unrealized gains and losses on the Company's available-for-sale securities. The components of comprehensive (loss) income , net of related tax, for the three month and nine month periods ended December 31, 2000 and 1999 are as follows: <TABLE> <CAPTION> (in millions) For the Three Months For the Nine Months Ended December 31, Ended December 31, -------------------- ------------------- 2000 1999 2000 1999 ------ ---- ------ ---- <S> <C> <C> <C> <C> Net (loss) income $(342) $401 $(181) $304 Foreign currency translation adjustment 33 (44) (51) (42) Reclassification adjustment included in net income - - - (9) ------ ---- ------ ---- Total comprehensive (loss) income $(309) $357 $(232) $253 ====== ==== ====== ==== </TABLE>

COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS DECEMBER 31, 2000 (unaudited) Net Earnings (Loss) Per Share: Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed using the weighted-average number of common and common share equivalents outstanding during the period. Common share equivalents consist of shares issuable upon the exercise of stock options (using the treasury stock method). <TABLE> <CAPTION> (in millions, except per share amounts) For the Three Months For the Nine Months Ended December 31, Ended December 31, -------------------- -------------------- 2000 1999 2000 1999 ------ ------ ------ ------ <S> <C> <C> <C> <C> Net (Loss) Income $(342) $ 401 $(181) $ 304 ====== ===== ====== ===== Diluted (Loss) Earnings Per Share ----------------------------------- Weighted average shares outstanding and common share equivalents 577* 559 584* 555 Diluted (Loss) Earnings Per Share $(.59) $ .72 $(.31) $ .55 ====== ===== ====== ===== Diluted Share Computation: Average common shares outstanding 577 540 584 538 Average common share equivalents - 19 - 17 ------ ----- ------ ----- Weighted average shares outstanding and common share equivalents 577* 559 584* 555 ====== ===== ====== ===== <FN> * Common share equivalents are not included since they would be antidilutive. If the three and nine month periods ended December 31, 2000 had resulted in net income, the weighted average shares outstanding and common share equivalents would have been 584 and 594 million for each period, respectively. Certain of the Company's stock options were excluded from the calculation of diluted earnings per share because they were antidulutive, but these options could be dilutive in the future </FN> </TABLE> Software Revenue Recognition: In October 1997, the Accounting Standards Executive Committee ("AcSEC") issued Statement of Position ("SOP") 97-2 "Software Revenue Recognition," as amended in 1998 by SOP 98-4 and further amended more recently by SOP 98-9, which is effective for transactions entered into in fiscal years beginning after March 15, 1999. These SOPs provide guidance on applying generally accepted accounting principles in recognizing revenue for software transactions, requiring deferral of part or all of the revenue related to a specific contract depending on the existence of vendor-specific objective evidence and the ability to allocate the total contract value to all elements within the contract. Effective for the quarter ended June 30, 1999, the Company implemented the guidelines of these SOPs. In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No. 101. This SAB provides further guidance on revenue recognition and is effective for the Company beginning in the fourth quarter of fiscal 2001. Management has evaluated the SAB to ensure that the Company is in compliance. Based on the current interpretations, there should not be a material impact on the Company's consolidated results of operations and financial position. As a result of a change in the business model effective for the quarter ended December 31, 2000, as further discussed in the MD&A and Form 8-K filed on October 25, 2000, the Company now recognizes revenue on software transactions conforming to such business model ratably over the contract term.

COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS DECEMBER 31, 2000 (unaudited) Segment Disclosure: The Company is principally engaged in the design, development, marketing, licensing, and support of integrated computer software products operating on a diverse range of hardware platforms and operating systems. Accordingly, the Company considers itself to be operating in a single industry segment. The Company's chief operating decision maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue, by geographic region, for purposes of assessing financial performance and making operating decisions. NOTE B - ACQUISITIONS On March 31, 2000, the Company acquired Sterling Software, Inc. ("Sterling") and merged one of its wholly owned subsidiaries into Sterling, at which time Sterling became a wholly owned subsidiary of the Company. The shareholders of Sterling received 0.5634 shares of the Company's common stock for each share of Sterling common stock. The Company issued approximately 46.8 million shares of common stock with an approximate fair value of $3.3 billion. Sterling was a developer and provider of systems management, business intelligence, and application development software products and services, as well as a supplier of specialized information technology services for sectors of the federal government. On May 28, 1999, the Company acquired the common stock and the options to acquire the common stock of PLATINUM technology International, inc. ("PLATINUM") in a cash transaction of approximately $3.6 billion, which was paid from drawings under the Company's $4.5 billion credit agreements. PLATINUM was engaged in providing software products in the areas of database management, eCommerce, application infrastructure management, decision support, data warehousing, and knowledge management, as well as year 2000 reengineering and other consulting services. The following table reflects unaudited pro forma combined results of the operations of the Company, Sterling, and PLATINUM on the basis that the acquisitions had taken place at the beginning of fiscal year 2000: <TABLE> <CAPTION> (in millions, except per share amounts) For the Three Months For the Nine Months Ended Dec. 31, 1999 Ended Dec. 31, 1999 -------------------- -------------------- <S> <C> <C> Revenue $1,881 $4,953 Net income (loss) 364 (1) Basic earnings (loss) per share $ 0.62 $ 0.00 Shares used in computation 587 585 Diluted earnings (loss) per share $ 0.60 $ 0.00 Shares used in computation 606 585 * <FN> *common share equivalents are not included since their effect would be antidilutive. </FN> </TABLE> In management's opinion, the pro forma combined results of operations are not indicative of the actual results that would have occurred had the acquisition been consummated at the beginning of fiscal year 2000 or of future operations of the combined entities under the ownership and operation of the Company.

COMPUTER ASSOCIATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS DECEMBER 31, 2000 (unaudited) At March 31, 2000, the Company estimated future liabilities in connection with acquisitions to be $768 million. These included compensation-related liabilities ($392 million) and other acquisition-related expenditures including duplicate facilities ($376 million). For the nine months ended December 31, 2000, reductions totaling $351 million were made against these reserves, including compensation related payments of $301 million and $50 million relating to duplicate facility and other settlements. The remaining balance is included in the "Other current liabilities" line item on the accompanying Consolidated Condensed Balance Sheet. The Company acquired several other consulting businesses and product technologies in addition to the ones described above, which, either individually or collectively, are not material to the financial statements taken as a whole. The excess of cost over net assets acquired is being amortized on a straight-line basis over the expected period to be benefited. The Consolidated Condensed Statements of Operations reflect the results of operations of the companies since the effective dates of the purchases.

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Statements in this Form 10-Q concerning the Company's future prospects are "forward looking statements" under the federal securities laws. There can be no assurances that future results will be achieved and actual results could differ materially from forecasts and estimates. Important factors that could cause actual results to differ materially are discussed below in Item 2, "Results of Operations." RESULTS OF OPERATIONS Revenue: For the three months ended December 31, 2000: Revenue for the quarter ended December 31, 2000 decreased 53%, or $891 million, from the prior year's comparable quarter. The decrease was a result of the company's transition to a new business model during the third quarter of fiscal 2001 whereby clients are granted flexible contractual terms and conditions with the result that product revenue from such contracts is recognized prospectively over the term of the contracts. The new model allows customers to vary their software mix as their business needs change and provides them with the freedom to use a variety of software products during the licensed period. The terms of these new arrangements are structured such that product revenue is generally recognized ratably over the term of the license. Customers will benefit from these new arrangements by finding more flexibility in licensing the Company's software products, gaining an improved, cost-effective way of doing business, mapping the growth of their technology to the growth of their business, and allowing their costs to be more predictable. The new business model will improve the visibility of the Company's revenue stream and will reduce the uncertainty of quarterly revenue since revenue will be recognized ratably, rather than on a one-time basis. In the first quarter of the transition, approximately $140 million in revenue was recognized at contract signing for contracts conforming to the Company's prior business model. <TABLE> <CAPTION> (in millions) Product/ Professional Quarter Ended Other Services ------------- ----------- ------------ <S> <C> <C> December 31, 2000 $ 663 $120 December 31, 1999 1,548 126 </TABLE> North American revenue for the third quarter decreased 57%, or $666 million, over the prior year's third quarter, a result of the Company's transition to the new business model. North American revenue represented 63% and 69% of revenue for the December 2000 and December 1999 quarters, respectively. <TABLE> <CAPTION> (in millions) North Quarter Ended America International ------------- ----------- ------------- <S> <C> <C> December 31, 2000 $ 493 $290 December 31, 1999 1,159 515 </TABLE> Price changes did not have a material impact in this quarter or the prior year's comparable quarter.

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the nine months ended December 31, 2000: Revenue on a year to date basis decreased 17%, or $732 million, from the corresponding period a year ago. This decrease was attributable primarily to the Company's transition to the new business model and softening demand experienced from clients who did not commit to software license purchases due to their concerns over the pending release of the next generation of mainframe computers. <TABLE> <CAPTION> (in millions) Product/ Professional Nine Months Ended Other Services ----------------- ----------- ------------ <S> <C> <C> December 31, 2000 $3,050 $415 December 31, 1999 3,812 385 </TABLE> North American revenue for the nine months ended December 31, 2000 decreased 17%, or 487 million, from the prior year's comparable period. On a year to date basis, North American revenue represented 68% of total revenue for both fiscal years 2001 and 2000. On a year to date basis, international revenue decreased by $245 million, or 18%, over the prior year. This decrease was primarily a result of the Company's transition to the new business model, the effect of exchange rates on the US dollar versus foreign currencies, and weaker year over year European performance, partially offset by improved performance in Asia. <TABLE> <CAPTION> (in millions) North Nine Months Ended America International ----------------- ----------- ------------- <S> <C> <C> December 31, 2000 $2,359 $1,106 December 31, 1999 2,846 1,351 </TABLE> Price changes did not have a material impact year to date in fiscal year 2001 or in the comparable period in fiscal year 2000. Costs and Expenses For the three months ended December 31, 2000: Selling, general and administrative expenses for the third quarter increased $88 million, or 16%. The increase was largely attributable to the Company's higher fixed expense structure, principally the result of added costs from the acquisition of Sterling, as well as greater spending on marketing associated with a new advertising campaign. Net product development and enhancement expenditures increased $22 million, or 15%, for the third quarter compared to last year's third quarter. There was continued emphasis on adapting and enhancing products for the distributed processing environment, in particular Unicenter TNG (The Next Generation), Jasmine ii, Neugents, as well as broadening of the Company's e-commerce product offerings, and additional expense related to development efforts of products obtained through the acquisition of Sterling. Commission and royalties remained consistent, in terms of dollars, when compared with last year's third quarter. Depreciation and amortization expense in the third quarter increased $119 million from the comparable quarter in the prior year. The increase was due primarily to the additional amortization of purchased intangibles associated with the acquisition of Sterling,

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS marginally offset by the scheduled reductions in the amortization associated with past acquisitions. Net interest expense decreased $9 million, or 9%, for the third quarter compared to last year's third quarter. The reduction in interest expense was related to a decrease in average debt outstanding, partially offset by an increase in the average interest rate. For the nine months ended December 31, 2000: On a year to date basis, selling, general and administrative expenses increased $587 million, or 43%. The increase was a result of a greater fixed expense structure, principally the result of added personnel costs from the acquisitions of PLATINUM (two additional months of expense in the current fiscal year) and Sterling, as well as an increase in marketing expenditures associated with the rollout of the new marketing campaign. Net product development and enhancement expenditures increased $109 million, or 26%, over the prior year. Continued emphasis on adapting and enhancing products for the distributed processing environment, as well as broadening of the Company's e-commerce product offerings and development of technology and products obtained through the acquisitions of PLATINUM and Sterling were largely responsible for the increase. Commissions and royalties increased $9 million, or 4%, and represent a greater percentage of reported revenue for the nine months ended December 31, 2000 as compared with the prior year. On a year to date basis, depreciation and amortization expense increased by $401 million from the prior year. The increase was due primarily to the additional amortization of purchased intangibles associated with the acquisition of PLATINUM and Sterling, marginally offset by the scheduled reductions in the amortization associated with prior acquisitions. Net interest expense increased $21 million, or 9%, from last year's comparable period as a result of an increase in average debt outstanding associated with the acquisition of PLATINUM in the first quarter of fiscal year 2000 and a marginal increase in the average interest rate. Operating Margins For the third quarter of fiscal 2001, the pretax loss was $468 million as compared with the pretax income of $642 million in the prior year's comprable quarter. On a year to date basis, the pretax loss was $155 million, including a $184 million gain arising from the settlement of the derivative litigation associated with stock awards pursuant to the Company's 1995 Key Employee Stock Ownership Plan, partially offset by a $31 million write-off associated with the bankruptcy of Inacom Corp., compared with the pretax income of $874 million in the same period a year ago, inclusive of special items of $646 million for in-process research and development relating to the acquisition of PLATINUM and $37 million related to an asset write-down in the investment of CHS Electronics. The net loss in the December 2000 quarter was $342 million as compared with the net income in the December 1999 quarter of $401 million. The year to date net loss of $260 million, excluding special items, as compared with the prior year's net income of $973 million, excluding special items, was primarily related to a reduction in revenue from the Company's transition to the new business model in the quarter ended December 2000, as well as to a higher fixed cost structure as a result of acquisitions. PRO FORMA PRO RATA RESULTS OF OPERATIONS To enhance comparability of financial results, the discussion of financial results is supplemented with separate pro forma pro rata financial information presented below in order to give effect to the purchase of PLATINUM and Sterling as if they had occurred on April 1, 1998 and as if the Company, PLATINUM, and Sterling were under the new business model since their inception. While these results may not be indicative of operations

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS had these acquisitions actually occurred on that date and had the Company historically been operating under the new business model, they provide a more meaningful basis for comparison. Revenue: For the three months ended December 31, 2000: Pro forma pro rata revenue increased 5%, or $72 million, from $1.332 billion for the quarter ended December 31, 1999 to $1.404 billion for the quarter ended December 31, 2000. Product and other revenue increased 13%, or $144 million, over last year's comparable quarter. The increase was attributable primarily to the ratable recognition of revenue on contracts entered into during the prior twelve month period that previously were deferred as residual value. Pro forma pro rata revenue benefited from a 29% increase in distributed platform product fees and a marginal increase in OS/390 product revenue. The distributed platform revenue accounted for approximately 42% of the Company's pro forma pro rata revenue for the third quarter, led by Unicenter TNG , a family of integrated business solutions for monitoring and administering systems management across multi-platform environments. Professional services revenue from consulting and education programs decreased 38%, or $72 million, which was primarily the result of the previously announced divestiture of Sterling's Federal Systems Group, a provider of professional services to governmental agencies, during October 2000 and curtailed services associated with non-CA products. The Company plans on furthering its focus on services in support of its product business, which may result in further declines in services revenue. <TABLE> <CAPTION> (in millions) Product/ Professional Quarter Ended Other Services ------------- ----------- ------------ <S> <C> <C> December 31, 2000 $1,284 $120 December 31, 1999 1,140 192 </TABLE> North American pro forma pro rata revenue for the third quarter grew 14%, or $111 million, over the prior year's third quarter. This resulted from continued growth in distributed platform sales. North American pro forma pro rata revenue represented 63% and 59% of revenue for the December 2000 and December 1999 quarters, respectively. <TABLE> <CAPTION> (in millions) North Quarter Ended America International ------------- ----------- ------------- <S> <C> <C> December 31, 2000 $891 $513 December 31, 1999 780 552 </TABLE> Price changes did not have a material impact in this quarter or the prior year's comparable quarter.

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the nine months ended December 31, 2000: Pro forma pro rata revenue on a year to date basis increased 7%, or $259 million, from the corresponding period a year ago. Consistent with the current quarter, the increase was attributable to the ratable recognition of revenue on contracts transacted during the prior twelve month period, partially offset by a reduction in professional services revenue, which was primarily the result of the divestiture of Sterling's professional services provider to governmental agencies, the Federal Systems Group, and the Company's decision to reduce services associated with non-CA products. <TABLE> <CAPTION> (in millions) Product/ Professional Nine Months Ended Other Services ----------------- ----------- ------------ <S> <C> <C> December 31, 2000 $3,710 $415 December 31, 1999 3,283 583 </TABLE> North American pro forma pro rata revenue for the nine months ended December 31, 2000 grew 16%, or $356 million, over the prior year's comparable period. On a year to date basis, North American pro forma pro rata revenue represented 64% and 59% of total revenue for fiscal years 2001 and 2000, respectively. On a year to date basis, international pro forma pro rata revenue decreased by $97 million, or 6%, over the prior year. This decrease was primarily a result of the effect of exchange rates on the US dollar versus foreign currencies and weaker European performance, partially offset by improved performance in Asia. <TABLE> <CAPTION> (in millions) North Nine Months Ended America International ----------------- ----------- ------------- <S> <C> <C> December 31, 2000 $2,623 $1,502 December 31, 1999 2,267 1,599 </TABLE> Price changes did not have a material impact year to date in fiscal year 2001 or in the comparable period in fiscal year 2000. Operating Margins For the third quarter of fiscal 2001, pro forma pro rata net income excluding acquisition amortization and special items was $247 million, an increase of $54 million or 28% over the comparable quarter a year ago. On a year to date basis, pro forma pro rata net income, excluding acquisition amortization and special items, was $677 million compared with $580 million for the nine months ended December 1999, an increase of $97 million, or 17%. The increase was largely attributable to efficiencies obtained by eliminating redundant headcount and overhead expenses as a result of the PLATINUM and Sterling integrations. Excluding acquisition amortization, the Company's effective tax rate was 37.5% for the quarter and year to date periods ended December 2000 and 1999.

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RISKS AND UNCERTAINTIES The Company's products are designed to improve the productivity and efficiency of clients' information processing resources. However, a general or regional slowdown in the national or world economy could adversely affect the Company's operations. Additionally, further deterioration of the exchange rate of foreign currencies against the US dollar may continue to affect adversely the Company's ability to increase its revenue within those markets. As the Company grows, it is dependent upon large dollar enterprise transactions with individual clients. There can be no assurances that transactions of this nature will occur in subsequent periods. The Company has introduced a new business model which should provide greater flexibility to clients as well as improved visibility into future operating performance of the Company. With the change in the business model, the Company has implemented and will continue to implement new business practices. The introduction of these new business practices will negatively affect the financial performance of the Company in the near term. In addition, there are risks associated with the transition to the new model. Included among these risks are that the transition may take longer than originally planned, that circumstances may occur that affect adversely the ability to conduct the transition smoothly, and that unforeseen events may occur that will negatively affect future performance. Introduction of the new business model will result in substantially lower revenue achievement for the year ending March 31, 2001, as well as a reported loss for the same period. Since revenue primarily will be recognized ratably over future periods and costs are expensed as incurred, it is not anticipated that the Company will report a profit from operations (excluding acquisition amortization) until the second half of fiscal year 2003. The Company's future operating results may also be affected by a number of other factors, including but not limited to: a significant percentage of the Company's quarterly sales consummated in the last few days of the quarter making financial predictions especially difficult and raising a substantial risk of variance in actual results; changes in industry accounting guidance; the risks associated with changes in the company's business model; the risks associated with changes in the way in which the company accounts for license revenue; the difficulties of compiling pro forma financial information, given acquisitions over time; instability resulting from changes to the company's business model; the emergence of new competitive initiatives resulting from rapid technological advances or changes in pricing in the market; the risks associated with new product introductions as well as the uncertainty of customer acceptance of these new or enhanced products from either the Company or its competition; risks associated with the entry into new markets such as professional services; the risks associated with integrating newly acquired businesses and technologies; increasing dependency on large dollar licensing transactions; delays in product delivery; reliance on mainframe capacity growth; the ability to recruit and retain qualified personnel; business conditions in the distributed systems and mainframe software and hardware markets; uncertainty and volatility associated with Internet and eBusiness related activities; use of software patent rights to attempt to limit competition; fluctuations in foreign currency exchange rates and interest rates; the volatility of the international marketplace; uncertainties relative to global economic conditions; and other risks described in filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS IN-PROCESS RESEARCH AND DEVELOPMENT In the fourth quarter of fiscal year 2000, the Company acquired Sterling in a stock-for-stock exchange valued at approximately $4.1 billion. In the first quarter of fiscal year 2000, the Company acquired PLATINUM for approximately $4.3 billion in cash and assumed liabilities. Acquired in-process research and development ("IPR&D") charges relate to acquisitions of software companies accounted for under the purchase method, in which a portion of the purchase price is allocated to acquired in-process technology and is expensed immediately since the technological feasibility of the research and development projects has not yet been achieved and is believed to have no alternative future use. Independent valuations of Sterling and PLATINUM were performed and used as an aid in determining the fair value of the identifiable intangible assets and in allocating the purchase price among the acquired assets, including the portion of the purchase price attributed to IPR&D, which was $150 million and $646 million for Sterling and PLATINUM, respectively. Assets were identified through on-site interviews with management and a review of data provided by the Company and discussions with the acquired companies' management concerning the acquired assets, technologies in development, costs necessary to complete the IPR&D, historical financial performance, estimates of future performance, market potential, and the assumptions underlying these estimates. The "Income Approach" was utilized for the valuation analysis of IPR&D for both Sterling and PLATINUM. This approach focuses on the income-producing capability of the asset, which was determined through review of data provided by both the acquired companies and independent sources and through analysis of relevant market sizes, growth factors, and expected trends in technology. The steps followed in applying this approach included estimating the costs to develop the purchased in-process technology into commercially viable products, estimating the resulting net cash flows from such projects, and discounting the net cash flows back to their present value using a rate of return commensurate with the relative risk levels. The ongoing development projects at Sterling at the time of the purchase were comprised primarily of application development and information management, business intelligence, network management, and storage management tools and solutions. The acquired projects included add-on features, tools and next-generation versions of COOL, VISION, EUREKA, SAMS,TM and SOLVE(R) product families. At the time of acquisition, it was estimated that, on average, 68% of the development effort had been completed and the remaining development effort would take approximately 14 months to complete, with a cost of approximately $9 million. The ongoing development projects at PLATINUM at the time of the purchase were comprised primarily of application development, database and enterprise management tools, and data warehousing solutions. The acquired projects included add-on features, tools and next generation versions of DB2 Solutions,TM ProVision,TM Security, AdvantageTM application development, end-to-end data warehousing, and Internet infrastructure product families. At the time of acquisition, it was estimated that, on average, 68% of the development effort had been completed and the remaining development effort would take approximately 12 months to complete, with a cost of approximately $41 million. The resulting net cash flows from Sterling and PLATINUM projects were based on management's estimates of product revenues, cost of goods sold, operating expenses, R&D costs, and income taxes from such projects. The revenue projections used to value the IPR&D were based on estimates of relevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by the Company and its competitors. The rate used in discounting the net cash flows from the IPR&D approximated

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 20%for both Sterling and PLATINUM. These discount rates, higher than that of the Company's cost of capital, are due to the uncertainties surrounding the successful development of IPR&D. The efforts required to develop the in-process technology of the acquired companies into commercially viable products principally relate to the completion of planning, designing, prototyping, and testing functions that are necessary to establish that the software produced will meet its design specifications, including technical performance, features, and functional requirements. The Company has reviewed its projections of revenue and estimated costs of completion and has compared these projections with results through December 31, 2000. To date, in the aggregate, the projections have not varied materially from original forecasts. If these projects do not continue to be successfully developed, the revenue and profitability of the Company may be adversely affected in future periods. Additionally, the value of other intangible assets acquired may become impaired. Results will also be subject to uncertain market events and risks that are beyond the Company's control, such as trends in technology, government regulations, market size and growth, and product introduction by competitors. Management believes that the assumptions used in the purchased IPR&D valuation reasonably estimate the future benefits. There can be no assurances that in future periods actual results will not deviate from current estimates. LIQUIDITY AND CAPITAL RESOURCES Cash, cash equivalents and marketable securities totaled $547 million at December 31, 2000, an increase of $93 million from the September 30, 2000 balance of $454 million. Cash on hand in September, cash generated from operations during the quarter and $150 million received from the divestiture of Sterling's Federal Systems Group, was used largely to fund $278 million of debt repayments, stock repurchases of $161 million, and to a lesser extent various acquisition-related activities. Cash generated from operations for the quarter was $462 million, an increase of $300 million over the $162 million generated in the prior year's comparable quarter. Cash generated from operations was positively impacted by the collection of accounts receivable balances and a reduction in the payment of taxes paid during the current quarter as compared with last year, partially offset by a higher expense structure, principally the result of the Sterling acquisition. The Company's bank credit facilities consist of a $1.3 billion 364-day revolving credit facility, a $1 billion four-year revolving credit facility, a $2 billion four-year term loan, and a 75 million pound-sterling denominated 364-day term loan. At December 31, 2000, $2.140 billion remained outstanding under the four-year revolving credit and term loan agreements and approximately US $124 million was outstanding under the pound-sterling term loan at various interest rates. These rates are determined based on a ratings grid, which applies a margin to the prevailing London InterBank Offered Rate ("LIBOR"). In addition, the Company established a $1 billion US Commercial Paper ("CP") program in the first quarter of this fiscal year to refinance some of its debt at more attractive interest levels. At December 31, 2000, $430 million was outstanding under the CP program. In January 2001, the Company renegotiated the debt covenants on its bank lines of credit to better reflect operations under the Company's new business model. The change in the underlying metrics of the covenants is not expected to materially change the Company's borrowing capacity. The Company also utilizes other financial markets in order to maintain its broad sources of liquidity. In fiscal 1999, $1.75 billion of unsecured Senior Notes were issued in a transaction governed by Rule 144A of the Securities Act of 1933. Amounts borrowed, rates and maturities for each issue were $575 million at 6 1/4%

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS due April 15, 2003, $825 million at 6 3/8% due April 15, 2005 and $350 million at 6 1/2% due April 15, 2008. At December 31, 2000, $192 million was outstanding under the Company's 6.77% Senior Notes. These Notes call for annual repayment of $64 million each April until final maturity in 2003. Unsecured and uncommitted multicurrency lines of credit are available to meet any short-term working capital needs for subsidiaries operating outside the US. These lines total US $56 million, of which $20 million was drawn at December 31, 2000. Debt ratings for the Company's senior unsecured notes and its bank credit facilities are BBB+ and Baa1 from Standard & Poor's and Moody's Investor Services, respectively. The Company's Commercial Paper program is rated A-2 from Standard & Poor's and P-2 from Moody's. At December 31, 2000, the cumulative number of shares purchased under the Company's various open market Common Stock repurchase programs, including over 14 million shares purchased in the current fiscal year, was 165 million. The remaining number of shares authorized for repurchase is approximately 35 million. In addition to expansion efforts at its US headquarters in Islandia, NY, capital resource requirements at December 31, 2000 consisted of lease obligations for office space, computer equipment, mortgage or loan obligations and amounts due as a result of product and company acquisitions. It is expected that existing cash, cash equivalents, marketable securities, the availability of borrowings under credit lines and cash provided from operations will be sufficient to meet ongoing cash requirements. The Company expects its long-standing history of providing extended payment terms to customers to continue under the new business model.

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK The Company's exposure to market rate risk for changes in interest rates relates primarily to the Company's investment portfolio, debt, and installment accounts receivable. The Company has a prescribed methodology whereby it invests its excess cash in debt instruments of government agencies and high quality corporate issuers (Standard & Poor's single "A" rating and higher). To mitigate risk, many of the securities have a maturity date within one year, and holdings of any one issuer excluding the US Government do not exceed 10% of the portfolio. Periodically, the portfolio is reviewed and adjusted if the credit rating of a security held has deteriorated. The Company does not utilize derivative financial instruments. The Company maintains a blend of both fixed and floating rate debt instruments. At December 31, 2000, the Company's outstanding debt approximated $4.7 billion, with approximately $2.0 billion in fixed rate obligations. If market rates were to decline, the Company could be required to make payments on the fixed rate debt that would exceed those based on current market rates. Each 25 basis point decrease in interest rates would have an associated annual opportunity cost of approximately $5 million. Each 25 basis point increase or decrease in interest rates would have an approximately $6.75 million annual effect on variable rate debt interest based on the balances of such debt at December 31, 2000. The Company offers financing arrangements with installment payment terms in connection with its software solution sales. The aggregate contract value includes an imputed interest element, which can vary with the interest rate environment. Each 25 basis point increase in interest rates would have an associated annual opportunity cost of approximately $15 million. There have been no material changes in the Company's worldwide foreign exchange risk management strategy or investment methodology regarding marketable equity securities, and as such, the descriptions under the captions "Foreign Currency Exchange Risk" and "Equity Price Risk" remain unchanged from those included in the Company's Form 10-K for the year ended March 31, 2000.

PART II. OTHER INFORMATION Item 1: Legal Proceedings The Company and certain of its officers are defendants in a number of shareholder class action lawsuits alleging that a class consisting of all persons who purchased the Company's stock during the period January 20, 1998 until July 22, 1998 were harmed by misleading statements, representations, and omissions regarding the Company's future financial performance. These cases have been consolidated into a single action (the "Shareholder Action") in the United States District Court for the Eastern District of New York ("NY Federal Court"). The NY Federal Court has denied the defendants' motion to dismiss the Shareholder Action, and the parties currently are engaged in discovery. Although the ultimate outcome and liability, if any, cannot be determined, management, after consultation and review with counsel, believes that the facts in the Shareholder Action do not support the plaintiffs' claims and that the Company and its officers and directors have meritorious defenses. In addition, three derivative actions alleging misleading statements and omissions similar to those alleged in the Shareholder Action were brought in the NY Federal Court on behalf of the Company against a majority of the Company's directors. An additional derivative action on behalf of the Company, alleging that the Company issued 14.25 million more shares than were authorized under the 1995 Key Employee Stock Ownership Plan (the "1995 Plan"), also was filed in the NY Federal Court. These derivative actions have been consolidated into a single action (the "Derivative Action") in the NY Federal Court. The Derivative Action has been stayed. Lastly, a derivative action on behalf of the Company was filed in the Chancery Court in Delaware (the "Delaware Action") alleging that 9.5 million more shares were issued to the three 1995 Plan participants than were authorized under the 1995 Plan. The Company and its directors who are parties to the Derivative Action and the Delaware Action have announced that an agreement has been reached to settle the Delaware Action and the Derivative Action. Under the terms of the proposed settlement, which is subject to dismissal of related claims by the NY Federal Court, the 1995 Plan participants returned 4.5 million shares of Computer Associates stock to the Company. The Chancery Court in Delaware has approved the settlement and the parties are awaiting dismissal by the NY Federal Court. The Company, various subsidiaries, and certain current and former officers have been named as defendants in other various claims and lawsuits arising in the normal course of business. The Company believes that the facts do not support the plaintiffs' claims and intends to vigorously contest each of them.

Item 6: Exhibits and Reports on Form 8-K (a) Exhibits. 99(i) First Amendment to the Amended and Restated Credit Agreement dated May 24, 2000 99(ii) First Amendment to the Amended and Restated Credit Agreement dated May 26, 1999 (b) Reports on Form 8-K: The Registrant filed a Report on Form 8-K dated October 4, 2000 reporting an event under Item 5 and 7. The Registrant filed a Report on Form 8-K dated October 25, 2000 reporting an event under Item 5 and 7. The Registrant filed a Report on Form 8-K dated November 6, 2000 reporting an event under Item 5 and 7. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COMPUTER ASSOCIATES INTERNATIONAL, INC. Dated: February 6, 2001 By: /s/Sanjay Kumar ------------------------ Sanjay Kumar, President and Chief Executive Officer Dated: February 6, 2001 By: /s/Ira Zar ------------------------ Ira Zar, Executive Vice President and Principal Financial and Accounting Officer


                                 FIRST AMENDMENT

     FIRST AMENDMENT,  dated as of January 18, 2001 (this  "Amendment"),  to the
$1,300,000,000  Amended and Restated Credit Agreement,  dated as of May 24, 2000
(as amended,  supplemented or otherwise  modified from time to time, the "Credit
Agreement"), among Computer Associates International, Inc. (the "Borrower"), the
banks, agents and other financial institutions from time to time parties thereto
(the "Banks") and Credit Suisse First Boston, as  administrative  agent (in such
capacity, the "Administrative Agent") for the Banks.

                              W I T N E S S E T H :

     WHEREAS,  the Borrower,  the Banks and the Administrative Agent are parties
to the Credit Agreement;

     WHEREAS,  the Borrower has requested that the Administrative  Agent and the
Banks agree to amend certain  provisions of the Credit Agreement,  as more fully
described herein; and

     WHEREAS,  the Administrative  Agent and the Banks are willing to amend such
provisions of the Credit  Agreement,  but only upon the terms and subject to the
conditions set forth herein;

     NOW THEREFORE,  in  consideration  of the premises  contained  herein,  the
parties hereto agree as follows:

     1.   Defined Terms.  Unless  otherwise  defined herein,  capitalized  terms
          which are used herein shall have the meanings  assigned thereto in the
          Credit Agreement.

     2.   Amendment  to  Section  1.1.  Section  1.1 is  hereby  amended  by (a)
          deleting the definitions of "Consolidated  EBITDA" and "Test Ratio" in
          their  entireties,  and substituting in lieu thereof the following new
          definitions respectively:

          "Consolidated  Cash Flow"  means,  for any period,  the sum of (a) the
     amount  set forth as "Net Cash  Provided  by  Operating  Activities"  (or a
     comparable  term)  in the  consolidated  statements  of cash  flows  of the
     Borrower  and its  consolidated  Subsidiaries  for  such  period  plus  (b)
     Consolidated Interest Expense for such period.

          "Test Percentage" means, for any period, the percentage (determined by
     reference to the consolidated  financial statements of the Borrower and its
     Subsidiaries  most  recently  required to be delivered  pursuant to Section
     10.1(h)(i)  or (ii),  as the case may be) which (a) the  Consolidated  Cash
     Flow of the Borrower and its  Subsidiaries  for such period  constitutes of
     (b) the total Debt of Borrower and its Subsidiaries on a consolidated basis
     on the last day for such period.

and (b) adding the following  phrase in the  definition of "GAAP"  following the
term "March 31, 2000" appearing in the first parenthetical thereof:

"as modified in the manner described in the press release issued by the Borrower on October 25, 2000" 3. Amendment to Section 10.2. Section 10.2 is hereby amended by deleting subsections (f) and (g) therefrom, and substituting in lieu thereof the following new subsections (f) and (g): "(f) Interest Coverage. Permit the ratio of (i) Consolidated Cash Flow of the Borrower and its Subsidiaries for any period of four consecutive fiscal quarters to (ii) Consolidated Interest Expense of the Borrower and its Subsidiaries for such period, to be less than 2.10 to 1. (g) Leverage. Permit the Test Percentage for any period of four consecutive fiscal quarters to be less than 17.0%." 4. Conditions to Effectiveness. This Amendment shall become effective on the date upon which the Administrative Agent receives counterparts hereof, executed and delivered by a duly authorized officer of the Borrower and the Majority Banks. 5. Representations and Warranties. The Borrower hereby confirms, reaffirms and restates the representations and warranties set forth in Section 9 of the Credit Agreement; provided that each reference to the Credit Agreement therein shall be deemed to be a reference to the Credit Agreement after giving effect to this Amendment. The Borrower represents and warrants that no Default or Event of Default has occurred and is continuing. 6. Continuing Effect of Credit Agreement. This Amendment shall not constitute a waiver or amendment of any other provision of the Credit Agreement not expressly referred to herein and shall not be construed as a waiver or consent to any further or future action on the part of the Borrower that would require a waiver or consent of the Administrative Agent or the Banks. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect. 7. Counterparts. This Amendment may be executed by the parties hereto in any number of counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the date first above written. COMPUTER ASSOCIATES INTERNATIONAL, INC. By: /s/ Lisa Savino Title: Vice President and Treasurer CREDIT SUISSE FIRST BOSTON, as Administrative Agent By: /s/ David W. Kratovil Title: Director By: /s/ Julia P. Kingsbury Title: Vice President CREDIT SUISSE FIRST BOSTON, as the Lead Arranger and a Bank By: /s/ David W. Kratovil Title: Director By: /s/ Jay Chall Title: Director

Signature Page to the First Amendment to the $1,300,000,000 Amended and Restated Credit Agreement, dated as of May 24, 2000 ARAB BANK PLC By: /s/ Samer Tamimi Title: Vice President BANCA COMERCIAL PORTUGES By: /s/ Shekar Chatterjee Title: Sub-Director BANCA COMMERCIALE ITALIANA By: /s/ C. Dougherty Title: Vice President By: /s/ J. Dickerhof Title: Vice President BANCA ESPIRITO SANTO By: /s/ Andrew M. Orsen Title: Vice President By: /s/ Tery R. Hull Title: Senior Vice President BANCA HAPOALIM, B.M. By: /s/ Marc Bosc Title: Vice President By: /s/ Conrad Wagner Title: First Vice President BANCA POPOLARE DI MILANO, New York Branch By: /s/ Fulvio Montanari Title: First Vice President By: /s/ Patrick F. Dillon Title: Vice President and Chief Credit Officer BANK OF AMERICA, N.A. By: /s/ Fred L. Thorne Title: Managing Director THE BANK OF NOVA SCOTIA By: /s/ Brian S. Allen Title: Managing Director THE BANK OF TOKYO-MITSUBISHI, LTD By: /s/ T. Fennessey Title: Vice President BANK ONE, NA By: /s/ Andrew Kantor Title: First Vice President BW CAPITAL MARKETS, INC. By: /s/ Thomas A. Lowe Title: Vice President By: /s/ Philip G. Waldrop Title: Vice President CHANG HWA COMMERCIAL BANK, LTD. By: /s/ Wan-Tu Yeh Title: SVP and General Manager THE CHASE MANHATTAN BANK By: /s/ William Flister Title: SVP CITIC KA WAH BANK LIMITED By: /s/ Peter Zhao Title: Executive VP and General Manager CREDIT LYONNAIS, New York Branch By: /s/ Rod Hurst Title: Vice President THE DAI-ICHI KANGYO BANK, LTD By: /s/ Azlan Ahmed Title: Assistant Vice President DG BANK By: /s/ Sabine Wendt Title: Vice President By: /s/ Lynne McCarthy Title: Vice President FLEET NATIONAL BANK By: /s/ Philip A. Davi Title: Vice President KBC BANK NV By:/s/ Robert M. Surdam, Jr. Title: Vice President By:/s/ Robert Snauffer Title: First Vice President MELLON BANK, N.A. By: /s/ Kristen Denning Title: AVP MERRILL LYNCH By: /s/ Neil Brisson Title: Director MITSUBISHI TRUST AND BANKING CORPORATION By: /s/ Toshino Kayashi Title: Senior Vice President NORTH FORK BANK By: /s/ Robert Dunwoody Title: Vice President ROYAL BANK OF CANADA By: /s/ Stephanie Babich Title: Senior Manager RZB FINANCE LLC By: /s/ Pearl Geffers Title: First Vice President By: /s/ John A. Valiska Title: Vice President SAN PAOLA IMI S.P.A. By: /s/ Robert Wurster Title: First Vice President THE SUMITOMO BANK By: /s/ Edward D. Henderson, Jr Title: Senior Vice President SUMMIT BANK By: /s/ Karen D. Budniak Title: Vice President SUNTRUST BANK By: /s/ David Wisdom Title: Vice President THE TOKAI BANK By: /s/ Shinichi Nakatani Title: Assistant General Manager WACHOVIA BANK, N.A. By: /s/ Elizabeth M. Phelan Title: Vice President WESTDEUTSCHE LANDESBANK By: /s/ Duncan M. Robertson Title: Director By: /s/ Thomas Lee Title: Associate

                                 FIRST AMENDMENT

     FIRST AMENDMENT,  dated as of January 18, 2001 (this  "Amendment"),  to the
$3,000,000,000  Credit  Agreement,  dated  as  of  May  26,  1999  (as  amended,
supplemented or otherwise  modified from time to time, the "Credit  Agreement"),
among  Computer  Associates  International,  Inc. (the  "Borrower"),  the banks,
agents and other financial  institutions  from time to time parties thereto (the
"Banks")  and Credit  Suisse  First  Boston,  as  administrative  agent (in such
capacity, the "Administrative Agent") for the Banks.

                              W I T N E S S E T H :

     WHEREAS,  the Borrower,  the Banks and the Administrative Agent are parties
to the Credit Agreement;

     WHEREAS,  the Borrower has requested that the Administrative  Agent and the
Banks agree to amend certain  provisions of the Credit Agreement,  as more fully
described herein; and

     WHEREAS,  the Administrative  Agent and the Banks are willing to amend such
provisions of the Credit  Agreement,  but only upon the terms and subject to the
conditions set forth herein;

     NOW THEREFORE,  in  consideration  of the premises  contained  herein,  the
parties hereto agree as follows:

     1.   Defined Terms.  Unless  otherwise  defined herein,  capitalized  terms
          which are used herein shall have the meanings  assigned thereto in the
          Credit Agreement.

     2.   Amendment  to  Section  1.1.  Section  1.1 is  hereby  amended  by (a)
          deleting the definitions of "Consolidated  EBITDA" and "Test Ratio" in
          their  entireties,  and substituting in lieu thereof the following new
          definitions respectively:

          " "Consolidated  Cash Flow" means, for any period,  the sum of (a) the
          amount set forth as "Net Cash Provided by Operating  Activities" (or a
          comparable term) in the  consolidated  statements of cash flows of the
          Borrower and its  consolidated  Subsidiaries  for such period plus (b)
          Consolidated Interest Expense for such period.

          "Test Percentage" means, for any period, the percentage (determined by
          reference to the consolidated financial statements of the Borrower and
          its Subsidiaries  most recently  required to be delivered  pursuant to
          Section  11.1(h)(i)  or  (ii),  as the  case  may  be)  which  (a) the
          Consolidated  Cash Flow of the Borrower and its  Subsidiaries for such
          period  constitutes  of  (b)  the  total  Debt  of  Borrower  and  its
          Subsidiaries on a consolidated basis on the last day for such period.

and (b) adding the following  phrase in the  definition of "GAAP"  following the
term "March 31, 1999" appearing in the first parenthetical thereof:

"as modified in the manner described in the press release issued by the Borrower on October 25, 2000" 3. Amendment to Section 11.2. Section 11.2 is hereby amended by deleting subsections (f) and (g) therefrom, and substituting in lieu thereof the following new subsections (f) and (g): "(f) Interest Coverage. Permit the ratio of (i) Consolidated Cash Flow of the Borrower and its Subsidiaries for any period of four consecutive fiscal quarters to (ii) Consolidated Interest Expense of the Borrower and its Subsidiaries for such period, to be less than 2.10 to 1. (g) Leverage. Permit the Test Percentage for any period of four consecutive fiscal quarters to be less than 17.0%." 4. Conditions to Effectiveness. This Amendment shall become effective on the date upon which the Administrative Agent receives counterparts hereof, executed and delivered by a duly authorized officer of the Borrower and the Majority Banks. 5. Representations and Warranties. The Borrower hereby confirms, reaffirms and restates the representations and warranties set forth in Section 10 of the Credit Agreement; provided that each reference to the Credit Agreement therein shall be deemed to be a reference to the Credit Agreement after giving effect to this Amendment. The Borrower represents and warrants no Default or Event of Default has occurred and is continuing. 6. Continuing Effect of Credit Agreement. This Amendment shall not constitute a waiver or amendment of any other provision of the Credit Agreement not expressly referred to herein and shall not be construed as a waiver or consent to any further or future action on the part of the Borrower that would require a waiver or consent of the Administrative Agent or the Banks. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect. 7. Counterparts. This Amendment may be executed by the parties hereto in any number of counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the date first above written. COMPUTER ASSOCIATES INTERNATIONAL, INC. By: /s/ Lisa Savino Title: Vice President and Treasurer CREDIT SUISSE FIRST BOSTON, as Administrative Agent By: /s/ David W. Kratovil Title: Director By: /s/ Julia P. Kingsbury Title: Vice President CREDIT SUISSE FIRST BOSTON, as the Lead Arranger and a Bank By: /s/ David W. Kratovil Title: Director By: /s/ Jay Chall Title: Director

Signature Page to the First Amendment to the $3,000,000,000 Credit Agreement, dated as of May 26, 1999 ALLSTATE LIFE INSURANCE COMPANY By:/s/ Patricia W. Wilson Title: Authorized Signatory By:/s/ Daniel C. Leimbach Title: Authorized Signatory ARAB BANK PLC By:/s/ Samer Tamimi Title: Vice President BANCA COMERCIAL PORTUGES By:/s/ Shekar Chatterjee Title: Sub-Director BANCA COMMERCIALE ITALIANA By:/s/ C. Dougherty Title: Vice President By:/s/ J. Dickerhof Title: Vice President BANCA ESPIRITO SANTO By:/s/ Andrew M. Orsen Title: Vice President By:/s/ Tery R. Hull Title: Senior Vice President BANCA HAPOALIM, B.M By:/s/ Marc Bosc Title: Vice President By:/s/ Conrad Wagner Title: First Vice President BANCA LEUMI By:/s/ Joung Hee Hong Title: Vice President BANCA POPOLARE DI MILANO, New York Branch By:/s/ Fulvio Montanari Title: First Vice President By:/s/ Patrick F. Dillon Title: Vice President and Chief Credit Officer BANK OF AMERICA, N.A. By:/s/ Fred L. Thorne Title: Managing Director BANK OF HAWAII By:/s/ Luke Yeh Title: Vice President BANK OF MONTREAL By:/s/ Bruce Pietka Title: Director THE BANK OF NOVA SCOTIA By:/s/ Brian S. Allen Title: Managing Director THE BANK OF TOKYO-MITSUBISHI, LTD By:/s/ T. Fennessey Title: Vice President BANK ONE, NA By:/s/ Andrew Kantor Title: First Vice President BANK POLSKA By:/s/ Barry W. Henry Title: Vice President and Senior Lending Officer BANQUE WORMS CAPITAL CORP By:/s/ Michelle Flemming Title: Vice President and General Counsel BAYERISCHE HYPO UND VEREINSBANK AG By:/s/ Marianne Weinzinger Title: Director By:/s/ Eric N. Pelletier Title: Director BW CAPITAL MARKETS, INC. By:/s/ Thomas A. Lowe Title: Vice President By:/s/ Philip G. Waldrop Title: Vice President CHANG HWA COMMERCIAL BANK, LTD. By:/s/ Wan-Tu Yeh Title: SVP and General Manager THE CHASE MANHATTAN BANK By:/s/ William Flister Title: SVP CHEVY CHASE BANK By:/s/ Dory Halati Title: Vice President CITIC KA WAH BANK LIMITED By:/s/ Peter Zhao Title: Executive VP and General Manager CREDIT LYONNAIS, New York Branch By:/s/ Rod Hurst Title: Vice President THE DAI-ICHI KANGYO BANK, LTD By:/s/ Azlan Ahmed Title: Assistant Vice President DG BANK By:/s/ Sabine Wendt Title: Vice President By:/s/ Lynne McCarthy Title: Vice President FLEET NATIONAL BANK By:/s/ Philip A. Davi Title: Vice President IKB DEUTSCHE INDUSTRIEBANK AG By:/s/ Manfred Bilsly Title: Director By:/s/ Ana Bohorquet Title: Manager THE INDUSTRIAL BANK OF JAPAN By:/s/ J. Kenneth Biegen Title: Senior Vice President KBC BANK NV By:/s/ Robert M. Surdam, Jr. Title: Vice President By:/s/ Robert Snauffer Title: First Vice President LANDESBANK SACHSEN GIROZENTRALE By:/s/ G. Moller. Title: International Department By:/s/ Mr. Schellbach Title: International Department MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY By:/s/ Steven J. Katz Title: Second VP and Associate General Counsel MELLON BANK, N.A. By:/s/ Kristen Denning Title: AVP MERRILL LYNCH By:/s/ Neil Brisson Title: Director MITSUBISHI TRUST AND BANKING CORPORATION By:/s/ Toshino Kayashi Title: Senior Vice President NORTH FORK BANK By:/s/ Robert Dunwoody Title: Vice President PERSEUS CDO I, LIMITED By:/s/ Steven J. Katz Title: Second VP and Associate General Counsel ROYAL BANK OF CANADA By:/s/ Stephanie Babich Title: Senior Manager RZB FINANCE LLC By:/s/ Pearl Geffers Title: First Vice President By:/s/ John A. Valiska Title: Vice President SAN PAOLA IMI S.P.A. By:/s/ Robert Wurster Title: First Vice President SIMSBURY CLO, LIMITED By:/s/ Steven J. Katz Title: Second VP and Associate General Counsel SOMERS CDO, LIMITED By:/s/ Steven J. Katz Title: Second VP and Associate General Counsel THE SUMITOMO BANK By:/s/ Edward D. Henderson, Jr Title: Senior Vice President SUMMIT BANK By:/s/ Karen D. Budniak Title: Vice President SUNTRUST BANK By:/s/ David Wisdom Title: Vice President THE TOKAI BANK By:/s/ Shinichi Nakatani Title: Assistant General Manager THE TRAVELERS INSURANCE COMPANY By:/s/ Matthew J. McInerny Title: Assistant Investment Officer UNITED OVERSEAS BANK LIMITED By:/s/ Kwong Yew Wong Title: Agent and General Manager WACHOVIA BANK, N.A By:/s/ Elizabeth M. Phelan Title: Vice President WESTDEUTSCHE LANDESBANK By:/s/ Duncan M. Robertson Title: Director By:/s/ Thomas Lee Title: Associate

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<FISCAL-YEAR-END>                              MAR-31-2001
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