BEA’s cash position continues to be strong, as cash flow from operations improved to $45.6 million, and BEA has more than $1.1 billion in cash, cash equivalents, short-term investments and restricted cash on the balance sheet. Full details on BEA’s reported results are on page four of this release. BEA reported pro forma operating income for the third quarter of $31.0 million and pro forma operating margin of 14.1 percent. BEA reported pro forma net income of $24.2 million and pro forma diluted net income per share of $0.06 for the third quarter. Pro forma results exclude impairment charges and acquisition-related expenses, employer payroll taxes on stock options, net gains or losses on investments in securities, and other non-recurring charges.
Our performance in the quarter was impacted by a very challenging economic environment. Still, we are encouraged by the 2,838 deals we completed in the quarter, roughly the same number as we did in Q2. Customers continued to invest in new applications, and continued to choose our platform. But, obviously, in this environment they are being more cautious and investing more slowly, stated BEA founder, President and CEO, Alfred Chuang. With more than $1 billion in cash, an expanding customer and partner base, an expanding product set, ongoing development efforts, and a strong direct and indirect distribution channel, we are well positioned for growth when the economic climate stabilizes. BEA has the #1 application server, as evidenced by recent market share reports from Gartner and others. Now, we are leveraging that leadership to expand our platform offering beyond the Web application server and become the #1 application infrastructure company for the Global 2000 to bet on for increased competitive advantage and profitability.
Our commitment to invest in product enhancements, new technologies and business relationships that extend our platform is paying off. For example, yesterday Accenture announced their global J2EE framework, which is built on BEA and is the culmination of many client engagements and months of joint engineering work. Our new integration and portal products were very successful, aided by the support of our Integration and Portal Star Solution partners, Chuang continued. Building upon the success of BEA WebLogic Integration and BEA WebLogic Portal, we are now working on the next generation of extensions. These include simpler Web Services development tools, multi-channel support and other key infrastructure elements, as well as partner-generated portlets and increased partner support for our standards-based approach to integration. The breadth of our products, ISV relationships and systems integrator relationships is generating increased demand for BEA solutions.
As previously announced on November 1, BEA implemented a cost reduction program in Q3 that included the consolidation of excess facilities and a planned reduction in work force of about 9-10% by the end of the year. Additionally, BEA announced that it recognized an impairment write-down of certain acquired intangible assets and minority investments. As a result of these actions, BEA recognized on a GAAP basis impairment and other non-recurring charges of $110 million in Q3, $90 million of which is associated with asset impairments and is non-cash. BEA also expects to take a pre-tax charge of approximately $15-20 million in Q4, associated with the work force reductions occurring in Q4. The actions we have taken have better aligned our cost structure with our current business strategy and expectations, improved our competitiveness, and increased our flexibility to manage through the current business cycle, stated Chuang.
