Computer Associates 2004 Annual Report Download - page 48

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extended payment terms. As expected, for fiscal years 2004 and 2003, financing fees decreased $106 million and $154
million, respectively, from the prior fiscal years to $184 million and $290 million, respectively. The decrease for both years
is attributable to the discontinuance of offering license agreements under the prior business model and is expected to
decline to zero over the next several years.
Professional Services
Professional services revenue for fiscal year 2004 decreased $14 million from fiscal year 2003 to $234 million. The
decrease was a result of the weak spending environment that affected the IT service sector in general, as well as our
continued shift in focus to professional services engagements that are focused solely on our software products. Our
professional services headcount was reduced by approximately 250 as a result of the creation of our CA Technology
Services group in April 2003. Quantification of the impact that these factors had on the decrease in professional services
revenue is not determinable.
Professional services revenue for fiscal year 2003 decreased $55 million from fiscal year 2002 to $248 million.
The decrease was partially attributable to the divestiture of our interBiz unit in April 2002, which generated approximately
$20 million of professional services revenue in fiscal year 2002. The decrease was also a result of the weak spending
environment that affected the IT service sector in general, as well as our continued shift in focus to professional services
engagements that are focused solely on our software products. Quantification of the impact that each of these factors
had on the decrease in professional services revenue is not determinable.
Total Revenue by Geography
Fiscal Year 2004 Fiscal Year 2003
(dollars in millions)
2004 2003 Change 2003 2002 Change
United States ........................................................................................ $1,716 $1,725 (1%) $1,725 $1,769 (2%)
International .......................................................................................... 1,560 1,302 20% 1,302 1,117 17%
$3,276 $3,027 8% $3,027 $2,886 5%
International revenue increased $258 million, or 20%, in fiscal year 2004 as compared with fiscal year 2003. The increase
in international revenue was primarily attributable to a positive impact to revenue from fluctuations in foreign currency
exchange rates of approximately $173 million for fiscal year 2004 over fiscal year 2003, which was primarily caused by
the strengthening of both the euro and the British pound versus the U.S. dollar. The increase was also a result of
increased contract bookings in prior periods associated with our European business.
Despite an increase in fiscal year 2004 of combined subscription, maintenance, and financing revenue in the United States
of approximately $59 million, compared to fiscal year 2003, total revenue in the United States declined slightly primarily due to
a decrease in professional services revenue and software fees and other, for the reasons described above.
International revenue increased $185 million, or 17%, in fiscal year 2003 as compared with fiscal year 2002. Results in fiscal
year 2002 included our interBiz operations, which we divested in April 2002. Those operations contributed approximately
$50 million and $32 million of revenue in fiscal year 2002 from the United States and international regions, respectively.
The increase in international revenue was primarily attributable to an improvement in our business in Europe and Asia as
well as the $81 million positive impact due to fluctuations in foreign currency exchange rates.
Despite an increase in fiscal year 2003 of combined subscription, maintenance, and financing revenue in the United States
of $72 million, compared to fiscal year 2002, total revenue in the United States declined slightly primarily due to a
decrease in professional services revenue and software fees and other, for the reasons described above.
Price changes and inflation did not have a material impact in fiscal years 2004, 2003, or 2002.
CA 2004 FORM 10-K | PAGE 20