Computer Associates 2009 Annual Report Download - page 33

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contemplation of other license agreements with the same customer where the right exists to receive unspecified future
software products.
Several contracts executed prior to October 2000 (the prior business model) remain in effect and have not yet been
renewed under license arrangements that contain the right to receive unspecified future software products. Under those
agreements, we did not offer our customers the right to receive unspecified future software products and we record the
present value of the license agreement as revenue at the time the license agreement was signed. As these customer
license agreements are renewed under our current licensing model, we expect to see an increase in revenue backlog
related to these licenses, from which subscription revenue will be amortized in future periods. The favorable impact on
subscription revenue from the conversion of contracts from our prior business model to our current business model is
decreasing over time as the transition is completed and was not material for fiscal 2009 or 2008. The remaining balance
of unbilled installment receivables that were previously recognized as revenue under our prior business model was
$240 million and $342 million as of March 31, 2009 and March 31, 2008, respectively.
Under our license agreements, customers generally make installment payments for the right to use our software
products over the term of the associated software license agreement. While the timing of revenue recognition is affected
by the offering of unspecified future software products, it generally has not changed the timing of how we bill and
collect cash from customers and as a result, our cash generated from operations has generally not been affected by the
offering of unspecified future software products.
Performance Indicators
Management uses several quantitative and qualitative performance indicators to assess our financial results and
condition. Each provides a measurement of the performance of our business model and how well we are executing our
plan.
Our predominantly subscription-based business model is unique among our competitors in the software industry and it
may be difficult to compare our results for many of our performance indicators with those of our competitors. The
following is a summary of the principal quantitative and qualitative performance indicators that management uses to
review performance:
(DOLLARS IN MILLIONS) 2009 2008 CHANGE
PERCENT
CHANGE
YEAR ENDED MARCH 31,
Total revenue $ 4,271 $ 4,277 $ (6) —%
Subscription and maintenance revenue $ 3,772 $ 3,762 $ 10 —%
Net income $ 694 $ 500 $ 194 39%
Cash provided by operating activities $ 1,212 $ 1,103 $ 109 10%
Total bookings $ 5,245 $ 4,724 $ 521 11%
Subscription and maintenance bookings $ 4,783 $ 4,110 $ 673 16%
Weighted average subscription and maintenance license agreement duration in years 3.61 2.98 0.63 21%
Annualized subscription and maintenance bookings $ 1,325 $ 1,379 $ (54) (4)%
(DOLLARS IN MILLIONS)
AS OF
MARCH 31,
2009
AS OF
MARCH 31,
2008 CHANGE
PERCENT
CHANGE
Cash, cash equivalents and marketable securities
1
$ 2,713 $ 2,796 $ (83) (3)%
Total debt $ 1,937 $ 2,582 $ (645) (25)%
Total expected future cash collections from committed contracts
2
$ 4,914 $ 4,362 $ 552 13%
Total revenue backlog
2
$ 7,378 $ 6,858 $ 520 8%
1 At March 31, 2009 and March 31, 2008, marketable securities were less than $1 million.
2 Refer to the discussion in the “Liquidity and Capital Resources” section of this MD&A for additional information on expected future cash collections from committed contracts, billing
backlog and revenue backlog.
Analyses of our performance indicators, including general trends, can be found in the “Results of Operations” and
“Liquidity and Capital Resources” sections of this MD&A.
Subscription and Maintenance Revenue — Subscription and maintenance revenue is the amount of revenue recognized
ratably during the reporting period from both: (i) subscription license agreements that were in effect during the period,
23