Computer Associates 2009 Annual Report Download - page 34

generally including maintenance that is bundled with and not separately identifiable from software usage fees or product
sales, and (ii) maintenance agreements associated with providing customer technical support and access to software
fixes and upgrades that are separately identifiable from software usage fees or product sales. These amounts include the
sale of products directly by us, as well as by distributors, resellers and value-added resellers to end-users, where the
contracts incorporate the right for end-users to receive unspecified future software products and other contracts entered
into in close proximity or contemplation of such agreements.
Total Bookings — Total bookings includes the incremental value of all subscription, maintenance and professional service
contracts and software fees and other contracts entered into during the reporting period. Effective April 1, 2008, we
changed our performance indicator for measuring our new business activity from new deferred subscription value to
total bookings. In addition to what was previously included in new deferred subscription value, subscription and
maintenance bookings now includes the value of maintenance contracts committed by customers in the current period
that were separate from license subscription contracts, whereas new deferred subscription value excluded certain of
these types of agreements. The bookings amounts disclosed in this MD&A include the effects of this change. The
incremental value of subscription and maintenance agreements added was $252 million for the year ended March 31,
2008. Total bookings also includes the value of new professional services and software fees and other contracts that
were not previously included in new deferred subscription value.
Subscription and Maintenance Bookings — Subscription and maintenance bookings is the aggregate incremental amount
we expect to collect from our customers over the terms of the underlying subscription and maintenance agreements
entered into during a reporting period. These amounts include the sale of products directly by us, as well as indirectly by
distributors, resellers and value-added resellers to end-users, where the contracts incorporate the right for end-users to
receive unspecified future software products, and other contracts without these rights entered into in close proximity or
contemplation of such agreements. These amounts are expected to be recognized ratably as subscription and
maintenance revenue over the applicable term of the agreement. Subscription and maintenance bookings excludes the
value associated with certain perpetual based licenses, license-only indirect sales, and professional services
arrangements.
The license and maintenance agreements that contribute to subscription and maintenance bookings represent binding
payment commitments by customers over periods that range generally from three to five years, although in certain
cases customer commitments can be for longer periods. The amount of new subscription and maintenance bookings
recorded in a period is affected by the volume and value of contracts renewed during that period. Our subscription and
maintenance bookings typically increase in each consecutive quarter during a fiscal year, with the first quarter being the
least and the fourth quarter being the most. However, subscription and maintenance bookings may not always follow
the pattern of increasing in consecutive quarters during a fiscal year, and the quarter to quarter differences in
subscription and maintenance bookings may vary. Additionally, period-to-period changes in subscription and
maintenance bookings do not necessarily correlate to changes in billings or cash receipts. The contribution to current
period revenue from subscription and maintenance bookings from any single license or maintenance agreement is
relatively small, since revenue is recognized ratably over the applicable term for these agreements.
Weighted Average Subscription and Maintenance License Agreement Duration in Years — The weighted average subscription
and maintenance license agreement duration in years reflects the duration of all subscription and maintenance
agreements executed during a period, weighted by the total contract value of each individual agreement. Effective
April 1, 2008, our calculation of weighted average subscription and maintenance license agreement duration in years
now includes all subscription and maintenance contracts from both direct and indirect channels, whereas the prior
calculation reflected direct product subscription licenses only. This modification has also been reflected in the weighted
average subscription and maintenance license agreement duration in years for fiscal 2008 for comparison purposes and
resulted in a decrease of 0.24 years for fiscal 2008.
Annualized Subscription and Maintenance Bookings — Annualized subscription and maintenance bookings is an indicator
that normalizes the bookings recorded in the current period to account for contract length. It is calculated by dividing
the total value of all new subscription and maintenance license agreements entered into during a period by the weighted
average subscription and license agreement duration in years of all such license and maintenance agreements recorded
during the same period.
24