Computer Associates 2013 Annual Report Download - page 104

Non-cash investing activities for fiscal years 2013, 2012 and 2011 consisted of assets acquired under capital leases of
$9 million, $5 million and $9 million, respectively.
Non-cash financing activities for fiscal years 2013, 2012 and 2011 consisted of treasury common shares issued in connection
with the following: share-based incentive awards issued under the Company’s equity compensation plans of approximately
$64 million (net of approximately $34 million of income taxes withheld), $55 million (net of approximately $26 million of
income taxes withheld) and $64 million (net of approximately $27 million of income taxes withheld), respectively; and
discretionary stock contributions to the CA, Inc. Savings Harvest Plan of approximately $29 million, $13 million and
$25 million, respectively. Non-cash financing activities for fiscal year 2013 included approximately $6 million in treasury
common shares issued in connection with the Company’s Employee Stock Purchase Plan.
Note 17 — Segment and Geographic Information
In accordance with FASB ASC Topic 280, ‘‘Segment Reporting,’’ the Company disaggregates its operations into Mainframe
Solutions, Enterprise Solutions and Services segments, which is utilized by the Company’s Chief Executive Officer for
evaluating segment performance and allocating resources.
The Company’s Mainframe Solutions and Enterprise Solutions segments comprise its software business organized by the
nature of the Company’s software offerings and the platform on which the products operate. The Services segment
comprises implementation, consulting, education, training and support services. These services include those directly related
to the Mainframe Solutions and Enterprise Solutions software that the Company sells to its customers.
The Company regularly enters into a single arrangement with a customer that includes mainframe solutions, enterprise
solutions and services. The amount of contract revenue assigned to segments is generally based on the manner in which the
proposal is made to the customer. The software product revenue is assigned to the Mainframe Solutions and Enterprise
Solutions segments based on either: (1) a list price allocation method (which allocates a discount in the total contract price
to the individual products in proportion to the list price of the products); (2) allocations included within internal contract
approval documents; or (3) the value for individual software products as stated in the customer contract. The price for the
implementation, consulting, education, training and support services is separately stated in the contract and these amounts
of contract revenue are assigned to the Services segment. The contract value assigned to each segment is then recognized in
a manner consistent with the revenue recognition policies the Company applies to the customer contract for purposes of
preparing the Consolidated Financial Statements.
Segment expenses include costs that are controllable by segment managers (i.e., direct costs) and, in the case of the
Mainframe Solutions and Enterprise Solutions segments, an allocation of shared and indirect costs (i.e., allocated costs).
Segment-specific direct costs include a portion of selling and marketing costs, licensing and maintenance costs, product
development costs, general and administrative costs and amortization of the cost of internally developed software. Allocated
segment costs primarily include indirect selling and marketing costs and general and administrative costs that are not
directly attributable to a specific segment. The basis for allocating shared and indirect costs between the Mainframe
Solutions and Enterprise Solutions segments is dependent on the nature of the cost being allocated and is either in
proportion to segment revenues or in proportion to the related direct cost category. Expenses for the Services segment
consist only of direct costs and there are no allocated or indirect costs for the Services segment.
As part of the Company’s efforts to more fully utilize its intellectual property assets, in the first quarter of fiscal year 2013,
the Company closed a transaction that assigned the rights to certain of these assets to a large technology company for
$35 million. The entire contract amount is included in the Enterprise Solutions segment for the year ended March 31, 2013.
The Company will continue to have the ability to use these intellectual property assets in current and future product
offerings.
For fiscal year 2013, the Company incurred severance costs of which $3 million, $10 million and $2 million were assigned to
the Mainframe Solutions, Enterprise Solutions and Services segments, respectively. For fiscal year 2012, the Company
incurred severance costs associated with the Fiscal 2012 Plan, of which $22 million, $19 million and $1 million were assigned
to the Mainframe Solutions, Enterprise Solutions and Services segments, respectively. See Note 4, ‘‘Severance and Exit
Costs,’’ for additional information.
Segment expenses do not include the following: share-based compensation expense; amortization of purchased software;
amortization of other intangible assets; derivative hedging gains and losses; and other miscellaneous costs.
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