Computer Associates 2016 Annual Report Download - page 41

The following table sets forth, for the fiscal years indicated, the percentage of total revenue presented by the items in the
accompanying Consolidated Statements of Operations:
Percentage of
Total Revenue for the
Year Ended March 31,
2016 2015 2014
Revenue:
Subscription and maintenance 82% 84% 83%
Professional services 889
Software fees and other 1088
Total revenue 100% 100% 100%
Expenses:
Costs of licensing and maintenance 7% 7% 7%
Cost of professional services 788
Amortization of capitalized software costs 6 6 6
Selling and marketing 25 25 25
General and administrative 999
Product development and enhancements 14 14 13
Depreciation and amortization of other intangible assets 3 3 3
Other expenses, net —15
Total expenses before interest and income taxes 72% 73% 76%
Income from continuing operations before interest and income taxes 28% 27% 24%
Interest expense, net 111
Income from continuing operations before income taxes 27% 26% 23%
Income tax expense 873
Income from continuing operations 19% 19% 20%
Note: Amounts may not add to their respective totals due to rounding.
Revenue
Total Revenue
Total revenue decreased in fiscal 2016 compared with fiscal 2015 primarily as a result of an unfavorable foreign exchange effect
of $212 million during fiscal 2016 and, to a lesser extent, a decrease in subscription and maintenance revenue as described
below. The decreases were partially offset by an increase in revenue during fiscal 2016 of $97 million associated with our second
quarter fiscal 2016 acquisitions, primarily reflected within software fees and other revenue.
Total revenue decreased in fiscal 2015 compared with fiscal 2014 primarily due to a decrease in subscription and maintenance
revenue and professional services revenue. In addition, during fiscal 2015, there was an unfavorable foreign exchange effect of
$71 million compared with fiscal 2014.
We expect revenue for fiscal 2017 to be generally consistent or increase slightly compared with fiscal 2016.
Subscription and Maintenance
The decrease in subscription and maintenance revenue for fiscal 2016 compared with fiscal 2015 was primarily attributable to an
unfavorable foreign exchange effect of $183 million for fiscal 2016 and, to a lesser extent, a decrease in Mainframe Solutions
revenue (refer to “Performance of Segments” below).
The decrease in subscription and maintenance revenue for fiscal 2015 compared with fiscal 2014 was primarily attributable to an
unfavorable foreign exchange effect of $59 million for fiscal 2015 and a decrease in Mainframe Solutions revenue.
Professional Services
Professional services revenue primarily includes product implementation, consulting, customer education and customer training.
Professional services revenue for fiscal 2016 decreased compared with fiscal 2015 primarily due to an unfavorable foreign
exchange effect of $16 million for fiscal 2016 and, to a lesser extent, a decline in professional services engagements in the first
half of fiscal 2016 and fiscal 2015. For fiscal 2016, professional services revenue includes revenue of $18 million from our second
quarter fiscal 2016 acquisition of Rally. For the long term, we expect new versions of our on-premise software to be easier to
implement and a higher percentage of our business to shift to a SaaS-based model, which could potentially reduce the demand
for our professional services engagements.
Professional services revenue for fiscal 2015 decreased compared with fiscal 2014 primarily due to a decrease in the size and
number of professional services engagements during the first half of fiscal 2015, including non-core engagements with
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