Computer Associates 2008 Annual Report Download - page 35

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following is a summary of the principal quantitative performance indicators that management uses to review
performance:
(DOLLARS IN MILLIONS) 2008 2007 CHANGE
PERCENT
CHANGE
YEAR ENDED MARCH 31,
Total revenue $ 4,277 $ 3,943 $ 334 8%
Subscription and maintenance revenue $ 3,762 $ 3,458 $ 304 9%
New deferred subscription value (direct)
1
$ 3,723 $ 3,107 $ 616 20%
New deferred subscription value (indirect) $ 135 $ 183 $ (48) (26)%
Weighted average license agreement duration in years (direct) 3.22 3.29 (0.07) (2)%
Cash provided by operating activities $ 1,103 $ 1,068 $ 35 3%
Income from continuing operations, net of taxes $ 500 $ 121 $ 379 313%
(DOLLARS IN MILLIONS) 2008 2007 CHANGE
PERCENT
CHANGE
MARCH 31,
Cash, cash equivalents and marketable securities
2
$ 2,796 $ 2,280 $ 516 23%
Total debt $ 2,582 $ 2,583 $ (1) —%
Total expected future cash collections from committed contracts
3
$ 4,362 $ 4,180 $ 182 4%
Revenue to be recognized in next 12 months from committed contracts
3
$ 3,478 $ 3,080 $ 398 13%
Revenue to be recognized beyond next 12 months from committed contracts
3
$ 3,380 $ 3,075 $ 305 10%
Total Revenue Backlog $ 6,858 $ 6,155 $ 703 11%
1 Includes results for our one-tier channel business.
2 For March 31, 2008 and March 31, 2007, marketable securities were $1 million and $5 million, respectively.
3 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. The performance indicators discussed below are those that we
believe are unique because of our subscription-based business model.
Subscription and Maintenance Revenue — Subscription and maintenance revenue is the amount of revenue recognized
ratably during the reporting period from either: (i) subscription license agreements that were in effect during the period,
which generally include maintenance that is bundled with and not separately identifiable from software usage fees or
product sales, or (ii) maintenance agreements associated with providing customer technical support and access to
software fixes and upgrades which are separately identifiable from software usage fees or product sales.
New Deferred Subscription Value — New deferred subscription value is the aggregate incremental amount we expect to
collect from our customers over the terms of the underlying subscription license agreements entered into during a
reporting period. These amounts relate to the sale of products, 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. These
amounts are recognized ratably as subscription revenue over the applicable software license terms. New deferred
subscription value typically excludes the value associated with certain “perpetual” based licenses, maintenance-only
license agreements, license-only indirect sales, and professional services arrangements.
The license agreements that contribute to new deferred subscription value represent binding payment commitments by
customers over periods generally up to three years, although in certain cases customer commitments can be for longer
periods. The amount of new deferred subscription value recorded in a period is affected by the volume and amount of
contracts renewed during that period. Typically, our new deferred subscription value increases in each consecutive
quarter during a fiscal year, with the first quarter being the weakest and the fourth quarter being the strongest. However,
as we make efforts to improve the balance of the distribution of our contract renewals throughout the fiscal year, new
deferred subscription value may not always follow the pattern of increasing in consecutive quarters during a fiscal year,
and the quarter to quarter differences in new deferred subscription value may be more moderate. Additionally, changes
in new deferred subscription value, relative to previous periods, do not necessarily correlate to changes in billings or
cash receipts, relative to previous periods. The contribution to current period revenue from new deferred subscription
value from any single license agreement is relatively small, since revenue is recognized ratably over the applicable
license agreement term.
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