Computer Associates 2008 Annual Report Download - page 36

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Weighted Average License Agreement Duration in Years — The weighted average license agreement duration in years for
our direct business reflects the duration of all software licenses executed during a period, weighted to reflect the
contract value of each individual software license. The weighted average duration is affected by the number and dollar
amounts of contracts signed during the period, and therefore may change from period to period and will not necessarily
correlate to the prior year periods. If the weighted average life of our subscription license agreements remains constant,
an increase in deferred subscription value will ultimately result in an increase in subscription revenue in future periods.
Annualized new deferred subscription value represents the annual amount of new deferred subscription value to be
recognized as subscription revenue from our direct business in future years based on the weighted average duration of
the underlying contracts. It is calculated by dividing the total value of all new term-based software license agreements
entered into during a period in our direct business by the weighted average life of all such license agreements recorded
during the same period. The annualized new deferred subscription value measures the revenue to be realized on an
annual basis from the contracts signed.
Total Revenue Backlog — Total revenue backlog represents the aggregate amount the Company expects to recognize as
revenue in the future as either subscription and maintenance revenue or professional services revenue associated with
contractually committed amounts billed or to be billed as of the balance sheet date. Total revenue backlog is comprised
of amounts recognized as a liability in our consolidated balance sheets as “deferred revenue — billed or collected” as
well as unearned amounts associated with balances yet to be billed under subscription, maintenance and professional
service agreements. Amounts are classified as current or non-current depending on when they are expected to be
earned and therefore recognized as revenue. We refer to the portion of total revenue backlog that relates to subscription
and maintenance licenses as deferred subscription value. Deferred subscription value is recognized as revenue evenly on
a monthly basis over the duration of the underlying license agreements and is reported as “Subscription and
maintenance revenue” line in our Consolidated Statements of Operations.
“Deferred revenue — billed or collected” is comprised of: (i) amounts received in advance of revenue recognition from
the customer, (ii) amounts billed but not collected for which revenue has not yet been earned, and (iii) amounts
received in advance of revenue recognition from financial institutions where the Company has transferred its interest in
committed installments (referred to as “financing obligations” in the Notes to the Consolidated Financial Statements).
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