Computer Associates 2008 Annual Report Download - page 47

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Our estimate of the fair value of net installment accounts receivable recorded under the prior business model
approximates carrying value. Amounts due from customers under our business model are offset by deferred subscription
value related to these license agreements, leaving no or minimal net carrying value on the balance sheet for such
amounts. The fair value of such amounts may exceed this carrying value but cannot be practically assessed since there
is no existing market for a pool of customer receivables with contractual commitments similar to those owned by us.
The actual fair value may not be known until these amounts are sold, securitized or collected. Although these customer
license agreements commit the customer to payment under a fixed schedule, to the extent amounts are not yet due and
payable by the customer, the agreements are considered executory in nature due to our ongoing commitment to provide
maintenance and unspecified future software products as part of the agreement terms.
We can estimate the total amounts to be billed from committed contracts, referred to as our “Billings Backlog,” and the
total amount to be recognized as revenue from committed contracts, referred to as our “Revenue Backlog.” The
aggregate amount of our Billings Backlog and trade and installment receivables already reflected on our Consolidated
Balance Sheets represent the amounts we expect to collect in the future from committed contracts.
(IN MILLIONS)
MARCH 31,
2008
MARCH 31,
2007
Billings Backlog:
Amounts to be billed — current $ 1,716 $ 1,525
Amounts to be billed — non-current 1,442 1,354
Total billings backlog $ 3,158 $ 2,879
Revenue Backlog:
Revenue to be recognized within the next 12 months — current $ 3,478 $ 3,080
Revenue to be recognized beyond the next 12 months — non-current 3,380 3,075
Total revenue backlog $ 6,858 $ 6,155
Deferred revenue — billed or collected $ 3,700 $ 3,276
Unearned revenue yet to be billed 3,158 2,879
Total revenue backlog $ 6,858 $ 6,155
Note: Revenue Backlog includes deferred subscription, maintenance and professional services revenue
We can also estimate the total cash to be collected in the future from committed contracts, referred to as our “Expected
future cash collections” by adding the total billings backlog to the current and non-current Trade and Installment
Accounts Receivable from our balance sheet.
(IN MILLIONS)
MARCH 31,
2008
MARCH 31,
2007
Expected future cash collections:
Total billings backlog $ 3,158 $ 2,879
Trade and installment accounts receivable — current, net 970 967
Installment accounts receivable — non-current, net 234 334
Total expected cash collections $ 4,362 $ 4,180
In any fiscal year, cash generated by continuing operating activities typically increases in each consecutive quarter
throughout the fiscal year, with the fourth quarter being the highest and the first quarter being the lowest, which may
even be negative. The timing of cash generated during the fiscal year is affected by many factors, including the timing of
new or renewed contracts and the associated billings, as well as the timing of any customer financing or transfer of our
interest in such contractual installments. Other factors that influence the levels of cash generated throughout the quarter
can include the level and timing of expenditures. For fiscal 2007, the cash generated by continuing operating activities
was highest in the third quarter, principally due to improvements in the receivable cycle attained in the third quarter
which were primarily related to the transfer of our interest in committed installments to third-party financial institutions,
as well as the timing of tax related disbursements.
37