Computer Associates 2012 Annual Report Download - page 40

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Total Revenue by Geography
The following table presents the amount of revenue earned from sales to unaffiliated customers in the United States and international
regions and corresponding percentage changes for fiscal 2012, 2011 and 2010.
FISCAL 2012
COMPARED WITH
FISCAL 2011
FISCAL 2011
COMPARED WITH
FISCAL 2010
(dollars in millions)
2012
%OF
TOTAL 2011
%OF
TOTAL
%
CHANGE 2011
%OF
TOTAL 2010
%OF
TOTAL
%
CHANGE
United States $ 2,812 58% $ 2,519 57% 12% $ 2,519 57% $ 2,337 55% 8%
International 2,002 42% 1,910 43% 5% 1,910 43% 1,890 45% 1%
Total $ 4,814 100% $ 4,429 100% 9% $ 4,429 100% $ 4,227 100% 5%
Revenue in the United States increased by $293 million, or 12%, for fiscal 2012 compared with fiscal 2011 primarily due to higher
subscription and maintenance revenue and software fees and other revenue. International revenue increased by $92 million, or 5%,
for fiscal 2012 compared with fiscal 2011 primarily due to a favorable foreign exchange effect of $89 million. Excluding the
favorable foreign exchange effect, international revenue would have increased by $3 million primarily as a result of revenue growth
in Latin America and the Asia-Pacific region, which was offset by lower revenue in Europe, Middle East and Africa.
Revenue in the United States increased by $182 million, or 8% for fiscal 2011 compared with fiscal 2010 primarily due to higher
software fees and other revenue. International revenue increased by $20 million, or 1% for fiscal 2011 compared with fiscal 2010.
Lower revenue in Europe, Middle East and Africa was offset by revenue growth in Latin America and the Asia-Pacific-Japan region.
Excluding a favorable foreign exchange effect of $4 million, International revenue would have increased by $16 million, or 1%.
Price changes do not have a material effect on revenue in a given period as a result of our ratable subscription model.
Expenses
The overall increase in operating expenses for fiscal 2012 compared with fiscal 2011 was primarily due an increase in costs
associated with our recent acquisitions, an increase in personnel-related costs for selling and marketing and an increase in expenses
for product development and enhancements.
The overall increase in operating expenses for fiscal 2011 compared with fiscal 2010 was primarily due to costs associated with our
fiscal 2011 and 2010 acquisitions and an increase in selling and marketing costs attributable to CA World, our user conference,
partially offset by the decrease in general and administrative costs. In fiscal 2010, we incurred restructuring costs of $50 million
associated with our fiscal 2010 restructuring plan, which did not reoccur in fiscal 2011.
Costs of Licensing and Maintenance
Costs of licensing and maintenance include technical support, royalties and distribution costs. The increase in costs of licensing and
maintenance for fiscal 2012 compared with fiscal 2011 was due to an increase in costs associated with our recent acquisitions.
The increase in costs of licensing and maintenance for fiscal 2011 compared with fiscal 2010 was primarily due to an increase in cost
of goods sold expense of $21 million from the acquired technologies related to the NetQoS acquisition.
Cost of Professional Services
Cost of professional services consists primarily of our personnel-related costs associated with providing professional services and
training to customers. For fiscal 2012 compared with fiscal 2011, cost of professional services increased primarily as a result of our
fiscal 2012 acquisition of Base Technologies. Gross margins on professional services were approximately 7% for each of fiscal 2012
and 2011.
For fiscal 2011, cost of professional services increased compared with fiscal 2010 primarily due to an increase in services projects, as
reflected by the $39 million increase in revenue. These costs increased at a higher rate than revenue primarily as a result of a higher
mix of engagements that required additional effort to meet customer requirements during the second quarter of fiscal 2011. These
engagements resulted in lower margins and as a result gross margins on professional services decreased to 7% for fiscal 2011,
compared with 9% for fiscal 2010.
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