Computer Associates 2012 Annual Report Download - page 46

than the 15% year-over-year decline we previously expected. This decline was primarily due to the aforementioned license agreement
with a large IT outsourcer executed in the fourth quarter of fiscal 2011. We currently expect our fiscal 2013 renewal portfolio to
decline in the single-digits compared with fiscal 2012. We currently expect the first quarter of fiscal 2013 to have the lowest level of
renewals for the fiscal year. For fiscal 2012, our renewal yield was slightly below 90%.
During fiscal 2012, we took steps to improve our performance in Europe, Middle East and Africa. Some of the steps include: (1) the
appointment of a new regional executive with the intent to bring a more disciplined approach to our renewal process; and (2) the
remapping of our sales coverage model to better align and focus on countries with the most resilient IT spending. Both of these steps
are designed to accelerate new product sales and improve account penetration. We believe that over time these steps will help
improve performance in Europe, Middle East and Africa, although we also believe that the macro-economic climate will continue to
be a challenge in this region.
Annualized subscription and maintenance bookings is an indicator that normalizes the bookings recorded in the current period to
account for contract length. It is calculated by dividing the total value of all new subscription and maintenance license agreements
entered into during a period by the weighted average subscription and license agreement duration in years for all such subscription
and maintenance license agreements recorded during the same period. For fiscal 2012, annualized subscription and maintenance
bookings decreased from $1,230 million in fiscal 2011 to $1,091 million, due to the decrease in subscription and maintenance
bookings from fiscal 2011. The weighted average subscription and maintenance license agreement duration in years of 3.46 for fiscal
2012 was consistent with fiscal 2011. Although each contract is subject to terms negotiated by the respective parties, we do not
currently expect the weighted average subscription and maintenance agreement duration in years to change materially from current
levels for end-user contracts.
For fiscal 2011 and fiscal 2010, subscription and maintenance bookings were $4,256 million and $4,322 million, respectively. The
decrease in subscription and maintenance bookings was primarily attributable to a decrease in mainframe new product and capacity
sales. During fiscal 2011, we renewed a total of 56 license agreements with incremental contract values in excess of $10 million each,
for an aggregate contract value of $1,994 million. This includes a license agreement with a large IT outsourcer for approximately
$500 million signed during the fourth quarter of fiscal 2011. This license agreement extends through fiscal 2016. During fiscal 2010,
we renewed a total of 68 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract
value of $2,146 million. For fiscal 2011, annualized subscription and maintenance bookings increased from $1,221 million in fiscal
2010 to $1,230 million in fiscal 2011. The weighted average subscription and maintenance license agreement duration in years
decreased slightly from 3.54 in fiscal 2010 to 3.46 in fiscal 2011.
Selected Quarterly Information
FISCAL 2012 QUARTER ENDED
TOTALJUNE 30 SEPT. 30 DEC. 31 MAR. 31
(in millions, except per share and percentage amounts)
Revenue $ 1,163 $ 1,200 $ 1,263 $ 1,188 $ 4,814
Percentage of annual revenue 24% 25% 26% 25% 100%
Costs of licensing and maintenance $ 67 $ 71 $ 69 $ 79 $ 286
Cost of professional services $ 88 $ 91 $ 91 $ 87 $ 357
Amortization of capitalized software costs $ 50 $ 55 $ 59 $ 61 $ 225
Income from continuing operations $ 228 $ 236 $ 263 $ 211 $ 938
Basic income per common share from continuing operations $ 0.45 $ 0.47 $ 0.54 $ 0.45 $ 1.91
Diluted income per common share from continuing operations $ 0.45 $ 0.47 $ 0.54 $ 0.45 $ 1.90
FISCAL 2011 QUARTER ENDED
TOTALJUNE 30 SEPT. 30 DEC. 31 MAR. 31
(in millions, except per share and percentage amounts)
Revenue $ 1,069 $ 1,088 $ 1,144 $ 1,128 $ 4,429
Percentage of annual revenue 24% 25% 26% 25% 100%
Costs of licensing and maintenance $ 67 $ 66 $ 74 $ 71 $ 278
Cost of professional services $ 71 $ 75 $ 77 $ 80 $ 303
Amortization of capitalized software costs $ 45 $ 47 $ 52 $ 48 $ 192
Income from continuing operations $ 221 $ 219 $ 196 $ 187 $ 823
Basic income per common share from continuing operations $ 0.43 $ 0.43 $ 0.38 $ 0.37 $ 1.60
Diluted income per common share from continuing operations $ 0.43 $ 0.43 $ 0.38 $ 0.37 $ 1.60
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