Computer Associates 2012 Annual Report Download - page 98

Note 17 — Supplemental Statement of Cash Flows Information
Interest payments, net for fiscal years 2012, 2011 and 2010 were approximately $61 million, $72 million and $64 million,
respectively. Income taxes paid for these fiscal years were approximately $420 million, $222 million and $329 million, respectively.
Non-cash financing activities for fiscal years 2012, 2011 and 2010 consisted of treasury common shares issued in connection with the
following: share-based incentive awards issued under the Company’s equity compensation plans of approximately $55 million (net of
approximately $26 million of income taxes withheld), $64 million (net of approximately $27 million of income taxes withheld) and
$65 million (net of approximately $24 million of income taxes withheld), respectively; and discretionary stock contributions to the
CA, Inc. Savings Harvest Plan of approximately $13 million, $25 million and $24 million, respectively. Non-cash financing activities
for fiscal year 2010 included approximately $13 million in treasury common shares issued in connection with the Company’s
previous Employee Stock Purchase Plan.
Note 18 — Segment and Geographic Information
In the first quarter of fiscal year 2012, the Company changed the internal reporting used by its Chief Executive Officer for evaluating
segment performance and allocating resources. The new reporting disaggregates the Company’s operations into Mainframe Solutions,
Enterprise Solutions and Services segments, and represented a change in the Company’s operating segments under ASC 280,
“Segment Reporting.” Prior to fiscal year 2012, the Company reported and managed its business as a single operating segment under
ASC 280.
The Company’s Mainframe Solutions and Enterprise Solutions operating segments comprise its software business organized by the
nature of the Company’s software offerings and the product hierarchy in which the platform operates. The Services operating
segment comprises implementation, consulting, education and training services, including those directly related to the Mainframe
Solutions and Enterprise Solutions software that the Company sells to its customers.
The Company regularly enters into a single arrangement with a customer that includes mainframe solutions, enterprise solutions and
services. The amount of contract revenue assigned to segments is generally based on the manner in which the proposal is made to the
customer. The software product revenue is assigned to the Mainframe Solutions and Enterprise Solutions segments based on either:
(1) a list price allocation method (which allocates a discount in the total contract price to the individual products in proportion to the
list price of the products); (2) allocations included within internal contract approval documents; or (3) the value for individual
software products as stated in the customer contract. The price for the implementation, consulting, education and training services is
separately stated in the contract and these amounts of contract revenue are assigned to the Services segment. The contract value
assigned to each segment is then recognized in a manner consistent with the revenue recognition policies the Company applies to the
customer contract for purposes of preparing the Consolidated Financial Statements.
Segment expenses include costs that are controllable by segment managers (i.e., direct costs) and, in the case of the Mainframe
Solutions and Enterprise Solutions segments, an allocation of shared and indirect costs (i.e., allocated costs). Segment-specific direct
costs include a portion of selling and marketing costs, licensing and maintenance costs, product development costs, general and
administrative costs and amortization of the cost of internally developed software. Allocated segment costs primarily include indirect
selling and marketing costs and general and administrative costs that are not directly attributable to a specific segment. The basis for
allocating shared and indirect costs between the Mainframe Solutions and Enterprise Solutions segments is dependent on the nature
of the cost being allocated and is either in proportion to segment revenues or in proportion to the related direct cost category.
Expenses for the Services segment consist only of direct costs and there are no allocated or indirect costs for the Services segment.
For fiscal year 2012, the Company incurred severance costs associated with the Fiscal 2012 Plan, of which $22 million, $19 million
and $1 million were assigned to the Mainframe Solutions, Enterprise Solutions and Services segments, respectively. For fiscal year
2010, the Company incurred severance costs associated with the Fiscal 2010 Plan, of which $23 million, $23 million and $2 million
were assigned to the Mainframe Solutions, Enterprise Solutions and Services segments, respectively. See Note 4, “Severance and
Exit Costs,” for additional information.
Segment expenses do not include the following: share-based compensation expense; amortization of purchased software;
amortization of other intangible assets; derivative hedging gains and losses; and severance, exit costs and related charges associated
with the Company’s Fiscal 2007 Plan.
A measure of segment assets is not currently provided to the Company’s Chief Executive Officer and has therefore not been
disclosed.
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