Computer Associates 2015 Annual Report Download - page 32

Total revenue is the amount of revenue recognized during the reporting period from the sale of license,
maintenance and professional services agreements. Amounts recognized as subscription and maintenance revenue are
recognized ratably over the term of the agreement. Professional services revenue is generally recognized as the services are
performed or recognized on a ratable basis over the term of the related software license. Software fees and other revenue
generally represents license fee revenue recognized at the inception of a license agreement (up-front basis) and also
includes our SaaS revenue, which is recognized as services are provided.
Subscription and maintenance revenue is the amount of revenue recognized ratably
during the reporting period from: (i) subscription license agreements that were in effect during the period, generally
including maintenance that is bundled with and not separately identifiable from software usage fees or product sales,
(ii) maintenance agreements associated with providing customer technical support and access to software fixes and upgrades
that are separately identifiable from software usage fees or product sales, and (iii) license agreements bundled with
additional products, maintenance or professional services for which vendor specific objective evidence (VSOE) has not been
established. These amounts include the sale of products directly by us, as well as by distributors and volume partners, value-
added resellers and exclusive representatives to end-users, where the contracts incorporate the right for end-users to receive
unspecified future software products, and other contracts entered into in close proximity or contemplation of such
agreements.
Total bookings, or sales, includes the incremental value of all subscription, maintenance and professional
services contracts and software fees and other contracts entered into during the reporting period and is generally reflective
of the amount of products and services during the period that our customers have agreed to purchase from us. License fees
for bookings attributed to sales of software products for which revenue is recognized on an up-front basis is reflected in
‘‘Software fees and other’’ in our Consolidated Statements of Operations, while the maintenance portion is reflected in
‘‘Subscription and maintenance’’ in our Consolidated Statements of Operations.
Our management looks within total bookings at renewal bookings, which we define as bookings attributable to the
renewable value of a prior contract (i.e., the maintenance value and, in the case of non-perpetual licenses, the license
value), and at total new product sales, which we define as sales of mainframe and enterprise solutions products and
mainframe solutions capacity that are new or in addition to products or mainframe solutions capacity previously contracted
for by a customer. Renewal bookings, as we report them, do not include new product and capacity sales and professional
services arrangements and are reflected as subscription and maintenance bookings in the period (for which revenue would
be recognized ratably over the term of the contract). Renewals can close before their scheduled renewal date for a number
of reasons, including customer preference, customer needs for additional products or capacity, or our preference. The level
of contracts closed prior to scheduled expiration dates and the reasons for such closings can vary from quarter to quarter.
Generally, quarters with smaller renewal inventories result in a lower level of bookings because renewal bookings will be
lower and, to a lesser extent, because renewals remain an important opportunity for new product sales.
Mainframe solutions new product sales and capacity growth can be inconsistent on both a quarterly and annual basis. We
believe the period-over-period change in mainframe solutions new product sales and capacity combined is a more
appropriate measure of performance and, therefore, we provide only total mainframe solutions new sales information, which
includes mainframe solutions capacity. The amount of new product sales for a period, as currently tracked by us, requires
estimation by management and has been historically reported by providing only growth rate comparisons. Within a given
period, the amount of new product sales may not be material to the change in our total bookings or revenue compared with
prior periods. New product sales can be reflected as subscription and maintenance bookings in the period (for which
revenue would be recognized ratably over the term of the contract) or in software fees and other bookings (which are
recognized as software fees and other revenue in the current period).
Subscription and maintenance bookings is the aggregate incremental amount we
expect to collect from our customers over the terms of the underlying subscription and maintenance agreements entered
into during a reporting period. These amounts include the sale of products either directly by us or through distributors and
volume partners, value-added resellers and exclusive representatives to end-users and may include the right for the customer
to receive unspecified future software products and/or additional products, services or other fees for which we have not
established VSOE for all undelivered elements. These amounts are expected to be recognized ratably as subscription and
maintenance revenue over the applicable term of the agreements. Subscription and maintenance bookings excludes the
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Total Revenue:
Subscription and Maintenance Revenue:
Total Bookings:
Subscription and Maintenance Bookings: