Computer Associates 2015 Annual Report Download - page 35

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The following table sets forth, for the fiscal years indicated, the percentage of total revenue presented by the items in the
accompanying Consolidated Statements of Operations:
PERCENTAGE OF
TOTAL REVENUE FOR THE
YEAR ENDED MARCH 31,
2015 2014 2013
Revenue:
Subscription and maintenance 84% 83% 84%
Professional services 898
Software fees and other 888
Total revenue 100% 100% 100%
Expenses:
Costs of licensing and maintenance 7% 7% 6%
Cost of professional services 888
Amortization of capitalized software costs 6 6 7
Selling and marketing 25 25 27
General and administrative 999
Product development and enhancements 14 13 11
Depreciation and amortization of other intangible assets 3 3 4
Other expenses (gains), net 15—
Total expenses before interest and income taxes 73% 76% 71%
Income from continuing operations before interest and income taxes 27% 24% 29%
Interest expense, net 111
Income from continuing operations before income taxes 26% 23% 28%
Income tax expense 738
Income from continuing operations 19% 20% 20%
Note: Amounts may not add to their respective totals due to rounding.
Revenue
Total Revenue
As more fully described below, total revenue decreased in fiscal 2015 compared with fiscal 2014 and decreased in fiscal 2014
compared with fiscal 2013. During fiscal 2015, total revenue decreased primarily due to a decrease in subscription and
maintenance revenue and professional services revenue. In addition, during fiscal 2015, there was an unfavorable foreign
exchange effect of $71 million compared with fiscal 2014. During fiscal 2014, total revenue decreased primarily due to a
decrease in subscription and maintenance revenue. In addition, during fiscal 2014, there was an unfavorable foreign
exchange effect of $32 million compared with fiscal 2013.
As a result of insufficient revenue from new sales to offset the decline in revenue contribution from renewals, particularly in
our Mainframe Solutions segment, we expect a year-over-year decrease in total revenue for fiscal 2016 compared with fiscal
2015 due to the high percentage of our revenue that is recognized from license agreements with customers signed in prior
periods that are being recognized ratably. In addition, we currently expect a decrease in professional services revenue for
fiscal 2016 compared with fiscal 2015 primarily due to the lower level of services bookings during fiscal 2015.
Subscription and Maintenance
The decrease in subscription and maintenance revenue for fiscal 2015 compared with fiscal 2014 was primarily attributable
to an unfavorable foreign exchange effect of $59 million for fiscal 2015 and a decrease in Mainframe Solutions revenue (see
‘‘Performance of Segments’’ below).
The decrease in subscription and maintenance revenue for fiscal 2014 compared with fiscal 2013 was primarily attributable
to a decrease in fiscal 2014 and prior period enterprise solutions new product sales. For fiscal 2014, this unfavorable effect
of fiscal 2014 and prior period sales was partially offset by a higher renewal yield. In addition, the increased percentage of
bookings recognized as software fees and other revenue during fiscal 2013 had an unfavorable effect on subscription and
maintenance revenue. This is a result of the product software fees and other bookings being recognized as revenue on an
32