Computer Associates 2015 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2015 Computer Associates annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

Selected Quarterly Information
FISCAL 2015 QUARTER ENDED
JUNE 30(1) SEPTEMBER 30(1) DECEMBER 31(1) MARCH 31(1) TOTAL(1)
(dollars in millions, except per share amounts)
Revenue $ 1,069 $ 1,079 $ 1,091 $ 1,023 $ 4,262
Percentage of annual revenue 25% 25% 26% 24% 100%
Costs of licensing and maintenance $ 72 $ 71 $ 74 $ 80 $ 297
Cost of professional services $ 81 $ 88 $ 84 $ 85 $ 338
Amortization of capitalized software costs $ 67 $ 75 $ 62 $ 69 $ 273
Income from continuing operations $ 212 $ 235 $ 218 $ 145 $ 810
Basic income per common share from continuing operations $ 0.48 $ 0.53 $ 0.49 $ 0.33 $ 1.83
Diluted income per common share from continuing operations $ 0.48 $ 0.53 $ 0.49 $ 0.33 $ 1.82
FISCAL 2014 QUARTER ENDED
JUNE 30(1) SEPTEMBER 30(1) DECEMBER 31(1) MARCH 31(1) TOTAL(1)
(dollars in millions, except per share amounts)
Revenue $ 1,095 $ 1,105 $ 1,128 $ 1,084 $ 4,412
Percentage of annual revenue 25% 25% 25% 25% 100%
Costs of licensing and maintenance $ 68 $ 71 $ 77 $ 80 $ 296
Cost of professional services $ 88 $ 88 $ 88 $ 89 $ 353
Amortization of capitalized software costs $ 66 $ 69 $ 69 $ 67 $ 271
Income from continuing operations $ 330 $ 231 $ 225 $ 101 $ 887
Basic income per common share from continuing operations $ 0.72 $ 0.51 $ 0.50 $ 0.23 $ 1.97
Diluted income per common share from continuing operations $ 0.72 $ 0.51 $ 0.50 $ 0.23 $ 1.96
(1) Information presented excludes the results of our discontinued operations.
Liquidity and Capital Resources
Our cash and cash equivalent balances are held in numerous locations throughout the world, with 69% held in our
subsidiaries outside the United States at March 31, 2015. Cash and cash equivalents totaled $2,804 million at March 31,
2015, representing a decrease of $448 million from the March 31, 2014 balance of $3,252 million. The decrease in cash was
primarily a result of the $500 million repayment of our 6.125% Senior Notes due December 2014 in full. During fiscal 2015,
there was a $532 million unfavorable translation effect from foreign exchange rates on cash held outside the United States
in currencies other than the U.S. dollar.
Although 69% of our cash and cash equivalents is held by foreign subsidiaries, we currently neither intend nor expect a
need to repatriate these funds to the United States in the foreseeable future. We expect existing domestic cash, cash
equivalents and cash flows from operations to be sufficient to fund our domestic operating activities and our investing and
financing activities, including, among other things, the payment of regular quarterly dividends, compliance with our debt
repayment schedules, repurchases of our common stock and the funding of capital expenditures, for at least the next
12 months and for the foreseeable future thereafter. In addition, we expect existing foreign cash, cash equivalents and cash
flows from foreign operations to be sufficient to fund our foreign operating activities and investing activities, including,
among other things, the funding of capital expenditures, acquisitions and research and development, for at least the next
12 months and for the foreseeable future thereafter.
Sources and Uses of Cash
Under our subscription and maintenance agreements, customers generally make installment payments over the term of the
agreement, often with at least one payment due at contract execution, for the right to use our software products and receive
product support, software fixes and new products when available. The timing and actual amounts of cash received from
committed customer installment payments under any specific agreement can be affected by several factors, including the
time value of money and the customer’s credit rating. Often, the amount received is the result of direct negotiations with
the customer when establishing pricing and payment terms. In certain instances, the customer negotiates a price for a single
up-front installment payment and seeks its own internal or external financing sources. In other instances, we may assist the
customer by arranging financing on the customer’s behalf through a third-party financial institution. Alternatively, we may
decide to transfer our rights to the future committed installment payments due under the license agreement to a third-party
financial institution in exchange for a cash payment. Once transferred, the future committed installments are payable by the
42