Revenue from Contracts with Customers (Tables)

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Impact of ASC 606 on Condensed Consolidated Financial Statement Line Items

The following tables compare the reported condensed consolidated balance sheet and statement of income, as of and for the three months ended March 31, 2018, to the amounts had ASC 605 been in effect:

Condensed Consolidated Balance Sheet	As of March 31, 2018
(in thousands)	As Reported (ASC 606)		ASC 605		Change
Accounts receivable, less allowance for doubtful accounts of $6,800	$	256,560	$	113,585	$	142,975
Other receivables and current assets	181,001		269,175		(88,174		)
Deferred income tax assets	15,446		38,641		(23,195		)
Accrued income taxes	4,870		3,681		1,189
Other accrued expenses and liabilities	95,053		101,165		(6,112		)
Deferred revenue - current	311,718		471,676		(159,958		)
Deferred income tax liabilities	28,849		4,878		23,971
Other long-term liabilities	80,865		94,060		(13,195		)
Stockholders' equity	2,407,360		2,221,649		185,711

The Company recorded $244.1 million of deferred revenue to retained earnings upon the adoption of ASC 606 on January 1, 2018. The pattern of software lease license revenue recognition has changed under ASC 606. Software lease license revenue was recognized ratably over the term of the contract under the previous guidance; however, 50% of the contract is recognized up front at the commencement of the lease under ASC 606. This change in the pattern of revenue recognition, coupled with the recording of deferred revenue to retained earnings at the adoption date, resulted in the changes to the condensed consolidated balance sheet line items as noted in the table above.

Condensed Consolidated Statement of Income	Three Months Ended March 31, 2018
(in thousands, except per share data)	As Reported (ASC 606)		ASC 605		Change
Revenue:
Software licenses	$	110,046	$	154,857	$	(44,811	)
Maintenance and service	172,827		129,712		43,115
Cost of sales:
Software licenses	3,911		8,146		(4,235		)
Maintenance and service	26,341		22,106		4,235
Income tax provision	12,758		12,981		(223		)
Earnings per share:
Basic	$	1.00	$	1.02	$	(0.02	)
Diluted	$	0.98	$	1.00	$	(0.02	)

The impacts to reported software licenses revenue and maintenance and service revenue were primarily due to the PCS portion of lease license contracts now being allocated to maintenance and service revenue under ASC 606. Under the previous guidance, this revenue was reported as software licenses revenue. The decrease to software licenses revenue was partially offset by the upfront recognition of lease license revenue, which would have been recognized ratably over the contract under prior guidance. Consistent with the change in revenue, there was a corresponding reclassification within cost of sales. Costs incurred related to the PCS portion of lease license contracts were reflected in cost of maintenance and service. Under the previous guidance, such costs were reflected within cost of software licenses.

Disaggregation of Revenue

The following table summarizes revenue:

	Three Months Ended March 31,
(in thousands)	2018 (ASC 606)		2018 (ASC 605)		2017 (ASC 605)
Revenue:
Lease licenses	$	48,772	$	101,789	$	93,634
Perpetual licenses	61,274		53,068		48,274
Software licenses	110,046		154,857		141,908
Maintenance	163,896		120,762		104,406
Service	8,931		8,950		7,091
Maintenance and service	172,827		129,712		111,497
Total revenue	$	282,873	$	284,569	$	253,405

Changes in Deferred Revenue

The changes in deferred revenue, inclusive of both current and long-term, are as follows:

(in thousands)	Three Months Ended March 31, 2018
Beginning balance – January 1	$	299,730
Recognition of deferred revenue	(282,873		)
Deferral of revenue	307,978
Currency translation	4,559
Ending balance – March 31	$	329,394

Remaining Performance Obligations, Expected Timing of Satisfaction

Total revenue allocated to remaining performance obligations was $595.0 million as of March 31, 2018 and will be recognized as revenue as follows:

(in thousands)
Next 12 months	$	438,650
Months 13-24	112,580
Months 25-36	40,016
Thereafter	3,763
Total revenue allocated to remaining performance obligations	$	595,009