Segment Reporting

12 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Segment Reporting

(13) Segment Reporting

We are organized into two business segments, Enterprise Service Management and Mainframe Service Management. The ESM segment derives its revenue from our performance management, automation, IT service management and Atrium solution suites, along with professional services revenue derived from consulting, implementation, integration and educational services related to our software products. The MSM segment derives its revenue from solution suites for mainframe data and performance management and enterprise workload automation.

Segment performance is measured based on segment operating income, reflecting segment revenue less direct and allocated indirect segment operating expenses. Direct segment operating expenses primarily include cost of revenue, selling and marketing, research and development and general and administrative expenses that can be specifically identified to a particular segment and are directly controllable by segment management, while allocated indirect segment operating expenses primarily include indirect costs within these operating expense categories that are not specifically identified to a particular segment or controllable by segment management. The indirect operating expenses are allocated to the segments based on budgeted bookings, revenue and other allocation methods that management believes to be reasonable. Our measure of segment operating income does not include the effect of share-based compensation expenses, amortization of acquired technology and other intangible assets or the costs associated with severance, exit costs and related charges, which are collectively included in unallocated operating expenses below. Assets and liabilities are reviewed by management at the consolidated level only.

The following tables summarize segment performance for fiscal 2012, 2011 and 2010:

Year Ended March 31, 2012	Enterprise Service Management		Mainframe Service Management		Consolidated
	(In millions)
Revenue:
License	$	543.3	$	334.5	$	877.8
Maintenance		585.0		495.4		1,080.4
Professional services		213.8		—		213.8
Total revenue		1,342.1		829.9		2,172.0
Direct and allocated indirect segment operating expenses:		1,059.8		332.6		1,392.4
Segment operating income		282.3		497.3		779.6
Unallocated operating expenses						(235.7	)
Other loss, net						(13.9	)
Earnings before income taxes					$	530.0

Year Ended March 31, 2011	Enterprise Service Management		Mainframe Service Management		Consolidated
	(In millions)
Revenue:
License	$	550.9	$	313.6	$	864.5
Maintenance		551.5		472.7		1,024.2
Professional services		176.6		—		176.6
Total revenue		1,279.0		786.3		2,065.3
Direct and allocated indirect segment operating expenses:		998.8		333.8		1,332.6
Segment operating income		280.2		452.5		732.7
Unallocated operating expenses						(199.9	)
Other loss, net						(1.5	)
Earnings before income taxes					$	531.3

Year Ended March 31, 2010	Enterprise Service Management		Mainframe Service Management		Consolidated
	(In millions)
Revenue:
License	$	462.2	$	296.2	$	758.4
Maintenance		550.9		472.8		1,023.7
Professional services		129.1		—		129.1
Total revenue		1,142.2		769.0		1,911.2
Direct and allocated indirect segment operating expenses:		902.2		334.5		1,236.7
Segment operating income		240.0		434.5		674.5
Unallocated operating expenses						(168.4	)
Other loss, net						(1.9	)
Earnings before income taxes					$	504.2

Revenue from external customers and long-lived assets (excluding financial instruments, intangible assets and deferred tax assets) attributed to the United States, our corporate headquarters, and all other countries are:

	Year Ended March 31,
	2012		2011		2010
			(In millions)
Revenue:
United States	$	1,097.8	$	1,063.1	$	1,011.5
International		1,074.2		1,002.2		899.7
	$	2,172.0	$	2,065.3	$	1,911.2

		xxxxxx		xxxxxx
	At March 31,
	2012		2011
	(In millions)
Long-lived assets:
United States	$	72.8	$	81.4
International		43.3		47.8
	$	116.1	$	129.2

We do business with customers in a broad range of industries, including significant business with financial service providers, government agencies and service providers. Our ten largest customers comprised 20% or less of our total revenue in each of fiscal 2012, 2011 and 2010 and represented various industries. No single customer accounted for a material portion of our revenue during any of the past three fiscal years. At March 31, 2012 and 2011, approximately 60% and 46%, respectively, of our cash, cash equivalents and investments was held by our international subsidiaries.