Segment Information

3 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Segment Information

Segment Information

We operate within a single industry segment—computer software and related services. Operating segments as defined under GAAP are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our President and Chief Executive Officer. We have two operating and reportable segments: (1) Software Products, which includes license and related maintenance revenue (including updates and technical support) for all our products except training-related products; and (2) Services, which includes consulting, implementation, training, computer-based training products, including maintenance on these products, and other support revenue. In our consolidated statements of operations, maintenance revenue is included in service revenue. We do not allocate sales and marketing or administrative expenses to our operating segments as these activities are managed on a consolidated basis.

The revenue and operating income attributable to our operating segments are summarized as follows:

	Three months ended
	December 31, 2011			January 1, 2011
	(in thousands)
Revenue:
Total Software Products segment revenue	$	236,963		$	201,910
Total Services segment revenue	81,313			64,642
Total revenue	$	318,276		$	266,552
Operating income:
Software Products segment	$	151,961		$	126,519
Services segment (1)	7,894			(1,404		)
Sales and marketing expenses	(97,778		)	(84,521		)
General and administrative expenses	(29,572		)	(23,484		)
Total operating income	$	32,505		$	17,110

(1) In the first quarter of 2011, we made a strategic decision to enter into a contract with a customer in the automotive industry, for which we expected our costs to exceed our revenue by approximately $5 million. Services segment operating income in the first three months of 2011 included immediate recognition of the approximately 5 million estimated loss on this contract.

We report revenue by product group, Desktop and Enterprise. Desktop revenue includes our CAD Solutions, primarily: Creo Parametric, Creo Elements/Direct, Mathcad and Arbortext authoring products. Enterprise revenue includes our PLM solutions, primarily: Windchill, Arbortext enterprise products, Creo View and Integrity. Data for the three months ended January 1, 2011 includes immaterial reclassifications between product groupings made to conform to the current classification.

	Three months ended
	December 31, 2011		January 1, 2011
	(in thousands)
Revenue:
Desktop	$	153,863	$	146,256
Enterprise	164,413		120,296
Total revenue	$	318,276	$	266,552

Data for the geographic regions in which we operate is presented below.

	Three months ended
	December 31, 2011		January 1, 2011
	(in thousands)
Revenue:
Americas (1)	$	117,490	$	100,093
Europe (2)	133,175		107,876
Pacific Rim	37,250		33,612
Japan	30,361		24,971
Total revenue	$	318,276	$	266,552

_________________

(1) Includes revenue in the United States totaling $110.7 million and $95.5 million for the three months ended December 31, 2011 and January 1, 2011, respectively.

(2) Includes revenue in Germany totaling $56.2 million and $33.3 million for the three months ended December 31, 2011 and January 1, 2011, respectively.