Segment Information

12 Months Ended

Sep. 30, 2012

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 support 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 support thereon, and other services 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 these operating segments are summarized as follows:

	Year ended September 30,
	2013			2012			2011
	(in thousands)
Software Products segment revenue	$	977,523		$	935,472		$	875,511
Services segment revenue	316,018			320,207			291,438
Total revenue	$	1,293,541		$	1,255,679		$	1,166,949
Operating income: (1) (2)
Software Products segment	$	605,963		$	598,344		$	557,879
Services segment (3)	37,131			41,793			22,577
Sales and marketing expenses	(378,771		)	(392,956		)	(353,051		)
General and administrative expenses	(136,999		)	(119,085		)	(110,291		)
Total operating income	$	127,324		$	128,096		$	117,114
Other (expense) income, net	(1,090		)	(7,360		)	(12,566		)
Income before income taxes	$	126,234		$	120,736		$	104,548

(1) We recorded restructuring charges of $52.2 million in 2013. Software Products included $17.7 million; Services included $11.3 million; sales and marketing expenses included $18.1 million; and general and administrative expenses included $5.1 million of the total restructuring charges recorded in 2013. We recorded restructuring charges of $24.9 million in 2012. Software Products included $4.1 million; Services included $4.0 million; sales and marketing expenses included $15.2 million; and general and administrative expenses included $1.6 million of the total restructuring charges recorded in 2012.

(2) The Software Products segment operating income includes depreciation and amortization of $27.3 million, $25.4 million, and $24.8 million in 2013, 2012, and 2011, respectively. The Services segment operating income includes depreciation and amortization of $5.0 million, $3.6 million, and $3.8 million in 2013, 2012, and 2011, respectively.

(3) 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 2011 included immediate recognition of the approximately $5 million estimated loss on this contract and resulted in a reduction of service margins by approximately 2%.

We report revenue by the following three product areas:

• CAD: PTC Creo^®, including PTC Creo Parametric and PTC Creo Elements/Direct^®, and PTC Mathcad^®.

• Extended PLM: our PLM solutions (primarily PTC Windchill^® and PTC Creo View^TM ), our ALM solutions (primarily PTC Integrity^™) and our SCM Solutions (primarily PTC Windchill FlexPLM^®).

• SLM: PTC Arbortext^® and PTC Servigistics^®.

	Year ended September 30,
	2013		2012		2011
	(in thousands)
CAD	$	552,510	$	573,457	$	587,824
Extended PLM	572,313		604,339		503,128
SLM	168,718		77,883		75,997
Total revenue	$	1,293,541	$	1,255,679	$	1,166,949

Data for the geographic regions in which we operate is presented below. Amounts for the years ended September 30, 2012 and 2011 include immaterial reclassifications between geographic regions made to conform to the current year classification.

	Year ended September 30,
	2013		2012		2011
	(in thousands)
Revenue:
Americas (1)	$	522,788	$	479,932	$	429,213
Europe (2)	479,877		480,287		466,540
Pacific Rim	161,587		160,834		147,992
Japan	129,289		134,626		123,204
Total revenue	$	1,293,541	$	1,255,679	$	1,166,949

	September 30,
	2013		2012		2011
	(in thousands)
Long-lived tangible assets:
Americas (3)	$	49,788	$	46,083	$	42,767
Europe	5,557		6,649		6,989
Asia-Pacific	9,307		10,734		12,813
Total long-lived tangible assets	$	64,652	$	63,466	$	62,569

(1) Includes revenue in the United States totaling $485.2 million, $453.2 million and $408.0 million for 2013, 2012 and 2011, respectively.

(2) Includes revenue in Germany totaling $167.2 million, $188.3 million and $173.3 million for 2013, 2012 and 2011, respectively.

(3) Substantially all of the Americas long-lived tangible assets are located in the United States.

Our international revenue is presented based on the location of our customer. We license products to customers worldwide. Our sales and marketing operations outside the United States are conducted principally through our international sales subsidiaries throughout Europe and the Asia-Pacific regions. Intercompany sales and transfers between geographic areas are accounted for at prices that are designed to be representative of unaffiliated party transactions.