Geographic And Segment Reporting

9 Months Ended

Sep. 30, 2011

Geographic And Segment Reporting

Geographic And Segment Reporting

NOTE 4 — GEOGRAPHIC AND SEGMENT REPORTING

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by our chief operating decision maker, or decision-making group, in assessing performance and deciding how to allocate resources. Our reportable operating segments are Licenses, Maintenance Services and Professional Services. The Licenses segment develops and markets licenses to use our software products. The Maintenance Services segment provides after-sale support for software products. The Professional Services segment provides consulting and fee-based training related to our software products.

Previously, we had two reportable operating segments, Licenses and Services. During the first quarter of 2011, we revised our reportable operating segments by separating our Services segment into our Professional Services segment and our Maintenance Services segment. We separated these two previously aggregated segments because the Professional Services component has experienced significant growth and has become more distinct and robust relative to all Services, and also has become more separately managed and analyzed. Previously reported segment data have been reclassified to conform to the 2011 presentation. Goodwill previously allocated to the Services segment has been reallocated between the Maintenance Services and Professional Services segments using a relative fair value approach.

We do not separately allocate operating expenses to these segments, nor do we allocate specific assets to these segments. Therefore, segment information reported includes only revenues, cost of revenues, and gross profit.

Reportable segment data for the three months and nine months ended September 30, 2011 and 2010 is as follows (in thousands):

	Licenses		Maintenance Services		Professional Services		Total
Three months ended September 30, 2011:
Revenues	$	87,968	$	117,131	$	15,301	$	220,400
Cost of revenues		8,965		10,605		11,844		31,414
Gross profit	$	79,003	$	106,526	$	3,457	$	188,986
Three months ended September 30, 2010:
Revenues	$	80,582	$	100,731	$	11,729	$	193,042
Cost of revenues		6,570		7,985		8,922		23,477
Gross profit	$	74,012	$	92,746	$	2,807	$	169,565
Nine months ended September 30, 2011:
Revenues	$	232,334	$	335,474	$	43,719	$	611,527
Cost of revenues		23,198		31,086		34,963		89,247
Gross profit	$	209,136	$	304,388	$	8,756	$	522,280
Nine months ended September 30, 2010:
Revenues	$	222,663	$	295,019	$	32,633	$	550,315
Cost of revenues		18,742		22,622		24,645		66,009
Gross profit	$	203,921	$	272,397	$	7,988	$	484,306

Revenues are attributed to geographic areas based on the location of the Quest entity from which the products or services were invoiced. Revenues and long-lived assets concerning principal geographic areas in which we operate are as follows (in thousands):

	United States		Ireland		Other International  (2)		Total
Three months ended/As of Sep. 30, 2011:
Revenues	$	130,556	$	37,890	$	51,954	$	220,400
Long-lived assets (1)		115,226		9,859		15,424		140,509
Three months ended/As of Sep. 30, 2010:
Revenues	$	126,506	$	22,892	$	43,644	$	193,042
Long-lived assets (1)		86,011		6		12,998		99,015
Nine months ended/As of Sep. 30, 2011:
Revenues	$	363,455	$	105,213	$	142,859	$	611,527
Long-lived assets (1)		115,226		9,859		15,424		140,509
Nine months ended/As of Sep. 30, 2010:
Revenues	$	346,797	$	66,439	$	137,079	$	550,315
Long-lived assets (1)		86,011		6		12,998		99,015

(1) Includes property and equipment, net and other assets

(2) No single location within Other International accounts for greater than 10% of total revenues