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 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 thereon, 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 these operating segments are summarized as follows:

	Year ended September 30,
	2012			2011			2010
	(in thousands)
Software Products segment revenue	$	935,472		$	875,511		$	770,808
Services segment revenue	320,207			291,438			239,241
Total revenue	$	1,255,679		$	1,166,949		$	1,010,049
Operating income: (1)
Software Products segment	$	598,344		$	557,879		$	465,968
Services segment (2)	41,793			22,577			19,214
Sales and marketing expenses	(392,956		)	(353,051		)	(317,532		)
General and administrative expenses	(119,085		)	(110,291		)	(92,875		)
Total operating income	128,096			117,114			74,775
Other income (expense)	(7,360		)	(12,566		)	7,361
Income before income taxes	$	120,736		$	104,548		$	82,136

(1) 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 and in-process research and development charges recorded in 2012.

(2) 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 expect our costs to exceed our revenue by approximately $5 million. Services segment operating income in 2011 includes 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 product group, Desktop and Enterprise. Desktop revenue includes our CAD Solutions, primarily: PTC Creo Parametric, PTC Creo Elements/Direct, PTC Arbortext authoring products and PTC Mathcad. Enterprise revenue includes our PLM solutions, primarily: PTC Windchill, PTC Arbortext enterprise products, PTC Creo View and PTC Integrity.

Amounts for the years ended September 30, 2011 and 2010 presented in the tables below include immaterial reclassifications between geographic regions made to conform to the current year classification.

	Year ended September 30,
	2012		2011		2010
	(in thousands)
Desktop	$	607,049	$	625,086	$	542,291
Enterprise	648,630		541,863		467,758
Total revenue	$	1,255,679	$	1,166,949	$	1,010,049

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

	Year ended September 30,
	2012		2011		2010
	(in thousands)
Revenue:
Americas (1)	$	479,932	$	429,215	$	385,853
Europe (2)	480,287		466,532		388,513
Pacific Rim	160,834		148,000		131,632
Japan	134,626		123,202		104,051
Total revenue	$	1,255,679	$	1,166,949	$	1,010,049

	September 30,
	2012		2011		2010
	(in thousands)
Long-lived tangible assets:
Americas (3)	$	46,083	$	42,767	$	38,417
Europe	5,379		5,693		5,753
Asia-Pacific	12,004		14,109		13,894
Total long-lived tangible assets	$	63,466	$	62,569	$	58,064

(1) Includes revenue in the United States totaling $453.2 million, $408.0 million and $370.8 million for 2012, 2011 and 2010, respectively.

(2) Includes revenue in Germany totaling $188.3 million, $173.3 million and $143.8 million for 2012, 2011 and 2010, 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 region. Intercompany sales and transfers between geographic areas are accounted for at prices that are designed to be representative of unaffiliated party transactions.