Segment Information

9 Months Ended

Jul. 02, 2016

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 three operating and reportable segments: (1) the Solutions Group, which includes license, subscription, support and cloud services revenue for our core CAD, SLM and ePLM products; (2) the Technology Platform Group, which includes license, subscription, support and cloud services revenue for our IoT, analytics and augmented reality solutions, and (3) Professional Services, which includes consulting, implementation and training revenue. Our reported segment profit includes revenue from third party sales of our products and services, less direct controllable segment costs. Direct costs of the segments include certain costs of revenue, research and development and certain marketing costs. Costs excluded from segment margin include cost of revenue, selling expenses, corporate marketing and general and administrative costs that are incurred in support of all of our segments and are not specifically allocated to our segments for management reporting. Additionally, the segment profit does not include stock-based compensation, amortization of intangible assets, restructuring charges and certain other identified costs that we do not allocate to the segments for purposes of evaluating their operational performance.

The revenue and profit attributable to our operating segments are summarized below. We do not produce asset information by reportable segment; therefore, it is not reported.

	Three months ended					Nine months ended
	July 2, 2016			July 4, 2015		July 2, 2016			July 4, 2015
	(in thousands)
Solutions Group
Revenue	$	217,673		$	229,157	$	652,985		$	726,679
Direct costs	44,882			54,583		140,465			174,109
Profit	172,791			174,574		512,520			552,570
Technology Platform Group
Revenue	20,678			20,456		51,034			38,213
Direct costs	22,255			7,479		61,478			20,340
Profit (loss)	(1,577		)	12,977		(10,444		)	17,873
Professional Services
Revenue	50,301			53,500		148,277			177,782
Direct costs	42,393			44,703		124,832			151,521
Profit	7,908			8,797		23,445			26,261
Total segment revenue	288,652			303,113		852,296			942,674
Total segment costs	109,530			106,765		326,775			345,970
Total segment profit	179,122			196,348		525,521			596,704
Other unallocated operating expenses	168,711			170,348		484,919			490,853
Restructuring charges	2,815			4,393		44,541			42,625
Total operating income (loss)	7,596			21,607		(3,939		)	63,226
Interest and other expense, net	8,300			3,668		19,880			10,492
Income (loss) before income taxes	$	(704	)	$	17,939	$	(23,819	)	$	52,734

(1) We recorded restructuring charges of $2.8 million and $44.5 million, respectively, in the third quarter and first nine months of 2016. Solutions Group included $1.4 million and $16.3 million, respectively; Technology Platform Group included $0.6 million and $1.3 million, respectively; Professional Services included $0.3 million and $4.8 million, respectively; and unallocated departments included $0.5 million and $22.1 million, respectively, of these restructuring charges. We recorded restructuring charges of $4.4 million and $42.6 million, respectively, in the third quarter and first nine months of 2015. Solutions Group included $1.0 million and $8.5 million, respectively; Technology Platform Group included $0.1 million and $0.3 million, respectively; Professional Services included $0.3 million and $10.9 million, and unallocated departments included $3.0 million and $22.9 million, respectively, of these restructuring charges.