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 our operating segments are summarized as follows:


	Three months ended						Nine months ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
	(in thousands)
Revenue:
Total Software Products segment revenue	$	212,137		$	185,336		$	617,203		$	563,746
Total Services segment revenue		79,646			57,662			210,321			178,237

Total revenue	$	291,783		$	242,998		$	827,524		$	741,983

Operating income:
Software Products segment	$	134,157		$	109,708		$	385,881		$	334,282
Services segment (1)		11,361			4,146			14,853			14,037
Sales and marketing expenses		(89,106	)		(79,121	)		(254,790	)		(232,856	)
General and administrative expenses		(31,882	)		(22,755	)		(80,078	)		(69,633	)

Total operating income	$	24,530		$	11,978		$	65,866		$	45,830

(1)

The improvement in operating income in the third quarter of 2011 compared to the third quarter of 2010 is due to higher revenue from our computer-based training products. 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 the first nine months of 2011 includes 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 CAx Solutions, primarily: Creo Elements/Pro, Creo Elements/Direct, Mathcad and Arbortext authoring products. Enterprise revenue includes our PLM solutions, primarily: Windchill, Arbortext enterprise products, Creo Elements/View and MKS Integrity. Data for the three and nine months ended July 3, 2010 includes immaterial reclassifications between product groups made to conform to the current classification.


	Three months ended				Nine months ended
	July 2, 2011		July 3, 2010		July 2, 2011		July 3, 2010
	(in thousands)
Revenue:
Americas (1)	$	104,618	$	82,450	$	299,111	$	273,547
Europe (2)		120,302		101,838		334,132		294,536
Pacific Rim		36,873		33,156		106,694		95,473
Japan		29,990		25,554		87,587		78,427

Total revenue	$	291,783	$	242,998	$	827,524	$	741,983

(1)	Includes revenue in the United States totaling $98.7 million and $78.6 million for the three months ended July 2, 2011 and July 3, 2010, respectively, and $284.0 million and $263.6 million for the nine months ended July 2, 2011 and July 3, 2010, respectively.

(2)	Includes revenue in Germany totaling $48.9 million and $44.5 million for the three months ended July 2, 2011 and July 3, 2010, respectively, and $120.6 million and $109.8 million for the nine months ended July 2, 2011 and July 3, 2010, respectively.