FORM 10-K
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Massachusetts
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04-2866152
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.01 par value per share
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NASDAQ Global Select Market
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Large Accelerated Filer
þ
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Accelerated Filer
o
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Non-accelerated Filer
o
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Smaller Reporting Company
o
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(Do not check if a smaller reporting company)
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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ITEM 1.
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Business
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ITEM 1A.
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Risk Factors
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•
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a high percentage of our revenue historically has been generated in the third month of each fiscal quarter and any failure to receive, complete or process orders at the end of any quarter could cause us to fall short of our revenue targets;
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•
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a significant percentage of our revenue comes from transactions with large customers, which tend to have long lead times that are less predictable;
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•
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our operating expenses are largely fixed in the short term and are based on expected revenues and any failure to achieve our revenue targets could cause us to fall short of our earnings targets as well;
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•
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our mix of license and service revenues can vary from quarter to quarter, creating variability in our operating margins;
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•
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because a significant portion of our revenue comes from outside the U.S. and a significant portion of our expense structure is located internationally, shifts in foreign currency exchange rates could adversely affect our reported results; and
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•
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we may incur significant expenses in a quarter in connection with corporate development initiatives, restructuring efforts or our investigation, defense or settlement of legal actions that would increase our operating expenses and reduce our earnings for the quarter in which those expenses are incurred.
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•
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larger companies that offer PLM, SLM, SCM, CAD and/or ALM solutions;
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•
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larger, more well-known enterprise software providers who have extended, or may seek to extend, the functionality of their products to encompass PLM or who may develop and/or purchase PLM technology; and
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•
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other vendors of various CAD, PLM, SLM, ALM and SCM point solutions.
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•
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difficulties managing an acquired company’s technologies or lines of business or entering new markets where we have limited or no prior experience or where competitors may have stronger market positions;
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•
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unanticipated operating difficulties in connection with the acquired entities, including potential declines in revenue of the acquired entity;
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•
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failure to achieve the expected return on our investments which could adversely affect our business or operating results and potentially cause impairment to assets that we recorded as a part of an acquisition including intangible assets and goodwill;
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•
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diversion of management and employee attention;
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•
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loss of key personnel;
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•
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assumption of unanticipated legal or financial liabilities;
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•
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significant increases in our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; and
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•
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if we were to issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease.
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•
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changes in tax laws, regulations, and interpretations in multiple jurisdictions in which we operate;
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•
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assessments, and any related tax interest or penalties, by taxing authorities;
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•
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changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;
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•
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changes to the financial accounting rules for income taxes;
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•
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unanticipated changes in tax rates; and
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•
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changes to a valuation allowance on net deferred tax assets, if any.
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ITEM 1B.
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Unresolved Staff Comments
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ITEM 2.
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Properties
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ITEM 3.
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Legal Proceedings
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ITEM 4.
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Mine Safety Disclosures
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ITEM 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Period (1)
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Total Number of Shares (or Units) Purchased
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Average Price Paid per Share (or Unit)
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Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
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Approximate
Dollar Value of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or Programs
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June 30 - July 27, 2013
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—
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—
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—
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$45,087,499(2)
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July 28 - August 24, 2013
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—
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—
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—
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$45,087,499(2)
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August 25 - September 30, 2013
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709,076
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$
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28.15
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709,076
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$100,000,000(2)
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Total
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709,076
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$
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28.15
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709,076
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$100,000,000(2)
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ITEM 6.
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Selected Financial Data
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ITEM 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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2013
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2012
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Percent Change 2012 to 2013
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2011
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Percent Change 2011 to 2012
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||||||||||||||
Actual
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Constant
Currency
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Actual
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Constant
Currency
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(Dollar amounts in millions, except per share data)
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License revenue
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$
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344.2
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$
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348.4
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(1
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)%
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1
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%
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$
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342.1
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2
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%
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4
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%
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Service revenue
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294.7
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295.3
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—
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%
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1
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%
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267.1
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11
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%
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13
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%
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|||
Support revenue
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654.7
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611.9
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7
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%
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9
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%
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557.7
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10
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%
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12
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%
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|||
Total revenue
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1,293.5
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1,255.7
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3
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%
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4
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%
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1,166.9
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8
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%
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10
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%
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|||
Total costs and expenses (1)
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1,166.2
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1,127.6
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3
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%
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4
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%
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1,049.8
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7
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%
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9
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%
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|||
Operating income (1)
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$
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127.3
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$
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128.1
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(1
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)%
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7
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%
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$
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117.1
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9
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%
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15
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%
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Non-GAAP operating income (1)
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$
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286.3
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$
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246.8
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16
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%
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20
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%
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$
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206.6
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20
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%
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23
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%
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Operating margin (1)
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9.8
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%
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10.2
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%
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10.0
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%
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|||||||
Non-GAAP operating margin (1)
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22.1
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%
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19.6
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%
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17.7
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%
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GAAP diluted earnings(loss) per share (2)
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$
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1.19
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$
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(0.30
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)
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$
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0.71
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Non-GAAP diluted earnings per share (2)
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$
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1.81
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$
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1.51
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$
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1.26
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Cash flow from operations (3)
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$
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224.7
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$
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218.0
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$
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78.7
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(1)
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Costs and expenses in 2013, included $52.2 million of restructuring charges and $9.9 million of acquisition-related costs. Costs and expenses in 2012 included $24.9 million of restructuring charges and $3.8 million of acquisition-related costs compared to $7.8 million of acquisition-related costs in 2011. These restructuring and acquisition-related costs have been excluded from non-GAAP operating income. In the first quarter of 2011, we entered into a strategic contract with an automotive customer for which we expected costs to exceed revenue by approximately $5 million. This loss was recorded in the first quarter of 2011 and resulted in a decrease in GAAP and non-GAAP operating income of approximately $5 million in 2011.
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(2)
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GAAP earnings per share in 2013 includes (i) non-cash tax benefits of $36.7 million related to the release of a portion of the valuation allowance as a result of deferred tax liabilities established for acquisitions recorded in 2013, (ii) tax benefits of $3.2 million relating to the final resolution of a long standing tax litigation matter and completion of an international jurisdiction tax audit, (iii) a non-cash tax benefit of $7.9 million related to the release of a portion of the valuation allowance in the U.S. as a result of a pension gain (decrease in unrecognized actuarial loss) recorded in accumulated other comprehensive income and (iv) a $2.6 million benefit relating to a tax audit in a foreign jurisdiction of an acquired company. Earnings per share in 2013 also includes a gain on investment of $0.6 million, and a legal settlement gain of $5.1 million. The GAAP loss per share in 2012 includes a non-cash net tax charge of $124.5 million recorded in the fourth quarter to establish a valuation allowance against our U.S. net deferred tax assets and the following additional items: $5.4 million, net primarily related to foreign tax credits which would be fully realized on a non-GAAP basis; $3.3 million primarily related to acquired legal entity integration activities; and $1.4 million related to the impact from a reduction in the statutory tax rate in Japan on deferred tax assets from a litigation settlement. GAAP earnings per share in 2011 includes foreign currency losses of $4.4 million related to our acquisition of MKS; $0.7 million of foreign currency losses related to a litigation settlement; and a non-cash tax provision of $1.9 million in connection with a legal entity reorganization. The items above have been excluded from non-GAAP diluted earnings per share for each respective period.
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(3)
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In the first quarter of 2011, we used $48 million, net, of cash in connection with the resolution of a litigation matter.
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Year ended September 30,
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2013
|
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Percent Change 2012 to 2013
|
|
2012
|
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Percent Change 2011 to 2012
|
|
2011
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|||||||||||||||||||||||
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$ Amount
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% of Total Revenue
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Actual
|
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Constant Currency
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$ Amount
|
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% of Total Revenue
|
|
Actual
|
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Constant Currency
|
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$ Amount
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% of Total Revenue
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|||||||||||||
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(Dollar amounts in millions)
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License revenue
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$
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344.2
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|
|
27
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%
|
|
(1
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)%
|
|
1
|
%
|
|
$
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348.4
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|
|
28
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%
|
|
2
|
%
|
|
4
|
%
|
|
$
|
342.1
|
|
|
29
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%
|
Service revenue
|
294.7
|
|
|
23
|
%
|
|
—
|
%
|
|
1
|
%
|
|
295.3
|
|
|
23
|
%
|
|
11
|
%
|
|
13
|
%
|
|
267.1
|
|
|
23
|
%
|
|||
Support revenue
|
654.7
|
|
|
50
|
%
|
|
7
|
%
|
|
9
|
%
|
|
611.9
|
|
|
49
|
%
|
|
10
|
%
|
|
12
|
%
|
|
557.7
|
|
|
48
|
%
|
|||
Total revenue
|
$
|
1,293.5
|
|
|
100
|
%
|
|
3
|
%
|
|
4
|
%
|
|
$
|
1,255.7
|
|
|
100
|
%
|
|
8
|
%
|
|
10
|
%
|
|
$
|
1,166.9
|
|
|
100
|
%
|
Revenue by Solution
|
Year ended September 30,
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||||||||||||||||||||||
|
|
|
Percent Change
|
|
|
|
Percent Change
|
|
|
||||||||||||||
|
2013
|
|
Actual
|
|
Constant Currency
|
|
2012
|
|
Actual
|
|
Constant Currency
|
|
2011
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||||
CAD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
License revenue
|
$
|
150.4
|
|
|
(5
|
)%
|
|
(4
|
)%
|
|
$
|
159.0
|
|
|
(9
|
)%
|
|
(7
|
)%
|
|
$
|
174.2
|
|
Service revenue
|
24.0
|
|
|
(21
|
)%
|
|
(19
|
)%
|
|
30.4
|
|
|
(17
|
)%
|
|
(15
|
)%
|
|
36.6
|
|
|||
Support revenue
|
378.1
|
|
|
(2
|
)%
|
|
—
|
%
|
|
384.0
|
|
|
2
|
%
|
|
4
|
%
|
|
377.0
|
|
|||
Total revenue
|
$
|
552.5
|
|
|
(4
|
)%
|
|
(2
|
)%
|
|
$
|
573.5
|
|
|
(2
|
)%
|
|
—
|
%
|
|
$
|
587.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Extended PLM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
License revenue
|
$
|
149.8
|
|
|
(13
|
)%
|
|
(11
|
)%
|
|
$
|
171.3
|
|
|
20
|
%
|
|
21
|
%
|
|
$
|
143.0
|
|
Service revenue
|
205.9
|
|
|
(12
|
)%
|
|
(11
|
)%
|
|
233.0
|
|
|
14
|
%
|
|
17
|
%
|
|
204.9
|
|
|||
Support revenue
|
216.6
|
|
|
8
|
%
|
|
9
|
%
|
|
200.0
|
|
|
29
|
%
|
|
31
|
%
|
|
155.2
|
|
|||
Total revenue
|
$
|
572.3
|
|
|
(5
|
)%
|
|
(4
|
)%
|
|
$
|
604.3
|
|
|
20
|
%
|
|
23
|
%
|
|
$
|
503.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SLM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
License revenue
|
$
|
44.1
|
|
|
145
|
%
|
|
147
|
%
|
|
$
|
18.0
|
|
|
(28
|
)%
|
|
(26
|
)%
|
|
$
|
24.9
|
|
Service revenue
|
64.7
|
|
|
103
|
%
|
|
104
|
%
|
|
31.9
|
|
|
24
|
%
|
|
25
|
%
|
|
25.6
|
|
|||
Support revenue
|
60.0
|
|
|
115
|
%
|
|
116
|
%
|
|
28.0
|
|
|
10
|
%
|
|
12
|
%
|
|
25.5
|
|
|||
Total revenue
|
$
|
168.7
|
|
|
117
|
%
|
|
118
|
%
|
|
$
|
77.9
|
|
|
2
|
%
|
|
4
|
%
|
|
$
|
76.0
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(Dollar amounts in millions)
|
||||||||||
License and/or service revenue of $1 million or more recognized from individual customers in a quarter
|
$
|
271.2
|
|
|
$
|
274.3
|
|
|
$
|
270.3
|
|
% of total license and service revenue
|
42
|
%
|
|
43
|
%
|
|
44
|
%
|
|
2013
|
|
|
|
Percent Change
|
|
2012
|
|
|
|
Percent Change
|
|
2011
|
|
|||||||||||||||||
% of Total Revenue
|
|
Actual
|
|
Constant
Currency
|
|
% of Total Revenue
|
|
Actual
|
|
Constant
Currency
|
|
% of Total Revenue
|
|||||||||||||||||||
|
(Dollar amounts in millions)
|
|
|||||||||||||||||||||||||||||
Revenue by region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Americas
|
$
|
522.8
|
|
|
40
|
%
|
|
9
|
%
|
|
9
|
%
|
|
$
|
479.9
|
|
|
38
|
%
|
|
12
|
%
|
|
12
|
%
|
|
$
|
429.2
|
|
37
|
%
|
Europe
|
$
|
479.9
|
|
|
37
|
%
|
|
—
|
%
|
|
(1
|
)%
|
|
$
|
480.3
|
|
|
38
|
%
|
|
3
|
%
|
|
9
|
%
|
|
$
|
466.5
|
|
40
|
%
|
Pacific Rim
|
$
|
161.6
|
|
|
13
|
%
|
|
—
|
%
|
|
—
|
%
|
|
$
|
160.8
|
|
|
13
|
%
|
|
9
|
%
|
|
10
|
%
|
|
$
|
148.0
|
|
13
|
%
|
Japan
|
$
|
129.3
|
|
|
10
|
%
|
|
(4
|
)%
|
|
12
|
%
|
|
$
|
134.6
|
|
|
11
|
%
|
|
9
|
%
|
|
6
|
%
|
|
$
|
123.2
|
|
10
|
%
|
|
2013
|
|
Percent
Change
|
|
2012
|
|
Percent
Change
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||
Gross margin
|
$
|
920.5
|
|
|
4
|
%
|
|
$
|
883.6
|
|
|
9
|
%
|
|
$
|
810.2
|
|
Non-GAAP gross margin
|
951.6
|
|
|
4
|
%
|
|
910.8
|
|
|
9
|
%
|
|
835.9
|
|
|||
Gross margin as a % of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
License
|
90
|
%
|
|
|
|
91
|
%
|
|
|
|
92
|
%
|
|||||
Service
|
12
|
%
|
|
|
|
10
|
%
|
|
|
|
2
|
%
|
|||||
Support
|
88
|
%
|
|
|
|
88
|
%
|
|
|
|
88
|
%
|
|||||
Gross margin as a % of total revenue
|
71
|
%
|
|
|
|
70
|
%
|
|
|
|
69
|
%
|
|||||
Non-GAAP gross margin as a % of total non-GAAP revenue
|
73
|
%
|
|
|
|
72
|
%
|
|
|
|
71
|
%
|
|
2013
|
|
Percent
Change
|
|
|
2012
|
|
Percent
Change
|
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||
Cost of license revenue
|
$
|
33.0
|
|
|
8
|
%
|
|
|
$
|
30.6
|
|
|
6
|
%
|
|
|
$
|
28.8
|
|
Cost of service revenue
|
259.0
|
|
|
(2
|
)%
|
|
|
265.5
|
|
|
2
|
%
|
|
|
260.7
|
|
|||
Cost of support revenue
|
81.1
|
|
|
7
|
%
|
|
|
76.1
|
|
|
13
|
%
|
|
|
67.3
|
|
|||
Sales and marketing
|
360.6
|
|
|
(5
|
)%
|
|
|
377.8
|
|
|
7
|
%
|
|
|
353.0
|
|
|||
Research and development
|
221.9
|
|
|
3
|
%
|
|
|
215.0
|
|
|
2
|
%
|
|
|
211.4
|
|
|||
General and administrative
|
131.9
|
|
|
12
|
%
|
|
|
117.5
|
|
|
7
|
%
|
|
|
110.3
|
|
|||
Amortization of acquired intangible assets
|
26.5
|
|
|
30
|
%
|
|
|
20.3
|
|
|
11
|
%
|
|
|
18.3
|
|
|||
Restructuring and other charges
|
52.2
|
|
|
109
|
%
|
|
|
24.9
|
|
|
|
|
|
—
|
|
||||
Total costs and expenses
|
$
|
1,166.2
|
|
|
3
|
%
|
(1)
|
|
$
|
1,127.6
|
|
|
7
|
%
|
(1)
|
|
$
|
1,049.8
|
|
Total headcount at end of period
|
6,000
|
|
|
2
|
%
|
|
|
5,897
|
|
|
(4
|
)%
|
|
|
6,122
|
|
|
(1)
|
On a consistent foreign currency basis from the prior period, total costs and expenses increased 4% from 2012 to 2013 and increased 9% from 2011 to 2012.
|
•
|
restructuring charges of $52.2 million in 2013 compared to $24.9 million in 2012, primarily for severance and other related costs associated with the termination of approximately 550 employees;
|
•
|
an increase in employee headcount as a result of our acquisitions of Servigistics, Enigma and NetIDEAS, which when acquired had a total of approximately 485 employees;
|
•
|
company-wide merit pay increases effective on February 1, 2012 (approximately $11 million on an annualized basis), which resulted in an increase in salary expense across all functional organizations;
|
•
|
acquisition-related costs (included in general and administrative) of $9.9 million, which were $6.0 million higher than 2012; and
|
•
|
increased amortization of acquired intangible assets, primarily related to our acquisition of Servigistics.
|
•
|
restructuring charges of $24.9 million primarily for severance and other related costs associated with the termination of approximately 210 employees;
|
•
|
higher cost of service in support of services revenue growth;
|
•
|
investments in our direct sales force;
|
•
|
an increase of approximately 500 employees in connection with our acquisitions of MKS and 4CS; and
|
•
|
company-wide salary increases effective on February 1, 2012 and 2011 (both salary increases were approximately $11 million on an annualized basis), which resulted in an increase in salary expense across all functional organizations.
|
|
2013
|
|
Percent
Change
|
|
2012
|
|
Percent
Change
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||
Cost of license revenue
|
$
|
33.0
|
|
|
8
|
%
|
|
$
|
30.6
|
|
|
6
|
%
|
|
$
|
28.8
|
|
% of total revenue
|
3
|
%
|
|
|
|
2
|
%
|
|
|
|
2
|
%
|
|||||
% of total license revenue
|
10
|
%
|
|
|
|
9
|
%
|
|
|
|
8
|
%
|
|
2013
|
|
Percent
Change
|
|
2012
|
|
Percent
Change
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||
Cost of service revenue
|
$
|
259.0
|
|
|
(2
|
)%
|
|
$
|
265.5
|
|
|
2
|
%
|
|
$
|
260.7
|
|
% of total revenue
|
20
|
%
|
|
|
|
21
|
%
|
|
|
|
22
|
%
|
|||||
% of total service revenue
|
88
|
%
|
|
|
|
90
|
%
|
|
|
|
98
|
%
|
|||||
Service headcount at end of period
|
1,367
|
|
|
4
|
%
|
|
1,315
|
|
|
(9
|
)%
|
|
1,453
|
|
|
2013
|
|
Percent
Change
|
|
2012
|
|
Percent
Change
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||
Cost of support revenue
|
$
|
81.1
|
|
|
7
|
%
|
|
$
|
76.1
|
|
|
13
|
%
|
|
$
|
67.3
|
|
% of total revenue
|
6
|
%
|
|
|
|
6
|
%
|
|
|
|
6
|
%
|
|||||
% of total service revenue
|
12
|
%
|
|
|
|
12
|
%
|
|
|
|
12
|
%
|
|||||
Support headcount at end of period
|
634
|
|
|
16
|
%
|
|
545
|
|
|
8
|
%
|
|
504
|
|
|
2013
|
|
Percent
Change
|
|
2012
|
|
Percent
Change
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||
Sales and marketing expenses
|
$
|
360.6
|
|
|
(5
|
)%
|
|
$
|
377.8
|
|
|
7
|
%
|
|
$
|
353.0
|
|
% of total revenue
|
28
|
%
|
|
|
|
30
|
%
|
|
|
|
30
|
%
|
|||||
Sales and marketing headcount at end of period
|
1,362
|
|
|
(10
|
)%
|
|
1,508
|
|
|
—
|
%
|
|
1,508
|
|
|
2013
|
|
Percent
Change
|
|
2012
|
|
Percent
Change
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||
Research and development expenses
|
$
|
221.9
|
|
|
3
|
%
|
|
$
|
215.0
|
|
|
2
|
%
|
|
$
|
211.4
|
|
% of total revenue
|
17
|
%
|
|
|
|
17
|
%
|
|
|
|
18
|
%
|
|||||
Research and development headcount at end of period
|
2,001
|
|
|
3
|
%
|
|
1,938
|
|
|
(6
|
)%
|
|
2,060
|
|
|
2013
|
|
Percent
Change
|
|
2012
|
|
Percent
Change
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||
General and administrative
|
$
|
131.9
|
|
|
12
|
%
|
|
$
|
117.5
|
|
|
7
|
%
|
|
$
|
110.3
|
|
% of total revenue
|
10
|
%
|
|
|
|
9
|
%
|
|
|
|
9
|
%
|
|||||
General and administrative headcount at end of period
|
626
|
|
|
8
|
%
|
|
578
|
|
|
(1
|
)%
|
|
585
|
|
|
2013
|
|
Percent
Change
|
|
2012
|
|
Percent
Change
|
|
2011
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||
Amortization of acquired intangible assets
|
$
|
26.5
|
|
|
30
|
%
|
|
$
|
20.3
|
|
|
11
|
%
|
|
$
|
18.3
|
|
% of total revenue
|
2
|
%
|
|
|
|
2
|
%
|
|
|
|
2
|
%
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(Dollar amounts in millions)
|
||||||||||
Restructuring charges
|
$
|
52.2
|
|
|
$
|
24.9
|
|
|
$
|
—
|
|
% of total revenue
|
4
|
%
|
|
2
|
%
|
|
—
|
%
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(Dollar amounts in millions)
|
||||||||||
Foreign currency net losses
|
$
|
(2.0
|
)
|
|
$
|
(5.9
|
)
|
|
$
|
(12.3
|
)
|
Interest income
|
2.9
|
|
|
2.9
|
|
|
3.8
|
|
|||
Interest expense
|
(7.0
|
)
|
|
(4.7
|
)
|
|
(3.3
|
)
|
|||
Other income (expense), net
|
5.0
|
|
|
0.3
|
|
|
(0.8
|
)
|
|||
|
$
|
(1.1
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
(12.6
|
)
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in millions)
|
||||||||||
Pre-tax income
|
$
|
126.2
|
|
|
$
|
120.7
|
|
|
$
|
104.5
|
|
Tax (benefit) provision
|
(17.5
|
)
|
|
156.1
|
|
|
19.1
|
|
|||
Effective income tax rate
|
(14
|
)%
|
|
129
|
%
|
|
18
|
%
|
•
|
non-GAAP revenue—GAAP revenue
|
•
|
non-GAAP gross margin—GAAP gross margin
|
•
|
non-GAAP operating income—GAAP operating income
|
•
|
non-GAAP operating margin—GAAP operating margin
|
•
|
non-GAAP net income—GAAP net income (loss)
|
•
|
non-GAAP diluted earnings per share—GAAP diluted earnings (loss) per share
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(Dollar amounts in millions)
|
||||||||||
GAAP revenue
|
$
|
1,293.5
|
|
|
$
|
1,255.7
|
|
|
$
|
1,166.9
|
|
Fair value of acquired deferred support revenue
|
3.0
|
|
|
2.5
|
|
|
2.6
|
|
|||
Non-GAAP revenue
|
$
|
1,296.5
|
|
|
$
|
1,258.2
|
|
|
$
|
1,169.5
|
|
|
|
|
|
|
|
||||||
GAAP gross margin
|
$
|
920.5
|
|
|
$
|
883.6
|
|
|
$
|
810.2
|
|
Fair value of acquired deferred support revenue
|
3.0
|
|
|
2.5
|
|
|
2.6
|
|
|||
Stock-based compensation
|
9.5
|
|
|
8.9
|
|
|
7.7
|
|
|||
Amortization of acquired intangible assets included in cost of revenue
|
18.6
|
|
|
15.8
|
|
|
15.4
|
|
|||
Non-GAAP gross margin
|
$
|
951.6
|
|
|
$
|
910.8
|
|
|
$
|
835.9
|
|
|
|
|
|
|
|
||||||
GAAP operating income
|
$
|
127.3
|
|
|
$
|
128.1
|
|
|
$
|
117.1
|
|
Fair value of acquired deferred support revenue
|
3.0
|
|
|
2.5
|
|
|
2.6
|
|
|||
Stock-based compensation
|
48.8
|
|
|
51.3
|
|
|
45.4
|
|
|||
Amortization of acquired intangible assets
|
45.1
|
|
|
36.1
|
|
|
33.7
|
|
|||
Acquisition-related charges included in general and administrative expenses
|
9.9
|
|
|
3.8
|
|
|
7.8
|
|
|||
Restructuring charges
|
52.2
|
|
|
24.9
|
|
|
—
|
|
|||
Non-GAAP operating income
|
$
|
286.3
|
|
|
$
|
246.8
|
|
|
$
|
206.6
|
|
|
|
|
|
|
|
||||||
GAAP net income (loss)
|
$
|
143.8
|
|
|
$
|
(35.4
|
)
|
|
$
|
85.4
|
|
Fair value of acquired deferred support revenue
|
3.0
|
|
|
2.5
|
|
|
2.6
|
|
|||
Stock-based compensation
|
48.8
|
|
|
51.3
|
|
|
45.4
|
|
|||
Amortization of acquired intangible assets
|
45.1
|
|
|
36.1
|
|
|
33.7
|
|
|||
Acquisition-related charges included in general and administrative expenses
|
9.9
|
|
|
3.8
|
|
|
7.8
|
|
|||
Restructuring charges
|
52.2
|
|
|
24.9
|
|
|
—
|
|
|||
Non-operating (gain) loss (1)
|
(5.7
|
)
|
|
0.8
|
|
|
5.1
|
|
|||
Income tax adjustments (2)
|
(77.8
|
)
|
|
98.8
|
|
|
(27.8
|
)
|
|||
Non-GAAP net income
|
$
|
219.2
|
|
|
$
|
182.9
|
|
|
$
|
152.2
|
|
GAAP diluted earnings (loss) per share (3)
|
$
|
1.19
|
|
|
$
|
(0.30
|
)
|
|
$
|
0.71
|
|
Stock-based compensation
|
0.40
|
|
|
0.42
|
|
|
0.38
|
|
|||
Amortization of acquired intangible assets
|
0.37
|
|
|
0.30
|
|
|
0.28
|
|
|||
Restructuring charges
|
0.43
|
|
|
0.21
|
|
|
—
|
|
|||
Acquisition-related charges included in general and administrative expenses
|
0.08
|
|
|
0.03
|
|
|
0.06
|
|
|||
Non-operating (gain) loss
|
(0.05
|
)
|
|
0.01
|
|
|
0.04
|
|
|||
Income tax adjustments (2)
|
(0.64
|
)
|
|
0.82
|
|
|
(0.23
|
)
|
|||
All other items identified above
|
0.03
|
|
|
0.02
|
|
|
0.02
|
|
|||
Non-GAAP diluted earnings per share (4)
|
$
|
1.81
|
|
|
$
|
1.51
|
|
|
$
|
1.26
|
|
Operating margin impact of non-GAAP adjustments:
|
|
|
|
|
|
||||||
GAAP operating margin
|
9.8
|
%
|
|
10.2
|
%
|
|
10.0
|
%
|
|||
Fair value of acquired deferred support revenue
|
0.2
|
%
|
|
0.2
|
%
|
|
0.2
|
%
|
|||
Stock-based compensation
|
3.8
|
%
|
|
4.1
|
%
|
|
3.9
|
%
|
|||
Amortization of acquired intangible assets
|
3.5
|
%
|
|
2.9
|
%
|
|
2.9
|
%
|
|||
Acquisition-related charges
|
0.8
|
%
|
|
0.3
|
%
|
|
0.7
|
%
|
|||
Restructuring charges
|
4.0
|
%
|
|
2.0
|
%
|
|
—
|
%
|
|||
Non-GAAP operating margin
|
22.1
|
%
|
|
19.6
|
%
|
|
17.7
|
%
|
(1)
|
Non-operating gain (loss) adjustments:
In 2013, we recorded a $0.6 million gain on an investment related to an acquisition and a legal settlement gain of $5.1 million. In 2012, we recorded $0.8 million of foreign currency losses related to MKS legal entity mergers. In 2011, in connection with our acquisition of MKS, we entered into forward contracts to purchase CDN$292 million (equivalent to approximately $305 million when the contracts were entered into). We entered into these forward contracts to reduce our foreign currency exposure related to changes in the Canadian to U.S. Dollar exchange rate from the time we entered into the agreement to acquire MKS (the purchase price was in Canadian Dollars) and the closing date. We realized foreign currency losses of $4.4 million in 2011, recorded as other expense, related to the acquisition of MKS. In 2011, we recorded $0.7 million of foreign currency losses related to a litigation settlement in Japan.
|
(2)
|
Income tax adjustments
reflect the tax effects of non-GAAP adjustments which are calculated by applying the applicable tax rate by jurisdiction to the non-GAAP adjustments listed above, and also include any identified tax items. In the fourth quarter of 2012, a valuation allowance was established against our U.S. net deferred tax assets. As the U.S. is profitable on a non-GAAP basis, the 2013 non-GAAP tax provision is being calculated assuming there is no U.S. valuation allowance. Additionally, income tax adjustments in 2013 include non-cash tax benefits of $36.7 million related to the release of a portion of the valuation allowance as a result of deferred tax liabilities established for acquisitions recorded in 2013; tax benefits of $3.2 million relating to the final resolution of a long standing tax litigation and completion of an international jurisdiction tax audit; a non-cash tax benefit of $7.9 million related to the release of a portion of the valuation allowance relating to the accounting for our U.S. pension plan (decrease in unrecognized actuarial loss results in a gain recorded in accumulated other comprehensive income); and a $2.6 million benefit relating to a tax audit in a foreign jurisdiction of an acquired company. Income tax adjustments in 2012 include a non-cash net tax charge of $124.5 million to establish a valuation allowance against our U.S. net deferred tax assets; $5.4 million, net primarily related to foreign tax credits which would be fully realized on a non-GAAP basis; $3.3 million, net, primarily related to a $4.2 million charge as a result of acquired legal entity integration activities; and $1.4 million related to the impact from a reduction in the statutory tax rate in Japan on deferred tax assets from a litigation settlement. Income tax adjustments in 2011 includes a non-cash tax provision of $1.9 million in connection with legal entity reorganizations.
|
(3)
|
GAAP weighted average shares outstanding for 2012 of 118.7 million shares excludes the effect of stock-based compensation awards due to a GAAP net loss in 2012.
|
(4)
|
Diluted earnings per share impact of non-GAAP adjustments is calculated by dividing the dollar amount of the non-GAAP adjustment by the diluted weighted average shares outstanding for the respective year. Non-GAAP weighted average shares for 2012 of 121.0 million shares includes the dilutive effect of stock-based compensation awards of 2.3 million shares due to non-GAAP net income in 2012.
|
•
|
revenue recognition;
|
•
|
accounting for income taxes;
|
•
|
valuation of assets and liabilities acquired in business combinations;
|
•
|
valuation of goodwill;
|
•
|
accounting for pensions; and
|
•
|
legal contingencies.
|
•
|
determining whether collection is probable;
|
•
|
assessing whether the fee is fixed or determinable;
|
•
|
determining whether service arrangements, including modifications and customization of the underlying software, are not essential to the functionality of the licensed software and thus would result in the revenue for license and service elements of an agreement being recorded separately; and
|
•
|
determining the fair value of services and support elements included in multiple-element arrangements, which is the basis for allocating and deferring revenue for such services and support.
|
•
|
future expected cash flows from software license sales, customer support agreements, customer contracts and related customer relationships and acquired developed technologies and trademarks and trade names;
|
•
|
expected costs to develop the in-process research and development into commercially viable products and estimating cash flows from the projects when completed;
|
•
|
the acquired company’s brand awareness and market position, as well as assumptions about the period of time the acquired brand will continue to be used by the combined company; and
|
•
|
discount rates used to determine the present value of estimated future cash flows.
|
|
September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Cash and cash equivalents
|
$
|
241,913
|
|
|
$
|
489,543
|
|
|
$
|
167,878
|
|
Activity for the year included the following:
|
|
|
|
|
|
||||||
Cash provided by operating activities
|
$
|
224,683
|
|
|
$
|
217,975
|
|
|
$
|
78,698
|
|
Cash used by investing activities
|
(274,450
|
)
|
|
(31,633
|
)
|
|
(307,843
|
)
|
|||
Cash (used) provided by financing activities
|
(196,524
|
)
|
|
134,663
|
|
|
150,420
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Acquisitions of businesses, net of cash acquired
|
$
|
(245,843
|
)
|
|
$
|
(220
|
)
|
|
$
|
(280,026
|
)
|
Additions to property and equipment
|
(29,328
|
)
|
|
(31,413
|
)
|
|
(27,817
|
)
|
|||
Other
|
721
|
|
|
—
|
|
|
—
|
|
|||
|
$
|
(274,450
|
)
|
|
$
|
(31,633
|
)
|
|
$
|
(307,843
|
)
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Borrowings under revolving credit facility
|
$
|
—
|
|
|
$
|
230,000
|
|
|
$
|
250,000
|
|
Repayments of borrowings under revolving credit facility
|
(111,875
|
)
|
|
(60,000
|
)
|
|
(50,000
|
)
|
|||
Repurchases of common stock
|
(74,871
|
)
|
|
(34,953
|
)
|
|
(54,921
|
)
|
|||
Proceeds from issuance of common stock
|
4,884
|
|
|
21,210
|
|
|
24,756
|
|
|||
Payments of withholding taxes in connection with vesting of stock-based awards
|
(14,996
|
)
|
|
(20,967
|
)
|
|
(22,520
|
)
|
|||
Excess tax benefits from stock-based awards
|
334
|
|
|
1,324
|
|
|
5,398
|
|
|||
Other
|
—
|
|
|
(1,951
|
)
|
|
(2,293
|
)
|
|||
|
$
|
(196,524
|
)
|
|
$
|
134,663
|
|
|
$
|
150,420
|
|
•
|
a leverage ratio, defined as consolidated funded indebtedness to consolidated trailing four quarters EBITDA, of no greater than 2.50 to 1.00 at any time; and
|
•
|
a fixed charge coverage ratio, defined as the ratio of consolidated trailing four quarters EBITDA less consolidated capital expenditures to consolidated fixed charges, of no less than 3.50 to 1.00 at any time.
|
|
Payments due by period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Credit facility (1)
|
$
|
273.1
|
|
|
$
|
19.3
|
|
|
$
|
45.4
|
|
|
$
|
208.4
|
|
|
$
|
—
|
|
Operating leases (2)
|
198.8
|
|
|
40.9
|
|
|
63.7
|
|
|
41.4
|
|
|
52.8
|
|
|||||
Purchase obligations (3)
|
33.4
|
|
|
21.1
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|||||
Pension liabilities (4)
|
50.1
|
|
|
6.6
|
|
|
11.7
|
|
|
9.8
|
|
|
22.0
|
|
|||||
Unrecognized tax benefits (5)
|
13.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
569.1
|
|
|
$
|
87.9
|
|
|
$
|
133.1
|
|
|
$
|
259.6
|
|
|
$
|
74.8
|
|
(1)
|
Credit facility amounts above include required principal repayments and interest and commitment fees based on the balance outstanding as of September 30, 2013 and the interest rate in effect as of September 30, 2013, 1.5625%.
|
(2)
|
The future minimum lease payments above include minimum future lease payments for excess facilities under noncancelable operating leases, net of expected sublease income under existing sublease arrangements. These leases qualify for operating lease accounting treatment and, as such, are not included on our balance sheet. See Note I of “Notes to Consolidated Financial Statements” for additional information regarding our operating leases.
|
(3)
|
Purchase obligations represent minimum commitments due to third parties, including royalty contracts, research and development contracts, telecommunication contracts, information technology maintenance contracts in support of internal-use software and hardware and other marketing and consulting contracts. Contracts for which our commitment is variable, based on volumes, with no fixed minimum quantities, and contracts that can be canceled without payment penalties have been excluded. The purchase obligations included above are in addition to amounts included in current liabilities and prepaid expenses recorded on our September 30, 2013 consolidated balance sheet.
|
(4)
|
These obligations relate to our U.S. and international pension plans. These liabilities are not subject to fixed payment terms. Payments have been estimated based on the plans’ current funded status and actuarial assumptions. In addition, we may, at our discretion, make additional voluntary contributions to the plans. See Note M of “Notes to Consolidated Financial Statements” for further discussion.
|
(5)
|
As of September 30, 2013, we had recorded total unrecognized tax benefits of
$13.7 million
. This liability is not subject to fixed payment terms and the amount and timing of payments, if any, which we will make related to this liability, are not known. See Note G of “Notes to Consolidated Financial Statements” for additional information.
|
|
September 30,
|
||||||
Currency Hedged
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Canadian/U.S. Dollar
|
$
|
41,852
|
|
|
$
|
54,133
|
|
Euro/U.S. Dollar
|
50,902
|
|
|
53,716
|
|
||
Chinese Renminbi/U.S. Dollar
|
—
|
|
|
3,666
|
|
||
Japanese Yen/U.S. Dollar
|
6,496
|
|
|
13,415
|
|
||
Swiss Franc/U.S. Dollar
|
9,678
|
|
|
—
|
|
||
All other
|
15,506
|
|
|
8,973
|
|
||
Total
|
$
|
124,434
|
|
|
$
|
133,903
|
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Name
|
|
Age
|
|
Position
|
James Heppelmann
|
|
49
|
|
President and Chief Executive Officer
|
Barry Cohen
|
|
69
|
|
Executive Vice President, Strategy
|
Anthony DiBona
|
|
58
|
|
Executive Vice President, Global Support
|
Marc Diouane
|
|
45
|
|
Executive Vice President, Global Services and Partners
|
Jeffrey Glidden
|
|
63
|
|
Executive Vice President, Chief Financial Officer
|
Robert Ranaldi
|
|
44
|
|
Executive Vice President, Worldwide Sales
|
Aaron von Staats
|
|
47
|
|
Corporate Vice President, General Counsel and Secretary
|
|
|
|
1.
|
Financial Statements
|
|
|
||
|
||
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, 2013, 2012 and 2011
|
|
|
||
|
||
|
||
|
||
|
|
|
2.
|
Financial Statement Schedules
|
|
|
Schedules have been omitted since they are either not required, not applicable, or the information is otherwise included in the Financial Statements per Item 15(a)1 above.
|
|
|
|
|
3.
|
Exhibits
|
|
|
The list of exhibits in the Exhibit Index is incorporated herein by reference.
|
|
|
|
|
|
PTC Inc.
|
|
|
|
|
|
By:
|
/s/ J
AMES
H
EPPELMANN
|
|
|
James Heppelmann
President and Chief Executive Officer
|
Signature
|
|
Title
|
(i) Principal Executive Officer:
|
|
|
|
|
|
/s/ J
AMES
H
EPPELMANN
|
|
President and Chief Executive Officer
|
James Heppelmann
|
|
|
|
|
|
(ii) Principal Financial and Accounting Officer:
|
|
|
|
|
|
/s/ J
EFFREY
G
LIDDEN
|
|
Executive Vice President and Chief Financial Officer
|
Jeffrey Glidden
|
|
|
|
|
|
(iii) Board of Directors:
|
|
|
|
|
|
/s/ D
ONALD
G
RIERSON
|
|
Chairman of the Board of Directors
|
Donald Grierson
|
|
|
|
|
|
/s/ T
HOMAS
B
OGAN
|
|
Director
|
Thomas Bogan
|
|
|
|
|
|
/s/ J
ANICE
C
HAFFIN
|
|
Director
|
Janice Chaffin
|
|
|
|
|
|
/s/ J
AMES
H
EPPELMANN
|
|
Director
|
James Heppelmann
|
|
|
|
|
|
/s/ P
AUL
L
ACY
|
|
Director
|
Paul Lacy
|
|
|
|
|
|
/s/ M
ICHAEL
P
ORTER
|
|
Director
|
Michael Porter
|
|
|
|
|
|
/s/ R
OBERT
S
CHECHTER
|
|
Director
|
Robert Schechter
|
|
|
|
|
|
/s/ R
ENATO
Z
AMBONINI
|
|
Director
|
Renato Zambonini
|
|
|
Exhibit
Number
|
|
Exhibit
|
|
|
|
|
|
2.1
|
|
—
|
Stock Purchase Agreement dated as of August 7, 2012 by and among PTC Inc., Servigistics, Inc., the stockholders of Servigistics, Inc. and Servigistics, LLC (filed as Exhibit 10.1 to our Current Report on Form 8-K dated August 7, 2012 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
3.1(a)
|
|
—
|
Restated Articles of Organization of PTC Inc. adopted February 4, 1993 (filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 1996 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
3.1(b)
|
|
—
|
Articles of Amendment to Restated Articles of Organization adopted February 9, 1996 (filed as Exhibit 4.1(b) to our Registration Statement on Form S-8 (Registration No. 333-01297) and incorporated herein by reference).
|
|
|
|
|
3.1(c)
|
|
—
|
Articles of Amendment to Restated Articles of Organization adopted February 13, 1997 (filed as Exhibit 4.1(b) to our Registration Statement on Form S-8 (Registration No. 333-22169) and incorporated herein by reference).
|
|
|
|
|
3.1(d)
|
|
—
|
Articles of Amendment to Restated Articles of Organization adopted February 10, 2000 (filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended April 1, 2000 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
3.1(e)
|
|
—
|
Certificate of Vote of Directors establishing Series A Junior Participating Preferred Stock (filed as Exhibit 3.1(e) to our Annual Report on Form 10-K for the fiscal year ended September 30, 2000 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
3.1(f)
|
|
—
|
Articles of Amendment to Restated Articles of Organization adopted February 28, 2006 (filed as Exhibit 3.1(f) to our Quarterly Report on Form 10-Q for the fiscal quarter ended April 1, 2006 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
3.1(g)
|
|
—
|
Articles of Amendment to Restated Articles of Organization adopted January 28, 2013 (filed as Exhibit 3.1(g) to our Quarterly Report on Form 10-Q for the fiscal quarter ended December 29, 2012 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
3.2
|
|
—
|
By-Laws, as amended and restated, of PTC Inc. (filed as Exhibit 3.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2009 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.1*
|
|
—
|
PTC Inc. 2000 Equity Incentive Plan (filed as Exhibit 10.1. to our Current Report on Form 8-K filed on March 6, 2013 and incorporated herein by reference).
|
|
|
|
|
10.1.2*
|
|
—
|
Form of Restricted Stock Agreement (Non-Employee Director) (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2009 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.3*
|
|
—
|
Form of Restricted Stock Agreement (Employee) (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2005 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.4*
|
|
—
|
Form of Restricted Stock Unit Certificate (U.S.) (filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2005 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.5
|
|
—
|
Form of Restricted Stock Unit Certificate (Non-U.S.) (filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2005 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
10.1.6
|
|
—
|
Form of Incentive Stock Option Certificate (filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2005 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.7*
|
|
—
|
Form of Nonstatutory Stock Option Certificate (filed as Exhibit 10.6 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2005 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.8*
|
|
—
|
Form of Stock Appreciation Right Certificate (filed as Exhibit 10.7 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2005 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.9*
|
|
—
|
Form of Restricted Stock Unit Certificate (U.S. Section 16 Officers) (filed as Exhibit 10.1.9 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2012 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.10*
|
|
—
|
Form of Restricted Stock Unit Certificate (Non-Employee Director) (filed as Exhibit 10.1.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2013 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.1.11
|
|
—
|
Form of Restricted Stock Unit Certificate (U.S.).
|
|
|
|
|
10.2*
|
|
—
|
PTC Inc. 1997 Incentive Stock Option Plan (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 3, 2004 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.3*
|
|
—
|
Amendment to PTC Inc. 1997 Incentive Stock Option Plan (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2001 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.4
|
|
—
|
PTC Inc. 1997 Nonstatutory Stock Option Plan (filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 3, 2004 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.5*
|
|
—
|
2009 Executive Cash Incentive Performance Plan (filed as Exhibit 10.5 to our Annual Report Form 10-K for the fiscal year ended September 30, 2012 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.6*
|
|
—
|
Form of Executive Agreement by and between PTC Inc. and Robert Ranaldi entered into May 6, 2011 (filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the period ended July 2, 2011 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.7*
|
|
—
|
Amended and Restated Executive Agreement with James Heppelmann, President and Chief Executive Officer, dated May 7, 2010 (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2010 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.8*
|
|
—
|
Amendment to Executive Agreement dated as of November 18, 2011 by and between PTC Inc. and James Heppelmann to Amended and Restated Executive Agreement dated as of May 7, 2010 by and between PTC and James Heppelmann (filed as Exhibit 10.2 to our Current Report on Form 8-K dated November 15, 2011 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.9*
|
|
—
|
Amendment to Executive Agreement by and between PTC Inc. and James Heppelmann dated May 13, 2013.
|
|
|
|
|
10.10*
|
|
—
|
Form of Amended and Restated Executive Agreement entered into with each of Barry Cohen, Anthony DiBona, and Aaron von Staats (filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the fiscal quarter dated April 3, 2010 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.11*
|
|
—
|
Form of Amendment to Amended and Restated Executive Agreement entered into as of November 18, 2011 by and between PTC Inc. and each of Barry Cohen, Anthony DiBona, and Aaron von Staats (filed as Exhibit 10.3 to our Current Report on Form 8-K dated November 15, 2011 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.12*
|
|
—
|
Executive Agreement dated September 14, 2010 with Jeffrey Glidden (filed as Exhibit 10 to our Current Report on Form 8-K dated September 20, 2010 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.13*
|
|
—
|
Executive Agreement dated October 1, 2010 with Marc Diouane (filed as Exhibit 10.11 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2010 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.18
|
|
—
|
Lease dated December 14, 1999 by and between PTC Inc. and Boston Properties Limited Partnership (filed as Exhibit 10.21 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2000 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.19
|
|
—
|
Third Amendment to Lease Agreement dated as of October 27, 2010 by and between Boston Properties Limited Partnership and PTC Inc. (filed as Exhibit 10.1 to our Current Report on Form 8-K dated November 8, 2010 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
|
10.20
|
|
—
|
Credit Agreement dated as of August 16, 2012 by and among PTC Inc., JPMorgan Chase Bank, N.A., KeyBank National Association, RBS Citizens, N.A., Bank of America, N.A., HSBC Bank USA, N.A., Silicon Valley Bank, Sovereign Bank, TD Bank, N.A., Wells Fargo Bank, N.A., and The Huntington National Bank (filed as Exhibit 10 to our Current Report on Form 8-K dated August 16, 2012 (File No 0-18059) and incorporated herein by reference).
|
|
|
|
|
21.1
|
|
—
|
Subsidiaries of PTC Inc.
|
|
|
|
|
23.1
|
|
—
|
Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm.
|
|
|
|
|
31.1
|
|
—
|
Certification of the Chief Executive Officer Pursuant to Exchange Act Rules 13(a)-14(a) and 15d-14(a).
|
|
|
|
|
31.2
|
|
—
|
Certification of the Chief Financial Officer Pursuant to Exchange Act Rules 13(a)-14(a) and 15d-14(a).
|
|
|
|
|
32**
|
|
—
|
Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350.
|
|
|
|
|
101
|
|
—
|
The following materials from PTC Inc.'s Annual Report on Form 10-K for the year ended September 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, 2013 and 2012; (ii) Consolidated Statements of Operations for the years ended September 30, 2013, 2012 and 2011; (iii) Consolidated Statements of Comprehensive Income for the years ended September 30, 2013, 2012 and 2011; (iv) Consolidated Statements of Cash Flows for the years ended September 30, 2013, 2012 and 2011; (v) Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2013, 2012 and 2011; and (vi) Notes to Consolidated Financial Statements.
|
*
|
Identifies a management contract or compensatory plan or arrangement in which an executive officer or director of PTC participates.
|
**
|
Indicates that the exhibit is being furnished with this report and is not filed as a part of it.
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue:
|
|
|
|
|
|
||||||
License
|
$
|
344,209
|
|
|
$
|
348,394
|
|
|
$
|
342,121
|
|
Service
|
294,653
|
|
|
295,342
|
|
|
267,150
|
|
|||
Support
|
654,679
|
|
|
611,943
|
|
|
557,678
|
|
|||
Total revenue
|
1,293,541
|
|
|
1,255,679
|
|
|
1,166,949
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Cost of license revenue
|
33,004
|
|
|
30,595
|
|
|
28,792
|
|
|||
Cost of service revenue
|
258,954
|
|
|
265,483
|
|
|
260,650
|
|
|||
Cost of support revenue
|
81,081
|
|
|
76,050
|
|
|
67,326
|
|
|||
Total cost of revenue
|
373,039
|
|
|
372,128
|
|
|
356,768
|
|
|||
Gross margin
|
920,502
|
|
|
883,551
|
|
|
810,181
|
|
|||
Sales and marketing
|
360,640
|
|
|
377,796
|
|
|
353,051
|
|
|||
Research and development
|
221,918
|
|
|
214,960
|
|
|
211,406
|
|
|||
General and administrative
|
131,937
|
|
|
117,468
|
|
|
110,291
|
|
|||
Amortization of acquired intangible assets
|
26,486
|
|
|
20,303
|
|
|
18,319
|
|
|||
Restructuring charges
|
52,197
|
|
|
24,928
|
|
|
—
|
|
|||
Total operating expenses
|
793,178
|
|
|
755,455
|
|
|
693,067
|
|
|||
Operating income
|
127,324
|
|
|
128,096
|
|
|
117,114
|
|
|||
Foreign currency losses, net
|
(2,027
|
)
|
|
(5,862
|
)
|
|
(12,293
|
)
|
|||
Interest income
|
2,862
|
|
|
2,920
|
|
|
3,844
|
|
|||
Interest expense
|
(6,976
|
)
|
|
(4,746
|
)
|
|
(3,310
|
)
|
|||
Other income (expense), net
|
5,051
|
|
|
328
|
|
|
(807
|
)
|
|||
Income before income taxes
|
126,234
|
|
|
120,736
|
|
|
104,548
|
|
|||
(Benefit) provision for income taxes
|
(17,535
|
)
|
|
156,134
|
|
|
19,124
|
|
|||
Net income (loss)
|
$
|
143,769
|
|
|
$
|
(35,398
|
)
|
|
$
|
85,424
|
|
Earnings (loss) per share—Basic
|
$
|
1.20
|
|
|
$
|
(0.30
|
)
|
|
$
|
0.73
|
|
Earnings (loss) per share—Diluted
|
$
|
1.19
|
|
|
$
|
(0.30
|
)
|
|
$
|
0.71
|
|
Weighted average shares outstanding—Basic
|
119,473
|
|
|
118,705
|
|
|
117,579
|
|
|||
Weighted average shares outstanding—Diluted
|
121,240
|
|
|
118,705
|
|
|
120,974
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income (loss)
|
$
|
143,769
|
|
|
$
|
(35,398
|
)
|
|
$
|
85,424
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment, net of tax of $0 for all periods
|
7,165
|
|
|
(2,176
|
)
|
|
(7,174
|
)
|
|||
Minimum pension liability adjustment, net of tax of $8,094 for 2013, $4,875 for 2012, and $3,209 for 2011
|
14,176
|
|
|
(5,561
|
)
|
|
(5,110
|
)
|
|||
Other comprehensive income (loss)
|
21,341
|
|
|
(7,737
|
)
|
|
(12,284
|
)
|
|||
Comprehensive income (loss)
|
$
|
165,110
|
|
|
$
|
(43,135
|
)
|
|
$
|
73,140
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
143,769
|
|
|
$
|
(35,398
|
)
|
|
$
|
85,424
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Stock-based compensation
|
48,787
|
|
|
51,305
|
|
|
45,402
|
|
|||
Depreciation and amortization
|
76,551
|
|
|
66,471
|
|
|
62,394
|
|
|||
Provision for loss on accounts receivable
|
213
|
|
|
258
|
|
|
51
|
|
|||
(Benefit from) provision for deferred income taxes
|
(39,714
|
)
|
|
104,766
|
|
|
(35,063
|
)
|
|||
Excess tax benefits realized from stock-based awards
|
(334
|
)
|
|
(1,324
|
)
|
|
(5,398
|
)
|
|||
Other non-cash costs, net
|
126
|
|
|
32
|
|
|
55
|
|
|||
Changes in operating assets and liabilities, excluding the effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
17,308
|
|
|
32,309
|
|
|
(32,334
|
)
|
|||
Accounts payable and accrued expenses
|
(4,828
|
)
|
|
(8,556
|
)
|
|
(58
|
)
|
|||
Accrued litigation
|
—
|
|
|
—
|
|
|
(52,129
|
)
|
|||
Accrued compensation and benefits
|
11,036
|
|
|
983
|
|
|
(3,788
|
)
|
|||
Deferred revenue
|
6,727
|
|
|
14,362
|
|
|
8,195
|
|
|||
Accrued income taxes, net of income tax receivable
|
(15,211
|
)
|
|
(4,005
|
)
|
|
18,931
|
|
|||
Other current assets and prepaid expenses
|
(9,113
|
)
|
|
8,332
|
|
|
(1,826
|
)
|
|||
Other noncurrent assets
|
(11,766
|
)
|
|
(12,423
|
)
|
|
(15,111
|
)
|
|||
Other noncurrent liabilities
|
1,132
|
|
|
863
|
|
|
3,953
|
|
|||
Net cash provided by operating activities
|
224,683
|
|
|
217,975
|
|
|
78,698
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property and equipment
|
(29,328
|
)
|
|
(31,413
|
)
|
|
(27,817
|
)
|
|||
Acquisitions of businesses, net of cash acquired
|
(245,843
|
)
|
|
(220
|
)
|
|
(280,026
|
)
|
|||
Other
|
721
|
|
|
—
|
|
|
—
|
|
|||
Net cash used by investing activities
|
(274,450
|
)
|
|
(31,633
|
)
|
|
(307,843
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowings under revolving credit facility
|
—
|
|
|
230,000
|
|
|
250,000
|
|
|||
Repayments of borrowings under revolving credit facility
|
(111,875
|
)
|
|
(60,000
|
)
|
|
(50,000
|
)
|
|||
Repurchases of common stock
|
(74,871
|
)
|
|
(34,953
|
)
|
|
(54,921
|
)
|
|||
Proceeds from issuance of common stock
|
4,884
|
|
|
21,210
|
|
|
24,756
|
|
|||
Excess tax benefits realized from stock-based awards
|
334
|
|
|
1,324
|
|
|
5,398
|
|
|||
Payments of withholding taxes in connection with vesting of stock-based awards
|
(14,996
|
)
|
|
(20,967
|
)
|
|
(22,520
|
)
|
|||
Credit facility origination costs
|
—
|
|
|
(1,951
|
)
|
|
(995
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
(1,298
|
)
|
|||
Net cash (used) provided by financing activities
|
(196,524
|
)
|
|
134,663
|
|
|
150,420
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,339
|
)
|
|
660
|
|
|
6,350
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(247,630
|
)
|
|
321,665
|
|
|
(72,375
|
)
|
|||
Cash and cash equivalents, beginning of year
|
489,543
|
|
|
167,878
|
|
|
240,253
|
|
|||
Cash and cash equivalents, end of year
|
$
|
241,913
|
|
|
$
|
489,543
|
|
|
$
|
167,878
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance as of October 1, 2010
|
115,826
|
|
|
$
|
1,158
|
|
|
$
|
1,802,786
|
|
|
$
|
(1,004,160
|
)
|
|
$
|
(52,480
|
)
|
|
$
|
747,304
|
|
Common stock issued for employee stock-based awards
|
4,803
|
|
|
48
|
|
|
24,708
|
|
|
—
|
|
|
—
|
|
|
24,756
|
|
|||||
Shares surrendered by employees to pay taxes related to stock-based awards
|
(1,043
|
)
|
|
(10
|
)
|
|
(22,510
|
)
|
|
—
|
|
|
—
|
|
|
(22,520
|
)
|
|||||
Compensation expense from stock-based awards
|
—
|
|
|
—
|
|
|
45,402
|
|
|
—
|
|
|
—
|
|
|
45,402
|
|
|||||
Tax shortfalls from stock-based awards
|
—
|
|
|
—
|
|
|
9,438
|
|
|
—
|
|
|
—
|
|
|
9,438
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
85,424
|
|
|
—
|
|
|
85,424
|
|
|||||
Repurchases of common stock
|
(2,649
|
)
|
|
(27
|
)
|
|
(54,894
|
)
|
|
—
|
|
|
—
|
|
|
(54,921
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,174
|
)
|
|
(7,174
|
)
|
|||||
Change in pension benefits, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,110
|
)
|
|
(5,110
|
)
|
|||||
Other
|
—
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|||||
Balance as of September 30, 2011
|
116,937
|
|
|
1,169
|
|
|
1,805,021
|
|
|
(918,736
|
)
|
|
(64,764
|
)
|
|
822,690
|
|
|||||
Common stock issued for employee stock-based awards
|
5,077
|
|
|
51
|
|
|
21,159
|
|
|
—
|
|
|
—
|
|
|
21,210
|
|
|||||
Shares surrendered by employees to pay taxes related to stock-based awards
|
(908
|
)
|
|
(9
|
)
|
|
(20,958
|
)
|
|
—
|
|
|
—
|
|
|
(20,967
|
)
|
|||||
Compensation expense from stock-based awards
|
—
|
|
|
—
|
|
|
51,305
|
|
|
—
|
|
|
—
|
|
|
51,305
|
|
|||||
Excess tax benefits from stock-based awards
|
—
|
|
|
—
|
|
|
1,109
|
|
|
—
|
|
|
—
|
|
|
1,109
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,398
|
)
|
|
—
|
|
|
(35,398
|
)
|
|||||
Repurchases of common stock
|
(1,553
|
)
|
|
(15
|
)
|
|
(34,938
|
)
|
|
—
|
|
|
—
|
|
|
(34,953
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,176
|
)
|
|
(2,176
|
)
|
|||||
Change in pension benefits, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,561
|
)
|
|
(5,561
|
)
|
|||||
Balance as of September 30, 2012
|
119,553
|
|
|
1,196
|
|
|
1,822,698
|
|
|
(954,134
|
)
|
|
(72,501
|
)
|
|
797,259
|
|
|||||
Common stock issued for employee stock-based awards
|
2,655
|
|
|
27
|
|
|
4,857
|
|
|
—
|
|
|
—
|
|
|
4,884
|
|
|||||
Shares surrendered by employees to pay taxes related to stock-based awards
|
(709
|
)
|
|
(7
|
)
|
|
(14,989
|
)
|
|
—
|
|
|
—
|
|
|
(14,996
|
)
|
|||||
Compensation expense from stock-based awards
|
—
|
|
|
—
|
|
|
48,787
|
|
|
—
|
|
|
—
|
|
|
48,787
|
|
|||||
Excess tax benefits from stock-based awards
|
—
|
|
|
—
|
|
|
307
|
|
|
—
|
|
|
—
|
|
|
307
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
143,769
|
|
|
—
|
|
|
143,769
|
|
|||||
Repurchases of common stock
|
(3,053
|
)
|
|
(31
|
)
|
|
(74,840
|
)
|
|
—
|
|
|
—
|
|
|
(74,871
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,165
|
|
|
7,165
|
|
|||||
Change in pension benefits, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,176
|
|
|
14,176
|
|
|||||
Balance as of September 30, 2013
|
118,446
|
|
|
$
|
1,185
|
|
|
$
|
1,786,820
|
|
|
$
|
(810,365
|
)
|
|
$
|
(51,160
|
)
|
|
$
|
926,480
|
|
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Deferred support revenue
|
$
|
312,721
|
|
|
$
|
306,940
|
|
Deferred service revenue
|
18,793
|
|
|
14,127
|
|
||
Deferred license revenue
|
5,399
|
|
|
6,462
|
|
||
Total deferred revenue
|
$
|
336,913
|
|
|
$
|
327,529
|
|
•
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
•
|
Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or
|
•
|
Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Financial assets
|
|
|
|
||||
Cash equivalents—Level 1 (1)
|
$
|
56,706
|
|
|
$
|
231,488
|
|
Forward contracts—Level 2
|
301
|
|
|
236
|
|
||
|
$
|
57,007
|
|
|
$
|
231,724
|
|
Financial liabilities
|
|
|
|
||||
Forward contracts—Level 2
|
$
|
438
|
|
|
$
|
—
|
|
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
S&P bond rating BBB-1 and above-Tier 1
|
$
|
42,189
|
|
|
$
|
34,017
|
|
Internal Credit Assessment-Tier 2
|
10,934
|
|
|
8,446
|
|
||
Internal Credit Assessment-Tier 3
|
—
|
|
|
—
|
|
||
Total financing receivables
|
$
|
53,123
|
|
|
$
|
42,463
|
|
|
September 30,
|
||||||
Currency Hedged
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Canadian/U.S. Dollar
|
$
|
41,852
|
|
|
$
|
54,133
|
|
Euro/U.S. Dollar
|
50,902
|
|
|
53,716
|
|
||
Chinese Renminbi/U.S. Dollar
|
—
|
|
|
3,666
|
|
||
Japanese Yen/U.S. Dollar
|
6,496
|
|
|
13,415
|
|
||
Swiss Franc/U.S. Dollar
|
9,678
|
|
|
—
|
|
||
All other
|
15,506
|
|
|
8,973
|
|
||
Total
|
$
|
124,434
|
|
|
$
|
133,903
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Net income (loss)
|
$
|
143,769
|
|
|
$
|
(35,398
|
)
|
|
$
|
85,424
|
|
Weighted average shares outstanding
|
119,473
|
|
|
118,705
|
|
|
117,579
|
|
|||
Dilutive effect of employee stock options, restricted shares and restricted stock units
|
1,767
|
|
|
—
|
|
|
3,395
|
|
|||
Diluted weighted average shares outstanding
|
121,240
|
|
|
118,705
|
|
|
120,974
|
|
|||
Basic earnings (loss) per share
|
$
|
1.20
|
|
|
$
|
(0.30
|
)
|
|
$
|
0.73
|
|
Diluted earnings (loss) per share
|
$
|
1.19
|
|
|
$
|
(0.30
|
)
|
|
$
|
0.71
|
|
|
|
|
For the year ended September 30, 2013
|
|
|
||||||||||
|
|
|
2013 Restructuring Charges
|
|
|
||||||||||
|
Prior Period Restructuring Charges
|
|
Employee Severance
and Related Benefits
|
|
Facility Closures
and Other Costs
|
|
Consolidated Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance, October 1, 2010
|
$
|
1,165
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,165
|
|
Cash disbursements
|
(502
|
)
|
|
—
|
|
|
—
|
|
|
(502
|
)
|
||||
Foreign currency impact
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Balance, September 30, 2011
|
666
|
|
|
—
|
|
|
—
|
|
|
666
|
|
||||
Charges to operations
|
24,928
|
|
|
|
|
|
|
24,928
|
|
||||||
Cash disbursements
|
(20,947
|
)
|
|
—
|
|
|
—
|
|
|
(20,947
|
)
|
||||
Foreign currency impact
|
(186
|
)
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
||||
Balance, September 30, 2012
|
4,461
|
|
|
—
|
|
|
—
|
|
|
4,461
|
|
||||
Charges to operations
|
(251
|
)
|
|
50,954
|
|
|
1,494
|
|
|
52,197
|
|
||||
Cash disbursements
|
(4,225
|
)
|
|
(31,781
|
)
|
|
(1,193
|
)
|
|
(37,199
|
)
|
||||
Foreign currency impact
|
15
|
|
|
60
|
|
|
(5
|
)
|
|
70
|
|
||||
Balance, September 30, 2013
|
$
|
—
|
|
|
$
|
19,233
|
|
|
$
|
296
|
|
|
$
|
19,529
|
|
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Computer hardware and software
|
$
|
217,724
|
|
|
$
|
224,558
|
|
Furniture and fixtures
|
19,211
|
|
|
20,878
|
|
||
Leasehold improvements
|
35,289
|
|
|
46,393
|
|
||
Gross property and equipment
|
272,224
|
|
|
291,829
|
|
||
Accumulated depreciation and amortization
|
(207,572
|
)
|
|
(228,363
|
)
|
||
Net property and equipment
|
$
|
64,652
|
|
|
$
|
63,466
|
|
|
Year ended September 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in millions, except per share amounts)
|
||||||
Revenue
|
$
|
1,296.6
|
|
|
$
|
1,328.5
|
|
Net income (loss)
|
$
|
116.5
|
|
|
$
|
(11.6
|
)
|
Earnings (loss) per share—Basic
|
$
|
0.98
|
|
|
$
|
(0.10
|
)
|
Earnings (loss) per share—Diluted
|
$
|
0.96
|
|
|
$
|
(0.10
|
)
|
|
Year ended
|
||
|
September 30, 2011
|
||
|
(in millions, except per share amounts)
|
||
Revenue
|
$
|
1,227.8
|
|
Net income
|
$
|
93.0
|
|
Earnings per share—Basic
|
$
|
0.79
|
|
Earnings per share—Diluted
|
$
|
0.77
|
|
|
September 30, 2013
|
|
September 30, 2012
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Goodwill (not amortized)
|
|
|
|
|
$
|
769,095
|
|
|
|
|
|
|
$
|
610,347
|
|
||||||||
Intangible assets with finite lives (amortized) (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchased software
|
$
|
233,566
|
|
|
$
|
148,127
|
|
|
$
|
85,439
|
|
|
$
|
177,166
|
|
|
$
|
127,250
|
|
|
$
|
49,916
|
|
Capitalized software
|
22,877
|
|
|
22,877
|
|
|
—
|
|
|
22,877
|
|
|
22,877
|
|
|
—
|
|
||||||
Customer lists and relationships
|
304,434
|
|
|
120,338
|
|
|
184,096
|
|
|
227,097
|
|
|
93,215
|
|
|
133,882
|
|
||||||
Trademarks and trade names
|
13,427
|
|
|
10,097
|
|
|
3,330
|
|
|
11,013
|
|
|
8,967
|
|
|
2,046
|
|
||||||
Other
|
3,784
|
|
|
3,528
|
|
|
256
|
|
|
3,437
|
|
|
3,396
|
|
|
41
|
|
||||||
|
$
|
578,088
|
|
|
$
|
304,967
|
|
|
$
|
273,121
|
|
|
$
|
441,590
|
|
|
$
|
255,705
|
|
|
$
|
185,885
|
|
Total goodwill and acquired intangible assets
|
|
|
|
|
$
|
1,042,216
|
|
|
|
|
|
|
$
|
796,232
|
|
|
Software
Products
Segment
|
|
Services
Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance, October 1, 2012
|
$
|
588,443
|
|
|
$
|
24,951
|
|
|
$
|
613,394
|
|
Acquisition of 4CS
|
(950
|
)
|
|
—
|
|
|
(950
|
)
|
|||
Foreign currency translation adjustments
|
(2,024
|
)
|
|
(73
|
)
|
|
(2,097
|
)
|
|||
Balance, September 30, 2012
|
585,469
|
|
|
24,878
|
|
|
610,347
|
|
|||
Acquisition of Servigistics
|
127,033
|
|
|
12,800
|
|
|
139,833
|
|
|||
Acquisition of NetIDEAS
|
—
|
|
|
10,196
|
|
|
10,196
|
|
|||
Acquisition of Enigma
|
3,570
|
|
|
581
|
|
|
4,151
|
|
|||
Foreign currency translation and other adjustments
|
4,476
|
|
|
92
|
|
|
4,568
|
|
|||
Balance, September 30, 2013
|
$
|
720,548
|
|
|
$
|
48,547
|
|
|
$
|
769,095
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Amortization of acquired intangible assets
|
$
|
26,486
|
|
|
$
|
20,303
|
|
|
$
|
18,319
|
|
Cost of license revenue
|
18,586
|
|
|
15,819
|
|
|
15,393
|
|
|||
Total amortization expense
|
$
|
45,072
|
|
|
$
|
36,122
|
|
|
$
|
33,712
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Domestic
|
$
|
6,112
|
|
|
$
|
(11,422
|
)
|
|
$
|
(23,984
|
)
|
Foreign
|
120,122
|
|
|
132,158
|
|
|
128,532
|
|
|||
Total income before income taxes
|
$
|
126,234
|
|
|
$
|
120,736
|
|
|
$
|
104,548
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
7,081
|
|
|
$
|
8,534
|
|
|
$
|
22,849
|
|
State
|
1,512
|
|
|
1,733
|
|
|
(192
|
)
|
|||
Foreign
|
13,586
|
|
|
41,101
|
|
|
31,530
|
|
|||
|
22,179
|
|
|
51,368
|
|
|
54,187
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(38,224
|
)
|
|
106,041
|
|
|
(31,303
|
)
|
|||
State
|
(4,718
|
)
|
|
7,706
|
|
|
(2,176
|
)
|
|||
Foreign
|
3,228
|
|
|
(8,981
|
)
|
|
(1,584
|
)
|
|||
|
(39,714
|
)
|
|
104,766
|
|
|
(35,063
|
)
|
|||
Total (benefit) provision for income taxes
|
$
|
(17,535
|
)
|
|
$
|
156,134
|
|
|
$
|
19,124
|
|
|
Year ended September 30,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Statutory federal income tax rate
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
Change in valuation allowance
|
(32
|
)%
|
|
103
|
%
|
|
3
|
%
|
State income taxes, net of federal tax benefit
|
1
|
%
|
|
—
|
%
|
|
(2
|
)%
|
Federal and state research and development credits
|
(1
|
)%
|
|
(1
|
)%
|
|
(5
|
)%
|
Tax audit and examination settlements
|
(1
|
)%
|
|
1
|
%
|
|
—
|
%
|
Foreign rate differences
|
(26
|
)%
|
|
(16
|
)%
|
|
(15
|
)%
|
Foreign withholding tax
|
5
|
%
|
|
3
|
%
|
|
—
|
%
|
Subsidiary reorganization
|
—
|
%
|
|
3
|
%
|
|
1
|
%
|
Other, net
|
5
|
%
|
|
1
|
%
|
|
1
|
%
|
Effective income tax rate
|
(14
|
)%
|
|
129
|
%
|
|
18
|
%
|
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
47,770
|
|
|
$
|
23,879
|
|
Foreign tax credits
|
5,994
|
|
|
—
|
|
||
Capitalized research and development expense
|
51,237
|
|
|
59,562
|
|
||
Pension benefits
|
30,870
|
|
|
35,676
|
|
||
Deferred revenue
|
63,976
|
|
|
58,791
|
|
||
Stock-based compensation
|
18,045
|
|
|
17,137
|
|
||
Accrual for litigation
|
—
|
|
|
16,310
|
|
||
Other reserves not currently deductible
|
19,343
|
|
|
12,058
|
|
||
Amortization of intangible assets
|
5,772
|
|
|
10,658
|
|
||
Other tax credits
|
31,263
|
|
|
23,899
|
|
||
Depreciation
|
3,077
|
|
|
5,582
|
|
||
Other
|
4,396
|
|
|
5,984
|
|
||
Gross deferred tax assets
|
281,743
|
|
|
269,536
|
|
||
Valuation allowance
|
(156,547
|
)
|
|
(170,404
|
)
|
||
Total deferred tax assets
|
125,196
|
|
|
99,132
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Acquired intangible assets not deductible
|
(88,134
|
)
|
|
(53,030
|
)
|
||
Pension prepayments
|
(15,607
|
)
|
|
(12,475
|
)
|
||
Deferred revenue
|
(12,592
|
)
|
|
(21,693
|
)
|
||
Other
|
(4,463
|
)
|
|
(651
|
)
|
||
Total deferred tax liabilities
|
(120,796
|
)
|
|
(87,849
|
)
|
||
Net deferred tax assets
|
$
|
4,400
|
|
|
$
|
11,283
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in millions)
|
||||||||||
Valuation allowance beginning of year
|
$
|
170.4
|
|
|
$
|
38.6
|
|
|
$
|
40.5
|
|
Net release of valuation allowance (1)
|
(44.6
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||
Establish valuation allowance in the U.S.
|
—
|
|
|
124.5
|
|
|
—
|
|
|||
Net increase/decrease in deferred tax assets for foreign jurisdictions with a full valuation allowance
|
1.9
|
|
|
(2.1
|
)
|
|
(0.8
|
)
|
|||
Establish valuation allowance for acquired businesses
|
12.1
|
|
|
—
|
|
|
—
|
|
|||
Establish valuation allowance in foreign jurisdictions
|
—
|
|
|
0.6
|
|
|
—
|
|
|||
Adjust deferred tax asset and valuation allowance in the U.S.
|
16.7
|
|
|
8.8
|
|
|
1.3
|
|
|||
Valuation allowance end of year
|
156.5
|
|
|
170.4
|
|
|
$
|
38.6
|
|
(1)
|
In 2013, this is attributable to recognition of deferred tax liabilities recorded in connection with accounting for 2013 acquisitions and a reduction in deferred tax assets associated with our U.S. pension plan, both of which are described above.
|
|
Year ended September 30,
|
||||||||||
Unrecognized tax benefits
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in millions)
|
||||||||||
Unrecognized tax benefit beginning of year
|
$
|
19.1
|
|
|
$
|
16.2
|
|
|
$
|
15.9
|
|
Tax positions related to current year:
|
|
|
|
|
|
||||||
Additions
|
1.0
|
|
|
3.4
|
|
|
1.1
|
|
|||
Tax positions related to prior years:
|
|
|
|
|
|
||||||
Additions
|
1.8
|
|
|
1.4
|
|
|
0.7
|
|
|||
Reductions
|
(6.3
|
)
|
|
(0.5
|
)
|
|
(1.5
|
)
|
|||
Settlements
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|||
Statute expirations
|
(1.2
|
)
|
|
(1.4
|
)
|
|
—
|
|
|||
Unrecognized tax benefit end of year
|
$
|
13.7
|
|
|
$
|
19.1
|
|
|
$
|
16.2
|
|
Major Tax Jurisdiction
|
|
Open Years
|
United States
|
|
2010 through 2013
|
Germany
|
|
2011 through 2013
|
France
|
|
2010 through 2013
|
Japan
|
|
2008 through 2013
|
Ireland
|
|
2009 through 2013
|
•
|
a leverage ratio, defined as consolidated funded indebtedness to consolidated trailing four quarters EBITDA, of no greater than
2.50
to
1.00
at any time; and
|
•
|
a fixed charge coverage ratio, defined as the ratio of consolidated trailing four quarters EBITDA less consolidated capital expenditures to consolidated fixed charges, of no less than
3.50
to
1.00
at any time.
|
Year ending September 30,
|
(in thousands)
|
||
2014
|
$
|
40,870
|
|
2015
|
35,580
|
|
|
2016
|
28,165
|
|
|
2017
|
22,463
|
|
|
2018
|
18,972
|
|
|
Thereafter
|
52,762
|
|
|
Total minimum lease payments
|
$
|
198,812
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
Cost of license revenue
|
$
|
21
|
|
|
$
|
22
|
|
|
$
|
15
|
|
Cost of service revenue
|
6,134
|
|
|
5,682
|
|
|
5,011
|
|
|||
Cost of support revenue
|
3,324
|
|
|
3,234
|
|
|
2,721
|
|
|||
Sales and marketing
|
11,326
|
|
|
13,809
|
|
|
11,428
|
|
|||
Research and development
|
8,590
|
|
|
8,761
|
|
|
8,547
|
|
|||
General and administrative
|
19,392
|
|
|
19,797
|
|
|
17,680
|
|
|||
Total stock-based compensation expense
|
$
|
48,787
|
|
|
$
|
51,305
|
|
|
$
|
45,402
|
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Aggregate Intrinsic Value as of September 30, 2013
|
|||||
Restricted stock activity for the year ended September 30, 2013
|
(in thousands except grant date fair value data)
|
|||||||||
Balance of nonvested outstanding restricted stock October 1, 2012
|
72
|
|
|
$
|
24.49
|
|
|
|
||
Vested
|
(67
|
)
|
|
$
|
24.72
|
|
|
|
||
Balance of nonvested outstanding restricted stock September 30, 2013
|
5
|
|
|
$
|
21.27
|
|
|
$
|
134
|
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Aggregate Intrinsic Value as of September 30, 2013
|
|||||
Restricted stock unit activity for the year ended September 30, 2013
|
(in thousands except grant date fair value data)
|
|||||||||
Balance of nonvested outstanding restricted stock units October 1, 2012
|
5,134
|
|
|
$
|
19.99
|
|
|
|
||
Granted
|
2,654
|
|
|
$
|
22.87
|
|
|
|
||
Vested
|
(2,188
|
)
|
|
$
|
19.26
|
|
|
|
||
Forfeited or not earned
|
(414
|
)
|
|
$
|
21.26
|
|
|
|
||
Balance of nonvested outstanding restricted stock units September 30, 2013
|
5,186
|
|
|
$
|
21.67
|
|
|
$
|
147,684
|
|
|
|
Restricted Stock Units
|
||||
Restricted stock unit grants
|
|
Performance-based (1)
|
|
Time-based (2)
|
||
|
|
(Number of Units in thousands)
|
||||
Year ended September 30, 2013
|
|
422
|
|
|
2,232
|
|
(1)
|
Of these performance-based RSUs, the performance conditions were achieved for approximately
200 thousand
shares, half of which vested in November 2013, with the remainder to vest in two substantially equal installments in November 2014 and 2015. The remaining approximately
200 thousand
shares will be eligible to vest in two substantially equal installments on the later of November 15, 2014 and November 15, 2015 and the date the Compensation Committee determines the extent to which performance criteria have been achieved. RSUs not earned for earlier periods are eligible to be earned in 2014 or 2015.
|
(2)
|
The time-based RSUs were issued to directors and employees, including some of our executive officers. The time-based RSUs issued to employees and executives will vest in
three
substantially equal annual installments from the date of grant. Substantially all of the time-based RSUs issued to our directors will vest one year from the date of grant.
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted Average
Remaining
Contractual Term
|
|
Aggregate
Intrinsic
Value
|
|||||
Stock option activity for the year ended September 30, 2013
|
(in thousands)
|
|
|
|
(in years)
|
|
(in thousands)
|
|||||
Outstanding:
|
|
|
|
|
|
|
|
|||||
Balance, October 1, 2012
|
573
|
|
|
$
|
10.36
|
|
|
|
|
|
||
Cancelled
|
(7
|
)
|
|
$
|
7.56
|
|
|
|
|
|
||
Exercised
|
(467
|
)
|
|
$
|
10.45
|
|
|
|
|
|
||
Balance, September 30, 2013
|
99
|
|
|
$
|
10.13
|
|
|
0.82
|
|
$
|
1,817
|
|
Exercisable September 30, 2013
|
99
|
|
|
$
|
10.13
|
|
|
0.82
|
|
$
|
1,814
|
|
|
Year ended September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Value of stock option and stock-based award activity
|
(in thousands)
|
||||||||||
Total intrinsic value of stock options exercised
|
$
|
6,525
|
|
|
$
|
31,746
|
|
|
$
|
15,983
|
|
Total fair value of restricted stock and restricted stock unit awards vested
|
$
|
48,083
|
|
|
$
|
65,574
|
|
|
$
|
68,772
|
|
|
U.S. Plan
|
|
International Plans
|
||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||
Weighted average assumptions used to determine benefit obligations at September 30 measurement date:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.90
|
%
|
|
4.00
|
%
|
|
4.50
|
%
|
|
3.3
|
%
|
|
3.4
|
%
|
|
4.8
|
%
|
Rate of increase in future compensation (1)
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
3.0
|
%
|
|
3.0
|
%
|
|
3.0
|
%
|
Weighted average assumptions used to determine net periodic pension cost for fiscal years ended September 30:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.00
|
%
|
|
4.50
|
%
|
|
5.00
|
%
|
|
3.4
|
%
|
|
4.8
|
%
|
|
4.0
|
%
|
Rate of increase in future compensation
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
3.0
|
%
|
|
3.0
|
%
|
|
2.7
|
%
|
Rate of return on plan assets
|
7.25
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
|
5.4
|
%
|
|
5.4
|
%
|
|
5.6
|
%
|
(1)
|
The rate of increase in future compensation is weighted for all plans, ongoing and frozen (with a
0%
increase for frozen plans). The weighted rate of increase for ongoing non-U.S. plans was
3%
at
September 30, 2013
and
2012
.
|
|
U.S. Plan
|
|
International Plans
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Interest cost of projected benefit obligation
|
$
|
4,989
|
|
|
$
|
5,490
|
|
|
$
|
5,627
|
|
|
$
|
2,384
|
|
|
$
|
2,554
|
|
|
$
|
2,382
|
|
Service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
2,017
|
|
|
1,882
|
|
|
1,782
|
|
||||||
Expected return on plan assets
|
(6,128
|
)
|
|
(5,412
|
)
|
|
(5,373
|
)
|
|
(2,126
|
)
|
|
(1,929
|
)
|
|
(2,254
|
)
|
||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(7
|
)
|
|
—
|
|
||||||
Recognized actuarial loss
|
3,152
|
|
|
2,967
|
|
|
2,549
|
|
|
1,248
|
|
|
341
|
|
|
334
|
|
||||||
Net periodic pension cost
|
$
|
2,013
|
|
|
$
|
3,045
|
|
|
$
|
2,803
|
|
|
$
|
3,517
|
|
|
$
|
2,841
|
|
|
$
|
2,244
|
|
|
U.S. Plan
|
|
International Plans
|
|
Total
|
||||||||||||||||||
|
Year ended September 30,
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Projected benefit obligation—beginning of year
|
$
|
129,701
|
|
|
$
|
123,645
|
|
|
$
|
71,408
|
|
|
$
|
55,382
|
|
|
$
|
201,109
|
|
|
$
|
179,027
|
|
Service cost
|
—
|
|
|
—
|
|
|
2,017
|
|
|
1,882
|
|
|
2,017
|
|
|
1,882
|
|
||||||
Interest cost
|
4,989
|
|
|
5,490
|
|
|
2,384
|
|
|
2,554
|
|
|
7,373
|
|
|
8,044
|
|
||||||
Actuarial (gain) loss
|
(12,728
|
)
|
|
8,449
|
|
|
1,426
|
|
|
14,724
|
|
|
(11,302
|
)
|
|
23,173
|
|
||||||
Foreign exchange impact
|
—
|
|
|
—
|
|
|
629
|
|
|
(2,132
|
)
|
|
629
|
|
|
(2,132
|
)
|
||||||
Participant contributions
|
—
|
|
|
—
|
|
|
432
|
|
|
421
|
|
|
432
|
|
|
421
|
|
||||||
Benefits paid
|
(8,584
|
)
|
|
(7,883
|
)
|
|
(1,732
|
)
|
|
(1,423
|
)
|
|
(10,316
|
)
|
|
(9,306
|
)
|
||||||
Plan curtailments
|
—
|
|
|
—
|
|
|
(1,608
|
)
|
|
—
|
|
|
(1,608
|
)
|
|
—
|
|
||||||
Projected benefit obligation—end of year
|
$
|
113,378
|
|
|
$
|
129,701
|
|
|
$
|
74,956
|
|
|
$
|
71,408
|
|
|
$
|
188,334
|
|
|
$
|
201,109
|
|
Change in plan assets and funded status:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Plan assets at fair value—beginning of year
|
$
|
86,016
|
|
|
$
|
74,367
|
|
|
$
|
38,817
|
|
|
$
|
36,414
|
|
|
$
|
124,833
|
|
|
$
|
110,781
|
|
Actual return on plan assets
|
10,438
|
|
|
13,995
|
|
|
3,172
|
|
|
2,504
|
|
|
13,610
|
|
|
16,499
|
|
||||||
Employer contributions
|
6,961
|
|
|
5,537
|
|
|
3,008
|
|
|
2,129
|
|
|
9,969
|
|
|
7,666
|
|
||||||
Participant contributions
|
—
|
|
|
—
|
|
|
432
|
|
|
421
|
|
|
432
|
|
|
421
|
|
||||||
Foreign exchange impact
|
—
|
|
|
—
|
|
|
(335
|
)
|
|
(1,228
|
)
|
|
(335
|
)
|
|
(1,228
|
)
|
||||||
Benefits paid
|
(8,584
|
)
|
|
(7,883
|
)
|
|
(1,732
|
)
|
|
(1,423
|
)
|
|
(10,316
|
)
|
|
(9,306
|
)
|
||||||
Plan assets at fair value—end of year
|
94,831
|
|
|
86,016
|
|
|
43,362
|
|
|
38,817
|
|
|
138,193
|
|
|
124,833
|
|
||||||
Projected benefit obligation—end of year
|
113,378
|
|
|
129,701
|
|
|
74,956
|
|
|
71,408
|
|
|
188,334
|
|
|
201,109
|
|
||||||
Underfunded status
|
$
|
(18,547
|
)
|
|
$
|
(43,685
|
)
|
|
$
|
(31,594
|
)
|
|
$
|
(32,591
|
)
|
|
$
|
(50,141
|
)
|
|
$
|
(76,276
|
)
|
Accumulated benefit obligation—end of year
|
$
|
113,378
|
|
|
$
|
129,701
|
|
|
$
|
71,513
|
|
|
$
|
66,287
|
|
|
$
|
184,891
|
|
|
$
|
195,988
|
|
Amounts recognized in the balance sheet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-current liability
|
$
|
(18,547
|
)
|
|
$
|
(43,685
|
)
|
|
$
|
(31,594
|
)
|
|
$
|
(32,591
|
)
|
|
$
|
(50,141
|
)
|
|
$
|
(76,276
|
)
|
Amounts in accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrecognized actuarial loss
|
$
|
55,180
|
|
|
$
|
75,370
|
|
|
$
|
19,177
|
|
|
$
|
21,068
|
|
|
$
|
74,357
|
|
|
$
|
96,438
|
|
|
U.S. Plan
|
|
International Plans
|
||||||||
|
September 30,
|
||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Asset category:
|
|
|
|
|
|
|
|
||||
Equity securities
|
62
|
%
|
|
65
|
%
|
|
51
|
%
|
|
46
|
%
|
Fixed income securities
|
38
|
%
|
|
33
|
%
|
|
27
|
%
|
|
27
|
%
|
Insurance company
|
—
|
%
|
|
—
|
%
|
|
19
|
%
|
|
25
|
%
|
Cash
|
—
|
%
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
U.S. Plan
|
|
International
Plans
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Year ending September 30,
|
|
|
|
|
|
||||||
2014
|
$
|
4,898
|
|
|
$
|
1,727
|
|
|
$
|
6,625
|
|
2015
|
5,286
|
|
|
1,785
|
|
|
7,071
|
|
|||
2016
|
5,698
|
|
|
1,947
|
|
|
7,645
|
|
|||
2017
|
6,141
|
|
|
2,140
|
|
|
8,281
|
|
|||
2018
|
6,633
|
|
|
2,514
|
|
|
9,147
|
|
|||
2019 to 2023
|
40,715
|
|
|
18,620
|
|
|
59,335
|
|
|
September 30, 2013
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
U.S. plan assets-common/collective trusts:
|
|
|
|
|
|
|
|
||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury, agency and other local government and non-corporate
|
$
|
—
|
|
|
$
|
15,690
|
|
|
$
|
—
|
|
|
$
|
15,690
|
|
Mortgage-backed
|
—
|
|
|
10,179
|
|
|
—
|
|
|
10,179
|
|
||||
Corporate investment grade
|
—
|
|
|
9,254
|
|
|
—
|
|
|
9,254
|
|
||||
Corporate high yield
|
—
|
|
|
941
|
|
|
—
|
|
|
941
|
|
||||
U.S. equity securities:
|
|
|
|
|
|
|
|
||||||||
Large capitalization stocks
|
—
|
|
|
37,567
|
|
|
—
|
|
|
37,567
|
|
||||
Small capitalization stocks
|
—
|
|
|
9,553
|
|
|
—
|
|
|
9,553
|
|
||||
U.S. real estate investment trusts
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
||||
International equity securities:
|
|
|
|
|
|
|
|
||||||||
Large/mid capitalization stocks
|
—
|
|
|
11,294
|
|
|
—
|
|
|
11,294
|
|
||||
Small capitalization stocks
|
—
|
|
|
110
|
|
|
—
|
|
|
110
|
|
||||
Emerging large/mid capitalization stocks
|
—
|
|
|
83
|
|
|
—
|
|
|
83
|
|
||||
Commodities
|
—
|
|
|
83
|
|
|
—
|
|
|
83
|
|
||||
|
$
|
—
|
|
|
$
|
94,831
|
|
|
$
|
—
|
|
|
$
|
94,831
|
|
|
September 30, 2013
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
International plan assets:
|
|
|
|
|
|
|
|
||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
Government
|
$
|
6,455
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,455
|
|
Europe corporate investment grade
|
5,390
|
|
|
—
|
|
|
—
|
|
|
5,390
|
|
||||
Europe large capitalization stocks
|
21,952
|
|
|
—
|
|
|
—
|
|
|
21,952
|
|
||||
Insurance company funds (1)
|
—
|
|
|
8,429
|
|
|
—
|
|
|
8,429
|
|
||||
Cash
|
1,136
|
|
|
—
|
|
|
—
|
|
|
1,136
|
|
||||
|
$
|
34,933
|
|
|
$
|
8,429
|
|
|
$
|
—
|
|
|
$
|
43,362
|
|
|
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%
.
|
•
|
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
®
.
|
|
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.
|
|
Performance-Based RSUs
|
|
Time-Based RSUs
|
||||
|
(in thousands)
|
||||||
Number Granted
|
341
|
|
|
748
|
|
||
Intrinsic Value
|
$
|
10,959
|
|
|
$
|
24,060
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Revenue
|
$
|
1,293,541
|
|
|
$
|
1,255,679
|
|
|
$
|
1,166,949
|
|
|
$
|
1,010,049
|
|
|
$
|
938,185
|
|
Gross margin
|
920,502
|
|
|
883,551
|
|
|
810,181
|
|
|
702,354
|
|
|
628,426
|
|
|||||
Operating income (2)
|
127,324
|
|
|
128,096
|
|
|
117,114
|
|
|
74,775
|
|
|
19,295
|
|
|||||
Net income (loss) (2) (3)
|
143,769
|
|
|
(35,398
|
)
|
|
85,424
|
|
|
24,368
|
|
|
31,522
|
|
|||||
Earnings (loss) per share—Basic (2) (3)
|
1.20
|
|
|
(0.30
|
)
|
|
0.73
|
|
|
0.21
|
|
|
0.27
|
|
|||||
Earnings (loss) per share—Diluted (2) (3)
|
1.19
|
|
|
(0.30
|
)
|
|
0.71
|
|
|
0.20
|
|
|
0.27
|
|
|||||
Total assets
|
1,828,906
|
|
|
1,791,634
|
|
|
1,629,682
|
|
|
1,307,064
|
|
|
1,350,212
|
|
|||||
Working capital (4)
|
151,603
|
|
|
397,408
|
|
|
126,940
|
|
|
115,263
|
|
|
112,915
|
|
|||||
Long-term liabilities
|
373,813
|
|
|
512,631
|
|
|
341,668
|
|
|
106,766
|
|
|
155,080
|
|
|||||
Stockholders’ equity
|
926,480
|
|
|
797,259
|
|
|
822,690
|
|
|
747,304
|
|
|
761,581
|
|
|
September 30,
2013
|
|
June 29,
2013
|
|
March 30,
2013
|
|
December 29,
2012
|
||||||||
Revenue
|
$
|
344,845
|
|
|
$
|
314,996
|
|
|
$
|
313,949
|
|
|
$
|
319,751
|
|
Gross margin
|
253,316
|
|
|
223,828
|
|
|
220,679
|
|
|
222,679
|
|
||||
Operating income (2)
|
49,006
|
|
|
43,215
|
|
|
21,244
|
|
|
13,859
|
|
||||
Net income (2) (3)
|
56,466
|
|
|
34,455
|
|
|
17,037
|
|
|
35,811
|
|
||||
Earnings per share (2) (3):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.47
|
|
|
$
|
0.29
|
|
|
$
|
0.14
|
|
|
$
|
0.30
|
|
Diluted
|
$
|
0.47
|
|
|
$
|
0.29
|
|
|
$
|
0.14
|
|
|
$
|
0.29
|
|
Common Stock prices: (5)
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
28.84
|
|
|
$
|
25.32
|
|
|
$
|
26.06
|
|
|
$
|
23.10
|
|
Low
|
$
|
25.15
|
|
|
$
|
21.84
|
|
|
$
|
22.51
|
|
|
$
|
19.00
|
|
|
September 30,
2012
|
|
June 30,
2012
|
|
March 31,
2012
|
|
December 31, 2011
|
||||||||
Revenue
|
$
|
325,295
|
|
|
$
|
310,983
|
|
|
$
|
301,125
|
|
|
$
|
318,276
|
|
Gross margin
|
237,456
|
|
|
218,129
|
|
|
207,909
|
|
|
220,057
|
|
||||
Operating income (2)
|
57,605
|
|
|
31,083
|
|
|
6,903
|
|
|
32,505
|
|
||||
Net income (loss) (2) (3)
|
(83,985
|
)
|
|
22,895
|
|
|
3,569
|
|
|
22,123
|
|
||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.71
|
)
|
|
$
|
0.19
|
|
|
$
|
0.03
|
|
|
$
|
0.19
|
|
Diluted
|
$
|
(0.71
|
)
|
|
$
|
0.19
|
|
|
$
|
0.03
|
|
|
$
|
0.18
|
|
Common Stock prices: (5)
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
24.30
|
|
|
$
|
28.50
|
|
|
$
|
28.50
|
|
|
$
|
22.00
|
|
Low
|
$
|
17.96
|
|
|
$
|
18.95
|
|
|
$
|
17.98
|
|
|
$
|
14.52
|
|
(1)
|
The consolidated financial position and results of operations data reflect our acquisitions of Servigistics on October 2, 2012 for $220.8 million in cash and MKS on May 31, 2011 for $265.2 million in cash, as well as certain other less significant businesses during these periods. Results of operations for the acquired businesses have been included in the consolidated statements of operations since their acquisition dates.
|
(2)
|
Operating income and net income in 2013 includes restructuring charges of $52.2 million ($17.9 million in the quarter ended September 30, 2013, $3.1 million in the quarter ended June 29, 2013, $15.8 million in the quarter ended March 30, 2013 and $15.4 million in the quarter ended December 29, 2012). Operating income and net income (loss) in 2012 includes restructuring charges of $24.9 million ($4.1 million recorded in the quarter ended June 30, 2012 and $20.8 million recorded in the quarter ended March 31, 2012).
|
(3)
|
Net income in 2013 includes non-cash tax benefits totaling $44.6 million related to the reversal of a portion of the valuation allowance in the U.S. related to the impact on deferred taxes in accounting for acquisitions and accounting for the U.S. pension plan ($12.0 million in the quarter ended September 30, 2013 and $32.6 million in the quarter ended December 29, 2012). The net loss in 2012 includes a non-cash net tax provision of $124.5 million recorded in the quarter ended September 30, 2012 to establish a valuation allowance against our U.S. net deferred tax assets.
|
(4)
|
Working capital in 2012 includes funds borrowed under our credit facility to fund our acquisition of Servigistics, (approximately $220 million) which closed on October 2, 2012.
|
(5)
|
The common stock prices are based on the Nasdaq Global Select Market daily high and low sale prices. Our common stock is traded on the Nasdaq Global Select Market under the symbol “PMTC” ("PTC" effective in December 2013).
|
PTC INC.
By:
/s/ Barry Cohen
Executive Vice President, Strategy
|
JAMES HEPPELMANN
/s/ James Heppelmann
President and Chief Executive Officer
|
Accept Award
|
Decline Award
|
Name
|
|
Place of Formation
|
Parametric Technology Australia Pty. Limited
|
|
Australia
|
Parametric Technology Gesellschaft, m.b.H.
|
|
Austria
|
MCA Solutions BVBA
|
|
Belgium
|
Parametric Technology (Belgium) b.v.b.a.
|
|
Belgium
|
Parametric Technology Brasil Ltda.
|
|
Brazil
|
Enigma Information Retrieval Systems, Inc. (Canada branch)
|
|
Canada
|
PTC (Canada) Inc.
|
|
Canada
|
Parametric Technology (Shanghai) Software Co. Ltd.
|
|
China
|
Servigistics (Shanghai) Co., Ltd.
|
|
China
|
Parametric Technology (C.R.) s.r.o.
|
|
Czech Republic
|
Parametric Holdings Inc.
|
|
Delaware
|
Parametric Technology International, Inc.
|
|
Delaware
|
PTC Netherlands LLC
|
|
Delaware
|
Parametric Technology (Denmark) A/S
|
|
Denmark
|
Parametric Technology S.A.
|
|
France
|
Servigistics SA
|
|
France
|
Parametric Technology GmbH
|
|
Germany
|
Parametric Technology (Hong Kong) Ltd.
|
|
Hong Kong
|
4 C Solutions Private Limited
|
|
India
|
Parametric Technology (India) Private Ltd.
|
|
India
|
PTC Software (India) Private Limited
|
|
India
|
Servigistics Development India Private Limited
|
|
India
|
Parametric Holdings (Ireland) Ltd.
|
|
Ireland
|
Parametric Technology (Republic of Ireland) Ltd.
|
|
Ireland
|
PTC (IFSC) Limited
|
|
Ireland
|
PTC (SSI) Limited
|
|
Ireland
|
ASAP Internet Information Filtering Technology Ltd.
|
|
Israel
|
Enigma Information Systems Ltd.
|
|
Israel
|
Parametric Technology Israel Ltd.
|
|
Israel
|
Parametric Technology Italia S.r.l.
|
|
Italy
|
PTC Japan KK
|
|
Japan
|
Parametric Korea Co., Ltd.
|
|
Korea
|
Parametric Technology Corporation (Malaysia) Sdn. Bhd.
|
|
Malaysia
|
Parametric Technology Corporation
|
|
Massachusetts
|
PTC International, Inc.
|
|
Massachusetts
|
CV Holding (Mauritius) Ltd.
|
|
Mauritius
|
Parametric Technology Mexico, S.A. de C.V.
|
|
Mexico
|
Enigma Europe B.V.
|
|
Netherlands
|
Parametric Technology Europe B.V.
|
|
Netherlands
|
Parametric Technology Nederland B.V.
|
|
Netherlands
|
PTC Netherlands C.V.
|
|
Netherlands
|
PTC Eastern Europe Limited S.R.L.
|
|
Romania
|
PTC International Limited Liability Company
|
|
Russia
|
Enigma Europe B.V. (Singapore Branch)
|
|
Singapore
|
MKS Software Pte. Ltd.
|
|
Singapore
|
Parametric Technology Singapore Pte. Ltd.
|
|
Singapore
|
Parametric Technology (Slovakia) s.r.o.
|
|
Slovak Republic
|
Parametric Technology South Africa (Propretary) Limited
|
|
South Africa
|
Parametric Technology Espana, S.A.
|
|
Spain
|
Enigma Information Retrieval Systems AB
|
|
Sweden
|
PTC Sweden AB
|
|
Sweden
|
Parametric Technology (Schweiz) AG
|
|
Switzerland
|
Parametric Technology Taiwan Ltd.
|
|
Taiwan
|
4 C Solutions UK Limited
|
|
United Kingdom
|
Enigma Information Retrieval Systems Ltd.
|
|
United Kingdom
|
Logistics Business Systems Limited
|
|
United Kingdom
|
MKS Systems Limited
|
|
United Kingdom
|
NC Graphics (Cambridge) Limited
|
|
United Kingdom
|
Parametric Holdings (UK) Limited
|
|
United Kingdom
|
Parametric Technology (UK) Limited
|
|
United Kingdom
|
Relex Software (Europe) Limited
|
|
United Kingdom
|
Servigistics Limited
|
|
United Kingdom
|
|
|
|
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Date:
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November 22, 2013
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/S/ JAMES HEPPELMANN
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James Heppelmann
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President and Chief Executive Officer
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Date:
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November 22, 2013
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/S/ JEFFREY GLIDDEN
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Jeffrey Glidden
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Executive Vice President and Chief Financial Officer
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Date:
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November 22, 2013
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/S/ JAMES HEPPELMANN
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James Heppelmann
President and Chief Executive Officer
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Date:
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November 22, 2013
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/S/ JEFFREY GLIDDEN
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Jeffrey Glidden
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Executive Vice President and Chief Financial Officer
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