Annual report pursuant to Section 13 and 15(d)

Segment Reporting and Geographic Information

v3.5.0.2
Segment Reporting and Geographic Information
 12 Months Ended
Jun. 30, 2016
Segment Reporting Information, Additional Information [Abstract]  
Segment Reporting and Geographic Information
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
KLA-Tencor reports one reportable segment in accordance with the provisions of the authoritative guidance for segment reporting. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. KLA-Tencor’s chief operating decision maker is its Chief Executive Officer. The Company is engaged primarily in designing, manufacturing and marketing process control and yield management solutions for the semiconductor and related nanoelectronics industries.
The Company has made certain organizational changes and consolidated its product divisions effective in the first quarter of fiscal year ended 2016. As a result, the Company has four operating segments which primarily reflect how it is organized by product offerings: Wafer Inspection, Patterning, Global Service and Support, and Others. Accordingly, the Company has recast its financial information and disclosures for prior periods to be consistent with the current operating structure.
All operating segments have been aggregated due to their inter-dependencies, commonality of long-term economic characteristics, products and services, the production processes, class of customer and distribution processes. The Company’s service products are an extension of the system product portfolio and provide customers with spare parts and fab management services (including system preventive maintenance and optimization services) to improve yield, increase production uptime and throughput, and lower the cost of ownership. Since the Company operates in one reportable segment, all financial segment information required by the authoritative guidance can be found in the consolidated financial statements.
The Company’s significant operations outside the United States include manufacturing facilities in Singapore, Israel, Germany and China and sales, marketing and service offices in Western Europe, Japan and the Asia Pacific regions. For geographical revenue reporting, revenues are attributed to the geographic location in which the customer is located. Long-lived assets consist of land, property and equipment, net and are attributed to the geographic region in which they are located.
The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods (as a percentage of total revenues):
(Dollar amounts in thousands)
Year ended June 30,
2016
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Taiwan
$
894,557

 
30
%
 
$
691,482

 
25
%
 
$
741,470

 
25
%
North America
521,335

 
18
%
 
815,914

 
29
%
 
705,159

 
24
%
Japan
444,216

 
15
%
 
426,963

 
15
%
 
334,653

 
11
%
China
430,074

 
14
%
 
162,669

 
6
%
 
260,089

 
9
%
Korea
367,905

 
12
%
 
405,320

 
14
%
 
371,139

 
13
%
Europe & Israel
167,936

 
6
%
 
194,670

 
7
%
 
306,779

 
11
%
Rest of Asia
158,470

 
5
%
 
117,031

 
4
%
 
210,119

 
7
%
Total
$
2,984,493

 
100
%
 
$
2,814,049

 
100
%
 
$
2,929,408

 
100
%

The following is a summary of revenues by major products for the indicated periods (as a percentage of total revenues):
(Dollar amounts in thousands)
Year ended June 30,
2016
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Wafer Inspection
$
1,293,922

 
43
%
 
$
1,224,858

 
44
%
 
$
1,466,275

 
50
%
Patterning
772,045

 
26
%
 
736,959

 
26
%
 
705,473

 
24
%
Global Service and Support (1)
824,297

 
28
%
 
752,881

 
27
%
 
685,658

 
23
%
Other
94,229

 
3
%
 
99,351

 
3
%
 
72,002

 
3
%
Total
$
2,984,493

 
100
%
 
$
2,814,049

 
100
%
 
$
2,929,408

 
100
%
__________________ 
(1) The Global Service and Support revenues includes service revenues as presented in the consolidated statements of operations as well as certain product revenues, primarily revenues from the Company’s K-T Certified business.
In the fiscal year ended June 30, 2016, two customers accounted for approximately 18% and 10% of total revenues. In the fiscal year ended June 30, 2015, three customers accounted for approximately 15%, 12% and 11% of total revenues. In the fiscal year ended June 30, 2014, three customers accounted for approximately 18%, 14% and 11% of total revenues.
Long-lived assets by geographic region as of the dates indicated below were as follows:
 
As of June 30,
(In thousands)
2016
 
2015
Long-lived assets:
 
 
 
United States
$
182,597

 
$
207,779

Singapore
41,658

 
45,444

Israel
30,844

 
33,841

Europe
13,347

 
16,536

Rest of Asia
9,568

 
10,991

Total
$
278,014

 
$
314,591