KLA Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting and Geographic Information

Segment Reporting and Geographic Information

9 Months Ended

Mar. 31, 2019

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

NOTE 17 – SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

While we operate our business in multiple operating segments, we have only one reportable segment. 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.

Our chief operating decision maker, who is our Chief Executive Officer, is in the process of completing an assessment of our reporting structure as of the filing date of this Quarterly Report on Form 10-Q. We are in the process of determining the related impacts to our determination of operating and reportable segments. Accordingly, the disclosures for the three and nine months ending March 31, 2019 reflects the current segment reporting disclosures of our operations with Orbotech presented as a separate component, where noted. We currently expect to complete our assessment of our segment reporting structure within the fourth quarter.

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. Our 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 we operate in one reportable segment, all financial segment information required by the authoritative guidance can be found in the condensed consolidated financial statements.

Our significant operations outside the United States include manufacturing facilities in China, Germany, Israel and Singapore and sales, marketing and service offices in Japan, the rest of the Asia Pacific region and Europe. 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:



	Three months ended March 31,								Nine months ended March 31,
(Dollar amounts in thousands)	2019				2018				2019				2018
Revenues:
Taiwan	$	275,507	25	%	$	156,428	15	%	$	796,478	24	%	$	511,778	17	%
China	206,164		19	%	143,761		14	%	816,176		25	%	378,560		13	%
Korea	196,490		18	%	314,062		31	%	476,959		14	%	858,924		29	%
North America	156,824		14	%	113,477		11	%	409,066		12	%	391,769		13	%
Japan	146,069		13	%	199,066		19	%	461,930		14	%	500,263		17	%
Europe and Israel	76,054		7	%	53,043		6	%	228,341		7	%	218,706		7	%
Rest of Asia	40,203		4	%	41,457		4	%	121,519		4	%	106,697		4	%
Total	$	1,097,311	100	%	$	1,021,294	100	%	$	3,310,469	100	%	$	2,966,697	100	%

The following is a summary of revenues by major products and for Orbotech in total for the indicated periods (as a percentage of total revenues):



	Three months ended March 31,								Nine months ended March 31,
(Dollar amounts in thousands)	2019				2018				2019				2018
Revenues:
Wafer Inspection	$	334,070	30	%	$	486,662	48	%	$	1,312,261	40	%	$	1,276,666	43	%
Patterning	285,815		26	%	251,253		25	%	884,021		27	%	820,471		28	%
Global Service and Support⁽¹⁾	287,116		26	%	262,389		26	%	855,309		26	%	796,692		27	%
Orbotech	161,344		15	%	—		—	%	161,344		5	%	—		—	%
Other	28,966		3	%	20,990		1	%	97,534		2	%	72,868		2	%
Total	$	1,097,311	100	%	$	1,021,294	100	%	$	3,310,469	100	%	$	2,966,697	100	%

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(1) The Global Service and Support revenues include service revenues as presented in the Condensed Consolidated Statements of Operations as well as certain product revenues, primarily revenues from our K-T Pro business.

In the three months ended March 31, 2019, one customer accounted for approximately 19% of total revenues. In the three months ended March 31, 2018, two customers accounted for approximately 22% and 11% of total revenues. In the nine months ended March 31, 2019, two customers accounted for approximately 15% and 11% of total revenues. In the nine months ended March 31, 2018, one customer accounted for approximately 22% of total revenues. One and three customers on an individual basis accounted for greater than 10% of net accounts receivables as of March 31, 2019 and June 30, 2018, respectively.

Long-lived assets by geographic region as of the dates indicated below were as follows:



(In thousands)	As of March 31, 2019		As of June 30, 2018
Long-lived assets:
United States	$	222,444	$	187,352
Singapore	49,764		47,009
Israel	65,113		26,980
Europe	57,096		12,924
Rest of Asia	17,435		12,041
Total	$	411,852	$	286,306