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

3 Months Ended

Sep. 30, 2017

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

NOTE 16 – 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.

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 condensed consolidated financial statements.

The Company’s 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 (as a percentage of total revenues):



	Three months ended September 30,
(Dollar amounts in thousands)	2017				2016
Revenues:
Korea	$	274,678	28	%	$	135,089	18	%
China	168,339		17	%	85,689		12	%
Japan	146,435		15	%	104,784		14	%
Taiwan	138,559		14	%	273,692		35	%
North America	129,250		13	%	87,266		12	%
Europe & Israel	83,505		9	%	34,848		5	%
Rest of Asia	28,815		4	%	29,305		4	%
Total	$	969,581	100	%	$	750,673	100	%

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



	Three months ended September 30,
(Dollar amounts in thousands)	2017				2016
Revenues:
Wafer Inspection	$	389,420	40	%	$	359,009	48	%
Patterning	294,350		30	%	172,614		23	%
Global Service and Support⁽¹⁾	260,498		27	%	207,986		28	%
Other	25,313		3	%	11,064		1	%
Total	$	969,581	100	%	$	750,673	100	%

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(1) The Global Service and Support revenues includes service revenues as presented in the condensed consolidated statements of operations as well as certain product revenues, primarily revenues from the Company’s K-T Pro business.

In the three months ended September 30, 2017, one customer accounted for approximately 28% of total revenues. In the three months ended September 30, 2016, three customers accounted for approximately 29%, 13% and 11% of total revenues. Two customers on an individual basis accounted for greater than 10% of net accounts receivables as of September 30, 2017 and June 30, 2017, respectively.

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



(In thousands)	As of September 30, 2017		As of June 30, 2017
Long-lived assets:
United States	$	185,000	$	191,096
Singapore	40,531		39,118
Israel	29,850		30,182
Europe	13,351		13,300
Rest of Asia	11,140		10,279
Total	$	279,872	$	283,975