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

6 Months Ended

Dec. 31, 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 December 31,								Six months ended December 31,
(Dollar amounts in thousands)	2017				2016				2017				2016
Revenues:
Korea	$	270,184	28	%	$	96,846	11	%	$	544,862	28	%	$	231,935	14	%
Taiwan	216,791		22	%	336,058		38	%	355,350		18	%	609,750		37	%
Japan	154,762		16	%	67,855		8	%	301,197		15	%	172,639		11	%
North America	149,042		15	%	153,162		17	%	278,292		14	%	240,428		15	%
Europe & Israel	82,158		8	%	93,440		11	%	165,663		9	%	128,288		8	%
China	66,460		7	%	73,152		9	%	234,799		12	%	158,841		10	%
Rest of Asia	36,425		4	%	56,372		6	%	65,240		4	%	85,677		5	%
Total	$	975,822	100	%	$	876,885	100	%	$	1,945,403	100	%	$	1,627,558	100	%

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



	Three months ended December 31,								Six months ended December 31,
(Dollar amounts in thousands)	2017				2016				2017				2016
Revenues:
Wafer Inspection	$	400,584	41	%	$	428,875	49	%	$	790,004	41	%	$	784,736	48	%
Patterning	274,868		28	%	223,796		26	%	569,218		29	%	396,409		24	%
Global Service and Support⁽¹⁾	273,805		28	%	217,249		24	%	534,303		27	%	425,235		26	%
Other	26,565		3	%	6,965		1	%	51,878		3	%	21,178		2	%
Total	$	975,822	100	%	$	876,885	100	%	$	1,945,403	100	%	$	1,627,558	100	%

__________________

(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 December 31, 2017, one customer accounted for approximately 17% of total revenues. In the three months ended December 31, 2016, two customers accounted for approximately 31% and 13% of total revenues. In the six months ended December 31, 2017, one customer accounted for approximately 22% of total revenues. In the six months ended December 31, 2016, two customers accounted for approximately 30% and 11% of total revenues. Two customers on an individual basis accounted for greater than 10% of net accounts receivables as of December 31, 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 December 31, 2017		As of June 30, 2017
Long-lived assets:
United States	$	186,104	$	191,096
Singapore	41,924		39,118
Israel	28,658		30,182
Europe	13,335		13,300
Rest of Asia	11,613		10,279
Total	$	281,634	$	283,975