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, 2018

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 March 31,								Nine months ended March 31,
(Dollar amounts in thousands)	2018				2017				2018				2017
Revenues:
Korea	$	314,062	31	%	$	160,439	18	%	$	858,924	29	%	$	392,374	15	%
Japan	199,066		19	%	86,683		9	%	500,263		17	%	259,322		10	%
Taiwan	156,428		15	%	310,847		34	%	511,778		17	%	920,597		36	%
China	143,761		14	%	115,860		13	%	378,560		13	%	274,701		11	%
North America	113,477		11	%	118,003		13	%	391,769		13	%	358,431		14	%
Europe & Israel	53,043		6	%	91,974		10	%	218,706		7	%	220,262		9	%
Rest of Asia	41,457		4	%	30,003		3	%	106,697		4	%	115,680		5	%
Total	$	1,021,294	100	%	$	913,809	100	%	$	2,966,697	100	%	$	2,541,367	100	%

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



	Three months ended March 31,								Nine months ended March 31,
(Dollar amounts in thousands)	2018				2017				2018				2017
Revenues:
Wafer Inspection	$	486,662	48	%	$	399,311	44	%	$	1,276,666	43	%	$	1,184,047	47	%
Patterning	251,253		25	%	272,784		30	%	820,471		28	%	669,193		26	%
Global Service and Support⁽¹⁾	262,389		26	%	230,873		25	%	796,692		27	%	656,109		26	%
Other	20,990		1	%	10,841		1	%	72,868		2	%	32,018		1	%
Total	$	1,021,294	100	%	$	913,809	100	%	$	2,966,697	100	%	$	2,541,367	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 March 31, 2018, two customer accounted for approximately 22% and 11% of total revenues. In the three months ended March 31, 2017, three customers accounted for approximately 22%, 13% and 12% of total revenues. In the nine months ended March 31, 2018, one customer accounted for approximately 22% of total revenues. In the nine months ended March 31, 2017, three customers accounted for approximately 27%, 11% and 11% of total revenues. Three customers and two customers on an individual basis accounted for greater than 10% of net accounts receivables as of March 31, 2018 and June 30, 2017, respectively.

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



(In thousands)	As of March 31, 2018		As of June 30, 2017
Long-lived assets:
United States	$	185,764	$	191,096
Singapore	44,911		39,118
Israel	27,744		30,182
Europe	13,091		13,300
Rest of Asia	12,986		10,279
Total	$	284,496	$	283,975