12 Business Segment Information

The Company’s business activities, for which discrete financial information is available, are regularly reviewed and evaluated by the chief operating decision maker. As a result of this evaluation, the Company determined that it has two operating segments: Waters^TM and TA^TM.

The Waters operating segment is primarily in the business of designing, manufacturing, distributing and servicing LC and MS instruments, columns and other precision chemistry consumables that can be integrated and used along with other analytical instruments. The TA operating segment is primarily in the business of designing, manufacturing, distributing and servicing thermal analysis, rheometry and calorimetry instruments. The Company’s two operating segments have similar economic characteristics; product processes; products and services; types and classes of customers; methods of distribution; and regulatory environments. Because of these similarities, the two segments have been aggregated into one reporting segment for financial statement purposes. Please refer to the consolidated financial statements for financial information regarding the one reportable segment of the Company.

Net sales for the Company’s products and services are as follows for the three and six months ended June 30, 2018 and July 1, 2017 (in thousands):


	Three Months Ended				Six Months Ended
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
Product net sales:
Waters instrument systems	$	239,928	$	238,548	$	438,031	$	436,337
Chemistry consumables		99,129		90,824		197,839		178,727
TA instrument systems		49,812		43,466		92,116		82,070

Total product sales		388,869		372,838		727,986		697,134
Service net sales:
Waters service		188,248		168,408		362,581		326,142
TA service		19,102		17,004		36,322		32,943

Total service sales		207,350		185,412		398,903		359,085

Total net sales	$	596,219	$	558,250	$	1,126,889	$	1,056,219

Geographic sales information is presented below for the three and six months ended June 30, 2018 and July 1, 2017 (in thousands):


	Three Months Ended				Six Months Ended
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
Net Sales:
Asia:
China	$	109,709	$	94,104	$	203,537	$	179,226
Japan		43,183		41,559		85,948		82,856
Asia Other		84,013		80,040		147,700		148,727

Total Asia		236,905		215,703		437,185		410,809
Americas:
United States		161,485		164,374		308,306		303,608
Americas Other		36,641		32,212		71,530		67,628

Total Americas		198,126		196,586		379,836		371,236
Europe		161,188		145,961		309,868		274,174

Total net sales	$	596,219	$	558,250	$	1,126,889	$	1,056,219

Net sales by customer class are as follows for the three and six months ended June 30, 2018 and July 1, 2017 (in thousands):


	Three Months Ended				Six Months Ended
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
Pharmaceutical	$	338,354	$	319,650	$	643,682	$	599,460
Industrial		183,664		174,531		345,994		335,834
Governmental and academic		74,201		64,069		137,213		120,925

Total net sales	$	596,219	$	558,250	$	1,126,889	$	1,056,219

Net sales for the Company recognized at a point in time versus over time are as follows for the three and six months ended June 30, 2018 and July 1, 2017 (in thousands):


	Three Months Ended				Six Months Ended
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
Net sales recognized at a point in time:
Instrument systems	$	289,740	$	282,014	$	530,147	$	518,407
Chemistry consumables		99,129		90,824		197,839		178,727
Service sales recognized at a point in time (time & materials)		80,397		72,937		152,915		140,439

Total net sales recognized at a point in time		469,266		445,775		880,901		837,573
Net sales recognized over time:
Service and software sales recognized over time (contracts)		126,953		112,475		245,988		218,646

Total net sales	$	596,219	$	558,250	$	1,126,889	$	1,056,219