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Business Segments and Major Customers
 6 Months Ended
Jun. 30, 2011
Business Segments and Major Customers  
Business Segments and Major Customers

11. Business Segments and Major Customers

 

Prior to 2010, Rambus operated in a single industry segment, the design, development and licensing of memory and logic interfaces, lighting and optoelectronics, and other technologies. In 2010, the Company reorganized, and as a result, starting at the end of the fourth quarter of 2010, Rambus has two business groups:  Semiconductor Business Group (“SBG”) which focuses on the design, development and licensing of semiconductor technology, and New Business Group (“NBG”) which focuses on the design, development and licensing of lighting and display technologies, mobile, data security and other technologies. In addition, the Company acquired CRI during the second quarter of 2011 which is part of NBG.

 

The Company evaluates the performance of its segments based on segment operating income (loss). Segment operating income (loss) does not include the allocation of any corporate functions (including human resources, facilities, legal, finance, information technology, corporate development, general administration, corporate licensing and marketing expenses, corporate research and development expenses, and cost of restatement) to the segments. Certain expenses are not allocated to the operating segments because they are not considered in evaluating the segments’ operating performance. Such unallocated expenses include stock-based compensation expenses, depreciation and amortization expenses, and certain bonus and acquisition expenses which are managed at the corporate level. The “Reconciling Items” category includes these unallocated and corporate expenses.

 

The table below presents reported segment revenues, and reported segment operating income (loss).

 

 

 

For the Three months Ended June 30, 2011

 

For the Six months Ended June 30, 2011

 

 

 

SBG

 

NBG

 

Total

 

SBG

 

NBG

 

Total

 

 

 

(In thousands)

 

Revenues

 

$

65,775

 

$

439

 

$

66,214

 

$

128,151

 

$

590

 

$

128,741

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from settlement

 

$

—

 

$

—

 

$

—

 

$

6,200

 

$

—

 

$

6,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

56,462

 

$

(3,802

)

$

52,660

 

$

114,957

 

$

(6,823

)

$

108,134

 

Reconciling items

 

 

 

 

 

(55,168

)

 

 

 

 

(102,272

)

Total operating income (loss)

 

 

 

 

 

$

(2,508

)

 

 

 

 

$

5,862

 

 

 

 

For the Three months Ended June 30, 2010

 

For the Six months Ended June 30, 2010

 

 

 

SBG

 

NBG

 

Total

 

SBG

 

NBG

 

Total

 

 

 

(In thousands)

 

Revenues

 

$

38,675

 

$

187

 

$

38,862

 

$

200,539

 

$

187

 

$

200,726

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from settlement

 

$

10,300

 

$

—

 

$

10,300

 

$

106,200

 

$

—

 

$

106,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

40,077

 

$

(1,663

)

$

38,414

 

$

288,259

 

$

(2,583

)

$

285,676

 

Reconciling items

 

 

 

 

 

(45,087

)

 

 

 

 

(90,183

)

Total Operating income(loss)

 

 

 

 

 

$

(6,673

)

 

 

 

 

$

195,493

 

 

The Company’s chief operating decision maker is the executive management team and it does not review information regarding assets on an operating segment basis. Additionally, the Company does not record intersegment revenue or expense.

 

The table below presents a reconciliation of reportable segment profit (loss) to the Company’s consolidated income before income taxes.

 

 

 

For the Three months Ended

 

For the Six Months Ended

 

(in thousands)

 

June 30, 2011

 

June 30, 2011

 

SBG operating income

 

$

56,462

 

$

114,957

 

NBG operating loss

 

(3,802

)

(6,823

)

Unallocated amounts:

 

 

 

 

 

Corporate expenses

 

(30,868

)

(60,582

)

Unallocated expenses

 

(24,300

)

(41,690

)

Interest and other expense, net

 

(5,989

)

(11,813

)

Loss before income taxes

 

$

(8,497

)

$

(5,951

)

 

 

 

For the Three months Ended

 

For the Six Months Ended

 

(in thousands)

 

June 30, 2010

 

June 30, 2010

 

SBG operating income

 

$

40,077

 

$

288,259

 

NBG operating loss

 

(1,663

)

(2,583

)

Unallocated amounts:

 

 

 

 

 

Corporate expenses

 

(27,754

)

(54,406

)

Unallocated expenses

 

(17,333

)

(35,777

)

Interest and other expense, net

 

(3,424

)

(9,015

)

Income (loss) before income taxes

 

$

(10,097

)

$

186,478

 

 

Three customers accounted for 38%, 13% and 12%, respectively, of revenue in the three months ended June 30, 2011. Three customers accounted for 38%, 17% and 10%, respectively, of revenue in the three months ended June 30, 2010. Three customers accounted for 34%, 13% and 12%, respectively, of revenue in the six months ended June 30, 2011. One customer accounted for 76% of revenue in the six months ended June 30, 2010.

 

Rambus licenses its technologies and patents to customers in multiple geographic regions. Revenue from customers in the following geographic regions was recognized as follows:

 

 

 

Three Months Ended
 June 30,

 

Six Months Ended
 June 30,

 

(In thousands)

 

2011

 

2010

 

2011

 

2010

 

Japan

 

$

26,649

 

$

18,837

 

$

56,250

 

$

37,873

 

Korea

 

25,074

 

14,713

 

44,218

 

151,879

 

North America

 

14,469

 

5,292

 

28,096

 

10,777

 

Asia-Other

 

15

 

13

 

163

 

58

 

Europe

 

7

 

7

 

14

 

139

 

Total

 

$

66,214

 

$

38,862

 

$

128,741

 

$

200,726

 

 

At June 30, 2011, of the $71.2 million of total property, plant and equipment, approximately $70.3 million were located in the United States, $0.8 million were located in India and $0.1 million were located in other foreign locations. At December 31, 2010, of the $67.8 million of total property, plant and equipment, approximately $66.7 million were located in the United States, $1.0 million were located in India and $0.1 million were located in other foreign locations.