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Segments and Major Customers
 12 Months Ended
Dec. 31, 2012
Segment Reporting [Abstract]  
Business Segments and Major Customers
Segments and Major Customers
Operating segments are based upon Rambus' internal organization structure, the manner in which its operations are managed, the criteria used by its Chief Operating Decision Maker ("CODM") to evaluate segment performance and availability of separate financial information regularly reviewed for resource allocation and performance assessment.
Following the completion of the internal reorganization structure announced in the third quarter of 2012, in the fourth quarter of 2012, the Company determined its CODM to be the Chief Executive Officer and determined its operating segments to be: (1) MID, which focuses on the design, development and licensing of technology that is related to memory and interfaces; (2) CRI, which focuses on the design, development and licensing of technologies for chip and system security and anti-counterfeiting; (3) LDT, which focuses on the design, development and licensing of technologies for lighting and displays; and (4) CTO, which is a centralized research and development and business incubation organization that consolidates early-stage investments, longer-term research activities and worldwide engineering, including MTD. For the year ended December 31, 2012, only MID and CTO were considered reportable segments as they met the quantitative thresholds for disclosure as reportable segments. The results of the remaining other operating segments were not material and were therefore combined and shown under “All Other”.
The Company evaluates the performance of its segments based on segment operating income (loss), which is defined as customer licensing income ("CLI") minus segment operating expenses. Segment operating expenses are comprised of direct operating expenses and the allocation of certain engineering expenses.
CLI is defined as total cash royalties received from its customers under its licensing agreements with them. Prior to the second quarter of 2011, the Company bifurcated royalty payments that it received from Samsung between revenue and gain from settlement, which was reflected as reducing operating expenses. The Company has combined revenue from its customers, including Samsung, and the gain from the Samsung settlement as customer licensing income to reflect the total amounts received from all of its customers for the periods presented. In addition, customer licensing income includes other patent royalties received but not recognized as revenue. In both the third quarter of 2012 and the fourth quarter of 2012, a receipt of a patent royalty payment from a customer was not recognized as revenue as not all revenue recognition criteria were met during the period.  Additionally, since the third quarter of 2011, the Company has received patent royalty payments from certain patent license agreements assumed in the acquisition of CRI which were treated as favorable contracts. Cash received from these acquired favorable contracts reduced the favorable contract intangible asset on the Company's balance sheet. The Company has combined these cash royalty payments as CLI to reflect the total amounts received from its customers.
Segment operating expenses do not include gain from settlement discussed above, marketing, general and administrative expenses and the allocation of certain expenses managed at the corporate level, such as stock-based compensation, amortization, and certain bonus and acquisition costs. The “Reconciling Items” category includes these unallocated marketing, general and administrative expenses as well as corporate level expenses. The presentation of the 2011 and 2010 segment data has been updated accordingly to conform with the 2012 segment operating income (loss) definition.
The tables below present reported segment operating income (loss) for the years ended December 31, 2012, 2011 and 2010:
 
For the Year Ended December 31, 2012
 
MID
 
CTO
 
All Other
 
Total
 
(In thousands)
Revenue
$
215,047

 
$
—

 
$
19,004

 
$
234,051

Gain from settlement
—

 
—

 
—

 
—

Other patent royalties received
7,500

 
—

 
5,165

 
12,665

Customer licensing income
$
222,547

 
$
—

 
$
24,169

 
$
246,716

Segment operating expenses
37,353

 
28,106

 
32,941

 
98,400

Segment operating income (loss)
$
185,194

 
$
(28,106
)
 
$
(8,772
)
 
$
148,316

Reconciling items
 
 
 
 
 
 
(238,750
)
Operating loss
 
 
 
 
 
 
$
(90,434
)
Interest and other expense, net
 
 
 
 
 
 
(27,451
)
Loss before income taxes
 
 
 
 
 
 
$
(117,885
)
 
For the Year Ended December 31, 2011
 
MID
 
CTO
 
All Other
 
Total
 
(In thousands)
Revenue
$
292,074

 
$
—

 
$
20,289

 
$
312,363

Gain from settlement
6,200

 
—

 
—

 
6,200

Other patent royalties received
(3,000
)
 
—

 
2,250

 
(750
)
Customer licensing income
$
295,274

 
$
—

 
$
22,539

 
$
317,813

Segment operating expenses
45,670

 
17,771

 
20,631

 
84,072

Segment operating income (loss)
$
249,604

 
$
(17,771
)
 
$
1,908

 
$
233,741

Reconciling items
 
 
 
 
 
 
(235,277
)
Operating loss
 
 
 
 
 
 
$
(1,536
)
Interest and other expense, net
 
 
 
 
 
 
(24,265
)
Loss before income taxes
 
 
 
 
 
 
$
(25,801
)
 
For the Year Ended December 31, 2010
 
MID
 
CTO
 
All Other
 
Total
 
(In thousands)
Revenue
$
323,038

 
$
—

 
$
352

 
$
323,390

Gain from settlement
126,800

 
—

 
—

 
126,800

Other patent royalties received
—

 
—

 
—

 
—

Customer licensing income
$
449,838

 
$
—

 
$
352

 
$
450,190

Segment operating expenses
45,174

 
15,392

 
7,999

 
68,565

Segment operating income (loss)
$
404,664

 
$
(15,392
)
 
$
(7,647
)
 
$
381,625

Reconciling items
 
 
 
 
 
 
(154,743
)
Operating income
 
 
 
 
 
 
$
226,882

Interest and other expense, net
 
 
 
 
 
 
(18,838
)
Income before income taxes
 
 
 
 
 
 
$
208,044

The Company’s CODM does not review information regarding assets on an operating segment basis. Additionally, the Company does not record intersegment revenue or expense.
Revenue from the Company’s major customers representing 10% or more of total revenue for the years ended December 31, 2012, 2011 and 2010 were as follows:
 
Years Ended December 31,
 
2012
 
2011
 
2010
Customer A
38
%
 
30
%
 
56
%
Customer B
*

 
11
%
 
*

Customer C
*

 
10
%
 
15
%
_________________________________________
* Customer accounted for less than 10% of total revenue in the period
Revenue from customers in the geographic regions based on the location of customers' headquarters is as follows:
 
Years Ended December 31,
 
2012
 
2011
 
2010
 
(In thousands)
South Korea
$
88,971

 
$
94,197

 
$
181,865

USA
63,398

 
103,367

 
23,528

Japan
63,686

 
97,726

 
117,101

Canada
7,759

 
14,750

 
592

Europe
5,236

 
1,992

 
157

Other
5,001

 
331

 
147

Total
$
234,051

 
$
312,363

 
$
323,390


At December 31, 2012, of the $86.9 million of total property, plant and equipment, approximately $85.8 million are located in the United States, $1.0 million are located in India and $0.1 million were located in other foreign locations. At December 31, 2011, of the $81.1 million of total property, plant and equipment, approximately $79.8 million are located in the United States, $1.2 million are located in India and $0.1 million were located in other foreign locations.