19)	Business Segment, Geographic Area, Product and Significant Customer Information

The Company is a global provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes to improve process performance and productivity. The Company also provides services relating to the maintenance and repair of products it sells, software maintenance, installation services and training.

The Company’s Chief Operating Decision Maker (“CODM”) utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company, which is used in the decision making process to assess performance. Based upon the information provided to the CODM, the Company has determined it has two reportable segments.

Effective April 29, 2016, in conjunction with the Newport Merger, the Company changed its reportable segments based upon the organizational structure of the Company and how the CODM utilizes information provided to allocate resources and make decisions. The Company’s two reportable segments are the Vacuum & Analysis Division and the Light & Motion Division.

The Vacuum & Analysis Division provides a broad range of instruments, components, subsystems and software which are derived from the Company’s core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control and information technology, ozone generation and delivery, RF & DC power, reactive gas generation and vacuum technology.

The Light & Motion Division provides a broad range of instruments, components and subsystems which are derived from the Company’s core competencies in lasers, photonics, sub-micron positioning, vibration isolation and optics.

The Company derives its segment results directly from the manner in which results are reported in its management reporting system. The accounting policies that the Company uses to derive reportable segment results are substantially the same as those used for external reporting purposes. The Company does not disclose external or intersegment revenues separately by reportable segment as this information is not presented to the CODM for decision making purposes.

The following is net revenues by reportable segment:


	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Vacuum & Analysis Division	$	207,359	$	217,966	$	391,040	$	431,805
Light & Motion Division		118,502		—		118,502		—

	$	325,861	$	217,966	$	509,542	$	431,805

The following is a reconciliation of segment gross profit to consolidated net income:


	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
Gross profit by reportable segment:
Vacuum & Analysis Division	$	90,859		$	98,798	$	168,772		$	195,844
Light & Motion Division		45,054			—		45,054			—

Total gross profit by reportable segment		135,913			98,798		213,826			195,844
Operating expenses:
Research and development		28,214			17,567		45,441			34,247
Selling, general and administrative		71,429			33,269		105,379			64,136
Acquisition costs		8,205			—		10,699			30
Restructuring		24			219		24			1,007
Amortization of intangible assets		8,855			1,709		10,538			3,380

Income from operations		19,186			46,034		41,745			93,044
Interest and other (expense) income, net		(6,818	)		790		(5,572	)		1,294

Income before income taxes		12,368			46,824		36,173			94,338
Provision for income taxes		3,158			13,604		9,400			27,332

Net income	$	9,210		$	33,220	$	26,773		$	67,006

The following is capital expenditures by reportable segment for the three and six months ended June 30, 2016 and 2015:


	Vacuum & Analysis Division		Light & Motion Division		Total
Three Months Ended June 30, 2016:
Capital expenditures	$	3,036	$	2,072	$	5,108

Six Months Ended June 30, 2016:
Capital expenditures	$	5,192	$	2,072	$	7,264


	Vacuum & Analysis Division		Light & Motion Division		Total
Three Months Ended June 30, 2015:
Capital expenditures	$	2,830	$	—	$	2,830

Six Months Ended June 30, 2015:
Capital expenditures	$	5,334	$	—	$	5,334

The following is depreciation and amortization by reportable segment for the three and six months ended June 30, 2016 and 2015:


	Vacuum & Analysis Division		Light & Motion Division		Total
Three Months June 30, 2016:
Depreciation and amortization	$	5,209	$	11,221	$	16,430

Six Months Ended June 30, 2016:
Depreciation and amortization	$	10,487	$	11,221	$	21,708


	Vacuum & Analysis Division		Light & Motion Division		Total
Three Months Ended June 30, 2015:
Depreciation and amortization	$	5,550	$	—	$	5,550

Six Months Ended June 30, 2015:
Depreciation and amortization	$	11,082	$	—	$	11,082

Total income tax expense is impracticable to present by reportable segment because the necessary information is not available or used by the CODM.

The following is segment assets by reportable segment:


June 30, 2016:	Vacuum & Analysis Division		Light & Motion Division		Total
Segment assets:
Accounts receivable	$	124,629	$	109,322	$	233,951
Inventory		155,647		122,713		278,360

Total segment assets	$	280,276	$	232,035	$	512,311


December 31, 2015:	Vacuum & Analysis Division		Light & Motion Division		Total
Segment assets:
Accounts receivable	$	101,883	$	—	$	101,883
Inventory		152,631		—		152,631

Total segment assets	$	254,514	$	—	$	254,514

A reconciliation of segment assets to consolidated total assets is as follows:


	June 30, 2016		December 31, 2015
Total segment assets	$	512,311	$	254,514
Cash and cash equivalents and investments		440,878		658,237
Other current assets, including restricted cash		63,554		26,760
Property, plant and equipment, net		184,221		68,856
Goodwill and intangible assets, net		1,019,588		243,730
Other assets		24,576		21,250

Consolidated total assets	$	2,245,128	$	1,273,347

Goodwill associated with the Company’s reportable segments is as follows:


	June 30, 2016		December 31, 2015
Reportable segment:
Vacuum & Analysis Division	$	199,903	$	199,703
Light & Motion Division		392,702		—

Total goodwill	$	592,605	$	199,703

Worldwide Product Information

The Company groups its products into six groups of similar products based upon the similarity of product function. Worldwide net revenue for each group of products is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Instruments, Control & Vacuum Products	$	108,172	$	110,441	$	202,650	$	220,877
Power & Reactive Gas Products		83,854		92,977		160,970		181,476
Analytical Solutions Products		15,340		14,548		27,427		29,452
Photonics Products		45,864		—		45,864		—
Optics Products		35,263		—		35,263		—
Lasers Products		37,368		—		37,368		—

	$	325,861	$	217,966	$	509,542	$	431,805

Sales of Instruments, Control & Vacuum Products, Power & Reactive Gas Products and Analytical Solutions Products are included in the Company’s Vacuum & Analysis Division segment. Sales of Photonics Products, Optics Products and Lasers Products are included in the Light & Motion Division segment.

Geographic

Information about the Company’s operations in different geographic regions is presented in the tables below. Net revenues to unaffiliated customers are based on the location in which the sale originated. Transfers between geographic areas are at negotiated transfer prices and have been eliminated from consolidated net revenues.


	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Net revenues:
North America	$	168,471	$	123,413	$	262,689	$	243,594
Korea		26,048		27,349		46,598		59,421
Japan		25,532		17,046		41,768		34,302
Asia (excluding Korea and Japan)		64,891		30,743		98,347		54,426
Europe		40,919		19,415		60,140		40,062

	$	325,861	$	217,966	$	509,542	$	431,805


	June 30, 2016		December 31, 2015
Long-lived assets:⁽¹⁾
North America	$	128,660	$	56,594
Europe		31,287		5,783
Asia		49,310		8,952

	$	209,257	$	71,329

⁽¹⁾	Long-lived assets include property, plant and equipment, net and certain other long-term assets, excluding long-term tax related accounts.

Major Customers

The Company had two customers with net revenues greater than 10% of total net revenues in the periods shown as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Applied Materials, Inc.		13.5	%		18.1	%		15.4	%		17.8	%
LAM Research Corporation		8.9	%		13.2	%		11.8	%		12.7	%