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

The Company is a global provider of instruments, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes to improve process performance and productivity. The Company’s products are derived from its core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control technology, ozone generation and delivery, RF & DC power, reactive gas generation, vacuum technology, lasers, photonics, sub-micron positioning, vibration control, and optics. The Company also provides services related to the maintenance and repair of its products, 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. The Company’s two reportable segments are: Vacuum & Analysis and Light & Motion.

The Vacuum & Analysis segment provides a broad range of instruments, components and subsystems 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 technology, ozone generation and delivery, RF & DC power, reactive gas generation and vacuum technology.

The Light & Motion segment 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 control, 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 are net revenues by reportable segment:


	Three Months Ended March 31,
	2018		2017
Vacuum & Analysis	$	348,344	$	277,984
Light & Motion		205,931		159,169

	$	554,275	$	437,153

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


	Three Months Ended March 31,
	2018			2017
Gross profit by reportable segment:
Vacuum & Analysis	$	158,500		$	128,924
Light & Motion		104,355			76,623

Total gross profit by reportable segment		262,855			205,547
Operating expenses:
Research and development		34,857			33,282
Selling, general and administrative		82,949			74,220
Acquisition and integration costs		—			1,442
Restructuring		1,220			522
Environmental costs		1,000			—
Amortization of intangible assets		11,190			12,501

Income from operations		131,639			83,580
Interest and other expense, net		(4,897	)		(6,295	)

Income before income taxes		126,742			77,285
Provision for income taxes		21,621			12,225

Net income	$	105,121		$	65,060

The following are capital expenditures by reportable segment for the three months ended March 31, 2018 and 2017:


	Vacuum & Analysis		Light & Motion		Total
Three Months Ended March 31, 2018:
Capital expenditures	$	6,197	$	3,193	$	9,390

Three Months Ended March 31, 2017:
Capital expenditures	$	2,374	$	1,725	$	4,099

The following are depreciation and amortization of intangible assets by reportable segment for the three months ended March 31, 2018 and 2017:


	Vacuum & Analysis		Light & Motion		Total
Three Months Ended March 31, 2018:
Depreciation and amortization	$	5,129	$	15,363	$	20,492

Three Months Ended March 31, 2017:
Depreciation and amortization	$	5,122	$	16,711	$	21,833

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

The following are segment assets by reportable segment:


March 31, 2018:	Vacuum & Analysis		Light & Motion		Corporate, Eliminations & Other			Total
Segment assets:
Accounts receivable	$	225,822	$	131,677	$	(15,781	)	$	341,718
Inventory, net		216,237		149,472		—			365,709

Total segment assets	$	442,059	$	281,149	$	(15,781	)	$	707,427


December 31, 2017:	Vacuum & Analysis		Light & Motion		Corporate, Eliminations & Other			Total
Segment assets:
Accounts receivable	$	201,318	$	119,934	$	(20,944	)	$	300,308
Inventory, net		197,831		141,250		—			339,081

Total segment assets	$	399,149	$	261,184	$	(20,944	)	$	639,389

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


	March 31, 2018		December 31, 2017
Total segment assets	$	707,427	$	639,389
Cash and cash equivalents, restricted cash and investments		552,343		553,976
Other current assets		59,093		53,543
Property, plant and equipment, net		172,802		171,782
Goodwill and intangible assets, net		949,839		957,445
Other assets		39,952		37,883

Consolidated total assets	$	2,481,456	$	2,414,018

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 March 31,
	2018		2017
Net revenues:
United States	$	276,720	$	218,050
Korea		54,011		44,878
Japan		58,274		37,792
Asia (excluding Korea and Japan)		101,384		88,243
Europe		63,886		48,190

	$	554,275	$	437,153


	March 31, 2018		December 31, 2017
Long-lived assets:⁽¹⁾
United States	$	127,637	$	124,689
Europe		28,787		28,820
Asia		49,566		49,645

	$	205,990	$	203,154

⁽¹⁾

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

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


	March 31, 2018		December 31, 2017
Reportable segment:
Vacuum & Analysis	$	197,689	$	197,617
Light & Motion		395,805		393,430

Total goodwill	$	593,494	$	591,047

Worldwide Product Information

Because the reportable segment information above does not reflect worldwide sales of the Company’s products, the Company groups its products into six groups of similar products based upon the similarity of product function. The following table sets forth worldwide net revenue for each group of products:


	Three Months Ended March 31,
	2018		2017
Analytical and Control Solutions Products	$	33,712	$	31,820
Power, Plasma and Reactive Gas Solutions Products		167,052		122,800
Vacuum Solutions Products		147,580		123,364
Lasers Products		74,797		44,944
Optics Products		54,379		46,505
Photonics Products		76,755		67,720

	$	554,275	$	437,153

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

Major Customers

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


	Three Months Ended March 31,
	2018			2017
LAM Research Corporation.		12.6	%		12.6	%
Applied Materials, Inc.		12.2	%		13.0	%