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 for its customers. 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, 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 primary served markets are manufacturers of capital equipment for semiconductor manufacturing, industrial technologies, life and health sciences, as well as research and defense.

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 September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Vacuum & Analysis	$	286,038	$	308,269	$	1,002,710	$	896,214
Light & Motion		201,114		177,998		611,857		507,963
	$	487,152	$	486,267	$	1,614,567	$	1,404,177

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018			2017
Gross profit by reportable segment:
Vacuum & Analysis	$	132,835	$	141,438	$	462,418		$	410,228
Light & Motion		99,025		86,557		307,174			242,897
Total gross profit by reportable segment		231,860		227,995		769,592			653,125
Operating expenses:
Research and development		31,898		32,548		103,259			99,510
Selling, general and administrative		70,822		71,347		229,952			217,546
Acquisition and integration costs		36		2,466		(1,132	)		4,698
Restructuring		1,364		10		3,374			2,596
Asset impairment		—		—		—			6,719
Fees and expenses related to repricing of term loan		—		492		378			492
Environmental Costs		—		—		1,000			—
Amortization of intangible assets		10,695		10,977		32,786			34,946
Income from operations		117,045		110,155		399,975			286,618
Gain on sale of business		—		—		—			74,856
Interest and other expense, net		2,529		8,784		10,173			24,846
Income before income taxes		114,516		101,371		389,802			336,628
Provision for income taxes		21,239		25,377		68,542			75,134
Net income	$	93,277	$	75,994	$	321,260		$	261,494

The following is capital expenditures by reportable segment for the three and nine months ended September 30, 2018 and 2017:

	Vacuum & Analysis		Light & Motion		Total
Three Months Ended September 30, 2018:
Capital expenditures	$	9,532	$	5,535	$	15,067
Nine Months Ended September 30, 2018:
Capital expenditures	$	22,701	$	14,184	$	36,885

Three Months Ended September 30, 2017:
Capital expenditures	$	4,212	$	3,906	$	8,118
Nine Months Ended September 30, 2017:
Capital expenditures	$	10,114	$	7,743	$	17,857

The following is depreciation and amortization by reportable segment for the three and nine months ended September 30, 2018 and 2017:

	Vacuum & Analysis		Light & Motion		Total
Three Months Ended September 30, 2018:
Depreciation and amortization	$	5,083	$	14,446	$	19,529
Nine Months Ended September 30, 2018
Depreciation and amortization	$	15,180	$	44,726	$	59,906

Three Months Ended September 30, 2017:
Depreciation and amortization	$	5,058	$	15,071	$	20,129
Nine Months Ended September 30, 2017:
Depreciation and amortization	$	15,277	$	47,273	$	62,550

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:

September 30, 2018:	Vacuum & Analysis		Light & Motion		Corporate, Eliminations & Other			Total
Segment assets:
Accounts receivable	$	195,244	$	138,599	$	(15,373	)	$	318,470
Inventory, net		235,253		163,783		41			399,077
Total segment assets	$	430,497	$	302,382	$	(15,332	)	$	717,547

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:

	September 30, 2018		December 31, 2017
Total segment assets	$	717,547	$	639,389
Cash and cash equivalents, restricted cash and investments		630,030		553,976
Other current assets		75,298		53,543
Property, plant and equipment, net		180,182		171,782
Goodwill and intangible assets, net		919,149		957,445
Other assets		42,390		37,883
Consolidated total assets	$	2,564,596	$	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 tax transfer prices and have been eliminated from consolidated net revenues.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net revenues:
United States	$	243,273	$	237,592	$	801,811	$	700,291
Korea		43,468		60,908		164,462		165,613
Japan		38,964		38,411		151,325		113,068
Asia (excluding Korea and Japan)		105,336		94,084		313,913		273,957
Europe		56,111		55,272		183,056		151,248
	$	487,152	$	486,267	$	1,614,567	$	1,404,177

Long-lived assets:⁽¹⁾	September 30, 2018		December 31, 2017
United States	$	138,549	$	124,689
Europe		26,188		28,820
Asia		49,801		49,645
	$	214,538	$	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:

	September 30, 2018		December 31, 2017
Reportable segment:
Vacuum & Analysis	$	197,193	$	197,617
Light & Motion		390,668		393,430
Total goodwill	$	587,861	$	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 September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Analytical and Control Solutions Products	$	26,727	$	33,068	$	91,932	$	97,689
Power, Plasma and Reactive Gas Solutions Products		132,469		193,808		487,286		549,999
Vacuum Solutions Products		126,842		81,300		423,492		248,291
Lasers Products		63,999		56,623		209,459		153,866
Optics Products		57,836		52,548		169,415		149,759
Photonics Products		79,279		68,920		232,983		204,573
	$	487,152	$	486,267	$	1,614,567	$	1,404,177

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 September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Applied Materials, Inc.		12	%		12	%		13	%		13	%
LAM Research Corporation		8	%		11	%		11	%		12	%