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, optics and laser-based manufacturing solutions. The Company also provides services relating to the maintenance and repair of its products, installation services and training. The Company’s primary served markets include semiconductor, industrial technologies, life and health sciences, and 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. Effective February 1, 2019, in conjunction with its acquisition of ESI, the Company created a third reportable segment known as the Equipment & Solutions segment in addition to its

two

then-existing reportable segments: the Vacuum & Analysis segment and the Light & Motion segment.

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 Equipment & Solutions segment provides laser-based manufacturing solutions for the micro-machining industry that enable customers to optimize production. The segment’s market is composed primarily of flexible and rigid PCB processing/fabrication, semiconductor wafer processing and passive component manufacturing & test. Equipment & Solutions incorporate specialized laser technology and proprietary control software to efficiently process the materials and components that are an integral part of electronic devices and systems.

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 table sets forth net revenues by reportable segment:


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Vacuum & Analysis	$	235,655	$	368,328	$	470,010	$	716,672
Light & Motion		182,579		204,812		376,567		410,743
Equipment & Solutions		55,876		—		91,094		—

	$	474,110	$	573,140	$	937,671	$	1,127,415

The following table sets forth a reconciliation of segment gross profit to consolidated net income:


	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
Gross profit by reportable segment:
Vacuum & Analysis	$	102,095	$	171,082		$	200,234	$	329,582
Light & Motion		84,948		103,795			177,689		208,150
Equipment & Solutions		23,984		—			31,222

Total gross profit by reportable segment		211,027		274,877			409,145		537,732
Operating expenses:
Research and development		41,855		36,504			80,788		71,361
Selling, general and administrative		83,236		76,181			165,691		159,130
Fees and expenses related to term loan		—		378			5,847		378
Acquisition and integration costs		3,240		(1,168	)		33,407		(1,168	)
Restructuring and other		1,242		790			3,165		3,010
Amortization of intangible assets		17,552		10,901			33,279		22,091

Income from operations		63,902		151,291			86,968		282,930
Interest and other expense, net		12,039		2,747			19,769		7,644

Income before income taxes		51,863		148,544			67,199		275,286
Provision for income taxes		14,124		25,682			17,005		47,303

Net income	$	37,739	$	122,862		$	50,194	$	227,983

The following table sets forth capital expenditures by reportable segment for the three and six months ended June 30, 2019 and 2018:


	Vacuum & Analysis		Light & Motion		Equipment & Solutions		Total
Three Months Ended June 30, 2019:
Capital expenditures	$	6,700	$	4,938	$	2,087	$	13,725

Six Months Ended June 30, 2019:
Capital expenditures	$	14,188	$	10,092	$	3,974	$	28,254

Three Months Ended June 30, 2018:
Capital expenditures	$	6,972	$	5,456	$	—	$	12,428

Six Months Ended June 30, 2018:
Capital expenditures	$	13,169	$	8,649	$	—	$	21,818

The following table sets forth depreciation and amortization by reportable segment for the three and six months ended June 30, 2019 and 2018:


	Vacuum & Analysis		Light & Motion		Equipment & Solutions		Total
Three Months Ended June 30, 2019:
Depreciation and amortization	$	3,941	$	13,292	$	10,211	$	27,444

Six Months Ended June 30, 2019
Depreciation and amortization	$	7,986	$	27,432	$	17,237	$	52,655

Three Months Ended June 30, 2018:
Depreciation and amortization	$	4,968	$	14,917	$	—	$	19,885

Six Months Ended June 30, 2018:
Depreciation and amortization	$	10,097	$	30,280	$	—	$	40,377

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

The following table sets forth segment assets by reportable segment:


June 30, 2019:	Vacuum & Analysis		Light & Motion		Equipment & Solutions		Corporate, Eliminations & Other			Total
Segment assets:
Trade accounts receivable	$	141,551	$	155,452	$	46,322	$	(29,795	)	$	313,530
Inventories		232,595		174,124		72,918		(140	)		479,497

Total segment assets	$	374,146	$	329,576	$	119,240	$	(29,935	)	$	793,027


December 31, 2018:	Vacuum & Analysis		Light & Motion		Equipment & Solutions		Corporate, Eliminations & Other			Total
Segment assets:
Trade accounts receivable	$	171,604	$	140,658	$	—	$	(16,808	)	$	295,454
Inventories		222,965		161,658		—		66			384,689

Total segment assets	$	394,569	$	302,316	$	—	$	(16,742	)	$	680,143

The following is a reconciliation of segment assets to consolidated total assets:


	June 30, 2019		December 31, 2018
Total segment assets	$	793,027	$	680,143
Cash and cash equivalents and investments		470,321		728,461
Other current assets		80,303		65,790
Assets classified as held for sale		36,750		—
Property, plant and equipment, net		230,649		194,367
Right-of-use asset		68,631		—
Goodwill and intangible assets, net		1,658,039		906,803
Other assets		44,228		38,682

Consolidated total assets	$	3,381,948	$	2,614,246

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 June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net revenues:
United States	$	217,549	$	281,818	$	441,896	$	558,538
China		56,002		32,005		93,750		63,077
Korea		38,896		66,983		74,698		120,994
Japan		30,995		54,087		73,097		112,361
Other Asia		72,426		75,188		136,005		145,500
Europe		58,242		63,059		118,225		126,945

	$	474,110	$	573,140	$	937,671	$	1,127,415


	June 30, 2019		December 31, 2018
Long-lived assets: (1)
United States	$	171,324	$	146,687
Europe		30,514		26,794
Asia		60,072		50,572

	$	261,910	$	224,053

(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:


	June 30, 2019		December 31, 2018
Reportable segment:
Vacuum & Analysis	$	196,777	$	197,126
Light & Motion		389,539		389,870
Equipment & Solutions		472,351		—

Total goodwill	$	1,058,667	$	586,996

Worldwide Product Information

The Company groups its product offerings into

three

groups based upon the similarity of product function as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Advanced Manufacturing Components	$	359,123	$	509,999	$	730,468	$	1,006,676
Global Service		72,784		63,141		138,982		120,739
Advanced Manufacturing Systems		42,203		—		68,221		—

	$	474,110	$	573,140	$	937,671	$	1,127,415

Advanced manufacturing components are comprised of product revenues from the Company’s Vacuum & Analysis and Light & Motion segments. Global service is comprised of total service revenues for all three of the Company’s reportable segments. Advanced manufacturing systems is comprised of product revenues for the Company’s Equipment & Solutions segment.