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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		201 8
Vacuum & Analysis	$	240,681	$	286,038	$	710,691	$	1,002,710
Light & Motion		172,460		201,114		549,027		611,857
Equipment & Solutions		49,310		—		140,404		—

	$	462,451	$	487,152	$	1,400,122	$	1,614,567

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


	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019			2018
Gross profit by reportable segment:
Vacuum & Analysis	$	102,826		$	132,835	$	303,060		$	462,418
Light & Motion		79,873			99,025		257,562			307,174
Equipment & Solutions		22,305			—		53,527			—

Total gross profit by reportable segment		205,004			231,860		614,149			769,592
Operating expenses:
Research and development		41,566			31,898		122,354			103,259
Selling, general and administrative		82,101			70,822		247,792			229,952
Fees and expenses related to term loan		642			—		6,489			378
Acquisition and integration costs		2,103			36		35,510			(1,132	)
Restructuring and other		1,525			1,364		4,690			4,374
Amortization of intangible assets		17,020			10,695		50,299			32,786
Gain on sale of long-lived assets		(6,773	)		—		(6,773	)		—
Income from operations		66,820			117,045		153,788			399,975
Interest and other expense, net		11,398			2,529		31,167			10,173

Income before income taxes		55,422			114,516		122,621			389,802
Provision for income taxes		7,994			21,239		24,999			68,542

Net income	$	47,428		$	93,277	$	97,622		$	321,260

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


	Vacuum & Analysis		Light & Motion		Equipment & Solutions		Total
Three Months Ended September 30, 2019:
Capital expenditures	$	7,461	$	6,767	$	2,271	$	16,499

Nine Months Ended September 30, 2019:
Capital expenditures	$	21,649	$	16,859	$	6,245	$	44,753

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

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


	Vacuum & Analysis		Light & Motion		Equipment & Solutions		Total
Three Months Ended September 30, 2019:
Depreciation and amortization	$	4,222	$	12,992	$	9,994	$	27,208

Nine Months Ended September 30, 2019
Depreciation and amortization	$	12,208	$	40,424	$	27,231	$	79,863

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

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:


September 30, 2019:	Vacuum & Analysis		Light & Motion		Equipment & Solutions		Corporate, Eliminations & Other			Total
Segment assets:
Trade accounts receivable	$	156,066	$	159,061	$	40,289	$	(27,433	)	$	327,983
Inventories		221,182		168,597		73,449		35			463,263

Total segment assets	$	377,248	$	327,658	$	113,738	$	(27,398	)	$	791,246


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:


	September 30, 2019		December 31, 2018
Total segment assets	$	791,246	$	680,143
Cash and cash equivalents and investments		485,274		728,461
Other current assets		94,011		65,790
Property, plant and equipment, net		236,124		194,367
Right-of-use asset		67,632		—
Goodwill and intangible assets, net		1,634,971		906,803
Other assets		45,286		38,682

Consolidated total assets	$	3,354,544	$	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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net revenues:
United States	$	211,116	$	243,273	$	653,012	$	801,811
China		46,679		35,554		140,469		98,631
Korea		41,313		43,468		116,011		164,462
Japan		32,388		38,964		105,485		151,325
Other Asia		77,360		69,782		213,325		215,282
Europe		53,595		56,111		171,820		183,056

	$	462,451	$	487,152	$	1,400,122	$	1,614,567


Long-lived assets: (1)	September 30, 2019		December 31, 2018
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:


	September 30, 2019		December 31, 2018
Reportable segment:
Vacuum & Analysis	$	195,431	$	197,126
Light & Motion		386,848		389,870
Equipment & Solutions		471,812		—

Total goodwill	$	1,054,091	$	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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Advanced Manufacturing Components	$	353,639	$	426,255	$	1,084,107	$	1,432,931
Global Service		76,278		60,897		215,260		181,636
Advanced Manufacturing Systems		32,534		—		100,755		—

	$	462,451	$	487,152	$	1,400,122	$	1,614,567

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.