SEGMENT REPORTING

12 Months Ended

Dec. 31, 2017

NOTE 18	-	SEGMENT REPORTING

General information:

The operations of the Group are conducted through two different core activities: Location based services and Wireless communications products. These activities also represent the reportable segments of the Group.

The reportable segments are viewed and evaluated separately by Company management, since the marketing strategies, processes and expected long term financial performances of the segments are different.

Location based services:

The Location based services segment consists predominantly of regionally- based stolen vehicle recovery (SVR) services, fleet management services and value-added services comprised of personal advanced locater services and concierge services.

The Group provides Location based services in Israel, Brazil, Argentina and the United States.

Wireless communications products:

The wireless communications product segment consists of short and medium range two-way machine-to-machine wireless communications products that are used for various applications, including automatic vehicle location, and automatic vehicle identification.

Information about reported segment profit or loss and assets:

	US dollars
(in thousands)	Location based services		Wireless communications products		Total

Year ended December 31, 2017
Revenues		169,752		64,884		234,636
Operating income		55,012		1,523		56,535
Assets		95,384		17,192		112,576
Goodwill		1,732		2,045		3,777
Expenditures for assets		9,346		681		10,027
Depreciation and amortization		10,030		328		10,358

Year ended December 31, 2016
Revenues		141,940		57,634		199,574
Operating income		44,045		3,953		47,998
Assets		84,777		15,793		100,570
Goodwill		1,562		1,844		3,406
Expenditures for assets		9,063		268		9,331
Depreciation and amortization		8,980		180		9,160

Year ended December 31, 2015
Revenues		127,683		47,945		175,628
Operating income		37,268		3,376		40,644
Assets		62,236		10,463		72,699
Goodwill		1,539		1,817		3,356
Expenditures for assets		14,478		393		14,871
Depreciation and amortization		8,636		152		8,788
Impairment of goodwill and intangible assets		-		929		929

Information about reported segment profit or loss and assets:

The evaluation of performance is based on the operating income of each of the two reportable segments.

Accounting policies of the segments are the same as those described in the accounting policies applied in the consolidated financial statements.

Due to the nature of the reportable segments, there have been no inter-segment sales or transfers during the reported periods.

Financing expenses, net, non-operating other expenses, net, taxes on income and the share of the Company in losses of affiliated companies were not allocated to the reportable segments, since these items are carried and evaluated on the enterprise level.

Reconciliations of reportable segment revenues, profit or loss, and assets, to the enterprise’s consolidated totals:

	US dollars
	Year ended December 31,
(in thousands)	2017			2016		2015

Total revenues of reportable segment and consolidated revenues		234,636			199,574		175,628

Operating income
Total operating income for reportable segments		56,535			47,998		40,644
Unallocated amounts:
Financing income, net		(989	)		2,056		1,189
Consolidated income before taxes on income		55,546			50,054		41,833

Assets
Total assets for reportable segments (*)		116,353			103,976		76,055
Other unallocated amounts:
Current assets		59,412			43,874		46,119
Investments in affiliated and other companies		16,221			12,060		4,783
Property and equipment, net		15,092			10,912		8,730
Other unallocated amounts		8,081			7,197		6,316
Consolidated total assets (at year end)		215,159			178,019		142,003

Other significant items
Total expenditures for assets of reportable segments		10,027			9,331		14,871
Unallocated amounts		6,281			4,498		3,676
Consolidated total expenditures for assets		16,308			13,829		18,547

Total depreciation, amortization and impairment for reportable segments		10,358			9,160		9,717
Unallocated amounts		3,161			2,475		2,245
Consolidated total depreciation, amortization and impairment		13,519			11,635		11,962

(*)

Including goodwill.

Geographic information

	Revenues
	Year ended December 31,
(in thousands)	2017		2016		2015

Israel		116,391		101,273		88,556
United States		8,537		8,697		7,811
Brazil		89,455		70,982		58,403
Argentina		15,211		14,772		17,324
Others		5,042		3,850		3,534
Total		234,636		199,574		175,628

	Property and equipment, net
	December 31,
(in thousands)	2017		2016		2015

Israel		16,757		11,973		9,934
United States		118		106		73
Brazil		17,969		19,188		17,228
Argentina		4,203		4,377		4,279
Total		39,047		35,644		31,514

Revenues were attributed to countries based on customer location.

Property and equipment were classified based on major geographic areas in which the Company operates.

Major customers

During 2017, 2016 and 2015, there were no sales exceeding 10% of total revenues to none of our customers.