Business Segment Information and Geographic Data

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Business Segment Information and Geographic Data

Segment Information and Geographic Data

In the first quarter of 2013, we revised our segment reporting to reflect changes in how we manage our business, review operating performance and allocate resources. We now manage our business through two reporting segments, Consumer Storage and Accessories (CSA) and Tiered Storage and Security Solutions (TSS). Our new reporting segments are generally aligned with our key consumer and commercial channels.

We have two major product categories under our CSA segment: Consumer storage media and Audio and accessories. Consumer storage media products include primarily optical products such as DVDs, CDs and Blu-ray disc recordable media as well as flash media. Audio and accessories include primarily headphones, audio electronics and accessories. We have two major product categories under our TSS segment: Commercial storage media and Storage and security solutions. Commercial storage media products consist mainly of magnetic data storage tape media and RDX^® media. Storage and security solutions includes storage hardware products, services and software for backup and archiving as well as primary storage; encrypted and biometric flash drives and hard disk drives; secure portable desktop solutions; and software solutions, including products which contain various security features such as password authentication, encryption and remote manageability.

We evaluate segment performance based on revenue and operating income (loss). The operating income (loss) reported in our segments excludes corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. Corporate and unallocated amounts include depreciation and amortization, litigation settlement expense, goodwill impairment, intangible impairments, intangible asset abandonment, corporate expense, contingent consideration adjustments, inventory write-offs related to our restructuring programs and restructuring and other expenses which are not allocated to the segments. The methodology to determine corporate and unallocated amounts is applied consistently among all years.

During the first quarter of 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. The operating results for these businesses are presented in our Consolidated Statements of Operations as discontinued operations and are not included in segment results for any periods presented. The consumer storage business under the Memorex and TDK Life on Record brands and the consumer electronics business under the TDK Life on Record brand are being retained. See Note 4 - Acquisitions and Divestitures for further information.

Net revenue and operating income (loss) by segment were as follows:

	Years Ended December 31,
	2013		2012		2011
	(In millions)
Net Revenue
Consumer Storage and Accessories
Consumer storage media	$	435.7	$	594.3	$	740.2
Audio and accessories	42.6		41.0		35.0
Total Consumer Storage and Accessories	478.3		635.3		775.2
Tiered Storage and Security Solutions
Commercial storage media	251.0		311.6		378.8
Storage and security solutions	131.5		59.8		12.6
Total Tiered Storage and Security Solutions	382.5		371.4		391.4
Total Net Revenue	$	860.8	$	1,006.7	$	1,166.6

	Years Ended December 31,
	2013			2012			2011
	(In millions)
Operating Income (Loss)
Consumer Storage and Accessories	$	52.3		$	61.5		$	57.1
Tiered Storage and Security Solutions	(16.1		)	(26.7		)	9.2
Total segment operating income	36.2			34.8			66.3
Corporate and unallocated	(56.3		)	(353.2		)	(86.7		)
Total operating loss	(20.1		)	(318.4		)	(20.4		)
Interest income	(0.2		)	(0.5		)	(0.9		)
Interest expense	2.5			2.9			3.7
Other expense, net	0.6			2.6			7.0
Loss from continuing operations before income taxes	$	(23.0	)	$	(323.4	)	$	(30.2	)

We have not provided specific asset information by segment, as it is not provided to our chief operating decision maker for review at a segment specific level. Corporate and unallocated amounts above include non-cash goodwill impairment charges of $23.3 million and $1.6 million for the years ended December 31, 2012, 2011, respectively, non-cash intangible asset impairment charges of $251.8 million for the year ended December 31, 2012, restructuring and other costs of $11.3 million, $21.1 million and $21.5 million for the years ended December 31, 2013, 2012 and 2011, respectively and litigation settlement gains of $2.5 million for the year ended December 31, 2013 and litigation settlement charges of $2.0 million for the year ended December 31, 2011.

The following table presents net revenue by geographical region based on the country in which the revenue originated:

	Years Ended December 31,
	2013		2012		2011
	(In millions)
Net Revenue
United States	$	348.1	$	376.2	$	420.8
International	512.7		630.5		745.8
Total	$	860.8	$	1,006.7	$	1,166.6

The United States and Japan each comprise more than 10 percent of our total net revenue. Net revenue from Japan was 20.6 percent, 21.0 percent and 19.4 percent of total net revenue for the years ended December 31, 2013, 2012 and 2011, respectively.

The following table presents long-lived assets by geographical region:

	As of December 31,
	2013		2012		2011
	(In millions)
Long-Lived Assets
United States	$	150.7	$	166.9	$	321.0
International	41.6		47.4		87.4
Total	$	192.3	$	214.3	$	408.4