Operating Segment and Geographic Information

12 Months Ended

Dec. 29, 2013

Operating Segment and Geographic Information

NOTE 17—OPERATING SEGMENT AND GEOGRAPHIC INFORMATION

The company is currently organized into three reportable segments. The organization is an application based structure which corresponds with the way the company manages the business. The majority of the company’s activities are aligned into two focus areas; The Mobile, Computing, Consumer, and Communication (MCCC) business, which focuses on mobile, computing and multimedia applications with typically lower power requirements, and the Power Conversion, Industrial, and Automotive (PCIA) business, which focuses on the higher power requirements for motor control solutions, power supplies, power conversion and automotive drive train applications. Each of these segments has a relatively small set of leading customers, common technology requirements and similar design cycles. The Standard Discrete and Standard Linear (SDT) business is managed separately as a third segment.

In addition to the operating segments mentioned above, the company also operates global operations, sales and marketing, information systems, finance and administration groups that are led by vice presidents who report to the Chief Executive Officer. Also in 2009, as a result of a company-wide simplification effort, the allocation of selling, general and administrative (SG&A) expenses to the reporting segments was changed. Only dedicated, direct SG&A spending by the segments is included in the calculation of their operating income. All other corporate level SG&A spending is included in the corporate category. The company does not allocate income taxes or interest expense to its operating segments as the operating segments are principally evaluated on operating profit before interest and taxes.

The company does not specifically identify and allocate all assets by operating segment. It is the company’s policy to fully allocate depreciation and amortization to its operating segments. Operating segments do not sell products to each other, and accordingly, there are no inter-segment revenues to be reported. The accounting policies for segment reporting are the same as for the company as a whole.

The following table presents selected statement of operations information on reportable segments for 2013, 2012 and 2011.

	Year Ended
	December 29, 2013			December 30, 2012			December 25, 2011
	(In millions)
Revenue and Operating Income:
MCCC
Total revenue	$	534.1		$	570.2		$	579.1
Operating income		84.7			103.5			100.4
PCIA
Total revenue		733.4			694.0			807.4
Operating income		115.8			120.2			211.9
SDT
Total revenue		137.9			141.7			202.3
Operating income		16.5			18.6			46.3
Corporate
Restructuring and impairments expense		(15.9	)		(14.1	)		(2.8	)
Stock-based compensation expense		(27.9	)		(22.6	)		(24.8	)
Selling, general and administrative expense		(156.5	)		(159.8	)		(162.8	)
Release (charge) for litigation charge		12.6			(1.3	)		—
Other		(8.9	)		0.2			(3.3	)
Total Consolidated
Total revenue	$	1,405.4		$	1,405.9		$	1,588.8
Operating income	$	20.4		$	44.7		$	164.9
Realized loss on sale of securities	$	—		$	12.9		$	—
Other expense, net	$	9.2		$	8.1		$	7.2
Income before income taxes	$	11.2		$	23.7		$	157.7

PCIA revenue for the year ended 2012 includes $8.5 million of insurance proceeds related to business interruption claims for the company’s optoelectronics supply issues resulting from the Thailand floods in the fourth quarter of 2011.

Revenue from one customer represents approximately 11.4% and 11.9% of the Company’s total 2013 and 2012 revenue. Revenue from this customer is included in all reportable segments revenue.

In 2011, Other consists of $2.7 million associated with a change to defined contribution plans in Korea and Japan, $0.7 million in accelerated depreciation related to the previously planned closure of the Mountaintop facility, and $0.1 million of other expenses.

Depreciation and amortization by reportable operating segment were as follows:

	Year Ended
	December 29, 2013		December 30, 2012		December 25, 2011
	(In millions)
MCCC	$	61.9	$	58.6	$	56.7
PCIA		71.2		65.6		83.2
SDT		12.1		11.1		10.6
Total	$	145.2	$	135.3	$	150.5

Geographic revenue information is based on the customer location within the indicated geographic region. Revenue by geographic region was as follows:

	Year Ended
	December 29, 2013		December 30, 2012		December 25, 2011
	(In millions)
Total Revenue:
U.S.	$	126.5	$	126.5	$	158.9
Other Americas		28.1		28.1		31.8
Europe		196.8		182.8		206.5
China		505.9		492.1		524.3
Taiwan		154.6		196.8		222.4
Korea		98.4		126.5		174.8
Other Asia/Pacific		295.1		253.1		270.1
Total	$	1,405.4	$	1,405.9	$	1,588.8

Other Asia/Pacific includes Japan, Singapore, and Malaysia.

Geographic property, plant and equipment balances as of December 29, 2013 and December 30, 2012 are based on the physical locations within the indicated geographic areas and are as follows:

	December 29, 2013		December 30, 2012
	(In millions)
Property, Plant & Equipment, Net:
U.S.	$	221.2	$	259.1
Korea		251.3		249.2
Philippines		57.7		59.8
Malaysia		67.0		81.1
China		107.2		110.2
All Others		3.5		5.5
Total	$	707.9	$	764.9