OPERATING AND GEOGRAPHICAL SEGMENTS

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

OPERATING AND GEOGRAPHICAL SEGMENTS

OPERATING AND GEOGRAPHICAL SEGMENTS

The Company designs, develops, manufactures and sells semiconductor integrated circuit products. The Company’s operating segments represent management’s view of the Company’s businesses and how it allocates Company resources and measures performance of its major components. Each segment consists of product families with similar requirements for design, development and marketing. Each segment requires different design, development and marketing resources to produce and sell products.

During the first quarter of 2014, the Company realigned its business segments to better allocate resources and to focus more effectively on core markets.  As a result, the Company created a new reportable segment entitled "Multi-Market and Other" and eliminated the former Application Specific Integrated Circuit (“ASIC”) segment. A summary of each reportable segment follows:

• Microcontroller. This segment includes Atmel's general purpose microcontroller and microprocessor families, AVR^® 8-bit and 32-bit products, Atmel^®| SMART^TM ARM^® based products, Atmel's 8051 8-bit products, designated commercial wireless products, including low power radio and SOC products that meet Bluetooth, Bluetooth Low Energy, Zigbee and Wi-Fi specifications, Atmel's maXTouch capacitive touch product families and optimized products for smart energy, touch button, and mobile sensor hub and LED lighting applications.

• Nonvolatile Memory. This segment includes electrically erasable programmable read-only memory ("EEPROM") and erasable programmable read-only memory (“EPROM”) devices, secure cryptographic products, and other advanced security solutions.

• Automotive. This segment includes devices for automotive electronics, including products using radio frequency technology.

• Multi-Market and Other. This segment includes application specific and standard products for aerospace applications and legacy products. On April 16, 2015, the Company completed the sale of its XSense touch sensor manufacturing assets and separately licensed to UniPixel, Inc. its XSense intellectual property assets, which the Company retained. See Note 14 for further information.

Prior period operating segment presentations have been revised to conform to the Company's revised segment reporting.

The Company continually evaluates operating segment performance based on revenue and income or loss from operations excluding share-based compensation and other non-recurring items. Because the Company’s operating segments reflect the manner in which management reviews its business, they necessarily involve subjective judgments that management believes are reasonable in light of the circumstances under which they are made. These judgments may change over time or may be modified to reflect new facts or circumstances. Operating segments may also be changed or modified to reflect products, technologies or applications that are newly created, or that change over time, or other business conditions that evolve, each of which may result in reassessing specific segments and the elements included within each of those segments.

Operating segments are defined by the products they design and sell. They do not sell to each other. The Company’s net revenue and segment income from operations for each reportable segment is as follows:

Information about Reportable Segments

	Micro- Controllers		Nonvolatile Memory		Automotive		Multi-market and Other		Total
	(in thousands)
Year ended December 31, 2015
Net revenue from external customers	$	807,924	$	150,780	$	138,728	$	75,024	$	1,172,456
Segment income from operations	67,631		25,039		20,425		23,531		136,626
Year ended December 31, 2014
Net revenue from external customers	$	994,069	$	166,768	$	153,221	$	99,276	$	1,413,334
Segment income from operations	116,417		35,868		23,096		3,260		178,641
Year ended December 31, 2013
Net revenue from external customers	$	958,471	$	153,363	$	159,774	$	114,839	$	1,386,447
Segment income from operations	67,847		24,383		13,685		17,441		123,356

The Company's primary products are semiconductor integrated circuits, which it has concluded constitutes a group of similar products. Therefore, it is impracticable to differentiate the revenue from external customers for each product sold. The Company does not allocate assets by segment, as management does not use asset information to measure or evaluate a segment’s performance.

Reconciliation of Segment Information to Consolidated Statements of Operations

	Years Ended
	December 31, 2015			December 31, 2014			December 31, 2013
	(in thousands)
Total segment income from operations	$	136,626		$	178,641		$	123,356
Unallocated amounts:
Stock-based compensation expense	(51,392		)	(59,679		)	(43,124		)
Loss from manufacturing facility damage and shutdown	—			(3,485		)	(2,205		)
Acquisition-related charges	(12,526		)	(13,767		)	(5,534		)
French building underutilization and other	(1,522		)	(2,957		)	(945		)
Restructuring charges	(4,595		)	(13,882		)	(50,026		)
(Loss) gain related to foundry arrangements	(5,825		)	2,583			(7,424		)
Recovery of receivables due from foundry supplier	—			485			600
Fair value adjustments to inventory from businesses acquired	—			(2,322		)	—
Impairment of XSense assets	—			(26,624		)	—
Writeoff of uncollectible receivable	—			(4,126		)	—
Settlement charges	—			—			(21,600		)
Merger expenses and other	(11,631		)	—			—
Gain on sale of assets	1,626			4,364			4,430
Consolidated income (loss) from operations	$	50,761		$	59,231		$	(2,472	)

Geographic sources of revenue were as follows:

	Years Ended
	December 31, 2015		December 31, 2014		December 31, 2013
	(in thousands)
China, including Hong Kong	$	368,930	$	435,958	$	417,617
United States	204,197		211,532		192,878
Germany	161,386		204,257		199,298
South Korea	78,991		119,886		142,476
Japan	49,398		37,066		41,533
Singapore	33,515		55,536		44,957
Taiwan	31,205		60,632		51,830
France	13,903		15,499		26,270
Rest of Europe	115,238		139,458		128,841
Rest of Asia-Pacific	90,341		102,643		120,290
Rest of the World	25,352		30,867		20,457
Total net revenue	$	1,172,456	$	1,413,334	$	1,386,447

Net revenue is attributed to regions based on ship-to locations.

The Company had two distributors that accounted for 18% and 10%, respectively, of net revenue in the year ended December 31, 2015. The Company had two distributors that accounted for 16% and 10%, respectively, of net revenue in the year ended December 31, 2014. The Company had one distributor and one end-customer that accounted for 14% and 12%, respectively, of net revenue in the year ended December 31, 2013.

Two distributors accounted for 16% and 12% of accounts receivable at December 31, 2015 and no end-customer accounted for 10% or more of accounts receivable at December 31, 2015. Two distributors accounted for 17% and 11% of accounts receivable at December 31, 2014 and no end-customer accounted for 10% or more of accounts receivable at December 31, 2014.

Physical locations of tangible long-lived assets were as follows:

	December 31, 2015		December 31, 2014
	(in thousands)
United States	$	80,500	$	92,466
Philippines	53,891		56,094
France	10,364		13,714
Germany	7,354		17,920
Rest of Asia-Pacific	15,036		20,237
Rest of Europe	4,566		5,854
Total	$	171,711	$	206,285

Excluded from the table above are auction-rate securities of $1.1 million at December 31, 2015 and 2014, which are included in other assets on the consolidated balance sheets. Also excluded from the table above as of December 31, 2015 and 2014 are goodwill of $188.2 million and $191.1 million, respectively, intangible assets, net of $38.9 million and $50.3 million, respectively, and deferred income tax assets of $157.9 million and $117.3 million, respectively.