Segment Information and Geographic Data

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information and Geographic Data

Segment Information and Geographic Data

The segment information reflects the operating results of the Company’s business segments. The Company has two reportable segments; Legacy Zebra and Enterprise.

• The Legacy Zebra segment consists of barcode and card printing, location solutions, supplies, and services

• The Enterprise segment consists of mobile computing, data capture, and RFID

The operating segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker) to assess segment performance and allocate resources between the Company’s segments. The chief operating decision maker uses adjusted operating income to evaluate segment profitability.

The accounting policies of the segments are in accordance with Note 2 Summary of Significant Accounting Policies. The chief operating decision maker does not use total assets by segment to make decisions regarding resources, therefore the total asset disclosure by segment has not been included.

Financial information by segment is presented as follows (in millions):

	Year Ended December 31,
	2016			2015			2014(3)
Net sales:
Legacy Zebra	$	1,247		$	1,286		$	1,195
Enterprise	2,337			2,380			482
Total segment net sales	3,584			3,666			1,677
Corporate, eliminations(1)	(10		)	(16		)	(6		)
Total	$	3,574		$	3,650		$	1,671
Operating income:
Legacy Zebra	$	240		$	258		$	238
Enterprise	286			236			65
Total segment operating income	526			494			303
Corporate, eliminations(2)	(446		)	(457		)	(214		)
Total	$	80		$	37		$	89

(1) Amounts included in Corporate, eliminations consist of purchase accounting adjustments related to the Acquisition.     

(2) Amounts included in Corporate, eliminations consist of purchase accounting adjustments not reported in segments; amortization of intangible assets, acquisition/integration costs, impairment of goodwill and other intangibles, and exit and restructuring costs.    

(3) The businesses included in our Enterprise segment were acquired as part of the Acquisition. The Enterprise segment’s results, including the increases in net sales, gross profit, operating expenses, and operating income, for the year ended December 31, 2014 was primarily related to the Acquisition. Accordingly, the results for this segment for the year ended December 31, 2014 include only two months (November and December 2014). 

Information regarding the Company’s operations by geographic area is contained in the following table. These amounts are reported in the geographic area of the destination of the final sale. We manage our business based on regions rather than by individual countries.

Geographic data for sales is as follows (in millions):

	Year Ended December 31,
	2016		2015		2014(1)
Europe, Middle East, and Africa	$	1,138	$	1,194	$	583
Latin America	214		219		135
Asia-Pacific	483		463		216
Total International	1,835		1,876		934
North America	1,739		1,774		737
Total Net sales	$	3,574	$	3,650	$	1,671

Geographic data for long-lived assets, defined as property, plant and equipment is as follows (in millions):

	Year Ended December 31,
	2016		2015		2014(1)
Europe, Middle East, and Africa	$	13	$	10	$	10
Latin America	3		3		2
Asia-Pacific	9		10		5
Total International	25		23		17
North America	267		275		238
Total long-lived assets	$	292	$	298	$	255

Net sales by country that are greater than 10% of total net sales are as follows (in millions):

	Year Ended December 31,
	2016		2015		2014(1)
United States	$	1,950	$	2,045	$	875
United Kingdom	1,065		1,102		558
Singapore	362		175		155
Other	197		328		83
Total	$	3,574	$	3,650	$	1,671

Net sales by country are determined by the country from where the products are invoiced when they leave the Company’s warehouse. Generally, our United States sales company serves North America and Latin America; United Kingdom sales company serves Europe, Middle East, and Africa; and our Singapore sales company serves Asia-Pacific.

Long-lived assets, which were predominately located in the United States, were 91.4%, 87.0% and 89.6% of total long-lived assets as of December 31, 2016, 2015, and 2014, respectively.

Net sales by major product category are as follows (in millions):

	Year Ended December 31,
	2016		2015		2014(1)
Hardware	$	2,778	$	2,863	$	1,234
Supplies	278		268		265
Services and Software	518		519		172
Total	$	3,574	$	3,650	$	1,671

Our net sales to significant customers as a percentage of the total Company’s net sales were as follows:

	Year Ended December 31,
	2016						2015						2014(1)
	Legacy Zebra		Enterprise		Total		Legacy Zebra		Enterprise		Total		Legacy Zebra		Enterprise		Total
Customer A	5.9	%	14.2	%	20.1	%	5.5	%	13.9	%	19.4	%	11.5	%	6.4	%	17.9	%
Customer B	5.0	%	8.2	%	13.2	%	4.6	%	8.1	%	12.7	%	9.4	%	4.2	%	13.6	%
Customer C	5.3	%	7.1	%	12.4	%	5.2	%	6.4	%	11.6	%	8.7	%	2.9	%	11.6	%

(1) The businesses included in our Enterprise segment were acquired as part of the Acquisition. The Enterprise segment’s results, including the increases in net sales, gross profit, operating expenses and operating income, for the year ended December 31, 2014 was primarily related to the Acquisition. Accordingly, the results for this segment for the year ended December 31, 2014 include only two months (November and December 2014). 

All three of the above customers are distributors and not end-users. No other customer accounted for 10% or more of total net sales during the years presented.

There are three customers at December 31, 2016 and December 31, 2015 that each accounted for more than 10% of outstanding accounts receivable. In 2016, the three largest customers accounted for 20%, 14%, and 13%, respectively of accounts receivable while in 2015, the three largest customers accounted for 19%, 14% and 11%, respectively.