Segment Information

The Company’s operations consist of two reportable segments: Asset Intelligence & Tracking (“AIT”) and Enterprise Visibility & Mobility (“EVM”). The reportable segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) to assess segment performance and allocate resources among the Company’s segments. The CODM reviews adjusted operating income to assess segment profitability. Adjusted operating income excludes purchase accounting adjustments, amortization, acquisition, integration and exit and restructuring costs. Segment assets are not reviewed by the Company’s CODM and therefore are not disclosed below.

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



	Three Months Ended
	March 31, 2018			April 1, 2017
Net sales:
AIT	$	352		$	322
EVM	625			544
Total segment net sales	977			866
Corporate, eliminations ⁽¹⁾	—			(1		)
Total net sales	$	977		$	865
Operating income:
AIT⁽³⁾	$	92		$	74
EVM⁽³⁾	80			48
Total segment operating income	172			122
Corporate, eliminations ⁽²⁾	(28		)	(82		)
Total operating income	$	144		$	40


(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, amortization expense, acquisition and integration expenses, and exit and restructuring costs.

(3)

Effective January 1, 2018, the Company changed it’s methodology for allocating certain operating expenses across its two reportable segments to more accurately reflect where these operating costs are being incurred. The reallocations relate primarily to information technology, marketing and human resources expenses. Prior year segment operating results have been recast for comparability with the current year presentation. For the quarter ended April 1, 2017, $7 million of operating expenses were reclassified from AIT to EVM. For the full year ended December 31, 2017, $14 million of operating expenses were reclassified from AIT to EVM. There was no impact to Consolidated results as a result of these reclassifications.

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.

Net sales to customers by geographic region were as follows (in millions):



	Three Months Ended
	March 31, 2018		April 1, 2017
Europe, Middle East and Africa	$	349	$	287
Latin America	56		53
Asia-Pacific	115		108
Total International	520		448
North America	457		417
Total net sales	$	977	$	865