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 of intangible assets, acquisition and integration costs, 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						Six Months Ended
	June 30, 2018			July 1, 2017			June 30, 2018			July 1, 2017
Net sales:
AIT	$	351		$	313		$	703		$	635
EVM	661			584			1,286			1,128
Total segment net sales	1,012			897			1,989			1,763
Corporate, eliminations ⁽¹⁾	—			(1		)	—			(2		)
Total net sales	$	1,012		$	896		$	1,989		$	1,761
Operating income:
AIT⁽³⁾	$	77		$	61		$	169		$	135
EVM⁽³⁾	73			70			153			118
Total segment operating income	150			131			322			253
Corporate, eliminations ⁽²⁾	(25		)	(73		)	(53		)	(155		)
Total operating income	$	125		$	58		$	269		$	98


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


(2)	Amounts included in Corporate, eliminations consist of purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, and exit and restructuring costs.

(3)

Effective January 1, 2018, the Company changed its 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 July 1, 2017, $2 million of operating expenses were reclassified from EVM to AIT. For the six-month period ended July 1, 2017, $5 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 the Consolidated Financial Statements 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.

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



	Three Months Ended				Six Months Ended
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
Europe, Middle East and Africa	$	337	$	279	$	686	$	566
Latin America	57		57		113		110
Asia-Pacific	134		123		249		231
North America	484		437		941		854
Total Net sales	$	1,012	$	896	$	1,989	$	1,761