Segment Information and Geographic Data

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment Information and Geographic Data

Segment Information & Geographic Data

Segment results

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. To the extent applicable, segment operating income excludes purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, and product sourcing diversification 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):

	Year Ended December 31,
	2019			2018			2017
Net sales:
AIT	$	1,479		$	1,423		$	1,311
EVM	3,006			2,795			2,414
Total segment net sales	4,485			4,218			3,725
Corporate, eliminations(1)	—			—			(3		)
Total Net sales	$	4,485		$	4,218		$	3,722
Operating income:
AIT(2)(3)	$	355		$	325		$	274
EVM(2)(3)	483			404			301
Total segment operating income	838			729			575
Corporate, eliminations(4)	(146		)	(119		)	(253		)
Total Operating income	$	692		$	610		$	322

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

(2) During 2018, the Company revised 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 facilities, information technology, marketing and human resources expenses. All periods are presented on a comparable basis and reflect these changes which reclassified operating expenses from AIT to EVM of $14 million for the year ended December 31, 2017. There was no impact to the Consolidated Financial Statements as a result of these reallocations.

(3) AIT and EVM segment operating income includes depreciation and share-based compensation expense. The amounts of depreciation and share-based compensation attributable expense to AIT and EVM are proportionate to each segment’s Net sales.

(4) To the extent applicable, amounts included in Corporate, eliminations consist of purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, and product sourcing diversification costs.

Sales to significant customers

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

	Year Ended December 31,
	2019						2018						2017
	AIT		EVM		Total		AIT		EVM		Total		AIT		EVM		Total
Customer A	5.3	%	13.0	%	18.3	%	6.2	%	14.1	%	20.3	%	6.3	%	15.0	%	21.3	%
Customer B	4.7	%	9.0	%	13.7	%	5.6	%	10.1	%	15.7	%	5.3	%	8.9	%	14.2	%
Customer C	6.1	%	10.5	%	16.6	%	6.2	%	7.9	%	14.1	%	6.2	%	7.0	%	13.2	%

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.

The Company’s three largest customers accounted for 16.8%, 7.8%, and 20.6%, respectively, of accounts receivable as of December 31, 2019, and 23.0%, 16.9% and 14.6%, respectively, of accounts receivable as of December 31, 2018. No other customer accounted for more than 10% of accounts receivable.

Geographic data

Information regarding the Company’s operations by geographic area is contained in the following tables. Net sales amounts are attributed to geographic area based on customer location.

Net sales by region was as follows (in millions):

	Year Ended December 31,
	2019		2018		2017
North America	$	2,261	$	2,041	$	1,798
EMEA	1,462		1,409		1,221
Asia-Pacific	518		520		468
Latin America	244		248		235
Total Net sales	$	4,485	$	4,218	$	3,722

The United States and Germany were the only countries that accounted for more than 10% of the Company’s net sales in 2019, 2018, and 2017. Net sales during these years was as follows (in millions):

	Year Ended December 31,
	2019		2018		2017
United States	$	2,243	$	2,020	$	1,746
Germany	523		523		439
Other	1,719		1,675		1,537
Total Net sales	$	4,485	$	4,218	$	3,722

For the year ended December 31, 2019, the Company presented revenues by major country on the same basis as revenues by region, based on customer location. Prior to fiscal 2019, the Company presented revenues by major country based on the country where products, solutions, and services were invoiced from. Revenues by major country for the years ended December 31, 2018 and December 31, 2017 are presented above based on the location of customer, in order to conform to the same basis of presentation as the current year.

Geographic data for long-lived assets is as follows (in millions):

	Year Ended December 31,
	2019		2018		2017
North America	$	280	$	225	$	238
EMEA	39		14		14
Asia-Pacific	40		7		9
Latin America	7		3		3
Total long-lived assets	$	366	$	249	$	264

Long-lived assets are defined by the Company as property, plant and equipment as well as ROU assets. ROU assets were recognized upon adoption of ASC 842 in 2019, prior to which, there were no long-lived assets related to leasing activities. Primarily all of the Company’s long-lived assets in the North America region are located in the United States.