Segment Reporting

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting

Note 11 — Segment Reporting

Segment information is used by management for making operating decisions for the Company. Management evaluates the performance of the Company’s segments based primarily on operating income or loss (see Note 2).

As part of the initiative to integrate the operations of historical Gentherm and W.E.T. Automotive Systems AG (now known as Gentherm GmbH), changes were made to Gentherm’s structure of internal organization.  The financial information used by our chief operating decision maker to assess performance and allocation resources reflects changes brought about through this initiative.  

Gentherm’s organization structure no longer treats the operations of historical Gentherm and Gentherm GmbH separately.  The integration expanded the research and development activities analyzed within the advanced technology segment and moved certain selling, general and administrative costs previously reported within the Gentherm GmbH segment to corporate reconciling items.

As discussed in Note 3, Gentherm acquired GPT on April 1, 2014.  The acquisition enhanced key elements of the Company’s business strategy to expand the breadth of products derived from core thermal technologies, as well as the markets in which they are applied.  The chief operation decision maker evaluates GPT’s performance separate from the automotive segment.  The operating results of GPT and the advanced research and development division are presented together as one reporting segment due to their complementary focus on thermoelectric technologies and related products.

The Company’s reportable segments are as follows:

1. Automotive — this segment represents the design, development, manufacturing and sales of automotive seat comfort systems, specialized automotive cable systems and certain automotive and non-automotive thermal convenience products.

2. Industrial — the combined operating results of GPT and Gentherm’s advanced research and development division.  Advanced research and development includes efforts focused on improving the efficiency of thermoelectric technologies and advanced heating wire technology as well as other applications.  The segment includes government sponsored research projects, including those sponsored by the U.S. Department of Energy, the Germany Ministry of Economics and Technology and the European Union.

3. Reconciling Items — include corporate selling, general and administrative costs and acquisition transaction costs.  

Note 11 — Segment Reporting (Continued)

The tables below present segment information about the reported product revenues and operating income of the Company for years ended December 31, 2014, 2013 and 2012. With the exception of goodwill, asset information by segment is not reported since the Company does not manage assets at a segment level. As of December 31, 2014, goodwill assigned to our Automotive and Industrial segments were $24,140 and $6,258, respectively.  Goodwill as of December 31, 2013 and 2012 pertained entirely to our Automotive segment.

	Automotive		Industrial			Reconciling Items			Consolidated Total
2014:
Product revenues	$	787,065	$	24,235		$	—		$	811,300
Depreciation and amortization		30,016		2,114			2,899			35,029
Operating income (loss)		144,645		(8,922	)		(37,289	)		98,434
2013:
Product revenues	$	662,082	$	—		$	—		$	662,082
Depreciation and amortization		28,439		323			2,487			31,249
Operating income (loss)		91,255		(5,860	)		(35,011	)		50,384
2012:
Product revenues	$	554,979	$	—		$	—		$	554,979
Depreciation and amortization		29,188		247			1,192			30,627
Operating income (loss)		71,995		(5,252	)		(30,087	)		36,656

The Industrial operating loss is net of reimbursement for developmental expense of $8,885, $2,324 and $2,239 for the years ended 2014, 2013 and 2012, respectively. Reconciling items include selling, general and administrative costs of $36,214, $32,597 and $30,087, respectively, for the years ended December 31, 2014, 2013 and 2012 and acquisition costs $1,075 and $2,414 for the years ended December 31, 2014 and 2013, respectively.

Revenue (based on shipment destination) by geographic area is as follows:

	2014		%			2013		%			2012		%
United States	$	361,706		45	%	$	292,079		44	%	$	233,737		42	%
Germany		90,243		11	%		84,035		13	%		67,132		12	%
Korea		89,515		11	%		58,329		9	%		42,878		8	%
China		69,910		9	%		70,671		11	%		55,674		10	%
Japan		47,528		6	%		39,844		6	%		35,279		6	%
Czech Republic		25,738		3	%		17,247		3	%		15,361		3	%
United Kingdom		24,712		3	%		18,864		3	%		13,194		2	%
Canada		20,293		2	%		14,254		2	%		17,582		3	%
Mexico		19,590		2	%		15,670		2	%		14,988		3	%
Other		62,065		8	%		51,089		7	%		59,154		11	%
Total Non U.S.		449,594		56	%		370,003		56	%		321,242		58	%
	$	811,300		100	%	$	662,082		100	%	$	554,979		100	%

We rely on three customers, two domestic and one foreign, to derive a significant portion of our product revenues.  The table below lists the percentage of total product revenues generated from sales to these customers:

	2014			2013			2012
Johnson Controls (domestic)		24	%		27	%		22	%
Lear (domestic)		21	%		18	%		18	%
Bosch (foreign)		9	%		10	%		10	%