SEGMENT AND GEOGRAPHIC INFORMATION

The Company reports its financial results within two reportable segments: (1) Product Licensing and (2) Semiconductor and IP Licensing. There are certain corporate overhead costs that are not allocated to these reportable segments because these operating amounts are not considered in evaluating the operating performance of the Company’s business segments.

The Chief Executive Officer is also the Chief Operating Decision Maker (“CODM”) as defined by the authoritative guidance on segment reporting.

The Product Licensing segment, including the Company's DTS and FotoNation subsidiaries, licenses its technologies and intellectual property related to audio, digital radio and imaging solutions under the brands DTS, HD Radio and FotoNation. The Product Licensing solutions typically include the delivery of software or hardware-based solutions, combined with various other intellectual property, including know how, patents, trademarks, and copyrights. Product Licensing represents revenue derived primarily from the consumer electronics market and related applications servicing the home, automotive and mobile markets.

The Semiconductor and IP Licensing segment develops and licenses semiconductor technologies and IP to manufacturers, foundries, subcontract assemblers and others. The segment includes revenue generated from the technology and IP portfolios of Tessera, Inc. Invensas and Invensas Bonding Technologies, Inc. (formally Ziptronix, Inc.). Tessera, Inc. pioneered chip-scale packaging solutions. Invensas develops advanced semiconductor packaging and 3D interconnect solutions, including wafer bonding solutions, for applications such as smartphones, tablets, laptops, PCs, data centers and automobiles. The Company expands its technology and IP offerings in this segment through a combination of internal R&D and acquisitions. The Company also provides engineering services to customers in the form of technology demonstrations and technology transfers to assist their evaluation and adoption of the Company's technologies. Through the Company’s technology transfer service, the Company provides detailed documentation outlining design guidelines, process specifications, recommended equipment and process parameters as well as hands-on engineering support to assist its licensees in bringing up and qualifying its technologies at their facilities. This service allows licensees to readily leverage the Company’s years of experience and expertise in direct and hybrid bonding.

The Company does not identify or allocate assets by reportable segment, nor does the CODM evaluate reportable segments using discrete asset information. Reportable segments do not record inter-segment revenue and accordingly there are none to report. The Company does not allocate other income and expense to reportable segments. Although the CODM uses operating income to evaluate reportable segments, operating costs included in one segment may benefit other segments.

The following table sets forth the Company’s segment revenue, operating expenses and operating income (loss) for the years ended December 31, 2017, 2016 and 2015 (in thousands):



	Years Ended December 31,
	2017				2016				2015
Revenue:
Product licensing segment (1)		$	167,923			$	30,499			$	31,335
Semiconductor and IP licensing segment		205,809				229,066				241,965
Total revenue		373,732				259,565				273,300
Operating expenses:
Product licensing segment		172,745				25,299				11,191
Semiconductor and IP licensing segment		87,838				72,812				56,315
Unallocated operating expenses (2)		144,649				72,066			(3)	43,592
Total operating expenses		405,232				170,177				111,098
Operating income (loss):
Product licensing segment		(4,822		)		5,200				20,144
Semiconductor and IP licensing segment		117,971				156,254				185,650
Unallocated operating expenses (2)		(144,649		)		(72,066		)		(43,592		)
Total operating income (loss)		$	(31,500	)		$	89,388			$	162,202

(1) Includes $0.1 million and $1.3 million for 2016 and 2015, respectively, which are not part of current segment operations.

(2) Unallocated operating expenses consist primarily of general and administrative expenses and stock-based compensation. These expenses are not allocated because it is not practical to do so.

(3) Includes approximately $23.9 million in transaction-related costs, severance, and other one-time expenses related to the DTS acquisition.

A significant portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., principally in Asia, and it is expected that this revenue will continue to account for a significant portion of total revenues in future periods. The table below lists the geographic revenue from continuing operations for the periods indicated (in thousands):



	Years Ended December 31,
	2017				2016				2015
U.S.	$	164,846	44	%	$	99,594	38	%	$	98,428	36	%
Japan	81,688		22		6,866		3		9,409		3
Korea	50,155		13		95,170		37		87,527		32
Taiwan	33,861		9		34,763		13		57,049		21
Other	43,182		12		23,172		9		20,887		8
	$	373,732	100	%	$	259,565	100	%	$	273,300	100	%

For the years ended December 31, 2017, 2016, and 2015, two, four and four customers, respectively, each accounted for 10% or more of total revenue.

As of December 31, 2017, 2016 and 2015 property and equipment, net, by geographical area are presented below (in thousands):



	Years Ended December 31,
	2017		2016		2015
U.S.	$	32,862	$	36,891	$	3,219
Europe	1,019		1,252		529
Asia and other	561		712		—
Total	$	34,442	$	38,855	$	3,748