SEGMENT INFORMATION

6 Months Ended

Jul. 04, 2014

SEGMENT INFORMATION

SEGMENT INFORMATION

Trimble is a designer and distributor of positioning products and applications enabled by GPS, optical, laser, and wireless communications technology. The Company provides products for diverse applications in its targeted markets.

To achieve distribution, marketing, production and technology advantages, the Company manages its operations in the following four segments:

• Engineering and Construction — Consists of hardware and software solutions for a variety of applications including:  survey, heavy civil and building construction, infrastructure, geospatial, railway, mining and utilities.

• Field Solutions — Consists of hardware and software solutions for applications including agriculture, mapping and geographic information systems (GIS), utilities, and energy distribution.

• Mobile Solutions — Consists of hardware and software solutions that enable end-users to monitor and manage their mobile work, mobile workers and mobile assets.

• Advanced Devices — The various operations that comprise this segment are aggregated on the basis that these operations, taken as a whole, do not exceed 10% of the Company’s total revenue, operating income and assets. This segment is comprised of the Embedded Technologies and Timing, Military and Advanced Systems, Applanix, Trimble Outdoors, and ThingMagic businesses.

The Company’s Chief Operating Decision Maker (CODM), its Chief Executive Officer, evaluates each of its segment’s performance and allocates resources based on segment operating income before income taxes and some corporate allocations. The Company and each of its segments employ consistent accounting policies. In each of its segments the Company sells many individual products. For this reason it is impractical to segregate and identify revenue for each of these individual products or groups of products.

The following table presents revenue, operating income, depreciation expense and identifiable assets for the four segments. Operating income is revenue less cost of sales and operating expense, excluding general corporate expense, amortization of purchased intangible assets, amortization of acquisition-related inventory step-up, acquisition costs and restructuring costs. The identifiable assets that the CODM views by segment are accounts receivable, inventories and goodwill.

	Reporting Segments
	Engineering and Construction		Field Solutions		Mobile Solutions		Advanced Devices		Total
(Dollars in thousands)
Second Quarter of Fiscal 2014
Segment revenue	$	368,072	$	114,456	$	122,880	$	36,791	$	642,199
Operating income	91,884		38,672		20,385		12,083		163,024
Depreciation expense	3,173		191		1,288		158		4,810
Second Quarter of Fiscal 2013
Segment revenue	$	313,446	$	115,864	$	115,524	$	31,459	$	576,293
Operating income	66,840		43,372		15,435		6,514		132,161
Depreciation expense	2,880		153		1,358		190		4,581
First Two Quarters of Fiscal 2014
Segment revenue	$	677,348	$	252,621	$	241,508	$	75,443	$	1,246,920
Operating income	149,399		91,609		36,555		23,759		301,322
Depreciation expense	6,330		354		2,510		337		9,531
First Two Quarters of Fiscal 2013
Segment revenue	$	580,317	$	263,345	$	225,688	$	63,054	$	1,132,404
Operating income	109,813		102,898		27,008		12,999		252,718
Depreciation expense	5,848		287		2,337		387		8,859
As of the Second Quarter of Fiscal 2014
Accounts receivable	$	222,590	$	65,894	$	68,314	$	23,013	$	379,811
Inventories	178,480		50,286		29,980		15,625		274,371
Goodwill	1,084,672		88,476		800,168		24,467		1,997,783
As of Fiscal Year End 2013
Accounts receivable	$	185,634	$	62,859	$	70,174	$	19,265	$	337,932
Inventories	171,863		39,554		27,664		15,230		254,311
Goodwill	1,080,240		88,651		796,094		24,485		1,989,470

A reconciliation of the Company’s consolidated segment operating income to consolidated income before income taxes is as follows:

	Second Quarter of						First Two Quarters of
	2014			2013			2014			2013
(Dollars in thousands)
Consolidated segment operating income	$	163,024		$	132,161		$	301,322		$	252,718
Unallocated corporate expense	(26,052		)	(24,168		)	(46,674		)	(45,517		)
Amortization of purchased intangible assets	(37,874		)	(39,763		)	(78,443		)	(79,095		)
Acquisition costs	(1,964		)	(3,325		)	(3,360		)	(6,744		)
Consolidated operating income	97,134			64,905			172,845			121,362
Non-operating income, net	1,634			3,786			14,398			1,698
Consolidated income before taxes	$	98,768		$	68,691		$	187,243		$	123,060

Unallocated corporate expense includes general corporate expense, amortization of acquisition-related inventory step-up and restructuring costs.