SEGMENT INFORMATION

3 Months Ended

Apr. 03, 2015

SEGMENT INFORMATION

SEGMENT INFORMATION

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

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

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

• Mobile Solutions — Consists of hardware, software and services 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 or 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 impracticable to segregate and identify revenue for each of the individual products or group 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, stock-based compensation, 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 millions)
First Quarter of Fiscal 2015
Segment revenue	$	299.3	$	115.3	$	128.2	$	39.8	$	582.6
Operating income	37.0		40.6		20.5		15.2		113.3
Depreciation expense	3.6		0.3		1.3		0.1		5.3
First Quarter of Fiscal 2014
Segment revenue	$	309.3	$	138.2	$	118.6	$	38.6	$	604.7
Operating income	61.1		53.7		17.3		12.2		144.3
Depreciation expense	3.1		0.2		1.2		0.2		4.7
As of the end of First Quarter of Fiscal 2015
Accounts receivable	$	218.7	$	71.8	$	65.7	$	26.8	$	383.0
Inventories	192.8		44.2		15.3		23.7		276.0
Goodwill	1,140.5		94.3		802.5		22.1		2,059.4
As of Fiscal Year End 2014
Accounts receivable	$	227.7	$	51.6	$	62.9	$	19.8	$	362.0
Inventories	185.2		51.0		26.1		15.8		278.1
Goodwill	1,186.0		96.0		796.0		23.2		2,101.2

Historically, the Company allocated stock-based compensation to each segment. Beginning with the first quarter of fiscal 2015, the Company changed its methodology for allocating stock-based compensation to its segments. Stock-based compensation is shown in the aggregate within unallocated corporate expense and not reflected in the segment results, which is consistent with the way the CODM evaluates each of the segment's performance and allocates resources. The Company has adjusted the presentation of segment information for the first quarter of fiscal 2014 to conform to the current year methodology. The following table shows the amount of stock-based compensation that had been previously allocated to the business segments in the first quarter of fiscal 2014 and the impact to those segments' Operating income.

	Reporting Segments
	Engineering and Construction			Field Solutions			Mobile Solutions			Advanced Devices			Total
(Dollars in millions)
Operating income	$	61.1		$	53.7		$	17.3		$	12.2		$	144.3
Previously allocated stock-based compensation	(3.6		)	(0.8		)	(1.1		)	(0.5		)	(6.0		)
Previously reported operating income	$	57.5		$	52.9		$	16.2		$	11.7		$	138.3

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

	First Quarter of
	2015			2014
(Dollars in millions)
Consolidated segment operating income	$	113.3		$	144.3
Unallocated corporate expense	(30.3		)	(26.6		)
Amortization of purchased intangible assets	(40.7		)	(40.6		)
Acquisition costs	(2.8		)	(1.4		)
Consolidated operating income	39.5			75.7
Non-operating income, net	4.7			12.8
Consolidated income before taxes	$	44.2		$	88.5