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SEGMENT INFORMATION
 6 Months Ended
Jul. 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)
 
 
 
 
 
 
 
 
 
Second Quarter of Fiscal 2015
 
 
 
 
 
 
 
 
 
Segment revenue
$
338.5

 
$
87.1

 
$
128.3

 
$
31.9

 
$
585.8

Operating income
60.5

 
24.9

 
18.9

 
11.1

 
115.4

       Depreciation expense
3.5

 
0.3

 
1.3

 
0.2

 
5.3

Second Quarter of Fiscal 2014
 
 
 
 
 
 
 
 
 
Segment revenue
$
368.1

 
$
114.4

 
$
122.9

 
$
36.8

 
$
642.2

Operating income
95.7

 
39.6

 
21.7

 
12.6

 
169.6

       Depreciation expense
3.2

 
0.2

 
1.3

 
0.1

 
4.8

First Two Quarters of Fiscal 2015
 
 
 
 
 
 
 
 
 
Segment revenue
$
637.8

 
$
202.4

 
$
256.5

 
$
71.7

 
$
1,168.4

Operating income
97.5

 
65.5

 
39.4

 
26.3

 
228.7

       Depreciation expense
7.1

 
0.6

 
2.6

 
0.3

 
10.6

First Two Quarters of Fiscal 2014
 
 
 
 
 
 
 
 
 
Segment revenue
$
677.4

 
$
252.6

 
$
241.5

 
$
75.4

 
$
1,246.9

Operating income
156.8

 
93.3

 
39.0

 
24.8

 
313.9

       Depreciation expense
6.3

 
0.4

 
2.5

 
0.3

 
9.5

As of the Second Quarter of Fiscal 2015
 
 
 
 
 
 
 
 
 
Accounts receivable
$
219.4

 
$
48.3

 
$
66.5

 
$
21.3

 
$
355.5

Inventories
196.0

 
44.0

 
24.2

 
16.6

 
280.8

Goodwill
1,154.3

 
106.2

 
804.7

 
22.2

 
2,087.4

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 second quarter and first two quarters 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 second quarter and first two quarters 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)
 
 
 
 
 
 
 
 
 
Second Quarter of Fiscal 2014
 
 
 
 
 
 
 
 
 
Operating income
$
95.7

 
$
39.6

 
$
21.7

 
$
12.6

 
$
169.6

Previously allocated stock-based compensation
(3.8
)
 
(0.9
)
 
(1.3
)
 
(0.5
)
 
(6.5
)
Previously reported operating income
$
91.9

 
$
38.7

 
$
20.4

 
$
12.1

 
$
163.1

 
 
 
 
 
 
 
 
 
 
First Two Quarters of Fiscal 2014
 
 
 
 
 
 
 
 
 
Operating income
$
156.8

 
$
93.3

 
$
39.0

 
$
24.8

 
$
313.9

Previously allocated stock-based compensation
(7.4
)
 
(1.7
)
 
(2.4
)
 
(1.0
)
 
(12.5
)
Previously reported operating income
$
149.4

 
$
91.6

 
$
36.6

 
$
23.8

 
$
301.4


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
 
2015
 
2014
 
2015
 
2014
(Dollars in millions)
 
 
 
 
 
 
 
Consolidated segment operating income
$
115.4

 
$
169.6

 
$
228.7

 
$
313.9

Unallocated corporate expense
(35.8
)
 
(32.6
)
 
(66.1
)
 
(59.2
)
Amortization of purchased intangible assets
(40.8
)
 
(37.8
)
 
(81.5
)
 
(78.4
)
Acquisition costs
(2.8
)
 
(2.0
)
 
(5.6
)
 
(3.4
)
Consolidated operating income
36.0

 
97.2

 
75.5

 
172.9

Non-operating income (expense), net:
(0.2
)
 
1.6

 
4.5

 
14.4

Consolidated income before taxes
$
35.8

 
$
98.8

 
$
80.0

 
$
187.3