Segment Information

6 Months Ended

Jul. 03, 2020

Our operating segments are determined based on how the Company's chief operating decision maker views and evaluates operations. Our reportable segments are described below:


•	Buildings and Infrastructure: This segment primarily serves customers working in architecture, engineering, construction, and operations and maintenance.


•	Geospatial: This segment primarily serves customers working in surveying, engineering, government, and land management.


•	Resources and Utilities: This segment primarily serves customers working in agriculture, forestry, and utilities.


•	Transportation: This segment primarily serves customers working in long haul trucking, field service management, rail, and military aviation.

The following Reporting Segment tables reflect the results of our reportable operating segments under our management reporting system. These results are not necessarily in conformity with U.S. GAAP. We present segment revenue and income excluding the effects of certain acquired deferred revenue that was written down to fair value in purchase accounting. Segment income presented also excludes the effects of certain acquired capitalized commissions that were eliminated in purchase accounting, as though the acquired companies operated independently in the periods presented. This is consistent with the way the chief operating decision maker evaluates each of the segment's performance and allocates resources.



	Reporting Segments
	Buildings and Infrastructure			Geospatial		Resources and Utilities			Transportation			Total
(In millions)
Second Quarter of Fiscal 2020
Revenue	$	295.2		$	145.2	$	142.9		$	150.3		$	733.6
Acquired deferred revenue adjustment	0.1			—		0.9			0.6			1.6
Segment revenue	$	295.3		$	145.2	$	143.8		$	150.9		$	735.2

Operating income	$	86.6		$	37.4	$	48.3		$	13.8		$	186.1
Acquired deferred revenue adjustment	0.1			—		0.9			0.6			1.6
Amortization of acquired capitalized commissions	(1.3		)	—		(0.1		)	—			(1.4		)
Segment operating income	$	85.4		$	37.4	$	49.1		$	14.4		$	186.3

Depreciation expense	$	2.0		$	1.5	$	1.3		$	1.1		$	5.9

Second Quarter of Fiscal 2019
Revenue	$	339.0		$	164.4	$	152.6		$	198.8		$	854.8
Acquired deferred revenue adjustment	0.9			—		0.1			—			1.0
Segment revenue	$	339.9		$	164.4	$	152.7		$	198.8		$	855.8

Operating income	$	85.3		$	31.1	$	45.4		$	32.9		$	194.7
Acquired deferred revenue adjustment	0.9			—		0.1			—			1.0
Amortization of acquired capitalized commissions	(1.6		)	—		—			—			(1.6		)
Segment operating income	$	84.6		$	31.1	$	45.5		$	32.9		$	194.1

Depreciation expense	$	2.1		$	1.6	$	1.1		$	1.2		$	6.0

First Two Quarters of Fiscal 2020
Revenue	592.0			$	291.4	$	321.9		$	320.6		$	1,525.9
Acquired deferred revenue adjustment	0.2			—		2.2			0.9			3.3
Segment revenue	$	592.2		$	291.4	$	324.1		$	321.5		$	1,529.2

Operating income	$	148.7		$	67.9	$	113.9		$	30.5		$	361.0
Acquired deferred revenue adjustment	0.2			—		2.2			0.9			3.3
Amortization of acquired capitalized commissions	(2.7		)	—		(0.1		)	(0.1		)	(2.9		)
Segment operating income	$	146.2		$	67.9	$	116.0		$	31.3		$	361.4

Depreciation expense	$	4.1		$	2.9	$	2.6		$	2.2		$	11.8

First Two Quarters of Fiscal 2019
Revenue	$	631.0		$	325.6	$	311.9		$	387.9		$	1,656.4
Acquired deferred revenue adjustment	3.6			—		0.3			—			$	3.9
Segment revenue	$	634.6		$	325.6	$	312.2		$	387.9		$	1,660.3

Operating income	$	146.7		$	60.5	$	96.4		$	64.1		367.7
Acquired deferred revenue adjustment	3.6			—		0.3			—			3.9
Amortization of acquired capitalized commissions	(3.2		)	—		(0.1		)	—			(3.3		)
Segment operating income	$	147.1		$	60.5	$	96.6		$	64.1		$	368.3

Depreciation expense	$	4.2		$	3.2	$	2.2		$	2.3		$	11.9



	Reporting Segments
	Buildings and Infrastructure		Geospatial		Resources and Utilities		Transportation		Total
(In millions)
As of the end of the Second Quarter of Fiscal 2020
Accounts receivable, net	$	166.6	$	90.3	$	81.1	$	140.8	$	478.8
Inventories	63.5		129.4		44.7		101.0		338.6
Goodwill	1,964.8		400.1		440.2		1,002.4		3,807.5
As of Fiscal Year End 2019
Accounts receivable, net	232.0		115.5		93.3		167.4		608.2
Inventories	67.1		125.0		45.5		74.5		312.1
Goodwill	$	1,973.0	$	401.5	$	445.4	$	860.7	$	3,680.6

A reconciliation of our condensed consolidated segment operating income to condensed consolidated income before income taxes is as follows:



	Second Quarter of						First Two Quarters of
	2020			2019			2020			2019
(In millions)
Consolidated segment operating income	$	186.3		$	194.1		$	361.4		$	368.3
Unallocated corporate expense	(16.4		)	(18.3		)	(30.3		)	(36.8		)
Restructuring charges	(5.2		)	(2.9		)	(8.4		)	(6.6		)
COVID-19 expenses	0.2			—			(3.6		)	—
Acquired deferred revenue adjustment	(1.6		)	(1.0		)	(3.3		)	(3.9		)
Amortization of purchased intangible assets	(39.8		)	(43.5		)	(80.2		)	(87.8		)
Stock-based compensation and deferred compensation	(25.4		)	(18.3		)	(29.9		)	(37.4		)
Amortization of acquired capitalized commissions	1.4			1.6			2.9			3.3
Acquisition / divestiture items	(1.9		)	(2.0		)	(12.7		)	(3.1		)
Consolidated operating income	97.6			109.7			195.9			196.0
Non-operating income (expense), net	(6.7		)	5.7			(25.6		)	(5.4		)
Consolidated income before taxes	$	90.9		$	115.4		$	170.3		$	190.6

On a total Company basis, the disaggregation of revenue by geography is summarized in the tables below. Revenue is defined as revenue from external customers attributed to countries based on the location of the customer and excludes the effects of certain acquired deferred revenue that was written down to fair value in purchase accounting, consistent with the Reporting Segment tables above.



	Reporting Segments
	Buildings and Infrastructure		Geospatial		Resources and Utilities		Transportation		Total
(In millions)
Second Quarter of Fiscal 2020
North America	$	175.6	$	57.7	$	51.8	$	117.0	$	402.1
Europe	78.0		45.1		63.3		20.7		207.1
Asia Pacific	36.4		33.4		14.0		7.0		90.8
Rest of World	5.3		9.0		14.7		6.2		35.2
Total consolidated revenue	$	295.3	$	145.2	$	143.8	$	150.9	$	735.2
Second Quarter of Fiscal 2019
North America	$	199.2	$	71.3	$	52.9	$	161.9	$	485.3
Europe	90.0		56.0		68.0		22.9		236.9
Asia Pacific	42.1		26.2		11.9		9.8		90.0
Rest of World	8.6		10.9		19.9		4.2		43.6
Total consolidated revenue	$	339.9	$	164.4	$	152.7	$	198.8	$	855.8

First Two Quarters of Fiscal 2020
North America	$	347.7	$	114.5	$	105.5	$	248.8	$	816.5
Europe	159.6		95.8		153.7		39.8		448.9
Asia Pacific	73.5		62.1		31.5		17.5		184.6
Rest of World	11.4		19.0		33.4		15.4		79.2
Total consolidated revenue	$	592.2	$	291.4	$	324.1	$	321.5	$	1,529.2
First Two Quarters of Fiscal 2019
North America	$	364.8	$	134.2	$	94.8	$	313.9	$	907.7
Europe	173.9		110.7		156.9		44.0		485.5
Asia Pacific	80.6		57.9		24.6		20.3		183.4
Rest of World	15.3		22.8		35.9		9.7		83.7
Total consolidated revenue	$	634.6	$	325.6	$	312.2	$	387.9	$	1,660.3

Trimble’s total revenue in the United States as included in the Condensed Consolidated Statements of Income was $368.7 million and $747.5 million and $435.6 million and $824.7 million for the second quarter and first two quarters of fiscal 2020 and 2019, respectively. No single customer or country other than the United States accounted for 10% or more of Trimble’s total revenue.