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Note 19. Segment disclosure

The Company organizes its activities in two operating segments, Front-end and Back-end. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer (CEO), which is the chief operating decision maker.

The Front-end segment manufactures and sells equipment used in wafer processing, encompassing the fabrication steps in which silicon wafers are layered with semiconductor devices. The segment is a product driven organizational unit comprised of manufacturing, service, and sales operations in Europe, the United States, Japan, South Korea and Southeast Asia.

The Back-end segment manufactures and sells equipment and materials used in assembly and packaging, encompassing the processes in which silicon wafers are separated into individual circuits and subsequently assembled, packaged and tested. The segment is organized in ASM Pacific Technology Ltd, in which the Company holds a substantial share of 39.55% interest, whilst the remaining shares are listed on the Stock Exchange of Hong Kong. The segment’s main operations are located in Hong Kong, the People’s Republic of China, Singapore, Malaysia and Germany.

The Back-end segment remains reported as a separate segment since the cease of control per March 15, 2013. Since that date the segment is reported as an equity method investment as the CEO reviews this information as part of his CODM package.

Accordingly, the asset and result information regarding the operations that comprise the segment are disclosed. The full financial results are reviewed by the CODM, the external reporting of the segment are on an equity method investment basis. The total of all segments' financial amounts are reconciled to the corresponding amounts reported in the Consolidated financial statements, eliminations are reflected in the reconciling column for amounts reported in excess of those amounts reflected in the Consolidated financial statements.

Year ended December 31, 2014
Front-endBack-end 100%DeconsolidatedTotal
Net sales545,6041,386,776(1,386,776)545,604
Gross profit235,278492,137(492,137)235,278
Result from operations93,374209,439(209,439)93,374
Interest income1,5831,583
Interest expense(3,272)(11,745)11,745(3,272)
Foreign currency exchange gains (losses), net26,43926,439
Result on investments in associates(278)39,69139,413
Income tax expense(19,377)(43,728)43,728(19,377)
Net earnings discontinued operations3,1573,157
Net earnings (loss)98,469153,966(111,118)141,317
Cash flows from operating activities124,736144,734(144,734)124,736
Cash flows from investing activities(46,130)(142,431)142,431(26,156)
Cash flows from financing activities(57,824)104,222(84,248)(57,824)
Cash and cash equivalents385,777275,431(275,431)385,777
Goodwill11,27043,076(43,076)11,270
Other intangible assets65,21466,617(66,617)65,214
Investments in associates1,092,9481,092,948
Other identifiable assets334,076755,106(755,106)334,076
Total assets796,3371,140,230(47,282)1,889,285
Total debt247,608(247,608)
Headcount 11,63515,946(15,946)1,635
  1. Headcount includes those employees with a fixed contract, and is exclusive of temporary workers.
Year ended December 31, 2015
Front-endBack-end 100%DeconsolidatedTotal
Net sales669,6211,505,625(1,505,625)669,621
Gross profit295,527547,079(547,079)295,527
Result from operations111,063176,360(176,360)111,063
Interest income1,1121,112
Interest expense(1,620)(18,181)18,181(1,620)
Foreign currency exchange gains (losses), net25,26425,264
Result on investments in associates(900)17,00816,108
Income tax expense5,350(47,622)47,6225,350
Net earnings (loss)140,269110,557(93,549)157,277
Cash flows from operating activities174,817137,991(137,991)174,817
Cash flows from investing activities(71,458)(34,470)34,470(28,593)
Cash flows from financing activities(104,911)(112,571)112,571104,911
Cash and cash equivalents446,915239,428(239,428)446,915
Goodwill11,27050,697(50,697)11,270
Other intangible assets81,53571,691(71,691)81,535
Investments in associates1,180,8391,180,839
Other identifiable assets355,418910,481(910,481)355,418
Total assets895,1381,272,297(91,458)2,075,977
Total debt304,775(304,775)
Headcount 11,59714,348(14,348)1,597
  1. Headcount includes those employees with a fixed contract, and is exclusive of temporary workers.

There are no inter-segment transactions, other than charges for management services, which are based on actual cost. The accounting policies used to measure the net earnings and total assets in each segment are consistent to those used in the Consolidated financial statements. The measurement methods used to determine reported segment earnings are consistently applied for all periods presented. There were no asymmetrical allocations to segments.

Geographical information is summarized as follows:

EuropeUnited States of AmericaJapanSouth KoreaTaiwanOther AsiaCorporateConsolidated
Year ended December 31, 2014
Net sales94,518177,00662,48293,59581,14336,860545,604
Non-current assets6,76233,88115,59811,6675111,2532479,236
Year ended December 31, 2015
Net sales99,326123,859179,595109,919106,83350,089669,621
Non-current assets7,46737,09119,77616,00813911,2724191,794

For geographical reporting, net sales are attributed to the geographic location in which the customer's facilities are located.