Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

Segment and Geographical Information

The Company’s financial performance is managed and reported in two segments. A description of each segment follows. Prior periods presented have been recasted to reflect the new segment structure.

Our reportable segments have been identified in accordance with ASC 280-10-50 through our evaluation of how the Company engages in business activities to earn revenues and incur expenses, which operating results are regularly reviewed by our chief operating decision maker (“CODM”) to assess performance and make decisions about resources to be allocated, and the availability of discrete financial information. CIRCOR’s reportable segments are generally organized based upon the end markets we sell our product and services into. No individual operating segments have been aggregated for purposes of determining our reportable segments.

Advanced Flow Solutions is a diversified flow control technology platform. Our primary product focus areas are valves, actuation, motors, switches, high pressure pneumatic systems, steam and process loop flow management solutions. AFS products are used in aerospace, defense, power and process, and general industrial markets. These products are primarily focused on the following end markets: Aerospace and Defense, Power and Process, HVAC, Maritime and Industrial Gas. We plan to grow Advanced Flow Solutions by increasing market share in existing and new markets through exceptional sales and customer service enabled by innovative, reliable and high quality solutions. Product portfolio expansion through acquisitions of differentiated technologies in current and adjacent applications is also a key part of our growth strategy

Energy is a global provider of highly engineered integrated flow control solutions, valves and services primarily in the Oil & Gas end market. We are focused on satisfying our customers’ mission-critical application needs by utilizing advanced technologies. Our flow control solutions can withstand extreme temperatures and pressures, including land-based, topside, and sub-sea applications. Energy is growing its product offering in the severe service sector, which includes applications such as process control, oil sands, pressure control and cryogenic applications. We plan to grow Energy by expanding our capabilities in Oil & Gas - upstream, mid-stream and downstream, including through acquisitions.

Each reporting segment is individually managed, as each requires different technology and marketing strategies, and has separate financial results that are reviewed by our CODM. Our CODM evaluates segment performance and determines how to allocate resources utilizing, among other data, segment operating income. Segment operating income excludes special and restructuring charges, net. In addition, certain administrative expenses incurred at the corporate level for the benefit of the reporting segments are allocated to the segments based upon specific identification of costs, employment related information or net revenues. Each segment contains related products and services particular to that segment.

Corporate is reported on a net “after allocations” basis. Inter-segment intercompany transactions affecting net operating profit have been eliminated within the respective reportable segments.

The amounts reported in the Corporate expenses line item in the following table consists primarily of the following: compensation and fringe benefit costs for executive management and other corporate staff; Board of Director compensation; corporate development costs (relating to mergers and acquisitions); human resource development and benefit plan administration expenses; legal, accounting and other professional and consulting costs; facilities, equipment and maintenance costs; and travel and various other administrative costs. The above costs are incurred in the course of furthering the business prospects of the Company and relate to activities such as: implementing strategic business growth opportunities; corporate governance; risk management; tax; treasury; investor relations and shareholder services; regulatory compliance; strategic tax planning; and stock transfer agent costs.

The Company’s management evaluates segment operating performance using "segment operating income" which we define as operating income before special restructuring charges, special other charges, restructuring related inventory charges, impairment charges, amortization from acquisitions subsequent to 2011, amortization expense related to the step-up in fair value of the inventory acquired through business acquisitions, and 2015 Brazil restatement impact. The Company also refers to this measure as segment operating income or adjusted operating income. The Company uses this measure because it helps management understand and evaluate the segments’ core operating results and facilitate comparison of performance for determining incentive compensation achievement.

The following table presents certain reportable segment information (in thousands):

	2016			2015			2014
Net revenues
Energy	$	322,046		$	383,655		$	552,973
Advanced Flow Solutions	268,213			272,612			288,473
Inter-segment revenues	994			1,124			1,783
Corporate	(994		)	(1,124		)	(1,783		)
Consolidated revenues	$	590,259		$	656,267		$	841,446
Segment Income
Energy - Segment Operating Income	$	34,619		$	50,386		$	79,742
Advanced Flow Solutions - Segment Operating Income	33,463			33,811			29,883
Corporate expenses	(25,672		)	(21,710		)	(23,415		)
Subtotal	42,410			62,487			86,210
Special restructuring charges, net	8,975			4,634			5,246
Special other charges, net	8,196			9,720			7,491
Special and restructuring charges, net	17,171			14,354			12,737
Restructuring related inventory charges	2,846			9,391			7,989
Amortization of inventory step-up	1,366			—			—
Impairment charges	208			2,502			726
Acquisition amortization	9,901			6,838			—
Brazil restatement impact	—			3,228			—
Restructuring and other cost, net	14,321			21,959			8,715
Consolidated Operating Income	10,918			26,174			64,757
Interest Expense, net (a)	3,310			2,844			2,652
Other (Expense) Income, net (a)	(2,072		)	902			(1,156		)
Income from continuing operations before income taxes	$	9,680		$	22,428		$	63,261
Identifiable assets
Energy	$	658,749		$	463,359		$	545,216
Advanced Flow Solutions	407,035			486,369			291,821
Corporate	(245,028		)	(279,813		)	(112,315		)
Consolidated Identifiable assets	$	820,756		$	669,915		$	724,722
Capital expenditures
Energy	$	3,902		$	6,176		$	6,157
Advanced Flow Solutions	8,535			6,324			5,412
Corporate	1,775			814			1,241
Consolidated Capital expenditures	$	14,212		$	13,314		$	12,810
Depreciation and amortization
Energy	$	8,755		$	7,102		$	8,503
Advanced Flow Solutions	15,555			15,624			9,949
Corporate	1,309			1,209			1,110
Consolidated Depreciation and amortization	$	25,619		$	23,935		$	19,562
(a) The company does not allocate interest or other income (expense), net to its segments.

The total assets for each reportable segment have been reported as the Identifiable Assets for that segment, including inter-segment intercompany receivables, payables and investments in other CIRCOR companies. Identifiable assets reported in Corporate include both corporate assets, such as cash, deferred taxes, prepaid and other assets, fixed assets, as well as the elimination of all inter-segment intercompany assets. The elimination of intercompany assets results in negative amounts reported in Corporate for Identifiable Assets. Corporate Identifiable Assets after elimination of intercompany assets were $50.5 million, $46.7 million, and $48.8 million as of December 31, 2016, 2015 and 2014, respectively.

The following tables present net revenue and long-lived assets by geographic area. The net revenue amounts are based on shipments to each of the respective areas.

	Year Ended December 31,
Net revenues by geographic area (in thousands)	2016		2015		2014
United States	$	232,650	$	284,227	$	406,153
Saudi Arabia	68,693		33,155		7,980
France	42,908		34,839		40,755
Canada	32,750		46,575		41,054
United Kingdom	27,579		36,005		58,479
Germany	26,451		26,889		30,672
Norway	21,668		43,502		50,634
China	11,157		13,255		15,397
Rest of Europe	32,460		24,508		40,290
Rest of Asia-Pacific	39,808		36,247		73,163
Other	54,135		77,065		76,869
Total net revenues	$	590,259	$	656,267	$	841,446

	December 31,
Long-lived assets by geographic area (in thousands)	2016		2015
United States	$	55,577	$	38,199
United Kingdom	10,584		11,234
Germany	10,242		10,410
Italy	5,258		6,290
France	5,209		5,823
India	3,949		4,235
Other	8,894		10,475
Total long-lived assets	$	99,713	$	86,666