Segment and Geographic Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment and Geographic Information

17. Segment and Geographic Information

The internal reporting structure used by our Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. Our CODM is our Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of income from operations. Our operations are organized in two reporting

segments that are aligned with key product types and end markets served, Power Transmission Technologies and Automation & Specialty:

•Power Transmission Technologies. This segment includes the following key product offerings:

oCouplings, Clutches & Brakes. Couplings are the interface between two shafts, which enable power to be transmitted from one shaft to the other. Clutches in this segment are devices that use mechanical, hydraulic, pneumatic, or friction type connections to facilitate engaging or disengaging two rotating members. Brakes are combinations of interacting parts that work to slow or stop machinery. Products in this segment are generally used in heavy industrial applications and energy markets.

oElectromagnetic Clutches & Brakes. Products in this segment include brakes and clutches that are used to electronically slow, stop, engage or disengage equipment utilizing electromagnetic friction type connections. Products in this segment are used in industrial and commercial markets including agricultural machinery, material handling, motion control, and turf & garden.

oGearing. Gears are utilized to reduce the speed and increase the torque of an electric motor or engine to the level required to drive a particular piece of equipment. Gears produced by the Company are primarily utilized in industrial applications.

•Automation & Specialty. Our Automation & Specialty segment consists of the following key brands:

oKollmorgen: Provides rotary precision motion solutions, including servo motors, stepper motors, high performance electronic drives and motion controllers and related software, and precision linear actuators. These products are used in advanced material handling, aerospace and defense, factory automation, medical, packaging, printing, semiconductor, robotic and other applications.

oPortescap: Provides high-efficiency miniature motors and motion control products, including brush and brushless DC motors, can stack motors and disc magnet motors. These products are used in medical, industrial power tool and general industrial equipment applications.

oThomson: Provides systems that enable and support the transition of rotary motion to linear motion. Products include linear bearings, guides, glides, lead and ball screws, industrial linear actuators, clutch brakes, precision gears, resolvers and inductors. These products are used in factory automation, medical, mobile off-highway, material handling, food processing and other niche applications.

Segment financial information and a reconciliation of segment results to consolidated results follows:

	Year Ended December 31,
	2022			2021			2020
Net Sales:
Power Transmission Technologies	$	985.6		$	924.8		$	818.6
Automation & Specialty		965.5			979.0			911.8
Inter-segment eliminations		(5.6	)		(4.0	)		(4.4	)
Net sales	$	1,945.5		$	1,899.8		$	1,726.0
Income from operations:
Segment earnings:
Power Transmission Technologies (1)	$	136.8		$	128.6		$	97.5
Automation & Specialty (2)		136.0			(8.3	)		(10.4	)
Corporate (3)		(27.2	)		(19.9	)		(2.2	)
Restructuring and consolidation costs		(5.2	)		(3.0	)		(7.4	)
Income from operations		240.4			97.4			77.5
Other non-operating (income) expense:
Interest expense, net		51.5			94.5			72.1
Other non-operating expense (income), net		(0.4	)		(4.9	)		1.4
		51.1			89.6			73.5
Income before income taxes		189.3			7.8			4.0
(Benefit)/Provision for income taxes		62.3			(19.9	)		29.5
Net income/(loss)	$	127.0		$	27.7		$	(25.5	)

(1) In 2022, the Company recorded a non-cash impairment charge of $3.0 million related to a building expected to be sold upon the closing of its facility in Dessau, Germany. The asset held for sale is part of “Prepaid expenses and Other current assets” in the consolidated balance sheet.

(2) The Company recorded non-cash impairment charges of $10.2 million and $142.4 million in 2022 and 2021, respectively, at the JVS reporting unit related to the held for sale classification. In 2020, the Company recorded non-cash impairment charges of $8.4 million and $139.1 million for indefinite-lived intangible assets and goodwill, respectively, at the JVS reporting unit.

(3) Certain expenses are maintained at the corporate level and not allocated to the segments. These include various administrative expenses related to the corporate headquarters, depreciation on capitalized software costs, non-capitalizable software implementation costs and acquisition related expenses.

Selected information by segment (continued)

	Years Ended December 31,
	2022		2021		2020
Depreciation and amortization:
Power Transmission Technologies	$	28.0	$	31.5	$	32.9
Automation & Specialty		63.6		88.2		91.5
Corporate		2.6		2.6		3.2
Total depreciation and amortization	$	94.2	$	122.3	$	127.6
	Years Ended December 31,
	2022		2021
Total assets:
Power Transmission Technologies	$	1,075.0	$	1,069.4
Automation & Specialty		2,511.2		2,879.2
Corporate (1)		90.4		182.0
Total assets	$	3,676.6	$	4,130.6

(1) Corporate assets are primarily cash and cash equivalents, tax related asset accounts, certain capitalized software costs, property, plant and equipment and deferred financing costs.

	Net Sales						Property, Plant and Equipment
	Years Ended December 31,						Years Ended December 31,
	2022		2021		2020		2022		2021
North America (primarily U.S.)	$	1,124.2	$	1,018.3	$	914.9	$	160.4	$	134.6
Europe excluding Germany		344.8		341.9		289.3		47.4		48.5
Germany		209.5		200.0		185.8		45.5		55.4
China		148.0		222.9		222.5		7.0		24.7
Asia and other (excluding China)		119.0		116.7		113.5		14.8		12.6
Total	$	1,945.5	$	1,899.8	$	1,726.0	$	275.1	$	275.8

Net sales to third parties are attributed to the geographic regions based on the country in which the shipment originates. Amounts attributed to the geographic regions for property, plant and equipment are based on the location of the entity, which holds such assets.