17. SEGMENT INFORMATION

The Corporation’s segments are composed of similar product groupings that serve the same or similar end markets. Based on this approach, the Corporation has three reportable segments: Commercial/Industrial, Defense, and Power, as described below in further detail.

The Commercial/Industrial reportable segment is comprised of businesses that provide a diversified offering of highly engineered products and services supporting critical applications primarily across the commercial aerospace and general industrial markets. The products offered include electronic throttle control devices and transmission shifters, electro-mechanical actuation control components, valves, and surface technology services such as shot peening, laser peening, coatings, and advanced testing.

The Defense reportable segment is comprised of businesses that primarily provide products to the defense markets and to a lesser extent the commercial aerospace market. The products offered include commercial off-the-shelf (COTS) embedded computing board level modules, integrated subsystems, turret aiming and stabilization products, weapons handling systems, avionics and electronics, flight test equipment, and aircraft data management solutions.

The Power segment is comprised of businesses that primarily provide products to the power generation markets and to a lesser extent the naval defense market. The products offered include main coolant pumps, power-dense compact motors, generators, secondary propulsion systems, pumps, pump seals, control rod drive mechanisms, fastening systems, specialized containment doors, airlock hatches, spent fuel management products, and fluid sealing products.

The Corporation’s measure of segment profit or loss is operating income. Interest expense and income taxes are not reported on an operating segment basis as they are not considered in the segments’ performance evaluation by the Corporation’s chief operating decision-maker, its Chief Executive Officer.

Net sales and operating income by reportable segment are as follows:



	Year Ended December 31,
(In thousands)	2017			2016			2015
Net sales
Commercial/Industrial	$	1,163,510		$	1,120,326		$	1,189,120
Defense	557,954			469,796			479,528
Power	554,048			524,967			545,013
Less: Intersegment Revenues	(4,486		)	(6,158		)	(7,978		)
Total Consolidated	$	2,271,026		$	2,108,931		$	2,205,683



(In thousands)	2017			2016			2015
Operating income (expense)
Commercial/Industrial	$	168,328		$	156,550		$	171,525
Defense	109,355			98,291			98,895
Power	85,260			76,472			74,987
Corporate and Eliminations ⁽¹⁾	(23,200		)	(23,215		)	(34,790		)
Total Consolidated	$	339,743		$	308,098		$	310,617



Depreciation and amortization expense
Commercial/Industrial	$	53,180	$	53,970	$	55,799
Defense	20,702		14,488		15,965
Power	22,019		23,032		23,419
Corporate	4,094		4,518		4,292
Total Consolidated	$	99,995	$	96,008	$	99,475



Segment assets
Commercial/Industrial	$	1,444,097	$	1,391,040	$	1,480,052
Defense	1,044,776		751,859		800,613
Power	482,753		516,321		629,612
Corporate	264,695		378,561		79,334
Total Consolidated	$	3,236,321	$	3,037,781	$	2,989,611



Capital expenditures
Commercial/Industrial	$	29,028	$	30,145	$	21,990
Defense	9,276		5,870		3,834
Power	10,039		6,653		6,163
Corporate	4,362		4,108		3,525
Total Consolidated ⁽²⁾	$	52,705	$	46,776	$	35,512

⁽¹⁾ Corporate and Eliminations includes pension expense, environmental remediation and administrative expenses, legal, foreign currency transactional gains and losses, and other expenses.

⁽²⁾ Total capital expenditures included $0.2 million of expenditures related to discontinued operations for the year ended 2015.

Reconciliations



	Year Ended December 31,
(In thousands)	2017			2016			2015
Earnings before taxes:
Total segment operating income	$	362,943		$	331,313		$	345,407
Corporate and Eliminations	(23,200		)	(23,215		)	(34,790		)
Interest expense	41,471			41,248			36,038
Other income, net	1,347			1,111			615
Total consolidated earnings before tax	$	299,619		$	267,961		$	275,194



	As of December 31,
(In thousands)	2017		2016		2015
Assets:
Total assets for reportable segments	$	2,971,626	$	2,659,220	$	2,910,277
Non-segment cash	204,664		357,021		42,164
Other assets	60,031		21,540		37,170
Total consolidated assets	$	3,236,321	$	3,037,781	$	2,989,611

Geographic Information



	Year Ended December 31,
(In thousands)	2017		2016		2015
Revenues
United States of America	$	1,562,180	$	1,472,241	$	1,502,363
United Kingdom	118,350		114,752		135,673
Other foreign countries	590,496		521,938		567,647
Consolidated total	$	2,271,026	$	2,108,931	$	2,205,683



	As of December 31,
(In thousands)	2017		2016		2015
Long-Lived Assets
United States of America	$	264,829	$	272,826	$	293,612
United Kingdom	41,100		39,014		36,061
Other foreign countries	84,306		77,063		83,971
Consolidated total	$	390,235	$	388,903	$	413,644

Net sales by product line



	Year Ended December 31,
(In thousands)	2017		2016		2015
Net sales
Flow Control	$	899,705	$	883,735	$	949,657
Motion Control	1,075,218		940,162		947,758
Surface Technologies	296,103		285,034		308,268
Consolidated total	$	2,271,026	$	2,108,931	$	2,205,683

The Flow Control products include valves, pumps, motors, generators, and instrumentation that manage the flow of liquids and gases, generate power, and monitor or provide critical functions. Motion Control's products include turret aiming and stabilization products, embedded computing board level modules, electronic throttle control devices, transmission shifters, and electro-mechanical actuation control components. Surface Technologies include shot peening, laser peening, and coatings services that enhance the durability, extend the life, and prevent premature fatigue and failure on customer-supplied metal components.