18. 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)	2018			2017			2016
Net sales
Commercial/Industrial	$	1,209,943		$	1,163,510		$	1,120,326
Defense	559,058			557,954			469,796
Power	649,754			554,048			524,967
Less: Intersegment Revenues	(6,920		)	(4,486		)	(6,158		)
Total Consolidated	$	2,411,835		$	2,271,026		$	2,108,931



(In thousands)	2018			2017			2016
Operating income (expense)
Commercial/Industrial	$	182,669		$	168,146		$	156,084
Defense	128,446			109,338			98,182
Power	98,858			81,119			74,360
Corporate and Eliminations ⁽¹⁾	(36,347		)	(33,483		)	(32,107		)
Total Consolidated	$	373,626		$	325,120		$	296,519



Depreciation and amortization expense
Commercial/Industrial	$	50,690	$	53,180	$	53,970
Defense	20,578		20,702		14,488
Power	27,737		22,019		23,032
Corporate	3,944		4,094		4,518
Total Consolidated	$	102,949	$	99,995	$	96,008



Segment assets
Commercial/Industrial	$	1,398,601	$	1,444,097	$	1,391,040
Defense	961,298		1,044,776		751,859
Power	720,073		482,753		516,321
Corporate	175,413		264,695		378,561
Total Consolidated	$	3,255,385	$	3,236,321	$	3,037,781



Capital expenditures
Commercial/Industrial	$	30,411	$	29,028	$	30,145
Defense	5,793		9,276		5,870
Power	11,350		10,039		6,653
Corporate	5,863		4,362		4,108
Total Consolidated	$	53,417	$	52,705	$	46,776

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

Reconciliations



	Year Ended December 31,
(In thousands)	2018			2017			2016
Earnings before taxes:
Total segment operating income	$	409,973		$	358,603		$	328,626
Corporate and Eliminations	(36,347		)	(33,483		)	(32,107		)
Interest expense	33,983			41,471			41,248
Other income, net	16,596			15,970			12,690
Total consolidated earnings before tax	$	356,239		$	299,619		$	267,961



	As of December 31,
(In thousands)	2018		2017		2016
Assets:
Total assets for reportable segments	$	3,079,972	$	2,971,626	$	2,659,220
Non-segment cash	138,053		204,664		357,021
Other assets	37,360		60,031		21,540
Total consolidated assets	$	3,255,385	$	3,236,321	$	3,037,781

Geographic Information



	Year Ended December 31,
(In thousands)	2018		2017		2016
Revenues
United States of America	$	1,623,511	$	1,562,180	$	1,472,241
United Kingdom	126,439		118,350		114,752
Other foreign countries	661,885		590,496		521,938
Consolidated total	$	2,411,835	$	2,271,026	$	2,108,931



	As of December 31,
(In thousands)	2018		2017		2016
Long-Lived Assets
United States of America	$	258,504	$	264,829	$	272,826
United Kingdom	34,649		41,100		39,014
Other foreign countries	81,507		84,306		77,063
Consolidated total	$	374,660	$	390,235	$	388,903

Net sales by product line



	Year Ended December 31,
(In thousands)	2018		2017		2016
Net sales
Flow Control	$	1,008,262	$	899,705	$	883,735
Motion Control	1,090,703		1,075,218		940,162
Surface Technologies	312,870		296,103		285,034
Consolidated total	$	2,411,835	$	2,271,026	$	2,108,931

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.