SEGMENT INFORMATION

The Company has two operating segments, and the Company’s reportable segments are consistent with those operating segments. Business units are organized under each segment because they share certain characteristics, such as technology, marketing, distribution and product application, which create long-term synergies. On June 2, 2017, the Company completed the acquisition of all of the shares of capital stock of GenNx/TBEI Intermediate Co. (collectively with its subsidiaries, “TBEI”). The Company expects that the acquisition will enable it to strengthen the Environmental Solutions Group’s market position as a specialty vehicle manufacturer in maintenance and infrastructure end-markets, leveraging its expertise in building chassis-based vehicles. The Company has presented the financial statements of TBEI within the Environmental Solutions Group since the closing date and is in the process of determining the impact, if any, that the TBEI acquisition may have on its reportable segments.

The principal activities of the Company’s operating segments are as follows:

Environmental Solutions — Our Environmental Solutions Group is a leading manufacturer and supplier of a full range of street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks, high-performance waterblasting equipment, dump truck bodies and trailers. The Group manufactures vehicles and equipment in the U.S. and Canada that are sold under the Elgin^®, Vactor^®, Guzzler^®, Westech^TM, Jetstream^®, Ox Bodies^®, Crysteel^®, J-Craft^®, Duraclass^®, Rugby^® and Travis^®brand names. Product offerings also include certain products manufactured by other companies, such as refuse and recycling collection vehicles, camera systems, ice resurfacing equipment and snow-removal equipment. Products are sold to both municipal and industrial customers either through a dealer network or direct sales to service customers generally depending on the type and geographic location of the customer. In addition to vehicle and equipment sales, the Group also engages in the sale of parts, service and repair, equipment rentals and training as part of a complete offering to its current and potential customers though its service centers located across North America.

Safety and Security Systems — Our Safety and Security Systems Group is a leading manufacturer and supplier of comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities and industrial sites use to protect people and property. Offerings include systems for campus and community alerting, emergency vehicles, first responder interoperable communications and industrial communications, as well as command and municipal networked security. Specific products include vehicle lightbars and sirens, public warning sirens, general alarm systems, public address systems and public safety software. Products are sold under the Federal Signal^TM, Federal Signal VAMA^® and Victor^® brand names. The Group operates manufacturing facilities in the U.S., Europe and South Africa.

Corporate contains those items that are not included in our operating segments.

Net sales by operating segment reflect sales of products and services to external customers, as reported in the Company’s Consolidated Statements of Operations. Intersegment sales are insignificant. The Company evaluates performance based on operating income of the respective segment. Operating income includes all revenues, costs and expenses directly related to the segment involved. In determining operating segment income, neither corporate nor interest expenses are included. As described in Note 2 – Revenue Recognition, the Company’s revenue recognition accounting policy has been updated to reflect the adoption of Topic 606 on January 1, 2018. The accounting policies of each operating segment are otherwise the same as those described in Note 1 – Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results for the interim periods are not necessarily indicative of results for a full year.

The following tables summarize the Company’s continuing operations by segment, including Net sales, Operating income (loss), and Total assets:



	Three Months Ended March 31,
(in millions)	2018			2017
Net sales:
Environmental Solutions	$	196.6		$	127.8
Safety and Security Systems	53.1			50.0
Total net sales	$	249.7		$	177.8
Operating income (loss):
Environmental Solutions	$	20.6		$	10.3
Safety and Security Systems	6.1			6.4
Corporate and eliminations	(7.1		)	(5.3		)
Total operating income	19.6			11.4
Interest expense	2.5			0.6
Other expense (income), net	0.1			(0.2		)
Income before income taxes	$	17.0		$	11.0



(in millions)	As of March 31, 2018		As of December 31, 2017
Total assets:
Environmental Solutions	$	768.2	$	746.4
Safety and Security Systems	210.5		211.8
Corporate and eliminations	28.9		33.6
Total assets of continuing operations	1,007.6		991.8
Total assets of discontinued operations	0.5		0.5
Total assets	$	1,008.1	$	992.3