Segment Reporting

12 Months Ended

Jul. 31, 2012

Segment Reporting [Abstract]

Segment Reporting

NOTE L  Segment Reporting

Consistent with FASB guidance related to segment reporting, the Company identified two reportable segments: Engine Products and Industrial Products. Segment selection was based on the internal organizational structure, management of operations, and performance evaluation by management and the Company's Board of Directors.

The Engine Products segment sells to OEMs in the construction, mining, agriculture, aerospace, defense, and truck markets and to independent distributors, OEM dealer networks, private label accounts, and large equipment fleets. Products include air filtration systems, exhaust and emissions systems, liquid filtration systems including hydraulics, fuel and lube, and replacement filters.

The Industrial Products segment sells to various industrial end-users, OEMs of gas-fired turbines, and OEMs and end-users requiring clean air. Products include dust, fume, and mist collectors, compressed air purification systems, air filtration systems for gas turbines, PTFE membrane-based products, and specialized air and gas filtration systems for applications including computer hard disk drives, and other electronic equipment.

Corporate and Unallocated includes corporate expenses determined to be non-allocable to the segments, interest income, and interest expense. Assets included in Corporate and Unallocated principally are cash and cash equivalents, inventory reserves, certain prepaids, certain investments, other assets, and assets allocated to general corporate purposes.

The Company has an internal measurement system to evaluate performance and allocate resources based on profit or loss from operations before income taxes. The Company's manufacturing facilities serve both reporting segments. Therefore, the Company uses an allocation methodology to assign costs and assets to the segments. A certain amount of costs and assets relate to general corporate purposes and are not assigned to either segment. Certain accounting policies applied to the reportable segments differ from those described in the summary of significant accounting policies. The reportable segments account for receivables on a gross basis and account for inventory on a standard cost basis.

Segment allocated assets are primarily accounts receivable, inventories, property, plant and equipment, and goodwill. Reconciling items included in Corporate and Unallocated are created based on accounting differences between segment reporting and the consolidated, external reporting as well as internal allocation methodologies.

The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, we do not represent that these segments, if operated independently, would report the operating profit and other financial information shown below.

Segment detail is summarized as follows:

	Engine Products		Industrial Products		Corporate & Unallocated			Total Company
	(thousands of dollars)
2012
Net sales	$	1,570,140	$	923,108	$	—		$	2,493,248
Depreciation and amortization		36,646		18,852		5,667			61,165
Equity earnings in unconsolidated affiliates		3,966		769		—			4,735
Earnings before income taxes		227,941		149,249		(6,410	)		370,780
Assets		845,176		520,739		364,167			1,730,082
Equity investments in unconsolidated affiliates		17,304		2,822		—			20,126
Capital expenditures, net of acquired businesses		46,816		24,083		7,240			78,139
2011
Net sales	$	1,440,495	$	853,534	$	—		$	2,294,029
Depreciation and amortization		36,338		19,396		4,757			60,491
Equity earnings in unconsolidated affiliates		3,302		803		—			4,105
Earnings before income taxes		211,255		123,871		(22,863	)		312,263
Assets		888,080		519,730		318,283			1,726,093
Equity investments in unconsolidated affiliates		16,619		2,558		—			19,177
Capital expenditures, net of acquired businesses		36,423		19,442		4,768			60,633
2010
Net sales	$	1,126,007	$	751,057	$	—		$	1,877,064
Depreciation and amortization		33,433		20,935		4,864			59,232
Equity earnings in unconsolidated affiliates		1,859		160		—			2,019
Earnings before income taxes		155,833		91,084		(16,741	)		230,176
Assets		702,300		477,154		320,052			1,499,506
Equity investments in unconsolidated affiliates		14,860		625		—			15,485
Capital expenditures, net of acquired businesses		24,355		15,250		3,544			43,149

Following are net sales by product within the Engine Products segment and Industrial Products segment:

	2012		2011		2010
	(thousands of dollars)
Engine Products segment:
Off-Road Products	$	376,870	$	327,557	$	222,329
On-Road Products		163,934		127,107		81,874
Aftermarket Products*		907,306		861,393		691,899
Retrofit Emissions Products		15,354		19,555		17,928
Aerospace and Defense Products		106,676		104,883		111,977
Total Engine Products segment		1,570,140		1,440,495		1,126,007
Industrial Products segment:
Industrial Filtration Solutions Products		553,453		507,646		423,050
Gas Turbine Products		180,669		154,726		150,131
Special Applications Products		188,986		191,162		177,876
Total Industrial Products segment		923,108		853,534		751,057
Total Company	$	2,493,248	$	2,294,029	$	1,877,064

*Includes replacement part sales to the Company's OEM Customers.

Geographic sales by origination and property, plant and equipment:

	Net Sales		Property, Plant & Equipment - Net
	(thousands of dollars)
2012
United States	$	1,064,474	$	146,328
Europe		678,619		114,266
Asia - Pacific		572,163		80,200
Other		177,992		44,115
Total	$	2,493,248	$	384,909
2011
United States	$	941,218	$	141,584
Europe		653,275		131,739
Asia - Pacific		540,874		81,035
Other		158,662		37,144
Total	$	2,294,029	$	391,502
2010
United States	$	745,400	$	139,717
Europe		545,803		122,646
Asia - Pacific		460,470		72,950
Other		125,391		30,579
Total	$	1,877,064	$	365,892

Concentrations There were no Customers over 10 percent of net sales during Fiscal 2012, 2011, and 2010. There was one Customer over 10 percent of gross accounts receivable in Fiscal 2012 and no customers over 10 percent of gross accounts receivable in Fiscal 2011.