Segment Reporting

12 Months Ended

Jul. 31, 2016

Segment Reporting, Measurement Disclosures [Abstract]

Segment Reporting

Segment Reporting

The Company has identified two reportable segments: Engine Products and Industrial Products. Segment determination 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 end-markets and to independent distributors, OEM dealer networks, private label accounts and large equipment fleets. Products include air filtration systems, exhaust and emissions systems and liquid filtration systems including hydraulics, fuel, lube and replacement filters.

The Industrial Products segment sells to various industrial dealers, distributors, 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 semi-conductor manufacturing.

Corporate and Unallocated includes corporate expenses determined to be non-allocable to the segments, such as interest income and interest expense. Assets included in Corporate and Unallocated are principally 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 earnings 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. The accounting policy applied to inventory for the reportable segments differs from that described in the summary of significant accounting policies. The reportable segments account for inventory on a standard cost basis, which is consistent with the Company's internal reporting.

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, the Company does 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 (in millions):

	Engine Products		Industrial Products		Corporate and Unallocated			Total Company
Fiscal 2016
Net sales	$	1,391.3	$	829.0	$	—		$	2,220.3
Depreciation and amortization	38.5		28.1		8.3			74.9
Equity earnings in unconsolidated affiliates	1.0		1.2		—			2.2
Earnings (loss) before income taxes	163.5		119.0		(25.1		)	257.4
Assets	841.4		646.9		300.3			1,788.6
Equity investments in unconsolidated affiliates	14.3		4.4		—			18.7
Capital expenditures	37.5		27.3		8.1			72.9
Fiscal 2015
Net sales	$	1,484.1	$	887.1	$	—		$	2,371.2
Depreciation and amortization	43.3		26.4		4.6			74.3
Equity earnings in unconsolidated affiliates	4.1		1.0		—			5.1
Earnings (loss) before income taxes	186.3		123.3		(21.0		)	288.6
Assets	887.7		634.0		287.8			1,809.5
Equity investments in unconsolidated affiliates	15.1		3.2		—			18.3
Capital expenditures	54.6		33.4		5.8			93.8
Fiscal 2014
Net sales	$	1,584.0	$	889.5	$	—		$	2,473.5
Depreciation and amortization	38.9		24.0		4.3			67.2
Equity earnings in unconsolidated affiliates	5.6		0.9		—			6.5
Earnings (loss) before income taxes	233.9		134.0		(7.2		)	360.7
Assets	900.1		572.0		470.3			1,942.4
Equity investments in unconsolidated affiliates	17.4		4.0		—			21.4
Capital expenditures	56.3		34.7		6.2			97.2

Net sales by product within the Engine Products segment and Industrial Products segment is summarized as follows (in millions):

	Year Ended July 31,
	2016		2015		2014
Engine Products segment:
Off-Road Products	$	216.6	$	261.1	$	342.2
On-Road Products	127.2		138.4		130.0
Aftermarket Products*	951.5		980.7		1,012.2
Aerospace and Defense Products	96.0		103.9		99.6
Total Engine Products segment	1,391.3		1,484.1		1,584.0
Industrial Products segment:
Industrial Filtration Solutions Products	517.9		529.0		553.4
Gas Turbine Products	149.6		186.9		156.9
Special Applications Products	161.5		171.2		179.2
Total Industrial Products segment	829.0		887.1		889.5
Total Company	$	2,220.3	$	2,371.2	$	2,473.5

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* Includes replacement part sales to the Company’s OEM customers.

Net sales by origination and property, plant and equipment by geographic region are summarized as follows (in millions):

	Net Sales (1)		Property, Plant and Equipment, Net
2016
United States	$	937.3	$	192.9
Europe	632.7		148.1
Asia Pacific	449.9		60.1
Other	200.4		68.7
Total	$	2,220.3	$	469.8
2015
United States	$	1,007.3	$	209.0
Europe	671.3		141.7
Asia Pacific	470.7		63.8
Other	221.9		56.1
Total	$	2,371.2	$	470.6
2014
United States	$	1,019.9	$	196.7
Europe	728.6		128.9
Asia Pacific	517.3		72.1
Other	207.7		54.0
Total	$	2,473.5	$	451.7

(1)Net sales by origination is based on the country of the Company's legal entity where the customer's order was placed.

Concentrations There were no customers with over 10% of net sales during the years ended July 31, 2016, 2015 and 2014, respectively. There were no customers over 10% of gross accounts receivable at July 31, 2016 or July 31, 2015.