Operating Segments and Related Information

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Operating Segments and Related Information

Operating Segments and Related Information

Operating Segments

The Company has six reportable operating segments as follows:

Surveillance

The Surveillance segment develops and manufactures enhanced imaging and recognition solutions for a wide variety of military, law enforcement, public safety, and other government customers around the world for the protection of borders, troops, and public welfare. Offerings include airborne, land, maritime, and man-portable multi-spectrum imaging systems, radars, lasers, imaging components, integrated multi-sensor system platforms, and services related to these systems.

Instruments

The Instruments segment develops and manufactures devices that image, measure, and assess thermal energy, gases, and other environmental elements for industrial, commercial, and scientific applications. Products include thermal imaging cameras, gas detection cameras, firefighting cameras, process automation cameras, and environmental test and measurement devices.

Security

The Security segment develops and manufactures cameras and video recording systems for use in commercial, critical infrastructure, and home security applications. Products include thermal and visible-spectrum cameras, digital and networkedvideo recorders, and related software and accessories that enable the efficient and effective safeguarding of assets at all hours of the day and through adverse weather conditions.

OEM & Emerging Markets

The OEM & Emerging Markets segment develops and manufactures thermal and visible-spectrum imaging camera cores and components that are utilized by third parties to create thermal, industrial, and other types of imaging systems. The segment also develops and manufactures intelligent traffic monitoring and signal control systems as well as thermal imaging solutions for use by consumers in the smartphone and mobile devices markets.

Maritime

The Maritime segment develops and manufactures electronics and imaging instruments for the recreational and commercial maritime market. The segment provides a full suite of networked electronic systems including multi-function helm displays, navigational instruments, autopilots, radars, sonar systems, thermal and visible imaging systems, and communications equipment for boats of all sizes.

Note 17. Operating Segments and Related Information—(Continued)

Operating Segments - (Continued)

Detection

The Detection segment develops and manufactures sensor instruments and integrated platform solutions for the detection, identification, and suppression of chemical, biological, radiological, nuclear, and explosives threats for military force protection, homeland security, and commercial applications.

The Company’s chief operating decision maker ("CODM"), its Chief Executive Officer, evaluates each of its segment’s performance and allocates resources based on revenue and segment operating income. Intersegment revenues are recorded at cost and are eliminated in consolidation. The Company and each of its segments employ consistent accounting policies.

The following tables present revenue, operating income, and assets for the six segments. Operating income as reviewed by the CODM is revenue less cost of goods sold and operating expense, excluding general corporate expenses, acquisition costs, amortization of purchased intangible assets, amortization of acquisition-related inventory step-up, restructuring charges and executive transition costs. Accounts receivable and inventories for operating segments are regularly reviewed by management and are reported below as segment assets. All remaining assets, liabilities, capital expenditures and depreciation are managed on a Company-wide basis.

Operating segment information is as follows (in thousands):

	Three Months Ended March  31,
	2017			2016
Revenue—External Customers:
Surveillance	$	118,729		$	124,151
Instruments	77,855			79,418
Security	45,078			47,061
OEM & Emerging Markets	84,765			47,845
Maritime	48,550			51,720
Detection	31,837			29,277
	$	406,814		$	379,472
Revenue—Intersegments:
Surveillance	$	4,756		$	4,224
Instruments	5,790			1,575
Security	3,126			2,473
OEM & Emerging Markets	9,170			8,176
Maritime	677			615
Detection	—			—
Eliminations	(23,519		)	(17,063		)
	$	—		$	—
Segment operating income:
Surveillance	$	26,365		$	35,865
Instruments	21,146			19,981
Security	315			(2,169		)
OEM & Emerging Markets	24,357			10,686
Maritime	5,205			5,806
Detection	8,737			8,237
	$	86,125		$	78,406

Note 17. Operating Segments and Related Information—(Continued)

Operating Segments - (Continued)

A reconciliation of the Company's consolidated segment operating income to consolidated earnings before income taxes is as follows (in thousands):

	Three Months Ended March  31,
	2017			2016
Consolidated segment operating income	$	86,125		$	78,406
Unallocated corporate expenses	(18,223		)	(16,624		)
Amortization of purchased intangible assets	(6,736		)	(4,207		)
Amortization of acquisition-related inventory step-up	(1,992		)	—
Restructuring charges	(88		)	(198		)
Consolidated earnings from operations	$	59,086		$	57,377
Interest and non-operating expense, net	(3,522		)	(1,757		)
Consolidated earnings before income taxes	$	55,564		$	55,620

Unallocated corporate expenses include general corporate expenses, acquisition related costs and executive transition costs.

	March 31,		December 31,
	2017		2016
Segment assets (accounts receivable, net and inventories):
Surveillance	$	269,646	$	283,324
Instruments	111,800		114,681
Security	76,976		93,174
OEM & Emerging Markets	139,791		144,862
Maritime	73,619		61,494
Detection	22,966		25,856
	$	694,798	$	723,391

	March 31,		December 31,
	2017		2016
Segment goodwill:
Surveillance	$	244,433	$	152,383
Instruments	148,538		147,595
Security	103,844		102,983
OEM & Emerging Markets	253,074		252,647
Maritime	98,596		97,860
Detection	47,951		47,938
	$	896,436	$	801,406

Note 17. Operating Segments and Related Information—(Continued)

Revenue and Long-Lived Assets by Geographic Area

Information related to revenue by significant geographical location, determined by the end customer, is as follows (in thousands):

	Three Months Ended March  31,
	2017		2016
United States	$	221,832	$	194,283
Europe	83,271		84,410
Asia	53,924		43,825
Middle East/Africa	25,142		27,712
Canada/Latin America	22,645		29,242
	$	406,814	$	379,472

Long-lived assets by significant geographic locations are as follows (in thousands):

	March 31,		December 31,
	2017		2016  (as reclassified)
United States	$	686,546	$	676,007
Europe	480,653		490,089
Other foreign	241,715		243,710
	$	1,408,914	$	1,409,806

Major Customers

Revenue derived from major customers is as follows (in thousands):

	Three Months Ended March  31,
	2017		2016
United States government	$	116,235	$	85,636