Operating Segments and Related Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Operating Segments and Related Information

Operating Segments and Related Information

Operating Segments

The Company’s chief operating decision maker ("CODM"), its Chief Executive Officer, evaluates each of its segments’ 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. In the first quarter of 2020, the Company completed a business reorganization as part of its "Project Be Ready" restructuring plan which resulted in identification of two reportable segments (Industrial Technologies and Defense Technologies). The Company commenced operating and reporting under the new organization structure effective January 1, 2020. See Note 21, “Restructuring” for further information on Project Be Ready.

Note 19.    Operating Segments and Related Information - (Continued)

Operating Segments - (Continued)

Industrial Technologies Segment. The Industrial Technologies 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, manufactures, and services offerings that image, measure, and analyze thermal energy, gases, and other environmental elements for industrial, commercial, and scientific applications, imaging payloads for Unmanned Aerial Systems ("UAS"), and machine vision cameras. Additionally, the segment develops, manufactures, and services fixed-mounted visible and thermal imaging cameras and related analytics software for perimeter security, critical infrastructure, recreational and commercial maritime, and traffic monitoring and control. Offerings include thermal imaging cameras, analytics software, gas detection cameras, firefighting cameras, process automation cameras, environmental test and measurement devices, security cameras, marine electronics, and traffic cameras.

Defense Technologies Segment. The Defense Technologies 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. The segment also develops and manufactures sensor instruments and integrated platform solutions for the detection, identification, and suppression of chemical, biological, radiological, nuclear, and explosives ("CBRNE") threats for military force protection, homeland security, and commercial applications. Offerings include airborne, land, maritime, and man-portable multi-spectrum imaging systems, radars, lasers, imaging components, integrated multi-sensor system platforms, CBRNE detectors, nano-class UAS solutions, and services related to these systems. The segment also produces advanced multi-mission unmanned air and ground based systems serving US Department of Defense and Federal government agencies, public safety, and governmental customers in international markets.

The following tables present revenue, segment operating income, and segment assets for the two segments. Segment operating income as reviewed by the CODM is revenue less cost of goods sold and operating expenses, excluding general corporate expenses, separation, transaction, and integration costs, amortization of acquired intangible assets, restructuring expenses and asset impairment charges, and discrete legal and compliance matters. Net accounts receivable, inventories and demonstration assets for the 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.

Segment operating income information is as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Revenue—External Customers:
Industrial Technologies	$	1,156,058	$	1,092,085	$	1,112,250
Defense Technologies	767,631		794,941		663,436
	$	1,923,689	$	1,887,026	$	1,775,686
Revenue—Intersegments:
Industrial Technologies	$	12,206	$	15,073	$	19,052
Defense Technologies	7,580		5,507		11,409
Eliminations	(19,786)		(20,580)		(30,461)
	$	—	$	—	$	—
Segment operating income:
Industrial Technologies	$	344,376	$	276,167	$	268,472
Defense Technologies	168,469		196,592		194,009
	$	512,845	$	472,759	$	462,481

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

Note 19.    Operating Segments and Related Information - (Continued)

Operating Segments - (Continued)

	Year Ended December 31,
	2020		2019		2018
Consolidated segment operating income	$	512,845	$	472,759	$	462,481
Unallocated corporate expenses	(117,657)		(118,358)		(97,440)
Amortization of purchased intangible assets	(47,471)		(57,376)		(24,524)
Asset impairment charges	—		(13,666)		(3,349)
Restructuring expenses	(30,475)		(10,099)		(4,854)
Loss on sale of business	—		—		(13,708)
Consolidated earnings from operations	317,242		273,260		318,606
Loss on debt extinguishment	(9,126)		—		—
Interest and non-operating income (expense), net	(23,112)		(31,344)		(11,503)
Consolidated earnings before income taxes	$	285,004	$	241,916	$	307,103

Unallocated corporate expenses include general corporate expenses, separation, transaction, and integration costs, amortization of acquired intangible assets, restructuring expenses and asset impairment charges, and discrete legal and compliance matters.

A reconciliation of the Company's consolidated segment operating assets to consolidated total assets is as follows (in thousands):

	December 31,
	2020		2019
Operating segment assets:
Net accounts receivable, inventories and demonstration assets:
Industrial Technologies	$	419,323	$	405,166
Defense Technologies	436,595		332,639
	$	855,918	$	737,805
Goodwill:
Industrial Technologies	651,439		635,899
Defense Technologies	742,925		728,697
	$	1,394,364	$	1,364,596
Total operating segment assets	$	2,250,282	$	2,102,401
Assets not allocated:
Cash and cash equivalents	$	297,795	$	284,592
Prepaid expenses and other current assets	74,526		86,337
Property and equipment, net	267,682		255,905
Deferred income taxes	36,210		39,983
Intangible assets, net	209,636		247,514
Other assets	$	116,217	$	120,809
Total assets	$	3,252,348	$	3,137,541

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):

Note 19.    Operating Segments and Related Information - (Continued)

Revenue and Long-Lived Assets by Geographic Area - (Continued)

	Year Ended December 31,
	2020						2019
	Industrial Technologies		Defense Technologies		Total Consolidated		Industrial Technologies		Defense Technologies		Total Consolidated
United States	$	517,951	$	511,296	$	1,029,247	$	523,766	$	513,428	$	1,037,194
Europe	294,090		99,074		393,164		280,184		118,301		398,485
Asia	238,997		53,901		292,898		193,437		63,717		257,154
Middle East/Africa	48,772		92,243		141,015		32,642		90,110		122,752
Canada/Latin America	56,248		11,117		67,365		62,056		9,385		71,441
	$	1,156,058	$	767,631	$	1,923,689	$	1,092,085	$	794,941	$	1,887,026

Long-lived assets are comprised of net property and equipment, net identifiable intangible assets, goodwill and other long-term assets. Long-lived assets by significant geographic locations are as follows (in thousands):

	December 31,
	2020		2019
United States	$	1,144,758	$	1,137,375
Europe	440,549		435,024
Other foreign	402,592		416,425
	$	1,987,899	$	1,988,824

Major Customers

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

	Year Ended December 31,
	2020		2019		2018
United States government	$	602,735	$	603,769	$	511,094