14.	Business Segments

Presented below are the net sales and income (loss) before income taxes for the Corporation’s two business segments. Other expense, including corporate costs, for the three months ended March 31, 2018, includes the impact of a favorable contractual settlement with a third party of approximately $2,425 and higher pension and other postretirement benefit income of approximately $1,100. For the three months ended March 31, 2017, other expense, including corporate costs, includes $367 of interest, fees and early termination costs associated with extinguishing the outstanding credit facility and term loan of an acquired entity.

	Three Months Ended March 31,
	2018			2017
Net sales:
Forged and Cast Engineered Products	$	93,908		$	81,702
Air and Liquid Processing		21,169			21,814
Total Reportable Segments	$	115,077		$	103,516
Income (loss) before income taxes:
Forged and Cast Engineered Products	$	876		$	(723	)
Air and Liquid Processing		2,259			2,681
Total Reportable Segments		3,135			1,958
Other expense, including corporate costs		(2,187	)		(6,535	)
Total	$	948		$	(4,577	)

The Forged and Cast Engineered Products segment produces forged hardened steel rolls – forged mill rolls or cast mill rolls – and ingot and open-die forged products (“forged engineered products”). The Air and Liquid Processing segment produces custom-engineered finned tube heat exchange coils and related heat transfer products, large custom-designed air handling systems and centrifugal pumps. The Corporation’s contracts with customers can be a purchase order from the customer, an order acknowledgment from the Corporation, a longer-term supply agreement between the buyer and the Corporation, or a similar arrangement deemed to be normal and customary business practice for that particular customer or class of customer (collectively, a sales agreement). Sales agreements typically include a single performance obligation for the manufacturer of product which is satisfied upon transfer of control of the product to the customer.

Transfer of control is assessed based on alternative use of the product manufactured and, under the terms of the sales agreement, enforceable right to payment for performance to date. Transfer of control, and therefore revenue recognition, occurs when title, ownership and risk of loss pass to the customer. Typically, this occurs when the product is shipped to the customer (i.e., FOB shipping point), delivered to the customer (i.e., FOB destination), or, for foreign sales, in accordance with trading guidelines known as Incoterms. Incoterms are standard trade definitions used in international contracts and are developed, maintained and promoted by the ICC Commission on Commercial Law and Practice. Shipping terms vary across the businesses and typically depend on the product, country of origin and type of transportation (truck or vessel).

The sales price required to be paid by the customer is fixed or determinable from the sales agreement. It is not subject to refund or adjustment, except for a variable-index surcharge provision which is known at the time of shipment and increases or decreases, as applicable, the selling price of a mill roll for corresponding changes in the published index cost of certain raw materials. The variable-index surcharge is recognized as revenue when the corresponding revenue for the inventory is recognized. Likelihood of collectability is assessed prior to acceptance of an order. There are no customer-acceptance provisions other than customer inspection and testing prior to shipment. Post-shipment obligations are insignificant. The Corporation provides a limited warranty on its products and may issue credit notes or replace products free of charge for valid claims. Historically, warranty claims have been insignificant. The Corporation records a provision for product warranties at the time the underlying sale is recorded. The provision is based on historical experience as a percent of sales adjusted for potential claims when a liability is probable and for known claims. Payment terms are standard to the industry and generally require payment 30 days after title transfers.

Net sales and income (loss) before income taxes and equity income in joint venture by geographic area for the three months ended March 31, 2018, and 2017, were as follows:

	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2018			2017
United States	$	58,551	$	55,502	$	(2,175	)	$	(4,886	)
Foreign		56,526		48,014		3,123			309
	$	115,077	$	103,516	$	948		$	(4,577	)

Net sales by product line for the three months ended March 31, 2018, and 2017, were as follows:

	Three Months Ended March 31,
	2018		2017
Forged and cast mill rolls	$	67,488	$	64,252
Forged engineered products		26,420		17,451
Heat exchange coils		6,401		6,921
Centrifugal pumps		8,375		10,184
Air handling systems		6,393		4,708
	$	115,077	$	103,516