Segments

12 Months Ended

Sep. 29, 2018

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Effective October 1, 2017, we made changes to our segment reporting structure that resulted in three reporting segments. Our former Components segment has been separated and merged into Space and Defense Controls and Industrial Systems. All amounts have been restated to reflect this change.

Aircraft Controls. We design, manufacture and integrate primary and secondary flight controls for military and commercial aircraft and provide aftermarket support. Our systems are used on both development and production programs in large commercial transports, supersonic fighters, multi-role military aircraft, business jets and rotorcraft. We also supply ground-based navigation aids.

We are currently working on the KC-46 military air refueling tanker on the military side, and the COMAC C919 and the Embraer E-Jet E2 family on the commercial side. Typically development programs require concentrated periods of research and development by our engineering teams, while production programs are generally long-term manufacturing efforts that extend for as long as the aircraft builder receives new orders.

In the past few years, a number of significant programs have begun to transition from the development phase to initial low-rate production, including the Lockheed Martin F-35 Joint Strike Fighter on the military side and the Boeing 787 and Airbus A350XWB on the commercial side. In terms of mature production programs, our large military programs include the F/A-18E/F Super Hornet, the V-22 Osprey tiltrotor and the Black Hawk UH-60/Seahawk SH-60 helicopter, while our large commercial production programs include the full line of Boeing 7-series aircraft, Airbus A330 and A380 and a variety of business jets.

Aftermarket sales, which represented 29%, 27% and 29% of 2018, 2017 and 2016 sales, respectively, for this segment consist of the maintenance, repair, overhaul and parts supply for both military and commercial aircraft. Further, we sell spare parts and line replaceable units to both military and commercial customers that they store throughout the world in order to minimize down time.

Space and Defense Controls. We provide controls for satellites, space vehicles, launch vehicles, armored combat vehicles, tactical and strategic missiles, security and surveillance and other defense applications.

We design, manufacture and integrate commercial and military satellite positioning controls. Propulsion components and systems accelerate the spacecraft for orbit-insertion, station keeping, and attitude control. Mission specific actuation mechanisms control solar array panels and antennas. We also design, manufacture and integrate steering and propulsion controls for space launch vehicles, such as the Atlas, Delta and Ariane platforms. Additionally, we design and manufacture spaceflight electronics and software. We are also developing new control products and systems for a variety of programs related to manned spaceflight including: NASA's new Space Launch System and Multi-Purpose Crew Vehicle.

In addition, we design controls for gun aiming, stabilization and automatic ammunition loading for armored combat vehicles for a variety of domestic and international customers. We are also developing a new reconfigurable turret system for several military vehicle programs. We also design controls for steering tactical and strategic missiles including: Lockheed Martin's Hellfire^®, the U.S. National Missile Defense Agency's Ballistic Missile Defense initiatives and Raytheon's TOW and Trident missiles. We also design, build and integrate weapons stores management systems for light attack aerial reconnaissance, ground and sea platforms, as well as build high power, quiet controls for naval surface ships and submarines such as the US Virginia Class. Our sensor and surveillance products are used in both military and commercial applications such as electrical grid and other critical infrastructure protection applications.

Also, we design and manufacture a number of component products that serve both the space and defense segments, including slip rings, fiber optic rotary joints and motors. Slip rings and fiber optic rotary joints use sliding contacts and optical technology to allow unimpeded rotation while delivering power and data through a rotating interface. Slip rings, fiber optic rotary joints and motors are used in a broad range of solutions, including satellites, missiles, radar pedestals and gimbals.

Industrial Systems. We provide customized machine performance components and systems utilizing electrohydraulic, electromechanical and control technologies in applications involving motion control, fluid control and power and data management across a variety of markets.

In the industrial automation market, we design, manufacture and integrate components and systems for applications in injection and blow molding machinery, metal forming presses and heavy industry for steel and aluminum production. Our components and systems allow for precise controls of critical parameters in the industrial manufacturing processes, using both hydraulic and electric technologies. Other industrial automation applications we serve include material handling and paper mills.

In the simulation and test market, we supply electromechanical motion simulation bases for the flight simulation and training applications, as well as medical training simulators. We also supply custom test systems and controls for automotive, structural and fatigue testing.

In the energy market, we supply solutions for power generation applications which allow for precise control and greater safety of fuel metering and guide vane positioning on steam and gas turbines. We also design and manufacture high reliability systems and components for applications in oil and gas exploration and production, including downhole drilling, topside and subsea environments. We supply high-reliability components for wind turbine applications.

In the medical market, we supply components and systems for diagnostic imaging CT scan medical equipment, sleep apnea equipment, oxygen concentrators, infusion therapy and enteral clinical nutrition.

Our components product categories include hydraulics, slip rings and fiber optic rotary joints, motors and infusion and enteral pumps and associated sets across similar markets.

Hydraulic components include high-performance servo valves with mechanical or electronic feedback, high-dynamic performance hydraulic servo pumps, energy-efficient electro hydrostatic actuators and complex hydraulic manifold systems.

Slip rings and fiber optic rotary joints use sliding contacts and optical technology to allow unimpeded rotation while delivering power and data through a rotating interface. They come in a range of sizes that allow them to be used in many applications, including diagnostic imaging CT scan medical equipment, remotely operated vehicles and floating platforms for offshore oil exploration, surveillance cameras and wind turbines.

Electric motors are used in an equally broad range of solutions, many of which are the same as for slip rings. We design and manufacture a series of fractional horsepower brushless motors that provide extremely low acoustic noise and reliable long life operation, with the largest program being sleep apnea equipment. Industrial customers use our motors for material handling and electric pumps. We supply ultra high-torque servomotors for servo press applications and high-power, multi-megawatt generators for dynamometer testing and hydropower.

Infusion therapy products include infusion pumps and associated administration sets. They offer IV, intra-arterial, subcutaneous or epidural flow of fluids and precise medicine delivery and can be applied to many applications, including hydration, nutrition, patient-controlled analgesia, local anesthesia, chemotherapy and antibiotics.

Enteral clinical nutrition products include a complete line of portable and stationary pumps along with disposable sets. They are designed for ease of use and mobility. Medical customers use our enteral feeding products in the delivery of enteral nutrition for patients in their own homes, hospitals and long-term care facilities.

Segment information and reconciliations to consolidated amounts are as follows:



	2018		2017		2016
Net sales:
Aircraft Controls	$	1,193,505	$	1,124,885	$	1,063,718
Space and Defense Controls	580,877		529,203		499,449
Industrial Systems	935,086		843,436		848,770
Net sales	$	2,709,468	$	2,497,524	$	2,411,937
Operating profit:
Aircraft Controls	$	128,665	$	114,016	$	98,509
Space and Defense Controls	66,875		48,517		53,823
Industrial Systems	62,312		87,619		85,910
Total operating profit	257,852		250,152		238,242
Deductions from operating profit:
Interest expense	36,238		34,551		34,605
Equity-based compensation expense	5,804		4,582		3,271
Corporate and other expenses, net	31,973		29,308		27,506
Earnings before income taxes	$	183,837	$	181,711	$	172,860
Depreciation and amortization:
Aircraft Controls	$	40,795	$	41,977	$	46,541
Space and Defense Controls	17,900		18,980		18,198
Industrial Systems	28,825		28,099		32,744
Corporate	1,052		1,111		1,249
Total depreciation and amortization	$	88,572	$	90,167	$	98,732
Identifiable assets:
Aircraft Controls	$	1,168,964	$	1,120,099	$	1,114,672
Space and Defense Controls	660,589		575,132		589,629
Industrial Systems	1,077,022		1,124,950		1,058,737
Corporate	57,473		270,411		241,936
Total assets	$	2,964,048	$	3,090,592	$	3,004,974

Operating profit is net sales less cost of sales and other operating expenses, excluding interest expense, equity-based compensation expense and other corporate expenses. Cost of sales and other operating expenses are directly identifiable to the respective segment or allocated on the basis of sales, manpower or profit.



	2018		2017		2016
Capital expenditures:
Aircraft Controls	$	46,705	$	36,216	$	28,437
Space and Defense Controls	22,452		15,173		9,336
Industrial Systems	25,156		23,953		29,014
Corporate	204		456		421
Total capital expenditures	$	94,517	$	75,798	$	67,208

Sales, based on the customer’s location, and property, plant and equipment by geographic area are as follows:



	2018		2017		2016
Net sales:
United States	$	1,592,513	$	1,438,428	$	1,353,398
Germany	202,676		195,328		173,182
Japan	158,686		152,148		164,702
France	138,054		145,627		120,907
Other	617,539		565,993		599,748
Net sales	$	2,709,468	$	2,497,524	$	2,411,937
Property, plant and equipment, net:
United States	$	325,088	$	303,925	$	302,446
Philippines	63,870		64,260		65,000
United Kingdom	61,438		64,065		64,280
Other	102,469		90,741		90,643
Property, plant and equipment, net	$	552,865	$	522,991	$	522,369

Sales to Boeing were $382,184, $321,110 and $346,596, or 14%, 13% and 14% of sales, in 2018, 2017 and 2016, respectively, including sales to Boeing Commercial Airplanes of $238,118, $252,977 and $251,288 in 2018, 2017 and 2016, respectively. Sales arising from U.S. Government prime or sub-contracts, including military sales to Boeing, were $897,882, $775,271 and $726,562 in 2018, 2017 and 2016, respectively. Sales to Boeing and the U.S. Government and its prime- or sub-contractors are made primarily from our Aircraft Controls and Space and Defense Controls segments.