Reportable Business Segments

9 Months Ended

Sep. 30, 2016

Reportable Business Segments

Reportable Business Segments

Note 4—Reportable Business Segments

The Company has two reportable business segments: (i) Interconnect Products and Assemblies and (ii) Cable Products and Solutions. The Company aggregates its operating segments into reportable segments based upon similar economic characteristics and business groupings of products, services and customers. The Interconnect Product and Assemblies segment primarily designs, manufactures and markets a broad range of connector and connector systems, value-add products and other products, including antennas and sensors, used in a broad range of applications in a diverse set of end markets.  The Cable Products and Solutions segment primarily designs, manufactures and markets cable, value-add products and components for use primarily in the broadband communications and information technology markets as well as certain applications in other markets.  The accounting policies of the segments are the same as those for the Company as a whole and are described in Note 1 of the notes to the consolidated financial statements in the Company’s 2015 Annual Report.  The Company evaluates the performance of business units on, among other things, profit or loss from operations before interest, headquarters’ expense allocations, stock-based compensation expense, income taxes, amortization related to certain intangible assets and nonrecurring gains and losses.

The segment results for the three and nine months ended September 30, 2016 and 2015 are as follows:

	Interconnect Products				Cable Products
	and Assemblies				and Solutions				Total
	2016		2015		2016		2015		2016		2015
Three months ended September 30:
Net sales:
External	$	1,543.2	$	1,378.2	$	92.7	$	81.4	$	1,635.9	$	1,459.6
Intersegment		1.5		1.5		8.7		5.6		10.2		7.1
Segment operating income		342.0		307.4		13.8		10.2		355.8		317.6
Nine months ended September 30:
Net sales:
External	$	4,366.9	$	3,889.5	$	268.4	$	248.7	$	4,635.3	$	4,138.2
Intersegment		5.0		5.6		21.6		15.7		26.6		21.3
Segment operating income		932.2		856.3		38.6		30.2		970.8		886.5

A reconciliation of segment operating income to consolidated income before income taxes for the three and nine months ended September 30, 2016 and 2015 is summarized as follows:

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Segment operating income	$	355.8	$	317.6	$	970.8	$	886.5
Interest expense		(18.1)		(17.0)		(54.2)		(51.1)
Other income, net		2.3		4.2		5.0		12.5
Stock-based compensation expense		(12.2)		(11.8)		(35.5)		(32.1)
Acquisition-related expenses		(6.3)		—		(36.6)		(5.7)
Other operating expenses		(11.0)		(11.0)		(32.6)		(33.0)
Income before income taxes	$	310.5	$	282.0	$	816.9	$	777.1