Note 11—Reportable Business Segments and International Operations

The Company has two reportable business segments: (i) Interconnect Products and Assemblies and (ii) Cable Products and Solutions. The Company organizes its reportable business segments based upon similar economic characteristics and business groupings of products, services, and customers. These reportable business segments are determined based upon how the Company reviews its businesses, assesses operating performance and makes investing and resource allocation decisions. The Interconnect Products 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 herein. 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.


	Interconnect Products						Cable Products						Total Reportable
	and Assemblies						and Solutions						Business Segments
	2018		2017		2016		2018		2017		2016		2018		2017		2016
Net sales:
External	$	7,781.9	$	6,606.9	$	5,922.3	$	420.1	$	404.4	$	364.1	$	8,202.0	$	7,011.3	$	6,286.4
Intersegment		12.8		9.7		6.9		34.0		40.7		30.0		46.8		50.4		36.9
Depreciation and amortization		287.2		214.7		206.8		6.6		6.3		4.9		293.8		221.0		211.7
Segment operating income		1,752.5		1,475.2		1,280.3		52.6		54.2		52.8		1,805.1		1,529.4		1,333.1
Segment assets (excluding goodwill)		5,678.6		5,732.6		4,587.5		208.1		200.3		197.1		5,886.7		5,932.9		4,784.6
Capital expenditures		305.0		220.4		186.2		5.2		5.6		4.0		310.2		226.0		190.2

Reconciliation of segment operating income to consolidated income before income taxes:


	2018		2017		2016
Segment operating income	$	1,805.1	$	1,529.4	$	1,333.1
Interest expense		(101.7)		(92.3)		(72.6)
Other income, net		3.2		17.1		8.5
Stock-based compensation expense		(55.6)		(49.7)		(47.6)
Acquisition-related expenses		(8.5)		(4.0)		(36.6)
Other operating expenses		(54.1)		(48.1)		(43.7)
Income before income taxes	$	1,588.4	$	1,352.4	$	1,141.1

Reconciliation of segment assets to consolidated total assets:


	2018		2017
Segment assets, excluding goodwill	$	5,886.7	$	5,932.9
Goodwill		4,103.2		4,042.6
Other assets		55.0		28.4
Consolidated total assets	$	10,044.9	$	10,003.9

Net sales by geographic area for the years ended December 31, 2018, 2017 and 2016 and property, plant and equipment, net by geographic area as of December 31 were as follows:


	2018		2017		2016
Net sales
United States	$	2,241.4	$	1,978.4	$	1,740.7
China		2,594.0		2,067.3		1,865.6
Other foreign locations		3,366.6		2,965.6		2,680.1
Total	$	8,202.0	$	7,011.3	$	6,286.4

Property, plant and equipment, net
United States	$	225.1	$	212.7	$	209.2
China		273.8		244.7		200.1
Other foreign locations		376.9		359.4		302.1
Total	$	875.8	$	816.8	$	711.4

Disaggregation of Net Sales

The following table shows our net sales disaggregated into categories the Company considers meaningful to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors for the year ended December 31, 2018:


	Year ended December 31, 2018
	Interconnect		Cable
	Products and		Products and		Total Reportable
	Assemblies		Solutions		Business Segments
Net sales by:
Sales channel:
End customers and contract manufacturers	$	6,667.9	$	322.3	$	6,990.2
Distributors and resellers		1,114.0		97.8		1,211.8
	$	7,781.9	$	420.1	$	8,202.0

Geography:
United States	$	2,038.0	$	203.4	$	2,241.4
China		2,589.9		4.1		2,594.0
Other foreign locations		3,154.0		212.6		3,366.6
	$	7,781.9	$	420.1	$	8,202.0

Net sales by geographic area are based on the customer location to which the product is shipped. During the year ended December 31, 2018, aggregate sales to the Company’s largest customer, including sales of products to EMS companies that the Company believes are manufacturing products on their behalf, represented approximately 12% of the Company’s net sales. No single customer represented 10% or more of the Company’s net sales for the years ended December 31, 2017 and 2016. It is impracticable to disclose net sales by product or group of products.

For further discussion related to the Company’s policies surrounding revenue recognition, refer to Note 1 herein.