BUSINESS SEGMENT INFORMATION

9 Months Ended

Oct. 01, 2011

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

(4) BUSINESS SEGMENT INFORMATION

We are a global provider of flow technology, test and measurement products and services, thermal equipment and services, and industrial products and services with operations in over 35 countries. We offer a diverse collection of products, such as valves, fluid handling equipment, metering and mixing solutions, specialty service tools, diagnostic systems, service equipment and technical information services, cooling, heating and ventilation products, power transformers, and TV and radio broadcast antennas. Our products are used by a broad array of customers in various industries, including food and beverage processing, power generation, chemical processing, pharmaceuticals, infrastructure, mineral processing, petrochemical, automotive service, telecommunications and transportation.

We aggregate our operating segments into four reportable segments: Flow Technology, Test and Measurement, Thermal Equipment and Services and Industrial Products and Services. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers and distribution methods. In determining our segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification to operating income or loss of each segment before considering impairment and special charges, pensions and postretirement expense, stock-based compensation and other indirect corporate expenses (“Segment income”). This is consistent with the way our chief operating decision maker evaluates the results of each segment.

Flow Technology

Our Flow Technology segment designs, manufactures and markets products and solutions that are used to process, blend, filter, dry, meter and transport fluids with a focus on creating innovative new products and systems and also provides comprehensive aftermarket support services. Primary offerings include engineered pumps, mixers, process systems, heat exchangers, valves, and dehydration and drying technologies. The segment continues to focus on optimizing its global footprint while taking advantage of cross-product integration opportunities and increasing its competitive position in global end markets. Flow Technology’s solutions focus on key business drivers, such as product flexibility, process optimization, sustainability and safety.

Test and Measurement

Our Test and Measurement segment engineers and manufactures branded, technologically advanced test and measurement products used on a global basis across the transportation, telecommunications and utility industries. Our technology supports the introduction of new systems, expanded services and sophisticated testing and validation. Primary offerings include specialty automotive diagnostic service tools, fare-collection systems and portable cable and pipe locators. The segment continues to focus on global expansion, with a specific focus on China and India.

Thermal Equipment and Services

Our Thermal Equipment and Services segment engineers, manufactures and services cooling, heating and ventilation products for markets throughout the world. Primary offerings include dry, wet and hybrid cooling systems for the power generation, refrigeration, HVAC and industrial markets, as well as boilers, heating and ventilation products for the commercial and residential markets. This segment also provides thermal components for power generation plants and engineered services to maintain, refurbish, upgrade and modernize power stations. The segment continues to focus on expanding its global reach, including increasing its dry cooling, heating and ventilation presence in Asia, as well as its thermal components and service offerings. The segment’s South African subsidiary has a Black Economic Empowerment noncontrolling interest shareholder, which holds a 25.1% interest.

Industrial Products and Services

Our Industrial Products and Services segment comprises businesses that design, manufacture and market power systems, industrial tools and hydraulic units, precision machine components for the aerospace industry, crystal growing machines for the solar power generation market, television, radio and cell phone and data transmission broadcast antenna systems, communications and signal monitoring systems, and precision controlled industrial ovens and chambers. This segment continues to focus on global expansion opportunities.

Corporate Expense

Corporate expense generally relates to the cost of our Charlotte, NC corporate headquarters and our Asia Pacific center in Shanghai, China.

Financial data for our business segments, including the results of businesses acquired from the respective dates of acquisition, were as follows:

	Three months ended						Nine months ended
	October 1,			October 2,			October 1,			October 2,
	2011			2010			2011			2010
Revenues (1):
Flow Technology	$	527.9		$	438.6		$	1,476.6		$	1,176.0
Test and Measurement	255.6			227.6			792.6			671.9
Thermal Equipment and Services	433.9			438.7			1,191.1			1,183.3
Industrial Products and Services	169.8			183.5			509.9			530.6
Total revenues	$	1,387.2		$	1,288.4		$	3,970.2		$	3,561.8
Segment income:
Flow Technology	$	70.1		$	58.2		$	183.1		$	144.7
Test and Measurement	29.4			17.8			78.0			54.9
Thermal Equipment and Services	40.8			60.1			97.9			140.9
Industrial Products and Services	16.1			21.6			44.2			59.4
Total segment income	156.4			157.7			403.2			399.9
Corporate expense	(25.1		)	(21.5		)	(79.9		)	(66.7		)
Pension and postretirement expense	(8.7		)	(13.4		)	(27.0		)	(39.5		)
Stock-based compensation expense	(7.8		)	(5.3		)	(34.5		)	(25.4		)
Impairment of goodwill and other intangible assets	—			—			(24.7		)	—
Special charges, net	(7.7		)	(8.9		)	(19.7		)	(20.1		)
Consolidated operating income	$	107.1		$	108.6		$	217.4		$	248.2

(1) Under the percentage of completion method, we recognized revenues of $375.9 and $362.7 in the three months ended October 1, 2011 and October 2, 2010, respectively. For the nine months ended October 1, 2011 and October 2, 2010, revenues under the percentage of completion method were $1,074.8 and $978.5, respectively. Costs and estimated earnings in excess of billings on contracts accounted for under the percentage of completion method were $277.0 and $228.1 as of October 1, 2011 and December 31, 2010, respectively. The October 1, 2011 balance includes $275.2 reported as a component of “Accounts receivable, net” and $1.8 as a component of “Other assets” in the condensed consolidated balance sheet. The December 31, 2010 balance includes $226.3 reported as a component of “Accounts receivable, net” and $1.8 as a component of “Other assets” in the condensed consolidated balance sheet. Billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage of completion method were $236.7 and $373.9 as of October 1, 2011 and December 31, 2010, respectively. The October 1, 2011 balance was reported as a component of “Accrued expenses”. The December 31, 2010 balance includes $364.5 reported as a component of “Accrued expenses” and $9.4 as a component of “Other long-term liabilities” in the condensed consolidated balance sheet.