Information on Business Segments

The Company’s reportable segments offer different products and services. Each segment is managed separately because each business has different core functional and delivery capabilities.

In the first quarter of 2012, the Company realigned its organizational structure by aligning its strategic business units into three reportable segments. All segment information presented below has been adjusted on a retrospective basis for the impact of the segment realignment.

Aerospace produces precision-machined and fabricated components and assemblies for original equipment manufacturer ("OEM") turbine engine, airframe and industrial gas turbine builders throughout the world, and the military. Aerospace also provides jet engine component overhaul and repair services for many of the world's major turbine engine manufacturers, commercial airlines and the military. Activities include the manufacture and delivery of aerospace aftermarket spare parts, including the revenue sharing programs (“RSPs”) under which the Company receives an exclusive right to supply designated aftermarket parts over the life of the related aircraft engine program, and component repairs.

Aerospace's manufacturing business competes with both the leading jet engine OEMs and a large number of machining and fabrication companies. Competition is based mainly on quality, engineering and technical capability, product breadth, timeliness, service and price. Aerospace's machining and fabrication operations, with facilities in Arizona, Connecticut, Michigan, Ohio, Utah and Singapore, produce critical engine and airframe components through technically advanced processes.

The Aerospace aftermarket business competes with aerospace OEMs, service centers of major commercial airlines and other independent service companies for the repair and overhaul of turbine engine components. The manufacturing and supplying of aerospace aftermarket spare parts, including under the RSPs, are dependent upon the reliable and timely delivery of high-quality components. Aerospace's aftermarket facilities, located in Connecticut, Ohio and Singapore, specialize in the repair and refurbishment of highly engineered components and assemblies such as cases, rotating air seals, shrouds and honeycomb air seals.

Industrial is a global supplier of engineered components for critical applications focused on providing solutions for a diverse industrial and transportation customer base. It is equipped to produce virtually every type of precision spring, from fine hairsprings for electronics and instruments to large heavy-duty springs for machinery. It is also a leading manufacturer and supplier of precision mechanical products, including precision mechanical springs, compressor reed valves and nitrogen gas products. Industrial also manufactures high-precision punched and fine-blanked components used in transportation and industrial applications, nitrogen gas springs and manifold systems used to precisely control stamping presses, and retention rings that position parts on a shaft or other axis.

During the third quarter of 2012, the Company completed the acquisition of Synventive, a leading designer and manufacturer of highly engineered and customized hot runner systems and components - the enabling technology for many complex injection molding applications. See Note 3 to the Consolidated Financial Statements. The Synventive business has been integrated into our Industrial segment.

Industrial has a diverse customer base with products purchased by durable goods manufacturers located around the world in industries including transportation, consumer products, farm equipment, telecommunications, medical devices, home appliances and electronics. Long-standing customer relationships enable Industrial to participate in the design phase of components and assemblies through which customers receive the benefits of manufacturing research, testing and evaluation. Products are sold primarily through its direct sales force and a global distribution channel.

Industrial competes with a broad base of large and small companies engaged in the manufacture and sale of custom metal components and assemblies and competes on the basis of quality, service, reliability of supply, engineering and technical capability, product breadth, innovation, design, and price. Industrial has manufacturing, sales, assembly, and distribution operations in the United States, Brazil, Canada, China, Czech Republic, France, Germany, India, Italy, Japan, Mexico, Netherlands, Portugal, Singapore, Slovakia, South Korea, Sweden, Switzerland, Thailand and Turkey.

Distribution provides value-added logistics support services including inventory management, technical sales, and supply chain solutions for maintenance, repair, operating, and production supplies and services. The global operations are engaged in the supplying and servicing of maintenance, repair and operating components and also the engineering and technical sales of custom solutions of springs, gas struts and engineered hardware. Activities include logistics support through vendor-managed inventory and technical sales for stocked replacement parts and other products, catalog offerings and custom solutions. Key business drivers include a value proposition centered on customer service, delivery, multiple sales channels, procurement systems, and strong customer relationships.

Distribution has sales, distribution, and assembly operations in the United States, Brazil, Canada, China, France, Mexico, Singapore, Spain and the United Kingdom. Products and services are available in more than 30 countries. The Distribution segment faces active competition throughout the world. The products and services offered are not unique, and its competitors provide substantially similar products and services. Competition comes from local, regional, and national maintenance and repair supply distributors and specialty manufacturers of springs, gas struts and engineered hardware. Service alternatives, timeliness and reliability of supply, price, technical capability, product breadth, quality and overall customer service are important competitive factors.

The Company evaluates the performance of its reportable segments based on the operating profit of the respective businesses, which includes net sales, cost of sales, selling and administrative expenses and certain components of other expense (income), net, as well as the allocation of corporate overhead expenses.

Sales between the business segments and between the geographic areas in which the businesses operate are accounted for on the same basis as sales to unaffiliated customers. Additionally, revenues are attributed to countries based on the location of manufacturing or distribution facilities.

The following tables (dollars shown in millions) set forth information about the Company’s operations by its reportable business segments and by geographic area.

Operations by Reportable Business Segment



	Aerospace		Industrial		Distribution		Other			Total Company
Revenues
2012	$	390.5	$	497.0	$	350.7	$	(8.3	)	$	1,230.0
2011	382.5		440.5		355.3		(8.9		)	1,169.4
2010	334.2		374.1		329.5		(9.1		)	1,028.6
Operating profit
2012	$	63.3	$	43.9	$	29.4	$	—		$	136.6
2011	62.6		39.1		25.8		—			127.6
2010	52.4		29.4		4.6		—			86.4
Assets
2012	$	533.5	$	876.9	$	272.9	$	185.3		$	1,868.6
2011	545.0		453.3		278.1		164.0			1,440.4
2010	545.2		436.8		341.1		80.2			1,403.3
Depreciation and amortization
2012	$	21.2	$	23.8	$	10.3	$	2.1		$	57.4
2011	24.2		18.8		13.5		2.4			58.9
2010	20.8		16.3		13.6		2.1			52.8
Capital expenditures
2012	$	8.6	$	23.8	$	5.0	$	0.4		$	37.8
2011	13.5		18.6		4.7		0.3			37.1
2010	9.9		11.7		6.9		0.3			28.8

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Notes:

One customer, General Electric, accounted for 17%, 19% and 20% of the Company’s total revenues in 2012, 2011 and 2010, respectively.

“Other” revenues represent the elimination of intersegment sales.

“Other” assets include corporate-controlled assets, the majority of which are cash and deferred tax assets.

A reconciliation of the total reportable segments’ operating profit to income from continuing operations before income taxes follows:



	2012		2011		2010
Operating profit	$	136.6	$	127.6	$	86.4
Interest expense	12.2		10.3		20.0
Other expense (income), net	2.7		0.4		2.6
Income from continuing operations before income taxes	$	121.6	$	116.9	$	63.8

Operations by Geographic Area



	Domestic		International		Other			Total Company
Revenues
2012	$	800.5	$	468.1	$	(38.6	)	$	1,230.0
2011	765.6		442.0		(38.2		)	1,169.4
2010	701.7		368.6		(41.7		)	1,028.6
Long-lived assets
2012	$	372.0	$	848.1	$	—		$	1,220.1
2011	303.7		559.0		—			862.7
2010	290.4		619.9		—			910.3

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Notes:

International sales derived from any one country did not exceed 10% of the Company’s total revenues.

“Other” revenues represent the elimination of intercompany sales between geographic locations, of which approximately 44% were sales from international locations to domestic locations.

Long-lived assets located in any one international country that exceeded 10% of the Company’s total long-lived assets as of December 31, 2012 included $239.1 million of intangible assets related to the RSPs recorded in Singapore at the aftermarket division of the Aerospace segment, $152.1 million and $140.9 million primarily related to goodwill and intangible assets at the Synventive China and Germany divisions of the Industrial segment, respectively, and $151.1 million primarily related to goodwill and property, plant and equipment at the Hänggi division of the Industrial segment located in Switzerland.

In the first quarter of 2013, the Company entered into a definitive agreement to sell its Barnes Distribution North America business (“BDNA”) to MSC Industrial Direct Co., Inc. subject to certain adjustments. BDNA, which currently comprises the majority of the Company's Distribution segment results, reported 2012 sales of approximately $300.0 million. See Note 21 of the Consolidated Financial Statements.

Also in the first quarter of 2013, the Company is realigning its reportable business segments by transferring the Associated Spring Raymond business ("Raymond"), its remaining business within the Distribution segment, to the Industrial segment. Raymond sells, among other products, springs that are manufactured by one of the Industrial businesses. Accordingly, the Company's financial results, beginning in the first quarter of 2013, will be reported in two reportable business segments: Aerospace and Industrial. All previously reported segment information will be adjusted on a retrospective basis to reflect this change beginning in the first quarter of 2013.