Information on Business Segments

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Information on Business Segments

Information on Business Segments

Industrial is a global manufacturer of highly-engineered, high-quality precision components, products and systems for critical applications serving a diverse customer base in end-markets such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices, and energy. Focused on innovative custom solutions, Industrial participates in the design phase of components and assemblies whereby customers receive the benefits of application and systems engineering, new product development, testing and evaluation, and the manufacturing of final products. Products are sold primarily through its direct sales force and global distribution channels. Industrial’s Molding Solutions businesses design and manufacture customized hot runner systems, advanced mold cavity sensors and process control systems, and precision high cavitation mold assemblies - collectively, the enabling technologies for many complex injection molding applications. Industrial’s Engineered Components businesses manufacture and supply precision mechanical products used in transportation and industrial applications, including mechanical springs, high-precision punched and fine-blanked components, and retention rings that position parts on a shaft or other axis. Engineered Components is equipped to produce virtually every type of precision engineered spring, from fine hairsprings for electronics and instruments to large heavy-duty springs for machinery. Industrial’s Nitrogen Gas Products business manufactures nitrogen gas springs and manifold systems used to precisely control stamping presses.

Industrial has a diverse customer base with products purchased by durable goods manufacturers located around the world in industries including transportation, consumer products, packaging, farm and mining equipment, telecommunications, medical devices, home appliances and electronics.

Industrial competes with a broad base of large and small companies engaged in the manufacture and sale of custom metal components, products and assemblies, precision molds, and hot runner systems. Industrial competes on the basis of quality, service, reliability of supply, engineering and technical capability, geographic reach, product breadth, innovation, design, and price. Industrial has manufacturing, distribution and assembly operations in the United States, Brazil, China, Germany, Italy, Mexico, Singapore, Sweden and Switzerland. Industrial also has sales and service operations in the United States, Brazil, Canada, China/Hong Kong, France, Germany, India, Italy, Japan, Mexico, the Netherlands, Portugal, Singapore, Slovakia, South Korea, Spain, Switzerland, Thailand and the United Kingdom.

Aerospace is a global provider of fabricated and precision-machined components and assemblies for original equipment manufacturer (“OEM”) turbine engine, airframe and industrial gas turbine builders, and the military. The Aerospace aftermarket business provides jet engine component maintenance overhaul and repair (“MRO”) services, including our Component Repair Programs (“CRPs”), for many of the world’s major turbine engine manufacturers, commercial airlines and the military. The Aerospace aftermarket activities also 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.

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

The Aerospace aftermarket business supplements jet engine OEMs’ maintenance, repair and overhaul capabilities, and competes with the service centers of major commercial airlines and other independent service companies for the repair and overhaul of turbine engine components. The manufacture and supply of aerospace aftermarket spare parts, including those related to 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 life limited parts, rotating air seals, turbine shrouds, vanes and honeycomb air seals.

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 (income) expense, 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 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

	Industrial		Aerospace		Other		Total Company
Sales
2015	$	782.3	$	411.7	$	—	$	1,194.0
2014	822.1		440.0		—		1,262.0
2013	687.6		404.0		—		1,091.6
Operating profit
2015	$	103.0	$	65.4	$	—	$	168.4
2014	108.4		71.6		—		180.0
2013	71.9		51.3		—		123.2
Assets
2015	$	1,241.2	$	654.1	$	166.5	$	2,061.9
2014	1,282.0		655.0		136.9		2,073.9
2013	1,410.4		567.1		146.2		2,123.7
Depreciation and amortization
2015	$	46.0	$	30.8	$	1.3	$	78.2
2014	54.7		24.9		1.8		81.4
2013	38.4		23.2		3.5		65.1
Capital expenditures
2015	$	28.7	$	17.2	$	0.1	$	46.0
2014	36.1		20.9		0.4		57.4
2013	31.3		23.8		2.2		57.3

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Notes:

One customer, General Electric, accounted for 18%, 19% and 21% of the Company’s total revenues in 2015, 2014 and 2013, respectively.

“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:

	2015			2014		2013
Operating profit	$	168.4		$	180.0	$	123.2
Interest expense	10.7			11.4		13.1
Other (income) expense, net	(0.2		)	2.1		2.5
Income from continuing operations before income taxes	$	157.9		$	166.5	$	107.6

Operations by Geographic Area

	Domestic		International		Other			Total Company
Sales
2015	$	589.6	$	661.7	$	(57.3	)	$	1,194.0
2014	618.9		677.6		(34.5		)	1,262.0
2013	593.3		524.1		(25.9		)	1,091.6
Long-lived assets
2015	$	379.2	$	1,069.9	$	—		$	1,449.1
2014	380.6		1,094.9		—			1,475.4
2013	330.2		1,214.0		—			1,544.2

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Notes:

Germany, with sales of $210.5 million, $249.9 million and $140.8 million in 2015, 2014 and 2013, respectively, represents the only international country with revenues in excess of 10% of the Company's total revenues.

“Other” revenues represent the elimination of intercompany sales between geographic locations, of which approximately 82% were sales from international locations to domestic locations.

Germany, with long-lived assets of $362.7 million, $410.0 million and $477.3 million in 2015, 2014 and 2013, respectively, Singapore, with long-lived assets of $246.4 million, $255.3 million and $255.3 million in 2015, 2014 and 2013, respectively, Switzerland, with long-lived assets of $167.0 million, $165.7 million and $193.8 million in 2015, 2014 and 2013, respectively and China with long-lived assets of $151.7 million and $156.4 million in 2014 and 2013, respectively, represent the only international countries that exceeded 10% of the Company's total long-lived assets in those years.