Segment Information

3 Months Ended

Mar. 31, 2018

Our business has three reportable segments: Water Infrastructure, Applied Water and Measurement & Control Solutions. When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics. The Water Infrastructure segment focuses on the transportation and treatment of water, offering a range of products including water and wastewater pumps, treatment equipment, and controls and systems. The Applied Water segment serves many of the primary uses of water and focuses on the residential, commercial and industrial markets. The Applied Water segment's major products include pumps, valves, heat exchangers, controls and dispensing equipment. The Measurement & Control Solutions segment focuses on developing advanced technology solutions that enable intelligent use and conservation of critical water and energy resources as well as analytical instrumentation used in the testing of water. The Measurement & Control Solutions segment's major products include smart metering, networked communications, measurement and control technologies, critical infrastructure technologies, software and services including cloud-based analytics, remote monitoring and data management, leak detection and pressure monitoring solutions and testing equipment.

Additionally, we have Regional selling locations, which consist primarily of selling and marketing organizations and related support services, that offer products and services across our reportable segments. Corporate and other consists of corporate office expenses including compensation, benefits, occupancy, depreciation, and other administrative costs, as well as charges related to certain matters, such as environmental matters that are managed at a corporate level and are not included in the business segments in evaluating performance or allocating resources.

The accounting policies of each segment are the same as those described in the summary of significant accounting policies (see Note 1 in the 2017 Annual Report). The following tables contain financial information for each reportable segment:



	Three Months Ended
	March 31,
(in millions)	2018			2017
Revenue:
Water Infrastructure	$	480		$	419
Applied Water	366			333
Measurement & Control Solutions	371			319
Total	$	1,217		$	1,071
Operating Income:
Water Infrastructure	$	49		$	41
Applied Water	50			36
Measurement & Control Solutions	33			25
Corporate and other	(19		)	(16		)
Total operating income	$	113		$	86
Interest expense	$	21		20
Other non-operating expense, net	3			(1		)
Gain from sale of business	—			5
Income before taxes	$	95		$	70
Depreciation and Amortization:
Water Infrastructure	$	17		$	16
Applied Water	5			6
Measurement & Control Solutions	37			31
Regional selling locations (a)	5			4
Corporate and other	3			2
Total	$	67		$	59
Capital Expenditures:
Water Infrastructure	$	23		$	14
Applied Water	9			7
Measurement & Control Solutions	24			15
Regional selling locations (b)	5			4
Corporate and other	—			3
Total	$	61		$	43


(a)	Depreciation and amortization expense incurred by the Regional selling locations was included in an overall allocation of Regional selling location costs to the segments; however, a certain portion of that expense was not specifically identified to a segment. That expense is captured in this Regional selling location line.


(b)	Represents capital expenditures incurred by the Regional selling locations not allocated to the segments.

The following table contains the total assets for each reportable segment:



(in millions)	March 31, 2018		December 31, 2017
Water Infrastructure	$	1,252	$	1,232
Applied Water	1,042		1,002
Measurement & Control Solutions	3,752		3,198
Regional selling locations (a)	1,115		1,119
Corporate and other (b)	189		309
Total	$	7,350	$	6,860


(a)	The Regional selling locations have assets that consist primarily of cash, accounts receivable and inventory which are not allocated to the segments.

(b)

Corporate and other consists of items pertaining to our corporate headquarters function, which principally consist of cash, deferred tax assets, pension assets and certain property, plant and equipment.