Operating Segments

9 Months Ended

Jul. 31, 2019

12.	Operating segments

We conduct business across three primary business segments: Adhesive Dispensing Systems, Advanced Technology Systems, and Industrial Coating Systems. The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker. The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses. Items below the operating profit line of the Consolidated Statements of Income (interest and investment income, interest expense and other income/expense) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment. The accounting policies of the segments are the same as those described in Note 1, Significant Accounting Policies, of our annual report on Form 10-K for the year ended October 31, 2018.

The following table presents information about our segments:

	Adhesive Dispensing Systems		Advanced Technology Systems		Industrial Coating Systems		Corporate			Total
Three months ended
July 31, 2019
Net external sales	$	248,983	$	253,098	$	57,665	$	—		$	559,746
Operating profit (loss)		77,689		53,562		11,122		(12,097	)		130,276
Three months ended
July 31, 2018
Net external sales	$	244,728	$	266,595	$	69,920	$	—		$	581,243
Operating profit (loss)⁽¹⁾		69,268		67,466		15,633		(14,825	)		137,542
Nine months ended
July 31, 2019
Net external sales	$	697,223	$	736,850	$	174,702	$	—		$	1,608,775
Operating profit (loss)		196,594		150,882		33,108		(37,131	)		343,453
Nine months ended
July 31, 2018
Net external sales	$	704,367	$	789,135	$	191,871	$	—		$	1,685,373
Operating profit (loss)⁽¹⁾		193,595		193,649		38,228		(39,688	)		385,784

⁽¹⁾

^{Results for the three and nine months ended July 31, 2018 have been revised to reflect the retrospective adoption of Accounting Standards Update No. 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Cost ("ASU 2017-07"). Refer to Note 3 for details.}

A reconciliation of total segment operating income to total consolidated income before income taxes is as follows:

	Three Months Ended						Nine Months Ended
	July 31, 2019			July 31, 2018			July 31, 2019			July 31, 2018
Total profit for reportable segments	$	130,276		$	137,542		$	343,453		$	385,784
Interest expense		(11,500	)		(13,765	)		(36,238	)		(37,210	)
Interest and investment income		511			356			1,153			865
Other-net		210			(1,438	)		(4,546	)		(5,107	)
Income before income taxes	$	119,497		$	122,695		$	303,822		$	344,332

We have significant sales in the following geographic regions:

	Three Months Ended				Nine Months Ended
	July 31, 2019		July 31, 2018		July 31, 2019		July 31, 2018
United States	$	190,460	$	191,512	$	551,510	$	536,164
Americas		47,040		38,911		123,159		112,149
Europe		143,449		150,710		425,650		447,384
Japan		30,488		28,367		89,566		127,266
Asia Pacific		148,309		171,743		418,890		462,410
Total net external sales	$	559,746	$	581,243	$	1,608,775	$	1,685,373