INFORMATION ON REPORTABLE SEGMENTS

We are a global supplier of highly specialized, engineered solutions with operations in 14 countries and sales in over 100 countries around the world.

We have aggregated our operating segments into the following three reportable segments: HVAC, Detection and Measurement, and Engineered Solutions. 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, distribution methods, and regulatory environment. In determining our segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification. Operating income or loss for each of our segments is determined before considering impairment and special charges, long-term incentive compensation and other indirect corporate expenses. This is consistent with the way our chief operating decision maker evaluates the results of each segment.

HVAC Reportable Segment

Our HVAC reportable segment engineers, designs, manufactures, installs and services cooling products for the HVAC and industrial markets, as well as boilers and comfort heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment serves a customer base in North America, Europe, and Asia Pacific.

Detection and Measurement Reportable Segment

Our Detection and Measurement reportable segment engineers, designs, manufactures and installs underground pipe and cable locators, inspection and rehabilitation equipment, bus fare collection systems, signal monitoring equipment, and obstruction lighting. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base, with a strong presence in North America, Europe, and Asia Pacific.

Engineered Solutions Reportable Segment

Our Engineered Solutions reportable segment engineers, designs, manufactures, installs and services transformers for the power transmission and distribution market and process cooling equipment and heat exchangers for the industrial and power generation markets. The primary distribution channels for the segment’s products are direct to customers and third-party representatives. The segment has a strong presence in North America and South Africa.

Corporate Expense

Corporate expense generally relates to the cost of our Charlotte, North Carolina corporate headquarters.

Financial data for our reportable segments for the three and nine months ended September 29, 2018 and September 30, 2017 are presented below:



	Three months ended						Nine months ended
	September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Revenues:
HVAC segment	$	132.0		$	119.4		$	399.4		$	349.8
Detection and Measurement segment	84.3			66.9			224.5			185.0
Engineered Solutions segment ⁽¹⁾	146.2			162.2			469.7			504.0
Consolidated revenues	$	362.5		$	348.5		$	1,093.6		$	1,038.8

Income (loss):
HVAC segment	$	15.6		$	15.6		$	52.7		$	47.5
Detection and Measurement segment	15.5			16.5			47.7			45.0
Engineered Solutions segment ⁽¹⁾⁽²⁾	(1.5		)	13.3			7.2			7.9
Total income for segments	29.6			45.4			107.6			100.4

Corporate expense	(10.5		)	(11.0		)	(34.8		)	(33.7		)
Long-term incentive compensation expense	(4.3		)	(3.6		)	(12.4		)	(10.4		)
Pension and postretirement income	—			(0.1		)	—			(0.3		)
Special charges, net	(1.0		)	(1.0		)	(4.6		)	(2.0		)
Loss on sale of dry cooling business	(0.4		)	—			(0.4		)	—
Consolidated operating income	$	13.4		$	29.7		$	55.4		$	54.0

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⁽¹⁾ As further discussed in Note 14, during the third quarter of 2018 and second quarter of 2017, we made revisions to our expected revenues and profits on our large power projects in South Africa. As a result of these revisions, we reduced revenue and segment income by $2.7 and $4.7, respectively, for the three and nine months ended September 29, 2018 and $13.5 and $22.9, respectively, for the nine months ended September 30, 2017.

⁽²⁾ During the third quarter of 2017, we settled a contract that had been suspended and then ultimately canceled by a customer for cash proceeds of $9.0 and other consideration. In connection with the settlement, we recorded a gain of $10.2 during the quarter within our Engineered Solutions reportable segment.