Segment Information

12 Months Ended

Dec. 31, 2019

SEGMENT INFORMATION

The Company has two reportable segments. Business units are organized under each reportable segment because they share certain characteristics, such as technology, marketing, distribution and product application, which create long-term synergies. The principal activities of the Company’s reportable segments are as follows:

Environmental Solutions — Our Environmental Solutions Group is a leading manufacturer and supplier of a full range of street sweepers, sewer cleaners, industrial vacuum loaders, safe-digging trucks, high-performance waterblasting equipment, dump truck bodies and trailers. The Group manufactures vehicles and equipment in the U.S. and Canada that are sold under the Elgin^®, Vactor^®, Guzzler^®, TRUVAC^TM, Westech^TM, Jetstream^®, Ox Bodies^®, Crysteel^®, J-Craft^®, Duraclass^®, Rugby^® and Travis^®brand names. Product offerings also include certain products manufactured by other companies, such as refuse and recycling collection vehicles, camera systems, ice resurfacing equipment and snow-removal equipment. Products are sold to both municipal and industrial customers either through a dealer network or direct sales to service customers generally depending on the type and geographic location of the customer. In addition to vehicle and equipment sales, the Group also engages in the sale of parts, service and repair, equipment rentals and training as part of a complete aftermarket offering to its current and potential customers through its service centers located across North America. Our Environmental Solutions Group includes the aggregated results of two operating segments, including TBEI.

In addition, as discussed in Note 2 – Acquisitions, on July 1, 2019, the Company completed the acquisition of substantially all of the assets and operations of MRL. The Company expects that MRL will provide an efficient entry into a new line of product offerings and access to new markets, and enable it to strengthen the Environmental Solutions Group’s market position as a specialty vehicle manufacturer in maintenance and infrastructure end-markets, leveraging its expertise in building chassis-based vehicles.

The assets and liabilities of MRL have been consolidated into the Consolidated Balance Sheet as of December 31, 2019, while the post-acquisition results of operations have been included in the Consolidated Statements of Operations, within the Environmental Solutions Group, subsequent to the July 1, 2019 closing date.

Safety and Security Systems — Our Safety and Security Systems Group is a leading manufacturer and supplier of comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities and industrial sites use to protect people and property. Offerings include systems for community alerting, emergency vehicles, first responder interoperable communications and industrial communications. Specific products include public safety equipment, such as vehicle lightbars and sirens, industrial signaling equipment, public warning systems and general alarm/public address systems. Products are sold under the Federal Signal^TM, Federal Signal VAMA^® and Victor^® brand names. The Group operates manufacturing facilities in the U.S., Europe and South Africa.

Corporate contains those items that are not included in our reportable segments.

Net sales by reportable segment reflect sales of products and services to external customers, as reported in the Company’s Consolidated Statements of Operations. Intersegment sales are insignificant. The Company evaluates performance based on operating income of the respective segment. Operating income includes all revenues, costs and expenses directly related to the segment involved. In determining reportable segment income, neither corporate nor interest expenses are included. Reportable segment depreciation and amortization expense, identifiable assets and capital expenditures relate to those assets that are utilized by the respective reportable segment. Corporate assets consist principally of cash and cash equivalents, deferred tax assets and fixed assets. The accounting policies of each reportable segment are the same as those described in Note 1 – Summary of Significant Accounting Policies.

Revenues attributed to customers located outside of the U.S. aggregated to $268.5 million in 2019, $241.5 million in 2018 and $224.4 million in 2017, of which sales exported from the U.S. aggregated to $72.8 million, $64.5 million and $58.0 million, respectively.

The following tables summarize the Company’s continuing operations by segment, including net sales, operating income, depreciation and amortization, total assets and capital expenditures:



(in millions)	2019			2018			2017
Net sales:
Environmental Solutions	$	992.9		$	863.5		$	692.6
Safety and Security Systems	228.4			226.0			205.9
Total net sales	$	1,221.3		$	1,089.5		$	898.5
Operating income:
Environmental Solutions	$	139.4		$	113.0		$	72.4
Safety and Security Systems	38.6			34.1			27.0
Corporate and eliminations	(30.9		)	(25.6		)	(25.8		)
Total operating income	147.1			121.5			73.6
Interest expense	7.9			9.3			7.3
Pension settlement charges	—			—			6.1
Other expense (income), net	0.6			0.6			(0.8		)
Income before income taxes	$	138.6		$	111.6		$	61.0



(in millions)	2019		2018		2017
Depreciation and amortization:
Environmental Solutions	$	38.1	$	32.6	$	25.7
Safety and Security Systems	3.3		3.7		4.1
Corporate	0.1		0.1		0.2
Total depreciation and amortization	$	41.5	$	36.4	$	30.0



(in millions)	2019		2018		2017
Total assets:
Environmental Solutions	$	908.1	$	775.2	$	746.4
Safety and Security Systems	222.6		211.5		211.8
Corporate and eliminations	34.5		36.7		33.6
Total assets of continuing operations	1,165.2		1,023.4		991.8
Total assets of discontinued operations	0.3		0.4		0.5
Total assets	$	1,165.5	$	1,023.8	$	992.3



(in millions)	2019		2018		2017
Capital expenditures:
Environmental Solutions	$	31.6	$	11.1	$	5.2
Safety and Security Systems	2.7		2.0		2.2
Corporate	1.1		1.0		0.6
Total capital expenditures	$	35.4	$	14.1	$	8.0

The following table summarizes net sales by geographic region based on the location of the end-customer:



(in millions)	2019		2018		2017
Net sales:
U.S.	$	952.8	$	848.0	$	674.1
Canada	169.0		150.9		142.6
Europe/Other	99.5		90.6		81.8
Total net sales	$	1,221.3	$	1,089.5	$	898.5

The following table summarizes long-lived assets by geographic region based on the location of the Company’s subsidiaries:



(in millions)	2019		2018		2017
Long-lived assets:
U.S.	$	168.3	$	110.3	$	97.0
Canada	62.7		50.4		52.3
Europe	3.6		3.2		3.1
Other	0.3		0.3		0.3
Total long-lived assets^(a)	$	234.9	$	164.2	$	152.7