14. Segment Reporting

Operating segments are defined as components of an enterprise that are evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer.

The Company has three reportable segments, Control Devices, Electronics and PST, which also represent its operating segments. The Control Devices reportable segment produces sensors, switches, valves and actuators. The Electronics reportable segment produces electronic instrument clusters, electronic control units, driver information systems and camera-based vision systems, monitors and related products. The PST reportable segment designs and manufactures electronic vehicle security alarms, convenience accessories, vehicle tracking devices and monitoring services and in-vehicle audio and video devices.

The accounting policies of the Company’s reportable segments are the same as those described in Note 2. The Company’s management evaluates the performance of its reportable segments based primarily on revenues from external customers, capital expenditures and operating income. Inter-segment sales are accounted for on terms similar to those to third parties and are eliminated upon consolidation.

The financial information presented below is for our three reportable operating segments and includes adjustments for unallocated corporate costs and intercompany eliminations, where applicable. Such costs and eliminations do not meet the requirements for being classified as an operating segment. Corporate costs include various support functions, such as corporate accounting/finance, executive administration, human resources, information technology and legal.

A summary of financial information by reportable segment is as follows:



Year ended December 31	2018		2017		2016
Net Sales:
Control Devices	$	441,297	$	447,528	$	408,132
Inter-segment sales		8,348		5,044		1,826
Control Devices net sales		449,645		452,572		409,958

Electronics (D)		344,727		282,383		205,256
Inter-segment sales		37,126		39,501		33,361
Electronics net sales		381,853		321,884		238,617

PST		80,175		94,533		82,589
Inter-segment sales		2		563		-
PST net sales		80,177		95,096		82,589

Eliminations		(45,476)		(45,108)		(35,187)
Total net sales	$	866,199	$	824,444	$	695,977
Operating Income (Loss):
Control Devices	$	64,191	$	72,555	$	61,815
Electronics (D)		28,236		18,119		14,798
PST		4,989		2,661		(3,462)
Unallocated Corporate (A)		(30,412)		(35,965)		(29,069)
Total operating income	$	67,004	$	57,370	$	44,082
Depreciation and Amortization:
Control Devices	$	11,914	$	10,887	$	10,276
Electronics (D)		8,982		8,143		3,971
PST		7,443		8,316		8,559
Unallocated Corporate		852		584		452
Total depreciation and amortization (B)	$	29,191	$	27,930	$	23,258
Interest Expense, net:
Control Devices	$	76	$	103	$	226
Electronics		85		119		142
PST		824		1,812		3,396
Unallocated Corporate		3,735		3,749		2,513
Total interest expense, net	$	4,720	$	5,783	$	6,277
Capital Expenditures:
Control Devices	$	16,737	$	17,484	$	13,261
Electronics (D)		5,965		8,158		5,665
PST		3,242		3,831		3,213
Unallocated Corporate(C)		3,083		2,697		2,337
Total capital expenditures	$	29,027	$	32,170	$	24,476


	December 31,		December 31,
	2018		2017
Total Assets:
Control Devices	$	175,708	$	164,632
Electronics (D)		265,838		252,324
PST		81,002		100,382
Corporate (C)		359,837		377,657
Eliminations		(322,866)		(335,958)
Total assets	$	559,519	$	559,037

The following table presents net sales and long-term assets for the geographic areas in which the Company operates:



Year ended December 31	2018		2017		2016
Net Sales:
North America	$	480,511	$	471,770	$	428,046
South America		80,175		94,533		82,589
Europe and Other (D)		305,513		258,141		185,342
Total net sales	$	866,199	$	824,444	$	695,977


	December 31,		December 31,
	2018		2017
Long-term Assets:
North America	$	86,763	$	89,997
South America		45,408		58,989
Europe and Other (D)		107,171		106,682
Total long-term assets	$	239,342	$	255,668

(A)

Unallocated Corporate expenses include, among other items, accounting/finance, human resources, information technology and legal costs as well as share-based compensation.

(B)

These amounts represent depreciation and amortization on property, plant and equipment and certain intangible assets.

(C)

Assets located at Corporate consist primarily of cash, intercompany loan receivables, fixed assets for the headquarter building, information technology assets, equity investments and investments in subsidiaries.

(D)

The amounts for 2018 and 2017 include the Orlaco business which was acquired on January 31, 2017 as disclosed in Note 2.