Business Segments Information | BUSINESS SEGMENTS INFORMATION The Company designs and manufactures products and delivers services that bring technology and engineering together to provide innovative solutions for customers in a wide range of industrial, commercial and consumer markets around the world. In connection with the strategic portfolio repositioning actions undertaken to transform the Company into a more focused enterprise, its businesses and organization were realigned. In fiscal 2017, the Company began reporting three segments: Automation Solutions , and Climate Technologies and Tools & Home Products which together comprise the Commercial & Residential Solutions business. Prior year information has been reclassified to conform with the current year presentation. The Automation Solutions segment includes the former Process Management segment and the remaining businesses in the former Industrial Automation segment, except for the hermetic motors business, which is now included in the Climate Technologies segment. The new Tools & Home Products segment consists of the businesses previously reported in the Commercial & Residential Solutions segment in fiscal 2016 and 2015. The Automation Solutions segment enables process, hybrid and discrete manufacturers to maximize production, protect personnel and the environment, and optimize their energy efficiency and operating costs through a broad offering of integrated solutions and products, including measurement and analytical instrumentation, industrial valves and equipment, and process control systems. Significant end markets serviced include oil and gas, refining, chemicals and power generation, as well as pharmaceuticals, food and beverage, automotive, pulp and paper, metals and mining, and municipal water supplies. The segment's major product offerings are described below. • Measurement & Analytical Instrumentation products measure the physical properties of liquids or gases in a process stream and communicate this information to a process control system or other software applications, and analyze the chemical composition of process fluids and emissions to enhance quality and efficiency, as well as environmental compliance. • Valves, Actuators & Regulators consists of control, isolation and pressure relief valves which respond to commands from a control system to continuously and precisely modulate the flow of process fluids, smart actuation and control technologies, pressure management products, and industrial and residential regulators that reduce the pressure of fluids moving from high-pressure supply lines into lower pressure systems. • Industrial Solutions provides fluid power and control mechanisms, electrical distribution equipment, and materials joining and precision cleaning products which are used in a variety of manufacturing operations to provide integrated solutions to customers. • Process Control Systems & Solutions provides a digital ecosystem that controls plant processes by communicating with and adjusting the "intelligent" plant devices described above to provide precision measurement, control, monitoring, asset optimization, and plant safety and reliability for plants that produce power, or process fluids or other items. The Commercial & Residential Solutions business consists of the Climate Technologies and Tools & Home Products segments. This business provides products and solutions that promote energy efficiency, enhance household and commercial comfort, and protect food quality and sustainability through heating, air conditioning and refrigeration technology, as well as a broad range of tools and appliance solutions. The Climate Technologies segment provides products, services and solutions for all areas of the climate control industry, including residential heating and cooling, commercial air conditioning, commercial and industrial refrigeration, and cold chain management. Products include compressors, temperature sensors and controls, thermostats, flow controls, and stationary and mobile remote monitoring technologies and services that enable homeowners and businesses to better manage their heating, air conditioning and refrigeration systems for improved control and comfort, and lower energy costs. The Tools & Home Products segment offers tools for professionals and homeowners and appliance solutions. Products include professional pipe-working tools, residential and commercial food waste disposers, and wet-dry vacuums. The principal distribution method for each segment is direct sales forces, although the Company also uses independent sales representatives and distributors. Due to its global presence, certain of the Company's international operations are subject to risks including the stability of governments and business conditions in foreign countries which could result in adverse changes in exchange rates, changes in regulation or disruption of operations. The primary income measure used for assessing segment performance and making operating decisions is earnings before interest and income taxes. Intersegment selling prices approximate market prices. Accounting method differences between segment reporting and the consolidated financial statements are primarily management fees allocated to segments based on a percentage of sales and the accounting for pension and other retirement plans. Corporate and other includes corporate operations, stock compensation expense, acquisition related costs and other items. Corporate assets are primarily comprised of cash and equivalents, investments and certain fixed assets. Summarized below is information about the Company's operations by business segment and by geography. Business Segments Sales Earnings Total Assets 2015 2016 2017 2015 2016 2017 2015 2016 2017 Automation Solutions $ 10,153 8,977 9,418 $ 1,846 1,456 1,522 $ 8,817 8,759 12,581 Climate Technologies 4,006 3,944 4,212 835 902 975 2,455 2,489 2,547 Tools & Home Products 1,625 1,611 1,645 364 384 383 817 809 830 Commercial & Residential Solutions 5,631 5,555 5,857 1,199 1,286 1,358 3,272 3,298 3,377 Divested businesses (a) 477 — — 58 — — — — — Differences in accounting methods 174 189 148 Corporate and other (b) 705 (427 ) (528 ) 9,999 9,675 3,631 Eliminations/Interest (12 ) (10 ) (11 ) (175 ) (188 ) (165 ) Total $ 16,249 14,522 15,264 $ 3,807 2,316 2,335 $ 22,088 21,732 19,589 (a) Divested businesses includes sales and earnings related to the power transmission solutions and commercial storage businesses, which were reported in the former Industrial Automation and Commercial & Residential Solutions segments, respectively. (b) Corporate and other in 2017 includes first year pretax acquisition accounting charges related to inventory and backlog of $93 ( $65 after-tax, $0.10 per share), and in 2015 includes pretax gains on divestitures of $1,039 ( $611 after-tax, $0.90 per share) related to the power transmission solutions and commercial storage businesses. See Note 3. Assets held-for-sale of $6,030 and $6,222 are included in Corporate and other for 2016 and 2015, respectively. See Note 4. Automation Solutions sales by major product offering are summarized below: 2015 2016 2017 Measurement & Analytical Instrumentation $ 3,619 3,137 3,070 Valves, Actuators & Regulators 2,559 2,137 2,668 Industrial Solutions 1,779 1,621 1,680 Process Control Systems & Solutions 2,196 2,082 2,000 Total $ 10,153 8,977 9,418 Depreciation and Amortization Capital 2015 2016 2017 2015 2016 2017 Automation Solutions $ 311 330 400 $ 298 246 234 Climate Technologies 149 150 156 154 133 182 Tools & Home Products 42 44 45 46 44 45 Commercial & Residential Solutions 191 194 201 200 177 227 Corporate and other 71 44 35 90 24 15 Total $ 573 568 636 $ 588 447 476 Geographic Information Sales by Destination Property, Plant and Equipment 2015 2016 2017 2015 2016 2017 United States and Canada $ 8,370 7,505 7,854 $ 1,756 1,780 1,852 Asia 3,363 2,926 3,253 481 459 525 Europe 2,381 2,300 2,434 426 435 626 Latin America 981 834 767 216 203 203 Middle East/Africa 1,154 957 956 50 54 115 Total $ 16,249 14,522 15,264 $ 2,929 2,931 3,321 Sales in the U.S. were $7,273 , $6,940 and $7,608 for 2017, 2016 and 2015, respectively, while Asia includes sales in China of $1,540 , $1,320 and $1,575 in those years. Assets located in the U.S. were $1,840 in 2017, $1,772 in 2016 and $1,746 in 2015. |