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Business Segments
 9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Business Segments Business Segments
The Company operates in two business segments: High Performance Materials & Components and Flat Rolled Products. The measure of segment operating profit, which is used to analyze the performance and results of the business segments, excludes all effects of LIFO inventory accounting and any related changes in net realizable value inventory reserves which offset the Company’s aggregate net debit LIFO valuation balance, income taxes, corporate expenses, net interest expense, closed operations and other expenses, restructuring and asset impairment charges, and non-operating gains and losses. Management believes segment operating profit, as defined, provides an appropriate measure of controllable operating results at the business segment level. Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Total sales:
 
 
 
 
 
 
 
High Performance Materials & Components
$
577.3

 
$
615.2

 
$
1,875.0

 
$
1,806.3

Flat Rolled Products
492.1

 
452.5

 
1,381.1

 
1,330.9

 
1,069.4

 
1,067.7

 
3,256.1

 
3,137.2

Intersegment sales:
 
 
 
 
 
 
 
High Performance Materials & Components
25.6

 
29.7

 
79.7

 
68.2

Flat Rolled Products
25.1

 
17.8

 
72.5

 
60.3

 
50.7

 
47.5

 
152.2

 
128.5

Sales to external customers:
 
 
 
 
 
 
 
High Performance Materials & Components
551.7

 
585.5

 
1,795.3

 
1,738.1

Flat Rolled Products
467.0

 
434.7

 
1,308.6

 
1,270.6

 
$
1,018.7

 
$
1,020.2

 
$
3,103.9

 
$
3,008.7



 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Operating profit:
 
 
 
 
 
 
 
High Performance Materials & Components
$
78.8

 
$
76.0

 
$
250.3

 
$
259.4

Flat Rolled Products
20.4

 
29.5

 
25.1

 
66.5

Total operating profit
99.2

 
105.5

 
275.4

 
325.9

LIFO and net realizable value reserves
—

 
—

 
(0.1
)
 
—

Corporate expenses
(16.0
)
 
(14.8
)
 
(50.6
)
 
(40.9
)
Closed operations and other expenses
(8.2
)
 
(3.4
)
 
(19.2
)
 
(16.6
)
Gain on joint venture deconsolidation (See Note 6)
—

 
—

 
—

 
15.9

Gain on asset sales, net
68.2

 
—

 
89.8

 
—

Interest expense, net
(24.2
)
 
(24.8
)
 
(74.9
)
 
(75.8
)
Income before income taxes
$
119.0

 
$
62.5

 
$
220.4

 
$
208.5


The $68.2 million net gain on asset sales for the third quarter ended September 30, 2019 consists of a $62.4 million gain on the sale of certain oil and gas rights in Eddy County, NM (see Note 7) and a $6.2 million gain on the sale of the Company’s Cast Products business, partially offset by a $0.4 million loss on the sale of two non-core forging facilities, located in Portland, IN and Lebanon, KY. The $89.8 million net gain on asset sales for the nine months ended September 30, 2019 consists of a $91.7 million gain on the sale (in two separate transactions) of oil and gas rights in Eddy County, NM (see Note 7) and a $6.2 million gain on the sale of the Company’s Cast Products business, partially offset by an $8.1 million loss on the sale of two non-core forging facilities, located in Portland, IN and Lebanon, KY. See Note 5 for further explanation regarding the sale of business transactions.
Corporate expenses were higher in the third quarter and nine months of 2019 compared to 2018, primarily due to higher incentive compensation expenses. Closed operations and other expenses include higher retirement benefit expense in 2019 and a benefit for property tax adjustments in the prior year for the closed Rowley facility.