Reportable Business Segments (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting, Measurement Disclosures [Abstract]

Net sales, segment profit (loss) by business segment and reconciliation of segment profit (loss) to Income from Continuing Operations before Income Taxes

While restructuring charges are excluded from our calculation of segment profit (loss), the table below presents the restructuring charges associated with each segment (in millions):



	Incurred in 2017		Incurred to Date		Total Expected to be Incurred
Residential Heating & Cooling	$	0.5	$	1.4	$	1.4
Commercial Heating & Cooling	0.9		2.0		2.1
Refrigeration	1.2		13.1		13.1
Corporate & Other	0.6		2.3		2.8
Total	$	3.2	$	18.8	$	19.4

We operate in three reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:



Segment	Products or Services	Markets Served	Geographic Areas
Residential Heating & Cooling	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and supplies	Residential Replacement; Residential New Construction	United States Canada
Commercial Heating & Cooling	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial products	Light Commercial	United States Canada Europe
Refrigeration	Condensing units, unit coolers, fluid coolers, air- cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems	Light Commercial; Food Preservation; Non-Food/Industrial	United States Canada Europe Asia Pacific South America

Net sales and segment profit (loss) with reconciliation of segment profit (loss)

Net sales and segment profit (loss) by segment, along with a reconciliation of segment profit (loss) to Operating income, are shown below (in millions):



	For the Years Ended December 31,
	2017			2016			2015
Net Sales ⁽¹⁾
Residential Heating & Cooling	$	2,140.4		$	2,000.8		$	1,866.9
Commercial Heating & Cooling	973.8			917.9			887.2
Refrigeration	725.4			722.9			713.3
	$	3,839.6		$	3,641.6		$	3,467.4
Segment Profit (Loss) ⁽²⁾
Residential Heating & Cooling	$	373.9		$	348.8		$	278.4
Commercial Heating & Cooling	157.3			149.3			130.4
Refrigeration	72.6			68.9			52.9
Corporate and other	(89.2		)	(97.4		)	(84.1		)
Subtotal segment profit	514.6			469.6			377.6
Reconciliation to Operating income:
Special product quality adjustments	5.4			(0.4		)	(2.2		)
Items in (Gains) Losses and other expenses, net that are excluded from segment profit (loss) ⁽²⁾	11.5			7.4			15.6
Restructuring charges	3.2			1.8			3.2
Pension settlement	—			31.4			—
Goodwill impairment	—			—			5.5
Asset impairment	—			—			44.5
One time inventory write down	—			—			5.6
Operating income	$	494.5		$	429.4		$	305.4

⁽¹⁾ On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

⁽²⁾The Company defines segment profit (loss) as a segment's operating income included in the accompanying Consolidated Statements of Operations, excluding:


•	Special product quality adjustments;


•	The following items in (Gains) Losses and other expenses, net:


◦	Net change in unrealized gains and/or losses on unsettled futures contracts,


◦	Special legal contingency charges,


◦	Asbestos-related litigation,


◦	Environmental liabilities,


◦	Contractor tax payments,


◦	Acquisition/disposition costs, and


◦	Other items, net;


•	Restructuring charges;


•	Pension settlement;


•	Goodwill and asset impairments; and


•	One time inventory write down.

Total assets by business segment

Total assets by segment are shown below (in millions):



	As of December 31,
	2017		2016		2015
Total Assets:
Residential Heating & Cooling	$	771.3	$	673.4	$	628.3
Commercial Heating & Cooling	443.9		385.8		363.6
Refrigeration	506.9		442.8		444.9
Corporate and other	169.4		258.3		240.6
Total assets	$	1,891.5	$	1,760.3	$	1,677.4

Summary of capital expenditures, depreciation and amortization, and income from equity method investments expense by business segment

Total capital expenditures by segment are shown below (in millions):



	For the Years Ended December 31,
	2017		2016		2015
Capital Expenditures:
Residential Heating & Cooling	$	38.9	$	36.7	$	28.1
Commercial Heating & Cooling	18.5		11.5		8.6
Refrigeration	8.0		12.1		11.4
Corporate and other	32.9		24.0		21.8
Total capital expenditures ⁽¹⁾	$	98.3	$	84.3	$	69.9

⁽¹⁾Includes amounts recorded under capital leases. There were no significant new capital leases in 2017, 2016 or 2015.

Depreciation and amortization expenses by segment are shown below (in millions):



	For the Years Ended December 31,
	2017		2016		2015
Depreciation and Amortization:
Residential Heating & Cooling	$	24.9	$	21.0	$	20.7
Commercial Heating & Cooling	10.1		9.8		9.7
Refrigeration	9.9		9.7		15.5
Corporate and other	19.7		17.6		16.9
Total depreciation and amortization	$	64.6	$	58.1	$	62.8

The equity method investments are shown below (in millions):



	For the Years Ended December 31,
	2017		2016		2015
Income from Equity Method Investments:
Refrigeration	$	3.9	$	4.0	$	2.8
Residential	11.7		11.5		8.0
Commercial	2.8		2.9		2.6
Total income from equity method investments	$	18.4	$	18.4	$	13.4

Summary of financial information relating to geographic area based operations

Net sales for each major geographic area in which we operate are shown below (in millions):



	For the Years Ended December 31,
	2017		2016		2015
Net Sales to External Customers by Point of Shipment:
United States	$	3,128.7	$	2,966.8	$	2,793.4
Canada	237.8		218.8		217.7
International	473.1		456.0		456.3
Total net sales to external customers	$	3,839.6	$	3,641.6	$	3,467.4

Property, plant, and equipment, net for each major geographic area

Property, plant and equipment, net for each major geographic area in which we operate, based on the domicile of our operations, are shown below (in millions):



	As of December 31,
	2017		2016		2015
Property, Plant and Equipment, net:
United States	$	257.6	$	237.6	$	224.8
Mexico	79.8		69.4		60.0
Canada	1.7		1.4		1.2
International	58.7		53.0		53.6
Total Property, plant and equipment, net	$	397.8	$	361.4	$	339.6