Business Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Business Segment Information

BUSINESS SEGMENT INFORMATION

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies except that the operating segments’ results are prepared on a management basis that is consistent with the manner in which the Company disaggregates financial information for internal review and decision making. The Company largely evaluates performance based on Segment operating income and Segment operating margins. Intercompany sales between segments are considered immaterial.

Segment operating income is the measure of profit and loss that the Company's chief operating decision maker uses to evaluate the financial performance of the business and as the basis for performance reviews, compensation and resource allocation. For these reasons, the Company believes that Segment operating income represents the most relevant measure of segment profit and loss. The Company may exclude certain charges or gains from Operating income to arrive at a Segment operating income that is a more meaningful measure of profit and loss upon which to base its operating decisions.

On September 30, 2011 and November 30, 2011, the Company completed transactions to sell the Hussmann Business and Branches, respectively, to a newly-formed affiliate (Hussmann Parent) of private equity firm Clayton Dubilier & Rice, LLC (CD&R).  The Company recorded a pre-tax loss on sale and impairment charges related to the Hussmann divestiture of $646.9 million. These charges have been excluded from Segment operating income within the Climate Solutions segment as management excludes these charges from Operating income when making operating decisions about the business. See Note 17 for a further discussion of the Hussmann divestiture.

2011 Net revenues and Segment operating income for the Climate Solutions segment includes the operating results of the Hussmann Business and Branches for the nine months and eleven months, respectively, prior to the sale. The operating results for the Hussmann Business and Branches are included in Net revenues and Segment operating income for the Climate Solutions segment for the years ended December 31 as follows:

In millions	2011		2010		2009
Net revenues	$	818.5	$	1,106.1	$	1,008.9
Segment operating income	$	58.6	$	84.4	$	19.4

On December 30, 2011, the Company completed the divestiture of its security installation and service business, which was sold under the Integrated Systems and Services brand in the United States and Canada, to Kratos Public Safety & Security Solutions, Inc. This business, which was previously reported as part of the Security Technologies segment, designs, installs and services security systems. Segment information has been revised to exclude the results of this business for all periods presented.

On December 30, 2010, the Company completed the divestiture of its gas microturbine generator business, which was sold under the Energy Systems brand, to Flex Energy, Inc. The business, which was previously reported as part of the Industrial Technologies segment, designs, manufactures, markets, distributes, and services gas powered microturbine generators which feature energy efficient design and low emissions technology. Segment information has been revised to exclude the results of this business for all periods presented.

On October 4, 2010, the Company completed the divestiture of its European refrigerated display case business, which was sold under the KOXKA brand, to an affiliate of American Industrial Acquisition Corporation (AIAC Group). The business, which was previously reported as part of the Climate Solutions segment, designs, manufactures and markets commercial refrigeration equipment through sales branches and a network of distributors throughout Europe, Africa and the Middle East. Segment information has been revised to exclude the results of this business for all periods presented.

Each reportable segment is based primarily on the types of products it generates. The operating segments have been aggregated as required by GAAP. A description of the Company’s reportable segments is as follows:

The Climate Solutions segment delivers energy-efficient refrigeration and Heating, Ventilation and Air Conditioning (HVAC) throughout the world. Encompassing the transport markets as well as the commercial HVAC markets, this segment offers customers a broad range of products, services and solutions to manage controlled temperature environments. This segment includes the market-leading brands of Thermo King and Trane.

The Residential Solutions segment provides safety, comfort and efficiency to homeowners throughout North America and parts of South America. It offers customers a broad range of products, services and solutions including mechanical and electronic locks, energy-efficient HVAC systems, indoor air quality solutions, advanced controls, portable security systems and remote home management. This segment is comprised of well-known brands like American Standard, Schlage and Trane.

The Industrial Technologies segment provides products, services and solutions that enhance energy efficiency, productivity and operations. It offers its global customers a diverse and innovative range of products including compressed air systems, tools, pumps, fluid and material handling systems, as well as golf, utility, and rough terrain vehicles. It also includes a diverse range of

service offerings including full coverage and preventative maintenance service contracts, service parts, installation, and remanufactured compressors and tools. This segment includes the Club Car, Ingersoll Rand, and ARO market-leading brands.

The Security Technologies segment is a leading global provider of products and services that make environments safe, secure and productive. The segment’s market-leading products include electronic and biometric access control systems and software, locks and locksets, door closers, exit devices, steel doors and frames, as well as time, attendance and personnel scheduling systems. These products serve a wide range of markets including the commercial construction market, healthcare, retail, and transport industries as well as educational and governmental facilities. This segment includes the CISA, LCN, Schlage and Von Duprin market-leading brands.

A summary of operations by reportable segments for the years ended December 31 were as follows:

Dollar amounts in millions	2011				2010			2009
Climate Solutions
Net revenues	$	8,284.6			$	7,800.8		$	7,211.2
Segment operating income	824.6			*	598.3			431.3
Segment operating income as a percentage of revenues	10.0		%		7.7		%	6.0		%
Depreciation and amortization	171.4				206.0			208.3
Capital expenditures	81.6				67.0			93.5
Residential Solutions
Net revenues	2,012.7				2,121.7			2,001.5
Segment operating income	62.1				191.3			130.6
Segment operating income as a percentage of revenues	3.1		%		9.0		%	6.5		%
Depreciation and amortization	110.1				107.4			108.4
Capital expenditures	27.7				35.9			43.5
Industrial Technologies
Net revenues	2,852.9				2,485.2			2,170.0
Segment operating income	415.5				310.4			178.5
Segment operating income as a percentage of revenues	14.6		%		12.5		%	8.2		%
Depreciation and amortization	40.3				41.5			42.9
Capital expenditures	57.2				31.3			23.0
Security Technologies
Net revenues	1,631.8				1,593.4			1,626.4
Segment operating income	331.6				328.3			328.6
Segment operating income as a percentage of revenues	20.3		%		20.6		%	20.2		%
Depreciation and amortization	37.2				38.7			39.0
Capital expenditures	22.8				14.6			25.9
Total net revenues	$	14,782.0			$	14,001.1		$	13,009.1
Reconciliation to Operating Income
Segment operating income from reportable segments	1,633.8				1,428.3			1,069.0
Loss on sale/asset impairment	(646.9		)	*	—			—
Unallocated corporate expense	(126.6		)		(166.9		)	(183.8		)
Total operating income	$	860.3			$	1,261.4		$	885.2
Total operating income as a percentage of revenues	5.8		%		9.0		%	6.8		%
Depreciation and amortization from reportable segments	359.0				393.6			398.6
Unallocated depreciation and amortization	43.7				43.2			22.9
Total depreciation and amortization	$	402.7			$	436.8		$	421.5
Capital expenditures from reportable segments	189.3				148.8			185.9
Corporate capital expenditures	53.6				30.7			18.2
Total capital expenditures	$	242.9			$	179.5		$	204.1

* During the year ended December 31, 2011, the Company recorded a pre-tax loss on sale and impairment charges related to the Hussmann divestiture of $646.9 million. These charges have been excluded from Segment operating income within the Climate Solutions segment as management excludes these charges from Operating income when making operating decisions about the business.

Included in Segment operating income for Climate Solutions for the year ended December 31, 2011 is a $23 million gain associated with the sale of assets from a restructured business in China.

Revenues by destination and long-lived assets by geographic area for the years ended December 31 were as follows:

In millions	2011		2010		2009
Revenues
United States	$	8,683.7	$	8,585.9	$	8,128.3
Non-U.S.	6,098.3		5,415.2		4,880.8
Total	$	14,782.0	$	14,001.1	$	13,009.1

In millions	2011		2010
Long-lived assets
United States	$	2,583.2	$	2,698.3
Non-U.S.	783.5		838.8
Total	$	3,366.7	$	3,537.1