Business Segment Information

12 Months Ended

Dec. 31, 2014

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 prepares 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.

Our Climate segment delivers energy-efficient solutions globally and includes Trane^® and American Standard^® Heating & Air Conditioning which provide heating, ventilation and air conditioning (HVAC) systems, and commercial and residential building services, parts, support and controls; and Thermo King^® transport temperature control solutions.

Our Industrial segment delivers products and services that enhance energy efficiency, productivity and operations. It includes Ingersoll Rand^® compressed air systems and services, power tools, material handling systems, ARO^® fluid management equipment, as well as Club Car^® golf, utility and rough terrain vehicles.

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.

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

Dollar amounts in millions	2014			2013			2012
Climate
Net revenues	$	9,879.7		$	9,414.0		$	9,042.5
Segment operating income	1,195.6			936.0			817.6
Segment operating income as a percentage of revenues	12.1		%	9.9		%	9.0		%
Depreciation and amortization	247.1			252.8			257.0
Capital expenditures	107.8			129.4			105.1
Industrial
Net revenues	3,011.7			2,936.5			2,945.8
Segment operating income	443.0			450.3			455.8
Segment operating income as a percentage of revenues	14.7		%	15.3		%	15.5		%
Depreciation and amortization	44.2			43.9			42.9
Capital expenditures	33.1			44.0			62.6
Total net revenues	$	12,891.4		$	12,350.5		$	11,988.3
Reconciliation to Operating Income
Segment operating income from reportable segments	1,638.6			1,386.3			1,273.4
Gain (loss) on sale/asset impairment	—			—			4.5
Unallocated corporate expense	(233.9		)	(281.3		)	(206.0		)
Total operating income	$	1,404.7		$	1,105.0		$	1,071.9
Total operating income as a percentage of revenues	10.9		%	8.9		%	8.9		%
Depreciation and amortization from reportable segments	291.3			296.7			299.9
Unallocated depreciation and amortization	41.1			37.0			33.9
Total depreciation and amortization	$	332.4		$	333.7		$	333.8
Capital expenditures from reportable segments	140.9			173.4			167.7
Corporate capital expenditures	92.6			68.8			75.4
Total capital expenditures	$	233.5		$	242.2		$	243.1

A summary of Net revenues by destination and by major product/solution for the years ended December 31 were as follows:

In millions	2014		2013		2012
United States	$	7,693.0	$	7,298.0	$	7,039.0
Non-U.S.	5,198.4		5,052.5		4,949.3
Total	$	12,891.4	$	12,350.5	$	11,988.3

In millions	2014		2013		2012
Commercial HVAC	$	6,049.8	$	5,874.7	$	5,608.5
Transport Refrigeration	2,089.2		1,895.0		1,792.2
Residential HVAC	1,740.7		1,644.3		1,641.8
Compressed Air Systems & Services	1,812.3		1,762.0		1,782.6
Other Industrial	1,199.4		1,174.5		1,163.2
Total	$	12,891.4	$	12,350.5	$	11,988.3

At December 31, summary of long-lived assets by geographic area were as follows:

In millions	2014		2013
United States	$	2,121.2	$	2,216.8
Non-U.S.	537.7		571.6
Total	$	2,658.9	$	2,788.4