Segment Reporting

12 Months Ended

Jul. 31, 2015

Segment Reporting, Measurement Disclosures [Abstract]

Segment Reporting

NOTE K Segment Reporting

Consistent with FASB guidance related to segment reporting, the Company identified two reportable segments: Engine Products and Industrial Products. Segment selection was based on the internal organizational structure, management of operations, and performance evaluation by management and the Company’s Board of Directors.

The Engine Products segment sells to original equipment manufacturers (OEM) in the construction, mining, agriculture, aerospace, defense, and truck end-markets, and to independent distributors, OEM dealer networks, private label accounts, and large equipment fleets. Products include air filtration systems, exhaust and emissions systems, liquid filtration systems including hydraulics, fuel, lube, and replacement filters.

The Industrial Products segment sells to various industrial dealers, distributors, OEMs of gas-fired turbines, and OEMs and end-users requiring clean air. Products include dust, fume, and mist collectors, compressed air purification systems, air filtration systems for gas turbines, PTFE membrane-based products, and specialized air and gas filtration systems for applications including computer hard disk drives and semi-conductor manufacturing.

Corporate and Unallocated includes corporate expenses determined to be non-allocable to the segments such as interest income and interest expense. Assets included in Corporate and Unallocated principally are cash and cash equivalents, inventory reserves, certain prepaids, certain investments, other assets, and assets allocated to general corporate purposes. 

The Company has an internal measurement system to evaluate performance and allocate resources based on profit or loss from operations before income taxes. The Company’s manufacturing facilities serve both reporting segments. Therefore, the Company uses an allocation methodology to assign costs and assets to the segments. A certain amount of costs and assets relate to general corporate purposes and are not assigned to either segment. The accounting policy applied to inventory for the reportable segments differs from that described in the summary of significant accounting policies. The reportable segments account for inventory on a standard cost basis, which is consistent with our internal reporting.

Segment allocated assets are primarily accounts receivable, inventories, property, plant and equipment, and goodwill. Reconciling items included in Corporate and Unallocated are created based on accounting differences between segment reporting and the consolidated external reporting as well as internal allocation methodologies.

The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the operating profit and other financial information shown below.

Segment detail is summarized as follows:

	Engine Products		Industrial Products		Corporate & Unallocated			Total Company
	(thousands of dollars)
2015
Net sales	$	1,484,132	$	887,081	$	—		$	2,371,213
Depreciation and amortization		43,279		26,408		4,611			74,298
Equity earnings in unconsolidated affiliates		4,134		976		—			5,110
Earnings before income taxes		186,274		123,362		(21,033	)		288,603
Assets		887,698		633,977		287,859			1,809,534
Equity investments in unconsolidated affiliates		15,120		3,224		—			18,344
Capital expenditures		54,604		33,318		5,817			93,739
2014
Net sales	$	1,584,027	$	889,439	$	—		$	2,473,466
Depreciation and amortization		38,925		23,942		4,296			67,163
Equity earnings in unconsolidated affiliates		5,596		940		—			6,536
Earnings before income taxes		233,920		133,978		(7,195	)		360,703
Assets		900,083		572,000		470,328			1,942,411
Equity investments in unconsolidated affiliates		17,439		3,959		—			21,398
Capital expenditures		56,340		34,652		6,218			97,210
2013
Net sales	$	1,504,188	$	932,760	$	—		$	2,436,948
Depreciation and amortization		35,815		22,447		6,028			64,290
Equity earnings in unconsolidated affiliates		4,000		693		—			4,693
Earnings before income taxes		220,892		139,108		(11,819	)		348,181
Assets		826,151		527,416		389,989			1,743,556
Equity investments in unconsolidated affiliates		15,563		3,277		—			18,840
Capital expenditures		52,864		33,134		8,897			94,895

Following are net sales by product within the Engine Products segment and Industrial Products segment:

	2015		2014		2013
	(thousands of dollars)
Engine Products segment:
Off-Road Products	$	261,120	$	342,205	$	358,834
On-Road Products		138,405		130,029		128,446
Aftermarket Products*		980,756		1,012,165		912,717
Aerospace and Defense Products		103,851		99,628		104,191
Total Engine Products segment		1,484,132		1,584,027		1,504,188
Industrial Products segment:
Industrial Filtration Solutions Products		528,917		553,356		529,751
Gas Turbine Products		186,919		156,860		232,922
Special Applications Products		171,245		179,223		170,087
Total Industrial Products segment		887,081		889,439		932,760
Total Company	$	2,371,213	$	2,473,466	$	2,436,948

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* Includes replacement part sales to the Company’s OEM Customers.

Geographic sales by origination and property, plant, and equipment:

	Net Sales		Property, Plant, & Equipment - Net
	(thousands of dollars)
2015
United States	$	1,007,253	$	208,996
Europe		671,296		141,738
Asia Pacific		470,661		63,775
Other		222,003		56,102
Total	$	2,371,213	$	470,611
2014
United States	$	1,019,926	$	196,712
Europe		728,554		128,904
Asia Pacific		517,305		72,089
Other		207,681		53,960
Total	$	2,473,466	$	451,665
2013
United States	$	1,010,934	$	166,614
Europe		678,996		123,710
Asia Pacific		546,406		75,206
Other		200,612		53,750
Total	$	2,436,948	$	419,280

Concentrations There were no Customers over 10 percent of net sales during Fiscal 2015, 2014, and 2013. There were no Customers over 10 percent of gross accounts receivable in Fiscal 2015 or Fiscal 2014.