Operating Segments and Related Disclosures

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Operating Segments and Related Disclosures

Operating Segments and Related Disclosures

The Company’s operations are organized into two operating segments based on different products and customer bases: Aerospace and Defense, and Real Estate.

The Company evaluates its operating segments based on several factors, of which the primary financial measure is segment performance. Segment performance represents net sales less applicable costs, expenses and unusual items relating to the segment operations. Segment performance excludes corporate income and expenses, legacy income or expenses, unusual items not related to the segment operations, interest expense, interest income, and income taxes.

Customers that represented more than 10% of net sales for the periods presented are as follows:

	Three months ended March 31,
	2017		2016
United Launch Alliance	23	%	20	%
Lockheed Martin Corporation	18	%	27	%
Raytheon Company	18	%	17	%
NASA	18	%	14	%
Boeing	11	%	*

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* Less than 10%

The Company's sales to each of the major customers listed above involve several product lines and programs.

Sales to the U.S. government and its agencies, including sales to the Company’s significant customers discussed above, were as follows:

	Percentage of net sales
Three months ended March 31, 2017	93	%
Three months ended March 31, 2016	92	%

Selected financial information for each operating segment is as follows:

	Three months ended March 31,
	2017			2016
	(In millions)
Net Sales:
Aerospace and Defense	$	403.7		$	355.3
Real Estate	1.6			1.6
Total Net Sales	$	405.3		$	356.9
Segment Performance:
Aerospace and Defense	$	38.7		$	36.0
Environmental remediation provision adjustments	(0.6		)	(0.6		)
Retirement benefits, net (1)	(4.0		)	(5.6		)
Unusual items	0.6			0.1
Aerospace and Defense Total	34.7			29.9
Real Estate	0.8			0.8
Total Segment Performance	$	35.5		$	30.7
Reconciliation of segment performance to income before income taxes:
Segment performance	$	35.5		$	30.7
Interest expense	(7.4		)	(11.1		)
Interest income	0.5			0.2
Stock-based compensation expense	(6.8		)	(2.3		)
Corporate retirement benefits	(5.0		)	(4.7		)
Corporate and other expense, net	(6.6		)	(3.9		)
Unusual items	(1.0		)	(0.3		)
Income before income taxes	$	9.2		$	8.6

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(1) Retirement benefits are net of cash funding to the Company's tax-qualified defined benefit pension plan which are recoverable costs under the Company's U.S. government contracts. The Company's recoverable tax-qualified pension costs in the first quarter of fiscal 2017 and 2016 totaled $9.3 million and $6.9 million, respectively.