Industry Segments and Geographic Area Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Industry Segments and Geographic Area Information

Industry Segments and Geographic Area Information

Nature of Operations

Hubbell Incorporated was founded as a proprietorship in 1888, and was incorporated in Connecticut in 1905. Hubbell designs, manufactures and sells quality electrical and electronic products for a broad range of non-residential and residential construction, industrial and utility applications. Products are either sourced complete, manufactured or assembled by subsidiaries in the United States, Canada, Switzerland, Puerto Rico, China, Mexico, Italy, the UK, Brazil, Australia and Ireland. Hubbell also participates in joint ventures in Taiwan and Hong Kong, and maintains offices in Singapore, China, India, Mexico, South Korea and countries in the Middle East.

The Company’s reporting segments consist of the Electrical segment (comprised of electrical systems products and lighting products), and the Power segment, as described below.

The Electrical segment is comprised of businesses that sell stock and custom products including standard and special application wiring device products, rough-in electrical products, connector and grounding products, lighting fixtures and controls, and other electrical equipment. The products are typically used in and around industrial, commercial and institutional facilities by electrical contractors, maintenance personnel, electricians, and telecommunications companies. In addition, certain businesses design and manufacture a variety of high voltage test and measurement equipment, industrial controls and communication systems used in the non-residential and industrial markets. Many of these products are designed such that they can also be used in harsh and hazardous locations where a potential for fire and explosion exists due to the presence of flammable gasses and vapors. Harsh and hazardous products are primarily used in the oil and gas (onshore and offshore) and mining industries. There are also a variety of lighting fixtures, wiring devices and electrical products that have residential and utility applications. These products are primarily sold through electrical and industrial distributors, home centers, some retail and hardware outlets, lighting showrooms

and residential product oriented internet sites. Special application products are sold primarily through wholesale distributors to contractors, industrial customers and OEMs. High voltage products are also sold direct to customers through our sales engineers.

The Power segment consists of operations that design and manufacture various distribution, transmission, substation and telecommunications products primarily used by the electrical utility industry. In addition, certain of these products are used in the civil construction and transportation industries. Products are sold to distributors and directly to users such as electric utilities, telecommunication companies, mining operations, industrial firms, construction and engineering firms.

Financial Information

Financial information by industry segment, product class and geographic area for each of the three years ended December 31, 2015, 2014 and 2013 is summarized below (in millions). When reading the data the following items should be noted:

• Net sales comprise sales to unaffiliated customers — inter-segment and inter-area sales are not significant.

• Segment operating income consists of net sales less operating expenses, including total corporate expenses, which are generally allocated to each segment on the basis of the segment’s percentage of consolidated net sales. Interest expense and investment income and other expense, net have not been allocated to segments as these items are centrally managed by the Company.

• General corporate assets not allocated to segments are principally cash, prepaid pensions, investments and deferred taxes. These assets have not been allocated as they are centrally managed by the Company.

INDUSTRY SEGMENT DATA

	2015			2014			2013
Net Sales:
Electrical	$	2,388.3		$	2,398.2		$	2,262.6
Power	1,002.1			961.2			921.3
TOTAL NET SALES	$	3,390.4		$	3,359.4		$	3,183.9
Operating Income:
Electrical	$	279.0		$	337.9		$	341.1
Power	195.6			179.5			166.5
Operating Income	$	474.6		$	517.4		$	507.6
Interest expense	(31.0		)	(31.2		)	(30.8		)
Investment income and other expense, net	(25.0		)	(0.7		)	(3.0		)
INCOME BEFORE INCOME TAXES	$	418.6		$	485.5		$	473.8
Assets:
Electrical	$	2,120.9		$	1,963.0		$	1,813.8
Power	839.7			832.0			707.0
General Corporate	248.1			525.1			663.2
TOTAL ASSETS	$	3,208.7		$	3,320.1		$	3,184.0
Capital Expenditures:
Electrical	$	47.9		$	35.1		$	32.4
Power	28.4			21.8			25.0
General Corporate	0.8			3.4			1.4
TOTAL CAPITAL EXPENDITURES	$	77.1		$	60.3		$	58.8
Depreciation and Amortization:
Electrical	$	56.2		$	53.4		$	48.0
Power	29.0			25.8			22.6
TOTAL DEPRECIATION AND AMORTIZATION	$	85.2		$	79.2		$	70.6

PRODUCT CLASS DATA

	2015		2014		2013
Net Sales:
Electrical Systems	$	1,476.7	$	1,538.7	$	1,466.4
Lighting	911.6		859.5		796.2
Power	1,002.1		961.2		921.3
TOTAL NET SALES	$	3,390.4	$	3,359.4	$	3,183.9

GEOGRAPHIC AREA DATA

	2015		2014		2013
Net Sales:
United States	$	3,008.4	$	2,883.8	$	2,687.6
International	382.0		475.6		496.3
TOTAL NET SALES	$	3,390.4	$	3,359.4	$	3,183.9
Operating Income:
United States	$	426.1	$	447.2	$	417.5
International	48.5		70.2		90.1
TOTAL OPERATING INCOME	$	474.6	$	517.4	$	507.6
Long-lived Assets:
United States	$	1,627.7	$	1,492.5	$	1,341.4
International	187.1		199.7		212.3
TOTAL LONG-LIVED ASSETS	$	1,814.8	$	1,692.2	$	1,553.7

On a geographic basis, the Company defines “international” as operations based outside of the United States and its possessions. As a percentage of total net sales, shipments from foreign operations directly to third parties were 11% in 2015, 14% in 2014 and 16% in 2013, with the Canadian and UK operations representing approximately 34% and24%, respectively, of 2015 total international net sales. Of the remaining 2015 international sales Mexico represents 11%. while Switzerland and Brazil represent 10% each.

Long-lived assets, excluding deferred tax assets, of international subsidiaries were 10% of the consolidated total in 2015, 12% in 2014 and 14% in 2013, with the UK, Mexico and Canada operations representing approximately 29%, 24%, and 15%, respectively, of the 2015 international total. Export sales from United States operations were $224.9 million in 2015, $234.5 million in 2014 and $213.0 million in 2013.