BUSINESS SEGMENTS

Griffon’s reportable segments are as follows:


•	HBP is the leading US manufacturer and a global provider of long-handled tools and landscaping products for homeowners and professionals, as well as a leading manufacturer and marketer of residential and commercial garage doors and sells to professional dealers and some of the largest home center retail chains in North America.


•	Telephonics is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.


•	PPC is a global leader in the development and production of embossed, laminated and printed specialty plastic films for hygienic, health-care and industrial products and sells to some of the world's largest consumer products companies.

Information on Griffon’s reportable segments is as follows:



	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
REVENUE	2017		2016		2017		2016
Home & Building Products:
AMES	$	136,132	$	122,198	$	419,763	$	406,335
CBP	140,349		133,362		406,437		389,657
Home & Building Products	276,481		255,560		826,200		795,992
Telephonics	81,633		91,767		267,998		306,678
PPC	115,206		114,873		341,986		353,786
Total consolidated net sales	$	473,320	$	462,200	$	1,436,184	$	1,456,456

The following table reconciles segment operating profit to income before taxes:



	For the Three Months Ended June 30,						For the Nine Months Ended June 30,
INCOME BEFORE TAXES	2017			2016			2017			2016
Segment operating profit:
Home & Building Products	$	23,708		$	23,201		$	64,661		$	62,170
Telephonics	4,114			9,471			18,521			25,159
PPC	6,325			1,672			19,628			13,569
Total segment operating profit	34,147			34,344			102,810			100,898
Net interest expense	(12,712		)	(12,960		)	(38,701		)	(37,320		)
Unallocated amounts	(9,865		)	(9,625		)	(29,324		)	(28,632		)
Income before taxes	$	11,570		$	11,759		$	34,785		$	34,946

Griffon evaluates performance and allocates resources based on each segment's operating results before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (mainly corporate overhead), restructuring charges, loss on debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable (“Segment adjusted EBITDA”). Griffon believes this information is useful to investors for the same reason.

The following table provides a reconciliation of Segment adjusted EBITDA to Income before taxes:



	For the Three Months Ended June 30,						For the Nine Months Ended June 30,
	2017			2016			2017			2016
Segment adjusted EBITDA:
Home & Building Products	$	33,134		$	32,082		$	92,506		$	88,249
Telephonics	6,784			12,125			26,679			32,913
PPC	13,311			13,588			39,652			37,154
Total Segment adjusted EBITDA	53,229			57,795			158,837			158,316
Net interest expense	(12,712		)	(12,960		)	(38,701		)	(37,320		)
Segment depreciation and amortization	(19,082		)	(17,551		)	(56,027		)	(51,518		)
Unallocated amounts	(9,865		)	(9,625		)	(29,324		)	(28,632		)
Restructuring charges	—			(5,900		)	—			(5,900		)
Income before taxes	$	11,570		$	11,759		$	34,785		$	34,946

Unallocated amounts typically include general corporate expenses not attributable to a reportable segment.



	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
DEPRECIATION and AMORTIZATION	2017		2016		2017		2016
Segment:
Home & Building Products	$	9,426	$	8,881	$	27,845	$	26,079
Telephonics	2,670		2,654		8,158		7,754
PPC	6,986		6,016		20,024		17,685
Total segment depreciation and amortization	19,082		17,551		56,027		51,518
Corporate	125		126		353		361
Total consolidated depreciation and amortization	$	19,207	$	17,677	$	56,380	$	51,879

CAPITAL EXPENDITURES
Segment:
Home & Building Products	$	5,800	$	9,148	$	16,213	$	37,263
Telephonics	1,161		2,360		4,274		5,598
PPC	9,678		5,648		36,764		19,008
Total segment	16,639		17,156		57,251		61,869
Corporate	1		139		1,902		1,378
Total consolidated capital expenditures	$	16,640	$	17,295	$	59,153	$	63,247



ASSETS	At June 30, 2017		At September 30, 2016
Segment assets:
Home & Building Products	$	1,030,779	$	1,020,297
Telephonics	315,791		334,631
PPC	362,003		365,920
Total segment assets	1,708,573		1,720,848
Corporate	91,117		59,061
Total continuing assets	1,799,690		1,779,909
Assets of discontinued operations	4,793		2,187
Consolidated total	$	1,804,483	$	1,782,096