SEGMENT AND GEOGRAPHIC INFORMATION

The Company is organized based upon the nature of its products and services, and is composed of two operating segments each overseen by a segment manager. These segments are reflective of how the Company’s Chief Executive Officer, who is its Chief Operating Decision Maker (“CODM”), reviews operating results for the purposes of allocating resources and assessing performance. The Company has not aggregated operating segments for purposes of identifying reportable segments.

The Distribution segment is a leading power transmission, motion control, and fluid power industrial distributor with operations throughout the United States. The segment provides electro-mechanical products, bearings, power transmission, motion control and electrical and fluid power components, along with engineered integrated solutions to its customers' most challenging applications serving a broad spectrum of industrial markets, including both MRO and OEM customers.

The Aerospace segment produces and markets proprietary aircraft bearings and components; super precision, miniature ball bearings for the medical, industrial and aerospace markets; complex metallic and composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft; and safe and arming solutions for missile and bomb systems for the U.S. and allied militaries. The segment also markets the design and supply of aftermarket parts to businesses performing MRO in aerospace markets; performs helicopter subcontract work; restores, modifies and supports the Company's SH-2G Super Seasprite maritime helicopters; manufactures and supports the Company's K-MAX® manned and unmanned medium-to-heavy lift helicopters; and provides engineering design, analysis and certification services.

Summarized financial information by business segment is as follows:



	For the year ended December 31,
	2017			2016			2015
In thousands
Net sales:
Distribution	$	1,080,965		$	1,106,322		$	1,177,539
Aerospace ^(a)	724,944			702,054			597,586
Net sales	$	1,805,909		$	1,808,376		$	1,775,125
Operating income:
Distribution	$	52,482		$	41,859		$	49,441
Aerospace	119,889			115,005			110,328
Net gain (loss) on sale of assets	256			(11		)	328
Corporate expense	(58,452		)	(50,930		)	(55,578		)
Operating income	114,175			105,923			104,519
Interest expense, net	20,581			15,747			13,144
Other (income) expense, net	(784		)	472			3,386
Earnings before income taxes	94,378			89,704			87,989
Income tax expense	44,552			30,850			27,551
Net earnings	$	49,826		$	58,854		$	60,438

^(a) Net sales by the Aerospace segment under contracts with USG agencies (including sales to foreign governments through foreign military sales contracts with USG agencies) totaled $248.6 million, $244.4 million and $211.4 million in 2017, 2016 and 2015, respectively, and represent direct and indirect sales to the USG and related agencies.

18. SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED)



	At December 31,
In thousands	2017		2016		2015
Identifiable assets ^(a):
Distribution	$	537,911	$	540,900	$	558,630
Aerospace	810,278		720,823		738,426
Corporate ^(b)	107,263		164,563		142,555
Total assets	$	1,455,452	$	1,426,286	$	1,439,611
Capital expenditures:
Distribution	$	9,621	$	9,016	$	10,685
Aerospace	17,208		17,935		13,378
Corporate	802		2,826		5,869
Total capital expenditures	$	27,631	$	29,777	$	29,932
Depreciation and amortization ^(c):
Distribution	$	15,083	$	16,107	$	16,368
Aerospace	23,717		23,584		16,275
Corporate	3,671		3,702		3,538
Total depreciation and amortization	$	42,471	$	43,393	$	36,181

^(a) Identifiable assets are year-end assets at their respective net carrying values segregated as to segment and corporate use.

^(b) For the periods presented, the corporate identifiable assets are principally comprised of cash, short-term and long-term deferred income tax assets, cash surrender value of life insurance policies and fixed assets.

^(c)Depreciation and amortization amounts exclude amortization of debt issuance costs.

The following table summarizes total sales of the Company, which are principally derived from the sale of products:



	For the year ended December 31,
	2017		2016		2015
in thousands
Bearings and Power Transmission ^(a)	$	536,143	$	548,736	$	594,511
Automation, Control and Energy	326,117		337,428		354,771
Fluid Power	218,705		220,158		228,257
Military and Defense, other than fuzes	201,760		205,812		242,112
Missile and Bomb Fuzes	184,640		164,187		120,755
Commercial Aerospace and Other	338,544		332,055		234,719
Total sales ^(b)	$	1,805,909	$	1,808,376	$	1,775,125

^(a) Aerospace bearings are not included in this caption, as they are reported in either the "Military and Defense" or "Commercial Aerospace and Other" categories.

^(b) Service revenue was not material for the years ended December 31, 2017, 2016 and 2015.

18. SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED)

Sales are attributed to geographic regions based on the location to which the product is shipped. Geographic distribution of sales recorded is as follows:



	For the year ended December 31,
	2017		2016		2015
In thousands
North America	$	1,505,768	$	1,514,595	$	1,518,416
Europe	169,353		168,456		112,057
Middle East	81,343		61,409		65,740
Asia	35,521		46,805		33,020
Oceania	10,868		13,385		37,959
Other	3,056		3,726		7,933
Total	$	1,805,909	$	1,808,376	$	1,775,125

Geographic distribution of long-lived assets is as follows:



	At December 31,
	2017		2016
In thousands
United States	$	456,023	$	465,906
Germany	169,782		151,336
United Kingdom	47,486		44,702
Czech Republic	5,448		4,766
Mexico	1,241		1,650
Total	$	679,980	$	668,360

For the purpose of this disclosure the Company excluded deferred tax assets of $27.6 million and $59.4 million as of December 31, 2017 and 2016, respectively.