Reportable Business Segments

3 Months Ended

Mar. 31, 2017

Reportable Business Segments

Reportable Business Segments

Note 4—Reportable Business Segments

The Company has two reportable business segments: (i) Interconnect Products and Assemblies and (ii) Cable Products and Solutions. The Company organizes its reportable business segments based upon similar economic characteristics and business groupings of products, services and customers.  These reportable business segments are determined based upon how the Company reviews its businesses, assesses operating performance and makes investing and resource allocation decisions.  The Interconnect Product and Assemblies segment primarily designs, manufactures and markets a broad range of connector and connector systems, value-add products and other products, including antennas and sensors, used in a broad range of applications in a diverse set of end markets.  The Cable Products and Solutions segment primarily designs, manufactures and markets cable, value-add products and components for use primarily in the broadband communications and information technology markets as well as certain applications in other markets.  The accounting policies of the segments are the same as those for the Company as a whole and are described in Note 1 of the notes to the consolidated financial statements in the Company’s 2016 Annual Report.  The Company evaluates the performance of business units on, among other things, profit or loss from operations before interest, headquarters’ expense allocations, stock-based compensation expense, income taxes, amortization related to certain intangible assets and nonrecurring gains and losses.

The segment results for the three months ended March 31, 2017 and 2016 are as follows:

	Interconnect Products				Cable Products				Total Reportable
	and Assemblies				and Solutions				Business Segments
Three Months Ended March 31:	2017		2016		2017		2016		2017		2016
Net sales:
External	$	1,463.5	$	1,367.8	$	96.6	$	83.4	$	1,560.1	$	1,451.2
Intersegment		2.3		1.6		10.2		6.3		12.5		7.9
Segment operating income		323.9		281.2		13.7		11.1		337.6		292.3

A reconciliation of segment operating income to consolidated income before income taxes for the three months ended March 31, 2017 and 2016 is summarized as follows:

	Three Months Ended March 31,
	2017		2016
Segment operating income	$	337.6	$	292.3
Interest expense		(19.3)		(18.1)
Other income, net		3.6		1.0
Stock-based compensation expense		(12.1)		(11.6)
Acquisition-related expenses		—		(30.3)
Other operating expenses		(11.4)		(11.0)
Income before income taxes	$	298.4	$	222.3