Segment Reporting

9 Months Ended

Sep. 30, 2012

Segment Reporting

Note 10.               Segment Reporting

The Company is organized based on the products and services it offers. The Company’s reportable segments, which are also its operating segments, are comprised of commercial aircraft, consumables management and business jet.

The Company has six reporting units, which were determined based on materiality and on the guidelines contained in FASB ASC Topic 350, Subtopic 20, Section 35. Each reporting unit represents either (a) an operating segment (which is also a reportable segment) or (b) a component of an operating segment, which constitutes a business, for which there is discrete financial information available that is regularly reviewed by segment management.

The Company evaluates segment performance based on segment operating earnings or losses. Each segment regularly reports its results of operations and makes requests for capital expenditures and acquisition funding to the Company’s chief operating decision-making group. This group is comprised of the Chairman and Chief Executive Officer, the President and Chief Operating Officer, and the Senior Vice President and Chief Financial Officer. Each operating segment has separate management teams and infrastructures dedicated to providing a full range of products and services to their commercial, business jet, military, MRO, aircraft leasing and aircraft manufacturing customers.

The Company has not included product line information due to the similarity of commercial aircraft segment product offerings and the impracticality of determining such information for the consumables management segment.

The following table presents revenues and operating earnings by reportable segment:

	THREE MONTHS ENDED				NINE MONTHS ENDED
	September 30,		September 30,		September 30,		September 30,
	2012		2011		2012		2011
Revenues
Commercial aircraft	$	385.6	$	333.1	$	1,152.6	$	951.9
Consumables management		295.8		238.7		869.2		709.4
Business jet		85.3		64.2		260.3		183.8
	$	766.7	$	636.0	$	2,282.1	$	1,845.1
Operating earnings (1)
Commercial aircraft	$	67.3	$	56.6	$	202.7	$	157.8
Consumables management		54.6		47.6		161.9		140.5
Business jet		12.4		7.9		37.3		20.6
		134.3		112.1		401.9		318.9
Interest expense		31.8		26.2		93.4		78.4
Debt prepayment costs		82.1		--		82.1		--
Earnings before income taxes	$	20.4	$	85.9	$	226.4	$	240.5

(1) Operating earnings include an allocation of corporate IT costs, employee benefits and selling, general and administrative costs based on the proportion of each segment’s systems users, number of employees and sales. 

The following table presents capital expenditures by reportable segment:

	THREE MONTHS ENDED				NINE MONTHS ENDED
	September 30,		September 30,		September 30,		September 30,
	2012		2011		2012		2011
Capital expenditures
Commercial aircraft	$	22.3	$	14.5	$	54.8	$	29.1
Consumables management		5.8		8.3		21.7		12.9
Business jet		1.8		1.6		6.8		3.5
	$	29.9	$	24.4	$	83.3	$	45.5

The following table presents goodwill by reportable segment:

	September 30,		December 31,
	2012		2011
Goodwill
Commercial aircraft	$	386.3	$	384.2
Consumables management		1,013.6		535.5
Business jet		90.1		88.6
	$	1,490.0	$	1,008.3

The following table presents total assets by reportable segment:

	September 30,		December 31,
	2012		2011
Total assets (1)
Commercial aircraft	$	1,535.3	$	1,366.1
Consumables management		3,077.2		2,156.8
Business jet		385.1		314.4
	$	4,997.6	$	3,837.3

(1) Corporate assets (including cash and cash equivalents) of $457.5 and $304.6 at September 30, 2012 and December 31, 2011, respectively, have been allocated to the above segments based on each segment's respective percentage of total assets.