Segment Results

6 Months Ended

Jun. 30, 2011

Segment Results

Segment Results

Note 15. Segment Results

The Company has determined its reportable segments in accordance with FASB ASC 280, Segment Reporting ("FASB ASC 280"), and evaluates the performance of its reportable segments based on, among other measures, operating income, which is defined as income before interest expense, other expense (income), net, and income taxes. Reportable segment operating income and segment operating margin (defined as segment operating income divided by segment revenues) are indicative of short-term operating performance and ongoing profitability. Management closely monitors the operating income and operating margin of each reportable segment to evaluate past performance and actions required to improve profitability.

In the Industrial Products Group, the Company designs, manufactures, markets and services the following products and related aftermarket parts for industrial and commercial applications: rotary screw, reciprocating, and sliding vane air and gas compressors; positive displacement, centrifugal and side channel blowers; and vacuum pumps primarily serving manufacturing, transportation and general industry and selected OEM and engineered system applications. The Company also markets and services complementary ancillary products. Stationary air compressors are used in manufacturing, process applications and materials handling, and to power air tools and equipment. Blowers are used primarily in pneumatic conveying, wastewater aeration, numerous applications in industrial manufacturing and engineered vacuum systems. The markets served are primarily in Europe, the U.S. and Asia.

In the Engineered Products Group, the Company designs, manufactures, markets and services a diverse group of pumps, compressors, liquid ring vacuum pumps, water jetting and loading arm systems and related aftermarket parts. These products are used in well drilling, well servicing and production of oil and natural gas; industrial, commercial and transportation applications; and in industrial cleaning and maintenance. Liquid ring pumps are used in many different applications such as water removal, distilling, reacting, flare gas recovery, efficiency improvement, lifting and handling, and filtering, principally in the pulp and paper, industrial manufacturing, petrochemical and power industries. This segment also designs, manufactures, markets and services other engineered products and components and equipment for the chemical, petroleum and food industries. The markets served are primarily in the U.S., Europe, Canada and Asia.

The following table provides financial information by business segment for the three and six-month periods ended June 30, 2011 and 2010:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Industrial Products Group
Revenues	$	327,846		$	268,650		$	614,056		$	515,044
Operating income		34,325			20,157			65,127			39,710
Operating income as a percentage of revenues		10.5	%		7.5	%		10.6	%		7.7	%
Engineered Products Group
Revenues	$	282,847		$	180,869		$	528,490		$	356,639
Operating income		64,847			36,430			120,868			64,341
Operating income as a percentage of revenues		22.9	%		20.1	%		22.9	%		18.0	%
Reconciliation of Segment Results to Consolidated Results
Total segment operating income	$	99,172		$	56,587		$	185,995		$	104,051
Interest expense		3,934			6,062			9,281			12,178
Other expense (income), net		279			(2	)		(683	)		(637	)
Consolidated income before income taxes	$	94,959		$	50,527		$	177,397		$	92,510