Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information

Segment Information

8. Segment Information

The Company has four reportable segments based on its four geographic locations:  (1) Europe; (2) North America; (3) South America; (4) Asia Pacific.  These four segments are aligned with the Company’s internal approach to managing, reporting, and evaluating performance of its global glass operations.  Certain assets and activities not directly related to one of the regions or to glass manufacturing are reported with Retained corporate costs and other.  These include licensing, equipment manufacturing, global engineering, and non-glass equity investments.  Retained corporate costs and other also includes certain headquarters administrative and facilities costs and certain incentive compensation and other benefit plan costs that are global in nature and are not allocable to the reportable segments.

The Company’s measure of profit for its reportable segments is Segment Operating Profit, which consists of consolidated earnings from continuing operations before interest income, interest expense, and provision for income taxes and excludes amounts related to certain items that management considers not representative of ongoing operations as well as certain retained corporate costs.  The Company’s management uses Segment Operating Profit, in combination with net sales and selected cash flow information, to evaluate performance and to allocate resources.  Segment Operating Profit for reportable segments includes an allocation of some corporate expenses based on both a percentage of sales and direct billings based on the costs of specific services provided.

In prior periods, pension expense was recorded in each segment related to the pension plans in place in that segment, with the exception of the U.S. pension plans which were recorded in Retained corporate costs and other.  Effective January 1, 2012, the Company changed the allocation of pension expense to its reportable segments such that pension expense recorded in each segment relates only to the service cost component of the plans in that segment.  The other components of pension expense, including interest cost, expected asset returns and amortization of actuarial losses, are recorded in Retained corporate costs and other.  This change in allocation has been applied retrospectively to all periods.  Also effective January 1, 2012, the Company elected to change the method of valuing U.S. inventories (see Note 2 for additional information).

The impact of the changes in pension expense allocation and accounting method for inventory on Segment Operating Profit for the quarter ended March 31, 2011 is as follows:

	As Originally Reported			Change in Pension Allocation			Change in Accounting Method for Inventory		As Adjusted
Segment Operating Profit:
Europe	$	71		$	5		$	—	$	76
North America	59			(6		)	10		63
South America	45								45
Asia Pacific	24								24
Reportable segment totals	199			(1		)	10		208
Retained corporate costs and other	(13		)	1					(12		)

Financial information for the three-month periods ended March 31, 2012 and 2011 regarding the Company’s reportable segments is as follows:

	2012		2011
Net sales:
Europe	$	705	$	698
North America	482		463
South America	277		269
Asia Pacific	257		262
Reportable segment totals	1,721		1,692
Other	18		27
Net sales	$	1,739	$	1,719

	2012			2011
Segment Operating Profit:
Europe	$	108		$	76
North America	78			63
South America	38			45
Asia Pacific	36			24
Reportable segment totals	260			208
Items excluded from Segment Operating Profit:
Retained corporate costs and other	(29		)	(12		)
Restructuring and asset impairment				(8		)
Interest income	3			3
Interest expense	(64		)	(76		)
Earnings from continuing operations before income taxes	$	170		$	115

Financial information regarding the Company’s total assets is as follows:

	March 31,		December 31,		March 31,
	2012		2011		2011
Total assets:
Europe	$	3,744	$	3,588	$	3,842
North America	2,056		2,020		2,040
South America	1,724		1,682		1,678
Asia Pacific	1,359		1,379		2,037
Reportable segment totals	8,883		8,669		9,597
Other	278		306		428
Consolidated totals	$	9,161	$	8,975	$	10,025