SEGMENT REPORTING

6 Months Ended

Jun. 30, 2011

SEGMENT REPORTING

10. SEGMENT REPORTING

Our segments meeting the quantitative thresholds to be considered reportable are Shared Mail, Neighborhood Targeted and Free-standing Inserts (“FSI”). All other lines of business fall below a materiality threshold and are, therefore, combined together in an “other” segment named International, Digital Media & Services. These business lines include NCH Marketing Services, Inc., direct mail, software analytics, security services, digital and in-store. Our reportable segments are strategic business units that offer different products and services and are subject to regular review by our chief operating decision-maker. They are managed separately because each business requires different executional strategies and caters to different client marketing needs.

The accounting policies of the segments are the same as those described in the 2010 Form 10-K and Note 1, Basis of Presentation and Significant Accounting Policies. We evaluate reportable segment performance based on segment profit, which we define as earnings from operations excluding unusual or infrequently occurring items. A reconciliation of total segment profit to earnings from operations is provided below. Assets are not allocated in all cases to reportable segments and are not used to assess the performance of a segment.

The following table sets forth, by segment, revenues, depreciation/amortization and segment profit for the indicated periods:

	Three Months Ended June 30,
(in millions of U.S. dollars)	Shared Mail		Neighborhood Targeted		FSI		International, Digital Media & Services		Total
2011
Revenues from external customers	$	337.2	$	88.8	$	89.2	$	50.0	$	565.2
Intersegment revenues	$	4.1	$	12.9	$	9.8	$	0.1	$	26.9
Depreciation/amortization	$	9.5	$	1.0	$	3.0	$	1.9	$	15.4
Segment profit	$	47.7	$	0.8	$	8.3	$	6.4	$	63.2
2010
Revenues from external customers	$	326.3	$	116.3	$	94.6	$	42.8	$	580.0
Intersegment revenues	$	3.9	$	6.8	$	9.3	$	—	$	20.0
Depreciation/amortization	$	10.2	$	1.0	$	3.1	$	0.8	$	15.1
Segment profit	$	40.6	$	5.3	$	11.4	$	3.1	$	60.4
	Six Months Ended June 30,
(in millions of U.S. dollars)	Shared Mail		Neighborhood Targeted		FSI		International, Digital Media & Services		Total
2011
Revenues from external customers	$	659.8	$	178.9	$	178.4	$	95.1	$	1,112.2
Intersegment revenues	$	8.6	$	22.2	$	19.6	$	0.2	$	50.6
Depreciation/amortization	$	19.5	$	2.0	$	6.0	$	3.6	$	31.1
Segment profit	$	89.8	$	2.7	$	15.7	$	11.8	$	120.0
2010
Revenues from external customers	$	639.2	$	216.1	$	192.1	$	82.6	$	1,130.0
Intersegment revenues	$	7.4	$	12.4	$	18.9	$	—	$	38.7
Depreciation/amortization	$	20.9	$	2.0	$	6.2	$	1.6	$	30.7
Segment profit	$	72.2	$	12.4	$	19.7	$	8.6	$	112.9

The following table provides reconciliations of total segment profit to earnings from operations for the indicated periods:

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions of U.S. dollars)	2011		2010		2011		2010
Total segment profit	$	63.2	$	60.4	$	120.0	$	112.9
Unallocated amounts:
Gain from litigation settlement		—		—		—		490.1
Earnings from operations	$	63.2	$	60.4	$	120.0	$	603.0

Domestic and foreign revenues were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions of U.S. dollars)	2011		2010		2011		2010
United States	$	550.3	$	566.2	$	1,085.2	$	1,102.9
Foreign		14.9		13.8		27.0		27.1
Revenues	$	565.2	$	580.0	$	1,112.2	$	1,130.0

Domestic and foreign long-lived assets (property, plant and equipment, net) were as follows:

(in millions of U.S. dollars)	June 30, 2011		December 31, 2010
United States	$	153.9	$	166.8
Foreign		8.5		8.8
Property, plant and equipment, net	$	162.4	$	175.6