Segment Information

9 Months Ended

Sep. 30, 2013

Segment Information

17. Segment Information

Our three operating segments, which are also our reportable segments, are: North America, EMEA (Europe/Middle East/Africa), and APSA (Asia-Pacific/South America). Our reportable segments are based on internal organization of the business used by management for making operating decisions and assessing performance. Key countries/markets included in North America are the United States, Canada, Virgin Islands, and Mexico. Key countries/markets included in EMEA are Germany, Spain, the United Kingdom, Russia, Turkey, Ireland, Italy, Hungary, Czech Republic, Romania, South Africa, North America Duty Free, and Europe Travel Retail. Key countries/markets included in APSA are Australia, New Zealand, Southeast Asia, China, Brazil, India, South Korea, and Japan.

Each operating segment derives revenues from the sale of distilled spirits. The measure of segment profitability regularly reviewed by the chief operating decision maker is operating income excluding charges and gains that management believes are not considered indicative of the segments’ underlying operating performance; consequently segment results presented in accordance with GAAP exclude such items. Charges/gains excluded from segment results include asset impairment charges, restructuring charges, other charges related to restructuring initiatives that cannot be reported as restructuring charges under GAAP, acquisition and integration-related costs, gains on the sale of brands and related assets, business separation costs, and certain other items which we believe are not considered indicative of our ongoing performance.

Financial information for each segment is presented in the tables below (in millions):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Net sales:
North America	$	374.5		$	379.8		$	1,145.5		$	1,056.5
EMEA		124.5			116.2			345.6			333.8
APSA		99.7			130.7			316.7			360.2
Consolidated net sales	$	598.7		$	626.7		$	1,807.8		$	1,750.5
Income from continuing operations before income taxes:
North America	$	99.9		$	105.5		$	343.7		$	308.5
EMEA		27.5			27.8			74.8			68.1
APSA		20.6			31.2			59.2			75.5
Total segment income	$	148.0		$	164.5		$	477.7		$	452.1
Deduct:
Business separation costs (Note 6)		—			—			—			13.8
Gain on sale of brands and related assets (Note 3)		—			—			(13.2	)		—
Restructuring charges (Note 7)		11.2			1.0			12.0			3.7
Other (credits) charges (Note 7)		(8.1	)		1.6			(3.3	)		17.9
Consolidated operating income	$	144.9		$	161.9		$	482.2		$	416.7
Interest expense		20.9			28.5			73.0			79.9
Loss on early extinguishment of debt (Note 11)		13.8			—			56.9			—
Other income		(0.3	)		(1.9	)		(2.5	)		(30.3	)
Income from continuing operations before income tax	$	110.5		$	135.3		$	354.8		$	367.1

As a result of the errors described in Note 1 above, our segment results presented above for the 2012 periods are revised from previously reported amounts as follows: North America net sales and operating income decreased by $0.3 million and $0.3 million in the three months ended September 30, 2012, and $3.0 million and $1.3 million in the nine months ended September 30, 2012; EMEA net sales and operating income decreased by $0.3 million and $0.1 million in the three months ended September 30, 2012, and $1.7 million and $0.6 million in the nine months ended September 30, 2012; and, APSA net sales and operating income decreased by $0.2 million and $0.1 million in the three months ended September 30, 2012 and $1.6 million and $0.6 million in the nine months ended September 30, 2012.

None of these errors were considered significant to the results of the segments except for the cumulative correction of prior period items, which resulted in the retrospective revision of our results.