Segment Information

6 Months Ended

Jul. 01, 2012

Segment Information

Segment Information

7. Segment Information

The Company operates in three geographic segments: North America, EMEA, and Asia. Each of these segments is managed separately and has separate financial results that are reviewed by the Company’s chief operating decision-maker. All intercompany sales transactions have been eliminated. Sales by region are based upon location of the entity recording the sale. The accounting policies for each segment are the same as those described in the summary of significant accounting policies.

The following is a summary of the Company’s significant accounts and balances by segment, reconciled to the consolidated totals:

	Second Quarter Ended						Six Months Ended
	July 1, 2012			July 3, 2011			July 1, 2012			July 3, 2011
	(in millions)
Net Sales
North America	$	221.8		$	212.0		$	431.8		$	414.1
EMEA	142.8			157.8			292.0			281.8
Asia	6.5			5.9			11.5			9.7
Consolidated net sales	$	371.1		$	375.7		$	735.3		$	705.6
Operating income (loss)
North America	$	26.7		$	26.3		$	46.9		$	53.0
EMEA	12.0			6.9			24.8			16.6
Asia	2.1			0.9			3.5			1.7
Subtotal reportable segments	40.8			34.1			75.2			71.3
Corporate (*)	(7.1		)	(7.5		)	(14.6		)	(21.8		)
Consolidated operating income	33.7			26.6			60.6			49.5
Interest income	0.2			0.2			0.4			0.5
Interest expense	(6.1		)	(6.7		)	(12.3		)	(12.6		)
Other	—			(0.6		)	0.9			(0.7		)
Income from continuing operations before income taxes	27.8			$	19.5		$	49.6		$	36.7
Capital Expenditures
North America	$	1.8		$	1.9		$	4.4		$	5.3
EMEA	2.4			3.2			4.6			6.3
Asia	0.5			0.3			0.6			0.4
Consolidated capital expenditures	$	4.7		$	5.4		$	9.6		$	12.0
Depreciation and Amortization
North America	$	5.2		$	5.2		$	10.0		$	9.6
EMEA	6.8			8.4			14.1			14.8
Asia	0.5			0.5			1.0			1.0
Consolidated depreciation and amortization	$	12.5		$	14.1		$	25.1		$	25.4
Identifiable Assets (at end of period)
North America							$	790.0		$	844.9
EMEA							750.5			948.8
Asia							90.8			85.1
Discontinued operations							—			1.6
Consolidated identifiable assets							$	1,631.3		$	1,880.4
Property, plant and equipment, net (at end of period)
North America							$	73.7		$	83.8
EMEA							123.9			153.1
Asia							14.5			15.3
Consolidated property, plant and equipment, net							$	212.1		$	252.2

*Corporate expenses are primarily for administrative compensation expense, internal controls costs, professional fees, including legal and audit expenses, shareholder services and benefit administration costs. These costs are not allocated to the geographic segments as they are viewed as corporate functions that support all activities.

The above operating segments are presented on a basis consistent with the presentation included in the Company’s December 31, 2011 consolidated financial statements included in its Annual Report on Form 10-K.

The following includes U.S. net sales and U.S. property, plant and equipment of the Company’s North America segment:

	Second Quarter Ended				Six Months Ended
	July 1,  2012		July 3,  2011		July 1,  2012		July 3,  2011
	(in millions)
U.S. net sales	$	199.7	$	192.5	$	389.7	$	375.4
U.S. property, plant and equipment (at end of period)					$	71.6	$	78.6

The following includes intersegment sales for North America, EMEA and Asia:

	Second Quarter Ended				Six Months Ended
	July 1,  2012		July 3,  2011		July 1,  2012		July 3,  2011
	(in millions)
Intersegment Sales
North America	$	1.2	$	0.8	$	2.6	$	1.7
EMEA	2.0		2.3		4.6		4.2
Asia	35.3		37.2		66.4		67.9
Intersegment sales	$	38.5	$	40.3	$	73.6	$	73.8

The North America segment includes $14.7 million in assets held for sale at July 1, 2012. The North America segment and the Asia segment include $3.8 million and $6.2 million, respectively, in assets held for sale at July 3, 2011.

The Company sells its products into various end markets around the world and groups net sales to third parties into four product categories.  Because many of the Company’s sales are through distributors and third-party manufacturers’ representatives, a portion of the product categorization is based on management’s understanding of final product use and, as such, allocations have been made to align sales into a product category.  Net sales to third parties for the four product categories are as follows:

	Second Quarter Ended				Six Months Ended
	July 1,  2012		July 3,  2011		July 1,  2012		July 3,  2011
	(in millions)
Net Sales
Residential & commercial flow control	$	211.3	$	199.2	$	412.5	$	365.6
HVAC & gas	106.8		122.1		216.6		235.6
Drains & water re-use	35.0		36.6		68.7		67.7
Water quality	18.0		17.8		37.5		36.7
Consolidated net sales	$	371.1	$	375.7	$	735.3	$	705.6