SEGMENT REPORTING

12 Months Ended

Dec. 31, 2012

SEGMENT REPORTING

SEGMENT REPORTING

Our segments meeting the quantitative thresholds to be considered reportable are Shared Mail, Neighborhood Targeted and 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 Brand.net, a Valassis Digital Company, NCH Marketing Services, Inc., our coupon clearing and analytics business, Valassis Canada, Inc., Promotion Watch and our in-store business. 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 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. Assets are not allocated to reportable segments and are not used to assess the performance of a reportable segment.

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

	Year Ended December 31,
(in millions of U.S. dollars)	Shared Mail		Neighborhood Targeted			FSI		International, Digital Media & Services		Total
2012
Revenues from external customers	$	1,365.6	$	326.4		$	283.9	$	186.2	$	2,162.1
Intersegment revenues	$	16.2	$	58.3		$	40.1	$	—	$	114.6
Depreciation/amortization	$	31.8	$	4.3		$	12.8	$	9.1	$	58.0
Segment profit (loss)	$	201.4	$	(1.0	)	$	21.9	$	8.3	$	230.6
2011
Revenues from external customers	$	1,350.8	$	374.7		$	316.0	$	194.5	$	2,236.0
Intersegment revenues	$	16.8	$	50.4		$	39.2	$	0.4	$	106.8
Depreciation/amortization	$	36.8	$	4.2		$	12.7	$	7.0	$	60.7
Segment profit	$	191.9	$	7.7		$	14.1	$	24.3	$	238.0
2010
Revenues from external customers	$	1,307.2	$	479.9		$	367.6	$	178.8	$	2,333.5
Intersegment revenues	$	16.8	$	27.6		$	39.7	$	0.4	$	84.5
Depreciation/amortization	$	41.0	$	4.3		$	12.8	$	3.3	$	61.4
Segment profit	$	156.8	$	20.6		$	24.9	$	22.7	$	225.0

The following table provides reconciliations of total segment profit to earnings from operations for the indicated periods (nonoperating expenses are not allocated to reportable segments and are not used to assess the performance of a reportable segment):

	Year Ended December 31,
(in millions of U.S. dollars)	2012			2011			2010
Total segment profit	$	230.6		$	238.0		$	225.0
Unallocated amounts:
Goodwill impairment	(7.6		)	—			—
Intangible asset impairment	—			(7.1		)	—
Restructuring and other postemployment charges	(9.7		)	(6.9		)	—
Gain from litigation settlement	—			—			490.1
Earnings from operations	$	213.3		$	224.0		$	715.1

The $9.7 million of restructuring and other postemployment charges recognized during the year endedDecember 31, 2012 consisted of $5.3 million of severance and related costs and $0.7 million of Brand.net acquisition costs, both of which were included in selling, general and administrative expenses in the consolidated statements of income, and $3.7 million of lease termination, severance, asset impairment and other costs associated with our decision to exit our solo direct mail business and our newspaper polybag advertising and sampling business, which were included in cost of sales in the consolidated statements of income. The results of operations of these businesses were immaterial to our consolidated results of operations for each of the years ended December 31, 2012, 2011 and 2010.

During the year ended December 31, 2011, we recognized $6.9 million of restructuring and other postemployment charges related to the restructuring of certain non-core businesses and the associated costs, including write-offs of impaired assets, the early termination of leases and severance costs, all of which were included in selling, general and administrative expenses in the consolidated statements of income.

Domestic and foreign revenues were as follows:

	Year Ended December 31,
(in millions of U.S. dollars)	2012		2011		2010
United States	$	2,117.5	$	2,182.6	$	2,282.0
Foreign	44.6		53.4		51.5
Revenues	$	2,162.1	$	2,236.0	$	2,333.5

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

	December 31,
(in millions of U.S. dollars)	2012		2011
United States	$	118.1	$	140.7
Foreign	7.7		8.2
Property, plant and equipment, net	$	125.8	$	148.9