| Business Segment Information |
Note P — Business
Segment Information
VF’s
businesses are grouped into product categories, and by brands
within those product categories, for internal financial reporting
used by management. These groupings of businesses within VF are
referred to as “coalitions” and are the basis for
VF’s reportable segments, as described below:
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• Outdoor & Action Sports
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High performance outdoor apparel and footwear, backpacks,
handbags and technical equipment |
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• Jeanswear
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Denim and casual apparel |
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• Imagewear
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Occupational workwear and athletic apparel |
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• Sportswear
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Fashion sportswear apparel and accessories |
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• Contemporary Brands
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Premium denim and lifestyle apparel |
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• Other
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Sales of non-VF products at VF Outlet®
stores |
Management at
each of the coalitions has direct control over and responsibility
for its revenues, operating income and assets, hereinafter termed
“coalition revenues,” “coalition profit”
and “coalition assets,” respectively. VF management
evaluates operating performance and makes investment and other
decisions based on coalition revenues and coalition profit.
Accounting policies used for internal management reporting at the
individual coalitions are consistent with those in Note A, except
as stated below.
Corporate costs
(other than common costs allocated to the coalitions), impairment
charges and net interest expense are not controlled by coalition
management and therefore are excluded from the measurement of
coalition profit. Common costs such as information systems
processing, retirement benefits and insurance are allocated from
corporate costs to the coalitions based on appropriate metrics such
as usage or employment. Corporate costs that are not allocated to
the coalitions consist of corporate headquarters expenses
(including compensation and benefits of corporate management and
staff, certain legal and professional fees, and administrative and
general costs) and other expenses which include a portion of
defined benefit pension costs, development costs for management
information systems, costs of registering, maintaining and
enforcing certain of VF’s trademarks, and miscellaneous
consolidated costs. Defined benefit pension plans in the U.S. are
centrally managed. The current year service cost component of
pension cost is allocated to the coalitions, while the remaining
pension cost components are reported in corporate and other
expenses.
Coalition
assets, for internal management purposes, are those used directly
in or resulting from the operations of each business unit, such as
accounts receivable, inventories and property, plant and equipment.
Corporate assets primarily include corporate facilities,
investments held in trust for deferred compensation plans and
information systems.
Financial
information for VF’s reportable segments is as
follows:
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2015 |
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2014 |
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2013 |
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| |
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In
thousands |
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Coalition
revenues:
|
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|
|
|
|
|
|
|
|
|
|
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Outdoor & Action
Sports
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$ |
7,400,446 |
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|
$ |
7,198,994 |
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$ |
6,379,167 |
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Jeanswear
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|
2,792,244 |
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2,801,754 |
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2,810,994 |
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Imagewear
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|
1,082,565 |
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1,104,038 |
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1,065,952 |
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Sportswear
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|
635,056 |
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|
650,203 |
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|
624,693 |
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Contemporary
Brands
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|
344,089 |
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|
400,431 |
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|
415,053 |
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Other
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|
122,344 |
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|
126,741 |
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123,789 |
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Total coalition
revenues
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$ |
12,376,744 |
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$ |
12,282,161 |
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$ |
11,419,648 |
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Coalition
profit:
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Outdoor & Action
Sports (a)
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$ |
1,266,763 |
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$ |
1,312,963 |
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$ |
1,106,384 |
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Jeanswear
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|
535,385 |
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|
527,972 |
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|
544,882 |
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Imagewear
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|
157,959 |
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|
164,352 |
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|
152,203 |
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Sportswear
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|
78,879 |
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|
77,972 |
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|
88,157 |
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Contemporary
Brands
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|
5,845 |
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|
23,420 |
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|
38,825 |
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Other (b)
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15,135 |
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(2,600 |
) |
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(562 |
) |
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Total coalition
profit
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2,059,966 |
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|
2,104,079 |
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|
1,929,889 |
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Impairment of goodwill and
intangible assets (c)
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|
(143,562 |
) |
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(396,362 |
) |
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— |
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Corporate and other
expenses
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(253,753 |
) |
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(275,537 |
) |
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(286,767 |
) |
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Interest expense,
net
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(82,262 |
) |
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(79,814 |
) |
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(80,632 |
) |
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Income before income
taxes
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$ |
1,580,389 |
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$ |
1,352,366 |
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$ |
1,562,490 |
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| (a) |
Includes Timberland acquisition-related expenses of $10.7
million in 2013.
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| (b) |
Includes a $16.6 million gain recognized on the sale of a VF
Outlet®
location in 2015.
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| (c) |
Reflects impairment charges in 2015 and 2014 related to the
Contemporary Brands coalition. See Notes E, F and S for additional
information.
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2015 |
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2014 |
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2013 |
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In
thousands |
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Coalition
assets:
|
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Outdoor & Action
Sports
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$ |
2,436,788 |
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$ |
2,211,232 |
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$ |
2,133,447 |
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Jeanswear
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|
951,411 |
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|
904,933 |
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943,011 |
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Imagewear
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366,062 |
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|
349,254 |
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334,864 |
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Sportswear
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140,458 |
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147,091 |
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|
156,107 |
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Contemporary
Brands
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|
145,265 |
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172,687 |
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187,116 |
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Other
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|
63,162 |
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|
63,549 |
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74,043 |
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Total coalition
assets
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4,103,146 |
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3,848,746 |
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3,828,588 |
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Cash and
equivalents
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|
945,605 |
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971,895 |
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|
776,403 |
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Intangible assets and
goodwill
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3,901,026 |
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4,258,508 |
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4,981,951 |
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Deferred income
taxes
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|
39,246 |
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49,431 |
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|
50,332 |
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Corporate assets
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650,519 |
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|
716,720 |
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|
532,005 |
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Consolidated
assets
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$ |
9,639,542 |
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$ |
9,845,300 |
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$ |
10,169,279 |
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Capital
expenditures:
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Outdoor & Action
Sports
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$ |
166,267 |
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$ |
111,020 |
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$ |
139,428 |
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Jeanswear
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31,844 |
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|
31,586 |
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|
49,763 |
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Imagewear
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6,959 |
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|
6,356 |
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|
3,793 |
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Sportswear
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8,771 |
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22,814 |
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|
6,074 |
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Contemporary
Brands
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5,663 |
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10,308 |
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|
13,679 |
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Other
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|
2,679 |
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|
2,489 |
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|
3,953 |
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Corporate
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32,318 |
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49,504 |
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54,463 |
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$ |
254,501 |
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$ |
234,077 |
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$ |
271,153 |
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Depreciation and
amortization expense:
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Outdoor & Action
Sports
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$ |
129,986 |
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$ |
131,166 |
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$ |
122,385 |
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Jeanswear
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|
41,823 |
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43,189 |
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|
41,742 |
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Imagewear
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11,608 |
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|
11,602 |
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|
11,481 |
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Sportswear
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15,358 |
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14,334 |
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|
12,195 |
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Contemporary
Brands
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17,673 |
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24,006 |
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|
24,309 |
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Other
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|
4,510 |
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|
5,231 |
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|
4,608 |
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Corporate
|
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|
51,117 |
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|
45,355 |
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36,553 |
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$ |
272,075 |
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$ |
274,883 |
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$ |
253,273 |
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Supplemental
information (with revenues by geographic area based on the location
of the customer) is as follows:
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2015 |
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2014 |
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2013 |
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In
thousands |
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Total revenues:
|
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U.S.
|
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$ |
7,883,758 |
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$ |
7,574,546 |
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$ |
7,124,781 |
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|
Foreign, primarily
Europe
|
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|
4,492,986 |
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|
4,707,615 |
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|
4,294,867 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
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$ |
12,376,744 |
|
|
$ |
12,282,161 |
|
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$ |
11,419,648 |
|
|
|
|
|
|
|
|
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|
|
|
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Property, plant and
equipment:
|
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|
|
|
|
|
|
|
|
|
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|
U.S.
|
|
$ |
631,937 |
|
|
$ |
577,669 |
|
|
$ |
549,420 |
|
|
Foreign, primarily
Europe
|
|
|
356,222 |
|
|
|
364,512 |
|
|
|
383,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
988,159 |
|
|
$ |
942,181 |
|
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$ |
932,792 |
|
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No single
customer accounted for 10% or more of the Company’s total
revenues in 2015, 2014 and 2013.
|