Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

v3.6.0.2
Discontinued Operations
 12 Months Ended
Dec. 31, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Discontinued Operations
On August 26, 2016, VF completed the sale of its Contemporary Brands coalition to Delta Galil Industries, Ltd. for $116.9 million. The Contemporary Brands coalition included the businesses of the 7 For All Mankind®, Splendid® and Ella Moss® brands (the “Businesses”) and was previously disclosed as a separate reportable segment of VF.
The transaction resulted in an after-tax loss on sale of $104.4 million which is included in the loss from discontinued operations, net of tax line item in the 2016 Consolidated Statement of Income.
Beginning in the second quarter of 2016, VF has reported the results of the Businesses in the loss from discontinued operations, net of tax line item in the Consolidated Statements of Income and excluded them from continuing operations and segment results. The assets and liabilities of the Businesses at December 2015 have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheet.
Certain corporate overhead costs and interest expense previously allocated to the Contemporary Brands coalition for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. In addition, goodwill and intangible asset impairment charges related to the Contemporary Brands coalition, previously excluded from the calculation of coalition profit, were reallocated to discontinued operations. These changes were applied to all periods presented.
VF is providing certain support services under transition services agreements for a limited period of time. These support services did not have a material impact on VF’s 2016 Consolidated Statement of Income.
The following table summarizes the major line items included in the loss from discontinued operations for each of the periods presented.

 
2016
 
2015
 
2014
 
In thousands
Revenues
$
187,821

 
$
344,089

 
$
400,431

Cost of goods sold
85,303

 
158,101

 
175,310

Selling, general and administrative expenses
99,295

 
169,357

 
189,349

Impairment of goodwill and intangible assets
—

 
143,562

 
396,362

Interest income (expense), net
(109
)
 
(642
)
 
(621
)
Other income (expense), net
3

 
627

 
1

Pre-tax income (loss) from discontinued operations
3,117

 
(126,946
)
 
(361,210
)
Pre-tax loss on the disposal of discontinued operations
(154,275
)
 
—

 
—

Total pre-tax loss from discontinued operations
(151,158
)
 
(126,946
)
 
(361,210
)
Income tax benefit
52,737

 
43,408

 
80,966

Loss from discontinued operations, net of tax
$
(98,421
)
 
$
(83,538
)
 
$
(280,244
)

The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented.
 
2016
 
2015
 
In thousands
Accounts receivable, net
$
—

 
$
29,596

Inventories
—

 
56,634

Other current assets, including cash and equivalents
—

 
2,946

Property, plant and equipment
—

 
42,668

Intangible assets
—

 
164,008

Other assets
—

 
3,355

Total assets of discontinued operations(a)
$
—

 
$
299,207

Current portion of long-term debt
$
—

 
$
9,928

Accounts payable
—

 
8,988

Accrued liabilities
—

 
7,102

Other liabilities
—

 
10,915

Total liabilities of discontinued operations(a)
$
—

 
$
36,933

(a) 
Amounts at December 2015 have been classified as current and long-term in the Consolidated Balance Sheet.
The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. The following table summarizes depreciation and amortization, capital expenditures and the significant operating noncash items from discontinued operations for each of the periods presented:
 
2016
 
2015
 
2014
 
In thousands
Depreciation and amortization
$
4,581

 
$
17,673

 
$
24,006

Capital expenditures
719

 
5,663

 
10,308

Impairment of goodwill and intangible assets
—

 
143,562

 
396,362