Annual report pursuant to Section 13 and 15(d)

Business Segment Information

v2.4.0.6
Business Segment Information
 12 Months Ended
Dec. 31, 2011
Business Segment Information [Abstract]  
Business Segment Information

Note Q — Business Segment Information

VF's businesses are grouped by 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 business segments, as described below:

 

  •  

Outdoor & Action Sports — Outerwear and action sports apparel and footwear, backpacks, bags, and technical equipment

 

  •  

Jeanswear — Jeanswear and related products

 

  •  

Imagewear — Occupational apparel and licensed apparel

 

  •  

Sportswear — Fashion sportswear

 

  •  

Contemporary Brands — Premium lifestyle apparel

 

  •  

Other — Primarily VF Outlets

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. Common costs such as information systems processing, retirement benefits and insurance are allocated to the coalitions based on appropriate metrics such as usage or employment.

Corporate costs, (other than allocated costs directly related to the coalitions), impairment charges and net interest expense are not controlled by coalition management and therefore are excluded from the Coalition Profit performance measure used for internal management reporting. Corporate and Other Expenses consists of corporate headquarters expenses that are not allocated to the coalitions (including compensation and benefits of corporate management and staff, certain legal and professional fees, and administrative and general) and other expenses related to but not allocated to the coalitions for internal management reporting (including a portion of defined benefit pension costs, development costs for management information systems, costs of maintaining and enforcing certain of VF's trademarks, adjustments for the LIFO method of inventory valuation (prior to 2011) and miscellaneous consolidating adjustments). Defined benefit pension plans in the United States are centrally managed. The current year service cost component of pension cost is allocated to the coalitions, while other cost components are reported in Corporate and Other.

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 include corporate facilities, investments held in trust for deferred compensation plans and information systems assets.

Financial information for VF's reportable segments is as follows:

 

     2011     2010     2009  
     In thousands  

Coalition revenues:

       

Outdoor & Action Sports

    $ 4,561,998      $ 3,204,657      $ 2,806,126   

Jeanswear

      2,731,770        2,537,591        2,522,459   

Imagewear

      1,025,214        909,402        865,472   

Sportswear

      543,515        497,773        498,317   

Contemporary Brands

      485,142        438,741        417,742   

Other

      111,593        114,425        110,170   
  

 

 

    

 

 

    

 

 

  

Total revenues

    $ 9,459,232      $ 7,702,589      $ 7,220,286   
  

 

 

    

 

 

    

 

 

  

Coalition profit:

       

Outdoor & Action Sports(a)

    $ 828,228      $ 636,720      $ 492,889   

Jeanswear

      413,187        431,942        370,886   

Imagewear

      145,655        111,174        87,489   

Sportswear

      56,312        52,354        51,993   

Contemporary Brands

      35,860        14,046        50,844   

Other

      (1,024 )      (61 )      1,194   
  

 

 

    

 

 

    

 

 

  

Total coalition profit

      1,478,218        1,246,175        1,055,295   

Impairment of goodwill and trademarks(b)

      —        (201,738 )      (121,953 ) 

Corporate and other expenses(a)

      (240,675 )      (218,823 )      (194,997 ) 

Interest, net

      (72,800 )      (75,402 )      (83,672 ) 
  

 

 

    

 

 

    

 

 

  

Income before income taxes

    $ 1,164,743      $ 750,212      $ 654,673   
  

 

 

    

 

 

    

 

 

  

 

(a) 2011 amounts include $33.5 million of expenses related to the acquisition of Timberland, reported in: Outdoor & Action Sports - $23.7 million and Corporate - $9.8 million. See Note B.

 

(b) Goodwill and trademark impairment charges totaling $201.7 million in 2010 related to Contemporary Brands and totaling $122.0 million in 2009 related to: Outdoor & Action Sports - $63.5 million and Sportswear - $58.5 million. See Notes F, G, and T.

 

     2011      2010      2009  
     In thousands  

Coalition assets:

         

Outdoor & Action Sports

    $ 1,762,774       $ 954,441       $ 870,761   

Jeanswear

      898,733         841,865         849,888   

Imagewear

      356,782         319,179         320,889   

Sportswear

      128,823         127,567         106,911   

Contemporary Brands

      195,528         181,399         190,105   

Other

      63,262         61,065         62,220   
  

 

 

     

 

 

     

 

 

  

Total coalition assets

      3,405,902         2,485,516         2,400,774   

Cash and equivalents

      341,228         792,239         731,549   

Intangible assets and goodwill

      4,981,923         2,657,563         2,902,801   

Deferred income taxes

      136,021         106,743         76,141   

Corporate assets

      448,052         415,495         362,598   
  

 

 

     

 

 

     

 

 

  

Consolidated assets

    $ 9,313,126       $ 6,457,556       $ 6,473,863   
  

 

 

     

 

 

     

 

 

  

Capital expenditures:

         

Outdoor & Action Sports

    $ 90,381       $ 49,658       $ 34,681   

Jeanswear

      21,076         19,906         17,547   

Imagewear

      5,318         2,843         2,131   

Sportswear

      5,902         3,770         1,776   

Contemporary Brands

      16,534         10,975         15,535   

Other

      5,370         5,627         4,412   

Corporate

      26,313         18,861         9,777   
  

 

 

     

 

 

     

 

 

  
   $ 170,894       $ 111,640       $ 85,859   
  

 

 

     

 

 

     

 

 

  

Depreciation and amortization expense:

         

Outdoor & Action Sports

    $ 83,559       $ 62,563       $ 54,467   

Jeanswear

      41,207         34,304         39,297   

Imagewear

      11,513         12,055         12,438   

Sportswear

      12,072         12,155         12,821   

Contemporary Brands

      26,590         32,864         26,139   

Other

      4,122         3,638         3,530   

Corporate

      19,672         15,817         21,760   
  

 

 

     

 

 

     

 

 

  
   $ 198,735       $ 173,396       $ 170,452   
  

 

 

     

 

 

     

 

 

  

Supplemental information (with revenues by geographic area based on the location of the customer) is as follows:

 

     2011      2010      2009  
     In thousands  

Total revenues:

         

United States

    $ 6,220,933       $ 5,411,533       $ 5,078,065   

Foreign, primarily Europe

      3,238,299         2,291,056         2,142,221   
  

 

 

     

 

 

     

 

 

  
   $ 9,459,232       $ 7,702,589       $ 7,220,286   
  

 

 

     

 

 

     

 

 

  

Property, plant and equipment:

         

United States

    $ 521,838       $ 446,718       $ 449,091   

Other foreign, primarily Europe

      215,613         156,190         165,087   
  

 

 

     

 

 

     

 

 

  
   $ 737,451       $ 602,908       $ 614,178   
  

 

 

     

 

 

     

 

 

  

Sales to Wal-Mart Stores, Inc., primarily from the Jeanswear Coalition, comprised 9% of Total Revenues in 2011, 10% in 2010 and 11% in 2009.