VF Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

REPORTABLE SEGMENT INFORMATION

REPORTABLE SEGMENT INFORMATION

9 Months Ended

Dec. 29, 2018

In light of recently completed portfolio management actions and organizational realignments, the Company realigned its internal reporting structure in the first quarter of Fiscal 2019 to reflect the organizational changes to better support and assess the operations of the business. The chief operating decision maker allocates resources and assesses performance based on a global brand view which represents VF's operating segments. The operating segments have been evaluated and combined into reportable segments because they have met the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance. Based on this assessment, the Company's reportable segments have been identified as: Outdoor, Active, Work and Jeans.

Below is a description of VF's reportable segments and the primary brands included within each:



REPORTABLE SEGMENT		PRIMARY BRANDS
Outdoor - Outdoor apparel, footwear and equipment		The North Face^®
		Timberland^® (excluding Timberland PRO^®)
		Smartwool^®
		Icebreaker^®
		Altra^®

Active - Active apparel, footwear and accessories		Vans^®
		Kipling^®
		Napapijri^®
		JanSport^®
		Reef^®
		Eastpak^®
		Eagle Creek^®

Work - Work and work-inspired lifestyle apparel, footwear and occupational apparel		Dickies^®
		Bulwark^®
		Red Kap^®
		Timberland PRO^®
		Wrangler^® RIGGS
		Walls^®
		Terra^®
		Kodiak^®
		Horace Small^®

Jeans - Denim and casual apparel		Wrangler^® (excluding Wrangler^® RIGGS)
		Lee^®
		Rock and Republic^®

Other - included in the tables below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Includes sales of non-VF products at VF Outlet^® stores and results from transition services related to the sales of the Nautica^®and Reef^® brand businesses.

In the tables below, the Company has recast historical financial information to reflect the new reportable segments. The recast historical information has no impact on the Company's previously reported consolidated financial statements.

The results of Williamson-Dickie have been included in the Work segment since the October 2, 2017 acquisition date. The results of Kipling North America, which were previously included in the former Sportswear segment, have been included in the Active segment for all periods presented. The results of Icebreaker and Altra have been included in the Outdoor segment since their acquisition dates of April 3, 2018 and June 1, 2018, respectively.

The results of the Van Moer business have been included in the Work segment through the October 5, 2018 date of sale. The results of the Reef^® brand business have been included in the Active segment through the October 26, 2018 date of sale.

The primary financial measures used by management to evaluate the financial results of VF's reportable segments are segment revenues and segment profit. Segment profit comprises the operating income and other income (expense), net line items of each segment.

Accounting policies used for internal management reporting at the individual segments are consistent with those in Note A of the 2017 Form 10-K, except as stated below. Corporate costs (other than common costs allocated to the segments), impairment charges and net interest expense are not controlled by segment management and therefore are excluded from the measurement of segment profit. Common costs such as information systems processing, retirement benefits and insurance are allocated from corporate costs to the segments based on appropriate metrics such as usage or employment. Corporate costs that are not allocated to the segments 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 component of pension costs is allocated to the segments, while the remaining pension cost components are reported in corporate and other expenses.

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



	Three Months Ended December						Nine Months Ended December

(In thousands)	2018			2017			2018			2017
Segment revenues:
Outdoor	$	1,612,605		$	1,456,654		$	3,647,708		$	3,373,906
Active	1,142,580			983,983			3,579,478			2,982,889
Work	493,587			482,827			1,409,016			899,746
Jeans	657,853			692,506			1,894,516			1,963,293
Other	33,534			33,313			104,973			91,003
Total segment revenues	$	3,940,159		$	3,649,283		$	10,635,691		$	9,310,837
Segment profit:
Outdoor	$	338,009		$	275,509		$	512,635		$	464,087
Active	272,862			198,872			893,110			656,592
Work	62,491			57,509			175,652			125,928
Jeans	67,804			93,196			252,511			292,017
Other	(151		)	209			2,548			(895		)
Total segment profit	741,015			625,295			1,836,456			1,537,729
Corporate and other expenses ^(a)	(150,884		)	(142,578		)	(411,495		)	(324,939		)
Interest expense, net	(23,847		)	(22,548		)	(73,244		)	(65,692		)
Income from continuing operations before income taxes	$	566,284		$	460,169		$	1,351,717		$	1,147,098


^(a)	Certain corporate overhead and other costs of $4.1 million and $12.5 million for the three and nine-month periods ended December 2017, respectively, previously allocated to the former Sportswear and Outdoor & Action Sports segments for segment reporting purposes, have been reallocated to continuing operations as discussed in Note 5.