Annual report pursuant to Section 13 and 15(d)

REPORTABLE SEGMENT INFORMATION

v3.20.1
REPORTABLE SEGMENT INFORMATION
 12 Months Ended
Mar. 28, 2020
Segment Reporting [Abstract]  
REPORTABLE SEGMENT INFORMATION REPORTABLE SEGMENT INFORMATION

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 and Work.
Below is a description of VF's reportable segments and the brands included within each:
REPORTABLE SEGMENT
 
BRANDS
Outdoor - Outdoor apparel, footwear and equipment
 
The North Face®
 
 
Timberland®
 
 
Icebreaker®
 
 
Smartwool®
 
 
Altra®
Active - Active apparel, footwear and accessories
 
Vans®
 
 
Kipling®
 
 
Napapijri®
 
 
Eastpak®
 
 
JanSport®
 
 
Eagle Creek®
Work - Work and work-inspired lifestyle apparel and footwear
 
Dickies®
 
 
Timberland PRO®
Other - included in the tables below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other includes results related to the sale of non-VF products and transition services primarily related to the sale of the Nautica® brand business.

The Company continuously assesses the composition of its portfolio to ensure it is aligned with its strategic objectives and positioned to maximize growth and return to shareholders. In doing so, it evaluates whether changes may need to be made to our internal reporting structure to better support and assess the operations of our business going forward. If changes are made, we will assess the resulting effect on our reportable segments, operating segments and reporting units, if any.
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 1, 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 cost component of pension cost is allocated to the segments, while the remaining pension cost components are reported in corporate and other expenses.
Segment assets, for internal management purposes, are those used directly in or resulting from the operations of each business, which are accounts receivable and inventories. Segment assets included in the Other category represent balances related to transition services and other corporate activities, and are provided for purposes of reconciliation as the Other category is not considered a reportable segment. Total expenditures for additions to long-lived assets are not disclosed as this information is not regularly provided to the chief operating decision maker at the segment level.
Financial information for VF’s reportable segments is as follows:
 
 
Year Ended March
 
Three Months
Ended March
(Transition Period)
 
Year Ended December
 
 
 
 
 
 
 
 
 
 
(In thousands)
 
2020
 
 
2019
 
2018
 
2017
Segment revenues:
 
 
 
 
 
 
 
 
 
Outdoor
 
$
4,643,956

 
 
$
4,649,024

 
$
888,039

 
$
4,208,958

Active
 
4,919,427

 
 
4,721,792

 
1,071,598

 
3,791,737

Work
 
886,419

 
 
885,748

 
221,909

 
393,989

Other
 
38,754

 
 
10,323

 
—

 
—

Total segment revenues
 
$
10,488,556

 
 
$
10,266,887

 
$
2,181,546

 
$
8,394,684

Segment profit:
 
 
 
 
 
 
 
 
 
Outdoor
 
$
516,089

 
 
$
544,425

 
$
44,673

 
$
537,543

Active
 
1,136,821

 
 
1,125,709

 
237,620

 
805,843

Work
 
50,383

 
 
67,379

 
11,546

 
42,612

Other
 
(6,485
)
 
 
3,244

 
—

 
—

Total segment profit
 
1,696,808

 
 
1,740,757

 
293,839

 
1,385,998

Impairment of goodwill
 
(323,223
)
 
 
—

 
—

 
—

Corporate and other expenses (a)
 
(514,430
)
 
 
(609,714
)
 
(139,941
)
 
(509,147
)
Interest expense, net
 
(72,175
)
 
 
(92,730
)
 
(22,582
)
 
(88,972
)
Loss on debt extinguishment
 
(59,772
)
 
 
—

 
—

 
—

Income from continuing operations before income taxes
 
$
727,208

 
 
$
1,038,313

 
$
131,316

 
$
787,879


(a) 
Certain corporate overhead and other costs of $25.2 million, $105.7 million, $33.6 million and $120.4 million during the years ended March 2020 and March 2019, the three months ended March 2018 and the year ended December 2017, respectively, previously allocated to the Work segment and the former Jeans, Sportswear, Imagewear and Outdoor & Action Sports segments for segment reporting purposes, have been reallocated to continuing operations as discussed in Note 4.
(In thousands)
 
March 2020
 
 
March 2019
Segment assets:
 
 
 
 
 
Outdoor
 
$
1,182,148

 
 
$
1,108,274

Active
 
1,013,154

 
 
981,033

Work
 
375,653

 
 
356,119

Other
 
31,008

 
 
100,301

Total segment assets
 
2,601,963

 
 
2,545,727

Cash and equivalents
 
1,369,028

 
 
402,226

Property, plant and equipment, net
 
954,406

 
 
876,093

Intangible assets and goodwill
 
3,010,564

 
 
3,399,141

Operating lease right-of-use assets
 
1,273,514

 
 
—

Other assets
 
1,312,637

 
 
1,194,094

Assets of discontinued operations
 
611,139

 
 
1,939,504

Consolidated assets
 
$
11,133,251

 
 
$
10,356,785


 
 
Year Ended March
 
Three Months
Ended March
(Transition Period)
 
Year Ended December
 
 
 
 
 
 
 
 
 
 
(In thousands)
 
2020
 
 
2019
 
2018
 
2017
Depreciation and amortization expense:
 
 
 
 
 
 
 
 
 
Outdoor
 
$
91,657

 
 
$
82,259

 
$
16,998

 
$
86,838

Active
 
80,562

 
 
73,395

 
18,953

 
70,219

Work
 
14,856

 
 
21,492

 
7,524

 
7,219

Corporate
 
80,544

 
 
78,583

 
16,119

 
74,044

 
 
$
267,619

 
 
$
255,729

 
$
59,594

 
$
238,320


Supplemental information (with revenues by geographic area based on the origin of the shipment) is as follows:
 
 
Year Ended March
 
Three Months
Ended March
(Transition Period)
 
Year Ended December
 
 
 
 
 
 
 
 
 
 
(In thousands)
 
2020
 
 
2019
 
2018
 
2017
Total revenues:
 
 
 
 
 
 
 
 
 
U.S.
 
$
5,520,317

 
 
$
5,346,225

 
$
1,018,024

 
$
4,311,104

Foreign, primarily Europe
 
4,968,239

 
 
4,920,662

 
1,163,522

 
4,083,580

 
 
$
10,488,556

 
 
$
10,266,887

 
$
2,181,546

 
$
8,394,684

Property, plant and equipment:
 
 
 
 
 
 
 
 
 
U.S.
 
$
608,058

 
 
$
493,531

 
 
 
 
Foreign, primarily Europe
 
346,348

 
 
382,562

 
 
 
 
 
 
$
954,406

 
 
$
876,093

 
 
 



No single customer accounted for 10% or more of the Company’s total revenues in the years ended March 2020 and 2019, the three months ended March 2018 and the year ended December 2017.