| 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:
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• Outdoor & Action Sports
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Activity based apparel and footwear, backpacks, bags, and technical
equipment |
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• Jeanswear
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Jeanswear and related products |
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• Imagewear
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Occupational apparel and licensed athletic
apparel |
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• Sportswear
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Fashion sportswear |
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• Contemporary Brands
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Premium lifestyle apparel |
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• Other
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Primarily 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. 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
measurement of coalition profit. 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 registering,
maintaining and enforcing certain of VF’s trademarks,
adjustments for the LIFO method of inventory valuation (prior to
2011) and miscellaneous consolidated costs). 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 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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| |
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2012 |
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2011 |
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|
2010 |
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| |
|
In
thousands |
|
|
Coalition
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outdoor & Action
Sports
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|
$ |
5,866,071 |
|
|
$ |
4,561,998 |
|
|
$ |
3,204,657 |
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Jeanswear
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|
|
2,789,293 |
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2,731,770 |
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|
2,537,591 |
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Imagewear
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|
1,075,677 |
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|
|
1,025,214 |
|
|
|
909,402 |
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Sportswear
|
|
|
577,317 |
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|
|
543,515 |
|
|
|
497,773 |
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Contemporary
Brands
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|
445,960 |
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|
|
485,142 |
|
|
|
438,741 |
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Other
|
|
|
125,537 |
|
|
|
111,593 |
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|
114,425 |
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|
|
|
|
|
|
|
|
|
|
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Total revenues
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$ |
10,879,855 |
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|
$ |
9,459,232 |
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|
$ |
7,702,589 |
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|
|
|
|
|
|
|
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Coalition
profit:
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|
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Outdoor & Action
Sports(a)
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$ |
1,019,425 |
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$ |
828,228 |
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$ |
636,720 |
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Jeanswear
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|
466,960 |
|
|
|
413,187 |
|
|
|
431,942 |
|
|
Imagewear
|
|
|
145,053 |
|
|
|
145,655 |
|
|
|
111,174 |
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Sportswear
|
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|
72,978 |
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|
|
56,312 |
|
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|
52,354 |
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Contemporary
Brands
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|
49,182 |
|
|
|
35,860 |
|
|
|
14,046 |
|
|
Other
|
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|
(232 |
) |
|
|
(1,024 |
) |
|
|
(61 |
) |
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|
|
|
|
|
|
|
|
|
|
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Total coalition
profit
|
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|
1,753,366 |
|
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|
1,478,218 |
|
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|
1,246,175 |
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Impairment of goodwill and
trademarks(b)
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|
— |
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|
— |
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|
|
(201,738 |
) |
|
Corporate and other
expenses(a)
|
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|
(241,239 |
) |
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|
(240,675 |
) |
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|
(218,823 |
) |
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Interest, net
|
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|
(90,252 |
) |
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|
(72,800 |
) |
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(75,402 |
) |
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|
|
|
|
|
|
|
|
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Income before income
taxes
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$ |
1,421,875 |
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$ |
1,164,743 |
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$ |
750,212 |
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|
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| (a) |
2012 amounts included $30.8 million of expenses related to the
acquisition of Timberland, reported in: Outdoor & Action
Sports — $22.1 million and Corporate — $8.7 million.
2011 related amounts included $33.5 million of expenses reported
in: Outdoor & Action Sports — $23.7 million and
Corporate — $9.8 million.
|
| (b) |
Goodwill and trademark impairment charges totaling $201.7
million in 2010 related to Contemporary Brands. See Notes G and
T.
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| |
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2012 |
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2011 |
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2010 |
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In
thousands |
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Coalition
assets:
|
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|
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|
|
|
|
|
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Outdoor & Action
Sports
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$ |
1,944,822 |
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$ |
1,762,774 |
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$ |
954,441 |
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Jeanswear
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|
870,302 |
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|
898,733 |
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|
841,865 |
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Imagewear
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|
341,588 |
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|
356,782 |
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|
319,179 |
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Sportswear
|
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|
131,393 |
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|
128,823 |
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|
127,567 |
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Contemporary
Brands
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|
172,564 |
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|
195,528 |
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|
181,399 |
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Other
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|
66,774 |
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|
63,262 |
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|
61,065 |
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Total coalition
assets
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3,527,443 |
|
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3,405,902 |
|
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2,485,516 |
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Cash and
equivalents
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|
597,461 |
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|
341,228 |
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|
792,239 |
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Intangible assets and
goodwill
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4,926,815 |
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4,981,923 |
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2,657,563 |
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Deferred income
taxes
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|
167,685 |
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|
136,021 |
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|
106,743 |
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Corporate assets
|
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|
413,617 |
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|
448,052 |
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|
415,495 |
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Consolidated
assets
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$ |
9,633,021 |
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$ |
9,313,126 |
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$ |
6,457,556 |
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|
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Capital
expenditures:
|
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|
|
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Outdoor & Action
Sports
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$ |
155,522 |
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$ |
90,381 |
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$ |
49,658 |
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Jeanswear
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|
67,239 |
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|
21,076 |
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|
19,906 |
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Imagewear
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4,967 |
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|
5,318 |
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|
2,843 |
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Sportswear
|
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|
5,279 |
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|
5,902 |
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|
3,770 |
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Contemporary
Brands
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6,766 |
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|
16,534 |
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10,975 |
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Other
|
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|
5,418 |
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|
5,370 |
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|
5,627 |
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Corporate
|
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6,749 |
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|
26,313 |
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|
18,861 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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$ |
251,940 |
|
|
$ |
170,894 |
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$ |
111,640 |
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|
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|
|
|
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Depreciation and
amortization expense:
|
|
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|
|
|
|
|
|
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|
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Outdoor & Action
Sports
|
|
$ |
114,483 |
|
|
$ |
83,559 |
|
|
$ |
62,563 |
|
|
Jeanswear
|
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|
39,520 |
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|
41,207 |
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|
34,304 |
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Imagewear
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|
11,733 |
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|
11,513 |
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|
12,055 |
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Sportswear
|
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|
11,639 |
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|
12,072 |
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|
12,155 |
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Contemporary
Brands
|
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|
24,915 |
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|
26,590 |
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|
32,864 |
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Other
|
|
|
5,517 |
|
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|
4,122 |
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|
3,638 |
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Corporate
|
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|
30,149 |
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|
|
19,672 |
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|
15,817 |
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|
|
|
|
|
|
|
|
|
|
|
|
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|
$ |
237,956 |
|
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$ |
198,735 |
|
|
$ |
173,396 |
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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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| |
|
2012 |
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2011 |
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2010 |
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In
thousands |
|
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Total revenues:
|
|
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|
|
|
|
|
|
|
|
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|
United States
|
|
$ |
6,903,269 |
|
|
$ |
6,220,933 |
|
|
$ |
5,411,533 |
|
|
Foreign, primarily
Europe
|
|
|
3,976,586 |
|
|
|
3,238,299 |
|
|
|
2,291,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,879,855 |
|
|
$ |
9,459,232 |
|
|
$ |
7,702,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$ |
513,282 |
|
|
$ |
521,838 |
|
|
$ |
446,718 |
|
|
Foreign, primarily
Europe
|
|
|
314,936 |
|
|
|
215,613 |
|
|
|
156,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
828,218 |
|
|
$ |
737,451 |
|
|
$ |
602,908 |
|
|
|
|
|
|
|
|
|
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Sales to
Wal-Mart Stores, Inc., primarily by the Jeanswear Coalition,
comprised 8% of total revenues in 2012, 9% in 2011 and 10% in
2010.
|