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Consolidating Financial Information
9 Months Ended
Sep. 28, 2013
Text Block [Abstract]  
Consolidating Financial Information
Consolidating Financial Information
In accordance with the indenture governing the Company’s $250,000 8% Senior Notes issued on December 10, 2009 and the indenture governing the Company’s $1,000,000 6.375% Senior Notes issued on November 9, 2010, as supplemented from time to time (together, the “Indentures”), certain of the Company’s subsidiaries have guaranteed the Company’s obligations under the 8% Senior Notes and the 6.375% Senior Notes, respectively. The following presents the condensed consolidating financial information separately for:
(i) Parent Company, the issuer of the guaranteed obligations. Parent Company includes Hanesbrands Inc. and its 100% owned operating divisions which are not legal entities, and excludes its subsidiaries which are legal entities;
(ii) Guarantor subsidiaries, on a combined basis, as specified in the Indentures;
(iii) Non-guarantor subsidiaries, on a combined basis;
(iv) Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Parent Company, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate intercompany profit in inventory, (c) eliminate the investments in the Company’s subsidiaries and (d) record consolidating entries; and
(v) The Company, on a consolidated basis.
The 8% Senior Notes and the 6.375% Senior Notes are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary, each of which is 100% owned, directly or indirectly, by Hanesbrands Inc. A guarantor subsidiary’s guarantee can be released in certain customary circumstances. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use by the Parent Company and guarantor subsidiaries of the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation.
 
Condensed Consolidating Statement of Comprehensive Income
Quarter Ended September 28, 2013
 
Parent
Company
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating
Entries and
Eliminations
 
Consolidated
Net sales
$
1,006,219

 
$
201,097

 
$
621,751

 
$
(631,721
)
 
$
1,197,346

Cost of sales
788,512

 
100,344

 
493,115

 
(606,305
)
 
775,666

Gross profit
217,707

 
100,753

 
128,636

 
(25,416
)
 
421,680

Selling, general and administrative expenses
184,566

 
34,010

 
27,715

 
(1,509
)
 
244,782

Operating profit
33,141

 
66,743

 
100,921

 
(23,907
)
 
176,898

Equity in earnings of subsidiaries
127,032

 
70,951

 

 
(197,983
)
 

Other expenses
795

 

 

 

 
795

Interest expense, net
23,049

 

 
1,953

 

 
25,002

Income from continuing operations before income tax expense
136,329

 
137,694

 
98,968

 
(221,890
)
 
151,101

Income tax expense
11,066

 
7,962

 
6,810

 

 
25,838

Income from continuing operations
125,263

 
129,732

 
92,158

 
(221,890
)
 
125,263

Loss from discontinued operations, net of tax

 

 

 

 

Net income
$
125,263

 
$
129,732

 
$
92,158

 
$
(221,890
)
 
$
125,263

Comprehensive income
$
126,325

 
$
129,732

 
$
91,023

 
$
(220,755
)
 
$
126,325


 
Condensed Consolidating Statement of Comprehensive Income
Quarter Ended September 29, 2012
 
Parent
Company
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating
Entries and
Eliminations
 
Consolidated
Net sales
$
1,015,571

 
$
197,538

 
$
632,167

 
$
(626,595
)
 
$
1,218,681

Cost of sales
824,981

 
99,793

 
494,452

 
(600,475
)
 
818,751

Gross profit
190,590

 
97,745

 
137,715

 
(26,120
)
 
399,930

Selling, general and administrative expenses
187,016

 
32,865

 
24,758

 
(1,217
)
 
243,422

Operating profit
3,574

 
64,880

 
112,957

 
(24,903
)
 
156,508

Equity in earnings of subsidiaries
135,794

 
78,342

 

 
(214,136
)
 

Other expenses
3,373

 

 

 

 
3,373

Interest expense, net
30,214

 
(1
)
 
2,687

 
(3
)
 
32,897

Income from continuing operations before income tax expense (benefit)
105,781

 
143,223

 
110,270

 
(239,036
)
 
120,238

Income tax expense (benefit)
(5,567
)
 
8,926

 
5,696

 

 
9,055

Income from continuing operations
111,348

 
134,297

 
104,574

 
(239,036
)
 
111,183

Income (loss) from discontinued operations, net of tax
(1,456
)
 

 
165

 

 
(1,291
)
Net income
$
109,892

 
$
134,297

 
$
104,739

 
$
(239,036
)
 
$
109,892

Comprehensive income
$
114,773

 
$
134,297

 
$
105,962

 
$
(240,259
)
 
$
114,773


 
Condensed Consolidating Statement of Comprehensive Income
Nine Months Ended September 28, 2013
 
Parent
Company
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating
Entries and
Eliminations
 
Consolidated
Net sales
$
2,921,292

 
$
502,179

 
$
1,769,432

 
$
(1,850,891
)
 
$
3,342,012

Cost of sales
2,286,074

 
242,603

 
1,395,191

 
(1,766,317
)
 
2,157,551

Gross profit
635,218

 
259,576

 
374,241

 
(84,574
)
 
1,184,461

Selling, general and administrative expenses
547,403

 
108,141

 
89,463

 
(4,034
)
 
740,973

Operating profit
87,815

 
151,435

 
284,778

 
(80,540
)
 
443,488

Equity in earnings of subsidiaries
314,898

 
198,981

 

 
(513,879
)
 

Other expenses
2,010

 

 

 

 
2,010

Interest expense, net
70,958

 

 
4,888

 

 
75,846

Income from continuing operations before income tax expense
329,745

 
350,416

 
279,890

 
(594,419
)
 
365,632

Income tax expense
31,517

 
17,091

 
18,796

 

 
67,404

Income from continuing operations
298,228

 
333,325

 
261,094

 
(594,419
)
 
298,228

Loss from discontinued operations, net of tax

 

 

 

 

Net income
$
298,228

 
$
333,325

 
$
261,094

 
$
(594,419
)
 
$
298,228

Comprehensive income
$
297,386

 
$
333,325

 
$
253,660

 
$
(586,985
)
 
$
297,386


 
Condensed Consolidating Statement of Comprehensive Income
Nine Months Ended September 29, 2012
 
Parent
Company
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating
Entries and
Eliminations
 
Consolidated
Net sales
$
2,909,716

 
$
499,345

 
$
1,727,880

 
$
(1,764,476
)
 
$
3,372,465

Cost of sales
2,399,275

 
239,531

 
1,414,140

 
(1,702,457
)
 
2,350,489

Gross profit
510,441

 
259,814

 
313,740

 
(62,019
)
 
1,021,976

Selling, general and administrative expenses
548,650

 
97,836

 
91,767

 
(3,381
)
 
734,872

Operating profit (loss)
(38,209
)
 
161,978

 
221,973

 
(58,638
)
 
287,104

Equity in earnings of subsidiaries
238,712

 
153,265

 

 
(391,977
)
 

Other expenses
4,829

 

 

 

 
4,829

Interest expense, net
98,534

 
(8
)
 
7,979

 
(2
)
 
106,503

Income from continuing operations before income tax expense (benefit)
97,140

 
315,251

 
213,994

 
(450,613
)
 
175,772

Income tax expense (benefit)
(14,646
)
 
24,656

 
11,534

 

 
21,544

Income from continuing operations
111,786

 
290,595

 
202,460

 
(450,613
)
 
154,228

Loss from discontinued operations, net of tax
(27,493
)
 
(31,791
)
 
(14,636
)
 
3,985

 
(69,935
)
Net income
$
84,293

 
$
258,804

 
$
187,824

 
$
(446,628
)
 
$
84,293

Comprehensive income
$
92,489

 
$
258,804

 
$
187,116

 
$
(445,920
)
 
$
92,489


 
Condensed Consolidating Balance Sheet
September 28, 2013
 
Parent
Company
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating
Entries and
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
14,056

 
$
2,682

 
$
115,582

 
$

 
$
132,320

Trade accounts receivable, net
48,092

 
54,203

 
485,196

 
(1,781
)
 
585,710

Inventories
996,230

 
110,845

 
415,863

 
(208,967
)
 
1,313,971

Deferred tax assets
164,013

 
1,015

 
3,310

 

 
168,338

Other current assets
27,915

 
10,729

 
18,337

 
(267
)
 
56,714

Total current assets
1,250,306

 
179,474

 
1,038,288

 
(211,015
)
 
2,257,053

Property, net
83,852

 
37,391

 
445,533

 

 
566,776

Trademarks and other identifiable intangibles, net
8,718

 
88,161

 
14,960

 

 
111,839

Goodwill
232,882

 
124,247

 
75,850

 

 
432,979

Investments in subsidiaries
2,555,730

 
1,453,875

 

 
(4,009,605
)
 

Deferred tax assets
233,926

 
154,325

 
16,884

 

 
405,135

Receivables from related entities
4,322,565

 
3,442,323

 
2,055,671

 
(9,820,559
)
 

Other noncurrent assets
59,290

 
316

 
1,629

 

 
61,235

Total assets
$
8,747,269

 
$
5,480,112

 
$
3,648,815

 
$
(14,041,179
)
 
$
3,835,017

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ 
Equity
 
 
 
 
 
 
 
 
 
Accounts payable
$
258,338

 
$
12,179

 
$
169,840

 
$

 
$
440,357

Accrued liabilities
171,848

 
53,482

 
76,305

 
(130
)
 
301,505

Notes payable

 

 
5,209

 

 
5,209

Accounts Receivable Securitization Facility

 

 
166,614

 

 
166,614

Total current liabilities
430,186

 
65,661

 
417,968

 
(130
)
 
913,685

Long-term debt
1,250,000

 

 

 

 
1,250,000

Pension and postretirement benefits
393,272

 

 
11,282

 

 
404,554

Payables to related entities
5,429,729

 
2,686,892

 
1,438,538

 
(9,555,159
)
 

Other noncurrent liabilities
91,978

 
11,130

 
11,566

 

 
114,674

Total liabilities
7,595,165

 
2,763,683

 
1,879,354

 
(9,555,289
)
 
2,682,913

Stockholders’ equity
1,152,104

 
2,716,429

 
1,769,461

 
(4,485,890
)
 
1,152,104

Total liabilities and stockholders’ equity
$
8,747,269

 
$
5,480,112

 
$
3,648,815

 
$
(14,041,179
)
 
$
3,835,017



 
Condensed Consolidating Balance Sheet
December 29, 2012
 
Parent
Company
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating
Entries and
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
5,617

 
$
1,919

 
$
35,260

 
$

 
$
42,796

Trade accounts receivable, net
39,379

 
32,199

 
434,825

 
(125
)
 
506,278

Inventories
882,290

 
102,121

 
413,340

 
(144,615
)
 
1,253,136

Deferred tax assets
161,935

 
1,015

 
3,239

 

 
166,189

Other current assets
30,692

 
11,917

 
16,563

 
(46
)
 
59,126

Total current assets
1,119,913

 
149,171

 
903,227

 
(144,786
)
 
2,027,525

Property, net
90,820

 
41,326

 
464,012

 

 
596,158

Trademarks and other identifiable intangibles, net
10,662

 
93,727

 
15,725

 

 
120,114

Goodwill
232,882

 
124,247

 
76,171

 

 
433,300

Investments in subsidiaries
2,220,706

 
1,284,516

 

 
(3,505,222
)
 

Deferred tax assets
224,559

 
154,325

 
18,645

 

 
397,529

Receivables from related entities
3,967,079

 
3,198,153

 
1,785,466

 
(8,950,698
)
 

Other noncurrent assets
51,686

 
271

 
5,117

 

 
57,074

Total assets
$
7,918,307

 
$
5,045,736

 
$
3,268,363

 
$
(12,600,706
)
 
$
3,631,700

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ 
Equity
 
 
 
 
 
 
 
 
 
Accounts payable
$
217,645

 
$
8,209

 
$
177,790

 
$

 
$
403,644

Accrued liabilities
145,962

 
57,375

 
68,666

 
(31
)
 
271,972

Notes payable

 

 
26,216

 

 
26,216

Accounts Receivable Securitization Facility

 

 
173,836

 

 
173,836

Total current liabilities
363,607

 
65,584

 
446,508

 
(31
)
 
875,668

Long-term debt
1,317,500

 

 

 

 
1,317,500

Pension and postretirement benefits
433,490

 

 
12,777

 

 
446,267

Payables to related entities
4,835,465

 
2,582,287

 
1,281,957

 
(8,699,709
)
 

Other noncurrent liabilities
81,379

 
10,977

 
13,043

 

 
105,399

Total liabilities
7,031,441

 
2,658,848

 
1,754,285

 
(8,699,740
)
 
2,744,834

Stockholders’ equity
886,866

 
2,386,888

 
1,514,078

 
(3,900,966
)
 
886,866

Total liabilities and stockholders’ equity
$
7,918,307

 
$
5,045,736

 
$
3,268,363

 
$
(12,600,706
)
 
$
3,631,700

 
Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 28, 2013
 
Parent
Company
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating
Entries and
Eliminations
 
Consolidated
Net cash provided by operating activities
$
423,624

 
$
177,525

 
$
169,730

 
$
(513,894
)
 
$
256,985

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(13,106
)
 
(3,601
)
 
(14,014
)
 

 
(30,721
)
Proceeds from sales of assets
3,402

 
26

 
2,468

 

 
5,896

Net cash used in investing activities
(9,704
)
 
(3,575
)
 
(11,546
)
 

 
(24,825
)
Financing activities:
 
 
 
 
 
 
 
 
 
Borrowings on notes payable

 

 
68,333

 

 
68,333

Repayments on notes payable

 

 
(89,168
)
 

 
(89,168
)
Borrowings on Accounts Receivable Securitization Facility

 

 
100,731

 

 
100,731

Repayments on Accounts Receivable Securitization Facility

 

 
(107,953
)
 

 
(107,953
)
Borrowings on Revolving Loan Facility
2,629,000

 

 

 

 
2,629,000

Repayments on Revolving Loan Facility
(2,696,500
)
 

 

 

 
(2,696,500
)
Cash dividends paid
(39,615
)
 

 

 

 
(39,615
)
Proceeds from stock options exercised
5,279

 

 

 

 
5,279

Taxes paid related to net shares settlement of equity awards
(24,832
)
 

 

 

 
(24,832
)
Excess tax benefit from stock-based compensation
18,220

 

 

 

 
18,220

Other
(4,602
)
 

 
(309
)
 
(3
)
 
(4,914
)
Net transactions with related entities
(292,431
)
 
(173,187
)
 
(48,279
)
 
513,897

 

Net cash used in financing activities
(405,481
)
 
(173,187
)
 
(76,645
)
 
513,894

 
(141,419
)
Effect of changes in foreign exchange rates on cash

 

 
(1,217
)
 

 
(1,217
)
Increase in cash and cash equivalents
8,439

 
763

 
80,322

 

 
89,524

Cash and cash equivalents at beginning of year
5,617

 
1,919

 
35,260

 

 
42,796

Cash and cash equivalents at end of period
$
14,056

 
$
2,682

 
$
115,582

 
$

 
$
132,320



 
Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 29, 2012
 
Parent
Company
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Consolidating
Entries and
Eliminations
 
Consolidated
Net cash provided by operating activities
$
531,201

 
$
116,698

 
$
53,477

 
$
(391,971
)
 
$
309,405

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(6,177
)
 
(5,163
)
 
(18,135
)
 

 
(29,475
)
Proceeds from sales of assets
70

 
16

 
227

 

 
313

Disposition of business

 

 
12,708

 

 
12,708

Net cash used in investing activities
(6,107
)
 
(5,147
)
 
(5,200
)
 

 
(16,454
)
Financing activities:
 
 
 
 
 
 
 
 
 
Borrowings on notes payable

 

 
43,251

 

 
43,251

Repayments on notes payable

 

 
(55,645
)
 

 
(55,645
)
Borrowings on Accounts Receivable Securitization Facility

 

 
156,817

 

 
156,817

Repayments on Accounts Receivable Securitization Facility

 

 
(129,775
)
 

 
(129,775
)
Borrowings on Revolving Loan Facility
2,177,000

 

 

 

 
2,177,000

Repayments on Revolving Loan Facility
(2,191,500
)
 

 

 

 
(2,191,500
)
Redemption of Floating Rate Senior Notes
(148,092
)
 

 

 

 
(148,092
)
Proceeds from stock options exercised
4,103

 

 

 

 
4,103

Excess tax benefit from stock-based compensation
491

 

 

 

 
491

Other
(2,542
)
 

 
(297
)
 

 
(2,839
)
Dividends paid to related entities

 
(4,623
)
 
(4,867
)
 
9,490

 

Net transactions with related entities
(280,859
)
 
(106,625
)
 
5,003

 
382,481

 

Net cash provided by (used in) financing activities
(441,399
)
 
(111,248
)
 
14,487

 
391,971

 
(146,189
)
Effect of changes in foreign exchange rates on cash
1

 

 
161

 

 
162

Increase in cash and cash equivalents
83,696

 
303

 
62,925

 

 
146,924

Cash and cash equivalents at beginning of year
8,330

 
2,726

 
24,289

 

 
35,345

Cash and cash equivalents at end of period
$
92,026

 
$
3,029

 
$
87,214

 
$

 
$
182,269