SEGMENT DATA

The acquisition of Warnaco significantly impacted the way the Company and its chief operating decision maker manage and analyze its operating results. As such, the Company changed its reportable segments beginning with the first quarter of 2013. Prior year periods have been restated in order to present that information on a basis consistent with the current year.

The Company manages its operations through its operating divisions, which are presented as six reportable segments: (i) Calvin Klein North America; (ii) Calvin Klein International; (iii) Tommy Hilfiger North America; (iv) Tommy Hilfiger International; (v) Heritage Brands Wholesale; and (vi) Heritage Brands Retail.

Calvin Klein North America Segment - This segment consists of the Company’s Calvin Klein North America division. This segment derives revenue principally from (i) marketing Calvin Klein branded apparel and related products at wholesale in North America, primarily to department and specialty stores; (ii) operating retail stores, which are primarily located in outlet centers, and an e-commerce website for North American customers, which sell Calvin Klein branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the brand names Calvin Klein Collection, Calvin Klein on a platinum label and Calvin Klein on a white label for a broad array of products and retail services in North America.

Calvin Klein International Segment - This segment consists of the Company’s Calvin Klein International division. This segment derives revenue principally from (i) marketing Calvin Klein branded apparel and related products at wholesale principally in Europe, Asia and Brazil, primarily to department and specialty stores and franchise operators of Calvin Klein stores, and through distributors; (ii) operating retail stores in Europe, Asia and Brazil, which sell Calvin Klein branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the brand names Calvin Klein Collection, Calvin Klein on a platinum label and Calvin Klein on a white label for a broad array of products and retail services outside of North America.

Tommy Hilfiger North America Segment - This segment consists of the Company’s Tommy Hilfiger North America division. This segment derives revenue principally from (i) marketing Tommy Hilfiger branded apparel and related products at wholesale in North America, primarily to department stores, principally Macy’s; and (ii) operating retail stores, which are primarily located in outlet centers and an e-commerce website for North American customers, which sell Tommy Hilfiger branded apparel, accessories and related products. This segment also derives revenue from licensing and similar arrangements relating to the use by third parties of the Tommy Hilfiger brand name for a broad array of products in North America.

Tommy Hilfiger International Segment - This segment consists of the Company’s Tommy Hilfiger International division. This segment derives revenue principally from (i) marketing Tommy Hilfiger branded apparel and related products at wholesale principally in Europe, primarily to department and specialty stores and franchise operators of Tommy Hilfiger stores, and through distributors and licensees; and (ii) operating retail stores in Europe and Japan, as well as operating an international e-commerce site, which sell Tommy Hilfiger branded apparel, accessories and related products. This segment also includes the Company’s proportionate share of the net income or loss of its investments in unconsolidated Tommy Hilfiger foreign affiliates. This segment also derives revenue from licensing and similar arrangements relating to the use by third parties of the Tommy Hilfiger brand name for a broad array of products outside of North America.

Heritage Brands Wholesale Segment - This segment consists of the Company’s Heritage Brands wholesale division. This segment derives revenue primarily from the marketing to department, chain and specialty stores in North America of: (i) dress shirts and neckwear under various owned and licensed brand names, including several private label brands; (ii) men’s sportswear under the brand names Van Heusen, IZOD and ARROW; (iii) swimwear, fitness apparel, swim accessories and related products under the brand name Speedo beginning in the first quarter of 2013; and (iv) women’s intimate apparel under the brand names Warner’s and Olga beginning in the first quarter of 2013. This segment also derived revenue through the second quarter of 2012 from marketing men’s sportswear under the brand name Timberland and through the third quarter of 2012 from marketing women’s sportswear under the brand name IZOD.

Heritage Brands Retail Segment - This segment consists of the Company’s Heritage Brands retail division. This segment derives revenue principally from operating retail stores, primarily in outlet centers in North America, which sell apparel, accessories and related products under the brand names Van Heusen and IZOD. This segment also derived revenue through the third quarter of 2013 under the brand names Bass and G.H. Bass & Co., principally from operating outlet stores.

The following tables present summarized information by segment:



	2013			2012		2011
Revenue – Calvin Klein North America
Net sales	$	1,316,765		$	714,862	$	645,046
Royalty revenue	113,924			136,957		134,224
Advertising and other revenue	41,888			55,300		53,099
Total	1,472,577			907,119		832,369

Revenue – Calvin Klein International
Net sales	1,186,932		⁽¹⁾	45,071		38,620
Royalty revenue	76,756			140,412		138,778
Advertising and other revenue	30,295			57,764		55,489
Total	1,293,983		⁽¹⁾	243,247		232,887

Revenue – Tommy Hilfiger North America
Net sales	1,505,589			1,399,323		1,273,829
Royalty revenue	27,599			22,364		16,850
Advertising and other revenue	9,015			8,073		7,016
Total	1,542,203			1,429,760		1,297,695

Revenue – Tommy Hilfiger International
Net sales	1,834,793			1,732,228		1,703,582
Royalty revenue	51,718			50,038		45,195
Advertising and other revenue	4,548			4,964		4,329
Total	1,891,059			1,787,230		1,753,106

Revenue – Heritage Brands Wholesale
Net sales	1,420,287			991,781		1,102,182
Royalty revenue	16,433			15,477		16,166
Advertising and other revenue	2,780			4,872		3,856
Total	1,439,500			1,012,130		1,122,204

Revenue – Heritage Brands Retail
Net sales	541,774			657,556		646,769
Royalty revenue	4,247			4,771		4,822
Advertising and other revenue	1,008			1,186		772
Total	547,029			663,513		652,363

Total Revenue
Net sales	7,806,140		⁽¹⁾	5,540,821		5,410,028
Royalty revenue	290,677			370,019		356,035
Advertising and other revenue	89,534			132,159		124,561
Total⁽²⁾	$	8,186,351	⁽¹⁾	$	6,042,999	$	5,890,624


⁽¹⁾	Includes $30,000 of sales returns for certain Warnaco wholesale customers in Asia in connection with the Company’s initiative to reduce excess inventory levels.


⁽²⁾	No single customer accounted for more than 10% of the Company’s revenue in 2013, 2012 and 2011.



	2013				2012				2011
Income before interest and taxes – Calvin Klein North America	$	167,041		⁽²⁾	$	182,124			$	178,796

(Loss) income before interest and taxes – Calvin Klein International	(60,716		)	⁽²⁾	102,544				99,009

Income before interest and taxes – Tommy Hilfiger North America	242,473			⁽⁴⁾	200,121			⁽⁶⁾	81,142			⁽⁹⁾

Income before interest and taxes – Tommy Hilfiger International	260,570			⁽⁴⁾	220,812			⁽⁶⁾	200,697			^(9)(10)

Income before interest and taxes – Heritage Brands Wholesale	114,400			⁽²⁾	101,087				89,727			⁽⁸⁾

(Loss) income before interest and taxes – Heritage Brands Retail	(24,397		)	⁽³⁾	13,498				28,731

Loss before interest and taxes – Corporate⁽¹⁾	(185,909		)	⁽²⁾⁽⁵⁾	(159,824		)	⁽⁶⁾⁽⁷⁾	(186,929		)	^(9)(11)

Income before interest and taxes	$	513,462			$	660,362			$	491,173

⁽¹⁾

Includes corporate expenses not allocated to any reportable segments. Corporate expenses represent overhead operating expenses and include expenses for senior corporate management, corporate finance, information technology related to corporate infrastructure and actuarial gains and losses from the Company’s pension and other postretirement plans. Actuarial gains (losses) from the Company’s pension and other postretirement plans totaled $52,539, $(28,142) and $(76,120) in 2013, 2012 and 2011, respectively.

⁽²⁾

Income (loss) before interest and taxes for 2013 includes costs of $469,690 associated with the Company’s acquisition and integration of Warnaco and the related restructuring. Such costs were included in the Company’s segments as follows: $87,703 in Calvin Klein North America; $237,500 in Calvin Klein International; $43,874 in Heritage Brands Wholesale and $100,613 in corporate expenses not allocated to any reportable segments.


⁽³⁾	Loss before interest and taxes for 2013 includes a loss of $20,228 associated with the sale of substantially all of the assets of the Company’s Bass business.

⁽⁴⁾

Income before interest and taxes for 2013 includes income of $24,309 related to the amendment of an unfavorable contract. At the time of the Tommy Hilfiger acquisition in 2010, a liability was recorded for such unfavorable contract. The amendment executed in the third quarter of 2013 adjusted the contract terms thereby reducing the amount by which the contract was unfavorable and resulted in a reduction of the liability, amounting to $24,309. Such income was included in the Company’s segments as follows: $12,000 in Tommy Hilfiger North America and $12,309 in Tommy Hilfiger International.


⁽⁵⁾	Loss before interest and taxes for 2013 includes costs of $40,395 associated with the Company’s debt modification and extinguishment. Please refer to Note 7, “Debt,” for a further discussion.


⁽⁶⁾	Income (loss) before interest and taxes for 2012 includes costs of $20,525 associated with the Company’s integration of Tommy Hilfiger and the related restructuring. Such costs were included in the Company’s segments as follows: $379 in Tommy Hilfiger North America; $15,441 in Tommy Hilfiger International and $4,705 in corporate expenses not allocated to any reportable segments.


⁽⁷⁾	Loss before interest and taxes for 2012 includes costs of $42,579 associated with the Company’s acquisition of Warnaco.


⁽⁸⁾	Income before interest and taxes for 2011 includes costs of $8,118 related to the Company’s negotiated early termination of its license to market sportswear under the Timberland brand and its exit of the Izod women’s wholesale sportswear business.


⁽⁹⁾	Income (loss) before interest and taxes for 2011 includes costs of $69,522 associated with the Company’s integration of Tommy Hilfiger and the related restructuring. Such costs were included in the Company’s segments as follows: $44,704 in Tommy Hilfiger North America; $5,419 in Tommy Hilfiger International; and $19,399 in corporate expenses not allocated to any reportable segments.


⁽¹⁰⁾	Income before interest and taxes for 2011 includes a one-time expense of $20,709 recorded in connection with the Company’s reacquisition of the rights to the Tommy Hilfiger trademarks in India that had been subject to a perpetual license. Please refer to Note 2, “Acquisitions and Divestitures,” for a further discussion.


⁽¹¹⁾	Loss before interest and taxes for 2011 includes costs of $16,233 associated with the Company’s modification of its senior secured credit facility. Please refer to Note 7, “Debt,” for a further discussion.

Intersegment transactions consist of transfers of inventory principally from the Heritage Brands Wholesale segment to the Heritage Brands Retail segment and the Calvin Klein North America segment. These transfers are recorded at cost plus a standard markup percentage. Such markup percentage on ending inventory is eliminated principally in the Heritage Brands Retail segment and the Calvin Klein North America segment.



	2013		2012		2011
Identifiable Assets
Calvin Klein North America	$	1,792,065	$	752,029	$	680,416
Calvin Klein International	2,975,748		584,860		580,578
Tommy Hilfiger North America	1,207,243		1,139,416		1,155,530
Tommy Hilfiger International	3,741,386		3,420,813		3,236,225
Heritage Brands Wholesale	1,399,453		555,544		572,828
Heritage Brands Retail	128,151		175,717		145,272
Corporate⁽¹⁾	331,532		1,103,308		381,512
Total	$	11,575,578	$	7,731,687	$	6,752,361
Depreciation and Amortization
Calvin Klein North America	$	61,790	$	16,490	$	14,724
Calvin Klein International	100,892		2,280		2,018
Tommy Hilfiger North America	29,558		26,364		28,093
Tommy Hilfiger International	82,584		72,632		63,447
Heritage Brands Wholesale	18,985		7,069		8,905
Heritage Brands Retail	11,230		10,705		9,592
Corporate	8,555		4,816		5,231
Total	$	313,594	$	140,356	$	132,010
Identifiable Capital Expenditures⁽²⁾
Calvin Klein North America	$	35,556	$	32,597	$	20,229
Calvin Klein International	42,739		3,137		4,286
Tommy Hilfiger North America	46,978		47,027		29,974
Tommy Hilfiger International	91,732		88,348		82,604
Heritage Brands Wholesale	7,350		5,058		8,599
Heritage Brands Retail	14,338		28,131		18,602
Corporate	7,889		4,654		7,613
Total	$	246,582	$	208,952	$	171,907


⁽¹⁾	Corporate at February 3, 2013 included $700,000 of cash that arose from senior notes that were issued to fund a portion of the consideration for the Warnaco acquisition.


⁽²⁾	Capital expenditures in 2013 include $13,624 of accruals that will not be paid until 2014. Capital expenditures in 2012 include $4,184 of accruals that were not paid until 2013. Capital expenditures in 2011 include $5,786 of accruals that were not paid until 2012.

Property, plant and equipment, net based on the location where such assets are held, was as follows:



	2013		2012		2011
Domestic	$	373,136	$	321,247	$	263,008
Canada	36,774		41,850		38,912
Europe	224,164		171,647		137,010
Asia	63,917		26,591		19,961
Other foreign	14,087		—		—
Total	$	712,078	$	561,335	$	458,891

Revenue, based on location of origin, was as follows:



	2013		2012		2011
Domestic	$	4,433,854	$	3,662,150	$	3,558,540
Canada	454,006		329,674		302,103
Europe	2,261,442		1,643,875		1,588,926
Asia	742,273		355,030		385,251
Other foreign	294,776		52,270		55,804
Total	$	8,186,351	$	6,042,999	$	5,890,624