SEGMENT DATA

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 premium outlet centers in North America, and an e-commerce website for customers in the United States, 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, franchisees of Calvin Klein, 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. This segment also includes the Company’s proportionate share of the net income or loss of its investments in unconsolidated Calvin Klein foreign affiliates in Australia and India.

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 premium 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, franchisees of Tommy Hilfiger, 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 in Brazil, China and India. 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, neckwear and underwear 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; and (iv) women’s intimate apparel under the brand names Warner’s and Olga.

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:



	Thirteen Weeks Ended
(In millions)	5/4/14			5/5/13
Revenue – Calvin Klein North America
Net sales	$	301.6		$	293.3
Royalty revenue	25.5			25.4
Advertising and other revenue	10.5			8.7
Total	337.6			327.4

Revenue – Calvin Klein International
Net sales	300.2			255.2		⁽¹⁾
Royalty revenue	19.4			18.4
Advertising and other revenue	8.1			6.9
Total	327.7			280.5

Revenue – Tommy Hilfiger North America
Net sales	354.2			337.7
Royalty revenue	6.0			6.4
Advertising and other revenue	2.2			2.5
Total	362.4			346.6

Revenue – Tommy Hilfiger International
Net sales	484.6			451.8
Royalty revenue	14.0			11.8
Advertising and other revenue	1.4			1.2
Total	500.0			464.8

Revenue – Heritage Brands Wholesale
Net sales	354.9			354.5
Royalty revenue	3.9			4.0
Advertising and other revenue	0.5			0.6
Total	359.3			359.1

Revenue – Heritage Brands Retail
Net sales	76.0		⁽²⁾	130.5
Royalty revenue	0.6			1.1
Advertising and other revenue	0.1			0.2
Total	76.7			131.8

Total Revenue
Net sales	1,871.5			1,823.0
Royalty revenue	69.4			67.1
Advertising and other revenue	22.8			20.1
Total	$	1,963.7		$	1,910.2


⁽¹⁾	Includes $30.0 million of sales returns for certain wholesale customers in the acquired Asia business in connection with the Company’s initiative to reduce excess inventory levels.


⁽²⁾	Includes a decrease of $46.5 million as compared to the prior year due to the sale of the the Bass business, which closed in the fourth quarter of 2013.



	Thirteen Weeks Ended
(In millions)	5/4/14				5/5/13
Income before interest and taxes – Calvin Klein North America	$	41.1		⁽²⁾	$	12.4		⁽⁶⁾

Income (loss) before interest and taxes – Calvin Klein International	32.8			⁽²⁾⁽³⁾	(36.5		)	⁽⁶⁾

Income before interest and taxes – Tommy Hilfiger North America	40.2				46.0

Income before interest and taxes – Tommy Hilfiger International	75.0				72.1

Income before interest and taxes – Heritage Brands Wholesale	27.0			⁽²⁾	28.4			⁽⁶⁾

Loss before interest and taxes – Heritage Brands Retail	(3.2		)	⁽⁴⁾	(6.8		)

Loss before interest and taxes – Corporate⁽¹⁾	(128.4		)	⁽²⁾⁽⁵⁾	(97.2		)	⁽⁶⁾⁽⁷⁾

Income before interest and taxes	$	84.5			$	18.4


⁽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.

⁽²⁾

Income (loss) before interest and taxes for the thirteen weeks ended May 4, 2014 includes costs of $32.6 million associated with the Company’s integration of Warnaco and the related restructuring. Such costs were included in the Company’s segments as follows: $5.0 million in Calvin Klein North America; $11.2 million in Calvin Klein International; $4.0 million in Heritage Brands Wholesale; and $12.4 million in corporate expenses not allocated to any reportable segments.

⁽³⁾

Income before interest and taxes for the thirteen weeks ended May 4, 2014 includes a net gain of $8.0 million associated with the deconsolidation of certain Calvin Klein subsidiaries in Australia and the Company’s previously consolidated Calvin Klein joint venture in India. Please refer to Note 4, “Investments in Unconsolidated Affiliates” and Note 5, “Redeemable Non-Controlling Interest” for a further discussion.


⁽⁴⁾	Loss before interest and taxes for the thirteen weeks ended May 4, 2014 includes costs of $1.0 million related to the sale of the Bass business, which closed in the fourth quarter of 2013.


⁽⁵⁾	Loss before interest and taxes for the thirteen weeks ended May 4, 2014 includes costs of $93.1 million associated with the Company’s amendment and restatement of its previously outstanding senior secured credit facilities and redemption of its 7 3/8% senior notes due 2020. Please refer to Note 8, “Debt,” for a further discussion.

⁽⁶⁾

Income (loss) before interest and taxes for the thirteen weeks ended May 5, 2013 includes costs of $182.5 million 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: $41.1 million in Calvin Klein North America; $88.8 million in Calvin Klein International; $17.5 million in Heritage Brands Wholesale; and $35.1 million in corporate expenses not allocated to any reportable segments.


⁽⁷⁾	Loss before interest and taxes for the thirteen weeks ended May 5, 2013 includes costs of $40.4 million associated with the Company’s debt modification and extinguishment. Please refer to Note 8, “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.