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 and e-commerce sites operated by key department store customers and pure play e-commerce retailers; (ii) operating retail stores, which are primarily located in premium outlet centers in North America, and e-commerce sites in North America, 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, Calvin Klein Collection and Calvin Klein Platinum 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, e-commerce sites operated by key department store customers and pure play e-commerce retailers, franchisees of Calvin Klein, distributors and licensees; (ii) operating retail stores and e-commerce sites 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 Platinum and Calvin Klein 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, Inc. and Hudson’s Bay Company, as well as e-commerce sites operated by key department store customers and pure play e-commerce retailers; (ii) operating retail stores, which are primarily located in premium outlet centers in North America, and e-commerce sites in North America, which sell Tommy Hilfiger branded apparel, accessories and related products; and (iii) 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 and China, primarily to department and specialty stores, e-commerce sites operated by key department store customers and pure play e-commerce retailers, franchisees of Tommy Hilfiger, distributors and licensees; (ii) operating retail stores in Europe, China and Japan and international e-commerce sites, which sell Tommy Hilfiger branded apparel, accessories and related products; and (iii) 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. 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, India and Australia. This segment included the Company’s proportionate share of the net income or loss of its investment in TH China until April 13, 2016, on which date the Company began to consolidate the operations as a wholly owned subsidiary of the Company in conjunction with the TH China acquisition. Please see Note 3, “Acquisitions,” for a further discussion.

Heritage Brands Wholesale Segment - This segment consists of the Company’s Heritage Brands Wholesale division. This segment derives revenue primarily from marketing to department, chain and specialty stores and, to a lesser extent, e-commerce sites operated by key department store customers and pure play e-commerce retailers 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 principally 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. This segment also includes the Company’s proportionate share of the net income or loss of its investment in its unconsolidated Heritage Brands foreign affiliate in Australia.

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 located in outlet centers in North America, which primarily sell apparel, accessories and related products under the brand names Van Heusen, IZOD and Warner’s. The Company exited the Izod retail business in the third quarter of 2015, leaving only its Van Heusen retail business. However, the Company began selling a limited selection of IZOD Golf apparel and Warner’s products in some of its Van Heusen retail stores. The Company also sells Speedo products on a limited basis in some of its Van Heusen retail stores.

The following tables present summarized information by segment:



	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(In millions)	10/30/16		11/1/15		10/30/16		11/1/15
Revenue – Calvin Klein North America
Net sales	$	444.4	$	420.1	$	1,144.5	$	1,037.0
Royalty revenue	43.1		43.9		101.4		103.1
Advertising and other revenue	14.4		13.8		34.6		34.7
Total	501.9		477.8		1,280.5		1,174.8

Revenue – Calvin Klein International
Net sales	364.0		308.8		986.5		865.2
Royalty revenue	18.8		21.0		54.2		57.0
Advertising and other revenue	6.5		6.5		19.1		19.6
Total	389.3		336.3		1,059.8		941.8

Revenue – Tommy Hilfiger North America
Net sales	383.6		416.5		1,100.7		1,142.8
Royalty revenue	14.8		13.4		35.0		32.9
Advertising and other revenue	3.8		4.0		8.5		9.4
Total	402.2		433.9		1,144.2		1,185.1

Revenue – Tommy Hilfiger International
Net sales	512.3		439.1		1,399.0		1,239.5
Royalty revenue	11.6		13.6		33.3		38.0
Advertising and other revenue	1.1		1.0		2.7		2.8
Total	525.0		453.7		1,435.0		1,280.3

Revenue – Heritage Brands Wholesale
Net sales	354.2		384.0		964.1		1,059.5
Royalty revenue	5.1		4.9		15.3		14.3
Advertising and other revenue	1.1		0.8		2.9		2.2
Total	360.4		389.7		982.3		1,076.0

Revenue – Heritage Brands Retail
Net sales	64.9		72.4		191.7		247.9
Royalty revenue	0.5		0.6		1.7		1.7
Advertising and other revenue	0.1		0.1		0.2		0.2
Total	65.5		73.1		193.6		249.8

Total Revenue
Net sales	2,123.4		2,040.9		5,786.5		5,591.9
Royalty revenue	93.9		97.4		240.9		247.0
Advertising and other revenue	27.0		26.2		68.0		68.9
Total	$	2,244.3	$	2,164.5	$	6,095.4	$	5,907.8



	Thirteen Weeks Ended								Thirty-Nine Weeks Ended
(In millions)	10/30/16			⁽¹⁾	11/1/15			⁽¹⁾	10/30/16			⁽¹⁾	11/1/15			⁽¹⁾
(Loss) income before interest and taxes – Calvin Klein North America	$	(0.7	)	⁽³⁾	$	80.2		⁽¹²⁾	$	92.6		^(3)(8)(11)	$	166.7		⁽¹³⁾

Income before interest and taxes – Calvin Klein International	69.6				61.5			⁽¹²⁾	172.3			^(8)(11)	145.5			⁽¹³⁾

Income before interest and taxes – Tommy Hilfiger North America	41.3			⁽⁴⁾	57.1				110.4			⁽⁴⁾	146.2

Income before interest and taxes – Tommy Hilfiger International	75.0			⁽⁵⁾⁽⁶⁾	68.6				287.8			⁽⁵⁾⁽⁷⁾	169.3

Income before interest and taxes – Heritage Brands Wholesale	41.2				25.3			^(12)(14)	77.4			⁽⁸⁾⁽⁹⁾	72.9			^(13)(14)

Income (loss) before interest and taxes – Heritage Brands Retail	2.4				0.5			⁽¹⁵⁾	8.2				(2.3		)	⁽¹⁵⁾

Loss before interest and taxes – Corporate⁽²⁾	(30.9		)		(39.6		)	⁽¹²⁾	(113.2		)	^(8)(10)	(113.8		)	^(13)(16)

Income before interest and taxes	$	197.9			$	253.6			$	635.5			$	584.5

⁽¹⁾

Income (loss) before interest and taxes for the thirteen and thirty-nine weeks ended October 30, 2016 and November 1, 2015 was significantly impacted by the strengthening of the United States dollar against foreign currencies in which the Company transacts significant levels of business. Please see section entitled “Results of Operations” in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 2 of this report for a further discussion.

⁽²⁾

Includes corporate expenses not allocated to any reportable segments, the Company’s proportionate share of the net income or loss of its investments in Karl Lagerfeld and Gazal and the results of PVH Ethiopia. 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 (which are generally recorded in the fourth quarter).


⁽³⁾	(Loss) income before interest and taxes for the thirteen and thirty-nine weeks ended October 30, 2016 included a noncash loss of $76.9 million recorded in anticipation of the Mexico deconsolidation.


⁽⁴⁾	Income before interest and taxes for the thirteen and thirty-nine weeks ended October 30, 2016 included costs of $1.6 million and $4.2 million, respectively, related to the licensing to G-III Apparel Group, Ltd. of the Tommy Hilfiger womenswear wholesale business in the United States and Canada.


⁽⁵⁾	Income before interest and taxes for the thirteen and thirty-nine weeks ended October 30, 2016 included a gain of $18.1 million related to a payment received to exit a Tommy Hilfiger retail flagship store in Europe.


⁽⁶⁾	Income before interest and taxes for the thirteen weeks ended October 30, 2016 included costs of $17.3 million associated with the TH China acquisition, principally consisting of amortization of short-lived assets.

⁽⁷⁾

Income before interest and taxes for the thirty-nine weeks ended October 30, 2016 included a noncash gain of $153.1 million to write-up the Company’s equity investment in TH China to fair value in connection with the TH China acquisition. Partially offsetting the gain were acquisition related costs of $61.8 million, principally consisting of valuation adjustments and amortization of short-lived assets, and a one-time cost of $5.9 million recorded on the Company’s equity investment in TH China. Please see Note 3, “Acquisitions,” for a further discussion.

⁽⁸⁾

Income (loss) before interest and taxes for the thirty-nine weeks ended October 30, 2016 included costs of $9.8 million associated with the Company’s integration of Warnaco and the related restructuring. Such costs were included in the Company’s segments as follows: $0.2 million in Calvin Klein North America; $2.6 million in Calvin Klein International; $0.4 million in Heritage Brands Wholesale; and $6.6 million in corporate expenses not allocated to any reportable segments.


⁽⁹⁾	Income before interest and taxes for the thirty-nine weeks ended October 30, 2016 included costs of $2.6 million related to the discontinuation of several licensed product lines in the Company’s Heritage Brands dress furnishings business.


⁽¹⁰⁾	Loss before interest and taxes for the thirty-nine weeks ended October 30, 2016 included costs of $15.8 million related to the Company’s amendment of its credit facilities. Please see Note 9, “Debt,” for a further discussion.


⁽¹¹⁾	Income before interest and taxes for the thirty-nine weeks ended October 30, 2016 included costs of $5.5 million associated with the restructuring related to the new global creative strategy for Calvin Klein. Such costs were included in the Company’s segments as follows: $2.7 million in Calvin Klein North America; and $2.8 million in Calvin Klein International.

⁽¹²⁾

Income (loss) before interest and taxes for the thirteen weeks ended November 1, 2015 included costs of $18.9 million associated with the Company’s integration of Warnaco and the related restructuring. Such costs were included in the Company’s segments as follows: $2.7 million in Calvin Klein North America; $3.9 million in Calvin Klein International; $1.4 million in Heritage Brands Wholesale; and $10.9 million in corporate expenses not allocated to any reportable segments.

⁽¹³⁾

Income (loss) before interest and taxes for the thirty-nine weeks ended November 1, 2015 included costs of $50.8 million associated with the Company’s integration of Warnaco and the related restructuring. Such costs were included in the Company’s segments as follows: $5.6 million in Calvin Klein North America; $7.6 million in Calvin Klein International; $7.1 million in Heritage Brands Wholesale; and $30.5 million in corporate expenses not allocated to any reportable segments.


⁽¹⁴⁾	Income before interest and taxes for the thirteen and thirty-nine weeks ended November 1, 2015 included costs of $13.1 million and $16.4 million, respectively, principally related to the discontinuation of several licensed product lines in the Company’s Heritage Brands dress furnishings business.


⁽¹⁵⁾	Income (loss) before interest and taxes for the thirteen and thirty-nine weeks ended November 1, 2015 included costs of $2.8 million and $9.1 million, respectively, related to the operation of and exit from the Company’s Izod retail business.


⁽¹⁶⁾	Loss before interest and taxes for the thirty-nine weeks ended November 1, 2015 included a one-time gain of $2.2 million recorded in connection with the Company’s equity investment in Karl Lagerfeld.

Intersegment transactions primarily consist of transfers of inventory principally from the Heritage Brands Wholesale segment to the Heritage Brands Retail segment, the Calvin Klein North America segment and the Tommy Hilfiger 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, the Calvin Klein North America segment and the Tommy Hilfiger North America segment.