Operating Segments and Geographic Information

9 Months Ended

Sep. 30, 2013

Operating Segments And Geographic Information [Abstract]

Operating Segments And Geographic Information

13. OPERATING SEGMENTS & GEOGRAPHIC INFORMATION

During the first quarter of 2013,  we adjusted our operating segment structure for internal reports reviewed by the chief operating decision maker (“CODM”) by presenting Japan separate from the Asia Pacific segment. This change was made due to recurring amounts of substantial business activity as well as the macroeconomic environment within Japan, which resulted in the need for a regular review of Japan operating results by management and the CODM in order to better evaluate performance and allocate resources for the consolidated business. Segment information for all periods presented has been reclassified to conform to the fiscal 2013 presentation.

As a result of the changes discussed above, we have four reportable operating segments based on the geographic nature of our operations: Americas, Asia Pacific, Japan and Europe. We also have an “Other businesses” category which aggregates insignificant operating segments that do not meet the reportable segment threshold and represent manufacturing operations located in Mexico, Italy and Asia. The composition of our reportable operating segments is consistent with that used by our CODM to evaluate performance and allocate resources.

Each of our reportable operating segments derives its revenues from the sale of footwear, apparel and accessories to external customers as well as intersegment sales. Revenues of the “Other businesses” category are primarily made up of intersegment sales. The remaining revenues for the “Other businesses” represent non-footwear product sales to external customers. Intersegment sales are not included in the measurement of segment operating income or regularly reviewed by the CODM and are eliminated when deriving total consolidated revenues.

The primary financial measure utilized by the CODM to evaluate performance and allocate resources is segment operating income. Segment performance evaluation is based primarily on segment results without allocating corporate expenses, or indirect general, administrative and other expenses. Segment profits or losses of our reportable operating segments include adjustments to eliminate intersegment profit or losses on intersegment sales. As such, reconciling items for segment operating income represent unallocated corporate and other expenses as well as intersegment eliminations. Segment assets consist of cash and cash equivalents, accounts receivable and inventory as these balances are regularly reviewed by the CODM.

The following table sets forth information related to our reportable operating business segments during the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
($ thousands)	2013		2012		2013		2012
Revenues:
Americas	$	116,194	$	131,948	$	391,878	$	383,866
Asia Pacific		79,406		72,964		281,695		232,240
Japan		38,984		50,731		114,815		140,336
Europe		53,903		39,765		175,419		141,534
Total segment revenues		288,487		295,408		963,807		897,976
Other businesses		37		161		200		333
Total consolidated revenues	$	288,524	$	295,569	$	964,007	$	898,309
Operating income:
Americas(1)	$	17,969	$	27,610	$	61,787	$	77,299
Asia Pacific		13,690		18,014		76,478		65,488
Japan		11,656		20,999		36,679		61,666
Europe		6,860		1,351		31,188		27,730
Total segment operating income		50,175		67,974		206,132		232,183
Reconciliation of total segment operating income to income before income taxes:
Other businesses		(5,495)		(2,690)		(14,907)		(8,598)
Intersegment eliminations		15		15		45		54
Unallocated corporate and other(2)		(26,788)		(25,285)		(85,294)		(72,568)
Total consolidated operating income		17,907		40,014		105,976		151,071
Foreign currency transaction losses, net		1,043		21		4,457		2,670
Interest income		(853)		(151)		(1,676)		(1,057)
Interest expense		44		377		519		556
Other (income) expense, net		13		71		180		(690)
Income before income taxes	$	17,660	$	39,696	$	102,496	$	149,592
Depreciation and amortization:
Americas	$	2,690	$	2,347	$	7,663	$	7,530
Asia Pacific		1,244		1,256		3,722		3,557
Japan		346		575		1,122		1,474
Europe		1,367		787		3,798		2,079
Total segment depreciation and amortization		5,647		4,965		16,305		14,640
Other businesses		2,045		1,704		6,285		4,765
Unallocated corporate and other(2)		2,953		2,890		8,577		7,410
Total consolidated depreciation and amortization	$	10,645	$	9,559	$	31,167	$	26,815

⁽¹⁾Includes  $0.2 million and $0.8 million for the nine months ended September 30, 2013 and 2012, respectively, of asset impairment charges related to certain underperforming retail locations.

(2)Includes a corporate component consisting primarily of corporate support and administrative functions, costs associated with share-based compensation, research and development, brand marketing, legal, depreciation and amortization of corporate and other assets not allocated to operating segments and costs of the same nature related to certain corporate holding companies.

The following table sets forth asset information related to our reportable operating business segments as of September 30, 2013 and December 31, 2012:

	September 30,		December 31,
($ thousands)	2013		2012
Assets:
Americas	$	132,960	$	143,236
Asia Pacific		211,789		170,426
Japan		88,130		111,785
Europe		165,013		85,756
Total segment current assets		597,892		511,203
Other businesses		16,977		14,489
Unallocated corporate and other(1)		13,819		25,738
Deferred tax assets, net		5,647		6,284
Income tax receivable		16,666		5,613
Other receivables		17,201		24,821
Prepaid expenses and other current assets		30,869		24,967
Total current assets		699,071		613,115
Property and equipment, net		94,233		82,241
Intangible assets, net		69,081		59,931
Deferred tax assets, net		33,529		34,112
Other assets		50,672		40,239
Total consolidated assets	$	946,586	$	829,638

⁽¹⁾Corporate assets primarily consist of cash and equivalents.