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 the United States and Canada, primarily to department and specialty stores and digital commerce sites operated by key department store customers and pure play digital commerce retailers; (ii) operating retail stores, which are primarily located in premium outlet centers in the United States and Canada, and digital commerce sites in the United States and Canada, 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 CALVIN KLEIN brand names for a broad array of products in North America. This segment also includes, since December 2016, the Company’s proportionate share of the net income or loss of its investment in its unconsolidated foreign affiliate in Mexico relating to the affiliate’s Calvin Klein business.

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, digital commerce sites operated by key department store customers and pure play digital commerce retailers, franchisees, distributors and licensees; (ii) operating retail stores and digital 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 CALVIN KLEIN brand names 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 its unconsolidated foreign affiliate in Australia relating to the affiliate’s Calvin Klein business and its unconsolidated Calvin Klein foreign affiliate in 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 the United States and Canada, primarily to department stores, principally Macy’s, Inc. and Hudson’s Bay Company, as well as digital commerce sites operated by these department store customers and pure play digital commerce retailers; (ii) operating retail stores, which are primarily located in premium outlet centers in the United States and Canada, and a digital commerce site in the United States, 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 names for a broad array of products in North America. This segment also includes, since December 2016, the Company’s proportionate share of the net income or loss of its investment in its unconsolidated foreign affiliate in Mexico relating to the affiliate’s Tommy Hilfiger business.

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, digital commerce sites operated by key department store customers and pure play digital commerce retailers, franchisees, distributors and licensees; (ii) operating retail stores in Europe, China and Japan and international digital 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 names 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 its unconsolidated Tommy Hilfiger foreign affiliates in Brazil and India and its unconsolidated foreign affiliate in Australia relating to the affiliate’s Tommy Hilfiger business. 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 further discussion.

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 and digital commerce sites operated by select wholesale partners and pure play digital commerce retailers 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 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 derives revenue from Company operated digital commerce sites in the United States through SpeedoUSA.com and, since March 30, 2017, TrueandCo.com. This segment also includes the Company’s proportionate share of the net income or loss of its investments in its unconsolidated foreign affiliates in Australia and, since December 2016, in Mexico relating to the affiliate’s Heritage Brands businesses.

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 throughout the United States and Canada, which primarily sell apparel, accessories and related products. A majority of the Company’s Heritage Brands stores offer a broad selection of Van Heusen men’s and women’s apparel, along with a limited selection of the Company’s dress shirt and neckwear offerings and IZOD Golf, Warner’s and Speedo brand products. Approximately half of these stores operate under the Van Heusen name, with the remaining stores featuring multiple brand names on the door signage.

The following tables present summarized information by segment:



	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
(In millions)	10/29/17		⁽¹⁾	10/30/16		⁽¹⁾	10/29/17		10/30/16
Revenue – Calvin Klein North America
Net sales	$	413.4		$	444.4		$	1,091.8	$	1,144.5
Royalty revenue	46.3			43.1			113.0		101.4
Advertising and other revenue	16.0			14.4			38.5		34.6
Total	475.7			501.9			1,243.3		1,280.5

Revenue – Calvin Klein International
Net sales	439.5			364.0			1,164.3		986.5
Royalty revenue	20.2			18.8			57.1		54.2
Advertising and other revenue	7.2			6.5			20.2		19.1
Total	466.9			389.3			1,241.6		1,059.8

Revenue – Tommy Hilfiger North America
Net sales	383.2			383.6			1,062.1		1,100.7
Royalty revenue	22.0			14.8			53.8		35.0
Advertising and other revenue	5.1			3.8			12.7		8.5
Total	410.3			402.2			1,128.6		1,144.2

Revenue – Tommy Hilfiger International
Net sales	595.0			512.3			1,581.9		1,399.0
Royalty revenue	11.8			11.6			33.6		33.3
Advertising and other revenue	1.7			1.1			8.3		2.7
Total	608.5			525.0			1,623.8		1,435.0

Revenue – Heritage Brands Wholesale
Net sales	324.4			354.2			967.9		964.1
Royalty revenue	4.7			5.1			14.4		15.3
Advertising and other revenue	0.8			1.1			2.6		2.9
Total	329.9			360.4			984.9		982.3

Revenue – Heritage Brands Retail
Net sales	64.7			64.9			190.7		191.7
Royalty revenue	0.8			0.5			2.6		1.7
Advertising and other revenue	0.2			0.1			0.4		0.2
Total	65.7			65.5			193.7		193.6

Total Revenue
Net sales	2,220.2			2,123.4			6,058.7		5,786.5
Royalty revenue	105.8			93.9			274.5		240.9
Advertising and other revenue	31.0			27.0			82.7		68.0
Total	$	2,357.0		$	2,244.3		$	6,415.9	$	6,095.4


⁽¹⁾	Revenue was impacted by fluctuations 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 Part I, Item 2 of this report for further discussion.



	Thirteen Weeks Ended								Thirty-Nine Weeks Ended
(In millions)	10/29/17			⁽²⁾	10/30/16			⁽²⁾	10/29/17			⁽²⁾	10/30/16			⁽²⁾
Income (loss) before interest and taxes – Calvin Klein North America	$	66.1			$	(0.7	)	⁽⁸⁾	$	156.0			$	92.6		^{(8) (12) (13)}

Income before interest and taxes – Calvin Klein International	76.3				69.6				175.4				172.3			^{(12) (13)}

Income before interest and taxes – Tommy Hilfiger North America	52.6			⁽³⁾	41.3				87.0			^{(3) (5)}	110.4

Income before interest and taxes – Tommy Hilfiger International	94.1			⁽⁴⁾	75.0			^{(9) (10)}	184.4			^{(4) (5)}	287.8			^{(9) (11)}

Income before interest and taxes – Heritage Brands Wholesale	28.4				41.2				89.2				77.4			⁽¹²⁾

Income before interest and taxes – Heritage Brands Retail	1.5				2.4				7.5				8.2

Loss before interest and taxes – Corporate⁽¹⁾	(38.3		)	⁽⁶⁾	(30.9		)		(125.1		)	^{(6) (7)}	(113.2		)	^{(12) (14)}

Income before interest and taxes	$	280.7			$	197.9			$	574.4			$	635.5

⁽¹⁾

Includes corporate expenses not allocated to any reportable segments, the Company’s proportionate share of the net income or loss of its investments in the parent company of the Karl Lagerfeld brand 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, actuarial gains and losses from the Company’s Pension Plans, SERP Plans and Postretirement Plans (which are generally recorded in the fourth quarter) and gains and losses from changes in the fair value of foreign currency option contracts.


⁽²⁾	Income (loss) before interest and taxes was impacted by fluctuations 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 Part I, Item 2 of this report for further discussion.


⁽³⁾	Income before interest and taxes for the thirteen and thirty-nine weeks ended October 29, 2017 included costs of $5.1 million and $19.2 million, respectively, associated with the relocation of the Company’s Tommy Hilfiger office in New York, including noncash depreciation expense.


⁽⁴⁾	Income before interest and taxes for the thirteen and thirty-nine weeks ended October 29, 2017 included costs of $6.4 million and $19.9 million, respectively, associated with the TH China acquisition, primarily consisting of amortization of short-lived assets.

⁽⁵⁾

Income before interest and taxes for the thirty-nine weeks ended October 29, 2017 included costs of $54.2 million associated with the agreements entered into on March 20, 2017 for a transaction to restructure the Company’s supply chain relationship with Li & Fung Trading Limited (“Li & Fung”), which were recorded in SG&A expenses. Under these agreements, the Company terminated its non-exclusive buying agency agreement with Li & Fung during the third quarter of 2017. Such costs were included in the Company’s segments as follows: $31.3 million in Tommy Hilfiger North America and $22.9 million in Tommy Hilfiger International. In the third quarter of 2017, the transaction closed and the $54.2 million liability previously accrued in 2017 was paid in full.


⁽⁶⁾	Loss before interest and taxes for the thirteen and thirty-nine weeks ended October 29, 2017 included costs of $2.5 million and $9.8 million, respectively, associated with the consolidation within the Company’s warehouse and distribution network in North America.

⁽⁷⁾

Loss before interest and taxes for the thirty-nine weeks ended October 29, 2017 included costs of $9.4 million related to the noncash settlement of certain of the Company’s benefit obligations related to its Pension Plans as a result of an annuity purchased for certain participants, under which such obligations were transferred to an insurer. Please see Note 8, “Retirement and Benefit Plans,” for further discussion.


⁽⁸⁾	(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 connection with the Mexico deconsolidation.


⁽⁹⁾	Income before interest and taxes for the thirteen and thirty-nine weeks ended October 30, 2016 included a gain of $18.1 million associated with a payment made to the Company to exit a TOMMY HILFIGER flagship store in Europe.


⁽¹⁰⁾	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, primarily consisting of valuation adjustments and amortization of short-lived assets.

⁽¹¹⁾

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, primarily 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 further discussion.

⁽¹²⁾

Income (loss) before interest and taxes for the thirty-nine weeks ended October 30, 2016 included costs of $9.8 million associated with the 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.


⁽¹³⁾	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.


⁽¹⁴⁾	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 further discussion.

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.