Segment Reporting

12 Months Ended

Sep. 27, 2014

Segment Reporting

Segment Reporting

4.     Segment Reporting

Segment information is prepared on the same basis that our CEO, who is our chief operating decision maker, manages the business, evaluates financial results, and makes key operating decisions. The structure includes a Domestic segment containing all U.S. Operations and immaterial operations related to international expansion, and a Canada segment containing all Canadian operations.

For a description of the operating segments, see Note 1, Nature of Business and Organization.  

Management evaluates the performance of the Company's operating segments based on several factors, including net sales to external customers and operating income. Net sales are recorded on a segment basis and intersegment sales are eliminated within the operating segment as part of the financial consolidation process. Operating income represents gross profit less selling, operating, general and administrative expenses. The Company's manufacturing operations occur within both the Domestic and Canada segments, and the costs of manufacturing are recognized in cost of sales in the operating segment in which the sale occurs. Information system technology services are mainly centralized while finance and accounting functions are primarily decentralized. Expenses consisting primarily of compensation and depreciation related to certain centralized administrative functions including information system technology are allocated to the operating segments.

Expenses not specifically related to an operating segment are presented under "Corporate Unallocated." Corporate Unallocated expenses are comprised mainly of the compensation and other related expenses of certain of the Company's senior executive officers and other selected employees who perform duties related to the entire enterprise. Corporate Unallocated expenses also include depreciation for corporate headquarters, sustainability expenses, interest expense not directly attributable to an operating segment, the majority of foreign exchange gains or losses, legal expenses and compensation of the Board of Directors. The Company does not disclose assets or property additions by segment as only consolidated asset information is provided to the CODM for use in decision making.

The following tables summarize selected financial data for segment disclosures for fiscal 2014, 2013 and 2012.

	For Fiscal 2014 (Dollars in thousands)
	Domestic		Canada		Corporate- Unallocated			Consolidated
Net sales	$	4,083,326	$	624,354	$	—		$	4,707,680
Operating income (loss)	$	1,016,577	$	102,605	$	(171,941	)	$	947,241
Depreciation and amortization	$	185,874	$	61,989	$	9,776		$	257,639
Stock compensation expense	$	14,071	$	2,729	$	13,873		$	30,673

	For Fiscal 2013 (Dollars in thousands)
	Domestic		Canada		Corporate- Unallocated			Consolidated
Net sales	$	3,725,008	$	633,092	$	—		$	4,358,100
Operating Income (loss)	$	826,092	$	87,674	$	(148,539	)	$	765,227
Depreciation and amortization	$	162,359	$	65,334	$	1,500		$	229,193
Stock compensation expense	$	9,909	$	2,519	$	13,653		$	26,081

	For Fiscal 2012 (Dollars in thousands)
	Domestic		Canada		Corporate- Unallocated			Consolidated
Net sales	$	3,233,674	$	625,524	$	—		$	3,859,198
Operating Income (loss)	$	576,949	$	76,198	$	(84,251	)	$	568,896
Depreciation and amortization	$	116,722	$	62,984	$	1,941		$	181,647
Stock compensation expense	$	7,808	$	1,890	$	8,170		$	17,868

Geographic Information

Net sales are attributed to countries based on the location of the customer. Information concerning net sales of principal geographic areas is as follows (in thousands):

	Fiscal 2014		Fiscal 2013		Fiscal 2012
Net Sales:
United States	$	4,074,968	$	3,721,182	$	3,248,543
Canada		621,460		634,360		609,828
Other		11,252		2,558		827
	$	4,707,680	$	4,358,100	$	3,859,198

Sales to customers that represented more than 10% of the Company's net sales included Wal-Mart, representing approximately 17%, 14% and 12% of consolidated net sales for fiscal years 2014, 2013 and 2012, respectively, and Costco, representing approximately 12% and 11% of consolidated net sales for fiscal 2014 and 2013, respectively. Sales to Wal-Mart and Costco in fiscal years 2014, 2013 and 2012 were through both the Domestic and Canada segments.

Information concerning long-lived assets of principal geographic area is as follows (in thousands) as of:

	September 27, 2014		September 28, 2013
Fixed Assets, net:
United States	$	1,010,181	$	844,471
Canada		125,155		135,440
Other		36,089		5,652
	$	1,171,425	$	985,563

Net Sales by Major Product Category

Net sales by major product category (in thousands):

	Fiscal 2014		Fiscal 2013		Fiscal 2012
Portion Packs	$	3,604,539	$	3,187,350	$	2,708,886
Brewers and Accessories		822,271		827,570		759,805
Other Products and Royalties		280,870		343,180		390,507
	$	4,707,680	$	4,358,100	$	3,859,198