Famous Footwear 2011 Annual Report Download - page 64

62 2011 BROWN SHOE COMPANY, INC. FORM 10-K
The Company’s reportable segments are operating units that market to di erent customers and are each managed
separately as they distribute their products on a retail or wholesale basis. An operating segment’s performance is evaluated
and resources are allocated based on operating earnings (loss). Operating earnings (loss) represent gross profi t, less selling
and administrative expenses and restructuring and other special charges, net. The accounting policies of the reportable
segments are the same as those described in Note 1. Intersegment sales are generally recorded at a profi t to the selling
segment. All intersegment earnings related to inventory on hand at the purchasing segment are eliminated against the
earnings of the selling segment.
Famous Wholesale Specialty
($ thousands) Footwear Operations Retail Other Total
Fiscal 2011
External sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,456,314 $ 870,873 $ 255,637 $ − $ 2,582,824
Intersegment sales . . . . . . . . . . . . . . . . . . . . . . . . . 2,156 211,631 − − 213,787
Depreciation and amortization . . . . . . . . . . . . . . . . . . 26,116 15,521 3,517 16,295 61,449
Operating earnings (loss) . . . . . . . . . . . . . . . . . . . . . 62,515 16,739 (7,627) (36,077) 35,550
Operating segment assets. . . . . . . . . . . . . . . . . . . . . 435,344 595,355 56,151 140,626 1,227,476
Purchases of property and equipment . . . . . . . . . . . . . . 16,272 5,991 3,901 1,693 27,857
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . 273 15 − 10,419 10,707
Fiscal 2010
External sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,486,538 $ 754,389 $ 263,164 $ − $ 2,504,091
Intersegment sales . . . . . . . . . . . . . . . . . . . . . . . . . 1,939 192,157 − − 194,096
Depreciation and amortization . . . . . . . . . . . . . . . . . . 26,017 9,410 3,852 13,238 52,517
Operating earnings (loss) . . . . . . . . . . . . . . . . . . . . . 90,419 32,227 (5,970) (44,012) 72,664
Operating segment assets. . . . . . . . . . . . . . . . . . . . . 473,098 401,700 56,941 216,304 1,148,043
Purchases of property and equipment . . . . . . . . . . . . . . 22,066 2,619 2,730 3,366 30,781
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . 253 − − 23,793 24,046
Fiscal 2009
External sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,363,617 $ 631,785 $ 246,566 $ − $ 2,241,968
Intersegment sales . . . . . . . . . . . . . . . . . . . . . . . . . 2,186 193,114 − − 195,300
Depreciation and amortization . . . . . . . . . . . . . . . . . . 29,405 9,908 4,476 9,506 53,295
Operating earnings (loss) . . . . . . . . . . . . . . . . . . . . . 44,617 41,129 (14,246) (39,977) 31,523
Operating segment assets. . . . . . . . . . . . . . . . . . . . . 453,927 292,052 62,154 232,017 1,040,150
Purchases of property and equipment . . . . . . . . . . . . . . 19,129 1,888 1,931 1,932 24,880
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . 1,127 48 − 23,923 25,098
Following is a reconciliation of operating earnings to earnings before income taxes from continuing operations:
($ thousands) 2011 2010 2009
Operating earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35,550 $ 72,664 $ 31,523
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,141) (19,647) (20,195)
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,003) − −
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 644 203 374
Earnings before income taxes from continuing operations. . . . . . . . . . . . . . . . . . . . . . . $ 9,050 $ 53,220 $ 11,702
In 2011, the impact of restructuring and other special charges, net included in operating earnings was as follows:
• Wholesale – $10.5 million of charges related to the Company’s portfolio realignment and $2.5 million related to
integration costs of ASG.
• Other – $4.0 million of charges related to the Company’s acquisition and integration costs of ASG and $3.3 million of
charges related to portfolio realignment.
• Famous Footwear – $2.8 million of charges related to the Company’s portfolio realignment.
• Specialty Retail – $0.6 million of charges related to the Company’s portfolio realignment.
In 2010, the impact of restructuring and other special charges, net, included in operating earnings was as follows:
• Other – $6.1 million of charges related to the Company’s information technology initiatives and $1.1 million of charges
related to the acquisition of ASG.
• Wholesale Operations – $0.7 million of charges related to the Company’s information technology initiatives.
In 2009, the impact of restructuring and other special charges, net included in operating earnings was as follows:
• Other – $8.9 million of charges related to the Company’s information technology initiatives and $4.6 million of charges
related to the Company’s organizational changes, partially o set by $1.9 million of income related to the Company’s
headquarters consolidation.
• Wholesale Operations – $0.3 million of charges related to the Company’s information technology initiatives.
For geographic purposes, the domestic operations include the wholesale distribution of licensed, branded and private-
label footwear to a variety of retail customers, including the Company’s Famous Footwear and Specialty Retail stores and
e-commerce business.