Famous Footwear 2013 Annual Report Download - page 65

2013 BROWN SHOE COMPANY, INC. FORM 10-K 63
The Other segment includes corporate assets and administrative expenses and other costs and recoveries that are not
allocated to the operating units.
The Company’s retail and wholesale reportable segments are operating units that market to dierent customers and are
each managed separately. An operating segment’s performance is evaluated and resources are allocated based on operating
earnings (loss). Operating earnings (loss) represent gross profit, less selling and administrative expenses, restructuring and
other special charges, net and impairment of assets held for sale. The accounting policies of the reportable segments are
the same as those described in Note 1 to the consolidated financial statements. Intersegment sales are generally recorded
at a profit 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.
Following is a summary of certain key financial measures for the respective periods. External sales, intersegment sales,
and operating earnings (loss) exclude discontinued operations. Segment assets, depreciation and amortization, amortization
of debt issuance costs and debt discount, purchases of property and equipment, and capitalized software include both
continuing operations and discontinued operations.
Famous Wholesale Specialty
($ thousands) Footwear Operations Retail Other Total
Fiscal 2013
External sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,527,537 $ 763,670 $ 221,906 $ – $ 2,513,113
Intersegment sales . . . . . . . . . . . . . . . . . . . . . . . . . 2,424 205,469 – – 207,893
Depreciation and amortization . . . . . . . . . . . . . . . . . . 25,915 10,019 3,423 15,972 55,329
Amortization of debt issuance costs and debt discount . . . . – – – 2,513 2,513
Operating earnings (loss) . . . . . . . . . . . . . . . . . . . . . 107,126 43,130 (4,965) (46,674) 98,617
Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 433,781 434,532 95,138 185,952 1,149,403
Purchases of property and equipment . . . . . . . . . . . . . . 32,728 2,221 3,805 5,214 43,968
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . 193 122 – 4,920 5,235
Fiscal 2012
External sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,514,349 $ 724,907 $ 238,540 $ – $ 2,477,796
Intersegment sales . . . . . . . . . . . . . . . . . . . . . . . . . 2,311 220,207 – – 222,518
Depreciation and amortization . . . . . . . . . . . . . . . . . . 22,819 13,688 2,991 15,285 54,783
Amortization of debt issuance costs and debt discount . . . . – – – 2,561 2,561
Operating earnings (loss) . . . . . . . . . . . . . . . . . . . . . 94,096 30,247 (8,850) (41,015) 74,478
Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 472,180 509,237 59,475 133,081 1,173,973
Purchases of property and equipment . . . . . . . . . . . . . . 34,931 8,969 6,716 5,185 55,801
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . – 3 – 7,925 7,928
Fiscal 2011
External sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,456,314 $ 722,815 $ 255,637 $ – $ 2,434,766
Intersegment sales . . . . . . . . . . . . . . . . . . . . . . . . . 2,156 206,258 – – 208,414
Depreciation and amortization . . . . . . . . . . . . . . . . . . 26,116 15,521 3,517 13,957 59,111
Amortization of debt issuance costs and debt discount . . . . – – – 2,338 2,338
Operating earnings (loss) . . . . . . . . . . . . . . . . . . . . . 62,515 11,721 (7,627) (36,077) 30,532
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
Following is a reconciliation of operating earnings to earnings before income taxes from continuing operations:
($ thousands) 2013 2012 2011
Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 98,617 $ 74,478 $ 30,532
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,254) (22,973) (25,428)
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (1,003)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 322 569
Earnings before income taxes from continuing operations. . . . . . . . . . . . . . . . . . . . . . . $ 77,740 $ 51,827 $ 4,670
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.
The Company’s foreign operations primarily consist of wholesale operations in the Far East and retail operations in Canada
and Guam. The Far East operations include first-cost transactions, where footwear is sold at foreign ports to customers who
then import the footwear into the United States and other countries.