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DISCONTINUED OPERATIONS | 12 Months Ended
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Dec. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS The Company continuously assesses the composition of our portfolio to ensure it is aligned with our strategic objectives and positioned to maximize growth and return to our shareholders. Nautica® Brand Business During the fourth quarter of 2017, the Company reached the strategic decision to exit the Nautica® brand business, and determined that it met the held-for-sale and discontinued operations accounting criteria. Accordingly, the Company began to report the results of the Nautica® brand business as discontinued operations in the Consolidated Statements of Income and present the related assets and liabilities as held-for-sale in the Consolidated Balance Sheets. These changes have been applied for all periods presented. The results of the Nautica® brand's North America business were previously reported in the Sportswear coalition, and the results of the Asia business were previously reported in the Outdoor & Action Sports coalition. The results of the Nautica® brand business recorded in the income (loss) from discontinued operations, net of tax line item were losses of $95.2 million for 2017 (including an estimated loss on sale of $25.5 million recorded in the fourth quarter of 2017) and income of $31.4 million and $54.0 million for 2016 and 2015 respectively. Certain corporate overhead costs and coalition costs previously allocated to the Nautica® brand business for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. In addition, the third quarter 2017 goodwill impairment charge of $104.7 million related to the Nautica® reporting unit, previously excluded from the calculation of coalition profit, was reclassified to discontinued operations. Licensing Business In the first quarter of 2017, the company reached the strategic decision to exit its Licensing Business, which comprised the Licensed Sports Group (“LSG”) and JanSport® brand collegiate businesses. Accordingly, the Company began to report the results of the businesses as discontinued operations in the Consolidated Statements of Income and present the related assets and liabilities as held-for-sale in the Consolidated Balance Sheets. These changes have been applied for all periods presented. LSG included the Majestic® brand and was previously included within our Imagewear coalition. On April 28, 2017, VF completed the sale of LSG to Fanatics, Inc. The Company received proceeds of $213.5 million, net of cash sold, and recorded an after-tax loss on sale of $4.1 million, which is included in the income (loss) from discontinued operations, net of tax line item in the 2017 Consolidated Statements of Income. The LSG results recorded in the income (loss) from discontinued operations, net of tax line item were losses of $4.6 million for 2017 (including the loss on sale of $4.1 million) and income of $63.3 million and $44.2 million for 2016 and 2015, respectively. In the fourth quarter of 2017, VF completed the sale of the assets associated with the JanSport® brand collegiate business, which was previously included within our Outdoor & Action Sports coalition. The Company received net proceeds of $1.5 million and recorded an after-tax loss on sale of $0.2 million, which is included in the income (loss) from discontinued operations, net of tax line item in the 2017 Consolidated Statements of Income. The JanSport® brand collegiate results recorded in the income (loss) from discontinued operations, net of tax line item were losses of $6.5 million (including the loss on sale of $0.2 million), $1.0 million and $0.2 million for 2017, 2016 and 2015, respectively. Certain corporate overhead and other costs previously allocated to the Licensing Business for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. Under the terms of the transition services agreement, the Company is providing certain support services for periods ranging from three to 24 months from the closing date of the transaction. Revenue and expense items associated with the transition services are primarily recorded in the Imagewear coalition. Contemporary Brands Coalition Beginning in the second quarter of 2016, VF reported the results of the Contemporary Brands coalition within discontinued operations in the Consolidated Statements of Income. These changes have been applied for all periods presented. On August 26, 2016, VF completed the sale of its Contemporary Brands coalition to Delta Galil Industries, Ltd. for $116.0 million, net of cash sold. The Contemporary Brands coalition included the businesses of the 7 For All Mankind®, Splendid® and Ella Moss® brands and was previously disclosed as a separate reportable segment of VF. The transaction resulted in an after-tax loss on sale of $104.4 million which was included in the income (loss) from discontinued operations, net of tax line item in the 2016 Consolidated Statement of Income. The results of the Contemporary Brands coalition recorded in the income (loss) from discontinued operations, net of tax line item were losses of $98.4 million (including the loss on sale of $104.4 million) and $83.5 million for 2016 and 2015, respectively. Certain corporate overhead costs and interest expense previously allocated to the Contemporary Brands coalition for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. In addition, goodwill and intangible asset impairment charges related to the Contemporary Brands coalition, previously excluded from the calculation of coalition profit, were reclassified to discontinued operations. VF provided certain support services under transition services agreements and completed these services during the third quarter of 2017. These services did not have a material impact on VF’s 2017 Consolidated Statement of Income. Summarized Discontinued Operations Financial Information The following table summarizes the major line items included in the income (loss) from discontinued operations for the Nautica® brand business, the Licensing Business and the Contemporary Brands coalition:
(In thousands) |  | 2017 |  |  | 2016 |  | 2015
Revenues |  | $ | 588,383 |  |  |  | $ | 1,180,677 |  |  | $ | 1,380,351 |
Cost of goods sold |  | 349,382 |  |  |  | 691,715 |  |  | 790,034 |
Selling, general and administrative expenses |  | 191,898 |  |  |  | 354,773 |  |  | 430,587 |
Impairment of goodwill and intangible assets |  | 104,651 |  |  |  | — |  |  | 143,562 |
Interest income (expense), net |  | (27 | ) |  |  | (199 | ) |  | (663 | )
Other income (expense), net |  | 6 |  |  |  | 2 |  |  | 627 |
Income (loss) from discontinued operations before income taxes |  | (57,569 | ) |  |  | 133,992 |  |  | 16,132 |
Loss on the sale of discontinued operations, before income taxes |  | (34,019 | ) |  |  | (154,275 | ) |  | — |
Total income (loss) from discontinued operations before income taxes |  | (91,588 | ) |  |  | (20,283 | ) |  | 16,132 |
Income tax (expense) benefit(a) |  | (14,698 | ) |  |  | 15,535 |  |  | (1,595 | )
Income (loss) from discontinued operations, net of tax |  | $ | (106,286 | ) |  |  | $ | (4,748 | ) |  | $ | 14,537 |
(a) | The full year 2017 income tax expense is impacted by $8.6 million of tax expense related to GAAP and tax basis differences for LSG. Additionally, the 2017 goodwill impairment charge and estimated loss on sale related to the Nautica® brand business were nondeductible for income tax purposes.
The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented.
(In thousands) |  | 2017 |  |  | 2016
Accounts receivable, net |  | $ | 35,826 |  |  |  | $ | 48,881 |
Inventories |  | 44,735 |  |  |  | 144,754 |
Other current assets |  | 2,771 |  |  |  | 4,345 |
Property, plant and equipment |  | 26,852 |  |  |  | 43,690 |
Intangible assets |  | 262,352 |  |  |  | 305,770 |
Goodwill |  | 49,005 |  |  |  | 182,292 |
Other assets |  | 6,053 |  |  |  | 7,570 |
Allowance to adjust assets to estimated fair value, less costs of disposal |  | (25,529 | ) |  |  | — |
Total assets of discontinued operations(a) |  | $ | 402,065 |  |  |  | $ | 737,302 |
Accounts payable |  | $ | 22,421 |  |  |  | $ | 44,450 |
Accrued liabilities |  | 21,408 |  |  |  | 29,006 |
Other liabilities |  | 13,449 |  |  |  | 14,624 |
Deferred income tax liabilities(b) |  | 53,474 |  |  |  | 73,337 |
Total liabilities of discontinued operations(a) |  | $ | 110,752 |  |  |  | $ | 161,417 |
(a) | Amounts at December 2016 have been classified as current and long-term in the Consolidated Balance Sheet.
(b) | Deferred income tax balances reflect VF's consolidated netting by jurisdiction.
The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows. The following table summarizes depreciation and amortization, capital expenditures and the significant operating noncash items from discontinued operations for each of the periods presented:
(In thousands) |  | 2017 |  |  | 2016 |  | 2015
Depreciation and amortization |  | $ | 14,023 |  |  |  | $ | 27,360 |  |  | $ | 39,189 |
Capital expenditures |  | 2,592 |  |  |  | 4,795 |  |  | 13,536 |
Impairment of goodwill and intangible assets |  | 104,651 |  |  |  | — |  |  | 143,562 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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