Business Segments

12 Months Ended

Dec. 28, 2019

BUSINESS SEGMENTS

The Company’s portfolio of brands is organized into the following two operating segments, which the Company has determined to be reportable operating segments. During the first quarter of 2019, the brands that were formerly aligned with the Wolverine Outdoor & Lifestyle Group and Wolverine Heritage Group were realigned into a new operating segment, the Wolverine Michigan Group. The change was to align our brands under key leadership to best support innovation and efficiency. All prior period disclosures have been retrospectively adjusted to reflect these new reportable operating segments.


•	Wolverine Michigan Group, consisting of Merrell^® footwear and apparel, Cat^® footwear, Wolverine^® footwear and apparel, Chaco^® footwear, Hush Puppies^® footwear and apparel, Bates^® uniform footwear, Harley-Davidson^® footwear and Hytest^® safety footwear; and


•	Wolverine Boston Group, consisting of Sperry^® footwear and apparel, Saucony^® footwear and apparel, Keds^® footwear and apparel, and the Kids footwear business, which includes the Stride Rite^® licensed business, as well as kids' footwear offerings from Saucony^®, Sperry^®, Keds^®, Merrell^®, Hush Puppies^® and Cat^®.

The reportable segments are engaged in designing, manufacturing, sourcing, marketing, licensing and distributing branded footwear, apparel and accessories. Revenue for the reportable operating segments includes revenue from the sale of branded footwear, apparel and accessories to third-party customers; revenue from third-party licensees and distributors; and revenue from the Company’s consumer-direct businesses.

The Company also reports “Other” and “Corporate” categories. The Other category consists of the Company’s leather marketing operations, sourcing operations that include third-party commission revenues and multi-branded consumer-direct retail stores. The Corporate category consists of unallocated corporate expenses, organizational transformation costs, reorganization costs, restructuring and other related costs, impairment of intangible assets, environmental and other related costs, a foreign currency remeasurement gain recorded in the second quarter of fiscal 2018 and a pension settlement loss related to the Company's purchase of pension annuity contracts in the fourth quarter of fiscal 2018. The Company’s operating segments are determined based on how the Company internally reports and evaluates financial information used to make operating decisions. The operating segment managers all report directly to the chief operating decision maker.

Company management uses various financial measures to evaluate the performance of the reportable operating segments. The following is a summary of certain key financial measures for the respective fiscal periods indicated.



	Fiscal Year
(In millions)	2019			2018			2017
Revenue:
Wolverine Michigan Group	$	1,299.7		$	1,272.2		$	1,267.8
Wolverine Boston Group	910.9			895.5			988.8
Other	63.1			71.5			93.4
Total	$	2,273.7		$	2,239.2		$	2,350.0
Operating profit (loss):
Wolverine Michigan Group	$	244.8		$	257.6		$	243.7
Wolverine Boston Group	153.8			157.5			153.6
Other	2.9			3.1			5.2
Corporate	(230.5		)	(166.3		)	(370.9		)
Total	$	171.0		$	251.9		$	31.6
Depreciation and amortization expense:
Wolverine Michigan Group	$	2.4		$	2.7		$	2.9
Wolverine Boston Group	3.3			3.3			3.7
Other	2.4			3.1			3.5
Corporate	24.6			22.4			27.1
Total	$	32.7		$	31.5		$	37.2
Capital expenditures:
Wolverine Michigan Group	$	2.2		$	3.1		$	0.5
Wolverine Boston Group	5.7			1.2			1.6
Other	2.2			1.8			1.8
Corporate	24.3			15.6			28.5
Total	$	34.4		$	21.7		$	32.4



(In millions)	December 28, 2019		December 29, 2018
Total assets:
Wolverine Michigan Group	$	773.8	$	626.8
Wolverine Boston Group	1,354.8		1,282.2
Other	38.4		50.0
Corporate	313.0		224.1
Total	$	2,480.0	$	2,183.1
Goodwill:
Wolverine Michigan Group	$	144.4	$	143.8
Wolverine Boston Group	294.5		280.6
Total	$	438.9	$	424.4

Geographic dispersion of revenue from external customers, based on shipping destination is as follows:



	Fiscal Year
(In millions)	2019		2018		2017
United States	$	1,507.9	$	1,505.2	$	1,608.7
Foreign:
Europe, Middle East and Africa	343.1		325.7		322.4
Asia Pacific	193.7		186.0		189.4
Canada	117.9		116.7		121.2
Latin America	111.1		105.6		108.3
Total from foreign territories	765.8		734.0		741.3
Total revenue	$	2,273.7	$	2,239.2	$	2,350.0

The location of the Company’s tangible long-lived assets, which comprises property, plant and equipment and lease right-of-use assets, is as follows:



(In millions)	December 28, 2019		December 29, 2018		December 30, 2017
United States	$	247.2	$	117.1	$	122.4
Foreign countries	54.6		13.8		14.3
Total	$	301.8	$	130.9	$	136.7

The Company does not believe that it is dependent upon any single customer because no customer accounts for more than 10% of consolidated revenue in any year.

During fiscal 2019, the Company sourced 100% of its footwear products and apparel and accessories from third-party suppliers, located primarily in the Asia Pacific region. While changes in suppliers could cause delays in manufacturing and a possible loss of sales, management believes that other suppliers could provide similar products on comparable terms.