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Business Segment Information | 9 Months Ended
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Sep. 30, 2017
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Business Segment Information | Business Segment Information In the first quarter of 2017, the Company realigned its reporting segments to reflect the new model under which the business will be managed and results will be reviewed by the chief executive officer, who is the Company’s chief operating decision maker. The former Direct to Consumer segment, which consisted of the Company’s U.S. value-based (“outlet”) stores, legacy catalog business and U.S. retail Internet operations, was eliminated. The Company’s U.S. retail Internet operations, which sells products directly to consumers, is now reported in the respective Innerwear and Activewear segments. Other consists of the Company’s U.S. value-based (“outlet”) stores, U.S. hosiery business (previously reported in the Innerwear segment) and legacy catalog operations. Prior year segment sales and operating profit results have been revised to conform to the current year presentation. The Company’s operations are managed and reported in three operating segments, each of which is a reportable segment for financial reporting purposes: Innerwear, Activewear and International. These segments are organized principally by product category and geographic location. Each segment has its own management that is responsible for the operations of the segment’s businesses, but the segments share a common supply chain and media and marketing platforms. The types of products and services from which each reportable segment derives its revenues are as follows:
• | Innerwear sells basic branded products that are replenishment in nature under the product categories of men’s underwear, panties, children’s underwear, socks and intimate apparel, which includes bras and shapewear.
• | Activewear sells basic branded products that are primarily seasonal in nature under the product categories of branded printwear and retail activewear, as well as licensed logo apparel in collegiate bookstores, mass retail and other channels.
• | International primarily relates to the Europe, Australia, Asia, Latin America and Canada geographic locations that sell products that span across the Innerwear and Activewear reportable segments.
The Company evaluates the operating performance of its segments based upon segment operating profit, which is defined as operating profit before general corporate expenses, acquisition-related and integration charges and amortization of intangibles. The accounting policies of the segments are consistent with those described in Note 2 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2016.
| Quarter Ended |  | Nine Months Ended
September 30, 2017 |  | October 1, 2016 |  | September 30, 2017 |  | October 1, 2016
Net sales: |  |  |  |  |  |  |
Innerwear | $ | 644,059 |  |  | $ | 679,096 |  |  | $ | 1,868,255 |  |  | $ | 1,953,807 |
Activewear | 519,496 |  |  | 516,713 |  |  | 1,226,595 |  |  | 1,207,767 |
International | 556,730 |  |  | 478,122 |  |  | 1,509,370 |  |  | 1,026,871 |
Other | 78,985 |  |  | 87,088 |  |  | 222,015 |  |  | 264,445 |
Total net sales | $ | 1,799,270 |  |  | $ | 1,761,019 |  |  | $ | 4,826,235 |  |  | $ | 4,452,890 |
| Quarter Ended |  | Nine Months Ended
| September 30, 2017 |  | October 1, 2016 |  | September 30, 2017 |  | October 1, 2016
Segment operating profit: |  |  |  |  |  |  |
Innerwear | $ | 141,002 |  |  | $ | 147,902 |  |  | $ | 407,982 |  |  | $ | 435,660 |
Activewear | 79,015 |  |  | 72,962 |  |  | 162,053 |  |  | 160,076 |
International | 76,414 |  |  | 61,312 |  |  | 185,216 |  |  | 109,184 |
Other | 10,162 |  |  | 9,199 |  |  | 16,250 |  |  | 27,408 |
Total segment operating profit | 306,593 |  |  | 291,375 |  |  | 771,501 |  |  | 732,328 |
Items not included in segment operating profit: |  |  |  |  |  |  |
General corporate expenses | (26,136 | ) |  | (14,776 | ) |  | (63,354 | ) |  | (54,798 | )
Acquisition-related and integration charges | (16,874 | ) |  | (42,587 | ) |  | (81,303 | ) |  | (91,651 | )
Amortization of intangibles | (10,279 | ) |  | (5,660 | ) |  | (23,595 | ) |  | (13,912 | )
Total operating profit | 253,304 |  |  | 228,352 |  |  | 603,249 |  |  | 571,967 |
Other expenses | (1,881 | ) |  | (1,559 | ) |  | (4,659 | ) |  | (50,533 | )
Interest expense, net | (43,917 | ) |  | (43,433 | ) |  | (130,184 | ) |  | (111,539 | )
Income from continuing operations before income tax expense | $ | 207,506 |  |  | $ | 183,360 |  |  | $ | 468,406 |  |  | $ | 409,895 |
For the quarter ended September 30, 2017, the Company incurred acquisition-related and integration charges of $16,874, of which $2,230 is reported in the “Cost of sales” line and $14,644 is reported in the “Selling, general and administrative expenses” line in the Condensed Consolidated Statement of Income. For the quarter ended October 1, 2016, the Company incurred acquisition-related and integration charges of $42,587, of which $13,563 is reported in the “Cost of sales” line and $29,024 is reported in the “Selling, general and administrative expenses” line in the Condensed Consolidated Statement of Income. For the nine months ended September 30, 2017, the Company incurred acquisition-related and integration charges of $81,303, of which $21,989 is reported in the “Cost of sales” line and $59,314 is reported in the “Selling, general and administrative expenses” line. For the nine months ended October 1, 2016, the Company incurred acquisition-related and integration charges of $138,942, of which $27,732 is reported in the “Cost of sales” line, $63,919 is reported in the “Selling, general and administrative expenses” line and $47,291 is reported in the “Other expenses” line in the Condensed Consolidated Statement of Income. As part of the Hanes Europe Innerwear acquisition strategy, in 2015 the Company identified management and administrative positions that were considered non-essential and/or duplicative that have or will be eliminated. As of December 31, 2016, the Company had accrued approximately $32,542 for expected benefit payments related to employee termination and other benefits for affected employees. During the nine months ended September 30, 2017, there were approximately $9,836 of benefit payments and foreign currency adjustments, resulting in an accrual of $22,706, of which, $10,905 and $11,801, is included in the “Accrued liabilities” and “Other noncurrent liabilities” lines of the Condensed Consolidated Balance Sheet, respectively. In the first quarter of 2017, the Company approved an action to resize its U.S. corporate office workforce through separation programs affecting employees primarily in the Innerwear and Activewear segments. As of April 1, 2017, the Company accrued approximately $10,145 for employee termination and other benefits in accordance with expected benefit payments, with the majority of charges reflected in the “Selling, general and administrative expenses” line of the Condensed Consolidated Statements of Income. During the nine months ended September 30, 2017, there were approximately $8,477 of benefit payments and an additional accrual of $4,653, resulting in an ending accrual of $6,321 included in the “Accrued liabilities” line of the Condensed Consolidated Balance Sheet. The Company closed its Nanjing, China textile plant in the first quarter of 2017 as part of a plan to realign its Asia textile production in order to better support its global commercial footprint, which has evolved over the past 10 years through major acquisitions in the United States, Europe and Australia. As of April 1, 2017, the Company accrued approximately $8,534 for employee termination and other benefits in accordance with expected benefit payments for employees. The charges, along with other facility exit costs of $2,831, were reflected in the “Cost of sales” line of the Condensed Consolidated Statements of Income. During the nine months ended September 30, 2017, there were approximately $8,057 of benefit payments and foreign currency adjustments, resulting in an accrual of $477, which is included in the “Accrued liabilities” line of the Condensed Consolidated Balance Sheet. As of September 30, 2017, the Nanjing, China textile plant, valued at $65,570, was classified as assets held for sale and reported within the “Other current assets” line of the Condensed Consolidated Balance Sheet.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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