|
Significant components
of the Company’s deferred income tax assets and liabilities were
as follows (in thousands):
As of February 3,
2001, no deferred taxes have been provided on the undistributed earnings
of the Company’s Canadian subsidiary. It is anticipated no additional
United States tax would be incurred if the accumulated Canadian earnings
were distributed given the current United States and Canadian income tax
rates. No deferred taxes have been provided on the accumulated unremitted
earnings of the Company’s other foreign subsidiaries as of February
3, 2001. The Company’s intention is to reinvest these earnings indefinitely
or to repatriate the earnings only when it is tax effective to do so.
In the event these other foreign entities’ earnings were distributed,
it is estimated U.S. taxes, net of available foreign tax credits, of approximately
$7.5 million would be due.
[5]
BUSINESS SEGMENT INFORMATION
The Company’s
reportable segments include Famous Footwear, Wholesale operations, and
Naturalizer Retail.
Famous Footwear,
which represents the Company’s largest division, operated 925 stores
at the end of fiscal 2000, selling branded footwear for the entire family.
Wholesale operations
source and market branded, licensed and private label footwear primarily
to department stores, mass-merchandisers and company-owned Naturalizer
Retail stores and Famous Footwear.
Naturalizer Retail
specialty store operations included 331 stores in the United States and
150 stores in Canada at year-end.
The “Other”
segment includes the corporate assets and general and administrative expenses,
which are not allocated to the operating units. Fiscal 2000 also included
the Company’s investment in Shoes. com, Inc., a footwear e-commerce
company. Fiscal 1999 and 1998 included the Scholze Tannery business, which
was sold at the end of fiscal 1999, and Pagoda International, the Company’s
international marketing division, which was liquidated in fiscal 1999.
The Company’s
reportable segments are operating units that market to different 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 allocated based on operating profit. Operating
profit represents gross profit less selling and administrative expenses
and other operating income or expense. The accounting policies of the
reportable segments are the same as those described in the summary of
significant accounting policies. Intersegment sales are generally recorded
at a profit to the selling division. All inter-segment profits related
to inventory on hand at the purchasing division are eliminated against
the earnings of the selling division.
In fiscal 1999, the
Company revised its method of determining the level of profit to be earned
on inter-segment sales from the Wholesale operations to Naturalizer Retail.
The change resulted in an increase to operating profit of $2.4 million
in fiscal 1999 for Naturalizer Retail and a corresponding decrease to
operating profit for the Wholesale operations.
|
