Annual report pursuant to Section 13 and 15(d)

Segments and Geographic Information

v2.4.1.9
Segments and Geographic Information
12 Months Ended
Jan. 31, 2015
Segments and Geographic Information  
Segments and Geographic Information

10. SEGMENTS AND GEOGRAPHIC INFORMATION

 

We consider our Michaels-U.S., Michaels-Canada and Aaron Brothers to be our operating segments for purposes of determining reportable segments based on the criteria of ASC 280, Segment Reporting (“ASC 280”). We determined that each of our operating segments have similar economic characteristics and meet the aggregation criteria set forth in ASC 280. Therefore, we combine our operating segments into one reporting segment.

 

Our net sales and total assets by country are as follows (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year

 

 

    

2014

    

2013

    

2012

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

United States

 

$

4,277 

 

$

4,132 

 

$

3,989 

 

Canada

 

 

461 

 

 

438 

 

 

419 

 

Consolidated Total

 

$

4,738 

 

$

4,570 

 

$

4,408 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets:

 

 

 

 

 

 

 

 

 

 

United States

 

$

1,870 

 

$

1,688 

 

$

1,446 

 

Canada

 

 

135 

 

 

123 

 

 

109 

 

Consolidated Total

 

$

2,005 

 

$

1,811 

 

$

1,555 

 

 

We present assets based on their physical, geographic location. Certain assets located in the U.S. are also used to support our Canadian operations, but we do not allocate these assets to Canada.

 

Our net sales by major product categories are as follows (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year

 

 

    

2014

    

2013

    

2012

 

General crafts

 

$

2,409 

 

$

2,371 

 

$

2,220 

 

Home décor and seasonal

 

 

971 

 

 

898 

 

 

890 

 

Framing

 

 

903 

 

 

862 

 

 

836 

 

Scrapbooking

 

 

455 

 

 

439 

 

 

462 

 

 

 

$

4,738 

 

$

4,570 

 

$

4,408 

 

 

Our chief operating decision makers evaluate historical operating performance and plan and forecast future periods’ operating performance based on operating income and earnings before interest, income taxes, depreciation, amortization and losses on early extinguishments of debt and refinancing costs (“EBITDA (excluding losses on early extinguishments of debt and refinancing costs)”). We believe these metrics more closely reflect the operating effectiveness of factors over which management has control. A reconciliation of EBITDA (excluding losses on early extinguishments of debt and refinancing costs) to net income is presented below (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year

 

 

    

2014

    

2013

    

2012

 

Net income

 

$

217 

 

$

243 

 

$

200 

 

Interest expense

 

 

199 

 

 

215 

 

 

245 

 

Losses on early extinguishments of debt and refinancing costs

 

 

74 

 

 

14 

 

 

33 

 

Provision for income taxes

 

 

134 

 

 

136 

 

 

115 

 

Depreciation and amortization

 

 

111 

 

 

106 

 

 

97 

 

EBITDA (excluding losses on early extinguishments of debt and refinancing costs)

 

$

735 

 

$

714 

 

$

690