What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-03 compared with 2021-08-06 · 284 added, 166 removed, 794 unchanged (36% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

(In thousands, except share amounts) June 2021 March 2021 June 2020

(In thousands, except share amounts) September 2021 March 2021 September 2020

Current assets

2 unchanged sentences

Accounts receivable, less allowance for doubtful accounts of:

June 2021 - $ 33,666 ;

September 2021 - $ 33,822 ;

March 2021 - $ 33,654 ;

June 2020 - $ 38,179

September 2020 - $ 36,121

1,787,331 1,298,020 1,606,479

40 unchanged sentences

shares authorized, 25,000,000 ;

no shares outstanding at June 2021, March 2021 or June 2020

no shares outstanding at September 2021, March 2021 or September 2020

Common Stock, stated value $ 0.25 ;

shares authorized, 1,200,000,000 ;

shares outstanding at June 2021 - 392,621,561 ;

shares outstanding at September 2021 - 392,758,016 ;

March 2021 - 391,941,477 ;

June 2020 - 389,641,245

September 2020 - 389,964,718

98,190 97,985 97,491

11 unchanged sentences

Consolidated Statements of Operations

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands, except per share amounts) 2021 2020 2021 2020

7 unchanged sentences

2,639,749 2,288,376 4,631,422 3,611,478

Operating income (loss)

Operating income

558,486 319,948 761,370 73,139

Interest income

1,518 3,176 3,660 4,489

Interest expense

4 unchanged sentences

531,665 293,661 710,815 ( 19,284 )

Income tax expense (benefit)

Income tax expense

67,612 50,415 92,790 15,212

1 unchanged sentence

464,053 243,246 618,025 ( 34,496 )

Income (loss) from discontinued operations, net of tax

Income from discontinued operations, net of tax

— 13,476 170,273 5,605

22 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2021 2020 2021 2020

3 unchanged sentences

Foreign currency translation and other

Gains arising during the period

Gains (losses) arising during the period

( 12,314 ) ( 33,483 ) 20,857 ( 29,629 )

Reclassification of foreign currency translation losses

Income tax effect

( 11,686 ) 18,582 ( 7,804 ) 24,837

Defined benefit pension plans

Current period actuarial losses

( 439 ) ( 8,853 ) ( 4,452 ) ( 8,853 )

Amortization of net deferred actuarial losses

2,871 2,898 5,711 5,761

Amortization of deferred prior service credits

1 unchanged sentence

Reclassification of net actuarial loss from settlement charge

76 572 1,024 572

Income tax effect

( 595 ) 386 64 722

Derivative financial instruments

2 unchanged sentences

Income tax effect

( 5,978 ) 7,197 ( 5,786 ) 8,727

Reclassification of net (gains) losses realized

10 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended June

Six Months Ended September

(In thousands) 2021 2020

2 unchanged sentences

$ 788,298 $ ( 28,891 )

Income (loss) from discontinued operations, net of tax

Income from discontinued operations, net of tax

170,273 5,605

7 unchanged sentences

Stock-based compensation

44,283 26,113

Provision for doubtful accounts

21 unchanged sentences

INVESTING ACTIVITIES

Business acquisitions, net of cash received

Proceeds from sale of businesses, net of cash sold

1 unchanged sentence

— ( 800,000 )

Proceeds from sale of short-term investments

Capital expenditures

23 unchanged sentences

Effect of foreign currency rate changes on cash, cash equivalents and restricted cash

( 10,958 ) ( 8,082 )

Net change in cash, cash equivalents and restricted cash

9 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended June

Six Months Ended September

(In thousands) 2021 2020

9 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three Months Ended June 2021

Three Months Ended September 2021

Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit)

(In thousands, except share amounts) Shares Amounts Total

Balance, March 2021 391,941,477 $ 97,985 $ 3,777,645 $ ( 1,009,000 ) $ 189,534 $ 3,056,164

Balance, June 2021 392,621,561 $ 98,155 $ 3,824,656 $ ( 965,886 ) $ 317,105 $ 3,274,030

Net income (loss)

10 unchanged sentences

— — — 47,256 — 47,256

Balance, September 2021 392,758,016 $ 98,190 $ 3,854,687 $ ( 940,834 ) $ 586,438 $ 3,598,481

Three Months Ended September 2020

Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit)

(In thousands, except share amounts) Shares Amounts Total

Balance, June 2020 389,641,245 $ 97,410 $ 4,010,817 $ ( 897,541 ) $ ( 298,088 ) $ 2,912,598

Three Months Ended June 2020

Net income (loss)

— — — — 256,722 256,722

Dividends on Common Stock ($ 0.48 per share)

— — ( 186,892 ) — — ( 186,892 )

Stock-based compensation, net

323,473 81 28,433 — ( 3,587 ) 24,927

Foreign currency translation and other

— — — ( 14,901 ) — ( 14,901 )

Defined benefit pension plans

— — — ( 5,014 ) — ( 5,014 )

Derivative financial instruments

— — — ( 42,202 ) — ( 42,202 )

Balance, September 2020 389,964,718 $ 97,491 $ 3,852,358 $ ( 959,658 ) $ ( 44,953 ) $ 2,945,238

Continued on next page.

See notes to consolidated financial statements.

VF Corporation Q2 FY22 Form 10-Q 8

VF CORPORATION

Consolidated Statements of Stockholders’ Equity

Six Months Ended September 2021

Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit)

13 unchanged sentences

— — — 53,001 — 53,001

Balance, June 2020 389,641,245 $ 97,410 $ 4,010,817 $ ( 897,541 ) $ ( 298,088 ) $ 2,912,598

Balance, September 2021 392,758,016 $ 98,190 $ 3,854,687 $ ( 940,834 ) $ 586,438 $ 3,598,481

Six Months Ended September 2020

Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit)

(In thousands, except share amounts) Shares Amounts Total

Balance, March 2020 388,812,158 $ 97,203 $ 4,183,780 $ ( 930,958 ) $ 7,309 $ 3,357,334

Net income (loss)

— — — — ( 28,891 ) ( 28,891 )

Dividends on Common Stock ($ 0.96 per share)

— — ( 373,638 ) — — ( 373,638 )

Stock-based compensation, net

1,152,560 288 42,216 — ( 23,371 ) 19,133

Foreign currency translation and other

— — — 37,572 — 37,572

Defined benefit pension plans

— — — ( 1,832 ) — ( 1,832 )

Derivative financial instruments

— — — ( 64,440 ) — ( 64,440 )

Balance, September 2020 389,964,718 $ 97,491 $ 3,852,358 $ ( 959,658 ) $ ( 44,953 ) $ 2,945,238

See notes to consolidated financial statements.

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The Company's current fiscal year runs from April 4, 2021 through April 2, 2022 ("Fiscal 2022").

Accordingly, this Form 10-Q presents our first quarter of Fiscal 2022.

For presentation purposes herein, all references to periods ended June 2021 and June 2020 relate to the fiscal periods ended on July 3, 2021 and June 27, 2020, respectively.

Accordingly, this Form 10-Q presents our second quarter of Fiscal 2022.

For presentation purposes herein, all references to periods ended September 2021 and September 2020 relate to the fiscal periods ended on October 2, 2021 and September 26, 2020, respectively.

References to March 2021 relate to information as of April 3, 2021.

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These changes have been applied to all periods presented.

Unless otherwise noted, discussion within these notes to the condensed consolidated financial statements relates to continuing operations.

Unless otherwise noted, discussion within these notes to the interim consolidated financial statements relates to continuing operations.

Refer to Note 5 for additional information on discontinued operations.

Certain prior year amounts have been reclassified to conform to the Fiscal 2022 presentation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements.

Similarly, the March 2021 condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations and cash flows of VF for the interim periods presented.

Operating results for the three months ended June 2021 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal 2022.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements.

Similarly, the March 2021 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP.

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations and cash flows of VF for the interim periods presented.

Operating results for the three and six months ended September 2021 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal 2022.

For further information, refer to the consolidated financial statements and notes included in VF’s Annual Report on Form 10-K for the year ended April 3, 2021 (“Fiscal 2021 Form 10-K”).

In preparing the condensed consolidated financial statements, management makes estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes.

In preparing the interim consolidated financial statements, management makes estimates and assumptions that affect amounts reported in the interim consolidated financial statements and accompanying notes.

The duration and severity of the novel coronavirus ("COVID-19") pandemic, which is subject to uncertainty, continues to impact VF's business.

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The following table provides information about contract assets and contract liabilities:

(In thousands) June 2021 March 2021 June 2020

(In thousands) September 2021 March 2021 September 2020

Contract assets (a)

5 unchanged sentences

11 VF Corporation Q2 FY22 Form 10-Q

For the three months ended June 2021, the Company recognized $ 91.0 million of revenue that was included in the contract liability balance during the period, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were satisfied within the same period, such as order deposits from customers.

For the three and six months ended September 2021, the Company recognized $ 71.0 million and $ 162.0 million, respectively, of revenue that was included in the contract liability balance during the periods, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were satisfied within the same period, such as order deposits from customers.

The change in the contract asset and contract liability balances primarily results from the timing differences between the Company's satisfaction of performance obligations and the customer's payment.

Performance Obligations

As of June 2021, the Company expects to recognize $ 63.8 million of fixed consideration related to the future minimum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time based on the contractual terms, with the majority of the revenue recognized by Fiscal

As of September 2021, the Company expects to recognize $ 80.8 million of fixed consideration related to the future minimum guarantees in effect under its licensing agreements and expects such amounts to be recognized over time based on the

con tract ual terms through March 2031.

The variable consideration related to licensing arrangements is not disclosed as a remaining performance obligation as it qualifies for the sales-based royalty exemption.

VF has also elected the practical expedient to not disclose the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or less.

As of June 2021, there were no arrangements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and the fixed consideration related to future minimum guarantees discussed above.

For the three months ended June 2021, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

As of September 2021, there were no arrangements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and the fixed consideration related to future minimum guarantees discussed above.

For the three and six months ended September 2021, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

Disaggregation of Revenue

The following tables disaggregate our revenues by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues are affected by economic factors.

Three Months Ended June 2021

Three Months Ended September 2021

(In thousands) Outdoor Active Work Other Total

11 unchanged sentences

Total $ 1,506,621 $ 1,392,173 $ 299,163 $ 278 $ 3,198,235

Three Months Ended June 2020

Three Months Ended September 2020

(In thousands) Outdoor Active Work Other Total

12 unchanged sentences

VF Corporation Q2 FY22 Form 10-Q 12

Six Months Ended September 2021

(In thousands) Outdoor Active Work Other Total

Channel revenues

Wholesale $ 1,466,943 $ 1,151,548 $ 478,887 $ 278 $ 3,097,656

Direct-to-consumer 650,767 1,532,061 82,952 — 2,265,780

Royalty 6,665 10,632 12,059 — 29,356

Total $ 2,124,375 $ 2,694,241 $ 573,898 $ 278 $ 5,392,792

Geographic revenues

United States $ 974,696 $ 1,409,920 $ 426,896 $ 278 $ 2,811,790

International:

Europe 755,077 717,886 39,616 — 1,512,579

Asia-Pacific 270,362 426,651 74,200 — 771,213

Americas (non-U.S.) 124,240 139,784 33,186 — 297,210

Total $ 2,124,375 $ 2,694,241 $ 573,898 $ 278 $ 5,392,792

Six Months Ended September 2020

(In thousands) Outdoor Active Work Other Total

Channel revenues

Wholesale $ 982,460 $ 906,032 $ 326,506 $ 1,275 $ 2,216,273

Direct-to-consumer 509,675 854,432 80,643 208 1,444,958

Royalty 3,500 11,054 8,832 — 23,386

Total $ 1,495,635 $ 1,771,518 $ 415,981 $ 1,483 $ 3,684,617

Geographic revenues

United States $ 675,153 $ 851,884 $ 276,090 $ — $ 1,803,127

International:

Europe 513,078 497,538 44,405 1,483 1,056,504

Asia-Pacific 234,963 334,418 68,267 — 637,648

Americas (non-U.S.) 72,441 87,678 27,219 — 187,338

Total $ 1,495,635 $ 1,771,518 $ 415,981 $ 1,483 $ 3,684,617

NOTE 4 — ACQUISITION

On December 28, 2020, VF acquired 100 % of the outstanding shares of Supreme Holdings, Inc.

("Supreme") for $ 2.2 billion in cash, which is subject to working capital and other adjustments.

("Supreme") for $ 2.2 billion in cash, subject to working capital and other adjustments.

The transaction also included $ 0.2 billion of cash acquired by VF.

The preliminary purchase price was primarily funded with cash on hand.

The purchase price was primarily funded with cash on hand.

During the three months ended September 2021, the purchase consideration was reduced by $ 3.8 million associated with the final working capital adjustment.

The acquisition of Supreme includes a contingent arrangement that may require additional cash consideration to be paid to the selling shareholders of Supreme ranging from zero to $ 300.0 million, subject to the achievement of certain financial targets over the one-year earn-out period ending January 31, 2022.

The initial estimated fair value of the contingent consideration of $ 207.0 million is included in the preliminary purchase price and was reported in the other liabilities line item in the Consolidated Balance Sheet at March 2021.

The initial estimated fair value of the contingent consideration of $ 207.0 million is included in the purchase price and was reported in the other liabilities line item in the Consolidated Balance Sheet at March 2021.

The estimated fair value of the contingent consideration was determined based on the probability-weighted present value of various future cash payment outcomes.

In subsequent reporting periods, the contingent consideration liability is remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations.

In subsequent reporting periods, the

contingent consideration liability is remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations.

Refer to Note 16 for additional information on fair value measurements.

Supreme was a privately-held company based in New York, New York and is a global streetwear leader that sells apparel, accessories and footwear under its namesake brand , Supreme ® , through direct-to-consumer channels, including digital.

The acquisition of Supreme accelerates VF's long-term growth

strategy and builds on a long-standing relationship between Supreme and VF, with the Supreme ® brand being a regular collaborator with VF's Vans ® , The North Face ® and Timberland ® brands.

The acquisition of Supreme accelerates VF's long-term growth strategy and builds on a long-standing relationship between Supreme and VF, with the Supreme ® brand being a regular collaborator with VF's Vans ® , The North Face ® and Timberland ® brands.

The acquisition also provides VF with deeper access to attractive consumer segments and the ability to leverage VF's enterprise platforms and capabilities to enable sustainable long-term growth.

In connection with the acquisition, VF deposited in escrow 605,050 shares of VF Common Stock.

The common shares are subject to certain future service requirements and vest over periods of up to four years .

The common shares are

13 VF Corporation Q2 FY22 Form 10-Q

subject to certain future service requirements and vest over periods of up to four years .

For accounting purposes, VF will recognize the stock-based compensation cost for the fair value of these awards of $ 51.7 million over the vesting periods.

For the three months ended June 2021, Supreme contributed revenues of $ 145.7 million and net income of $ 26.3 million.

For the three and six months ended September 2021, Supreme contributed revenues of $ 99.6 million and $ 245.3 million, respectively, and net income of $ 6.1 million and $ 32.4 million, respectively.

The results of Supreme have been reported in the Active segment since the date of acquisition.

Total transaction expenses for the Supreme acquisition were $ 8.7 million, all of which were recognized in the year ended March 2021 in the selling, general and administrative expenses line item in the Consolidated Statement of Operations.

The allocation of the purchase price is preliminary and subject to change, primarily for certain income tax matters and final adjustments for net working capital.

Total transaction expenses for the Supreme acquisition were $ 8.7 million, all of which were recognized in the year ended March 2021 in the

selling, general and administrative expenses line item in the Consolidated Statement of Operations.

The allocation of the purchase price is preliminary and subject to change, primarily for certain income tax matters.

Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.

Goodwill decreased by $ 4.3 million during the three months ended September 2021, primarily related to the final working capital adjustment.

The following table summarizes the preliminary estimated fair values of the Supreme assets acquired and liabilities assumed at the date of acquisition:

18 unchanged sentences

Purchase price $ 2,430,495

VF Corporation Q1 FY22 Form 10-Q 12

The preliminary purchase price consisted of the following components:

The purchase price consisted of the following components:

(In thousands) December 28, 2020

6 unchanged sentences

The relief-from-royalty method requires the use of significant estimates and assumptions, including but not limited to, future revenues, growth rates, royalty rate, tax rates and discount rate.

VF Corporation Q2 FY22 Form 10-Q 14

The following unaudited pro forma summary presents consolidated information of VF as if the acquisition of Supreme had occurred on March 31, 2019:

(In thousands, except per share amounts) Three Months Ended

September 2020

Six Months Ended

September 2020

Total revenues $ 2,743,359 $ 3,933,644

Income (loss) from continuing operations ( 264,463 )

Earnings (loss) per common share from continuing operations

Income from continuing operations 274,425 9,962

Earnings per common share from continuing operations

Basic $ 0.71 $ 0.03

9 unchanged sentences

On January 21, 2020, VF announced its decision to explore the divestiture of its Occupational Workwear business.

The Occupational Workwear business is comprised primarily of the following brands and businesses:

The Occupational Workwear business was comprised primarily of the following brands and businesses:

Red Kap ® , VF Solutions ® , Bulwark ® , Workrite ® , Walls ® , Terra ® , Kodiak ® , Work Authority ® and Horace Small ® .

The business also includes the license of certain Dickies ® occupational workwear products that have historically been sold through the business-to-business channel.

The business also included the license of certain Dickies ® occupational workwear products that have historically been sold through the business-to-business channel.

As of March 28, 2020, the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria.

2 unchanged sentences

On June 28, 2021, VF completed the sale of the Occupational Workwear business.

The Company received proceeds of $ 616.5 million, net of cash sold, resulting in an estimated after-tax gain on sale of $ 145.6 million, which is included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statement of Operations for the three months ended June 2021, and is subject to working capital and other adjustments.

The Company received proceeds of $ 616.5 million, net of cash sold, resulting in an estimated after-tax gain on sale of $ 145.6 million, which is included in the income from discontinued operations, net of tax line item in the Consolidated Statement of Operations for the six months ended September 2021, and is subject to working capital and other adjustments.

The results of the Occupational Workwear business were previously reported in the Work segment.

The results of the Occupational Workwear business recorded in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations were income of $ 170.3 million (including an estimated after-tax gain on sale of $ 145.6 million) and a loss of $ 7.9 million for the three months ended June 2021 and June 2020, respectively.

The results of the Occupational Workwear business recorded in the income from discontinued operations, net of tax line item in the Consolidated Statements of Operations were income of $ 170.3 million (including an estimated after-tax gain on sale of $ 145.6 million) for the six months ended September 2021, and income of $ 13.5 million and $ 5.6 million for the three and six months ended September 2020, respectively.

Under the terms of a transition services agreement, the Company will provide certain support services for periods generally up to 12 months from the closing date of the transaction.

1 unchanged sentence

Summarized Discontinued Operations Financial Information

The following table summarizes the major line items for the Occupational Workwear business that are included in the income (loss) from discontinued operations, net of tax line item in the Consolidated Statements of Operations:

Three Months Ended June

The following table summarizes the major line items for the Occupational Workwear business that are included in the income from discontinued operations, net of tax line item in the Consolidated Statements of Operations:

Three Months Ended September Six Months Ended September

(In thousands) 2021 2020 2021 2020

5 unchanged sentences

Interest income, net

— 180 194 473

Other income (expense), net

Income (loss) from discontinued operations before income taxes

Income from discontinued operations before income taxes

— 14,511 25,696 5,411

Gain on the sale of discontinued operations before income taxes

Total income (loss) from discontinued operations before income taxes

— — 133,571 —

Income tax benefit (a)

Total income from discontinued operations before income taxes

— 14,511 159,267 5,411

Income (loss) from discontinued operations, net of tax

Income tax expense (benefit) (a)

— 1,035 ( 11,006 ) ( 194 )

(a) Income tax benefit for the three months ended June 2021 includes $ 12.0 million of deferred tax benefit related to capital and other losses realized upon the sale of the Occupational Workwear business.

The following table summarizes the carry ing amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented:

(In thousands) June 2021 March 2021 June 2020

Income from discontinued operations, net of tax

$ — $ 13,476 $ 170,273 $ 5,605

(a) Income tax benefit for the six months ended September 2021 includes $ 12.0 million of deferred tax benefit related to capital and other losses realized upon the sale of the Occupational Workwear business.

The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as of March 2021 and September 2020.

(In thousands) March 2021 September 2020

Cash and equivalents

4 unchanged sentences

Other current assets

— 8,208 10,027

Property, plant and equipment, net

5 unchanged sentences

43,220 42,445

— 5,561 5,275

Total assets of discontinued operations

7 unchanged sentences

Other liabilities

— 3,863 2,284

Deferred income tax liabilities (a)

4 unchanged sentences

NOTE 6 — INVENTORIES

(In thousands) June 2021 March 2021 June 2020

(In thousands) September 2021 March 2021 September 2020

Finished products $ 1,397,988 $ 983,472 $ 1,358,593

4 unchanged sentences

NOTE 7 — INTANGIBLE ASSETS

June 2021 March 2021

September 2021 March 2021

(In thousands) Weighted

10 unchanged sentences

Intangible assets, net $ 3,018,242 $ 3,029,545

Amortization expense for the three months ended June 2021 was $ 4.1 million.

Amortization expense for the three and six months ended September 2021 was $ 4.0 million and $ 8.1 million, respectively.

Based on the carrying amounts of amortizable intangible assets noted above, estimated amortization expense for the next five years beginning in Fiscal 2022 is $ 15.5 million, $ 14.5 million, $ 14.0 million, $ 13.5 million and $ 12.5 million, respectively.

3 unchanged sentences

Balance, March 2021 $ 665,278 $ 1,645,769 $ 114,380 $ 2,425,427

Measurement period adjustment to Supreme acquisition (Note 4) — ( 4,325 ) — ( 4,325 )

Currency translation ( 1,508 ) ( 3,841 ) 14 ( 5,335 )

Balance, June 2021 $ 665,643 $ 1,646,980 $ 114,701 $ 2,427,324

Accum ulated impairm ent charges for the Outdoor segment were $ 323.2 million as of June 2021 and March 2021.

No impairment charges were recorded during the three months ended June 2021.

Balance, September 2021 $ 663,770 $ 1,637,603 $ 114,394 $ 2,415,767

Accum ulated impairm ent charges for the Outdoor segment were $ 323.2 million as of September 2021 and March 2021.

No impairment charges were recorded during the six months ended September 2021.

NOTE 9 — LEASES

3 unchanged sentences

Components of lease cost were as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2021 2020 2021 2020

2 unchanged sentences

Total lease cost $ 132,651 $ 126,251 $ 274,090 $ 250,101

During the three months ended June 2021 and 2020, the Company paid $ 119.4 million and $ 65.0 million of cash for operating leases, respectively.

The increase was primarily driven by the timing of payments and lease concessions related to the effects of COVID-19 in the three months ended June 2020.

During the three months ended June 2021 and 2020, the Company obtained $ 52.3 million and $ 190.2 million of right-of-use assets in exchange for lease liabilities, respectively.

The decrease was primarily driven by the commencement of a new distribution center lease during the three months ended June 2020.

During the six months ended September 2021 and 2020, the Company paid $ 241.8 million and $ 176.1 million of cash for operating leases, respectively.

The increase was primarily driven by the timing of payments and lease concessions related to the effects of COVID-19 in the six months ended September 2020.

During the six months ended September 2021 and 2020, the Company obtained $ 123.1 million and $ 326.3 million of right-of-use assets in exchange for lease liabilities, respectively.

The decrease was primarily driven by the commencement of a new distribution center lease during the six months ended September 2020.

17 VF Corporation Q2 FY22 Form 10-Q

1 unchanged sentence

The components of pension cost (income) for VF’s defined benefit plans were as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2021 2020 2021 2020

2 unchanged sentences

Expected return on plan assets ( 19,368 ) ( 20,571 ) ( 38,753 ) ( 41,110 )

Settlement charge 948 —

Settlement charges 76 572 1,024 572

Amortization of deferred amounts:

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VF has reported the service cost component of net periodic pension cost (income) in operating income and the other components, which include interest cost, expected return on plan assets, settlement charges and amortization of deferred actuarial losses and prior service credits, in the other income (expense), net line item in the Consolidated Statements of Operations.

VF contributed $ 4.1 million to its defined benefit plans during the three months ended June 2021, and intends to make approximately $ 23.4 million of contributions during the remainder of Fiscal 2022.

VF recorded a $ 0.9 million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations for the three months ended June 2021.

The settlement charge related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan.

Actuarial assumptions used in the interim valuation were reviewed and revised as appropriate.

The discount rate used to determine the supplemental defined benefit pension obligation as of June 2021 was 2.90 %.

VF contributed $ 6.1 million to its defined benefit plans during the six months ended September 2021, and intends to make approximately $ 26.8 million of contributions during the remainder of Fiscal 2022.

VF recorded $ 0.1 million and $ 1.0 million in settlement charges in the other income (expense), net line item in the Consolidated Statements of Operations for the three and six months ended September 2021, respectively, as well as $ 0.6 million for both the three and six months ended September 2020.

The settlement charges related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan.

Actuarial assumptions used in the interim valuations were reviewed and revised as appropriate.

The discount rate used to determine the supplemental defined benefit pension obligation as of September 2021 and June 2021 was 2.91 % and 2.90 %, respectively.

NOTE 11 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

During the three months ended June 2021, the Company did no t purchase shares of Common Stock in open market transactions under its share repurchase program authorized by VF’s Board of Directors.

During the six months ended September 2021, the Company did no t purchase shares of Common Stock in open market transactions under its share repurchase program authorized by VF’s Board of Directors.

These are treated as treasury stock transactions when shares are repurchased.

Common Stock outstanding is net of shares held in treasury which are, in substance, retired.

There were no shares held in treasury at the end of June 2021, March 2021 or June 2020.

There were no shares held in treasury at the end of September 2021, March 2021 or September 2020.

The excess of the cost of treasury shares acquired over the $ 0.25 per share stated value of Common Stock is deducted from retained earnings.

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The deferred components of OCI are reported, net of related income taxes, in accumulated OCI in stockholders’ equity, as follows:

(In thousands) June 2021 March 2021 June 2020

(In thousands) September 2021 March 2021 September 2020

Foreign currency translation and other $ ( 687,120 ) $ ( 700,173 ) $ ( 700,137 )

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The changes in accumulated OCI, net of related taxes, were as follows:

Three Months Ended June 2021

Three Months Ended September 2021

(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total

Balance, March 2021 $ ( 700,173 ) $ ( 257,747 ) $ ( 51,080 ) $ ( 1,009,000 )

Balance, June 2021 $ ( 663,120 ) $ ( 257,431 ) $ ( 45,335 ) $ ( 965,886 )

Other comprehensive income (loss) before reclassifications

4 unchanged sentences

( 24,000 ) 1,796 47,256 25,052

Balance, September 2021 $ ( 687,120 ) $ ( 255,635 ) $ 1,921 $ ( 940,834 )

Three Months Ended September 2020

(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total

Balance, June 2020 $ ( 685,236 ) $ ( 259,290 ) $ 46,985 $ ( 897,541 )

Three Months Ended June 2020

Other comprehensive income (loss) before reclassifications

( 14,901 ) ( 7,629 ) ( 32,534 ) ( 55,064 )

Amounts reclassified from accumulated other comprehensive income (loss)

— 2,615 ( 9,668 ) ( 7,053 )

Net other comprehensive income (loss)

( 14,901 ) ( 5,014 ) ( 42,202 ) ( 62,117 )

Balance, September 2020 $ ( 700,137 ) $ ( 264,304 ) $ 4,783 $ ( 959,658 )

Six Months Ended September 2021

(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total

6 unchanged sentences

13,053 2,112 53,001 68,166

Balance, June 2020 $ ( 685,236 ) $ ( 259,290 ) $ 46,985 $ ( 897,541 )

Balance, September 2021 $ ( 687,120 ) $ ( 255,635 ) $ 1,921 $ ( 940,834 )

Six Months Ended September 2020

(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total

Balance, March 2020 $ ( 737,709 ) $ ( 262,472 ) $ 69,223 $ ( 930,958 )

Other comprehensive income (loss) before reclassifications

( 4,792 ) ( 6,642 ) ( 38,599 ) ( 50,033 )

Amounts reclassified from accumulated other comprehensive income (loss)

42,364 4,810 ( 25,841 ) 21,333

Net other comprehensive income (loss)

37,572 ( 1,832 ) ( 64,440 ) ( 28,700 )

Balance, September 2020 $ ( 700,137 ) $ ( 264,304 ) $ 4,783 $ ( 959,658 )

19 VF Corporation Q2 FY22 Form 10-Q

Reclassifications out of accumulated OCI were as follows:

(In thousands) Three Months Ended June

(In thousands) Three Months Ended September Six Months Ended September

Details About Accumulated Other Comprehensive Income (Loss) Components Affected Line Item in the Consolidated Statements of Operations

2021 2020 2021 2020

Losses on foreign currency translation and other:

2 unchanged sentences

Total before tax

— — — ( 42,364 )

Tax (expense) benefit

— — — ( 42,364 )

Amortization of defined benefit pension plans:

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Other income (expense), net 117 17 235 34

Pension settlement charge

Pension settlement charges

Other income (expense), net ( 76 ) ( 572 ) ( 1,024 ) ( 572 )

2 unchanged sentences

707 838 1,650 1,489

( 2,123 ) ( 2,615 ) ( 4,850 ) ( 4,810 )

Gains (losses) on derivative financial instruments:

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Total reclassifications for the period, net of tax $ ( 20,996 ) $ 7,053 $ ( 33,839 ) $ ( 21,333 )

17 VF Corporation Q1 FY22 Form 10-Q

NOTE 12 — STOCK-BASED COMPENSATION

Incentive Equity Awards Granted

During the three months ended June 2021, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 1,491,580 shares of its Common Stock at an exercise price of $ 77.78 per share.

During the six months ended September 2021, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 1,495,961 shares of its Common Stock at a weighted average exercise price of $ 77.79 per share.

The exercise price of each option granted was equal to the fair market value of VF Common Stock on the date of grant.

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The grant date fair value of each option award was calculated using a lattice option-pricing valuation model, which incorporated a range of assumptions for inputs as follows:

Three Months Ended June 2021

Six Months Ended September 2021

Expected volatility 28 % to 41 %

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Weighted average fair value at date of grant $ 20.20

During the three months ended June 2021, VF granted 323,718 performance-based restricted stock units ("RSUs") to employees that enable them to receive shares of VF Common Stock at the end of a three-year performance cycle.

During the six months ended September 2021, VF granted 323,718 performance-based restricted stock units ("RSUs") to employees that enable them to receive shares of VF Common Stock at the end of a three-year performance cycle.

The fair market value of VF Common Stock at the date the units were granted was $ 77.78 per share.

Each performance-based RSU has a potential final payout ranging from zero to two shares of VF Common Stock.

Each performance-based RSU

has a potential final payout ranging from zero to two shares of VF Common Stock.

The number of shares earned by participants, if any, is based on achievement of three-year financial targets set by the Tal ent and Compensation Committee of the Board of Directors.

Shares will be issued to participants in the year following the conclusion of the three-year performance period.

Shares will be issued to participants in the year following the conclusion of the three-year performance

VF Corporation Q2 FY22 Form 10-Q 20

The financial targets include 50 % weighting based on VF's revenue growth over the three-year period compared to a group of industry peers and 50 % weighting based on VF's total shareholder return ("TSR") over the three-year period compared to the TSR for companies included in the Standard & Poor's 500 Consumer Discretionary Index.

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Additionally, the actual number of performance-based RSUs earned may be adjusted upward or downward by 25 % of the target award, based on VF's gross margin performance over the three-year period.

During the three months ended June 2021, VF granted 12,023 nonperformance-based RSUs to nonemployee members of the Board of Directors.

These units vest upon grant and will be settled in shares of VF Common Stock one year from the date of grant.

During the six months ended September 2021, VF granted 12,023 nonperformance-based RSUs to nonemployee members of the Board of Directors.

These units vest upon grant and will be settled in shares of VF Common Stock one year from the date of

The fair market value of VF Common Stock at the date the units were granted was $ 77.78 per share.

In addition, VF granted 280,202 nonperformance-based RSUs to employees during the three months ended June 2021.

In addition, VF granted 345,599 nonperformance-based RSUs to employees during the six months ended September 2021.

These units generally vest over periods of up to four years from the date of grant and each unit entitles the holder to one share of VF Common Stock.

The fair market value of VF Common Stock at the date the units were granted was $ 77.78 per share.

VF also granted 31,214 restricted shares of VF Common Stock to certain members of management during the three months ended June 2021.

The weighted average fair market value of VF Common Stock at the dates the units were granted was $ 78.55 per share.

VF also granted 31,214 restricted shares of VF Common Stock to certain members of management during the six months ended September 2021.

These shares vest over periods of up to four years from the date of grant.

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NOTE 13 — INCOME TAXES

The effective income tax rate for the three months ended June 2021 was 14.1 % compared to 11.2 % in the 2020 period.

The three months ended June 2021 included a net discrete tax benefit of $ 2.3 million, which included a $ 1.2 million net tax expense related to unrecognized tax benefits and interest, a $ 1.1 million tax benefit related to stock compensation, and a $ 2.4 million net tax benefit related to tax rate change on deferred tax items.

Excluding the $ 2.3 million net discrete tax benefit in the 2021 period, the effective income tax rate would have been 15.3 %.

The three months ended June 2020 included a net discrete tax expense of $ 1.8 million, which primarily related to unrecognized tax benefits and interest.

The $ 1.8 million net discrete tax expense in the 2020 period reduced the effective income tax rate by 0.6 %.

Without discrete items, the effective income tax rate for the three months ended June 2021 increased by 3.5 % compared

with the 2020 period primarily due to losses generated in the prior year.

The effective income tax rate for the six months ended September 2021 was 13.1 % compared to ( 78.9 )% in the 2020 period.

The six months ended September 2021 included a net discrete tax benefit of $ 0.2 million, which included a $ 3.4 million net tax expense related to unrecognized tax benefits and interest, a $ 1.4 million tax benefit related to stock compensation, and a $ 2.4 million net tax benefit related to tax rate change on deferred tax items.

The $ 0.2 million net discrete tax benefit in the 2021 period had an insignificant impact on the effective income tax rate.

The six months ended September 2020 included a net discrete tax expense of $ 3.9 million, which included a $ 2.0 million net tax expense related to unrecognized tax benefits and interest and a $ 1.8 million tax expense related to withholding taxes on prior foreign earnings.

Excluding the $ 3.9 million net discrete tax expense in the 2020 period, the effective income tax rate would have been ( 58.9 )%.

Without discrete items, the effective income tax rate for the six months ended September 2021 increased by 72.0 % compared with the 2020 period primarily due to losses generated in the prior year.

VF files a consolidated U.S.

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The outcome of any one examination is not expected to have a material impact

VF Corporation Q1 FY22 Form 10-Q 18

on VF’s consolidated financial statements.

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During 2017 and 2018, VF Europe BVBA was assessed and paid € 35.0 million tax and interest, which was recorded as an income tax receivable based on the expected success of the requests for annulment.

During 2019, the General

Court annulled the EU decision and the EU subsequently appealed the General Court’s annulment.

Both requests remain open and unresolved.

During 2019, the General Court annulled the EU decision and the EU subsequently appealed the General Court’s annulment.

In September 2021, the General Court's judgment was set aside by the Court of Justice of the EU and the case was sent back to the General Court to determine whether the excess profit tax regime amounted to illegal State aid.

The case remains open and unresolved.

If this matter is adversely resolved, these amounts will not be collected by VF.

During the three months ended June 2021, the amount of net unrecognized tax benefits and associated interest increased by $ 5.9 million to $ 196.1 million.

During the six months ended September 2021, the amount of net unrecognized tax benefits and associated interest increased by $ 8.9 million to $ 199.1 million.

Management believes that it is reasonably possible that the amount of unrecognized income tax benefits and interest may decrease during the next 12 months by approximately $ 34.5 million related to the completion of examinations and other settlements with tax authorities and the expiration of statutes of limitations, of which $ 10.4 million would reduce income tax expense.

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Outdoor, Active and Work.

We have included an Other category in the table below for purposes of reconciliation of revenues and profit (loss), but it is not considered a reportable segment.

Other includes results primarily related to the sale of non-VF products.

We have included an Other category in the table below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment.

Other includes results primarily related to the sale of non-VF products and sourcing activities related to transition services.

21 VF Corporation Q2 FY22 Form 10-Q

Financial information for VF's reportable segments is as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2021 2020 2021 2020

10 unchanged sentences

Other ( 370 ) ( 2,526 ) ( 652 ) ( 4,887 )

Total segment profit (loss) 239,837 ( 167,337 )

Total segment profit 630,028 397,245 869,865 229,908

Corporate and other expenses

3 unchanged sentences

$ 531,665 $ 293,661 $ 710,815 $ ( 19,284 )

19 VF Corporation Q1 FY22 Form 10-Q

NOTE 15 — EARNINGS PER SHARE

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands, except per share amounts) 2021 2020 2021 2020

12 unchanged sentences

Incremental shares from stock options and other dilutive securities

2,238 1,961 2,507 2,029

Adjusted weighted average common shares outstanding

2 unchanged sentences

$ 1.18 $ 0.62 $ 1.57 $ ( 0.09 )

Outstanding options to purchase approximately 2.9 million and 5.4 million shares were excluded from the calculations of diluted earnings per share for the three-month periods ended June 2021 and June 2020, respectively because the effect of their inclusion would have been anti-dilutive.

In addition, 0.6 million and 0.4 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for the three-month periods ended June 2021 and June 2020, respectively, because these units were not considered to be contingent outstanding shares in those periods.

Outstanding options to purchase approximately 2.8 million shares were excluded from the calculations of diluted earnings per share for both the three and six-month periods ended September 2021, and outstanding options to purchase approximately 5.4 million shares were excluded from the calculations of diluted earnings per share for both the three and six-month periods ended September 2020, because the effect of their inclusion would have been anti-dilutive.

In addition, 0.6 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for both the three and six-month periods ended September 2021, and 0.8 million and 0.6 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for the three and six-month periods ended September 2020, respectively, because these units were not considered to be contingent outstanding shares in those periods.

VF Corporation Q2 FY22 Form 10-Q 22

NOTE 16 — FAIR VALUE MEASUREMENTS

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These inputs would normally be VF’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

VF Corporation Q1 FY22 Form 10-Q 20

The following table summarizes financial assets and financial liabilities that are measured and recorded in the consolidated financial statements at fair value on a recurring basis:

1 unchanged sentence

(In thousands) Level 1 Level 2 Level 3

September 2021

Financial assets:

2 unchanged sentences

Time deposits 2,626 2,626 — —

Short-term investments 598,806 598,806 — —

Derivative financial instruments 35,828 — 35,828 —

17 unchanged sentences

Contingent consideration 207,000 — — 207,000

(a) There were no transfers among the levels within the fair value hierarchy during the three months ended June 2021 or the year ended March 2021.

(a) There were no transfers among the levels within the fair value hierarchy during the six months ended September 2021 or the year ended March 2021.

23 VF Corporation Q2 FY22 Form 10-Q

The following table presents the changes in fair value of the contingent consideration liability designated as Level 3:

(In thousands) Contingent Consideration

Balance, March 2021 $ 207,000

(In thousands) Three Months Ended September 2021 Six Months Ended September 2021

Beginning Balance $ 134,000 $ 207,000

Change in fair value ( 35,000 ) ( 108,000 )

Balance, June 2021 $ 134,000

Ending Balance $ 99,000 $ 99,000

VF’s cash equivalents include money market funds and time deposits with maturities within three months of their purchase dates, that approximate fair value based on Level 1 measurements.

The fair value of derivative financial instruments, which consist of foreign exchange forward contracts, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies, and considers the credit risk of the Company and its counterparties.

VF's short-term investments include excess cash invested in a managed income fund that approximates fair value based on Level 1 measurements.

VF’s deferred compensation assets primarily represent investments held within plan trusts as an economic hedge of the related deferred compensation liabilities.

These investments primarily include mutual funds (Level 1) that are valued based on quoted prices in

active markets.

These investments primarily include mutual funds (Level 1) that are valued based on quoted prices in active markets.

Liabilities related to VF’s deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments.

VF's short-term investments at March 2021 included excess cash invested in a managed income fund that approximated fair value based on Level 1 measurements.

The contingent consideration liability represents the estimated amount of additional cash consideration to be paid to the selling shareholders of Supreme, which is dependent upon the achievement of certain financial targets over the one-year earn-out period ending January 31, 2022.

The estimated fair value of the contingent consideration liability, which could range from zero to $ 300.0 million, was $ 207.0 million as of March 2021.

The contingent consideration liability is remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of

21 VF Corporation Q1 FY22 Form 10-Q

As of June 2021, the fair value of the contingent consideration liability was remeasured to an estimated fair value of $ 134.0 million based on the probability-weighted present value of various future cash payment outcomes resulting from the estimated achievement levels of the financial targets.

The estimated fair value of the contingent consideration liability, which could range from

zero to $ 300.0 million, was $ 207.0 million as of March 2021.

The contingent consideration liability is remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations.

As of September 2021, the fair value of the contingent consideration liability was remeasured to an estimated fair value of $ 99.0 million based on the probability-weighted present value of various future cash payment outcomes resulting from the estimated achievement levels of the financial targets.

Refer to Note 4 for additional information on the acquisition of Supreme.

All ot her financial assets and financial liabilities are recorded in the consolidated financial statements at cost, except life insurance contracts which are recorded at cash surrender value.

All other financial assets and financial liabilities are recorded in the consolidated financial statements at cost, except life insurance contracts which are recorded at cash surrender value.

These other financial assets and financial liabilities include cash

held as demand deposits, accounts receivable, short-term borrowings, accounts payable and accrued liabilities.

At June 2021 and March 2021, their carrying values approximated fair value.

Additionally, at June 2021 and March 2021, the carrying values of VF’s long-term debt, including the current portion, were $ 5,727.3 million and $ 5,710.2 million, respectively, compared with fair values of $ 6,082.1 million and $ 6,017.3 million at those respective dates.

At September 2021 and March 2021, their carrying values approximated fair value.

Additionally, at September 2021 and March 2021, the carrying values of VF’s long-term debt, including the current portion, were $ 5,683.8 million and $ 5,710.2 million, respectively, compared with fair values of $ 5,996.9 million and $ 6,017.3 million at those respective dates.

Fair value for long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.

4 unchanged sentences

The notional amounts of all outstanding

derivative contracts were $ 2.7 billion at June 2021 , $ 2.5 billion at March 2021 and $ 2.9 billion at June 2020, consisting primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, South Korean won, Mexican peso, Swedish krona, Polish zloty, Japanese yen and New Zealand dollar .

derivative contracts were $ 2.5 billion at September 2021 , March 2021 and September 2020, consisting primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Mexican peso, Swedish krona, South Korean won, Polish zloty, Japanese yen and New Zealand dollar.

Derivative contracts have maturities up to 20 months.

3 unchanged sentences

with Unrealized Losses

(In thousands) June 2021 March 2021 June 2020 June 2021 March 2021 June 2020

(In thousands) September 2021 March 2021 September 2020 September 2021 March 2021 September 2020

Foreign currency exchange contracts designated as hedging instruments

4 unchanged sentences

$ 35,828 $ 13,257 $ 33,176 $ ( 33,723 ) $ ( 74,255 ) $ ( 32,318 )

VF Corporation Q2 FY22 Form 10-Q 24

VF records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a gross basis, even though they are subject to master netting agreements.

If VF were to offset and record the asset and liability balances of its foreign exchange forward contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

June 2021 March 2021 June 2020

September 2021 March 2021 September 2020

(In thousands) Derivative

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Derivatives are classified as current or noncurrent based on maturity dates, as follows:

(In thousands) June 2021 March 2021 June 2020

(In thousands) September 2021 March 2021 September 2020

Other current assets $ 27,903 $ 7,440 $ 27,615

2 unchanged sentences

Other liabilities ( 2,114 ) ( 7,904 ) ( 9,372 )

VF Corporation Q1 FY22 Form 10-Q 22

Cash Flow Hedges

2 unchanged sentences

(In thousands) Gain (Loss) on Derivatives Recognized in OCI

Three Months Ended June

Three Months Ended September

Gain (Loss) on Derivatives Recognized in OCI

Six Months Ended September

Cash Flow Hedging Relationships 2021 2020 2021 2020

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(In thousands) Gain (Loss) Reclassified from Accumulated OCI into Income (Loss)

Three Months Ended June

Three Months Ended September

Gain (Loss) Reclassified from Accumulated OCI into Income (Loss)

Six Months Ended September

Location of Gain (Loss) 2021 2020 2021 2020

15 unchanged sentences

are no longer probable of occurring, VF de-designates these hedges and the fair value changes of these instruments are also recognized directly in earnings.

During the three months ended June 2020, primarily as a result of the COVID-19 pandemic and actions expected to be taken by the Company, certain derivative contracts were de-designated as the hedged forecasted transactions were no longer deemed probable of occurring.

Accordingly, the Company reclassified amounts from accumulated OCI and recognized a $ 5.0 million net gain during the three months ended June 2020, which was primarily recorded in cost of goods sold.

The impact of de-designated derivative contracts was no t significant in the three months ended June 2021.

The changes in fair value of derivative contracts not designated as hedges that have been recognized as gains or losses in VF's Consolidated Statements of Operations were not material for the three months ended June 2021 and June 2020.

The impact of de-designated derivative contracts and changes in the fair value of derivative contracts not designated as hedges, recognized as gains or losses in VF's Consolidated Statements of Operations were not material for the three and six months ended September 2021 and September 2020.

Other Derivative Information

At June 2021, accumulated OCI included $ 63.3 million of pre-tax net deferred losses for foreign currency exchange contracts that are expected to be reclassified to earnings during the next 12 months.

The amounts ultimately reclassified to earnings will depend on exchange rates in effect when outstanding derivative contracts are settled.

At September 2021, accumulated OCI included $ 20.9 million of pre-tax net deferred losses for foreign currency exchange contracts that are expected to be reclassified to earnings during the next 12 months.

The amounts ultimately reclassified to

25 VF Corporation Q2 FY22 Form 10-Q

earnings will depend on exchange rates in effect when outstanding derivative contracts are settled.

Net Investment Hedge

The Company has designated its € 1.850 billion of euro-denominated fixed-rate notes as a net investment hedge of VF’s investment in certain foreign operations.

Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses of the debt are deferred in the foreign currency translation and other component of accumulated OCI as an offset to the foreign currency translation adjustments on the hedged investments.

During the three-month periods ended June 2021 and June 2020, the Company recognized after-tax losses of $ 11.5 million and $ 18.1 million, respectively, in OCI related to the net investment hedge transaction.

The Company has designated its euro-denominated fixed-rate notes, which represent € 1.850 billion in aggregate principal, as a net investment hedge of VF’s investment in certain foreign operations.

Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses of the debt are deferred in the foreign currency translation and

other component of accumulated OCI as an offset to the foreign currency translation adjustments on the hedged investments.

During the three and six-month periods ended September 2021, the Company recognized an after-tax gain of $ 34.1 million and $ 22.6 million, respectively, in OCI related to the net investment hedge transaction, and an after-tax loss of $ 53.5 million and $ 71.6 million for the three and six -month periods ended September 2020 , respectively.

Any amounts deferred in accumulated OCI will remain until the hedged investment is sold or substantially liquidated.

23 VF Corporation Q1 FY22 Form 10-Q

NOTE 18 — RESTRUCTURING

The Company typically incurs restructuring charges related to strategic initiatives and cost optimization of business activities, primarily related to severance and employee-related benefits.

During the three months ended June 2021, VF recognized $ 4.3 million of restructuring charges, related to approved initiatives.

Of the restructuring charges recognized in the three months ended June 2021, $ 2.9 million were reflected in selling, general and administrative expenses, and $ 1.4 million in cost of goods sold, respectively.

The Company has not recognized any

significant incremental costs related to accruals for the year ended March 2021 or prior periods.

Of the $ 54.9 million total restructuring accrual at June 2021, $ 52.8 million is expected to be paid out within the next 12 months and is classified within accrued liabilities.

The Company incurs restructuring charges related to strategic initiatives and cost optimization of business activities, primarily related to severance and employee-related benefits.

During the three and six months ended September 2021, VF recognized $ 3.5 million and $ 7.8 million, respectively, of restructuring charges, related to approved initiatives.

Of the restructuring charges recognized in the three and six months ended September 2021, $ 3.4 million and $ 6.3 million were reflected in selling, general and administrative expenses, respectively, and $ 0.1 million and $ 1.5 million in cost of goods sold, respectively.

The Company has not recognized any significant incremental costs related to accruals for the year ended March 2021 or prior periods.

Of the $ 43.3 million total restructuring accrual at September 2021, $ 43.0 million is expected to be paid out within the next 12 months and is classified within accrued liabilities.

The remaining $ 0.3 million will be paid out beyond the next 12 months and thus is classified within other liabilities.

The components of the restructuring charges are as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2021 2020 2021 2020

Severance and employee-related benefits $ 1,422 $ 9,883 $ 4,296 $ 28,392

Asset impairments — 10,557 — 10,557

Accelerated depreciation 2,036 2,857 3,467 6,664

2 unchanged sentences

Restructuring costs by business segment are as follows:

Three Months Ended June

Three Months Ended September Six Months Ended September

(In thousands) 2021 2020 2021 2020

1 unchanged sentence

Active 276 293 1,008 663

Work 788 18,378 788 18,807

Other 1,940 2,857 3,290 19,765

Total $ 3,458 $ 23,373 $ 7,763 $ 45,830

The activity in the restructuring accrual for the three-month period ended June 2021 was as follows:

The activity in the restructuring accrual for the six-month period ended September 2021 was as follows:

(In thousands) Severance Other Total

4 unchanged sentences

Impact of foreign currency ( 66 ) ( 50 ) ( 116 )

Accrual at June 2021 $ 51,170 $ 3,731 $ 54,901

Accrual at September 2021 $ 40,081 $ 3,188 $ 43,269

VF Corporation Q2 FY22 Form 10-Q 26

NOTE 19 — CONTINGENCIES

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NOTE 20 — SUBSEQUENT EVENT

On July 27, 2021, VF’s Board of Directors declared a quarterly cash dividend of $ 0.49 per share, payable on September 20, 2021 to stockholders of record on September 10, 2021.

On October 19, 2021, VF’s Board of Directors declared a quarterly cash dividend of $ 0.50 per share, payable on December 20, 2021 to stockholders of record on December 10, 2021.

27 VF Corporation Q2 FY22 Form 10-Q

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements