What changed in this filing

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Item 1. Financial Statements

2022-01-28 compared with 2021-11-03 · 231 added, 195 removed, 883 unchanged (33% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

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

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

Current assets

2 unchanged sentences

Accounts receivable, less allowance for doubtful accounts of:

September 2021 - $ 33,822 ;

December 2021 - $ 33,363 ;

March 2021 - $ 33,654 ;

September 2020 - $ 36,121

December 2020 - $ 39,622

1,495,859 1,298,020 1,411,565

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shares authorized, 25,000,000 ;

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

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

Common Stock, stated value $ 0.25 ;

shares authorized, 1,200,000,000 ;

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

shares outstanding at December 2021 - 388,885,032 ;

March 2021 - 391,941,477 ;

September 2020 - 389,964,718

December 2020 - 390,985,837

97,221 97,985 97,746

3 unchanged sentences

( 937,457 ) ( 1,009,000 ) ( 995,963 )

Retained earnings (accumulated deficit)

Retained earnings

608,701 189,534 300,495

5 unchanged sentences

Consolidated Statements of Operations

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

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

13 unchanged sentences

( 33,994 ) ( 34,315 ) ( 104,799 ) ( 97,684 )

Loss on debt extinguishment

( 3,645 ) — ( 3,645 ) —

Other income (expense), net

( 95 ) 6,484 16,495 ( 27,059 )

Income (loss) from continuing operations before income taxes

Income from continuing operations before income taxes

641,314 386,707 1,352,129 367,423

1 unchanged sentence

123,513 59,048 216,303 74,260

Income (loss) from continuing operations

Income from continuing operations

517,801 327,659 1,135,826 293,163

1 unchanged sentence

— 19,581 170,273 25,186

Net income (loss)

$ 517,801 $ 347,240 $ 1,306,099 $ 318,349

Earnings (loss) per common share - basic

Earnings per common share - basic

Continuing operations

2 unchanged sentences

— 0.05 0.44 0.06

Total earnings (loss) per common share - basic

Total earnings per common share - basic

$ 1.33 $ 0.89 $ 3.34 $ 0.82

Earnings (loss) per common share - diluted

Earnings per common share - diluted

Continuing operations

2 unchanged sentences

— 0.05 0.43 0.06

Total earnings (loss) per common share - diluted

Total earnings per common share - diluted

$ 1.32 $ 0.88 $ 3.32 $ 0.81

5 unchanged sentences

VF CORPORATION

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended September Six Months Ended September

Consolidated Statements of Comprehensive Income

Three Months Ended December Nine Months Ended December

(In thousands) 2021 2020 2021 2020

Net income (loss)

$ 517,801 $ 347,240 $ 1,306,099 $ 318,349

7 unchanged sentences

Defined benefit pension plans

Current period actuarial losses

Current period actuarial gains (losses)

514 ( 4,636 ) ( 3,938 ) ( 13,489 )

18 unchanged sentences

3,377 ( 36,305 ) 71,543 ( 65,005 )

Comprehensive income (loss)

Comprehensive income

$ 521,178 $ 310,935 $ 1,377,642 $ 253,344

3 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended September

Nine Months Ended December

(In thousands) 2021 2020

OPERATING ACTIVITIES

Net income (loss)

$ 1,306,099 $ 318,349

1 unchanged sentence

170,273 25,186

Income (loss) from continuing operations, net of tax

Income from continuing operations, net of tax

1,135,826 293,163

Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

7 unchanged sentences

( 27,514 ) ( 12,111 )

Loss on extinguishment of debt

( 291,054 ) ( 83 )

12 unchanged sentences

( 382,410 ) 31,464

Cash provided (used) by operating activities - continuing operations

Cash provided by operating activities - continuing operations

791,290 1,084,277

Cash provided by operating activities - discontinued operations

Cash provided (used) by operating activities

Cash provided by operating activities

797,380 1,142,056

4 unchanged sentences

— ( 800,000 )

Proceeds from sale of short-term investments

Proceeds from sale and maturities of short-term investments

598,806 200,000

Capital expenditures

10 unchanged sentences

FINANCING ACTIVITIES

Net decrease in short-term borrowings

Net increase (decrease) in short-term borrowings

94,958 ( 929,074 )

2 unchanged sentences

Payment of debt issuance costs

( 2,415 ) ( 21,438 )

Proceeds from long-term debt

Share repurchases

( 299,999 ) —

Cash dividends paid

17 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended September

Nine Months Ended December

(In thousands) 2021 2020

9 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three Months Ended September 2021

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

Three Months Ended December 2021

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

(In thousands, except share amounts) Shares Amounts Total

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

Net income (loss)

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

— — — — 517,801 517,801

1 unchanged sentence

— — — — ( 194,767 ) ( 194,767 )

Share repurchases

( 4,029,722 ) ( 1,007 ) — — ( 298,992 ) ( 299,999 )

Stock-based compensation, net

6 unchanged sentences

— — — 22,424 — 22,424

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)

Balance, December 2021 388,885,032 $ 97,221 $ 3,884,935 $ ( 937,457 ) $ 608,701 $ 3,653,400

Three Months Ended December 2020

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

(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

Net income (loss)

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

— — — — 347,240 347,240

9 unchanged sentences

— — — ( 71,917 ) — ( 71,917 )

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

Balance, December 2020 390,985,837 $ 97,746 $ 3,735,896 $ ( 995,963 ) $ 300,495 $ 3,138,174

Continued on next page.

3 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Six Months Ended September 2021

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

Nine Months Ended December 2021

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

(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

Net income (loss)

— — — — 1,306,099 1,306,099

1 unchanged sentence

— — ( 2,597 ) — ( 576,597 ) ( 579,194 )

Share repurchases

( 4,029,722 ) ( 1,007 ) — — ( 298,992 ) ( 299,999 )

Stock-based compensation, net

6 unchanged sentences

— — — 75,425 — 75,425

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)

Balance, December 2021 388,885,032 $ 97,221 $ 3,884,935 $ ( 937,457 ) $ 608,701 $ 3,653,400

Nine Months Ended December 2020

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

(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)

— — — — 318,349 318,349

9 unchanged sentences

— — — ( 136,357 ) — ( 136,357 )

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

Balance, December 2020 390,985,837 $ 97,746 $ 3,735,896 $ ( 995,963 ) $ 300,495 $ 3,138,174

See notes to consolidated financial statements.

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NOTE 9 Leases

NOTE 10 Short-term Borrowings and Long-term Debt

NOTE 11 Pension Plans

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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 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.

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

For presentation purposes herein, all references to periods ended December 2021 and December 2020 relate to the fiscal periods ended on January 1, 2022 and December 26, 2020, respectively.

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

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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.

Operating results for the three and nine months ended December 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”).

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Scope" , respectively.

This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

This guidance provides optional expedients and

exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

The optional guidance is provided to ease the potential burden of accounting for reference rate reform.

1 unchanged sentence

The Company is evaluating the impact that adopting this guidance would have on VF's consolidated financial statements.

In November 2021, the FASB issued ASU No.

2021-10, "Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance" , an update that requires annual disclosures about government assistance, including the types of assistance and the effect on the financial statements.

The guidance will be effective for VF in Fiscal 2023 with early adoption permitted.

The Company is evaluating the impact that adopting this guidance will have on VF's disclosures.

11 VF Corporation Q3 FY22 Form 10-Q

NOTE 3 — REVENUES

1 unchanged sentence

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

(In thousands) September 2021 March 2021 September 2020

(In thousands) December 2021 March 2021 December 2020

Contract assets (a)

4 unchanged sentences

(b) Included in the accrued liabilities line item in the Consolidated Balance Sheets.

11 VF Corporation Q2 FY22 Form 10-Q

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.

For the three and nine months ended December 2021, the Company recognized $ 81.6 million and $ 243.6 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 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.

As of December 2021, the Company expects to recognize $ 75.5 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 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 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.

As of December 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 nine months ended December 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 September 2021

Three Months Ended December 2021

(In thousands) Outdoor Active Work Other Total

11 unchanged sentences

Total $ 1,928,427 $ 1,410,577 $ 285,101 $ 279 $ 3,624,384

Three Months Ended September 2020

VF Corporation Q3 FY22 Form 10-Q 12

Three Months Ended December 2020

(In thousands) Outdoor Active Work Other Total

11 unchanged sentences

Total $ 1,571,043 $ 1,127,121 $ 270,182 $ 3,195 $ 2,971,541

VF Corporation Q2 FY22 Form 10-Q 12

Six Months Ended September 2021

Nine Months Ended December 2021

(In thousands) Outdoor Active Work Other Total

11 unchanged sentences

Total $ 4,052,802 $ 4,104,818 $ 858,999 $ 557 $ 9,017,176

Six Months Ended September 2020

Nine Months Ended December 2020

(In thousands) Outdoor Active Work Other Total

11 unchanged sentences

Total $ 3,066,678 $ 2,898,639 $ 686,163 $ 4,678 $ 6,656,158

13 VF Corporation Q3 FY22 Form 10-Q

NOTE 4 — ACQUISITION

3 unchanged sentences

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 purchase price was unchanged during the three months ended December 2021 and decreased by $ 3.8 million during the nine months ended December 2021, related to 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 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 was included in the purchase price and 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 has been 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 17 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

13 VF Corporation Q2 FY22 Form 10-Q

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

The common shares are 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 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.

For the three and nine months ended December 2021, Supreme contributed revenues of $ 193.2 million and $ 438.5 million, respectively, and net income of $ 43.8 million and $ 76.2 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.

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:

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.

Goodwill increased by $ 3.6 million during the three months ended December 2021 due to a measurement period adjustment for income tax matters, and decreased by $ 0.7 million during the nine months ended December 2021, which was also impacted by the final working capital adjustment.

The purchase price allocation was finalized during the three months ended December 2021.

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

(In thousands) December 28, 2020

17 unchanged sentences

Purchase price $ 2,430,495

VF Corporation Q3 FY22 Form 10-Q 14

The purchase price consisted of the following components:

7 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

December 2020

Nine Months Ended

December 2020

Total revenues $ 3,160,826 $ 7,094,470

6 unchanged sentences

These changes have been applied from March 31, 20 19, with related tax effects.

The pro forma financial information in the three and nine months ended December 2020 excludes $ 30.6 million of expenses

related to Supreme's transaction and deal-related costs, including employee compensation costs and accelerated vesting of stock options, which are directly attributable to the transaction.

Pro forma financial information is not necessarily indicative of VF’s operating results if the acquisition had been effected at the date indicated, nor is it necessarily indicative of future operating results.

11 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 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 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 nine months ended December 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 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.

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 nine months ended December 2021, and income of $ 19.6 million and $ 25.2 million for the three and nine months ended December 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.

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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

Three Months Ended December Nine Months Ended December

(In thousands) 2021 2020 2021 2020

5 unchanged sentences

Interest income, net

— 180 194 473

Other income (expense), net

9 unchanged sentences

$ — $ 19,581 $ 170,273 $ 25,186

(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

(a) Income tax benefit for the nine months ended December 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 December 2020.

(In thousands) March 2021 December 2020

Cash and equivalents

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NOTE 6 — INVENTORIES

(In thousands) September 2021 March 2021 September 2020

(In thousands) December 2021 March 2021 December 2020

Finished products $ 1,218,099 $ 983,472 $ 1,008,796

4 unchanged sentences

NOTE 7 — INTANGIBLE ASSETS

September 2021 March 2021

December 2021 March 2021

(In thousands) Weighted

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Amortizable intangible assets:

Customer relationships 19 years Accelerated $ 262,079 $ 153,139 $ 108,940 $ 117,207

License agreements 20 years Accelerated 6,652 4,322 2,330 2,448

Other 9 years Straight-line 5,861 4,292 1,569 1,986

Amortizable intangible assets, net 112,839 121,641

Customer relationships and other 19 years Accelerated $ 268,018 $ 159,541 $ 108,477 $ 121,641

Indefinite-lived intangible assets:

1 unchanged sentence

Intangible assets, net $ 3,010,517 $ 3,029,545

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

Amortization expense for the three and nine months ended December 2021 was $ 3.8 million and $ 11.9 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 $ 15.3 million, $ 14.3 million, $ 13.8 million, $ 13.3 million and $ 12.3 million, respectively.

5 unchanged sentences

Currency translation ( 3,173 ) ( 12,011 ) ( 266 ) ( 15,450 )

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.

Balance, December 2021 $ 662,105 $ 1,633,041 $ 114,114 $ 2,409,260

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

No impairment charges were recorded during the nine months ended December 2021.

NOTE 9 — LEASES

3 unchanged sentences

Components of lease cost were as follows:

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2021 2020 2021 2020

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Total lease cost $ 139,980 $ 130,306 $ 414,070 $ 380,407

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.

During the nine months ended December 2021 and 2020, the Company paid $ 357.9 million and $ 289.4 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 nine months ended December 2020.

During the nine months ended December 2021 and 2020, the Company obtained $ 147.2 million and $ 506.7 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 nine months ended December 2020.

17 VF Corporation Q3 FY22 Form 10-Q

NOTE 10 — SHORT-TERM BORROWINGS AND LONG-TERM DEBT

Revolving Credit Facility

In November 2021, VF entered into a $ 2.25 billion senior unsecured revolving line of credit (the "Global Credit Facility") that expires November 2026.

The Global Credit Facility replaced VF's $ 2.25 billion revolving facility which was scheduled to expire in December 2023.

VF may request an unlimited number of one year extensions so long as each extension does not cause the remaining life of the Global Credit Facility to exceed five years , subject to stated terms and conditions.

The Global Credit Facility may be used to borrow funds in U.S.

dollars or any alternative currency (including euros and any other currency that is freely convertible into U.S.

dollars, approved at the request of the Company by the lenders) and has a $ 75.0 million letter of credit sublimit.

In addition, the Global Credit Facility supports VF’s U.S.

commercial paper program for short-term, seasonal working capital requirements and general corporate purposes, including share repurchases and acquisitions.

Borrowings under the Global Credit Facility are priced at a credit spread of 91.0 basis points over the appropriate LIBOR benchmark for each currency.

VF is also required to pay a facility fee to the lenders, currently equal to 9.0 basis points of the committed amount of the facility.

The credit spread and facility fee are subject to adjustment based on VF’s credit ratings.

Outstanding short-term balances may vary from period to period depending on the level of corporate requirements.

The Global Credit Facility contains certain restrictive covenants, which include maintenance of a consolidated net indebtedness to consolidated net capitalization ratio.

The consolidated net indebtedness to consolidated net capitalization ratio financial covenant, as of the last day of any fiscal quarter, cannot be greater than 0.70 to 1.00 through the last day of the fiscal quarter ending April 1, 2023, then 0.65 to 1.00 through the last day of the fiscal quarter ending March 30, 2024, and 0.60 to 1.00 thereafter.

The calculation of consolidated net indebtedness (and, thereby consolidated net capitalization) is net of unrestricted cash of VF and its subsidiaries.

As of December 2021, VF was in compliance with all covenants.

In December 2021, VF completed an early redemption of $ 500.0 million in aggregate principal amount of its outstanding 2.050 % Senior Notes due April 2022.

The redemption price was equal to the sum of the present value of the remaining scheduled payments of principal and interest discounted to the redemption date at 38.7 basis points, which resulted in a make-whole premium of $ 3.2 million.

Additionally, in connection with the redemption, $ 0.5 million of unamortized original issue discount and debt issuance costs were recognized.

The make-whole premium and amortization were recorded in the loss on debt extinguishment line item in the Consolidated Statements of Operations in the three and nine months ended December 2021.

Supply Chain Financing Program

During the three months ended December 2021, VF began offering a voluntary supply chain finance ("SCF") program that enables certain suppliers of inventory to leverage VF's credit rating to receive payment from participating financial institutions prior to the payment date specified in the terms between VF and the supplier.

The transactions are at the sole discretion of both the suppliers and financial institutions, and VF is not a party to the agreements.

The terms between VF and the supplier, including the amount due and scheduled payment dates, are not impacted by a supplier's participation in the SCF program.

The amount financed by suppliers and outstanding under this program is primarily included in the short-term borrowings line item in VF's Consolidated Balance Sheet and was $ 99.0 million at December 2021.

Invoices selected for financing by the suppliers are primarily reported as operating cash outflows and financing cash inflows.

Payments made by VF to the banks to settle the invoices on the originally scheduled payment dates are primarily reflected as financing cash outflows.

Subsequent to the quarter end, VF decided to temporarily suspend the SCF program to implement certain modifications to the program.

NOTE 11 — PENSION PLANS

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

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2021 2020 2021 2020

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The amounts reported in these disclosures have not been segregated between continuing and discontinued operations.

VF Corporation Q3 FY22 Form 10-Q 18

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 $ 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.

VF contributed $ 23.2 million to its defined benefit plans during the nine months ended December 2021, and intends to make approximately $ 10.3 million of contributions during the remainder of Fiscal 2022.

VF recorded $ 5.7 million and $ 6.7 million in settlement charges in the other income (expense), net line item in the Consolidated

Statements of Operations for the three and nine months ended December 2021, respectively, as well as $ 0.5 million and $ 1.1 million for the three and nine months ended December 2020, respectively.

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.

The discount rate used to determine the supplemental defined benefit pension obligation as of December 2021, September 2021 and June 2021 was 2.96 %, 2.91 % and 2.90 %, respectively.

NOTE 12 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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.

During the nine months ended December 2021, the Company purchased 4.0 million shares of Common Stock in open market transactions for $ 300.0 million under its share repurchase program authorized by VF’s Board of Directors.

These transactions are treated as treasury stock transactions.

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 September 2021, March 2021 or September 2020.

During the nine months ended December 2021, VF restored 4.0 million treasury shares to an unissued status, after which they were no longer recognized as shares held in treasury.

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

Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and specified components of other comprehensive income (“OCI”), which relate to changes in assets and liabilities that are not included in net income (loss) under GAAP but are instead deferred and accumulated within a separate component of stockholders’ equity in the balance sheet.

VF’s comprehensive income (loss) is presented in the Consolidated Statements of Comprehensive Income (Loss).

Comprehensive income consists of net income and specified components of other comprehensive income (“OCI”), which relate to changes in assets and liabilities that are not included in net income under GAAP but are instead deferred and accumulated within a separate component of stockholders’ equity in the balance sheet.

VF’s comprehensive income is presented in the Consolidated Statements of Comprehensive Income.

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

(In thousands) September 2021 March 2021 September 2020

(In thousands) December 2021 March 2021 December 2020

Foreign currency translation and other $ ( 712,831 ) $ ( 700,173 ) $ ( 663,863 )

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Accumulated other comprehensive income (loss) $ ( 937,457 ) $ ( 1,009,000 ) $ ( 995,963 )

VF Corporation Q2 FY22 Form 10-Q 18

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

Three Months Ended September 2021

Three Months Ended December 2021

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

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

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

Other comprehensive income (loss) before reclassifications

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( 25,711 ) 6,664 22,424 3,377

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

Three Months Ended September 2020

Balance, December 2021 $ ( 712,831 ) $ ( 248,971 ) $ 24,345 $ ( 937,457 )

19 VF Corporation Q3 FY22 Form 10-Q

Three Months Ended December 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 )

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

Other comprehensive income (loss) before reclassifications

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36,274 ( 662 ) ( 71,917 ) ( 36,305 )

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

Six Months Ended September 2021

Balance, December 2020 $ ( 663,863 ) $ ( 264,966 ) $ ( 67,134 ) $ ( 995,963 )

Nine Months Ended December 2021

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

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( 12,658 ) 8,776 75,425 71,543

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

Six Months Ended September 2020

Balance, December 2021 $ ( 712,831 ) $ ( 248,971 ) $ 24,345 $ ( 937,457 )

Nine Months Ended December 2020

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

6 unchanged sentences

73,846 ( 2,494 ) ( 136,357 ) ( 65,005 )

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

Balance, December 2020 $ ( 663,863 ) $ ( 264,966 ) $ ( 67,134 ) $ ( 995,963 )

VF Corporation Q3 FY22 Form 10-Q 20

Reclassifications out of accumulated OCI were as follows:

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

(In thousands) Three Months Ended December Nine Months Ended December

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

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Incentive Equity Awards Granted

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.

During the nine months ended December 2021, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 1,504,707 shares of its Common Stock at a weighted average exercise price of $ 77.76 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:

Six Months Ended September 2021

Nine Months Ended December 2021

Expected volatility 28 % to 41 %

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Weighted average fair value at date of grant $ 20.19

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.

During the nine months ended December 2021, VF granted 324,448 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 weighted average fair market value of VF Common Stock at the dates the units were granted was $ 77.77 per share.

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

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

21 VF Corporation Q3 FY22 Form 10-Q

year performance period.

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.

The grant date fair value of the TSR portion of the performance-based RSU grants was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, and was $ 101.56 per share.

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

During the nine months ended December 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 345,599 nonperformance-based RSUs to employees during the six months ended September 2021.

In addition, VF granted 399,461 nonperformance-based RSUs to employees during the nine months ended December 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 weighted average fair market value of VF Common Stock at the dates the units were granted was $ 77.67 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.

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

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

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NOTE 14 — INCOME TAXES

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.

The effective income tax rate for the nine months ended December 2021 was 16.0 % compared to 20.2 % in the 2020 period.

The nine months ended December 2021 included a net discrete tax expense of $ 43.7 million, which included a $ 92.3 million net tax expense related to unrecognized tax benefits and interest, a $ 9.6 million net tax benefit related to return to accrual adjustments, a $ 35.2 million net tax benefit related to withholding taxes on prior foreign earnings, a $ 1.7 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 $ 43.7 million net discrete tax expense in the 2021 period, the effective income tax rate would have been 12.8 %.

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.

The nine months ended December 2020 included a net discrete tax expense of $ 3.7 million, which included a $ 15.2 million net tax expense related to unrecognized tax benefits and interest, a $ 2.3 million tax benefit related to stock compensation, a $ 4.9 million net tax benefit related to return to accrual adjustments, and a $ 4.3 million net tax benefit related to withholding taxes on prior foreign earnings.

Excluding the $ 3.7 million net discrete tax expense in the 2020 period, the effective income tax rate would have been 19.2 %.

Without discrete items, the effective income tax rate for the nine months ended December 2021 decreased by 6.4 % compared with the 2020 period primarily due to losses generated in the prior year and more favorable expectations to utilize foreign tax credits generated in the current year.

VF files a consolidated U.S.

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In addition, VF is currently subject to examination by various state and international tax authorities.

Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded that VF’s provision for income taxes is adequate.

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

on VF’s consolidated financial statements.

Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded

that VF’s provision for income taxes is adequate.

Management believes that some of these audits and negotiations will conclude during the next 12 months.

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

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.

During the nine months ended December 2021, the amount of net unrecognized tax benefits and associated interest increased by $ 98.9 million to $ 289.1 million, which includes an $ 87.1 million increase in the three months ended December 2021 resulting from updated estimates related to intellectual property transfers completed in a prior period.

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 $ 270.4 million related to the completion of examinations and other settlements with tax authorities and the expiration of statutes of limitations, of which $ 10.6 million would reduce income tax expense.

VF Corporation Q3 FY22 Form 10-Q 22

NOTE 15 — REPORTABLE SEGMENT INFORMATION

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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 September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2021 2020 2021 2020

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Interest expense, net ( 33,388 ) ( 31,776 ) ( 100,533 ) ( 90,656 )

Income (loss) from continuing operations before income taxes

Loss on debt extinguishment ( 3,645 ) — ( 3,645 ) —

Income from continuing operations before income taxes

$ 641,314 $ 386,707 $ 1,352,129 $ 367,423

NOTE 16 — EARNINGS PER SHARE

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

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

Earnings (loss) per share – basic:

Income (loss) from continuing operations

Earnings per share – basic:

Income from continuing operations

$ 517,801 $ 327,659 $ 1,135,826 $ 293,163

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390,430 389,872 391,187 389,262

Earnings (loss) per share from continuing operations

Earnings per share from continuing operations

$ 1.33 $ 0.84 $ 2.90 $ 0.75

Earnings (loss) per share – diluted:

Income (loss) from continuing operations

Earnings per share – diluted:

Income from continuing operations

$ 517,801 $ 327,659 $ 1,135,826 $ 293,163

5 unchanged sentences

392,495 392,851 393,547 391,607

Earnings (loss) per share from continuing operations

Earnings per share from continuing operations

$ 1.32 $ 0.83 $ 2.89 $ 0.75

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.

Outstanding options to purchase approximately 2.8 million shares were excluded from the calculations of diluted earnings per share for both the three and nine-month periods ended December 2021, and outstanding options to purchase approximately 1.5 million and 4.1 million shares were excluded from the calculations of diluted earnings per share for the three and nine-month periods ended December 2020, respectively, 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 nine-month periods ended December 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 nine-month periods ended December 2020, respectively, because these units were not considered to be contingent outstanding shares in those periods.

23 VF Corporation Q3 FY22 Form 10-Q

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(In thousands) Level 1 Level 2 Level 3

September 2021

December 2021

Financial assets:

21 unchanged sentences

Contingent consideration 207,000 — — 207,000

(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

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

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

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

(In thousands) Three Months Ended December 2021 Nine Months Ended December 2021

Beginning Balance $ 99,000 $ 207,000

1 unchanged sentence

Ending Balance $ 49,000 $ 49,000

VF Corporation Q3 FY22 Form 10-Q 24

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.

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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.

As of December 2021, the fair value of the contingent consideration liability was remeasured to an estimated fair value of $ 49.0 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 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 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.

These other financial assets and financial liabilities include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable and accrued liabilities.

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

Additionally, at December 2021 and March 2021, the carrying values of VF’s long-term debt, including the current portion, were $ 5,147.3 million and $ 5,710.2 million, respectively, compared with fair values of $ 5,383.7 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.

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The notional amounts of all outstanding

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 were $ 2.8 billion at December 2021 and $ 2.5 billion at both March 2021 and December 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.

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with Unrealized Losses

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

(In thousands) December 2021 March 2021 December 2020 December 2021 March 2021 December 2020

Foreign currency exchange contracts designated as hedging instruments

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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:

September 2021 March 2021 September 2020

December 2021 March 2021 December 2020

(In thousands) Derivative

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

(In thousands) September 2021 March 2021 September 2020

(In thousands) December 2021 March 2021 December 2020

Other current assets $ 50,298 $ 7,440 $ 15,510

4 unchanged sentences

VF uses derivative contracts primarily to hedge a portion of the exchange risk for its forecasted sales, purchases, production costs, operating costs and intercompany royalties.

The effects of cash flow hedging included in VF’s Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) are summarized as follows:

The effects of cash flow hedging included in VF’s Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income are summarized as follows:

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

Three Months Ended September

Three Months Ended December

Gain (Loss) on Derivatives Recognized in OCI

Six Months Ended September

Nine Months Ended December

Cash Flow Hedging Relationships 2021 2020 2021 2020

Foreign currency exchange $ 14,185 $ ( 82,491 ) $ 43,983 $ ( 129,817 )

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

Three Months Ended September

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

Six Months Ended September

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

Three Months Ended December

Gain (Loss) Reclassified from Accumulated OCI into Income

Nine Months Ended December

Location of Gain (Loss) 2021 2020 2021 2020

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Gains or losses on these contracts largely offset the net transaction losses or gains on the related assets and liabilities.

In the case of derivative contracts executed on foreign currency exposures that

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.

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.

In the case of derivative contracts executed on foreign currency exposures that 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.

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 wer e not material f or the three and nine months ended December 2021 and December 2020.

Other Derivative Information

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

At December 2021, accumulated OCI included $ 13.4 million of pre-tax net deferred gains 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.

VF Corporation Q3 FY22 Form 10-Q 26

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

Net Investment Hedge

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.

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 nine-month periods ended December 2021, the Company recognized an after-tax gain of $ 29.1 million and $ 51.7 million, respectively, in OCI related to the net investment hedge transaction, and an after-tax loss of $ 79.2 million and $ 150.8 million for the three and nine -month periods ended December 2020 , respectively.

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

1 unchanged sentence

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.

During the three and nine months ended December 2021, VF recognized $ 3.6 million and $ 11.4 million, respectively, of restructuring charges, related to approved initiatives.

Of the restructuring charges recognized in the three and nine months ended December 2021, $ 3.5 million and $ 9.8 million were reflected in selling, general and administrative expenses, respectively, and $ 0.1 million and $ 1.6 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.

Of the $ 31.1 million total restructuring accrual at December 2021, $ 30.1 million is expected to be paid out within the next 12 months and is classified within accrued liabilities.

The remaining $ 1.0 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 September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2021 2020 2021 2020

2 unchanged sentences

Accelerated depreciation 590 3,429 4,057 10,093

Inventory write-downs — 7,115 — 7,115

Contract termination and other — 3,107 — 3,324

1 unchanged sentence

Restructuring costs by business segment are as follows:

Three Months Ended September Six Months Ended September

Three Months Ended December Nine Months Ended December

(In thousands) 2021 2020 2021 2020

4 unchanged sentences

Total $ 3,646 $ 38,196 $ 11,409 $ 84,026

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

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

(In thousands) Severance Other Total

4 unchanged sentences

Impact of foreign currency ( 155 ) ( 80 ) ( 235 )

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

Accrual at December 2021 $ 29,907 $ 1,144 $ 31,051

27 VF Corporation Q3 FY22 Form 10-Q

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NOTE 21 — SUBSEQUENT EVENT

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.

On January 25, 2022, VF’s Board of Directors declared a quarterly cash dividend of $ 0.50 per share, payable on March 21, 2022 to stockholders of record on March 10, 2022.

VF Corporation Q3 FY22 Form 10-Q 28

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