What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-01-28 · 232 added, 493 removed, 621 unchanged (54% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

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

(In thousands, except share amounts) June 2022 March 2022 June 2021

Current assets

2 unchanged sentences

Accounts receivable, less allowance for doubtful accounts of:

December 2021 - $ 33,363 ;

June 2022 - $ 29,780 ;

March 2022 - $ 27,959 ;

December 2020 - $ 39,622

June 2021 - $ 33,666

1,249,713 1,467,842 1,138,811

1 unchanged sentence

Short-term investments

— 598,806 599,403

Other current assets

492,569 425,622 334,777

Current assets of discontinued operations

— 587,578 560,648

Total current assets 4,611,706 4,588,080 4,564,138

18 unchanged sentences

1,612,804 1,915,892 1,527,522

Current liabilities of discontinued operations

— 125,257 120,185

Total current liabilities 3,463,997 3,315,397 3,071,446

10 unchanged sentences

shares authorized, 25,000,000 ;

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

no shares outstanding at June 2022, March 2022 or June 2021

Common Stock, stated value $ 0.25 ;

shares authorized, 1,200,000,000 ;

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

shares outstanding at June 2022 - 388,490,713 ;

March 2022 - 388,298,375 ;

December 2020 - 390,985,837

June 2021 - 392,621,561

97,123 97,075 98,155

11 unchanged sentences

Consolidated Statements of Operations

Three Months Ended December Nine Months Ended December

Three Months Ended June

(In thousands, except per share amounts) 2022 2021

10 unchanged sentences

Interest income

606 2,539 4,266 7,028

Interest expense

( 32,545 ) ( 34,917 )

Loss on debt extinguishment

( 3,645 ) — ( 3,645 ) —

Other income (expense), net

( 94,714 ) 9,041

Income from continuing operations before income taxes

Income (loss) from continuing operations before income taxes

( 62,614 ) 179,150

Income tax expense

Income tax expense (benefit)

( 6,654 ) 25,178

Income from continuing operations

Income (loss) from continuing operations

( 55,960 ) 153,972

Income from discontinued operations, net of tax

— 19,581 170,273 25,186

Net income (loss)

$ ( 55,960 ) $ 324,245

Earnings per common share - basic

Earnings (loss) per common share - basic

Continuing operations

1 unchanged sentence

Discontinued operations

— 0.05 0.44 0.06

Total earnings per common share - basic

Total earnings (loss) per common share - basic

$ ( 0.14 ) $ 0.83

Earnings per common share - diluted

Earnings (loss) per common share - diluted

Continuing operations

1 unchanged sentence

Discontinued operations

— 0.05 0.43 0.06

Total earnings per common share - diluted

Total earnings (loss) per common share - diluted

$ ( 0.14 ) $ 0.82

5 unchanged sentences

VF CORPORATION

Consolidated Statements of Comprehensive Income

Three Months Ended December Nine Months Ended December

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June

(In thousands) 2022 2021

Net income (loss)

$ ( 55,960 ) $ 324,245

3 unchanged sentences

( 51,524 ) 33,171

Reclassification of foreign currency translation losses

Income tax effect

1 unchanged sentence

Defined benefit pension plans

Current period actuarial gains (losses)

Current period actuarial losses

( 19,568 ) ( 4,013 )

Amortization of net deferred actuarial losses

2,858 3,020 8,569 8,781

Amortization of deferred prior service credits

( 112 ) ( 118 )

Reclassification of net actuarial loss from settlement charge

5,660 544 6,684 1,116

Reclassification of net actuarial loss from settlement charges

Income tax effect

11 unchanged sentences

51,703 43,114

Comprehensive income

Comprehensive income (loss)

$ ( 4,257 ) $ 367,359

3 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended December

Three Months Ended June

(In thousands) 2022 2021

OPERATING ACTIVITIES

Net income (loss)

$ ( 55,960 ) $ 324,245

Income from discontinued operations, net of tax

170,273 25,186

Income from continuing operations, net of tax

Income (loss) from continuing operations, net of tax

( 55,960 ) 153,972

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

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

Depreciation and amortization

5 unchanged sentences

Provision for doubtful accounts

Pension expense less than contributions

Pension expense in excess of (less than) contributions

89,277 ( 6,759 )

Loss on extinguishment of debt

6,813 ( 176,493 )

12 unchanged sentences

( 6,607 ) ( 128,107 )

Cash provided by operating activities - continuing operations

Cash provided (used) by operating activities - continuing operations

( 358,320 ) 74,918

Cash provided by operating activities - discontinued operations

Cash provided by operating activities

Cash provided (used) by operating activities

( 358,320 ) 81,008

INVESTING ACTIVITIES

Business acquisitions, net of cash received

Proceeds from sale of businesses, net of cash sold

Purchases of short-term investments

— ( 800,000 )

Proceeds from sale and maturities of short-term investments

598,806 200,000

Capital expenditures

2 unchanged sentences

( 26,907 ) ( 21,006 )

12,819 ( 9,116 )

Cash provided (used) by investing activities - continuing operations

1 unchanged sentence

Cash used by investing activities - discontinued operations

( 525 ) ( 3,171 )

Cash provided (used) by investing activities

1 unchanged sentence

FINANCING ACTIVITIES

Contingent consideration payment

Net increase (decrease) in short-term borrowings

2 unchanged sentences

( 500,261 ) ( 253 )

Payment of debt issuance costs

( 2,415 ) ( 21,438 )

Proceeds from long-term debt

Share repurchases

( 299,999 ) —

Cash dividends paid

2 unchanged sentences

( 1,766 ) 20,910

Cash provided (used) by financing activities

Cash used by financing activities

( 261,221 ) ( 174,447 )

7 unchanged sentences

$ 529,034 $ 1,276,597

Continued on next page.

See notes to consolidated financial statements.

VF Corporation Q3 FY22 Form 10-Q 6

VF CORPORATION

Consolidated Statements of Cash Flows

Nine Months Ended December

(In thousands) 2021 2020

Balances per Consolidated Balance Sheets:

1 unchanged sentence

Other current assets 880 1,643

Current assets of discontinued operations — 18,771

Other assets 125 28

4 unchanged sentences

Consolidated Statements of Stockholders’ Equity

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

— — — — 517,801 517,801

Dividends on Common Stock ($ 0.50 per share)

— — — — ( 194,767 ) ( 194,767 )

Share repurchases

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

Stock-based compensation, net

156,738 38 30,248 — ( 1,779 ) 28,507

Foreign currency translation and other

— — — ( 25,711 ) — ( 25,711 )

Defined benefit pension plans

— — — 6,664 — 6,664

Derivative financial instruments

— — — 22,424 — 22,424

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

— — — — 347,240 347,240

Dividends on Common Stock ($ 0.49 per share)

— — ( 191,266 ) — — ( 191,266 )

Stock-based compensation, net

1,021,119 255 74,804 — ( 1,792 ) 73,267

Foreign currency translation and other

— — — 36,274 — 36,274

Defined benefit pension plans

— — — ( 662 ) — ( 662 )

Derivative financial instruments

— — — ( 71,917 ) — ( 71,917 )

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

Continued on next page.

See notes to consolidated financial statements.

VF Corporation Q3 FY22 Form 10-Q 8

VF CORPORATION

Consolidated Statements of Stockholders’ Equity

Nine Months Ended December 2021

Three Months Ended June 2022

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

1 unchanged sentence

Balance, March 2022 388,298,375 $ 97,075 $ 3,916,384 $ ( 926,579 ) $ 443,475 $ 3,530,355

Net income (loss)

— — — — ( 55,960 ) ( 55,960 )

1 unchanged sentence

— — — — ( 194,135 ) ( 194,135 )

Share repurchases

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

Stock-based compensation, net

6 unchanged sentences

— — — 77,086 — 77,086

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

Nine Months Ended December 2020

Balance, June 2022 388,490,713 $ 97,123 $ 3,941,440 $ ( 874,876 ) $ 188,806 $ 3,352,493

Three Months Ended June 2021

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

1 unchanged sentence

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

Net income (loss)

— — — — 324,245 324,245

9 unchanged sentences

— — — 5,745 — 5,745

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

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

See notes to consolidated financial statements.

3 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS PAGE NUMBER

NOTE 1 Basis of Presentation

NOTE 2 Recently Adopted and Issued Accounting Standards

NOTE 1 Basis of Presentation and Summary of Significant Accounting Policies

NOTE 2 Recently Issued Accounting Standards

NOTE 3 Revenues

NOTE 4 Acquisition

NOTE 5 Discontinued Operations

NOTE 4 Discontinued Operation s

NOTE 5 Inventories

2 unchanged sentences

NOTE 8 Leases

NOTE 10 Short-term Borrowings and Long-term Debt

NOTE 9 Pension Plans

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VF Corporation Q1 FY23 Form 10-Q 8

NOTE 1 — BASIS OF PRESENTATION

NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

VF Corporation (together with its subsidiaries, collectively known as “VF” or the “Company”) uses a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year.

The Company's current fiscal year runs from April 3, 2022 through April 1, 2023 ("Fiscal 2023").

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.

Accordingly, this Form 10-Q presents our first quarter of Fiscal 2023.

For presentation purposes herein, all references to periods ended June 2022 and June 2021 relate to the fiscal periods ended on July 2, 2022 and July 3, 2021, respectively.

References to March 2022 relate to information as of April 2, 2022.

Basis of Presentation

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

3 unchanged sentences

The results of the Occupational Workwear business and the related cash flows have been reported as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively, through the date of sale.

The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets, through the date of sale.

These changes have been applied to all periods presented.

5 unchanged sentences

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 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”).

Operating results for the three months ended June 2022 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal 2023.

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 2, 2022 (“Fiscal 2022 Form 10-K”).

Use of Estimates

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.

Management's estimates and assumptions have contemplated both current and expected impacts related to COVID-19 based on available information.

The duration and severity of the coronavirus ("COVID-19") pandemic and the conflict between Russia and Ukraine, and the impact on VF's business is subject to uncertainty;

however, the estimates and assumptions made by management include those related to COVID-19 and the Russia-Ukraine conflict based on available information.

Actual results may differ from those estimates.

NOTE 2 — RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2019-12, "Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes" , an update that amends and simplifies the accounting for income taxes by removing certain exceptions in existing guidance and providing new guidance to reduce complexity in certain areas.

The guidance became effective for VF in the first quarter of Fiscal 2022, but did not have a material impact on VF's consolidated financial statements.

Significant Accounting Policies

Supply Chain Financing Program

During the three months ended June 2022, VF reinstated its voluntary supply chain finance ("SCF") program.

The SCF program enables a significant portion of our 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 SCF program is administered through third-party platforms that allow participating suppliers to track payments from VF and elect which VF receivables, if any, to sell to the financial institutions.

The transactions are at the sole discretion of both the suppliers and financial institutions, and VF is not a party to the agreements and has no economic interest in the supplier's decision to sell a receivable.

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.

Amounts due to suppliers who voluntarily participate in the SCF program are included in the accounts payable line item in VF's Consolidated Balance Sheets and VF payments made under the SCF program are reflected in cash flows from operating activities in VF's Consolidated Statements of Cash Flows.

VF has been informed by the participating financial institutions that amounts payable to them for suppliers who voluntarily participated in the SCF program and included in the accounts payable line item in VF's Consolidated Balance Sheet was $ 164.1 million at June 2022.

The amount settled through the SCF program was $ 15.0 million during the three months ended June 2022.

There have been no other changes to the Company's significant accounting policies described in Note 1 to the consolidated financial statements included in the Fiscal 2022 Form 10-K.

NOTE 2 — RECENTLY ISSUED ACCOUNTING STANDARDS

Recently Issued Accounting Standards

In March 2020 and January 2021, the FASB issued ASU No.

In March 2020 and January 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2020-04, "Reference Rate Reform (Topic 848):

2 unchanged sentences

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.

The guidance is effective and can be adopted no later than December 31, 2022.

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

The Company does not expect this guidance to have a material impact on VF's consolidated financial statements.

9 VF Corporation Q1 FY23 Form 10-Q

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

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 is effective for VF in Fiscal 2023.

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

NOTE 3 — REVENUES

1 unchanged sentence

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

(In thousands) December 2021 March 2021 December 2020

(In thousands) June 2022 March 2022 June 2021

Contract assets (a)

3 unchanged sentences

(a) Included in the other current assets line item in the Consolidated Balance Sheets.

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

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.

(b) Included in the accrued liabilities and other liabilities line items in the Consolidated Balance Sheets.

For the three months ended June 2022, the Company recognized $ 64.4 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.

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 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.

As of June 2022, the Company expects to recognize $ 75.3 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 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

As of June 2022, there were no arrang ements 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 2022, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

Disaggregation of Revenues

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 December 2021

Three Months Ended June 2022

(In thousands) Outdoor Active Work Other Total

5 unchanged sentences

Geographic revenues

United States $ 945,218 $ 788,839 $ 213,535 $ 279 $ 1,947,871

International:

Americas $ 394,515 $ 790,729 $ 199,660 $ 148 $ 1,385,052

Europe 275,045 303,275 16,293 — 594,613

Asia-Pacific 99,064 159,941 22,925 — 281,930

Americas (non-U.S.) 95,609 73,685 15,574 — 184,868

Total $ 768,624 $ 1,253,945 $ 238,878 $ 148 $ 2,261,595

VF Corporation Q1 FY23 Form 10-Q 10

Three Months Ended December 2020

(In thousands) Outdoor Active Work Other Total

Channel revenues

Wholesale $ 763,743 $ 465,857 $ 200,872 $ 3,106 $ 1,433,578

Direct-to-consumer 804,711 655,922 63,470 89 1,524,192

Royalty 2,589 5,342 5,840 — 13,771

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

Geographic revenues

United States $ 776,674 $ 620,261 $ 170,760 $ — $ 1,567,695

International:

Europe 502,000 256,282 32,381 3,195 793,858

Asia-Pacific 213,271 199,202 51,858 — 464,331

Americas (non-U.S.) 79,098 51,376 15,183 — 145,657

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

Nine Months Ended December 2021

(In thousands) Outdoor Active Work Other Total

Channel revenues

Wholesale $ 2,426,963 $ 1,600,238 $ 693,910 $ 557 $ 4,721,668

Direct-to-consumer 1,614,783 2,488,454 144,029 — 4,247,266

Royalty 11,056 16,126 21,060 — 48,242

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

Geographic revenues

United States $ 1,919,914 $ 2,198,759 $ 640,431 $ 557 $ 4,759,661

International:

Europe 1,406,329 1,051,301 58,247 — 2,515,877

Asia-Pacific 506,710 641,289 111,561 — 1,259,560

Americas (non-U.S.) 219,849 213,469 48,760 — 482,078

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

Nine Months Ended December 2020

Three Months Ended June 2021

(In thousands) Outdoor Active Work Other Total

5 unchanged sentences

Geographic revenues

United States $ 1,451,827 $ 1,472,145 $ 446,850 $ — $ 3,370,822

International:

Americas $ 311,139 $ 756,379 $ 234,400 $ — $ 1,301,918

Europe 218,555 307,216 14,196 — 539,967

Asia-Pacific 88,060 238,473 26,139 — 352,672

Americas (non-U.S.) 151,539 139,054 42,402 — 332,995

Total $ 617,754 $ 1,302,068 $ 274,735 $ — $ 2,194,557

13 VF Corporation Q3 FY22 Form 10-Q

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, subject to working capital and other adjustments.

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

The purchase price was primarily funded with cash on hand.

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 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 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 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 .

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 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.

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

Cash and equivalents $ 218,104

Accounts receivable 19,698

Inventories 44,937

Other current assets 40,912

Property, plant and equipment 18,914

Intangible asset 1,201,000

Operating lease right-of-use assets 55,668

Other assets 58,479

Total assets acquired 1,657,712

Accounts payable 25,717

Other current liabilities 81,816

Operating lease liabilities 53,062

Deferred income tax liabilities 280,971

Other liabilities 35,245

Total liabilities assumed 476,811

Net assets acquired 1,180,901

Goodwill 1,249,594

Purchase price $ 2,430,495

VF Corporation Q3 FY22 Form 10-Q 14

The purchase price consisted of the following components:

(In thousands) December 28, 2020

Cash consideration $ 2,223,495

Contingent consideration 207,000

Purchase price $ 2,430,495

The goodwill is attributable to our ability to expand the Supreme ® brand into new markets, the acquired workforce and future collaboration opportunities for the Supreme ® brand.

All of the goodwill was assigned to the Active segment and will not be deductible for tax purposes.

The Supreme ® trademark, which management believes to have an indefinite life, has been valued at $ 1.2 billion using the relief-from-royalty method, which is an income valuation approach.

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.

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

December 2020

Nine Months Ended

December 2020

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

Income from continuing operations 377,987 387,949

Earnings per common share from continuing operations

Basic $ 0.97 $ 1.00

Diluted 0.96 0.99

These pro forma amounts have been calculated after applying VF’s accounting policies and adjusting the results of Supreme to reflect the fair value adjustments to intangible assets, property, plant and equipment and inventory.

The results of Supreme have also been adjusted for historical interest expense as the acquired business was debt-free on the acquisition date .

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.

Amounts do not include any marketing leverage, or operating efficiencies that VF believes are achievable.

NOTE 4 — DISCONTINUED OPERATIONS

7 unchanged sentences

Accordingly, the Company has reported the results of the Occupational Workwear business and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively, through the date of sale.

The related held-for-sale assets and l iabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets, through the date of sale.

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 nine months ended December 2021, and is subject to working capital and other adjustments.

The Company has received proceeds of $ 616.9 million, net of cash sold, resulting in an estimated after-tax gain on sale of $ 146.0 million, of which $ 145.6 million was included i n the income from discontinued operations, net of tax line item in the Consolidated Statement o f Operations for the three months ended June 2021, and is subject to adjustment for certain income tax matters.

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 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.

15 VF Corporation Q3 FY22 Form 10-Q

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

Under the terms of a transition services agreement, the Company will provide certain support services for periods generally between 12 and 24 months from the closing date of the transaction.

Summarized Discontinued Operations Financial Information

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 December Nine Months Ended December

Three Months Ended June

(In thousands) 2022 2021

1 unchanged sentence

Cost of goods sold

— 115,801 117,193 330,418

Selling, general and administrative expenses

— 35,576 38,735 103,743

Interest income, net

1 unchanged sentence

Income from discontinued operations before income taxes

— 25,177 25,696 30,588

Gain on the sale of discontinued operations before income taxes

— — 133,571 —

Total income from discontinued operations before income taxes

— 25,177 159,267 30,588

Income tax expense (benefit) (a)

— 5,596 ( 11,006 ) 5,402

Income tax benefit (a)

Income from discontinued operations, net of tax

$ — $ 170,273

(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

$ 34,132 $ 18,771

Accounts receivable, net

103,835 91,554

245,227 242,204

Other current assets

Property, plant and equipment, net

49,394 48,605

Intangible assets, net

54,471 54,472

43,530 43,530

Operating lease right-of-use assets

43,220 42,930

Total assets of discontinued operations

$ 587,578 $ 560,648

Accounts payable

$ 59,965 $ 50,434

Accrued liabilities

38,956 34,470

Operating lease liabilities

31,301 33,073

Other liabilities

Deferred income tax liabilities (a)

( 8,828 ) ( 4,095 )

Total liabilities of discontinued operations

$ 125,257 $ 120,185

(a) Deferred income tax balances reflect VF's consolidated netting by jurisdiction.

(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.

11 VF Corporation Q1 FY23 Form 10-Q

NOTE 5 — INVENTORIES

(In thousands) December 2021 March 2021 December 2020

(In thousands) June 2022 March 2022 June 2021

Finished products $ 2,277,145 $ 1,353,483 $ 1,139,926

2 unchanged sentences

Total inventories $ 2,341,395 $ 1,418,673 $ 1,216,818

VF Corporation Q3 FY22 Form 10-Q 16

During the three months ended June 2022, the Company modified terms with the majority of its suppliers to take ownership of inventory near point of shipment rather than destination.

Finished products included $ 621.5 million, $ 67.7 million and $ 73.4 million of in-transit inventory as of June 2022, March 2022 and June 2021, respectively.

NOTE 6 — INTANGIBLE ASSETS

December 2021 March 2021

June 2022 March 2022

(In thousands) Weighted

7 unchanged sentences

Intangible assets, net $ 2,984,136 $ 3,000,351

Amortization expense for the three and nine months ended December 2021 was $ 3.8 million and $ 11.9 million, respectively.

Amortization expense for the three months ended June 2022 was $ 3.6 million.

Based on the carrying amounts of amortizable intangible assets noted above, estimated amortization expense for the next five years beginning in Fiscal 2023 is $ 14.4 million, $ 13.9 million, $ 13.4 million, $ 12.4 million and $ 11.9 million, respectively.

3 unchanged sentences

Balance, March 2022 $ 660,786 $ 1,619,121 $ 113,900 $ 2,393,807

Measurement period adjustment to Supreme acquisition (Note 4) — ( 717 ) — ( 717 )

Currency translation ( 9,397 ) ( 23,955 ) ( 907 ) ( 34,259 )

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.

Balance, June 2022 $ 651,389 $ 1,595,166 $ 112,993 $ 2,359,548

Accum ulated impairm ent charges for the Outdoor segment were $ 323.2 million as of June 2022 and March 2022.

No impairment charges were recorded during the three months ended June 2022.

NOTE 8 — LEASES

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Components of lease cost were as follows:

Three Months Ended December Nine Months Ended December

Three Months Ended June

(In thousands) 2022 2021

Operating lease cost $ 101,705 $ 113,500

Other lease costs 34,092 19,336 84,522 53,906

Other lease cost 33,165 27,939

Total lease cost $ 134,870 $ 141,439

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.

During the three months ended June 2022 and 2021, the Company paid $ 102.3 million and $ 119.4 million of cash for operating leases, respectively.

During the three months ended June 2022 and 2021, the Company obtained $ 105.9 million and $ 52.3 million of right-of-use assets in exchange for lease liabilities, respectively.

VF Corporation Q1 FY23 Form 10-Q 12

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 9 — PENSION PLANS

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

Three Months Ended December Nine Months Ended December

Three Months Ended June

(In thousands) 2022 2021

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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 $ 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 December 2021, September 2021 and June 2021 was 2.96 %, 2.91 % and 2.90 %, respectively.

VF contributed $ 2.5 million to its defined benefit plans during the three months ended June 2022, and intends to make approximately $ 19.1 million of contributions during the remainder of Fiscal 2023.

During the three months ended June 2022, VF entered into an agreement with The Prudential Insurance Company of America (“Prudential”) to purchase an irrevocable group annuity contract relating to approximately $ 330 million of the U.S.

qualified defined benefit pension plan obligations.

The transaction closed on June 30, 2022 and was funded entirely by existing assets of the plan.

Under the group annuity contract, Prudential assumed responsibility for benefit payments and annuity administration

for approximately 17,700 retirees and beneficiaries.

The transaction will not change the amount or timing of monthly retirement benefit payments.

VF recorded a $ 91.8 million settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations during the three months ended June 2022 to recognize the related deferred actuarial losses in accumulated other comprehensive income (“OCI”) .

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

The discount rate used to determine the pension obligation as of June 2022 was 4.93 %.

Additionally, 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.

NOTE 10 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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.

During the three months ended June 2022, 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.

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.

There were no shares held in treasury at the end of June 2022, March 2022 or June 2021.

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.

13 VF Corporation Q1 FY23 Form 10-Q

Accumulated Other 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.

Comprehensive income (loss) consists of net income (loss) and specified components of 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).

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

(In thousands) December 2021 March 2021 December 2020

(In thousands) June 2022 March 2022 June 2021

Foreign currency translation and other $ ( 833,166 ) $ ( 751,632 ) $ ( 663,120 )

3 unchanged sentences

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

Three Months Ended December 2021

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

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

Other comprehensive income (loss) before reclassifications

( 25,711 ) 383 11,961 ( 13,367 )

Amounts reclassified from accumulated other comprehensive income (loss)

— 6,281 10,463 16,744

Net other comprehensive income (loss)

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

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

Other comprehensive income (loss) before reclassifications

36,274 ( 3,541 ) ( 68,373 ) ( 35,640 )

Amounts reclassified from accumulated other comprehensive income (loss)

— 2,879 ( 3,544 ) ( 665 )

Net other comprehensive income (loss)

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

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

Nine Months Ended December 2021

Three Months Ended June 2022

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

6 unchanged sentences

( 81,534 ) 56,151 77,086 51,703

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

Nine Months Ended December 2020

Balance, June 2022 $ ( 833,166 ) $ ( 174,139 ) $ 132,429 $ ( 874,876 )

Three Months Ended June 2021

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

6 unchanged sentences

37,053 316 5,745 43,114

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

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

VF Corporation Q1 FY23 Form 10-Q 14

Reclassifications out of accumulated OCI were as follows:

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

(In thousands) Three Months Ended June

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:

Liquidation of foreign entities

Other income (expense), net $ — $ — $ — $ ( 42,364 )

Total before tax

— — — ( 42,364 )

Tax (expense) benefit

— — — ( 42,364 )

Amortization of defined benefit pension plans:

8 unchanged sentences

( 70,635 ) ( 2,727 )

( 6,281 ) ( 2,879 ) ( 11,131 ) ( 7,689 )

Gains (losses) on derivative financial instruments:

17 unchanged sentences

Incentive Equity Awards Granted

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.

During the three months ended June 2022, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 2,360,068 shares of its Common Stock at an exercise price of $ 45.34 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.

3 unchanged sentences

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:

Nine Months Ended December 2021

Three Months Ended June 2022

Expected volatility 30 % to 41 %

4 unchanged sentences

Weighted average fair value at date of grant $ 13.52

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-

During the three months ended June 2022, VF granted 340,571 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 $ 45.34 per share.

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 Talent 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.

The financial targets include 50 % weighting based on VF's revenue growth and 50 % weighting

based on VF's gross margin performance over the three-year period compared to financial targets.

Additionally, the actual number of shares earned may be adjusted upward or downward by 25 % of the target award, based on how VF's total shareholder return ("TSR") over the three-year period compares to the TSR for companies included in the Standard & Poor's 500 Consumer Discretionary Index.

The grant date fair value of the TSR-based adjustment related to the performance-based RSU grants was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, and was $ 3.46 per share.

15 VF Corporation Q1 FY23 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 wa s $ 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 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

During the three months ended June 2022, VF granted 19,860 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.

The fair market value of VF Common Stock at the date the units were granted was $ 45.34 per share.

In addition, VF granted 399,461 nonperformance-based RSUs to employees during the nine months ended December 2021.

In addition, VF granted 589,208 nonperformance-based RSUs to employees during the three months ended June 2022.

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 nine months ended December 2021.

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

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

The fair market value of VF Common Stock at the date the units were granted was $ 45.34 per share.

NOTE 12 — INCOME TAXES

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 %.

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.

The effective income tax rate for the three months ended June 2022 was 10.6 % compared to 14.1 % in the 2021 period.

The three months ended June 2022 included a net discrete tax expense of $ 0.8 million, which included a $ 1.6 million net tax expense related to unrecognized tax benefits and interest and a $ 0.8 million net tax benefit related to withholding taxes on prior foreign earnings.

Excluding the $ 0.8 million net discrete tax expense in the 2022 period, the effective income tax rate would have been 12.0 %.

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.

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 %.

Without discrete items, the effective income tax rate for the three months ended June 2022 decreased by 3.3 % compared with the 2021 period primarily due to year-to-date losses generated in the current quarter.

VF files a consolidated U.S.

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In the U.S., the Internal Revenue Service ("IRS") examinations for tax years throug h 2015 have been effectively settled.

The examination of Timberland’s 2011 tax return is ongoing.

As previously reported, VF petitioned the U.S.

Tax Court (the “Court”) to resolve an IRS dispute regarding the timing of income inclusion associated with VF’s acquisition of The Timberland Company in September 2011.

While the IRS argues that all such income should have been immediately included in 2011, VF has reported periodic income inclusions in subsequent tax years.

Both parties moved for summary judgment on the issue.

On January 31, 2022, the Court issued its opinion in favor of the IRS and on July 14, 2022 issued its final decision.

VF believes the opinion of the Court was in error based on the technical merits and intends to appeal.

VF continues to believe its timing and treatment of the income inclusion is appropriate and VF is vigorously defending its position.

No impact of the Court opinion has been recorded in the consolidated financial statements based on our assessment of the position under the more-likely-than-not standard of the accounting literature.

Refer to Note 18 for additional details on this matter.

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.

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 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.

During the three months ended June 2022, the amount of net unrecognized tax benefits and associated interest increased by $ 1.9 million to $ 279.6 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 $ 257.1 million related to the completion of examinations and other settlements with tax authorities and the expiration of statutes of limitations, of which $ 12.5 million would reduce income tax expense.

VF Corporation Q3 FY22 Form 10-Q 22

NOTE 13 — REPORTABLE SEGMENT INFORMATION

5 unchanged sentences

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

VF Corporation Q1 FY23 Form 10-Q 16

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

Three Months Ended December Nine Months Ended December

Three Months Ended June

(In thousands) 2022 2021

3 unchanged sentences

Work 238,878 274,735

Other 279 3,195 557 4,678

Total segment revenues $ 2,261,595 $ 2,194,557

8 unchanged sentences

Interest expense, net ( 31,262 ) ( 32,775 )

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

Income from continuing operations before income taxes

Income (loss) from continuing operations before income taxes

$ ( 62,614 ) $ 179,150

NOTE 14 — EARNINGS PER SHARE

Three Months Ended December Nine Months Ended December

Three Months Ended June

(In thousands, except per share amounts) 2022 2021

Earnings per share – basic:

Income from continuing operations

Earnings (loss) per share – basic:

Income (loss) from continuing operations

$ ( 55,960 ) $ 153,972

1 unchanged sentence

387,563 391,351

Earnings per share from continuing operations

Earnings (loss) per share from continuing operations

$ ( 0.14 ) $ 0.39

Earnings per share – diluted:

Income from continuing operations

Earnings (loss) per share – diluted:

Income (loss) from continuing operations

$ ( 55,960 ) $ 153,972

2 unchanged sentences

Incremental shares from stock options and other dilutive securities

2,065 2,979 2,360 2,345

Adjusted weighted average common shares outstanding

387,563 394,128

Earnings per share from continuing operations

Earnings (loss) per share from continuing operations

$ ( 0.14 ) $ 0.39

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

In the three-month period ended June 2022, the dilutive impact of outstanding options and other securities was excluded from dilutive shares as a result of the Company's net loss for the period and, as such, their inclusion would have been anti-dilutive.

Outstanding options to purchase approximately 2.9 million shares were excluded from the calculation of diluted earnings per share for the three-month period ended June 2021 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 calculation of diluted earnings per share for the three-month period ended June 2021 because these units were not considered to be contingent outstanding shares in the period.

NOTE 15 — FAIR VALUE MEASUREMENTS

3 unchanged sentences

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable

data through corroboration with observable market data.

• Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data.

Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities, or (iii) information derived from or corroborated by observable market data.

17 VF Corporation Q1 FY23 Form 10-Q

• Level 3 — Prices or valuation techniques that require significant unobservable data inputs.

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

These inputs would normally be VF’s own data and judgments about

assumptions that market participants would use in pricing the asset or liability.

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

December 2021

Financial assets:

7 unchanged sentences

Deferred compensation 109,832 — 109,832 —

Contingent consideration 49,000 — — 49,000

Total Fair Value Fair Value Measurement Using (a)

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Time deposits 1,100 1,100 — —

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

Derivative financial instruments 79,046 — 79,046 —

4 unchanged sentences

Contingent consideration 56,976 — — 56,976

(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 December 2021 Nine Months Ended December 2021

(a) There were no transfers among the levels within the fair value hierarchy during the three months ended June 2022 or the year ended March 2022.

The following table presents the activity related to the contingent consideration liability designated as Level 3:

Three Months Ended June

(In thousands) 2022 2021

Beginning Balance $ 56,976 $ 207,000

Change in fair value — ( 73,000 )

Cash payout ( 56,976 ) —

Ending Balance $ — $ 134,000

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.

1 unchanged sentence

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 Operations.

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.

The contingent consideration liability represented the amount of additional cash consideration paid to the selling shareholders of Supreme Holdings, Inc.

("Supreme"), which was dependent upon the achievement of certain financial targets over the one-year earn-out period ended January 31, 2022.

The estimated fair value of the contingent consideration liability, which could range from zero to $ 300.0 million, was $ 57.0 million as of March 2022

VF Corporation Q1 FY23 Form 10-Q 18

and $ 134.0 million as of June 2021.

During Fiscal 2022, the contingent consideration liability was remeasured at fair value based on the probability-weighted present value of various future cash payment outcomes resulting from the estimated achievement levels of the financial targets, with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations.

The contingent consideration was paid during the three months ended June 2022.

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 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.

At June 2022 and March 2022, their carrying values approximated fair value.

Additionally, at June 2022 and March 2022, the carrying values of VF’s long-term debt, including the current portion, were $ 4,469.5 million and $ 5,085.3 million, respectively, compared with fair values of $ 4,208.3 million and $ 5,042.5 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 $ 2.8 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 were $ 3.3 billion at June 2022, $ 2.9 billion at March 2022 and $ 2.7 billion at June 2021, 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 have maturities up to 20 months.

3 unchanged sentences

with Unrealized Losses

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

(In thousands) June 2022 March 2022 June 2021 June 2022 March 2022 June 2021

Foreign currency exchange contracts designated as hedging instruments

4 unchanged sentences

$ 156,458 $ 79,046 $ 13,838 $ ( 23,770 ) $ ( 27,723 ) $ ( 65,725 )

25 VF Corporation Q3 FY22 Form 10-Q

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:

December 2021 March 2021 December 2020

June 2022 March 2022 June 2021

(In thousands) Derivative

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

(In thousands) December 2021 March 2021 December 2020

(In thousands) June 2022 March 2022 June 2021

Other current assets $ 133,859 $ 71,910 $ 6,746

2 unchanged sentences

Other liabilities ( 3,221 ) ( 3,456 ) ( 4,334 )

19 VF Corporation Q1 FY23 Form 10-Q

Cash Flow Hedges

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 are summarized as follows:

VF uses derivative contracts primarily to hedge a portion of the exchange risk for its forecasted sales, inventory purchases, 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:

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

Three Months Ended December

Gain (Loss) on Derivatives Recognized in OCI

Nine Months Ended December

Three Months Ended June

Cash Flow Hedging Relationships 2022 2021

Foreign currency exchange $ 99,430 $ ( 4,563 )

(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

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

Three Months Ended June

Location of Gain (Loss) 2022 2021

14 unchanged sentences

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 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.

At June 2022, accumulated OCI include d $ 108.9 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

Net Investment Hedge

1 unchanged sentence

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.

During the three-month periods ended June 2022 and June 2021, the Company recognized an after-tax gain of $ 87.7 million and an after-tax loss of $ 11.5 million, respectively, in OCI related to the net investment hedge transaction.

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 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 $ 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.

During the three months ended June 2022, VF recognized $ 6.1 million of restructuring charges, related to approved initiatives.

Of the restructuring charges recognized in the three months ended June 2022, $ 4.7 million were reflected in selling, general and administrative expenses and $ 1.4 million in cost of goods sold.

The Company has not recognized any significant incremental

costs related to accruals for the year ended March 2022 or prior periods.

Of the $ 21.2 million total restructuring accrual at June 2022, $ 20.5 million is expected to be paid out within the next 12 months and is classified within accrued liabilities.

The remaining $ 0.7 million will be paid out beyond the next 12 months and thus is classified within other liabilities.

VF Corporation Q1 FY23 Form 10-Q 20

The components of the restructuring charges are as follows:

Three Months Ended December Nine Months Ended December

Three Months Ended June

(In thousands) 2022 2021

Severance and employee-related benefits $ 2,094 $ 2,874

Asset impairments — — — 10,557

Accelerated depreciation 3,668 1,431

Inventory write-downs — 7,115 — 7,115

Contract termination and other 344 —

1 unchanged sentence

Restructuring costs by business segment are as follows:

Three Months Ended December Nine Months Ended December

Three Months Ended June

(In thousands) 2022 2021

Outdoor $ — $ 2,223

Active — 3,275 1,008 3,938

Work 1,527 8,409 2,315 27,216

Other 6,106 1,350

Total $ 6,106 $ 4,305

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

The activity in the restructuring accrual for the three-month period ended June 2022 was as follows:

(In thousands) Severance Other Total

4 unchanged sentences

Impact of foreign currency ( 93 ) ( 45 ) ( 138 )

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

27 VF Corporation Q3 FY22 Form 10-Q

Accrual at June 2022 $ 19,718 $ 1,488 $ 21,206

NOTE 18 — CONTINGENCIES

The Company petitioned the U.S.

Tax Court to resolve an IRS dispute regarding the timing of income inclusion associated with the 2011 Timberland acquisition.

The Company remains confident in our timing and treatment of the income inclusion, and therefore this matter is not reflected in our consolidated financial statements.

We are vigorously defending our position, and do not expect the resolution to have a material adverse impact on the Company's financial position, results of operations or cash flows.

While the IRS argues immediate income inclusion, the Company's position is to include the income over a period of years.

As the matter relates to 2011, nearly half of the timing at dispute has passed with the Company including the income, and paying the related tax, on our income tax returns.

notes that should the IRS prevail in this timing matter, the net interest expense would be up to $ 196.7 million.

Further, this timing matter is impacted by the Tax Cuts and Jobs Act that reduced the U.S.

corporate income tax rate from 35% to 21%.

If the IRS is successful, this rate differential would increase tax expense by approximately $ 136.3 million.

As previously reported, VF petitioned the U.S.

Tax Court (the “Court”) to resolve an IRS dispute regarding the timing of income inclusion associated with VF’s acquisition of The Timberland Company in September 2011.

While the IRS argues that all such income should have been immediately included in 2011, VF has reported periodic income inclusions in subsequent tax years.

Both parties moved for summary judgment on the issue.

On January 31, 2022, the Court issued its opinion in favor of the IRS and on July 14, 2022 issued its final decision.

VF believes the opinion of the Court was in error based on the technical merits and intends to appeal;

however, VF will be required to pay the 2011 taxes and interest being disputed or post a surety bond.

It is anticipated that during Fiscal 2023, the IRS will assess, and VF will pay, the 2011 taxes and interest, which would be recorded as a tax receivable based on the technical merits of our position with regards to the case.

The gross amount of taxes and interest as of July 2, 2022 was estimated at approximately $ 857.5 million and will continue to

accrue interest until paid.

VF continues to believe its timing and treatment of the income inclusion is appropriate and VF is vigorously defending its position.

However, should the Court opinion ultimately be upheld on appeal, this tax receivable may not be collected by VF.

If the Court opinion is upheld, VF should be entitled to a refund of taxes paid on the periodic inclusions that VF has reported.

However, any such refund could be substantially reduced by potential indirect tax effects resulting from application of the Court opinion.

Deferred tax liabilities, representing VF’s future tax on annual inclusions, would also be released.

The net impact to tax expense estimated as of July 2, 2022 could be up to $ 715.0 million.

The Company is currently involved in other legal proceedings that are ordinary, routine litigation incidental to the business.

The resolution of any particular proceeding is not currently expected to have a material adverse impact on the Company's financial position, results of operations or cash flows.

The resolution of which is not currently expected to have a material adverse impact on the Company's financial position, results of operations or cash flows.

NOTE 19 — SUBSEQUENT EVENT

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.

On July 26, 2022, VF’s Board of Directors declared a quarterly cash dividend of $ 0.50 per share, payable on September 20, 2022 to stockholders of record on September 12, 2022.

21 VF Corporation Q1 FY23 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