V F CORP 10-K

ITEM 9A. CONTROLS AND PROCEDURES. CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES Under the supervision of the Chief Executive Officer and the Chief Financial Officer, VF conducted an evaluation of the effectiveness of the design and operation of VF’s “disclosure controls and procedures” as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) as of March 30, 2024. These require that VF ensure that information required to be disclosed by VF in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to VF’s management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based on VF’s evaluation, the principal executive officer and the principal financial officer concluded that VF’s disclosure controls and procedures were effective as of March 30, 2024. MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING See page F-2 of this Annual Report for “Management’s Report on Internal Control Over Financial Reporting.” REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM See page F-3 of this Annual Report for the "Report of Independent Registered Public Accounting Firm." CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There were no changes in VF’s internal control over financial reporting that occurred during its last fiscal quarter that have materially affected, or are reasonably likely to materially affect, VF’s internal control over financial reporting. ITEM 9B. OTHER INFORMATION. During the three months ended March 30, 2024, no director or officer of VF adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. VF Corporation Fiscal 2024 Form 10-K 43 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Information regarding VF’s Executive Officers required by Item 10 of this Part III is set forth in Item 1 of Part I of this Annual Report under the caption “Information About Our Executive Officers.” Information required by Item 10 of Part III regarding VF’s Directors is included under the caption “Election of Directors” in VF’s 2024 Proxy Statement that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended March 30, 2024, which information is incorporated herein by reference. Information regarding compliance with Section 16(a) of the Exchange Act of 1934 is included under the caption “Delinquent Section 16(a) Reports” (to the extent reported therein) in VF’s 2024 Proxy Statement that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended March 30, 2024, which information is incorporated herein by reference. Information regarding the Audit Committee is included under the caption “Corporate Governance at VF — Board Committees and Their Responsibilities — Audit Committee” in VF’s 2024 Proxy Statement that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended March 30, 2024, which information is incorporated herein by reference. VF has adopted a written code of ethics, “VF Corporation Code of Business Conduct,” that is applicable to all VF directors, officers and employees, including VF’s chief executive officer, chief financial officer, chief accounting officer and other executive officers identified pursuant to this Item 10 (collectively, the “Selected Officers”). The code is posted on VF’s website, www.vfc.com. VF will disclose any changes in or waivers from its code of ethics applicable to any Selected Officer or director on its website at www.vfc.com. The Board of Directors’ Corporate Governance Principles, the Audit Committee, Governance and Corporate Responsibility Committee, Talent and Compensation Committee and Finance Committee charters and other corporate governance information, including the method for interested parties to communicate directly with nonmanagement members of the Board of Directors, are available on VF’s website. These documents, as well as the VF Corporation Code of Business Conduct, will be provided free of charge to any shareholder upon request directed to the Secretary of VF Corporation at P.O. Box 13919, Denver, CO 80201. ITEM 11. EXECUTIVE COMPENSATION. Information required by Item 11 of this Part III is included under the captions “Corporate Governance at VF” and “Executive Compensation” in VF’s 2024 Proxy Statement that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended March 30, 2024, which information is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Information required by Item 12 of this Part III is included under the captions “Security Ownership of Certain Beneficial Owners and Management” and "Executive Compensation" in VF’s 2024 Proxy Statement that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended March 30, 2024, which information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. Information required by Item 13 of this Part III is included under the caption “Corporate Governance at VF” in VF’s 2024 Proxy Statement that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended March 30, 2024, which information is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. Information required by Item 14 of this Part III is included under the caption “Professional Fees of PricewaterhouseCoopers LLP” in VF’s 2024 Proxy Statement that will be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year ended March 30, 2024, which information is incorporated herein by reference. 44 VF Corporation Fiscal 2024 Form 10-K Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) The following documents are filed as a part of this Fiscal 2024 report: 1. Financial statements PAGE NUMBER Management’s Report on Internal Control Over Financial Reporting F- 2 Report of Independent Registered Public Accounting Firm F- 3 Consolidated Balance Sheets F- 5 Consolidated Statements of Operations F- 6 Consolidated Statements of Comprehensive Income (Loss) F- 7 Consolidated Statements of Cash Flows F- 8 Consolidated Statements of Stockholders’ Equity F- 10 Notes to Consolidated Financial Statements F- 11 2. Financial statement schedules PAGE NUMBER Schedule II — Valuation and Qualifying Accounts F- 57 All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. 3. Exhibits NUMBER DESCRIPTION 3.1 Articles of Incorporation, restated as of October 21, 2013 (Incorporated by reference to Exhibit 3(i) to Form 8-K filed October 21, 2013) 3.2 Amended and Restated By-Laws of V.F. Corporation, effective January 24, 2023 (Incorporated by reference to Exhibit 3.1 to Form 8-K filed January 25, 2023) 4.1 A specimen of VF’s Common Stock certificate (Incorporated by reference to Exhibit 4(A) to Form 10-K for the year ended January 3, 1998) 4.2 Indenture between VF and United States Trust Company of New York, as Trustee, dated September 29, 2000 (Incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2000) 4.3 Form of 6.00% Note due October 15, 2033 for $297,500,000 (Incorporated by reference to Exhibit 4.2 to Form S-4 Registration Statement No. 110458 filed November 13, 2003) 4.4 Indenture between VF and The Bank of New York Trust Company, N.A., as Trustee, dated October 15, 2007 (Incorporated by reference to Exhibit 4.1 to Form S-3ASR Registration Statement No. 333-146594 filed October 10, 2007) 4.5 First Supplemental Indenture between VF and The Bank of New York Trust Company, N.A., as Trustee, dated October 15, 2007 (Incorporated by reference to Exhibit 4.2 to Form 8-K filed October 25, 2007) 4.6 Form of 6.45% Note due 2037 for $350,000,000 (Incorporated by reference to Exhibit 4.4 to Form 8-K filed October 25, 2007) 4.7 Third Supplemental Indenture between VF, The Bank of New York Mellon Trust Company, N.A., as Trustee, and The Bank of New York Mellon, London Branch, as Paying Agent, dated as of September 20, 2016 (Incorporated by reference to Exhibit 4.2 to Form 8-K filed September 20, 2016) 4.8 Form of 0.625% Senior Notes due 2023 (Incorporated by reference to Exhibit 4.3 to Form 8-K filed September 20, 2016) 4.9 Fourth Supplemental Indenture between VF, The Bank of New York Mellon Trust Company, N.A., as Trustee, and The Bank of New York Mellon, London Branch, as Paying Agent dated as of February 25, 2020 (Incorporated by reference to Exhibit 4.2 to Form 8-K filed February 25, 2020) 4.10 Form of 0.250% Senior Notes due 2028 (Incorporated by reference to Exhibit 4.3 to Form 8-K filed February 25, 2020) 4.11 Form of 0.625% Senior Notes due 2032 (Incorporated by reference to Exhibit 4.4 to Form 8-K filed February 25, 2020) 4.12 Fifth Supplemental Indenture between VF and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of April 23, 2020 (Incorporated by reference to Exhibit 4.2 to Form 8-K filed April 23, 2020) 4.13 Form of 2.400% Senior Notes due 2025 (Incorporated by reference to Exhibit 4.4 to Form 8-K filed April 23, 2020) 4.14 Form of 2.800% Senior Notes due 2027 (Incorporated by reference to Exhibit 4.5 to Form 8-K filed April 23, 2020) 4.15 Form of 2.950% Senior Notes due 2030 (Incorporated by reference to Exhibit 4.6 to Form 8-K filed April 23, 2020) 4.16 Sixth Supplemental Indenture between VF and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of March 7, 2023 (Incorporated by reference to Exhibit 4.2 to Form 8-K filed March 7, 2023) 4.17 Form of 4.125% Senior Notes due 2026 (Incorporated by reference to Exhibit 4.3 to Form 8-K filed March 7, 2023) VF Corporation Fiscal 2024 Form 10-K 45 Table of Contents NUMBER DESCRIPTION 4.18 Form of 4.250% Senior Notes due 2029 (Incorporated by reference to Exhibit 4.4 to Form 8-K filed March 7, 2023) 4.19 Description of Securities 10.1 1996 Stock Compensation Plan, as amended and restated as of February 10, 2015 (Incorporated by reference to Appendix B to the 2015 Proxy Statement filed March 19, 2015)* 10.2 1996 Stock Compensation Plan, as amended and restated as of March 12, 2024* 10.3 Form of VF Corporation 1996 Stock Compensation Plan Non-Qualified Stock Option Certificate (Incorporated by reference to Exhibit 10(B) to Form 10-K for the year ended January 2, 2010)* 10.4 Form of VF Corporation 1996 Stock Compensation Plan Non-Qualified Stock Option Certificate for Non-Employee Directors (Incorporated by reference to Exhibit 10(C) to Form 10-K for the year ended December 31, 2011)* 10.5 Form of Award Certificate for Performance-Based Restricted Stock Units (Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended September 26, 2020)* 10.6 Form of Award Certificate for Restricted Stock Units for Non-Employee Directors (Incorporated by reference to Exhibit 10(F) to Form 10-K for the year ended March 28, 2020)* 10.7 Form of Award Certificate for Restricted Stock Units (Incorporated by reference to Exhibit 10(K) to Form 10-K for the year ended March 28, 2020)* 10.8 Form of Award Certificate for Restricted Stock Units Special Award (Cliff Vesting) (Incorporated by reference to Exhibit 10(L) to Form 10-K for the year ended March 28, 2020)* 10.9 Form of Award Certificate for Restricted Stock Units Special Award (Split Vesting) (Incorporated by reference to Exhibit 10(M) to Form 10-K for the year ended March 28, 2020)* 10.10 Form of Award Certificate for Restricted Stock Special Award (Cliff Vesting) (Incorporated by reference to Exhibit 10(P) to Form 10-K for the year ended March 28, 2020)* 10.11 Form of Award Certificate for Restricted Stock Special Award (Split Vesting) (Incorporated by reference to Exhibit 10(Q) to Form 10-K for the year ended March 28, 2020)* 10.12 Deferred Compensation Plan, as amended and restated as of December 31, 2001 (Incorporated by reference to Exhibit 10(A) to Form 10-Q for the quarter ended March 30, 2002)* 10.13 Executive Deferred Savings Plan, as amended and restated as of December 31, 2001 (Incorporated by reference to Exhibit 10(B) to Form 10-Q for the quarter ended March 30, 2002)* 10.14 Executive Deferred Savings Plan II, as amended and restated January 1, 2020 (Incorporated by reference to Item 10.1 to Form 10-Q for the quarter ended December 28, 2019)* 10.15 Amendment to Executive Deferred Savings Plan (Incorporated by reference to Exhibit 10(b) to Form 8-K filed December 17, 2004)* 10.16 Amended and Restated Second Supplemental Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan for Mid-Career Senior Management (Incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended April 1, 2006)* 10.17 Amended and Restated Fourth Supplemental Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan for Participants in VF’s Deferred Compensation Plan (Incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended April 1, 2006)* 10.18 Amended and Restated Seventh Supplemental Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan for Participants in VF’s Executive Deferred Savings Plan (Incorporated by reference to Exhibit 10.5 to Form 10-Q for the quarter ended April 1, 2006)* 10.19 Amended and Restated Eighth Supplemental Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.6 to Form 10-Q for the quarter ended April 1, 2006)* 10.20 Amended and Restated Ninth Supplemental Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan relating to the computation of benefits for Senior Management (Incorporated by reference to Exhibit 10.7 to Form 10-Q for the quarter ended April 1, 2006)* 10.21 Amended and Restated Tenth Supplemental Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan for Participants in VF’s Mid-Term Incentive Plan (Incorporated by reference to Exhibit 10.8 to Form 10-Q for the quarter ended April 1, 2006)* 10.22 Eleventh Supplemental Annual Benefit Determination Pursuant to the Amended and Restated Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.9 to Form 10-Q for the quarter ended April 1, 2006)* 10.23 Twelfth Supplemental Benefit Determination Pursuant to the VF Corporation Amended and Restated Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended September 27, 2014)* 10.24 Amended and Restated Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.10 to Form 10-Q for the quarter ended April 1, 2006)* 10.25 Resolution of the Board of Directors dated December 3, 1996 relating to lump sum payments under VF’s Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10(N) to Form 10-K for the year ended January 4, 1997)* 10.26 2019 Form of Change in Control Agreement with Certain Senior Management of VF or its Subsidiaries (Incorporated by reference to Exhibit 10(HH) to Form 10-K for the year ended March 28, 2020)* 46 VF Corporation Fiscal 2024 Form 10-K Table of Contents NUMBER DESCRIPTION 10.27 Amended and Restated Deferred Savings Plan for Non-Employee Directors (Incorporated by reference to Exhibit 10(W) to Form 10-K for the year ended January 3, 2009)* 10.28 Form of Indemnification Agreement with each of VF’s Non-Employee Directors (Incorporated by reference to Exhibit 10.2 of the Form 10-Q for the quarter ended September 27, 2008)* 10.29 2004 Mid-Term Incentive Plan, a subplan under the 1996 Stock Compensation Plan, as amended and restated as of October 18, 2017 (Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2017)* 10.30 2004 Long-Term Incentive Plan, a subplan under the 1996 Stock Compensation Plan, as amended and restated as of March 11, 2024* 10.31 Annual Incentive Plan (effective prior to May 15, 2023) (Incorporated by reference to Exhibit 10(HH) to Form 10-K for the year ended April 2, 2022)* 10.32 Annual Incentive Plan (effective May 15, 2023) (Incorporated by reference to Exhibit 10(II) to Form 10-K for the year ended April 1, 2023)* 10.33 Form of Non-Competition, Non-Solicitation and Confidentiality Agreement for Equity Plan Participants (Incorporated by reference to Exhibit 10(JJ) to Form 10-K for the year ended April 1, 2023) 10.34 Retirement and General Release Agreement dated December 2, 2022 (Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended December 31, 2022)* 10.35 Offer Letter between VF and Bracken Darrell, dated June 20, 2023 (Incorporated by reference to Exhibit 10.1 to Form 8-K filed June 20, 2023)* 10.36 Severance Plan for Section 16 Officers (effective October 6, 2023) (Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended December 30, 2023)* 10.37 Five-Year Revolving Credit Agreement by and among V.F. Corporation and VF International Sagl, as borrowers, the lenders named therein, JPMorgan Chase Bank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., BofA Securities, Inc., Barclays Bank PLC, HSBC Securities (USA) Inc., U.S. Bank National Association and Wells Fargo Securities, LLC, as Joint-Lead Arrangers and Joint Bookrunners, Bank of America, N.A., Barclays Bank PLC, HSBC Bank USA, National Association, U.S. Bank National Association and Wells Fargo Bank, National Association, as Syndication Agents, and ING Bank N.V., Dublin Branch, PNC Bank, N.A., TD Bank, N.A. and Morgan Stanley Bank, N.A., as Documentation Agents, dated November 24, 2021 (Incorporated by reference to Exhibit 10.1 to Form 8-K filed November 24, 2021) 10.38 Amendment No. 1 to Revolving Credit Agreement, dated February 16, 2023, by and among V.F. Corporation, JPMorgan Chase Bank, N.A., as Administrative Agent, the Lenders party thereto and the other parties thereto (Incorporated by reference to Exhibit 10.1 to Form 8-K filed February 16, 2023) 10.39 Amendment No. 2 to Revolving Credit Agreement, dated May 19, 2023, by and among V.F. Corporation, JPMorgan Chase Bank, N.A., as Administrative Agent, the Lenders party thereto and the other parties thereto (Incorporated by reference to Exhibit 10(NN) to Form 10-K for the year ended April 1, 2023) 10.40 Amendment No. 3 to Revolving Credit Agreement, dated as of April 25, 2024, by and among V.F. Corporation, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Lenders party thereto (Incorporated by reference to Exhibit 10.1 to Form 8-K filed April 26, 2024) 10.4 1 Term Loan Agreement by and among V.F. Corporation, as borrower, the lenders named therein, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A, PNC Bank National Association, TD Securities (USA) LLC, Truist Securities, Inc. and U.S. Bank National Association, as Joint Lead Arrangers and Joint Bookrunners, Wells Fargo Bank, National Association, as Syndication Agent, and PNC Bank National Association, TD Bank, N.A., Truist Bank and U.S. Bank National Association, as Documentation Agents, dated August 11, 2022 (Incorporated by reference to Exhibit 10.1 to Form 8-K filed August 11, 2022) 10.4 2 Amendment No. 1 to Term Loan Agreement, dated February 16, 2023, by and among V.F. Corporation, as borrower, JP Morgan Chase Bank, N.A., as Administrative Agent, the Lenders party thereto and the other parties thereto (Incorporated by reference to Exhibit 10.2 to Form 8-K filed February 16, 2023) 10.4 3 Separation and Distribution Agreement dated May 22, 2019 (Incorporated by reference to Exhibit 2.1 to Form 8-K filed May 23, 2019) 10.4 4 Tax Matters Agreement dated May 22, 2019 (Incorporated by reference to Exhibit 10.1 to Form 8-K filed May 23, 2019) 10.4 5 Transition Services Agreement dated May 22, 2019 (Incorporated by reference to Exhibit 10.2 to Form 8-K filed May 23, 2019) 10.4 6 VF Intellectual Property License Agreement dated May 17, 2019 (Incorporated by reference to Exhibit 10.3 to Form 8-K filed May 23, 2019) 10.4 7 Kontoor Intellectual Property License Agreement dated May 17, 2019 (Incorporated by reference to Exhibit 10.4 to Form 8-K filed May 23, 2019) 10.4 8 Employee Matters Agreement dated May 22, 2019 (Incorporated by reference to Exhibit 10.5 to Form 8-K filed May 23, 2019) 19.1 Insider Trading Policy 21.1 Subsidiaries of the Corporation 23.1 Consent of independent registered public accounting firm 24.1 Power of attorney VF Corporation Fiscal 2024 Form 10-K 47 Table of Contents NUMBER DESCRIPTION 31.1 Certification of the principal executive officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of the principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1 Policy for the Recovery of Erroneously Awarded Compensation 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 104. Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document All other exhibits for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. * Management compensation plans ITEM 16. FORM 10-K SUMMARY. None. 48 VF Corporation Fiscal 2024 Form 10-K Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, VF has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. V.F. CORPORATION By: /s/ Bracken Darrell Bracken Darrell President, Chief Executive Officer and Director (Principal Executive Officer) By: /s/ Matthew H. Puckett Matthew H. Puckett Executive Vice President and Chief Financial Officer (Principal Financial Officer) By: /s/ Bryan H. McNeill Bryan H. McNeill Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) May 23, 2024 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of VF and in the capacities and on the dates indicated: Richard T. Carucci* Chair of the Board and Director Caroline T. Brown* Director Alexander K. Cho* Director Juliana L. Chugg* Director Benno Dorer* Director Trevor A. Edwards* Director Mark S. Hoplamazian* Director Laura W. Lang* Director W. Rodney McMullen* Director Clarence Otis, Jr.* Director Carol L. Roberts* Director Matthew J. Shattock* Director *By: /s/ Jennifer S. Sim Jennifer S. Sim, Attorney-in-Fact May 23, 2024 VF Corporation Fiscal 2024 Form 10-K 49 Table of Contents VF CORPORATION Index to Consolidated Financial Statements and Financial Statement Schedule March 2024 PAGE NUMBER Management’s Report on Internal Control Over Financial Reporting F- 2 Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) F- 3 Consolidated Balance Sheets F- 5 Consolidated Statements of O perations F- 6 Consolidated Statements of Comprehensive Income (Loss) F- 7 Consolidated Statements of Cash Flows F- 8 Consolidated Statements of Stockholders’ Equity F- 10 Notes to Consolidated Financial Statements F- 11 Schedule II — Valuation and Qualifying Accounts F- 57 VF Corporation Fiscal 2024 Form 10-K F-1 Table of Contents V.F. Corporation Management’s Report on Internal Control Over Financial Reporting Management of V.F. Corporation (“VF”) is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). VF’s management conducted an assessment of VF's internal control over financial reporting based on the framework described in Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, VF’s management has determined that VF’s internal control over financial reporting was effective as of March 30, 2024. The effectiveness of VF’s internal control over financial reporting as of March 30, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein. F-2 VF Corporation Fiscal 2024 Form 10-K Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of V. F. Corporation Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of V. F. Corporation and its subsidiaries (the “Company”) as of March 30, 2024 and April 1, 2023, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended March 30, 2024, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended March 30, 2024 listed in the index appearing under Item 15(a)2 (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of March 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 30, 2024 and April 1, 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 30, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. VF Corporation Fiscal 2024 Form 10-K F-3 Table of Contents Interim and Annual Goodwill and Indefinite-Lived Intangible Asset Impairment Analyses – Supreme and Timberland Reporting Units and Supreme Indefinite-Lived Trademark Intangible Asset As described in Notes 1, 8, 9, and 24 to the consolidated financial statements, the goodwill and indefinite-lived trademark intangible asset balances were $1,460.4 million and $2,553.5 million as of March 30, 2024, respectively, of which the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset makes up a portion of each of the consolidated balances, while the Timberland reporting unit goodwill was fully impaired as of March 30, 2024. Management evaluates indefinite-lived intangible assets and goodwill for possible impairment as of the beginning of the fourth quarter of each fiscal year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying amount. If management determines that it is more likely than not that the fair value of an asset or reporting unit is less than its carrying value, it is quantitatively evaluated for possible impairment by comparing the estimated fair value with its carrying value. An impairment charge is recorded if the carrying value exceeds its estimated fair value. As disclosed by management, triggering events in the third and fourth quarters of the year ended March 30, 2024 caused management to perform quantitative impairment analyses of the Timberland reporting unit goodwill resulting in goodwill impairment charges of $195.3 million and $211.7 million, respectively, for the year ended March 30, 2024. During the annual goodwill and indefinite-lived intangible asset impairment analysis, management performed a quantitative impairment analysis of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, resulting in no impairment. Management estimates the fair value of the reporting units using both income-based and market-based valuation methods and the fair value of the indefinite-lived trademark intangible asset is based on an income approach using the relief-from-royalty method. The income-based fair value methodology requires management to make assumptions and judgments and is based on management’s estimate of financial projections and future cash flows, which include significant assumptions related to revenue growth and profitability improvement throughout the forecast period, terminal growth rates, tax rates, royalty rates and market-based discount rates. The principal considerations for our determination that performing procedures relating to the interim impairment analyses for the Timberland reporting unit goodwill, and the annual goodwill and indefinite-lived intangible asset impairment analyses for the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the reporting units and the indefinite-lived trademark intangible asset; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth throughout the forecast period and market-based discount rates for the Supreme and Timberland reporting units and Supreme indefinite-lived trademark intangible asset, and royalty rates for the Supreme indefinite-lived trademark intangible asset; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill and indefinite-lived trademark intangible asset impairment analyses, including controls over the valuation of the Supreme and Timberland reporting units and the Supreme indefinite-lived trademark intangible asset. These procedures also included, among others (i) testing management’s process for developing the fair value estimates of the Timberland and Supreme reporting units, and the Supreme indefinite-lived trademark intangible asset; (ii) evaluating the appropriateness of the income-based valuation methods for the reporting units and the indefinite-lived trademark intangible asset; (iii) testing the completeness and accuracy of underlying data used in the income-based valuation methods; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth throughout the forecast period and market-based discount rates for the Supreme and Timberland reporting units and the Supreme indefinite-lived trademark intangible asset, and royalty rates for the Supreme indefinite-lived trademark intangible asset. Evaluating management’s assumptions related to the revenue growth throughout the forecast period involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Supreme and Timberland reporting units and products sold with the Supreme trademarks; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of (i) the appropriateness of the Company’s income-based valuation methods for the reporting units and the indefinite-lived trademark intangible asset and (ii) the reasonableness of the royalty rate and market-based discount rate significant assumptions. /s/ PricewaterhouseCoopers LLP Greensboro, North Carolina May 23, 2024 We have served as the Company’s auditor since 1995. F-4 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Consolidated Balance Sheets (In thousands, except share amounts) March 2024 March 2023 ASSETS Current assets Cash and equivalents $ 674,605 $ 814,887 Accounts receivable, less allowance for doubtful accounts of: March 2024 - $ 26,369 ; March 2023 - $ 28,075 1,273,965 1,610,295 Inventories 1,766,366 2,292,790 Other current assets 512,011 434,737 Total current assets 4,226,947 5,152,709 Property, plant and equipment, net 823,886 942,440 Intangible assets, net 2,628,482 2,642,821 Goodwill 1,460,414 1,978,413 Operating lease right-of-use assets 1,330,361 1,372,182 Other assets 1,142,873 1,901,923 TOTAL ASSETS $ 11,612,963 $ 13,990,488 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Short-term borrowings $ 263,938 $ 11,491 Current portion of long-term debt 1,000,721 924,305 Accounts payable 817,128 936,319 Accrued liabilities 1,375,192 1,673,651 Total current liabilities 3,456,979 3,545,766 Long-term debt 4,702,284 5,711,014 Operating lease liabilities 1,156,858 1,171,941 Other liabilities 638,477 651,054 Total liabilities 9,954,598 11,079,775 Commitments and contingencies Stockholders' equity Preferred Stock, par value $ 1 ; shares authorized, 25,000,000 ; no shares outstanding at March 2024 or March 2023 — — Common Stock, stated value $ 0.25 ; shares authorized, 1,200,000,000 ; shares outstanding at March 2024 - 388,836,219 ; March 2023 - 388,665,531 97,209 97,166 Additional paid-in capital 3,600,071 3,775,979 Accumulated other comprehensive loss ( 1,064,331 ) ( 1,019,518 ) Retained earnings (accumulated deficit) ( 974,584 ) 57,086 Total stockholders’ equity 1,658,365 2,910,713 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,612,963 $ 13,990,488 See notes to consolidated financial statements. VF Corporation Fiscal 2024 Form 10-K F-5 Table of Contents VF CORPORATION Consolidated Statements of Operations Year Ended March (In thousands, except per share amounts) 2024 2023 2022 Net revenues $ 10,454,667 $ 11,612,475 $ 11,841,840 Costs and operating expenses Cost of goods sold 5,017,445 5,515,796 5,386,393 Selling, general and administrative expenses 4,963,718 5,033,977 4,823,243 Impairment of goodwill and intangible assets 507,566 735,009 — Total costs and operating expenses 10,488,729 11,284,782 10,209,636 Operating income (loss) ( 34,062 ) 327,693 1,632,204 Interest income 21,628 9,758 5,006 Interest expense ( 245,036 ) ( 174,390 ) ( 136,469 ) Loss on debt extinguishment — — ( 3,645 ) Other income (expense), net 23,785 ( 119,774 ) 26,154 Income (loss) from continuing operations before income taxes ( 233,685 ) 43,287 1,523,250 Income tax expense (benefit) 735,197 ( 75,297 ) 306,981 Income (loss) from continuing operations ( 968,882 ) 118,584 1,216,269 Income from discontinued operations, net of tax — — 170,672 Net income (loss) $ ( 968,882 ) $ 118,584 $ 1,386,941 Earnings (loss) per common share - basic Continuing operations $ ( 2.49 ) $ 0.31 $ 3.12 Discontinued operations — — 0.44 Total earnings (loss) per common share - basic $ ( 2.49 ) $ 0.31 $ 3.55 Earnings (loss) per common share - diluted Continuing operations $ ( 2.49 ) $ 0.31 $ 3.10 Discontinued operations — — 0.43 Total earnings (loss) per common share - diluted $ ( 2.49 ) $ 0.31 $ 3.53 Weighted average shares outstanding Basic 388,360 387,763 390,291 Diluted 388,360 388,370 392,411 See notes to consolidated financial statements. F-6 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Consolidated Statements of Comprehensive Income (Loss) Year Ended March (In thousands) 2024 2023 2022 Net income (loss) $ ( 968,882 ) $ 118,584 $ 1,386,941 Other comprehensive income (loss) Foreign currency translation and other Losses arising during the period ( 1,491 ) ( 106,527 ) ( 17,355 ) Income tax effect ( 7,297 ) ( 1,492 ) ( 34,104 ) Defined benefit pension plans Current period actuarial gains (losses), including plan amendments ( 38,230 ) ( 25,211 ) 12,927 Amortization of net deferred actuarial losses 16,195 16,395 11,310 Amortization of deferred prior service credits ( 80 ) ( 453 ) ( 440 ) Reclassification of net actuarial loss from settlement charges 3,538 93,731 7,466 Income tax effect 3,936 ( 21,864 ) ( 3,806 ) Derivative financial instruments Gains (losses) arising during the period ( 7,933 ) 53,533 71,494 Income tax effect 1,490 ( 8,554 ) ( 11,741 ) Reclassification of net (gains) losses realized ( 18,121 ) ( 110,160 ) 54,326 Income tax effect 3,180 17,663 ( 7,656 ) Other comprehensive income (loss) ( 44,813 ) ( 92,939 ) 82,421 Comprehensive income (loss) $ ( 1,013,695 ) $ 25,645 $ 1,469,362 See notes to consolidated financial statements. VF Corporation Fiscal 2024 Form 10-K F-7 Table of Contents VF CORPORATION Consolidated Statements of Cash Flows Year Ended March (In thousands) 2024 2023 2022 OPERATING ACTIVITIES Net income (loss) $ ( 968,882 ) $ 118,584 $ 1,386,941 Income from discontinued operations, net of tax — — 170,672 Income (loss) from continuing operations, net of tax ( 968,882 ) 118,584 1,216,269 Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: Impairment of goodwill and intangible assets 507,566 735,009 — Depreciation, amortization and other asset write-downs 319,204 262,324 266,935 Reduction in the carrying amount of right-of-use assets 394,426 383,199 410,132 Stock-based compensation 67,332 60,354 91,358 Provision for doubtful accounts 11,170 3,532 ( 716 ) Pension expense in excess of (less than) contributions ( 18,080 ) 79,197 ( 41,309 ) Deferred income taxes ( 395,100 ) ( 53,554 ) ( 157,489 ) Write-off of income tax receivables and interest 921,409 — — Loss on extinguishment of debt — — 3,645 Other, net 7,359 ( 11,433 ) ( 12,007 ) Changes in operating assets and liabilities: Accounts receivable 324,629 ( 147,331 ) ( 202,526 ) Inventories 508,584 ( 890,173 ) ( 380,851 ) Accounts payable ( 106,048 ) 377,433 105,357 Income taxes ( 154,606 ) ( 1,148,610 ) 201,391 Accrued liabilities 32,952 ( 91,650 ) 88,213 Operating lease right-of-use assets and liabilities ( 390,227 ) ( 379,963 ) ( 444,125 ) Other assets and liabilities ( 47,107 ) 47,287 ( 286,079 ) Cash provided (used) by operating activities - continuing operations 1,014,581 ( 655,795 ) 858,198 Cash provided by operating activities - discontinued operations — — 6,090 Cash provided (used) by operating activities 1,014,581 ( 655,795 ) 864,288 INVESTING ACTIVITIES Business acquisitions, net of cash received — — 3,760 Proceeds from sale of businesses, net of cash sold — — 616,928 Proceeds from sale of assets 26,615 99,499 32,542 Proceeds from sale of short-term investments — — 598,806 Capital expenditures ( 145,818 ) ( 165,925 ) ( 245,449 ) Software purchases ( 65,167 ) ( 95,326 ) ( 82,871 ) Other, net 12,112 ( 26,301 ) ( 19,456 ) Cash provided (used) by investing activities - continuing operations ( 172,258 ) ( 188,053 ) 904,260 Cash used by investing activities - discontinued operations — — ( 525 ) Cash provided (used) by investing activities ( 172,258 ) ( 188,053 ) 903,735 FINANCING ACTIVITIES Contingent consideration payment — ( 56,976 ) — Net increase (decrease) in short-term borrowings 255,146 ( 323,972 ) 324,404 Payments on long-term debt ( 908,199 ) ( 501,051 ) ( 504,200 ) Payment of debt issuance costs ( 576 ) ( 6,796 ) ( 2,496 ) Proceeds from long-term debt — 2,058,341 — Share repurchases — — ( 350,004 ) Cash dividends paid ( 303,140 ) ( 702,846 ) ( 773,205 ) Proceeds from issuance of Common Stock, net of (payments) for tax withholdings ( 2,846 ) ( 2,794 ) 36,654 Cash provided (used) by financing activities $ ( 959,615 ) $ 463,906 $ ( 1,268,847 ) Continued on next page. See notes to consolidated financial statements. F-8 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Consolidated Statements of Cash Flows Year Ended March (In thousands) 2024 2023 2022 Effect of foreign currency rate changes on cash, cash equivalents and restricted cash $ ( 22,069 ) $ ( 80,822 ) $ ( 73,299 ) Net change in cash, cash equivalents and restricted cash ( 139,361 ) ( 460,764 ) 425,877 Cash, cash equivalents and restricted cash — beginning of period 816,318 1,277,082 851,205 Cash, cash equivalents and restricted cash — end of period $ 676,957 $ 816,318 $ 1,277,082 Balances per Consolidated Balance Sheets: Cash and cash equivalents $ 674,605 $ 814,887 $ 1,275,943 Other current assets 2,221 1,305 1,109 Other assets 131 126 30 Total cash, cash equivalents and restricted cash $ 676,957 $ 816,318 $ 1,277,082 See notes to consolidated financial statements. VF Corporation Fiscal 2024 Form 10-K F-9 Table of Contents VF CORPORATION Consolidated Statements of Stockholders' Equity Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings (Accumulated Deficit) Total (In thousands, except share amounts) Shares Amounts Balance, March 2021 391,941,477 $ 97,985 $ 3,777,645 $ ( 1,009,000 ) $ 189,534 $ 3,056,164 Net income (loss) — — — — 1,386,941 1,386,941 Dividends on Common Stock ($ 1.98 per share) — — ( 2,597 ) — ( 770,608 ) ( 773,205 ) Share repurchases ( 4,805,093 ) ( 1,201 ) — — ( 348,803 ) ( 350,004 ) Stock-based compensation, net 1,161,991 291 141,336 — ( 13,589 ) 128,038 Foreign currency translation and other — — — ( 51,459 ) — ( 51,459 ) Defined benefit pension plans — — — 27,457 — 27,457 Derivative financial instruments — — — 106,423 — 106,423 Balance, March 2022 388,298,375 97,075 3,916,384 ( 926,579 ) 443,475 3,530,355 Net income (loss) — — — — 118,584 118,584 Dividends on Common Stock ($ 1.81 per share) — — ( 203,394 ) — ( 499,452 ) ( 702,846 ) Stock-based compensation, net 367,156 91 62,989 — ( 5,521 ) 57,559 Foreign currency translation and other — — — ( 108,019 ) — ( 108,019 ) Defined benefit pension plans — — — 62,598 — 62,598 Derivative financial instruments — — — ( 47,518 ) — ( 47,518 ) Balance, March 2023 388,665,531 97,166 3,775,979 ( 1,019,518 ) 57,086 2,910,713 Net income (loss) — — — — ( 968,882 ) ( 968,882 ) Dividends on Common Stock ($ 0.78 per share) — — ( 246,054 ) — ( 57,086 ) ( 303,140 ) Stock-based compensation, net 170,688 43 70,146 — ( 5,702 ) 64,487 Foreign currency translation and other — — — ( 8,788 ) — ( 8,788 ) Defined benefit pension plans — — — ( 14,641 ) — ( 14,641 ) Derivative financial instruments — — — ( 21,384 ) — ( 21,384 ) Balance, March 2024 388,836,219 $ 97,209 $ 3,600,071 $ ( 1,064,331 ) $ ( 974,584 ) $ 1,658,365 See notes to consolidated financial statements. F-10 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS PAGE NUMBER NOTE 1 Summary of Significant Accounting Policies F- 12 NOTE 2 Revenues F- 18 NOTE 3 Discontinued Operations F- 19 NOTE 4 Accounts Receivable F- 20 NOTE 5 Inventories F- 20 N OTE 6 Other Current Assets F- 21 NOTE 7 Property, Plant and Equipment F- 21 NOTE 8 Intangible Assets F- 21 NOTE 9 Goodwill F- 22 NOTE 10 Leases F- 23 NOTE 1 1 Other Assets F- 24 NOTE 1 2 Supply Chain Financing Program F- 25 NOTE 1 3 Short-term Borrowings F- 25 NOTE 1 4 Accrued Liabilities F- 26 NOTE 1 5 Long-term Debt F- 26 NOTE 1 6 Other Liabilities F- 28 NOTE 1 7 Retirement and Savings Benefit Plans F- 29 NOTE 1 8 Capital and Accumulated Other Comprehensive Loss F- 33 NOTE 1 9 Stock-based Compensation F- 35 NOTE 20 Income Taxes F- 38 NOTE 2 1 Reportable Segment Information F- 42 NOTE 2 2 Commitments F- 45 NOTE 2 3 Earning s ( Loss) Per Share F- 45 NOTE 2 4 Fair Value Measurements F- 45 NOTE 2 5 Derivative Financial Instruments and Hedging Activities F- 53 NOTE 2 6 Supplemental Cash Flow Information F- 55 NOTE 2 7 Restructuring F- 55 NOTE 2 8 Subsequent Event F- 56 VF Corporation Fiscal 2024 Form 10-K F-11 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business VF Corporation (together with its subsidiaries, collectively known as “VF” or the "Company”) is a global apparel, footwear and accessories company based in the United States. VF designs, procures, markets and distributes a variety of branded products, including outerwear, footwear, apparel, backpacks, luggage and accessories for consumers of all ages. Products are marketed under VF-owned brand names. Basis of Presentation The consolidated financial statements and related disclosures are presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The consolidated financial statements include the accounts of VF and its controlled subsidiaries, after elimination of intercompany transactions and balances. On June 28, 2021, VF completed the sale of its Occupational Workwear business. The Occupational Workwear business was comprised primarily of the following brands and businesses: Red Kap ® , VF Solutions ® , Bulwark ® , Workrite ® , Walls ® , Terra ® , Kodiak ® , Work Authority ® and Horace Small ® . The business also included the license of certain Dickies ® occupational workwear products that have historically been sold through the business-to-business channel. 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. These changes have been applied to all periods presented. Unless otherwise noted, discussion within these notes to the consolidated financial statements relates to continuing operations. Refer to Note 3 for additional information on discontinued operations. Fiscal Year VF operates and reports using a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. VF's current fiscal year ran from April 2, 2023 through March 30, 2024 ("Fiscal 2024"). All references to the periods ended March 2024, March 2023 and March 2022 relate to the 52-week fiscal years ended March 30, 2024, April 1, 2023 ("Fiscal 2023") and April 2, 2022 ("Fiscal 2022"), respectively. Certain foreign subsidiaries reported using a March 31 year-end for Fiscal 2024, 2023 and 2022 due to local statutory requirements. The impact to VF's consolidated financial statements is not material. Recent Development Reinvent On October 30, 2023, VF introduced Reinvent, a transformation program to enhance focus on brand-building and to improve operating performance and allow VF to achieve its full potential. The first announced steps in this transformation cover the following priorities: improve North America results, deliver the Vans ® turnaround, reduce costs and strengthen the balance sheet. Refer to Note 27 for additional information on the program. Use of Estimates In preparing the consolidated financial statements in accordance with GAAP, management makes estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Foreign Currency Translation and Transaction The financial statements of most foreign subsidiaries are measured using the foreign currency as the functional currency. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates during the period. Resulting translation gains and losses, and transaction gains and losses on long-term advances to foreign subsidiaries, are reported in the Consolidated Statements of Comprehensive Income (Loss). Foreign currency transactions are denominated in a currency other than the functional currency of a particular entity. These transactions generally result in receivables or payables that are fixed in the foreign currency. Transaction gains or losses arise when exchange rate fluctuations either increase or decrease the functional currency cash flows from the originally recorded transaction. Foreign currency transaction gains and losses reported in the Consolidated Statements of Operations, were a net loss of $ 16.6 million, $ 16.9 million and $ 6.7 million in the years ended March 2024, 2023 and 2022, respectively. Business Combinations VF accounts for business combinations using the acquisition method of accounting. Under the acquisition method, the consolidated financial statements reflect the operations of an acquired business starting from the closing date of the acquisition. All assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. VF allocates the purchase price of an acquired business to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, with any excess purchase price recorded as goodwill. Contingent consideration, if any, is included within the purchase price and is recognized at its fair value on the acquisition date. In subsequent reporting periods, any contingent consideration liabilities are remeasured at fair value with changes recognized in operating income (loss) . During the measurement period, which is up to one year from the acquisition date, adjustments to the assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill. Cash and Equivalents Cash and equivalents are demand deposits, receivables from third-party credit card processors and highly liquid investments that mature within three months of their purchase dates. Highly liquid investments considered cash equivalents were $ 226.8 million and $ 439.5 million at March 2024 and 2023, respectively, consisting of money market funds and short-term time deposits. F-12 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Accounts Receivable Trade accounts receivable are recorded at invoiced amounts, less contractual allowances for trade terms, sales incentive programs and discounts. Royalty receivables are recorded at amounts earned based on the licensees' sales of licensed products, subject in some cases to contractual minimum royalties due from individual licensees. VF maintains an allowance for doubtful accounts for estimated losses that will result from the inability of customers and licensees to make required payments. The allowance is determined based on review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables, which are grouped based on similar risk characteristics, considering historical trends, adjusted for current economic conditions and reasonable and supportable forecasts when appropriate. The allowance represents the current estimate of lifetime expected credit losses for all outstanding accounts receivable and reflects the Company's ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses and future expectations. Receivables are written off against the allowance when it is determined that the amounts will not be recovered. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method, includes all costs incurred to purchase the finished goods and is net of discounts or rebates received from vendors. A detailed review of all inventories is performed, at least quarterly, to identify slow moving or excess products, discontinued and to-be-discontinued products, off-quality merchandise and other specific or unique situations. Management performs an evaluation to estimate net realizable value using a systematic and consistent methodology of forecasting future demand, market conditions and selling prices less costs of disposal. If the estimated net realizable value is less than cost, VF provides an allowance to reflect the lower value of that inventory. This methodology recognizes inventory exposures at the time such losses are evident rather than at the time goods are actually sold. Historically, these estimates of future demand and selling prices have not varied significantly from actual results due to VF’s timely identification and ability to typically dispose of these distressed inventories at amounts either above or not significantly below cost. Existence of physical inventory is verified through periodic physical inventory counts and ongoing cycle counts at most locations throughout the year, and an estimate of inventory losses that have likely occurred since the last physical inventory date is recorded. Historically, physical inventory shrinkage has not been material. Long-lived Assets, Including Intangible Assets and Goodwill Property, plant and equipment, intangible assets and goodwill are initially recorded at cost. VF capitalizes improvements to property, plant and equipment that substantially extend the useful life of the asset, and interest cost incurred during construction of major assets. Repair and maintenance costs are expensed as incurred. Cost for acquired intangible assets represents the fair value at acquisition date, which is generally based on the present value of expected cash flows. Trademark intangible assets represent individual acquired trademarks, some of which are registered in multiple countries. Customer relationship intangible assets are based on the value of relationships with wholesale customers in place at the time of acquisition. Goodwill represents the excess of cost of an acquired business over the fair value of net tangible assets and identifiable intangible assets acquired. Goodwill is assigned at the reporting unit level. Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets, ranging from 3 to 10 years for machinery and equipment and up to 40 years for buildings. Amortization expense for leasehold improvements and assets under finance leases is recognized over the shorter of their estimated useful lives or the lease terms, and is included in depreciation expense. Depreciation is ceased on assets that meet the held-for-sale criteria and they are measured at the lower of their carrying value or fair value, less costs of disposal. Intangible assets determined to have indefinite lives, consisting of major trademarks and trade names, are not amortized. Other intangible assets determined to have a finite life primarily consist of customer relationships, which are amortized over their estimated useful lives ranging from 11 to 24 years using an accelerated method consistent with the timing of benefits expected to be received. Depreciation and amortization expense related to obtaining finished goods inventories is included in cost of goods sold, and other depreciation and amortization expense is included in selling, general and administrative expenses. VF’s policy is to review property, plant and equipment and amortizable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If forecasted pre-tax undiscounted cash flows to be generated by the asset are not expected to recover the asset’s carrying value, an impairment charge is recorded for the excess of the asset’s carrying value over its estimated fair value. VF’s policy is to evaluate indefinite-lived intangible assets and goodwill for possible impairment as of the beginning of the fourth quarter of each fiscal year, or whenever events or changes in circumstances indicate that the fair value of such assets may be below their carrying amount. VF may first assess qualitative factors as a basis for determining whether it is necessary to perform quantitative impairment testing. If VF determines that it is more likely than not that the fair value of an asset or reporting unit is more than its carrying value, then no further testing is required. Otherwise, the assets must be quantitatively tested for impairment. An indefinite-lived intangible asset is quantitatively evaluated for possible impairment by comparing the estimated fair value of the asset with its carrying value. An impairment charge is recorded if the carrying value of the asset exceeds its estimated fair value. Goodwill is quantitatively evaluated for possible impairment by comparing the estimated fair value of a reporting unit with its carrying value, including the goodwill assigned to that reporting VF Corporation Fiscal 2024 Form 10-K F-13 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 unit. An impairment charge is recorded if the carrying value of the reporting unit exceeds its estimated fair value. Leases VF determines if an arrangement is or contains a lease at contract inception and determines its classification as an operating or finance lease at lease commencement. The Company leases certain retail locations, office space, distribution facilities, machinery and equipment, and vehicles. While the substantial majority of these leases are operating leases, one of VF's distribution centers is a finance lease. Leases for real estate typically have initial terms ranging from 2 to 15 years, generally with renewal options. Leases for equipment typically have initial terms ranging from 2 to 5 years and vehicle leases typically have initial terms ranging from 1 to 6 years. In determining the lease term used in the lease right-of-use asset and lease liability calculations, the Company considers various factors such as market conditions and the terms of any renewal or termination options that may exist. When deemed reasonably certain, the renewal and termination options are included in the determination of the lease term and calculation of the lease right-of-use assets and lease liabilities. The Company has made an accounting policy election to not recognize right-of-use assets and lease liabilities for leases with terms of 12 months or less. Most leases have fixed rental payments. Many of the real estate leases also require additional variable payments for occupancy-related costs, real estate taxes and insurance, as well as other payments (i.e., contingent rent) owed when sales at individual retail store locations exceed a stated base amount. Variable lease payments are excluded from the measurement of the lease liability and are recognized in profit and loss in the period in which the event or conditions that triggers those payments occur. Certain leases contain both lease and non-lease components. For leases associated with specific asset classes, including certain real estate, vehicles and IT equipment, VF has elected the practical expedient which permits entities to account for separate lease and non-lease components as a single component. For all other lease contracts, the Company accounts for each lease component separately from the non-lease components of the contract. When applicable, VF will measure the consideration to be paid pursuant to the agreement and allocate this consideration to the lease and non-lease components based on relative standalone prices. VF estimates the amount it expects to pay to the lessor under a residual value guarantee and includes it in lease payments used to measure the lease liability only for amounts probable of being owed by VF at the commencement date. VF calculates lease liabilities as the present value of lease payments over the lease term at commencement date. Lease right-of-use assets are calculated based on the initial measurement of the respective lease liabilities adjusted for any lease payments made to the lessor at or before the commencement date, lease incentives received and initial direct costs incurred. When readily determinable, the Company uses the implicit rate to determine the present value of lease payments, which generally does not happen in practice. As the rate implicit in the majority of the Company's leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, including the lease term, currency, country specific risk premium and adjustments for collateralized debt. Operating lease expense is recorded as a single lease cost on a straight-line basis over the lease term. For finance leases, right-of-use asset amortization and interest on lease liabilities are presented separately in the Consolidated Statements of Operations. The Company does not have material subleases. The Company assesses whether a sale leaseback transaction qualifies as a sale when the transaction occurs. For transactions qualifying as a sale, VF derecognizes the underlying asset and recognizes the entire gain or loss at the time of the sale. The corresponding lease entered into with the buyer-lessor is accounted for as an operating lease. During the year ended March 2023, the Company entered into a sale leaseback transaction for certain office real estate and related assets. The transaction qualified as a sale, and thus the Company recognized a gain of $ 13.2 million in the selling, general and administrative expenses line item in VF's Consolidated Statement of Operations for the year ended March 2023. Defined Benefit Pension Plans VF sponsors various defined benefit pension plans in the U.S. and in certain international jurisdictions. The Company's U.S. plans, including a noncontributory qualified defined benefit pension plan and an unfunded supplemental defined benefit pension plan, were frozen for all future benefit accruals, effective December 31, 2018. The funded status of defined benefit pension plans is recorded as a net asset or liability in the Consolidated Balance Sheets based on the difference between the projected benefit obligations and the fair value of plan assets, which is assessed on a plan-by-plan basis. The changes in funded status of defined benefit pension plans, primarily related to actuarial gains and losses arising from differences between actual experience and actuarial assumptions, are recognized in the year in which the changes occur and reported in the Consolidated Statements of Comprehensive Income (Loss). VF reports the service component of net periodic pension cost (income) within operating income (loss) and the other components of net periodic pension cost, which include interest cost, expected return on plan assets, settlement charges, curtailments and amortization of deferred actuarial losses and prior service credits, in the other income (expense), net line item of the Consolidated Statements of Operations. Derivative Financial Instruments Derivative financial instruments are measured at fair value in the Consolidated Balance Sheets. Unrealized gains and losses are recognized as assets and liabilities, respectively, and classified as current or noncurrent based on the derivatives’ maturity dates. The accounting for changes in the fair value of derivative instruments (i.e., gains and losses) depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply F-14 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. To qualify for hedge accounting treatment, all hedging relationships must be formally documented at the inception of the hedges and must be highly effective in offsetting changes to future cash flows of hedged transactions. VF’s hedging practices are described in Note 25, which primarily relate to cash flow hedges. VF does not use derivative instruments for trading or speculative purposes. Hedging cash flows are classified in the Consolidated Statements of Cash Flows in the same category as the items being hedged. VF formally documents hedging instruments and hedging relationships at the inception of each contract. Further, at the inception of a contract and on an ongoing basis, as necessary, VF assesses whether the hedging instruments are highly effective in offsetting the risk of the hedged transactions. When hedging instruments are determined to not be highly effective, hedge accounting treatment is discontinued, and any future changes in fair value of the instruments are recognized immediately in net income (loss). Unrealized gains or losses related to hedging instruments remain in accumulated other comprehensive loss ("OCL") until the hedged forecasted transaction occurs and impacts earnings. If the hedged forecasted transaction is deemed probable of not occurring, any unrealized gains or losses in accumulated OCL are immediately recognized in net income (loss). VF also uses derivative contracts to manage foreign currency exchange risk on certain assets and liabilities. These contracts are not designated as hedges, and are measured at fair value in the Consolidated Balance Sheets with changes in fair value recognized directly in net income (loss). The counterparties to the derivative contracts are financial institutions having at least A-rated investment grade credit ratings. To manage its credit risk, VF continually monitors the credit risks of its counterparties, limits its exposure in the aggregate and to any single counterparty, and adjusts its hedging positions as appropriate. The impact of VF’s credit risk and the credit risk of its counterparties, as well as the ability of each party to fulfill its obligations under the contracts, is considered in determining the fair value of the derivative contracts. Credit risk has not had a significant effect on the fair value of VF’s derivative contracts. VF does not have any credit risk-related contingent features or collateral requirements with its derivative contracts. Revenue Recognition Revenue is recognized when performance obligations under the terms of a contract with the customer are satisfied based on the transfer of control of promised goods or services. The transfer of control typically occurs at a point in time based on consideration of when the customer has (i) an obligation to pay for, (ii) physical possession of, (iii) legal title to, (iv) risks and rewards of ownership of, and (v) accepted the goods or services. The timing of revenue recognition within the wholesale channel occurs either on shipment or delivery of goods based on contractual terms with the customer. The timing of revenue recognition in the direct-to-consumer channel generally occurs at the point of sale within VF-operated or concession retail stores and either on shipment or delivery of goods for e-commerce transactions based on contractual terms with the customer. For finished products shipped directly to customers from our suppliers, the Company's promise to the customer is a performance obligation to provide the specified goods, and thus the Company is the principal in the arrangement and revenue is recognized on a gross basis at the transaction price. The duration of contractual arrangements with our customers in the wholesale and direct-to-consumer channels is typically less than one year . Payment terms with wholesale customers are generally between 30 and 60 days while direct-to-consumer arrangements have shorter terms. The Company does not adjust the promised amount of consideration for the effects of a significant financing component as it is expected, at contract inception, that the period between the transfer of the promised good or service to the customer and the customer payment for the good or service will be one year or less. The amount of revenue recognized in both wholesale and direct-to-consumer channels reflects the expected consideration to be received for providing the goods or services to the customer, which includes estimates for variable consideration. Variable consideration includes sales incentive programs, discounts, markdowns, chargebacks and product returns. Estimates of variable consideration are determined at contract inception and reassessed at each reporting date, at a minimum, to reflect any changes in facts and circumstances. The Company utilizes the expected value method in determining its estimates of variable consideration, based on evaluations of specific product and customer circumstances, historical and anticipated trends, and current economic conditions. Allowances for estimates of sales incentive programs, discounts, markdowns, chargebacks and returns are recorded as accrued liabilities in the Consolidated Balance Sheets. Certain products sold by the Company include an assurance warranty. Product warranty costs are estimated based on historical and anticipated trends, and are recorded as cost of goods sold at the time revenue is recognized. Revenue from the sale of gift cards is deferred and recorded as a contract liability until the gift card is redeemed by the customer, factoring in breakage as appropriate. Various VF brands maintain customer loyalty programs where customers earn rewards from qualifying purchases or activities, which are redeemable for discounts on future purchases or other rewards. For its customer loyalty programs, the Company estimates the standalone selling price of the loyalty rewards and allocates a portion of the consideration for the sale of products to the loyalty points earned. The deferred amount is recorded as a contract liability, and is recognized as revenue when the points are redeemed or when the likelihood of redemption is remote. The Company has elected to treat all shipping and handling activities as fulfillment costs and recognize the costs as selling, general and administrative expenses at the time the related revenue is recognized. Shipping and handling costs billed to customers are included in net revenues. Sales taxes and value added taxes collected from customers and remitted directly to governmental authorities are excluded from the transaction price. The Company has licensing agreements for its symbolic intellectual property, some of which include minimum VF Corporation Fiscal 2024 Form 10-K F-15 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 guaranteed royalties. Royalty income is recognized as earned over the respective license term based on the greater of minimum guarantees or the licensees' sales of licensed products at rates specified in the licensing contracts. Royalty income related to the minimum guarantees is recognized using a measure of progress with variable amounts recognized only when the cumulative earned royalty exceeds the minimum guarantees. The Company has applied the practical expedient to recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. The Company has also elected the practical expedients to not disclose the transaction price allocated to remaining performance obligations for (i) variable consideration related to sales-based royalty arrangements, and (ii) contracts with an original expected duration of one year or less. Cost of Goods Sold Cost of goods sold for purchased finished goods includes the purchase costs and related overhead. Overhead includes all costs related to purchasing finished goods, including costs of planning, purchasing, quality control, depreciation, freight, duties, royalties paid to third parties and shrinkage. Cost of goods sold also includes provisions to state inventories at the lower of cost or net realizable value. For product lines with a warranty, a provision for estimated future repair or replacement costs, based on historical and anticipated trends, is recorded when these products are sold. Selling, General and Administrative Expenses Selling, general and administrative expenses include costs of product development, selling, marketing and advertising, VF-operated retail stores, concession retail stores, warehousing, distribution, shipping and handling, licensing and administration. Advertising costs are expensed as incurred and totaled $ 835.8 million, $ 861.8 million and $ 840.6 million in the years ended March 2024, 2023 and 2022, respectively. Advertising costs include cooperative advertising payments made to VF’s customers as reimbursement for certain costs of advertising VF’s products, which totaled $ 12.7 million, $ 16.5 million and $ 16.2 million in the years ended March 2024, 2023 and 2022, respectively. Shipping and handling costs for delivery of products to customers totaled $ 549.2 million, $ 637.0 million and $ 634.2 million in the years ended March 2024, 2023 and 2022, respectively. Expenses related to royalty income were $ 0.8 million, $ 0.9 million and $ 0.9 million in the years ended March 2024, 2023 and 2022, respectively. Stock-based Compensation VF accounts for all stock-based payments to employees and non-employee directors based on their respective grant date fair values. Compensation cost for all awards expected to vest is recognized over the shorter of the requisite service period or the vesting period, including accelerated recognition for retirement-eligible employees. Awards that do not vest are forfeited. Generally, dividend equivalents accrue without compounding and are payable in additional shares of VF common stock upon vesting. VF uses a lattice option-pricing model to estimate the fair value of stock options granted to employees and non-employee directors. VF's performance-based awards are based on management achieving both performance and market-based financial targets. The grant date fair value of market conditions is determined using a Monte Carlo simulation technique incorporating option-pricing model inputs. Dividends Dividends declared on common stock are recorded as a reduction of retained earnings to the extent retained earnings are available at the close of the period prior to the date of the declared dividend. Dividends declared in excess of retained earnings are recorded as a reduction of additional paid-in-capital. Self-insurance VF is self-insured for a significant portion of its employee medical, workers’ compensation, vehicle, property and general liability exposures. Liabilities for self-insured exposures are accrued at the present value of amounts expected to be paid based on historical claims experience and actuarial data for forecasted settlements of claims filed and for incurred but not yet reported claims. Accruals for self-insured exposures are included in current and noncurrent liabilities based on the expected periods of payment. Excess liability insurance has been purchased to limit the amount of self-insured risk on claims. Income Taxes Income taxes are provided on pre-tax income (loss) for financial reporting purposes. Income taxes are based on amounts of taxes payable or refundable in the current year and on expected future tax consequences of events that are recognized in the consolidated financial statements in different periods than they are recognized in tax returns. As a result of timing of recognition and measurement differences between financial accounting standards and income tax laws, temporary differences arise between amounts of pre-tax financial statement income (loss) and taxable income (loss), and between reported amounts of assets and liabilities in the Consolidated Balance Sheets and their respective tax bases. Deferred income tax assets and liabilities reported in the Consolidated Balance Sheets reflect the estimated future tax impact of these temporary differences and net operating loss and net capital loss carryforwards, based on tax rates currently enacted for the years in which the differences are expected to be settled or realized. Realization of deferred tax assets is dependent on future taxable income in specific jurisdictions. Valuation allowances are used to reduce deferred tax assets to amounts considered more-likely-than-not to be realized. All deferred tax assets and liabilities are classified as noncurrent in the Consolidated Balance Sheets. Accrued income taxes in the Consolidated Balance Sheets include unrecognized income tax benefits, along with related interest and penalties, appropriately classified as current or noncurrent. VF has evaluated these potential issues under the more-likely-than-not standard of the accounting literature. A tax position is recognized if it meets this standard and is measured at the largest amount of benefit that has a greater than 50% likelihood of being realized. The provision for income taxes also F-16 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 includes estimated interest and penalties related to uncertain tax positions . Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding during the period. Diluted earnings per share assumes conversion of potentially dilutive securities such as stock options, restricted stock units and restricted stock. In periods of a net loss, all potentially dilutive securities are excluded from diluted loss per share, as their inclusion would be anti-dilutive. Concentration of Risks VF markets products to a broad customer base throughout the world. Products are sold at a range of price points through various wholesale and direct-to-consumer channels. VF’s ten largest customers accounted for approximately 14 % of Fiscal 2024 total revenues. Sales to VF’s largest customer accounted for approximat ely 2 % of Fiscal 2024 total revenues. Sales are generally made on an unsecured basis under customary terms that may vary by product, channel of distribution or geographic region. VF continuously monitors the creditworthiness of its customers and has established internal policies regarding customer credit limits. The breadth of product offerings, combined with the large number and geographic diversity of its customers, limits VF’s concentration of risks. Legal and Other Contingencies Management periodically assesses liabilities and contingencies in connection with legal proceedings and other claims that may arise from time to time. When it is probable that a loss has been or will be incurred and the amount of the loss is reasonably estimable, the estimate of the loss is recorded in the consolidated financial statements. Estimates of losses are adjusted when additional information becomes available or circumstances change. A contingent liability is disclosed when there is at least a reasonable possibility that a material loss may have been incurred. Reclassifications Certain prior year amounts have been reclassified to conform with the Fiscal 2024 presentation. Recently Adopted Accounting Standards In March 2020, January 2021 and December 2022, the Financial Accounting Standards Board (" FASB") issued Accounting Standards Update (" ASU") No. 2020-04, " Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ", ASU No. 2021-01, " Reference Rate Reform (Topic 848): Scope " and ASU No. 2022-06, " Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 ", 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. The guidance is provided to ease the potential burden of accounting for reference rate reform. During the first quarter of Fiscal 2024, the Company amended the terms of its $ 2.25 billion senior unsecured revolving line of credit (the “Global Credit Facility”), which replaced the LIBOR benchmark interest rate with a benchmark interest rate based on the forward-looking secured overnight financing rate ("Term SOFR"). This guidance was adopted in the first quarter of Fiscal 2024, but did not impact VF's consolidated financial statements. In September 2022, the FASB issued ASU No. 2022-04, " Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations " . This guidance requires companies with supplier finance programs to disclose sufficient qualitative and quantitative information about the program to allow a user of the financial statements to understand the nature of, activity in, and potential magnitude of the program. The guidance became effective for VF in the first quarter of Fiscal 2024, except for the rollforward information that will be effective for annual periods beginning in Fiscal 2025 on a prospective basis. Early adoption is permitted. The Company adopted the required guidance in the first quarter of Fiscal 2024 and is evaluating the impact of adopting the guidance related to the rollforward information. Refer to Note 12 for disclosures related to the Company's s upply chain financing program. Recently Issued Accounting Standards In November 2023, the FASB issued ASU No. 2023-07, " Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses that are regularly provided to the individual or group identified as the chief operating decision maker ("CODM"). The guidance also requires disclosure of the title and position of the CODM and how reported measures of segment profit or loss are used to assess performance and allocate resources. The guidance will be effective for annual disclosures beginning in Fiscal 2025, and has expanded requirements to include all disclosures about a reportable segment's profit or loss and assets in subsequent interim periods. Early adoption is permitted. The guidance requires retrospective application to all prior periods presented in the financial statements. The Company is evaluating the impact that adopting this guidance will have on VF's disclosures. In December 2023, the FASB issued ASU No. 2023-09, " Income Taxes (Topic 740): Improvements to Income Tax Disclosures" , which is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The rate reconciliation disclosures will require specific categories and additional information for reconciling items that meet a quantitative threshold. The income taxes paid disclosures will require disaggregation by individual jurisdictions that are greater than 5% of total income taxes paid. The guidance will be effective for annual disclosures beginning in Fiscal 2026. Early adoption is permitted. The amendments are required to be applied on a prospective basis; however, retrospective application is permitted. The Company is evaluating the impact that adopting this guidance will have on VF's disclosures. VF Corporation Fiscal 2024 Form 10-K F-17 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTE 2 — REVENUES Contract Balances Contract assets are rights to consideration in exchange for goods or services that have been transferred to a customer when that right is conditional on something other than the passage of time. Once the Company has an unconditional right to consideration under a contract, amounts are invoiced and contract assets are reclassified to accounts receivable. The Company's primary contract assets relate to sales-based royalty arrangements, which are discussed in more detail within Note 1. Contract liabilities are recorded when a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional, before the transfer of a good or service to the customer and thus represent the Company's obligation to transfer the good or service to the customer at a future date. The Company's primary contract liabilities relate to gift cards, loyalty programs and sales-based royalty arrangements, which are discussed in more detail within Note 1, and order deposits. The following table provides information about contract assets and contract liabilities: (In thousands) March 2024 March 2023 Contract assets (a) $ 2,393 $ 2,294 Contract liabilities (b) 67,115 62,214 (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 year ended March 2024 , the Company recognized $ 253.6 million of revenue, which included the majority of the contract liability balance at the beginning of the year, and amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were satisfied during the year, including 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 March 2024, the Company expects to recognize $ 78.5 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. As of March 2024 , 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. 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. Year Ended March 2024 (In thousands) Outdoor Active Work Other Total Channel revenues Wholesale $ 3,152,260 $ 1,579,251 $ 690,934 $ — $ 5,422,445 Direct-to-consumer 2,330,390 2,458,475 176,284 — 4,965,149 Royalty 18,749 24,003 24,321 — 67,073 Total $ 5,501,399 $ 4,061,729 $ 891,539 $ — $ 10,454,667 Geographic revenues Americas $ 2,498,520 $ 2,255,982 $ 710,366 $ — $ 5,464,868 Europe 2,080,583 1,234,569 113,420 — 3,428,572 Asia-Pacific 922,296 571,178 67,753 — 1,561,227 Total $ 5,501,399 $ 4,061,729 $ 891,539 $ — $ 10,454,667 F-18 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Year Ended March 2023 (In thousands) Outdoor Active Work Other Total Channel revenues Wholesale $ 3,375,343 $ 2,082,875 $ 847,729 $ 148 $ 6,306,095 Direct-to-consumer 2,252,958 2,791,936 186,462 — 5,231,356 Royalty 19,225 29,811 25,988 — 75,024 Total $ 5,647,526 $ 4,904,622 $ 1,060,179 $ 148 $ 11,612,475 Geographic revenues Americas $ 2,921,383 $ 2,912,666 $ 848,524 $ 148 $ 6,682,721 Europe 1,960,485 1,343,796 107,414 — 3,411,695 Asia-Pacific 765,658 648,160 104,241 — 1,518,059 Total $ 5,647,526 $ 4,904,622 $ 1,060,179 $ 148 $ 11,612,475 Year Ended March 2022 (In thousands) Outdoor Active Work Other Total Channel revenues Wholesale $ 3,194,881 $ 2,256,444 $ 919,080 $ 785 $ 6,371,190 Direct-to-consumer 2,115,056 3,102,231 186,788 — 5,404,075 Royalty 17,631 21,663 27,281 — 66,575 Total $ 5,327,568 $ 5,380,338 $ 1,133,149 $ 785 $ 11,841,840 Geographic revenues Americas $ 2,748,935 $ 3,155,870 $ 899,706 $ 785 $ 6,805,296 Europe 1,877,502 1,432,260 89,537 — 3,399,299 Asia-Pacific 701,131 792,208 143,906 — 1,637,245 Total $ 5,327,568 $ 5,380,338 $ 1,133,149 $ 785 $ 11,841,840 NOTE 3 — DISCONTINUED OPERATIONS The Company continuously assesses the composition of its portfolio to ensure it is aligned with its strategic objectives and positioned to maximize growth and return to shareholders. Occupational Workwear Business On January 21, 2020, VF announced its decision to explore the divestiture of its Occupational Workwear business. The Occupational Workwear business was comprised primarily of the following brands and businesses: Red Kap ® , VF Solutions ® , Bulwark ® , Workrite ® , Walls ® , Terra ® , Kodiak ® , Work Authority ® and Horace Small ® . The business also included the license of certain Dickies ® occupational workwear products that have historically been sold through the business-to-business channel. As of March 28, 2020, the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria. 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. On June 28, 2021, VF completed the sale of the Occupational Workwear business. The Company received proceeds of $ 616.9 million, n et of cash sold, resulting in a final after-tax gain on sale of $ 146.0 million, which was included in the income from discontinued operations, n et of tax line item in the Consolidated Statement of Operations for the year ended March 2022. 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 Statement of Operations was income of $ 170.7 million (including a final after-tax gain on sale of $ 146.0 million) for the year ended March 2022. VF Corporation Fiscal 2024 Form 10-K F-19 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 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: Year Ended March (In thousands) 2024 (a) 2023 (a) 2022 Net revenues $ — $ — $ 181,424 Cost of goods sold — — 117,193 Selling, general and administrative expenses — — 38,735 Interest income, net — — 194 Other income (expense), net — — 6 Income from discontinued operations before income taxes — — 25,696 Gain on the sale of discontinued operations before income taxes — — 133,970 Total income from discontinued operations before income taxes — — 159,666 Income tax benefit (b) — — ( 11,006 ) Income from discontinued operations, net of tax $ — $ — $ 170,672 (a) There was no activity during the years ended March 2024 and 2023. (b) Income tax benefit for the year ended March 2022 included $ 12.0 million of deferred tax benefit related to capital and other losses realized upon the sale of the Occupational Workwear business. NOTE 4 — ACCOUNTS RECEIVABLE (In thousands) March 2024 March 2023 Trade $ 1,227,707 $ 1,521,975 Other (including royalty) 72,627 116,395 Total accounts receivable 1,300,334 1,638,370 Less allowance for doubtful accounts 26,369 28,075 Accounts receivable, net $ 1,273,965 $ 1,610,295 NOTE 5 — INVENTORIES (In thousands) March 2024 March 2023 Finished products $ 1,718,676 $ 2,240,215 Work-in-process 39,539 39,508 Raw materials 8,151 13,067 Total inventories $ 1,766,366 $ 2,292,790 F-20 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTE 6 — OTHER CURRENT ASSETS (In thousands) March 2024 March 2023 Prepaid income taxes $ 176,821 $ 114,307 Prepaid expenses 110,943 108,185 Right of return assets 72,105 47,872 Assets held-for-sale 55,082 14,769 Derivative financial instruments (Note 25) 28,701 48,132 Other taxes 28,401 43,712 Investments held for deferred compensation plans (Note 17) 10,771 18,936 Other 29,187 38,824 Other current assets $ 512,011 $ 434,737 NOTE 7 — PROPERTY, PLANT AND EQUIPMENT (In thousands) March 2024 March 2023 Land and improvements $ 65,886 $ 69,401 Buildings and improvements 886,158 896,973 Machinery and equipment 1,006,294 1,051,093 Property, plant and equipment, at cost 1,958,338 2,017,467 Less accumulated depreciation and amortization 1,134,452 1,075,027 Property, plant and equipment, net $ 823,886 $ 942,440 NOTE 8 — INTANGIBLE ASSETS (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount March 2024 Amortizable intangible assets: Customer relationships and other 19 years Accelerated $ 262,084 $ 187,121 $ 74,963 Indefinite-lived intangible assets: Trademarks and trade names 2,553,519 Intangible assets, net $ 2,628,482 (In thousands) Weighted Average Amortization Period Amortization Method Cost Accumulated Amortization Net Carrying Amount March 2023 Amortizable intangible assets: Customer relationships and other 19 years Accelerated $ 262,818 $ 173,916 $ 88,902 Indefinite-lived intangible assets: Trademarks and trade names 2,553,919 Intangible assets, net $ 2,642,821 VF Corporation Fiscal 2024 Form 10-K F-21 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 VF did not record any intangible asset impairment charges in the years ended March 2024 or March 2022. VF recorded impairment charges of $ 340.9 million in the year ended March 2023 related to the Supreme ® indefinite-lived trademark intangible asset. Refer to Note 24 for additional information on fair value measurements. Amortization expense for the years ended March 2024, 2023 and 2022 was $ 13.8 million, $ 14.1 million and $ 15.6 million, respectively. Estimated amortization expense for the next five fiscal y ears is $ 13.2 million, $ 12.3 million, $ 11.8 million, $ 10.8 million and $ 9.8 million, respect ively. NOTE 9 — GOODWILL Changes in goodwill are summarized by reportable segment as follows: (In thousands) Outdoor Active Work Total Balance, March 2022 $ 660,786 $ 1,619,121 $ 113,900 $ 2,393,807 Impairment charges — ( 394,131 ) — ( 394,131 ) Foreign currency translation ( 6,999 ) ( 13,746 ) ( 518 ) ( 21,263 ) Balance, March 2023 653,787 1,211,244 113,382 1,978,413 Impairment charges ( 445,757 ) — ( 61,809 ) ( 507,566 ) Foreign currency translation ( 2,162 ) ( 8,198 ) ( 73 ) ( 10,433 ) Balance, March 2024 $ 205,868 $ 1,203,046 $ 51,500 $ 1,460,414 During the year ended March 2024 , VF recorded impairment charges of $ 507.6 million related to the Timberland, Dickies and Icebreaker reporting units. During the fourth quarter of Fiscal 2024, VF performed an impairment analysis of the Timberland reporting unit as a result of a triggering event and recorded impairment charges of $ 211.7 million. As a result of VF's annual impairment testing of goodwill as of the beginning of the fourth quarter of Fiscal 2024, VF recorded impairment charges of $ 38.8 million related to the Icebreaker reporting unit. During the third quarter of Fiscal 2024, VF performed interim impairment analyses of the Timberland and Dickies reporting units as a result of triggering events and recorded impairment charges of $ 195.3 million and $ 61.8 million, respectively . The Timberland and Icebreaker reporting units are part of the Outdoor segment and the Dickies reporting unit is part of the Work segment. Refer to Note 24 for additional information on fair value measurements. During the year ended March 2023, VF recorded impairment charges of $ 394.1 million related to the Supreme reporting unit, which is part of the Active segment. VF did not record any impairment charges in the year ended March 2022 based on the results of its goodwill impairment testing. Accumulated impairment charges for the Outdoor, Active and Work segments were $ 769.0 million, $ 394.1 million and $ 61.8 million as of March 2024, respectively, and $ 323.2 million and $ 394.1 million for the Outdoor and Active segments as of March 2023, respectively. F-22 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTE 10 — LEASES The assets and liabilities related to operating and finance leases were as follows: (In thousands) Location in Consolidated Balance Sheet March 2024 March 2023 Assets: Operating lease assets Operating lease right-of-use assets $ 1,330,361 $ 1,372,182 Finance lease assets Property, plant and equipment, net 11,500 12,417 Total lease assets $ 1,341,861 $ 1,384,599 Liabilities: Current Operating lease liabilities Accrued liabilities $ 309,444 $ 332,222 Finance lease liabilities Current portion of long-term debt 981 951 Noncurrent Operating lease liabilities Operating lease liabilities 1,156,858 1,171,941 Finance lease liabilities Long-term debt 15,178 16,287 Total lease liabilities $ 1,482,461 $ 1,521,401 The components of lease costs were as follows: Year Ended March (In thousands) 2024 2023 2022 Operating lease cost $ 426,602 $ 418,716 $ 435,637 Finance lease cost – amortization of right-of-use assets 917 917 917 Finance lease cost – interest on lease liabilities 457 486 513 Short-term lease cost 25,256 22,154 17,602 Variable lease cost 132,474 117,189 98,052 Impairment 12,958 — 4,279 Gain recognized from sale-leaseback transaction — ( 13,189 ) — Total lease cost $ 598,664 $ 546,273 $ 557,000 Supplemental cash flow information related to leases was as follows: Year Ended March (In thousands) 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows – operating leases $ 441,269 $ 428,443 $ 465,249 Operating cash flows – finance leases 457 486 513 Financing cash flows – finance leases 1,079 1,050 1,023 Right-of-use assets obtained in exchange for lease liabilities: Operating leases 361,959 545,856 205,811 Finance leases — — — VF Corporation Fiscal 2024 Form 10-K F-23 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Lease terms and discount rates were as follows: March 2024 March 2023 March 2022 Weighted average remaining lease term: Operating leases 6.26 years 6.60 years 6.17 years Finance leases 12.51 years 13.51 years 14.51 years Weighted average discount rate: Operating leases 3.29 % 2.61 % 1.78 % Finance leases 2.71 % 2.71 % 2.71 % Maturities of operating and finance lease liabilities for the next five fiscal years and thereafter as of March 2024 were as follows: (In thousands) Operating Leases Finance Leases Total 2025 $ 354,808 $ 1,408 $ 356,216 2026 312,351 1,536 313,887 2027 266,884 1,664 268,548 2028 190,088 1,536 191,624 2029 125,901 1,408 127,309 Thereafter 375,946 11,523 387,469 Total lease payments 1,625,978 19,075 1,645,053 Less: present value adjustment 159,676 2,916 162,592 Present value of lease liabilities $ 1,466,302 $ 16,159 $ 1,482,461 The Company excluded approximately $ 82.3 million of leases (undiscounted basis) that have not yet commenced. These leases will commence primarily in Fisc al 2025 wit h lease terms of 1 to 15 years. NOTE 11 — OTHER ASSETS (In thousands) March 2024 March 2023 Deferred income taxes (Note 20) $ 389,783 $ 95,117 Computer software, net of accumulated amortization of: March 2024 - $ 324,492 ; March 2023 - $ 256,414 300,963 348,739 Pension assets (Note 17) 175,110 183,929 Investments held for deferred compensation plans (Note 17) 86,623 120,423 Income taxes receivable and prepaid income taxes 42,993 1,004,289 Other investments 39,764 27,542 Deposits 36,958 42,746 Partnership stores and shop-in-shop costs, net of accumulated amortization of: March 2024 - $ 91,042 ; March 2023 - $ 90,072 26,362 24,743 Derivative financial instruments (Note 25) 3,847 1,556 Other 40,470 52,839 Other assets $ 1,142,873 $ 1,901,923 F-24 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTE 12 — SUPPLY CHAIN FINANCING PROGRAM VF facilitates a voluntary supply chain finance ("SCF") program that enables a significant portion of our inventory suppliers 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 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 terms (which are generally within 90 days of the invoice date), are not impacted by a supplier's participation in the SCF program. All amounts due to suppliers that are eligible to 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. At March 2024 and 2023, the accounts payable line item in VF's Consolidated Balance Sheets included total outstanding obligations of $ 485.0 million and $ 510.9 million, respectively, due to suppliers that are eligible to participate in the SCF program. NOTE 13 — SHORT-TERM BORROWINGS (In thousands) March 2024 March 2023 Commercial paper borrowings $ 250,000 $ — International borrowing arrangements 13,938 11,491 Short-term borrowings $ 263,938 $ 11,491 VF maintains a $ 2.25 billion Global Credit Facility that expires in November 2026. 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; however, granting of any extension is at the discretion of the lenders. 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. There were no borrowings under the Global Credit Facility during the years ended March 2024 and 2023. Any borrowings under the Global Credit Facility would currently be priced at a credit spread of 122.5 basis points over the appropriate benchmark interest rate based on Term SOFR or the Euro Interbank Offer Rate ("EURIBOR"), plus a credit spread adjustment of 22.5 basis points for Term SOFR, based on the agreement as amended in April 2024. VF is also required to pay a facility fee to the lenders, currently equal to 15 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. VF has restrictive covenants on its Global Credit Facility, including a consolidated net indebtedness to consolidated net capitalization financial ratio covenant, as defined in the agreement as amended in April 2024. The calculation of consolidated net indebtedness to consolidated net capitalization ratio permits certain addbacks, including non-cash impairment charges and material impacts resulting from adverse legal rulings, as defined in the amended agreement. Additionally, as amended, 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 on or about September 30, 2024, then 0.65 to 1.00 through the last day of the fiscal quarter ending on or about September 30, 2025, and 0.60 to 1.00 thereafter. As of March 2024 , VF was in compliance with all covenants. The Global Credit Facility also supports VF’s global commercial paper program for short-term, seasonal working capital requirements and general corporate purposes. VF’s global commercial paper program allows for borrowings of up to $ 2.25 billion to the extent it has borrowing capacity under the Global Credit Facility. Outstanding U.S. commercial paper borrowings totaled $ 250.0 million at March 2024 and had a weighted average interest rate of 6.4 %. There were no U.S. commercial paper borrowings as of March 2023. In addition to the U.S. commercial paper program, VF commenced a euro commercial paper borrowing program during the second quarter of Fiscal 2024. As of March 2024, there were no outstanding euro commercial paper borrowings under this program. The Company designates its euro commercial paper borrowings as a net investment hedge of VF's investment in certain foreign operations. Refer to Note 25 for additional information. T he Global Credit Facility also had $ 0.6 million and $ 7.7 million of outstanding standby letters of credit issued on behalf of VF as of March 2024 and 2023, respectively, leaving approximately $ 2.0 billion and $ 2.2 billion as of March 2024 and 2023, respectively, available for borrowing against this facility. VF has $ 81.2 million of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks. Total outstanding balances under these arrangements were $ 13.9 million and $ 11.5 million at March 2024 and 2023, respectively. Borrowings under these arrangements had a weighted average interest rate of 51.6 % an d 39.1 % at March 2024 and 2023, respectively. VF Corporation Fiscal 2024 Form 10-K F-25 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTE 14 — ACCRUED LIABILITIES (In thousands) March 2024 March 2023 Current portion of operating lease liabilities (Note 10) $ 309,444 $ 332,222 Customer discounts and allowances 270,838 220,614 Other taxes 145,226 151,621 Compensation 133,754 141,437 Income taxes 113,288 314,465 Contract liabilities (Note 2) 67,115 62,214 Restructuring (Note 27) 52,465 43,121 Interest 46,398 60,504 Derivative financial instruments (Note 25) 35,578 59,995 Freight, duties and postage 31,801 57,271 Insurance 16,690 15,501 Product warranty claims (Note 16) 12,893 11,308 Deferred compensation (Note 17) 10,771 18,936 Advertising 8,775 41,338 Pension liabilities (Note 17) 6,597 20,727 Other 113,559 122,377 Accrued liabilities $ 1,375,192 $ 1,673,651 NOTE 15 — LONG-TERM DEBT (In thousands) March 2024 March 2023 0.625 % notes, due September 2023 ("2023 notes") $ — $ 923,354 Delayed Draw Term Loan Agreement, due December 2024 999,740 999,269 2.400 % notes, due April 2025 ("2025 notes") 748,385 746,933 4.125 % notes, due March 2026 ("2026 notes") 536,553 539,121 2.800 % notes, due April 2027 ("2027 notes") 497,713 497,029 0.250 % notes, due February 2028 ("2028 notes") 535,849 538,923 4.250 % notes, due March 2029 ("2029 notes") 534,690 537,809 2.950 % notes, due April 2030 ("2030 notes") 744,986 744,246 0.625 % notes, due February 2032 ("2032 notes") 531,760 534,763 6.000 % notes, due October 2033 ("2033 notes") 272,255 271,869 6.450 % notes, due November 2037 ("2037 notes") 284,915 284,765 Finance leases 16,159 17,238 Total long-term debt 5,703,005 6,635,319 Less current portion 1,000,721 924,305 Long-term debt, due beyond one year $ 4,702,284 $ 5,711,014 Term Debt Facility In August 2022, the Company entered into a delayed draw Term Loan Agreement (the “DDTL Agreement”). Under the DDTL Agreement, the lenders agreed to provide up to three separate delayed draw term loans (each, a "Delayed Draw”) to the Company in an aggregate principal amount of up to $ 1.0 billion (which may be increased to $ 1.1 billion subject to the terms and conditions of the DDTL Agreement). The DDTL Agreement has a termination date of December 14, 2024. Subject to the terms and conditions of the DDTL Agreement, the Company may request extensions of the termination date. Interest on the borrowings under the DDTL Agreement will generally be at Term SOFR, plus a 10 basis point credit spread adjustment, plus a margin. The margin ranges from 0.70 % to 0.875 % per annum based on the Company’s credit ratings. The Company is permitted at any time to prepay outstanding Delayed Draws without premium or penalty. F-26 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 During the third quarter of Fiscal 2023 , VF completed two draws under the DDTL Agreement totaling $ 1.0 billion, all of which will mature in December 2024. In connection with the draws, VF elected a base rate of one-month Term SOFR. The weighted average interest rate at March 2024 and 2023 was 6.30 % and 5.73 % , respectively. The DDTL Agreement is subject to restrictive covenants as defined in the amendment as of February 2023. Senior Notes Debt Issuance In March 2023, VF issued € 500.0 million of 4.125 % euro-denominated fixed-rate notes maturing in March 2026 and € 500.0 million of 4.250 % euro-denominated fixed-rate notes maturing in March 2029. The 2029 notes were issued as a green bond, and thus an amount equal to the net proceeds has been dedicated to projects that focus on VF's key environmental sustainability initiatives. Maturity and Redemption In September 2023, VF repaid € 850.0 million ($ 907.1 million) in aggregate principal amount of its outstanding 0.625 % Senior Notes due in September 2023, in accordance with the terms of the notes. 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 Statement of Operations in the year ended March 2022. In April 2022, VF repaid the remaining $ 500.0 million in aggregate principal amount of its outstanding 2.050 % Senior Notes due April 2022, in accordance with the terms of the notes. Other Information All notes, along with any amounts outstanding under the Global Credit Facility (Note 13), rank equally as senior unsecured obligations of VF. All notes contain customary covenants and events of default, including limitations on liens and sale-leaseback transactions and a cross-acceleration event of default. The cross-acceleration provision of the 2033 notes is triggered if more than $ 50.0 million of other debt is in default and has been accelerated by the lenders. For the other notes, the cross-acceleration trigger is $ 100.0 million. If VF fails in the performance of any covenant under the indentures that govern the respective notes, the trustee or lenders may declare the principal due and payable immediately. As of March 2024, VF was in compliance with all covenants. None of the long-term debt agreements contain acceleration of maturity clauses based solely on changes in credit ratings. However, if there were a change in control of VF and, as a result of the change in control, the notes were rated below investment grade by recognized rating agencies, then VF would be obligated to repurchase those notes at 101 % of the aggregate principal amount plus any accrued interest. The change of control provision applies to all notes, except for the 2033 notes. VF may redeem its notes, in whole or in part, at a price equal to the greater of (i) 100 % of the principal amount, plus accrued interest to the redemption date, or (ii) the sum of the present value of the remaining scheduled payments of principal and interest discounted to the redemption date at an adjusted treasury rate, as defined, plus 15 basis points for the 2028, 2032 and 2033 notes, 25 basis points for the 2026 and 2037 notes, 30 basis points for the 2029 notes, 35 basis points for the 2025 notes and 40 basis points for the 2027 and 2030 notes, plus accrued interest to the redemption date. In addition, the 2029, 2030 and 2032 notes can be redeemed at 100 % of the principal amount plus accrued interest to the redemption date within the three months prior to maturity, the 2027 and 2028 notes can be redeemed at 100 % of the principal amount plus accrued interest to the redemption date within two months prior to maturity and the 2025 and 2026 notes can be redeemed at 100 % of the principal amount plus accrued interest to the redemption date within one month prior to maturity. The 2025, 2027 and 2030 notes have a principal balance of $ 750.0 million, $ 500.0 million and $ 750.0 million, respectively, and are recorded net of unamortized original issue discounts and debt issuance costs. Interest expense on the 2025, 2027 and 2030 notes is recorded at an effective annual interest rate of 2.603 %, 2.953 % and 3.071 %, respectively. The 2026, 2028, 2029 and 2032 notes each have a principal balance of € 500.0 million and are recorded net of unamortized original issue discounts and debt issuance costs. Interest expense on the 2026, 2028, 2029 and 2032 notes is recorded at an effective annual interest rate of 4.339 %, 0.388 %, 4.409 % and 0.789 %, respectively. The Company has designated these notes as a net investment hedge of VF's investment in certain foreign operations. Refer to Note 25 for additional information. The 2033 and 2037 notes have a principal balance of $ 277.0 million and $ 286.9 million, respectively, and are recorded net of unamortized original issue discounts and debt issuance costs. Interest expense on the 2033 and 2037 notes is recorded at an effective annual interest rate of 6.19 % and 6.57 % respectively. Interest payments are due annually on the 2026, 2028, 2029 and 2032 notes and semiannually on all other notes. VF Corporation Fiscal 2024 Form 10-K F-27 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 The scheduled payments of long-term debt, excluding finance leases (Note 10), at the end of Fiscal 2024 for the next five fiscal years and thereafter are summarized as follows: (In thousands) Notes and Other 2025 $ 1,000,000 2026 1,289,450 2027 — 2028 1,039,450 2029 539,450 Thereafter 1,853,423 5,721,773 Less unamortized debt discount 15,077 Less unamortized debt issuance costs 19,850 Total long-term debt 5,686,846 Less current portion 999,740 Long-term debt, due beyond one year $ 4,687,106 NOTE 16 — OTHER LIABILITIES (In thousands) March 2024 March 2023 Income taxes $ 356,099 $ 273,955 Deferred compensation (Note 17) 81,103 77,428 Pension liabilities (Note 17) 78,628 72,825 Product warranty claims 48,373 41,111 Deferred income taxes (Note 20) 10,080 107,546 Derivative financial instruments (Note 25) 4,656 12,658 Other 59,538 65,531 Other liabilities $ 638,477 $ 651,054 VF accrues warranty costs, as cost of goods sold, at the time revenue is recognized. Product warranty costs are estimated based on historical experience and specific identification of the product requirements, which may fluctuate based on product mix. Activity relating to accrued product warranty claims is summarized as follows: Year Ended March (In thousands) 2024 2023 2022 Balance, beginning of year $ 52,419 $ 53,487 $ 62,087 Accrual for products sold during the year 22,555 11,086 8,815 Repair or replacement costs incurred and other ( 13,658 ) ( 12,024 ) ( 17,025 ) Currency translation ( 50 ) ( 130 ) ( 390 ) Balance, end of year 61,266 52,419 53,487 Less current portion (Note 14) 12,893 11,308 11,742 Long-term portion $ 48,373 $ 41,111 $ 41,745 F-28 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTE 17 — RETIREMENT AND SAVINGS BENEFIT PLANS VF has various retirement and savings benefit plans covering eligible employees. VF retains the right to curtail or discontinue any of the plans, subject to local regulations. Defined Benefit Pension Plans Defined benefit plans provide pension benefits based on participant compensation and years of service. VF sponsors a noncontributory qualified defined benefit pension plan covering most full-time U.S. employees employed before 2005 (the “U.S. qualified plan”) and an unfunded supplemental defined benefit pension plan that provides benefits in excess of limitations imposed by income tax regulations (the “U.S. nonqualified plan”). VF was in a net funded status at the end of Fiscal 2024. The U.S. qualified plan is fully funded and the majority of underfunded amounts relate to obligations under the unfunded U.S. nonqualified plan. As of December 31, 2018, the U.S. qualified defined benefit pension plan and supplemental defined benefit pension plan were frozen for all future benefit accruals. The U.S. qualified and nonqualified plans comprise 86 % of VF’s total defined benefit plan assets and 81 % of VF’s total projected benefit obligations at March 2024, and the remainder relates to non-U.S. defined benefit plans. A March 31 measurement date is used to value plan assets and obligations for all pension plans. The amounts reported in these disclosures have not been segregated between continuing and discontinued operations. The components of pension cost (income) for VF’s defined benefit plans were as follows: Year Ended March (In thousands) 2024 2023 2022 Service cost — benefits earned during the period $ 8,924 $ 10,632 $ 14,288 Interest cost on projected benefit obligations 47,079 44,732 37,534 Expected return on plan assets ( 63,569 ) ( 63,157 ) ( 77,432 ) Settlement charges 3,538 93,731 7,466 Amortization of deferred amounts: Net deferred actuarial losses 16,195 16,395 11,310 Deferred prior service credits ( 80 ) ( 453 ) ( 440 ) Net periodic pension cost (income) $ 12,087 $ 101,880 $ ( 7,274 ) Weighted average actuarial assumptions used to determine pension cost (income): Discount rate in effect for determining service cost 2.50 % 1.42 % 0.46 % Discount rate in effect for determining interest cost 4.85 % 4.09 % 2.16 % Expected long-term return on plan assets 5.99 % 5.24 % 4.53 % Rate of compensation increase (a) 2.19 % 1.95 % 2.01 % (a) Rate of compensation increase is calculated as the weighted average rate of compensation increase for active plans. Frozen plans are excluded from the calculation. VF recorded $ 3.5 million, $ 1.9 million and $ 7.5 million of settlement charges in the other income (expense), net line item in the Consolidated Statements of Operations for the years ended March 2024, 2023 and 2022, respectively. These settlement charges related to the recognition of deferred actuarial losses resulting from lump-sum payments of retirement benefits in the U.S. nonqualified plan. Additionally, in the year ended March 2023, VF entered into an agreement with The Prudential Insurance Company of America (“Prudential”) to purchase an irrevocable group annuity contract relating to approximately $ 330.0 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 did 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 year ended March 2023 to recognize the related deferred actuarial losses in accumulated OCL . The following provides a reconciliation of the changes in fair value of VF’s defined benefit plan assets and projected benefit obligations for each period, and the funded status at the end of each period: VF Corporation Fiscal 2024 Form 10-K F-29 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 (In thousands) March 2024 March 2023 Fair value of plan assets, beginning of period $ 1,111,710 $ 1,643,435 Actual return on plan assets 17,332 ( 146,068 ) VF contributions 30,167 22,683 Participant contributions 5,447 5,035 Settlement — ( 328,412 ) Benefits paid ( 81,150 ) ( 79,865 ) Currency translation 1,736 ( 5,098 ) Fair value of plan assets, end of period 1,085,242 1,111,710 Projected benefit obligations, beginning of period 1,021,333 1,557,715 Service cost 8,924 10,632 Interest cost 47,079 44,732 Participant contributions 5,447 5,035 Actuarial gain ( 7,518 ) ( 183,536 ) Settlement — ( 328,412 ) Benefits paid ( 81,150 ) ( 79,865 ) Plan amendments ( 489 ) ( 478 ) Currency translation 1,731 ( 4,490 ) Projected benefit obligations, end of period (a) 995,357 1,021,333 Funded status, end of period $ 89,885 $ 90,377 (a) The change in projected benefit obligations in the year ended March 2023 was driven by actuarial gains, primarily as a result of changes in discount rates and the purchase of an irrevocable group annuity contract relating to approximately $ 330.0 million of the U.S. qualified defined benefit pension plan obligations. Pension benefits are reported in the Consolidated Balance Sheets as a net asset or liability based on the overfunded or underfunded status of the defined benefit plans, assessed on a plan-by-plan basis. (In thousands) March 2024 March 2023 Amounts included in Consolidated Balance Sheets: Other assets (Note 11) $ 175,110 $ 183,929 Accrued liabilities (Note 14) ( 6,597 ) ( 20,727 ) Other liabilities (Note 16) ( 78,628 ) ( 72,825 ) Funded status $ 89,885 $ 90,377 Accumulated other comprehensive loss, pretax: Net deferred actuarial losses $ 260,512 $ 241,864 Net deferred prior service credits ( 4,290 ) ( 4,286 ) Total accumulated other comprehensive loss, pretax $ 256,222 $ 237,578 Accumulated benefit obligations $ 976,120 $ 1,005,159 Weighted average actuarial assumptions used to determine pension obligations: Discount rate 4.94 % 4.89 % Rate of compensation increase (a) 2.11 % 2.15 % (a) Rate of compensation increase is calculated as the weighted average rate of compensation increase for active plans. Frozen plans are excluded from the calculation. F-30 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 The actuarial model utilizes discount rates, which are used to estimate the present value of future cash outflows necessary to meet the projected benefit obligations for VF's defined benefit plans. The discount rates reflect the estimated interest rate that VF could use to settle its projected benefit obligations at the valuation date. The discount rate assumption is based on current market interest rates. VF selects a discount rate for each defined benefit pension plan by matching high quality corporate bond yields to the timing of the projected benefit payments to participants in each plan. VF uses the spot rate approach to measure the projected benefit obligations and service and interest costs. Under the spot rate approach, the full yield curve is applied separately to cash flows for each projected benefit obligation, service cost, and interest cost for a more precise calculation. Accumulated benefit obligations at any measurement date are the present value of vested and unvested pension benefits earned, without considering projected future compensation increases. Projected benefit obligations are the present value of vested and unvested pension benefits earned, considering projected future compensation increases. Deferred actuarial gains and losses are changes in the amount of either the benefit obligation or the value of plan assets resulting from differences between expected amounts for a year using actuarial assumptions and the actual results for that year. These amounts are deferred as a component of accumulated OCL and amortized to pension cost (income) in future years. For the U.S. qualified plan, amounts in excess of 20 % of projected benefit obligations at the beginning of the year are amortized over five years ; amounts between (i) 10 % of the greater of projected benefit obligations or plan assets, and (ii) 20 % of projected benefit obligations, are amortized over the expected average life expectancy of all participants; and amounts less than the greater of 10 % of projected benefit obligations or plan assets are not amortized. For the U.S. nonqualified plan, amounts in excess of 10 % of the pension benefit obligations are amortized on a straight-line basis over the expected average life expectancy of all participants. Deferred prior service credits related to plan amendments are also recorded in accumulated OCL and amortized to pension cost (income) on a straight-line basis over the average remaining years of service for active employees. The following provides information for VF's defined benefit plans with projected benefit obligations and accumulated benefit obligations in excess of plan assets: (In thousands) March 2024 March 2023 Projected benefit obligations $ 183,329 $ 186,532 Accumulated benefit obligations 164,092 170,357 Fair value of plan assets 98,104 92,980 The net amount of projected benefit obligations and plan ass ets for underfunded defined benefit plans was $ 85.2 million and $ 93.6 million as of March 2024 and 2023, respectively, and was reported in accrued liabilities and other liabilities in the Consolidated Balance Sheets. Management’s investment objectives are to invest plan assets in a diversified portfolio of securities to provide long-term growth, minimize the volatility of the value of plan assets relative to plan liabilities, and to ensure plan assets are sufficient to pay the benefit obligations. Investment strategies focus on diversification among multiple asset classes, a balance of long-term investment return at an acceptable level of risk and liquidity to meet benefit payments. The primary objective of the investment strategies is to more closely align plan assets with plan liabilities by utilizing dynamic asset allocation targets dependent upon changes in the plan’s funded ratio, capital market expectations and risk tolerance. The majority of the Company's plan assets relate to the U.S. qualified plan, which generally targets above 90 % asset allocation to liability-hedging asset classes, primarily in fixed-income investments. Plan assets are primarily composed of common collective trust funds that invest in liquid securities diversified across equity, fixed-income and other asset classes. Fund assets are allocated among independent investment managers who have full discretion to manage their portion of the fund’s assets, subject to strategy and risk guidelines established with each manager. The overall strategy, the resulting allocations of plan assets and the performance of funds and individual investment managers are continually monitored. Derivative financial instruments may be used by investment managers for hedging purposes. There are no direct investments in VF debt or equity securities and no significant concentrations of security risk. The expected long-term rate of return on plan assets was based on an evaluation of the weighted average expected returns for the major asset classes in which the plans have invested. Expected returns by asset class were developed through analysis of historical market returns, current market conditions, inflation expectations and equity and credit risks. Inputs from various investment advisors on long-term capital market returns and other variables were also considered where appropriate. VF Corporation Fiscal 2024 Form 10-K F-31 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 The fair value of investments held by VF’s defined benefit plans at March 2024 and March 2023, by asset class, is summarized below. Refer to Note 24 for a description of the three levels of the fair value measurement hierarchy. Total Plan Assets Fair Value Measurements (In thousands) Level 1 Level 2 Level 3 March 2024 Plan assets Cash equivalents $ 4,428 $ 4,428 $ — $ — Fixed income securities: U.S. Treasury and government agencies 2 — 2 — Insurance contracts 103,362 — 103,362 — Futures contracts 2,661 2,661 — — Total plan assets in the fair value hierarchy 110,453 $ 7,089 $ 103,364 $ — Plan assets measured at net asset value Cash equivalents 87,748 Equity securities: Domestic 33,510 International 40,933 Fixed income securities: Corporate and international bonds 751,147 Alternative investments 61,451 Total plan assets measured at net asset value 974,789 Total plan assets $ 1,085,242 Total Plan Assets Fair Value Measurements (In thousands) Level 1 Level 2 Level 3 March 2023 Plan assets Cash equivalents $ 983 $ 983 $ — $ — Fixed income securities: U.S. Treasury and government agencies 3 — 3 — Insurance contracts 97,429 — 97,429 — Futures contracts 6,649 6,649 — — Total plan assets in the fair value hierarchy 105,064 $ 7,632 $ 97,432 $ — Plan assets measured at net asset value Cash equivalents 118,114 Equity securities: Domestic 34,957 International 51,577 Fixed income securities: Corporate and international bonds 734,455 Alternative investments 67,543 Total plan assets measured at net asset value 1,006,646 Total plan assets $ 1,111,710 F-32 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Cash equivalents include cash held by individual investment managers of other asset classes for liquidity purposes (Level 1), and an institutional fund that invests primarily in short-term U.S. government securities measured at their daily net asset value. The fair values of insurance contracts are provided by the insurance companies and are primarily based on accumulated contributions plus returns guaranteed by the insurers (Level 2). Futures contracts consist of U.S. Treasury bond futures contracts (Level 1). Equity and fixed-income securities generally represent institutional funds measured at their daily net asset value derived from quoted prices of the underlying investments. Alternative investments are primarily in funds of hedge funds (“FoHFs”), which are comprised of different and independent hedge funds with various investment strategies. The administrators of the FoHFs utilize unobservable inputs to calculate the net asset value of the FoHFs on a monthly basis. VF makes contributions to its defined benefit plans sufficient to meet minimum funding requirements under applicable laws, plus discretionary amounts as determined by management. VF does not currently plan to make any contributions to the U.S. qualified plan during Fiscal 2025, and intends to make approximately $ 18.8 million of contributions to its other defined benefit plans during Fiscal 2025. The estimated future benefit payments for all of VF’s defined benefit plans, are approximately $ 66.4 million in Fiscal 2025, $ 67.2 million in Fiscal 2026, $ 70.0 million in Fiscal 2027, $ 69.5 million in Fiscal 2028, $ 70.9 million in Fiscal 2029 and $ 361.7 million for Fiscal 2030 through 2034. Other Retirement and Savings Plans VF sponsors a nonqualified retirement savings plan for employees whose contributions to a 401(k) plan would be limited by provisions of the Internal Revenue Code. This plan allows participants to defer a portion of their compensation and to receive matching contributions for a portion of the deferred amounts. Participants earn a return on their deferred compensation based on their selection of a hypothetical portfolio of publicly traded mutual funds. Changes in the fair value of the participants’ hypothetical investments are recorded as an adjustment to deferred compensation liabilities and compensation expense. Expense under this plan was $ 0.4 million, $ 0.8 million and $ 1.3 million in the years ended March 2024, 2023 and 2022, respectively. Deferred compensation, including accumulated earnings, is distributable in cash at participant-specified dates upon retirement, death, disability or termination of employment. VF sponsors a similar nonqualified plan that permits nonemployee members of the Board of Directors to defer their Board compensation. VF also has remaining obligations under other deferred compensation plans, primarily related to acquired comp anies. At March 2024, VF’s liability to participants under all deferred compensation plans was $ 91.9 million, of which $ 10.8 million was recorded in accrued liabilities (Note 14) and $ 81.1 million was recorded in other liabilities (Note 16). VF has purchased (i) publicly traded mutual funds in the same amounts as most of the participant-directed hypothetical investments underlying the deferred compensation liabilities, and (ii) variable life insurance contracts that invest in institutional funds that are substantially the same as the participant-directed hypothetical investments. These investment securities and earnings thereon are intended to provide a source of funds to meet the deferred compensation obligations, and serve as an economic hedge of the financial impact of changes in deferred compensation liabilities. They are held in an irrevocable trust but are subject to claims of creditors in the event of VF’s insolvency. VF also has assets related to deferred compensation plans of acquired companies, which are primarily invested in life insurance contracts. At March 2024, the value of investments held for all deferred compensation plans was $ 97.4 million, of which $ 10.8 million was recorded in other current assets (Note 6) and $ 86.6 million was recorded in other assets (Note 11). Realized and unrealized gains and losses on these deferred compensation assets are recorded in compensation expense in the Consolidated Statements of Operations and substantially offset losses and gains resulting from changes in deferred compensation liabilities to participants. VF sponsors 401(k) plans as well as other domestic and foreign retirement and savings plans. Expense for these plans totaled $ 43.6 million, $ 42.6 million and $ 42.0 million in the years ended March 2024, 2023 and 2022, respectively. NOTE 18 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS Common Stock During the years ended March 2024 and 2023, the Company did not purchase shares of Common Stock in open market transactions under its share repurchase program authorized by VF’s Board of Directors. During the year ended March 2022, the Company purchased 4.8 million shares of Common Stock in open market transactions for $ 350.0 million under its share repurchase program authorized by VF's Board of Directors. These purchases were treated as treasury stock transactions. Common Stock outstanding is net of shares held in treasury which are, in substance, retired. During the year ended March 2022, VF restored 4.8 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 March 2024, 2023 or 2022. 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. VF Corporation Fiscal 2024 Form 10-K F-33 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Accumulated Other Comprehensive Loss Comprehensive income (loss) consists of net income (loss) and specified components of other comprehensive income (loss), 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 other comprehensive income (loss) are reported, net of related income taxes, in accumulated OCL in stockholders’ equity, as follows: (In thousands) March 2024 March 2023 Foreign currency translation and other $ ( 868,439 ) $ ( 859,651 ) Defined benefit pension plans ( 182,333 ) ( 167,692 ) Derivative financial instruments ( 13,559 ) 7,825 Accumulated other comprehensive loss $ ( 1,064,331 ) $ ( 1,019,518 ) The changes in accumulated OCL, net of related taxes, were as follows: (In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total Balance, March 2021 $ ( 700,173 ) $ ( 257,747 ) $ ( 51,080 ) $ ( 1,009,000 ) Other comprehensive income (loss) before reclassifications ( 51,459 ) 13,547 59,753 21,841 Amounts reclassified from accumulated other comprehensive loss — 13,910 46,670 60,580 Net other comprehensive income (loss) ( 51,459 ) 27,457 106,423 82,421 Balance, March 2022 ( 751,632 ) ( 230,290 ) 55,343 ( 926,579 ) Other comprehensive income (loss) before reclassifications ( 108,019 ) ( 18,596 ) 44,979 ( 81,636 ) Amounts reclassified from accumulated other comprehensive loss — 81,194 ( 92,497 ) ( 11,303 ) Net other comprehensive income (loss) ( 108,019 ) 62,598 ( 47,518 ) ( 92,939 ) Balance, March 2023 ( 859,651 ) ( 167,692 ) 7,825 ( 1,019,518 ) Other comprehensive income (loss) before reclassifications ( 8,788 ) ( 28,939 ) ( 6,443 ) ( 44,170 ) Amounts reclassified from accumulated other comprehensive loss — 14,298 ( 14,941 ) ( 643 ) Net other comprehensive income (loss) ( 8,788 ) ( 14,641 ) ( 21,384 ) ( 44,813 ) Balance, March 2024 $ ( 868,439 ) $ ( 182,333 ) $ ( 13,559 ) $ ( 1,064,331 ) F-34 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Reclassifications out of accumulated OCL were as follows: (In thousands) Affected Line Item in the Consolidated Statements of Operations Year Ended March Details About Accumulated Other Comprehensive Loss Components 2024 2023 2022 Amortization of defined benefit pension plans: Net deferred actuarial losses Other income (expense), net $ ( 16,195 ) $ ( 16,395 ) $ ( 11,310 ) Deferred prior service credits Other income (expense), net 80 453 440 Pension settlement charges Other income (expense), net ( 3,538 ) ( 93,731 ) ( 7,466 ) Total before tax ( 19,653 ) ( 109,673 ) ( 18,336 ) Tax benefit 5,355 28,479 4,426 Net of tax ( 14,298 ) ( 81,194 ) ( 13,910 ) Gains (losses) on derivative financial instruments: Foreign exchange contracts Net revenues ( 5,004 ) ( 6,843 ) ( 27,382 ) Foreign exchange contracts Cost of goods sold 15,703 120,438 ( 26,346 ) Foreign exchange contracts Selling, general and administrative expenses 3,437 6,695 ( 487 ) Foreign exchange contracts Other income (expense), net ( 253 ) ( 10,365 ) ( 219 ) Interest rate contracts Interest expense 4,238 235 108 Total before tax 18,121 110,160 ( 54,326 ) Tax (expense) benefit ( 3,180 ) ( 17,663 ) 7,656 Net of tax 14,941 92,497 ( 46,670 ) Total reclassifications for the period, net of tax $ 643 $ 11,303 $ ( 60,580 ) NOTE 19 — STOCK-BASED COMPENSATION Pursuant to the amended and restated 1996 Stock Compensation Plan approved by stockholders, VF is authorized to grant nonqualified stock options, restricted stock units (“RSUs”) and restricted stock to officers, key employees and nonemployee members of VF’s Board of Directors. Substantially all stock-based compensation awards are classified as equity awards, which are accounted for in stockholders’ equity in the Consolidated Balance Sheets. On a limited basis, cash-settled stock appreciation rights and RSUs are granted to employees in certain international jurisdictions. These awards are accounted for as liabilities in the Consolidated Balance Sheets and remeasured to fair value each reporting period until the awards are settled. Compensation cost for all awards expected to vest is recognized over the shorter of the requisite service period or the vesting period, including accelerated recognition for retirement-eligible employees. Awards that do not vest are forfeited. Total stock-based compensation cost and the associated income tax benefits recognized in the Consolidated Statements of Operations are as follows: Year Ended March (In thousands) 2024 2023 2022 Stock-based compensation cost $ 67,332 $ 60,354 $ 91,358 Income tax benefits 15,018 13,714 21,917 At the end of March 2024, there wa s $ 64.5 million of t otal unrecognized compensation cost, net of estimated forfeitures, related to all stock-based compensation arrangements that will be recognized over a weighted average period of 1.5 years. At the end of March 2024, there w ere 5,422,693 shares available for future grants of stock options and stock awards under the 1996 Stock Compensation Plan. Shares for option exercises are issued from VF’s authorized but unissued Common Stock. VF Corporation Fiscal 2024 Form 10-K F-35 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Stock Options Stock options are granted with an exercise price equal to the fair market value of VF Common Stock on the date of grant. Employee stock options typically vest and become exercisable in equal annual installments over three years , and compensation cost is recognized ratably over the shorter of the requisite service period or the vesting period. Stock options granted to nonemployee members of VF’s Board of Directors vest upon grant and become exercisable one year from the date of grant. All options have ten-year terms. 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: Year Ended March 2024 2023 2022 Expected volatility 33 % to 54 % 30 % to 46 % 28 % to 41 % Weighted average expected volatility 42 % 39 % 36 % Expected term (in years) 5.9 to 7.8 6.0 to 7.8 6.1 to 7.9 Weighted average dividend yield 3.7 % 2.9 % 2.6 % Risk-free interest rate 3.80 % to 5.50 % 1.53 % to 4.89 % 0.04 % to 1.81 % Weighted average fair value at date of grant $ 5.74 $ 13.46 $ 20.17 Expected volatility over the contractual term of an option was based on a combination of the implied volatility from publicly traded options on VF Common Stock and the historical volatility of VF Common Stock. The expected term represents the period of time over which vested options are expected to be outstanding before exercise. VF used historical data to estimate option exercise behaviors and to estimate the number of options that would vest. Groups of employees that have historically exhibited similar option exercise behaviors were considered separately in estimating the expected term for each employee group. Dividend yield represents expected dividends on VF Common Stock for the contractual life of the options. Risk-free interest rates for the periods during the contractual life of the option were the implied yields at the date of grant from the U.S. Treasury zero coupon yield curve. Stock option activity for the year ended March 2024 is summarized as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Outstanding, March 2023 9,051,328 $ 62.42 Granted 5,869,857 18.10 Exercised — — Forfeited/cancelled ( 1,886,645 ) 44.58 Outstanding, March 2024 13,034,540 $ 45.04 6.9 $ 223 Exercisable, March 2024 6,517,404 $ 64.57 4.8 $ — The total fair value of stock options that vested during the years ended March 2024, 2023 and 2022 was $ 21.8 million, $ 23.2 million and $ 16.6 million, respectively . The total intrinsic value of stock options exercised during the years ended March 2024, 2023 and 2022, was $ 0.0 million , $ 0.4 million and $ 22.9 million, respectively. F-36 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Restricted Stock Units VF grants performance-based RSUs that enable employees to receive shares of VF Common Stock at the end of a three-year performance cycle. Each performance-based RSU has a potential final payout ranging from zero to two and one-quarter shares of VF Common Stock. The number of shares earned by participants, if any, is based on achievement of three-year financial and relative total shareholder return ("TSR") targets set by the Talent and Compensation Committee of the Board of Directors. Shares are issued to participants in the year following the conclusion of each three-year performance period. For performance-based RSUs granted in Fiscal 2024 and 2023, 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. Furthermore, the actual number of shares earned may be adjusted upward or downward by 25 % of the target award, based on how VF's TSR over the three-year period compares to the TSR for companies included in the Standard & Poor's 500 Consumer Discretionary Index, resulting in a maximum payout of 225 % of the target award. 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 $ 0.35 and $ 3.46 per share for the performance-based RSU grants in the years ended March 2024 and 2023, respectively. For performance-based RSUs granted in Fiscal 2022, 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 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, resulting in a maximum payout of 225 % of the target award. VF also grants nonperformance-based RSUs to employees as part of its stock compensation program and to nonemployee members of the Board of Directors. Each nonperformance-based RSU entitles the holder to one share of VF Common Stock. The employee nonperformance-based RSUs generally vest over periods of up to four years from the date of grant. The nonperformance-based RSUs granted to nonemployee members of the Board of Directors vest upon grant and will be settled in shares of VF Common Stock one year from the date of grant. Dividend equivalents on the RSUs accrue without compounding and are payable in additional shares of VF Common Stock when the RSUs vest. Dividend equivalents are subject to the same risk of forfeiture as the RSUs. RSU activity for the year ended March 2024 is summarized as follows: Performance-based Nonperformance-based Number Outstanding (a) Weighted Average Grant Date Fair Value Number Outstanding Weighted Average Grant Date Fair Value Outstanding, March 2023 863,928 $ 69.92 1,578,040 $ 50.85 Granted 709,338 18.29 3,586,940 17.09 Issued as Common Stock ( 13,033 ) 70.86 ( 363,353 ) 59.41 Forfeited/cancelled (b) ( 427,911 ) 63.12 ( 496,331 ) 26.95 Outstanding, March 2024 1,132,322 $ 40.14 4,305,296 $ 24.68 Vested, March 2024 515,967 $ 58.63 338,605 $ 25.44 (a) Reflects activity at target level of awards and has not been adjusted for performance and market conditions, except for awards issued during the period. (b) Includes adjustment for performance and market conditions for awards issued during the period. The weighted average fair value of performance-based RSUs granted during the years ended March 2024 and March 2023 was $ 18.29 and $ 45.23 per share, respectively, based on the fair market value of the underlying VF Common Stock on each grant date. The weighted average fair value of performance-based RSUs granted during the year ended March 2022 was $ 89.65 per share, based on the weighting of the TSR and the fair market value of the underlying VF Common Stock on each grant date. The total market value of awards outstanding at the end of March 2024 was $ 17.4 million. Awards earned and vested for the three-year performance period ended in March 2023 and distributed in early Fiscal 2024 totaled 13,033 shares of VF Common Stock having a value of $ 0.3 million. Similarly, 92,848 shares of VF Common Stock having a value of $ 4.4 million were earned for the performance period ended in March 2022 and distributed in early Fiscal 2023. The weighted average fair value of nonperformance-based RSUs granted during the years ended March 2024, 2023 and 2022 was $ 17.09 , $ 38.31 and $ 75.29 per share, respectively, which was equal to the fair market value of the underlying VF Common Stock on each grant date. The total market value of awards outstanding at the end of March 2024 was $ 66.0 million. VF Corporation Fiscal 2024 Form 10-K F-37 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Restricted Stock VF grants restricted shares of VF Common Stock to certain members of management. The fair value of the restricted shares, equal to the fair market value of VF Common Stock at the grant date, is recognized ratably over the vesting period. Restricted shares vest over periods of up to four years from the date of grant. Dividends accumulate in the form of additional restricted shares and are subject to the same risk of forfeiture as the restricted stock. Restricted stock activity during Fiscal 2024 included vesting of a portion of the shares of VF Common Stock deposited in escrow in connection with the Supreme acquisition, which for accounting purposes, are considered stock-based compensation. Restricted stock activity for the year ended March 2024 is summarized below: Nonvested Shares Outstanding Weighted Average Grant Date Fair Value Nonvested shares, March 2023 598,135 $ 67.17 Granted — — Dividend equivalents 8,696 18.41 Vested ( 248,590 ) 78.06 Forfeited ( 95,158 ) 37.78 Nonvested shares, March 2024 263,083 $ 65.90 Nonvested shares of restricted stock had a market value of $ 4.0 million at the end of March 2024. The market value of the shares that vested during the years ended March 2024, 2023 and 2022 was $ 4.7 million, $ 11.1 million and $ 5.0 million, respectively. NOTE 20 — INCOME TAXES The provision for income taxes was computed based on the following amounts of income from continuing operations before income taxes: Year Ended March (In thousands) 2024 2023 2022 Domestic $ ( 970,325 ) $ ( 885,562 ) $ 518,386 Foreign 736,640 928,849 1,004,864 Income (loss) before income taxes $ ( 233,685 ) $ 43,287 $ 1,523,250 The provision for income taxes consisted of: Year Ended March (In thousands) 2024 2023 2022 Current: Federal $ 236,135 $ ( 114,772 ) $ 231,469 Foreign 759,679 106,192 196,540 State 134,483 ( 13,163 ) 36,461 1,130,297 ( 21,743 ) 464,470 Deferred: Federal and state ( 316,470 ) ( 46,677 ) ( 177,381 ) Foreign ( 78,630 ) ( 6,877 ) 19,892 ( 395,100 ) ( 53,554 ) ( 157,489 ) Income tax expense (benefit) $ 735,197 $ ( 75,297 ) $ 306,981 F-38 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 The differences between income taxes computed by applying the statutory federal income tax rate and income tax expense (benefit) reported in the consolidated financial statements are as follows: Year Ended March (In thousands) 2024 2023 2022 Tax at federal statutory rate $ ( 49,074 ) $ 9,090 $ 319,882 State income taxes, net of federal tax benefit ( 28,867 ) ( 17,301 ) 16,641 Foreign rate differences 54,941 ( 38,609 ) ( 62,928 ) Tax reform — ( 94,877 ) 67,358 Tax litigation 691,053 — — Goodwill impairment 55,076 74,624 — Stock compensation 3,908 2,304 ( 1,977 ) Non-taxable contingent consideration adjustments — — ( 28,090 ) Interest on tax receivable 11,972 ( 11,972 ) — Other ( 3,812 ) 1,444 ( 3,905 ) Income tax expense (benefit) $ 735,197 $ ( 75,297 ) $ 306,981 Income tax expense (benefit) includes tax benefits of $ 34.7 million, $ 10.6 million and $ 2.2 million in the years ended March 2024, 2023 and 2022, respectively, from other favorable audit outcomes on certain tax matters and from expiration of statutes of limitations. Income tax expense (benefit) in the year ended March 2023 also includes a $ 94.9 million favorable adjustment to VF’s transition tax liability under the U.S. Tax Act pursuant to the Internal Revenue Service ("IRS") examinations for tax year 2017 and short-tax year 2018. On May 19, 2019, Switzerland voted to approve the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Act"). In Fiscal 2022, $ 67.4 million net tax expense was recorded due to changes to the related deferred tax assets. VF was granted a ruling which lowered the effective income tax rate on taxable earnings for years 2010 through 2014 under Belgium’s excess profit tax regime. During 2015, the European Union Commission ("EU") investigated and announced its decision that these rulings were illegal and ordered the tax benefits to be collected from affected companies, including VF. During 2017 and 2018, VF Europe BVBA was assessed and paid € 35.0 million in tax and interest, which was recorded as an income tax receivable and was included in the other current assets line item in VF's Consolidated Balance Sheets, based on the expected success of the requests for annulment. After subsequent annulments and appeals, the General Court confirmed the decision of the EU on September 20, 2023. As a result, VF wrote off the related income tax receivable and recorded a benefit for the associated foreign tax credit, resulting in $ 26.1 million of net income tax expense in the second quarter of Fiscal 2024. In addition, VF has been granted a lower effective income tax rate on taxable earnings in one foreign jurisdiction that will expire in March 2026. This lower rate, when compared with the country statutory rate, resulted in income tax reductions of $ 44.2 million ($ 0.11 per diluted share) in the year ended March 2024, $ 57.8 million ($ 0.15 per diluted share) in the year ended March 2023 and $ 0.4 million ($ 0.00 per diluted share) in the year ended March 2022. VF Corporation Fiscal 2024 Form 10-K F-39 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Deferred income tax assets and liabilities consisted of the following: (In thousands) March 2024 March 2023 Deferred income tax assets: Inventories $ 88,299 $ 74,395 Depreciation and capitalized research and development 12,785 — Deferred compensation 19,904 24,557 Stock compensation 26,961 27,589 Operating lease liabilities 352,821 361,676 Other employee benefits 3,170 — Other accrued expenses 117,689 109,050 Interest expense limitation carryforward 143,077 3,932 Capital loss carryforwards 153,789 166,587 Operating loss and credit carryforwards 557,272 331,167 Gross deferred income tax assets 1,475,767 1,098,953 Valuation allowances ( 436,047 ) ( 424,932 ) Net deferred income tax assets 1,039,720 674,021 Deferred income tax liabilities: Depreciation and capitalized research and development — 26,303 Intangible assets 120,682 277,473 Operating lease right-of-use assets 320,896 330,235 Other employee benefits — 3,707 Outside basis difference in subsidiaries 216,215 46,690 Other deferred tax liabilities 2,224 2,042 Deferred income tax liabilities 660,017 686,450 Net deferred income tax assets (liabilities) $ 379,703 $ ( 12,429 ) Amounts included in the Consolidated Balance Sheets: Other assets (Note 11) $ 389,783 $ 95,117 Other liabilities (Note 16) ( 10,080 ) ( 107,546 ) $ 379,703 $ ( 12,429 ) At the end of Fiscal 2024, the Company is not asserting indefinite reinvestment with regards to short-term liquid assets of its foreign subsidiaries. All other foreign earnings, including basis differences of certain foreign subsidiaries, continue to be considered indefinitely reinvested. The Company has not determined the deferred tax liability associated with these undistributed earnings and basis differences, as such determination is not practicable. VF has potential tax benefits totaling $ 453.4 million for foreign operating loss carryforwards, of which $ 86.3 million have an unlimited carryforward life. There are $ 153.8 million of potential tax benefits for capital loss carryforwards that begin to expire in 2026 and $ 48.7 million of foreign tax credit carryforwards that begin to expire in 2030 and $ 5.3 million of general business credit carryforwards that begin to expire in 2044. Additionally, there are $ 49.9 million of potential tax benefits for state operating loss and credit carryforwards that expire between 2025 and 2040. A valuation allowance has been provided where it is more likely than not that the deferred tax assets related to those operating loss carryforwards will not be realized. Valuation allowances totaled $ 218.1 million for available foreign operating loss carryforwards, $ 150.3 million for available capital loss carryforwards, $ 48.7 million for foreign tax credit carryforwards, $ 18.2 million for available state operating loss and credit carryforwards, and $ 0.7 million for other foreign deferred income tax assets. During Fiscal 2024, VF had a net decrease in valuation allowances of $ 1.2 million related to capital loss carryforwards, a net increase of $ 48.7 million related to foreign tax credit carryforwards, a net increase of $ 8.2 million related to state operating loss and credit carryforwards and a decrease of $ 44.6 million related to foreign operating loss carryforwards and other foreign deferred tax assets, inclusive of foreign currency effects. F-40 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 A reconciliation of the change in the accrual for unrecognized income tax benefits is as follows: (In thousands) Unrecognized Income Tax Benefits Accrued Interest and Penalties Unrecognized Income Tax Benefits Including Interest and Penalties Balance, March 2021 $ 223,010 $ 38,141 $ 261,151 Additions for current year tax positions 28,098 — 28,098 Additions for prior year tax positions (a) 112,850 32,642 145,492 Reductions for prior year tax positions ( 895 ) ( 532 ) ( 1,427 ) Reductions due to statute expirations ( 5,803 ) ( 840 ) ( 6,643 ) Payments in settlement ( 21,278 ) ( 730 ) ( 22,008 ) Decrease due to divestiture ( 506 ) ( 340 ) ( 846 ) Currency translation 186 ( 43 ) 143 Balance, March 2022 335,662 68,298 403,960 Additions for current year tax positions 22,319 — 22,319 Additions for prior year tax positions 13,324 20,577 33,901 Reductions for prior year tax positions ( 3,747 ) ( 951 ) ( 4,698 ) Reductions due to statute expirations ( 15,369 ) ( 1,699 ) ( 17,068 ) Payments in settlement ( 3,847 ) ( 1,608 ) ( 5,455 ) Currency translation ( 172 ) ( 10 ) ( 182 ) Balance, March 2023 348,170 84,607 432,777 Additions for current year tax positions 15,982 — 15,982 Additions for prior year tax positions (b) 165,426 78,133 243,559 Reductions for prior year tax positions ( 36,943 ) ( 3,809 ) ( 40,752 ) Reductions due to statute expirations ( 1,436 ) ( 383 ) ( 1,819 ) Payments in settlement (c) ( 210,874 ) ( 74,659 ) ( 285,533 ) Currency translation ( 11 ) ( 4 ) ( 15 ) Balance, March 2024 $ 280,314 $ 83,885 $ 364,199 (a) The year ended March 2022 included an increase resulting from updated estimates related to intellectual property transfers completed in a prior period. (b) The year ended March 2024 includes an increase due to uncertainty in the application of court decisions upheld upon appeal. (c) The year ended March 2024 includes a settlement with the tax authorities related to intellectual property transfers completed in a prior period. (In thousands) March 2024 March 2023 Amounts included in the Consolidated Balance Sheets (a) : Unrecognized income tax benefits, including interest and penalties $ 364,199 $ 432,777 Less deferred tax benefits 61,368 135,175 Total unrecognized tax benefits $ 302,831 $ 297,602 (a) Included in the accrued liabilities and other liabilities line items in the Consolidated Balance Sheets. The unrecognized tax benefits of $ 302.8 million at the end of Fiscal 2024, if recognized, would reduce the annual effective tax rate. VF files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. In the U.S., the IRS examinations for tax years through 2015 have been effectively settled. As previously reported, VF petitioned the U.S. Tax Court (the "Tax 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 argued that all such income should have been immediately included in 2011, VF reported periodic income inclusions in subsequent tax years. In Fiscal 2023, the Tax Court issued its final decision in favor of the IRS, which was appealed by VF. On October 19, 2022, VF paid VF Corporation Fiscal 2024 Form 10-K F-41 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 $ 875.7 million related to the 2011 taxes and interest being disputed, which was recorded as an income tax receivable and began to accrue interest income. These amounts were included in the other assets line item in VF's Consolidated Balance Sheet, based on our assessment of the position under the more-likely-than-not standard of the accounting literature. On September 8, 2023, the U.S. Court of Appeals for the First Circuit (“Appeals Court”) upheld the Tax Court’s decision in favor of the IRS. As a result of the Appeals Court decision, VF determined that its position no longer met the more-likely-than-not threshold, and thus wrote off the related income tax receivable and associated interest and recorded $ 690.0 million of income tax expense in the second quarter of Fiscal 2024. This amount included the reversal of $ 19.6 million of interest income, of which $ 7.5 million was recorded in the first quarter of Fiscal 2024. This amount reflects the total estimated net impact to VF’s tax expense, which includes the expected reduction in taxes paid on the periodic inclusions that VF has reported, release of related deferred tax liabilities, and consideration of indirect tax effects resulting from the decision. The estimated impact is subject to future adjustments based on finalization with tax authorities. 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 believes that some of these audits and negotiations will conclude during the next 12 months. Management also believes that it is reasonably possible that the amount of unrecognized income tax benefits may decrease by $ 4.6 million within the next 12 months due to settlement of audits and expiration of statutes of limitations of which $ 1.6 million would reduce income tax expense. NOTE 21 — REPORTABLE SEGMENT INFORMATION VF's President and Chief Executive Officer, who is considered the Company's CODM, allocates resources and assesses performance based on a global brand view which represents VF's operating segments. The operating segments have been evaluated and combined into reportable segments because they meet the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance. Based on this assessment, the Company's reportable segments have been identified as: Outdoor, Active and Work. Below is a description of VF's reportable segments and the brands included within each: REPORTABLE SEGMENT BRANDS Outdoor - Outdoor apparel, footwear and equipment The North Face ® Timberland ® Smartwool ® Altra ® Icebreaker ® Active - Active apparel, footwear and accessories Vans ® Supreme ® Kipling ® Napapijri ® Eastpak ® JanSport ® Work - Work and work-inspired lifestyle apparel and footwear Dickies ® Timberland PRO ® Other - included in the tables below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other primarily includes sourcing activities related to transition services. The Company continuously assesses the composition of its portfolio to ensure it is aligned with its strategic objectives and positioned to maximize growth and return to shareholders. In doing so, it evaluates whether changes may need to be made to our internal reporting structure to better support and assess the operations of our business going forward. If changes are made, we will assess the resulting effect on our reportable segments, operating segments and reporting units, if any. The primary financial measures used by management to evaluate the financial results of VF's reportable segments are segment revenues and segment profit. Segment profit comprises the operating income and other income (expense), net line items of each segment. Accounting policies used for internal management reporting at the individual segments are consistent with those in Note 1, except as stated below. Corporate costs (other than common costs allocated to the segments), goodwill and indefinite-lived intangible asset impairment charges, net interest expense and loss on debt extinguishment are not controlled by segment management and therefore are excluded from the measurement of segment profit. Common costs such as information systems processing, retirement benefits and insurance are allocated F-42 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 from corporate costs to the segments based on appropriate metrics such as usage or employment. Corporate costs that are not allocated to the segments consist of corporate headquarters expenses (including compensation and benefits of corporate management and staff, certain legal and professional fees and administrative and general costs), costs of corporate programs or corporate-managed decisions, and other expenses which include a portion of defined benefit pension costs, development costs for management information systems, costs of registering, maintaining and enforcing certain of VF’s trademarks and miscellaneous consolidated costs. Defined benefit pension plans in the U.S. are centrally managed. The current year service cost component of pension cost is allocated to the segments, while the remaining pension cost components are reported in corporate and other expenses. Segment assets, for internal management purposes, are those used directly in or resulting from the operations of each business, which are accounts receivable and inventories. Segment assets included in the Other category represent balances primarily related to corporate activities, and are provided for purposes of reconciliation as the Other category is not considered a reportable segment. Total expenditures for additions to long-lived assets are not disclosed as this information is not regularly provided to the CODM at the segment level. Financial information for VF’s reportable segments is as follows: Year Ended March (In thousands) 2024 2023 2022 Segment revenues: Outdoor $ 5,501,399 $ 5,647,526 $ 5,327,568 Active 4,061,729 4,904,622 5,380,338 Work 891,539 1,060,179 1,133,149 Other — 148 785 Total segment revenues $ 10,454,667 $ 11,612,475 $ 11,841,840 Segment profit (loss): Outdoor $ 602,708 $ 785,431 $ 795,523 Active (a) 352,248 654,691 979,746 Work 17,647 121,157 193,492 Other — ( 536 ) ( 586 ) Total segment profit 972,603 1,560,743 1,968,175 Impairment of goodwill and indefinite-lived intangible assets ( 507,566 ) ( 735,009 ) — Corporate and other expenses ( 475,314 ) ( 617,815 ) ( 309,817 ) Interest expense, net ( 223,408 ) ( 164,632 ) ( 131,463 ) Loss on debt extinguishment — — ( 3,645 ) Income (loss) from continuing operations before income taxes $ ( 233,685 ) $ 43,287 $ 1,523,250 (a) Includes legal settlement gains of $ 29.1 million in the year ended March 2024. VF Corporation Fiscal 2024 Form 10-K F-43 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 (In thousands) March 2024 March 2023 Segment assets: Outdoor $ 1,544,364 $ 1,936,090 Active 1,034,714 1,341,142 Work 452,384 610,798 Other 8,869 15,055 Total segment assets 3,040,331 3,903,085 Cash and equivalents 674,605 814,887 Property, plant and equipment, net 823,886 942,440 Intangible assets and goodwill 4,088,896 4,621,234 Operating lease right-of-use assets 1,330,361 1,372,182 Other assets 1,654,884 2,336,660 Consolidated assets $ 11,612,963 $ 13,990,488 Year Ended March (In thousands) 2024 2023 2022 Depreciation, amortization and other asset write-downs: Outdoor $ 103,586 $ 94,448 $ 95,860 Active 93,587 81,106 87,235 Work 13,620 12,524 14,439 Other 108,411 74,246 69,401 $ 319,204 $ 262,324 $ 266,935 Supplemental information (with revenues by geographic area primarily based on the origin of the shipment) is as follows: Year Ended March (In thousands) 2024 2023 2022 Total revenues: U.S. $ 4,843,098 $ 6,043,359 $ 6,178,300 Foreign 5,611,569 5,569,116 5,663,540 $ 10,454,667 $ 11,612,475 $ 11,841,840 Property, plant and equipment: U.S. $ 596,387 $ 707,035 Foreign 227,499 235,405 $ 823,886 $ 942,440 No single customer accounted for 10% or more of the Company’s total revenues in the years ended March 2024, 2023 and 2022. F-44 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NOTE 22 — COMMITMENTS VF is obligated under noncancelable operating leases. Refer to Note 10 for additional information related to future lease payments. In the ordinary course of business, VF has entered into purchase commitments for finished products and raw materials. Total payments required under these agreements, which primarily relate to finished products, are $ 2.3 billion, $ 73.2 million and $ 3.0 million for Fiscal 2025 through 2027, respectively, and no commitments thereafter. VF has entered into commitments for (i) capital spending, (ii) service and maintenance agreements related to its management information systems, and (iii) other obligations. Future payments under these agreements are $ 128.7 million, $ 80.6 million, $ 41.5 million, $ 6.6 million and $ 0.8 million for Fiscal 2025 through 2029, respectively, and no commitments thereafter. Surety bonds, customs bonds, standby letters of credit and international bank guarantees, all of which represent contingent guarantees of performance under self-insurance and other programs, total ed $ 106.3 million as of March 2024 . These commitments would only be drawn upon if VF were to fail to meet its claims or other obligations. NOTE 23 — EARNINGS (LOSS) PER SHARE Year Ended March (In thousands, except per share amounts) 2024 2023 2022 Earnings (loss) per share — basic: Income (loss) from continuing operations $ ( 968,882 ) $ 118,584 $ 1,216,269 Weighted average common shares outstanding 388,360 387,763 390,291 Earnings (loss) per share from continuing operations $ ( 2.49 ) $ 0.31 $ 3.12 Earnings (loss) per share — diluted: Income (loss) from continuing operations $ ( 968,882 ) $ 118,584 $ 1,216,269 Weighted average common shares outstanding 388,360 387,763 390,291 Incremental shares from stock options and other dilutive securities — 607 2,120 Adjusted weighted average common shares outstanding 388,360 388,370 392,411 Earnings (loss) per share from continuing operations $ ( 2.49 ) $ 0.31 $ 3.10 In the year ended March 2024, the dilutive impacts of all outstanding stock options and other dilutive securities were 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. As a result, a total of 19.0 million potentially dilutive shares related to stock options and other dilutive securities were excluded from the diluted loss per share calculation for the year ended March 2024. Outstanding stock options and other dilutive securities of approximately 9.7 million and 3.3 million shares were excluded from the calculations of diluted earnings per share for the years ended March 2023 and 2022, respectively, because the effect of their inclusion would have been anti-dilutive to those years. In addition, 0.6 million and 0.5 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for the years ended March 2023 and 2022, respectively, because these units were not considered to be contingent outstanding shares in those years. NOTE 24 — FAIR VALUE MEASUREMENTS Financial assets and financial liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows: • 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. 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. • 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. VF Corporation Fiscal 2024 Form 10-K F-45 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 RECURRING FAIR VALUE MEASUREMENTS 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: Total Fair Value Fair Value Measurement Using (a) (In thousands) Level 1 Level 2 Level 3 March 2024 Financial assets: Cash equivalents: Money market funds $ 171,931 $ 171,931 $ — $ — Time deposits 54,853 54,853 — — Derivative financial instruments 32,548 — 32,548 — Deferred compensation and other 95,236 95,236 — — Financial liabilities: Derivative financial instruments 40,234 — 40,234 — Deferred compensation 90,804 — 90,804 — Total Fair Value Fair Value Measurement Using (a) (In thousands) Level 1 Level 2 Level 3 March 2023 Financial assets: Cash equivalents: Money market funds $ 418,304 $ 418,304 $ — $ — Time deposits 21,233 21,233 — — Derivative financial instruments 49,688 — 49,688 — Deferred compensation and other 99,200 99,200 — — Financial liabilities: Derivative financial instruments 72,653 — 72,653 — Deferred compensation 96,364 — 96,364 — (a) There were no transfers among the levels within the fair value hierarchy during the years ended March 2024 or 2023. VF’s cash equivalents include money market funds and time deposits with maturities within three months of their purchase dates, that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign exchange forward contracts and interest rate swap contracts , is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and interest rate forward curves, and considers the credit risk of the Company and its counterparties. VF’s deferred compensation assets primarily represent investments held within plan trusts as an economic hedge of the related deferred compensation liabilities (Note 17). 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. In connection with the Supreme acquisition on December 28, 2020, the fair value of the related contingent consideration liability was initially estimated at $ 207.0 million (Level 3). 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 of $ 150.0 million recognized in the selling, general and administrative expenses line item in the Consolidated Statement of Operations in the year ended March 2022. As of March 2022, the estimated fair value of the contingent consideration liability was $ 57.0 million and was paid during Fiscal 2023. All other significant 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 March 2024 and 2023, their carrying values approximated their fair values. Additionally, at March 2024 and 2023, the carrying values of VF’s long-term debt, including the current portion, were $ 5,703.0 million and $ 6,635.3 million, respectively, compared with fair values of $ 5,263.3 million a nd $ 6,244.4 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. F-46 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 NONRECURRING FAIR VALUE MEASUREMENTS Certain non-financial assets, primarily property, plant and equipment, goodwill and intangible assets, and operating lease right-of-use assets, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, these assets are required to be assessed for impairment whenever events or circumstances indicate their carrying value may not be fully recoverable, and at least annually for goodwill and indefinite-lived intangible assets. In the event an impairment is required, the asset is adjusted to its estimated fair value, using market-based assumptions. The Company recorded $ 39.4 million, $ 3.0 million and $ 6.4 million of impairments in the years ended March 2024, 2023 and 2022, respectively, related to retail store assets, lease right-of-use assets and other fixed assets. These impairments were recorded in the selling, general and administrative expenses line item in the Consolidated Statements of Operations. The Company recorded $ 507.6 million and $ 735.0 million of impairments in the years ended March 2024 and 2023, respectively, related to goodwill and indefinite-lived trademark intangible assets. No impairment charges of goodwill or indefinite-lived trademark intangible assets were recorded in the year ended March 2022. Refer to additional discussion of management's goodwill and indefinite-lived intangible asset impairment testing below. Fiscal 2024 Goodwill and Intangible Asset Impairment Testing Timberland Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis During the third quarter of Fiscal 2024, management determined that the recent downturn in the Timberland financial results, combined with a downward revision to the latest Fiscal 2024 forecast and forward-looking financial projections, was a triggering event that required management to perform a quantitative impairment analysis of both the Timberland reporting unit goodwill, which includes the Timberland ® brand, and the Timberland indefinite-lived trademark intangible asset, which includes both the Timberland ® and Timberland PRO ® brands. The carrying values of the goodwill and indefinite-lived trademark intangible asset at the testing date were $ 407.9 million and $ 999.5 million , respectively. As a result of the impairment testing performed, VF recorded a goodwill impairment charge of $ 195.3 million in the third quarter of Fiscal 2024 to write down the Timberland reporting unit carrying value to its estimated fair value. No impairment charge was recorded on the indefinite-lived trademark intangible asset. The estimated fair value of the indefinite-lived trademark intangible asset exceeded its carrying value by a significant amount. During the fourth quarter of Fiscal 2024, management determined that the continued downturn in Timberland financial results and weakness in the wholesale channel, combined with expectations of a slower recovery, was a triggering event that required management to perform a quantitative impairment analysis of both the Timberland reporting unit goodwill and indefinite-lived trademark intangible asset. The carrying values of the goodwill and indefinite-lived trademark intangible asset at the testing date were $ 211.7 million and $ 999.5 million , respectively. As a result of the impairment testing performed, management concluded that the Timberland reporting unit goodwill was fully impaired and thus recorded an additional impairment charge of $ 211.7 million in the Consolidated Statement of Operations for the year ended March 2024. Based on the analysis, management concluded that the indefinite-lived trademark intangible asset was not impaired and the estimated fair value exceeded its carrying value by 14 % . The Timberland reporting unit is included in the Outdoor reportable segment. Management's revenue and profitability forecasts used in the Timberland reporting unit and indefinite-lived trademark intangible asset valuations considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the quantitative analysis of the Timberland reporting unit and indefinite-lived trademark intangible asset include: • Financial projections and future cash flows that considered recent actual results lower than previous internal forecasts, slower recovery from the recent downturn, with moderate revenue growth and profitability improvement throughout the forecast period that reflects the long-term strategy for the business, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rates based on market data as well as active license agreements for the brand and similar VF brands; and, • Market-based discount rates. The valuation model used by management in the indefinite-lived trademark intangible asset impairment testing assumes recovery from the recent downturn in the brand's operating results and the return to revenue growth over the projection period. If the brand is unable to achieve the financial projections, an impairment of the indefinite-lived trademark intangible asset could occur in the future. Management performed a sensitivity analysis on the impairment model used to test the Timberland indefinite-lived trademark intangible asset. In doing so, management determined that a 40 % decrease in the annual growth rate assumption for revenues used in the projections, combined with a 100 basis point increase in the discount rate used in the relief-from-royalty model resulted in the estimated fair value of the VF Corporation Fiscal 2024 Form 10-K F-47 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 indefinite-lived trademark intangible asset to be below its carrying value, which would result in impairment. Dickies Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis During the second quarter of Fiscal 2024, management determined that the recent downturn in the Dickies historical financial results, combined with a downward revision to the latest Fiscal 2024 forecast, was a triggering event that required management to perform a quantitative impairment analysis of both the Dickies reporting unit goodwill and the Dickies indefinite-lived trademark intangible asset. Based on the analysis, management concluded that both the goodwill and indefinite-lived intangible asset were not impaired. For goodwill, the estimated fair value of the reporting unit exceeded the carrying value by 8 % . The estimated fair value of the indefinite-lived trademark intangible asset exceeded its carrying value by a significant amount. The carrying values of the goodwill and indefinite-lived trademark intangible asset at the testing date were $ 61.2 million and $ 290.0 million , respectively. During the third quarter of Fiscal 2024, management determined that the continued downturn in the Dickies financial results, weakness in certain key U.S. wholesale customer accounts, including lost product placement, and weakness in certain international markets, combined with expectations of a slower recovery, which have resulted in further reductions to the financial projections, was a triggering event that required management to perform a quantitative impairment analysis of both the Dickies reporting unit goodwill and the Dickies indefinite-lived trademark intangible asset. The carrying values of the goodwill and indefinite-lived trademark intangible asset at the testing date were $ 61.8 million and $ 290.0 million , respectively. Based on the analysis, management concluded that the Dickies reporting unit goodwill was fully impaired and thus recorded an impairment charge of $ 61.8 million in the third quarter of Fiscal 2024. Based on the analysis, management concluded that the indefinite-lived trademark intangible asset was not impaired and the estimated fair value exceeded its carrying value by a significant amount. During the fourth quarter of Fiscal 2024, management determined that the overall weakness in the Dickies business and financial results, was a triggering event that required management to perform a quantitative impairment analysis of the Dickies indefinite-lived trademark intangible asset. The carrying value of the indefinite-lived trademark intangible asset at the testing date was $ 290.0 million . Based on the analysis, management concluded that the indefinite-lived trademark intangible asset was not impaired and the estimated fair value exceeded its carrying value by 16 % . The Dickies reporting unit is included in the Work reportable segment. Management's revenue and profitability forecasts used in the Dickies reporting unit and indefinite-lived trademark intangible asset valuations considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the quantitative analysis of the Dickies reporting unit and indefinite-lived trademark intangible asset include: • Financial projections and future cash flows, including a base year that considered recent actual results lower than previous internal forecasts, continued weakness in certain key accounts and markets, slower recovery from the recent downturn, with moderate revenue growth and improved profitability throughout the forecast period that reflects the long-term strategy for the business, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rates based on market data as well as active license agreements for the brand and similar VF brands; and, • Market-based discount rates. The valuation model used by management in the indefinite-lived trademark intangible asset impairment testing assumes recovery from the recent downturn in the brand's operating results and the return to revenue growth over the projection period. If the brand is unable to achieve the financial projections, an impairment of the indefinite-lived trademark intangible asset could occur in the future. Management performed a sensitivity analysis on the impairment model used to test the Dickies indefinite-lived trademark intangible asset. In doing so, management determined that a 50 % decrease in the annual growth rate assumption for revenues used in the projections, combined with a 200 basis point increase in the discount rate used in the relief-from-royalty model resulted in the estimated fair value of the indefinite-lived trademark intangible asset to be below its carrying value, which would result in impairment. Icebreaker Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis In conjunction with VF's annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of Fiscal 2024, management performed a quantitative impairment analysis of the Icebreaker reporting unit goodwill and indefinite-lived trademark intangible asset. The decision to bypass the optional qualitative impairment assessment and proceed directly to a quantitative impairment analysis was based on results from management's prior testing, combined with a downward revision to the latest Fiscal 2024 forecast and forward-looking financial projections. The carrying values of the Icebreaker reporting unit goodwill and indefinite-lived trademark intangible asset at the testing date were $ 81.2 million and $ 62.1 million , respectively. As a result of the annual impairment testing, VF recorded a goodwill impairment charge of $ 38.8 million in the Consolidated Statement of Operations for the year ended March 2024. Based on the analysis, management concluded that the indefinite-lived trademark intangible asset was not impaired and the estimated fair value exceeded its carrying value by a significant amount. F-48 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 The Icebreaker reporting unit is included in the Outdoor reportable segment. Management's revenue and profitability forecasts used in the Icebreaker reporting unit and indefinite-lived trademark intangible asset valuations considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the quantitative analysis of the Icebreaker reporting unit and indefinite-lived trademark intangible asset include: • Financial projections and future cash flows, including a base year that considered recent actual results lower than previous internal forecasts, slower recovery from the recent downturn, with moderate revenue growth and improved profitability throughout the forecast period that reflects the long-term strategy for the business, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rates based on market data as well as active license agreements for similar VF brands; and, • Market-based discount rates. The valuation model used by management in the impairment testing assumes recovery from the recent downturn in the brand's operating results and the return to revenue growth and improved profitability over the projection period. If the brand is unable to achieve the financial projections, additional impairment of the reporting unit goodwill or impairment of the indefinite-lived trademark intangible asset could occur in the future. Supreme Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis In conjunction with VF's annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of Fiscal 2024, management performed a quantitative impairment analysis of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. The decision to bypass the optional qualitative impairment assessment and proceed directly to a quantitative impairment analysis was based on the impairment results from management's prior year testing and the overall significance of the related assets. Based on the analysis, management concluded the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset were not impaired. For goodwill, the estimated fair value of the reporting unit exceeded the carrying value by 8 % . The estimated fair value of the indefinite-lived trademark intangible asset exceeded its carrying value by 3 % . The carrying values of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset at the testing date were $ 819.7 million and $ 852.0 million , respectively. The Supreme reporting unit is included in the Active reportable segment. Management's revenue and profitability forecasts used in the Supreme reporting unit and indefinite-lived trademark intangible asset valuations considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the quantitative analysis of the Supreme reporting unit and indefinite-lived trademark intangible asset include: • Financial projections and future cash flows that are comparable to those used in the prior year testing, as the brand is executing on its strategy and delivered strong profitability growth in the current year, with moderate revenue growth and a continued improvement in profitability throughout the forecast period that reflects the long-term strategy for the business, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rates based on market data as well as active license agreements with similar VF brands; • Market-based discount rates that are slightly lower than prior testing due to overall market conditions; and, • Market approach reflecting improved recent historical financial measures for Supreme. The valuation model used by management in the impairment testing assumes continued recovery in the brand's operating results with revenue growth and improved profitability over the projection period. If the brand is unable to achieve the financial projections, additional impairment of the reporting unit goodwill and indefinite-lived trademark intangible asset could occur in the future. Management performed a sensitivity analysis on the impairment models used to test the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. In doing so, management determined that individual changes of either a 20 % reduction in the annual growth assumption for earnings before interest, taxes, depreciation and amortization (“EBITDA”) used in the projections, or a 100 basis point increase in the discount rate used in the discounted cash flow model resulted in the estimated fair value of the reporting unit to be below its carrying value, which would result in goodwill impairment. Management also determined that individual changes of either a 10 % decrease in the annual growth rate assumption for revenues used in the projections, or a 50 basis point increase in the discount rate used in the relief-from-royalty model resulted in the estimated fair value of the indefinite-lived trademark intangible asset to be below its carrying value, which would result in impairment. Timberland PRO Reporting Unit Impairment Analysis In conjunction with VF's annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of Fiscal 2024, management performed a VF Corporation Fiscal 2024 Form 10-K F-49 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 quantitative impairment analysis of the Timberland PRO reporting unit goodwill. The decision to bypass the optional qualitative impairment assessment and proceed directly to a quantitative impairment analysis was based on current year declines in revenue and segment profit and reductions to recent financial projections. Based on the analysis, management concluded the Timberland PRO reporting unit goodwill was not impaired. For goodwill, the estimated fair value of the reporting unit exceeded the carrying value by 17 % . The carrying value of the Timberland PRO reporting unit goodwill at the testing date was $ 51.5 million. The Timberland PRO reporting unit is included in the Work reportable segment. Management's revenue and profitability forecasts used in the Timberland PRO reporting unit valuation considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors. Assumptions used in the valuation were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the quantitative analysis of the Timberland PRO reporting unit include: • Financial projections and future cash flows, including the current year that considered actual results lower than previous internal forecasts, with recovery expected to begin next fiscal year driven by revenue growth and improved profitability throughout the forecast period that reflects the long-term strategy for the business and is in-line with historical financial results, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rate assumption consistent with that used in the Timberland reporting unit analysis; and, • Market-based discount rates. The valuation model used by management in the impairment testing assumes recovery from the recent downturn in the brand's operating results and the return to revenue growth and improved profitability over the projection period. If the brand is unable to achieve the financial projections, an impairment of the reporting unit goodwill could occur in the future. Management performed a sensitivity analysis on the impairment model used to test the Timberland PRO reporting unit goodwill. In doing so, management determined that individual changes of either a 20 % reduction in the annual growth assumption for EBITDA used in the projections, or a 200 basis point increase in the discount rate used in the discounted cash flow model resulted in the estimated fair value of the reporting unit to be below its carrying value, which would result in goodwill impairment. Altra Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis In conjunction with VF's annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of Fiscal 2024, management performed a quantitative impairment analysis of the Altra reporting unit goodwill and indefinite-lived trademark intangible asset. The decision to bypass the optional qualitative impairment assessment and proceed directly to a quantitative impairment analysis was based on results from management's prior testing, combined with recent actual segment profit margins lower than previous internal forecasts. Based on the analysis, management concluded the Altra reporting unit goodwill and indefinite-lived trademark intangible asset were not impaired. For goodwill, the estimated fair value of the reporting unit exceeded the carrying value by 15 % . The estimated fair value of the indefinite-lived trademark intangible asset exceeded its carrying value by a significant amount . The carrying values of the Altra reporting unit goodwill and indefinite-lived trademark intangible asset at the testing date were $ 61.7 million and $ 46.4 million , respectively. The Altra reporting unit is included in the Outdoor reportable segment. Management's revenue and profitability forecasts used in the Altra reporting unit and indefinite-lived trademark intangible asset valuations considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the quantitative analysis of the Altra reporting unit and indefinite-lived trademark intangible asset include: • Financial projections and future cash flows, including a base year that considered recent actual results lower than previous internal forecasts, with consistent revenue growth and improved profitability throughout the forecast period that reflects the long-term strategy for the business, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rates based on market data as well as active license agreements for other VF brands; and, • Market-based discount rates. The valuation model used by management in the impairment testing assumes recovery from the recent downturn in the brand's operating results and the return to revenue growth and improved profitability over the projection period. If the brand is unable to achieve the financial projections, an impairment of the reporting unit goodwill or indefinite-lived trademark intangible asset could occur in the future. Management performed a sensitivity analysis on the impairment model used to test the Altra reporting unit goodwill. In doing so, management determined that individual changes of either a 10 % reduction in the annual growth assumption for EBITDA used in F-50 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 the projections, or a 200 basis point increase in the discount rate used in the discounted cash flow model resulted in the estimated fair value of the reporting unit to be below its carrying value, which would result in goodwill impairment. Smartwool Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis In conjunction with VF's annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of Fiscal 2024, management performed a quantitative impairment analysis of the Smartwool reporting unit goodwill and indefinite-lived trademark intangible asset. The decision to bypass the optional qualitative impairment assessment and proceed directly to a quantitative impairment analysis was based on current year declines in revenue and segment profit and reductions to recent financial projections, combined with recent actual segment profit margins lower than previous internal forecasts. Based on the analysis, management concluded the Smartwool reporting unit goodwill and indefinite-lived trademark intangible asset were not impaired. For goodwill, the estimated fair value of the reporting unit exceeded the carrying value by a significant amount . The estimated fair value of the indefinite-lived trademark intangible asset also exceeded its carrying value by a significant amount . The carrying values of the Smartwool reporting unit goodwill and indefinite-lived trademark intangible asset at the testing date were $ 53.5 million and $ 75.4 million , respectively. The Smartwool reporting unit is included in the Outdoor reportable segment. Management's revenue and profitability forecasts used in the Smartwool reporting unit and indefinite-lived trademark intangible asset valuations considered recent and historical performance, strategic initiatives, industry trends and macroeconomic factors. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the quantitative analysis of the Smartwool reporting unit and indefinite-lived trademark intangible asset include: • Financial projections and future cash flows, including a base year that considered recent actual results lower than previous internal forecasts, continued near-term weakness in the wholesale channel, moderate revenue growth and improved profitability throughout the forecast period that reflects the long-term strategy for the business, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rates based on market data as well as active license agreements for other VF brands; and, • Market-based discount rates. The valuation model used by management in the impairment testing assumes recovery from the recent downturn in the brand's operating results and the return to revenue growth and improved profitability over the projection period. If the brand is unable to achieve the financial projections, an impairment of the reporting unit goodwill or indefinite-lived trademark intangible asset could occur in the future. Indefinite-Lived Intangible Assets - Significant Assumptions The impairment testing of indefinite-lived trademark intangible assets during Fiscal 2024 used significant unobservable inputs to estimate fair values. The discount rates used in the testing ranged from 12.0 % to 18.5 %, with a weighted average of 14.2 % based on relative fair value. The royalty rates used in the testing ranged from 4.0 % to 10.0 %, with a weighted average of 7.0 % based on relative fair value. The long-term revenue growth rates used in the testing ranged from 2.0 % to 3.5 %, with a weighted average of 2.3 % based on relative fair value. Other Reporting Units and Indefinite-Lived Intangible Assets - Qualitative Impairment Analysis For the remaining reporting units and indefinite-lived intangible assets, VF elected to perform a qualitative assessment during the annual goodwill and indefinite-lived intangible asset impairment testing, as of the beginning of the fourth quarter of Fiscal 2024, to determine whether it was more likely than not that the goodwill and indefinite-lived trademark intangible assets in those reporting units were impaired. The carrying values of the reporting unit goodwill and indefinite-lived trademark intangible assets subject to qualitative assessment at the testing date were $ 443.5 million and $ 522.3 million, respectively. In this qualitative assessment, VF considered relevant events and circumstances for each reporting unit, including (i) current year results and performance versus management's plans, (ii) financial outlook based on the latest internal financial plan, (iii) changes in the reporting unit carrying value since prior year and the amounts relative to the size of the respective business, (iv) industry and market conditions in which the reporting unit operates, (v) macroeconomic conditions, including discount rate and foreign exchange rate changes, and (vi) changes in products or services offered by the reporting unit. If applicable, performance in recent years was compared to forecasts included in prior valuations. Based on the results of the qualitative assessment, VF concluded it was more likely than not that the carrying values of the goodwill and indefinite-lived trademark intangible assets were less than their fair values, and that further quantitative testing was not necessary. Fiscal 2023 Goodwill and Intangible Asset Impairment Testing Supreme Reporting Unit and Indefinite-Lived Intangible Asset Impairment Analysis During the second quarter of Fiscal 2023, due to continued increases in the federal funds rate and strengthening of the U.S. dollar relative to other currencies, management performed a quantitative impairment analysis of both the Supreme reporting unit goodwill and the indefinite-lived trademark intangible asset. The carrying values of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset at the testing date were $ 1.21 billion and $ 1.19 billion, respectively. As a result of VF Corporation Fiscal 2024 Form 10-K F-51 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 the interim impairment testing performed, VF recorded impairment charges of $ 229.0 million and $ 192.9 million related to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, respectively, in the Consolidated Statement of Operations for the year ended March 2023. The impairment related to an increase in the market-based discount rates used in the valuations and the negative impact of foreign currency exchange rate changes on financial projections. Management’s revenue and profitability forecasts used in the Supreme reporting unit and indefinite-lived trademark intangible asset valuations considered recent and historical performance, strategic initiatives and industry trends. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the interim quantitative analysis of the Supreme reporting unit and indefinite-lived trademark intangible asset included: • Financial projections and future cash flows reflecting results lower than prior forecasts primarily driven by the negative impacts of foreign currency exchange rate changes. The projections assumed revenue growth and profitability improvement throughout the forecast period reflecting the long-term strategy for the business which was largely unchanged from the business combination valuation, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rates based on market data as well as active license agreements with similar VF brands; • Market-based discount rates reflecting increases in the federal funds rate; and, • Market approach reflecting lower recent historical financial measures for Supreme and valuation multiples. In conjunction with VF's annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of Fiscal 2023, management performed a quantitative impairment analysis of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset. T he decision to bypass the optional qualitative impairment assessment and proceed directly to a quantitative impairment analysis was based on the recent impairment results from the interim quantitative analysis, weakness in recent Supreme financial performance including the results from the latest season and the overall significance of the related assets. As a result of the annual impairment testing, VF recorded additional impairment charges of $ 165.1 million and $ 148.0 million to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, respectively, in the Consolidated Statement of Operations for the year ended March 2023. The remaining carrying values of the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset, after the impairment charges, were $ 825.9 million and $ 852.0 million, respectively. The impairment related to lower financial projections and increased risk of achieving management's forecasts. The Supreme reporting unit is included in the Active reportable segment. Management's revenue and profitability forecasts used in the Supreme reporting unit and indefinite-lived trademark intangible asset valuations considered historical performance, strategic initiatives and industry trends. Assumptions used in the valuations were similar to those that would be used by market participants performing independent valuations of the business. Key assumptions developed by management and used in the quantitative analysis of the Supreme reporting unit and indefinite-lived trademark intangible asset included: • Financial pro jections and future cash flows, including a base year reflecting actual results lower than forecasts used in the second quarter of Fiscal 2023, primarily driven by weakness in the North America region, and a longer recovery timeline, revenue growth and profitability improvement throughout the forecast period that reflects the long-term strategy for the business, including geographic expansion, and terminal growth rates based on the expected long-term growth rate of the business; • Tax rates based on the statutory rates for the countries in which the brand operates and the related intellectual property is domiciled; • Royalty rates based on market data as well as active license agreements with similar VF brands; • Market-based discount rates, including consideration of additional risk of achievement of the financial projections based on recent financial performance; and, • Market approach reflecting lower recent historical financial measures for Supreme. Methodology and Management's Use of Estimates and Assumptions Our impairment testing of goodwill and indefinite-lived trademark intangible assets utilizes significant unobservable inputs (Level 3) to determine fair value. The fair value of reporting units for goodwill impairment testing is determined using a combination of two valuation methods: an income approach and a market approach. The income approach is based on projected future (debt-free) cash flows that are discounted to present value. The appropriate discount rate is based on the reporting unit’s weighted average cost of capital (“WACC”) that takes market participant assumptions into consideration. For the market approach, management uses both the guideline company and similar transaction methods. The guideline company method analyzes market multiples of revenues and EBITDA for a group of comparable public companies. The market multiples used in the valuation are based on the relative strengths and weaknesses of the reporting unit compared to the selected guideline companies. Under the similar transactions method, valuation multiples are calculated utilizing actual transaction prices and revenue/EBITDA data from F-52 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 target companies deemed similar to the reporting unit. Management typically assigns more weight to the income-based valuation method. Management uses the relief-from-royalty method to value indefinite-lived trademark intangible assets. Under this method, revenues expected to be generated by the trademark are multiplied by a selected royalty rate. The royalty rate is selected based on consideration of (i) royalty rates included in active license agreements, if applicable, (ii) royalty rates received by market participants in the apparel or footwear industry, and (iii) the current performance of the reporting unit. The estimated after-tax royalty revenue stream is then discounted to present value using the reporting unit’s WACC adjusted, as appropriate, to factor in the risk of the intangible asset. Management’s revenue and profitability forecasts used in the reporting unit and intangible asset valuations were developed in conjunction with management’s forecast and plan review, which includes management's overall assessment of events and circumstances, including macroeconomic conditions and industry and market considerations, and the resulting outlook for the businesses, considering recent performance, trends and strategic initiatives. Assumptions used in the valuations are similar to those that would be used by market participants performing independent valuations of these businesses. Management's Use of Estimates and Assumptions Management made its estimates based on information available as of the date of our assessments, using assumptions we believe market participants would use in performing an independent valuation of the business. Although management believes the estimates and assumptions used in the impairment testing are reasonable and appropriate, it is possible that VF's assumptions and conclusions regarding impairment or recoverability of goodwill or indefinite-lived trademark intangible assets in any reporting unit could change in future periods. There can be no assurance the estimates and assumptions, particularly our long-term financial projections, used in our goodwill and indefinite-lived intangible asset impairment testing will prove to be accurate predictions of the future, if, for example, (i) the businesses do not perform as projected, (ii) overall economic conditions in Fiscal 2025 or future years vary from current assumptions (including changes in discount rates, royalty rates and foreign currency exchange rates), (iii) business conditions or strategies change from current assumptions, including loss of major customers or channels, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or actual sales transactions of comparable companies, were to decline, resulting in lower multiples of revenues and EBITDA. A future impairment charge of goodwill or indefinite-lived intangible assets could have a material effect on VF’s consolidated financial position and results of operations. NOTE 25 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Summary of Derivative Financial Instruments VF’s outstanding derivative financial instruments include foreign currency exchange forward contracts and interest rate swap contracts. Although derivatives meet the criteria for hedge accounting at the inception of the hedging relationship, a limited number of derivative contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes. The notional amounts of all outstanding foreign currency exchange forward contracts were $ 3.1 billion and $ 3.4 billion at March 2024 and 2023, respectively, consisting primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Mexican peso, South Korean won, Swedish krona, Polish zloty, Chinese renminbi and Japanese yen. These derivative contracts have maturities up to 20 months. The notional amount of VF's outstanding interest rate swap contracts was $ 500.0 million at March 2024 and 2023 . These contracts hedge the cash flow risk of interest payments on VF's variable-rate DDTL Agreement. The following table presents outstanding derivatives on an individual contract basis: Fair Value of Derivatives with Unrealized Gains Fair Value of Derivatives with Unrealized Losses (In thousands) March 2024 March 2023 March 2024 March 2023 Derivatives Designated as Hedging Instruments: Foreign exchange contracts $ 29,657 $ 46,752 $ ( 39,639 ) $ ( 71,052 ) Interest rate contracts 2,335 — — ( 1,140 ) Total derivatives designated as hedging instruments 31,992 46,752 ( 39,639 ) ( 72,192 ) Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts 556 2,936 ( 595 ) ( 461 ) Total derivatives $ 32,548 $ 49,688 $ ( 40,234 ) $ ( 72,653 ) VF Corporation Fiscal 2024 Form 10-K F-53 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 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 on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets as of March 2024 and 2023 would be adjusted from the current gross presentation to the net amounts as detailed in the following table: March 2024 March 2023 (In thousands) Derivative Asset Derivative Liability Derivative Asset Derivative Liability Gross amounts presented in the Consolidated Balance Sheets $ 32,548 $ ( 40,234 ) $ 49,688 $ ( 72,653 ) Gross amounts not offset in the Consolidated Balance Sheets ( 11,322 ) 11,322 ( 26,470 ) 26,470 Net amounts $ 21,226 $ ( 28,912 ) $ 23,218 $ ( 46,183 ) Derivatives are classified as current or noncurrent based on maturity dates, as follows: (In thousands) March 2024 March 2023 Derivative Instruments Balance Sheet Location Foreign exchange contracts Other current assets (Note 6) $ 26,366 $ 48,132 Foreign exchange contracts Accrued liabilities (Note 14) ( 35,578 ) ( 59,995 ) Foreign exchange contracts Other assets (Note 11) 3,847 1,556 Foreign exchange contracts Other liabilities (Note 16) ( 4,656 ) ( 11,518 ) Interest rate contracts Other current assets (Note 6) 2,335 — Interest rate contracts Other liabilities (Note 16) — ( 1,140 ) Cash Flow Hedges VF primarily uses foreign currency exchange forward contracts to hedge a portion of the exchange risk for its forecasted sales, inventory purchases, operating costs and certain intercompany transactions, including sourcing and management fees and royalties. The Company also uses interest rate swap contracts to hedge against a portion of the exposure related to its interest payments on its variable-rate debt. The effects of cash flow hedging included in VF’s Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Operations are summarized as follows: (In thousands) Cash Flow Hedging Relationships Gain (Loss) on Derivatives Recognized in Accumulated OCL Year Ended March 2024 2023 2022 Foreign exchange contracts $ ( 15,538 ) $ 54,546 $ 71,494 Interest rate contracts 7,605 ( 1,013 ) — Total $ ( 7,933 ) $ 53,533 $ 71,494 Gain (Loss) Reclassified from Accumulated OCL into Net Income (Loss) (In thousands) Year Ended March Cash Flow Hedging Relationships Location of Gain (Loss) 2024 2023 2022 Foreign exchange contracts Net revenues $ ( 5,004 ) $ ( 6,843 ) $ ( 27,382 ) Foreign exchange contracts Cost of goods sold 15,703 120,438 ( 26,346 ) Foreign exchange contracts Selling, general and administrative expenses 3,437 6,695 ( 487 ) Foreign exchange contracts Other income (expense), net ( 253 ) ( 10,365 ) ( 219 ) Interest rate contracts Interest expense 4,238 235 108 Total $ 18,121 $ 110,160 $ ( 54,326 ) F-54 VF Corporation Fiscal 2024 Form 10-K Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 Derivative Contracts Not Designated as Hedge s VF uses foreign currency exchange contracts to manage foreign currency exchange risk on third-party and intercompany accounts receivable and payable, as well as third-party and intercompany borrowings and interest payments. These contracts are not designated as hedges, and are recorded at fair value in the Consolidated Balance Sheets. Changes in the fair values of these instruments are recognized directly in earnings. 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. D uring the year ended March 2024, certain derivative contracts were de-designated as the related hedged forecasted transactions were no longer deemed probable of occurring. Accordingly, the Company reclassified amounts from accumulated OCL and recognized an $ 8.8 million loss in cost of goods sold during the year ended March 2024. Other Derivative Information At March 2024, accumulated OCL include d $ 29.8 million of pre-tax net deferred losses for foreign currency exchange contracts and a $ 2.3 million pre-tax deferred gain for interest rate swap contracts, which are expected to be reclassified to earnings during the next 12 months. The amounts ultimately reclassified to earnings will depend on exchange rates and interest rates in effect when outstanding derivative contracts are settled. Net Investment Hedge The Company has designated its euro-denominated fixed-rate notes and euro commercial paper borrowings, which represented € 2.0 billion in aggregate principal as of March 2024 , 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 OCL as an offset to the foreign currency translation adjustments on the hedged investments. During the years ended March 2024, 2023 and 2022, the Company recognized after-tax gains of $ 21.6 million, $ 5.2 million and $ 99.5 million, respectively, in other comprehensive income (loss) related to the net investment hedge transaction. Any amounts deferred in accumulated OCL will remain until the hedged investment is sold or substantially liquidated. NOTE 26 — SUPPLEMENTAL CASH FLOW INFORMATION Year Ended March (In thousands) 2024 2023 2022 Income taxes paid, net of refunds (a)(b) $ 349,978 $ 1,113,940 $ 263,733 Interest paid, net of amounts capitalized 234,417 160,272 123,476 Noncash transactions: Property, plant and equipment expenditures included in accounts payable or accrued liabilities 15,903 44,151 45,235 Computer software costs included in accounts payable or accrued liabilities 17,080 28,519 33,997 (a) The year ended March 2023 included the payment related to the IRS dispute associated with VF's acquisition of The Timberland Company in September 2011. Refer to Note 20 for additional information. (b) Includes both continuing and discontinued operations. NOTE 27 — RESTRUCTURING The Company incurs restructuring charges related to strategic initiatives and cost optimization of business activities. Beginning in the third quarter of Fiscal 2024, restructuring costs include charges related to Reinvent, a transformation program to enhance focus on brand-building and to improve operating performance and allow VF to achieve its full potential. The Company currently estimates it will incur approximately $ 130.0 million to $ 150.0 million in restructuring and restructuring-related charges in connection with Reinvent, and that substantially all actions will be completed by the end of Fiscal 2025. Of the total estimated charges, the Company anticipates that more than one-half will relate to severance and employee-related benefits and the remainder will relate to asset impairments and other non-cash write-downs. Cash payments are generally expected to be paid within one year of charges incurred. During the year ended March 2024, VF recorded $ 108.7 million of charges in connection with Reinvent, of which $ 69.3 million related to severance and employee-related benefits and $ 39.4 million related to non-cash asset write-downs. As of March 2024, $ 19.0 million of cash payments related to the Reinvent charges have been made. During the years ended March 2024, 2023 and 2022, VF recognized $ 110.7 million, $ 75.7 million and $ 20.0 million, respectively, of total restructuring charges related to approved initiatives. Of the restructuring charges recognized in the year ended March 2024, $ 106.2 million were reflected in selling, general and administrative expenses and $ 4.5 million in cost of goods sold. Of the restructuring charges recognized in the year ended March 2023, $ 70.9 million were reflected in selling, VF Corporation Fiscal 2024 Form 10-K F-55 Table of Contents VF CORPORATION Notes to Consolidated Financial Statements March 2024 general and administrative expenses and $ 4.8 million in cost of goods sold. Of the restructuring charges recognized in the year ended March 2022, $ 18.3 million were reflected in selling, general and administrative expenses and $ 1.7 million in cost of goods sold. The Company has not recognized any significant incremental costs related to the accruals for the year ended March 2023 or prior periods. Of the total restructuring accrual at March 2024, $ 52.5 million is expected to be paid out within the next 12 months and is classified within accrued liabilities (Note 14). The remaining $ 8.2 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: Year Ended March (In thousands) 2024 2023 2022 Severance and employee-related benefits $ 70,008 $ 57,433 $ 12,283 Asset impairments and write-downs 39,386 — — Accelerated depreciation — 8,016 7,016 Contract termination and other 1,326 10,289 703 Total restructuring charges $ 110,720 $ 75,738 $ 20,002 Restructuring costs by business segment are as follows: Year Ended March (In thousands) 2024 2023 2022 Outdoor $ 242 $ 1,088 $ 4,523 Active 434 1,478 1,008 Work — 9 2,315 Corporate and other 110,044 73,163 12,156 Total $ 110,720 $ 75,738 $ 20,002 The activity in the restructuring accrual was as follows: (In thousands) Severance Other Total Accrual at March 2022 $ 25,640 $ 1,211 $ 26,851 Charges 57,433 5,190 62,623 Cash payments and settlements ( 41,338 ) ( 345 ) ( 41,683 ) Adjustments to accruals ( 3,236 ) 40 ( 3,196 ) Impact of foreign currency 222 449 671 Accrual at March 2023 38,721 6,545 45,266 Charges 70,008 — 70,008 Cash payments and settlements ( 42,684 ) ( 5,923 ) ( 48,607 ) Adjustments to accruals ( 5,660 ) ( 287 ) ( 5,947 ) Impact of foreign currency ( 54 ) 10 ( 44 ) Accrual at March 2024 $ 60,331 $ 345 $ 60,676 NOTE 28 — SUBSEQUENT EVENT On May 14, 2024, VF’s Board of Directors declared a quarterly cash dividend of $ 0.09 per share, payable on June 20, 2024 to shareholders of record on June 10, 2024. F-56 VF Corporation Fiscal 2024 Form 10-K Table of Contents Schedule II — Valuation and Qualifying Accounts COL. A COL. B COL. C COL. D COL. E ADDITIONS Description Balance at Beginning of Period (1) Charged to Costs and Expenses (2) Charged to Other Accounts Deductions Balance at End of Period (In thousands) Year Ended March 2024 Allowance for doubtful accounts $ 28,075 $ 11,170 $ — $ 12,876 (a) $ 26,369 Valuation allowance for deferred income tax assets 424,932 — 11,115 (b) — 436,047 Year Ended March 2023 Allowance for doubtful accounts 27,959 3,532 — 3,416 (a) 28,075 Valuation allowance for deferred income tax assets 616,533 — — 191,601 (c) 424,932 Year Ended March 2022 Allowance for doubtful accounts 33,654 ( 716 ) — 4,979 (a) 27,959 Valuation allowance for deferred income tax assets 500,601 — 115,932 (b) — 616,533 (a) Deductions include accounts written off, net of recoveries, the effects of foreign currency translation and reclassifications. (b) Additions primarily related to circumstances where it is more likely than not that deferred income tax assets will not be realized and the effects of foreign currency translation. (c) Deductions primarily related to changes in circumstances which decrease the amount of deferred income tax assets that will, more likely than not, be realized and the effect of foreign currency translation. VF Corporation Fiscal 2024 Form 10-K F-57