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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Pennsylvania
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23-1180120
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer
identification number)
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Page
No.
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September 2017
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December 2016
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September 2016
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||||||
ASSETS
|
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|
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||||||
Current assets
|
|
|
|
|
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||||||
Cash and equivalents
|
$
|
1,546,128
|
|
|
$
|
1,227,862
|
|
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$
|
737,825
|
|
Accounts receivable, less allowance for doubtful accounts of: September 2017 – $21,469; December 2016 – $20,539; September 2016 – $22,654
|
1,851,430
|
|
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1,161,393
|
|
|
1,736,521
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|
|||
Inventories
|
1,909,563
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|
1,471,300
|
|
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1,897,546
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|||
Other current assets
|
319,991
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|
|
296,698
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|
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293,904
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|||
Current assets of discontinued operations
|
315
|
|
|
135,845
|
|
|
153,227
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|||
Total current assets
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5,627,427
|
|
|
4,293,098
|
|
|
4,819,023
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|
|||
Property, plant and equipment, net
|
921,217
|
|
|
926,010
|
|
|
935,015
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|||
Intangible assets, net
|
1,936,522
|
|
|
1,797,271
|
|
|
1,925,955
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|
|||
Goodwill
|
1,642,873
|
|
|
1,708,323
|
|
|
1,769,838
|
|
|||
Other assets
|
746,882
|
|
|
929,190
|
|
|
904,742
|
|
|||
Other assets of discontinued operations
|
—
|
|
|
85,395
|
|
|
88,536
|
|
|||
Total assets
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$
|
10,874,921
|
|
|
$
|
9,739,287
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|
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$
|
10,443,109
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
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||||||
Current liabilities
|
|
|
|
|
|
||||||
Short-term borrowings
|
$
|
1,985,287
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|
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$
|
26,029
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|
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$
|
737,660
|
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Current portion of long-term debt
|
253,831
|
|
|
253,689
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|
|
3,643
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|
|||
Accounts payable
|
554,107
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|
|
642,970
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|
|
550,427
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|||
Accrued liabilities
|
1,028,170
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|
|
827,507
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860,383
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|||
Current liabilities of discontinued operations
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—
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35,205
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|
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25,083
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|||
Total current liabilities
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3,821,395
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1,785,400
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2,177,196
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Long-term debt
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2,144,221
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2,039,180
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2,347,122
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|||
Other liabilities
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971,885
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977,076
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1,049,353
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|||
Other liabilities of discontinued operations
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—
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(3,290
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)
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(3,339
|
)
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|||
Commitments and contingencies
|
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||||||
Total liabilities
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6,937,501
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4,798,366
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5,570,332
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|||
Stockholders’ equity
|
|
|
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||||||
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at September 2017, December 2016 or September 2016
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—
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—
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—
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Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at September 2017 – 394,502,698; December 2016 – 414,012,954; September 2016 – 413,682,259
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98,626
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103,503
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103,421
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Additional paid-in capital
|
3,456,661
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3,333,423
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3,313,077
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|||
Accumulated other comprehensive loss
|
(914,896
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)
|
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(1,041,463
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)
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(998,020
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)
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|||
Retained earnings
|
1,297,029
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2,545,458
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|
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2,454,299
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|||
Total stockholders’ equity
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3,937,420
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4,940,921
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4,872,777
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|||
Total liabilities and stockholders’ equity
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$
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10,874,921
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$
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9,739,287
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$
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10,443,109
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Three Months Ended September
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Nine Months Ended September
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||||||||||||
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2017
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2016
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2017
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2016
|
||||||||
Net sales
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$
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3,481,202
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$
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3,298,484
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$
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8,370,183
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$
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8,200,228
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Royalty income
|
27,616
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29,232
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79,893
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|
82,371
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Total revenues
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3,508,818
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3,327,716
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8,450,076
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8,282,599
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||||
Costs and operating expenses
|
|
|
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||||||||
Cost of goods sold
|
1,751,748
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1,693,071
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4,225,444
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4,229,018
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Selling, general and administrative expenses
|
1,168,470
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1,026,398
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3,176,536
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2,939,115
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|
||||
Impairment of goodwill
|
104,651
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|
—
|
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|
104,651
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|
|
—
|
|
||||
Total costs and operating expenses
|
3,024,869
|
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2,719,469
|
|
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7,506,631
|
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7,168,133
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|
||||
Operating income
|
483,949
|
|
|
608,247
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943,445
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1,114,466
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||||
Interest income
|
4,571
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|
2,215
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|
11,672
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|
6,459
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|
||||
Interest expense
|
(27,108
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)
|
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(24,783
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)
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(75,004
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)
|
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(70,441
|
)
|
||||
Other income (expense), net
|
(332
|
)
|
|
(1,097
|
)
|
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(2,052
|
)
|
|
1,696
|
|
||||
Income from continuing operations before income taxes
|
461,080
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|
|
584,582
|
|
|
878,061
|
|
|
1,052,180
|
|
||||
Income taxes
|
74,316
|
|
|
99,358
|
|
|
161,753
|
|
|
188,528
|
|
||||
Income from continuing operations
|
386,764
|
|
|
485,224
|
|
|
716,308
|
|
|
863,652
|
|
||||
Income (loss) from discontinued operations, net of tax
|
(624
|
)
|
|
13,265
|
|
|
(11,116
|
)
|
|
(53,879
|
)
|
||||
Net income
|
$
|
386,140
|
|
|
$
|
498,489
|
|
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$
|
705,192
|
|
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$
|
809,773
|
|
Earnings (loss) per common share - basic
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.98
|
|
|
$
|
1.17
|
|
|
$
|
1.79
|
|
|
$
|
2.07
|
|
Discontinued operations
|
—
|
|
|
0.03
|
|
|
(0.03
|
)
|
|
(0.13
|
)
|
||||
Total earnings per common share - basic
|
$
|
0.98
|
|
|
$
|
1.21
|
|
|
$
|
1.76
|
|
|
$
|
1.94
|
|
Earnings (loss) per common share - diluted
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.97
|
|
|
$
|
1.16
|
|
|
$
|
1.77
|
|
|
$
|
2.04
|
|
Discontinued operations
|
—
|
|
|
0.03
|
|
|
(0.03
|
)
|
|
(0.13
|
)
|
||||
Total earnings per common share - diluted
|
$
|
0.97
|
|
|
$
|
1.19
|
|
|
$
|
1.74
|
|
|
$
|
1.91
|
|
Cash dividends per common share
|
$
|
0.42
|
|
|
$
|
0.37
|
|
|
$
|
1.26
|
|
|
$
|
1.11
|
|
|
Three Months Ended September
|
|
Nine Months Ended September
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
386,140
|
|
|
$
|
498,489
|
|
|
$
|
705,192
|
|
|
$
|
809,773
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation and other
|
|
|
|
|
|
|
|
||||||||
Gains (losses) arising during the period
|
53,481
|
|
|
4,154
|
|
|
188,649
|
|
|
48,222
|
|
||||
Less income tax effect
|
11,764
|
|
|
508
|
|
|
37,966
|
|
|
(604
|
)
|
||||
Defined benefit pension plans
|
|
|
|
|
|
|
|
||||||||
Amortization of net deferred actuarial losses
|
10,030
|
|
|
16,303
|
|
|
31,414
|
|
|
48,928
|
|
||||
Amortization of deferred prior service costs
|
643
|
|
|
645
|
|
|
2,000
|
|
|
1,937
|
|
||||
Current year actuarial gains (losses) and curtailment loss
|
—
|
|
|
—
|
|
|
20,996
|
|
|
—
|
|
||||
Less income tax effect
|
(3,743
|
)
|
|
(6,541
|
)
|
|
(19,872
|
)
|
|
(19,561
|
)
|
||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||||
Gains (losses) arising during the period
|
(51,147
|
)
|
|
9,571
|
|
|
(117,580
|
)
|
|
32,837
|
|
||||
Less income tax effect
|
(679
|
)
|
|
(3,675
|
)
|
|
9,744
|
|
|
(12,506
|
)
|
||||
Reclassification to net income for (gains) losses realized
|
(4,609
|
)
|
|
(28,458
|
)
|
|
(32,419
|
)
|
|
(87,777
|
)
|
||||
Less income tax effect
|
(39
|
)
|
|
10,928
|
|
|
5,669
|
|
|
33,726
|
|
||||
Other comprehensive income (loss)
|
15,701
|
|
|
3,435
|
|
|
126,567
|
|
|
45,202
|
|
||||
Comprehensive income
|
$
|
401,841
|
|
|
$
|
501,924
|
|
|
$
|
831,759
|
|
|
$
|
854,975
|
|
|
Nine Months Ended September
|
||||||
|
2017
|
|
2016
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
705,192
|
|
|
$
|
809,773
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
||||
Impairment of goodwill
|
104,651
|
|
|
—
|
|
||
Depreciation and amortization
|
207,590
|
|
|
205,491
|
|
||
Stock-based compensation
|
57,709
|
|
|
54,933
|
|
||
Provision for doubtful accounts
|
11,396
|
|
|
16,193
|
|
||
Pension expense in excess of contributions
|
17,601
|
|
|
33,866
|
|
||
Loss on sale of businesses
|
4,936
|
|
|
104,357
|
|
||
Other, net
|
15,187
|
|
|
22,466
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(625,574
|
)
|
|
(501,186
|
)
|
||
Inventories
|
(390,419
|
)
|
|
(443,115
|
)
|
||
Accounts payable
|
(111,276
|
)
|
|
(116,800
|
)
|
||
Income taxes
|
(77,125
|
)
|
|
(141,262
|
)
|
||
Accrued liabilities
|
126,247
|
|
|
56,055
|
|
||
Other assets and liabilities
|
(39,432
|
)
|
|
(53,574
|
)
|
||
Cash provided by operating activities
|
6,683
|
|
|
47,197
|
|
||
Investing activities
|
|
|
|
||||
Proceeds from sale of businesses, net of cash sold
|
213,494
|
|
|
115,983
|
|
||
Capital expenditures
|
(124,393
|
)
|
|
(129,947
|
)
|
||
Software purchases
|
(53,451
|
)
|
|
(31,843
|
)
|
||
Other, net
|
(10,558
|
)
|
|
(4,997
|
)
|
||
Cash provided (used) by investing activities
|
25,092
|
|
|
(50,804
|
)
|
||
Financing activities
|
|
|
|
||||
Net increase in short-term borrowings
|
1,959,335
|
|
|
287,759
|
|
||
Payments on long-term debt
|
(2,749
|
)
|
|
(12,385
|
)
|
||
Payment of debt issuance costs
|
—
|
|
|
(6,772
|
)
|
||
Proceeds from long-term debt
|
—
|
|
|
951,782
|
|
||
Purchases of treasury stock
|
(1,200,356
|
)
|
|
(1,000,230
|
)
|
||
Cash dividends paid
|
(502,993
|
)
|
|
(462,406
|
)
|
||
Proceeds from issuance of Common Stock, net of shares withheld for taxes
|
48,144
|
|
|
40,667
|
|
||
Cash provided (used) by financing activities
|
301,381
|
|
|
(201,585
|
)
|
||
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash
|
(13,914
|
)
|
|
1,018
|
|
||
Net change in cash, cash equivalents and restricted cash
|
319,242
|
|
|
(204,174
|
)
|
||
Cash, cash equivalents and restricted cash – beginning of year
|
1,231,026
|
|
|
946,396
|
|
||
Cash, cash equivalents and restricted cash – end of period
|
$
|
1,550,268
|
|
|
$
|
742,222
|
|
|
|
|
|
||||
Balances per Consolidated Balance Sheets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,546,128
|
|
|
$
|
737,825
|
|
Other current assets
|
3,309
|
|
|
3,686
|
|
||
Other assets
|
831
|
|
|
711
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
1,550,268
|
|
|
$
|
742,222
|
|
|
|
|
|
|
Additional Paid-in Capital
|
|
Accumulated
Other Comprehensive Loss
|
|
|
|||||||||
|
Common Stock
|
|
|
|
Retained Earnings
|
|||||||||||||
|
Shares
|
|
Amounts
|
|
|
|
||||||||||||
Balance, December 2015
|
426,614,274
|
|
|
$
|
106,654
|
|
|
$
|
3,192,675
|
|
|
$
|
(1,043,222
|
)
|
|
$
|
3,128,731
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,074,106
|
|
||||
Dividends on Common Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(635,994
|
)
|
||||
Purchase of treasury stock
|
(15,932,075
|
)
|
|
(3,983
|
)
|
|
—
|
|
|
—
|
|
|
(996,485
|
)
|
||||
Stock-based compensation, net
|
3,330,755
|
|
|
832
|
|
|
140,748
|
|
|
—
|
|
|
(24,900
|
)
|
||||
Foreign currency translation and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(76,410
|
)
|
|
—
|
|
||||
Defined benefit pension plans
|
—
|
|
|
—
|
|
|
—
|
|
|
69,498
|
|
|
—
|
|
||||
Derivative financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
8,671
|
|
|
—
|
|
||||
Balance, December 2016
|
414,012,954
|
|
|
103,503
|
|
|
3,333,423
|
|
|
(1,041,463
|
)
|
|
2,545,458
|
|
||||
Adoption of new accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(237,764
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
705,192
|
|
||||
Dividends on Common Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(502,993
|
)
|
||||
Purchase of treasury stock
|
(22,213,162
|
)
|
|
(5,553
|
)
|
|
—
|
|
|
—
|
|
|
(1,194,803
|
)
|
||||
Stock-based compensation, net
|
2,702,906
|
|
|
676
|
|
|
123,238
|
|
|
—
|
|
|
(18,061
|
)
|
||||
Foreign currency translation and other
|
—
|
|
|
—
|
|
|
—
|
|
|
226,615
|
|
|
—
|
|
||||
Defined benefit pension plans
|
—
|
|
|
—
|
|
|
—
|
|
|
34,538
|
|
|
—
|
|
||||
Derivative financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
(134,586
|
)
|
|
—
|
|
||||
Balance, September 2017
|
394,502,698
|
|
|
$
|
98,626
|
|
|
$
|
3,456,661
|
|
|
$
|
(914,896
|
)
|
|
$
|
1,297,029
|
|
|
Three Months Ended September
|
|
Nine Months Ended September
|
||||||||||||
In thousands
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
|
$
|
6,498
|
|
|
$
|
203,696
|
|
|
$
|
160,323
|
|
|
$
|
603,651
|
|
Cost of goods sold
|
6,580
|
|
|
127,876
|
|
|
121,172
|
|
|
362,215
|
|
||||
Selling, general and administrative expenses
|
1,341
|
|
|
51,714
|
|
|
36,059
|
|
|
173,574
|
|
||||
Interest expense, net
|
(1
|
)
|
|
(21
|
)
|
|
(26
|
)
|
|
(183
|
)
|
||||
Other income (expense), net
|
—
|
|
|
7
|
|
|
—
|
|
|
3
|
|
||||
Income (loss) from discontinued operations before income taxes
|
(1,424
|
)
|
|
24,092
|
|
|
3,066
|
|
|
67,682
|
|
||||
Gain (loss) on the sale of discontinued operations before income taxes
|
411
|
|
|
(4,439
|
)
|
|
(9,506
|
)
|
|
(154,275
|
)
|
||||
Total income (loss) from discontinued operations before income taxes
|
(1,013
|
)
|
|
19,653
|
|
|
(6,440
|
)
|
|
(86,593
|
)
|
||||
Income tax (expense) benefit
(a)
|
389
|
|
|
(6,388
|
)
|
|
(4,676
|
)
|
|
32,714
|
|
||||
Income (loss) from discontinued operations, net of tax
|
$
|
(624
|
)
|
|
$
|
13,265
|
|
|
$
|
(11,116
|
)
|
|
$
|
(53,879
|
)
|
(a)
|
Income tax (expense) benefit for the nine months ended September 2017 includes
$8.6 million
of deferred tax expense related to GAAP and tax basis differences for LSG.
|
In thousands
|
September 2017
|
|
December 2016
|
|
September 2016
|
||||||
Accounts receivable, net
|
$
|
—
|
|
|
$
|
36,285
|
|
|
$
|
48,768
|
|
Inventories
|
—
|
|
|
98,025
|
|
|
102,450
|
|
|||
Other current assets
|
—
|
|
|
1,535
|
|
|
2,009
|
|
|||
Property, plant and equipment, net
|
315
|
|
|
13,640
|
|
|
14,297
|
|
|||
Intangible assets
|
—
|
|
|
42,427
|
|
|
44,833
|
|
|||
Goodwill
|
—
|
|
|
28,636
|
|
|
28,636
|
|
|||
Other assets
|
—
|
|
|
692
|
|
|
770
|
|
|||
Total assets of discontinued operations
(a)
|
$
|
315
|
|
|
$
|
221,240
|
|
|
$
|
241,763
|
|
Accounts payable
|
$
|
—
|
|
|
$
|
21,674
|
|
|
$
|
15,318
|
|
Accrued liabilities
|
—
|
|
|
13,531
|
|
|
9,765
|
|
|||
Other liabilities
|
—
|
|
|
791
|
|
|
801
|
|
|||
Deferred income tax liabilities
(b)
|
—
|
|
|
(4,081
|
)
|
|
(4,140
|
)
|
|||
Total liabilities of discontinued operations
(a)
|
$
|
—
|
|
|
$
|
31,915
|
|
|
$
|
21,744
|
|
(a)
|
Amounts at December 2016 and
September 2016
have been classified as current and long-term in the Consolidated Balance Sheets.
|
(b)
|
Deferred income tax balances reflect VF’s consolidated netting by jurisdiction.
|
In thousands
|
September 2017
|
|
December 2016
|
|
September 2016
|
||||||
Finished products
|
$
|
1,717,516
|
|
|
$
|
1,278,504
|
|
|
$
|
1,706,612
|
|
Work-in-process
|
106,120
|
|
|
97,725
|
|
|
96,727
|
|
|||
Raw materials
|
85,927
|
|
|
95,071
|
|
|
94,207
|
|
|||
Total inventories
|
$
|
1,909,563
|
|
|
$
|
1,471,300
|
|
|
$
|
1,897,546
|
|
|
|
|
|
|
|
September 2017
|
|
December 2016
|
||||||||||||
In thousands
|
|
Weighted
Average
Amortization
Period
|
|
Amortization
Method
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Net
Carrying
Amount
|
||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
|
20 years
|
|
Accelerated
|
|
$
|
265,725
|
|
|
$
|
134,246
|
|
|
$
|
131,479
|
|
|
$
|
128,422
|
|
License agreements
|
|
28 years
|
|
Accelerated
|
|
109,370
|
|
|
62,278
|
|
|
47,092
|
|
|
49,682
|
|
||||
Trademark
|
|
16 years
|
|
Straight-line
|
|
58,132
|
|
|
6,358
|
|
|
51,774
|
|
|
54,499
|
|
||||
Other
|
|
9 years
|
|
Straight-line
|
|
9,658
|
|
|
3,846
|
|
|
5,812
|
|
|
3,297
|
|
||||
Amortizable intangible assets, net
|
|
|
|
|
|
|
|
236,157
|
|
|
235,900
|
|
||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Trademarks and trade names
|
|
|
|
|
|
|
|
1,700,365
|
|
|
1,561,371
|
|
||||||||
Intangible assets, net
|
|
|
|
|
|
|
|
|
|
$
|
1,936,522
|
|
|
$
|
1,797,271
|
|
In thousands
|
Outdoor &
Action Sports
|
|
Jeanswear
|
|
Imagewear
|
|
Sportswear
|
|
Total
|
||||||||||
Balance, December 2016
|
$
|
1,310,133
|
|
|
$
|
210,765
|
|
|
$
|
30,111
|
|
|
$
|
157,314
|
|
|
$
|
1,708,323
|
|
Impairment charge
|
—
|
|
|
—
|
|
|
—
|
|
|
(104,651
|
)
|
|
(104,651
|
)
|
|||||
Currency translation
|
32,260
|
|
|
6,941
|
|
|
—
|
|
|
—
|
|
|
39,201
|
|
|||||
Balance, September 2017
|
$
|
1,342,393
|
|
|
$
|
217,706
|
|
|
$
|
30,111
|
|
|
$
|
52,663
|
|
|
$
|
1,642,873
|
|
|
Three Months Ended September
|
|
Nine Months Ended September
|
||||||||||||
In thousands
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost – benefits earned during the period
|
$
|
6,202
|
|
|
$
|
6,478
|
|
|
$
|
18,733
|
|
|
$
|
19,434
|
|
Interest cost on projected benefit obligations
|
14,730
|
|
|
16,991
|
|
|
44,254
|
|
|
51,066
|
|
||||
Expected return on plan assets
|
(23,825
|
)
|
|
(24,869
|
)
|
|
(70,977
|
)
|
|
(74,714
|
)
|
||||
Amortization of deferred amounts:
|
|
|
|
|
|
|
|
||||||||
Net deferred actuarial losses
|
10,030
|
|
|
16,303
|
|
|
31,414
|
|
|
48,928
|
|
||||
Deferred prior service costs
|
643
|
|
|
645
|
|
|
2,000
|
|
|
1,937
|
|
||||
Net periodic pension cost
|
$
|
7,780
|
|
|
$
|
15,548
|
|
|
$
|
25,424
|
|
|
$
|
46,651
|
|
In thousands, except share amounts
|
September 2017
|
|
December 2016
|
|
September 2016
|
||||||
Shares held for deferred compensation plans
|
320,615
|
|
|
439,667
|
|
|
450,067
|
|
|||
Cost of shares held for deferred compensation plans
|
$
|
3,973
|
|
|
$
|
5,464
|
|
|
$
|
5,434
|
|
In thousands
|
September 2017
|
|
December 2016
|
|
September 2016
|
||||||
Foreign currency translation and other
|
$
|
(567,964
|
)
|
|
$
|
(794,579
|
)
|
|
$
|
(670,551
|
)
|
Defined benefit pension plans
|
(268,159
|
)
|
|
(302,697
|
)
|
|
(340,891
|
)
|
|||
Derivative financial instruments
|
(78,773
|
)
|
|
55,813
|
|
|
13,422
|
|
|||
Accumulated other comprehensive loss
|
$
|
(914,896
|
)
|
|
$
|
(1,041,463
|
)
|
|
$
|
(998,020
|
)
|
|
Three Months Ended September 2017
|
||||||||||||||
In thousands
|
Foreign Currency Translation and Other
|
|
Defined Benefit Pension Plans
|
|
Derivative Financial Instruments
|
|
Total
|
||||||||
Balance, June 2017
|
$
|
(633,209
|
)
|
|
$
|
(275,089
|
)
|
|
$
|
(22,299
|
)
|
|
$
|
(930,597
|
)
|
Other comprehensive income (loss) before reclassifications
|
65,245
|
|
|
—
|
|
|
(51,826
|
)
|
|
13,419
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
6,930
|
|
|
(4,648
|
)
|
|
2,282
|
|
||||
Net other comprehensive income (loss)
|
65,245
|
|
|
6,930
|
|
|
(56,474
|
)
|
|
15,701
|
|
||||
Balance, September 2017
|
$
|
(567,964
|
)
|
|
$
|
(268,159
|
)
|
|
$
|
(78,773
|
)
|
|
$
|
(914,896
|
)
|
|
Three Months Ended September 2016
|
||||||||||||||
In thousands
|
Foreign Currency Translation and Other
|
|
Defined Benefit Pension Plans
|
|
Derivative Financial Instruments
|
|
Total
|
||||||||
Balance, June 2016
|
$
|
(675,213
|
)
|
|
$
|
(351,298
|
)
|
|
$
|
25,056
|
|
|
$
|
(1,001,455
|
)
|
Other comprehensive income (loss) before reclassifications
|
4,662
|
|
|
—
|
|
|
5,896
|
|
|
10,558
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
10,407
|
|
|
(17,530
|
)
|
|
(7,123
|
)
|
||||
Net other comprehensive income (loss)
|
4,662
|
|
|
10,407
|
|
|
(11,634
|
)
|
|
3,435
|
|
||||
Balance, September 2016
|
$
|
(670,551
|
)
|
|
$
|
(340,891
|
)
|
|
$
|
13,422
|
|
|
$
|
(998,020
|
)
|
|
Nine Months Ended September 2017
|
||||||||||||||
In thousands
|
Foreign Currency Translation and Other
|
|
Defined Benefit Pension Plans
|
|
Derivative Financial Instruments
|
|
Total
|
||||||||
Balance, December 2016
|
$
|
(794,579
|
)
|
|
$
|
(302,697
|
)
|
|
$
|
55,813
|
|
|
$
|
(1,041,463
|
)
|
Other comprehensive income (loss) before reclassifications
|
226,615
|
|
|
12,253
|
|
|
(107,836
|
)
|
|
131,032
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
22,285
|
|
|
(26,750
|
)
|
|
(4,465
|
)
|
||||
Net other comprehensive income (loss)
|
226,615
|
|
|
34,538
|
|
|
(134,586
|
)
|
|
126,567
|
|
||||
Balance, September 2017
|
$
|
(567,964
|
)
|
|
$
|
(268,159
|
)
|
|
$
|
(78,773
|
)
|
|
$
|
(914,896
|
)
|
|
Nine Months Ended September 2016
|
||||||||||||||
In thousands
|
Foreign Currency Translation and Other
|
|
Defined Benefit Pension Plans
|
|
Derivative Financial Instruments
|
|
Total
|
||||||||
Balance, December 2015
|
$
|
(718,169
|
)
|
|
$
|
(372,195
|
)
|
|
$
|
47,142
|
|
|
$
|
(1,043,222
|
)
|
Other comprehensive income (loss) before reclassifications
|
47,618
|
|
|
—
|
|
|
20,331
|
|
|
67,949
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
31,304
|
|
|
(54,051
|
)
|
|
(22,747
|
)
|
||||
Net other comprehensive income (loss)
|
47,618
|
|
|
31,304
|
|
|
(33,720
|
)
|
|
45,202
|
|
||||
Balance, September 2016
|
$
|
(670,551
|
)
|
|
$
|
(340,891
|
)
|
|
$
|
13,422
|
|
|
$
|
(998,020
|
)
|
In thousands
|
|
Affected Line Item in the Consolidated Statements of Income
|
|
Three Months Ended September
|
|
Nine Months Ended September
|
||||||||||||
Details About Accumulated Other Comprehensive Income (Loss) Components
|
|
|||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||
Amortization of defined benefit pension plans:
|
|
|
|
|
|
|
|
|
||||||||||
Net deferred actuarial losses
|
|
(a)
|
|
$
|
(10,030
|
)
|
|
$
|
(16,303
|
)
|
|
$
|
(31,414
|
)
|
|
$
|
(48,928
|
)
|
Deferred prior service costs
|
|
(a)
|
|
(643
|
)
|
|
(645
|
)
|
|
(2,000
|
)
|
|
(1,937
|
)
|
||||
Pension curtailment loss
|
|
Income (loss) from discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
(1,105
|
)
|
|
—
|
|
||||
|
|
Total before tax
|
|
(10,673
|
)
|
|
(16,948
|
)
|
|
(34,519
|
)
|
|
(50,865
|
)
|
||||
|
|
Tax benefit
|
|
3,743
|
|
|
6,541
|
|
|
12,234
|
|
|
19,561
|
|
||||
|
|
Net of tax
|
|
(6,930
|
)
|
|
(10,407
|
)
|
|
(22,285
|
)
|
|
(31,304
|
)
|
||||
Gains (losses) on derivative financial instruments:
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
|
Net sales
|
|
11,614
|
|
|
14,676
|
|
|
25,074
|
|
|
11,997
|
|
||||
Foreign exchange contracts
|
|
Cost of goods sold
|
|
(4,164
|
)
|
|
15,485
|
|
|
12,763
|
|
|
80,094
|
|
||||
Foreign exchange contracts
|
|
Selling, general and administrative expenses
|
|
(882
|
)
|
|
(1,098
|
)
|
|
(1,212
|
)
|
|
(3,611
|
)
|
||||
Foreign exchange contracts
|
|
Other income (expense), net
|
|
(774
|
)
|
|
526
|
|
|
(688
|
)
|
|
2,653
|
|
||||
Interest rate contracts
|
|
Interest expense
|
|
(1,185
|
)
|
|
(1,131
|
)
|
|
(3,518
|
)
|
|
(3,356
|
)
|
||||
|
|
Total before tax
|
|
4,609
|
|
|
28,458
|
|
|
32,419
|
|
|
87,777
|
|
||||
|
|
Tax benefit (expense)
|
|
39
|
|
|
(10,928
|
)
|
|
(5,669
|
)
|
|
(33,726
|
)
|
||||
|
|
Net of tax
|
|
4,648
|
|
|
17,530
|
|
|
26,750
|
|
|
54,051
|
|
||||
Total reclassifications for the period
|
|
Net of tax
|
|
$
|
(2,282
|
)
|
|
$
|
7,123
|
|
|
$
|
4,465
|
|
|
$
|
22,747
|
|
(a)
|
These accumulated OCI components are included in the computation of net periodic pension cost (refer to Note H for additional details).
|
|
2017
|
Expected volatility
|
23% to 30%
|
Weighted average expected volatility
|
24%
|
Expected term (in years)
|
6.3 to 7.7
|
Weighted average dividend yield
|
2.8%
|
Risk-free interest rate
|
0.7% to 2.4%
|
Weighted average fair value at date of grant
|
$9.90
|
|
Three Months Ended September
|
|
Nine Months Ended September
|
||||||||||||
In thousands
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Coalition revenues:
|
|
|
|
|
|
|
|
||||||||
Outdoor & Action Sports
|
$
|
2,502,590
|
|
|
$
|
2,326,436
|
|
|
$
|
5,647,587
|
|
|
$
|
5,378,272
|
|
Jeanswear
|
697,701
|
|
|
701,416
|
|
|
1,945,950
|
|
|
2,041,186
|
|
||||
Imagewear
|
138,885
|
|
|
127,992
|
|
|
423,859
|
|
|
404,633
|
|
||||
Sportswear
|
140,272
|
|
|
140,705
|
|
|
352,848
|
|
|
373,977
|
|
||||
Other
|
29,370
|
|
|
31,167
|
|
|
79,832
|
|
|
84,531
|
|
||||
Total coalition revenues
|
$
|
3,508,818
|
|
|
$
|
3,327,716
|
|
|
$
|
8,450,076
|
|
|
$
|
8,282,599
|
|
Coalition profit:
(a)
|
|
|
|
|
|
|
|
||||||||
Outdoor & Action Sports
|
$
|
524,489
|
|
|
$
|
491,015
|
|
|
$
|
877,206
|
|
|
$
|
842,378
|
|
Jeanswear
|
121,218
|
|
|
142,427
|
|
|
323,994
|
|
|
388,564
|
|
||||
Imagewear
|
22,377
|
|
|
23,981
|
|
|
72,349
|
|
|
74,497
|
|
||||
Sportswear
|
17,488
|
|
|
15,080
|
|
|
27,764
|
|
|
26,156
|
|
||||
Other
|
(737
|
)
|
|
(341
|
)
|
|
(3,225
|
)
|
|
(3,523
|
)
|
||||
Total coalition profit
|
684,835
|
|
|
672,162
|
|
|
1,298,088
|
|
|
1,328,072
|
|
||||
Impairment of goodwill
(b)
|
(104,651
|
)
|
|
—
|
|
|
(104,651
|
)
|
|
—
|
|
||||
Corporate and other expenses
(a)
|
(96,567
|
)
|
|
(65,012
|
)
|
|
(252,044
|
)
|
|
(211,910
|
)
|
||||
Interest expense, net
|
(22,537
|
)
|
|
(22,568
|
)
|
|
(63,332
|
)
|
|
(63,982
|
)
|
||||
Income from continuing operations before income taxes
|
$
|
461,080
|
|
|
$
|
584,582
|
|
|
$
|
878,061
|
|
|
$
|
1,052,180
|
|
(a)
|
Certain corporate overhead and other costs of
$6.0 million
and
$18.2 million
for the
three and nine
-month periods ended September 2016, respectively, previously allocated to the Imagewear and Outdoor & Action Sports coalitions for segment reporting purposes, have been reallocated to continuing operations as discussed in Note C.
|
(b)
|
Represents goodwill impairment charge in 2017 related to the Sportswear coalition as discussed in Notes G and N. The impairment charge was excluded from the profit of the Sportswear coalition since it is not part of the ongoing operations of the business.
|
|
Three Months Ended September
|
|
Nine Months Ended September
|
||||||||||||
In thousands, except per share amounts
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Earnings per share – basic:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
386,764
|
|
|
$
|
485,224
|
|
|
$
|
716,308
|
|
|
$
|
863,652
|
|
Weighted average common shares outstanding
|
393,258
|
|
|
413,461
|
|
|
400,771
|
|
|
417,067
|
|
||||
Earnings per share from continuing operations
|
$
|
0.98
|
|
|
$
|
1.17
|
|
|
$
|
1.79
|
|
|
$
|
2.07
|
|
Earnings per share – diluted:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
386,764
|
|
|
$
|
485,224
|
|
|
$
|
716,308
|
|
|
$
|
863,652
|
|
Weighted average common shares outstanding
|
393,258
|
|
|
413,461
|
|
|
400,771
|
|
|
417,067
|
|
||||
Incremental shares from stock options and other dilutive securities
|
4,126
|
|
|
5,779
|
|
|
3,848
|
|
|
6,410
|
|
||||
Adjusted weighted average common shares outstanding
|
397,384
|
|
|
419,240
|
|
|
404,619
|
|
|
423,477
|
|
||||
Earnings per share from continuing operations
|
$
|
0.97
|
|
|
$
|
1.16
|
|
|
$
|
1.77
|
|
|
$
|
2.04
|
|
•
|
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.
|
|
Total Fair Value
|
|
Fair Value Measurement Using
(a)
|
||||||||||||
In thousands
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
September 2017
|
|
|
|
|
|
|
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
405,045
|
|
|
$
|
405,045
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits
|
8,307
|
|
|
8,307
|
|
|
—
|
|
|
—
|
|
||||
Derivative financial instruments
|
26,658
|
|
|
—
|
|
|
26,658
|
|
|
—
|
|
||||
Investment securities
|
202,721
|
|
|
189,744
|
|
|
12,977
|
|
|
—
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
89,212
|
|
|
—
|
|
|
89,212
|
|
|
—
|
|
||||
Deferred compensation
|
233,151
|
|
|
—
|
|
|
233,151
|
|
|
—
|
|
||||
December 2016
|
|
|
|
|
|
|
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
840,842
|
|
|
$
|
840,842
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits
|
14,774
|
|
|
14,774
|
|
|
—
|
|
|
—
|
|
||||
Derivative financial instruments
|
103,340
|
|
|
—
|
|
|
103,340
|
|
|
—
|
|
||||
Investment securities
|
196,738
|
|
|
179,673
|
|
|
17,065
|
|
|
—
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
25,574
|
|
|
—
|
|
|
25,574
|
|
|
—
|
|
||||
Deferred compensation
|
232,214
|
|
|
—
|
|
|
232,214
|
|
|
—
|
|
(a)
|
There were
no
transfers among the levels within the fair value hierarchy during the first nine months of
2017
or the year ended
December 2016
.
|
•
|
Near-term revenue declines with later-term improvements over the projection period.
|
•
|
Improved profitability over the projection period, trending consistent with revenues.
|
•
|
Royalty rates based on active license agreements of the brand.
|
•
|
Market-based discount rates.
|
|
Fair Value of Derivatives
with Unrealized Gains
|
|
Fair Value of Derivatives
with Unrealized Losses
|
||||||||||||||||||||
In thousands
|
September 2017
|
|
December 2016
|
|
September 2016
|
|
September 2017
|
|
December 2016
|
|
September 2016
|
||||||||||||
Foreign currency exchange contracts designated as hedging instruments
|
$
|
26,451
|
|
|
$
|
103,340
|
|
|
$
|
75,497
|
|
|
$
|
(88,593
|
)
|
|
$
|
(25,292
|
)
|
|
$
|
(31,996
|
)
|
Foreign currency exchange contracts not designated as hedging instruments
|
207
|
|
|
—
|
|
|
—
|
|
|
(619
|
)
|
|
(282
|
)
|
|
(185
|
)
|
||||||
Total derivatives
|
$
|
26,658
|
|
|
$
|
103,340
|
|
|
$
|
75,497
|
|
|
$
|
(89,212
|
)
|
|
$
|
(25,574
|
)
|
|
$
|
(32,181
|
)
|
|
September 2017
|
|
December 2016
|
|
September 2016
|
||||||||||||||||||
In thousands
|
Derivative
Asset
|
|
Derivative
Liability
|
|
Derivative
Asset
|
|
Derivative
Liability
|
|
Derivative
Asset
|
|
Derivative
Liability
|
||||||||||||
Gross amounts presented in the Consolidated Balance Sheets
|
$
|
26,658
|
|
|
$
|
(89,212
|
)
|
|
$
|
103,340
|
|
|
$
|
(25,574
|
)
|
|
$
|
75,497
|
|
|
$
|
(32,181
|
)
|
Gross amounts not offset in the Consolidated Balance Sheets
|
(26,001
|
)
|
|
26,001
|
|
|
(22,341
|
)
|
|
22,341
|
|
|
(19,328
|
)
|
|
19,328
|
|
||||||
Net amounts
|
$
|
657
|
|
|
$
|
(63,211
|
)
|
|
$
|
80,999
|
|
|
$
|
(3,233
|
)
|
|
$
|
56,169
|
|
|
$
|
(12,853
|
)
|
In thousands
|
September 2017
|
|
December 2016
|
|
September 2016
|
||||||
Other current assets
|
$
|
23,387
|
|
|
$
|
84,519
|
|
|
$
|
66,231
|
|
Accrued liabilities
|
(75,266
|
)
|
|
(18,574
|
)
|
|
(28,852
|
)
|
|||
Other assets
|
3,271
|
|
|
18,821
|
|
|
9,266
|
|
|||
Other liabilities
|
(13,946
|
)
|
|
(7,000
|
)
|
|
(3,329
|
)
|
In thousands
|
Gain (Loss) on Derivatives
Recognized in OCI
Three Months Ended September
|
|
Gain (Loss) on Derivatives
Recognized in OCI
Nine Months Ended September
|
||||||||||||
Cash Flow Hedging Relationships
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign currency exchange
|
$
|
(51,147
|
)
|
|
$
|
9,571
|
|
|
$
|
(117,580
|
)
|
|
$
|
32,837
|
|
In thousands
|
Gain (Loss) Reclassified from
Accumulated OCI into Income
Three Months Ended September
|
|
Gain (Loss) Reclassified from
Accumulated OCI into Income
Nine Months Ended September
|
||||||||||||
Location of Gain (Loss)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
$
|
11,614
|
|
|
$
|
14,676
|
|
|
$
|
25,074
|
|
|
$
|
11,997
|
|
Cost of goods sold
|
(4,164
|
)
|
|
15,485
|
|
|
12,763
|
|
|
80,094
|
|
||||
Selling, general and administrative expenses
|
(882
|
)
|
|
(1,098
|
)
|
|
(1,212
|
)
|
|
(3,611
|
)
|
||||
Other income (expense), net
|
(774
|
)
|
|
526
|
|
|
(688
|
)
|
|
2,653
|
|
||||
Interest expense
|
(1,185
|
)
|
|
(1,131
|
)
|
|
(3,518
|
)
|
|
(3,356
|
)
|
||||
Total
|
$
|
4,609
|
|
|
$
|
28,458
|
|
|
$
|
32,419
|
|
|
$
|
87,777
|
|
In thousands
Derivatives Not Designated as Hedges
|
|
Location of Gain (Loss)
on Derivatives
Recognized in Income
|
|
Gain (Loss) on Derivatives
Recognized in Income
Three Months Ended September
|
|
Gain (Loss) on Derivatives
Recognized in Income
Nine Months Ended September
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Foreign currency exchange
|
|
Cost of goods sold
|
|
$
|
(927
|
)
|
|
$
|
(510
|
)
|
|
$
|
(294
|
)
|
|
$
|
225
|
|
Foreign currency exchange
|
|
Other income (expense), net
|
|
(339
|
)
|
|
(110
|
)
|
|
(2,078
|
)
|
|
(1,196
|
)
|
||||
Total
|
|
|
|
$
|
(1,266
|
)
|
|
$
|
(620
|
)
|
|
$
|
(2,372
|
)
|
|
$
|
(971
|
)
|
In thousands
|
Severance
|
|
Other
|
|
Total
|
||||||
Amounts recorded in accrued liabilities at December 2016
|
$
|
52,720
|
|
|
$
|
878
|
|
|
$
|
53,598
|
|
Cash payments
|
(24,515
|
)
|
|
(878
|
)
|
|
(25,393
|
)
|
|||
Adjustments to accruals
|
(3,001
|
)
|
|
—
|
|
|
(3,001
|
)
|
|||
Currency translation
|
824
|
|
|
—
|
|
|
824
|
|
|||
Amounts recorded in accrued liabilities at September 2017
|
$
|
26,028
|
|
|
$
|
—
|
|
|
$
|
26,028
|
|
•
|
Revenues were up 5% to
$3.5 billion
compared to the
third
quarter of
2016
, including a 1% favorable impact from foreign currency.
|
•
|
Outdoor & Action Sports coalition revenues increased 8% to
$2.5 billion
compared to the
third
quarter of
2016
, including a 2% favorable impact from foreign currency.
|
•
|
Direct-to-consumer revenues were up
18%
over the
2016
quarter, including a favorable 1% impact from foreign currency, and accounted for 27% of total revenues in the quarter. E-commerce revenues increased 38% in the quarter.
|
•
|
International revenues increased 13% compared to the
2016
quarter, including a 3% favorable impact from foreign currency, and represented
44%
of total revenues in the quarter.
|
•
|
Gross margin increased
100 basis points
in the
third
quarter to 50.1%, including 80 basis points of negative impact from changes in foreign currency.
|
•
|
Earnings per share decreased 16% to
$0.97
from
$1.16
in the
2016
quarter, due primarily to a $104.7 million goodwill impairment charge, which negatively impacted earnings per share by 20%, and a 4% unfavorable impact from foreign currency.
|
In millions
|
Third Quarter
|
|
Nine Months
|
||||
Total revenues — 2016
|
$
|
3,327.7
|
|
|
$
|
8,282.6
|
|
Operations
|
146.2
|
|
|
181.3
|
|
||
Impact of foreign currency
|
34.9
|
|
|
(13.8
|
)
|
||
Total revenues — 2017
|
$
|
3,508.8
|
|
|
$
|
8,450.1
|
|
|
Third Quarter
|
|
Nine Months
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Gross margin (total revenues less cost of goods sold)
|
50.1
|
%
|
|
49.1
|
%
|
|
50.0
|
%
|
|
48.9
|
%
|
Selling, general and administrative expenses
|
33.3
|
|
|
30.8
|
|
|
37.6
|
|
|
35.5
|
|
Impairment of goodwill
|
3.0
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
Operating income
|
13.8
|
%
|
|
18.3
|
%
|
|
11.2
|
%
|
|
13.5
|
%
|
|
Third Quarter
|
||||||||||||||||||||||
In millions
|
Outdoor &
Action Sports
|
|
Jeanswear
|
|
Imagewear
|
|
Sportswear
|
|
Other
|
|
Total
|
||||||||||||
Revenues — 2016
|
$
|
2,326.4
|
|
|
$
|
701.4
|
|
|
$
|
128.0
|
|
|
$
|
140.7
|
|
|
$
|
31.2
|
|
|
$
|
3,327.7
|
|
Operations
|
147.0
|
|
|
(9.2
|
)
|
|
10.7
|
|
|
(0.4
|
)
|
|
(1.9
|
)
|
|
146.2
|
|
||||||
Impact of foreign currency
|
29.2
|
|
|
5.5
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
34.9
|
|
||||||
Revenues — 2017
|
$
|
2,502.6
|
|
|
$
|
697.7
|
|
|
$
|
138.9
|
|
|
$
|
140.3
|
|
|
$
|
29.3
|
|
|
$
|
3,508.8
|
|
|
Nine Months
|
||||||||||||||||||||||
In millions
|
Outdoor &
Action Sports
|
|
Jeanswear
|
|
Imagewear
|
|
Sportswear
|
|
Other
|
|
Total
|
||||||||||||
Revenues — 2016
|
$
|
5,378.3
|
|
|
$
|
2,041.2
|
|
|
$
|
404.6
|
|
|
$
|
374.0
|
|
|
$
|
84.5
|
|
|
$
|
8,282.6
|
|
Operations
|
277.6
|
|
|
(89.6
|
)
|
|
19.2
|
|
|
(21.2
|
)
|
|
(4.7
|
)
|
|
181.3
|
|
||||||
Impact of foreign currency
|
(8.3
|
)
|
|
(5.6
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(13.8
|
)
|
||||||
Revenues — 2017
|
$
|
5,647.6
|
|
|
$
|
1,946.0
|
|
|
$
|
423.9
|
|
|
$
|
352.8
|
|
|
$
|
79.8
|
|
|
$
|
8,450.1
|
|
|
Third Quarter
|
||||||||||||||||||||||
In millions
|
Outdoor &
Action Sports
|
|
Jeanswear
|
|
Imagewear
|
|
Sportswear
|
|
Other
|
|
Total
|
||||||||||||
Profit — 2016
|
$
|
491.0
|
|
|
$
|
142.4
|
|
|
$
|
24.0
|
|
|
$
|
15.1
|
|
|
$
|
(0.3
|
)
|
|
$
|
672.2
|
|
Operations
|
56.4
|
|
|
(23.0
|
)
|
|
(2.4
|
)
|
|
2.4
|
|
|
(0.5
|
)
|
|
32.9
|
|
||||||
Impact of foreign currency
|
(22.9
|
)
|
|
1.8
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
(20.3
|
)
|
||||||
Profit — 2017
|
$
|
524.5
|
|
|
$
|
121.2
|
|
|
$
|
22.4
|
|
|
$
|
17.5
|
|
|
$
|
(0.8
|
)
|
|
$
|
684.8
|
|
|
Nine Months
|
||||||||||||||||||||||
In millions
|
Outdoor &
Action Sports
|
|
Jeanswear
|
|
Imagewear
|
|
Sportswear
|
|
Other
|
|
Total
|
||||||||||||
Profit — 2016
|
$
|
842.4
|
|
|
$
|
388.6
|
|
|
$
|
74.5
|
|
|
$
|
26.2
|
|
|
$
|
(3.6
|
)
|
|
$
|
1,328.1
|
|
Operations
|
87.9
|
|
|
(65.0
|
)
|
|
(3.2
|
)
|
|
1.6
|
|
|
0.4
|
|
|
21.7
|
|
||||||
Impact of foreign currency
|
(53.1
|
)
|
|
0.4
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
(51.7
|
)
|
||||||
Profit — 2017
|
$
|
877.2
|
|
|
$
|
324.0
|
|
|
$
|
72.3
|
|
|
$
|
27.8
|
|
|
$
|
(3.2
|
)
|
|
$
|
1,298.1
|
|
|
Third Quarter
|
|
Nine Months
|
||||||||||||||||||
Dollars in millions
|
2017
|
|
2016
|
|
Percent
Change |
|
2017
|
|
2016
|
|
Percent
Change |
||||||||||
Coalition revenues
|
$
|
2,502.6
|
|
|
$
|
2,326.4
|
|
|
7.6
|
%
|
|
$
|
5,647.6
|
|
|
$
|
5,378.3
|
|
|
5.0
|
%
|
Coalition profit
|
524.5
|
|
|
491.0
|
|
|
6.8
|
%
|
|
877.2
|
|
|
842.4
|
|
|
4.1
|
%
|
||||
Operating margin
|
21.0
|
%
|
|
21.1
|
%
|
|
|
|
15.5
|
%
|
|
15.7
|
%
|
|
|
|
Third Quarter
|
|
Nine Months
|
||||||||||||||||||
Dollars in millions
|
2017
|
|
2016
|
|
Percent
Change |
|
2017
|
|
2016
|
|
Percent
Change |
||||||||||
Coalition revenues
|
$
|
697.7
|
|
|
$
|
701.4
|
|
|
(0.5
|
)%
|
|
$
|
1,946.0
|
|
|
$
|
2,041.2
|
|
|
(4.7
|
)%
|
Coalition profit
|
121.2
|
|
|
142.4
|
|
|
(14.9
|
)%
|
|
324.0
|
|
|
388.6
|
|
|
(16.6
|
)%
|
||||
Operating margin
|
17.4
|
%
|
|
20.3
|
%
|
|
|
|
16.6
|
%
|
|
19.0
|
%
|
|
|
|
Third Quarter
|
|
Nine Months
|
||||||||||||||||||
Dollars in millions
|
2017
|
|
2016
|
|
Percent
Change |
|
2017
|
|
2016
|
|
Percent
Change |
||||||||||
Coalition revenues
|
$
|
138.9
|
|
|
$
|
128.0
|
|
|
8.5
|
%
|
|
$
|
423.9
|
|
|
$
|
404.6
|
|
|
4.8
|
%
|
Coalition profit
|
22.4
|
|
|
24.0
|
|
|
(6.7
|
)%
|
|
72.3
|
|
|
74.5
|
|
|
(2.9
|
)%
|
||||
Operating margin
|
16.1
|
%
|
|
18.7
|
%
|
|
|
|
17.1
|
%
|
|
18.4
|
%
|
|
|
|
Third Quarter
|
|
Nine Months
|
||||||||||||||||||
Dollars in millions
|
2017
|
|
2016
|
|
Percent
Change |
|
2017
|
|
2016
|
|
Percent
Change |
||||||||||
Coalition revenues
|
$
|
140.3
|
|
|
$
|
140.7
|
|
|
(0.3
|
)%
|
|
$
|
352.8
|
|
|
$
|
374.0
|
|
|
(5.6
|
)%
|
Coalition profit
|
17.5
|
|
|
15.1
|
|
|
16.0
|
%
|
|
27.8
|
|
|
26.2
|
|
|
6.1
|
%
|
||||
Operating margin
|
12.5
|
%
|
|
10.7
|
%
|
|
|
|
7.9
|
%
|
|
7.0
|
%
|
|
|
|
Third Quarter
|
|
Nine Months
|
||||||||||||||||||
Dollars in millions
|
2017
|
|
2016
|
|
Percent
Change |
|
2017
|
|
2016
|
|
Percent
Change |
||||||||||
Coalition revenues
|
$
|
29.3
|
|
|
$
|
31.2
|
|
|
(5.8
|
)%
|
|
$
|
79.8
|
|
|
$
|
84.5
|
|
|
(5.6
|
)%
|
Coalition loss
|
(0.8
|
)
|
|
(0.3
|
)
|
|
(116.1
|
)%
|
|
(3.2
|
)
|
|
(3.6
|
)
|
|
8.5
|
%
|
||||
Operating margin
|
(2.5
|
)%
|
|
(1.1
|
)%
|
|
|
|
(4.0
|
)%
|
|
(4.2
|
)%
|
|
|
•
|
Increase in accounts receivable
— due to the seasonality of the business.
|
•
|
Increase in inventories
— due to the seasonality of the business.
|
•
|
Increase in intangible assets
— driven by the impact of foreign currency fluctuations.
|
•
|
Decrease in other assets
— primarily due to the cumulative-effect adjustment to retained earnings of a deferred charge upon the early adoption of the accounting standards update regarding intra-entity asset transfers.
|
•
|
Increase in short-term borrowings
— due to commercial paper borrowings needed to prepare to fund the Williamson-Dickie transaction which closed on October 2, 2017, and to support general corporate purposes and share repurchases.
|
•
|
Decrease in accounts payable
— driven by the timing of inventory purchases and payments to vendors.
|
•
|
Increase in accrued liabilities
— primarily due to higher accrued compensation, and the timing of payments for other accruals.
|
•
|
Increase in long-term debt
— due to foreign currency fluctuations of euro-denominated bonds.
|
•
|
Increase in accounts receivable
— due to foreign currency fluctuations and timing of collections from customers.
|
•
|
Decrease in goodwill
— driven by goodwill impairment charges for the
Nautica
®
brand reporting unit recorded in the third quarter of 2017 and the
lucy
®
brand reporting unit recorded in the fourth quarter of 2016. Refer to Notes G and N to the consolidated financial statements for additional information regarding the
Nautica
®
reporting unit.
|
•
|
Decrease in other assets
— primarily due to the cumulative-effect adjustment to retained earnings of a deferred charge upon the early adoption of the accounting standards update regarding intra-entity asset transfers.
|
•
|
Increase in short-term borrowings
— due to commercial paper borrowings needed to prepare to fund the Williamson-Dickie transaction which closed on October 2, 2017, and to support general corporate purposes and share repurchases.
|
•
|
Increase in the current portion of long-term debt
— due to $250.0 million of long-term notes due in the fourth quarter of 2017.
|
•
|
Increase in accrued liabilities
— primarily due to higher accrued compensation, and the timing of payments for other accruals.
|
•
|
Decrease in long-term debt
— due to $250.0 million of long-term notes due in the fourth quarter of 2017, partially offset by foreign currency fluctuations of euro-denominated bonds.
|
•
|
Decrease in other liabilities
— primarily due to lower deferred income taxes.
|
|
September
|
|
December
|
|
September
|
||||||
Dollars in millions
|
2017
|
|
2016
|
|
2016
|
||||||
Working capital
|
$
|
1,805.7
|
|
|
$
|
2,407.1
|
|
|
$
|
2,513.7
|
|
Current ratio
|
1.5 to 1
|
|
2.4 to 1
|
|
2.2 to 1
|
||||||
Debt to total capital
|
52.7
|
%
|
|
31.9
|
%
|
|
38.8
|
%
|
|
Nine Months
|
||||||
In thousands
|
2017
|
|
2016
|
||||
Cash provided by operating activities
|
$
|
6,683
|
|
|
$
|
47,197
|
|
Cash provided (used) by investing activities
|
25,092
|
|
|
(50,804
|
)
|
||
Cash provided (used) by financing activities
|
301,381
|
|
|
(201,585
|
)
|
•
|
Inventory purchase obligations decreased by approximately $220.5 million at the end of
September 2017
due to the timing of purchase commitments and the removal of commitments related to the licensing business.
|
(c)
|
Issuer purchases of equity securities:
|
Third Quarter 2017
|
|
Total
Number of
Shares
Purchased
(1)
|
|
Weighted
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Programs
(1)
|
|
Dollar Value
of Shares that May
Yet be Purchased
Under the Program
|
|||||
July 2 – July 29, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
4,237,993,373
|
|
July 30 – August 26, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,237,993,373
|
|
|
August 27 – September 30, 2017
|
|
840
|
|
|
62.69
|
|
|
840
|
|
|
4,237,940,717
|
|
|
Total
|
|
840
|
|
|
|
|
840
|
|
|
|
(1)
|
Includes 840 shares of Common Stock that were purchased during the quarter in connection with VF’s deferred compensation plans.
|
|
2004 Mid-Term Incentive Plan, a subplan under the 1996 Stock Compensation Plan, as amended and restated as of October 18, 2017
|
|
|
|
|
|
Certification of Steven E. Rendle, Chairman, Chief Executive Officer and President, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Scott A. Roe, Vice President and Chief Financial Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Steven E. Rendle, Chairman, Chief Executive Officer and President, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Scott A. Roe, Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101.INS
|
|
XBRL Instance 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
|
|
V.F. CORPORATION
|
||
|
(Registrant)
|
||
|
|
|
|
|
By:
|
|
/s/ Scott A. Roe
|
|
|
|
Scott A. Roe
|
|
|
|
Vice President and Chief Financial Officer
(Chief Financial Officer)
|
|
|
|
|
Date: November 2, 2017
|
By:
|
|
/s/ Bryan H. McNeill
|
|
|
|
Bryan H. McNeill
|
|
|
|
Vice President—Controller
(Chief Accounting Officer)
|
(A)
|
In no event may the number of PRSUs that may be potentially earnable by any one Participant in all Performance Cycles that begin in any one calendar year exceed the applicable annual per-person limitation set forth in Section 5.3 of the 1996 Plan; and
|
(B)
|
The maximum percentage of the number of Target PRSUs that may be earned shall be 225% of the number of Target PRSUs, unless the Committee specifies a lesser percentage.
|
(i)
|
Regular Cash Dividends
. At the time of settlement of PRSUs under Section 8 or 9, the Administrator shall determine the aggregate amount of regular cash dividends that would have been payable to the Participant, based on record dates for dividends since the beginning of the Performance Cycle (or, if later, the date of the Participant's Designation of Participation), if the earned PRSUs then to be settled had been outstanding shares of Common Stock at such record date (without compounding of dividends but adjusted to account for splits and other
|
(ii)
|
Common Stock Dividends and Splits
. If the Company declares and pays a dividend or distribution on Common Stock in the form of additional shares of Common Stock, or there occurs a forward split of Common Stock, then the number of PRSUs credited to each Participant's Account and potentially earnable hereunder as of the payment date for such dividend or distribution or forward split shall be automatically adjusted by multiplying the number of PRSUs credited to the Account or potentially earnable as of the record date for such dividend or distribution or split by the number of additional shares of Common Stock actually paid as a dividend or distribution or issued in such split in respect of each outstanding share of Common Stock.
|
(iii)
|
Adjustments
. If the Company declares and pays a dividend or distribution on Common Stock that is not a regular cash dividend and not in the form of additional shares of Common Stock, or if there occurs any other event referred to in Article XI of the 1996 Plan, the Committee may determine to adjust the number of PRSUs credited to each Participant's Account and potentially earnable hereunder, in order to prevent dilution or enlargement of Participants' rights with respect to PRSUs.
|
(i)
|
Retirement
.
|
(ii)
|
Death
or Disability.
|
(iii)
|
Involuntary Termination By the Company Not for Cause Prior to a Change in Control.
If Termination of Employment is an involuntary separation by the Company not for Cause prior to a Change in Control, the Participant shall be entitled to receive settlement of a Pro Rata Portion of the total number of PRSUs the Participant is deemed to have earned in accordance with this Section 8(a)(iii), with the Proration Date (used to calculate the Pro Rata Portion) being the earlier of (A) the last day of the payroll period with respect to which a severance payment in the nature of salary continuation has been made and (B) the last day of the Performance Cycle. If no severance payments are to be made, the applicable Proration Date shall be the date of Termination of Employment. In all cases under this Section 8(a)(iii), PRSUs relating to any Performance Cycle beginning in 2009 or later or, with respect to the 2008-2010 Performance Cycle, as to which the Participant has been designated a participant after July 1, 2008, in which the Participant has not participated for twelve months as of the date of Termination of Employment (i.e., Termination occurs within 12 months after the Participant's Designation of Participation) will not be earnable and will be cancelled as of the date of Termination of Employment. The settlement of PRSUs shall occur promptly (and in any event not later than the Settlement Deadline) following completion of the applicable Performance Cycle. Performance for any open Performance Cycle shall be deemed to be the performance achieved for the full Performance Cycle. Any deferral election filed by the Participant shall have no effect on the settlement of the PRSUs.
|
(iv)
|
At or Following a Change in Control, Involuntary Termination By the Company Not for Cause or by Participant for Good Reason.
If Termination of Employment occurs at or after a Change in Control and is an involuntary separation by the Company not for Cause or a Termination by the Participant for Good Reason, the Participant shall be entitled to receive settlement of the total number of PRSUs the Participant is deemed to have earned in accordance with this Section 8(a)(iv), promptly (and in any event within 30 days) following the date of Termination of Employment. The amount of the settlement shall assume that the Participant has remained with the Company through the completion of each open Performance Cycle and that the performance achieved by the Company for each such Performance Cycle is the average of the performance achieved for the completed year(s) in such Performance Cycle if greater than 100% (i.e., the performance required to earn at least the Target PRSUs), or, if such average is less than 100%, the performance achieved shall be deemed to be the average of the actual performance for the completed year(s) in such Performance Cycle (if any) together with performance for years not yet complete being deemed to be 100% of target performance. Any deferral election filed by the Participant shall have no effect on the settlement of the PRSUs.
|
(v)
|
Termination by the Company for Cause or Voluntary Termination by the Participant
. If Termination of Employment is either by the Company for Cause or voluntary by the Participant (excluding a Termination for Good Reason following a Change in Control and excluding a Retirement), PRSUs relating to each Performance Cycle which has not yet ended will cease to be earnable and will be canceled.
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(i)
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Authority to adopt such rules for the administration of the Plan as the Administrator considers desirable, provided they do not conflict with the Plan; and
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(ii)
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Authority under Section 9(b) to impose restrictions or limitations on Participant deferrals under the Plan, including in order to promote cost-effective administration of the Plan; no restriction or limitation on deferrals shall be deemed to conflict with the Plan.
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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November 2, 2017
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/s/ Steven E. Rendle
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Steven E. Rendle
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Chairman, Chief Executive Officer and President
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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November 2, 2017
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/s/ Scott A. Roe
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Scott A. Roe
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Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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November 2, 2017
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/s/ Steven E. Rendle
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Steven E. Rendle
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Chairman, Chief Executive Officer and President
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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November 2, 2017
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/s/ Scott A. Roe
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Scott A. Roe
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Vice President and Chief Financial Officer
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