Pennsylvania | 23-1180120 | |
(State or other jurisdiction of | (I.R.S. employer | |
incorporation or organization) | identification number) |
Large accelerated filer þ
|
Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Page No. | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 | ||||||||
Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations |
21 | |||||||
Item 3 Quantitative and Qualitative Disclosures about Market Risk |
30 | |||||||
Item 4 Controls and Procedures |
31 | |||||||
Part II Other Information |
||||||||
Item 1A Risk Factors |
31 | |||||||
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds |
31 | |||||||
Item 6 Exhibits |
32 | |||||||
Signatures |
33 | |||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-32.2 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
2
Item 1 | - Financial Statements (Unaudited) |
June | December | June | ||||||||||
2011 | 2010 | 2010 | ||||||||||
ASSETS |
||||||||||||
Current Assets |
||||||||||||
Cash and equivalents |
$ | 611,478 | $ | 792,239 | $ | 540,191 | ||||||
Accounts receivable, less allowance for doubtful accounts of: |
889,201 | 773,083 | 735,022 | |||||||||
June 2011 -
$47,918; Dec. 2010 - $44,599; |
||||||||||||
June 2010 - $57,910 |
||||||||||||
Inventories: |
||||||||||||
Finished products |
1,029,936 | 843,230 | 890,132 | |||||||||
Work in process |
92,146 | 78,226 | 82,054 | |||||||||
Materials and supplies |
163,868 | 149,238 | 129,994 | |||||||||
1,285,950 | 1,070,694 | 1,102,180 | ||||||||||
Other current assets |
259,279 | 190,044 | 213,161 | |||||||||
Total current assets |
3,045,908 | 2,826,060 | 2,590,554 | |||||||||
Property, Plant and Equipment |
1,712,742 | 1,663,299 | 1,601,389 | |||||||||
Less accumulated depreciation |
1,086,471 | 1,060,391 | 1,007,924 | |||||||||
626,271 | 602,908 | 593,465 | ||||||||||
Intangible Assets |
1,555,517 | 1,490,925 | 1,496,682 | |||||||||
Goodwill |
1,194,342 | 1,166,638 | 1,335,526 | |||||||||
Other Assets |
378,408 | 371,025 | 308,329 | |||||||||
$ | 6,800,446 | $ | 6,457,556 | $ | 6,324,556 | |||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||
Current Liabilities |
||||||||||||
Short-term borrowings |
$ | 42,567 | $ | 36,576 | $ | 41,970 | ||||||
Current portion of long-term debt |
2,693 | 2,737 | 202,742 | |||||||||
Accounts payable |
456,114 | 510,998 | 427,955 | |||||||||
Accrued liabilities |
512,540 | 559,164 | 441,278 | |||||||||
Total current liabilities |
1,013,914 | 1,109,475 | 1,113,945 | |||||||||
Long-term Debt |
934,600 | 935,882 | 937,150 | |||||||||
Other Liabilities |
581,394 | 550,880 | 625,627 | |||||||||
Commitments and Contingencies |
||||||||||||
Stockholders Equity |
||||||||||||
Common stock, stated value $1; shares |
109,598 | 107,938 | 107,898 | |||||||||
authorized, 300,000,000; shares outstanding: |
||||||||||||
June 2011 - 109,597,701; Dec. 2010 -
107,938,105; |
||||||||||||
June 2010 - 107,897,386 |
||||||||||||
Additional paid-in capital |
2,221,135 | 2,081,367 | 1,976,515 | |||||||||
Accumulated other comprehensive income (loss) |
(179,783 | ) | (268,594 | ) | (314,793 | ) | ||||||
Retained earnings |
2,118,343 | 1,940,508 | 1,879,305 | |||||||||
Total equity attributable to VF Corporation |
4,269,293 | 3,861,219 | 3,648,925 | |||||||||
Noncontrolling interests |
1,245 | 100 | (1,091 | ) | ||||||||
Total stockholders equity |
4,270,538 | 3,861,319 | 3,647,834 | |||||||||
$ | 6,800,446 | $ | 6,457,556 | $ | 6,324,556 | |||||||
3
Three Months Ended June | Six Months Ended June | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net Sales |
$ | 1,821,218 | $ | 1,576,947 | $ | 3,758,342 | $ | 3,307,033 | ||||||||
Royalty Income |
18,905 | 17,157 | 40,580 | 36,950 | ||||||||||||
Total Revenues |
1,840,123 | 1,594,104 | 3,798,922 | 3,343,983 | ||||||||||||
Costs and Operating Expenses |
||||||||||||||||
Cost of goods sold |
994,591 | 842,502 | 2,028,447 | 1,774,705 | ||||||||||||
Marketing, administrative and general expenses |
656,861 | 582,078 | 1,307,161 | 1,176,494 | ||||||||||||
1,651,452 | 1,424,580 | 3,335,608 | 2,951,199 | |||||||||||||
Operating Income |
188,671 | 169,524 | 463,314 | 392,784 | ||||||||||||
Other Income (Expense) |
||||||||||||||||
Interest income |
1,510 | 496 | 2,476 | 990 | ||||||||||||
Interest expense |
(15,962 | ) | (20,494 | ) | (31,902 | ) | (40,993 | ) | ||||||||
Miscellaneous, net |
(2,735 | ) | 1,923 | (4,666 | ) | 8,346 | ||||||||||
(17,187 | ) | (18,075 | ) | (34,092 | ) | (31,657 | ) | |||||||||
Income Before Income Taxes |
171,484 | 151,449 | 429,222 | 361,127 | ||||||||||||
Income Taxes |
41,917 | 39,959 | 98,235 | 86,178 | ||||||||||||
Net Income |
129,567 | 111,490 | 330,987 | 274,949 | ||||||||||||
Net (Income) Loss Attributable to Noncontrolling
Interests |
(199 | ) | (655 | ) | (916 | ) | (598 | ) | ||||||||
Net Income Attributable to VF Corporation |
$ | 129,368 | $ | 110,835 | $ | 330,071 | $ | 274,351 | ||||||||
Earnings Per Common Share Attributable to VF Corporation
Common Stockholders |
||||||||||||||||
Basic |
$ | 1.19 | $ | 1.02 | $ | 3.04 | $ | 2.50 | ||||||||
Diluted |
1.17 | 1.00 | 2.99 | 2.47 | ||||||||||||
Cash Dividends Per Common Share |
$ | 0.63 | $ | 0.60 | $ | 1.26 | $ | 1.20 |
4
Three Months | Six Months | |||||||||||||||
Ended June | Ended June | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net Income |
$ | 129,567 | $ | 111,490 | $ | 330,987 | $ | 274,949 | ||||||||
Other Comprehensive Income (Loss): |
||||||||||||||||
Foreign currency translation |
||||||||||||||||
Gains (losses) arising during the period |
33,583 | (104,664 | ) | 130,278 | (179,427 | ) | ||||||||||
Less income tax effect |
(4,170 | ) | 20,252 | (23,829 | ) | 31,489 | ||||||||||
Reclassification to net income for (gains)
losses realized |
(11,995 | ) | | (11,995 | ) | | ||||||||||
Less income tax effect |
4,134 | | 4,134 | | ||||||||||||
Defined benefit pension plans |
||||||||||||||||
Amortization of net deferred actuarial loss |
10,779 | 11,379 | 21,543 | 22,751 | ||||||||||||
Amortization of prior service cost |
864 | 987 | 1,727 | 1,974 | ||||||||||||
Less income tax effect |
(4,585 | ) | (3,854 | ) | (8,766 | ) | (8,624 | ) | ||||||||
Derivative financial instruments |
||||||||||||||||
Gains (losses) arising during the period |
(8,382 | ) | 15,674 | (34,552 | ) | 36,515 | ||||||||||
Less income tax effect |
3,232 | (6,039 | ) | 13,312 | (14,068 | ) | ||||||||||
Reclassification to net income for (gains)
losses realized |
293 | (1,524 | ) | (2,617 | ) | 7,723 | ||||||||||
Less income tax effect |
(114 | ) | 587 | 1,010 | (2,976 | ) | ||||||||||
Marketable securities |
||||||||||||||||
Gains (losses) arising during the period |
(1,215 | ) | (1,350 | ) | (2,040 | ) | (408 | ) | ||||||||
Less income tax effect |
(4 | ) | | (4 | ) | | ||||||||||
Reclassification to net income for (gains)
losses recognized |
| | 847 | | ||||||||||||
Less income tax effect |
| | (237 | ) | | |||||||||||
Other comprehensive income (loss) |
22,420 | (68,552 | ) | 88,811 | (105,051 | ) | ||||||||||
Foreign currency translation gains attributable
to noncontrolling interests |
106 | 168 | 229 | 177 | ||||||||||||
Other comprehensive income (loss)
including noncontrolling interests |
22,526 | (68,384 | ) | 89,040 | (104,874 | ) | ||||||||||
Comprehensive Income |
152,093 | 43,106 | 420,027 | 170,075 | ||||||||||||
Comprehensive (Income) Loss Attributable
to Noncontrolling Interests |
(305 | ) | (823 | ) | (1,145 | ) | (775 | ) | ||||||||
Comprehensive Income Attributable to
VF Corporation |
$ | 151,788 | $ | 42,283 | $ | 418,882 | $ | 169,300 | ||||||||
5
Six Months Ended June | ||||||||
2011 | 2010 | |||||||
Operating Activities |
||||||||
Net income |
$ | 330,987 | $ | 274,949 | ||||
Adjustments to reconcile net income to cash provided (used)
by operating activities: |
||||||||
Depreciation |
57,091 | 52,485 | ||||||
Amortization of intangible assets |
19,246 | 19,859 | ||||||
Other amortization |
11,418 | 7,588 | ||||||
Stock-based compensation |
32,977 | 31,353 | ||||||
Pension funding less than expense |
22,029 | 24,190 | ||||||
Other, net |
6,523 | 18,694 | ||||||
Changes in operating assets and liabilities,
net of acquisitions: |
||||||||
Accounts receivable |
(97,162 | ) | 3,271 | |||||
Inventories |
(199,650 | ) | (161,541 | ) | ||||
Other current assets |
(15,124 | ) | (9,182 | ) | ||||
Accounts payable |
(73,723 | ) | 64,007 | |||||
Accrued compensation |
(50,222 | ) | (14,125 | ) | ||||
Accrued income taxes |
(56,817 | ) | (42,120 | ) | ||||
Accrued liabilities |
(38,883 | ) | 44,590 | |||||
Other assets and liabilities |
8,989 | (5,518 | ) | |||||
Cash provided (used) by operating activities |
(42,321 | ) | 308,500 | |||||
Investing Activities |
||||||||
Capital expenditures |
(64,022 | ) | (45,309 | ) | ||||
Business acquisitions, net of cash acquired |
| (38,446 | ) | |||||
Trademarks acquisition |
(56,598 | ) | | |||||
Software purchases |
(8,221 | ) | (2,937 | ) | ||||
Other, net |
(1,107 | ) | (3,957 | ) | ||||
Cash used by investing activities |
(129,948 | ) | (90,649 | ) | ||||
Financing Activities |
||||||||
Net increase (decrease) in short-term borrowings |
6,252 | (2,551 | ) | |||||
Payments on long-term debt |
(1,260 | ) | (1,719 | ) | ||||
Purchase of Common Stock |
(5,166 | ) | (317,911 | ) | ||||
Cash dividends paid |
(137,182 | ) | (131,340 | ) | ||||
Proceeds from issuance of Common Stock, net |
83,845 | 75,490 | ||||||
Tax benefits of stock option exercises |
14,718 | 2,758 | ||||||
Cash used by financing activities |
(38,793 | ) | (375,273 | ) | ||||
Effect of Foreign Currency Rate Changes on Cash and Equivalents |
30,301 | (33,936 | ) | |||||
Net Change in Cash and Equivalents |
(180,761 | ) | (191,358 | ) | ||||
Cash and Equivalents Beginning of Year |
792,239 | 731,549 | ||||||
Cash and Equivalents End of Period |
$ | 611,478 | $ | 540,191 | ||||
6
VF Corporation Stockholders | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | Other | Non- | ||||||||||||||||||
Common | Paid-in | Comprehensive | Retained | controlling | ||||||||||||||||
Stock | Capital | Income (Loss) | Earnings | Interests | ||||||||||||||||
Balance, December 2009 |
$ | 110,285 | $ | 1,864,499 | $ | (209,742 | ) | $ | 2,050,109 | $ | (1,866 | ) | ||||||||
Net income |
| | | 571,362 | 2,150 | |||||||||||||||
Dividends on Common Stock |
| | | (264,281 | ) | | ||||||||||||||
Purchase of treasury stock |
(5,023 | ) | | | (401,925 | ) | | |||||||||||||
Stock compensation plans, net |
2,815 | 216,868 | | (4,072 | ) | | ||||||||||||||
Common Stock held in trust for
deferred compensation plans |
(139 | ) | | | (10,685 | ) | | |||||||||||||
Distributions to noncontrolling interests |
| | | | (240 | ) | ||||||||||||||
Foreign currency translation |
| | (65,398 | ) | | 56 | ||||||||||||||
Defined benefit pension plans |
| | (155 | ) | | | ||||||||||||||
Derivative financial instruments |
| | 4,464 | | | |||||||||||||||
Marketable securities |
| | 2,237 | | | |||||||||||||||
Balance, December 2010 |
107,938 | 2,081,367 | (268,594 | ) | 1,940,508 | 100 | ||||||||||||||
Net income |
| | | 330,071 | 916 | |||||||||||||||
Dividends on Common Stock |
| | | (137,182 | ) | | ||||||||||||||
Purchase of treasury stock |
| | | | | |||||||||||||||
Stock compensation plans, net |
1,709 | 139,768 | | (10,610 | ) | | ||||||||||||||
Common Stock held in trust for
deferred compensation plans |
(49 | ) | | | (4,444 | ) | | |||||||||||||
Foreign currency translation |
| | 98,588 | | 229 | |||||||||||||||
Defined benefit pension plans |
| | 14,504 | | | |||||||||||||||
Derivative financial instruments |
| | (22,847 | ) | | | ||||||||||||||
Marketable securities |
| | (1,434 | ) | | | ||||||||||||||
Balance, June 2011 |
$ | 109,598 | $ | 2,221,135 | $ | (179,783 | ) | $ | 2,118,343 | $ | 1,245 | |||||||||
7
8
Increase | ||||
In thousands except per share amounts | (Decrease) | |||
Cost of goods sold |
$ | (8,027 | ) | |
Income before income taxes |
8,027 | |||
Income tax expense |
3,160 | |||
Net income attributable to VF Corporation |
4,867 | |||
Basic earnings per common share attributable to |
||||
VF Corporation common stockholders |
$ | 0.04 | ||
Diluted earnings per common share attributable to |
||||
VF Corporation common stockholders |
0.04 |
In thousands | Increase | ||||
Inventories |
$ | 8,027 | |||
Accrued liabilities |
3,160 | ||||
Retained earnings |
4,867 |
9
June 2011 | December 2010 | |||||||||||||||||||
Weighted | Gross | Net | Net | |||||||||||||||||
Average | Carrying | Accumulated | Carrying | Carrying | ||||||||||||||||
Dollars in thousands | Life | Amount | Amortization | Amount | Amount | |||||||||||||||
Amortizable intangible assets: |
||||||||||||||||||||
Customer relationships |
19 years | $ | 452,179 | $ | 123,599 | $ | 328,580 | $ | 337,307 | |||||||||||
License agreements |
24 years | 180,214 | 56,436 | 123,778 | 127,741 | |||||||||||||||
Trademarks and other |
9 years | 10,215 | 6,257 | 3,958 | 4,670 | |||||||||||||||
Amortizable intangible assets, net |
456,316 | 469,718 | ||||||||||||||||||
Indefinite-lived intangible assets: |
||||||||||||||||||||
Trademarks and tradenames |
1,099,201 | 1,021,207 | ||||||||||||||||||
Intangible assets, net |
$ | 1,555,517 | $ | 1,490,925 | ||||||||||||||||
Outdoor & | Contemporary | |||||||||||||||||||||||
In thousands | Action Sports | Jeanswear | Imagewear | Sportswear | Brands | Total | ||||||||||||||||||
Balances, December 2010 |
$ | 574,747 | $ | 235,513 | $ | 56,703 | $ | 157,314 | $ | 142,361 | $ | 1,166,638 | ||||||||||||
Currency translation |
22,103 | 5,601 | | | | 27,704 | ||||||||||||||||||
Balances, June 2011 |
$ | 596,850 | $ | 241,114 | $ | 56,703 | $ | 157,314 | $ | 142,361 | $ | 1,194,342 | ||||||||||||
10
Three Months | Six Months | |||||||||||||||
Ended June | Ended June | |||||||||||||||
In thousands | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Service cost benefits earned during the year |
$ | 5,272 | $ | 4,077 | $ | 10,454 | $ | 8,160 | ||||||||
Interest cost on projected benefit obligations |
19,738 | 19,116 | 39,443 | 38,224 | ||||||||||||
Expected return on plan assets |
(22,442 | ) | (19,183 | ) | (44,858 | ) | (38,355 | ) | ||||||||
Amortization of: |
||||||||||||||||
Net deferred actuarial loss |
10,779 | 11,379 | 21,543 | 22,751 | ||||||||||||
Prior service cost |
864 | 987 | 1,727 | 1,974 | ||||||||||||
Net periodic pension cost |
$ | 14,211 | $ | 16,376 | $ | 28,309 | $ | 32,754 | ||||||||
11
Three Months | Six Months | |||||||||||||||
Ended June | Ended June | |||||||||||||||
In thousands | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Coalition revenues: |
||||||||||||||||
Outdoor & Action Sports |
$ | 717,928 | $ | 584,447 | $ | 1,506,143 | $ | 1,263,009 | ||||||||
Jeanswear |
613,367 | 556,016 | 1,292,610 | 1,178,081 | ||||||||||||
Imagewear |
244,074 | 211,225 | 490,882 | 432,523 | ||||||||||||
Sportswear |
120,272 | 109,074 | 232,166 | 211,251 | ||||||||||||
Contemporary Brands |
118,103 | 106,083 | 230,019 | 210,172 | ||||||||||||
Other |
26,379 | 27,259 | 47,102 | 48,947 | ||||||||||||
Total coalition revenues |
$ | 1,840,123 | $ | 1,594,104 | $ | 3,798,922 | $ | 3,343,983 | ||||||||
Coalition profit: |
||||||||||||||||
Outdoor & Action Sports |
$ | 89,472 | $ | 81,524 | $ | 233,377 | $ | 208,551 | ||||||||
Jeanswear |
94,365 | 94,741 | 217,491 | 201,549 | ||||||||||||
Imagewear |
40,271 | 26,020 | 77,169 | 48,832 | ||||||||||||
Sportswear |
11,658 | 9,740 | 19,088 | 16,908 | ||||||||||||
Contemporary Brands |
10,689 | 8,214 | 20,373 | 16,666 | ||||||||||||
Other |
64 | (10 | ) | (2,010 | ) | (1,235 | ) | |||||||||
Total coalition profit |
246,519 | 220,229 | 565,488 | 491,271 | ||||||||||||
Corporate and other expenses |
(60,583 | ) | (48,782 | ) | (106,840 | ) | (90,141 | ) | ||||||||
Interest, net |
(14,452 | ) | (19,998 | ) | (29,426 | ) | (40,003 | ) | ||||||||
Income before income taxes |
$ | 171,484 | $ | 151,449 | $ | 429,222 | $ | 361,127 | ||||||||
12
June | December | June | ||||||||||
In thousands | 2011 | 2010 | 2010 | |||||||||
Foreign currency translation |
$ | 92,861 | $ | (5,727 | ) | $ | (88,267 | ) | ||||
Defined benefit pension plans |
(251,621 | ) | (266,125 | ) | (249,869 | ) | ||||||
Derivative financial instruments |
(24,563 | ) | (1,716 | ) | 21,014 | |||||||
Marketable securities |
3,540 | 4,974 | 2,329 | |||||||||
Accumulated other comprehensive income (loss) |
$ | (179,783 | ) | $ | (268,594 | ) | $ | (314,793 | ) | |||
13
Three Months | Six Months | |||||||||||||||
Ended June | Ended June | |||||||||||||||
In thousands, except per share amounts | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Earnings per share basic: |
||||||||||||||||
Net income |
$ | 129,567 | $ | 111,490 | $ | 330,987 | $ | 274,949 | ||||||||
Net (income) loss attributable to noncontrolling interests |
(199 | ) | (655 | ) | (916 | ) | (598 | ) | ||||||||
Net income attributable to VF Corporation |
$ | 129,368 | $ | 110,835 | $ | 330,071 | $ | 274,351 | ||||||||
Weighted average Common Stock outstanding |
109,079 | 108,957 | 108,651 | 109,608 | ||||||||||||
Earnings per common share attributable to VF
Corporation common stockholders |
$ | 1.19 | $ | 1.02 | $ | 3.04 | $ | 2.50 | ||||||||
Earnings per share diluted: |
||||||||||||||||
Net income attributable to VF Corporation |
$ | 129,368 | $ | 110,835 | $ | 330,071 | $ | 274,351 | ||||||||
Weighted average Common Stock outstanding |
109,079 | 108,957 | 108,651 | 109,608 | ||||||||||||
Incremental shares from stock options and other
dilutive securities |
1,811 | 1,522 | 1,802 | 1,446 | ||||||||||||
Adjusted weighted average Common Stock outstanding |
110,890 | 110,479 | 110,453 | 111,054 | ||||||||||||
Earnings per common share attributable to VF
Corporation common stockholders |
$ | 1.17 | $ | 1.00 | $ | 2.99 | $ | 2.47 | ||||||||
14
| 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. Inputs would normally be a reporting entitys own data and judgments about assumptions that market participants would use in pricing the asset or liability. |
15
In thousands | Fair Value Measurement Using: | |||||||||||||||
Quoted Prices | Significant | |||||||||||||||
in Active | Other | Significant | ||||||||||||||
Total | Markets for | Observable | Unobservable | |||||||||||||
Fair | Identical Assets | Inputs | Inputs | |||||||||||||
Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
June 2011 |
||||||||||||||||
Financial assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 275,206 | $ | 275,206 | $ | | $ | | ||||||||
Time deposits |
116,220 | 116,220 | | | ||||||||||||
Derivative instruments |
23,839 | | 23,839 | | ||||||||||||
Investment securities |
187,511 | 156,100 | 31,411 | | ||||||||||||
Other marketable securities |
8,991 | 8,991 | | | ||||||||||||
Financial liabilities: |
||||||||||||||||
Derivative instruments |
63,906 | | 63,906 | | ||||||||||||
Deferred compensation |
221,981 | | 221,981 | | ||||||||||||
December 2010 |
||||||||||||||||
Financial assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 437,229 | $ | 437,229 | $ | | $ | | ||||||||
Time deposits |
93,254 | 93,254 | | | ||||||||||||
Derivative instruments |
18,568 | | 18,568 | | ||||||||||||
Investment securities |
182,673 | 147,380 | 35,293 | | ||||||||||||
Other marketable securities |
12,388 | 12,388 | | | ||||||||||||
Financial liabilities: |
||||||||||||||||
Derivative instruments |
28,815 | | 28,815 | | ||||||||||||
Deferred compensation |
212,011 | | 212,011 | |
16
In thousands | Fair Value of Derivatives | Fair Value of Derivatives | ||||||||||||||||||||||
with Unrealized Gains | with Unrealized Losses | |||||||||||||||||||||||
June | December | June | June | December | June | |||||||||||||||||||
2011 | 2010 | 2010 | 2011 | 2010 | 2010 | |||||||||||||||||||
Foreign exchange contracts
designated as hedging instruments |
$ | 22,141 | $ | 18,389 | $ | 41,845 | $ | 63,722 | $ | 27,916 | $ | 14,360 | ||||||||||||
Foreign exchange contracts not
designated as hedging instruments |
1,698 | 179 | 169 | 184 | 899 | 909 | ||||||||||||||||||
Total derivatives |
$ | 23,839 | $ | 18,568 | $ | 42,014 | $ | 63,906 | $ | 28,815 | $ | 15,269 | ||||||||||||
In thousands | June 2011 | December 2010 | June 2010 | |||||||||
Other current assets |
$ | 21,421 | $ | 15,296 | $ | 39,430 | ||||||
Accrued current liabilities |
(58,040 | ) | (25,440 | ) | (11,772 | ) | ||||||
Other assets (noncurrent) |
2,418 | 3,272 | 2,584 | |||||||||
Other liabilities (noncurrent) |
(5,866 | ) | (3,375 | ) | (3,497 | ) |
17
In thousands | Location | |||||||||||||||||||||
of Gain | Location of | |||||||||||||||||||||
(Loss) on | Hedged Items | Gain (Loss) | Gain (Loss) on | |||||||||||||||||||
Fair Value | Derivatives | Gain (Loss) on Derivatives | in Fair Value | Recognized | Related Hedged Item | |||||||||||||||||
Hedging | Recognized | Recognized in Income | Hedge | on Related | Recognized in Income | |||||||||||||||||
Relationships | in Income | Three Months | Six Months | Relationships | Hedged Items | Three Months | Six Months | |||||||||||||||
Period ended June 2011 |
||||||||||||||||||||||
Foreign
exchange
|
Miscellaneous income (expense) |
$ | (3,817 | ) | $ | (5,047 | ) | Advances intercompany | Miscellaneous income (expense) |
$ | 2,829 | $ | 3,799 | |||||||||
Period ended June 2010 |
||||||||||||||||||||||
Foreign
exchange
|
Miscellaneous income (expense) |
$ | 16,051 | $ | 23,084 | Advances intercompany | Miscellaneous income (expense) |
$ | (15,959 | ) | $ | (23,001 | ) |
18
In thousands | ||||||||||||||||||||
Location of | ||||||||||||||||||||
Gain (Loss) | Gain (Loss) Reclassified | |||||||||||||||||||
Cash Flow | Gain (Loss) on Derivatives | Reclassified from | from Accumulated | |||||||||||||||||
Hedging | Recognized in OCI | Accumulated | OCI into Income | |||||||||||||||||
Relationships | Three Months | Six Months | OCI into Income | Three Months | Six Months | |||||||||||||||
Periods ended June 2011 |
||||||||||||||||||||
Foreign
exchange |
$ | (8,370 | ) | $ | (34,552 | ) | Net sales | $ | 1,627 | $ | 1,231 | |||||||||
Cost of goods sold | (338 | ) | 4,804 | |||||||||||||||||
Miscellaneous income (expense) | (1,591 | ) | (3,536 | ) | ||||||||||||||||
Interest rate |
| | Interest expense | 29 | 58 | |||||||||||||||
Total |
$ | (8,370 | ) | $ | (34,552 | ) | $ | (273 | ) | $ | 2,557 | |||||||||
Periods ended June 2010 |
||||||||||||||||||||
Foreign
exchange |
$ | 15,674 | $ | 36,515 | Net sales | $ | (295 | ) | $ | (1,264 | ) | |||||||||
Cost of goods sold | 1,241 | (5,713 | ) | |||||||||||||||||
Miscellaneous income (expense) | 549 | (804 | ) | |||||||||||||||||
Interest rate |
| | Interest expense | 29 | 58 | |||||||||||||||
Total |
$ | 15,674 | $ | 36,515 | $ | 1,524 | $ | (7,723 | ) | |||||||||||
19
20
| Revenues grew to a record $1,840.1 million, an increase of 15% from the 2010 quarter, with double-digit revenue growth across all coalitions. | |
| International revenues rose 30% and represented 29% of Total Revenues in the quarter. | |
| Business in Asia continued its rapid growth, with revenues up 30% in the quarter. | |
| Direct-to-consumer business grew 17% in the quarter, driven by new store openings, a 46% increase in e-commerce revenues and comp store growth. | |
| Earnings per share increased by 17% to $1.17 from $1.00 in the 2010 quarter. (All per share amounts are presented on a diluted basis.) | |
| The balance sheet remains strong with cash of $611 million, a debt to total capital ratio of 18.7% and a net debt to total capital ratio of 7.9%. VF has over $1.3 billion of available liquidity under bank credit lines. There are no significant debt service payments required until 2017. | |
| On June 12, 2011, VF signed an agreement to purchase The Timberland Company. The acquisition is expected to close in the third quarter of 2011, subject to satisfaction of customary closing conditions. |
Second Quarter | Six Months | |||||||
2011 | 2011 | |||||||
Compared | Compared | |||||||
In millions | with 2010 | with 2010 | ||||||
Total revenues 2010 |
$ | 1,594.1 | $ | 3,344.0 | ||||
Impact of foreign currency translation |
43.5 | 50.8 | ||||||
Organic growth |
202.5 | 398.7 | ||||||
Acquisition in prior year (to anniversary date) |
| 5.4 | ||||||
Total revenues 2011 |
$ | 1,840.1 | $ | 3,798.9 | ||||
21
Second Quarter | Six Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Gross margin (total revenues less cost
of goods sold) |
45.9 | % | 47.1 | % | 46.6 | % | 46.9 | % | ||||||||
Marketing, administrative and general
expenses |
35.7 | 36.5 | 34.4 | 35.2 | ||||||||||||
Operating income |
10.3 | % | 10.6 | % | 12.2 | % | 11.7 | % | ||||||||
22
Second Quarter | ||||||||||||||||||||||||||||
Outdoor & | Contemporary | |||||||||||||||||||||||||||
In millions | Action Sports | Jeanswear | Imagewear | Sportswear | Brands | Other | Total | |||||||||||||||||||||
Total revenues 2010 period |
$ | 584.4 | $ | 556.0 | $ | 211.2 | $ | 109.1 | $ | 106.1 | $ | 27.3 | $ | 1,594.1 | ||||||||||||||
Impact of foreign currency translation |
26.9 | 12.5 | 1.2 | | 2.8 | 0.1 | 43.5 | |||||||||||||||||||||
Organic growth |
106.6 | 44.9 | 31.7 | 11.2 | 9.2 | (1.1 | ) | 202.5 | ||||||||||||||||||||
Total revenues 2011 period |
$ | 717.9 | $ | 613.4 | $ | 244.1 | $ | 120.3 | $ | 118.1 | $ | 26.3 | $ | 1,840.1 | ||||||||||||||
Six Months | ||||||||||||||||||||||||||||
Outdoor & | Contemporary | |||||||||||||||||||||||||||
In millions | Action Sports | Jeanswear | Imagewear | Sportswear | Brands | Other | Total | |||||||||||||||||||||
Total revenues 2010 period |
$ | 1,263.0 | $ | 1,178.1 | $ | 432.5 | $ | 211.3 | $ | 210.2 | $ | 48.9 | $ | 3,344.0 | ||||||||||||||
Impact of foreign currency translation |
29.8 | 16.1 | 1.9 | | 3.0 | | 50.8 | |||||||||||||||||||||
Organic growth |
207.9 | 98.4 | 56.5 | 20.9 | 16.8 | (1.8 | ) | 398.7 | ||||||||||||||||||||
Acquisition in prior year (to anniversary date) |
5.4 | | | | | | 5.4 | |||||||||||||||||||||
Total revenues 2011 period |
$ | 1,506.1 | $ | 1,292.6 | $ | 490.9 | $ | 232.2 | $ | 230.0 | $ | 47.1 | $ | 3,798.9 | ||||||||||||||
23
Second Quarter | ||||||||||||||||||||||||||||
Outdoor & | Contemporary | |||||||||||||||||||||||||||
In millions | Action Sports | Jeanswear | Imagewear | Sportswear | Brands | Other | Total | |||||||||||||||||||||
Coalition profit 2010 period |
$ | 81.5 | $ | 94.7 | $ | 26.0 | $ | 9.7 | $ | 8.2 | $ | 0.1 | $ | 220.2 | ||||||||||||||
Impact of foreign currency translation |
2.8 | 0.6 | 0.2 | | | | 3.6 | |||||||||||||||||||||
Operations |
5.2 | (0.9 | ) | 14.1 | 2.0 | 2.5 | (0.2 | ) | 22.7 | |||||||||||||||||||
Coalition profit 2011 period |
$ | 89.5 | $ | 94.4 | $ | 40.3 | $ | 11.7 | $ | 10.7 | $ | (0.1 | ) | $ | 246.5 | |||||||||||||
Six Months | ||||||||||||||||||||||||||||
Outdoor & | Contemporary | |||||||||||||||||||||||||||
In millions | Action Sports | Jeanswear | Imagewear | Sportswear | Brands | Other | Total | |||||||||||||||||||||
Coalition profit 2010 period |
$ | 208.6 | $ | 201.5 | $ | 48.8 | $ | 16.9 | $ | 16.7 | $ | (1.2 | ) | $ | 491.3 | |||||||||||||
Impact of foreign currency translation |
3.7 | 1.8 | 0.4 | | | | 5.9 | |||||||||||||||||||||
Operations |
21.1 | 14.2 | 28.0 | 2.2 | 3.7 | (0.9 | ) | 68.3 | ||||||||||||||||||||
Coalition profit 2011 period |
$ | 233.4 | $ | 217.5 | $ | 77.2 | $ | 19.1 | $ | 20.4 | $ | (2.1 | ) | $ | 565.5 | |||||||||||||
Second Quarter | Six Months | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
Dollars in millions | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Coalition revenues |
$ | 717.9 | $ | 584.4 | 22.8 | % | $ | 1,506.1 | $ | 1,263.0 | 19.2 | % | ||||||||||||
Coalition profit |
89.5 | 81.5 | 9.8 | % | 233.4 | 208.6 | 11.9 | % | ||||||||||||||||
Operating margin |
12.5 | % | 13.9 | % | 15.5 | % | 16.5 | % |
24
Second Quarter | Six Months | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
Dollars in millions | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Coalition revenues |
$ | 613.4 | $ | 556.0 | 10.3 | % | $ | 1,292.6 | $ | 1,178.1 | 9.7 | % | ||||||||||||
Coalition profit |
94.4 | 94.7 | (0.3 | )% | 217.5 | 201.5 | 7.9 | % | ||||||||||||||||
Operating margin |
15.4 | % | 17.0 | % | 16.8 | % | 17.1 | % |
Second Quarter | Six Months | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
Dollars in millions | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Coalition revenues |
$ | 244.1 | $ | 211.2 | 15.6 | % | $ | 490.9 | $ | 432.5 | 13.5 | % | ||||||||||||
Coalition profit |
40.3 | 26.0 | 55.0 | % | 77.2 | 48.8 | 58.2 | % | ||||||||||||||||
Operating margin |
16.5 | % | 12.3 | % | 15.7 | % | 11.3 | % |
25
Second Quarter | Six Months | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
Dollars in millions | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Coalition revenues |
$ | 120.3 | $ | 109.1 | 10.3 | % | $ | 232.2 | $ | 211.3 | 9.9 | % | ||||||||||||
Coalition profit |
11.7 | 9.7 | 20.6 | % | 19.1 | 16.9 | 13.0 | % | ||||||||||||||||
Operating margin |
9.7 | % | 8.9 | % | 8.2 | % | 8.0 | % |
Second Quarter | Six Months | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
Dollars in millions | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Coalition revenues |
$ | 118.1 | $ | 106.1 | 11.3 | % | $ | 230.0 | $ | 210.2 | 9.4 | % | ||||||||||||
Coalition profit |
10.7 | 8.2 | 30.5 | % | 20.4 | 16.7 | 22.2 | % | ||||||||||||||||
Operating margin |
9.1 | % | 7.7 | % | 8.9 | % | 7.9 | % |
26
Second Quarter | Six Months | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
Dollars in millions | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Coalition revenues |
$ | 26.3 | $ | 27.3 | (3.7 | )% | $ | 47.1 | $ | 48.9 | (3.7 | )% | ||||||||||||
Coalition profit (loss) |
(0.1 | ) | 0.1 | (200.0 | )% | (2.1 | ) | (1.2 | ) | 75.0 | % | |||||||||||||
Operating margin |
(0.4 | )% | 0.4 | % | (4.5 | )% | (2.5 | )% |
Second Quarter | Six Months | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
Dollars in millions | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Corporate and Other Expenses |
$ | (60.6 | ) | $ | (48.8 | ) | 24.2 | % | $ | (106.8 | ) | $ | (90.1 | ) | 18.5 | % | ||||||||
Interest, Net |
(14.5 | ) | (20.0 | ) | (27.5 | )% | (29.4 | ) | (40.0 | ) | (26.5 | )% |
27
June | December | June | ||||||||||
Dollars in millions | 2011 | 2010 | 2010 | |||||||||
Working capital |
$ | 2,032.0 | $ | 1,716.6 | $ | 1,476.6 | ||||||
Current ratio |
3.0 to 1 | 2.5 to 1 | 2.3 to 1 | |||||||||
Debt to total capital ratio |
18.7 | % | 20.2 | % | 24.5 | % |
28
| Inventory purchase obligations representing binding commitments to purchase finished goods, raw materials and sewing labor in the ordinary course of business increased by approximately $430 million at the end of June 2011 due to the seasonality of VFs businesses. | ||
| Minimum royalty and other commitments decreased by approximately $40 million at the end of June 2011 due to payments made under the agreements. | ||
| A definitive merger agreement to acquire 100% of the outstanding shares of The Timberland Company for approximately $2.3 billion, subject to satisfaction of customary closing conditions. |
29
30
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds |
Total Number of | Maximum Number | |||||||||||||||
Total | Weighted | Shares Purchased | of Shares that May | |||||||||||||
Number | Average | as Part of Publicly | Yet be Purchased | |||||||||||||
of Shares | Price Paid | Announced | Under the | |||||||||||||
Second Quarter 2011 | Purchased | per Share | Programs | Program (1) | ||||||||||||
April 3 April 30, 2011 |
11,000 | $ | 99.97 | 11,000 | 6,527,815 | |||||||||||
May 1 May 28, 2011 |
5,479 | 102.33 | 5,479 | 6,522,336 | ||||||||||||
May 29 July 2, 2011 |
10,390 | 101.34 | 10,390 | 6,511,946 | ||||||||||||
Total |
26,869 | 26,869 | ||||||||||||||
31
(1) | During the quarter, 26,869 shares of Common Stock were purchased in connection with VFs deferred compensation plans. VF will continue to evaluate future share repurchases considering funding required for business acquisitions, VFs Common Stock price and levels of stock option exercises. |
31.1
|
Certification of the principal executive officer, Eric C. Wiseman, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2
|
Certification of the principal financial officer, Robert K. Shearer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1
|
Certification of the principal executive officer, Eric C. Wiseman, 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 the principal financial officer, Robert K. Shearer, 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 |
32
V.F. CORPORATION (Registrant) |
||||
By: | /s/ Robert K. Shearer | |||
Robert K. Shearer | ||||
Senior Vice President and Chief Financial Officer (Chief Financial Officer) |
||||
Date: August 10, 2011 | By: | /s/ Bradley W. Batten | ||
Bradley W. Batten | ||||
Vice President Controller (Chief Accounting Officer) |
||||
33
(a) | 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; |
(b) | 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; |
(c) | Evaluated the effectiveness of the registrants 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 |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
(a) | 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 registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
August 10, 2011
|
/s/ Eric C. Wiseman
|
|
President and Chief Executive Officer | ||
(Principal Executive Officer) |
(a) | 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; |
(b) | 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; |
(c) | Evaluated the effectiveness of the registrants 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 |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
(a) | 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 registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
August 10, 2011
|
/s/ Robert K. Shearer
|
|
Senior Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
August 10, 2011 |
||
/s/ Eric C. Wiseman
|
||
President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
August 10, 2011 |
||
/s/ Robert K. Shearer
|
||
Senior Vice President and Chief Financial Officer |
Derivative Financial Instruments and Hedging Activities (Narrative) (Details) (USD $)
In Millions |
6 Months Ended | ||
---|---|---|---|
Jul. 02, 2011
|
Jan. 01, 2011
|
Jul. 03, 2010
|
|
Derivative Financial Instruments and Hedging Activities | |||
Notional amount of foreign currency derivatives | $ 1.5 | $ 1.1 | $ 1.4 |
Accumulated OCI including net deferred pretax losses for foreign exchange contracts | 31.8 | ||
Remaining pretax gain, deferred in Accumulated OCI | 2.6 | ||
Miscellaneous income (expense) for derivatives not designated as hedging instruments | $ 1.0 |
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data |
Jul. 02, 2011
|
Jan. 01, 2011
|
Jul. 03, 2010
|
---|---|---|---|
Consolidated Balance Sheets (Parenthetical) | |||
Allowance for doubtful accounts | $ 47,918 | $ 44,599 | $ 57,910 |
Common stock, stated value | $ 1 | $ 1 | $ 1 |
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 |
Common stock, shares outstanding | 109,597,701 | 107,938,105 | 107,897,386 |
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2011
|
Jul. 03, 2010
|
Jul. 02, 2011
|
Jul. 03, 2010
|
|
Income Statement | ||||
Net Sales | $ 1,821,218 | $ 1,576,947 | $ 3,758,342 | $ 3,307,033 |
Royalty Income | 18,905 | 17,157 | 40,580 | 36,950 |
Total Revenues | 1,840,123 | 1,594,104 | 3,798,922 | 3,343,983 |
Costs and Operating Expenses | ||||
Cost of goods sold | 994,591 | 842,502 | 2,028,447 | 1,774,705 |
Marketing, administrative and general expenses | 656,861 | 582,078 | 1,307,161 | 1,176,494 |
Costs and Operating Expenses, Total | 1,651,452 | 1,424,580 | 3,335,608 | 2,951,199 |
Operating Income | 188,671 | 169,524 | 463,314 | 392,784 |
Other Income (Expense) | ||||
Interest income | 1,510 | 496 | 2,476 | 990 |
Interest expense | (15,962) | (20,494) | (31,902) | (40,993) |
Miscellaneous, net | (2,735) | 1,923 | (4,666) | 8,346 |
Other Income (Expense), Total | (17,187) | (18,075) | (34,092) | (31,657) |
Income Before Income Taxes | 171,484 | 151,449 | 429,222 | 361,127 |
Income Taxes | 41,917 | 39,959 | 98,235 | 86,178 |
Net Income | 129,567 | 111,490 | 330,987 | 274,949 |
Net (Income) Loss Attributable to Noncontrolling Interests | (199) | (655) | (916) | (598) |
Net Income Attributable to VF Corporation | $ 129,368 | $ 110,835 | $ 330,071 | $ 274,351 |
Earnings Per Share | ||||
Earnings Per Common Share Attributable to VF Corporation Common Stockholders - Basic | $ 1.19 | $ 1.02 | $ 3.04 | $ 2.50 |
Earnings Per Common Share Attributable to VF Corporation Common Stockholders - Diluted | $ 1.17 | $ 1.00 | $ 2.99 | $ 2.47 |
Cash Dividends Per Common Share | $ 0.63 | $ 0.6 | $ 1.26 | $ 1.2 |
Derivative Financial Instruments and Hedging Activities (Summary of the Effects of Fair Value Hedging Relationships Included in VF's Consolidated Statement of Income) (Details) (Miscellaneous Income (Expense) [Member], USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2011
|
Jul. 03, 2010
|
Jul. 02, 2011
|
Jul. 03, 2010
|
|
Foreign Exchange Contract - Fair Value Hedge [Member]
|
||||
Derivative instruments, gain (loss) recognized in income | $ (3,817) | $ 16,051 | $ (5,047) | $ 23,084 |
Advances - Intercompany [Member]
|
||||
Change in unrealized gain (loss) on hedged item in fair value hedge | $ 2,829 | $ (15,959) | $ 3,799 | $ (23,001) |
Subsequent Events
|
6 Months Ended |
---|---|
Jul. 02, 2011
|
|
Subsequent Events | |
Subsequent Events | Note P — Subsequent Event
VF's Board of Directors declared a quarterly cash dividend of $0.63 per share, payable on September 19, 2011 to shareholders of record on September 9, 2011. |
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jul. 02, 2011
|
Jul. 31, 2011
|
|
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 02, 2011 | |
Entity Registrant Name | V F CORP | |
Entity Central Index Key | 0000103379 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 109,713,697 |
Goodwill (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Goodwill | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of goodwill by business segment |
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Earnings Per Share (Narrative) (Details)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2011
|
Jul. 03, 2010
|
Jul. 02, 2011
|
Jul. 03, 2010
|
|
Stock options excluded from computation of earnings per share | 0.9 | 1.2 | 0.9 | 2.5 |
Performance-based Restricted Stock Unit Grant [Member]
|
||||
Stock options excluded from computation of earnings per share | 0.3 | 0.3 | 0.3 | 0.3 |
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Intangible Assets
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Intangible Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Note E — Intangible Assets
Intangible assets are amortized using the following methods: customer relationships — accelerated methods; license agreements — accelerated and straight-line methods; trademarks and other — straight-line method.
Indefinite-lived intangible assets increased from December 2010 due to the Rock and Republic trademarks acquisition in the first quarter of 2011 as discussed in Note C, and the impact of foreign currency translation.
Amortization of intangible assets for the second quarter and first six months of 2011 was $9.5 million and $19.2 million, respectively, and is expected to be $37.8 million for the year 2011. Estimated amortization expense for the years 2012 through 2015 is $34.6 million, $33.0 million, $31.9 million and $30.5 million, respectively. |
Pension Plans (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Pension Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic pension cost, Table |
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Capital and Accumulated Other Comprehensive Income (Loss) (Schedule of Deferred Gains (Losses) Comprising Accumulated OCI) (Details) (USD $)
In Thousands |
Jul. 02, 2011
|
Jan. 01, 2011
|
Jul. 03, 2010
|
---|---|---|---|
Capital and Accumulated Other Comprehensive Income (Loss) | |||
Foreign currency translation | $ 92,861 | $ (5,727) | $ (88,267) |
Defined benefit pension plans | (251,621) | (266,125) | (249,869) |
Derivative financial instruments | (24,563) | (1,716) | 21,014 |
Marketable securities | 3,540 | 4,974 | 2,329 |
Accumulated other comprehensive income (loss) | $ (179,783) | $ (268,594) | $ (314,793) |
Goodwill (Summary of Goodwill by Business Segment) (Details) (USD $)
In Thousands |
6 Months Ended | |
---|---|---|
Jul. 02, 2011
|
Jul. 03, 2010
|
|
Goodwill, beginning balance | $ 1,166,638 | $ 1,335,526 |
Currency translation | 27,704 | |
Goodwill, ending balance | 1,194,342 | 1,335,526 |
Goodwill, Outdoor and Action Sports [Member]
|
||
Goodwill, beginning balance | 574,747 | |
Currency translation | 22,103 | |
Goodwill, ending balance | 596,850 | |
Goodwill, Jeanswear [Member]
|
||
Goodwill, beginning balance | 235,513 | |
Currency translation | 5,601 | |
Goodwill, ending balance | 241,114 | |
Goodwill, Imagewear [Member]
|
||
Goodwill, beginning balance | 56,703 | |
Currency translation | ||
Goodwill, ending balance | 56,703 | |
Goodwill, Sportswear [Member]
|
||
Goodwill, beginning balance | 157,314 | |
Currency translation | ||
Goodwill, ending balance | 157,314 | |
Goodwill, Contemporary Brands [Member]
|
||
Goodwill, beginning balance | 142,361 | |
Currency translation | ||
Goodwill, ending balance | $ 142,361 |
Intangible Assets (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Intangible Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Indefinite-Lived Intangible Assets by Major Class |
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Stock-based Compensation
|
6 Months Ended |
---|---|
Jul. 02, 2011
|
|
Stock-based Compensation | |
Stock-based Compensation | Note J — Stock-based Compensation
During the quarter ended June 2011, VF did not grant any stock-based compensation awards.
During the first six months of 2011, VF granted options to purchase 925,635 shares of Common Stock at an exercise price of $95.56, equal to the market value of VF Common Stock on the option grant date. The options vest in equal annual installments, generally over a three year period. The fair value of these options was estimated using a lattice valuation model, with the following assumptions: expected volatility ranging from 27% to 38%, with a weighted average of 34%; expected term of 5.6 to 7.5 years; expected dividend yield of 3.1%; and a risk-free interest rate ranging from 0.2% at six months to 3.5% at 10 years. The resulting weighted average fair value of these options at the grant date was $24.99 per option.
Also during the first six months of 2011, VF granted 241,751 performance-based restricted stock units that generally entitle the recipients to receive shares of VF Common Stock at the end of a three year performance period. The actual number of shares that will be earned, if any, will be based on VF's performance over that period. The fair value of VF's Common Stock at the date the units were granted was $95.23 per share.
VF also granted, during the first six months of 2011, 19,000 shares of restricted VF Common Stock and 15,000 restricted stock units with a fair value at the grant date of $86.51 per share. These shares and units will vest in 2015, assuming the grantees remain employed through the vesting date. |
Basis of Presentation
|
6 Months Ended |
---|---|
Jul. 02, 2011
|
|
Basis of Presentation [Abstract] | |
Basis of Presentation | Note A — Basis of Presentation
VF Corporation (and its subsidiaries, collectively known as "VF") uses a 52/53 week fiscal year ending on the Saturday closest to December 31 of each year. For presentation purposes herein, all references to periods ended June 2011, December 2010 and June 2010 relate to the fiscal periods ended on July 2, 2011, January 1, 2011 and July 3, 2010, respectively.
The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles ("GAAP") in the United States of America for complete financial statements. Similarly, the December 2010 consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the consolidated financial position, results of operations and cash flows of VF for the interim periods presented. Operating results for the three and six months ended June 2011 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2011. For further information, refer to the consolidated financial statements and notes included in VF's Annual Report on Form 10-K for the year ended December 2010 ("2010 Form 10-K").
Certain prior year amounts, none of which are material, have been reclassified to conform with the 2011 presentation. |
Sale of Accounts Receivable (Narrative) (Detail) (USD $)
In Millions |
6 Months Ended | ||
---|---|---|---|
Jul. 02, 2011
|
Jan. 01, 2011
|
Jul. 03, 2010
|
|
Accounts Receivable | |||
Maximum amount of accounts receivable sold at any point in time | $ 237.5 | ||
Decrease in receivables related to balances sold | 123.0 | 112.3 | 112.3 |
Sale of accounts receivable, nonrecourse basis | 537.1 | ||
Funding fee | $ 1.0 |
Pension Plans
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Pension Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans | Note G — Pension Plans
VF's pension cost was composed of the following components:
During the first half of 2011, VF contributed $6.6 million to its defined benefit pension plans. VF currently anticipates making $4.1 million of additional contributions during the remainder of 2011. |
Earnings Per Share
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Earnings Per Share | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Note L — Earnings Per Share
Outstanding options to purchase 0.9 million shares of Common Stock for the three and six months ended June 2011, and outstanding options to purchase 1.2 million shares and 2.5 million shares of Common Stock for the three and six months ended June 2010, respectively, were excluded from the computations of diluted earnings per share because the effect of their inclusion would have been antidilutive. In addition, 0.3 million performance-based restricted stock units were excluded from the computation of diluted earnings per share for each of the three and six month periods ended June 2011 and 2010 because these units are subject to performance-based vesting conditions that had not been achieved by the end of those periods. |
Business Segment Information
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Business Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information | Note H — Business Segment Information
VF's businesses are grouped into product categories, and by brands within those product categories, for internal financial reporting used by management. These groupings of businesses within VF are referred to as "coalitions" and are the basis for VF's reportable business segments. Financial information for VF's reportable segments is as follows:
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Derivative Financial Instruments and Hedging Activities (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Derivative Financial Instruments and Hedging Activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments |
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value |
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance |
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Schedule of Derivative Instruments, Cash Flow Hedges |
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Goodwill
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Goodwill | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Note F — Goodwill
Balances at December 2010 are net of cumulative impairment charges recorded as follows: Outdoor & Action Sports — $43.4 million, Sportswear — $58.5 million and Contemporary Brands — $195.2 million. |
Derivative Financial Instruments and Hedging Activities (Current or Noncurrent Derivative Assets and Liabilities) (Details) (USD $)
In Thousands |
Jul. 02, 2011
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Jan. 01, 2011
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Jul. 03, 2010
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Derivative Financial Instruments and Hedging Activities | |||
Other current assets | $ 21,421 | $ 15,296 | $ 39,430 |
Accrued current liabilities | (58,040) | (25,440) | (11,772) |
Other assets (noncurrent) | 2,418 | 3,272 | 2,584 |
Other liabilities (noncurrent) | $ (5,866) | $ (3,375) | $ (3,497) |
Change in Accounting Principle
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Change in Accounting Principle [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Accounting Principle | Note B — Change in Accounting Principle
VF has historically valued inventories using both the first-in, first out ("FIFO") and last-in, first-out ("LIFO") methods. At the end of December 2010, approximately 25% of total inventories were valued using the LIFO method. On January 2, 2011, VF changed its method of accounting for inventories previously valued on the LIFO method to the FIFO method. This change is preferable because the FIFO inventory valuation (i) better reflects the current value of inventories on the Consolidated Balance Sheets, (ii) provides for a single inventory valuation method for all business units globally, and (iii) enhances comparability with the reporting of VF's peers. The effect of retrospectively applying this change in accounting principle on previously reported financial statements was not material and therefore those periods have not been restated. The impact of recording this change in the Consolidated Statement of Income for the six months ended June 2011 was as follows:
The impact of recording this change in the Consolidated Balance Sheet as of January 2, 2011 was as follows:
The impact of continuing to account for inventory on a LIFO instead of FIFO basis, had VF not made this change in accounting principle, would not have been material to the financial position, results of operations, cash flows and earnings per common share attributable to VF Corporation common stockholders for the three or six months ended June 2011. |
Pension Plans (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
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Jul. 02, 2011
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Jul. 03, 2010
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Jul. 02, 2011
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Jul. 03, 2010
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Pension Plans [Abstract] | ||||
Service cost - benefits earned during the year | $ 5,272 | $ 4,077 | $ 10,454 | $ 8,160 |
Interest cost on projected benefit obligations | 19,738 | 19,116 | 39,443 | 38,224 |
Expected return on plan assets | (22,442) | (19,183) | (44,858) | (38,355) |
Amortization of net deferred actuarial losses | 10,779 | 11,379 | 21,543 | 22,751 |
Amortization of prior service cost | 864 | 987 | 1,727 | 1,974 |
Net periodic pension cost | 14,211 | 16,376 | 28,309 | 32,754 |
Employer contributions | 6,600 | |||
Estimated future employer contributions | $ 4,100 | $ 4,100 |
Fair Value Measurements (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 03, 2010
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Fair Value Measurements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping |
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Derivative Financial Instruments and Hedging Activities (Outstanding Derivatives on Individual Contract Basis) (Details) (USD $)
In Thousands |
Jul. 02, 2011
|
Jan. 01, 2011
|
Jul. 03, 2010
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Derivative Financial Instruments and Hedging Activities | |||
Foreign exchange contracts designated as hedging instruments | $ 22,141 | $ 18,389 | $ 41,845 |
Derivative liability designated as hedging instrument, fair value | 63,722 | 27,916 | 14,360 |
Foreign exchange contracts not designated as hedging instruments | 1,698 | 179 | 169 |
Derivative liability not designated as hedging instrument, fair value | 184 | 899 | 909 |
Total derivative assets | 23,839 | 18,568 | 42,014 |
Total derivative liability | $ 63,906 | $ 28,815 | $ 15,269 |
Acquisitions
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6 Months Ended |
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Jul. 02, 2011
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Acquisitions | |
Acquisitions | Note C — Acquisitions
On March 30, 2011, VF acquired the trademarks and related intellectual property of Rock and Republic Enterprises, Inc. VF has accounted for this transaction as an asset acquisition and recorded the purchase price as an indefinite-lived intangible asset. The total purchase price is expected to be approximately $57.0 million plus expenses. The purchase price will be finalized after all contingencies have been resolved, which should occur by the end of 2011. Rock and Republic® jeanswear and related products will be offered through an exclusive licensing and wholesale distribution arrangement with Kohl's Department Stores. Operating results will be reported as part of the Jeanswear Coalition.
On June 12, 2011, VF entered into a definitive merger agreement to acquire 100% of the outstanding shares of The Timberland Company for approximately $2.3 billion net of cash acquired. The acquisition is expected to close in the third quarter of 2011, subject to satisfaction of customary closing conditions. |
Capital and Accumulated Other Comprehensive Income (Loss) (Narrative) (Details) (USD $)
In Millions, except Share data |
Jul. 02, 2011
|
Jan. 01, 2011
|
Jul. 03, 2010
|
---|---|---|---|
Capital and Accumulated Other Comprehensive Income (Loss) | |||
Treasury shares | 19,270,341 | 19,099,644 | 18,022,755 |
Common Stock, stated value | $ 1 | $ 1 | $ 1 |
Number of Common Stock shares held in trust in connection with deferred compensation plans | 241,059 | 246,860 | 268,169 |
Common Stock held in trust in connection with deferred compensation plans | $ 10.4 | $ 10.7 | $ 12.1 |
Preferred Stock, authorized shares | 25,000,000 | ||
Preferred Stock, par value | $ 1 |
Business Segment Information (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Business Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of operating profit (loss) from Segments |
|
Change in Accounting Principle (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
6 Months Ended |
---|---|
Jul. 02, 2011
|
|
Change in Accounting Principle [Abstract] | |
Percentage of LIFO Inventory | 25.00% |
Effect of change on Cost of goods sold | $ (8,027) |
Effect of change on Income before income taxes | 8,027 |
Effect of change on Income tax expense | 3,160 |
Effect of change on Net income | 4,867 |
Effect of change on Basic earnings per share | $ 0.04 |
Effect of change on Diluted earnings per share | $ 0.04 |
Effect of change on Inventories | 8,027 |
Effect of change on Accrued liabilities | 3,160 |
Effect of change on Retained earnings | $ 4,867 |
Business Segment Information (Schedule of Revenues for VF's Reportable Segments) (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2011
|
Jul. 03, 2010
|
Jul. 02, 2011
|
Jul. 03, 2010
|
|
Total revenues | $ 1,840,123 | $ 1,594,104 | $ 3,798,922 | $ 3,343,983 |
Total coalition profit | 246,519 | 220,229 | 565,488 | 491,271 |
Corporate and other expenses | (60,583) | (48,782) | (106,840) | (90,141) |
Interest, net | (14,452) | (19,998) | (29,426) | (40,003) |
Income Before Income Taxes | 171,484 | 151,449 | 429,222 | 361,127 |
Outdoor & Action Sports [Member]
|
||||
Coalition revenues | 717,928 | 584,447 | 1,506,143 | 1,263,009 |
Coalition profit | 89,472 | 81,524 | 233,377 | 208,551 |
Jeanswear [Member]
|
||||
Coalition revenues | 613,367 | 556,016 | 1,292,610 | 1,178,081 |
Coalition profit | 94,365 | 94,741 | 217,491 | 201,549 |
Imagewear [Member]
|
||||
Coalition revenues | 244,074 | 211,225 | 490,882 | 432,523 |
Coalition profit | 40,271 | 26,020 | 77,169 | 48,832 |
Sportswear [Member]
|
||||
Coalition revenues | 120,272 | 109,074 | 232,166 | 211,251 |
Coalition profit | 11,658 | 9,740 | 19,088 | 16,908 |
Contemporary Brands [Member]
|
||||
Coalition revenues | 118,103 | 106,083 | 230,019 | 210,172 |
Coalition profit | 10,689 | 8,214 | 20,373 | 16,666 |
Other [Member]
|
||||
Coalition revenues | 26,379 | 27,259 | 47,102 | 48,947 |
Coalition profit | $ 64 | $ (10) | $ (2,010) | $ (1,235) |
Earnings Per Share (Tables)
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Jul. 02, 2011
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Earnings Per Share |
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Income Taxes
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6 Months Ended |
---|---|
Jul. 02, 2011
|
|
Income Taxes | |
Income Taxes | Note K — Income Taxes
The effective income tax rate was 23.9% in the first half of 2010, compared with 22.9% in the first half of 2011. The tax rates in both periods were lowered by discrete items. The first half of 2010 included a $13.0 million income tax benefit related to refund claims in a foreign jurisdiction. The first six months of 2011 included $10.0 million in tax benefits related to settlements of prior years' tax audits and $2.8 million of tax benefits related to the realization of unrecognized tax benefits resulting from expiration of statutes of limitations. In addition, the tax rate in the first six months of 2011 benefited from a higher percentage of income in lower tax rate jurisdictions compared with the 2010 period. The effective tax rate for the full year 2010 was 23.6% (24.9% on earnings before the goodwill and intangible asset impairment charge).
VF files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous states and foreign jurisdictions. During 2010, the United States Internal Revenue Service ("IRS") commenced an examination of tax years 2007, 2008 and 2009. During the first quarter of 2011, VF settled with the IRS its examination of tax years 2004, 2005 and 2006. VF is currently subject to examination by various state tax authorities. While the outcome of any one examination is not expected to have a material impact on VF's consolidated financial statements, management regularly assesses the outcomes of both ongoing and future examinations to ensure VF's provision for income taxes is sufficient. Management believes that some of these audits and negotiations will conclude during the next 12 months. During the first six months of 2011, the amount of unrecognized tax benefits and associated interest decreased by $16.3 million, primarily due to the audit settlements. Of the $16.3 million net decrease, $6.4 million favorably impacted income tax expense in the first six months. Management believes that it is reasonably possible that the amount of unrecognized income tax benefits may decrease during the next 12 months by approximately $4.7 million related to the completion of audits and other settlements with tax authorities and the expiration of statutes of limitations. Of the $4.7 million, $1.8 million would reduce income tax expense. |
Sale of Accounts Receivable
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6 Months Ended |
---|---|
Jul. 02, 2011
|
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Accounts Receivable | |
Sale of Accounts Receivable | Note D — Sale of Accounts Receivable
VF has an agreement with a financial institution to sell selected trade accounts receivable on a nonrecourse basis. This agreement allows VF to have up to $237.5 million of accounts receivable held by the financial institution at any point in time. After the sale, VF continues to service and collect these accounts receivable on behalf of the financial institution but does not retain any other interests in the receivables. At the end of June 2011, December 2010 and June 2010, accounts receivable in the Consolidated Balance Sheets had been reduced by $123.0 million, $112.3 million and $112.3 million, respectively, related to balances sold under this program. During the first half of 2011, VF sold $537.1 million of accounts receivable at their stated amounts, less a funding fee of $1.0 million, which was recorded in Miscellaneous Expense. Net proceeds of this program are classified in operating activities in the Consolidated Statements of Cash Flows. |
Derivative Financial Instruments and Hedging Activities
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Jul. 02, 2011
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Derivative Financial Instruments and Hedging Activities | Note N — Derivative Financial Instruments and Hedging Activities
Summary of derivative instruments — All of VF's derivative instruments are forward exchange contracts and meet the criteria for hedge accounting at the inception of the hedging relationship. However, derivative instruments that are cash flow hedges of forecasted cash receipts are dedesignated as hedges near the end of their term and do not qualify for hedge accounting after the date of dedesignation. The notional amounts of outstanding derivative contracts at June 2011, December 2010 and June 2010 totaled $1.5 billion, $1.1 billion and $1.4 billion, respectively, consisting of contracts hedging primarily exposures to the euro, British pound, Mexican peso, Polish zloty and Canadian dollar. Derivative contracts have maturities up to 20 months. The following table presents outstanding derivatives on an individual contract basis:
Outstanding derivatives have been included in the Consolidated Balance Sheets and classified as current or noncurrent based on the derivatives' maturity dates, as follows:
Fair value hedges — VF enters into derivative contracts to hedge intercompany loans between a domestic company and a foreign subsidiary or between two foreign subsidiaries having different functional currencies. VF's Consolidated Statements of Income include the following effects related to fair value hedging:
Cash flow hedges — VF uses derivative contracts to hedge a portion of the exchange risk for its forecasted inventory purchases and production costs and for its forecasted cash receipts arising from sales of inventory. In addition, VF's domestic companies hedge the receipt of forecasted intercompany royalties from foreign subsidiaries. As discussed below in "derivative contracts not designated as hedges", cash flow hedges of forecasted cash receipts are dedesignated as hedges when the sale is recorded, and hedge accounting is not applied after that date.
The effects of cash flow hedging included in VF's Consolidated Statements of Income and Consolidated Statements of Comprehensive Income are summarized as follows:
Net investment hedges — In limited instances, VF may choose to hedge the risk of changes in its investment in foreign subsidiaries. Changes in the fair value of derivatives designated as net investment hedges, except for any ineffective portion, are reported as a component of OCI and deferred in Accumulated OCI, along with the foreign currency translation adjustments on that investment. Upon settlement of net investment hedges, cash flows are classified in investing activities in the Consolidated Statements of Cash Flows. The effects of net investment hedging included in VF's Consolidated Statements of Income and Consolidated Statements of Comprehensive Income were not material for the three and six month periods ended June 2011 or June 2010. There were no significant amounts recognized in earnings related to ineffective hedging during the three or six month periods ended June 2011 or June 2010.
At June 2011, Accumulated OCI included $31.8 million of net deferred pretax losses for foreign exchange contracts that are expected to be reclassified to earnings during the next 12 months. The amounts reclassified to earnings will depend on exchange rates when the outstanding derivative contracts are settled.
In addition, VF entered into an interest rate swap derivative contract in 2003 to hedge the interest rate risk for issuance of long-term debt due in 2033. The contract was terminated concurrent with the issuance of the debt and the realized gain was deferred in Accumulated OCI. The remaining pretax deferred gain in Accumulated OCI was $2.6 million at June 2011, which will be reclassified into earnings over the remaining term of the debt.
Derivative contracts not designated as hedges — As noted in a preceding section, cash flow hedges of forecasted cash receipts are dedesignated as hedges when the sales are recognized. At that time, the amount of unrealized hedging gain or loss is recognized in net sales, and hedge accounting is not applied after the date of dedesignation. These derivatives remain outstanding and serve as an economic hedge of foreign currency exposures related to the ultimate collection of the trade receivables. During the period that hedge accounting is not applied, changes in the fair value of the derivative contracts are recognized directly in earnings. For the three and six months ended June 2011 and June 2010, VF recorded net losses of less than $1 million in Miscellaneous Income (Expense) for derivatives not designated as hedging instruments, effectively offsetting the net remeasurement gains on the related accounts receivable. |
Goodwill (Narrative) (Details) (USD $)
In Millions |
12 Months Ended |
---|---|
Jan. 01, 2011
|
|
Goodwill, Outdoor and Action Sports [Member]
|
|
Recorded impairment charges to write down the goodwill | $ 43.4 |
Goodwill, Sportswear [Member]
|
|
Recorded impairment charges to write down the goodwill | 58.5 |
Goodwill, Contemporary Brands [Member]
|
|
Recorded impairment charges to write down the goodwill | $ 195.2 |
Capital and Accumulated Other Comprehensive Income (Loss) (Tables)
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Jul. 02, 2011
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Accumulated Other Comprehensive Income (Loss) |
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Recently Issued Accounting Standards
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6 Months Ended |
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Jul. 02, 2011
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Recently Issued Accounting Standards [Abstract] | |
Recently Issued Accounting Standards | Note O — Recently Issued Accounting Standards
In June 2011, the FASB issued an update to their accounting guidance regarding other comprehensive income which requires that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements of income and comprehensive income. The guidance provided by this update becomes effective for VF in the first quarter of fiscal 2012. VF does not expect that the adoption of this guidance will have a material effect on the financial statements.
In May 2011, the FASB issued an update to their authoritative guidance regarding fair value measurements and related disclosures. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for the use of a nonfinancial asset that is different from the asset's highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. This guidance will be effective in the first quarter of fiscal 2012, and will be applied on a prospective basis. VF is currently evaluating the impact on the financial statements. |
Stock-based Compensation (Narrative) (Details) (USD $)
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6 Months Ended |
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Jul. 02, 2011
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Options granted in period | 925,635 |
Exercise price of options granted | $ 95.56 |
Expected volatility, minimum | 27.00% |
Expected volatility, maximum | 38.00% |
Weighted average expected volatility | 34.00% |
Expected term, minimum | 5.60 |
Expected term, maximum | 7.50 |
Dividend yield | 3.10% |
Six-month risk-free interest rate | 0.20% |
Ten-year risk-free interest rate | 3.50% |
Weighted average fair value of options granted | $ 24.99 |
Restricted Stock Award [Member]
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Restricted stock units granted in period | 19,000 |
Weighted-average fair value of restricted stock units granted | $ 86.51 |
Performance-based Restricted Stock Unit Grant [Member]
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Restricted stock units granted in period | 241,751 |
Weighted-average fair value of restricted stock units granted | $ 95.23 |
Restricted Stock Units [Member]
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Restricted stock units granted in period | 15,000 |
Weighted-average fair value of restricted stock units granted | $ 86.51 |
Change in Accounting Principle (Tables)
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Jul. 02, 2011
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Capital and Accumulated Other Comprehensive Income (Loss)
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Capital and Accumulated Other Comprehensive Income (Loss) | Note I — Capital and Accumulated Other Comprehensive Income (Loss)
Common stock outstanding is net of shares held in treasury and, in substance, retired. There were 19,270,341 treasury shares at June 2011, 19,099,644 at December 2010 and 18,022,755 at June 2010. The excess of the cost of treasury shares acquired over the $1 per share stated value of Common Stock is deducted from Retained Earnings. In addition, 241,059 shares of VF Common Stock at June 2011, 246,860 shares at December 2010 and 268,169 shares at June 2010 were held in connection with deferred compensation plans. These shares, having a cost of $10.4 million, $10.7 million and $12.1 million at the respective dates, are treated as treasury shares for financial reporting purposes.
There are 25,000,000 authorized shares of Preferred Stock, $1 par value, of which none are outstanding.
Comprehensive income includes net income and specified components of other comprehensive income ("OCI"). OCI consists of changes in assets and liabilities that are not included in net income under GAAP but are instead deferred and accumulated within a separate component of stockholders' equity in the balance sheet. VF's comprehensive income is presented in the Consolidated Statements of Comprehensive Income. The deferred components of other comprehensive income (loss) are reported, net of related income taxes, in Accumulated Other Comprehensive Income (Loss) in Stockholders' Equity, as follows:
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Subsequent Events (Narrative) (Details) (USD $)
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Jul. 02, 2011
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Subsequent Events | |
Cash dividend | $ 0.63 |
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