The Company has exposure to changes in foreign currency exchange rates related to anticipated cash flows associated with certain international inventory purchases. The Company uses foreign currency forward exchange contracts to hedge against a portion of this exposure.

The Company also has exposure to interest rate volatility related to its 2019 facilities and 2021 facility, which borrowings bear interest at a rate equal to an applicable margin plus a variable rate. The Company had entered into interest rate swap agreements to hedge against a portion of the exposure related to its term loans under the 2019 facilities. No interest rate swap agreements were outstanding as of January 30, 2022. As of January 30, 2022, approximately 80% of the Company’s long-term debt was at a fixed interest rate, with the remaining (euro-denominated) balance at a variable rate. The Company had no borrowings outstanding under the 2021 facility during 2021. Please see Note 8, “Debt,” for further discussion of the 2019 facilities, the 2021 facility and these agreements.

The Company records the foreign currency forward exchange contracts and interest rate swap agreements at fair value in its Consolidated Balance Sheets and does not net the related assets and liabilities. The foreign currency forward exchange contracts associated with certain international inventory purchases and the interest rate swap agreements are designated as effective hedging instruments (collectively, “cash flow hedges”). As such, the changes in the fair value of the cash flow hedges are recorded in equity as a component of AOCL. No amounts were excluded from effectiveness testing.

During 2021, the Company dedesignated certain cash flow hedges in connection with the repayment of the outstanding principal balance under its USD TLA facility, as the underlying interest payments were no longer probable to occur, which resulted in the release of a $1.5 million loss from AOCL into the Company’s Consolidated Statement of Operations. During 2020, the Company dedesignated certain cash flow hedges due to the impacts of the COVID-19 pandemic on its business, which resulted in the release of an immaterial gain from AOCL into the Company’s Consolidated Statement of Operations. The Company continues to believe as of January 30, 2022 that transactions relating to its designated cash flow hedges are probable to occur.

The Company has exposure to changes in foreign currency exchange rates related to the value of its investments in foreign subsidiaries denominated in a currency other than the United States dollar. To hedge against a portion of this exposure, the Company designated the carrying amounts of its (i) €600.0 million principal amount of 3 1/8% senior notes due 2027 and (ii) €525.0 million principal amount of 3 5/8% senior notes due 2024 (collectively, “foreign currency borrowings”), that were issued by PVH Corp., a U.S.-based entity, as net investment hedges of its investments in certain of its foreign subsidiaries that use the euro as their functional currency. Please see Note 8, “Debt,” for further discussion of the Company’s foreign currency borrowings.

The Company records the foreign currency borrowings at carrying value in its Consolidated Balance Sheets. The carrying value of the foreign currency borrowings is remeasured at the end of each reporting period to reflect changes in the foreign currency exchange spot rate. Since the foreign currency borrowings are designated as net investment hedges, such remeasurement is recorded in equity as a component of AOCL. The fair value and the carrying value of the foreign currency borrowings designated as net investment hedges were $1,361.7 million and $1,243.4 million, respectively, as of January 30, 2022 and $1,514.2 million and $1,351.9 million, respectively, as of January 31, 2021. The Company evaluates the effectiveness of its net investment hedges at inception and at the beginning of each quarter thereafter. No amounts were excluded from effectiveness testing.

The Company records immediately in earnings changes in the fair value of hedges that are not designated as effective hedging instruments (“undesignated contracts”), which primarily include foreign currency forward exchange contracts related to third party and intercompany transactions, and intercompany loans that are not of a long-term investment nature. Any gains and losses that are immediately recognized in earnings on such contracts are largely offset by the remeasurement of the underlying balances.

The Company does not use derivative or non-derivative financial instruments for trading or speculative purposes. The cash flows from the Company’s hedges are presented in the same category in the Company’s Consolidated Statements of Cash Flows as the items being hedged.


	Assets								Liabilities
	2021				2020				2021				2020
(In millions)	Other Current Assets		Other Assets		Other Current Assets		Other Assets		Accrued Expenses		Other Liabilities		Accrued Expenses		Other Liabilities
Contracts designated as cash flow hedges:
Foreign currency forward exchange contracts (inventory purchases)	$	48.0	$	2.7	$	1.2	$	0.1	$	0.6	$	—	$	29.0	$	0.4
Interest rate swap agreements	—		—		—		—		—		—		3.2		1.5
Total contracts designated as cash flow hedges	48.0		2.7		1.2		0.1		0.6		—		32.2		1.9
Undesignated contracts:
Foreign currency forward exchange contracts	5.6		—		2.5		—		1.1		—		1.6		—


Total	$	53.6	$	2.7	$	3.7	$	0.1	$	1.7	$	—	$	33.8	$	1.9

The notional amount outstanding of foreign currency forward exchange contracts was $1,408.5 million at January 30, 2022. Such contracts expire principally between February 2022 and July 2023.


	Gain (Loss) Recognized in Other Comprehensive (Loss) Income




(In millions)	2021		2020		2019
Foreign currency forward exchange contracts (inventory purchases)	$	109.2	$	(57.3)	$	22.4

Interest rate swap agreements	0.2		(9.9)		(5.8)
Foreign currency borrowings (net investment hedges)	111.3		(125.0)		39.3
Total	$	220.7	$	(192.2)	$	55.9


	Amount of (Loss) Gain Reclassified from AOCL into (Expense) Income, Consolidated Statements of Operations Location, and Total Amount of Consolidated Statements of Operations Line Item
	Amount Reclassified						Location	Total Statements of Operations Amount

(In millions)	2021		2020		2019			2021		2020		2019
Foreign currency forward exchange contracts (inventory purchases)	$	(1.8)	$	12.5	$	23.1	Cost of goods sold	$	3,830.6	$	3,355.8	$	4,520.6
Interest rate swap agreements	(1.5)		—		—		SG&A (1)	4,453.9		3,983.2		4,715.2
Interest rate swap agreements	(3.0)		(11.0)		(1.4)		Interest expense	108.6		125.5		120.0
Total	$	(6.3)	$	1.5	$	21.7

(1) The Company dedesignated certain cash flow hedges related to its interest rate swap agreements during 2021 as discussed in the section entitled “Cash Flow Hedges” above.

A net gain in AOCL on foreign currency forward exchange contracts at January 30, 2022 of $54.9 million is estimated to be reclassified in the next 12 months in the Company’s Consolidated Statement of Operations to cost of goods sold as the underlying inventory hedged by such forward exchange contracts is sold. Amounts recognized in AOCL for foreign currency borrowings would be recognized in earnings only upon the sale or substantially complete liquidation of the hedged net investment. No amounts remained in AOCL related to interest rate swap agreements as of January 30, 2022.

The Company dedesignated certain cash flow hedges related to its interest rate swap agreements during 2021 as discussed in the section entitled “Cash Flow Hedges” above. Following the dedesignation, the effect of these interest rate swap agreements recognized in SG&A expenses in the Company’s Consolidated Statement of Operations was immaterial in 2021.