Quarterly report pursuant to Section 13 or 15(d)

Derivative Financial Instruments and Hedging Activities (Tables)

v2.4.0.8
Derivative Financial Instruments and Hedging Activities (Tables)
 3 Months Ended
Mar. 29, 2014
Outstanding Derivatives on Individual Contract Basis at Gross Amounts

The following table presents outstanding derivatives on a gross basis by individual contract:

 

     Fair Value of Derivatives with
Unrealized Gains		      Fair Value of Derivatives with
Unrealized Losses		  
     March
2014		      December
2013		      March
2013		      March
2014		     December
2013		     March
2013		  
In thousands                                        

Foreign currency exchange contracts designated as hedging instruments

    $ 16,936       $ 15,964       $ 48,156       $ (38,660 )    $ (46,627 )    $ (8,933 ) 

Foreign currency exchange contracts dedesignated as hedging instruments

      —           —           571         —          —          (864 ) 

Foreign currency exchange contracts not designated as hedging instruments

      117         124         90         (638 )      (164 )      (78 ) 
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total derivatives

    $ 17,053       $ 16,088       $ 48,817       $ (39,298 )    $ (46,791 )    $ (9,875 ) 
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
Derivative Assets and Liabilities Presented in Consolidated Balance Sheet Adjusted from Current Gross

VF records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a gross basis, even though they are subject to master netting agreements. However, if VF were to offset and record the asset and liability balances of all of its forward foreign currency exchange contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets as of March 2014, December 2013 and March 2013 would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

 

     March 2014     December 2013     March 2013  
     Derivative
Asset		     Derivative
Liability		     Derivative
Asset		     Derivative
Liability		     Derivative
Asset		     Derivative
Liability		  
In thousands                         

Gross amounts presented in the Consolidated Balance Sheets

    $ 17,053      $ (39,298 )    $ 16,088      $ (46,791 )    $ 48,817      $ (9,875 ) 

Gross amounts not offset in the Consolidated Balance Sheets

      (10,320 )      10,320        (11,641 )      11,641        (6,110 )      6,110   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net amounts

    $ 6,733      $ (28,978 )    $ 4,447      $ (35,150 )    $ 42,707      $ (3,765 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Derivative Assets and Liabilities Presented in Consolidated Balance Sheet Adjusted from Current Gross

VF records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a gross basis, even though they are subject to master netting agreements. However, if VF were to offset and record the asset and liability balances of all of its forward foreign currency exchange contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets as of March 2014, December 2013 and March 2013 would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

 

     March 2014     December 2013     March 2013  
     Derivative
Asset		     Derivative
Liability		     Derivative
Asset		     Derivative
Liability		     Derivative
Asset		     Derivative
Liability		  
In thousands                         

Gross amounts presented in the Consolidated Balance Sheets

    $ 17,053      $ (39,298 )    $ 16,088      $ (46,791 )    $ 48,817      $ (9,875 ) 

Gross amounts not offset in the Consolidated Balance Sheets

      (10,320 )      10,320        (11,641 )      11,641        (6,110 )      6,110   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net amounts

    $ 6,733      $ (28,978 )    $ 4,447      $ (35,150 )    $ 42,707      $ (3,765 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Derivatives Classified as Current or Noncurrent Based on Maturity Dates

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

 

     March     December     March  
In thousands    2014     2013     2013  

Other current assets

    $ 13,765      $ 12,699      $ 36,830   

Accrued liabilities (current)

      (34,982 )      (36,622 )      (8,018 ) 

Other assets (noncurrent)

      3,288        3,389        11,987   

Other liabilities (noncurrent)

      (4,316 )      (10,169 )      (1,857 ) 
Effects of Cash Flow Hedging included in Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

The effects of cash flow hedging included in VF’s Consolidated Statements of Income and Consolidated Statements of Comprehensive Income are summarized as follows:

 

In thousands    Gain (Loss) on Derivatives
Recognized in OCI
Three Months Ended March 		 

Cash Flow Hedging Relationships

    2014     2013  

Foreign currency exchange

    $ 3,696      $ 55,493   
In thousands    Gain (Loss) Reclassified from
Accumulated OCI into Income
Three Months Ended March 		 

Location of Gain (Loss)

    2014     2013  

Net sales

    $ 1,660      $ (155 ) 

Cost of goods sold

      (5,364 )      3,858   

Other income (expense), net

      (708 )      1,092   

Interest expense

      (1,004 )      (957 ) 
  

 

 

    

 

 

  

Total

    $ (5,416 )    $ 3,838   
  

 

 

    

 

 

  
Effects of Fair Value Hedging Included in Consolidated Statements of Income

Following is a summary of these derivatives included in VF’s Consolidated Statements of Income:

 

          Gain (Loss) on Derivatives  
     Location of Gain (Loss)    Recognized in Income  
In thousands    on Derivatives    Three Months Ended March  

Derivatives Not Designated as Hedges

   

Recognized in Income

    2014     2013  

Foreign currency exchange

    Other income (expense), net    $ (856 )    $ 1,269