Quarterly report pursuant to Section 13 or 15(d)

Derivative Financial Instruments and Hedging Activities (Tables)

v2.4.1.9
Derivative Financial Instruments and Hedging Activities (Tables)
 3 Months Ended
Apr. 04, 2015
Outstanding Derivatives on Individual Contract Basis

The following table presents outstanding derivatives on an individual contract basis:

 

     Fair Value of Derivatives with
Unrealized Gains		      Fair Value of Derivatives with
Unrealized Losses		  
In thousands    March
2015		      December
2014		      March
2014		      March
2015		     December
2014		     March
2014		  

Foreign currency exchange contracts designated as hedging instruments

    $ 158,557       $ 104,860       $ 16,936       $ (42,975 )    $ (31,711 )    $ (38,660 ) 

Foreign currency exchange contracts not designated as hedging instruments

      342         404         117         (707 )      (58 )      (638 ) 
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total derivatives

 $ 158,899    $ 105,264    $ 17,053    $ (43,682 )  $ (31,769 )  $ (39,298 ) 
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
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 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 would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

 

     March 2015     December 2014     March 2014  
In thousands    Derivative
Asset		     Derivative
Liability		     Derivative
Asset		     Derivative
Liability		     Derivative
Asset		     Derivative
Liability		  

Gross amounts presented in the Consolidated Balance Sheets

    $ 158,899      $ (43,682 )    $ 105,264      $ (31,769 )    $ 17,053      $ (39,298 ) 

Gross amounts not offset in the Consolidated Balance Sheets

      (42,701 )      42,701        (30,724 )      30,724        (10,320 )      10,320   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net amounts

 $ 116,198    $ (981 )  $ 74,540    $ (1,045 )  $ 6,733    $ (28,978 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
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 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 would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

 

     March 2015     December 2014     March 2014  
In thousands    Derivative
Asset		     Derivative
Liability		     Derivative
Asset		     Derivative
Liability		     Derivative
Asset		     Derivative
Liability		  

Gross amounts presented in the Consolidated Balance Sheets

    $ 158,899      $ (43,682 )    $ 105,264      $ (31,769 )    $ 17,053      $ (39,298 ) 

Gross amounts not offset in the Consolidated Balance Sheets

      (42,701 )      42,701        (30,724 )      30,724        (10,320 )      10,320   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net amounts

 $ 116,198    $ (981 )  $ 74,540    $ (1,045 )  $ 6,733    $ (28,978 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Derivatives Classified as Current or Noncurrent Based on Maturity Dates

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

 

In thousands    March
2015		      December
2014		      March
2014		  

Other current assets

    $ 138,564       $ 84,995       $ 13,765   

Accrued liabilities (current)

      (37,949 )       (26,968 )       (34,982 ) 

Other assets (noncurrent)

      20,335         20,269         3,288   

Other liabilities (noncurrent)

      (5,733 )       (4,801 )       (4,316 ) 
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

    2015      2014  

Foreign currency exchange

    $ 68,010       $ 3,696   
In thousands    Gain (Loss) Reclassified from
Accumulated OCI into Income
Three Months Ended March 		 

Location of Gain (Loss)

    2015      2014  

Net sales

    $ (17,055 )     $ 1,660   

Cost of goods sold

      19,368         (5,364 ) 

Other income (expense), net

      6,835         (708 ) 

Interest expense

      (1,053 )       (1,004 ) 
  

 

 

     

 

 

  

Total

 $ 8,095    $ (5,416 ) 
  

 

 

     

 

 

  
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:

 

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

Derivatives Not Designated as Hedges

      2015      2014  

Foreign currency exchange

    Other income (expense), net   $ (1,031 )     $ (856 )