Quarterly report pursuant to Section 13 or 15(d)

Capital and Accumulated Other Comprehensive Income (Loss)

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Capital and Accumulated Other Comprehensive Income (Loss)
 6 Months Ended
Jul. 04, 2015
Capital and Accumulated Other Comprehensive Income (Loss)

Note H – Capital and Accumulated Other Comprehensive Income (Loss)

During the first six months of 2015, the Company purchased 10.0 million shares of Common Stock in open market transactions for $730.1 million under its share repurchase program authorized by VF’s Board of Directors. These transactions were treated as treasury stock transactions.

Common Stock outstanding is net of shares held in treasury which are, in substance, retired. During the first six months of 2015, VF restored 10.1 million treasury shares to an unissued status, after which they were no longer recognized as shares held in treasury. There were 23,400 shares held in treasury at the end of June 2015, and no shares held in treasury at the end of December 2014 or June 2014. The excess of the cost of treasury shares acquired over the $0.25 per share stated value of Common Stock is deducted from retained earnings.

VF Common Stock is also held by the Company’s deferred compensation plans and is treated as treasury shares for financial reporting purposes. During the first half of 2015, the Company purchased 20,000 shares of Common Stock in open market transactions for $1.4 million. Balances related to shares held for deferred compensation plans are as follows:

 

In millions, except share amounts    June
2015 		     December
2014 		     June
2014 		 

Shares held for deferred compensation plans

      565,549         637,504         695,204   

Cost of shares held for deferred compensation plans

    $ 6.7       $ 7.7       $ 8.2   

Accumulated Other Comprehensive Income (Loss)

Comprehensive income consists of 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 OCI are reported, net of related income taxes, in accumulated other comprehensive income (loss) in stockholders’ equity, as follows:

 

In thousands    June
2015 		     December
2014 		     June
2014 		 

Foreign currency translation

    $ (599,297 )     $ (356,941 )     $ 70,525   

Defined benefit pension plans

      (360,125 )       (377,134 )       (264,187 ) 

Derivative financial instruments

      45,796         31,389         (38,684 ) 

Marketable securities

      —           414         134   
  

 

 

     

 

 

     

 

 

  

Accumulated other comprehensive income (loss)

    $ (913,626 )     $ (702,272 )     $ (232,212 ) 
  

 

 

     

 

 

     

 

 

  

 

The changes in accumulated other comprehensive income (loss), net of related taxes, are as follows:

 

     Three Months Ended June 2015  
In thousands    Foreign
Currency
Translation 		    Defined
Benefit
Pension Plans 		    Derivative
Financial
Instruments 		    Marketable
Securities 		    Total  

Balance, March 2015

    $ (603,022 )    $ (367,841 )    $ 67,757      $ 714      $ (902,392 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Other comprehensive income (loss) before reclassification

      3,725        —          (12,813 )      —          (9,088 ) 

Amounts reclassified from accumulated other comprehensive income (loss)

      —          7,716        (9,148 )      (714 )      (2,146 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net other comprehensive income (loss)

      3,725        7,716        (21,961 )      (714 )      (11,234 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, June 2015

    $ (599,297 )    $ (360,125 )    $ 45,796      $ —        $ (913,626 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     Three Months Ended June 2014  
In thousands    Foreign
Currency
Translation 		    Defined
Benefit
Pension Plans 		    Derivative
Financial
Instruments 		    Marketable
Securities 		    Total  

Balance, March 2014

    $ 97,060      $ (270,830 )    $ (36,223 )    $ 504      $ (209,489 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Other comprehensive income (loss) before reclassification

      (26,535 )      —          (6,957 )      (370 )      (33,862 ) 

Amounts reclassified from accumulated other comprehensive income (loss)

      —          6,643        4,496        —          11,139   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net other comprehensive income (loss)

      (26,535 )      6,643        (2,461 )      (370 )      (22,723 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, June 2014

    $ 70,525      $ (264,187 )    $ (38,684 )    $ 134      $ (232,212 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     Six Months Ended June 2015  
In thousands    Foreign
Currency
Translation 		    Defined
Benefit
Pension Plans 		    Derivative
Financial
Instruments 		    Marketable
Securities 		    Total  

Balance, December 2014

    $ (356,941 )    $ (377,134 )    $ 31,389      $ 414      $ (702,272 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Other comprehensive income (loss) before reclassification

      (242,356 )      —          28,469        300        (213,587 ) 

Amounts reclassified from accumulated other comprehensive income (loss)

      —          17,009        (14,062 )      (714 )      2,233   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net other comprehensive income (loss)

      (242,356 )      17,009        14,407        (414 )      (211,354 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, June 2015

    $ (599,297 )    $ (360,125 )    $ 45,796      $ —        $ (913,626 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     Six Months Ended June 2014  
In thousands    Foreign
Currency
Translation 		    Defined
Benefit
Pension Plans 		    Derivative
Financial
Instruments 		    Marketable
Securities 		    Total  

Balance, December 2013

    $ 106,647      $ (277,451 )    $ (41,754 )    $ 838      $ (211,720 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Other comprehensive income (loss) before reclassifications

      (36,122 )      —          (4,714 )      (704 )      (41,540 ) 

Amounts reclassified from accumulated other comprehensive income (loss)

      —          13,264        7,784        —          21,048   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net other comprehensive income (loss)

      (36,122 )      13,264        3,070        (704 )      (20,492 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, June 2014

    $ 70,525      $ (264,187 )    $ (38,684 )    $ 134      $ (232,212 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

Reclassifications out of accumulated other comprehensive income (loss) are as follows:

 

In thousands    Affected Line Item in the                            
Details About Accumulated Other    Consolidated Statements    Three Months Ended June      Six Months Ended June  

Comprehensive Income (Loss) Components

   

of Income

    2015      2014      2015      2014  

Amortization of defined benefit pension plans:

               

Net deferred actuarial losses

        (a)    $ (15,495)       $ (9,389)       $ (30,992)       $ (18,773)   

Deferred prior service costs

        (a)      (759)         (1,362)         (1,521)         (2,724)   

Pension settlement charge

    Selling, general and administrative expenses      (1,592)         —           (1,592)         —     
     

 

 

     

 

 

     

 

 

     

 

 

  
  

Total before tax

      (17,846)         (10,751)         (34,105)         (21,497)   
  

Tax benefit

      10,130         4,108         17,096         8,233   
     

 

 

     

 

 

     

 

 

     

 

 

  
  

Net of tax

      (7,716)         (6,643)         (17,009)         (13,264)   
     

 

 

     

 

 

     

 

 

     

 

 

  

Gains (losses) on derivative financial instruments:

               

Foreign exchange contracts

    Net sales      (11,790)         (1,542)         (28,845)         118   

Foreign exchange contracts

    Cost of goods sold      22,123         (4,339)         41,491         (9,703)   

Foreign exchange contracts

    Other income (expense), net      6,139         (507)         12,974         (1,215)   

Interest rate contracts

    Interest expense      (1,069)         (1,019)         (2,122)         (2,023)   
     

 

 

     

 

 

     

 

 

     

 

 

  
  

Total before tax

      15,403         (7,407)         23,498         (12,823)   
  

Tax benefit (expense)

      (6,255)         2,911         (9,436)         5,039   
     

 

 

     

 

 

     

 

 

     

 

 

  
  

Net of tax

      9,148         (4,496)         14,062         (7,784)   
     

 

 

     

 

 

     

 

 

     

 

 

  

Gains (losses) on sale of marketable securities

    Other income (expense), net      1,177         —           1,177         —     
  

Tax expense

      (463)         —           (463)         —     
     

 

 

     

 

 

     

 

 

     

 

 

  
  

Net of tax

      714         —           714         —     
     

 

 

     

 

 

     

 

 

     

 

 

  

Total reclassifications for the period

    Net of tax    $ 2,146       $ (11,139)       $ (2,233)       $ (21,048)   
     

 

 

     

 

 

     

 

 

     

 

 

  

 

(a) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost (see Note G for additional details).