VF Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Commitments

Commitments

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

VF is obligated under noncancelable operating leases related primarily to retail stores, office space, distribution facilities and equipment. Rent expense, net of sublease income that was not significant in any period, was included in the Consolidated Statements of Income as follows:



	2016		2015		2014
	In thousands
Minimum rent expense	$	360,226	$	318,402	$	305,149
Contingent rent expense	19,549		25,467		22,399
Rent expense	$	379,775	$	343,869	$	327,548

Future minimum lease payments during the noncancelable lease term are $344.0 million, $272.9 million, $205.3 million, $149.7 million and $96.2 million for the years 2017 through 2021, respectively, and $150.8 million thereafter.

VF has entered into licensing agreements that provide VF rights to market products under trademarks owned by other parties. Royalties under these agreements are recognized in cost of goods sold in the Consolidated Statements of Income. Certain of these agreements contain minimum royalty and minimum advertising requirements. Future minimum royalty payments, including any required advertising payments, are $81.8 million, $106.5 million, $103.8 million, $47.3 million and $48.6 million for the years 2017 through 2021, respectively, and $0.2 million thereafter.

In the ordinary course of business, VF has entered into purchase commitments for raw materials, contract production and finished products. These agreements typically range from 2 to 6 months in duration and require total payments of $1.7 billion in 2017 and $2.7 million in 2018.

VF has entered into commitments for (i) service and maintenance agreements related to its management information systems, (ii) capital spending and (iii) advertising. Future payments under these agreements are $141.6 million, $38.9 million, $6.7 million, $4.3 million and $1.8 million for the years 2017 through 2021, respectively, and $0.3 million thereafter.

Surety bonds, customs bonds, standby letters of credit and international bank guarantees, all of which represent contingent guarantees of performance under self-insurance and other programs, totaled $122.2 million as of December 2016. These commitments would only be drawn upon if VF were to fail to meet its claims or other obligations.