VF Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

PENSION PLANS

PENSION PLANS

3 Months Ended

Jun. 30, 2018

The components of pension cost for VF’s defined benefit plans were as follows:



	Three Months Ended June
(In thousands)	2018			2017
Service cost – benefits earned during the period	$	6,224		$	6,115
Interest cost on projected benefit obligations	16,013			14,709
Expected return on plan assets	(23,834		)	(23,797		)
Pension settlement charges	6,842			—
Pension curtailment losses	9,483			—
Amortization of deferred amounts:
Net deferred actuarial losses	8,822			10,002
Deferred prior service costs	669			645
Net periodic pension cost	$	24,219		$	7,674

The amounts reported in these disclosures have not been segregated between continuing and discontinued operations.

On April 1, 2018, VF adopted ASU 2017-07, "Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost", which requires the Company to disaggregate the service cost component from other components of net periodic pension cost. Accordingly, in the Consolidated Statements of Income, VF has reported the service cost component within operating income and the other components of net periodic pension cost (which include interest cost, expected return on plan assets, amortization of prior service costs or credits and actuarial gains and losses) in the other income (expense), net line item.

VF contributed $21.7 million to its defined benefit plans during the three months ended June 2018, and intends to make approximately $20.1 million of contributions during the remainder of Fiscal 2019.

In the first quarter of Fiscal 2019, VF approved a freeze of all future benefit accruals under the U.S. qualified defined benefit pension plan and the supplemental defined benefit pension plan, effective December 31, 2018. Accordingly, the Company recognized a $9.5 million pension curtailment loss in the other income (expense), net line item in the Consolidated Statement of Income for the three months ended June 2018. Actuarial valuations were obtained as of June 30, 2018.

Additionally, VF reported $6.8 million in settlement charges in the other income (expense), net line item in the Consolidated Statement of Income for the three months ended June 2018 related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan. An actuarial valuation was obtained as of April 30, 2018 ("April 2018").

Actuarial assumptions used in the interim valuations were reviewed and revised as appropriate. The discount rates used to determine pension obligations were as follows:



	June 2018		April 2018
U.S. qualified defined benefit pension plan	4.25	%	N/A
Supplemental defined benefit pension plan	4.24	%	4.22	%