Annual report pursuant to Section 13 and 15(d)

RESTRUCTURING

v3.19.1
RESTRUCTURING
 12 Months Ended
Mar. 30, 2019
Restructuring and Related Activities [Abstract]  
RESTRUCTURING
RESTRUCTURING

The Company typically incurs restructuring charges related to strategic initiatives and cost optimization of business activities, primarily related to severance and employee-related benefits.
Of the $107.6 million of restructuring charges recognized in the year ended March 2019, $70.2 million were reflected in selling, general and administrative expenses and $37.4 million in cost of goods sold. Of the $14.9 million million of restructuring charges recognized in the three months ended March 2018, $10.8 million were reflected in selling, general and administrative expenses and $4.1 million in cost of goods sold. Of the $27.0 million of restructuring charges recognized in the year ended December 2017, $20.2 million were reflected in selling, general and administrative expenses and $6.8 million in cost of goods sold. Of the $55.1 million of restructuring charges recognized in the year ended December 2016, $31.8 million were reflected in selling, general and administrative expenses and $23.3 million in cost of goods sold.
The Company did not recognize significant incremental costs related to the actions for the years ended December 2017 and 2016 during the three months ended March 2018 or the year ended March 2019, and has completed most of the related restructuring activities as of March 2019. Of the total restructuring accrual at March 2019, $86.6 million is expected to be paid out within the next 12 months and is classified within accrued liabilities. The remaining $5.7 million will be paid out beyond the next 12 months and thus is classified within other liabilities.
The components of the restructuring charges are as follows:
(In thousands)
 
Year Ended March 2019 Charges
 
 
Three Months Ended March 2018 Charges
 
Year Ended December 2017 Charges
 
Year Ended December 2016 Charges
Severance and employee-related benefits
 
$
79,693

 
 
$
14,927

 
$
22,611

 
$
50,395

Asset impairments
 
5,705

 
 
—

 
—

 
3,394

Inventory write-downs
 
6,574

 
 
—

 
—

 
—

Contract termination and other
 
15,643

 
 
—

 
4,436

 
1,310

Total restructuring charges
 
$
107,615

 
 
$
14,927

 
$
27,047

 
$
55,099


Restructuring costs by business segment are as follows:
(In thousands)
 
Year Ended March 2019 Charges
 
 
Three Months Ended March 2018 Charges
 
Year Ended December 2017 Charges
 
Year Ended December 2016 Charges
Outdoor
 
$
38,952

 
 
$
4,550

 
$
10,393

 
$
14,137

Active
 
13,579

 
 
—

 
2,400

 
3,946

Work
 
10,003

 
 
7,802

 
3,895

 
1,308

Jeans
 
39,936

 
 
2,575

 
6,993

 
20,357

Other
 
167

 
 
—

 
—

 
1,277

Corporate
 
4,978

 
 
—

 
3,366

 
14,074

Total
 
$
107,615

 
 
$
14,927

 
$
27,047

 
$
55,099


The activity in the restructuring accrual is as follows:
(In thousands)
 
Severance
 
Other
 
Total
 
Accrual at December 2016
 
$
49,728

 
$
878

 
$
50,606

 
Charges
 
22,611

 
4,436

 
27,047

 
Cash payments and settlements
 
(37,349
)
 
(878
)
 
(38,227
)
 
Adjustments to accruals
 
(2,783
)
 
—

 
(2,783
)
 
Currency translation
 
1,601

 
—

 
1,601

 
Accrual at December 2017
 
33,808

 
4,436

 
38,244

 
Charges
 
14,927

 
—

 
14,927

 
Cash payments and settlements
 
(4,658
)
 
(3,992
)
 
(8,650
)
 
Adjustments to accruals
 
(1,033
)
 
—

 
(1,033
)
 
Currency translation
 
101

 
—

 
101

 
Accrual at March 2018
 
43,145

 
444

 
43,589

 
Charges
 
79,693

 
15,643

 
95,336

 
Cash payments and settlements
 
(35,530
)
 
(4,917
)
 
(40,447
)
 
Adjustments to accruals
 
(5,800
)
 
100

 
(5,700
)
 
Currency translation
 
(272
)
 
(235
)
 
(507
)
 
Accrual at March 2019
 
$
81,236

 
$
11,035

 
$
92,271

 


The Company has incurred costs associated with the relocation of VF's global headquarters and certain brands to Denver, Colorado. The total amount of charges recognized for the year ended March 2019 was $47.4 million, of which $18.8 million relates to severance and employee-related benefits and is included in the tables above. The remaining $28.6 million relates to other relocation costs, the majority of which has been paid as of March 2019.