Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
 6 Months Ended
Sep. 28, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Financial assets and financial liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows:
•Level 1 — Quoted prices in active markets for identical assets or liabilities.
•Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable
data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities, or (iii) information derived from or corroborated by observable market data.
•Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be VF’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.
Recurring Fair Value Measurements
The following table summarizes financial assets and financial liabilities that are measured and recorded in the consolidated financial statements at fair value on a recurring basis:
  Total Fair Value
Fair Value Measurement Using (a)
(In thousands) Level 1 Level 2 Level 3
September 2024
Financial assets:
Cash equivalents:
Money market funds $ 108,232  $ 108,232  $ —  $ — 
Time deposits 22,929  22,929  —  — 
Derivative financial instruments 16,445  —  16,445  — 
Deferred compensation and other 95,747  95,747  —  — 
Financial liabilities:
Derivative financial instruments 54,569  —  54,569  — 
Deferred compensation 92,024  —  92,024  — 
Contingent consulting fees 13,563  —  —  13,563 
Total Fair Value
Fair Value Measurement Using (a)
(In thousands) Level 1 Level 2 Level 3
March 2024
Financial assets:
Cash equivalents:
Money market funds $ 171,931  $ 171,931  $ —  $ — 
Time deposits 54,853  54,853  —  — 
Derivative financial instruments 32,548  —  32,548  — 
Deferred compensation and other 95,236  95,236  —  — 
Financial liabilities:
Derivative financial instruments 40,234  —  40,234  — 
Deferred compensation 90,804  —  90,804  — 
(a)There were no transfers among the levels within the fair value hierarchy during the six months ended September 2024 or the year ended March 2024.
VF’s cash equivalents include money market funds and time deposits with maturities within three months of their purchase dates, that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign exchange forward contracts and interest rate swap contracts, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies and interest rate forward curves, and considers the credit risk of the Company and its counterparties. VF’s deferred compensation assets primarily represent investments held within plan trusts as an economic hedge of the related deferred compensation liabilities. These investments primarily include mutual funds (Level 1) that are valued based on quoted prices in active markets. Liabilities related to VF’s deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments.
During the three months ended September 2024, VF entered into a contract with a consulting firm to support Reinvent, VF's transformation program. The contract includes contingent fees tied to increases in VF's stock price. These fees are accounted for under Accounting Standards Codification Topic 718 — Stock Compensation ("ASC 718") as a liability award to a non-employee. Accordingly, VF has utilized the Monte Carlo valuation model
(Level 3) to estimate the fair value of the award at its inception, and will adjust such fair value on a quarterly basis over the measurement period, which concludes on June 30, 2027. The valuation includes the effects of market conditions that are based upon VF's stock price performance relative to stock price targets and a minimum payout dependent on the Standard & Poor's 500 Index return and VF's TSR versus that of peer companies over the measurement period. As of September 2024, the total fair value of the contingent fees was $30.7 million, of which $13.6 million was recognized as of September 2024.
All other significant financial assets and financial liabilities are recorded in the consolidated financial statements at cost, except life insurance contracts which are recorded at cash surrender value. These other financial assets and financial liabilities include cash held as demand deposits, accounts receivable, short-term borrowings, accounts payable and accrued liabilities. At September 2024 and March 2024, their carrying values approximated their fair values. Additionally, at September 2024 and March 2024, the carrying values of VF’s long-term debt, including the current portion, were $5,778.6 million and $5,703.0 million, respectively, compared with fair values of $5,437.7 million and $5,263.3 million at those respective dates. Fair value for long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.