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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 27, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number: 1-5256
vfc-20200627_g1.jpg
V. F. CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1180120
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification number)
1551 Wewatta Street
Denver, Colorado 80202
(Address of principal executive offices)
(720) 778-4000
(Registrant’s telephone number, including area code)
8505 E. Orchard Road
Greenwood Village, Colorado 80111
(Former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
(Title of each class)(Trading Symbol(s))(Name of each exchange on which registered)
Common Stock, without par value, stated capital, $0.25 per shareVFCNew York Stock Exchange
0.625% Senior Notes due 2023VFC23New York Stock Exchange
0.250% Senior Notes due 2028VFC28New York Stock Exchange
0.625% Senior Notes due 2032VFC32New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
 
Non-accelerated filer
 
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No   
On July 25, 2020, there were 389,648,638 shares of the registrant’s common stock outstanding.




VF CORPORATION
Table of Contents
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PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED).
VF CORPORATION
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share amounts)June 2020March 2020June 2019
ASSETS
Current assets
Cash and equivalents
$2,145,111  $1,369,028  $560,882  
Accounts receivable, less allowance for doubtful accounts of: June 2020 - $38,179; March 2020 - $37,099; June 2019 - $19,763
934,984  1,308,051  1,211,347  
Inventories
1,402,858  1,293,912  1,381,513  
Short-term investments
700,000      
Other current assets
513,049  444,886  405,205  
Current assets of discontinued operations
565,135  611,139  431,908  
Total current assets6,261,137  5,027,016  3,990,855  
Property, plant and equipment, net
957,309  954,406  826,570  
Intangible assets, net
1,855,764  1,854,545  1,917,517  
Goodwill
1,162,606  1,156,019  1,494,502  
Operating lease right-of-use assets
1,354,308  1,273,514  1,246,985  
Other assets
887,921  867,751  735,275  
Other assets of discontinued operations
    190,260  
TOTAL ASSETS$12,479,045  $11,133,251  $10,401,964  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings
$19,256  $1,228,812  $67,658  
Current portion of long-term debt
1,025  1,018  5,068  
Accounts payable
348,932  407,021  507,575  
Accrued liabilities
1,254,967  1,260,252  1,254,417  
Current liabilities of discontinued operations
91,283  126,781  112,427  
Total current liabilities1,715,463  3,023,884  1,947,145  
Long-term debt
5,609,792  2,608,269  2,126,835  
Operating lease liabilities
1,104,500  1,020,651  1,011,582  
Other liabilities
1,136,692  1,123,113  1,139,512  
Other liabilities of discontinued operations
    25,276  
Commitments and contingencies
Total liabilities9,566,447  7,775,917  6,250,350  
Stockholders’ equity
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at June 2020, March 2020 or June 2019
      
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at June 2020 - 389,641,245; March 2020 - 388,812,158; June 2019 - 397,922,120
97,410  97,203  99,481  
Additional paid-in capital
4,010,817  4,183,780  3,988,385  
Accumulated other comprehensive income (loss)
(897,541) (930,958) (867,386) 
Retained earnings (accumulated deficit)
(298,088) 7,309  931,134  
Total stockholders’ equity2,912,598  3,357,334  4,151,614  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$12,479,045  $11,133,251  $10,401,964  


See notes to consolidated financial statements.
3 VF Corporation Q1 FY21 Form 10-Q

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VF CORPORATION
Consolidated Statements of Operations
(Unaudited)
 Three Months Ended June
(In thousands, except per share amounts)20202019
Net revenues
$1,076,293  $2,050,654  
Costs and operating expenses
Cost of goods sold
506,951  896,284  
Selling, general and administrative expenses
816,151  1,058,405  
Total costs and operating expenses
1,323,102  1,954,689  
Operating income (loss)
(246,809) 95,965  
Interest income
1,313  6,544  
Interest expense
(29,262) (22,127) 
Other income (expense), net
(38,187) 5,554  
Income (loss) from continuing operations before income taxes
(312,945) 85,936  
Income tax expense (benefit)
(35,203) 20,663  
Income (loss) from continuing operations
(277,742) 65,273  
Loss from discontinued operations, net of tax
(7,871) (16,052) 
Net income (loss)
$(285,613) $49,221  
Earnings (loss) per common share - basic
Continuing operations
$(0.71) $0.16  
Discontinued operations
(0.02) (0.04) 
Total earnings (loss) per common share - basic
$(0.73) $0.12  
Earnings (loss) per common share - diluted
Continuing operations
$(0.71) $0.16  
Discontinued operations
(0.02) (0.04) 
Total earnings (loss) per common share - diluted
$(0.73) $0.12  
Weighted average shares outstanding
Basic
388,695  396,727  
Diluted
390,791  401,914  









See notes to consolidated financial statements.
VF Corporation Q1 FY21 Form 10-Q 4

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VF CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
 Three Months Ended June
(In thousands)20202019
Net income (loss)
$(285,613) $49,221  
Other comprehensive income (loss)
Foreign currency translation and other
Gains arising during the period
3,854  12,829  
Reclassification of foreign currency translation losses
42,364    
Income tax effect
6,255  2,943  
Defined benefit pension plans
Amortization of net deferred actuarial losses
2,863  4,019  
Amortization of deferred prior service costs (credits)
(17) 13  
Income tax effect
336  (1,708) 
Derivative financial instruments
Gains (losses) arising during the period
(7,595) 14,774  
Income tax effect
1,530  (3,874) 
Reclassification of net (gains) losses realized
(20,280) (10,495) 
Income tax effect
4,107  2,756  
Other comprehensive income (loss)
33,417  21,257  
Comprehensive income (loss)
$(252,196) $70,478  















See notes to consolidated financial statements.
5 VF Corporation Q1 FY21 Form 10-Q

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VF CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
 Three Months Ended June
(In thousands)20202019
OPERATING ACTIVITIES
Net income (loss)
$(285,613) $49,221  
Loss from discontinued operations, net of tax
(7,871) (16,052) 
Income (loss) from continuing operations, net of tax
(277,742) 65,273  
Adjustments to reconcile net income (loss) to cash used by operating activities:
Depreciation and amortization
63,026  62,236  
Reduction in the carrying amount of right-of-use assets
101,772  92,125  
Stock-based compensation
9,686  33,287  
Provision for doubtful accounts
8,145  1,854  
Pension expense less than contributions
(3,802) (2,837) 
Other, net
32,858  12,546  
Changes in operating assets and liabilities:
Accounts receivable
372,754  165,909  
Inventories
(100,129) (204,622) 
Accounts payable
(59,768) 17,662  
Income taxes
(65,128) 6,473  
Accrued liabilities
(26,917) (228,548) 
Operating lease right-of-use assets and liabilities
(51,579) (101,052) 
Other assets and liabilities
(13,630) 3,471  
Cash used by operating activities - continuing operations
(10,454) (76,223) 
Cash provided by operating activities - discontinued operations
7,266  10,043  
Cash used by operating activities
(3,188) (66,180) 
INVESTING ACTIVITIES
Purchases of short-term investments
(700,000)   
Capital expenditures
(69,191) (45,387) 
Software purchases
(13,477) (13,759) 
Other, net
(573) 62,930  
Cash provided (used) by investing activities - continuing operations
(783,241) 3,784  
Cash used by investing activities - discontinued operations
(1,914) (4,415) 
Cash used by investing activities
(785,155) (631) 
FINANCING ACTIVITIES
Net decrease in short-term borrowings
(1,209,556) (585,477) 
Payments on long-term debt
(222) (1,479) 
Payment of debt issuance costs
(21,271)   
Proceeds from long-term debt
2,996,090    
Cash dividends paid
(186,746) (202,538) 
Cash received from Kontoor Brands, net of cash transferred of $126.8 million
  906,148  
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings
(15,634) 7,199  
Cash provided by financing activities
1,562,661  123,853  
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash
4,126  5,078  
Net change in cash, cash equivalents and restricted cash
778,444  62,120  
Cash, cash equivalents and restricted cash – beginning of year
1,411,322  556,587  
Cash, cash equivalents and restricted cash – end of period
$2,189,766  $618,707  

Continued on next page.
See notes to consolidated financial statements.
VF Corporation Q1 FY21 Form 10-Q 6

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VF CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
 Three Months Ended June
(In thousands)20202019
Balances per Consolidated Balance Sheets:
Cash and cash equivalents$2,145,111  $560,882  
Other current assets1,216  3,909  
Current assets of discontinued operations42,986  45,198  
Other assets453  8,718  
Total cash, cash equivalents and restricted cash$2,189,766  $618,707  















































See notes to consolidated financial statements.
7 VF Corporation Q1 FY21 Form 10-Q

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VF CORPORATION
Consolidated Statements of Stockholders’ Equity
(Unaudited)
Three Months Ended June 2020
Additional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)
 Common Stock
 (In thousands, except share amounts)SharesAmountsTotal
Balance, March 2020388,812,158  $97,203  $4,183,780  $(930,958) $7,309  $3,357,334  
Net income (loss)
—  —  —  —  (285,613) (285,613) 
Dividends on Common Stock ($0.48 per share)
—  —  (186,746) —  —  (186,746) 
Stock-based compensation, net
829,087  207  13,783  —  (19,784) (5,794) 
Foreign currency translation and other
—  —  —  52,473  —  52,473  
Defined benefit pension plans
—  —  —  3,182  —  3,182  
Derivative financial instruments
—  —  —  (22,238) —  (22,238) 
Balance, June 2020389,641,245  $97,410  $4,010,817  $(897,541) $(298,088) $2,912,598  
Three Months Ended June 2019
Additional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings
Common Stock
 (In thousands, except share amounts)SharesAmountsTotal
Balance, March 2019396,824,662  $99,206  $3,921,784  $(902,075) $1,179,601  $4,298,516  
Adoption of new accounting standard, ASU 2016-02
—  —  —  —  (2,491) (2,491) 
Adoption of new accounting standard, ASU 2018-02
—  —  —  (61,861) 61,861    
Net income
—  —  —  —  49,221  49,221  
Dividends on Common Stock ($0.51 per share)
—  —  —  —  (202,538) (202,538) 
Stock-based compensation, net
1,097,458  275  66,601  —  (24,312) 42,564  
Foreign currency translation and other
—  —  —  15,772  —  15,772  
Defined benefit pension plans
—  —  —  2,324  —  2,324  
Derivative financial instruments
—  —  —  3,161    3,161  
Spin-off of Jeans Business
—  —  —  75,293  (130,208) (54,915) 
Balance, June 2019397,922,120  $99,481  $3,988,385  $(867,386) $931,134  $4,151,614  















See notes to consolidated financial statements.

VF Corporation Q1 FY21 Form 10-Q 8

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VF CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSPAGE NUMBER
NOTE 1
NOTE 2
NOTE 3
NOTE 4
NOTE 5
NOTE 6
NOTE 7
NOTE 8
NOTE 9
NOTE 10
NOTE 11
NOTE 12
NOTE 13
NOTE 14
NOTE 15
NOTE 16
NOTE 17
NOTE 18
NOTE 19
NOTE 20

NOTE 1 — BASIS OF PRESENTATION

VF Corporation (together with its subsidiaries, collectively known as “VF” or the “Company”) uses a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. The Company's current fiscal year runs from March 29, 2020 through April 3, 2021 ("Fiscal 2021"). Accordingly, this Form 10-Q presents our first quarter of Fiscal 2021. For presentation purposes herein, all references to periods ended June 2020 and June 2019 relate to the fiscal periods ended on June 27, 2020 and June 29, 2019, respectively. References to March 2020 relate to information as of March 28, 2020.
On January 21, 2020, VF announced its decision to explore the divestiture of its Occupational Workwear business. The Occupational Workwear business is comprised primarily of the following brands and businesses: Red Kap®, VF Solutions®, Bulwark®, Workrite®, Walls®, Terra®, Kodiak®, Work Authority® and Horace Small®. The business also includes certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel. During the three months ended March 2020, the Company determined that the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria and expects to divest this business during Fiscal 2021. Accordingly, the Company has reported the results of the Occupational Workwear business and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively. The related held-for-
sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets. These changes have been applied to all periods presented.
On May 22, 2019, VF completed the spin-off of its Jeans business, which included the Wrangler®, Lee® and Rock & Republic® brands, as well as the VF OutletTM business, into an independent, publicly traded company. As a result, VF reported the results for the Jeans business and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively. These changes have been applied to all periods presented.
Certain prior year amounts have been reclassified to conform to the Fiscal 2021 presentation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. Similarly, the March 2020 condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management,
9 VF Corporation Q1 FY21 Form 10-Q

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the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations and cash flows of VF for the interim periods presented. Operating results for the three months ended June 2020 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal 2021. For further information, refer to the consolidated financial statements and notes included in VF’s Annual Report on Form 10-K for the year ended March 28, 2020 (“Fiscal 2020 Form 10-K”).
In preparing the condensed consolidated financial statements, management makes estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. The duration and severity of the novel coronavirus ("COVID-19") pandemic, which is subject to uncertainty, is having a significant impact on VF's business. Management's estimates and assumptions have contemplated both current and expected impacts related to COVID-19 based on available information. Actual results may differ from those estimates.
NOTE 2 — RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which requires entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The FASB has subsequently issued updates to the standard to provide additional clarification on specific topics. The guidance became effective for VF in the first quarter of Fiscal 2021, but did not have a material impact on VF's consolidated financial statements. As a result of the adoption of this guidance, the following significant accounting policy from the Company’s Fiscal 2020 Form 10-K has been updated:
Accounts Receivable
Trade accounts receivable are recorded at invoiced amounts, less contractual allowances for trade terms, sales incentive programs and discounts. Royalty receivables are recorded at amounts earned based on the licensees' sales of licensed products, subject in some cases to contractual minimum royalties due from individual licensees. VF maintains an allowance for doubtful accounts for estimated losses that will result from the inability of customers and licensees to make required payments. The allowance is determined based on review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables, which are grouped based on similar risk characteristics, considering historical trends, adjusted for current economic conditions and reasonable and supportable forecasts when appropriate. The allowance represents the current estimate of lifetime expected credit losses for all outstanding accounts receivable and reflects the Company's ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses and future expectations. Receivables are written off against the allowance when it is determined that the amounts will not be recovered.
In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement", an update that modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The guidance became effective for VF in the first quarter of Fiscal 2021, but did not have a material impact on VF's disclosures.
In August 2018, the FASB issued ASU No. 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract", an update that aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance became effective for VF in the first quarter of Fiscal 2021, but did not have a material impact on VF's consolidated financial statements.
Recently Issued Accounting Standards
In August 2018, the FASB issued ASU No. 2018-14, "Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans", an update that modifies the annual disclosure requirements for employers who sponsor defined benefit pension or other postretirement plans. The guidance will be effective for VF in Fiscal 2021, but the Company does not expect the adoption of this guidance to have a material impact on VF's disclosures.
In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", an update that amends and simplifies the accounting for income taxes by removing certain exceptions in existing guidance and providing new guidance to reduce complexity in certain areas. The guidance will be effective for VF in the first quarter of the year ending April 2, 2022 ("Fiscal 2022") with early adoption permitted. The Company is evaluating the impact that adopting this guidance will have on VF's consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting", an update that provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The optional guidance is provided to ease the potential burden of accounting for reference rate reform. The guidance is effective and can be adopted no later than December 31, 2022. The Company is evaluating the impact that adopting this guidance would have on VF's consolidated financial statements.
VF Corporation Q1 FY21 Form 10-Q 10

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NOTE 3 — REVENUES
The following table provides information about accounts receivable, contract assets and contract liabilities:
(In thousands)June 2020March 2020June 2019
Accounts receivable, net$934,984  $1,308,051  $1,211,347  
Contract assets (a)
2,487  1,181  1,576  
Contract liabilities (b)
45,622  37,498  42,196  
(a)Included in the other current assets line item in the Consolidated Balance Sheets.
(b)Included in the accrued liabilities and other liabilities line items in the Consolidated Balance Sheets.

For the three months ended June 2020, the Company recognized $35.6 million of revenue that was included in the contract liability balance during the period, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations are satisfied within the same period, such as order deposits from customers. The change in the contract asset and contract liability balances primarily results from the timing differences between the Company's satisfaction of performance obligations and the customer's payment.
For the three months ended June 2020, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.
As of June 2020, the Company expects to recognize $62.9 million of fixed consideration related to the future minimum guarantees
in effect under its licensing agreements and expects such amounts to be recognized over time based on the contractual terms, including $15.4 million in the remainder of Fiscal 2021. The variable consideration related to licensing arrangements is not disclosed as a remaining performance obligation as it qualifies for the sales-based royalty exemption. VF has also elected the practical expedient to not disclose the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or less.
As of June 2020, there were no arrangements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and the fixed consideration related to future minimum guarantees discussed above.
Disaggregation of Revenue
The following tables disaggregate our revenues by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues were affected by economic factors. The wholesale channel includes fees generated from sourcing activities as the customers and point-in-time revenue recognition are similar to other wholesale arrangements.
Three Months Ended June 2020
(In thousands)OutdoorActiveWorkOtherTotal
Channel revenues
Wholesale$158,506  $241,164  $117,604  $1,275  $518,549  
Direct-to-consumer180,014  324,201  40,615  44  544,874  
Royalty2,708  5,951  4,211    12,870  
Total$341,228  $571,316  $162,430  $1,319  $1,076,293  
Geographic revenues
United States$152,477  $265,507  $114,632  $  $532,616  
International188,751  305,809  47,798  1,319  543,677  
Total$341,228  $571,316  $162,430  $1,319  $1,076,293  
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Three Months Ended June 2019
(In thousands)