vfc-20220101

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 January 1, 2022

☐ 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

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)


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 share	VFC	New York Stock Exchange
0.625% Senior Notes due 2023	VFC23	New York Stock Exchange
0.250% Senior Notes due 2028	VFC28	New York Stock Exchange
0.625% Senior Notes due 2032	VFC32	New 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 filer

☑

Accelerated 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 January 21, 2022, there were 388,901,667 shares of the registrant’s common stock outstanding.

VF CORPORATION

Table of Contents


			PAGE NUMBER
Part I — Financial Information			3
Item 1 — Financial Statements (Unaudited)			3
Consolidated Balance Sheets: December 2021, March 2021 and December 2020			3
Consolidated Statements of Operations: Three and nine months ended December 2021 and December 2020			4
Consolidated Statements of Comprehensive Income : Three and nine months ended December 2021 and December 2020			5
Consolidated Statements of Cash Flows: Nine months ended December 2021 and December 2020			6
Consolidated Statements of Stockholders’ Equity: Three and nine months ended December 2021 and December 2020			8
Notes to Consolidated Financial Statements			10
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3 — Quantitative and Qualitative Disclosures about Market Risk			42
Item 4 — Controls and Procedures			42
Part II — Other Information			43
Item 1 — Legal Proceedings			43
Item 1A — Risk Factors			43
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds			43
Item 6 — Exhibits			44
Signatures			45

Table of Contents

PART I — FINANCIAL INFORMATION


ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED).

VF CORPORATION

Consolidated Balance Sheets

(Unaudited)


(In thousands, except share amounts)	December 2021		March 2021		December 2020
ASSETS
Current assets
Cash and equivalents	$	1,333,839	$	815,750	$	3,254,236
Accounts receivable, less allowance for doubtful accounts of: December 2021 - $33,363; March 2021 - $33,654; December 2020 - $39,622	1,495,859		1,298,020		1,411,565
Inventories	1,287,210		1,061,839		1,075,983
Short-term investments	—		598,806		599,403
Other current assets	483,738		423,877		383,384

Current assets of discontinued operations	—		587,578		560,648
Total current assets	4,600,646		4,785,870		7,285,219
Property, plant and equipment, net	1,049,691		975,876		955,845
Intangible assets, net	3,010,517		3,029,545		1,862,042
Goodwill	2,409,260		2,425,427		1,194,212
Operating lease right-of-use assets	1,302,545		1,474,434		1,476,503
Other assets	1,163,663		1,062,877		970,520

TOTAL ASSETS	$	13,536,322	$	13,754,029	$	13,744,341
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	106,010	$	11,061	$	299,748
Current portion of long-term debt	500,915		1,023		1,006
Accounts payable	559,716		463,208		412,324
Accrued liabilities	2,057,237		1,609,928		1,664,760

Current liabilities of discontinued operations	—		125,257		120,185
Total current liabilities	3,223,878		2,210,477		2,498,023
Long-term debt	4,646,379		5,709,149		5,786,552
Operating lease liabilities	1,093,013		1,236,461		1,211,655
Other liabilities	919,652		1,541,778		1,109,937

Total liabilities	9,882,922		10,697,865		10,606,167
Commitments and contingencies
Stockholders’ equity
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at December 2021, March 2021 or December 2020	—		—		—
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at December 2021 - 388,885,032; March 2021 - 391,941,477; December 2020 - 390,985,837	97,221		97,985		97,746
Additional paid-in capital	3,884,935		3,777,645		3,735,896
Accumulated other comprehensive income (loss)	(937,457)		(1,009,000)		(995,963)
Retained earnings	608,701		189,534		300,495
Total stockholders’ equity	3,653,400		3,056,164		3,138,174
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	13,536,322	$	13,754,029	$	13,744,341

See notes to consolidated financial statements.

3 VF Corporation Q3 FY22 Form 10-Q

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VF CORPORATION

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended December				Nine Months Ended December

(In thousands, except per share amounts)	2021		2020		2021		2020
Net revenues	$	3,624,384	$	2,971,541	$	9,017,176	$	6,656,158
Costs and operating expenses
Cost of goods sold	1,592,604		1,345,024		4,027,601		3,134,381
Selling, general and administrative expenses	1,353,338		1,214,518		3,549,763		3,036,639

Total costs and operating expenses	2,945,942		2,559,542		7,577,364		6,171,020
Operating income	678,442		411,999		1,439,812		485,138
Interest income	606		2,539		4,266		7,028
Interest expense	(33,994)		(34,315)		(104,799)		(97,684)
Loss on debt extinguishment	(3,645)		—		(3,645)		—
Other income (expense), net	(95)		6,484		16,495		(27,059)
Income from continuing operations before income taxes	641,314		386,707		1,352,129		367,423
Income tax expense	123,513		59,048		216,303		74,260
Income from continuing operations	517,801		327,659		1,135,826		293,163
Income from discontinued operations, net of tax	—		19,581		170,273		25,186
Net income	$	517,801	$	347,240	$	1,306,099	$	318,349
Earnings per common share - basic
Continuing operations	$	1.33	$	0.84	$	2.90	$	0.75
Discontinued operations	—		0.05		0.44		0.06
Total earnings per common share - basic	$	1.33	$	0.89	$	3.34	$	0.82
Earnings per common share - diluted
Continuing operations	$	1.32	$	0.83	$	2.89	$	0.75
Discontinued operations	—		0.05		0.43		0.06
Total earnings per common share - diluted	$	1.32	$	0.88	$	3.32	$	0.81
Weighted average shares outstanding
Basic	390,430		389,872		391,187		389,262
Diluted	392,495		392,851		393,547		391,607

See notes to consolidated financial statements.

VF Corporation Q3 FY22 Form 10-Q 4

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VF CORPORATION

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended December				Nine Months Ended December

(In thousands)	2021		2020		2021		2020
Net income	$	517,801	$	347,240	$	1,306,099	$	318,349
Other comprehensive income (loss)
Foreign currency translation and other
Gains (losses) arising during the period	(15,757)		9,495		5,100		(20,134)
Reclassification of foreign currency translation losses	—		—		—		42,364
Income tax effect	(9,954)		26,779		(17,758)		51,616
Defined benefit pension plans
Current period actuarial gains (losses)	514		(4,636)		(3,938)		(13,489)
Amortization of net deferred actuarial losses	2,858		3,020		8,569		8,781
Amortization of deferred prior service credits	(117)		(19)		(352)		(53)
Reclassification of net actuarial loss from settlement charge	5,660		544		6,684		1,116


Income tax effect	(2,251)		429		(2,187)		1,151
Derivative financial instruments
Gains (losses) arising during the period	14,185		(82,491)		43,983		(129,817)
Income tax effect	(2,224)		14,118		(8,010)		22,845
Reclassification of net (gains) losses realized	12,439		(4,271)		45,984		(35,930)
Income tax effect	(1,976)		727		(6,532)		6,545
Other comprehensive income (loss)	3,377		(36,305)		71,543		(65,005)
Comprehensive income	$	521,178	$	310,935	$	1,377,642	$	253,344

See notes to consolidated financial statements.

5 VF Corporation Q3 FY22 Form 10-Q

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VF CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended December

(In thousands)	2021		2020
OPERATING ACTIVITIES
Net income	$	1,306,099	$	318,349
Income from discontinued operations, net of tax	170,273		25,186
Income from continuing operations, net of tax	1,135,826		293,163
Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization	199,652		204,580
Reduction in the carrying amount of right-of-use assets	309,588		309,579
Stock-based compensation	65,833		46,109
Provision for doubtful accounts	3,143		22,494
Pension expense less than contributions	(27,514)		(12,111)


Loss on extinguishment of debt	3,645		—
Other, net	(291,054)		(83)
Changes in operating assets and liabilities:
Accounts receivable	(214,644)		(46,835)
Inventories	(237,285)		266,713
Accounts payable	99,565		(6,696)
Income taxes	219,097		(18,235)
Accrued liabilities	250,170		248,679
Operating lease right-of-use assets and liabilities	(342,322)		(254,544)
Other assets and liabilities	(382,410)		31,464
Cash provided by operating activities - continuing operations	791,290		1,084,277
Cash provided by operating activities - discontinued operations	6,090		57,779
Cash provided by operating activities	797,380		1,142,056
INVESTING ACTIVITIES
Business acquisitions, net of cash received	3,760		—
Proceeds from sale of businesses, net of cash sold	616,529		—
Purchases of short-term investments	—		(800,000)
Proceeds from sale and maturities of short-term investments	598,806		200,000
Capital expenditures	(214,220)		(152,446)
Software purchases	(63,758)		(51,964)
Other, net	12,819		(9,116)
Cash provided (used) by investing activities - continuing operations	953,936		(813,526)
Cash used by investing activities - discontinued operations	(525)		(3,171)
Cash provided (used) by investing activities	953,411		(816,697)
FINANCING ACTIVITIES
Net increase (decrease) in short-term borrowings	94,958		(929,074)
Payments on long-term debt	(503,943)		(1,152)
Payment of debt issuance costs	(2,415)		(21,438)
Proceeds from long-term debt	—		2,996,090
Share repurchases	(299,999)		—
Cash dividends paid	(579,194)		(564,904)

Proceeds from issuance of Common Stock, net of payments for tax withholdings	32,929		45,867

Cash provided (used) by financing activities	(1,257,664)		1,525,389
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	(9,339)		12,513
Net change in cash, cash equivalents and restricted cash	483,788		1,863,261
Cash, cash equivalents and restricted cash – beginning of year	851,205		1,411,322
Cash, cash equivalents and restricted cash – end of period	$	1,334,993	$	3,274,583

Continued on next page.

See notes to consolidated financial statements.

VF Corporation Q3 FY22 Form 10-Q 6

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VF CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended December

(In thousands)	2021		2020
Balances per Consolidated Balance Sheets:
Cash and cash equivalents	$	1,333,839	$	3,254,236
Other current assets	1,124		1,104

Current assets of discontinued operations	—		18,771
Other assets	30		472
Total cash, cash equivalents and restricted cash	$	1,334,993	$	3,274,583

See notes to consolidated financial statements.

7 VF Corporation Q3 FY22 Form 10-Q

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VF CORPORATION

Consolidated Statements of Stockholders’ Equity

(Unaudited)


	Three Months Ended December 2021
				Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, September 2021	392,758,016	$	98,190	$	3,854,687	$	(940,834)	$	586,438	$	3,598,481


Net income	—	—		—		—		517,801		517,801
Dividends on Common Stock ($0.50 per share)	—	—		—		—		(194,767)		(194,767)
Share repurchases	(4,029,722)	(1,007)		—		—		(298,992)		(299,999)
Stock-based compensation, net	156,738	38		30,248		—		(1,779)		28,507
Foreign currency translation and other	—	—		—		(25,711)		—		(25,711)
Defined benefit pension plans	—	—		—		6,664		—		6,664
Derivative financial instruments	—	—		—		22,424		—		22,424

Balance, December 2021	388,885,032	$	97,221	$	3,884,935	$	(937,457)	$	608,701	$	3,653,400

	Three Months Ended December 2020
				Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, September 2020	389,964,718	$	97,491	$	3,852,358	$	(959,658)	$	(44,953)	$	2,945,238


Net income	—	—		—		—		347,240		347,240
Dividends on Common Stock ($0.49 per share)	—	—		(191,266)		—		—		(191,266)

Stock-based compensation, net	1,021,119	255		74,804		—		(1,792)		73,267
Foreign currency translation and other	—	—		—		36,274		—		36,274
Defined benefit pension plans	—	—		—		(662)		—		(662)
Derivative financial instruments	—	—		—		(71,917)		—		(71,917)

Balance, December 2020	390,985,837	$	97,746	$	3,735,896	$	(995,963)	$	300,495	$	3,138,174

Continued on next page.

See notes to consolidated financial statements.

VF Corporation Q3 FY22 Form 10-Q 8

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VF CORPORATION

Consolidated Statements of Stockholders’ Equity

(Unaudited)


	Nine Months Ended December 2021
				Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, March 2021	391,941,477	$	97,985	$	3,777,645	$	(1,009,000)	$	189,534	$	3,056,164


Net income	—	—		—		—		1,306,099		1,306,099
Dividends on Common Stock ($1.48 per share)	—	—		(2,597)		—		(576,597)		(579,194)
Share repurchases	(4,029,722)	(1,007)		—		—		(298,992)		(299,999)
Stock-based compensation, net	973,277	243		109,887		—		(11,343)		98,787
Foreign currency translation and other	—	—		—		(12,658)		—		(12,658)
Defined benefit pension plans	—	—		—		8,776		—		8,776
Derivative financial instruments	—	—		—		75,425		—		75,425

Balance, December 2021	388,885,032	$	97,221	$	3,884,935	$	(937,457)	$	608,701	$	3,653,400

	Nine Months Ended December 2020
				Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Common Stock
(In thousands, except share amounts)	Shares	Amounts								Total
Balance, March 2020	388,812,158	$	97,203	$	4,183,780	$	(930,958)	$	7,309	$	3,357,334


Net income	—	—		—		—		318,349		318,349
Dividends on Common Stock ($1.45 per share)	—	—		(564,904)		—		—		(564,904)

Stock-based compensation, net	2,173,679	543		117,020		—		(25,163)		92,400
Foreign currency translation and other	—	—		—		73,846		—		73,846
Defined benefit pension plans	—	—		—		(2,494)		—		(2,494)
Derivative financial instruments	—	—		—		(136,357)		—		(136,357)

Balance, December 2020	390,985,837	$	97,746	$	3,735,896	$	(995,963)	$	300,495	$	3,138,174

See notes to consolidated financial statements.

9 VF Corporation Q3 FY22 Form 10-Q

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VF CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		PAGE NUMBER

NOTE 1	Basis of Presentation	11
NOTE 2	Recently Adopted and Issued Accounting Standards	11
NOTE 3	Revenues	12
NOTE 4	Acquisition	14
NOTE 5	Discontinued Operations	15
NOTE 6	Inventories	16
NOTE 7	Intangible Assets	17
NOTE 8	Goodwill	17
NOTE 9	Leases	17
NOTE 10	Short-term Borrowings and Long-term Debt	18
NOTE 11	Pension Plans	18
NOTE 12	Capital and Accumulated Other Comprehensive Income (Loss)	19
NOTE 13	Stock-based Compensation	21
NOTE 14	Income Taxes	22
NOTE 15	Reportable Segment Information	23
NOTE 16	Earnings Per Share	23
NOTE 17	Fair Value Measurements	24
NOTE 18	Derivative Financial Instruments and Hedging Activities	25
NOTE 19	Restructuring	27
NOTE 20	Contingencies	28
NOTE 21	Subsequent Event	28

VF Corporation Q3 FY22 Form 10-Q 10

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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 April 4, 2021 through April 2, 2022 ("Fiscal 2022"). Accordingly, this Form 10-Q presents our third quarter of Fiscal 2022. For presentation purposes herein, all references to periods ended December 2021 and December 2020 relate to the fiscal periods ended on January 1, 2022 and December 26, 2020, respectively. References to March 2021 relate to information as of April 3, 2021.

On June 28, 2021, VF completed the sale of its Occupational Workwear business. The Occupational Workwear business was 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 included the license of certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel. The results of the Occupational Workwear business and the related cash flows have been reported as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively, through the date of sale. The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets, through the date of sale. These changes have been applied to all periods presented.

Unless otherwise noted, discussion within these notes to the interim consolidated financial statements relates to continuing operations. Refer to Note 5 for additional information on discontinued operations.

Certain prior year amounts have been reclassified to conform to the Fiscal 2022 presentation.

The accompanying unaudited interim 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 2021 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited interim 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 and nine months ended December 2021 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal 2022. 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 April 3, 2021 (“Fiscal 2021 Form 10-K”).

In preparing the interim consolidated financial statements, management makes estimates and assumptions that affect amounts reported in the interim consolidated financial statements and accompanying notes. The duration and severity of the novel coronavirus ("COVID-19") pandemic, which is subject to uncertainty, continues to impact 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 December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 became effective for VF in the first quarter of Fiscal 2022, but did not have a material impact on VF's consolidated financial statements.

Recently Issued Accounting Standards

In March 2020 and January 2021, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" and ASU No. 2021-01, "Reference Rate Reform (Topic 848): Scope", respectively. This guidance 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.

In November 2021, the FASB issued ASU No. 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance", an update that requires annual disclosures about government assistance, including the types of assistance and the effect on the financial statements. The guidance will be effective for VF in Fiscal 2023 with early adoption permitted. The Company is evaluating the impact that adopting this guidance will have on VF's disclosures.

11 VF Corporation Q3 FY22 Form 10-Q

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NOTE 3 — REVENUES

Contract Balances

The following table provides information about contract assets and contract liabilities:


(In thousands)	December 2021		March 2021		December 2020
Contract assets (a)	$	1,425	$	880	$	1,512
Contract liabilities (b)	73,890		49,869		55,995

(a)Included in the other current assets line item in the Consolidated Balance Sheets.

(b)Included in the accrued liabilities line item in the Consolidated Balance Sheets.

For the three and nine months ended December 2021, the Company recognized $81.6 million and $243.6 million, respectively, of revenue that was included in the contract liability balance during the periods, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were 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.

Performance Obligations

As of December 2021, the Company expects to recognize $75.5 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 through March 2031. 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 December 2021, 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.

For the three and nine months ended December 2021, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

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 are affected by economic factors.


	Three Months Ended December 2021
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	960,020	$	448,690	$	215,023	$	279	$	1,624,012
Direct-to-consumer	964,016		956,393		61,077		—		1,981,486
Royalty	4,391		5,494		9,001		—		18,886
Total	$	1,928,427	$	1,410,577	$	285,101	$	279	$	3,624,384

Geographic revenues
United States	$	945,218	$	788,839	$	213,535	$	279	$	1,947,871
International:
Europe	651,252		333,415		18,631		—		1,003,298
Asia-Pacific	236,348		214,638		37,361		—		488,347
Americas (non-U.S.)	95,609		73,685		15,574		—		184,868
Total	$	1,928,427	$	1,410,577	$	285,101	$	279	$	3,624,384

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	Three Months Ended December 2020
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	763,743	$	465,857	$	200,872	$	3,106	$	1,433,578
Direct-to-consumer	804,711		655,922		63,470		89		1,524,192
Royalty	2,589		5,342		5,840		—		13,771
Total	$	1,571,043	$	1,127,121	$	270,182	$	3,195	$	2,971,541

Geographic revenues
United States	$	776,674	$	620,261	$	170,760	$	—	$	1,567,695
International:
Europe	502,000		256,282		32,381		3,195		793,858
Asia-Pacific	213,271		199,202		51,858		—		464,331
Americas (non-U.S.)	79,098		51,376		15,183		—		145,657
Total	$	1,571,043	$	1,127,121	$	270,182	$	3,195	$	2,971,541


	Nine Months Ended December 2021
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	2,426,963	$	1,600,238	$	693,910	$	557	$	4,721,668
Direct-to-consumer	1,614,783		2,488,454		144,029		—		4,247,266
Royalty	11,056		16,126		21,060		—		48,242
Total	$	4,052,802	$	4,104,818	$	858,999	$	557	$	9,017,176

Geographic revenues
United States	$	1,919,914	$	2,198,759	$	640,431	$	557	$	4,759,661
International:
Europe	1,406,329		1,051,301		58,247		—		2,515,877
Asia-Pacific	506,710		641,289		111,561		—		1,259,560
Americas (non-U.S.)	219,849		213,469		48,760		—		482,078
Total	$	4,052,802	$	4,104,818	$	858,999	$	557	$	9,017,176


	Nine Months Ended December 2020
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	1,746,203	$	1,371,889	$	527,378	$	4,381	$	3,649,851
Direct-to-consumer	1,314,386		1,510,354		144,113		297		2,969,150
Royalty	6,089		16,396		14,672		—		37,157
Total	$	3,066,678	$	2,898,639	$	686,163	$	4,678	$	6,656,158

Geographic revenues
United States	$	1,451,827	$	1,472,145	$	446,850	$	—	$	3,370,822
International:
Europe	1,015,078		753,820		76,786		4,678		1,850,362
Asia-Pacific	448,234		533,620		120,125		—		1,101,979
Americas (non-U.S.)	151,539		139,054		42,402		—		332,995
Total	$	3,066,678	$	2,898,639	$	686,163	$	4,678	$	6,656,158

13 VF Corporation Q3 FY22 Form 10-Q

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NOTE 4 — ACQUISITION

On December 28, 2020, VF acquired 100% of the outstanding shares of Supreme Holdings, Inc. ("Supreme") for $2.2 billion in cash, subject to working capital and other adjustments. The transaction also included $0.2 billion of cash acquired by VF. The purchase price was primarily funded with cash on hand. The purchase price was unchanged during the three months ended December 2021 and decreased by $3.8 million during the nine months ended December 2021, related to the final working capital adjustment.

The acquisition of Supreme includes a contingent arrangement that may require additional cash consideration to be paid to the selling shareholders of Supreme ranging from zero to $300.0 million, subject to the achievement of certain financial targets over the one-year earn-out period ending January 31, 2022. The initial estimated fair value of the contingent consideration of $207.0 million was included in the purchase price and reported in the other liabilities line item in the Consolidated Balance Sheet at March 2021. The estimated fair value of the contingent consideration was determined based on the probability-weighted present value of various future cash payment outcomes. In subsequent reporting periods, the contingent consideration liability has been remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations. Refer to Note 17 for additional information on fair value measurements.

Supreme was a privately-held company based in New York, New York and is a global streetwear leader that sells apparel, accessories and footwear under its namesake brand, Supreme®, through direct-to-consumer channels, including digital. The acquisition of Supreme accelerates VF's long-term growth

strategy and builds on a long-standing relationship between Supreme and VF, with the Supreme® brand being a regular collaborator with VF's Vans®, The North Face® and Timberland® brands. The acquisition also provides VF with deeper access to attractive consumer segments and the ability to leverage VF's enterprise platforms and capabilities to enable sustainable long-term growth.

In connection with the acquisition, VF deposited in escrow 605,050 shares of VF Common Stock. The common shares are subject to certain future service requirements and vest over periods of up to four years. For accounting purposes, VF will recognize the stock-based compensation cost for the fair value of these awards of $51.7 million over the vesting periods.

For the three and nine months ended December 2021, Supreme contributed revenues of $193.2 million and $438.5 million, respectively, and net income of $43.8 million and $76.2 million, respectively. The results of Supreme have been reported in the Active segment since the date of acquisition. Total transaction expenses for the Supreme acquisition were $8.7 million, all of which were recognized in the year ended March 2021 in the selling, general and administrative expenses line item in the Consolidated Statement of Operations.

Goodwill increased by $3.6 million during the three months ended December 2021 due to a measurement period adjustment for income tax matters, and decreased by $0.7 million during the nine months ended December 2021, which was also impacted by the final working capital adjustment. The purchase price allocation was finalized during the three months ended December 2021.

The following table summarizes the estimated fair values of the Supreme assets acquired and liabilities assumed at the date of acquisition:


(In thousands)	December 28, 2020
Cash and equivalents	$	218,104
Accounts receivable	19,698
Inventories	44,937
Other current assets	40,912
Property, plant and equipment	18,914
Intangible asset	1,201,000
Operating lease right-of-use assets	55,668
Other assets	58,479
Total assets acquired	1,657,712

Accounts payable	25,717
Other current liabilities	81,816
Operating lease liabilities	53,062
Deferred income tax liabilities	280,971
Other liabilities	35,245
Total liabilities assumed	476,811

Net assets acquired	1,180,901
Goodwill	1,249,594
Purchase price	$	2,430,495

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The purchase price consisted of the following components:


(In thousands)	December 28, 2020
Cash consideration	$	2,223,495
Contingent consideration	207,000
Purchase price	$	2,430,495

The goodwill is attributable to our ability to expand the Supreme® brand into new markets, the acquired workforce and future collaboration opportunities for the Supreme® brand. All of the goodwill was assigned to the Active segment and will not be deductible for tax purposes.

The Supreme® trademark, which management believes to have an indefinite life, has been valued at $1.2 billion using the relief-from-royalty method, which is an income valuation approach. The relief-from-royalty method requires the use of significant estimates and assumptions, including but not limited to, future revenues, growth rates, royalty rate, tax rates and discount rate.

The following unaudited pro forma summary presents consolidated information of VF as if the acquisition of Supreme had occurred on March 31, 2019:


(In thousands, except per share amounts)	Three Months Ended December 2020 (unaudited)		Nine Months Ended December 2020 (unaudited)
Total revenues	$	3,160,826	$	7,094,470
Income from continuing operations	377,987		387,949
Earnings per common share from continuing operations
Basic	$	0.97	$	1.00
Diluted	0.96		0.99

These pro forma amounts have been calculated after applying VF’s accounting policies and adjusting the results of Supreme to reflect the fair value adjustments to intangible assets, property, plant and equipment and inventory. The results of Supreme have also been adjusted for historical interest expense as the acquired business was debt-free on the acquisition date. These changes have been applied from March 31, 2019, with related tax effects.

The pro forma financial information in the three and nine months ended December 2020 excludes $30.6 million of expenses

related to Supreme's transaction and deal-related costs, including employee compensation costs and accelerated vesting of stock options, which are directly attributable to the transaction.

Pro forma financial information is not necessarily indicative of VF’s operating results if the acquisition had been effected at the date indicated, nor is it necessarily indicative of future operating results. Amounts do not include any marketing leverage, or operating efficiencies that VF believes are achievable.

NOTE 5 — DISCONTINUED OPERATIONS

The Company continuously assesses the composition of its portfolio to ensure it is aligned with its strategic objectives and positioned to maximize growth and return to shareholders.

Occupational Workwear Business

On January 21, 2020, VF announced its decision to explore the divestiture of its Occupational Workwear business. The Occupational Workwear business was 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 included the license of certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel. As of March 28, 2020, the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria. 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, through the date of sale. The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance Sheets, through the date of sale.

On June 28, 2021, VF completed the sale of the Occupational Workwear business. The Company received proceeds of $616.5 million, net of cash sold, resulting in an estimated after-tax gain on sale of $145.6 million, which is included in the income from discontinued operations, net of tax line item in the Consolidated Statement of Operations for the nine months ended December 2021, and is subject to working capital and other adjustments.

The results of the Occupational Workwear business were previously reported in the Work segment. The results of the Occupational Workwear business recorded in the income from discontinued operations, net of tax line item in the Consolidated Statements of Operations were income of $170.3 million (including an estimated after-tax gain on sale of $145.6 million) for the nine months ended December 2021, and income of $19.6 million and $25.2 million for the three and nine months ended December 2020, respectively.

Under the terms of a transition services agreement, the Company will provide certain support services for periods generally up to 12 months from the closing date of the transaction.

15 VF Corporation Q3 FY22 Form 10-Q

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Summarized Discontinued Operations Financial Information

The following table summarizes the major line items for the Occupational Workwear business that are included in the income from discontinued operations, net of tax line item in the Consolidated Statements of Operations:


	Three Months Ended December				Nine Months Ended December

(In thousands)	2021		2020		2021		2020
Net revenues	$	—	$	176,464	$	181,424	$	464,107
Cost of goods sold	—		115,801		117,193		330,418
Selling, general and administrative expenses	—		35,576		38,735		103,743

Interest income, net	—		68		194		541
Other income (expense), net	—		22		6		101
Income from discontinued operations before income taxes	—		25,177		25,696		30,588
Gain on the sale of discontinued operations before income taxes	—		—		133,571		—
Total income from discontinued operations before income taxes	—		25,177		159,267		30,588
Income tax expense (benefit) (a)	—		5,596		(11,006)		5,402
Income from discontinued operations, net of tax	$	—	$	19,581	$	170,273	$	25,186

(a)Income tax benefit for the nine months ended December 2021 includes $12.0 million of deferred tax benefit related to capital and other losses realized upon the sale of the Occupational Workwear business.

The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as of March 2021 and December 2020.


(In thousands)	March 2021		December 2020
Cash and equivalents	$	34,132	$	18,771
Accounts receivable, net	103,835		91,554
Inventories	245,227		242,204
Other current assets	8,208		12,802
Property, plant and equipment, net	49,394		48,605
Intangible assets, net	54,471		54,472
Goodwill	43,530		43,530
Operating lease right-of-use assets	43,220		42,930
Other assets	5,561		5,780

Total assets of discontinued operations	$	587,578	$	560,648


Accounts payable	$	59,965	$	50,434
Accrued liabilities	38,956		34,470
Operating lease liabilities	31,301		33,073
Other liabilities	3,863		6,303
Deferred income tax liabilities (a)	(8,828)		(4,095)
Total liabilities of discontinued operations	$	125,257	$	120,185

(a)Deferred income tax balances reflect VF's consolidated netting by jurisdiction.

NOTE 6 — INVENTORIES


(In thousands)	December 2021		March 2021		December 2020
Finished products	$	1,218,099	$	983,472	$	1,008,796
Work-in-process	49,933		54,386		55,352
Raw materials	19,178		23,981		11,835
Total inventories	$	1,287,210	$	1,061,839	$	1,075,983

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NOTE 7 — INTANGIBLE ASSETS


			December 2021						March 2021
(In thousands)	Weighted Average Amortization Period	Amortization Method	Cost		Accumulated Amortization		Net Carrying Amount		Net Carrying Amount
Amortizable intangible assets:
Customer relationships and other	19 years	Accelerated	$	268,018	$	159,541	$	108,477	$	121,641



Indefinite-lived intangible assets:
Trademarks and trade names							2,902,040		2,907,904
Intangible assets, net							$	3,010,517	$	3,029,545

Amortization expense for the three and nine months ended December 2021 was $3.8 million and $11.9 million, respectively. Based on the carrying amounts of amortizable intangible assets noted above, estimated amortization expense for the next five years beginning in Fiscal 2022 is $15.3 million, $14.3 million, $13.8 million, $13.3 million and $12.3 million, respectively.

NOTE 8 — GOODWILL

Changes in goodwill are summarized by reportable segment as follows:


(In thousands)	Outdoor		Active		Work		Total
Balance, March 2021	$	665,278	$	1,645,769	$	114,380	$	2,425,427


Measurement period adjustment to Supreme acquisition (Note 4)	—		(717)		—		(717)
Currency translation	(3,173)		(12,011)		(266)		(15,450)
Balance, December 2021	$	662,105	$	1,633,041	$	114,114	$	2,409,260

Accumulated impairment charges for the Outdoor segment were $323.2 million as of December 2021 and March 2021. No impairment charges were recorded during the nine months ended December 2021.

NOTE 9 — LEASES

The Company leases certain retail locations, office space, distribution facilities, machinery and equipment, and vehicles. The substantial majority of these leases are operating leases. Total lease cost includes operating lease cost, variable lease cost, finance lease cost, short-term lease cost and impairment. Components of lease cost were as follows:


	Three Months Ended December				Nine Months Ended December

(In thousands)	2021		2020		2021		2020
Operating lease cost	$	105,888	$	110,970	$	329,548	$	326,501
Other lease costs	34,092		19,336		84,522		53,906
Total lease cost	$	139,980	$	130,306	$	414,070	$	380,407

During the nine months ended December 2021 and 2020, the Company paid $357.9 million and $289.4 million of cash for operating leases, respectively. The increase was primarily driven by the timing of payments and lease concessions related to the effects of COVID-19 in the nine months ended December 2020. During the nine months ended December 2021 and 2020, the Company obtained $147.2 million and $506.7 million of right-of-use assets in exchange for lease liabilities, respectively. The decrease was primarily driven by the commencement of a new distribution center lease during the nine months ended December 2020.

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NOTE 10 — SHORT-TERM BORROWINGS AND LONG-TERM DEBT

Revolving Credit Facility

In November 2021, VF entered into a $2.25 billion senior unsecured revolving line of credit (the "Global Credit Facility") that expires November 2026. The Global Credit Facility replaced VF's $2.25 billion revolving facility which was scheduled to expire in December 2023. VF may request an unlimited number of one year extensions so long as each extension does not cause the remaining life of the Global Credit Facility to exceed five years, subject to stated terms and conditions. The Global Credit Facility may be used to borrow funds in U.S. dollars or any alternative currency (including euros and any other currency that is freely convertible into U.S. dollars, approved at the request of the Company by the lenders) and has a $75.0 million letter of credit sublimit. In addition, the Global Credit Facility supports VF’s U.S. commercial paper program for short-term, seasonal working capital requirements and general corporate purposes, including share repurchases and acquisitions. Borrowings under the Global Credit Facility are priced at a credit spread of 91.0 basis points over the appropriate LIBOR benchmark for each currency. VF is also required to pay a facility fee to the lenders, currently equal to 9.0 basis points of the committed amount of the facility. The credit spread and facility fee are subject to adjustment based on VF’s credit ratings. Outstanding short-term balances may vary from period to period depending on the level of corporate requirements.

The Global Credit Facility contains certain restrictive covenants, which include maintenance of a consolidated net indebtedness to consolidated net capitalization ratio. The consolidated net indebtedness to consolidated net capitalization ratio financial covenant, as of the last day of any fiscal quarter, cannot be greater than 0.70 to 1.00 through the last day of the fiscal quarter ending April 1, 2023, then 0.65 to 1.00 through the last day of the fiscal quarter ending March 30, 2024, and 0.60 to 1.00 thereafter. The calculation of consolidated net indebtedness (and, thereby consolidated net capitalization) is net of unrestricted cash of VF and its subsidiaries. As of December 2021, VF was in compliance with all covenants.

Redemption

In December 2021, VF completed an early redemption of $500.0 million in aggregate principal amount of its outstanding 2.050% Senior Notes due April 2022. The redemption price was equal to the sum of the present value of the remaining scheduled payments of principal and interest discounted to the redemption date at 38.7 basis points, which resulted in a make-whole premium of $3.2 million. Additionally, in connection with the redemption, $0.5 million of unamortized original issue discount and debt issuance costs were recognized. The make-whole premium and amortization were recorded in the loss on debt extinguishment line item in the Consolidated Statements of Operations in the three and nine months ended December 2021.

Supply Chain Financing Program

During the three months ended December 2021, VF began offering a voluntary supply chain finance ("SCF") program that enables certain suppliers of inventory to leverage VF's credit rating to receive payment from participating financial institutions prior to the payment date specified in the terms between VF and the supplier. The transactions are at the sole discretion of both the suppliers and financial institutions, and VF is not a party to the agreements. The terms between VF and the supplier, including the amount due and scheduled payment dates, are not impacted by a supplier's participation in the SCF program. The amount financed by suppliers and outstanding under this program is primarily included in the short-term borrowings line item in VF's Consolidated Balance Sheet and was $99.0 million at December 2021. Invoices selected for financing by the suppliers are primarily reported as operating cash outflows and financing cash inflows. Payments made by VF to the banks to settle the invoices on the originally scheduled payment dates are primarily reflected as financing cash outflows. Subsequent to the quarter end, VF decided to temporarily suspend the SCF program to implement certain modifications to the program.

NOTE 11 — PENSION PLANS

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


	Three Months Ended December				Nine Months Ended December

(In thousands)	2021		2020		2021		2020
Service cost – benefits earned during the period	$	3,547	$	3,837	$	10,737	$	11,252
Interest cost on projected benefit obligations	9,332		11,764		28,174		35,693
Expected return on plan assets	(19,347)		(20,586)		(58,100)		(61,696)
Settlement charges	5,660		544		6,684		1,116

Amortization of deferred amounts:
Net deferred actuarial losses	2,858		3,020		8,569		8,781
Deferred prior service credits	(117)		(19)		(352)		(53)
Net periodic pension cost (income)	$	1,933	$	(1,440)	$	(4,288)	$	(4,907)

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

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VF has reported the service cost component of net periodic pension cost (income) in operating income and the other components, which include interest cost, expected return on plan assets, settlement charges and amortization of deferred actuarial losses and prior service credits, in the other income (expense), net line item in the Consolidated Statements of Operations.

VF contributed $23.2 million to its defined benefit plans during the nine months ended December 2021, and intends to make approximately $10.3 million of contributions during the remainder of Fiscal 2022.

VF recorded $5.7 million and $6.7 million in settlement charges in the other income (expense), net line item in the Consolidated

Statements of Operations for the three and nine months ended December 2021, respectively, as well as $0.5 million and $1.1 million for the three and nine months ended December 2020, respectively. The settlement charges related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan. Actuarial assumptions used in the interim valuations were reviewed and revised as appropriate. The discount rate used to determine the supplemental defined benefit pension obligation as of December 2021, September 2021 and June 2021 was 2.96%, 2.91% and 2.90%, respectively.

NOTE 12 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Common Stock

During the nine months ended December 2021, the Company purchased 4.0 million shares of Common Stock in open market transactions for $300.0 million under its share repurchase program authorized by VF’s Board of Directors. These transactions are treated as treasury stock transactions.

Common Stock outstanding is net of shares held in treasury which are, in substance, retired. During the nine months ended December 2021, VF restored 4.0 million treasury shares to an unissued status, after which they were no longer recognized as shares held in treasury. There were no shares held in treasury at the end of December 2021, March 2021 or December 2020. The excess of the cost of treasury shares acquired over the $0.25 per share stated value of Common Stock is deducted from retained earnings.

Accumulated Other Comprehensive Income (Loss)

Comprehensive income consists of net income and specified components of other comprehensive income (“OCI”), which relate to changes in assets and liabilities that are not included in net income under GAAP but are instead deferred and accumulated within a separate component of stockholders’ equity in the balance sheet. VF’s comprehensive income is presented in the Consolidated Statements of Comprehensive Income. The deferred components of OCI are reported, net of related income taxes, in accumulated OCI in stockholders’ equity, as follows:


(In thousands)	December 2021		March 2021		December 2020
Foreign currency translation and other	$	(712,831)	$	(700,173)	$	(663,863)
Defined benefit pension plans	(248,971)		(257,747)		(264,966)
Derivative financial instruments	24,345		(51,080)		(67,134)
Accumulated other comprehensive income (loss)	$	(937,457)	$	(1,009,000)	$	(995,963)

The changes in accumulated OCI, net of related taxes, were as follows:


	Three Months Ended December 2021
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, September 2021	$	(687,120)	$	(255,635)	$	1,921	$	(940,834)

Other comprehensive income (loss) before reclassifications	(25,711)		383		11,961		(13,367)
Amounts reclassified from accumulated other comprehensive income (loss)	—		6,281		10,463		16,744
Net other comprehensive income (loss)	(25,711)		6,664		22,424		3,377
Balance, December 2021	$	(712,831)	$	(248,971)	$	24,345	$	(937,457)

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	Three Months Ended December 2020
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, September 2020	$	(700,137)	$	(264,304)	$	4,783	$	(959,658)

Other comprehensive income (loss) before reclassifications	36,274		(3,541)		(68,373)		(35,640)
Amounts reclassified from accumulated other comprehensive income (loss)	—		2,879		(3,544)		(665)

Net other comprehensive income (loss)	36,274		(662)		(71,917)		(36,305)
Balance, December 2020	$	(663,863)	$	(264,966)	$	(67,134)	$	(995,963)


	Nine Months Ended December 2021
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, March 2021	$	(700,173)	$	(257,747)	$	(51,080)	$	(1,009,000)
Other comprehensive income (loss) before reclassifications	(12,658)		(2,355)		35,973		20,960
Amounts reclassified from accumulated other comprehensive income (loss)	—		11,131		39,452		50,583
Net other comprehensive income (loss)	(12,658)		8,776		75,425		71,543
Balance, December 2021	$	(712,831)	$	(248,971)	$	24,345	$	(937,457)


	Nine Months Ended December 2020
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, March 2020	$	(737,709)	$	(262,472)	$	69,223	$	(930,958)
Other comprehensive income (loss) before reclassifications	31,482		(10,183)		(106,972)		(85,673)
Amounts reclassified from accumulated other comprehensive income (loss)	42,364		7,689		(29,385)		20,668
Net other comprehensive income (loss)	73,846		(2,494)		(136,357)		(65,005)
Balance, December 2020	$	(663,863)	$	(264,966)	$	(67,134)	$	(995,963)

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Reclassifications out of accumulated OCI were as follows:


(In thousands)		Three Months Ended December				Nine Months Ended December
Details About Accumulated Other Comprehensive Income (Loss) Components	Affected Line Item in the Consolidated Statements of Operations

		2021		2020		2021		2020
Losses on foreign currency translation and other:
Liquidation of foreign entities	Other income (expense), net	$	—	$	—	$	—	$	(42,364)
Total before tax		—		—		—		(42,364)
Tax (expense) benefit		—		—		—		—
Net of tax		—		—		—		(42,364)
Amortization of defined benefit pension plans:
Net deferred actuarial losses	Other income (expense), net	(2,858)		(3,020)		(8,569)		(8,781)
Deferred prior service credits	Other income (expense), net	117		19		352		53

Pension settlement charges	Other income (expense), net	(5,660)		(544)		(6,684)		(1,116)
Total before tax		(8,401)		(3,545)		(14,901)		(9,844)
Tax benefit		2,120		666		3,770		2,155
Net of tax		(6,281)		(2,879)		(11,131)		(7,689)
Gains (losses) on derivative financial instruments:
Foreign exchange contracts	Net revenues	(9,284)		4,048		(16,045)		6,354
Foreign exchange contracts	Cost of goods sold	(3,974)		224		(26,644)		25,372
Foreign exchange contracts	Selling, general and administrative expenses	688		586		(418)		2,934
Foreign exchange contracts	Other income (expense), net	104		(613)		(2,958)		1,190
Interest rate contracts	Interest expense	27		26		81		80
Total before tax		(12,439)		4,271		(45,984)		35,930
Tax (expense) benefit		1,976		(727)		6,532		(6,545)
Net of tax		(10,463)		3,544		(39,452)		29,385
Total reclassifications for the period, net of tax		$	(16,744)	$	665	$	(50,583)	$	(20,668)

NOTE 13 — STOCK-BASED COMPENSATION

Incentive Equity Awards Granted

During the nine months ended December 2021, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase 1,504,707 shares of its Common Stock at a weighted average exercise price of $77.76 per share. The exercise price of each option granted was equal to the fair market value of VF Common Stock on the date of grant. Employee stock options vest in equal annual installments over three years. Stock options granted to nonemployee members of VF's Board of Directors vest upon grant and become exercisable one year from the date of grant. All options have ten-year terms.

The grant date fair value of each option award was calculated using a lattice option-pricing valuation model, which incorporated a range of assumptions for inputs as follows:


						Nine Months Ended December 2021
Expected volatility						28% to 41%
Weighted average expected volatility						36%
Expected term (in years)						6.1 to 7.9
Weighted average dividend yield						2.6%
Risk-free interest rate						0.04% to 1.63%
Weighted average fair value at date of grant						$20.19

During the nine months ended December 2021, VF granted 324,448 performance-based restricted stock units ("RSUs") to employees that enable them to receive shares of VF Common Stock at the end of a three-year performance cycle. The weighted average fair market value of VF Common Stock at the dates the units were granted was $77.77 per share. Each

performance-based RSU has a potential final payout ranging from zero to two shares of VF Common Stock. The number of shares earned by participants, if any, is based on achievement of three-year financial targets set by the Talent and Compensation Committee of the Board of Directors. Shares will be issued to participants in the year following the conclusion of the three-

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year performance period. The financial targets include 50% weighting based on VF's revenue growth over the three-year period compared to a group of industry peers and 50% weighting based on VF's total shareholder return ("TSR") over the three-year period compared to the TSR for companies included in the Standard & Poor's 500 Consumer Discretionary Index. The grant date fair value of the TSR portion of the performance-based RSU grants was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, and was $101.56 per share. Additionally, the actual number of performance-based RSUs earned may be adjusted upward or downward by 25% of the target award, based on VF's gross margin performance over the three-year period.

During the nine months ended December 2021, VF granted 12,023 nonperformance-based RSUs to nonemployee members of the Board of Directors. These units vest upon grant and will be settled in shares of VF Common Stock one year from the date of

grant. The fair market value of VF Common Stock at the date the units were granted was $77.78 per share.

In addition, VF granted 399,461 nonperformance-based RSUs to employees during the nine months ended December 2021. These units generally vest over periods of up to four years from the date of grant and each unit entitles the holder to one share of VF Common Stock. The weighted average fair market value of VF Common Stock at the dates the units were granted was $77.67 per share.

VF also granted 31,214 restricted shares of VF Common Stock to certain members of management during the nine months ended December 2021. These shares vest over periods of up to four years from the date of grant. The fair market value of VF Common Stock at the date the shares were granted was $77.78 per share.

NOTE 14 — INCOME TAXES

The effective income tax rate for the nine months ended December 2021 was 16.0% compared to 20.2% in the 2020 period. The nine months ended December 2021 included a net discrete tax expense of $43.7 million, which included a $92.3 million net tax expense related to unrecognized tax benefits and interest, a $9.6 million net tax benefit related to return to accrual adjustments, a $35.2 million net tax benefit related to withholding taxes on prior foreign earnings, a $1.7 million tax benefit related to stock compensation, and a $2.4 million net tax benefit related to tax rate change on deferred tax items. Excluding the $43.7 million net discrete tax expense in the 2021 period, the effective income tax rate would have been 12.8%. The nine months ended December 2020 included a net discrete tax expense of $3.7 million, which included a $15.2 million net tax expense related to unrecognized tax benefits and interest, a $2.3 million tax benefit related to stock compensation, a $4.9 million net tax benefit related to return to accrual adjustments, and a $4.3 million net tax benefit related to withholding taxes on prior foreign earnings. Excluding the $3.7 million net discrete tax expense in the 2020 period, the effective income tax rate would have been 19.2%. Without discrete items, the effective income tax rate for the nine months ended December 2021 decreased by 6.4% compared with the 2020 period primarily due to losses generated in the prior year and more favorable expectations to utilize foreign tax credits generated in the current year.

VF files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. In the U.S., the Internal Revenue Service ("IRS") examinations for tax years through 2015 have been effectively settled. The examination of Timberland’s 2011 tax return is ongoing.

In addition, VF is currently subject to examination by various state and international tax authorities. Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded

that VF’s provision for income taxes is adequate. Management believes that some of these audits and negotiations will conclude during the next 12 months.

VF was granted a ruling which lowered the effective income tax rate on taxable earnings for years 2010 through 2014 under Belgium’s excess profit tax regime. During 2015, the European Union Commission (“EU”) investigated and announced its decision that these rulings were illegal and ordered the tax benefits to be collected from affected companies, including VF. Requests for annulment were filed by Belgium and VF Europe BVBA individually. During 2017 and 2018, VF Europe BVBA was assessed and paid €35.0 million tax and interest, which was recorded as an income tax receivable based on the expected success of the requests for annulment. During 2019, the General Court annulled the EU decision and the EU subsequently appealed the General Court’s annulment. In September 2021, the General Court's judgment was set aside by the Court of Justice of the EU and the case was sent back to the General Court to determine whether the excess profit tax regime amounted to illegal State aid. The case remains open and unresolved. If this matter is adversely resolved, these amounts will not be collected by VF.

During the nine months ended December 2021, the amount of net unrecognized tax benefits and associated interest increased by $98.9 million to $289.1 million, which includes an $87.1 million increase in the three months ended December 2021 resulting from updated estimates related to intellectual property transfers completed in a prior period. Management believes that it is reasonably possible that the amount of unrecognized income tax benefits and interest may decrease during the next 12 months by approximately $270.4 million related to the completion of examinations and other settlements with tax authorities and the expiration of statutes of limitations, of which $10.6 million would reduce income tax expense.

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NOTE 15 — REPORTABLE SEGMENT INFORMATION

The chief operating decision maker allocates resources and assesses performance based on a global brand view which represents VF's operating segments. The operating segments have been evaluated and combined into reportable segments because they meet the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance.

The Company's reportable segments have been identified as: Outdoor, Active and Work. We have included an Other category in the table below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other includes results primarily related to the sale of non-VF products and sourcing activities related to transition services.

Financial information for VF's reportable segments is as follows:


	Three Months Ended December				Nine Months Ended December

(In thousands)	2021		2020		2021		2020
Segment revenues:
Outdoor	$	1,928,427	$	1,571,043	$	4,052,802	$	3,066,678
Active	1,410,577		1,127,121		4,104,818		2,898,639
Work	285,101		270,182		858,999		686,163
Other	279		3,195		557		4,678
Total segment revenues	$	3,624,384	$	2,971,541	$	9,017,176	$	6,656,158
Segment profit (loss):
Outdoor	$	450,432	$	311,767	$	662,761	$	283,531
Active	254,497		201,373		809,708		467,632
Work	47,672		16,900		150,649		13,672
Other	(44)		(4,435)		(696)		(9,322)
Total segment profit	752,557		525,605		1,622,422		755,513

Corporate and other expenses	(74,210)		(107,122)		(166,115)		(297,434)
Interest expense, net	(33,388)		(31,776)		(100,533)		(90,656)
Loss on debt extinguishment	(3,645)		—		(3,645)		—
Income from continuing operations before income taxes	$	641,314	$	386,707	$	1,352,129	$	367,423

NOTE 16 — EARNINGS PER SHARE


	Three Months Ended December				Nine Months Ended December

(In thousands, except per share amounts)	2021		2020		2021		2020
Earnings per share – basic:
Income from continuing operations	$	517,801	$	327,659	$	1,135,826	$	293,163
Weighted average common shares outstanding	390,430		389,872		391,187		389,262
Earnings per share from continuing operations	$	1.33	$	0.84	$	2.90	$	0.75
Earnings per share – diluted:
Income from continuing operations	$	517,801	$	327,659	$	1,135,826	$	293,163
Weighted average common shares outstanding	390,430		389,872		391,187		389,262
Incremental shares from stock options and other dilutive securities	2,065		2,979		2,360		2,345
Adjusted weighted average common shares outstanding	392,495		392,851		393,547		391,607
Earnings per share from continuing operations	$	1.32	$	0.83	$	2.89	$	0.75

Outstanding options to purchase approximately 2.8 million shares were excluded from the calculations of diluted earnings per share for both the three and nine-month periods ended December 2021, and outstanding options to purchase approximately 1.5 million and 4.1 million shares were excluded from the calculations of diluted earnings per share for the three and nine-month periods ended December 2020, respectively, because the effect of their inclusion would have been anti-dilutive.

In addition, 0.6 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for both the three and nine-month periods ended December 2021, and 0.8 million and 0.6 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for the three and nine-month periods ended December 2020, respectively, because these units were not considered to be contingent outstanding shares in those periods.

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NOTE 17 — 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.

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
December 2021
Financial assets:
Cash equivalents:
Money market funds	$	346,657	$	346,657	$	—	$	—
Time deposits	305,576		305,576		—		—

Derivative financial instruments	57,466		—		57,466		—
Deferred compensation	139,551		139,551		—		—
Financial liabilities:
Derivative financial instruments	32,987		—		32,987		—
Deferred compensation	145,399		—		145,399		—
Contingent consideration	49,000		—		—		49,000
	Total Fair Value		Fair Value Measurement Using (a)
(In thousands)			Level 1		Level 2		Level 3
March 2021
Financial assets:
Cash equivalents:
Money market funds	$	216,591	$	216,591	$	—	$	—
Time deposits	102,914		102,914		—		—
Short-term investments	598,806		598,806		—		—
Derivative financial instruments	13,257		—		13,257		—
Deferred compensation	141,072		141,072		—		—
Financial liabilities:
Derivative financial instruments	74,255		—		74,255		—
Deferred compensation	150,713		—		150,713		—
Contingent consideration	207,000		—		—		207,000

(a)There were no transfers among the levels within the fair value hierarchy during the nine months ended December 2021 or the year ended March 2021.

The following table presents the changes in fair value of the contingent consideration liability designated as Level 3:


(In thousands)	Three Months Ended December 2021		Nine Months Ended December 2021
Beginning Balance	$	99,000	$	207,000

Change in fair value	(50,000)		(158,000)
Ending Balance	$	49,000	$	49,000

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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, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies, 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. VF's short-term investments at March 2021 included excess cash invested in a managed income fund that approximated fair value based on Level 1 measurements.

The contingent consideration liability represents the estimated amount of additional cash consideration to be paid to the selling shareholders of Supreme, which is dependent upon the achievement of certain financial targets over the one-year earn-out period ending January 31, 2022. The estimated fair value of the contingent consideration liability, which could range from

zero to $300.0 million, was $207.0 million as of March 2021. The contingent consideration liability is remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations. As of December 2021, the fair value of the contingent consideration liability was remeasured to an estimated fair value of $49.0 million based on the probability-weighted present value of various future cash payment outcomes resulting from the estimated achievement levels of the financial targets. Refer to Note 4 for additional information on the acquisition of Supreme.

All other 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 December 2021 and March 2021, their carrying values approximated fair value. Additionally, at December 2021 and March 2021, the carrying values of VF’s long-term debt, including the current portion, were $5,147.3 million and $5,710.2 million, respectively, compared with fair values of $5,383.7 million and $6,017.3 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.

NOTE 18 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Summary of Derivative Financial Instruments

All of VF’s outstanding derivative financial instruments are foreign exchange forward contracts. Although derivatives meet the criteria for hedge accounting at the inception of the hedging relationship, a limited number of derivative contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes. The notional amounts of all outstanding

derivative contracts were $2.8 billion at December 2021 and $2.5 billion at both March 2021 and December 2020, consisting primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Mexican peso, Swedish krona, South Korean won, Polish zloty, Japanese yen and New Zealand dollar. Derivative contracts have maturities up to 20 months.

The following table presents outstanding derivatives on an individual contract basis:


	Fair Value of Derivatives with Unrealized Gains						Fair Value of Derivatives with Unrealized Losses

(In thousands)	December 2021		March 2021		December 2020		December 2021		March 2021		December 2020
Foreign currency exchange contracts designated as hedging instruments	$	55,000	$	12,301	$	12,457	$	(32,660)	$	(73,087)	$	(96,437)
Foreign currency exchange contracts not designated as hedging instruments	2,466		956		3,752		(327)		(1,168)		(1,398)
Total derivatives	$	57,466	$	13,257	$	16,209	$	(32,987)	$	(74,255)	$	(97,835)

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VF records and presents the fair values of all of its derivative assets and liabilities in the Consolidated Balance Sheets on a gross basis, even though they are subject to master netting agreements. If VF were to offset and record the asset and liability balances of its foreign exchange forward contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets would be adjusted from the current gross presentation to the net amounts as detailed in the following table:


	December 2021				March 2021				December 2020

(In thousands)	Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability
Gross amounts presented in the Consolidated Balance Sheets	$	57,466	$	(32,987)	$	13,257	$	(74,255)	$	16,209	$	(97,835)
Gross amounts not offset in the Consolidated Balance Sheets	(22,964)		22,964		(13,246)		13,246		(16,209)		16,209
Net amounts	$	34,502	$	(10,023)	$	11	$	(61,009)	$	—	$	(81,626)

Derivatives are classified as current or noncurrent based on maturity dates, as follows:


(In thousands)	December 2021		March 2021		December 2020
Other current assets	$	50,298	$	7,440	$	15,510
Accrued liabilities	(28,326)		(66,351)		(77,317)
Other assets	7,168		5,817		699
Other liabilities	(4,661)		(7,904)		(20,518)

Cash Flow Hedges

VF uses derivative contracts primarily to hedge a portion of the exchange risk for its forecasted sales, purchases, production costs, operating costs and intercompany royalties. The effects of cash flow hedging included in VF’s Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income are summarized as follows:


(In thousands)	Gain (Loss) on Derivatives Recognized in OCI Three Months Ended December				Gain (Loss) on Derivatives Recognized in OCI Nine Months Ended December

Cash Flow Hedging Relationships	2021		2020		2021		2020
Foreign currency exchange	$	14,185	$	(82,491)	$	43,983	$	(129,817)


(In thousands)	Gain (Loss) Reclassified from Accumulated OCI into Income Three Months Ended December				Gain (Loss) Reclassified from Accumulated OCI into Income Nine Months Ended December

Location of Gain (Loss)	2021		2020			2021		2020
Net revenues	$	(9,284)	$	4,048		$	(16,045)	$	6,354
Cost of goods sold	(3,974)		224			(26,644)		25,372
Selling, general and administrative expenses	688		586			(418)		2,934
Other income (expense), net	104		(613)			(2,958)		1,190
Interest expense	27		26			81		80
Total	$	(12,439)	$	4,271		$	(45,984)	$	35,930

Derivative Contracts Not Designated as Hedges

VF uses derivative contracts to manage foreign currency exchange risk on third-party accounts receivable and payable, as well as intercompany borrowings. These contracts are not designated as hedges, and are recorded at fair value in the Consolidated Balance Sheets. Changes in the fair values of these instruments are recognized directly in earnings. Gains or losses on these contracts largely offset the net transaction losses or gains on the related assets and liabilities. In the case of derivative contracts executed on foreign currency exposures that are no longer probable of occurring, VF de-designates these hedges and the fair value changes of these instruments are also recognized directly in earnings.

The impact of de-designated derivative contracts and changes in the fair value of derivative contracts not designated as hedges, recognized as gains or losses in VF's Consolidated Statements of Operations were not material for the three and nine months ended December 2021 and December 2020.

Other Derivative Information

At December 2021, accumulated OCI included $13.4 million of pre-tax net deferred gains for foreign currency exchange contracts that are expected to be reclassified to earnings during the next 12 months. The amounts ultimately reclassified to earnings will depend on exchange rates in effect when outstanding derivative contracts are settled.

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Net Investment Hedge

The Company has designated its euro-denominated fixed-rate notes, which represent €1.850 billion in aggregate principal, as a net investment hedge of VF’s investment in certain foreign operations. Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses of the debt are deferred in the foreign currency translation and other component of accumulated OCI as an offset to the foreign currency translation adjustments on the hedged investments.

During the three and nine-month periods ended December 2021, the Company recognized an after-tax gain of $29.1 million and $51.7 million, respectively, in OCI related to the net investment hedge transaction, and an after-tax loss of $79.2 million and $150.8 million for the three and nine-month periods ended December 2020, respectively. Any amounts deferred in accumulated OCI will remain until the hedged investment is sold or substantially liquidated.

NOTE 19 — RESTRUCTURING

The Company incurs restructuring charges related to strategic initiatives and cost optimization of business activities, primarily related to severance and employee-related benefits. During the three and nine months ended December 2021, VF recognized $3.6 million and $11.4 million, respectively, of restructuring charges, related to approved initiatives. Of the restructuring charges recognized in the three and nine months ended December 2021, $3.5 million and $9.8 million were reflected in selling, general and administrative expenses, respectively, and $0.1 million and $1.6 million in cost of goods sold, respectively.

The Company has not recognized any significant incremental costs related to accruals for the year ended March 2021 or prior periods.

Of the $31.1 million total restructuring accrual at December 2021, $30.1 million is expected to be paid out within the next 12 months and is classified within accrued liabilities. The remaining $1.0 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:


	Three Months Ended December				Nine Months Ended December

(In thousands)	2021		2020		2021		2020
Severance and employee-related benefits	$	3,056	$	24,545	$	7,352	$	52,937
Asset impairments	—		—		—		10,557
Accelerated depreciation	590		3,429		4,057		10,093
Inventory write-downs	—		7,115		—		7,115
Contract termination and other	—		3,107		—		3,324
Total restructuring charges	$	3,646	$	38,196	$	11,409	$	84,026

Restructuring costs by business segment are as follows:


	Three Months Ended December				Nine Months Ended December

(In thousands)	2021		2020		2021		2020
Outdoor	$	1,529	$	2,676	$	4,206	$	9,271
Active	—		3,275		1,008		3,938
Work	1,527		8,409		2,315		27,216
Other	590		23,836		3,880		43,601
Total	$	3,646	$	38,196	$	11,409	$	84,026

The activity in the restructuring accrual for the nine-month period ended December 2021 was as follows:


(In thousands)	Severance		Other		Total
Accrual at March 2021	$	59,810	$	6,944	$	66,754
Charges	7,352		—		7,352
Cash payments and settlements	(36,130)		(5,680)		(41,810)
Adjustments to accruals	(970)		(40)		(1,010)
Impact of foreign currency	(155)		(80)		(235)
Accrual at December 2021	$	29,907	$	1,144	$	31,051

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NOTE 20 — CONTINGENCIES

The Company petitioned the U.S. Tax Court to resolve an IRS dispute regarding the timing of income inclusion associated with the 2011 Timberland acquisition. The Company remains confident in our timing and treatment of the income inclusion, and therefore this matter is not reflected in our consolidated financial statements. We are vigorously defending our position, and do not expect the resolution to have a material adverse impact on the Company's financial position, results of operations or cash flows. While the IRS argues immediate income inclusion, the Company's position is to include the income over a period of years. As the matter relates to 2011, nearly half of the timing at dispute has passed with the Company including the income, and paying the related tax, on our income tax returns. The Company

notes that should the IRS prevail in this timing matter, the net interest expense would be up to $196.7 million. Further, this timing matter is impacted by the Tax Cuts and Jobs Act that reduced the U.S. corporate income tax rate from 35% to 21%. If the IRS is successful, this rate differential would increase tax expense by approximately $136.3 million.

The Company is currently involved in other legal proceedings that are ordinary, routine litigation incidental to the business. The resolution of any particular proceeding is not currently expected to have a material adverse impact on the Company's financial position, results of operations or cash flows.

NOTE 21 — SUBSEQUENT EVENT

On January 25, 2022, VF’s Board of Directors declared a quarterly cash dividend of $0.50 per share, payable on March 21, 2022 to stockholders of record on March 10, 2022.

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ITEM 2 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

All per share amounts are presented on a diluted basis and all percentages shown in the tables below and the following discussion have been calculated using unrounded numbers.

References to the three and nine months ended December 2021 foreign currency amounts below reflect the changes in foreign exchange rates from the three and nine months ended December 2020 and their impact on translating foreign currencies into U.S. dollars. VF’s most significant foreign currency exposure relates to business conducted in euro-based countries. Additionally, VF conducts business in other developed and emerging markets around the world with exposure to foreign currencies other than the euro.

On December 28, 2020, VF acquired 100% of the outstanding shares of Supreme Holdings, Inc. ("Supreme"). The business results for Supreme have been included in the Active segment.

All references to contributions from acquisition below represent the operating results of Supreme for the three and nine months ended December 2021. Refer to Note 4 to VF's consolidated financial statements for additional information on the acquisition.

Refer to Note 5 to VF’s consolidated financial statements for additional information on discontinued operations.

Unless otherwise noted, amounts, percentages and discussion for all periods included below reflect the results of operations and financial condition from VF’s continuing operations.


RECENT DEVELOPMENTS


Impact of COVID-19

As the global impact of the novel coronavirus ("COVID-19") continues, VF remains first and foremost focused on a people-first approach that prioritizes the health and well-being of its employees, customers, trade partners and consumers around the world. To help mitigate the spread of COVID-19 and in response to health advisories and governmental actions and regulations, VF has modified its business practices including the temporary closing of offices and retail stores, instituting travel bans and restrictions and implementing health and safety measures including social distancing and quarantines. VF has also implemented measures that are designed to ensure the health, safety and well-being of associates employed in its distribution, fulfillment and manufacturing centers around the world.

At the beginning of the first quarter of Fiscal 2022, over 95% of VF-operated retail stores were open in North America, with all VF-owned retail stores reopened by the end of the first quarter. In the Europe region, approximately 60% of VF-operated retail stores were closed at the beginning of the first quarter of Fiscal 2022, with all stores reopened by the end of the first quarter. In the Asia-Pacific region, nearly all VF-operated retail stores were open at the beginning of the first quarter of Fiscal 2022; however, approximately 5% reclosed by the end of the first quarter. In comparison, at the beginning of the first quarter of Fiscal 2021, all VF-operated retail stores in North America and in the Europe region were closed. By the end of the first quarter of Fiscal 2021, approximately 75% and 90% of VF-operated retail

stores were open in North America and the Europe region, respectively. In the Asia-Pacific region, approximately 5% of VF-owned retail stores were closed at the beginning of the first quarter of Fiscal 2021, with all opened by the end of the first quarter of Fiscal 2021.

At the beginning of the second quarter of Fiscal 2022, all VF-operated retail stores in North America and in the Europe region were open and remained open during the quarter. In the Asia-Pacific region, approximately 5% of VF-operated retail stores were closed at the beginning of the second quarter of Fiscal 2022 with nearly all stores open at the end of the second quarter. In comparison, at the beginning of the second quarter of Fiscal 2021, approximately 75% of the VF-operated retail stores in North America were open, and over 95% were open at the end of the second quarter of Fiscal 2021. During the second quarter of Fiscal 2021, nearly all of the VF-operated retail stores in the Europe and Asia-Pacific regions were open.

At the beginning of the third quarter of Fiscal 2022, all VF-operated retail stores in North America were open and remained open during the quarter. In the Europe region, all VF-operated stores were open at the beginning of the third quarter of Fiscal 2022; however, approximately 6% of stores reclosed by the end of the third quarter. In the Asia-Pacific region, nearly all VF-operated stores were open at the beginning of the third quarter of Fiscal 2022, and all stores were open by the end of the third quarter. In comparison, at the beginning of the third quarter of

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Fiscal 2021, approximately 95% of the VF-operated retail stores in North America were open, however due to stores that reclosed, approximately 85% of stores were open at the end of the third quarter of Fiscal 2021. In the Europe region, nearly all VF-operated retail stores were open at the beginning of the third quarter of Fiscal 2021, however due to stores that reclosed, approximately 50% of stores were open at the end of the third quarter of Fiscal 2021. During the third quarter of Fiscal 2021, nearly all of the VF-operated retail stores in the Asia-Pacific regions were open.

VF is continuing to monitor the COVID-19 outbreak globally and will comply with guidance from government entities and public health authorities to prioritize the health and well-being of its employees, customers, trade partners and consumers. As COVID-19 uncertainty continues, retail store reclosures may occur.

Consistent with VF’s long-term strategy, the Company’s digital platform remains a high priority through which its brands stay connected with consumer communities while providing experiential content. Prior to the COVID-19 pandemic, consumer spending had started shifting to brand e-commerce sites and other digital platforms, which accelerated due to changes in the retail landscape resulting from the COVID-19 pandemic.

COVID-19 has also impacted some of VF's suppliers, including third-party manufacturers, logistics providers and other vendors. At this time, the majority of VF's supply chain is operational. Suppliers are complying with local health advisories and governmental restrictions which has resulted in product delays. The resurgence of COVID-19 lockdowns in key sourcing countries has resulted in additional manufacturing capacity constraints during Fiscal 2022; however, the situation has improved over time. Additionally, Fiscal 2022 has been impacted by continued port congestion, lengthened transit times, equipment availability and other logistics challenges. These issues have caused significant product delays, which has resulted in challenges to timely meet customer demand in Fiscal 2022. VF is working with its suppliers to minimize disruption and is employing expedited freight as needed. VF's distribution centers are operational in accordance with local government guidelines while maintaining enhanced health and safety protocols.

The COVID-19 pandemic is ongoing and dynamic in nature, and has driven global uncertainty and disruption. While we are not able to determine the ultimate length and severity of the COVID-19 pandemic, we expect ongoing disruption to our business.


Enterprise Protection Strategy

VF has taken a number of actions to advance its Enterprise Protection Strategy in response to the COVID-19 pandemic.

At December 2021, VF had approximately $1.3 billion of cash and equivalents. Additionally, VF had approximately $2.2 billion available for borrowing against its Global Credit Facility, subject to certain restrictions.

Actions VF has taken to support its business in response to the COVID-19 pandemic included the Company's decision to temporarily pause its share repurchase program on April 7, 2020. The Company decided to reinstate the program during the third quarter of Fiscal 2022 and completed $300.0 million of repurchases during the period, which leaves VF with $2.5 billion remaining under its share repurchase authorization. The Company paid cash dividends of $0.50 per share and $1.48 per share during the three and nine months ended December 2021, respectively, and has declared a cash dividend of $0.50 per share that is payable in the fourth quarter of Fiscal 2022. Subject to approval by its Board of Directors, VF intends to continue to pay its regularly scheduled dividend.

The Company has also commenced a multi-year initiative designed to enable our ability to accelerate and advance VF's business model transformation. One of the key objectives of this initiative is to deliver global cost savings over a three-year period that will be used to support the transformation agenda and highest-priority growth drivers. As VF continues to actively monitor the situation and advance our business model transformation, we may take further actions that affect our operations.

We believe the Company has sufficient liquidity and flexibility to operate and continue to execute our strategy during the disruptions caused by the COVID-19 pandemic and related governmental actions and regulations and health authority advisories, and meet its obligations as they become due. However, due to the uncertainty of the duration and severity of the COVID-19 pandemic, governmental actions in response to the pandemic, and the impact on us and our consumers, customers and suppliers, there is no certainty that the measures we take will be sufficient to mitigate the risks posed by COVID-19. See Part I, “Item 1A. Risk Factors” in the Fiscal 2021 Form 10-K for additional discussion.


HIGHLIGHTS OF THE THIRD QUARTER OF FISCAL 2022

•Revenues were up 22% to $3.6 billion compared to the three months ended December 2020, including the recovery from the negative impact of COVID-19 on the prior year period and a 7% contribution from the Supreme acquisition.

•Outdoor segment revenues increased 23% to $1.9 billion compared to the three months ended December 2020.

•Active segment revenues increased 25% to $1.4 billion compared to the three months ended December 2020, including a $193.2 million (17%) contribution from the

Supreme acquisition and a 1% unfavorable impact from foreign currency.

•Work segment revenues increased 6% to $285.1 million compared to the three months ended December 2020, including a 1% favorable impact from foreign currency.

•Direct-to-consumer revenues were up 30% over the 2020 period, including a 13% contribution from the Supreme acquisition. E-commerce revenues increased 21% in the current period, including an 18% contribution from the Supreme acquisition. Direct-to-consumer revenues

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accounted for 55% of VF's net revenues for the three months ended December 2021.

•International revenues increased 19% compared to the three months ended December 2020, including a 1% unfavorable impact from foreign currency. Greater China (which includes Mainland China, Hong Kong and Taiwan) revenues decreased 6%, including a 3% favorable impact from foreign currency. International revenues represented 46% of VF's net revenues for the three months ended December 2021.

•Gross margin increased 140 basis points to 56.1% compared to the three months ended December 2020, primarily driven by reduced promotional activity, which was partially offset by increased expedited freight costs.

•Earnings per share was $1.32 compared to $0.83 in the 2020 period. The increase was primarily driven by recovery from the negative impact of COVID-19 on the prior year period and contribution from the Supreme acquisition.


ANALYSIS OF RESULTS OF OPERATIONS


Consolidated Statements of Operations

The following table presents a summary of the changes in net revenues for the three and nine months ended December 2021 from the comparable periods in 2020:


(In millions)	Three Months Ended December		Nine Months Ended December
Net revenues — 2020	$	2,971.5	$	6,656.2
Organic	463.8		1,795.9
Acquisition	193.2		438.5

Impact of foreign currency	(4.1)		126.6
Net revenues — 2021	$	3,624.4	$	9,017.2

VF reported a 22% and 35% increase in revenues for the three and nine months ended December 2021, respectively, compared to the 2020 periods. The revenue increase in both periods was primarily driven by recovery from the negative impact of COVID-19 on demand and distribution channels in the prior year periods, which included temporary closures of VF-operated retail and VF's wholesale customer stores. These growth rates have been impacted in the current year by supply chain disruption, including port delays, lengthened transit times, logistics challenges and supplier production issues. The three and nine months ended December 2021 also included a $193.2 million (7%) and $438.5 million (6%) contribution from the Supreme acquisition, respectively. The increase in the nine months ended December 2021 also included a 1% favorable impact from foreign currency.

Revenues increased across all regions in the three and nine months ended December 2021. The largest increases were in the United States, Europe and Americas (non-U.S.) regions,

which experienced the most significant negative impact of COVID-19 in the prior year periods. Revenues in the Asia-Pacific region in the three and nine months ended December 2021 have been negatively impacted by COVID-19 resurgence, which has caused disruption and consumption pressure in the region, particularly in Greater China.

Revenues increased in both our wholesale and direct-to-consumer channels in the three and nine months ended December 2021. The overall increase in the direct-to-consumer channel was driven by reopenings of our owned retail stores, which had temporary closures in the prior year periods due to COVID-19, and the contribution from the Supreme acquisition during the three and nine months ended December 2021. The overall increase in the wholesale channel also reflects recovery from the negative impact of COVID-19 on the prior year periods.

Additional details on revenues are provided in the section titled “Information by Reportable Segment.”

The following table presents the percentage relationships to net revenues for components of the Consolidated Statements of Operations:


	Three Months Ended December				Nine Months Ended December

	2021		2020		2021		2020
Gross margin (net revenues less cost of goods sold)	56.1	%	54.7	%	55.3	%	52.9	%
Selling, general and administrative expenses	37.4		40.8		39.3		45.6

Operating margin	18.7	%	13.9	%	16.0	%	7.3	%

Gross margin increased 140 and 240 basis points in the three and nine months ended December 2021, respectively, compared to the 2020 periods. The increase in both periods was primarily driven by higher levels of full-price sales as increased promotional activity was used to clear elevated inventory levels relative to demand in the prior year periods, primarily due to the negative impact of COVID-19. The three and nine months ended

December 2021 also included a 20 and 30 basis point contribution from the Supreme acquisition, respectively. The increase in gross margin in both periods was partially offset by expedited freight costs, which were a direct result of the supply chain disruption.

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Selling, general and administrative expenses as a percentage of total revenues decreased during both the three and nine months ended December 2021 compared to the 2020 periods, primarily reflecting leverage of operating expenses due to increased revenues compared to the prior year periods, which were negatively impacted by COVID-19. Selling, general and administrative expenses increased $138.8 million and $513.1 million in the three and nine months ended December 2021, respectively, compared to the 2020 periods, primarily due to cost controls taken in the prior year periods in response to COVID-19 and payroll relief in the prior year periods from the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and other governmental packages. The Company recognized $8.3 million and $76.0 million during the three and nine months ended December 2020, respectively, as a result of relief from the CARES Act and other governmental packages. The increase in both periods was also due to continued investments in direct-to-consumer and digital strategic growth initiatives, advertising expenses, higher distribution spending and the impact from Supreme. The increases in the three and nine months ended December 2021 were partially offset by a $50.0 million and $158.0 million decrease in the estimated fair value of the contingent consideration liability associated with the Supreme acquisition, which were recognized in the selling, general and administrative expense line item during the three and nine months ended December 2021, respectively.

Net interest expense increased $1.6 million and $9.9 million during the three and nine months ended December 2021, respectively, compared to the 2020 periods. The increase in net interest expense in both the three and nine months ended December 2021 was primarily due to lower invested balances and lower investment interest rates. Total outstanding debt averaged $5.7 billion for both the nine months ended December 2021 and 2020, with a weighted average interest rate of 2.1% for both periods.

Loss on debt extinguishment of $3.6 million was recorded in the three and nine months ended December 2021 as a result of the early redemption of $500.0 million in aggregate principal amount of VF's outstanding 2.050% Senior Notes due April 2022.

Other income (expense), net decreased $6.6 million and increased $43.6 million during the three and nine months ended December 2021, respectively, compared to the 2020 periods. The

decrease in the three months ended December 2021 was primarily due to higher pension benefit costs driven by an increase in settlement charges. The increase in the nine months ended December 2021 was primarily due to a $42.4 million expense recorded in the three months ended June 2020 related to the release of currency translation amounts associated with the substantial liquidation of foreign entities in certain countries in South America.

The effective income tax rate for the nine months ended December 2021 was 16.0% compared to 20.2% in the 2020 period. The nine months ended December 2021 included a net discrete tax expense of $43.7 million, which included a $92.3 million net tax expense related to unrecognized tax benefits and interest, a $9.6 million net tax benefit related to return to accrual adjustments, a $35.2 million net tax benefit related to withholding taxes on prior foreign earnings, a $1.7 million tax benefit related to stock compensation, and a $2.4 million net tax benefit related to tax rate change on deferred tax items. Excluding the $43.7 million net discrete tax expense in the 2021 period, the effective income tax rate would have been 12.8%. The nine months ended December 2020 included a net discrete tax expense of $3.7 million, which included a $15.2 million net tax expense related to unrecognized tax benefits and interest, a $2.3 million tax benefit related to stock compensation, a $4.9 million net tax benefit related to return to accrual adjustments and a $4.3 million net tax benefit related to withholding taxes on prior foreign earnings. Excluding the $3.7 million net discrete tax expense in the 2020 period, the effective income tax rate would have been 19.2%. Without discrete items, the effective income tax rate for the nine months ended December 2021 decreased by 6.4% compared with the 2020 period primarily due to losses generated in the prior year and more favorable expectations to utilize foreign tax credits generated in the current year.

As a result of the above, income from continuing operations in the three months ended December 2021 was $517.8 million ($1.32 per diluted share) compared to $327.7 million ($0.83 per diluted share) in the 2020 period, and income from continuing operations in the nine months ended December 2021 was $1.1 billion ($2.89 per diluted share) compared to $293.2 million ($0.75 per diluted share) in the 2020 period. Refer to additional discussion in the “Information by Reportable Segment” section below.


Information by Reportable Segment

VF's reportable segments are: Outdoor, Active and Work. We have included an Other category in the tables below for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Included in this Other category are results primarily related to the sale of non-VF products and sourcing activities related to transition services.

Refer to Note 15 to the consolidated financial statements for a summary of results of operations by segment, along with a reconciliation of segment profit to income before income taxes.

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The following tables present a summary of the changes in segment revenues and profit in the three and nine months ended December 2021 from the comparable periods in 2020 and revenues by region for our Top 4 brands for the three and nine months ended December 2021 and 2020:

Segment Revenues:


	Three Months Ended December
(In millions)	Outdoor		Active		Work		Other		Total
Segment revenues — 2020	$	1,571.0	$	1,127.1	$	270.2	$	3.2	$	2,971.5
Organic	358.2		94.3		14.2		(2.9)		463.8
Acquisition	—		193.2		—		—		193.2

Impact of foreign currency	(0.8)		(4.0)		0.7		—		(4.1)
Segment revenues — 2021	$	1,928.4	$	1,410.6	$	285.1	$	0.3	$	3,624.4

	Nine Months Ended December
(In millions)	Outdoor		Active		Work		Other		Total
Segment revenues — 2020	$	3,066.7	$	2,898.6	$	686.2	$	4.7	$	6,656.2
Organic	931.9		704.8		163.3		(4.1)		1,795.9
Acquisition	—		438.5		—		—		438.5

Impact of foreign currency	54.2		62.9		9.5		—		126.6
Segment revenues — 2021	$	4,052.8	$	4,104.8	$	859.0	$	0.6	$	9,017.2

Segment Profit (Loss):


	Three Months Ended December
(In millions)	Outdoor		Active		Work		Other		Total
Segment profit (loss) — 2020	$	311.8	$	201.4	$	16.9	$	(4.5)	$	525.6
Organic	135.8		0.8		30.7		4.5		171.8
Acquisition	—		53.7		—		—		53.7

Impact of foreign currency	2.8		(1.4)		0.1		—		1.5
Segment profit (loss) — 2021	$	450.4	$	254.5	$	47.7	$	—	$	752.6

	Nine Months Ended December
(In millions)	Outdoor		Active		Work		Other		Total
Segment profit (loss) — 2020	$	283.5	$	467.6	$	13.7	$	(9.3)	$	755.5
Organic	371.4		235.5		134.7		8.6		750.2
Acquisition	—		93.2		—		—		93.2

Impact of foreign currency	7.9		13.4		2.2		—		23.5
Segment profit (loss) — 2021	$	662.8	$	809.7	$	150.6	$	(0.7)	$	1,622.4

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Top Brand Revenues:
	Three Months Ended December 2021
(In millions)	Vans®		The North Face®		Timberland® (a)		Dickies®		Total
United States	$	645.8	$	620.6	$	274.1	$	149.6	$	1,690.1
International:
Europe	194.6		415.7		204.6		18.6		833.5
Asia-Pacific	148.9		146.4		84.5		37.4		417.2
Americas (non-U.S.)	71.2		57.6		30.1		5.8		164.7
Global	$	1,060.5	$	1,240.3	$	593.3	$	211.4	$	3,105.5

	Three Months Ended December 2020
(In millions)	Vans®		The North Face®		Timberland® (a)		Dickies®		Total
United States	$	593.5	$	518.2	$	232.6	$	112.7	$	1,457.0
International:
Europe	159.4		297.1		180.2		31.3		668.0
Asia-Pacific	178.8		113.6		94.6		51.9		438.9
Americas (non-U.S.)	50.3		43.2		28.9		6.5		128.9
Global	$	982.0	$	972.1	$	536.3	$	202.4	$	2,692.8


	Nine Months Ended December 2021
(In millions)	Vans®		The North Face®		Timberland® (a)		Dickies®		Total
United States	$	1,805.1	$	1,211.5	$	644.0	$	455.2	$	4,115.8
International:
Europe	669.6		852.4		472.2		58.2		2,052.4
Asia-Pacific	492.9		303.1		181.8		111.6		1,089.4
Americas (non-U.S.)	203.1		123.2		90.1		15.7		432.1
Global	$	3,170.7	$	2,490.2	$	1,388.1	$	640.7	$	7,689.7

	Nine Months Ended December 2020
(In millions)	Vans®		The North Face®		Timberland® (a)		Dickies®		Total
United States	$	1,378.0	$	960.5	$	459.1	$	305.0	$	3,102.6
International:
Europe	484.7		559.3		396.5		74.6		1,515.1
Asia-Pacific	482.3		233.7		194.2		120.2		1,030.4
Americas (non-U.S.)	130.3		82.9		64.5		17.3		295.0
Global	$	2,475.3	$	1,836.4	$	1,114.3	$	517.1	$	5,943.1

(a) The global Timberland brand includes Timberland®, reported within the Outdoor segment and Timberland PRO®, reported within the Work segment.

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The following sections discuss the changes in revenues and profitability by segment. For purposes of this analysis, royalty revenues have been included in the wholesale channel for all periods.

Outdoor


	Three Months Ended December								Nine Months Ended December

(Dollars in millions)	2021			2020			Percent Change		2021			2020			Percent Change
Segment revenues	$	1,928.4		$	1,571.0		22.7	%	$	4,052.8		$	3,066.7		32.2	%
Segment profit	450.4			311.8			44.5	%	662.8			283.5			133.8	%
Operating margin	23.4		%	19.8		%			16.4		%	9.2		%

The Outdoor segment includes the following brands: The North Face®, Timberland®, Smartwool®, Icebreaker® and Altra®.

Global revenues for Outdoor increased 23% in the three months ended December 2021 compared to 2020, including recovery from the negative impact of COVID-19 on the prior year period. Revenues in the United States increased 22%. Revenues in the Europe region increased 30%, including a 2% unfavorable impact from foreign currency. Revenues in the Asia-Pacific region increased 11%, including a 3% favorable impact from foreign currency. Revenues in the Americas (non-U.S.) region increased 21%, including a 4% favorable impact from foreign currency.

Global revenues for Outdoor increased 32% in the nine months ended December 2021 compared to 2020, including a 2% favorable impact due to foreign currency. The overall increase in revenues during the period was driven by recovery from the negative impact of COVID-19 on the prior year period. Revenues in the United States increased 32%. Revenues in the Europe region increased 39%, including a 3% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 13%, including a 5% favorable impact from foreign currency. Revenues in the Americas (non-U.S.) region increased 45%, including a 7% favorable impact from foreign currency.

Global revenues for The North Face® brand increased 28% and 36% in the three and nine months ended December 2021, respectively, compared to the 2020 periods. This includes a 1% and 2% favorable impact from foreign currency in the three and nine months ended December 2021, respectively. The overall revenue growth reflects increases in all regions and channels during the three and nine months ended December 2021. The overall growth was led by the Europe region, which increased 40% and 52% in the three and nine months ended December 2021, respectively, including a 1% unfavorable and 3% favorable impact from foreign currency, respectively.

Global revenues for the Timberland® brand increased 11% and 24% in the three and nine months ended December 2021, respectively, compared to the 2020 periods, including a 1% unfavorable and 2% favorable impact from foreign currency in

the three and nine months ended December 2021, respectively. The increase in both periods was driven by recovery from the negative impact of COVID-19 on demand and distribution channels in the prior year periods. The overall growth was led by an increase of 20% and 45% in the United States in the three and nine months ended December 2021, respectively. The increase in both periods was partially offset by an 11% and 6% decrease in the Asia-Pacific region during the three and nine months ended December 2021, respectively, including a 1% and 3% favorable impact from foreign currency, respectively. Revenues in the Asia-Pacific region have been negatively impacted by COVID-19 resurgence during both periods.

Global direct-to-consumer revenues for Outdoor increased 20% and 23% in the three and nine months ended December 2021, respectively, compared to the 2020 periods, including a 2% favorable impact from foreign currency in the nine months ended December 2021. The increase in both periods was primarily due to the reopening of VF-operated retail stores, which had significant temporary closures in the prior year periods due to COVID-19. Global wholesale revenues increased 26% and 39% in the three and nine months ended December 2021, respectively, compared to the 2020 periods, including a 2% favorable impact from foreign currency in the nine months ended December 2021. The increases reflect recovery from the negative impact of COVID-19 on the prior year periods.

Operating margin increased in the three and nine months ended December 2021 compared to the 2020 periods primarily due to leverage of operating expenses on increased revenues and reduced promotional activity compared to the prior year periods, which were negatively impacted by COVID-19. The increase in both periods was partially offset by expedited freight costs and continued investments in digital strategic growth initiatives. The prior year periods also included cost controls taken in response to COVID-19 and payroll relief from the CARES Act and other governmental packages.

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Active


	Three Months Ended December								Nine Months Ended December

(Dollars in millions)	2021			2020			Percent Change		2021			2020			Percent Change
Segment revenues	$	1,410.6		$	1,127.1		25.1	%	$	4,104.8		$	2,898.6		41.6	%
Segment profit	254.5			201.4			26.4	%	809.7			467.6			73.2	%
Operating margin	18.0		%	17.9		%			19.7		%	16.1		%

The Active segment includes the following brands: Vans®, Supreme®, Kipling®, Napapijri®, Eastpak®, JanSport® and Eagle Creek®.

Global revenues for Active increased 25% in the three months ended December 2021 compared to the 2020 period, including a 1% unfavorable impact from foreign currency. Included in these results are revenues from the Supreme acquisition of $193.2 million, which provided a 17% contribution to the overall increase. The overall increase in revenues during the period was driven by recovery from the negative impact of COVID-19 on the prior year period. Revenues in the United States increased 27%, including an 18% contribution from the Supreme acquisition. Revenues in the Europe region increased 30%, including a 3% unfavorable impact from foreign currency and a 12% contribution from the Supreme acquisition. Revenues in the Asia-Pacific region increased 8%, driven by a 1% favorable impact from foreign currency and a 25% contribution from the Supreme acquisition, which were partially offset by a 23% decrease in Greater China primarily due to the negative impact of COVID-19 resurgence. Revenues in the Americas (non-U.S.) region increased 43%.

Global revenues for Active increased 42% in the nine months ended December 2021 compared to the 2020 period, including a 3% favorable impact from foreign currency. Included in these results are revenues from the Supreme acquisition of $438.5 million, which provided a 16% contribution to the overall increase. The overall increase in revenues during the period was driven by recovery from the negative impact of COVID-19 on the prior year period. Revenues in the United States increased 49%, including an 18% contribution from the Supreme acquisition. Revenues in the Europe region increased 39%, including a 3% favorable impact from foreign currency and an 8% contribution from the Supreme acquisition. Revenues in the Asia-Pacific region increased 20%, driven by a 5% favorable impact from foreign currency and a 19% contribution from the Supreme acquisition. Revenues in the Americas (non-U.S.) region increased 54%, including an 8% favorable impact from foreign currency.

Vans® brand global revenues increased 8% and 28% in the three and nine months ended December 2021, respectively, compared to the 2020 periods. This includes a 2% favorable impact from foreign currency in the nine months ended December 2021. The increase in both periods was driven by recovery from the negative impact of COVID-19 on demand and distribution

channels in the prior year periods. The overall growth in the three and nine months ended December 2021 was led by an increase of 9% and 31% in the United States, respectively, and an increase of 22% and 38% in the Europe region, respectively, including a 2% unfavorable and 4% favorable impact from foreign currency in the three and nine months ended December 2021, respectively. The increase in the three months ended December 2021 was partially offset by a 17% decrease in the Asia-Pacific region, including a 1% favorable impact from foreign currency, primarily due to the negative impact of COVID-19 resurgence.

Global direct-to-consumer revenues for Active increased 46% and 65% in the three and nine months ended December 2021, respectively, compared to the 2020 periods, including a 2% favorable impact from foreign currency in the nine months ended December 2021. Excluding revenues from the Supreme acquisition, global direct-to-consumer revenues increased 16% and 36% in the three and nine months ended December 2021, respectively, including a 1% unfavorable and 2% favorable impact from foreign currency in the three and nine months ended December 2021, respectively. The increase in both periods was primarily due to the reopening of VF-operated retail stores, which had significant temporary closures in the prior year periods due to COVID-19. Global wholesale revenues decreased 4% and increased 16% in the three and nine months ended December 2021, respectively, and included a 1% unfavorable and 2% favorable impact from foreign currency in the respective periods. The increase in the nine months ended December 2021 reflects recovery from the negative impact of COVID-19 on the prior year period.

Operating margin increased in the three and nine months ended December 2021 compared to the 2020 periods The increase in both the three and nine months ended December 2021 was primarily due to leverage of operating expenses on increased revenues and less promotional activity compared to the prior year periods, which was negatively impacted by COVID-19. The increase was partially offset by expedited freight costs and continued investments in digital strategic growth initiatives. The prior year periods also included cost controls taken in response to COVID-19 and payroll relief from the CARES Act and other governmental packages.

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Work


	Three Months Ended December								Nine Months Ended December

(Dollars in millions)	2021			2020			Percent Change		2021			2020			Percent Change
Segment revenues	$	285.1		$	270.2		5.5	%	$	859.0		$	686.2		25.2	%
Segment profit	47.7			16.9			182.1	%	150.6			13.7			*
Operating margin	16.7		%	6.3		%			17.5		%	2.0		%

*Calculation not meaningful

The Work segment includes the following brands: Dickies® and Timberland PRO®.

Global Work revenues increased 6% in the three months ended December 2021 compared to the 2020 period, including a 1% favorable impact from foreign currency. The increase in revenues during the period was attributed to overall growth in both the Dickies® and Timberland PRO® brands. Revenues in the United States increased 25%. Revenues in the Europe region decreased 42% due to strategic business model changes. Revenues in the Asia-Pacific region decreased 28%, including a 1% favorable impact from foreign currency, driven by declines in Greater China primarily due to the negative impact of COVID-19 resurgence. Revenues in the Americas (non-U.S.) region increased 3%, including a 4% favorable impact from foreign currency.

Global Work revenues increased 25% in the nine months ended December 2021 compared to the 2020 period, including a 1% favorable impact from foreign currency. The increase in revenues during the period was attributed to overall growth in both the Dickies® and Timberland PRO® brands, including recovery from the negative impact of COVID-19 on demand in the prior year period. Revenues in the United States increased 43%. Revenues in the Europe region decreased 24%, including a 2% favorable impact from foreign currency, due to strategic business model changes. Revenues in the Asia-Pacific region decreased 7%, including a 4% favorable impact from foreign currency, driven by declines in Greater China primarily due to the negative impact of COVID-19 resurgence. Revenues in the

Americas (non-U.S.) region increased 15%, including an 8% favorable impact from foreign currency.

Dickies® brand global revenues increased 4% and 24% in the three and nine months ended December 2021, respectively, compared to the 2020 periods, including a 1% favorable impact from foreign currency in the nine months ended December 2021. The growth in the three and nine months ended December 2021 was led by an increase of 33% and 49% in the United States, driven by growth in the wholesale channel and in work-inspired lifestyle products.

Operating margin increased in the three and nine months ended December 2021 compared to the 2020 periods. The increase in the three and nine months ended December 2021 was primarily due to leverage of operating expenses on increased revenues compared to the prior year periods, which were negatively impacted by COVID-19. The increase in both periods was also due to lower cost optimization activity and other charges indirectly related to the strategic review of the Occupational Workwear business in the prior year and other operating efficiency gains. The increase in both periods was partially offset by expedited freight costs and continued investments in digital strategic growth initiatives. The prior year periods also included cost controls taken in response to COVID-19 and payroll relief from the CARES Act and other governmental packages.


Reconciliation of Segment Profit to Income Before Income Taxes

There are three types of costs necessary to reconcile total segment profit, as discussed in the preceding paragraphs, to consolidated income from continuing operations before income taxes. These costs are (i) corporate and other expenses, discussed below, (ii) interest expense, net, and (iii) loss on debt extinguishment, which were both discussed in the “Consolidated Statements of Operations” section.


	Three Months Ended December						Nine Months Ended December

(Dollars in millions)	2021		2020		Percent Change		2021		2020		Percent Change

Corporate and other expenses	$	74.2	$	107.1	(30.7)	%	$	166.1	$	297.4	(44.2)	%
Interest expense, net	33.4		31.8		5.1	%	100.5		90.7		10.9	%

Corporate and other expenses are those that have not been allocated to the segments for internal management reporting, including (i) information systems and shared service costs, (ii) corporate headquarters costs, and (iii) certain other income and expenses. The decrease in the three and nine months ended December 2021 was primarily attributed to a $50.0 million and $158.0 million decrease in the estimated fair value of the contingent consideration liability associated with the Supreme acquisition in the three and nine months ended December 2021, respectively. The decrease in both periods was also due to lower charges associated with cost optimization and other activities indirectly related to the strategic review of the Occupational

Workwear business. In addition, the nine months ended December 2020 included a $42.4 million expense related to the release of currency translation amounts associated with the substantial liquidation of foreign entities in certain countries in South America. The decrease in the three and nine months ended December 2021 was partially offset by increased technology spending in the current year and lower discretionary spending in the prior year due to cost controls in response to COVID-19. The decrease in the nine months ended December 2021 was partially offset by higher costs related to a transformation initiative for our Asia-Pacific regional operations in the current year.

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International Operations

International revenues increased 19% and 30% in the three and nine months ended December 2021, respectively, compared to the 2020 periods driven by recovery from the negative impact of COVID-19 on the prior year periods, and included a 5% and 6% contribution from the Supreme acquisition in the respective periods. Foreign currency had an unfavorable impact of 1% and a favorable impact of 4% on international revenue in the three and nine months ended December 2021, respectively. Revenues in Europe increased 26% and 36% in the three and nine months ended December 2021, respectively, including a 2% unfavorable and 3% favorable impact from foreign currency in the three and nine months ended December 2021, respectively. In the Asia-Pacific region, revenues increased 5% and 14% in the three and nine months ended December 2021, respectively, and included a 10% and 9% contribution from the Supreme acquisition in the respective periods. Foreign currency had a favorable impact of

2% and 4% on Asia-Pacific revenue in the three and nine months ended December 2021, respectively. Revenues in Greater China decreased 6% and increased 5% in the three and nine months ended December 2021, respectively, including a 3% and 6% favorable impact from foreign currency in the three and nine months ended December 2021, respectively. The Asia-Pacific region was negatively impacted by COVID-19 resurgence during the three and nine months ended December 2021. Revenues in the Americas (non-U.S.) region increased 27% and 45% in the three and nine months ended December 2021, respectively, including a 3% and 8% favorable impact from foreign currency in the three and nine months ended December 2021, respectively. International revenues were 46% and 47% of total revenues in the three-month periods ended December 2021 and 2020, respectively, and 47% and 49% of total revenues in the nine-month periods ended December 2021 and 2020, respectively.


Direct-to-Consumer Operations

Direct-to-consumer revenues increased 30% and 43% in the three and nine months ended December 2021, respectively, compared to the 2020 periods, including a 2% favorable impact from foreign currency in the nine months ended December 2021. The three and nine months ended December 2021 included a 13% and 15% contribution from the Supreme acquisition, respectively. The increase in direct-to-consumer revenues was primarily due to the reopening of VF-operated retail stores, which had significant temporary closures in the prior year periods due to COVID-19. Our e-commerce business grew 21% and 23% in the three and nine months ended December 2021, respectively, including a 2% favorable impact from foreign currency in the nine months ended December 2021. The three and nine months ended December 2021 included an 18% and 21% contribution from the Supreme acquisition, respectively. Excluding the Supreme acquisition, e-commerce revenues increased 3% and 2% in the three and nine months ended December 2021, respectively, including a 2% favorable impact

from foreign currency in the nine months ended December 2021. The deceleration of e-commerce growth rates when compared to the prior year was primarily due to the reopening of VF-operated retail and wholesale customer stores, which had significant temporary closures in the prior year periods due to COVID-19, as consumer spending shifted to VF's brand e-commerce sites and other digital platforms during the temporary store closures. Consistent with VF’s long-term strategy, the Company’s digital platform remains a high priority and e-commerce revenues in the three and nine months ended December 2021 remain well above levels in periods prior to COVID-19. There were 1,354 VF-owned retail stores at December 2021 compared to 1,396 at December 2020. Direct-to-consumer revenues were 55% and 51% of total revenues in the three-month periods ended December 2021 and 2020, respectively, and 47% and 45% of total revenues in the nine-month periods ended December 2021 and 2020, respectively.

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ANALYSIS OF FINANCIAL CONDITION


Consolidated Balance Sheets

The following discussion refers to significant changes in balances at December 2021 compared to March 2021:

•Increase in accounts receivable — primarily due to the seasonality of the business and increased wholesale shipments.

•Increase in inventories — primarily due to recovery from the negative impact of COVID-19 on the comparative period.

•Decrease in short-term investments — due to the sale of short-term investments.

•Increase in short-term borrowings — primarily due to amounts related to VF's supply chain financing program.

•Increase in the current portion of long-term debt — due to the reclassification of $500.0 million of long-term notes due in April 2022.

•Increase in accrued liabilities — primarily due to an increase in the accrual for unrecognized tax benefits and the reclassification of a portion of the accrual from other liabilities due to the timing of expected settlement, and the reclassification of the contingent consideration liability associated with the Supreme acquisition from other liabilities.

•Decrease in long-term debt — due to the reclassification of $500.0 million of long-term notes due in April 2022 and the early redemption of $500.0 million of long-term notes in December 2021.

•Decrease in other liabilities — primarily due to lower deferred income taxes, a decrease in the accrual for unrecognized tax benefits resulting from the reclassification of a portion of the accrual to accrued liabilities, and the reclassification of the contingent consideration liability associated with the Supreme acquisition to accrued liabilities.

The following discussion refers to significant changes in balances at December 2021 compared to December 2020:

•Increase in inventories — primarily due to recovery from the negative impact of COVID-19 on the prior year period and amounts related to the Supreme acquisition.

•Decrease in short-term investments — due to the sale and maturity of short-term investments.

•Increase in intangible assets — primarily due to the acquired indefinite-lived Supreme® trademark intangible asset of $1.2 billion recorded in connection with the acquisition.

•Increase in goodwill — primarily due to the amounts recorded in connection with the Supreme acquisition of $1.25 billion.

•Decrease in short-term borrowings — primarily due to the repayment of commercial paper borrowings, partially offset by amounts related to VF's supply chain financing program.

•Increase in the current portion of long-term debt — due to the reclassification of $500.0 million of long-term notes due in April 2022.

•Increase in accounts payable — driven by the timing of payments made to vendors and an overall reduction in purchases and spending resulting from the COVID-19 impact in the prior year period.

•Increase in accrued liabilities — primarily due to an increase in the accrual for unrecognized tax benefits and the reclassification of a portion of the accrual from other liabilities due to the timing of expected settlement, and the contingent consideration liability recorded in connection with the Supreme acquisition.

•Decrease in long-term debt — due to the reclassification of $500.0 million of long-term notes due in April 2022 and the early redemption of $500.0 million of long-term notes in December 2021.

•Decrease in other liabilities — primarily due to a decrease in the accrual for unrecognized tax benefits resulting from the reclassification of a portion of the accrual to accrued liabilities.


Liquidity and Capital Resources

We consider the following to be measures of our liquidity and capital resources:


	December	March	December
(Dollars in millions)	2021	2021	2020
Working capital	$1,376.8	$2,113.1	$4,346.7
Current ratio	1.4 to 1	2.0 to 1	2.8 to 1
Net debt to total capital	59.4%	68.2%	58.7%

The decrease in the current ratio at December 2021 compared to March 2021 was primarily due to a net increase in current liabilities driven by a higher current portion of long-term debt and higher accrued liabilities, as discussed in the "Consolidated Balance Sheets" section above. The decrease in the current ratio at December 2021 compared to December 2020 was primarily due to a net decrease in current assets driven by lower cash balances due to the timing of proceeds from long-term debt

during the nine months ended December 2020, as discussed in the "Cash Provided (Used) by Financing Activities" section below and a net increase in current liabilities driven by a higher current portion of long-term debt and higher accrued liabilities, as discussed in the "Consolidated Balance Sheets" section above.

For the ratio of net debt to total capital, net debt is defined as short-term and long-term borrowings, in addition to operating

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lease liabilities, net of unrestricted cash. Total capital is defined as net debt plus stockholders’ equity. The decrease in the net debt to total capital ratio at December 2021 compared to March 2021 was primarily driven by a decrease in net debt due to the $500.0 million early redemption of 2.050% Senior Notes due April 2022 during December 2021 and higher cash balances at December 2021, and an increase in stockholders' equity. The increase in the net debt to total capital ratio at December 2021 compared to December 2020 was primarily driven by an increase in net debt due to lower cash balances at December 2021, partially offset by an increase in stockholders' equity. The increase in stockholders' equity for both comparisons was driven by net income in the respective periods, partially offset by payments of dividends and share repurchases.

VF’s primary source of liquidity is its expected annual cash flow from operating activities. Cash from operations is typically lower in the first half of the calendar year as inventory builds to support peak sales periods in the second half of the calendar year. Cash provided by operating activities in the second half of the calendar year is substantially higher as inventories are sold and accounts receivable are collected. Additionally, direct-to-consumer sales are highest in the fourth quarter of the calendar year. VF's additional sources of liquidity include available borrowing capacity against its Global Credit Facility, available cash balances and international lines of credit.

In summary, our cash flows from continuing operations were as follows:


	Nine Months Ended December

(In thousands)	2021		2020
Cash provided by operating activities	$	791,290	$	1,084,277
Cash provided (used) by investing activities	953,936		(813,526)
Cash provided (used) by financing activities	(1,257,664)		1,525,389

Cash Provided by Operating Activities

Cash flows related to operating activities are dependent on net income, adjustments to net income and changes in working capital. The decrease in cash provided by operating activities in the nine months ended December 2021 compared to December 2020 is primarily due to a decrease in net cash provided by working capital, partially offset by higher earnings for the periods compared.

Cash Provided (Used) by Investing Activities

The decrease in cash used by investing activities in the nine months ended December 2021 was primarily due to $616.5 million of net proceeds from the sale of the Occupational Workwear business and $598.8 million of proceeds from the sale of short-term investments in the nine months ended December 2021, compared to purchases of short-term investments of $800.0 million and $200.0 million of proceeds from maturities of short-term investments in the nine months ended December 2020. Capital expenditures increased $61.8 million and software purchases increased $11.8 million in the nine months ended December 2021 compared to the 2020 period.

Cash Provided (Used) by Financing Activities

The decrease in cash provided by financing activities during the nine months ended December 2021 was primarily due to the net proceeds from long-term debt issuance of $3.0 billion fixed-rate notes in the nine months ended December 2020, and a $502.8 million increase in payments on long-term debt and a $300.0 million increase in share repurchases in the nine months ended December 2021, which were partially offset by a $1.0 billion net decrease in short-term borrowings for the periods compared.

Share Repurchases

During the nine months ended December 2021, VF purchased 4.0 million shares of its Common Stock in open market transactions at a total cost of $300.0 million (average price per share of $74.45) under the share repurchase program authorized by VF's

Board of Directors. VF did not purchase shares of its Common stock in the open market during the nine months ended December 2020.

As of the end of December 2021, VF had $2.5 billion remaining for future repurchases under its share repurchase authorization. VF will continue to evaluate its use of capital, giving first priority to business acquisitions then to direct shareholder return in the form of dividends and share repurchases, and enterprise protection.

Revolving Credit Facility and Short-term Borrowings

VF relies on its ability to generate cash flows to finance its ongoing operations. In addition, VF has significant liquidity from its available cash balances and credit facilities. In November 2021, VF entered into a $2.25 billion senior unsecured revolving line of credit (the “Global Credit Facility”) that expires November 2026. The Global Credit Facility replaced VF's $2.25 billion revolving facility which was scheduled to expire in December 2023. VF may request an unlimited number of one year extensions so long as each extension does not cause the remaining life of the Global Credit Facility to exceed five years, subject to stated terms and conditions. The Global Credit Facility may be used to borrow funds in U.S. dollars or any alternative currency (including euros and any other currency that is freely convertible into U.S. dollars, approved at the request of the Company by the lenders) and has a $75.0 million letter of credit sublimit. In addition, the Global Credit Facility supports VF’s U.S. commercial paper program for short-term, seasonal working capital requirements and general corporate purposes, including acquisitions and share repurchases. Outstanding short-term balances may vary from period to period depending on the level of corporate requirements.

VF has restrictive covenants on its Global Credit Facility, including a consolidated net indebtedness to consolidated net capitalization financial ratio covenant starting at 70% with future step downs. The calculation of consolidated net indebtedness is net of unrestricted cash. As of December 2021, the covenant calculation includes cash and equivalents and excludes

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consolidated operating lease liabilities. As of December 2021, VF was in compliance with all covenants.

VF has a commercial paper program that allows for borrowings of up to $2.25 billion to the extent that it has borrowing capacity under the Global Credit Facility. There were no commercial paper borrowings as of December 2021. Standby letters of credit issued as of December 2021 were $24.4 million, leaving approximately $2.2 billion available for borrowing against the Global Credit Facility at December 2021. Additionally, VF had approximately $1.3 billion of cash and equivalents at December 2021.

VF has $32.5 million of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks. Total outstanding balances under these arrangements were $6.8 million at December 2021.

Redemption

Supply Chain Financing Program

Rating Agencies

VF’s favorable credit agency ratings allow for access to additional liquidity at competitive rates. At the end of December 2021, VF’s long-term debt ratings were ‘A-’ by Standard & Poor’s Global Ratings and ‘Baa1’ by Moody’s Investors Service, and commercial paper ratings by those rating agencies were ‘A-2’ and ‘P-2’, respectively.

None of VF’s long-term debt agreements contain acceleration of maturity clauses based solely on changes in credit ratings. However, if there were a change in control of VF, and as a result of the change in control the notes were rated below investment grade by recognized rating agencies, then VF would be obligated to repurchase the notes at 101% of the aggregate principal amount, plus any accrued and unpaid interest, if required by the respective holders of the notes. The change of control provision applies to all notes, except for the 2033 notes.

Dividends

The Company paid cash dividends of $0.50 per share and $1.48 per share during the three and nine months ended December 2021, and the Company has declared a cash dividend of $0.50 per share that is payable in the fourth quarter of Fiscal 2022. Subject to approval by its Board of Directors, VF intends to continue to pay its regularly scheduled dividend.

Contractual Obligations

Management’s Discussion and Analysis in the Fiscal 2021 Form 10-K provided a table summarizing VF’s material contractual obligations and commercial commitments at the end of Fiscal 2021 that would require the use of funds. As of December 2021, there have been no material changes in the amounts of unrecorded commitments disclosed in the Fiscal 2021 Form 10-K, except as noted below:

•Inventory purchase obligations increased by approximately $160.0 million at the end of December 2021 primarily due to the seasonality of VF's business.

There continues to be uncertainty about the duration and extent of the impact of COVID-19. However, management believes that VF has sufficient liquidity and flexibility to operate during and after the disruptions caused by the COVID-19 pandemic and related governmental actions and regulations and health authority advisories, and meet its current and long-term obligations as they become due.


Recent Accounting Pronouncements

Refer to Note 2 to VF’s consolidated financial statements for information on recently adopted and issued accounting standards.


Critical Accounting Policies and Estimates

Management has chosen accounting policies it considers to be appropriate to accurately and fairly report VF’s operating results and financial position in conformity with generally accepted accounting principles in the United States of America. Our critical accounting policies are applied in a consistent manner. Significant accounting policies are summarized in Note 1 to the consolidated financial statements included in the Fiscal 2021 Form 10-K.

The application of these accounting policies requires management to make estimates and assumptions about future events and apply judgments that affect the reported amounts of assets, liabilities, revenues, expenses, contingent assets and liabilities, and related disclosures. These estimates, assumptions and judgments are based on historical experience, current trends and other factors believed to be reasonable under the circumstances. Management evaluates these estimates and assumptions, and may retain outside consultants to assist in the

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evaluation. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known.

The accounting policies that involve the most significant estimates, assumptions and management judgments used in

preparation of the consolidated financial statements, or are the most sensitive to change from outside factors, are discussed in Management’s Discussion and Analysis in the Fiscal 2021 Form 10-K. There have been no material changes in VF's accounting policies from those disclosed in our Fiscal 2021 Form 10-K.


Cautionary Statement on Forward-looking Statements

From time to time, VF may make oral or written statements, including statements in this quarterly report, that constitute “forward-looking statements” within the meaning of the federal securities laws. These include statements concerning plans, objectives, projections and expectations relating to VF’s operations or economic performance and assumptions related thereto. Forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting VF and therefore involve a number of risks and uncertainties. Forward-looking statements are not guarantees, and actual results could differ materially from those expressed or implied in the forward-looking statements.

Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks arising from the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic; the level of consumer demand for apparel, footwear and accessories; disruption to VF’s distribution system; the financial strength of VF’s customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; VF’s response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; intense competition from online retailers and other direct-to-consumer business risks; manufacturing and product innovation; increasing pressure on margins; VF’s ability to implement its business strategy; VF’s ability to grow its international, direct-to-consumer and digital businesses; VF's ability to transform its model to be more consumer-minded, retail-centric and hyper-digital; retail industry changes and challenges; VF's ability to create and maintain an agile and efficient operating model and organizational structure; VF’s and its vendors’ ability to maintain the strength and security of information technology systems; the

risk that VF’s facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; VF’s ability to properly collect, use, manage and secure business, consumer and employee data and comply with privacy and security regulations; foreign currency fluctuations; stability of VF’s and VF's vendors' manufacturing facilities and VF's ability to establish and maintain effective supply chain capabilities; continued use by VF’s suppliers of ethical business practices; VF’s ability to accurately forecast demand for products; continuity of members of VF’s management; VF's ability to recruit, develop or retain qualified employees; VF’s ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; maintenance by VF’s licensees and distributors of the value of VF’s brands; VF’s ability to execute acquisitions and dispositions and integrate acquisitions, including the recently acquired Supreme® brand; business resiliency in response to natural or man-made economic, political or environmental disruptions; changes in tax laws and liabilities; legal, regulatory, political and economic risks and changes to laws and regulations; adverse or unexpected weather conditions; VF's indebtedness and its ability to obtain financing on favorable terms, if needed, could prevent VF from fulfilling its financial obligations; climate change and increased focus on sustainability issues; and risks associated with the spin-off of our Jeanswear business completed on May 22, 2019, including the risk that VF will not realize all of the expected benefits of the spin-off; the risk that the spin-off will not be tax-free for U.S. federal income tax purposes; and the risk that there will be a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of VF. More information on potential factors that could affect VF’s financial results is included from time to time in VF’s public reports filed with the Securities and Exchange Commission, including VF’s Annual Report on Form 10-K.


ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no significant changes in VF’s market risk exposures from what was disclosed in Item 7A in the Fiscal 2021 Form 10-K.


ITEM 4 — CONTROLS AND PROCEDURES.

Disclosure controls and procedures:

Under the supervision of the Chief Executive Officer and Chief Financial Officer, a Disclosure Committee comprising various members of management has evaluated the effectiveness of the disclosure controls and procedures at VF and its subsidiaries as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded as of the Evaluation Date that such controls and procedures were effective.

Changes in internal control over financial reporting:

There have been no changes during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, VF's internal control over financial reporting.

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PART II — OTHER INFORMATION


ITEM 1 — LEGAL PROCEEDINGS.

Information on VF’s legal proceedings is set forth under Part I, "Item 3. Legal Proceedings” in the Fiscal 2021 Form 10-K. There have been no material changes to the legal proceedings from those described in the Fiscal 2021 Form 10-K.

SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental regulations if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, VF uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. VF believes that this threshold is reasonably designed to result in disclosure of any such proceedings that are material to VF’s business or financial condition. Applying this threshold, there are no such proceedings to disclose for this period.


ITEM 1A — RISK FACTORS.

You should carefully consider the risk factors set forth under Part I, “Item 1A. Risk Factors” in the Fiscal 2021 Form 10-K, which could materially affect our business, financial condition and future results. The risks described in the Fiscal 2021 Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results.

There have been no material changes to the risk factors identified in Part I, “Item 1A. Risk Factors” in the Fiscal 2021 Form 10-K.


ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(c)Issuer purchases of equity securities:

The following table sets forth VF's repurchases of our Common Stock during the fiscal quarter ended January 1, 2022 under the share repurchase program authorized by VF’s Board of Directors in 2017.


Third Quarter Fiscal 2022	Total Number of Shares Purchased	Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Dollar Value of Shares that May Yet be Purchased Under the Program
October 3 - October 30, 2021	—	$	—	—	$	2,836,975,339
October 31 - November 27, 2021	1,953,030	75.44		1,953,030	2,689,638,287
November 28 - January 1, 2022	2,076,692	73.51		2,076,692	2,536,975,459
Total	4,029,722			4,029,722

VF will continue to evaluate future share repurchases available under its authorization, considering funding required for business acquisitions, VF’s Common Stock price, levels of stock option exercises and funding required for enterprise protection.

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ITEM 6 — EXHIBITS.


10.1						Five-Year Revolving Credit Agreement by and among V.F. Corporation and VF International Sagl, as borrowers, the lenders named therein, JPMorgan Chase Bank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., BofA Securities, Inc., Barclays Bank PLC, HSBC Securities (USA) Inc., U.S. Bank National Association and Wells Fargo Securities, LLC, as Joint-Lead Arrangers and Joint Bookrunners, Bank of America, N.A., Barclays Bank PLC, HSBC Bank USA, National Association, U.S. Bank National Association and Wells Fargo Bank, National Association, as Syndication Agents, and ING Bank N.V., Dublin Branch, PNC Bank, N.A., TD Bank, N.A. and Morgan Stanley Bank, N.A., as Documentation Agents, dated November 24, 2021 (Incorporated herein by reference to Exhibit 10.1 to Form 8-K filed November 24, 2021)
31.1						Certification of Steven E. Rendle, Chairman, President and Chief Executive Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certification of Matthew H. Puckett, Executive Vice President and Chief Financial Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certification of Steven E. Rendle, Chairman, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certification of Matthew H. Puckett, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

VF Corporation Q3 FY22 Form 10-Q 44

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	V.F. CORPORATION
	(Registrant)

	By:	/s/ Matthew H. Puckett
		Matthew H. Puckett
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: January 28, 2022	By:	/s/ Bryan H. McNeill
		Bryan H. McNeill
		Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)

45 VF Corporation Q3 FY22 Form 10-Q