VF Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Retirement and Savings Benefit Plans (Tables)

Retirement and Savings Benefit Plans (Tables)

12 Months Ended

Jan. 02, 2016

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


	2015			2014			2013
	In thousands
Service cost — benefits earned during the year	$	29,223		$	24,163		$	25,445
Interest cost on projected benefit obligations		77,620			81,496			72,003
Expected return on plan assets		(111,095	)		(90,674	)		(94,585	)
Settlement charges		4,062			—			—
Amortization of deferred amounts:
Net deferred actuarial losses		61,966			37,518			85,356
Deferred prior service costs		3,038			5,445			1,270

Total pension expense	$	64,814		$	57,948		$	89,489

Weighted average actuarial assumptions used to determine pension expense:
Discount rate		3.93	%		4.64	%		3.91	%
Expected long-term return on plan assets		6.05	%		4.73	%		5.70	%
Rate of compensation increase		3.91	%		3.53	%		3.82	%

Reconciliation of Changes in Fair Value of Defined Benefit Plan Assets and Projected Benefit Obligations

The following provides a reconciliation of the changes in fair value of VF’s defined benefit plan assets and projected benefit obligations for each year, and the funded status at the end of each year:


	2015			2014
	In thousands
Fair value of plan assets, beginning of year	$	1,628,254		$	1,467,526
Actual return on plan assets		(56,624	)		189,824
VF contributions		273,520			67,808
Participant contributions		3,483			3,429
Benefits paid		(87,994	)		(88,746	)
Currency translation		(5,265	)		(11,587	)

Fair value of plan assets, end of year		1,755,374			1,628,254

Projected benefit obligations, beginning of year		1,999,947			1,688,701
Service cost		29,223			24,163
Interest cost		77,620			81,496
Participant contributions		3,483			3,429
Actuarial (gain) loss		(101,387	)		306,797
Benefits paid		(87,994	)		(88,746	)
Plan amendments		(1,510	)		263
Currency translation		(7,367	)		(16,156	)

Projected benefit obligations, end of year		1,912,015			1,999,947

Funded status, end of year	$	(156,641	)	$	(371,693	)

Pension benefits are reported in the balance sheet as a net asset or liability based on the overfunded or underfunded status of the defined benefit plans, assessed on a plan-by-plan basis.


	2015			2014
	In thousands
Amounts included in Consolidated Balance Sheets:
Noncurrent assets (Note G)	$	9,273		$	1,491
Current liabilities (Note I)		(8,480	)		(8,880	)
Noncurrent liabilities (Note K)		(157,434	)		(364,304	)

Funded status	$	(156,641	)	$	(371,693	)

Accumulated other comprehensive (income) loss, pretax:
Net deferred actuarial losses	$	586,828		$	588,847
Deferred prior service costs		17,459			21,950

Total accumulated other comprehensive (income) loss, pretax	$	604,287		$	610,797


Accumulated benefit obligations	$	1,827,521		$	1,916,070

Weighted average actuarial assumptions used to determine pension obligations:
Discount rate		4.29	%		3.47	%
Rate of compensation increase		3.90	%		3.34	%

Fair Value of Investments Held by Pension Plan

The fair value of investments held by VF’s defined benefit plans at December 2015 and 2014, by asset class, is summarized below. See Note S for a description of the three levels of the fair value measurement hierarchy.


	Total Plan Assets			Fair Value Measurements
	Total Plan Assets			Level 1			Level 2		Level 3
	In thousands
December 2015
Plan assets
Cash equivalents	$	2,790		$	2,790		$	—	$	—
Fixed income securities:
U.S. Treasury and government agencies		11			—			11		—
Insurance contracts		50,856			—			50,856		—
Commodities		(439	)		(439	)		—		—

Total plan assets in the fair value hierarchy		53,218		$	2,351		$	50,867	$	—

Plan assets measured at net asset value ^(a)
Cash equivalents		23,538
Equity securities:
Domestic		107,190
International		179,256
Fixed income securities:
Corporate and international bonds		1,232,691
Alternative investments		159,481

Total plan assets measured at net asset value		1,702,156


Total plan assets	$	1,755,374


	Total Plan Assets			Fair Value Measurements
	Total Plan Assets			Level 1			Level 2		Level 3
	In thousands
December 2014
Plan assets
Cash equivalents	$	3,220		$	3,220		$	—	$	—
Fixed income securities:
U.S. Treasury and government agencies		16			—			16		—
Insurance contracts		46,059			—			46,059		—
Commodities		(1,393	)		(1,393	)		—		—

Total plan assets in the fair value hierarchy		47,902		$	1,827		$	46,075	$	—

Plan assets measured at net asset value ^(a)
Cash equivalents		61,788
Equity securities:
Domestic		180,258
International		219,259
Fixed income securities:
Corporate and international bonds		986,125
Alternative investments		132,922

Total plan assets measured at net asset value		1,580,352


Total plan assets	$	1,628,254

^(a)	As discussed in Note A, investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have been removed from the total plan assets in the fair value hierarchy.