Annual report pursuant to Section 13 and 15(d)

Derivative Financial Instruments and Hedging Activities (Tables)

v3.3.1.900
Derivative Financial Instruments and Hedging Activities (Tables)
 12 Months Ended
Jan. 02, 2016
Outstanding Derivatives on Individual Contract Basis

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		  
     December
2015		      December
2014		      December
2015		      December
2014		  
     In thousands  

Foreign currency exchange contracts designated as hedging instruments

    $ 105,536       $ 104,860       $ (27,896 )     $ (31,711 ) 

Foreign currency exchange contracts not designated as hedging instruments

      255         404         (136 )       (58 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total derivatives

    $ 105,791       $ 105,264       $ (28,032 )     $ (31,769 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  
Derivative Assets and Liabilities Presented in Consolidated Balance Sheet Adjusted from Current Gross

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. However, if VF were to offset and record the asset and liability balances of its forward foreign currency exchange contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets as of December 2015 and December 2014 would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

 

     December 2015      December 2014  
     Derivative
Asset		      Derivative
Liability		      Derivative
Asset		      Derivative
Liability		  
     In thousands  

Gross amounts presented in the Consolidated Balance Sheets

    $ 105,791       $ (28,032 )     $ 105,264       $ (31,769 ) 

Gross amounts not offset in the Consolidated Balance Sheets

      (22,213 )       22,213         (30,724 )       30,724   
  

 

 

     

 

 

     

 

 

     

 

 

  

Net amounts

    $ 83,578       $ (5,819 )     $ 74,540       $ (1,045 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  
Derivative Assets and Liabilities Presented in Consolidated Balance Sheet Adjusted from Current Gross

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. However, if VF were to offset and record the asset and liability balances of its forward foreign currency exchange contracts on a net basis in accordance with the terms of its master netting agreements, the amounts presented in the Consolidated Balance Sheets as of December 2015 and December 2014 would be adjusted from the current gross presentation to the net amounts as detailed in the following table:

 

     December 2015      December 2014  
     Derivative
Asset		      Derivative
Liability		      Derivative
Asset		      Derivative
Liability		  
     In thousands  

Gross amounts presented in the Consolidated Balance Sheets

    $ 105,791       $ (28,032 )     $ 105,264       $ (31,769 ) 

Gross amounts not offset in the Consolidated Balance Sheets

      (22,213 )       22,213         (30,724 )       30,724   
  

 

 

     

 

 

     

 

 

     

 

 

  

Net amounts

    $ 83,578       $ (5,819 )     $ 74,540       $ (1,045 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  
Derivatives Classified as Current or Noncurrent Based on Maturity Dates

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

 

      December
2015		      December
2014		  
     In thousands  

Other current assets

    $ 92,796       $ 84,995   

Accrued liabilities (Note I)

      (25,776 )       (26,968 ) 

Other assets (Note G)

      12,995         20,269   

Other liabilities (Note K)

      (2,256 )       (4,801 ) 
Effects of Cash Flow Hedging included in Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

The effects of cash flow hedging included in VF’s Consolidated Statements of Income and Consolidated Statements of Comprehensive Income are summarized as follows:

 

Cash Flow Hedging Relationships

    Gain (Loss) on Derivatives
Recognized in OCI		  
   2015      2014      2013  
     In thousands  

Foreign currency exchange

    $ 89,993       $ 88,387       $ (8,133 ) 

 

      Gain (Loss) Reclassified
from Accumulated OCI into Income		  

Location of Gain (Loss)

    2015      2014      2013  
     In thousands  

Net sales

    $ (68,543 )     $ (18,071 )     $ 12,917   

Cost of goods sold

      132,432         (8,756 )       4,208   

Selling, general and administrative expenses

      (1,885 )       —         —   

Other income (expense), net

      7,267         (1,189 )       (1,051 ) 

Interest expense

      (4,295 )       (4,095 )       (3,905 ) 
  

 

 

     

 

 

     

 

 

  

Total

    $ 64,976       $ (32,111 )     $ 12,169   
  

 

 

     

 

 

     

 

 

  
Effects of Fair Value Hedging Included in Consolidated Statements of Income

Following is a summary of these derivatives included in VF’s Consolidated Statements of Income:

 

Derivatives Not
Designated
as Hedges

   

Location of Gain (Loss) on
Derivatives
Recognized in Income

    Gain (Loss) on Derivatives
Recognized in Income		  
      2015      2014      2013  
          In thousands  

Foreign currency exchange

    Cost of goods sold    $ (4,179 )     $  —       $  —   

Foreign currency exchange

    Other income (expense), net      2,806         (707 )       (2,664 ) 
     

 

 

     

 

 

     

 

 

  

Total

       $ (1,373 )     $ (707 )     $ (2,664 )