| Capital and Accumulated Other Comprehensive Loss |
Capital and Accumulated Other Comprehensive Loss
During the first nine months of 2017, the Company purchased 22.2 million shares of Common Stock in open market transactions for $1.2 billion under its share repurchase program authorized by VF’s Board of Directors. These transactions were treated as treasury stock transactions.
Common Stock outstanding is net of shares held in treasury which are, in substance, retired. During the first nine months of 2017, VF restored 22.3 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 September 2017 or December 2016, and 2,600 shares held in treasury at the end of September 2016. 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.
VF Common Stock is also held by the Company’s deferred compensation plans and is treated as treasury shares for financial reporting purposes. During the first nine months of 2017, the Company purchased 6,540 shares of Common Stock in open market transactions for $0.4 million. Balances related to shares held for deferred compensation plans were as follows:
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|
|
|
|
|
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|
In thousands, except share amounts |
September 2017 |
|
December 2016 |
|
September 2016 |
Shares held for deferred compensation plans |
320,615 |
|
|
439,667 |
|
|
450,067 |
|
Cost of shares held for deferred compensation plans |
$ |
3,973 |
|
|
$ |
5,464 |
|
|
$ |
5,434 |
|
Accumulated Other Comprehensive Loss
Comprehensive income consists of net income and specified components of other comprehensive income (“OCI”), which relates 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:
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|
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|
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In thousands |
September 2017 |
|
December 2016 |
|
September 2016 |
Foreign currency translation and other |
$ |
(567,964 |
) |
|
$ |
(794,579 |
) |
|
$ |
(670,551 |
) |
Defined benefit pension plans |
(268,159 |
) |
|
(302,697 |
) |
|
(340,891 |
) |
Derivative financial instruments |
(78,773 |
) |
|
55,813 |
|
|
13,422 |
|
Accumulated other comprehensive loss |
$ |
(914,896 |
) |
|
$ |
(1,041,463 |
) |
|
$ |
(998,020 |
) |
The changes in accumulated OCI, net of related taxes, are as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 2017 |
In thousands |
Foreign Currency Translation and Other |
|
Defined Benefit Pension Plans |
|
Derivative Financial Instruments |
|
Total |
Balance, June 2017 |
$ |
(633,209 |
) |
|
$ |
(275,089 |
) |
|
$ |
(22,299 |
) |
|
$ |
(930,597 |
) |
Other comprehensive income (loss) before reclassifications |
65,245 |
|
|
— |
|
|
(51,826 |
) |
|
13,419 |
|
Amounts reclassified from accumulated other comprehensive income (loss) |
— |
|
|
6,930 |
|
|
(4,648 |
) |
|
2,282 |
|
Net other comprehensive income (loss) |
65,245 |
|
|
6,930 |
|
|
(56,474 |
) |
|
15,701 |
|
Balance, September 2017 |
$ |
(567,964 |
) |
|
$ |
(268,159 |
) |
|
$ |
(78,773 |
) |
|
$ |
(914,896 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 2016 |
In thousands |
Foreign Currency Translation and Other |
|
Defined Benefit Pension Plans |
|
Derivative Financial Instruments |
|
Total |
Balance, June 2016 |
$ |
(675,213 |
) |
|
$ |
(351,298 |
) |
|
$ |
25,056 |
|
|
$ |
(1,001,455 |
) |
Other comprehensive income (loss) before reclassifications |
4,662 |
|
|
— |
|
|
5,896 |
|
|
10,558 |
|
Amounts reclassified from accumulated other comprehensive income (loss) |
— |
|
|
10,407 |
|
|
(17,530 |
) |
|
(7,123 |
) |
Net other comprehensive income (loss) |
4,662 |
|
|
10,407 |
|
|
(11,634 |
) |
|
3,435 |
|
Balance, September 2016 |
$ |
(670,551 |
) |
|
$ |
(340,891 |
) |
|
$ |
13,422 |
|
|
$ |
(998,020 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 2017 |
In thousands |
Foreign Currency Translation and Other |
|
Defined Benefit Pension Plans |
|
Derivative Financial Instruments |
|
Total |
Balance, December 2016 |
$ |
(794,579 |
) |
|
$ |
(302,697 |
) |
|
$ |
55,813 |
|
|
$ |
(1,041,463 |
) |
Other comprehensive income (loss) before reclassifications |
226,615 |
|
|
12,253 |
|
|
(107,836 |
) |
|
131,032 |
|
Amounts reclassified from accumulated other comprehensive income (loss) |
— |
|
|
22,285 |
|
|
(26,750 |
) |
|
(4,465 |
) |
Net other comprehensive income (loss) |
226,615 |
|
|
34,538 |
|
|
(134,586 |
) |
|
126,567 |
|
Balance, September 2017 |
$ |
(567,964 |
) |
|
$ |
(268,159 |
) |
|
$ |
(78,773 |
) |
|
$ |
(914,896 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 2016 |
In thousands |
Foreign Currency Translation and Other |
|
Defined Benefit Pension Plans |
|
Derivative Financial Instruments |
|
Total |
Balance, December 2015 |
$ |
(718,169 |
) |
|
$ |
(372,195 |
) |
|
$ |
47,142 |
|
|
$ |
(1,043,222 |
) |
Other comprehensive income (loss) before reclassifications |
47,618 |
|
|
— |
|
|
20,331 |
|
|
67,949 |
|
Amounts reclassified from accumulated other comprehensive income (loss) |
— |
|
|
31,304 |
|
|
(54,051 |
) |
|
(22,747 |
) |
Net other comprehensive income (loss) |
47,618 |
|
|
31,304 |
|
|
(33,720 |
) |
|
45,202 |
|
Balance, September 2016 |
$ |
(670,551 |
) |
|
$ |
(340,891 |
) |
|
$ |
13,422 |
|
|
$ |
(998,020 |
) |
Reclassifications out of accumulated OCI are as follows:
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In thousands |
|
Affected Line Item in the Consolidated Statements of Income |
|
Three Months Ended September |
|
Nine Months Ended September |
Details About Accumulated Other Comprehensive Income (Loss) Components |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Amortization of defined benefit pension plans: |
|
|
|
|
|
|
|
|
Net deferred actuarial losses |
|
(a) |
|
$ |
(10,030 |
) |
|
$ |
(16,303 |
) |
|
$ |
(31,414 |
) |
|
$ |
(48,928 |
) |
Deferred prior service costs |
|
(a) |
|
(643 |
) |
|
(645 |
) |
|
(2,000 |
) |
|
(1,937 |
) |
Pension curtailment loss |
|
Income (loss) from discontinued operations, net of tax |
|
— |
|
|
— |
|
|
(1,105 |
) |
|
— |
|
|
|
Total before tax |
|
(10,673 |
) |
|
(16,948 |
) |
|
(34,519 |
) |
|
(50,865 |
) |
|
|
Tax benefit |
|
3,743 |
|
|
6,541 |
|
|
12,234 |
|
|
19,561 |
|
|
|
Net of tax |
|
(6,930 |
) |
|
(10,407 |
) |
|
(22,285 |
) |
|
(31,304 |
) |
Gains (losses) on derivative financial instruments: |
|
|
|
|
|
|
|
|
Foreign exchange contracts |
|
Net sales |
|
11,614 |
|
|
14,676 |
|
|
25,074 |
|
|
11,997 |
|
Foreign exchange contracts |
|
Cost of goods sold |
|
(4,164 |
) |
|
15,485 |
|
|
12,763 |
|
|
80,094 |
|
Foreign exchange contracts |
|
Selling, general and administrative expenses |
|
(882 |
) |
|
(1,098 |
) |
|
(1,212 |
) |
|
(3,611 |
) |
Foreign exchange contracts |
|
Other income (expense), net |
|
(774 |
) |
|
526 |
|
|
(688 |
) |
|
2,653 |
|
Interest rate contracts |
|
Interest expense |
|
(1,185 |
) |
|
(1,131 |
) |
|
(3,518 |
) |
|
(3,356 |
) |
|
|
Total before tax |
|
4,609 |
|
|
28,458 |
|
|
32,419 |
|
|
87,777 |
|
|
|
Tax benefit (expense) |
|
39 |
|
|
(10,928 |
) |
|
(5,669 |
) |
|
(33,726 |
) |
|
|
Net of tax |
|
4,648 |
|
|
17,530 |
|
|
26,750 |
|
|
54,051 |
|
Total reclassifications for the period |
|
Net of tax |
|
$ |
(2,282 |
) |
|
$ |
7,123 |
|
|
$ |
4,465 |
|
|
$ |
22,747 |
|
|
|
(a) |
These accumulated OCI components are included in the computation of net periodic pension cost (refer to Note H for additional details). |
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