Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v2.4.0.6
Fair Value Measurements
 3 Months Ended
Mar. 30, 2013
Fair Value Measurements

Note N — 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. 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
FairValue

      Fair Value Measurement Using (a)  
In thousands       Level 1      Level 2      Level 3  

March 2013

            

Financial assets:

            

Cash equivalents:

            

Money market funds

    $ 39,526       $ 39,526       $ —         $ —     

Time deposits

      27,007         27,007         —           —     

Derivative instruments

      48,817         —           48,817         —     

Investment securities

      207,464         179,163         28,301         —     

Other marketable securities

      4,915         4,915         —           —     

Financial liabilities:

            

Derivative instruments

      9,875         —           9,875         —     

Deferred compensation

      252,530         —           252,530         —     

December 2012

            

Financial assets:

            

Cash equivalents:

            

Money market funds

    $ 181,635       $ 181,635       $ —        $ —     

Time deposits

      17,042         17,042         —          —     

Derivative instruments

      16,153         —           16,153         —     

Investment securities

      188,307         157,230         31,077         —     

Other marketable securities

      4,513         4,513         —          —     

Financial liabilities:

            

Derivative instruments

      29,468         —           29,468         —     

Deferred compensation

      230,733         —           230,733         —     

 

(a) 

There were no transfers among the levels within the fair value hierarchy during the first quarter of 2013 or the year ended December 2012.

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 March 2013 and December 2012, their carrying values approximated their fair values. Additionally, at March 2013 and December 2012, the carrying value of VF’s long–term debt, including the current portion, was $1,831.4 million and $1,832.0 million, respectively, compared with a fair value of $2,051.7 million and $2,111.4 million at those dates. Fair value for long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.