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VF CORPORATION
Notes to Consolidated Financial Statements
December 2015
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 gains or losses on the
related assets and liabilities. 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)
Other Derivative Information
There were no significant amounts recognized in earnings for the ineffective portion of any hedging
relationships during 2015, 2014 and 2013.
At December 2015, accumulated OCI included $88.6 million of pretax net deferred gains for foreign
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.
VF entered into interest rate swap derivative contracts in 2011 and 2003 to hedge the interest rate risk for
issuance of long-term debt due in 2021 and 2033, respectively. In each case, the contracts were terminated
concurrent with the issuance of the debt, and the realized gain or loss was deferred in accumulated OCI. The
remaining pretax net deferred loss in accumulated OCI was $27.2 million at December 2015, which will be
reclassified into interest expense in the Consolidated Statements of Income over the remaining terms of the
associated debt instruments. During 2015, 2014 and 2013, VF reclassified $4.3 million, $4.1 million and $3.9
million, respectively, of net deferred loss from accumulated OCI into interest expense, and expects to reclassify
$4.5 million to interest expense during the next 12 months.
Note U — Supplemental Cash Flow Information
2015 2014 2013
In thousands
Income taxes paid, net of refunds ........................ $339,010 $370,202 $291,027
Interest paid, net of amounts capitalized ................... 83,850 82,280 80,349
Noncash transactions:
Property, plant and equipment expenditures included in
accounts payable or accrued liabilities ................. 9,445 9,529 25,586
Computer software costs included in accounts payable or
accrued liabilities ................................. 4,394 27,555 14,654
Assets acquired under capital lease ..................... — — 4,882
F-49