UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 26, 2020~~October 2, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 1-5256

V. F. CORPORATION

(Exact name of registrant as specified in its charter)


Pennsylvania						23-1180120
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification number)

1551 Wewatta Street

Denver, Colorado 80202

(Address of principal executive offices)

(720) 778-4000

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
(Title of each class)	(Trading Symbol(s))	(Name of each exchange on which registered)
Common Stock, without par value, stated capital, $0.25 per share	VFC	New York Stock Exchange
0.625% Senior Notes due 2023	VFC23	New York Stock Exchange
0.250% Senior Notes due 2028	VFC28	New York Stock Exchange
0.625% Senior Notes due 2032	VFC32	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

On October ~~24, 2020,~~30, 2021, there were ~~390,004,212~~392,782,274 shares of the registrant’s common stock outstanding.

VF CORPORATION

Table of Contents


			PAGE NUMBER
Part I — Financial Information			3
Item 1 — Financial Statements (Unaudited)			3
Consolidated Balance Sheets: ~~Consolidated Balance Sheets:~~ September ~~2020,~~ 2021, March ~~2020~~2021 and September ~~2019~~ 2020			3
Consolidated Statements of Operations: Three and six months ended September ~~2020~~ 2021 and September ~~2019~~ 2020			4
Consolidated Statements of Comprehensive Income (Loss): Three and six months ended September 2021 andSeptember 2020 ~~and September 2019~~			5
Consolidated Statements of Cash Flows: Six months ended Se ptember 2021 and September 2020 ~~and September 2019~~			6
Consolidated Statements of Stockholders’ Equity: Three and six months ended September ~~2020~~ 2021 and September ~~2019~~ 2020			8
Notes to Consolidated Financial Statements			10
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			2728
Item 3 — Quantitative and Qualitative Disclosures about Market Risk			3941
Item 4 — Controls and Procedures			3941
Part II — Other Information			4042
Item 1 — Legal Proceedings			4042
Item 1A — Risk Factors			4042
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds			4142
Item 6 — Exhibits			42
Signatures			43

Table of Contents

PART I — FINANCIAL INFORMATION


ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED).

VF CORPORATION

Consolidated Balance Sheets

(Unaudited)

(In thousands, except share amounts) September 2020 March 2020 September 2019
ASSETS
Current assets
Cash and equivalents $ 1,877,398 $ 1,369,028 $ 469,912
Accounts receivable, less allowance for doubtful accounts of: September 2020 - $36,121; March 2020 - $37,099; September 2019 - $19,930 1,606,479 1,308,051 1,881,374
Inventories 1,434,843 1,293,912 1,590,027
Short-term investments 800,000 0 0
Other current assets 408,809 444,886 391,678
Current assets of discontinued operations 552,677 611,139 442,216
Total current assets 6,680,206 5,027,016 4,775,207
Property, plant and equipment, net 933,990 954,406 832,237
Intangible assets, net 1,851,093 1,854,545 1,857,868
Goodwill 1,173,514 1,156,019 1,479,755
Operating lease right-of-use assets 1,385,121 1,273,514 1,231,638
Other assets 917,342 867,751 905,993
Other assets of discontinued operations 0 0 187,657
TOTAL ASSETS $ 12,941,266 $ 11,133,251 $ 11,270,355
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings $ 13,237 $ 1,228,812 $ 484,321
Current portion of long-term debt 1,127 1,018 4,986
Accounts payable 450,109 407,021 483,207
Accrued liabilities 1,505,703 1,260,252 1,331,495
Current liabilities of discontinued operations 114,356 126,781 100,329
Total current liabilities 2,084,532 3,023,884 2,404,338
Long-term debt 5,679,440 2,608,269 2,090,922
Operating lease liabilities 1,129,840 1,020,651 997,456
Other liabilities 1,102,216 1,123,113 1,106,791
Other liabilities of discontinued operations 0 0 23,229
Total liabilities 9,996,028 7,775,917 6,622,736
Commitments and contingencies
Stockholders’ equity
Preferred Stock, par value $1; shares authorized, 25,000,000; 0 shares outstanding at September 2020, March 2020 or September 2019 0 0 0
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at September 2020 - 389,964,718; March 2020 - 388,812,158; September 2019 - 398,865,790 97,491 97,203 99,716
Additional paid-in capital 3,852,358 4,183,780 4,072,640
Accumulated other comprehensive income (loss) (959,658) (930,958) (930,725)
Retained earnings (accumulated deficit) (44,953) 7,309 1,405,988
Total stockholders’ equity 2,945,238 3,357,334 4,647,619
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,941,266 $ 11,133,251 $ 11,270,355


(In thousands, except share amounts)	September 2021		March 2021		September 2020
ASSETS
Current assets
Cash and equivalents	$	1,360,138	$	815,750	$	1,877,398
Accounts receivable, less allowance for doubtful accounts of: September 2021 - $33,822; March 2021 - $33,654; September 2020 - $36,121	1,787,331		1,298,020		1,606,479
Inventories	1,464,714		1,061,839		1,434,843
Short-term investments	—		598,806		800,000
Other current assets	357,687		423,877		408,809

Current assets of discontinued operations	—		587,578		552,677
Total current assets	4,969,870		4,785,870		6,680,206
Property, plant and equipment, net	1,011,415		975,876		933,990
Intangible assets, net	3,018,242		3,029,545		1,851,093
Goodwill	2,415,767		2,425,427		1,173,514
Operating lease right-of-use assets	1,380,106		1,474,434		1,385,121
Other assets	1,093,687		1,062,877		917,342

TOTAL ASSETS	$	13,889,087	$	13,754,029	$	12,941,266
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	10,173	$	11,061	$	13,237
Current portion of long-term debt	1,001,037		1,023		1,127
Accounts payable	534,365		463,208		450,109
Accrued liabilities	1,838,790		1,609,928		1,505,703

Current liabilities of discontinued operations	—		125,257		114,356
Total current liabilities	3,384,365		2,210,477		2,084,532
Long-term debt	4,682,751		5,709,149		5,679,440
Operating lease liabilities	1,146,944		1,236,461		1,129,840
Other liabilities	1,076,546		1,541,778		1,102,216

Total liabilities	10,290,606		10,697,865		9,996,028
Commitments and contingencies	0		0		0
Stockholders’ equity
Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding at September 2021, March 2021 or September 2020	—		—		—
Common Stock, stated value $0.25; shares authorized, 1,200,000,000; shares outstanding at September 2021 - 392,758,016; March 2021 - 391,941,477; September 2020 - 389,964,718	98,190		97,985		97,491
Additional paid-in capital	3,854,687		3,777,645		3,852,358
Accumulated other comprehensive income (loss)	(940,834)		(1,009,000)		(959,658)
Retained earnings (accumulated deficit)	586,438		189,534		(44,953)
Total stockholders’ equity	3,598,481		3,056,164		2,945,238
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	13,889,087	$	13,754,029	$	12,941,266

See notes to consolidated financial statements.

3 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

Table of Contents

VF CORPORATION

Consolidated Statements of Operations

(Unaudited)


		Three Months Ended September				Six Months Ended September					Three Months Ended September				Six Months Ended September

(In thousands, except per share amounts)	(In thousands, except per share amounts)	2020		2019		2020		2019		(In thousands, except per share amounts)	2021		2020		2021		2020
Net revenues	Net revenues	$	2,608,324	$	3,179,758	$	3,684,617	$	5,230,412	Net revenues	$	3,198,235	$	2,608,324	$	5,392,792	$	3,684,617
Costs and operating expenses	Costs and operating expenses									Costs and operating expenses
Cost of goods sold	Cost of goods sold	1,282,406		1,456,317		1,789,357		2,352,601		Cost of goods sold	1,479,446		1,282,406		2,434,997		1,789,357
Selling, general and administrative expenses	Selling, general and administrative expenses	1,005,970		1,174,879		1,822,121		2,233,284		Selling, general and administrative expenses	1,160,303		1,005,970		2,196,425		1,822,121

Total costs and operating expenses	Total costs and operating expenses	2,288,376		2,631,196		3,611,478		4,585,885		Total costs and operating expenses	2,639,749		2,288,376		4,631,422		3,611,478
Operating income	Operating income	319,948		548,562		73,139		644,527		Operating income	558,486		319,948		761,370		73,139
Interest income	Interest income	3,176		4,424		4,489		10,968		Interest income	1,518		3,176		3,660		4,489
Interest expense	Interest expense	(34,107)		(20,810)		(63,369)		(42,937)		Interest expense	(35,888)		(34,107)		(70,805)		(63,369)
Other income (expense), net	Other income (expense), net	4,644		(1,771)		(33,543)		3,783		Other income (expense), net	7,549		4,644		16,590		(33,543)
Income (loss) from continuing operations before income taxes	Income (loss) from continuing operations before income taxes	293,661		530,405		(19,284)		616,341		Income (loss) from continuing operations before income taxes	531,665		293,661		710,815		(19,284)
Income tax expense (benefit)		50,415		(94,972)		15,212		(74,309)
Income tax expense										Income tax expense	67,612		50,415		92,790		15,212
Income (loss) from continuing operations	Income (loss) from continuing operations	243,246		625,377		(34,496)		690,650		Income (loss) from continuing operations	464,053		243,246		618,025		(34,496)
Income from discontinued operations, net of tax	Income from discontinued operations, net of tax	13,476		23,624		5,605		7,572		Income from discontinued operations, net of tax	—		13,476		170,273		5,605
Net income (loss)	Net income (loss)	$	256,722	$	649,001	$	(28,891)	$	698,222	Net income (loss)	$	464,053	$	256,722	$	788,298	$	(28,891)
Earnings (loss) per common share - basic	Earnings (loss) per common share - basic									Earnings (loss) per common share - basic
Continuing operations	Continuing operations	$	0.62	$	1.57	$	(0.09)	$	1.74	Continuing operations	$	1.18	$	0.62	$	1.58	$	(0.09)
Discontinued operations	Discontinued operations	0.03		0.06		0.01		0.02		Discontinued operations	—		0.03		0.43		0.01
Total earnings (loss) per common share - basic	Total earnings (loss) per common share - basic	$	0.66	$	1.63	$	(0.07)	$	1.76	Total earnings (loss) per common share - basic	$	1.18	$	0.66	$	2.01	$	(0.07)
Earnings (loss) per common share - diluted	Earnings (loss) per common share - diluted									Earnings (loss) per common share - diluted
Continuing operations	Continuing operations	$	0.62	$	1.55	$	(0.09)	$	1.72	Continuing operations	$	1.18	$	0.62	$	1.57	$	(0.09)
Discontinued operations	Discontinued operations	0.03		0.06		0.01		0.02		Discontinued operations	—		0.03		0.43		0.01
Total earnings (loss) per common share - diluted	Total earnings (loss) per common share - diluted	$	0.66	$	1.61	$	(0.07)	$	1.74	Total earnings (loss) per common share - diluted	$	1.18	$	0.66	$	2.00	$	(0.07)
Weighted average shares outstanding	Weighted average shares outstanding									Weighted average shares outstanding
Basic	Basic	389,219		397,751		388,957		397,239		Basic	391,779		389,219		391,565		388,957
Diluted	Diluted	391,180		402,261		390,986		402,088		Diluted	394,017		391,180		394,072		390,986

See notes to consolidated financial statements.

VF Corporation Q2 ~~FY21~~FY22 Form 10-Q 4

Table of Contents

VF CORPORATION

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


		Three Months Ended September				Six Months Ended September				Three Months Ended September				Six Months Ended September

(In thousands)	(In thousands)	2020		2019		2020		2019			(In thousands)	2021		2020		2021		2020
Net income (loss)	Net income (loss)	$	256,722	$	649,001	$	(28,891)	$	698,222		Net income (loss)	$	464,053	$	256,722	$	788,298	$	(28,891)
Other comprehensive income (loss)	Other comprehensive income (loss)										Other comprehensive income (loss)
Foreign currency translation and other	Foreign currency translation and other										Foreign currency translation and other
Losses arising during the period		(33,483)		(70,473)		(29,629)		(57,644)
Gains (losses) arising during the period											Gains (losses) arising during the period	(12,314)		(33,483)		20,857		(29,629)
Reclassification of foreign currency translation losses	Reclassification of foreign currency translation losses	0		0		42,364		0			Reclassification of foreign currency translation losses	—		—		—		42,364
Income tax effect	Income tax effect	18,582		(8,912)		24,837		(5,969)			Income tax effect	(11,686)		18,582		(7,804)		24,837
Defined benefit pension plans	Defined benefit pension plans										Defined benefit pension plans
Current period actuarial losses	Current period actuarial losses	(8,853)		(14,610)		(8,853)		(14,610)			Current period actuarial losses	(439)		(8,853)		(4,452)		(8,853)
Amortization of net deferred actuarial losses	Amortization of net deferred actuarial losses	2,898		4,014		5,761		8,033			Amortization of net deferred actuarial losses	2,871		2,898		5,711		5,761
Amortization of deferred prior service costs (credits)		(17)		12		(34)		25
Amortization of deferred prior service credits											Amortization of deferred prior service credits	(117)		(17)		(235)		(34)
Reclassification of net actuarial loss from settlement charge	Reclassification of net actuarial loss from settlement charge	572		519		572		519			Reclassification of net actuarial loss from settlement charge	76		572		1,024		572

Income tax effect	Income tax effect	386		2,207		722		499			Income tax effect	(595)		386		64		722
Derivative financial instruments	Derivative financial instruments										Derivative financial instruments
Gains (losses) arising during the period	Gains (losses) arising during the period	(39,731)		51,396		(47,326)		66,170			Gains (losses) arising during the period	34,361		(39,731)		29,798		(47,326)
Income tax effect	Income tax effect	7,197		(7,048)		8,727		(10,922)			Income tax effect	(5,978)		7,197		(5,786)		8,727
Reclassification of net gains realized		(11,379)		(23,688)		(31,659)		(34,183)
Reclassification of net (gains) losses realized											Reclassification of net (gains) losses realized	22,986		(11,379)		33,545		(31,659)
Income tax effect	Income tax effect	1,711		3,244		5,818		6,000			Income tax effect	(4,113)		1,711		(4,556)		5,818
Other comprehensive income (loss)	Other comprehensive income (loss)	(62,117)		(63,339)		(28,700)		(42,082)			Other comprehensive income (loss)	25,052		(62,117)		68,166		(28,700)
Comprehensive income (loss)	Comprehensive income (loss)	$	194,605	$	585,662	$	(57,591)	$	656,140		Comprehensive income (loss)	$	489,105	$	194,605	$	856,464	$	(57,591)

See notes to consolidated financial statements.

5 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

Table of Contents

VF CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

Six Months Ended September
(In thousands) 2020 2019
OPERATING ACTIVITIES
Net income (loss) $ (28,891) $ 698,222
Income from discontinued operations, net of tax 5,605 7,572
Income (loss) from continuing operations, net of tax (34,496) 690,650
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:
Depreciation and amortization 138,853 125,159
Reduction in the carrying amount of right-of-use assets 205,635 186,327
Stock-based compensation 26,113 70,146
Provision for doubtful accounts 15,727 5,767
Pension expense less than contributions (7,953) (6,125)
Other, net 15,852 (99,823)
Changes in operating assets and liabilities:
Accounts receivable (275,436) (542,150)
Inventories (115,515) (433,360)
Accounts payable 36,019 (169)
Income taxes (40,770) (47,964)
Accrued liabilities 161,785 (123,369)
Operating lease right-of-use assets and liabilities (150,170) (224,750)
Other assets and liabilities 63,866 26,915
Cash provided (used) by operating activities - continuing operations 39,510 (372,746)
Cash provided by operating activities - discontinued operations 43,298 7,268
Cash provided (used) by operating activities 82,808 (365,478)
INVESTING ACTIVITIES
Purchases of short-term investments (800,000) 0
Capital expenditures (112,501) (104,988)
Software purchases (38,345) (24,712)
Other, net (3,839) 59,558
Cash used by investing activities - continuing operations (954,685) (70,142)
Cash used by investing activities - discontinued operations (2,693) (7,270)
Cash used by investing activities (957,378) (77,412)
FINANCING ACTIVITIES
Net decrease in short-term borrowings (1,215,575) (168,421)
Payments on long-term debt (768) (2,868)
Payment of debt issuance costs (21,430) 0
Proceeds from long-term debt 2,996,090 0
Cash dividends paid (373,638) (373,604)
Cash received from Kontoor Brands, net of cash transferred of $126.8 million 0 906,148
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings (7,221) 50,659
Cash provided by financing activities 1,377,458 411,914
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash (8,082) (5,385)
Net change in cash, cash equivalents and restricted cash 494,806 (36,361)
Cash, cash equivalents and restricted cash – beginning of year 1,411,322 556,587
Cash, cash equivalents and restricted cash – end of period $ 1,906,128 $ 520,226


	Six Months Ended September

(In thousands)	2021		2020
OPERATING ACTIVITIES
Net income (loss)	$	788,298	$	(28,891)
Income from discontinued operations, net of tax	170,273		5,605
Income (loss) from continuing operations, net of tax	618,025		(34,496)
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities:

Depreciation and amortization	134,553		138,853
Reduction in the carrying amount of right-of-use assets	208,687		205,635
Stock-based compensation	44,283		26,113
Provision for doubtful accounts	3,345		15,727
Pension expense less than contributions	(12,312)		(7,953)


Other, net	(191,547)		15,852
Changes in operating assets and liabilities:
Accounts receivable	(502,675)		(275,436)
Inventories	(412,058)		(115,515)
Accounts payable	72,757		36,019
Income taxes	112,331		(40,770)
Accrued liabilities	233,369		161,785
Operating lease right-of-use assets and liabilities	(228,969)		(150,170)
Other assets and liabilities	(257,016)		63,866
Cash provided (used) by operating activities - continuing operations	(177,227)		39,510
Cash provided by operating activities - discontinued operations	6,090		43,298
Cash provided (used) by operating activities	(171,137)		82,808
INVESTING ACTIVITIES
Business acquisitions, net of cash received	3,760		—
Proceeds from sale of businesses, net of cash sold	616,529		—
Purchases of short-term investments	—		(800,000)
Proceeds from sale of short-term investments	598,806		—
Capital expenditures	(144,582)		(112,501)
Software purchases	(42,119)		(38,345)
Other, net	20,491		(3,839)
Cash provided (used) by investing activities - continuing operations	1,052,885		(954,685)
Cash used by investing activities - discontinued operations	(525)		(2,693)
Cash provided (used) by investing activities	1,052,360		(957,378)
FINANCING ACTIVITIES
Net decrease in short-term borrowings	(889)		(1,215,575)
Payments on long-term debt	(508)		(768)
Payment of debt issuance costs	—		(21,430)
Proceeds from long-term debt	—		2,996,090

Cash dividends paid	(384,427)		(373,638)

Proceeds from issuance of Common Stock, net of (payments) for tax withholdings	25,971		(7,221)

Cash provided (used) by financing activities	(359,853)		1,377,458
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	(10,958)		(8,082)
Net change in cash, cash equivalents and restricted cash	510,412		494,806
Cash, cash equivalents and restricted cash – beginning of year	851,205		1,411,322
Cash, cash equivalents and restricted cash – end of period	$	1,361,617	$	1,906,128

Continued on next page.

See notes to consolidated financial statements.

VF Corporation Q2 ~~FY21~~FY22 Form 10-Q 6

Table of Contents

VF CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)


		Six Months Ended September					Six Months Ended September

(In thousands)	(In thousands)	2020		2019		(In thousands)	2021		2020
Balances per Consolidated Balance Sheets:	Balances per Consolidated Balance Sheets:					Balances per Consolidated Balance Sheets:
Cash and cash equivalents	Cash and cash equivalents	$	1,877,398	$	469,912	Cash and cash equivalents	$	1,360,138	$	1,877,398
Other current assets	Other current assets	1,301		2,748		Other current assets	1,421		1,301

Current assets of discontinued operations	Current assets of discontinued operations	26,846		37,693		Current assets of discontinued operations	—		26,846
Other assets	Other assets	583		9,873		Other assets	58		583
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	1,906,128	$	520,226	Total cash, cash equivalents and restricted cash	$	1,361,617	$	1,906,128

See notes to consolidated financial statements.

7 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

Table of Contents

VF CORPORATION

Consolidated Statements of Stockholders’ Equity

(Unaudited)


																							Three Months Ended September 2021
																													Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
																							Common Stock
(In thousands, except share amounts)																						(In thousands, except share amounts)	Shares			Amounts									Total
Balance, June 2021																						Balance, June 2021	392,621,561			$	98,155				$	3,824,656						$	(965,886)			$	317,105			$	3,274,030

Net income (loss)																						Net income (loss)	—			—					—					—				464,053				464,053
Dividends on Common Stock ($0.49 per share)																						Dividends on Common Stock ($0.49 per share)	—			—			—				—			(192,296)				(192,296)

Stock-based compensation, net																						Stock-based compensation, net	136,455			35			30,031				—			(2,424)				27,642
Foreign currency translation and other																						Foreign currency translation and other	—			—			—				(24,000)			—				(24,000)
Defined benefit pension plans																						Defined benefit pension plans	—			—			—				1,796			—				1,796
Derivative financial instruments																						Derivative financial instruments	—			—			—				47,256			—				47,256

Balance, September 2021																						Balance, September 2021	392,758,016			$	98,190		$	3,854,687			$	(940,834)		$	586,438			$	3,598,481

		Three Months Ended September 2020																					Three Months Ended September 2020
					Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)																	Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
		Common Stock														Common Stock
(In thousands, except share amounts)	(In thousands, except share amounts)	Shares	Amounts								Total						(In thousands, except share amounts)		Shares				Amounts								Total
Balance, June 2020	Balance, June 2020	389,641,245	$	97,410			$	4,010,817						$	(897,541)					$	(298,088)			$	2,912,598		Balance, June 2020	389,641,245					$	97,410		$	4,010,817			$	(897,541)			$	(298,088)			$	2,912,598

Net income		—	—				—					—					256,722					256,722
Net income (loss)																						Net income (loss)	—			—					—				—			256,722				256,722
Dividends on Common Stock ($0.48 per share)	Dividends on Common Stock ($0.48 per share)	—	—		(186,892)				—			—					(186,892)					Dividends on Common Stock ($0.48 per share)	—			—			(186,892)				—			—				(186,892)

Stock-based compensation, net	Stock-based compensation, net	323,473	81		28,433				—			(3,587)					24,927					Stock-based compensation, net	323,473			81			28,433				—			(3,587)				24,927
Foreign currency translation and other	Foreign currency translation and other	—	—		—				(14,901)			—					(14,901)					Foreign currency translation and other	—			—			—				(14,901)			—				(14,901)
Defined benefit pension plans	Defined benefit pension plans	—	—		—				(5,014)			—					(5,014)					Defined benefit pension plans	—			—			—				(5,014)			—				(5,014)
Derivative financial instruments	Derivative financial instruments	—	—		—				(42,202)			—					(42,202)					Derivative financial instruments	—			—			—				(42,202)			—				(42,202)

Balance, September 2020	Balance, September 2020	389,964,718	$	97,491	$	3,852,358			$	(959,658)		$	(44,953)				$	2,945,238				Balance, September 2020	389,964,718			$	97,491		$	3,852,358			$	(959,658)		$	(44,953)			$	2,945,238

		Three Months Ended September 2019
					Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
		Common Stock
(In thousands, except share amounts)		Shares	Amounts								Total
Balance, June 2019		397,922,120	$	99,481			$	3,988,385						$	(867,386)					$	931,134			$	4,151,614

Net income		—	—				—					—					649,001					649,001
Dividends on Common Stock ($0.43 per share)		—	—		—				—			(171,066)					(171,066)

Stock-based compensation, net		943,670	235		84,255				—			(3,081)					81,409
Foreign currency translation and other		—	—		—				(79,385)			—					(79,385)
Defined benefit pension plans		—	—		—				(7,858)			—					(7,858)
Derivative financial instruments		—	—		—				23,904			—					23,904

Balance, September 2019		398,865,790	$	99,716	$	4,072,640			$	(930,725)		$	1,405,988				$	4,647,619

Continued on next page.

See notes to consolidated financial statements.

VF Corporation Q2 ~~FY21~~FY22 Form 10-Q 8

Table of Contents

VF CORPORATION

Consolidated Statements of Stockholders’ Equity

(Unaudited)


																							Six Months Ended September 2021
																													Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
																							Common Stock
(In thousands, except share amounts)																						(In thousands, except share amounts)	Shares			Amounts									Total
Balance, March 2021																						Balance, March 2021	391,941,477			$	97,985				$	3,777,645						$	(1,009,000)			$	189,534			$	3,056,164

Net income (loss)																						Net income (loss)	—			—					—					—				788,298				788,298
Dividends on Common Stock ($0.98 per share)																						Dividends on Common Stock ($0.98 per share)	—			—			(2,597)				—			(381,830)				(384,427)

Stock-based compensation, net																						Stock-based compensation, net	816,539			205			79,639				—			(9,564)				70,280
Foreign currency translation and other																						Foreign currency translation and other	—			—			—				13,053			—				13,053
Defined benefit pension plans																						Defined benefit pension plans	—			—			—				2,112			—				2,112
Derivative financial instruments																						Derivative financial instruments	—			—			—				53,001			—				53,001

Balance, September 2021																						Balance, September 2021	392,758,016			$	98,190		$	3,854,687			$	(940,834)		$	586,438			$	3,598,481

		Six Months Ended September 2020																					Six Months Ended September 2020
					Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)																	Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
		Common Stock														Common Stock
(In thousands, except share amounts)	(In thousands, except share amounts)	Shares	Amounts								Total						(In thousands, except share amounts)		Shares				Amounts								Total
Balance, March 2020	Balance, March 2020	388,812,158	$	97,203			$	4,183,780						$	(930,958)					$	7,309			$	3,357,334		Balance, March 2020	388,812,158					$	97,203		$	4,183,780			$	(930,958)			$	7,309			$	3,357,334

Net loss		—	—				—					—					(28,891)					(28,891)
Net income (loss)																						Net income (loss)	—			—					—				—			(28,891)				(28,891)
Dividends on Common Stock ($0.96 per share)	Dividends on Common Stock ($0.96 per share)	—	—		(373,638)				—			0					(373,638)					Dividends on Common Stock ($0.96 per share)	—			—			(373,638)				—			—				(373,638)

Stock-based compensation, net	Stock-based compensation, net	1,152,560	288		42,216				—			(23,371)					19,133					Stock-based compensation, net	1,152,560			288			42,216				—			(23,371)				19,133
Foreign currency translation and other	Foreign currency translation and other	—	—		—				37,572			—					37,572					Foreign currency translation and other	—			—			—				37,572			—				37,572
Defined benefit pension plans	Defined benefit pension plans	—	—		—				(1,832)			—					(1,832)					Defined benefit pension plans	—			—			—				(1,832)			—				(1,832)
Derivative financial instruments	Derivative financial instruments	—	—		—				(64,440)			—					(64,440)					Derivative financial instruments	—			—			—				(64,440)			—				(64,440)

Balance, September 2020	Balance, September 2020	389,964,718	$	97,491	$	3,852,358			$	(959,658)		$	(44,953)				$	2,945,238				Balance, September 2020	389,964,718			$	97,491		$	3,852,358			$	(959,658)		$	(44,953)			$	2,945,238

		Six Months Ended September 2019
					Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)
		Common Stock
(In thousands, except share amounts)		Shares	Amounts								Total
Balance, March 2019		396,824,662	$	99,206			$	3,921,784						$	(902,075)					$	1,179,601			$	4,298,516
Adoption of new accounting standard, ASU 2016-02		—	—				—					—					(2,491)					(2,491)
Adoption of new accounting standard, ASU 2018-02		—	—		—				(61,861)			61,861					0
Net income		—	—		—				—			698,222					698,222
Dividends on Common Stock ($0.94 per share)		—	—		—				—			(373,604)					(373,604)

Stock-based compensation, net		2,041,128	510		150,856				—			(27,393)					123,973
Foreign currency translation and other		—	—		—				(63,613)			—					(63,613)
Defined benefit pension plans		—	—		—				(5,534)			—					(5,534)
Derivative financial instruments		—	—		—				27,065			—					27,065
Spin-off of Jeans Business		—	—		—				75,293			(130,208)					(54,915)
Balance, September 2019		398,865,790	$	99,716	$	4,072,640			$	(930,725)		$	1,405,988				$	4,647,619

See notes to consolidated financial statements.

9 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

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VF CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		PAGE NUMBER

NOTE 1	Basis of Presentation	11
NOTE 2	Recently Adopted and Issued Accounting Standards	11
NOTE 3	Revenues	1211
NOTE 4	Acquisition	13
NOTE 5	Discontinued Operations	1415
NOTE 56	Inventories	16
NOTE 67	Intangible Assets	16
~~NOTE 7~~	~~Goodwill~~	1617
NOTE 8	~~Leases~~Goodwill	1617
NOTE 9	~~Short-term Borrowings and Long-term Debt~~Leases	17
NOTE 10	Pension Plans	1718
NOTE 11	Capital and Accumulated Other Comprehensive Income (Loss)	18
NOTE 12	Stock-based Compensation	20
NOTE 13	Income Taxes	2021
NOTE 14	Reportable Segment Information	21
NOTE 15	Earnings Per Share	22
NOTE 16	Fair Value Measurements	2223
NOTE 17	Derivative Financial Instruments and Hedging Activities	24
NOTE 18	Restructuring	2526
NOTE 19	Contingencies	2627
NOTE 20	Subsequent Events	2627

VF Corporation Q2 ~~FY21~~FY22 Form 10-Q 10

Table of Contents

NOTE 1 — BASIS OF PRESENTATION

VF Corporation (together with its subsidiaries, collectively known as “VF” or the “Company”) uses a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. The Company's current fiscal year runs from ~~March 29, 2020~~April 4, 2021 through April ~~3, 2021~~2, 2022 ("Fiscal ~~2021"~~2022"). Accordingly, this Form 10-Q presents our second quarter of Fiscal ~~2021.~~2022. For presentation purposes herein, all references to periods ended September ~~2020~~2021 and September ~~2019~~2020 relate to the fiscal periods ended on October 2, 2021 and September 26, 2020, ~~and September 28, 2019,~~ respectively. References to March ~~2020~~2021 relate to information as of ~~March 28, 2020.~~April 3, 2021.

On ~~January 21, 2020,~~June 28, 2021, VF ~~announced its decision to explore~~completed the ~~divestiture~~sale of its Occupational Workwear business. The Occupational Workwear business iswas comprised primarily of the following brands and businesses: Red Kap®, VF Solutions®, Bulwark®, Workrite®, Walls®, Terra®, Kodiak®, Work Authority® and Horace Small®. The business also ~~includes~~included the license of certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel. During the three months ended March 2020, the Company determined that the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria and expects to divest this business during Fiscal 2021. Accordingly, the Company has reported theThe results of the Occupational Workwear business and the related cash flows have been reported as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, ~~respectively.~~respectively, through the date of sale. The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance ~~Sheets.~~Sheets, through the date of sale. These changes have been applied to all periods presented.

~~On May 22, 2019, VF completed~~Unless otherwise noted, discussion within these notes to the ~~spin-off of its Jeans business, which included the~~ ~~Wrangler~~®, ~~Lee~~® ~~and~~ ~~Rock & Republic~~® ~~brands, as well as the~~ ~~VF Outlet~~TM ~~business, into an independent, publicly traded company. As a result, VF reported the results~~interim consolidated financial statements relates to continuing operations. Refer to Note 5 for ~~the Jeans business and the related cash flows as~~additional information on discontinued ~~operations in the Consolidated Statements of~~operations.

~~Operations and Consolidated Statements of Cash Flows, respectively. These changes have been applied to all periods presented.~~

Certain prior year amounts have been reclassified to conform to the Fiscal ~~2021~~2022 presentation.

The accompanying unaudited ~~condensed~~interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. Similarly, the March ~~2020 condensed~~2021 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited ~~condensed~~interim consolidated financial statements contain all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations and cash flows of VF for the interim periods presented. Operating results for the three and six months ended September ~~2020~~2021 are not necessarily indicative of results that may be expected for any other interim period or for Fiscal ~~2021.~~2022. For further information, refer to the consolidated financial statements and notes included in VF’s Annual Report on Form 10-K for the year ended ~~March 28, 2020~~April 3, 2021 (“Fiscal ~~2020~~2021 Form 10-K”).

In preparing the ~~condensed~~interim consolidated financial statements, management makes estimates and assumptions that affect amounts reported in the ~~condensed~~interim consolidated financial statements and accompanying notes. The duration and severity of the novel coronavirus ("COVID-19") pandemic, which is subject to uncertainty, ~~is having a significant~~continues to impact on VF's business. Management's estimates and assumptions have contemplated both current and expected impacts related to COVID-19 based on available information. Actual results may differ from those estimates.

NOTE 2 — RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS

Recently Adopted Accounting Standards

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which requires entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The FASB has subsequently issued updates to the standard to provide additional clarification on specific topics. The guidance became effective for VF in the first quarter of Fiscal 2021, but did not have a material impact on VF's consolidated financial statements. As a result of the adoption of this guidance, the following significant accounting policy from the Company’s Fiscal 2020 Form 10-K has been updated:

~~Accounts Receivable~~

Trade accounts receivable are recorded at invoiced amounts, less contractual allowances for trade terms, sales incentive programs and discounts. Royalty receivables are recorded at amounts earned based on the licensees' sales of licensed products, subject in some cases to contractual minimum

royalties due from individual licensees. VF maintains an allowance for doubtful accounts for estimated losses that will result from the inability of customers and licensees to make required payments. The allowance is determined based on review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables, which are grouped based on similar risk characteristics, considering historical trends, adjusted for current economic conditions and reasonable and supportable forecasts when appropriate. The allowance represents the current estimate of lifetime expected credit losses for all outstanding accounts receivable and reflects the Company's ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses and future expectations. Receivables are written off against the allowance when it is determined that the amounts will not be recovered.

~~In August 2018, the FASB issued ASU No. 2018-13,~~ ~~"Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement", an update that modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain~~

11 ~~VF Corporation Q2 FY21 Form 10-Q~~

~~Table of Contents~~

~~disclosures. The guidance became effective for VF in the first quarter of Fiscal 2021, but did not have a material impact on VF's disclosures.~~

~~In August 2018, the FASB issued ASU No. 2018-15,~~ ~~"Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract"~~, an update that aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance became effective for VF in the first quarter of Fiscal 2021, but did not have a material impact on VF's consolidated financial statements.

~~Recently Issued Accounting Standards~~

~~In August 2018, the FASB issued ASU No. 2018-14,~~ ~~"Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans"~~, an update that modifies the annual disclosure requirements for employers who sponsor defined benefit pension or other postretirement plans. The guidance will be effective for VF in Fiscal 2021, but the

~~Company does not expect the adoption of this guidance to have a material impact on VF's disclosures.~~

~~In December 2019, the FASB issued ASU~~ No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", an update that amends and simplifies the accounting for income taxes by removing certain exceptions in existing guidance and providing new guidance to reduce complexity in certain areas. The guidance ~~will be~~became effective for VF in the first quarter of ~~the year ending April 2,~~Fiscal 2022, ~~("Fiscal 2022") with early adoption permitted. The Company is evaluating the~~but did not have a material impact ~~that adopting this guidance will have~~ on VF's consolidated financial statements.

Recently Issued Accounting Standards

In March 2020 and January 2021, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting"and ASU No. 2021-01, ~~an update that~~"Reference Rate Reform (Topic 848): Scope",respectively.This guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The optional guidance is provided to ease the potential burden of accounting for reference rate reform. The guidance is effective and can be adopted no later than December 31, 2022. The Company is evaluating the impact that adopting this guidance would have on VF's consolidated financial statements.

NOTE 3 — REVENUES

Contract Balances

The following table provides information about ~~accounts receivable,~~ contract assets and contract liabilities:


(In thousands)	(In thousands)	September 2020		March 2020		September 2019		(In thousands)	September 2021		March 2021		September 2020
Accounts receivable, net		$	1,606,479	$	1,308,051	$	1,881,374
Contract assets (a)	Contract assets (a)	2,573		1,181		2,433		Contract assets (a)	$	1,773	$	880	$	2,573
Contract liabilities (b)	Contract liabilities (b)	44,010		37,498		39,346		Contract liabilities (b)	58,841		49,869		44,010

(a)Included in the other current assets line item in the Consolidated Balance Sheets.

(b)Included in the accrued liabilities line item in the Consolidated Balance Sheets.

11 VF Corporation Q2 FY22 Form 10-Q

Table of Contents

For the three and six months ended September ~~2020,~~2021, the Company recognized ~~$85.1~~$71.0 million and ~~$120.7~~$162.0 million, respectively, of revenue that was included in the contract liability balance during the periods, including amounts recorded as a contract liability and subsequently recognized as revenue as performance obligations were satisfied within the same period, such as order deposits from customers. The change in the contract asset and contract liability balances primarily results from the timing differences between the Company's satisfaction of performance obligations and the customer's payment.

~~For the three and six months ended September 2020, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.~~Performance Obligations

As of September ~~2020,~~2021, the Company expects to recognize ~~$55.5~~$80.8 million of fixed consideration related to the future minimum

guarantees in effect under its licensing agreements and expects such amounts to be recognized over time based on the ~~contractual~~

contractual terms ~~including $9.1 million during the remainder of Fiscal 2021.~~through March 2031. The variable consideration related to licensing arrangements is not disclosed as a remaining performance obligation as it qualifies for the sales-based royalty exemption. VF has also elected the practical expedient to not disclose the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or less.

As of September ~~2020,~~2021, there were no arrangements with transaction price allocated to remaining performance obligations other than contracts for which the Company has applied the practical expedients and the fixed consideration related to future minimum guarantees discussed above.

~~VF Corporation Q2 FY21 Form 10-Q~~ 12For the three and six months ended September 2021, revenue recognized from performance obligations satisfied, or partially satisfied, in prior periods was not material.

~~Table of Contents~~

Disaggregation of Revenue

The following tables disaggregate our revenues by channel and geography, which provides a meaningful depiction of how the nature, timing and uncertainty of revenues ~~were~~are affected by economic factors.


	Three Months Ended September 2021
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	1,132,068	$	605,523	$	252,016	$	278	$	1,989,885
Direct-to-consumer	371,109		780,826		40,140		—		1,192,075
Royalty	3,444		5,824		7,007		—		16,275
Total	$	1,506,621	$	1,392,173	$	299,163	$	278	$	3,198,235

Geographic revenues
United States	$	691,538	$	714,085	$	209,370	$	278	$	1,615,271
International:
Europe	536,522		410,670		25,420		—		972,612
Asia-Pacific	182,302		188,178		48,061		—		418,541
Americas (non-U.S.)	96,259		79,240		16,312		—		191,811
Total	$	1,506,621	$	1,392,173	$	299,163	$	278	$	3,198,235


	Three Months Ended September 2020
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	823,954	$	664,868	$	208,902	$	—	$	1,697,724
Direct-to-consumer	329,661		530,231		40,028		164		900,084
Royalty	792		5,103		4,621		—		10,516
Total	$	1,154,407	$	1,200,202	$	253,551	$	164	$	2,608,324

Geographic revenues
United States	$	522,676	$	586,377	$	161,458	$	—	$	1,270,511
International:
Europe	414,054		372,012		31,104		164		817,334
Asia-Pacific	155,696		172,004		43,758		—		371,458
Americas (non-U.S.)	61,981		69,809		17,231		—		149,021
Total	$	1,154,407	$	1,200,202	$	253,551	$	164	$	2,608,324

VF Corporation Q2 FY22 Form 10-Q 12

Table of Contents


	Six Months Ended September 2021
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	1,466,943	$	1,151,548	$	478,887	$	278	$	3,097,656
Direct-to-consumer	650,767		1,532,061		82,952		—		2,265,780
Royalty	6,665		10,632		12,059		—		29,356
Total	$	2,124,375	$	2,694,241	$	573,898	$	278	$	5,392,792

Geographic revenues
United States	$	974,696	$	1,409,920	$	426,896	$	278	$	2,811,790
International:
Europe	755,077		717,886		39,616		—		1,512,579
Asia-Pacific	270,362		426,651		74,200		—		771,213
Americas (non-U.S.)	124,240		139,784		33,186		—		297,210
Total	$	2,124,375	$	2,694,241	$	573,898	$	278	$	5,392,792


	Six Months Ended September 2020
(In thousands)	Outdoor		Active		Work		Other		Total
Channel revenues
Wholesale	$	982,460	$	906,032	$	326,506	$	1,275	$	2,216,273
Direct-to-consumer	509,675		854,432		80,643		208		1,444,958
Royalty	3,500		11,054		8,832		—		23,386
Total	$	1,495,635	$	1,771,518	$	415,981	$	1,483	$	3,684,617

Geographic revenues
United States	$	675,153	$	851,884	$	276,090	$	—	$	1,803,127
International:
Europe	513,078		497,538		44,405		1,483		1,056,504
Asia-Pacific	234,963		334,418		68,267		—		637,648
Americas (non-U.S.)	72,441		87,678		27,219		—		187,338
Total	$	1,495,635	$	1,771,518	$	415,981	$	1,483	$	3,684,617

NOTE 4 — ACQUISITION

On December 28, 2020, VF acquired 100% of the outstanding shares of Supreme Holdings, Inc. ("Supreme") for $2.2 billion in cash, subject to working capital and other adjustments. The ~~wholesale channel~~transaction also included $0.2 billion of cash acquired by VF. The purchase price was primarily funded with cash on hand. During the three months ended September 2021, the purchase consideration was reduced by $3.8 million associated with the final working capital adjustment.

The acquisition of Supreme includes ~~fees generated~~a contingent arrangement that may require additional cash consideration to be paid to the selling shareholders of Supreme ranging from ~~sourcing activities as~~zero to $300.0 million, subject to the ~~customers~~achievement of certain financial targets over the one-year earn-out period ending January 31, 2022. The initial estimated fair value of the contingent consideration of $207.0 million is included in the purchase price and ~~point-in-time revenue recognition~~was reported in the other liabilities line item in the Consolidated Balance Sheet at March 2021. The estimated fair value of the contingent consideration was determined based on the probability-weighted present value of various future cash payment outcomes. In subsequent reporting periods, the

contingent consideration liability is remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations. Refer to Note 16 for additional information on fair value measurements.

Supreme was a privately-held company based in New York, New York and is a global streetwear leader that sells apparel, accessories and footwear under its namesake brand, Supreme®, through direct-to-consumer channels, including digital. The acquisition of Supreme accelerates VF's long-term growth strategy and builds on a long-standing relationship between Supreme and VF, with the Supreme® brand being a regular collaborator with VF's Vans®, The North Face® and Timberland® brands. The acquisition also provides VF with deeper access to attractive consumer segments and the ability to leverage VF's enterprise platforms and capabilities to enable sustainable long-term growth.

In connection with the acquisition, VF deposited in escrow 605,050 shares of VF Common Stock. The common shares are ~~similar to other wholesale arrangements.~~

Three Months Ended September 2020
(In thousands) Outdoor Active Work Other Total
Channel revenues
Wholesale $ 823,954 $ 664,868 $ 208,902 $ 0 $ 1,697,724
Direct-to-consumer 329,661 530,231 40,028 164 900,084
Royalty 792 5,103 4,621 0 10,516
Total $ 1,154,407 $ 1,200,202 $ 253,551 $ 164 $ 2,608,324
Geographic revenues
United States $ 522,676 $ 586,377 $ 161,458 $ 0 $ 1,270,511
International 631,731 613,825 92,093 164 1,337,813
Total $ 1,154,407 $ 1,200,202 $ 253,551 $ 164 $ 2,608,324

Three Months Ended September 2019
(In thousands) Outdoor Active Work Other Total
Channel revenues
Wholesale $ 1,175,422 $ 709,770 $ 186,482 $ 15,172 $ 2,086,846
Direct-to-consumer 347,684 697,627 30,453 2,898 1,078,662
Royalty 2,831 6,237 5,182 0 14,250
Total $ 1,525,937 $ 1,413,634 $ 222,117 $ 18,070 $ 3,179,758
Geographic revenues
United States $ 737,255 $ 711,541 $ 149,523 $ 0 $ 1,598,319
International 788,682 702,093 72,594 18,070 1,581,439
Total $ 1,525,937 $ 1,413,634 $ 222,117 $ 18,070 $ 3,179,758

Six Months Ended September 2020
(In thousands) Outdoor Active Work Other Total
Channel revenues
Wholesale $ 982,460 $ 906,032 $ 326,506 $ 1,275 $ 2,216,273
Direct-to-consumer 509,675 854,432 80,643 208 1,444,958
Royalty 3,500 11,054 8,832 0 23,386
Total $ 1,495,635 $ 1,771,518 $ 415,981 $ 1,483 $ 3,684,617
Geographic revenues
United States $ 675,153 $ 851,884 $ 276,090 $ 0 $ 1,803,127
International 820,482 919,634 139,891 1,483 1,881,490
Total $ 1,495,635 $ 1,771,518 $ 415,981 $ 1,483 $ 3,684,617

13 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

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Six Months Ended September 2019
(In thousands) Outdoor Active Work Other Total
Channel revenues
Wholesale $ 1,517,178 $ 1,369,912 $ 350,762 $ 17,980 $ 3,255,832
Direct-to-consumer 614,026 1,263,514 63,972 6,352 1,947,864
Royalty 5,353 12,334 9,029 0 26,716
Total $ 2,136,557 $ 2,645,760 $ 423,763 $ 24,332 $ 5,230,412
Geographic revenues
United States $ 1,040,307 $ 1,422,746 $ 292,154 $ 0 $ 2,755,207
International 1,096,250 1,223,014 131,609 24,332 2,475,205
Total $ 2,136,557 $ 2,645,760 $ 423,763 $ 24,332 $ 5,230,412

subject to certain future service requirements and vest over periods of up to four years. For accounting purposes, VF will recognize the stock-based compensation cost for the fair value of these awards of $51.7 million over the vesting periods.

For the three and six months ended September 2021, Supreme contributed revenues of $99.6 million and $245.3 million, respectively, and net income of $6.1 million and $32.4 million, respectively. The results of Supreme have been reported in the Active segment since the date of acquisition. Total transaction expenses for the Supreme acquisition were $8.7 million, all of which were recognized in the year ended March 2021 in the

selling, general and administrative expenses line item in the Consolidated Statement of Operations.

The allocation of the purchase price is preliminary and subject to change, primarily for certain income tax matters. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date. Goodwill decreased by $4.3 million during the three months ended September 2021, primarily related to the final working capital adjustment.

The following table summarizes the preliminary estimated fair values of the Supreme assets acquired and liabilities assumed at the date of acquisition:


(In thousands)	December 28, 2020
Cash and equivalents	$	218,104
Accounts receivable	19,698
Inventories	44,937
Other current assets	35,091
Property, plant and equipment	18,914
Intangible asset	1,201,000
Operating lease right-of-use assets	55,668
Other assets	58,479
Total assets acquired	1,651,891

Accounts payable	25,717
Other current liabilities	77,640
Operating lease liabilities	53,062
Deferred income tax liabilities	275,718
Other liabilities	35,245
Total liabilities assumed	467,382

Net assets acquired	1,184,509
Goodwill	1,245,986
Purchase price	$	2,430,495

The purchase price consisted of the following components:


(In thousands)	December 28, 2020
Cash consideration	$	2,223,495
Contingent consideration	207,000
Purchase price	$	2,430,495

The goodwill is attributable to our ability to expand the Supreme®brand into new markets, the acquired workforce and future collaboration opportunities for the Supreme® brand. All of the goodwill was assigned to the Active segment and will not be deductible for tax purposes.

The Supreme®trademark, which management believes to have an indefinite life, has been valued at $1.2 billion using the relief-from-royalty method, which is an income valuation approach. The relief-from-royalty method requires the use of significant estimates and assumptions, including but not limited to, future revenues, growth rates, royalty rate, tax rates and discount rate.

VF Corporation Q2 FY22 Form 10-Q 14

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The following unaudited pro forma summary presents consolidated information of VF as if the acquisition of Supreme had occurred on March 31, 2019:


(In thousands, except per share amounts)	Three Months Ended September 2020 (unaudited)		Six Months Ended September 2020 (unaudited)
Total revenues	$	2,743,359	$	3,933,644
Income from continuing operations	274,425		9,962
Earnings per common share from continuing operations
Basic	$	0.71	$	0.03
Diluted	0.70		0.03

These pro forma amounts have been calculated after applying VF’s accounting policies and adjusting the results of Supreme to reflect the fair value adjustments to intangible assets, property, plant and equipment and inventory. The results of Supreme have also been adjusted for historical interest expense as the acquired business was debt-free on the acquisition date. These changes have been applied from March 31, 2019, with related tax effects.

Pro forma financial information is not necessarily indicative of VF’s operating results if the acquisition had been effected at the date indicated, nor is it necessarily indicative of future operating results. Amounts do not include any marketing leverage, or operating efficiencies that VF believes are achievable.

NOTE 45 — DISCONTINUED OPERATIONS

The Company continuously assesses the composition of its portfolio to ensure it is aligned with its strategic objectives and positioned to maximize growth and return to shareholders.

Occupational Workwear Business

On January 21, 2020, VF announced its decision to explore the divestiture of its Occupational Workwear business. The Occupational Workwear business iswas comprised primarily of the following brands and businesses: Red Kap®, VF Solutions®, Bulwark®, Workrite®, Walls®, Terra®, Kodiak®, Work Authority® ~~and~~ andHorace Small®.The business also ~~includes~~included the license of certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel.

~~During the three months ended~~ As of March 28, 2020, ~~the Company determined~~ the Occupational Workwear business met the held-for-sale and discontinued operations accounting ~~criteria and expects to divest this business during Fiscal 2021.~~criteria. Accordingly, the Company has reported the results of the Occupational Workwear business and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, ~~respectively.~~respectively, through the date of sale. The related held-for-sale assets and ~~liabilities~~liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance ~~Sheets.~~Sheets, through the date of sale.

On June 28, 2021, VF completed the sale of the Occupational Workwear business. The Company received proceeds of $616.5 million, net of cash sold, resulting in an estimated after-tax gain on sale of $145.6 million, which is included in the income from discontinued operations, net of tax line item in the Consolidated Statement of Operations for the six months ended September 2021, and is subject to working capital and other adjustments.

The results of the Occupational Workwear business were previously reported in the Work segment. The results of the Occupational Workwear business recorded in the income from discontinued operations, net of tax line item in the Consolidated Statements of Operations were income of $170.3 million (including an estimated after-tax gain on sale of $145.6 million) for the six months ended September 2021, and income of $13.5 million and $5.6 million for the three and six months ended September 2020, ~~respectively, and~~ ~~$23.6 million~~ ~~and~~ ~~$55.6 million~~ ~~for the~~ ~~three and six months ended~~ ~~September 2019,~~ respectively.

Certain corporate overhead costs and segment costs previously allocated to the Occupational Workwear business for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations.

~~Jeans Business~~

~~On May 22, 2019, VF completed the spin-off its Jeans business, which included the~~ ~~Wrangler~~®, ~~Lee~~® ~~and~~ ~~Rock & Republic~~® ~~brands, as well as the~~ ~~VF Outlet~~TM ~~business, into an independent,~~

publicly traded company now operating under the name Kontoor Brands, Inc. ("Kontoor Brands") and trading under the symbol "KTB" on the New York Stock Exchange. The spin-off was effected through a distribution to VF shareholders of one share of Kontoor Brands common stock for every seven shares of VF common stock held on the record date of May 10, 2019. Accordingly, the Company has reported the results of the Jeans business and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively.

~~In connection with the spin-off, Kontoor Brands entered into a credit agreement with respect to $1.55 billion in senior secured credit facilities consisting of a senior secured~~ ~~five-year $750.0 million term loan A facility, a senior secured~~ ~~seven-year $300.0 million term loan B facility and a~~ ~~five~~-year $500.0 million senior secured revolving credit facility (collectively, the "Kontoor Credit Facilities"). Prior to the effective date of the spin-off, Kontoor Brands incurred $1.05 billion of indebtedness under the Kontoor Credit Facilities, which was primarily used to fund a transfer of $906.1 million to VF and its subsidiaries, net of $126.8 million of cash received from VF. As a result of the spin-off, VF divested net assets of $54.9 million, including the indebtedness under the Kontoor Credit Facilities. Also included in the net assets divested was $75.3 million of net accumulated other comprehensive losses attributable to the Jeans business, primarily related to foreign currency translation.

~~The results of the~~ ~~Wrangler~~®, ~~Lee~~® ~~and~~ ~~Rock & Republic~~® ~~brands were previously reported in the Jeans segment, the results of the~~ ~~Wrangler~~® ~~RIGGS~~ ~~brand were previously reported in the Work segment, and the results of the non-VF products sold in~~ ~~VF Outlet~~TM stores were previously reported in the Other category included in the reconciliation of segment revenues and segment profit. The results of the Jeans business recorded in the income from discontinued operations, net of tax line item in the Consolidated Statement of Operations were a loss of $48.0 million for the ~~six~~ ~~months ended September 2019, including $59.5 million of separation and related expenses.~~

In connection with the spin-off of the Jeans business, the Company entered into several agreements with Kontoor Brands that govern the relationship of the parties following the spin-off including the Separation and Distribution Agreement, the Tax Matters Agreement, the Transition Services Agreement, the VF Intellectual Property License Agreement and the Employee Matters Agreement. Under the terms of a transition services agreement, the ~~Transition Services~~Company will provide certain support services for periods generally up to 12 months from the closing date of the transaction.

15VF Corporation Q2 ~~FY21~~FY22 Form 10-Q14

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Agreement, the Company and Kontoor Brands agreed to provide each other certain transitional services including information technology, information management, human resources, employee benefits administration, supply chain, facilities, and other limited finance and accounting related services for periods

up to 24 months. Payments and operating expense reimbursements for transition services are recorded within the reportable segments or within the corporate and other expenses line item, in the reconciliation of segment profit in Note 14, based on the function providing the service.

Summarized Discontinued Operations Financial Information

The following table summarizes the major line items for the Occupational Workwear ~~business and the Jeans~~ business that are included in the income from discontinued operations, net of tax line item in the Consolidated Statements of Operations:


		Three Months Ended September				Six Months Ended September					Three Months Ended September				Six Months Ended September

(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020		2021		2020
Net revenues	Net revenues	$	162,310	$	213,510	$	287,643	$	769,538	Net revenues	$	—	$	162,310	$	181,424	$	287,643
Cost of goods sold	Cost of goods sold	113,147		140,990		214,617		483,944		Cost of goods sold	—		113,147		117,193		214,617
Selling, general and administrative expenses	Selling, general and administrative expenses	34,911		42,017		68,167		238,483		Selling, general and administrative expenses	—		34,911		38,735		68,167

Interest income, net	Interest income, net	180		559		473		592		Interest income, net	—		180		194		473
Other income (expense), net	Other income (expense), net	79		(41)		79		(664)		Other income (expense), net	—		79		6		79
Income from discontinued operations before income taxes	Income from discontinued operations before income taxes	14,511		31,021		5,411		47,039		Income from discontinued operations before income taxes	—		14,511		25,696		5,411

Gain on the sale of discontinued operations before income taxes										Gain on the sale of discontinued operations before income taxes	—		—		133,571		—
Total income from discontinued operations before income taxes										Total income from discontinued operations before income taxes	—		14,511		159,267		5,411
Income tax expense (benefit) (a)	Income tax expense (benefit) (a)	1,035		7,397		(194)		39,467		Income tax expense (benefit) (a)	—		1,035		(11,006)		(194)
Income from discontinued operations, net of tax	Income from discontinued operations, net of tax	$	13,476	$	23,624	$	5,605	$	7,572	Income from discontinued operations, net of tax	$	—	$	13,476	$	170,273	$	5,605

(a)Income tax ~~expense~~benefit for the six months ended September ~~2019~~2021 includes ~~additional~~$12.0 million of deferred tax ~~expense on nondeductible transaction costs and uncertain tax positions~~benefit related to capital and other losses realized upon the ~~Jeans~~sale of the Occupational Workwear business.

The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations ~~for each~~as of ~~the periods presented:~~March 2021 and September 2020.


(In thousands)	(In thousands)	September 2020		March 2020		September 2019		(In thousands)	March 2021		September 2020
Cash and equivalents	Cash and equivalents	$	26,846	$	39,752	$	37,693	Cash and equivalents	$	34,132	$	26,846
Accounts receivable, net	Accounts receivable, net	82,520		83,650		94,780		Accounts receivable, net	103,835		82,520
Inventories	Inventories	241,519		294,000		300,689		Inventories	245,227		241,519
Other current assets	Other current assets	7,773		6,701		9,054		Other current assets	8,208		7,773
Property, plant and equipment, net	Property, plant and equipment, net	47,964		44,863		39,364		Property, plant and equipment, net	49,394		47,964
Intangible assets, net	Intangible assets, net	54,471		54,471		61,902		Intangible assets, net	54,471		54,471
Goodwill	Goodwill	43,530		43,530		49,630		Goodwill	43,530		43,530
Operating lease right-of-use assets	Operating lease right-of-use assets	42,445		38,941		32,265		Operating lease right-of-use assets	43,220		42,445
Other assets	Other assets	5,609		5,231		4,496		Other assets	5,561		5,609

Total assets of discontinued operations	Total assets of discontinued operations	$	552,677	$	611,139	$	629,873	Total assets of discontinued operations	$	587,578	$	552,677

Accounts payable	Accounts payable	$	46,493	$	63,380	$	67,493	Accounts payable	$	59,965	$	46,493
Accrued liabilities	Accrued liabilities	32,322		29,699		32,836		Accrued liabilities	38,956		32,322
Operating lease liabilities	Operating lease liabilities	34,688		35,867		30,907		Operating lease liabilities	31,301		34,688
Other liabilities	Other liabilities	5,177		2,270		2,572		Other liabilities	3,863		5,177
Deferred income tax liabilities (a)	Deferred income tax liabilities (a)	(4,324)		(4,435)		(10,250)		Deferred income tax liabilities (a)	(8,828)		(4,324)
Total liabilities of discontinued operations	Total liabilities of discontinued operations	$	114,356	$	126,781	$	123,558	Total liabilities of discontinued operations	$	125,257	$	114,356

(a)Deferred income tax balances reflect VF's consolidated netting by jurisdiction.

NOTE 6 — INVENTORIES


(In thousands)	September 2021		March 2021		September 2020
Finished products	$	1,397,988	$	983,472	$	1,358,593
Work-in-process	50,473		54,386		59,855
Raw materials	16,253		23,981		16,395
Total inventories	$	1,464,714	$	1,061,839	$	1,434,843

15VF Corporation Q2 ~~FY21~~FY22 Form 10-Q16

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NOTE ~~5 — INVENTORIES~~

(In thousands) September 2020 March 2020 September 2019
Finished products $ 1,358,593 $ 1,201,562 $ 1,500,803
Work-in-process 59,855 67,603 64,585
Raw materials 16,395 24,747 24,639
Total inventories $ 1,434,843 $ 1,293,912 $ 1,590,027

~~NOTE 6~~7 — INTANGIBLE ASSETS


				September 2020						March 2020					September 2021						March 2021
(In thousands)	(In thousands)	Weighted Average Amortization Period	Amortization Method	Cost		Accumulated Amortization		Net Carrying Amount		Net Carrying Amount		(In thousands)	Weighted Average Amortization Period	Amortization Method	Cost		Accumulated Amortization		Net Carrying Amount		Net Carrying Amount
Amortizable intangible assets:	Amortizable intangible assets:											Amortizable intangible assets:
Customer relationships	Customer relationships	19 years	Accelerated	$	266,350	$	142,442	$	123,908	$	137,017	Customer relationships	19 years	Accelerated	$	262,079	$	153,139	$	108,940	$	117,207
License agreements	License agreements	19 years	Accelerated	7,766		5,216		2,550		2,548		License agreements	20 years	Accelerated	6,652		4,322		2,330		2,448
Other	Other	8 years	Straight-line	8,296		5,936		2,360		2,909		Other	9 years	Straight-line	5,861		4,292		1,569		1,986
Amortizable intangible assets, net	Amortizable intangible assets, net							128,818		142,474		Amortizable intangible assets, net							112,839		121,641
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:											Indefinite-lived intangible assets:
Trademarks and trade names	Trademarks and trade names							1,722,275		1,712,071		Trademarks and trade names							2,905,403		2,907,904
Intangible assets, net	Intangible assets, net							$	1,851,093	$	1,854,545	Intangible assets, net							$	3,018,242	$	3,029,545

Amortization expense for the three and six months ended September ~~2020~~2021 was ~~$4.5~~$4.0 million and ~~$8.9~~$8.1 million, respectively. Based on the carrying amounts of amortizable intangible assets noted above, estimated amortization expense for the next five years beginning in Fiscal ~~2021~~2022 is ~~$16.8~~$15.5 million, ~~$15.2~~$14.5 million, ~~$14.1~~$14.0 million, ~~$13.6~~$13.5 million and ~~$13.1~~$12.5 million, respectively.

NOTE 78 — GOODWILL

Changes in goodwill are summarized by reportable segment as follows:


(In thousands)	(In thousands)	Outdoor		Active		Work		Total		(In thousands)	Outdoor		Active		Work		Total
Balance, March 2020		$	653,433	$	389,848	$	112,738	$	1,156,019
Balance, March 2021										Balance, March 2021	$	665,278	$	1,645,769	$	114,380	$	2,425,427

Measurement period adjustment to Supreme acquisition (Note 4)										Measurement period adjustment to Supreme acquisition (Note 4)	—		(4,325)		—		(4,325)
Currency translation	Currency translation	7,000		9,917		578		17,495		Currency translation	(1,508)		(3,841)		14		(5,335)
Balance, September 2020		$	660,433	$	399,765	$	113,316	$	1,173,514
Balance, September 2021										Balance, September 2021	$	663,770	$	1,637,603	$	114,394	$	2,415,767

~~Accumulated impairment~~Accumulated impairment charges for the Outdoor segment were $323.2 million as of September ~~2020~~2021 and March ~~2020. NaN~~2021. No impairment charges were recorded during the six months ended September ~~2020.~~2021.

NOTE 89 — LEASES

The Company leases certain retail locations, office space, distribution facilities, machinery and equipment, and vehicles. The substantial majority of these leases are operating leases. Total lease cost includes operating lease cost, variable lease cost, finance lease cost, short-term lease cost ~~impairment~~ and ~~gain recognized from sale-leaseback transactions.~~impairment. Components of lease cost were as follows:


		Three Months Ended September				Six Months Ended September				Three Months Ended September				Six Months Ended September

(In thousands)	(In thousands)	2020		2019		2020		2019			(In thousands)	2021		2020		2021		2020
Operating lease cost	Operating lease cost	$	106,679	$	107,023	$	215,531	$	206,611		Operating lease cost	$	110,160	$	106,679	$	223,660	$	215,531
Other lease costs	Other lease costs	19,572		31,202		34,570		49,106			Other lease costs	22,491		19,572		50,430		34,570
Total lease cost	Total lease cost	$	126,251	$	138,225	$	250,101	$	255,717		Total lease cost	$	132,651	$	126,251	$	274,090	$	250,101

During the six months ended September ~~2020~~2021 and ~~2019,~~2020, the Company paid ~~$176.1~~$241.8 million and ~~$209.5~~$176.1 million of cash for operating leases, respectively. The ~~decrease~~increase was primarily driven by the timing of payments and lease concessions related to the effects of ~~COVID-19.~~COVID-19 in the six months ended September 2020. During the six months ended September ~~2020~~2021 and ~~2019,~~2020, the Company obtained ~~$326.3~~$123.1 million and ~~$225.3~~$326.3 million of right-of-use assets in exchange for lease liabilities, respectively. The decrease was primarily driven by the commencement of a new distribution center lease during the six months ended September 2020.

17VF Corporation Q2 ~~FY21~~FY22 Form 10-Q16

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~~NOTE 9 — SHORT-TERM BORROWINGS AND LONG-TERM DEBT~~

~~Revolving Credit Facility~~

In April 2020, VF entered into Amendment No. 1 to its $2.25 billion senior unsecured revolving line of credit (the "Global Credit Facility") (the “Amendment”). The Amendment provides for (i) an increase in VF’s consolidated indebtedness to consolidated capitalization ratio financial covenant to 0.70 to 1.00 (from 0.60 to 1.00) through the last day of the fiscal quarter ending March 31, 2022, (ii) calculation of consolidated indebtedness (and, thereby consolidated capitalization) net of

unrestricted cash of VF and its subsidiaries and (iii) testing of such financial covenant solely as of the last day of each fiscal quarter during such period. In addition, the Amendment requires VF and its subsidiaries to maintain minimum liquidity in the form of unrestricted cash and unused financing commitments of not less than $750.0 million at all times during such period. ~~As of~~ ~~September 2020, VF was in compliance with all covenants.~~

~~Senior Notes Issuance~~

~~In April 2020, VF issued senior unsecured notes, as outlined in the table below:~~

(Dollars in thousands)
Scheduled Maturity Aggregate Principal Effective Annual Interest Rate Interest Payments
2.050% notes, due 2022 $ 1,000,000 2.277 % Semiannually
2.400% notes, due 2025 750,000 2.603 % Semiannually
2.800% notes, due 2027 500,000 2.953 % Semiannually
2.950% notes, due 2030 750,000 3.071 % Semiannually
Total Issuance $ 3,000,000

VF used a portion of the net proceeds from this offering to repay borrowings under its Global Credit Facility. The aggregate outstanding balance of these notes was $2.98 billion at September 2020, which was net of unamortized original issue discount and debt issuance costs.

NOTE 10 — PENSION PLANS

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


		Three Months Ended September				Six Months Ended September					Three Months Ended September				Six Months Ended September

(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020		2021		2020
Service cost – benefits earned during the period	Service cost – benefits earned during the period	$	3,783	$	3,410	$	7,415	$	6,791	Service cost – benefits earned during the period	$	3,577	$	3,783	$	7,190	$	7,415
Interest cost on projected benefit obligations	Interest cost on projected benefit obligations	11,981		14,743		23,929		29,504		Interest cost on projected benefit obligations	9,367		11,981		18,842		23,929
Expected return on plan assets	Expected return on plan assets	(20,571)		(23,151)		(41,110)		(46,329)		Expected return on plan assets	(19,368)		(20,571)		(38,753)		(41,110)
Settlement charges	Settlement charges	572		519		572		519		Settlement charges	76		572		1,024		572

Amortization of deferred amounts:	Amortization of deferred amounts:									Amortization of deferred amounts:
Net deferred actuarial losses	Net deferred actuarial losses	2,898		4,014		5,761		8,033		Net deferred actuarial losses	2,871		2,898		5,711		5,761
Deferred prior service costs (credits)		(17)		12		(34)		25
Deferred prior service credits										Deferred prior service credits	(117)		(17)		(235)		(34)
Net periodic pension cost (income)	Net periodic pension cost (income)	$	(1,354)	$	(453)	$	(3,467)	$	(1,457)	Net periodic pension cost (income)	$	(3,594)	$	(1,354)	$	(6,221)	$	(3,467)

The amounts reported in these disclosures have not been segregated between continuing and discontinued operations.

VF has reported the service cost component of net periodic pension cost (income) in operating income and the other components, which include interest cost, expected return on plan assets, settlement charges and amortization of deferred actuarial losses and prior service ~~costs (credits),~~credits, in the other income (expense), net line item in the Consolidated Statements of Operations.

VF contributed ~~$4.5~~$6.1 million to its defined benefit plans during the six months ended September ~~2020,~~2021, and intends to make approximately ~~$13.9~~$26.8 million of contributions during the remainder of Fiscal ~~2021.~~2022.

VF ~~reported $0.6~~recorded $0.1 million and $1.0 million in settlement charges in the other income (expense), net line item in the Consolidated Statements of Operations for the three and six months ended September ~~2020,~~2021, respectively, as well as ~~$0.5~~$0.6 million for both the three and six months ended September ~~2019.~~2020. The settlement charges related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan. Actuarial assumptions used in the interim ~~valuation~~valuations were reviewed and revised as appropriate. The discount rate used to determine the supplemental defined benefit pension obligation as of September ~~2020~~2021 and June 2021 was ~~2.87%.~~

17 ~~VF Corporation Q2 FY21 Form 10-Q~~

2.91% and 2.90%, respectively.

~~Table of Contents~~

NOTE 11 — CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Common Stock

During the six months ended September ~~2020,~~2021, the Company did 0tnot purchase shares of Common Stock in open market transactions under its share repurchase program authorized by VF’s Board of Directors. These are treated as treasury stock transactions when shares are repurchased.

Common Stock outstanding is net of shares held in treasury which are, in substance, retired. There were 0no shares held in treasury at the end of September ~~2020,~~2021, March ~~2020~~2021 or September ~~2019.~~2020. 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.

Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and specified components of other comprehensive income (“OCI”), which ~~relates~~relate to changes in assets and liabilities that are not included in net income (loss) under GAAP but are instead deferred and accumulated within a separate component of

stockholders’ equity in the balance sheet. VF’s comprehensive income (loss) is presented in the Consolidated Statements of Comprehensive Income (Loss). The deferred components of OCI are reported, net of related income taxes, in accumulated OCI in stockholders’ equity, as follows:


(In thousands)	September 2021		March 2021		September 2020
Foreign currency translation and other	$	(687,120)	$	(700,173)	$	(700,137)
Defined benefit pension plans	(255,635)		(257,747)		(264,304)
Derivative financial instruments	1,921		(51,080)		4,783
Accumulated other comprehensive income (loss)	$	(940,834)	$	(1,009,000)	$	(959,658)

VF Corporation Q2 FY22 Form 10-Q 18

(In thousands) September 2020 March 2020 September 2019
Foreign currency translation and other $ (700,137) $ (737,709) $ (715,286)
Defined benefit pension plans (264,304) (262,472) (298,326)
Derivative financial instruments 4,783 69,223 82,887
Accumulated other comprehensive income (loss) $ (959,658) $ (930,958) $ (930,725)

Table of Contents

The changes in accumulated OCI, net of related taxes, were as follows:


		Three Months Ended September 2020									Three Months Ended September 2021
(In thousands)	(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total		(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, June 2020		$	(685,236)	$	(259,290)	$	46,985	$	(897,541)
Balance, June 2021										Balance, June 2021	$	(663,120)	$	(257,431)	$	(45,335)	$	(965,886)

Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(14,901)		(7,629)		(32,534)		(55,064)		Other comprehensive income (loss) before reclassifications	(24,000)		(327)		28,383		4,056
Amounts reclassified from accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)	0		2,615		(9,668)		(7,053)		Amounts reclassified from accumulated other comprehensive income (loss)	—		2,123		18,873		20,996
Net other comprehensive income (loss)	Net other comprehensive income (loss)	(14,901)		(5,014)		(42,202)		(62,117)		Net other comprehensive income (loss)	(24,000)		1,796		47,256		25,052
Balance, September 2020		$	(700,137)	$	(264,304)	$	4,783	$	(959,658)
Balance, September 2021										Balance, September 2021	$	(687,120)	$	(255,635)	$	1,921	$	(940,834)


		Three Months Ended September 2019									Three Months Ended September 2020
(In thousands)	(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total		(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, June 2019		$	(635,901)	$	(290,468)	$	58,983	$	(867,386)
Balance, June 2020										Balance, June 2020	$	(685,236)	$	(259,290)	$	46,985	$	(897,541)

Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(79,385)		(10,896)		44,348		(45,933)		Other comprehensive income (loss) before reclassifications	(14,901)		(7,629)		(32,534)		(55,064)
Amounts reclassified from accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)	0		3,038		(20,444)		(17,406)		Amounts reclassified from accumulated other comprehensive income (loss)	—		2,615		(9,668)		(7,053)

Net other comprehensive income (loss)	Net other comprehensive income (loss)	(79,385)		(7,858)		23,904		(63,339)		Net other comprehensive income (loss)	(14,901)		(5,014)		(42,202)		(62,117)
Balance, September 2019		$	(715,286)	$	(298,326)	$	82,887	$	(930,725)
Balance, September 2020										Balance, September 2020	$	(700,137)	$	(264,304)	$	4,783	$	(959,658)


	Six Months Ended September 2021
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, March 2021	$	(700,173)	$	(257,747)	$	(51,080)	$	(1,009,000)
Other comprehensive income (loss) before reclassifications	13,053		(2,738)		24,012		34,327
Amounts reclassified from accumulated other comprehensive income (loss)	—		4,850		28,989		33,839
Net other comprehensive income (loss)	13,053		2,112		53,001		68,166
Balance, September 2021	$	(687,120)	$	(255,635)	$	1,921	$	(940,834)


	Six Months Ended September 2020
(In thousands)	Foreign Currency Translation and Other		Defined Benefit Pension Plans		Derivative Financial Instruments		Total
Balance, March 2020	$	(737,709)	$	(262,472)	$	69,223	$	(930,958)
Other comprehensive income (loss) before reclassifications	(4,792)		(6,642)		(38,599)		(50,033)
Amounts reclassified from accumulated other comprehensive income (loss)	42,364		4,810		(25,841)		21,333
Net other comprehensive income (loss)	37,572		(1,832)		(64,440)		(28,700)
Balance, September 2020	$	(700,137)	$	(264,304)	$	4,783	$	(959,658)

19VF Corporation Q2 ~~FY21~~FY22 Form 10-Q18

Table of Contents

Six Months Ended September 2019
(In thousands) Foreign Currency Translation and Other Defined Benefit Pension Plans Derivative Financial Instruments Total
Balance, March 2019 $ (725,679) $ (243,184) $ 66,788 $ (902,075)
Adoption of new accounting standard, ASU 2018-02
(9,088) (50,402) (2,371) (61,861)
Other comprehensive income (loss) before reclassifications (63,613) (11,719) 55,248 (20,084)
Amounts reclassified from accumulated other comprehensive income (loss) 0 6,185 (28,183) (21,998)
Spin-off of Jeans Business 83,094 794 (8,595) 75,293
Net other comprehensive income (loss) 10,393 (55,142) 16,099 (28,650)
Balance, September 2019 $ (715,286) $ (298,326) $ 82,887 $ (930,725)

Reclassifications out of accumulated OCI were as follows:


(In thousands)	(In thousands)		Three Months Ended September				Six Months Ended September				(In thousands)			Three Months Ended September				Six Months Ended September
Details About Accumulated Other Comprehensive Income (Loss) Components	Details About Accumulated Other Comprehensive Income (Loss) Components	Affected Line Item in the Consolidated Statements of Operations									Details About Accumulated Other Comprehensive Income (Loss) Components	Affected Line Item in the Consolidated Statements of Operations

			2020		2019		2020		2019					2021		2020		2021		2020
Losses on foreign currency translation and other:	Losses on foreign currency translation and other:												Losses on foreign currency translation and other:
Liquidation of foreign entities	Liquidation of foreign entities	Other income (expense), net	$	0	$	0	$	(42,364)	$	0	Liquidation of foreign entities	Other income (expense), net		$	—	$	—	$	—	$	(42,364)
Total before tax	Total before tax		0		0		(42,364)		0		Total before tax			—		—		—		(42,364)
Tax (expense) benefit	Tax (expense) benefit		0		0		0		0		Tax (expense) benefit			—		—		—		—
Net of tax	Net of tax		0		0		(42,364)		0		Net of tax			—		—		—		(42,364)
Amortization of defined benefit pension plans:	Amortization of defined benefit pension plans:										Amortization of defined benefit pension plans:
Net deferred actuarial losses	Net deferred actuarial losses	Other income (expense), net	(2,898)		(4,014)		(5,761)		(8,033)		Net deferred actuarial losses	Other income (expense), net		(2,871)		(2,898)		(5,711)		(5,761)
Deferred prior service (costs) credits		Other income (expense), net	17		(12)		34		(25)
Deferred prior service credits											Deferred prior service credits	Other income (expense), net		117		17		235		34

Pension settlement charges	Pension settlement charges	Other income (expense), net	(572)		(519)		(572)		(519)		Pension settlement charges	Other income (expense), net		(76)		(572)		(1,024)		(572)
Total before tax	Total before tax		(3,453)		(4,545)		(6,299)		(8,577)		Total before tax			(2,830)		(3,453)		(6,500)		(6,299)
Tax benefit	Tax benefit		838		1,507		1,489		2,392		Tax benefit			707		838		1,650		1,489
Net of tax	Net of tax		(2,615)		(3,038)		(4,810)		(6,185)		Net of tax			(2,123)		(2,615)		(4,850)		(4,810)
Gains (losses) on derivative financial instruments:	Gains (losses) on derivative financial instruments:										Gains (losses) on derivative financial instruments:
Foreign exchange contracts	Foreign exchange contracts	Net revenues	2,135		(2,814)		2,306		(5,719)		Foreign exchange contracts	Net revenues		(4,963)		2,135		(6,761)		2,306
Foreign exchange contracts	Foreign exchange contracts	Cost of goods sold	8,443		22,727		25,148		33,832		Foreign exchange contracts	Cost of goods sold		(16,501)		8,443		(22,670)		25,148
Foreign exchange contracts	Foreign exchange contracts	Selling, general and administrative expenses	741		1,382		2,348		2,098		Foreign exchange contracts	Selling, general and administrative expenses		(189)		741		(1,106)		2,348
Foreign exchange contracts	Foreign exchange contracts	Other income (expense), net	33		3,696		1,803		6,568		Foreign exchange contracts	Other income (expense), net		(1,360)		33		(3,062)		1,803
Interest rate contracts	Interest rate contracts	Interest expense	27		(1,303)		54		(2,596)		Interest rate contracts	Interest expense		27		27		54		54
Total before tax	Total before tax		11,379		23,688		31,659		34,183		Total before tax			(22,986)		11,379		(33,545)		31,659
Tax expense			(1,711)		(3,244)		(5,818)		(6,000)
Tax (expense) benefit											Tax (expense) benefit			4,113		(1,711)		4,556		(5,818)
Net of tax	Net of tax		9,668		20,444		25,841		28,183		Net of tax			(18,873)		9,668		(28,989)		25,841
Total reclassifications for the period, net of tax	Total reclassifications for the period, net of tax		$	7,053	$	17,406	$	(21,333)	$	21,998	Total reclassifications for the period, net of tax			$	(20,996)	$	7,053	$	(33,839)	$	(21,333)

19 ~~VF Corporation Q2 FY21 Form 10-Q~~

~~Table of Contents~~

NOTE 12 — STOCK-BASED COMPENSATION

Incentive Equity Awards Granted

During the six months ended September ~~2020,~~2021, VF granted stock options to employees and nonemployee members of VF's Board of Directors to purchase ~~1,683,840~~ 1,495,961 shares of its Common Stock at a weighted average exercise price of ~~$55.75~~$77.79 per share. The exercise price of each option granted was equal to the fair

market value of VF Common Stock on the date of grant. Employee stock options vest in equal annual installments over three years. Stock options granted to nonemployee members of VF's Board of Directors vest upon grant and become exercisable one year from the date of grant. All options have ~~ten-year~~ten-year terms.

The grant date fair value of each option award was calculated using a lattice option-pricing valuation model, which incorporated a range of assumptions for inputs as follows:


						Six Months Ended September ~~2020~~2021
Expected volatility						28% to ~~48%~~41%
Weighted average expected volatility						~~37%~~36%
Expected term (in years)						6.2 to ~~8.0~~7.9
Weighted average dividend yield						~~2.4%~~2.6%
Risk-free interest rate						~~0.1%~~0.04% to ~~0.7%~~1.56%
Weighted average fair value at date of grant						$~~15.78~~20.20

During the ~~three~~six months ended September ~~2020,~~2021, VF granted ~~397,782~~323,718 performance-based restricted stock units ("RSUs") to employees that enable them to receive shares of VF Common Stock at the end of a three-year performance cycle. The fair market value of VF Common Stock at the date the units were granted was $77.78 per share. Each performance-based RSU

has a potential final payout ranging from 0zero to 2 shares of VF Common Stock. The number of shares earned by participants, if any, is based on achievement of three-year financial targets set by the ~~Talent~~Talent and Compensation Committee of the Board of Directors. Shares will be issued to participants in the year following the conclusion of the three-year performance ~~period.~~

VF Corporation Q2 FY22 Form 10-Q ~~The weighted average fair market value~~20

Table of ~~VF Common Stock at the dates the units were granted was $60.11 per share.~~ Contents

period.The financial targets include 50% weighting based on VF's revenue growth over the three-year period compared to a group of industry peers and 50% weighting based on VF's total shareholder return ("TSR") over the three-year period compared to the TSR for companies included in the Standard & Poor's 500 Consumer Discretionary Index. The grant date fair value of the TSR portion of the performance-based RSU grants was determined using a Monte Carlo simulation technique that incorporates option-pricing model inputs, and was ~~$81.60~~$101.56 per share. Additionally, thethe actual number of performance-based RSUs earned may be adjusted upward or downward by 25% of the target award, based on VF's gross margin performance over the three-year period.

~~Also during~~During the six months ended September ~~2020,~~2021, VF granted ~~16,775~~12,023 nonperformance-based RSUs to nonemployee members

of the Board of Directors. These units vest upon grant and will be settled in shares of VF Common Stock one year from the date of

grant. The fair market value of VF Common Stock at the date the units were granted was ~~$55.74~~$77.78 per share.

In addition, VF granted ~~27,000~~345,599 nonperformance-based RSUs to ~~certain key~~ employees ~~in international jurisdictions~~ during the six months ended September ~~2020.~~2021. These units generally vest over periods of up to four years from the date of grant and each unit entitles the holder to 1 share of VF Common Stock. The weighted average fair market value of VF Common Stock at the dates the units were granted was ~~$58.11~~$78.55 per share.

~~In addition,~~ VF also granted ~~267,642 nonperformance-based RSUs to employees during the six months ended September 2020. These awards vest 50% over a~~ ~~two-year period and 50% over a~~ ~~four~~-year period from the date of grant and each unit entitles the holder to 1 share of VF Common Stock. The weighted average fair market value of VF Common Stock at the dates the units were granted was $55.76 per share.

~~VF granted 80,742~~31,214 restricted shares of VF Common Stock to certain members of management during the six months ended September ~~2020.~~2021. These shares vest over periods of up to four years from the date of grant. The ~~weighted average~~ fair market value of VF Common Stock at the ~~dates~~date the shares were granted was ~~$57.17~~$77.78 per share.

NOTE 13 — INCOME TAXES

The effective income tax rate for the six months ended September ~~2020~~2021 was ~~(78.9)%~~13.1% compared to ~~(12.1)~~(78.9)% in the ~~2019~~2020 period. The six months ended September 2021 included a net discrete tax benefit of $0.2 million, which included a $3.4 million net tax expense related to unrecognized tax benefits and interest, a $1.4 million tax benefit related to stock compensation, and a $2.4 millionnet tax benefit related to tax rate change on deferred tax items. The $0.2 million net discrete tax benefit in the 2021 period had an insignificant impact on the effective income tax rate. The six months ended September 2020 included a net discrete tax expense of $3.9 million, which included a $2.0 million net tax expense related to unrecognized tax benefits and interest and a $1.8 million tax expense related to withholding taxes on prior foreign earnings. Excluding the $3.9 million net discrete tax expense in the 2020 period, the effective income tax rate would have been (58.9)%. The six months ended September 2019 included a net discrete tax benefit of $177.4 million, which included a $6.4 million tax benefit related to stock compensation, a $6.9 million net tax benefit related to

unrecognized tax benefits and interest and a $164.4 million tax benefit related to the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Act"). Excluding the $177.4 million net discrete tax benefit in the 2019 period, the effective income tax rate would have been 16.7%. Without discrete items, the effective income tax rate for the six months ended September ~~2020 decreased~~2021 increased by ~~75.6%~~72.0% compared with the ~~2019~~2020 period primarily due to losses generated in the ~~current~~prior year.

VF files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. In the U.S., the Internal Revenue

~~VF Corporation Q2 FY21 Form 10-Q~~ 20

~~Table of Contents~~

Service ("IRS") examinations for tax years ~~through~~through 2015 have been effectively settled. The examination of Timberland’s 2011 tax return is ongoing.

In addition, VF is currently subject to examination by various state and international tax authorities. Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded that VF’s provision for income taxes is adequate. The outcome of any one examination is not expected to have a material impact

on VF’s consolidated financial statements. Management believes that some of these audits and negotiations will conclude during the next 12 months.

VF was granted a ruling which lowered the effective income tax rate on taxable earnings for years 2010 through 2014 under Belgium’s excess profit tax regime. ~~In February~~During 2015, the European Union Commission (“EU”) ~~opened a state aid investigation into Belgium’s rulings. On January 11, 2016, the EU~~investigated and announced its decision that these rulings were illegal and ordered ~~that~~the tax benefits ~~granted under these rulings should~~to be collected from ~~the~~ affected companies, including VF.

~~On March 22, 2016, the~~ Requests for annulment were filed by Belgium ~~government filed an appeal seeking annulment of the EU decision. Additionally, on June 21, 2016,~~and VF Europe BVBA ~~filed its own application for annulment of the EU decision.~~

~~On December 22, 2016, Belgium adopted a law which entitled the Belgium tax authorities to issue tax assessments,~~individually. During 2017 and ~~demand~~

~~timely payments from companies which benefited from the excess profits regime. On January 10, 2017,~~2018, VF Europe BVBA ~~received an assessment for €31.9~~was assessed and paid €35.0 million tax and interest, ~~related to excess profits benefits received in prior years. VF Europe BVBA remitted €31.9 million ($33.9 million) on January 13, 2017,~~ which was recorded as an income tax receivable ~~in 2017~~ based on the expected success of the ~~aforementioned~~ requests for annulment. ~~An additional assessment of €3.1 million ($3.8 million) was received and paid in January 2018. On February 14,~~During 2019, the General Court annulled the EU decision and ~~on April 26, 2019~~ the EU subsequently appealed the General Court’s annulment. ~~Both listed requests for annulment remain~~In September 2021, the General Court's judgment was set aside by the Court of Justice of the EU and the case was sent back to the General Court to determine whether the excess profit tax regime amounted to illegal State aid. The case remains open and unresolved. ~~Additionally, the EU has initiated proceedings related to individual rulings granted by Belgium, including the ruling granted to VF.~~ If this matter is adversely resolved, these amounts will not be collected by VF.

During the six months ended September ~~2020,~~2021, the amount of net unrecognized tax benefits and associated interest increased by ~~$3.7~~$8.9 million to ~~$168.8~~$199.1 million. Management believes that it is reasonably possible that the amount of unrecognized income tax benefits and interest may decrease during the next 12 months by approximately ~~$16.2~~$34.5 million related to the completion of examinations and other settlements with tax authorities and the expiration of statutes of limitations, of which ~~$8.8~~$10.4 million would reduce income tax expense.

NOTE 14 — REPORTABLE SEGMENT INFORMATION

The chief operating decision maker allocates resources and assesses performance based on a global brand view which represents VF's operating segments. The operating segments have been evaluated and combined into reportable segments because they meet the similar economic characteristics and qualitative aggregation criteria set forth in the relevant accounting guidance.

The Company's reportable segments have been identified as: Outdoor, Active and Work. We have included an Other category in the table below for purposes of reconciliation of revenues and profit, ~~(loss),~~ but it is not considered a reportable segment. Other includes results primarily related to the sale of non-VF ~~products. Financial information for VF's reportable segments was as follows:~~

Three Months Ended September Six Months Ended September
(In thousands) 2020 2019 2020 2019
Segment revenues:
Outdoor $ 1,154,407 $ 1,525,937 $ 1,495,635 $ 2,136,557
Active 1,200,202 1,413,634 1,771,518 2,645,760
Work 253,551 222,117 415,981 423,763
Other 164 18,070 1,483 24,332
Total segment revenues $ 2,608,324 $ 3,179,758 $ 3,684,617 $ 5,230,412
Segment profit (loss):
Outdoor $ 132,475 $ 256,382 $ (28,236) $ 176,112
Active 259,123 388,200 266,259 695,766
Work 8,173 14,547 (3,228) 30,018
Other (2,526) 2,381 (4,887) 765
Total segment profit 397,245 661,510 229,908 902,661
Corporate and other expenses (a)
(72,653) (114,719) (190,312) (254,351)
Interest expense, net (30,931) (16,386) (58,880) (31,969)
Income (loss) from continuing operations before income taxes $ 293,661 $ 530,405 $ (19,284) $ 616,341

~~(a)Certain corporate overhead~~products and ~~other costs of $6.2 million and $12.3 million for the three and six-month period ended September 2019, respectively, previously allocated~~sourcing activities related to ~~the Work segment have been reallocated to continuing operations.~~transition services.

21 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

Table of Contents

Financial information for VF's reportable segments is as follows:


	Three Months Ended September				Six Months Ended September

(In thousands)	2021		2020		2021		2020
Segment revenues:
Outdoor	$	1,506,621	$	1,154,407	$	2,124,375	$	1,495,635
Active	1,392,173		1,200,202		2,694,241		1,771,518
Work	299,163		253,551		573,898		415,981
Other	278		164		278		1,483
Total segment revenues	$	3,198,235	$	2,608,324	$	5,392,792	$	3,684,617
Segment profit (loss):
Outdoor	$	284,076	$	132,475	$	212,329	$	(28,236)
Active	284,349		259,123		555,211		266,259
Work	61,973		8,173		102,977		(3,228)
Other	(370)		(2,526)		(652)		(4,887)
Total segment profit	630,028		397,245		869,865		229,908

Corporate and other expenses	(63,993)		(72,653)		(91,905)		(190,312)
Interest expense, net	(34,370)		(30,931)		(67,145)		(58,880)
Income (loss) from continuing operations before income taxes	$	531,665	$	293,661	$	710,815	$	(19,284)

NOTE 15 — EARNINGS PER SHARE


		Three Months Ended September				Six Months Ended September					Three Months Ended September				Six Months Ended September

(In thousands, except per share amounts)	(In thousands, except per share amounts)	2020		2019		2020		2019		(In thousands, except per share amounts)	2021		2020		2021		2020
Earnings (loss) per share – basic:	Earnings (loss) per share – basic:									Earnings (loss) per share – basic:
Income (loss) from continuing operations	Income (loss) from continuing operations	$	243,246	$	625,377	$	(34,496)	$	690,650	Income (loss) from continuing operations	$	464,053	$	243,246	$	618,025	$	(34,496)
Weighted average common shares outstanding	Weighted average common shares outstanding	389,219		397,751		388,957		397,239		Weighted average common shares outstanding	391,779		389,219		391,565		388,957
Earnings (loss) per share from continuing operations	Earnings (loss) per share from continuing operations	$	0.62	$	1.57	$	(0.09)	$	1.74	Earnings (loss) per share from continuing operations	$	1.18	$	0.62	$	1.58	$	(0.09)
Earnings (loss) per share – diluted:	Earnings (loss) per share – diluted:									Earnings (loss) per share – diluted:
Income (loss) from continuing operations	Income (loss) from continuing operations	$	243,246	$	625,377	$	(34,496)	$	690,650	Income (loss) from continuing operations	$	464,053	$	243,246	$	618,025	$	(34,496)
Weighted average common shares outstanding	Weighted average common shares outstanding	389,219		397,751		388,957		397,239		Weighted average common shares outstanding	391,779		389,219		391,565		388,957
Incremental shares from stock options and other dilutive securities	Incremental shares from stock options and other dilutive securities	1,961		4,510		2,029		4,849		Incremental shares from stock options and other dilutive securities	2,238		1,961		2,507		2,029
Adjusted weighted average common shares outstanding	Adjusted weighted average common shares outstanding	391,180		402,261		390,986		402,088		Adjusted weighted average common shares outstanding	394,017		391,180		394,072		390,986
Earnings (loss) per share from continuing operations	Earnings (loss) per share from continuing operations	$	0.62	$	1.55	$	(0.09)	$	1.72	Earnings (loss) per share from continuing operations	$	1.18	$	0.62	$	1.57	$	(0.09)

Outstanding options to purchase approximately 2.8 million shares were excluded from the calculations of diluted earnings per share for both the three and six-month periods ended September 2021, and outstanding options to purchase approximately 5.4 million shares were excluded from the calculations of diluted earnings per share for both the three and six-month periods ended September 2020, ~~and outstanding options to purchase approximately 1.5~~because the effect of their inclusion would have been anti-dilutive.

In addition, 0.6 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for both the three and six-month periods ended September ~~2019, because the effect of their inclusion would have been anti-dilutive.~~

~~In addition,~~2021, and 0.8 million and0.6 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for the three and six-month periods ended September 2020, respectively, ~~and 0.8 million shares of performance-based RSUs were excluded from the calculations of diluted earnings per share for both the three and six-month periods ended September 2019,~~ because these units were not considered to be contingent outstanding shares in those periods.

VF Corporation Q2 FY22 Form 10-Q 22

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NOTE 16 — 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. These inputs would normally be VF’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

~~VF Corporation Q2 FY21 Form 10-Q~~ 22

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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 Fair Value		Fair Value Measurement Using (a)							Total Fair Value		Fair Value Measurement Using (a)
(In thousands)	(In thousands)			Level 1		Level 2		Level 3		(In thousands)			Level 1		Level 2		Level 3
September 2020
September 2021										September 2021
Financial assets:	Financial assets:									Financial assets:
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	948,543	$	948,543	$	0	$	0	Money market funds	$	224,728	$	224,728	$	—	$	—
Time deposits	Time deposits	11,872		11,872		0		0		Time deposits	2,626		2,626		—		—
Short-term investments:
Managed income fund		600,000		600,000		0		0
Time deposits		200,000		200,000		0		0

Derivative financial instruments	Derivative financial instruments	33,176		0		33,176		0		Derivative financial instruments	35,828		—		35,828		—
Deferred compensation	Deferred compensation	122,956		122,956		0		0		Deferred compensation	132,985		132,985		—		—
Financial liabilities:	Financial liabilities:									Financial liabilities:
Derivative financial instruments	Derivative financial instruments	32,318		0		32,318		0		Derivative financial instruments	33,723		—		33,723		—
Deferred compensation	Deferred compensation	132,094		0		132,094		0		Deferred compensation	140,711		—		140,711		—
Contingent consideration										Contingent consideration	99,000		—		—		99,000
		Total Fair Value		Fair Value Measurement Using (a)							Total Fair Value		Fair Value Measurement Using (a)
(In thousands)	(In thousands)			Level 1		Level 2		Level 3		(In thousands)			Level 1		Level 2		Level 3
March 2020
March 2021										March 2021
Financial assets:	Financial assets:									Financial assets:
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	1,211,887	$	1,211,887	$	0	$	0	Money market funds	$	216,591	$	216,591	$	—	$	—
Time deposits	Time deposits	1,932		1,932		0		0		Time deposits	102,914		102,914		—		—
Short-term investments										Short-term investments	598,806		598,806		—		—
Derivative financial instruments	Derivative financial instruments	91,834		0		91,834		0		Derivative financial instruments	13,257		—		13,257		—
Deferred compensation	Deferred compensation	105,706		105,706		0		0		Deferred compensation	141,072		141,072		—		—
Financial liabilities:	Financial liabilities:									Financial liabilities:
Derivative financial instruments	Derivative financial instruments	14,531		0		14,531		0		Derivative financial instruments	74,255		—		74,255		—
Deferred compensation	Deferred compensation	113,289		0		113,289		0		Deferred compensation	150,713		—		150,713		—
Contingent consideration										Contingent consideration	207,000		—		—		207,000

(a)There were no transfers among the levels within the fair value hierarchy during the six months ended September ~~2020~~2021 or the year ended March ~~2020.~~2021.

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The following table presents the changes in fair value of the contingent consideration liability designated as Level 3:


(In thousands)	Three Months Ended September 2021		Six Months Ended September 2021
Beginning Balance	$	134,000	$	207,000

Change in fair value	(35,000)		(108,000)
Ending Balance	$	99,000	$	99,000

VF’s cash equivalents include money market funds and time deposits with maturities within three months of their purchase dates, that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign exchange forward contracts, is determined based on observable market inputs (Level 2), including spot and forward exchange rates for foreign currencies, and considers the credit risk of the Company and its counterparties. VF's short-term investments include excess cash invested in a managed income fund, and time deposits with maturities greater than three months but less than one year from their purchase dates, that approximate fair value based on Level 1 measurements. VF’s deferred compensation assets primarily represent investments held within plan trusts as an economic hedge of the related deferred compensation liabilities. These investments primarily include mutual funds (Level 1) that are valued based on quoted prices in active markets. Liabilities

related to VF’s deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments. VF's short-term investments at March 2021 included excess cash invested in a managed income fund that approximated fair value based on Level 1 measurements.

The contingent consideration liability represents the estimated amount of additional cash consideration to be paid to the selling shareholders of Supreme, which is dependent upon the achievement of certain financial targets over the one-year earn-out period ending January 31, 2022. The estimated fair value of the contingent consideration liability, which could range from

zero to $300.0 million, was $207.0 million as of March 2021. The contingent consideration liability is remeasured at fair value with changes recognized in the selling, general and administrative expenses line item in the Consolidated Statements of Operations. As of September 2021, the fair value of the contingent consideration liability was remeasured to an estimated fair value of $99.0 million based on the probability-weighted present value of various future cash payment outcomes resulting from the estimated achievement levels of the financial targets. Refer to Note 4 for additional information on the acquisition of Supreme.

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 September ~~2020~~2021 and March ~~2020,~~2021, their carrying values approximated fair value. Additionally, at September ~~2020~~2021 and March ~~2020,~~2021, the carrying values of VF’s long-term debt, including the current portion, were ~~$5,680.6~~$5,683.8 million and ~~$2,609.3~~$5,710.2 million, respectively, compared with fair values of ~~$6,092.7~~ $5,996.9 million and ~~$2,672.9~~$6,017.3 million at those respective dates. Fair value for long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.

23 ~~VF Corporation Q2 FY21 Form 10-Q~~

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NOTE 17 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Summary of Derivative Financial Instruments

All of VF’s outstanding derivative financial instruments are foreign exchange forward contracts. Although derivatives meet the criteria for hedge accounting at the inception of the hedging relationship, a limited number of derivative contracts intended to hedge assets and liabilities are not designated as hedges for accounting purposes. The notional amounts of all outstanding ~~derivative contracts were $2.5 billion at September 2020~~,

~~$2.6~~derivative contracts were $2.5 billion at~~March 2020 and $2.8 billion~~ at September ~~2019,~~2021, March 2021 and September 2020, consisting primarily of contracts hedging exposures to the euro, British pound, Canadian dollar, Swiss franc, Mexican peso, Swedish krona, South Korean won, ~~Swedish krona,~~Polish zloty, Japanese yen ~~Polish zloty~~ and New Zealand dollar. Derivative contracts have maturities up to 20 months.

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							Fair Value of Derivatives with Unrealized Gains						Fair Value of Derivatives with Unrealized Losses

(In thousands)	(In thousands)	September 2020		March 2020		September 2019		September 2020		March 2020		September 2019		(In thousands)	September 2021		March 2021		September 2020		September 2021		March 2021		September 2020
Foreign currency exchange contracts designated as hedging instruments	Foreign currency exchange contracts designated as hedging instruments	$	28,676	$	78,298	$	82,756	$	(31,157)	$	(12,682)	$	(10,944)	Foreign currency exchange contracts designated as hedging instruments	$	35,674	$	12,301	$	28,676	$	(32,853)	$	(73,087)	$	(31,157)
Foreign currency exchange contracts not designated as hedging instruments	Foreign currency exchange contracts not designated as hedging instruments	4,500		13,536		7,706		(1,161)		(1,849)		(1,408)		Foreign currency exchange contracts not designated as hedging instruments	154		956		4,500		(870)		(1,168)		(1,161)
Total derivatives	Total derivatives	$	33,176	$	91,834	$	90,462	$	(32,318)	$	(14,531)	$	(12,352)	Total derivatives	$	35,828	$	13,257	$	33,176	$	(33,723)	$	(74,255)	$	(32,318)

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


		September 2020				March 2020				September 2019					September 2021				March 2021				September 2020

(In thousands)	(In thousands)	Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability		(In thousands)	Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability
Gross amounts presented in the Consolidated Balance Sheets	Gross amounts presented in the Consolidated Balance Sheets	$	33,176	$	(32,318)	$	91,834	$	(14,531)	$	90,462	$	(12,352)	Gross amounts presented in the Consolidated Balance Sheets	$	35,828	$	(33,723)	$	13,257	$	(74,255)	$	33,176	$	(32,318)
Gross amounts not offset in the Consolidated Balance Sheets	Gross amounts not offset in the Consolidated Balance Sheets	(23,491)		23,491		(14,393)		14,393		(12,283)		12,283		Gross amounts not offset in the Consolidated Balance Sheets	(17,201)		17,201		(13,246)		13,246		(23,491)		23,491
Net amounts	Net amounts	$	9,685	$	(8,827)	$	77,441	$	(138)	$	78,179	$	(69)	Net amounts	$	18,627	$	(16,522)	$	11	$	(61,009)	$	9,685	$	(8,827)

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


(In thousands)	(In thousands)	September 2020		March 2020		September 2019		(In thousands)	September 2021		March 2021		September 2020
Other current assets	Other current assets	$	27,615	$	71,784	$	81,279	Other current assets	$	27,903	$	7,440	$	27,615
Accrued liabilities	Accrued liabilities	(22,946)		(11,378)		(10,106)		Accrued liabilities	(31,609)		(66,351)		(22,946)
Other assets	Other assets	5,561		20,050		9,183		Other assets	7,925		5,817		5,561
Other liabilities	Other liabilities	(9,372)		(3,153)		(2,246)		Other liabilities	(2,114)		(7,904)		(9,372)

Cash Flow Hedges

VF uses derivative contracts primarily to hedge a portion of the exchange risk for its forecasted sales, purchases, production costs, operating costs and intercompany royalties. The effects of cash flow hedging included in VF’s Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) are summarized as follows:


(In thousands)	(In thousands)	Gain (Loss) on Derivatives Recognized in OCI Three Months Ended September				Gain (Loss) on Derivatives Recognized in OCI Six Months Ended September				(In thousands)	Gain (Loss) on Derivatives Recognized in OCI Three Months Ended September				Gain (Loss) on Derivatives Recognized in OCI Six Months Ended September

Cash Flow Hedging Relationships	Cash Flow Hedging Relationships	2020		2019		2020		2019		Cash Flow Hedging Relationships	2021		2020		2021		2020
Foreign currency exchange	Foreign currency exchange	$	(39,731)	$	51,396	$	(47,326)	$	66,170	Foreign currency exchange	$	34,361	$	(39,731)	$	29,798	$	(47,326)

~~VF Corporation Q2 FY21 Form 10-Q~~ 24

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(In thousands)	(In thousands)	Gain (Loss) Reclassified from Accumulated OCI into Income Three Months Ended September				Gain (Loss) Reclassified from Accumulated OCI into Income (Loss) Six Months Ended September				(In thousands)	Gain (Loss) Reclassified from Accumulated OCI into Income (Loss) Three Months Ended September				Gain (Loss) Reclassified from Accumulated OCI into Income (Loss) Six Months Ended September

Location of Gain (Loss)	Location of Gain (Loss)	2020		2019		2020		2019		Location of Gain (Loss)	2021		2020			2021		2020
Net revenues	Net revenues	$	2,135	$	(2,814)	$	2,306	$	(5,719)	Net revenues	$	(4,963)	$	2,135		$	(6,761)	$	2,306
Cost of goods sold	Cost of goods sold	8,443		22,727		25,148		33,832		Cost of goods sold	(16,501)		8,443			(22,670)		25,148
Selling, general and administrative expenses	Selling, general and administrative expenses	741		1,382		2,348		2,098		Selling, general and administrative expenses	(189)		741			(1,106)		2,348
Other income (expense), net	Other income (expense), net	33		3,696		1,803		6,568		Other income (expense), net	(1,360)		33			(3,062)		1,803
Interest expense	Interest expense	27		(1,303)		54		(2,596)		Interest expense	27		27			54		54
Total	Total	$	11,379	$	23,688	$	31,659	$	34,183	Total	$	(22,986)	$	11,379		$	(33,545)	$	31,659

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 losses or gains on the related assets and liabilities. In the case of derivative contracts executed on foreign currency exposures that

are no longer probable of occurring, VF de-designates these hedges and the fair value changes of these instruments are also recognized directly in earnings. ~~Certain~~

The impact of de-designated derivative contracts ~~were de-designated as the hedged forecasted transactions were no longer deemed probable of occurring primarily as a result of the COVID-19 pandemic~~ and actions expected to be taken by the Company. Accordingly, the Company reclassified amounts from accumulated OCI and recognized a $1.3 million net loss and a $3.7 million net gain during the three and six months ended September 2020, respectively, which were primarily recorded in cost of goods sold.

~~The~~ changes in the fair value of derivative contracts not designated as hedges, ~~that have been~~ recognized as gains or losses in VF's Consolidated Statements of Operations were not material for the three and six months ended September ~~2020~~2021 and September ~~2019.~~2020.

Other Derivative Information

At September ~~2020,~~2021, accumulated OCI included ~~$8.0~~$20.9 million of pre-tax net deferred ~~gains~~losses for foreign currency exchange contracts that are expected to be reclassified to earnings during the next 12 months. The amounts ultimately reclassified to

25 VF Corporation Q2 FY22 Form 10-Q

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earnings will depend on exchange rates in effect when outstanding derivative contracts are settled.

Net Investment Hedge

The Company has designated its ~~€1.850 billion of~~ euro-denominated fixed-rate notes, which represent €1.850 billion in aggregate principal, as a net investment hedge of VF’s investment in certain foreign operations. Because this debt qualified as a nonderivative hedging instrument, foreign currency transaction gains or losses of the debt are deferred in the foreign currency translation and

other component of accumulated OCI as an offset to the foreign currency translation adjustments on the hedged investments. During the three and six-month periods ended September ~~2020,~~2021, the Company recognized an after-tax ~~loss~~gain of ~~$53.5~~$34.1 million and ~~$71.6~~$22.6 million, respectively, in OCI related to the net investment hedge transaction, and an after-tax ~~gain~~loss of ~~$26.3~~$53.5 million and ~~$17.6~~$71.6 million for the three and ~~six-month~~six-month periods ended September ~~2019,~~2020, respectively. Any amounts deferred in accumulated OCI will remain until the hedged investment is sold or substantially liquidated.

NOTE 18 — RESTRUCTURING

The Company ~~typically~~ incurs restructuring charges related to strategic initiatives and cost optimization of business activities, primarily related to severance and employee-related benefits. During the three and six months ended September ~~2020,~~2021, VF recognized ~~$23.4~~$3.5 million and ~~$45.8~~$7.8 million, respectively, of restructuring charges, ~~respectively,~~ related to approved initiatives. Of the restructuring charges recognized in the three and six months ended September ~~2020, $20.2~~2021, $3.4 million and ~~$28.7~~$6.3 million were reflected in selling, general and administrative expenses, respectively, and ~~$3.2~~$0.1 million and ~~$17.1~~$1.5 million in cost of goods sold, respectively.

~~sold, respectively.~~ The Company has not recognized any significant incremental costs related to accruals for the year ended March ~~2020~~2021 or prior periods.

Of the ~~$47.3~~$43.3 million total restructuring accrual at September ~~2020, $45.0~~2021, $43.0 million is expected to be paid out within the next 12 months and is classified within accrued liabilities. The remaining ~~$2.3~~$0.3 million will be paid out beyond the next 12 months and thus is classified within other liabilities.

25 ~~VF Corporation Q2 FY21 Form 10-Q~~

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The components of the restructuring charges are as follows:


		Three Months Ended September				Six Months Ended September					Three Months Ended September				Six Months Ended September

(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020		2021		2020
Severance and employee-related benefits	Severance and employee-related benefits	$	9,883	$	1,033	$	28,392	$	3,257	Severance and employee-related benefits	$	1,422	$	9,883	$	4,296	$	28,392
Asset impairments	Asset impairments	10,557		0		10,557		0		Asset impairments	—		10,557		—		10,557
Accelerated depreciation	Accelerated depreciation	2,857		0		6,664		0		Accelerated depreciation	2,036		2,857		3,467		6,664

Contract termination and other	Contract termination and other	76		0		217		2,121		Contract termination and other	—		76		—		217
Total restructuring charges	Total restructuring charges	$	23,373	$	1,033	$	45,830	$	5,378	Total restructuring charges	$	3,458	$	23,373	$	7,763	$	45,830

Restructuring costs by business segment are as follows:


		Three Months Ended September				Six Months Ended September					Three Months Ended September				Six Months Ended September

(In thousands)	(In thousands)	2020		2019		2020		2019		(In thousands)	2021		2020		2021		2020
Outdoor	Outdoor	$	1,845	$	515	$	6,595	$	4,730	Outdoor	$	454	$	1,845	$	2,677	$	6,595
Active	Active	293		447		663		467		Active	276		293		1,008		663
Work	Work	18,378		71		18,807		181		Work	788		18,378		788		18,807
Corporate and other		2,857		0		19,765		0
Other										Other	1,940		2,857		3,290		19,765
Total	Total	$	23,373	$	1,033	$	45,830	$	5,378	Total	$	3,458	$	23,373	$	7,763	$	45,830

The activity in the restructuring accrual for the six-month period ended September ~~2020~~2021 was as follows:


(In thousands)	(In thousands)	Severance		Other		Total		(In thousands)	Severance		Other		Total
Accrual at March 2020		$	38,052	$	2,888	$	40,940
Accrual at March 2021								Accrual at March 2021	$	59,810	$	6,944	$	66,754
Charges	Charges	28,392		217		28,609		Charges	4,296		—		4,296
Cash payments		(20,490)		(1,368)		(21,858)
Cash payments and settlements								Cash payments and settlements	(23,961)		(3,666)		(27,627)
Adjustments to accruals	Adjustments to accruals	(50)		189		139		Adjustments to accruals	2		(40)		(38)
Impact of foreign currency	Impact of foreign currency	(561)		76		(485)		Impact of foreign currency	(66)		(50)		(116)
Accrual at September 2020		$	45,343	$	2,002	$	47,345
Accrual at September 2021								Accrual at September 2021	$	40,081	$	3,188	$	43,269

VF Corporation Q2 FY22 Form 10-Q 26

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NOTE 19 — CONTINGENCIES

The Company petitioned the U.S. Tax Court to resolve an IRS dispute regarding the timing of income inclusion associated with the 2011 Timberland acquisition. The Company remains confident in our timing and treatment of the income inclusion, and therefore this matter is not reflected in our consolidated financial statements. We are vigorously defending our position, and do not expect the resolution to have a material adverse impact on the Company's financial position, results of operations or cash flows. While the IRS argues immediate income inclusion, the Company's position is to include the income over a period of years. As the matter relates to 2011, nearly half of the timing at dispute has passed with the Company including the income, and paying the related tax, on our income tax returns. The Company

notes that should the IRS prevail in this timing matter, the net interest expense would be up to ~~$170~~$191.4 million. Further, this timing matter is impacted by the Tax Cuts and Jobs Act that reduced the U.S. corporate income tax rate from 35% to 21%. If the IRS is successful, this rate differential would increase tax expense by approximately ~~$136~~$136.3 million.

The Company is currently involved in other legal proceedings that are ordinary, routine litigation incidental to the business. The resolution of any particular proceeding is not currently expected to have a material adverse impact on the Company's financial position, results of operations or cash flows.

NOTE 20 — SUBSEQUENT ~~EVENTS~~EVENT

On October ~~13, 2020,~~19, 2021, VF’s Board of Directors declared a quarterly cash dividend of ~~$0.49~~$0.50 per share, payable on December ~~21, 2020~~20, 2021 to stockholders of record on December 10, ~~2020.~~2021.

27VF Corporation Q2 ~~FY21~~FY22 Form 10-Q26

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ITEM 2 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

All per share amounts are presented on a diluted basis and all percentages shown in the tables below and the following discussion have been calculated using unrounded numbers. ~~All references~~

References to the three and six months ended September 2021 foreign currency amounts below reflect the changes in foreign ~~currency~~ exchange rates from the ~~same period in 2019~~three and six months ended September 2020 and their impact on translating foreign currencies into U.S. dollars. VF’s most significant foreign currency exposure relates to business conducted in euro-based countries. Additionally, VF conducts business in other developed and emerging markets around the world with exposure to foreign currencies other than the euro.

On December 28, 2020, VF acquired 100% of the outstanding shares of Supreme Holdings, Inc. ("Supreme"). The business results for Supreme have been included in the Active segment.

All references to contributions from acquisition below represent the operating results of Supreme for the three and six months ended September 2021. Refer to Note 4 to VF's consolidated financial statements for additional information on the acquisition.

On ~~May 22, 2019,~~June 28, 2021, VF completed the ~~spin-off of its Jeans business, which included the~~ ~~Wrangler~~®, ~~Lee~~® ~~and~~ ~~Rock & Republic~~® ~~brands, as well as the~~ ~~VF Outlet~~TM business, into an independent, publicly traded company now operating under the name Kontoor Brands, Inc. ("Kontoor Brands"). As a result, VF reported the results for the Jeans business and the related cash flows as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows,

~~respectively. These changes have been applied to all periods presented.~~

~~On January 21, 2020, VF announced its decision to explore the divestiture~~sale of its Occupational Workwear business. The Occupational Workwear business iswas comprised primarily of the following brands and businesses: Red Kap®, VF Solutions®, Bulwark®, Workrite®, Walls®, Terra®, Kodiak®, Work Authority® and Horace Small®. The business also ~~includes~~included the license of certain Dickies® occupational workwear products that have historically been sold through the business-to-business channel. During the three months ended March 2020, the Company determined that the Occupational Workwear business met the held-for-sale and discontinued operations accounting criteria and expects to divest this business during Fiscal 2021. Accordingly, the Company has reported theThe results of the Occupational Workwear business and the related cash flows have been reported as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, ~~respectively.~~respectively, through the date of sale. The related held-for-sale assets and liabilities have been reported as assets and liabilities of discontinued operations in the Consolidated Balance ~~Sheets.~~Sheets, through the date of sale. These changes have been applied to all periods presented.

Refer to Note 5 to VF’s consolidated financial statements for additional information on discontinued operations.

Unless otherwise noted, amounts, percentages and discussion for all periods included below reflect the results of operations and financial condition from VF’s continuing ~~operations.~~

~~Refer to Note 4 to VF’s consolidated financial statements for additional information on discontinued~~ operations.


RECENT DEVELOPMENTS


Impact of COVID-19

As the global impact of the novel coronavirus ("COVID-19") continues, VF remains first and foremost focused on a people-first approach that prioritizes the health and well-being of its employees, customers, trade partners and consumers around the world. To help mitigate the spread of COVID-19 and in response to health advisories and governmental actions and regulations, VF has modified its business practices including the temporary closing of offices and retail stores, instituting travel bans and restrictions and implementing health and safety measures including social distancing and quarantines. VF has also implemented measures that are designed to ensure the health, safety and well-being of associates employed in its distribution, fulfillment and manufacturing centers around the world.

At the beginning of the first quarter of Fiscal 2022, over 95% of VF-operated retail stores were open in North America, with all VF-owned retail stores reopened by the end of the first quarter. In the Europe region, approximately 60% of VF-operated retail stores were closed at the beginning of the first quarter of Fiscal 2022, with all stores reopened by the end of the first quarter. In the Asia-Pacific region, nearly all VF-operated retail stores were open at the beginning of the first quarter of Fiscal 2022; however, approximately 5% reclosed by the end of the first quarter. In comparison, at the beginning of the first quarter of Fiscal 2021, all VF-operated retail stores in North America and in the Europe region were closed. By the end of the first quarter of Fiscal 2021, approximately 75% and 90% of VF-operated retail

stores were open in North America and the Europe region, respectively. In the Asia-Pacific region, approximately 5% of VF-owned retail stores were closed at the beginning of the first quarter of Fiscal 2021, with all opened by the end of the first quarter of Fiscal 2021.

At the beginning of the second quarter of Fiscal 2022, all VF-operated retail stores in North America and in the Europe region were open and remained open during the quarter. In the Asia-Pacific region, approximately 5% of VF-operated retail stores were closed at the beginning of the second quarter of Fiscal 2022 with nearly all stores open at the end of the second quarter. In comparison, at the beginning of the second quarter of Fiscal 2021, approximately 75% of the VF-operated retail stores in North America were open, and over 95% were open at the end of the second quarter of Fiscal 2021. During the second quarter of Fiscal 2021, nearly all of the VF-operated retail stores in the Europe and Asia-Pacific ~~region and Europe remained~~regions were open. In North America, VF continued its phased reopening of retail stores in accordance with guidance from government entities and public health authorities, to allow proper training and preparation of the retail environment. In North America, approximately 75 percent of the VF-operated retail stores were open at the end of the first quarter and over 95 percent were open at the end of the second quarter. Subsequent to the end of the second quarter, additional retail stores reopened and currently all of the VF-operated retail stores in North America are open. VF's wholesale customers in all regions have reopened

~~almost all of their retail stores.~~ VF is continuing to monitor the COVID-19 outbreak globally and will comply with guidance from government entities and public health authorities to prioritize the health and well-being of its employees, customers, trade partners and consumers. As COVID-19 uncertainty continues, retail store reclosures may occur.

Consistent with VF’s long-term strategy, the Company’s digital platform remains a high priority through which its brands stay

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connected with consumer communities while providing experiential content. Prior to the COVID-19 pandemic, consumer spending had started shifting to brand e-commerce sites and other digital platforms, which ~~has~~ accelerated due to changes in the retail landscape resulting from the COVID-19 pandemic.

COVID-19 has also impacted some of VF's suppliers, including third-party manufacturers, logistics providers and other vendors. At this time, the majority of VF's supply chain is operational. Suppliers are complying with local health advisories and governmental restrictions which has resulted in ~~isolated~~ product ~~delays; however,~~delays. The resurgence of COVID-19 lockdowns in key sourcing countries has resulted in additional manufacturing capacity constraints during Fiscal 2022. Additionally, Fiscal 2022 has been impacted by continued port congestion, lengthened transit

times, equipment availability and other logistics challenges. These issues have caused significant product delays, which has resulted in challenges to timely meet customer demand in Fiscal 2022. VF is ~~actively~~ working with its suppliers to minimize ~~disruption.~~disruption and is employing expedited freight as needed. VF's distribution centers are operational in accordance with local government guidelines while maintaining enhanced health and safety protocols.

~~In response to COVID-19, various government programs have been announced to provide financial relief to affected businesses~~

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including the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The CARES Act, among other things, provides employer payroll tax credits for wages paid to employees unable to work during the COVID-19 pandemic and options to defer payroll tax payments. Other foreign government programs available to VF also provide certain payroll tax credits and wage subsidies. The Company recognized $17.3 million and $67.7 million during the three and six months ended September 2020, respectively, as a result of relief from the CARES Act and other governmental packages, which were recorded as a reduction in selling, general and administrative expenses. The Company also intends to defer qualified payroll and other tax payments as permitted by the CARES Act and other governmental packages.

The COVID-19 pandemic is ongoing and dynamic in nature, and has driven global uncertainty and disruption. ~~As a result, COVID-19 had a significant negative impact on the Company's~~

~~business, including the consolidated financial condition, results of operations and cash flows during the three and six months ended September 2020.~~ While we are not able to determine the ultimate length and severity of the COVID-19 pandemic, we expect ongoing disruption to our business. Given our current business operations, assuming no material deterioration as a result of COVID-19, governmental actions and regulations, we expect improvement in our financial performance during the second half of Fiscal 2021 when compared to the first half of Fiscal 2021. Full-year Fiscal 2021 revenue is expected to be at least $9.0 billion, which reflects a decrease of approximately 14% when compared to full-year Fiscal 2020. Additionally, we expect COVID-19 will have a significant negative impact on full-year Fiscal 2021 net income when compared to full-year Fiscal 2020.


Enterprise Protection Strategy

VF has taken a number of actions to advance its Enterprise Protection Strategy in response to the COVID-19 pandemic.

On April 23, 2020, VF closed its sale of senior unsecured notes, which provided net proceeds to the Company of approximately $2.97 billion. A portion of the net proceeds was used to repay borrowings under the Company's senior unsecured revolving credit facility (the "Global Credit Facility") and the remaining net proceeds will be used for general corporate purposes. At September ~~2020,~~2021, VF had approximately ~~$2.7~~$1.4 billion of cash and ~~equivalents and short-term investments and~~equivalents. Additionally, VF had approximately ~~$2.2~~$2.2 billion available for borrowing against ~~the~~its Global Credit Facility, subject to certain restrictions including a $750.0 million minimum liquidity requirement.

~~Other actions~~Actions VF has taken to support its business in response to the COVID-19 pandemic ~~include~~included the Company's decision to temporarily pause its share repurchase ~~program.~~program on April 7, 2020. The Company recently decided to reinstate the program and currently has $2.8 billion remaining under its ~~current~~ share repurchase authorization. The Company paid a cash ~~dividend~~dividends of ~~$0.48~~$0.49 per share and ~~$0.96~~$0.98 per share during the three and six months ended September ~~2020,~~2021, respectively, and has declared a cash dividend of ~~$0.49~~$0.50 per share that is payable in the third quarter of Fiscal ~~2021.~~2022. Subject to approval by its Board of Directors, VF intends to continue to pay its regularly scheduled ~~dividend and is not contemplating the suspension of its dividend at this time. VF's planned divestiture of the Occupational Workwear business would provide an additional source of cash.~~dividend.

~~VF has implemented cost controls to reduce discretionary spending to help mitigate the loss of sales and to conserve cash while continuing to support employees.~~ The Company has also commenced a multi-year initiative designed to enable our ability to accelerate and advance VF's business model transformation. One of the key objectives of this initiative is to deliver global cost savings over a three-year period that will be used to support the transformation agenda and highest-priority growth drivers. Additionally, VF has assessed its forward inventory purchase commitments to ensure proper matching of supply and demand, which has resulted in an overall reduction in future commitments from comparable periods in the prior year. As VF continues to actively monitor the situation and advance our business model transformation, we may take further actions that affect our operations.

We believe the Company has sufficient liquidity and flexibility to operate and continue to execute our strategy during the disruptions caused by the COVID-19 pandemic and related governmental actions and regulations and health authority advisories, and meet its obligations as they become due. However, due to the uncertainty of the duration and severity of the COVID-19 pandemic, governmental actions in response to the pandemic, and the impact on us and our consumers, customers and suppliers, there is no certainty that the measures we take will be sufficient to mitigate the risks posed by COVID-19. See Part ~~II, "Item~~I, “Item 1A. Risk ~~Factors." below~~Factors” in the Fiscal 2021 Form 10-K for additional discussion.

~~VF Corporation Q2 FY21 Form 10-Q~~ 28

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HIGHLIGHTS OF THE SECOND QUARTER OF FISCAL ~~2021~~2022

•Revenues were ~~down 18%~~up 23% to ~~$2.6~~$3.2 billion compared to the three months ended September ~~2019, primarily due to~~2020, driven by recovery from the negative impact of COVID-19 on the the prior year period, and included a 1%2% favorable impact from foreign currency and a 4% contribution from the Supreme acquisition.

•Outdoor segment revenues increased 31% to $1.5 billion compared to the three months ended September 2020, including a 3% favorable impact from foreign currency.

•Active segment revenues ~~decreased 15%~~increased 16% to ~~$1.2~~$1.4 billion compared to the three months ended September ~~2019,~~2020, including a $99.6 million (8%) contribution from the Supreme acquisition and a 2% favorable impact from foreign currency.

•Work segment revenues increased 18% to $299.2 million compared to the three months ended September 2020, including a 1% favorable impact from foreign currency.

•~~Outdoor segment revenues decreased 24% to $1.2 billion compared to the three months ended September 2019, including a 2% favorable impact from foreign currency.~~

•Direct-to-consumer revenues were ~~down 17%~~up 32% over the ~~2019~~2020 period, including a 1% favorable impact from foreign ~~currency.~~currency and an 11% contribution from the Supreme

acquisition. E-commerce revenues increased ~~44%~~24% in the current period, including a 2% favorable impact from foreign ~~currency.~~currency and a 19% contribution from the Supreme acquisition. Direct-to-consumer revenues accounted for ~~35%~~37% of VF's net revenues for the three months ended September ~~2020.~~2021.

•International revenues ~~decreased 15%~~increased 18% compared to the three months ended September ~~2019,~~2020, including a 3% favorable impact from foreign currency. Greater China (which includes Mainland China, Hong Kong and Taiwan) revenues ~~were up 16%~~increased 9%, including a 2%6% favorable impact from foreign currency. International revenues represented ~~51%~~49% of VF's net revenues for the three months ended September ~~2020.~~2021.

•Gross margin ~~decreased 340~~increased 290 basis points to ~~50.8%~~53.7% compared to the three months ended September ~~2019,~~2020, primarily driven by ~~elevated~~reduced promotional ~~activity and the timing of net foreign currency transaction~~ activity.

•Earnings per share was ~~$0.62~~$1.18 compared to ~~$1.55~~$0.62 in the ~~2019~~2020 period. The ~~decrease~~increase was primarily driven by recovery from the negative impact of COVID-19 on the ~~three months ended September 2020. In addition, the 2019 period included a $0.41 benefit from the enactment~~prior year period.

29 VF Corporation Q2 FY22 Form 10-Q

Table of ~~Switzerland's Federal Act of Tax Reform and AHV Financing ("Swiss Tax Act").~~Contents


ANALYSIS OF RESULTS OF OPERATIONS


Consolidated Statements of Operations

The following table presents a summary of the changes in net revenues for the three and six months ended September ~~2020~~2021 from the comparable periods in ~~2019:~~2020:


(In millions)	(In millions)	Three Months Ended September		Six Months Ended September		(In millions)	Three Months Ended September		Six Months Ended September
Net revenues — 2019		$	3,179.8	$	5,230.4
Net revenues — 2020						Net revenues — 2020	$	2,608.3	$	3,684.6
Organic	Organic	(611.3)		(1,570.4)		Organic	442.7		1,332.2

Acquisition						Acquisition	99.6		245.3

Impact of foreign currency	Impact of foreign currency	39.8		24.6		Impact of foreign currency	47.6		130.7
Net revenues — 2020		$	2,608.3	$	3,684.6
Net revenues — 2021						Net revenues — 2021	$	3,198.2	$	5,392.8

VF reported ~~an 18%~~a 23% and ~~30% decrease~~46% increase in revenues for the three and six months ended September ~~2020,~~2021, respectively, compared to the ~~2019~~2020 periods. The revenue ~~decrease~~increase in both periods was ~~primarily attributable to~~driven by recovery from the negative impact of COVID-19 ~~including~~on demand and distribution channels in the prior year periods, which included temporary closures of VF-operated retail and VF's wholesale customer ~~stores,~~stores. These growth rates have been negatively impacted in the current year by supply chain disruption, including port delays, lengthened transit times, logistics challenges and ~~reduced consumer demand.~~supplier production issues. The ~~decrease~~increase in the three and six months ended September 2021 also included a 1%2% and 3% favorable impact from

foreign currency, respectively, and a $99.6 million (4%) and $245.3 million (6%) contribution from the Supreme acquisition, respectively.

Revenues increased across all regions in the three and six months ended September ~~2020.~~2021. The largest increases were in the United States, Europe and Americas (non-U.S.) regions,

which experienced the most significant negative impact of COVID-19 in the prior year periods.

Revenues ~~decreased~~increased in both our wholesale and direct-to-consumer channels in the three and six months ended September ~~2020. Decreases~~2021. The overall increase in the direct-to-consumer channel ~~for both periods were~~was driven by ~~declines in~~reopenings of our owned retail stores, which ~~were partially offset by significant e-commerce revenue growth~~had temporary closures in the prior year periods due to COVID-19, and the contribution from the Supreme acquisition during the three and six months ended September ~~2020.~~2021. The overall increase in the wholesale channel also reflects recovery from the negative impact of COVID-19 on the prior year periods; however, VF's wholesale business continues to be impacted by the timing of shipments due to supply chain disruption.

Additional details on revenues are provided in the section titled “Information by Reportable Segment.”

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The following table presents the percentage relationships to net revenues for components of the Consolidated Statements of Operations:


		Three Months Ended September				Six Months Ended September					Three Months Ended September				Six Months Ended September

		2020		2019		2020		2019			2021		2020		2021		2020
Gross margin (net revenues less cost of goods sold)	Gross margin (net revenues less cost of goods sold)	50.8	%	54.2	%	51.4	%	55.0	%	Gross margin (net revenues less cost of goods sold)	53.7	%	50.8	%	54.8	%	51.4	%
Selling, general and administrative expenses	Selling, general and administrative expenses	38.5		36.9		49.4		42.7		Selling, general and administrative expenses	36.2		38.5		40.7		49.4

Operating margin	Operating margin	12.3	%	17.3	%	2.0	%	12.3	%	Operating margin	17.5	%	12.3	%	14.1	%	2.0	%

Gross margin ~~decreased~~increased 290 and 340 ~~and 360~~ basis points in the three and six months ended September ~~2020,~~2021, respectively, compared to the ~~2019~~2020 periods. ~~Gross margin~~The increase in both ~~the three and six months ended September 2020~~periods was ~~negatively impacted~~primarily driven by ~~elevated~~higher levels of full-price sales as increased promotional activity was used to clear elevated inventory ~~levels. The comparison for~~levels in the ~~three months ended September 2020 also reflects a~~prior year periods, primarily due to the negative impact ~~from the timing~~ of ~~net foreign currency transaction activity.~~COVID-19. The ~~decrease~~increase in ~~the six months ended September 2020~~gross margin in both periods was partially offset by expedited freight costs, which were a ~~favorable mix shift to higher margin businesses and channels.~~direct result of the supply chain disruption.

Selling, general and administrative expenses as a percentage of total revenues ~~increased~~decreased during both the three and six months ended September ~~2020~~2021 compared to the ~~2019~~2020 periods, primarily reflecting ~~lower~~ leverage of operating expenses due to ~~decreased~~increased revenues ~~as a result of~~compared to the ~~negative impact of COVID-19 and continued investments in direct-to-consumer and digital strategic growth initiatives.~~prior year periods, which were negatively impacted by COVID-19. Selling, general and administrative expenses ~~decreased $168.9~~increased $154.3 million and ~~$411.2~~$374.3 million in the three and six months ended September ~~2020,~~2021, respectively, compared to the ~~2019~~2020 periods, primarily due to cost controls taken in the prior year periods in response to COVID-19

and payroll relief in the prior year periods from the Coronavirus Aid, Relief, and Economic Security Act ("CARES ~~Act~~Act") and other governmental packages. The decrease was also attributable to lower transaction and deal-related costs and lower costs related to the relocation of our global headquarters and certain brands to Denver, Colorado in both the three and six months ended September 2020.

~~Net interest expense increased $14.5~~Company recognized $17.3 million and ~~$26.9~~$67.7 million during the three and six months ended September 2020, respectively, as a result of relief from the CARES Act and other governmental packages. The increase in both periods was also due to continued investments in direct-to-consumer and digital strategic growth initiatives, advertising expenses and higher distribution spending. The increases in the three and six months ended September 2021 were partially offset by a $35.0 million and $108.0 million decrease in the estimated fair value of the contingent consideration liability associated with the Supreme acquisition, which were recognized in the selling, general and administrative expense line item during the three and six months ended September 2021, respectively.

Net interest expense increased $3.4 million and $8.3 million during the three and six months ended September 2021, respectively, compared to the ~~2019~~2020 periods. The increase in net

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interest expense in both the three and six months ended September ~~2020~~2021 was primarily due to additional borrowings of long-term debt, lower invested balances and lower investment interest ~~rates, partially offset by lower interest rates on borrowings.~~ rates. Total outstanding debt averaged ~~$5.5~~$5.9 billion in the six months ended September ~~2020~~2021 and ~~$2.4~~$5.5 billion in the same period in ~~2019,~~2020, with weighted average interest rates of 2.1% ~~and 3.7%, respectively.~~for both periods.

Other income (expense), net ~~decreased $6.4~~increased $2.9 million and ~~$37.3~~decreased $50.1 million during the three and six months ended September ~~2020,~~2021, respectively, compared to the ~~2019~~2020 periods. The ~~decrease~~increase in the three months ended September ~~2020~~2021 was primarily due to lower ~~net foreign currency transaction losses during the period.~~pension benefit costs (excluding service costs). The decrease in the six months ended September ~~2020~~2021 was primarily due to a $42.4 million expense recorded in the three months ended June 2020 related to the release of currency translation amounts associated with the substantial liquidation of foreign entities in certain countries in South America.

and a $2.4 million net tax benefit related to tax rate change on deferred tax items. The $0.2 million net discrete tax benefit in the 2021 period had an insignificant impact on the effective income tax rate. The six months ended September 2020 included a net discrete tax expense of $3.9 million, which included a $2.0 million net tax expense related to the unrecognized tax benefits and interest and a $1.8 million tax expense related to withholding taxes on prior foreign earnings. Excluding the $3.9 million net discrete tax expense in the 2020 period, the effective income tax rate would have been (58.9)%. The six months ended September 2019 included a net discrete tax benefit of $177.4 million, which included a $6.4 million tax benefit related to stock compensation, a $6.9 million net tax benefit related to unrecognized tax benefits and interest and a $164.4 million tax benefit related to the Swiss Tax Act. Excluding the $177.4 million net discrete tax benefit in the 2019 period, the effective income tax rate would have been 16.7%. Without discrete items, the effective income tax rate for the six months ended September ~~2020 decreased~~2021 increased by ~~75.6%~~72.0% compared with the ~~2019~~2020 period primarily due to ~~losses~~losses generated in the ~~current~~prior year.

As a result of the above, income from continuing operations in the three months ended September ~~2020~~2021 was $464.1 million ($1.18 per diluted share) compared to $243.2 million ($0.62 per diluted share) ~~compared to $625.4 million ($1.55 per diluted share)~~ in the ~~2019~~2020 period, and income (loss) from continuing operations in the six months ended September ~~2020~~2021 was $618.0 million ($1.57 per diluted share) compared to $(34.5) million ($(0.09) per diluted share) ~~compared to $690.7 million ($1.72 per diluted share)~~ in the ~~2019~~2020 period. Refer to additional discussion in the “Information by Reportable Segment” section below.

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Information by Reportable Segment

VF's reportable segments are: Outdoor, Active and Work. We have included an Other category in the tables below for purposes of reconciliation of revenues and profit, ~~(loss),~~ but it is not considered a reportable segment. Included in this Other category are results primarily related to the sale of non-VF ~~products.~~products and sourcing activities related to transition services.

Refer to Note 14 to the consolidated financial statements for a summary of results of operations by segment, along with a reconciliation of segment profit ~~(loss)~~ to income ~~(loss)~~ before income taxes.

The following tables present a summary of the changes in segment revenues and profit (loss) in the three and six months ended September ~~2020~~2021 from the comparable periods in ~~2019:~~2020 and revenues by region for our Top 4 brands for the three and six months ended September 2021 and 2020:

Segment Revenues:


		Three Months Ended September											Three Months Ended September
(In millions)	(In millions)	Outdoor		Active		Work		Other		Total		(In millions)	Outdoor		Active		Work		Other		Total
Segment revenues — 2019		$	1,525.9	$	1,413.6	$	222.1	$	18.2	$	3,179.8
Segment revenues — 2020												Segment revenues — 2020	$	1,154.4	$	1,200.2	$	253.6	$	0.1	$	2,608.3
Organic	Organic	(394.6)		(228.7)		30.1		(18.1)		(611.3)		Organic	327.5		73.2		41.9		0.1		442.7
Acquisition												Acquisition	—		99.6		—		—		99.6

Impact of foreign currency												Impact of foreign currency	24.7		19.2		3.7		—		47.6
Segment revenues — 2021												Segment revenues — 2021	$	1,506.6	$	1,392.2	$	299.2	$	0.2	$	3,198.2

													Six Months Ended September
(In millions)												(In millions)	Outdoor		Active		Work		Other		Total
Segment revenues — 2020												Segment revenues — 2020	$	1,495.6	$	1,771.5	$	416.0	$	1.5	$	3,684.6
Organic												Organic	573.9		610.4		149.1		(1.2)		1,332.2
Acquisition												Acquisition	—		245.3		—		—		245.3

Impact of foreign currency	Impact of foreign currency	23.1		15.3		1.4		—		39.8		Impact of foreign currency	54.9		67.0		8.8		—		130.7
Segment revenues — 2020		$	1,154.4	$	1,200.2	$	253.6	$	0.1	$	2,608.3
Segment revenues — 2021												Segment revenues — 2021	$	2,124.4	$	2,694.2	$	573.9	$	0.3	$	5,392.8

Six Months Ended September
(In millions) Outdoor Active Work Other Total
Segment revenues — 2019 $ 2,136.6 $ 2,645.8 $ 423.8 $ 24.2 $ 5,230.4
Organic (660.0) (880.5) (7.2) (22.7) (1,570.4)
Impact of foreign currency 19.0 6.2 (0.6) — 24.6
Segment revenues — 2020 $ 1,495.6 $ 1,771.5 $ 416.0 $ 1.5 $ 3,684.6

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Segment Profit (Loss):


		Three Months Ended September											Three Months Ended September
(In millions)	(In millions)	Outdoor		Active		Work		Other		Total		(In millions)	Outdoor		Active		Work		Other		Total
Segment profit — 2019		$	256.4	$	388.2	$	14.5	$	2.4	$	661.5
Segment profit (loss) — 2020												Segment profit (loss) — 2020	$	132.5	$	259.1	$	8.2	$	(2.6)	$	397.2
Organic	Organic	(128.7)		(133.5)		(6.8)		(5.3)		(274.3)		Organic	145.3		14.0		52.5		2.2		214.0
Acquisition												Acquisition	—		7.3		—		—		7.3

Impact of foreign currency												Impact of foreign currency	6.3		3.9		1.3		—		11.5
Segment profit (loss) — 2021												Segment profit (loss) — 2021	$	284.1	$	284.3	$	62.0	$	(0.4)	$	630.0

													Six Months Ended September
(In millions)												(In millions)	Outdoor		Active		Work		Other		Total
Segment profit (loss) — 2020												Segment profit (loss) — 2020	$	(28.2)	$	266.3	$	(3.2)	$	(5.0)	$	229.9
Organic												Organic	235.4		234.7		104.1		4.4		578.6
Acquisition												Acquisition	—		39.5		—		—		39.5

Impact of foreign currency	Impact of foreign currency	4.8		4.4		0.5		0.3		10.0		Impact of foreign currency	5.1		14.7		2.1		—		21.9
Segment profit (loss) — 2020		$	132.5	$	259.1	$	8.2	$	(2.6)	$	397.2
Segment profit (loss) — 2021												Segment profit (loss) — 2021	$	212.3	$	555.2	$	103.0	$	(0.6)	$	869.9

Six Months Ended September
(In millions) Outdoor Active Work Other Total
Segment profit — 2019 $ 176.1 $ 695.8 $ 30.0 $ 0.8 $ 902.7
Organic (210.6) (433.1) (33.6) (7.2) (684.5)
Impact of foreign currency 6.3 3.6 0.4 1.4 11.7
Segment profit (loss) — 2020 $ (28.2) $ 266.3 $ (3.2) $ (5.0) $ 229.9


Top Brand Revenues:
	Three Months Ended September 2021
(In millions)	Vans®		The North Face®		Timberland® (a)		Dickies®		Total
United States	$	603.3	$	419.2	$	245.6	$	150.5	$	1,418.6
International:
Europe	263.1		307.9		192.8		25.4		789.2
Asia-Pacific	149.9		105.0		69.3		48.1		372.3
Americas (non-U.S.)	74.0		51.6		37.7		6.0		169.3
Global	$	1,090.3	$	883.7	$	545.4	$	230.0	$	2,749.4

	Three Months Ended September 2020
(In millions)	Vans®		The North Face®		Timberland® (a)		Dickies®		Total
United States	$	552.4	$	344.5	$	165.6	$	110.6	$	1,173.1
International:
Europe	239.7		214.2		173.3		30.3		657.5
Asia-Pacific	152.7		80.5		65.6		43.8		342.6
Americas (non-U.S.)	62.9		35.2		27.1		6.1		131.3
Global	$	1,007.7	$	674.4	$	431.6	$	190.8	$	2,304.5

VF Corporation Q2 FY22 Form 10-Q 32

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	Six Months Ended September 2021
(In millions)	Vans®		The North Face®		Timberland® (a)		Dickies®		Total
United States	$	1,159.3	$	590.9	$	369.9	$	305.6	$	2,425.7
International:
Europe	475.0		436.7		267.6		39.6		1,218.9
Asia-Pacific	344.0		156.7		97.3		74.2		672.2
Americas (non-U.S.)	131.9		65.6		60.0		9.9		267.4
Global	$	2,110.2	$	1,249.9	$	794.8	$	429.3	$	4,584.2

	Six Months Ended September 2020
(In millions)	Vans®		The North Face®		Timberland® (a)		Dickies®		Total
United States	$	784.4	$	442.3	$	226.7	$	192.3	$	1,645.7
International:
Europe	325.4		262.2		216.2		43.3		847.1
Asia-Pacific	303.5		120.1		99.6		68.3		591.5
Americas (non-U.S.)	79.9		39.7		35.5		10.8		165.9
Global	$	1,493.2	$	864.3	$	578.0	$	314.7	$	3,250.2

(a)

The global Timberland brand includes Timberland®, reported within the Outdoor segment and Timberland PRO®, reported within the Work segment.

3133 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

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The following sections discuss the changes in revenues and profitability by segment. For purposes of this analysis, royalty revenues have been included in the wholesale channel for all periods.

Outdoor


		Three Months Ended September								Six Months Ended September									Three Months Ended September								Six Months Ended September

(Dollars in millions)	(Dollars in millions)	2020			2019			Percent Change		2020			2019			Percent Change		(Dollars in millions)	2021			2020			Percent Change		2021			2020			Percent Change
Segment revenues	Segment revenues	$	1,154.4		$	1,525.9		(24.3)	%	$	1,495.6		$	2,136.6		(30.0)	%	Segment revenues	$	1,506.6		$	1,154.4		30.5	%	$	2,124.4		$	1,495.6		42.0	%
Segment profit (loss)	Segment profit (loss)	132.5			256.4			(48.3)	%	(28.2)			176.1			(116.0)	%	Segment profit (loss)	284.1			132.5			114.4	%	212.3			(28.2)			*
Operating margin	Operating margin	11.5		%	16.8		%			(1.9)		%	8.2		%			Operating margin	18.9		%	11.5		%			10.0		%	(1.9)		%

*Calculation not meaningful

The Outdoor segment includes the following brands: The North Face®, Timberland®, ~~Icebreaker~~Smartwool®, ~~Smartwool~~Icebreaker® and Altra®.

Global revenues for Outdoor ~~decreased 24%~~increased 31% in the three months ended September ~~2020~~2021 compared to ~~2019,~~2020, including a 2%3% favorable impact due to foreign currency. The ~~decrease~~overall increase in revenues during the period was ~~primarily related to~~driven by recovery from the negative impact of ~~COVID-19.~~COVID-19 on the the prior year period. Revenues in the ~~Americas region decreased 31%~~United States increased 32%. Revenues in the Europe region ~~decreased 20%, including a 4% favorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 5%, including a 2% favorable impact from foreign currency.~~

~~Global revenues for Outdoor decreased~~increased 30% in the six months ended September 2020 compared to the 2019 period, including a 1% favorable impact due to foreign currency. The decrease in revenues during the period was primarily related to the negative impact of COVID-19. Revenues in the Americas region decreased 37%, including a 1% unfavorable impact from foreign currency. Revenues in the Europe region decreased 26%, including a 3% favorable impact from foreign currency. Revenues in the Asia-Pacific region ~~decreased 10%~~increased 17%, including a 1%6% favorable impact from foreign currency. Revenues in the Americas (non-U.S.) region increased 55%, including an 8% favorable impact from foreign currency.

Global revenues for Outdoor increased 42% in the six months ended September 2021 compared to 2020, including a 4% favorable impact due to foreign currency. The overall increase in revenues during the period was driven by recovery from the negative impact of COVID-19 on the the prior year period. Revenues in the United States increased 44%. Revenues in the Europe region increased 47%, including a 6% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 15%, including a 6% favorable impact from foreign currency. Revenues in the Americas (non-U.S.) region increased 72%, including a 12% favorable impact from foreign currency.

Global revenues for The North Face® brand ~~decreased 25%~~increased 31% and ~~30%~~45% in the three and six months ended September ~~2020,~~2021, respectively, compared to the ~~2019~~2020 periods. This includes a 1%2% and 4% favorable impact from foreign currency in the three and six months ended September 2021, respectively. The increases in all regions during the three and six months ended September 2021, were driven by recovery from the negative impact of COVID-19 on demand and distribution channels in the the prior year periods. The overall growth was led by the Europe region, which increased 44% and 67% in the three and six months ended September 2021, respectively, including a 4% and 8% favorable impact from foreign currency, respectively.

Global revenues for the Timberland®brand increased29% and 36% in the three and six months ended September 2021,

respectively, compared to the 2020 periods, including a 2% and 3% favorable impact from foreign currency in the three and six months ended September 2021, respectively. The increase in both periods was driven by recovery from the negative impact on demand and distribution channels in the prior year periods. The overall growth was led by an increase of 63% and 74% in the United States in the three and six months ended September 2021, respectively. The increase in the six months ended September 2021 was partially offset by a 2% decrease in the Asia-Pacific region, including a 5% favorable impact from foreign currency.

Global direct-to-consumer revenues for Outdoor increased 13% and 28% in the three and six months ended September 2021, respectively, compared to the 2020 periods, including a 2% and 5% favorable impact from foreign currency in the three and six months ended September 2021, respectively. The increase in both periods was primarily due to the reopening of VF-operated retail stores, which had significant temporary closures in the prior year periods due to COVID-19. Global wholesale revenues increased 38% and 49% in the three and six months ended September 2021, respectively, compared to the 2020 periods, including a 3% favorable impact from foreign currency in both the three and six months ended September ~~2020.~~2021. The ~~decrease in both periods was primarily due to~~increases reflect recovery from the negative impact of COVID-19 inon the ~~Americas~~prior year periods and ~~Europe regions, partially offset~~strong underlying demand during the current year, which was negatively impacted by ~~e-commerce growth.~~the timing of shipments due to supply chain disruption.

~~Global revenues for the~~ ~~Timberland~~®~~brand decreased27% and 33%~~Operating margin increased in the three and six months ended September ~~2020, respectively,~~2021 compared to the ~~2019~~2020 periods ~~including a 2%~~primarily due to leverage of operating expenses on increased revenues and ~~1% favorable impact from foreign currency in~~reduced promotional activity compared to the ~~three and six months ended September 2020, respectively.~~prior year periods, which were negatively impacted by COVID-19. The ~~decrease~~increase in both periods was ~~primarily due to the negative impact of COVID-19,~~ partially offset by ~~e-commerce growth.~~

Global direct-to-consumer revenues for Outdoor decreased 5% and 17% in the three and six months ended September 2020, respectively, compared to the 2019 periods, including a 2% and 1% favorable impact from foreign currency in the three and six months ended September 2020, respectively. The decrease in both periods was primarily due to the negative impact of COVID-19 and related closures of VF-operated retail stores, partially offset by e-commerce growth across all regions, which increased 52% and 70% in the three and six months ended September 2020, respectively, including a 2% favorable impact from foreign currency in the three months ended September 2020. Global wholesale revenues decreased 30% and 35% in the three and six months ended September 2020, respectively, compared to the 2019 periods, including a 1% favorable impact from foreign currency in both periods. The decrease in both periods was primarily driven by the negative impact of COVID-19.

Operating margin decreased in the three and six months ended September 2020 compared to the 2019 periods reflecting lower leverage of operating expenses due to decreased revenues, elevated promotional activity, negative impact from the timing of net foreign currency transaction activity and continued investments in ~~direct-to-consumer and~~ digital strategic growth initiatives. The decrease in the three and six months ended September 2020 was partially offset by cost controls taken in response to COVID-19 and payroll relief from the CARES Act and other governmental packages. The six months ended September 2019prior year periods also included ~~a gain of approximately $11 million on the sale of office real estate and related assets in connection with the relocation of VF's global headquarters and certain brands to Denver, Colorado.~~

~~VF Corporation Q2 FY21 Form 10-Q~~ 32

~~Table of Contents~~

~~Active~~

Three Months Ended September Six Months Ended September
(Dollars in millions) 2020 2019 Percent
Change 2020 2019 Percent
Change
Segment revenues $ 1,200.2 $ 1,413.6 (15.1) % $ 1,771.5 $ 2,645.8 (33.0) %
Segment profit 259.1 388.2 (33.3) % 266.3 695.8 (61.7) %
Operating margin 21.6 % 27.5 % 15.0 % 26.3 %

~~The Active segment includes the following brands:~~ ~~Vans~~®, ~~Kipling~~®, ~~Napapijri~~®, ~~Eastpak~~®,~~JanSport~~® ~~and~~ ~~Eagle Creek~~®.

Global revenues for Active decreased 15% in the three months ended September 2020, compared to the 2019 period, including a 1% favorable impact from foreign currency. The decrease in revenues during the period was primarily related to the negative impact of COVID-19. Revenues in the Americas region decreased 20%. Revenues in the Europe region decreased 12%, including a 4% favorable impact from foreign currency. Revenues in the Asia-Pacific region were flat, including a 1% favorable impact from foreign currency.

Global revenues for Active decreased 33% in the six months ended September 2020 compared to the 2019 period. The decrease in revenues during the period was primarily related to the negative impact of COVID-19. Revenues in the Americas region decreased 42%. Revenues in the Europe region decreased 27%, including a 2% favorable impact from foreign currency. Revenues in the Asia-Pacific region decreased 4%, with a 1% unfavorable impact from foreign currency.

~~Vans~~® brand global revenues decreased 10% and 30% in the three and six months ended September 2020, respectively, compared to the 2019 periods. This includes a 1% favorable impact from foreign currency in the three months ended September 2020. The decrease in both periods was primarily due to the negative impact of COVID-19 in the Americas and Europe regions, partially offset by e-commerce growth and growth in Greater China.

Global direct-to-consumer revenues for Active decreased 24% and 32% in the three and six months ended September 2020, respectively, compared to the 2019 periods, including a 1% favorable impact from foreign currency in the three months ended September 2020. The decrease in the direct-to-consumer channel in both periods was primarily due to the negative impact of COVID-19 and related closures of VF-operated retail stores, partially offset by e-commerce growth across all regions. E-commerce revenues increased 40% and 56% in the three and six months ended September 2020, respectively, including a 2% favorable impact from foreign currency in the three months ended September 2020. Global wholesale revenues decreased 6% and 34% in the three and six months ended September 2020, respectively, primarily due to the negative impact of COVID-19, and included a 2% favorable impact from foreign currency in the three months ended September 2020.

33VF Corporation Q2 FY22 Form 10-Q 34

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Active


	Three Months Ended September								Six Months Ended September

(Dollars in millions)	2021			2020			Percent Change		2021			2020			Percent Change
Segment revenues	$	1,392.2		$	1,200.2		16.0	%	$	2,694.2		$	1,771.5		52.1	%
Segment profit	284.3			259.1			9.7	%	555.2			266.3			108.5	%
Operating margin	20.4		%	21.6		%			20.6		%	15.0		%

The Active segment includes the following brands: Vans®, Supreme®,Kipling®, Napapijri®, Eastpak®,JanSport®and Eagle Creek®.

Global revenues for Active increased 16% in the three months ended September 2021 compared to the 2020 period, including a 2% favorable impact from foreign currency. Included in these results are revenues from the Supreme acquisition of $99.6 million, which provided an 8% contribution to the overall increase. The overall increase in revenues during the period was driven by recovery from the negative impact of COVID-19 on the the prior year period. Revenues in the United States increased 22%, including an 11% contribution from the Supreme acquisition. Revenues in the Europe region increased 10%, including a 2% favorable impact from foreign currency and a 4% contribution from the Supreme acquisition. Revenues in the Asia-Pacific region increased 9%, driven by a 4% favorable impact from foreign currency and a 12% contribution from the Supreme acquisition. Revenues in the Americas (non-U.S.) region increased 14%, including a 7% favorable impact from foreign currency.

Global revenues for Active increased 52% in the six months ended September 2021 compared to the 2020 period, including a 4% favorable impact from foreign currency. Included in these results are revenues from the Supreme acquisition of $245.3 million, which provided a 14% contribution to the overall increase. The overall increase in revenues during the period was driven by recovery from the negative impact of COVID-19 on the the prior year period. Revenues in the United States increased 66%, including a 19% contribution from the Supreme acquisition. Revenues in the Europe region increased 44%, including a 6% favorable impact from foreign currency and a 7% contribution from the Supreme acquisition. Revenues in the Asia-Pacific region increased 28%, including a 7% favorable impact from foreign currency and a 17% contribution from the Supreme acquisition. Revenues in the Americas (non-U.S.) region increased 59%, including a 12% favorable impact from foreign currency.

Vans® brand global revenues increased 8% and 41% in the three and six months ended September 2021, respectively, compared to the 2020 periods. This includes a 1% and 4% favorable impact from foreign currency in the three and six months ended September 2021, respectively. The increase in both periods was driven by recovery from the negative impact of COVID-19 on demand and distribution channels in the the prior year periods. The overall growth in the three and six months ended September 2021 was led by an increase of 9% and 48% in the United States, respectively, and an increase of 10% and 46% in the Europe

region, respectively, including a 3% and 8% favorable impact from foreign currency in the three and six months ended September 2021, respectively. The increase in the three months ended September 2021 was partially offset by a 2% decrease in the Asia-Pacific region, including a 5% favorable impact from foreign currency.

Global direct-to-consumer revenues for Active increased 47% and 79% in the three and six months ended September 2021, respectively, compared to the 2020 periods, including a 1% and 3% favorable impact from foreign currency in the three and six months ended September 2021, respectively. Excluding revenues from the Supreme acquisition, global direct-to-consumer revenues increased 29% and 51% in the three and six months ended September 2021, respectively, including a 2% and 4% favorable impact from foreign currency in the three and six months ended September 2021, respectively. The increase in both periods was primarily due to the reopening of VF-operated retail stores, which had significant temporary closures in the prior year periods due to COVID-19. Global wholesale revenues decreased 9% and increased 27% in the three and six months ended September 2021, respectively, and included a 1% and 5% favorable impact from foreign currency in the respective periods. Wholesale revenues in the three months ended September 2021 were impacted by the timing of shipments due to supply chain disruption. The increase in the six months ended September 2021 reflects recovery from the negative impact of COVID-19 on the prior year period.

Operating margin decreased in the three months ended September 2021 compared to the 2020 period and increased in the six months ended September 2021. The decrease in the three months ended September 2021 was primarily due to expedited freight costs and continued investments in digital strategic growth initiatives, partially offset by leverage of operating expenses on increased revenues and less promotional activity compared to the prior year period, which was negatively impacted by COVID-19. The increase in the six months ended September 2021 was primarily due to leverage of operating expenses on increased revenues and less promotional activity compared to the prior year period, which was negatively impacted by COVID-19. The increase was partially offset by continued investments in digital strategic growth initiatives. The prior year periods also included cost controls taken in response to COVID-19 and payroll relief from the CARES Act and other governmental packages.

35 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

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Work


		Three Months Ended September								Six Months Ended September									Three Months Ended September								Six Months Ended September

(Dollars in millions)	(Dollars in millions)	2020			2019			Percent Change		2020			2019			Percent Change		(Dollars in millions)	2021			2020			Percent Change		2021			2020			Percent Change
Segment revenues	Segment revenues	$	253.6		$	222.1		14.2	%	$	416.0		$	423.8		(1.8)	%	Segment revenues	$	299.2		$	253.6		18.0	%	$	573.9		$	416.0		38.0	%
Segment profit (loss)	Segment profit (loss)	8.2			14.5			(43.8)	%	(3.2)			30.0			(110.8)	%	Segment profit (loss)	62.0			8.2			*		103.0			(3.2)			*
Operating margin	Operating margin	3.2		%	6.5		%			(0.8)		%	7.1		%			Operating margin	20.7		%	3.2		%			17.9		%	(0.8)		%

*Calculation not meaningful

The Work segment includes the following brands: Dickies® and Timberland PRO®.

Global Work revenues increased ~~14%~~18% in the three months ended September ~~2020~~2021 compared to the ~~2019~~2020 period, ~~driven by broad-based operational strength.~~including a 1% favorable impact from foreign currency. The increase in revenues during the period was attributed to overall growth in both the Dickies® andTimberland PRO® brands. Revenues in the ~~Americas region~~United States increased 9%30%. Revenues in the Europe region decreased 18%, including a 2% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased 10%, including a 5% favorable impact from foreign currency. Revenues in the Americas (non-U.S.) region decreased 5%, including a 5% favorable impact from foreign currency.

Global Work revenues increased 38% in the six months ended September 2021 compared to the 2020 period, including a 2% favorable impact from foreign currency. The increase in revenues during the period was attributed to overall growth in both the Dickies® andTimberland PRO® brands driven by recovery from the negative impact of COVID-19 on demand in the the prior year period. Revenues in the United States increased 55%. Revenues in the Europe region decreased 11%, including a 4% favorable impact from foreign currency. Revenues in the Asia-Pacific region increased ~~48%, including a 3% favorable impact from foreign currency.~~

Global Work revenues decreased 2% in the six months ended September 2020 compared to the 2019 period, primarily due to the negative impact of COVID 19, partially offset by strong operational performance. Revenues in the Americas region decreased 5%. Revenues in the Europe region decreased 9%, including a 2%6% favorable impact from foreign currency. Revenues in the ~~Asia-Pacific~~Americas (non-U.S.) region increased ~~25%.~~22%, including a 10% favorable impact from foreign currency.

Dickies® brand global revenues increased ~~19%~~21% and 2%36% in the three and six months ended September ~~2020,~~2021, respectively, compared to the ~~2019~~2020 periods, including a 1%2% favorable impact from foreign currency ~~in the three months ended September 2020. The increase in the three months ended September 2020 was due to strong operational growth across all channels. The increase~~ in both the three and six months ended September ~~2020 was led by~~2021. The growth ~~in e-commerce and in Greater China.~~

~~Operating margin decreased~~ in the three and six months ended September ~~2020 compared to~~2021 was led by an increase of 36% and 59% in the ~~2019 periods. The decrease~~United States, driven by growth in the wholesale channel and in work-inspired lifestyle products.

Operating margin increased in the three and six months ended September 2021 compared to the 2020 periods. The increase in the three and six months ended September 2021 was primarily ~~attributed~~due to leverage of operating expenses on increased revenues compared to the prior year periods, which were negatively impacted by COVID-19. The increase in both periods was also due to lower cost optimization activity and other charges indirectly related to the strategic review of the Occupational Workwear business in the prior year and ~~certain higher product costs,~~other operating efficiency gains. The increase in both periods was partially offset by continued investments in digital strategic growth initiatives. The prior year periods also included cost controls taken in response to ~~COVID-19.~~COVID-19 and payroll relief from the CARES Act and other governmental packages.


Reconciliation of Segment Profit (Loss) to Income (Loss) Before Income Taxes

There are two types of costs necessary to reconcile total segment profit (loss), as discussed in the preceding paragraphs, to consolidated income (loss) from continuing operations before income taxes. These costs are (i) corporate and other expenses, discussed below, and (ii) interest expense, net, which was discussed in the “Consolidated Statements of Operations” section.

Three Months Ended September Six Months Ended September
(Dollars in millions) 2020 2019 Percent
Change 2020 2019 Percent
Change
Corporate and other expenses $ 72.7 $ 114.7 (36.7) % $ 190.3 $ 254.4 (25.2) %
Interest expense, net 30.9 16.4 88.8 % 58.9 32.0 84.2 %


	Three Months Ended September						Six Months Ended September

(Dollars in millions)	2021		2020		Percent Change		2021		2020		Percent Change

Corporate and other expenses	$	64.0	$	72.7	(11.9)	%	$	91.9	$	190.3	(51.7)	%
Interest expense, net	34.4		30.9		11.1	%	67.1		58.9		14.0	%

Corporate and other expenses are those that have not been allocated to the segments for internal management reporting, including (i) information systems and shared service costs, (ii) corporate headquarters costs, and (iii) certain other income and expenses. The decrease in the three and six months ended September ~~2020~~2021 was primarily attributed to a $35.0 million and $108.0 million decrease in the estimated fair value of the contingent consideration liability associated with the Supreme acquisition in the three and six months ended September 2021, respectively. The decrease was also due to lower charges associated with cost ~~controls to reduce discretionary spending, lower costs~~ optimization and other activities indirectly

related to the ~~relocation~~strategic review of ~~our global headquarters and certain brands to~~

~~Denver, Colorado and timing of expenses. The decrease in~~the Occupational Workwear business. In addition, the six months ended September 2020 ~~was partially offset by~~included a $42.4 million expense ~~recorded in the three months ended June 2020~~ related to the release of currency translation amounts associated with the substantial liquidation of foreign entities in certain countries in South ~~America,~~America. The decrease in the three and ~~increased~~six months ended September 2021 was partially offset by expenses associated with the integration of Supreme and costs related to a transformation initiative for our Asia-Pacific regional operations in the current year, and lower discretionary spending in the prior year due to cost ~~optimization activity indirectly related~~controls in response to ~~the strategic review of the Occupational Workwear business.~~COVID-19.

VF Corporation Q2 ~~FY21~~FY22 Form 10-Q 3436

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International Operations

International revenues ~~decreased 15%~~increased 18% and ~~24%~~37% in the three and six months ended September ~~2020,~~2021, respectively, compared to the ~~2019~~2020 periods ~~primarily due to~~driven by recovery from the negative impact of ~~COVID-19.~~COVID-19 on the the prior year periods, and included a 2% and 5% contribution from the Supreme acquisition in the respective periods. Foreign currency had a favorable impact of 3% and 1%7% on international revenue in the three and six months ended September ~~2020,~~2021, respectively. Revenues in Europe ~~decreased 16%~~increased 19% and ~~26%~~43% in the three and six months ended September ~~2020,~~2021, respectively, including a 4%2% and 3%6% favorable impact from foreign currency in the three and six months ended September ~~2020,~~2021, respectively. In the Asia-Pacific region, revenues increased 2%13% and ~~decreased 4%~~21% in the three and six months ended September ~~2020,~~2021, respectively. Foreign currency had a favorable impact of 2%

5% and 7% on Asia-Pacific revenue ~~growth in the three months~~

~~ended September 2020. Revenues in Greater China increased 16% and 9%~~ in the three and six months ended September ~~2020,~~2021, respectively. Revenues in Greater China increased 9% and 13% in the three and six months ended September 2021, respectively, including a 2%6% and 8% favorable impact from foreign currency in the three and six months ended September ~~2020.~~2021, respectively. Revenues in the Americas (non-U.S.) region ~~decreased 38%~~increased 29% and ~~50%~~59% in the three and six months ended September ~~2020,~~2021, respectively, including ~~the impact of business model changes in the region~~a 7% and ~~a 2% unfavorable~~12% favorable impact from foreign currency in ~~both periods.~~the three and six months ended September 2021, respectively. International revenues were ~~51%~~49% and ~~50%~~51% of total revenues in the three-month periods ended September ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~51%~~48% and ~~47%~~51% of total revenues in th~~e six-month~~the six-month periods ended September 2021 and 2020, ~~and 2019,~~ respectively.


Direct-to-Consumer Operations

Direct-to-consumer revenues ~~decreased 17%~~increased 32% and ~~26%~~57% in the three and six months ended September ~~2020,~~2021, respectively, compared to the ~~2019~~2020 periods, including a 1% and 4% favorable impact from foreign currency in the three and six months ended September ~~2020.~~2021, respectively. The ~~decrease~~three and six months ended September 2021 included an 11% and 17% contribution from the Supreme acquisition, respectively. The increase in direct-to-consumer revenues ~~in both periods~~ was primarily due to the ~~negative impact of COVID-19 and related closures~~reopening of VF-operated retail ~~stores.~~stores, which had significant temporary closures in the prior year periods due to COVID-19. Our e-commerce business grew ~~44%~~24% and ~~60%~~25% in the three and six months ended September ~~2020,~~2021, respectively, including a 2% and 4% favorable impact from foreign currency in the three and six months

ended September ~~2020.~~2021, respectively. The three and six months ended September 2021 included a 19% and 25% contribution from the Supreme acquisition, respectively. Excluding the Supreme acquisition, e-commerce ~~growth~~revenues increased 5% and were flat in ~~both periods occurred across all regions and partially offset the declines in our other direct-to-consumer operations for~~ the three and six months ended September ~~2020.~~2021, respectively,

including a 2% and 3% favorable impact from foreign currency in the three and six months ended September 2021, respectively. The deceleration of e-commerce growth was primarily due to the reopening of VF-operated retail and wholesale customer stores, which had significant temporary closures in the prior year periods due to COVID-19, as consumer spending shifted to VF's brand e-commerce sites and other digital platforms during the temporary store closures. Consistent with VF’s long-term strategy, the Company’s digital platform remains a high priority and e-commerce revenues in the three and six months ended September 2021 remain well above levels in periods prior to COVID-19. There were ~~1,382~~1,358 VF-owned retail stores at September ~~2020~~2021 compared to ~~1,372~~1,382 at September ~~2019.~~2020. Direct-to-consumer revenues were ~~35%~~37% and ~~34%~~35% of total revenues in the three-month periods ended September ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~39%~~42% and ~~37%~~39% of total revenues in the ~~six-month~~six-month periods ended September 2021 and 2020, ~~and 2019,~~ respectively.

3537 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q

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ANALYSIS OF FINANCIAL CONDITION


Consolidated Balance Sheets

The following discussion refers to significant changes in balances at September ~~2020~~2021 compared to March ~~2020:~~2021:

•Increase in accounts receivable — primarily due to the seasonality of ~~the~~the business and increased wholesale shipments.

•Increase in ~~inventories~~inventories — primarily due to the seasonality of the business, partially offset by lower inventory purchases as part of our inventory management to ensure proper matching of supply and demand resulting from reduced consumer demand due to the impact of COVID-19.

•~~Increase in short-term investments~~ ~~— due to new investments of excess cash entered into during Fiscal 2021.~~

•~~Increase in operating lease right-of-use assets~~ ~~— primarily due to the commencement of a new distribution center lease in Europe during Fiscal 2021.~~business.

•Decrease in short-term ~~borrowings~~investments — due to ~~net repayment~~the sale of ~~borrowings under the Global Credit Facility using a portion of the net proceeds from the issuance of senior unsecured fixed-rate notes in April 2020.~~short-term investments.

•Increase in ~~accounts payable~~the current portion of long-term debt — due to the ~~timing~~reclassification of ~~payments to vendors.~~$1.0 billion of long-term notes due in April 2022.

•Increase in accrued liabilities — primarily due to the reclassification of the contingent consideration liability associated with the Supreme acquisition from other liabilities, an increase in ~~current operating lease liabilities~~accrued income taxes and ~~the timing of interest and tax payments during the period.~~higher accruals for freight.

•~~Increase~~Decrease in long-term debt— due to the ~~issuance~~reclassification of ~~$3.0~~$1.0 billion of ~~senior unsecured fixed-rate~~ long-term notes due in April ~~2020.~~2022.

•~~Increase~~Decrease in ~~operating lease~~other liabilities— primarily due to lower deferred income taxes and the ~~commencement~~reclassification of ~~a new distribution center lease in Europe during Fiscal 2021.~~the contingent consideration liability associated with the Supreme acquisition to accrued liabilities.

The following discussion refers to significant changes in balances at September ~~2020~~2021 compared to September ~~2019:~~

2020:

•~~Decrease~~Increase in accounts receivable — primarily due to ~~lower~~higher wholesale shipments ~~resulting~~driven by recovery from the negative impact of ~~COVID-19.~~COVID-19 on the prior year period.

•Decrease ~~in inventories~~ ~~— primarily due to lower inventory purchases as part of our inventory management to ensure proper matching of supply and demand resulting from reduced consumer demand due to the impact of COVID-19.~~

•~~Increase~~ in short-term investments — due to ~~new investments~~the sale and maturity of ~~excess cash entered into during Fiscal 2021.~~short-term investments.

•Increase in ~~property, plant and equipment~~ intangible assets— primarily ~~related~~due to ~~capital spending associated~~the acquired indefinite-lived Supreme® trademark intangible asset of $1.2 billion recorded in connection with the ~~construction of distribution centers and leasehold improvements in VF's new global headquarters in Denver, Colorado.~~acquisition.

•~~Decrease~~Increase in goodwill — primarily due to ~~a $323.2 million goodwill impairment charge related to~~ the ~~Timberland reporting unit~~amounts recorded in connection with the ~~fourth quarter~~Supreme acquisition of ~~Fiscal 2020.~~$1.25 billion.

•Increase in ~~operating lease right-of-use~~other assets — primarily due to ~~new~~amounts recorded in connection with the Supreme acquisition, higher deferred software costs and ~~renewed retail store leases and a new distribution center lease~~an increase in ~~Europe that commenced during Fiscal 2021.~~net pension assets for certain defined benefit plans.

•~~Decrease~~Increase in ~~short-term borrowings~~the current portion of long-term debt — due to ~~net repayment~~the reclassification of ~~commercial paper borrowings.~~$1.0 billion of long-term notes due in April 2022.

•Increase in accrued liabilities — primarily due to the contingent consideration liability recorded in connection with the Supreme acquisition, an increase in ~~current operating lease liabilities~~accrued income taxes, higher accruals for freight and amounts recorded in connection with the ~~timing of interest and tax payments during the period.~~Supreme acquisition.

•~~Increase~~Decrease in long-term debt — due to the ~~issuance~~reclassification of ~~$3.0~~$1.0 billion ~~fixed-rate~~ of long-term notes due in April ~~2020 and the issuance of €1.0 billion euro-denominated fixed-rate notes in February 2020, partially offset by the full redemption of $500.0 million of VF's outstanding 2021 notes in March 2020.~~

•~~Increase in operating lease liabilities~~ ~~— due to new and renewed retail store leases and a new distribution center lease in Europe that commenced during Fiscal 2021.~~2022.


Liquidity and Capital Resources

~~The financial condition~~We consider the following to be measures of ~~VF is reflected in the following:~~our liquidity and capital resources:


		September	March	September		September	March	September
(Dollars in millions)	(Dollars in millions)	2020	2020	2019	(Dollars in millions)	2021	2021	2020
Working capital	Working capital	$4,157.4	$1,518.8	$2,029.0	Working capital	$1,585.5	$2,113.1	$4,157.4
Current ratio	Current ratio	3.1 to 1	1.5 to 1	1.9 to 1	Current ratio	1.5 to 1	2.0 to 1	3.1 to 1
Net debt to total capital	Net debt to total capital	64.5%	53.4%	42.2%	Net debt to total capital	62.0%	68.2%	64.5%

The ~~increase~~decrease in the current ratio at September ~~2020~~2021 compared to both March 2021 and September 2020 was primarily due to a net increase in current assets driven by higher cash balances due to proceeds from long-term debt, as discussed in the "Cash Provided by Financing Activities" section below, higher short-term investments and inventory balances and a net decrease in current liabilities driven by ~~lower short-term borrowings,~~a higher current portion of long-term debt, as discussed in the "Consolidated Balance Sheets" section above. The ~~increase~~decrease in the current ratio at September ~~2020~~2021 compared to both March 2021 and September ~~2019~~2020 was ~~primarily due to a net increase in current assets driven~~partially offset by ~~higher~~the cash

~~balances due to~~ proceeds from ~~long-term debt,~~the sale of the Occupational Workwear business during the six months ended September 2021, as discussed in the "Cash Provided (Used) by Investing Activities" section below. The decrease in the current ratio at September 2021 compared to September 2020 was also due to a net decrease in current assets driven by lower cash balances due to the timing of proceeds from long-term debt during the six months ended September 2020, as discussed in the "Cash Provided (Used) by Financing Activities" section ~~below and higher short-term investments, as discussed in the "Consolidated Balance Sheets" section above.~~below.

For the ratio of net debt to total capital, net debt is defined as short-term and long-term borrowings, in addition to operating lease liabilities, net of unrestricted ~~cash of VF and its subsidiaries.~~cash. Total capital is defined as net debt plus stockholders’ equity. The ~~increase~~decrease in the net debt to total capital ratio at September ~~2020~~2021 compared to ~~both~~ March ~~2020~~2021 was primarily driven by a decrease in net debt due to higher cash balances at September 2021 and

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~~September 2019 was attributed to the~~ an increase ~~in long-term debt, as discussed in the "Consolidated Balance Sheets" section above and decreases~~ in stockholders' equity. The ~~increase~~decrease in the net debt to total capital ratio at September ~~2020~~2021 compared to ~~March 2020 was partially offset by the decrease in short-term borrowings, as discussed in the "Consolidated Balance Sheets" section above. The decrease in stockholders' equity at~~ September ~~2020 compared to March~~ 2020 was primarily driven by an increase in stockholders' equity, partially offset by an increase in net debt due to lower cash balances at September 2021. The increase in stockholders' equity for both comparisons was driven by net income in the respective periods, partially offset by payments of dividends. The decrease in stockholders' equity at September 2020 compared to September 2019 was driven by payments of dividends, share repurchases and stock-based compensation activity, partially offset by net income.

VF’s primary source of liquidity is its expected annual cash flow from operating activities. Cash from operations is typically lower in the first half of the calendar year as inventory builds to support peak sales periods in the second half of the calendar

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year. Cash provided by operating activities in the second half of the calendar year is substantially higher as inventories are sold and accounts receivable are collected. Additionally, direct-to-consumer sales are highest in the fourth quarter of the calendar

year. VF's additional sources of liquidity include available borrowing capacity against its Global Credit Facility, available cash ~~and investment~~ balances and international lines of credit.

In summary, our cash flows from continuing operations were as follows:


		Six Months Ended September					Six Months Ended September

(In thousands)	(In thousands)	2020		2019		(In thousands)	2021		2020
Cash provided (used) by operating activities	Cash provided (used) by operating activities	$	39,510	$	(372,746)	Cash provided (used) by operating activities	$	(177,227)	$	39,510
Cash used by investing activities		(954,685)		(70,142)
Cash provided by financing activities		1,377,458		411,914
Cash provided (used) by investing activities						Cash provided (used) by investing activities	1,052,885		(954,685)
Cash provided (used) by financing activities						Cash provided (used) by financing activities	(359,853)		1,377,458

Cash Provided (Used) by Operating Activities

Cash flows related to operating activities are dependent on net income (loss), adjustments to net income (loss) and changes in working capital. The decrease in cash ~~used~~provided by operating activities in the six months ended September ~~2020~~2021 compared to September ~~2019~~2020 is primarily due to a decrease in net cash ~~usage for~~provided by working capital, partially offset by ~~lower~~higher earnings for the periods compared.

Cash ~~Used~~Provided (Used) by Investing Activities

The ~~increase~~decrease in cash used by investing activities in the six months ended September ~~2020 related~~2021 was primarily due to $616.5 million of net proceeds from the sale of the Occupational Workwear business and $598.8 million of proceeds from the sale of short-term investments in the six months ended September 2021, compared to purchases of short-term investments of $800.0 million. The six months ended September 2019 included $63.7 million from the sale of office real estate and related assets in connection with the relocation of VF's global headquarters and certain brands to Denver, Colorado. Capital expenditures and software purchases increased $21.1 million in the six months ended September ~~2020~~2020. Capital expenditures increased $32.1 million and software purchases increased $3.8 million in the six months ended September 2021 compared to the ~~2019~~2020 period.

Cash Provided (Used) by Financing Activities

The ~~increase~~decrease in cash provided by financing activities during the six months ended September ~~2020~~2021 was primarily due to the net proceeds from long-term debt issuance of $3.0 billion fixed-rate notes in the six months ended September 2020, which was partially offset by a ~~$1.0~~$1.2 billion net decrease in short-term ~~borrowings for the periods compared. The increase was also partially offset by $906.1 million of cash received from Kontoor Brands, net of cash transferred, in the six months ended September 2019.~~borrowings.

Share Repurchases

VF did not purchase shares of its Common Stock in the open market during the six months ended September ~~2020~~2021 or the six months ended ~~ended~~ September ~~2019~~2020 under the share repurchase program authorized by VF's Board of Directors.

In response to the COVID-19 outbreak and to preserve financial liquidity, VF ~~has~~ made the decision to temporarily pause its share repurchase ~~program. As~~program on April 7, 2020. The Company recently decided to reinstate the program and as of the end of September ~~2020, the Company~~2021 had $2.8 billion remaining for future repurchases under its share repurchase ~~program.~~authorization. VF will continue to

evaluate its use of capital, giving first priority to ~~enterprise protection and~~business acquisitions then to ~~business acquisitions and~~ direct shareholder return in the form of dividends and share ~~repurchases.~~repurchases, and enterprise protection.

Revolving Credit Facility and Short-term Borrowings

VF relies on its ability to generate cash flows to finance its ongoing operations. In addition, VF has significant liquidity from its available cash ~~and investment~~ balances and credit facilities. VF maintains a $2.25 billion senior unsecured revolving line of credit (the “Global Credit Facility”) that expires December 2023. VF may request an unlimited number of one year extensions so long as each extension does not cause the remaining life of the Global Credit Facility to exceed five years, subject to stated terms and conditions. The Global Credit Facility may be used to borrow funds in both U.S. dollar and certain non-U.S. dollar currencies, and has a $50.0 million letter of credit sublimit. In addition, the Global Credit Facility supports VF’s U.S. commercial paper program for short-term, seasonal working capital requirements and general corporate purposes, including acquisitions and share ~~repurchases and acquisitions.~~repurchases. Outstanding short-term balances may vary from period to period depending on the level of corporate requirements.

~~In April 2020,~~ VF ~~entered into an amendment to the~~has restrictive covenants on its Global Credit Facility, ~~that resulted in certain changes to the restrictive covenants,~~ including ~~an increase to the~~a consolidated indebtedness to consolidated capitalization financial ratio covenant toof 70% ~~and a revision to the~~. The calculation of consolidated indebtedness ~~to be~~is net of unrestricted cash. As of September ~~2020,~~2021, the covenant calculation includes cash and equivalents ~~and short-term investments,~~ and excludes consolidated operating lease liabilities. In addition, ~~the amendment requires~~ VF and its subsidiaries are required to maintain minimum liquidity in the form of unrestricted cash and unused financing commitments of not less than $750.0 million. As of September ~~2020,~~2021, VF was in compliance with all covenants.

VF has a commercial paper program that allows for borrowings of up to ~~$2.25~~$2.25 billion to the extent that it has borrowing capacity under the Global Credit Facility. ~~As of September 2020, there~~There were no commercial paper ~~borrowings.~~ borrowings as of September 2021. Standby letters of credit issued as of September ~~2020~~2021 were ~~$24.2~~$24.2 million, leaving

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~~approximately $2.2~~$2.2 billion available for borrowing against the Global Credit Facility at September ~~2020.~~2021. Additionally, VF had approximately ~~2.7~~$1.4 billion of cash and equivalents ~~and short-term investments~~ at September ~~2020.~~2021.

VF has ~~$70.0~~$62.0 million of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks. Total outstanding balances under these arrangements were ~~$13.2~~$10.2 million at September ~~2020.~~2021.

On April 23, 2020, VF closed its sale of senior unsecured notes including $1.0 billion of 2.050% notes due April 2022, $750.0 million of 2.400% notes due April 2025, $500.0 million of 2.800% notes due April 2027 and $750.0 million of 2.950% notes due April 2030. The net proceeds received by the Company were approximately $2.97 billion. A portion of the net proceeds was used to repay $2.0 billion of outstanding borrowings under the Global Credit Facility resulting from actions taken by VF to strengthen the Company's cash position in response to the COVID-19 pandemic, and the remaining net proceeds will be used for general corporate purposes.Rating Agencies

VF’s favorable credit agency ratings allow for access to additional liquidity at competitive rates. At the end of September ~~2020,~~2021, VF’s long-term debt ratings were ~~‘A’~~‘A-’ by Standard & Poor’s

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Global Ratings ~~Services~~ and ~~‘A3’~~‘Baa1’ by Moody’s Investors Service, ~~both with 'negative' outlooks,~~ and commercial paper ratings by those rating agencies were ~~‘A-1’~~‘A-2’ and ~~‘Prime-2’~~‘P-2’, respectively. In April 2020, Standard & Poor's Ratings Services revised VF's credit rating outlook to 'negative' from 'stable' to reflect the risk that extended economic stress from the COVID-19 pandemic on operating performance could result in a downgrade due to prolonged credit measure deterioration. Similarly, in April 2020, Moody's Investor Services also revised VF's credit rating outlook to 'negative'. There have been no subsequent changes in the credit rating outlooks.

None of VF’s long-term debt agreements contain acceleration of maturity clauses based solely on changes in credit ratings. However, if there were a change in control of VF, and as a result of the change in control the ~~2023, 2028, 2032 and 2037~~ notes were rated below investment grade by recognized rating agencies, then VF would be obligated to repurchase the notes at 101%

of the aggregate principal amount, plus any accrued and unpaid interest, if required by the respective holders of the notes. The change of control provision applies to all notes, except for the 2033 notes.

Dividends

The Company paid a cash ~~dividend~~dividends of ~~$0.48~~$0.49 per share and ~~$0.96~~$0.98 per share during the three and six months ended September ~~2020,~~2021, and the Company has declared a cash dividend of ~~$0.49~~$0.50 per share that is payable in the third quarter of Fiscal ~~2021.~~2022. Subject to approval by its Board of Directors, VF intends to continue to pay its regularly scheduled ~~dividend and is not contemplating the suspension of its dividend at this time.~~dividend.

Contractual Obligations

Management’s Discussion and Analysis in the Fiscal ~~2020~~2021 Form 10-K provided a table summarizing VF’s material contractual obligations and commercial commitments at the end of Fiscal ~~2020~~2021 that would require the use of funds. As of September ~~2020,~~2021, there have been no material changes in the amounts disclosed in the Fiscal ~~2020~~2021 Form 10-K, except as noted below:

•Inventory purchase obligations ~~decreased~~increased by approximately ~~$510~~ $670.0 million at the end of September ~~2020~~2021 primarily due to the ~~timing~~seasonality of ~~sourcing activities and the impact of COVID-19.~~

•~~In addition to operating lease liabilities recorded in~~ VF's Consolidated Balance Sheet, the Company has entered into approximately $180 million of leases that have not yet commenced, including over $150 million related to a distribution center lease that is expected to begin during Fiscal 2021 with a lease term of 15 years.

•~~VF's required principal payments on long-term debt increased during the period due to the issuance of senior unsecured notes with an aggregate principal value of $3.0 billion.~~business.

There continues to be ~~significant~~ uncertainty about the duration and extent of the impact of ~~COVID-19 and we expect there will be a significant negative impact to our Fiscal 2021 cash flows.~~COVID-19. However, management believes that VF has sufficient liquidity and flexibility to operate during and after the disruptions caused by the COVID-19 pandemic and related governmental actions and regulations and health authority advisories, and meet its current and long-term obligations as they become due.


Recent Accounting Pronouncements

Refer to Note 2 to VF’s consolidated financial statements for information on recently ~~issued~~adopted and ~~adopted~~issued accounting standards.


Critical Accounting Policies and Estimates

Management has chosen accounting policies it considers to be appropriate to accurately and fairly report VF’s operating results and financial position in conformity with generally accepted accounting principles in the United States of America. Our critical accounting policies are applied in a consistent manner. Significant accounting policies are summarized in Note 1 to the consolidated financial statements included in the Fiscal ~~2020~~2021 Form 10-K.

The application of these accounting policies requires management to make estimates and assumptions about future events and apply judgments that affect the reported amounts of assets, liabilities, revenues, expenses, contingent assets and liabilities, and related disclosures. These estimates, assumptions and judgments are based on historical experience,

current trends and other factors believed to be reasonable under

the circumstances. Management evaluates these estimates and assumptions, and may retain outside consultants to assist in the evaluation. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known.

The accounting policies that involve the most significant estimates, assumptions and management judgments used in preparation of the consolidated financial statements, or are the most sensitive to change from outside factors, are discussed in Management’s Discussion and Analysis in the Fiscal ~~2020~~2021 Form 10-K.

Except as disclosed in Note 2 to VF's consolidated financial statements, there have been no material changes in VF's accounting policies.

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Cautionary Statement on Forward-looking Statements

From time to time, VF may make oral or written statements, including statements in this quarterly report, that constitute “forward-looking statements” within the meaning of the federal securities laws. These include statements concerning plans, objectives, projections and expectations relating to VF’s operations or economic performance and assumptions related thereto. Forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting VF and therefore involve a number of risks and uncertainties. Forward-looking statements are not guarantees, and actual results could differ materially from those expressed or implied in the forward-looking statements.

Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks arising from the

widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic; the level of consumer demand for apparel, footwear and accessories; disruption to VF’s distribution system; the financial strength of VF’s customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; VF’s response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; intense competition from online ~~retailers;~~retailers and other direct-to-consumer business risks; manufacturing and product innovation; increasing pressure on margins; VF’s ability to implement its business strategy; VF’s ability to grow its international, direct-to-consumer and ~~direct-to-consumer~~digital businesses; VF's ability to transform its model to be more consumer-minded, retail-centric and hyper-digital; retail industry changes and challenges; VF's ability to create and maintain an agile and efficient operating model and organizational structure; VF’s and its vendors’ ability to maintain

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the strength and security of information technology systems; the risk that

VF’s facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; VF’s ability to properly collect, use, manage and secure business, consumer and employee ~~data;~~data and comply with privacy and security regulations; foreign currency fluctuations; stability of VF’s and VF's vendors' manufacturing facilities and ~~foreign suppliers;~~VF's ability to establish and maintain effective supply chain capabilities; continued use by VF’s suppliers of ethical business practices; VF’s ability to accurately forecast demand for products; continuity of members of VF’s management; VF's ability to recruit, develop or retain qualified employees; VF’s ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; maintenance by VF’s licensees and distributors of the value of VF’s brands; VF’s ability to execute acquisitions and dispositions and integrate ~~acquisitions;~~acquisitions, including the recently acquired Supreme® brand;

business resiliency in response to natural or man-made economic, political or environmental disruptions; changes in tax laws and liabilities; legal, regulatory, political and economic ~~risks; the risk of economic uncertainty associated with the exit of the United Kingdom from the European Union (“Brexit”) or any other similar referendums that may be held;~~risks and changes to laws and regulations; adverse or unexpected weather conditions; VF's indebtedness and its ability to obtain financing on favorable terms, if needed, could prevent VF from fulfilling its financial obligations; climate change and increased focus on sustainability issues; and risks associated with the spin-off of our Jeanswear business completed on May 22, 2019, including the risk that VF will not realize all of the expected benefits of the spin-off; the risk that the spin-off will not be tax-free for U.S. federal income tax purposes; and the risk that there will be a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of VF. More information on potential factors that could affect VF’s financial results is included from time to time in VF’s public reports filed with the Securities and Exchange Commission, including VF’s Annual Report on Form 10-K.


ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no significant changes in VF’s market risk exposures from what was disclosed in Item 7A in the Fiscal ~~2020~~2021 Form 10-K.


ITEM 4 — CONTROLS AND PROCEDURES.

Disclosure controls and procedures:

Under the supervision of the Chief Executive Officer and Chief Financial Officer, a Disclosure Committee comprising various members of management has evaluated the effectiveness of the disclosure controls and procedures at VF and its subsidiaries as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded as of the Evaluation Date that such controls and procedures were effective.

Changes in internal control over financial reporting:

There have been no changes during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, VF's internal control over financial reporting. ~~We have not experienced any material impact to our internal controls over financial reporting despite the fact that~~ ~~a significant number o~~f our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

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PART II — OTHER INFORMATION


ITEM 1 — LEGAL PROCEEDINGS.

Information on VF’s legal proceedings is set forth under Part I, "Item 3. Legal Proceedings” in the Fiscal ~~2020~~2021 Form 10-K. There have been no material changes to the legal proceedings from those described in the Fiscal ~~2020~~2021 Form 10-K.

SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental regulations if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, VF uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. VF believes that this threshold is reasonably designed to result in disclosure of any such proceedings that are material to VF’s business or financial condition. Applying this threshold, there are no such proceedings to disclose for this period.


ITEM 1A — RISK FACTORS.

~~In addition to~~You should carefully consider the ~~other information~~risk factors set forth in this report and in our other reports and statements that we file with the Securities and Exchange Commission, including our quarterly reports on Form 10-Q, careful consideration should be given to the factors discussed inunder Part I, “Item 1A. Risk Factors” in the Fiscal ~~2020~~2021 Form 10-K, ~~as updated and supplemented below,~~ which could materially affect our business, financial condition and future results. The risks described in the Fiscal ~~2020~~2021 Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results.

~~Other than the risks identified below, there~~There have been no material changes to the risk factors identified in Part I, “Item 1A. Risk Factors” in the Fiscal ~~2020~~2021 Form 10-K.

~~The recent coronavirus (COVID-19) global pandemic has and will continue to materially and adversely affect our business, financial condition and results of operations.~~

Our business has been, and will continue to be, impacted by the effects of the COVID-19 global pandemic in countries and territories where we operate and our employees, suppliers, third-party service providers, consumers or customers are located. These effects include recommendations or mandates from governmental authorities to close businesses, require staged reopening, limit travel, prevent large gatherings, and require individuals to follow self-quarantine, curfew, shelter-in-place, and stay-at-home orders. The countries and territories in which our products are made, manufactured, distributed or sold are in varying stages of restrictions and reopening to address the COVID-19 pandemic. Certain jurisdictions have begun reopening following precautionary measures such as limited operating hours and limited occupancy levels, only to return to further restrictions and closures in the face of a rising number of COVID-19 cases. There is significant uncertainty around retail store openings and the extent to which stores may remain open if and where there is a resurgence in COVID-19, and the duration and severity of any related restrictions. Some of the impacts of the COVID-19 pandemic on our business have included, and could continue to include, the following:

•significant reductions in demand and significant volatility in demand for our products by consumers and customers resulting in reduced orders, order cancellations, lower revenues, higher discounts, increased inventories, decreased value of inventories and lower gross margins, which continue to be caused by, among other things: the inability of consumers to purchase our products due to illness, quarantine or other restrictions or out of fear of exposure to COVID-19, phased reopenings and reclosures of our owned stores as well as stores of our customers or reduced store hours across the Americas, Europe and Asia Pacific due to a resurgence of COVID-19, significant declines in consumer retail store traffic to stores that have reopened, or financial hardship and unemployment, shifts in demand away from consumer discretionary products and reduced options for marketing and

~~promotion of products or other restrictions in connection with the COVID-19 pandemic;~~

•significant uncertainty and turmoil in global economic and financial market conditions causing, among other things: decreased consumer confidence and decreased consumer spending, now and in the mid and long-term, inability to access financing in the credit and capital markets (including the commercial paper market) at reasonable rates (or at all) in the event we, our customers or suppliers find it desirable to do so, increased exposure to fluctuations in foreign currency exchange rates relative to the U.S. Dollar, and volatility in the availability and prices for commodities and raw materials we use for our products and in our supply chain;

•inability to meet our consumers’ and customers’ needs for inventory production and fulfillment due to disruptions in our supply chain and increased costs associated with mitigating the effects of the pandemic caused by, among other things: reduction or loss of workforce due to illness, quarantine or other restrictions or facility closures, scarcity of and/or increased prices for raw materials, scrutiny or embargoing of goods produced in infected areas, and increased freight and logistics costs, expenses and times; failure of third parties on which we rely, including our suppliers, customers, distributors, service providers and commercial banks, to meet their obligations to us or to timely meet those obligations, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, including business failure or insolvency and collectability of existing receivables;

•significant changes in the conditions in markets in which we do business, including quarantines, governmental or regulatory actions, closures or other restrictions, including voluntarily adopted practices, that limit or close our operating and manufacturing facilities and restrict our employees’ ability to perform necessary business functions, including operations necessary for the design, development, production, distribution, sale, marketing and support of our products and increase the likelihood of litigation;

•increased costs, including increased employee costs, such as for expanded benefits and essential employee incentives, and increased operating costs, including those associated with provision of personal protective equipment and compliance with governmental or public health organization mandates or guidance, allowances or extended payment terms for customers, inventory write-offs, all of which have negatively impacted our profitability;

•~~increased risk to the health, safety and wellness, including mental and emotional health, of our employees due to the virus or the impact of related restrictions; and~~

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•amplified data security risks as a result of more employees working remotely, including increased demand on our information technology resources and systems, increased phishing and other cybersecurity attacks, and an increase in the number of points of potential attack, such as laptops and mobile devices.

These impacts have placed, and will continue to place, limitations on our ability to execute our business plan and materially and adversely affect our business, financial condition and results of operations. We continue to monitor the situation

and may adjust our current policies and procedures as more information and guidance become available regarding the evolving situation. The impact of COVID-19 may also exacerbate other risks discussed in the “Risk Factors” section of the Fiscal ~~2020~~ Form 10-K, any of which could have a material effect on us. The extent of the impact of the COVID-19 pandemic will depend on future developments, including the duration, severity and any resurgences of COVID-19, which are uncertain and cannot be predicted. This situation is dynamic and changing rapidly and additional impacts may arise that we are not aware of currently.


ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(c)Issuer purchases of equity securities:

The following table sets forth VF's repurchases of our Common Stock during the fiscal quarter ended ~~September 26, 2020~~October 2, 2021 under the share repurchase program authorized by VF’s Board of Directors in 2017.


Second Quarter Fiscal ~~2021~~2022	Total Number of Shares Purchased	Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Dollar Value of Shares that May Yet be Purchased Under the Program
~~June 28~~July 4 - July ~~25, 2020~~31, 2021	—	$	—	—	$	2,836,975,339
~~July 26~~August 1 - August ~~22, 2020~~28, 2021	—	—		—	2,836,975,339
August 2329 - ~~September 26, 2020~~October 2, 2021	—	—		—	2,836,975,339
Total	—			—

VF will continue to evaluate future share repurchases available under its authorization, considering funding required for ~~enterprise protection and~~ business acquisitions, VF’s Common Stock price, ~~and~~ levels of stock option ~~exercises.~~exercises and funding required for enterprise protection.

41 ~~VF Corporation Q2 FY21 Form 10-Q~~

~~Table of Contents~~


ITEM 6 — EXHIBITS.


~~10.1~~3.1						~~Performance-Based Restricted Stock Units ("PRSUs") for Three-Year Performance Cycle Fiscal Years 2021-2023 under the Mid-Term Incentive Plan~~Amended and Restated By-Laws of V.F. Corporation, Effective October 19, 2021 (Incorporated herein by reference to Exhibit 3.1 to Form 8-K filed October 20, 2021)
31.1						Certification of Steven E. Rendle, Chairman, President and Chief Executive Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certification of ~~Scott A. Roe,~~Matthew H. Puckett, Executive Vice President and Chief Financial Officer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certification of Steven E. Rendle, Chairman, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certification of ~~Scott A. Roe,~~Matthew H. Puckett, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

VF Corporation Q2 ~~FY21~~FY22 Form 10-Q 42

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	V.F. CORPORATION
	(Registrant)

	By:	/s/ ~~Scott A. Roe~~Matthew H. Puckett
		~~Scott A. Roe~~Matthew H. Puckett
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: ~~October 28, 2020~~November 3, 2021	By:	/s/ Bryan H. McNeill
		Bryan H. McNeill
		Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)

43 VF Corporation Q2 ~~FY21~~FY22 Form 10-Q


(Dollars in thousands)
Scheduled Maturity	Aggregate Principal		Effective Annual Interest Rate		Interest Payments
2.050% notes, due 2022	$	1,000,000	2.277	%	Semiannually
2.400% notes, due 2025	750,000		2.603	%	Semiannually
2.800% notes, due 2027	500,000		2.953	%	Semiannually
2.950% notes, due 2030	750,000		3.071	%	Semiannually
Total Issuance	$	3,000,000