V.F. (VFC) 10-Q 12 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Apr. 03, 2010	May. 01, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-04-03
Entity Registrant Name	V F CORP
Entity Central Index Key	0000103379
Current Fiscal Year End Date	--01-01
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		110,105,590

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Thousands, except Per Share data	3 Months Ended Apr. 03, 2010	3 Months Ended Apr. 04, 2009
Net Sales	$1,730,086	$1,707,301
Royalty Income	19,793	18,173
Total Revenues	1,749,879	1,725,474
Costs and Operating Expenses
Cost of goods sold	932,203	996,640
Marketing, administrative and general expenses	594,416	567,386
Costs and Operating Expenses, Total	1,526,619	1,564,026
Operating Income	223,260	161,448
Other Income (Expense)
Interest income	494	765
Interest expense	(20,499)	(22,015)
Miscellaneous, net	6,423	1,249
Other Income (Expense), Total	(13,582)	(20,001)
Income Before Income Taxes	209,678	141,447
Income Taxes	46,219	41,013
Net Income	163,459	100,434
Net Loss Attributable to Noncontrolling Interests in Subsidiaries	57	505
Net Income Attributable to VF Corporation	$163,516	$100,939
Earnings Per Common Share Attributable to VF Corporation Common Stockholders
Basic	1.48	0.92
Diluted	1.46	0.91
Weighted Average Shares Outstanding
Basic	110,259	109,992
Diluted	111,629	111,028
Cash Dividends Per Common Share	0.6	0.59

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Thousands	Apr. 03, 2010	Jan. 02, 2010	Apr. 04, 2009
ASSETS
Cash and equivalents	$718,634	$731,549	$276,428
Accounts receivable, less allowance for doubtful accounts of: March 2010 - $59,351; Dec. 2009 - $60,380; March 2009 - $49,177	787,682	776,140	996,507
Inventories:
Finished products	764,167	772,458	910,139
Work in process	69,515	70,507	75,832
Materials and supplies	118,500	115,674	132,102
Inventories, Total	952,182	958,639	1,118,073
Other current assets	189,088	163,028	230,251
Total current assets	2,647,586	2,629,356	2,621,259
Property, Plant and Equipment	1,602,996	1,601,608	1,558,857
Less accumulated depreciation	1,001,137	987,430	926,444
Property, Plant and Equipment, Net	601,859	614,178	632,413
Intangible Assets	1,529,538	1,535,121	1,563,268
Goodwill	1,363,059	1,367,680	1,437,682
Other Assets	326,409	324,322	297,942
Total Assets	6,468,451	6,470,657	6,552,564
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings	48,525	45,453	287,873
Current portion of long-term debt	202,690	203,179	3,272
Accounts payable	296,437	373,186	323,536
Accrued liabilities	509,228	470,765	483,523
Total current liabilities	1,056,880	1,092,583	1,098,204
Long-term Debt	937,826	938,494	1,140,414
Other Liabilities	648,879	626,295	739,777
Commitments and Contingencies
Stockholders' Equity
Common stock, stated value $1; shares authorized, 300,000,000; shares outstanding: March 2010 - 109,980,912; Dec. 2009 - 110,285,132; March 2009 - 110,276,129	109,981	110,285	110,276
Additional paid-in capital	1,938,184	1,864,499	1,763,818
Accumulated other comprehensive income (loss)	(246,241)	(209,742)	(297,760)
Retained earnings	2,024,856	2,050,109	1,996,972
Noncontrolling interests in subsidiaries	(1,914)	(1,866)	863
Total stockholders' equity	3,824,866	3,813,285	3,574,169
Total Liabilities and Stockholders' Equity	$6,468,451	$6,470,657	$6,552,564

Consolidated Balance Sheets (pa

Consolidated Balance Sheets (parenthetical) (USD $)
In Thousands, except Share data	Apr. 03, 2010	Jan. 02, 2010	Apr. 04, 2009
Allowance for doubtful accounts	$59,351	$60,380	$49,177
Common stock, stated value	$1	$1	$1
Common stock, shares authorized	300,000,000	300,000,000	300,000,000
Common stock, shares outstanding	109,980,912	110,285,132	110,276,129

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Thousands	3 Months Ended Apr. 03, 2010	3 Months Ended Apr. 04, 2009
Operating Activities
Net income	$163,459	$100,434
Adjustments to reconcile net income to cash provided (used) by operating activities:
Depreciation	27,396	22,035
Amortization of intangible assets	9,978	9,102
Other amortization	3,695	3,311
Stock-based compensation	14,774	11,668
Pension funding under expense	10,324	18,338
Other, net	27,410	22,125
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(25,230)	(152,542)
Inventories	3,867	27,282
Other current assets	(4,373)	40,211
Accounts payable	(74,409)	(109,748)
Accrued compensation	(31,548)	(8,982)
Accrued income taxes	26,213	(3,858)
Accrued liabilities	58,312	(2,594)
Other assets and liabilities	(25,714)	(12,145)
Cash provided (used) by operating activities	184,154	(35,363)
Investing Activities
Capital expenditures	(17,339)	(16,983)
Business acquisitions, net of cash acquired	(29,111)	(207,219)
Software purchases	(701)	(1,840)
Other, net	(2,486)	593
Cash used by investing activities	(49,637)	(225,449)
Financing Activities
Increase in short-term borrowings	2,837	235,912
Payments on long-term debt	(1,061)	(1,110)
Purchase of Common Stock	(118,001)
Cash dividends paid	(66,224)	(64,966)
(Cost) proceeds from issuance of Common Stock, net	52,394	(6,740)
Tax benefits of stock option exercises	1,669	(2,438)
Cash provided (used) by financing activities	(128,386)	160,658
Effect of Foreign Currency Rate Changes on Cash	(19,046)	(5,262)
Net Change in Cash and Equivalents	(12,915)	(105,416)
Cash and Equivalents - Beginning of Year	731,549	381,844
Cash and Equivalents - End of Period	$718,634	$276,428

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (USD $)
In Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Noncontrolling Interests	Total
Balance at Jan. 03, 2009	$109,848	$1,749,464	($276,294)	$1,972,874	$1,353
Net income (loss)				461,271	(2,813)
Common Stock dividends				(261,682)
Purchase of treasury stock	(1,560)			(110,415)
Stock compensation plans, net	1,977	115,035		(12,732)
Common Stock held in trust for deferred compensation plans	20			793
Distributions to noncontrolling interests					(480)
Foreign currency translation			37,468		74
Defined benefit pension plans			25,021
Derivative financial instruments			510
Marketable securities			3,553
Balance at Jan. 02, 2010	110,285	1,864,499	(209,742)	2,050,109	(1,866)	3,813,285
Net income (loss)				163,516	(57)	163,459
Common Stock dividends				(66,224)
Purchase of treasury stock	(1,500)			(116,501)
Stock compensation plans, net	1,199	73,685		(5,780)
Common Stock held in trust for deferred compensation plans	(3)			(264)
Foreign currency translation			(63,526)		9
Defined benefit pension plans			7,589
Derivative financial instruments			18,496
Marketable securities			942
Balance at Apr. 03, 2010	$109,981	$1,938,184	($246,241)	$2,024,856	($1,914)	$3,824,866

Basis of Presentation

Basis of Presentation
	3 Months Ended Apr. 03, 2010
Basis of Presentation	Note A Basis of Presentation VF Corporation (and its subsidiaries, collectively known as "VF") uses a 52/53week fiscal year ending on the Saturday closest to December31 of each year. For presentation purposes herein, all references to periods ended March2010, December2009 and March2009 relate to the fiscal periods ended on April3, 2010, January2, 2010 and April4, 2009, respectively. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule10-01 of RegulationS-X and do not include all of the information and notes required by generally accepted accounting principles ("GAAP") in the United States of America for complete financial statements. Similarly, the December2009 consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the consolidated financial position, results of operations and cash flows of VF for the interim periods presented. Operating results for the three months ended March2010 are not necessarily indicative of results that may be expected for any other interim period or for the year ending January1, 2011. 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 December2009 ("2009 Form 10-K"). Certain prior year amounts, none of which are material, have been reclassified to conform with the 2010 presentation.

Changes in Accounting Policies

Changes in Accounting Policies
	3 Months Ended Apr. 03, 2010
Changes in Accounting Policies	Note B Changes in Accounting Policies During the first quarter of 2010, VF adopted new accounting guidance issued by the Financial Accounting Standards Board ("FASB") related to transfers of financial assets. This guidance modifies the requirements for derecognizing financial assets from a transferor's balance sheet and requires additional disclosures about transfers of financial assets and any continuing involvement by the transferor. The new guidance did not have a significant impact on our operating results, financial condition or disclosures. Also during the first quarter of 2010, VF adopted new accounting guidance for disclosures of fair value measurements. This guidance requires disclosures about transfers into and out of Levels 1 and 2 of the fair value hierarchy and separate disclosures about activity within Level 3 of the fair value hierarchy. The guidance also clarifies disclosures related to disaggregation of assets and liabilities and valuation techniques used to measure fair value.

Acquisition

Acquisition
	3 Months Ended Apr. 03, 2010
Acquisition	Note C Acquisition On March10, 2010, VF completed the acquisition of its former 50%-owned joint venture that markets Vans branded products in the wholesale channel in Mexico. As part of this transaction, VF also acquired the Vans retail stores that had been operated by our joint venture partner (together with the wholesale business, "Vans Mexico"). The purchase price of these businesses was $31.0million. The carrying value of our initial 50% investment, recorded in Other Assets, was $7.9million at the acquisition date, which included the equity in net income of the investment to the date of acquisition. VF recognized a gain in Miscellaneous Income in the first quarter of $5.7million from remeasuring its original 50% investment in the joint venture to fair value. Revenues and pretax earnings since the date of acquisition recognized in VF's first quarter operating results were $2.6million and $0.8million (excluding the $5.7million gain), respectively. Acquisition expenses included in VF's results of operations were not significant. Vans Mexico is reported as part of the Outdoor Action Sports Coalition. Management has allocated the purchase price to acquired tangible and intangible assets and assumed liabilities based on their respective fair values at the acquisition date. Of the total value, $23.4million was assigned to indefinite-lived intangible assets (trademarks)and amortizable intangible assets (customer relationships), and $16.8million was assigned to goodwill, subject to possible refinement for income taxes during the second quarter. Goodwill arising from the acquisition related to growth prospects in Mexico, an experienced workforce and synergies with the Vans business in the United States. Pro forma operating results for periods prior to the acquisition date are not provided because the acquisition was not material to VF's results of operations.

Sale of Accounts Receivable

Sale of Accounts Receivable
	3 Months Ended Apr. 03, 2010
Sale of Accounts Receivable	Note D Sale of Accounts Receivable In September2009, VF entered into an agreement to sell selected trade accounts receivable, on a revolving basis, to a financial institution. The agreement covers the sale of up to $192.5million of accounts receivable, at any point in time, on a nonrecourse basis. After the sale, VF continues to service and collect these accounts receivable on behalf of the financial institution but does not retain any other interests in the receivables. At the beginning of 2010, accounts receivable in the Consolidated Balance Sheet had been reduced by $74.2million related to balances sold under this program. At the end of March2010, accounts receivable had been reduced by $116.0million related to balances sold under this program. During the first quarter, VF sold $202.9million of accounts receivable at their stated amounts, less a funding fee of $0.3million, which was recorded in Miscellaneous Expense. Net proceeds of this program are recognized in the Consolidated Statement of Cash Flows as part of the change in accounts receivable in cash provided by operating activities.

Intangible Assets

Intangible Assets
	3 Months Ended Apr. 03, 2010
Intangible Assets	Note E Intangible Assets March 2010 December 2009 Weighted Gross Net Net Average Carrying Accumulated Carrying Carrying Dollars in thousands Life * Amount Amortization Amount Amount Amortizable intangible assets: Customer relationships 19 years $ 445,865 $ 86,939 $ 358,926 $ 361,039 License agreements 24 years 179,628 44,989 134,639 137,447 Trademarks and other 7 years 14,910 8,990 5,920 6,615 Amortizable intangible assets, net 499,485 505,101 Indefinite-lived intangible assets: Trademarks 1,030,053 1,030,020 Intangible assets, net $ 1,529,538 $ 1,535,121 * Amortization of customer relationships accelerated methods; license agreements accelerated and straight-line methods; trademarks and other accelerated and straight-line methods. Amortization of intangible assets for the first quarter of 2010 was $10.0million. Estimated amortization expense for the remainder of 2010 is $29.8million and for the years 2011 through 2014 is $37.4million, $34.7million, $33.1million and $32.1million, respectively.

Goodwill

Goodwill
	3 Months Ended Apr. 03, 2010
Goodwill	Note F Goodwill Outdoor Contemporary In thousands Action Sports Jeanswear Imagewear Sportswear Brands Total Balance, December2009 $ 574,879 $ 238,930 $ 56,703 $ 157,314 $ 339,854 $ 1,367,680 2010 acquisition 16,779 16,779 Adjustment to contingent consideration (78 ) (78 ) Currency translation (14,934 ) (3,066 ) (3,322 ) (21,322 ) Balance, March2010 $ 576,646 $ 235,864 $ 56,703 $ 157,314 $ 336,532 $ 1,363,059 Balances at December2009 are net of impairment charges recorded during 2009, as follows: Outdoor Action Sports $43.4million and Sportswear $58.5million.

Pension Plans

Pension Plans
	3 Months Ended Apr. 03, 2010
Pension Plans	Note G Pension Plans VF's net periodic pension cost contained the following components: Three Months Ended March In thousands 2010 2009 Service cost benefits earned during the year $ 4,083 $ 3,726 Interest cost on projected benefit obligations 19,108 17,950 Expected return on plan assets (19,172 ) (13,379 ) Amortization of: Actuarial losses 11,372 15,131 Prior service costs 987 1,067 Net periodic pension cost $ 16,378 $ 24,495 During the first quarter, VF made contributions totaling $6.1million to its defined benefit pension plans. VF currently anticipates making an additional $2.6million of contributions during the remainder of 2010.

Business Segment Information

Business Segment Information
	3 Months Ended Apr. 03, 2010
Business Segment Information	Note H Business Segment Information For internal management and reporting purposes, VF's businesses are grouped principally by product categories, and by brands within those product categories. These groupings of businesses are referred to as "coalitions." These coalitions are the basis for VF's reportable segments. Financial information for VF's reportable segments is as follows: Three Months Ended March In thousands 2010 2009 Coalition revenues: Outdoor Action Sports $ 678,562 $ 618,272 Jeanswear 622,065 667,383 Imagewear 221,298 226,651 Sportswear 102,177 103,570 Contemporary Brands 104,089 89,589 Other 21,688 20,009 Total coalition revenues $ 1,749,879 $ 1,725,474 Coalition profit: Outdoor Action Sports $ 132,705 $ 88,595 Jeanswear 106,808 89,648 Imagewear 22,812 22,867 Sportswear 7,168 4,508 Contemporary Brands 8,452 15,414 Other (1,225 ) (2,016 ) Total coalition profit 276,720 219,016 Corporate and other expenses (47,037 ) (56,319 ) Interest, net (20,005 ) (21,250 ) Income before income taxes $ 209,678 $ 141,447 Operating results of the lucy business unit for 2009 have been reclassified from the Contemporary Brands Coalition to the Outdoor Action Sports Coalition consistent with a change in internal management reporting beginning in 2010.

Capital and Comprehensive Incom

Capital and Comprehensive Income (Loss)
	3 Months Ended Apr. 03, 2010
Capital and Comprehensive Income (Loss)	Note I Capital and Comprehensive Income (Loss) Common stock outstanding is net of shares held in treasury, and in substance retired. There were 15,518,019 treasury shares at March2010, 13,943,457 at December2009 and 12,383,868 at March2009. The excess of the cost of treasury shares acquired over the $1 per share stated value of Common Stock is deducted from Retained Earnings. In addition, 244,069 shares of VF Common Stock at March 2010, 241,446 shares at December2009, and 276,002 shares at March2009 were held in connection with deferred compensation plans. These shares held for deferred compensation plans are treated for financial reporting purposes as treasury shares at a cost of $10.2million, $11.0million and $12.6million at each of the respective dates. There are 25,000,000 authorized shares of Preferred Stock, $1 par value, of which none are outstanding. Other comprehensive income ("OCI") consists of changes in assets and liabilities that are not included in Net Income under GAAP but are instead reported within a separate component of Stockholders' Equity. VF's comprehensive income was as follows: Three Months Ended March In thousands 2010 2009 Net income $ 163,459 $ 100,434 Other comprehensive income (loss): Foreign currency translation Losses arising during the period (74,763 ) (40,338 ) Less income tax effect 11,237 3,777 Defined benefit pension plans Amortization of deferred actuarial losses 11,372 15,131 Amortization of prior service cost 987 1,067 Less income tax effect (4,770 ) (6,241 ) Derivative financial instruments Gains arising during the period 20,841 12,381 Less income tax effect (8,030 ) (4,770 ) Reclassification to net income for (gains)losses realized 9,247 (3,688 ) Less income tax effect (3,562 ) 1,420 Marketable securities Gains (losses)arising during the period 942 (205 ) Other comprehensive income (loss) (36,499 ) (21,466 ) Comprehensive income 126,960 78,968 Comprehensive loss attributable to noncontrolling interests 48 490 Comprehensive income attributable to VF Corporation $ 127,008 $ 79,458 Accumulated OCI for 2010 is summarized as follows: Foreign Defined Derivative Currency Benefit Financial Marketable In thousands Translation Pension Plans Instruments Securities Total Balance, December2009 $ 59,671 $ (265,970 ) $ (6,180 ) $ 2,737 $ (209,742 ) Other comprehensive income (loss) (63,526 ) 7,589 18,496 942 (36,499 ) Balance, March2010 $ (3,855 ) $ (258,381 ) $ 12,316 $ 3,679 $ (246,241 )

Stock-based Compensation

Stock-based Compensation
	3 Months Ended Apr. 03, 2010
Stock-based Compensation	Note J Stock-based Compensation During the first three months of 2010, VF granted options for 1,283,874 shares of Common Stock at an exercise price of $74.85, equal to the fair market value of VF Common Stock on the date of grant. The options vest in equal annual installments over a three year period. The fair value of these options was estimated using a lattice valuation model for employee groups having similar exercise behaviors, with the following assumptions: expected volatility ranging from 24% to 39%, with a weighted average of 35%; expected term of 5.5 to 7.6years; expected dividend yield of 3.7%; and risk-free interest rate ranging from 0.2% at six months to 3.7% at 10years. The resulting weighted average fair value of these options at the date of grant was $18.42 per option. Also during the first three months of 2010, VF granted 317,305 performance-based restricted stock units. Participants are eligible to receive shares of VF Common Stock at the end of a three year performance period. The actual number of shares that will be earned, if any, will be based on VF's performance over that period. The grant date fair value of the restricted stock units was $71.91 per unit. In addition, VF granted 15,000 shares of restricted VF Common Stock with a fair value of $71.91 per share. These shares will vest in 2014, assuming continuation of employment by the grantee to that date.

Income Taxes

Income Taxes
	3 Months Ended Apr. 03, 2010
Income Taxes	Note K Income Taxes The effective income tax rate was 22.1% for the first quarter of 2010, compared with 29.0% in the comparable period of 2009. The lower rate in 2010 was due to a higher percentage of income in lower tax jurisdictions outside the United States and a $13.0million tax benefit related to refund claims in a foreign jurisdiction. The effective tax rate for the full year 2009 was 29.9%, which included a 3.7% unfavorable impact from a goodwill impairment charge. VF files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous states and foreign jurisdictions. In the United States, the Internal Revenue Service ("IRS") completed its examination of tax years 2004, 2005 and 2006, and VF has appealed the results of those examinations to the IRS Appeals office. Tax years 2003 to 2008 are under examination by the State of Alabama, and tax years 2006 and 2007 are under examination by the State of California. VF is also currently subject to examination by various other taxing authorities. Management believes that some of these audits and negotiations will conclude during the next 12months. During the first quarter of 2010, the amount of unrecognized tax benefits increased by $8.3million due primarily to tax positions taken in prior years. Management believes that it is reasonably possible that the amount of unrecognized income tax benefits may decrease during the next 12months by approximately $32.0million due to settlements of audits, other settlements with tax authorities and expiration of statutes of limitations, of which $29.8million would reduce income tax expense. In addition, VF intends to file refund claims in various tax jurisdictions during 2010, which could reduce income tax expense in 2010.

Earnings Per Share

Earnings Per Share
	3 Months Ended Apr. 03, 2010
Earnings Per Share	Note L Earnings Per Share Three Months Ended March In thousands, except per share amounts 2010 2009 Earnings per share basic: Net income attributable to VF Corporation common stockholders $ 163,516 $ 100,939 Weighted average Common Stock outstanding 110,259 109,992 Earnings per share attributable to VF Corporation common stockholders $ 1.48 $ 0.92 Earnings per share diluted: Net income attributable to VF Corporation common stockholders $ 163,516 $ 100,939 Weighted average Common Stock outstanding 110,259 109,992 Stock options and other dilutive securities 1,370 1,036 Weighted average Common Stock and dilutive securities outstanding 111,629 111,028 Earnings per share attributable to VF Corporation common stockholders $ 1.46 $ 0.91 Outstanding options to purchase 3.8million shares and 5.8million shares of Common Stock were excluded from the computations of diluted earnings per share for the three months ended March2010 and March2009, respectively, because the effect of their inclusion would have been antidilutive. In addition, performance-based restricted stock units for the three month periods ended March2010 and 2009 were excluded from the computation of diluted earnings per share because their performance factor is not known until the annual financial results are available.

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Apr. 03, 2010
Fair Value Measurements	Note M Fair Value Measurements Fair value is the price that would be received from the sale of an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market in an orderly transaction between market participants. In determining fair value, the accounting standards establish a three-level hierarchy that distinguishes between (i)market data obtained or developed from independent sources (i.e., observable data inputs) and (ii)a reporting entity's own data and assumptions that market participants would use in pricing an asset or liability (i.e., unobservable data inputs). Financial assets and financial liabilities measured and reported at fair value are classified in one of the following categories, in order of priority of observability and objectivity of pricing inputs: * Level 1 Fair value based on quoted prices in active markets for identical assets or liabilities. * Level 2 Fair value based on 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 Fair value based on prices or valuation techniques that require significant unobservable data inputs. Inputs would normally be a reporting entity's own data and judgments about assumptions that market participants would use in pricing the asset or liability. The fair value measurement level for an asset or liability is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs. The following table summarizes the classes of financial assets and financial liabilities measured and recorded at fair value on a recurring basis at the dates indicated: Fair Value Using: Quoted Prices Significant in Active Other Significant Total Markets for Observable Unobservable Fair Identical Assets Inputs Inputs In thousands Value (Level 1) (Level 2) (Level 3) March2010 Financial assets: Cash equivalents money market funds $ 429,659 $ 429,659 $ $ Cash equivalents time deposits 85,036 85,036 Derivative instruments 31,130 31,130 Investment securities 190,485 150,265 40,220 Financial liabilities: Derivative instruments 4,947 4,947 Deferred compensation 209,303 209,303 December2009 Financial assets: Cash equivalents money market funds $ 372,516 $ 372,516 $ $

Derivative Financial Instrument

Derivative Financial Instruments and Hedging Activities
	3 Months Ended Apr. 03, 2010
Derivative Financial Instruments and Hedging Activities	Note N Derivative Financial Instruments and Hedging Activities VF is exposed to risks in its ongoing business operations. Some of these risks are managed by using derivative financial instruments. Derivative financial instruments are contracts whose value is based on, or "derived" from, changes in the value of an underlying currency exchange rate, interest rate or other financial asset or index. VF conducts business in many foreign countries and therefore is subject to movements in foreign currency exchange rates. Exchange rate fluctuations can have a significant effect on the translated U.S. dollar value of operating results and net assets denominated in foreign currencies. VF does not attempt to manage translation risk but does use derivative contracts to manage the exchange rate risk of specified cash flows or transactions denominated in foreign currencies. VF manages exchange rate risk on a consolidated basis, which allows exposures to be netted. Use of derivative financial instruments allows VF to reduce the overall exposure to risks in its cash flows and earnings, since gains and losses in the value of the derivative contracts offset losses and gains in the value of the underlying hedged exposures. In addition, in prior years VF had used derivatives in limited instances to hedge interest rate risk. Summary of derivative instruments All of VF's derivative instruments meet the criteria for hedge accounting at the inception of the hedging relationship. However, derivative instruments that are cash flow hedges of forecasted cash receipts are dedesignated as hedges near the end of their term and, accordingly, do not qualify for hedge accounting after the date of dedesignation. Fair value for derivative contracts outstanding at March2010 and December2009 totaled $922 million and $857million, respectively, and consisted primarily of contracts hedging exposures to the euro, British pound, Mexican peso and Canadian dollar. Derivative contracts, consisting of forward exchange contracts, have maturities ranging from one month to 20months. Amounts of outstanding derivatives in the following table are presented on an individual contract basis: Fair Value of Derivatives Fair Value of Derivatives with Unrealized Gains with Unrealized Losses March December March December In thousands 2010 2009 2010 2009 Foreign exchange contracts designated as hedging instruments $ 34,887 $ 11,183 $ 8,031 $ 16,769 Foreign exchange contracts not designated as hedging instruments 43 560 716 25 Total derivatives $ 34,930 $ 11,743 $ 8,747 $ 16,794 The amounts above have been aggregated by counterparty for presentation in the Consolidated Balance Sheets and classified as current or noncurrent based on the derivatives' maturity dates, as follows: In thousands March 2010 December 2009 Other current assets $ 28,881 $ 6,843 Accrued current liabilities (4,107 ) (13,476 ) Oth

Recently Issued Accounting Stan

Recently Issued Accounting Standards
	3 Months Ended Apr. 03, 2010
Recently Issued Accounting Standards	Note O Recently Issued Accounting Standards New accounting guidance issued by the FASB but not effective until after March2010 is not expected to have a significant effect on VF's consolidated financial position, results of operations or disclosures.

Subsequent Event

Subsequent Event
	3 Months Ended Apr. 03, 2010
Subsequent Event	Note P Subsequent Event VF's Board of Directors declared a quarterly cash dividend of $0.60 per share, payable on June18, 2010 to shareholders of record on June8, 2010.