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v2.4.1.9

Retirement and Savings Benefit Plans (Tables) | 12 Months Ended
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Jan. 03, 2015
Components of Pension Cost | The components of pension cost for VF’s defined benefit plans were as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
|  | In thousands |
Service cost — benefits earned during the year |  | $ | 24,163 |  |  | $ | 25,445 |  |  | $ | 23,198 |
Interest cost on projected benefit obligations |  |  | 81,496 |  |  |  | 72,003 |  |  |  | 77,013 |
Expected return on plan assets |  |  | (90,674 | ) |  |  | (94,585 | ) |  |  | (80,619 | )
Amortization of deferred amounts: |  |  |  |  |  |  |  |  |  |  |  |
Net deferred actuarial losses |  |  | 37,518 |  |  |  | 85,356 |  |  |  | 69,744 |
Deferred prior service costs |  |  | 5,445 |  |  |  | 1,270 |  |  |  | 3,357 |
Total pension expense |  | $ | 57,948 |  |  | $ | 89,489 |  |  | $ | 92,693 |
Weighted average actuarial assumptions used to determine pension expense: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 4.64 | % |  |  | 3.91 | % |  |  | 4.94 | %
Expected long-term return on plan assets |  |  | 4.73 | % |  |  | 5.70 | % |  |  | 6.38 | %
Rate of compensation increase |  |  | 3.53 | % |  |  | 3.82 | % |  |  | 3.85 | %
Reconciliation of Changes in Fair Value of Defined Benefit Plan Assets and Projected Benefit Obligations | The following provides a reconciliation of the changes in fair value of VF’s defined benefit plan assets and projected benefit obligations for each year, and the funded status at the end of each year:
|  | 2014 |  |  | 2013 |
|  | In thousands |
Fair value of plan assets, beginning of year |  | $ | 1,467,526 |  |  | $ | 1,332,211 |
Actual return on plan assets |  |  | 189,824 |  |  |  | 84,882 |
VF contributions |  |  | 67,808 |  |  |  | 117,591 |
Participant contributions |  |  | 3,429 |  |  |  | 2,975 |
Benefits paid |  |  | (88,746 | ) |  |  | (73,308 | )
Currency translation |  |  | (11,587 | ) |  |  | 3,175 |
Fair value of plan assets, end of year |  |  | 1,628,254 |  |  |  | 1,467,526 |
Projected benefit obligations, beginning of year |  |  | 1,688,701 |  |  |  | 1,815,128 |
Service cost |  |  | 24,163 |  |  |  | 25,445 |
Interest cost |  |  | 81,496 |  |  |  | 72,003 |
Participant contributions |  |  | 3,429 |  |  |  | 2,975 |
Actuarial (gain) loss |  |  | 306,797 |  |  |  | (178,414 | )
Benefits paid |  |  | (88,746 | ) |  |  | (73,308 | )
Plan amendments |  |  | 263 |  |  |  | 21,321 |
Currency translation |  |  | (16,156 | ) |  |  | 3,551 |
Projected benefit obligations, end of year |  |  | 1,999,947 |  |  |  | 1,688,701 |
Funded status, end of year |  | $ | (371,693 | ) |  | $ | (221,175 | )
Pension benefits are reported in the balance sheet as a net asset or liability based on the overfunded or underfunded status of the defined benefit plans, assessed on a plan-by-plan basis.
|  | 2014 |  |  | 2013 |
|  | In thousands |
Amounts included in Consolidated Balance Sheets: |  |  |  |  |  |  |  |
Noncurrent assets |  | $ | 1,491 |  |  | $ | 2,272 |
Current liabilities (Note J) |  |  | (8,880 | ) |  |  | (9,016 | )
Noncurrent liabilities (Note L) |  |  | (364,304 | ) |  |  | (214,431 | )
Funded status |  | $ | (371,693 | ) |  | $ | (221,175 | )
Accumulated other comprehensive (income) loss, pretax: |  |  |  |  |  |  |  |
Net deferred actuarial losses |  | $ | 588,847 |  |  | $ | 422,932 |
Deferred prior service costs |  |  | 21,950 |  |  |  | 27,594 |
|  | $ | 610,797 |  |  | $ | 450,526 |
Accumulated benefit obligations |  | $ | 1,916,070 |  |  | $ | 1,610,369 |
Weighted average actuarial assumptions used to determine pension obligations: |  |  |  |  |  |  |  |
Discount rate |  |  | 3.47 | % |  |  | 4.63 | %
Rate of compensation increase |  |  | 3.34 | % |  |  | 3.39 | %
Fair Value of Investments Held by Pension Plan | The fair value of investments held by VF’s defined benefit plans at December 2014 and 2013, by asset class, is summarized below. See Note T for a description of the three levels of the fair value measurement hierarchy. Level 2 securities generally represent institutional funds measured at their daily net asset value derived from quoted prices of the underlying investments. Level 3 securities represent alternative investments primarily in funds of hedge funds (“FoHFs”), which are comprised of different and independent hedge funds with various investment strategies. The administrators of the FoHFs utilize unobservable inputs to calculate the net asset value of the FoHFs on a monthly basis.
|  | Total Plan Assets |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
|  | In thousands |
December 2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents (a) |  | $ | 65,008 |  |  | $ | 3,220 |  |  | $ | 61,788 |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  |  | 180,258 |  |  |  | — |  |  |  | 180,258 |  |  |  | — |
International |  |  | 219,259 |  |  |  | — |  |  |  | 219,259 |  |  |  | — |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  |  | 16 |  |  |  | — |  |  |  | 16 |  |  |  | — |
Corporate and international bonds |  |  | 986,125 |  |  |  | — |  |  |  | 986,125 |  |  |  | — |
Alternative investments (b) |  |  | 132,922 |  |  |  | — |  |  |  | — |  |  |  | 132,922 |
Insurance contracts |  |  | 46,059 |  |  |  | — |  |  |  | 46,059 |  |  |  | — |
Commodities (c) |  |  | (1,393 | ) |  |  | (1,393 | ) |  |  | — |  |  |  | — |
|  | $ | 1,628,254 |  |  | $ | 1,827 |  |  | $ | 1,493,505 |  |  | $ | 132,922 |
December 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents (a) |  | $ | 35,082 |  |  | $ | 5,322 |  |  | $ | 29,760 |  |  |  | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  |  | 165,550 |  |  |  | — |  |  |  | 165,550 |  |  |  | — |
International |  |  | 213,580 |  |  |  | — |  |  |  | 213,580 |  |  |  | — |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and government agencies |  |  | 22 |  |  |  | — |  |  |  | 22 |  |  |  | — |
Corporate and international bonds |  |  | 884,453 |  |  |  | — |  |  |  | 884,453 |  |  |  | — |
Alternative investments (b) |  |  | 125,624 |  |  |  | — |  |  |  | — |  |  |  | 125,624 |
Insurance contracts |  |  | 44,720 |  |  |  | — |  |  |  | 44,720 |  |  |  | — |
Commodities (c) |  |  | (1,505 | ) |  |  | (1,505 | ) |  |  | — |  |  |  | — |
|  | $ | 1,467,526 |  |  | $ | 3,817 |  |  | $ | 1,338,085 |  |  | $ | 125,624 |
(a) | Includes cash held by individual investment managers of other asset classes for liquidity purposes. Level 2 includes an institutional fund that invests primarily in short-term U.S. government securities.
(b) | Represents alternative investments primarily in funds of hedge funds.
(c) | Consists of derivative commodity futures.
Summary of Changes in Fair Value of Pension Assets | The table below summarizes changes in the fair value of Level 3 pension assets:
|  | Alternative Investments |
|  | 2014 |  |  | 2013 |
|  | In thousands |
Balance, beginning of year |  | $ | 125,624 |  |  | $ | — |
Purchase of assets |  |  | 1,268 |  |  |  | 122,980 |
Actual return on assets |  |  | 6,030 |  |  |  | 2,644 |
Balance, end of year |  | $ | 132,922 |  |  | $ | 125,624 |

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- Definition Tabular disclosure of the components of net benefit costs for pension plans and/or other employee benefit plans including service cost, interest cost, expected return on plan assets, gain (loss), prior service cost or credit, transition asset or obligation, and gain (loss) recognized due to settlements or curtailments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=35743120&loc=d3e1928-114920 + Details
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