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Press release from Business Wire

VF Announces Record Fourth Quarter and Full Year Revenues and Earnings, Driven by Strong Organic Growth and Timberland Acquisition

<ul> <li class='bwlistitemmargb'> <b>4Q revenues reach a record $2.9 billion – including $549 million from Timberland acquisition.</b> </li> <li class='bwlistitemmargb'> <b>4Q adjusted EPS increases 30% to record $2.32 – including $0.34 accretion from Timberland ($2.28 and $0.30 on a GAAP basis).</b> </li> <li class='bwlistitemmargb'> <b>Organic revenues grow by more than $1 billion in 2011 – or 14% – to $8.7 billion.</b> </li> <li class='bwlistitemmargb'> <b>Full year adjusted EPS increases 27% to $8.20 – including $0.60 accretion from Timberland ($7.98 and $0.38 on a GAAP basis).</b> </li> <li class='bwlistitemmargb'> <b>2011 cash flow from operations exceeds $1 billion for second consecutive year.</b> </li> <li class='bwlistitemmargb'> <b>2012 adjusted EPS expected to reach approximately $9.30 ($9.10 on a GAAP basis), net of a negative $0.60 impact from higher pension expense and foreign currency translation.</b> </li> <li class='bwlistitemmargb'> <b>Gross margin expected to expand 70 basis points in 2012.</b> </li> <li class='bwlistitemmargb'> <b>Timberland to account for $1.7 billion of revenues and $1.10 of adjusted EPS in 2012 ($0.90 on a GAAP basis).</b> </li> </ul> <p> <i>Information regarding VF's fourth quarter conference call webcast today at 8:30 a.m. ET can be found at the end of this release.</i> </p>

Thursday, February 16, 2012

VF Announces Record Fourth Quarter and Full Year Revenues and Earnings, Driven by Strong Organic Growth and Timberland Acquisition07:00 EST Thursday, February 16, 2012 GREENSBORO, N.C. (Business Wire) -- VF Corporation (NYSE: VFC), a global leader in branded lifestyle apparel, today announced results for the fourth quarter and full year ended December 31, 2011. All per share amounts are presented on a diluted basis. All references to “organic” financial data exclude The Timberland Company (“Timberland”), acquired on September 13, 2011. “The power of the VF portfolio – diversified, global and growing – has never been more evident,” said Eric Wiseman, Chairman and Chief Executive Officer. “In 2011 we achieved record revenues, record earnings and record cash flow, and we completed the transformational acquisition of Timberland. The successful execution of our key international and direct-to-consumer growth drivers has delivered healthy organic growth, strong profitability and consistent return for our shareholders this year, and we look forward to building on this momentum in 2012 and beyond.” The discussions in this release refer to adjusted amounts that exclude 2011 costs related to the Timberland acquisition and impairment charges taken in 2010, which are described under the heading “Adjusted Amounts – Excluding Timberland Acquisition-related Expenses and Noncash Impairment Charges.” Reconciliations of GAAP measures to adjusted amounts are presented in the supplemental financial information included with this release and identify and quantify all excluded items. Fourth Quarter Results SummaryRevenues rose 37% to $2,910 million from $2,126 million in 2010, with the Timberland acquisition adding $549 million to revenues. Organic revenue growth in the quarter was 11%. All VF coalitions achieved higher revenues in the quarter, with the strongest growth in Outdoor & Action Sports, where total revenues rose 81% and organic growth was 19%. Gross margin continued to reflect the impact of higher product costs, declining to 45.2% from 46.6% in the 2010 period. Operating income was $358 million on an adjusted basis in the fourth quarter. This included earnings from the Timberland acquisition of $50 million, excluding acquisition-related expenses of $6.7 million. On a GAAP basis, fourth quarter operating income was $351 million. Operating margin on an adjusted basis was 12.3% in the fourth quarter of 2011 versus 12.9% in the 2010 period. Excluding Timberland, the fourth quarter operating margin increased 10 basis points to 13.0% compared with 12.9% in the 2010 period. Operating margin on a GAAP basis was 12.1% and 3.5% in the fourth quarters of 2011 and 2010, respectively. Net income on an adjusted basis rose 34% to $262 million from $196 million, while adjusted earnings per share increased 30% to $2.32 per share from $1.78 per share. The Timberland acquisition was accretive to adjusted earnings by $0.34 per share in the quarter. On an organic basis, earnings per share grew 11% to $1.98. On a GAAP basis, net income and earnings per share were $257 million and $2.28, respectively, in the fourth quarter of 2011. Full Year Results SummaryRevenues increased 23% to $9,459 million from $7,703 million in 2010. Timberland added $713 million to revenues in 2011. Organic revenue growth was 14% (12% in constant dollars), with strong growth across all coalitions. Outdoor & Action Sports revenues rose 42% during the year, with organic growth of 20%. Jeanswear revenues rose 8%; Imagewear revenues grew 13%; Sportswear revenues were up 9%; and Contemporary Brands revenues grew by 11%. Gross margin was in line with company guidance for the year, declining to 45.8% in 2011 from 46.7% in 2010 due to higher product costs. Operating marginon an adjusted basis was 13.5% in 2011 versus 13.3% in the prior year. Excluding Timberland, the operating margin increased 30 basis points to 13.6%. Net income on an adjusted basis rose 28% to $913 million from $713 million, while adjusted earnings per share increased 27% to $8.20 from $6.46. The Timberland acquisition was accretive to adjusted earnings by $0.60 per share. Organic earnings per share growth in 2011 was 18%. On a GAAP basis, net income and earnings per share in 2011 were $888 million and $7.98, respectively. Adjusted Amounts - Excluding Timberland Acquisition-related Expenses and Noncash Impairment Charges This release refers to adjusted amounts that exclude 1) transaction and restructuring costs related to the acquisition of Timberland, which approximated $6.7 million ($0.04 per share) in the fourth quarter and $33 million ($0.22 per share) for the full year, respectively; and 2) a $202 million pre-tax noncash impairment charge taken in the fourth quarter of 2010. On an after-tax basis, the impairment charge totaled $142 million, which decreased full year 2010 earnings per share by $1.29. Please see the reconciliation of GAAP to adjusted amounts later in this release. Fourth Quarter Business ReviewOutdoor & Action Sports: Outdoor & Action Sports reported another quarter of outstanding revenue and operating income growth. Total global revenues rose 81%, reflecting strong organic growth of 19% and the addition of the Timberland®and Smartwool® brands, which contributed $549 million to revenues. The North Face® brand's momentum continued in the quarter despite unusually warm weather conditions in both the U.S. and Europe, with global revenues rising 22% and comparable growth in both the Americas and international businesses. In Asia, the brand's revenues increased 41% in constant dollars. Momentum continued in The North Face® brand's direct-to-consumer business, where revenues grew over 20% in the quarter. The Vans® brand achieved another quarter of exceptional growth, with global revenues rising 24% and double-digit growth across its Americas, European and Asia businesses. Vans® direct-to-consumer business generated healthy growth in the quarter, with revenues rising by 21%. Timberland achieved solid revenue growth, both domestically and internationally, as well as in its direct-to-consumer and wholesale channels, driven by the continued success of the Timberland®Earthkeepers®collection, the Timberland PRO® Series and the Smartwool® brand. Organic revenue growth in the coalition's Americas and international businesses continued at double-digit rates of 19% and 20%, respectively. Organic growth in direct-to-consumer revenues for Outdoor & Action Sports was 20% in the quarter, with double-digit increases in The North Face®, Vans®and Kipling® direct-to-consumer businesses. Operating income for the coalition rose by 52%. Operating income of $274 million included earnings from Timberland of $43 million, including acquisition-related expenses of $6.7 million. Operating margin was 16.9% compared with 20.1% in the 2010 period, with a negative impact of 40 basis points from acquisition-related expenses. Excluding Timberland, operating income increased 24% and the coalition operating margin was 20.9%. Jeanswear: Global Jeanswear revenues increased 3% (4% in constant dollars) in the quarter, with growth both domestically and internationally. Domestic revenues rose 1% with healthy growth in the Lee® and Western businesses, offset by a small decline in Mass Market revenues. All three businesses continue to gain market share in their respective channels of distribution driven by successful new product innovations for both male and female consumers. International jeans revenues rose 9% (13% in constant dollars), with growth across all international businesses. In constant dollars, Jeanswear revenues in Asia increased 13%; revenues in Mexico, Latin America and Canada each grew at double-digit rates in the quarter; and European revenues increased 4%. Reflecting the continued impact of higher product costs, Jeanswear operating income and margin both declined in the quarter. Product cost increases have moderated since peak levels seen in the third quarter of 2011, with operating margin comparisons expected to improve beginning in the second half of 2012. Imagewear: Imagewear finished 2011 on a strong note, with fourth quarter revenues rising 10% and growth in both the Image and Licensed Sports Group businesses. Image revenues maintained its trend of double-digit top line growth, with revenues rising by 14% in the quarter, fueled by continued strength in both its Protective Apparel and Industrial uniform businesses. Licensed Sports revenues grew 5%, driven by new women's products and differentiated graphics. Fourth quarter operating income remained relatively stable with the prior year period, with lower operating margin reflecting higher product costs. Sportswear: Total Sportswear revenues rose 1% in the fourth quarter, driven by a 49% increase in Kipling® brand revenues in the U.S. Nautica® brand revenues declined slightly. The Nautica® direct-to-consumer business performed well in the quarter, with revenues up 7% and strong comparable sales performance, and the brand's licensing business also experienced solid growth. The Nautica® wholesale business posted a decline in revenues during the quarter primarily due to a shift in timing of shipments from the fourth quarter into the third. Sportswear operating income and margin both declined in the quarter, due to the impact of higher product costs. Contemporary Brands: Contemporary Brands revenues increased 12% in the quarter, with growth across the 7 For All Mankind®, John Varvatos®, Splendid® and Ella Moss® brands. Building our contemporary brands' direct-to-consumer businesses, including new stores and e-commerce, continues to be an important component of our growth plans for these businesses, and during the quarter direct-to-consumer revenues for our Contemporary Brands coalition grew 24%. The coalition achieved a substantial improvement in profitability in the quarter, reversing the loss of the prior year and achieving an operating margin of 6%. Expansion in International Revenues (in Constant Dollars) International revenues increased 68% in the fourth quarter, with 50 percentage points of the growth attributable to the Timberland acquisition. Organic revenue growth in Europe was 14%. In Asia, organic revenue growth was 22% with The North Face® and Vans® businesses each growing in excess of 30% in the quarter, and Jeanswear revenues rising by 13%. Solid growth also continued in India, where revenues increased 14% during the quarter. For the full year 2011, international revenues grew 37% and accounted for 34% of total revenues compared with 30% in 2010. With more than half its revenues derived from international markets, the Timberland acquisition accounted for 17 percentage points of the total international growth in 2011. Growth in Direct-to-Consumer Revenues Direct-to-consumer revenues increased 53% in the quarter, with 37 percentage points of the growth attributable to the Timberland acquisition. Direct-to-consumer revenues of The North Face®, Vans®, and 7 For All Mankind® brands each achieved growth in excess of 20% in the period. A total of 46 stores were opened across our brands in the quarter and 122 stores during the year, bringing the total number of owned retail stores to 1,068 at the end of 2011 (including 215 Timberland stores). At year-end 2011, direct-to-consumer revenues accounted for 19% of VF's total revenues compared with 18% in 2010. Cash Flow from Operations Reaches Record Level Cash flow from operations reached a record $1,081 million in 2011. The increase in long-term debt reflects the financing of the Timberland acquisition. During the quarter, the incremental short-term borrowings related to the Timberland acquisition were repaid, and at year-end the debt-to-total capital ratio was 32%. Inventories excluding Timberland rose 12%, with 9% of the increase due to higher product costs. 2012 Guidance: Strong Top and Bottom Line Growth “In 2012, our Outdoor & Action Sports business should exceed 50% of total revenues – a new milestone for VF, achieved by a combination of consistent, outstanding organic growth and a track record of successful acquisitions,” said Wiseman. “A big focus for us this year will be on building the foundation to support Timberland's future growth and to strengthen its profitability. We look forward to a year of healthy growth across our coalitions and to delivering another year of record revenues and earnings to our shareholders.” 2012 revenues should increase by approximately 15% (17% in constant dollars), with Timberland accounting for about $1 billion of the growth. Excluding Timberland, revenues should rise by approximately 6% (8% in constant dollars). Adjusted earnings per share is expected to rise to approximately $9.30. Included in this guidance is the anticipated negative impact from 1) foreign currency translation, which is expected to reduce earnings by $0.41 per share, and 2) higher pension expense, which will negatively impact earnings by $0.19 per share. Timberland should earn approximately $1.10 per share in 2012 (excluding acquisition-related expenses estimated at $0.20 per share). On a GAAP basis, earnings per share are expected to increase to approximately $9.10. Gross margin in 2012 should expand by approximately 70 basis points over the 45.8% reported in 2011, as the headwinds posed by higher product costs subside, with all of the improvement occurring in the second half of the year. Operating margin should expand by approximately 20 basis points, which is net of a 30 basis point negative impact from higher pension expense. Timberland's operating margin should exceed 11% in 2012. Excluding Timberland in both 2011 and 2012, the operating margin in 2012 is expected to improve 40 basis points from 13.6% to 14.0%, including a 40 basis point negative impact from higher pension expense. Key points related to our 2012 outlook include: Solid revenue growth across all coalitions, highlighted by 25-to-30% growth in Outdoor & Action Sports including a full year of revenues from Timberland. On an organic basis, Outdoor & Action Sports revenues are expected to rise at a low-teen percentage rate in constant dollars. The North Face® and Vans®brands look forward to another year of strong growth, with both brands anticipating mid-teen revenue growth in constant dollars. Jeanswear, Imagewear, Sportswear and Contemporary Brands are each planning for mid-single-digit revenue growth in 2012. 25-to-30% growth (constant dollars) in international revenues, with Timberland accounting for about half of the growth. International revenues as a percent of total revenues should approach 37% in 2012. 25-to-30% growth in direct-to-consumer revenues, with Timberland accounting for about half of the growth. Growth will be driven by approximately 130 store openings in 2012 and low-single-digit comp store growth, in addition to continued rapid growth in e-commerce revenues. Direct-to-consumer revenues should exceed 20% of total revenues this year. Strong cash flow from operations, which could exceed $1.1 billion.Capital expenditures of approximately $375 million. 2012 will mark a year of investments to support VF's continued growth, including new headquarters for the Outdoor & Action Sports businesses in the U.S. and Europe, new distribution centers in the U.S., Europe and Asia, and a higher number of new retail store openings. Dividend Declared The Board of Directors declared a quarterly cash dividend of $0.72 per share, payable on March 19, 2012, to shareholders of record as of the close of business on March 9, 2012. Statement on Forward Looking Statements Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that 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 in this release include the overall level of consumer demand for apparel; the level of consumer confidence; 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 reliance on a small number of large customers; the financial strength of VF's customers; changing fashion trends and consumer demand; increasing pressure on margins; VF's ability to implement its growth strategy; VF's ability to grow its international and direct-to-consumer businesses; VF's ability to successfully integrate and grow acquisitions; VF's ability to maintain the strength and security of its information technology systems; stability of VF's manufacturing facilities and foreign suppliers; 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 protect trademarks and other intellectual property rights; maintenance by VF's licensees and distributors of the value of VF's brands; foreign currency fluctuations; and legal, regulatory, political and economic risks in international markets. 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 and Quarterly Reports on Form 10-Q. About VF VF Corporation is a global leader in branded lifestyle apparel with more than 30 brands. The company's top six brands are The North Face(R), Wrangler(R), Timberland(R), Vans(R), Lee(R) and Nautica(R); other brands include 7 For All Mankind(R), Eagle Creek(R), Eastpak(R), Ella Moss(R), JanSport(R), John Varvatos(R), Kipling(R), lucy(R), Majestic(R), Napapijri(R), Red Kap(R), Reef(R), Riders(R) , Splendid(R) and Smartwool(R). Webcast Information VF will hold its fourth quarter conference call and webcast today at 8:30 a.m. ET. Interested parties should call 1-888-417-2254 domestic, or 1-719-325-2339 international, to access the call. You may also access this call via the Internet at www.vfc.com. A replay will be available through February 23, 2012 and can be accessed by dialing 1-877-870-5176 domestic, and 1-858-384-5517 international. The pass code is 7411841. A replay also can be accessed at the Company's web site at www.vfc.com.   VF CORPORATIONConsolidated Statements of Income(In thousands, except per share amounts)         Three Months Ended DecemberYear Ended December2011   20102011   2010   Net Sales $ 2,879,431 $ 2,104,415 $ 9,365,477 $ 7,624,599 Royalty Income   30,808     21,824     93,755     77,990     Total Revenues   2,910,239     2,126,239     9,459,232     7,702,589     Costs and Operating Expenses Cost of goods sold 1,595,173 1,135,117 5,128,602 4,105,201 Marketing, administrative and general expenses 963,707 715,853 3,085,839 2,574,790 Impairment of goodwill and intangible assets   -     201,738     -     201,738     2,558,880     2,052,708     8,214,441     6,881,729     Operating Income 351,359 73,531 1,244,791 820,860   Other Income (Expense) Interest income 931 736 4,778 2,336 Interest expense (25,005 ) (16,188 ) (77,578 ) (77,738 ) Miscellaneous, net   3,891     (4,191 )   (7,248 )   4,754     (20,183 )   (19,643 )   (80,048 )   (70,648 )   Income Before Income Taxes 331,176 53,888 1,164,743 750,212   Income Tax Expense (Benefit)   73,182     (1,421 )   274,350     176,700     Net Income 257,994 55,309 890,393 573,512   Net (Income) Loss Attributable to Noncontrolling Interests in Subsidiaries   (676 )   (1,085 )   (2,304 )   (2,150 )   Net Income Attributable to VF Corporation $ 257,318   $ 54,224   $ 888,089   $ 571,362     Earnings Per Share Attributable to VF Corporation Common Stockholders Basic $ 2.33 $ 0.50 $ 8.13 $ 5.25 Diluted 2.28 0.49 7.98 5.18   Weighted Average Shares Outstanding Basic 110,204 108,101 109,287 108,764 Diluted 112,668 110,153 111,288 110,328   Cash Dividends Per Common Share $ 0.72 $ 0.63 $ 2.61 $ 2.43   Basis of presentation: VF operates and reports using a 52/53 week fiscal year ending on the Saturday closest to December 31 of each year. For presentation purposes herein, all references to periods ended December 2011 and December 2010 relate to the 13 week and 52 week fiscal periods ended December 31, 2011 and January 1, 2011, respectively.   VF CORPORATIONConsolidated Balance Sheets(In thousands)         December2011   2010   ASSETSCurrent Assets Cash and equivalents $ 341,228 $ 792,239 Accounts receivable, net 1,120,246 773,083 Inventories 1,453,645 1,070,694 Deferred income taxes 106,717 68,220 Other current assets   166,108     121,824   Total current assets 3,187,944 2,826,060   Property, Plant and Equipment, net 737,451 602,908   Intangible Assets 2,958,463 1,490,925 Goodwill 2,023,460 1,166,638 Other Assets   405,808     371,025     $ 9,313,126   $ 6,457,556     LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities Short-term borrowings $ 281,686 $ 36,576 Current portion of long-term debt 2,744 2,737 Accounts payable 637,116 510,998 Accrued liabilities   744,486     559,164   Total current liabilities 1,666,032 1,109,475   Long-term Debt 1,831,781 935,882 Other Liabilities 1,290,138 550,880   Commitments and Contingencies   Stockholders' Equity Common Stock 110,557 107,938 Additional paid-in capital 2,316,107 2,081,367 Accumulated other comprehensive income (loss) (421,477 ) (268,594 ) Retained earnings   2,520,804     1,940,508   Total equity attributable to VF Corporation 4,525,991 3,861,219   Noncontrolling interests   (816 )   100     Total stockholders' equity   4,525,175     3,861,319     $ 9,313,126   $ 6,457,556       VF CORPORATIONConsolidated Statements of Cash Flows(In thousands)           Year Ended December2011   2010   Operating Activities Net income $ 890,393 $ 573,512 Adjustments to reconcile net income to cash provided by operating activities: Impairment of goodwill and intangible assets - 201,738 Depreciation 127,203 116,837 Amortization of intangible assets 41,708 39,373 Other amortization 29,824 17,186 Stock-based compensation 76,739 63,538 Provision for doubtful accounts 12,490 7,441 Pension funding in excess of expense 46,346 (45,850 ) Deferred income taxes (10,867 ) (92,068 ) Other, net (14,930 ) 29,179 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable (154,487 ) (12,954 ) Inventories (7,509 ) (114,334 ) Other current assets 12,881 (7,689 ) Accounts payable (32,911 ) 140,470 Accrued compensation 2,442 27,817 Accrued income taxes (4,725 ) (14,649 ) Accrued liabilities (10,924 ) 50,889 Other assets and liabilities   77,698     20,846   Cash provided by operating activities 1,081,371 1,001,282   Investing Activities Capital expenditures (170,894 ) (111,640 ) Business acquisitions, net of cash acquired (2,207,065 ) (38,290 ) Trademarks acquired (58,132 ) - Software purchases (20,102 ) (13,610 ) Other, net   (3,840 )   (16,940 ) Cash used by investing activities (2,460,033 ) (180,480 )   Financing Activities Increase (decrease) in short-term borrowing 250,824 (9,741 ) Payments on long-term debt (2,738 ) (203,063 ) Proceeds from long-term debt 898,450 - Payment of debt issuance and hedging costs (55,536 ) - Purchase of Common Stock (7,420 ) (411,838 ) Cash dividends paid (285,722 ) (264,281 ) Proceeds from issuance of Common Stock, net 134,012 137,732 Tax benefits of stock option exercises 33,153 8,599 Buyout of noncontrolling interest (52,440 ) - Other, net   (338 )   (240 ) Cash provided (used) by financing activities 912,245 (742,832 )     Effect of Foreign Currency Rate Changes on Cash   15,406     (17,280 )   Net Change in Cash and Equivalents (451,011 ) 60,690   Cash and Equivalents - Beginning of Year   792,239     731,549     Cash and Equivalents - End of Year $ 341,228   $ 792,239       VF CORPORATIONSupplemental Financial InformationBusiness Segment Information(In thousands)       Three Months Ended December   Year Ended December2011   20102011   2010   Coalition Revenues Outdoor & Action Sports $ 1,619,023 $ 896,537 $ 4,561,998 $ 3,204,657 Jeanswear 711,565 688,487 2,731,770 2,537,591 Imagewear 256,768 233,804 1,025,214 909,402 Sportswear 159,523 157,511 543,515 497,773 Contemporary Brands 128,941 115,266 485,142 438,741 Other   34,419     34,634     111,593     114,425     Total coalition revenues $ 2,910,239   $ 2,126,239   $ 9,459,232   $ 7,702,589       Coalition Profit Outdoor & Action Sports $ 273,975 $ 180,337 $ 828,228 $ 636,720 Jeanswear 86,005 111,903 413,187 431,942 Imagewear 28,758 29,623 145,655 111,174 Sportswear 18,930 21,657 56,312 52,354 Contemporary Brands 7,411 (7,820 ) 35,860 14,046 Other   979     1,004     (1,024 )   (61 )   Total coalition profit 416,058 336,704 1,478,218 1,246,175   Impairment of Goodwill and Intangible Assets * - (201,738 ) - (201,738 ) Corporate and Other Expenses (60,808 ) (65,626 ) (240,675 ) (218,823 ) Interest, net   (24,074 )   (15,452 )   (72,800 )   (75,402 )   Income Before Income Taxes $ 331,176   $ 53,888   $ 1,164,743   $ 750,212       * Goodwill and trademark impairment charges totaling $201.7 million in the fourth quarter of 2010 related to Contemporary Brands.     VF CORPORATIONSupplemental Financial InformationBusiness Segment Information – Constant Currency Basis(In thousands)       Three Months Ended December 2011ExcludeAs ReportedImpact of Foreignunder GAAPCurrency ExchangeConstant Currency   Coalition Revenues Outdoor & Action Sports $ 1,619,023 $ (1,994 ) $ 1,621,017 Jeanswear 711,565 (6,467 ) 718,032 Imagewear 256,768 263 256,505 Sportswear 159,523 - 159,523 Contemporary Brands 128,941 (65 ) 129,006 Other   34,419     -     34,419     Total coalition revenues $ 2,910,239   $ (8,263 ) $ 2,918,502       Coalition Profit Outdoor & Action Sports $ 273,975 $ (284 ) $ 274,259 Jeanswear 86,005 (575 ) 86,580 Imagewear 28,758 48 28,710 Sportswear 18,930 18,930 Contemporary Brands 7,411 (28 ) 7,439 Other   979     -     979     Total coalition profit 416,058 (839 ) 416,897   Impairment of Goodwill and Intangible Assets - - - Corporate and Other Expenses (60,808 ) - (60,808 ) Interest, net   (24,074 )   -     (24,074 )   Income Before Income Taxes $ 331,176   $ (839 ) $ 332,015       Constant Currency Financial Information VF is a global company that reports financial information in U.S. dollars in accordance with generally accepted accounting principles. Foreign currency exchange rate fluctuations affect the amounts reported by VF from translating its foreign revenues and expenses into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure. We use constant currency information to provide a framework to assess how our businesses performed excluding the effects of changes in foreign currency translation rates. Management believes this information is useful to investors to facilitate comparisons of operating results and better identify trends in our businesses.   To calculate coalition revenues and profits on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).   These constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.     VF CORPORATIONSupplemental Financial InformationBusiness Segment Information – Constant Currency Basis(In thousands)       Year Ended December 2011ExcludeAs ReportedImpact of Foreignunder GAAPCurrency ExchangeConstant Currency   Coalition Revenues Outdoor & Action Sports $ 4,561,998 $ 68,837 $ 4,493,161 Jeanswear 2,731,770 22,869 2,708,901 Imagewear 1,025,214 3,251 1,021,963 Sportswear 543,515 - 543,515 Contemporary Brands 485,142 4,802 480,340 Other   111,593     -   111,593     Total coalition revenues $ 9,459,232   $ 99,759 $ 9,359,473       Coalition Profit Outdoor & Action Sports $ 828,228 $ 13,551 $ 814,677 Jeanswear 413,187 3,245 409,942 Imagewear 145,655 807 144,848 Sportswear 56,312 - 56,312 Contemporary Brands 35,860 72 35,788 Other   (1,024 )   -   (1,024 )   Total coalition profit 1,478,218 17,675 1,460,543   Impairment of Goodwill and Intangible Assets - - - Corporate and Other Expenses (240,675 ) - (240,675 ) Interest, net   (72,800 )   -   (72,800 )   Income Before Income Taxes $ 1,164,743   $ 17,675 $ 1,147,068       VF CORPORATIONSupplemental Financial InformationAdjustments Reflecting 2011 Timberland Items and 2010 Impairment Charge(In thousands, except per share amounts)         Three Months Ended December 2011   Three Months Ended December 2010       Timberland       ExcludeContributionTimberlandExcludingExcludeAs ReportedAcquisitionAcquisitionAs AdjustedAs ReportedImpairmentunder GAAPExpensesAs AdjustedExpensesLess Timberland   under GAAP   ChargeAs Adjusted     Total Revenues $ 2,910,239 $ - $ 2,910,239 $ 549,289 $ 2,360,950 $ 2,126,239 $ - $ 2,126,239   Costs and Operating Expenses   2,558,880     6,664     2,552,216     499,313     2,052,903     2,052,708       201,738       1,850,970     Operating Income 351,359 (6,664 ) 358,023 49,976 308,047 73,531 (201,738 ) 275,269 Operating Margin12.1%12.3%9.1%13.0%3.5%12.9%   Other Income (Expense)   (20,183 )   -     (20,183 )   (5,071 )   (15,112 )   (19,643 )   -     (19,643 )   Income Before Income Taxes 331,176 (6,664 ) 337,840 44,905 292,935 53,888 (201,738 ) 255,626   Income Taxes   73,182     (2,089 )   75,271     6,148     69,123     (1,421 )   (59,896 )   58,475     Net Income 257,994 (4,575 ) 262,569 38,757 223,812 55,309 (141,842 ) 197,151   Net Loss Attributable to Noncontrolling Interests in Subsidiaries   (676 )   -     (676 )   -     (676 )   (1,085 )   -     (1,085 )   Net Income Attributable to VF Corporation $ 257,318   $ (4,575 ) $ 261,893   $ 38,757   $ 223,136   $ 54,224   $ (141,842 ) $ 196,066     Earnings Per Share Attributable to VF Corporation Common Stockholders Basic $ 2.33 $ (0.04 ) $ 2.38 $ 0.35 $ 2.02 $ 0.50 $ (1.30 ) $ 1.80 Diluted 2.28 (0.04 ) 2.32 0.34 1.98 0.49 (1.29 ) 1.78   (Earnings per share amounts above may not add due to rounding.)   Non-GAAP Financial Information The 2011 financial information above includes adjustments for the Timberland acquisition, including expenses related to the transaction and operating results for the business since the date of the purchase. In addition, the above 2010 financial information includes an adjustment to exclude the impairment charge taken on goodwill and intangible assets.   These non-GAAP performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The adjusted amounts above may not be comparable to similarly titled measures reported by other companies.     VF CORPORATIONSupplemental Financial InformationAdjustments Reflecting 2011 Timberland Items and 2010 Impairment Charge(In thousands, except per share amounts)         Year Ended December 2011   Year Ended December 2010       Timberland       ExcludeContributionTimberlandExcludingExcludeAs ReportedAcquisitionAcquisitionAs AdjustedAs ReportedImpairmentunder GAAP   ExpensesAs Adjusted   ExpensesLess Timberland   under GAAP   ChargeAs Adjusted     Total Revenues $ 9,459,232 $ 9,459,232 $ 712,935 $ 8,746,297 $ 7,702,589 $ - $ 7,702,589   Costs and Operating Expenses   8,214,441   $ 33,490     8,180,951     622,653     7,558,298     6,881,729       201,738       6,679,991     Operating Income 1,244,791 (33,490 ) 1,278,281 90,282 1,187,999 820,860 (201,738 ) 1,022,598 Operating Margin13.2%13.5%12.7%13.6%10.7%13.3%   Other Income (Expense)   (80,048 )   -     (80,048 )   (7,599 )   (72,449 )   (70,648 )   -     (70,648 )   Income Before Income Taxes 1,164,743 (33,490 ) 1,198,233 82,683 1,115,550 750,212 (201,738 ) 951,950   Income Taxes   274,350     (8,843 )   283,193     15,937     267,256     176,700     (59,896 )   236,596     Net Income 890,393 (24,647 ) 915,040 66,746 848,294 573,512 (141,842 ) 715,354   Net Loss Attributable to Noncontrolling Interests in Subsidiaries   (2,304 )   -     (2,304 )   -     (2,304 )   (2,150 )   -     (2,150 )   Net Income Attributable to VF Corporation $ 888,089   $ (24,647 ) $ 912,736   $ 66,746   $ 845,990   $ 571,362   $ (141,842 ) $ 713,204     Earnings Per Share Attributable to VF Corporation Common Stockholders Basic $ 8.13 $ (0.23 ) $ 8.35 $ 0.61 $ 7.74 $ 5.25 $ (1.30 ) $ 6.56 Diluted 7.98 (0.22 ) 8.20 0.60 7.60 5.18 (1.29 ) 6.46     (Earnings per share amounts above may not add due to rounding.)   Non-GAAP Financial Information The 2011 financial information above includes adjustments for the Timberland acquisition, including expenses related to the transaction and operating results for the business since the date of the purchase. In addition, the above 2010 financial information includes an adjustment to exclude the impairment charge taken on goodwill and intangible assets.   These non-GAAP performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The adjusted amounts above may not be comparable to similarly titled measures reported by other companies.   VF ServicesCindy Knoebel, CFA, 336-424-6189/212-841-7141VP, Corporate Relationscindy_knoebel@vfc.com