e10vq
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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 October 2, 2010
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   (I.R.S. employer
incorporation or organization)   identification number)
105 Corporate Center Boulevard
Greensboro, North Carolina 27408

(Address of principal executive offices)
(336) 424-6000
(Registrant’s telephone number, including area code)
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 and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES þ NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):
             
Large accelerated filer þ    Accelerated filer o    Non-accelerated filer   o
(Do not check if a smaller reporting company)
  Smaller reporting company o 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO þ
On October 30, 2010, there were 108,463,972 shares of the registrant’s Common Stock outstanding.
 
 

 


 

VF CORPORATION
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 EX-31.1
 EX-31.2
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 EX-32.2
 EX-101 INSTANCE DOCUMENT
 EX-101 SCHEMA DOCUMENT
 EX-101 CALCULATION LINKBASE DOCUMENT
 EX-101 LABELS LINKBASE DOCUMENT
 EX-101 PRESENTATION LINKBASE DOCUMENT
 EX-101 DEFINITION LINKBASE DOCUMENT

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Part I — Financial Information
Item 1 — Financial Statements (Unaudited)
VF CORPORATION
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share amounts)
                         
    September     December     September  
    2010     2009     2009  
ASSETS
                       
 
                       
Current Assets
                       
Cash and equivalents
  $ 402,863     $ 731,549     $ 379,148  
Accounts receivable, less allowance for doubtful accounts of: Sept. 2010 - $60,608; Dec. 2009 - $60,380; Sept. 2009 - $61,930
    1,098,858       776,140       1,102,878  
 
                       
Inventories:
                       
Finished products
    994,076       772,458       976,175  
Work in process
    77,920       70,507       71,778  
Materials and supplies
    139,311       115,674       123,198  
 
                 
 
    1,211,307       958,639       1,171,151  
 
                       
Other current assets
    161,345       163,028       275,556  
 
                 
Total current assets
    2,874,373       2,629,356       2,928,733  
 
                       
Property, Plant and Equipment
    1,639,271       1,601,608       1,586,713  
Less accumulated depreciation
    1,041,097       987,430       956,633  
 
                 
 
    598,174       614,178       630,080  
 
                       
Intangible Assets
    1,515,261       1,535,121       1,566,640  
 
                       
Goodwill
    1,370,262       1,367,680       1,472,150  
 
                       
Other Assets
    321,623       324,322       308,563  
 
                 
 
                       
 
  $ 6,679,693     $ 6,470,657     $ 6,906,166  
 
                 
 
                       
LIABILITIES AND STOCKHOLDERS’ EQUITY
                       
 
                       
Current Liabilities
                       
Short-term borrowings
  $ 49,022     $ 45,453     $ 252,175  
Current portion of long-term debt
    2,751       203,179       203,147  
Accounts payable
    482,082       373,186       362,010  
Accrued liabilities
    613,104       470,765       537,725  
 
                 
Total current liabilities
    1,146,959       1,092,583       1,355,057  
 
                       
Long-term Debt
    936,511       938,494       939,143  
 
                       
Other Liabilities
    657,914       626,295       754,398  
 
                       
Commitments and Contingencies
                       
 
                       
Stockholders’ Equity
                       
Common stock, stated value $1; shares authorized, 300,000,000; shares outstanding: Sept. 2010 - 108,144,163; Dec. 2009 - 110,285,132; Sept. 2009 - 110,813,811
    108,144       110,285       110,814  
Additional paid-in capital
    2,002,160       1,864,499       1,842,147  
Accumulated other comprehensive income (loss)
    (229,199 )     (209,742 )     (201,708 )
Retained earnings
    2,057,965       2,050,109       2,105,758  
Noncontrolling interests in subsidiaries
    (761 )     (1,866 )     557  
 
                 
 
                       
Total stockholders’ equity
    3,938,309       3,813,285       3,857,568  
 
                 
 
                       
 
  $ 6,679,693     $ 6,470,657     $ 6,906,166  
 
                 
See notes to consolidated financial statements.

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VF CORPORATION
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
                                 
    Three Months Ended September     Nine Months Ended September  
    2010     2009     2010     2009  
Net Sales
  $ 2,213,151     $ 2,075,510     $ 5,520,184     $ 5,249,619  
Royalty Income
    19,216       18,296       56,166       55,298  
 
                       
 
                               
Total Revenues
    2,232,367       2,093,806       5,576,350       5,304,917  
 
                       
 
                               
Costs and Operating Expenses
                               
Cost of goods sold
    1,195,379       1,165,843       2,970,084       2,996,176  
Marketing, administrative and general expenses
    682,443       610,072       1,858,937       1,709,664  
 
                       
 
    1,877,822       1,775,915       4,829,021       4,705,840  
 
                       
 
                               
Operating Income
    354,545       317,891       747,329       599,077  
 
                               
Other Income (Expense)
                               
Interest income
    610       420       1,600       1,750  
Interest expense
    (20,557 )     (21,325 )     (61,550 )     (65,159 )
Miscellaneous, net
    599       505       8,945       3,148  
 
                       
 
    (19,348 )     (20,400 )     (51,005 )     (60,261 )
 
                       
 
                               
Income Before Income Taxes
    335,197       297,491       696,324       538,816  
 
                               
Income Taxes
    91,943       79,430       178,121       145,343  
 
                       
 
                               
Net Income
    243,254       218,061       518,203       393,473  
 
                               
Net (Income) Loss Attributable to Noncontrolling Interests in Subsidiaries
    (467 )     (141 )     (1,065 )     913  
 
                       
 
                               
Net Income Attributable to VF Corporation
  $ 242,787     $ 217,920     $ 517,138     $ 394,386  
 
                       
 
                               
Earnings Per Common Share Attributable to VF Corporation Common Stockholders
                               
Basic
  $ 2.25     $ 1.97     $ 4.74     $ 3.57  
Diluted
    2.22       1.94       4.68       3.54  
 
                               
Weighted Average Shares Outstanding
                               
Basic
    107,881       110,881       109,093       110,372  
Diluted
    109,190       112,145       110,492       111,471  
 
                               
Cash Dividends Per Common Share
  $ 0.60     $ 0.59     $ 1.80     $ 1.77  
See notes to consolidated financial statements.

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VF Corporation
Consolidated Statements of Comprehensive Income
(Unaudited)
In thousands
                                 
    Three Months     Nine Months  
    Ended September     Ended September  
    2010     2009     2010     2009  
Net Income
  $ 243,254     $ 218,061     $ 518,203     $ 393,473  
 
                       
 
                               
Other Comprehensive Income (Loss):
                               
Foreign currency translation
                               
Gains (losses) arising during the period
    124,889       53,334       (54,361 )     68,598  
Less income tax effect
    (19,473 )     (10,452 )     12,016       (15,818 )
Defined benefit pension plans
                               
Amortization of net deferred actuarial loss
    11,381       15,131       34,132       45,393  
Amortization of prior service cost
    987       1,067       2,961       3,201  
Less income tax effect
    (5,387 )     (6,242 )     (14,011 )     (18,724 )
Derivative financial instruments
                               
Gains (losses) arising during the period
    (36,261 )     (13,583 )     254       (14,859 )
Less income tax effect
    13,969       5,233       (99 )     5,725  
Reclassification to net income for (gains) losses realized
    (8,241 )     4,997       (518 )     (850 )
Less income tax effect
    3,176       (1,924 )     200       327  
Marketable securities
                               
Gains (losses) arising during the period
          478       (408 )     1,710  
Less income tax effect
    417             417        
 
                       
 
                               
Other comprehensive income (loss)
    85,457       48,039       (19,417 )     74,703  
 
                       
 
                               
Comprehensive Income
    328,711       266,100       498,786       468,176  
 
                               
Comprehensive (Income) Loss Attributable to Noncontrolling Interests
    (330 )     (216 )     (1,105 )     796  
 
                       
 
                               
Comprehensive Income Attributable to VF Corporation
  $ 328,381     $ 265,884     $ 497,681     $ 468,972  
 
                       
See notes to consolidated financial statements.

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VF CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
                 
    Nine Months Ended September  
    2010     2009  
Operating Activities
               
Net income
  $ 518,203     $ 393,473  
Adjustments to reconcile net income to cash provided by operating activities:
               
Depreciation
    81,618       78,616  
Amortization of intangible assets
    29,621       29,953  
Other amortization
    12,141       12,346  
Stock-based compensation
    47,591       26,998  
Pension funding less (greater) than expense
    39,637       (35,420 )
Other, net
    54,647       80,601  
Changes in operating assets and liabilities, net of acquisitions:
               
Accounts receivable
    (332,006 )     (237,209 )
Inventories
    (249,593 )     (1,945 )
Other current assets
    (6,584 )     (1,635 )
Accounts payable
    110,382       (79,225 )
Accrued compensation
    24,675       17,128  
Accrued income taxes
    (1,890 )     3,598  
Accrued liabilities
    116,654       3,594  
Other assets and liabilities
    3,528       (26,999 )
 
           
 
               
Cash provided by operating activities
    448,624       263,874  
 
               
Investing Activities
               
Capital expenditures
    (73,592 )     (57,746 )
Business acquisitions, net of cash acquired
    (38,446 )     (207,219 )
Software purchases
    (5,825 )     (9,349 )
Other, net
    (6,842 )     4,175  
 
           
 
               
Cash used by investing activities
    (124,705 )     (270,139 )
 
               
Financing Activities
               
Increase in short-term borrowings
    1,794       196,799  
Payments on long-term debt
    (202,384 )     (2,582 )
Purchase of Common Stock
    (322,206 )     (52,988 )
Cash dividends paid
    (195,999 )     (195,550 )
Proceeds from issuance of Common Stock, net
    80,680       47,418  
Tax benefits of stock option exercises
    3,280       4,648  
 
           
 
               
Cash used by financing activities
    (634,835 )     (2,255 )
 
               
Effect of Foreign Currency Rate Changes on Cash
    (17,770 )     5,824  
 
           
 
               
Net Change in Cash and Equivalents
    (328,686 )     (2,696 )
 
               
Cash and Equivalents — Beginning of Year
    731,549       381,844  
 
           
 
               
Cash and Equivalents — End of Period
  $ 402,863     $ 379,148  
 
           
See notes to consolidated financial statements.

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VF CORPORATION
Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands)
                                         
    VF Corporation Stockholders        
                    Accumulated                
            Additional     Other             Non-  
    Common     Paid-in     Comprehensive     Retained     controlling  
    Stock     Capital     Income (Loss)     Earnings     Interests  
Balance, December 2008
  $ 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, net
    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, December 2009
    110,285       1,864,499       (209,742 )     2,050,109       (1,866 )
Net income
                      517,138       1,065  
Common Stock dividends
                      (195,999 )      
Purchase of treasury stock
    (4,060 )                 (318,147 )      
Stock compensation plans, net
    1,812       137,661             (3,240 )      
Common Stock held in trust for deferred compensation plans, net
    107                   8,103        
Foreign currency translation
                (42,385 )           40  
Defined benefit pension plans
                23,082              
Derivative financial instruments
                (163 )            
Marketable securities
                9              
 
                             
 
                                       
Balance, September 2010
  $ 108,144     $ 2,002,160     $ (229,199 )   $ 2,057,964     $ (761 )
 
                             
See notes to consolidated financial statements.

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VF CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
Note A – Basis of Presentation
VF Corporation (and its subsidiaries, collectively known as “VF”) uses 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 September 2010, December 2009 and September 2009 relate to the fiscal periods ended on October 2, 2010, January 2, 2010 and October 3, 2009, respectively.
The accompanying unaudited 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 (“GAAP”) in the United States of America for complete financial statements. Similarly, the December 2009 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 and nine months ended September 2010 are not necessarily indicative of results that may be expected for any other interim period or for the year ending January 1, 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 December 2009 (“2009 Form 10-K”).
Certain prior year amounts, none of which are material, have been reclassified to conform with the 2010 presentation.
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 balance sheet and requires additional disclosures about transfers of financial assets and any continuing involvement by the transferor. The new guidance did not have any 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 expands disclosures related to fair values of assets and liabilities and valuation techniques used to measure fair value. Additional disclosures have been provided as appropriate.
Note C Acquisition
On March 10, 2010, VF completed the acquisition of its former 50%-owned joint venture that markets VansÒ branded products in the wholesale channel in Mexico. As part of this transaction, VF also acquired the VansÒ 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 $31.0 million. The carrying value of our initial 50% investment, recorded in Other Assets, was $7.9 million at the acquisition date, which included our equity in the net income of the joint venture recognized through the acquisition date. VF recognized a $5.7 million gain in Miscellaneous Income in the first quarter of 2010 from remeasuring its original 50% investment in the joint venture to fair value. Revenues and pretax earnings recognized in VF’s

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operating results for the third quarter of 2010 were $9.8 million and $2.1 million, respectively, and for the year-to-date period since the acquisition date were $20.0 million and $4.1 million (excluding the $5.7 million 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, $23.4 million was assigned to indefinite-lived intangible assets (trademarks) and amortizable intangible assets (customer relationships), and $16.9 million was assigned to goodwill. Goodwill arising from the acquisition related to growth prospects in Mexico, an experienced workforce and synergies with the VansÒ 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.
Note D – Sale of Accounts Receivable
In September 2009, VF entered into an agreement to sell selected trade accounts receivable, on a nonrecourse basis, to a financial institution. This agreement allows VF to have up to $192.5 million of accounts receivable held by the financial institution at any point in time. 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 end of September 2010, December 2009 and September 2009, accounts receivable in the Consolidated Balance Sheets had been reduced by $118.5 million, $74.2 million and $57.6 million, respectively, related to balances sold under this program. During the first nine months of 2010, VF sold $750.9 million of accounts receivable at their stated amounts, less a funding fee of $1.3 million, which was recorded in Miscellaneous Expense. Net proceeds of this program are recognized as part of the change in accounts receivable in cash provided by operating activities in the Consolidated Statements of Cash Flows.
Note E Intangible Assets
                                     
        September 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   $ 447,392     $ 101,704     $ 345,688     $ 361,039  
License agreements
  24 years     179,773       49,564       130,209       137,447  
Trademarks and other
  7 years     15,097       10,001       5,096       6,615  
 
                               
 
                                   
Amortizable intangible assets, net
                        480,993       505,101  
 
                                   
Indefinite-lived intangible assets:
                                   
Trademarks
                        1,034,268       1,030,020  
 
                               
 
                                   
Intangible assets, net
                      $ 1,515,261     $ 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 third quarter and first nine months of 2010 was $9.8 million and $29.7 million, respectively, and is expected to be $39.3 million for the year 2010. Estimated amortization expense for the years 2011 through 2014 is $37.4 million, $34.7 million, $33.1 million and $32.1 million, respectively.

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Note F – Goodwill
                                                 
    Outdoor &                             Contemporary        
In thousands   Action Sports     Jeanswear     Imagewear     Sportswear     Brands     Total  
Balance, December 2009
  $ 535,535     $ 238,930     $ 56,703     $ 157,314     $ 379,198     $ 1,367,680  
Reclassification of lucy business unit
    39,344                         (39,344 )      
2010 acquisition
    16,938                               16,938  
Adjustment to contingent consideration
    (78 )                             (78 )
Currency translation
    (10,548 )     (1,406 )                 (2,324 )     (14,278 )
 
                                   
 
                                               
Balance, September 2010
  $ 581,191     $ 237,524     $ 56,703     $ 157,314     $ 337,530     $ 1,370,262  
 
                                   
Balances at December 2009 are net of impairment charges recorded during 2009, as follows: Outdoor & Action Sports – $31.1 million, Sportswear – $58.5 million and Contemporary Brands – $12.3 million.
Note G – Pension Plans
VF’s pension cost was composed of the following components:
                                 
    Three Months     Nine Months  
    Ended September     Ended September  
In thousands   2010     2009     2010     2009  
Service cost – benefits earned during the year
  $ 4,076     $ 3,726     $ 12,236     $ 11,178  
Interest cost on projected benefit obligations
    19,116       17,950       57,340       53,850  
Expected return on plan assets
    (19,183 )     (13,379 )     (57,538 )     (40,137 )
Amortization of:
                               
Net deferred actuarial loss
    11,381       15,131       34,132       45,393  
Prior service cost
    987       1,067       2,961       3,201  
 
                       
 
                               
Net periodic pension cost
  $ 16,377     $ 24,495     $ 49,131     $ 73,485  
 
                       
During the first nine months of 2010, VF made contributions totaling $10.7 million to its defined benefit pension plans. VF currently anticipates making additional contributions totaling $1.1 million during the remainder of 2010. In addition, although not required under applicable regulations, VF is evaluating additional contributions of up to $100 million to its domestic pension plan during the remainder of the year.
Note H – Business Segment Information
VF’s businesses are grouped into product categories, and by brands within those product categories, for internal financial reporting used by management. These groupings of businesses within VF are referred to as “coalitions” and are the basis for VF’s reportable business segments. Financial information for VF’s reportable segments is as follows:

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    Three Months     Nine Months  
    Ended September     Ended September  
In thousands   2010     2009     2010     2009  
Coalition revenues:
                               
Outdoor & Action Sports
  $ 1,045,111     $ 916,409     $ 2,308,120     $ 2,058,228  
Jeanswear
    671,023       664,801       1,849,104       1,877,605  
Imagewear
    243,075       221,246       675,598       643,203  
Sportswear
    129,011       149,050       340,262       356,935  
Contemporary Brands
    113,303       112,225       323,475       291,478  
Other
    30,844       30,075       79,791       77,468  
 
                       
 
                               
Total coalition revenues
  $ 2,232,367     $ 2,093,806     $ 5,576,350     $ 5,304,917  
 
                       
 
                               
Coalition profit:
                               
Outdoor & Action Sports
  $ 247,768     $ 204,450     $ 461,995     $ 353,431  
Jeanswear
    118,155       111,283       319,372       268,244  
Imagewear
    32,719       19,521       81,551       61,476  
Sportswear
    13,789       23,576       30,697       35,003  
Contemporary Brands
    5,198       12,255       22,122       35,232  
Other
    170       912       (1,065 )     283  
 
                       
 
                               
 
                               
Total coalition profit
    417,799       371,997       914,672       753,669  
 
                               
Corporate and other expenses
    (62,655 )     (53,601 )     (158,398 )     (151,444 )
Interest, net
    (19,947 )     (20,905 )     (59,950 )     (63,409 )
 
                       
 
                               
Income before income taxes
  $ 335,197     $ 297,491     $ 696,324     $ 538,816  
 
                       
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 the change in internal management reporting beginning in 2010.
Note I — Capital and Accumulated Other Comprehensive Income (Loss)
Common stock outstanding is net of shares held in treasury and, in substance, retired. There were 17,910,533 treasury shares at September 2010, 13,943,457 at December 2009 and 13,162,657 at September 2009. 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, 246,410 shares of VF Common Stock at September 2010, 241,446 shares at December 2009 and 256,221 shares at September 2009 were held in connection with deferred compensation plans. These shares, having a cost of $10.6 million, $11.0 million and $11.5 million at each of the respective dates, are treated as treasury shares for financial reporting purposes.
There are 25,000,000 authorized shares of Preferred Stock, $1 par value, of which none are outstanding.
Comprehensive income includes net income and specified components of other comprehensive income. Other comprehensive income (“OCI”) consists of certain changes in assets and liabilities that are not included in net income under GAAP but are instead deferred and accumulated within a separate component of stockholders’ equity in the balance sheet. VF’s comprehensive income is presented in the Consolidated Statements of Comprehensive Income. The deferred components of other comprehensive income (loss) are reported, net of related income taxes, in Accumulated Other Comprehensive Income (Loss) in Stockholders’ Equity, as follows:

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    September     December     September  
In thousands   2010     2009     2009  
Foreign currency translation
  $ 17,286     $ 59,671     $ 74,866  
Defined benefit pension plans
    (242,888 )     (265,970 )     (261,121 )
Derivative financial instruments
    (6,343 )     (6,180 )     (16,347 )
Marketable securities
    2,746       2,737       894  
 
                 
 
                       
Accumulated other comprehensive income (loss)
  $ (229,199 )   $ (209,742 )   $ (201,708 )
 
                 
Note J – Stock-based Compensation
During the first nine months of 2010, VF granted options for 1,312,072 shares of Common Stock at a weighted average exercise price of $74.98, equal to the market value of VF Common Stock on the option grant dates. 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, with the following assumptions: expected volatility ranging from 24% to 39%, with a weighted average of 35%; expected term of 5.5 to 7.6 years; expected dividend yield of 3.7%; and a risk-free interest rate ranging from 0.2% at six months to 3.7% at 10 years. The resulting weighted average fair value of these options at their grant dates was $18.46 per option.
Also during the first nine months of 2010, VF granted 324,302 performance-based restricted stock units that entitle the recipients 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 weighted average fair value of the restricted stock units at the respective grant dates was $72.10 per unit. VF also granted 70,000 shares of restricted VF Common Stock with a weighted average fair value at the grant dates of $82.80 per share and 37,000 restricted stock units with a fair value at the grant date of $87.05 per share. These shares and units will vest in 2014, assuming continuation of employment by the grantees through the vesting dates.
Note K – Income Taxes
The effective income tax rate was 25.6% for the first nine months of 2010, compared with 27.0% 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 $13.0 million tax benefit related to refund claims in a foreign jurisdiction. The effective tax rate for the full year 2009 was 30.0%, which included a 3.7% unfavorable impact from nondeductible goodwill impairment charges.
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 this examination to the IRS Appeals office. During the third quarter of 2010, the IRS commenced its examination of tax years 2007 and 2008. 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 12 months.
The amount of unrecognized tax benefits increased by $8.7 million during the first nine months of 2010 primarily due to an $8.3 million increase during the first quarter of 2010 related to positions taken in prior periods. Management believes that it is reasonably possible that the amount of unrecognized income tax

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benefits may decrease during the next 12 months by approximately $29.1 million, of which $28.1 million would reduce income tax expense, due to the completion of audits and other settlements with tax authorities and the expiration of statutes of limitations. In addition, VF is pursuing potential refund claims in various tax jurisdictions that could reduce income tax expense in a future period.
Note L – Earnings Per Share
                                 
    Three Months     Nine Months  
    Ended September     Ended September  
In thousands, except per share amounts   2010     2009     2010     2009  
Earnings per common share – basic:
                               
Net income attributable to VF Corporation common stockholders
  $ 242,787     $ 217,920     $ 517,138     $ 394,386  
 
                       
 
                               
Weighted average Common Stock outstanding
    107,881       110,881       109,093       110,372  
 
                       
 
                               
Earnings per common share attributable to VF Corporation common stockholders
  $ 2.25     $ 1.97     $ 4.74     $ 3.57  
 
                       
 
                               
Earnings per common share – diluted:
                               
Net income attributable to VF Corporation common stockholders
  $ 242,787     $ 217,920     $ 517,138     $ 394,386  
 
                       
 
                               
Weighted average Common Stock outstanding
    107,881       110,881       109,093       110,372  
Stock options and other dilutive securities
    1,309       1,264       1,399       1,099  
 
                       
Weighted average Common Stock and dilutive securities outstanding
    109,190       112,145       110,492       111,471  
 
                       
 
                               
Earnings per common share attributable to VF Corporation common stockholders
  $ 2.22     $ 1.94     $ 4.68     $ 3.54  
 
                       
Outstanding options to purchase 2.4 million shares and 2.5 million shares of Common Stock for the three and nine months ended September 2010, respectively, and outstanding options to purchase 2.7 million shares and 4.6 million shares for the three and nine months ended September 2009, respectively, were excluded from the computations of diluted earnings per share because the effect of their inclusion would have been antidilutive. In addition, performance-based restricted stock units were excluded from the computation of diluted earnings per share for the three and nine month periods ended September 2010 and 2009 because their performance factor is not known until the annual financial results are available.
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 distinguish 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

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reported at fair value are classified in a three level hierarchy that prioritizes the inputs used in the valuation process. 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. 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 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:

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            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)
September 2010
                               
Financial assets:
                               
Cash equivalents:
                               
Money market funds
  $ 132,213     $ 132,213     $     $  
Time deposits
    109,682       109,682              
Derivative instruments
    8,527             8,527        
Investment securities:
                               
Held for deferred compensation plans
    178,160       140,639       37,521        
Other
    10,073       10,073              
 
                               
Financial liabilities:
                               
Derivative instruments
    43,417             43,417        
Deferred compensation
    205,451             205,451        
 
                               
December 2009
                               
Financial assets:
                               
Cash equivalents:
                               
Money market funds
  $ 372,516     $ 372,516     $     $  
Time deposits
    81,554       81,554              
Derivative instruments
    8,536             8,536        
Investment securities:
                               
Held for deferred compensation plans
    175,198       133,764       41,434        
Other
    7,108       7,108              
 
                               
Financial liabilities:
                               
Derivative instruments
    13,587             13,587        
Deferred compensation
    199,831             199,831        
Derivative instruments represent unrealized gains or losses on foreign currency forward exchange contracts, which are the differences between (i) the functional currency value of the foreign currency to be received or paid at the contracts’ settlement date and (ii) the functional currency value to be sold or purchased at the forward exchange rate at the balance sheet dates. VF purchases investment securities that substantially mirror liabilities to participants in VF’s nonqualified deferred compensation plans. These securities, held in an irrevocable trust, consist of mutual funds (classified as Level 1) and a separately managed fixed income fund (classified as Level 2). Fair value of the separately managed fixed income fund included in investment securities is its daily net asset value. Fair value of liabilities under deferred compensation plans is the amount payable to participants, based on the fair value of participant-directed investment selections.
The carrying value of all other financial assets and financial liabilities is their cost, which may differ from fair value. At September 2010 and December 2009, the carrying value of VF’s cash held as demand deposits, accounts receivable, life insurance contracts, short-term borrowings, accounts payable and accrued liabilities approximated their fair value. At September 2010 and December 2009, the carrying value of VF’s long-term debt, including the current portion, was $939.3 million and $1,141.7 million, respectively,

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compared with fair value of $1,036.1 million and $1,202.6 million at those dates. Fair value for long-term debt was estimated based on quoted market prices or values of comparable borrowings.
Note N — Derivative Financial Instruments and Hedging Activities
     Summary of derivative instruments — All of VF’s derivative instruments are forward exchange contracts with maturities of up to 20 months and 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. Notional balances for derivative contracts outstanding at September 2010, December 2009 and September 2009 totaled $1,520 million, $857 million and $889 million, respectively, and consisted primarily of contracts hedging exposures to the euro, British pound, Mexican peso, Polish zloty and Canadian dollar. 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  
    September     December     September     September     December     September  
In thousands   2010     2009     2009     2010     2009     2009  
Foreign exchange contracts designated as hedging instruments
  $ 18,738     $ 11,183     $ 6,038     $ 54,264     $ 16,769     $ 27,303  
 
                                               
Foreign exchange contracts not designated as hedging instruments
    1,211       560       2,309       575       25       64  
 
                                   
 
                                               
Total derivatives
  $ 19,949     $ 11,743     $ 8,347     $ 54,839     $ 16,794     $ 27,367  
 
                                   
Outstanding derivatives 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   September 2010   December 2009   September 2009
Other current assets
  $ 5,465     $ 6,843     $ 6,322  
Accrued current liabilities
    (35,111 )     (13,476 )     (24,591 )
Other assets (noncurrent)
    3,062       1,693       232  
Other liabilities (noncurrent)
    (8,306 )     (111 )     (983 )
     Fair value hedges — VF enters into derivative contracts to hedge intercompany loans between the United States and a foreign subsidiary and between two foreign subsidiaries having different functional currencies. Following is a summary of the effects of fair value hedging relationships included in VF’s Consolidated Statements of Income:

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In thousands   Location                                
    of Gain                           Location of    
    (Loss) on                   Hedged Items   Gain (Loss)   Gain (Loss) on
Fair Value   Derivatives   Gain (Loss) on Derivatives   in Fair Value   Recognized   Related Hedged Items
Hedging   Recognized   Recognized in Income   Hedge   on Related   Recognized in Income
Relationships   in Income   Three Months   Nine Months   Relationships   Hedged Items   Three Months   Nine Months
Periods ended September 2010                                                
 
  Miscellaneous                           Miscellaneous                
Foreign
  income                   Advances —   income                
exchange
  (expense)   $ (2,222 )   $ 20,862     intercompany   (expense)   $ 1,755     $ (21,246 )
 
                                                       
Periods ended September 2009                                                
 
  Miscellaneous                           Miscellaneous                
Foreign
  income                   Advances —   income                
exchange
  (expense)   $ (5,564 )   $ 2,540     intercompany   (expense)   $ 5,456     $ (3,343 )
     Cash flow hedges — VF uses derivative contracts to hedge a portion of the exchange risk for its forecasted inventory purchases and production costs and for its forecasted cash receipts arising from sales of inventory. In addition, VF hedges the receipt in the United States of forecasted intercompany royalties from its foreign subsidiaries. As discussed in “derivative contracts not designated as hedges” below, cash flow hedges of forecasted cash receipts are dedesignated as hedges when the sale is recorded, and hedge accounting is not applied after that date. Following is a summary of the effects of cash flow hedging relationships included in VF’s Consolidated Statements of Income:
In thousands
                                         
                    Location of        
                    Gain (Loss)     Gain (Loss) Reclassified  
Cash Flow   Gain (Loss) on Derivatives     Reclassified from     from Accumulated  
Hedging   Recognized in OCI     Accumulated     OCI into Income  
Relationships   Three Months     Nine Months     OCI into Income     Three Months     Nine Months  
Periods ended September 2010                                
Foreign exchange
  $ (36,261 )   $ 254     Net sales   $ 432     $ (832 )
 
                  Cost of goods sold     8,186       2,473  
 
                  Miscellaneous                
 
                  income (expense)     (406 )     (1,210 )
Interest rate
              Interest expense     29       87  
 
                               
 
                                       
Total
  $ (36,261 )   $ 254             $ 8,241     $ 518  
 
                               
 
                                       
Periods ended September 2009                                
Foreign exchange
  $ (13,583 )   $ (14,859 )   Net sales   $ 2,322     $ 2,245  
 
                  Cost of goods sold     (6,208 )     (1,215 )
 
                  Miscellaneous                
 
                  income (expense)     (1,010 )     (267 )
Interest rate
              Interest expense     29       87  
 
                               
 
                                       
Total
  $ (13,583 )   $ (14,859 )           $ (4,867 )   $ 850  
 
                               
Amounts recognized in earnings in the three and nine month periods ended September 2010 and September 2009 for the ineffective portion of cash flow hedging relationships were not significant.
At September 2010, Accumulated OCI included $1.7 million of net deferred pretax gains for foreign exchange contracts that are expected to be reclassified to earnings during the next 12 months. Actual

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amounts to be reclassified to earnings will depend on exchange rates when currently outstanding derivative contracts are settled. In addition, VF entered into an interest rate swap derivative contract in 2003 to hedge the interest rate risk for issuance of long-term debt due in 2033. The contract was terminated concurrent
with the issuance of the debt, with the realized gain deferred in Accumulated OCI. The remaining pretax deferred gain of $2.7 million in Accumulated OCI at September 2010 will be reclassified into earnings over the remaining term of the debt.
     Net investment hedges — In limited instances, VF also hedges the risk of variability of its investment in foreign subsidiaries. Changes in the fair value of derivatives designated as net investment hedges, except for any ineffective portion, are reported as a component of OCI and deferred in Accumulated OCI, along with the foreign currency translation adjustments on that investment. Upon settlement of net investment hedges, cash flows are classified in investing activities in the Consolidated Statements of Cash Flows. No amounts were recognized in earnings for the ineffective portion of net investment hedges. Following is a summary of the effects on net investment hedging relationships included in VF’s Consolidated Statements of Income:
In thousands
                                         
                    Location of        
Net                   Gain (Loss)     Gain (Loss) Reclassified  
Investment   Gain (Loss) on Derivatives     Reclassified from     from Accumulated  
Hedging   Recognized in OCI     Accumulated     OCI into Income  
Relationships   Three Months     Nine Months     OCI into Income     Three Months     Nine Months  
Periods ended September 2010
                                       
Foreign exchange
  $ (87 )   $ (87 )   Miscellaneous income (expense) *   $     $  
 
                               
Total
  $ (87 )   $ (87 )           $     $  
 
                               
 
*   To be recognized as a gain (loss) on the sale or substantial liquidation of the hedged net investment.
     Derivative contracts not designated as hedges — As noted in a preceding section, cash flow hedges of forecasted cash receipts are dedesignated as hedges when the forecasted sale is recognized, and accordingly, hedge accounting is not applied after that date. These derivatives remain outstanding and serve as an economic hedge of foreign currency exposures related to the ultimate collection of the trade receivables. During the period hedge accounting is not applied, changes in the fair value of the derivative contracts are recognized in earnings. For the three and nine months ended September 2010, VF recorded net losses of $1.1 million and $3.1 million, respectively, in Miscellaneous Income (Expense) for derivatives no longer designated as hedging instruments, effectively offsetting the net remeasurement gains on the related accounts receivable. For the three and nine months ended September 2009, VF recorded net losses of $1.4 million and $1.5 million, respectively, in Miscellaneous Income (Expense) for derivatives no longer designated as hedging instruments.
Note O — Recently Issued Accounting Standards
There is no new accounting guidance issued by the FASB but not effective until after September 2010 that is expected to have a significant effect on VF’s consolidated financial position, results of operations or disclosures.
Note P — Subsequent Event
VF’s Board of Directors declared a quarterly cash dividend of $0.63 per share, payable on December 20, 2010 to shareholders of record on December 10, 2010.

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Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
          Highlights of the Third Quarter of 2010
  Revenues grew to a record $2,232 million, an increase of 7% over the prior year quarter, reflecting organic growth in nearly all of our business segments. The increase in revenues was led by growth in The North Faceâ and Vansâ brands of 17% and 19%, respectively.
  Our business in Asia continued to experience significant growth, with revenues up 37% over the prior year quarter.
  VF’s direct-to-consumer business grew 10% over the prior year quarter, driven by both new store openings and comp store revenue growth. The direct-to-consumer businesses of The North Faceâ, Vansâ, 7 for All Mankindâ and lucyâ each achieved double-digit revenue growth in the quarter.
  Gross margin reached a third quarter record of 46.5%.
  Marketing spending increased 35% in the quarter as we continued to invest in our high growth, highly profitable brands and initiatives.
  Earnings per share increased by 14% to a record $2.22 from $1.94 in the prior year quarter. (All per share amounts are presented on a diluted basis.)
  Our balance sheet remains strong with cash of $402.9 million and a debt to total capital ratio of 20.1%. We repaid $200.0 million of 8.5% long-term debt at its scheduled maturity and have over $1.3 billion of available liquidity under committed bank credit lines. There are no additional long-term debt payments due until 2017.
  Operating cash flow was a record $448.6 million in the first nine months of 2010.
  In October 2010, the Board of Directors raised the quarterly cash dividend by $0.03 to $0.63 per share, a 5% increase over the prior quarterly rate.
Analysis of Results of Operations
          Consolidated Statements of Income
The following table presents a summary of the changes in our Total Revenues from the comparable periods in 2009:
                 
    Third Quarter     Nine Months  
    2010     2010  
    Compared     Compared  
In millions   with 2009     with 2009  
Total revenues — 2009 periods
  $ 2,094     $ 5,305  
Impact of foreign currency translation
    (34 )     (5 )
Organic growth
    162       243  
Acquisition in prior year (to anniversary date)
          13  
Acquisition in current year
    10       20  
 
           
 
               
Total revenues — 2010 periods
  $ 2,232     $ 5,576  
 
           

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Organic growth in Total Revenues was driven primarily by unit volume increases.
During the third quarter and first nine months of 2010, approximately 32% and 31%, respectively, of Total Revenues were in international markets. We translate the financial statements of our foreign businesses from their functional currencies into the U.S. dollar, VF’s reporting currency. A stronger U.S. dollar in relation to the functional currencies where VF conducts its international business (primarily Europe and its euro-based countries) negatively impacted revenue comparisons by $34 million in the third quarter of 2010 and $5 million in the first nine months of 2010, compared with the respective 2009 periods. The weighted average translation rate was $1.30 per euro for the third quarter of 2010 and $1.32 per euro for the first nine months of 2010, compared with $1.43 for the prior year quarter and $1.37 for the first nine months of 2009. If the U.S. dollar remains at the exchange rate in effect at the end of September 2010 ($1.37 per euro), reported revenues for the fourth quarter of 2010 will be negatively impacted compared with the fourth quarter of 2009.
See the “Information by Business Segment” section below for a more detailed discussion of Total Revenue changes from the prior year periods.
The following table presents the percentage relationship to Total Revenues for components of our Consolidated Statements of Income:
                                 
    Third Quarter   Nine Months
    2010   2009   2010   2009
Gross margin (total revenues less cost of goods sold)
    46.5 %     44.3 %     46.7 %     43.5 %
Marketing, administrative and general expenses
    30.6       29.1       33.3       32.2  
 
                               
 
                               
Operating income
    15.9 %     15.2 %     13.4 %     11.3 %
 
                               
The gross margin percentages in the third quarter and first nine months of 2010 increased over the comparable 2009 periods by 2.2% and 3.2%, respectively. Approximately one-half of the improvement in gross margin percentage in both 2010 periods resulted from lower product costs. The primary components of the remainder of the improvement in both periods were (i) favorable change in mix of our business, including the growth of our direct-to-consumer business where gross margins are improving and exceed those in our wholesale business, (ii) lower levels of and improved profitability on the disposal of distressed inventories and (iii) favorable foreign currency transaction impact compared with the prior year periods.
The ratio of Marketing, Administrative and General Expenses as a percentage of Total Revenues increased 1.5% in the third quarter of 2010 and 1.1% in the first nine months of 2010 over the comparable prior year periods. An increase of 1.1% in the third quarter of 2010 and 0.7% in the first nine months of 2010 over the prior year periods was driven by incremental marketing spending as we continue to invest in our high growth, highly profitable brands and initiatives. The 2010 ratios also increased due to the changing mix of our business, including the growth of our direct-to-consumer business where these ratios are higher than those in our wholesale business. These increases were partially offset by lower pension expense in 2010, which reduced this ratio by 0.5% in the third quarter and 0.6% in the first nine months of 2010 compared with the prior year periods.
Interest expense decreased $0.8 million in the third quarter of 2010 and $3.6 million in the first nine months of 2010, from the comparable periods in 2009, due to lower short-term borrowings. Average interest-bearing debt outstanding totaled $1,188 million for the first nine months of 2010 and $1,410 million for the first nine months of 2009. The weighted average interest rate on total outstanding debt was 6.7% for the first nine months of 2010 and 6.0% for the comparable period in 2009. The increase in the weighted average interest rate in 2010 resulted from a reduction in commercial paper borrowings, which bear lower interest rates.

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In March 2010, VF acquired the remaining 50% equity interest in a joint venture that markets Vansâ branded products in Mexico (“Vans Mexico”). In connection with that acquisition, VF recognized a $5.7 million gain in Miscellaneous Income from remeasuring its previous 50% investment in the joint venture to fair value.
The effective income tax rate was 25.6% for the first nine months of 2010, compared with 27.0% for the first nine months of 2009. The lower rate in 2010 was due primarily to a higher percentage of income in lower tax jurisdictions outside the United States and a $13.0 million tax benefit related to refund claims in a foreign jurisdiction. We expect the 2010 annual effective tax rate to be approximately 25%. The effective tax rate for the full year 2009 was 30.0%, which included a 3.7% unfavorable impact from nondeductible goodwill impairment charges.
Net Income Attributable to VF Corporation for the third quarter of 2010 increased to $2.22 per share, compared with $1.94 per share in the comparable 2009 quarter. Net Income Attributable to VF Corporation for the first nine months of 2010 increased to $4.68 per share, compared with $3.54 per share in the first nine months of 2009. The increases resulted primarily from improved operating performance, as discussed in the “Information by Business Segment” section below. The third quarter and first nine months of 2010 also benefited by $0.05 and $0.15 per share, respectively, from lower pension expense as discussed above. The translation of foreign currencies into a weaker U.S. dollar unfavorably impacted earnings in the third quarter of 2010 by $0.06 per share, but the impact in the first nine months of 2010 was not significant. The tax refund claims mentioned above benefited the first nine months of 2010 by $0.12 per share, partially offset by $0.09 per share in restructuring expenses related primarily to actions taken to reduce product costs.
          Information by Business Segment
VF’s businesses are grouped into product categories, and by brands within those product categories, for internal financial reporting used by management. These groupings of businesses within VF are referred to as “coalitions” and are the basis for VF’s reportable business segments.
See Note H to the Consolidated Financial Statements for a summary of our results of operations by coalition, along with a reconciliation of Coalition Profit to Income Before Income Taxes. 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 the change in internal management reporting beginning in 2010.
The following tables present a summary of the changes in our Coalition Revenues for the third quarter and first nine months of 2010 from the comparable periods in 2009:

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    Third Quarter  
    Outdoor &                             Contemporary        
In millions   Action Sports     Jeanswear     Imagewear     Sportswear     Brands     Other  
Coalition revenues — 2009 period
  $ 916     $ 665     $ 221     $ 149     $ 112     $ 31  
Impact of foreign currency translation
    (28 )     (5 )     1             (2 )      
Organic growth
    147       11       21       (20 )     3        
Acquisition in current year
    10                                
 
                                   
 
                                               
Coalition revenues — 2010 period
  $ 1,045     $ 671     $ 243     $ 129     $ 113     $ 31  
 
                                   
                                                 
    Nine Months  
    Outdoor &                             Contemporary        
In millions   Action Sports     Jeanswear     Imagewear     Sportswear     Brands     Other  
Coalition revenues — 2009 period
  $ 2,058     $ 1,878     $ 643     $ 357     $ 291     $ 78  
Impact of foreign currency translation
    (16 )     10       4             (3 )      
Organic growth
    246       (39 )     29       (17 )     22       2  
Acquisition in prior year (to anniversary date)
                            13        
Acquisition in current year
    20                                
 
                                   
 
                                               
Coalition revenues — 2010 period
  $ 2,308     $ 1,849     $ 676     $ 340     $ 323     $ 80  
 
                                   
The following tables present a summary of the changes in our Coalition Profit for the third quarter and first nine months of 2010 from the comparable periods in 2009:
                                                 
    Third Quarter  
    Outdoor &                             Contemporary        
In millions   Action Sports     Jeanswear     Imagewear     Sportswear     Brands     Other  
Coalition profit — 2009 period
  $ 204     $ 111     $ 20     $ 24     $ 12     $ 1  
Impact of foreign currency translation
    (6 )                              
Operations
    49       7       13       (10 )     (7 )      
 
                                   
 
                                               
Coalition profit — 2010 period
  $ 247     $ 118     $ 33     $ 14     $ 5     $ 1  
 
                                   
                                                 
    Nine Months  
    Outdoor &                             Contemporary        
In millions   Action Sports     Jeanswear     Imagewear     Sportswear     Brands     Other  
Coalition profit — 2009 period
  $ 353     $ 268     $ 61     $ 35     $ 35     $ 2  
Impact of foreign currency translation
    (3 )     5       1             (1 )      
Operations
    112       46       20       (4 )     (12 )     (3 )
 
                                   
 
                                               
Coalition profit — 2010 period
  $ 462     $ 319     $ 82     $ 31     $ 22     $ (1 )
 
                                   

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The following sections discuss changes in revenues and profitability by coalition.
          Outdoor & Action Sports:
                                                 
    Third Quarter   Nine Months
                    Percent                   Percent
Dollars in millions   2010   2009   Change   2010   2009   Change
Coalition revenues
  $ 1,045.1     $ 916.4       14.0 %   $ 2,308.1     $ 2,058.2       12.1 %
Coalition profit
    247.8       204.5       21.2 %     462.0       353.4       30.7 %
Operating margin
    23.7 %     22.3 %             20.0 %     17.2 %        
Outdoor & Action Sports, our largest coalition, achieved record third quarter revenues, operating income and operating margin in 2010. The increase in revenues was driven by growth in The North Faceâ and Vansâ brands of 17% and 19%, respectively, over the prior year quarter. These brands experienced growth in both domestic and international markets. Direct-to-consumer revenues for this Coalition rose 18% in the quarter, with double-digit growth in our The North Faceâ, Vansâ and lucyâ retail businesses as we benefited from the opening of new retail stores, growth in comp store sales and the expansion of e-commerce business. Coalition Revenues in Asia increased 38% in the third quarter of 2010 over the prior year period.
The increase in revenues in our Outdoor & Action Sports businesses in the first nine months of 2010 over the prior year period was also driven by the performance of our The North Faceâ and Vansâ brands, whose global revenues increased 14% and 21%, respectively, over the prior year period. In addition, the Coalition’s direct-to-consumer revenues increased 20%, and revenues in Asia grew 32% in the first nine months of 2010 compared with the 2009 period.
The increase in the operating margin percentage in both periods was driven by (i) improved gross margin percentages of 1.9% in the third quarter of 2010 and 2.8% in the first nine months of 2010, resulting from improvements in owned retail store performance and lower levels of and improved profitability on the disposal of distressed inventories, and (ii) improved leverage of operating expenses on a higher level of revenues. These improvements in operating margin in both 2010 periods were partially offset by significant increases in marketing spending and other brand-building investments that negatively impacted operating margin comparisons by 1.4% in the third quarter of 2010 and 0.8% in the first nine months of 2010.
          Jeanswear:
                                                 
    Third Quarter   Nine Months
                    Percent                   Percent
Dollars in millions   2010   2009   Change   2010   2009   Change
Coalition revenues
  $ 671.0     $ 664.8       0.9 %   $ 1,849.1     $ 1,877.6       (1.5 )%
Coalition profit
    118.2       111.3       6.2 %     319.4       268.2       19.1 %
Operating margin
    17.6 %     16.7 %             17.3 %     14.3 %        
The increase in Coalition Revenues in the third quarter of 2010 was driven by 5% revenue growth in our domestic jeanswear businesses, offset by a net decline in our international jeanswear businesses. Domestic revenues rose 5% with growth in all three major businesses: mass market revenues grew 7% in the quarter due to the continued strength in our core Wranglerâ and Ridersâ businesses, and revenues in our Leeâ and Western businesses rose 1% and 5%, respectively. International jeanswear revenues declined 7% in the third

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quarter of 2010 due primarily to the 2009 exit of our European mass market business, negative foreign currency translation impacts and difficult economic conditions in Europe. These declines were partially offset by a 44% increase in Jeanswear revenues in Asia, as well as growth in each of our Mexico, Latin America and Canada jeanswear businesses.
The decline in our Jeanswear Coalition Revenues in the first nine months of 2010 was driven primarily by declines in our European jeanswear business as noted above. Domestic revenues were relatively flat, and Asia jeanswear revenues increased 34% in comparison with the first nine months of 2009.
The improvement in operating margin in the third quarter and first nine months of 2010 resulted from increasing gross margin percentages of 1.6% in the third quarter of 2010 and 4.5% in the first nine months of 2010 reflecting (i) lower product costs, particularly in our U.S. jeanswear businesses, and (ii) lower levels of and improved profitability on the disposal of distressed inventories. Operating margin comparisons in 2010 also benefited from the 2009 exit of the European mass market business, which had operating margins that were well below the Coalition average. These benefits were partially offset by increased marketing spending and other brand-building investments that negatively impacted operating margin comparisons by 0.8% in the third quarter of 2010 and 0.7% in the first nine months of 2010.
          Imagewear:
                                                 
    Third Quarter   Nine Months
                    Percent                   Percent
Dollars in millions   2010   2009   Change   2010   2009   Change
Coalition revenues
  $ 243.1     $ 221.2       9.9 %   $ 675.6     $ 643.2       5.0 %
Coalition profit
    32.7       19.5       67.6 %     81.6       61.5       32.7 %
Operating margin
    13.5 %     8.8 %             12.1 %     9.6 %        
Revenues and profitability increased in the third quarter of 2010 in both our Image division (occupational apparel and uniforms) and the Licensed Sports division (owned and licensed high profile sports and lifestyle apparel.) Growth in both businesses resulted from improved business conditions and market share gains. Further, our competitive advantage from our quick response and replenishment capabilities benefited both businesses as demand continued to improve in the third quarter of 2010.
Approximately two-thirds of the increase in operating margin in the third quarter of 2010 and the first nine months of 2010 over the respective 2009 periods was due to higher gross margins, resulting primarily from an improved mix of business. The remainder of the increases was driven by improved leverage of operating expenses on a higher level of revenues.
          Sportswear:
                                                 
    Third Quarter   Nine Months
                    Percent                   Percent
Dollars in millions   2010   2009   Change   2010   2009   Change
Coalition revenues
  $ 129.0     $ 149.1       (13.4 )%   $ 340.3     $ 356.9       (4.7 )%
Coalition profit
    13.8       23.6       (41.5 )%     30.7       35.0       (12.3 )%
Operating margin
    10.7 %     15.8 %             9.0 %     9.8 %        

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The decline in Sportswear Coalition revenues for both the third quarter and first nine months of 2010 resulted primarily from a shift in the timing of Nauticaâ brand shipments of special programs from the third quarter to the fourth quarter of 2010. These declines were partially offset by increases in Kiplingâ brand revenues in the United States following the successful launch earlier this year of a new program that is exclusive with Macy’s.
The declines in operating margin in the third quarter and first nine months of 2010 were driven by the reduction in revenues without a comparable expense reduction and higher spending to support a new Nauticaâ marketing campaign.
          Contemporary Brands:
                                                 
    Third Quarter   Nine Months
                    Percent                   Percent
Dollars in millions   2010   2009   Change   2010   2009   Change
Coalition revenues
  $ 113.3     $ 112.2       1.0 %   $ 323.5     $ 291.5       11.0 %
Coalition profit
    5.2       12.3       (57.6 )%     22.1       35.2       (37.2 )%
Operating margin
    4.6 %     10.9 %             6.8 %     12.1 %        
The Contemporary Brands Coalition consists of our 7 For All Mankindâ, John Varvatosâ, Splendidâ and Ella Mossâ brands. 7 For All Mankindâ brand global revenues declined 4% in the quarter, reflecting continued softening conditions in the U.S. premium denim market, but increased 4% in the first nine months of 2010 over the prior year period due to growth in our global direct-to-consumer business. Revenues in our Splendidâ and Ella Mossâ brands, acquired in March 2009, increased 16% in the third quarter of 2010 over the comparable 2009 quarter and contributed an incremental $21 million in revenues in the first nine months of 2010 compared with the first nine months of 2009.
The decline in operating margin in the third quarter and first nine months of 2010, compared with the prior year periods, was driven by investments in new 7 For All Mankindâ retail stores, along with the write-off of fixtures at five underperforming stores, and higher marketing spending. The operating margin comparison for the first nine months of 2010 was also negatively impacted by 1.2% due to the favorable resolution of a value-added tax and duty matter during 2009 that did not recur in 2010.
          Other:
                                                 
    Third Quarter   Nine Months
                    Percent                   Percent
Dollars in millions   2010   2009   Change   2010   2009   Change
Revenues
  $ 30.8     $ 30.1       2.6 %   $ 79.8     $ 77.5       3.0 %
Profit (loss)
    0.2       0.9       (81.4 )%     (1.1 )     0.3       (476.3 )%
Operating margin
    0.6 %     3.0 %             (1.3 )%     0.4 %        
The Other business segment includes the VF Outlet business, which is a group of VF-operated outlet stores in the United States that sell primarily excess quantities of VF products along with products purchased from third parties. Revenues and profits of VF products are reported as part of the operating results of the applicable coalitions, while revenues and profits of non-VF products sold in these outlet stores are reported in this business segment.

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          Reconciliation of Coalition Profit to Income Before Income Taxes:
There are two types of costs necessary to reconcile total Coalition Profit, as discussed in the preceding paragraphs, to consolidated Income Before Income Taxes. These costs are (i) Corporate and Other Expenses, discussed below, and (ii) Interest, Net, which was discussed in the previous “Consolidated Statements of Income” section.
                                                 
    Third Quarter   Nine Months
                    Percent                   Percent
Dollars in millions   2010   2009   Change   2010   2009   Change
Corporate & Other Expenses
  $ (62.7 )   $ (53.6 )     (16.9 )%   $ (158.4 )   $ (151.4 )     (4.6 )%
Interest, Net
    (19.9 )     (20.9 )     4.6 %     (60.0 )     (63.4 )     5.5 %
Corporate and Other Expenses consist of corporate headquarters’ costs that are not allocated to the coalitions and other expenses related to but not allocated to the coalitions for internal management reporting. These expenses include defined benefit pension costs other than service cost, development costs for management information systems, costs of maintaining and enforcing some of our trademarks and miscellaneous consolidating adjustments.
Analysis of Financial Condition
          Balance Sheets
Accounts Receivable at September 2010 were in line with the balance at September 2009. Increases in accounts receivable related to higher wholesale revenues near the end of the third quarter of 2010 compared with the 2009 period were offset by (i) an increase in accounts receivable balances sold as discussed in the “Liquidity and Cash Flows” section below and in Note D to the Consolidated Financial Statements, (ii) an improvement in days’ sales outstanding and (iii) the impact of a stronger U.S. dollar in translating balances of international businesses. Accounts Receivable were higher at September 2010 than at the end of 2009 due to higher wholesale revenues and seasonal sales and collection patterns.
Inventories increased 3% at September 2010 over the September 2009 balance in response to our expected growth in fourth quarter 2010 revenues compared with the prior year period. This increase is lower than our expected revenue growth in the fourth quarter due to continued focus on optimizing inventory levels. The increase in inventories from December 2009 to September 2010 reflects the higher seasonal requirements of our businesses.
Other Current Assets at September 2010 declined from September 2009 due to (i) a reduction in prepaid income taxes and (ii) lower deferred income taxes resulting from reduced restructuring accruals.
Property, Plant and Equipment was lower at September 2010 than at December 2009 and September 2009, resulting from depreciation expense in excess of capital spending during those periods.
Total Intangible Assets and Goodwill at September 2010 were lower than at September 2009 due to (i) impairment charges taken in the fourth quarter of 2009, (ii) the impact of foreign currency translation and (iii) amortization of intangible assets, partially offset by the addition of intangible assets and goodwill related to the Vans Mexico acquisition.
Short-term Borrowings at September 2010 consisted of $49.0 million under international borrowing agreements. Short-term Borrowings at September 2009 included $200.0 million of domestic commercial

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paper borrowings and $52.2 million under international borrowing agreements. Short-term Borrowings fluctuate throughout the year in relation to working capital requirements and other investing and financing activities. There were no commercial paper borrowings at September 2010 due to significantly higher cash balances coming into 2010 and high cash generation in the first nine months of 2010. See the “Liquidity and Cash Flows” section below for a discussion of these items.
The Current Portion of Long-term Debt was lower at September 2010 than December 2009 and September 2009 due to the payment of $200.0 million of 8.5% notes at their maturity in the third quarter of 2010.
The increase in Accounts Payable at September 2010 compared with both December 2009 and September 2009 resulted from the timing of inventory purchases and payments.
Accrued Liabilities at September 2010 increased from December 2009 and September 2009 as a result of higher incentive compensation accruals and the overall growth of our businesses, plus higher advertising accruals at September 2010 compared with prior year periods.
Other Liabilities at September 2010 and December 2009 declined from September 2009 due primarily to a $100.0 million contribution to the domestic pension plan during the fourth quarter of 2009.
          Liquidity and Cash Flows
The financial condition of VF is reflected in the following:
                         
    September   December   September
Dollars in millions   2010   2009   2009
Working capital
  $ 1,727.4     $ 1,536.8     $ 1,573.7  
 
                       
Current ratio
    2.5 to 1       2.4 to 1       2.2 to 1  
 
                       
Debt to total capital ratio
    20.1 %     23.7 %     26.6 %
For the ratio of debt to total capital, debt is defined as short-term and long-term borrowings, and total capital is defined as debt plus stockholders’ equity. Our ratio of net debt to total capital, with net debt defined as debt less cash and equivalents and total capital defined as net debt plus stockholders’ equity, was 12.9% at September 2010.
On an annual basis, VF’s primary source of liquidity is its cash flow from operations. Cash from operations is primarily dependent on the level of net income and changes in inventories and other working capital components. Our cash flow from operations is typically lower in the first half of the year as we build working capital to service our operations in the second half of the year. Further, cash from operations is highest in the fourth quarter of the year as we collect accounts receivable arising from our seasonally higher wholesale sales in the third quarter. In addition, cash flows from our direct-to-consumer businesses are significantly higher in the fourth quarter of the year.
For the first nine months of 2010, cash flow from operations was $448.6 million, compared with $263.9 million of cash flow from operations in the comparable 2009 period. Operating cash flow in the first nine months of 2010 improved by (i) $124.7 million from an increase in Net Income, (ii) $189.6 million resulting from changes in accounts payable balances related to the timing of payments and inventory purchases and an unusually large accounts payable balance at the end of 2008, (iii) $113.1 million due to higher accrued liabilities in 2010 driven by larger incentive compensation accruals and overall growth in our businesses and (iv) $100.0 million due to a pension contribution in the first nine months of 2009 that did not recur in the

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2010 period. These sources of additional operating cash flow in the first nine months of 2010 were partially offset by (i) $247.6 million due to inventory increases in the first nine months of 2010 compared with the first nine months of 2009, reflecting a significant inventory reduction in the prior year period, and (ii) $94.8 million from higher accounts receivable balances due to an increase in sales volume in the third quarter of 2010 over the comparable 2009 quarter.
During September 2009, VF entered into an agreement to sell selected trade accounts receivable, on a nonrecourse basis, to a financial institution. This agreement allows VF to have up to $192.5 million of accounts receivable held by the financial institution at any point in time. At the end of September 2010, December 2009 and September 2009, accounts receivable in the Consolidated Balance Sheets had been reduced by $118.5 million, $74.2 million and $57.6 million, respectively, related to balances sold under this program. This program resulted in increases of $44.3 million and $57.6 million in operating cash flow in the first nine months of 2010 and 2009, respectively.
VF has liquidity from its available cash balances and debt capacity, supported by its strong credit rating. At the end of September 2010, $983.3 million was available for borrowing under VF’s $1.0 billion senior unsecured domestic revolving bank credit facility. There was $16.7 million of standby letters of credit issued under this agreement. Also at the end of September 2010, €250 million (U.S. dollar equivalent of $343.6 million) was available for borrowing under VF’s senior unsecured international revolving bank credit facility. We have not borrowed any amounts under these facilities during 2010.
Investing activities included the Vans Mexico acquisition in the first nine months of 2010 and the acquisition of the Splendidâ and Ella Mossâ brands in the prior year period. We expect that capital spending, primarily related to the opening of new retail stores, should approximate $120 million for the full year 2010. This spending will be funded by operating cash flows.
During the first nine months of 2010, VF repurchased 4.1 million of its own shares at a cost of $322.2 million (average of $79.36 per share). No shares were repurchased during the first nine months of 2009. The VF Board of Directors authorized the repurchase of 10.0 million additional shares in February 2010. At September 2010, there remains 7.6 million shares that may be purchased under the Board’s authorization. We will continue to evaluate future stock buybacks as we balance our cash needs against acquisitions and other investment opportunities.
Management’s Discussion and Analysis in our 2009 Form 10-K provided a table summarizing VF’s contractual obligations and commercial commitments at the end of 2009 that would require the use of funds. Since the filing of our 2009 Form 10-K and through the end of the current quarter, there have been no material changes, except as noted below, relating to VF’s contractual obligations and commercial commitments that will require the use of funds:
    Binding commitments to purchase finished goods, raw materials and sewing labor in the ordinary course of business increased by approximately $100 million at the end of September 2010 due to the seasonality of our businesses.
 
    Long-term debt consisting of $200.0 million of 8.5% notes was paid at the scheduled maturity date during the third quarter of 2010.
Management believes that VF’s cash balances and funds provided by operating activities, as well as unused bank credit lines, additional borrowing capacity and access to equity markets, taken as a whole, provide (i) adequate liquidity to meet all of its current and long-term obligations when due, (ii) adequate liquidity to fund capital expenditures and to maintain our dividend payout policy and (iii) flexibility to meet investment opportunities that may arise.

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Critical Accounting Policies and Estimates
We have chosen accounting policies that we believe are appropriate to accurately and fairly report VF’s operating results and financial position in conformity with generally accepted accounting principles (“GAAP”) in the United States. We apply these accounting policies in a consistent manner. Our significant accounting policies are summarized in Note A to the Consolidated Financial Statements included in our 2009 Form 10-K.
The application of these accounting policies requires that we 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. We evaluate these estimates and assumptions and may retain outside consultants to assist in our 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 our consolidated financial statements, or are the most sensitive to change from outside factors, are discussed in Management’s Discussion and Analysis in our 2009 Form 10-K. There have been no material changes in these policies.
Cautionary Statement on Forward-Looking Statements
From time to time, we 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 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 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 Quarterly Report on Form 10-Q include the overall level of consumer spending on apparel; general economic conditions and other factors affecting consumer confidence; disruption and volatility in the global capital and credit markets; fluctuations in the price, availability and quality of raw materials and contracted products; 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 identify, integrate and grow acquisitions; VF’s ability to maintain the strength and security of its information technology systems; the 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 deliver its products to the market through its distribution system; 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.

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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 our 2009 Form 10-K.
Item 4 — Controls and Procedures
Disclosure controls and procedures:
Under the supervision of our 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, our 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.
Part II — Other Information
Item 1A — Risk Factors
There have been no material changes to our risk factors from those disclosed in our 2009 Form 10-K.
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds
(c) Issuer purchases of equity securities:
                                 
                    Total Number of     Maximum Number  
    Total     Weighted     Shares Purchased     of Shares that May  
    Number     Average     as Part of Publicly     Yet be Purchased  
    of Shares     Price Paid     Announced     Under the  
Third Quarter 2010   Purchased     per Share     Programs     Program (1)  
July 4 — July 31, 2010
    21,400     $ 78.18       21,400       7,618,275  
August 1 — August 28, 2010
    19,080       79.01       19,080       7,599,195  
August 29 — October 2, 2010
    14,700       75.85       14,700       7,584,495  
 
                           
 
                               
Total
    55,180               55,180          
 
                           
 
(1)   During the quarter, all shares purchased were in connection with VF’s deferred compensation plans. We will continue to evaluate future stock buybacks as we balance our cash needs against acquisitions and other investment opportunities.

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Item 6 — Exhibits
31.1   Certification of the principal executive officer, Eric C. Wiseman, 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 the principal financial officer, Robert K. Shearer, 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 the principal executive officer, Eric C. Wiseman, 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 the principal financial officer, Robert K. Shearer, 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*
 
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*
 
*   Furnished, not filed.

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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/ Robert K. Shearer    
    Robert K. Shearer   
    Senior Vice President and Chief Financial Officer (Chief Financial Officer)   
 
Date: November 10, 2010
         
     
  By:   /s/ Bradley W. Batten    
    Bradley W. Batten   
    Vice President — Controller
(Chief Accounting Officer) 
 
 

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