-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Euln7t0b+vKphEJ5PISzUaoJthrrEYtsX9KLtE+C3rtnXHwXKCpAY8QSrqnGvKv0 bGIF6FS4DoFrJCnhWYqGhQ== 0000893220-94-000173.txt : 19940325 0000893220-94-000173.hdr.sgml : 19940325 ACCESSION NUMBER: 0000893220-94-000173 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19940101 FILED AS OF DATE: 19940324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: V F CORP /PA/ CENTRAL INDEX KEY: 0000103379 STANDARD INDUSTRIAL CLASSIFICATION: 2320 IRS NUMBER: 231180120 STATE OF INCORPORATION: PA FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-05256 FILM NUMBER: 94517772 BUSINESS ADDRESS: STREET 1: 1047 N PARK RD CITY: WYOMISSING STATE: PA ZIP: 19610 BUSINESS PHONE: 2153781151 MAIL ADDRESS: STREET 2: P O BOX 1022 CITY: READING STATE: PA ZIP: 19603 FORMER COMPANY: FORMER CONFORMED NAME: VF CORPORATION DATE OF NAME CHANGE: 19900621 FORMER COMPANY: FORMER CONFORMED NAME: VANITY FAIR MILLS INC DATE OF NAME CHANGE: 19690520 10-K 1 FORM 10-K FOR THE PERIOD ENDING JANUARY 1, 1994 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K /x/ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the fiscal year ended JANUARY 1, 1994 --------------- or // Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from to ------------------- ------------------- Commission file number 1-5256 ------ V.F. CORPORATION ------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-1180120 - --------------------------------- ----------------------- (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1047 NORTH PARK ROAD, WYOMISSING, PA 19610 - ---------------------------------------- ----------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code 610-378-1151 ------------ Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered ------------------- --------------------- Common stock, without par value, New York Stock Exchange stated capital $1 per share and Rights to purchase preferred stock Pacific Stock Exchange Securities registered pursuant to Section 12(g) of the Act: NONE ---- 2 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / / Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- As of March 1, 1994, 64,555,658 shares of Common Stock of the registrant were outstanding, and the aggregate market value of the common shares (based on the closing price of these shares on the New York Stock Exchange) of the registrant held by nonaffiliates was approximately $2,668,000,000. In addition, 2,050,491 shares of Series B ESOP Convertible Preferred Stock of the registrant were outstanding and convertible into 1,640,393 shares of Common Stock of the registrant, subject to adjustment. The trustee of the registrant's Employee Stock Ownership Plan is the sole holder of such shares, and no trading market exists for the Series B ESOP Convertible Preferred Stock. Documents Incorporated By Reference Portions of the Annual Report for the fiscal year ended January 1, 1994 (Items 1 and 3 in Part I and Items 5, 6, 7 and 8 in Part II). Portions of the Proxy Statement dated March 17, 1994 for the Annual Meeting of Shareholders to be held on April 19, 1994 (Item 4A in Part I and Items 10, 11, 12 and 13 in Part III). -2- 3 PART I ITEM 1. BUSINESS. VF Corporation ("Corporation"), through its operating subsidiaries, has designed, manufactured and marketed apparel principally in five business groups: Jeanswear, Casual/Sportswear, Intimate Apparel, International and Other Apparel. Organized in 1899, the Corporation oversees the operations of its subsidiaries, providing them with financial and administrative resources. The management of each operating company is independent and is responsible for the growth and development of its business, within guidelines established by corporate management. Information regarding the sales and profitability of each of the five business groups over the past year and working capital requirements is included in pages 9 to 20, 24, 25 and 27 of the Corporation's Annual Report to Shareholders for its fiscal year ended January 1, 1994 ("1993 Annual Report"), which information is incorporated herein by reference. Jeanswear The Lee and the Wrangler divisions operating in the United States are the principal components of the Jeanswear business group. Lee manufactures jeanswear and casual bottoms sold principally under its LEE(R) trademark. During 1993, Lee successfully introduced the RIDERS brand of jeans and casualwear. Wrangler manufactures jeanswear primarily under its WRANGLER(R) and RUSTLER(R) trademarks. Wrangler also offers a line of shirts to complement its jeanswear products. Lee and Wrangler offer a line of cotton casual pants and shirts under the LEE CASUALS(R) AND TIMBER CREEK BY WRANGLER(R) brands. The Girbaud division is the third component of the Jeanswear business group. The Corporation, through its Girbaud division, uses the MARITHE & FRANCOIS GIRBAUD(R) label in the United States to market branded fashion jeans and casual apparel. The MARITHE & FRANCOIS GIRBAUD(R) label is currently under license arrangements through 1997, subject to a single 5 year renewal term. Substantially all Girbaud products are manufactured by independent contractors and are sold primarily to upscale department and specialty stores. According to industry data, approximately 425 million pairs of jeans made of denim, twill, corduroy and other fabrics were sold in the United States in 1993. This same data indicates that the Corporation currently has the largest combined share of this market at approximately a 30% share, with the RUSTLER(R), LEE(R) and WRANGLER(R) brands having the second, third and fourth largest shares of the jeans market in the United States, respectively. Raw materials, consisting mainly of fabrics made from cotton and blends of cotton and synthetics, are purchased from several suppliers against scheduled production and are fabricated into garments in the Lee and Wrangler manufacturing plants. Management did not experience difficulty in obtaining materials to meet production needs during 1993. In 1993, the Lee division repositioned its LEE(R) brand products by marketing solely through department and specialty stores. The RIDERS brand is now sold through the mass merchant and discount store channels. The Wrangler division markets its WRANGLER(R) westernwear through western specialty stores and its other WRANGLER(R) brand products primarily -3- 4 through discount stores. The RUSTLER(R) brand is a high quality, lower priced brand marketed to large national discount chains. Both Lee and Wrangler maintain sales offices and showrooms in key cities across the United States. Sales of Lee and Wrangler products are generally made directly to retailers through full-time salespersons. Sales of the Jeanswear business group are slightly higher in the second half of the year. Lee and Wrangler advertise on television and radio and in various consumer and trade publications. They also participate in cooperative advertising in radio, television and various print media. Point-of-sale advertising is used by Lee, Wrangler and Girbaud. Casual/Sportswear Bassett-Walker is one of the nation's largest manufacturers of knitted fleecewear. Operations are vertically integrated and include the entire process of converting cotton yarn into finished garments. In December 1993, Bassett-Walker sold its two yarn manufacturing plants to a major textile company and entered into a long-term agreement to purchase yarn from that company. Previously, Bassett-Walker had produced the majority of its yarn requirements. Additional yarn is available from numerous outside sources. Sales of Bassett-Walker garments are seasonal, with approximately two-thirds of its sales occurring during the second half of the year. Principal customers are national chain and department stores, discount stores, wholesalers and garment screen printing operators. In 1993, more than 70% of Bassett-Walker's volume was knitted fleecewear and T-shirts marketed under the LEE(R) and RIDERS labels. Products are also manufactured for private label customers. Sales are made by an in-house staff of salespersons throughout the United States. See "Recent Developments". Jantzen designs, manufactures and markets an extensive line of men's and women's quality swimwear and sportswear, including sweaters and coordinated tops and bottoms, primarily under the JANTZEN(R) trademark. A significant portion of Jantzen's products are manufactured by independent contractors. Jantzen uses purchased yarn for its sweater manufacturing operations. For other products, purchased fabric is manufactured into finished garments. Management anticipates no difficulty in obtaining raw materials. Jantzen products are sold primarily to department and specialty stores through its sales staff. Jantzen also manufactures and markets its products in Canada, and the JANTZEN(R) trademark is licensed to other companies in several foreign countries. JanSport purchases fleeced casualwear and T-shirts to imprint with college logos for distribution through college bookstores. JanSport also manufactures JANSPORT(R) brand daypacks sold through college bookstores and department and sporting goods stores and JANSPORT(R) backpacking/mountaineering gear sold primarily through outdoor and sporting goods stores. -4- 5 Intimate Apparel Vanity Fair produces body fashions, daywear, sleepwear and loungewear. Vanity Fair knits most of its fabric from cotton, polyester, nylon and LYCRA(R)* yarn purchased generally from E.I. duPont DeNemours & Co. Lace and trim are purchased from outside sources. Vanity Fair anticipates no difficulty in obtaining its material requirements. The Vanity Fair division manufactures products under the VANITY FAIR(R) label for domestic department and specialty stores. In recent years, an increasing amount of sales have been of VASSARETTE(R) brand products sold through discount stores and products sold to private label customers. Vanity Fair sells most of its products through its own sales force with sales offices located in various cities. The VANITY FAIR(R) brand name is licensed in several foreign countries. In July 1991, the Corporation acquired the BARBIZON(R) brand of intimate apparel and its chain of leased retail stores. Barbizon is known for its woven sleepwear and loungewear products. International With the Corporation's expansion in the European apparel markets, international operations have been reported as a separate business group since 1992. The International business group consists of Lee and Wrangler jeanswear operations, primarily in Europe, and the recently acquired intimate apparel operations, primarily in France and Spain. LEE(R) and WRANGLER(R) jeanswear and other casual products are manufactured and marketed by wholly owned subsidiaries in European department and specialty stores. In recent years, Lee and Wrangler have expanded their European presence by establishing new subsidiaries, replacing certain licensee and distributor operations, and by introducing MAVERICK(R) branded jeanswear marketed through discount stores. Raw materials are purchased primarily from European suppliers and are fabricated into garments in the Lee and Wrangler manufacturing plants in the United Kingdom, Belgium, Malta and Poland. In addition, a portion of the international jeanswear products are manufactured by independent contractors. Management expects no difficulty in obtaining raw materials. Internationally, jeanswear products are sold through the Lee and the Wrangler sales forces and independent sales agents. Lee and Wrangler have licensed their brand names for jeanswear products in foreign markets where they do not have production or sales operations. Lee also participates in a joint venture in Spain and Portugal. In January 1992, the Corporation acquired the capital stock of The Valero Group, and in December 1992, the Corporation acquired the capital stock of Jean Bellanger Enterprises and of Vives Vidal, S.A. In December 1993, the Corporation acquired the principal operating assets of Central Corsetera, S.A. These companies manufacture and market women's intimate apparel for distribution primarily in France in department and specialty stores under the LOU, BOLERO and SILHOUETTE brand names and in discount stores under the VARIANCE, CARINA and SILTEX brand names. In addition, intimate apparel is manufactured and marketed in department and specialty stores primarily in Spain under the GEMMA, INTIMA CHERRY and BELCOR brand names. - ------------------------------------------------------------------------------- *LYCRA is the registered trademark of E.I.duPont DeNemours & Co. for its spandex elastic yarn. -5- 6 Raw materials are purchased primarily from European suppliers and are fabricated into garments in manufacturing plants in France, Spain and Tunisia. Management expects no difficulty in obtaining raw materials. Other Apparel Red Kap is a leading producer of occupational and career apparel sold primarily under the RED KAP(R) label. To broaden its product offerings, Red Kap acquired the WORKWEAR(TM) line of occupational apparel in November 1991. Approximately 75% of Red Kap's sales are to industrial laundries that in turn supply work clothes to employers, primarily on a rental basis, for on-the-job wear by production, service and white-collar personnel. Products include work pants, slacks, work and dress shirts, overalls, jackets and smocks. In addition, Red Kap markets a line of work clothes nationally to retail stores under the BIG BEN(R) brand name. Fabrics, primarily cotton and synthetic blends, are purchased and manufactured into finished garments. Management anticipates no difficulty in obtaining raw materials. Because industrial laundries generally maintain minimal inventories of work clothes, a supplier's ability to offer rapid delivery is an important factor in this market. Red Kap's commitment to customer service has enabled customer orders to be filled typically within 24 hours of receipt and has helped to provide Red Kap with a significant share of the industrial laundry rental business. The Corporation in March 1991 acquired Healthtex, a leading manufacturer and marketer of infant and children's apparel. Products marketed under the HEALTHTEX(R) label are sold primarily to department and specialty stores through its sales force. Healthtex products are manufactured from purchased cotton and synthetic fabrics. Management anticipates no difficulty in obtaining raw materials. RECENT DEVELOPMENTS In January 1994, the Corporation acquired in separate transactions Nutmeg Industries, Inc. and H. H. Cutler Company for an aggregate consideration of approximately $506.9 million. Both of these companies design, manufacture and market imprinted sports apparel under licenses granted by the four major American professional sports leagues (Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League) and most major American colleges and universities. In addition, Cutler is one of the largest youthwear apparel licensees of Walt Disney products and is the exclusive licensee of Fisher-Price kidswear in the United States. Nutmeg's products are sold primarily in department and specialty stores, and Cutler's products are sold primarily through mass merchants. The Corporation's Bassett-Walker division will supply a significant portion of the fleece and T-shirt needs of both Nutmeg and Cutler. OTHER MATTERS Competitive Factors Trademarks are of material importance to all of the Corporation's operating subsidiaries and are protected by registration or otherwise in the United States and most other markets where the related products are sold. -6- 7 In addition, the Corporation uses the MARITHE & FRANCOIS GIRBAUD(R) label in the United States under license arrangements through 1997, subject to a single 5 year renewal term. The apparel industry is highly competitive and consists of a number of domestic and foreign companies; some competitors have assets and sales greater than those of the Corporation. In addition, the Corporation competes with a number of firms that produce and distribute only a limited number of products similar to those sold by the Corporation or sell only in certain geographic areas being supplied by the Corporation. A characteristic of the apparel industry is the requirement that a manufacturer recognize fashion trends and adequately provide products to meet such trends. Competitive advantage in the industry is obtained by manufacturing better quality, market-responsive apparel and delivering to the retailer on time and at lower cost. The Corporation is striving to achieve this competitive edge with its Market Response System and proprietary FLOW REPLENISHMENT SYSTEM(R). The FLOW REPLENISHMENT SYSTEM(R) is capable of recording the sale of an individual garment from the point of sale to the consumer, creating and processing all necessary documentation, and shipping the exact garment sold so that it is back on the selling store's shelf generally within seven days. Employees The Corporation employs approximately 62,000 men and women, of which approximately 6,300 are covered by various collective bargaining agreements. Employee relations are considered to be good. Backlog The dollar amount of backlog of orders believed to be firm as of the end of the Corporation's fiscal year and as of the end of the preceding fiscal year is not material for an understanding of the business of the Corporation taken as a whole. ITEM 2. PROPERTIES. The Corporation owns or leases under capital leases most of its facilities used for manufacturing, distribution and administrative activities. Certain other facilities are leased under operating leases that generally contain renewal options. Management believes all facilities and machinery and equipment are in good condition and are suitable for the Corporation's needs. Manufacturing and distribution facilities presently being utilized are summarized below for the Corporation's business groups:
Square Business Group Footage ----------------- --------- Jeanswear 6,772,000 Casual/Sportswear 4,793,000 Intimate Apparel 1,819,000 International 1,863,000 Other Apparel 2,246,000
In addition, the Corporation owns or leases various administrative and office space. The Corporation also owns or leases facilities having 2,590,000 square feet of space that is used for factory outlet operations. Approximately 76% of the factory outlet space is used for selling and warehousing the Corporation's products, with the balance consisting of space leased to tenants and common areas. In June 1993, the Corporation completed the sale of certain factory outlet locations for an aggregate consideration of $69 million. The -7- 8 Corporation is leasing from the developer that portion of the space utilized for sale of the Corporation's products. The sale of these assets resulted in no significant gain or loss to the Corporation. ITEM 3. LEGAL PROCEEDINGS. There are no material legal proceedings or investigations pending or threatened to which the Corporation or any of its operating companies is a party or of which any of their property is the subject. Notwithstanding the foregoing, the text under the caption "Other Matters" included in page 27 of the 1993 Annual Report is incorporated herein by reference. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 4A. EXECUTIVE OFFICERS OF THE CORPORATION. The following are the Executive Officers of the Corporation as of March 1, 1994. The term of office of each of the officers continues to the next annual meeting of the Board of Directors, to be held April 19, 1994. There is no family relationship among any of the Corporation's officers.
Period Served Name Position Age In Such Office(s) - ---- -------- --- ----------------- Lawrence R. Pugh Chairman of the Board and 61 May 1983 to date Chief Executive Officer Director February 1980 to date Mackey J. McDonald President and 47 October 1993 to date Chief Operating Officer Director October 1993 to date Paul R. Charron Executive Vice President 51 October 1993 to date Harold E. Addis Vice President-Human 63 July 1988 to date Resources and Administration H. Lynn Hazlett Vice President-Business Systems 57 October 1989 to date Gerard G. Johnson Vice President-Finance and 53 December 1988 to date Chief Financial Officer Harold D. McKemy Vice President-Treasury and 64 April 1987 to date Financial Services Lori M. Tarnoski Vice President 54 May 1979 to date Secretary May 1974 to date Frank C. Pickard,III Treasurer 49 April 1987 to date Robert K. Shearer Controller 42 November 1989 to date
-8- 9 Mr. Pugh joined the Corporation as President in 1980. In 1982, he was elected Chief Executive Officer and in 1983 was elected Chairman of the Board. In October 1990, he was also elected President of the Corporation, serving in that position until October 1993. Additional information is included in page 4 of the Corporation's definitive proxy statement dated March 17, 1994 for the Annual Meeting of Shareholders to be held on April 19, 1994 ("1994 Proxy Statement"). Mr. McDonald joined the Corporation's Lee division in 1983 serving in various management positions until his election as President of the Corporation's former Troutman division in 1984. He was named Executive Vice President of the Wrangler division in 1986 and named President of Wrangler in 1988. He was named Group Vice President of the Corporation in February 1991 and in October 1993 was elected President of the Corporation. Mr. Charron joined the Corporation in 1988, assigned to the staff of the President. In October 1988, he was named Group Vice President and elected Executive Vice President of the Corporation in October 1993. Mr. Addis joined the Corporation in 1984 as Vice President-Human Resources and was elected Vice President-Human Resources and Administration in July 1988. Mr. Hazlett joined the Corporation in October 1989 as Vice President-Business Systems. Prior to joining the Corporation, he served since 1985 as President and Chief Executive Officer of Information and Communication Systems, Inc., a subsidiary of Carson Pirie Scott & Co. Mr. Johnson joined the Corporation in 1988 as Vice President-Finance and Chief Financial Officer. Mr. McKemy joined the Corporation's Lee division in 1957 and served in various management positions until his election as Treasurer of the Lee Company in 1969. He was elected Assistant Treasurer of the Corporation in 1969, Treasurer in 1971, Vice President in 1980 and Vice President-Treasury and Financial Services in 1987. Mrs. Tarnoski joined the Corporation in 1961. She was elected Assistant Secretary in 1973, Secretary in 1974 and a Vice President in 1979. Mr. Pickard joined the Corporation in 1976 and was elected Assistant Controller in 1982, Assistant Treasurer in 1985 and Treasurer in 1987. Mr. Shearer joined the Corporation in 1986 as Assistant Controller and was elected Controller in November 1989. PART II ITEM 5. MARKET FOR THE CORPORATION'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. Information concerning the market and price history of the Corporation's common stock, plus dividend information, as reported under the caption "Quarterly Results of Operations" on page 22 and under the captions "Investor Information - Common Stock, - Shareholders of Record, - Dividend Policy, - Dividend Reinvestment Plan, - Dividend Direct Deposit and - Quarterly Common Stock Price Information" on page 36 of the 1993 Annual Report is incorporated herein by reference. -9- 10 ITEM 6. SELECTED FINANCIAL DATA. Selected financial data for the Corporation for each of its last five fiscal years under the caption "Financial Summary" on pages 34 and 35 of the 1993 Annual Report is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. A discussion of the Corporation's financial condition and results of operations is incorporated herein by reference to pages 25 and 27 of the 1993 Annual Report. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Financial statements of the Corporation and specific supplementary financial information are incorporated herein by reference to pages 22 through 24, 26 and 28 through 33 of the 1993 Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE CORPORATION. Information under the caption "Election of Directors" on pages 2 through 4 of the 1994 Proxy Statement is incorporated herein by reference. See Item 4A with regard to Executive Officers. Information under the caption "Compliance with Section 16(a) of the Securities Exchange Act" on page 30 of the 1994 Proxy Statement is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION. Information with regard to this item is incorporated herein by reference to pages 6 through 18 of the 1994 Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Information under the caption "Certain Beneficial Owners" on page 20 and "Common Share Ownership of Management" on page 21 of the 1994 Proxy Statement is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Information under the caption "Common Share Ownership of Management" on page 21 of the 1994 Proxy Statement is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) The following documents are filed as a part of this report: -10- 11 1. Financial statements - Included on pages 23, 24, 26 and 28 through 33 of the 1993 Annual Report (Exhibit 13) and incorporated by reference in Item 8: Consolidated statements of income--Fiscal years ended January 1, 1994, January 2, 1993 and January 4, 1992 Consolidated balance sheets--January 1, 1994 and January 2, 1993 Consolidated statements of cash flows--Fiscal years ended January 1, 1994, January 2, 1993 and January 4, 1992 Consolidated statements of common shareholders' equity--Fiscal years ended January 1, 1994, January 2, 1993 and January 4, 1992 Notes to consolidated financial statements 2. Financial statement schedules - The following consolidated financial statement schedules are included herein: Schedule II--Amounts receivable from related parties and underwriters, promoters and employees other than related parties Schedule V--Property, plant and equipment Schedule VI--Accumulated depreciation, depletion and amortization of property, plant and equipment Schedule VIII--Valuation and qualifying accounts Schedule IX--Short-term borrowings Schedule X--Supplementary income statement information All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. 3. Exhibits Number Description - ------ ----------- 2 Plan of acquisition, reorganization, arrangement, liquidation or succession: (A) Agreement and Plan of Merger between the Corporation, Spice Acquisition Co. and Nutmeg Industries, Inc. dated December 12, 1993 (Incorporated by reference to Exhibit (d) Schedule 14D-1 filed December 12, 1993) 3 Articles of incorporation and bylaws: (A) Articles of Incorporation, as amended and restated as of April 18, 1986 and as presently in effect (Incorporated by reference to Exhibit 3(A) to Form 10-K for the fiscal year ended January 4, 1992) (B) Statement Affecting Class or Series of Shares (Incorporated by reference to Exhibit 3(B) to Form 10-K for the fiscal year ended January 2, 1993) (C) Statement with Respect to Shares of Series B ESOP Convertible Preferred Stock (Incorporated by reference to Exhibit 4.2 to Form 8-K dated January 22, 1990) (D) Bylaws, as amended through July 17, 1990 and as presently in effect (Incorporated by reference to Exhibit 3 to the Form 8 amendment, dated August 10, 1990, to Form 10-Q for the fiscal quarter ended June 30, 1990) -11- 12 4 Instruments defining the rights of security holders, including indentures: (A) A specimen of the Corporation's Common Stock certificate (Incorporated by reference to Exhibit 4(A) to Form 10-K for the fiscal year ended January 2, 1993) (B) A specimen of the Corporation's Series B ESOP Convertible Preferred Stock certificate (Incorporated by reference to Exhibit 4(B) to Form 10-K for the fiscal year ended December 29, 1990) (C) Indenture between the Corporation and Morgan Guaranty Trust Company of New York, dated January 1, 1987 (Incorporated by reference to Exhibit 4.1 to Form S-3 Registration No. 33-10939) (D) First Supplemental Indenture between the Corporation, Morgan Guaranty Trust Company of New York and United States Trust Company of New York, dated September 1, 1989 (Incorporated by reference to Exhibit 4.3 to Form S-3 Registration No. 33-30889) (E) Rights Agreement, dated January 13, 1988, between the Corporation and Morgan Shareholder Services Trust Company (Incorporated by reference to Exhibit 4(E) to Form 10-K for the fiscal year ended January 2, 1993) (F) Amendment No. 1 to Rights Agreement, dated April 17, 1990, between the Corporation and First Chicago Trust Company of New York (Incorporated by reference to Exhibit 4 to Form 10-Q for the fiscal quarter ended June 30, 1990) (G) Amendment No. 2 to Rights Agreement, dated December 4, 1990, between the Corporation and First Chicago Trust Company of New York (Incorporated by reference to Exhibit 3 to Form 8-K dated December 4, 1990) 10 Material contracts: (A) 1982 Stock Option Plan (Incorporated by reference to Exhibit 4.1.1 of Post-Effective Amendment No. 1 to Form S-8/S-3, Registration No. 33-26566) (B) 1991 Stock Option Plan (Incorporated by reference to Exhibit A of the Corporation's 1992 Proxy Statement dated March 18, 1992) (C) Annual Discretionary Management Incentive Compensation Program (Incorporated by reference to Exhibit 10(C) to Form 10-K for the fiscal year ended January 4, 1992) (D) Deferred Compensation Plan (Incorporated by reference to Exhibit 10(B) to Form 10-K for the fiscal year ended December 29, 1990) (E) Executive Deferred Savings Plan (Incorporated by reference to Exhibit 10(E) to Form 10-K for the fiscal year ended January 4, 1992) (F) Amended and Restated Supplemental Executive Retirement Plan, dated May 16, 1989 (Incorporated by reference to Exhibit 10(C) -12- 13 to Form 10-K for the fiscal year ended December 30, 1989) (G) First Amended Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan for L. R. Pugh (Incorporated by reference to Exhibit 10(D) to Form 10-K for the fiscal year ended December 30, 1989) (H) Second Amended Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan for Mid-Career Senior Management (Incorporated by reference to Exhibit 10(E) to Form 10-K for the fiscal year ended December 30, 1989) (I) Third Amended Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan for Senior Management (Incorporated by reference to Exhibit 10(F) to Form 10-K for the fiscal year ended December 30, 1989) (J) Fourth Amended Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan for Participants in the Corporation's Deferred Compensation Plan (Incorporated by reference to Exhibit 10(G) to Form 10-K for the fiscal year ended December 30, 1989) (K) Fifth Amended Annual Benefit Determination under the Amended and Restated Supplemental Executive Retirement Plan which funds certain benefits upon a Change in Control (Incorporated by reference to Exhibit 10(H) to Form 10-K for the fiscal year ended December 30, 1989) (L) Form of Change in Control Agreement with senior management of the Corporation (Incorporated by reference to Exhibit 10(J) to Form 10-K for the fiscal year ended December 29, 1990) (M) Form of Change in Control Agreement with other management of the Corporation (Incorporated by reference to Exhibit 10(K) to Form 10-K for the fiscal year ended December 29, 1990) (N) Form of Change in Control Agreement with management of subsidiaries of the Corporation (Incorporated by reference to Exhibit 10(L) to Form 10-K for the fiscal year ended December 29, 1990) (O) Revolving Credit Agreement, dated October 21, 1993 (Incorporated by reference to Exhibit (b) Schedule 14D-1 filed December 12, 1993) 11 Computation of earnings per common share 13 Annual report to security holders 21 Subsidiaries of the Corporation 23.1 Consents of experts and counsel 23.2 Consents of experts and counsel 24 Power of attorney 99 Additional exhibits: (A) Form 11-K for VF Corporation Tax-Advantaged Savings Plan for Salaried Employees for the year ended December 31, 1993 All other exhibits for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. -13- 14 (b) Reports on Form 8-K: There were no reports on Form 8-K filed during the last quarter of the fiscal year ended January 1, 1994. OTHER MATTERS ------------- For purposes of complying with the amendments to the rules governing Registration Statements on Form S-8 under the Securities Act of 1933, the undersigned Corporation hereby undertakes as follows, which undertaking shall be incorporated by reference into the Corporation's Registration Statements on Form S-8 Nos. 33-26566 (filed January 12, 1989), 33-33621 (filed February 28, 1990) and 33-41241 (filed June 24, 1991): Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Corporation pursuant to the foregoing provisions, or otherwise, the Corporation has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Corporation of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Corporation will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. -14- 15 SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. V.F. CORPORATION By: /s/ Lawrence R. Pugh -------------------------- Lawrence R. Pugh Chairman of the Board (Chief Executive Officer) By: /s/ Gerard G. Johnson -------------------------- Gerard G. Johnson Vice President-Finance (Chief Financial Officer) By: /s/ Robert K. Shearer -------------------------- Robert K. Shearer Controller (Chief Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Corporation and in the capacities and on the dates indicated: Robert D. Buzzell* Director Edward E Crutchfield, Jr.* Director Ursula F. Fairbain* Director Barbara S. Feigin* Director Roger S. Hillas* Director Leon C. Holt, Jr.* Director March 24, 1994 J. Berkley Ingram, Jr.* Director Robert F. Longbine* Director Mackey J. McDonald* Director William E. Pike* Director Lawrence R. Pugh* Director M. Rust Sharp* Director L. Dudley Walker* Director *By: /s/ L. M. Tarnoski March 24, 1994 ------------------------------- L. M. Tarnoski, Attorney-in-Fact -15- 16 VF CORPORATION SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
- --------------------------------------------------------------------------------------------------------------------------------- COL. A COL. B COL. C COL. D COL. E - --------------------------------------------------------------------------------------------------------------------------------- Name of Debtor Balance at Additions Deductions Balance at Beginning Amounts End of of Period Collected Period - --------------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands) Fiscal year ended January 1, 1994 $ - $ - $ - $ - ========== ========= ========== ========== Fiscal year ended January 2, 1993: H. Varnell Moore $ 165 $ - $ 165 $ - ========== ========= ========== ========== Fiscal year ended January 4, 1992: H. Varnell Moore $ 165 $ - $ - $ 165 ========== ========= ========== ==========
The note receivable balance resulted from the 1986 acquisition of Blue Bell Holding Company Inc. The note, due December 15, 1994, provided for interest at a 6.9% simple interest rate. Shares of VF Corporation Common Stock were held as collateral for the note receivable. -16- 17 VF CORPORATION SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
- ---------------------------------------------------------------------------------------------------------------------------------- COL. A COL. B COL. C COL. D COL. E COL. F - ---------------------------------------------------------------------------------------------------------------------------------- Other Changes Classification Balance at Additions Retirements Add (Deduct) Balance at Beginning at Cost Describe End of of Period (D) Period - ---------------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands) Fiscal year ended January 1, 1994: Land and land improvements $ 50,838 $ 1,828 $ 249 $ (11,805) $ 40,612 Buildings 370,421 42,183 3,855 (62,093) 346,656 Machinery and equipment 820,332 165,483 47,095 (75,965) 862,755 ---------- ---------- ---------- ---------- ---------- $1,241,591 $ 209,494(A) $ 51,199 $ (149,863) $1,250,023 ========== ========== ========== ========== ========== Fiscal year ended January 2, 1993: Land and land improvements $ 46,067 $ 1,585 $ 512 $ 3,698 $ 50,838 Buildings 330,720 23,024 1,113 17,790 370,421 Machinery and equipment 664,314 182,593 23,967 (2,608) 820,332 ---------- ---------- --------- --------- ---------- $1,041,101 $ 207,202(B) $ 25,592 $ 18,880 $1,241,591 ========== ========== ========= ========= ========== Fiscal year ended January 4, 1992: Land and land improvements $ 44,084 $ 1,535 $ 436 $ 884 $ 46,067 Buildings 315,097 16,833 4,961 3,751 330,720 Machinery and equipment 595,115 92,394 31,169 7,974 664,314 ---------- ---------- --------- --------- ---------- $ 954,296 $ 110,762(C) $ 36,566 $ 12,609 $1,041,101 ========== ========== ========= ========= ==========
(A) Building and machinery and equipment additions include manufacturing and distribution capacity expansion, primarily in Jeanswear. (B) Building additions include expansion of Jeanswear wetprocessing capacity and distribution facilities. Machinery and equipment additions include capacity expansion in Jeanswear, Casual/Sportswear and Intimate Apparel. (C) Machinery and equipment additions include primarily capacity expansion in Jeanswear, Casual/Sportswear and Intimate Apparel. (D) Other changes result from the acquisition and disposition of subsidiaries, reclassifications and foreign currency rate translation, and in 1993, the sale of two yarn plants and certain factory outlet locations. Reference is made to Schedule VI which discloses the methods of computing the provision for depreciation. -17- 18 VF CORPORATION SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
- ----------------------------------------------------------------------------------------------------------------------------------- COL. A COL. B COL. C COL. D COL. E COL. F - ----------------------------------------------------------------------------------------------------------------------------------- Additions Other Changes Description Balance at Charged to Retirements Add (Deduct) Balance at Beginning Costs and Describe End of of Period Expenses (A) Period - ----------------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands) Fiscal year ended January 1, 1994: Land and land improvements $ 6,050 $ 1,482 $ 136 $ (974) $ 6,422 Buildings 104,843 15,511 2,565 (18,703) 99,086 Machinery and equipment 419,611 89,685 36,207 (41,333) 431,756 --------- --------- --------- --------- --------- $ 530,504 $ 106,678 $ 38,908 $ (61,010) $ 537,264 ========= ========= ========= ========= ========= Fiscal year ended January 2, 1993: Land and land improvements $ 4,572 $ 1,481 $ 3 $ - $ 6,050 Buildings 90,520 15,675 467 (885) 104,843 Machinery and equipment 368,990 73,710 19,804 (3,285) 419,611 --------- --------- --------- --------- --------- $ 464,082 $ 90,866 $ 20,274 $ (4,170) $ 530,504 ========= ========= ========= ========= ========= Fiscal year ended January 4, 1992: Land and land improvements $ 3,763 $ 1,395 $ - $ (586) $ 4,572 Buildings 94,938 14,676 3,103 (15,991) 90,520 Machinery and equipment 318,417 60,221 25,385 15,737 368,990 --------- --------- --------- --------- --------- $ 417,118 $ 76,292 $ 28,488 $ (840) $ 464,082 ========= ========= ========= ========= =========
The annual provisions for depreciation have been computed using the following estimated useful lives: land improvements 5-20 years; buildings 10-40 years; and machinery and equipment 3-10 years. (A) Other changes result primarily from the disposition of subsidiaries, reclassifications and foreign currency translation, and in 1993, the sale of two yarn plants and certain factory outlet locations. -18- 19 VF CORPORATION SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
- ------------------------------------------------------------------------------------------------------------------------------------ COL. A COL. B COL. C COL. D COL. E - ------------------------------------------------------------------------------------------------------------------------------------ ADDITIONS ------------------------------------ (1) (2) Balance Description Balance at Charged to Charged to Deductions at Beginning Costs and Other Accounts Describe End of of Period Expenses Describe (A) Period - ------------------------------------------------------------------------------------------------------------------------------------ (Dollars in thousands) Fiscal year ended January 1, 1994: Allowance for doubtful accounts $ 30,275 $ 9,146 $ 10,613 $ 28,808 ========= ========= ========= ========= Fiscal year ended January 2, 1993: Allowance for doubtful accounts $ 22,412 $ 8,255 $ 392 $ 30,275 ========= ========= ========= ========= Fiscal year ended January 4, 1992: Allowance for doubtful accounts $ 15,179 $ 18,126 $ 10,893 $ 22,412 ========= ========= ========= =========
(A) Deductions include accounts written off net of recoveries and, in 1992, additions of $4.3 million from the acquisition of subsidiaries. -19- 20 VF CORPORATION SCHEDULE IX - SHORT-TERM BORROWINGS
- ----------------------------------------------------------------------------------------------------------------------------------- COL. A COL. B COL. C COL. D COL. E COL. F - ----------------------------------------------------------------------------------------------------------------------------------- Weighted Maximum Average Average Weighted Amount Amount Interest Category of Aggregate Balance Average Outstanding Outstanding Rate Short-term Borrowings at End of Interest During the During the During the Period Rate Period Period (A) Period (B) - ----------------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands) Fiscal year ended January 1, 1994: Commercial paper $ - - $ 110,000 $ 39,931 3.36% Short-term borrowings with domestic banks - - 320,000 34,918 3.70% Short-term borrowings with foreign banks 35,648 10.70% 61,880 31,644 10.30% --------- $ 35,648 ========= Fiscal year ended January 2, 1993: Commercial paper $ - - $ 139,770 $ 61,086 3.93% Short-term borrowings with domestic banks 88,100 3.70% 88,100 46,508 4.03% Short-term borrowings with foreign banks 37,722 12.11% 60,822 38,546 11.06% --------- $ 125,822 ========= Fiscal year ended January 4, 1992: Commercial paper $ - - $ 33,211 $ 5,718 6.78% Short-term borrowings with domestic banks - - 29,500 2,833 7.72% Short-term borrowings with foreign banks 5,954 9.22% 7,042 5,416 9.67% --------- $ 5,954 =========
(A) The average amount outstanding during the period is computed based on average month-end balances for amounts payable to banks and on average daily balances for commercial paper. (B) The weighted average interest rate during the period was computed by dividing actual interest expense by average short-term debt outstanding. Columns D, E, and F exclude short-term obligations classified as long-term pursuant to FASB Statement No. 6 in 1992. -20- 21 VF CORPORATION SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
- ------------------------------------------------------------------------------------------------------------------ COL. A COL. B - ------------------------------------------------------------------------------------------------------------------ Item Charged to Costs and Expenses - ------------------------------------------------------------------------------------------------------------------ (Dollars in thousands) Fiscal year ended January 1, 1994: Maintenance and repairs $ 52,716 Advertising costs 199,764 Fiscal year ended January 2, 1993: Maintenance and repairs $ 49,900 Advertising costs 187,819 Fiscal year ended January 4, 1992: Maintenance and repairs $ 47,834 Advertising costs 127,910
Depreciation and amortization of intangible assets, taxes other than payroll and income taxes, and royalties were less than 1% of total sales and revenues for fiscal 1993, 1992 and 1991. -21- 22 FORM 10-K -- ITEM 14 The following exhibits of VF Corporation are included in Item 14(c): EXHIBIT INDEX
Page Number Number Description In This Report - ------ ----------- -------------- 2 Plan of acquisition, reorganization, arrangement, liquidation or succession: (A) Agreement and Plan of Merger between the Corporation, Spice (Incorporated Acquisition Co. and Nutmeg Industries, Inc. dated December by reference) 12, 1993 3 Articles of incorporation and bylaws: (A) Articles of Incorporation, as amended and restated as of (Incorporated April 18, 1986 and as presently in effect by reference) (B) Statement Affecting Class or Series of Shares (Incorporated by reference) (C) Statement with Respect to Shares of Series B ESOP (Incorporated Convertible Preferred Stock by reference) (D) Bylaws, as amended through July 17, 1990 and as presently in (Incorporated effect by reference) 4 Instruments defining the rights of security holders, including indentures: (A) A specimen of the Corporation's Common Stock certificate (Incorporated by reference) (B) A specimen of the Corporation's Series B ESOP Convertible (Incorporated Preferred Stock certificate by reference) (C) Indenture between the Corporation and Morgan Guaranty Trust (Incorporated Company of New York, dated January 1, 1987 by reference) (D) First Supplemental Indenture between the Corporation, Morgan (Incorporated Guaranty Trust Company of New York and United States Trust by reference) Company of New York, dated September 1, 1989 (E) Rights Agreement, dated January 13, 1988, between the (Incorporated Corporation and Morgan Shareholder Services Trust Company by reference) (F) Amendment No. 1 to Rights Agreement, dated April 17, (Incorporated 1990, between the Corporation and First Chicago Trust by reference) Company of New York (G) Amendment No. 2 to Rights Agreement, dated December 4, 1990, (Incorporated between the Corporation and First Chicago Trust Company of by reference) New York
23 10 Material contracts: (A) 1982 Stock Option Plan (Incorporated by reference) (B) 1991 Stock Option Plan (Incorporated by reference) (C) Annual Discretionary Management Incentive Compensation Program (Incorporated by reference) (D) Deferred Compensation Plan (Incorporated by reference) (E) Executive Deferred Savings Plan (Incorporated by reference) (F) Amended and Restated Supplemental Executive Retirement Plan, (Incorporated dated May 16, 1989 by reference) (G) First Amended Annual Benefit Determination under the Amended (Incorporated and Restated Supplemental Executive Retirement Plan for L. by reference) R. Pugh (H) Second Amended Annual Benefit Determination under the (Incorporated Amended and Restated Supplemental Executive Retirement Plan by reference) for Mid-Career Senior Management (I) Third Amended Annual Benefit Determination under the Amended (Incorporated and Restated Supplemental Executive Retirement Plan for by reference) Senior Management (J) Fourth Amended Annual Benefit Determination under the (Incorporated Amended and Restated Supplemental Executive Retirement Plan by reference) for Participants in the Corporation's Deferred Compensation Plan (K) Fifth Amended Annual Benefit Determination under the Amended (Incorporated and Restated Supplemental Executive Retirement Plan which by reference) funds certain benefits upon a Change in Control
24 (L) Form of Change in Control Agreement with senior management (Incorporated of the Corporation by reference) (M) Form of Change in Control Agreement with other management of (Incorporated the Corporation by reference) (N) Form of Change in Control Agreement with management of (Incorporated subsidiaries of the Corporation by reference) (O) Revolving Credit Agreement, dated October 21, 1993 (Incorporated by reference) 11 Computation of earnings per common share 13 Annual report to security holders 21 Subsidiaries of the Corporation 23.1 Consents of experts and counsel 23.2 Consents of experts and counsel 24 Power of attorney 99 Additional exhibits: (A) Form 11-K for VF Corporation Tax-Advantaged Savings Plan for Salaried Employees for the year ended December 31, 1993
EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1
EXHIBIT 11 VF CORPORATION COMPUTATION OF EARNINGS PER COMMON SHARE (In thousands, except per share amounts) wwww Fiscal Year Ended ----------------------------------------------- January 1 January 2 January 4 1994 1993 1992 ---------- ---------- ---------- Primary earnings per common share - --------------------------------- Net income $246,415 $237,031 $161,330 Less preferred stock dividends 3,094 4,335 4,366 -------- -------- -------- Net income available to common stockholders $243,321 $232,696 $156,964 ======== ======== ======== Average number of common shares outstanding 64,011 58,608 57,152 ======== ======== ======== Primary earnings per share $3.80 $3.97 $2.75 ======== ======== ======== Fully diluted earnings per common share - --------------------------------------- Net income $246,415 $237,031 $161,330 Increased ESOP contribution required if preferred stock were converted to common stock 1,567 2,488 2,656 -------- -------- -------- Fully diluted earnings $244,848 $234,543 $158,674 ======== ======== ======== Average number of common shares outstanding 64,011 58,608 57,152 Additional common equivalent shares resulting from: Conversion of preferred stock 1,647 1,664 1,676 Dilutive effect of stock options 367 716 1,644 -------- -------- -------- Average number of common and common equivalent shares 66,025 60,988 60,472 ======== ======== ======== Fully diluted earnings per share $3.71 $3.85 $2.62 ======== ======== ========
EX-13 3 ANNUAL REPORT TO SECURITY HOLDERS 1 QUARTERLY RESULTS OF OPERATIONS
In thousands, Earnings Per Common Share except per share ---------------------------- Dividends Per amounts Net Sales Gross Profit Net Income Primary Fully Diluted Common Share - ---------------------------------------------------------------------------------------------------------------------------------- 1993 First quarter $1,016,644 $323,226 $52,729 $.83 $.81 $.30 Second quarter 1,053,411 327,546 55,731 .85 .83 .30 Third quarter 1,152,842 355,044 76,815* 1.18* 1.15* .30 Fourth quarter 1,097,507 339,727 61,140 .94 .92 .32 - ---------------------------------------------------------------------------------------------------------------------------------- $4,320,404 $1,345,543 $246,415 $3.80 $3.71 $1.22 - ---------------------------------------------------------------------------------------------------------------------------------- 1992 First quarter $817,592 $261,770 $43,692 $.73 $.71 $.27 Second quarter 852,544 269,203 46,202 .77 .75 .27 Third quarter 1,125,294 368,215 76,556 1.29 1.25 .27 Fourth quarter 1,029,019 321,535 70,581** 1.18** 1.14** .30 - ---------------------------------------------------------------------------------------------------------------------------------- $3,824,449 $1,220,723 $237,031 $3.97 $3.85 $1.11 - ---------------------------------------------------------------------------------------------------------------------------------- 1991 First quarter $613,308 $193,978 $28,529 $.48 $.47 $.25 Second quarter 654,010 201,471 30,651 .52 .50 .25 Third quarter 834,844 258,272 53,753 .92 .89 .25 Fourth quarter 850,271 258,925 48,397 .83 .79 .27 - ---------------------------------------------------------------------------------------------------------------------------------- $2,952,433 $912,646 $161,330 $2.75 $2.62 $1.02 - ----------------------------------------------------------------------------------------------------------------------------------
* Interest income relating to settlement of income tax examinations increased net income by $15.1 million ($.24 per share). ** A refund of prior years' income taxes and related interest income increased net income by $14.4 million ($.24 per share), and recognition of cumulative postretirement benefits reduced net income by $4.1 million ($.07 per share). VF CORPORATION -22- 2 MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS Management of VF Corporation has prepared the accompanying financial statements and is responsible for their content. We believe the statements accurately report the financial position and operating results of the Corporation, on a basis consistent with generally accepted accounting principles and management's best estimates and judgments. Other financial information in this report is consistent with these financial statements. Management has established a system of internal control which we believe reasonably assures that assets are safeguarded and that financial information is accurately reported. Inherent in all systems of internal control are limitations based on the recognition that the costs of such systems should be related to the benefits to be derived. The internal control system is routinely challenged by management, the independent auditors and our internal audit staff to determine whether the internal control system continues to function effectively. Significant auditor recommendations have been reviewed and adopted when appropriate. The Audit Committee of the Board of Directors meets periodically with the independent and internal auditors to discuss the scope and findings of audit work performed, the impact of financial reporting issues and the adequacy of the internal control system. The independent auditors and internal auditors have full access to the Committee, with and without the presence of management, to discuss any appropriate matters. /s/ L. R. PUGH - -------------- L. R. Pugh Chairman and Chief Executive Officer /s/ G. G. JOHNSON - ----------------- G. G. Johnson Vice President-Finance and Chief Financial Officer /s/ R. K. SHEARER - ----------------- R. K. Shearer Controller and Chief Accounting Officer REPORT OF ERNST & YOUNG INDEPENDENT AUDITORS Board of Directors and Shareholders VF Corporation We have audited the accompanying consolidated balance sheets of VF Corporation as of January 1, 1994 and January 2, 1993, and the related consolidated statements of income, cash flows, and common shareholders' equity for each of the three fiscal years in the period ended January 1, 1994. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of VF Corporation at January 1, 1994 and January 2, 1993, and the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended January 1, 1994 in conformity with generally accepted accounting principles. /s/ ERNST & YOUNG - ----------------- Reading, Pennsylvania February 4, 1994 VF CORPORATION -23- 3 CONSOLIDATED STATEMENTS OF INCOME
In thousands, except per share amounts Fiscal year ended January 1, 1994 January 2, 1993 January 4, 1992 - ------------------------------------------------------------------------------------------------------------------------- Net Sales $4,320,404 $3,824,449 $2,952,433 Costs and Operating Expenses Cost of products sold 2,974,861 2,603,726 2,039,787 Marketing, administrative and general expenses 913,734 791,343 608,592 - ------------------------------------------------------------------------------------------------------------------------- 3,888,595 3,395,069 2,648,379 - ------------------------------------------------------------------------------------------------------------------------- Operating Income 431,809 429,380 304,054 Other Income (Expense) Interest income 35,284 17,453 13,432 Interest expense (72,671) (71,068) (68,587) Miscellaneous, net 5,565 8 14,298 - ------------------------------------------------------------------------------------------------------------------------- (31,822) (53,607) (40,857) - ------------------------------------------------------------------------------------------------------------------------- Income Before Income Taxes 399,987 375,773 263,197 Income Taxes 153,572 138,742 101,867 - ------------------------------------------------------------------------------------------------------------------------- Net Income $246,415 $237,031 $161,330 - ------------------------------------------------------------------------------------------------------------------------- Earnings Per Common Share Primary $3.80 $3.97 $2.75 Fully diluted 3.71 3.85 2.62 Cash Dividends Per Common Share $1.22 $1.11 $1.02 Average Number of Common Shares Outstanding 64,011 58,608 57,152 - ------------------------------------------------------------------------------------------------------------------------- See notes to consolidated financial statements. SALES AND OPERATING PROFIT BY BUSINESS GROUP (UNAUDITED)
In thousands Fiscal year ended January 1, 1994 January 2, 1993 January 4, 1992 - ------------------------------------------------------------------------------------------------------------------------- Net Sales Jeanswear $2,097,509 $1,896,258 $1,371,978 Casual/Sportswear 638,986 652,571 505,804 Intimate Apparel 436,500 420,200 452,899 International 641,827 420,278 272,524 Other Apparel 505,582 435,142 349,228 - ------------------------------------------------------------------------------------------------------------------------- $4,320,404 $3,824,449 $2,952,433 - ------------------------------------------------------------------------------------------------------------------------- Operating Profit Jeanswear $266,680 $274,256 $173,640 Casual/Sportswear 24,265 52,184 37,889 Intimate Apparel 40,214 53,425 42,289 International 70,891 34,253 35,937 Other Apparel 67,842 46,483 42,103 - ------------------------------------------------------------------------------------------------------------------------- 469,892 460,601 331,858 Corporate Expenses (38,083) (31,221) (27,804) Interest, net (37,387) (53,615) (55,155) Other Income, net 5,565 8 14,298 - ------------------------------------------------------------------------------------------------------------------------- Income Before Income Taxes $399,987 $375,773 $263,197 - -------------------------------------------------------------------------------------------------------------------------
VF CORPORATION -24- 4 MANAGEMENT'S ANALYSIS OF OPERATIONS The primary objective of VF Corporation is to provide long-term growth in shareholder value through superior operating performance and sound investment strategies. In 1991 and 1992, our results surpassed Corporate objectives of 10% growth in sales and earnings. And while sales growth exceeded our 10% objective in 1993, restructuring charges and a difficult knitwear industry environment prevented the Corporation from attaining our earnings growth target for this year. RESULTS OF OPERATIONS Net sales in 1993 were up 13% over 1992 and 46% over 1991. These sales increases resulted primarily from unit volume growth within existing divisions. Less than 20% of the sales growth during the period 1991 to 1993 represented sales from acquired companies. Gross margins were 31.1% of sales in 1993, compared with 31.9% in 1992 and 30.9% in 1991. While the 1993 gross margin percentage was below 1992, it is comparable with the Corporation's historical results. The 1993 percent was lower than the 1992 level due to a provision for capacity reduction in knitwear and significantly reduced margins at Girbaud. Marketing and administrative expenses increased to 21.1% of sales in 1993, from 20.7% and 20.6% in 1992 and 1991, respectively. The inclusion of the newly acquired international intimate apparel divisions in 1993, which have historically maintained higher marketing spending levels, accounted for the increase in 1993. Interest income in 1993 included $24.4 million and in 1992 $8.3 million related to refunds of prior years' income taxes. Excluding these unusual items, interest income and expense were relatively flat during the three year period. The increase in miscellaneous income (net) in 1993 over 1992 resulted from the inclusion in 1992 of a $6.6 million provision representing the cumulative charge for postretirement benefits under Financial Accounting Standards No. 106. The 1993 amount was below 1991 due to lower tenant income on outlet stores sold during 1993 and higher goodwill amortization expense in 1993. The effective income tax rate was 38.4% in 1993, 36.9% in 1992 and 38.7% in 1991. The 1993 rate included the effect of the 1% increase in the United States corporate income tax rate. The 1992 rate was reduced by a $9.2 million refund of prior years' taxes. OPERATING RESULTS BY BUSINESS GROUP Sales in the Jeanswear business group, which includes the Wrangler, Lee, Rustler, Riders and Marithe and Francois Girbaud brands in the United States, increased by 11% in 1993 over 1992 and 53% over 1991 levels. Jeanswear operating margins increased substantially during 1992, primarily due to improvements at Lee. However, provisions for reorganization at Girbaud, after a year of reduced sales and earnings, pushed Jeanswear operating margins in 1993 below the two prior years. The Casual/Sportswear business group consists of Bassett-Walker, Jantzen and JanSport. Industry-wide overcapacity in fleece and T-shirts in 1993 prompted a provision for the reduction of knitwear production capacity at Bassett-Walker and otherwise contributed to reduced operating results in this division. Sales and operating profit increased at Jantzen and JanSport during the three year period. Sales at Vanity Fair, the largest division in the Intimate Apparel group, grew in each of the three years, largely due to growth of the Vassarette brand and increases in private label sales. The 1992 decline in sales in this group was due to the reclassification of Modern Globe to Casual/Sportswear. Operating margins in the Intimate Apparel group were reduced in 1993 due to manufacturing difficulties at Vanity Fair resulting from a shift in product mix. Operating margins were lower in 1991 than in 1992 as a result of cost inefficiencies related to Vanity Fair's rapid growth. The International business group includes all international operations, presently represented by jeanswear and intimate apparel. In 1992, VF entered the intimate apparel market in Europe through the acquisitions of Valero in January and Vivesa and JBE in December. Valero accounted for a substantial portion of the 1992 sales increase in this group, and in 1993 the three intimate apparel companies represented more than half of the increase in sales from 1991. Jeanswear includes both Lee and Wrangler jeanswear operations, primarily in Europe. Jeanswear sales increased in 1993 and 1992 from higher unit volume in existing operations and the opening of new subsidiaries. Jeanswear operating profit increased significantly in 1993, returning to the 1991 level as a percent of sales. Operating profit of the International group in 1992 was lower as a percent of sales due to additional advertising costs within the jeanswear operations and the inclusion of Valero, which reported a nominal operating profit. Operating margins of the international intimate apparel companies are lower than the jeanswear companies. Red Kap and Healthtex are the major components of the Other Apparel group. Sales have increased during the three year period at Red Kap, partly due to the late 1991 acquisition of WorkWear, and at Healthtex, which was acquired in early 1991. The primary factor in the improved operating margin in this category in 1993 versus 1992 was the substantial profit turnaround at Healthtex. The decline in the operating margin in 1992 from 1991 reflected the effects on Red Kap of a difficult economic climate within the nation's manufacturing sector. VF CORPORATION -25- 5 CONSOLIDATED BALANCE SHEETS
In thousands January 1, 1994 January 2, 1993 - ----------------------------------------------------------------------------------------------------------------- ASSETS Current Assets Cash and equivalents $151,564 $86,320 Accounts receivable, less allowances of $28,808 in 1993 and $30,275 in 1992 511,887 493,030 Inventories 778,767 742,474 Deferred income taxes 38,138 21,788 Other current assets 19,824 21,961 - ----------------------------------------------------------------------------------------------------------------- Total current assets 1,500,180 1,365,573 Property, Plant and Equipment 712,759 711,087 Intangible Assets 575,359 554,703 Other Assets 89,050 81,017 - ----------------------------------------------------------------------------------------------------------------- $2,877,348 $2,712,380 - ----------------------------------------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term borrowings $35,648 $125,822 Current portion of long-term debt 110,119 54,195 Accounts payable 246,503 248,592 Accrued liabilities 267,578 255,393 - ----------------------------------------------------------------------------------------------------------------- Total current liabilities 659,848 684,002 Long-term Debt 527,573 767,641 Other Liabilities 126,978 95,248 Redeemable Preferred Stock 63,309 63,900 Deferred Contribution to Employee Stock Ownership Plan (47,760) (52,382) - ----------------------------------------------------------------------------------------------------------------- 15,549 11,518 Common Shareholders' Equity Common Stock, stated value $1; shares authorized 150,000,000; shares outstanding, 64,488,660 in 1993 and 59,519,239 in 1992 64,489 59,519 Additional paid-in capital 543,165 301,336 Foreign currency translation adjustments (12,865) 4,244 Retained earnings 952,611 788,872 - ----------------------------------------------------------------------------------------------------------------- 1,547,400 1,153,971 - ----------------------------------------------------------------------------------------------------------------- $2,877,348 $2,712,380 - -----------------------------------------------------------------------------------------------------------------
*See notes to consolidated financial statements. VF CORPORATION -26- 6 MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITION In managing its capital structure, VF balances financial leverage with equity capital to reduce its overall cost of capital, while providing the flexibility to pursue investment opportunities that may become available. In January 1993, the Corporation sold 4.6 million shares of Common Stock. While proceeds were specifically used to repay short-term borrowings that temporarily financed the business acquisitions completed during 1992, the offering provided additional flexibility within the Corporation's overall capital structure. It is management's goal to maintain a debt to capital ratio of less than 40%. Our debt to capital ratio was within these guidelines at the end of 1993, at 30.3%. At the end of 1992, this ratio was 44.8%. However, on a pro forma basis, assuming the equity offering had occurred as of year-end 1992, the ratio was 33.9%. Despite our goal to maintain the debt ratio below 40%, we will exceed this level if warranted by appropriate investment opportunities. BALANCE SHEET The increase in total assets in 1993 was less than the volume growth in our businesses. This was due to several factors, including controls over working capital, the sale of certain outlet store facilities that are now being leased, and the sale of our yarn making facilities. Accounts receivable and inventories at the end of 1992 included those of the two newly acquired international intimate apparel companies, purchased on December 30, 1992. However, due to the date of acquisition, operating results of these new divisions were not included in the Corporation's 1992 reported numbers. Excluding the receivables of those divisions at the end of 1992, the increase in accounts receivable in 1993 was consistent with the growth in sales during the period. On a similar basis, the increase in inventories in 1993 was at a rate less than the growth in sales. Short-term borrowings at January 2, 1993 totaled $357.7 million, which include $231.9 million classified as long-term debt due to their repayment in January 1993 from the proceeds of the sale of VF Common Stock. Short-term borrowings were further reduced by the end of 1993 by cash generated from operations during the year. LIQUIDITY AND CASH FLOW The Corporation maintains a relatively liquid financial position. Because the increase in working capital in 1993 over 1992 was less than the growth in sales, the current ratio improved to 2.3 to 1 in 1993 versus 2.0 to 1 in 1992. Cash provided by operations of $294 million in 1993 was comparable to the amount in 1991 of $287 million. Cash provided in 1992 was substantially lower at $123 million due to increases in inventories and accounts receivable that were not proportionate to volume growth. Capital expenditures in 1993 were comparable to 1992 at $209 million and $207 million, respectively. The increase in spending over the 1991 level of $111 million was required to support the capacity needs resulting from growth, particularly in the domestic jeanswear operations. Capital expenditures in 1994, which should approximate the 1993 level, are expected to be funded by operations. In addition, the Corporation's strong financial position provides substantial unused borrowing capacity to meet other investment opportunities that may arise. Dividends totaled $1.22 per common share in 1993, compared with $1.11 in 1992 and $1.02 in 1991. The dividend payout rate was 32% in 1993, 28% in 1992 and 37% in 1991. The indicated annual dividend rate for 1994 is $1.28 per share. VF has paid dividends on its Common Stock annually since 1941 and intends to maintain a long-term payout rate of 30%. OTHER MATTERS The Corporation is a defendant in an action initiated in 1990 alleging infringement of a patent allegedly relating to a process, commonly called "acid wash", used in the production of certain denim garments. Similar actions have been brought against other denim apparel manufacturers. The Corporation is vigorously contesting the action and believes that it has numerous substantive defenses. No trial date has been set. Based on currently available information and the advice of counsel, management is not in a position to determine the likelihood of the outcome of the action with certainty. Notwithstanding, management believes at this time that the outcome will not have a material impact on the financial position of the Corporation. VF CORPORATION -27- 7 CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands Fiscal year ended January 1, 1994 January 2, 1993 January 4, 1992 - ----------------------------------------------------------------------------------------------------------------------------------- Operations Net income $246,415 $237,031 $161,330 Adjustments to reconcile net income to cash provided by operations: Depreciation 106,678 90,866 76,292 Amortization of intangible assets 19,087 17,415 14,699 Other (3,177) (19,215) (1,124) Changes in current assets and liabilities: Accounts receivable (24,094) (95,027) (18,342) Inventories (41,797) (160,511) (55,317) Accounts payable 421 48,608 95,767 Other, net (9,782) 3,893 13,867 - ----------------------------------------------------------------------------------------------------------------------------------- Cash provided by operations 293,751 123,060 287,172 Investments Capital expenditures (209,494) (207,202) (110,762) Business acquisitions (17,629) (133,857) (60,806) Sale of outlet facilities 62,000 - - Other, net 45,840 8,513 10,476 - ----------------------------------------------------------------------------------------------------------------------------------- Cash invested (119,283) (332,546) (161,092) Financing Increase (decrease) in short-term borrowings (86,756) 55,751 (27,632) Proceeds from long-term debt 98,557 331,900 100,325 Payment of long-term debt (283,560) (231,708) (51,656) Sale of Common Stock 232,068 - - Cash dividends paid (82,831) (69,552) (62,712) Other 13,298 47,123 15,872 - ----------------------------------------------------------------------------------------------------------------------------------- Cash provided (used) by financing (109,224) 133,514 (25,803) - ----------------------------------------------------------------------------------------------------------------------------------- Net Change in Cash and Equivalents 65,244 (75,972) 100,277 Cash and Equivalents - Beginning of Year 86,320 162,292 62,015 - ----------------------------------------------------------------------------------------------------------------------------------- Cash and Equivalents - End of Year $151,564 $86,320 $162,292 - -----------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. VF CORPORATION -28- 8 CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
Common Additional Foreign Currency Retained In thousands Stock Paid-in Capital Translation Earnings - ---------------------------------------------------------------------------------------------------------------- Balance December 29, 1990 $57,013 $222,482 $16,968 $526,663 Net income - - - 161,330 Cash dividends: Common Stock - - - (58,346) Series B Preferred Stock - - - (4,366) Exercise of stock options, net of shares surrendered 687 17,505 - (944) Foreign currency translation adjustments - - (914) - - ---------------------------------------------------------------------------------------------------------------- Balance January 4, 1992 57,700 239,987 16,054 624,337 Net income - - - 237,031 Cash dividends: Common Stock - - - (65,217) Series B Preferred Stock - - - (4,335) Exercise of stock options, net of shares surrendered 1,819 61,349 - (2,944) Foreign currency translation adjustments - - (11,810) - - ---------------------------------------------------------------------------------------------------------------- Balance January 2, 1993 59,519 301,336 4,244 788,872 Net income - - - 246,415 Cash dividends: Common Stock - - - (78,540) Series B Preferred Stock - - - (4,291) Tax benefit from Preferred Stock dividends - - - 1,180 Redemption of Preferred Stock - - - (264) Sale of Common Stock 4,600 227,468 - - Exercise of stock options, net of shares surrendered 370 14,361 - (761) Foreign currency translation adjustments, less deferred income taxes of $6,927 - - (17,109) - - ---------------------------------------------------------------------------------------------------------------- Balance January 1, 1994 $64,489 $543,165 $(12,865) $952,611 - ----------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. VF CORPORATION -29- 9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Corporation's principal business is designing, manufacturing and marketing high quality jeanswear, casual/sportswear, intimate apparel and other apparel. The Corporation's customers are primarily department, discount and specialty stores. NOTE A - ACCOUNTING POLICIES Principles of Consolidation: The consolidated financial statements include the accounts of all wholly owned subsidiaries after elimination of intercompany transactions and profits. Inventories are stated at the lower of cost or market. Inventories stated on the last-in, first-out basis represent 32% of total 1993 and 30% of 1992 inventories. Remaining inventories are valued using the first-in, first-out method. Property and Depreciation: Property, plant and equipment are stated at cost. Depreciation is computed principally by the straight-line method for financial reporting purposes and by accelerated methods for income tax purposes. Intangible Assets represent the excess of costs over net tangible assets of businesses acquired, less accumulated amortization of $140.0 million and $120.9 million in 1993 and 1992. These assets are amortized on the straight-line method over five to forty years. Income Taxes: The Corporation adopted FASB Statement No. 109, "Accounting for Income Taxes," at the beginning of 1993. Since the effect of adopting the new Statement was not significant, prior year financial statements have not been restated. Earnings Per Share: Primary earnings per share are computed by dividing net income, after deducting preferred dividends, by the weighted average number of common shares outstanding. Fully diluted earnings per share assume the conversion of preferred stock and the exercise of stock options that have a dilutive effect. NOTE B - ACQUISITIONS In December 1993, the Corporation acquired the principal operating assets of Central Corsetera, S.A. for $17.6 million. During 1992, the Corporation acquired the common stock of The Valero Group (Valero), Vives Vidal, S.A. (Vivesa) and Jean Bellanger Enterprises (JBE) for an aggregate purchase price of $150.9 million. These companies manufacture and market branded intimate apparel primarily in France and Spain. In 1991, the Corporation acquired the principal operating assets of Healthtex childrenswear, Barbizon intimate apparel and WorkWear occupational apparel for an aggregate purchase price of $60.2 million. All acquisitions have been accounted for as purchases, and accordingly, operating results of these companies have been included in the consolidated financial statements since the dates of acquisition. In January 1994, the Corporation acquired the common stock of H.H. Cutler Company for $154.7 million. Also in January 1994, the Corporation acquired the common stock of Nutmeg Industries, Inc. for $352.2 million. Both companies manufacture and market licensed sports apparel. NOTE C - INVENTORIES
In thousands 1993 1992 - ---------------------------------------------------------------- Finished products $486,045 $438,525 Work in process 119,582 133,034 Materials and supplies 173,140 170,915 - ---------------------------------------------------------------- $778,767 $742,474 - ----------------------------------------------------------------
The current cost of inventories stated on the last-in, first-out method is not significantly different from their value determined under the first-in, first-out method. NOTE D - PROPERTY, PLANT AND EQUIPMENT
In thousands 1993 1992 - ---------------------------------------------------------------- Land $40,612 $50,838 Buildings 346,656 370,421 Machinery and equipment 862,755 820,332 - ---------------------------------------------------------------- 1,250,023 1,241,591 Less accumulated depreciation 537,264 530,504 - ---------------------------------------------------------------- $712,759 $711,087 - ----------------------------------------------------------------
NOTE E - ACCRUED LIABILITIES
In thousands 1993 1992 - ---------------------------------------------------------------- Income taxes $41,270 $39,891 Compensation 48,633 53,258 Insurance 27,345 21,757 Other 150,330 140,487 - ---------------------------------------------------------------- $267,578 $255,393 - ----------------------------------------------------------------
VF CORPORATION -30- 10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE F - LONG-TERM DEBT
In thousands 1993 1992 - --------------------------------------------------------------------------------------------------------- Revolving credit agreement $ - $231,900 8.86% to 8.88% notes, due 1993 - 50,000 9.40% notes, due 1996 100,000 100,000 8.00% notes, due 1997 100,000 100,000 9.50% notes, due 1999 100,000 100,000 9.50% notes, due 2001 100,000 100,000 6.63% notes, due 2003 100,000 - 9.25% debentures, due 2022 100,000 100,000 Capital leases and other 37,692 39,936 - --------------------------------------------------------------------------------------------------------- 637,692 821,836 Less current portion 110,119 54,195 - --------------------------------------------------------------------------------------------------------- $527,573 $767,641 - ---------------------------------------------------------------------------------------------------------
The scheduled payments of long-term debt are $2.6 million in 1995, $102.2 million in 1996, $1.8 million in 1997 and $.7 million in 1998. The 1997 notes were called for redemption in January 1994 and, accordingly, are classified as a current obligation. The Corporation paid interest of $70.3 million in 1993, $68.1 million in 1992 and $65.2 million in 1991. The Corporation maintains unsecured revolving credit agreements with banks totaling $750 million, which support commercial paper borrowings and are otherwise available for general corporate purposes. One of these agreements, which provides $250 million of the total available credit, requires a commitment fee of .125% and expires in October 1994 with a one year term loan option. The agreement that provides the remaining $500 million of credit requires an .18% fee on the unused portion and extends to October 1997. At January 1, 1994, there were no borrowings under these agreements. Borrowings at the end of 1992 totaled $320.0 million, which were reduced by $231.9 million in January 1993 with proceeds from the sale of VF Common Stock. The fair value of the Corporation's long-term debt exceeded its recorded amount by $51.8 million at January 1, 1994 and by $38.0 million at January 2, 1993. The fair value of the Corporation's short-term borrowings approximates its recorded amount. Fair value is based on quoted market prices or values of comparable borrowings. NOTE G - OTHER LIABILITIES
In thousands 1993 1992 - --------------------------------------------------------------------------------------------------------- Deferred income taxes $60,446 $51,505 Deferred compensation 30,782 18,970 Other 35,750 24,773 - --------------------------------------------------------------------------------------------------------- $126,978 $95,248 - ---------------------------------------------------------------------------------------------------------
NOTE H - BENEFIT PLANS The Corporation sponsors a noncontributory defined benefit pension plan covering substantially all full-time domestic employees. Benefits are based on employees' compensation and years of service. The Corporation annually contributes amounts, as determined by an actuary, that provide the plan with sufficient assets to meet future benefit payments. Plan assets consist principally of common stocks, corporate obligations and U.S. government obligations. The effect of the defined benefit plan on income is as follows:
In thousands 1993 1992 1991 - --------------------------------------------------------------------------------------------------------- Service cost-benefits earned during the year $10,337 $8,568 $8,343 Interest cost on projected benefit obligation 22,148 18,934 16,750 Actual return on plan assets (34,895) (19,646) (42,530) Net amortization and deferral 12,574 (1,884) 23,448 - --------------------------------------------------------------------------------------------------------- Pension expense $10,164 $5,972 $6,011 - ---------------------------------------------------------------------------------------------------------
The funded status of the defined benefit plan is as follows:
In thousands 1993 1992 - --------------------------------------------------------------------------------------------------------- Present value of vested benefits $265,457 $203,763 - --------------------------------------------------------------------------------------------------------- Present value of accumulated benefits $285,390 $217,087 - --------------------------------------------------------------------------------------------------------- Plan assets at fair value $289,324 $254,191 Present value of projected benefits 332,656 241,514 - --------------------------------------------------------------------------------------------------------- Funded status (43,332) 12,677 Unrecognized net loss 42,147 978 Unrecognized net asset (20,580) (24,958) Unrecognized prior service cost 33,169 19,371 - --------------------------------------------------------------------------------------------------------- Pension asset recorded in Other Assets $11,404 $8,068 - ---------------------------------------------------------------------------------------------------------
The projected benefit obligation was determined using an assumed discount rate of 7.5% in 1993 and 9.0% in 1992 and 1991. The assumption for compensation increases was 5.0% in 1993 and 5.5% in 1992 and 1991, and for return on plan assets was 8.75% in 1993 and 1992 and 8.5% in 1991. The Corporation also sponsors an Employee Stock Ownership Plan (ESOP) as part of a 401(k) savings plan covering most domestic salaried employees. Contributions made by the Corporation to the 401(k) plan are based on a specified percentage of employee contributions. Cash contributions by the Corporation were $4.5 million in 1993, $4.0 million in 1992 and $4.1 million in 1991. Plan expense was $6.0 million for 1993 and 1992 and $6.5 million for 1991, after giving effect to tax-deductible dividends on the Series B Preferred Stock of $4.3 million in 1993 and 1992 and $4.4 million in 1991. In accordance with FASB Statement No. 109, tax benefits on ESOP dividends are credited to retained earnings beginning in 1993. VF CORPORATION -31- 11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE I - CAPITAL Common shares outstanding are net of shares held in treasury of 1,769,131 in 1993, 1,766,832 in 1992 and 1,702,891 in 1991. In January 1993, the Corporation issued 4,600,000 shares of Common Stock in a public offering. The net proceeds were used to repay borrowings incurred to purchase Valero, Vivesa and JBE. (See Note B.) There are 25,000,000 authorized shares of Preferred Stock, $1 par value. As of January 1, 1994, 2,000,000 shares are designated as Series A Preferred Stock, of which none have been issued. In addition, 2,105,263 shares are designated as 6.75% Series B Preferred Stock, which were purchased by the ESOP. There were 2,050,491 shares of Series B Preferred Stock outstanding at January 1, 1994, 2,069,965 shares outstanding at January 2, 1993 and 2,090,597 shares at January 4, 1992, after share redemptions. Each outstanding share of Common Stock has one preferred stock purchase right attached. The rights become exercisable ten days after an outside party acquires, or makes an offer for, 20% or more of the Common Stock. Each right entitles its holder to buy 1/100 share of Series A Preferred Stock for $100. Once exercisable, if the Corporation is involved in a merger or other business combination or an outside party acquires 20% or more of the Common Stock, each right will be modified to entitle its holder (other than the acquiror) to purchase common stock of the acquiring company or, in certain circumstances, VF Common Stock having a market value of twice the exercise price of the right. In some circumstances, rights other than those held by an acquiror may be exchanged for one share of VF Common Stock or 1/100 share of Series A Preferred Stock. The rights, which expire on January 13, 1998, may be redeemed at $.01 per right prior to their becoming exercisable. NOTE J - REDEEMABLE PREFERRED STOCK Each share of Series B Preferred Stock has a redemption value of $30.88 plus cumulative accrued dividends, is convertible into 8/10 share of Common Stock and is entitled to one vote per share along with the Common Stock. The trustee for the ESOP may convert the preferred shares to Common Stock at any time or may cause the Corporation to redeem the preferred shares under certain circumstances. The Series B Preferred Stock also has preference in liquidation over all other stock issues. The ESOP's purchase of the preferred shares was funded by a loan of $65.0 million from the Corporation that bears interest at 9.8% and is payable in increasing installments through 2004. Interest related to this loan was $5.7 million in 1993, $6.0 million in 1992 and $6.2 million in 1991. Principal and interest obligations on the loan are satisfied as the Corporation makes contributions to the savings plan and dividends are paid on the Preferred Stock. As principal payments are made on the loan, shares of Preferred Stock are allocated to participating employees' accounts within the ESOP. The fair value of the Series B Preferred Stock at January 1, 1994, based on a valuation by an independent financial consulting firm, exceeds its recorded amount by $12.4 million. NOTE K - STOCK OPTIONS The Corporation has granted nonqualified and incentive stock options under two stock option plans at prices not less than fair market value on the date of grant. Options become exercisable one year after the date of grant and expire ten years after the date of grant unless otherwise specified by the Board of Directors. Changes in the status of the stock option plans are summarized as follows:
Shares Shares Under Available Option for Option - ---------------------------------------------------------------------------------- Balance January 2, 1993 3,594,111 56,346 Options granted 47,275 (47,275) Options exercised at $13.03 to $35.90 per share (366,720) - Options cancelled (88,271) 88,271 - ---------------------------------------------------------------------------------- Balance January 1, 1994 3,186,395 97,342 - ---------------------------------------------------------------------------------- Options exercisable at January 1, 1994 at $13.03 to $57.20 per share 3,153,395 - ----------------------------------------------------------------------------------
In December 1993, the Board of Directors adopted an amendment to the 1991 stock option plan, subject to shareholder approval at the April 1994 Annual Meeting, that would increase the number of shares available for future option grants by three million shares. As of January 1, 1994, there are an additional 981,896 options that have been granted at $45.20 per share, subject to shareholder approval of the increase in available shares. VF CORPORATION -32- 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE L - INCOME TAXES The provision for income taxes is computed based on the following amounts of income before income taxes:
In thousands 1993 1992 1991 - --------------------------------------------------------------------------------------------------------------------------------- Domestic $356,109 $363,732 $235,991 Foreign 43,878 12,041 27,206 - --------------------------------------------------------------------------------------------------------------------------------- $399,987 $375,773 $263,197 - ---------------------------------------------------------------------------------------------------------------------------------
The provision for income taxes consists of:
In thousands 1993 1992 1991 - --------------------------------------------------------------------------------------------------------------------------------- Current: Federal $125,966 $111,501 $86,506 Foreign 17,863 17,404 9,886 State 13,806 15,973 11,760 - --------------------------------------------------------------------------------------------------------------------------------- 157,635 144,878 108,152 Deferred, primarily federal (4,063) (6,136) (6,285) - --------------------------------------------------------------------------------------------------------------------------------- $153,572 $138,742 $101,867 - ---------------------------------------------------------------------------------------------------------------------------------
The reasons for the difference between income taxes computed by applying the statutory federal income tax rate and income tax expense in the financial statements are as follows:
In thousands 1993 1992 1991 - --------------------------------------------------------------------------------------------------------------------------------- Tax at federal statutory rate $139,995 $127,763 $89,487 State income taxes, net of federal tax benefit 8,974 10,542 7,762 Amortization of intangible assets 4,234 4,781 4,069 Tax refund - (9,208) - Other, net 369 4,864 549 - --------------------------------------------------------------------------------------------------------------------------------- $153,572 $138,742 $101,867 - ---------------------------------------------------------------------------------------------------------------------------------
Deferred income tax liabilities and assets consist of the following:
In thousands 1993 - --------------------------------------------------------------------------------------------------------------------------------- Depreciation $62,731 Inventories 22,141 Unremitted foreign earnings 16,341 Other 7,317 - --------------------------------------------------------------------------------------------------------------------------------- Deferred income tax liabilities $108,530 - --------------------------------------------------------------------------------------------------------------------------------- Employee benefits $21,699 Other accrued expenses 44,872 Inventories 14,278 Operating loss carryforwards 10,135 Foreign currency translation 6,927 - --------------------------------------------------------------------------------------------------------------------------------- 97,911 Valuation allowance (6,733) - --------------------------------------------------------------------------------------------------------------------------------- Deferred income tax assets $91,178 - ---------------------------------------------------------------------------------------------------------------------------------
Income taxes paid were $152.1 million in 1993, $145.0 million in 1992 and $94.0 million in 1991. Interest income in 1993 includes $24.4 million and in 1992 includes $8.3 million relating to settlements of tax examinations of acquired companies. NOTE M - LEASES The Corporation leases certain facilities and equipment under noncancelable operating leases. Rental expense was $46.9 million in 1993, $30.2 million in 1992 and $24.6 million in 1991. Future minimum lease payments are $43.2 million, $37.2 million, $28.3 million, $19.9 million and $16.8 million for the years 1994 through 1998 and $64.9 million thereafter. NOTE N - OPERATIONS BY GEOGRAPHIC AREA
In thousands 1993 1992 1991 - --------------------------------------------------------------------------------------------------------------------------------- Net sales: United States $3,678,577 $3,404,171 $2,679,909 Foreign 641,827 420,278 272,524 - --------------------------------------------------------------------------------------------------------------------------------- $4,320,404 $3,824,449 $2,952,433 - --------------------------------------------------------------------------------------------------------------------------------- Operating profit: United States $399,001 $426,348 $295,921 Foreign 70,891 34,253 35,937 - --------------------------------------------------------------------------------------------------------------------------------- 469,892 460,601 331,858 Corporate expenses (38,083) (31,221) (27,804) Interest, net (37,387) (53,615) (55,155) Other income, net 5,565 8 14,298 - --------------------------------------------------------------------------------------------------------------------------------- Income before income taxes $399,987 $375,773 $263,197 - --------------------------------------------------------------------------------------------------------------------------------- Identifiable assets: United States $2,178,754 $2,122,334 $1,769,253 Foreign 562,053 503,324 167,438 Corporate 136,541 86,722 190,222 - --------------------------------------------------------------------------------------------------------------------------------- $2,877,348 $2,712,380 $2,126,913 - ---------------------------------------------------------------------------------------------------------------------------------
Foreign operations are conducted primarily in Europe. Foreign operations located elsewhere are not significant. Corporate assets consist primarily of cash and cash equivalents. VF CORPORATION -33- 13 FINANCIAL SUMMARY
In thousands, except per share amounts 1993 1992 1991 1990 - ---------------------------------------------------------------------------------------------------- Summary of Operations Net sales $4,320,404 $3,824,449 $2,952,433 $2,612,613 Cost of products sold 2,974,861 2,603,726 2,039,787 1,874,590 - ---------------------------------------------------------------------------------------------------- Gross profit 1,345,543 1,220,723 912,646 738,023 Marketing, administrative and general expenses 913,734 791,343 608,592 530,770 - ---------------------------------------------------------------------------------------------------- Operating income 431,809 429,380 304,054 207,253 Interest, net (37,387) (53,615) (55,155) (64,938) Miscellaneous, net 5,565 8 14,298 769 - ---------------------------------------------------------------------------------------------------- Income before income taxes 399,987 375,773 263,197 143,084 Income taxes 153,572 138,742 101,867 61,960 - ---------------------------------------------------------------------------------------------------- Net income $246,415 $237,031 $161,330 $81,124 - ---------------------------------------------------------------------------------------------------- Per share of Common Stock 1 Earnings-primary $3.80 $3.97 $2.75 $1.35 Dividends 1.22 1.11 1.02 1.00 Average number of common shares outstanding 64,011 58,608 57,152 57,122 Net income as % of average common shareholders' equity 16.9% 23.0% 18.8% 9.9% Net income as % of average total assets 8.5% 9.7% 8.0% 4.1% - ---------------------------------------------------------------------------------------------------- Financial Position Accounts receivable, net $511,887 $493,030 $333,073 $301,032 Inventories 778,767 742,474 537,027 436,657 Total current assets 1,500,180 1,365,573 1,071,109 824,249 Property, plant and equipment, net 712,759 711,087 577,019 537,178 Total assets 2,877,348 2,712,380 2,126,913 1,852,829 Total current liabilities 659,848 684,002 510,776 351,462 Long-term debt 527,573 767,641 583,209 585,142 Common shareholders' equity 1,547,400 1,153,971 938,078 823,126 - ---------------------------------------------------------------------------------------------------- Other Statistics Working capital $840,332 $681,571 $560,333 $472,787 Current ratio 2.3 2.0 2.1 2.3 Total debt to capital ratio 2 30.3% 44.8% 42.2% 44.9% Dividends $82,831 $69,552 $62,712 $61,133 Purchase of Common Stock 29,950 Income retained in the business 163,584 167,479 98,618 (9,959) Capital expenditures (excluding acquisitions) 209,494 207,202 110,762 110,143 Depreciation and amortization 125,765 108,281 90,991 97,850 - ---------------------------------------------------------------------------------------------------- Market Data Market price range 1 $56 1/2-39 1/2 $57 1/2-38 1/2 $41 1/2-17 5/8 $34 1/4-11 5/8 Book value per common share 1 23.99 19.39 16.26 14.44 Price earnings ratio-high-low 14.9-10.4 14.5-9.7 15.1-6.4 25.4-8.6 Rate of payout 3 32.1% 28.0% 37.1% 74.1% - ----------------------------------------------------------------------------------------------------
1 Per share computations and market price ranges have been adjusted to reflect two-for-one stock splits in April 1986 and December 1983. 2 Capital is defined as common shareholders' equity plus short- and long-term debt. 3 Dividends per share divided by earnings per share. VF CORPORATION -34- 14
1989 1988 1987 1986 1985 1984 1983 - ------------------------------------------------------------------------------------------------------------------------ $2,532,711 $2,516,107 $2,573,762 $1,544,574 $1,481,182 $1,167,356 $1,100,956 1,753,476 1,751,577 1,758,773 1,002,856 951,368 742,959 707,931 - ------------------------------------------------------------------------------------------------------------------------ 779,235 764,530 814,989 541,718 529,814 424,397 393,025 466,371 459,929 456,383 278,175 239,825 191,589 177,535 - ------------------------------------------------------------------------------------------------------------------------ 312,864 304,601 358,606 263,543 289,989 232,808 215,490 (38,908) (38,232) (50,631) (18,319) (19,338) 1,875 4,607 9,789 8,561 5,770 4,219 1,466 5,948 5,704 - ------------------------------------------------------------------------------------------------------------------------ 283,745 274,930 313,745 249,443 272,117 240,631 225,801 107,734 101,270 134,051 112,985 132,700 115,885 106,400 - ------------------------------------------------------------------------------------------------------------------------ $176,011 $173,660 $179,694 $136,458 $139,417 $124,746 $119,401 - ------------------------------------------------------------------------------------------------------------------------ $2.72 $2.55 $2.65 $2.16 $2.25 $1.96 $1.82 .91 .85 .75 .66 .58 .52 .43 64,803 68,165 67,793 63,068 61,963 63,706 65,584 17.4% 16.8% 19.8% 21.5% 28.4% 29.8% 33.9% 9.3% 9.1% 9.4% 12.3% 16.2% 19.7% 23.1% - ------------------------------------------------------------------------------------------------------------------------ $319,981 $266,399 $285,370 $267,368 $148,423 $135,750 $102,912 507,451 422,801 493,024 465,988 208,745 175,812 154,183 873,532 786,466 912,038 877,064 436,804 378,017 401,121 513,927 482,248 507,106 488,898 315,538 304,067 157,784 1,889,764 1,759,862 1,925,656 1,897,782 860,193 807,675 567,161 325,057 231,024 463,993 452,876 145,052 188,774 102,953 637,549 302,348 322,888 437,558 124,280 153,294 44,351 819,777 1,095,383 980,591 831,249 554,223 441,370 399,911 - ------------------------------------------------------------------------------------------------------------------------ $548,475 $555,442 $448,045 $424,188 $291,752 $189,243 $298,168 2.7 3.4 2.0 1.9 3.0 2.0 3.9 47.3% 22.9% 35.7% 45.4% 23.1% 34.1% 13.0% $57,313 $57,958 $50,862 $42,124 $36,026 $32,607 $27,881 395,213 47,940 (276,515) 115,702 128,832 94,334 103,391 44,199 91,520 125,294 64,137 90,817 60,775 53,142 30,714 59,643 91,029 88,934 89,689 54,966 50,075 26,842 20,091 - ------------------------------------------------------------------------------------------------------------------------ $38 3/8-27 3/4 $33 7/8-24 3/4 $48 1/4-22 $36-24 $27-13 $16 1/4-10 7/8 $20 5/8-9 1/8 14.14 16.05 14.43 12.30 8.91 7.14 6.09 14.1-10.2 13.3-9.7 18.2-8.3 16.7-11.1 12.0-5.8 8.3-5.5 11.4-5.0 33.5% 33.3% 28.3% 30.6% 25.8% 26.3% 23.4% - ------------------------------------------------------------------------------------------------------------------------
VF CORPORATION -35- 15 INVESTOR INFORMATION Common Stock Listed on the New York Stock Exchange and Pacific Stock Exchange-Trading symbol VFC Shareholders of Record As of February 1, 1994, there were 8,229 shareholders of record. Dividend Policy Quarterly dividends on VF Corporation Common Stock, when declared, are usually paid on or about the 20th day of March, June, September and December. Dividend Reinvestment Plan The Plan is offered to shareholders by First Chicago Trust Company of New York. The Plan provides for automatic dividend reinvestment and voluntary cash contributions for the purchase of additional shares of VF Corporation Common Stock. Questions concerning general Plan information should be directed to the Office of the Vice President/Secretary of VF Corporation. Dividend Direct Deposit Shareholders may have their dividends deposited into their savings or checking account at any bank that is a member of the Automated Clearing House (ACH) system. A brochure describing this service may be obtained by contacting First Chicago or VF Corporation. Quarterly Common Stock Price Information The high and low sales prices for the periods indicated were as follows:
1993 1992 1991 - ---------------------------------------------------------------------------------- High Low High Low High Low - ---------------------------------------------------------------------------------- First quarter $56 1/2 $44 3/4 $46 7/8 $38 1/2 $27 $17 5/8 Second quarter 51 3/4 45 3/4 47 7/8 40 1/2 31 7/8 25 Third quarter 47 1/4 40 3/8 50 1/4 43 35 3/8 28 Fourth quarter 46 1/4 39 1/2 57 1/2 45 1/8 41 1/2 33 1/2 - ----------------------------------------------------------------------------------
-36- EX-21 4 SUBSIDIARIES OF THE CORPORATION 1 EXHIBIT 21 VF CORPORATION SUBSIDIARIES OF THE CORPORATION Following is a listing of the significant subsidiaries of the Corporation, all of which are wholly owned:
Jurisdiction of Name Organization - ---------------------------- -------------- Bassett-Walker, Inc. Virginia Blue Bell, Inc. Delaware D. J. Industries, Inc. Delaware Healthtex, Inc. Delaware JanSport, Inc. Delaware Jantzen Inc. Nevada The Lee Apparel Company, Inc. Pennsylvania Lee Apparel (U.K.) Ltd. N. Ireland The H. D. Lee GmbH Germany The H. D. Lee Company, Inc. Delaware Lee Europe N.V. Belgium Les Dessous Feminis Sandefo, S.A. France Lou Diffusion, S.A. France Red Kap Industries, Inc. Delaware VF Factory Outlet, Inc. Delaware VF International Division, Inc. Delaware VF France, S.A. France Vanity Fair, Inc. Delaware Vanity Fair Mills, Inc. Alabama Vives Vidal, S.A. Spain Wrangler Limited United Kingdom Wrangler Germany GmbH Germany
Excludes subsidiaries which, if considered as a single subsidiary, would not constitute a significant subsidiary at January 1, 1994. EX-23.1 5 CONSENTS OF EXPERTS AND COUNSEL 1 EXHIBIT 23.1 Consent of Independent Auditors We consent to the incorporation by reference in this Annual Report (Form 10-K) of VF Corporation of our report dated February 4, 1994, included in the 1993 Annual Report to Shareholders of VF Corporation. Our audits also included the financial statement schedules of VF Corporation listed in item 14(a). These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in (1) Registration No. 33-55014, which acts as Post-Effective Amendment No. 2 to Registration Statement No. 33-26566 on Forms S-8/S-3 and Post-Effective Amendment No. 6 to Registration Statement No. 2-85579 on Forms S-8/S-3, (2) Registration Statement No. 33-33621 on Form S-8, which acts as Post-Effective Amendment No. 2 to Registration Statement No. 2-99945 on Form S-8, (3) Registration Statement No. 33-47329, which acts as Post-Effective Amendment No. 2 to Registration Statement No. 33-30889 on Form S-3, (4) Registration Statement No. 33-10491 on Form S-3 and (5) Registration Statement No. 33-41241 on Form S-8 of our report dated February 4, 1994, with respect to the consolidated financial statements incorporated herein by reference and our report included in the preceding paragraph with respect to the financial statement schedules included in the 1993 Annual Report (Form 10-K) of VF Corporation. ERNST & YOUNG Reading, Pennsylvania March 22, 1994 EX-23.2 6 CONSENTS OF EXPERTS AND COUNSEL 1 EXHIBIT 23.2 Consent of Independent Auditors We consent to the incorporation by reference in (1) Registration Statement No. 33-55014, which acts as Post-Effective Amendment No. 2 to Registration Statement No. 33-26566 on Forms S-8/S-3 and Post-Effective Amendment No. 6 to Registration Statement No. 2-85579 on Forms S-8/S-3, and (2) Registration Statement No. 33-33621 on Form S-8, which acts as Post-Effective Amendment No. 2 to Registration Statement No. 2-99945 on Form S-8 of our report dated March 18, 1994, with respect to the financial statements included in the Annual Report on Form 11-K of the VF Corporation Tax-Advantaged Savings Plan for the Salaried Employees for the year ended December 31, 1993. ERNST & YOUNG Reading, Pennsylvania March 22, 1994 EX-24 7 POWER OF ATTORNEY 1 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that V.F. Corporation and the undersigned directors and officers of V.F. Corporation do hereby constitute and appoint G. G. Johnson, L. M. Tarnoski and R. K. Shearer, and each of them, true and lawful attorneys-in-fact of the undersigned to execute on their behalf the Annual Report of V.F. Corporation on Form 10-K (including any amendments thereof) of the Securities and Exchange Commission for the fiscal year of V.F. Corporation ended January 1, 1994. IN WITNESS WHEREOF, each of the undersigned has duly executed this Power of Attorney this 8th day of February, 1994. ATTEST: V.F. CORPORATION /s/ L. M. Tarnoski By:/s/ L. R. Pugh - ------------------------------ ------------------------------ L. M. Tarnoski L. R. Pugh Secretary Chairman of the Board and Chief Executive Officer Principal Executive Officer: Principal Financial Officer: /s/ L. R. Pugh /s/ G. G. Johnson - ------------------------------ --------------------------------- L. R. Pugh, Chairman of the G. G. Johnson of the Board, Chief Executive Vice President-Finance and Officer and Director Chief Financial Officer Principal Accounting Officer: /s/ R. K. Shearer /s/ Robert D. Buzzell - ------------------------------ --------------------------------- R. K. Shearer, Controller Robert D. Buzzell, Director /s/ Edward E. Crutchfield, Jr. /s/ Ursula F. Fairbairn - ------------------------------ --------------------------------- Edward E. Crutchfield, Jr., Ursula F. Fairbairn, Director Director /s/ Barbara S. Feigin /s/ Roger S. Hillas - ------------------------------ --------------------------------- Barbara S. Feigin, Director Roger S. Hillas, Director /s/ Leon C. Holt, Jr. /s/ J. Berkley Ingram, Jr. - ------------------------------ --------------------------------- Leon C. Holt, Jr., Director J. Berkley Ingram, Jr., Director /s/ R. F. Longbine /s/ Mackey J. McDonald - ------------------------------ --------------------------------- R. F. Longbine, Director Mackey J. McDonald, Director /s/ William E. Pike /s/ M. Rust Sharp - ------------------------------ --------------------------------- William E. Pike, Director M. Rust Sharp, Director /s/ L. D. Walker -------------------------- L. D. Walker, Director EX-99 8 FORM 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM 11-K Annual Report [X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the year ended DECEMBER 31, 1993 or [ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the transition period from --------------------- to --------------------- Commission file number 1-5256 V.F. CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES - ----------------------------------------------------------------------------- (Full title of plan) 1047 NORTH PARK ROAD, WYOMISSING, PA 19610 - ----------------------------------------------------------------------------- (Address of principal offices) Registrant's telephone number, including area code (610) 378-1151 2 Item 1. Changes in the Plan During 1991, two new investment programs were added (the Equity Growth Fund and the Equity Growth & Income Fund), and one fund was eliminated (Equity Income Fund). The goal of the new Equity Growth Fund is capital appreciation. This Fund is primarily invested in common stock and securities convertible into common stock, although a portion of the Fund's assets may be invested in debt securities. The Equity Growth and Income Fund replaced the Equity Income Fund and places greater emphases on capital appreciation. The goal of the Growth and Income Fund is to seek long-term capital growth, current income and growth of income consistent with reasonable investment risk. Item 2. Changes in Investment Policy There have been no changes during the year in the policy with respect to the kind of securities or other investments in which funds held under the Plan may be invested. Item 3. Contributions Under the Plan Contributions made by VF Corporation ("Corporation") are measured by reference to the employee's contributions and are not discretionary. Item 4. Participating Employees There were approximately 6,377 enrolled participants in the Plan as of December 31, 1993, out of approximately 7,173 eligible employees. Item 5. Administration of the Plan (a) The Plan provides that a Committee of three persons be appointed to administer the Plan. The Committee, the VF Corporation Pension Plan Committee, is comprised of the following officers of the Corporation: Lori M. Tarnoski, Vice President and Secretary; Harold D. McKemy, Vice President - Treasury and Financial Services; and Harold E. Addis, Vice President - Human Resources and Administration. All committee persons are located at the Corporation's headquarters: 1047 North Park Road, Wyomissing, PA 19610. Each of these individuals is an employee of the Corporation and participates in the Plan. The Committee has the power to adopt rules and regulations for carrying out and administering the Plan and has the full authority and power to construe, interpret and administer the Plan. Committee members receive no compensation from the Plan. (b) All expenses of administration of the Plan, including Trustee fees, are paid by the Corporation. Item 6. Custodian of Investments (a) The Corporation has entered into a Trust Agreement under which United Missouri Bank of Kansas City, N.A., 10th and Grand, P.O. Box 226, Kansas City, MO 64141, has been appointed as Trustee under the Plan. Under the terms of the Trust Agreement, United Missouri Bank of Kansas City, N.A. holds and invests all assets of the Plan, subject to the direction of each of the participants of the Plan regarding the fund or funds to receive contributions. (b) The custodian's compensation is paid by the Corporation. (c) No bond was furnished or is required to be furnished by the Trustee. - 1 - 3 Item 7. Reports to Participating Employees Each participant receives a quarterly statement showing the amounts contributed by him/her to each of the funds during the calendar quarter and the market values as of the end of each quarter. The statement also shows the Corporation's matching contributions allocated to the participant through the Employee Stock Ownership Plan, which are invested in ESOP Preferred Stock, and the fair values based on the preferred stock's stated redemption price of $30.875 per share or 80% of the market value of the Corporation's Common Stock, whichever is greater. Item 8. Investment of Funds Each participant by written election directs the Trustee to invest his/her own contributions in one or more of the following funds: - Money Market Fund - Fixed Income Fund - Equity Growth & Income Fund - Equity Growth Fund - VF Corporation Stock Fund (investing in common stock of the Corporation) Brokerage commissions of $6,436, $6,166 and $6,852 for the years ended December 31, 1993, 1992 and 1991 were paid by the Trustee to acquire the Corporation's common stock for the Plan. The Corporation's matching contributions go solely to the ESOP. These contributions are allocated to participants who receive full value in the form of ESOP Preferred Stock and are used by the ESOP to pay debt service on a loan from the Corporation. Item 9. Financial Statements and Exhibits
(a)Financial Statements Page No. Report of Independent Auditors 4 Statements of Net Assets Available for Benefits - For the Years Ended December 31, 1993 and 1992 - Combined Plan 5 - Money Market Fund and Fixed Income Fund 6 - Equity Growth & Income Fund and Equity Growth Fund 7 - VF Corporation Stock Fund and 8 Employee Stock Ownership Plan Statements of Changes in Net Assets Available for Benefits - For the Years Ended December 31, 1993, 1992 and 1991 - Combined Plan 9 - Money Market Fund 10 - Fixed Income Fund 11 - Equity Growth & Income Fund 12 - Equity Growth Fund 13 - VF Corporation Stock Fund 14 - Employee Stock Ownership Plan 15 - Equity Income Fund 16 Notes to Financial Statements 17
Schedules: Schedules I, II and III have been omitted because the required information is included in the financial statements and the related notes. (b)Exhibits - none - 2 - 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the VF Corporation Pension Plan Committee has duly caused this annual report to be signed by the undersigned thereunto duly authorized. VF Corporation Tax-Advantaged Savings Plan for Salaried Employees ----------------------------------------- By: /s/ Harold E. Addis ------------------------------------- Harold E. Addis, Secretary of the VF Corporation Pension Plan Committee Date: March 24, 1994 ------------------------ - 3 - 5 Report of Independent Auditors VF Corporation Pension Plan Committee VF Corporation Tax-Advantaged Savings Plan for Salaried Employees We have audited the accompanying statements of net assets available for benefits of the VF Corporation Tax-Advantaged Savings Plan for Salaried Employees as of December 31, 1993 and 1992, and the related statements of changes in net assets available for benefits for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the VF Corporation Tax-Advantaged Savings Plan for Salaried Employees at December 31, 1993 and 1992, and the changes in its net assets available for benefits for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. ERNST & YOUNG Reading, Pennsylvania March 18, 1994 - 4 - 6 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS COMBINED PLAN -------------
December 31 --------------------------------------------- ASSETS 1993 1992 - ------ ---- ---- Investments at fair value VF Corporation Common Stock - 395,009 shares in 1993 398,239 shares in 1992 $ 18,219,790 $ 21,206,226 VF Corporation ESOP Preferred Stock - 2,050,491 shares in 1993 2,072,413 shares in 1992 75,663,118 88,284,786 United States government obligations 13,673,576 11,024,047 Other Securities 40,149,325 31,689,608 ----------- ----------- Total investments 147,705,809 152,204,667 Dividends and interest receivable 246,092 202,910 Loans receivable from participants 5,718,544 3,444,683 ----------- ----------- TOTAL ASSETS 153,670,445 155,852,260 ----------- ----------- LIABILITIES - ----------- Withdrawals and terminations payable to participants 861,855 836,485 Employee Stock Ownership Plan obligation 56,121,089 59,255,410 Forfeitures related to withdrawals and terminations payable 16,943 18,281 ------------ ------------ TOTAL LIABILITIES 56,999,887 60,110,176 ------------ ------------ Net assets available for benefits $ 96,670,558 $ 95,742,084 ============ ============
See notes to financial statements. - 5 - 7 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS MONEY MARKET FUND AND FIXED INCOME FUND ---------------------------------------
Money Market Fund Fixed Income and December 31 December 31 ------------------------- --------------------------- ASSETS 1993 1992 1993 1992 - ------ ---- ---- ---- ---- Investments, at fair value United States government obligations $ 0 $ 0 $13,673,576 $11,024,047 Other securities 5,406,831 6,020,628 1,460,947 2,726,393 ----------- ----------- ----------- ----------- Total investments 5,406,831 6,020,628 15,134,523 13,750,440 Dividends and interest receivable 15,686 16 228,310 200,921 Loans receivable from participants 1,040,317 733,395 1,133,339 723,886 ----------- ----------- ----------- ----------- TOTAL ASSETS 6,462,834 6,754,039 16,496,172 14,675,247 ----------- ----------- ----------- ----------- LIABILITIES - ----------- Withdrawals and terminations payable to participants 100,468 35,360 136,218 280,041 Forfeitures related to withdrawals and terminations payable 163 190 202 46 ------------ ----------- ----------- ----------- TOTAL LIABILITIES 100,631 35,550 136,420 280,087 ----------- ----------- ----------- ----------- Net assets available for benefits $ 6,362,203 $ 6,718,489 $16,359,752 $14,395,160 =========== =========== =========== ===========
See notes to financial statements. - 6 - 8 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS EQUITY GROWTH & INCOME FUND AND EQUITY GROWTH FUND --------------------------------------------------
Equity Growth & Income Fund Equity Growth Fund December 31 December 31 --------------------------------- --------------------------------- ASSETS 1993 1992 1993 1992 - ------ ---- ---- ---- ---- Investments, at fair value Other securities $ 22,366,528 $ 16,962,346 $ 10,684,033 $ 5,756,310 ------------- ------------ ------------- ------------ Total investments 22,366,528 16,962,346 10,684,033 5,756,310 Dividends and interest receivable 82 45 67 45 Loans receivable from participants 1,550,713 897,209 379,273 180,006 ------------- ------------ ------------- ------------ TOTAL ASSETS 23,917,323 17,859,600 11,063,373 5,936,361 ------------- ------------ ------------- ------------ LIABILITIES - ----------- Withdrawals and terminations payable to participants 225,221 176,167 97,948 50,996 Forfeitures related to withdrawals and terminations 821 294 65 8 ------------- ------------ ------------- ------------ TOTAL LIABILITIES 226,042 176,461 98,013 51,004 ------------- ------------ ------------- ------------ Net assets available for benefits $ 23,691,281 $ 17,683,139 $ 10,965,360 $ 5,885,357 ============= ============ ============= ============
See notes to financial statements. - 7 - 9 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS VF CORPORATION COMMON STOCK FUND AND EMPLOYEE STOCK OWNERSHIP PLAN ------------------------------------------------------------------
VF Corporation Common Stock Fund Employee Stock Ownership Plan December 31 December 31 ----------------------------- ----------------------------- ASSETS 1993 1992 1993 1992 - ------ ---- ---- ---- ---- Investments, at fair value VF Corporation Common Stock 395,009 shares in 1993 398,239 shares in 1992 $18,219,790 $21,206,226 $ 0 $ 0 VF Corporation ESOP Preferred Stock 2,050,491 shares in 1993 2,072,413 shares in 1992 0 0 75,663,118 88,284,786 Other securities 189,091 162,291 41,895 61,640 ----------- ----------- ----------- ----------- Total investments 18,408,881 21,368,517 75,705,013 88,346,426 Dividends and interest receivable 300 330 1,647 1,553 Loans receivable from participants 1,614,902 910,187 0 0 ----------- ----------- ----------- ----------- TOTAL ASSETS 20,024,083 22,279,034 75,706,660 88,347,979 ----------- ----------- ----------- ----------- LIABILITIES - ----------- Withdrawals and terminations payable to participants 140,009 166,448 161,991 127,473 Employee Stock Ownership Plan obligation 0 0 56,121,089 59,255,410 Forfeitures related to withdrawals and terminations payable 600 130 15,092 17,613 ----------- ----------- ----------- ----------- TOTAL LIABILITIES 140,609 166,578 56,298,172 59,400,496 ----------- ----------- ----------- ----------- Net assets available for benefits $19,883,474 $22,112,456 $19,408,488 $28,947,483 =========== =========== =========== ===========
See notes to financial statements. - 8 - 10 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS COMBINED PLAN -------------
Years Ended December 31 -------------------------------------------------------------- 1993 1992 1991 ---- ---- ---- Investment Income Dividends on VF Corporation Common Stock $ 492,821 $ 432,281 $ 355,576 Dividends on ESOP Preferred Stock 4,290,967 4,335,278 4,366,486 Interest 1,052,117 975,168 947,148 Income from mutual funds and bank common trust funds 2,285,814 3,257,792 1,185,342 ------------ ----------- ------------ 8,121,719 9,000,519 6,854,552 ------------ ----------- ------------ Contributions Interest on loan repayments 288,773 204,448 138,806 Participants 10,822,389 9,485,940 9,676,455 VF Corporation 4,542,628 3,960,222 4,118,120 ------------ ----------- ------------ 15,653,790 13,650,610 13,933,381 ------------ ----------- ------------ Withdrawals (4,975,559) (4,862,648) (3,150,766) Forfeitures that reduce VF Corporation contributions (146,621) (71,919) (191,277) Interest on Employee Stock Ownership Plan obligation (5,698,769) (5,954,445) (6,173,138) Net realized gain (loss) on investments 794,846 421,571 (386,635) Net unrealized (depreciation) appreciation in fair value of investments (12,820,932) 26,406,953 12,023,944 ------------ ----------- ------------ Net increase 928,474 38,590,641 22,910,061 Net assets available for benefits at beginning of year 95,742,084 57,151,443 34,241,382 ------------ ----------- ------------ Net assets available for benefits at end of year $ 96,670,558 $95,742,084 $ 57,151,443 ============ =========== ============
See notes to financial statements. - 9 - 11 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS MONEY MARKET FUND -----------------
Years Ended December 31 ----------------------------------------------------------------- 1993 1992 1991 ---- ---- ---- Investment Income Income from mutual funds and bank common trust funds $ 185,319 $ 196,134 $ 411,461 ------------ ------------ ----------- 185,319 196,134 411,461 ------------ ------------ ----------- Contributions Interest on loan repayments 29,013 26,475 28,836 Participants 965,642 1,160,453 1,717,180 ------------ ------------ ----------- 994,655 1,186,928 1,746,016 ------------ ------------ ----------- Withdrawals (427,805) (582,038) (570,553) Forfeitures that reduce VF Corporation contributions (2,177) (1,268) (10,558) Fund transfers (1,106,278) (1,063,530) (987,938) ------------ ------------ ------------ Net (decrease) increase (356,286) (263,774) 588,428 Net assets available for benefits at beginning of year 6,718,489 6,982,263 6,393,835 ------------ ------------ ------------ Net assets available for benefits at end of year $ 6,362,203 $ 6,718,489 $ 6,982,263 ============ ============ ============
See notes to financial statements. - 10 - 12 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FIXED INCOME FUND -----------------
Years Ended December 31 ------------------------------------------------------------------------- 1993 1992 1991 ---- ---- ---- Investment Income Interest $ 1,052,117 $ 975,168 $ 947,148 Income from mutual funds and bank common trust funds 10,278 18,207 29,838 ------------ ------------ ------------ 1,062,395 993,375 976,986 ------------ ------------ ------------ Contributions Interest on loan repayments 51,108 40,561 38,703 Participants 2,339,497 2,240,187 2,587,408 ------------ ------------ ------------ 2,390,605 2,280,748 2,626,111 ------------ ------------ ------------ Withdrawals (1,157,076) (1,286,865) (987,185) Forfeitures that reduce VF Corporation contributions (1,946) (3,233) (18,558) Net realized loss on investments (12,656) (15,069) (11,682) Net unrealized (depreciation) appreciation in fair value of investments (12,832) (30,255) 47,068 Fund transfers, net (303,898) 209,157 (612,377) ------------ ------------ ------------ Net increase 1,964,592 2,147,858 2,020,363 Net assets available for benefits at beginning of year 14,395,160 12,247,302 10,226,939 ------------ ------------ ------------ Net assets available for benefits at end of year $ 16,359,752 $ 14,395,160 $ 12,247,302 ============ ============ ============
See notes to financial statements. - 11 - 13 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS EQUITY GROWTH & INCOME FUND ---------------------------
Years Ended December 31 ------------------------------------------------------------------------ 1993 1992 1991 ---- ---- ---- Investment Income Income from mutual funds and bank common trust funds $ 1,197,977 $ 2,219,621 $ 41,426 ----------- ------------ ------------ 1,197,977 2,219,621 41,426 ----------- ------------ ------------ Contributions Interest on loan repayments 84,286 55,468 9,571 Participants 3,056,697 2,486,856 625,886 ----------- ------------ ------------ 3,140,983 2,542,324 635,457 ----------- ------------ ------------ Withdrawals (1,170,331) (1,171,833) (190,301) Forfeitures that reduce VF Corporation contributions (3,966) (2,564) (6,822) Net realized gain on investments 117,328 29,069 26,558 Net unrealized appreciation (depreciation) in fair value of investments 2,097,687 (565,714) 603,421 Fund transfers, net 628,464 442,288 13,080,209 ----------- ------------ ------------ Net increase 6,008,142 3,493,191 14,189,948 Net assets available for benefits at beginning of year 17,683,139 14,189,948 0 Net assets available for benefits at ----------- ------------ ------------ end of year $ 23,691,281 $ 17,683,139 $ 14,189,948 =========== ============ ============
See notes to financial statements. - 12 - 14 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS EQUITY GROWTH FUND ------------------
Years Ended December 31 ------------------------------------------------------------------------------ 1993 1992 1991 ---- ---- ---- Investment Income Income from mutual funds and bank common trust funds $ 877,085 $ 807,786 $ 215,844 ------------- ------------- ------------ 877,085 807,786 215,844 ------------- ------------- ------------ Contributions Interest on loan repayments 35,211 21,514 4,139 Participants 1,450,084 1,067,754 239,853 ------------- ------------- ------------ 1,485,295 1,089,268 243,992 ------------- ------------- ------------ Withdrawals (409,898) (93,788) (221,738) Forfeitures that reduce VF Corporation contributions (1,512) (641) (1,170) Net realized gain (loss) on investments 5,543 (27,894) 0 Net unrealized appreciation (depreciation) in fair value of investments 651,820 (417,780) 12,190 Fund transfers, net 2,471,670 501,959 3,777,329 ------------- ------------- ------------ Net increase 5,080,003 1,858,910 4,026,447 Net assets available for benefits at beginning of year 5,885,357 4,026,447 0 Net assets available for benefits at ------------- ------------- ------------ end of year $ 10,965,360 $ 5,885,357 $ 4,026,447 ============= ============= ============
See notes to financial statements. - 13 - 15 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS VF CORPORATION COMMON STOCK FUND --------------------------------
Years Ended December 31 ----------------------------------------------------------------------- 1993 1992 1991 ---- ---- ---- Investment Income Dividends on VF Corporation Common Stock $ 492,821 $ 432,281 $ 355,576 Income from mutual funds and bank common trust funds 2,559 2,725 8,522 -------------- -------------- ------------- 495,380 435,006 364,098 -------------- -------------- ------------- Contributions Interest on loan repayments 89,155 60,430 33,614 Participants 3,010,469 2,530,690 2,385,273 -------------- -------------- ------------- 3,099,624 2,591,120 2,418,887 -------------- -------------- ------------- Withdrawals (1,023,379) (1,152,194) (587,153) Forfeitures that reduce VF Corporation contributions (4,057) (3,145) (12,549) Net realized gain on investments 506,187 435,465 32,930 Net unrealized (depreciation) appreciation in fair value of investments (3,612,779) 4,831,401 7,208,353 Fund transfers, net (1,689,958) (89,874) (157,064) -------------- -------------- ------------- Net (decrease) increase (2,228,982) 7,047,779 9,267,502 Net assets available for benefits at beginning of year 22,112,456 15,064,677 5,797,175 -------------- -------------- ------------- Net assets available for benefits at end of year $ 19,883,474 $ 22,112,456 $ 15,064,677 ============== ============== =============
See notes to financial statements. - 14 - 16 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS EMPLOYEE STOCK OWNERSHIP PLAN -----------------------------
Years Ended December 31 ----------------------------------------------------------------------- 1993 1992 1991 ---- ---- ---- Investment Income Dividends on ESOP Preferred Stock $ 4,290,967 $ 4,335,278 $ 4,366,486 Income from mutual funds and bank common trust funds 12,596 13,319 24,019 -------------- ------------- ------------ 4,303,563 4,348,597 4,390,505 -------------- ------------- ------------ Contributions VF Corporation 4,542,628 3,960,222 4,118,120 -------------- ------------- ------------ 4,542,628 3,960,222 4,118,120 -------------- ------------- ------------ Withdrawals (787,070) (575,930) (235,319) Forfeitures that reduce VF Corporation contributions (132,963) (61,068) (133,192) Interest on Employee Stock Ownership Plan obligation (5,698,769) (5,954,445) (6,173,138) Net realized gain on investments 178,444 0 0 Net unrealized (depreciation) appreciation in fair value of investments (11,944,828) 22,589,301 1,724,743 -------------- ------------- ------------ Net (decrease) increase (9,538,995) 24,306,677 3,691,719 Net assets available for benefits at beginning of year 28,947,483 4,640,806 949,087 -------------- ------------- ------------ Net assets available for benefits at end of year $ 19,408,488 $ 28,947,483 $ 4,640,806 ============== ============= ============
See notes to financial statements. - 15 - 17 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS EQUITY INCOME FUND ------------------
Year Ended December 31 ----------- 1991 ---- Investment Income Income from mutual funds and bank common trust funds $ 454,232 ----------- 454,232 ----------- Contributions Interest on loan repayments 23,943 Participants 2,120,855 ----------- 2,144,798 ----------- Withdrawals (358,517) Forfeitures that reduce VF Corporation contributions (8,428) Net realized loss on investments (434,441) Net unrealized appreciation in fair value of investments 2,428,169 Fund transfers, net (15,100,159) ----------- Net decrease (10,874,346) Net assets available for benefits at beginning of year 10,874,346 ----------- Net assets available for benefits at end of year $ 0 ===========
See notes to financial statements. - 16 - 18 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS NOTE A -- DESCRIPTION OF THE PLAN Effective January 1, 1985, VF Corporation (the Corporation) adopted the VF Corporation Tax-Advantaged Savings Plan for Salaried Employees (the Plan), which is a cash or deferred plan under Section 401(k) of the Internal Revenue Code. Under the Plan, certain salaried employees of specified subsidiaries, having at least one year of credited service, may elect to contribute between 2% and 8% of their compensation to the Plan. The Corporation matches employee contributions by 50% for up to 6% of compensation contributed by the employee. Employees remain fully vested in their contributions to the Plan. The Corporation's matching contributions are vested monthly on a pro rata basis with full vesting after five years of service or upon normal or late retirement, disability or death. Effective January 1990, the Corporation added an Employee Stock Ownership Plan (ESOP) per an amendment to the Plan. The ESOP purchased 2,105,263 shares of VF Corporation 6.75% Series B ESOP Convertible Preferred Stock (ESOP Preferred Stock) for $65.0 million. Each share of ESOP Preferred Stock, which has a redemption value of $30.88 plus cumulative accrued dividends, is convertible into an eight-tenths share of VF Corporation Common Stock and is entitled to one vote. The trustee for the ESOP may convert the ESOP Preferred Stock to Common Stock at any time or may cause the Corporation to redeem the ESOP Preferred Stock under certain circumstances. The ESOP Preferred Stock also has preference in liquidation over all other stock issues. The Corporation's matching contributions, all of which go to the ESOP, are allocated to employees in shares of ESOP Preferred Stock. Of the shares of ESOP Preferred Stock owned by the ESOP, 503,616 shares in 1993 and 375,834 shares in 1992 have been allocated to employees. The ESOP's purchase of the ESOP Preferred Stock was funded by a loan of $65.0 million from the Corporation that bears interest at 9.8%. The obligation will be repaid in increasing installments through 2004 from future Corporation matching contributions to the ESOP and dividends on the ESOP Preferred Stock. Effective January 1, 1992, the Plan was amended to exclude certain highly compensated employees, (Salary Grade 20 and above). Highly compensated employees have not been permitted to make contributions to the plan since December 31, 1991 but have continued to direct the investment of their Plan account balances. Employee contributions are invested at the direction of the employee in one or more of the funds administered by the Plan's trustee. The investment programs of the Plan are as follows: (a) Money Market Fund: Monies are invested in a money market fund. (b) Fixed Income Fund: Monies are invested in investment vehicles that provide a fixed rate of return. (c) Equity Growth & Income Fund: Monies are invested in investments with emphasis on capital appreciation. (d) Equity Growth Fund: Monies are primarily invested in common stock, securities convertible into common stock and debt securities. (e) VF Corporation Stock Fund: Monies are invested in Common Stock of the Corporation purchased on the open market at prevailing prices on the New York Stock Exchange on the date of purchase. Employees can direct no more than 50% of their contributions to the VF Corporation Stock Fund. - 17 - 19 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS (Continued) NOTE A -- DESCRIPTION OF THE PLAN (Continued) Individual accounts are maintained for each participant; each account included the individual's contributions, Corporation matching contributions and investment funds' earnings. Accounts may become payable upon retirement, disability, death or termination of employment. Participants may also withdraw all or a portion of their accounts by filing a written request that demonstrates financial hardship. Participants may elect to receive distributions in a lump sum or in an annuity, or accounts may be rolled over into another IRS-approved tax deferral vehicle. Forfeitures of terminated participants' nonvested accounts are used to reduce Corporation contributions. Participants may borrow from their individual account. They are charged interest at the Morgan Guaranty "Published" prime rate at the time of the loan and repay the principal within 60 months, or 120 months if the loan is for the purchase of their primary residence. Participants may borrow up to 100% of the Money Market Fund and 75% of remaining funds but may not borrow from the Corporation matching portion. Payment in full is required at termination of employment. There were 1,273 loans outstanding at December 31, 1993. Although it has no intent to do so, the Corporation may terminate the Plan in whole or in part at any time. In the event of termination, participants become fully vested in their accounts. The number of participants in each fund was as follows:
Years Ended December 31 ----------------------- 1993 1992 1991 ---- ---- ---- Money Market Fund 2,549 2,657 2,821 Fixed Income Fund 3,818 3,734 3,524 Equity Growth & Income Fund 4,665 4,125 3,643 Equity Growth Fund 2,776 3,914 3,573 VF Corporation Stock Fund 4,327 1,666 1,199 Employee Stock Ownership Plan 6,214 5,552 5,101
The total number of participants in the Plan was less than the sum of participants shown above because many were participating in more than one fund. - 18 - 20 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS (Continued) NOTE B -- SIGNIFICANT ACCOUNTING POLICIES Investments are stated at fair value. Securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the plan year. The ESOP Preferred Stock is stated at fair value, based on the greater of 80% of the fair value of the Corporation's common stock or the preferred stock's stated redemption price. United States government obligations are valued at cost, which approximates market. For commercial notes, the Plan trustee has established a fair value based on yields currently available on comparable instruments. The fair value of the participation units owned by the Plan in mutual funds and bank common trust funds is based on quoted redemption values on the last business day of the plan year. Unallocated insurance contracts are valued at contract values as estimated by the insurer. Contract value represents contributions made under the contract, plus interest at the contract rate, less funds used to pay the insurance company's administrative expenses. The changes in the difference between fair value and cost of investments are reflected as unrealized appreciation or depreciation in fair value of investments in the statements of changes in net assets available for benefits. In determining the realized gain or loss on investments sold, the cost of investments has been determined on the average cost basis for marketable securities and on the identified cost basis for mutual funds and bank common trust funds, commercial notes and unallocated insurance contracts. Administrative expenses consisting primarily of fees paid for legal, accounting and other services are paid directly by the Corporation in accordance with the Plan Agreement and are based on customary and reasonable rates for such services. NOTE C -- INCOME TAXES The Internal Revenue Service has determined and informed the Company by a letter dated May 12, 1987 that the Plan is qualified and the trust established under the Plan is tax-exempt under the appropriate sections of the Code. The Plan Administrator does not anticipate that changes in the Plan after the date of the amendments covered by the Internal Revenue Service determination letter will affect the qualified and tax-exempt status of the Plan and the Trust, respectively. - 19 - 21 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE D -- INVESTMENTS The net unrealized (depreciation) appreciation in fair value of investments included in Plan equity is as follows:
Net Unrealized (Depreciation) Appreciation in Fair Value for the Years Ended December 31 -------------------------------------------------------------- 1993 1992 1991 -------------- ---------------- --------------- Fair value as determined by quoted market or stated redemption price: VF Corporation Common Stock $ (3,612,779) $ 4,831,401 $ 7,208,353 ESOP Preferred Stock (11,944,828) 22,589,301 1,724,743 Mutual funds and bank common trust funds 2,749,507 (983,494) 3,043,780 -------------- ---------------- --------------- (12,808,100) 26,437,208 11,976,876 Fair value as determined by Plan trustee: United States government obligations Commercial notes (12,832) (30,255) 47,068 Mutual funds and bank common trust funds Unallocated insurance contracts Cash (12,832) (30,255) 47,068 -------------- ---------------- --------------- $ (12,820,932) $ 26,406,953 $ 12,023,944 ============== ================ ===============
Fair Value at December 31 -------------------------------------------------------------- 1993 1992 1991 -------------- ---------------- --------------- Fair value as determined by quoted market or stated redemption price: VF Corporation Common Stock $ 18,219,790 $ 21,206,226 $ 14,481,194 ESOP Preferred Stock 75,663,118 88,284,786 66,271,931 Mutual Funds and bank common trust funds 38,268,505 28,631,723 22,993,410 -------------- --------------- -------------- 132,151,413 138,122,735 103,746,535 Fair value as determined by Plan trustee: United States government obligations 13,673,576 11,024,047 8,987,377 Commercial notes 1,041,341 2,044,427 2,160,738 Mutual funds and bank common trust funds 621,992 807,326 2,098,612 Unallocated insurance contracts 217,487 206,132 193,394 Cash 11,424 --------------- --------------- -------------- 15,554,396 14,081,932 13,451,545 --------------- --------------- -------------- $ 147,705,809 $ 152,204,667 $ 117,198,080 =============== =============== ==============
Unrealized appreciation in fair value of investments at December 31, 1993 and 1992 was $20,043,051 and $32,863,983 respectively. - 20 - 22 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE D -- INVESTMENTS (Continued) The net realized gain (loss) on the disposition of investments was as follows:
1993 1992 1991 ----------- ----------- ----------- Aggregate proceeds $47,003,365 $42,047,185 $57,139,515 Aggregate cost 46,208,519 41,625,614 57,526,150 ----------- ----------- ----------- Net realized gain (loss) $ 794,846 $ 421,571 $ (386,635) =========== =========== ===========
Of the net realized gain, $684,631, $435,465 and $32,930 related to gains recognized on the sale of VF Common Stock and the conversion of VF Preferred Stock for the years ended 1993, 1992 and 1991, respectively. - 21 - 23 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE D -- INVESTMENTS (Continued) The fair value of individual investments that represent 5% or more of the Plan's net assets at December 31, 1993 and 1992 are as follows:
1993 1992 ---------- ---------- ESOP Preferred Stock $75,663,118 $88,284,786 Fidelity Growth & Income Fund 22,264,551 16,899,837 VF Corporation Common Stock 18,219,790 21,206,226 Fidelity Magellan Fund 10,617,124 Kemper Money Market Fund 5,386,830
- 22 - 24 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1993 NOTE D -- INVESTMENTS (Continued)
NUMBER OF SHARES NAME OF ISSUER AND TITLE OF ISSUE OR PRINCIPAL AMOUNT FAIR VALUE COST - --------------------------------- ------------------- ---------- ---- Securities of participating employer: VF Corporation Common Stock 395,009 $18,219,790 $12,964,413 VF Corporation 6.75% Series B ESOP Convertible Preferred Stock 2,050,491 75,663,118 63,308,910 ----------- ------------ 93,882,908 76,273,323 ----------- ------------ United States Government Obligations: Small Business Administration Loans: 12,572,457 12,654,098 12,640,066 (Rates of 5.37% to 10.625%), Maturities of 3/24/94 to 8/14/08) N.O.A.A. loan (Rate of 7.975%, Matures 1/2/97) 165,247 165,040 165,040 F.M.H.A. loans (Rates of 6.60% to 9.875%, Maturities of 2/01/96 to 12/05/04) 848,434 854,438 854,438 ----------- ------------ 13,673,576 13,659,544 ----------- ------------ Other Securities Mutual funds and bank common trust funds Kemper Money Market Fund 5,386,830 5,386,830 5,386,830 Fidelity Growth & Income Fund 1,002,005 22,264,551 20,129,157 Fidelity Magellan Fund 149,854 10,617,124 10,370,894 United Missouri Bank Funds Short-Term Money Market-I 377,978 377,978 377,978 Money Market Account 244,014 244,014 244,014 Commonwealth Life Ins. Co. Contracts 216,514 217,487 216,514 Bethel Marine Inc. 208,000 206,143 206,143 (Rate of 8%, Maturity of 06/07/02) Patriot Shipping Corporation 324,000 335,826 299,700
- 23 - 25 VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE D -- INVESTMENTS Continued
NUMBER OF SHARES NAME OF ISSUER AND TITLE OF ISSUE OR PRINCIPAL AMOUNT FAIR VALUE COST - --------------------------------- ------------------- ---------- ---- Other Securities (continued): American Telephone & Telegraph (Maturity of 01/21/94) 250,000 $ 249,545 $ 249,365 US West Communications, Inc. (Maturity of 01/07/94) 250,000 249,827 249,296 ------------- ------------- 40,149,325 37,729,891 ------------- ------------- $ 147,705,809 $ 127,662,758 ============= =============
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