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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended JANUARY 3, 1998
Commission file number: 1-5256
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V. F. CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1180120
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1047 NORTH PARK ROAD
WYOMISSING, PENNSYLVANIA 19610
(Address of principal executive offices)
(610) 378-1151
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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Name of each exchange
Title of each class on which registered
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Common Stock, without par value, New York Stock Exchange
stated capital $1 per share and
Preferred Stock Purchase Rights Pacific Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES X NO ___
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. [X]
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As of March 3, 1998, 121,296,498 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 $4.7 billion. In addition, 1,824,820
shares of Series B ESOP Convertible Preferred Stock of the registrant were
outstanding and convertible into 2,919,712 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 3, 1998 (Item 1
in Part I and Items 5, 6, 7 and 8 in Part II).
Portions of the Proxy Statement dated March 17, 1998 for the Annual Meeting of
Shareholders to be held on April 21, 1998 (Item 4A in Part I and Items 10, 11,
12 and 13 in Part III).
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PART I
ITEM 1. BUSINESS
VF Corporation, through its operating subsidiaries, designs, manufactures and
markets branded jeanswear, intimate apparel, knitwear, children's playwear and
other apparel. VF Corporation, organized in 1899, oversees the operations of
its subsidiaries, providing them with financial and administrative resources.
Management of each marketing unit is responsible for the growth and development
of its business, within guidelines established by VF Corporation management.
Unless the context indicates otherwise, the term "Company" used herein means VF
Corporation and its subsidiaries.
BUSINESS ORGANIZATION
Through 1996, VF operated as a group of relatively autonomous businesses, with
the management of each business unit responsible for its own manufacturing,
marketing and administrative functions, within guidelines established by VF
Corporation management. Beginning in late 1996, the Company's organizational
structure was changed, resulting in the previously separate operating
businesses being consolidated into five consumer-focused marketing coalitions -
- - Jeanswear, Intimate Apparel, Knitwear, Playwear and International. The
individual marketing functions have remained as separate business units,
allowing marketing specialists to build and develop their brands. However,
many of the Company's sourcing, manufacturing and administrative functions,
previously performed in separate operating units, are carried out under this
new management structure on either a coalition or a Company-wide basis. This
reorganization, along with the transition to common computer systems and the
rollout of other shared services on a Company-wide basis, is continuing and is
expected to be completed in 2000. These changes, plus investments in new
business systems and processes, are expected to result in significant annual
cost savings.
Information regarding the operations, sales and profitability of the Company,
plus information regarding foreign and domestic operations and sales by product
categories, is included in pages 22, 23 24 and 31 of the Company's Annual
Report to Shareholders for the fiscal year ended January 3, 1998 ("1997 Annual
Report"), which information is incorporated herein by reference.
JEANSWEAR COALITION
The Jeanswear Coalition includes the Company's jeanswear and related casual
apparel products for the North and South American markets, plus occupational
apparel products.
Jeanswear products are manufactured and marketed under the LEE(R),
WRANGLER(R), RUSTLER(R) and RIDERS(R) brands in the United States and the LEE
and WRANGLER brands in Canada and Mexico. The Company also offers cotton
casual pants and shirts under the LEE CASUALS(R) and TIMBER CREEK BY
WRANGLER(R) brands. During 1997, the Company acquired the BRITTANIA(R) brand
and expects to introduce a line of BRITTANIA brand jeanswear products during
1998. Also during 1997, the Company acquired certain operating assets of its
former LEE licensees in Chile and Brazil. The Company expects to continue its
expansion into other countries in South America.
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In domestic markets, LEE branded products are sold through department and
specialty stores. WRANGLER westernwear is marketed through western specialty
stores, and other WRANGLER brand products are sold primarily through the mass
merchant and discount store channels. The RUSTLER and RIDERS brands are
marketed to national discount chains. Sales for all brands are generally made
directly to retailers through full-time salespersons.
According to industry data, approximately 593 million pairs of jeans made of
denim, twill, corduroy and other fabrics were sold in the United States in
1997, representing an increase of 4.8% over 1996. This same data indicates
that the Company currently has the largest combined unit market share at
approximately 27%, with the WRANGLER, LEE and RUSTLER brands having the second,
third and fourth largest unit shares of the jeans market in the United States,
respectively.
Occupational apparel is also included in the Jeanswear Coalition. The Company
is a leading producer of occupational and career apparel sold under the RED
KAP(R) label. Approximately three-fourths of 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. The Company expanded its presence in safety apparel in the United
States and Canada by acquiring the BULWARK(R) brand in 1996. Because
industrial laundries maintain minimal inventories of work clothes, a supplier's
ability to offer rapid delivery is an important factor in this market. The
Company's commitment to customer service, supported by an automated central
distribution center with ten satellite locations, has enabled customer orders
to be filled within 24 hours of receipt and has helped the RED KAP brand obtain
a significant share of the industrial laundry rental business. In addition,
the Company markets a line of work clothes nationally to retail stores under
the BIG BEN(R) brand.
INTIMATE APPAREL COALITION
The Intimate Apparel Coalition includes the Company's intimate apparel
businesses in the United States, along with the Company's swimwear, casual
sportswear and daypack businesses.
In women's intimate apparel, the Company manufactures and markets bras,
panties, daywear, shapewear, robes and sleepwear products under the VANITY
FAIR(R) label for sales to domestic department and specialty stores. Bras,
panties, daywear and shapewear are manufactured under the VASSARETTE(R) brand
for sales to the discount channel. The Company also has a significant private
label lingerie business in the United States. Most products are sold through
the Company's sales force. In January 1998, the Company expanded its domestic
intimate apparel presence with the acquisition of Bestform Group, Inc., a
company having several brands sold through the department and discount channels
of distribution.
The Company designs, manufactures and markets an extensive line of women's
swimwear and sportswear, including coordinated tops and bottoms, under the
JANTZEN(R) trademark and under the licensed NIKE(R) label. Products are sold
primarily to department and specialty stores in the United States and Canada
through the Company's sales force. The JANTZEN trademark is licensed to other
companies in several foreign countries.
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The Company manufactures and markets JANSPORT(R) brand daypacks sold through
department and sports specialty stores and college bookstores and WOLF CREEK(R)
brand daypacks through discount stores. JANSPORT daypacks and bookbags have
the leading brand share in the United States. JANSPORT branded fleece
casualwear and T-shirts imprinted with college logos are sold through college
bookstores. In addition, JANSPORT backpacking and mountaineering gear is sold
through outdoor and sporting goods stores.
KNITWEAR COALITION
The Knitwear Coalition includes the manufacturing and marketing of knitted
fleecewear and T-shirts. Approximately one-half of the knitwear sales are for
private label accounts, including NIKE, Inc. and various national chain,
department and discount stores. Blank fleece and T-shirt products are marketed
under the LEE brand to wholesalers and garment screen printing operators.
The Company also designs, manufactures and markets imprinted sports apparel
under licenses granted by the four major American professional sports leagues,
NASCAR and other parties. LEE SPORT(R) and NUTMEG(R) branded adult licensed
apparel is distributed through department, sporting goods and athletic
specialty stores. CSA(R) branded products, primarily in children's sizes, are
distributed through mass merchandisers and discount stores.
PLAYWEAR COALITION
The Playwear Coalition consists of infant and children's apparel manufactured
and marketed under the HEALTHTEX(R) brand and under the licensed NIKE(R) brand.
Products marketed under the HEALTHTEX and NIKE labels are sold primarily to
department and specialty stores. In addition, playwear and sleepwear products
imprinted with characters and images licensed from The Walt Disney Company and
others are marketed primarily to mass merchandise and discount stores. In
March 1998, management made the decision to exit the licensed character
business at the end of 1998.
INTERNATIONAL COALITION
The International Coalition consists of jeanswear and intimate apparel
businesses outside of North and South America. The largest component is the
jeanswear operation in Europe, where the Company manufactures and markets LEE,
WRANGLER and MAVERICK(R) jeanswear and related products. Jeanswear in Europe
is more of a fashion product and has a higher relative price than similar
products in the United States. Sales are primarily in Western Europe, but with
increasing sales in Eastern Europe. LEE and WRANGLER jeanswear products are
sold through department stores and specialty shops, while the MAVERICK brand is
sold in the discount channel of distribution. Jeanswear products are sold to
retailers through the Company's sales forces and independent sales agents. The
Company has distributors, agents or licensees for LEE and WRANGLER jeanswear
and related products in foreign markets where the Company does not have owned
operations. The Company also manufactures and markets LEE products in China
and participates in a joint venture in Spain and Portugal.
The Company manufactures and markets women's intimate apparel in Europe.
Intimate apparel is marketed in department and specialty stores under the
LOU(R) and BOLERO(R) brand names primarily in
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France and under the GEMMA(R), INTIMA CHERRY(R) and BELCOR(R) brands in Spain.
Intimate apparel is marketed in discount stores in France under the
VARIANCE(R), CARINA(R) and SILTEX(R) brands.
RAW MATERIALS AND MANUFACTURING
Raw materials include fabrics made from cotton, synthetics and blends of cotton
and synthetic yarn. For most domestic operations, the Company purchases fabric,
primarily from several domestic suppliers, against scheduled production. The
Company also purchases thread and trim (buttons, zippers, snaps and lace) from
numerous suppliers.
For domestic operations, purchased fabric is cut in domestic facilities and is
sewn into finished garments in owned domestic and offshore manufacturing
facilities. In addition, the Company contracts the sewing of products from
independent domestic and foreign contractors. To obtain a more balanced
sourcing mix, an increasing percentage of fabric cut in the Company's domestic
facilities is sewn into finished products in lower cost offshore plants,
primarily in Mexico and the Caribbean Basin. By the end of 1997, approximately
45% of domestic sales were derived from products manufactured outside the
United States.
In the Company's domestic knitwear and intimate apparel businesses, operations
are vertically integrated and include the entire process of converting yarn
into finished garments. The Company knits purchased yarn into fabric in its
facilities. The knit fabric is then dyed, finished and cut in domestic
facilities before it is sewn into finished garments. Cotton yarn and cotton
and synthetic blend yarn are purchased from a major textile company under a
long-term supply agreement for the knitwear operations. Yarn is available from
numerous other sources.
In the Company's International Coalition, fabric, thread and trim are purchased
from several international suppliers. In the European jeanswear operations,
fabric is cut and sewn into finished garments in owned plants in the United
Kingdom, Ireland, Malta and Poland, with the balance (mostly tops) sourced from
independent contractors. In intimate apparel, fabric is sewn into finished
garments in owned plants in France, Spain, Tunisia and Madagascar, with the
remainder manufactured by independent contractors. To obtain a more balanced
sourcing mix, jeanswear and intimate apparel sourcing is being shifted from
owned plants in Western Europe to lower cost owned and contracted production
outside of Western Europe. At the end of 1997, approximately 70% of sales were
derived from Company-owned plants.
The Company has not experienced difficulty in obtaining fabric and other raw
materials to meet production needs during 1997 and does not anticipate
difficulties in 1998. The loss of any one supplier would not have a
significant adverse effect on the Company's business.
SEASONALITY
The apparel industry in the United States has four primary retail selling
seasons -- Spring, Summer, Back-to-School and Holiday, while international
markets typically have Spring and Fall selling seasons. Sales to retailers
generally precede the retail selling seasons, although demand peaks have been
reduced in recent years as more products are being sold on a replenishment
basis.
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Overall, with its diversified product offerings, the Company's operating
results are not highly seasonal. On a quarterly basis, consolidated net sales
range from a low of approximately 22% of full year sales in the first quarter
to a high of 27% in the third quarter. Sales in the Knitwear Coalition,
however, are more seasonal in nature, with approximately 60% of its sales of
fleece and T-shirt products in the second half of the year.
Working capital requirements vary throughout the year. Working capital
increases during the first half of the year as inventory builds to support peak
shipping periods, and accordingly decreases during the second half. Cash
provided by operations is substantially higher in the second half of the year
due to higher net income and reduced working capital requirements during that
period.
ADVERTISING
The Company supports its brands through extensive advertising and promotional
programs and through sponsorship of special events. The Company advertises on
national and local radio and television and in consumer and trade publications.
It also participates in cooperative advertising on a shared cost basis with
major retailers in radio, television and various print media. In addition,
point-of-sale fixtures and signage are used to promote products at the retail
level. During 1997, the Company spent $309 million advertising and promoting
its products, compared with $271 million in 1996. A significant portion of the
savings arising from the 1995 cost reduction initiatives (see Note M to the
consolidated financial statements in the 1997 Annual Report) are being invested
in increased advertising and other actions to support and build the Company's
brands. The level of consumer research, in-store marketing programs and
advertising is expected to increase in 1998.
OTHER MATTERS
COMPETITIVE FACTORS
The apparel industry is highly competitive and consists of a number of domestic
and foreign companies. Management believes that there are only two competitors
in the United States that have consolidated assets and sales greater than those
of the Company. However, in certain product categories in which the Company
operates, there are several competitors that have more assets and sales than
the Company in those categories.
TRADEMARKS AND LICENSES
Trademarks are of material importance to all of the Company's marketing
efforts. Company-owned brands are protected by registration or otherwise in
the United States and most other markets where the Company's brands are sold.
These trademark rights are enforced and protected by litigation against
infringement as necessary. The Company has granted licenses to other parties
to manufacture and sell products under the Company's trademarks in product
categories and in geographic areas in which the Company does not operate.
In some instances, the Company pays a royalty to use the trademarks of others.
Apparel is manufactured and marketed under licenses granted by Major League
Baseball, the National Basketball Association, the National Football League,
the National Hockey League, NIKE, Inc., The Walt Disney
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Company and others. Some of these license arrangements are for a short term
and may not contain specific renewal options. Management believes that loss
of any license would not have a material adverse effect on the Company.
CUSTOMERS
The Company's customers are primarily department, specialty and discount stores
in the United States and in international markets, primarily in Europe. Sales
to Wal-Mart Stores, Inc. totaled 11.1% of total sales in 1997 and 10.3% in
1996. Sales to the Company's ten largest customers amounted to 38% of total
sales in 1997 and 37% in 1996.
EMPLOYEES
The Company employs approximately 63,400 men and women. Approximately 5,200
employees 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 any fiscal
year-end is not material for an understanding of the business of the Company
taken as a whole.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included in Item 1 - "Business" and Item 7 -"Management's
Discussion and Analysis of Financial Condition and Results of Operations" are
"forward-looking statements" within the meaning of the federal securities laws.
This includes any statements concerning plans and objectives of management
relating to the Company's operations or economic performance, and assumptions
related thereto. In addition, the Company and its representatives may from
time to time make other oral or written statements that are also
forward-looking statements.
These forward-looking statements are made based on management's expectations
and beliefs concerning future events impacting the Company and therefore
involve a number of risks and uncertainties. Management cautions that
forward-looking statements are not guarantees and that actual results could
differ materially from those expressed or implied in the forward-looking
statements.
Important factors that could cause the actual results of operations or
financial condition of the Company to differ include, but are not necessarily
limited to, the overall level of consumer spending for apparel; changes in
trends in the segments of the market in which the Company competes; the
financial strength of the retail industry; actions of competitors that may
impact the Company's business; and the impact of unforeseen economic changes in
the markets where the Company competes, such as changes in interest rates,
currency exchange rates, inflation rates, recession, and other external
economic and political factors over which the Company has no control.
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ITEM 2. PROPERTIES.
The Company owns most of its facilities used in 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 Company's needs. Manufacturing and distribution facilities being
utilized at the end of 1997 are summarized below:
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Square
Footage
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United States 14,593,000
Mexico and Caribbean Basin 1,529,000
Other international, primarily Europe 1,726,000
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17,848,000
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In addition, the Company owns or leases various administrative and office space
having 1,863,000 square feet of space and owns or leases facilities having
2,859,000 square feet that are used for factory outlet operations.
Approximately 77% of the factory outlet space is used for selling and
warehousing the Company's products, with the balance consisting of space leased
to tenants and common areas. Finally, the Company owns facilities having
576,000 square feet of space formerly used in its operations but now leased to
other parties or held for sale.
ITEM 3. LEGAL PROCEEDINGS.
The Company is a party to litigation arising in the ordinary course of its
business. In management's opinion, there are no pending claims or litigation,
the outcome of which would have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY.
The following are the executive officers of VF Corporation as of March 3, 1998.
The term of office of each of the executive officers continues to the next
annual meeting of the Board of Directors to be held April 21, 1998. There is
no family relationship among any of the VF Corporation executive officers.
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Period Served
Name Position Age In Such Office(s)
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Mackey J. McDonald President 51 October 1993 to date
Chief Executive Officer January 1996 to date
Director October 1993 to date
Candace S. Cummings Vice President - Administration 50 March 1996 to date
& General Counsel
Secretary October 1997 to date
Gerard G. Johnson Vice President - Finance and 57 December 1988 to date
Chief Financial Officer
Timothy A. Lambeth Vice President 56 July 1996 to date
President - European & Asian August 1996 to date
Operations
Daniel G. MacFarlan Vice President 47 April 1995 to date
Chairman - Knitwear, Playwear July 1996 to date
& Intimate Apparel Coalitions
Frank C. Pickard III Vice President - Treasurer 53 April 1994 to date
John P. Schamberger Chairman - Jeanswear Coalition 49 February 1995 to date
Vice President April 1995 to date
Robert K. Shearer Vice President - Controller 46 April 1994 to date
</TABLE>
Mr. McDonald joined the Company's Lee division in 1983, serving in various
management positions until his election as President of the Company's former
Troutman division in 1984. He was named Executive Vice President of the
Wrangler division in 1986 and President of Wrangler in 1988. He was named
Group Vice President of the Company in 1991, President of the Company in
October 1993 and Chief Executive Officer in January 1996. Additional
information is included on page 4 of the 1998 Proxy Statement.
Mrs. Cummings joined the Company as Vice President - General Counsel in January
1995 and became Vice President - Administration & General Counsel in March 1996
and Secretary in October 1997. Previously, she had been a senior business
partner at the international law firm of Dechert Price & Rhoads where she had
been employed since 1972.
Mr. Johnson joined the Company in 1988 as Vice President - Finance and Chief
Financial Officer.
Mr. Lambeth joined the Company in 1968 and has served in various finance,
administrative and marketing positions. He served as president of the
Company's Healthtex division from 1991 to 1992
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and president of Lee Company from 1992 to July 1996. He was elected a Vice
President of the Company in July 1996 and President - European & Asian
Operations in August 1996.
Mr. MacFarlan joined the Company's Jantzen division in 1978 and served in
various capacities, including Vice President - Womens Casualwear from 1990 to
1992 and Senior Vice President - Sales and Womens Casualwear to July 1993. He
served as President of the Company's VF Factory Outlet division from October
1993 to February 1995. He was elected as President of the Company's Nutmeg
division in November 1994 and was elected as the Company's Chairman - Decorated
Knitwear & Playwear Coalitions in February 1995, which was expanded in July
1996 to Chairman - Knitwear, Playwear & Intimate Apparel Coalitions, and Vice
President in April 1995.
Mr. Pickard joined the Company in 1976 and was elected Assistant Controller in
1982, Assistant Treasurer in 1985, Treasurer in 1987 and Vice President -
Treasurer in April 1994.
Mr. Schamberger joined the Company's Wrangler division in 1972 and held various
positions including Vice President - New Brands from 1987 to his election as
Vice President - Consumer Marketing in 1991 and President in May 1992. He was
elected as the Company's Chairman - Jeanswear Coalition in February 1995 and
Vice President in April 1995.
Mr. Shearer joined the Company in 1986 as Assistant Controller and was elected
Controller in 1989 and Vice President - Controller in April 1994.
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Information concerning the market and price history of the Company's Common
Stock, plus dividend information, as reported under the caption "Quarterly
Results of Operations" on page 24 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 37 of the 1997 Annual Report, is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the Company for each of its last five fiscal years
under the caption "Summary of Operations" on pages 34 and 35 of the 1997 Annual
Report is incorporated herein by reference.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
A discussion of the Company's financial condition and results of operations is
incorporated herein by reference to pages 22 and 23 of the 1997 Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements of the Company and specific supplementary financial
information are incorporated herein by reference to pages 22 through 33 of the
1997 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 COMPANY.
Information under the caption "Election of Directors" on pages 2 through 5 of
the 1998 Proxy Statement is incorporated herein by reference. See Item 4A with
regard to Executive Officers.
Information under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" on page 21 of the 1998 Proxy Statement is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information on pages 11 through 16 of the 1998 Proxy Statement is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information under the caption "Certain Beneficial Owners" on page 18 and
"Common Stock Ownership of Management" on page 19 of the 1998 Proxy Statement
is incorporated herein by reference.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information under the caption "Election of Directors" with respect to Mr.
Crutchfield on page 2 and with respect to Messrs. Hurst and Sharp on page 3 of
the 1998 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:
1. Financial statements - Included on pages 24 through
32 of the 1997 Annual Report (Exhibit 13) and incorporated by
reference in Item 8:
Consolidated statements of income - - Fiscal years ended January 3,
1998, January 4, 1997 and December 30, 1995
Consolidated balance sheets - - January 3, 1998 and January 4, 1997
Consolidated statements of cash flows - - Fiscal years ended January
3, 1998, January 4, 1997 and December 30, 1995
Consolidated statements of common shareholders' equity - - Fiscal
years ended January 3, 1998, January 4, 1997 and December 30, 1995
Notes to consolidated financial statements
Report of independent accountants
2. Financial statement schedules - The following
consolidated financial statement schedule is included herein:
Schedule II - - Valuation and qualifying accounts
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.
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3. Exhibits
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Number Description
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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 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)
(C) Articles of Amendment with Respect to Designation of Series A Participating Cumulative Preferred Stock
(D) Bylaws, as amended through January 1, 1996 and as presently in effect (Incorporated by reference
to Exhibit 3(D) to Form 10-K for the fiscal year ended December 30, 1995)
4 Instruments defining the rights of security holders, including indentures:
(A) A specimen of the Company's Common Stock certificate
(B) A specimen of the Company'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 Company 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 Company, 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) Second Supplemental Indenture between the Company and United States Trust Company of New York as
Trustee (Incorporated by reference to Exhibit 4.1 to Form 8-K dated April 6, 1994)
(F) Rights Agreement, dated as of October 22, 1997, between the Company and First Chicago Trust
Company of New York (Incorporated by reference to Exhibit 1 to Form 8-A dated January 23, 1998)
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)
</TABLE>
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<TABLE>
<S> <C>
*(B) 1991 Stock Option Plan (Incorporated by reference to Exhibit A to the 1992 Proxy
Statement dated March 18, 1992)
*(C) 1995 Key Employee Restricted Stock Plan (Incorporated by reference to
Exhibit 10(U) to Form 10-K for the fiscal year ended December 30, 1995)
*(D) 1996 Stock Compensation Plan (Incorporated by reference to Exhibit A to the 1997
Proxy Statement dated March 10, 1997)
*(E) 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)
*(F) Deferred Compensation Plan (Incorporated by reference to Exhibit 10(B) to Form 10-K
for the fiscal year ended December 29, 1990)
*(G) Executive Deferred Savings Plan (Incorporated by reference to Exhibit 10(E) to
Form 10-K for the fiscal year ended January 4, 1992)
*(H) Amended and Restated Supplemental Executive Retirement Plan, dated May 16, 1989
(Incorporated by reference to Exhibit 10(F) to Form 10-K for the fiscal year ended
December 31, 1994)
*(I) First Amended Annual Benefit Determination under the Amended and Restated
Supplemental Executive Retirement Plan for L. R. Pugh (Incorporated by reference
to Exhibit 10(G) to Form 10-K for the fiscal year ended December 31, 1994)
*(J) 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(H) to Form 10-K for the fiscal year ended December 31, 1994)
*(K) Third Amended Annual Benefit Determination under the Amended and Restated Supplemental
Executive Retirement Plan for Senior Management (Incorporated by reference to
Exhibit 10(I) to Form 10-K for the fiscal year ended December 31, 1994)
*(L) Fourth Amended Annual Benefit Determination under the Amended and Restated
Supplemental Executive Retirement Plan for Participants in the Company's Deferred
Compensation Plan (Incorporated by reference to Exhibit 10(J) to Form 10-K for
the fiscal year ended December 31, 1994)
*(M) 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(K) to Form 10-K for the
fiscal year ended December 31, 1994)
*(N) Seventh Amended Annual Benefit Determination under the Amended and Restated
Supplemental Executive Retirement Plan for Participants in the Company's
Executive
</TABLE>
15
<PAGE> 16
<TABLE>
<S> <C>
Deferred Savings Plan (Incorporated by reference to Exhibit 10(L) to Form 10-K
for the fiscal year ended December 31, 1994)
*(O) Eighth Amended Annual Benefit Determination under the Amended and Restated
Supplemental Executive Retirement Plan for Participants whose Pension Plan
Benefits are limited by the Internal Revenue Code (Incorporated by reference to
Exhibit 10(M) to Form 10-K for the fiscal year ended December 31, 1994)
*(P) Resolution of the Board of Directors dated December 3, 1996 relating to lump sum
payments under the Company's Supplemental Executive Retirement Plan (Incorporated
by reference to Exhibit 10(N) to Form 10-K for the fiscal year ended January 4,
1997)
*(Q) Form of Change in Control Agreement with senior management of the Company
(Incorporated by reference to Exhibit 10(J) to Form 10-K for the fiscal year
ended December 29, 1990)
*(R) Form of Change in Control Agreement with other management of the Company
(Incorporated by reference to Exhibit 10(K) to Form 10-K for the fiscal year
ended December 29, 1990)
*(S) Form of Change in Control Agreement with management of subsidiaries of the
Company (Incorporated by reference to Exhibit 10(L) to Form 10-K for the fiscal
year ended December 29, 1990)
(T) Revolving Credit Agreement, dated October 20, 1994 (Incorporated by reference to
Exhibit 10(Q) to Form 10-K for the fiscal year ended December 31, 1994)
*(U) Executive Incentive Compensation Plan (Incorporated by reference to Exhibit 10(R)
to Form 10-K for the fiscal year ended December 31, 1994)
*(V) Restricted Stock Agreement (Incorporated by reference to Exhibit 10(S) to Form
10-K for the fiscal year ended December 31, 1994)
*(W) Discretionary Supplemental Executive Bonus Plan (Incorporated by reference to
Exhibit 10(T) to Form 10-K for the fiscal year ended December 31, 1994)
*(X) VF Corporation Deferred Savings Plan for Non-Employee Directors (Incorporated by
reference to Exhibit 10(W) to Form 10-K for the fiscal year ended January 4,
1997)
* Management compensation plans
13 Annual report to security holders
21 Subsidiaries of the Corporation
</TABLE>
16
<PAGE> 17
<TABLE>
<S> <C>
23.1 Consents of Coopers & Lybrand L.L.P.
23.2 Report of Coopers & Lybrand L.L.P.
24 Power of attorney
27.1 Financial data schedule (Year 1997)
27.2 Revised financial data schedule (Three months 1997)
27.3 Revised financial data schedule (Six months 1997)
27.4 Revised financial data schedule (Nine months 1997)
27.5 Revised financial data schedule (Year 1996)
27.6 Revised financial data schedule (Three months 1996)
27.7 Revised financial data schedule (Six months 1996)
27.8 Revised financial data schedule (Nine months 1996)
27.9 Revised financial data schedule (Year 1995)
99 Additional exhibits:
(A) Form 11-K for VF Corporation Tax-Advantaged Savings Plan for Salaried
Employees for the year ended December 31, 1997
</TABLE>
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.
(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 3, 1998.
17
<PAGE> 18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
V.F. CORPORATION
By: /s/ Mackey J. McDonald
-------------------------
Mackey J. Mcdonald
President
(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
Vice President -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 Company
and in the capacities and on the dates indicated:
<TABLE>
<S> <C>
Robert D. Buzzell* Director
Edward E. Crutchfield* Director
Ursula F. Fairbairn* Director
Barbara S. Feigin* Director
George Fellows* Director
Leon C. Holt, Jr.* Director
Robert J. Hurst* Director March 30, 1998
Mackey J. McDonald* Director
William E. Pike* Director
Lawrence R. Pugh* Director
M. Rust Sharp* Director
L. Dudley Walker* Director
* By: /s/ C. S. Cummings March 30, 1998
------------------------------------------
C. S. Cummings, Attorney-in-Fact
</TABLE>
18
<PAGE> 19
VF CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ---------------------------------------------------------------------------------------------------------------------------------
ADDITIONS
-------------------------------
(1) (2)
Charged to
Balance at Charged to Other Balance at
Beginning Costs and Accounts Deductions End of
Description of Period Expenses Describe Describe Period
- ----------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Fiscal year ended January 3, 1998
Allowance for doubtful accounts $40,253 $16,205 $16,882 (A) $39,576
=========== =========== =========== ===========
Valuation allowance for deferred
income tax assets $29,296 $5,337 $2,127 (B) $32,506
=========== =========== =========== ===========
Fiscal year ended January 4, 1997
Allowance for doubtful accounts $34,621 $18,490 $12,858 (A) $40,253
=========== =========== =========== ===========
Valuation allowance for deferred
income tax assets $22,154 $9,874 $2,732 (B) $29,296
=========== =========== =========== ===========
Fiscal year ended December 30, 1995
Allowance for doubtful accounts $32,794 $14,967 $13,140 (A) $34,621
=========== =========== =========== ===========
Valuation allowance for deferred
income tax assets $10,866 $12,518 $1,230 (B) $22,154
=========== =========== =========== ===========
</TABLE>
(A) Deductions include accounts written off, net of recoveries.
(B) Deduction relates to circumstances where it is more likely than not that
deferred tax assets will be realized.
19
<PAGE> 20
VF CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Description
------ -----------
<S> <C>
3 Articles of incorporation and bylaws:
(C) Articles of Amendment with Respect to Designation of Series A Participating Cumulative Preferred
Stock
4 Instruments defining the rights of security holders, including indentures:
(A) A specimen of the Company's Common Stock certificate
</TABLE>
<PAGE> 21
<TABLE>
<S> <C>
13 Annual report to security holders
21 Subsidiaries of the Corporation
23.1 Consents of Coopers & Lybrand L.L.P.
23.2 Report of Coopers & Lybrand L.L.P.
24 Power of attorney
27.1 Financial data schedule (Year 1997)
27.2 Revised financial data schedule (Three months 1997)
27.3 Revised financial data schedule (Six months 1997)
27.4 Revised financial data schedule (Nine months 1997)
27.5 Revised financial data schedule (Year 1996)
27.6 Revised financial data schedule (Three months 1996)
27.7 Revised financial data schedule (Six months 1996)
27.8 Revised financial data schedule (Nine months 1996)
27.9 Revised financial data schedule (Year 1995)
99 Additional exhibits:
(A) Form 11-K for VF Corporation Tax-Advantaged Savings Plan for Salaried
Employees for the year ended December 31, 1997
</TABLE>
<PAGE> 1
EXHIBIT 3(C)
EXHIBIT 3C - ARTICLES OF AMENDMENT WITH RESPECT TO DESIGNATION OF SERIES A
PARTICIPATING CUMULATIVE PREFERRED STOCK
<PAGE> 2
9804 - 373
Microfilm Number_________________ Filed with the Department of State on Jan. 23,
1998
Entity Number 372201 _____________________________________________
Secretary of the Commonwealth j/c
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DSCB:15-1915 (Rev 91)
In compliance with the requirements of 15 Pa.C.S. Section 1915
(relating to articles of amendment), the undersigned business corporation,
desiring to amend its Articles, hereby states that:
1. The name of the corporation is: V.F. Corporation
2. The (a) address of this corporation's current registered office in this
Commonwealth or (b) name of its commercial registered office provider and the
county of venue is (the Department is hereby authorized to correct the following
information to conform to the records of the Department):
(a) 1047 North Park Road Wyomissing, PA 19610
---------------------------------------------------------------------------
Number and Street City State Zip County
(b) c/o __________________________________________________________
Name of Commercial Registered Office Provider
For a corporation represented by a commercial registered office
provider, the county in (b) shall be deemed the county in which the corporation
is located for venue and official publication purposes.
3. The statute by or under which it was incorporated is: The Act of April 29,
1874
4. The date of its incorporation is: December 4, 1899
5. (Check, and if appropriate complete, one of the following):
___ The amendment shall be effective upon filing these Articles of
Amendment in the Department of State.
X The amendment shall be effective on January 26, 1998 at 12:01 a.m.
Date Hour
6. (Check one of the following):
___ The amendment was adopted by the shareholders (or members) pursuant
to 15 Pa.C.S. Section 1914(a) and (b).
X The amendment was adopted by the board of directors pursuant to 15
Pa.C.S. Section 1914(c).
7. (Check, and if appropriate complete, one of the following):
___ The amendment adopted by the corporation, set forth in full, is as
follows:
X The amendment adopted by the corporation as set forth in full
in Exhibit A attached hereto and made a part hereto.
<PAGE> 3
9804 - 373
DSCB:15-1915 (Rev 91)-2
8. (Check if the amendment restates the Articles):
___ The restated Articles of Incorporation supersede the original
Articles and all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused
these Articles of Amendment to be signed by a duly authorized officer thereof
this 22nd day of January 1998.
VF Corporation
--------------------------------------------
(Name of Corporation)
By: /s/ Mackey J. McDonald
-----------------------------------------
(Signature)
Title: President and Chief Executive Officer
--------------------------------------
<PAGE> 4
EXHIBIT A
DESIGNATION
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
V.F. CORPORATION
Pursuant to Section 601 of the
Pennsylvania Business Corporation Law
Pursuant to the authority conferred upon the Board of Directors by
the Articles of Incorporation of the Corporation, the Board of Directors on
October 15, 1997, adopted the following resolution amending and restating in its
entirety, effective as of January 26, 1998, the current Series A Junior
Participating Preferred Stock to have the designation, voting powers,
preferences and relative participating, optional and other special rights and
qualifications, limitations and restrictions as follows:
SECTION 1. Designation and Number of Shares. The shares of such series
shall be designated as "Series A Participating Cumulative Preferred Stock" (the
"SERIES A PREFERRED STOCK"), and the number of shares constituting such series
shall be 2,000,000. Such number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; provided that no
decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
issuable upon exercise or conversion of outstanding rights, options or other
securities issued by the Corporation.
SECTION 2. Dividends and Distributions.
<PAGE> 5
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends
payable on March, June, September and December of each year (each such
date being referred to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of any share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (i) $1.00 and (ii) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends or other distributions and 100 times the
aggregate per share amount of all non-cash dividends or other
distributions (other than (A) a dividend payable in shares of Common
Stock, no par value, of the Corporation (the "COMMON STOCK") or (B) a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise)), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. If the
Corporation shall at any time after January 26, 1998 (the "RIGHTS
DECLARATION DATE") pay any dividend on Common Stock payable in shares
of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause
2(a)(ii) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph 2(a) above
immediately after it declares a dividend or distribution on the Common
Stock (other than as described in clauses 2(a)(ii)(A) and 2(a)(ii)(B)
above); provided that if no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date (or, with respect to the first Quarterly Dividend Payment
Date, the period between the first issuance of any share or fraction of
a share of Series A Preferred Stock and such first Quarterly Dividend
Payment Date), a dividend of $1.00 per share on the Series A Preferred
Stock shall
A-2
<PAGE> 6
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Series A Preferred Stock, unless the date of issue of such shares is
on or before the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue and
be cumulative from the date of issue of such shares, or unless the date
of issue is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and on or before such Quarterly Dividend Payment
Date, in which case dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on shares of Series A Preferred
Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on
a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall not be more than 60 days prior to the date fixed for the
payment thereof.
SECTION 3. Voting Rights. In addition to any other voting rights
required by law, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of shareholders
of the Corporation. If the Corporation shall at any time after the
Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
A-3
<PAGE> 7
(b) Except as otherwise provided herein or by law, the holders
of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as a single class on all matters
submitted to a vote of shareholders of the Corporation.
(c) (i) If at any time dividends on any Series A Preferred
Stock shall be in arrears in an amount equal to six quarterly dividends
thereon, the occurrence of such contingency shall mark the beginning of
a period (herein called a "DEFAULT PERIOD") which shall extend until
such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend
period on all shares of Series A Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock and any other series of
Preferred Stock then entitled as a class to elect directors, voting
together as a single class, irrespective of series, shall have the
right to elect two Directors.
(ii) During any default period, such voting right of
the holders of Series A Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph
3(c)(iii) hereof or at any annual meeting of shareholders, and
thereafter at annual meetings of shareholders, provided that
neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be
exercised unless the holders of 10% in number of shares of
Preferred Stock outstanding shall be present in person or by
proxy. The absence of a quorum of holders of Common Stock
shall not affect the exercise by holders of Preferred Stock of
such voting right. At any meeting at which holders of
Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right,
voting as a class, to elect Directors to fill such vacancies,
if any, in the Board of Directors as may then exist up to two
Directors or, if such right is exercised at an annual meeting,
to elect two Directors. If the number which may be so elected
at any special meeting does not amount to the required number,
the holders of the Preferred Stock shall have the right to
make such increase in the number of Directors as shall be
necessary to permit the election by them of the required
number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period
and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote
of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity
A-4
<PAGE> 8
securities ranking senior to or pari passu with the Series A
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may
order, or any shareholder or shareholders owning in the
aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series, may
request, the calling of special meeting of holders of
Preferred Stock, which meeting shall thereupon be called by
the President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting
at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph 3(c)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the
books of the Corporation. Such meeting shall be called for a
time not earlier than 20 days and not later than 60 days after
such order or request or in default of the calling of such
meeting within 60 days after such order or request, such
meeting may be called on similar notice by any shareholder or
shareholders owning in the aggregate not less than 10% of the
total number of shares of Preferred Stock outstanding,
irrespective of series. Notwithstanding the provisions of this
paragraph 3(c)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the
date fixed for the next annual meeting of shareholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock shall
have exercised their right to elect two Directors voting as a
class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided
in paragraph 3(c)(ii) hereof) be filled by vote of a majority
of the remaining Directors theretofore elected by the holders
of the class of stock which elected the Director whose office
shall have become vacant. References in this paragraph 3(c) to
Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing
sentence.
A-5
<PAGE> 9
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the certificate of
incorporation or bylaws irrespective of any increase made
pursuant to the provisions of paragraph 3(c)(ii) hereof (such
number being subject, however, to change thereafter in any
manner provided by law or in the certificate of incorporation
or bylaws). Any vacancies in the Board of Directors effected
by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining
Directors.
(d) The Certificate of Incorporation of the Corporation shall
not be amended in any manner (whether by merger or otherwise) so as to
adversely affect the powers, preferences or special rights of the
Series A Preferred Stock without the affirmative vote of the holders of
a majority of the outstanding shares of Series A Preferred Stock,
voting separately as a class.
(e) Except as otherwise provided herein, holders of Series A
Preferred Stock shall have no special voting rights, and their consent
shall not be required for taking any corporate action.
SECTION 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on outstanding
shares of Series A Preferred Stock shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the
A-6
<PAGE> 10
Series A Preferred Stock and all such other parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem, purchase or otherwise acquire for value
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock; provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of stock of the
Corporation ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value
any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of Series A Preferred Stock and
all such other parity stock upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for value any shares of
stock of the Corporation unless the Corporation could, under paragraph
4(a), purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. Reacquired Shares. Any shares of Series A Preferred Stock
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock without designation as to series and may be reissued
as part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors as permitted by the Certificate of
Incorporation or as otherwise permitted under Pennsylvania Law.
SECTION 6. Liquidation, Dissolution and Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be
A-7
<PAGE> 11
made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment; provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of Common
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such other parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. If the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 7. Consolidation, Merger, Etc. If the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash or any other property, as the case may be, into which or for
which each share of Common Stock is changed or exchanged. If the Corporation
shall at any time after the Rights Declaration Date pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision or combination
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the
A-8
<PAGE> 12
number of shares of Common Stock that were outstanding immediately prior to such
event.
SECTION 8. No Redemption. The Series A Preferred Stock shall not be
redeemable.
SECTION 9. Rank. The Series A Preferred Stock shall rank junior (as to
dividends and upon liquidation, dissolution and winding up) to all other series
of the Corporation's preferred stock except any series that specifically
provides that such series shall rank junior to the Series A Preferred Stock.
SECTION 10. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
A-9
<PAGE> 1
Exhibit 4A
(Front of Stock Certificate)
NUMBER MN COMMON STOCK WITHOUT PAR VALUE SHARES VF CORPORATION
SEE REVERSE FOR CERTAIN DEFINITIONS CUSIP 918204 10 8 INCORPORATED UNDER
THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA
This Certifies that is the owner of FULL-PAID AND NON-ASSESSABLE
SHARES OF THE COMMON STOCK OF V.F. CORPORATION transferable on the books of
the Corporation in person or by duly authorized attorney upon surrender of this
Certificate properly endorsed. This Certificate is not valid unless
countersigned by the Transfer Agent and registered by the Registrar. Witness the
seal of the Corporation and the signatures of its duly authorized officers.
Dated: SECRETARY PRESIDENT COUNTERSIGNED AND REGISTERED: FIRST CHICAGO TRUST
COMPANY OF NEW YORK TRANSFER AGENT AND REGISTRAR BY AUTHORIZED OFFICER
<PAGE> 2
(Back of Stock Certificate)
V. F. CORPORATION
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER
WHO SO REQUESTS THE DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF
STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -- __________ Custodian __________
(Cust.) (Minor)
under Uniform Gifts to Minors
Act _____________________
(Basic)
Additional abbreviations may also be used though not in the above list.
For value received ____ hereby sell assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________________
_____________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
_____________________________________________________________________________
_____________________________________________________________________________
____________ Shares of the capital stock represented by the within Certificate,
and do hereby irrevocably constitute and appoint ____________________ , Attorney
to transfer the said stock on the books of the within-named Corporation with
full power of substitution in the premises.
Dated
_______________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY PARTICULAR
ASPECT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED: ____________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBER-
SHIP PLAN, APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAMS), PURSUANT TO S.E.C. RULE 17Ad-15.
This certificate also evidences certain Rights as set forth in a Rights
Agreement between VF Corporation and First Chicago Trust Company of New York
dated as of October 22, 1997 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. The Company will mail to the holder
of this certificate a copy of the Rights Agreement without charge promptly after
receipt of a written request therefor. Under certain circumstances, as set forth
in the Rights Agreement, such Rights may be evidenced by separate certificates
and no longer be evidenced by this certificate, may be redeemed or exchanged or
may expire. As set forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Persons or by any subsequent holder, may
be null and void.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR
DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO
THE ISSUANCE OF A REPLACEMENT CERTIFICATE.
<PAGE> 1
VF CORPORATION
1997 10-K
EXHIBIT 13 - ANNUAL REPORT TO SECURITY HOLDERS
<PAGE> 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
ANALYSIS OF OPERATIONS
The Company's earnings in 1997 and 1996 reflect the benefits from actions begun
in late 1995 (refer to Note M to the consolidated financial statements) to (1)
close a number of higher cost domestic manufacturing facilities and move a
greater percentage of our manufacturing to lower cost offshore locations, (2)
effect reductions in selling and administrative expenses and (3) reinvest a
significant portion of the savings from these actions in increased advertising
and other actions to support and build our brands. These initiatives
contributed substantially to the Company's achievement of record earnings and
strong cash flow during both 1997 and 1996.
Consolidated net sales in 1997 increased by 2% over 1996. Unit
sales increased by 1%, and the impact of changes in product mix and pricing
increased sales by 2%. Offsetting these increases was the impact of a stronger
U.S. dollar in 1997, which in translating foreign currencies into U.S. dollars
had the effect of reducing total sales by 1% (and earnings by $.07 per share).
Sales in the Company's growth categories - jeanswear, domestic intimate
apparel, workwear and daypacks, where marketing efforts are focused to achieve
sales increases - advanced at a higher rate than overall sales. Net sales in
1996 increased by 1% over 1995. Unit sales in 1996 declined by 2%, but average
prices increased, primarily due to changes in product mix.
Gross margins were 34.1% of sales in 1997, compared with 32.7% of
sales in 1996 and 29.3% in 1995. Gross margins in 1995 included $109.8 million
of special charges; excluding these charges, 1995 gross margins were 31.5%. The
margin improvement in 1996 over 1995, after excluding the special charges in
1995, resulted from lower manufacturing costs attributable to the cost
reduction initiatives of late 1995, plus lower provisions for inventory
write-downs and manufacturing plant downtime. The margin improvement in 1997
over 1996 resulted from the continuing shift to lower cost sourcing, lower raw
material costs and increased operating efficiencies.
For the United States market, VF manufactures its products in owned
domestic plants and offshore plants, primarily in Mexico. In addition, VF
contracts the sewing of products from independent domestic and foreign
contractors. There has been a shift over the last two years toward a more
balanced sourcing mix, with more products being manufactured in and contracted
from lower cost facilities in Mexico and the Caribbean Basin. The amount of
domestic sales derived from products manufactured outside the United States has
increased to 45% by the end of 1997 from approximately 30% during 1995.
<PAGE> 3
Similarly, in foreign markets, sourcing is being shifted from owned Western
European plants to lower cost owned and contracted production outside of
Western Europe.
Marketing, administrative and general expenses were 22.5% of sales
in 1997, compared with 21.8% and 22.3% in 1996 and 1995, respectively.
Excluding special charges of $41.7 million in 1995, expenses were 21.5% of
sales. Marketing and promotional expenses have been increased to support and
build the Company's brands, particularly in the targeted growth areas of
domestic and international jeanswear, domestic intimate apparel and daypacks.
Accordingly, advertising expense increased to 5.9% of sales in 1997 from 5.3%
in 1996 and 4.6% in 1995.
Other operating income and expense includes goodwill amortization
expense, offset by net royalty income. Amortization of goodwill declined in
1996 from expiring amortization periods.
Net interest expense declined significantly in 1997 and 1996 as the
high level of cash generated from operations was used to reduce short-term
borrowing needs. In addition, interest income includes $10.5 million in 1997
and $2.6 million in 1996 relating to settlements of tax examinations of
acquired companies.
The effective income tax rate was 40.1% in 1997, 41.1% in 1996 and
44.6% in 1995. The effective rate declined in 1997 and 1996 due to reduced
foreign operating losses with no current tax benefit and the decline in the
relationship of these foreign operating losses and nondeductible goodwill
expense to income before income taxes.
ANALYSIS OF FINANCIAL CONDITION
In managing its capital structure, VF balances financial leverage with equity
to reduce its overall cost of capital, while providing the flexibility to
pursue investment opportunities that may become available. It is management's
goal to maintain a debt to capital ratio of less than 40%. Our debt to capital
ratio remains within these guidelines: 22.5% at the end of 1997 and 21.4% at
the end of 1996. Had the January 1998 acquisition of Bestform Group, Inc.
(refer to Note B) occurred as of the end of 1997, the pro forma debt to capital
ratio would have been only 27.1%, still well within our target and allowing
continued flexibility to pursue similar opportunities for shareholder growth.
BALANCE SHEETS
Inventories are higher at the end of 1997 than at 1996, reflecting a slight
slowdown in sales near the end of 1997 due to actions taken to exit some lower
profitability business and the effects of conservative
<PAGE> 4
inventory planning by our retail customers. Inventories at the end of both 1997
and 1996 are at low historical levels.
During 1996, the Company repaid all short-term borrowings, except
for certain foreign lines of credit, and called for redemption $100 million of
its long-term debt originally due in 1999. No further debt reductions were made
in 1997 or 1996, despite cash availability, as there are no long-term debt
maturities until the year 2001.
LIQUIDITY AND CASH FLOW
Working capital was $835.6 million and the current ratio was 2.1 to 1 at the
end of 1997, comparable to the levels at the end of 1996.
Cash provided by operations was $455 million in 1997, compared with
$711 million in 1996. The record level in 1996 resulted from reductions in
accounts receivable due to the timing of the year-end, historically low
inventory levels and an increase in current liabilities during 1996.
Capital expenditures were $154 million in 1997, compared with $139
million and $155 million in 1996 and 1995, respectively. Capital expenditures
relate to expansion of offshore manufacturing capacity, investments in
information systems and ongoing maintenance requirements of our worldwide
manufacturing and other facilities. Capital expenditures in 1998 should be
somewhat higher than the level of the past three years, due to continuing
investments in the Company's information systems, and are expected to be funded
by cash flows from operations.
Beginning in late 1994 and continuing through 1997, the Company
purchased 15.8 million shares of its Common Stock in open market transactions,
including 9.1 million shares purchased during 1997 for $392 million. These
share repurchases were funded by operating cash flows. In February 1998, the
Board of Directors authorized the Company to purchase up to an additional 5.0
million shares.
Cash dividends totaled $.77 per common share in 1997, compared with
$.73 in 1996 and $.69 in 1995. The dividend payout rate was 28% in 1997,
compared with 31% in 1996 and, due to lower earnings, 57% in 1995. The
indicated annual dividend rate for 1998 is $.80 per share. VF has paid
dividends on its Common Stock annually since 1941 and intends to maintain a
long-term payout rate of 30%.
The Company's strong financial position, including existing cash
balances, unused credit lines and a low debt ratio, provides substantial
capacity to meet investment opportunities that may arise.
OTHER MATTERS
<PAGE> 5
Over 16% of our 1997 sales and operating income were derived from foreign
operations. VF's financial position and operating results can be influenced by
economic conditions in countries where VF conducts business and by changing
foreign currency exchange rates. Management monitors foreign currency exposures
and may in the ordinary course of business enter into foreign currency forward
exchange contracts related to specific foreign currency transactions or
anticipated cash flows. These contracts, generally for periods less than six
months on certain European currencies, are not material. VF does not hedge the
translation of foreign currencies into the U.S. dollar.
The Company is addressing the Year 2000 issue, in which some
computer systems will not properly recognize date-sensitive information when
the year changes to 2000. A Year 2000 problem could result in system failure or
miscalculations, either in a company's computer systems or in systems of third
parties with which a company conducts business. VF believes that, with
modifications to existing software and conversion to new software, the Year
2000 issue will not create significant operational problems for the Company's
computer systems. The Company's movement toward common computer systems,
including modifications and testing related to the Year 2000 issue, is expected
to be completed in early 1999. All costs incurred to address the Year 2000
issue are being expensed. Such costs are not expected to significantly affect
future operating results.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included in this Annual Report are "forward-looking
statements" within the meaning of the federal securities laws. This includes
statements concerning plans and objectives of management relating to the
Company's operations or economic performance, and assumptions related thereto.
These forward-looking statements are made based on management's
expectations and beliefs concerning future events impacting the Company and
therefore involve a number of risks and uncertainties. Management cautions that
forward-looking statements are not guarantees and actual results could differ
materially from those expressed or implied in the forward-looking statements.
Important factors that could cause the actual results of operations
or financial condition of the Company to differ include, but are not
necessarily limited to, the overall level of consumer spending for apparel;
changes in trends in the segments of the market in which the Company competes;
the financial strength of the retail industry; actions of competitors that may
impact the Company's business; and the impact of unforeseen economic changes in
the markets where the Company competes, such as changes in interest rates,
currency exchange rates, inflation rates, recession, and other external
economic and political factors over which the Company has no control.
<PAGE> 6
VF CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------------------------
JANUARY 3 JANUARY 4 DECEMBER 30
In thousands, except per share amounts 1998 1997 1995
------------- ----------- ------------
<S> <C> <C> <C>
NET SALES $5,222,246 $5,137,178 $5,062,299
COSTS AND OPERATING EXPENSES
Cost of products sold 3,440,611 3,458,166 3,577,555
Marketing, administrative and general expenses 1,175,598 1,122,076 1,131,290
Other operating expense (income) 964 (347) 6,064
------------- ----------- ------------
4,617,173 4,579,895 4,714,909
------------- ----------- ------------
OPERATING INCOME 605,073 557,283 347,390
OTHER INCOME (EXPENSE)
Interest income 23,818 13,406 11,085
Interest expense (49,695) (62,793) (77,302)
Miscellaneous, net 6,684 512 2,962
------------- ----------- ------------
(19,193) (48,875) (63,255)
------------- ----------- ------------
INCOME BEFORE INCOME TAXES 585,880 508,408 284,135
INCOME TAXES 234,938 208,884 126,844
------------- ----------- ------------
NET INCOME $ 350,942 $ 299,524 $ 157,291
========== ========== ==========
EARNINGS PER COMMON SHARE
Basic $2.76 $2.32 $1.20
Diluted 2.70 2.28 1.19
CASH DIVIDENDS PER COMMON SHARE $ .77 $ .73 $ .69
</TABLE>
See notes to consolidated financial statements.
<PAGE> 7
<TABLE>
<CAPTION>
QUARTERLY RESULTS OF OPERATIONS (Unaudited)
In thousands, except per share amounts
EARNINGS PER COMMON SHARE DIVIDENDS PER
NET SALES GROSS PROFIT NET INCOME BASIC DILUTED COMMON SHARE
------------- --------------- ---------- --------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
1997
FIRST QUARTER $1,262,781 $ 417,837 $ 70,186 $ .54 $ .53 $.19
SECOND QUARTER 1,255,549 427,650 78,904 .61 .60 .19
THIRD QUARTER 1,416,906 487,311 108,692 .86 .84 .19
FOURTH QUARTER 1,287,010 448,837 93,160 .75 .74 .20
-------------------------------------------------------------------------------------
$5,222,246 $1,781,635 $350,942 $2.76 $2.70 $.77
-------------------------------------------------------------------------------------
1996
First quarter $1,158,123 $ 380,517 $ 55,930 $ .43 $ .43 $.18
Second quarter 1,220,997 396,319 69,892 .54 .53 .18
Third quarter 1,380,919 446,358 91,048 .71 .69 .18
Fourth quarter 1,377,139 455,818 82,654 .64 .63 .19
-------------------------------------------------------------------------------------
$5,137,178 $1,679,012 $299,524 $2.32 $2.28 $.73
-------------------------------------------------------------------------------------
1995
First quarter $1,187,587 $ 388,439 $ 57,953 $ .45 $ .44 $.17
Second quarter 1,271,936 400,924 65,237 .51 .50 .17
Third quarter 1,332,102 412,552 69,718 .54 .53 .17
Fourth quarter 1,270,674 282,829 (35,617) * (.29) * (.29) * .18
-------------------------------------------------------------------------------------
$5,062,299 $1,484,744 $157,291 $1.20 $1.19 $.69
-------------------------------------------------------------------------------------
</TABLE>
* Special charges of $155.9 million reduced net income by $102.5 million
($.80 per share). See Note M to consolidated financial statements.
<PAGE> 8
VF CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JANUARY 3 JANUARY 4
In thousands 1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 124,094 $ 270,629
Accounts receivable, less allowances of
$39,576 in 1997 and $40,253 in 1996 587,934 592,942
Inventories 774,755 730,823
Deferred income taxes 94,750 90,556
Other current assets 19,933 21,376
------------ ------------
Total current assets 1,601,466 1,706,326
PROPERTY, PLANT AND EQUIPMENT 705,990 721,524
INTANGIBLE ASSETS 814,332 863,930
OTHER ASSETS 200,994 157,755
------------ ------------
$3,322,782 $3,449,535
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 24,191 $ 17,528
Current portion of long-term debt 450 1,298
Accounts payable 301,103 320,056
Accrued liabilities 440,164 427,385
------------ ------------
Total current liabilities 765,908 766,267
LONG-TERM DEBT 516,226 519,058
OTHER LIABILITIES 143,813 164,077
REDEEMABLE PREFERRED STOCK 56,341 58,092
DEFERRED CONTRIBUTIONS TO EMPLOYEE STOCK OWNERSHIP PLAN (26,275) (31,698)
------------ ------------
30,066 26,394
COMMON SHAREHOLDERS' EQUITY
Common Stock, stated value $1; shares authorized 150,000,000; shares
outstanding, 121,225,298 in 1997 and 63,907,874
(before two-for-one stock split) in 1996 121,225 63,908
Additional paid-in capital 744,108 668,554
Foreign currency translation (36,110) 6,428
Retained earnings 1,037,546 1,234,849
------------ ------------
1,866,769 1,973,739
------------ ------------
$3,322,782 $3,449,535
============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE> 9
VF CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------------------
JANUARY 3 JANUARY 4 DECEMBER 30
In thousands 1998 1997 1995
------------ ------------ ------------
<S> <C> <C> <C>
OPERATIONS
Net income $350,942 $299,524 $157,291
Adjustments to reconcile net income
to cash provided by operations:
Depreciation 128,734 132,440 134,039
Amortization of intangible assets 27,518 28,138 33,682
Other, net (9,396) (18,239) (15,048)
Changes in current assets and liabilities:
Accounts receivable (9,972) 25,270 (2,045)
Inventories (55,677) 110,807 (31,881)
Accounts payable (12,587) 43,196 (18,623)
Other, net 35,099 90,318 66,241
------------ ------------ ------------
Cash provided by operations 454,661 711,454 323,656
INVESTMENTS
Capital expenditures (154,262) (138,747) (155,206)
Business acquisitions (16,003) (24,284) (12,004)
Other, net (13,578) 36,887 4,216
------------ ------------ ------------
Cash invested (183,843) (126,144) (162,994)
FINANCING
Increase (decrease) in short-term borrowings 8,745 (213,746) (92,655)
Proceeds from long-term debt - 15,556 98,718
Payment of long-term debt (1,253) (111,522) (3,123)
Purchase of Common Stock (391,651) (61,483) (86,251)
Cash dividends paid (100,141) (97,036) (92,038)
Proceeds from issuance of stock 64,964 67,819 36,015
Other, net 1,983 1,656 3,005
------------ ------------ ------------
Cash used by financing (417,353) (398,756) (136,329)
------------ ------------ ------------
NET CHANGE IN CASH AND EQUIVALENTS (146,535) 186,554 24,333
CASH AND EQUIVALENTS - BEGINNING OF YEAR 270,629 84,075 59,742
------------ ------------ ------------
CASH AND EQUIVALENTS - END OF YEAR $124,094 $270,629 $ 84,075
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE> 10
VF CORPORATION
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
ADDITIONAL FOREIGN
COMMON PAID-IN CURRENCY RETAINED
In thousands STOCK CAPITAL TRANSLATION EARNINGS
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1994 $64,165 $552,927 $ 4,557 $1,112,360
Net income - - - 157,291
Cash dividends:
Common Stock - - - (87,907)
Series B Preferred Stock - - - (4,131)
Tax benefit from Preferred Stock dividends - - - 955
Redemption of Preferred Stock - - - (507)
Restricted Common stock 5 (230) - 248
Purchase of treasury shares (1,720) - - (84,531)
Exercise of stock options,
net of shares surrendered 989 41,279 - (170)
Foreign currency translation, net of
$8,576 deferred income taxes - - 15,926 -
----------- ------------- ------------ -------------
BALANCE DECEMBER 30, 1995 63,439 593,976 20,483 1,093,608
Net income - - - 299,524
Cash dividends:
Common Stock - - - (93,020)
Series B Preferred Stock - - - (4,016)
Tax benefit from Preferred Stock dividends - - - 827
Redemption of Preferred Stock - - - (1,218)
Restricted Common stock - 23 - -
Purchase of treasury shares (1,015) - - (60,468)
Exercise of stock options,
net of shares surrendered 1,484 74,555 - (388)
Foreign currency translation, net of
$7,568 deferred income taxes - - (14,055) -
----------- ------------- ------------ -------------
BALANCE JANUARY 4, 1997 63,908 668,554 6,428 1,234,849
</TABLE>
(continued)
<PAGE> 11
VF CORPORATION
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
(continued) ADDITIONAL FOREIGN
COMMON PAID-IN CURRENCY RETAINED
In thousands STOCK CAPITAL TRANSLATION EARNINGS
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
BALANCE JANUARY 4, 1997 $ 63,908 $668,554 $ 6,428 $1,234,849
Net income - - - 350,942
Cash dividends:
Common Stock - - - (96,337)
Series B Preferred Stock - - - (3,804)
Tax benefit from Preferred Stock dividends - - - 700
Redemption of Preferred Stock - - - (1,855)
Restricted Common stock 9 (520) - 601
Purchase of treasury shares (5,239) - - (386,412)
Exercise of stock options,
net of shares surrendered 1,457 76,074 - (48)
Foreign currency translation, net of
$22,905 deferred income taxes - - (42,538) -
Two-for-one stock split 61,090 - - (61,090)
------------ ------------ ------------- -------------
BALANCE JANUARY 3, 1998 $121,225 $744,108 $ (36,110) $1,037,546
============ ============ ============= =============
</TABLE>
See notes to consolidated financial statements.
<PAGE> 12
VF CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of VF Corporation and all majority 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 method represent 53% of total 1997 inventories and
29% in 1996. 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 by the straight-line method over the estimated useful
lives of the assets, ranging up to 40 years for buildings and 10 years for
machinery and equipment.
INTANGIBLE ASSETS represent the excess of costs over the fair value of net
tangible assets of businesses acquired, less accumulated amortization of $208.3
million and $224.5 million in 1997 and 1996. These assets are amortized on the
straight-line method over five to forty years.
The Company's policy is to evaluate intangible assets for possible impairment
whenever events or changes in circumstances indicate that the carrying amount
of such assets may not be recoverable. This evaluation is based on a number of
factors, including a business unit's expectations for operating income and
undiscounted cash flows that will result from the use of such assets.
ADVERTISING COSTS are expensed as incurred and were $309.3 million in 1997,
$271.4 million in 1996 and $230.6 million in 1995.
STOCK SPLIT: The Company declared a two-for-one stock split effective November
4, 1997. Common Stock increased and Retained Earnings decreased by $61.1
million, representing the stated value of additional shares issued. References
in this report to number of shares, per share amounts and stock option data
have been restated. Amounts presented in the Consolidated Balance Sheets and
Statements of Common Shareholders' Equity are based on actual share amounts
outstanding for each period presented.
USE OF ESTIMATES: In preparing financial statements in accordance with
generally accepted accounting principles, management makes estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
<PAGE> 13
NOTE B - ACQUISITIONS
During the years 1995 through 1997, the Company acquired a total of five
businesses, primarily related to jeanswear products, for an aggregate cost of
$52.3 million, of which $28.6 million represents intangible assets. All
acquisitions have been accounted for as purchases, and accordingly the purchase
prices have been allocated to the net assets acquired based on fair values at
the dates of acquisition. The excess of cost over fair value of the purchased
businesses has been allocated to intangible assets and is being amortized
primarily over 40 years. Operating results of these businesses have been
included in the consolidated financial statements since the dates of
acquisition.
On January 8, 1998, the Company acquired the stock of Bestform Group, Inc.
for $184.3 million in cash, plus repayment of $44.4 million of debt.
Bestform is a manufacturer and marketer of intimate apparel in the United
States, with 1997 sales of $307 million (unaudited).
NOTE C - INVENTORIES
<TABLE>
<CAPTION>
1997 1996
------- -------
In thousands
<S> <C> <C>
Finished products $434,000 $394,962
Work in process 166,947 168,774
Materials and supplies 173,808 167,087
------- -------
$774,755 $730,823
======== ========
</TABLE>
The current cost of inventories stated on the last-in, first-out method (see
Note A) is not significantly different from their value determined under the
first-in, first-out method.
NOTE D - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
1997 1996
--------- ---------
In thousands
<S> <C> <C>
Land $ 44,786 $ 44,244
Buildings 437,903 402,635
Machinery and equipment 1,086,263 1,096,472
---------- ----------
1,568,952 1,543,351
Less accumulated depreciation 862,962 821,827
---------- ----------
$ 705,990 $ 721,524
========== ==========
</TABLE>
<PAGE> 14
NOTE E - SHORT-TERM BORROWINGS
The weighted average interest rate for short-term borrowings, all of which
relate to foreign operations, was 10.5% at the end of 1997 and 12.6% at the end
of 1996.
The Company maintains an unsecured revolving credit agreement with a group of
banks for $750.0 million that supports commercial paper borrowings and is
otherwise available for general corporate purposes. The agreement, which
extends to 1999, requires a .12% facility fee per year and contains various
financial covenants, including minimum net worth and debt ratio requirements.
At January 3, 1998, there were no borrowings under the agreement.
NOTE F - ACCRUED LIABILITIES
<TABLE>
<CAPTION>
1997 1996
-------- --------
In thousands
<S> <C> <C>
Income taxes $ 86,244 $ 81,419
Compensation 84,425 87,027
Insurance 62,153 64,247
Special charges (Note M) - 16,218
Other 207,342 178,474
------- -------
$440,164 $427,385
======== ========
</TABLE>
NOTE G - LONG-TERM DEBT
<TABLE>
<CAPTION>
1997 1996
-------- --------
In thousands
<S> <C> <C>
9.50% notes, due 2001 $100,000 $100,000
6.63% notes, due 2003 100,000 100,000
7.60% notes, due 2004 100,000 100,000
6.75% notes, due 2005 100,000 100,000
9.25% debentures, due 2022 100,000 100,000
Other 16,676 20,356
-------- --------
516,676 520,356
Less current portion 450 1,298
-------- --------
$516,226 $519,058
======== ========
</TABLE>
The scheduled payments of long-term debt are $.6 million in each of the years
1999 and 2000, $114.0 million in 2001 and $.8 million in 2002. The Company
paid interest of $48.0 million in 1997, $62.6 million in 1996 and $74.4 million
in 1995.
<PAGE> 15
NOTE H - OTHER LIABILITIES
<TABLE>
<CAPTION>
1997 1996
-------- --------
In thousands
<S> <C> <C>
Deferred compensation $113,727 $ 84,617
Deferred income taxes - 43,131
Other 30,086 36,329
-------- --------
$143,813 $164,077
======== ========
</TABLE>
NOTE I - BENEFIT PLANS
The Company 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 Company 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, U.S. government obligations and corporate obligations.
The effect of the defined benefit plan on income is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
In thousands
<S> <C> <C> <C>
Service cost - benefits earned during the year $ 16,726 $ 17,160 $ 14,660
Interest cost on projected benefit obligation 33,577 31,060 26,409
Actual return on plan assets (115,805) (38,049) (68,659)
Net amortization and deferral 81,643 7,711 44,606
-------- -------- --------
Pension expense $ 16,141 $ 17,882 $ 17,016
======== ======== ========
</TABLE>
The funded status of the defined benefit plan, based on a September 30
valuation date, is as follows:
<TABLE>
<CAPTION>
1997 1996
-------- --------
In thousands
<S> <C> <C>
Present value of vested benefits $380,256 $326,185
-------- --------
Present value of accumulated benefits $428,444 $372,183
-------- --------
Plan assets at fair value $526,087 $405,000
Present value of projected benefits 473,940 411,295
-------- --------
Funded status 52,147 (6,295)
Unrecognized net (gain) loss (37,483) 12,387
Unrecognized net asset (3,068) (7,446)
Unrecognized prior service cost 16,117 18,208
-------- --------
Pension asset recorded in Other Assets $ 27,713 $ 16,854
======== ========
</TABLE>
<PAGE> 16
The projected benefit obligation was determined using an assumed discount rate
of 7.5% in 1997, 8.0% in 1996 and 7.8% in 1995. The assumption for compensation
increases was 4.5% in 1997 and 1996 and 5.0% in 1995, and the assumption for
return on plan assets was 8.8% in each year.
The Company sponsors an Employee Stock Ownership Plan (ESOP) as part of a
401(k) savings plan covering most domestic salaried employees. Contributions
made by the Company to the 401(k) plan are based on a specified percentage of
employee contributions. Cash contributions by the Company were $5.7 million in
1997, $5.5 million in 1996 and $5.8 million in 1995. Plan expense was $5.5
million in 1997, $5.7 million in 1996 and $6.2 million in 1995, after giving
effect to tax-deductible dividends on the Series B Preferred Stock of $3.8
million in 1997, $4.0 million in 1996 and $4.1 million in 1995.
The Company sponsors other savings and retirement plans for certain domestic
and foreign employees. Expense for these plans totaled $9.1 million in 1997,
$9.6 million in 1996 and $13.3 million in 1995.
NOTE J - CAPITAL
Common shares outstanding are net of shares held in treasury of 13,910,519 in
1997, 4,798,646 in 1996 and 2,753,952 in 1995. During 1995, 2,700,000
treasury shares were retired.
There are 25,000,000 authorized shares of Preferred Stock, $1 par value. As of
January 3, 1998, 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 1,824,820 shares of Series B Preferred Stock outstanding at January
3, 1998, 1,881,515 outstanding at January 4, 1997 and 1,964,942 shares
outstanding at December 30, 1995, 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, 15% or more of the Common Stock. Once
exercisable, each right will entitle its holder to buy 1/100 share of Series A
Preferred Stock for $175. If the Company is involved in a merger or other
business combination or an outside party acquires 15% 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. The rights, which
expire in January 2008, may be redeemed at $.01 per right prior to their
becoming exercisable.
<PAGE> 17
NOTE K - REDEEMABLE PREFERRED STOCK
Each share of Series B Preferred Stock has a redemption value of $30.88 plus
cumulative accrued dividends, is convertible into 1.6 shares of Common Stock
and is entitled to two votes 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 Company 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 Company that bears interest at 9.80% and is payable in
increasing installments through 2002. Interest related to this loan was $3.9
million in 1997, $4.4 million in 1996 and $4.9 million in 1995. Principal and
interest obligations on the loan are satisfied as the Company 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.
NOTE L - STOCK OPTIONS
The Company has granted nonqualified stock options to officers, directors and
key employees under a stock compensation plan 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.
Activity in the stock compensation plan is summarized as follows:
<TABLE>
<CAPTION>
SHARES WEIGHTED
UNDER AVERAGE
OPTIONS EXERCISE PRICE
----------- ---------------
<S> <C> <C>
Balance December 31, 1994 9,478,976 $22.84
Options granted 2,177,550 26.00
Options exercised (1,985,420) 18.21
Options canceled (147,008) 25.41
--------- ------
Balance December 30, 1995 9,524,098 24.49
Options granted 1,965,400 34.49
Options exercised (2,982,576) 22.87
Options canceled (342,450) 24.86
--------- ------
Balance January 4, 1997 8,164,472 26.21
Options exercised (2,521,346) 25.78
Options canceled (131,510) 29.88
--------- ------
Balance January 3, 1998 5,511,616 $28.21
=========
</TABLE>
<PAGE> 18
Stock options outstanding at January 3, 1998, all of which are exercisable, are
summarized as follows:
<TABLE>
<CAPTION>
RANGE OF WEIGHTED AVERAGE WEIGHTED
EXERCISE NUMBER REMAINING AVERAGE
PRICES OUTSTANDING CONTRACTUAL LIFE EXERCISE PRICE
- ------------- ----------------- -------------------- -------------------
<S> <C> <C> <C>
$ 6-10 28,800 2.9 years $ 8.09
11-15 41,400 .9 years 14.06
16-20 223,430 3.4 years 17.62
21-25 1,070,976 6.5 years 23.40
26-30 2,423,910 6.4 years 27.32
31-35 1,723,100 8.9 years 34.49
------ --------- --------- ------
$ 6-35 5,511,616 7.0 years $28.21
=========
</TABLE>
The Company does not recognize compensation expense for stock options granted
at fair market value, as permitted by the accounting standards. However, had
compensation expense been determined based on the fair value of the options on
the grant dates, the Company's net income would have been reduced by $9.0
million ($.07 per share) in 1997 and by $6.9 million ($.06 per share) in 1996.
Because options were granted late in the year, the pro forma expense for 1995
would not be meaningful and is therefore not presented.
The fair value of options granted during 1996 was $7.97 per share and of
options granted during 1995 was $5.49 per share. Fair value is estimated based
on the Black-Scholes option-pricing model with the following assumptions for
grants in 1996 and 1995: dividend yield of 2.5%; expected volatility of 20%;
risk-free interest rates of 6.5% in 1996 and 5.4% in 1995; and expected lives
of 5 years.
The Company has granted to key employees 29,030 shares of restricted stock that
vest in the year 2005. Compensation equal to the market value of shares at the
date of grant is amortized to expense over the vesting period.
There are 5,526,086 shares available for future grants of stock options and
restricted stock, of which no more than 1,181,476 may be grants of restricted
stock.
<PAGE> 19
NOTE M - SPECIAL CHARGES
During the fourth quarter of 1995, the Company recorded special charges
totaling $155.9 million ($.80 per share) to address changes in consumer buying
habits and the increasingly competitive retail environment that have occurred
in the apparel industry. These charges were aimed at reducing the Company's
overall cost structure, including both manufacturing and administrative costs,
through the closure of higher cost manufacturing facilities and personnel
reductions in administrative positions. In addition, included in the charges
were provisions related to better align inventories to existing retailer and
consumer requirements.
These actions affected approximately 7,700 of the Company's employees in
manufacturing and headquarters locations throughout North America and Europe.
Charges related to personnel reductions, including severance and related
benefits, totaled $46.9 million. The remaining $109.0 million included noncash
charges of $59.9 million for asset write-offs for closed manufacturing
facilities and business and inventory realignments and $49.1 million for
expected cash charges for lease and other contract terminations. The special
charges were recorded in the 1995 consolidated statement of income as follows:
Cost of Products Sold - $109.8 million; Marketing, Administrative and General
Expenses - $41.7 million; Miscellaneous and Other Operating Expenses - $4.4
million. Substantially all of the actions have been completed, and costs
incurred, by the end of 1997.
NOTE N - INCOME TAXES
The provision for income taxes is computed based on the following amounts of
income before income taxes:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
In thousands
<S> <C> <C> <C>
Domestic $514,028 $433,959 $261,437
Foreign 71,852 74,449 22,698
-------- -------- --------
$585,880 $508,408 $284,135
======== ======== ========
</TABLE>
The provision for income taxes consists of:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
In thousands
<S> <C> <C> <C>
Current:
Federal $201,924 $179,217 $136,863
Foreign 46,466 43,493 32,535
State 19,553 15,894 11,299
-------- -------- --------
267,943 238,604 180,697
Deferred, primarily federal (33,005) (29,720) (53,853)
-------- -------- --------
$234,938 $208,884 $126,844
======== ======== ========
</TABLE>
<PAGE> 20
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:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
In thousands
<S> <C> <C> <C>
Tax at federal statutory rate $205,058 $177,943 $ 99,448
State income taxes, net of federal tax benefit 12,709 10,331 7,344
Amortization of intangible assets 7,084 7,091 7,319
Foreign operating losses
with no current benefit 4,033 7,109 11,169
Other, net 6,054 6,410 1,564
-------- -------- --------
$234,938 $208,884 $126,844
======== ======== ========
</TABLE>
Deferred income tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>
1997 1996
-------- --------
In thousands
Deferred income tax assets:
<S> <C> <C>
Employee benefits $ 50,917 $ 42,582
Inventories 10,450 338
Other accrued expenses 95,841 93,922
Operating loss carryforwards 36,323 32,760
Foreign currency translation 19,444 -
-------- --------
212,975 169,602
Valuation allowance (32,506) (29,296)
-------- --------
$180,469 $140,306
-------- --------
Deferred income tax liabilities:
Depreciation $ 47,311 $ 58,848
Foreign currency translation - 3,461
Unremitted foreign earnings 4,142 6,735
Other 22,515 16,461
-------- --------
$ 73,968 $ 85,505
======== ========
</TABLE>
The Company has $84.6 million of foreign operating loss carryforwards expiring
at various dates; a valuation allowance has been provided where it is more
likely than not that the deferred tax assets relating to certain of those loss
carryforwards will not be realized. Income taxes paid were $230.1 million in
1997, $177.4 million in 1996 and $172.0 million in 1995. Interest Income
includes $10.5 million in 1997 and $2.6 million in 1996 relating to settlements
of tax examinations of acquired companies.
<PAGE> 21
NOTE O - OPERATIONS
The Company's principal business is designing, manufacturing and marketing high
quality branded jeanswear, intimate apparel, knitwear, children's playwear and
other apparel. The Company's customers are primarily department, discount and
specialty stores throughout the world. One domestic discount store group
comprises 11.1% of consolidated sales in 1997, 10.3% in 1996 and 10.5% in 1995.
Sales and profit by geographic area are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
In thousands
<S> <C> <C> <C>
Net sales:
United States $4,368,474 $4,203,675 $4,192,435
Foreign 853,772 933,503 869,864
---------- ---------- ----------
$5,222,246 $5,137,178 $5,062,299
---------- ---------- ----------
Operating income:
United States $ 531,583 $ 481,684 $ 328,878
Foreign 117,493 111,064 59,173
---------- ---------- ----------
649,076 592,748 388,051
Corporate expenses (44,003) (35,465) (40,661)
Interest, net (25,877) (49,387) (66,217)
Miscellaneous, net 6,684 512 2,962
---------- ---------- ----------
Income before income taxes $ 585,880 $ 508,408 $ 284,135
========== ========== ==========
Identifiable assets:
United States $2,556,809 $2,546,162 $2,672,864
Foreign 606,321 646,410 684,426
Corporate 159,652 256,963 89,781
---------- ---------- ----------
$3,322,782 $3,449,535 $3,447,071
========== ========== ==========
</TABLE>
Foreign operations are conducted primarily in Europe. Foreign operations
located elsewhere are not significant. Corporate assets consist primarily of
cash and cash equivalents. The 1995 special charges (Note M) were incurred as
follows: United States - $127.1 million; Foreign - $22.9 million; Corporate -
$2.9 million; Miscellaneous - $3.0 million.
Worldwide sales by product category are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
In thousands
<S> <C> <C> <C>
Jeanswear $2,888,967 $2,885,232 $2,792,532
Intimate apparel 648,937 650,197 729,149
Knitwear 614,798 601,303 582,398
Other 1,069,544 1,000,446 958,220
---------- ---------- ----------
$5,222,246 $5,137,178 $5,062,299
========== ========== ==========
</TABLE>
<PAGE> 22
NOTE P - LEASES
The Company leases certain facilities and equipment under noncancelable
operating leases. Rental expense was $66.2 million in 1997, $67.0 million in
1996 and $70.4 million in 1995. Future minimum lease payments are $48.1
million, $38.9 million, $31.1 million, $25.0 million and $17.5 million for the
years 1998 through 2002 and $40.5 million thereafter.
NOTE Q - EARNINGS PER SHARE
Earnings per share amounts have been restated in accordance with Statement of
Financial Accounting Standards No. 128, Earnings per Share. This restatement
resulted in no material change from amounts previously reported. Earnings per
share are computed as follow:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
In thousands, except per share amounts
<S> <C> <C> <C>
Basic earnings per share:
Net income $350,942 $299,524 $157,291
Less Preferred Stock dividends
and redemption premium 5,003 4,363 3,683
-------- -------- --------
Net income available for Common Stock $345,939 $295,161 $153,608
======== ======== ========
Weighted average Common Stock outstanding 125,504 127,292 127,486
Basic earnings per share $ 2.76 $ 2.32 $ 1.20
======== ======== ========
Diluted earnings per share:
Net income $350,942 $299,524 $157,291
Increased ESOP expense if Preferred Stock
were converted to Common Stock 1,227 1,318 1,430
-------- -------- --------
Net income available for Common Stock
and dilutive securities $349,715 $298,206 $155,861
======== ======== ========
Weighted average Common Stock outstanding 125,504 127,292 127,486
Additional common shares resulting from dilutive securities:
Preferred Stock 2,955 3,056 3,172
Stock options 1,261 730 558
-------- -------- --------
Weighted average Common Stock and dilutive securities
outstanding 129,720 131,078 131,216
======== ======== ========
Diluted earnings per share $ 2.70 $ 2.28 $ 1.19
======== ======== ========
</TABLE>
<PAGE> 23
NOTE R - FINANCIAL INSTRUMENTS
The carrying amount and fair value of financial instruments included in the
balance sheets are as follows:
<TABLE>
<CAPTION>
1997 1996
----------------------------------- --------------------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------------- -------------- ------------------- --------------
In thousands
<S> <C> <C> <C> <C>
Financial liabilities:
Short-term borrowings $ 24,191 $ 24,191 $ 17,528 $ 17,528
Long-term debt 516,226 543,976 519,058 537,698
Series B Preferred Stock 56,341 137,915 58,092 101,602
</TABLE>
The fair value of the Company's short-term and long-term debt is estimated
based on quoted market prices or values of comparable borrowings. The fair
value of the Series B Preferred Stock is based on a valuation by an independent
financial consulting firm.
The Company enters into short-term foreign currency forward exchange contracts
to manage exposures related to specific foreign currency transactions or
anticipated cash flows. Changes in the fair values of these contracts are
recognized currently in operating income. The amounts of the contracts, and
related gains and losses, are not material. In addition, the Company has
entered into an interest rate swap contract expiring in 1999 related to $100
million of the Company's long-term debt. Net cash flows of the swap contract
are included in Interest Expense. The fair value of these foreign currency and
swap financial instruments approximates their carrying value.
<PAGE> 24
<TABLE>
<CAPTION>
In thousands, except per share amounts 1997 1996 1995
--------------------------------------------------------
SUMMARY OF OPERATIONS
<S> <C> <C> <C>
Net sales $5,222,246 $5,137,178 $5,062,299
Cost of products sold 3,440,611 3,458,166 3,577,555
-------------------------------------------------------------------------------------------------------------------
Gross profit 1,781,635 1,679,012 1,484,744
Marketing, administrative and other 1,176,562 1,121,729 1,137,354
-------------------------------------------------------------------------------------------------------------------
Operating income 605,073 557,283 347,390
Interest, net (25,877) (49,387) (66,217)
Miscellaneous, net 6,684 512 2,962
-------------------------------------------------------------------------------------------------------------------
Income before income taxes 585,880 508,408 284,135
Income taxes 234,938 208,884 126,844
-------------------------------------------------------------------------------------------------------------------
Net income $ 350,942 $ 299,524 $ 157,291
-------------------------------------------------------------------------------------------------------------------
Per share of Common Stock 1
Earnings - basic $ 2.76 $ 2.32 $ 1.20
Earnings - diluted 2.7 2.28 1.19
Dividends .77 .73 .69
Average number of common shares outstanding 125,504 127,292 127,486
Net income as % of average common shareholders' equity 18.2% 16.2% 8.8%
Net income as % of average total assets 10.1% 8.6% 4.4%
-------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Accounts receivable, net $ 587,934 $ 592,942 $ 629,506
Inventories 774,755 730,823 841,907
Total current assets 1,601,466 1,706,326 1,667,637
Property, plant and equipment, net 705,990 721,524 749,880
Total assets 3,322,782 3,449,535 3,447,071
Total current liabilities 765,908 766,267 868,320
Long-term debt 516,226 519,058 614,217
Common shareholders' equity 1,866,769 1,973,739 1,771,506
-------------------------------------------------------------------------------------------------------------------
OTHER STATISTICS
Working capital $ 835,558 $ 940,059 $ 799,317
Current ratio 2.1 2.2 1.9
Debt to capital ratio 2 22.5% 21.4% 32.3%
Dividends $ 100,141 $ 97,036 $ 92,038
Purchase of Common Stock 391,651 61,483 86,251
Cash provided by operations 454,661 711,454 323,656
Capital expenditures (excluding acquisitions) 154,262 138,747 155,206
Depreciation and amortization 156,252 160,578 167,721
-------------------------------------------------------------------------------------------------------------------
MARKET DATA
Market price range 1 $48 1/4-32 1/4 $34 15/16-23 13/16 $28 9/16-23 3/8
Book value per common share 1 15.4 15.44 13.96
Price earnings ratio -- high-low 17.5 - 11.7 15.1 - 10.3 23.8 - 19.5
Rate of payout 3 27.9% 31.5% 57.5%
-------------------------------------------------------------------------------------------------------------------
<CAPTION>
In thousands, except per share amounts 1994 1993
---------------------------------
SUMMARY OF OPERATIONS
<S> <C> <C>
Net sales $4,971,713 $4,320,404
Cost of products sold 3,387,295 2,974,861
---------------------------------------------------------------------------------------------
Gross profit 1,584,418 1,345,543
Marketing, administrative and other 1,053,912 911,063
---------------------------------------------------------------------------------------------
Operating income 530,506 434,480
Interest, net (70,984) (37,387)
Miscellaneous, net (3,861) 2,894
---------------------------------------------------------------------------------------------
Income before income taxes 455,661 399,987
Income taxes 181,125 153,572
---------------------------------------------------------------------------------------------
Net income $ 274,536 $ 246,415
---------------------------------------------------------------------------------------------
Per share of Common Stock 1
Earnings - basic $ 2.10 $ 1.90
Earnings - diluted 2.05 1.85
Dividends .65 .61
Average number of common shares outstanding 129,240 128,022
Net income as % of average common shareholders' equity 16.8% 16.9%
Net income as % of average total assets 7.9% 8.5%
---------------------------------------------------------------------------------------------
FINANCIAL POSITION
Accounts receivable, net $ 613,337 $ 511,887
Inventories 801,338 778,767
Total current assets 1,551,166 1,500,180
Property, plant and equipment, net 767,011 712,759
Total assets 3,335,608 2,877,348
Total current liabilities 912,332 659,848
Long-term debt 516,700 527,573
Common shareholders' equity 1,734,009 1,547,400
---------------------------------------------------------------------------------------------
OTHER STATISTICS
Working capital $ 638,834 $ 840,332
Current ratio 1.7 2.3
Debt to capital ratio 2 32.7% 30.3%
Dividends $ 88,223 $ 82,831
Purchase of Common Stock 27,878 -
Cash provided by operations 479,401 293,751
Capital expenditures (excluding acquisitions) 132,908 209,494
Depreciation and amortization 158,511 125,765
---------------------------------------------------------------------------------------------
MARKET DATA
Market price range 1 $26 7/8-22 1/8 $28 1/4-19 3/4
Book value per common share 1 13.51 12
Price earnings ratio -- high-low 12.8 - 10.5 14.9 - 10.4
Rate of payout 3 31.0% 32.1%
----------------------------------------------------------------------------------------------
</TABLE>
(1) Per share computations and market price ranges have been adjusted to
reflect a two-for-one stock split in November 1997.
(2) Capital is defined as common shareholders' equity plus short-term and
long-term debt.
(3) Dividends per share divided by earnings per share.
<PAGE> 25
QUARTERLY COMMON STOCK PRICE INFORMATION
The high and low sales prices for the periods indicated were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
__________________________________________________________________________
High Low High Low High Low
__________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
First quarter $3511/16 $ 321/2 $ 283/8 $2313/16 $ 269/16 $239/16
Second quarter 435/8 321/4 3111/16 267/8 267/8 251/4
Third quarter 481/4 429/16 313/16 261/4 289/16 24
Fourth quarter 473/16 4111/16 3415/16 291/2 2613/16 233/8
__________________________________________________________________________
</TABLE>
<PAGE> 26
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Shareholders
VF Corporation
We have audited the accompanying consolidated balance sheets of VF Corporation
as of January 3, 1998 and January 4, 1997, 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 3, 1998. These financial
statements are the responsibility of the Company'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 as
of January 3, 1998 and January 4, 1997, and the consolidated results of their
operations and their cash flows for each of the three fiscal years in the
period ended January 3, 1998 in conformity with generally accepted accounting
principles.
Philadelphia, Pennsylvania
February 5, 1998
<PAGE> 27
QUARTERLY COMMON STOCK PRICE INFORMATION
The high and low sales prices for the periods indicated were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
-----------------------------------------------------------------------------------------------------------
High Low High Low High Low
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First quarter $35 11/16 $32 1/2 $28 3/8 $23 13/16 $26 9/16 $23 9/16
Second quarter 43 5/8 32 1/4 31 11/16 26 7/8 26 7/8 25 1/4
Third quarter 48 1/4 42 9/16 31 3/16 26 1/4 28 9/16 24
Fourth quarter 47 3/16 41 11/16 34 15/16 29 1/2 26 13/16 23 3/8
-----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 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:
<TABLE>
<CAPTION>
Name Jurisdiction of Organization
- --------------------------------------- ---------------------------------------
<S> <C>
Bassett-Walker Apparel Corp. Delaware
H.H. Cutler Company Michigan
Healthtex, Inc. Delaware
Healthtex Apparel Corp. Delaware
JanSport, Inc. Delaware
JanSport Apparel Corp. Delaware
Jantzen Inc. Nevada
Jantzen Apparel Corp. Delaware
The H. D. Lee Company, Inc. Delaware
Les Dessous Boutique Diffusion S.A. France
Red Kap Industries, Inc. Delaware
Red Kap Apparel Corp. Delaware
VF Europe N.V. Belgium
VF Factory Outlet, Inc. Delaware
VF Diffusion, S.A.R.L. France
VF Germany Textil-Handels GmbH Germany
VF Jeanswear, Inc. Alabama
VF Knitwear, Inc. Virginia
VF Knitwear Industries, Inc. Delaware
VF Lingerie S.A. France
VF Northern Europe Ltd. United Kingdom
VF Polska Sp. zo.o. Poland
Vanity Fair, Inc. Delaware
Vanity Fair Intimates, Inc. Alabama
Vives Vidal, Vivesa, S.A. Spain
Wrangler Apparel Corp. Delaware
Wrangler Clothing Corp. Delaware
Wrangler Italia, S.r.l. Italy
Wrangler Scandinavia (Apparel) A/S Denmark
</TABLE>
Excludes subsidiaries which, if considered as a single subsidiary or after
taking into account the elimination of intercompany accounts, would not
constitute a significant subsidiary at January 3, 1998.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS FOR FORM 10-K
We hereby 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 Form S-8/S-3, and Post-Effective
Amendment No. 6 to Registration Statement No. 2-85579 on Form 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. 33-10491 on Form S-3; (4) Registration Statement No.
33-41241 on Form S-8; (5) Registration Statement No. 33-53231 on Form S-3; and
(6) Registration Statement No. 33-55014 on Form S-8 of our report dated
February 5, 1998 on our audits of the consolidated financial statements of VF
Corporation as of January 3, 1998 and January 4, 1997, and for the three fiscal
years in the period ended January 3, 1998, appearing on page 33 of the 1997
Annual Report of Shareholders, which is incorporated by reference in
this Annual Report on Form 10-K. We also consent to the incorporation by
reference of our report on the consolidated financial statement schedule, which
appears on page 19 of this Form 10-K.
/s/ Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
March 30, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS FOR FORM 11-K
We hereby 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 Form S-8/S-3, and Post-Effective
Amendment No. 6 to Registration Statement No. 2-85579 on Form 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, of our report
dated March 20, 1998 on our audits of the financial statements of the VF
Corporation Tax-Advantaged Savings Plan for Salaried Employees as of December
31, 1997 and December 31, 1996 and for the three years in the period ended
December 31, 1997 included in the Form 11-K, which is filed as Exhibit 99(A) to
this Form 10-K.
/s/Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
March 30, 1998
<PAGE> 1
Exhibit 23.2
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
Board of Directors and Shareholders
VF Corporation
Our report on the 1997 consolidated financial statements of VF Corporation has
been incorporated by reference in this Form 10-K from page 33 of the 1997
Annual Report to Shareholders of VF Corporation. In connection with our audits
of such consolidated financial statements, we have also audited the related
consolidated financial statement schedule listed in Item 14(a)2 on page 13 of
this Form 10-K.
In our opinion, the consolidated financial statement schedule referred to
above, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information required to be included therein.
/s/ Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
February 5, 1998
<PAGE> 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, C.S. Cummings 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 3, 1998.
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Power of Attorney this 10th day of February, 1998.
<TABLE>
<S> <C>
ATTEST: V.F. CORPORATION
/s/ C. S. Cummings By: /s/ Mackey J. McDonald
- ------------------------------------------- -----------------------------------------
C. S. Cummings Mackey J. McDonald, President and Chief
Secretary Executive Officer
Principal Executive Officer: Principal Financial Officer:
/s/ Mackey J. McDonald /s/ G. G. Johnson
- -------------------------------------------- -----------------------------------------
Mackey J. McDonald, President, G. G. Johnson, Vice President-Finance
Chief Executive Officer and Director and Chief Financial Officer
Principal Accounting Officer:
/s/ R. K. Shearer
- --------------------------------------------
R. K. Shearer, Vice President - Controller
/s/ Robert D. Buzzell /s/ Edward E. Crutchfield
- -------------------------------------------- -----------------------------------------
Robert D. Buzzell, Director Edward E. Crutchfield, Director
/s/ Ursula F. Fairbairn /s/ Barbara S. Feigin
- -------------------------------------------- -----------------------------------------
Ursula F. Fairbairn, Director Barbara S. Feigin, Director
/s/ George Fellows /s/ Leon C. Holt, Jr.
- ------------------------------------------- -----------------------------------------
G. Fellows, Director Leon C. Holt, Jr., Director
/s/ Robert J. Hurst /s/ L. R. Pugh
- ------------------------------------------- -----------------------------------------
Robert J. Hurst, Director L. R. Pugh, Director
/s/ William E. Pike /s/ L. Dudley Walker
- ------------------------------------------- -----------------------------------------
William E. Pike, Director L. Dudley Walker, Director
/s /M. Rust Sharp
- -------------------------------------------
M. Rust Sharp, Director
</TABLE>
<PAGE> 1
VF CORPORATION
1997 10-K
EXHIBIT 99 - ADDITIONAL EXHIBITS:
(A) FORM 11-K FOR VF CORPORATION TAX-ADVANTAGE SAVINGS PLAN
FOR SALARIED EMPLOYEES FOR THE YEAR ENDED DECEMBER 31,
1997
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission file number: 1-5256
-----------------------------
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
(Full title of plan)
1047 NORTH PARK ROAD
WYOMISSING, PA 19610
(Address of principal executive offices)
(610) 378-1151
(Registrant's telephone number, including area code)
1
<PAGE> 3
Item 1. Changes in the Plan
There were no changes in the Plan.
Item 2. Changes in Investment Policy
There were no changes in investment policy.
Item 3. Contributions Under the Plan
Contributions made by VF Corporation (the Corporation) are measured by
reference to the employees' contributions and are not discretionary.
Item 4. Participating Employees
There were approximately 6,127 enrolled participants in the Plan as of December
31, 1997, out of approximately 7,205 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: Candace Cummings, Vice President - Administration,
General Counsel & Secretary; Frank C. Pickard III, Vice President
Treasurer; and Louis J. Fecile, Vice President - Employee Benefits.
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. 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 UMB
Bank, n.a., 10th and Grand, P.O. Box 419692, Kansas City, MO
64141-6692, has been appointed as Trustee under the Plan. Under the
terms of the Trustee Agreement, UMB Bank, n.a., holds and invests
all assets of the Plan, subject to the direction of each of the
participants of the Plan regarding the investment 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.
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 of investments 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 VF Corporation Series B
Preferred Stock (ESOP Preferred Stock), and the fair values based on the
preferred stock's stated redemption price of $30.875 per share or 160% of the
market value of the Corporation's Common Stock, whichever is greater.
2
<PAGE> 4
Item 8. Investment of Funds
Each participant by calling the VF Savings Line directs the Plan Administrator
to notify the Trustee to invest his/her own contributions in one or more of the
following funds:
- Money Market Fund
- Fixed Income Fund
- Balanced Fund
- Equity Growth & Income Fund
- Equity Growth Fund
- Foreign Fund
- VF Corporation Common Stock Fund (investing in common stock of the
Corporation)
Brokerage commissions of $4,233, $3,878, and $8,909 for the years ended
December 31, 1997, 1996 and 1995 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 principal and debt
service on a loan from the Corporation.
Item 9. Financial Statements and Exhibits
<TABLE>
<S> <C>
(a) Financial Statements Page No.
Report of Independent Accountants 5
Statements of Net Assets Available for Benefits with Fund Information -
December 31, 1997 and 1996
- Combined Plan 6
- Money Market Fund and Fixed Income Fund 7
- Balanced Fund and Equity Growth & Income Fund 8
- Equity Growth Fund and Foreign Fund 9
- VF Corporation Common Stock Fund and 10
Employee Stock Ownership Plan
- Loan Fund 11
Statements of Changes in Net Assets Available for Benefits For the
Years Ended December 31, 1997, 1996 and 1995
- Combined Plan 12
- Money Market Fund 13
- Fixed Income Fund 14
- Balanced Fund 15
- Equity Growth & Income Fund 16
- Equity Growth Fund 17
- Foreign Fund 18
- VF Corporation Common Stock Fund 19
- Employee Stock Ownership Plan 20
- Loan Fund 21
Notes to Financial Statements 22
</TABLE>
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
3
<PAGE> 5
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/ Louis J. Fecile
------------------------------------------
Louis J. Fecile
Vice President - Employee Benefits
Date: March 20, 1998
4
<PAGE> 6
Report of Independent Accountants
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, 1997 and December 31, 1996, and the related
statements of changes in net assets available for benefits for the three years
in the period ended December 31, 1997. 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,
1997 and December 31, 1996, and the changes in its net assets available for
benefits for the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the statements
of net assets available for benefits and in the statements of changes in net
assets available for benefits is presented for purposes of additional analysis
rather than to present the net assets available for benefits and changes in net
assets available for benefits of each fund. The fund information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
March 20, 1998
5
<PAGE> 7
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
COMBINED PLAN
<TABLE>
<CAPTION>
December 31
--------------------------------
ASSETS 1997 1996
- ------ ---- ----
<S> <C> <C>
Investments, at fair value
VF Corporation Common Stock -
721,661 shares in 1997
326,618 shares in 1996 $ 33,557,236 $ 22,046,715
VF Corporation ESOP Preferred Stock -
1,824,820 shares in 1997
1,881,515 shares in 1996 135,766,589 101,601,810
United States government obligations 17,022,422 16,991,039
Other securities 116,344,929 90,076,616
------------- -------------
Total investments 302,691,176 230,716,180
Dividends and interest receivable 310,461 312,017
Loans receivable from participants 10,246,359 9,374,718
------------- -------------
TOTAL ASSETS 313,247,996 240,402,915
------------- -------------
LIABILITIES
Employee Stock Ownership
Plan obligation - payable to VF Corporation 35,916,035 41,563,481
------------- -------------
TOTAL LIABILITIES 35,916,035 41,563,481
------------- -------------
Net assets available for benefits $277,331,961 $198,839,434
============= =============
</TABLE>
See notes to financial statements.
6
<PAGE> 8
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
MONEY MARKET FUND AND FIXED INCOME FUND
<TABLE>
<CAPTION>
Money Market Fund Fixed Income Fund
December 31 December 31
----------------------------- -------------------------------
ASSETS 1997 1996 1997 1996
- ------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments, at fair value
United States government obligations $ 0 $ 0 $17,022,422 $16,991,039
Other securities 7,852,439 6,629,950 3,094,667 2,250,229
------------ ------------ ------------- -------------
Total investments 7,852,439 6,629,950 20,117,089 19,241,268
Dividends and interest receivable 399 180 304,518 307,497
------------ ------------ ------------- -------------
Net assets available for benefits $7,852,838 $6,630,130 $20,421,607 $19,548,765
============ ============ ============= =============
</TABLE>
See notes to financial statements.
7
<PAGE> 9
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
BALANCED FUND AND EQUITY GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Balanced Fund Equity Growth & Income Fund
December 31 December 31
-------------------------------- --------------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
ASSETS
Investments, at fair value
Other securities $10,113,221 $7,045,986 $58,738,770 $44,337,501
------------- ------------ ------------- -------------
Total investments 10,113,221 7,045,986 58,738,770 44,337,501
Dividends and interest receivable 488 181 543 378
------------- ------------ ------------- -------------
Net assets available for benefits $10,113,709 $7,046,167 $58,739,313 $44,337,879
============= ============ ============= =============
</TABLE>
See notes to financial statements.
8
<PAGE> 10
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EQUITY GROWTH FUND & FOREIGN FUND
<TABLE>
<CAPTION>
Equity Growth Fund Foreign Fund
December 31 December 31
------------------------------- ------------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
ASSETS
Investments, at fair value
Other securities $29,911,441 $24,163,579 $6,260,312 $5,329,365
------------- ------------- ------------ ------------
Total investments 29,911,441 24,163,579 6,260,312 5,329,365
Dividends and interest receivable 399 382 348 124
------------- ------------- ------------ ------------
Net assets available for benefits $29,911,840 $24,163,961 $6,260,660 $5,329,489
============= ============= ============ ============
</TABLE>
See notes to financial statements.
9
<PAGE> 11
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
VF CORPORATION COMMON STOCK FUND AND EMPLOYEE STOCK OWNERSHIP PLAN
<TABLE>
<CAPTION>
VF Corporation Common Stock Fund Employee Stock Ownership Plan
December 31 December 31
----------------------------- --------------------------------
ASSETS 1997 1996 1997 1996
- ------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments, at fair value
VF Corporation Common Stock
721,661 shares in 1997
326,616 shares in 1996 $33,557,236 $22,046,715 $ 0 $ 0
VF Corporation ESOP
Preferred Stock
1,824,820 shares in 1997
1,881,515 shares in 1996 0 0 135,766,589 101,601,810
Other securities 223,111 240,255 150,968 79,751
------------- ------------- -------------- --------------
Total investments 33,780,347 22,286,970 135,917,557 101,681,561
Dividends and interest receivable 1,282 454 2,484 2821
------------- ------------- -------------- --------------
TOTAL ASSETS $33,781,629 $22,287,424 $135,920,041 $101,684,382
------------- ------------- -------------- --------------
LIABILITIES
Employee Stock Ownership
Plan obligation - payable to VF Corporation 0 0 35,916,035 41,563,481
------------- ------------- -------------- --------------
TOTAL LIABILITIES 0 0 35,916,035 41,563,481
------------- ------------- -------------- --------------
Net assets available for benefits $33,781,629 $22,287,424 $100,004,006 $ 60,120,901
============= ============= ============== ==============
</TABLE>
See notes to financial statements.
10
<PAGE> 12
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
LOAN FUND
<TABLE>
<CAPTION>
Loan Fund
December 31
------------------------------
1997 1996
---- ----
<S> <C> <C>
ASSETS
Loans receivable from participants 10,246,359 9,374,718
------------- ------------
Net assets available for benefits $10,246,359 $9,374,718
============= ============
</TABLE>
See notes to financial statements.
11
<PAGE> 13
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
COMBINED PLAN
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on VF Corporation Common Stock $ 525,813 $ 469,018 $ 538,867
Dividends on ESOP Preferred Stock 3,847,891 3,971,574 4,131,256
Interest 1,232,836 1,234,816 1,255,562
Income from mutual funds and
bank common trust funds 6,786,224 4,639,609 3,693,225
-------------- -------------- --------------
12,392,764 10,315,017 9,618,910
-------------- -------------- --------------
Contributions
Interest on loan repayments 710,447 637,885 548,512
Participants 15,431,933 14,670,636 14,883,216
VF Corporation 5,665,204 5,527,985 5,762,864
-------------- -------------- --------------
21,807,584 20,836,506 21,194,592
-------------- -------------- --------------
Withdrawals (14,085,336) (16,191,145) (6,901,351)
Forfeitures that reduce
VF Corporation contributions (218,609) (301,873) (255,310)
Interest paid to VF Corporation on Employee
Stock Ownership Plan obligation (3,865,833) (4,386,805) (4,878,310)
Expenses 0 0 (53,764)
Net realized and unrealized appreciation
in fair value of investments 62,461,957 34,081,179 20,147,532
-------------- -------------- --------------
Net increase 78,492,527 44,352,879 38,872,299
Net assets available for benefits
at beginning of year 198,839,434 154,486,555 115,614,256
-------------- -------------- --------------
Net assets available for benefits
at end of year $277,331,961 $198,839,434 $154,486,555
============== ============== ==============
</TABLE>
See notes to financial statements.
12
<PAGE> 14
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
MONEY MARKET FUND
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 399,938 $ 313,675 $ 338,605
------------ ------------ -------------
399,938 313,675 338,605
------------ ------------ -------------
Contributions
Interest on loan repayments 0 0 49,368
Participants 1,906,211 1,537,425 1,146,077
------------ ------------ -------------
1,906,211 1,537,425 1,195,445
------------ ------------ -------------
Withdrawals (653,789) (991,225) (373,362)
Forfeitures that reduce
VF Corporation contributions 0 (9) (579)
Fund transfers, net (429,652) (449,011) (396,856)
------------ ------------ -------------
Net increase 1,222,708 410,855 763,253
Net assets available for benefits
Beginning of year, as reported 6,630,130 7,642,943 6,879,690
Reclassify loan balances to separate fund 0 (1,423,668) 0
------------ ------------ -------------
Beginning of year, as adjusted 6,630,130 6,219,275 6,879,690
------------ ------------ -------------
End of year $7,852,838 $6,630,130 $ 7,642,943
============ ============ =============
</TABLE>
See notes to financial statements.
13
<PAGE> 15
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
FIXED INCOME FUND
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Interest $ 1,232,836 $ 1,234,816 $ 1,255,562
Income from mutual funds and
bank common trust funds 120,111 42,437 41,620
------------- ------------- -------------
1,352,947 1,277,253 1,297,182
------------- ------------- -------------
Contributions
Interest on loan repayments 0 0 96,211
Participants 1,889,960 2,109,713 2,700,460
------------- ------------- -------------
1,889,960 2,109,713 2,796,671
------------- ------------- -------------
Withdrawals (1,785,929) (2,565,214) (1,402,288)
Forfeitures that reduce
VF Corporation contributions 0 (11) (706)
Net realized and unrealized appreciation
(depreciation) in fair value of investments 43,040 (109,871) 191,476
Fund transfers, net (627,176) 30,008 (571,686)
------------- ------------- -------------
Net increase 872,842 741,878 2,310,649
Net assets available for benefits
Beginning of year, as reported 19,548,765 20,437,850 18,127,201
Reclassify loan balances to separate fund 0 (1,630,963) 0
------------- ------------- -------------
Beginning of year, as adjusted 19,548,765 18,806,887 18,127,201
------------- ------------- -------------
End of year $20,421,607 $19,548,765 $20,437,850
============= ============= =============
</TABLE>
See notes to financial statements.
14
<PAGE> 16
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
BALANCED FUND
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 784,198 $ 721,016 $ 141,331
------------- ------------ --------------
784,198 721,016 141,331
------------- ------------ --------------
Contributions
Interest on loan repayments 0 0 7,685
Participants 918,520 703,667 226,246
------------- ------------ --------------
918,520 703,667 233,931
------------- ------------ --------------
Withdrawals (444,470) (317,576) (40,993)
Forfeitures that reduce
VF Corporation contributions 0 (238) 0
Net realized and unrealized appreciation
in fair value of investments 942,971 70,842 90,964
Fund transfers, net 866,323 1,936,006 3,560,514
------------- ------------ --------------
Net increase 3,067,542 3,113,717 3,985,747
Net assets available for benefits
Beginning of year, as reported 7,046,167 3,985,747 0
Reclassify loan balances to separate fund 0 (53,297) 0
------------- ------------ --------------
Beginning of year, as adjusted 7,046,167 3,932,450 0
------------- ------------ --------------
End of year $10,113,709 $7,046,167 $ 3,985,747
============= ============ ==============
</TABLE>
See notes to financial statements.
15
<PAGE> 17
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EQUITY GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 2,717,905 $ 2,148,023 $ 1,688,047
------------- ------------- --------------
2,717,905 2,148,023 1,688,047
------------- ------------- --------------
Contributions
Interest on loan repayments 0 0 154,780
Participants 4,556,161 4,131,053 4,215,860
------------- ------------- --------------
4,556,161 4,131,053 4,370,640
------------- ------------- --------------
Withdrawals (3,171,577) (3,484,495) (1,378,118)
Forfeitures that reduce
VF Corporation contributions 0 (391) (1,272)
Net realized and unrealized appreciation
(depreciation) in fair value of investments 10,862,416 5,037,526 7,296,660
Fund transfers, net (563,471) 1,525,815 (1,485,754)
------------- ------------- --------------
Net increase 14,401,434 9,357,531 10,490,203
Net assets available for benefits
Beginning of year, as reported 44,337,879 37,437,759 26,947,556
Reclassify loan balances to separate fund 0 (2,457,411) 0
------------- ------------- --------------
Beginning of year, as adjusted 44,337,879 34,980,348 26,947,556
------------- ------------- --------------
End of year $58,739,313 $44,337,879 $ 37,437,759
============= ============= ==============
</TABLE>
See notes to financial statements.
16
<PAGE> 18
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EQUITY GROWTH FUND
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 1,952,775 $ 1,130,443 $ 1,353,455
------------- ------------- -------------
1,952,775 1,130,443 1,353,455
------------- ------------- -------------
Contributions
Interest on loan repayments 0 100,380
Participants 2,779,070 3,389,402 3,329,947
------------- ------------- -------------
2,779,070 3,389,402 3,430,327
------------- ------------- -------------
Withdrawals (1,866,067) (2,420,165) (1,087,899)
Forfeitures that reduce
VF Corporation contributions 0 (236) (1,444)
Net realized and unrealized appreciation
(depreciation) in fair value of investments 4,282,170 1,604,220 4,253,881
Fund transfers, net (1,400,069) (4,267,963) 1,794,722
------------- ------------- -------------
Net increase (decrease) 5,747,879 (564,299) 9,743,042
Net assets available for benefits
Beginning of year, as reported 24,163,961 25,722,536 15,979,494
Reclassify loan balances to separate fund 0 (994,276) 0
------------- ------------- -------------
Beginning of year, as adjusted 24,163,961 24,728,260 15,979,494
------------- ------------- -------------
End of year $29,911,840 $24,163,961 $25,722,536
============= ============= =============
</TABLE>
See notes to financial statements.
17
<PAGE> 19
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
FOREIGN FUND
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Income from mutual funds and
bank common trust funds $ 748,260 $ 257,147 $ 98,277
------------ ------------ ------------
748,260 257,147 98,277
------------ ------------ ------------
Contributions
Interest on loan repayments 0 0 5,537
Participants 788,136 504,049 165,453
------------ ------------ ------------
788,136 504,049 170,990
------------ ------------ ------------
Withdrawals (327,669) (217,661) (9,708)
Forfeitures that reduce
VF Corporation contributions 0 (234) 0
Net realized and unrealized appreciation
(depreciation) in fair value of investments (347,015) 428,766 (122,155)
Fund transfers, net 69,459 1,987,203 2,198,243
------------ ------------ ------------
Net increase 931,171 2,959,270 2,335,647
Net assets available for benefits
Beginning of year, as reported 5,329,489 2,335,647 0
Reclassify loan balances to separate fund 0 34,572 0
------------ ------------ ------------
Beginning of year, as adjusted 5,329,489 2,370,219 0
------------ ------------ ------------
End of year $6,260,660 $5,329,489 $2,335,647
============ ============ ============
</TABLE>
See notes to financial statements.
18
<PAGE> 20
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
VF CORPORATION COMMON STOCK FUND
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on VF Corporation
Common Stock $ 525,813 $ 469,018 $ 538,867
Income from mutual funds and
bank common trust funds 37,029 5,963 6,622
------------- ------------- --------------
562,842 474,981 545,489
------------- ------------- --------------
Contributions
Interest on loan repayments 0 0 134,551
Participants 2,593,875 2,295,327 3,099,173
------------- ------------- --------------
2,593,875 2,295,327 3,233,724
------------- ------------- --------------
Withdrawals (1,674,899) (1,888,739) (1,137,459)
Forfeitures that reduce
VF Corporation contributions 0 (143) (802)
Net realized and unrealized appreciation
in fair value of investments 8,601,707 4,701,766 1,635,363
Fund transfers, net 1,410,680 (1,573,213) (5,099,183)
------------- ------------- --------------
Net increase (decrease) 11,494,205 4,009,979 (822,868)
Net assets available for benefits
Beginning of year, as reported 22,287,424 20,458,033 21,280,901
Reclassify loan balances to separate fund 0 (2,180,588) 0
------------- ------------- --------------
Beginning of year, as adjusted 22,287,424 18,277,445 21,280,901
------------- ------------- --------------
End of year $33,781,629 $22,287,424 $ 20,458,033
============= ============= ==============
</TABLE>
See notes to financial statements.
19
<PAGE> 21
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
EMPLOYEE STOCK OWNERSHIP PLAN
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment income
Dividends on ESOP Preferred Stock $ 3,847,891 $ 3,971,574 $ 4,131,256
Income from mutual funds and
bank common trust funds 26,008 20,905 25,268
-------------- ------------- --------------
3,868,944 3,992,479 4,156,524
-------------- ------------- --------------
Contributions
VF Corporation 5,665,204 5,527,985 5,762,864
-------------- ------------- --------------
5,665,204 5,527,985 5,762,864
-------------- ------------- --------------
Withdrawals (3,648,224) (3,526,117) (1,471,524)
Forfeitures that reduce
VF Corporation contributions (218,609) (300,611) (250,507)
Expenses 0 0 (53,764)
Interest paid to VF Corporation on Employee Stock
Ownership Plan obligation (3,865,833) (4,386,805) (4,878,310)
Net realized and unrealized appreciation
in fair value of investments 38,076,668 22,347,930 6,801,343
-------------- ------------- --------------
Net increase 39,883,105 23,654,861 10,066,626
Net assets available for benefits
Beginning of year 60,120,901 36,466,040 26,399,414
-------------- ------------- --------------
End of year $100,004,006 $60,120,901 $ 36,466,040
============== ============= ==============
</TABLE>
See notes to financial statements.
20
<PAGE> 22
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (CONTINUED)
LOAN FUND
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------
1997 1996
---- ----
<S> <C> <C>
Contributions
Interest on loan repayments $ 710,447 $ 637,885
------------- ------------
710,447 637,885
------------- ------------
Withdrawals (512,712) (779,953)
Forfeitures that reduce
VF Corporation contributions 0 0
Expenses 0 0
Net realized and unrealized appreciation
in fair value of investments 0 0
Fund transfers, net 673,906 811,155
------------- ------------
Net increase 871,641 669,087
------------- ------------
Net assets available for benefits
Beginning of year, as reported 9,374,718 0
Reclassify loan balances to separate fund 0 8,705,631
------------- ------------
Beginning of year, as adjusted 9,374,718 8,705,631
------------- ------------
End of year $10,246,359 $9,374,718
============= ============
</TABLE>
See notes to financial statements.
21
<PAGE> 23
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
NOTE A -- DESCRIPTION OF THE PLAN
VF Corporation (the Corporation) sponsors 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 10% 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.
The Plan includes an Employee Stock Ownership Plan (ESOP). In 1990, 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 $30.875 plus cumulative
accrued dividends, is convertible into 1.6 shares of VF Corporation Common
Stock and is entitled to two votes. 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 into the ESOP, are
allocated to employees in shares of ESOP Preferred Stock. Of the shares of ESOP
Preferred Stock owned by the ESOP, 973,860 shares in 1997 and 854,856 shares in
1996 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 loan will be
repaid in increasing installments through 2002 from future minimum Corporation
matching contributions to the ESOP and dividends on the ESOP Preferred Stock.
The Corporation's minimum required matching contributions and dividends are
$8.9 million in 1998 and increases each year to $9.6 million over the following
three years.
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 investments
that provide a fixed rate of return.
(c) Balanced Fund: Monies are invested in investments to
obtain as much income as possible, consistent with the
preservation and conservation of capital.
(d) Equity Growth & Income Fund: Monies are invested in
investments that are currently paying dividends and/or
offer prospects for growth of capital and future
income, with emphasis on capital appreciation.
(e) Equity Growth Fund: Monies are primarily invested in
common stock, securities convertible into common stock
and debt securities, with emphasis on long-term growth
opportunities.
(f) Foreign Fund: Monies are invested in stocks and debt
obligations of companies and governments outside the
United States.
22
<PAGE> 24
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE A -- DESCRIPTION OF THE PLAN (Continued)
(g) VF Corporation Common Stock Fund: Monies are invested in
Common Stock of the Corporation purchased 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 Common Stock Fund.
Individual accounts are maintained for each participant; each account includes
the individual's contributions, Corporation matching contributions and
investment funds' earnings. Accounts 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 are used to reduce
VF Corporation's obligation to pay plan expenses.
Participants may borrow from their individual account. Participants 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
their account balance in the Money Market Fund and 75% of their account balance
of remaining funds, not to exceed 50% of the participant's total vested account
balance, but may not borrow from the Corporation matching portion. Payment in
full is required at termination of employment. There were 2,691 loans
outstanding at December 31, 1997.
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:
<TABLE>
<CAPTION>
Year Ended December 31
----------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Money Market Fund 2,949 2,862 2,805
Fixed Income Fund 3,393 3,731 4,308
Balanced Fund 1,687 1,393 1,035
Equity Growth & Income Fund 5,446 5,420 5,725
Equity Growth Fund 4,026 4,040 4,513
Foreign Fund 1,308 1,032 700
VF Corporation Common Stock Fund 4,377 4,146 4,553
Employee Stock Ownership Plan 7,075 7,077 7,461
</TABLE>
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.
23
<PAGE> 25
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE B -- SIGNIFICANT ACCOUNT 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 160% of the fair value of the Corporation's
Common Stock or the preferred stock's stated redemption price of $30.875 per
share. For commercial notes and United States government obligations, 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.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments, which
consists of the realized gains or losses and unrealized appreciation or
depreciation on those investments.
Administrative expenses consisting primarily of fees for legal, accounting and
other services are paid by the Corporation in accordance with the Plan
Agreement and are based on customary and reasonable rates for such services.
Payment of Benefits: Benefits are recorded when paid.
Use of Estimates: In preparing financial statements in accordance with
generally accepted accounting principles, management makes estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
NOTE C -- INCOME TAX STATUS
The Internal Revenue Service has issued a Favorable Determination Letter dated
January 16, 1996 stating that the Plan qualifies under the appropriate sections
of the Internal Revenue Code (IRC) and is, therefore, not subject to tax under
present income tax law. Once qualified, the Plan is required to operate in
conformity with the IRC to maintain its qualification. The Pension Plan
Committee is not aware of any action or series of events that have occurred
that might adversely affect the Plan's qualified status.
24
<PAGE> 26
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS
Net unrealized appreciation (depreciation) in fair value of investments
included in Plan equity includes the following:
<TABLE>
<CAPTION>
Net Unrealized
Appreciation (Depreciation) in
Fair Value for the Year Ended December 31
--------------------------------------------------
1997 1996 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Fair value as determined by quoted market
or stated redemption price:
VF Corporation Common Stock $ 8,278,471 $ 4,168,463 $ 52,620
ESOP Preferred Stock 37,226,323 22,201,877 6,484,308
Mutual funds and
bank common trust funds 14,189,381 6,121,697 11,083,328
-------------- -------------- --------------
59,694,175 32,492,037 17,620,256
Fair value as determined by
Plan trustee:
United States government
obligations 0 0 0
Commercial notes 41,354 (109,067) 191,467
Mutual funds and
bank common trust funds 0 0 0
-------------- -------------- --------------
41,354 (109,067) 191,467
-------------- -------------- --------------
$59,735,529 $32,382,970 $17,811,723
============== ============== ==============
<CAPTION>
Fair Value
at December 31
-------------------------------------------------
1997 1996 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Fair value as determined by quoted market
or stated redemption price:
VF Corporation Common Stock $ 33,557,236 $ 22,046,715 $ 17,961,692
ESOP Preferred Stock 135,766,589 101,601,810 82,920,550
Mutual funds and
bank common trust funds 112,283,636 86,921,008 71,875,357
--------------- --------------- ---------------
281,607,461 210,569,533 172,757,599
Fair value as determined by
Plan trustee:
United States government
obligations 17,022,422 16,991,039 17,329,048
Commercial notes 501,345 812,427 678,070
Mutual funds and
bank common trust funds 3,559,948 2,343,181 1,328,036
--------------- --------------- ---------------
21,083,715 20,146,647 19,335,154
--------------- --------------- ---------------
$302,691,176 $230,716,180 $192,092,753
=============== =============== ===============
</TABLE>
Unrealized appreciation in fair value of investments at December 31, 1997, 1996
and 1995 was $129,045,244, $70,620,796, and $39,182,641, respectively.
25
<PAGE> 27
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
Net realized appreciation (depreciation) in fair value of investments includes
the following:
<TABLE>
<CAPTION>
Year Ended December 31
1997 1996 1995
-------------- -------------- ---------------
<S> <C> <C> <C>
Aggregate proceeds $62,783,730 $62,417,960 $ 57,592,059
Aggregate cost 60,507,302 60,719,749 55,256,250
-------------- -------------- ---------------
Net realized gain $ 2,726,428 $ 1,698,209 $ 2,335,809
============== ============== ===============
</TABLE>
Of the net realized gain, $1,173,581, $679,356, and $1,690,513 related to
gains recognized on the sale of VF Common Stock and the redemption of VF
Preferred Stock for the years ended 1997, 1996 and 1995, respectively.
The fair value of individual investments that represent 5% or more of the
Plan's net assets at December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
ESOP Preferred Stock $135,766,589 $101,601,810
Fidelity Growth & Income Fund 58,657,037 44,076,501
Fidelity Magellan Fund 29,871,782 23,976,308
VF Corporation Common Stock 33,557,236 22,046,715
</TABLE>
26
<PAGE> 28
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTE TO FINANCIAL STATEMENTS (Continued)
NOTE D -- INVESTMENTS (Continued)
Investment held at December 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF SHARES
Name of Issuer and Title of Issue OR PRINCIPAL AMOUNT FAIR VALUE COST
- ---------------------------------- -------------------- ---------------- ----------------
<S> <C> <C> <C>
Securities of participating employer:
VF Corporation Common Stock 721,661 $ 33,557,236 $ 15,588,925
VF Corporation 6.75% Series B ESOP
Convertible Preferred Stock 1,824,820 135,766,589 56,341,317
---------------- ---------------
169,323,825 71,930,242
---------------- ---------------
United States Government Obligations:
Small Business Administration Loans:
(Rates of 5.20% to 8.83%,
maturities of 03/02/97 to 05/23/11) 15,978,300 15,977,952 15,955,145
F.M.H.A. loans (Rates of 6.475% to 9.875%
maturities 05/01/98 to 06/10/12) 1,053,018 1,044,470 1,044,470
---------------- ---------------
17,022,422 16,999,615
---------------- ---------------
Other Securities:
Mutual funds and bank common trust funds:
Kemper Money Market Fund 7,455,110 7,455,110 7,455,110
Fidelity Puritan Fund 519,196 10,062,009 8,983,673
Fidelity Growth & Income Fund 1,539,555 58,657,037 36,082,053
Fidelity Magellan Fund 313,549 29,871,782 21,791,547
Templeton Foreign Fund 626,904 6,237,697 6,348,920
UMB Bank Fund: Scout Prime - R 3,559,948 3,559,948 3,559,948
American Commercial Lines (Due 07/15/01) 106,000 106,000 106,803
Private Export Funding Corp. (Due 04/30/04) 162,500 168,773 159,021
Smith Enron Cogeneration LP (Due 12/15/06) 229,000 226,573 229,000
---------------- --------------
$302,691,176 $173,645,932
================ ==============
</TABLE>
27
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
1997 Annual Report and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> JAN-03-1998
<CASH> 124,094
<SECURITIES> 0
<RECEIVABLES> 627,510
<ALLOWANCES> 39,576
<INVENTORY> 774,755
<CURRENT-ASSETS> 1,601,466
<PP&E> 1,568,952
<DEPRECIATION> 862,962
<TOTAL-ASSETS> 3,322,782
<CURRENT-LIABILITIES> 765,908
<BONDS> 516,226
30,066
0
<COMMON> 121,225
<OTHER-SE> 1,745,544
<TOTAL-LIABILITY-AND-EQUITY> 3,322,782
<SALES> 5,222,246
<TOTAL-REVENUES> 5,222,246
<CGS> 3,440,611
<TOTAL-COSTS> 3,440,611
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,695
<INCOME-PRETAX> 585,880
<INCOME-TAX> 234,938
<INCOME-CONTINUING> 350,942
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 350,942
<EPS-PRIMARY> 2.76
<EPS-DILUTED> 2.70
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements included in Form 10-Q for April 5, 1997 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> APR-05-1997
<CASH> 219,745
<SECURITIES> 0
<RECEIVABLES> 724,422
<ALLOWANCES> 42,175
<INVENTORY> 743,187
<CURRENT-ASSETS> 1,760,929
<PP&E> 1,566,074
<DEPRECIATION> 840,467
<TOTAL-ASSETS> 3,514,447
<CURRENT-LIABILITIES> 802,806
<BONDS> 517,616
27,355
0
<COMMON> 64,010
<OTHER-SE> 1,938,412
<TOTAL-LIABILITY-AND-EQUITY> 3,514,447
<SALES> 1,262,781
<TOTAL-REVENUES> 1,262,781
<CGS> 844,944
<TOTAL-COSTS> 844,944
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,618
<INCOME-PRETAX> 117,960
<INCOME-TAX> 47,774
<INCOME-CONTINUING> 70,186
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,186
<EPS-PRIMARY> .54
<EPS-DILUTED> .53
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements included in Form 10-Q for July 5, 1997 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> JUL-05-1997
<CASH> 78,648
<SECURITIES> 0
<RECEIVABLES> 772,327
<ALLOWANCES> 41,234
<INVENTORY> 793,028
<CURRENT-ASSETS> 1,727,761
<PP&E> 1,591,767
<DEPRECIATION> 867,725
<TOTAL-ASSETS> 3,470,171
<CURRENT-LIABILITIES> 810,490
<BONDS> 516,733
28,288
0
<COMMON> 62,915
<OTHER-SE> 1,884,612
<TOTAL-LIABILITY-AND-EQUITY> 3,470,171
<SALES> 2,518,330
<TOTAL-REVENUES> 2,518,330
<CGS> 1,672,843
<TOTAL-COSTS> 1,672,843
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,161
<INCOME-PRETAX> 249,241
<INCOME-TAX> 100,151
<INCOME-CONTINUING> 149,090
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 149,090
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 1.13
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements included in Form 10-Q for October 4, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> OCT-04-1997
<CASH> 57,404
<SECURITIES> 0
<RECEIVABLES> 791,753
<ALLOWANCES> 43,880
<INVENTORY> 767,224
<CURRENT-ASSETS> 1,692,468
<PP&E> 1,597,745
<DEPRECIATION> 885,046
<TOTAL-ASSETS> 3,422,668
<CURRENT-LIABILITIES> 842,765
<BONDS> 516,558
29,195
0
<COMMON> 61,225
<OTHER-SE> 1,805,173
<TOTAL-LIABILITY-AND-EQUITY> 3,422,668
<SALES> 3,935,236
<TOTAL-REVENUES> 3,935,236
<CGS> 2,602,438
<TOTAL-COSTS> 2,602,438
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37,882
<INCOME-PRETAX> 430,355
<INCOME-TAX> 172,573
<INCOME-CONTINUING> 257,782
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 257,782
<EPS-PRIMARY> 2.01
<EPS-DILUTED> 1.97
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the 1996
Annual Report and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-4-1997
<PERIOD-END> JAN-4-1997
<CASH> 270,629
<SECURITIES> 0
<RECEIVABLES> 633,195
<ALLOWANCES> 40,253
<INVENTORY> 30,823
<CURRENT-ASSETS> 1,706,326
<PP&E> 1,543,351
<DEPRECIATION> 821,827
<TOTAL-ASSETS> 3,449,535
<CURRENT-LIABILITIES> 766,267
<BONDS> 519,058
26,394
0
<COMMON> 63,908
<OTHER-SE> 1,909,831
<TOTAL-LIABILITY-AND-EQUITY> 3,449,535
<SALES> 5,137,178
<TOTAL-REVENUES> 5,137,178
<CGS> 3,458,166
<TOTAL-COSTS> 3,458,166
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 62,793
<INCOME-PRETAX> 508,408
<INCOME-TAX> 208,884
<INCOME-CONTINUING> 299,524
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 299,524
<EPS-PRIMARY> 2.32
<EPS-DILUTED> 2.28
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements included in Form 10-Q for March 30, 1996 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-4-1997
<PERIOD-END> MAR-30-1996
<CASH> 85,435
<SECURITIES> 0
<RECEIVABLES> 713,925
<ALLOWANCES> 36,864
<INVENTORY> 832,544
<CURRENT-ASSETS> 1,708,915
<PP&E> 1,496,615
<DEPRECIATION> 758,686
<TOTAL-ASSETS> 3,467,010
<CURRENT-LIABILITIES> 843,877
<BONDS> 613,276
24,189
0
<COMMON> 63,764
<OTHER-SE> 1,745,914
<TOTAL-LIABILITY-AND-EQUITY> 3,467,010
<SALES> 1,158,123
<TOTAL-REVENUES> 1,158,123
<CGS> 777,606
<TOTAL-COSTS> 777,606
<OTHER-EXPENSES> 270,368
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,867
<INCOME-PRETAX> 93,156
<INCOME-TAX> 37,226
<INCOME-CONTINUING> 55,930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,930
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements included in Form 10-Q for June 29, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-04-1997
<PERIOD-END> JUN-29-1996
<CASH> 69,179
<SECURITIES> 0
<RECEIVABLES> 778,260
<ALLOWANCES> 37,555
<INVENTORY> 806,935
<CURRENT-ASSETS> 1,735,994
<PP&E> 1,517,040
<DEPRECIATION> 786,678
<TOTAL-ASSETS> 3,478,727
<CURRENT-LIABILITIES> 817,146
<BONDS> 626,530
24,967
0
<COMMON> 63,547
<OTHER-SE> 1,770,157
<TOTAL-LIABILITY-AND-EQUITY> 3,478,727
<SALES> 2,379,120
<TOTAL-REVENUES> 2,379,120
<CGS> 1,602,284
<TOTAL-COSTS> 1,602,284
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,904
<INCOME-PRETAX> 211,645
<INCOME-TAX> 85,823
<INCOME-CONTINUING> 125,822
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 125,822
<EPS-PRIMARY> .97
<EPS-DILUTED> .96
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements included in Form 10-Q for September 28, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-04-1997
<PERIOD-END> SEP-28-1996
<CASH> 212,097
<SECURITIES> 0
<RECEIVABLES> 792,759
<ALLOWANCES> 40,714
<INVENTORY> 750,792
<CURRENT-ASSETS> 1,829,591
<PP&E> 1,517,866
<DEPRECIATION> 798,554
<TOTAL-ASSETS> 3,578,421
<CURRENT-LIABILITIES> 944,681
<BONDS> 527,073
25,443
0
<COMMON> 63,548
<OTHER-SE> 1,835,980
<TOTAL-LIABILITY-AND-EQUITY> 3,578,421
<SALES> 3,760,039
<TOTAL-REVENUES> 3,760,039
<CGS> 2,536,845
<TOTAL-COSTS> 2,536,845
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,754
<INCOME-PRETAX> 364,794
<INCOME-TAX> 147,924
<INCOME-CONTINUING> 216,870
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 216,870
<EPS-PRIMARY> 1.68
<EPS-DILUTED> 1.65
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the 1995
Annual Report and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 84,075
<SECURITIES> 0
<RECEIVABLES> 664,127
<ALLOWANCES> 34,621
<INVENTORY> 841,907
<CURRENT-ASSETS> 1,667,637
<PP&E> 1,490,384
<DEPRECIATION> 740,504
<TOTAL-ASSETS> 3,447,071
<CURRENT-LIABILITIES> 868,320
<BONDS> 614,217
23,636
0
<COMMON> 63,439
<OTHER-SE> 1,708,067
<TOTAL-LIABILITY-AND-EQUITY> 1,771,506
<SALES> 5,062,299
<TOTAL-REVENUES> 5,062,299
<CGS> 3,577,555
<TOTAL-COSTS> 3,577,555
<OTHER-EXPENSES> 1,137,354
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77,302
<INCOME-PRETAX> 284,135
<INCOME-TAX> 126,844
<INCOME-CONTINUING> 157,291
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 157,291
<EPS-PRIMARY> 1.20
<EPS-DILUTED> 1.19
</TABLE>
