<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 11-K
[ X ] Annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended December 31, 1998.
or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from to .
THE WARNACO GROUP, INC. EMPLOYEE SAVINGS PLAN
90 Park Ave.
26th Floor
New York, NY 10022
(Full name and address of plan)
Commission File Number: 1-10857
THE WARNACO GROUP, INC.
(Name of issuer of securities)
The Warnaco Group, Inc.
90 Park Ave.
New York, NY 10022
(Address of principal executive offices, including zip code)
Copies of all communication to:
The Warnaco Group, Inc.
90 Park Ave.
26th Floor
New York, NY 10022
Attn. Vice President and General Counsel
<PAGE>
INTRODUCTION
The Warnaco Group, Inc., a Delaware Corporation, has established The Warnaco
Group, Inc. Employee Savings Plan (the "Plan"). The Plan is intended to qualify
under Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as
amended.
REQUIRED INFORMATION
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: These documents are listed in the Index
to Financial Statements.
(b) Exhibits:
(1) Consent of Independent Accountants.
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Accountants F-1
Statements of Net Assets Available for Benefits F-2
Statements of Changes in Net Assets Available for Benefits F-3
Notes to Financial Statements F-4 - F-11
Supplemental Schedules:
Schedule I - Schedule of Assets Held for Investment Purposes S-1
Schedule II - Schedule of Reportable Transactions S-2
</TABLE>
Other schedules required by Section 2520.103-10 of the Department of Labor Rules
and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
The Warnaco Group, Inc. as Plan Administrator has duly caused this Annual Report
on Form 11-K for the period ended December 31, 1998 to be signed on its behalf
by the undersigned thereunto duly authorized.
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
Date: June 28, 1999 By:/s/William S.Finkelstein
------------------------
WILLIAM S. FINKELSTEIN
Senior Vice President and
Chief Financial Officer of
The Warnaco Group, Inc.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
The Warnaco Group, Inc. Employee Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of The Warnaco Group, Inc. Employee Savings Plan (the "Plan") at December 31,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended, in conformity with generally accepted accounting principles.
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 of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PRICEWATERHOUSECOOPERS LLP
New York, New York
June 25, 1999
F-1
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(IN THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
ASSETS 1998 1997
<S> <C> <C>
Investments at contract value:
Travelers Group Annuity Contracts $10,125 $ 9,871
------- -------
Investments at fair value:
Merrill Lynch Global Allocation Fund 3,666 3,845
Merrill Lynch Growth Fund for Investment & Retirement 3,932 4,989
Merrill Lynch Institutional Fund 3,097 3,127
Merrill Lynch Equity Index Trust 7,492 5,206
Common Stock Fund 2,641 2,453
Cash and distribution account 16 (21)
------- -------
20,844 19,599
------- -------
Participant loans 29 --
------- -------
Receivable from former trustee of Designer Holdings, Inc.
Employee Savings Plan 1,406 --
------- -------
Contributions receivable:
Employee 290 171
Employer 34 18
------- -------
324 189
------- -------
Net assets available for benefits $32,728 $29,659
======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
F-2
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(IN THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
1998 1997
<S> <C> <C>
Additions to net assets attributed to:
Employee contributions $ 4,010 $ 2,713
Employer contributions 414 282
Interest and dividend income 1,295 1,712
Other income 72 --
Net (depreciation) appreciation in fair value of investments (766) 1,762
------- -------
Total additions 5,025 6,469
------- -------
Deductions from net assets attributed to:
Benefit payments 3,345 5,666
Administrative fees 46 43
------- -------
Total deductions 3,391 5,709
------- -------
Transfer from Designer Holdings, Inc. Employee Savings
Plan 1,435 --
------- -------
Net increase 3,069 760
Net assets available for benefits:
Beginning of year 29,659 28,899
------- -------
End of Year $32,728 $29,659
======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
F-3
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF PLAN
The following description of The Warnaco Group, Inc. Employee Savings Plan (the
"Plan") is provided for general information purposes only. Participants should
refer to the Plan agreement (the "Agreement") for a complete description of the
Plan's provisions.
GENERAL
The Plan is a defined contribution plan which covers all domestic, non-union,
full-time employees over age 21 of The Warnaco Group, Inc. and its subsidiaries
(the "Company") who have completed six months of service. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
The Savings Plan Committee, which is appointed by the Board of Directors of the
Company, serves without compensation and is responsible for the general
administration of the Plan and makes the final determination as to all questions
arising in connection with the interpretation, application and administration of
the Plan. Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch") serves
as trustee, investment manager, and administrative service provider to the Plan.
CONTRIBUTIONS
Participants may elect to contribute a portion (after-tax or pre-tax in whole
percentages from 1% to 16%) of their eligible compensation to the Plan. The
Company matches contributions to the Plan equal to 15% (such contributions are
solely invested in the Company's common stock fund) of a participant's
contributions up to 6% of eligible compensation. Section 401(k) of the Internal
Revenue Code (the "Code") and the Plan limit the amount certain highly
compensated individuals may contribute, based on amounts contributed by lower
compensated individuals. All employees were limited to a maximum contribution of
$10,000 and $9,500 in 1998 and 1997, respectively, by Code Section 402(g). If
any participant's compensation deferrals for a year exceed the maximum allowable
for that year, the excess amount may be returned to the participant as taxable
compensation. The Plan also allows participants to rollover contributions from
other qualified plans into the Plan.
PARTICIPANTS' ACCOUNTS
Each participant's account is credited with the participant's contributions (may
include both before tax and after tax contributions) and allocations of (a) the
Company's contributions and, (b) Plan earnings and charged with an allocation of
administrative expenses. Allocations are based on participant earnings or
account balances, as defined. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
F-4
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
VESTING
Participants in the Plan are fully vested in their contributions at all times.
Participants vest in their share of Company matching contributions and in
earnings thereon over a four-year period.
PARTICIPANT LOANS
Under the terms of the Designer Holdings, Inc. ("DSH") Employee Savings Plan,
participants were allowed to borrow from their fund accounts a minimum of
$1,000 up to a maximum amount equal to the lesser of $50,000 or 50% of their
account balance. Loan transactions were treated as a transfer to (from) the
investment fund from (to) the Loan Fund. The loans were secured by the balance
in the participant's account and bore interest at a rate equal to the prime rate
plus 1.0% at the date of the loan request. Principal and interest were paid
ratably through payroll deductions. On December 31, 1998, participant loan
balances were transferred to the Plan. The Plan does not allow loans to
participants. Once the existing DSH participant loans are repaid, no further
loans will be allowed. The DSH plan was merged into the Plan as of December 31,
1998 as described in Note 5.
RETIREMENT AGE
Normal retirement age is 65.
INVESTMENT OPTIONS
Each participant directs the investment of their account balance into six
investment options as follows:
FUND A - Travelers Group Annuity Contract: The fund invests in
Guaranteed Investment Contracts ("GIC's") issued by Travelers Inc. The fund also
invests in high quality money market securities. Income is declared and
reinvested monthly. Although the fund purchases investments denominated as
"guaranteed investment contracts", neither the fund nor its units are in fact
guaranteed, and such investments are subject to claims of creditors of the
GIC's issuer.
FUND B - Merrill Lynch Global Allocation Fund (Balanced): This fund
seeks high total return from a globally oriented portfolio of equity, debt and
money market securities.
FUND C - Merrill Lynch Growth Fund for Investment & Retirement (Managed
Equity): This fund seeks to invest primarily in securities which fund management
believes are undervalued. Undervalued securities are securities which either are
selling at a discount from per-share book value, have dividend yields greater
than the stock market average or seem capable of recovering from situations that
caused the companies to become temporarily out of favor.
F-5
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
FUND D - Merrill Lynch Institutional Fund (U.S. Government): This fund
invests in high quality short-term "money market" instruments such as those
issued by the U.S. Government, government agencies and instrumentalities, banks
and corporations. The fund seeks to maintain a consistent one dollar per share
net asset value, although this cannot be assured.
FUND E - Merrill Lynch Equity Index Trust (Indexed Equity): This fund
is a collective trust maintained by Merrill Lynch Trust Company, therefore the
funds are commingled with other Merrill Lynch funds. The fund seeks to
approximate the total return of the Standard & Poor's 500 Composite Stock Fund
Index.
FUND F - Common Stock Fund: This fund offers employees an opportunity
to share in the ownership of the Company with the potential for capital
appreciation. This fund also invests in common stock of the Authentic Fitness
Corporation, an affiliate of the Company.
Participants may allocate investment balances to the funds in any combination as
long as each investment is made in even multiples of 10% of the participant's
fund balance.
BENEFIT PAYMENTS
Upon termination of service from death, disability or retirement, vested
benefits due to the participants or their beneficiaries will be paid in a lump
sum, in installments or as an annuity. Participants may withdraw their vested
account balance upon termination of employment. The Plan also allows for
hardship withdrawals under certain circumstances.
FORFEITED ACCOUNTS
As provided in the Plan, forfeitures by participants of Company contributions
and earnings thereon during any calendar month are applied as an offset to
future Company contributions payable under the Plan. Company contributions
forfeited by participants amounted to approximately $46,170 and $4,823 for the
Plan years 1998 and 1997, respectively.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING AND USE OF ESTIMATES
The Plan's financial statements are prepared on the accrual basis. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
RISK AND UNCERTAINTIES
Investment securities are exposed to various risks, such as interest rate,
market and price. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes in risk
in the near term would materially affect participants' account balances and
the amounts reported in the statements of net assets available for benefits and
the statements of changes in net assets available for benefits.
F-6
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
INVESTMENT VALUATION AND INCOME RECOGNITION
Plan investments other than insurance contracts are stated at fair value and are
determined based upon quoted market prices. Insurance company contracts are
deposit administration contracts valued at contract value. Funds may be
withdrawn pro rata from all investment contracts at contract value determined by
the respective insurance company to pay Plan benefits and to make
participant-directed transfers to other funds pursuant to the terms of the Plan
after the amounts in the money market securities are depleted. The contract
value of the guaranteed annuity contracts approximates the fair value. Shares of
registered investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year-end. Purchases
and sales of securities are recorded on a trade-date basis. Participant loans
are valued at cost which is not materially different from fair value. The Plan
presents in the statements of changes in net assets available for benefits the
net appreciation (depreciation) in the fair value of its investments, which
consists of the realized gains or losses and the unrealized appreciation
(depreciation) of those investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Plan.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan at any time subject to the provisions of ERISA. In the event
of a termination of the Plan, all interests of participants become fully vested
and the GICs shall continue until all participants' accounts have been
completely distributed to the participants or their designated beneficiaries in
accordance with the Plan.
F-7
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 3 - INCOME TAX STATUS
The Plan received a determination letter, dated March 12, 1996, that it met the
qualification requirements of Section 401(a) of the Internal Revenue Code and
that the Plan is exempt from federal income taxation under Section 501(a) of the
Code. Subsequently, the Plan has been amended. However, the Company believes
that the Plan, as amended, is currently being operated in compliance with the
applicable requirements of the Code. Accordingly, no provision for income taxes
is made in the accompanying financial statements.
NOTE 4 - RELATED PARTY TRANSACTIONS
The assets of the Plan are managed by Merrill Lynch, the trustee as defined by
the Plan, and therefore these investments qualify as party-in-interest. Fees
paid by the Plan to the trustee for investment management services were $46,000
and $43,000 for the years ended December 31, 1998 and 1997, respectively.
The Common Stock Fund of the Plan held 99,422 and 73,584 shares of common stock
of the Company at December 31, 1998 and 1997, respectively. The cost of such
shares was $2,749,359 and $1,888,917 with a fair market value of $2,510,397 and
$2,308,686 at December 31, 1998 and 1997, respectively. In addition, the Plan
owned 7,149 and 7,756 shares of common stock of the Authentic Fitness
Corporation ("Authentic Fitness") at December 31, 1998 and 1997. The cost of
such shares was $121,629 and $131,974 with a fair market value of $130,466 and
$144,451 at December 31, 1998 and 1997. Certain officers and directors of
Authentic Fitness are also officers and directors of the Company.
NOTE 5 - MERGER WITH THE DESIGNER HOLDINGS, INC. EMPLOYEE SAVINGS PLAN
On May 8, 1998, the Board of Directors of the Company passed a resolution to
merge the Designer Holdings, Inc. Employee Savings Plan ("the DSH Plan") into
the Plan effective December 31, 1998. Employer and employee contributions to the
DSH Plan ceased on January 1, 1998, following the acquisition of DSH by the
Company. Employees of DSH became eligible to participate in the Plan on January
1, 1998. The assets of the DSH Plan were liquidated and the cash realized of
$1,406,170 was transferred to the Plan as part of the merger.
F-8
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500 (in thousands of dollars).
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
<S> <C> <C>
Net assets available for benefits per
the financial statements $ 32,728 $ 29,659
Amounts allocated to withdrawing participants (50) (158)
-------- --------
$ 32,678 $ 29,501
======== ========
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997
<S> <C> <C>
Benefit paid to participants per the
financial statements $ 3,345 $ 5,666
Add: Amounts allocated to withdrawing
participants at December 31. 1998 and 1997 50 158
Less: Amounts allocated to withdrawing
participants at December 31, 1997 and 1996 (158) (261)
------- -------
$ 3,237 $ 5,563
======= =======
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
F-9
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 7-INVESTMENTS
The statement of changes in net assets available for benefits of each of the
investment funds, by investment option, for the years ended December 31, 1998
and 1997 follows (in thousands of dollars). Investments in Fund A through
Fund F each represent 5 percent or more of the Plan's net assets at December
31, 1998 and 1997.
JANUARY 1, 1998 TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
FUND
-----------------------------------------------------------------
LOAN
A B C D E F FUND OTHER TOTAL
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employee contributions $ 568 $ 535 $ 1,011 $ 370 $ 823 $ 551 $ 0 $ 152 $ 4,010
Employer contributions - - - - - 398 - 16 414
Interest and dividend income 589 426 81 166 - 30 - 3 1,295
Other income 28 7 8 12 9 8 - - 72
Net appreciation (depreciation) in
fair value of investments - (409) (1,295) - 1,601 (664) - 1 (766)
------- ------ ------- ------ ------ ------ --- ------ -------
Total additions 1,185 559 (195) 548 2,433 323 - 172 5,025
Deductions from net assets
attributed to:
Benefit payments and participant
withdrawals 1,045 436 415 537 706 206 - - 3,345
Administrative fees 12 5 7 7 7 8 - - 46
------- ------ ------- ------ ------ ------ --- ------ -------
Total deductions 1,057 441 422 544 713 214 - - 3,391
------- ------ ------- ------ ------ ------ --- ------ -------
Transfer from Designer Holdings, Inc.
Employee Savings Plan - - - - - - 29 1,406 1,435
Interfund transfers-net 126 (297) (440) (34) 566 79 - - -
------- ------ ------- ------ ------ ------ --- ------ -------
(Decrease) increase in net assets
available for benefits 254 (179) (1,057) (30) 2,286 188 29 1,578 3,069
Net assets available for benefits:
Beginning of year 9,871 3,845 4,989 3,127 5,206 2,453 - 168 29,659
------- ------ ------- ------ ------ ------ --- ------ -------
End of year $10,125 $3,666 $ 3,932 $3,097 $7,492 $2,641 $29 $1,746 $32,728
======= ====== ======= ====== ====== ====== === ====== =======
</TABLE>
F-10
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
JANUARY 1, 1997 TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
FUND
---------------------------------------------------------------------
A B C D E F OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employee contributions $ 526 $ 346 $ 630 $ 307 $ 412 $ 353 $ 139 $ 2,713
Employer contributions -- -- -- -- -- 264 18 282
Interest and dividend income 616 503 397 172 1 17 6 1,712
Net appreciation (depreciation) in
fair value of investments -- (53) 332 -- 1,315 168 -- 1,762
------ ------- ------ ------ ------- ------- ------- -------
Total additions 1,142 796 1,359 479 1,728 802 163 6,469
------ ------- ------ ------ ------- ------- ------- -------
Deductions from net assets attributed to:
Benefit payments and participant withdrawals 1,782 1,101 696 738 1,031 333 (15) 5,666
Administrative fees 14 4 6 8 6 6 (1) 43
------ ------- ------ ------ ------- ------- ------- -------
Total deductions 1,796 1,105 702 746 1,037 339 (16) 5,709
------ ------- ------ ------ ------- ------- ------- -------
Interfund transfers - net (215) (177) 356 (65) 138 (38) 1 --
------ ------- ------ ------ ------- ------- ------- -------
(Decrease) increase in net assets
available for benefits (869) (486) 1,013 (332) 829 425 180 760
Net assets available for benefits:
Beginning of year 10,740 4,331 3,976 3,459 4,377 2,028 (12) 28,899
------ ------- ------ ------ ------- ------- ------- -------
End of year $9,871 $ 3,845 $4,989 $3,127 $ 5,206 $ 2,453 $ 168 $29,659
====== ======= ====== ====== ======= ======= ======= =======
</TABLE>
The net appreciation (depreciation) in fair value of investments is as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
1998 1997
<S> <C> <C>
Common stock $ (663,798) $ 168,307
Mutual funds $ (102,495) $ 1,593,437
</TABLE>
The realized gains (losses) on sales of investments were ($89,769) and $251,246
for the years ended December 31, 1998 and 1997, respectively.
F-11
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - ITEM 27-a
DECEMBER 31, 1998 SCHEDULE I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT VALUE COST VALUE
<S> <C> <C> <C> <C>
Travelers Fixed Income Fund - Fund A Investment Contract with Travelers, Inc.
No. GR-15077, 5.93%, matures
May 1, 1999 $ 1.00 $ 182,949 $ 182,949
Investment Contract with Travelers, Inc.,
No. GR-10511,6.10%, matures
January 1, 1999 1.00 9,563,968 9,563,968
Money Market Account 1.00 377,830 377,830
----------- -----------
10,124,747 10,124,747
----------- -----------
Merrill Lynch Global Allocation Fund - Fund B International allocation mutual fund $12.61 4,015,352 3,666,263
Merrill Lynch Growth Fund for Investment &
Retirement - Fund C Growth oriented mutual fund $21.51 4,505,972 3,931,836
Merrill Lynch Institutional Fund - Fund D Money market mutual fund $1.00 3,097,222 3,097,216
Merrill Lynch Equity Index Trust - Fund E Mutual fund investing in securities of
the S&P 500 $83.92 4,056,313 7,492,393
The Common Stock Fund - Fund F Common stock $24.78 2,870,988 2,640,863
Cash and Distribution Account Pending settlement account $1.00 15,721 15,721
Participant Loans Participant loans outstanding bearing
interest at 6% to 8% $1.00 29.141 29.141
----------- -----------
$28,715,456 $30,998,180
=========== ===========
</TABLE>
S-1
<PAGE>
THE WARNACO GROUP, INC.
EMPLOYEE SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS -- ITEM 27-d
YEAR ENDED DECEMBER 31, 1998 SCHEDULE II
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE ON
NUMBER OF PURCHASE NUMBER OF SELLING COST OF TRANSACTION NET GAIN
PARTY INVOLVED DESCRIPTION PURCHASES PRICE SALES PRICE ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Travelers Fixed income Insurance company
Fund -- Fund A contracts paying a
fixed rate of return
of approximately 6.4% 176 $1,459,837 139 $1,206,165 $1,206,150 $1,206,165 $ 15
Merrill Lynch Global International
Allocation Fund -- allocation mutual fund 91 1,068,511 120 838,242 843,499 838,242 (5,257)
Fund B
Merrill Lynch Growth Growth oriented mutual
Fund for Investment & fund 103 1,316,272 138 1,078,283 1,239,815 1,078,283 (161,532)
Retirement -- Fund C
Merrill Lynch Money market mutual
Institutional fund 123 599,144 99 629,864 629,915 629,864 (51)
Fund -- D
Merrill Lynch Equity Mutual fund investing
Index Trust -- Fund E in securities of the
S&P 500 120 1,498,397 107 813,490 716,567 813,490 96,923
The Common Stock Common stock 153 1,201,670 199 350,145 370,012 350,145 (19,867)
Fund -- Fund F
Cash and Distribution Pending settlement
Account account 71 301,494 73 301,074 301,074 301,074 --
</TABLE>
* Transactions or series of transactions in excess of 5 percent of the current
value of the Plan's assets as of January 1, 1998 as defined in Section
2520.103-6 of the Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA.
S-2
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-51193, 33-60093, 33-60091, 33-59091, 33-58148
and 33-58146) of The Warnaco Group, Inc. of our report dated June 25, 1999
appearing on page F-1 of this Annual Report on Form 11-K.
PRICEWATERHOUSECOOPERS LLP
New York, New York
June 28, 1999
