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, 2002
Commission file number: 1-5256
VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
(Full title of plan)
105 CORPORATE CENTER BLVD.
GREENSBORO, NC 27408
(Address of principal executive offices)
(336) 424-6000
(Registrant's telephone number, including area code)
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
Table of contents
Page No.
Report of Independent Auditors 4
Statements of Net Assets Available for Benefits,
December 31, 2002 and December 31, 2001 5
Statements of Changes in Net Assets Available for Benefits -
For the Years Ended December 31, 2002, 2001 and 2000 6
Notes to Financial Statements 7
Supplemental Schedules*:
Schedule H - Line 4i - Schedule of Assets (Held
At End of Year) 12
* - 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.
Exhibit 23.1 - Consent of Independent Auditors 13
2
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 Hourly Employees
By: /s/ Frank C. Pickard III
------------------------
Frank C. Pickard III
Vice President, Treasurer
VF Corporation
Date: June 27, 2003
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REPORT OF INDEPENDENT AUDITORS
To the Participants and Administrator of
VF Corporation Tax-Advantaged Savings Plan for Hourly Employees
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 VF Corporation Tax-Advantaged Savings Plan for Hourly Employees (the
"Plan") at December 31, 2002 and 2001, and the changes in net assets available
for benefits for the three years in the period ended December 31, 2002 in
conformity with accounting principles generally accepted in the United States of
America. 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 auditing standards generally accepted in the United States of
America, 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 our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule H - Line 4i -
Schedule of Assets (Held at End of Year) 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. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule 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/ PricewaterhouseCoopers LLP
Greensboro, NC
June 6, 2003
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31
ASSETS 2002 2001
------ -------------- ---------------
Investments, at fair value
VF Corporation common stock -
44,783 shares in 2002 $ 1,614,426 $ 2,192,158
56,195 shares in 2001
Other securities 12,902,609 23,592,692
-------------- ---------------
Total investments 14,517,035 25,784,850
Loans receivable from participants 637,184 920,122
-------------- ---------------
Net assets available for benefits $ 15,154,219 $ 26,704,972
============== ===============
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31
2002 2001 2000
--------------- --------------- --------------
Investment income (loss)
Interest $ 0 $ 0 $ 2,263
Net realized and unrealized appreciation
(depreciation)in fair value of investments (1,024,614) (207,236) 296,957
Dividends on VF Corporation common stock 50,344 55,252 48,511
Income from mutual funds and bank common
trust funds 126,055 344,470 782,573
--------------- --------------- --------------
(848,215) 192,486 1,130,304
Interest on participant loan repayments 43,168 55,406 38,105
Transfer from merged plans (Note A) 48,647 0 2,221,218
Participant contributions 2,040,970 3,088,273 4,362,591
--------------- --------------- --------------
1,284,570 3,336,165 7,752,218
Benefits paid to participants (12,835,323) (4,414,933) (3,807,510)
Net increase/decrease (11,550,753) (1,078,768) 3,944,708
Net assets available for benefits
Beginning of period 26,704,972 27,783,740 23,839,032
--------------- --------------- --------------
End of period $ 15,154,219 $ 26,704,972 $ 27,783,740
=============== =============== ==============
See notes to financial statements.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
NOTE A -- DESCRIPTION OF THE PLAN
Effective April 1, 1998, VF Corporation (the Corporation) adopted the VF
Corporation Tax-Advantaged Savings Plan for Hourly Employees (the Plan), which
is a cash or deferred plan under Section 401(k) of the Internal Revenue Code.
Under the Plan, certain hourly employees of specified subsidiaries, having at
least one year of credited service, may elect to contribute between 2% and 25%
of their compensation to the Plan. Employees remain fully vested in their
contributions to the Plan.
Employee contributions are invested at the direction of the employee in one or
more of the funds administered by the Plan's trustees. All Plan assets are
trusteed by Fidelity Management Trust Company with the exception of the Fixed
Income Fund which is trusteed by UMB Bank, n.a. The investment programs and
investment objectives of the Plan funds 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) Index 500 Fund: Monies are invested in the 500 stocks that
make up the S&P 500 Stock Price Index.
(f) Dividend Growth Fund: Monies are invested in stocks of
companies that have the potential to increase the amount of
their dividends or begin paying them if none are being paid
now.
(g) Small-Cap Value Fund: Monies are invested in U.S. common
stocks of small companies whose price is undervalued.
(h) Small-Cap Growth Fund: Monies invested in small and medium
size companies with undervalued assets or favorable growth
prospects.
(i) Foreign Fund: Monies are invested in stocks and debt
obligations of companies and governments outside the United
States.
(j) 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.
(k) Various Mutual Funds: Participants can select from an
additional 250 mutual funds offered through Fidelity
Investments Funds Net Program and additional Fidelity Fund
options with various investment objectives.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE A -- DESCRIPTION OF THE PLAN (Continued)
Individual accounts are maintained for each participant; each account includes
the individual's 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 accounts may be rolled over into another
IRS-approved tax deferral vehicle.
The transfers of applicable participant balances from the Blue Bell Savings,
Profit Sharing and Retirement Plan, which were merged into the Plan in 2002 and
the Bestform Savings Plan, Todd Uniform and Horace Small Savings Plans, which
were merged into the Plan in 2000, have been disclosed separately in the
respective Statements of Changes in Net Assets Available for Benefits.
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 50% of the
participant's total vested account balance. Payment in full is required at
termination of employment. There were 553 loans outstanding at December 31,
2002.
Although it has no intent to do so, the Corporation may terminate the Plan in
whole or in part at any time.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value. Securities traded on a national securities
exchange are valued at the last reported sales price on the last business day of
the plan year. For commercial notes and United States government obligations,
UMB Bank, n.a. 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. Purchases and sales
of securities, including gains and losses thereon, are recorded as of the trade
date. Dividends are recorded on the ex-dividend date.
The Plan presents in the statement 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 unrealized
appreciation or depreciation on those investments. Realized gains or losses are
calculated on an average cost basis.
Administrative expenses consisting primarily of fees for legal, accounting and
other services are paid by the Corporation in accordance with the Plan.
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.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES (Continued)
Risks and Uncertainties: The Plan provides for various mutual fund investment
options in stocks, bonds and fixed income securities. Investments are exposed to
various risks, such as interest rate, market and credit. 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 risks in the near term would materially
affect participants' account balances and the amounts reported in the statements
of net assets available for plan benefits and the statements of changes in net
assets available for plan benefits.
NOTE C -- INCOME TAX STATUS
The Internal Revenue Service has issued a Favorable Determination Letter dated
September 23, 2002 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 VF
Corporation 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. The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that the Plan
is currently designed and is currently being operated in compliance with the
applicable requirements of the IRC.
NOTE D -- RELATED PARTY TRANSACTIONS
Related parties to the Plan include VF Corporation, the Plan sponsor, and
Fidelity Management Trust Company and United Missouri Bank (UMB), the Plan's
trustees. Certain plan investments are funds managed by Fidelity and UMB and
therefore these transactions qualify as party-in-interest.
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE E -- INVESTMENTS
Net realized and unrealized appreciation (depreciation) and year end fair value
of investments included in Plan equity includes the following:
Net Realized and Unrealized
Appreciation in Fair Value for the Fair Value at
Year Ended December 31 December 31
---------------------- -----------
2002 2001 2000 2002 2001
-------------- --------------- --------------- -------------- --------------
Fair value as determined by
quoted market or stated
redemption price:
VF Corporation Common
Stock $ (68,164) $ 210,329 $ 451,309 $ 1,614,426 $ 2,192,158
Mutual funds and
bank common trust funds (1,396,215) (1,197,699) (961,690) 7,721,740 11,674,744
-------------- --------------- --------------- -------------- --------------
(1,464,379) (987,370) (510,381) 9,336,166 13,866,902
-------------- --------------- --------------- -------------- --------------
Fair value as determined by
Plan trustee:
Mutual funds and
bank common trust funds 439,765 780,134 807,338 5,180,869 11,917,948
-------------- --------------- --------------- -------------- --------------
439,765 780,134 807,338 5,180,869 11,917,948
-------------- --------------- --------------- -------------- --------------
$ (1,024,614) $ (207,236) $ 296,957 $ 14,517,035 $ 25,784,850
============== =============== =============== ============== ==============
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VF CORPORATION TAX-ADVANTAGED SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE E -- INVESTMENTS (Continued)
The fair value of investments that individually represent 5% or more of the
Plan's net assets at December 31 of one or both years are as follows:
2002 2001
-------------- ---------------
Fidelity Growth & Income Fund $ 1,427,911 $ 2,295,251
(47,110 shares and 61,403 shares)
Fidelity Puritan Fund 862,237 1,296,929
(54,606 shares and 73,397 shares)
Fidelity US Equity Index Commingled Pool 1,073,110 1,908,112
(40,849 shares and 56,537 shares)
VF Corporation common stock 1,614,426 2,192,158
(44,783 shares and 56,195 shares)
Baron Asset Fund 669,733 1,113,061
(19,458 shares and 25,035 shares)
Fidelity Retirement Money Market Portfolio 1,738,376 2,322,247
(1,738,376 shares and 2,322,247 shares)
ProCapp Fixed Income Fund 5,180,869 11,917,948
(422,583 shares and 1,026,524 shares)
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VF Corporation Tax-Advantaged Savings Plan
for Hourly Employees
SCHEDULE H LINE 4I SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AT DECEMBER 31, 2002
Identity of issue, borrower, Number of Current
Lessor, or similar party Shares Cost Value
------------------------ -------------- --------------- ---------------
*Fidelity Puritan Fund 54,606 $ 1,015,957 $ 862,237
*Fidelity Growth & Income Fund 47,110 1,913,532 1,427,911
*Fidelity Diversified International
Fund 15,736 323,951 270,024
*Fidelity Dividend Growth Fund 2,566 72,921 57,271
*Fidelity Retirement Money Market
Portfolio 1,738,376 1,738,376 1,738,376
*Fidelity U.S. Equity Index
Commingled Pool 40,849 1,473,276 1,073,110
Baron Asset Fund 19,458 920,661 669,733
Longleaf Small Cap Fund 24,160 530,840 491,166
*ProCapp Fixed Income Fund 422,583 4,352,253 5,180,869
*VF Corporation Common Stock Fund 44,783 1,661,251 1,614,426
*Various Mutual Funds N/A 748,545 1,131,911
Loans Receivable from Participants
(with interest rates from 7% to 9%) N/A 637,185 637,185
--------------- ---------------
$ 15,388,748 $ 15,154,219
=============== ===============
* represents a party-in-interest
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