Exhibit 99
VF to Begin Expensing Stock Options in the Fourth Quarter of 2005
GREENSBORO, N.C.--(BUSINESS WIRE)--Feb. 1, 2006--VF Corporation
(NYSE:VFC) announced today that it will early adopt the provisions of
Financial Accounting Standards Board Statement No. 123 (Revised 2004),
Share-Based Payment ("Statement 123(R)"), during the fourth quarter of
2005. This Statement requires the expensing of stock options and also
modifies the accounting for certain other share-based compensation.
Under the method of adoption chosen by VF, full year 2005 operating
results will be reported as though stock options had been expensed
beginning in January 2005. Accordingly, the Company will be restating
its operating results for the first three quarters of 2005. Prior
years' financial statements will not be restated.
The Company estimates that the impact of adopting Statement 123(R)
on 2005 after-tax earnings (before a cumulative effect adjustment)
will be $17 million or $0.15 per diluted share. In addition, a
one-time after-tax cumulative effect adjustment of $12 million or
$0.10 per diluted share related to the adoption of this new Statement
will be recognized as of the beginning of 2005. For 2006, the Company
estimates that the new rules will impact net income by $19 million or
$0.17 per diluted share.
The attached table summarizes the estimated additional expense
under Statement No. 123(R) for each of the 2005 quarters. The higher
impact in the first quarter reflects the requirement under Statement
123(R) of expensing stock options granted to retirement-eligible
employees at the date of the stock option grant.
Restated 2005 quarterly financial statements and other data will
be included in the Company's fourth quarter earnings release on
February 8, 2006. The Company will hold a conference call the same
morning at 8:30 a.m. EST.
The call will be broadcast live over the Internet via www.vfc.com.
For those who are unavailable to listen to the live broadcast, a
replay will be available shortly after the call on the above website
for two weeks.
Cautionary Statement on Forward-looking Statements
Certain statements included in this release are "forward-looking
statements" within the meaning of the federal securities laws.
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 risk factors
that could cause the actual results of operations or financial
condition of the Company to differ include, but are not 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 and competitive conditions, including
consolidation, of our customers and of our suppliers; actions of
competitors, customers, suppliers and service providers that may
impact the Company's business; the Company's ability to make and
integrate acquisitions successfully; the Company's ability to achieve
expected sales and earnings growth from ongoing businesses and
acquisitions; the Company's ability to achieve its planned cost
savings; natural disasters; terrorist actions; and the impact of
economic and political factors in the markets where the Company
competes, such as recession or changes in interest rates, currency
exchange rates, price levels, capital market valuations and other
factors over which the Company has no control. Investors are also
directed to consider the risks and uncertainties discussed in
documents filed by the Company with the Securities and Exchange
Commission.
About the Company
VF Corporation is a leader in branded apparel including jeanswear,
outdoor products, intimate apparel, image apparel and sportswear. Its
principal brands include Lee(R), Wrangler(R), Riders(R), Rustler(R),
Vanity Fair(R), Vassarette(R), Bestform(R), Lily of France(R),
Nautica(R), John Varvatos(R), JanSport(R), Eastpak(R), The North
Face(R), Vans(R), Reef(R), Napapijri(R), Kipling(R), Lee Sport(R) and
Red Kap(R).
VF Corporation's press releases, annual reports and other
information can be accessed through the Company's home page,
www.vfc.com
VF CORPORATION
Summary of Impact of Adoption of
FASB Statement No. 123(R), Share-Based Payment
2005 Income Statements
(In thousands, except per share amounts)
First Second Third Fourth Full
Quarter Quarter Quarter Quarter Year
Stock-based ------- ------- ------- ------- -------
compensation
expense included
in ongoing
operations:
Cost of goods sold $ 1,140 $ 591 $ 549 $ 644 $ 2,924
Marketing,
administrative
and general
expenses 11,250 4,295 3,914 4,312 23,771
-------------------------------------------
Effect before
income tax
benefit 12,390 4,886 4,463 4,956 26,695
Income tax benefit (4,208) (1,648) (2,228) (1,742) (9,826)
-------------------------------------------
Effect before
cumulative
adjustment 8,182 3,238 2,235 3,214 16,869
Cumulative effect of
change in accounting
policy 11,833 - - - 11,833
-------------------------------------------
Effect on net income $20,015 $ 3,238 $ 2,235 $ 3,214 $28,702
===========================================
Impact on diluted
earnings per share:
Ongoing operations $ 0.07 $ 0.03 $ 0.02 $ 0.03 $ 0.15
Cumulative effect
of change in
accounting policy 0.10 - - - 0.10
-------------------------------------------
Total $ 0.17 $ 0.03 $ 0.02 $ 0.03 $ 0.25
===========================================
CONTACT: VF Services, Inc.
Cindy Knoebel, 336-424-6189 or 212-841-7141
VP, Financial & Corporate Communications