SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_____________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
ý ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2004
OR
o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from __________ to __________
Commission file number 1-724
A. Full title of the plan and the address of the plan, if different from that of the issuer named below: PVH Associates Investment Plan for Hourly Associates and PVH Associates Investment Plan for Salaried Associates
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Phillips-Van Heusen Corporation, 200 Madison Avenue, New York, New York 10016
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
PHILLIPS-VAN HEUSEN CORPORATION
ASSOCIATES INVESTMENT PLANS
Date: June 27, 2005
By
/s/ Pamela N. Hootkin
Pamela N. Hootkin, Member of
Administrative Committee
Financial Statements
Years ended December 31, 2004 and 2003
Contents
Phillips-Van Heusen Corporation
Associates Investment Plan for Hourly Associates
Report of Independent Registered Public Accounting Firm
F-2
Statements of Net Assets Available for Benefits
F-3
Statements of Changes in Net Assets Available for Benefits
F-4
Notes to Financial Statements
F-5
Supplemental Schedule
F-11
Phillips-Van Heusen Corporation
Associates Investment Plan for Salaried Associates
Report of Independent Registered Public Accounting Firm
F-13
Statements of Net Assets Available for Benefits
F-14
Statements of Changes in Net Assets Available for Benefits
F-15
Notes to Financial Statements
F-16
Supplemental Schedule
F-23
F-1
[Letterhead of Ernst & Young LLP]
Report of Independent Registered Public Accounting Firm
Administrative Committee of the Plan
Phillips-Van Heusen Corporation
Associates Investment Plan for Hourly Associates
We have audited the accompanying statements of net assets available for benefits of the Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates (the “Plan”) as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2004, is presented for purposes of additional analysis and is not a required part of the 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 our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/Ernst & Young LLP
May 31, 2005
F-2
Phillips-Van Heusen Corporation
Associates Investment Plan for Hourly Associates
Statements of Net Assets Available for Benefits
December 31 | ||
2004 | 2003 | |
Assets | ||
Investments, at fair value (Notes A and E): | ||
Investments held by State Street Bank: | ||
Stable Value Funds | $1,283,428 | $ – |
Mutual Funds | 4,434,194 | – |
Investment in Phillips-Van Heusen Corporation Associates Investment Plans Master Trust | 2,480,733 | – |
Investments held by UMB Trust: | ||
Money Market Funds | – | 1,309,488 |
Mutual Funds | – | 4,088,029 |
Investment in Phillips-Van Heusen Corporation Associates Investment Plans Master Trust | – | 1,861,558 |
Participant loans receivable | 324,232 | 307,731 |
Contributions receivable | 42,286 | 55,890 |
Net assets available for benefits | $8,564,873 | $7,622,696 |
See notes to financial statements.
F-3
Phillips-Van Heusen Corporation
Associates Investment Plan for Hourly Associates
Statements of Changes in Net Assets Available for Benefits
Year ended December 31 | ||
2004 | 2003 | |
Additions | ||
Contributions: | ||
Employer, net of forfeitures | $ 364,146 | $ 357,685 |
Employees | 773,914 | 732,825 |
Rollovers | 31,754 | 14,745 |
Loan repayments, interest | 16,263 | 16,289 |
1,186,077 | 1,121,544 | |
Interest and investment income | 188,945 | 117,293 |
Total additions | 1,375,022 | 1,238,837 |
Deductions | ||
Payments to participants | 1,520,257 | 381,038 |
Other disbursements | – | 34,145 |
Transfer out | 55,057 | 18,827 |
Total deductions | 1,575,314 | 434,010 |
Net realized and unrealized appreciation of investments | 1,142,469 | 1,260,912 |
Net increase | 942,177 | 2,065,739 |
Net assets available for benefits at beginning of year | 7,622,696 | 5,556,957 |
Net assets available for benefits at end of year | $8,564,873 | $7,622,696 |
See notes to financial statements.
F-4
Phillips-Van Heusen Corporation
Associates Investment Plan for Hourly Associates
Notes to Financial Statements
December 31, 2004
A. Description of the Plan
The following description of the Phillips-Van Heusen Corporation (the “Company”) Associates Investment Plan for Hourly Associates (the “Plan”) provides only general information. Participants should refer to the Plan Document for a more complete description of the Plan’s provisions.
The Plan was amended effective January 1, 2002 in order to comply with changes permitted or required by the Economic Growth and Tax Relief Reconciliation Act of 2001 and to modify certain administrative provisions. Following the issuance of a favorable determination letter by the Internal Revenue Service (IRS), the Plan was amended again on September 24, 2003 to comply with IRS requests pertaining to its continuous tax-qualified status.
Change in Trustee and Recordkeeper
Effective January 1, 2004, the Plan’s Trustee changed from UMB Bank (the “Predecessor Trustee”) to State Street Bank (the “Trustee” or “Successor Trustee”). Subsequent to 2004, on January 1, 2005, Wells Fargo acquired Strong Retirement Plan Services and as a result, Wells Fargo Retirement Solutions became the “Recordkeeper” and Wells Fargo Bank became the “Trustee”.
Master Trust
The Phillips-Van Heusen Corporation Associates Investment Plans Master Trust (the “Master Trust”) was established for the investment of the Company’s Common Stock Fund. The Plan is one of three plans participating in the Master Trust.
General
The Plan is a defined contribution plan covering hourly production, warehouse, distribution and U.S. retail field employees of the Company who are at least age 21 or older, have completed at least three consecutive months of service and are regularly scheduled to work at least 20 hours per week. Effective September 24, 2003, the Plan covers leased employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
F-5
A. Description of the Plan (continued)
Contributions
Participants may contribute up to 25% of pre-tax annual compensation, limited to $13,000 and $12,000 per annum in 2004 and 2003, respectively. The Company matches 100% of the first 2% of eligible compensation that a participant contributed to the Plan plus 25% of the next 4% of eligible compensation contributed by the participant.
Participant Accounts
Each participant’s account is credited with the participant’s contributions and allocations of (a) the Company’s contributions and (b) Plan earnings. Forfeited balances of terminated participants’ nonvested accounts are used to reduce future Company contributions.
Vesting
Amounts attributable to employee contributions and the allocated earnings thereon are immediately vested. Participants become 25%, 50%, 75% and 100% vested in Company contributions after two, three, four and five years of service, respectively. Upon death, permanent disability or reaching age 65, participants or their beneficiaries become 100% vested in Company contributions.
Investment Options
Upon enrollment in the Plan, a participant may direct employee contributions into any of eight investment options. Effective July 1, 2004, three new investment options were added to the Plan, for a total of eleven options. A participant may contribute a maximum of 25% of employee contributions into the Phillips-Van Heusen Corporation Common Stock Fund.
The Company contributions are invested in any fund offered by the Plan as elected by the participant. However, existing balances contributed to the Company’s Common Stock Fund as of March 31, 1999 were required to remain in the fund until participants reach the age of 55 or older. Effective December 30, 2004, all restrictions on Company Match invested in the PVH Stock Fund were removed and participants are allowed to transfer all Company Match monies to other investment options in the Plan.
F-6
A. Description of the Plan (continued)
Participant Loans Receivable
Participants may borrow from the Plan, with certain restrictions, using their vested account balance as collateral. The minimum loan amount is $1,000 and the maximum loan amount is the lesser of (i) $50,000 reduced by the participant’s highest outstanding loan balance during the previous 12 months, or (ii) 50% of the vested value of the participant’s account. Interest is fixed for the term of the loan at the prime rate plus 1%. Loan repayments are made through payroll deductions which may be specified for a term of 1 to 5 years or up to 15 years for the purchase of a primary residence.
Forfeitures
Contributions made on behalf of non-vested or partially vested employees who have terminated are retained by the Plan and are used to reduce the Company’s future matching contributions. At December 31, 2004, $0 was held by the Plan as forfeitures of non-vested or partially vested, terminated employees.
Payment of Benefits
Participants electing final distributions will receive payment in the form of a lump sum amount equal to the value of their vested account.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.
B. Significant Accounting Policies
The accounting records of the Plan are maintained on the accrual basis.
Substantially all administrative expenses are paid by the Company.
F-7
B. Significant Accounting Policies (continued)
In accordance with the Rules and Regulations of the Department of Labor, investments are included in the accompanying financial statements at market value as determined by quoted market prices or at fair value as determined by the trustee. Purchases and sales of securities are reflected on a trade date basis.
All assets of the Plan are held by the Trustee and are segregated from the assets of the Company. The Master Trust holds the investments in Employers Common Stock. The Plan shares in the Master Trust interest and investment income based upon its participants’ shares of the Master Trust net assets available for benefits.
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
C. Transactions with Parties-in-Interest
During the years ended December 31, 2004 and 2003, the Master Trust purchased 15,616 and 12,631, respectively, of the Company’s common stock and received $168,641 and $172,798, respectively, from the Company as payment of dividends on its common stock. The AIP Master Trust also sold 64,342 and 25,016 shares of the Company’s common stock during the years ended December 31, 2004 and 2003, respectively.
F-8
D. Investments
During 2004 and 2003, the Plan’s investments (including investments purchased, sold, as well as held during the year) appreciated in fair value as determined by quoted market prices as follows:
Net Realized and Unrealized Appreciation in Fair Value | |||
2004 | 2003 | ||
Common stock – Employer Company Fund | $ 860,690 | $ 630,863 | |
Shares of registered investment companies | 281,779 | 630,047 | |
$ 1,142,469 | $1,260,910 | ||
Investments that represent 5% or more of the fair value of the Plan’s net assets are as follows:
December 31 | ||
2004 | 2003 | |
Investment in Phillips-Van Heusen Corporation Associates Investment Plans Master Trust | $2,480,733 | $1,861,558 |
Barclays Global Equity Index Fund | 898,194 | 740,748 |
Dodge & Cox Balanced Fund | 1,121,353 | 977,177 |
Dreyfus Appreciation Fund | 1,084,372 | 1,081,689 |
Strong Advisor Bond | 566,455 | 689,906 |
Strong Stable Value | * | 1,309,488 |
Wells Fargo Stable Return | 1,283,428 | * |
Strong Advisor Small Cap Value | 433,318 | 399,403 |
Shares of registered companies representing less than 5% | 330,503 | 199,106 |
* Investment represented less than 5% of the Plan’s net assets at this time.
F-9
E. Non Participant-Directed Investments
The following schedule depicts activity within the Master Trust as of December 31, 2003 and for the year then ended. The Master Trust consisted of participant directed investments along with all non-participant directed investments through December 30, 2004, at which date all restrictions on these funds were eliminated. Changes in the Phillips-Van Heusen Corporation Associates Investment Plans Master Trust net assets held during the year ended December 31, 2003 were as follows:
December 31, 2003 | |
Net assets: | |
Phillips-Van Heusen common stock | $20,279,641 |
Strong Money Market Fund | 752,382 |
Other | 2,617 |
$21,034,640 | |
Year ended December 31, 2003 | |
Net assets at beginning of year | $13,884,372 |
Changes in net assets: | |
Contributions | 1,207,958 |
Loan repayments, interest | 8,056 |
Loan repayments, principal | 52,457 |
Earnings and net realized and unrealized | 7,302,014 |
Distributions to participants | (913,378) |
Transfers to participant directed investments | (506,839) |
Net assets at end of year | $21,034,640 |
F. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated September 2, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan has been amended since receiving the determination letter and a new determination letter has been applied for. The plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax-exempt.
F-10
Supplemental Schedule
F-11
EIN: 13-1166910
Plan No: 012
Phillips-Van Heusen Corporation
Associates Investment Plan for Hourly Associates
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
Year ended December 31, 2004
Identity of Issue, Borrower, | Description of Investment, | Current Value |
Strong Retirement Plan Services | Barclays Global Equity Index; 79,627.0998 shares | $ 898,194 |
Strong Retirement Plan Services | Dodge & Cox Balanced Fund; | 1,121,353 |
Strong Retirement Plan Services | Dreyfus Appreciation Fund; 28,027.1997 shares | 1,084,372 |
Strong Retirement Plan Services | Oakmark International Fund; | 269,485 |
Strong Retirement Plan Services | Strong Advisor Small Cap Value; 14,738.7011 shares | 433,318 |
Strong Retirement Plan Services | Strong Advisor Bond; | 566,455 |
Strong Retirement Plan Services | Calamos Growth Fund; | 24,290 |
Strong Retirement Plan Services | Royce Opportunity Fund; | 14,154 |
Strong Retirement Plan Services | Dodge & Cox Income Fund; | 22,574 |
Strong Retirement Plan Services | Wells Fargo Stable Value Fund; | 1,283,427 |
Strong Retirement Plan Services | PVH Associates Investment Plan Master Trust; 1,332,913.1734 units | 2,480,733 |
Strong Retirement Plan Services | Loan Fund; 324,232 units | 324,232 |
Total investments held by | $8,522,587 |
F-12
[Letterhead of Ernst & Young LLP]
Report of Independent Registered Public Accounting Firm
Administrative Committee of the Plan
Phillips-Van Heusen Corporation
Associates Investment Plan for Salaried Associates
We have audited the accompanying statements of net assets available for benefits of the Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates (the “Plan”) as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2004, is presented for purposes of additional analysis and is not a required part of the 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 our audits of the financial statements and, in our opinion is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/Ernst & Young LLP
May 31, 2005
F-14
Phillips-Van Heusen Corporation
Associates Investment Plan for Salaried Associates
Statements of Net Assets Available for Benefits
December 31 | ||
2004 | 2003 | |
Assets | ||
Investments, at fair value (Notes A and E): | ||
Investments held by State Street Bank: | ||
Stable Value Funds | $ 10,331,420 | $ – |
Mutual Funds | 62,079,054 | – |
Investment in Phillips-Van Heusen Corporation Associates Investment Plans Master Trust | 28,041,243 | – |
Investments held by UMB Trust: | ||
Money Market Funds | – | 9,166,738 |
Mutual Funds | – | 53,035,123 |
Investment in Phillips-Van Heusen Corporation Associates Investment Plans Master Trust | – | 19,150,217 |
Participant loans receivable | 1,542,866 | 1,392,026 |
Contributions receivable | 321,907 | 344,323 |
Net assets available for benefits | $102,316,490 | $83,088,427 |
See notes to financial statements.
F-15
Phillips-Van Heusen Corporation
Associates Investment Plan for Salaried Associates
Statements of Changes in Net Assets Available for Benefits
Year ended December 31 | ||
2004 | 2003 | |
Additions | ||
Contributions: | ||
Employer, net of forfeitures | $ 2,705,468 | $ 2,827,401 |
Employees | 6,988,960 | 6,739,272 |
Rollovers | 1,581,526 | 1,289,381 |
Transfers in | 54,924 | 18,827 |
Other income | 25,570 | 34,440 |
Loan repayments, interest | 83,392 | 97,367 |
11,439,840 | 11,006,688 | |
Interest and investment income | 2,507,519 | 1,222,688 |
Total additions | 13,947,359 | 12,229,376 |
Deductions | ||
Payments to participants | 8,478,070 | 4,541,465 |
Total deductions | 8,478,070 | 4,541,465 |
Net realized and unrealized appreciation of investments | 13,758,774 | 15,508,465 |
Net increase | 19,228,063 | 23,196,376 |
Net assets available for benefits at beginning of year | 83,088,427 | 59,892,051 |
Net assets available for benefits at end of year | $102,316,490 | $83,088,427 |
See notes to financial statements.
F-16
Phillips-Van Heusen Corporation
Associates Investment Plan for Salaried Associates
Notes to Financial Statements
December 31, 2004
A. Description of the Plan
The following description of the Phillips-Van Heusen Corporation (the “Company”) Associates Investment Plan for Salaried Associates (the “Plan”) provides only general information. Participants should refer to the Plan Document for a more complete description of the Plan’s provisions.
The Plan was amended effective January 1, 2002 in order to comply with changes permitted or required by the Economic Growth and Tax Relief Reconciliation Act of 2001 and to modify certain administrative provisions. Following the issuance of a favorable determination letter by the Internal Revenue Service (IRS), the Plan was amended again on September 24, 2003 to comply with IRS requests pertaining to its continuing tax-qualified status.
Change in Trustee and Recordkeeper
Effective January 1, 2004, the Plan’s Trustee changed from UMB Bank (the “Predecessor Trustee”) to State Street Bank (the “Trustee” or “Successor Trustee”). Subsequent to 2004, on January 1, 2005, Wells Fargo acquired Strong Retirement Plan Services and as a result, Wells Fargo Retirement Solutions became the “Recordkeeper” and Wells Fargo Bank became the “Trustee”.
Master Trust
The Phillips-Van Heusen Corporation Associates Investment Plans Master Trust (the “Master Trust”) was established for the investment of the Company’s Common Stock Fund. The Plan is one of three plans participating in the Master Trust.
General
The Plan is a defined contribution plan covering salaried or clerical employees of the Company who are at least age 21 or older, have completed at least three consecutive months of service and are regularly scheduled to work at least 20 hours per week. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
F-17
A. Description of the Plan (continued)
Contributions
Participants may contribute up to 25% of pre-tax annual compensation, limited to $13,000 and $12,000 per annum in 2004 and 2003, respectively. The Company matches 100% of the first 2% of eligible compensation that a participant contributed to the Plan plus 25% of the next 4% of eligible compensation contributed by the participant.
Participant Accounts
Each participant’s account is credited with the participant’s contributions and allocations of (a) the Company’s contributions and (b) Plan earnings. Forfeited balances of terminated participants’ nonvested accounts are used to reduce future Company contributions.
Vesting
Amounts attributed to employee contributions and the allocated earnings thereon are immediately vested. Participants become 25%, 50%, 75% and 100% vested in Company contributions and the allocated earnings thereon after two, three, four and five years of service, respectively. Upon death, permanent disability, or reaching age 65, participants or their beneficiaries become 100% vested in Company contributions.
Investment Options
Upon enrollment in the Plan, a participant may direct employee contributions into any of eight investment options. Effective July 1, 2004, three new investment options were added to the Plan, for a total of eleven options. A participant may contribute a maximum of 25% of employee contributions into the Phillips-Van Heusen Corporation Common Stock Fund.
The Company contributions are invested in any fund offered by the Plan as elected by the participant. However, existing balances contributed to the Company’s Common Stock Fund as of March 31, 1999 were required to remain in the fund until participants reach the age of 55 or older. Effective December 30, 2004, all restrictions on Company Match invested in the PVH Stock Fund were removed and participants are allowed to transfer all Company Match monies to other investment options in the Plan.
F-18
A. Description of the Plan (continued)
Participant Loans Receivable
Participants may borrow from the Plan, with certain restrictions, using their vested account balance as collateral. The minimum loan amount is $1,000 and the maximum loan amount is the lesser of (i) $50,000 reduced by the participant’s highest outstanding loan balance during the previous 12 months, or (ii) 50% of the vested value of the participant’s account. Interest is fixed for the term of the loan at the prime rate plus 1%. Loan repayments are made through payroll deductions, which may be specified for a term of 1 to 5 years or up to 15 years for the purchase of a primary residence.
Forfeitures
Contributions made on behalf of non-vested or partially vested employees who have terminated are retained by the Plan and are used to reduce the Company’s future matching contributions. At December 31, 2004, $6,986 was held by the Plan as forfeitures of non-vested or partially vested, terminated employees and was used to reduce company match contributions for the 12/29/04 payroll.
Payment of Benefits
Participants electing final distributions will receive payment in the form of a lump sum amount equal to the value of their vested account.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.
F-19
B. Significant Accounting Policies
The accounting records of the Plan are maintained on the accrual basis.
Substantially all administrative expenses are paid by the Company.
In accordance with the Rules and Regulations of the Department of Labor, investments are included in the accompanying financial statements at market value as determined by quoted market price or at fair value as determined by the trustee. Purchase and sales of securities are reflected on a trade date basis.
All assets of the Plan are held by the Trustee and are segregated from the assets of the Company. The Master Trust holds the investments in Employers Common Stock. The Plan shares in the Master Trust interest and investment income based upon its participants’ shares of the Master Trust net assets available for benefits.
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
C. Transactions with Parties-in-Interest
During the years ended December 31, 2004 and 2003, the Master Trust purchased 15,616 and 12,631 shares, respectively, of the Company’s common stock and received $168,641 and $172,798, respectively, from the Company as payment of dividends on its common stock. The AIP Master Trust also sold 64,342 and 25,016 shares of the Company’s common stock during the years ended December 31, 2004 and 2003, respectively.
F-20
D. Investments
During 2004 and 2003, the Plan’s investments (including investments purchased, sold, as well as held during the year) appreciated in fair value as determined by quoted market prices as follows:
Net Realized and Unrealized Appreciation in Fair Value of Investments | ||
2004 | 2003 | |
|
| ||
Common stock – Employer Company Fund | $ 9,639,765 | $ 6,608,041 |
Shares of registered investment companies | 4,119,009 | 8,900,421 |
$13,758,774 | $15,508,462 | |
Investments that represent 5% or more of the fair value of the Plan’s net assets are as follows:
December 31 | ||
2004 | 2003 | |
Investment in Phillips-Van Heusen Corporation Associates Investment Plans Master Trust | $28,041,243 | $19,150,217 |
Barclays Global Equity Index Fund | 7,568,399 | 6,627,301 |
Dodge & Cox Balanced Fund | 16,216,647 | 13,846,853 |
Dreyfus Appreciation Fund | 16,729,719 | 17,094,795 |
Oakmark International | 5,472,485 | * |
Strong Advisor Small Cap Value | 8,303,214 | 6,591,793 |
Strong Advisor Bond | 5,431,252 | 5,005,410 |
Strong Stable Value | * | 9,166,738 |
Wells Fargo Stable Return | 10,331,420 | * |
Shares of registered companies representing less than 5% | 2,357,338 | 3,868,971 |
* Investment represented less than 5% of the Plan’s net assets at this time.
F-21
E. Non Participant-Directed Investments
The following schedule depicts activity within the Master Trust as of December 31, 2003 and for the year then ended. The Master Trust consisted of participant directed investments along with all non-participant directed investments through December 30, 2004, at which date all restrictions on these funds were eliminated. Changes in the Phillips-Van Heusen Corporation Associates Investment Plans Master Trust net assets held during the year ended December 31, 2003 were as follows:
December | ||
31, 2003 | ||
Net assets: | ||
Phillips-Van Heusen common stock | $20,279,641 | |
Strong Money Market Fund | 752,382 | |
Other | 2,617 | |
$21,034,640 | ||
Year ended December | ||
31, 2003 | ||
Net assets at beginning of year | $13,884,372 | |
Changes in net assets: | ||
Contributions | 1,207,958 | |
Loan repayments, interest | 8,056 | |
Loan repayments, principal | 52,457 | |
Earnings and net realized and unrealized | 7,302,014 | |
Distributions to participants | (913,378) | |
Transfers to participant directed investments | (506,839) | |
Net assets at end of year | $21,034,640 |
F. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated September 2, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax-exempt.
F-22
F. Income Tax Status (continued)
qualification. The Plan has been amended since receiving the determination letter and a new determination letter has been applied for. The plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax-exempt.
G. Transfer Out
The prior Recordkeeper proposed a reallocation of assets among the plans in the predecessor Master Trust in 2001 by adjusting the opening balances. A final determination on the correct reallocation was made in March 2002 when the assets in the predecessor Master Trust were distributed to separate trusts for the plans and the Recordkeeper conversion process was complete. This transfer out adjustment was made to reflect this reallocation.
F-23
Supplemental Schedule
F-24
EIN: 13-1166910
Plan No: 007
Phillips-Van Heusen Corporation
Associates Investment Plan for Salaried Associates
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
Year ended December 31, 2004
Identity of Issue, Borrower, | Description of Investment, | Current Value |
Strong Retirement Plan Services | Barclays Global Equity Index Fund; 670,957.3096 shares | $ 7,568,399 |
Strong Retirement Plan Services | Dodge & Cox Balanced Fund; | 16,216,647 |
Strong Retirement Plan Services | Dreyfus Appreciation Fund; 432,404.2106 shares | 16,729,719 |
Strong Retirement Plan Services | Oakmark International; 258,991.2722 shares | 5,472,485 |
Strong Retirement Plan Services | Strong Advisor Small Cap Value; 282,422.2362 shares | 8,303,214 |
Strong Retirement Plan Services | Strong Advisor Bond; | 5,431,252 |
Strong Retirement Plan Services | Calamos Growth; 22,844.7578 shares | 1,210,315 |
Strong Retirement Plan Services | Royce Opportunity Fund; 42,861.4376 shares | 570,486 |
Strong Retirement Plan Services | Dodge & Cox Income; 44,901.6084 shares | 576,537 |
Strong Retirement Plan Services | Wells Fargo Stable Return Fund 279,196.6501 shares | 10,331,420 |
Strong Retirement Plan Services | PVH Associates Investment Plan Master Trust; 15,066,734.9621 units | 28,041,243 |
Strong Retirement Plan Services | Loan Fund; 1,542,866 units, | 1,542,866 |
Total investments held by | $101,994,583 |
F-25
EXHIBIT INDEX
Exhibit No.
23.1
Consent of Independent Auditors (Associates Investment Plan for
Hourly Associates)
23.2
Consent of Independent Auditors (Associates Investment Plan for
Salaried Associates)