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) 1 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 3 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 4 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. 5 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. 6 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. 7 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. 8 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. 9 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 ============== =============== =============== ============== ============== 10 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) 11 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 12