SEC Company Response from V F (VFC) — Jan 5, 2009
V F CORP
Date: Jan. 5, 2009 · CIK: 0000103379 · Accession: 0000893220-09-000002
AI Filing Summary & Sentiment
Referenced dates: December 18, 2008
Letter
Division of Corporate Finance 100 F Street, N.E., Mail Stop 3561 United States Securities and Exchange Commission Washington D.C. 20549
Dear Mr. Reynolds:
Re:
Comment letter to V.F. Corporation (the “Company”) dated December 18, 2008 relating to Form 10-K for the fiscal year ended December 29, 2007 and Definitive Proxy Statement on Schedule 14A
We are responding to comments of the staff of the Division of Corporation Finance (“the Staff”) of the Securities and Exchange Commission (the “Commission”) as set forth in your letter dated December 18, 2008 relating to the Company’s Form 10-K for the fiscal year ended December 29, 2007 and the Definitive Proxy Statement on Schedule 14A filed on March 17, 2008.
For your convenience, we have reproduced the Staff’s comments preceding each of our responses.
Form 10-K for the fiscal year ended December 29, 2007
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page
Contractual Obligations, page 46
1.
We note your total contractual obligations at the end of 2007 of $2,517,000,000 for long-term debt, including the current portion, which consists of both required principal and related interest obligations, and your payment obligations for capital leases. You also disclose on page F-25 that your scheduled payments at the end of 2007 for long-term debt were $1,112,803,000 and your future minimum lease payments for capital leases were $59,496,000, which both include amounts representing interest. Please reconcile for us the amount of long-term debt presented on your contractual obligation table with the amounts for long-term debt and capital leases presented on page F-25. Include an analysis of the items that comprise the $2,517,000,000 long-term debt contractual obligation at the end of 2007, including
the respective interest, and identify which items are included on your December 29, 2007 balance sheet.
Response
The only interest included in the $1,112,803,000 and the $59,496,000 are small amounts of interest represented by debt discount of $7,444,000 and interest included in the capital lease payments of $16,242,000, respectively. However, the larger interest obligations related to long-term debt are not included in those amounts. Details of our principal and interest commitments are presented in the attached Exhibit.
The Exhibit presents our long-term debt and lease payment obligations and related interest payable by year. The “Principal only” portion of the Exhibit agrees with our debt principal payments per Note L to the Consolidated Financial Statements. The “Interest only” portion of the Exhibit presents our future interest commitments for each long-term debt obligation.
The “Total principal and interest” row in the Exhibit agrees with the long-term debt row of the commitments table in the MD&A, which per the footnote thereto “... consists of both required principal and related interest obligations. Also included are payment obligations for capital leases.”
For additional clarity in our 2008 Form 10-K to be filed in early 2009, we will present separate lines for principal and interest obligations in our MD&A commitments table, as follows:
Payments Due or Forecasted by Period
Total
Thereafter
In millions
Long-term debt:
Principal
$ 1,149
$
$
$
$
$
$
Interest
1,368
1,031
Total
$ 2,517
$
$
$
$
$
$ 1,964
We will also revise our schedule of payments due on debt and capital leases in our long-term debt note in our 2008 Form 10-K, as follows:
Notes and
Capital
Other
Leases
In thousands
$
$ 5,317
4,719
200,655
4,377
4,301
4,145
Thereafter
910,528
36,637
1,112,803
59,496
Less debt discount included above
7,444
—
Less amounts representing interest
—
16,242
Total long-term debt
1,105,359
43,254
Less current portion
3,168
Long-term debt, due beyond one year
$ 1,104,724
$ 40,086
Definitive Proxy Statement on Schedule 14A filed on March 17, 2008
Compensation Discussion and Analysis, page 15
Competitive Compensation Targets, page 17
2.
We note your statement, “In setting target levels of compensation, the Committee uses the Comparison Group as its principal benchmarking tool...” Because you appear to benchmark compensation, in future filings you are required to identify the companies that comprise the benchmark group. If you have benchmarked different elements of your compensation against different benchmarking groups, please identify the companies that comprise each group in future filings. Refer to Item 402(b)(2)(xiv) of Regulation S-K and to “Staff Observations in the Review of Executive Compensation Disclosure,” which is available at http://www.sec.gov/divisions/corpfin/guidance/execcompdisclosure.htm. This disclosure should include a discussion of where actual payments fall within targeted parameters. To the extent actual compensation was outside a targeted percentile range, include an explanation of the reason for this.
Response
In the future, to the extent the Compensation Committee (the “Committee”) of our Board of Directors utilizes information respecting a Company-identified peer group of companies to benchmark any material element of named executive officers’ compensation, we will identify the companies that comprise the benchmark group. However, in establishing compensation targets, the Committee has historically used, and plans in the future to use, broad-based survey information provided by one of its outside compensation consultants, Towers Perrin, from that firm’s executive compensation database. That database includes executive compensation for over 800 U.S.-based companies. Towers Perrin uses regression analysis of the executive compensation data of the 800 companies in its database to size adjust the data to the Company’s approximate annual revenue range. However, the Committee does not receive or use information on any subset of the entire database in its decision making. Because the pool of data is so large and there is no selection process, the identities of the individual companies in the database are not material to the Committee in its decision making. It is our view that individual identities of this large broad-based group of 800 companies are not required to be disclosed.
In future filings, we will disclose whether compensation target amounts set by the Committee for named executive officers fell within benchmarked parameters and, if targeted compensation falls outside of such parameters for any named executive officer, an explanation of the reasons for that.
* * * * *
In connection with responding to your comments, we acknowledge that:
•
the Company is responsible for the adequacy and accuracy of the disclosure in the filing;
•
the Staff comments or changes to disclosure in response to the Staff comments do not foreclose the Commission from taking any action with respect to the filing; and
•
the Company may not assert the Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
We appreciate the Staff’s time and attention. I am available to discuss with you any of the above comments and our responses. I may be reached at 336-424-6016.
Sincerely,
/s/ Robert K. Shearer
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CORRESP
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corresp
VF Corporation
105 Corporate Center Blvd.
Greensboro, NC 27408
January 5, 2009
Mr. John Reynolds
Assistant Director
Division of Corporate Finance
100 F Street, N.E., Mail Stop 3561
United States Securities and Exchange Commission
Washington D.C. 20549
Dear Mr. Reynolds:
Re:
Comment letter to V.F. Corporation (the “Company”) dated December 18, 2008 relating to
Form 10-K for the fiscal year ended December 29, 2007 and Definitive Proxy Statement on
Schedule 14A
We are responding to comments of the staff of the Division of Corporation Finance (“the Staff”) of
the Securities and Exchange Commission (the “Commission”) as set forth in your letter dated
December 18, 2008 relating to the Company’s Form 10-K for the fiscal year ended December 29, 2007
and the Definitive Proxy Statement on Schedule 14A filed on March 17, 2008.
For your convenience, we have reproduced the Staff’s comments preceding each of our responses.
Form 10-K for the fiscal year ended December 29, 2007
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page
28
Contractual Obligations, page 46
1.
We note your total contractual obligations at the end of 2007 of $2,517,000,000 for
long-term debt, including the current portion, which consists of both required
principal and related interest obligations, and your payment obligations for capital
leases. You also disclose on page F-25 that your scheduled payments at the end of 2007 for
long-term debt were $1,112,803,000 and your future minimum lease payments for capital
leases were $59,496,000, which both include amounts representing interest. Please
reconcile for us the amount of long-term debt presented on your contractual obligation
table with the amounts for long-term debt and capital leases presented on page F-25.
Include an analysis of the items that comprise the $2,517,000,000 long-term debt
contractual obligation at the end of 2007, including
1
the respective interest, and identify which items are included on your December 29, 2007
balance sheet.
Response
The only interest included in the $1,112,803,000 and the $59,496,000 are small amounts of interest
represented by debt discount of $7,444,000 and interest included in the capital lease payments of
$16,242,000, respectively. However, the larger interest obligations related to long-term debt are
not included in those amounts. Details of our principal and interest commitments are presented in
the attached Exhibit.
The Exhibit presents our long-term debt and lease payment obligations and related interest payable
by year. The “Principal only” portion of the Exhibit agrees with our debt principal payments per
Note L to the Consolidated Financial Statements. The “Interest only” portion of the Exhibit
presents our future interest commitments for each long-term debt obligation.
The “Total principal and interest” row in the Exhibit agrees with the long-term debt row of the
commitments table in the MD&A, which per the footnote thereto “... consists of both required
principal and related interest obligations. Also included are payment obligations for capital
leases.”
For additional clarity in our 2008 Form 10-K to be filed in early 2009, we will present separate
lines for principal and interest obligations in our MD&A commitments table, as follows:
Payments Due or Forecasted by Period
Total
2008
2009
2010
2011
2012
Thereafter
In millions
Long-term debt:
Principal
$
1,149
$
4
$
3
$
203
$
3
$
3
$
933
Interest
1,368
75
75
71
58
58
1,031
Total
$
2,517
$
79
$
78
$
274
$
61
$
61
$
1,964
2
We will also revise our schedule of payments due on debt and capital leases in our long-term debt
note in our 2008 Form 10-K, as follows:
Notes and
Capital
Other
Leases
In thousands
2008
$
635
$
5,317
2009
646
4,719
2010
200,655
4,377
2011
165
4,301
2012
174
4,145
Thereafter
910,528
36,637
1,112,803
59,496
Less debt discount included above
7,444
—
Less amounts representing interest
—
16,242
Total long-term debt
1,105,359
43,254
Less current portion
635
3,168
Long-term debt, due beyond one year
$
1,104,724
$
40,086
Definitive Proxy Statement on Schedule 14A filed on March 17, 2008
Compensation Discussion and Analysis, page 15
Competitive Compensation Targets, page 17
2.
We note your statement, “In setting target levels of compensation, the Committee uses
the Comparison Group as its principal benchmarking tool...” Because you appear to benchmark
compensation, in future filings you are required to identify the companies that comprise
the benchmark group. If you have benchmarked different elements of your compensation
against different benchmarking groups, please identify the companies that comprise each
group in future filings. Refer to Item 402(b)(2)(xiv) of Regulation S-K and to “Staff
Observations in the Review of Executive Compensation Disclosure,” which is available at
http://www.sec.gov/divisions/corpfin/guidance/execcompdisclosure.htm. This disclosure
should include a discussion of where actual payments fall within targeted parameters. To
the extent actual compensation was outside a targeted percentile range, include an
explanation of the reason for this.
3
Response
In the future, to the extent the Compensation Committee (the “Committee”) of our Board of Directors
utilizes information respecting a Company-identified peer group of companies to benchmark any material element
of named executive officers’ compensation, we will identify the companies that comprise the
benchmark group. However, in establishing compensation targets, the Committee has historically
used, and plans in the future to use, broad-based survey information provided by one of its outside
compensation consultants, Towers Perrin, from that firm’s executive compensation database. That
database includes executive compensation for over 800 U.S.-based companies.
Towers Perrin uses regression analysis of the executive compensation data of the 800 companies in its database to size adjust the data to the Company’s approximate annual revenue range. However, the Committee does not receive or use information on any subset of the entire database in its decision making.
Because the pool of
data is so large and there is no selection process, the identities of the individual companies in the database are not
material to the Committee in its decision making. It is our view that individual identities of
this large broad-based group of 800 companies are
not required to be disclosed.
In future filings, we will disclose whether compensation target amounts set by the Committee for
named executive officers fell within benchmarked parameters and, if targeted compensation falls
outside of such parameters for any named executive officer, an explanation of the reasons for that.
* * * * *
In connection with responding to your comments, we acknowledge that:
•
the Company is responsible for the adequacy and accuracy of the disclosure in the
filing;
•
the Staff comments or changes to disclosure in response to the Staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
•
the Company may not assert the Staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.
We appreciate the Staff’s time and attention. I am available to discuss with you any of the above
comments and our responses. I may be reached at 336-424-6016.
Sincerely,
/s/ Robert K. Shearer
Robert K. Shearer
Senior Vice President and
Chief Financial Officer
Exhibit attached
4
Exhibit
VF Corporation
Long-term Debt and Interest Commitments
December 29, 2007
(Dollars in thousands)
Payments Due or Forecasted by Period
Total
2008
2009
2010
2011
2012
Thereafter
Principal only
8.50% notes, due 2010
$
200,000
$
—
$
—
$
200,000
$
—
$
—
$
—
5.95% notes, due 2017
250,000
—
—
—
—
—
250,000
6.00% notes, due 2033
292,556
(1)
—
—
—
—
—
292,556
6.45% notes, due 2037
350,000
—
—
—
—
—
350,000
Other notes
12,803
635
646
655
165
174
10,528
Subtotal
1,105,359
635
646
200,655
165
174
903,084
Capital leases
43,254
3,168
2,731
2,534
2,594
2,570
29,657
Total Principal
1,148,613
(2)
3,803
3,377
203,189
2,759
2,744
932,741
Interest only
8.50% notes, due 2010
46,750
17,000
17,000
12,750
—
—
—
5.95% notes, due 2017
146,271
14,875
14,875
14,875
14,875
14,875
71,896
6.00% notes, due 2033
464,250
18,000
18,000
18,000
18,000
18,000
374,250
Debt discount on 6.00% notes, due 2033
7,444
(1)
—
—
—
—
—
7,444
6.45% notes, due 2037
673,488
22,575
22,575
22,575
22,575
22,575
560,613
Other notes
13,647
753
725
697
687
678
10,107
Subtotal
1,351,851
73,203
73,175
68,897
56,137
56,128
1,024,311
Capital leases
16,242
2,149
1,988
1,843
1,707
1,575
6,980
Total Interest
1,368,092
75,352
75,162
70,741
57,844
57,702
1,031,291
Total Principal and Interest per commitments table
$
2,516,705
$
79,155
$
78,540
$
273,929
$
60,603
$
60,447
$
1,964,031
-
(1)
Principal amount of $292,556 is net of unamortized original issue discount of $7,444, which is
presented separately in the Interest section.
(2)
Amounts per table of principal payments in Note L of Consolidated Financial Statements:
Notes and other:
Current portion
$
635
Due beyond one year
1,104,724
Subtotal
1,105,359
Capital leases:
Current portion
3,168
Due beyond one year
40,086
Subtotal
43,254
Total long-term debt, including current portion
$
1,148,613