Financial Statements

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, 2000

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    

    1. 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
    2. 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, 2001

By /s/ Pamela N. Hootkin

 

Pamela N. Hootkin, Member of

 

Administrative Committee

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

 

 

Financial Statements

 

 

Years ended December 31, 2000 and 1999

 

 

Contents

 

 

Report of Independent Auditors

F-2

Statements of Net Assets Available for Plan Benefits

F-3

Statements of Changes in Net Assets Available for Plan Benefits

F-4

Notes to Financial Statements

F-5

 

The Plan's investment assets are held in a Master Trust for which a separate report is filed with the Department of Labor. Accordingly, supplemental schedules of Assets Held for Investment Purposes and Reportable Transactions of the Master Trust have not been presented.

 

 

 

 

 

 

 

F-1

[Letterhead of Ernst & Young LLP]

 

 

 

 

Report of Independent Auditors

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 plan benefits of the Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates as of December 31, 2000 and 1999, and the related statements of changes in net assets available for plan 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 auditing standards generally accepted in the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as 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 plan benefits of the Plan as of December 31, 2000 and 1999, and the changes in its net assets available for plan benefits for the years then ended, in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

June 18, 2001

 

 

 

 

 

F-2

 

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

Statements of Net Assets Available for Plan Benefits

 

 

December 31

 

2000

1999

     

Assets

   

Investments, at fair value (Notes A and E):

   

Shares of registered investment companies:

   

Equity Fund

$2,022,996

$2,913,190

Bond Fund

430,767

391,180

Balanced Fund

1,304,497

1,425,887

International Fund

460,002

528,219

S&P 500 Index Fund

1,251,499

478,898

Small Cap Fund

275,155

78,640

Common Stock--Employer Company Fund

2,688,136

1,883,034

Common Trust Fund

1,385,907

1,372,255

Participant loans receivable

164,134

144,841

Net assets available for plan benefits

$9,983,093

$9,216,144

 

 

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 Plan Benefits

 

 

Year ended December 31

 

2000

1999

     

Additions

   

Contributions:

   

Employer Company, net of forfeitures

$ 280,269

$ 251,862

Participants

650,317

636,191

 

930,586

888,053

Interest and investment income

341,300

206,459

Total additions

1,271,886

1,094,512

     

Deductions

   

Payments to participants

740,796

554,142

Administrative expenses

6,031

498

Total deductions

746,827

554,640

     

Net realized and unrealized appreciation of investments

241,890

210,587

Net increase

766,949

750,459

     

Net assets available for plan benefits at beginning of year

9,216,144

8,465,685

Net assets available for plan benefits at end of year

$9,983,093

$9,216,144

 

See notes to financial statements.

 

 

 

 

 

F-4

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

Notes to Financial Statements

December 31, 2000

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.

General

The Plan is a defined contribution plan covering hourly production and retail field employees of the Company who have at least one year of service (1,000 hours in a year) and are age 21 or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").

Contributions

Each year, participants may contribute up to 15% of pre-tax annual compensation, as defined by the Plan. Through March 31, 1999, the Company contributed 50% of the first 6% of base compensation that a participant contributed to the Plan. Effective April 1, 1999, the Company matched 100% of the first 2% of base compensation that a participant contributed to the Plan plus 25% of the next 4% of base 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. Through March 31, 1999, 100% of the Company contributions were automatically invested in the common stock of the Company. Effective April 1, 1999, the Company contributions were invested in any fund offered by the Plan as elected by the participant. However, existing balances as of March 31, 1999 must remain in the Employer Company Fund until participants are age 55 or older, at which time they may choose to transfer their investment.

Vesting

Through March 31, 1999, amounts attributable to Company contributions become vested on the participant's 65th birthday or if the participant's employment by the Company terminates by reason of the participant's death or permanent disability or the participant has completed five years of service with the Company. Effective April 1, 1999, the Company's contribution becomes 25% vested after two years from the participant's date

 

 

 

F-5

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

Notes to Financial Statements (continued)

 

 

A. Description of the Plan (continued)

of hire and vests 25% more each year, reaching 100% after five years of service. The vesting provisions not related to years of service remain the same.

Investment Options

Upon enrollment in the Plan, a participant may direct employee contributions into any of eight investment options. A participant may contribute a maximum of 25% of employee contributions into the Phillips-Van Heusen Corporation Common Stock Fund.

On April 1, 1999, the Plan offered three new investment options, the S&P 500 Index Fund, the Small Cap Fund and the Russell International Fund. The Russell International Fund replaced the Templeton Foreign Fund.

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 as of the first business day of the month of application as published in The Wall Street Journal, 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 employees who have terminated are retained by the Plan and are used to reduce the Company's future matching contributions. At December 31, 1999, approximately $8,500 was held by the Plan as forfeitures of non-vested terminated employees.

Payment of Benefits

Participants entitled to final distributions generally 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-6

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

Notes to Financial Statements (continued)

 

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 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 in the AIP Master Trust and are segregated from the assets of the Company. The Plan shares in AIP Master Trust interest and investment income based upon its participants' shares of AIP Master Trust net assets available for plan benefits.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States 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, 2000 and 1999, the AIP Master Trust purchased 218,613 and 134,121 shares, respectively, of the Company's common stock and received $201,404 and $206,205, respectively, from the Company as payment of dividends on its common stock. The AIP Master Trust also sold 308,224 and 42,849 shares of the Company's common stock during the years ended December 31, 2000 and 1999, respectively.

F-7

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

Notes to Financial Statements (continued)

 

D. Changes in the AIP Master Trust Net Assets Held by Fund

The Plan is one of three plans in the AIP Master Trust and represents an approximate 14% interest in the trust at December 31, 2000 and 1999. Changes in the AIP Master Trust net assets held by fund during the year ended December 31, 2000 were as follows:

 

Phillips-Van Heusen Corporation Common
Stock Fund

 

Money

Market

Fund

 

 

Bond

Fund

 

 

Balanced

Fund

 

 

Equity

Fund

 

Current

International

Fund

 

 

Small Cap

Fund

 

S&P 500
Index

Fund

 

 

Loan

Fund

 

 

 

Total

                     

Net assets at beginning of year

$11,470,437

$ 7,318,089

$2,181,663

$11,050,161

$23,614,787

$4,494,773

$ 590,045

$2,404,387

$1,012,658

$64,137,000

Interest and investment income

241,462

436,127

140,182

824,130

2,041,452

239

48

38,431

7,982

3,730,053

Contributions received:

                   

Employer Company, net of forfeitures

1,001,222

68,837

42,130

141,679

368,032

87,919

134,025

429,225

-

2,273,069

Employees

235,295

405,572

247,585

872,219

1,882,725

475,499

302,956

852,413

-

5,274,264

Net realized and unrealized appreciation (depreciation)

6,171,260

-

61,565

(111,799)

(2,467,571)

(618,802)

28,415

(419,459)

-

2,643,609

Loans to participants, net of repayments

105,167

777

3,385

20,900

9,863

7,515

7,051

(19,082)

153,322

288,898

Payments to participants

(1,433,444)

(1,109,293)

(214,644)

(1,383,482)

(2,695,150)

(725,111)

(105,076)

(281,836)

(17,482)

(7,965,518)

Administrative expenses

(81)

(9,857)

(29)

(1)

(12)

(58,112)

(14,543)

-

-

(82,635)

Transfers (to) from other accounts

(382,389)

(178,702)

(195,518)

(1,358,771)

(1,076,918)

647,330

1,421,311

1,124,339

(682)

-

Net assets at end of year

$17,408,929

$ 6,931,550

$2,266,319

$10,055,036

$21,677,208

$4,311,250

$2,364,232

$4,128,418

$1,155,798

$70,298,740

                     

Plan's beneficial interest at end of year

$ 2,688,136

$1,385,907

$ 430,767

$ 1,304,497

$ 2,022,996

$ 460,002

$ 275,155

$1,251,499

$ 164,134

$ 9,983,093

 

Note: Certain funds above include investments in the Chase Manhattan Bank Domestic Liquidity Fund.

 

F-8

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

Notes to Financial Statements (continued)

 

D. Changes in the AIP Master Trust Net Assets Held by Fund (continued)

The Plan is one of three plans in the AIP Master Trust and represents an approximate 14% interest in the trust at December 31, 2000 and 1999. Changes in the AIP Master Trust net assets held by fund during the year ended December 31, 1999 were as follows:

 

Phillips-Van
Heusen
Corporation
Common
Stock Fund

 

Money

Market

Fund

 

 

Bond

Fund

 

 

Balanced

Fund

 

 

Equity

Fund

 

Prior

International

Fund

 

Current

International
Fund

 

Small

Cap

Fund

 

S&P 500
Index

Fund

 

 

Loan

Fund

 

 

 

Total

                       

Net assets at beginning of year

$ 9,414,931

$11,971,150

$2,267,092

$11,531,743

$21,524,027

$ 3,102,987

$ -

$ -

$ -

$1,277,474

$ 61,089,404

Interest and investment income

214,127

430,750

138,478

910,728

1,560,485

23

558

66

20,457

104,046

3,379,718

Contributions received:

                     

Employer Company, net of forfeitures

1,390,132

35,878

29,878

103,013

284,658

927

30,241

48,537

270,658

-

2,193,922

Employees

263,002

475,927

320,138

1,149,344

2,306,608

154,523

293,215

114,911

464,066

-

5,541,734

Net realized and unrealized appreciation (depreciation)

1,608,452

-

(116,831)

(586,889)

658,027

199,933

1,352,997

105,301

225,610

-

3,446,600

Loans to participants, net of repayments

12,301

(26,125)

(6,087)

(21,836)

(41,100)

11,412

(30,680)

(4,344)

(14,455)

120,914

-

Payments to participants

(1,150,380)

(5,085,127)

(369,106)

(1,370,777)

(2,690,712)

(58,662)

(269,592)

(668)

(21,978)

(490,265)

(11,507,267)

Administrative expenses

(5,048)

(2,017)

(4)

(10)

(15)

(1)

(1)

(2)

(3)

(10)

(7,111)

Transfers (to) from other accounts

(277,080)

(482,347)

(81,895)

(665,155)

12,809

64,882

(357,989)

326,244

1,460,032

499

-

Transfer (to) from International Fund

-

-

-

-

-

(3,476,024)

3,476,024

-

-

-

-

Net assets at end of year

$11,470,437

$ 7,318,089

$2,181,663

$11,050,161

$23,614,787

$ -

$4,494,773

$590,045

$2,404,387

$1,012,658

$ 64,137,000

Plan's beneficial interest at end of year

$ 1,883,034

$ 1,372,255

$ 391,180

$ 1,425,887

$ 2,913,190

$ -

$ 528,219

$ 78,640

$ 478,898

$ 144,841

$ 9,216,144

 

Note: Certain funds above include investments in the Chase Manhattan Bank Domestic Liquidity Fund.

 

F-9

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

Notes to Financial Statements (continued)

 

 

E. Non-Participant-Directed Investments

Information about the net assets and the significant components of the changes in net assets relating to the non-participant directed investments is as follows:

 

December 31

 

2000

1999

     

Net assets:

   

Common stock

$2,688,136

$1,883,034

   

Year ended
December
31, 2000

     

Changes in net assets:

   

Contributions

 

$ 167,639

Earnings and net realized and unrealized appreciation in fair value

 

869,395

Distributions to participants

 

(194,337)

Transfers to participant directed investments

 

(51,842)

Loans to Participants

 

(11)

Administrative expenses

 

14,258

   

$ 805,102

F. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated April 27, 1995, 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 the Plan is 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

Phillips-Van Heusen Corporation

Associates Investment Plan for Hourly Associates

Notes to Financial Statements (continued)

 

 

G. Differences Between Plan Financial Statements and Form 5500

The following is a reconciliation of net assets available for plan benefits per the financial statements to the Form 5500:

 

December 31

 

2000

1999

     

Net assets available for plan benefits as reported
on the financial statements

$9,983,093

$9,216,144

Less amounts allocated to withdrawn participants
at end of the year

(106,008)

(243,152)

Net assets available for plan benefits as reported
on the Form 5500

$9,877,085

$8,972,992

The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:

 

Year ended
December
31, 2000

   

Benefits paid to participants per the financial statements

$ 740,796

Add amounts allocated to withdrawn participants
at December 31, 2000

106,008

Less amounts allocated to withdrawn participants
at December 31, 1999

(243,152)

Benefits paid to participants per the Form 5500

$ 603,652

Amounts allocated to withdrawn participants on the Form 5500 represent benefit claims that have been processed and approved for payment prior to year-end but not yet paid.

F-11

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

 

 

Financial Statements

 

 

Years ended December 31, 2000 and 1999

 

 

Contents

 

 

Report of Independent Auditors

F-13

   

Statements of Net Assets Available for Plan Benefits

F-14

   

Statements of Changes in Net Assets Available for Plan Benefits

F-15

   

Notes to Financial Statements

F-16

   

 

 

 

The Plan's investment assets are held in a Master Trust for which a separate report is filed with the Department of Labor. Accordingly, supplemental schedules of Assets Held for Investment Purposes and Reportable Transactions of the Master Trust have not been presented.

 

F-12

[Letterhead of Ernst & Young LLP]

 

 

 

 

Report of Independent Auditors

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 plan benefits of the Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates as of December 31, 2000 and 1999, and the related statements of changes in net assets available for plan 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 auditing standards generally accepted in the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as 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 plan benefits of the Plan as of December 31, 2000 and 1999, and the changes in its net assets available for plan benefits for the years then ended, in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

June 18, 2001

 

F-13

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Statements of Net Assets Available for Plan Benefits

 

 

December 31

 

2000

1999

     

Assets

   

Investments (Notes A and E):

   

Shares of registered investment companies:

   

Equity Fund

$19,607,756

$20,638,906

Bond Fund

1,826,923

1,776,849

Balanced Fund

8,706,393

9,566,093

International Fund

3,853,271

3,961,167

S&P 500 Index Fund

2,875,285

1,920,628

Small Cap Fund

2,088,338

511,149

Common stock--Employer Company Fund

14,686,330

9,542,292

Common Trust Fund

5,537,081

5,924,812

Participant loans receivable

989,280

864,445

Net assets available for plan benefits

$60,170,657

$54,706,341

 

 

See notes to financial statements.

 

F-14

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Statements of Changes in Net Assets Available for Plan Benefits

 

 

Year ended December 31

 

2000

1999

     

Additions

   

Contributions:

   

Employer Company, net of forfeitures

$ 1,992,345

$ 1,915,513

Participants

4,622,892

4,838,488

Loan repayments

288,898

-

 

6,904,135

6,754,001

Interest and investment income

3,381,293

3,145,887

Total additions

10,285,428

9,899,888

     

Deductions

   

Payments to participants

7,141,084

10,406,985

Administrative expenses

76,460

6,613

Total deductions

7,217,544

10,413,598

     

Net realized and unrealized appreciation of investments
(Note E)

2,396,432

3,208,095

Net increase

5,464,316

2,694,385

     

Net assets available for plan benefits at beginning of year

54,706,341

52,011,956

Net assets available for plan benefits at end of year

$60,170,657

$54,706,341

 

 

See notes to financial statements.

F-15

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Notes to Financial Statements

December 31, 2000

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.

General

The Plan is a defined contribution plan covering salaried clerical employees of the Company who have at least one year of service (1,000 hours in a year) and are age 21 or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").

Contributions

Each year, participants may contribute up to 15% of pre-tax annual compensation, as defined by the Plan. Through March 31, 1999, the Company contributed 50% of the first 6% of base compensation that a participant contributed to the Plan. Effective April 1, 1999, the Company matched 100% of the first 2% of base compensation that a participant contributed to the Plan plus 25% of the next 4% of base 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. Through March 31, 1999, 100% of the Company contributions were automatically invested in the common stock of the Company. Effective April 1, 1999, the Company contributions were invested in any fund offered by the Plan as elected by the participant. However, existing balances as of March 31, 1999 must remain in the Employer Company Fund until participants are age 55 or older, at which time they may choose to transfer their investment.

Vesting

Through March 31, 1999, amounts attributable to Company contributions become vested on the participant's 65th birthday or if the participant's employment by the Company terminates by reason of the participant's death or permanent disability or the participant has completed five years of service with the Company. Effective April 1, 1999, the Company's contribution

F-16

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Notes to Financial Statements (continued)

 

A. Description of the Plan (continued)

becomes 25% vested after two years from the participant's date of hire and vests 25% more each year, reaching 100% after five years of service. The vesting provisions not related to years of service remain the same.

Investment Options

Upon enrollment in the Plan, a participant may direct employee contributions into any of eight investment options. A participant may contribute a maximum of 25% of employee contributions into the Phillips-Van Heusen Corporation Common Stock Fund.

On April 1, 1999, the Plan offered three new investment options, the S&P 500 Index Fund, the Small Cap Fund and the Russell International Fund. The Russell International Fund replaced the Templeton Foreign Fund.

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 as of the first business day of the month of application as published in The Wall Street Journal, 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 employees who have terminated are retained by the Plan and are used to reduce the Company's future matching contributions. At December 31, 1999, approximately $65,000 was held by the Plan as forfeitures of non-vested terminated employees.

Payment of Benefits

Participants entitled to final distributions generally will receive payment in the form of a lump-sum amount equal to the value of their vested account.

F-17

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Notes to Financial Statements (continued)

 

A. Description of the Plan (continued)

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.

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 in the AIP Master Trust and are segregated from the assets of the Company. The Plan shares in AIP Master Trust interest and investment income based upon its participants' shares of AIP Master Trust net assets available for plan benefits.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States 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, 2000 and 1999, the AIP Master Trust purchased 218,613 and 134,121 shares, respectively, of the Company's common stock and received $201,414 and $206,205, respectively, from the Company as payment of dividends on its common stock. The AIP Master Trust also sold 308,224 and 42,849 shares of the Company's common stock during the years ended December 31, 2000 and 1999, respectively.

F-18

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Notes to Financial Statements (continued)

 

D. Changes in the AIP Master Trust Net Assets Held by Fund

The Plan is one of three plans in the AIP Master Trust and represents an approximate 85% in the trust at December 31, 2000 and 1999. Changes in the AIP Master Trust net assets held by fund during the year ended December 31, 2000 were as follows:

 

Phillips-Van Heusen Corporation Common
Stock Fund

 

Money

Market

Fund

 

 

Bond

Fund

 

 

Balanced

Fund

 

 

Equity

Fund

 

Current

International

Fund

 

 

Small Cap

Fund

 

S&P 500
Index

Fund

 

 

Loan

Fund

 

 

 

Total

                     

Net assets at beginning of year

$11,470,437

$ 7,318,089

$2,181,663

$11,050,161

$23,614,787

$4,494,773

$ 590,045

$2,404,387

$1,012,658

$64,137,000

Interest and investment income

241,462

436,127

140,182

824,130

2,041,452

239

48

38,431

7,982

3,730,053

Contributions received:

                   

Employer Company, net of forfeitures

1,001,222

68,837

42,130

141,679

368,032

87,919

134,025

429,225

-

2,273,069

Employees

235,295

405,572

247,585

872,219

1,882,725

475,499

302,956

852,413

-

5,274,264

Net realized and unrealized appreciation (depreciation)

6,171,260

-

61,565

(111,799)

(2,467,571)

(618,802)

28,415

(419,459)

-

2,643,609

Loans to participants, net of repayments

105,167

777

3,385

20,900

9,863

7,515

7,051

(19,082)

(153,322)

288,898

Payments to participants

(1,433,444)

(1,109,293)

(214,644)

(1,383,482)

(2,695,150)

(725,111)

(105,076)

(281,836)

(17,482)

(7,965,518)

Administrative expenses

(81)

(9,857)

(29)

(1)

(12)

(58,112)

(14,543)

-

-

(82,635)

Transfers (to) from other accounts

(382,389)

(178,702)

(195,518)

(1,358,771)

(1,076,918)

647,330

1,421,311

1,124,339

(682)

-

Net assets at end of year

$17,408,929

$ 6,931,550

$2,266,319

$10,055,036

$21,677,208

$4,311,250

$2,364,232

$4,128,418

$1,155,798

$70,298,740

                     

Plan's beneficial interest at end of year

$14,686,330

$ 5,537,081

$1,826,923

$ 8,706,393

$19,607,756

$3,853,271

$2,088,338

$2,875,285

$ 989,280

$60,170,657

 

F-19

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Notes to Financial Statements (continued)

 

D. Changes in the AIP Master Trust Net Assets Held by Fund (continued)

The Plan is one of three plans in the AIP Master Trust and represents an approximate 85% in the trust at December 31, 2000 and 1999. Changes in the AIP Master Trust net assets held by fund during the year ended December 31, 1999 were as follows:

 

Phillips-Van Heusen Corporation Common
Stock Fund

 

Money

Market

Fund

 

 

Bond

Fund

 

 

Balanced

Fund

 

 

Equity

Fund

 

Prior

International

Fund

 

Current

International

Fund

 

 

Small Cap

Fund

 

S&P 500
Index

Fund

 

 

Loan

Fund

 

 

 

Total

                       

Net assets at beginning of year

$ 9,414,931

$ 11,971,150

$ 2,267,092

$ 11,531,743

$ 21,524,027

$ 3,102,987

$ -

$ -

$ -

$ 1,277,474

$ 61,089,404

Interest and investment income

214,127

430,750

138,478

910,728

1,560,485

23

558

66

20,457

104,046

3,379,718

Contributions received:

                     

Employer Company, net of forfeitures

1,390,132

35,878

29,878

103,013

284,658

927

30,241

48,537

270,658

-

2,193,922

Employees

263,002

475,927

320,138

1,149,344

2,306,608

154,523

293,215

114,911

464,066

-

5,541,734

Net realized and unrealized
appreciation (depreciation)

1,608,452

-

(116,831)

(586,889)

658,027

199,933

1,352,997

105,301

225,610

-

3,446,600

Loans to participants, net of repayments

12,301

(26,125)

(6,087)

(21,836)

(41,100)

11,412

(30,680)

(4,344)

(14,455)

120,914

-

Payments to participants

(1,150,380)

(5,085,127)

(369,106)

(1,370,777)

(2,690,712)

(58,662)

(269,592)

(668)

(21,978)

(490,265)

(11,507,267)

Administrative expenses

(5,048)

(2,017)

(4)

(10)

(15)

(1)

(1)

(2)

(3)

(10)

(7,111)

Transfers (to) from other accounts

(277,080)

(482,347)

(81,895)

(665,155)

12,809

64,882

(357,989)

326,244

1,460,032

499

-

Transfer (to) from International Fund

-

-

-

-

-

(3,476,024)

3,476,024

-

-

-

-

Net assets at end of year

$ 11,470,437

$ 7,318,089

$ 2,181,663

$ 11,050,161

$ 23,614,787

$ -

$ 4,494,773

$ 590,045

$ 2,404,387

$ 1,012,658

$ 64,137,000

Plan's beneficial interest at end of year

$ 9,542,292

$ 5,924,812

$ 1,776,849

$ 9,566,093

$ 20,638,906

$ -

$ 3,961,167

$ 511,149

$ 1,920,628

$ 864,445

$ 54,706,341

 

Note: Certain funds above include investments in the Chase Manhattan Bank Domestic Liquidity Fund.

F-20

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Notes to Financial Statements (continued)

 

E. Non Participant-Directed Investments

Information about the net assets and the significant components of the change in net assets relating to the non-participant directed investments is as follows:.

 

December 31

 

2000

1999

Net assets:

   

Common stock

$14,683,330

$9,542,292

     
   

Year ended December

31, 2000

     

Changes in net assets:

   

Contributions

 

$ 1,071,096

Earnings and net realized and unrealized
appreciation in fair value

 

5,554,826

Distributions to participants

 

(1,241,678)

Transfers to participant directed investments

 

(331,233)

Loans to participants net of repayments

 

91,097

Administrative expenses

 

(70)

   

$ 5,144,038

F. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated April 27, 1995, 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 the Plan is 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-21

Phillips-Van Heusen Corporation

Associates Investment Plan for Salaried Associates

Notes to Financial Statements (continued)

 

G. Differences Between Plan Financial Statements and Form 5500

The following is a reconciliation of net assets available for plan benefits per the financial statements to the Form 5500:

 

December 31

 

2000

1999

     

Net assets available for plan benefits as reported
on the financial statements

$60,170,657

$54,706,341

Less amounts allocated to withdrawn participants
at end of the year

638,931

1,377,887

Net assets available for plan benefits as reported
on the Form 5500

$59,531,726

$53,328,454

The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:

 

Year ended
December

31, 2000

   

Benefits paid to participants per the financial statements

$ 7,141,084

Add amounts allocated to withdrawn participants at
December 31, 2000

638,931

Less amounts allocated to withdrawn participants at
December 31, 1999

(1,377,887)

Benefits paid to participants per the Form 5500

$ 6,402,128

Amounts allocated to withdrawn participants on the Form 5500 represent benefit claims that have been processed and approved for payment prior to year-end but not yet paid.

F-22

EXHIBIT INDEX

 

Exhibit No.

1 Consent of Independent Auditors (Associates Investment Plan for

Hourly Associates)

2 Consent of Independent Auditors (Associates Investment Plan for

Salaried Associates)

Exhibit 1

Exhibit 1

 

 

 

Consent of Independent Auditors

 

 

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-46810) pertaining to the Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates of our report dated June 18, 2001, with respect to the financial statements of the Phillips-Van Heusen Corporation Associates Investment Plan for Hourly Associates included in this Annual Report (Form 11-K) for the year ended December 31, 2000.

 

/s/ Ernst & Young LLP

New York, New York

June 25, 2001

Exhibit 2

Exhibit 2

 

 

 

Consent of Independent Auditors

 

 

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-46810) pertaining to the Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates of our report dated June 18, 2001, with respect to the financial statements of the Phillips-Van Heusen Corporation Associates Investment Plan for Salaried Associates included in this Annual Report (Form 11-K) for the year ended December 31, 2000.

/s/ Ernst & Young LLP

New York, New York

June 25, 2001