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, 2001

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 Residents Of The Commonwealth Of Puerto Rico

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 PLAN FOR

 

RESIDENTS OF THE COMMONWEALTH

 

OF PUERTO RICO

   
   
   

Date: June 27, 2002

By /s/ Pamela N. Hootkin

 

Pamela N. Hootkin, Member of

 

Administrative Committee

 

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

Financial Statements

Years ended December 31, 2001 and 2000

 

Contents

 

Report of Independent Auditors

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

   

 

 

 

 

 

 

 

 

 

 

 

 

 

F-1

[Letterhead of Ernst & Young LLP]

 

 

 

 

Report of Independent Auditors

Administrative Committee of the Plan

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

We have audited the accompanying statements of net assets available for benefits of the Phillips-Van Heusen Corporation Associates Investment Plan for Residents of the Commonwealth of Puerto Rico as of December 31, 2001 and 2000, 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 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 benefits of the Plan as of December 31, 2001 and 2000, and the changes in its net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States.

 

/s/ Ernst & Young LLP

June 14, 2002

 

 

 

 

 

F-2

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

Statements of Net Assets Available for Benefits

 

 

December 31

 

2001

2000

Assets

   

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

   

Shares of Master Trust:

   

Equity Fund

$15,002

$ 40,456

Bond Fund

8,049

8,629

Balanced Fund

10,905

44,146

International Fund

3,662

3,977

Spartan Equity Index Fund

2,604

1,634

Small Cap Fund

1,449

739

Common Stock-Employer Company Fund

17,629

34,463

Common Trust Fund *

6,894

8,562

Participant loans receivable

1,503

2,384

Net assets available for benefits

$67,697

$144,990

 

 

* Consists of the Money Market Fund (Chase Manhattan Bank Domestic Liquidity Fund).

 

See notes to financial statements.

 

 

 

 

 

 

F-3

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

Statements of Changes in Net Assets Available for Benefits

 

 

Year ended December 31

 

2001

2000

Additions

   

Contributions:

   

Employer Company, net of forfeitures

 

$ 455

Employees

 

1,055

   

1,510

Interest and investment income

$ 2,527

7,460

Total additions

2,527

8,970

     

Deductions

   

Payments to participants

69,591

83,638

Administrative expenses

36

144

Total deductions

69,627

83,782

     

Net realized and unrealized (depreciation) appreciation of investments

(10,193)

5,287

Net decrease

(77,293)

(69,525)

     

Net assets available for benefits at beginning of year

144,990

214,515

Net assets available for benefits at end of year

$ 67,697

$ 144,990

 

 

See notes to financial statements.

 

 

 

 

 

 

 

F-4

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

Notes to Financial Statements

December 31, 2001

 

A. Description of the Plan

The following description of the Phillips-Van Heusen Corporation ("the Company") Associates Investment Plan for Residents of the Commonwealth of Puerto Rico (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 and hourly production associates of Phillips-Van Heusen Corporation (the "Company") who are residents of the Commonwealth of Puerto Rico, 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 reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974 ("ERISA").

Contributions

Each year, participants may contribute up to 10% of pretax 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.

The Company closed its Puerto Rico plant during 2000; therefore, there were no active participants or contributions to the Plan during 2001.

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.

F-5

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

Notes to Financial Statements (continued)

 

A. Description of the Plan (continued)

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 of hire and vests 25% more each year, reaching 100% after five years of service.

Investment Options

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

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-6

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

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 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 Company's Associates Investment Plan Master Trust (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 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, 2001 and 2000, the AIP Master Trust purchased 103,200 and 218,613 shares, respectively, of the Company's common stock and received $187,304 and $201,414, respectively, from the Company as payment of dividends on its common stock. The AIP Master Trust also sold 168,533 and 308,224 shares of the Company's common stock during the years ended December 31, 2001 and 2000, respectively.

F-7

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

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 .09% and .2% interest in the trust at December 31, 2001 and 2000 respectively. Changes in the AIP Master Trust net assets held by fund during the year ended December 31, 2001 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

Spartan Equity
Index

Fund

 

 

Loan

Fund

 

 

 

Total

                     

Net assets at beginning of year

$17,408,929

$ 6,931,550

$2,266,319

$10,055,036

$21,671,208

$4,317,250

$2,364,232

$4,128,418

$1,155,798

$70,298,740

Interest and investment income

211,805

326,000

172,897

521,328

398,155

-

-

54,834

-

1,685,019

Contributions received:

                   

Employer Company, net of forfeitures

904,344

130,593

76,131

158,708

414,788

93,210

180,316

430,467

-

2,388,557

Employees

347,457

576,294

417,928

1,103,647

1,881,342

454,350

509,091

986,114

-

6,276,223

Net realized and unrealized appreciation (depreciation)

(2,480,462)

-

67,698

(628,631)

(2,438,359)

(815,305)

89,859

(590,066)

-

(6,795,266)

Loans to participants, net of repayments

876,751

(73,168)

(18,458)

(91,618)

(103,105)

(18,936)

(11,975)

(7,568)

428,822

980,745

Payments to participants

(1,952,865)

(986,112)

(263,837)

(934,613)

(1,388,626)

(239,222)

(145,340)

(295,294)

(63,404)

(6,269,313)

Administrative expenses

-

(17,517)

-

-

-

(32,813)

(17,774)

-

-

(68,104)

Transfers (to) from other accounts

(1,401,694)

1,496,789

1,146,720

(119,159)

(740,827)

(533,189)

104,654

46,706

-

-

Net assets at end of year

$13,914,265

$8,384,429

$3,865,398

$10,064,698

$19,694,576

$3,225,345

$3,073,063

$4,753,611

$1,521,216

$68,496,601

                     

Plan's beneficial interest at end of year

$ 17,629

$ 6,894

$ 8,049

$ 10,905

$ 15,002

$ 3,662

$ 1,449

$ 2,604

$ 1,503

$ 67,697

 

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

F-8

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

Notes to Financial Statements (continued)

 

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

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

$ 34,463

$ 8,562

$ 8,629

$ 44,146

$ 40,456

$ 3,977

$ 739

$ 1,634

$ 2,384

$ 144,990

 

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

F-9

Phillips-Van Heusen Corporation

Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico

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

 

2001

2000

Net assets:

   

Common stock

$17,629

$34,463

     
   

Year ended December

31, 2001

     

Changes in net assets:

   

Contributions

 

$ 6,030

Earnings and net realized and unrealized
depreciation in fair value

 

(10,928)

Distributions to participants

 

(9,407)

Transfers to participant directed investments

 

(6,752)

Loans to participants, net of repayments

 

4,223

   

$(16,834)

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 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

EXHIBIT INDEX

 

Exhibit No.

1 Consent of Independent Auditors

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 Residents of the Commonwealth of Puerto Rico of our report dated June 14, 2002, with respect to the financial statements of the Phillips-Van Heusen Corporation Associates Investment Plan for Associates who are residents of the Commonwealth of Puerto Rico included in this Annual Report (Form 11-K) for the year ended December 31, 2001.

 

/s/ Ernst & Young LLP

New York, New York

June 25, 2002