VF Corporation announced that it will early adopt the provisions of Financial Accounting Standards Board Statement No. 123 (Revised 2004), Share-Based Payment during the fourth quarter of 2005.
This Statement requires the expensing of stock options and also modifies the accounting for certain other share-based compensation.
Under the method of adoption chosen by VF, full year 2005 operating results will be reported as though stock options had been expensed beginning in January 2005.
Accordingly, the Company will be restating its operating results for the first three quarters of 2005. Prior years' financial statements will not be restated.
The Company estimates that the impact of adopting Statement 123 on 2005 after-tax earnings (before a cumulative effect adjustment) will be $17 million or $0.15 per diluted share.
In addition, a one-time after-tax cumulative effect adjustment of $12 million or $0.10 per diluted share related to the adoption of this new Statement will be recognized as of the beginning of 2005.
For 2006, the Company estimates that the new rules will impact net income by $19 million or $0.17 per diluted share.
The attached table summarizes the estimated additional expense under Statement No. 123 for each of the 2005 quarters.
The higher impact in the first quarter reflects the requirement under Statement 123 of expensing stock options granted to retirement-eligible employees at the date of the stock option grant.
Restated 2005 quarterly financial statements and other data will be included in the Company's fourth quarter earnings release on February 8, 2006.
The Company will hold a conference call the same morning at 8:30 a.m. EST.
VF Corporation is a leader in branded apparel including jeanswear, outdoor products, intimate apparel, image apparel and sportswear.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
