North Face 1999 Annual Report Download - page 28

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Note D Property, Plant and Equipment
In thousands 1999 1998
Land $ 46,626 $ 45,296
Buildings 478,372 443,619
Machinery and equipment 1,289,064 1,222,216
1,814,062 1,711,131
Less accumulated depreciation 1,009,640 935,040
$ 804,422 $ 776,091
Note E Short-term Borrowings
In thousands 1999 1998
Commercial paper $319,033 $ –
Banks 89,899 244,910
$408,932 $244,910
The weighted average interest rate for short-term borrowings was 6.5%
at the end of 1999 and 5.8% at the end of 1998. The Company main-
tains an unsecured revolving credit agreement with a group of banks for
$750.0 million that supports commercial paper borrowings and is oth-
erwise available for general corporate purposes. The agreement, which
extends to July 2004, requires an .08% facility fee per year and contains
various financial covenants, including a debt to net worth requirement.
At January 1, 2000, there were no borrowings under the agreement.
Note F Accrued Liabilities
In thousands 1999 1998
Income taxes $ 59,242 $ 70,112
Compensation 71,798 103,769
Other 236,084 272,120
$367,124 $446,001
Note G Long-term Debt
In thousands 1999 1998
9.50% notes, due 2001 $100,000 $100,000
6.63% notes, due 2003 100,000 100,000
7.60% notes, due 2004 100,000 100,000
6.75% notes, due 2005 100,000 100,000
9.25% debentures, due 2022 100,000 100,000
Other 22,585 22,626
522,585 522,626
Less current portion 4,751 969
$517,834 $521,657
The scheduled payments of long-term debt are $114.0 million in
2001, $.5 million in 2002, $100.4 million in 2003 and $100.4 mil-
lion in 2004. The Company paid interest of $73.4 million in 1999,
$59.5 million in 1998 and $48.0 million in 1997.
Note H Other Liabilities
In thousands 1999 1998
Deferred compensation $179,321 $151,436
Deferred income taxes – 11,512
Other 14,792 18,802
$194,113 $181,750
Note I Benefit Plans
The Company sponsors a noncontributory defined benefit pension
plan covering substantially all full-time domestic employees and a
nonqualified supplemental defined benefit pension plan covering
key employees. The effect of the defined benefit plans on income is
as follows:
In thousands 1999 1998 1997
Service cost – benefits earned
during the year $ 22,174 $ 20,391 $ 17,264
Interest cost on projected
benefit obligation 41,166 38,584 35,934
Expected return on plan assets (50,692) (45,270) (34,771)
Amortization of:
Transition asset – (3,068) (4,378)
Prior service cost 5,359 5,667 5,475
Actuarial (gain) loss (831) 610 391
Pension expense $ 17,176 $ 16,914 $ 19,915
The following provides a reconciliation of the changes in fair
value of the pension plans’ assets and benefit obligations, based on a
September 30 valuation date, plus the funded status at the end of
each year:
In thousands 1999 1998
Fair value of plan assets, beginning of year $553,591 $526,087
Actual return on plan assets 112,848 28,013
Company contributions 24,000 20,400
Benefits paid (23,144) (20,909)
Fair value of plan assets, end of year 667,295 553,591
Benefit obligations, beginning of year 591,726 503,340
Service cost 22,174 20,391
Interest cost 41,166 38,584
Plan amendments – 22,427
Actuarial (gain) loss (44,831) 29,019
Benefits paid (24,385) (22,035)
Benefit obligations, end of year 585,850 591,726
Funded status, end of year 81,445 (38,135)
Unrecognized net actuarial (gain) loss (88,095) 17,825
Unrecognized prior service cost 29,911 35,269
Pension asset, net $ 23,261 $ 14,959
Amount included in:
Other Assets $ 47,633 $ 35,164
Other Liabilities (24,372) (20,205)
$ 23,261 $ 14,959