Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Impact of the Current Global Economic Environment Our second quarter and first half of 2009 performance was negatively impacted by the deep global recessionary environment and its impact on consumer spending. While there have been some recent signs of stability, we expect difficult economic conditions to continue throughout 2009.
Highlights of the Second Quarter of 2009:
• Although global volatility and challenging economic conditions have affected our businesses, we believe each of our largest brands - Wranglerā, The North Faceā, Leeā and Vansā - which combined account for over 60% of our total annual revenues, gained market share in most markets where sold. See the "Information by Business Segment" section below.

• Revenues decreased 11% from the prior year quarter to $1,485.6 million, with 3% of the decrease resulting from the effects of foreign currency translation.

• Our business in Asia continues to grow rapidly, with revenues up 13% in the quarter.

• Our direct-to-consumer business grew 4% in the quarter, driven by higher sales and new store openings for our The North Faceā, Vansā and 7 for All Mankindā brands. At June 2009, we had 717 VF-operated retail stores.

• Earnings per share declined to $0.68 from $0.94 in the prior year quarter, with $0.16 per share of the decline due to higher pension expense and foreign currency translation. (All per share amounts are presented on a diluted basis.)

• Our balance sheet remains strong with a debt to total capital ratio of 29.1% and a net debt to total capital ratio of 23.4%. VF has over $1.0 billion of available liquidity under committed bank credit lines and no long-term debt payments due until late 2010.