EXCHANGE ACT OF 1934
ACT OF 1934
Delaware | 13-3228013 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
727 Fifth Avenue, New York, New York | 10022 | |
(Address of principal executive offices) | (Zip code) |
Title of each class | Name of each exchange On which registered | |
Common Stock, $.01 par value per share | New York Stock Exchange | |
Stock Purchase Rights | New York Stock Exchange |
TIFFANY & CO.
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% to total | % to total | % to total | % to total | % to total | % to total | |||||||||||||||||||
U.S. Retail | U.S. Retail | U.S. Retail | Japan Retail | Japan Retail | Japan Retail | |||||||||||||||||||
Category | Sales 2005 | Sales 2004 | Sales 2003 | Sales 2005 | Sales 2004 | Sales 2003 | ||||||||||||||||||
A | 30 | % | 28 | % | 25 | % | 26 | % | 24 | % | 23 | % | ||||||||||||
B | 15 | % | 14 | % | 13 | % | 30 | % | 29 | % | 28 | % | ||||||||||||
C | 9 | % | 10 | % | 9 | % | 12 | % | 13 | % | 13 | % | ||||||||||||
D | 29 | % | 29 | % | 30 | % | 22 | % | 24 | % | 26 | % | ||||||||||||
A) | This category includes most gemstone jewelry and gemstone band rings, other than engagement jewelry. Most jewelry in this category is constructed of platinum, although gold was used in approximately 18% of pieces in the U.S. and approximately 9% of pieces in Japan in 2005. Most items in this category contain diamonds, other gems or both. The average U.S. price-point for goods sold in 2005 for merchandise in this category was $3,692 in the U.S. and $2,105 in Japan. | |
B) | This category includes diamond rings and wedding bands marketed to brides and grooms. Most jewelry in this category is constructed of platinum, although gold was used in approximately 5% of pieces in the U.S. and approximately 1% of pieces in Japan in 2005. Most sales in this category are of items containing diamonds. The average U.S. price-point for goods sold in 2005 for merchandise in this category was $4,214 in the U.S. and $1,625 in Japan. | |
C) | This category generally consists of non-gemstone, gold or platinum jewelry, although small gems are used as accents in some pieces. The average U.S. price-point for goods sold in 2005 for merchandise in this category was $953 in the U.S. and $945 in Japan. | |
D) | This category generally consists of non-gemstone, sterling silver jewelry, although small gems are used as accents in some pieces. The average U.S. price-point for goods sold in 2005 for merchandise in this category was $187 in the U.S. and $215 in Japan. |
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Fiscal | Fiscal | |||||||||
Year | Year | |||||||||
Store Locations | Opened | Store Locations | Opened | |||||||
San Francisco, California | 1963 | Seattle, Washington | 1998 | |||||||
Houston, Texas | 1963 | Scottsdale, Arizona | 1998 | |||||||
Beverly Hills, California | 1964 | Century City, California | 1999 | |||||||
Chicago, Illinois | 1966 | Dallas (NorthPark), Texas | 1999 | |||||||
Atlanta, Georgia | 1969 | Boca Raton, Florida | 1999 | |||||||
Dallas, Texas | 1982 | Tamuning, Guam | 1999 | |||||||
Boston, Massachusetts | 1984 | Old Orchard (Skokie), Illinois | 2000 | |||||||
Costa Mesa, California | 1988 | Maui (Wailea), Hawaii | 2000 | |||||||
Philadelphia, Pennsylvania | 1990 | Greenwich, Connecticut | 2000 | |||||||
Vienna, Virginia | 1990 | Portland, Oregon | 2000 | |||||||
Palm Beach, Florida | 1991 | Tampa, Florida | 2001 | |||||||
Honolulu (Ala Moana), Hawaii | 1992 | Santa Clara (San Jose), California | 2001 | |||||||
San Diego, California | 1992 | Honolulu (Waikiki), Hawaii | 2002 | |||||||
Troy, Michigan | 1992 | Bellevue, Washington | 2002 | |||||||
Bal Harbour, Florida | 1993 | East Hampton, New York | 2002 | |||||||
Maui, Hawaii | 1994 | St. Louis, Missouri | 2002 | |||||||
Oak Brook, Illinois | 1994 | Orlando, Florida | 2002 | |||||||
King of Prussia, Pennsylvania | 1995 | Coral Gables, Florida | 2003 | |||||||
Short Hills, New Jersey | 1995 | Tumon Bay (DFS), Guam | 2003 | |||||||
White Plains, New York | 1995 | Palm Desert, California | 2003 | |||||||
Hackensack, New Jersey | 1996 | Walnut Creek, California | 2003 | |||||||
Chevy Chase, Maryland | 1996 | Edina, Minnesota | 2004 | |||||||
Charlotte, North Carolina | 1997 | Kansas City, Missouri | 2004 | |||||||
Chestnut Hill, Massachusetts | 1997 | Palm Beach Gardens, Florida | 2004 | |||||||
Cincinnati, Ohio | 1997 | Westport, Connecticut | 2004 | |||||||
Palo Alto, California | 1997 | Carmel, California | 2005 | |||||||
Denver, Colorado | 1998 | Naples, Florida | 2005 | |||||||
Las Vegas, Nevada | 1998 | Pasadena, California | 2005 | |||||||
Manhasset, New York | 1998 | San Antonio, Texas | 2005 | |||||||
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Europe | ||
England: London, Old Bond Street | Germany: Frankfurt | |
England: London, Royal Exchange | Germany: Munich | |
England: London, Harrods Department Store | Italy: Florence | |
England: London, Sloane Street | Italy: Milan | |
France: Paris, Rue de la Paix | Italy: Rome | |
France: Paris, Printemps Department Store | Switzerland: Zurich | |
France: Paris, Galeries Lafayette | ||
Canada and Central/South America | ||
Canada: Toronto | Mexico: Puebla, Palacio Store | |
Brazil: Sao Paulo, Jardins | Mexico: Mexico City, Palacio Store, Polanco | |
Brazil: Sao Paulo, Iguatemi Shopping Center | Mexico: Mexico City, Masaryk | |
Mexico: Mexico City, Palacio Store, Perisur | Mexico: Monterrey (open 2/06) | |
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Japan | ||
Abeno, Kintetsu Department Store | Okinawa, Mitsukoshi Department Store * | |
Chiba, Mitsukoshi Department Store * | Osaka, Takashimaya Department Store | |
Fukuoka, Mitsukoshi Department Store * | Osaka, Umeda | |
Ginza, Mitsukoshi Department Store * | Sagamihara, Isetan Department Store | |
Hiroshima, Mitsukoshi Department Store * | Sapporo, Mitsukoshi Department Store * | |
Ikebukuro, Mitsukoshi Department Store * | Sapporo, Daimaru Department Store | |
Ikebukuro, Tobu Department Store | Sendai, Mitsukoshi Department Store * | |
Kagoshima, Mitsukoshi Department Store * | Shinjuku, Isetan Department Store | |
Kanazawa, Mitsukoshi * | Shinjuku, Mitsukoshi Department Store * | |
Kashiwa, Takashimaya Department Store | Shinsaibashi, Sogo Department Store | |
Kawasaki, Saikaya Department Store | Shizuoka, Matsuzakaya Department Store | |
Kobe, Daimaru Department Store | Tachikawa, Isetan Department Store | |
Kochi, Daimaru Department Store | Takamatsu, Mitsukoshi Department Store * | |
Kokura, Izutsuya Department Store | Takasaki, Takashimaya Department Store | |
Koriyama, Usui Department Store | Tamagawa, Takashimaya Department Store | |
Kumamoto, Tsuruya Department Store | Tokyo Bay, Ikspiari * | |
Kyoto, Daimaru Department Store | Tokyo, Ginza Flagship Store * | |
Kyoto, Takashimaya Department Store | Tokyo, Marunouchi | |
Matsuyama, Mitsukoshi Department Store * | Tottori, Daimaru Department Store | |
Mito, Keisei Department Store (open 3/06) | Umeda, Daimaru Department Store | |
Nagoya Hoshigaoka, Mitsukoshi Dept. Store * | Utsunomiya, Tobu Department Store | |
Nagoya, Mitsukoshi * | Wakayama, Kintetsu Department Store | |
Nagoya, Takashimaya Department Store | Yokohama, Landmark Plaza, Mitsukoshi * | |
Nihonbashi, Mitsukoshi Department Store * | Yokohama, Takashimaya Department Store | |
Niigata, Mitsukoshi Department Store * | Yonago, Takashimaya Dept. Store (open 3/06) | |
Oita, Tokiwa Department Store | ||
Okayama, Tenmaya Department Store | ||
Asia-Pacific Excluding Japan | ||
Australia: Brisbane, Queensplaza | Korea: Seoul, Hyundai Department Store | |
Australia: Melbourne, Collins Street | Korea: Seoul, Hyundai Coex Department Store | |
Australia: Sydney, Castlereagh Street | Korea: Seoul, Lotte Downtown Department Store | |
China: Beijing, The Peninsula Palace Hotel | Korea: Seoul, Lotte World | |
China: Shanghai, Jiu Guang City Plaza | Malaysia: Suria KLCC | |
Hong Kong: Hong Kong International Airport | Singapore: Ngee Ann City | |
Hong Kong: International Finance Center | Singapore: Raffles Hotel | |
Hong Kong: The Landmark Center | Taiwan: Kaohsiung, Hanshin Department Store | |
Hong Kong: Pacific Place | Taiwan: Taipei, The Regent Hotel | |
Hong Kong: The Peninsula Hotel | Taiwan: Taipei, Sogo Department Store | |
Hong Kong: Sogo Department Store | Taiwan: Taichung, Sogo Department Store | |
Korea: Busan, Paradise Hotel | Taiwan: Taipei, Taipei Financial Center | |
Korea: Seoul, Galleria Luxury Hall East Dept. Store | ||
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Canada, | ||||||||||||||||||||||||
Central/Latin/ | ||||||||||||||||||||||||
End of | South | Other | ||||||||||||||||||||||
Fiscal: | U.S. | Americas | Europe | Japan | Asia-Pacific | Total | ||||||||||||||||||
1987 | 8 | 0 | 2 | 0 | 0 | 10 | ||||||||||||||||||
1988 | 9 | 0 | 3 | 0 | 1 | 13 | ||||||||||||||||||
1989 | 9 | 0 | 5 | 0 | 2 | 16 | ||||||||||||||||||
1990 | 12 | 0 | 5 | 0 | 3 | 20 | ||||||||||||||||||
1991 | 13 | 1 | 7 | 0 | 4 | 25 | ||||||||||||||||||
1992 | 16 | 1 | 7 | 7 | 4 | 35 | ||||||||||||||||||
1993 | 16 | 1 | 6 | 37 | * | 5 | 65 | |||||||||||||||||
1994 | 18 | 1 | 6 | 37 | 7 | 69 | ||||||||||||||||||
1995 | 21 | 1 | 6 | 38 | 9 | 75 | ||||||||||||||||||
1996 | 23 | 1 | 6 | 39 | 12 | 81 | ||||||||||||||||||
1997 | 28 | 2 | 7 | 42 | 17 | 96 | ||||||||||||||||||
1998 | 34 | 2 | 7 | 44 | 17 | 104 | ||||||||||||||||||
1999 | 38 | 3 | 8 | 44 | 17 | 110 | ||||||||||||||||||
2000 | 42 | 4 | 8 | 44 | 21 | 119 | ||||||||||||||||||
2001 | 44 | 5 | 10 | 47 | 20 | 126 | ||||||||||||||||||
2002 | 47 | 5 | 11 | 48 | 20 | 131 | ||||||||||||||||||
2003 | 51 | 7 | 11 | 50 | 22 | 141 | ||||||||||||||||||
2004 | 55 | 7 | 12 | 53 | 24 | 151 | ||||||||||||||||||
2005 | 59 | 7 | 13 | 50 | 25 | 154 | ||||||||||||||||||
TIFFANY & CO.
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2005 | 2004 | 2003 | ||||||||||
Number of names on U.S. catalog mailing and U.S. Internet lists at fiscal year-end (consists of U.S. customers who purchased by mail, telephone or Internet prior to the applicable date): | 2,821,638 | 2,440,622 | 2,237,349 | |||||||||
Total U.S. catalog mailings during fiscal year (in millions): | 24.4 | 26.3 | 24.9 | |||||||||
Total U.S. mail, telephone or Internet orders received during fiscal year: | 704,221 | 672,325 | 728,525 | |||||||||
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2005 | 2004 | 2003 | ||||||||||||||
Finished Goods produced by Tiffany* | 65 | % | 63 | % | 57 | % | ||||||||||
Finished Goods purchased from others | 35 | % | 37 | % | 43 | % | ||||||||||
100 | % | 100 | % | 100 | % | |||||||||||
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Other | ||||||||||||||||
2005 | United States | Japan | Countries | Total | ||||||||||||
Beginning of year | 55 | 53 | 43 | 151 | ||||||||||||
Opened, net of relocations | 4 | 2 | 2 | 8 | ||||||||||||
Closed | – | (5 | ) | – | (5 | ) | ||||||||||
End of year | 59 | 50 | 45 | 154 | ||||||||||||
Other | ||||||||||||||||
2004 | United States | Japan | Countries | Total | ||||||||||||
Beginning of year | 51 | 50 | 40 | 141 | ||||||||||||
Opened, net of relocations | 4 | 4 | 3 | 11 | ||||||||||||
Closed | — | (1 | ) | — | (1 | ) | ||||||||||
End of year | 55 | 53 | 43 | 151 | ||||||||||||
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High | Low | |||||||||||
First Fiscal Quarter | $ | 35.25 | $ | 29.53 | ||||||||
Second Fiscal Quarter | $ | 34.84 | $ | 28.60 | ||||||||
Third Fiscal Quarter | $ | 41.47 | $ | 33.11 | ||||||||
Fourth Fiscal Quarter | $ | 43.80 | $ | 37.47 | ||||||||
High | Low | |||||||||||
First Fiscal Quarter | $ | 43.26 | $ | 35.44 | ||||||||
Second Fiscal Quarter | $ | 39.78 | $ | 32.38 | ||||||||
Third Fiscal Quarter | $ | 35.94 | $ | 27.00 | ||||||||
Fourth Fiscal Quarter | $ | 32.76 | $ | 29.47 | ||||||||
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(d) Maximum Number | ||||||||||||||||
(c) Total Number of | (or Approximate Dollar | |||||||||||||||
Shares (or Units) | Value) of Shares, (or | |||||||||||||||
(a) Total Number of | (b) Average Price | Purchased as Part of | Units) that May Yet Be | |||||||||||||
Shares (or Units) | Paid per Share (or | Publicly Announced | Purchased Under the | |||||||||||||
Period | Purchased | Unit) | Plans or Programs* | Plans or Programs* | ||||||||||||
November 1, 2005 to November 30, 2005 | – | – | – | $294,640,000 | ||||||||||||
December 1, 2005 to December 31, 2005 | – | – | – | $294,640,000 | ||||||||||||
January 1, 2006 to January 31, 2006 | 469,050 | $39.39 | 469,050 | $276,166,000 | ||||||||||||
TOTAL | 469,050 | $39.39 | 469,050 | $276,166,000 | * | |||||||||||
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(in thousands, except per share amounts, | ||||||||||||||||||||||
percentages, ratios, retail locations and | ||||||||||||||||||||||
employees) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||
EARNINGS DATA | ||||||||||||||||||||||
Net sales | $ | 2,395,153 | $ | 2,204,831 | $ | 2,000,045 | $ | 1,706,602 | $ | 1,606,535 | ||||||||||||
Gross profit | 1,342,340 | 1,230,573 | 1,157,382 | 1,011,448 | 943,477 | |||||||||||||||||
Earnings from operations | 382,705 | 294,529 | 355,519 | 319,197 | 309,897 | |||||||||||||||||
Net earnings | 254,655 | 304,299 | 215,517 | 189,894 | 173,587 | |||||||||||||||||
Net earnings per diluted share | 1.75 | 2.05 | 1.45 | 1.28 | 1.15 | |||||||||||||||||
Weighted-average number of diluted common shares | 145,578 | 148,093 | 148,472 | 148,591 | 150,517 | |||||||||||||||||
BALANCE SHEET AND CASH FLOW DATA | ||||||||||||||||||||||
Total assets | $ | 2,777,272 | $ | 2,666,118 | $ | 2,391,088 | $ | 1,923,586 | $ | 1,631,074 | ||||||||||||
Cash and cash equivalents | 393,609 | 187,681 | 248,665 | 156,197 | 173,675 | |||||||||||||||||
Short-term investments | – | 139,200 | 27,450 | – | – | |||||||||||||||||
Inventories, net | 1,060,164 | 1,057,245 | 871,251 | 732,088 | 611,653 | |||||||||||||||||
Short-term borrowings and long-term debt (including current portion) | 471,676 | 440,563 | 486,859 | 349,659 | 270,967 | |||||||||||||||||
Stockholders’ equity | 1,830,913 | 1,701,160 | 1,468,200 | 1,208,049 | 1,036,945 | |||||||||||||||||
Working capital | 1,334,233 | 1,208,068 | 952,923 | 770,481 | 638,709 | |||||||||||||||||
Cash flows from operating activities | 262,691 | 130,853 | 283,842 | 221,441 | 241,506 | |||||||||||||||||
Capital expenditures | 157,036 | 142,321 | 272,900 | 219,717 | 170,806 | |||||||||||||||||
Stockholders’ equity per share | 12.85 | 11.77 | 10.01 | 8.34 | 7.15 | |||||||||||||||||
Cash dividends paid per share | 0.30 | 0.23 | 0.19 | 0.16 | 0.16 | |||||||||||||||||
RATIO ANALYSIS AND OTHER DATA | ||||||||||||||||||||||
As a percentage of net sales: | ||||||||||||||||||||||
Gross profit | 56.0 | % | 55.8 | % | 57.9 | % | 59.3 | % | 58.7 | % | ||||||||||||
Earnings from operations | 15.9 | % | 13.4 | % | 17.8 | % | 18.7 | % | 19.3 | % | ||||||||||||
Net earnings | 10.6 | % | 13.8 | % | 10.8 | % | 11.1 | % | 10.8 | % | ||||||||||||
Capital expenditures | 6.6 | % | 6.5 | % | 13.6 | % | 12.9 | % | 10.6 | % | ||||||||||||
Return on average assets | 9.4 | % | 12.0 | % | 10.0 | % | 10.7 | % | 10.9 | % | ||||||||||||
Return on average stockholders’ equity | 14.4 | % | 19.2 | % | 16.1 | % | 16.9 | % | 17.7 | % | ||||||||||||
Total debt-to-equity ratio | 25.8 | % | 25.9 | % | 33.2 | % | 28.9 | % | 26.1 | % | ||||||||||||
Company-operated TIFFANY & CO. stores and boutiques | 154 | 151 | 141 | 131 | 126 | |||||||||||||||||
Number of employees | 8,120 | 7,341 | 6,862 | 6,431 | 5,938 | |||||||||||||||||
TIFFANY & CO.
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• | Net sales rose 9% to $2.4 billion. Worldwide comparable store sales rose 5% on a constant-exchange-rate basis (see Non-GAAP Measures). |
• | Japan retail sales, on a constant-exchange-rate basis, increased 4% in 2005 while comparable store sales were flat after three years of declines. Management believes that the comparable store sales decline was stemmed due to new product introductions, initiatives in sales training and improvements in the economic environment. |
• | Net earnings decreased 16%, or $50 million, to $255 million. Prior year net earnings were not representative because they benefited from a $125 million gain, net of tax, from the Company’s sale of its equity investment in Aber Diamond Corporation (“Aber”). |
• | The Company repatriated $178 million in accumulated earnings from foreign affiliates, which resulted in a lower effective tax rate. |
• | Company-operated square footage of TIFFANY & CO. stores increased 2%. The Company added eight retail locations – four in the U.S., two in Japan and one each in Australia and France. In addition, five existing locations were closed in Japan. |
• | E-commerce sites were launched in Canada and Japan. |
• | The Company sold and leased back its Retail Service Center (a distribution and administrative office facility) and received proceeds of $75 million. |
• | The Board of Directors increased the annual dividend rate by 33%. |
• | The Company repurchased 3.8 million shares of its Common Stock. |
TIFFANY & CO.
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2005 | 2004 | |||||||||||||||||||||||
Constant- | Constant- | |||||||||||||||||||||||
GAAP | Translation | Exchange- | GAAP | Translation | Exchange- | |||||||||||||||||||
Net Sales | Reported | Effect | Rate Basis | Reported | Effect | Rate Basis | ||||||||||||||||||
Worldwide | 9 | % | – | 9 | % | 10 | % | 2 | % | 8 | % | |||||||||||||
U.S. Retail | 9 | % | – | 9 | % | 10 | % | – | 10 | % | ||||||||||||||
International Retail | 5 | % | (2 | )% | 7 | % | 10 | % | 6 | % | 4 | % | ||||||||||||
Japan Retail | – | (4 | )% | 4 | % | 1 | % | 6 | % | (5 | )% | |||||||||||||
Other Asia-Pacific | 17 | % | 3 | % | 14 | % | 27 | % | 4 | % | 23 | % | ||||||||||||
Europe | 4 | % | (3 | )% | 7 | % | 23 | % | 11 | % | 12 | % |
2005 | 2004 | |||||||||||||||||||||||
Constant- | Constant- | |||||||||||||||||||||||
Comparable | GAAP | Translation | Exchange- | GAAP | Translation | Exchange- | ||||||||||||||||||
Store Sales | Reported | Effect | Rate Basis | Reported | Effect | Rate Basis | ||||||||||||||||||
Worldwide | 4 | % | (1 | )% | 5 | % | 7 | % | 3 | % | 4 | % | ||||||||||||
U.S. Retail | 7 | % | – | 7 | % | 10 | % | – | 10 | % | ||||||||||||||
International Retail | – | (2 | )% | 2 | % | 3 | % | 6 | % | (3 | )% | |||||||||||||
Japan Retail | (4 | )% | (4 | )% | – | (2 | )% | 6 | % | (8 | )% | |||||||||||||
Other Asia-Pacific | 10 | % | 2 | % | 8 | % | 15 | % | 4 | % | 11 | % | ||||||||||||
Europe | (2 | )% | (3 | )% | 1 | % | 13 | % | 10 | % | 3 | % |
2005 | 2004 | 2003 | ||||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
Cost of sales | 44.0 | 44.2 | 42.1 | |||||||||||||||
Gross profit | 56.0 | 55.8 | 57.9 | |||||||||||||||
Selling, general and administrative expenses | 40.1 | 42.4 | 40.1 | |||||||||||||||
Earnings from operations | 15.9 | 13.4 | 17.8 | |||||||||||||||
Interest, financing and other income, net | 0.5 | 0.8 | 0.7 | |||||||||||||||
Gain on sale of equity investment | – | 8.8 | – | |||||||||||||||
Earnings before income taxes | 15.4 | 21.4 | 17.1 | |||||||||||||||
Provision for income taxes | 4.8 | 7.6 | 6.3 | |||||||||||||||
Net earnings | 10.6 | % | 13.8 | % | 10.8 | % | ||||||||||||
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2005 vs. 2004 | 2004 vs. 2003 | |||||||||||||||||||
(in thousands) | 2005 | 2004 | 2003 | Increase | Increase | |||||||||||||||
U.S. Retail | $ | 1,220,683 | $ | 1,116,845 | $ | 1,013,034 | 9 | % | 10 | % | ||||||||||
International Retail | 900,689 | 857,360 | 781,572 | 5 | % | 10 | % | |||||||||||||
Direct Marketing | 157,483 | 142,508 | 133,254 | 11 | % | 7 | % | |||||||||||||
Other | 116,298 | 88,118 | 72,185 | 32 | % | 22 | % | |||||||||||||
$ | 2,395,153 | $ | 2,204,831 | $ | 2,000,045 | 9 | % | 10 | % | |||||||||||
2005 | 2004 | 2003 | ||||||||||||||||||||||
New York Flagship store | 10 | % | 10 | % | 10 | % | ||||||||||||||||||
Branch stores | 39 | % | 39 | % | 39 | % | ||||||||||||||||||
Business-to-business | 2 | % | 2 | % | 2 | % | ||||||||||||||||||
51 | % | 51 | % | 51 | % | |||||||||||||||||||
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2005 | 2004 | 2003 | ||||||||||||||||||||||
Japan | 20 | % | 22 | % | 24 | % | ||||||||||||||||||
Other Asia-Pacific | 8 | % | 7 | % | 6 | % | ||||||||||||||||||
Europe | 6 | % | 6 | % | 6 | % | ||||||||||||||||||
Other | 4 | % | 4 | % | 3 | % | ||||||||||||||||||
38 | % | 39 | % | 39 | % | |||||||||||||||||||
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TIFFANY & CO.
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• | $25,000,000 contribution to The Tiffany & Co. Foundation. The contribution was made from the proceeds received from the Company’s sale of its equity investment in Aber. The Tiffany & Co. Foundation is a non-profit organization that provides grants to other non-profit organizations; | ||
• | $19,006,000 due to the early adoption, retroactive to February 1, 2004, of SFAS No. 123R; | ||
• | $12,193,000 impairment charge. In accordance with its policy on impairment of goodwill and long-lived assets, the Company identified impairment losses in one of its international retail markets and in one of its specialty retail businesses as a result of store performance and cash flow projections; and | ||
• | $2,932,000 of exit costs associated with discontinuing a specialty retail concept that the Company decided not to pursue. |
% of | % of | % of | ||||||||||||||||||||||||||
(in thousands) | 2005 | Sales* | 2004 | Sales* | 2003 | Sales* | ||||||||||||||||||||||
Earnings (losses) from operations: | ||||||||||||||||||||||||||||
U.S. Retail | $ | 268,769 | 22 | % | $ | 227,302 | 20 | % | $ | 224,149 | 22 | % | ||||||||||||||||
International Retail | 212,496 | 24 | % | 202,260 | 24 | % | 213,666 | 27 | % | |||||||||||||||||||
Direct Marketing | 58,542 | 37 | % | 47,566 | 33 | % | 46,813 | 35 | % | |||||||||||||||||||
Other | (18,829 | ) | (16 | )% | (23,290 | ) | (26 | )% | (8,460 | ) | (12 | )% | ||||||||||||||||
520,978 | 453,838 | 476,168 | ||||||||||||||||||||||||||
Unallocated corporate expenses | (138,273 | ) | (159,309 | ) | (120,649 | ) | ||||||||||||||||||||||
Earnings from operations | $ | 382,705 | $ | 294,529 | $ | 355,519 | ||||||||||||||||||||||
TIFFANY & CO.
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• | U.S. Retail – increased 2 percentage points primarily due to increased sales and gross margin and the leveraging of fixed expenses; | ||
• | International Retail – was consistent with the prior year; |
• | Direct Marketing – increased 4 percentage points primarily due to increased sales and gross margin and the leveraging of fixed expenses; | ||
• | Other – decreased loss of 10 percentage points primarily due to the absence of impairment and exit costs incurred in 2004. Excluding these charges from the 2004 loss from operations, the ratio of losses from operations to net sales would have been equal to the prior year. |
• | U.S. Retail – decreased 2 percentage points primarily due to shifts in product sales mix toward higher-priced, lower margin diamond jewelry and higher inventory costs; | ||
• | International Retail – decreased 3 percentage points primarily due to product sales mix, higher inventory costs, increased import tariffs on U.S. manufactured products shipped to Europe and increased SG&A expenses; | ||
• | Direct Marketing – decreased 2 percentage points primarily due to lower sales and higher fixed expenses, mostly associated with the Customer Fulfillment Center, a distribution facility, which opened in September 2003 and primarily supports the Direct Marketing segment; | ||
• | Other – increased loss of 14 percentage points primarily due to impairment and exit costs incurred in 2004, expenses associated with the start-up and development of new specialty retail concepts and sales of diamonds unsuitable for the Company’s production, which earn a minimal to no gross margin. |
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• | Net sales growth of 10%. This objective assumes mid-single-digit worldwide comparable store sales growth on a constant-exchange-rate basis for the full year, including a high-single-digit increase in the U.S. and low-single-digit growth in Japan. | ||
• | Gross margin equal to fiscal year 2005. | ||
• | Improvement in the ratio of SG&A to net sales. | ||
• | Earnings before income taxes growth of at least 12%. | ||
• | Effective tax rate of 38%. | ||
• | Diluted earnings per share in a range of $1.77 – $1.82. |
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(in thousands, except per share amounts) | 2005 | 2004 | 2003 | |||||||||
Cost of repurchases | $ | 132,816 | $ | 86,732 | $ | 4,610 | ||||||
Shares repurchased and retired | 3,835 | 2,735 | 200 | |||||||||
Average cost per share | $ | 34.63 | $ | 31.71 | $ | 23.05 |
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(in thousands) | Total | 2006 | 2007-2008 | 2009-2010 | Thereafter | |||||||||||||||||||
Operating leases | $ | 724,446 | $ | 94,526 | $ | 165,675 | $ | 131,468 | $ | 332,777 | ||||||||||||||
Inventory purchase obligations | 501,293 | 151,293 | 100,000 | 100,000 | 150,000 | |||||||||||||||||||
Short-term borrowings and long- term debt | 471,676 | 45,128 | 72,372 | 250,848 | 103,328 | |||||||||||||||||||
Interest on debt and interest- rate swap agreementsa | 90,786 | 19,666 | 38,690 | 25,930 | 6,500 | |||||||||||||||||||
Construction-in-progress | 23,910 | 23,160 | 180 | 180 | 390 | |||||||||||||||||||
Non-inventory purchase obligations | 6,677 | 6,677 | – | – | – | |||||||||||||||||||
Other contractual obligationsb | 9,609 | 7,250 | 1,259 | 1,100 | – | |||||||||||||||||||
�� | $ | 1,828,397 | $ | 347,700 | $ | 378,176 | $ | 509,526 | $ | 592,995 | ||||||||||||||
a) | Excludes interest payments on amounts outstanding under available lines of credit, as the outstanding amounts fluctuate based on the Company’s working capital needs. Variable-rate interest payments were estimated based on rates at January 31, 2006. Actual payments will differ based on changes in interest rates. | |
b) | Other contractual obligations consist primarily of royalty and maintenance commitments. |
Total | Borrowings | Available | ||||||||||||||
(in thousands) | capacity | outstanding | capacity | |||||||||||||
Credit Facility* | $ | 300,000 | $ | 38,818 | $ | 261,182 | ||||||||||
Other lines of credit | 7,341 | 124 | 7,217 | |||||||||||||
$ | 307,341 | $ | 38,942 | $ | 268,399 | |||||||||||
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New York, New York
March 30, 2006
TIFFANY & CO.
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January 31, | ||||||||
(in thousands, except per share amounts) | 2006 | 2005 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 393,609 | $ | 187,681 | ||||
Short-term investments | – | 139,200 | ||||||
Accounts receivable, less allowances of $8,002 and $7,491 | 142,294 | 133,545 | ||||||
Inventories, net | 1,060,164 | 1,057,245 | ||||||
Deferred income taxes | 69,576 | 64,790 | ||||||
Prepaid expenses and other current assets | 33,200 | 25,428 | ||||||
Total current assets | 1,698,843 | 1,607,889 | ||||||
Property, plant and equipment, net | 866,004 | 917,853 | ||||||
Deferred income taxes | 29,828 | – | ||||||
Other assets, net | 182,597 | 140,376 | ||||||
$ | 2,777,272 | $ | 2,666,118 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | 38,942 | $ | 42,957 | ||||
Current portion of long-term debt | 6,186 | – | ||||||
Accounts payable and accrued liabilities | 202,646 | 186,013 | ||||||
Income taxes payable | 60,364 | 118,536 | ||||||
Merchandise and other customer credits | 56,472 | 52,315 | ||||||
Total current liabilities | 364,610 | 399,821 | ||||||
Long-term debt | 426,548 | 397,606 | ||||||
Postretirement/employment benefit obligations | 41,982 | 40,220 | ||||||
Deferred income taxes | – | 33,175 | ||||||
Other long-term liabilities | 113,219 | 94,136 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred Stock, $0.01 par value; authorized 2,000 shares, none issued and outstanding | – | – | ||||||
Common Stock, $0.01 par value; authorized 240,000 shares, issued and outstanding 142,509 and 144,548 | 1,425 | 1,445 | ||||||
Additional paid-in capital | 488,960 | 426,308 | ||||||
Retained earnings | 1,331,321 | 1,246,331 | ||||||
Accumulated other comprehensive gain (loss), net of tax: | ||||||||
Foreign currency translation adjustments | 5,281 | 29,045 | ||||||
Deferred hedging gain (loss) | 3,247 | (2,118 | ) | |||||
Unrealized gain on marketable securities | 679 | 149 | ||||||
Total stockholders’ equity | 1,830,913 | 1,701,160 | ||||||
$ | 2,777,272 | $ | 2,666,118 | |||||
TIFFANY & CO.
K - 46
Years Ended January 31, | ||||||||||||
(in thousands, except per share amounts) | 2006 | 2005 | 2004 | |||||||||
Net sales | $ | 2,395,153 | $ | 2,204,831 | $ | 2,000,045 | ||||||
Cost of sales | 1,052,813 | 974,258 | 842,663 | |||||||||
Gross profit | 1,342,340 | 1,230,573 | 1,157,382 | |||||||||
Selling, general and administrative expenses | 959,635 | 936,044 | 801,863 | |||||||||
Earnings from operations | 382,705 | 294,529 | 355,519 | |||||||||
Interest expense and financing costs | 23,062 | 22,003 | 14,906 | |||||||||
Other income, net | (8,331 | ) | (6,025 | ) | (2,072 | ) | ||||||
Gain on sale of equity investment | – | 193,597 | – | |||||||||
Earnings before income taxes | 367,974 | 472,148 | 342,685 | |||||||||
Provision for income taxes | 113,319 | 167,849 | 127,168 | |||||||||
Net earnings | $ | 254,655 | $ | 304,299 | $ | 215,517 | ||||||
Net earnings per share: | ||||||||||||
Basic | $ | 1.78 | $ | 2.08 | $ | 1.48 | ||||||
Diluted | $ | 1.75 | $ | 2.05 | $ | 1.45 | ||||||
Weighted-average number of common shares: | ||||||||||||
Basic | 142,976 | 145,995 | 145,730 | |||||||||
Diluted | 145,578 | 148,093 | 148,472 |
TIFFANY & CO.
K - 47
Accumulated | ||||||||||||||||||||||||
Total | Other | Common Stock | Additional | |||||||||||||||||||||
Stockholders’ | Retained | Comprehensive | Paid-In | |||||||||||||||||||||
(in thousands) | Equity | Earnings | (Loss) Gain | Shares | Amount | Capital | ||||||||||||||||||
Balances, January 31, 2003 | $ | 1,208,049 | $ | 874,694 | $ | (19,492 | ) | 144,865 | $ | 1,449 | $ | 351,398 | ||||||||||||
Exercise of stock options | 22,587 | – | – | 1,984 | 19 | 22,568 | ||||||||||||||||||
Tax benefit from exercise of stock options | 19,517 | – | – | – | – | 19,517 | ||||||||||||||||||
Issuance of Common Stock under the Employee Profit Sharing and Retirement Savings Plan | 2,000 | – | – | 86 | 1 | 1,999 | ||||||||||||||||||
Purchase and retirement of Common Stock | (4,610 | ) | (4,308 | ) | – | (200 | ) | (2 | ) | (300 | ) | |||||||||||||
Cash dividends on Common Stock | (27,700 | ) | (27,700 | ) | – | – | – | – | ||||||||||||||||
Deferred hedging loss, net of tax | (224 | ) | – | (224 | ) | – | – | – | ||||||||||||||||
Foreign currency translation adjustments, net of tax | 30,417 | – | 30,417 | – | – | – | ||||||||||||||||||
Minimum pension liability adjustment, net of tax | 2,647 | – | 2,647 | – | – | – | ||||||||||||||||||
Net earnings | 215,517 | 215,517 | – | – | – | – | ||||||||||||||||||
Balances, January 31, 2004 | 1,468,200 | 1,058,203 | 13,348 | 146,735 | 1,467 | 395,182 | ||||||||||||||||||
Exercise of stock options | 6,691 | – | – | 482 | 4 | 6,687 | ||||||||||||||||||
Tax benefit from exercise of stock options | 3,818 | – | – | – | – | 3,818 | ||||||||||||||||||
Share-based compensation expense | 22,100 | – | – | – | – | 22,100 | ||||||||||||||||||
Issuance of Common Stock under the Employee Profit Sharing and Retirement Savings Plan | 2,625 | – | – | 66 | 1 | 2,624 | ||||||||||||||||||
Purchase and retirement of Common Stock | (86,732 | ) | (82,602 | ) | – | (2,735 | ) | (27 | ) | (4,103 | ) | |||||||||||||
Cash dividends on Common Stock | (33,569 | ) | (33,569 | ) | – | – | – | – | ||||||||||||||||
Deferred hedging gain, net of tax | 390 | – | 390 | – | – | – | ||||||||||||||||||
Unrealized gain on marketable securities | 149 | – | 149 | – | – | – | ||||||||||||||||||
Foreign currency translation adjustments, net of tax | 13,189 | – | 13,189 | – | – | – | ||||||||||||||||||
Net earnings | 304,299 | 304,299 | – | – | – | – | ||||||||||||||||||
Balances, January 31, 2005 | 1,701,160 | 1,246,331 | 27,076 | 144,548 | 1,445 | 426,308 | ||||||||||||||||||
Exercise of stock options and vesting of restricted stock units | 24,545 | – | – | 1,653 | 17 | 24,528 | ||||||||||||||||||
Tax benefit from exercise of stock options and vesting of restricted stock units | 13,791 | – | – | – | – | 13,791 | ||||||||||||||||||
Share-based compensation expense | 25,950 | – | – | – | – | 25,950 | ||||||||||||||||||
Issuance of Common Stock under the Employee | ||||||||||||||||||||||||
Profit Sharing and Retirement Savings Plan | 4,400 | – | – | 143 | 1 | 4,399 | ||||||||||||||||||
Purchase and retirement of Common Stock | (132,816 | ) | (126,762 | ) | – | (3,835 | ) | (38 | ) | (6,016 | ) | |||||||||||||
Cash dividends on Common Stock | (42,903 | ) | (42,903 | ) | – | – | – | – | ||||||||||||||||
Deferred hedging gain, net of tax | 5,365 | – | 5,365 | – | – | – | ||||||||||||||||||
Unrealized gain on marketable securities | 530 | – | 530 | – | – | – | ||||||||||||||||||
Foreign currency translation adjustments, net of tax | (23,764 | ) | – | (23,764 | ) | – | – | – | ||||||||||||||||
Net earnings | 254,655 | 254,655 | – | – | – | – | ||||||||||||||||||
Balances, January 31, 2006 | $ | 1,830,913 | $ | 1,331,321 | $ | 9,207 | 142,509 | $ | 1,425 | $ | 488,960 | |||||||||||||
Years Ended January 31, | ||||||||||||
Comprehensive earnings are as follows: | 2006 | 2005 | 2004 | |||||||||
Net earnings | $ | 254,655 | $ | 304,299 | $ | 215,517 | ||||||
Deferred hedging gain (loss), net of tax expense (benefit) of $2,253, $210 and ($121) | 5,365 | 390 | (224 | ) | ||||||||
Foreign currency translation adjustments, net of tax (benefit) expense of ($13,222), $5,917 and $10,350 | (23,764 | ) | 13,189 | 30,417 | ||||||||
Unrealized gain on marketable securities, net of tax expense of $269, $93 and $0 | 530 | 149 | – | |||||||||
Minimum pension liability adjustment, net of tax expense of $0, $0 and $1,863 | – | – | 2,647 | |||||||||
$ | 236,786 | $ | 318,027 | $ | 248,357 |
TIFFANY & CO.
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Years Ended January 31, | ||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net earnings | $ | 254,655 | $ | 304,299 | $ | 215,517 | ||||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 109,449 | 106,832 | 89,307 | |||||||||
Gain on sale of equity investment | – | (193,597 | ) | – | ||||||||
Excess tax benefits from share-based payment arrangements | (8,636 | ) | (2,000 | ) | – | |||||||
Provision for inventories | 10,179 | 2,433 | 6,533 | |||||||||
Deferred income taxes | (58,441 | ) | (15,060 | ) | 18,497 | |||||||
Loss on disposal of assets | 4,925 | 1,353 | 175 | |||||||||
Provision for postretirement/employment benefits | 1,761 | 3,474 | 3,630 | |||||||||
Share-based compensation expense | 25,622 | 22,100 | – | |||||||||
Impairment charges | – | 12,193 | – | |||||||||
Changes in assets and liabilities, excluding effects of acquisitions: | ||||||||||||
Accounts receivable | (17,558 | ) | 4,960 | (12,046 | ) | |||||||
Inventories | (43,628 | ) | (175,392 | ) | (109,183 | ) | ||||||
Prepaid expenses and other current assets | 1,246 | (1,003 | ) | (466 | ) | |||||||
Other assets, net | (21,371 | ) | (17,607 | ) | 10,725 | |||||||
Accounts payable and accrued liabilities | 23,929 | (23,275 | ) | 39,102 | ||||||||
Income taxes payable | (43,109 | ) | 75,810 | 21,798 | ||||||||
Merchandise and other customer credits | 4,201 | 6,687 | 2,617 | |||||||||
Other long-term liabilities | 19,467 | 18,646 | (2,364 | ) | ||||||||
Net cash provided by operating activities | 262,691 | 130,853 | 283,842 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Proceeds from sale of equity investment | – | 267,238 | – | |||||||||
Purchases of marketable securities and short-term investments | (100,234 | ) | (383,989 | ) | (27,450 | ) | ||||||
Proceeds from sales of marketable securities and short-term investments | 248,228 | 237,519 | – | |||||||||
Capital expenditures | (157,036 | ) | (142,321 | ) | (272,900 | ) | ||||||
Proceeds from sale-leaseback of assets | 75,000 | – | – | |||||||||
Notes receivable funded | (25,363 | ) | – | – | ||||||||
Acquisitions, net of cash acquired | (6,845 | ) | (4,500 | ) | – | |||||||
Other | (1,807 | ) | (4,212 | ) | 3,214 | |||||||
Net cash provided by (used in) investing activities | 31,943 | (30,265 | ) | (297,136 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Proceeds from issuance of long-term debt | 61,914 | – | 135,105 | |||||||||
Repayment of current portion of long-term debt | – | (51,530 | ) | (4,000 | ) | |||||||
Repayment of short-term borrowings, net | (3,795 | ) | (797 | ) | (15,225 | ) | ||||||
Repurchase of Common Stock | (132,816 | ) | (86,732 | ) | (4,610 | ) | ||||||
Proceeds from exercise of stock options | 24,545 | 6,691 | 22,587 | |||||||||
Excess tax benefits from share-based payment arrangements | 8,636 | 2,000 | – | |||||||||
Cash dividends on Common Stock | (42,903 | ) | (33,569 | ) | (27,700 | ) | ||||||
Fees and expenses related to new borrowings | (732 | ) | – | – | ||||||||
Net cash (used in) provided by financing activities | (85,151 | ) | (163,937 | ) | 106,157 | |||||||
Effect of exchange rate changes on cash and cash equivalents | (3,555 | ) | 2,365 | (395 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 205,928 | (60,984 | ) | 92,468 | ||||||||
Cash and cash equivalents at beginning of year | 187,681 | 248,665 | 156,197 | |||||||||
Cash and cash equivalents at end of year | $ | 393,609 | $ | 187,681 | �� | $ | 248,665 | |||||
TIFFANY & CO.
K - 49
• | U.S. Retail includes sales in TIFFANY & CO. stores in the U.S. and, to a lesser extent, sales of TIFFANY & CO. products through business-to-business sales personnel in the U.S.; | ||
• | International Retail includes sales in TIFFANY & CO. stores and department store boutiques outside the U.S., as well as, to a lesser extent, business-to-business, Internet and wholesale sales of TIFFANY & CO. products outside the U.S.; | ||
• | Direct Marketing includes Internet and catalog sales of TIFFANY & CO. products in the U.S.; and | ||
• | Other includes worldwide sales of businesses operated under trademarks or tradenames other than TIFFANY & CO. (“specialty retail”), as well as wholesale sales of diamonds not suitable for production by the Company’s diamond sourcing and manufacturing operations. |
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Buildings | 39 years | |
Machinery and Equipment | 5-15 years | |
Office Equipment | 3-10 years | |
Furniture and Fixtures | 3-10 years | |
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Balance at | Balance at | |||||||||||||||
January 31, | Goodwill | January 31, | ||||||||||||||
(in thousands) | 2005 | Acquired | Reductions | 2006 | ||||||||||||
U.S. Retail | $ | 10,312 | $ | – | $ | – | $ | 10,312 | ||||||||
International Retail | 831 | – | – | 831 | ||||||||||||
Other | 8,803 | 2,112 | (1,910 | ) | 9,005 | |||||||||||
$ | 19,946 | $ | 2,112 | $ | (1,910 | ) | $ | 20,148 | ||||||||
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(in thousands, except per share amounts) | Year Ended January 31, 2004 | |||||||
Net earnings, as reported | $ | 215,517 | ||||||
Stock-based employee compensation expense determined under fair-value-based method for all awards, net of tax | (13,236 | ) | ||||||
Pro forma net earnings | $ | 202,281 | ||||||
Earnings per basic share: | ||||||||
As reported | $ | 1.48 | ||||||
Pro forma | $ | 1.39 | ||||||
Earnings per diluted share: | ||||||||
As reported | $ | 1.45 | ||||||
Pro forma | $ | 1.36 |
TIFFANY & CO.
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Years Ended January 31, | ||||||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||||||
Net earnings for basic and diluted EPS | $ | 254,655 | $ | 304,299 | $ | 215,517 | ||||||||||||||
Weighted-average shares for basic EPS | 142,976 | 145,995 | 145,730 | |||||||||||||||||
Incremental shares based upon the assumed exercise of stock options and restricted stock units | 2,602 | 2,098 | 2,742 | |||||||||||||||||
Weighted-average shares for diluted EPS | 145,578 | 148,093 | 148,472 | |||||||||||||||||
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(in thousands) | International Retail | Other | ||||||||||||||
Property, plant and equipment | $ | 5,572 | $ | 2,338 | ||||||||||||
Intangibles | – | 2,320 | ||||||||||||||
Goodwill | – | 1,963 | ||||||||||||||
$ | 5,572 | $ | 6,621 | |||||||||||||
Years Ended January 31, | ||||||||||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||||||||||
Interest, net of interest capitalization | $ | 18,736 | $ | 19,476 | $ | 12,151 | ||||||||||||||||||
Income taxes | $ | 210,477 | $ | 101,178 | $ | 85,526 | ||||||||||||||||||
Years Ended January 31, | ||||||||||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||||||||||
Fair value of assets acquired | $ | 2,306 | $ | 4,876 | $ | – | ||||||||||||||||||
Liabilities assumed | (958 | ) | (376 | ) | – | |||||||||||||||||||
Cash paid for acquisition | 1,348 | 4,500 | – | |||||||||||||||||||||
Cash acquired | (3 | ) | – | – | ||||||||||||||||||||
Additional consideration on prior- year acquisitions | 5,500 | – | – | |||||||||||||||||||||
Net cash paid for acquisition | $ | 6,845 | $ | 4,500 | $ | – | ||||||||||||||||||
Years Ended January 31, | ||||||||||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||||||||||
Issuance of Common Stock under the Employee Profit Sharing and Retirement Savings Plan | $ | 4,400 | $ | 2,625 | $ | 2,000 | ||||||||||||||||||
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January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | ||||||||||||||
Finished goods | $ | 764,041 | $ | 767,373 | ||||||||||||
Raw materials | 244,400 | 235,884 | ||||||||||||||
Work-in-process | 51,723 | 53,988 | ||||||||||||||
$ | 1,060,164 | $ | 1,057,245 | |||||||||||||
January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | ||||||||||||||
Land | $ | 203,366 | $ | 238,326 | ||||||||||||
Buildings | 141,110 | 188,765 | ||||||||||||||
Leasehold improvements | 489,998 | 454,449 | ||||||||||||||
Office equipment | 247,751 | 217,230 | ||||||||||||||
Furniture and fixtures | 128,356 | 118,350 | ||||||||||||||
Machinery and equipment | 121,942 | 107,896 | ||||||||||||||
Construction-in-progress | 21,422 | 27,192 | ||||||||||||||
1,353,945 | 1,352,208 | |||||||||||||||
Accumulated depreciation and amortization | (487,941 | ) | (434,355 | ) | ||||||||||||
$ | 866,004 | $ | 917,853 | |||||||||||||
January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | ||||||||||||||
Accounts payable-trade | $ | 71,279 | $ | 74,471 | ||||||||||||
Accrued compensation and commissions | 46,320 | 31,097 | ||||||||||||||
Accrued sales, withholding and other taxes | 40,881 | 40,629 | ||||||||||||||
Other | 44,166 | 39,816 | ||||||||||||||
$ | 202,646 | $ | 186,013 | |||||||||||||
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January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | ||||||||||||||
Short-term borrowings: | ||||||||||||||||
Credit Facility | $ | 38,818 | $ | 33,357 | ||||||||||||
Little Switzerland | – | 9,600 | ||||||||||||||
Other | 124 | – | ||||||||||||||
$ | 38,942 | $ | 42,957 | |||||||||||||
Long-term debt: | ||||||||||||||||
Senior Notes: | ||||||||||||||||
6.90% Series A | $ | 60,000 | $ | 60,000 | ||||||||||||
7.05% Series B | 40,000 | 40,000 | ||||||||||||||
6.15% Series C | 40,000 | 41,230 | ||||||||||||||
6.56% Series D | 60,813 | 62,976 | ||||||||||||||
4.50% yen loan | 42,515 | 48,350 | ||||||||||||||
First Series Yen Bonds | 127,546 | 145,050 | ||||||||||||||
Hong Kong Term Loan | 38,672 | – | ||||||||||||||
Singapore Term Loan | 8,043 | – | ||||||||||||||
Switzerland Term Loan | 15,145 | – | ||||||||||||||
432,734 | 397,606 | |||||||||||||||
Less current portion of long-term debt | 6,186 | – | ||||||||||||||
$ | 426,548 | $ | 397,606 | |||||||||||||
TIFFANY & CO.
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TIFFANY & CO.
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Amount | ||||||||
Years Ending January 31, | (in thousands) | |||||||
2007 | $ | 45,128 | ||||||
2008 | 6,186 | |||||||
2009 | 66,186 | |||||||
2010 | 46,186 | |||||||
2011 | 204,662 | |||||||
Thereafter | 103,328 | |||||||
$ | 471,676 | |||||||
TIFFANY & CO.
K - 62
Years Ended January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | ||||||||||||||
Balance at beginning of period | $ | (2,118 | ) | $ | (2,508 | ) | ||||||||||
Derivative losses transferred to earnings | 1,062 | 1,877 | ||||||||||||||
Change in fair value | 4,303 | (1,487 | ) | |||||||||||||
$ | 3,247 | $ | (2,118 | ) | ||||||||||||
January 31, | ||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||||||||
(in thousands) | Value | Fair Value | Value | Fair Value | ||||||||||||||||
Mutual funds | $ | 26,972 | $ | 26,972 | $ | 35,757 | $ | 35,757 | ||||||||||||
Auction rate securities | – | – | 139,200 | 139,200 | ||||||||||||||||
Short-term borrowings | 38,942 | 38,942 | 42,957 | 42,957 | ||||||||||||||||
Current portion of long-term debt | 6,186 | 6,186 | – | – | ||||||||||||||||
Long-term debt | 426,548 | 446,043 | 397,606 | 429,073 | ||||||||||||||||
Yen put options | 7,083 | 7,083 | 915 | 915 | ||||||||||||||||
Forward foreign-exchange contracts | 7,481 | 7,481 | 6,854 | 6,854 | ||||||||||||||||
Interest rate swap agreements | 813 | 813 | 4,206 | 4,206 |
TIFFANY & CO.
K - 63
Years Ended January 31, | ||||||||||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||||||||||
Minimum rent for retail locations | $ | 55,220 | $ | 48,200 | $ | 41,261 | ||||||||||||||||||
Contingent rent based on sales | 30,395 | 26,468 | 20,571 | |||||||||||||||||||||
Office, distribution and manufacturing facilities and equipment | 27,679 | 24,629 | 25,112 | |||||||||||||||||||||
$ | 113,294 | $ | 99,297 | $ | 86,944 | |||||||||||||||||||
Minimum Annual | ||||
Rental Payments | ||||
Years Ending January 31, | (in thousands) | |||
2007 | $ | 94,526 | ||
2008 | 87,365 | |||
2009 | 78,310 | |||
2010 | 68,393 | |||
2011 | 63,075 | |||
Thereafter | 332,777 |
TIFFANY & CO.
K - 64
TIFFANY & CO.
K - 65
Years Ended January 31, | ||||||||||||||||
(in thousands, except per share amounts) | 2006 | 2005 | 2004 | |||||||||||||
Cost of repurchases | $ | 132,816 | $ | 86,732 | $ | 4,610 | ||||||||||
Shares repurchased and retired | 3,835 | 2,735 | 200 | |||||||||||||
Average cost per share | $ | 34.63 | $ | 31.71 | $ | 23.05 |
TIFFANY & CO.
K - 66
Years Ended January 31, | ||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Dividend yield | 0.5 | % | 0.6 | % | 0.6 | % | ||||||||||
Expected volatility | 39.2 | % | 37.6 | % | 37.5 | % | ||||||||||
Risk-free interest rate | 4.6 | % | 3.7 | % | 3.3 | % | ||||||||||
Expected term (years) | 7 | 6 | 6 |
TIFFANY & CO.
K - 67
Weighted- | ||||||||||||||||||||
Average | Aggregate | |||||||||||||||||||
Weighted- | Remaining | Intrinsic | ||||||||||||||||||
Number of | Average | Contractual | Value | |||||||||||||||||
Shares | Exercise Price | Term (years) | (in thousands) | |||||||||||||||||
Outstanding at January 31, 2005 | 13,588,970 | $ | 27.40 | |||||||||||||||||
Granted | 388,948 | 38.09 | ||||||||||||||||||
Exercised | (1,542,033 | ) | 15.95 | |||||||||||||||||
Forfeited/cancelled | (353,883 | ) | 35.30 | |||||||||||||||||
Outstanding at January 31, 2006 | 12,082,002 | $ | 28.97 | 5.72 | $ | 114,985 | ||||||||||||||
Exercisable at January 31, 2006 | 9,452,531 | $ | 27.43 | 5.00 | $ | 104,608 | ||||||||||||||
Number of | Weighted-Average | |||||||||||
Shares | Grant-Date Fair Value | |||||||||||
Non-vested at January 31, 2005 | 509,944 | $ | 31.68 | |||||||||
Granted | 602,472 | 39.10 | ||||||||||
Vested | (114,139 | ) | 31.68 | |||||||||
Forfeited | (56,818 | ) | 31.76 | |||||||||
Non-vested at January 31, 2006 | 941,459 | $ | 36.41 | |||||||||
Number of | Weighted-Average | |||||||||||
Shares | Grant-Date Fair Value | |||||||||||
Non-vested at January 31, 2005 | 346,000 | $ | 31.49 | |||||||||
Granted | 293,000 | 37.84 | ||||||||||
Non-vested at January 31, 2006 | 639,000 | $ | 34.40 | |||||||||
TIFFANY & CO.
K - 68
TIFFANY & CO.
K - 69
January 31, | ||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||
(in thousands) | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||
Change in benefit obligation: | ||||||||||||||||||||
Benefit obligation at beginning of year | $ | 196,926 | $ | 170,344 | $ | 27,118 | $ | 27,357 | ||||||||||||
Service cost | 12,702 | 11,072 | 1,697 | 1,246 | ||||||||||||||||
Interest cost | 11,958 | 10,738 | 1,780 | 1,535 | ||||||||||||||||
Participants’ contributions | – | – | 168 | 45 | ||||||||||||||||
Amendment | – | – | (1,746 | ) | – | |||||||||||||||
Actuarial loss (gain) | 24,076 | 8,302 | (2,449 | ) | (1,771 | ) | ||||||||||||||
Benefits paid | (3,626 | ) | (3,530 | ) | (1,585 | ) | (1,294 | ) | ||||||||||||
Benefit obligation at end of year* | $ | 242,036 | $ | 196,926 | $ | 24,983 | $ | 27,118 | ||||||||||||
Change in plan assets: | ||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 143,497 | $ | 115,943 | $ | – | $ | – | ||||||||||||
Actual return on plan assets | 13,519 | 6,038 | – | – | ||||||||||||||||
Employer contribution | 20,046 | 25,046 | 1,417 | 1,249 | ||||||||||||||||
Participants’ contributions | – | – | 168 | 45 | ||||||||||||||||
Benefits paid | (3,626 | ) | (3,530 | ) | (1,585 | ) | (1,294 | ) | ||||||||||||
Fair value of plan assets at end of year | $ | 173,436 | $ | 143,497 | $ | – | $ | – | ||||||||||||
Funded status | $ | (68,600 | ) | $ | (53,429 | ) | $ | (24,983 | ) | $ | (27,118 | ) | ||||||||
Unrecognized net actuarial loss | 56,675 | 38,970 | 4,456 | 6,979 | ||||||||||||||||
Unrecognized prior service cost | 4,061 | 4,865 | (18,292 | ) | (17,402 | ) | ||||||||||||||
Accrued benefit cost | $ | (7,864 | ) | $ | (9,594 | ) | $ | (38,819 | ) | $ | (37,541 | ) | ||||||||
TIFFANY & CO.
K - 70
January 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||||||||||||||
(in thousands) | Qualified | Excess | SRIP | Total | Qualified | Excess | SRIP | Total | ||||||||||||||||||||||||||||
Projected benefit obligation | $ | 198,555 | $ | 27,564 | $ | 15,917 | $ | 242,036 | $ | 163,743 | $ | 16,804 | $ | 16,379 | $ | 196,926 | ||||||||||||||||||||
Fair value of plan assets | 173,436 | – | – | 173,436 | 143,497 | – | – | 143,497 | ||||||||||||||||||||||||||||
Funded status | $ | (25,119 | ) | $ | (27,564 | ) | $ | (15,917 | ) | $ | (68,600 | ) | $ | (20,246 | ) | $ | (16,804 | ) | $ | (16,379 | ) | $ | (53,429 | ) | ||||||||||||
Accumulated benefit obligation | $ | 165,721 | $ | 9,724 | $ | 6,222 | $ | 181,667 | $ | 138,392 | $ | 7,688 | $ | 3,738 | $ | 149,818 | ||||||||||||||||||||
Years Ended January 31, | ||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||
Service cost | $ | 12,702 | $ | 11,072 | $ | 9,370 | $ | 1,697 | $ | 1,246 | $ | 2,543 | ||||||||||||||||
Interest cost | 11,958 | 10,738 | 9,299 | 1,780 | 1,535 | 2,364 | ||||||||||||||||||||||
Expected return on plan assets | (10,052 | ) | (8,311 | ) | (6,534 | ) | – | – | – | |||||||||||||||||||
Amortization of prior service cost | 804 | 804 | 185 | (856 | ) | (1,213 | ) | (408 | ) | |||||||||||||||||||
Amortization of net loss | 2,904 | 1,837 | 1,076 | 74 | 267 | 299 | ||||||||||||||||||||||
Net expense | $ | 18,316 | $ | 16,140 | $ | 13,396 | $ | 2,695 | $ | 1,835 | $ | 4,798 | ||||||||||||||||
January 31, | ||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||||||
Discount rate | 5.75 | % | 6.00 | % | 6.25 | % | 5.75 | % | 6.00 | % | 6.25 | % | ||||||||||||||||
Rate of increase in compensation: | ||||||||||||||||||||||||||||
Qualified | 3.50 | % | 3.50 | % | 3.75 | % | – | – | – | |||||||||||||||||||
Excess | 5.00 | % | 3.50 | % | 3.75 | % | – | – | – | |||||||||||||||||||
SRIP | 8.00 | % | 8.00 | % | 8.25 | % | – | – | – |
TIFFANY & CO.
K - 71
Years Ended January 31, | ||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||||||
Discount rate | 6.00 | % | 6.25 | % | 6.50 | % | 6.00 | % | 6.25 | % | 6.50 | % | ||||||||||||||||
Expected return on plan assets | 7.50 | % | 7.50 | % | 7.50 | % | – | – | – | |||||||||||||||||||
Rate of increase in compensation: | ||||||||||||||||||||||||||||
Qualified | 3.50 | % | 3.75 | % | 4.00 | % | – | – | – | |||||||||||||||||||
Excess | 3.50 | % | 3.75 | % | 4.00 | % | – | – | – | |||||||||||||||||||
SRIP | 8.00 | % | 8.25 | % | 8.50 | % | – | – | – |
Percentage of Qualified Plan Assets | ||||||||||||||
at December 31, | ||||||||||||||
Asset Category | Target Asset Allocation | 2005 | 2004 | |||||||||||
Equity securities | 65% – 75% | 68 | % | 67 | % | |||||||||
Debt securities | 25% – 35% | 29 | 28 | |||||||||||
Other | 0% – 10% | 3 | 5 | |||||||||||
100 | % | 100 | % | |||||||||||
TIFFANY & CO.
K - 72
Pension Benefits | Other Postretirement Benefits | |||||||||||
Years Ending January 31, | (in thousands) | (in thousands) | ||||||||||
2007 | $ | 4,359 | $ | 1,242 | ||||||||
2008 | 4,812 | 1,286 | ||||||||||
2009 | 5,344 | 1,323 | ||||||||||
2010 | 5,998 | 1,351 | ||||||||||
2011 | 6,681 | 1,395 | ||||||||||
2012-2016 | 51,037 | 7,644 |
TIFFANY & CO.
K - 73
Years Ended January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||
United States | $ | 248,495 | $ | 333,514 | $ | 224,789 | ||||||||||
Foreign | 119,479 | 138,634 | 117,896 | |||||||||||||
$ | 367,974 | $ | 472,148 | $ | 342,685 | |||||||||||
Years Ended January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||
Current: | ||||||||||||||||
Federal | $ | 94,818 | $ | 124,585 | $ | 54,977 | ||||||||||
State | 24,883 | 17,729 | 16,803 | |||||||||||||
Foreign | 40,041 | 49,015 | 46,623 | |||||||||||||
159,742 | 191,329 | 118,403 | ||||||||||||||
Deferred: | ||||||||||||||||
Federal | (42,676 | ) | (20,205 | ) | 8,741 | |||||||||||
State | (4,417 | ) | (3,940 | ) | 2,027 | |||||||||||
Foreign | 670 | 665 | (2,003 | ) | ||||||||||||
(46,423 | ) | (23,480 | ) | 8,765 | ||||||||||||
$ | 113,319 | $ | 167,849 | $ | 127,168 | |||||||||||
TIFFANY & CO.
K - 74
January 31, | ||||||||||||
(in thousands) | 2006 | 2005 | ||||||||||
Deferred tax assets: | ||||||||||||
Postretirement/employment benefits | $ | 18,475 | $ | 17,766 | ||||||||
Inventory | 40,883 | 40,327 | ||||||||||
Accrued expenses | 13,863 | 13,346 | ||||||||||
Share-based compensation | 17,666 | 9,251 | ||||||||||
Asset impairment | – | 3,096 | ||||||||||
Pension and retirement benefits | 1,615 | 4,546 | ||||||||||
Depreciation | 6,148 | – | ||||||||||
Foreign net operating losses | 27,711 | 25,477 | ||||||||||
Deferred income | 3,565 | 3,763 | ||||||||||
Other | 167 | 75 | ||||||||||
130,093 | 117,647 | |||||||||||
Valuation allowance | (26,586 | ) | (25,477 | ) | ||||||||
103,507 | 92,170 | |||||||||||
Deferred tax liabilities: | ||||||||||||
Undistributed earnings of foreign subsidiaries | – | (39,739 | ) | |||||||||
Financial hedging instruments | (1,335 | ) | (229 | ) | ||||||||
Depreciation | – | (19,394 | ) | |||||||||
Other | (2,768 | ) | (1,193 | ) | ||||||||
(4,103 | ) | (60,555 | ) | |||||||||
Net deferred tax asset | $ | 99,404 | $ | 31,615 | ||||||||
Years Ended January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||
Share-based compensation | $ | (8,415 | ) | $ | (9,251 | ) | $ | – | ||||||||
Undistributed earnings of foreign subsidiaries | (20,321 | ) | (2,831 | ) | 4,161 | |||||||||||
Inventory | (2,207 | ) | (11,666 | ) | (1,530 | ) | ||||||||||
Depreciation | (17,704 | ) | 2,265 | 5,709 | ||||||||||||
Asset impairment | – | (3,096 | ) | – | ||||||||||||
Deferred income | 230 | (3,763 | ) | – | ||||||||||||
Postretirement/employment benefit obligations | (631 | ) | (1,419 | ) | (1,575 | ) | ||||||||||
Equity investments | – | (1,069 | ) | – | ||||||||||||
Accrued expenses | (536 | ) | 199 | (1,890 | ) | |||||||||||
Excess pension contribution | 2,710 | 4,915 | 2,930 | |||||||||||||
Financial hedging instruments | 1,106 | 158 | 233 | |||||||||||||
Other | (655 | ) | 2,078 | 727 | ||||||||||||
$ | (46,423 | ) | $ | (23,480 | ) | $ | 8,765 | |||||||||
TIFFANY & CO.
K - 75
Years Ended January 31, | ||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Statutory Federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||||||
State income taxes, net of Federal benefit | 4.1 | 2.2 | 4.2 | |||||||||||||
Foreign losses with no tax benefit | 0.7 | 0.5 | 1.1 | |||||||||||||
American Jobs Creation Act of 2004 | (6.1 | ) | (1.8 | ) | – | |||||||||||
Extraterritorial income exclusion | (2.0 | ) | (1.3 | ) | (1.7 | ) | ||||||||||
Other | (0.9 | ) | 1.0 | (1.5 | ) | |||||||||||
30.8 | % | 35.6 | % | 37.1 | % | |||||||||||
TIFFANY & CO.
K - 76
Years Ended January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||
Net sales: | ||||||||||||||||
U.S. Retail | $ | 1,220,683 | $ | 1,116,845 | $ | 1,013,034 | ||||||||||
International Retail | 900,689 | 857,360 | 781,572 | |||||||||||||
Direct Marketing | 157,483 | 142,508 | 133,254 | |||||||||||||
Total reportable segments | 2,278,855 | 2,116,713 | 1,927,860 | |||||||||||||
Other | 116,298 | 88,118 | 72,185 | |||||||||||||
$ | 2,395,153 | $ | 2,204,831 | $ | 2,000,045 | |||||||||||
Earnings (losses) from operations:* | ||||||||||||||||
U.S. Retail | $ | 268,769 | $ | 227,302 | $ | 224,149 | ||||||||||
International Retail | 212,496 | 202,260 | 213,666 | |||||||||||||
Direct Marketing | 58,542 | 47,566 | 46,813 | |||||||||||||
Total reportable segments | 539,807 | 477,128 | 484,628 | |||||||||||||
Other | (18,829 | ) | (23,290 | ) | (8,460 | ) | ||||||||||
$ | 520,978 | $ | 453,838 | $ | 476,168 | |||||||||||
TIFFANY & CO.
K - 77
Years Ended January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||
Earnings from operations for segments | $ | 520,978 | $ | 453,838 | $ | 476,168 | ||||||||||
Unallocated corporate expenses | (138,273 | ) | (159,309 | ) | (120,649 | ) | ||||||||||
Interest expense, financing costs and other income, net | (14,731 | ) | (15,978 | ) | (12,834 | ) | ||||||||||
Gain on sale of equity investment | – | 193,597 | – | |||||||||||||
Earnings before income taxes | $ | 367,974 | $ | 472,148 | $ | 342,685 | ||||||||||
Years Ended January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||
Net sales: | ||||||||||||||||
United States | $ | 1,444,947 | $ | 1,311,348 | $ | 1,189,027 | ||||||||||
Japan | 490,834 | 492,125 | 485,424 | |||||||||||||
Other countries | 459,372 | 401,358 | 325,594 | |||||||||||||
$ | 2,395,153 | $ | 2,204,831 | $ | 2,000,045 | |||||||||||
Long-lived assets: | ||||||||||||||||
United States | $ | 587,323 | $ | 640,524 | $ | 638,174 | ||||||||||
Japan | 157,218 | 175,001 | 163,686 | |||||||||||||
Other countries | 145,770 | 124,762 | 105,020 | |||||||||||||
$ | 890,311 | $ | 940,287 | $ | 906,880 | |||||||||||
Years Ended January 31, | ||||||||||||||||
(in thousands) | 2006 | 2005 | 2004 | |||||||||||||
Net sales: | ||||||||||||||||
Jewelry | $ | 2,001,896 | $ | 1,827,541 | $ | 1,640,495 | ||||||||||
Tableware, timepieces and other | 393,257 | 377,290 | 359,550 | |||||||||||||
$ | 2,395,153 | $ | 2,204,831 | $ | 2,000,045 | |||||||||||
TIFFANY & CO.
K - 78
2005 Quarters Ended | ||||||||||||||||||||
(in thousands, except per share amounts) | April 30* | July 31* | October 31 | January 31* | ||||||||||||||||
Net sales | $ | 509,901 | $ | 526,701 | $ | 500,105 | $ | 858,446 | ||||||||||||
Gross profit | 274,821 | 292,084 | 270,530 | 504,905 | ||||||||||||||||
Earnings from operations | 66,311 | 74,068 | 39,795 | 202,531 | ||||||||||||||||
Net earnings | 40,058 | 50,551 | 23,789 | 140,257 | ||||||||||||||||
Net earnings per share: | ||||||||||||||||||||
Basic | $ | 0.28 | $ | 0.35 | $ | 0.17 | $ | 0.99 | ||||||||||||
Diluted | $ | 0.27 | $ | 0.35 | $ | 0.16 | $ | 0.97 | ||||||||||||
2004 Quarters Ended | ||||||||||||||||||||
(in thousands, except per share amounts) | April 30 | July 31 | October 31 | January 31* | ||||||||||||||||
Net sales | $ | 456,960 | $ | 476,597 | $ | 461,152 | $ | 810,122 | ||||||||||||
Gross profit | 258,876 | 264,488 | 245,528 | 461,681 | ||||||||||||||||
Earnings from operations | 62,695 | 58,170 | 33,364 | 140,300 | ||||||||||||||||
Net earnings | 36,811 | 33,090 | 17,358 | 217,040 | ||||||||||||||||
Net earnings per share: | ||||||||||||||||||||
Basic | $ | 0.25 | $ | 0.23 | $ | 0.12 | $ | 1.50 | ||||||||||||
Diluted | $ | 0.25 | $ | 0.22 | $ | 0.12 | $ | 1.48 | ||||||||||||
TIFFANY & CO.
K - 79
TIFFANY & CO.
K - 80
Chairman of the Board and Chief Executive Officer
President
Executive Vice President and Chief Financial Officer
TIFFANY & CO.
K - 81
TIFFANY & CO.
K - 82
Exhibit | Description | |
3.1 | Restated Certificate of Incorporation of Registrant. Incorporated by reference from Exhibit 3.1 to Registrant’s Report on Form 8-K dated May 16, 1996, as amended by the Certificate of Amendment of Certificate of Incorporation dated May 20, 1999. Incorporated by reference from Exhibit 3.1 to Registrant’s Report on Form 10-Q for the Fiscal Quarter ended July 31, 1999. | |
3.1a | Amendment to Certificate of Incorporation of Registrant dated May 18, 2000. Previously filed as Exhibit 3.1b to Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2001. | |
3.2 | Restated By-Laws of Registrant, as last amended September 18, 2003. Incorporated by reference from Exhibit 3.2 to Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004. |
TIFFANY & CO.
K - 83
Exhibit | Description | |
4.1 | Amended and Restated Rights Agreement dated as of April 8, 2004 by and between Registrant and Mellon Investor Services LLC, as Rights Agent. Incorporated by reference from Exhibit 4.1 to Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004. | |
4.1a | Second Amendment to Amended and Restated Rights Agreement, referred to in Exhibit 4.1 above dated effective January 19, 2006, by and between Tiffany & Co. and Mellon Investor Services LLC (successor to ChaseMellon Shareholder Services, LLC), as Rights Agent. Previously filed as Exhibit 4.1 to Registrant’s Report on Form 8-K dated January 19, 2006. | |
10.5 | Designer Agreement between Tiffany and Paloma Picasso dated April 4, 1985. Incorporated by reference from Exhibit 10.5 filed with Registrant’s Registration Statement on Form S-1, Registration No. 33-12818 (the “Registration Statement”). | |
10.122 | Agreement dated as of April 3, 1996 among American Family Life Assurance Company of Columbus, Japan Branch, Tiffany & Co. Japan, Inc., Japan Branch, and Registrant, as Guarantor, for yen 5,000,000,000 Loan Due 2011. Incorporated by reference from Exhibit 10.122 filed with Registrant’s Report on Form 10-Q for the Fiscal quarter ended April 30, 1996. | |
10.122a | Amendment No. 1 to the Agreement referred to in Exhibit 10.122 above dated November 18, 1998. Incorporated by reference from Exhibit 10.122a filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 1999. | |
10.122b | Guarantee by Tiffany & Co. of the obligations under the Agreement referred to in Exhibit 10.122 above dated April 3, 1996. Incorporated by reference from Exhibit 10.122b filed with Registrant’s Report on Form 8-K dated August 2, 2002. | |
10.122c | Amendment No. 2 to Guarantee referred to in Exhibit 10.122b above, dated October 15, 1999. Incorporated by reference from Exhibit 10.122c filed with Registrant’s Report on Form 8-K dated August 2, 2002. | |
10.122d | Amendment No. 3 to Guarantee referred to in Exhibit 10.122b above, dated July 16, 2002. Incorporated by reference from Exhibit 10.122d filed with Registrant’s Report on Form 8-K dated August 2, 2002. | |
10.122e | Amendment No. 4 to Guarantee referred to in Exhibit 10.122b above, dated December 9, 2005. | |
10.123 | Agreement made effective as of February 1, 1997 by and between Tiffany and Elsa Peretti. Incorporated by reference from Exhibit 10.123 to Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 1997. | |
TIFFANY & CO.
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Exhibit | Description | |
10.126 | Form of Note Purchase Agreement between Registrant and various institutional note purchasers with Schedules B, 5.14 and 5.15 and Exhibits 1A, 1B, and 4.7 thereto, dated as of December 30, 1998 in respect of Registrant’s $60 million principal amount 6.90% Series A Senior Notes due December 30, 2008 and $40 million principal amount 7.05% Series B Senior Notes due December 30, 2010. Incorporated by reference from Exhibit 10.126 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 1999. | |
10.126a | First Amendment and Waiver Agreement to Form of Note Purchase Agreement referred to in previously filed Exhibit 10.126, dated May 16, 2002. Incorporated by reference from Exhibit 10.126a filed with Registrant’s Report on Form 8-K dated June 10, 2002. | |
10.128 | Agreement made the 1st day of August 2001 by and between Tiffany & Co. Japan Inc. and Mitsukoshi Ltd. of Japan. Incorporated by reference from Exhibit 10.128 filed with Registrant’s Report on Form 8-K dated August 1, 2001. | |
10.132 | Form of Note Purchase Agreement between Registrant and various institutional note purchasers with Schedules B, 5.14 and 5.15 and Exhibits 1A, 1B and 4.7 thereto, dated as of July 18, 2002 in respect of Registrant’s $40,000,000 principal amount 6.15% Series C Notes due July 18, 2009 and $60,000,000 principal amount 6.56% Series D Notes due July 18, 2012. Incorporated by reference from Exhibit 10.132 filed with Registrant’s Report on Form 8-K dated August 2, 2002. | |
10.133 | Guaranty Agreement dated July 18, 2002 with respect to the Note Purchase Agreements (see Exhibit 10.132 above) by Tiffany and Company, Tiffany & Co. International and Tiffany & Co. Japan Inc. in favor of each of the note purchasers. Incorporated by reference from Exhibit 10.133 filed with Registrant’s Report on Form 8-K dated August 2, 2002. | |
10.134 | Translation of Condition of Bonds applied to Tiffany & Co. Japan Inc. First Series Yen Bonds due 2010 in the aggregate principal amount of 15,000,000,000 yen issued September 30, 2003 (for Qualified Investors Only). Incorporated by reference from Exhibit 10.134 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004. | |
10.135 | Translation of Application of Bonds for Tiffany & Co. Japan Inc. First Series Yen Bonds due 2010 in the aggregate principal amount of 15,000,000,000 yen issued September 30, 2003 (for Qualified Investors Only). Incorporated by reference from Exhibit 10.135 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004 | |
10.135a | Translation of Amendment of Application of Bonds referred to in Exhibit 10.135. Incorporated by reference from Exhibit 10.135a filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004. | |
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Exhibit | Description | |
10.136 | Payment Guarantee dated September 30, 2003 made by Tiffany & Co. for the benefit of the Qualified Investors of the Bonds referred to in Exhibit 10.134. Incorporated by reference from Exhibit 10.136 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004. | |
10.145 | Ground Lease between Tiffany and Company and River Park Business Center, Inc., dated November 29, 2000. Incorporated by reference from Exhibit 10.145 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2005. | |
10.145a | First Addendum to the Ground Lease between Tiffany and Company and River Park Business Center, Inc., dated November 29, 2000. Incorporated by reference from Exhibit 10.145a filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2005. | |
10.146 | Credit Agreement dated as of July 20, 2005 by and among Registrant, Tiffany and Company, Tiffany & Co. International, each other Subsidiary of Registrant that is a Borrower and is a signatory thereto and The Bank of New York, as Administrative Agent, and various lenders party thereto. Incorporated by reference from Exhibit 10.146 filed with Registrant’s Report on Form 8-K dated July 20, 2005. | |
10.147 | Guaranty Agreement dated as of July 20, 2005, with respect to the Credit Agreement (see Exhibit 10.146 above) by and among Registrant, Tiffany and Company, Tiffany & Co. International, and Tiffany & Co. Japan Inc. and The Bank of New York, as Administrative Agent. Incorporated by reference from Exhibit 10.147 filed with Registrant’s Report on Form 8-K dated July 20, 2005. | |
10.149 | Lease Agreement made as of September 28, 2005 between CLF Sylvan Way LLC and Tiffany and Company, and form of Registrant’s guaranty of such lease. Incorporated by reference from Exhibit 10.149 filed with Registrant’s Report on Form 8-K dated September 23, 2005. | |
14.1 | Code of Business and Ethical Conduct and Business Conduct Policy. Incorporated by reference from Exhibit 14.1 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004. | |
21.1 | Subsidiaries of Registrant. | |
23.1 | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm. | |
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
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Exhibit | Description | |
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Exhibit | Description | |
4.3 | Registrant’s 1998 Directors Option Plan. Incorporated by reference from Exhibit 4.3 to Registrant’s Registration Statement on Form S-8, file number 333-67725, filed November 23, 1998. | |
4.4 | Registrant’s Amended and Restated 1998 Employee Incentive Plan effective May 19, 2005. | |
Previously filed as Exhibit 4.3 with Registrant’s Report on Form 8-K dated May 23, 2005. | ||
10.3 | Registrant’s 1986 Stock Option Plan and terms of stock option agreement, as last amended on July 16, 1998. Incorporated by reference from Exhibit 10.3 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 1999. | |
10.49 | Form of Indemnity Agreement, approved by the Board of Directors on March 11, 2005 for use with all directors and executive officers. Incorporated by reference from Exhibit 10.49 filed with Registrant’s Report on Form 8-K dated March 16, 2005. | |
10.49a | Form of Indemnity Agreement, approved by the Board of Directors on March 11, 2005 for use with all directors and executive officers (Corrected Version). Incorporated by reference from Exhibit 10.49a filed with Registrant’s Report on Form 8-K dated May 23, 2005. | |
10.60 | Registrant’s 1988 Director Stock Option Plan and form of stock option agreement, as last amended on November 21, 1996. Incorporated by reference from Exhibit 10.60 to Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 1997. | |
10.106 | �� | Amended and Restated Tiffany and Company Executive Deferral Plan originally made effective October 1, 1989, as amended effective November 23, 2005. |
10.108 | Registrant’s Amended and Restated Retirement Plan for Non-Employee Directors originally made effective January 1, 1989, as amended through January 21, 1999. Incorporated by reference from Exhibit 10.108 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 1999. | |
10.109 | Summary of informal incentive cash bonus plan for managerial employees. Incorporated by reference from Exhibit 10.109 filed with Registrant’s Report on Form 8-K dated March 16, 2005. | |
10.114 | 1994 Tiffany and Company Supplemental Retirement Income Plan, Amended and Restated as of March 7, 2005. Incorporated by reference from Exhibit 10.114 filed with Registrant’s Report on Form 8-K dated March 16, 2005. |
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Exhibit | Description | |
10.127b | Form of Retention Agreement between and among Registrant and Tiffany and each of its executive officers and Appendices I to III to the Agreement. Incorporated by reference from Exhibit 10.127b filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2003. | |
10.128 | Group Long Term Disability Insurance Policy issued by UnumProvident, Policy No. 533717 001. Incorporated by reference from Exhibit 10.128 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2003. | |
10.137 | Summary of arrangements for the payment of premiums on life insurance policies owned by executive officers. Incorporated by reference from Exhibit 10.137 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004. | |
10.138 | Tiffany and Company Un-funded Retirement Income Plan to Recognize Compensation in Excess of Internal Revenue Code Limits. Incorporated by reference from Exhibit 10.138 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2004. | |
10.139 | Form of Fiscal 2005 Cash Incentive Award Agreement for certain executive officers under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.139 filed with Registrant’s Report on Form 8-K dated March 16, 2005. | |
10.139a | Form of Fiscal 2006 Cash Incentive Award Agreement for certain executive officers under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.139a filed with Registrant’s Report on Form 8-K dated March 24, 2006. | |
10.140 | Form of Terms of Performance-Based Restricted Stock Unit Grants to Executive Officers under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.140 filed with Registrant’s Report on Form 8-K dated March 16, 2005. | |
10.140a | Form of Non-Competition and Confidentiality Covenants for use in connection with Performance-Based Restricted Stock Unit Grants to Registrant’s Executive Officers and Time-Vested Restricted Unit Awards made to other officers of Registrant’s affiliated companies pursuant to the Registrant’s 2005 Employee Incentive Plan and pursuant to the Tiffany and Company Un-funded Retirement Income Plan to Recognize Compensation in Excess of Internal Revenue Code Limits. Incorporated by reference from Exhibit 10.140a filed with Registrant’s Report on Form 8-K dated May 23, 2005. | |
10.142 | Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2005 Directors Option Plan as revised March 7, 2005. Incorporated by reference from Exhibit 10.142 filed with Registrant’s Report on Form 8-K dated March 16, 2005. | |
10.143 | Terms of Stock Option Award (Standard Non-Qualified Option) under Registrant’s 2005 Employee Incentive Plan as revised March 7, 2005. Incorporated by reference from Exhibit 10.143 filed with Registrant’s Report on Form 8-K dated March 16, 2005. | |
10.143a | Terms of Stock Option Award (Standard Non-Qualified Option) under Registrant’s 2005 Employee Incentive Plan as revised May 19, 2005. Incorporated by reference from Exhibit 10.143a filed with Registrant’s Report on Form 8-K dated May 23, 2005. |
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Exhibit | Description | |
10.144 | Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2005 Employee Incentive Plan as revised March 7, 2005 (form used for Executive Officers). Incorporated by reference from Exhibit 10.144 filed with Registrant’s Report on Form 8-K dated March 16, 2005. | |
10.144a | Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2005 Employee Incentive Plan as revised May 19, 2005 (form used for Executive Officers). Incorporated by reference from Exhibit 10.144a filed with Registrant’s Report on Form 8-K dated May 23, 2005. | |
10.150 | Form of Terms of Time-Vested Restricted Stock Unit Grants under Registrant’s 1998 Employee Incentive Plan and 2005 Employee Incentive Plan. Previously filed as Exhibit 10.146 with Registrant’s Report on Form 8-K dated May 23, 2005. | |
10.151 | Registrant’s 2005 Employee Incentive Plan as adopted May 19, 2005. Previously filed as Exhibit 10.145 with Registrant’s Report on Form 8-K dated May 23, 2005. |
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Date: March 31, 2006 | Tiffany & Co. | ||||
(Registrant) | |||||
By: | /s/ Michael J. Kowalski | ||||
Michael J. Kowalski Chief Executive Officer |
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By: | /s/ Michael J. Kowalski Michael J. Kowalski | By: | /s/ James N. Fernandez James N. Fernandez | |||
Chairman of the Board and Chief Executive | Executive Vice President and Chief | |||||
Officer | Financial Officer | |||||
(principal executive officer) (director) | (principal financial officer) | |||||
By: | /s/ James E. Quinn | By: | /s/ Henry Iglesias | |||
James E. Quinn | Henry Iglesias | |||||
President | Vice President and Controller | |||||
(director) | (principal accounting officer) | |||||
By: | /s/ William R. Chaney | By: | /s/ Rose Marie Bravo | |||
William R. Chaney | Rose Marie Bravo | |||||
Director | Director | |||||
By: | /s/ Samuel L. Hayes III | By: | /s/ Abby F. Kohnstamm | |||
Samuel L. Hayes III | Abby F. Kohnstam | |||||
Director | Director | |||||
By: | /s/ Charles K. Marquis | By: | /s/ J. Thomas Presby | |||
Charles K. Marquis | J. Thomas Presby | |||||
Director | Director | |||||
By: | /s/ William A. Shutzer | |||||
William A. Shutzer | ||||||
Director |
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Schedule II – Valuation and Qualifying Accounts and Reserves
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Balance at | Charged to | Charged to | Balance at | |||||||||||||||||
beginning | costs and | other | end of | |||||||||||||||||
Description | of period | expenses | accounts | Deductions | period | |||||||||||||||
Year Ended January 31, 2006: | ||||||||||||||||||||
Reserves deducted from assets: | ||||||||||||||||||||
Accounts receivable allowances: | ||||||||||||||||||||
Doubtful accounts | $ | 2,074,651 | $ | 1,604,690 | — | $ | 1,561,664 | a | $ | 2,117,677 | ||||||||||
Sales returns | 5,416,637 | 907,405 | — | 440,000 | b | 5,884,042 | ||||||||||||||
Allowance for inventory liquidation and obsolescence | 20,927,849 | 10,179,255 | — | 9,110,709 | c | 21,996,395 | ||||||||||||||
Allowance for inventory shrinkage | 4,736,429 | 2,382,170 | — | 5,998,376 | d | 1,120,223 | ||||||||||||||
LIFO reserve | 64,058,414 | 11,565,883 | — | — | 75,624,297 | |||||||||||||||
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Schedule II – Valuation and Qualifying Accounts and Reserves
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Balance at | Charged to | Charged to | Balance at | |||||||||||||||||
beginning | costs and | other | end of | |||||||||||||||||
Description | of period | expenses | accounts | Deductions | period | |||||||||||||||
Year Ended January 31, 2005: | ||||||||||||||||||||
Reserves deducted from assets: | ||||||||||||||||||||
Accounts receivable allowances: | ||||||||||||||||||||
Doubtful accounts | $ | 2,325,462 | $ | 1,976,551 | — | $ | 2,227,362 | a | $ | 2,074,651 | ||||||||||
Sales returns | 4,666,605 | 973,605 | — | 223,573 | b | 5,416,637 | ||||||||||||||
Allowance for inventory liquidation and obsolescence | 21,983,185 | 2,432,504 | 2,934,967 | e | 6,422,807 | c | 20,927,849 | |||||||||||||
Allowance for inventory shrinkage | 4,591,185 | 2,265,940 | — | 2,120,696 | d | 4,736,429 | ||||||||||||||
LIFO reserve | 30,587,252 | 33,471,162 | — | — | 64,058,414 | |||||||||||||||
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Schedule II – Valuation and Qualifying Accounts and Reserves
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Balance at | Charged to | Charged to | Balance at | |||||||||||||||||
beginning | costs and | other | end of | |||||||||||||||||
Description | of period | expenses | accounts | Deductions | period | |||||||||||||||
Year Ended January 31, 2004: | ||||||||||||||||||||
Reserves deducted from assets: | ||||||||||||||||||||
Accounts receivable allowances: | ||||||||||||||||||||
Doubtful accounts | $ | 2,129,652 | $ | 2,081,919 | — | $ | 1,886,109 | a | $ | 2,325,462 | ||||||||||
Sales returns | 6,128,611 | 382,305 | — | 1,844,311 | b | 4,666,605 | ||||||||||||||
Allowance for inventory liquidation and obsolescence | 23,029,454 | 6,532,576 | — | 7,578,845 | c | 21,983,185 | ||||||||||||||
Allowance for inventory shrinkage | 4,361,478 | 1,272,520 | — | 1,042,813 | d | 4,591,185 | ||||||||||||||
LIFO reserve | 20,135,443 | 10,451,809 | — | — | 30,587,252 | |||||||||||||||
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