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SECURITIES AND EXCHANGE COMMISSION
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-3228013 | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
incorporation or organization) | ||
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 |
Large Accelerated filerþ | Accelerated filero | Non-Accelerated filero | Smaller reporting companyo | |||
(Do not check if a smaller reporting company) |
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Item 1. | Business. |
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Americas | ||||||||||||||||||||||||
Canada, | ||||||||||||||||||||||||
Latin/ | ||||||||||||||||||||||||
South | Asia- | |||||||||||||||||||||||
Year: | U.S. | Americas | Japan | Pacific | Europe | Total | ||||||||||||||||||
2000 | 42 | 4 | 44 | 21 | 8 | 119 | ||||||||||||||||||
2001 | 44 | 5 | 47 | 20 | 10 | 126 | ||||||||||||||||||
2002 | 47 | 5 | 48 | 20 | 11 | 131 | ||||||||||||||||||
2003 | 51 | 7 | 50 | 22 | 11 | 141 | ||||||||||||||||||
2004 | 55 | 7 | 53 | 24 | 12 | 151 | ||||||||||||||||||
2005 | 59 | 7 | 50 | 25 | 13 | 154 | ||||||||||||||||||
2006 | 64 | 9 | 52 | 28 | 14 | 167 | ||||||||||||||||||
2007 | 70 | 10 | 53 | 34 | 17 | 184 | ||||||||||||||||||
2008 | 76 | 10 | 57 | 39 | 24 | 206 | ||||||||||||||||||
2009 | 79 | 12 | 57 | 45 | 27 | 220 | ||||||||||||||||||
2010 | 84 | 12 | 56 | 52 | 29 | 233 |
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% to total | % to total | |||||||||||||||||||
% to total | Asia- | % to total | % to total | Reportable | ||||||||||||||||
Americas | Pacific | Japan | Europe | Segment | ||||||||||||||||
Sales | Sales | Sales | Sales | Sales | ||||||||||||||||
2010 | ||||||||||||||||||||
Statement, fine & solitaire jewelrya | 15 | % | 23 | % | 13 | % | 13 | % | 16 | % | ||||||||||
Engagement jewelry & wedding bandsb | 21 | % | 35 | % | 42 | % | 25 | % | 28 | % | ||||||||||
Silver & gold jewelryc | 35 | % | 28 | % | 17 | % | 45 | % | 32 | % | ||||||||||
Designer jewelryd | 17 | % | 12 | % | 21 | % | 13 | % | 16 | % | ||||||||||
2009 | ||||||||||||||||||||
Statement, fine & solitaire jewelrya | 14 | % | 21 | % | 11 | % | 13 | % | 14 | % | ||||||||||
Engagement jewelry & wedding bandsb | 21 | % | 34 | % | 43 | % | 23 | % | 27 | % | ||||||||||
Silver & gold jewelryc | 38 | % | 30 | % | 19 | % | 47 | % | 34 | % | ||||||||||
Designer jewelryd | 16 | % | 12 | % | 20 | % | 14 | % | 16 | % | ||||||||||
2008 | ||||||||||||||||||||
Statement, fine & solitaire jewelrya | 15 | % | 22 | % | 10 | % | 16 | % | 15 | % | ||||||||||
Engagement jewelry & wedding bandsb | 21 | % | 32 | % | 42 | % | 23 | % | 27 | % | ||||||||||
Silver & gold jewelryc | 33 | % | 28 | % | 19 | % | 43 | % | 31 | % | ||||||||||
Designer jewelryd | 17 | % | 14 | % | 21 | % | 16 | % | 17 | % |
a) | This category includes statement, fine and solitaire jewelry (other than engagement jewelry). Most jewelry in this category is constructed of platinum, although gold was used as the primary metal in approximately 5% of sales. Most items in this category contain diamonds, other gemstones or both. The average price of merchandise sold in 2010, 2009 and 2008 in this category was approximately $4,400, $4,200 and $4,700 for total reportable segments. | |
b) | This category includes diamond engagement rings and wedding bands marketed to brides and grooms. Most jewelry in this category is constructed of platinum, although gold was used as the primary metal in approximately 5% of sales. Most sales in this category are of items containing diamonds. The average price of merchandise sold in 2010, 2009 and 2008 in this category was approximately $3,400, $3,200 and $3,100 for total reportable segments. | |
c) | This category generally consists of non-gemstone, sterling silver (approximately 70% of the category in 2010) or gold jewelry, although small gemstones are used as accents in some pieces. This category does not include jewelry that bears a designer’s name. The average price of merchandise sold in 2010, 2009 and 2008 in this category was approximately $230, $210 and $230 for total reportable segments. | |
d) | This category generally consists of platinum, gold and sterling silver jewelry, some of which contains diamonds, other gemstones or a combination of both diamonds and other gemstones. This category includes only jewelry that bears the name of and is attributed to one of the Company’s “named” designers: Elsa Peretti, Paloma Picasso, Frank Gehry and Jean Schlumberger (refer to “MATERIAL DESIGNER LICENSE” below). The average price of |
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merchandise sold in 2010, 2009 and 2008 in this category was approximately $450, $420 and $410 for total reportable segments. |
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Item 1A. | Risk Factors. |
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Item 1B. | Unresolved Staff Comments. |
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Item 2. | Properties. |
Gross | ||||||||||||||||
Total Gross | Retail | Average | ||||||||||||||
Retail | Square | Gross Retail | ||||||||||||||
Total | Square | Footage | Square | |||||||||||||
Stores | Footage | Range | Footage | |||||||||||||
Americas: | ||||||||||||||||
New York Flagship | 1 | 45,500 | 45,500 | 45,500 | ||||||||||||
Other stores | 95 | 598,100 | 1,000 – 17,600 | 6,300 | ||||||||||||
Asia-Pacific | 52 | 128,700 | 700 – 7,700 | 2,500 | ||||||||||||
Japan: | ||||||||||||||||
Tokyo Ginza | 1 | 12,000 | 12,000 | 12,000 | ||||||||||||
Other stores | 55 | 134,900 | 600 – 7,500 | 2,500 | ||||||||||||
Europe: | ||||||||||||||||
London Old Bond Street | 1 | 22,400 | 22,400 | 22,400 | ||||||||||||
Other stores | 28 | 85,500 | 600 – 7,100 | 3,100 | ||||||||||||
Total | 233 | 1,027,100 | 600 – 45,500 | 4,400 | ||||||||||||
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Item 3. | Legal Proceedings. |
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Item 4. | (Removed and Reserved). |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
High | Low | |||||||
First Quarter | $ | 52.19 | $ | 38.89 | ||||
Second Quarter | $ | 49.74 | $ | 35.81 | ||||
Third Quarter | $ | 53.00 | $ | 39.43 | ||||
Fourth Quarter | $ | 65.76 | $ | 52.96 |
High | Low | |||||||
First Quarter | $ | 30.17 | $ | 16.70 | ||||
Second Quarter | $ | 31.31 | $ | 23.85 | ||||
Third Quarter | $ | 42.62 | $ | 29.06 | ||||
Fourth Quarter | $ | 47.02 | $ | 39.01 |
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(c) Total | (d) Maximum | |||||||||||||||
Number of | Number (or | |||||||||||||||
Shares (or | Approximate | |||||||||||||||
(b) | Units) | Dollar Value) | ||||||||||||||
Average | Purchased as | of Shares (or | ||||||||||||||
(a) Total | Price | Part of | Units) that May | |||||||||||||
Number of | Paid per | Publicly | Yet Be | |||||||||||||
Shares (or | Share | Announced | Purchased | |||||||||||||
Units) | (or | Plans or | Under the Plans | |||||||||||||
Period | Purchased | Unit) | Programs | or Programs | ||||||||||||
November 1, 2010 to November 30, 2010 | — | — | — | $ | 329,154,000 | |||||||||||
December 1, 2010 to December 31, 2010 | — | — | — | $ | 329,154,000 | |||||||||||
January 1, 2011 to January 31, 2011 | 137,000 | $ | 58.26 | 137,000 | $ | 392,019,000 | ||||||||||
TOTAL | 137,000 | $ | 58.26 | 137,000 | $ | 392,019,000 |
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Item 6. | Selected Financial Data. |
(in thousands, except per share amounts, | ||||||||||||||||||||
percentages, ratios, retail locations and employees) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
EARNINGS DATA | ||||||||||||||||||||
Net sales | $ | 3,085,290 | $ | 2,709,704 | $ | 2,848,859 | $ | 2,927,751 | $ | 2,552,414 | ||||||||||
Gross profit | 1,822,278 | 1,530,219 | 1,646,442 | 1,651,501 | 1,468,990 | |||||||||||||||
Selling, general & administrative expenses | 1,227,497 | 1,089,727 | 1,153,944 | 1,169,108 | 996,090 | |||||||||||||||
Net earnings from continuing operations | 368,403 | 265,676 | 232,155 | 369,999 | 294,615 | |||||||||||||||
Net earnings | 368,403 | 264,823 | 220,022 | 323,478 | 272,897 | |||||||||||||||
Net earnings from continuing operations per diluted share | 2.87 | 2.12 | 1.84 | 2.68 | 2.09 | |||||||||||||||
Net earnings per diluted share | 2.87 | 2.11 | 1.74 | 2.34 | 1.94 | |||||||||||||||
Weighted-average number of diluted common shares | 128,406 | 125,383 | 126,410 | 138,140 | 140,841 | |||||||||||||||
BALANCE SHEET AND CASH FLOW DATA | ||||||||||||||||||||
Total assets | $ | 3,735,669 | $ | 3,488,360 | $ | 3,102,283 | $ | 3,000,904 | $ | 2,904,552 | ||||||||||
Cash and cash equivalents | 681,591 | 785,702 | 160,445 | 246,654 | 175,008 | |||||||||||||||
Inventories, net | 1,625,302 | 1,427,855 | 1,601,236 | 1,372,397 | 1,249,613 | |||||||||||||||
Short-term borrowings and long-term debt (including current portion) | 688,240 | 754,049 | 708,804 | 453,137 | 518,462 | |||||||||||||||
Stockholders’ equity | 2,177,475 | 1,883,239 | 1,588,371 | 1,716,115 | 1,863,937 | |||||||||||||||
Working capital | 2,204,632 | 1,845,393 | 1,446,812 | 1,337,454 | 1,313,015 | |||||||||||||||
Cash flows from operating activities | 298,925 | 687,199 | 142,270 | 406,055 | 255,060 | |||||||||||||||
Capital expenditures | 127,002 | 75,403 | 154,409 | 184,266 | 165,419 | |||||||||||||||
Stockholders’ equity per share | 17.15 | 14.91 | 12.83 | 13.54 | 13.72 | |||||||||||||||
Cash dividends paid per share | 0.95 | 0.68 | 0.66 | 0.52 | 0.38 | |||||||||||||||
RATIO ANALYSIS AND OTHER DATA | ||||||||||||||||||||
As a percentage of net sales: | ||||||||||||||||||||
Gross profit | 59.1 | % | 56.5 | % | 57.8 | % | 56.4 | % | 57.6 | % | ||||||||||
Selling, general & administrative expenses | 39.8 | % | 40.2 | % | 40.5 | % | 39.9 | % | 39.0 | % | ||||||||||
Net earnings from continuing operations | 11.9 | % | 9.8 | % | 8.1 | % | 12.6 | % | 11.5 | % | ||||||||||
Net earnings | 11.9 | % | 9.8 | % | 7.7 | % | 11.0 | % | 10.7 | % | ||||||||||
Capital expenditures | 4.1 | % | 2.8 | % | 5.4 | % | 6.3 | % | 6.5 | % | ||||||||||
Return on average assets | 10.2 | % | 8.0 | % | 7.2 | % | 11.0 | % | 9.5 | % | ||||||||||
Return on average stockholders’ equity | 18.1 | % | 15.3 | % | 13.3 | % | 18.1 | % | 14.6 | % | ||||||||||
Total debt-to-equity ratio | 31.6 | % | 40.0 | % | 44.6 | % | 26.4 | % | 27.8 | % | ||||||||||
Dividends as a percentage of net earnings | 32.7 | % | 31.9 | % | 37.4 | % | 21.6 | % | 19.3 | % | ||||||||||
Company-operated TIFFANY & CO. stores and boutiques | 233 | 220 | 206 | 184 | 167 | |||||||||||||||
Number of employees | 9,200 | 8,400 | 9,000 | 8,800 | 8,700 |
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• | $17,635,000 pre-tax expense associated with the plan to consolidate the New York headquarters staff to a single location. This expense is primarily related to the acceleration of the useful lives of certain property and equipment and incremental rent during the transition period; and |
• | $3,096,000 net income tax benefit primarily due to a change in the tax status of certain subsidiaries associated with the acquisition in 2009 of additional equity interests in diamond sourcing and polishing operations. |
• | $4,000,000 pre-tax expense related to the termination of a third-party management agreement; |
• | $4,442,000 pre-tax income in connection with the assignment to an unrelated third party of the Tahera Diamond Corporation (“Tahera”) note receivable previously impaired in 2007; and |
• | $11,220,000 income tax benefit associated with the settlement of certain tax audits and the expiration of statutory periods. |
• | $97,839,000 pre-tax expense related to staffing reductions; |
• | $12,373,000 pre-tax impairment charge related to an investment in Target Resources plc; |
• | $7,549,000 pre-tax charge due to the closing of IRIDESSE stores, included within discontinued operations; and |
• | $3,382,000 pre-tax charge for the closing of a diamond polishing facility in Yellowknife, Northwest Territories. |
• | $105,051,000 pre-tax gain related to the sale of the land and multi-tenant building housing a TIFFANY & CO. store in Tokyo’s Ginza shopping district; |
• | $10,000,000 pre-tax contribution to The Tiffany & Co. Foundation funded with the proceeds from the Tokyo store transaction; |
• | $54,260,000 pre-tax expense due to the sale of Little Switzerland, Inc., included within discontinued operations; |
• | $47,981,000 pre-tax impairment charge on the note receivable from Tahera; |
• | $19,212,000 pre-tax charge related to management’s decision to discontinue certain watch models as a result of the Company entering into an agreement with The Swatch Group, Ltd.; and |
• | $15,532,000 pre-tax charge due to impairment losses associated with the Company’s IRIDESSE stores, included within discontinued operations. |
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Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | To selectively expand its global distribution without compromising the value of the TIFFANY & CO. trademark (the “Brand”). |
• | To enhance customer awareness. |
• | To increase store productivity. |
• | To achieve improved operating margins. |
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• | To maintain an active product development program. |
• | To maintain substantial control over product supply through direct diamond sourcing and internal jewelry manufacturing. |
• | To provide superior customer service. |
• | Worldwide net sales increased 14% to $3,085,290,000, due to growth in all reportable segments. |
• | On a constant-exchange-rate basis (see “Non-GAAP Measures” below), worldwide net sales increased 12% and comparable store sales increased 8%. |
• | The Company added a net of 13 TIFFANY & CO. stores (five in the Americas, seven in Asia-Pacific, two in Europe and a net reduction of one in Japan). |
• | The Company launched e-commerce websites in eight European countries. |
• | Operating margin increased 3.0 percentage points due to a higher gross margin and the leverage effect of increased sales compared with the growth in selling, general and administrative expenses. |
• | Net earnings from continuing operations increased 39% to $368,403,000, or $2.87 per diluted share. Net earnings from continuing operations in 2010 and 2009 are not comparable due to several nonrecurring items recorded in those periods (see “Item 6. Selected Financial Data — Notes to Selected Financial Data” for a listing of those items). Excluding those nonrecurring items in both years, net earnings from continuing operations would have increased 47% to $376,075,000, or $2.93 per diluted share from $255,220,000, or $2.04 per diluted share, in 2009. |
• | The Company issued, at par, ¥10,000,000,000 ($118,430,000 at issuance) of 1.72% Senior Notes due September 2016. The proceeds were used to repay a portion of ¥15,000,000,000 ($178,845,000 upon payment) of debt that came due in September. The Company also repaid $40,000,000 of debt that came due in December. |
• | The Board of Directors approved two increases, totaling 47%, in the dividend on the Company’s Common Stock increasing the annual dividend rate to $1.00 per share. |
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2010 | 2009 | |||||||||||||||||||||||
Constant- | Constant- | |||||||||||||||||||||||
GAAP | Translation | Exchange- | GAAP | Translation | Exchange- | |||||||||||||||||||
Reported | Effect | Rate Basis | Reported | Effect | Rate Basis | |||||||||||||||||||
Net Sales: | ||||||||||||||||||||||||
Worldwide | 14 | % | 2 | % | 12 | % | (5 | )% | — | % | (5 | )% | ||||||||||||
Americas | 12 | 1 | 11 | (11 | ) | — | (11 | ) | ||||||||||||||||
Asia-Pacific | 29 | 6 | 23 | 17 | (2 | ) | 19 | |||||||||||||||||
Japan | 7 | 8 | (1 | ) | (4 | ) | 7 | (11 | ) | |||||||||||||||
Europe | 18 | (5 | ) | 23 | 12 | (7 | ) | 19 | ||||||||||||||||
Comparable Store Sales: | ||||||||||||||||||||||||
Worldwide | 10 | % | 2 | % | 8 | % | (7 | )% | 1 | % | (8 | )% | ||||||||||||
Americas | 9 | 1 | 8 | (14 | ) | — | (14 | ) | ||||||||||||||||
Asia-Pacific | 19 | 5 | 14 | 8 | — | 8 | ||||||||||||||||||
Japan | 4 | 8 | (4 | ) | (4 | ) | 7 | (11 | ) | |||||||||||||||
Europe | 13 | (5 | ) | 18 | 3 | (6 | ) | 9 |
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2010 vs. | 2009 vs. | |||||||||||||||||||
2009 | 2008 | |||||||||||||||||||
(in thousands) | 2010 | 2009 | 2008 | % Change | % Change | |||||||||||||||
Americas | $ | 1,574,571 | $ | 1,410,845 | $ | 1,586,636 | 12 | % | (11 | )% | ||||||||||
Asia-Pacific | 549,197 | 426,296 | 363,095 | 29 | 17 | |||||||||||||||
Japan | 546,537 | 512,989 | 533,474 | 7 | (4 | ) | ||||||||||||||
Europe | 360,831 | 306,321 | 273,093 | 18 | 12 | |||||||||||||||
Other | 54,154 | 53,253 | 92,561 | 2 | (42 | ) | ||||||||||||||
$ | 3,085,290 | $ | 2,709,704 | $ | 2,848,859 | 14 | % | (5 | )% | |||||||||||
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2010 | 2009 | 2008 | ||||||||||
Gross profit as a percentage of net sales | 59.1 | % | 56.5 | % | 57.8 | % |
2010 | 2009 | 2008 | ||||||||||
SG&A expenses as a percentage of net sales | 39.8 | % | 40.2 | % | 40.5 | % |
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• | $4,442,000 of income received in connection with the assignment of the Tahera Diamond Corporation (“Tahera”) commitments and liens to an unrelated third party (see “Item 8. Financial Statements and Supplementary Data — Note L. Commitments and Contingencies”); and |
• | $4,000,000 charge to terminate a third-party management agreement (see “Item 8. Financial Statements and Supplementary Data — Note C. Acquisitions and Dispositions”). |
• | $11,062,000 impairment charge on the investment in Target Resources plc (“Target”) (see “Item 8. Financial Statements and Supplementary Data — Note L. Commitments and Contingencies”); and |
• | $3,382,000 charge for the closing of a diamond polishing facility in Yellowknife, Northwest Territories (see “Item 8. Financial Statements and Supplementary Data — Note C. Acquisitions and Dispositions”). |
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% of | % of | % of | ||||||||||||||||||||||
(in thousands) | 2010 | Sales* | 2009 | Sales* | 2008 | Sales* | ||||||||||||||||||
Earnings (losses) from continuing operations: | ||||||||||||||||||||||||
Americas | $ | 340,331 | 21.6 | % | $ | 263,470 | 18.7 | % | $ | 317,964 | 20.0 | % | ||||||||||||
Asia-Pacific | 133,448 | 24.3 | 100,690 | 23.6 | 88,724 | 24.4 | ||||||||||||||||||
Japan | 162,800 | 29.8 | 139,519 | 27.2 | 141,802 | 26.6 | ||||||||||||||||||
Europe | 88,309 | 24.5 | 60,102 | 19.6 | 52,021 | 19.0 | ||||||||||||||||||
Other | 3,358 | 6.2 | (8,767 | ) | (16.5 | ) | 4,938 | 5.3 | ||||||||||||||||
728,246 | 555,014 | 605,449 | ||||||||||||||||||||||
Unallocated corporate expenses | (115,830 | ) | (3.8 | )% | (114,964 | ) | (4.2 | )% | (101,889 | ) | (3.6 | )% | ||||||||||||
Restructuring charges | — | — | (97,839 | ) | ||||||||||||||||||||
Other operating income | — | 4,442 | — | |||||||||||||||||||||
Other operating expense | (17,635 | ) | (4,000 | ) | (11,062 | ) | ||||||||||||||||||
Earnings from continuing operations | $ | 594,781 | 19.3 | % | $ | 440,492 | 16.3 | % | $ | 394,659 | 13.9 | % | ||||||||||||
* | Percentages represent earnings (losses) from continuing operations as a percentage of each segment’s net sales. |
• | Americas — the ratio increased 2.9 percentage points primarily due to an increase in gross margin, as well as the leveraging of operating expenses; |
• | Asia-Pacific — the ratio increased 0.7 percentage point due to an increase in gross margin, which was partly offset by an increase in marketing expenses associated with a major marketing and public relations event held in Beijing, China; |
• | Japan — the ratio increased 2.6 percentage points primarily due to an increase in gross margin, which was partly offset by an increase in marketing expenses; |
• | Europe — the ratio increased 4.9 percentage points primarily due to the leveraging of operating expenses, as well as an increase in gross margin; and |
• | Other — the ratio increased 22.7 percentage points. The prior period operating loss included a valuation adjustment related to the write-down of wholesale diamond inventory deemed not suitable for the Company’s needs. |
• | Americas — the ratio decreased 1.3 percentage points primarily due to a decline in gross margin due to higher product costs; |
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• | Asia-Pacific — the ratio decreased 0.8 percentage point due to a decline in gross margin due to higher product costs, partly offset by the leveraging of operating expenses; |
• | Japan — the ratio increased 0.6 percentage point due to decreased operating expenses attributed to the cost savings initiatives, partly offset by a decline in gross margin due to higher product costs; |
• | Europe — the ratio increased 0.6 percentage point due to operating expense leverage, partly offset by a decline in gross margin due to higher product costs; and |
• | Other — the ratio decreased 21.8 percentage points due to lower wholesale sales of diamonds and the write-down of wholesale diamond inventory. |
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• | A worldwide net sales increase of 12%-14%. Sales assumptions by region (in U.S. dollars) include a low-double-digit percentage increase in the Americas, at least a 20% increase in Asia-Pacific, a mid-single-digit percentage decline in Japan and more than a 20% increase in Europe. Other sales are expected to increase by more than 30%. |
• | Included in the above outlook for Japan, management has assumed some periodic store closings or limited store hours in Japan only through the end of the first quarter as a result of the earthquake-related events that occurred in March 2011. Management expects first quarter worldwide sales growth of 11%, with total Japan sales declining 15%. |
• | The opening of 21 Company-operated stores (eight in the Americas, eight in Asia-Pacific and five in Europe). |
• | An increase in operating margin of approximately one-half point due to both a higher gross margin reflecting a price increase taken in January 2011 to offset product cost increases and an improved ratio of SG&A expenses to net sales. |
• | Interest and other expenses, net of $46,000,000. |
• | An effective income tax rate of 34%. |
• | Net earnings per diluted share increasing 14% — 18% to $3.35 — $3.45. |
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• | An increase in net inventories of more than 15%. |
• | Capital expenditures of $250,000,000 — $275,000,000. |
(in thousands) | 2010 | 2009 | 2008 | |||||||||
Net cash provided by (used in): | ||||||||||||
Operating activities | $ | 298,925 | $ | 687,199 | $ | 142,270 | ||||||
Investing activities | (186,612 | ) | (80,893 | ) | (161,690 | ) | ||||||
Financing activities | (224,799 | ) | 10,538 | (39,708 | ) | |||||||
Effect of exchange rates on cash and cash equivalents | 8,375 | 14,300 | (18,035 | ) | ||||||||
Net cash used in discontinued operations | — | (5,887 | ) | (9,046 | ) | |||||||
Net (decrease) increase in cash and cash equivalents | $ | (104,111 | ) | $ | 625,257 | $ | (86,209 | ) | ||||
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(in thousands, except per share amounts) | 2010 | 2009 | 2008 | |||||||||
Cost of repurchases | $ | 80,786 | $ | 467 | $ | 218,379 | ||||||
Shares repurchased and retired | 1,843 | 11 | 5,375 | |||||||||
Average cost per share | $ | 43.83 | $ | 41.72 | $ | 40.63 |
(in thousands) | 2010 | 2009 | 2008 | |||||||||
Short-term borrowings: | ||||||||||||
Proceeds from (repayment of) credit facility borrowings, net | $ | 9,170 | $ | (126,811 | ) | $ | 103,976 | |||||
Proceeds from issuance of other short-term borrowings | — | — | 116,001 | |||||||||
Repayments of other short-term borrowings | — | (93,000 | ) | (25,473 | ) | |||||||
Net proceeds from (repayments of) short-term borrowings | 9,170 | (219,811 | ) | 194,504 | ||||||||
Long-term borrowings: | ||||||||||||
Proceeds from issuance | 118,430 | 300,000 | 100,000 | |||||||||
Repayments | (218,845 | ) | (40,000 | ) | (73,483 | ) | ||||||
Net (repayments of) proceeds from long-term borrowings | (100,415 | ) | 260,000 | 26,517 | ||||||||
Net (repayments of) proceeds from total borrowings | $ | (91,245 | ) | $ | 40,189 | $ | 221,021 | |||||
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2012- | 2014- | |||||||||||||||||||
(in thousands) | Total | 2011 | 2013 | 2015 | Thereafter | |||||||||||||||
Unrecorded contractual obligations: | ||||||||||||||||||||
Operating leases | $ | 1,273,066 | $ | 151,742 | $ | 267,513 | $ | 213,661 | $ | 640,150 | ||||||||||
Inventory purchase obligationsa | 305,442 | 193,442 | 112,000 | — | — | |||||||||||||||
Interest on debtb | 274,056 | 45,559 | 84,099 | 81,332 | 63,066 | |||||||||||||||
Other contractual obligationsc | 36,815 | 32,594 | 2,221 | 2,000 | — | |||||||||||||||
Recorded contractual obligations: | ||||||||||||||||||||
Short-term borrowings | 38,891 | 38,891 | — | — | — | |||||||||||||||
Long-term debt | 649,349 | 60,855 | 62,531 | 104,252 | 421,711 | |||||||||||||||
$ | 2,577,619 | $ | 523,083 | $ | 528,364 | $ | 401,245 | $ | 1,124,927 | |||||||||||
a) | The Company will, from time to time, secure supplies of diamonds by agreeing to purchase a defined portion of a mine’s output. Inventory purchase obligations associated with these agreements have been estimated for 2011 and included in this table. Purchases beyond 2011 that are contingent upon mine production have been excluded as they cannot be reasonably estimated. | |
b) | 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, 2011. Actual payments will differ based on changes in interest rates. | |
c) | Other contractual obligations consist primarily of royalty commitments, construction-in-progress and packaging supplies. |
• | Cash contributions to the Company’s pension plan and cash payments for other postretirement obligations. The Company plans to contribute approximately $25,000,000 to the pension plan in 2011. However, this expectation is subject to change if actual asset |
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performance is different than the assumed long-term rate of return on pension plan assets. The Company estimates cash payments for postretirement health-care and life insurance benefit obligations to be $2,649,000 in 2011. |
• | Unrecognized tax benefits at January 31, 2011 of $32,273,000 and accrued interest and penalties of $4,189,000. The final outcome of tax uncertainties is dependent upon various matters including tax examinations, interpretation of the applicable tax laws or expiration of statutes of limitations. The Company believes that its tax positions comply with applicable tax law and that it has adequately provided for these matters. However, the audits may result in proposed assessments where the ultimate resolution may result in the Company owing additional taxes. Ongoing audits are in various stages of completion and, while the Company does not anticipate any material changes in unrecognized income tax benefits over the next 12 months, future developments in the audit process may result in a change in these assessments. |
Total | Borrowings | Available | ||||||||||
(in thousands) | Capacity | Outstanding | Capacity | |||||||||
Credit Facility* | $ | 400,000 | $ | 14,888 | $ | 385,112 | ||||||
Other revolving credit facilities | 46,000 | 24,003 | 21,997 | |||||||||
$ | 446,000 | $ | 38,891 | $ | 407,109 | |||||||
* | This facility matures in July 2012. The Company can request to increase the capacity up to $500,000,000. |
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Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. |
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Item 8. | Financial Statements and Supplementary Data. |
New York, New York
March 28, 2011
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January 31, | ||||||||
(in thousands, except per share amounts) | 2011 | 2010 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 681,591 | $ | 785,702 | ||||
Short-term investments | 59,280 | — | ||||||
Accounts receivable, less allowances of $11,783 and $12,892 | 185,969 | 158,706 | ||||||
Inventories, net | 1,625,302 | 1,427,855 | ||||||
Deferred income taxes | 41,826 | 6,651 | ||||||
Prepaid expenses and other current assets | 90,577 | 66,752 | ||||||
Total current assets | 2,684,545 | 2,445,666 | ||||||
Property, plant and equipment, net | 665,588 | 685,101 | ||||||
Deferred income taxes | 202,902 | 183,825 | ||||||
Other assets, net | 182,634 | 173,768 | ||||||
$ | 3,735,669 | $ | 3,488,360 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | 38,891 | $ | 27,642 | ||||
Current portion of long-term debt | 60,855 | 206,815 | ||||||
Accounts payable and accrued liabilities | 258,611 | 231,913 | ||||||
Income taxes payable | 55,691 | 67,513 | ||||||
Merchandise and other customer credits | 65,865 | 66,390 | ||||||
Total current liabilities | 479,913 | 600,273 | ||||||
Long-term debt | 588,494 | 519,592 | ||||||
Pension/postretirement benefit obligations | 217,435 | 219,276 | ||||||
Deferred gains on sale-leasebacks | 124,980 | 128,649 | ||||||
Other long-term liabilities | 147,372 | 137,331 | ||||||
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 126,969 and 126,326 | 1,269 | 1,263 | ||||||
Additional paid-in capital | 863,967 | 764,132 | ||||||
Retained earnings | 1,324,804 | 1,151,109 | ||||||
Accumulated other comprehensive loss, net of tax | (12,565 | ) | (33,265 | ) | ||||
Total stockholders’ equity | 2,177,475 | 1,883,239 | ||||||
$ | 3,735,669 | $ | 3,488,360 | |||||
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Years Ended January 31, | ||||||||||||
(in thousands, except per share amounts) | 2011 | 2010 | 2009 | |||||||||
Net sales | $ | 3,085,290 | $ | 2,709,704 | $ | 2,848,859 | ||||||
Cost of sales | 1,263,012 | 1,179,485 | 1,202,417 | |||||||||
Gross profit | 1,822,278 | 1,530,219 | 1,646,442 | |||||||||
Restructuring charges | — | — | 97,839 | |||||||||
Selling, general and administrative expenses | 1,227,497 | 1,089,727 | 1,153,944 | |||||||||
Earnings from continuing operations | 594,781 | 440,492 | 394,659 | |||||||||
Interest expense and financing costs | 54,335 | 55,041 | 28,977 | |||||||||
Other income, net | 6,988 | 4,523 | 77 | |||||||||
Earnings from continuing operations before income taxes | 547,434 | 389,974 | 365,759 | |||||||||
Provision for income taxes | 179,031 | 124,298 | 133,604 | |||||||||
Net earnings from continuing operations | 368,403 | 265,676 | 232,155 | |||||||||
Net loss from discontinued operations | — | (853 | ) | (12,133 | ) | |||||||
Net earnings | $ | 368,403 | $ | 264,823 | $ | 220,022 | ||||||
Earnings per share: | ||||||||||||
Basic | ||||||||||||
Net earnings from continuing operations | $ | 2.91 | $ | 2.14 | $ | 1.86 | ||||||
Net loss from discontinued operations | — | (0.01 | ) | (0.10 | ) | |||||||
Net earnings | $ | 2.91 | $ | 2.13 | $ | 1.76 | ||||||
Diluted | ||||||||||||
Net earnings from continuing operations | $ | 2.87 | $ | 2.12 | $ | 1.84 | ||||||
Net loss from discontinued operations | — | (0.01 | ) | (0.10 | ) | |||||||
Net earnings | $ | 2.87 | $ | 2.11 | $ | 1.74 | ||||||
Weighted-average number of common shares: | ||||||||||||
Basic | 126,600 | 124,345 | 124,734 | |||||||||
Diluted | 128,406 | 125,383 | 126,410 |
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Accumulated | ||||||||||||||||||||||||
Other | ||||||||||||||||||||||||
Total | Comprehensive | Additional | ||||||||||||||||||||||
Stockholders’ | Retained | Gain | Common Stock | Paid-In | ||||||||||||||||||||
(in thousands) | Equity | Earnings | (Loss) | Shares | Amount | Capital | ||||||||||||||||||
Balances January 31, 2008 | $ | 1,716,115 | $ | 1,037,663 | $ | 44,513 | 126,753 | $ | 1,268 | $ | 632,671 | |||||||||||||
Implementation effect of change in employee benefit plans’ measurement date, net of tax | (1,073 | ) | (1,114 | ) | 41 | — | — | — | ||||||||||||||||
Exercise of stock options and vesting of restricted stock units (“RSUs”) | 30,357 | — | — | 2,342 | 23 | 30,334 | ||||||||||||||||||
Tax effect of exercise of stock options and vesting of RSUs | 10,317 | — | — | — | — | 10,317 | ||||||||||||||||||
Share-based compensation expense | 24,507 | — | — | — | — | 24,507 | ||||||||||||||||||
Issuance of Common Stock under Employee Profit Sharing and Retirement Savings (“EPSRS”) Plan | 4,750 | — | — | 124 | 1 | 4,749 | ||||||||||||||||||
Purchase and retirement of Common Stock | (218,379 | ) | (203,014 | ) | — | (5,375 | ) | (54 | ) | (15,311 | ) | |||||||||||||
Cash dividends on Common Stock | (82,258 | ) | (82,258 | ) | — | — | — | — | ||||||||||||||||
Deferred hedging loss, net of tax | (9,873 | ) | — | (9,873 | ) | — | — | — | ||||||||||||||||
Unrealized loss on marketable securities, net of tax | (5,519 | ) | — | (5,519 | ) | — | — | — | ||||||||||||||||
Foreign currency translation adjustments, net of tax | (68,355 | ) | — | (68,355 | ) | — | — | — | ||||||||||||||||
Net unrealized loss on benefit plans, net of tax | (32,240 | ) | — | (32,240 | ) | — | — | — | ||||||||||||||||
Net earnings | 220,022 | 220,022 | — | — | — | — | ||||||||||||||||||
Balances, January 31, 2009 | 1,588,371 | 971,299 | (71,433 | ) | 123,844 | 1,238 | 687,267 | |||||||||||||||||
Exercise of stock options and vesting of RSUs | 71,485 | — | — | 2,493 | 25 | 71,460 | ||||||||||||||||||
Tax effect of exercise of stock options and vesting of RSUs | 1,896 | — | — | — | — | 1,896 | ||||||||||||||||||
Share-based compensation expense | 23,995 | — | — | — | — | 23,995 | ||||||||||||||||||
Purchase and retirement of Common Stock | (467 | ) | (434 | ) | — | (11 | ) | — | (33 | ) | ||||||||||||||
Purchase of non-controlling interests | (20,453 | ) | — | — | — | — | (20,453 | ) | ||||||||||||||||
Cash dividends on Common Stock | (84,579 | ) | (84,579 | ) | — | — | — | — | ||||||||||||||||
Deferred hedging gain, net of tax | 6,377 | — | 6,377 | — | — | — | ||||||||||||||||||
Unrealized gain on marketable securities, net of tax | 4,241 | — | 4,241 | — | — | — | ||||||||||||||||||
Foreign currency translation adjustments, net of tax | 42,750 | — | 42,750 | — | — | — | ||||||||||||||||||
Net unrealized loss on benefit plans, net of tax | (15,200 | ) | — | (15,200 | ) | — | — | — | ||||||||||||||||
Net earnings | 264,823 | 264,823 | — | — | — | — | ||||||||||||||||||
Balances, January 31, 2010 | 1,883,239 | 1,151,109 | (33,265 | ) | 126,326 | 1,263 | 764,132 | |||||||||||||||||
Exercise of stock options and vesting of RSUs | 65,683 | — | — | 2,382 | 23 | 65,660 | ||||||||||||||||||
Tax effect of exercise of stock options and vesting of RSUs | 9,811 | — | — | — | — | 9,811 | ||||||||||||||||||
Share-based compensation expense | 25,815 | — | — | — | — | 25,815 | ||||||||||||||||||
Issuance of Common Stock under EPSRS Plan | 5,000 | — | — | 104 | 1 | 4,999 | ||||||||||||||||||
Purchase and retirement of Common Stock | (80,786 | ) | (74,318 | ) | — | (1,843 | ) | (18 | ) | (6,450 | ) | |||||||||||||
Cash dividends on Common Stock | (120,390 | ) | (120,390 | ) | — | — | — | — | ||||||||||||||||
Deferred hedging gain, net of tax | 1,415 | — | 1,415 | — | — | — | ||||||||||||||||||
Unrealized gain on marketable securities, net of tax | 2,041 | — | 2,041 | — | — | — | ||||||||||||||||||
Foreign currency translation adjustments, net of tax | 24,903 | — | 24,903 | — | — | — | ||||||||||||||||||
Net unrealized loss on benefit plans, net of tax | (7,659 | ) | — | (7,659 | ) | — | — | — | ||||||||||||||||
Net earnings | 368,403 | 368,403 | — | — | — | — | ||||||||||||||||||
Balances, January 31, 2011 | $ | 2,177,475 | $ | 1,324,804 | $ | (12,565 | ) | 126,969 | $ | 1,269 | $ | 863,967 | ||||||||||||
Years Ended January 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Comprehensive earnings are as follows: | ||||||||||||
Net earnings | $ | 368,403 | $ | 264,823 | $ | 220,022 | ||||||
Deferred hedging gain (loss), net of tax expense (benefit) of $1,031, $3,388, and ($6,307) | 1,415 | 6,377 | (9,873 | ) | ||||||||
Foreign currency translation adjustments, net of tax expense of $2,264, $716, and $1,015 | 24,903 | 42,750 | (68,355 | ) | ||||||||
Unrealized gain (loss) on marketable securities, net of tax expense (benefit) of $1,094, $2,302 and ($3,248) | 2,041 | 4,241 | (5,519 | ) | ||||||||
Net unrealized loss on benefit plans, net of tax benefit of ($3,706), ($10,525) and ($19,907) | (7,659 | ) | (15,200 | ) | (32,240 | ) | ||||||
Comprehensive earnings | $ | 389,103 | $ | 302,991 | $ | 104,035 | ||||||
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Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net earnings | $ | 368,403 | $ | 264,823 | $ | 220,022 | ||||||
Loss from discontinued operations, net of tax | — | 853 | 12,133 | |||||||||
Net earnings from continuing operations | 368,403 | 265,676 | 232,155 | |||||||||
Adjustments to reconcile net earnings from continuing operations to net cash provided by (used in) operating activities: | ||||||||||||
Restructuring charge | — | — | 97,839 | |||||||||
Depreciation and amortization | 147,870 | 139,419 | 135,832 | |||||||||
Amortization of gain on sale-leasebacks | (10,203 | ) | (9,802 | ) | (9,793 | ) | ||||||
Excess tax benefits from share-based payment arrangements | (9,124 | ) | (1,349 | ) | (10,196 | ) | ||||||
Provision for inventories | 25,608 | 31,599 | 20,996 | |||||||||
Deferred income taxes | (60,332 | ) | (14,839 | ) | 14,626 | |||||||
Provision for pension/postretirement benefits | 26,993 | 24,088 | 23,179 | |||||||||
Share-based compensation expense | 25,436 | 23,538 | 22,406 | |||||||||
Impairment charges | — | — | 21,164 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable | (22,563 | ) | 13,897 | 31,412 | ||||||||
Inventories | (187,773 | ) | 163,955 | (257,619 | ) | |||||||
Prepaid expenses and other current assets | (7,408 | ) | 60,323 | (19,283 | ) | |||||||
Other assets, net | 4,603 | (13,557 | ) | (94 | ) | |||||||
Accounts payable and accrued liabilities | 21,439 | 4,369 | 4,719 | |||||||||
Income taxes payable | 501 | 29,066 | (161,932 | ) | ||||||||
Merchandise and other customer credits | (999 | ) | (1,713 | ) | 476 | |||||||
Other long-term liabilities | (23,526 | ) | (27,471 | ) | (3,617 | ) | ||||||
Net cash provided by operating activities | 298,925 | 687,199 | 142,270 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Purchases of marketable securities and short-term investments | (61,556 | ) | (14,187 | ) | (1,543 | ) | ||||||
Proceeds from sales of marketable securities and short-term investments | 1,946 | 754 | — | |||||||||
Proceeds from sale of assets, net | — | 3,650 | — | |||||||||
Capital expenditures | (127,002 | ) | (75,403 | ) | (154,409 | ) | ||||||
Notes receivable funded | — | — | (5,000 | ) | ||||||||
Acquisitions, net of cash acquired | — | — | (1,900 | ) | ||||||||
Other | — | 4,293 | 1,162 | |||||||||
Net cash used in investing activities | (186,612 | ) | (80,893 | ) | (161,690 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Proceeds from (repayment of) credit facility borrowings, net | 9,170 | (126,811 | ) | 103,976 | ||||||||
Repayment of long-term debt | (218,845 | ) | (40,000 | ) | (73,483 | ) | ||||||
Proceeds from issuance of long-term debt | 118,430 | 300,000 | 100,000 | |||||||||
Repayments of short-term borrowings | — | (93,000 | ) | (25,473 | ) | |||||||
Proceeds from short-term borrowings | — | — | 116,001 | |||||||||
Repurchase of Common Stock | (80,786 | ) | (467 | ) | (218,379 | ) | ||||||
Proceeds from exercise of stock options | 65,683 | 71,485 | 30,357 | |||||||||
Excess tax benefits from share-based payment arrangements | 9,124 | 1,349 | 10,196 | |||||||||
Cash dividends on Common Stock | (120,390 | ) | (84,579 | ) | (82,258 | ) | ||||||
Purchase of non-controlling interests | (7,000 | ) | (11,000 | ) | — | |||||||
Financing fees | (185 | ) | (6,439 | ) | (645 | ) | ||||||
Net cash (used in) provided by financing activities | (224,799 | ) | 10,538 | (39,708 | ) | |||||||
�� | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 8,375 | 14,300 | (18,035 | ) | ||||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | ||||||||||||
Operating activities | — | (5,887 | ) | (9,046 | ) | |||||||
Net cash used in discontinued operations | — | (5,887 | ) | (9,046 | ) | |||||||
Net (decrease) increase in cash and cash equivalents | (104,111 | ) | 625,257 | (86,209 | ) | |||||||
Cash and cash equivalents at beginning of year | 785,702 | 160,445 | 246,654 | |||||||||
Cash and cash equivalents at end of year | $ | 681,591 | $ | 785,702 | $ | 160,445 | ||||||
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• | Americas includes sales in TIFFANY & CO. stores in the United States, Canada and Latin/South America, as well as sales of TIFFANY & CO. products in certain markets through business-to-business, Internet, catalog and wholesale operations; |
• | Asia-Pacific includes sales in TIFFANY & CO. stores in Asia-Pacific markets (excluding Japan), as well as sales of TIFFANY & CO. products in certain markets through Internet and wholesale operations; |
• | Japan includes sales in TIFFANY & CO. stores, as well as sales of TIFFANY & CO. products through business-to-business, Internet and wholesale operations; |
• | Europe includes sales in TIFFANY & CO. stores, as well as sales of TIFFANY & CO. products in certain markets through Internet and wholesale operations; and |
• | Other consists of all non-reportable segments. Other consists primarily of wholesale sales of TIFFANY & CO. merchandise to independent distributors for resale in certain emerging markets (such as the Middle East and Russia) and wholesale sales of diamonds obtained through bulk purchases that were subsequently deemed not suitable for the Company’s needs. In addition, Other includes earnings received from third-party licensing agreements. |
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Buildings | 39 years | |||
Building Improvements | 10 years | |||
Machinery and Equipment | 5-15 years | |||
Office Equipment | 3-10 years | |||
Furniture and Fixtures | 2-10 years |
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Asia- | ||||||||||||||||||||
(in thousands) | Americas | Pacific | Japan | Europe | Total | |||||||||||||||
Balance, January 31, 2009 | $ | 12,464 | $ | 293 | $ | 1,156 | $ | 1,121 | $ | 15,034 | ||||||||||
Translation | 49 | 7 | 27 | 7 | 90 | |||||||||||||||
Balance, January 31, 2010 | 12,513 | 300 | 1,183 | 1,128 | 15,124 | |||||||||||||||
Translation | (31 | ) | (5 | ) | (19 | ) | (5 | ) | (60 | ) | ||||||||||
Balance, January 31, 2011 | $ | 12,482 | $ | 295 | $ | 1,164 | $ | 1,123 | $ | 15,064 | ||||||||||
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January 31, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Change in fair value of investments, net of tax | $ | 2,054 | $ | 4,314 | ||||
Adjustment for net gains realized and included in net earnings, net of tax | (13 | ) | (73 | ) | ||||
Change in unrealized gain on marketable securities | $ | 2,041 | $ | 4,241 | ||||
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Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Net earnings for basic and diluted EPS | $ | 368,403 | $ | 264,823 | $ | 220,022 | ||||||
Weighted-average shares for basic EPS | 126,600 | 124,345 | 124,734 | |||||||||
Incremental shares based upon the assumed exercise of stock options and unvested restricted stock units | 1,806 | 1,038 | 1,676 | |||||||||
Weighted-average shares for diluted EPS | 128,406 | 125,383 | 126,410 | |||||||||
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Years Ended January 31, | ||||||||
(in thousands) | 2010 | 2009 | ||||||
Net sales | $ | 13,232 | $ | 11,138 | ||||
Loss before income taxes | $ | (6,103 | ) | $ | (19,683 | ) | ||
Benefit from income taxes | 3,192 | 7,550 | ||||||
Net loss from discontinued operations | $ | (2,911 | ) | $ | (12,133 | ) | ||
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Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Interest, net of interest capitalization | $ | 47,107 | $ | 35,392 | $ | 23,889 | ||||||
Income taxes | $ | 237,829 | $ | 74,690 | $ | 296,864 | ||||||
Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Issuance of Common Stock under the Employee Profit Sharing and Retirement Savings Plan | $ | 5,000 | $ | — | $ | 4,750 | ||||||
January 31, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Finished goods | $ | 988,085 | $ | 904,523 | ||||
Raw materials | 534,879 | 450,966 | ||||||
Work-in-process | 102,338 | 72,366 | ||||||
$ | 1,625,302 | $ | 1,427,855 | |||||
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January 31, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Land | $ | 42,383 | $ | 42,355 | ||||
Buildings | 104,487 | 104,535 | ||||||
Leasehold and building improvements | 757,633 | 689,253 | ||||||
Office equipment | 388,224 | 365,516 | ||||||
Furniture and fixtures | 194,945 | 181,572 | ||||||
Machinery and equipment | 110,367 | 108,516 | ||||||
Construction-in-progress | 19,603 | 22,112 | ||||||
1,617,642 | 1,513,859 | |||||||
Accumulated depreciation and amortization | (952,054 | ) | (828,758 | ) | ||||
$ | 665,588 | $ | 685,101 | |||||
January 31, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Accounts payable — trade | $ | 91,313 | $ | 80,150 | ||||
Accrued compensation and commissions | 60,474 | 57,638 | ||||||
Accrued sales, withholding and other taxes | 15,414 | 21,148 | ||||||
Other | 91,410 | 72,977 | ||||||
$ | 258,611 | $ | 231,913 | |||||
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January 31, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Short-term borrowings: | ||||||||
Credit Facility | $ | 14,888 | $ | 22,842 | ||||
Other revolving credit facilities | 24,003 | 4,800 | ||||||
$ | 38,891 | $ | 27,642 | |||||
Long-term debt: | ||||||||
Senior Notes: | ||||||||
1998 7.05% Series B, due 2010 | $ | — | $ | 40,000 | ||||
2002 6.56% Series D, due 2012 | 62,531 | 63,005 | ||||||
2008 9.05% Series A, due 2015 | 104,252 | 100,982 | ||||||
2009 10.00% Series A, due 2018 | 50,000 | 50,000 | ||||||
2009 10.00% Series A, due 2017 | 125,000 | 125,000 | ||||||
2009 10.00% Series B, due 2019 | 125,000 | 125,000 | ||||||
2010 1.72% Notes, due 2016 | 121,711 | — | ||||||
4.50% yen loan, due 2011 | 60,855 | 55,605 | ||||||
First Series Yen Bonds, due 2010 | — | 166,815 | ||||||
649,349 | 726,407 | |||||||
Less current portion of long-term debt | 60,855 | 206,815 | ||||||
$ | 588,494 | $ | 519,592 | |||||
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Amount | ||||
Years Ending January 31, | (in thousands) | |||
2012 | $ | 60,855 | ||
2013 | 62,531 | |||
2014 | — | |||
2015 | — | |||
2016 | 104,252 | |||
Thereafter | 421,711 | |||
$ | 649,349 | |||
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• | Fair Value Hedge — A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment. For fair value hedge transactions, both the effective and ineffective portions of the changes in the fair value of the derivative and changes in the fair value of the item being hedged are recorded in current earnings. | ||
• | Cash Flow Hedge — A hedge of the exposure to variability in the cash flows of a recognized asset, liability or a forecasted transaction. For cash flow hedge transactions, the effective portion of the changes in fair value of derivatives are reported as other comprehensive income (“OCI”) and are recognized in current earnings in the period or periods during which the hedged transaction affects current earnings. Amounts excluded from the effectiveness calculation and any ineffective portions of the change in fair value of the derivative are recognized in current earnings. |
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16 months.
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Years Ended January 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Pre-Tax | Pre-Tax | Pre-Tax | Pre-Tax | |||||||||||||
Gain | Loss | Gain | Loss | |||||||||||||
Recognized | Recognized | Recognized | Recognized | |||||||||||||
in Earnings | in Earnings | in Earnings | in Earnings | |||||||||||||
on | on | on | on | |||||||||||||
(in thousands) | Derivatives | Hedged Item | Derivatives | Hedged Item | ||||||||||||
Derivatives in Fair Value Hedging Relationships: | ||||||||||||||||
Interest rate swap agreementsa | $ | 4,159 | $ | (3,655 | ) | $ | 1,996 | $ | (1,913 | ) | ||||||
Years Ended January 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
(Loss) Gain | (Loss) Gain | |||||||||||||||
Reclassified | Reclassified | |||||||||||||||
Pre-Tax | from | Pre-Tax | from | |||||||||||||
(Loss) Gain | Accumulated | (Loss) Gain | Accumulated | |||||||||||||
Recognized | OCI to | Recognized | OCI to | |||||||||||||
in OCI | Earnings | in OCI | Earnings | |||||||||||||
(Effective | (Effective | (Effective | (Effective | |||||||||||||
(in thousands) | Portion) | Portion) | Portion) | Portion) | ||||||||||||
Derivatives in Cash Flow Hedging Relationships: | ||||||||||||||||
Foreign exchange forward contracts c | $ | (2,596 | ) | $ | (885 | ) | $ | (3,029 | ) | $ | (1,675 | ) | ||||
Put option contractsc | (2,236 | ) | (2,711 | ) | (754 | ) | (3,840 | ) | ||||||||
Precious metal collarsc | 824 | (1,036 | ) | 2,996 | (3,126 | ) | ||||||||||
Precious metal forward contractsc | 3,550 | 1,728 | 1,937 | 28 | ||||||||||||
$ | (458 | ) | $ | (2,904 | ) | $ | 1,150 | $ | (8,613 | ) | ||||||
Pre-Tax (Loss) Gain Recognized | ||||||||
in Earnings on Derivatives | ||||||||
Year Ended | Year Ended | |||||||
(in thousands) | January 31, 2011 | January 31, 2010 | ||||||
Derivatives Not Designated as Hedging Instruments: | ||||||||
Foreign exchange forward contractsb | $ | (918 | )d | $ | (928 | )d | ||
Call option contractsc | 413 | 360 | ||||||
Put option contractsc | (454 | ) | (436 | ) | ||||
$ | (959 | ) | $ | (1,004 | ) | |||
a | The gain or loss recognized in earnings is included within Interest expense and financing costs on the Company’s Consolidated Statement of Earnings. | |
b | The gain or loss recognized in earnings is included within Other income, net on the Company’s Consolidated Statement of Earnings. |
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c | The gain or loss recognized in earnings is included within Cost of Sales on the Company’s Consolidated Statement of Earnings. | |
d | Gains or losses on the undesignated foreign exchange forward contracts substantially offset foreign exchange losses or gains on the liabilities and transactions being hedged. |
Years Ended January 31, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Balance at beginning of period | $ | (2,607 | ) | $ | (8,984 | ) | ||
Losses transferred to earnings, net of tax | 1,921 | 5,511 | ||||||
Change in fair value, net of tax | (506 | ) | 866 | |||||
$ | (1,192 | ) | $ | (2,607 | ) | |||
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Total | ||||||||||||||||||||
Carrying | Estimated Fair Value | Fair | ||||||||||||||||||
(in thousands) | Value | Level 1 | Level 2 | Level 3 | Value | |||||||||||||||
Mutual fundsa | $ | 43,887 | $ | 43,887 | $ | — | $ | — | $ | 43,887 | ||||||||||
Time depositsb | 59,280 | 59,280 | — | — | 59,280 | |||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Interest rate swap agreementsa | 6,155 | — | 6,155 | — | 6,155 | |||||||||||||||
Precious metal forward contractsc | 753 | — | 753 | — | 753 | |||||||||||||||
Foreign exchange forward contractsc | 374 | — | 374 | — | 374 | |||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Put option contractsc | 93 | — | 93 | — | 93 | |||||||||||||||
Foreign exchange forward contractsc | 205 | — | 205 | — | 205 | |||||||||||||||
Total financial assets | $ | 110,747 | $ | 103,167 | $ | 7,580 | $ | — | $ | 110,747 | ||||||||||
Total | ||||||||||||||||||||
Carrying | Estimated Fair Value | Fair | ||||||||||||||||||
(in thousands) | Value | Level 1 | Level 2 | Level 3 | Value | |||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Foreign exchange forward contractsd | $ | 2,064 | $ | — | $ | 2,064 | $ | — | $ | 2,064 | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Call option contractsd | 92 | — | 92 | — | 92 | |||||||||||||||
Foreign exchange forward contractsd | 141 | — | 141 | — | 141 | |||||||||||||||
Total financial liabilities | $ | 2,297 | $ | — | $ | 2,297 | $ | — | $ | 2,297 | ||||||||||
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Total | ||||||||||||||||||||
Carrying | Estimated Fair Value | Fair | ||||||||||||||||||
(in thousands) | Value | Level 1 | Level 2 | Level 3 | Value | |||||||||||||||
Mutual fundsa | $ | 39,961 | $ | 39,961 | $ | — | $ | — | $ | 39,961 | ||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Interest rate swap agreementsa | 1,996 | — | 1,996 | — | 1,996 | |||||||||||||||
Put option contractsc | 934 | — | 934 | — | 934 | |||||||||||||||
Precious metal forward contractsc | 1,720 | — | 1,720 | — | 1,720 | |||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Foreign exchange forward contractsc | 161 | — | 161 | — | 161 | |||||||||||||||
Put option contractsc | 151 | — | 151 | — | 151 | |||||||||||||||
Total financial assets | $ | 44,923 | $ | 39,961 | $ | 4,962 | $ | — | $ | 44,923 | ||||||||||
Total | ||||||||||||||||||||
Carrying | Estimated Fair Value | Fair | ||||||||||||||||||
(in thousands) | Value | Level 1 | Level 2 | Level 3 | Value | |||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Foreign exchange forward contractsd | $ | 646 | $ | — | $ | 646 | $ | — | $ | 646 | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Foreign exchange forward contractsd | 296 | — | 296 | — | 296 | |||||||||||||||
Call option contractsd | 151 | — | 151 | — | 151 | |||||||||||||||
Total financial liabilities | $ | 1,093 | $ | — | $ | 1,093 | $ | — | $ | 1,093 | ||||||||||
a | Included within Other assets, net on the Company’s Consolidated Balance Sheet. | |
b | Included within Short-term investments on the Company’s Consolidated Balance Sheet. | |
c | Included within Prepaid expenses and other current assets on the Company’s Consolidated Balance Sheet. | |
d | Included within Accounts payable and accrued liabilities on the Company’s Consolidated Balance Sheet. |
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Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Minimum rent for retail locations | $ | 100,214 | $ | 88,958 | $ | 74,902 | ||||||
Contingent rent based on sales | 52,935 | 40,498 | 39,002 | |||||||||
Office, distribution and manufacturing facilities and equipment | 37,020 | 28,407 | 31,391 | |||||||||
$ | 190,169 | $ | 157,863 | $ | 145,295 | |||||||
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Annual Minimum Rental Payments | ||||
Years Ending January 31, | (in thousands) | |||
2012 | $ | 151,742 | ||
2013 | 141,701 | |||
2014 | 125,812 | |||
2015 | 111,940 | |||
2016 | 101,721 | |||
Thereafter | 640,150 |
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January 31, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Accumulated other comprehensive (loss) gain, net of tax: | ||||||||
Foreign currency translation adjustments | $ | 41,415 | $ | 16,512 | ||||
Deferred hedging loss | (1,192 | ) | (2,607 | ) | ||||
Unrealized gain (loss) on marketable securities | 142 | (1,899 | ) | |||||
Net unrealized loss on benefit plans | (52,930 | ) | (45,271 | ) | ||||
$ | (12,565 | ) | $ | (33,265 | ) | |||
Years Ended January 31, | ||||||||||||
(in thousands, except per share amounts) | 2011 | 2010 | 2009 | |||||||||
Cost of repurchases | $ | 80,786 | $ | 467 | $ | 218,379 | ||||||
Shares repurchased and retired | 1,843 | 11 | 5,375 | |||||||||
Average cost per share | $ | 43.83 | $ | 41.72 | $ | 40.63 |
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Years Ended January 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Dividend yield | 1.2 | % | 1.0 | % | 0.7 | % | ||||||
Expected volatility | 37.9 | % | 38.4 | % | 38.3 | % | ||||||
Risk-free interest rate | 2.8 | % | 3.1 | % | 2.6 | % | ||||||
Expected term in years | 7 | 6 | 7 |
Weighted- | ||||||||||||||||
Average | ||||||||||||||||
Weighted- | Remaining | Aggregate | ||||||||||||||
Average | Contractual | Intrinsic | ||||||||||||||
Number of | Exercise | Term in | Value | |||||||||||||
Shares | Price | Years | (in thousands) | |||||||||||||
Outstanding at January 31, 2010 | 6,199,436 | $ | 34.09 | 5.01 | $ | 41,933 | ||||||||||
Granted | 316,880 | 56.48 | ||||||||||||||
Exercised | (1,988,621 | ) | 33.03 | |||||||||||||
Forfeited/cancelled | (13,725 | ) | 36.21 | |||||||||||||
Outstanding at January 31, 2011 | 4,513,970 | $ | 36.12 | 5.29 | $ | 99,360 | ||||||||||
Exercisable at January 31, 2011 | 3,515,970 | $ | 34.91 | 4.31 | $ | 81,658 | ||||||||||
Weighted-Average | ||||||||
Number of Shares | Grant-Date Fair Value | |||||||
Non-vested at January 31, 2010 | 1,005,071 | $ | 27.00 | |||||
Granted | 403,908 | 46.22 | ||||||
Vested | (389,258 | ) | 30.62 | |||||
Forfeited | (72,018 | ) | 32.70 | |||||
Non-vested at January 31, 2011 | 947,703 | $ | 33.27 | |||||
Weighted-Average | ||||||||
Number of Shares | Grant-Date Fair Value | |||||||
Non-vested at January 31, 2010 | 1,208,509 | $ | 34.97 | |||||
Granted | 216,800 | 55.05 | ||||||
Vested | (3,695 | ) | 36.23 | |||||
Forfeited/cancelled | (303,244 | ) | 40.15 | |||||
Non-vested at January 31, 2011 | 1,118,370 | $ | 37.46 | |||||
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January 31, | ||||||||||||||||
Other Postretirement | ||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||
(in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Change in benefit obligation: | ||||||||||||||||
Benefit obligation at beginning of year | $ | 382,264 | $ | 327,837 | $ | 42,331 | $ | 36,829 | ||||||||
Service cost | 12,741 | 11,444 | 1,711 | 1,259 | ||||||||||||
Interest cost | 23,860 | 22,810 | 2,943 | 2,641 | ||||||||||||
Participants’ contributions | — | — | 1,786 | 1,812 | ||||||||||||
MMA retiree drug subsidy | — | — | 116 | 159 | ||||||||||||
Actuarial loss | 30,788 | 39,290 | 3,988 | 3,021 | ||||||||||||
Benefits paid | (18,148 | ) | (19,113 | ) | (3,424 | ) | (3,390 | ) | ||||||||
Translation | 1,211 | (4 | ) | — | — | |||||||||||
Benefit obligation at end of year | 432,716 | 382,264 | 49,451 | 42,331 | ||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets at beginning of year | 201,564 | 160,314 | — | — | ||||||||||||
Actual return on plan assets | 37,921 | 30,505 | — | — | ||||||||||||
Employer contribution | 41,471 | 29,858 | 1,522 | 1,419 | ||||||||||||
Participants’ contributions | — | — | 1,786 | 1,812 | ||||||||||||
MMA retiree drug subsidy | — | — | 116 | 159 | ||||||||||||
Benefits paid | (18,148 | ) | (19,113 | ) | (3,424 | ) | (3,390 | ) | ||||||||
Fair value of plan assets at end of year | 262,808 | 201,564 | — | — | ||||||||||||
Funded status at end of year | $ | (169,908 | ) | $ | (180,700 | ) | $ | (49,451 | ) | $ | (42,331 | ) | ||||
January 31, 2011 | ||||||||||||||||
(in thousands) | Qualified | Excess/SRIP | Japan | Total | ||||||||||||
Projected benefit obligation | $ | 348,724 | $ | 69,560 | $ | 14,432 | $ | 432,716 | ||||||||
Fair value of plan assets | 262,808 | — | — | 262,808 | ||||||||||||
Funded status | $ | (85,916 | ) | $ | (69,560 | ) | $ | (14,432 | ) | $ | (169,908 | ) | ||||
Accumulated benefit obligation | $ | 312,966 | $ | 40,215 | $ | 11,756 | $ | 364,937 | ||||||||
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January 31, 2010 | ||||||||||||||||
(in thousands) | Qualified | Excess/SRIP | Japan | Total | ||||||||||||
Projected benefit obligation | $ | 316,080 | $ | 54,012 | $ | 12,172 | $ | 382,264 | ||||||||
Fair value of plan assets | 201,564 | — | — | 201,564 | ||||||||||||
Funded status | $ | (114,516 | ) | $ | (54,012 | ) | $ | (12,172 | ) | $ | (180,700 | ) | ||||
Accumulated benefit obligation | $ | 282,579 | $ | 30,905 | $ | 8,859 | $ | 322,343 | ||||||||
January 31, | ||||||||||||||||
Other Postretirement | ||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||
(in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Net actuarial loss (gain) | $ | 86,934 | $ | 79,137 | $ | 3,360 | $ | (627 | ) | |||||||
Prior service cost (credit) | 3,712 | 4,790 | (6,375 | ) | (7,034 | ) | ||||||||||
Deferred income tax (benefit) expense | (35,484 | ) | (33,385 | ) | 783 | 2,390 | ||||||||||
$ | 55,162 | $ | 50,542 | $ | (2,232 | ) | $ | (5,271 | ) | |||||||
Other Postretirement | ||||||||
(in thousands) | Pension Benefits | Benefits | ||||||
Net actuarial loss | $ | 5,291 | $ | 12 | ||||
Prior service cost (credit) | 1,065 | (659 | ) | |||||
$ | 6,356 | $ | (647 | ) | ||||
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Years Ended January 31, | ||||||||||||||||||||||||
Other Postretirement | ||||||||||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||||||||||
(in thousands) | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 | ||||||||||||||||||
Net Periodic Benefit Cost: | ||||||||||||||||||||||||
Service cost | $ | 12,741 | $ | 11,444 | $ | 16,712 | $ | 1,711 | $ | 1,259 | $ | 1,663 | ||||||||||||
Interest cost | 23,860 | 22,810 | 17,516 | 2,943 | 2,641 | 1,811 | ||||||||||||||||||
Expected return on plan assets | (17,568 | ) | (14,591 | ) | (15,660 | ) | — | — | — | |||||||||||||||
Amortization of prior service cost | 1,078 | 1,077 | 1,282 | (659 | ) | (659 | ) | (790 | ) | |||||||||||||||
Amortization of net loss (gain) | 2,886 | (84 | ) | 645 | 1 | — | — | |||||||||||||||||
Settlement loss | — | 191 | — | — | — | — | ||||||||||||||||||
Curtailment loss (gain) | — | — | 638 | — | — | (1,511 | ) | |||||||||||||||||
Special termination benefits | — | — | 56,811 | — | — | 6,992 | ||||||||||||||||||
Net expense | $ | 22,997 | $ | 20,847 | $ | 77,944 | $ | 3,996 | $ | 3,241 | $ | 8,165 | ||||||||||||
Year Ended January 31, 2011 | ||||||||
Other | ||||||||
Postretirement | ||||||||
(in thousands) | Pension Benefits | Benefits | ||||||
Net expense | $ | 22,997 | $ | 3,996 | ||||
Net actuarial loss | $ | 10,583 | $ | 3,988 | ||||
Recognized actuarial loss | (2,886 | ) | (1 | ) | ||||
Recognized prior service (cost) credit | (1,078 | ) | 659 | |||||
Translation | 100 | — | ||||||
Total recognized in other comprehensive earnings | $ | 6,719 | $ | 4,646 | ||||
Total recognized in net periodic benefit cost and other comprehensive earnings | $ | 29,716 | $ | 8,642 | ||||
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Year Ended January 31, 2010 | ||||||||
Other | ||||||||
Postretirement | ||||||||
(in thousands) | Pension Benefits | Benefits | ||||||
Net expense | $ | 20,847 | $ | 3,241 | ||||
Net actuarial loss | $ | 23,044 | $ | 3,019 | ||||
Recognized actuarial gain | 84 | — | ||||||
Recognized prior service (cost) credit | (1,077 | ) | 659 | |||||
Translation | (4 | ) | — | |||||
Total recognized in other comprehensive earnings | $ | 22,047 | $ | 3,678 | ||||
Total recognized in net periodic benefit cost and other comprehensive earnings | $ | 42,894 | $ | 6,919 | ||||
January 31, | ||||||||
2011 | 2010 | |||||||
Discount rate: | ||||||||
Qualified Plan | 6.00 | % | 6.50 | % | ||||
Excess Plan/SRIP | 6.00 | % | 6.75 | % | ||||
Japan Plan | 1.75 | % | 3.00 | % | ||||
Other Postretirement Benefits | 6.25 | % | 6.75 | % | ||||
Rate of increase in compensation: | ||||||||
Qualified Plan | 3.50 | % | 3.75 | % | ||||
Excess Plan | 5.00 | % | 5.25 | % | ||||
SRIP | 8.00 | % | 8.25 | % | ||||
Japan Plan | 1.25 | % | 2.50 | % |
Years Ended January 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Discount rate: | ||||||||||||
Qualified Plan | 6.50 | % | 7.25 | % | 6.50 | % | ||||||
Excess Plan/SRIP | 6.75 | % | 7.50 | % | 6.50 | % | ||||||
Japan Plan | 3.00 | % | 2.75 | % | 2.75 | % | ||||||
Other Postretirement Benefits | 6.75 | % | 7.25 | % | 6.50 | % | ||||||
Expected return on plan assets | 7.50 | % | 7.50 | % | 7.50 | % | ||||||
Rate of increase in compensation: | ||||||||||||
Qualified Plan | 3.75 | % | 4.00 | % | 4.00 | % | ||||||
Excess Plan | 5.25 | % | 5.50 | % | 5.50 | % | ||||||
SRIP | 8.25 | % | 8.50 | % | 8.50 | % | ||||||
Japan Plan | 2.50 | % | 2.25 | % | 2.25 | % |
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Fair Value | ||||||||||||||||
at | Fair Value Measurements | |||||||||||||||
January 31, | Using Inputs Considered as* | |||||||||||||||
(in thousands) | 2011 | Level 1 | Level 2 | Level 3 | ||||||||||||
Equity securities: | ||||||||||||||||
Common/collective trustsa | $ | 194,708 | $ | — | $ | 194,708 | $ | — | ||||||||
Fixed income securities: | ||||||||||||||||
Government bonds | 24,045 | 18,334 | 5,711 | — | ||||||||||||
Corporate bonds | 22,996 | — | 22,996 | — | ||||||||||||
Mortgage obligations | 7,932 | — | 7,932 | — | ||||||||||||
Other types of investments: | ||||||||||||||||
Limited partnerships | 13,059 | — | — | 13,059 | ||||||||||||
Multi-strategy hedge fund | 68 | — | — | 68 | ||||||||||||
$ | 262,808 | $ | 18,334 | $ | 231,347 | $ | 13,127 | |||||||||
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Fair Value | ||||||||||||||||
at | Fair Value Measurements | |||||||||||||||
January 31, | Using Inputs Considered as* | |||||||||||||||
(in thousands) | 2010 | Level 1 | Level 2 | Level 3 | ||||||||||||
Equity securities: | ||||||||||||||||
Common/collective trustsa | $ | 135,425 | $ | — | $ | 135,425 | $ | — | ||||||||
Fixed income securities: | ||||||||||||||||
Government bonds | 27,491 | 18,627 | 8,864 | — | ||||||||||||
Corporate bonds | 24,320 | — | 24,320 | — | ||||||||||||
Mortgage obligations | 2,045 | — | 2,045 | — | ||||||||||||
Other types of investments: | ||||||||||||||||
Limited partnerships | 11,692 | — | — | 11,692 | ||||||||||||
Multi-strategy hedge fund | 591 | — | — | 591 | ||||||||||||
$ | 201,564 | $ | 18,627 | $ | 170,654 | $ | 12,283 | |||||||||
* | See Note K — Fair Value of Financial Instruments for a description of the levels of inputs. | |
a | Common/collective trusts include investments in U.S. and international large, middle and small capitalization equities. |
Limited | Multi-strategy | |||||||
(in thousands) | partnerships | hedge fund | ||||||
Beginning balance at February 1, 2009 | $ | 15,774 | $ | 1,613 | ||||
Unrealized (loss) gain, net | (4,716 | ) | 126 | |||||
Realized loss, net | (85 | ) | (379 | ) | ||||
Purchases, sales and settlements, net | 719 | (769 | ) | |||||
Ending balance at January 31, 2010 | 11,692 | 591 | ||||||
Unrealized gain (loss), net | 1,234 | (94 | ) | |||||
Realized gain (loss), net | 33 | (197 | ) | |||||
Purchases, sales and settlements, net | 100 | (232 | ) | |||||
Ending balance at January 31, 2011 | $ | 13,059 | $ | 68 | ||||
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Other Postretirement | ||||||||
Pension Benefits | Benefits | |||||||
Years Ending January 31, | (in thousands) | (in thousands) | ||||||
2012 | $ | 18,647 | $ | 2,649 | ||||
2013 | 18,711 | 2,657 | ||||||
2014 | 18,705 | 2,582 | ||||||
2015 | 19,110 | 2,589 | ||||||
2016 | 19,771 | 2,541 | ||||||
2017–2021 | 120,847 | 12,700 |
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Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
United States | $ | 352,126 | $ | 226,347 | $ | 228,303 | ||||||
Foreign | 195,308 | 163,627 | 137,456 | |||||||||
$ | 547,434 | $ | 389,974 | $ | 365,759 | |||||||
Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Current: | ||||||||||||
Federal | $ | 149,815 | $ | 73,948 | $ | 58,432 | ||||||
State | 36,580 | 25,927 | 15,650 | |||||||||
Foreign | 52,968 | 39,262 | 44,896 | |||||||||
239,363 | 139,137 | 118,978 | ||||||||||
Deferred: | ||||||||||||
Federal | (52,452 | ) | (17,711 | ) | 10,679 | |||||||
State | (8,220 | ) | (8,931 | ) | 5,978 | |||||||
Foreign | 340 | 11,803 | (2,031 | ) | ||||||||
(60,332 | ) | (14,839 | ) | 14,626 | ||||||||
$ | 179,031 | $ | 124,298 | $ | 133,604 | |||||||
Years Ended January 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Statutory Federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income taxes, net of Federal benefit | 2.8 | 2.4 | 3.7 | |||||||||
Foreign losses with no tax benefit | 0.6 | 1.3 | 2.5 | |||||||||
Undistributed foreign earnings | (4.0 | ) | (3.4 | ) | (4.8 | ) | ||||||
Net change in uncertain tax positions | 0.3 | (1.7 | ) | 1.2 | ||||||||
Domestic manufacturing deduction | (1.2 | ) | (1.0 | ) | (0.9 | ) | ||||||
Other | (0.8 | ) | (0.7 | ) | (0.2 | ) | ||||||
32.7 | % | 31.9 | % | 36.5 | % | |||||||
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January 31, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Deferred tax assets: | ||||||||
Pension/postretirement benefits | $ | 85,302 | $ | 76,778 | ||||
Accrued expenses | 29,120 | 23,365 | ||||||
Share-based compensation | 25,093 | 27,934 | ||||||
Depreciation | 27,775 | 20,354 | ||||||
Foreign and state net operating losses | 23,438 | 28,863 | ||||||
Sale-leaseback | 80,829 | 81,951 | ||||||
Inventory | 3,824 | — | ||||||
Other | 39,407 | 31,524 | ||||||
314,788 | 290,769 | |||||||
Valuation allowance | (22,579 | ) | (24,433 | ) | ||||
292,209 | 266,336 | |||||||
Deferred tax liabilities: | ||||||||
Inventory | — | (27,131 | ) | |||||
Foreign tax credit | (45,704 | ) | (50,233 | ) | ||||
Other | (2,628 | ) | — | |||||
(48,332 | ) | (77,364 | ) | |||||
Net deferred tax asset | $ | 243,877 | $ | 188,972 | ||||
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January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Unrecognized tax benefits at beginning of year | $ | 32,226 | $ | 48,016 | $ | 30,306 | ||||||
Gross increases — tax positions in prior period | 2,367 | 5,256 | 10,161 | |||||||||
Gross decreases — tax positions in prior period | (2,003 | ) | (12,478 | ) | (1,125 | ) | ||||||
Gross increases — current period tax positions | 3,241 | 6,441 | 8,888 | |||||||||
Settlements | (1,394 | ) | (3,518 | ) | (214 | ) | ||||||
Lapse of statute of limitations | (2,164 | ) | (11,491 | ) | — | |||||||
Unrecognized tax benefits at end of year | $ | 32,273 | $ | 32,226 | $ | 48,016 | ||||||
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Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Net sales: | ||||||||||||
Americas | $ | 1,574,571 | $ | 1,410,845 | $ | 1,586,636 | ||||||
Asia-Pacific | 549,197 | 426,296 | 363,095 | |||||||||
Japan | 546,537 | 512,989 | 533,474 | |||||||||
Europe | 360,831 | 306,321 | 273,093 | |||||||||
Total reportable segments | 3,031,136 | 2,656,451 | 2,756,298 | |||||||||
Other | 54,154 | 53,253 | 92,561 | |||||||||
$ | 3,085,290 | $ | 2,709,704 | $ | 2,848,859 | |||||||
Earnings (losses) from continuing operations: * | ||||||||||||
Americas | $ | 340,331 | $ | 263,470 | $ | 317,964 | ||||||
Asia-Pacific | 133,448 | 100,690 | 88,724 | |||||||||
Japan | 162,800 | 139,519 | 141,802 | |||||||||
Europe | 88,309 | 60,102 | 52,021 | |||||||||
Total reportable segments | 724,888 | 563,781 | 600,511 | |||||||||
Other | 3,358 | (8,767 | ) | 4,938 | ||||||||
$ | 728,246 | $ | 555,014 | $ | 605,449 | |||||||
* | Represents earnings (losses) from continuing operations before unallocated corporate expenses, other operating income, other operating expense, restructuring charges and interest expense, financing costs and other income, net. |
Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Earnings from continuing operations for segments | $ | 728,246 | $ | 555,014 | $ | 605,449 | ||||||
Unallocated corporate expenses | (115,830 | ) | (114,964 | ) | (101,889 | ) | ||||||
Restructuring charges | — | — | (97,839 | ) | ||||||||
Other operating income | — | 4,442 | — | |||||||||
Other operating expense | (17,635 | ) | (4,000 | ) | (11,062 | ) | ||||||
Interest expense, financing costs and other income, net | (47,347 | ) | (50,518 | ) | (28,900 | ) | ||||||
Earnings from continuing operations before income taxes | $ | 547,434 | $ | 389,974 | $ | 365,759 | ||||||
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Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Net sales: | ||||||||||||
United States | $ | 1,484,505 | $ | 1,338,216 | $ | 1,535,893 | ||||||
Japan | 546,537 | 512,989 | 533,474 | |||||||||
Other countries | 1,054,248 | 858,499 | 779,492 | |||||||||
$ | 3,085,290 | $ | 2,709,704 | $ | 2,848,859 | |||||||
Long-lived assets: | ||||||||||||
United States | $ | 529,763 | $ | 560,450 | $ | 626,140 | ||||||
Japan | 31,729 | 34,334 | 39,524 | |||||||||
Other countries | 135,486 | 121,558 | 106,587 | |||||||||
$ | 696,978 | $ | 716,342 | $ | 772,251 | |||||||
Years Ended January 31, | ||||||||||||
(in thousands) | 2011 | 2010 | 2009 | |||||||||
Net sales: | ||||||||||||
Statement, fine and solitaire jewelry | $ | 481,780 | $ | 385,250 | $ | 420,663 | ||||||
Engagement jewelry and wedding bands | 853,483 | 730,645 | 740,309 | |||||||||
Silver and gold jewelry | 982,759 | 912,057 | 851,080 | |||||||||
Designer jewelry | 489,618 | 427,139 | 477,296 | |||||||||
All other | 277,650 | 254,613 | 359,511 | |||||||||
$ | 3,085,290 | $ | 2,709,704 | $ | 2,848,859 | |||||||
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2010 Quarters Ended | ||||||||||||||||
(in thousands, except per share amounts) | April 30 a, b | July 31 b | October 31b | January 31 b | ||||||||||||
Net sales | $ | 633,586 | $ | 668,760 | $ | 681,729 | $ | 1,101,215 | ||||||||
Gross profit | 365,978 | 386,752 | 398,571 | 670,977 | ||||||||||||
Earnings from continuing operations | 105,417 | 113,606 | 97,578 | 278,180 | ||||||||||||
Net earnings from continuing operations | 64,425 | 67,675 | 55,079 | 181,224 | ||||||||||||
Net earnings | 64,425 | 67,675 | 55,079 | 181,224 | ||||||||||||
Net earnings from continuing operations per share: | ||||||||||||||||
Basic | $ | 0.51 | $ | 0.53 | $ | 0.44 | $ | 1.43 | ||||||||
Diluted | $ | 0.50 | $ | 0.53 | $ | 0.43 | $ | 1.41 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 0.51 | $ | 0.53 | $ | 0.44 | $ | 1.43 | ||||||||
Diluted | $ | 0.50 | $ | 0.53 | $ | 0.43 | $ | 1.41 | ||||||||
a | Includes a net income tax benefit of $3,096,000 primarily due to a change in the tax status of certain subsidiaries associated with the acquisition in 2009 of additional equity interests in diamond sourcing and polishing operations, which benefited net earnings from continuing operations per diluted share and net earnings per diluted share by $0.02 in the quarter. | |
b | Includes pre-tax charges of $860,000, $3,945,000, $6,421,000 and $6,409,000, for the quarters ended April 30, July 31, October 31 and January 31, which reduced net earnings from continuing operations per diluted share and net earnings per diluted share by less than $0.01, $0.02, $0.03 and $0.03 in the respective quarters, associated with Tiffany’s plan to consolidate its New York headquarters staff within a single location (see “Note L. Commitments and Contingencies”). |
2009 Quarters Ended | ||||||||||||||||
(in thousands, except per share amounts) | April 30 | July 31a | October 31b | January 31 | ||||||||||||
Net sales | $ | 517,615 | $ | 612,493 | $ | 598,212 | $ | 981,384 | ||||||||
Gross profit | 289,219 | 337,452 | 327,803 | 575,745 | ||||||||||||
Earnings from continuing operations | 59,514 | 89,554 | 66,817 | 224,607 | ||||||||||||
Net earnings from continuing operations | 27,443 | 56,717 | 43,309 | 138,207 | ||||||||||||
Net earnings | 24,341 | 56,776 | 43,339 | 140,367 | ||||||||||||
Net earnings from continuing operations per share: | ||||||||||||||||
Basic | $ | 0.22 | $ | 0.46 | $ | 0.35 | $ | 1.10 | ||||||||
Diluted | $ | 0.22 | $ | 0.46 | $ | 0.34 | $ | 1.09 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 0.20 | $ | 0.46 | $ | 0.35 | $ | 1.12 | ||||||||
Diluted | $ | 0.20 | $ | 0.46 | $ | 0.35 | $ | 1.10 | ||||||||
a | Includes (i) $5,662,000 tax benefit associated with favorable reserve adjustments relating to the settlement of certain tax audits and (ii) $4,442,000 pre-tax income in connection with the assignment of the Tahera commitments and liens to an unrelated third party (see “Note L. Commitments and Contingencies”), which in total benefited net earnings from continuing operations and net earnings by $0.07 per diluted share in the quarter. | |
b | Includes (i) $5,558,000 tax benefit associated with favorable reserve adjustments relating to the expiration of statutory periods and (ii) $4,000,000 pre-tax expense related to the termination of a third-party management agreement (see “Note C. Acquisitions and Dispositions”), which in total benefited net earnings from continuing operations and net earnings by $0.01 per diluted share in the quarter. |
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
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/s/ Michael J. Kowalski | |
Chairman of the Board and Chief Executive Officer | |
/s/ James N. Fernandez | |
Executive Vice President and Chief Financial Officer |
Item 9B. | Other Information. |
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Item 10. | Directors, Executive Officers and Corporate Governance. |
Item 11. | Executive Compensation. |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Item 14. | Principal Accounting Fees and Services. |
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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 filed with Registrant’s Report on Form 10-Q for the Fiscal Quarter ended July 31, 1999. | |||
3.1 | a | 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 July 19, 2007. Incorporated by reference from Exhibit 3.2 to Registrant’s Report on Form 8-K dated July 20, 2007. |
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Exhibit | Description | |||
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. | |||
10.122 | a | 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. | ||
10.122 | b | Guarantee by Tiffany & Co. of the obligations under the Agreement referred to in Exhibit 10.122 above dated April 30, 1996. Incorporated by reference from Exhibit 10.122b filed with Registrant’s Report on Form 8-K dated August 2, 2002. | ||
10.122 | c | 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. | ||
10.122 | d | 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. | ||
10.122 | e | Amendment No. 4 to Guarantee referred to in Exhibit 10.122b above, dated December 9, 2005. Incorporated by reference from Exhibit 10.122e filed with Registrant’s Report on Form 10-K for the Fiscal Year ended January 31, 2006. | ||
10.122 | f | Amendment No. 5 to Guarantee referred to in Exhibit 10.122b above, dated May 31, 2006. Incorporated by reference from Exhibit 10.122f filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2007. | ||
10.123 | Agreement made effective as of February 1, 1997 by and between Tiffany and Elsa Peretti. Incorporated by reference from Exhibit 10.123 filed with Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 1997. | |||
10.128 | Agreement and Memorandum of Agreement made the 1st day of February 2009 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 February 18, 2009. | |||
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. |
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Exhibit | Description | |||
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. | |||
10.145 | 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. | |||
10.145 | a | 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 31, 2009 by and among Registrant, Tiffany and Company, Tiffany & Co. International, Tiffany & Co. Japan Inc. and each other Subsidiary of Registrant that is a Borrower and is a signatory thereto and The Bank of New York Mellon, 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 August 4, 2009. | |||
10.147 | Guaranty Agreement dated as of July 31, 2009, 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 Mellon, as Administrative Agent. Incorporated by reference from Exhibit 10.147 filed with Registrant’s Report on Form 8-K dated August 4, 2009. | |||
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. | |||
10.155 | Form of Note Purchase and Private Shelf Agreement dated as of December 23, 2008 by and between Registrant and various institutional note purchasers with respect to Registrant’s $100 million principal amount 9.05% Series A Senior Notes due December 23, 2015 and up to $50 Million Private Shelf Facility. Incorporated by reference from Exhibit 10.155 filed with Registrant’s Report on Form 8-K dated February 13, 2009. | |||
10.156 | Guaranty Agreement dated December 23, 2008 with respect to the Note Purchase Agreements (see Exhibit 10.155 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 10.156 filed with Registrant’s Report on Form 8-K dated February 13, 2009. |
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Exhibit | Description | |||
10.157 | Form of Note Purchase Agreement dated as of February 12, 2009 by and between Registrant and certain subsidiaries of Berkshire Hathaway Inc. with respect to Registrant’s $125 million principal amount 10% Series A-2009 Senior Notes due February 13, 2017 and $125 million principal amount 10% Series B-2009 Senior Notes due February 13, 2019. Incorporated by reference from Exhibit 10.157 filed with Registrant’s Report on Form 8-K dated February 13, 2009. | |||
10.158 | Guaranty Agreement dated February 12, 2009 with respect to the Note Purchase Agreements (see Exhibit 10.157 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 10.158 filed with Registrant’s Report on Form 8-K dated February 13, 2009. | |||
10.159 | Form of Note Purchase and Private Shelf Agreement dated as of April 9, 2009 by and between Registrant and various institutional note purchasers with respect to the Registrant’s $50 million principal amount 10% Series A Senior Notes due April 9, 2018 and up to $100 million Private Shelf Facility. Incorporated by reference from Exhibit 10.159 filed with Registrant’s Report on Form 8-K dated April 13, 2009. | |||
10.159 | a | Acknowledgement of Amendment to Note Purchase and Private Shelf Agreement referred to in previously filed Exhibit 10.159, dated as of September 30, 2010. Incorporated by reference from Exhibit 10.159a filed with Registrant’s Report on Form 10-Q for the Fiscal Quarter ended October 31, 2010. | ||
10.160 | Guaranty Agreement dated April 9, 2009 with respect to the Note Purchase and Private Shelf Agreement (see Exhibit 10.159 above) by Tiffany and Company, Tiffany & Co. International and Tiffany & Co. Japan Inc. Incorporated by reference from Exhibit 10.160 filed with Registrant’s Report on Form 8-K dated April 13, 2009. | |||
10.161 | Form of Note Purchase Agreement dated as of September 1, 2010 by and between Registrant and various institutional note purchasers with respect to the Registrant’s yen 10,000,000,000 principal amount 1.72% Senior Notes due September 1, 2016. Incorporated by reference from Exhibit 10.161 filed with Registrant’s Report on Form 10-Q for the Fiscal Quarter ended July 31, 2010. | |||
10.162 | Guaranty Agreement dated September 1, 2010 with respect to the Note Purchase Agreement (see Exhibit 10.161 above) by Tiffany and Company, Tiffany & Co. International and Tiffany & Co. Japan Inc. Incorporated by reference from Exhibit 10.162 filed with Registrant’s Report on Form 10-Q for the Fiscal Quarter ended July 31, 2010. | |||
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. |
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Exhibit | Description | |||
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. | |||
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. | |||
4.3 | a | Registrant’s 2008 Directors Equity Compensation Plan. Incorporated by reference from Exhibit 4.3a filed with Registrant’s Report on Form 8-K dated March 23, 2009. | ||
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 | a | 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 initially amended effective November 23, 2005 and as amended effective July 15, 2009 and May 20, 2010. Incorporated by reference from Exhibit 10.106 filed with Registrant’s Report on Form 10-Q for the Fiscal Quarter ended April 30, 2010. | |||
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. |
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Exhibit | Description | |||
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 January 31, 2009. Incorporated by reference from Exhibit 10.114 filed with Registrant’s Report on Form 8-K dated February 2, 2009. | |||
10.127 | c | Form of 2009 Retention Agreement between and among Registrant and Tiffany and Company (“Tiffany”) and those executive officers indicated within the form and Appendices I and II to such Agreement. Incorporated by reference from Exhibit 10.127c filed with Registrant’s Report on Form 8-K dated February 2, 2009. | ||
10.128 | Group Long Term Disability Insurance Policy issued by First Reliance Standard, Policy No. LTD 109406 on April 28, 2009. Incorporated by reference from Exhibit 10.128 filed with Registrant’s Report on Form 8-K dated March 25, 2010. | |||
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 Report on Form 8-K dated February 2, 2009. | |||
10.138 | 2004 Tiffany and Company Un-funded Retirement Income Plan to Recognize Compensation in Excess of Internal Revenue Code Limits, Amended and Restated as of January 12, 2009. Incorporated by reference from Exhibit 10.138 filed with Registrant’s Report on Form 8-K dated February 2, 2009. | |||
10.139 | d | Form of Fiscal 2011 Cash Incentive Award Agreement for certain executive officers adopted on March 16, 2011 under Registrant’s 2005 Employee Incentive Plan as Amended and Adopted as of May 18, 2006. Incorporated by reference from Exhibit 10.139d filed with Registrant’s Report on Form 8-K dated March 21, 2011. | ||
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. | |||
10.140 | a | 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. | ||
10.140 | b | Terms of 2009 Performance-Based Restricted Stock Unit Grants to Executive Officers under Registrant’s 2005 Employee Incentive Plan as adopted on January 28, 2009 for use with grants made that same date. Incorporated by reference from Exhibit 10.140b filed with Registrant’s Report on Form 8-K dated February 2, 2009. |
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Exhibit | Description | |||
10.140 | c | Terms of 2010 Performance-Based Restricted Stock Unit grants to Executive Officers under Registrant’s 2005 Employee Incentive Plan as adopted on January 20, 2010 for use with grants made that same date. Incorporated by reference from Exhibit 10.140c filed with Registrant’s Report on Form 8-K dated January 25, 2010. | ||
10.140 | d | Form of Notice of Grant as referenced in and attached to the Terms of 2010 Performance-Based Restricted Stock Unit grants to Executive Officers under Registrant’s 2005 Employee Incentive Plan as adopted on January 20, 2010 (Exhibit 10.140c) and completed on March 17, 2010 for use with the grants made on January 20, 2010. Incorporated by reference from Exhibit 10.140d filed with Registrant’s Report on Form 8-K dated March 25, 2010. | ||
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. | |||
10.143 | a | 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. | ||
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. | |||
10.144 | a | 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. | ||
10.144 | b | Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2005 Employee Incentive Plan as revised January 14, 2009 (form used for grants made to Executive Officers subsequent to that date). Incorporated by reference from Exhibit 10.144b filed with Registrant’s Report on Form 8-K dated February 2, 2009. | ||
10.150 | Form of Terms of Time-Vested Restricted Stock Unit Grants under Registrant’s 1998 Employee Incentive Plan and 2005 Employee Incentive Plan. Incorporated by reference as previously filed as Exhibit 10.146 with Registrant’s Report on Form 8-K dated May 23, 2005. | |||
10.150 | a | Terms of Time-Vested Restricted Stock Unit Grants under Registrant’s 2005 Employee Incentive Plan as revised January 14, 2009 (form used for grants made to employees other than Executive Officers subsequent to that date). Incorporated by reference from Exhibit 10.150a filed with Registrant’s Report on Form 8-K dated February 2, 2009. |
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Exhibit | Description | |||
10.151 | Registrant’s 2005 Employee Incentive Plan as adopted May 19, 2005. Incorporated by reference as previously filed as Exhibit 10.145 with Registrant’s Report on Form 8-K dated May 23, 2005. | |||
10.151 | a | Registrant’s 2005 Employee Incentive Plan Amended and Adopted as of May 18, 2006. Incorporated by reference from Exhibit 10.151a filed with Registrant’s Report on Form 8-K dated March 26, 2007. | ||
10.152 | Share Ownership Policy for Executive Officers and Directors, Amended and Restated as of March 15, 2007. Incorporated by reference from Exhibit 10.152 filed with Registrant’s Report on Form 8-K dated March 22, 2007. | |||
10.153 | Corporate Governance Principles, Amended and Restated as of March 17, 2010. Incorporated by reference from Exhibit 10.153 filed with Registrant’s Report on Form 8-K dated March 21, 2011. | |||
10.154 | Senior Executive Employment Agreement between Frederic Cumenal and Tiffany and Company, effective as of March 10, 2011. Incorporated by reference from Exhibit 10.154 filed with Registrant’s Report on Form 8-K dated March 21, 2011. | |||
10.161 | Terms of Time-Vested Restricted Stock Unit Grants to certain Executive Officers under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.161 filed with Registrant’s Report on Form 8-K dated March 21, 2011. |
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Date: March 28, 2011 | Tiffany & Co. (Registrant) | |||
By: | /s/ Michael J. Kowalski | |||
Michael J. Kowalski | ||||
Chief Executive Officer |
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By: | /s/ Michael J. Kowalski | By: | /s/ James N. Fernandez | |||||
Michael J. Kowalski Chairman of the Board and Chief Executive Officer (principal executive officer) (director) | James N. Fernandez Executive Vice President and Chief Financial Officer (principal financial officer) | |||||||
By: | /s/ Henry Iglesias | By: | /s/ Rose Marie Bravo | |||||
Henry Iglesias Vice President and Controller (principal accounting officer) | Rose Marie Bravo Director | |||||||
By: | /s/ Gary E. Costley | By: | /s/ Lawrence K. Fish | |||||
Gary E. Costley Director | Lawrence K. Fish Director | |||||||
By: | /s/ Abby F. Kohnstamm | By: | /s/ Charles K. Marquis | |||||
Abby F. Kohnstamm Director | Charles K. Marquis Director | |||||||
By: | /s/ Peter W. May | By: | /s/ J. Thomas Presby | |||||
Peter W. May Director | J. Thomas Presby Director | |||||||
By: | /s/ William A. Shutzer | |||||||
William A. Shutzer Director |
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Schedule II — Valuation and Qualifying Accounts and Reserves
(in thousands)
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Balance at | Charged to | Charged | Balance at | |||||||||||||||||
beginning of | costs and | to other | end of | |||||||||||||||||
Description | period | expenses | accounts | Deductions | period | |||||||||||||||
Year Ended January 31, 2011: | ||||||||||||||||||||
Reserves deducted from assets: | ||||||||||||||||||||
Accounts receivable allowances: | ||||||||||||||||||||
Doubtful accounts | $ | 6,286 | $ | 2,065 | $ | — | $ | 3,646 | a | $ | 4,705 | |||||||||
Sales returns | 6,606 | 2,075 | — | 1,603 | b | 7,078 | ||||||||||||||
Allowance for inventory liquidation and obsolescence | 46,234 | 25,608 | — | 23,414 | c | 48,428 | ||||||||||||||
Allowance for inventory shrinkage | 954 | 3,653 | — | 3,533 | d | 1,074 | ||||||||||||||
Deferred tax valuation allowance | 24,433 | 2,408 | — | 4,262 | e | 22,579 |
a) | Uncollectible accounts written off. | |
b) | Adjustment related to sales returns previously provided for. | |
c) | Liquidation of inventory previously written down to market. | |
d) | Physical inventory losses. | |
e) | Reversal of deferred tax valuation allowance and utilization of deferred tax loss carryforward. |
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Schedule II — Valuation and Qualifying Accounts and Reserves
(in thousands)
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Balance at | Charged to | Charged | Balance at | |||||||||||||||||
beginning of | costs and | to other | end of | |||||||||||||||||
Description | period | expenses | accounts | Deductions | period | |||||||||||||||
Year Ended January 31, 2010: | ||||||||||||||||||||
Reserves deducted from assets: | ||||||||||||||||||||
Accounts receivable allowances: | ||||||||||||||||||||
Doubtful accounts | $ | 4,694 | $ | 5,046 | $ | — | $ | 3,454 | a | $ | 6,286 | |||||||||
Sales returns | 5,240 | 2,034 | — | 668 | b | 6,606 | ||||||||||||||
Allowance for inventory liquidation and obsolescence | 43,956 | 31,599 | — | 29,321 | c | 46,234 | ||||||||||||||
Allowance for inventory shrinkage | 922 | 2,377 | — | 2,345 | d | 954 | ||||||||||||||
Deferred tax valuation allowance | 27,486 | 5,505 | — | 8,558 | e | 24,433 |
a) | Uncollectible accounts written off. | |
b) | Adjustment related to sales returns previously provided for. | |
c) | Liquidation of inventory previously written down to market. | |
d) | Physical inventory losses. | |
e) | Reversal of deferred tax valuation allowances and utilization of deferred tax loss carryforwards. |
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Schedule II — Valuation and Qualifying Accounts and Reserves
(in thousands)
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Balance at | Charged to | Charged | Balance at | |||||||||||||||||
beginning of | costs and | to other | end of | |||||||||||||||||
Description | period | expenses | accounts | Deductions | period | |||||||||||||||
Year Ended January 31, 2009: | ||||||||||||||||||||
Reserves deducted from assets: | ||||||||||||||||||||
Accounts receivable allowances: | ||||||||||||||||||||
Doubtful accounts | $ | 3,355 | $ | 5,963 | $ | — | $ | 4,624 | a | $ | 4,694 | |||||||||
Sales returns | 6,357 | 1,611 | — | 2,728 | b | 5,240 | ||||||||||||||
Allowance for inventory liquidation and obsolescence | 49,226 | 27,296 | — | 32,566 | c | 43,956 | ||||||||||||||
Allowance for inventory shrinkage | 684 | 3,210 | — | 2,972 | d | 922 | ||||||||||||||
Deferred tax valuation allowance | 20,726 | 6,760 | — | — | 27,486 |
a) | Uncollectible accounts written off. | |
b) | Adjustment related to sales returns previously provided for. | |
c) | Liquidation of inventory previously written down to market. | |
d) | Physical inventory losses. |
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