x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
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For the fiscal year ended January 31, 2017
OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-3228013
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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727 Fifth Avenue, New York, NY
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10022
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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K-
3
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Item 1A.
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K-
11
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Item 1B.
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K-
18
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Item 2.
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K-
18
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Item 3.
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K-
19
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Item 4.
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K-
21
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Item 5.
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K-
22
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Item 6.
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K-
25
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Item 7.
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K-
27
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Item 7A.
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K-
48
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Item 8.
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K-
49
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Item 9.
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K-
97
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Item 9A.
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K-
97
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Item 9B.
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K-
98
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Item 10.
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K-
99
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Item 11.
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K-
99
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Item 12.
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K-
99
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Item 13.
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K-
99
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Item 14.
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K-
99
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Item 15.
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K-
100
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Item 16.
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K-
100
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•
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Maintaining its position within the high-end of the jewelry market requires Tiffany to invest significantly in diamond and gemstone inventory, which carries a lower overall gross margin; it also causes some consumers to view Tiffany as beyond their price range;
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•
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To provide excellent service, stores must be well staffed with knowledgeable professionals;
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•
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Elegant stores in the best "high street" and luxury mall locations are more expensive and difficult to secure and maintain, but reinforce the Brand's luxury connotations through association with other luxury brands;
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•
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While the classic positioning of much of Tiffany's product line supports the Brand and requires sufficient display space in its stores, management's strategy also includes an active pace of new product introductions which could result in a necessary reallocation of product display space;
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•
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Tiffany's packaging supports consumer expectations with respect to the Brand but is expensive; and
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•
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A significant amount of advertising is required to both reinforce the Brand's association with luxury, sophistication, style and romance, as well as to market specific products.
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2016
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% of total
Americas
Sales
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% of total
Asia-Pacific
Sales
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% of total
Japan
Sales
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% of total
Europe
Sales
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% of total
Reportable
Segment Sales
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High, fine & solitaire jewelry
a
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21
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%
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22
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%
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14
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%
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15
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%
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20
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%
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Engagement jewelry & wedding bands
b
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22
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%
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35
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%
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39
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%
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26
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%
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28
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%
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Fashion jewelry
c
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34
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%
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35
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%
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19
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%
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46
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%
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33
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%
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Designer jewelry
d
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12
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%
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6
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%
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21
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%
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10
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%
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12
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%
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2015
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|
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|||||
High, fine & solitaire jewelry
a
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22
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%
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24
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%
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16
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%
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16
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%
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21
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%
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Engagement jewelry & wedding bands
b
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23
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%
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35
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%
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39
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%
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25
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%
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28
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%
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Fashion jewelry
c
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33
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%
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33
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%
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18
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%
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45
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%
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33
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%
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Designer jewelry
d
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12
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%
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7
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%
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20
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%
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10
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%
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11
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%
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2014
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|
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|||||
High, fine & solitaire jewelry
a
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21
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%
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23
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%
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17
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%
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16
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%
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21
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%
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Engagement jewelry & wedding bands
b
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23
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%
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37
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%
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41
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%
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24
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%
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29
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%
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Fashion jewelry
c
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33
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%
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31
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%
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14
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%
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47
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%
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32
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%
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Designer jewelry
d
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12
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%
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7
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%
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21
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%
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10
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%
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12
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%
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d)
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This category includes only items that are attributed to one of the Company’s "named" designers: Elsa Peretti (refer to "MATERIAL DESIGNER LICENSE" below) and Paloma Picasso. Merchandise primarily consists of sterling silver and gold jewelry, although platinum was used as the primary metal in approximately 15% of sales in
2016
. Some of the items sold contain diamonds, other gemstones or a combination of both. The average price of merchandise sold in
2016
,
2015
and
2014
in this category was approximately $530, $525 and $535 for total reportable segments.
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•
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the laws, regulations and policies of governments relating to investments, loans and operations, the costs or desirability of complying with local practices and customs and the impact of various anti-corruption and other laws affecting the activities of U.S. companies abroad;
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•
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uncertainties from changes in U.S. or foreign taxation policies, including, for example, as a result of recent proposals to reform the manner in which the earnings of U.S. multinational corporations are taxed by the U.S. government;
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•
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compliance by third party vendors and suppliers with the Company’s sourcing and quality standards, codes of conduct, or contractual requirements as well as applicable laws and regulations;
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•
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import and export licensing requirements and regulations, as well as unforeseen changes in regulatory requirements;
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•
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political or economic instability in foreign countries, including the potential for rapid and unexpected changes in government, economic and political policies (including diplomatic and trade relations with other countries), political or civil unrest, acts of terrorism or the threat of international boycotts or U.S. anti-boycott legislation – as a result of, for example, (1) the United Kingdom's referendum vote to exit the European Union, as discussed below, or (2) changes in government policies resulting from the recent change in the U.S. Presidential administration;
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•
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challenges inherent in oversight of foreign operations, systems and controls; for example, in the fourth quarter of 2015, management identified inaccuracies in the Japan segment relating to the timing of recognizing sales and related costs, as well as inventory, at period-ends. Management determined these inaccuracies did not materially affect the Company's annual or quarterly financial statements, including the reported financial information for the Japan segment. However, management has reviewed the processes and personnel involved and completed appropriate remediation activities;
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•
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potential negative consequences from foreign governments' currency management practices;
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•
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uncertainties as to enforcement of certain contract and other rights; and
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•
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inventory risk exposures.
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Total Stores
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Total Gross Retail Square Footage
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Gross Retail Square Footage Range
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Average Gross Retail Square Footage
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Americas:
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||||
New York Flagship
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1
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45,500
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45,500
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45,500
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Other stores
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124
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676,200
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1,000 - 17,600
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5,500
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Asia-Pacific
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85
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240,600
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400 - 12,800
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2,800
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Japan:
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||||
Tokyo Ginza
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1
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13,300
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13,300
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13,300
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Other stores
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54
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140,100
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1,600 - 7,500
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2,600
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Europe:
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||||
London Old Bond Street
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1
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22,400
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22,400
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22,400
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Other stores
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42
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135,300
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600 - 9,600
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3,200
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Emerging Markets
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5
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7,900
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400 - 3,600
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1,600
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Total
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313
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1,281,300
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400 - 45,500
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4,100
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High
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Low
|
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First Quarter
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$ 74.06
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$ 59.75
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Second Quarter
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$ 72.18
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$ 56.99
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Third Quarter
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$ 74.81
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$ 58.77
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Fourth Quarter
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$ 85.44
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$ 71.86
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High
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Low
|
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First Quarter
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$ 90.83
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$ 82.64
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Second Quarter
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$ 96.33
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$ 84.83
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Third Quarter
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$ 96.43
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$ 74.28
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Fourth Quarter
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$ 84.19
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$ 59.73
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1/31/12
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1/31/13
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1/31/14
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1/31/15
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1/31/16
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1/31/17
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Tiffany & Co.
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$ 100.00
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$ 105.24
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$ 135.48
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$ 143.26
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$ 107.59
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$ 136.00
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S&P 500 Stock Index
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100.00
|
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116.78
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141.91
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162.09
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|
161.01
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193.28
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S&P 500 Consumer Discretionary Index
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100.00
|
|
123.67
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|
157.51
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178.00
|
|
191.84
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223.45
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Period
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(a) Total Number of Shares (or Units) Purchased
|
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(b) Average Price Paid per Share (or Unit)
|
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(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
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(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
(in millions)
|
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November 1, 2016 to November 30, 2016
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39,480
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$ 73.10
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39,480
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$ 310.4
|
|
December 1, 2016 to December 31, 2016
|
—
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$ —
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—
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$ 310.4
|
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January 1, 2017 to January 31, 2017
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—
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$ —
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—
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$ 310.4
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TOTAL
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39,480
|
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$ 73.10
|
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39,480
|
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$ 310.4
|
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(in millions, except per share amounts, percentages, ratios, stores and employees)
|
2016
a
|
|
2015
b
|
|
2014
c
|
|
2013
d
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|
2012
|
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|||||
EARNINGS DATA
|
|
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|
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||||||||||
Net sales
|
$
|
4,001.8
|
|
$
|
4,104.9
|
|
$
|
4,249.9
|
|
$
|
4,031.1
|
|
$
|
3,794.2
|
|
Gross profit
|
2,490.3
|
|
2,491.3
|
|
2,537.2
|
|
2,340.4
|
|
2,163.3
|
|
|||||
Selling, general & administrative expenses
|
1,769.1
|
|
1,731.2
|
|
1,645.8
|
|
1,555.9
|
|
1,466.1
|
|
|||||
Net earnings
|
446.1
|
|
463.9
|
|
484.2
|
|
181.4
|
|
416.2
|
|
|||||
Net earnings per diluted share
|
3.55
|
|
3.59
|
|
3.73
|
|
1.41
|
|
3.25
|
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|||||
Weighted-average number of diluted common shares
|
125.5
|
|
129.1
|
|
129.9
|
|
128.9
|
|
127.9
|
|
|||||
BALANCE SHEET AND CASH FLOW DATA
|
|
|
|
|
|
||||||||||
Total assets *
|
$
|
5,097.6
|
|
$
|
5,121.6
|
|
$
|
5,171.8
|
|
$
|
4,745.1
|
|
$
|
4,628.9
|
|
Cash and cash equivalents
|
928.0
|
|
843.6
|
|
730.0
|
|
345.8
|
|
504.8
|
|
|||||
Inventories, net
|
2,157.6
|
|
2,225.0
|
|
2,362.1
|
|
2,326.6
|
|
2,234.3
|
|
|||||
Short-term borrowings and long-term debt (including current portion) *
|
1,107.1
|
|
1,095.8
|
|
1,107.8
|
|
996.3
|
|
957.4
|
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|||||
Stockholders' equity
|
3,028.4
|
|
2,929.5
|
|
2,850.7
|
|
2,734.0
|
|
2,611.3
|
|
|||||
Working capital
|
2,940.8
|
|
2,778.5
|
|
2,850.8
|
|
2,431.1
|
|
2,485.4
|
|
|||||
Cash flows from operating activities
|
702.1
|
|
813.6
|
|
615.1
|
|
154.7
|
|
328.3
|
|
|||||
Capital expenditures
|
222.8
|
|
252.7
|
|
247.4
|
|
221.4
|
|
219.5
|
|
|||||
Stockholders' equity per share
|
24.33
|
|
23.10
|
|
22.04
|
|
21.31
|
|
20.57
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|||||
Cash dividends paid per share
|
1.75
|
|
1.58
|
|
1.48
|
|
1.34
|
|
1.25
|
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|||||
RATIO ANALYSIS AND OTHER DATA
|
|
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||||||||||
As a percentage of net sales:
|
|
|
|
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|
||||||||||
Gross profit
|
62.2
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%
|
60.7
|
%
|
59.7
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%
|
58.1
|
%
|
57.0
|
%
|
|||||
Selling, general & administrative expenses
|
44.2
|
%
|
42.2
|
%
|
38.7
|
%
|
38.6
|
%
|
38.6
|
%
|
|||||
Earnings from operations
|
18.0
|
%
|
18.5
|
%
|
21.0
|
%
|
7.5
|
%
|
18.4
|
%
|
|||||
Net earnings
|
11.1
|
%
|
11.3
|
%
|
11.4
|
%
|
4.5
|
%
|
11.0
|
%
|
|||||
Capital expenditures
|
5.6
|
%
|
6.2
|
%
|
5.8
|
%
|
5.5
|
%
|
5.8
|
%
|
|||||
Return on average assets *
|
8.7
|
%
|
9.0
|
%
|
9.8
|
%
|
3.9
|
%
|
9.5
|
%
|
|||||
Return on average stockholders' equity
|
15.0
|
%
|
16.1
|
%
|
17.3
|
%
|
6.8
|
%
|
16.8
|
%
|
|||||
Total debt-to-equity ratio *
|
36.6
|
%
|
37.4
|
%
|
38.9
|
%
|
36.4
|
%
|
36.7
|
%
|
|||||
Dividends as a percentage of net earnings
|
49.0
|
%
|
43.8
|
%
|
39.5
|
%
|
93.9
|
%
|
38.1
|
%
|
|||||
Company-operated TIFFANY & CO. stores
|
313
|
|
307
|
|
295
|
|
289
|
|
275
|
|
|||||
Number of employees
|
11,900
|
|
12,200
|
|
12,000
|
|
10,600
|
|
9,900
|
|
*
|
The Company adopted ASU No. 2015-03 –
Simplifying the Presentation of Debt Issuance Costs
retrospectively as of February 1, 2016. Accordingly, debt issuance costs were reclassified from an asset to a direct deduction from long-term debt in each of the years presented. See "Item 8. Financial Statements and Supplementary Data - Note B. Summary of Significant Accounting Policies" for additional information.
|
a.
|
Financial information and ratios for 2016 include the following amounts, totaling $38.0 million of pre-tax expense ($24.0 million net after tax expense, or $0.19 per diluted share):
|
•
|
$25.4 million of net pre-tax expense ($16.0 million net after tax expense, or $0.13 per diluted share) associated with an asset impairment charge related to software costs capitalized in connection with the development of a new finished goods inventory management and merchandising information system. See "Item 8. Financial Statements and Supplementary Data - Note B. Summary of Significant Accounting Policies" and "Note E. Property, Plant and Equipment" for additional information; and
|
•
|
$12.6 million of net pre-tax expense ($8.0 million net after tax expense, or $0.06 per diluted share) associated with impairment charges related to financing arrangements with diamond mining and exploration companies. See "Item 8. Financial Statements and Supplementary Data - Note B. Summary of Significant Accounting Policies" for additional information.
|
b.
|
Financial information and ratios for 2015 include the following amounts, totaling $46.7 million of net pre-tax expense ($29.9 million net after tax expense, or $0.24 per diluted share):
|
•
|
$37.9 million of net pre-tax expense ($24.3 million net after tax expense, or $0.19 per diluted share) associated with impairment charges related to a financing arrangement with Koidu Limited. See "Item 8. Financial Statements and Supplementary Data - Note J. Commitments and Contingencies" for additional information; and
|
•
|
$8.8 million of net pre-tax expense ($5.6 million net after tax expense, or $0.05 per diluted share) associated with severance related to staffing reductions and subleasing of certain office space for which only a portion of the Company's future rent obligations will be recovered.
|
c.
|
Financial information and ratios for 2014 include $93.8 million of net pre-tax expense ($60.9 million net after tax expense, or $0.47 per diluted share) associated with the redemption of $400.0 million in aggregate principal amount of certain senior notes prior to their scheduled maturities. See "Item 8. Financial Statements and Supplementary Data - Note G. Debt" for additional information.
|
d.
|
Financial information and ratios for 2013 include the following amounts, totaling $482.1 million of net pre-tax expense ($299.2 million net after-tax expense, or $2.32 per diluted share):
|
•
|
$480.2 million pre-tax expense associated with the Swatch arbitration award and $7.5 million pre-tax income associated with a foreign currency transaction gain on this expense. See "Item 8. Financial Statements and Supplementary Data - Note J. Commitments and Contingencies" for additional information regarding the arbitration proceeding; and
|
•
|
$9.4 million pre-tax expense associated with severance related to staffing reductions and subleasing of certain office space for which only a portion of the Company's future rent obligations will be recovered.
|
•
|
To enhance the customer experience through engaging service and store environments.
|
•
|
To regularly develop and introduce new products.
|
•
|
To enhance customer awareness of the TIFFANY & CO. trademark (the "Brand"), its heritage, its products and its association with quality and luxury.
|
•
|
To expand and optimize its global distribution base.
|
•
|
To improve its business operations and processes, while efficiently managing its capital and costs
|
•
|
To maintain substantial control over product supply through direct diamond sourcing and internal jewelry manufacturing.
|
•
|
To achieve improved operating margins, through both improved gross margin and efficient expense management.
|
•
|
To increase store productivity and profitability.
|
•
|
To improve inventory and other asset productivity and cash flow.
|
•
|
To maintain a capital structure that provides financial strength and the ability to invest in strategic initiatives, while also allowing for the return of excess capital to shareholders.
|
•
|
Worldwide net sales decreased
3%
to
$4.0 billion
reflecting declines in the Americas and Europe partly offset by an increase in Japan and unchanged sales in Asia-Pacific, and comparable store sales decreased
5%
due to declines in all regions except Japan. On a constant-exchange-rate basis (see "Non-GAAP Measures"), worldwide net sales decreased
3%
and comparable store sales decreased
5%
reflecting similar trends.
|
•
|
The Company added a net of 6 TIFFANY & CO. stores (opening seven in Asia-Pacific, three in Europe and one in the Americas, while closing three in Asia-Pacific and one each in Japan and Europe and relocating 5 stores) resulting in a 3% net increase in gross retail square footage.
|
•
|
The Company expanded its offerings within several existing jewelry collections, including its TIFFANY T and RETURN TO TIFFANY
®
LOVE collections, and introduced new watch designs.
|
•
|
Earnings from operations as a percentage of net sales ("operating margin") decreased 0.5 percentage point. Excluding impairment charges recorded in 2016 and 2015 (see "Non-GAAP Measures"), operating margin decreased 0.7 percentage point. An improvement in gross margin was more than offset by a lack of sales leverage on selling, general and administrative ("SG&A") expenses.
|
•
|
Net earnings decreased 4% to
$446.1 million
, or
$3.55
per diluted share. Net earnings in 2016 included impairment charges of $0.19 per diluted share (see "Non-GAAP Measures") and an income tax benefit of $0.05 per diluted share (as a result of the conclusion of a tax examination). Net earnings in 2015 included charges of $0.24 per diluted share (see "Non-GAAP Measures"). Excluding these charges, net earnings per diluted share declined 2% to $3.75.
|
•
|
Inventories, net decreased
3%
.
|
•
|
Cash flow from operating activities of
$702.1 million
in
2016
, compared with
$813.6 million
in
2015
. Free cash flow (see "Non-GAAP Measures") of
$479.3 million
in
2016
, compared with
$560.9 million
in
2015
. Cash flow from operating activities and free cash flow in 2016 include a voluntary cash contribution of
|
•
|
The Company returned cash to shareholders by continuing to pay regular quarterly dividends (which were increased 12.5% effective July 2016 to $0.45 per share, or an annualized rate of $1.80 per share) and spending $183.6 million to repurchase 2.8 million shares of its Common Stock.
|
|
2016
|
|
2015
|
||||||||||||||
|
GAAP
Reported
|
|
|
Translation
Effect
|
|
|
Constant-
Exchange-
Rate Basis
|
|
|
GAAP
Reported
|
|
|
Translation
Effect
|
|
|
Constant-
Exchange-
Rate Basis
|
|
Net Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Worldwide
|
(3
|
)%
|
|
—
|
%
|
|
(3
|
)%
|
|
(3
|
)%
|
|
(5
|
)%
|
|
2
|
%
|
Americas
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
(2
|
)
|
Asia-Pacific
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
(5
|
)
|
|
3
|
|
Japan
|
12
|
|
|
12
|
|
|
—
|
|
|
(2
|
)
|
|
(12
|
)
|
|
10
|
|
Europe
|
(10
|
)
|
|
(7
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(13
|
)
|
|
12
|
|
Other
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Comparable Store Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Worldwide
|
(5
|
)%
|
|
—
|
%
|
|
(5
|
)%
|
|
(6
|
)%
|
|
(6
|
)%
|
|
—
|
%
|
Americas
|
(6
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|
(4
|
)
|
Asia-Pacific
|
(9
|
)
|
|
(2
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
Japan
|
16
|
|
|
11
|
|
|
5
|
|
|
(7
|
)
|
|
(12
|
)
|
|
5
|
|
Europe
|
(14
|
)
|
|
(5
|
)
|
|
(9
|
)
|
|
(5
|
)
|
|
(14
|
)
|
|
9
|
|
Other
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
(in millions, except per share amounts)
|
GAAP
|
|
Impairment charges
a
|
|
Non-GAAP
|
||||||
Year Ended January 31, 2017
|
|
|
|
|
|
||||||
SG&A expenses
|
$
|
1,769.1
|
|
|
$
|
(38.0
|
)
|
|
$
|
1,731.1
|
|
As a % of sales
|
44.2
|
%
|
|
|
|
43.3
|
%
|
||||
Earnings from operations
|
721.2
|
|
|
38.0
|
|
|
759.2
|
|
|||
As a % of sales
|
18.0
|
%
|
|
|
|
19.0
|
%
|
||||
Provision for income taxes
b
|
230.5
|
|
|
14.0
|
|
|
244.5
|
|
|||
Net earnings
|
446.1
|
|
|
24.0
|
|
|
470.1
|
|
|||
Diluted earnings per share*
|
3.55
|
|
|
0.19
|
|
|
3.75
|
|
a
|
Expenses associated with the following:
|
•
|
$25.4 million of net pre-tax expense ($16.0 million net after tax expense, or $0.13 per diluted share) associated with an asset impairment charge related to software costs capitalized in connection with the development of a new finished goods inventory management and merchandising information system (see "Information Systems Assessment"); and
|
•
|
$12.6 million of net pre-tax expense ($8.0 million net after tax expense, or $0.06 per diluted share) associated with impairment charges related to financing arrangements with diamond mining and exploration companies (see "Financing Arrangements with Diamond Mining and Exploration Companies").
|
b
|
The income tax effect resulting from the adjustments has been calculated as both current and deferred tax benefit (expense), based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying adjustment.
|
(in millions, except per share amounts)
|
GAAP
|
|
Impairment charges
c
|
|
Specific cost-reduction initiatives
d
|
|
Non-GAAP
|
||||||||
Year Ended January 31, 2016
|
|
|
|
|
|
|
|
||||||||
SG&A expenses
|
$
|
1,731.2
|
|
|
$
|
(37.9
|
)
|
|
$
|
(8.8
|
)
|
|
$
|
1,684.5
|
|
As a % of net sales
|
42.2
|
%
|
|
|
|
|
|
41.0
|
%
|
||||||
Earnings from operations
|
760.1
|
|
|
37.9
|
|
|
8.8
|
|
|
806.8
|
|
||||
As a % of net sales
|
18.5
|
%
|
|
|
|
|
|
19.7
|
%
|
||||||
Provision for income taxes
b
|
246.0
|
|
|
13.6
|
|
|
3.2
|
|
|
262.8
|
|
||||
Net earnings
|
463.9
|
|
|
24.3
|
|
|
5.6
|
|
|
493.8
|
|
||||
Diluted earnings per share
|
3.59
|
|
|
0.19
|
|
|
0.05
|
|
|
3.83
|
|
c
|
Expenses associated with impairment charges related to a financing arrangement with Koidu Limited (see "Financing Arrangements with Diamond Mining and Exploration Companies").
|
d
|
Expenses associated with specific cost-reduction initiatives which included severance related to staffing reductions and subleasing of certain office space for which only a portion of the Company's future rent obligations will be recovered.
|
(in millions, except per share amounts)
|
GAAP
|
|
Debt extinguishment
e
|
|
Non-GAAP
|
||||||
Year Ended January 31, 2015
|
|
|
|
|
|
||||||
Loss on extinguishment of debt
|
$
|
93.8
|
|
|
$
|
(93.8
|
)
|
|
$
|
—
|
|
Provision for income taxes
b
|
253.4
|
|
|
32.8
|
|
|
286.2
|
|
|||
Net earnings
|
484.2
|
|
|
60.9
|
|
|
545.1
|
|
|||
Diluted earnings per share
|
3.73
|
|
|
0.47
|
|
|
4.20
|
|
e
|
Expenses associated with the redemption of $400.0 million in aggregate principal amount of certain senior notes prior to their scheduled maturities (see "Loss on Extinguishment of Debt").
|
|
Years Ended January 31,
|
|
||||
(
in millions)
|
2017
|
|
2016
|
|
||
Net cash provided by operating activities
|
$
|
702.1
|
|
$
|
813.6
|
|
Less: Capital expenditures
|
(222.8
|
)
|
(252.7
|
)
|
||
Free cash flow
a
|
$
|
479.3
|
|
$
|
560.9
|
|
a
|
Free cash flow in 2016 reflects a voluntary cash contribution of $120.0 million made by the Company to its U.S. pension plan (See "Item 8. Financial Statements and Supplementary Data - Note N. Employee Benefit Plans").
|
(in millions)
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2016 vs 2015 % Change
|
|
|
2015 vs 2014 % Change
|
|
|||
Americas
a
|
$
|
1,841.9
|
|
|
$
|
1,947.0
|
|
|
$
|
2,033.5
|
|
|
(5
|
)%
|
|
(4
|
)%
|
Asia-Pacific
b
|
999.1
|
|
|
1,003.1
|
|
|
1,025.2
|
|
|
—
|
|
|
(2
|
)
|
|||
Japan
c
|
604.4
|
|
|
541.3
|
|
|
554.3
|
|
|
12
|
|
|
(2
|
)
|
|||
Europe
d
|
457.6
|
|
|
505.7
|
|
|
513.3
|
|
|
(10
|
)
|
|
(1
|
)
|
|||
Other
|
98.8
|
|
|
107.8
|
|
|
123.6
|
|
|
(8
|
)
|
|
(13
|
)
|
|||
|
$
|
4,001.8
|
|
|
$
|
4,104.9
|
|
|
$
|
4,249.9
|
|
|
(3
|
)%
|
|
(3
|
)%
|
a)
|
Represented
46%
of worldwide net sales in
2016
, 47% in
2015
and 48% in
2014
, while sales in the U.S. represented 88% of net sales in the Americas in those periods. Total sales in the Company's New York Flagship store represented less than 10% of worldwide net sales in 2016, 2015 and 2014.
|
b)
|
Represented
25%
of worldwide net sales in
2016
and 24% in
2015
and
2014
, while sales in Greater China represented more than half of Asia-Pacific's net sales in those periods.
|
c)
|
Represented
15%
of worldwide net sales in
2016
and 13% in
2015
and
2014
.
|
d)
|
Represented
11%
of worldwide net sales in
2016
and 12% in
2015
and
2014
, while sales in the United Kingdom ("U.K.") represented approximately 40% of European net sales in those periods.
|
(in millions)
|
$ Change
|
|
|
% Change
|
|
|
High, fine & solitaire jewelry
|
$
|
(75.0
|
)
|
|
(9
|
)%
|
Engagement jewelry & wedding bands
|
(20.2
|
)
|
|
(2
|
)
|
|
Fashion jewelry
|
(11.8
|
)
|
|
(1
|
)
|
|
Designer jewelry
|
4.2
|
|
|
1
|
|
(in millions)
|
Comparable Store Sales
|
|
|
Non-comparable Store Sales
|
|
|
Wholesale/Other
|
|
|
Total
|
|
||||
Americas
|
$
|
(96.1
|
)
|
|
$
|
2.3
|
|
|
$
|
(11.3
|
)
|
|
$
|
(105.1
|
)
|
Asia-Pacific
|
(80.1
|
)
|
|
59.8
|
|
|
16.3
|
|
|
(4.0
|
)
|
||||
Japan
|
78.8
|
|
|
(1.3
|
)
|
|
(14.4
|
)
|
|
63.1
|
|
||||
Europe
|
(59.7
|
)
|
|
13.1
|
|
|
(1.5
|
)
|
|
(48.1
|
)
|
(in millions)
|
$ Change
|
|
|
% Change
|
|
|
High, fine & solitaire jewelry
|
$
|
(16.3
|
)
|
|
(2
|
)%
|
Engagement jewelry & wedding bands
|
(78.8
|
)
|
|
(6
|
)
|
|
Fashion jewelry
|
(16.9
|
)
|
|
(1
|
)
|
|
Designer jewelry
|
(20.7
|
)
|
|
(4
|
)
|
(in millions)
|
Comparable Store Sales
|
|
|
Non-comparable Store Sales
|
|
|
Wholesale/Other
|
|
|
Total
|
|
||||
Americas
|
$
|
(103.5
|
)
|
|
$
|
12.9
|
|
|
$
|
4.1
|
|
|
$
|
(86.5
|
)
|
Asia-Pacific
|
(46.0
|
)
|
|
32.7
|
|
|
(8.8
|
)
|
|
(22.1
|
)
|
||||
Japan
|
(36.4
|
)
|
|
9.6
|
|
|
13.8
|
|
|
(13.0
|
)
|
||||
Europe
|
(24.0
|
)
|
|
11.7
|
|
|
4.7
|
|
|
(7.6
|
)
|
|
Average Price per Unit Sold
|
|
|
|||||
|
As Reported
|
|
|
Impact of Currency Translation
|
|
|
Number of
Units Sold |
|
Change in Jewelry Sales
|
|
|
|
|
|
|||
Americas
|
6
|
%
|
|
(2
|
)%
|
|
(11
|
)%
|
Asia-Pacific
|
4
|
%
|
|
(5
|
)%
|
|
(6
|
)%
|
Japan
|
(2
|
)%
|
|
(12
|
)%
|
|
—
|
%
|
Europe
|
—
|
%
|
|
(14
|
)%
|
|
(2
|
)%
|
(in millions)
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||
Gross profit
|
$
|
2,490.3
|
|
|
$
|
2,491.3
|
|
|
$
|
2,537.2
|
|
Gross profit as a percentage of net sales
|
62.2
|
%
|
|
60.7
|
%
|
|
59.7
|
%
|
(in millions)
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||
As reported:
|
|
|
|
|
|
||||||
SG&A expenses
|
$
|
1,769.1
|
|
|
$
|
1,731.2
|
|
|
$
|
1,645.8
|
|
SG&A expenses as a percentage of net sales
|
44.2
|
%
|
|
42.2
|
%
|
|
38.7
|
%
|
|||
Excluding items in "Non-GAAP Measures":
|
|
|
|
|
|
||||||
SG&A expenses
|
$
|
1,731.1
|
|
|
$
|
1,684.5
|
|
|
$
|
1,645.8
|
|
SG&A expenses as a percentage of net sales
|
43.3
|
%
|
|
41.0
|
%
|
|
38.7
|
%
|
(dollars in millions)
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||
As reported:
|
|
|
|
|
|
||||||
Earnings from operations
|
$
|
721.2
|
|
|
$
|
760.1
|
|
|
$
|
891.4
|
|
Operating margin
|
18.0
|
%
|
|
18.5
|
%
|
|
21.0
|
%
|
|||
Percentage point change from prior year
|
(0.5
|
)
|
|
(2.5
|
)
|
|
13.5
|
|
|||
Excluding other operating expenses:
|
|
|
|
|
|
||||||
Earnings from operations
|
$
|
759.2
|
|
|
$
|
806.8
|
|
|
$
|
891.4
|
|
Operating margin
|
19.0
|
%
|
|
19.7
|
%
|
|
21.0
|
%
|
|||
Percentage point change from prior year
|
(0.7
|
)
|
|
(1.3
|
)
|
|
1.3
|
|
*
|
Percentages represent earnings from operations as a percentage of each segment's net sales.
|
•
|
Americas – the ratio increased 0.2 percentage point due to an improvement in gross margin, largely offset by a lack of sales leverage on operating expenses resulting from a decrease in net sales;
|
•
|
Asia-Pacific – the ratio decreased 0.8 percentage point due to a lack of sales leverage on operating expenses, primarily attributable to new store-related expenses, partly offset by an improvement in gross margin;
|
•
|
Japan – the ratio decreased 3.0 percentage points primarily due to a decrease in gross margin that reflected an unfavorable impact tied to the strengthening of the Yen on the Company's program to utilize Yen forward contracts for a portion of its forecasted merchandise purchases; and
|
•
|
Europe – the ratio decreased 1.5 percentage points due to a decrease in net sales resulting in a lack of sales leverage on operating expenses, partly offset by an improvement in gross margin.
|
•
|
Americas – the ratio decreased 1.3 percentage points due to a decrease in net sales resulting in sales deleveraging of operating expenses, partly offset by an improvement in gross margin;
|
•
|
Asia-Pacific – the ratio decreased 1.1 percentage points due to increased store-related operating expenses and marketing spending, partly offset by an improvement in gross margin;
|
•
|
Japan – the ratio increased 1.5 percentage points due to leveraging of operating expenses (as operating expenses decreased at a higher rate than sales), partly offset by a decrease in gross margin attributable to currency translation; and
|
•
|
Europe – the ratio decreased 2.2 percentage points resulting from increased store-related operating expenses and marketing spending, partly offset by an improvement in gross margin.
|
(in millions)
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
702.1
|
|
|
$
|
813.6
|
|
|
$
|
615.1
|
|
Investing activities
|
(236.8
|
)
|
|
(278.2
|
)
|
|
(217.0
|
)
|
|||
Financing activities
|
(382.8
|
)
|
|
(422.3
|
)
|
|
(23.4
|
)
|
|||
Effect of exchange rates on cash and cash equivalents
|
1.9
|
|
|
0.5
|
|
|
9.5
|
|
|||
Net increase in cash and cash equivalents
|
$
|
84.4
|
|
|
$
|
113.6
|
|
|
$
|
384.2
|
|
(in millions)
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||
Short-term borrowings:
|
|
|
|
|
|
||||||
Proceeds from (repayments of) credit facility borrowings, net
|
$
|
14.2
|
|
|
$
|
(11.3
|
)
|
|
$
|
(12.5
|
)
|
Proceeds from other credit facility borrowings
|
76.8
|
|
|
24.8
|
|
|
19.8
|
|
|||
Repayments of other credit facility borrowings
|
(83.1
|
)
|
|
(16.0
|
)
|
|
(3.4
|
)
|
|||
Net proceeds from (repayments of) short-term borrowings
|
7.9
|
|
|
(2.5
|
)
|
|
3.9
|
|
|||
Long-term borrowings:
|
|
|
|
|
|
||||||
Proceeds from issuances
|
98.1
|
|
|
—
|
|
|
548.0
|
|
|||
Repayments
|
(97.1
|
)
|
|
—
|
|
|
(400.0
|
)
|
|||
Net proceeds from long-term borrowings
|
1.0
|
|
|
—
|
|
|
148.0
|
|
|||
Net proceeds from (repayments of) total borrowings
|
8.9
|
|
|
(2.5
|
)
|
|
151.9
|
|
|||
Payments of debt extinguishment costs (included in operating activities)
|
—
|
|
|
—
|
|
|
(93.4
|
)
|
|||
Net proceeds (repayments)
|
$
|
8.9
|
|
|
$
|
(2.5
|
)
|
|
$
|
58.5
|
|
(in millions, except per share amounts)
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||
Cost of repurchases
|
$
|
183.6
|
|
|
$
|
220.4
|
|
|
$
|
27.0
|
|
Shares repurchased and retired
|
2.8
|
|
|
2.8
|
|
|
0.3
|
|
|||
Average cost per share
|
$
|
65.24
|
|
|
$
|
78.40
|
|
|
$
|
89.91
|
|
(in millions)
|
Total
|
|
2017
|
|
2018-2019
|
|
2020-2021
|
|
Thereafter
|
|
|||||
Unrecorded contractual obligations:
|
|
|
|
|
|||||||||||
Operating leases
a
|
$
|
1,552.7
|
|
$
|
286.2
|
|
$
|
390.8
|
|
$
|
317.5
|
|
$
|
558.2
|
|
Inventory purchase obligations
b
|
196.6
|
|
196.6
|
|
—
|
|
—
|
|
—
|
|
|||||
Interest on debt
c
|
665.0
|
|
35.9
|
|
71.8
|
|
71.8
|
|
485.5
|
|
|||||
Other contractual obligations
d
|
71.4
|
|
48.9
|
|
15.4
|
|
1.0
|
|
6.1
|
|
|||||
Recorded contractual obligations:
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
228.7
|
|
228.7
|
|
—
|
|
—
|
|
—
|
|
|||||
Long-term debt
e
|
888.0
|
|
—
|
|
—
|
|
—
|
|
888.0
|
|
|||||
|
$
|
3,602.4
|
|
$
|
796.3
|
|
$
|
478.0
|
|
$
|
390.3
|
|
$
|
1,937.8
|
|
a)
|
Operating lease obligations do not include obligations for contingent rent, property taxes, insurance and maintenance that are required by most lease agreements. Contingent rent for the year ended January 31,
2017
totaled
$32.4 million
. See "Item 8. Financial Statements and Supplementary Data - Note J. Commitment and Contingencies" for a discussion of the Company’s operating leases.
|
b)
|
The Company will, from time to time, enter into arrangements to purchase rough diamonds that contain minimum purchase obligations. Inventory purchase obligations associated with these agreements have been estimated at approximately
$60.0
million for
2017
and included in this table. Purchases beyond
2017
that are contingent upon mine production have been excluded as they cannot be reasonably estimated.
|
c)
|
Excludes interest payments on amounts outstanding under available lines of credit, as the outstanding amounts fluctuate based on the Company's working capital needs.
|
d)
|
Consists primarily of technology licensing and service contracts, fixed royalty commitments, construction-in-progress and packaging supplies.
|
e)
|
Amounts exclude any unamortized discount or premium.
|
•
|
Cash contributions to the Company's pension plan and cash payments for other postretirement obligations. The Company funds the Qualified Plan's trust in accordance with regulatory limits to provide for current service and for the unfunded benefit obligation over a reasonable period and for current service benefit accruals. To the extent that these requirements are fully covered by assets in the Qualified Plan, the Company may elect not to make any contribution in a particular year. No cash contribution was required in 2016, and none is required in 2017, to meet the minimum funding requirements of the Employee Retirement Income Security Act ("ERISA"). However, the Company periodically evaluates whether to make discretionary cash contributions to the Qualified Plan and made a voluntary cash contribution of $120.0 million in 2016 but currently does not anticipate making such contributions in 2017. This expectation is subject to change based on management's assessment of a variety of factors, including, but not limited to, asset performance, interest rates and changes in actuarial assumptions. The Company estimates cash payments for postretirement health-care and life insurance benefit obligations to be
$1.9 million
in
2017
.
|
•
|
Unrecognized tax benefits at
January 31, 2017
of
$3.4 million
and accrued interest and penalties of
$8.3 million
. 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 examinations may result in proposed assessments where the ultimate resolution may result in the Company owing additional taxes. At January 31,
2017
, approximately
$1.0
million of total unrecognized tax benefits, if recognized, would affect the effective income tax rate. As of January 31, 2017,
|
(in millions)
|
Total
Capacity
|
|
Borrowings Outstanding
|
|
Letters of Credit Issued
|
|
Available
Capacity
|
|
||||
Four-year revolving credit facility
a
|
$
|
375.0
|
|
$
|
26.3
|
|
$
|
—
|
|
$
|
348.7
|
|
Five-year revolving credit facility
b
|
375.0
|
|
66.7
|
|
4.0
|
|
304.3
|
|
||||
Other credit facilities
c
|
281.1
|
|
135.7
|
|
—
|
|
145.4
|
|
||||
|
$
|
1,031.1
|
|
$
|
228.7
|
|
$
|
4.0
|
|
$
|
798.4
|
|
|
January 31,
|
|
|||||
(in millions, except per share amounts)
|
2017
|
|
|
2016
|
|
||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
928.0
|
|
|
$
|
843.6
|
|
Short-term investments
|
57.8
|
|
|
43.0
|
|
||
Accounts receivable, less allowances of $11.5 and $11.5
|
226.8
|
|
|
206.4
|
|
||
Inventories, net
|
2,157.6
|
|
|
2,225.0
|
|
||
Prepaid expenses and other current assets
|
203.4
|
|
|
190.4
|
|
||
Total current assets
|
3,573.6
|
|
|
3,508.4
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
931.8
|
|
|
935.8
|
|
||
Deferred income taxes
|
301.8
|
|
|
382.8
|
|
||
Other assets, net
|
290.4
|
|
|
294.6
|
|
||
|
$
|
5,097.6
|
|
|
$
|
5,121.6
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
228.7
|
|
|
$
|
221.6
|
|
Current portion of long-term debt
|
—
|
|
|
84.2
|
|
||
Accounts payable and accrued liabilities
|
312.8
|
|
|
329.1
|
|
||
Income taxes payable
|
22.1
|
|
|
27.1
|
|
||
Merchandise credits and deferred revenue
|
69.2
|
|
|
67.9
|
|
||
Total current liabilities
|
632.8
|
|
|
729.9
|
|
||
|
|
|
|
||||
Long-term debt
|
878.4
|
|
|
790.0
|
|
||
Pension/postretirement benefit obligations
|
318.6
|
|
|
428.1
|
|
||
Deferred gains on sale-leasebacks
|
45.9
|
|
|
55.1
|
|
||
Other long-term liabilities
|
193.5
|
|
|
189.0
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred Stock, $0.01 par value; authorized 2.0 shares, none issued and outstanding
|
—
|
|
|
—
|
|
||
Common Stock, $0.01 par value; authorized 240.0 shares, issued and outstanding 124.5 and 126.8
|
1.2
|
|
|
1.3
|
|
||
Additional paid-in capital
|
1,190.2
|
|
|
1,175.7
|
|
||
Retained earnings
|
2,078.3
|
|
|
2,012.5
|
|
||
Accumulated other comprehensive loss, net of tax
|
(256.2
|
)
|
|
(278.1
|
)
|
||
Total Tiffany & Co. stockholders' equity
|
3,013.5
|
|
|
2,911.4
|
|
||
Non-controlling interests
|
14.9
|
|
|
18.1
|
|
||
Total stockholders' equity
|
3,028.4
|
|
|
2,929.5
|
|
||
|
$
|
5,097.6
|
|
|
$
|
5,121.6
|
|
|
|
|
|
||||
See notes to consolidated financial statements.
|
|
|
|
|
Years Ended January 31,
|
|
|||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
|
|||
Net sales
|
$
|
4,001.8
|
|
$
|
4,104.9
|
|
$
|
4,249.9
|
|
Cost of sales
|
1,511.5
|
|
1,613.6
|
|
1,712.7
|
|
|||
Gross profit
|
2,490.3
|
|
2,491.3
|
|
2,537.2
|
|
|||
Selling, general and administrative expenses
|
1,769.1
|
|
1,731.2
|
|
1,645.8
|
|
|||
Earnings from operations
|
721.2
|
|
760.1
|
|
891.4
|
|
|||
Interest expense and financing costs
|
46.0
|
|
49.0
|
|
62.9
|
|
|||
Other (income) expense, net
|
(1.4
|
)
|
1.2
|
|
(2.8
|
)
|
|||
Loss on extinguishment of debt
|
—
|
|
—
|
|
93.8
|
|
|||
Earnings from operations before income taxes
|
676.6
|
|
709.9
|
|
737.5
|
|
|||
Provision for income taxes
|
230.5
|
|
246.0
|
|
253.3
|
|
|||
Net earnings
|
$
|
446.1
|
|
$
|
463.9
|
|
$
|
484.2
|
|
Net earnings per share:
|
|
|
|
||||||
Basic
|
$
|
3.57
|
|
$
|
3.61
|
|
$
|
3.75
|
|
Diluted
|
$
|
3.55
|
|
$
|
3.59
|
|
$
|
3.73
|
|
Weighted-average number of common shares:
|
|
|
|
||||||
Basic
|
125.1
|
|
128.6
|
|
129.2
|
|
|||
Diluted
|
125.5
|
|
129.1
|
|
129.9
|
|
|||
|
|
|
|
||||||
See notes to consolidated financial statements.
|
|
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Net earnings
|
$
|
446.1
|
|
$
|
463.9
|
|
$
|
484.2
|
|
Other comprehensive earnings (loss), net of tax
|
|
|
|
||||||
Foreign currency translation adjustments
|
(8.4
|
)
|
(59.0
|
)
|
(93.1
|
)
|
|||
Unrealized gain (loss) on marketable securities
|
1.8
|
|
(2.9
|
)
|
(0.8
|
)
|
|||
Unrealized gain (loss) on hedging instruments
|
10.7
|
|
(21.4
|
)
|
1.2
|
|
|||
Net unrealized gain (loss) on benefit plans
|
17.8
|
|
95.7
|
|
(139.2
|
)
|
|||
Total other comprehensive earnings (loss), net of tax
|
21.9
|
|
12.4
|
|
(231.9
|
)
|
|||
Comprehensive earnings
|
$
|
468.0
|
|
$
|
476.3
|
|
$
|
252.3
|
|
|
|
|
|
||||||
See notes to consolidated financial statements.
|
|
|
|
|
Total
Stockholders' Equity |
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Non-
Controlling
Interests
|
|||||||||||||||
(in millions)
|
Shares
|
|
Amount
|
|||||||||||||||||||||||
Balance at January 31, 2014
|
$
|
2,734.0
|
|
|
$
|
1,682.5
|
|
|
$
|
(58.6
|
)
|
|
128.3
|
|
|
$
|
1.3
|
|
|
$
|
1,095.3
|
|
|
$
|
13.5
|
|
Exercise of stock options and vesting of restricted stock units ("RSUs")
|
36.9
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
36.9
|
|
|
—
|
|
||||||
Tax effect of exercise of stock options and vesting of RSUs
|
14.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.1
|
|
|
—
|
|
||||||
Share-based compensation expense
|
26.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26.7
|
|
|
—
|
|
||||||
Issuance of Common Stock under Employee Profit Sharing and Retirement Savings Plan
|
3.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
||||||
Purchase and retirement of Common Stock
|
(27.0
|
)
|
|
(24.8
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
||||||
Cash dividends on Common Stock
|
(191.2
|
)
|
|
(191.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive loss, net of tax
|
(231.9
|
)
|
|
—
|
|
|
(231.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
484.2
|
|
|
484.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Redemption of non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
1.1
|
|
||||||
Non-controlling interests
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||||
Balance at January 31, 2015
|
2,850.7
|
|
|
1,950.7
|
|
|
(290.5
|
)
|
|
129.3
|
|
|
1.3
|
|
|
1,173.6
|
|
|
15.6
|
|
||||||
Exercise of stock options and vesting of RSUs
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||||
Tax effect of exercise of stock options and vesting of RSUs
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
||||||
Share-based compensation expense
|
24.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.8
|
|
|
—
|
|
||||||
Purchase and retirement of Common Stock
|
(220.4
|
)
|
|
(198.7
|
)
|
|
—
|
|
|
(2.8
|
)
|
|
—
|
|
|
(21.7
|
)
|
|
—
|
|
||||||
Cash dividends on Common Stock
|
(203.4
|
)
|
|
(203.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive earnings, net of tax
|
12.4
|
|
|
—
|
|
|
12.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
463.9
|
|
|
463.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Redemption of non-controlling interest
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|
1.2
|
|
||||||
Non-controlling interests
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||||
Balance at January 31, 2016
|
2,929.5
|
|
|
2,012.5
|
|
|
(278.1
|
)
|
|
126.8
|
|
|
1.3
|
|
|
1,175.7
|
|
|
18.1
|
|
||||||
Exercise of stock options and vesting of RSUs
|
12.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
12.5
|
|
|
—
|
|
||||||
Tax effect of exercise of stock options and vesting of RSUs
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
||||||
Share-based compensation expense
|
24.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.5
|
|
|
—
|
|
||||||
Purchase and retirement of Common Stock
|
(183.6
|
)
|
|
(161.5
|
)
|
|
—
|
|
|
(2.8
|
)
|
|
(0.1
|
)
|
|
(22.0
|
)
|
|
—
|
|
||||||
Cash dividends on Common Stock
|
(218.8
|
)
|
|
(218.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive earnings, net of tax
|
21.9
|
|
|
—
|
|
|
21.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
446.1
|
|
|
446.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Non-controlling interests
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
||||||
Balance at January 31, 2017
|
$
|
3,028.4
|
|
|
$
|
2,078.3
|
|
|
$
|
(256.2
|
)
|
|
124.5
|
|
|
$
|
1.2
|
|
|
$
|
1,190.2
|
|
|
$
|
14.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
See notes to consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended January 31,
|
|
|||||||||
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
446.1
|
|
|
$
|
463.9
|
|
|
$
|
484.2
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|||||||||||
Depreciation and amortization
|
208.5
|
|
|
202.5
|
|
|
194.2
|
|
|||
Amortization of gain on sale-leasebacks
|
(8.5
|
)
|
|
(8.3
|
)
|
|
(9.2
|
)
|
|||
Excess tax benefits from share-based payment arrangements
|
(0.7
|
)
|
|
(2.2
|
)
|
|
(14.1
|
)
|
|||
Provision for inventories
|
19.2
|
|
|
25.4
|
|
|
33.6
|
|
|||
Deferred income taxes
|
46.1
|
|
|
(1.9
|
)
|
|
37.7
|
|
|||
Provision for pension/postretirement benefits
|
45.4
|
|
|
65.8
|
|
|
39.2
|
|
|||
Share-based compensation expense
|
24.3
|
|
|
24.5
|
|
|
26.5
|
|
|||
Loan impairment charges
|
12.6
|
|
|
37.9
|
|
|
—
|
|
|||
Asset impairment charge
|
25.4
|
|
|
—
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(19.2
|
)
|
|
(16.7
|
)
|
|
(17.6
|
)
|
|||
Inventories
|
54.8
|
|
|
63.7
|
|
|
(167.6
|
)
|
|||
Prepaid expenses and other current assets
|
33.6
|
|
|
1.1
|
|
|
(20.9
|
)
|
|||
Other assets, net
|
0.8
|
|
|
(17.5
|
)
|
|
(20.2
|
)
|
|||
Accounts payable and accrued liabilities
|
(24.6
|
)
|
|
(15.3
|
)
|
|
(5.9
|
)
|
|||
Income taxes payable
|
(39.3
|
)
|
|
3.1
|
|
|
81.9
|
|
|||
Merchandise credits and deferred revenue
|
1.5
|
|
|
3.0
|
|
|
(2.7
|
)
|
|||
Other long-term liabilities
|
(123.9
|
)
|
|
(15.4
|
)
|
|
(24.0
|
)
|
|||
Net cash provided by operating activities
|
702.1
|
|
|
813.6
|
|
|
615.1
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of marketable securities and short-term investments
|
(125.5
|
)
|
|
(100.0
|
)
|
|
(40.1
|
)
|
|||
Proceeds from sales of marketable securities and short-term investments
|
109.8
|
|
|
73.6
|
|
|
55.3
|
|
|||
Capital expenditures
|
(222.8
|
)
|
|
(252.7
|
)
|
|
(247.4
|
)
|
|||
Proceeds from sale of assets, net
|
—
|
|
|
0.9
|
|
|
—
|
|
|||
Proceeds from notes receivable
|
1.7
|
|
|
—
|
|
|
15.2
|
|
|||
Net cash used in investing activities
|
(236.8
|
)
|
|
(278.2
|
)
|
|
(217.0
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from (repayment of) credit facility borrowings, net
|
14.2
|
|
|
(11.3
|
)
|
|
(12.5
|
)
|
|||
Proceeds from other credit facility borrowings
|
76.8
|
|
|
24.8
|
|
|
19.8
|
|
|||
Repayment of other credit facility borrowings
|
(83.1
|
)
|
|
(16.0
|
)
|
|
(3.4
|
)
|
|||
Proceeds from the issuance of long-term debt
|
98.1
|
|
|
—
|
|
|
548.0
|
|
|||
Repayment of long-term debt
|
(97.1
|
)
|
|
—
|
|
|
(400.0
|
)
|
|||
Payment for settlement of interest rate swaps
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|||
Repurchase of Common Stock
|
(183.6
|
)
|
|
(220.4
|
)
|
|
(27.0
|
)
|
|||
Proceeds from exercised stock options
|
15.3
|
|
|
2.0
|
|
|
42.9
|
|
|||
Excess tax benefits from share-based payment arrangements
|
0.7
|
|
|
2.2
|
|
|
14.1
|
|
|||
Cash dividends on Common Stock
|
(218.8
|
)
|
|
(203.4
|
)
|
|
(191.2
|
)
|
|||
Distribution to non-controlling interest
|
(3.8
|
)
|
|
—
|
|
|
(1.9
|
)
|
|||
Financing fees
|
(1.5
|
)
|
|
(0.2
|
)
|
|
(8.0
|
)
|
|||
Net cash used in financing activities
|
(382.8
|
)
|
|
(422.3
|
)
|
|
(23.4
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1.9
|
|
|
0.5
|
|
|
9.5
|
|
|||
Net increase in cash and cash equivalents
|
84.4
|
|
|
113.6
|
|
|
384.2
|
|
|||
Cash and cash equivalents at beginning of year
|
843.6
|
|
|
730.0
|
|
|
345.8
|
|
|||
Cash and cash equivalents at end of year
|
$
|
928.0
|
|
|
$
|
843.6
|
|
|
$
|
730.0
|
|
See notes to consolidated financial statements.
|
|
|
|
|
|
A.
|
NATURE OF BUSINESS
|
•
|
Americas includes sales in Company-operated TIFFANY & CO. stores in the United States, Canada and Latin America, as well as sales of TIFFANY & CO. products in certain markets through Internet, catalog, business-to-business and wholesale operations;
|
•
|
Asia-Pacific includes sales in Company-operated TIFFANY & CO. stores, as well as sales of TIFFANY & CO. products in certain markets through Internet and wholesale operations;
|
•
|
Japan includes sales in Company-operated TIFFANY & CO. stores, as well as sales of TIFFANY & CO. products through Internet, business-to-business and wholesale operations;
|
•
|
Europe includes sales in Company-operated TIFFANY & CO. stores, as well as sales of TIFFANY & CO. products in certain markets through the Internet and wholesale operations; and
|
•
|
Other consists of all non-reportable segments. Other includes the Emerging Markets region, which includes sales in Company-operated TIFFANY & CO. stores and wholesale operations in the Middle East. In addition, Other includes wholesale sales of diamonds as well as earnings received from third-party licensing agreements.
|
B.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Buildings
|
39 years
|
Machinery and equipment
|
5-15 years
|
Office equipment
|
3-8 years
|
Software
|
5-10 years
|
Furniture and fixtures
|
3-10 years
|
|
January 31, 2017
|
January 31, 2016
|
||||||||||
(in millions)
|
Gross Carrying Amount
|
Accumulated Amortization
|
Gross Carrying
Amount
|
Accumulated Amortization
|
||||||||
Product rights
|
$
|
48.9
|
|
$
|
(11.0
|
)
|
$
|
49.6
|
|
$
|
(9.2
|
)
|
Key money deposits
|
31.9
|
|
(4.1
|
)
|
32.7
|
|
(3.3
|
)
|
||||
Trademarks
|
2.5
|
|
(2.5
|
)
|
2.5
|
|
(2.5
|
)
|
||||
|
$
|
83.3
|
|
$
|
(17.6
|
)
|
$
|
84.8
|
|
$
|
(15.0
|
)
|
(in millions)
|
Americas
|
Asia-Pacific
|
Japan
|
Europe
|
Other
|
Total
|
||||||||||||
January 31, 2015
|
$
|
12.3
|
|
$
|
0.3
|
|
$
|
1.1
|
|
$
|
1.1
|
|
$
|
24.0
|
|
$
|
38.8
|
|
Translation
|
(0.1
|
)
|
—
|
|
—
|
|
(0.1
|
)
|
(0.1
|
)
|
(0.3
|
)
|
||||||
January 31, 2016
|
12.2
|
|
0.3
|
|
1.1
|
|
1.0
|
|
23.9
|
|
38.5
|
|
||||||
Translation
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
0.1
|
|
—
|
|
(0.1
|
)
|
||||||
January 31, 2017
|
$
|
12.1
|
|
$
|
0.3
|
|
$
|
1.0
|
|
$
|
1.1
|
|
$
|
23.9
|
|
$
|
38.4
|
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Net earnings for basic and diluted EPS
|
$
|
446.1
|
|
$
|
463.9
|
|
$
|
484.2
|
|
Weighted-average shares for basic EPS
|
125.1
|
|
128.6
|
|
129.2
|
|
|||
Incremental shares based upon the assumed exercise of stock options and unvested restricted stock units
|
0.4
|
|
0.5
|
|
0.7
|
|
|||
Weighted-average shares for diluted EPS
|
125.5
|
|
129.1
|
|
129.9
|
|
C.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Interest, net of interest capitalization
|
$
|
40.6
|
|
$
|
42.5
|
|
$
|
59.7
|
|
Income taxes
|
$
|
213.9
|
|
$
|
237.5
|
|
$
|
133.4
|
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Accrued capital expenditures
|
$
|
10.7
|
|
$
|
8.2
|
|
$
|
8.2
|
|
Issuance of Common Stock under the Employee Profit Sharing and Retirement Savings Plan
|
$
|
|
|
$
|
|
|
$
|
3.9
|
|
D.
|
INVENTORIES
|
|
January 31,
|
|
||||
(in millions)
|
2017
|
|
2016
|
|
||
Finished goods
|
$
|
1,249.4
|
|
$
|
1,292.9
|
|
Raw materials
|
806.3
|
|
813.7
|
|
||
Work-in-process
|
101.9
|
|
118.4
|
|
||
Inventories, net
|
$
|
2,157.6
|
|
$
|
2,225.0
|
|
E.
|
PROPERTY, PLANT AND EQUIPMENT
|
|
January 31,
|
|
||||
(in millions)
|
2017
|
|
2016
|
|
||
Land
|
$
|
41.8
|
|
$
|
45.6
|
|
Buildings
|
122.5
|
|
120.9
|
|
||
Leasehold and building improvements
|
1,195.8
|
|
1,108.6
|
|
||
Office equipment
|
245.7
|
|
254.0
|
|
||
Software
|
312.4
|
|
295.1
|
|
||
Furniture and fixtures
|
281.2
|
|
265.3
|
|
||
Machinery and equipment
|
177.7
|
|
169.2
|
|
||
Construction-in-progress
|
78.6
|
|
95.7
|
|
||
|
2,455.7
|
|
2,354.4
|
|
||
Accumulated depreciation and amortization
|
(1,523.9
|
)
|
(1,418.6
|
)
|
||
|
$
|
931.8
|
|
$
|
935.8
|
|
F.
|
ACCOUNTS PAYABLE AND ACCRUED LIABILTIES
|
|
January 31,
|
|
||||
(in millions)
|
2017
|
|
2016
|
|
||
Accounts payable - trade
|
$
|
108.6
|
|
$
|
127.8
|
|
Accrued compensation and commissions
|
96.3
|
|
77.9
|
|
||
Accrued sales, withholding and other taxes
|
26.7
|
|
21.9
|
|
||
Other
|
81.2
|
|
101.5
|
|
||
|
$
|
312.8
|
|
$
|
329.1
|
|
G.
|
DEBT
|
|
|
January 31,
|
|
|||
(in millions)
|
2017
|
|
2016
|
|
||
Short-term borrowings:
|
|
|
||||
Credit Facilities
|
$
|
93.0
|
|
$
|
76.6
|
|
Other credit facilities
|
135.7
|
|
145.0
|
|
||
|
$
|
228.7
|
|
$
|
221.6
|
|
Long-term debt:
|
|
|
||||
Unsecured Senior Notes:
|
|
|
||||
2010 1.72% Senior Notes, due September 2016
a, b
|
$
|
|
|
$
|
84.2
|
|
2012 4.40% Series B Notes, due July 2042
c
|
250.0
|
|
250.0
|
|
||
2014 3.80% Senior Notes, due October 2024
d, e
|
250.0
|
|
250.0
|
|
||
2014 4.90% Senior Notes, due October 2044
d, e
|
300.0
|
|
300.0
|
|
||
2016 0.78% Senior Notes, due August 2026
b, d
|
88.0
|
|
—
|
|
||
|
888.0
|
|
884.2
|
|
||
Less current portion of long-term debt
|
—
|
|
84.2
|
|
||
Less unamortized discounts and debt issuance costs
|
9.6
|
|
10.0
|
|
||
|
$
|
878.4
|
|
$
|
790.0
|
|
a
|
These Senior Notes were repaid upon the maturity thereof during the year ended January 31, 2017 using the proceeds from the issuance of the 0.78% Senior Notes due August 2026.
|
b
|
These Senior Notes were issued, at par, ¥
10.0
billion.
|
c
|
The agreements governing these Senior Notes require repayments of $
50.0
million in aggregate every five years beginning in July 2022.
|
d
|
These agreements require lump sum repayments upon maturity.
|
e
|
These Senior Notes were issued at a discount which will be amortized until the debt maturity.
|
Years Ending January 31,
|
Amount
a
(in millions)
|
|
|
2018
|
$
|
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
2021
|
—
|
|
|
2022
|
—
|
|
|
Thereafter
|
888.0
|
|
|
|
$
|
888.0
|
|
a
|
Amounts exclude any unamortized discount or premium.
|
•
|
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.
|
(in millions)
|
|
Notional Amount
|
|
|
USD Equivalent
|
|
Derivatives designated as hedging instruments:
|
|
|
|
|
||
Japanese yen
|
¥
|
16,669.0
|
|
$
|
156.1
|
|
British pound
|
£
|
13.3
|
|
|
17.5
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||
U.S. dollar
|
$
|
58.3
|
|
$
|
58.3
|
|
Euro
|
€
|
28.0
|
|
|
29.7
|
|
British pound
|
£
|
5.5
|
|
|
6.8
|
|
Japanese yen
|
¥
|
952.8
|
|
|
8.4
|
|
Korean won
|
₩
|
15,011.6
|
|
|
12.5
|
|
Mexican peso
|
₱
|
167.1
|
|
|
7.7
|
|
New Zealand dollar
|
NZ$
|
11.7
|
|
|
8.4
|
|
Singapore dollar
|
S$
|
25.1
|
|
|
17.7
|
|
Swiss franc
|
Fr.
|
4.3
|
|
|
4.2
|
|
|
Years Ended January 31,
|
|
|||||||||||||
|
2017
|
|
2016
|
||||||||||||
(in millions)
|
Pre-Tax Gain
(Loss) Recognized
in OCI (Effective
Portion)
|
|
Pre-Tax Gain (Loss)
Reclassified from
Accumulated OCI
into Earnings
(Effective Portion)
|
|
Pre-Tax Gain
(Loss) Recognized
in OCI
(Effective Portion)
|
|
Pre-Tax Gain (Loss) Reclassified
from Accumulated
OCI into Earnings
(Effective Portion)
|
||||||||
Derivatives in Cash Flow Hedging
Relationships:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
a
|
$
|
(1.5
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
3.9
|
|
|
$
|
20.2
|
|
Precious metal collars
a
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Precious metal forward contracts
a
|
14.0
|
|
|
(8.5
|
)
|
|
(26.3
|
)
|
|
(7.0
|
)
|
||||
Cross-currency swaps
c
|
(0.4
|
)
|
|
6.6
|
|
|
—
|
|
|
—
|
|
||||
Forward-starting interest rate swaps
b
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
||||
|
$
|
12.1
|
|
|
$
|
(4.9
|
)
|
|
$
|
(22.2
|
)
|
|
$
|
11.7
|
|
a
|
The gain or loss recognized in earnings is included within Cost of sales.
|
b
|
The gain or loss recognized in earnings is included within Interest expense and financing costs.
|
c
|
The gain or loss recognized in earnings is included within Other (income) expense, net.
|
I.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|
Estimated Fair Value
|
|
Total Fair
Value
|
||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Marketable securities
a
|
$
|
36.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36.4
|
|
Time deposits
b
|
57.8
|
|
|
—
|
|
|
—
|
|
|
57.8
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Precious metal forward contracts
c
|
—
|
|
|
3.6
|
|
|
—
|
|
|
3.6
|
|
||||
Precious metal collars
c
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
||||
Foreign exchange forward contracts
c
|
—
|
|
|
9.6
|
|
|
—
|
|
|
9.6
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|||||||||
Foreign exchange forward contracts
c
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Total financial assets
|
$
|
94.2
|
|
|
$
|
13.9
|
|
|
$
|
—
|
|
|
$
|
108.1
|
|
|
Estimated Fair Value
|
|
Total Fair
Value
|
||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Financial liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Precious metal forward contracts
d
|
$
|
—
|
|
|
$
|
5.4
|
|
|
$
|
—
|
|
|
$
|
5.4
|
|
Precious metal collars
d
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Foreign exchange forward contracts
d
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||
Cross-currency swaps
d
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|||||||||
Foreign exchange forward contracts
d
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
||||
Total financial liabilities
|
$
|
—
|
|
|
$
|
8.9
|
|
|
$
|
—
|
|
|
$
|
8.9
|
|
|
Estimated Fair Value
|
|
Total Fair
Value
|
||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Marketable securities
a
|
$
|
31.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31.8
|
|
Time deposits
b
|
43.0
|
|
|
—
|
|
|
—
|
|
|
43.0
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Precious metal forward contracts
c
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||
Precious metal collar contracts
c
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Foreign exchange forward contracts
c
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|||||||||
Foreign exchange forward contracts
c
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
||||
Total financial assets
|
$
|
74.8
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
78.5
|
|
a
|
Included within Other assets, net.
|
b
|
Included within Short-term investments.
|
c
|
Included within Prepaid expenses and other current assets or Other assets, net evaluated based on the maturity of the contract.
|
d
|
Included within Accounts payable and accrued liabilities or Other long-term liabilities evaluated based on the maturity of the contract.
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Minimum rent for retail locations
|
$
|
184.1
|
|
$
|
172.2
|
|
$
|
158.2
|
|
Contingent rent based on sales
|
32.4
|
|
34.9
|
|
38.6
|
|
|||
Office, distribution and manufacturing facilities and equipment
|
40.0
|
|
37.0
|
|
35.8
|
|
|||
|
$
|
256.5
|
|
$
|
244.1
|
|
$
|
232.6
|
|
Years Ending January 31,
|
Annual Minimum Rental Payments
a
(in millions)
|
|
|
2018
|
$
|
286.2
|
|
2019
|
203.6
|
|
|
2020
|
187.2
|
|
|
2021
|
168.8
|
|
|
2022
|
148.7
|
|
|
Thereafter
|
558.2
|
|
a
|
Operating lease obligations do not include obligations for property taxes, insurance and maintenance that are required by most lease agreements.
|
K.
|
RELATED PARTIES
|
|
January 31,
|
|
|||||
(in millions)
|
2017
|
|
|
2016
|
|
||
Accumulated other comprehensive (loss) earnings, net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
$
|
(143.7
|
)
|
|
$
|
(135.3
|
)
|
Unrealized gain (loss) on marketable securities
|
0.8
|
|
|
(1.0
|
)
|
||
Deferred hedging loss
|
(16.1
|
)
|
|
(26.8
|
)
|
||
Net unrealized loss on benefit plans
|
(97.2
|
)
|
|
(115.0
|
)
|
||
|
$
|
(256.2
|
)
|
|
$
|
(278.1
|
)
|
|
Years Ended January 31,
|
|
|||||||
(
in millions
)
|
2017
|
|
2016
|
|
2015
|
|
|||
Foreign currency translation adjustments
|
$
|
8.3
|
|
$
|
(59.9
|
)
|
$
|
(101.9
|
)
|
Income tax (expense) benefit
|
(16.7
|
)
|
0.9
|
|
8.8
|
|
|||
Foreign currency adjustments, net of tax
|
(8.4
|
)
|
(59.0
|
)
|
(93.1
|
)
|
|||
Unrealized gain (loss) on marketable securities
|
2.7
|
|
(4.1
|
)
|
(0.9
|
)
|
|||
Reclassification for gain included in net earnings
a
|
—
|
|
(0.4
|
)
|
—
|
|
|||
Income tax (expense) benefit
|
(0.9
|
)
|
1.6
|
|
0.1
|
|
|||
Unrealized gain (loss) on marketable securities, net of tax
|
1.8
|
|
(2.9
|
)
|
(0.8
|
)
|
|||
Unrealized gain (loss) on hedging instruments
|
12.1
|
|
(22.2
|
)
|
14.6
|
|
|||
Reclassification adjustment for loss (gain) included in
net earnings
b
|
4.9
|
|
(11.7
|
)
|
(13.0
|
)
|
|||
Income tax (expense) benefit
|
(6.3
|
)
|
12.5
|
|
(0.4
|
)
|
|||
Unrealized gain (loss) on hedging instruments, net of tax
|
10.7
|
|
(21.4
|
)
|
1.2
|
|
|||
Prior service cost
|
—
|
|
—
|
|
(0.5
|
)
|
|||
Net actuarial gain (loss)
|
14.1
|
|
122.5
|
|
(234.6
|
)
|
|||
Amortization of net loss included in net earnings
c
|
14.7
|
|
30.4
|
|
13.1
|
|
|||
Amortization of prior service credit included in net earnings
c
|
(0.7
|
)
|
(0.6
|
)
|
(0.4
|
)
|
|||
Income tax (expense) benefit
|
(10.3
|
)
|
(56.6
|
)
|
83.2
|
|
|||
Net unrealized gain (loss) on benefit plans, net of tax
|
17.8
|
|
95.7
|
|
(139.2
|
)
|
|||
Total other comprehensive earnings (loss), net of tax
|
$
|
21.9
|
|
$
|
12.4
|
|
$
|
(231.9
|
)
|
a
|
These gains are reclassified into Other (income) expense, net.
|
b
|
These losses (gains) are reclassified into Interest expense and financing costs and Cost of sales (see "Note H. Hedging Instruments" for additional details).
|
c
|
These accumulated other comprehensive income components are included in the computation of net periodic pension costs (see "Note N. Employee Benefit Plans" for additional details).
|
|
Years Ended January 31,
|
|
|||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
|
|||
Cost of repurchases
|
$
|
183.6
|
|
$
|
220.4
|
|
$
|
27.0
|
|
Shares repurchased and retired
|
2.8
|
|
2.8
|
|
0.3
|
|
|||
Average cost per share
|
$
|
65.24
|
|
$
|
78.40
|
|
$
|
89.91
|
|
|
Years Ended January 31,
|
|
||||
|
2017
|
|
2016
|
|
2015
|
|
Dividend yield
|
2.0
|
%
|
1.9
|
%
|
1.3
|
%
|
Expected volatility
|
23.8
|
%
|
28.1
|
%
|
30.2
|
%
|
Risk-free interest rate
|
1.8
|
%
|
1.5
|
%
|
1.5
|
%
|
Expected term in years
|
5
|
|
5
|
|
5
|
|
|
Number of
Shares
(in millions)
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-
Average
Remaining
Contractual
Term in Years
|
Aggregate
Intrinsic
Value
(in millions)
|
|
||
Outstanding at January 31, 2016
|
2.1
|
|
$
|
67.59
|
|
7.02
|
$
|
7.9
|
|
Granted
|
0.6
|
|
77.20
|
|
|
|
|||
Exercised
|
(0.3
|
)
|
57.40
|
|
|
|
|||
Forfeited/canceled
|
(0.1
|
)
|
75.16
|
|
|
|
|||
Outstanding at January 31, 2017
|
2.3
|
|
$
|
70.72
|
|
7.50
|
$
|
23.8
|
|
Exercisable at January 31, 2017
|
1.1
|
|
$
|
66.42
|
|
5.70
|
$
|
17.0
|
|
|
Number of Shares
(in millions)
|
|
Weighted-Average
Grant-Date Fair Value
|
|
|
Non-vested at January 31, 2016
|
0.5
|
|
$
|
79.02
|
|
Granted
|
0.4
|
|
67.46
|
|
|
Vested
|
(0.2
|
)
|
71.29
|
|
|
Forfeited
|
(0.1
|
)
|
79.51
|
|
|
Non-vested at January 31, 2017
|
0.6
|
|
$
|
73.33
|
|
|
Number of Shares
(in millions)
|
|
Weighted-Average
Grant-Date Fair Value
|
|
|
Non-vested at January 31, 2016
|
0.7
|
|
$
|
70.56
|
|
Granted
|
0.2
|
|
79.23
|
|
|
Vested
|
(0.1
|
)
|
67.15
|
|
|
Forfeited/canceled
|
(0.1
|
)
|
69.85
|
|
|
Non-vested at January 31, 2017
|
0.7
|
|
$
|
73.52
|
|
N.
|
EMPLOYEE BENEFIT PLANS
|
|
January 31,
|
|
|||||||||||
|
Pension Benefits
|
|
|
Other Postretirement Benefits
|
|
||||||||
(in millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
Change in benefit obligation:
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
742.6
|
|
$
|
841.7
|
|
|
$
|
78.4
|
|
$
|
92.9
|
|
Service cost
|
17.4
|
|
22.6
|
|
|
2.8
|
|
4.2
|
|
||||
Interest cost
|
31.6
|
|
30.6
|
|
|
3.1
|
|
3.2
|
|
||||
Participants' contributions
|
—
|
|
—
|
|
|
1.2
|
|
1.3
|
|
||||
MMA retiree drug subsidy
|
—
|
|
—
|
|
|
—
|
|
0.2
|
|
||||
Actuarial loss (gain)
|
15.9
|
|
(128.8
|
)
|
|
(10.5
|
)
|
(20.4
|
)
|
||||
Benefits paid
|
(24.3
|
)
|
(23.1
|
)
|
|
(2.5
|
)
|
(3.0
|
)
|
||||
Curtailments
|
—
|
|
(0.2
|
)
|
|
—
|
|
—
|
|
||||
Translation
|
0.5
|
|
(0.2
|
)
|
|
—
|
|
—
|
|
||||
Benefit obligation at end of year
|
783.7
|
|
742.6
|
|
|
72.5
|
|
78.4
|
|
||||
Change in plan assets:
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
385.8
|
|
406.0
|
|
|
—
|
|
—
|
|
||||
Actual return on plan assets
|
42.9
|
|
(2.2
|
)
|
|
—
|
|
—
|
|
||||
Employer contribution
|
125.7
|
|
5.1
|
|
|
1.3
|
|
1.5
|
|
||||
Participants' contributions
|
—
|
|
—
|
|
|
1.2
|
|
1.3
|
|
||||
MMA retiree drug subsidy
|
—
|
|
—
|
|
|
—
|
|
0.2
|
|
||||
Benefits paid
|
(24.3
|
)
|
(23.1
|
)
|
|
(2.5
|
)
|
(3.0
|
)
|
||||
Fair value of plan assets at end of year
|
530.1
|
|
385.8
|
|
|
—
|
|
—
|
|
||||
Funded status at end of year
|
$
|
(253.6
|
)
|
$
|
(356.8
|
)
|
|
$
|
(72.5
|
)
|
$
|
(78.4
|
)
|
|
January 31, 2017
|
|
||||||||||
(in millions)
|
Qualified
|
|
Excess/SRIP
|
|
Other
|
|
Total
|
|
||||
Projected benefit obligation
|
$
|
661.5
|
|
$
|
103.6
|
|
$
|
18.6
|
|
$
|
783.7
|
|
Fair value of plan assets
|
530.1
|
|
—
|
|
—
|
|
530.1
|
|
||||
Funded status
|
$
|
(131.4
|
)
|
$
|
(103.6
|
)
|
$
|
(18.6
|
)
|
$
|
(253.6
|
)
|
Accumulated benefit obligation
|
$
|
599.0
|
|
$
|
90.9
|
|
$
|
16.9
|
|
$
|
706.8
|
|
|
January 31, 2016
|
|
||||||||||
(in millions)
|
Qualified
|
|
Excess/SRIP
|
|
Other
|
|
Total
|
|
||||
Projected benefit obligation
|
$
|
620.8
|
|
$
|
105.5
|
|
$
|
16.3
|
|
$
|
742.6
|
|
Fair value of plan assets
|
385.8
|
|
—
|
|
—
|
|
385.8
|
|
||||
Funded status
|
$
|
(235.0
|
)
|
$
|
(105.5
|
)
|
$
|
(16.3
|
)
|
$
|
(356.8
|
)
|
Accumulated benefit obligation
|
$
|
556.8
|
|
$
|
92.1
|
|
$
|
13.5
|
|
$
|
662.4
|
|
|
January 31,
|
|
|||||||||||
|
Pension Benefits
|
|
|
Other Postretirement Benefits
|
|
||||||||
(in millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
Net actuarial loss (gain)
|
$
|
161.8
|
|
$
|
180.1
|
|
|
$
|
(0.1
|
)
|
$
|
10.4
|
|
Prior service cost (credit)
|
0.8
|
|
0.8
|
|
|
(2.4
|
)
|
(3.0
|
)
|
||||
Total before tax
|
$
|
162.6
|
|
$
|
180.9
|
|
|
$
|
(2.5
|
)
|
$
|
7.4
|
|
(in millions)
|
Pension Benefits
|
|
|
Other Postretirement Benefits
|
|
||
Net actuarial loss
|
$
|
14.0
|
|
|
$
|
|
|
Prior service cost (credit)
|
0.2
|
|
|
(0.7
|
)
|
||
|
$
|
14.2
|
|
|
$
|
(0.7
|
)
|
|
Years Ended January 31,
|
|
|||||||||||||||||
|
Pension Benefits
|
|
|
Other Postretirement Benefits
|
|
||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
Service cost
|
$
|
17.4
|
|
$
|
22.6
|
|
$
|
16.8
|
|
|
$
|
2.8
|
|
$
|
4.2
|
|
$
|
2.4
|
|
Interest cost
|
31.6
|
|
30.6
|
|
28.3
|
|
|
3.1
|
|
3.2
|
|
2.6
|
|
||||||
Expected return on plan assets
|
(23.5
|
)
|
(24.7
|
)
|
(23.6
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Curtailments
|
—
|
|
0.2
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service cost
|
—
|
|
—
|
|
0.3
|
|
|
(0.7
|
)
|
(0.7
|
)
|
(0.7
|
)
|
||||||
Amortization of net loss
|
14.7
|
|
28.9
|
|
13.1
|
|
|
—
|
|
1.5
|
|
—
|
|
||||||
Net periodic benefit cost
|
40.2
|
|
57.6
|
|
34.9
|
|
|
5.2
|
|
8.2
|
|
4.3
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial (gain) loss
|
(3.6
|
)
|
(102.1
|
)
|
199.8
|
|
|
(10.5
|
)
|
(20.4
|
)
|
34.8
|
|
||||||
Recognized actuarial loss
|
(14.7
|
)
|
(28.9
|
)
|
(13.1
|
)
|
|
—
|
|
(1.5
|
)
|
—
|
|
||||||
Prior service cost
|
—
|
|
—
|
|
0.5
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Recognized prior service (cost) credit
|
—
|
|
(0.1
|
)
|
(0.3
|
)
|
|
0.7
|
|
0.7
|
|
0.7
|
|
||||||
Total recognized in other comprehensive earnings
|
(18.3
|
)
|
(131.1
|
)
|
186.9
|
|
|
(9.8
|
)
|
(21.2
|
)
|
35.5
|
|
||||||
Total recognized in net periodic benefit cost and other comprehensive earnings
|
$
|
21.9
|
|
$
|
(73.5
|
)
|
$
|
221.8
|
|
|
$
|
(4.6
|
)
|
$
|
(13.0
|
)
|
$
|
39.8
|
|
|
January 31,
|
|
||
|
2017
|
|
2016
|
|
Discount rate:
|
|
|
||
Qualified Plan
|
4.25
|
%
|
4.50
|
%
|
Excess Plan/SRIP
|
4.25
|
%
|
4.25
|
%
|
Other Plans
|
0.81
|
%
|
1.05
|
%
|
Other Postretirement Benefits
|
4.25
|
%
|
4.50
|
%
|
Rate of increase in compensation:
|
|
|
||
Qualified Plan
|
3.00
|
%
|
3.00
|
%
|
Excess Plan
|
4.25
|
%
|
4.25
|
%
|
SRIP
|
6.50
|
%
|
6.50
|
%
|
Other Plans
|
1.12
|
%
|
1.18
|
%
|
|
Years Ended January 31,
|
|
||||
|
2017
|
|
2016
|
|
2015
|
|
Discount rate:
|
|
|
|
|||
Qualified Plan
|
4.50
|
%
|
3.75
|
%
|
4.75
|
%
|
Excess Plan/SRIP
|
4.25
|
%
|
3.75
|
%
|
5.00
|
%
|
Other Plans
|
1.40
|
%
|
1.71
|
%
|
1.81
|
%
|
Other Postretirement Benefits
|
4.50
|
%
|
3.50
|
%
|
5.00
|
%
|
Expected return on plan assets
|
7.00
|
%
|
7.50
|
%
|
7.50
|
%
|
Rate of increase in compensation:
|
|
|
|
|||
Qualified Plan
|
3.00
|
%
|
2.75
|
%
|
2.75
|
%
|
Excess Plan
|
4.25
|
%
|
4.25
|
%
|
4.25
|
%
|
SRIP
|
6.50
|
%
|
7.25
|
%
|
7.25
|
%
|
Other Plans
|
1.38
|
%
|
1.56
|
%
|
1.33
|
%
|
|
Fair Value at
|
Fair Value Measurements
Using Inputs Considered as*
|
||||||||||
(in millions)
|
January 31, 2017
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Equity securities:
|
|
|
|
|
||||||||
U.S. equity securities
|
$
|
56.2
|
|
$
|
56.2
|
|
$
|
—
|
|
$
|
—
|
|
Mutual fund
|
35.1
|
|
35.1
|
|
—
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
||||||||
Government bonds
|
78.2
|
|
77.8
|
|
0.4
|
|
—
|
|
||||
Corporate bonds
|
83.8
|
|
—
|
|
83.8
|
|
—
|
|
||||
Other types of investments:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
7.8
|
|
7.8
|
|
—
|
|
—
|
|
||||
Mutual funds
|
36.7
|
|
36.7
|
|
—
|
|
—
|
|
||||
Net assets in fair value hierarchy
|
297.8
|
|
213.6
|
|
84.2
|
|
—
|
|
||||
Investments at NAV practical expedient
a
|
232.3
|
|
|
|
|
|||||||
Plan assets at fair value
|
$
|
530.1
|
|
$
|
213.6
|
|
$
|
84.2
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
|
Fair Value at
|
Fair Value Measurements
Using Inputs Considered as*
|
||||||||||
(in millions)
|
January 31, 2016
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Equity securities:
|
|
|
|
|
||||||||
U.S. equity securities
|
$
|
45.6
|
|
$
|
45.6
|
|
$
|
—
|
|
$
|
—
|
|
Mutual fund
|
27.4
|
|
27.4
|
|
—
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
||||||||
Government bonds
|
62.3
|
|
61.3
|
|
1.0
|
|
—
|
|
||||
Corporate bonds
|
87.7
|
|
—
|
|
87.7
|
|
—
|
|
||||
Other types of investments:
|
|
|
|
|
||||||||
Cash and cash equivalents
|
2.5
|
|
2.5
|
|
—
|
|
—
|
|
||||
Mutual funds
|
25.6
|
|
25.6
|
|
—
|
|
—
|
|
||||
Net assets in fair value hierarchy
|
251.1
|
|
162.4
|
|
88.7
|
|
—
|
|
||||
Investments at NAV practical expedient
a
|
134.7
|
|
|
|
|
|||||||
Plan assets at fair value
|
$
|
385.8
|
|
$
|
162.4
|
|
$
|
88.7
|
|
$
|
—
|
|
*
|
See "Note I. Fair Value of Financial Instruments" for a description of the levels of inputs.
|
a
|
In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value ("NAV") per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the Qualified Plan's fair value of plan assets at the end of each respective year.
|
Years Ending January 31,
|
Pension Benefits
(in millions)
|
|
Other Postretirement Benefits
(in millions)
|
|
||
2018
|
$
|
25.6
|
|
$
|
1.9
|
|
2019
|
26.5
|
|
2.0
|
|
||
2020
|
27.2
|
|
2.1
|
|
||
2021
|
28.6
|
|
2.2
|
|
||
2022
|
29.7
|
|
2.3
|
|
||
2023-2027
|
171.5
|
|
14.3
|
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
United States
|
$
|
478.2
|
|
$
|
502.5
|
|
$
|
484.5
|
|
Foreign
|
198.4
|
|
207.4
|
|
253.0
|
|
|||
|
$
|
676.6
|
|
$
|
709.9
|
|
$
|
737.5
|
|
|
Years Ended January 31,
|
|
||||
|
2017
|
|
2016
|
|
2015
|
|
Statutory Federal income tax rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
State income taxes, net of Federal benefit
|
2.2
|
|
2.4
|
|
2.8
|
|
Foreign losses with no tax benefit
|
0.2
|
|
—
|
|
0.7
|
|
Undistributed foreign earnings
|
(2.3
|
)
|
(2.5
|
)
|
(4.2
|
)
|
Net change in uncertain tax positions
|
(0.7
|
)
|
0.5
|
|
0.3
|
|
Domestic manufacturing deduction
|
(0.9
|
)
|
(1.3
|
)
|
(1.3
|
)
|
Other
|
0.6
|
|
0.6
|
|
1.1
|
|
|
34.1
|
%
|
34.7
|
%
|
34.4
|
%
|
|
January 31,
|
|
||||
(in millions)
|
2017
|
|
2016
|
|
||
Deferred tax assets:
|
|
|
||||
Pension/postretirement benefits
|
$
|
124.7
|
|
$
|
166.7
|
|
Accrued expenses
|
36.1
|
|
34.3
|
|
||
Share-based compensation
|
17.3
|
|
18.3
|
|
||
Depreciation
|
6.5
|
|
6.6
|
|
||
Amortization
|
10.8
|
|
11.4
|
|
||
Foreign and state net operating losses
|
25.5
|
|
23.5
|
|
||
Sale-leaseback
|
25.8
|
|
30.4
|
|
||
Inventory
|
57.6
|
|
50.9
|
|
||
Financial hedging instruments
|
11.9
|
|
19.7
|
|
||
Unearned income
|
10.6
|
|
11.3
|
|
||
Other
|
23.0
|
|
53.6
|
|
||
|
349.8
|
|
426.7
|
|
||
Valuation allowance
|
(24.1
|
)
|
(19.5
|
)
|
||
|
325.7
|
|
407.2
|
|
||
Deferred tax liabilities:
|
|
|
||||
Foreign tax credit
|
(25.8
|
)
|
(25.1
|
)
|
||
Net deferred tax asset
|
$
|
299.9
|
|
$
|
382.1
|
|
|
|
|
January 31,
|
|
|||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Unrecognized tax benefits at beginning of year
|
$
|
10.2
|
|
$
|
8.3
|
|
$
|
27.6
|
|
Gross increases – tax positions in prior period
|
0.9
|
|
1.0
|
|
1.0
|
|
|||
Gross decreases – tax positions in prior period
|
(5.0
|
)
|
(0.4
|
)
|
(5.4
|
)
|
|||
Gross increases – tax positions in current period
|
0.3
|
|
1.4
|
|
0.1
|
|
|||
Settlements
|
(3.0
|
)
|
—
|
|
(14.8
|
)
|
|||
Lapse of statute of limitations
|
—
|
|
(0.1
|
)
|
(0.2
|
)
|
|||
Unrecognized tax benefits at end of year
|
$
|
3.4
|
|
$
|
10.2
|
|
$
|
8.3
|
|
|
Years Ended January 31,
|
|
|||||||||
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net sales:
|
|
|
|
|
|
||||||
Americas
|
$
|
1,841.9
|
|
|
$
|
1,947.0
|
|
|
$
|
2,033.5
|
|
Asia-Pacific
|
999.1
|
|
|
1,003.1
|
|
|
1,025.2
|
|
|||
Japan
|
604.4
|
|
|
541.3
|
|
|
554.3
|
|
|||
Europe
|
457.6
|
|
|
505.7
|
|
|
513.3
|
|
|||
Total reportable segments
|
3,903.0
|
|
|
3,997.1
|
|
|
4,126.3
|
|
|||
Other
|
98.8
|
|
|
107.8
|
|
|
123.6
|
|
|||
|
$
|
4,001.8
|
|
|
$
|
4,104.9
|
|
|
$
|
4,249.9
|
|
Earnings from operations*:
|
|
|
|
|
|
||||||
Americas
|
$
|
373.0
|
|
|
$
|
390.8
|
|
|
$
|
435.5
|
|
Asia-Pacific
|
256.0
|
|
|
264.4
|
|
|
281.6
|
|
|||
Japan
|
204.6
|
|
|
199.9
|
|
|
196.0
|
|
|||
Europe
|
81.6
|
|
|
97.4
|
|
|
110.5
|
|
|||
Total reportable segments
|
915.2
|
|
|
952.5
|
|
|
1,023.6
|
|
|||
Other
|
5.9
|
|
|
6.4
|
|
|
4.9
|
|
|||
|
$
|
921.1
|
|
|
$
|
958.9
|
|
|
$
|
1,028.5
|
|
*
|
Represents earnings from operations before (i) unallocated corporate expenses, (ii) interest expense, financing costs and other (income) expense, net, (iii) loss on extinguishment of debt, and (iv) other operating expenses.
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Earnings from operations for segments
|
$
|
921.1
|
|
$
|
958.9
|
|
$
|
1,028.5
|
|
Unallocated corporate expenses
|
(161.9
|
)
|
(152.1
|
)
|
(137.1
|
)
|
|||
Interest expense, financing costs and other (income) expense, net
|
(44.6
|
)
|
(50.2
|
)
|
(60.1
|
)
|
|||
Loss on extinguishment of debt
|
—
|
|
—
|
|
(93.8
|
)
|
|||
Other operating expense
|
(38.0
|
)
|
(46.7
|
)
|
—
|
|
|||
Earnings from operations before income taxes
|
$
|
676.6
|
|
$
|
709.9
|
|
$
|
737.5
|
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Net sales:
|
|
|
|
||||||
United States
|
$
|
1,691.4
|
|
$
|
1,795.5
|
|
$
|
1,870.8
|
|
Japan
|
604.4
|
|
541.3
|
|
554.3
|
|
|||
Other countries
|
1,706.0
|
|
1,768.1
|
|
1,824.8
|
|
|||
|
$
|
4,001.8
|
|
$
|
4,104.9
|
|
$
|
4,249.9
|
|
Long-lived assets:
|
|
|
|
||||||
United States
|
$
|
691.3
|
|
$
|
706.9
|
|
$
|
680.1
|
|
Japan
|
21.7
|
|
20.6
|
|
24.4
|
|
|||
Other countries
|
269.0
|
|
256.7
|
|
239.2
|
|
|||
|
$
|
982.0
|
|
$
|
984.2
|
|
$
|
943.7
|
|
|
Years Ended January 31,
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
Net sales:
|
|
|
|
||||||
High, fine & solitaire jewelry
|
$
|
779.1
|
|
$
|
854.1
|
|
$
|
870.4
|
|
Engagement jewelry & wedding bands
|
1,122.0
|
|
1,142.2
|
|
1,221.0
|
|
|||
Fashion jewelry
|
1,328.9
|
|
1,340.7
|
|
1,357.6
|
|
|||
Designer jewelry
|
465.0
|
|
460.8
|
|
481.5
|
|
|||
All other
|
306.8
|
|
307.1
|
|
319.4
|
|
|||
|
$
|
4,001.8
|
|
$
|
4,104.9
|
|
$
|
4,249.9
|
|
|
2016 Quarters Ended*
|
|
||||||||||
(in millions, except per share amounts)
|
April 30
|
|
July 31
|
|
October 31
|
|
January 31
a
|
|
||||
Net sales
|
$
|
891.3
|
|
$
|
931.6
|
|
$
|
949.3
|
|
$
|
1,229.6
|
|
Gross profit
|
545.6
|
|
577.1
|
|
579.5
|
|
788.2
|
|
||||
Earnings from operations
|
134.6
|
|
174.9
|
|
155.2
|
|
256.5
|
|
||||
Net earnings
|
87.5
|
|
105.7
|
|
95.1
|
|
157.8
|
|
||||
Net earnings per share:
|
|
|
|
|
||||||||
Basic
|
$
|
0.69
|
|
$
|
0.84
|
|
$
|
0.76
|
|
$
|
1.27
|
|
Diluted
|
$
|
0.69
|
|
$
|
0.84
|
|
$
|
0.76
|
|
$
|
1.26
|
|
a
|
On a pre-tax basis, includes charges for the quarter ended January 31, 2017 of:
|
i.
|
$25.4 million
, which reduced net earnings per diluted share by
$0.13
, associated with an impairment charge related to software costs capitalized in connection with the development of a new finished goods inventory management and merchandising information system (see "Note B. Summary of Significant Accounting Policies" and "Note E. Property, Plant and Equipment"); and
|
ii.
|
$12.6 million
, which reduced net earnings per diluted share by
$0.06
, associated with impairment charges related to financing arrangements with diamond mining and exploration companies (see "Note B. Summary of Significant Accounting Policies" and "Note J. Commitments and Contingencies").
|
|
2015 Quarters Ended*
|
|
||||||||||
(in millions, except per share amounts)
|
April 30
|
|
July 31
b
|
|
October 31
|
|
January 31
c
|
|
||||
Net sales
|
$
|
962.4
|
|
$
|
990.5
|
|
$
|
938.2
|
|
$
|
1,213.6
|
|
Gross profit
|
569.0
|
|
593.0
|
|
564.5
|
|
764.8
|
|
||||
Earnings from operations
|
170.0
|
|
172.8
|
|
156.4
|
|
260.9
|
|
||||
Net earnings
|
104.9
|
|
104.9
|
|
91.0
|
|
163.2
|
|
||||
Net earnings per share:
|
|
|
|
|
||||||||
Basic
|
$
|
0.81
|
|
$
|
0.81
|
|
$
|
0.71
|
|
$
|
1.28
|
|
Diluted
|
$
|
0.81
|
|
$
|
0.81
|
|
$
|
0.70
|
|
$
|
1.28
|
|
b
|
On a pre-tax basis, includes a charge of
$9.6 million
for the quarter ended July 31, 2015, which reduced net earnings per diluted share by
$0.05
, associated with an impairment charge related to a financing arrangement with Koidu Limited (see "Note B. Summary of Significant Accounting Policies" and "Note J. Commitments and Contingencies").
|
c
|
On a pre-tax basis, includes charges for the quarter ended January 31, 2016 of:
|
i.
|
$28.3 million
, which reduced net earnings per diluted share by
$0.14
, associated with an impairment charge related to a financing arrangement with Koidu Limited (see "Note B. Summary of Significant Accounting Policies" and "Note J. Commitments and Contingencies"); and
|
ii.
|
$8.8 million
, which reduced net earnings per diluted share by
$0.04
, associated with severance related to staffing reductions and subleasing of certain office space for which only a portion of the Company's future rent obligations will be recovered (see "Note J. Commitments and Contingencies").
|
*
|
The sum of quarterly amounts may not agree with full year amounts due to rounding.
|
|
|
|
Date: March 17, 2017
|
|
TIFFANY & CO.
|
|
|
(Registrant)
|
|
|
|
|
|
By: /s/ Michael J. Kowalski
|
|
|
Michael. J. Kowalski
|
|
|
Chairman of the Board and Interim Chief Executive Officer
|
By:
|
/s/ Michael J. Kowalski
|
|
By:
|
/s/ Mark J. Erceg
|
|
Michael J. Kowalski
|
|
|
Mark J. Erceg
|
|
Chairman of the Board and
|
|
|
Executive Vice President,
|
|
Interim Chief Executive Officer
|
|
|
Chief Financial Officer
|
|
(Principal Executive Officer) (Director)
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ John S. Barresi
|
|
By:
|
/s/ Rose Marie Bravo
|
|
John S. Barresi
|
|
|
Rose Marie Bravo
|
|
Vice President, Controller
|
|
|
Director
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Gary E. Costley
|
|
By:
|
/s/ Roger N. Farah
|
|
Gary E. Costley
|
|
|
Roger N. Farah
|
|
Director
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Lawrence K. Fish
|
|
By:
|
/s/ Abby F. Kohnstamm
|
|
Lawrence K. Fish
|
|
|
Abby F. Kohnstamm
|
|
Director
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ James E. Lillie
|
|
By:
|
/s/ Charles K. Marquis
|
|
James E. Lillie
|
|
|
Charles K. Marquis
|
|
Director
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Peter W. May
|
|
By:
|
/s/ William A. Shutzer
|
|
Peter W. May
|
|
|
William A. Shutzer
|
|
Director
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robert S. Singer
|
|
By:
|
/s/ Francesco Trapani
|
|
Robert S. Singer
|
|
|
Francesco Trapani
|
|
Director
|
|
|
Director
|
Exhibit No. Description
|
|
10.5
|
Five Year Credit Agreement dated as of October 7, 2014 by and among Registrant and each other Subsidiary of Registrant that is a Borrower and is a signatory thereto and Bank of America, N.A., as Administrative Agent, and various lenders party thereto. Incorporated by reference from Exhibit 10.39 filed with Registrant’s Report on Form 8-K dated October 10, 2014.
|
|
|
10.6
|
Amended and Restated Note Purchase and Private Shelf Agreement dated as of July 25, 2012 by and among Registrant and various institutional note purchasers with respect to Registrant’s $100 million principal amount of 9.05% Series A Senior Notes due December 23, 2015, $150 million principal amount of 4.40% Series B-P Senior Notes due July 25, 2042 and private shelf facility. Incorporated by reference from Exhibit 10.155 filed with Registrant’s Report on Form 8-K dated July 27, 2012.
|
|
|
10.6a
|
Amendment dated as of January 14, 2014 to the Amended and Restated Note Purchase and Private Shelf Agreement (see Exhibit 10.6 above) by and among Registrant, and various institutional note purchasers. Incorporated by reference from Exhibit 10.157 filed with Registrant’s Report on Form 8-K dated January 17, 2014.
|
|
|
10.7
|
Amended and Restated Note Purchase and Private Shelf Agreement dated as of July 25, 2012 by and among Registrant and various institutional note purchasers with respect to Registrant’s $50 million principal amount of 10.0% Series A Senior Notes due April 9, 2018, $100 million principal amount of 4.40% Series B-M Senior Notes due July 25, 2042 and up to $50 million private shelf facility. Incorporated by reference from Exhibit 10.159 filed with Registrant’s Report on Form 8-K dated July 27, 2012.
|
|
|
10.7a
|
Amendment dated as of January 14, 2014 to the Amended and Restated Note Purchase and Private Shelf Agreement, dated as of July 25, 2012 (see Exhibit 10.7 above), by and among Registrant and various institutional note purchasers. Incorporated by reference from Exhibit 10.161 filed with Registrant’s Report on Form 8-K dated January 17, 2014.
|
|
|
10.8
|
Note Purchase Agreement dated as of August 26, 2016 by and between Registrant and the institutional note purchasers with respect to Registrant’s ¥ 10,000,000,000 principal amount of 0.78% Senior Notes due August 26, 2026. Incorporated by reference from Exhibit 10.37 filed with Registrant’s Report on Form 8-K dated September 1, 2016.
|
|
|
10.9
|
Amortising term loan facility agreement dated March 30, 2011 between and among Koidu Holdings S.A. (as Borrower), BSG Resources Limited (as Guarantor) and Laurelton Diamonds, Inc. (as Original Lender). Incorporated by reference from Exhibit 10.163 filed with Registrant’s Report on Form 8-K dated March 30, 2011.
|
|
|
10.9a
|
Amendment Agreement dated as of May 10, 2011 with respect to the Amortising Term Loan Facility Agreement (see Exhibit 10.9 above) between and among Koidu Holdings S.A. (as Borrower), BSG Resources Limited (as Guarantor) and Laurelton Diamonds, Inc. (as Original Lender). Incorporated by reference from Exhibit 10.15a filed with Registrant’s Report on Form 10-K dated March 28, 2013.
|
|
|
10.9b
|
Second Amendment Agreement dated as of February 12, 2013 with respect to the Amortising Term Loan Facility Agreement (see Exhibit 10.9 above) between and among Koidu Limited (as Borrower), BSG Resources Limited (as Guarantor) and Laurelton Diamonds, Inc. (as Original Lender). Incorporated by reference from Exhibit 10.15b filed with Registrant’s Report on Form 10-K dated March 28, 2013.
|
|
|
10.9c
|
Third Amendment Agreement dated as of March 29, 2013 with respect to the Amortising Term Loan Facility Agreement (see Exhibit 10.9 above) between and among Koidu Limited (as Borrower), BSG Resources Limited (as Guarantor) and Laurelton Diamonds, Inc. (as Original Lender). Incorporated by reference from Exhibit 10.15c filed with Registrant’s Report on Form 8-K dated April 2, 2013.
|
|
|
Exhibit No. Description
|
|
10.9d
|
Fourth Amendment Agreement dated as of March 31, 2014 with respect to the Amortising Term Loan Facility Agreement (see Exhibit 10.9 above) between and among Koidu Limited (as Borrower), BSG Resources Limited (as Guarantor) and Laurelton Diamonds, Inc. (as Original Lender). Incorporated by reference from Exhibit 10.15d filed with Registrant’s Report on Form 8-K dated March 31, 2014.
|
|
|
10.9e
|
Fifth Amendment Agreement dated as of April 30, 2015 with respect to the Amortising Term Loan Facility Agreement (see Exhibit 10.9 above) between and among Koidu Limited, Octea Limited, BSG Resources Limited and Laurelton Diamonds, Inc. Incorporated by reference from Exhibit 10.14e filed with Registrant’s Report on Form 8-K dated May 6, 2015.
|
|
|
10.9f
|
Sixth Amendment Agreement dated as of October 10, 2016 with respect to the Amortising Term Loan Facility Agreement (see Exhibit 10.9 above) between and among Koidu Limited, Octea Limited, BSG Resources Limited and Laurelton Diamonds, Inc.
|
|
|
10.10
|
Credit Agreement dated as of July 11, 2016 by and among Tiffany & Co. (Shanghai) Commercial Company Limited, Bank of America, N.A., Shanghai Branch and Mizuho Bank (China), Ltd. as Jointed Coordinators, Mandated Lead Arrangers and Bookrunners, Mizuho Bank (China), Ltd. as Facility Agent and certain other banks and financial institutions party thereto as original lenders. Incorporated by reference from Exhibit 10.15 filed with Registrant’s Report on Form 8-K dated July 15, 2016.
|
|
|
10.11
|
Guaranty Agreement dated as of July 11, 2016, with respect to the Credit Agreement (see Exhibit 10.10 above) by and between Registrant and Mizuho Bank (China), Ltd. as Facility Agent. Incorporated by reference from Exhibit 10.16 filed with Registrant’s Report on Form 8-K dated July 15, 2016.
|
|
|
10.12
|
Cooperation Agreement, dated February 20, 2017, between JANA Partners LLC and Registrant. Incorporated by reference from Exhibit 10.37 filed with Registrant’s Report on Form 8-K dated February 21, 2017.
|
|
|
10.13
|
Cooperation Agreement, dated February 20, 2017, between Francesco Trapani and Registrant. Incorporated by reference from Exhibit 10.38 filed with Registrant’s Report on Form 8-K dated February 21, 2017.
|
|
|
12.1
|
Ratio of Earnings to Fixed Charges.
|
|
|
14.1
|
Code of Business and Ethical Conduct. Incorporated by reference from Exhibit 14.1 filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
21.1
|
Subsidiaries of Registrant.
|
|
|
23.1
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.
|
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
Exhibit No. Description
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
The following financial information from Registrant’s Annual Report on Form 10-K for the fiscal year ended January 31, 2017, filed with the SEC, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Earnings; (iii) the Consolidated Statements of Comprehensive Earnings; (iv) the Consolidated Statements of Stockholders’ Equity; (v) the Consolidated Statements of Cash Flows; (vi) the Notes to the Consolidated Financial Statements; and (vii) Schedule II - Valuation and Qualifying Accounts and Reserves.
|
Exhibit No. Description
|
|
10.14
|
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.
|
|
|
10.15
|
Tiffany and Company Executive Deferral Plan originally made effective October 1, 1989, as amended and restated effective January 19, 2017. Incorporated by reference from Exhibit 10.18 filed with Registrant’s Report on Form 8-K dated January 25, 2017.
|
|
|
10.16
|
Registrant's Amended and Restated Retirement Plan for Non-Employee Directors originally made effective January 1, 1989, as amended through January 21, 1999. Incorporated by reference from Exhibit 10.108 filed with Registrant's Annual Report on Form 10-K for the Fiscal Year ended January 31, 1999.
|
|
|
10.17
|
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.
|
|
|
10.18
|
1994 Tiffany and Company Supplemental Retirement Income Plan, Amended and Restated as of March 17, 2016. Incorporated by reference from Exhibit 10.21 filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
10.19
|
Form of 2009 Retention Agreement between and among Registrant and Tiffany and Company 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.
|
|
|
10.20
|
Summary of Executive Long Term Disability Plan available to executive officers. Incorporated by reference from Exhibit 10.24 filed with Registrant’s Report on Form 10-K dated March 28, 2013.
|
|
|
10.20a
|
Group Long Term Disability Insurance Policy issued by First Unum Life Insurance, Policy No. 533717 001. Incorporated by reference from Exhibit 10.24a filed with Registrant’s Report on Form 10-K dated March 28, 2013.
|
|
|
10.20b
|
Individual Disability Insurance Policy issued by Provident Life and Casualty Insurance Company. Incorporated by reference from Exhibit 10.24b filed with Registrant’s Report on Form 10-K dated March 28, 2013.
|
Exhibit No. Description
|
|
10.20c
|
Individual Disability Insurance Policy issued by Lloyd’s of London. Incorporated by reference from Exhibit 10.24c filed with Registrant’s Report on Form 10-K dated March 28, 2013.
|
|
|
10.21
|
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.
|
|
|
10.22
|
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 19, 2017. Incorporated by reference from Exhibit 10.25 filed with Registrant’s Report on Form 8-K dated January 25, 2017.
|
|
|
10.23
|
Registrant’s 2005 Employee Incentive Plan Amended and Adopted as of May 21, 2009. Incorporated by reference from Exhibit 10.28b filed with Registrant’s Report on Form 10-K dated March 28, 2013.
|
|
|
10.23a
|
Form of Fiscal 2014 Cash Incentive Award Agreement for certain executive officers as adopted on March 19, 2014 under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.139d filed with Registrant’s Report on Form 8-K dated March 21, 2014.
|
|
|
10.23b
|
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 10.141a filed with Registrant’s Report on Form 8-K dated May 23, 2005.
|
|
|
10.23c
|
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.
|
|
|
10.23d
|
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.
|
|
|
10.23e
|
Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.28n filed with Registrant’s Report on Form 8-K dated September 24, 2013.
|
|
|
10.23f
|
Terms of Restricted Stock Grant (Non-Transferable) under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.28o filed with Registrant’s Report on Form 8-K dated September 24, 2013.
|
|
|
10.23g
|
Terms of Time-Vesting Restricted Stock Unit Grant to executive officers as adopted on November 20, 2013 under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.28p filed with Registrant’s Report on Form 8-K dated March 21, 2014.
|
|
|
10.23h
|
Terms of Performance-Based Restricted Stock Unit Grants to executive officers, effective January 15, 2014, under Registrant’s 2005 Employee Incentive Plan. Incorporated by reference from Exhibit 10.28s filed with Registrant’s Report on Form 8-K dated September 19, 2014.
|
Exhibit No. Description
|
|
10.23i
|
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-Vesting Restricted Unit Awards and Certain Non-Qualified Retirement Contributions made to other officers of Registrant’s affiliated companies pursuant to Registrant’s 2005 Employee Incentive Plan and pursuant to the Tiffany and Company Deferral Plan. Incorporated by reference from Exhibit 10.28r filed with Registrant’s Report on Form 8-K dated March 21, 2014.
|
|
|
10.23j
|
Terms of 2014 Amended and Restated Performance-Based Restricted Stock Unit Grant for Michael J. Kowalski. Incorporated by reference from Exhibit 10.27s filed with Registrant’s Report on Form 8-K dated March 24, 2015.
|
|
|
10.23k
|
Terms of 2015 Amended and Restated Performance-Based Restricted Stock Unit Grant for Michael J. Kowalski. Incorporated by reference from Exhibit 10.27t filed with Registrant’s Report on Form 8-K dated March 24, 2015.
|
|
|
10.24
|
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.
|
|
|
10.24a
|
Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 1998 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.
|
|
|
10.25
|
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.
|
|
|
10.25a
|
Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2008 Directors Equity Compensation Plan. Incorporated by reference from Exhibit 10.30a filed with Registrant’s Report on Form 10-K dated March 28, 2013.
|
|
|
10.25b
|
Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2008 Directors Equity Compensation Plan, effective May 26, 2016. Incorporated by reference from Exhibit 10.28c filed with Registrant’s Report on Form 8-K dated June 2, 2016.
|
|
|
10.25c
|
Terms of Restricted Stock Unit Grant under Registrant’s 2008 Directors Equity Compensation Plan, effective May 26, 2016. Incorporated by reference from Exhibit 10.28d filed with Registrant’s Report on Form 8-K dated June 2, 2016.
|
|
|
10.25d
|
Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2008 Directors Equity Compensation Plan, effective March 16, 2017.
|
|
|
10.25e
|
Terms of Restricted Stock Unit Grant under Registrant’s 2008 Directors Equity Compensation Plan, effective March 16, 2017.
|
|
|
10.26
|
Registrant’s 2014 Employee Incentive Plan, amended and restated as of March 16, 2016. Incorporated by reference from Exhibit 10.29 filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
10.26a
|
Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2014 Employee Incentive Plan. Incorporated by reference from Exhibit 10.31a filed with Registrant’s Report on Form 8-K dated July 18, 2014.
|
|
|
Exhibit No. Description
|
|
10.26b
|
Terms of Cliff-Vesting Restricted Stock Grant (Non-Transferable) under Registrant’s 2014 Employee Incentive Plan. Incorporated by reference from Exhibit 10.31b filed with Registrant’s Report on Form 8-K dated July 18, 2014.
|
|
|
10.26c
|
Terms of Tranche-Vesting Restricted Stock Grant (Non-Transferable) under Registrant’s 2014 Employee Incentive Plan. Incorporated by reference from Exhibit 10.31c filed with Registrant’s Report on Form 8-K dated July 18, 2014.
|
|
|
10.26d
|
Terms of Time-Vesting Restricted Stock Grant (Non-Transferable) under Registrant’s 2014 Employee Incentive Plan. Incorporated by reference from Exhibit 10.31d filed with Registrant’s Report on Form 8-K dated July 18, 2014.
|
|
|
10.26e
|
Amended and Restated Terms of Performance-Based Restricted Stock Unit Grant (Non-Transferable) to executive officers under Registrant’s 2014 Employee Incentive Plan, effective January 14, 2015.
|
|
|
10.26f
|
Form of Fiscal 2016 Cash Incentive Award Agreement for certain executive officers as adopted on March 16, 2016 under Registrant’s 2014 Employee Incentive Plan. Incorporated by reference from Exhibit 10.29e filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
10.26g
|
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-Vesting Restricted Unit Awards and Certain Non-Qualified Retirement Contributions made to other officers of Registrant’s affiliated companies pursuant to Registrant’s 2014 Employee Incentive Plan and pursuant to the Tiffany and Company Executive Deferral Plan. Incorporated by reference from Exhibit 10.29f filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
10.26h
|
Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2014 Employee Incentive Plan, as revised March 16, 2016. Incorporated by reference from Exhibit 10.29g filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
10.26i
|
Terms of Tranche-Vesting Restricted Stock Grant (Non-Transferable) under Registrant’s 2014 Employee Incentive Plan, as revised March 16, 2016. Incorporated by reference from Exhibit 10.29j filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
10.26j
|
Terms of Time-Vesting Restricted Stock Grant (Non-Transferable) under Registrant’s 2014 Employee Incentive Plan, as revised March 16, 2016. Incorporated by reference from Exhibit 10.29k filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
10.26k
|
Form of Cash Incentive Award Agreement for executive officers as adopted on January 19, 2017 under Registrant’s 2014 Employee Incentive Plan. Incorporated by reference from Exhibit 10.29l filed with Registrant’s Report on Form 8-K dated January 25, 2017.
|
|
|
10.26l
|
Form of Non-Competition and Confidentiality Covenants for use in connection with Performance-Based Restricted Stock Unit Grants to Registrant’s executive officers, Time-Vesting Restricted Stock Unit Grants, Stock Option Awards and certain non-qualified retirement contributions made to executive officers and certain other officers of Registrant’s affiliated companies pursuant to Registrant’s 2014 Employee Incentive Plan, the Tiffany and Company Executive Deferral Plan and the 2004 Tiffany and Company Un-funded Retirement Income Plan to Recognize Compensation in Excess of Internal Revenue Code Limits. Incorporated by reference from Exhibit 10.29m filed with Registrant’s Report on Form 8-K dated January 25, 2017.
|
|
|
10.26m
|
Terms of Stock Option Award (Transferable Non-Qualified Option) under Registrant’s 2014 Employee Incentive Plan, as revised January 19, 2017. Incorporated by reference from Exhibit 10.29n filed with Registrant’s Report on Form 8-K dated January 25, 2017.
|
Exhibit No. Description
|
|
|
|
10.26n
|
Terms of Performance-Based Restricted Stock Unit Grant (Non-Transferable) to executive officers under Registrant’s 2014 Employee Incentive Plan, as revised January 19, 2017. Incorporated by reference from Exhibit 10.29o filed with Registrant’s Report on Form 8-K dated January 25, 2017.
|
|
|
10.26o
|
Terms of Restricted Stock Unit Grant (Non-Transferable) under Registrant’s 2014 Employee Incentive Plan, as revised January 19, 2017. Incorporated by reference from Exhibit 10.29p filed with Registrant’s Report on Form 8-K dated January 25, 2017.
|
|
|
10.26p
|
Terms of Stock Option Award (Transferable Non-Qualified Option) granted to Michael J. Kowalski under Registrant’s 2014 Employee Incentive Plan on February 15, 2017. Incorporated by reference from Exhibit 10.39 filed with Registrant’s Report on Form 8-K/A dated February 22, 2017.
|
|
|
10.27
|
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.
|
|
|
10.28
|
Employment offer letter, dated as of March 7, 2014, between Ralph Nicoletti and Tiffany and Company. Incorporated by reference from Exhibit 10.33 filed with the Registrant’s Report on Form 10-K dated March 20, 2015.
|
|
|
10.29
|
Employment offer letter, dated as of September 7, 2016, between Mark J. Erceg and Tiffany and Company.
|
|
|
10.30
|
Employment offer letter, dated as of April 18, 2014, between Jean-Marc Bellaiche and Tiffany and Company. Incorporated by reference from Exhibit 10.32 to Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2016.
|
|
|
10.31
|
Employment offer letter, dated as of December 19, 2014, between Jennifer de Winter and Tiffany and Company. Incorporated by reference from Exhibit 10.33 to Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2016.
|
|
|
10.32
|
Employment offer letter, dated as of June 15, 2015, between Philippe Galtie and Tiffany and Company.
|
|
|
10.33
|
Form of 2016 Retention Agreement with Registrant and Tiffany and Company. Incorporated by reference from Exhibit 10.34 filed with Registrant’s Report on Form 8-K dated March 22, 2016.
|
|
|
10.34
|
Share Ownership Policy for Executive Officers and Directors, Amended and Restated as of November 19, 2014. Incorporated by reference from Exhibit 10.152 filed with Registrant’s Report on Form 8-K dated December 1, 2014.
|
|
|
10.35
|
Separation Agreement and Release, dated as of March 6, 2017, by and among Registrant, Tiffany and Company and Frederic Cumenal. Incorporated by reference from Exhibit 10.41 filed with the Registrant’s Report on Form 8-K dated March 6, 2017.
|
10.36
|
Form of Retention Agreement with Registrant and Tiffany and Company, adopted March 15, 2017.
|
|
|
10.37
|
Corporate Governance Principles, amended and restated effective March 16, 2017. Incorporated by reference from Exhibit 10.42 to Registrant’s Report on Form 8-K dated March 16, 2017.
|
Column A
|
Column B
|
Column C
|
Column D
|
|
Column E
|
|||||||||||
|
|
Additions
|
|
|
|
|||||||||||
Description
|
Balance at beginning of period
|
|
Charged to costs and expenses
|
|
Charged to other accounts
|
|
Deductions
|
|
|
Balance at end
of period
|
|
|||||
Year Ended January 31, 2017:
|
|
|
|
|
|
|
||||||||||
Reserves deducted from assets:
|
|
|
|
|
|
|
||||||||||
Accounts receivable allowances:
|
|
|
|
|
|
|
||||||||||
Doubtful accounts
|
$
|
3.2
|
|
$
|
3.8
|
|
$
|
—
|
|
$
|
5.1
|
|
a
|
$
|
1.9
|
|
Sales returns
|
8.3
|
|
2.5
|
|
—
|
|
1.2
|
|
b
|
9.6
|
|
|||||
Allowance for inventory liquidation
and obsolescence
|
59.2
|
|
19.2
|
|
—
|
|
13.0
|
|
c
|
65.4
|
|
|||||
Allowance for inventory shrinkage
|
1.2
|
|
0.5
|
|
—
|
|
0.7
|
|
d
|
1.0
|
|
|||||
Deferred tax valuation allowance
|
19.5
|
|
5.0
|
|
—
|
|
0.4
|
|
e
|
24.1
|
|
Column A
|
Column B
|
Column C
|
Column D
|
|
Column E
|
|||||||||||
|
|
Additions
|
|
|
|
|||||||||||
Description
|
Balance at beginning of period
|
|
Charged to costs and expenses
|
|
Charged to other accounts
|
|
Deductions
|
|
|
Balance at end
of period
|
|
|||||
Year Ended January 31, 2016:
|
|
|
|
|
|
|
||||||||||
Reserves deducted from assets:
|
|
|
|
|
|
|
||||||||||
Accounts receivable allowances:
|
|
|
|
|
|
|
||||||||||
Doubtful accounts
|
$
|
1.8
|
|
$
|
4.4
|
|
$
|
—
|
|
$
|
3.0
|
|
a
|
$
|
3.2
|
|
Sales returns
|
8.8
|
|
3.5
|
|
—
|
|
4.0
|
|
b
|
8.3
|
|
|||||
Allowance for inventory liquidation
and obsolescence
|
63.2
|
|
25.4
|
|
—
|
|
29.4
|
|
c
|
59.2
|
|
|||||
Allowance for inventory shrinkage
|
2.2
|
|
0.8
|
|
—
|
|
1.8
|
|
d
|
1.2
|
|
|||||
Deferred tax valuation allowance
|
16.2
|
|
5.3
|
|
—
|
|
2.0
|
|
e
|
19.5
|
|
Column A
|
Column B
|
Column C
|
Column D
|
|
Column E
|
|||||||||||
|
|
Additions
|
|
|
|
|||||||||||
Description
|
Balance at beginning of period
|
|
Charged to costs and expenses
|
|
Charged to other accounts
|
|
Deductions
|
|
|
Balance at end
of period
|
|
|||||
Year Ended January 31, 2015:
|
|
|
|
|
|
|
||||||||||
Reserves deducted from assets:
|
|
|
|
|
|
|
||||||||||
Accounts receivable allowances:
|
|
|
|
|
|
|
||||||||||
Doubtful accounts
|
$
|
1.9
|
|
$
|
1.9
|
|
$
|
—
|
|
$
|
2.0
|
|
a
|
$
|
1.8
|
|
Sales returns
|
8.5
|
|
1.9
|
|
—
|
|
1.6
|
|
b
|
8.8
|
|
|||||
Allowance for inventory liquidation
and obsolescence
|
64.1
|
|
33.6
|
|
—
|
|
34.5
|
|
c
|
63.2
|
|
|||||
Allowance for inventory shrinkage
|
1.5
|
|
2.6
|
|
—
|
|
1.9
|
|
d
|
2.2
|
|
|||||
Deferred tax valuation allowance
|
17.7
|
|
4.0
|
|
—
|
|
5.5
|
|
e
|
16.2
|
|
RESTRICTED STOCK
UNIT TERMS
Effective March 16, 2017
|
Tiffany & Co. 2008 Directors Equity Plan, Restricted Stock Unit Terms, March 16, 2017
|
2
|
Tiffany & Co. 2008 Directors Equity Plan, Restricted Stock Unit Terms, March 16, 2017
|
3
|
Tiffany & Co. 2008 Directors Equity Plan, Restricted Stock Unit Terms, March 16, 2017
|
4
|
(i)
|
Any Person or group (as defined in Rule 13d-5 under the Exchange Act) of Persons (excluding (i) Parent or any of its Affiliates, (ii) a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) a corporation owned, directly or indirectly by stockholders of Parent in substantially the same proportions as their ownership of Parent, or (v) any surviving or resulting entity or ultimate parent entity resulting from a reorganization, merger, consolidation or other corporate transaction referred to in clause (iii) below that does not constitute a Change in Control under clause (iii) below) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Parent representing thirty-five percent (35%) or more of the combined voting power of Parent’s then outstanding securities entitled to vote in the election of directors of Parent;
|
(ii)
|
If the individuals who, as of March 16, 2016, constitute the Parent Board (such individuals, the “Incumbent Board”) cease for any reason to constitute a majority of the Parent Board, provided that any person becoming a director subsequent to such date whose election, or nomination for election by the Parent’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board;
|
(iii)
|
The consummation of a reorganization, merger, consolidation or other corporate transaction involving Parent, in each case with respect to which the stockholders of Parent immediately prior to the consummation of such transaction would not, immediately after the consummation of such transaction, own more than fifty percent (50%) of the combined voting power of the surviving or resulting Person or ultimate parent entity resulting from such transaction, as the case may be; or
|
(iv)
|
Assets representing fifty percent (50%) or more of the consolidated assets of Parent and its subsidiaries are sold, liquidated or distributed in a transaction (or series of transactions within a twelve (12) month period), other than such a sale or disposition immediately after which such assets will be owned directly or indirectly by the stockholders of Parent in substantially the same proportions as their ownership of the common stock of Parent immediately prior to such sale or disposition.
|
Tiffany & Co. 2008 Directors Equity Plan, Restricted Stock Unit Terms, March 16, 2017
|
5
|
Tiffany & Co. 2008 Directors Equity Plan, Restricted Stock Unit Terms, March 16, 2017
|
6
|
2015
PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT
Terms
|
(a)
|
The Performance Portion shall be
0%
of the Stock Units if the Earnings Threshold is not attained over the Performance Period.
|
(b)
|
Subject to reduction pursuant to subsection (c) below, if the Earnings Threshold has been attained over the Performance Period, the Performance Portion shall be
100%
of the Stock Units.
|
(c)
|
If the Earnings Threshold has been attained over the Performance Period the Committee shall, in its sole discretion, have the right to reduce the Performance Portion to 0% of the Stock Units or any percentage of the Stock Units less than 100%. The Committee may exercise such discretion on any date that occurs following the close of the Performance Period and prior to the Maturity Date. The Committee has provided guidance to Participant with respect to factors, including the Earnings Target, the Earnings Maximum and the ROA Target, that the Committee intends to apply in effecting such a reduction, but the Committee shall not be limited in its discretion to those factors.
|
(a)
|
If the Participant’s Date of Termination occurs by reason of Retirement during any fiscal year of the Performance Period, Stock Units shall vest as provided in Section 3 above (subject to the Participant’s compliance with Section 12 and to all of the terms and conditions set forth in Section 3 above, including, without limitation, the Committee’s exercise of discretion under Section 3(c)) as though the Participant’s Date of Termination had not occurred before the conclusion of the Performance Period; provided, however, that notwithstanding anything herein to the contrary, the Shares or Settlement Value to which Participant may be entitled under
|
(b)
|
if the Participant’s Date of Termination occurs by reason of
death or Disability
within the last fiscal year of the Performance Period, Stock Units shall vest as provided in Section 3 above (subject to all of the terms and conditions thereof, including, without limitation, the Committee’s discretion in Section 3(c) as though the Participant’s Date of Termination had not occurred before the conclusion of the Performance Period;
|
(c)
|
if the Participant’s Date of Termination occurs by reason of
death or Disability
within the second fiscal year of the Performance Period, 34% of Stock Units shall vest on the date of such death or Disability;
|
(d)
|
if the Participant’s Date of Termination occurs by reason of
death or Disability
within the first fiscal year of the Performance Period, 17% of Stock Units shall vest on the date of such death or Disability;
|
(e)
|
if the Participant’s Date of Termination occurs by reason of
Cause
, no Stock Units shall vest;
|
(f)
|
if the Participant’s Date of Termination occurs by reason of Participant’s
voluntary resignation (
other than as contemplated by Section 4(a) hereof
)
, no Stock Units shall vest; and
|
(g)
|
if the Participant’s Date of Termination occurs at the
initiative of the Participant’s employer
(but not for Cause) the Committee reserves the right to vest the Stock Units as follows, but may condition such vesting upon Participant’s release of the Parent and its affiliates from all claims, Participant’s agreement to reasonable non-competition covenants or both:
|
(i)
|
If the Date of Termination occurs in the last fiscal year of the Performance Period, the percentage of the Stock Units the Committee may elect to vest will be based on the Company’s cumulative performance during the first and second fiscal year of the Performance Period, as compared to the Earnings Threshold, Earnings Target, and Earnings Maximum expressed in the Notice of Grant. For purposes of this Section 4(g)(i), the Earnings Threshold, Earnings Target, and Earnings Maximum shall be pro-rated for the cumulative two-year period (66.67%), and applied in a manner consistent with the guidance provided by the Committee as referenced in Section 3(c) above. Achievement of the ROA Target shall not be considered as a factor in determining the number of units to vest.
|
(ii)
|
If the Date of Termination occurs in the second fiscal year of the Performance Period, the percentage of the Stock Units the Committee may elect to vest will be based on the Company’s cumulative performance during the first fiscal year of the Performance Period, as compared to the Earnings Threshold, Earnings Target, and Earnings Maximum expressed in the Notice of Grant. For purposes of this Section 4(g)(ii), the Earnings Threshold, Earnings Target, and Earnings Maximum shall be pro-rated for the cumulative two-year period (33.33%), and
|
(a)
|
All Stock Units shall vest upon a Change in Control Date for a Terminating Transaction unless such Change of Control Date occurs before the start of the Performance Period in which case none of the Stock Units shall vest.
|
(b)
|
In the event of a Change in Control that is not a Terminating Transaction, Stock Units will convert to Time-Based Restricted Stock Units as follows:
|
(i)
|
If the Change in Control occurs in the first or second fiscal year of the Performance Period, then 55% of Stock Units shall convert to Time-Based Restricted Stock Units;
|
(ii)
|
If the Change in Control occurs in the last fiscal year of the Performance Period, the percentage of the Target award number of Stock Units to convert to Time-Based Restricted Stock Units will be based on the Company’s cumulative performance during the first and second fiscal year of the Performance Period, as compared to the Earnings Threshold, Earnings Target, and Earnings Maximum expressed in the Notice of Grant. For purposes of this Section 5(b)(ii), the Earnings Threshold, Earnings Target, and Earnings Maximum shall be pro-rated for the cumulative two-year period (66.67%), and applied in a manner consistent with the guidance provided by the Committee as referenced in Section 3(c) above. Achievement of the ROA Target shall not be considered as a factor in determining the number of units converted to Time-Based Restricted Stock Units.
|
(c)
|
The vesting of the Time-Based Restricted Stock Units converted as described in Section 5(b):
|
(i)
|
Will be accelerated to the Date of Termination if the Participant is subject to Involuntary Termination prior to the Maturity Date.
|
(ii)
|
Will occur on the Maturity Date, if Vesting has not otherwise been accelerated as provided above.
|
(d)
|
For the avoidance of doubt no conversion or vesting shall occur pursuant to Sections 5(b) or 5(c) above if the Change of Control Date occurs before the start of the Performance Period.
|
(e)
|
In the event of vesting pursuant to this Section 5, the Settlement Value of each Vested Unit shall, within thirty days after vesting, be issued and delivered to or for the account of Participant in Shares. As provided for in Section 7 below, the Parent may make such delivery to a Service Provider.
|
(i)
|
Participant’s conviction or plea of
nolo contendere
to a felony or any other crime involving financial impropriety or which would tend to subject Employer or any of its Affiliates to public criticism or materially interfere with Participant’s continued service to Employer;
|
(ii)
|
Participant’s willful violation of the Code of Conduct;
|
(iii)
|
Participant’s willful failure or refusal to perform substantially all such proper and achievable directives issued by Participant’s superior (other than any such failure resulting from Participant’s incapacity due to physical or mental illness, any such actual or anticipated failure resulting from a resignation by Participant for Good Reason, or any such refusal made by Participant in good faith because Participant believes such directives to be illegal, unethical or immoral) after a written demand for substantial performance is delivered to Participant on behalf of Employer, which demand specifically identifies the manner in which Participant has not substantially performed Participant’s duties, and which performance is not substantially corrected by Participant within ten (10) days of receipt of such demand;
|
(iv)
|
Participant’s gross negligence in the performance of Participant’s duties and responsibilities materially injurious to the Employer;
|
(v)
|
Participant’s willful breach of any material obligation that Participant has to Parent or Employer under any written agreement that Participant has with either Parent or Employer;
|
(vi)
|
Participant’s fraud or dishonesty with regard to Employer or any of its Affiliates; or
|
(vii)
|
Participant’s failure to reasonably cooperate in any investigation of alleged misconduct by Participant or by any other employee of Parent, Employer or any Affiliate of Parent or Employer.
|
(i)
|
any Person, or any syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange Act, excluding Parent or any of its Affiliates, a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly by stockholders of Parent in substantially the same proportion as their ownership of Parent, is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Parent representing Thirty-five percent (35%) or more of the combined voting power of Parent’s then outstanding securities entitled to vote in the election of directors of Parent;
|
(ii)
|
if the Incumbent Directors cease to constitute a majority of the Parent Board; provided, however, that no person shall be deemed an Incumbent Director if he or she was appointed or elected to the Parent Board after having been designated to serve on the Parent Board by a Person who has entered into an agreement with Parent to effect a transaction described in clauses (i) through (iv) of this definition;
|
(iii)
|
there occurs a reorganization, merger, consolidation or other corporate transaction involving Parent, in each case with respect to which the stockholders of Parent immediately prior to such transaction do not, immediately after such transaction, own more than Fifty percent (50%) of the combined voting power of the Parent or other corporation resulting from such transaction, as the case may be; or
|
(iv)
|
all or substantially all of the assets of Parent or Employer are sold, liquidated or distributed, except to an Affiliate of Parent;
|
(i)
|
a meaningful and detrimental alteration in Participant’s position or the nature or status of Participant’s responsibilities (including reporting responsibilities) from those in effect immediately before the Change in Control Date;
|
(ii)
|
a material failure by Employer to pay Participant a bonus or incentive award commensurate with the bonus paid others at Participant’s job level (expressed as a percentage of target bonus) unless such failure is justified by clear and objective deficiencies of the business units for which Participant is responsible;
|
(iii)
|
the relocation of the office of Employer where Participant was employed immediately prior to the Change in Control Date to a location which is more than 50 miles away or should Employer require Participant to be based more than 50 miles away from such office (except for required travel on the Employer’s business to an extent substantially consistent with Participant’s customary business travel obligations in the ordinary course of business prior to the Change in Control Date); or
|
(iv)
|
a Substantial Change.
|
(i)
|
the dissolution or liquidation of the Parent;
|
(ii)
|
a reorganization, merger or consolidation of the Parent with one or more Persons as a result of which the Parent goes out of existence or becomes a subsidiary of another Person; or
|
(iii)
|
upon the acquisition of substantially all of the property or more than eighty percent (80%) of the then outstanding stock of the Parent by another Person;
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Annual incentive awards are subject to the execution, and governed by the terms, of a Cash Incentive Award Agreement, the current form of which is attached as Exhibit
A.
As set forth in that Agreement, the amount actually paid in connection with an annual incentive award may be greater or less than the target, and may be $0. Annual incentive awards are paid, if at all, on the basis of Fiscal Year performance by the end of April of the following year. (For instance, the Fiscal 2017 annual incentive award, if paid at all, will be paid on or before April 30, 2018.)
The terms of the Incentive Plan and the Cash Incentive Award Agreement or any other terms and conditions adopted under the Incentive Plan will control with respect to the annual incentive awards described in this letter. The Incentive Plan and such terms and conditions are subject to change and may be modified at any time and from time to time.
As used in this letter, “Fiscal” and “Fiscal Year” refers to February 1 of the year in question through January 31 of the following year.
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Long Term Incentive Award:
|
Under the current practice of the Compensation Committee (the “Committee”), of the Parent’s Board of Directors, which practice is subject to change without notice in the Committee’s sole discretion, long term equity incentive awards are granted to continuing members of senior management at the Committee’s regularly scheduled January meeting. Under that current practice, the total target value of long term equity incentive awards is based on a percentage of base salary, to be determined by the Committee in its sole discretion. The total target value of your long term equity incentive awards has been established as
250%
of your base salary.
The Committee’s current practice (which is subject to change without notice in the Committee’s sole discretion) is to award half of the total target value of long term equity incentive awards as stock options that vest 25% for each year of continuing employment, and half as performance-based restricted stock units that vest following a three-year performance period (the amount of units, if any, that vest being contingent on the Parent’s performance relative to certain performance metrics established by the Committee).
Stock options, performance-based restricted stock units and other long term equity incentive awards (including the special sign-on recommended awards described below) are subject to the Incentive Plan and terms and conditions adopted by the Committee thereunder, which shall be controlling. The Incentive Plan and such terms and conditions may be modified at any time and from time to time.
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Special Sign-On Long Term Incentive Awards
|
At the Committee’s next regularly scheduled meeting following your Commencement Date, the Chief Executive Officer will recommend that the Committee approve the following one-time sign-on awards to you:
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Special Sign-On Time-Vesting Option Grant
|
(i) A stock option award to purchase shares of the Parent’s common stock (“Common Stock”). The per-share value of the shares of Common Stock subject to such award will be determined by the Black-Scholes pricing model; on this basis, the total grant date value of the shares of
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B. In addition, you will be paid a pro-rated portion of the short-term annual incentive award for any uncompleted Fiscal Year (the “Pending Year”) in which the Termination Date occurs, calculated by multiplying (1) the number of days you were employed during the performance period, divided by the total number of days in the performance period, by (2) the annual incentive award that would have been payable to you for the Pending Year if the Termination Date had not occurred, assuming the Committee had exercised its discretion to pay such award (a) as if any individual portion of such award had been achieved at target, and (b) based on the extent of Parent’s achievement of the relevant performance measures as certified by the Committee on the basis of Parent’s publicly reported financial results for the Pending Year (with effect given to any adjustments approved by the Committee as permitted by the Incentive Plan for purposes of determining the annual incentive payments, if any, to Parent’s other executive officers). Notwithstanding the foregoing, if the Termination Date takes place during Fiscal 2016, the only amount payable pursuant to this paragraph B will be the pro-rated portion of the Sign-On Bonus, giving effect to the number of days you were employed during Fiscal 2016. For the avoidance of doubt, you acknowledge that, based on the foregoing calculation, the amount payable to you pursuant to this sub-section B may be greater or less than the pro-rated portion of your target award for the Pending Year, and may be $0. Such payment, if any, will be made to you in the year following the Pending Year, on or before April 30 of such following year, at the same time that annual incentive payments, if any, are made to Parent’s other executive officers.
For the avoidance of doubt, if you are terminated on or after a Change in Control, the benefits described in the above paragraphs (A) and (B) shall not apply. Further, following the second anniversary of your Commencement Date, the Company will have no obligation to provide severance payments to you in connection with your termination from employment, other than in connection with a Change in Control to the extent provided in the Retention Agreement described above.
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Share Ownership Policy:
|
As an executive officer of Parent you will be subject to the Share Ownership Policy adopted by the Board, the current version of which is attached as Exhibit F.
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Covenants:
|
As a condition of your receipt of equity incentive awards and, if applicable, benefits under certain retirement plans, you will be required to sign Non-Competition and Confidentiality Covenants in a form approved by the Committee. The current form of the Covenants is attached as Exhibit G.
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Conditional Offer:
|
This is a conditional offer and is subject to your successful completion of the following background investigations, to the extent permitted by applicable law: employment and professional references, credit check, drug screen (for current use of illegal or unauthorized drugs), criminal conviction check, social security trace, education verification (if applicable), and driver’s license history (if applicable). This offer is also contingent on your satisfactory completion of a Conflict of Interest questionnaire (attached as Exhibit H) and your written representation that you are not
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term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration of the six (6)-month period measured from the date of such “separation from service,” and (ii) the date of your death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 13.7(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed on the first business day following the expiration of the Delay Period to you in a lump sum with interest during the Delay Period at the prime rate, and any remaining payments and benefits due under this letter shall be paid or provided in accordance with the normal payment dates specified for them herein.
With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits, to be provided in any other taxable year, provided, that, this clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of your taxable year following the taxable year in which the expense occurred.
For purposes of Code Section 409A, your right to receive any installment payments pursuant to this letter shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this letter specifies a payment period with reference to a number of days (for instance, “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.
|
Title and Department:
|
Senior Vice President - International
|
|
|
Current Reporting:
|
Frederic Cumenal
|
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Commencement Date:
|
as soon as possible, but no later than August 17, 2015.
If you fail to commence employment by that date, due to failure to obtain necessary work authorization for the U.S., we may employ you through one of our French affiliates, provided that any service thereunder shall comply with applicable law. If you fail to commence employment by that date for any other reason, this offer shall be deemed of no force or effect.
The Company and Executive agree and acknowledge that the Commencement Date is wholly contingent upon the following: Executive's satisfactory completion of background checks required of all new hires of the Company and Executive's cooperation with the Company to obtain a visa allowing Executive to work in the U.S.. The term "
Commencement Date
" refers to the date you actually begin employment with Tiffany, on or before August 17, 2015.
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award shall be determined by the Black-Scholes pricing model; on this basis the total grant date value of the shares of Common Stock underlying the stock option award shall be equal to
$375,000.
The "strike price" (option exercise price) will be the grant date Market Price. The stock options will be scheduled to mature in equal installments (25% each) on the first, second, third and fourth anniversary of the grant date. "
grant date Market Price
" means a per share value of the Common Stock determined by the Corporate Secretary of Parent as the higher of (i) the simple arithmetic mean of the high and low sale price of such stock on the New York Stock Exchange on the grant date or (ii) the closing price on such Exchange on the grant date.
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Special Sign-on Time-Vested Restricted Stock Unit Grant:
|
At the first regularly scheduled meeting of the Committee to occur after the Commencement Date, management will recommend to the Committee and the Committee is expected to grant you, as a one-time sign-on award, restricted stock units (the "
Units
") which will convert on maturity on a one-to-one basis into shares of Common Stock. The Units shall have an aggregate value of
$375,000,
based on the grant date Market Price. The Units will be scheduled to mature in equal installments (25% each) on the first, second, third and fourth anniversary of the grant date.
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Severance Benefits:
|
Please see
Exhibit B
for a copy of the retention agreement applicable to executive officers of Parent in the event of a change in control.
Severance benefits will also be payable to you, absent a Change in Control, during the two year period ending on the second anniversary of the Commencement Date (the "
Initial Two-Year Term
"), as follows. During the Initial Two-Year Term, a lump sum severance benefit will be payable to you if (i) you are involuntarily terminated without Cause, or you resign for Good Reason (see
Exhibit B
for applicable "Cause" and "Good Reason" definitions), (ii) a Change in Control has not occurred prior to the effective date of such termination, and (iii) you sign, return and do not revoke a release of claims in a form provided by the Company. The lump sum severance benefit will equal the sum of the following, paid as soon as practicable, but in no event later than the 60th day following the effective date of termination:
(a) one year of annual salary; plus
(b) the actual short-term incentive award for the last completed fiscal year prior to termination, as determined by the Committee, if such short-term incentive award remains unpaid; plus
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Metropolitan area. Relocation assistance items which are taxable will be grossed-up for tax purposes.
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Benefits:
|
We offer a broad range of benefits and amenities for you and your eligible dependents, including domestic partners. All such benefits are subject to the terms of the benefit plans and are available to employees generally. Health benefits include medical, dental, vision care and prescription drug. Retirement benefits include, subject to eligibility, a 401(k) plan with an employer match, a defined contribution retirement benefit and a defined contribution excess benefit (for earnings above statutory limits if applicable).
In addition to those programs, subject to eligibility, you may be eligible to participate in a deferred compensation plan which provides tax deferred savings for additional retirement income or for planning for future expenses (e.g. dependent college tuition).
We also offer sick days (for your care and that of your family members) and short- and long- term disability including executive long-term disability. Survivor protection benefits include accidental death & dismemberment insurance and business travel
accident insurance. Group Supplemental Term Life Insurance, such as is offered to regular full time employees, may be purchased at your own expense. Health and dependent care spending accounts, long term care, adoption assistance, medical, family and bereavement leave, transportation assistance, education assistance, employee assistance program, health and fitness program reimbursement, milestone and service recognition programs, employee giving program and a generous employee discount are also offered. You will be eligible to participate in these various benefit programs subject to the terms by which all such benefits are provided to Tiffany's regular full time employees and this letter will not afford you additional rights.
If you commence employment with the Company outside of the U.S., you shall be entitled to participate in benefit plans offered to similarly situated executives in such region, until you relocate to the
U.S..
In order to maintain and to further constitute your rights to pension benefits under the French social security and complementary pension schemes, you shall be affiliated during the period of your employment to the following French institutions:
(i) for the social security pension: Caisse des français de l'étranger (CFE), located at BP 100-77950 Rubelles - France; and
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(ii)
for the complementary pension: CRE-IRCAFEX, located at 7, rue de Magdebourg - 75116 Paris - France.]
The Company agrees to make, on your behalf, contributions to these French institutions based on your Base Salary, capped at the maximum amount taken into account by the CRE-IRCAFEX to calculate the contributions. Such Payments shall be taxable to the Executive.
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Vacation Days:
|
You will be eligible for five workweeks of vacation per fiscal year
(February 1 to January 31) and the paid holidays standard to the
U.S.
or France if located there during your visa transition period. You will accrue one twelfth of your annual vacation at the end of each completed month of service (i.e., 1.66 days per month). If you wish to take vacation in excess of the amount you have earned so far in the year, after six months of service, the time can be taken
and then offset by future accruals. You will be eligible for two weeks of vacation during your first six months of employment during fiscal year 2015. All vacation requests are subject to management approval as outlined in the vacation policy or by departmental procedures.
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Personal Days:
|
You will be eligible for two personal days per fiscal year. In your
first year of employment, you will be entitled to one personal day (not applicable while located in France during a visa transition period).
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Life Insurance
:
|
The Company currently provides life insurance benefits to its
executive officers as follows:
- executive officers own whole life policies on their own lives;
- the death benefit is three times annual base salary and target short-term incentive award;
- the Company pays the premium on such policies in an amount sufficient to accumulate cash value;
- premiums are calculated to accumulate a target cash value at age 65;
- the target cash value will allow the policy to remain in force after age 65 without payment of further premiums with a death benefit equivalent to twice the executive officer's ending annual base salary and target short-term incentive or bonus amount; and
- the amount of the premiums paid by the Company is taxable
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income to the executive officer.
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/s/ Victoria Berger-Gross
|
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|
|
Victoria Berger-Gross
Senior Vice President
Global Human Resources
|
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Cc: Frederic Cumenal, CEO
|
/s/ Philippe Galtie
June 19, 2015
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(A)
|
at any time you are not the [insert basic description of Executive's job] of the Successor Entity or the Controlling Entity;
|
(B)
|
any similar material adverse change on or after the Change in Control Date in your position or reporting responsibilities.
|
(a)
|
your Earned Compensation; and
|
(b)
|
subject to Section 8 below, a severance payment equal to the sum of (i) two times your Reference Salary and (ii) two times your Reference Bonus.
|
(i)
|
your claim to that effect is communicated by you to Employer in writing within the lesser of (a) sixty (60) days of the event alleged by you to constitute Good Reason and (b) that number of days remaining in the one-year period following the Change in Control Date;
|
(ii)
|
such event is not corrected by Employer or Parent in a manner which is reasonably satisfactory to you (including full retroactive correction with respect to any monetary matter) within thirty (30) days of the Employer's receipt of such written notice from you. For the avoidance of doubt, you will be required to remain in employment during the aforesaid thirty-day cure period; and
|
(iii)
|
you actually terminate your employment for Good Reason within one (1) year of the Change of Control Date.
|
(a)
|
Assumption by Successor. Parent and Employer will each require their respective successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of either, to expressly assume and to agree to perform this Agreement for your benefit in the same manner and to the same extent that the Parent or the Employer, as the case may be, would be required to perform it if no such succession had taken place; provided, however, that no such assumption shall relieve either the Parent or the Employer of its obligations hereunder, and no failure to expressly assume and agree to perform this Agreement shall relieve any successor of its obligations under this Agreement by operation of law.
|
(b)
|
Enforceability; Beneficiaries. This Agreement shall be binding upon, inure to the benefit of and be enforceable by you (and your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees) and the Parent and Employer and any Person(s) which succeeds to substantially all of the business or assets of the Parent or Employer, whether by means of merger, consolidation, acquisition of all or substantially all of the assets of the Parent or Employer or otherwise, including, without limitation, as a result of a Change in Control or by operation of law.
|
(c)
|
Joint and Several Liability. Parent shall be jointly and severally liable with Employer for all Employer's obligations hereunder and Employer shall be jointly and severally liable with Parent for all Parent's obligations hereunder.
|
(a)
|
Amendments, Waivers, Etc. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing. No waiver by either party hereto any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provision or conditions at the same or at any later or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter here have been made by either party which are not expressly set forth in this Agreement and this Agreement shall supersede all prior agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written, with respect to the subject matter hereof. Without limiting the generality of the foregoing, this Agreement supersedes all prior Retention Agreements between the parties, it being understood and agreed that any such prior Retention Agreement shall be deemed voluntarily surrendered by you in exchange for this Agreement. Parent, acting through the Compensation Committee of the Parent Board, reserves the unilateral right to add additional events that shall constitute a Change in Control to reflect changing techniques for effecting corporate changes in control; such right may not be exercised after the occurrence of such an event.
|
(b)
|
Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
|
(c)
|
Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
|
(d)
|
No Contract of Employment. Nothing in this Agreement shall be construed as giving you any right to be retained in the employ of Employer or Parent nor shall it affect the terms and conditions of your employment with Employer prior to the commencement of the Term hereof. Failing the occurrence of a Change in Control
|
(e)
|
Withholding. Amounts paid to you hereunder shall be subject to all applicable federal, state and local withholding taxes.
|
(f)
|
Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a Benefit Plan which provides otherwise, shall be paid in cash from the general funds of Employer or Parent, and no special or separate fund shall be established, and no other segregation of assets made, to assure payment. You will have no right, title or interest whatsoever in or to any investments which Employer or Parent may make to aid it in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from Employer or Parent hereunder, such right shall be no greater than the right of an unsecured creditor of Parent or Employer, as the case may be.
|
(g)
|
Headings. The headings contained in this Agreement are intended solely for convenience of reference and shall not affect the rights of the parties to this Agreement.
|
(h)
|
Governing Law. The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of New York applicable to contracts entered into and to be performed in this State.
|
(i)
|
Notwithstanding anything herein to the contrary, any benefits and payments provided hereunder that are payable or provided to you in connection with a termination of employment that constitute deferred compensation within the meaning of Section 409A of the Code shall not commence in connection with your termination of employment unless and until you have also incurred a Separation from Service, and unless Parent reasonably determines that such amounts may be provided to you without causing you to incur additional tax obligations under Section 409A of the Code. For the avoidance of doubt, it is intended that payments hereunder comply with or satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code. However, if Parent determines that these payments constitute deferred compensation and you are, on the termination of your service, a Specified Employee of Employer, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A of the Code, the timing of the payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after your Separation from Service or (ii) the date of your death that occurs after your Separation from Service. In no event shall Parent, Employer, or any Affiliate have any liability or obligation with respect to taxes, penalties, interest or other expenses for which you may become liable as a result of the application of Section 409A of the Code.
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a.
|
your conviction or plea of guilty or nolo contendere to a felony or any other crime involving financial impropriety or moral turpitude or which would tend to subject Employer or any of its Affiliates to public criticism or materially interfere with your continued service to Employer;
|
b.
|
your willful violation of the Code of Conduct;
|
c.
|
your willful failure or willful refusal to substantially perform or attempt to substantially perform your duties or all such proper and achievable directives issued by your superior (other than any such failure resulting from your incapacity due to physical or mental illness, any such actual or anticipated failure resulting from a resignation by you for Good Reason, or any such refusal made by you in good faith because you believe such directives to be illegal, unethical or immoral) after you receive a written notice demanding substantial performance and fail to comply within ten (10) days of receipt of such demand;
|
d.
|
your gross negligence in the performance of your duties and responsibilities materially injurious to the Employer;
|
e.
|
your willful breach of any material obligation that you have to Parent or Employer under any written agreement that you have with either Parent or Employer;
|
f.
|
your fraud, dishonesty or theft with regard to Employer or any of its Affiliates;
|
g.
|
your failure to reasonably cooperate in any investigation of alleged misconduct by you or by any other employee of Parent, Employer or any Affiliate of Parent or Employer;
|
h.
|
your death; or
|
i.
|
your Disability.
|
a.
|
Any Person or group (as defined in Rule 13d-5 under the Exchange Act) of Persons (excluding (i) Parent or any of its Affiliates, (ii) a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) a corporation owned, directly or indirectly by stockholders of Parent in substantially the same proportions as their ownership of Parent, or (v) any surviving or resulting entity or ultimate parent entity resulting from a reorganization, merger, consolidation or other corporate transaction referred to in clause (c) below that does not constitute a Change in Control under clause (c) below) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Parent representing thirty-five percent (35%) or more of the combined voting power of Parent’s then outstanding securities entitled to vote in the election of directors of Parent;
|
b.
|
If the individuals who, as of March 16, 2016, constitute the Parent Board (such individuals, the “Incumbent Board”) cease for any reason to constitute a majority of the Board, provided that any person becoming a director subsequent to such date whose election, or nomination for election by the Parent’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board;
|
c.
|
The consummation of a reorganization, merger, consolidation or other corporate transaction involving Parent, in each case with respect to which the stockholders of
|
d.
|
Assets representing 50% or more of the consolidated assets of Parent and its subsidiaries are sold, liquidated or distributed in a transaction (or series of transactions within a twelve (12) month period), other than such a sale or disposition immediately after which such assets will be owned directly or indirectly by the stockholders of Parent in substantially the same proportions as their ownership of the common stock of Parent immediately prior to such sale or disposition.
|
a.
|
if your employment is terminated for Disability, thirty (30) days after a Notice of Termination is given (provided that you shall not have returned to the full-time performance of your duties during such thirty (30) day period);
|
b.
|
if your employment is terminated by Employer in an Involuntary Termination, five (5) days after the date the Notice of Termination is received by you;
|
c.
|
if your employment is terminated by Employer for Cause (other than Disability), the later of the date specified in the Notice of Termination or ten (10) days following the date such Notice is received by you;
|
d.
|
if you resign and specify Good Reason, thirty (30) days after the date your Notice of Termination is received by Employer unless Employer has corrected the matter as provided for in Section 4(c); and
|
e.
|
if you resign and fail to specify Good Reason, the date set forth in your Notice of Termination, which shall be no earlier than ten (10) days after the date such notice is received by Employer.
|
a.
|
any earned but unpaid base salary through your Date of Termination at the rate in effect at the time of the Notice of Termination and any earned bonus or incentive award for any completed fiscal year that remains unpaid;
|
b.
|
all unused vacation time which you may have accrued as of your Date of Termination; and
|
c.
|
a portion of your Reference Bonus pro-rated for your service during the fiscal year in which your Involuntary Termination occurs, calculated on the assumption that all performance targets (including your individual performance targets and sales and earnings targets applicable to the Employer and/or to the Successor Entity) have been or will be achieved.
|
a.
|
a meaningful and detrimental alteration in your position or the nature or status of your responsibilities (including your reporting responsibilities) from those in effect immediately before the Change in Control Date;
|
b.
|
a material failure by Employer to pay you a bonus or incentive award commensurate with the bonus paid other key executives of Employer at your level (expressed as a percentage of your target bonus) unless such failure is justified by clear and objective deficiencies of the business units for which you are responsible;
|
c.
|
the relocation of the office of Employer where you were employed immediately prior to the Change in Control Date to a location which is more than 50 miles away or should Employer require you to be based more than 50 miles away from such office (except for required travel on Employer's business to an extent substantially consistent with your customary business travel obligations in the ordinary course of business prior to the Change in Control Date);
|
d.
|
the failure of Employer and Parent to obtain an express agreement reasonably satisfactory to you from their successors, if any, to assume and agree to perform this Agreement, as contemplated in Section 8(a) of the Agreement; or
|
e.
|
a material breach by Employer or Parent of this Agreement.
|
Stock Option Terms
Effective March 16, 2017
|
(a)
|
Prior to the Expiration Date, the Option may be exercised in whole or in part as to any Covered Shares (but not as to a fractional share) by filing a written notice of exercise with the Corporate Secretary of Parent at its corporate headquarters. Such notice shall specify the number of Covered Shares which Participant elects to purchase (the “Exercised Shares”) and shall be accompanied by a bank-certified check payable to Parent (or other type of check or draft payable to Parent and acceptable to its Corporate Secretary) or confirmation (in a form acceptable to such Corporate Secretary) that payment has been made to Parent in immediately available funds by wire transfer, in each case in the amount of the Exercise Price for the Exercised Shares. The exercise shall be deemed complete on Parent’s receipt of such notice and said check or said confirmation of payment.
|
(b)
|
Alternatively, in lieu of such check or draft, if permitted by Parent and subject to such requirements as Parent may specify (including without limitation requirements consistent with applicable policies concerning insider information), Participant may provide a copy of directions to, or a written acknowledgment from, an Approved Broker that the Approved Broker has been directed to sell, for the account of the owner of the Option, Exercised Shares (or a sufficient portion of the Exercised Shares) acquired upon exercise of the Option, together with an undertaking by the Approved Broker to remit to Parent a sufficient portion of the sale proceeds to pay the Exercise Price for the Exercised Shares. The exercise shall be deemed complete on the trade date of the sale.
|
(c)
|
The Governance Committee may approve other methods of exercise, as provided for in the Plan, before the Option is exercised.
|
Tiffany & Co. 2008 Directors Equity Plan: Stock Option Terms, March 16, 2017
|
2
|
Tiffany & Co. 2008 Directors Equity Plan: Stock Option Terms, March 16, 2017
|
3
|
Tiffany & Co. 2008 Directors Equity Plan: Stock Option Terms, March 16, 2017
|
4
|
(i)
|
Any Person or group (as defined in Rule 13d-5 under the Exchange Act) of Persons (excluding (i) Parent or any of its Affiliates, (ii) a trustee or any fiduciary holding securities under an employee benefit plan of Parent or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) a corporation owned, directly or indirectly by stockholders of Parent in substantially the same proportions as their ownership of Parent, or (v) any surviving or resulting entity or ultimate parent entity resulting from a reorganization, merger, consolidation or other corporate transaction referred to in clause (iii) below that does not constitute a Change in Control under clause (iii) below) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Parent representing thirty-five percent (35%) or more of the combined voting power of Parent’s then outstanding securities entitled to vote in the election of directors of Parent;
|
(ii)
|
If the individuals who, as of March 16, 2016, constitute the Parent Board (such individuals, the “Incumbent Board”) cease for any reason to constitute a majority of the Parent Board, provided that any person becoming a director subsequent to such date whose election, or nomination for election by the Parent’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board;
|
(iii)
|
The consummation of a reorganization, merger, consolidation or other corporate transaction involving Parent, in each case with respect to which the stockholders of Parent immediately prior to the consummation of such transaction would not, immediately after the consummation of such transaction, own more than fifty percent (50%) of the combined voting power of the surviving or resulting Person or ultimate parent entity resulting from such transaction, as the case may be; or
|
(iv)
|
Assets representing fifty percent (50%) or more of the consolidated assets of Parent and its subsidiaries are sold, liquidated or distributed in a transaction (or series of transactions within a twelve (12) month period), other than such a sale or disposition immediately after which such assets will be owned directly or indirectly by the stockholders of Parent in substantially the same proportions as their ownership of the common stock of Parent immediately prior to such sale or disposition.
|
Tiffany & Co. 2008 Directors Equity Plan: Stock Option Terms, March 16, 2017
|
5
|
Tiffany & Co. 2008 Directors Equity Plan: Stock Option Terms, March 16, 2017
|
6
|
DATED
|
10 OCTOBER 2016
|
(1) KOIDU LIMITED
(2) OCTEA LIMITED
(3) BSG RESOURCES LIMITED
(4) LAURELTON DIAMONDS, INC.
|
|
SIXTH AMENDMENT AGREEMENT RELATING TO A
US$50,000,000 AMORTISING TERM LOAN FACILITY
AGREEMENT DATED 30 MARCH 2011
|
|
|
|
|
|
CLAUSE
|
|
PAGE
|
|
||
|
|
|
|||
1
|
Definitions and Interpretation
|
1
|
|
||
2
|
Amendments
|
2
|
|
||
3
|
Continuity and Further Assurance
|
3
|
|
||
4
|
Obligors
|
3
|
|
||
5
|
Existing Security
|
3
|
|
||
6
|
Miscellaneous
|
4
|
|
||
7
|
Governing Law and Jurisdiction
|
4
|
|
||
8
|
Existing Defaults
|
4
|
|
(1)
|
KOIDU LIMITED
(formerly Koidu Holdings S.A.), a company incorporated in the British Virgin Islands with registered number 552189 and which is registered to carry on business in Sierra Leone under registration number C.F.(F) 8/2003 (the “
Original Borrower
”);
|
(2)
|
OCTEA LIMITED
(formerly BSGR Diamonds Ltd.),
a company incorporated in the British Virgin Islands with registered number 615683 (“
Octea
”);
|
(3)
|
BSG RESOURCES LIMITED
,
a company incorporated in Guernsey with registered number 46565 (the “
Guarantor
”); and
|
(4)
|
LAURELTON DIAMONDS, INC.
,
a company incorporated under the laws of the State of Delaware, United States of America with registered number 01-0715717 (the “
Original Lender
”).
|
(A)
|
The Original Borrower, Octea, the Guarantor and the Original Lender are parties to a US$50,000,000 amortising term loan facility agreement dated 30 March 2011, as amended by amendment agreements dated 10 May 2011, 12 February 2013, 29 March 2013, 31 March 2014, and 30 April 2015 (collectively, the “
Facility Agreement
”).
|
(B)
|
In accordance with Clause 29 (
Amendments and waivers
) of the Facility Agreement, the Parties wish to amend the Facility Agreement on the terms and subject to the conditions set out in this Amendment Agreement.
|
1
|
Definitions and Interpretation
|
1.1
|
Definitions
|
1.2
|
Incorporation of Defined Terms
|
1.2.1
|
Terms defined in the Facility Agreement shall, unless otherwise defined herein, have the same meaning in this Amendment Agreement.
|
1.2.2
|
The principles of construction set out in Clause 1.2 (
Construction
) of the Facility Agreement shall have effect as if set out in this Amendment Agreement
mutatis mutandis
.
|
1.2.3
|
This Amendment Agreement is intended to take effect as a deed notwithstanding that certain parties may have executed it under hand only.
|
DM_US 74958733-2.054927.0014
|
1
|
|
1.3
|
Clauses
|
1.3.1
|
In this Amendment Agreement, any reference to a “Clause” is, unless the context otherwise requires, a reference to a Clause to this Amendment Agreement.
|
1.3.2
|
Clause headings are for ease of reference only.
|
1.4
|
Designation as a Finance Document
|
1.5
|
Representations and Warranties
|
1.5.1.
|
The Original Lender has entered into this Amendment Agreement in reliance on the following representations.
|
1.5.2.
|
Each Obligor party hereto hereby represents and warrants on the date of this Amendment Agreement that:
|
(a)
|
the Repeating Representations are true and would also be true if references to the Facility Agreement were construed as references to this Amendment Agreement;
|
(b)
|
no Default is continuing (except for Defaults for which Obligors have already notified the Original Lender) or would occur as a result of entering into this Amendment Agreement; and
|
(c)
|
the entry into and performance by it of, and the transactions contemplated by, this Amendment Agreement does not and will not conflict with any agreement or instrument binding upon it or any of its assets or constitute a default or termination event (however described) under any such agreement or instrument.
|
2
|
AMENDMENTS
|
2.1
|
the Facility Agreement shall be amended as follows:
|
2.1.1
|
deleting the definitions of “Transfer Certificate” and “Transfer Date” in Clause 1.1 (
Definitions
) of the Facility Agreement.
|
2.1.2
|
deleting Schedule 4 (
Form of Transfer Certificate
) to the Facility Agreement.
|
2.1.3
|
the reference to “Clause 20” in Clause 13.1.1(a) of the Facility Agreement shall hereafter be deemed to be a reference to “Clause 21.”
|
2.1.4
|
deleting Clause 21.1 (
Transfers by the Lender
) and Clause 21.2 (
Procedure for transfer
) of the Facility Agreement in their entirety and replacing said Clause 21.1 (
Transfers by the Lender
) with the following:
|
DM_US 74958733-2.054927.0014
|
2
|
|
21.1.1
|
The Existing Lender may transfer at any time by novation all (but not part) of its rights and obligations under the Finance Documents to any other person (the “
New Lender
”).
|
21.1.2
|
Until such time as the Borrower receives written notice with respect to any such transfer, the Borrower may continue to assume that the Existing Lender is the Lender for all purposes hereunder.”
|
3
|
CONTINUITY AND FURTHER ASSURANCE
|
3.1
|
Continuing Obligations
|
3.2
|
Further Assurance
|
4
|
OBLIGORS
|
5
|
EXISTING SECURITY
|
5.1.1
|
any Security created by it under the Transaction Security Documents ranks as a continuing security for the payment and discharge of the Secured Liabilities (as defined in the Transaction Security Documents) including, without limitation, all present and future monies, obligations and liabilities owed by each Obligor to the Lender, whether actual or contingent and whether owed jointly or severally, as principal or surety and/or in any other capacity, under or in connection with the Amended Facility Agreement and extends to the obligations of the Obligors under the Finance Documents (including the Amended Facility Agreement);
|
5.1.2
|
the obligations of the Obligors arising under the Amended Facility Agreement are included in the definition of the Secured Liabilities (as defined in the Transaction Security Documents) subject to any limitations set out in the Transaction Security Documents; and
|
5.1.3
|
any Security created under the Transaction Security Documents shall continue in full force and effect in all respects and the Transaction Security
|
DM_US 74958733-2.054927.0014
|
3
|
|
6
|
MISCELLANEOUS
|
6.1
|
Incorporation of provisions
|
6.2
|
Counterparts
|
7
|
GOVERNING LAW AND JURISDICTION
|
8
|
EXISTING DEFAULTS
|
DM_US 74958733-2.054927.0014
|
4
|
|
The Original Borrower
EXECUTED and DELIVERED as a Deed by
Koidu Limited
acting by its duly authorised director, Peter Driver
|
)
)
)
|
/s/ Peter Driver
|
Octea
EXECUTED and DELIVERED as a Deed by
Octea Limited
acting by its duly authorised director, Peter Driver
|
)
)
)
|
/s/ Peter Driver
|
The Guarantor
SIGNED as a Deed by
for and on behalf of
BSG Resources Limited
acting by its duly authorised director(s)
Director
|
)
)
)
|
/s/ Peter Driver
|
The Original Lender
SIGNED by Andrew W. Hart
for and on behalf of
Laurelton Diamonds, Inc.
|
)
)
)
|
/s/ Andrew W. Hart
|
DM_US 74958733-2.054927.0014
|
5
|
|
|
Years ended January 31,
|
||||||||||||||
(dollars in millions)
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||
|
|
|
|
|
|
||||||||||
Earnings from continuing operations before income taxes
|
$
|
676.6
|
|
$
|
709.9
|
|
$
|
737.5
|
|
$
|
254.9
|
|
$
|
643.6
|
|
Fixed charges, less
capitalized interest
|
126.7
|
|
125.1
|
|
134.8
|
|
133.3
|
|
120.1
|
|
|||||
Total earnings as defined
|
$
|
803.3
|
|
$
|
835.0
|
|
$
|
872.3
|
|
$
|
388.2
|
|
$
|
763.7
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
||||||||||
Interest expense before capitalization of interest
a
|
$
|
43.9
|
|
$
|
45.7
|
|
$
|
58.9
|
|
$
|
59.6
|
|
$
|
55.1
|
|
Estimated interest portion
of rent expense
|
84.7
|
|
80.6
|
|
76.9
|
|
74.5
|
|
65.5
|
|
|||||
Total fixed charges
b
|
$
|
128.6
|
|
$
|
126.3
|
|
$
|
135.8
|
|
$
|
134.1
|
|
$
|
120.6
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
6.2
|
x
|
6.6
|
x
|
6.4
|
x
|
2.9
|
x
|
6.3
|
x
|
a
|
Interest expense does not include interest related to uncertain tax positions and other non-third party indebtedness.
|
b
|
Fixed charges represent interest expense (before interest is capitalized), amortization of deferred financing costs and an appropriate interest factor on operating leases.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Michael J. Kowalski
|
Chairman of the Board and Interim Chief Executive Officer
|
(principal executive officer)
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Mark J. Erceg
|
Executive Vice President
|
Chief Financial Officer
|
(principal financial officer)
|
/s/ Michael J. Kowalski
|
Chairman of the Board and Interim Chief Executive Officer
|
(principal executive officer)
|
/s/ Mark J. Erceg
|
Executive Vice President
|
Chief Financial Officer
|
(principal financial officer)
|