þ
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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 March 28, 2015
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o
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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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13-2622036
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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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650 Madison Avenue, New York, New York
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10022
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Class A Common Stock, $.01 par value
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New York Stock Exchange
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the loss of key personnel, including Mr. Ralph Lauren;
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our ability to achieve anticipated operating enhancements and/or cost reductions from our restructuring plans, including our planned transition to a global brand-based operating structure;
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our ability to successfully implement our anticipated growth strategies and to capitalize on our repositioning initiatives in certain regions and merchandise categories;
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our exposure to currency exchange rate fluctuations from both a transactional and translational perspective, and risks associated with increases in the costs of raw materials, transportation, and labor;
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our ability to secure our facilities and systems and those of our third-party service providers from, among other things, cybersecurity breaches, acts of vandalism, computer viruses, or similar Internet or email events;
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our ability to continue to maintain our brand image and reputation and protect our trademarks;
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the impact of global economic conditions on us, our customers, our suppliers, and our vendors and on our ability and their ability to access sources of liquidity;
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the impact of the volatile state of the global economy or consumer preferences on purchases of premium lifestyle products that we offer for sale and our ability to forecast consumer demand, which could result in a build-up of inventory;
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changes in the competitive marketplace, including the introduction of new products or pricing changes by our competitors, and consolidations, liquidations, restructurings, and other ownership changes in the retail industry;
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a variety of legal, regulatory, tax, political, and economic risks, including risks related to the importation and exportation of products, tariffs, and other trade barriers which our international operations are subject to and other risks associated with our international operations, such as compliance with the Foreign Corrupt Practices Act or violations of other anti-bribery and corruption laws prohibiting improper payments, and the burdens of complying with a variety of foreign laws and regulations, including tax laws, trade and labor restrictions, and related laws that may reduce the flexibility of our business;
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the impact to our business of events of unrest and instability that are currently taking place in certain parts of the world, as well as from any terrorist action, retaliation, and the threat of further action or retaliation;
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our ability to continue to expand or grow our business internationally and the impact of related changes in our customer, channel, and geographic sales mix as a result;
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changes to our effective tax rates;
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changes in our relationships with department store customers and licensing partners;
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our efforts to improve the efficiency of our distribution system and to continue to enhance and upgrade our global information technology systems and our global e-commerce platform;
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our intention to introduce new products or enter into or renew alliances and exclusive relationships;
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our ability to access sources of liquidity to provide for our cash needs, including our debt obligations, payment of dividends, capital expenditures, and potential repurchase of our Class A common stock;
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2
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our ability to open new retail stores, concession shops, and e-commerce sites in an effort to expand our direct-to-consumer presence;
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our ability to make certain strategic acquisitions and successfully integrate the acquired businesses into our existing operations;
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the impact to our business resulting from potential costs and obligations related to the early termination of our long-term, non-cancellable leases;
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the potential impact to the trading prices of our securities if our Class A common stock share repurchase activity and/or cash dividend rate differs from investors' expectations;
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our ability to maintain our credit profile and ratings within the financial community; and
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the potential impact on our operations and on our customers resulting from natural or man-made disasters.
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Item 1.
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Business.
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3
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4
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•
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International Growth;
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Direct-to-Consumer Growth;
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Product Innovation and Brand Extension Growth;
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Investment in Operational Infrastructure;
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Global Talent Development and Management; and
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Strong Financial Management and Cash Flow Reinvestment.
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5
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Apparel
— Products include extensive collections of men's, women's, and children's clothing, which are sold under various brand names, including Ralph Lauren Women's Collection, Purple Label, Black Label, Polo Ralph Lauren, Polo Sport, Double RL, RLX Ralph Lauren, Lauren Ralph Lauren, Ralph by Ralph Lauren, Polo and RLX Golf, Ralph Lauren Childrenswear, Denim & Supply Ralph Lauren, Chaps, Club Monaco, and American Living, among others;
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•
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Accessories
— Products encompass a broad range for both men and women, including footwear, eyewear, watches, fine jewelry, hats, belts, and leathergoods, including handbags and luggage, which are sold under various brand names, including Lauren Ralph Lauren, Double RL, and Club Monaco, among others;
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•
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Home
— Coordinated home products include bedding and bath products, furniture, fabric and wallpaper, lighting, paint, tabletop, and giftware; and
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•
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Fragrance
— Women's fragrance products are sold under our Safari, Ralph Lauren Blue, Lauren, Romance, Midnight Romance, RALPH collection, and Big Pony collection brands. Men's fragrances include Safari, Polo Sport, Polo Green, Polo Blue, Polo Blue Sport, Purple Label, Polo Black, Double Black, Big Pony collection, Polo Red collection, and Polo Supreme Oud.
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6
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7
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8
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Location
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Number of Doors
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The Americas
(a)
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7,308
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Europe
(b)
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5,311
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Asia
(c)
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128
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Total
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12,747
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(a)
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Includes the U.S., Canada, and Latin America.
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(b)
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Includes the Middle East.
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(c)
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Includes Australia and New Zealand.
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9
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Location
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Ralph Lauren Stores
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The Americas
(a)
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58
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Europe
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27
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Asia
(b)
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58
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Total
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143
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(a)
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Includes the U.S. and Canada.
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(b)
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Includes Australia and New Zealand.
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10
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Location
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Factory Stores
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The Americas
(a)
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165
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Europe
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54
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Asia
(b)
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40
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Total
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259
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(a)
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Includes the U.S. and Canada.
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(b)
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Includes Australia.
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Our North American e-commerce sites located at www.RalphLauren.com and www.ClubMonaco.com, as well as our Club Monaco site in Canada located at www.ClubMonaco.ca;
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•
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Our Ralph Lauren
e-commerce sites in Europe, including www.RalphLauren.co.uk (servicing the United Kingdom), www.RalphLauren.fr (servicing Belgium, France, Italy, Luxembourg, the Netherlands, Portugal, and Spain), and www.RalphLauren.de (recently expanded to service Denmark, Estonia, Finland, Latvia, Slovakia, and Sweden, in addition to servicing Austria and Germany); and
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•
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Our Ralph Lauren
e-commerce sites in Asia, including www.RalphLauren.co.jp (servicing Japan), www.RalphLauren.co.kr (servicing South Korea), www.RalphLauren.asia (servicing Hong Kong, Macau, Malaysia, and Singapore), and www.RalphLauren.com.au (servicing Australia and New Zealand).
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11
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Category
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Licensed Products
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Licensing Partners
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Men's Apparel
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Underwear and Sleepwear
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Hanesbrands, Inc.
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Chaps, Lauren, and Ralph Tailored Clothing
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Peerless, Inc.
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Beauty Products
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Fragrances, Cosmetics, Color, and Skin Care
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L'Oreal S.A. (global)
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Accessories
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Eyewear
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Luxottica Group, S.p.A. (global)
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Home
(a)
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Bedding and Bath
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Ichida (Japan) and Kohl's Department Stores, Inc.
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Utility and Blankets
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Hollander Sleep Products LLC and Kohl's Department Stores, Inc.
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Fabric and Wallpaper
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Designers Guild Ltd. and P. Kaufmann, Inc.
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Furniture
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EJ Victor, Inc.
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(a)
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Our Home products are sold under our Ralph Lauren Home, Lauren by Ralph Lauren, and Chaps brands. As of
March 28, 2015
, we had agreements with
eight
domestic and
three
international Home product licensing partners.
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12
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13
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anticipate and respond to changing consumer demands in a timely manner;
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maintain favorable brand recognition, loyalty, and reputation for quality;
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develop and produce high quality products that appeal to consumers;
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appropriately source raw materials at cost-effective prices;
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appropriately price our products;
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provide strong and effective marketing support;
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ensure product availability; and
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obtain additional points of distribution and sufficient retail floor space, and effectively present our products to consumers.
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14
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Geographic Region
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Facility Type
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Facility Location
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Facility
Ownership
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U.S.
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Wholesale and Retail distribution center
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Greensboro, North Carolina
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Owned
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Wholesale distribution center
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High Point, North Carolina
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Leased
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E-commerce distribution center
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High Point, North Carolina
(a)
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Owned
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Distribution center
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Chino Hills, California
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Third-party
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Distribution center
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Miami, Florida
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Third-party
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Canada
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Distribution center
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Toronto, Ontario
(b)
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Third-party
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Europe
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Distribution center
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Parma, Italy
(c)
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Third-party
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Japan
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Distribution center
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Yokohama, Japan
(d)
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Third-party
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South Korea
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Distribution center
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Bugok, South Korea
(e)
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Leased
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Greater China and Southeast Asia
(f)
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Distribution center
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Tuen Mun, Hong Kong
(g)
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Third-party
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Latin America
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Distribution center
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Colón, Panama
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Third-party
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(a)
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This distribution center performs customer order fulfillment for RalphLauren.com and ClubMonaco.com.
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(b)
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This distribution center performs customer order fulfillment for our businesses in Canada, including our e-commerce operations.
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(c)
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This distribution center performs customer order fulfillment for our European businesses, including our e-commerce operations.
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(d)
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This distribution center performs customer order fulfillment for our businesses in Japan, including our e-commerce operations.
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(e)
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This distribution center performs customer order fulfillment for our businesses in South Korea, including our e-commerce operations.
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(f)
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Includes China, Hong Kong, Macau, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.
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(g)
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This distribution center performs customer order fulfillment for our businesses in Greater China and Southeast Asia, Australia, and New Zealand, including our e-commerce operations.
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comprehensive order processing;
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production and design information;
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accounting information; and
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an enterprise view of information for our design, marketing, manufacturing, importing, and distribution functions.
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15
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PURPLE LABEL;
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BLACK LABEL;
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BLUE LABEL;
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16
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DOUBLE RL;
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RRL;
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RLX;
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LAUREN RALPH LAUREN;
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DENIM & SUPPLY RALPH LAUREN;
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PINK PONY;
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LAUREN;
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RALPH;
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CHAPS;
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CLUB MONACO;
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RUGBY;
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AMERICAN LIVING; and
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Various trademarks pertaining to fragrances and cosmetics.
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17
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18
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19
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Ralph Lauren
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Age 75
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Mr. Lauren has been our Chairman of the Board of Directors and Chief Executive Officer since prior to our initial public offering in 1997, and was a member of the Advisory Board of the Board of Directors of our predecessors since their organization. He founded our business in 1967. For over four decades, Mr. Lauren has cultivated the iconography of America into a global lifestyle brand.
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Jackwyn L. Nemerov
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Age 63
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Ms. Nemerov has been our President and Chief Operating Officer since November 2013 and a director of the Company since February 2007. She served as Executive Vice President of the Company from September 2004 through October 2013. Ms. Nemerov was President & Chief Operating Officer of Jones Apparel Group, Inc. from January 1998 until March 2002. Prior to that, Ms. Nemerov was affiliated with Allied Stores, Bernard Chaus, and Gloria Vanderbilt for Murjani. Ms. Nemerov currently serves as a member of the board of governors of The New School University's Parsons School of Design.
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Christopher H. Peterson
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Age 48
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Mr. Peterson has been our President of Global Brands since April 2015. He served as our Executive Vice President, Chief Administrative Officer and Chief Financial Officer from November 2013 through March 2015, and was Senior Vice President and Chief Financial Officer of the Company from September 2012 through October 2013. From 1992 to 2012, Mr. Peterson held various positions with The Procter & Gamble Company, most recently serving as Vice President and Chief Financial Officer of its Global Household Care division.
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Valérie Hermann
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Age 52
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Ms. Hermann has been our President of Luxury Collections since April 2014. She was President and Chief Executive Officer of Reed Krakoff Co. from April 2011 through March 2014. From 2005 to 2011, Ms. Hermann served as Chief Executive Officer of Saint Laurent Paris. Prior to that, she held various positions at LVMH Moët Hennessy Louis Vuitton, including Director of Women's Ready to Wear at Dior.
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Mitchell A. Kosh
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Age 65
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Mr. Kosh has been our Executive Vice President and Chief Administrative Officer since April 2015. He served as our Executive Vice President of Human Resources from March 2014 through March 2015, and was Senior Vice President of Human Resources of the Company from July 2000 through February 2014. Mr. Kosh was Senior Vice President of Human Resources of Conseco, Inc. from February 2000 to July 2000. Prior to that time, Mr. Kosh held executive human resource positions with the Venator Group, Inc. starting in 1996.
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Robert L. Madore
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Age 50
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Mr. Madore has been our Senior Vice President and Chief Financial Officer since April 2015. He served as Senior Vice President of Finance of the Company from December 2010 through March 2015, and was Senior Vice President of Operations and Chief Financial Officer of the Company’s retail division from 2004 to December 2010. From 2001 to 2003, Mr. Madore was Chief Operating Officer and Chief Financial Officer of Futurebrand, a division of Mccann Ericsson Worldwide. Prior to that, he held various executive management positions at Nine West Group, Inc. starting in 1995.
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20
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Item 1A.
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Risk Factors
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higher than anticipated costs in implementing planned workforce reductions, particularly in highly regulated locations outside the U.S.;
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higher than anticipated lease termination and store closure costs (see "
Our business is subject to risks associated with leasing real estate and other assets under long-term, non-cancellable leases
");
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failure to meet operational targets or customer requirements due to the loss of employees or inadequate transfer of knowledge;
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failure to maintain adequate controls and procedures while executing our restructuring plans;
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diversion of management attention from ongoing business activities and/or a decrease in employee morale; and
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attrition beyond any planned reduction in workforce.
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21
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•
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the burdens of complying with a variety of foreign laws and regulations, including trade, labor, and product safety trading restrictions;
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22
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•
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compliance with U.S. and other country laws relating to foreign operations, including, but not limited to, the Foreign Corrupt Practices Act, which prohibits U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business, and the U.K. Bribery Act, which prohibits U.K. and related companies from any form of bribery;
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unexpected changes in laws, judicial processes, or regulatory requirements;
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•
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adapting to local customs and culture; and
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new tariffs or other barriers in certain international markets.
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political instability and terrorist attacks;
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changes in diplomatic and trade relationships, including sanctions resulting from the current political situation in Russia and Ukraine; and
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•
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general economic fluctuations in specific countries or markets.
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23
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24
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•
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changes in social, political, and economic conditions or terrorist acts that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located;
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the imposition of additional regulations relating to imports or exports, and costs of complying with laws relating to the identification and reporting of the sources of minerals used in our products;
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•
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the imposition of additional duties, taxes, and other charges on imports or exports;
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•
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significant fluctuations in the cost of raw materials;
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•
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increases in the cost of labor, fuel, travel, and transportation;
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•
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disruptions of shipping and international trade caused by natural and man-made disasters;
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•
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significant delays in the delivery of cargo due to security considerations;
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•
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pandemic and epidemic diseases, which could result in closed factories, reduced workforces, scarcity of raw materials, and scrutiny or embargoing of goods produced in infected areas;
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•
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the imposition of anti-dumping or countervailing duty proceedings resulting in the potential assessment of special anti-dumping or countervailing duties; and
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•
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the imposition of sanctions in the form of additional duties either by the U.S. or its trading partners to remedy perceived illegal actions by national governments.
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25
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26
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27
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28
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•
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obtain capital;
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•
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manage its labor relations;
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•
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maintain relationships with its suppliers;
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•
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manage its credit and bankruptcy risks effectively; and
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•
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maintain relationships with its customers.
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29
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•
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general business conditions;
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•
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economic downturns;
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•
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employment levels;
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•
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downturns in the stock market;
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•
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interest rates;
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•
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foreign currency exchange rates;
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•
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the housing market;
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•
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consumer debt levels;
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•
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the availability of consumer credit;
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•
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increases in fuel prices;
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•
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taxation; and
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•
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consumer confidence in future economic conditions.
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•
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anticipating and responding to changing consumer demands in a timely manner;
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•
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creating and maintaining favorable brand recognition, loyalty, and a reputation for quality;
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•
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developing and maintaining innovative, high-quality products in sizes, colors, and styles that appeal to consumers;
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•
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appropriately sourcing raw materials at cost-effective prices;
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•
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appropriately pricing products;
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•
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anticipating and maintaining proper inventory levels;
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•
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providing strong and effective marketing support;
|
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30
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•
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recruiting and retaining key employees;
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•
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creating an acceptable value proposition for retail customers;
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•
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ensuring product availability and optimizing supply chain and distribution efficiencies with manufacturers and retailers;
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•
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obtaining sufficient retail floor space and effective presentation of our products at retail stores;
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•
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maintaining and growing market share; and
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•
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protecting our intellectual property.
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Item 1B.
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Unresolved Staff Comments.
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31
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Item 2.
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Properties.
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Location
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Use
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|
Approximate
Square Feet
|
|
Current Lease Term
Expiration
|
|
|
|
|
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Greensboro, NC
|
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Wholesale and retail distribution facility
|
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1,500,000
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|
N/A - Owned
|
N. Pendleton Street, High Point, NC
|
|
Retail e-commerce call center and distribution facility
|
|
805,000
|
|
N/A - Owned
|
625 Madison Avenue, NYC
|
|
Corporate offices and showrooms
|
|
412,000
|
|
December 31, 2019
|
Eagle Hill Drive, High Point, NC
|
|
Wholesale distribution facility
|
|
343,000
|
|
December 31, 2022
|
650 Madison Avenue, NYC
|
|
Executive and corporate offices, design studio, and showrooms
|
|
270,000
|
|
December 31, 2024
|
Lyndhurst, NJ
|
|
Corporate and retail administrative offices
|
|
178,000
|
|
December 31, 2019
|
Geneva, Switzerland
|
|
European corporate offices
|
|
107,000
|
|
June 22, 2027
|
550 7th Avenue, NYC
|
|
Corporate offices, design studio, and Women's showrooms
|
|
104,000
|
|
December 31, 2018
|
Gateway Office, Hong Kong
|
|
Asia corporate offices
|
|
56,000
|
|
October 31, 2017
|
Manhattan Place, Hong Kong
|
|
Asia corporate and sourcing offices
|
|
46,000
|
|
October 31, 2016
|
711 5th Avenue, NYC
|
|
Retail flagship store
|
|
39,000
|
|
June 30, 2029
|
888 Madison Avenue, NYC
|
|
Retail flagship store
|
|
37,900
|
|
August 31, 2027
|
750 N. Michigan Avenue, Chicago
|
|
Retail flagship store
|
|
37,500
|
|
November 14, 2017
|
London, UK
|
|
Retail flagship store
|
|
31,500
|
|
July 4, 2021
|
867 Madison Avenue, NYC
|
|
Retail flagship store
|
|
27,700
|
|
December 31, 2023
|
Paris, France
|
|
Retail flagship store
|
|
25,700
|
|
May 31, 2018
|
Tokyo, Japan
|
|
Retail flagship store
|
|
25,000
|
|
December 31, 2020
|
Lee Gardens, Hong Kong
|
|
Retail flagship store
|
|
20,200
|
|
August 16, 2022
|
444 N. Rodeo Drive, Beverly Hills
|
|
Retail flagship store
|
|
19,400
|
|
September 30, 2033
|
|
32
|
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
|
33
|
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
|
Market Price of
Class A
Common Stock
|
|
Dividends
Declared per
Common Share
|
||||||||
|
|
High
|
|
Low
|
|
|||||||
Fiscal 2015:
|
|
|
|
|
|
|
||||||
First Quarter
|
|
$
|
164.75
|
|
|
$
|
141.93
|
|
|
$
|
0.45
|
|
Second Quarter
|
|
174.98
|
|
|
152.22
|
|
|
0.45
|
|
|||
Third Quarter
|
|
185.92
|
|
|
153.39
|
|
|
0.45
|
|
|||
Fourth Quarter
|
|
187.49
|
|
|
127.29
|
|
|
0.50
|
|
|||
Fiscal 2014:
|
|
|
|
|
|
|
||||||
First Quarter
|
|
$
|
192.03
|
|
|
$
|
165.33
|
|
|
$
|
0.40
|
|
Second Quarter
|
|
189.80
|
|
|
161.98
|
|
|
0.40
|
|
|||
Third Quarter
|
|
181.07
|
|
|
157.01
|
|
|
0.45
|
|
|||
Fourth Quarter
|
|
178.59
|
|
|
146.00
|
|
|
0.45
|
|
|
|
Total Number of Shares Purchased
|
|
Average
Price
Paid per
Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Approximate Dollar
Value of Shares
That May Yet Be
Purchased Under the
Plans or Programs
(a)
|
||||||
|
|
|
|
|
|
|
|
(millions)
|
||||||
December 28, 2014 to January 24, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
230
|
|
January 25, 2015 to February 21, 2015
|
|
796,929
|
|
|
137.18
|
|
|
796,929
|
|
|
120
|
|
||
February 22, 2015 to March 28, 2015
|
|
293,500
|
|
|
138.55
|
|
|
293,500
|
|
|
80
|
|
||
|
|
1,090,429
|
|
|
|
|
1,090,429
|
|
|
|
|
(a)
|
As of
March 28, 2015
, the remaining availability under our Class A common stock repurchase program was approximately
$80 million
. On May 12, 2015, our Board of Directors approved an expansion of the program that allows us to repurchase up to an additional
$500 million
of Class A common stock. Repurchases of shares of Class A common stock are subject to overall business and market conditions.
|
|
34
|
|
Item 6.
|
Selected Financial Data
|
|
35
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Overview.
This section provides a general description of our business, current trends and outlook, and a summary of our financial performance for
Fiscal 2015
. In addition, this section includes a discussion of recent developments and transactions affecting comparability that we believe are important in understanding our results of operations and financial condition, and in anticipating future trends.
|
•
|
Results of operations.
This section provides an analysis of our results of operations for
Fiscal 2015
as compared to
Fiscal 2014
and
Fiscal 2014
as compared to
Fiscal 2013
.
|
•
|
Financial condition and liquidity.
This section provides a discussion of our financial condition and liquidity as of
March 28, 2015
, which includes (i) an analysis of our financial condition compared to the prior fiscal year-end; (ii) an analysis of changes in our cash flows for
Fiscal 2015
and
Fiscal 2014
as compared to the respective prior fiscal year; (iii) an analysis of our liquidity, including common stock repurchases, payments of dividends, our outstanding debt and covenant compliance, and the availability under our credit facilities and our commercial paper borrowing program; and (iv) a summary of our contractual and other obligations as of
March 28, 2015
.
|
•
|
Market risk management.
This section discusses how we manage our risk exposures related to foreign currency exchange rates, interest rates, and our investments as of
March 28, 2015
.
|
•
|
Critical accounting policies.
This section discusses accounting policies considered to be important to our results of operations and financial condition, which typically require significant judgment and estimation on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Note 3 to the accompanying audited consolidated financial statements.
|
•
|
Recently issued accounting standards.
This section discusses the potential impact on our reported results of operations and financial condition of certain accounting standards that have been recently issued or proposed.
|
|
36
|
|
|
37
|
|
|
38
|
|
•
|
pretax asset impairment and restructuring and other charges recorded during the periods presented. A summary of the effect of these items on pretax income for each fiscal year is summarized below (references to "Notes" are to the notes to the accompanying audited consolidated financial statements):
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Impairments of assets (see Note 11)
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
|
$
|
(19
|
)
|
Restructuring and other charges (see Note 12)
|
|
(10
|
)
|
|
(18
|
)
|
|
(12
|
)
|
•
|
our acquisitions of previously licensed businesses, including the Australia and New Zealand Licensed Operations Acquisition in July 2013; the Chaps Menswear License Acquisition in April 2013, which resulted in a $16 million gain recorded during the first quarter of Fiscal 2014; and our acquisition of the Ralph Lauren-branded business in Latin America in June 2012;
|
•
|
discrete income tax benefits of $10 million and $15 million recognized within our provision for income taxes during Fiscal 2014 and Fiscal 2013, respectively, in connection with the settlements of two separate tax examinations. During Fiscal 2013, the tax benefit from the tax examination settlement was more than offset by a discrete income tax reserve of $16 million for an interest assessment on a prior year withholding tax; and
|
•
|
the wind-down of our Rugby brand operations during the second half of Fiscal 2013 (the "Rugby Closure Plan").
|
|
39
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
$
Change
|
|
% / bps
Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net revenues
|
|
$
|
7,620
|
|
|
$
|
7,450
|
|
|
$
|
170
|
|
|
2.3
|
%
|
Cost of goods sold
(a)
|
|
(3,242
|
)
|
|
(3,140
|
)
|
|
(102
|
)
|
|
3.3
|
%
|
|||
Gross profit
|
|
4,378
|
|
|
4,310
|
|
|
68
|
|
|
1.6
|
%
|
|||
Gross profit as % of net revenues
|
|
57.5
|
%
|
|
57.9
|
%
|
|
|
|
(40 bps)
|
|
||||
Selling, general, and administrative expenses
(a)
|
|
(3,301
|
)
|
|
(3,142
|
)
|
|
(159
|
)
|
|
5.0
|
%
|
|||
SG&A expenses as % of net revenues
|
|
43.3
|
%
|
|
42.2
|
%
|
|
|
|
110 bps
|
|
||||
Amortization of intangible assets
|
|
(25
|
)
|
|
(35
|
)
|
|
10
|
|
|
(27.9
|
%)
|
|||
Gain on acquisition of Chaps
|
|
—
|
|
|
16
|
|
|
(16
|
)
|
|
NM
|
|
|||
Impairment of assets
|
|
(7
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|
NM
|
|
|||
Restructuring and other charges
|
|
(10
|
)
|
|
(18
|
)
|
|
8
|
|
|
(43.5
|
%)
|
|||
Operating income
|
|
1,035
|
|
|
1,130
|
|
|
(95
|
)
|
|
(8.4
|
%)
|
|||
Operating income as % of net revenues
|
|
13.6
|
%
|
|
15.2
|
%
|
|
|
|
(160 bps)
|
|
||||
Foreign currency losses
|
|
(26
|
)
|
|
(8
|
)
|
|
(18
|
)
|
|
NM
|
|
|||
Interest expense
|
|
(17
|
)
|
|
(20
|
)
|
|
3
|
|
|
(17.3
|
%)
|
|||
Interest and other income, net
|
|
6
|
|
|
3
|
|
|
3
|
|
|
73.3
|
%
|
|||
Equity in losses of equity-method investees
|
|
(11
|
)
|
|
(9
|
)
|
|
(2
|
)
|
|
22.8
|
%
|
|||
Income before provision for income taxes
|
|
987
|
|
|
1,096
|
|
|
(109
|
)
|
|
(9.9
|
%)
|
|||
Provision for income taxes
|
|
(285
|
)
|
|
(320
|
)
|
|
35
|
|
|
(11.0
|
%)
|
|||
Effective tax rate
(b)
|
|
28.9
|
%
|
|
29.2
|
%
|
|
|
|
(30 bps)
|
|
||||
Net income
|
|
$
|
702
|
|
|
$
|
776
|
|
|
$
|
(74
|
)
|
|
(9.5
|
%)
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
7.96
|
|
|
$
|
8.55
|
|
|
$
|
(0.59
|
)
|
|
(6.9
|
%)
|
Diluted
|
|
$
|
7.88
|
|
|
$
|
8.43
|
|
|
$
|
(0.55
|
)
|
|
(6.5
|
%)
|
|
(a)
|
Includes total depreciation expense of
$269 million
and
$223 million
for
Fiscal 2015
and
Fiscal 2014
, respectively.
|
(b)
|
Effective tax rate is calculated by dividing the provision for income taxes by income before provision for income taxes.
|
|
40
|
|
|
|
Fiscal Years Ended
|
|
|
|
% Change
|
||||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
$
Change
|
|
As
Reported
|
|
Constant
Currency
|
||||||||
|
|
(millions)
|
|
|
|
|
||||||||||||
Net Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wholesale
|
|
$
|
3,495
|
|
|
$
|
3,486
|
|
|
$
|
9
|
|
|
0.3
|
%
|
|
2.1
|
%
|
Retail
|
|
3,956
|
|
|
3,798
|
|
|
158
|
|
|
4.2
|
%
|
|
5.9
|
%
|
|||
Licensing
|
|
169
|
|
|
166
|
|
|
3
|
|
|
1.8
|
%
|
|
3.3
|
%
|
|||
Total net revenues
|
|
$
|
7,620
|
|
|
$
|
7,450
|
|
|
$
|
170
|
|
|
2.3
|
%
|
|
4.0
|
%
|
•
|
a $28 million net increase related to our business in the Americas, reflecting increased revenues from our womenswear and accessories businesses, partially offset by decreased revenues from our menswear business, due in part to higher prior period sales associated with the initial transition of the Chaps Menswear Business to a wholly-owned operation. The net increase related to our business in the Americas also reflected net unfavorable foreign currency effects of $9 million due to the weakening of the Canadian Dollar against the U.S. Dollar.
|
•
|
a $9 million net decrease related to our Asia businesses, primarily reflecting net unfavorable foreign currency effects of $4 million largely related to the weakening of the Japanese Yen against the U.S. Dollar, as well as the continued impact of our business model shift to the retail concession-based channel, partially offset by increased sales to our licensees; and
|
•
|
a $10 million net decrease related to our European business, primarily reflecting net unfavorable foreign currency effects of $50 million, partially offset by increased sales across all of our major apparel and accessories businesses.
|
•
|
a $178 million, or a 23%, net increase in non-comparable store sales, including net unfavorable foreign currency effects of $17 million. On a constant currency basis, non-comparable store sales increased by $195 million, or 25%, primarily driven by new global store openings in Asia and Europe within the past twelve months, the expansion of our e-commerce operations, and new stores and concession shops assumed in connection with the Australia and New Zealand Licensed Operations Acquisition, which more than offset the impact of store closings.
|
•
|
a $20 million, or 1%, net decline in consolidated comparable store sales, including net unfavorable foreign currency effects of $48 million. Our total comparable store sales increased approximately $28 million, or 1%, on a constant currency basis, primarily driven by an increase from our Ralph Lauren e-commerce operations, partially offset by lower sales from certain retail stores and concession shops. Comparable store sales related to our e-commerce operations increased by approximately 16% on a reported basis and 17% on a constant currency basis over the related prior fiscal year period, and had a favorable impact on our total comparable store sales of approximately 3% to 4% on a reported basis and 2% to 3% on a constant currency basis. Our consolidated comparable store sales excluding e-commerce declined between 3% and 4% on a reported basis and declined between 2% and 3% on a constant currency basis.
|
|
41
|
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||
Stores:
|
|
|
|
|
||
Freestanding stores
|
|
466
|
|
|
433
|
|
Concession shops
|
|
536
|
|
|
503
|
|
Total stores
|
|
1,002
|
|
|
936
|
|
|
|
|
|
|
||
E-commerce Sites:
|
|
|
|
|
||
North American sites
(a)
|
|
3
|
|
|
3
|
|
European sites
(b)
|
|
3
|
|
|
3
|
|
Asian sites
(c)
|
|
4
|
|
|
2
|
|
Total e-commerce sites
|
|
10
|
|
|
8
|
|
|
(a)
|
Includes www.RalphLauren.com and www.ClubMonaco.com (servicing the U.S.) and www.ClubMonaco.ca (servicing Canada).
|
(b)
|
Includes www.RalphLauren.co.uk (servicing the United Kingdom), www.RalphLauren.fr (servicing Belgium, France, Italy, Luxembourg, the Netherlands, Portugal, and Spain), and www.RalphLauren.de (recently expanded to service Denmark, Estonia, Finland, Latvia, Slovakia, and Sweden, in addition to servicing Austria and Germany).
|
(c)
|
Includes www.RalphLauren.co.jp (servicing Japan) and www.RalphLauren.co.kr (servicing South Korea), and, as of March 28, 2015, www.RalphLauren.asia (servicing Hong Kong, Macau, Malaysia, and Singapore) and www.RalphLauren.com.au (servicing Australia and New Zealand).
|
|
42
|
|
|
|
Fiscal 2015
Compared to
Fiscal 2014
|
||
|
|
(millions)
|
||
SG&A expense category:
|
|
|
||
Compensation-related expenses
(a)
|
|
$
|
62
|
|
Depreciation expense
|
|
46
|
|
|
Rent and occupancy expenses
|
|
26
|
|
|
Marketing and advertising expenses
|
|
19
|
|
|
Incremental operating expenses related to the Australia and New Zealand Business
|
|
10
|
|
|
Shipping and handling costs
|
|
7
|
|
|
Acquisition-related costs
(b)
|
|
(7
|
)
|
|
Other
|
|
(4
|
)
|
|
Total change in SG&A expenses
|
|
$
|
159
|
|
|
(a)
|
Primarily due to increased salaries and related expenses to support our retail business growth.
|
(b)
|
Comprised of acquisition-related costs for the Chaps Menswear License Acquisition in April 2013 and for the Australia and New Zealand Licensed Operations Acquisition in July 2013 (see
Note 5
to the accompanying audited consolidated financial statements).
|
|
43
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
||||||||||||
|
March 28, 2015
|
|
March 29, 2014
|
|
|
|
|
|||||||||||
|
Operating
Income
|
|
Operating
Margin
|
|
Operating
Income
|
|
Operating
Margin
|
|
$
Change
|
|
Margin
Change
|
|||||||
|
(millions)
|
|
|
|
(millions)
|
|
|
|
(millions)
|
|
|
|||||||
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
|
$
|
943
|
|
|
27.0%
|
|
$
|
963
|
|
|
27.6%
|
|
$
|
(20
|
)
|
|
(60 bps)
|
Retail
|
|
527
|
|
|
13.3%
|
|
572
|
|
|
15.1%
|
|
(45
|
)
|
|
(180 bps)
|
|||
Licensing
|
|
152
|
|
|
90.4%
|
|
150
|
|
|
90.2%
|
|
2
|
|
|
20 bps
|
|||
|
|
1,622
|
|
|
|
|
1,685
|
|
|
|
|
(63
|
)
|
|
|
|||
Unallocated corporate expenses
|
|
(577
|
)
|
|
|
|
(553
|
)
|
|
|
|
(24
|
)
|
|
|
|||
Gain on acquisition of Chaps
|
|
—
|
|
|
|
|
16
|
|
|
|
|
(16
|
)
|
|
|
|||
Unallocated restructuring and other charges
|
|
(10
|
)
|
|
|
|
(18
|
)
|
|
|
|
8
|
|
|
|
|||
Total operating income
|
|
$
|
1,035
|
|
|
13.6%
|
|
$
|
1,130
|
|
|
15.2%
|
|
$
|
(95
|
)
|
|
(160 bps)
|
|
44
|
|
|
45
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
March 29,
2014
|
|
March 30,
2013
|
|
$
Change
|
|
% / bps
Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net revenues
|
|
$
|
7,450
|
|
|
$
|
6,945
|
|
|
$
|
505
|
|
|
7.3
|
%
|
Cost of goods sold
(a)
|
|
(3,140
|
)
|
|
(2,789
|
)
|
|
(351
|
)
|
|
12.6
|
%
|
|||
Gross profit
|
|
4,310
|
|
|
4,156
|
|
|
154
|
|
|
3.7
|
%
|
|||
Gross profit as % of net revenues
|
|
57.9
|
%
|
|
59.8
|
%
|
|
|
|
(190 bps)
|
|
||||
Selling, general, and administrative expenses
(a)
|
|
(3,142
|
)
|
|
(2,971
|
)
|
|
(171
|
)
|
|
5.7
|
%
|
|||
SG&A expenses as % of net revenues
|
|
42.2
|
%
|
|
42.8
|
%
|
|
|
|
(60 bps)
|
|
||||
Amortization of intangible assets
|
|
(35
|
)
|
|
(27
|
)
|
|
(8
|
)
|
|
30.7
|
%
|
|||
Gain on acquisition of Chaps
|
|
16
|
|
|
—
|
|
|
16
|
|
|
NM
|
|
|||
Impairments of assets
|
|
(1
|
)
|
|
(19
|
)
|
|
18
|
|
|
(93.1
|
%)
|
|||
Restructuring and other charges
|
|
(18
|
)
|
|
(12
|
)
|
|
(6
|
)
|
|
52.9
|
%
|
|||
Operating income
|
|
1,130
|
|
|
1,127
|
|
|
3
|
|
|
0.3
|
%
|
|||
Operating income as % of net revenues
|
|
15.2
|
%
|
|
16.2
|
%
|
|
|
|
(100 bps)
|
|
||||
Foreign currency losses
|
|
(8
|
)
|
|
(12
|
)
|
|
4
|
|
|
(30.1
|
%)
|
|||
Interest expense
|
|
(20
|
)
|
|
(22
|
)
|
|
2
|
|
|
(8.7
|
%)
|
|||
Interest and other income, net
|
|
3
|
|
|
6
|
|
|
(3
|
)
|
|
(38.2
|
%)
|
|||
Equity in losses of equity-method investees
|
|
(9
|
)
|
|
(10
|
)
|
|
1
|
|
|
(1.0
|
%)
|
|||
Income before provision for income taxes
|
|
1,096
|
|
|
1,089
|
|
|
7
|
|
|
0.6
|
%
|
|||
Provision for income taxes
|
|
(320
|
)
|
|
(339
|
)
|
|
19
|
|
|
(5.6
|
%)
|
|||
Effective tax rate
(b)
|
|
29.2
|
%
|
|
31.1
|
%
|
|
|
|
(190 bps)
|
|
||||
Net income
|
|
$
|
776
|
|
|
$
|
750
|
|
|
$
|
26
|
|
|
3.4
|
%
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
8.55
|
|
|
$
|
8.21
|
|
|
$
|
0.34
|
|
|
4.1
|
%
|
Diluted
|
|
$
|
8.43
|
|
|
$
|
8.00
|
|
|
$
|
0.43
|
|
|
5.4
|
%
|
|
(a)
|
Includes total depreciation expense of $223 million and $206 million for Fiscal 2014 and Fiscal 2013, respectively.
|
(b)
|
Effective tax rate is calculated by dividing the provision for income taxes by income before provision for income taxes.
|
NM
|
Not meaningful.
|
|
46
|
|
|
|
Fiscal Years Ended
|
|
$
Change
|
|
% Change
|
||||||||||||
|
|
March 29,
2014 |
|
March 30,
2013 |
|
As
Reported
|
|
Constant
Currency
|
||||||||||
|
|
(millions)
|
|
|
|
|
||||||||||||
Net Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wholesale
|
|
$
|
3,486
|
|
|
$
|
3,138
|
|
|
$
|
348
|
|
|
11.1
|
%
|
|
10.9
|
%
|
Retail
|
|
3,798
|
|
|
3,625
|
|
|
173
|
|
|
4.8
|
%
|
|
6.3
|
%
|
|||
Licensing
|
|
166
|
|
|
182
|
|
|
(16
|
)
|
|
(9.0
|
%)
|
|
(9.0
|
%)
|
|||
Total net revenues
|
|
$
|
7,450
|
|
|
$
|
6,945
|
|
|
$
|
505
|
|
|
7.3
|
%
|
|
7.9
|
%
|
•
|
a $378 million net increase related to our business in the Americas, largely due to $210 million of incremental revenues contributed by previously licensed businesses, including the Chaps Menswear Business acquired in April 2013 and certain businesses in Latin America acquired in June 2012. The increase in net revenues also reflected higher domestic revenues from our menswear, womenswear, and childrenswear product lines, as well as increased revenues from our accessories business. These increases were partially offset by lower Home product revenues primarily due to the rebranding of certain of our home products; and
|
•
|
an $11 million net increase related to our European business, due to the favorable impact of foreign currency related to the strengthening of the Euro against the U.S. Dollar during Fiscal 2014, partially offset by a planned reduction in shipments across our menswear, womenswear, and childrenswear product lines due to the challenging European retail environment and softness in the specialty store business.
|
•
|
a $37 million net decrease related to our Japanese business, driven by lower sell-throughs and the impact of a business model shift to the retail concessions-based channel, as well as the unfavorable impact of foreign currency related to the weakening of the Japanese Yen against the U.S. Dollar during Fiscal 2014.
|
•
|
a $187 million, or a 38%, net increase in non-comparable store sales, including unfavorable foreign currency effects of $10 million, primarily related to the weakening of the Japanese Yen against the U.S. Dollar during Fiscal 2014 compared to the prior fiscal year. On a constant currency basis, non-comparable store sales increased by $197 million, or 40%, primarily driven by new store openings during Fiscal 2014, including store openings in Asia, new stores and concession shops assumed in connection with the Australia and New Zealand Licensed Operations Acquisition, other new global store openings, and the expansion of our e-commerce operations, which more than offset the impact of store closings, including those closed in connection with the Rugby Closure Plan (see
Note 12
to the accompanying audited consolidated financial statements).
|
•
|
a $14 million net decline in comparable store sales during Fiscal 2014, remaining essentially flat on a percentage basis versus the prior year. The decline in the reported comparable store sales was largely due to unfavorable foreign currency effects of $43 million, primarily related to the weakening of the Japanese Yen, partially offset by the
|
|
47
|
|
|
|
March 29,
2014 |
|
March 30,
2013 |
||
Stores:
|
|
|
|
|
||
Freestanding stores
|
|
433
|
|
|
388
|
|
Concession shops
|
|
503
|
|
|
494
|
|
Total stores
|
|
936
|
|
|
882
|
|
|
|
|
|
|
||
E-commerce Sites:
|
|
|
|
|
||
North American sites
(a)
|
|
3
|
|
|
3
|
|
European sites
(b)
|
|
3
|
|
|
3
|
|
Asian sites
(c)
|
|
2
|
|
|
1
|
|
Total e-commerce sites
|
|
8
|
|
|
7
|
|
|
(a)
|
Includes www.RalphLauren.com and www.ClubMonaco.com (servicing the U.S.) and www.ClubMonaco.ca (servicing Canada).
|
(b)
|
Includes www.RalphLauren.co.uk (servicing the United Kingdom), www.RalphLauren.fr (servicing Belgium, France, Italy, Luxembourg, the Netherlands, Portugal, and Spain), and www.RalphLauren.de (servicing Austria and Germany).
|
(c)
|
Includes www.RalphLauren.co.jp (servicing Japan), and, as of March 29, 2014, www.RalphLauren.co.kr (servicing South Korea).
|
|
48
|
|
|
|
Fiscal 2014
Compared to
Fiscal 2013
|
||
|
|
(millions)
|
||
SG&A expense category:
|
|
|
||
Compensation-related expenses
(a)
|
|
$
|
44
|
|
Marketing and advertising expenses
|
|
39
|
|
|
Shipping and handling costs
|
|
28
|
|
|
Rent and occupancy expenses
|
|
27
|
|
|
Depreciation expense
|
|
17
|
|
|
Acquisition-related costs
(b)
|
|
7
|
|
|
Other
|
|
9
|
|
|
Total change in SG&A expenses
(c)
|
|
$
|
171
|
|
|
(a)
|
Primarily due to increased salaries and related expenses to support business growth.
|
(b)
|
Comprised of acquisition-related costs for the Chaps Menswear License Acquisition in April 2013 and for the Australia and New Zealand Licensed Operations Acquisition in July 2013 (see Note 5 to the accompanying audited consolidated financial statements).
|
(c)
|
Includes $62 million of incremental expenses associated with the aforementioned newly acquired businesses and $13 million of incremental expenses incurred in connection with the implementation of our global operating and financial reporting system.
|
|
49
|
|
|
|
Fiscal Years Ended
|
|
$
Change
|
|
Margin
Change
|
||||||||||||
|
|
March 29, 2014
|
|
March 30, 2013
|
|
|||||||||||||
|
|
Operating
Income
|
|
Operating
Margin
|
|
Operating
Income
|
|
Operating
Margin
|
|
|||||||||
|
|
(millions)
|
|
|
|
(millions)
|
|
|
|
(millions)
|
|
|
||||||
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
|
$
|
963
|
|
|
27.6%
|
|
$
|
903
|
|
|
28.7%
|
|
$
|
60
|
|
|
(110 bps)
|
Retail
|
|
572
|
|
|
15.1%
|
|
615
|
|
|
17.0%
|
|
(43
|
)
|
|
(190 bps)
|
|||
Licensing
|
|
150
|
|
|
90.2%
|
|
152
|
|
|
83.6%
|
|
(2
|
)
|
|
660 bps
|
|||
|
|
1,685
|
|
|
|
|
1,670
|
|
|
|
|
15
|
|
|
|
|||
Unallocated corporate expenses
|
|
(553
|
)
|
|
|
|
(531
|
)
|
|
|
|
(22
|
)
|
|
|
|||
Gain on acquisition of Chaps
|
|
16
|
|
|
|
|
—
|
|
|
|
|
16
|
|
|
|
|||
Unallocated restructuring and other charges
|
|
(18
|
)
|
|
|
|
(12
|
)
|
|
|
|
(6
|
)
|
|
|
|||
Total operating income
|
|
$
|
1,130
|
|
|
15.2%
|
|
$
|
1,127
|
|
|
16.2%
|
|
$
|
3
|
|
|
(100 bps)
|
|
50
|
|
|
|
March 28,
2015 |
|
March 29,
2014 |
|
$
Change |
||||||
|
|
(millions)
|
||||||||||
Cash and cash equivalents
|
|
$
|
500
|
|
|
$
|
797
|
|
|
$
|
(297
|
)
|
Short-term investments
|
|
644
|
|
|
488
|
|
|
156
|
|
|||
Non-current investments
(a)
|
|
8
|
|
|
2
|
|
|
6
|
|
|||
Short-term debt
|
|
(234
|
)
|
|
—
|
|
|
(234
|
)
|
|||
Long-term debt
(b)
|
|
(298
|
)
|
|
(298
|
)
|
|
—
|
|
|||
Net cash and investments
(c)
|
|
$
|
620
|
|
|
$
|
989
|
|
|
$
|
(369
|
)
|
Equity
|
|
$
|
3,891
|
|
|
$
|
4,034
|
|
|
$
|
(143
|
)
|
|
(a)
|
Recorded within other non-current assets in our consolidated balance sheets.
|
(b)
|
Net of
$2 million
of unamortized debt issuance costs as of both
March 28, 2015
and
March 29, 2014
.
|
(c)
|
"Net cash and investments" is defined as cash and cash equivalents, plus short-term and non-current investments, less total debt.
|
|
51
|
|
|
|
Fiscal Years Ended
|
|
|
||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
$
Change |
||||||
|
|
(millions)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
894
|
|
|
$
|
907
|
|
|
$
|
(13
|
)
|
Net cash used in investing activities
|
|
(689
|
)
|
|
(488
|
)
|
|
(201
|
)
|
|||
Net cash used in financing activities
|
|
(421
|
)
|
|
(599
|
)
|
|
178
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(81
|
)
|
|
3
|
|
|
(84
|
)
|
|||
Net decrease in cash and cash equivalents
|
|
$
|
(297
|
)
|
|
$
|
(177
|
)
|
|
$
|
(120
|
)
|
•
|
unfavorable changes in income tax receivables and payables, as well as prepaid expenses and other current assets, both due to the timing of payments; and
|
•
|
a year-over-year increase in our inventory levels to support our new brands and new and expanded stores.
|
•
|
a
$203 million
increase in proceeds from debt issuances, less cash used to repay debt. During
Fiscal 2015
, we received net proceeds of
$234 million
from commercial paper note issuances and repayments. During
Fiscal 2014
, we received $300 million in proceeds from our issuance of Senior Notes in September 2013, a portion of which was used to repay the $269 million principal amount outstanding of the 4.5% Euro-denominated notes upon their maturity on October 4, 2013; and
|
|
52
|
|
•
|
a
$26 million
decline in cash used to repurchase shares of our Class A common stock. During
Fiscal 2015
, we used
$500 million
to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional
$32 million
in shares of Class A common stock were surrendered or withheld in satisfaction of withholding taxes in connection with the vesting of awards under our amended and restated 2010 Long-Term Stock Incentive Plan (the "2010 Incentive Plan"). On a comparative basis, during
Fiscal 2014
, we used
$498 million
to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional
$60 million
in shares of Class A common stock were surrendered or withheld for taxes under our 1997 Long-Term Stock Incentive Plan (the "1997 Incentive Plan") and our 2010 Incentive Plan.
|
•
|
a
$26 million
decline in excess tax benefits from stock-based compensation arrangements;
|
•
|
a
$15 million
increase in payments related to our capital lease obligations; and
|
•
|
a
$9 million
increase in cash used to pay dividends.
|
|
|
Fiscal Years Ended
|
|
|
||||||||
|
|
March 29,
2014 |
|
March 30,
2013 |
|
$
Change |
||||||
|
|
(millions)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
907
|
|
|
$
|
1,019
|
|
|
$
|
(112
|
)
|
Net cash used in investing activities
|
|
(488
|
)
|
|
(113
|
)
|
|
(375
|
)
|
|||
Net cash used in financing activities
|
|
(599
|
)
|
|
(595
|
)
|
|
(4
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
3
|
|
|
(9
|
)
|
|
12
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(177
|
)
|
|
$
|
302
|
|
|
$
|
(479
|
)
|
•
|
an increase associated with the changes in our accounts receivable balance, resulting from higher revenues at the end of Fiscal 2014 and the timing of cash collections; and
|
•
|
an increase in prepaid expenses and other current assets, primarily attributable to an increase in non-income tax receivables related to our foreign operations and the timing of related payments.
|
•
|
increases related to accounts payable and accrued liabilities and income taxes, primarily due to the timing of the related payments.
|
•
|
a $238 million increase in cash used to purchase investments, less proceeds from sales and maturities of investments. During Fiscal 2014, we made net investment purchases of $56 million, as compared to net investment sales of $182 million during Fiscal 2013;
|
•
|
a $114 million increase in cash used for capital expenditures. During Fiscal 2014, we spent $390 million on capital expenditures, as compared to $276 million during Fiscal 2013. Our capital expenditures were primarily associated with global retail store expansion, department store renovations, the purchase and expansion of a distribution facility in High Point, North Carolina, and enhancements to our global information technology systems, including the continued implementation of our global operating and financial reporting information technology system, SAP; and
|
|
53
|
|
•
|
an $18 million increase in cash used to fund our acquisitions and ventures. During Fiscal 2014, we used $40 million of cash to fund our acquisitions and ventures, including $18 million to fund the Chaps Menswear License Acquisition, $15 million to fund the Australia and New Zealand Licensed Operations Acquisition, as well as amounts to support the continued funding of our joint venture, the RL Watch Company. During Fiscal 2013, we used $22 million of cash, primarily in connection with our acquisition of the previously licensed business in Latin America, and to fund the operations of the RL Watch Company.
|
•
|
a $21 million increase in cash used to pay dividends. During Fiscal 2014, we used $149 million to pay dividends, as compared to $128 million during Fiscal 2013, primarily due to the increase in the quarterly cash dividend from $0.40 per share to $0.45 per share, effective in November 2013; and
|
•
|
an $11 million increase in cash used to repurchase shares of our Class A common stock. During Fiscal 2014, we used $498 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional $60 million in shares of Class A common stock were surrendered or withheld in satisfaction of withholding taxes in connection with the vesting of awards under our 1997 Incentive Plan and our 2010 Incentive Plan. On a comparative basis, during Fiscal 2013, we used $450 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional $47 million in shares of Class A common stock were surrendered or withheld for taxes. In addition, during Fiscal 2013, we made a $50 million payment in connection with our prepaid share repurchase program.
|
•
|
$31 million in proceeds from the issuance of long-term debt, net of repayments. During Fiscal 2014, we received $300 million in proceeds from our issuance of 2.125% unsecured Senior Notes in September 2013. A portion of these proceeds was used to repay the $269 million principal amount outstanding of the 4.5% Euro-denominated notes upon their maturity on October 4, 2013.
|
|
54
|
|
|
Fiscal Years Ended
|
||||||||||
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
(in millions)
|
||||||||||
Cost of shares repurchased
|
$
|
500
|
|
|
$
|
548
|
|
(a)
|
$
|
450
|
|
Number of shares repurchased
|
3.2
|
|
|
3.2
|
|
(a)
|
3.0
|
|
|
(a)
|
Includes a
$50 million
prepayment made in March 2013 under our share repurchase program with a third-party financial institution, in exchange for the right to receive shares of our Class A common stock at the conclusion of the
93
-day repurchase term. The
$50 million
prepayment was recorded as a reduction to additional paid-in capital in our consolidated balance sheet as of March 30, 2013. The related
0.3 million
shares were delivered to us during Fiscal 2014, based on the volume-weighted average market price of our Class A common stock over the
93
-day repurchase term, less a discount.
|
|
55
|
|
|
56
|
|
|
|
Fiscal
2016
|
|
Fiscal
2017-2018
|
|
Fiscal
2019-2020
|
|
Fiscal
2021 and
Thereafter
|
|
Total
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Senior Notes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
300
|
|
|
$
|
—
|
|
|
$
|
300
|
|
Interest payments on Senior Notes
|
|
6
|
|
|
13
|
|
|
3
|
|
|
—
|
|
|
22
|
|
|||||
Capital leases
|
|
26
|
|
|
49
|
|
|
46
|
|
|
69
|
|
|
190
|
|
|||||
Operating leases
|
|
322
|
|
|
579
|
|
|
486
|
|
|
733
|
|
|
2,120
|
|
|||||
Inventory purchase commitments
|
|
840
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
840
|
|
|||||
Other commitments
|
|
58
|
|
|
42
|
|
|
36
|
|
|
27
|
|
|
163
|
|
|||||
Total
|
|
$
|
1,252
|
|
|
$
|
683
|
|
|
$
|
871
|
|
|
$
|
829
|
|
|
$
|
3,635
|
|
•
|
Senior Notes
represents the principal amount of our outstanding unsecured senior notes due September 26, 2018. Amount does not include any fair value adjustments, call premiums, or interest payments (see below);
|
•
|
Interest payments on Senior Notes
represent the semi-annual contractual interest payments due on our Senior Notes, which bear interest at a fixed annual rate of 2.125%;
|
•
|
Lease obligations
represent the minimum lease rental payments due under noncancelable leases for our real estate and operating equipment in various locations around the world. In addition to such amounts, we are normally required to pay taxes, insurance, and certain occupancy costs relating to our leased real estate properties, which are not included in the table above. Approximately 72% of these lease obligations relate to our retail operations. Information has been presented separately for operating and capital leases;
|
•
|
Inventory purchase commitments
represent our legally-binding agreements to purchase fixed or minimum quantities of goods at determinable prices; and
|
•
|
Other commitments
primarily represent our legally-binding obligations under sponsorship, licensing, and other marketing and advertising agreements; distribution-related agreements; information technology-related service agreements; and pension-related obligations.
|
|
57
|
|
|
58
|
|
•
|
Forecasted Inventory Transactions
— recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold to a third party.
|
•
|
Intercompany Royalty Payments and Marketing Contributions
— recognized within foreign currency gains (losses) generally in the period in which the related payments or contributions being hedged are received or paid.
|
|
59
|
|
|
60
|
|
|
61
|
|
|
62
|
|
|
63
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
|
64
|
|
|
65
|
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
|
66
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
|
(1)
|
Consists of 3,225,268 options to purchase shares of our Class A common stock and 1,380,779 restricted stock units that are payable solely in shares of Class A common stock (including 422,724 service-based restricted stock units that have fully vested but for which the underlying shares have not yet been delivered as of
March 28, 2015
). Does not include 5,323 outstanding restricted shares that are subject to forfeiture.
|
(2)
|
Represents the weighted average exercise price of outstanding stock options.
|
(3)
|
All of the securities remaining available for future issuance set forth in column (c) may be in the form of options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other stock-based awards under the Company's 1997 Incentive Plan and 2010 Incentive Plan (the "Plans"). An additional 5,323 outstanding shares of restricted stock granted under the Company's Plans that remain subject to forfeiture are not reflected in column (c).
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
|
67
|
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
Exhibit
Number
|
|
Description
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company's Registration Statement on Form S-1 (File No. 333-24733) (the "S-1"))
|
3.2
|
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Form 8-K filed August 16, 2011)
|
3.3
|
|
Third Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Form 8-K dated February 4, 2014)
|
4.1
|
|
Indenture, dated as of September 26, 2013, by and between the Company and Wells Fargo Bank, National Association (including the form of Note) (filed as Exhibit 4.1 to the Form 8-K dated September 23, 2013)
|
4.2
|
|
First Supplemental Indenture, dated as of September 26, 2013, by and between the Company and Wells Fargo Bank, National Association (filed as Exhibit 4.2 to the Form 8-K dated September 23, 2013)
|
10.1
|
|
Registration Rights Agreement dated as of June 9, 1997 by and among Ralph Lauren, GS Capital Partners, L.P., GS Capital Partner PRL Holding I, L.P., GS Capital Partners PRL Holding II, L.P., Stone Street Fund 1994, L.P., Stone Street 1994 Subsidiary Corp., Bridge Street Fund 1994, L.P., and the Company (filed as Exhibit 10.3 to the S-1)
|
10.2
|
|
Form of Indemnification Agreement between the Company and its Directors and Executive Officers (filed as Exhibit 10.26 to the S-1)
|
10.3
|
|
Amended and Restated Employment Agreement, made effective as of June 26, 2012, between the Company and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K filed July 2, 2012)†
|
10.4
|
|
Amendment No. 1 to the Amended and Restated Employment Agreement, dated as of April 1, 2015, between Ralph Lauren Corporation and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K dated April 6, 2015)†
|
10.5
|
|
Amended and Restated Employment Agreement, effective as of November 1, 2013, between the Company and Roger N. Farah (filed as Exhibit 10.1 to the Form 8-K dated September 18, 2013)†
|
10.6
|
|
Amendment No. 1 to the Amended and Restated Employment Agreement, effective as of May 27, 2014, between Ralph Lauren Corporation and Roger N. Farah (filed as Exhibit 10.1 to the Form 8-K dated May 29, 2014)†
|
10.7
|
|
Amended and Restated Employment Agreement, effective as of November 1, 2013, between the Company and Jackwyn Nemerov (filed as Exhibit 10.2 to the Form 8-K dated September 18, 2013)†
|
10.8
|
|
Amendment No. 1 to the Amended and Restated Employment Agreement, effective as of March 30, 2014, between the Company and Jackwyn Nemerov (filed as Exhibit 10.6 to the Company's Annual Report on Form 10-K for the fiscal year ended March 29, 2014 (the "Fiscal 2014 10-K"))†
|
10.9*
|
|
Amendment No. 2 to the Amended and Restated Employment Agreement, effective as of March 29, 2015, between Ralph Lauren Corporation and Jackwyn Nemerov†
|
10.10
|
|
Amended and Restated Employment Agreement, effective as of November 1, 2013, between the Company and Christopher H. Peterson (filed as Exhibit 10.3 to the Form 8-K dated September 18, 2013)†
|
10.11
|
|
Amendment No. 1 to the Amended and Restated Employment Agreement, effective as of March 30, 2014, between the Company and Christopher Peterson (filed as Exhibit 10.8 to the Fiscal 2014 10-K)†
|
10.12
|
|
Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Christopher H. Peterson (filed as Exhibit 10.2 to the Form 8-K dated April 6, 2015)†
|
10.13*
|
|
Employment Agreement, effective as of April 7, 2014, between Ralph Lauren Corporation and Valérie Hermann†
|
10.14*
|
|
Amendment No. 1 to the Employment Agreement, effective as of June 24, 2014, between Ralph Lauren Corporation and Valérie Hermann†
|
10.15*
|
|
Amendment No. 2 to the Employment Agreement, effective as of March 29, 2015, between Ralph Lauren Corporation and Valérie Hermann†
|
10.16
|
|
Amended and Restated Employment Agreement, effective as of March 1, 2014, between the Company and Mitchell A. Kosh (filed as Exhibit 10.1 to the Form 8-K dated February 11, 2014)†
|
|
68
|
|
Exhibit
Number
|
|
Description
|
10.17
|
|
Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Mitchell A. Kosh (filed as Exhibit 10.3 to the Form 8-K dated April 6, 2015)†
|
10.18
|
|
Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Robert L. Madore (filed as Exhibit 10.4 to the Form 8-K dated April 6, 2015)†
|
10.19
|
|
Non-Qualified Stock Option Agreement, dated as of June 8, 2004, between the Company and Ralph Lauren (filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended April 2, 2005 (the "Fiscal 2005 10-K"))†
|
10.20
|
|
Restricted Stock Unit Award Agreement, dated as of June 8, 2004, between the Company and Ralph Lauren (filed as Exhibit 10.15 to the Fiscal 2005 10-K)†
|
10.21
|
|
Executive Officer Annual Incentive Plan, as amended as of August 9, 2012 (filed as Appendix B to the Company's Definitive Proxy Statement dated July 2, 2012)†
|
10.22
|
|
Restricted Stock Unit Award Agreement, dated as of July 1, 2004, between the Company and Roger N. Farah (filed as Exhibit 10.18 to the Fiscal 2005 10-K)†
|
10.23
|
|
Amendment No. 1, dated as of December 23, 2008, to the Restricted Stock Unit Award Agreement between the Company and Roger N. Farah (filed as Exhibit 10.2 to the Form 10-Q for the quarterly period ended December 27, 2008)†
|
10.24
|
|
Restricted Stock Award Agreement, dated as of July 23, 2002, between the Company and Roger N. Farah (filed as Exhibit 10.19 to the Fiscal 2005 10-K)†
|
10.25
|
|
Non-Qualified Stock Option Agreement, dated as of July 23, 2002, between the Company and Roger N. Farah (filed as Exhibit 10.20 to the Fiscal 2005 10-K)†
|
10.26
|
|
Deferred Compensation Agreement, dated as of September 19, 2002, between the Company and Roger N. Farah (filed as Exhibit 10.21 to the Fiscal 2005 10-K)†
|
10.27
|
|
1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 99.1 to the Form 8-K dated August 12, 2004)†
|
10.28
|
|
Amendment, as of June 30, 2006, to the 1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 10.4 to the Form 10-Q for the quarterly period ended July 1, 2006)†
|
10.29
|
|
Amendment No. 2, dated as of May 21, 2009, to the 1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K for the fiscal year ended March 28, 2009)†
|
10.30
|
|
Amended and Restated 2010 Long-Term Incentive Plan, amended as of August 8, 2013 (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended June 29, 2013)†
|
10.31
|
|
Cliff Restricted Performance Share Unit Award Overview containing the standard terms of restricted performance share awards under the 1997 Long-Term Stock Incentive Plan (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended July 1, 2006)†
|
10.32
|
|
Pro-Rata Restricted Performance Share Unit Award Overview containing the standard terms of restricted performance share awards under the 1997 Long-Term Stock Incentive Plan (filed as Exhibit 10.3 to the Form 10-Q for the quarterly period ended July 1, 2006)†
|
10.33
|
|
Stock Option Award Overview - U.S. containing the standard terms of stock option awards under the 1997 Long-Term Stock Incentive Plan (filed as Exhibit 10.2 to the Form 10-Q for the quarterly period ended July 1, 2006)†
|
10.34
|
|
Cliff Restricted Performance Share Unit Award Overview containing the standard terms of cliff restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.25 to the Fiscal 2014 10-K)†
|
10.35
|
|
Pro-Rata Restricted Performance Share Unit Award Overview containing the standard terms of restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.26 to the Fiscal 2014 10-K)†
|
10.36
|
|
Stock Option Award Overview containing the standard terms of stock option awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.27 to the Fiscal 2014 10-K)†
|
10.37
|
|
Cliff Restricted Performance Share Unit with TSR Modifier Award Overview containing the standard terms of cliff restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.28 to the Fiscal 2014 10-K)†
|
10.38*
|
|
Form of Performance Share Unit Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan†
|
10.39*
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan†
|
|
69
|
|
Exhibit
Number
|
|
Description
|
10.40
|
|
Amended and Restated Credit Agreement, dated as of February 11, 2015, among Ralph Lauren Corporation, Acqui Polo C.V., Polo Fin B.V. and Ralph Lauren Asia Pacific Limited, as the borrowers, the lenders party thereto, Bank of America, N.A., as syndication agent, Wells Fargo Bank, N.A., HSBS Bank USA, N.A. and Deutsche Bank Securities Inc., as co-documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.1 to the Form 8-K dated February 18, 2015)
|
10.41
|
|
Amended and Restated Polo Ralph Lauren Supplemental Executive Retirement Plan (filed as Exhibit 10.1 to the Company's Form 10-Q for the quarterly period ended December 31, 2005)†
|
12.1*
|
|
Computation of Ratio of Earnings to Fixed Charges
|
14.1
|
|
Code of Ethics for Principal Executive Officers and Senior Financial Officers (filed as Exhibit 14.1 to the Company's Annual Report on Form 10-K for the fiscal year ended March 29, 2003)
|
21.1*
|
|
List of Significant Subsidiaries of the Company
|
23.1*
|
|
Consent of Ernst & Young LLP
|
31.1*
|
|
Certification of Ralph Lauren required by 17 CFR 240.13a-14(a)
|
31.2*
|
|
Certification of Robert L. Madore required by 17 CFR 240.13a-14(a)
|
32.1*
|
|
Certification of Ralph Lauren Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2*
|
|
Certification of Robert L. Madore Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101*
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at March 28, 2015 and March 29, 2014, (ii) the Consolidated Statements of Income for the fiscal years ended March 28, 2015, March 29, 2014, and March 30, 2013, (iii) the Consolidated Statements of Comprehensive Income for the fiscal years ended March 28, 2015, March 29, 2014, and March 30, 2013, (iv) the Consolidated Statements of Cash Flows for the fiscal years ended March 28, 2015, March 29, 2014, and March 30, 2013, (v) the Consolidated Statements of Equity for the fiscal years ended March 28, 2015, March 29, 2014, and March 30, 2013, and (vi) the Notes to the Consolidated Financial Statements.
|
|
*
|
Filed herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
70
|
|
|
|
RALPH LAUREN CORPORATION
|
|
|
|
|
By:
|
/
S
/ ROBERT L. MADORE
|
|
|
Robert L. Madore
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Date: May 15, 2015
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ RALPH LAUREN
|
|
Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)
|
|
May 15, 2015
|
Ralph Lauren
|
|
|||
|
|
|
|
|
/
S
/ JACKWYN L. NEMEROV
|
|
President & Chief Operating Officer and Director
|
|
May 15, 2015
|
Jackwyn L. Nemerov
|
|
|||
|
|
|
|
|
/
S
/ ROBERT L. MADORE
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
May 15, 2015
|
Robert L. Madore
|
|
|||
|
|
|
|
|
/
S
/ JOHN R. ALCHIN
|
|
Director
|
|
May 15, 2015
|
John R. Alchin
|
|
|||
|
|
|
|
|
/
S
/ ARNOLD H. ARONSON
|
|
Director
|
|
May 15, 2015
|
Arnold H. Aronson
|
|
|||
|
|
|
|
|
/
S
/ FRANK A. BENNACK, JR.
|
|
Director
|
|
May 15, 2015
|
Frank A. Bennack, Jr.
|
|
|||
|
|
|
|
|
/
S
/ DR. JOYCE F. BROWN
|
|
Director
|
|
May 15, 2015
|
Dr. Joyce F. Brown
|
|
|||
|
|
|
|
|
/
S
/ JOEL L. FLEISHMAN
|
|
Director
|
|
May 15, 2015
|
Joel L. Fleishman
|
|
|||
|
|
|
|
|
/
S
/ HUBERT JOLY
|
|
Director
|
|
May 15, 2015
|
Hubert Joly
|
|
|||
|
|
|
|
|
/s/ DAVID LAUREN
|
|
Director
|
|
May 15, 2015
|
David Lauren
|
|
|
71
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ JUDITH MCHALE
|
|
Director
|
|
May 15, 2015
|
Judith McHale
|
|
|||
|
|
|
|
|
/
S
/ ROBERT C. WRIGHT
|
|
Director
|
|
May 15, 2015
|
Robert C. Wright
|
|
|
72
|
|
|
Page
|
|
Consolidated Financial Statements:
|
|
|
Supplementary Information:
|
|
|
|
||
EX-10.9
|
|
|
EX-10.13
|
|
|
EX-10.14
|
|
|
EX-10.15
|
|
|
EX-10.38
|
|
|
EX-10.39
|
|
|
EX-12.1
|
|
|
EX-21.1
|
|
|
EX-23.1
|
|
|
EX-31.1
|
|
|
EX-31.2
|
|
|
EX-32.1
|
|
|
EX-32.2
|
|
|
EX-101
|
INSTANCE DOCUMENT
|
|
EX-101
|
SCHEMA DOCUMENT
|
|
EX-101
|
CALCULATION LINKBASE DOCUMENT
|
|
EX-101
|
LABELS LINKBASE DOCUMENT
|
|
EX-101
|
PRESENTATION LINKBASE DOCUMENT
|
|
EX-101
|
DEFINITION LINKBASE DOCUMENT
|
|
|
F-1
|
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
ASSETS
|
||||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
500
|
|
|
$
|
797
|
|
Short-term investments
|
|
644
|
|
|
488
|
|
||
Accounts receivable, net of allowances of $251 million and $270 million
|
|
655
|
|
|
588
|
|
||
Inventories
|
|
1,042
|
|
|
1,020
|
|
||
Income tax receivable
|
|
57
|
|
|
62
|
|
||
Deferred tax assets
|
|
145
|
|
|
150
|
|
||
Prepaid expenses and other current assets
|
|
281
|
|
|
224
|
|
||
Total current assets
|
|
3,324
|
|
|
3,329
|
|
||
Property and equipment, net
|
|
1,436
|
|
|
1,322
|
|
||
Deferred tax assets
|
|
45
|
|
|
39
|
|
||
Goodwill
|
|
903
|
|
|
964
|
|
||
Intangible assets, net
|
|
267
|
|
|
299
|
|
||
Other non-current assets
|
|
131
|
|
|
135
|
|
||
Total assets
|
|
$
|
6,106
|
|
|
$
|
6,088
|
|
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt
|
|
$
|
234
|
|
|
$
|
—
|
|
Accounts payable
|
|
210
|
|
|
203
|
|
||
Income tax payable
|
|
27
|
|
|
77
|
|
||
Accrued expenses and other current liabilities
|
|
715
|
|
|
690
|
|
||
Total current liabilities
|
|
1,186
|
|
|
970
|
|
||
Long-term debt
|
|
298
|
|
|
298
|
|
||
Non-current liability for unrecognized tax benefits
|
|
116
|
|
|
132
|
|
||
Other non-current liabilities
|
|
615
|
|
|
654
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
|
||||
Total liabilities
|
|
2,215
|
|
|
2,054
|
|
||
Equity:
|
|
|
|
|
||||
Class A common stock, par value $.01 per share; 100.0 million and 98.0 million shares issued; 60.4 million and 61.8 million shares outstanding
|
|
1
|
|
|
1
|
|
||
Class B common stock, par value $.01 per share; 25.9 million and 26.9 million shares issued and outstanding
|
|
—
|
|
|
—
|
|
||
Additional paid-in-capital
|
|
2,117
|
|
|
1,979
|
|
||
Retained earnings
|
|
5,787
|
|
|
5,257
|
|
||
Treasury stock, Class A, at cost; 39.6 million and 36.2 million shares
|
|
(3,849
|
)
|
|
(3,317
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
(165
|
)
|
|
114
|
|
||
Total equity
|
|
3,891
|
|
|
4,034
|
|
||
Total liabilities and equity
|
|
$
|
6,106
|
|
|
$
|
6,088
|
|
|
F-2
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions, except per share data)
|
||||||||||
Net sales
|
|
$
|
7,451
|
|
|
$
|
7,284
|
|
|
$
|
6,763
|
|
Licensing revenue
|
|
169
|
|
|
166
|
|
|
182
|
|
|||
Net revenues
|
|
7,620
|
|
|
7,450
|
|
|
6,945
|
|
|||
Cost of goods sold
(a)
|
|
(3,242
|
)
|
|
(3,140
|
)
|
|
(2,789
|
)
|
|||
Gross profit
|
|
4,378
|
|
|
4,310
|
|
|
4,156
|
|
|||
Selling, general, and administrative expenses
(a)
|
|
(3,301
|
)
|
|
(3,142
|
)
|
|
(2,971
|
)
|
|||
Amortization of intangible assets
|
|
(25
|
)
|
|
(35
|
)
|
|
(27
|
)
|
|||
Gain on acquisition of Chaps
|
|
—
|
|
|
16
|
|
|
—
|
|
|||
Impairments of assets
|
|
(7
|
)
|
|
(1
|
)
|
|
(19
|
)
|
|||
Restructuring and other charges
|
|
(10
|
)
|
|
(18
|
)
|
|
(12
|
)
|
|||
Total other operating expenses, net
|
|
(3,343
|
)
|
|
(3,180
|
)
|
|
(3,029
|
)
|
|||
Operating income
|
|
1,035
|
|
|
1,130
|
|
|
1,127
|
|
|||
Foreign currency losses
|
|
(26
|
)
|
|
(8
|
)
|
|
(12
|
)
|
|||
Interest expense
|
|
(17
|
)
|
|
(20
|
)
|
|
(22
|
)
|
|||
Interest and other income, net
|
|
6
|
|
|
3
|
|
|
6
|
|
|||
Equity in losses of equity-method investees
|
|
(11
|
)
|
|
(9
|
)
|
|
(10
|
)
|
|||
Income before provision for income taxes
|
|
987
|
|
|
1,096
|
|
|
1,089
|
|
|||
Provision for income taxes
|
|
(285
|
)
|
|
(320
|
)
|
|
(339
|
)
|
|||
Net income
|
|
$
|
702
|
|
|
$
|
776
|
|
|
$
|
750
|
|
|
|
|
|
|
|
|
||||||
Net income per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
7.96
|
|
|
$
|
8.55
|
|
|
$
|
8.21
|
|
Diluted
|
|
$
|
7.88
|
|
|
$
|
8.43
|
|
|
$
|
8.00
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
88.2
|
|
|
90.7
|
|
|
91.3
|
|
|||
Diluted
|
|
89.1
|
|
|
92.0
|
|
|
93.7
|
|
|||
Dividends declared per share
|
|
$
|
1.85
|
|
|
$
|
1.70
|
|
|
$
|
1.60
|
|
(a)
Includes total depreciation expense of:
|
|
$
|
(269
|
)
|
|
$
|
(223
|
)
|
|
$
|
(206
|
)
|
|
F-3
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Net income
|
|
$
|
702
|
|
|
$
|
776
|
|
|
$
|
750
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation gains (losses)
|
|
(318
|
)
|
|
52
|
|
|
(93
|
)
|
|||
Net gains (losses) on derivative financial instruments
|
|
47
|
|
|
(27
|
)
|
|
(13
|
)
|
|||
Net gains (losses) on available-for-sale investments
|
|
—
|
|
|
(5
|
)
|
|
4
|
|
|||
Net losses on defined benefit plans
|
|
(8
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
(279
|
)
|
|
20
|
|
|
(103
|
)
|
|||
Total comprehensive income
|
|
$
|
423
|
|
|
$
|
796
|
|
|
$
|
647
|
|
|
F-4
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
702
|
|
|
$
|
776
|
|
|
$
|
750
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
|
294
|
|
|
258
|
|
|
233
|
|
|||
Deferred income tax expense
|
|
11
|
|
|
1
|
|
|
14
|
|
|||
Equity in losses of equity-method investees
|
|
11
|
|
|
9
|
|
|
10
|
|
|||
Non-cash stock-based compensation expense
|
|
81
|
|
|
93
|
|
|
88
|
|
|||
Gain on acquisition of Chaps
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|||
Non-cash impairment of assets
|
|
7
|
|
|
1
|
|
|
19
|
|
|||
Excess tax benefits from stock-based compensation arrangements
|
|
(8
|
)
|
|
(34
|
)
|
|
(41
|
)
|
|||
Other non-cash charges (benefits), net
|
|
(25
|
)
|
|
6
|
|
|
3
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(96
|
)
|
|
(104
|
)
|
|
82
|
|
|||
Inventories
|
|
(97
|
)
|
|
(77
|
)
|
|
(68
|
)
|
|||
Prepaid expenses and other current assets
|
|
(96
|
)
|
|
(56
|
)
|
|
4
|
|
|||
Accounts payable and accrued liabilities
|
|
50
|
|
|
43
|
|
|
(57
|
)
|
|||
Income tax receivables and payables
|
|
(22
|
)
|
|
59
|
|
|
(13
|
)
|
|||
Deferred income
|
|
(21
|
)
|
|
(18
|
)
|
|
(30
|
)
|
|||
Other balance sheet changes, net
|
|
103
|
|
|
(34
|
)
|
|
25
|
|
|||
Net cash provided by operating activities
|
|
894
|
|
|
907
|
|
|
1,019
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(391
|
)
|
|
(390
|
)
|
|
(276
|
)
|
|||
Purchases of investments
|
|
(1,398
|
)
|
|
(1,067
|
)
|
|
(876
|
)
|
|||
Proceeds from sales and maturities of investments
|
|
1,113
|
|
|
1,011
|
|
|
1,058
|
|
|||
Acquisitions and ventures
|
|
(12
|
)
|
|
(40
|
)
|
|
(22
|
)
|
|||
Change in restricted cash deposits
|
|
(1
|
)
|
|
(2
|
)
|
|
3
|
|
|||
Net cash used in investing activities
|
|
(689
|
)
|
|
(488
|
)
|
|
(113
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from issuance of short-term debt
|
|
2,808
|
|
|
—
|
|
|
—
|
|
|||
Repayments of short-term debt
|
|
(2,574
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
300
|
|
|
—
|
|
|||
Repayments of current maturities of long-term debt
|
|
—
|
|
|
(269
|
)
|
|
—
|
|
|||
Payments of capital lease obligations
|
|
(24
|
)
|
|
(9
|
)
|
|
(9
|
)
|
|||
Payments of dividends
|
|
(158
|
)
|
|
(149
|
)
|
|
(128
|
)
|
|||
Repurchases of common stock, including shares surrendered for tax withholdings
|
|
(532
|
)
|
|
(558
|
)
|
|
(497
|
)
|
|||
Prepayments of common stock repurchases
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||
Proceeds from exercise of stock options
|
|
52
|
|
|
52
|
|
|
49
|
|
|||
Excess tax benefits from stock-based compensation arrangements
|
|
8
|
|
|
34
|
|
|
41
|
|
|||
Other financing activities
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Net cash used in financing activities
|
|
(421
|
)
|
|
(599
|
)
|
|
(595
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(81
|
)
|
|
3
|
|
|
(9
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
(297
|
)
|
|
(177
|
)
|
|
302
|
|
|||
Cash and cash equivalents at beginning of period
|
|
797
|
|
|
974
|
|
|
672
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
500
|
|
|
$
|
797
|
|
|
$
|
974
|
|
|
F-5
|
|
RALPH LAUREN CORPORATION
|
||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF EQUITY
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
Additional
|
|
|
|
Treasury Stock
|
|
|
|
|
||||||||||||||||
|
|
Common Stock
(a)
|
|
Paid-in
|
|
Retained
|
|
at Cost
|
|
|
|
Total
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Shares
|
|
Amount
|
|
AOCI
(b)
|
|
Equity
|
||||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||
Balance at March 31, 2012
|
|
121.9
|
|
|
$
|
1
|
|
|
$
|
1,624
|
|
|
$
|
4,043
|
|
|
29.2
|
|
|
$
|
(2,212
|
)
|
|
$
|
197
|
|
|
$
|
3,653
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(103
|
)
|
|
|
|||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
647
|
|
|||||||||||||
Dividends declared
|
|
|
|
|
|
|
|
(146
|
)
|
|
|
|
|
|
|
|
(146
|
)
|
||||||||||||
Repurchases of common stock
|
|
|
|
|
|
(50
|
)
|
(c)
|
|
|
3.4
|
|
|
(497
|
)
|
|
|
|
(547
|
)
|
||||||||||
Stock-based compensation
|
|
|
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
88
|
|
||||||||||||
Shares issued and tax benefits recognized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
pursuant to stock-based compensation plans
(d)
|
|
1.6
|
|
|
—
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
90
|
|
||||||||||
Balance at March 30, 2013
|
|
123.5
|
|
|
$
|
1
|
|
|
$
|
1,752
|
|
|
$
|
4,647
|
|
|
32.6
|
|
|
$
|
(2,709
|
)
|
|
$
|
94
|
|
|
$
|
3,785
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
776
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
|
|||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
796
|
|
|||||||||||||
Dividends declared
|
|
|
|
|
|
|
|
(153
|
)
|
|
|
|
|
|
|
|
(153
|
)
|
||||||||||||
Repurchases of common stock
|
|
|
|
|
|
50
|
|
(c)
|
|
|
3.6
|
|
|
(608
|
)
|
|
|
|
(558
|
)
|
||||||||||
Stock-based compensation
|
|
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
93
|
|
||||||||||||
Shares issued and tax benefits recognized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
pursuant to stock-based compensation plans
(d)
|
|
1.4
|
|
|
—
|
|
|
86
|
|
|
|
|
|
|
|
|
|
|
86
|
|
||||||||||
Conversion of stock-based compensation awards
(e)
|
|
|
|
|
|
(2
|
)
|
|
(13
|
)
|
|
|
|
|
|
|
|
(15
|
)
|
|||||||||||
Balance at March 29, 2014
|
|
124.9
|
|
|
$
|
1
|
|
|
$
|
1,979
|
|
|
$
|
5,257
|
|
|
36.2
|
|
|
$
|
(3,317
|
)
|
|
$
|
114
|
|
|
$
|
4,034
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
702
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(279
|
)
|
|
|
|||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
423
|
|
|||||||||||||
Dividends declared
|
|
|
|
|
|
|
|
(161
|
)
|
|
|
|
|
|
|
|
(161
|
)
|
||||||||||||
Repurchases of common stock
|
|
|
|
|
|
|
|
|
|
3.4
|
|
|
(532
|
)
|
|
|
|
(532
|
)
|
|||||||||||
Stock-based compensation
|
|
|
|
|
|
81
|
|
|
|
|
|
|
|
|
|
|
81
|
|
||||||||||||
Shares issued and tax benefits recognized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
pursuant to stock-based compensation plans
(d)
|
|
1.0
|
|
|
—
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
60
|
|
||||||||||
Conversion of stock-based compensation awards
(e)
|
|
|
|
|
|
(3
|
)
|
|
(11
|
)
|
|
|
|
|
|
|
|
(14
|
)
|
|||||||||||
Balance at March 28, 2015
|
|
125.9
|
|
|
$
|
1
|
|
|
$
|
2,117
|
|
|
$
|
5,787
|
|
|
39.6
|
|
|
$
|
(3,849
|
)
|
|
$
|
(165
|
)
|
|
$
|
3,891
|
|
|
(a)
|
Includes Class A and Class B common stock. In Fiscal 2015, Fiscal 2014, and Fiscal 2013,
1.0 million
,
3.0 million
, and
1.0 million
shares, respectively, of Class B common stock were converted into an equal number of shares of Class A common stock pursuant to the terms of the Class B common stock (see
Note 18
).
|
(b)
|
Accumulated other comprehensive income (loss).
|
(c)
|
Relates to a
$50 million
payment made in March 2013 under a prepaid share repurchase program, which resulted in the delivery of the related shares at the conclusion of the repurchase term in Fiscal 2014 (see
Note 18
).
|
(d)
|
Includes excess tax benefits relating to stock-based compensation plans of approximately
$8 million
,
$34 million
, and
$41 million
in
Fiscal 2015
,
Fiscal 2014
, and
Fiscal 2013
, respectively.
|
(e)
|
Includes the conversion of certain fully-vested and expensed stock-based compensation awards to cash contributions into a deferred compensation account (see
Note 18
).
|
|
F-6
|
|
1.
|
Description of Business
|
2.
|
Basis of Presentation
|
|
F-7
|
|
3.
|
Summary of Significant Accounting Policies
|
|
F-8
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|||
|
|
|
|||||||
Basic shares
|
|
88.2
|
|
|
90.7
|
|
|
91.3
|
|
Dilutive effect of stock options, restricted stock, and RSUs
|
|
0.9
|
|
|
1.3
|
|
|
2.4
|
|
Diluted shares
|
|
89.1
|
|
|
92.0
|
|
|
93.7
|
|
|
F-9
|
|
|
F-10
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Beginning reserve balance
|
|
$
|
254
|
|
|
$
|
230
|
|
|
$
|
247
|
|
Amount charged against revenue to increase reserve
|
|
756
|
|
|
758
|
|
|
690
|
|
|||
Amount credited against customer accounts to decrease reserve
|
|
(749
|
)
|
|
(739
|
)
|
|
(701
|
)
|
|||
Foreign currency translation
|
|
(21
|
)
|
|
5
|
|
|
(6
|
)
|
|||
Ending reserve balance
|
|
$
|
240
|
|
|
$
|
254
|
|
|
$
|
230
|
|
|
F-11
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Beginning reserve balance
|
|
$
|
16
|
|
|
$
|
15
|
|
|
$
|
16
|
|
Amount recorded to expense to increase reserve
(a)
|
|
—
|
|
|
3
|
|
|
3
|
|
|||
Amount written-off against customer accounts to decrease reserve
|
|
(2
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|||
Foreign currency translation
|
|
(3
|
)
|
|
1
|
|
|
(1
|
)
|
|||
Ending reserve balance
|
|
$
|
11
|
|
|
$
|
16
|
|
|
$
|
15
|
|
|
(a)
|
Amounts recorded to bad debt expense are included within SG&A expenses in the consolidated statements of income.
|
|
F-12
|
|
|
F-13
|
|
|
F-14
|
|
•
|
Forecasted Inventory Transactions
— recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold to a third party.
|
•
|
Intercompany Royalty Payments and Marketing Contributions
— recognized within foreign currency gains (losses) generally in the period in which the related payments or contributions being hedged are received or paid.
|
4.
|
Recently Issued Accounting Standards
|
|
F-15
|
|
5.
|
Acquisitions
|
|
F-16
|
|
|
(a)
|
Represents the difference between the acquisition date fair value of net assets acquired and the contractually-defined purchase price under the Company's license agreement with Warnaco, which granted the Company the right to early-terminate the license upon PVH's acquisition of Warnaco in February 2013.
|
6.
|
Inventories
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Raw materials
|
|
$
|
3
|
|
|
$
|
3
|
|
Work-in-process
|
|
2
|
|
|
2
|
|
||
Finished goods
|
|
1,037
|
|
|
1,015
|
|
||
Total inventories
|
|
$
|
1,042
|
|
|
$
|
1,020
|
|
|
F-17
|
|
7.
|
Property and Equipment
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Land and improvements
|
|
$
|
17
|
|
|
$
|
17
|
|
Buildings and improvements
|
|
409
|
|
|
183
|
|
||
Furniture and fixtures
|
|
686
|
|
|
661
|
|
||
Machinery and equipment
|
|
317
|
|
|
245
|
|
||
Capitalized software
|
|
402
|
|
|
366
|
|
||
Leasehold improvements
|
|
1,185
|
|
|
1,064
|
|
||
Construction in progress
|
|
99
|
|
|
312
|
|
||
|
|
3,115
|
|
|
2,848
|
|
||
Less: accumulated depreciation
|
|
(1,679
|
)
|
|
(1,526
|
)
|
||
Property and equipment, net
|
|
$
|
1,436
|
|
|
$
|
1,322
|
|
8.
|
Goodwill and Other Intangible Assets
|
|
|
Wholesale
|
|
Retail
|
|
Licensing
|
|
Total
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance at March 30, 2013
|
|
$
|
614
|
|
|
$
|
214
|
|
|
$
|
140
|
|
|
$
|
968
|
|
Foreign currency translation
|
|
3
|
|
|
(4
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||
Balance at March 29, 2014
|
|
617
|
|
|
210
|
|
|
137
|
|
|
964
|
|
||||
Foreign currency translation
|
|
(46
|
)
|
|
(10
|
)
|
|
(5
|
)
|
|
(61
|
)
|
||||
Balance at March 28, 2015
|
|
$
|
571
|
|
|
$
|
200
|
|
|
$
|
132
|
|
|
$
|
903
|
|
|
F-18
|
|
|
|
March 28, 2015
|
|
March 29, 2014
|
|
||||||||||||||||||||
|
|
Gross Carrying Amount
|
|
Accum. Amort.
|
|
Net
|
|
Gross Carrying Amount
|
|
Accum. Amort.
|
|
Net
|
|
||||||||||||
|
|
(millions)
|
|
||||||||||||||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Re-acquired licensed trademarks
|
|
$
|
230
|
|
|
$
|
(112
|
)
|
|
$
|
118
|
|
|
$
|
234
|
|
|
$
|
(109
|
)
|
|
$
|
125
|
|
|
Customer relationships
|
|
247
|
|
|
(120
|
)
|
|
127
|
|
|
261
|
|
|
(112
|
)
|
|
149
|
|
|
||||||
Other
|
|
28
|
|
|
(13
|
)
|
|
15
|
|
|
29
|
|
|
(11
|
)
|
|
18
|
|
|
||||||
Total intangible assets subject to amortization
|
|
505
|
|
|
(245
|
)
|
|
260
|
|
|
524
|
|
|
(232
|
)
|
|
292
|
|
|
||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks and brands
|
|
7
|
|
|
N/A
|
|
|
7
|
|
|
7
|
|
|
N/A
|
|
|
7
|
|
|
||||||
Total intangible assets
|
|
$
|
512
|
|
|
$
|
(245
|
)
|
|
$
|
267
|
|
|
$
|
531
|
|
|
$
|
(232
|
)
|
|
$
|
299
|
|
|
|
|
Amortization Expense
|
||
|
|
(millions)
|
||
Fiscal 2016
|
|
$
|
24
|
|
Fiscal 2017
|
|
24
|
|
|
Fiscal 2018
|
|
24
|
|
|
Fiscal 2019
|
|
24
|
|
|
Fiscal 2020
|
|
23
|
|
|
Fiscal 2021 and thereafter
|
|
141
|
|
|
Total
|
|
$
|
260
|
|
|
F-19
|
|
9.
|
Other Current and Non-Current Assets
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Other taxes receivable
|
|
$
|
93
|
|
|
$
|
77
|
|
Derivative financial instruments
|
|
65
|
|
|
3
|
|
||
Prepaid rent expense
|
|
31
|
|
|
31
|
|
||
Tenant allowances receivable
|
|
14
|
|
|
22
|
|
||
Prepaid samples
|
|
12
|
|
|
13
|
|
||
Prepaid advertising and marketing
|
|
7
|
|
|
9
|
|
||
Restricted cash
|
|
2
|
|
|
5
|
|
||
Fixed asset advance
|
|
—
|
|
|
19
|
|
||
Other prepaid expenses and current assets
|
|
57
|
|
|
45
|
|
||
Total prepaid expenses and other current assets
|
|
$
|
281
|
|
|
$
|
224
|
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Restricted cash
|
|
$
|
36
|
|
|
$
|
42
|
|
Security deposits
|
|
28
|
|
|
27
|
|
||
Derivative financial instruments
|
|
22
|
|
|
5
|
|
||
Assets held under deferred compensation arrangements
|
|
—
|
|
|
20
|
|
||
Other non-current assets
|
|
45
|
|
|
41
|
|
||
Total other non-current assets
|
|
$
|
131
|
|
|
$
|
135
|
|
10.
|
Other Current and Non-Current Liabilities
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Accrued operating expenses
|
|
$
|
183
|
|
|
$
|
183
|
|
Accrued payroll and benefits
|
|
162
|
|
|
190
|
|
||
Other taxes payable
|
|
108
|
|
|
76
|
|
||
Accrued inventory
|
|
75
|
|
|
84
|
|
||
Accrued capital expenditures
|
|
62
|
|
|
45
|
|
||
Dividends payable
|
|
43
|
|
|
40
|
|
||
Deferred income
|
|
38
|
|
|
41
|
|
||
Capital lease obligations
|
|
19
|
|
|
16
|
|
||
Other accrued expenses and current liabilities
|
|
25
|
|
|
15
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
715
|
|
|
$
|
690
|
|
|
F-20
|
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Capital lease obligations
|
|
$
|
238
|
|
|
$
|
255
|
|
Deferred rent obligations
|
|
219
|
|
|
224
|
|
||
Deferred tax liabilities
|
|
87
|
|
|
81
|
|
||
Deferred income
|
|
20
|
|
|
39
|
|
||
Deferred compensation
|
|
9
|
|
|
29
|
|
||
Other non-current liabilities
|
|
42
|
|
|
26
|
|
||
Total other non-current liabilities
|
|
$
|
615
|
|
|
$
|
654
|
|
11.
|
Impairments of Assets
|
12.
|
Restructuring and Other Charges
|
|
F-21
|
|
13.
|
Income Taxes
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Domestic
|
|
$
|
620
|
|
|
$
|
710
|
|
|
$
|
672
|
|
Foreign
|
|
367
|
|
|
386
|
|
|
417
|
|
|||
Total income before provision for income taxes
|
|
$
|
987
|
|
|
$
|
1,096
|
|
|
$
|
1,089
|
|
|
F-22
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
(a)
|
|
$
|
161
|
|
|
$
|
211
|
|
|
$
|
189
|
|
State and local
(a)
|
|
35
|
|
|
51
|
|
|
42
|
|
|||
Foreign
|
|
78
|
|
|
57
|
|
|
94
|
|
|||
|
|
274
|
|
|
319
|
|
|
325
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
22
|
|
|
(4
|
)
|
|
9
|
|
|||
State and local
|
|
3
|
|
|
1
|
|
|
5
|
|
|||
Foreign
|
|
(14
|
)
|
|
4
|
|
|
—
|
|
|||
|
|
11
|
|
|
1
|
|
|
14
|
|
|||
Total provision for income taxes
|
|
$
|
285
|
|
|
$
|
320
|
|
|
$
|
339
|
|
|
(a)
|
Excludes federal, state, and local tax benefits of approximately
$8 million
,
$34 million
, and
$41 million
in
Fiscal 2015
,
Fiscal 2014
, and
Fiscal 2013
, respectively, resulting from stock-based compensation arrangements. Such amounts were recorded within equity.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Provision for income taxes at the U.S. federal statutory rate
|
|
$
|
346
|
|
|
$
|
384
|
|
|
$
|
381
|
|
Increase (decrease) due to:
|
|
|
|
|
|
|
||||||
State and local income taxes, net of federal benefit
|
|
21
|
|
|
29
|
|
|
28
|
|
|||
Foreign income taxed at different rates, net of U.S. foreign tax credits
|
|
(96
|
)
|
|
(89
|
)
|
|
(75
|
)
|
|||
Unrecognized tax benefits and settlements of tax examinations
|
|
11
|
|
|
(5
|
)
|
|
6
|
|
|||
Other
|
|
3
|
|
|
1
|
|
|
(1
|
)
|
|||
Total provision for income taxes
|
|
$
|
285
|
|
|
$
|
320
|
|
|
$
|
339
|
|
Effective tax rate
(a)
|
|
28.9
|
%
|
|
29.2
|
%
|
|
31.1
|
%
|
|
(a)
|
Effective tax rate is calculated by dividing the provision for income taxes by income before provision for income taxes.
|
|
F-23
|
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Current deferred tax assets:
|
|
|
|
|
||||
Receivable allowances and reserves
|
|
$
|
64
|
|
|
$
|
70
|
|
Deferred compensation
|
|
32
|
|
|
31
|
|
||
Inventory basis difference
|
|
24
|
|
|
30
|
|
||
Other
|
|
15
|
|
|
20
|
|
||
Valuation allowance
|
|
—
|
|
|
(1
|
)
|
||
Net current deferred tax assets
(a)
|
|
135
|
|
|
150
|
|
||
|
|
|
|
|
||||
Non-current deferred tax assets (liabilities):
|
|
|
|
|
||||
Goodwill and other intangible assets
|
|
(209
|
)
|
|
(219
|
)
|
||
Property and equipment
|
|
(86
|
)
|
|
(90
|
)
|
||
Cumulative translation adjustment and hedges
|
|
(1
|
)
|
|
(8
|
)
|
||
Lease obligations
|
|
86
|
|
|
92
|
|
||
Deferred compensation
|
|
76
|
|
|
79
|
|
||
Unrecognized tax benefits
|
|
30
|
|
|
46
|
|
||
Net operating loss carryforwards
|
|
19
|
|
|
17
|
|
||
Deferred rent
|
|
18
|
|
|
19
|
|
||
Transfer pricing
|
|
14
|
|
|
16
|
|
||
Deferred income
|
|
12
|
|
|
18
|
|
||
Other
|
|
7
|
|
|
(1
|
)
|
||
Valuation allowance
|
|
(8
|
)
|
|
(11
|
)
|
||
Net non-current deferred tax liabilities
(b)
|
|
(42
|
)
|
|
(42
|
)
|
||
Net deferred tax assets
|
|
$
|
93
|
|
|
$
|
108
|
|
|
(a)
|
The net current deferred tax balance as of
March 28, 2015
included current deferred tax liabilities of
$10 million
recorded within accrued expenses and other current liabilities in the consolidated balance sheets.
|
(b)
|
The net non-current deferred tax balances as of
March 28, 2015
and
March 29, 2014
were comprised of non-current deferred tax assets of
$45 million
and
$39 million
, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of
$87 million
and
$81 million
, respectively, recorded within other non-current liabilities in the consolidated balance sheets.
|
|
F-24
|
|
|
|
Fiscal Years Ended
|
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|
||||||
|
|
(millions)
|
|
||||||||||
Unrecognized tax benefits beginning balance
|
|
$
|
83
|
|
|
$
|
100
|
|
|
$
|
129
|
|
|
Additions related to current period tax positions
|
|
5
|
|
|
6
|
|
|
4
|
|
|
|||
Additions related to prior period tax positions
|
|
10
|
|
|
12
|
|
|
12
|
|
|
|||
Reductions related to prior period tax positions
|
|
(1
|
)
|
|
(13
|
)
|
(b)
|
(32
|
)
|
(c)
|
|||
Reductions related to expiration of statutes of limitations
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
|||
Reductions related to settlements with taxing authorities
|
|
(25
|
)
|
(a)
|
(23
|
)
|
(b)
|
(10
|
)
|
(c)
|
|||
Additions (reductions) related to foreign currency translation
|
|
(2
|
)
|
|
3
|
|
|
(2
|
)
|
|
|||
Unrecognized tax benefits ending balance
|
|
$
|
69
|
|
|
$
|
83
|
|
|
$
|
100
|
|
|
|
(a)
|
Includes a
$20 million
decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2015 for the taxable years ended April 2, 2011 and April 3, 2012.
|
(b)
|
Includes a
$29 million
decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2014 for the taxable years ended April 3, 2004 and April 2, 2005.
|
(c)
|
Includes a
$34 million
decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2013 in connection with a tax examination for the taxable years ended March 29, 2008 through April 3, 2010.
|
|
F-25
|
|
|
|
Fiscal Years Ended
|
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|
||||||
|
|
(millions)
|
|
||||||||||
Accrued interest and penalties beginning balance
|
|
$
|
49
|
|
|
$
|
50
|
|
|
$
|
39
|
|
|
Net additions charged to expense
|
|
6
|
|
|
6
|
|
|
22
|
|
(a)
|
|||
Reductions related to prior period tax positions
|
|
(1
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|
|||
Reductions related to settlements with taxing authorities
|
|
(5
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
|||
Additions (reductions) related to foreign currency translation
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|
|||
Accrued interest and penalties ending balance
|
|
$
|
47
|
|
|
$
|
49
|
|
|
$
|
50
|
|
|
|
(a)
|
Includes a reserve of
$17 million
for an interest assessment on a prior year withholding tax. No underlying tax exposure exists. The interest assessed was not material to the Company's consolidated financial statements in any period.
|
14.
|
Debt
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
2.125% Senior Notes due September 26, 2018
(a)
|
|
$
|
298
|
|
|
$
|
298
|
|
Commercial paper notes
|
|
234
|
|
|
—
|
|
||
Total debt
|
|
532
|
|
|
298
|
|
||
Less: short-term debt
|
|
234
|
|
|
—
|
|
||
Total long-term debt
|
|
$
|
298
|
|
|
$
|
298
|
|
|
(a)
|
Net of
$2 million
of unamortized debt issuance costs as of both
March 28, 2015
and
March 29, 2014
.
|
|
F-26
|
|
|
F-27
|
|
•
|
China Credit Facility
— provides Ralph Lauren Trading (Shanghai) Co., Ltd. with a revolving line of credit of up to
100 million
Chinese Renminbi (approximately
$16 million
) through
April 7, 2016
, and may also be used to support bank guarantees. As of
March 28, 2015
, bank guarantees supported by this facility were not material.
|
•
|
Malaysia Credit Facility
— provides Ralph Lauren (Malaysia) Sdn Bhd with a revolving line of credit of up to
16 million
Malaysian Ringgit (approximately
$4 million
) through
September 30, 2015
.
|
•
|
South Korea Credit Facility
— provides Ralph Lauren (Korea) Ltd. with a revolving line of credit of up to
11 billion
South Korean Won (approximately
$10 million
) through
October 31, 2015
.
|
•
|
Taiwan Credit Facility
—
provides Ralph Lauren (Hong Kong) Retail Company Ltd., Taiwan Branch with a revolving line of credit of up to
59 million
New Taiwan Dollars (approximately
$2 million
) through
October 15, 2015
.
|
|
F-28
|
|
15.
|
Fair Value Measurements
|
•
|
Level 1
— inputs to the valuation methodology based on quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2
— inputs to the valuation methodology based on quoted prices for similar assets and liabilities in active markets for substantially the full term of the financial instrument; quoted prices for identical or similar instruments in markets that are not active for substantially the full term of the financial instrument; and model-derived valuations whose inputs or significant value drivers are observable.
|
•
|
Level 3
— inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement.
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Financial assets recorded at fair value:
|
|
|
|
|
||||
Government bonds — U.S.
(a)
|
|
$
|
—
|
|
|
$
|
1
|
|
Corporate bonds — non-U.S.
(a)
|
|
8
|
|
|
—
|
|
||
Other available-for-sale investments
(b)
|
|
—
|
|
|
2
|
|
||
Derivative financial instruments
(b)
|
|
87
|
|
|
8
|
|
||
Total
|
|
$
|
95
|
|
|
$
|
11
|
|
Financial liabilities recorded at fair value:
|
|
|
|
|
||||
Derivative financial instruments
(b)
|
|
$
|
19
|
|
|
$
|
7
|
|
Total
|
|
$
|
19
|
|
|
$
|
7
|
|
|
(a)
|
Based on Level 1 measurements.
|
(b)
|
Based on Level 2 measurements.
|
|
F-29
|
|
|
|
March 28, 2015
|
|
March 29, 2014
|
||||||||||||
|
|
Carrying Value
|
|
Fair Value
(a)
|
|
Carrying Value
|
|
Fair Value
(a)
|
||||||||
|
|
(millions)
|
||||||||||||||
2.125% Senior Notes
|
|
$
|
298
|
|
(b)
|
$
|
304
|
|
|
$
|
298
|
|
(b)
|
$
|
300
|
|
Commercial paper notes
|
|
234
|
|
|
234
|
|
|
N/A
|
|
|
N/A
|
|
|
(a)
|
Based on Level 2 measurements.
|
(b)
|
Net of
$2 million
of unamortized debt issuance costs as of both
March 28, 2015
and
March 29, 2014
.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Aggregate carrying value of long-lived assets written down to fair value
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
19
|
|
Impairment charges
(a)
|
|
(7
|
)
|
|
(1
|
)
|
|
(19
|
)
|
|
(a)
|
See
Note 11
for details of impairment charges recorded in
Fiscal 2015
,
Fiscal 2014
, and
Fiscal 2013
.
|
|
F-30
|
|
16.
|
Financial Instruments
|
|
|
Notional Amounts
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||||||||
Derivative Instrument
(a)
|
|
March 28, 2015
|
|
March 29, 2014
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 28,
2015 |
|
March 29,
2014 |
||||||||||||||||||||
|
|
|
|
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||||
Designated Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FC — Inventory purchases
|
|
$
|
587
|
|
|
$
|
476
|
|
|
PP
|
|
$
|
49
|
|
|
(c)
|
|
$
|
2
|
|
|
AE
|
|
$
|
9
|
|
|
AE
|
|
$
|
5
|
|
FC — Other
(d)
|
|
118
|
|
|
223
|
|
|
PP
|
|
5
|
|
|
—
|
|
—
|
|
|
AE
|
|
1
|
|
|
AE
|
|
2
|
|
||||||
Total Designated Hedges
|
|
$
|
705
|
|
|
$
|
699
|
|
|
|
|
$
|
54
|
|
|
|
|
$
|
2
|
|
|
|
|
$
|
10
|
|
|
|
|
$
|
7
|
|
Undesignated Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FC — Other
(e)
|
|
$
|
464
|
|
|
$
|
280
|
|
|
(f)
|
|
$
|
33
|
|
|
(g)
|
|
$
|
6
|
|
|
(h)
|
|
$
|
9
|
|
|
—
|
|
$
|
—
|
|
Total Hedges
|
|
$
|
1,169
|
|
|
$
|
979
|
|
|
|
|
$
|
87
|
|
|
|
|
$
|
8
|
|
|
|
|
$
|
19
|
|
|
|
|
$
|
7
|
|
|
(a)
|
FC = Forward foreign currency exchange contracts.
|
(b)
|
PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities.
|
(c)
|
$1 million
included within prepaid expenses and other current assets and
$1 million
included within other non-current assets.
|
(d)
|
Primarily includes designated hedges of foreign currency-denominated intercompany royalty payments, marketing contributions, and other operational exposures.
|
(e)
|
Primarily includes undesignated hedges of foreign currency-denominated intercompany loans.
|
(f)
|
$11 million
included within prepaid expenses and other current assets and
$22 million
included within other non-current assets.
|
(g)
|
$2 million
included within prepaid expenses and other current assets and
$4 million
included within other non-current assets.
|
(h)
|
$8 million
included within accrued expenses and other current liabilities and
$1 million
included within other non-current liabilities.
|
|
F-31
|
|
|
|
March 28, 2015
|
|
March 29, 2014
|
||||||||||||||||||||
Derivative Instrument
|
|
Gross Amounts Presented in the Balance Sheet
|
|
Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Arrangements
|
|
Net
Amount |
|
Gross Amounts Presented in the Balance Sheet
|
|
Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Arrangements
|
|
Net
Amount |
||||||||||||
|
|
(millions)
|
||||||||||||||||||||||
FC — Derivative assets
|
|
$
|
87
|
|
|
$
|
(14
|
)
|
|
$
|
73
|
|
|
$
|
8
|
|
|
$
|
(1
|
)
|
|
$
|
7
|
|
FC — Derivative liabilities
|
|
$
|
19
|
|
|
$
|
(14
|
)
|
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
6
|
|
|
|
Gains (Losses)
Recognized in OCI
|
|
Gains (Losses) Reclassified
from AOCI to Earnings
|
|
Location of Gains (Losses) Reclassified from
AOCI to Earnings
|
||||||||||||||||||||
|
|
Fiscal Years Ended
|
|
Fiscal Years Ended
|
|
|||||||||||||||||||||
Derivative Instrument
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|
|||||||||||||
|
|
(millions)
|
|
|
||||||||||||||||||||||
Designated Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FC — Inventory purchases
|
|
$
|
50
|
|
|
$
|
(10
|
)
|
|
$
|
21
|
|
|
$
|
3
|
|
|
$
|
10
|
|
|
$
|
32
|
|
|
Cost of goods sold
|
FC — Other
|
|
19
|
|
|
—
|
|
|
(1
|
)
|
|
14
|
|
|
—
|
|
|
4
|
|
|
Foreign currency gains (losses)
|
||||||
|
|
$
|
69
|
|
|
$
|
(10
|
)
|
|
$
|
20
|
|
|
$
|
17
|
|
|
$
|
10
|
|
|
$
|
36
|
|
|
|
Designated Hedge of Net Investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Euro Debt
(a)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Total Designated Hedges
|
|
$
|
69
|
|
|
$
|
(10
|
)
|
|
$
|
31
|
|
|
$
|
17
|
|
|
$
|
10
|
|
|
$
|
36
|
|
|
|
|
(a)
|
Amounts recognized in OCI relate to remeasurement of the Euro Debt (see
Note 14
), which was repaid in October 2013, and would be recognized in earnings only upon the sale or liquidation of the hedged net investment.
|
|
F-32
|
|
|
|
Gains (Losses)
Recognized in Earnings
|
|
Location of Gains (Losses)
Recognized in Earnings
|
||||||||||
|
|
Fiscal Years Ended
|
|
|||||||||||
Derivative Instrument
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|
|||||||
|
|
(millions)
|
|
|
||||||||||
Undesignated Hedges:
|
|
|
|
|
|
|
|
|
||||||
FC — Other
|
|
$
|
18
|
|
|
$
|
20
|
|
|
$
|
(4
|
)
|
|
Foreign currency gains (losses)
|
Total Undesignated Hedges
|
|
$
|
18
|
|
|
$
|
20
|
|
|
$
|
(4
|
)
|
|
|
17.
|
Commitments and Contingencies
|
|
F-33
|
|
|
|
Minimum Operating
Lease Payments
(a)(b)
|
||
|
|
(millions)
|
||
Fiscal 2016
|
|
$
|
322
|
|
Fiscal 2017
|
|
297
|
|
|
Fiscal 2018
|
|
282
|
|
|
Fiscal 2019
|
|
257
|
|
|
Fiscal 2020
|
|
229
|
|
|
Fiscal 2021 and thereafter
|
|
733
|
|
|
Total net minimum rental payments
|
|
$
|
2,120
|
|
|
(a)
|
Net of sublease income, which is not significant in any period.
|
(b)
|
Includes a
$66 million
operating lease obligation related to the land portion of the build-to-suit lease agreement for the Company's Polo flagship store on Fifth Avenue in New York City, as further described below.
|
|
|
Minimum Capital
Lease Payments
(a)(b)
|
||
|
|
(millions)
|
||
Fiscal 2016
|
|
$
|
26
|
|
Fiscal 2017
|
|
25
|
|
|
Fiscal 2018
|
|
24
|
|
|
Fiscal 2019
|
|
22
|
|
|
Fiscal 2020
|
|
24
|
|
|
Fiscal 2021 and thereafter
|
|
69
|
|
|
Total net minimum rental payments
|
|
190
|
|
|
Less: amount representing interest
|
|
(34
|
)
|
|
Present value of net minimum rental payments
|
|
$
|
156
|
|
|
F-34
|
|
|
(a)
|
Net of sublease income, which is not significant in any period.
|
(b)
|
Includes lease payments related to the Company's build-to-suit lease agreement for its Polo flagship store on Fifth Avenue in New York City. The total remaining commitment related to this lease was
$210 million
as of
March 28, 2015
, comprised of a
$66 million
operating lease obligation related to the land portion of the lease (included in the minimum operating lease payments table above) and a
$144 million
obligation related to the building portion of the lease (included in this minimum capital lease payments table).
|
|
F-35
|
|
18.
|
Equity
|
|
F-36
|
|
|
Fiscal Years Ended
|
||||||||||
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
(in millions)
|
||||||||||
Cost of shares repurchased
|
$
|
500
|
|
|
$
|
548
|
|
(a)
|
$
|
450
|
|
Number of shares repurchased
|
3.2
|
|
|
3.2
|
|
(a)
|
3.0
|
|
|
(a)
|
Includes a
$50 million
prepayment made in March 2013 under a share repurchase program with a third-party financial institution, in exchange for the right to receive shares of the Company's Class A common stock at the conclusion of the
93
-day repurchase term. The
$50 million
prepayment was recorded as a reduction to additional paid-in capital in the Company's consolidated balance sheet as of March 30, 2013. The related
0.3 million
shares were delivered to the Company during Fiscal 2014, based on the volume-weighted average market price of the Company's Class A common stock over the
93
-day repurchase term, less a discount.
|
|
F-37
|
|
19.
|
Accumulated Other Comprehensive Income
|
|
|
Foreign Currency Translation Gains (Losses)
(a)
|
|
Net Unrealized Gains (Losses) on Derivative Financial Instruments
(b)
|
|
Net Unrealized Gains (Losses) on Available-for-Sale Investments
(c)
|
|
Net Unrealized Gains (Losses) on Defined Benefit Plans
(d)
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Balance at March 31, 2012
|
|
$
|
166
|
|
|
$
|
36
|
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
|
$
|
197
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OCI before reclassifications
|
|
(93
|
)
|
|
19
|
|
|
4
|
|
|
(1
|
)
|
|
(71
|
)
|
|||||
Amounts reclassified from AOCI to earnings
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
|
(93
|
)
|
|
(13
|
)
|
|
4
|
|
|
(1
|
)
|
|
(103
|
)
|
|||||
Balance at March 30, 2013
|
|
73
|
|
|
23
|
|
|
5
|
|
|
(7
|
)
|
|
94
|
|
|||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OCI before reclassifications
|
|
52
|
|
|
(20
|
)
|
|
(4
|
)
|
|
—
|
|
|
28
|
|
|||||
Amounts reclassified from AOCI to earnings
|
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
|
52
|
|
|
(27
|
)
|
|
(5
|
)
|
|
—
|
|
|
20
|
|
|||||
Balance at March 29, 2014
|
|
125
|
|
|
(4
|
)
|
|
—
|
|
|
(7
|
)
|
|
114
|
|
|||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OCI before reclassifications
|
|
(318
|
)
|
|
62
|
|
|
—
|
|
|
(9
|
)
|
|
(265
|
)
|
|||||
Amounts reclassified from AOCI to earnings
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
1
|
|
|
(14
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
|
(318
|
)
|
|
47
|
|
|
—
|
|
|
(8
|
)
|
|
(279
|
)
|
|||||
Balance at March 28, 2015
|
|
$
|
(193
|
)
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
(165
|
)
|
|
(a)
|
OCI before reclassifications to earnings related to foreign currency translation gains (losses) is net of an income tax benefit of
$5 million
for Fiscal 2015, and is net of income tax provisions of
$2 million
and
$3 million
for Fiscal 2014 and Fiscal 2013, respectively.
|
(b)
|
OCI before reclassifications to earnings related to net unrealized gains (losses) on derivative financial instruments is net of income tax provisions of
$7 million
and
$1 million
for Fiscal 2015 and Fiscal 2013, respectively. The tax effect for Fiscal 2014 activity was not material. The tax effects on amounts reclassified to earnings are presented in a table below.
|
(c)
|
All amounts are presented net of taxes, which were not material.
|
(d)
|
OCI before reclassifications to earnings related to net unrealized gains (losses) on defined benefit plans is net of an income tax benefit of
$1 million
for Fiscal 2015. The tax effects for both Fiscal 2014 and Fiscal 2013 were not material. The tax effects on amounts reclassified to earnings were not material for any period presented.
|
|
F-38
|
|
|
|
Fiscal Years Ended
|
|
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|
Location of Gains (Losses)
Reclassified from AOCI
to Earnings
|
||||||
|
|
(millions)
|
|
|
||||||||||
Gains (losses) on derivative financial instruments
(a)
:
|
|
|
|
|
|
|
|
|
||||||
FC — Inventory purchases
|
|
$
|
3
|
|
|
$
|
10
|
|
|
$
|
32
|
|
|
Cost of goods sold
|
FC — Other
|
|
14
|
|
|
—
|
|
|
4
|
|
|
Foreign currency gains (losses)
|
|||
Tax effect
|
|
(2
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
Provision for income taxes
|
|||
Net of tax
|
|
$
|
15
|
|
|
$
|
7
|
|
|
$
|
32
|
|
|
|
|
(a)
|
FC = Forward foreign currency exchange contracts.
|
20.
|
Stock-based Compensation
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Compensation expense
|
|
$
|
81
|
|
|
$
|
93
|
|
(a)
|
$
|
88
|
|
Income tax benefit
|
|
$
|
(30
|
)
|
|
$
|
(34
|
)
|
|
$
|
(29
|
)
|
|
(a)
|
Includes approximately
$10 million
of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statement of income for Fiscal 2014 (see
Note 12
). All other stock-based compensation expense is recorded within SG&A expenses.
|
|
F-39
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|||
Expected term (years)
|
|
4.2
|
|
|
4.2
|
|
|
4.5
|
|
Expected volatility
|
|
30.2
|
%
|
|
32.9
|
%
|
|
44.3
|
%
|
Expected dividend yield
|
|
1.10
|
%
|
|
0.98
|
%
|
|
1.05
|
%
|
Risk-free interest rate
|
|
1.4
|
%
|
|
1.1
|
%
|
|
0.6
|
%
|
Weighted-average option grant date fair value
|
|
$37.91
|
|
|
$45.83
|
|
|
$47.89
|
|
|
|
Number of
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value
(a)
|
|||||
|
|
(thousands)
|
|
|
|
(years)
|
|
(millions)
|
|||||
Options outstanding at March 29, 2014
|
|
3,026
|
|
|
$
|
116.66
|
|
|
4.1
|
|
$
|
143
|
|
Granted
|
|
852
|
|
|
160.01
|
|
|
|
|
|
|||
Exercised
|
|
(533
|
)
|
|
98.47
|
|
|
|
|
|
|||
Cancelled/Forfeited
|
|
(120
|
)
|
|
165.96
|
|
|
|
|
|
|||
Options outstanding at March 28, 2015
|
|
3,225
|
|
|
$
|
129.28
|
|
|
4.0
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
|
|||||
Options vested and expected to vest at March 28, 2015
(b)
|
|
3,159
|
|
|
$
|
128.57
|
|
|
4.0
|
|
$
|
69
|
|
Options exercisable at March 28, 2015
|
|
1,802
|
|
|
$
|
101.89
|
|
|
2.6
|
|
$
|
69
|
|
|
(a)
|
Aggregate intrinsic value is the amount by which the market price of Class A common stock at the end of the period exceeds the exercise price of the stock option, multiplied by the number of options.
|
(b)
|
The number of options expected to vest takes into consideration expected forfeitures.
|
|
F-40
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Aggregate intrinsic value of stock options exercised
(a)
|
|
$
|
35
|
|
|
$
|
63
|
|
|
$
|
76
|
|
Cash received from the exercise of stock options
|
|
52
|
|
|
52
|
|
|
49
|
|
|||
Tax benefits realized on exercise of stock options
|
|
12
|
|
|
24
|
|
|
29
|
|
|
(a)
|
Aggregate intrinsic value is the amount by which the market price of Class A common stock exceeded the stock option's exercise price when exercised, multiplied by the number of options.
|
|
|
Restricted
Stock
|
|
Service-
based RSUs
|
||||||||||
|
|
Number of
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|
Number of
Shares
|
|
Weighted-Average Grant Date Fair Value
|
||||||
|
|
(thousands)
|
|
|
|
(thousands)
|
|
|
||||||
Nonvested at March 29, 2014
|
|
5
|
|
|
$
|
159.71
|
|
|
7
|
|
|
$
|
145.88
|
|
Granted
|
|
3
|
|
|
162.36
|
|
|
44
|
|
|
150.23
|
|
||
Vested
|
|
(3
|
)
|
|
152.40
|
|
|
(4
|
)
|
|
144.88
|
|
||
Nonvested at March 28, 2015
|
|
5
|
|
|
$
|
164.73
|
|
|
47
|
|
|
$
|
150.01
|
|
|
|
Restricted
Stock
|
|
Service-
based RSUs
|
||||
Total unrecognized compensation expense at March 28, 2015 (millions)
|
|
$
|
0.2
|
|
|
$
|
4.7
|
|
Weighted-average period expected to be recognized over (years)
|
|
1.5
|
|
|
1.6
|
|
|
F-41
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
Restricted Stock:
|
|
|
|
|
|
|
||||||
Weighted-average grant date fair value of awards granted
|
|
$
|
162.36
|
|
|
$
|
164.76
|
|
|
$
|
173.33
|
|
Total fair value of awards vested (millions)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Service-based RSUs:
|
|
|
|
|
|
|
||||||
Weighted-average grant date fair value of awards granted
|
|
$
|
150.23
|
|
|
N/A
|
|
|
$
|
150.17
|
|
|
Total fair value of awards vested (millions)
|
|
$
|
1
|
|
|
$
|
16
|
|
|
$
|
22
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
|||
Expected term (years)
|
|
3.0
|
|
|
2.9
|
|
|
3.0
|
|
Expected volatility
|
|
29.8
|
%
|
|
32.6
|
%
|
|
34.0
|
%
|
Expected dividend yield
|
|
1.09
|
%
|
|
0.98
|
%
|
|
1.13
|
%
|
Risk-free interest rate
|
|
0.9
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
Weighted-average grant date fair value
|
|
$169.47
|
|
|
$169.14
|
|
|
$136.16
|
|
|
F-42
|
|
|
|
Performance-based
RSUs — without TSR Modifier
|
|
Performance-based
RSUs — with TSR Modifier
|
||||||||||
|
|
Number of
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|
Number of
Shares
|
|
Weighted-Average Grant Date Fair Value
|
||||||
|
|
(thousands)
|
|
|
|
(thousands)
|
|
|
||||||
Nonvested at March 29, 2014
|
|
798
|
|
|
$
|
148.93
|
|
|
145
|
|
|
$
|
153.29
|
|
Granted
|
|
303
|
|
|
157.10
|
|
|
79
|
|
|
169.47
|
|
||
Change due to performance/market condition achievement
|
|
83
|
|
|
133.30
|
|
|
—
|
|
|
—
|
|
||
Vested
|
|
(422
|
)
|
|
139.78
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
|
(65
|
)
|
|
156.72
|
|
|
(10
|
)
|
|
166.44
|
|
||
Nonvested at March 28, 2015
|
|
697
|
|
|
$
|
155.47
|
|
|
214
|
|
|
$
|
158.65
|
|
|
|
Performance-based
RSUs — without TSR Modifier
|
|
Performance-based
RSUs — with TSR Modifier
|
||||
Total unrecognized compensation expense at March 28, 2015 (millions)
|
|
$
|
36
|
|
|
$
|
11
|
|
Weighted-average period expected to be recognized over (years)
|
|
1.6
|
|
|
1.8
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
Performance-based RSUs — without TSR Modifier:
|
|
|
|
|
|
|
||||||
Weighted-average grant date fair value of awards granted
|
|
$
|
157.10
|
|
|
$
|
171.93
|
|
|
$
|
137.45
|
|
Total fair value of awards vested (millions)
|
|
$
|
65
|
|
|
$
|
109
|
|
|
$
|
106
|
|
Performance-based RSUs — with TSR Modifier:
|
|
|
|
|
|
|
||||||
Weighted-average grant date fair value of awards granted
|
|
$
|
169.47
|
|
|
$
|
169.14
|
|
|
$
|
136.16
|
|
Total fair value of awards vested (millions)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
21.
|
Employee Benefit Plans
|
|
F-43
|
|
|
F-44
|
|
22.
|
Segment Information
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Net revenues:
|
|
|
|
|
|
|
||||||
Wholesale
|
|
$
|
3,495
|
|
|
$
|
3,486
|
|
|
$
|
3,138
|
|
Retail
|
|
3,956
|
|
|
3,798
|
|
|
3,625
|
|
|||
Licensing
|
|
169
|
|
|
166
|
|
|
182
|
|
|||
Total net revenues
(a)
|
|
$
|
7,620
|
|
|
$
|
7,450
|
|
|
$
|
6,945
|
|
|
(a)
|
The Company's sales to its largest wholesale customer, Macy's, accounted for approximately
12%
of its total net revenues in each of
Fiscal 2015
,
Fiscal 2014
, and
Fiscal 2013
.
|
|
F-45
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Operating income:
|
|
|
|
|
|
|
||||||
Wholesale
(a)
|
|
$
|
943
|
|
|
$
|
963
|
|
|
$
|
903
|
|
Retail
(b)
|
|
527
|
|
|
572
|
|
|
615
|
|
|||
Licensing
(c)
|
|
152
|
|
|
150
|
|
|
152
|
|
|||
|
|
1,622
|
|
|
1,685
|
|
|
1,670
|
|
|||
Unallocated corporate expenses
|
|
(577
|
)
|
|
(553
|
)
|
|
(531
|
)
|
|||
Gain on acquisition of Chaps
(d)
|
|
—
|
|
|
16
|
|
|
—
|
|
|||
Unallocated restructuring and other charges
(e)
|
|
(10
|
)
|
|
(18
|
)
|
|
(12
|
)
|
|||
Total operating income
|
|
$
|
1,035
|
|
|
$
|
1,130
|
|
|
$
|
1,127
|
|
|
(a)
|
During Fiscal 2014 and Fiscal 2013, the Company recorded non-cash impairment charges of
$1 million
and
$2 million
, respectively, to write off certain fixed assets related to its European wholesale operations. See
Note 11
for additional information.
|
(b)
|
During Fiscal 2015, the Company recorded non-cash impairment charges of
$7 million
, primarily to write off certain fixed assets related to its domestic and international retail stores. During Fiscal 2013, the Company recorded non-cash impairment charges of
$15 million
to write down certain long-lived assets, primarily in connection with the Rugby Closure Plan and certain underperforming stores in Europe. See Notes 11 and 12 for additional information.
|
(c)
|
During Fiscal 2013, the Company recorded non-cash impairment charges of
$2 million
related to the write-off of certain intangible assets in connection with the Rugby Closure Plan. See Notes 11 and 12 for additional information.
|
(d)
|
See
Note 5
for a description of the gain on acquisition of Chaps recorded during Fiscal 2014.
|
(e)
|
The fiscal years presented included certain unallocated restructuring and other charges (See
Note 12
), which are detailed below:
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
|
(millions)
|
||||||||||
|
Restructuring and other charges:
|
|
|
|
|
|
|
||||||
|
Restructuring charges:
|
|
|
|
|
|
|
||||||
|
Wholesale-related
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Retail-related
|
|
(4
|
)
|
|
—
|
|
|
(10
|
)
|
|||
|
Corporate operations-related
|
|
(2
|
)
|
|
(8
|
)
|
|
(1
|
)
|
|||
|
Unallocated restructuring charges
|
|
(10
|
)
|
|
(8
|
)
|
|
(12
|
)
|
|||
|
Other charges
(a)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|||
|
Total unallocated restructuring and other charges
|
|
$
|
(10
|
)
|
|
$
|
(18
|
)
|
|
$
|
(12
|
)
|
|
|
(a)
|
See
Note 12
for a description of accelerated stock-based compensation expense recorded during Fiscal 2014.
|
|
F-46
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
||||||
Wholesale
|
|
$
|
66
|
|
|
$
|
66
|
|
|
$
|
67
|
|
Retail
|
|
154
|
|
|
125
|
|
|
116
|
|
|||
Licensing
|
|
—
|
|
|
—
|
|
|
2
|
|
|||
Unallocated corporate
|
|
74
|
|
|
67
|
|
|
48
|
|
|||
Total depreciation and amortization
|
|
$
|
294
|
|
|
$
|
258
|
|
|
$
|
233
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Capital expenditures:
|
|
|
|
|
|
|
||||||
Wholesale
|
|
$
|
48
|
|
|
$
|
53
|
|
|
$
|
39
|
|
Retail
|
|
237
|
|
|
252
|
|
|
158
|
|
|||
Licensing
|
|
4
|
|
|
1
|
|
|
—
|
|
|||
Unallocated corporate
|
|
102
|
|
|
84
|
|
|
79
|
|
|||
Total capital expenditures
|
|
$
|
391
|
|
|
$
|
390
|
|
|
$
|
276
|
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Total assets:
|
|
|
|
|
||||
Wholesale
|
|
$
|
2,643
|
|
|
$
|
2,663
|
|
Retail
|
|
2,395
|
|
|
2,334
|
|
||
Licensing
|
|
197
|
|
|
198
|
|
||
Corporate
|
|
871
|
|
|
893
|
|
||
Total assets
|
|
$
|
6,106
|
|
|
$
|
6,088
|
|
|
F-47
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Net revenues
(a)
:
|
|
|
|
|
|
|
||||||
The Americas
(b)
|
|
$
|
5,077
|
|
|
$
|
4,983
|
|
|
$
|
4,586
|
|
Europe
(c)
|
|
1,627
|
|
|
1,580
|
|
|
1,447
|
|
|||
Asia
(d)
|
|
916
|
|
|
887
|
|
|
912
|
|
|||
Total net revenues
|
|
$
|
7,620
|
|
|
$
|
7,450
|
|
|
$
|
6,945
|
|
|
|
March 28,
2015 |
|
March 29,
2014 |
||||
|
|
(millions)
|
||||||
Long-lived assets
(a)
:
|
|
|
|
|
||||
The Americas
(b)
|
|
$
|
1,106
|
|
|
$
|
966
|
|
Europe
(c)
|
|
148
|
|
|
172
|
|
||
Asia
(d)
|
|
182
|
|
|
184
|
|
||
Total long-lived assets
|
|
$
|
1,436
|
|
|
$
|
1,322
|
|
|
(a)
|
Net revenues and long-lived assets for certain of the Company's licensed operations are included within the geographic location of the reporting subsidiary which holds the respective license.
|
(b)
|
Includes the U.S., Canada, and Latin America. Net revenues earned in the U.S. were
$4.827 billion
,
$4.744 billion
, and
$4.388 billion
in
Fiscal 2015
,
Fiscal 2014
, and
Fiscal 2013
, respectively. Long-lived assets located in the U.S. were
$1.069 billion
and
$948 million
as of
March 28, 2015
and
March 29, 2014
, respectively.
|
(c)
|
Includes the Middle East.
|
(d)
|
Includes Australia and New Zealand.
|
23.
|
Additional Financial Information
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 28,
2015 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||
|
|
(millions)
|
||||||||||
Cash paid for interest
|
|
$
|
15
|
|
|
$
|
20
|
|
|
$
|
18
|
|
Cash paid for income taxes
|
|
$
|
317
|
|
|
$
|
302
|
|
|
$
|
339
|
|
|
F-48
|
|
24.
|
Subsequent Event (Unaudited)
|
|
F-49
|
|
/s/ RALPH LAUREN
|
|
/s/ ROBERT L. MADORE
|
Ralph Lauren
|
|
Robert L. Madore
|
Chairman and Chief Executive Officer
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
F-50
|
|
|
F-51
|
|
|
F-52
|
|
|
|
Fiscal Years Ended
(a)
|
||||||||||||||||||
|
|
March 28, 2015
|
|
March 29, 2014
(b)
|
|
March 30, 2013
(c)
|
|
March 31,
2012 |
|
April 2, 2011
(d)
|
||||||||||
|
|
(millions, except per share data)
|
||||||||||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
7,451
|
|
|
$
|
7,284
|
|
|
$
|
6,763
|
|
|
$
|
6,679
|
|
|
$
|
5,482
|
|
Licensing revenues
|
|
169
|
|
|
166
|
|
|
182
|
|
|
181
|
|
|
178
|
|
|||||
Net revenues
|
|
7,620
|
|
|
7,450
|
|
|
6,945
|
|
|
6,860
|
|
|
5,660
|
|
|||||
Gross profit
|
|
4,378
|
|
|
4,310
|
|
|
4,156
|
|
|
3,998
|
|
|
3,318
|
|
|||||
Depreciation and amortization expense
|
|
(294
|
)
|
|
(258
|
)
|
|
(233
|
)
|
|
(225
|
)
|
|
(194
|
)
|
|||||
Impairments of assets
|
|
(7
|
)
|
|
(1
|
)
|
|
(19
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||||
Restructuring and other charges
|
|
(10
|
)
|
|
(18
|
)
|
|
(12
|
)
|
|
(12
|
)
|
|
(3
|
)
|
|||||
Operating income
|
|
1,035
|
|
|
1,130
|
|
|
1,127
|
|
|
1,039
|
|
|
845
|
|
|||||
Interest expense, net
|
|
(11
|
)
|
|
(17
|
)
|
|
(16
|
)
|
|
(13
|
)
|
|
(11
|
)
|
|||||
Net income
|
|
$
|
702
|
|
|
$
|
776
|
|
|
$
|
750
|
|
|
$
|
681
|
|
|
$
|
568
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
7.96
|
|
|
$
|
8.55
|
|
|
$
|
8.21
|
|
|
$
|
7.35
|
|
|
$
|
5.91
|
|
Diluted
|
|
$
|
7.88
|
|
|
$
|
8.43
|
|
|
$
|
8.00
|
|
|
$
|
7.13
|
|
|
$
|
5.75
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
88.2
|
|
|
90.7
|
|
|
91.3
|
|
|
92.7
|
|
|
96.0
|
|
|||||
Diluted
|
|
89.1
|
|
|
92.0
|
|
|
93.7
|
|
|
95.5
|
|
|
98.7
|
|
|||||
Dividends declared per common share
|
|
$
|
1.85
|
|
|
$
|
1.70
|
|
|
$
|
1.60
|
|
|
$
|
0.80
|
|
|
$
|
0.50
|
|
|
(a)
|
All fiscal years presented consisted of 52 weeks.
|
(b)
|
Reflects the Chaps Menswear License Acquisition effective in April 2013, which resulted in the recognition of a $16 million gain on acquisition, as well as the Australia and New Zealand Licensed Operations Acquisition effective in July 2013 (see Note 5 to the accompanying audited consolidated financial statements).
|
(c)
|
Reflects the acquisition of the Ralph Lauren-branded business in Latin America effective in June 2012, the discontinuance of the majority of products sold under the American Living brand effective with the Fall 2012 wholesale selling season, and the wind down of the Rugby brand operations during the second half of the fiscal year.
|
(d)
|
Reflects the South Korea Licensed Operations Acquisition effective in January 2011.
|
|
F-53
|
|
|
|
March 28, 2015
|
|
March 29, 2014
|
|
March 30, 2013
|
|
March 31, 2012
|
|
April 2, 2011
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
500
|
|
|
$
|
797
|
|
|
$
|
974
|
|
|
$
|
672
|
|
|
$
|
453
|
|
Investments
|
|
652
|
|
|
490
|
|
|
406
|
|
|
616
|
|
|
678
|
|
|||||
Working capital
(a)
|
|
2,138
|
|
|
2,359
|
|
|
1,842
|
|
|
1,954
|
|
|
1,646
|
|
|||||
Total assets
|
|
6,106
|
|
|
6,088
|
|
|
5,418
|
|
|
5,416
|
|
|
4,980
|
|
|||||
Total debt (including current maturities of debt)
|
|
532
|
|
|
298
|
|
|
267
|
|
|
274
|
|
|
291
|
|
|||||
Equity
|
|
3,891
|
|
|
4,034
|
|
|
3,785
|
|
|
3,653
|
|
|
3,305
|
|
|
(a)
|
Working capital is calculated as total current assets less total current liabilities (including current maturities of debt).
|
|
F-54
|
|
|
|
Quarterly Periods Ended
(a)
|
||||||||||||||
|
|
June 28,
2014 |
|
September 27,
2014 |
|
December 27,
2014 |
|
March 28,
2015 |
||||||||
|
|
(millions, except per share data)
|
||||||||||||||
Net revenues
|
|
$
|
1,708
|
|
|
$
|
1,994
|
|
|
$
|
2,033
|
|
|
$
|
1,885
|
|
Gross profit
|
|
1,043
|
|
|
1,132
|
|
|
1,159
|
|
|
1,044
|
|
||||
Net income
|
|
162
|
|
|
201
|
|
|
215
|
|
|
124
|
|
||||
Net income per common share
(b)
:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.82
|
|
|
$
|
2.27
|
|
|
$
|
2.44
|
|
|
$
|
1.43
|
|
Diluted
|
|
$
|
1.80
|
|
|
$
|
2.25
|
|
|
$
|
2.41
|
|
|
$
|
1.41
|
|
Dividends declared per common share
|
|
$
|
0.45
|
|
|
$
|
0.45
|
|
|
$
|
0.45
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Quarterly Periods Ended
(a)
|
||||||||||||||
|
|
June 29,
2013 |
|
September 28,
2013 |
|
December 28,
2013 |
|
March 29,
2014 |
||||||||
|
|
(millions, except per share data)
|
||||||||||||||
Net revenues
|
|
$
|
1,653
|
|
|
$
|
1,915
|
|
|
$
|
2,015
|
|
|
$
|
1,867
|
|
Gross profit
|
|
1,004
|
|
|
1,084
|
|
|
1,172
|
|
|
1,050
|
|
||||
Net income
|
|
181
|
|
|
205
|
|
|
237
|
|
|
153
|
|
||||
Net income per common share
(b)
:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.98
|
|
|
$
|
2.26
|
|
|
$
|
2.61
|
|
|
$
|
1.70
|
|
Diluted
|
|
$
|
1.94
|
|
|
$
|
2.23
|
|
|
$
|
2.57
|
|
|
$
|
1.68
|
|
Dividends declared per common share
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.45
|
|
|
$
|
0.45
|
|
|
(a)
|
All fiscal quarters presented consisted of 13 weeks.
|
(b)
|
Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average number of common shares outstanding during each period.
|
|
F-55
|
|
1.
|
Section 1.4(c) of the Employment Agreement is amended in its entirety to read as follows, effective as of the date set forth above:
|
|
RALPH LAUREN CORPORATION
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ralph Lauren
|
|
|
Ralph Lauren
|
|
|
Title: Chairman and Chief Executive Officer
|
|
|
|
|
Date: May 4, 2015
|
|
|
|
|
|
|
|
|
EXECUTIVE
|
|
|
|
|
|
/s/ Jackwyn Nemerov
|
|
|
Jackwyn Nemerov
|
|
|
|
|
|
Date: April 30, 2015
|
|
1
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
8
|
|
|
9
|
|
|
10
|
|
|
11
|
|
|
12
|
|
If to the Executive:
|
Valerie Hermann
|
If to the Corporation:
|
Ralph Lauren Corporation
|
|
13
|
|
|
14
|
|
RALPH LAUREN CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mitchell Kosh
|
|
|
/s/ Valerie Hermann
|
|
By: Mitchell Kosh
|
|
|
VALERIE HERMANN
|
|
Title: Senior Vice President - Human
|
|
|
|
|
Resources
|
|
|
|
|
|
|
|
|
|
|
15
|
|
Title:
|
President of Ralph Lauren Luxury Collections
|
|
|
Start Date:
|
April 7, 2014
|
|
|
Reports to:
|
Ralph Lauren, Chief Executive Officer
|
|
|
Base Salary:
|
$900,000 annually less all applicable taxes and other deductions. You will regularly receive your pay bi-weekly on Fridays.
|
|
|
Executive Incentive Plan:
|
You are eligible to participate in the Executive Officer Annual Incentive Plan (EOAIP) for fiscal 2015, which begins March 30, 2014.
Bonus
- Under the EOAIP, you are eligible for a bonus opportunity with a target of 150% of your fiscal year
salary earnings.
- Your total bonus opportunity will be based 50% on Division performance and 50% on total Company
performance.
- Calculation can flex up or down by -10% to +10% based on achievement of expense management
goals.
- The maximum bonus payable (including strategic goal adjustment) is capped at 300% of your fiscal
year salary earnings.
(At all times your bonus opportunity will be governed by the terms of the Company's EOAIP and nothing contained herein restricts the Company's rights to alter, amend or terminate the EOAIP at any time, provided that you will continue to receive a comparable annual bonus opportunity.)
|
|
|
Annual Equity Award:
|
You are also eligible to participate in the Company stock award program. Stock awards are subject to ratification by the Compensation and Organizational Development Committee of the Board of Directors ("the Compensation Committee"). In accordance with the terms of the Company Long-Term Stock Incentive Plan, beginning with fiscal 2015, you will be eligible to receive an annual award with a value of at least $1,000,000. In fiscal 2015, one portion of the award will be granted on or before the last day of the fiscal quarter following your employment start date and the remaining portion of the award will be granted on the same date that annual grants are made to other senior executives, expected in July 2014. Beginning in fiscal 2016, your annual award will be granted on the same date that annual grants are made to other senior executives, normally with a portion of the award in each of April and July but may be earlier or later.
|
|
1
|
|
One-Time Sign-On Awards:
|
You will receive a cash sign-on bonus of $2,000,000 ("Sign-On Bonus") within thirty (30) days following the Start Date. If you terminate your employment other than for "Good Reason" (as defined in the Employment Agreement), or if the Company terminates your employment for "Cause," (as defined in the Employment Agreement), in each case within 12 months of your Start Date, then you shall repay the Sign-On Bonus to the Company within 30 days of the date of termination of your employment. If you do not repay the Sign-On Bonus within this time period, the Company has the right to immediately recover the Sign-On Bonus from you, as well as any attorneys' fees and other costs incurred in recovering the Sign-On Bonus. For the avoidance of doubt, you shall not be required to return the Sign-On Bonus if the Company terminates your employment without Cause (including by reason of your death or disability) or you terminate your employment with Good Reason.
|
|
You will receive a one-time stock award with a value of approximately $2,000,000 to be granted in the form of time-based Restricted Stock Units vesting in three equal installments on the anniversary date of the grant in 2015, 2016 and 2017, subject to continued service to each vesting date, pursuant to the terms of the Plan, and each such vested share shall be settled as soon as practicable but not more than 30 days after the vesting date. The One-Time Stock Award will be granted on or before the last day of the fiscal quarter following your employment start date subject to approval by the Compensation Committee.
For all equity awards, conversion of values will be based on the Company's standard procedure of using the Fair Market Value 10 days before the applicable grant date, as approved by the Compensation Committee.
|
|
|
Vacation:
|
You are eligible for five (5) weeks of vacation annually.
|
|
|
Benefits:
|
You are eligible to participate in the Company's medical, dental, life, short and long-term disability insurance programs beginning on the first day of the pay period following thirty (30) days of service. Information regarding Company benefits will be sent to you under separate cover.
|
|
|
Merchandise Discount
:
|
You will receive merchandise discounts applicable to employees of the Company.
|
|
|
Commuter Benefits Program:
|
Commuter participants will be eligible to participate in a tax-free Commuter Benefit Program to pay for transit passes and tickets.
|
|
|
401(k):
|
You are eligible to participate in the 401(k) Retirement Savings Plan upon hire. Following completion of 1,000 hours and one (1) year of service you will become eligible to receive the Company match. Information regarding the Company 401(k) plan will be sent to you under separate cover.
|
|
|
Financial
Counseling:
|
You will be eligible for one-on-one financial counseling. You may choose from two organizations designated by the Company to provide this service. The annual fee is paid by the Company but will be treated as imputed income to you.
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Fees:
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Reasonable, documented legal fees which you incur in order to review and consider this offer will be reimbursed up to a maximum amount of $10,000. In addition, the Company agrees to, promptly upon execution of this letter by you, engage competent counsel and perform all other acts necessary for you to obtain an appropriate visa pursuant to applicable US immigration laws, which shall be solely at the cost of the Company and at no expense to you, except as may be required by law.
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2
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Confidentiality:
|
By signing this letter below, you confirm that you are not subject in any way to any purported non-competition or non-solicitation obligations or other purported restrictions with any other company that restricts or adversely affects your ability to perform services for the Company, other than pursuant to agreements provided to the Company by you prior the date hereof. You further represent and warrant that: (a) the Company has advised you not to disclose any confidential information or trade secrets belonging to your former employers or to any of their affiliated entities; (b) you have not disclosed any such confidential information or trade secrets to anyone at the Company; and (c) you will not disclose any such confidential information or trade secrets to anyone at the Company at any time during your period of employment with the Company.
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Announcement:
|
Except as may be required by law or regulation, no public announcement, press release or general internal announcement to employees announcing your employment or position with the Company shall be made by either the Company or you prior to the Start Date without our mutual written agreement; it being acknowledged and understood that an announcement by the Company to particular Company employees who the Company reasonably believes need or should know about your employment or position with the Company shall be permitted.
|
/s/ Valerie Hermann
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January 15, 2014
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Valerie Hermann
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Date
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3
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1.
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The second bullet under the term "Bonus" in the "Executive Incentive Plan" section of Exhibit 1 to the Employment Agreement is amended in its entirety to read as follows, effective as of the date set forth above: "Your total bonus opportunity will be based 100% on total Company performance."
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1
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RALPH LAUREN CORPORATION
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By:
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/s/ Mitchell Kosh
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Mitchell Kosh
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Title: Executive Vice President, Human Resources
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Date: June 24, 2014
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EXECUTIVE
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/s/ Valerie Hermann
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Valerie Hermann
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Date: August 7, 2014
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2
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1.
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The third paragraph in the "One-Time Sign-On Awards" section of Exhibit 1 to the Employment Agreement is amended to add the following additional sentence, effective as of the date set forth above: "For all equity awards beginning in Fiscal 2016, the conversion of annual grant value shall be based on the Fair Market Value on the applicable grant date, as approved by the Compensation Committee."
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2.
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Except as amended and/or modified by this Amendment No. 2, the Employment Agreement is hereby ratified and confirmed and all other terms of the Employment Agreement shall remain in full force and effect, unaltered and unchanged by this Amendment No. 2.
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1
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RALPH LAUREN CORPORATION
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By:
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/s/ Mitchell Kosh
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Mitchell Kosh
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Title: Executive Vice President, Chief Administrative Officer
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Date: April 27, 2015
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EXECUTIVE
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/s/ Valerie Hermann
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Valerie Hermann
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Date: April 24, 2015
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2
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1.
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Grant of the Performance Share Units
. Subject to the terms and conditions of the Plan and the additional terms and conditions set forth in this Agreement as well as the Appendices to this Agreement, the Company hereby grants to the Participant a Performance Share Unit Award consisting of [
Number of Share Units
] Performance Share Units ("PSUs"). The PSUs shall vest and become non-forfeitable in accordance with Section 2 hereof.
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2.
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Vesting
.
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(a)
|
Except as provided in Section 2(e) of this Agreement, the PSU Award shall vest following a three-year performance period consisting of the Company's fiscal years ____, ____ and ____, and shall be subject to the Participant's employment with the Company on the Vesting Date (as defined below), and the attainment of one or more performance goals established by the Committee, in its sole discretion. With respect to the grant of the PSU Award, Participant shall be eligible to vest in a percentage of PSUs as follows:
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|
1
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(b)
|
Once vested, the PSUs shall be paid to Participant in Shares as soon as administratively practicable, but not later than thirty (30) days, after their applicable vesting date.
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(c)
|
Notwithstanding the foregoing, in the event the above vesting schedule results in the vesting of any fractional Shares, the value of such fractional Shares shall be paid in cash.
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(d)
|
If the Participant's service as an Employee of the Company is terminated for any reason other than due to the Participant's death or Disability, or due to Participant's Retirement (as defined below), the PSUs shall, to the extent not then vested, be forfeited by the Participant without consideration.
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(e)
|
In the event that Participant's employment is terminated by reason of death, Disability or Retirement of the Participant within the first year following the Grant Date of this Agreement, Participant shall be entitled to vest in 1/3 of the PSUs that would have otherwise vested had service continued through the Vesting Date, with such PSUs vesting on that date subject to the achievement of the applicable performance goals. All PSUs that do not vest in accordance with the preceding sentence shall be forfeited and cancelled automatically at the time of the Participant's death, Disability or Retirement. In the event that Participant's employment is terminated by reason of death, Disability or Retirement after the first year following the Grant Date of this Agreement, Participant shall be entitled to vest in all PSUs that would have otherwise vested had service continued
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|
2
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(f)
|
For purposes of this Agreement, "Retirement" shall mean Participant's termination of employment for any reason (other than for Misconduct as defined in Appendix A to this Agreement) after: (a) Participant has attained age 55 and completed at least seven (7) years of continuous service as an employee of the Company or an Affiliate; or (b) Participant has attained age 65. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that Participant has violated any of the Obligations in Appendix A to this Agreement, the Participant shall not be deemed to be eligible for Retirement and all PSUs that have not been settled shall be forfeited effective as of the date that the violation first occurred.
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3.
|
Rights as a Stockholder
. Neither the Participant or any person claiming under or through the Participant will have any of the rights or privileges of a stockholder of the Company in respect of any PSUs unless and until the PSUs have vested and been issued as Shares in accordance with the Plan, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Participant. After such vesting, issuance, recordation, and delivery, the Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.
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4.
|
No Right to Continued Employment
. Participant understands and agrees that this Agreement does not impact in any way the right of the Company to terminate or change the terms of the employment of Participant at any time for any reason whatsoever, with or without good cause provided in accordance with applicable local law. Participant understands and agrees that, unless contrary to applicable local law or there is an employment contract in place providing otherwise, his or her employment is "at-will," and that either the Company or Participant may terminate Participant's employment at any time and for any reason subject to applicable local law.
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5.
|
No Advice Regarding Grant
. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant's participation in the Plan, or his or her acquisition or sale of the underlying PSUs. The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding the Participant's participation in the Plan before taking any action related to the Plan.
|
6.
|
Compliance with Section 409A
. The parties acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and the parties agree
|
|
3
|
|
7.
|
Notices
. Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Participant at the address appearing in the records of the Company with respect to such Participant or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.
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4
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8.
|
Appendices
.
Appendix A
attached hereto, entitled "Post-Employment Obligations," and
Appendix B
attached hereto, entitled "Terms and Conditions for Non-U.S. Participants," are fully incorporated into, and form a part of, this Agreement.
|
9.
|
Withholding
. As authorized by Section 14(d) of the Plan, when Shares are distributed after vesting, a portion of the Shares may be withheld to satisfy tax withholding requirements, and the net Shares shall then be delivered.
|
10.
|
Choice of Law
. This Agreement, including its Appendices, shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflict of laws. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of New York and agree that such litigation shall be conducted only in the courts of New York County, New York, or the federal courts of the United States for the Southern District of New York, and no other courts.
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11.
|
Non-U.S. Participants
. Notwithstanding any provision of the Plan to the contrary, to comply with securities, exchange control, labor, tax, or other applicable laws, rules or regulations in countries outside of the United States in which the Company and its Subsidiaries operate or have Employees, Consultants, or directors, and/or for the purpose of taking advantage of tax favorable treatment for PSU Awards granted to Participants in such countries, the Committee, in its sole discretion, shall have the power and authority to (i) amend or modify the terms and conditions of any PSU Awards granted to a Participant; (ii) establish, adopt, interpret, or revise any rules and procedures to the extent such actions may be necessary or advisable, including adoption of rules or procedures applicable to particular Subsidiaries or Participants residing in particular locations; and (iii) take any action, before or after an PSU Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules or procedures with provisions that limit or modify rights on eligibility to receive PSU Awards under the Plan or on termination of service, available methods of vesting or settlement of a PSU Award, payment of tax-related items, the shifting of employer tax liability to the Participant, tax withholding procedures, restrictions on the sale of shares of Class A Common Stock of the Company, and the handling of stock certificates or other indicia of ownership. Notwithstanding the foregoing, the Committee may not take actions hereunder, and no PSU Awards shall be granted, that would violate the U.S. Securities Act of 1933, as amended, the Exchange Act, the Code, any securities law or governing statute.
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5
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12.
|
Exchange Rates
. Neither the Company nor any Subsidiary shall be liable to a Participant for any foreign exchange rate fluctuation between the Participant's local currency and the U.S. Dollar that may affect the value of the Participant's PSU Award or of any amounts due to the Participant pursuant to the vesting or other settlement of the PSU Award or, if applicable, the subsequent sale of Shares acquired upon vesting.
|
13.
|
PSU Award Subject to Plan
. By accepting this Agreement and the Award evidenced hereby, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan, that the Plan forms a part of this Agreement, and that if there is a conflict between this Agreement and either the Plan or the provision under which the Plan is administered and governed by the Committee, the Plan and/or the determination of the Committee will govern, as applicable. This Agreement is qualified in its entirety based on the determinations, interpretations and other decisions made within the sole discretion of the Committee.
|
14.
|
Conflict with any Employment Contract
. If Participant has entered into an authorized, written employment contract with the Company, the terms of that authorized, written employment contract shall prevail over any conflicting provisions in this Agreement.
|
15.
|
Acknowledgments
. By participating in the Plan, the Participant understands and agrees that:
|
a)
|
the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
b)
|
the grant of PSU Awards is voluntary and occasional and does not create any contractual or other right to receive future PSU Awards, or benefits in lieu of these awards, even if PSU Awards have been granted in the past;
|
c)
|
all decisions with respect to future PSU Awards, if any, will be at the sole discretion of the Committee;
|
d)
|
the Participant is subject to the Company's Securities Trading Policy;
|
e)
|
the Participant is voluntarily participating in the Plan;
|
f)
|
any PSU Awards and the Company's Class A Common Stock subject to awards, and the income and value of same, are not part of the Participant's normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday
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|
6
|
|
g)
|
no claim or entitlement to compensation or damages shall arise from the forfeiture of a PSU Award (either in whole or in part) resulting from the Participant's termination of employment or service.
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|
7
|
|
Confidentiality
|
You will at all times during and after your employment with the Company faithfully hold the Company's Confidential Information (as defined below) in the strictest confidence, and you will use your best efforts and highest diligence to guard against its disclosure to anyone other than as required in the performance of your duties in good faith to the Company. You will not use Confidential Information for your personal benefit or for the benefit of any competitor or other person. "Confidential Information" means certain proprietary techniques and confidential information as described below, which have great value to the Company's business and which you acknowledge is and shall be the sole and exclusive property of the Company. Confidential Information includes all proprietary information that has or could have commercial value or other utility in the business in which the Company is engaged or contemplates engaging, and all proprietary information the unauthorized disclosure of which could be detrimental to the interests of the Company. By way of example and without limitation, Confidential Information includes any and all information developed, obtained or owned by the Company and/or its subsidiaries, affiliates or licensees concerning trade secrets, techniques, know-how (including designs, plans, procedures, processes and research records), software, computer programs, marketing data and plans, business plans, strategies, forecasts, unpublished financial information, orders, agreements and other forms of documents, price and cost information, merchandising opportunities, expansion plans, designs, store plans, budgets, projections, customer, supplier and subcontractor identities, characteristics and agreements, and salary, staffing and employment information. Upon termination of your employment with the Company, regardless of the reason for such termination, you will return to the Company all documents and other materials of any kind that contain Confidential Information. You understand that nothing in this Appendix A or otherwise in this Agreement shall be construed to prohibit you from reporting possible violations of law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any law or regulation, or from filing a
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|
1
|
|
Non-Compete
|
You covenant and agree that during your period of employment, and for a period of six (6) months following the termination of your employment if such termination is voluntarily initiated by you for any reason, or if such termination is initiated by the Company because of your Misconduct, as that term is defined in the Addendum below, you shall not provide any labor, work, services or assistance (whether as an officer, director, employee, partner, agent, owner, independent contractor, consultant, stockholder or otherwise) to a "Competing Business." For purposes hereof, "Competing Business" shall mean any business engaged in the designing, marketing or distribution of premium lifestyle products, including but not limited to apparel, home, accessories and fragrance products, which competes in any material respects with the Company or any of its subsidiaries, affiliates or licensees. Nothing in this Non-Compete prohibits you from owning, solely as an investment, securities of any entity which are traded on a national securities exchange if you are not a controlling person of, or a member of a group that controls such entity, and you do not, directly or indirectly, own 5% or more of any class of securities of such entity.
|
Non-Solicit
|
You covenant and agree that during your period of employment, other than in the course of performing your duties in good faith, and for a period of one (1) year following the termination of your employment for any reason whatsoever hereunder, you shall not directly or indirectly solicit or influence any other employee of the Company, or any of its subsidiaries, affiliates or licensees, to terminate such employee's employment with the Company, or any of its subsidiaries, affiliates or licensees, as the case may be. As used herein, "solicit" shall include, without limitation, requesting, encouraging, enticing, assisting, or causing, directly or indirectly.
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2
|
|
|
3
|
|
i.
|
an act of fraud, embezzlement, theft, breach of fiduciary duty, dishonesty, or any other misconduct or any violation of law (other than a traffic violation) committed by you; or
|
ii.
|
any action by you causing damage to or misappropriation of Company assets; or
|
iii.
|
your wrongful disclosure of Confidential Information of the Company or any of its affiliates; or
|
iv.
|
your engagement in any competitive activity which would constitute a breach of your duty of loyalty to the Company; or
|
v.
|
your breach of any employment policy of the Company, including, but not limited to, conduct relating to falsification of business records, violation of the Company's code of business conduct & ethics, harassment, creation of a hostile work environment, excessive absenteeism, insubordination, violation of the Company's policy on drug & alcohol use, or violent acts or threats of violence; or
|
vi.
|
the commission of any act by you, whether or not performed in the workplace, which subjects or, if publicly known, would be likely to subject the Company to public ridicule or embarrassment, or would likely be detrimental or damaging to the Company's reputation, goodwill, or relationships with its customers, suppliers, vendors, licensees or employees.
|
|
4
|
|
|
1
|
|
(a)
|
the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of Awards is voluntary and occasional and does not create any contractual or other right to receive future Awards, or benefits in lieu of Awards, even if Awards have been granted in the past;
|
(c)
|
all decisions with respect to future Awards, if any, will be at the sole discretion of the Compensation & Organizational Development Committee of the Board of Directors (the "
Committee
");
|
(d)
|
Participant's participation in the Plan shall not create a right to further employment or service with the Employer and shall not interfere with the ability of the Employer to terminate Participant's employment or service relationship at any time with or without cause;
|
(e)
|
Participant is voluntarily participating in the Plan;
|
(f)
|
any Awards and the Shares subject to Awards, and the income and value of same, are not intended to replace any pension rights or compensation;
|
(g)
|
unless otherwise agreed with the Company, the Awards and Shares subject to the Awards, and the income and value of same, are not granted as consideration for, or in connection with, any service Participant may provide as a director of a Subsidiary or Affiliate;
|
(h)
|
any Awards and the Shares subject to Awards, and the income and value of same, are not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;
|
(i)
|
an Award grant will not be interpreted to form an employment or service contract or relationship with the Company or any Subsidiary or Affiliate;
|
(j)
|
the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
|
(k)
|
neither the Company, the Employer nor any other Subsidiary or Affiliate shall be liable for any foreign exchange rate fluctuation between Participant's local currency and the United States Dollar that may affect the value of an Award or of any proceeds due to Participant pursuant to the vesting of an Award or the sale of Shares;
|
(l)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of an Award resulting from Participant's termination of employment or service (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or rendering services or the terms of Participant's employment or service agreement, if any), and in consideration of the grant of an Award to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company or any Subsidiary or Affiliate, waives his or her ability, if
|
|
2
|
|
(m)
|
unless otherwise provided in the Plan or by the Committee in its discretion, an Award does not create any entitlement to have the Award or any benefits thereunder transferred to, or assumed by, another company nor exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares.
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3
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4
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5
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6
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7
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8
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9
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10
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11
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12
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13
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14
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15
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16
|
|
1.
|
Grant of the Performance-Based Restricted Stock Units
. Subject to the terms and conditions of the Plan and the additional terms and conditions set forth in this Agreement as well as the Appendices to this Agreement, the Company hereby grants to the Participant a Performance-Based Restricted Stock Unit Award consisting of [
Number of Share Units
] Performance-Based Restricted Stock Units ("PRSUs"). The PRSUs shall vest and become non-forfeitable in accordance with Section 2 hereof.
|
2.
|
Vesting
.
|
(a)
|
Except as otherwise provided in this Agreement, the PRSU Award shall be eligible to vest as described below following a one-year performance period consisting of the Company’s fiscal year ____, and shall be subject to (a) the Participant’s continued service as an Employee of the Company through the First Vesting Date, Second Vesting Date, and Third Vesting Date (each as defined below), as applicable, and (b) the attainment of one or more performance goals established by the Committee, in its sole discretion. Subject to these conditions, the PRSUs shall vest and become non-forfeitable with respect to one-third (1/3)
|
|
1
|
|
(b)
|
Once vested, the PRSUs shall be paid to Participant in Shares as soon as administratively practicable, but not later than thirty (30) days, after their applicable vesting date.
|
(c)
|
Notwithstanding the foregoing, in the event the above vesting schedule results in the vesting of any fractional Shares, such fractional Shares shall not be deemed vested hereunder but shall instead only vest and become non-forfeitable when such fractional Shares aggregate whole Shares.
|
(d)
|
If the Participant’s service as an Employee of the Company is terminated for any reason other than due to the Participant’s death or Disability, or due to Participant’s Retirement (as defined below), the PRSUs shall, to the extent not then vested, be forfeited by the Participant without consideration.
|
(e)
|
In the event that Participant’s employment is terminated by reason of death, Disability or Retirement of the Participant within the first year following the Grant Date of this Agreement, Participant shall be entitled to vest in the PRSUs that would have otherwise vested had service continued through the First Vesting Date, with such PRSUs vesting on that date subject to the achievement of the performance goals. All PRSUs that do not vest in accordance with the preceding sentence shall be forfeited and cancelled automatically at the time of the Participant’s death, Disability or Retirement. In the event that Participant’s employment is terminated by reason of death, Disability or Retirement after the first year following the Grant Date of this Agreement, Participant shall be entitled to vest in all remaining unvested PRSUs on the same dates they would have
|
|
2
|
|
(f)
|
For purposes of this Agreement, "Retirement" shall mean Participant’s termination of employment for any reason (other than for Misconduct as defined in Appendix A to this Agreement) after: (a) Participant has attained age 55 and completed at least seven (7) years of continuous service as an employee of the Company or an Affiliate; or (b) Participant has attained age 65. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that Participant has violated any of the Obligations in Appendix A to this Agreement, the Participant shall not be deemed to be eligible for Retirement and all PRSUs that have not been settled shall be forfeited effective as of the date that the violation first occurred.
|
3.
|
Rights as a Stockholder
. Neither the Participant or any person claiming under or through the Participant will have any of the rights or privileges of a stockholder of the Company in respect of any PRSUs unless and until the PRSUs have vested and been issued as Shares in accordance with the Plan, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Participant. After such vesting, issuance, recordation, and delivery, the Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.
|
4.
|
No Right to Continued Employment
. Participant understands and agrees that this Agreement does not impact in any way the right of the Company to terminate or change the terms of the employment of Participant at any time for any reason whatsoever, with or without good cause provided in accordance with applicable local law. Participant understands and agrees that, unless contrary to applicable local law or there is an employment contract in place providing otherwise, his or her employment is "at-will," and that either the Company or Participant may terminate Participant’s employment at any time and for any reason subject to applicable local law.
|
5.
|
No Advice Regarding Grant
. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or his or her acquisition or sale of the underlying RSUs. The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding the Participant’s participation in the Plan before taking any action related to the Plan.
|
6.
|
Compliance with Section 409A
. The parties acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and the parties agree
|
|
3
|
|
7.
|
Notices
. Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Participant at the address appearing in the records of the Company with respect to such Participant or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.
|
|
4
|
|
8.
|
Appendices
.
Appendix A
attached hereto, entitled "Post-Employment Obligations," and
Appendix B
attached hereto, entitled "Terms and Conditions for Non-U.S. Participants," are fully incorporated into, and form a part of, this Agreement.
|
9.
|
Withholding
. As authorized by Section 14(d) of the Plan, when Shares are distributed after vesting, a portion of the Shares may be withheld to satisfy tax withholding requirements, and the net Shares shall then be delivered.
|
10.
|
Choice of Law
. This Agreement, including its Appendices, shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflict of laws. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of New York and agree that such litigation shall be conducted only in the courts of New York County, New York, or the federal courts of the United States for the Southern District of New York, and no other courts.
|
11.
|
Non-U.S. Participants
. Notwithstanding any provision of the Plan to the contrary, to comply with securities, exchange control, labor, tax, or other applicable laws, rules or regulations in countries outside of the United States in which the Company and its Subsidiaries operate or have Employees, Consultants, or directors, and/or for the purpose of taking advantage of tax favorable treatment for PRSU Awards granted to Participants in such countries, the Committee, in its sole discretion, shall have the power and authority to (i) amend or modify the terms and conditions of any PRSU Awards granted to a Participant; (ii) establish, adopt, interpret, or revise any rules and procedures to the extent such actions may be necessary or advisable, including adoption of rules or procedures applicable to particular Subsidiaries or Participants residing in particular locations; and (iii) take any action, before or after a PRSU Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules or procedures with provisions that limit or modify rights on eligibility to receive PRSU Awards under the Plan or on termination of service, available methods of vesting or settlement of a PRSU Award, payment of tax-related items, the shifting of employer tax liability to the Participant, tax withholding procedures, restrictions on the sale of shares of Class A Common Stock of the Company, and the handling of stock certificates or other indicia of ownership. Notwithstanding the foregoing, the Committee may not take actions hereunder, and no PRSU Awards shall be granted, that would violate the U.S. Securities Act of 1933, as amended, the Exchange Act, the Code, any securities law or governing statute.
|
|
5
|
|
12.
|
Exchange Rates
. Neither the Company nor any Subsidiary shall be liable to a Participant for any foreign exchange rate fluctuation between the Participant’s local currency and the U.S. Dollar that may affect the value of the Participant’s PRSU Award or of any amounts due to the Participant pursuant to the vesting or other settlement of the PRSU Award or, if applicable, the subsequent sale of Shares acquired upon vesting.
|
13.
|
PRSU Award Subject to Plan
. By accepting this Agreement and the Award evidenced hereby, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan, that the Plan forms a part of this Agreement, and that if there is a conflict between this Agreement and either the Plan or the provision under which the Plan is administered and governed by the Committee, the Plan and/or the determination of the Committee will govern, as applicable. This Agreement is qualified in its entirety based on the determinations, interpretations and other decisions made within the sole discretion of the Committee.
|
14.
|
Conflict with any Employment Contract
. If Participant has entered into an authorized, written employment contract with the Company, the terms of that authorized, written employment contract shall prevail over any conflicting provisions in this Agreement.
|
15.
|
Acknowledgments
. By participating in the Plan, the Participant understands and agrees that:
|
a)
|
the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
b)
|
the grant of PRSU Awards is voluntary and occasional and does not create any contractual or other right to receive future PRSU Awards, or benefits in lieu of these awards, even if PRSU Awards have been granted in the past;
|
c)
|
all decisions with respect to future PRSU Awards, if any, will be at the sole discretion of the Committee;
|
d)
|
the Participant is subject to the Company’s Securities Trading Policy;
|
e)
|
the Participant is voluntarily participating in the Plan;
|
f)
|
any PRSU Awards and the Company’s Class A Common Stock subject to awards, and the income and value of same, are not part of the Participant’s normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday
|
|
6
|
|
g)
|
no claim or entitlement to compensation or damages shall arise from the forfeiture of a PRSU Award (either in whole or in part) resulting from the Participant’s termination of employment or service.
|
|
7
|
|
Confidentiality
|
You will at all times during and after your employment with the Company faithfully hold the Company’s Confidential Information (as defined below) in the strictest confidence, and you will use your best efforts and highest diligence to guard against its disclosure to anyone other than as required in the performance of your duties in good faith to the Company. You will not use Confidential Information for your personal benefit or for the benefit of any competitor or other person. "Confidential Information" means certain proprietary techniques and confidential information as described below, which have great value to the Company’s business and which you acknowledge is and shall be the sole and exclusive property of the Company. Confidential Information includes all proprietary information that has or could have commercial value or other utility in the business in which the Company is engaged or contemplates engaging, and all proprietary information the unauthorized disclosure of which could be detrimental to the interests of the Company. By way of example and without limitation, Confidential Information includes any and all information developed, obtained or owned by the Company and/or its subsidiaries, affiliates or licensees concerning trade secrets, techniques, know-how (including designs, plans, procedures, processes and research records), software, computer programs, marketing data and plans, business plans, strategies, forecasts, unpublished financial information, orders, agreements and other forms of documents, price and cost information, merchandising opportunities, expansion plans, designs, store plans, budgets, projections, customer, supplier and subcontractor identities, characteristics and agreements, and salary, staffing and employment information. Upon termination of your employment with the Company, regardless of the reason for such termination, you will return to the Company all documents and other materials of any kind that contain Confidential Information. You understand that nothing in this Appendix A or otherwise in this Agreement shall be construed to prohibit you from reporting possible violations of law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any law or regulation, or from filing a
|
|
1
|
|
Non-Compete
|
You covenant and agree that during your period of employment, and for a period of six (6) months following the termination of your employment if such termination is voluntarily initiated by you for any reason, or if such termination is initiated by the Company because of your Misconduct, as that term is defined in the Addendum below, you shall not provide any labor, work, services or assistance (whether as an officer, director, employee, partner, agent, owner, independent contractor, consultant, stockholder or otherwise) to a "Competing Business." For purposes hereof, "Competing Business" shall mean any business engaged in the designing, marketing or distribution of premium lifestyle products, including but not limited to apparel, home, accessories and fragrance products, which competes in any material respects with the Company or any of its subsidiaries, affiliates or licensees. Nothing in this Non-Compete prohibits you from owning, solely as an investment, securities of any entity which are traded on a national securities exchange if you are not a controlling person of, or a member of a group that controls such entity, and you do not, directly or indirectly, own 5% or more of any class of securities of such entity.
|
Non-Solicit
|
You covenant and agree that during your period of employment, other than in the course of performing your duties in good faith, and for a period of one (1) year following the termination of your employment for any reason whatsoever hereunder, you shall not directly or indirectly solicit or influence any other employee of the Company, or any of its subsidiaries, affiliates or licensees, to terminate such employee’s employment with the Company, or any of its subsidiaries, affiliates or licensees, as the case may be. As used herein, "solicit" shall include, without limitation, requesting, encouraging, enticing, assisting, or causing, directly or indirectly.
|
|
2
|
|
|
3
|
|
i.
|
an act of fraud, embezzlement, theft, breach of fiduciary duty, dishonesty, or any other misconduct or any violation of law (other than a traffic violation) committed by you; or
|
ii.
|
any action by you causing damage to or misappropriation of Company assets; or
|
iii.
|
your wrongful disclosure of Confidential Information of the Company or any of its affiliates; or
|
iv.
|
your engagement in any competitive activity which would constitute a breach of your duty of loyalty to the Company; or
|
v.
|
your breach of any employment policy of the Company, including, but not limited to, conduct relating to falsification of business records, violation of the Company’s code of business conduct & ethics, harassment, creation of a hostile work environment, excessive absenteeism, insubordination, violation of the Company’s policy on drug & alcohol use, or violent acts or threats of violence; or
|
vi.
|
the commission of any act by you, whether or not performed in the workplace, which subjects or, if publicly known, would be likely to subject the Company to public ridicule or embarrassment, or would likely be detrimental or damaging to the Company’s reputation, goodwill, or relationships with its customers, suppliers, vendors, licensees or employees.
|
|
4
|
|
|
1
|
|
2.
|
Nature of Grant
.
In accepting an Award, Participant acknowledges, understands and agrees that:
|
(a)
|
the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of Awards is voluntary and occasional and does not create any contractual or other right to receive future Awards, or benefits in lieu of Awards, even if Awards have been granted in the past;
|
(c)
|
all decisions with respect to future Awards, if any, will be at the sole discretion of the Compensation & Organizational Development Committee of the Board of Directors (the "
Committee
");
|
(d)
|
Participant’s participation in the Plan shall not create a right to further employment or service with the Employer and shall not interfere with the ability of the Employer to terminate Participant’s employment or service relationship at any time with or without cause;
|
(e)
|
Participant is voluntarily participating in the Plan;
|
(f)
|
any Awards and the Shares subject to Awards, and the income and value of same, are not intended to replace any pension rights or compensation;
|
(g)
|
unless otherwise agreed with the Company, the Awards and Shares subject to the Awards, and the income and value of same, are not granted as consideration for, or in connection with, any service Participant may provide as a director of a Subsidiary or Affiliate;
|
(h)
|
any Awards and the Shares subject to Awards, and the income and value of same, are not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;
|
(i)
|
an Award grant will not be interpreted to form an employment or service contract or relationship with the Company or any Subsidiary or Affiliate;
|
(j)
|
the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
|
(k)
|
neither the Company, the Employer nor any other Subsidiary or Affiliate shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of an Award or of any proceeds due to Participant pursuant to the vesting of an Award or the sale of Shares;
|
(l)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of an Award resulting from Participant’s termination of employment or service (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or rendering services or the terms of Participant’s employment or service agreement, if any), and in consideration of the grant of an Award to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company or any Subsidiary or Affiliate, waives his or her
|
|
2
|
|
(m)
|
unless otherwise provided in the Plan or by the Committee in its discretion, an Award does not create any entitlement to have the Award or any benefits thereunder transferred to, or assumed by, another company nor exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares.
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
8
|
|
|
9
|
|
|
10
|
|
|
11
|
|
|
12
|
|
|
13
|
|
|
14
|
|
|
15
|
|
|
16
|
|
|
|
Fiscal Years Ended
|
||||||||||||||||||
|
|
March 28, 2015
|
|
March 29, 2014
|
|
March 30, 2013
|
|
March 31, 2012
|
|
April 2,
2011 |
||||||||||
|
|
(millions)
|
||||||||||||||||||
Earnings, as defined:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before provision for income taxes
|
|
$
|
987
|
|
|
$
|
1,096
|
|
|
$
|
1,089
|
|
|
$
|
1,015
|
|
|
$
|
825
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in losses of equity-method investees
|
|
11
|
|
|
9
|
|
|
10
|
|
|
9
|
|
|
8
|
|
|||||
Fixed charges
|
|
172
|
|
|
170
|
|
|
162
|
|
|
164
|
|
|
124
|
|
|||||
Subtract:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Earnings available to cover fixed charges
|
|
$
|
1,170
|
|
|
$
|
1,275
|
|
|
$
|
1,260
|
|
|
$
|
1,188
|
|
|
$
|
957
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
17
|
|
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
22
|
|
|
$
|
18
|
|
Interest component of rent expense
|
|
155
|
|
|
151
|
|
|
143
|
|
|
142
|
|
|
106
|
|
|||||
Total fixed charges
|
|
$
|
172
|
|
|
$
|
170
|
|
|
$
|
162
|
|
|
$
|
164
|
|
|
$
|
124
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
(a)
|
|
6.8
|
|
|
7.5
|
|
|
7.8
|
|
|
7.3
|
|
|
7.7
|
|
|
(a)
|
All ratios shown in the above table have been calculated using unrounded numbers.
|
Entity Name
|
|
Jurisdiction of Formation
|
Acqui Polo CV
|
|
Netherlands
|
Acqui Polo GP, LLC
|
|
Delaware
|
Ralph Lauren Retail, Inc. (f/k/a Fashions Outlet of America, Inc.)
|
|
Delaware
|
RL Finance BV (f/k/a Polo Fin BV)
|
|
Netherlands
|
Ralph Lauren Holding BV (f/k/a Polo Hold BV)
|
|
Netherlands
|
Ralph Lauren Asia Pacific Limited (f/k/a Polo Ralph Lauren Asia Pacific, Limited)
|
|
Hong Kong
|
Ralph Lauren Europe Sàrl (f/k/a Polo Ralph Lauren Europe Sàrl)
|
|
Switzerland
|
PRL Fashions Inc.
|
|
Delaware
|
PRL International, Inc.
|
|
Delaware
|
PRL Netherlands Limited, LLC (f/k/a Acqui Polo Limited, LLC)
|
|
Delaware
|
PRL USA Holdings, Inc.
|
|
Delaware
|
The Polo/Lauren Company LP
|
|
New York
|
|
/s/ RALPH LAUREN
|
|
Ralph Lauren
|
|
Chairman of the Board and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
Date: May 15, 2015
|
|
|
/s/ ROBERT L. MADORE
|
|
Robert L. Madore
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
|
Date: May 15, 2015
|
|
|
/s/ RALPH LAUREN
|
|
Ralph Lauren
|
|
|
May 15, 2015
|
|
|
/s/ ROBERT L. MADORE
|
|
Robert L. Madore
|
|
|
May 15, 2015
|
|