13 unchanged sentences
The Company’s internal control over financial reporting as of March 27, 2021, as well as the consolidated financial statements, have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears herein.
−Removed: The audit report appears on page 61 of this report.
Changes in Internal Control over Financial Reporting
Except as discussed below, there have been no changes in our internal control over financial reporting during the three months ended March 27, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
−Removed: In addition to the changes discussed below, we have experienced varying degrees of business disruptions related to the COVID-19 pandemic, including periods of closures of our stores, distribution centers and corporate facilities beginning during the fourth quarter of Fiscal 2020.
−Removed: In addition, we have temporarily furloughed a significant portion of our store employees and are requiring our corporate employees in affected regions to work remotely.
+Added: We expect to continue to experience varying degrees of business disruptions related to the COVID-19 pandemic, including periods of closures of our retail stores, distribution centers and corporate facilities.
+Added: In addition, many of our corporate employees in affected regions continue to work remotely.
Despite such actions, we have not experienced any material changes to our internal controls over financial reporting.
We will continue to evaluate and monitor the impact of the COVID-19 pandemic on our internal controls.
−Removed: See Item 1A — "Risk Factors — The COVID-19 pandemic could have a material adverse effect on our business and results of operations" for additional discussion regarding risks to our business associated with the COVID-19 pandemic.
−Removed: In the first quarter of Fiscal 2020, we implemented additional internal controls in connection with our adoption of ASU 2016-02, Leases (Topic 842), none of which materially affected our internal control over financial reporting.
+Added: See Item 1A — "Risk Factors" — "The COVID-19 pandemic may continue to have a material adverse effect on our business and results of operations." for additional discussion regarding risks to our business associated with the COVID-19 pandemic.
Other Information
−Removed: The Company previously disclosed that in connection with the Michael Kors Retail Fleet Optimization Plan, it expected to incur approximately $100 - $125 million of one-time costs, including lease termination and other store closure costs.
−Removed: The Company closed a total of 143 Michael Kors stores at a cost of $99 million since plan inception, with total costs in line with its original expectations.
−Removed: As of the end of Fiscal 2020, the previously disclosed Michael Kors Retail Fleet Optimization is completed.
−Removed: On July 7, 2020, the Board of Directors of the Company approved a retail optimization program (the “Capri Retail Store Optimization Program”) to improve the profitability of its retail store fleet.
−Removed: As part of the Capri Retail Store Optimization Program, the Company intends to close approximately 170 of its retail stores over the next two fiscal years (Fiscal 2021 and Fiscal 2022).
+Added: As previously announced, the Board of Directors of the Company approved a retail optimization program (the “Capri Retail Store Optimization Program”) to improve the profitability of its retail store fleet.
+Added: As part of the Capri Retail Store Optimization Program, the Company intends to close approximately 170 of its retail stores over two fiscal years, which began during Fiscal 2021 and will continue into Fiscal 2022.
In addition, in connection with the Capri Retail Store Optimization Program, the Company expects to incur approximately $75 million of one-time costs, including lease termination and other store closure costs, the majority of which are expected to result in future cash expenditures.
+Added: During Fiscal 2021, the Company closed 101 of its retail stores as part of the Capri Retail Store Optimization Program.
+Added: Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program during Fiscal 2021 were $5 million, which was comprised of lease-related and other store closing costs.
The exact amounts and timing of the Capri Retail Optimization Program charges and future cash expenditures associated therewith are undeterminable at this time.
3 unchanged sentences
Directors, Executive Officers and Corporate Governance
−Removed: Information with respect to this Item is included in the Company’s Proxy Statement to be filed in July 2020, which is incorporated herein by reference.
+Added: Information with respect to this Item is included in the Company’s Proxy Statement to be filed in June 2021, which is incorporated herein by reference.
Executive Compensation
−Removed: Information with respect to this Item is included in the Company’s Proxy Statement to be filed in July 2020, which is incorporated herein by reference.
+Added: Information with respect to this Item is included in the Company’s Proxy Statement to be filed in June 2021, which is incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
7 unchanged sentences
Total 6,628,036 $ 37.41 (2)
−Removed: (1) Reflects share options and restricted share units issued under the Company’s Amended and Restated Omnibus Incentive Plan.
+Added: (1) Reflects share options and restricted stock units issued under the Company’s Amended and Restated Omnibus Incentive Plan.
(2) Represents the weighted average exercise price of outstanding share awards only.
2 unchanged sentences
Certain Relationships, Related Transactions and Director Independence
−Removed: Information with respect to this Item is included in the Company’s Proxy Statement to be filed in July 2020, which is incorporated herein by reference.
+Added: Information with respect to this Item is included in the Company’s Proxy Statement to be filed in June 2021, which is incorporated herein by reference.
Principal Accountant Fees and Services
−Removed: Information with respect to this Item is included in the Company’s Proxy Statement to be filed in July 2020, which is incorporated herein by reference.
+Added: Information with respect to this Item is included in the Company’s Proxy Statement to be filed in June 2021, which is incorporated herein by reference.
Exhibits and Financial Statement Schedules
9 unchanged sentences
Document Description
−Removed: Share Purchase Agreement dated as of May 31, 2016, by and among Michael Kors (Europe) B.V., Michael Kors (HK) Limited, Michael Kors Far East Trading Limited and Sportswear Holdings Limited (included as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No.
−Removed: 001-35368), filed on June 1, 2016 and incorporated herein by reference).
−Removed: Cooperation Agreement, dated as of July 25, 2017, by and among Michael Kors Holdings Limited, JAG Acquisitions (UK) Limited and Jimmy Choo Group Limited (formerly known as Jimmy Choo PLC) (included as Exhibit 2.2 to the Company's Current Report on Form 8-K (File No.
−Removed: 001-35368), filed on July 25, 2017 and incorporated herein by reference).
−Removed: Rule 2.7 Announcement, dated as of July 25, 2017 (included as Exhibit 2.1 to the Company's Current Report on Form 8-K (File No.
−Removed: 001-35368), filed on July 25, 2017 and incorporated herein by reference).
Stock Purchase Agreement, dated as of September 24, 2018, by and among Allegra Donata Versace Beck, Donatella Versace, Santo Versace, Borgo Luxembourg S.À R.L., Blackstone GPV Capital Partners (Mauritius) VI-D FDI Ltd., Blackstone GPV Tactical Partners (Mauritius)-N Ltd.
2 unchanged sentences
Amended and Restated Memorandum and Articles of Association of Capri Holdings Limited (included as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 31, 2018 and incorporated herein by reference).
−Removed: Specimen of Ordinary Share Certificate of Capri Holdings Limited.
+Added: Specimen of Ordinary Share Certificate of Capri Holdings Limited (included as Exhibit 4.1 to the Company's Annual Report on Form 10-K for the fiscal year ended March 30, 2019 (File No.
+Added: 001-35368), filed on May 29, 2019 and incorporated herein by reference).
Shareholders Agreement, dated as of July 11, 2011, among Michael Kors Holdings Limited and certain shareholders of Michael Kors Holdings Limited (included as Exhibit 10.2 to the Company’s Registration Statement on Form F-1, as amended (File No.
11 unchanged sentences
333-178282), filed on December 2, 2011 and incorporated herein by reference).
+Added: Amendment No.
1 to the Amended and Restated Michael Kors (USA), Inc.
Share Option Plan (included as Exhibit 4.9 to the Company’s Annual Report on Form 20-F for the fiscal year ended March 31, 2012, filed on June 12, 2012 and incorporated herein by reference).
−Removed: Amended and Restated Omnibus Incentive Plan (included as Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A (File No.
−Removed: 001-35368), filed on June 16, 2015 and incorporated herein by reference).
+Added: Capri Holdings Limited Second Amended and Restated Omnibus Incentive Plan (included as Annex A to the Company’s Definitive Proxy Statement on Schedule 14A (File No.
+Added: 001-35368), filed on July 22, 2020 and incorporated herein by reference).
Third Amended and Restated Employment Agreement, dated as of March 28, 2018, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited and John D.
1 unchanged sentence
Executive Bonus Program (included as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2013 filed on August 8, 2013 and incorporated herein by reference).
−Removed: Employment Agreement, dated as of May 12, 2014, by and between Michael Kors (USA), Inc., and Cathy Marie Robinson (included as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 29, 2014 filed on May 28, 2014 and incorporated herein by reference).
−Removed: Employment Agreement, dated as of July 14, 2014, by and between Pascale Meyran and Michael Kors (USA), Inc.
−Removed: (included as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
Form of Employee Non-Qualified Option Award Agreement (included as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
−Removed: Form of Employee Restricted Share Unit Award Agreement (included as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
−Removed: Form of Performance-Based Restricted Share Unit Award Agreement (included as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
−Removed: Form of Independent Director Restricted Share Unit Award Agreement (included as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
+Added: Form of Employee Restricted Stock Unit Award Agreement (included as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
+Added: Form of Performance-Based Restricted Stock Unit Award Agreement (included as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
+Added: Form of Independent Director Restricted Stock Unit Award Agreement (included as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 28, 2015, filed on May 27, 2015 and incorporated herein by reference).
Aircraft Time Sharing Agreement, dated November 24, 2014, by and between Michael Kors (USA), Inc.
2 unchanged sentences
(including as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended April 1, 2017, filed on May 31, 2017 and incorporated herein by reference).
−Removed: Agreement and General Release between Pascale Meyran and Michael Kors (USA), Inc., dated July 9, 2019 (included as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File No.
−Removed: 001-35368), filed on November 7, 2019 and incorporated herein by reference).
Capri Holdings Limited Deferred Compensation Plan (included as Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.
1 unchanged sentence
Employment Agreement between Michael Kors (USA), Inc.
−Removed: and Krista McDonough made as of October 1, 2016.
+Added: and Krista McDonough made as of October 1, 2016 (included as Exhibit 10.18 to the Company's Annual Report on Form 10-K for the fiscal year ended March 28, 2020 (File No 001-35368), filed on July 8, 2020 and incorporated herein by reference).
+Added: Employment Agreement, dated as of March 30, 2020, by and among Capri Holdings Limited, Michael Kors (USA), Inc.
+Added: and Daniel Purefoy.
List of subsidiaries of Capri Holdings Limited.
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
−Removed: Idol Chairman, Chief Executive Officer and Director (Principal Executive Officer) July 8, 2020
+Added: Idol Chairman, Chief Executive Officer and Director (Principal Executive Officer) May 26, 2021
/s/ Thomas J.
−Removed: Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer) July 8, 2020
−Removed: William Benedetto Director July 8, 2020
+Added: Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer) May 26, 2021
+Added: William Benedetto Director May 26, 2021
William Benedetto
−Removed: /s/ Robin Freestone Director July 8, 2020
+Added: /s/ Robin Freestone Director May 26, 2021
Robin Freestone
−Removed: /s/ Judy Gibbons Director July 8, 2020
−Removed: /s/ Ann Korologos Director July 8, 2020
+Added: /s/ Judy Gibbons Director May 26, 2021
+Added: /s/ Ann Korologos Director May 26, 2021
Ann Korologos
/s/ Stephen F.
−Removed: Reitman Director July 8, 2020
−Removed: /s/ Jane Thompson Director July 8, 2020
+Added: Reitman Director May 26, 2021
+Added: /s/ Jane Thompson Director May 26, 2021
Jane Thompson
−Removed: /s/ Jean Tomlin Director July 8, 2020
+Added: /s/ Jean Tomlin Director May 26, 2021
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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generally accepted accounting principles.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 28, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated July 8, 2020 expressed an unqualified opinion thereon.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 27, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 26, 2021 expressed an unqualified opinion thereon.
Adoption of ASU No.
1 unchanged sentence
2016-02, Leases and associated amendments (Topic 842).
−Removed: See below for discussion of our related critical audit matter.
Basis for Opinion
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In addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company.
−Removed: Adoption of Accounting Standards Update No.
−Removed: 2016-02, Leases
−Removed: Description of the Matter As discussed above and in Notes 2 and 4 to the consolidated financial statements, the Company adopted Accounting Standards Update No.
−Removed: 2016-02, Leases (“ASC 842”) on March 31, 2019.
−Removed: As a result of the adoption, the Company recorded a lease liability and related right of use asset of $2.2 billion and $1.6 billion, respectively on its balance sheet at March 28, 2020.
−Removed: Auditing management’s initial recognition of the lease liabilities and right-of-use asset upon adoption of ASU No.
−Removed: 2016-02 was especially challenging due to the volume and diversity of leases in the Company’s global lease portfolio.
−Removed: Further, the Company’s estimated incremental borrowing rate had a significant effect on the measurement of the lease liability and right-of use asset recognized upon adoption.
−Removed: Auditing management’s calculated incremental borrowing rate was complex due to the judgement involved in developing the expected interest rates for secured borrowings based on the term and the economic environment of the leases.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the adoption of ASU No.
−Removed: 2016-02 included testing of controls over management’s review of the completeness of the lease population and the calculation of the incremental borrowing rate.
−Removed: We tested the completeness and accuracy of the data used in the Company’s initial recognition of the lease liabilities and right-of-use asset.
−Removed: Our audit procedures included, among others, comparing the information in a sample of lease agreements to the Company’s analyses and selecting leases from independent sources and assessing their inclusion in the Company’s analysis.
−Removed: We involved our valuation specialists to assist in evaluating the key assumptions and methodologies management used to develop the incremental borrowing rate.
−Removed: We independently calculated a range of incremental borrowing rates and compared it to the rates used by the Company.
Impairment of Retail Store Long-Lived assets
Description of the Matter As discussed in Note 2 to the consolidated financial statements, the Company evaluates its long-lived assets, which primarily include property, plant, and equipment and operating lease right-of-use assets at retail stores, for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable.
−Removed: During the year ended March 28, 2020, the Company recognized an impairment charge of $357 million related to the long-lived assets at certain of its retail stores.
−Removed: In addition, upon adoption of ASC 842, Leases, the Company recorded a $152 million impairment, net of tax, of operating lease assets at certain of its retail stores as a reduction to retained earnings on March 31, 2019.
+Added: During the year ended March 27, 2021, the Company recognized an impairment charge of $158 million related to the long-lived assets.
Auditing the Company’s impairment assessment of retail store long-lived assets was complex and highly judgmental due to the significant estimation required in determining the future cash flows used to assess recoverability of each retail store long-lived asset group (undiscounted) and determining the fair value (discounted).
15 unchanged sentences
In our opinion, Capri Holdings Limited and subsidiaries (“the Company”) maintained, in all material respects, effective internal control over financial reporting as of March 27, 2021, based on the COSO criteria.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 28, 2020 and March 30, 2019, the related consolidated statements of operations and comprehensive (loss) income, shareholders’ equity and cash flows for each of the three years in the period ended March 28, 2020, and the related notes and our report dated July 8, 2020 expressed an unqualified opinion thereon.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 27, 2021 and March 28, 2020, the related consolidated statements of operations and comprehensive (loss) income, shareholders’ equity and cash flows for each of the three years in the period ended March 27, 2021, and the related notes and our report dated May 26, 2021 expressed an unqualified opinion thereon.
Basis for Opinion
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A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
19 unchanged sentences
Total assets $ 7,481 $ 7,946
−Removed: Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity
+Added: Liabilities and Shareholders’ Equity
Current liabilities
7 unchanged sentences
Long-term operating lease liabilities 1,657 1,758
−Removed: Deferred rent — 132
Deferred tax liabilities 397 465
3 unchanged sentences
Commitments and contingencies
−Removed: Redeemable noncontrolling interest — 4
Shareholders’ equity
6 unchanged sentences
Additional paid-in capital 1,158 1,085
−Removed: Accumulated other comprehensive income (loss) 75 ( 66 )
+Added: Accumulated other comprehensive income 56 75
Retained earnings 4,270 4,332
18 unchanged sentences
Total operating expenses 2,578 3,463 2,445
−Removed: (Loss) Income from operations ( 192 ) 735 749
+Added: Income (loss) from operations 19 ( 192 ) 735
Other income, net ( 7 ) ( 6 ) ( 4 )
Interest expense, net 43 18 38
−Removed: Foreign currency loss (gain) 11 80 ( 13 )
−Removed: (Loss) income before provision for income taxes ( 215 ) 621 742
+Added: Foreign currency (gain) loss ( 20 ) 11 80
+Added: Income (loss) before provision for income taxes 3 ( 215 ) 621
Provision for income taxes 66 10 79
17 unchanged sentences
Comprehensive (loss) income attributable to Capri $ ( 81 ) $ ( 82 ) $ 426
−Removed: (1) Restructuring and other charges includes store closure costs recorded in connection with the Michael Kors Retail Fleet Optimization Plan (as defined in Note 11) and other restructuring initiatives, and costs recorded in connection with the acquisitions of Gianni Versace S.r.l and Jimmy Choo Group Limited (see Note 5 and Note 11).
See accompanying notes to consolidated financial statements.
5 unchanged sentences
Comprehensive
−Removed: (Loss) Income Retained
−Removed: Earnings Total Equity of Capri Non-controlling Interests Total Equity
+Added: Income (Loss) Retained
+Added: Earnings Total Equity of Capri Non-controlling
+Added: Interests Total Equity
Shares Amounts Shares Amounts
−Removed: Balance at April 1, 2017 209,332 $ — $ 768 ( 53,499 ) $ ( 2,655 ) $ ( 81 ) $ 3,560 $ 1,592 $ 3 $ 1,595
−Removed: Net income — — — — — — 592 592 — 592
−Removed: Other comprehensive income — — — — — 132 — 132 — 132
−Removed: Total comprehensive income — — — — — — — 724 — 724
−Removed: Non-controlling interest of Jimmy Choo joint ventures
−Removed: — — — — — — — — 3 3
−Removed: Partial repurchase of non-controlling interest
−Removed: — — — — — — — — ( 1 ) ( 1 )
−Removed: Vesting of restricted awards, net of forfeitures
−Removed: 542 — — — — — — — — —
−Removed: Exercise of employee share options 1,117 — 14 — — — — 14 — 14
−Removed: Equity compensation expense — — 50 — — — — 50 — 50
−Removed: Purchase of treasury shares — — — ( 7,794 ) ( 361 ) — — ( 361 ) — ( 361 )
−Removed: Redemption of capital/dividends — — — — — — — — ( 1 ) ( 1 )
−Removed: Other — — ( 1 ) — — — — ( 1 ) — ( 1 )
−Removed: Balance at March 31, 2018, as previously reported 210,991 $ — $ 831 ( 61,293 ) $ ( 3,016 ) $ 51 $ 4,152 $ 2,018 $ 4 $ 2,022
−Removed: Adoption of accounting standard (ASC 606) — — — — — — 12 12 — 12
Balance as of April 1, 2018 210,991 — 831 ( 61,293 ) ( 3,016 ) 51 4,164 2,030 4 2,034
2 unchanged sentences
Total comprehensive income (loss) — — — — — — — 426 ( 1 ) 425
−Removed: — — — — — — — 426 ( 1 ) 425
Issuance of ordinary shares 2,395 — 91 — — — — 91 — 91
−Removed: 2,395 — 91 — — — — 91 — 91
Vesting of restricted awards, net of forfeitures 818 — — — — — — — — —
−Removed: 818 — — — — — — — — —
Exercise of employee share options 1,847 — 29 — — — — 29 — 29
−Removed: Equity compensation expense — — 60 — — — — 60 — 60
−Removed: Purchase of treasury shares — — — ( 3,826 ) ( 207 ) — — ( 207 ) — ( 207 )
+Added: Share based compensation expense — — 60 — — — — 60 — 60
+Added: Repurchase of common stock — — — ( 3,826 ) ( 207 ) — — ( 207 ) — ( 207 )
Balance at March 30, 2019, as previously reported
8 unchanged sentences
Total comprehensive loss — — — — — — — ( 82 ) ( 2 ) ( 84 )
−Removed: — — — — — — — ( 82 ) ( 2 ) ( 84 )
Vesting of restricted awards, net of forfeitures 1,262 — — — — — — — — —
−Removed: 1,262 — — — — — — — — —
Exercise of employee share options 7 — — — — — — — — —
−Removed: 7 — — — — — — — — —
−Removed: Equity compensation expense — — 70 — — — — 70 — 70
−Removed: Purchase of treasury shares — — — ( 2,775 ) ( 102 ) — — ( 102 ) — ( 102 )
+Added: Share based compensation expense — — 70 — — — — 70 — 70
+Added: Repurchase of common stock — — — ( 2,775 ) ( 102 ) — — ( 102 ) — ( 102 )
Adjustment of redeemable non-controlling interests to redemption value — — 4 — — — — 4 — 4
Balance at March 28, 2020 217,320 $ — $ 1,085 ( 67,894 ) $ ( 3,325 ) $ 75 $ 4,332 $ 2,167 $ 1 $ 2,168
+Added: Net loss — — — — — — ( 62 ) ( 62 ) ( 1 ) ( 63 )
+Added: Other comprehensive loss — — — — — ( 19 ) — ( 19 ) — ( 19 )
+Added: Total comprehensive loss — — — — — — — ( 81 ) ( 1 ) ( 82 )
+Added: Vesting of restricted awards, net of forfeitures 1,456 — — — — — — — — —
+Added: Exercise of employee share options 447 — 3 — — — — 3 — 3
+Added: Share based compensation expense — — 70 — — — — 70 — 70
+Added: Repurchase of common stock — — — ( 49 ) ( 1 ) — — ( 1 ) — ( 1 )
+Added: Other — — — — — — — — ( 1 ) ( 1 )
+Added: Balance at March 27, 2021 219,223 — $ 1,158 ( 67,943 ) $ ( 3,326 ) $ 56 $ 4,270 $ 2,158 $ ( 1 ) $ 2,157
See accompanying notes to consolidated financial statements.
9 unchanged sentences
Depreciation and amortization 212 249 225
−Removed: Equity compensation expense 70 60 50
+Added: Share-based compensation expense 71 70 60
Impairment of assets 316 708 21
−Removed: Bad debt expense 29 4 8
+Added: Credit loss ( 3 ) 29 4
Losses on store lease exits — — 18
3 unchanged sentences
Tax deficit (benefit) on exercise of share options 4 2 ( 24 )
−Removed: Foreign currency losses (gains) 11 80 ( 13 )
+Added: Foreign currency (gains) losses ( 15 ) 11 80
Other non-cash charges — 3 —
10 unchanged sentences
Purchase of intangible assets — — ( 3 )
−Removed: Cash paid for business acquisitions, net of cash acquired ( 13 ) ( 1,875 ) ( 1,415 )
−Removed: Realized (loss) gain on hedge related to acquisitions — ( 77 ) 5
−Removed: Settlement of a net investment hedge 298 11 —
−Removed: Net cash provided by (used in) investing activities 62 ( 2,125 ) ( 1,533 )
+Added: Cash paid for asset/business acquisitions, net of cash acquired ( 13 ) ( 13 ) ( 1,875 )
+Added: Realized loss on hedge related to acquisitions — — ( 77 )
+Added: Settlement of net investment hedges — 298 11
+Added: Net cash (used in) provided by investing activities ( 124 ) 62 ( 2,125 )
Cash flows from financing activities
2 unchanged sentences
Debt issuance costs ( 4 ) ( 1 ) ( 15 )
−Removed: Purchase of treasury shares ( 102 ) ( 207 ) ( 361 )
+Added: Repurchase of common stock ( 1 ) ( 102 ) ( 207 )
Exercise of employee share options 3 — 29
1 unchanged sentence
Effect of exchange rate changes on cash and cash equivalents 12 ( 4 ) ( 11 )
−Removed: Net increase (decrease) in cash and cash equivalents 420 9 ( 67 )
+Added: Net (decrease) increase in cash, cash equivalents and restricted cash ( 358 ) 420 9
Beginning of period 592 172 163
17 unchanged sentences
All significant intercompany balances and transactions have been eliminated in consolidation.
−Removed: The Company’s audited consolidated financial statements include the following operations for the periods from the respective acquisition/consolidation date through March 28, 2020:
−Removed: • Gianni Versace S.r.l.
−Removed: (“Versace”), acquired on December 31, 2018;
−Removed: • Jimmy Choo Group Limited (“Jimmy Choo”), acquired on November 1, 2017;
−Removed: See Note 5 for additional information related to the above acquisitions.
−Removed: The Company utilizes a 52 to 53 week fiscal year ending on the Saturday closest to March 31.
−Removed: As such, the fiscal years ending on March 28, 2020, March 30, 2019, and March 31, 2018 (“Fiscal 2020”, “Fiscal 2019” and “Fiscal 2018”, respectively) contain 52 weeks.
−Removed: Timing of Filing of Annual Report on Form 10-K
−Removed: As a result of the impacts of the COVID-19 pandemic on the business and employees of the Company, the Company has relied on the Securities and Exchange Commission’s Order under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions From the Reporting and Proxy Delivery Requirements for Public Companies dated March 25, 2020, to delay the filing of its Annual Report on Form 10-K for Fiscal 2020 by up to 45 days from May 27, 2020, which is the original filing due date.
−Removed: The Company’s operations and business have experienced significant disruption due to the unprecedented conditions surrounding the COVID-19 global pandemic.
−Removed: The Company has been following the recommendations of local government and health authorities to minimize exposure risk for its employees.
−Removed: As a result, most of the Company’s corporate offices globally have been temporarily closed due to the pandemic and corporate employees involved in the Company’s annual financial statement closing process and finalizing the audit of the Company’s financial statements for Fiscal 2020 are working remotely.
−Removed: In addition, the Company required additional time to prepare analyses related to the impact of COVID-19 on its business and complete related required disclosures.
−Removed: This has resulted in delays in finalizing the Annual Report on Form 10-K for Fiscal 2020 and accompanying audited financial statements.
+Added: The Company utilizes a 52 to 53 week fiscal year, and the term "Fiscal Year" or "Fiscal" refers to that 52-week or 53-week period.
+Added: The fiscal years ending on March 27, 2021, March 28, 2020 and March 30, 2019 (“Fiscal 2021”, “Fiscal 2020” and “Fiscal 2019”, respectively) contain 52 weeks.
+Added: The Company’s Fiscal 2022 is a 53-week period ending April 2, 2022.
Summary of Significant Accounting Policies
3 unchanged sentences
The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed.
−Removed: The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and doubtful accounts, estimates of inventory net realizable value, the valuation of share-based compensation, the valuation of deferred taxes and the valuation of goodwill, intangible assets and property and equipment, along with the estimated useful lives assigned to these assets.
+Added: The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts and credit losses, estimates of inventory net realizable value, the valuation of share-based compensation, the valuation of deferred taxes and the valuation of goodwill, intangible assets, operating lease right-of-use assets and property and equipment, along with the estimated useful lives assigned to these assets.
Actual results could differ from those estimates.
−Removed: Reclassifications
−Removed: Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation.
The Company experiences certain effects of seasonality with respect to its business.
9 unchanged sentences
To arrive at net sales for wholesale revenue, gross sales are reduced by provisions for estimated future returns, based on current expectations, as well as trade discounts, markdowns, allowances, operational chargebacks, and certain cooperative selling expenses.
−Removed: These estimates are based on such factors as historical trends, actual and forecasted performance and current market conditions, which are reviewed by management on a quarterly basis.
+Added: These estimates are based on such factors as
+Added: historical trends, actual and forecasted performance and current market conditions, which are reviewed by management on a quarterly basis.
The following table details the activity and balances of the Company’s sales reserves for the fiscal years ended March 27, 2021, March 28, 2020, and March 30, 2019 (in millions):
17 unchanged sentences
These agreements allow for the use of the Company’s tradenames to sell its branded products in specific geographic regions.
−Removed: The adverse impact from the COVID-19 pandemic which includes, but is not limited to, temporary retail store closures, wholesale customer store closures, a reduction in retail store traffic, a decline in international tourism and a decrease in consumer consumption is reflected in the Company's Fiscal 2020 total revenue.
+Added: The adverse impact from the COVID-19 pandemic which includes, but is not limited to, temporary retail store closures, wholesale customer store closures, a reduction in retail store traffic, a decline in international tourism and a decrease in consumer consumption is reflected in the Company's Fiscal 2021 and Fiscal 2020 total revenue.
Loyalty Program
−Removed: The Company has a Michael Kors customer loyalty program in the United States, which allows customers to earn points on qualifying purchases toward monetary and non-monetary rewards that may be redeemed for purchases at the Company’s retail stores and e-commerce site.
−Removed: The Company allocates a portion of the initial sales transaction based on the estimated relative fair value of the benefits using statistical formulas based on projected timing of future redemptions and historical activity.
+Added: The Company offers a loyalty program, which allows its Michael Kors U.S.
+Added: customers to earn points on qualifying purchases toward monetary and non-monetary rewards, which may be redeemed for purchases at Michael Kors retail stores and e-commerce sites.
+Added: The Company defers a portion of the initial sales transaction based on the estimated relative fair value of the benefits based on projected timing of future redemptions and historical activity.
These amounts include estimated “breakage” for points that are not expected to be redeemed.
−Removed: The contract liability, net of an estimated “breakage,” is recorded as a reduction to revenue in the consolidated statements of income and comprehensive income and within accrued expenses and other current liabilities in the Company’s consolidated balance sheets.
+Added: The contract liability, net of an estimated “breakage,” is recorded within accrued expenses and other current liabilities in the Company’s consolidated balance sheets and is expected to be recognized within the next 12 months.
See Note 3 for additional information.
Advertising and Marketing Costs
−Removed: Advertising and marketing costs are expensed over the period of benefit and are recorded in selling, general and administrative expenses.
+Added: Advertising and marketing costs are generally expensed when the advertisement is first exhibited and are recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive (loss) income.
Advertising and marketing expense was $ 137 million, $ 201 million and $ 158 million in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively.
3 unchanged sentences
Freight-in expenses are recorded as part of cost of goods sold, along with product costs and other costs to acquire inventory.
−Removed: The costs of preparing products for sale, including warehousing expenses, are included in selling, general and administrative expenses.
+Added: The costs of preparing products for sale, including warehousing expenses, are included in selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive (loss) income.
Selling, general and administrative expenses also include the costs of shipping products to the Company’s e-commerce customers.
−Removed: Shipping and handling costs included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income were $ 157 million, $ 132 million and $ 129 million for Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.
+Added: Shipping and handling costs included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive (loss) income were $ 160 million, $ 157 million and $ 132 million for Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively.
Shipping and handling costs charged to customers are included in total revenue.
−Removed: Cash and Cash Equivalents
+Added: COVID-19 Related Government Assistance and Subsidies
+Added: As there is no definitive guidance under U.S.
+Added: GAAP, the Company has applied the guidance under International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance ("IAS 20").
+Added: The Company has elected to follow the income approach under IAS 20 and recognize these funds as a reduction to the related expense in the Company’s consolidated statements of operations and comprehensive (loss) income.
+Added: During Fiscal 2021, the Company recognized $ 37 million related to government assistance and subsidies.
+Added: Cash, Cash Equivalents and Restricted Cash
All highly liquid investments with original maturities of three months or less are considered to be cash equivalents.
Included in the Company’s cash and cash equivalents as of March 27, 2021 and March 28, 2020 are credit card receivables of $ 25 million and $ 4 million, respectively, which generally settle within two to three business days.
−Removed: The decrease in credit card receivables year over year is mainly due to the impact on sales from the COVID-19 pandemic.
−Removed: Inventories mainly consist of finished goods with the exception of raw materials and work in process inventory.
+Added: The increase in credit card receivables year over year is mainly due to the impact on sales from COVID-19.
+Added: A reconciliation of cash, cash equivalents and restricted cash as of March 27, 2021 and March 28, 2020 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:
+Added: Fiscal Years Ended
+Added: 2021 March 28,
+Added: Reconciliation of cash, cash equivalents and restricted cash
+Added: Cash and cash equivalents $ 232 $ 592
+Added: Restricted cash included within prepaid expenses and other current assets 2 —
+Added: Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 234 $ 592
+Added: Inventories primarily consist of finished goods with the exception of raw materials and work in process inventory.
The combined total of raw materials and work in process inventory recorded on the Company's consolidated balance sheets as of March 27, 2021 and March 28, 2020 were $ 28 million and $ 27 million, respectively.
7 unchanged sentences
Our historical estimates of these adjustments have not differed materially from actual results.
−Removed: The net realizable value of the Company's inventory as of March 28, 2020 includes the adverse impacts connected to the COVID-19 pandemic.
+Added: The net realizable value of the Company's inventory as of March 27, 2021 and March 28, 2020 includes the adverse impacts connected to the COVID-19 pandemic.
This includes the impact from temporary retail store closures, wholesale customer store closures, reductions in retail store traffic, a decline in international tourism and a decrease in consumer consumption.
15 unchanged sentences
The Company’s customer relationships are amortized over five to eighteen years .
−Removed: Reacquired rights recorded in connection with the acquisition of MKHKL are amortized through March 31, 2041, the original expiration date of the Michael Kors license agreement in the Greater China region.
+Added: Reacquired rights recorded in connection with the acquisition of Michael Kors (HK) Limited and Subsidiaries (“MKHKL”) are amortized through March 31, 2041, the original expiration date of the Michael Kors license agreement in the Greater China region.
The trademark for the Michael Kors brand is amortized over twenty years .
−Removed: Impairment of Long-lived Assets
−Removed: The Company evaluates its long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable.
−Removed: The Company’s impairment testing is based on its best estimate of its future operating cash flows.
−Removed: To the extent the sum of the estimated undiscounted future cash flows associated with the asset is less than the carrying value, the Company typically recognizes an impairment loss measured by the amount in which the carrying value exceeds the fair value of the asset, taking into consideration other market assumptions.
−Removed: The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of current real estate market values.
+Added: Long-lived Assets
+Added: The Company evaluates all long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable.
+Added: For the purposes of impairment testing, the Company groups long-lived assets at the lowest level of identifiable cash flow.
+Added: The leasehold improvements are typically amortized over the life of the store lease, including reasonably assured renewals and the shop-in-shops are amortized over a useful life of three or four years .
+Added: The Company's impairment testing is based on its best estimate of the future operating cash flows.
+Added: If the sum of our estimated undiscounted future cash flows associated with the asset is less than the asset’s carrying value, the Company would recognize an impairment charge, which is measured as the amount by which the carrying value exceeds the fair value of the asset.
+Added: The fair values determined by management require significant judgment and include certain assumptions regarding future sales and expense growth rates, discount rates and estimates of real estate market fair values.
As such, these estimates may differ from actual results and are affected by future market and economic conditions.
+Added: During Fiscal 2021, Fiscal 2020 and Fiscal 2019, the Company recorded impairment charges of $ 158 million, $ 357 million and $ 21 million, respectively, which were primarily related to operating lease right-of-use assets and fixed assets of our retail store locations.
+Added: Please refer to Note 8, Note 9 and Note 14 for additional information.
Goodwill and Other Indefinite-lived Intangible Assets
−Removed: The Company records indefinite-lived intangible assets based on fair value on the date of acquisition.
−Removed: Goodwill is recorded for the difference between the fair value of the purchase consideration over the fair value of the net identifiable tangible and intangible assets acquired.
+Added: The Company records intangible assets based on their fair value on the date of acquisition.
+Added: Goodwill is recorded as the difference between the fair value of the purchase consideration and the fair value of the net identifiable tangible and intangible assets acquired.
The brand intangible assets recorded in connection with the acquisitions of Versace and Jimmy Choo were determined to be indefinite-lived intangible assets, which are not subject to amortization.
−Removed: The Company performs an impairment assessment of goodwill, as well as the Versace and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist.
+Added: The Company performs an impairment assessment of goodwill, as well as the Versace brand and Jimmy Choo brand intangible assets on an annual basis, or whenever impairment indicators exist.
In the absence of any impairment indicators, goodwill, the Versace brand and the Jimmy Choo brand are assessed for impairment during the fourth quarter of each fiscal year.
Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.
−Removed: The Company may assess its goodwill and its brand indefinite-lived intangible assets for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value.
−Removed: When performing a qualitative test, the Company assesses various factors including industry and market conditions, macroeconomic conditions and performance of the Company’s businesses.
−Removed: If the results of the qualitative assessment indicate that it is more likely than not that the Company’s goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis would be performed to determine if impairment is required.
+Added: The Company may assess its goodwill and its brand intangible assets for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these assets is greater than their carrying value.
+Added: When performing a qualitative test, the Company assesses various factors, including industry and market conditions, macroeconomic conditions and performance of its businesses.
+Added: If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis is performed to determine if impairment is required.
The Company may also elect to perform a quantitative analysis of goodwill and its indefinite-lived intangible assets initially rather than using a qualitative approach.
The impairment testing for goodwill is performed at the reporting unit level.
−Removed: The valuation methods used in the quantitative fair value assessment included a discounted cash flow analysis which requires the Company’s management to make certain assumptions and estimates regarding industry trends and future profitability of the Company’s reporting units.
+Added: The Company uses industry accepted valuation models and set criteria that are reviewed and approved by various levels of management and, in certain instances, it engages independent third-party valuation specialists.
+Added: To determine the fair value of a reporting unit, the Company uses a combination of the income and market approaches, when applicable.
+Added: The Company believes the blended use of both models, when applicable, compensates for the inherent risk associated with either model if used on a stand-alone basis, and this combination is indicative of the factors a market participant would consider when performing a similar valuation.
If the fair value of a reporting unit exceeds the related carrying value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed.
If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference.
−Removed: This valuation is affected by certain estimates including the Company’s future revenue growth rates, margins and discount rates.
−Removed: Future events could cause the Company to conclude that impairment indicators exist, and, therefore, that goodwill may be impaired.
−Removed: When performing a quantitative impairment assessment of the Company’s brand indefinite-lived intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the "relief from royalty" method, assuming that a third party would be willing to pay a royalty in lieu of ownership for this intangible asset.
−Removed: This approach is dependent on many factors, including estimates of future growth, royalty rates, and discount rates.
+Added: These valuations are affected by certain estimates, including future revenue growth rates, future operating expense growth rates, gross margins and discount rates.
+Added: Future events could cause us to conclude that impairment indicators exist, and goodwill may be impaired.
+Added: When performing a quantitative impairment assessment of our brand intangible assets, the fair value of the Versace and the Jimmy Choo brands is estimated using a discounted cash flow analysis based on the "relief from royalty" method, assuming that a third party would be willing to pay a royalty in lieu of ownership for this intangible asset.
+Added: This approach is dependent on many factors, including estimates of future revenue growth rates, royalty rates and discount rates.
Actual future results may differ from these estimates.
−Removed: Impairment loss is recognized when the estimated fair value of the indefinite-lived brand intangible assets is less than its carrying amount.
−Removed: The Company recorded impairment charges of $ 171 million related to the goodwill associated with the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $ 180 million related to the Jimmy Choo brand indefinite-lived intangible asset during Fiscal 2020.
−Removed: The impairment charges were recorded within impairment of assets on the Company's consolidated statement of operations and comprehensive income for the fiscal year ended March 28, 2020.
−Removed: See Note 9 and Note 14 for information relating to the Company’s annual impairment analysis performed during the fourth quarter of Fiscal 2020.
−Removed: The Company uses a combination of insurance and self-insurance for losses related to a number of risks, including workers’ compensation and employee-related health care benefits.
+Added: An impairment loss is recognized when the estimated fair value of the brand intangible assets is less than its carrying amount.
+Added: During the fourth quarter of Fiscal 2021, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for each brand.
+Added: Based on qualitative impairment assessment of the Michael Kors reporting units, the Company concluded that it is more likely than not that the fair value of the Michael Kors reporting units exceeded its carrying value and, therefore, was not impaired.
+Added: The Company elected to perform quantitative impairment analysis for both the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair values of each brands' reporting units.
+Added: The Company also elected to perform an impairment analysis for both the Versace and Jimmy Choo brand intangible assets using an income approach to estimate the fair values.
+Added: Based on the results of these assessments, the Company determined there was no impairment loss for the Jimmy Choo retail reporting unit as its fair value is approximately 3 % higher than the carrying value, which has a goodwill balance of $ 221 million.
+Added: The Company also concluded that the fair values of the Versace reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.
+Added: The fair value of the Versace retail reporting unit, Versace wholesale reporting unit and Versace licensing reporting unit are at least 20 % higher than their respective carrying values.
+Added: The fair value of the Versace retail brand and Versace wholesale brand are more than 10 % higher than their respective carrying values.
+Added: However, the Company concluded that the fair values of the Jimmy Choo wholesale and Jimmy Choo licensing reporting units, along with the Jimmy Choo brand intangible assets, did not exceed their related carrying amounts.
+Added: These impairment charges were primarily related to higher discount rates in the current year driven by a change in market factors as well as a shift in expected revenue and earnings mix to the retail segment.
+Added: Accordingly, the Company recorded impairment charges of $ 94 million related to the Jimmy Choo wholesale and Jimmy Choo licensing reporting units and $ 69 million related to the Jimmy Choo brand intangible assets during Fiscal 2021.
+Added: The Company recorded impairment charges of $ 171 million related to the Jimmy Choo retail and Jimmy Choo licensing reporting units and $ 180 million related to the Jimmy Choo brand intangible assets during Fiscal 2020.
+Added: The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive (loss) income for the fiscal years ended March 27, 2021 and March 28, 2020.
+Added: The Company did not incur any impairment charges in Fiscal 2019.
+Added: See Note 9 for information relating to its annual impairment analysis performed during the fourth quarter of Fiscal 2021, Fiscal 2020 and Fiscal 2019.
+Added: It is possible that the Company's conclusions regarding impairment or recoverability of goodwill or other indefinite intangible assets could change in future periods if, for example, (i) the Company's businesses do not perform as projected, (ii) overall economic conditions in future years vary from current assumptions, (iii) business conditions or strategies change from our current assumptions, (iv) discount rates change, (v) market multiples change or (vi) the identification of the Company's reporting units change, among other factors.
+Added: Such changes could result in a future impairment charge of goodwill or other indefinite-lived intangible assets.
+Added: The Company uses a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks, including workers’ compensation and employee-related health care benefits.
The Company also maintains stop-loss coverage with third-party insurers to limit its exposure arising from claims.
1 unchanged sentence
Although the Company believes that it can reasonably estimate losses related to these claims, actual results could differ from these estimates.
−Removed: The Company also maintains other types of customary business insurance policies, including business interruption insurance.
+Added: The Company also maintains other types of customary business insurance policies, including general liability, marine transport and inventory and business interruption insurance.
Insurance recoveries represent gain contingencies and are recorded upon actual settlement with the insurance carrier.
6 unchanged sentences
If factors change and the Company employs different assumptions, the fair value of future awards and the resulting share-based compensation expense may differ significantly from what the Company has estimated in the past.
−Removed: The closing market price of the Company’s shares on the date of grant is used to determine the grant date fair value of restricted shares, time-based restricted shares units (“RSU”s) and performance-based RSUs.
+Added: The closing market price of the Company’s shares on the date of grant is used to determine the grant date fair value of restricted shares, time-based restricted stock units (“RSUs") and performance-based RSUs.
These fair values are recognized as expense over the requisite service period, net of estimated forfeitures, based on expected attainment of pre-established performance goals for performance grants, or the passage of time for those grants which have only time-based vesting requirements.
4 unchanged sentences
The resulting translation adjustments are recorded separately in shareholders’ equity as a component of accumulated other comprehensive (loss) income.
−Removed: Foreign currency income and losses resulting from the re-measuring of transactions denominated in a currency other than the functional currency of a particular entity are included in foreign currency loss (gain) on the Company’s consolidated statements of operations and comprehensive income.
+Added: Foreign currency income and losses resulting from the re-measuring of transactions denominated in a currency other than the functional currency of a particular entity are included in foreign currency (gain) loss on the Company’s consolidated statements of operations and comprehensive (loss) income.
Derivative Financial Instruments
6 unchanged sentences
In connection with the September 24, 2018 definitive agreement to acquire all of the outstanding shares of Versace, the Company entered into forward foreign currency exchange contracts with notional amounts totaling € 1.680 billion (approximately $ 2.001 billion) to mitigate its foreign currency exchange risk through the expected closing date of the acquisition, which were settled on December 21, 2018.
−Removed: Likewise, in connection with the July 25, 2017 cash offer to acquire Jimmy Choo, the Company entered into a forward foreign currency exchange contract with a notional amount of £ 1.115 billion (approximately $ 1.469 billion) to mitigate its foreign currency exchange risk through the expected closing date of the acquisition, which was settled on October 30, 2017.
−Removed: These derivative contracts were not designated as accounting hedges.
−Removed: Therefore, changes in fair value are recorded to foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive income.
+Added: This derivative contract was not designated as an accounting hedge.
+Added: Therefore, changes in fair value were recorded to foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive (loss) income.
The Company’s accounting policy is to classify cash flows from derivative instruments in the same category as the cash flows from the items being hedged.
−Removed: Accordingly, the Company classified $ 77 million of realized losses and $ 5 million of realized gains, respectively, relating to these derivative instruments within cash flows from investing activities during Fiscal 2019 and Fiscal 2018.
+Added: Accordingly, the Company classified $ 77 million of realized losses relating to this derivative instrument within cash flows from investing activities during Fiscal 2019.
The Company designates certain contracts related to the purchase of inventory that qualify for hedge accounting as cash flow hedges.
Formal hedge documentation is prepared for all derivative instruments designated as hedges, including description of the hedged item and the hedging instrument and the risk being hedged.
−Removed: The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive (loss) income until the hedged item affects earnings.
−Removed: When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive (loss) income are recognized within cost of goods sold.
+Added: The changes in the fair value for contracts designated as cash flow hedges is recorded in equity as a component of accumulated other comprehensive income (loss) until the hedged item affects earnings.
+Added: When the inventory related to forecasted inventory purchases that are being hedged is sold to a third party, the gains or losses deferred in accumulated other comprehensive income (loss) are recognized within cost of goods sold.
The Company uses regression analysis to assess effectiveness of derivative instruments that are designated as hedges, which compares the change in the fair value of the derivative instrument to the change in the related hedged item.
If the hedge is no longer expected to be highly effective in the future, future changes in the fair value are recognized in earnings.
−Removed: For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive income.
+Added: For those contracts that are not designated as hedges, changes in the fair value are recorded to foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive (loss) income.
The Company classifies cash flows relating to its forward foreign currency exchange contracts related to purchase of inventory consistently with the classification of the hedged item, within cash flows from operating activities.
6 unchanged sentences
Dollars and these foreign currencies.
−Removed: The Company has elected the spot method of designating these contracts under ASU 2017-12 and has designated these contracts as net investment hedges.
−Removed: The net gain or (loss) on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive (loss) income on the Company’s consolidated balance sheets.
−Removed: Interest accruals and coupon payments are recognized directly in interest expense in the Company’s statement of operations and comprehensive income.
+Added: The Company has elected the spot method of designating these contracts under ASU 2017-12, “ Derivatives and Hedging (Topic 815):
+Added: Targeted Improvements to Accounting for Hedging Activities, ” and has designated these contracts as net investment hedges.
+Added: The net gain or (loss) on the net investment hedge is reported within foreign currency translation gains and losses (“CTA”), as a component of accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets.
+Added: Interest accruals and coupon payments are recognized directly in interest expense in the Company’s consolidated statements of operations and comprehensive (loss) income.
Upon discontinuation of a hedge, all previously recognized amounts remain in CTA until the net investment is sold, diluted or liquidated.
1 unchanged sentence
The early termination of these hedges resulted in the Company receiving $ 296 million in cash during the fourth quarter of Fiscal 2020.
+Added: During Fiscal 2021, the Company resumed its normal hedging program and entered into multiple fixed-to-fixed cross-currency swap agreements to hedge its net investment in Euro-denominated and Japanese Yen-denominated subsidiaries against future volatility in the exchange rate between the U.S.
+Added: Dollar and these currencies.
+Added: Interest Rate Swap Agreements
+Added: The Company also uses interest rate swap agreements to hedge the variability of its cash flows resulting from floating interest rates on the Company’s borrowings.
+Added: When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income (loss) and are reclassified into interest expense in the same period during which the hedged transactions affect earnings.
Deferred income tax assets and liabilities have been provided for temporary differences between the tax bases and financial reporting bases of the Company’s assets and liabilities using the tax rates and laws in effect for the periods in which the differences are expected to reverse.
2 unchanged sentences
The Company periodically reviews the recoverability of its deferred tax assets and provides valuation allowances, as deemed necessary, to reduce deferred tax assets to amounts that more-likely-than-not will be realized.
−Removed: The Company’s management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors.
+Added: The Company’s management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings within various taxing jurisdictions, expectations of future taxable income, the carryforward periods remaining and other factors.
Changes in the required valuation allowance are recorded in income in the period such determination is made.
8 unchanged sentences
The Company’s leases generally have terms of up to 10 years, generally require a fixed annual rent and may require the payment of additional rent if store sales exceed a negotiated amount.
−Removed: Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through May 2024.
−Removed: The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its Michael Kors Retail Fleet Optimization Plan, as defined in Note 11.
+Added: Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through November 2024.
+Added: The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its restructuring initiatives, as defined in Note 11.
Fixed sublease payments received are recognized on a straight-line basis over the sublease term.
7 unchanged sentences
Certain leases also contain termination options with an associated penalty.
−Removed: Generally, the Company is reasonably certain not to exercise these options and as such, they are not included in the determination of the expected lease term.
+Added: Generally, the Company is reasonably certain not to exercise these options and as such, they are not
+Added: included in the determination of the expected lease term.
The Company recognizes operating lease expense on a straight-line basis over the lease term.
8 unchanged sentences
These debt issuance costs and any discounts on issued debt are amortized on a straight-line basis, which approximates the effective interest method, as interest expense over the term of the related indebtedness.
−Removed: Deferred financing fees associated with the Company’s revolving credit facilities are recorded within prepaid expenses and other current assets.
−Removed: Deferred financing fees and unamortized discounts associated with the Company’s other borrowings are recorded as an offset to long-term debt in the Company’s consolidated balance sheets.
+Added: Deferred financing fees associated with the Company’s Revolving Credit Facilities are primarily recorded within other assets in the Company’s consolidated balance sheets.
+Added: Deferred financing fees and unamortized discounts associated with the Company’s other borrowings are primarily recorded as an offset to long-term debt in the Company’s consolidated balance sheets.
See Note 12 for additional information.
Net (Loss) Income per Share
−Removed: The Company’s basic net (loss) income per ordinary share is calculated by dividing net loss by the weighted average number of ordinary shares outstanding during the period.
−Removed: Diluted net loss per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and restricted share units ("RSUs"), were exercised or converted into ordinary shares.
+Added: The Company’s basic net (loss) income per ordinary share is calculated by dividing net (loss) income by the weighted average number of ordinary shares outstanding during the period.
+Added: Diluted net (loss) income per ordinary share reflects the potential dilution that would occur if share option grants or any other potentially dilutive instruments, including restricted shares and RSUs, were exercised or converted into ordinary shares.
These potentially dilutive securities are included in diluted shares to the extent they are dilutive under the treasury stock method for the applicable periods.
−Removed: Performance-based RSUs are
−Removed: included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.
−Removed: The components of the calculation of basic net (loss) income per ordinary share and diluted net loss per ordinary share are as follows (in millions, except share and per share data):
+Added: Performance-based RSUs are included in diluted shares if the related performance conditions are considered satisfied as of the end of the reporting period and to the extent they are dilutive under the treasury stock method.
+Added: The components of the calculation of basic net (loss) income per ordinary share and diluted net (loss) income per ordinary share are as follows (in millions, except share and per share data):
Fiscal Years Ended
4 unchanged sentences
Weighted average dilutive share equivalents:
−Removed: Share options and restricted shares/units, and performance restricted share units — 1,848,882 2,819,299
+Added: Share options and restricted stock units, and performance restricted stock units — — 1,848,882
Diluted weighted average shares 150,453,568 150,714,598 151,614,350
4 unchanged sentences
(1) Basic and diluted net (loss) income per share are calculated using unrounded numbers.
−Removed: Share equivalents for 3,752,560 shares, 1,409,415 shares and 1,662,889 shares, for Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively, have been excluded from the above calculation due to their anti-dilutive effect.
−Removed: Diluted net loss per share attributable to Capri for Fiscal 2020 excluded all potentially dilutive securities because there was a net loss attributable to Capri for the period and, as such, the inclusion of these securities would have been anti-dilutive.
−Removed: Noncontrolling Interest and Redeemable Noncontrolling Interest
+Added: Share equivalents of 3,658,959 shares, 3,752,560 shares and 1,409,415 shares, for Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively, have been excluded from the above calculation due to their anti-dilutive effect.
+Added: Diluted net loss per share attributable to Capri for Fiscal 2021 and Fiscal 2020 excluded all potentially dilutive securities because there was a net loss attributable to Capri for the period and, as such, the inclusion of these securities would have been anti-dilutive.
+Added: Noncontrolling Interest
The Company has an ownership interest in the Michael Kors Latin American joint venture, MK (Panama) Holdings, S.A.
−Removed: and subsidiaries of 75 %, an ownership interest in the Jimmy Choo EMEA Joint Ventures, JC Industry S.r.L of 33 % and JC Gulf Trading LLC of 49 %, a 50 % ownership interest in J.
+Added: and subsidiaries of 75 %, an ownership interest in the Jimmy Choo EMEA joint venture JC Gulf Trading LLC of 49 %, an ownership interest in the Jimmy Choo Macau joint venture J.
+Added: Choo (Macau) Co.
+Added: Limited of 70 %, and a 50 % ownership interest in J.
Choo Russia J.V.
−Removed: Limited, and a 70 % interest in Versace Australia PTY Limited (“Versace Australia”).
+Added: Limited and its subsidiary.
Recently Adopted Accounting Pronouncements
−Removed: Lease Accounting
−Removed: On March 31, 2019, the Company adopted ASU 2016-02, “ Leases (Topic 842), ” which requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet for all leases, except certain short-term leases.
−Removed: In evaluating the impact of ASU 2016-02, the Company considered guidance provided by several additional ASUs issued by the FASB, including ASU 2018-01, “ Land Easement Practical Expedient for Transition to Topic 842 ” in January 2018, ASU 2018-10, “ Codification Improvements to Topic 842, Leases ” and ASU 2018-11, “ Leases (Topic 842):
−Removed: Targeted Improvements, ” both issued in July 2018, and ASU 2018-20, “ Leases (Topic 842) - Narrow-Scope Improvements for Lessors ” issued in December 2018.
−Removed: In connection with its implementation of ASU 2016-02, the Company adopted the package of three practical expedients, allowing it to carry forward its previous lease classification and embedded lease evaluations and not to reassess initial direct costs as of the date of adoption.
−Removed: The Company also adopted the practical expedient allowing it to combine lease and non-lease components for its real estate leases.
−Removed: Lastly, the Company adopted the practical expedient provided by ASU 2018-11, “ Leases (Topic 842):
−Removed: Targeted Improvements, ” allowing it to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating the comparative prior year periods .
−Removed: The Company’s existing lease obligations, which relate to stores, corporate locations, warehouses, and equipment, are subject to the new standard and resulted in recording of lease liabilities and right-of-use assets for operating leases on the Company’s consolidated balance sheet.
−Removed: The below table details the balance sheet adjustments recorded on March 31, 2019 in connection with the Company’s adoption of ASU 2016-02 (in millions):
−Removed: March 30, 2019
−Removed: As Reported under ASC 840 ASC 842 Adjustments March 31, 2019
−Removed: As Reported Under ASC 842
−Removed: Prepaid expenses and other current assets $ 221 $ ( 23 ) (1)
−Removed: Operating lease right-of-use assets — 1,876 (2)
−Removed: Intangible assets, net 2,293 ( 40 ) (3)
−Removed: Deferred tax assets 112 38 (4)
−Removed: Current portion of operating lease liabilities — 386 (5)
−Removed: Accrued expenses and other current liabilities 374 ( 72 ) (6)
−Removed: Long-term portion of operating lease liabilities — 1,828 (5)
−Removed: Deferred Rent 132 ( 132 ) (7)
−Removed: Deferred tax liabilities 438 ( 7 ) (4)
−Removed: Shareholders’ Equity
−Removed: Retained earnings 4,707 ( 152 ) (4)
−Removed: (1) Represents the reclassification of rent paid in advance to current operating lease liabilities.
−Removed: (2) Represents the recognition of operating lease right-of-use assets, reflecting the reclassifications of deferred rent, sublease liabilities, tenant allowances, and lease rights.
−Removed: This balance also reflects the initial impairments of the operating lease right-of-use assets recorded through retained earnings, as described below.
−Removed: (3) Represents the reclassifications of lease rights for leases recorded in conjunction with the Company’s acquisitions to operating lease right-of-use assets.
−Removed: (4) Represents the initial impairment recognized through retained earnings for certain underperforming retail store locations for which property and equipment were previously impaired, net of associated deferred taxes.
−Removed: (5) Represents the recognition of current and non-current lease liabilities for fixed payments associated with the Company’s operating leases.
−Removed: (6) Represents the reclassification of $ 54 million in sublease liabilities, primarily related to Michael Kors retail stores closed under the Michael Kors Retail Fleet Optimization Plan as defined in Note 10, as well as the reclassification of $ 18 million of deferred rent and tenant allowances to operating lease right-of-use assets.
−Removed: (7) Represents the reclassification of noncurrent deferred rent and tenant improvement allowances to operating lease right-of-use assets.
−Removed: See Note 4 for additional disclosures related to the Company’s lease accounting policy.
−Removed: Recently Issued Accounting Pronouncements
−Removed: The Company has considered all new accounting pronouncements and have concluded that there are no new pronouncements that are expected to have a material impact on our results of operations, financial condition or cash flows based on current information.
Measurement of Credit Losses on Financial Instruments
−Removed: In June 2016, the FASB issued ASU No.
+Added: On March 29, 2020, the Company adopted ASU No.
2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which amends the guidance on measuring credit losses for certain financial assets measured at amortized cost, including trade receivables.
−Removed: The FASB has subsequently issued several updates to the standard, providing additional guidance on certain topics covered by the standard.
−Removed: This update requires entities to recognize an allowance for credit losses using a forward-looking expected loss impairment model, taking into consideration historical experience, current conditions, and supportable forecasts that impact collectibility.
−Removed: 2016-13 is effective for the Company beginning in its Fiscal 2021.
−Removed: The adoption of this update is not expected to have a material impact on the Company's consolidated financial statements.
+Added: The Financial Accounting Standards Board has subsequently issued several updates to the standard, providing additional guidance on certain topics covered by the standard.
+Added: This update requires entities to recognize an allowance for credit losses using a forward-looking expected loss impairment model, taking into consideration historical experience, current conditions and supportable forecasts that impact collectability.
+Added: The adoption of this update did not have a material impact on the Company’s consolidated financial statements.
+Added: Implementation Costs Associated with Cloud Computing Arrangements
+Added: On March 29, 2020, the Company adopted ASU No.
+Added: 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software:
+Added: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"), which provides guidance related to the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract.
+Added: The guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license.
+Added: The adoption of this update did not have a material impact on the Company’s consolidated financial statements.
+Added: Recently Issued Accounting Pronouncements
+Added: The Company has considered all new accounting pronouncements and, other than the recent pronouncements discussed below, have concluded that there are no new pronouncements that may have a material impact on the Company’s results of operations, financial condition or cash flows based on current information
+Added: Reference Rate Reform
+Added: In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" and in January 2021, issued ASU 2021-01, "Reference Rate Reform:
+Added: Both of these updates aim to ease the potential burden in accounting for reference rate reform.
+Added: These updates provide optional expedients and exceptions, if certain criteria are met, for applying accounting principles generally accepted in the United States to contract modifications, hedging relationships and other transactions affected by the expected market transition from the London interbank offered rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”).
+Added: The amendments were effective upon issuance and allow companies to adopt the amendments on a prospective basis through December 31, 2022.
+Added: The Company is currently evaluating the impact of these updates on its consolidated financial statements.
Revenue Recognition
6 unchanged sentences
The Company has chosen to apply the practical expedient allowing it not to disclose the amount of the transaction price allocated to the remaining performance obligations that have an expected duration of 12 months or less.
−Removed: The Company generates sales through directly operated stores and e-commerce throughout the Americas (U.S., Canada and Latin America), EMEA (Europe, Middle East and Africa) and certain parts of Asia.
+Added: The Company generates sales through directly operated stores and e-commerce throughout the Americas (U.S., Canada and Latin America), EMEA (Europe, Middle East and Africa) and certain parts of Asia (including Australia).
Retail revenue is recognized when control of the product is transferred at the point of sale at Company owned stores, including concessions.
8 unchanged sentences
The Company anticipates that substantially all of its outstanding gift cards will be redeemed within the next 12 months.
−Removed: The contract liability related to gift cards, net of estimated “breakage”, was $ 11 million and $ 13 million as of March 28, 2020 and March 30, 2019, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheet.
+Added: The contract liability related to gift cards, net of estimated “breakage,” was $ 12 million and $ 11 million as of March 27, 2021 and March 28, 2020, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheets.
Loyalty Program .
3 unchanged sentences
These amounts include estimated “breakage” for points that are not expected to be redeemed.
−Removed: The contract liability, net of an estimated “breakage,” of $ 2 million and $ 3 million as of March 28, 2020 and March 30, 2019, respectively, is recorded as a reduction to revenue in the consolidated statements of income and comprehensive income and within accrued expenses and other current liabilities in the Company’s consolidated balance sheet and is expected to be recognized within the next 12 months.
The Company’s products are sold primarily to major department stores, specialty stores and travel retail shops throughout the Americas, EMEA and Asia.
5 unchanged sentences
The Company provides its third-party licensees with the right to access its Versace, Jimmy Choo and Michael Kors trademarks under product and geographic licensing arrangements.
−Removed: Under product licensing arrangements, the Company allows third parties to manufacture and sell luxury goods, including watches and jewelry, fragrances, sunglasses and eyewear, using the Company’s trademarks.
−Removed: Under geographic licensing arrangements, third party licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa, certain parts of Asia and Australia.
+Added: Under product licensing arrangements, the Company allows third parties to manufacture and sell luxury goods, including watches and jewelry, fragrances, eyewear and home furnishings, using the Company’s trademarks.
+Added: Under geographic licensing arrangements, third party licensees receive the right to distribute and sell products bearing the Company’s trademarks in retail and/or wholesale channels within certain geographical areas, including Brazil, the Middle East, Eastern Europe, South Africa and certain parts of Asia.
The Company recognizes royalty revenue and advertising contributions based on the percentage of sales made by the licensees.
5 unchanged sentences
Generally the Company’s guaranteed minimum royalty amounts due from licensees relate to contractual periods that do not exceed 12 months, however, some of our guaranteed minimums for Versace are multi-year based.
−Removed: As of March 28, 2020, contractually guaranteed minimum fees from our license agreements expected to be recognized as revenue during future periods were as follows (in millions):
+Added: As of March 27, 2021, contractually guaranteed minimum fees from the Company's license agreements expected to be recognized as revenue during future periods were as follows (in millions):
Contractually Guaranteed Minimum Fees
15 unchanged sentences
Total contract liabilities were $ 18 million and $ 22 million as of March 27, 2021 and March 28, 2020, respectively.
−Removed: Contract liabilities decreased $ 5 million as a result of the adoption of ASC 606 on April 1, 2018, due to recognition of gift card breakage revenue (see Note 2).
During Fiscal 2021 and Fiscal 2020, the Company recognized $ 9 million and $ 20 million in revenue, respectively, relating to contract liabilities that existed at March 28, 2020 and March 30, 2019 , respectively.
−Removed: There were no contract assets recorded as of March 28, 2020 and March 30, 2019.
+Added: There were no material contract assets recorded as of March 27, 2021 and March 28, 2020.
There were no changes in historical variable consideration estimates that were materially different from actual results.
16 unchanged sentences
Total Michael Kors 2,924 4,153 4,511
−Removed: 4,153 4,511 4,496
Total revenue - the Americas 2,172 3,115 3,182
2 unchanged sentences
Total revenue $ 4,060 $ 5,551 $ 5,238
−Removed: The following table presents the Company’s supplemental balance sheet information related to leases (in millions):
+Added: The following table presents the Company’s supplemental balance sheets information related to leases (in millions):
Balance Sheet Location March 27,
+Added: 2021 March 28,
Operating leases Operating lease right-of-use assets $ 1,504 $ 1,625
1 unchanged sentence
Operating leases Long-term portion of operating lease liabilities $ 1,657 $ 1,758
−Removed: The components of net lease costs for the fiscal year ended March 28, 2020 were as follows (in millions):
−Removed: Statement of Operations and
−Removed: Comprehensive Income Location March 28, 2020
+Added: The components of net lease costs for the fiscal year ended March 27, 2021 and March 28, 2020 were as follows (in millions):
+Added: Consolidated Statement of Operations and
+Added: Comprehensive (Loss) Income Location March 27,
+Added: 2021 March 28,
Operating lease cost Selling, general and administrative expenses $ 432 $ 449
−Removed: Short-term lease cost Selling, general and administrative expenses 18
Variable lease cost (1)
Selling, general and administrative expenses 69 155
+Added: Short-term lease cost Selling, general and administrative expenses 15 18
Sublease income Selling, general and administrative expenses ( 6 ) ( 6 )
1 unchanged sentence
(1) The Company elected to account for rent concessions negotiated in connection with COVID-19 as if it were contemplated as part of the existing contract and these concessions are recorded as variable lease expense.
−Removed: There is an immaterial impact from these concession for the fiscal year ended March 28, 2020.
+Added: As of the fiscal year ended March 27, 2021, rent concessions due to COVID-19 were $ 52 million.
+Added: There is an immaterial impact from these concessions for the fiscal year ended March 28, 2020.
The following table presents the Company’s supplemental cash flow information related to leases (in millions):
4 unchanged sentences
Lease assets obtained in exchange for new lease liabilities 348 428
−Removed: The following tables summarizes the weighted average remaining lease term and weighted average discount rate related to the Company’s operating lease right-of-use assets and lease liabilities recorded on the balance sheet as of March 28, 2020:
−Removed: March 28, 2020
+Added: Rent concessions due to COVID-19 52 —
+Added: The following tables summarizes the weighted average remaining lease term and weighted average discount rate related to the Company’s operating lease right-of-use assets and lease liabilities recorded on the balance sheets as of March 27, 2021 and March 28, 2020:
+Added: March 27, 2021 March 28,
Operating leases:
19 unchanged sentences
Fiscal 2026 3
−Removed: Thereafter 12
Total sublease income $ 29
−Removed: Additionally, the Company had approximately $ 13 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of March 28, 2020.
+Added: Additionally, the Company had approximately $ 23 million and $ 13 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of March 27, 2021 and March 28, 2020, respectively.
See Note 2 for additional information on the Company's accounting policies related to leases.
5 unchanged sentences
On December 31, 2018, the Company completed the acquisition of Versace for a total enterprise value of approximately € 1.753 billion (or approximately $ 2.005 billion), giving effect to an investment made by the Versace family at acquisition of 2.4 million shares.
−Removed: The acquisition was funded through a combination of borrowings under the Company’s 2018 Term Loan Facility, drawings under the Company’s Revolving Credit Facility and cash on hand (see Note 12 for additional information).
+Added: The acquisition was funded through a combination of borrowings under the Company’s 2018 Term Loan Facility, drawings under the Company’s Revolving Credit Facility and cash on hand.
Versace’s results of operations have been included in our consolidated financial statements beginning on December 31, 2018.
3 unchanged sentences
The net measurement period adjustments increased goodwill by $ 26 million.
−Removed: The following table summarizes the unaudited pro-forma consolidated results of operations for the fiscal years ended March 30, 2019 and March 31, 2018 as if the acquisition had occurred on April 2, 2017, the beginning of Fiscal 2018 (in millions):
−Removed: Fiscal Years Ended
−Removed: March 30, 2019 March 31, 2018
+Added: The following table summarizes the unaudited pro-forma consolidated results of operations for the fiscal year ended March 30, 2019 as if the acquisition had occurred on April 2, 2017, the beginning of Fiscal 2018 (in millions):
+Added: March 30, 2019
Pro-forma total revenue $ 5,983
1 unchanged sentence
Pro-forma net income per ordinary share attributable to Capri:
−Removed: $ 3.82 $ 3.40
−Removed: $ 3.78 $ 3.34
The unaudited pro-forma consolidated results above are based on the historical financial statements of the Company and Versace and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of Fiscal 2018 and are not indicative of the future operating results of the combined company.
3 unchanged sentences
Purchase accounting amortization of the inventory step-up adjustment has been excluded from the above pro-forma amounts due to the short-term nature of this adjustment.
−Removed: The pro-forma consolidated financial statements also reflect the impact of debt repayment and borrowings made to finance the acquisition (see Note 12) and exclude historical interest expenses related to Versace’s € 90 million pre-existing debt.
−Removed: Transaction costs of $ 41 million for Fiscal 2019, which have been recorded within restructuring and other charges in the Company’s consolidated statements of operations and comprehensive income, have been excluded from the above pro-forma consolidated results of operations due to their non-recurring nature.
+Added: The pro-forma consolidated financial statements also reflect the impact of debt repayment and borrowings made to finance the acquisition and exclude historical interest expenses related to Versace’s € 90 million pre-existing debt.
+Added: Transaction costs of $ 41 million for Fiscal 2019, which have been recorded within restructuring and other charges in the Company’s consolidated statements of operations and comprehensive (loss) income, have been excluded from the above pro-forma consolidated results of operations due to their non-recurring nature.
The shares used to calculate the pro-forma net income per ordinary share attributable to Capri reflect the weighted average impact of a 2.4 million ordinary share investment made by the Versace family at acquisition date.
−Removed: Acquisition of Jimmy Choo Group Limited
−Removed: On November 1, 2017, the Company completed the acquisition of Jimmy Choo, whereby the Company's wholly-owned subsidiary acquired all of Jimmy Choo’s issued and to be issued shares at a purchase price of 230 pence per share in cash, for a total transaction value of $ 1.447 billion, including the repayment of existing debt obligations, which was funded through a combination of borrowings under the Company’s new $ 1.0 billion term loan facility, the issuance of the Senior Notes and cash on hand (please refer to Note 12 for additional information).
−Removed: Jimmy Choo’s results of operations have been included in our consolidated financial statements beginning on November 1, 2017.
−Removed: Jimmy Choo contributed revenue of $ 223 million and net loss of $ 15 million (after amortization of non-cash purchase accounting adjustments and transition and transaction costs) for the period from the date of acquisition through March 31, 2018.
−Removed: The following table summarizes the unaudited pro-forma consolidated results of operations for the fiscal years ended March 31, 2018 and April 1, 2017 as if the acquisition had occurred on April 3, 2016, the beginning of Fiscal 2017 (in millions):
−Removed: Fiscal Years Ended
−Removed: March 31, 2018 April 1, 2017
−Removed: Pro-forma total revenue $ 5,012 $ 4,985
−Removed: Pro-forma net income 623 554
−Removed: Pro-forma net income per ordinary share attributable to Capri:
−Removed: $ 4.09 $ 3.34
−Removed: $ 4.02 $ 3.29
−Removed: The unaudited pro-forma consolidated results above are based on the historical financial statements of the Company and Jimmy Choo and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of Fiscal 2017 and are not indicative of the future operating results of the combined company.
−Removed: The financial information for Jimmy Choo prior to the acquisition has been included in the pro-forma results of operations on a calendar-year basis and includes certain adjustments to Jimmy Choo’s historical consolidated financial statements to align with U.S.
−Removed: GAAP and the Company’s accounting policies.
−Removed: The pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the definite-lived intangible assets acquired, fair value adjustments relating to leases and property and equipment, and the related tax effects assuming that the business combination occurred on April 3, 2016.
−Removed: Purchase accounting amortization of the inventory step-up adjustment has been excluded from the above pro-forma amounts due to the short-term nature of this adjustment.
−Removed: The pro-forma consolidated financial statement also reflect the impact of debt repayment and borrowings made to finance the acquisition (see Note 12) and exclude historical interest expense for Jimmy Choo.
−Removed: Transaction costs of $ 41 million for Fiscal 2018, which have been recorded within restructuring and other charges in the Company’s consolidated statements of operations and comprehensive income, have been excluded from the above pro-forma consolidated results of operations due to their non-recurring nature.
Receivables, net
5 unchanged sentences
(1) As of March 27, 2021 and March 28, 2020, $ 81 million and $ 80 million, respectively, of trade receivables were insured.
−Removed: Receivables are presented net of allowances for discounts, markdowns, operational chargebacks and doubtful accounts.
+Added: Receivables are presented net of allowances for discounts, markdowns, operational chargebacks and credit losses.
Discounts are based on open invoices where trade discounts have been extended to customers.
2 unchanged sentences
Such provisions, and related recoveries, are reflected in revenues.
−Removed: The Company’s allowance for doubtful accounts is determined through analysis of periodic aging of receivables that are not covered by insurance and assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers and the impact of general economic conditions.
+Added: The Company’s allowance for credit losses is determined through analysis of periodic aging of receivables and assessments of collectability based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers and the impact of general economic conditions.
The past due status of a receivable is based on its contractual terms.
Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered.
−Removed: Allowance for doubtful accounts was $ 39 million as of March 28, 2020, including the impact related to COVID-19.
−Removed: Allowance for doubtful accounts was $ 18 million as of March 30, 2019, which included an $ 11 million allowance within the opening balance sheet of the newly acquired Versace business.
−Removed: The Company had bad debt expense of $ 29 million, $ 4 million and $ 8 million, respectively, for Fiscal 2020, Fiscal 2019 and Fiscal 2018.
+Added: Allowance for credit losses was $ 25 million and $ 39 million as of March 27, 2021 and March 28, 2020, respectively, including the impact related to COVID-19.
+Added: The Company had credit loss of $( 3 ) million, $ 29 million and $ 4 million, respectively, for Fiscal 2021, Fiscal 2020 and Fiscal 2019.
Concentration of Credit Risk, Major Customers and Suppliers
15 unchanged sentences
Leasehold improvements $ 737 $ 704
−Removed: In-store shops 236 270
−Removed: Furniture and fixtures 329 292
Computer equipment and software 359 329
+Added: Furniture and fixtures 350 329
Equipment 139 136
+Added: In-store shops (1)
Building 51 49
accumulated depreciation and amortization (1)
+Added: ( 1,271 ) ( 1,310 )
Construction-in-progress 47 69
−Removed: Depreciation and amortization of property and equipment for the fiscal years ended March 28, 2020, March 30, 2019, and March 31, 2018 was $ 200 million, $ 188 million and $ 182 million, respectively.
−Removed: During Fiscal 2020, the Company recorded property and equipment impairment charges of $ 77 million, $ 66 million of which related to the Company's retail store locations and $ 11 million of which related to determining asset groups for the Company’s premier store locations at an individual store level.
+Added: (1) The Company wrote off $ 179 million of fully depreciated assets which were no longer in service from in-store shops and related accumulated depreciation during the fiscal year ended March 27, 2021.
+Added: Depreciation and amortization of property and equipment for the fiscal years ended March 27, 2021, March 28, 2020, and March 30, 2019 totaled $ 165 million, $ 200 million and $ 188 million, respectively.
+Added: During Fiscal 2021, Fiscal 2020 and Fiscal 2019, the Company recorded property and equipment impairment charges of $ 23 million, $ 77 million and $ 19 million, respectively, primarily related to the Company's retail store locations.
See Note 14 for additional information.
−Removed: During Fiscal 2019 and Fiscal 2018, the Company recorded property and equipment impairment charges of $ 19 million and $ 28 million, respectively, primarily related to underperforming Michael Kors retail locations.
Intangible Assets and Goodwill
8 unchanged sentences
Trademarks 23 21 2 23 20 3
−Removed: Lease rights (1)
−Removed: — — — 96 56 40
Customer relationships 437 86 351 404 51 353
7 unchanged sentences
Total intangible assets, excluding goodwill $ 2,425 $ 433 $ 1,992 $ 2,298 $ 312 $ 1,986
−Removed: $ 2,298 $ 312 $ 1,986 $ 2,436 $ 143 $ 2,293
−Removed: ________________________________
−Removed: (1) The March 30, 2019 balance includes certain lease rights that were reclassified to the operating lease right-of-use asset as part of the adoption of ASU 2016-02 in Fiscal 2020.
−Removed: Includes $ 2 million and $ 5 million, respectively, of impairment charges recorded during Fiscal 2019 and Fiscal 2018, primarily in connection with underperforming full-price Michael Kors retail stores.
−Removed: See Note 14 for additional information.
−Removed: (2) The year-over-year change in carrying value reflects an impairment charge of $ 180 million and foreign currency translation of $ 25 million.
−Removed: The Company did no t incur any impairment charges in prior periods.
−Removed: (3) The year-over-year change in carrying value relates to foreign currency translation.
+Added: (1) The year-over-year change in carrying value reflects an impairment charge of $ 69 million and foreign currency translation of $ 40 million for the fiscal year ended March 27, 2021.
+Added: The Company recorded an impairment charge of $ 180 million for the fiscal year ended March 28, 2020.
+Added: (2) The year-over-year change in value relates to foreign currency translation.
Reacquired rights relate to the Company’s reacquisition of the rights to use the Michael Kors trademarks and to import, sell, advertise and promote certain of its products in the previously licensed territories in the Greater China region and are being amortized through March 31, 2041, the expiration date of the related license agreement.
The trademarks relate to the Michael Kors brand name and are amortized over twenty years .
−Removed: Customer relationships are amortized over five to eighteen years .
−Removed: Key money is amortized over the respective terms of the underlying lease, including highly probable renewal periods.
+Added: Customer relationships are generally amortized over five to eighteen years .
Amortization expense for the Company’s definite-lived intangibles was $ 47 million, $ 49 million and $ 37 million, respectively, for each of the fiscal years ended March 27, 2021, March 28, 2020 and March 30, 2019.
9 unchanged sentences
The following table details the changes in goodwill for each of the Company’s reportable segments (in millions):
−Removed: Versace Jimmy Choo Michael
−Removed: Balance at March 31, 2018 $ — $ 728 $ 120 $ 848
−Removed: Acquisition of Versace (1)
−Removed: Foreign currency translation
−Removed: ( 17 ) ( 50 ) — ( 67 )
+Added: Versace Jimmy Choo Michael Kors Total
Balance at March 30, 2019 861 678 120 $ 1,659
6 unchanged sentences
Balance at March 28, 2020 881 487 120 1,488
+Added: Impairment charges (2)
+Added: — ( 94 ) — ( 94 )
+Added: Foreign currency translation
+Added: Balance at March 27, 2021 $ 933 $ 445 $ 120 $ 1,498
(1) See Note 5 for additional information.
−Removed: (2) The Company recorded impairment charges of $ 171 million related to the Jimmy Choo retail and licensing reporting units.
−Removed: The Company did no t incur any goodwill impairment charges in prior periods.
+Added: (2) The Company recorded impairment charges during Fiscal 2021 of $ 94 million related to the Jimmy Choo wholesale and licensing reporting units, and $ 171 million during Fiscal 2020 related to the Jimmy Choo retail and licensing reporting units.
The Company’s goodwill and the Versace and Jimmy Choo brands are not subject to amortization but are evaluated for impairment annually in the last quarter of each fiscal year, or whenever impairment indicators exist.
1 unchanged sentence
The Company performed its goodwill impairment assessment for its Michael Kors segment using a qualitative assessment.
−Removed: As a result of realigning its segment reporting structure during the fourth quarter of Fiscal 2019, the Company presented the carrying amount of goodwill for the Michael Kors Retail, Michael Kors Wholesale and Michael Kors Licensing reporting units within the Michael Kors reportable segment.
Based on the results of the Company’s qualitative impairment assessment, the Company concluded that it is more likely than not that the fair value of the Michael Kors’ reporting units exceeded their carrying value and, therefore, were not impaired.
−Removed: The Company performed its annual goodwill and indefinite-lived intangible asset impairment analysis for both the Versace and Jimmy Choo reporting units using a quantitative approach, using a discounted cash flow analysis to estimate the fair values of the each brands' reporting units.
−Removed: Based on the results of these assessments, the Company concluded that the fair values of the Jimmy Choo retail and licensing reporting units and the Jimmy Choo brand indefinite-lived intangible asset did not exceed the related carrying amounts.
−Removed: Jimmy Choo expects to experience a reduction in profitability trends, primarily related to the ongoing impact of the COVID-19 pandemic, resulting in declines in sales driven by the full and partial closures of a significant portion of our stores globally.
−Removed: The Company also concluded that the fair values of the Versace reporting units and the Versace brand indefinite-lived intangible asset exceeded the related carrying amounts and there was no impairment recorded.
−Removed: Accordingly, the Company recorded impairment charges of $ 171 million related to the Jimmy Choo retail and licensing reporting units and $ 180 million related to the Jimmy Choo brand intangible asset during Fiscal 2020.
−Removed: The impairment charges were recorded within impairment of assets on the Company's consolidated statement of operations and comprehensive income for the fiscal year ended March 28, 2020.
−Removed: See Note 14 to the accompanying audited financial statements for information relating to its annual impairment analysis performed during the fourth quarter of Fiscal 2020.
+Added: The Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for both the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair value of each brands' reporting units.
+Added: The Company also elected to perform an impairment analysis for both the Versace and Jimmy Choo brand indefinite-lived intangible assets using an income approach to estimate the fair values.
+Added: Based on the results of these assessments, the Company determined there was no impairment loss for the Jimmy Choo Retail reporting unit.
+Added: The Company also concluded that the fair values of the Versace reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.
+Added: However, the Company concluded that the fair value of the Jimmy Choo Wholesale and Jimmy Choo Licensing reporting units, along with the Jimmy Choo brand indefinite-lived intangible assets, did not exceed their related carrying amounts.
+Added: These impairment charges were primarily related to higher discount rates in the current year driven by a change in market factors as well as a shift in expected revenue and earnings mix to the retail segment.
+Added: Accordingly, the Company recorded impairment charges of $ 94 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $ 69 million related to the Jimmy Choo brand intangible assets during Fiscal 2021.
+Added: The Company recorded impairment charges of $ 171 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and $ 180 million related to the Jimmy Choo brand intangible assets during Fiscal 2020.
+Added: The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive (loss) income for the fiscal years ended March 27, 2021 and March 28, 2020.
+Added: The Company did not record any such impairment charges in Fiscal 2019.
+Added: See Note 14 for additional information.
Current Assets and Current Liabilities
2 unchanged sentences
Prepaid taxes $ 133 $ 116
−Removed: Prepaid contracts 17 15
Other accounts receivables 13 10
Interest receivable related to net investment hedges 12 1
−Removed: Prepaid rent — 24
+Added: Prepaid contracts 11 17
Accrued expenses and other current liabilities consist of the following (in millions):
2 unchanged sentences
Return liabilities 46 37
−Removed: Accrued capital expenditures 31 25
−Removed: Gift cards and retail store credits 11 13
Accrued rent (1)
+Added: Charitable donations (2)
+Added: Accrued capital expenditures 17 31
Professional services 13 10
Accrued litigation 12 10
−Removed: Restructuring liability (2)
+Added: Gift and retail store credits 12 11
Accrued advertising and marketing 11 9
Accrued interest 10 8
+Added: Restructuring liability 9 9
Accrued purchases and samples 8 3
(1) The accrued rent balance relates to variable lease payments.
−Removed: (2) In connection with the adoption of ASU 2016-02, certain lease related assets and liabilities were reflected within operating lease right-of-use assets and liabilities as of March 28, 2020.
−Removed: See Note 2 and Note 4 for additional information.
+Added: (2) Relates to a $ 20 million unconditional pledge to The Capri Holdings Foundation for the Advancement of Diversity in Fashion.
Restructuring and Other Charges
−Removed: Michael Kors Retail Fleet Optimization Plan
−Removed: During Fiscal 2020, the Company completed its plan to close between 100 and 150 of its Michael Kors retail stores in order to improve the profitability of its retail store fleet (“Michael Kors Retail Fleet Optimization Plan”).
−Removed: The Company expected approximately $ 100 - $ 125 million of one-time costs associated with these store closures, with total costs in line with its original expectations.
−Removed: Collectively, the Company continues to anticipate ongoing savings as a result of the store closures and lower depreciation expense associated with the impairment charges being recorded.
−Removed: During Fiscal 2020, the Company closed 43 of its Michael Kors retail stores under the Michael Kors Retail Fleet Optimization Plan, for a total of 143 stores closed at a cost of $ 99 million since plan inception.
−Removed: Restructuring charges recorded in connection with the Michael Kors Retail Fleet Optimization Plan during Fiscal 2020 was $ 5 million.
−Removed: The below table presents a rollforward of the Company’s remaining restructuring liability related to this plan (in millions):
+Added: Capri Retail Store Optimization Program
+Added: As previously announced, the Company intends to close approximately 170 of its retail stores over two fiscal years, which began during Fiscal 2021 and will continue into Fiscal 2022, in connection with its Capri Retail Store Optimization Program in order to improve the profitability of its retail store fleet.
+Added: In addition, the Company expects to incur approximately $ 75 million of one-time costs related to this program, including lease termination and other store closure costs, the majority of which are expected to result in future cash expenditures.
+Added: During Fiscal 2021, the Company closed 101 of its retail stores which have been incorporated into the Capri Retail Store Optimization Program.
+Added: Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program during Fiscal 2021 was $ 5 million.
+Added: The below table presents a roll forward of the Company's restructuring liability related to its Capri Retail Store Optimization Program (in millions):
Severance and benefit costs Lease-related and other costs Total
Balance at March 28, 2020 $ — $ — $ —
−Removed: ASC 842 (Leases) Adjustment (1)
−Removed: — ( 46 ) ( 46 )
−Removed: Balance at March 31, 2019 2 7 9
Additions charged to expense (1)
1 unchanged sentence
Balance at March 27, 2021 $ — $ 3 $ 3
−Removed: (1) Consists of the reclassification of sublease liabilities to an offset of the related operating lease right-of-use asset due to the adoption of ASC 842.
−Removed: See Note 2 and Note 4 for further information.
−Removed: During Fiscal 2019, the Company recorded restructuring charges of $ 41 million under the Michael Kors Retail Fleet Optimization Plan, which were comprised of lease-related charges of $ 38 million and severance and benefit costs of $ 3 million.
−Removed: During Fiscal 2018, the Company recorded restructuring charges of $ 53 million under the Michael Kors Retail Fleet Optimization Plan, which were comprised of lease-related charges of $ 52 million and severance and benefit costs of $ 1 million.
+Added: (1) Excludes a net credit of $ 8 million related to lease termination gains of previously impaired operating lease right-of-use assets partially offset by additional impairments for the stores closing under the Company’s Capri Retail Store Optimization Program during Fiscal 2021.
+Added: Michael Kors Retail Fleet Optimization Plan
+Added: During Fiscal 2020, the Company recorded restructuring charges of $ 5 million under the Michael Kors Retail Fleet Optimization Plan, which was completed during the fourth quarter of Fiscal 2020.
Other Restructuring Charges
−Removed: In addition to the restructuring charges related to the Michael Kors Retail Fleet Optimization Plan, the Company incurred charges of $ 3 million primarily consisting of lease-related costs during Fiscal 2020.
−Removed: The Company also incurred charges of $ 4 million relating to Jimmy Choo lease-related charges during Fiscal 2019.
−Removed: During Fiscal 2020, the Company recorded costs of $ 34 million, which included $ 24 million in connection with the Versace acquisition and $ 9 million in connection with the acquisition of Jimmy Choo, and $ 1 million in connection with the acquisition of Gozzi.
−Removed: During Fiscal 2019, the Company recorded costs of $ 79 million, which included $ 52 million in connection with the Versace acquisition and $ 27 million in connection with the Jimmy Choo acquisition.
−Removed: During Fiscal 2018, the Company recorded costs of $ 49 million in connection with the Jimmy Choo acquisition.
−Removed: See Note 5 for additional information relating to these acquisitions.
+Added: In addition to the restructuring charges related to the Capri Retail Store Optimization Plan, the Company incurred charges of $ 8 million primarily relating to closures of corporate locations during Fiscal 2021.
+Added: The Company incurred $ 3 million of restructuring charges related to the Michael Kors Retail Fleet Optimization Plan during Fiscal 2020, primarily consisting of lease-related costs.
+Added: During Fiscal 2021, the Company recorded costs of $ 19 million primarily related to equity awards associated with the acquisition of Versace.
+Added: During Fiscal 2020, the Company recorded costs of $ 34 million, which included $ 24 million in connection with the Versace acquisition, $ 9 million in connection with the acquisition of Jimmy Choo and $ 1 million in connection with the acquisition of Gozzi.
Debt Obligations
2 unchanged sentences
Term Loan $ 870 $ 1,015
−Removed: $ 1,015 $ 1,580
Senior Notes due 2024
−Removed: Revolving Credit Facilities 720 550
+Added: Revolving Credit Facility — 720
Total debt 1,350 2,188
4 unchanged sentences
Total long-term debt $ 1,219 $ 2,012
−Removed: $ 2,012 $ 1,936
−Removed: (1) During Fiscal 2019, the Company repaid the remaining $ 59 million of borrowings outstanding under the previous Term Loan Facility entered into in connection with the Jimmy Choo acquisition.
−Removed: Senior Unsecured Revolving Credit Facility
−Removed: On March 20, 2020, the Company entered into the first amendment (the “First Amendment”) to its third amended and restated senior unsecured credit facility, dated as of November 15, 2018 (the “2018 Credit Facility”), with, among others, JPMorgan Chase Bank, N.A., as administrative agent.
−Removed: The First Amendment amends the 2018 Credit Facility to, among other things, provide for the exchange of approximately $ 267 million (out of $ 315 million) in aggregate principal amount of outstanding term loans due on the second anniversary, for term loans with the existing remaining tranche that matures on the fifth anniversary, resulting in the extension of the maturity of such exchanged loans to the third quarter of Fiscal 2024.
−Removed: The remaining $ 48 million that were not exchanged remain due in the third quarter of Fiscal 2021.
−Removed: In addition, the leverage ratio covenant metric in the 2018 Credit Facility was modified to take into account operating lease liability as defined by ASC 842.
−Removed: The Company and its U.S., Canadian, Dutch and Swiss subsidiaries are the borrowers under the 2018 Credit Facility.
−Removed: The borrowers and certain material subsidiaries of the Company provide unsecured guarantees of the 2018 Credit Facility.
+Added: Senior Secured Revolving Credit Facility
+Added: On June 25, 2020, the Company entered into the second amendment (the “Second Amendment”) to its third amended and restated credit facility, dated as of November 15, 2018 (the “2018 Credit Facility”), with, among others, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”).
+Added: Pursuant to the Second Amendment, the obligations under the 2018 Credit Facility are secured by liens on substantially all of the assets of the Company and its U.S.
+Added: subsidiaries that are borrowers and guarantors, subject to certain exceptions, and substantially all of the registered intellectual property of the Company and its subsidiaries.
+Added: This requirement for collateral will fall away if the Company achieves an investment grade ratings requirement for two consecutive full fiscal quarters.
+Added: The Amendment adds a restriction on the disposition of assets and a requirement to prepay the term loans with certain net cash proceeds of non-ordinary course asset sales, subject to certain exceptions and a reinvestment option with respect to up to $ 100 million of net cash proceeds in the aggregate.
+Added: Pursuant to the Second Amendment, the financial covenant in the Company’s 2018 Credit Facility requiring it to maintain a ratio of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.0 has been waived through the fiscal quarter ending June 26, 2021.
+Added: The Company terminated the waiver period effective May 26, 2021.
+Added: Effective as of that date, the applicable ratio will be calculated net of the Company’s unrestricted cash and cash equivalents in excess of $ 100 million and shall exclude up to $ 150 million of supply chain financings, and the maximum permitted net leverage ratio will be 4.00 to 1.0.
+Added: In addition, until March 31, 2021, the material adverse change representation required to be made in connection with revolving borrowings and the issuance or amendment of letters of credit will be modified to disregard certain COVID-19 pandemic-related impacts to the business, results of operations or financial condition of the Company and its subsidiaries, taken as a whole.
+Added: The Second Amendment also requires the Company, during the period from June 25, 2020 until it delivers its financial statements with respect to the fiscal quarter ending June 26, 2021, to maintain at all times unrestricted cash and cash equivalents plus the aggregate undrawn amounts under the revolving facilities under the 2018 Credit Facility of not less than $ 300 million, increasing to $ 400 million on October 1, 2020 and $ 500 million on December 1, 2020.
+Added: The 2018 Credit Facility and the Indenture governing the Company's senior notes contain certain restrictive covenants that impose operating and financial restrictions on the Company, and the Second Amendment imposes incremental restrictions on certain of these covenants during the covenant relief period provided under the 2018 Credit Facility, including restrictions on its ability to incur additional indebtedness and guarantee indebtedness, pay dividends or make other distributions or repurchase or redeem capital stock, make loans and investments, including acquisitions, sell assets, incur liens, enter into transactions with affiliates and consolidate, merge or sell all or substantially all of its assets.
The 2018 Credit Facility provides for a $ 1 billion revolving credit facility (the "Revolving Credit Facility"), which may be denominated in U.S.
dollars and other currencies, including Euros, Canadian Dollars, Pounds Sterling, Japanese Yen and Swiss Francs.
−Removed: The Revolving Credit Facility also provides sub-facilities for the issuance of letters of credit of up to $ 75 million and swing line loans of up to $ 75 million.
−Removed: The 2018 Credit Facility also provides for a $ 1.6 billion term loan facility (the “2018 Term Loan Facility”) to finance a portion of the purchase price of the Company’s acquisition of Versace.
−Removed: The 2018 Term Loan Facility is divided into two tranches that now mature on the fifth anniversary of the initial borrowing of the term loans, except for the remaining $ 48 million that were not exchanged, and are required to be repaid on the last business day of March, June, September and December of each year, commencing after the last business day of the first full fiscal quarter after the initial borrowing, in installments equal to 2.50 % of the aggregate original principal amount of the term loans.
−Removed: The Company has the right to prepay its borrowings under the 2018 Term Loan Facility at any time in whole or in part.
−Removed: The Revolving Credit Facility expires on November 15, 2023.
−Removed: The Company has the ability to expand its borrowing availability under the 2018 Credit Facility in the form of revolving commitments or term loans by up to an additional $ 500 million, subject to the agreement of the participating lenders and certain other customary conditions.
+Added: The Revolving Credit Facility also provides sub-facilities for the issuance of letters of credit of up to $ 75 million and swing loans of up to $ 75 million.
+Added: The 2018 Credit Facility also provides for a $ 1.6 billion term loan facility (the "2018 Term Loan Facility").
+Added: The 2018 Term Loan Facility is divided into two tranches, with the second tranche maturing in December 2023, which requires a quarterly payment of $ 24 million.
+Added: As of March 27, 2021, the Company has fully paid off Tranche 1 of the 2018 Term Loan Facility.
+Added: In addition, the Second Amendment adds a new $ 230 million revolving line of credit that matures on June 24, 2021 (the “ 364 Day Facility”).
+Added: The terms of the 364 Day Facility are substantially similar to the terms of the existing revolving facility under the 2018 Credit Facility except that (i) no letters of credit or swingline loans are provided and (ii) for loans subject to Adjusted LIBOR, the applicable margin is 225 basis points per annum, for loans subject to the base rate the applicable margin is 125 basis points per annum and the commitment fee is 35 basis points per annum.
+Added: In addition, while the 364 Day Facility is outstanding, (i) if the Company incurs any incremental indebtedness under the 2018 Credit Facility or certain permitted indebtedness in lieu of such incremental indebtedness, the 364 Day Facility will be reduced on a dollar for dollar basis and the Company will be required to make corresponding prepayments and (ii) the Company will be required to prepay amounts outstanding under the 364 Day Facility on a weekly basis to the extent that cash and cash equivalents of the Company and its subsidiaries exceed $ 200 million.
+Added: The Second Amendment also permits certain working capital facilities between the Company or any of its subsidiaries with a lender or an affiliate of a lender under the 2018 Credit Facility to be guaranteed under the 2018 Credit Facility guarantees and certain supply chain financings with, and up to $ 50 million outstanding principal amount of bilateral letters of credit and bilateral bank guarantees issued by a lender or an affiliate of a lender to be guaranteed and secured under the 2018 Credit Facility guarantees and collateral documents.
Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at the following rates:
10 unchanged sentences
Loans under the 2018 Credit Facility may be repaid and commitments may be terminated or reduced by the borrowers without premium or penalty other than the customary breakage costs with respect to loans bearing interest based on Adjusted LIBOR or the CDOR rate.
−Removed: As of the last day of Fiscal 2020, the 2018 Credit Facility required the Company to maintain a leverage ratio as of the end of each fiscal quarter of no greater than 3.75 to 1.
+Added: As of the last day of Fiscal 2021, the 2018 Credit Facility requirement of the Company to maintain a leverage ratio as of the end of each fiscal quarter of no greater than 3.75 to 1 has been waived through the fiscal quarter ending June 26, 2021.
Such leverage ratio is calculated based on the ratio of consolidated total indebtedness plus the capitalized amount of all operating lease liabilities presented on our consolidated balance sheets to Consolidated EBITDAR (as defined below) for the last four consecutive fiscal quarters.
2 unchanged sentences
See Note 22 for additional information.
−Removed: As of March 28, 2020 and the date these financial statements were issued, the Company was in compliance with all covenants related to this agreement.
+Added: As of March 27, 2021 and the date these financial statements were issued, the Company was in compliance with
+Added: all covenants related to this agreement, which was calculated based on the unrestricted cash and cash equivalents plus the aggregate undrawn amounts of no less than $ 500 million under the 2018 Credit Facility.
The 2018 Credit Facility contains events of default customary for financings of this type, including, but not limited to, payment of defaults, material inaccuracy of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy or insolvency, certain events under The Employee Retirement Income Security Act, material judgments, actual or asserted failure of any guaranty supporting the 2018 Credit Facility to be in full force and effect, and changes of control.
If such an event of default occurs, the lenders under the 2018 Credit Facility would be entitled to take various actions, including, but not limited to, terminating the commitments and accelerating amounts outstanding under the 2018 Credit Facility, subject to “certain funds” limitations in connection with the transaction governing the 2018 Term Loan Facility.
−Removed: In connection with the acquisition of Versace, on December 21, 2018 the Company borrowed $ 1.6 billion in term loans under the 2018 Term Loan Facility and $ 350 million under its $ 1.0 billion Revolving Credit Facility provided for under the 2018 Credit Facility, to pay a portion of the acquisition consideration and other related fees and expenses.
−Removed: As of March 28, 2020 and March 30, 2019, the Company had borrowings of $ 681 million and $ 539 million outstanding under the 2018 Revolving Credit Facility, respectively, which were recorded within long-term and short-term debt in its consolidated balance sheets.
−Removed: In addition, stand-by letters of credit of $ 18 million were outstanding as of March 28, 2020.
−Removed: At March 28, 2020, the amount available for future borrowings under the 2018 Revolving Credit Facility was $ 301 million.
−Removed: As of March 28, 2020, the carrying value of borrowings outstanding under the 2018 Term Loan Facility was $ 1.010 billion, net of debt issuance costs of $ 5 million, of which $ 128 million was recorded within short-term debt and $ 882 million was recorded within long-term debt in its consolidated balance sheets.
+Added: As of March 27, 2021, the Company had no borrowings outstanding under the Revolving Credit Facility as a result of repaying the remaining borrowings.
+Added: As of March 28, 2020, the Company had $ 681 million borrowings outstanding under the Revolving Credit Facility, which were recorded within long-term debt in its consolidated balance sheets.
+Added: In addition, stand-by letters of credit of $ 27 million and $ 18 million were outstanding as of March 27, 2021 and March 28, 2020, respectively.
+Added: At March 27, 2021, the amount available for future borrowings under the Revolving Credit Facility and the 364 Day facility were $ 973 million and $ 230 million, respectively.
+Added: As of March 27, 2021, the carrying values of borrowings outstanding under the 2018 Term Loan Facility were $ 865 million, net of debt issuance costs of $ 5 million, $ 97 million of which was recorded within short-term debt while $ 768 million was recorded within long-term debt in the Company's consolidated balance sheets.
+Added: As of March 28, 2020, the carrying values of borrowings outstanding under the 2018 Term Loan Facility were $ 1.010 billion, net of debt issuance costs of $ 5 million, $ 128 million of which was recorded within short-term debt while $ 882 million was recorded within long-term debt in the Company's consolidated balance sheets.
On October 20, 2017, Michael Kors (USA), Inc.
3 unchanged sentences
The Senior Notes were issued to finance a portion of the Company’s acquisition of Jimmy Choo and certain related refinancing transactions.
−Removed: The Senior Notes bear interest at a rate of 4.000 % per year, subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency therefore) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes.
+Added: As of March 27, 2021, the Senior Notes bear interest at a rate of 4.500 % per year, subject to adjustments from time to time if either Moody’s or S&P (or a substitute rating agency therefore) downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Senior Notes.
Interest on the Senior Notes is payable semi-annually on May 1 and November 1 of each year, beginning on May 1, 2018.
5 unchanged sentences
These covenants are subject to important limitations and exceptions, as per the Indenture.
−Removed: As of March 28, 2020 and March 30, 2019, the carrying value of the Senior Notes was $ 446 million and $ 445 million, respectively, net of issuance costs and unamortized discount.
+Added: As of March 27, 2021 and March 28, 2020, the carrying value of the Senior Notes was $ 447 million and $ 446 million, respectively, net of issuance costs and unamortized discount, which were recorded within long-term debt in the Company's consolidated balance sheets.
+Added: Supplier Financing Program
+Added: During the third quarter of Fiscal 2021, the Company began offering a supplier financing program to certain suppliers as the Company continues to identify opportunities to improve liquidity.
+Added: This program enables suppliers, at their sole discretion, to sell their receivables (i.e., the Company’s payment obligations to suppliers) to a financial institution on a non-recourse basis in order to be paid earlier than current payment terms provide.
+Added: The Company’s obligations, including the amount due and scheduled payment dates, are not impacted by a suppliers’ decision to participate in this program.
+Added: The Company does not reimburse suppliers for any costs they incur to participate in the program and their participation is voluntary.
+Added: The amount outstanding under this program as of March 27, 2021 was $ 17 million and is presented as short-term debt in the Company’s consolidated balance sheets.
Japan Credit Facility
−Removed: In November 2017, the Company’s subsidiary in Japan entered into a short term credit facility (“Japan Credit Facility”) with Mitsubishi UFJ Financial Group (“MUFJ”), which may be used to fund general working capital needs of Michael Kors Japan K.K., subject to the bank’s discretion.
+Added: In Fiscal 2021, the Company’s subsidiary in Japan renewed a short term credit facility (“Japan Credit Facility”) with Mitsubishi UFJ Financial Group (“MUFJ”), which may be used to fund general working capital needs of Michael Kors Japan K.K., subject to the bank’s discretion.
The Japan Credit Facility is in effect through November 30, 2021.
2 unchanged sentences
The Japan Credit Facility bears interest at a rate posted by the Bank plus 0.300 % two business days prior to the date of borrowing or the date of interest renewal.
−Removed: As of March 28, 2020 and March 30, 2019, the Company had no borrowings outstanding under the Japan Credit Facility.
+Added: As of March 27, 2021 the Company had $ 9 million borrowings outstanding under the Japan Credit Facility and no borrowings outstanding as of March 28, 2020, which were recorded within short-term debt in the Company's consolidated balance sheets.
Hong Kong Credit Facility
−Removed: In May 2020, the Company’s Hong Kong subsidiary, MKHKL, renewed its uncommitted credit facility (“HK Credit Facility”) with HSBC, which may be used to fund general working capital needs of MKHKL through April 30, 2021 subject to the bank’s discretion.
+Added: In May 2020, the Company’s Hong Kong subsidiary, MKHKL, renewed its uncommitted credit facility (“HK Credit Facility”) with HSBC, which may be used to fund general working capital needs of MKHKL through September 30, 2021 subject to the bank’s discretion.
The HK Credit Facility provides MKHKL with a revolving line of credit of up to 100 million Hong Kong Dollars (approximately $ 13 million), and may be used to support bank guarantees.
Borrowings under the HK Credit Facility must be made in increments of at least 5 million Hong Kong Dollars and bear interest at the Hong Kong Interbank Offered Rate (“HIBOR”) plus 150 basis points.
−Removed: As of March 28, 2020 and March 30, 2019, there were no borrowings outstanding under the HK Credit Facility.
−Removed: As of March 28, 2020, bank guarantees supported by this facility were 4 million Hong Kong Dollars (approximately $ 1 million).
+Added: As of March 27, 2021 and March 28, 2020, there were no borrowings outstanding under the HK Credit Fac ility.
+Added: As of March 27, 2021, bank guarantees supported by this facility were 3 million Hong Kong Dollars (less than $ 1 million).
At March 27, 2021, the amount available for future borrowings under the HK Credit Facility was 97 million Hong Kong Dollars (approximately $ 13 million).
1 unchanged sentence
In January 2019, the Company’s subsidiary in China, MKTSCL, entered into a short-term credit facility (“China Credit Facility”) with HSBC, which may be used to fund general working capital needs, not to exceed 12 months.
−Removed: The China Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 70 million (approximately $ 10 million);
−Removed: an overdraft facility with a credit line of RMB 10 million (approximately $ 1 million), and a non-financial bank guarantee facility of RMB 20 million (approximately $ 3 million) or its equivalent in another currency, at lender’s discretion.
+Added: The China Credit Facility is in effect through December 31, 2021.
+Added: The China Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 70 million (approximately $ 11 million), an overdraft facility with a credit line of RMB 10 million (approximately $ 1 million) and a non-financial bank guarantee facility of RMB 20 million (approximately $ 3 million) or its equivalent in another currency, at lender’s discretion.
Borrowings under the China Credit Facility bear interest at 105 % of the applicable People’s Bank of China’s Benchmark lending rate at the time of borrowing.
−Removed: As of March 28, 2020, the Company had no borrowings outstanding under the China Credit Facility.
+Added: As of March 27, 2021 and March 28, 2020, the Company had no borrowings outstanding under the China Credit Facility.
Versace Credit Facilities
1 unchanged sentence
The Versace Credit Facilities provide Versace with a swing line of credit of up to € 32 million (approximately $ 38 million), with interest set by the bank on the date of borrowing.
−Removed: As of March 28, 2020, there were borrowings outstanding of € 25 million (approximately $ 28 million), which were recorded within short-term debt in the Company’s consolidated balance sheet.
−Removed: In January 2018, Versace entered into an uncommitted short-term credit facility with BNL (“Versace Credit Facility”), which may be used for general working capital needs of Versace.
+Added: As of March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility.
+Added: As of March 28, 2020, there were borrowings outstanding of € 25 million (approximately $ 28 million), which were recorded within short-term debt in the Company's consolidated balance sheets.
+Added: In November 2018, Versace entered into an overdraft facility ("Versace Overdraft Facility"), which may be used for general working capital needs of Versace.
+Added: The overdraft facility provides Versace with a line of credit of up to € 5 million (approximately $ 6 million).
+Added: As of March 27, 2021 and March 28, 2020, there were no borrowings outstanding under the Versace Overdraft Facility.
+Added: In January 2018, Versace entered into an uncommitted short-term credit facility (“Versace Credit Facility”), which may be used for general working capital needs of Versace.
The Versace Credit Facility provides Versace with a swing line of credit of up to € 20 million (approximately $ 24 million), with interest set by the bank on the date of borrowing.
−Removed: As of March 28, 2020, there were borrowings outstanding of € 10 million (approximately $ 11 million), which were recorded within short-term debt in the Company’s consolidated balance sheet.
+Added: As of March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility.
+Added: As of March 28, 2020, there were borrowings outstanding of € 10 million (approximately $ 11 million), which were recorded within short-term debt in the Company's consolidated balance sheets.
Commitments and Contingencies
−Removed: The Company has issued stand-by letters of credit to guarantee certain of its retail and corporate operating lease commitments, aggregating $ 24 million at March 28, 2020, including $ 18 million in letters of credit issued under the 2018 Credit Facility.
+Added: The Company has issued stand-by letters of credit to guarantee certain of its retail and corporate operating lease commitments, aggregating $ 33 million at March 27, 2021, including $ 27 million in letters of credit issued under the Revolving Credit Facility.
Other Commitments
−Removed: As of March 28, 2020, the Company also has other contractual commitments aggregating $ 2.830 billion, which consist of inventory purchase commitments of $ 570 million, debt obligations of $ 2.179 billion and other contractual obligations of $ 81 million, which primarily relate to obligations related to the Company’s marketing and advertising agreements, information technology agreements and supply agreements.
+Added: As of March 27, 2021, the Company also has other contractual commitments aggregating $ 2.108 billion, which consist of inventory purchase commitments of $ 688 million, debt obligations of $ 1.350 billion and other contractual obligations of $ 70 million, which primarily relate to the Company’s marketing and advertising obligations, information technology agreements and supply agreements.
Long-term Employment Contract
4 unchanged sentences
In the ordinary course of business, the Company is party to various legal proceedings and claims.
−Removed: Although the outcome of such items cannot be determined with certainty, the Company’s management does not believe that the outcome of all pending legal proceedings in the aggregate will have a material adverse effect on its cash flow, results of operations or financial position.
+Added: Although the outcome of such items cannot be determined with certainty, the Company does not believe that the outcome of all pending legal proceedings in the aggregate will have a material adverse effect on its cash flow, results of operations or financial position.
Fair Value Measurements
1 unchanged sentence
The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in the valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable).
−Removed: Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources.
−Removed: Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances.
+Added: Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources.
+Added: Unobservable inputs are inputs based on a company’s own assumptions about market participant assumptions based on the best information available in the circumstances.
The hierarchy is broken down into three levels based on the reliability of inputs as follows:
2 unchanged sentences
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
−Removed: At March 28, 2020 and March 30, 2019, the fair values of the Company’s forward foreign currency exchange contracts and net investment hedges were determined using broker quotations, which were calculations derived from observable market information:
+Added: At March 27, 2021 and March 28, 2020, the fair values of the Company’s forward foreign currency exchange contracts, interest rate swaps and net investment hedges were determined using broker quotations, which were calculations derived from observable market information:
the applicable currency rates at the balance sheet date and those forward rates particular to the contract at inception.
1 unchanged sentence
The fair values of the forward contracts are included in prepaid expenses and other current assets, and in accrued expenses and other current liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities to the Company.
−Removed: The fair values of net investment hedges are included in other assets, as detailed in Note 15.
+Added: The fair values of net investment hedges and interest rate swaps are included in other assets, and in other long-term liabilities in the consolidated balance sheets, depending on whether they represent assets or liabilities of the Company.
+Added: See Note 15 for detail.
All contracts are measured and recorded at fair value on a recurring basis and are categorized in Level 2 of the fair value hierarchy, as shown in the following table (in millions):
12 unchanged sentences
Derivative liabilities:
−Removed: Other undesignated derivative contracts
−Removed: $ — $ — $ — $ — $ 5 $ —
+Added: Forward foreign currency exchange contracts $ — $ 1 $ — $ — $ — $ —
+Added: Net investment hedges — 263 — — — —
+Added: Designated interest rate swaps — 1 — — — —
+Added: Total derivative liabilities $ — $ 265 $ — $ — $ — $ —
The Company’s long-term debt obligations are recorded in its consolidated balance sheets at carrying values, which may differ from the related fair values.
The fair value of the Company’s long-term debt is estimated using external pricing data, including any available quoted market prices and based on other debt instruments with similar characteristics.
−Removed: See Note 12 for detailed information relating to carrying values of the Company’s outstanding debt.
+Added: Borrowings under revolving credit agreements, if outstanding, are recorded at carrying value, which approximates fair value due to the frequent nature of such borrowings and repayments.
+Added: See Note 12 for detailed information related to carrying values of the Company’s outstanding debt.
The following table summarizes the carrying values and estimated fair values of the Company’s short- and long-term debt, based on Level 2 measurements (in millions):
2 unchanged sentences
Fair Value Carrying Value Estimated
−Removed: 4.000 % Senior Notes
−Removed: $ 446 $ 443 $ 445 $ 438
+Added: Senior Notes due 2024 $ 447 $ 470 $ 446 $ 443
Term Loan $ 865 $ 866 $ 1,010 $ 957
10 unchanged sentences
$ 326 $ 191 $ 135
+Added: Goodwill 319 225 94
+Added: Brands 407 338 69
Property and Equipment
Total $ 1,082 $ 761 $ 321
+Added: Operating Lease Right-of-Use Assets $ 717 $ 437 $ 280
+Added: Brands 547 367 180
+Added: Goodwill 474 303 171
Property and Equipment 105 28 77
−Removed: $ 26 $ 7 $ 19
Total $ 1,843 $ 1,135 $ 708
Property and Equipment
−Removed: $ 31 $ 3 $ 28
−Removed: Customer relationships
Total $ 29 $ 8 $ 21
−Removed: Please refer to Note 8 and Note 9 for additional information.
+Added: (1) Includes $ 5 million of impairment charges that were recorded within restructuring and other charges related to the Capri Retail Store Optimization Program during the Fiscal 2021.
In addition to the impairment charges above, the Company recorded an adjustment to reduce its March 31, 2019 opening balance of retained earnings by $ 152 million, net of tax, reflecting impairments of operating lease right-of-use assets for certain underperforming real estate locations for which the carrying value of the opening operating lease right-of-use asset exceeded its related fair value.
1 unchanged sentence
See Note 2 and Note 4 for additional information.
−Removed: There were no impairment charges related to goodwill or indefinite-lived intangible assets in Fiscal 2019 and Fiscal 2018.
+Added: There were no impairment charges related to goodwill or indefinite-lived intangible assets in Fiscal 2019.
Derivative Financial Instruments
5 unchanged sentences
On September 24, 2018, in connection with the acquisition of Versace, the Company entered into forward foreign currency exchange contracts with a total notional amount of € 1.680 billion (approximately $ 2.001 billion) to mitigate its foreign currency exchange risk through the expected closing date of the acquisition.
−Removed: These derivative contracts were not designated as accounting hedges and were settled on December 21, 2018 as a result of the debt issued in connection with the acquisition of Versace (see Note 12 for further information).
−Removed: Changes in fair value were recorded to foreign currency (gain) loss in the Company’s consolidated statement of operations and comprehensive income for Fiscal 2019.
−Removed: On July 25, 2017, in connection with the acquisition of Jimmy Choo, which closed on November 1, 2017, the Company entered into a forward foreign currency exchange contract with a notional amount of £ 1.115 billion (approximately $ 1.469 billion) to mitigate its foreign currency exchange risk through the date of the acquisition.
−Removed: This derivative contract was not designated as an accounting hedge and was settled on October 30, 2017.
−Removed: Changes in fair value were recorded to foreign currency (gain) loss in the Company’s consolidated statement of operations and comprehensive income for the Fiscal 2018.
+Added: This derivative contract was not designated as an accounting hedge and was settled on December 21, 2018 as a result of the debt issued in connection with the acquisition of Versace (see Note 12 for further information).
+Added: Changes in fair value were recorded to foreign currency (gain) loss in the Company’s consolidated statement of operations and comprehensive (loss) income for Fiscal 2019.
Net Investment Hedges
−Removed: As of March 28, 2020, the Company had one fixed-to-fixed cross-currency swap agreement with a notional amount of $ 44 million to hedge its net investment in Japanese Yen-denominated subsidiaries against future volatility in the exchange rate between the U.S.
−Removed: Dollar and the Japanese Yen.
−Removed: Under the term of this contract, which has a maturity date of November 2024, the Company will exchange the semi-annual fixed rate payments on U.S.
−Removed: denominated debt for fixed rate payments of 0.89 % in Japanese Yen.
−Removed: This contract has been designated as a net investment hedge.
+Added: As of March 27, 2021, the Company had multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 3 billion to hedge its net investment in Euro-denominated subsidiaries and $ 194 million to hedge its net investment in Japanese Yen-denominated subsidiaries against future volatility in the exchange rates between the U.S.
+Added: Dollar and these currencies.
+Added: Under the term of these contracts, the Company will exchange the semi-annual fixed rate payments on U.S.
+Added: denominated debt for fixed rate payments of 0 % to 4.508 % in Euros and 0 % to 3.588 % in Japanese Yen.
+Added: Certain of these contracts include mandatory early termination dates between November 2022 and February 2026, while the remaining contracts have maturity dates between July 2022 and August 2027.
+Added: These contracts have been designated as net investment hedges
During the fourth quarter of Fiscal 2020, the Company terminated all of its net investment hedges related to its Euro-denominated subsidiaries.
The early termination of these hedges resulted in the Company receiving $ 296 million in cash during the fourth quarter of Fiscal 2020.
−Removed: This resulted in a pre-tax gain of $ 211 million being recognized in OCI during the fourth quarter of Fiscal 2020.
−Removed: When a cross-currency swap is used as a hedging instrument in a net investment hedge assessed under the spot method, the cross-currency basis spread is excluded from the assessment of hedge effectiveness and is recognized as a reduction in interest expense in the Company’s consolidated statements of operations and comprehensive income.
−Removed: Accordingly, the Company recorded a reduction in interest expense of $ 71 million and $ 17 million, respectively, during Fiscal 2020 and Fiscal 2019.
+Added: This resulted in a pre-tax gain of $ 211 million being recognized in other comprehensive income (loss) ("OCI") during the fourth quarter of Fiscal 2020.
+Added: When a cross-currency swap is used as a hedging instrument in a net investment hedge assessed under the spot method, the cross-currency basis spread is excluded from the assessment of hedge effectiveness and is recognized as a reduction in interest expense in the Company’s consolidated statements of operations and comprehensive (loss) income.
+Added: Accordingly, the Company recorded a reduction in interest expense of $ 16 million, $ 71 million and $ 17 million, respectively, during Fiscal 2021, Fiscal 2020 and Fiscal 2019.
+Added: Interest Rate Swap
+Added: As of March 27, 2021, the Company had an interest rate swap with an initial notional amount of $ 500 million that will decrease to $ 350 million in April 2022.
+Added: The swap was designated as a cash flow hedge designed to mitigate the impact of adverse interest rate fluctuations for a portion of the Company’s variable-rate debt equal to the notional amount of the swap.
+Added: The interest rate swap converts the one-month Adjusted LIBOR interest rate on these borrowings to a fixed interest rate of 0.237 % through December 2022.
+Added: When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income (loss) and are reclassified into interest expense in the same period during which the hedged transactions affect earnings.
+Added: During Fiscal 2021, the Company recorded an immaterial amount of interest expense related to this agreement.
The following table details the fair value of the Company’s derivative contracts, which are recorded on a gross basis in the consolidated balance sheets as of March 27, 2021 and March 28, 2020 (in millions):
6 unchanged sentences
Designated forward foreign currency exchange contracts $ 155 $ 161 $ 2 (1)
−Removed: $ 161 $ 166 $ 1 (1)
Designated net investment hedge 3,194 44 3 (3)
−Removed: 44 2,234 3 (3)
+Added: Designated interest rate swap 500 — — — 1 (4)
Total designated hedges 3,849 205 5 4 265 —
Undesignated derivative contracts (5)
−Removed: — 199 — — — 5
−Removed: $ 205 $ 2,599 $ 4 $ 42 $ — $ 5
−Removed: (1) Recorded within prepaid expenses and other current assets in the Company’s audited consolidated balance sheets.
−Removed: (2) Recorded within accrued expenses and other current liabilities in the Company’s audited consolidated balance sheets.
−Removed: (3) Recorded within other assets in the Company’s audited consolidated balance sheets.
−Removed: (4) Primarily includes undesignated hedges of foreign currency denominated intercompany balances and inventory purchases.
+Added: Total $ 3,862 $ 205 $ 5 $ 4 $ 265 $ —
+Added: (1) Recorded within prepaid expenses and other current assets in the Company’s consolidated balance sheets.
+Added: (2) Recorded within accrued expenses and other current liabilities in the Company’s consolidated balance sheets.
+Added: (3) Recorded within other assets in the Company’s consolidated balance sheets.
+Added: (4) Recorded within other long-term liabilities in the Company’s consolidated balance sheets.
+Added: (5) Primarily includes undesignated hedges of inventory purchases.
The Company records and presents the fair values of all of its derivative assets and liabilities in its consolidated balance sheets on a gross basis, as shown in the above table.
1 unchanged sentence
Forward Currency Exchange Contracts Net Investment
+Added: Hedges Interest Rate Swap
2021 March 28,
1 unchanged sentence
2021 March 28,
+Added: 2020 March 27,
+Added: 2021 March 28,
Assets subject to master netting arrangements
5 unchanged sentences
The Company’s master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties.
−Removed: Changes in the fair value of the Company’s forward foreign currency exchange contracts that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income (loss), and are reclassified from accumulated other comprehensive income (loss) into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of sales within the Company’s consolidated statements of operations and comprehensive income (loss).
+Added: Changes in the fair value of the Company’s forward foreign currency exchange contracts that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income (loss), and are reclassified from accumulated other comprehensive income (loss) into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of sales within the Company’s consolidated statements of operations and comprehensive (loss) income.
The net gain or loss on net investment hedges are reported within foreign currency translation gains and losses (“CTA”) as a component of accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets.
Upon discontinuation of the hedge, such amounts remain in CTA until the related net investment is sold or liquidated.
−Removed: The following table summarizes the pre-tax impact of the gains and losses on the Company's designated forward foreign currency exchange contracts and net investment hedges (in millions):
+Added: Changes in the fair value of the Company’s interest rate swaps that are designated as accounting hedges are recorded in equity as a component of accumulated other comprehensive income (loss) and are reclassified from accumulated other comprehensive income (loss) into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of interest expense within the Company’s consolidated statements of operations and comprehensive (loss) income.
+Added: The following table summarizes the pre-tax impact of the gains and losses on the Company's designated forward foreign currency exchange contracts, net investment hedges and interest rate swaps (in millions):
Fiscal Year Ended March 27, 2021 Fiscal Year Ended March 28, 2020 Fiscal Year Ended March 30, 2019
−Removed: Pre-Tax Gains Recognized in OCI Pre-Tax Gains Recognized in OCI Pre-Tax Loss Recognized in OCI
+Added: Pre-Tax Losses Recognized in OCI Pre-Tax Gains Recognized in OCI Pre-Tax Gains Recognized in OCI
Designated forward foreign currency exchange contracts $ ( 2 ) $ 6 $ 16
Designated net investment hedges $ ( 263 ) $ 264 $ 47
−Removed: The following tables summarize the impact of the gains and losses within the consolidated statements of operations and comprehensive income related to the designated forward foreign currency exchange contracts for Fiscal 2020 and Fiscal 2019 (in millions):
+Added: Designated interest rate swaps $ ( 1 ) $ — $ —
+Added: The following tables summarize the impact of the gains and losses within the consolidated statements of operations and comprehensive (loss) income related to the designated forward foreign currency exchange contracts (in millions):
Fiscal Year Ended
−Removed: Pre-Tax Losses (Gains) Reclassified from
−Removed: Accumulated OCI Location of Losses (Gains) Recognized Total Cost of Sales
−Removed: March 28, 2020 March 30, 2019 March 31, 2018 March 28, 2020 March 30, 2019 March 31, 2018
−Removed: Designated forward currency exchange contracts
−Removed: $ ( 10 ) $ 4 $ 4 Cost of Sales $ 2,280 $ 2,058 $ 1,860
+Added: Pre-Tax (Gains) Losses Reclassified from
+Added: Accumulated OCI Location of (Gains) Losses Recognized
+Added: March 27, 2021 March 28, 2020 March 30, 2019
+Added: Designated forward currency exchange contracts $ ( 2 ) $ ( 10 ) $ 4 Cost of Sales
The Company expects that substantially all of the amounts recorded in accumulated other comprehensive income (loss) for its forward foreign currency exchange contracts will be reclassified into earnings during the next 12 months, based upon the timing of inventory purchases and turnover.
Undesignated Hedges
−Removed: During Fiscal 2020, Fiscal 2019 and Fiscal 2018, the Company recognized an immaterial amount of net gains, net losses of $ 78 million and net gains of $ 3 million respectively, related to changes in the fair value of undesignated forward foreign currency exchange contracts within foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive income.
+Added: During Fiscal 2021 and Fiscal 2020, the Company recognized an immaterial amount of net gains and losses and during Fiscal 2019, the Company recognized a net loss of $ 78 million within foreign currency (gain) loss in the Company’s consolidated statement of operations and comprehensive (loss) income as a result of the changes in the fair value of undesignated forward foreign currency contracts.
The Fiscal 2019 amount was primarily comprised of a $ 77 million loss related to the derivative contracts entered into on September 25, 2018 to mitigate foreign currency exchange risk associated with the Versace acquisition that were settled on December 21, 2018.
1 unchanged sentence
Share Repurchase Program
−Removed: During Fiscal 2020, the Company repurchased 2,711,807 shares through open market transactions at a cost of $ 100 million under its new $ 500 million share-repurchase program, which was authorized by the Company’s Board of Directors on August 1, 2019 and which expires on August 1, 2021.
−Removed: During Fiscal 2019, the Company repurchased 3,718,237 shares through open market transactions at a cost of $ 200 million under its previous $ 1.0 billion share-repurchase program, which expired on May 25, 2019.
+Added: During the first quarter of Fiscal 2021, the Company suspended its $ 500 million share-repurchase program in response to the continued impact of the COVID-19 pandemic.
+Added: During Fiscal 2021, the Company did no t purchase any shares through open market transactions under the current plan.
As of March 27, 2021, the remaining availability under the Company’s share repurchase program was $ 400 million.
1 unchanged sentence
The program may be suspended or discontinued at any time.
−Removed: The share repurchase program was suspended on April 6, 2020 in response to the continued global health and economic impact of the COVID-19 pandemic.
The Company also has in place a “withhold to cover” repurchase program, which allows the Company to withhold ordinary shares from certain executive officers and directors to satisfy minimum tax withholding obligations relating to the vesting of their restricted share awards.
3 unchanged sentences
Foreign Currency
−Removed: Translation (Losses)
−Removed: Net Gains (Losses) on
+Added: Income (Loss) (1)
+Added: Net (Loss) Income on
Derivatives (2)
−Removed: Other Comprehensive (Loss)/Gain Attributable to Capri
+Added: Other Comprehensive Income (Loss) Attributable to Capri
Balance at April 1, 2018 $ 61 $ ( 10 ) $ 51
−Removed: Other comprehensive income (loss) before reclassifications
−Removed: 148 ( 19 ) 129
−Removed: amounts reclassified from AOCI to earnings
−Removed: — ( 3 ) ( 3 )
−Removed: Other comprehensive income (loss), net of tax
−Removed: 148 ( 16 ) 132
−Removed: Balance at March 31, 2018 61 ( 10 ) 51
Other comprehensive (loss) income before reclassifications ( 134 ) 14 ( 120 )
−Removed: ( 134 ) 14 ( 120 )
amounts reclassified from AOCI to earnings — ( 3 ) ( 3 )
−Removed: — ( 3 ) ( 3 )
Other comprehensive (loss) income, net of tax ( 134 ) 17 ( 117 )
−Removed: ( 134 ) 17 ( 117 )
Balance at March 30, 2019 ( 73 ) 7 ( 66 )
2 unchanged sentences
Other comprehensive income (loss), net of tax 145 ( 4 ) 141
−Removed: 145 ( 4 ) 141
Balance at March 28, 2020 72 3 75
−Removed: (1) Foreign currency translation gains and losses include net gains of $ 6 million for both Fiscal 2020 and Fiscal 2019, on intra-entity transactions that are of a long-term investment nature.
−Removed: Foreign currency translation losses for Fiscal 2020 include a $ 60 million translation loss relating to the Jimmy Choo business, a $ 10 million translation loss relating to the Versace business and a $ 219 million gain, net of taxes of $ 45 million relating to the Company’s net investment hedges.
−Removed: Foreign currency translation losses for Fiscal 2019 includes an $ 105 million translation loss relating to the Jimmy Choo business, a $ 33 million translation loss relating to the Versace business and a $ 39 million gain, net of taxes of $ 8 million relating to the Company's net investment hedges.
−Removed: (2) Reclassified amounts relate to the Company’s forward foreign currency exchange contracts for inventory purchases and are recorded within cost of goods sold in the Company’s consolidated statements of operations and comprehensive income.
+Added: Other comprehensive loss before reclassifications ( 15 ) ( 2 ) ( 17 )
+Added: amounts reclassified from AOCI to earnings — 2 2
+Added: Other comprehensive loss, net of tax ( 15 ) ( 4 ) ( 19 )
+Added: Balance at March 27, 2021 $ 57 $ ( 1 ) $ 56
+Added: (1) Foreign currency translation losses for Fiscal 2021 primarily include a $ 199 million loss, net of taxes of $ 63 million, primarily relating to the Company’s net investment hedges, a net $ 189 million translation gain and a net loss of $ 8 million, on intra-entity transactions that are of a long-term investment nature.
+Added: Foreign currency translation gains for Fiscal 2020 includes a $ 219 million gain, net of taxes of $ 45 million, relating to the Company's net investment hedges, a $ 60 million translation loss relating to the Jimmy Choo business, a $ 10 million translation loss relating to the Versace business and a net gain of $ 6 million, on intra-entity transactions that are of a long-term investment nature.
+Added: (2) Reclassified amounts relate to the Company’s forward foreign currency exchange contracts for inventory purchases and are recorded within cost of goods sold in the Company’s consolidated statements of operations and comprehensive (loss) income.
Other comprehensive income (loss) before reclassifications related to derivative instruments for Fiscal 2021 was immaterial.
2 unchanged sentences
Share-Based Compensation
−Removed: The Company issues equity grants to certain employees and directors of the Company at the discretion of the Company’s Compensation and Talent Committee.
−Removed: The Company has two equity plans which includes one stock option plan adopted in Fiscal 2008 (as amended and restated, the “2008 Plan”), and an Omnibus Incentive Plan adopted in the third fiscal quarter of Fiscal 2012 and amended and restated with shareholder approval in May 2015 (the “Incentive Plan”).
+Added: The Company grants equity awards to certain employees and directors of the Company at the discretion of the Company’s Compensation and Talent Committee.
+Added: The Company has two equity plans which includes one stock option plan adopted in Fiscal 2008 (as amended and restated, the “2008 Plan”), and an Omnibus Incentive Plan adopted in the third fiscal quarter of Fiscal 2012 and amended and restated with shareholder approval in May 2015 and again in June 2020 (the “Incentive Plan”).
The 2008 Plan only provided for grants of share options and was authorized to issue up to 23,980,823 ordinary shares.
As of March 27, 2021, there were no shares available to grant equity awards under the 2008 Plan.
−Removed: The Incentive Plan allows for grants of share options, restricted shares and RSUs, and other equity awards, and authorizes a total issuance of up to 15,246,000 ordinary shares.
+Added: The Incentive Plan allows for grants of share options, restricted shares and restricted stock units ("RSUs"), and other equity awards, and authorizes a total issuance of up to 18,846,000 ordinary shares.
At March 27, 2021, there were 4,998,829 ordinary shares available for future grants of equity awards under the Incentive Plan.
19 unchanged sentences
There were 135,315 unvested options and 1,014,945 vested options outstanding at March 27, 2021.
−Removed: The total intrinsic value of options exercised during Fiscal 2020 was immaterial and $ 94 million during Fiscal 2019.
−Removed: The cash received from options exercised during Fiscal 2020 was immaterial and $ 29 million during Fiscal 2019.
−Removed: As of March 28, 2020, the remaining unrecognized share-based compensation expense for nonvested share options was $ 2 million, which is expected to be recognized over the related weighted-average period of approximately 1.80 years.
−Removed: There were no options granted during Fiscal 2020.
−Removed: The weighted average grant date fair value for options granted during Fiscal 2019 and Fiscal 2018 was $ 24.49 and $ 11.62 , respectively.
−Removed: The following table represents assumptions used to estimate the fair value of options:
−Removed: Fiscal Years Ended
−Removed: 2020 March 30,
−Removed: 2019 March 31,
−Removed: Expected dividend yield N/A 0.0 % 0.0 %
−Removed: Volatility factor N/A 36.9 % 36.3 %
−Removed: Weighted average risk-free interest rate N/A 2.8 % 1.8 %
−Removed: Expected life of option N/A 4.85 years 4.69 years
+Added: The total intrinsic value of options exercised during Fiscal 2021 was $ 10 million and immaterial during Fiscal 2020.
+Added: The cash received from options exercised during Fiscal 2021 was $ 3 million and immaterial during Fiscal 2020.
+Added: As of March 27, 2021, the remaining unrecognized share-based compensation expense for unvested share options was $ 1 million, which is expected to be recognized over the related weighted-average period of approximately 1.05 years.
+Added: There were no options granted during Fiscal 2021 or Fiscal 2020.
+Added: The weighted average grant date fair value for options granted during Fiscal 2019 was $ 24.49 .
+Added: The following table represents assumptions used to estimate the fair value of options for the fiscal year ended March 30, 2019:
+Added: Expected dividend yield 0.0 %
+Added: Volatility factor 36.9 %
+Added: Weighted average risk-free interest rate 2.8 %
+Added: Expected life of option 4.85 years
Restricted Awards
−Removed: The Company grants restricted share units at the fair market value on the date of the grant.
−Removed: Expense for restricted awards is based on the closing market price of the Company’s shares on the date of grant and is recognized ratably over the vesting period net of expected forfeitures.
−Removed: The Company grants two types of restricted stock unit ("RSU") awards:
+Added: The Company grants RSUs at the fair market value on the date of the grant.
+Added: The expense related to RSUs is based on the closing market price of the Company’s shares on the date of grant and is recognized ratably over the vesting period, net of expected forfeitures.
+Added: The Company grants two types of RSUs:
time-based RSUs and performance-based RSUs.
−Removed: Time-based RSUs generally vest in full either generally around the first anniversary of the date of grant for our independent directors, or in equal increments on each of the four anniversaries of the date of grant.
−Removed: Performance-based RSUs vest in full on the second or third anniversary of the date of grant, subject to the employee’s continued employment during the vesting period (unless the employee is retirement-eligible) and only if certain pre-established cumulative performance targets are met.
+Added: Time-based RSUs generally vest in full on the first anniversary of the date of grant for our independent directors, or in equal increments on each of the third or fourth anniversaries of the date of grant (unless the employee is retirement-eligible).
+Added: Performance-based RSUs generally vest in full on the second or third anniversary of the date of grant, subject to the employee’s continued employment during the vesting period and only if certain pre-established cumulative performance targets are met.
Expense related to performance-based RSUs is recognized ratably over the performance period, net of forfeitures, based on the probability of attainment of the related performance targets.
2 unchanged sentences
Service-based Performance-based
−Removed: Share Units Weighted
+Added: Stock Units Weighted
Average Grant
Date Fair Value Number of
−Removed: Share Units Weighted
+Added: Stock Units Weighted
Average Grant
3 unchanged sentences
Granted 2,349,594 $ 19.21 12,318 $ 39.43
−Removed: Decrease due to performance condition — $ — ( 39,999 ) $ 49.88
+Added: Change due to performance conditions — $ — 43,661 $ 57.70
Vested ( 1,354,285 ) $ 41.46 ( 102,078 ) $ 34.68
4 unchanged sentences
The total fair value of performance-based RSUs vested during Fiscal 2021, Fiscal 2020 and Fiscal 2019 was $ 6 million, $ 3 million and $ 7 million, respectively.
−Removed: As of March 28, 2020, the remaining unrecognized share-based compensation expense for non-vested service-based and performance-based RSU grants was $ 111 million and $ 7 million, respectively, which is expected to be recognized over the related weighted-average periods of approximately 3.01 years and 1.45 years, respectively.
−Removed: There were no non-vested restricted shares during Fiscal 2020.
−Removed: The total fair value of restricted shares vested was $ 4 million and $ 4 million during Fiscal 2019 and Fiscal 2018, respectively.
+Added: As of March 27, 2021, the remaining unrecognized share-based compensation expense for unvested service-based and performance-based RSU grants was $ 86 million and $ 4 million, respectively, which is expected to be recognized over the related weighted-average periods of approximately 2.32 years and 1.15 years, respectively.
+Added: There were no restricted shares vested during Fiscal 2021 or Fiscal 2020.
+Added: The total fair value of restricted shares vested was $ 4 million during Fiscal 2019.
Share-Based Compensation Expense
7 unchanged sentences
Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
−Removed: The Company estimates forfeitures based on its historical forfeiture rate to date.
−Removed: The estimated value of future forfeitures for equity grants as of March 28, 2020 is approximately $ 22 million.
+Added: The Company estimates forfeitures based on its historical forfeiture rates.
+Added: The estimated value of future forfeitures for equity awards as of March 27, 2021 is $ 13 million.
The Company is a United Kingdom tax resident and is incorporated in the British Virgin Islands.
1 unchanged sentence
and various other foreign jurisdictions, which are aggregated in the “Non-U.S.” information captioned below.
−Removed: (Loss) income before provision for income taxes consisted of the following (in millions):
+Added: Income (loss) before provision for income taxes consisted of the following (in millions):
Fiscal Years Ended
3 unchanged sentences
59 ( 187 ) 430
−Removed: Total (loss) income before provision for income taxes $ ( 215 ) $ 621 $ 742
+Added: Total income (loss) before provision for income taxes $ 3 $ ( 215 ) $ 621
The provision for income taxes was as follows (in millions):
10 unchanged sentences
Total provision for income taxes $ 66 $ 10 $ 79
−Removed: (1) Includes an $ 18 million provision related to the U.S.
−Removed: Tax Act one time revaluation of deferred tax assets.
−Removed: (2) Includes a $ 25 million current tax provision and equal deferred tax benefit related to the U.S.
+Added: (1) Includes a $ 25 million current tax provision and deferred tax benefit related to the U.S.
Tax Act impact to business interest disallowance provisions.
1 unchanged sentence
The Company’s provision for income taxes for the years ended March 27, 2021, March 28, 2020 and March 30, 2019 was different from the amount computed by applying the statutory U.K.
−Removed: income tax rate to the underlying (loss) income from operations before income taxes as a result of the following:
+Added: income tax rates to the underlying income (loss) from operations before income taxes as a result of the following (amounts in millions):
Fiscal Years Ended
3 unchanged sentences
statutory tax rate $ 1 19.0 % $ ( 41 ) 19.0 % $ 118 19.0 %
−Removed: State and local income taxes, net of federal benefit ( 1.9 ) % 0.9 % 0.5 %
Effects of global financing arrangements ( 24 ) ( 953.4 ) % ( 41 ) 21.7 % (4)
−Removed: tax reform — % — % 2.0 % (1)
−Removed: Differences in tax effects on foreign income 1.2 % ( 1.8 ) % (2)
−Removed: Liability for uncertain tax positions 5.7 % 1.3 % 6.6 %
+Added: ( 50 ) ( 8.1 ) %
Effect of changes in valuation allowances on deferred tax assets 24 955.7 % 67 ( 30.9 ) % (5)
+Added: Non-deductible goodwill impairment 18 700.2 % (6)
32 ( 15.1 ) % (6)
−Removed: Excess tax benefits related to stock-based compensation ( 4.2 ) % ( 2.6 ) % ( 0.8 ) %
−Removed: Transaction costs — % 1.5 % 0.9 %
+Added: Differences in tax effects on foreign income 13 522.4 % ( 7 ) 1.2 % ( 15 ) ( 1.8 ) % (2)
+Added: Liability for uncertain tax positions 11 414.2 % ( 12 ) 5.7 % 8 1.3 %
+Added: Tax rate change impact on deferred items 9 351.3 % — — % — — %
+Added: Share based compensation 6 247.7 % 9 ( 4.2 ) % ( 12 ) ( 2.6 ) %
+Added: State and local income taxes, net of federal benefit 5 201.5 % 4 ( 1.9 ) % 6 0.9 %
Withholding tax 4 165.0 % 3 ( 1.6 ) % 3 0.6 %
−Removed: Nondeductible goodwill impairment ( 15.1 ) % (6) — % — %
+Added: Transaction cost — — % — — % 9 1.5 %
Other ( 1 ) ( 33.1 ) % (7)
−Removed: Effective tax rate ( 4.7 ) % 12.7 % 20.2 %
−Removed: (1) Includes an $ 18 million expense related to the re-measurement of certain net deferred tax assets in connection with U.S.
+Added: ( 4 ) 1.4 % 1 ( 0.9 ) %
+Added: $ 66 2,590.5 % $ 10 ( 4.7 ) % $ 79 12.7 %
+Added: (1) Tax rates are calculated using unrounded numbers.
(2) Mainly attributable to the United States statutory federal income tax rate change from a blended rate for Fiscal 2018 of 31.54 % to 21 % in Fiscal 2019.
1 unchanged sentence
(4) Mainly attributable to pre-tax loss position in Fiscal 2020.
−Removed: (5) Mainly attributable to valuation allowances established on a portion of Non-US deferred tax assets
−Removed: (6) Attributable to the Jimmy Choo brand intangible that was impaired in Fiscal 2020
+Added: (5) Mainly attributable to valuation allowances established on a portion of non-U.S.
+Added: deferred tax assets.
+Added: (6) Attributable to goodwill impairment charges related to Jimmy Choo reporting units in Fiscal 2021 and Fiscal 2020.
+Added: (7) Primarily relates to individually immaterial U.S.
+Added: and foreign permanent adjustments.
Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in millions):
4 unchanged sentences
Net operating loss carryforwards 139 109
−Removed: Accrued Interest 40 41
+Added: Depreciation 54 33
Sales allowances 50 37
+Added: Accrued Interest 44 40
+Added: Derivative Financial Instruments 32 —
Inventories 25 34
−Removed: Depreciation 33 18
Stock compensation 12 13
Payroll related accruals 3 3
−Removed: Deferred rent — 34
−Removed: Valuation allowance ( 134 ) ( 40 )
Total deferred tax assets 902 790
+Added: Valuation allowance ( 159 ) ( 134 )
+Added: Net deferred tax assets 743 656
Deferred tax liabilities
5 unchanged sentences
The Company maintains valuation allowances on deferred tax assets applicable to subsidiaries in jurisdictions for which separate income tax returns are filed and where realization of the related deferred tax assets from future profitable operations is not reasonably assured.
−Removed: Deferred tax valuation allowances increased approximately $ 94 million, $ 29 million and $ 8 million in Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.
−Removed: The Company established valuation allowances amounting to approximately $ 110 million in Fiscal 2020, as a result of the expected inability to realize deferred tax asset balances in certain countries comprising the Company’s North American, European, and Asian operations.
−Removed: Additionally, in certain jurisdictions the Company remeasured and increased the valuation allowance by approximately $ 3 million in Fiscal 2020.
−Removed: The Company also remeasured and reduced the valuation allowance by approximately $ 19 million in Fiscal 2020 and released valuation allowances of approximately $ 3 million and $ 1 million in Fiscal 2019 and Fiscal 2018, respectively.
+Added: The valuation allowance increased $ 24 million, $ 94 million and $ 26 million in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively.
+Added: In certain jurisdictions, the Company increased the valuation allowance by $ 56 million, $ 113 million and $ 29 million and released valuation allowances of $ 32 million, $ 19 million and $ 3 million in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively.
At March 27, 2021, the Company had non-U.S.
−Removed: net operating loss carryforwards of approximately $ 570 million, a portion of which will begin to expire in 2020 .
−Removed: As of March 28, 2020 and March 30, 2019, the Company had liabilities related to its uncertain tax positions, including accrued interest, of approximately $ 109 million and $ 203 million, respectively, which are included in other long-term liabilities in the Company’s consolidated balance sheets.
−Removed: The March 28, 2020 balance, compared to the March 30, 2019 balance, includes the release of income tax reserves in North America and Europe.
−Removed: The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was approximately$ 82 million, $ 112 million and $ 101 million as of March 28, 2020, March 30, 2019 and March 31, 2018, respectively.
+Added: net operating loss carryforwards of $ 667 million, a portion of which will begin to expire in Fiscal 2022.
+Added: As of March 27, 2021 and March 28, 2020, the Company had liabilities related to its uncertain tax positions, including accrued interest, of $ 121 million and $ 109 million, respectively, which are included in other long-term liabilities in the Company’s consolidated balance sheets.
+Added: The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $ 92 million, $ 82 million and $ 112 million as of March 27, 2021, March 28, 2020 and March 30, 2019, respectively.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2021, Fiscal 2020 and Fiscal 2019, are presented below (in millions):
13 unchanged sentences
(2) Primarily relates to releases of North American and European tax reserves.
−Removed: (3) Primarily relates to US audit effective settlement
+Added: (3) Primarily relates to the effective settlement of a U.S.
The Company classifies interest and penalties related to unrecognized tax benefits as components of the provision for income taxes.
−Removed: Interest expense recognized in the consolidated statements of operations and comprehensive income for Fiscal 2020, Fiscal 2019 and Fiscal 2018 was approximately $ 11 million, $ 11 million and $ 7 million, respectively.
−Removed: The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations.
−Removed: The Company anticipates that the balance of gross unrecognized tax benefits, excluding interest and penalties, will be reduced by approximately $ 8 million during the next 12 months, primarily due to the anticipated settlement of a tax examination as well as statute of limitation expirations.
+Added: Interest expense recognized in the consolidated statements of operations and comprehensive (loss) income for Fiscal 2021, Fiscal 2020 and Fiscal 2019 was $ 15 million, $ 11 million and $ 11 million, respectively.
+Added: The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlement of ongoing tax audits and assessments and the expiration of applicable statutes of limitations.
+Added: The Company anticipates that the balance of gross unrecognized tax benefits, excluding interest and penalties, will be reduced by $ 31 million during the next 12 months, primarily due to the anticipated settlement of tax examinations as well as statute of limitation expirations.
However, the outcomes and timing of such events are highly uncertain and changes in the occurrence, expected outcomes and timing of such events could cause the Company’s current estimate to change materially in the future.
−Removed: The Company files income tax returns in the U.S., for federal, state, and local purposes, and in certain foreign jurisdictions.
−Removed: With few exceptions, the Company is no longer subject to examinations by the relevant tax authorities for years prior to its fiscal year ended April 1, 2017.
+Added: The Company files income tax returns in the United States and in various foreign, state and local jurisdictions.
+Added: Most examinations have been completed by tax authorities or the statute of limitations has expired for United States federal, foreign, state and local income tax returns filed by the Company for years through Fiscal 2015 (March 28, 2015).
Prior to the enactment of the Tax Cuts and Jobs Act, the Company's undistributed foreign earnings were considered permanently reinvested and, as such, United States federal and state income taxes were not previously recorded on these earnings.
3 unchanged sentences
It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.
+Added: On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic.
+Added: The CARES Act contains numerous income tax provisions, such as refundable payroll tax credits, deferral of the employer portion of certain payroll taxes, net operating loss carrybacks, modifications to net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.
+Added: The CARES Act require the Company to make significant judgments and estimates in the interpretation of the law and in the calculation of the provision for income taxes.
+Added: However, additional guidance may be issued by the Internal Revenue Service (“IRS”), the Department of the Treasury or other governing body that may significantly differ from our interpretation of the law, which may result in a material effect on our business, cash flow, results of operations, or financial conditions.
Retirement Plans
8 unchanged sentences
The Company’s three reportable segments are as follows:
−Removed: • Versace — segment includes revenue generated through the sale of Versace luxury ready-to-wear, accessories, footwear and home furnishings through directly operated Versace boutiques throughout North America (United States and Canada), EMEA and certain parts of Asia, as well as through Versace outlet stores and e-commerce sites.
−Removed: In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements that allow third parties to use the Versace trademarks in connection with retail and/or wholesale sales of Versace branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of jeans, fragrances, watches, jewelry and eyewear.
+Added: • Versace — segment includes revenue generated through the sale of Versace luxury ready-to-wear, accessories and footwear through directly operated Versace boutiques throughout North America (United States and Canada), EMEA and certain parts of Asia, as well as through Versace outlet stores and e-commerce sites.
+Added: In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements that allow third parties to use the Versace trademarks in connection with retail and/or wholesale sales of Versace branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of jeans, fragrances, watches, jewelry, eyewear and home furnishings.
• Jimmy Choo — segment includes revenue generated through the sale of Jimmy Choo luxury footwear, handbags and small leather goods through directly operated Jimmy Choo retail and outlet stores throughout the Americas, EMEA and certain parts of Asia, through its e-commerce sites, as well as through wholesale sales of luxury goods to distribution partners (including geographic licensing arrangements that allow third parties to use the Jimmy Choo trademarks in connection with retail and/or wholesale sales of Jimmy Choo branded products in specific geographic regions), multi-brand department stores and specialty stores worldwide.
−Removed: In addition, revenue is generated through product licensing agreements, which allow third parties to use the Jimmy Choo brand name and trademarks in connection with the manufacturing and sale of fragrances, sunglasses and eyewear.
+Added: In addition, revenue is generated through product licensing agreements, which allow third parties to use the Jimmy Choo brand name and trademarks in connection with the manufacturing and sale of fragrances and eyewear.
• Michael Kors — segment includes revenue generated through the sale of Michael Kors products through four primary Michael Kors retail store formats:
−Removed: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce sites, through which the Company sells Michael Kors products, as well as licensed products bearing the Michael Kors name, directly to the end consumer throughout the Americas, Europe and certain parts of Asia.
+Added: “Collection” stores, “Lifestyle” stores (including concessions), outlet stores and e-commerce sites, through which the Company sells Michael Kors products, as well as licensed products bearing the Michael Kors name, directly to consumers throughout the Americas, Europe and certain parts of Asia.
The Company also sells Michael Kors products directly to department stores, primarily located across the Americas and Europe, to specialty stores and travel retail shops, and to its geographic licensees.
In addition, revenue is generated through product and geographic licensing arrangements, which allow third parties to use the Michael Kors brand name and trademarks in connection with the manufacturing and sale of products, including watches, jewelry, fragrances and eyewear.
−Removed: In addition to these reportable segments, the Company has certain corporate costs that are not directly attributable to its brands and, therefore, are not allocated to segments.
−Removed: Such costs primarily include certain administrative, corporate occupancy, and information systems expenses, including enterprise resource planning system implementation costs.
+Added: In addition to these reportable segments, the Company has certain corporate costs that are not directly attributable to its brands and, therefore, are not allocated to its segments.
+Added: Such costs primarily include certain administrative, corporate occupancy, shared service and information systems expenses, including enterprise resource planning system implementation costs.
In addition, certain other costs are not allocated to segments, including restructuring and other charges (including transition costs related to the Company’s recent acquisitions), impairment costs and COVID-19 related charges.
10 unchanged sentences
Total revenue $ 4,060 $ 5,551 $ 5,238
−Removed: (Loss) income from operations:
+Added: Income (loss) from operations:
Versace $ 21 $ ( 8 ) $ ( 11 )
3 unchanged sentences
Corporate expenses ( 152 ) ( 152 ) ( 93 )
−Removed: Restructuring and other charges ( 42 ) ( 124 ) ( 102 )
Impairment of assets (1)
1 unchanged sentence
COVID-19 related charges (2)
−Removed: Total (loss) income from operations $ ( 192 ) $ 735 $ 749
+Added: ( 42 ) ( 119 ) —
+Added: Restructuring and other charges ( 32 ) ( 42 ) ( 124 )
+Added: Total income (loss) from operations $ 19 $ ( 192 ) $ 735
(1) Impairment of assets during Fiscal 2021 includes $ 191 million, $ 91 million and $ 34 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively.
−Removed: The impairment charges during Fiscal 2019 and Fiscal 2018 were primarily related to the Michael Kors reportable segment.
−Removed: (2) COVID-19 related charges primarily include additional inventory reserves and bad debt expense of $ 92 million and $ 25 million, respectively, recorded within costs of goods sold and selling, general and administrative expenses in the consolidated statements of operations.
+Added: Impairment of assets during Fiscal 2020 includes $ 434 million, $ 187 million and $ 87 million of impairment charges related to the Jimmy Choo, Michael Kors and Versace reportable segments, respectively.
+Added: The impairment charges during Fiscal 2019 were primarily related to the Michael Kors reportable segment.
+Added: (2) COVID-19 related charges during Fiscal 2021 primarily include net incremental inventory reserves and severance expense of $ 10 million and $ 24 million, respectively, recorded within costs of goods sold and selling, general and administrative expenses in the consolidated statements of operations and comprehensive (loss) income.
+Added: COVID-19 related charges during Fiscal 2020, primarily include additional inventory reserves and credit losses of $ 92 million and $ 25 million, respectively, recorded within costs of goods sold and selling, general and administrative expenses in the consolidated statements of operations and comprehensive (loss) income.
Depreciation and amortization expense for each segment are as follows (in millions):
27 unchanged sentences
$ 3,981 $ 4,172 $ 2,908
−Removed: (1) Long-lived assets as of March 28, 2020 reflect operating lease right-of-use assets resulting from the Company’s adoption of ASU 2016-02.
−Removed: See Note 2 for additional information.
(1) Net revenues earned in the U.S.
1 unchanged sentence
Long-lived assets located in the U.S.
−Removed: as of March 28, 2020 and March 30, 2019 were $ 1.060 billion and $ 296 million, respectively.
−Removed: As of March 28, 2020 and March 30, 2019, the Company's total assets were $ 7.946 billion and $ 6.650 billion, respectively.
−Removed: The increase in total assets was primarily due to the adoption of ASU 2016-02 in the first quarter of Fiscal 2020.
−Removed: As of March 28, 2020, the Company had operating lease right-of-use assets recorded on its consolidated balance sheets of $ 1.625 billion, of which $ 968 million related to Michael Kors, $ 457 million related to Versace, and $ 200 million related to Jimmy Choo.
+Added: as of March 27, 2021 and March 28, 2020 were $ 942 million and $ 1.060 billion, respectively.
+Added: (2) Long-lived assets as of March 27, 2021 and March 28, 2020 include property and equipment, net, intangible assets, net and operating lease right-of-use assets resulting from the Company’s adoption of ASU 2016-02.
+Added: See Note 4 for additional information.
+Added: As of March 27, 2021, the Company's total long-lived assets on its consolidated balance sheet were $ 3.981 billion, of which, $ 1.729 billion related to Versace, $ 1.515 billion related to Michael Kors and $ 737 million related to Jimmy Choo.
Total revenue by major product category are as follows (in millions):
9 unchanged sentences
Total revenue $ 4,060 $ 5,551 $ 5,238
−Removed: Selected Quarterly Financial Information (Unaudited)
−Removed: The following table summarizes the Fiscal 2020 and Fiscal 2019 quarterly results (dollars in millions):
−Removed: Fiscal Quarter Ended (1)
−Removed: 2019 September 28,
−Removed: 2019 December 28,
−Removed: 2019 March 28,
−Removed: Total revenue $ 1,346 $ 1,442 $ 1,571 $ 1,192
−Removed: Gross profit $ 834 $ 874 $ 932 $ 631
−Removed: Income (loss) from operations $ 64 (2)
−Removed: $ ( 536 ) (5)
−Removed: Net income (loss) $ 45 $ 73 $ 209 $ ( 552 )
−Removed: Net income (loss) attributable to Capri $ 45 $ 73 $ 210 $ ( 551 )
−Removed: Weighted average ordinary shares outstanding:
−Removed: Basic 151,049,572 151,602,502 150,826,196 149,380,121
−Removed: Diluted 152,334,153 152,576,283 152,154,372 149,380,121
−Removed: Fiscal Quarter Ended (1)
−Removed: 2018 September 29,
−Removed: 2018 December 29,
−Removed: 2018 March 30,
−Removed: Total revenue $ 1,203 $ 1,253 $ 1,438 $ 1,344
−Removed: Gross profit $ 751 $ 763 $ 873 $ 793
−Removed: Income from operations $ 215 (6)
−Removed: Net income $ 186 $ 137 $ 200 $ 19
−Removed: Net income attributable to Capri $ 186 $ 138 $ 200 $ 19
−Removed: Weighted average ordinary shares outstanding:
−Removed: Basic 149,502,101 149,575,112 149,183,049 150,801,608
−Removed: Diluted 152,399,655 151,705,685 150,268,424 152,083,632
−Removed: (1) All fiscal quarters presented contain 13 weeks.
−Removed: (2) Fiscal quarter ended June 29, 2019 includes impairment charges of $ 97 million, other costs related to acquisitions of $ 12 million and restructuring charges of $ 1 million.
−Removed: (3) Fiscal quarter ended September 28, 2019 includes impairment charges of $ 104 million and other costs related to acquisitions of $ 6 million.
−Removed: (4) Fiscal quarter ended December 28, 2019 includes impairment charges of $ 19 million, other costs related to acquisitions of $ 8 million and restructuring charges of $ 5 million.
−Removed: (5) Fiscal quarter ended March 28, 2020 includes impairment charges of $ 488 million and other costs related to acquisitions of $ 8 million.
−Removed: (6) Fiscal quarter ended June 30, 2018 includes impairment charges of $ 4 million, other costs related to acquisitions of $ 7 million and restructuring charges of $ 4 million.
−Removed: (7) Fiscal quarter ended September 29, 2018 includes impairment charges of $ 7 million, other costs related to acquisitions of $ 16 million and restructuring charges of $ 2 million.
−Removed: (8) Fiscal quarter ended December 29, 2018 includes impairment charges of $ 6 million, other costs related to acquisitions of $ 12 million and restructuring charges of $ 8 million.
−Removed: (9) Fiscal quarter ended March 30, 2019 includes impairment charges of $ 4 million, other costs related to acquisitions of $ 44 million and restructuring charges of $ 31 million.
−Removed: See Note 11 for additional information related to restructuring charges, as well as other costs related to acquisitions and Note 14 for additional information related to impairment charges.
Non-cash Investing Activities
−Removed: Significant non-cash investing activities for Fiscal 2019 and Fiscal 2018 included non-cash allocations of the fair values of the net assets acquired in connection with the Company’s acquisitions of Versace and Jimmy Choo, respectively.
+Added: Significant non-cash investing activities for Fiscal 2019 included non-cash allocations of the fair values of the net assets acquired in connection with the Company’s acquisition of Versace.
In addition, non-cash investing activities for Fiscal 2019 included an investment of 2.4 million of the Company’s ordinary shares made by the Versace family at acquisition date, which was valued at $ 91 million.
2 unchanged sentences
Subsequent Events
−Removed: Amendment to Credit Facility
−Removed: On June 25, 2020, the Company entered into the second amendment (the “Second Amendment”), to the 2018 Credit Facility, with, among others, JPMorgan Chase Bank, N.A., as administrative agent.
−Removed: Pursuant to the Second Amendment, the obligations under the 2018 Credit Facility will be secured by liens on substantially all of the assets of the Company and its U.S.
−Removed: subsidiaries that borrowers and guarantors, subject to certain exceptions, and substantially all of the registered intellectual property of the Company and its subsidiaries.
−Removed: This requirement for collateral will fall away if the Company achieves an investment grade ratings requirement for two consecutive full fiscal quarters.
−Removed: The Amendment adds a restriction on the disposition of assets and a requirement to prepay the term loans with certain net cash proceeds of non-ordinary course asset sales, subject to certain exceptions and a reinvestment option with respect to up to $ 100 million of net cash proceeds in the aggregate.
−Removed: Pursuant to the Second Amendment, the financial covenant in the Company's 2018 Credit Facility requiring it to maintain a ratio of the sum of total indebtedness plus the capitalized amount of all operating lease obligations for the last four fiscal quarters to Consolidated EBITDAR of no greater than 3.75 to 1.0 has been waived through the fiscal quarter ending June 26, 2021.
−Removed: When this financial covenant is reinstated, the applicable ratio will be calculated net of the Company's unrestricted cash and cash equivalents to the extent in excess of $ 100 million and shall exclude up to $ 150 million of supply chain financings, and the maximum permitted net leverage ratio will be 4.00 to 1.0.
−Removed: In addition, until March 31, 2021, the material adverse change representation required to be made in connection with revolving borrowings and the issuance or amendment of letters of credit will be modified to disregard certain COVID-19 pandemic-related impacts to the business, results of operations or financial condition of the Company and its subsidiaries, taken as a whole.
−Removed: The Second Amendment also requires the Company, during the period from June 25, 2020 until it delivers its financial statements with respect to the fiscal quarter ending June 26, 2021, to maintain at all times unrestricted cash and cash equivalents plus the aggregate undrawn amounts under the revolving facilities under the 2018 Credit Facility of not less than $ 300 million, increasing to $ 400 million on October 1, 2020 and $ 500 million on December 1, 2020.
−Removed: The 2018 Credit Facility and the Indenture governing the Company's senior notes contain certain restrictive covenants that impose operating and financial restrictions on the Company, and the Second Amendment imposes incremental restrictions on certain of these covenants during the covenant relief period provided under the 2018 Credit Facility, including restrictions on its ability to incur additional indebtedness and guarantee indebtedness, pay dividends or make other distributions or repurchase or redeem capital stock, make loans and investments, including acquisitions, sell assets, incur liens, enter into transactions with affiliates and consolidate, merge or sell all or substantially all of its assets.
−Removed: In addition, the Second Amendment adds a new $ 230 million revolving line of credit that matures on June 24, 2021 (the “ 364 Day Facility”).
−Removed: The terms of the 364 Day Facility are substantially similar to the terms of the existing revolving facility under the Credit Facility except that (i) no letters of credit or swingline loans are provided and (ii) for loans subject to Adjusted LIBOR, the applicable margin is 225 basis points per annum, for loans subject to the base rate the applicable margin is 125 basis points per annum and the commitment fee is 35 basis points per annum.
−Removed: In addition, while the 364 Day Facility is outstanding, (i) if the Company incurs any incremental indebtedness under the Credit Facility or certain permitted indebtedness in lieu of such incremental indebtedness, the 364 Day Facility will be reduced on a dollar for dollar basis and the Company will be required to make corresponding prepayments and (ii) the Company will be required to prepay amounts outstanding under the 364 Day Facility on a weekly basis to the extent that cash and cash equivalents of the Company and its subsidiaries exceed $ 200 million.
−Removed: The Second Amendment also permits certain working capital facilities between the Company or any of its subsidiaries with a lender or an affiliate of a lender under the Credit Facility to be guaranteed under the Credit Facility guarantees and certain supply chain financings with, and up to $ 50 million outstanding principal amount of bilateral letters of credit and bilateral bank guarantees issued by, a lender or an affiliate of a lender to be guaranteed and secured under the Credit Facility guarantees and collateral documents.
−Removed: Capri Retail Store Optimization Program
−Removed: In addition, the Company recently approved a plan to close approximately 170 of its retail stores over the next two fiscal years in order to improve the profitability of its retail store fleet.
−Removed: Over this time period, the Company expects to incur approximately $ 75 million of costs associated with these store closures.
−Removed: See Item 9B - Other Information for additional information.
−Removed: Revolving Credit Facilities
−Removed: During Fiscal 2021, the Company made net payments of approximately $ 328 million to lower the outstanding balance of its Revolving Credit Facilities.
+Added: Termination of 364 Day Facility and Reinstatement of Leverage Ratio Covenant
+Added: As noted in Note 12, on June 25, 2020, the Company entered into an amendment (the "Amendment") to its third amended and restated senior secured credit facility with among others, JPMorgan Chase Bank, N.A., as administrative agent, to, among other things, add a $ 230 million revolving line of credit (" 364 Day Facility") that matures on June 24, 2021.
+Added: On May 20, 2021, the Company determined it no longer desires to maintain this additional line of credit and consequently delivered a notice to the administrative agent terminating the 364 Day Facility, and the 364 Day Facility terminated on May 25, 2021.
+Added: The remainder of the 2018 Credit Facility remains in full force and effect.
+Added: As previously disclosed, the Amendment, among other things, also temporarily suspended the quarterly maximum leverage ratio covenant and imposed a minimum liquidity test during the period from June 25, 2020 until the earlier of (x) the date on which the Company delivers its financial statements for the fiscal quarter ending June 26, 2021 and (y) the date on which the Company certifies that its net leverage ratio as of the last day of the most recently ended fiscal quarter was no greater than 4.00 to 1.00 (the “Applicable Period”).
+Added: During the Applicable Period, applicable margins and commitment fees under the Credit Facility are increased and certain covenant baskets for restricted payments, the incurrence of indebtedness, acquisitions and other investments made by the Company are more restrictive.
+Added: On May 26, 2021 (the “Election Date”), the Company delivered to the Administrative Agent the certificate required to terminate the Applicable Period.
+Added: Effective as of the Election Date, the Company will be required to comply with the quarterly maximum net leverage ratio test of 4.00 to 1.00, and the applicable margins, commitment fees and covenant baskets will revert to the levels in effect prior to the effective date of the Amendment.
+Added: Share Repurchase Authorization
+Added: The Company also announced that its previously suspended share-repurchase program will be reinstated.
+Added: The availability under this program remains at $ 400 million.
+Added: Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy, and other relevant factors.
+Added: The program may be suspended or discontinued at any time.
+Added: Net Investment Hedges
+Added: During the first quarter of Fiscal 2022, the Company restructured approximately $ 2.9 billion of its net investment hedges by terminating these hedges and entered into multiple fixed-to-fixed cross currency swap agreements with an aggregate notional amount of approximately $ 2.9 billion to hedge the Company's net investment in Euro-denominated subsidiaries against future volatility in the exchange rates between the U.S.
+Added: Dollar and the Euro.
+Added: These contracts have been designated as net investment hedges.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.