1 unchanged sentence
Disclosure Controls and Procedures
−Removed: We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, our principal executive officer and principal financial officer, respectively, of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a - 15(e) and 15(d) - 15(e) under the Securities and Exchange Act of 1934, as amended, (the “Exchange Act”)) as of March 27, 2021.
−Removed: Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures are effective as of March 27, 2021.
+Added: We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, our principal executive officer and principal financial officer, respectively, of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a - 15(e) and 15(d) - 15(e) under the Securities and Exchange Act of 1934, as amended, (the “Exchange Act”)) as of April 2, 2022.
+Added: Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures are effective as of April 2, 2022.
Management’s Report on Internal Control over Financial Reporting
4 unchanged sentences
and (B) regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
−Removed: Our management assessed the effectiveness of our internal control over financial reporting as of March 27, 2021.
+Added: Our management assessed the effectiveness of our internal control over financial reporting as of April 2, 2022.
In making this assessment, it used the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the 2013 Framework.
−Removed: Based on this assessment, management has determined that, as of March 27, 2021, our internal control over financial reporting is effective based on those criteria.
−Removed: 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.
+Added: Based on this assessment, management has determined that, as of April 2, 2022, our internal control over financial reporting is effective based on those criteria.
+Added: The Company’s internal control over financial reporting as of April 2, 2022, 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.
Changes in Internal Control over Financial Reporting
−Removed: 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: 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.
−Removed: In addition, many of our corporate employees in affected regions continue to work remotely.
−Removed: Despite such actions, we have not experienced any material changes to our internal controls over financial reporting.
−Removed: 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 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.
+Added: Except as discussed below, there have been no changes in our internal control over financial reporting during the three months ended April 2, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: We are currently undertaking a major, multi-year ERP implementation to upgrade our information technology platforms and systems worldwide.
+Added: The implementation is occurring in phases over multiple years.
+Added: We have launched the Michael Kors Finance functionality on the ERP system in North America in the first quarter of Fiscal 2023.
+Added: As a result of this multi-year implementation, we expect certain changes to our processes and procedures, which in turn, could result in changes to our internal control over financial reporting.
+Added: While we expect this implementation to strengthen our internal control over financial reporting by automating certain manual processes and standardizing business processes and reporting across our organization, we will continue to evaluate and monitor our internal control over financial reporting as processes and procedures in the affected areas evolve.
+Added: “Risk Factors” — “A material delay or disruption in our information technology systems or e-commerce websites or our failure or inability to upgrade our information technology systems precisely and efficiently could have a material adverse effect on our business, results of operations and financial condition.
Other Information
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: During Fiscal 2021, the Company closed 101 of its retail stores as part of the Capri Retail Store Optimization Program.
−Removed: 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.
−Removed: The exact amounts and timing of the Capri Retail Optimization Program charges and future cash expenditures associated therewith are undeterminable at this time.
−Removed: The Company will either disclose in a Current Report on Form 8-K, or disclose in another periodic filing with the U.S.
−Removed: Securities and Exchange Commission, the amount of any material charges relating to the Capri Retail Optimization Program by major type of cost once such amounts or range of amounts are determinable.
+Added: As previously announced, the Board of Directors of the Company approved a retail store optimization program (the “Capri Retail Store Optimization Program”) to improve the profitability of its retail store fleet.
+Added: During the fourth quarter of Fiscal 2022, the Company completed its plan to close certain retail stores as a part of Capri Retail Store Optimization Program.
+Added: The Company closed a total of 167 of its retail stores, with 66 and 101 stores having closed during Fiscal 2022 and Fiscal 2021, respectively.
+Added: Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program was $14 million, of which $9 million and $5 million was recorded during Fiscal 2022 and Fiscal 2021, respectively.
+Added: Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program were $3 million during the three months ended April 2, 2022.
This disclosure is intended to satisfy the requirements of Item 2.05 of Form 8-K.
4 unchanged sentences
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
−Removed: The following table sets forth information as of March 27, 2021 regarding compensation plans under which the Company’s equity securities are authorized for issuance:
+Added: The following table sets forth information as of April 2, 2022 regarding compensation plans under which the Company’s equity securities are authorized for issuance:
Equity Compensation Plan Information
−Removed: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
+Added: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights (2)
+Added: Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders (1)
1 unchanged sentence
Equity compensation plans not approved by security holders — $ — —
−Removed: 42,761 $ 12.12 (2)
Total 4,393,340 $ 39.96 4,062,239
1 unchanged sentence
(2) Represents the weighted average exercise price of outstanding share awards only.
−Removed: (3) Reflects share options issued under the Company’s Amended and Restated Stock Option Plan (the “Option Plan”), which was in effect prior to our initial public offering.
−Removed: As of March 27, 2021, there were no shares available for future issuance under the Option Plan.
Certain Relationships, Related Transactions and Director Independence
5 unchanged sentences
The following consolidated financial statements listed below are filed as a separate section of this Annual Report on Form 10-K:
−Removed: Report of Independent Registered Public Accounting Firm - Ernst & Young LLP.
−Removed: Consolidated Balance Sheets as of March 27, 2021 and March 28, 2020.
−Removed: Consolidated Statements of Operations and Comprehensive (Loss) Income for the fiscal years ended March 27, 2021, March 28, 2020 and March 30, 2019.
−Removed: Consolidated Statements of Shareholders’ Equity for the fiscal years ended March 27, 2021, March 28, 2020 and March 30, 2019.
−Removed: Consolidated Statements of Cash Flows for the fiscal years ended March 27, 2021, March 28, 2020 and March 30, 2019.
−Removed: Notes to Consolidated Financial Statements for the fiscal years ended March 27, 2021, March 28, 2020 and March 30, 2019.
+Added: Report of Independent Registered Public Accounting Firm - Ernst & Young LLP (PCAOB ID No.
+Added: Consolidated Balance Sheets as of April 2, 2022 and March 27, 2021.
+Added: Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.
+Added: Consolidated Statements of Shareholders’ Equity for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.
+Added: Consolidated Statements of Cash Flows for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.
+Added: Notes to Consolidated Financial Statements for the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.
EXHIBIT INDEX
15 unchanged sentences
333-178282), filed on December 2, 2011 and incorporated herein by reference).
−Removed: Document Description
Amended and Restated Michael Kors (USA), Inc.
4 unchanged sentences
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).
+Added: Document Description
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.
001-35368), filed on July 22, 2020 and incorporated herein by reference).
−Removed: 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.
−Removed: Idol (included as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018, filed on May 30, 2018 and incorporated herein by reference).
+Added: Fifth Amended and Restated Employment Agreement, dated as of March 7, 2022, by and among Michael Kors (USA), Inc., Capri Holdings Limited and John D.
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).
6 unchanged sentences
Employment Agreement, dated as of April 17, 2017, by and among Michael Kors (USA), Inc., Michael Kors Holdings Limited and Thomas J.
−Removed: (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).
+Added: (included 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).
Capri Holdings Limited Deferred Compensation Plan (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.
3 unchanged sentences
Employment Agreement, dated as of March 30, 2020, by and among Capri Holdings Limited, Michael Kors (USA), Inc.
−Removed: and Daniel Purefoy.
+Added: and Daniel Purefoy (included as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 27, 2021, filed on May 26, 2021 and incorporated herein by reference).
+Added: Employment Agreement, dated as of August 24, 2021, by and among Capri Holdings Limited, Michael Kors (USA), Inc.
+Added: and Joshua Schulman (included as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 25, 2021 filed on November 3, 2021 and incorporated herein by reference).
+Added: Separation Agreement (“ Agreement ”), by and between Joshua Schulman, Capri Holdings Limited (“ Capri ”), and Michael Kors (USA), Inc., dated March 7, 2022.
+Added: Employment Agreement, effective as of June 1, 2021, by and among Capri Holdings Limited, Michael Kors (USA), Inc.
+Added: and Jenna Hendricks.
+Added: Suspension of Rights Agreement, dated as of September 23, 2021, to the Third Amended and Restated Credit Agreement, dated as of November 15, 2018 among, Michael Kors (USA), Inc., Capri Holdings Limited, the Foreign Subsidiary Borrowers party to the Credit Agreement, JPMorgan Chase Bank, N.A., as Administrative Agent, the Lenders thereto and the other parties party thereto (included as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 25, 2021 filed on November 3, 2021 and incorporated herein by reference).
List of subsidiaries of Capri Holdings Limited.
11 unchanged sentences
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) May 26, 2021
+Added: Idol Chairman, Chief Executive Officer and Director (Principal Executive Officer) June 1, 2022
/s/ Thomas J.
−Removed: Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer) May 26, 2021
−Removed: William Benedetto Director May 26, 2021
−Removed: William Benedetto
−Removed: /s/ Robin Freestone Director May 26, 2021
+Added: Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer) June 1, 2022
+Added: /s/ Marilyn Crouther Director June 1, 2022
+Added: Marilyn Crouther
+Added: /s/ Robin Freestone Director June 1, 2022
Robin Freestone
−Removed: /s/ Judy Gibbons Director May 26, 2021
−Removed: /s/ Ann Korologos Director May 26, 2021
+Added: /s/ Judy Gibbons Director June 1, 2022
+Added: /s/ Ann Korologos Director June 1, 2022
Ann Korologos
/s/ Stephen F.
−Removed: Reitman Director May 26, 2021
−Removed: /s/ Jane Thompson Director May 26, 2021
+Added: Reitman Director June 1, 2022
+Added: /s/ Jane Thompson Director June 1, 2022
Jane Thompson
−Removed: /s/ Jean Tomlin Director May 26, 2021
+Added: /s/ Jean Tomlin Director June 1, 2022
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
1 unchanged sentence
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of Capri Holdings Limited and subsidiaries (“the Company”) as of March 27, 2021 and March 28, 2020, and 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 (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 27, 2021 and March 28, 2020, and the results of its operations and its cash flow for each of the three years in the period ended March 27, 2021, in conformity with the U.S.
+Added: We have audited the accompanying consolidated balance sheets of Capri Holdings Limited and subsidiaries (“the Company”) as of April 2, 2022 and March 27, 2021, and the related consolidated statements of operations and comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended April 2, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at April 2, 2022 and March 27, 2021, and the results of its operations and its cash flow for each of the three years in the period ended April 2, 2022, in conformity with the U.S.
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 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.
−Removed: Adoption of ASU No.
−Removed: As discussed in Note 2 and Note 4 to the consolidated financial statements, the Company changed its method of accounting for leases in the fiscal year ended March 28, 2020 due to the adoption of ASU No.
−Removed: 2016-02, Leases and associated amendments (Topic 842).
+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 April 2, 2022, 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 June 1, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
14 unchanged sentences
Valuation of Goodwill and Indefinite-lived Intangible Assets
−Removed: Description of the Matter At March 27, 2021, the Company’s goodwill and indefinite-lived intangible assets, consisting of brand names, totaled $1.5 billion and $1.3 billion, respectively.
+Added: Description of the Matter At April 2, 2022, the Company’s goodwill and indefinite-lived intangible assets, consisting of brand names, totaled $1.4 billion and $1.2 billion, respectively.
As discussed in Note 2 to the consolidated financial statements, goodwill and indefinite-lived intangible assets are assessed for impairment on an annual basis, or whenever impairment indicators exist.
−Removed: During Fiscal 2021, the Company recognized a goodwill impairment charge of $94 million associated with two of its Jimmy Choo reporting units.
−Removed: The Company also recognized an impairment charge of $69 million associated with the Jimmy Choo indefinite-lived brand name intangible asset.
Auditing the Company’s annual impairment assessments was complex and highly judgmental due to the significant estimation required in determining the fair value of the reporting units for goodwill and the fair value of indefinite-lived brand name intangible assets.
−Removed: In particular, the fair value estimates were sensitive to significant assumptions, such as changes in the discount rate, revenue growth rate, margin and royalty rates, which are affected by expectations about future market or economic conditions (including the effects of the global pandemic).
+Added: In particular, the fair value estimates were sensitive to significant assumptions, such as changes in the discount rate, revenue growth rate, margin and royalty rates, which are affected by expectations about future market or economic conditions.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill and indefinite-lived intangible assets impairment review process, including controls over management’s review of the significant assumptions described above.
6 unchanged sentences
Impairment of Retail Store Long-Lived assets
−Removed: 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 27, 2021, the Company recognized an impairment charge of $158 million related to the long-lived assets.
+Added: 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 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.
+Added: During the year ended April 2, 2022, the Company recognized an impairment charge of $83 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).
1 unchanged sentence
Significant assumptions used in determining the fair value of certain operating lease right-of-use assets include the current market rent and discount rate for the remaining lease term of the related stores.
−Removed: These assumptions are subjective in nature and are affected by expectations about future market or economic conditions (including the effects of the global pandemic).
+Added: These assumptions are subjective in nature and are affected by expectations about future
+Added: market or economic conditions.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the retail store long-lived assets impairment process, including, determining the undiscounted future cash flows of the stores and the fair value of the long-lived assets (including those related to operating leases) for the stores that were deemed to be impaired.
9 unchanged sentences
Opinion on Internal Control over Financial Reporting
−Removed: We have audited Capri Holdings Limited and subsidiaries’ 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) (the COSO criteria).
−Removed: 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 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.
+Added: We have audited Capri Holdings Limited and subsidiaries’ internal control over financial reporting as of April 2, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
+Added: In our opinion, Capri Holdings Limited and subsidiaries (“the Company”) maintained, in all material respects, effective internal control over financial reporting as of April 2, 2022, based on the COSO criteria.
+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 April 2, 2022 and March 27, 2021, the related consolidated statements of operations and comprehensive income (loss) , shareholders’ equity and cash flows for each of the three years in the period ended April 2, 2022, and the related notes and our report dated June 1, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
10 unchanged sentences
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 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;
+Added: 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.
37 unchanged sentences
650,000,000 shares authorized;
−Removed: 219,222,937 shares issued and 151,280,011 outstanding at March 27, 2021;
+Added: 221,967,599 shares issued and 142,806,269 outstanding at April 2, 2022;
219,222,937 shares issued and 151,280,011 outstanding at March 27, 2021
−Removed: Treasury shares, at cost ( 67,942,926 shares at March 27, 2021 and 67,894,398 shares at March 28, 2020)
+Added: Treasury shares, at cost ( 79,161,330 shares at April 2, 2022 and 67,942,926 shares at March 27, 2021)
( 3,987 ) ( 3,326 )
8 unchanged sentences
CAPRI HOLDINGS LIMITED AND SUBSIDIARIES
−Removed: CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
+Added: CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In millions, except share and per share data)
12 unchanged sentences
Other income, net ( 2 ) ( 7 ) ( 6 )
−Removed: Interest expense, net 43 18 38
−Removed: Foreign currency (gain) loss ( 20 ) 11 80
+Added: Interest (income) expense, net ( 18 ) 43 18
+Added: Foreign currency loss (gain) 8 ( 20 ) 11
Income (loss) before provision for income taxes 915 3 ( 215 )
Provision for income taxes 92 66 10
−Removed: Net (loss) income ( 63 ) ( 225 ) 542
−Removed: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest
−Removed: ( 1 ) ( 2 ) ( 1 )
−Removed: Net (loss) income attributable to Capri $ ( 62 ) $ ( 223 ) $ 543
+Added: Net income (loss) 823 ( 63 ) ( 225 )
+Added: Net income (loss) attributable to noncontrolling interest 1 ( 1 ) ( 2 )
+Added: Net income (loss) attributable to Capri $ 822 $ ( 62 ) $ ( 223 )
Weighted average ordinary shares outstanding:
1 unchanged sentence
Diluted 152,497,907 150,453,568 150,714,598
−Removed: Net (loss) income per ordinary share attributable to Capri:
+Added: Net income (loss) per ordinary share attributable to Capri:
Basic $ 5.49 $ ( 0.41 ) $ ( 1.48 )
Diluted $ 5.39 $ ( 0.41 ) $ ( 1.48 )
−Removed: Statements of Comprehensive (Loss) Income:
−Removed: Net (loss) income $ ( 63 ) $ ( 225 ) $ 542
+Added: Statements of Comprehensive Income (Loss):
+Added: Net income (loss) $ 823 $ ( 63 ) $ ( 225 )
Foreign currency translation adjustments 127 ( 15 ) 145
−Removed: Net (loss) gain on derivatives ( 4 ) ( 4 ) 17
−Removed: Comprehensive (loss) income ( 82 ) ( 84 ) 425
−Removed: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest
−Removed: ( 1 ) ( 2 ) ( 1 )
−Removed: Comprehensive (loss) income attributable to Capri $ ( 81 ) $ ( 82 ) $ 426
+Added: Net gain (loss) on derivatives 10 ( 4 ) ( 4 )
+Added: Comprehensive income (loss) 960 ( 82 ) ( 84 )
+Added: Net income (loss) attributable to noncontrolling interest 1 ( 1 ) ( 2 )
+Added: Foreign currency translation adjustments attributable to noncontrolling interest ( 1 ) — —
+Added: Comprehensive income (loss) attributable to Capri $ 960 $ ( 81 ) $ ( 82 )
See accompanying notes to consolidated financial statements.
9 unchanged sentences
Shares Amounts Shares Amounts
−Removed: Balance as of April 1, 2018 210,991 — 831 ( 61,293 ) ( 3,016 ) 51 4,164 2,030 4 2,034
−Removed: Net income (loss) — — — — — — 543 543 ( 1 ) 542
−Removed: Other comprehensive loss — — — — — ( 117 ) — ( 117 ) — ( 117 )
−Removed: Total comprehensive income (loss) — — — — — — — 426 ( 1 ) 425
−Removed: Issuance of ordinary shares 2,395 — 91 — — — — 91 — 91
−Removed: Vesting of restricted awards, net of forfeitures 818 — — — — — — — — —
−Removed: Exercise of employee share options 1,847 — 29 — — — — 29 — 29
−Removed: Share based compensation expense — — 60 — — — — 60 — 60
−Removed: Repurchase of common stock — — — ( 3,826 ) ( 207 ) — — ( 207 ) — ( 207 )
−Removed: Balance at March 30, 2019, as previously reported
−Removed: 216,051 $ — $ 1,011 ( 65,119 ) $ ( 3,223 ) $ ( 66 ) $ 4,707 $ 2,429 $ 3 $ 2,432
−Removed: Adoption of accounting standard (See Note 2)
−Removed: — — — — — — ( 152 ) ( 152 ) — ( 152 )
+Added: Balance at March 30, 2019,
+Added: as previously reported 216,051 $ — $ 1,011 ( 65,119 ) $ ( 3,223 ) $ ( 66 ) $ 4,707 $ 2,429 $ 3 $ 2,432
+Added: Adoption of accounting standard (ASU 2106-02) — — — — — — ( 152 ) ( 152 ) — ( 152 )
Balance as of March 30, 2019 216,051 — 1,011 ( 65,119 ) ( 3,223 ) ( 66 ) 4,555 2,277 3 2,280
−Removed: 216,051 — 1,011 ( 65,119 ) ( 3,223 ) ( 66 ) 4,555 2,277 3 2,280
Net loss — — — — — — ( 223 ) ( 223 ) ( 2 ) ( 225 )
Other comprehensive income — — — — — 141 — 141 — 141
−Removed: — — — — — 141 — 141 — 141
Total comprehensive loss — — — — — — — ( 82 ) ( 2 ) ( 84 )
2 unchanged sentences
Share based compensation expense — — 70 — — — — 70 — 70
−Removed: Repurchase of common stock — — — ( 2,775 ) ( 102 ) — — ( 102 ) — ( 102 )
+Added: Repurchase of ordinary shares — — — ( 2,775 ) ( 102 ) — — ( 102 ) — ( 102 )
Adjustment of redeemable non-controlling interests to redemption value — — 4 — — — — 4 $ — 4
−Removed: Balance at March 28, 2020 217,320 $ — $ 1,085 ( 67,894 ) $ ( 3,325 ) $ 75 $ 4,332 $ 2,167 $ 1 $ 2,168
+Added: Balance as of March 28, 2020 217,320 — 1,085 ( 67,894 ) ( 3,325 ) 75 4,332 2,167 1 2,168
Net loss — — — — — — ( 62 ) ( 62 ) ( 1 ) ( 63 )
4 unchanged sentences
Share based compensation expense — — 70 — — — — 70 — 70
−Removed: Repurchase of common stock — — — ( 49 ) ( 1 ) — — ( 1 ) — ( 1 )
+Added: Repurchase of ordinary shares — — — ( 49 ) ( 1 ) — — ( 1 ) — ( 1 )
Other — — — — — — — — ( 1 ) ( 1 )
Balance at March 27, 2021 219,223 — 1,158 ( 67,943 ) ( 3,326 ) $ 56 4,270 2,158 ( 1 ) 2,157
+Added: Net income — — — — — — 822 822 1 823
+Added: Other comprehensive income (loss) — — — — — 138 — 138 ( 1 ) 137
+Added: Total comprehensive income — — — — — — — 960 — 960
+Added: Vesting of restricted awards, net of forfeitures 2,336 — — — — — — — — —
+Added: Exercise of employee share options 408 — 17 — — — — 17 — 17
+Added: Share based compensation expense — — 85 — — — — 85 — 85
+Added: Repurchase of ordinary shares — — — ( 11,218 ) ( 661 ) — — ( 661 ) — ( 661 )
+Added: Balance at April 2, 2022 221,967 — $ 1,260 ( 79,161 ) $ ( 3,987 ) $ 194 $ 5,092 $ 2,559 $ ( 1 ) $ 2,558
See accompanying notes to consolidated financial statements.
6 unchanged sentences
Cash flows from operating activities
−Removed: Net (loss) income $ ( 63 ) $ ( 225 ) $ 542
−Removed: Adjustments to reconcile net (loss) income to net cash provided by operating activities:
+Added: Net income (loss) $ 823 $ ( 63 ) $ ( 225 )
+Added: Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 193 212 249
1 unchanged sentence
Impairment of assets 83 316 708
−Removed: Credit loss ( 3 ) 29 4
−Removed: Losses on store lease exits — — 18
+Added: Credit losses 7 ( 3 ) 29
Deferred income taxes ( 57 ) ( 70 ) ( 73 )
1 unchanged sentence
Amortization of deferred financing costs 6 6 8
−Removed: Tax deficit (benefit) on exercise of share options 4 2 ( 24 )
+Added: Tax (benefit) deficit on exercise of share options ( 4 ) 4 2
Foreign currency (gains) losses — ( 15 ) 11
10 unchanged sentences
Capital expenditures ( 131 ) ( 111 ) ( 223 )
−Removed: Purchase of intangible assets — — ( 3 )
Cash paid for asset/business acquisitions, net of cash acquired — ( 13 ) ( 13 )
−Removed: Realized loss on hedge related to acquisitions — — ( 77 )
Settlement of net investment hedges 189 — 298
−Removed: Net cash (used in) provided by investing activities ( 124 ) 62 ( 2,125 )
+Added: Net cash provided by (used in) investing activities 58 ( 124 ) 62
Cash flows from financing activities
2 unchanged sentences
Debt issuance costs — ( 4 ) ( 1 )
−Removed: Repurchase of common stock ( 1 ) ( 102 ) ( 207 )
+Added: Repurchase of ordinary shares ( 661 ) ( 1 ) ( 102 )
Exercise of employee share options 17 3 —
−Removed: Net cash (used in) provided by financing activities ( 870 ) ( 497 ) 1,451
+Added: Other financing activities 31 — —
+Added: Net cash used in financing activities ( 800 ) ( 870 ) ( 497 )
Effect of exchange rate changes on cash and cash equivalents ( 24 ) 12 ( 4 )
11 unchanged sentences
Business and Basis of Presentation
−Removed: The Company was incorporated in the British Virgin Islands (“BVI”) on December 13, 2002 as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited (“Capri,” and together with its subsidiaries, the “Company”) on December 31, 2018.
+Added: The Company was incorporated in the British Virgin Islands on December 13, 2002 as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited (“Capri,” and together with its subsidiaries, the “Company”) on December 31, 2018.
The Company is a holding company that owns brands that are leading designers, marketers, distributors and retailers of branded women’s and men’s accessories, apparel and footwear bearing the Versace, Jimmy Choo and Michael Kors tradenames and related trademarks and logos.
5 unchanged sentences
All significant intercompany balances and transactions have been eliminated in consolidation.
+Added: The Company consolidates the results of its Versace business on a one-month lag, as consistent with prior periods.
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.
−Removed: 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 fiscal years ending on March 27, 2021 and March 28, 2020 (“Fiscal 2021” and “Fiscal 2020”, respectively) contain 52 weeks, whereas the fiscal year ending April 2, 2022 (“Fiscal 2022”) contain 53 weeks.
The Company’s Fiscal 2023 is a 52-week period ending April 1, 2023.
4 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 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.
+Added: The most significant assumptions and estimates involved in preparing the financial statements include allowances for customer deductions, sales returns, sales discounts, credit losses, estimates of inventory net realizable value, the valuation of share-based compensation, the valuation of deferred taxes, 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.
9 unchanged sentences
Sales taxes collected from retail customers are presented on a net basis and, as such, are excluded from revenue.
−Removed: 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
−Removed: historical trends, actual and forecasted performance and current market conditions, which are reviewed by management on a quarterly basis.
−Removed: 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):
−Removed: of Year Amounts
−Removed: Revenue Write-offs
−Removed: Reserves Balance
−Removed: Return Reserves:
−Removed: Fiscal Year Ended March 27, 2021 $ 12 $ 176 $ ( 168 ) $ 20
−Removed: Fiscal Year Ended March 28, 2020 15 231 ( 234 ) 12
−Removed: Fiscal Year Ended March 30, 2019 12 226 ( 223 ) 15
+Added: 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,
+Added: allowances, operational chargebacks, and certain cooperative selling expenses.
+Added: 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: The following table details the activity and balances of the Company’s sales reserves for the fiscal years ended April 2, 2022, March 27, 2021, and March 28, 2020 (in millions):
of Year Amounts
2 unchanged sentences
Total Sales Reserves:
−Removed: Fiscal Year Ended March 27, 2021 $ 154 $ 137 $ ( 213 ) $ 78
+Added: Fiscal Year Ended April 2, 2022 $ 98 $ 333 $ ( 339 ) $ 92
Fiscal Year Ended March 27, 2021 166 313 ( 381 ) 98
4 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 2021 and Fiscal 2020 total revenue.
Loyalty Program
−Removed: The Company offers a loyalty program, which allows its Michael Kors U.S.
−Removed: 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 offers a loyalty program, which allows its Michael Kors United States 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.
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.
3 unchanged sentences
Advertising and Marketing Costs
−Removed: 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.
+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 income (loss).
Advertising and marketing expense was $ 329 million, $ 137 million and $ 201 million in Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively.
−Removed: Cooperative advertising expense, which represents the Company’s participation in advertising expenses of its wholesale customers, is reflected as a reduction of net sales.
+Added: Cooperative advertising expense, which represents the Company’s participation in advertising expenses of its wholesale customers, is reflected as a reduction to revenue.
Expenses related to cooperative advertising for Fiscal 2022, Fiscal 2021 and Fiscal 2020, were $ 4 million, $ 3 million and $ 7 million, respectively.
1 unchanged sentence
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 in the Company’s consolidated statements of operations and comprehensive (loss) income.
+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 income (loss).
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 (loss) income were $ 160 million, $ 157 million and $ 132 million for Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively.
+Added: Shipping and handling costs included within selling, general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss) were $ 236 million, $ 160 million and $ 157 million for Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively.
Shipping and handling costs charged to customers are included in total revenue.
COVID-19 Related Government Assistance and Subsidies
−Removed: As there is no definitive guidance under U.S.
−Removed: GAAP, the Company has applied the guidance under International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance ("IAS 20").
−Removed: 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.
−Removed: During Fiscal 2021, the Company recognized $ 37 million related to government assistance and subsidies.
+Added: During Fiscal 2022 and Fiscal 2021, the Company recorded $ 10 million and $ 37 million, respectively, related to government assistance and subsidies.
+Added: There was no government assistance or subsidies recorded in Fiscal 2020.
+Added: These amounts mostly relate to rent support and payroll expense and were recorded as a reduction of selling, general and administrative expenses.
Cash, Cash Equivalents and Restricted Cash
All highly liquid investments with original maturities of three months or less are considered to be cash equivalents.
−Removed: 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 increase in credit card receivables year over year is mainly due to the impact on sales from COVID-19.
−Removed: 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: Included in the Company’s cash and cash equivalents as of April 2, 2022 and March 27, 2021 are credit card receivables of $ 18 million and $ 25 million, respectively, which generally settle within two to three business days.
+Added: A reconciliation of cash, cash equivalents and restricted cash as of April 2, 2022 and March 27, 2021 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:
Fiscal Years Ended
5 unchanged sentences
Inventories primarily consist of finished goods with the exception of raw materials and work in process inventory.
−Removed: 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.
+Added: The combined total of raw materials and work in process inventory recorded on the Company’s consolidated balance sheets as of April 2, 2022 and March 27, 2021 were $ 31 million and $ 28 million, respectively.
Inventories are stated at the lower of cost or net realizable value.
2 unchanged sentences
The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable.
−Removed: The net realizable value of the Company’s inventory is estimated based on historical experience, current and forecasted demand, and market conditions.
+Added: The net realizable value of the Company’s inventory is estimated based on historical experience, current and forecasted demand and other market conditions.
In addition, reserves for inventory losses are estimated based on historical experience and physical inventory counts.
1 unchanged sentence
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 27, 2021 and March 28, 2020 includes the adverse impacts connected to the COVID-19 pandemic.
−Removed: 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.
Store Pre-opening Costs
9 unchanged sentences
The Company capitalizes, in property and equipment, direct costs incurred during the application development stage and the implementation stage for developing, purchasing or otherwise acquiring software for its internal use.
−Removed: These costs are amortized over the estimated useful lives of the software, generally five years .
+Added: These costs are amortized over the estimated useful lives of the software, generally five years , except for ERP systems which has an estimated useful life of ten years .
All costs incurred during the preliminary project stage, including project scoping and identification and testing of alternatives, are expensed as incurred.
7 unchanged sentences
For the purposes of impairment testing, the Company groups long-lived assets at the lowest level of identifiable cash flow.
−Removed: 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: Leasehold improvements are typically amortized over the term of the store lease, including reasonably assured renewals and the shop-in-shops are amortized over a useful life of three to five years .
The Company’s impairment testing is based on its best estimate of the future operating cash flows.
3 unchanged sentences
During Fiscal 2022, Fiscal 2021 and Fiscal 2020, the Company recorded impairment charges of $ 83 million, $ 158 million and $ 357 million, respectively, which were primarily related to operating lease right-of-use assets and fixed assets of our retail store locations.
−Removed: Please refer to Note 8, Note 9 and Note 14 for additional information.
+Added: Please refer to Note 7 and Note 13 for additional information.
Goodwill and Other Indefinite-lived Intangible Assets
3 unchanged sentences
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.
−Removed: 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.
+Added: In the absence of any impairment indicators, goodwill, for 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.
17 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The fair value of the Versace retail brand and Versace wholesale brand are more than 10 % higher than their respective carrying values.
−Removed: 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.
−Removed: 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.
−Removed: 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 elected to perform quantitative impairment analyses for the Versace and Jimmy Choo reporting units, using a combination of income and market approaches to estimate the fair values of reporting units.
+Added: The Company also elected to perform an impairment analysis for 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 concluded that the fair values of the Jimmy Choo and Versace reporting units and the brand intangible assets exceeded the related carrying amounts and no impairment was required.
+Added: In Fiscal 2021, 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.
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.
−Removed: 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.
−Removed: The Company did not incur any impairment charges in Fiscal 2019.
−Removed: 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: The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal years ended March 27, 2021 and March 28, 2020.
+Added: See Note 8 for information relating to the Company’s annual impairment analysis performed during the fourth quarter of Fiscal 2022, Fiscal 2021 and Fiscal 2020.
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.
4 unchanged sentences
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 general liability, marine transport and inventory and business interruption insurance.
+Added: The Company also maintains other types of customary business insurance policies, including general liability, directors and officers, marine transport and inventory and business interruption insurance.
Insurance recoveries represent gain contingencies and are recorded upon actual settlement with the insurance carrier.
7 unchanged sentences
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.
−Removed: 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.
+Added: These fair values are recognized as
+Added: 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.
Foreign Currency Translation and Transactions
2 unchanged sentences
Assets and liabilities are translated using period-end exchange rates, while revenues and expenses are translated using average exchange rates over the reporting period.
−Removed: 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 (gain) loss on the Company’s consolidated statements of operations and comprehensive (loss) income.
+Added: The resulting translation adjustments are recorded separately in shareholders’ equity as a component of accumulated other 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 income (loss).
Derivative Financial Instruments
5 unchanged sentences
All of the Company’s derivative instruments are recorded in the Company’s consolidated balance sheets at fair value on a gross basis, regardless of their hedge designation.
−Removed: 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: This derivative contract was not designated as an accounting hedge.
−Removed: Therefore, changes in fair value were recorded to foreign currency loss (gain) in the Company’s consolidated statements of operations and comprehensive (loss) income.
−Removed: 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 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.
−Removed: 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 income (loss) 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 income (loss) are recognized within cost of goods sold.
+Added: Formal hedge documentation is prepared for all derivative instruments designated as hedges, including a description of the hedged item and the hedging instrument and the risk being hedged.
+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 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 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 (gain) loss in the Company’s consolidated statements of operations and comprehensive (loss) 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 income (loss).
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.
4 unchanged sentences
Net Investment Hedges
−Removed: The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between its U.S.
−Removed: Dollars and these foreign currencies.
+Added: The Company also uses fixed-to-fixed cross currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between its United States dollar and these foreign currencies.
The Company has elected the spot method of designating these contracts under ASU 2017-12, “ Derivatives and Hedging (Topic 815):
Targeted Improvements to Accounting for Hedging Activities, ” 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 income (loss) on the Company’s consolidated balance sheets.
−Removed: Interest accruals and coupon payments are recognized directly in interest expense in the Company’s consolidated statements of operations and comprehensive (loss) income.
+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 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 income (loss).
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.
−Removed: 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.
−Removed: Dollar and these currencies.
+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 United States dollar and these currencies.
+Added: As of April 2, 2022, the Company had multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 4 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 United States dollar and these currencies.
Interest Rate Swap Agreements
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.
−Removed: 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.
−Removed: 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.
+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 and are reclassified into interest expense in the same period during which the hedged transactions affect earnings.
+Added: During the third quarter of Fiscal 2022, the Company terminated its only interest rate swap.
+Added: As a result, the Company recognized a $ 1 million gain within interest (income) expense, net, in the Company’s consolidated statements of operations and comprehensive income (loss).
+Added: Deferred income tax assets and liabilities provide 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.
The Company periodically assesses the realizability of deferred tax assets and the adequacy of deferred tax liabilities, based on the results of local, state, federal or foreign statutory tax audits or estimates and judgments used.
11 unchanged sentences
The Company leases retail stores, office space and warehouse space under operating lease agreements that expire at various dates through September 2043.
−Removed: 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 November 2024.
+Added: The Company’s leases generally have terms of up to ten years , generally require a fixed annual rent and may require the payment of additional rent if store sales exceed a negotiated amount.
+Added: Although most of the Company’s equipment is owned, the Company has limited equipment leases that expire on various dates through January 2026.
The Company acts as sublessor in certain leasing arrangements, primarily related to closed stores under its restructuring initiatives, as defined in Note 10.
8 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
−Removed: 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 included in the determination of the expected lease term.
The Company recognizes operating lease expense on a straight-line basis over the lease term.
11 unchanged sentences
See Note 11 for additional information.
−Removed: Net (Loss) Income per Share
−Removed: 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.
−Removed: 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.
+Added: Net Income (Loss) per Share
+Added: The Company’s basic net income (loss) per ordinary share is calculated by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period.
+Added: Diluted net income (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 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.
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.
−Removed: 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):
+Added: The components of the calculation of basic net income (loss) per ordinary share and diluted net income (loss) per ordinary share are as follows (in millions, except share and per share data):
Fiscal Years Ended
1 unchanged sentence
2021 March 28,
−Removed: Net (loss) income attributable to Capri $ ( 62 ) $ ( 223 ) $ 543
+Added: Net income (loss) attributable to Capri $ 822 $ ( 62 ) $ ( 223 )
Basic weighted average shares 149,724,675 150,453,568 150,714,598
2 unchanged sentences
Diluted weighted average shares 152,497,907 150,453,568 150,714,598
−Removed: Basic net (loss) income per share (1)
+Added: Basic net income (loss) per share (1)
$ 5.49 $ ( 0.41 ) $ ( 1.48 )
−Removed: Diluted net (loss) income per share (1)
+Added: Diluted net income (loss) per share (1)
$ 5.39 $ ( 0.41 ) $ ( 1.48 )
−Removed: (1) Basic and diluted net (loss) income per share are calculated using unrounded numbers.
+Added: (1) Basic and diluted net income (loss) per share are calculated using unrounded numbers.
Share equivalents of 360,378 shares, 3,658,959 shares and 3,752,560 shares, for Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively, have been excluded from the above calculation due to their anti-dilutive effect.
8 unchanged sentences
Recently Adopted Accounting Pronouncements
−Removed: Measurement of Credit Losses on Financial Instruments
−Removed: On March 29, 2020, the Company adopted ASU No.
−Removed: 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 Financial Accounting Standards Board 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 collectability.
−Removed: The adoption of this update did not have a material impact on the Company’s consolidated financial statements.
−Removed: Implementation Costs Associated with Cloud Computing Arrangements
−Removed: On March 29, 2020, the Company adopted ASU No.
−Removed: 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software:
−Removed: 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.
−Removed: 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.
−Removed: The adoption of this update did not have a material impact on the Company’s consolidated financial statements.
+Added: Government Assistance Disclosures
+Added: In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, “Disclosures by Business Entities about Government Assistance”, which requires all businesses provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy.
+Added: These disclosures include providing the nature of the transactions and the related accounting policy used to account for the transactions, the amounts and financial statement line items impacted by these transactions, and the significant terms and conditions of these transactions, including commitments and contingencies related to such transactions.
+Added: ASU 2021-10 is effective for the Company beginning in its Fiscal 2023 with early adoption permitted.
+Added: The Company early adopted ASU 2021-10 during the third quarter of Fiscal 2022 and will continue to utilize the grant accounting model.
Recently Issued Accounting Pronouncements
1 unchanged sentence
Reference Rate Reform
−Removed: 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: In March 2020, the Financial Accounting Standards Board 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:
Both of these updates aim to ease the potential burden in accounting for reference rate reform.
−Removed: 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: These updates provide optional
+Added: 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”).
The amendments were effective upon issuance and allow companies to adopt the amendments on a prospective basis through December 31, 2022.
−Removed: The Company is currently evaluating the impact of these updates on its consolidated financial statements.
+Added: The Company has not applied this ASU to any contract modifications or new hedging relationships in the current year.
+Added: As of April 2, 2022, the Company’s outstanding borrowings under the 2018 Term Loan Facility of $ 495 million and the total availability of $ 1 billion under the 2018 Revolving Credit Facility are both indexed to LIBOR.
+Added: As such, these agreements are likely to be impacted by these ASUs upon adoption.
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 (including Australia).
+Added: The Company generates sales through directly operated stores and e-commerce throughout the Americas (United States, Canada and Latin America), EMEA (Europe, Middle East and Africa) and certain parts of Asia (Asia and Oceania).
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 $ 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.
+Added: The contract liability related to gift cards, net of estimated “breakage,” was $ 13 million and $ 12 million as of April 2, 2022 and March 27, 2021, respectively, and is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheets.
Loyalty Program .
−Removed: The Company offers a loyalty program, which allows its Michael Kors U.S.
−Removed: 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 offers a loyalty program, which allows its Michael Kors United States 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.
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.
2 unchanged sentences
The Company also has arrangements where its products are sold to geographic licensees in certain parts of EMEA, Asia and South America.
−Removed: Wholesale revenue is recognized net of estimates for sales returns, discounts, markdowns and allowances, when merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers.
+Added: Wholesale revenue is recognized net of estimates for sales
+Added: returns, discounts, markdowns and allowances, when merchandise is shipped and control of the underlying product is transferred to the Company’s wholesale customers.
To arrive at net sales for wholesale, gross sales are reduced by provisions for estimated future returns, as well as trade discounts, markdowns, allowances, operational chargebacks and certain cooperative selling expenses.
11 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 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):
+Added: As of April 2, 2022, 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
10 unchanged sentences
The Company recognizes an asset with a corresponding adjustment to cost of sales for the right to recover the products from its retail and wholesale customers.
−Removed: The refund liability recorded as of March 27, 2021 and March 28, 2020 was $ 46 million and $ 37 million, respectively, and the related asset for the right to recover returned product as of March 27, 2021 and March 28, 2020 was $ 14 million and $ 14 million, respectively.
+Added: The refund liability recorded as of April 2, 2022 and March 27, 2021 was $ 52 million and $ 46 million, respectively, and the related asset for the right to recover returned product as of April 2, 2022 and March 27, 2021 was $ 15 million and $ 14 million, respectively.
Contract Balances
The Company’s contract liabilities are recorded within accrued expenses and other current liabilities and other long-term liabilities in its consolidated balance sheets depending on the short- or long-term nature of the payments to be recognized.
−Removed: The Company’s contract liabilities primarily consist of gift card liabilities, loyalty program liabilities and advanced payments from product licensees.
−Removed: Total contract liabilities were $ 18 million and $ 22 million as of March 27, 2021 and March 28, 2020, respectively.
+Added: Company’s contract liabilities primarily consist of gift card liabilities, advanced payments from product licensees and loyalty program liabilities.
+Added: Total contract liabilities were $ 30 million and $ 18 million as of April 2, 2022 and March 27, 2021, respectively.
During Fiscal 2022 and Fiscal 2021, the Company recognized $ 10 million and $ 9 million in revenue, respectively, relating to contract liabilities that existed at March 27, 2021 and March 28, 2020 , respectively.
−Removed: There were no material contract assets recorded as of March 27, 2021 and March 28, 2020.
+Added: There were no material contract assets recorded as of April 2, 2022 and March 27, 2021.
There were no changes in historical variable consideration estimates that were materially different from actual results.
7 unchanged sentences
Versace revenue - Asia 255 241 237
−Removed: Total Versace 718 843 137
+Added: Total Versace revenue 1,088 718 843
Jimmy Choo revenue - the Americas 175 102 107
1 unchanged sentence
Jimmy Choo revenue - Asia 209 170 166
−Removed: Total Jimmy Choo 418 555 590
+Added: Total Jimmy Choo revenue 613 418 555
Michael Kors revenue - the Americas 2,627 1,869 2,822
1 unchanged sentence
Michael Kors revenue - Asia 491 448 510
−Removed: Total Michael Kors 2,924 4,153 4,511
+Added: Total Michael Kors revenue 3,953 2,924 4,153
Total revenue - the Americas 3,210 2,172 3,115
3 unchanged sentences
The following table presents the Company’s supplemental balance sheets information related to leases (in millions):
−Removed: Balance Sheet Location March 27,
+Added: Balance Sheet Location April 2,
2022 March 27,
2 unchanged sentences
Operating leases Long-term portion of operating lease liabilities $ 1,467 $ 1,657
−Removed: The components of net lease costs for the fiscal year ended March 27, 2021 and March 28, 2020 were as follows (in millions):
+Added: The components of net lease costs for the fiscal year ended April 2, 2022 and March 27, 2021 were as follows (in millions):
Consolidated Statement of Operations and
−Removed: Comprehensive (Loss) Income Location March 27,
+Added: Comprehensive Income (Loss) Location April 2,
2022 March 27,
3 unchanged sentences
Short-term lease cost Selling, general and administrative expenses 16 15
+Added: Sublease income (2)
+Added: Restructuring and other charges ( 5 ) ( 4 )
Sublease income Selling, general and administrative expenses ( 3 ) ( 2 )
−Removed: Total lease cost $ 510 $ 616
+Added: Total lease cost, net $ 553 $ 510
(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: As of the fiscal year ended March 27, 2021, rent concessions due to COVID-19 were $ 52 million.
−Removed: There is an immaterial impact from these concessions for the fiscal year ended March 28, 2020.
+Added: As of the fiscal year ended April 2, 2022 and March 27, 2021, rent concessions due to COVID-19 were $ 15 million and $ 52 million, respectively.
+Added: (2) The Company recorded sublease income related to certain leases in connection with the Capri Retail Store Optimization plan.
The following table presents the Company’s supplemental cash flow information related to leases (in millions):
5 unchanged sentences
Rent concessions due to COVID-19 15 52
−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 sheets as of March 27, 2021 and March 28, 2020:
−Removed: March 27, 2021 March 28,
+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 April 2, 2022 and March 27, 2021:
+Added: 2022 March 27,
Operating leases:
1 unchanged sentence
Weighted average discount rate 3.1 % 3.1 %
−Removed: At March 27, 2021, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):
−Removed: March 27, 2021
+Added: At April 2, 2022, the future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):
Fiscal 2023 $ 482
7 unchanged sentences
Total lease liabilities $ 1,881
−Removed: At March 27, 2021, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):
−Removed: March 27, 2021
+Added: At April 2, 2022, the future minimum sublease income under the terms of these noncancelable operating lease agreements are as follows (in millions):
Fiscal 2023 $ 7
3 unchanged sentences
Fiscal 2027 4
+Added: Thereafter 10
Total sublease income $ 37
−Removed: 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.
+Added: Additionally, the Company had approximately $ 49 million and $ 23 million of future payment obligations related to executed lease agreements for which the related lease has not yet commenced as of April 2, 2022 and March 27, 2021, respectively.
See Note 2 for additional information on the Company’s accounting policies related to leases.
−Removed: Acquisition of Alberto Gozzi S.r.L.
−Removed: On December 16, 2019, the Company entered into a definitive agreement to acquire Italian atelier and shoe manufacturer Alberto Gozzi S.r.L.
−Removed: The transaction was completed in the Company's fourth quarter of Fiscal 2020 and the assets and liabilities acquired approximated fair value.
−Removed: The acquired identifiable assets and liabilities net to a nominal amount, with $ 11 million recognized in goodwill allocated to the Jimmy Choo reportable segment.
−Removed: Acquisition of Versace
−Removed: 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.
−Removed: Versace’s results of operations have been included in our consolidated financial statements beginning on December 31, 2018.
−Removed: Versace contributed total revenue of $ 137 million and net loss of $ 12 million, after amortization of non-cash purchase accounting adjustments and transition and transaction costs, from the date of acquisition on December 31, 2018 through February 28, 2019 (reflecting a one-month reporting lag).
−Removed: The Company recorded measurement period adjustments during Fiscal 2020.
−Removed: The measurement period adjustments are primarily related to conclusions reached on the ability to utilize certain deferred tax assets based on new facts and circumstances identified which existed at the acquisition date and if known, would have affected the measurement of the amounts recognized as of that date.
−Removed: 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 year ended March 30, 2019 as if the acquisition had occurred on April 2, 2017, the beginning of Fiscal 2018 (in millions):
−Removed: March 30, 2019
−Removed: Pro-forma total revenue $ 5,983
−Removed: Pro-forma net income 579
−Removed: Pro-forma net income per ordinary share attributable to Capri:
−Removed: 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.
−Removed: The financial information for Versace prior to the acquisition has been included in the pro-forma results of operations on a calendar-year basis and includes certain adjustments to Versace’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 2, 2017.
−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 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.
−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 (loss) income, have been excluded from the above pro-forma consolidated results of operations due to their non-recurring nature.
−Removed: 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.
Receivables, net
4 unchanged sentences
allowances ( 44 ) ( 59 )
−Removed: (1) As of March 27, 2021 and March 28, 2020, $ 81 million and $ 80 million, respectively, of trade receivables were insured.
+Added: Total receivables, net $ 434 $ 373
+Added: (1) As of April 2, 2022 and March 27, 2021, $ 83 million and $ 81 million, respectively, of trade receivables were insured.
Receivables are presented net of allowances for discounts, markdowns, operational chargebacks and credit losses.
6 unchanged sentences
Amounts deemed uncollectible are written off against the allowance when it is probable the amounts will not be recovered.
−Removed: 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: Allowance for credit losses was $ 10 million and $ 25 million as of April 2, 2022 and March 27, 2021, respectively, including the impact related to COVID-19.
The Company had credit loss of $ 7 million, $( 3 ) million and $ 29 million, respectively, for Fiscal 2022, Fiscal 2021 and Fiscal 2020.
16 unchanged sentences
Leasehold improvements $ 575 $ 737
−Removed: Computer equipment and software 359 329
Furniture and fixtures 218 350
+Added: Computer equipment and software 212 359
Equipment 81 139
−Removed: In-store shops (1)
Building 48 51
+Added: In-store shops 47 53
+Added: Total property and equipment, gross (1)
accumulated depreciation and amortization (1)
( 790 ) ( 1,271 )
+Added: Subtotal 410 438
Construction-in-progress 66 47
−Removed: (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.
−Removed: 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: Total property and equipment, net $ 476 $ 485
+Added: (1) During the fiscal year ended April 2, 2022, the Company wrote off $ 552 million of fully depreciated assets and related accumulated depreciation for assets which were no longer in service.
+Added: Depreciation and amortization of property and equipment for the fiscal years ended April 2, 2022, March 27, 2021, and March 28, 2020 totaled $ 144 million, $ 165 million and $ 200 million, respectively.
During Fiscal 2022, Fiscal 2021 and Fiscal 2020, the Company recorded property and equipment impairment charges of $ 7 million, $ 23 million and $ 77 million, respectively, primarily related to the Company’s retail store locations.
2 unchanged sentences
The following table details the carrying values of the Company’s intangible assets other than goodwill (in millions):
−Removed: March 27, 2021 March 28, 2020
+Added: April 2, 2022 March 27, 2021
Amount Accumulated
−Removed: Amortization Net Gross
+Added: Amortization Net Carrying Amount Gross
Amount Accumulated
−Removed: Amortization Net
+Added: Amortization Net Carry Amount
Definite-lived intangible assets:
2 unchanged sentences
Customer relationships 414 112 302 437 86 351
−Removed: 860 184 676 827 132 695
+Added: Total definite-lived intangible assets 837 228 609 860 184 676
Indefinite-lived intangible assets:
3 unchanged sentences
917 — 917 978 — 978
−Removed: 1,565 249 1,316 1,471 180 1,291
+Added: Total indefinite-lived intangible assets 1,487 249 1,238 1,565 249 1,316
Total intangible assets, excluding goodwill $ 2,324 $ 477 $ 1,847 $ 2,425 $ 433 $ 1,992
−Removed: (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.
−Removed: The Company recorded an impairment charge of $ 180 million for the fiscal year ended March 28, 2020.
−Removed: (2) The year-over-year change in value relates to foreign currency translation.
−Removed: 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.
+Added: (1) The year-over-year change in net carrying amount reflects foreign currency translation for the fiscal year ended April 2, 2022.
+Added: As of April 2, 2022, the Company had accumulated impairment charges of $ 249 million related to the Jimmy Choo brand intangible assets.
+Added: 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 former licensing agreement.
The trademarks relate to the Michael Kors brand name and are amortized over twenty years .
Customer relationships are generally amortized over five to eighteen years .
−Removed: 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.
+Added: Amortization expense for the Company’s definite-lived intangibles was $ 49 million, $ 47 million and $ 49 million, respectively, for each of the fiscal years ended April 2, 2022, March 27, 2021 and March 28, 2020.
Indefinite-lived intangible assets other than goodwill included the Versace and Jimmy Choo brands, which were recorded in connection with the acquisitions of Versace and Jimmy Choo, and have an indefinite life due to being essential to the Company’s ability to operate the Versace and Jimmy Choo businesses for the foreseeable future.
6 unchanged sentences
Fiscal 2028 and thereafter 384
−Removed: The future amortization expense above reflects weighted-average estimated remaining useful lives of 20 years for reacquired rights, 2 years for trademarks and 12 years for customer relationships.
+Added: The future amortization expense above reflects weighted-average estimated remaining useful lives of nineteen years for reacquired rights, one year for trademarks and eleven years for customer relationships.
The following table details the changes in goodwill for each of the Company’s reportable segments (in millions):
1 unchanged sentence
Balance at March 28, 2020 881 487 120 $ 1,488
−Removed: Acquisition — 11 — 11
−Removed: Measurement period adjustment (1)
Impairment charges (1)
1 unchanged sentence
Foreign currency translation
−Removed: ( 6 ) ( 31 ) — ( 37 )
Balance at March 27, 2021 933 445 120 1,498
−Removed: Impairment charges (2)
−Removed: — ( 94 ) — ( 94 )
Foreign currency translation
−Removed: Balance at March 27, 2021 $ 933 $ 445 $ 120 $ 1,498
−Removed: (1) See Note 5 for additional information.
−Removed: (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.
+Added: ( 59 ) ( 21 ) — ( 80 )
+Added: Balance at April 2, 2022 $ 874 $ 424 $ 120 $ 1,418
+Added: (1) The Company recorded impairment charges of $ 94 million during Fiscal 2021 related to the Jimmy Choo wholesale 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.
−Removed: During the fourth quarter of Fiscal 2021, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis for its three segments.
−Removed: The Company performed its goodwill impairment assessment for its Michael Kors segment using a qualitative assessment.
+Added: During the fourth quarter of Fiscal 2022, the Company performed its annual goodwill and indefinite-lived intangible assets impairment analysis.
+Added: The Company performed its goodwill impairment assessment for its Michael Kors reporting units using a qualitative assessment.
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.
1 unchanged sentence
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.
−Removed: Based on the results of these assessments, the Company determined there was no impairment loss for the Jimmy Choo Retail reporting unit.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The Company did not record any such impairment charges in Fiscal 2019.
+Added: Based on the results of these assessments, the Company determined there was no impairment for the Jimmy Choo and Versace reporting units or brand intangible assets, as the fair values of the reporting units and the brand intangible assets exceeded the related carrying amounts.
+Added: In Fiscal 2021, the Company recorded goodwill impairment charges of $ 94 million related to the Jimmy Choo Wholesale and Jimmy Choo Licensing reporting units and impairment charges of $ 69 million related to the Jimmy Choo brand intangible assets.
+Added: In Fiscal 2020, the Company recorded goodwill impairment charges of $ 171 million related to the Jimmy Choo Retail and Jimmy Choo Licensing reporting units and impairment charges of $ 180 million related to the Jimmy Choo brand intangible assets.
+Added: The impairment charges were recorded within impairment of assets on our consolidated statement of operations and comprehensive income (loss) for the fiscal years ended March 27, 2021 and March 28, 2020.
See Note 13 for additional information.
4 unchanged sentences
Other accounts receivables 17 13
−Removed: Interest receivable related to net investment hedges 12 1
Prepaid contracts 15 11
+Added: Interest receivable related to net investment hedges 13 12
+Added: Total prepaid expenses and other current assets $ 192 $ 205
Accrued expenses and other current liabilities consist of the following (in millions):
2 unchanged sentences
Return liabilities 52 46
−Removed: Accrued rent (1)
−Removed: Charitable donations (2)
Accrued capital expenditures 39 17
+Added: Accrued advertising and marketing 21 11
+Added: Accrued rent (1)
+Added: Gift and retail store credits 17 12
Professional services 15 13
Accrued litigation 13 12
−Removed: Gift and retail store credits 12 11
−Removed: Accrued advertising and marketing 11 9
+Added: Accrued purchases and samples 11 8
Accrued interest 10 10
+Added: Charitable donations (2)
Restructuring liability 1 9
−Removed: Accrued purchases and samples 8 3
+Added: Total accrued expenses and other current liabilities $ 351 $ 297
(1) The accrued rent balance relates to variable lease payments.
−Removed: (2) Relates to a $ 20 million unconditional pledge to The Capri Holdings Foundation for the Advancement of Diversity in Fashion.
+Added: (2) The charitable donations balance relates to a $ 10 million unconditional pledge to The Versace Foundation as of April 2, 2022 and a $ 20 million unconditional pledge to The Capri Holdings Foundation for the Advancement of Diversity in Fashion as of March 27, 2021 which was funded during the second quarter ended September 25, 2021.
Restructuring and Other Charges
Capri Retail Store Optimization Program
−Removed: 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.
−Removed: 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.
−Removed: During Fiscal 2021, the Company closed 101 of its retail stores which have been incorporated into the Capri Retail Store Optimization Program.
−Removed: Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program during Fiscal 2021 was $ 5 million.
+Added: During Fiscal 2022, the Company completed its plan to close certain retail stores as a part of Capri Retail Store Optimization Program.
+Added: The Company closed a total of 167 of its retail stores, with 66 and 101 stores having closed during Fiscal 2022 and Fiscal 2021, respectively.
+Added: Net restructuring charges recorded in connection with the Capri Retail Store Optimization Program was $ 14 million, of which $ 9 million and $ 5 million was recorded during Fiscal 2022 and Fiscal 2021,
+Added: respectively.
The below table presents a roll forward of the Company’s restructuring liability related to its Capri Retail Store Optimization Program (in millions):
3 unchanged sentences
Payments ( 1 ) ( 5 ) ( 6 )
−Removed: Balance at March 27, 2021 $ — $ 3 $ 3
−Removed: (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.
−Removed: Michael Kors Retail Fleet Optimization Plan
−Removed: 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.
+Added: Balance at April 2, 2022
+Added: (1) Excludes $ 10 million of impairment charges related to operating lease right-of-use assets partially offset by a net credit of $ 5 million related to gains on certain lease terminations during Fiscal 2022.
Other Restructuring Charges
−Removed: 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.
−Removed: 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.
−Removed: During Fiscal 2021, the Company recorded costs of $ 19 million primarily related to equity awards associated with the acquisition of Versace.
−Removed: 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.
+Added: In addition to the restructuring charges related to the Capri Retail Store Optimization Plan, the Company incurred charges of $ 15 million primarily relating to severance for an executive officer and the closure of certain corporate locations during Fiscal 2022.
+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 the closure of certain corporate locations during Fiscal 2021.
+Added: The Company recorded costs of $ 18 million and $ 19 million during Fiscal 2022 and Fiscal 2021, respectively, for equity awards associated with the acquisition of Versace.
Debt Obligations
6 unchanged sentences
Unamortized debt issuance costs 3 7
−Removed: Unamortized discount on long-term debt 1 1
+Added: Unamortized discount on senior notes 1 1
Total carrying value of debt 1,160 1,342
1 unchanged sentence
Total long-term debt $ 1,131 $ 1,219
−Removed: Senior Secured Revolving Credit Facility
−Removed: 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”).
−Removed: 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.
−Removed: subsidiaries that are 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: The Company terminated the waiver period effective May 26, 2021.
−Removed: 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.
−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: The 2018 Credit Facility provides for a $ 1 billion revolving credit facility (the "Revolving Credit Facility"), which may be denominated in U.S.
−Removed: dollars and other currencies, including Euros, Canadian Dollars, Pounds Sterling, Japanese Yen and Swiss Francs.
+Added: Senior Revolving Credit Facility
+Added: The Company’s credit facility (the “2018 Credit Facility”) provides for a $ 1 billion revolving credit facility (the “Revolving Credit Facility”), which may be denominated in United States dollars.
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.
1 unchanged sentence
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.
−Removed: As of March 27, 2021, the Company has fully paid off Tranche 1 of the 2018 Term Loan Facility.
−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 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.
−Removed: 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.
−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 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.
−Removed: Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at the following rates:
−Removed: • for any loans (except loans denominated in Canadian Dollars), the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt rating;
−Removed: • for loans denominated in U.S.
−Removed: Dollars, an alternate base rate, which is the greatest of:
−Removed: (a) the prime rate publicly announced from time to time by JPMorgan Chase, (b) the greater of the federal funds effective rate and the Federal Reserve Bank of New York overnight bank funding rate and zero, plus 50 basis points, and (c) the greater of the one-month London Interbank Offered Rate adjusted for statutory reserve requirements for Eurocurrency liabilities (“Adjusted LIBOR”) and zero, plus 100 basis points, in each case, plus an applicable margin based on the Company’s public debt ratings;
−Removed: • for loans denominated in Canadian Dollars, the Canadian prime rate, which is the greater of the PRIMCAN Index rate and the rate applicable to one-month Canadian Dollar banker’s acceptances quoted on Reuters (“CDOR”), plus 100 basis points, plus an applicable margin based on the Company’s public debt ratings;
−Removed: • for loans denominated in Canadian Dollars, the average CDOR rate for the applicable interest period, plus 10 basis points per annum, plus an applicable margin based on the Company’s public debt ratings.
+Added: As of March 27, 2021, the Company has fully paid off the first tranche of the 2018 Term Loan Facility.
+Added: Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, for loans denominated in United States dollars, an alternate base rate, which is the greatest of:
+Added: (a) the prime rate publicly announced from time to time by JPMorgan Chase, (b) the greater of the federal funds effective rate and the Federal Reserve Bank of New York overnight bank funding rate and zero, plus 50 basis points, and (c) the greater of the one-month London Interbank Offered Rate adjusted for
+Added: statutory reserve requirements for Eurocurrency liabilities (“Adjusted LIBOR”) and zero, plus 100 basis points, in each case, plus an applicable margin based on the Company’s public debt ratings;
Borrowings under the 2018 Term Loan Facility bear interest, at the Company’s option, at (a) the alternate base rate plus an applicable margin based on the Company’s public debt ratings;
or (b) the greater of Adjusted LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s public debt ratings.
+Added: On June 25, 2020, the Company entered into the second amendment (the “Second Amendment”) to its third amended and restated 2018 Credit Facility, dated as of November 15, 2018, with, among others, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”).
+Added: Pursuant to the Second Amendment, the financial covenant in the Company’s 2018 Credit Facility required 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 had been waived through the fiscal quarter ending June 26, 2021.
+Added: In addition, the Second Amendment added a new $ 230 million revolving line of credit with a maturity date of June 24, 2021 (the “ 364 Day Facility”).
+Added: The Second Amendment also permitted 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.
+Added: The Second 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: On May 20, 2021, the Company determined it no longer desired 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: 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.
+Added: On September 23, 2021, the Company agreed to suspend its rights to borrow in all non-United States dollar (i.e.
+Added: Pounds Sterling, Euro, Swiss Francs and Japanese Yen) currency LIBOR rate tenors under the 2018 Credit Facility after December 31, 2021 given that non-United States dollar LIBOR will no longer be published after that date.
The Revolving Credit Facility also provides for an annual administration fee and a commitment fee equal to 0.10 % to 0.25 % per annum, based on the Company’s public debt ratings, applied to the average daily unused amount of the Revolving Credit Facility.
The 2018 Term Loan Facility provides for a commitment fee equal to 0.10 % to 0.25 % per annum, based on the Company’s public debt ratings, applied to the undrawn amount of the 2018 Term Loan Facility, from January 6, 2019 until the term loans are fully drawn or the commitments under the 2018 Term Loan Facility terminate or expire.
−Removed: 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 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.
+Added: 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 Canadian Dollar Offered Rate.
+Added: As per the reinstatement election date of May 27, 2021, the Company will be required to comply with the quarterly maximum net leverage ratio test of 4.00 to 1.00.
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.
1 unchanged sentence
The 2018 Credit Facility also includes covenants that limit additional indebtedness, guarantees, liens, acquisitions and other investments and cash dividends that are customary for financings of this type.
−Removed: See Note 22 for additional information.
−Removed: As of March 27, 2021 and the date these financial statements were issued, the Company was in compliance with
−Removed: 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.
+Added: As of April 2, 2022 and the date these financial statements were issued, the Company was in compliance with all covenants related to 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: As of March 27, 2021, the Company had no borrowings outstanding under the Revolving Credit Facility as a result of repaying the remaining borrowings.
−Removed: 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.
−Removed: 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.
−Removed: 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 April 2, 2022, the Company had $ 175 million of borrowings outstanding under the Revolving Credit Facility, which were 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.
+Added: In addition, stand-by letters of credit of $ 21 million and $ 27 million were outstanding as of April 2, 2022 and March 27, 2021, respectively.
+Added: At April 2, 2022 and March 27, 2021, the amount available for future borrowings under the Revolving Credit Facility were $ 804 million and $ 973 million, respectively.
+Added: As of March 27, 2021, the Company had $ 230 million available for future borrowings under the 364 Day Facility, which was terminated as of May 25, 2021.
+Added: As of April 2, 2022, the carrying values of borrowings outstanding under the 2018 Term Loan Facility were $ 495 million, net of debt issuance costs of $ 2 million, which was all recorded within long-term debt in its consolidated balance sheets due to prepayments made on the Term Loan during Fiscal 2022.
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.
−Removed: 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.
−Removed: (the “Issuer”), the Company’s wholly owned subsidiary, completed its offering of $ 450 million aggregate principal amount of 4.000 % senior notes due 2024 (the “Senior Notes”) at an issue price of 99.508 % of aggregate principal amount, pursuant to an exemption from registration under the Securities Act of 1933, as amended.
+Added: (the “Issuer”), the Company’s wholly owned subsidiary, completed its offering of $ 450 million aggregate principal amount senior notes due in 2024 (the “Senior Notes”), pursuant to an exemption from registration under the Securities Act of 1933, as amended.
The Senior Notes were issued under an indenture dated October 20, 2017, among the Issuer, the Company, the subsidiary guarantors party thereto and U.S.
1 unchanged sentence
The Senior Notes were issued to finance a portion of the Company’s acquisition of Jimmy Choo and certain related refinancing transactions.
−Removed: 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.
+Added: As of April 2, 2022, 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.
+Added: See Note 20 for additional information.
The Senior Notes are unsecured and are guaranteed by the Company and its existing and future subsidiaries that guarantee or are borrowers under the 2018 Credit Facility (subject to certain exceptions, including subsidiaries organized in China).
The Senior Notes may be redeemed at the Company’s option at any time in whole or in part at a price equal to 100 % of the principal amount, plus accrued and unpaid interest, plus a “make-whole” amount calculated at the applicable Treasury Rate plus 30 basis points.
−Removed: The Senior Notes rank equally in right of payment with all of the Issuer’s and guarantors’ existing and future senior unsecured indebtedness, senior in right of payment to any future subordinated indebtedness, effectively subordinated in right of payment to any of the Company’s subsidiaries’ obligations (including secured and unsecured obligations) and any of the Company’s secured obligations, to the extent of the assets securing such obligations.
+Added: The Senior Notes rank equally in right of payment with all of the Issuer’s and guarantors’ existing and future senior unsecured indebtedness, senior in right of payment to any future subordinated indebtedness, effectively subordinated in right of payment to any of the Company’s subsidiaries’ obligations and any of the Company’s secured obligations, to the extent of the assets securing such obligations.
The Indenture contains covenants, including those that limit the Company’s ability to create certain liens and enter into certain sale and leaseback transactions.
1 unchanged sentence
These covenants are subject to important limitations and exceptions, as per the Indenture.
−Removed: 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: As of April 2, 2022 and March 27, 2021, the carrying value of the Senior Notes was $ 448 million and $ 447 million, respectively, net of issuance costs and unamortized discount, which were recorded within long-term debt in the Company’s consolidated balance sheets.
Supplier Financing Program
3 unchanged sentences
The Company does not reimburse suppliers for any costs they incur to participate in the program and their participation is voluntary.
−Removed: 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.
+Added: The amount outstanding under this program as of April 2, 2022 and March 27, 2021 was $ 21 million and $ 17 million, respectively and is presented as short-term debt in the Company’s consolidated balance sheets.
Japan Credit Facility
4 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 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.
+Added: As of April 2, 2022 the Company had no borrowings outstanding under the Japan Credit Facility and $ 9 million borrowings outstanding as of March 27, 2021, 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 September 30, 2021 subject to the bank’s discretion.
−Removed: 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.
−Removed: 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 27, 2021 and March 28, 2020, there were no borrowings outstanding under the HK Credit Fac ility.
−Removed: As of March 27, 2021, bank guarantees supported by this facility were 3 million Hong Kong Dollars (less than $ 1 million).
−Removed: At March 27, 2021, the amount available for future borrowings under the HK Credit Facility was 97 million Hong Kong Dollars (approximately $ 13 million).
+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 January 2023 subject to the bank’s discretion.
+Added: The HK Credit Facility provides MKHKL with a revolving line of credit of up to 100 million Hong Kong dollar (approximately $ 13 million), which includes bank guarantees of up to 20 million HKD (approximately $ 3 million).
+Added: Borrowings under the HK Credit Facility must be made in increments of at least 5 million Hong Kong dollar and bear interest at the Hong Kong Interbank Offered Rate (“HIBOR”) plus 200 basis points.
+Added: As of April 2, 2022 and March 27, 2021, there were no borrowings outstanding under the HK Credit Fac ility.
+Added: As of April 2, 2022, bank guarantees supported by this facility were 1 million Hong Kong dollar (less than $ 1 million).
China Credit Facility
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 is in effect through December 31, 2021.
−Removed: 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.
−Removed: 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 27, 2021 and March 28, 2020, the Company had no borrowings outstanding under the China Credit Facility.
−Removed: Versace Credit Facilities
+Added: The China Credit Facility is in effect through October 2022.
+Added: The China Credit Facility provides MKTSCL with a Revolving Loan Facility of up to RMB 65 million (approximately $ 10 million), which includes a revolving loan of RMB 35 million (approximately $ 5 million), an overdraft facility with a credit line of RMB 10 million (approximately $ 2 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: Borrowings under the China Credit Facility bear interest at plus 0.42 % of the applicable People’s Bank of China’s benchmark lending rate at the time of borrowing.
+Added: As of April 2, 2022 and March 27, 2021, the Company had no borrowings outstanding under the China Credit Facility.
+Added: Versace Facilities
+Added: During the first quarter of Fiscal 2022, the Company's subsidiary, Versace, entered into an agreement with Banco BPM Banking Group (“the Bank”) to sell certain tax receivables to the Bank in exchange for cash.
+Added: The arrangement was determined to be a financing arrangement because the de-recognition criteria for the receivables was not met at the time of the cash receipt from the Bank.
+Added: As of April 2, 2022, the outstanding balance was $ 18 million, with $ 8 million and $ 10 million recorded within short-term debt and long-term debt in the Company’s consolidated balance sheets, respectively.
In June 2019, the Company’s subsidiary, Versace, entered into two uncommitted short-term credit facilities, one with Unicredit and the other with Intesa (“Versace Credit Facilities”), which may be used for general working capital needs of Versace.
The Versace Credit Facilities provide Versace with a swing line of credit of up to € 32 million (approximately $ 35 million), with interest set by the bank on the date of borrowing.
−Removed: As of March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility.
−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 sheets.
+Added: As of April 2, 2022 and March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility.
In November 2018, Versace entered into an overdraft facility (“Versace Overdraft Facility”), which may be used for general working capital needs of Versace.
−Removed: The overdraft facility provides Versace with a line of credit of up to € 5 million (approximately $ 6 million).
−Removed: As of March 27, 2021 and March 28, 2020, there were no borrowings outstanding under the Versace Overdraft Facility.
+Added: The overdraft facility provided Versace with a line of credit of up to € 5 million (approximately $ 6 million).
+Added: During the second quarter of Fiscal 2022, the Versace Overdraft Facility was terminated.
+Added: As of March 27, 2021, there were no borrowings outstanding under the Versace Overdraft Facility.
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.
−Removed: 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 27, 2021, there were no borrowings outstanding under the Versace Credit Facility.
−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 sheets.
+Added: The Versace Credit Facility provides Versace with a swing line of credit of up to € 20 million (approximately $ 22 million), which includes a bank guarantee of € 4 million (approximately $ 5 million), with interest set by the bank on the date of borrowing.
+Added: As of April 2, 2022, bank guarantees outstanding under this facility were € 3 million (approximately $ 3 million).
+Added: As of April 2, 2022 and March 27, 2021, there were no borrowings outstanding under the Versace Credit Facility.
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 $ 33 million at March 27, 2021, including $ 27 million in letters of credit issued under the Revolving Credit Facility.
+Added: The Company has issued stand-by letters of credit to guarantee certain of its retail and corporate operating lease commitments, aggregating $ 36 million at April 2, 2022, including $ 21 million in letters of credit issued under the Revolving Credit Facility.
Other Commitments
−Removed: 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.
+Added: As of April 2, 2022, the Company also has other contractual commitments aggregating $ 2.288 billion, which consist of inventory purchase commitments of $ 1.016 billion, debt obligations of $ 1.164 billion and other contractual obligations of $ 108 million, which primarily relate to the Company’s marketing and advertising obligations, information technology agreements and supply agreements.
Long-term Employment Contract
1 unchanged sentence
In addition to salary, the agreement provides for an annual bonus and other employee related benefits.
−Removed: In response to the continued global health and economic impact of the COVID-19 pandemic, the Chief Creative Officer of the Michael Kors brand voluntarily elected to forgo his salary for Fiscal 2021.
Contingencies
10 unchanged sentences
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
−Removed: 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:
+Added: At April 2, 2022 and March 27, 2021, the fair values of the Company’s derivative contracts, 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.
The Company makes no adjustments to these broker obtained quotes or prices, but assesses the credit risk of the counterparty and would adjust the provided valuations for counterparty credit risk when appropriate.
−Removed: 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.
+Added: 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 of the Company.
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.
−Removed: See Note 15 for detail.
+Added: See Note 14 for further 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):
−Removed: Fair value at March 27, 2021, using:
+Added: Fair value at April 2, 2022, using:
Fair value at March 27, 2021, using:
8 unchanged sentences
Net investment hedges — 44 — — 3 —
+Added: Undesignated derivative contracts — 4 — — — —
Total derivative assets $ — $ 52 $ — $ — $ 5 $ —
2 unchanged sentences
Net investment hedges — 37 — — 263 —
−Removed: Designated interest rate swaps — 1 — — — —
+Added: Interest rate swaps — — — — 1 —
Total derivative liabilities $ — $ 37 $ — $ — $ 265 $ —
4 unchanged sentences
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):
−Removed: March 27, 2021 March 28, 2020
+Added: April 2, 2022 March 27, 2021
Carrying Value Estimated
8 unchanged sentences
The Company’s goodwill and its indefinite-lived intangible assets (Versace and Jimmy Choo brands) are assessed for impairment at least annually, while its other long-lived assets, including operating lease right-of-use assets, property and equipment and definite-lived intangible assets, are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable.
−Removed: The fair values of these assets were determined based on Level 3 measurements using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.
+Added: The Company determines the fair values of these assets based on Level 3 measurements using the Company’s best estimates of the amount and timing of future discounted cash flows, based on historical experience, market conditions, current trends and performance expectations.
The following table details the carrying values and fair values of the Company’s assets that have been impaired (in millions):
2 unchanged sentences
$ 209 $ 133 $ 76
+Added: Property and Equipment
+Added: Total $ 221 $ 138 $ 83
+Added: Operating Lease Right-of-Use Assets $ 326 $ 191 $ 135
Goodwill 319 225 94
7 unchanged sentences
Total $ 1,843 $ 1,135 $ 708
−Removed: Property and Equipment
−Removed: Total $ 29 $ 8 $ 21
−Removed: (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.
−Removed: 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.
−Removed: Property and equipment related to these underperforming locations were fully impaired due to the adoption of ASU 2016-02.
−Removed: See Note 2 and Note 4 for additional information.
+Added: (1) Includes $ 10 million and $ 5 million of impairment charges that were recorded within restructuring and other charges related to the Capri Retail Store Optimization Program during Fiscal 2022 and Fiscal 2021, respectively.
There were no impairment charges related to goodwill or indefinite-lived intangible assets in Fiscal 2022.
5 unchanged sentences
The Company does not enter into derivative contracts for trading or speculative purposes.
−Removed: 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: 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).
−Removed: 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 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.
−Removed: Dollar and these currencies.
−Removed: Under the term of these contracts, the Company will exchange the semi-annual fixed rate payments on U.S.
−Removed: denominated debt for fixed rate payments of 0 % to 4.508 % in Euros and 0 % to 3.588 % in Japanese Yen.
−Removed: 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: During the first quarter of Fiscal 2022, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 2.875 billion to hedge its net investment in Euro denominated subsidiaries.
+Added: Due to an other-than-insignificant financing element for certain of these modifications, $ 31 million of net interest cash receipts during Fiscal 2022 related to these contracts were classified as financing activities in the Company’s consolidated statements of cash flows.
+Added: During the third and fourth quarter of Fiscal 2022, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 1.5 billion and $ 2.475 billion, respectively.
+Added: The modification of these hedges resulted in the Company receiving $ 59 million and $ 130 million in cash during the third and fourth quarter of Fiscal 2022, respectively.
+Added: These amounts are classified within investing activities in the Company’s consolidated statements of cash flows.
+Added: As of April 2, 2022, the Company had multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 4 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 United States dollar and these currencies.
+Added: Under the term of these contracts, the Company will exchange the semi-annual fixed rate payments on United States denominated debt for fixed rate payments of 0 % to 3.565 % in Euros and 0 % to 3.408 % in Japanese Yen.
+Added: Certain of these contracts include mandatory early termination dates between August 2025 and February 2026, while the remaining contracts have maturity dates between March 2024 and February 2051.
These contracts have been designated as net investment hedges.
−Removed: During the fourth quarter of Fiscal 2020, the Company terminated all of its net investment hedges related to its Euro-denominated subsidiaries.
−Removed: 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 other comprehensive income (loss) ("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 (loss) income.
−Removed: 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: Certain of these contracts are supported by a credit support annex (“CSA”) which provides for collateral exchange with the earliest effective date being May 2024.
+Added: If the outstanding position of a contract exceeds a certain threshold governed by the aforementioned CSA’s, either party is required to post cash collateral.
+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 income (loss).
+Added: Accordingly, the Company recorded interest income of $ 63 million, $ 16 million and $ 71 million, respectively, during Fiscal 2022, Fiscal 2021 and Fiscal 2020.
Interest Rate Swap
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: During Fiscal 2021, the Company recorded an immaterial amount of interest expense related to this agreement.
−Removed: 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):
+Added: The Company had an interest rate swap with an initial notional amount of $ 500 million that would have decreased to $ 350 million in April 2022.
+Added: The swap was designated as a cash flow hedge 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 converted the one-month Adjusted LIBOR interest rate on these borrowings to a fixed interest rate of 0.237 % through the date of termination.
+Added: During the third quarter of Fiscal 2022, the Company terminated its only interest rate swap.
+Added: As a result, the Company recognized a $ 1 million gain within interest (income) expense, net, within the Company’s consolidated statements of operations and comprehensive income (loss).
+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 and are reclassified into interest expense in the same period during which the hedged transactions affect earnings.
+Added: During Fiscal 2022 and Fiscal 2021, the Company recorded an immaterial amount of interest expense related to this agreement.
+Added: 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 April 2, 2022 and March 27, 2021 (in millions):
Notional Amounts Assets Liabilities
2022 March 27,
−Removed: 2020 March 27,
−Removed: 2021 March 28,
+Added: 2021 April 2,
2022 March 27,
+Added: 2021 April 2,
2022 March 27,
4 unchanged sentences
Undesignated derivative contracts (5)
+Added: 38 13 4 — — —
Total $ 4,351 $ 3,862 $ 52 $ 5 $ 37 $ 265
5 unchanged sentences
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.
−Removed: However, if the Company were to offset and record the asset and liability balances for its derivative instruments on a net basis in accordance with the terms of its master netting arrangements, which provide for the right to set-off amounts for similar transactions denominated in the same currencies, the resulting impact as of March 27, 2021 and March 28, 2020 would be as follows (in millions):
+Added: However, if the Company were to offset and record the asset and liability balances for its derivative instruments on a net basis in accordance with the terms of its master netting arrangements, which provide for the right to set-off amounts for similar transactions denominated in the same currencies and with the same banks, the resulting impact as of April 2, 2022 and March 27, 2021 would be as follows (in millions):
Forward Currency Exchange Contracts Net Investment
1 unchanged sentence
2022 March 27,
−Removed: 2020 March 27,
−Removed: 2021 March 28,
+Added: 2021 April 2,
2022 March 27,
+Added: 2021 April 2,
2022 March 27,
5 unchanged sentences
Derivative liabilities, net $ — $ — $ 35 $ 263 $ — $ 1
−Removed: 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 (loss) income.
−Removed: 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.
+Added: Currently, the Company’s master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties.
+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, and are reclassified from accumulated other comprehensive income into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of goods sold within the Company’s consolidated statements of operations and comprehensive income (loss).
+Added: 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 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: 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: 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 and are reclassified from accumulated other comprehensive income 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 income (loss).
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):
−Removed: Fiscal Year Ended March 27, 2021 Fiscal Year Ended March 28, 2020 Fiscal Year Ended March 30, 2019
−Removed: Pre-Tax Losses Recognized in OCI Pre-Tax Gains Recognized in OCI Pre-Tax Gains Recognized in OCI
+Added: Fiscal Year Ended April 2, 2022 Fiscal Year Ended March 27, 2021 Fiscal Year Ended March 28, 2020
+Added: Pre-Tax Gains Recognized in OCI Pre-Tax Losses Recognized in OCI Pre-Tax Gains Recognized in OCI
Designated forward foreign currency exchange contracts $ 11 $ ( 2 ) $ 6
1 unchanged sentence
Designated interest rate swaps $ — $ ( 1 ) $ —
−Removed: 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):
+Added: The following tables summarize the impact of the gains and losses within the consolidated statements of operations and comprehensive income (loss) related to the designated forward foreign currency exchange contracts (in millions):
Fiscal Year Ended
−Removed: Pre-Tax (Gains) Losses Reclassified from
−Removed: Accumulated OCI Location of (Gains) Losses Recognized
−Removed: March 27, 2021 March 28, 2020 March 30, 2019
−Removed: Designated forward currency exchange contracts $ ( 2 ) $ ( 10 ) $ 4 Cost of Sales
−Removed: 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.
+Added: Pre-Tax Losses (Gains) Reclassified from
+Added: Accumulated OCI Location of Losses (Gains) Recognized
+Added: April 2, 2022 March 27, 2021 March 28, 2020
+Added: Designated forward currency exchange contracts $ 1 $ ( 2 ) $ ( 10 ) Cost of goods sold
+Added: The Company expects that substantially all of the amounts recorded in accumulated other comprehensive income 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 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.
−Removed: 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.
+Added: During Fiscal 2022 and Fiscal 2021, a gain of $ 2 million and a loss of $ 1 million, respectively, were recognized within foreign currency (gain) loss in the Company’s consolidated statements of operations and comprehensive income (loss) as a result of the changes in the fair value of undesignated forward foreign currency exchange contracts.
+Added: During Fiscal 2020, the Company recognized an immaterial amount of net gains.
Shareholders’ Equity
Share Repurchase Program
−Removed: 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.
−Removed: During Fiscal 2021, the Company did no t purchase any shares through open market transactions under the current plan.
−Removed: As of March 27, 2021, the remaining availability under the Company’s share repurchase program was $ 400 million.
+Added: During the first quarter of Fiscal 2022, the Company reinstated its $ 500 million share-repurchase program, which was previously suspended during the first quarter of Fiscal 2021 in response to the impact of the COVID-19 pandemic and the provisions of the Second Amendment of the 2018 Credit Facility.
+Added: Subsequently, on November 3, 2021, the Company announced that its Board of Directors had terminated the Company’s existing $ 500 million share repurchase program (the “Prior Plan”), which had $ 250 million of availability remaining at the time, and authorized a new share repurchase program (the “Fiscal 2022 Plan”) pursuant to which the Company may, from time to time, repurchase up to $ 1.0 billion of its outstanding ordinary shares within a period of two years from the effective date of the program.
+Added: During Fiscal 2022, the Company purchased 11,014,541 shares with a fair value of $ 650 million through open market transactions.
+Added: During Fiscal 2021, the Company did not purchase any shares through open market transactions.
+Added: As of April 2, 2022, the remaining availability under the Company’s share repurchase program was $ 500 million.
Share repurchases may be made in open market or privately negotiated transactions, subject to market conditions, applicable legal requirements, trading transactions under the Company’s insider trading policy and other relevant factors.
2 unchanged sentences
During Fiscal 2022 and Fiscal 2021, the Company withheld 203,863 shares and 48,528 shares, respectively, with a fair value of $ 11 million and $ 1 million, respectively, in satisfaction of minimum tax withholding obligations relating to the vesting of restricted share awards.
−Removed: Accumulated Other Comprehensive Income (Loss)
−Removed: The following table details changes in the components of accumulated other comprehensive income (loss) ("AOCI"), net of taxes for Fiscal 2021, Fiscal 2020 and Fiscal 2019 (in millions):
+Added: Accumulated Other Comprehensive Income
+Added: The following table details changes in the components of accumulated other comprehensive income (“AOCI”), net of taxes, for Fiscal 2022, Fiscal 2021 and Fiscal 2020 (in millions):
Foreign Currency
Income (Loss) (1)
−Removed: Net (Loss) Income on
+Added: Net Income (Loss) on
Derivatives (2)
Other Comprehensive Income (Loss) Attributable to Capri
−Removed: Balance at April 1, 2018 $ 61 $ ( 10 ) $ 51
−Removed: Other comprehensive (loss) income before reclassifications ( 134 ) 14 ( 120 )
−Removed: amounts reclassified from AOCI to earnings — ( 3 ) ( 3 )
−Removed: Other comprehensive (loss) income, net of tax ( 134 ) 17 ( 117 )
Balance at March 30, 2019 $ ( 73 ) $ 7 $ ( 66 )
7 unchanged sentences
Balance at March 27, 2021 57 ( 1 ) 56
−Removed: (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.
−Removed: 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.
−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 (loss) income.
−Removed: Other comprehensive income (loss) before reclassifications related to derivative instruments for Fiscal 2021 was immaterial.
−Removed: Other comprehensive income (loss) before reclassifications related to derivative instruments for Fiscal 2020 and Fiscal 2019 is net of a tax benefits of $ 0 million and $ 2 million, respectively.
+Added: Other comprehensive income before reclassifications 127 10 137
+Added: amounts reclassified from AOCI to earnings — ( 1 ) ( 1 )
+Added: Other comprehensive income, net of tax 127 11 138
+Added: Balance at April 2, 2022 $ 184 $ 10 $ 194
+Added: (1) Foreign currency translation adjustments for Fiscal 2022 primarily include a $ 321 million gain, net of taxes of $ 114 million, primarily relating to the Company’s net investment hedges, and a net $ 210 million translation loss.
+Added: Foreign currency translation adjustments for Fiscal 2021 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 include 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 income (loss).
All tax effects were not material for the periods presented.
3 unchanged sentences
The 2008 Plan only provided for grants of share options and was authorized to issue up to 23,980,823 ordinary shares.
−Removed: As of March 27, 2021, there were no shares available to grant equity awards under the 2008 Plan.
+Added: As of April 2, 2022, there were no shares available to grant equity awards under the 2008 Plan.
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.
−Removed: At March 27, 2021, there were 4,998,829 ordinary shares available for future grants of equity awards under the Incentive Plan.
−Removed: Option grants issued from the 2008 Plan generally expire ten years from the date of the grant, and those issued under the Incentive Plan generally expire seven years from the date of the grant.
+Added: At April 2, 2022, there were 4,062,239 ordinary shares available for future grants of equity awards under the Incentive Plan.
+Added: Option grants issued from the 2008 Plan generally expire ten years from the grant
+Added: date, and those issued under the Incentive Plan generally expire seven years from the grant date.
+Added: See Note 20 for additional information.
Share Options
Share options are generally exercisable at the fair market value on the date of grant and vest on a pro-rata basis over a four year service period.
−Removed: The following table summarizes the share options activity during Fiscal 2021, and information about options outstanding at March 27, 2021:
+Added: The following table summarizes the share options activity during Fiscal 2022, and information about options outstanding at April 2, 2022:
Options Weighted
7 unchanged sentences
Canceled/forfeited ( 386,174 ) $ 92.05
−Removed: Outstanding at March 27, 2021
+Added: Outstanding at April 2, 2022
355,448 $ 57.54 2.00 $ 1
−Removed: Vested or expected to vest at March 27, 2021
+Added: Vested or expected to vest at April 2, 2022
355,448 $ 57.54 2.00
−Removed: Vested and exercisable at March 27, 2021
+Added: Vested and exercisable at April 2, 2022
308,494 $ 56.02 1.82 $ 1
−Removed: 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 2021 was $ 10 million and immaterial during Fiscal 2020.
−Removed: The cash received from options exercised during Fiscal 2021 was $ 3 million and immaterial during Fiscal 2020.
−Removed: 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.
−Removed: There were no options granted during Fiscal 2021 or Fiscal 2020.
−Removed: The weighted average grant date fair value for options granted during Fiscal 2019 was $ 24.49 .
−Removed: The following table represents assumptions used to estimate the fair value of options for the fiscal year ended March 30, 2019:
−Removed: Expected dividend yield 0.0 %
−Removed: Volatility factor 36.9 %
−Removed: Weighted average risk-free interest rate 2.8 %
−Removed: Expected life of option 4.85 years
+Added: There were 46,954 unvested options and 308,494 vested options outstanding at April 2, 2022.
+Added: The total intrinsic value of options exercised during Fiscal 2022 and Fiscal 2021 was $ 7 million and $ 10 million, respectively.
+Added: The cash received from options exercised during Fiscal 2022 and Fiscal 2021 was $ 17 million and $ 3 million, respectively.
+Added: As of April 2, 2022, the remaining unrecognized share-based compensation expense for unvested share options was less than $ 1 million, which is expected to be recognized over the related weighted-average period of approximately 0.2 years.
+Added: There were no options granted during Fiscal 2022, Fiscal 2021 or Fiscal 2020.
Restricted Awards
−Removed: The Company grants RSUs at the fair market value on the date of the grant.
+Added: The Company grants RSUs at the fair market value on the grant date.
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.
16 unchanged sentences
Granted 1,729,215 $ 55.27 — $ —
−Removed: Change due to performance conditions — $ — 43,661 $ 57.70
+Added: Change due to performance conditions, net — $ — 26,109 $ 7.82
Vested ( 2,327,165 ) $ 33.58 ( 347,561 ) $ 56.49
Canceled/forfeited ( 469,867 ) $ 33.85 ( 50,015 ) $ 39.36
−Removed: Unvested at March 27, 2021
+Added: Unvested at April 2, 2022
3,827,700 $ 38.65 210,192 $ 34.25
1 unchanged sentence
The total fair value of performance-based RSUs vested during Fiscal 2022, Fiscal 2021 and Fiscal 2020 was $ 18 million, $ 6 million and $ 3 million, respectively.
−Removed: 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.
−Removed: There were no restricted shares vested during Fiscal 2021 or Fiscal 2020.
−Removed: The total fair value of restricted shares vested was $ 4 million during Fiscal 2019.
+Added: As of April 2, 2022, the remaining unrecognized share-based compensation expense for unvested service-based and performance-based RSU grants was $ 77 million and $ 1 million, respectively, which is expected to be recognized over the related weighted-average periods of approximately 1.9 years and 1.3 years, respectively.
Share-Based Compensation Expense
8 unchanged sentences
The Company estimates forfeitures based on its historical forfeiture rates.
−Removed: The estimated value of future forfeitures for equity awards as of March 27, 2021 is $ 13 million.
+Added: The estimated value of future forfeitures for equity awards as of April 2, 2022 is $ 25 million.
The Company is a United Kingdom tax resident and is incorporated in the British Virgin Islands.
−Removed: Capri’s subsidiaries are subject to taxation in the U.S.
−Removed: and various other foreign jurisdictions, which are aggregated in the “Non-U.S.” information captioned below.
+Added: Capri’s subsidiaries are subject to taxation in the United States and various other foreign jurisdictions, which are aggregated in the “Non-United States” information captioned below.
Income (loss) before provision for income taxes consisted of the following (in millions):
2 unchanged sentences
2021 March 28,
−Removed: $ ( 56 ) $ ( 28 ) $ 191
−Removed: 59 ( 187 ) 430
+Added: United States $ 247 $ ( 56 ) $ ( 28 )
+Added: Non-United States 668 59 ( 187 )
Total income (loss) before provision for income taxes $ 915 $ 3 $ ( 215 )
3 unchanged sentences
2021 March 28,
−Removed: Federal $ 35 $ 4 (2) $ 82 (1)
−Removed: State 20 19 24
+Added: United States - Federal $ 36 $ 35 $ 4 (1)
+Added: United States - State 16 20 19
+Added: Non-United States 98 81 60
Total current 150 136 83
−Removed: Federal ( 37 ) ( 22 ) ( 34 ) (1)
−Removed: State ( 4 ) ( 3 ) ( 4 )
−Removed: ( 29 ) ( 48 ) ( 33 )
+Added: United States - Federal 24 (2) ( 37 ) ( 22 )
+Added: United States - State 7 ( 4 ) ( 3 )
+Added: Non-United States ( 89 ) (3) ( 29 ) ( 48 )
Total deferred ( 58 ) ( 70 ) ( 73 )
Total provision for income taxes $ 92 $ 66 $ 10
−Removed: (1) Includes a $ 25 million current tax provision and deferred tax benefit related to the U.S.
−Removed: Tax Act impact to business interest disallowance provisions.
−Removed: (2) Includes a $ 35 million current tax benefit due to a release of income tax reserves in the U.S.
−Removed: 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 rates to the underlying income (loss) from operations before income taxes as a result of the following (amounts in millions):
+Added: (1) Includes a $ 35 million current tax benefit due to a release of income tax reserves in the United States.
+Added: (2) Impact of United States tax accounting method change filed during Fiscal 2022 with respect to cost capitalization.
+Added: (3) Includes an Italian valuation allowance reversal during Fiscal 2022.
+Added: The Company’s provision for income taxes for the years ended April 2, 2022, March 27, 2021 and March 28, 2020 was different from the amount computed by applying the statutory U.K.
+Added: income tax rates to the underlying income (loss) before provision for income taxes as a result of the following (amounts in millions):
Fiscal Years Ended
3 unchanged sentences
statutory tax rate $ 174 19.0 % $ 1 19.0 % ( 41 ) 19.0 %
−Removed: Effects of global financing arrangements ( 24 ) ( 953.4 ) % ( 41 ) 21.7 % (4)
−Removed: ( 50 ) ( 8.1 ) %
Effect of changes in valuation allowances on deferred tax assets ( 67 ) ( 7.3 ) % 24 955.7 % 67 ( 30.9 ) % (2)
−Removed: Non-deductible goodwill impairment 18 700.2 % (6)
−Removed: 32 ( 15.1 ) % (6)
−Removed: Differences in tax effects on foreign income 13 522.4 % ( 7 ) 1.2 % ( 15 ) ( 1.8 ) % (2)
+Added: Effects of global financing arrangements ( 56 ) ( 6.1 ) % ( 24 ) ( 953.4 ) % ( 41 ) 21.7 % (3)
+Added: Brand tax basis step-up ( 46 ) ( 5.0 ) % — — % — — %
+Added: CARES Act tax loss carryback ( 43 ) ( 4.6 ) % — — % — — %
Liability for uncertain tax positions 91 9.9 % 11 414.2 % ( 12 ) 5.7 %
Tax rate change impact on deferred items 21 2.1 % 9 351.3 % — — %
−Removed: Share based compensation 6 247.7 % 9 ( 4.2 ) % ( 12 ) ( 2.6 ) %
State and local income taxes, net of federal benefit 12 1.3 % 5 201.5 % 4 ( 1.9 ) %
+Added: Differences in tax effects on foreign income 10 1.1 % 13 522.4 % ( 7 ) 1.2 %
Withholding tax 5 0.6 % 4 165.0 % 3 ( 1.6 ) %
−Removed: Transaction cost — — % — — % 9 1.5 %
−Removed: Other ( 1 ) ( 33.1 ) % (7)
−Removed: ( 4 ) 1.4 % 1 ( 0.9 ) %
+Added: Share based compensation 3 0.4 % 6 247.7 % 9 ( 4.2 ) %
+Added: Non-deductible goodwill impairment — — % 18 700.2 % (4)
32 ( 15.1 ) % (4)
+Added: Other ( 12 ) ( 1.3 ) % ( 1 ) ( 33.1 ) % (5)
+Added: Effective tax rate $ 92 10.1 % $ 66 2,590.5 % $ 10 ( 4.7 ) %
(1) Tax rates are calculated using unrounded numbers.
−Removed: (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.
−Removed: (3) Includes an $ 11 million provision related to a United Kingdom capital loss.
+Added: (2) Mainly attributable to valuation allowances established on a portion of non-United States deferred tax assets.
(3) Mainly attributable to pre-tax loss position in Fiscal 2020.
−Removed: (5) Mainly attributable to valuation allowances established on a portion of non-U.S.
−Removed: deferred tax assets.
(4) Attributable to goodwill impairment charges related to Jimmy Choo reporting units in Fiscal 2021 and Fiscal 2020.
−Removed: (7) Primarily relates to individually immaterial U.S.
−Removed: and foreign permanent adjustments.
+Added: (5) Primarily relates to individually immaterial United States and foreign permanent adjustments.
Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in millions):
6 unchanged sentences
Sales allowances 34 50
−Removed: Accrued Interest 44 40
−Removed: Derivative Financial Instruments 32 —
Inventories 26 25
+Added: Accrued interest 20 44
Stock compensation 7 12
Payroll related accruals 3 3
+Added: Derivative financial instruments — 32
Total deferred tax assets 762 902
4 unchanged sentences
Operating lease right-of-use-assets ( 340 ) ( 367 )
−Removed: Other — ( 14 )
+Added: Derivative financial instruments ( 73 ) —
Total deferred tax liabilities ( 862 ) ( 862 )
Net deferred tax liabilities $ ( 192 ) $ ( 119 )
+Added: (1) Includes an Italian valuation allowance reversal during Fiscal 2022.
+Added: (2) Includes a reversal of a Italian brand intangible deferred tax liability.
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: The valuation allowance increased $ 24 million, $ 94 million and $ 26 million in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively.
+Added: The valuation allowance decreased $ 67 million in Fiscal 2022, and increased $ 24 million and $ 94 million in Fiscal 2021 and Fiscal 2020, respectively.
In certain jurisdictions, the Company increased the valuation allowance by $ 34 million , $ 56 million and $ 113 million and released valuation allowances of $ 101 million, $ 32 million and $ 19 million in Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively.
−Removed: At March 27, 2021, the Company had non-U.S.
−Removed: net operating loss carryforwards of $ 667 million, a portion of which will begin to expire in Fiscal 2022.
−Removed: 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.
−Removed: 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.
+Added: As of April 2, 2022, the Company had non-United States and United States net operating loss carryforwards of $ 463 million, a portion of which will begin to expire in Fiscal 2023.
+Added: As of April 2, 2022 and March 27, 2021, the Company had liabilities related to its uncertain tax positions, including accrued interest, of $ 221 million and $ 121 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 $ 206 million, $ 92 million and $ 82 million as of April 2, 2022, March 27, 2021 and March 28, 2020, respectively.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2022, Fiscal 2021 and Fiscal 2020, are presented below (in millions):
5 unchanged sentences
Additions related to current period tax positions 29 (2) 9 4
+Added: Decreases related to audit settlements ( 13 ) (3) ( 6 ) ( 24 ) (3)
Decreases in prior period positions due to lapses in statute of limitations
2 unchanged sentences
( 4 ) ( 3 ) ( 99 ) (4)
−Removed: Decreases related to audit settlements ( 6 ) ( 24 ) (3) ( 7 )
Unrecognized tax benefits ending balance $ 221 $ 107 $ 99
−Removed: (1) Primarily relates to the Versace acquisition.
+Added: (1) Primarily relates to incremental reserves in North America and Europe.
+Added: (2) Primarily relates to European tax reserves established in Fiscal 2022.
+Added: (3) Primarily relates to the effective settlement of a United States audit.
(4) Primarily relates to releases of North American and European tax reserves.
−Removed: (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 (loss) income for Fiscal 2021, Fiscal 2020 and Fiscal 2019 was $ 15 million, $ 11 million and $ 11 million, respectively.
+Added: Interest and penalties recognized in the consolidated statements of operations and comprehensive income (loss) for Fiscal 2022, Fiscal 2021 and Fiscal 2020 was $ 28 million, $ 15 million and $ 11 million, respectively.
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.
2 unchanged sentences
The Company files income tax returns in the United States and in various foreign, state and local jurisdictions.
−Removed: 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).
−Removed: 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.
+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 2016.
+Added: Prior to the enactment of the Tax Cuts and Jobs Act (“Tax 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.
As a result of the Tax Act, substantially all of the Company’s earnings in foreign subsidiaries generated prior to the enactment of the Tax Act were deemed to have been repatriated.
4 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
+Added: The CARES Act requires 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
+Added: result in a material effect on our business, cash flow, results of operations, or financial conditions.
Retirement Plans
−Removed: The Company maintains defined contribution plans for employees, who generally become eligible to participate after three months of service.
−Removed: Features of these plans allow participants to contribute to a plan a percentage of their compensation, up to statutory limits depending upon the country in which a plan operates, and provide for mandatory and/or discretionary matching contributions by the Company, which vary by country.
+Added: The Company maintains defined contribution retirement plans for its employees, who generally become eligible to participate after three months of service.
+Added: Features of these plans allow participants to contribute a percentage of their compensation, up to statutory limits depending upon the country in which the employee resides, and provide for mandatory and/or discretionary matching contributions by the Company, which vary by country.
During Fiscal 2022, Fiscal 2021, and Fiscal 2020, the Company recognized expenses of approximately $ 16 million, $ 20 million and $ 12 million, respectively, related to these retirement plans.
5 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 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: • Versace — segment includes revenue generated through the sale of Versace luxury ready-to-wear, accessories and footwear through directly operated Versace boutiques throughout the Americas, certain parts of EMEA and certain parts of Asia, as well as through Versace outlet stores and e-commerce sites.
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.
−Removed: • 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.
+Added: • 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, certain parts of 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.
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 consumers 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, certain parts of EMEA 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.
1 unchanged sentence
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.
−Removed: Such costs primarily include certain administrative, corporate occupancy, shared service and information systems expenses, including enterprise resource planning system implementation costs.
−Removed: 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.
+Added: Such costs primarily include certain administrative, corporate occupancy, shared service and information systems expenses, including enterprise resource planning system implementation costs and Capri transformation program costs.
+Added: In addition, certain other costs are not allocated to segments, including restructuring and other charges, impairment costs, COVID-19 related charges, charitable donations and the war in Ukraine.
The segment structure is consistent with how the Company’s CODM plans and allocates resources, manages the business and assesses performance.
−Removed: All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance.
+Added: All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating
+Added: segment performance.
The following table presents the key performance information of the Company’s reportable segments (in millions):
17 unchanged sentences
14 ( 42 ) ( 119 )
+Added: Impact of war in Ukraine (3)
Restructuring and other charges ( 42 ) ( 32 ) ( 42 )
Total income (loss) from operations $ 903 $ 19 $ ( 192 )
+Added: (1) Impairment of assets during Fiscal 2022 include $ 50 million, $ 19 million and $ 4 million of impairment charges related to the Michael Kors, Versace and Jimmy Choo reportable segments, respectively.
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.
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.
−Removed: The impairment charges during Fiscal 2019 were primarily related to the Michael Kors reportable segment.
−Removed: (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.
−Removed: 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.
+Added: (2) COVID-19 related charges during Fiscal 2022 primarily include net inventory credits of $ 16 million as a result of better than expected sell-through and severance expense of $ 2 million, respectively.
+Added: Net inventory credits during Fiscal 2022 reflected a change in estimate resulting from better than expected sell-through.
+Added: COVID-19 related charges during Fiscal 2021, primarily include net inventory reserves and severance expense of $ 10 million and $ 24 million, respectively.
+Added: COVID-19 related charges during Fiscal 2020, primarily include additional inventory reserves and credit losses of $ 92 million and $ 25 million, respectively.
+Added: Inventory related costs are recorded within costs of goods sold and severance expense and credit losses are recorded within selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).
+Added: (3) These charges primarily relate to incremental credit losses and inventory reserves which are a direct impact of the war in Ukraine.
+Added: Credit losses are recorded within selling, general and administrative expenses and inventory related costs are recorded within costs of goods sold in the consolidated statements of operations and comprehensive income (loss).
Depreciation and amortization expense for each segment are as follows (in millions):
7 unchanged sentences
Total depreciation and amortization $ 193 $ 212 $ 249
−Removed: (1) Excluded from the above table are impairment charges, which are detailed in the below table and in Note 8, Note 9 and Note 14.
−Removed: See Note 9 to the accompanying consolidated financial statements for the Company’s goodwill by reportable segment.
+Added: See Note 8 for the Company’s goodwill by reportable segment.
Total revenue (based on country of origin) and long-lived assets by geographic location are as follows (in millions):
2 unchanged sentences
2021 March 28,
−Removed: The Americas (U.S., Canada and Latin America) (1)
+Added: The Americas (1)
$ 3,210 $ 2,172 $ 3,115
5 unchanged sentences
Long-lived assets:
−Removed: The Americas (U.S., Canada and Latin America) (1)
+Added: The Americas (1)
$ 450 $ 1,001 $ 1,132
2 unchanged sentences
Total long-lived assets $ 3,681 $ 3,981 $ 4,172
−Removed: $ 3,981 $ 4,172 $ 2,908
−Removed: (1) Net revenues earned in the U.S.
−Removed: during Fiscal 2021, Fiscal 2020, and Fiscal 2019 were $ 2.016 billion, $ 2.898 billion and $ 2.972 billion, respectively.
−Removed: Long-lived assets located in the U.S.
−Removed: as of March 27, 2021 and March 28, 2020 were $ 942 million and $ 1.060 billion, respectively.
−Removed: (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.
−Removed: See Note 4 for additional information.
−Removed: 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.
+Added: (1) Net revenues earned in the United States during Fiscal 2022, Fiscal 2021 and Fiscal 2020 were $ 2.989 billion, $ 2.016 billion and $ 2.898 billion, respectively.
+Added: Long-lived assets located in the United States as of April 2, 2022, March 27, 2021 and March 28, 2020 were $ 858 million, $ 942 million and $ 1.060 billion, respectively.
+Added: As of April 2, 2022, the Company’s total long-lived assets on its consolidated balance sheet were $ 3.681 billion, of which, $ 1.633 billion related to Versace, $ 1.404 billion related to Michael Kors and $ 644 million related to Jimmy Choo.
Total revenue by major product category are as follows (in millions):
9 unchanged sentences
Total revenue $ 5,654 $ 4,060 $ 5,551
−Removed: Non-cash Investing Activities
−Removed: 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.
−Removed: 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.
−Removed: See Note 5 for additional information.
−Removed: There were no other significant non-cash investing or financing activities during the fiscal periods presented.
Subsequent Events
−Removed: Termination of 364 Day Facility and Reinstatement of Leverage Ratio Covenant
−Removed: 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.
−Removed: 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.
−Removed: The remainder of the 2018 Credit Facility remains in full force and effect.
−Removed: 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”).
−Removed: 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.
−Removed: On May 26, 2021 (the “Election Date”), the Company delivered to the Administrative Agent the certificate required to terminate the Applicable Period.
−Removed: 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.
−Removed: Share Repurchase Authorization
−Removed: The Company also announced that its previously suspended share-repurchase program will be reinstated.
−Removed: The availability under this program remains at $ 400 million.
−Removed: 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.
−Removed: The program may be suspended or discontinued at any time.
+Added: Release of Collateral Related to the 2018 Credit Facility
+Added: On April 2, 2022, the Company’s senior long-term, unsecured debt was upgraded to investment grade by two of the three specified rating agencies for two consecutive full fiscal quarters, meeting the criteria for the release of the collateral securing the Company’s obligations under the 2018 Credit Facility.
+Added: On April 3, 2022, the Company notified the Administrative Agent under its 2018 Credit Facility that it had met the conditions for the release of the collateral securing the Company’s obligations under the 2018 Credit Facility.
+Added: The collateral, which consists of substantially all of the assets and certain registered intellectual property of the Company and certain of its subsidiaries, was released effective April 3, 2022.
+Added: See Note 11 for additional details regarding the Company’s Credit Facility.
Net Investment Hedges
−Removed: 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.
−Removed: Dollar and the Euro.
+Added: During the first quarter of Fiscal 2023, the Company modified multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $ 1 billion to hedge its net investment in Euro denominated subsidiaries and Japanese-Yen denominated subsidiaries.
+Added: The modification of these hedges resulted in the Company receiving $ 59 million in cash during the first quarter of Fiscal 2023.
These contracts have been designated as net investment hedges.
+Added: Senior Notes Credit Rating Upgrade
+Added: On April 21, 2022, Moody’s Investor Services upgraded the Company’s credit rating to Baa1 from Baa2 in relation to the Company’s senior unsecured notes.
+Added: As a result, as of May 1, 2022 the Senior Notes now bear interest at a fixed rate equal to 4.25 % per year, payable semi-annually.
+Added: See Note 11 for additional details regarding the Company’s Senior Notes.
+Added: Share Repurchase Program
+Added: On June 1, 2022, the Company announced that its Board of Directors has terminated the Company’s existing $ 1.0 billion share repurchase program, with $ 500 million of availability remaining, and authorized a new share repurchase program pursuant to which the Company may, from time to time, repurchase up to $ 1.0 billion of its outstanding ordinary shares within a period of two years from the effective date of the program.
+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.
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.