10-K 1 y58691e10-k.txt TIFFANY & CO. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------- FORM 10-K --------- ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JANUARY 31, 2002 COMMISSION FILE NUMBER: 1-9494 TIFFANY & CO. (Exact name of registrant as specified in its charter) DELAWARE 13-3228013 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 727 FIFTH AVENUE, NEW YORK, NY 10022 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 755-8000 --------- Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON TITLE OF EACH CLASS WHICH REGISTERED ------------------- ------------------------ Common Stock, $.01 par value New York Stock Exchange Stock Purchase Rights New York Stock Exchange
--------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] --------- STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE REGISTRANT. THE AGGREGATE MARKET VALUE SHALL BE COMPUTED BY REFERENCE TO THE PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE BID AND ASKED PRICES OF SUCH STOCK, AS OF A SPECIFIED DATE WITHIN 60 DAYS PRIOR TO THE DATE OF FILING. As of March 22, 2002 the aggregate market value of voting stock held by non-affiliates was $5,186,490,809. See Item 5. Market for Registrant's Common Equity and Related Stockholder Matters below. --------- INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 145,505,077 shares of Common Stock outstanding as of March 22, 2002. --------- The following documents are incorporated by reference into this Annual Report on Form 10-K: Registrant's Annual Report to Stockholders for the Fiscal Year Ended January 31, 2002 (Parts I, II and IV) and Registrant's Proxy Statement Dated April 10, 2002 (Part III). -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PART I ITEM 1. BUSINESS (a) General history of business. Registrant (also referred to as the "Company") is the parent corporation of Tiffany and Company ("Tiffany"). Charles Lewis Tiffany founded Tiffany's business in 1837. He incorporated Tiffany in New York in 1868. Registrant acquired Tiffany in 1984 and completed the initial public offering of Registrant's Common Stock in 1987. (b) Financial information about industry segments. Registrant's segment information for the fiscal years ended January 31, 2002, 2001 and 2000 is incorporated by reference from Registrant's Annual Report to Stockholders for the Fiscal Year ended January 31, 2002 (Note R. "Segment Information"). Executive Officers of the Company evaluate the performance of the Company's assets on a consolidated basis. Therefore, separate financial information for the Company's assets on a segment basis is not available. (c) Narrative description of business. As used below, the terms "Fiscal 1999", "Fiscal 2000" and "Fiscal 2001" refer to the fiscal years ended on January 31, 2000, 2001 and 2002, respectively. Registrant is a holding company, and conducts all business through its subsidiary corporations. Products Registrant's principal product categories are fine jewelry, timepieces, sterling silver goods, china, crystal, stationery, writing instruments, fragrances and personal accessories. Registrant offers an extensive selection of TIFFANY & CO. brand jewelry at a wide range of prices. In Fiscal 1999, 2000 and 2001, approximately 75%, 78% and 79%, respectively, of Registrant's net sales were attributable to jewelry. See Merchandise Purchasing, Manufacturing and Raw Materials below. Designs are developed by employees, suppliers, independent designers and independent "name" designers. See Designer Licenses below. In addition to jewelry, the Company sells TIFFANY & CO. brand merchandise in the following categories: timepieces and clocks; sterling silver merchandise, including flatware, hollowware (tea and coffee services, bowls, cups and trays), trophies, key holders, picture frames and desk accessories; stainless steel flatware; crystal, glassware, china and other tableware; custom engraved stationery; writing instruments; and fashion accessories. Fragrance products are sold under the trademarks TIFFANY and TIFFANY FOR MEN. Tiffany also sells other -Page 2- brands of timepieces and tableware in its U.S. stores. Registrant also offers a line of commercial glassware under the JUDEL trademark. Distribution and Marketing Channels of Distribution For financial reporting purposes, Registrant categorizes its sales as follows: U.S. Retail consists of retail sales transacted in company-operated stores in the United States.(1) (see U.S. Retail below); Direct Marketing consists of sales in the United States through a staff of specialized sales personnel who concentrate on business clients and of sales through direct mail catalogs and through Registrant's Web site at www.tiffany.com (see Direct Marketing below); and International Retail consists of both retail and wholesale sales to customers located outside the United States, as well as a limited amount of business sales and internet sales (see International Retail below). U.S. Retail Fifth Avenue Store The Fifth Avenue store in New York accounts for a significant portion of the Company's sales and is the focal point for marketing and public relations efforts. Approximately 13%, 12% and 11% of total Company net sales for Fiscal 1999, 2000 and 2001, respectively, were attributable to the New York store's retail sales. During Fiscal 2001, Tiffany completed its first phase of a four- year renovation project, which include a 25% increase of its selling space and the reconfiguration of two floors of office space for customer service and special exhibitions. Over the next three years, renovations of other existing selling space will be completed. ------------------------------------- (1) In fiscal years 1999 and 2000 the Company discontinued its wholesale sales of jewelry, tabletop product and fragrances to third party retailers in the United States. This change has not had a significant impact on sales or profits and has enabled the Company to better manage the TIFFANY & CO. brand and to focus management efforts on Company-operated stores in the U.S. -Page 3- U.S. Branch Stores At January 31, 2002 Tiffany had 43 branch stores in the United States. The following table identifies the location and year of opening of each U.S. branch store: U.S. BRANCH STORE OPENINGS
YEAR STORE LOCATION YEAR OPENED STORE LOCATION OPENED -------------- ----------- -------------- ----- San Francisco, California 1963 Charlotte, North Carolina 1997 Beverly Hills, California 1964 Chestnut Hill, Massachusetts 1997 Houston, Texas 1964 Cincinnati, Ohio 1997 Chicago, Illinois 1966 Honolulu, Hawaii (Hilton) + 1997 Atlanta, Georgia 1969 Palo Alto, California 1997 Dallas, Texas 1982 Denver, Colorado 1998 Boston, Massachusetts 1984 Honolulu, Hawaii (Surfrider)+ 1998 Costa Mesa, California 1988 Las Vegas, Nevada 1998 Philadelphia, Pennsylvania 1990 Manhasset, New York 1998 Vienna, Virginia 1990 Seattle, Washington 1998 Palm Beach, Florida 1991 Scottsdale, Arizona 1998 Honolulu, Hawaii (Ala Moana) 1992 Century City, California 1999 San Diego, California 1992 Dallas (NorthPark), Texas 1999 Troy, Michigan 1992 Boca Raton, Florida 1999 Bal Harbour, Florida 1993 Tamuning, Guam++ 1999 Maui, Hawaii 1994 Old Orchard, (Skokie) IL 2000 Oak Brook, Illinois 1994 Maui, Hawaii (Wailea) 2000 King of Prussia, Pennsylvania 1995 Greenwich, Connecticut 2000 Short Hills, New Jersey 1995 Portland, Oregon 2000 White Plains, New York 1995 Tampa, Florida 2001 Hackensack, New Jersey 1996 Santa Clara (San Jose), California 2001 Chevy Chase, Maryland 1996
+ Closing Fiscal 2002, to be replaced by new Honolulu location ++ Operated by Mitsukoshi (U.S.A.), Inc. until March 1999 Most of the U.S. branch stores display a representative selection of merchandise, but none maintains the extensive selection carried by the New York store. Beginning in 2002, branch stores of approximately 5,000 square feet in size will feature a new store design and display primarily fine jewelry, with a select assortment of china and crystal giftware. One or more branch stores will be opened in resort areas and will be approximately 3,000 square feet in size. Management currently contemplates the opening of new branch stores in the United States at the rate of approximately three to five per year. Tiffany has entered into lease agreements to open additional branches in 2002 in East Hampton, New York, Orlando, Florida, Bellevue, Washington, St. Louis, Missouri and Honolulu, Hawaii. See Item 2. Properties below for further information concerning U.S. Retail store leases. U.S. Retail branch stores range in size from approximately 800 to 16,000 gross -Page 4- square feet and total approximately 345,000 gross square feet. Prior to 1993, an average of approximately 45% of the floor space in each branch store was devoted to retail selling. Newer stores generally range from approximately 4,000 to 7,000 gross square feet and are designed to devote approximately 60-70% of total floor space to retail selling. Direct Marketing Business Sales Division Business Sales Division sales executives call on business clients throughout the United States, selling products drawn from the retail product line and items specially developed or sourced for the business market, including trophies and items designed for the particular customer. Price allowances are given to business customers for volume purchases. Business Sales Division customers purchase for business gift giving, employee service and achievement recognition awards, customer incentives and other purposes. Products and services are marketed through an organization of approximately 160 persons through advertising in newspapers and business periodicals and through the publication of special catalogs. Business gift purchases may also be made through the Company's Web site at www.tiffany.com. Catalogs Tiffany also distributes catalogs of selected merchandise to its proprietary list of mail and telephone customers and to mailing lists rented from third parties. Four seasonal SELECTIONS(R) catalogs are published, supplemented by COLLECTIONS and other catalogs. Internet The Company distributes a selection of approximately 2,400 products through its Web site at www.tiffany.com. The Company expects to continue its expansion of merchandise selection and services on the site based on customer needs. Prospective buyers are able to purchase merchandise suitable for wedding gifts from TIFFANY & CO. registries or from a selection of TIFFANY & CO. products offered through the WeddingChannel.com website. The Company anticipates that further enhancements will be made to these services to allow registries to be edited and managed online. -Page 5- The following table sets forth certain data with respect to mail, telephone and internet order operations for the periods indicated:
Fiscal Year 1999 2000 2001 ---- ---- ---- Number of names on catalog mailing and internet lists at 1,103,700 1,254,000 1,497,407 year-end (consists of customers who purchased by mail, telephone or internet prior to the applicable date)* Total catalog mailings during fiscal year (in millions): 26.0 24.7 25.9 Total mail, telephone or internet orders received during 364,150 406,680 491,916 fiscal year*:
*Prior years have been restated to include orders received from e-commerce customers, which commenced in November 1999. International Retail Stores and boutiques included in the International Retail channel of distribution are listed on the following page. In these locations, which are operated by Registrant's subsidiary corporations, Registrant records as sales the retail price charged to retail customers. For locations operated by third-party distributors, Registrant records as sales the wholesale price charged to the third-party distributors. See International Wholesale Distribution below. -Page 6- International Locations
LOCATIONS OPERATED BY REGISTRANT'S SUBSIDIARIES ----------------------------------------------- JAPAN ASIA-PACIFIC EXCLUDING JAPAN * Operated by Registrant's Subsidiaries with Mitsukoshi, Ltd. --------------------------------------------------------- ---------------------------------- Abeno, Kintetsu Department Store Australia: Melbourne, Collins Street Chiba, Mitsukoshi Department Store * Australia: Melbourne, Crown Casino Fukuoka, Mitsukoshi * Australia: Sydney, Chifley Plaza Fukuoka, Mitsukoshi Department Store * China, Beijing, The Palace Hotel Ginza, Mitsukoshi Department Store * Hong Kong: Causeway Bay, Lee Gardens Hiroshima, Mitsukoshi Department Store * Hong Kong: Landmark Center Ikebukuro, Mitsukoshi Department Store * Hong Kong: Pacific Place Kagoshima, Mitsukoshi Department Store * Hong Kong: Peninsula Hotel Kanazawa, Mitsukoshi * Hong Kong: Sogo Department Store Kashiwa, Takashimaya Department Store Korea: Seoul, Galleria Department Store Kawasaki , Saikaya Department Store Korea: Seoul, Hyundai Department Store Kobe, Daimaru Department Store Korea: Seoul, Lotte Downtown Department Store Kobe, Mitsukoshi Department Store * Korea: Pusan, Paradise Hotel Kochi, Daimaru Department Store Malaysia: Suria KLCC Kokura, Izutsuya Department Store Singapore: Ngee Ann City Koriyama, Usui Department Store Singapore: Raffles Hotel Kumamoto, Tsuruya Department Store Taiwan: Kaohsiung, Hanshin Department Store Kurashiki, Mitsukoshi Department Store * Taiwan: Tainan, Mitsukoshi Department Store Kyoto, Daimaru Department Store Taiwan: Taipei, Regent Hotel Kyoto, Takashimaya Department Store Taiwan: Taipei, Sogo Department Store Matsuyama, Mitsukoshi Department Store* Nagano, Mitsukoshi * -------------------------------------------- Nagoya Hoshigaoka, Mitsukoshi Dept. Store * EUROPE Nagoya Sakae, Mitsukoshi Department Store* -------------------------------------------- Nagoya, Hilton Hotel * Nagoya, Takashimaya Department Store+ England: London, Old Bond Street Nihonbashi, Mitsukoshi Department Store * England: London, The Royal Exchange Niigata, Mitsukoshi Department Store * England: London, Harrod's Department Store Oita, Tokiwa Department Store France: Paris Okayama, Tenmaya Department Store Germany: Frankfurt Okinawa, Mitsukoshi Department Store * Germany: Munich Osaka, Mitsukoshi Department Store * Italy: Florence Osaka, Takashimaya Department Store Italy: Milan Sagamihara, Isetan Department Store Italy: Rome Sapporo, Mitsukoshi Department Store * Switzerland: Zurich Sendai, Mitsukoshi Department Store * Shinjuku, Isetan Department Store+ --------------------------------------------- Shinjuku, Mitsukoshi Department Store * Shinsaibashi, Daimaru Department Store Shizuoka, Matsuzakaya Department Store CANADA AND CENTRAL/SOUTH AMERICA Tachikawa, Isetan Department Store Takamatsu, Mitsukoshi Department Store * --------------------------------------------- Tokyo Bay, Ikspiari * Tokyo, Ginza Flagship Store * Canada: Toronto Tottori , Daimaru Department Store Mexico: Mexico City, Palacio Store, Polanco Umeda, Daimaru Department Store Mexico: Mexico City, Palacio Store, Perisur Utsunomiya, Tobu Department Store Mexico: Mexico City, Masaryk Yokohama, Landmark Plaza, Mitsukoshi * Brazil: Sao Paulo Yokohama, Mitsukoshi Department Store * +Location opened March 2002 --------------------------------------------------------- ----------------------------------------------
-Page 7- Business with Mitsukoshi On August 1, 2001, Registrant's wholly-owned subsidiary, Tiffany & Co. Japan Inc. ("Tiffany-Japan") entered into agreements with Mitsukoshi Ltd. of Japan ("Mitsukoshi"). These agreements continue long-standing commercial relationships that Registrant and its affiliated companies have had with Mitsukoshi. (Historical Background) On June 12, 1993, Registrant, through its affiliated companies, entered into a distribution agreement (the "93 Agreement") with Mitsukoshi. The 93 Agreement significantly changed the way Registrant and Mitsukoshi had done business in Japan, which, from 1972 until that time, had consisted of sales to Mitsukoshi for resale. As a consequence of the 93 Agreement, Tiffany-Japan commenced retail sales operations in Japan. In the fiscal years ended January 31, 2000, 2001 and 2002, respectively, total Japan sales represented 27%, 28% and 28% of Registrant's net sales. Sales made in TIFFANY & CO. boutiques located in Mitsukoshi's stores constituted 16%, 16% and 15% of Registrant's net sales in those years. (The 93 Agreement and the 2001 Agreement) On August 1, 2001, Tiffany-Japan and Mitsukoshi entered into an agreement (the "2001 Agreement"). The 2001 Agreement replaced the 93 Agreement, which remained in effect until November 1, 2001. The 2001 Agreement will expire on January 31, 2007. Under the 93 and 2001 Agreements Tiffany-Japan had and has merchandising and marketing responsibilities in the operation of TIFFANY & CO. boutiques in Mitsukoshi's stores and other locations throughout Japan. Mitsukoshi acts for Tiffany-Japan in the sale of merchandise owned by Tiffany-Japan and Registrant recognizes as revenues the retail price charged to the ultimate consumer in Japan. Tiffany-Japan holds inventories for sale, establishes retail prices, bears the risk of currency fluctuations, provides one or more brand managers in each boutique, controls merchandising and displays within the boutiques, manages inventory and controls and funds all advertising and publicity programs with respect to TIFFANY & CO. merchandise. Mitsukoshi provides and maintains boutique facilities and assumes retail credit and certain other risks. Risk of inventory loss varies depending on whether the boutique is a "Standard Boutique" or a "Concession Boutique." Mitsukoshi bears responsibility for loss or damage to the merchandise in Standard Boutiques and Tiffany-Japan bears the risk in Concession Boutiques. Mitsukoshi provides retail staff in Standard Boutiques and Tiffany-Japan provides retail staff in Concession Boutiques. At present, there are 19 Standard Boutiques and eight Concession Boutiques. Under the 2001 Agreement two existing boutiques will be closed and 10 will be converted from Standard to Concession Boutiques over the term of the Agreement. Under the 93 Agreement, Mitsukoshi retained a portion (the "basic portion") of the net retail sales made in TIFFANY & CO Boutiques. The basic portion varied depending on the type -Page 8- of Boutique and the retail price of the merchandise involved. Generally, however, Mitsukoshi's basic portion was 27% in Standard Boutiques and 20% in Concession Boutiques. These basic portions will remain in effect under the 2001 Agreement through January 31, 2003. From February 1, 2003 through the expiration of the 2001 Agreement, Mitsukoshi's basic portion will be reduced by four percent in each category and increased by a factor that varies between zero and three percent depending upon the historic sales performance of the individual boutique in question. Thus, the highest basic portion available to Mitsukoshi in any Boutique during this time period will be 26% and Registrant expects that Mitsukoshi's average portion, across all Boutiques, will not be less than 24%. Under the 93 Agreement, Tiffany-Japan also paid Mitsukoshi an incentive fee of five percent of the amount by which boutique sales increased year-to-year, calculated on a per-boutique basis. Under the 2001 Agreement, the five-percent incentive fee will be calculated only upon the increase above "Target Sales." Target Sales means a year-to-year increase that is greater than the lesser of (i) 10% or (ii) a sales goal set by Tiffany-Japan. Under the 93 Agreement, Mitsukoshi had the following exclusive rights in Tokyo: TIFFANY & CO. boutiques could be established only in Mitsukoshi's stores and TIFFANY & CO. brand jewelry could be sold only in such boutiques, or in the "Flagship Store" (see below). Outside Tokyo, Registrant was not restricted in its right to establish TIFFANY & CO. boutiques or sell TIFFANY & CO. merchandise. Under the 2001 Agreement, Registrant is free to establish TIFFANY & CO. boutiques and sell TIFFANY & CO. merchandise throughout Japan, including in Tokyo. (The FSS Agreement and the 2001 FSS Agreement) Mitsukoshi, Tiffany-Japan and Tiffany entered into an Agreement dated February 23, 1996 (the "FSS Agreement") governing the operation of a 7,700 square foot TIFFANY & CO. store in premises (the "Premises") located in Tokyo's Ginza shopping district (the "Flagship Store"). Tiffany-Japan completed, at its cost, all necessary improvements to prepare the Premises and delivered the Premises to Mitsukoshi in May 1996. In June 1999, by Supplemental Agreement to the FSS Agreement, the parties expanded the Premises to approximately 12,000 square feet. The Premises are leased by a third party landlord to Tiffany-Japan for a fixed annual rental. On August 1, 2001, Mitsukoshi and Tiffany-Japan entered into the "2001 FSS Agreement" which replaced the FSS Agreement. Under both the FSS Agreement and the 2001 FSS Agreement, the Premises are subleased by Tiffany-Japan to Mitsukoshi on a percentage-of-sales basis (the "Sublease"). Tiffany-Japan bears all costs of operating the Premises. Tiffany-Japan selects and furnishes merchandise for display in the Flagship Store, prices the merchandise for retail sale, bears all risk of loss until the merchandise is sold to a customer and determines all issues of display, packaging, signage and advertising. Mitsukoshi acts for Tiffany-Japan in the sale of the merchandise, collects and holds the sales proceeds, makes credit available to customers, bears all credit losses and provides its point-of-sale transaction processing system (the "POS System"). Tiffany-Japan provides all necessary staff other than employees provided by Mitsukoshi in connection with the POS -Page 9- System. Management of the Flagship Store, other than with respect to the POS System, is the responsibility of Tiffany-Japan. After compensating Tiffany-Japan on a percentage-of-sales basis for Sublease rent and staffing, Mitsukoshi is allocated a percentage of net sales. Under the FSS Agreement, Mitsukoshi's percentage allocation was 8.3%. Under the 2001 FSS Agreement, Mitsukoshi's percentage allocation is 3% The 2001 FSS Agreement is scheduled to expire on September 30, 2002, but will be extended until September 30, 2005, and then again to January 31, 2007, subject to renewal of the lease for the Premises by Tiffany-Japan and the landlord for the Premises. (Other Transactions) On February 2, 1998, Tiffany purchased, as a going concern, the TIFFANY & CO. business operated on the island of Oahu, Hawaii, by an affiliate of Mitsukoshi under agreement with Tiffany. The transaction was structured as a purchase of assets. Tiffany paid a cash price of $8.1 million and agreed to make contingent payments equal to 3.75% of certain sales made by Tiffany on the island of Oahu after the date of the purchase through January 31, 2003. On March 19, 1999, Tiffany purchased, as a going concern, the TIFFANY & CO. business operated in Guam by an affiliate of Mitsukoshi under agreement with Tiffany. The transaction was structured as a cash-for-stock purchase of the affiliate, under which Tiffany assumed all of the assets and liabilities of the affiliate. Tiffany paid a total cash price of $7.0 million. From 1989 through January 1999, Mitsukoshi Limited of Japan and its affiliated companies held a significant portion of the Registrant's Common Stock. As of January 31, 1999, Mitsukoshi's holdings represented 12.3% of Registrant's outstanding shares. In February 1999, Mitsukoshi sold all of its holdings of Registrant's Common Stock through a public offering. International Wholesale Distribution Wholesale distribution of selected TIFFANY & CO. merchandise is also made through independent distributors in the countries listed on the following page. Registrant records as sales the wholesale price charged to the third-party distributor. Multiple doors are indicated in parentheses.(2) ----------------------------- (2) In fiscal years 2000 and 2001 the Company discontinued wholesale sales of jewelry and fragrance in Europe. This change has not had a significant impact on sales or profits and has enabled the Company to better manage the TIFFANY & CO. brand and to focus management efforts on Company-operated stores in Europe. -Page 10-
INTERNATIONAL WHOLESALE DISTRIBUTION ------------------------------------ ASIA-PACIFIC, MIDDLE EAST AND RUSSIA CARIBBEAN ------------------------------------ --------- Australia (2) Morocco Aruba (3) Jamaica (5) Bahrain New Zealand Bahamas (3) Puerto Rico (3) Egypt Oman (2) Barbados St. Maarten (2) Guam Philippines (2) Bermuda St. Thomas (2) Hong Kong Qatar (4) Dominican Republic (2) Turks and Caicos (2) India Russia (7) Grand Cayman (2) Indonesia Saipan Japan (7) Saudi Arabia (5) Korea Singapore Kuwait (2) Syria Lebanon (3) United Arab Emirates (4) CANADA CENTRAL/LATIN AND SOUTH AMERICA ------ ------------------------------- Calgary Ottawa Argentina (4) Panama Montreal Vancouver Brazil Paraguay (4) Colombia Venezuela (2) Costa Rica Guatemala Honduras (2) Mexico (6)
Management anticipates continued expansion of international wholesale distribution in Central/Latin/South American, Caribbean and Asia-Pacific regions as markets are developed. Expansion of Worldwide Retail Operations Registrant expects to continue to open stores in locations outside the United States. However, the timing and success of this program will depend upon many factors, including Registrant's ability to obtain suitable retail space on satisfactory economic terms and the extent of consumer demand for TIFFANY & CO. products in overseas markets. Such demand varies from market to market. The Company's commercial relationship with Mitsukoshi and Mitsukoshi's ability to continue as a leading department store operator have been and will continue to be substantial factors in the Company's continued success in Japan. Presently, TIFFANY & CO. boutiques are located in 27 Mitsukoshi department stores and other retail locations operated with Mitsukoshi in Japan. The Company also operates 22 boutiques primarily in department stores other than Mitsukoshi, in locations within Japan but outside of Tokyo, and plans to open more. In recent years, the Japanese department store industry has, in general, suffered declining sales. There is a risk that such financial difficulties will force consolidations or store closings. -Page 11- Should one or more Japanese department store operators, such as Mitsukoshi, elect or be required to close one or more stores now housing a TIFFANY & CO. boutique, the Company's sales and earnings would be reduced while alternate premises are being obtained. Tiffany began its ongoing program of international expansion through proprietary retail stores in 1986 with the establishment of the London store. Company-operated international TIFFANY & CO. stores and boutiques range in size from approximately 400 to 14,000 gross square feet and total approximately 224,000 gross square feet devoted to retail purposes. The following chart details the growth in the Company's stores and boutiques since Fiscal 1987 on a worldwide basis:
Worldwide Retail Locations Operated by Registrant's Subsidiary Companies ------------------------------------------------------------------------ Americas and Europe Asia-Pacific ------------------- ------------ End of Canada, Fiscal: U.S. Central/Latin/South Europe Japan Elsewhere Total Americas ---------------- --------------- ----------------- ---------------- --------------------- ---------------------- -------- 1987 8 0 2 0 0 10 1988 9 0 3 0 1 13 1989 9 0 5 0 2 16 1990 12 0 5 0 3 20 1991 13 1 7 0 4 25 1992 16 1 7 7 4 35 1993 16 1 6 37** 5 65 1994 18 1 6 37 7 69 1995 21 1 6 38 9 75 1996 23 1 6 39 12 81 1997 28 2 7 42 17 96 1998 34 2 7 44 17 104 1999 38 3 8 44 17 110 2000 42 4 8 44 21 119 2001 44 5 10 47 20 126
**Prior to July 1993, many TIFFANY & CO. boutiques in Japan were operated by Mitsukoshi (ranging from 21 in 1987 to 29 in 1993). See Business with Mitsukoshi above. -Page 12- Advertising and Promotion Tiffany regularly advertises its business, primarily in newspapers and magazines. In Fiscal 1999, 2000 and 2001, Tiffany spent approximately $57.3 million, $65.4 million, and $68.1 million, respectively, on worldwide advertising, net of amounts contributed by vendors to Tiffany, but inclusive of cooperative advertising funds contributed by Tiffany to third party distributors and amounts expended to print and mail catalogs and brochures. Public Relations (promotional) activity is also a significant aspect of Registrant's business. Management believes that Tiffany's image is enhanced by a program of charity sponsorships, grants and merchandise donations. Donations are also made to The Tiffany & Co. Foundation, a private foundation organized to support other 501(c)(3) charitable organizations with efforts concentrated in the preservation of the arts and environmental conservation. The Company also engages in a program of retail promotions and media activities to maintain consumer awareness of the Company and its products. Each year, Tiffany publishes its well-known Blue Book which showcases fine jewelry and other merchandise. Tiffany's window displays are another important aspect of Tiffany's promotional efforts. John Loring, Tiffany's Design Director, is the author of numerous books featuring TIFFANY & CO. products. Registrant considers these and other promotional efforts important in maintaining Tiffany's image as an arbiter of taste and style. Trademarks The designations TIFFANY(R) and TIFFANY & CO.(R) are the principal trademarks of Tiffany, as well as serving as tradenames. Through its subsidiaries, the Company has obtained and is the proprietor of trademark registrations for TIFFANY and TIFFANY & CO. as well as the TIFFANY BLUE BOX(R) and the color TIFFANY BLUE(R) for a variety of product categories in the United States and in other countries. Over the years, Tiffany has maintained a program to protect its trademarks and has instituted legal action where necessary to prevent others either from registering or using marks which are considered to create a likelihood of confusion with the Company or its products. Tiffany has been generally successful in such actions and management considers that its United States trademark rights in TIFFANY and TIFFANY & CO. are strong. However, use of the designation TIFFANY by third parties (often small companies) on unrelated goods or services, frequently transient in nature, may not come to the attention of Tiffany or may not rise to a level of concern warranting legal action. Despite the general fame of the TIFFANY and TIFFANY & CO. name and mark for the Company's products and services, Tiffany is not the sole person entitled to use the name TIFFANY in every category in every country of the world; third parties have registered the name TIFFANY in the United States in the food services category, and in a number of foreign countries in respect of certain product categories (including, in a few countries, the categories of fragrance, cosmetics, jewelry, eyeglass frames, clothing and tobacco products) under circumstances where Tiffany's rights were not sufficiently clear under local law, and/or where management concluded that Tiffany's foreseeable business interests did not warrant the expense of litigation. -Page 13- Designer Licenses Tiffany has been the sole licensee for jewelry designed by Elsa Peretti, Paloma Picasso and the late Jean Schlumberger since 1974, 1980 and 1956, respectively. In 1992, Tiffany acquired trademark and other rights necessary to sell the designs of the late Mr. Schlumberger under the TIFFANY-SCHLUMBERGER trademark. Ms. Peretti and Ms. Picasso retain ownership of copyrights for their designs and of their trademarks and exercise approval rights with respect to important aspects of the promotion, display, manufacture and merchandising of their designs. Tiffany is required by contract to devote a portion of its advertising budget to the promotion of their respective products; each is paid a royalty by Tiffany for jewelry and other items designed by them and sold under their respective names. Written agreements exist between Ms. Peretti and Tiffany and between Ms. Picasso and Tiffany but may be terminated by either party following six months notice to the other party. Tiffany is the sole retail source for merchandise designed by Ms. Peretti worldwide; however, she has reserved by contract the right to appoint other distributors in markets outside the United States, Canada, Japan, Singapore, Australia, Italy, the United Kingdom, Switzerland and Germany. The designs of Ms. Peretti accounted for 15% of the Company's net sales in Fiscal 1999, 2000 and 2001. Merchandise designed by Ms. Picasso accounted for 3% of the Company's net sales in Fiscal 1999, 2000 and 2001. Registrant's operating results could be adversely affected were it to cease to be a licensee of either of these designers or should its degree of exclusivity in respect of their designs be diminished. Merchandise Purchasing, Manufacturing and Raw Materials Merchandise offered for sale by the Company is supplied from Tiffany's jewelry and silver goods manufacturing facility in Cumberland, Rhode Island and Tiffany's workshops in New York City and Pelham, New York; Parsippany, New Jersey; Salem, West Virginia; and Paris, France and through purchases and consignments from others. The following table shows Tiffany's sources of merchandise, based on cost, for the periods indicated:
Fiscal Years 1999 2000 2001 ---- ---- ---- Produced by Tiffany 37% 46% 44% Purchased from others 63 54 56 --- --- --- Total 100% 100% 100% === === ===
The preceding figures include the cost of precious gems incorporated in such merchandise. Approximately 39% of the merchandise purchased from others in Fiscal 2001 was manufactured outside the United States. Gems and precious metals used in making Tiffany's jewelry may be purchased from a variety of sources. For the most part, purchases of such materials are from suppliers with which Tiffany enjoys long-standing relationships. -Page 14- Products containing one or more diamonds of varying sizes, including diamonds used as accents, side-stones and center-stones, accounted for approximately 38%, 40% and 38% of Tiffany's net sales in Fiscal 1999, 2000 and 2001, respectively. Products containing one or more diamonds of one carat or larger accounted for less than 10% of net sales in each of those years. Tiffany purchases cut diamonds principally from four key vendors. Were trade relations between Tiffany and one or more of these vendors to be disrupted, the Company's sales would be adversely affected in the short term until alternative supply arrangements could be established. Diamonds of one carat or greater of the quality the Company demands are, on a relative basis, more difficult to acquire than smaller diamonds. Established sources for smaller stones would be more easily replaced in the event of a disruption in supply than would established sources for larger-sized stones. Except as noted above, Tiffany believes that there are numerous alternative sources for gems and precious metals and that the loss of any single supplier would not have a material adverse effect on its operations. In 2001 the Company entered into a joint arrangement and distribution contract with Aber Diamond Corporation ("Aber"), a publicly-traded company headquartered in Canada. In 1999, the Company made a 14.7% equity investment ($71 million) in Aber by purchasing 8 million unregistered shares of its common stock. It is expected that Tiffany's alliance with Aber, a 40% participant of the Diavik Diamonds Project in Northwest Canada, will enable Tiffany to secure a significant portion of its future diamond needs once production commences. Production is expected to commence in the first half of Fiscal 2003. Presently, the supply and price of rough (uncut and unpolished) diamonds in the principal world markets have been and continue to be significantly influenced by a single entity, the Diamond Trading Corporation (the "DTC"), of De Beers Centenary AG, a Swiss corporation. The DTC supplies approximately 65% of the world market for rough, gem-quality diamonds, notwithstanding that its historical ability to control supplies has been somewhat diminished due to changing politics in diamond-producing countries and revised contractual arrangements with independent mine operators. Through its affiliates, the DTC continues to exert a significant influence on the demand for polished diamonds through its advertising and marketing efforts throughout the world. Tiffany does not purchase rough diamonds; in consequence, Tiffany does not purchase directly from the DTC. Some, but not all, of Tiffany's suppliers do purchase directly from the DTC. It is estimated that 50% of the diamonds that Tiffany purchases have their source with the DTC. The availability and price of diamonds to the DTC and Tiffany's suppliers may be, to some extent, dependent on the political situation in diamond-producing countries, the opening of new mines and the continuance of the prevailing supply and marketing arrangements for rough diamonds. Sustained interruption in the supply of rough diamonds or an over-abundance of supply or a substantial change in the marketing arrangements described above could adversely affect Tiffany and the retail jewelry industry as a whole. Direct purchasers from the DTC may, in the future, sell cut and polished diamonds marked with the DTC's proprietary trademark. Such a practice, coupled with a change in the marketing and advertising policies of the DTC's affiliates, could affect consumer demand for diamonds that do not bear the DTC's trademark. Tiffany may or may not carry such branded diamonds in the future. Additionally, an affiliate of the DTC has announced a joint venture with an affiliate of a major luxury goods retailer for the purpose of retailing diamond jewelry. This joint venture is likely to become a competitor of Tiffany. -Page 15- Increasing attention has been focused within the last few years on the issue of "conflict" diamonds. Conflict diamonds are extracted from war-torn regions and sold by rebel forces to fund insurrection. Allegations have been made in the press that diamonds are used as a source to further terrorist activities. Concerned participants in the diamond trade, including Tiffany and non-government organizations, seek to exclude such diamonds, which represent a small fraction of the world's supply, from legitimate trade through an international system of certification and legislative initiatives. It is expected that such efforts, if successful, will not substantially affect the supply of diamonds. However, in the near term, efforts by these non-governmental organizations to increase consumer awareness of the issue and encourage legislative response could affect consumer demand for diamonds. Finished jewelry is purchased from approximately 100 manufacturers, most of which have long-standing relationships with Tiffany. Tiffany believes that there are alternative sources for most jewelry items; however, due to the craftsmanship involved in certain designs, Tiffany would have difficulty in finding readily available alternatives in the short term. TIFFANY & CO. brand clocks and components for timepieces are manufactured and assembled by third parties. Approximately 50% of net watch sales during Fiscal 2001 were attributable to a single manufacturer. Tiffany contracts with a single manufacturer to produce its silver flatware patterns from Tiffany's proprietary tools and dies by use of Tiffany's traditional manufacturing techniques. Likewise, engraved stationery is purchased from a single manufacturer. Loss of any of these manufacturers could result in the unavailability of timepieces, silver flatware or engraved stationery, as the case may be, during the period necessary for Tiffany to arrange for new production. Competition Registrant encounters significant competition in all of its product lines from other third-party providers, some of which specialize in just one area in which the Company is active. Many of the Company's competitors have established reputations for style and expertise similar to that of the Company and compete on the basis of value. Other jewelers and retailers compete primarily through advertised price promotion. The Company competes on the basis of quality and value and does not engage in price promotional advertising. See Merchandise Purchasing, Manufacturing and Raw Materials above. The international marketplace for the Company's products is highly competitive. Although the Company believes that the name TIFFANY & CO. is known internationally, and although Tiffany did operate retail stores in London and Paris prior to World War II, the Company did not have a retail presence in Europe in the post-war era until 1986. Accordingly, consumer awareness of Tiffany & Co. and its products is not as strong in Europe as in the U.S. or in Japan, where Tiffany has distributed its products for many years. The Company expects that its overseas stores will continue to experience intense competition from established retailers in international cities where TIFFANY & CO. stores are or may eventually be located. Registrant also faces increasing competition in the area of direct marketing. A growing number of direct sellers compete for access to the same mailing lists of known purchasers of luxury goods. In marketing service awards and business gifts to corporations and other organizations, the Company faces numerous competitors who sell a wide variety of products at a greater price range -Page 16- than the Company, which has chosen to offer a more limited selection in order to adhere to its established quality standards. Tiffany currently distributes selected merchandise through its Web site at www.tiffany.com and anticipates continuing competition in this area as the technology evolves. Tiffany does not currently offer diamond engagement jewelry through its Web site, while certain of Tiffany's competitors do. Nonetheless, Tiffany will seek to maintain and improve its position in the Internet marketplace by refining and expanding its merchandise selection and services. Seasonality As a jeweler and specialty retailer, the Company's business is seasonal in nature, with the fourth quarter typically representing a proportionally greater percentage of annual sales, earnings from operations and cash flow. Management expects such seasonality to continue. Employees As of January 31, 2002, the Registrant's subsidiary corporations employed an aggregate of approximately 5,938 full-time and part-time persons. Of those employees, 4,798 are employed in the United States. Of Tiffany's total employees, approximately 2,378 persons are salaried employees, 617 are engaged in manufacturing and 2,985 are retail store personnel. None of the Company's employees is represented by a union. Registrant believes that relations with its employees are good. ITEM 2. PROPERTIES Registrant both owns and leases its principal operating facilities and occupies its various store premises under lease arrangements which are generally on a two to ten-year basis. New York Store In November 1999, Tiffany repurchased the land and building housing its flagship store at 727 Fifth Avenue in New York City. Prior to its repurchase, the building had been leased by Tiffany since 1984. Constructed for Tiffany in 1940, the building was designed to be a retail store for the Company and is believed to be well located for this function. Currently, approximately 40,000 gross square feet of this 124,000 square foot building are devoted to retail sales, with the balance devoted to administrative offices, certain product services, jewelry manufacturing and storage. During Fiscal 2001, Tiffany completed its first phase of a four-year renovation project, which include a 25% increase of its selling space and the reconfiguration of two floors of office space for customer service and special exhibitions. Over the next three years, renovations of other existing selling space will be completed. Customer Service Center In 1995, Tiffany entered into a lease of undeveloped property in Parsippany, New Jersey, in order to construct and occupy a new distribution facility. In April 1997, construction of the -Page 17- "Customer Service Center" ("CSC") on that property was completed and Tiffany commenced operations. The CSC is a combined warehouse, distribution, light manufacturing, computing and office center. To meet increased demand, the computer and office center areas were expanded during Fiscal 2001. In January 2001, Tiffany exercised its right under the lease to purchase the CSC for a scheduled purchase price. This capital lease buyout was completed on January 31, 2002. Registrant believes that the CSC has been properly designed to handle worldwide distribution functions and that it is suitable for that purpose. The CSC currently comprises approximately 370,000 square feet, of which approximately 186,000 square feet are devoted to office and computer operations use, with the balance devoted to warehousing, shipping, receiving, light manufacturing, merchandise processing and other distribution functions. In anticipation of growth in sales volume and company-operated stores, in Fiscal 2001 Tiffany entered into a ground lease of undeveloped property in Hanover Township, New Jersey in order to construct and occupy an additional facility to manage the warehousing and processing of direct-to-customer orders and to perform other distribution functions. Construction of the facility has commenced and occupancy is expected in Fiscal 2003. The proposed facility will be approximately 266,000 square feet, of which approximately 34,500 square feet will be devoted to office use, the balance to warehousing, shipping, receiving, merchandise processing and other warehouse functions. When the new facility becomes operational, the CSC will be devoted to store replenishment and wholesale support activities. Manufacturing Facility - Cumberland, Rhode Island In January 2000 Tiffany entered into a purchase agreement for the purchase of undeveloped property in Cumberland, Providence County, Rhode Island in order to construct and occupy a 100,000 square foot jewelry and silver goods manufacturing facility.(3) In May 2001, construction of the facility was completed and Tiffany commenced operations. -------- (3) In September 2000 Tiffany entered into agreements with the Rhode Island Industrial Facilities Corporation to purchase an industrial development bond for the purpose of financing the continued construction and equipping of the manufacturing facility. In connection with the issuance of the Bond, Tiffany transferred title to the land, building and improvements, and leased back the project. Under the Lease Agreement, Tiffany's rental payments will be used to pay the principal and interest on the Bond. Upon payment in full of the Bond, Tiffany has the option to purchase the facility at a price of One Thousand ($1,000.00) Dollars. -Page 18- Branch and Subsidiary Retail Store Leases Set forth below is the expiration date for each of Tiffany's existing branch and subsidiary retail store leases (and, where applicable, optional renewal terms):
U.S. BRANCH STORE LEASES ------------------------ CITY STATE/TERR. LOCATION EXPIRATION DATE RENEWAL OPTIONS ---- ----------- -------- --------------- --------------- Atlanta GA Phipps Plaza Shopping Center July 31, 2010 Bal Harbour FL Bal Harbour Shops May 31, 2003 Beverly Hills CA Two Rodeo Drive October 7, 2005 Two five-year terms Boca Raton FL Town Center January 31, 2010 One five-year term Boston MA Copley Place July 31, 2009 Two five-year terms Century City CA Century City Shopping Center June 30, 2009 Charlotte NC SouthPark Mall December 31, 2007 One five-year term Chestnut Hill MA The Atrium January 31, 2008 One five-year term Chevy Chase MD 5500 Wisconsin Avenue January 31, 2006 Chicago IL 730 North Michigan Avenue October 20, 2012 Two five-year terms Cincinnati OH Fountain Place November 30, 2012 Two five-year terms Costa Mesa CA South Coast Plaza January 31, 2004 One five-year term Dallas TX The Galleria May 31, 2009 Dallas TX NorthPark Center May 31, 2009 One five-year term Denver CO Cherry Creek Shopping Center January 31, 2008 One five-year term Greenwich CT 140 Greenwich Avenue July 31, 2010 Two five-year terms Hackensack NJ Riverside Square Mall September 30, 2006 Honolulu HI Ala Moana Center January 31, 2011 Honolulu HI Hilton Hawaiian Village December 31, 2002 One five-year term Honolulu HI Moana Surfrider January 31, 2003 Houston TX Galleria Post Oak September 30, 2006 King of Prussia PA King of Prussia Plaza November 30, 2005 One five-year term Las Vegas NV Bellagio March 1, 2008 One ten-year term Manhasset NY Americana Shopping Center June 9, 2008 Maui HI Whalers Village July 31, 2004 Maui HI Wailea November 30, 2010 One five-year term Oak Brook IL Oakbrook Center April 30, 2009 Two five-year terms Old Orchard IL Old Orchard Shopping Center April 30, 2010 One five-year term Palm Beach FL 259 Worth Avenue May 31, 2007 Two five-year terms Palo Alto CA Stanford Shopping Center May 31, 2007 Philadelphia PA The Bellevue June 30, 2010 One five-year term Portland OR Pioneer Place December 31, 2010 One five-year term San Diego CA Fashion Valley Shopping Center December 31, 2007 One five-year term San Francisco CA Union Square November 1, 2010 One ten-year term Santa Clara (San Jose) CA Westfield Shoppingtown Valley Fair January 31, 2012 Scottsdale AZ Fashion Square December 31, 2008 One five-year term Seattle WA Pacific Place October 28, 2008 Two five-year terms Short Hills NJ The Mall at Short Hills January 31, 2005 One five-year term Tampa FL International Plaza January 31, 2012 One five-year term Tamuning Guam Tumon Sands Plaza September 30, 2003 Troy MI The Somerset Collection September 30, 2007 Vienna VA Fairfax Square March 31, 2010 One five-year term White Plains NY The Westchester March 31, 2005 One five-year term
-Page 19-
INTERNATIONAL BRANCH STORE LEASES --------------------------------- COUNTRY CITY LOCATION EXPIRATION DATE RENEWAL OPTIONS ------- ---- -------- --------------- --------------- Australia Sydney Chifley Tower October 18, 2004 One five-year term Australia Melbourne Crown Casino May 7, 2002 Australia Melbourne 267 Collins Street October 31, 2005 Three five-year terms Brazil Sao Paulo Shopping Center Iguatemi January 1, 2006 Two five-year terms Canada Toronto 85 Bloor Street West August 31, 2006 One seven-year term England London 25 Old Bond Street March 24, 2016 England London The Royal Exchange August 31, 2016 Three five-year terms France Paris 6 Rue de la Paix April 1, 2011 Germany Frankfurt 20 Goethestrasse January 31, 2011 One ten-year term Germany Munich Residenzstrasse 11 January 31, 2004 One five-year term Hong Kong Causeway Bay Lee Gardens June 30, 2003 Hong Kong The Landmark May 31, 2005 Hong Kong Kowloon The Peninsula February 29, 2004 Hong Kong Pacific Place October 31, 2003 Italy Florence Via Tornabuoni December 31, 2007 Italy Milan Via della Spiga October 31, 2005 Italy Rome Via Del Babuino December 31, 2007 One six-year term+ Japan Tokyo Ginza October 24, 2005 One three-year term Korea Pusan Paradise Hotel September 20, 2003 One two-year option Malaysia Kuala Lumpur Suria KL City Centre November 30, 2002 Two three-year terms Mexico Mexico City Masaryk May 31, 2004 Two three-year terms Singapore Raffles Hotel September 15, 2003 Singapore Ngee Ann City September 14, 2005 One one-year term Switzerland Zurich Bahnhofstrasse 14 September 30, 2005 Taiwan Taipei Regent Hotel April 30, 2006
+ Renewal subject to conditions imposed by Italian law, including right of landlord to occupy premises for its own use. New Store Leases In addition to the U.S. leases described herein on page 19, Tiffany has entered into the following new leases for domestic stores expected to open in 2002: a 15-year lease for a 5,500 square foot store at Bellevue Square in Bellevue, Washington, a 10-year lease for a 4,800 square foot store at Plaza Frontenac in St. Louis, Missouri, a 10-year lease for a 5,700 square foot store in The Mall at Millenia in Orlando, Florida, a 10-year lease for a 3,300 square foot store at 53 Main Street in East Hampton, New York and a 15-year lease for a 10,100 square foot store on Kalakaua Avenue, Waikiki, Honolulu, Hawaii. ITEM 3. LEGAL AND ENVIRONMENTAL PROCEEDINGS Registrant and Tiffany are from time to time involved in routine litigation incidental to the conduct of Tiffany's business, including proceedings to protect its trademark rights, litigation with parties claiming infringement of their intellectual property rights by Tiffany, litigation instituted by persons alleged to have been injured upon premises within Registrant's control and litigation with present and former employees. Although litigation with present and former employees is routine and incidental to the conduct of Tiffany's business, as well as for any business employing significant numbers of U.S.-based employees, such litigation can result in large monetary awards when a civil -Page 20- jury is allowed to determine compensatory and/or punitive damages for actions claiming discrimination on the basis of age, gender, race, religion, disability or other legally protected characteristic or for termination of employment that is wrongful or in violation of implied contracts. However, Registrant believes that no litigation currently pending to which it or Tiffany is a party or to which its properties are subject will have a material adverse effect on its financial position, results of operations or cash flows. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of the Company's security holders during the fourth quarter of the fiscal year ended January 31, 2002. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Registrant are:
NAME AGE POSITION YEAR JOINED TIFFANY ---- --- -------- ------------------- William R. Chaney 69 Chairman of the Board of Directors 1980 Michael J. Kowalski 50 President and Chief Executive Officer 1983 James E. Quinn 50 Vice Chairman 1986 Beth O. Canavan 47 Executive Vice President 1987 James N. Fernandez 46 Executive Vice President and 1983 Chief Financial Officer Victoria Berger-Gross 46 Senior Vice President -- Human Resources 2001 Patrick B. Dorsey 51 Senior Vice President -- General Counsel 1985 and Secretary Linda A. Hanson 41 Senior Vice President -- Merchandising 1990 Fernanda M. Kellogg 55 Senior Vice President -- Public Relations 1984 Caroline D. Naggiar 44 Senior Vice President -- Marketing 1997 John S. Petterson 43 Senior Vice President -- Operations 1988
William R. Chaney. Mr. Chaney, Chairman of Tiffany since August 1984, joined Tiffany in January 1980 as a member of its Board. From August 1984 through January 31, 1999, he also served as Chief Executive Officer of Registrant. Prior to 1984 he served as an executive officer of Avon Products Inc. Mr. Chaney also serves on the board of directors of the Bank of New York, the Atlantic Mutual Companies and Provident Holdings, Inc. Bank of New York is Tiffany's principal banking relationship - Page 21 - serving as Administrative Agent and a lender under the Registrant's revolving credit facility and as trustee of the Tiffany and Company Pension Plan. Michael J. Kowalski. Mr. Kowalski was appointed President on January 18, 1996 and served as Chief Operating Officer from January 1997 until his appointment as Chief Executive Officer on February 1, 1999, succeeding William R. Chaney. He has served on Registrant's Board of Directors since January 1995. He previously served as Executive Vice President from March 19, 1992, with overall responsibility in the following areas: merchandising, marketing, advertising, public relations and product design. He has held a variety of merchandising management positions since joining Tiffany in 1983 as Director of Financial Planning. James E. Quinn. Mr. Quinn joined Tiffany in July 1986 as Vice President of branch sales for the Company's corporate sales operations and has since had various responsibilities for sales management and operations. He was promoted to Executive Vice President on March 19, 1992 and assumed responsibility for retail and corporate sales for the Americas in 1994. In January 1995 he became a member of Registrant's Board of Directors. In January 1998 he was appointed Vice Chairman. He has responsibility for worldwide sales. Mr. Quinn is a member of the board of directors of BNY Hamilton Funds, Inc. and Mutual of America Capital Management. At the request of the Registrant, Mr. Quinn also serves on the board of directors of Little Switzerland, Inc., a specialty retailer of brand name watches, jewelry and giftware in which the Registrant holds a 45% equity interest. Beth O. Canavan. Ms. Canavan joined Tiffany in May 1987 as Director of New Store Development. She later held the positions of Vice President, Retail Sales Development in 1990, Vice President and General Manager of the New York Store in 1992 and Eastern Regional Vice President in 1994. In 1997, she assumed the position of Senior Vice President for U.S. Retail. In January 2000, she was promoted to Executive Vice President responsible for retail sales activities in the U.S. and Canada, retail store expansion and customer service. In May 2001, Ms. Canavan also assumed responsibility for direct sales and business sales activities in the U.S. and Canada. James N. Fernandez. Mr. Fernandez joined Tiffany in October 1983 and has held various positions in financial planning and management prior to his appointment as Senior Vice President-Chief Financial Officer in April 1989. In January 1998, he was promoted to Executive Vice President-Chief Financial Officer, at which time his responsibilities were expanded to include distribution in addition to his responsibilities for the accounting, treasury, investor relations, information technology, financial planning and internal audit functions. At the request of the Registrant, Mr. Fernandez serves on the board of directors of Aber Diamond Corporation, a publicly-traded company in which the Registrant holds a 14.7% equity interest. Aber is a 40% participant of the Diavik Diamonds Project in Northwest Canada. Victoria Berger-Gross. Dr. Berger-Gross joined Tiffany in February 2001 as Senior Vice President - Human Resources. Prior to joining Tiffany, she served as Senior Vice President & Director of Human Resources at Lehman Brothers from May 2000, Senior Director - Human Resources at Bertelsmann A.G.'s BMG Entertainment from March 1998 and Vice President - Organizational Effectiveness at Personnel Decisions International from January 1990. Patrick B. Dorsey. Mr. Dorsey joined Tiffany in July 1985 as General Counsel and Secretary. At the request of the Registrant, Mr. Dorsey serves on the board of directors of Little Switzerland, Inc., - Page 22 - a specialty retailer of brand name watches, jewelry and giftware in which the Registrant holds a 45% equity interest. Linda A. Hanson. Ms. Hanson joined Tiffany in April 1990 as a management associate. She assumed her current responsibilities in July 1997. Fernanda M. Kellogg. Ms. Kellogg joined Tiffany in October 1984 as Director of Retail Marketing. She assumed her current responsibilities in January 1990. Caroline D. Naggiar. Ms. Naggiar joined Tiffany in June 1997 as Vice President - Marketing Communications. She assumed her current responsibilities in February 1998. Prior to joining Tiffany, she served as Vice President - Management Representative of McCann-Erickson Advertising from January 1993, where she was responsible for the Tiffany account. John S. Petterson. Mr. Petterson joined Tiffany in 1988 as a management associate. He was promoted to Senior Vice President - Corporate Sales in May 1995 and in February 2000 his responsibilities were expanded to include Direct Mail and the E-Commerce business. In May 2001, Mr. Petterson assumed the new role of Senior Vice President - Operations, with responsibility for worldwide distribution, customer service and security activities. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Registrant's Common Stock is traded on the New York Stock Exchange. In consolidated trading, the high and low selling prices per share for shares of such Common Stock for Fiscal 2000 were:
Fiscal 2000 High Low ----------- ------ ------ First Fiscal Quarter $42.75 $27.25 Second Fiscal Quarter $38.75 $27.09 Third Fiscal Quarter $45.38 $32.00 Fourth Fiscal Quarter $43.56 $26.75
In consolidated trading, the high and low selling prices per share for shares of such Common Stock for Fiscal 2001 were:
Fiscal 2001 High Low ----------- ------ ------ First Fiscal Quarter $37.16 $25.12 Second Fiscal Quarter $38.25 $31.55 Third Fiscal Quarter $36.60 $19.90 Fourth Fiscal Quarter $36.59 $22.86
- Page 23 - On March 22, 2002, the high and low selling prices quoted on such exchange were $36.40 and $35.75, respectively. On March 22, 2002 there were 3,416 record holders of Registrant's Common Stock. It is Registrant's policy to pay a quarterly dividend of $0.04 per share of Common Stock, subject to declaration by Registrant's Board of Directors. In Fiscal 2000, a dividend of $0.03 per share of Common Stock was paid on April 10, 2000. The preceding dividend per share has been adjusted for a two-for-one split of the Common Stock in July 2000. On May 18, 2000, Registrant's Board of Directors declared an increase in the regular quarterly dividend from $0.03 per share to $0.04 per share of Common Stock. Thereafter, dividends of $0.04 per share of Common Stock were paid on July 20, 2000, October 10, 2000 and January 10, 2001. In Fiscal 2001, dividends of $0.04 per share of Common Stock were paid on April 10, 2001, July 10, 2001, October 10, 2001 and January 10, 2002. In calculating the aggregate market value of the voting stock held by non-affiliates of the Registrant shown on the cover page of this Report on Form 10-K, 1,735,408 shares of Registrant's Common Stock beneficially owned by the executive officers and directors of the Registrant (exclusive of shares which may be acquired on exercise of employee stock options) were excluded, on the assumption that certain of those persons could be considered "affiliates" under the provisions of Rule 405 promulgated under the Securities Act of 1933. ITEM 6. SELECTED FINANCIAL DATA Incorporated by reference from Registrant's Annual Report to Stockholders for the Fiscal Year ended January 31, 2002, page 16. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Incorporated by reference from Registrant's Annual Report to Stockholders for the Fiscal Year ended January 31, 2002, pages 17-26. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Incorporated by reference from Registrant's Annual Report to Stockholders for the Fiscal Year ended January 31, 2002, pages 27-48. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE NONE. - Page 24 - PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Incorporated by reference from Registrant's Proxy Statement dated April 10, 2002, pages 7-11 and 26-29. ITEM 11. EXECUTIVE COMPENSATION Incorporated by reference from Registrant's Proxy Statement dated April 10, 2002, pages 12-24. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Incorporated by reference from Registrant's Proxy Statement dated April 10, 2002, pages 4-7. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Incorporated by reference from Registrant's Proxy Statement dated April 10, 2002, pages 17 and 26-29. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K (a) List of Documents Filed As Part of This Report: 1. Financial Statements: Data incorporated by reference from the 2001 Annual Report to Stockholders of Tiffany & Co. and Subsidiaries: Report of Independent Accountants (following this Form 10-K) Consolidated Balance Sheets as of January 31, 2002 and 2001 Consolidated Statements of Earnings for the years ended January 31, 2002, 2001, and 2000 Consolidated Statements of Stockholders' Equity and Comprehensive Earnings for the years ended January 31, 2002, 2001 and 2000 Consolidated Statements of Cash Flows - Page 25 - for the years ended January 31, 2002, 2001 and 2000 Notes to consolidated financial statements 2. Financial Statement Schedules: The following financial statement schedule should be read in conjunction with the consolidated financial statements incorporated by reference herein: II. Valuation and qualifying accounts and reserves. All other schedules have been omitted since they are neither applicable nor required, or because the information required is included in the consolidated financial statements and notes thereto. - Page 26 - 3. Exhibits: The following exhibits have been filed with the Securities and Exchange Commission but are not attached to copies of this Form 10-K other than complete copies filed with said Commission and the New York Stock Exchange: Exhibit Description ------- ----------- 3.1 Restated Certificate of Incorporation of Registrant. Incorporated by reference from Exhibit 3.1 to Registrant's Report on Form 8-K dated May 16, 1996. 3.1a Amendment to Certificate of Incorporation of Registrant. Incorporated by reference from Exhibit 3.1 to Registrant's Report on Form 8-K dated May 20, 1999. 3.1b Amendment to Certificate of Incorporation of Registrant dated May 18, 2000. Incorporated by reference from Exhibit 3.1b to Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 2001. 3.2 By-Laws of Registrant (as last amended July 19, 2001). 4.1 Amended and Restated Rights Agreement Dated as of September 22, 1998 by and between Registrant and ChaseMellon Shareholder Services L.L.C., as Rights Agent. Incorporated by reference from Exhibit 4.1 to Registrant's Report on Form 8-A/A dated September 24, 1998. 10.5 Designer Agreement between Tiffany and Paloma Picasso dated April 4, 1985. Incorporated by reference from Exhibit 10.5 filed with Registrant's Registration Statement on Form S-1, Registration No. 33-12818 (the "Registration Statement"). 10.101 Form of Note Purchase Agreement, including the form of 7.52% Senior Notes due 2003 issued thereunder at par by Registrant on January 31, 1993 for an aggregate principal amount of $51,500,000. Incorporated by reference from Exhibit 10.101 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1993. 10.120 Watch Supplier Agreement as of October 30, 1995 by and among Tiffany and Tiffany & Co. Watch Center S.A. and TWF SA. Incorporated by reference from Exhibit 10.120 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1996. 10.122 Agreement dated as of April 3, 1996 among American Family Life Assurance Company of Columbus, Japan Branch, Tiffany & Co. Japan, Inc., Japan Branch, and Registrant, as Guarantor, for yen 5,000,000,000 Loan Due 2011. Incorporated by reference from Exhibit 10.122 filed with Registrant's Report on Form 10-Q for the Fiscal quarter ended April 30, 1996. 10.122a Amendment No. 1 to the Agreement referred to in Exhibit 10.122 above, dated November 18, 1998. Incorporated by reference from Exhibit 10.122a filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. - Page 27 - 10.123 Agreement made effective as of February 1, 1997 by and between Tiffany and Elsa Peretti. Incorporated by reference from Exhibit 10.123 to Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1997. 10.126 Form of Note Purchase Agreement between Registrant and various institutional note purchasers with Schedules B, 5.14 and 5.15 and Exhibits 1A, 1B, and 4.7 thereto, dated as of December 30, 1998 in respect of Registrant's $60 million principal amount 6.90% Series A Senior Notes due December 30, 2008 and $40 million principal amount 7.05% Series B Senior Notes due December 30, 2010. Incorporated by reference from Exhibit 10.126 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.128 Translation of Loan Agreement between Tiffany & Co. Japan Inc. and the Fuji Bank, Ltd., Hong Kong Branch dated 22 October 1999, Guaranty issued in connection therewith by the Registrant and Agreement on Bank Transactions referenced in the aforesaid Loan Agreement; Schedule to Master Agreement dated as of October 18, 1999 between The Chase Manhattan Bank and Tiffany & Co. Japan Inc. (made with reference to International Swap Dealers Association, Inc. Master Agreement form copyrighted 1992), Guaranty dated October 18, 1999 issued in connection with such Master Agreement by Tiffany and Company, Tiffany & Co. International and Registrant in favor of The Chase Manhattan Bank and Confirmation issued October 29, 1999 by The Chase Manhattan Bank. Incorporated by reference from Exhibit 10.128 filed with Registrant's Report on Form 10-Q for the Fiscal quarter ended October 31, 1999. 10.129 Agreement made the 1st day of August 2001 by and between Tiffany & Co. Japan Inc. and Mitsukoshi Limited. Incorporated by reference from Exhibit 10.128 filed with Registrant's Report on Form 8-K dated August 1, 2001. 10.130 Credit Agreement dated as of November 5, 2001, by and among Registrant, Tiffany and Company, Tiffany & Co. International, each other Subsidiary of Registrant that is a Borrower and is a signatory thereto and The Bank of New York, as the Swing Line Lender, as the Issuing Bank, as a Lender, and as Administrative Agent, ABN AMRO Bank N.V., The Chase Manhattan Bank, The Dai-ichi Kangyo Bank Ltd., Firstar Bank, NA, and Fleet National Bank, Fleet Precious Metals Inc. (collectively, as a Lender). Incorporated by reference from Exhibit 10.130 filed with Registrant's Report on Form 10-Q for the Fiscal quarter ended October 31, 2001. 10.131 Guaranty Agreement dated as of November 5, 2001, with respect to the Credit Agreement (see Exhibit 10.129 above) by and among Registrant, Tiffany and Company, Tiffany & Co. International, and Tiffany & Co. Japan Inc. and The Bank of New York, as Administrative Agent. Incorporated by reference from Exhibit 10.131 filed with Registrant's Report on Form 10-Q for the Fiscal quarter ended October 31, 2001. 13.1 Annual Report to Stockholders for Fiscal Year Ended January 31, 2002 (pages 16-48 of such Annual Report have been filed in electronic format). 21.1 Subsidiaries of Registrant. - Page 28 - 23.1 Consent of PricewaterhouseCoopers LLP, independent accountants. Executive Compensation Plans and Arrangements Exhibit Description 4.3 Registrant's 1998 Employee Incentive Plan and standard terms of stock option award (transferable and non-transferable). Incorporated by reference from Exhibit 4.3 to Registrant's Registration Statement on Form S-8, file number 333-67723, filed November 23, 1998. 4.3a Standard terms of stock option award (transferable and non-transferable) under Registrant's 1998 Employee Incentive Plan, as revised January 21, 1999. Incorporated by reference from Exhibit 4.3a filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 4.4 Registrant's 1998 Directors Option Plan. Incorporated by reference from Exhibit 4.3 to Registrant's Registration Statement on Form S-8, file number 333-67725, filed November 23, 1998. 4.4a Standard terms of stock option award (transferable non-qualified option) under Registrant's 1998 Directors Option Plan, as revised January 21, 1999. Incorporated by reference from Exhibit 4.4a filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.3 Registrant's 1986 Stock Option Plan and terms of stock option agreement, as last amended on July 16, 1998. Incorporated by reference from Exhibit 10.3 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.25 Amended and Restated Deferred Compensation Agreement originally made effective December 31, 1989 by and between William R. Chaney and Tiffany and Company, and subsequently amended February 8, 1999. Incorporated by reference from Exhibit 10.25 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.49 Form of Indemnity Agreement, approved by the Board of Directors on March 19, 1987. Incorporated by reference from Exhibit 10.49 to the Registration Statement. 10.60 Registrant's 1988 Director Stock Option Plan and form of Stock Option agreement, as last amended on November 21, 1996. Incorporated by reference from Exhibit 10.60 to Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1997. 10.105 Group Long Term Disability Insurance Policy issued by The Mutual Benefit Life Insurance Company. Policy Number: G53,152. Incorporated by reference from Exhibit 10.105 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1993. 10.106 Amended and Restated Tiffany and Company Executive Deferral Plan originally made effective October 1, 1989, as amended effective October 1, 1998. Incorporated by - Page 29 - reference from Exhibit 10.106 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.108 Registrant's Amended and Restated Retirement Plan for Non-Employee Directors originally made effective January 1, 1989, as amended through January 21, 1999. Incorporated by reference from Exhibit 10.108 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.109 Summary of informal incentive cash bonus plan for managerial employees. Incorporated by reference from Exhibit 10.109 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1993. 10.113 Tiffany and Company Pension Plan, as last amended effective December 21, 1998. Incorporated by reference from Exhibit 10.113 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.114 1994 Tiffany and Company Supplemental Retirement Income Plan. Incorporated by reference from Exhibit 10.114 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1994. 10.115 1994 Form of Split Dollar Life Insurance Agreement entered into by Tiffany and Company and certain Executive Officers including form of Assignment of Life Insurance Policy as Collateral and Rider No. 1 to 1994 Form of Split Dollar Life Insurance Agreement entered into by Tiffany and Company and certain Executive Officers. Incorporated by reference from Exhibit 10.115 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1995. 10.115a Riders Nos. 2 and 3, dated October 18, 1998 and March 20, 1999, respectively to Split Dollar Life Insurance Agreements between and among William R. Chaney and Tiffany and Company, and respectively, the 1994 Chaney Family Trust u/a 2/23/94 and the Babette C. Chaney et al. Trust u/a 2/23/94. Incorporated by reference from Exhibit 10.115a filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.127 Retention Agreements dated March 30, 1999 between and among Registrant and Tiffany and, respectively, each of the following executive officers: Michael J. Kowalski, James E. Quinn, James N. Fernandez and Patrick B. Dorsey and Appendices I to III to each of those Agreements. Incorporated by reference from Exhibit 10.127 filed with Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 1999. 10.127a Retention Agreements dated March 13, 2001 between and among Registrant and Tiffany and, respectively, each of the following executive officers: Beth O. Canavan, Linda A. Hanson, Fernanda M. Kellogg, Caroline D. Naggiar, John S. Petterson and Victoria Berger-Gross and Appendices I to III to each of those Agreements. Incorporated by reference from Exhibit 10.127a to Registrant's Report on Form 10-K for the Fiscal Year ended January 31, 2001. - Page 30 - REGISTRANT WILL FURNISH COPIES OF ANY OF THE FOREGOING EXHIBITS TO ANY REGISTERED HOLDER OF THE REGISTRANT'S COMMON STOCK UPON PAYMENT OF A FEE OF $.15 PER PAGE FURNISHED, WHICH FEE REPRESENTS REGISTRANT'S EXPENSES IN FURNISHING SUCH EXHIBIT. - Page 31 - (b) Reports on Form 8-K. On November 14, 2001, Registrant filed a Report on Form 8-K reporting sales and earnings for the three-month period ended October 31, 2001. On January 8, 2002, Registrant filed a Report on Form 8-K reporting the issuance of a press release announcing preliminary unaudited sales figures for the two-month period ended December 31, 2001. On February 28, 2002, Registrant filed a Report on Form 8-K reporting the issuance of a press release announcing its sales and earnings for the three-month period and Fiscal Year ended January 31, 2002. Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TIFFANY & CO. (Registrant) Date: April 10, 2002 By: /s/ Michael J. Kowalski ------------------------------------- Michael J. Kowalski President and Chief Executive Officer - Page 32 - 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 date indicated. By: /s/ William R. Chaney By: /s/ Michael J. Kowalski ------------------------------ --------------------------------------- William R. Chaney Michael J. Kowalski Chairman of the Board President and Chief Executive Officer (director) (principal executive officer) (director) By: /s/ James N. Fernandez By: /s/ Warren S. Feld ------------------------------ --------------------------------------- James N. Fernandez Warren S. Feld Executive Vice President Vice President (principal financial officer) (principal accounting officer) By: /s/ Rose Marie Bravo By: /s/ James E. Quinn ------------------------------ --------------------------------------- Rose Marie Bravo James E. Quinn Director Vice Chairman (director) By: /s/ Samuel L. Hayes, III By: /s/ William A. Shutzer ------------------------------ --------------------------------------- Samuel L. Hayes, III William A. Shutzer Director Director By: /s/ Charles K. Marquis By: /s/ Abby F. Kohnstamm ------------------------------ --------------------------------------- Charles K. Marquis Abby F. Kohnstamm Director Director April 10, 2002 - Page 33 - PRICEWATERHOUSECOOPERS LLP REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES -------------------------------- To the Board of Directors & Shareholders of Tiffany & Co. Our audits of the consolidated financial statements referred to in our report dated February 27, 2002 appearing in the fiscal 2001 Annual Report to Shareholders of Tiffany & Co. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 14(a)(2) of this Form 10-K. In our opinion, the financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. /s/ PricewaterhouseCoopers LLP New York, New York February 27, 2002 - Page 34 - TIFFANY & CO. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column A Column B Column C Column D Column E --------- -------- -------- -------- -------- Additions ---------------------------- Balance at Charged to beginning costs and Charged to Balance at end Description of period expenses other accounts Deductions of period ----------- --------- --------- -------------- ---------- --------- Year Ended January 31, 2002: Reserves deducted from assets: Accounts receivable allowances: Doubtful accounts $ 3,890,470 $ 1,694,924 -- $ 2,789,994(a) $ 2,795,400 Sales returns 4,082,816 -- -- -- 4,082,816 Allowance for inventory liquidation and obsolescence 18,394,815 10,084,907 -- 9,646,558(b) 18,833,164 Allowance for inventory shrinkage 3,013,949 3,797,454 -- 3,292,558(c) 3,518,845 LIFO reserve 15,942,286 3,028,295 -- -- 18,970,581
------------------- (a) Uncollectible accounts written off. (b) Liquidation of inventory previously written down to market. (c) Physical inventory losses. TIFFANY & CO. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column A Column B Column C Column D Column E -------- -------- -------- -------- -------- Additions ---------------------------- Balance at Charged to beginning costs and Charged to Balance at end Description of period expenses other accounts Deductions of period ----------- --------- -------- -------------- ---------- --------- Year Ended January 31, 2001: Reserves deducted from assets: Accounts receivable allowances: Doubtful accounts $ 5,137,719 $ 1,210,547 -- $ 2,457,796(a) $ 3,890,470 Sales returns 4,578,657 -- -- 495,841 4,082,816 Allowance for inventory liquidation and obsolescence 14,160,281 17,665,831 -- 13,431,297(b) 18,394,815 Allowance for inventory shrinkage 2,625,788 3,052,347 -- 2,664,186(c) 3,013,949 LIFO reserve 13,492,173 2,450,113 -- -- 15,942,286
------------------- (a) Uncollectible accounts written off. (b) Liquidation of inventory previously written down to market. (c) Physical inventory losses. TIFFANY & CO. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Column A Column B Column C Column D Column E -------- -------- -------- -------- -------- Additions ---------------------------- Balance at Charged to beginning costs and Charged to Balance at end Description of period expenses other accounts Deductions of period ----------- --------- -------- -------------- ---------- --------- Year Ended January 31, 2000: Reserves deducted from assets: Accounts receivable allowances: Doubtful accounts $ 4,680,955 $ 2,173,026 -- $ 1,716,262(a) $ 5,137,719 Sales returns 3,425,457 1,153,200 -- -- 4,578,657 Allowance for inventory liquidation and obsolescence 15,654,894 4,274,113 -- 5,768,726(b) 14,160,281 Allowance for inventory shrinkage 1,788,742 3,921,920 -- 3,084,874(c) 2,625,788 LIFO reserve 15,870,000 -- -- 2,377,827 13,492,173
------------------- (a) Uncollectible accounts written off. (b) Liquidation of inventory previously written down to market. (c) Physical inventory losses. EXHIBIT INDEX SEE PAGES 27 THROUGH 30 FOR A COMPLETE LIST OF EXHIBITS FILED, INCLUDING EXHIBITS INCORPORATED BY REFERENCE FROM PREVIOUSLY FILED DOCUMENTS. EXHIBIT DESCRIPTION ------- ----------- 3.2 By-Laws of Registrant (as last amended July 19, 2001). 13.1 Annual Report to Stockholders for Fiscal Year Ended January 31, 2002 (pages 16-48 of such Annual Report have been filed in electronic format). 21.1 Subsidiaries of Registrant. 23.1 Consent of PricewaterhouseCoopers LLP, independent accountants. - Page -