1
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                       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, 1995        COMMISSION FILE NUMBER: 1-9494
 
                                 TIFFANY & CO.
             (Exact name of registrant as specified in its charter)
 
                                             
                  DELAWARE                                       13-3228013
        (State or other jurisdiction                          (I.R.S. Employer
      of incorporation or organization)                      Identification No.)

              727 FIFTH AVENUE                                      10022
                NEW YORK, NY                                     (Zip Code)
  (Address of principal executive offices)
(212) 755-8000 (Registrant's telephone number, including area code) ------------------------ SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON 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 24, 1995 the aggregate market value of voting stock held by non-affiliates was $391,767,665.94. 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: 15,728,184 shares of Common Stock outstanding as of March 24, 1995. ------------------------ 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, 1995 (Parts I, II and IV) and Registrant's Proxy Statement Dated April 7, 1995 (Part III). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PART I ITEM 1. BUSINESS (a) General development of business. Registrant (also referred to as the "Company") is the parent corporation of Tiffany and Company ("Tiffany"). The Tiffany business was founded in 1837 and was incorporated in New York in 1868. On May 5, 1987 Registrant completed the initial public offering of its Common Stock. (b) Financial information about industry segments. Industry segment information is not provided because the Registrant operates in a single industry segment: retail and wholesale distribution of fine jewelry, gift and fashion accessory items. Incorporated by reference from Registrant's Annual Report to Stockholders for the fiscal year ended January 31, 1995 (Footnote P. "Foreign Operations") is the Registrant's geographic segment information for the fiscal years ended January 31, 1995, 1994 and 1993. (c) Narrative description of business. As used below, the terms "Fiscal 1992", "Fiscal 1993" and "Fiscal 1994" refer to the fiscal years ended on January 31, 1993, 1994 and 1995, respectively. Products Registrant's principal product categories are fine jewelry, timepieces, sterling silverware, china, crystal, stationery, writing instruments, fragrance, leather goods, scarves and ties. Registrant offers an extensive selection of fine jewelry at a wide range of prices. In Fiscal 1992, 1993 and 1994, approximately 60%, 65% and 67%, respectively, of Registrant's net sales were attributable to jewelry. See Merchandise Purchasing, Manufacturing and Raw Materials below. Subject to approval by Tiffany's design department, designs are developed by employees, suppliers, independent designers and independent "name" designers. See Designer Licenses below. TIFFANY & CO. brand watches and clocks as well as other brands of watches are sold. The range of TIFFANY & CO. brand sterling silver merchandise includes flatware, hollowware (tea and coffee services, bowls, cups and trays), trophies, key holders, picture frames and desk accessories. Crystal, glassware, china and other tableware, is sold under the trademarks of well-known manufacturers, as well as under the TIFFANY & CO. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 2 - 3 trademark. Custom engraved stationery, writing instruments, handbags, wallets, scarves, men's ties and fashion accessories are sold under the TIFFANY & CO. trademark. Fragrance products are sold under the trademarks TIFFANY and TIFFANY FOR MEN. Distribution and Marketing Channels of Distribution Registrant sells through three channels of distribution, and reports its sales as follows: U.S. Retail consists of retail sales from stores in the United States and wholesale sales to selected independent retailers in North America. U.S. Retail sales include wholesale sales of fragrance products in the United States, Canada and in the Caribbean region. 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 sales through direct mail catalogs. See Direct Marketing below; and International Retail consists of both retail and wholesale sales to customers located outside the United States. See International Retail below. U.S. Retail The Fifth Avenue store in New York accounts for the largest portion of the Company's sales and is the focal point for marketing and public relations efforts. Approximately 24%, 21% and 19% of total Company net sales for Fiscal 1992, 1993 and 1994, respectively, were attributable to the New York store's retail sales. Management believes that the New York retail store will continue to account for a substantial portion of the Company's sales. Approximately 32,450 gross square feet in the New York building are devoted to retail selling. Prior to September 1963, when the first branch store was opened in San Francisco, the New York store was Tiffany's sole retail location in the United States. Since that time, branch stores have been opened in the following cities: Houston (1964), Beverly Hills (1964), Chicago (1966), Atlanta (1969), Dallas (1982), Boston (1984), Costa Mesa (1988), Vienna, Virginia (Washington D.C. area) (1990), Philadelphia (1990), Palm Beach (1991), San Diego (1992), Honolulu (1992), Troy, Michigan (1992), Bal Harbour (1993), Maui, Hawaii (1994) and Oak Brook, Illinois (1994). The Beverly Hills branch store was relocated - - PAGE 3 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 4 to larger quarters in 1990, as were the San Francisco and Houston branches in 1991. Each of the 17 U.S. branch stores displays a representative selection of merchandise but none maintains the extensive selection carried by the New York store. Management currently contemplates the opening of new branch stores in major United States cities at the rate of approximately two or three per year. Separate lease agreements to open branches in White Plains, New York, Short Hills, New Jersey, and Chevy Chase, Maryland have been entered into and, subject to completion of construction, Registrant expects to open for business in those locations in May 1995, September 1995 and April 1996, respectively. See Item 2. Properties below for further information concerning U.S. Retail store leases. United States branch stores range in size from approximately 1,600 to 16,000 gross square feet and total approximately 180,000 gross square feet devoted to retail purposes. Historically, an average of approximately 45% of the floor space in each branch store has been devoted to retail selling. Newer stores are designed to devote approximately 60% of total floor space to retail selling. Tiffany sells jewelry, watches, tableware and other products at wholesale to approximately 200 United States independent retail locations (exclusive of locations which sell TIFFANY fragrance products but not other TIFFANY & CO. products). Selected merchandise is provided to these accounts at wholesale prices that allow traditional retail jewelry mark-ups. TIFFANY and TIFFANY FOR MEN brand fragrance products are sold in Registrant's own stores, through its Direct Marketing channel of distribution and through wholesale distribution in the U.S. and many overseas markets. These products are now available in approximately 3,380 retail locations in the United States and abroad. Chanel, Inc. sells fragrance concentrates to Tiffany. A subsidiary of Chanel, Inc. provides production, packaging, warehousing, accounting and U.S. distribution services. Tiffany retains control of marketing and promotion and owns all fragrance product inventories and receivables. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 4 - 5 Direct Marketing Corporate Division sales executives call on business clients throughout the United States, selling products drawn from the retail product line and items specially developed for the business market, including trophies and items made to customer specifications. Price allowances are given to business customers for volume purchases. Corporate Division customers purchase for business gift giving, employee service and achievement recognition awards, customer incentives and other purposes. Products and services are marketed through a sales force of approximately 130 persons, through advertising in newspapers and business periodicals and through the publication of special 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. The following table sets forth certain data with respect to mail order operations for the periods indicated:
Fiscal Years Ended January 31, 1993 1994 1995 ---- ---- ---- Number of names on catalog mailing list at year-end (consists of customers who purchased by mail or telephone prior to the applicable date): 491,538 535,307 595,165 Total catalog mailings during fiscal year (in millions): 12.9 14.1 15.0 Total mail or telephone orders received during fiscal year: 197,984 210,379 239,485
International Retail Stores and boutiques included in the International Retail channel of distribution are listed below. For locations 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. - - PAGE 5 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 6 International Locations LOCATIONS OPERATED BY REGISTRANT'S SUBSIDIARIES FREE-STANDING STORES JAPAN: MITSUKOSHI DEPARTMENT STORES London, England Tokyo (Nihombashi) Takamatsu Munich, Germany Tokyo (Shinjuku) Matsuyama Zurich, Switzerland Tokyo (Shinjuku) + Hirakata Frankfurt, Germany Tokyo (Ginza) Kobe ++ Milan, Italy (Faraone) Tokyo (Ikebukuro) Nagoya (Hoshigaoka) Florence, Italy (Faraone) Yokohama Nagoya (Sakae) Hong Kong (Peninsula Hotel) Sendai Niigata Hong Kong (Landmark Center) Sapporo Chiba Taipei, Taiwan Osaka ++ Kagoshima Singapore (Raffles Hotel) Kurashiki Okinawa Singapore (Ngee Ann City) Hiroshima Toronto, Canada ++ (Temporarily closed as a Sydney, Australia + (Accessories Boutique) result of earthquake). JAPAN: NON-MITSUKOSHI DEPARTMENT STORES JAPAN: OTHER MITSUKOSHI LOCATIONS Kawasaki, (Saikaya Department Store) (NON-DEPARTMENT STORE LOCATIONS) Kokura, (Izutsuya Department Store) Hilton Hotel, Nagoya, Japan Kyoto, (Daimaru Department Store) Hotel Okura, Kobe, Japan ++ Hamamatsu, (Matsubishi Department Store) Tokyo Bay Hotel, Tokyo, Japan Oita, (Tokiwa Department Store) Royal Hotel, Osaka, Japan Osaka (Shinsaibashi), (Daimaru Department Store) Nagano, Japan (Specialty Store) Osaka (Umeda), (Daimaru Department Store) Fukuoka, Japan (Specialty Store) Kumamoto, (Tsuruya Department Store) Kanazawa, Japan (Specialty Store) The Landmark, Yokohama, Japan TAIWAN: DEPARTMENT STORES Taipei, Sogo Department Store LOCATIONS OPERATED BY LOTTE TRADING CO., LTD. IN KOREA LOCATIONS OPERATED BY MITSUKOSHI LIMITED AND AFFILIATES Lotte World Department Store, Seoul (Duty-free) DEPARTMENT STORE LOCATIONS Lotte Department Store, Seoul (Duty-free) (Duty-paid) Hong Kong Hotel Lotte, Seoul (Lobby boutique) (Duty-free) Taipei, Taiwan Hotel Paradise, Pusan (Duty-free) Tokyo (Nihombashi), Japan (Faraone) Tokyo (Shinjuku), Japan (Faraone) Sapporo, Japan (Faraone) Matsuyama, Japan (Faraone) LOCATIONS OPERATED BY OTHER THIRD PARTIES NON-DEPARTMENT STORE LOCATIONS Rustan's Department Store, Manila, Philippines Moana Surfrider Hotel, Honolulu, Hawaii DFS Saipan Tumon Sands Plaza, Guam Mohammed bin Masaood & Sons, Abu Dhabi, U.A.E.
The above listing does not include international "trade accounts", i.e. non-U.S. retailers to which TIFFANY & CO. or FARAONE brand merchandise is sold on a wholesale basis, but which do not operate a dedicated TIFFANY & CO. or FARAONE boutique within their respective stores. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 6 - 7 From 1972 through July 1993, selected TIFFANY & CO. products, principally jewelry and watches, were purchased from Tiffany by Mitsukoshi Limited and its affiliated companies ("Mitsukoshi") for distribution in Japan in TIFFANY & CO. boutiques. Under the agreement with Tiffany by which Mitsukoshi purchased and distributed TIFFANY & CO. products in Japan (the "Distribution Agreement"), all sales transactions between Tiffany and Mitsukoshi were denominated in U.S. dollars. Registrant recorded wholesale sales to Mitsukoshi as revenue and Mitsukoshi received the merchandise into inventory and recorded revenue on the final sale in Japanese yen to the ultimate consumer. Mitsukoshi established retail prices for TIFFANY & CO. merchandise in Japan and bore responsibility for management of inventory and the risk of currency fluctuations between the Japanese yen and the U.S. dollar. On June 12, 1993, Registrant, through its affiliated companies, entered into an agreement (the "New Agreement") to realign its business relationship with Mitsukoshi. Under the New Agreement, Registrant's wholly owned subsidiary, Tiffany & Co. Japan Inc. ("Tiffany-Japan") assumed merchandising and marketing responsibilities in the operation of TIFFANY & CO. boutiques previously operated by Mitsukoshi in its stores and other locations in Japan. The changeover in responsibilities from the Distribution Agreement to the New Agreement occurred during the month of July 1993. Tiffany-Japan now provides merchandising and marketing management and owns substantially all merchandise held for sale in the boutiques. Mitsukoshi provides and maintains boutique facilities, staffs the boutiques with retail employees and assumes credit and certain other risks. Tiffany-Japan pays Mitsukoshi fees aggregating 27% of net retail sales made in such boutiques. Tiffany-Japan also pays Mitsukoshi an incentive fee of 5% of the amount by which boutique sales increase year-to-year, calculated on a per-boutique basis. In Tokyo, TIFFANY & CO. boutiques may be established only in Mitsukoshi's stores and TIFFANY & CO. brand jewelry may be sold only in such boutiques. Tiffany-Japan has, however, reserved certain rights so that it may open a flagship store in Tokyo. The mutual obligations described in this paragraph will expire on October 15, 2001. In Fiscal 1992, 1993 and 1994, Mitsukoshi's wholesale purchases from Tiffany constituted, respectively, 15%, 7% and 3% of Registrant's net sales. The significant decrease in Fiscal 1993 and 1994 reflects the changeover from the Distribution Agreement to the New Agreement. Under the New Agreement, Mitsukoshi no longer purchases TIFFANY & CO. merchandise for sale in Japan. Instead, 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 display within the boutiques, manages inventory and controls and funds all advertising and publicity programs with respect to TIFFANY & CO. merchandise. - - PAGE 7 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 8 Because the inventory repurchased and to be repurchased by Tiffany from Mitsukoshi was previously sold by Tiffany to Mitsukoshi, Registrant reversed the sales and related gross profit associated with the repurchase. Accordingly, in 1993 Registrant established a $57.5 million reserve, representing the provision for product returns; this reduced net income in Registrant's second fiscal quarter ended July 31, 1993 by approximately $32.7 million, or $2.07 per share. The establishment of this reserve resulted in a net loss in such second quarter and in Fiscal 1993. Registrant's carrying value of the inventory purchased from Mitsukoshi is lower than the purchase price paid Mitsukoshi because of the reversal of such gross profit. The majority of inventories of saleable TIFFANY & CO. merchandise owned by Mitsukoshi have been repurchased by Tiffany-Japan. In addition, approximately yen 3.5 billion ($35.5 million) of TIFFANY & CO. inventory must be repurchased by Tiffany through the period ending February 28, 1998. The price for inventories to be repurchased by Tiffany is payable in Japanese yen. Mitsukoshi has agreed to accept a deferred payment in respect of yen 2.8 billion ($27.6 million) of the purchase price to be paid by Tiffany for inventory already repurchased. This amount must be paid in full on February 28, 1998. Interest at the rate of 6% per annum is payable quarterly to Mitsukoshi by Tiffany on the deferred amount. All other amounts payable by Tiffany for inventory repurchased pursuant to the New Agreement must be paid 40 days following receipt of inventory. Under separate agreements, Mitsukoshi operates four FARAONE boutiques in Mitsukoshi stores in Japan, TIFFANY & CO. boutiques in its department stores in Hong Kong and Taipei and TIFFANY & CO. boutiques in Honolulu and on the island of Guam. Tiffany sells merchandise to Mitsukoshi for resale in these boutiques on a wholesale basis. In 1989, Mitsukoshi purchased from General Electric Capital Corporation ("GECC"), 1,500,000 shares of Registrant's Common Stock. As of March 24, 1995, Mitsukoshi owned 2,135,000 shares, or 13.63% of the Registrant's Common Stock. Prior to Mitsukoshi's purchase of Registrant's Common Stock from GECC, Registrant and Mitsukoshi entered into an agreement by which Mitsukoshi agreed, subject to certain contingencies, not to purchase in excess of 19.99% of Registrant's issued and outstanding Common shares. This agreement expired on September 21, 1994. In 1992, Registrant assumed the operation of four TIFFANY & CO. boutiques previously operated by Mitsukoshi in third party department stores in Japan. Registrant now operates eight boutiques in Japan in non-Mitsukoshi department stores. Mr. Yoshiaki Sakakura, President and Chief Executive Officer of Mitsukoshi, was appointed a director of the Registrant on November 15, 1989, and will continue to serve as a director if elected by Registrant's stockholders at their annual meeting scheduled to be held on May 18, 1995. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 8 - 9 Wholesale distribution of TIFFANY & CO. jewelry and/or watches is also made through independent distributors in Japan, Europe, the Middle East, Korea, the Philippines and Saipan. Tiffany began its ongoing program of international expansion through proprietary retail stores in 1986 with the establishment of the London store. The Munich and Zurich stores were opened in 1987 and 1988, respectively. In 1990, the Zurich store was expanded. Stores in Hong Kong at the Peninsula hotel and at the Landmark center were opened in August 1988 and March 1989, respectively. In 1990, a store was opened in Taipei, and in 1991 stores in Singapore (at the Raffles Hotel), Frankfurt and Toronto were opened, and the London store was expanded. In Fiscal 1993, a second store was opened in Singapore's Ngee Ann City, and the Peninsula hotel store in Hong Kong was expanded. In Fiscal 1994, Tiffany opened its store in Sydney, Australia. Company-operated international TIFFANY & CO. stores and boutiques range in size from approximately 700 to 13,000 gross square feet and total approximately 134,000 gross square feet devoted to retail purposes. In October 1989, Registrant completed the purchase of a controlling interest in the parent corporation of Faraone, S.p.A. ("Faraone"), a manufacturing jeweler which operates retail jewelry stores under the FARAONE tradename in Milan and Florence and offers its products at wholesale to other retailers in Europe and through Mitsukoshi-operated FARAONE boutiques in Japan. Faraone also offers TIFFANY & CO. products in its stores and through its wholesale distribution, and FARAONE products are offered in TIFFANY & CO. stores in Europe. 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, the extent of consumer demand for TIFFANY & CO. products in overseas markets and the fact that Tiffany's reputation in Europe is not yet as firmly established with consumers as it is in the United States and Japan. TIFFANY & CO. boutiques have now been installed in all current Mitsukoshi department stores in Japan. Future expansion in Japan will, to some extent, be dependent upon Mitsukoshi establishing new department stores. However, under its agreement with Mitsukoshi, Tiffany has retained certain rights so that it may undertake further development in Japan on its own initiative, and Tiffany also operates and plans to operate additional boutiques in stores other than Mitsukoshi in locations outside of Tokyo. - - PAGE 9 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 10 The following chart details the growth in the Company's stores and boutiques since fiscal 1987 on a worldwide basis: Worldwide Retail Locations
Registrant's Subsidiary Companies Independent North America and Europe Asia-Pacific and Middle East End of Fiscal: U.S. Canada Europe Japan Elsewhere Mitsukoshi Others Total 1987 8 0 2 0 0 21 0 31 1988 9 0 3 0 1 21 0 34 1989 9 0 5 0 2 24 0 40 1990 12 0 5 0 3 27 0 47 1991 13 1 7 0 4 38 2 65 1992 16 1 7 7 4 36 4 75 1993 16 1 6 37 5 8 6 79 1994 18 1 6 37(1) 7 8 7 84
(1) Includes three locations temporarily closed as a result of earthquake. Advertising and Promotion Tiffany regularly advertises its business, primarily in newspapers and magazines. Cooperative advertising funds are received from certain merchandise vendors and the Company also provides its domestic and international third-party distributors with cooperative advertising funds. In Fiscal 1992, 1993 and 1994, Tiffany spent approximately $19.4 million, $18.1 million and $21.8 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. 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. The Company also engages in an aggressive 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 New York window displays are another important aspect of Tiffany's promotional efforts. From 1955 through 1994, these windows were designed by Gene Moore, who retired in January, 1995. In its TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 10 - 11 New York store, Tiffany displays table settings created by leading interior decorators and by prominent hosts and hostesses. John Loring, Tiffany's Design Director, is the author of several 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. Tiffany has obtained and is the proprietor of trademark registrations for TIFFANY and TIFFANY & CO. 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 does not claim to be 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. 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 and 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. - - PAGE 11 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 12 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. The designs of Ms. Peretti accounted for 14%, 14% and 12% of Tiffany's net sales in Fiscal 1992, 1993 and 1994, respectively. Merchandise designed by Ms. Picasso accounted for 5% of Tiffany's net sales in Fiscal 1992, 1993 and 1994, respectively. Registrant's operating results could be adversely affected were it to cease to be a licensee of one or more 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 Tiffany is supplied from the Company's workshops in New York City and Pleasantville, New York; Parsippany, New Jersey; Attleboro, Massachusetts; Salem, West Virginia; Lussy-sur-Morges, Switzerland; Paris, France; and Milan, Italy 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 Ended January 31, 1993 1994 1995 ---- ---- ---- Produced by Tiffany 29 % 27 % 26 % Purchased from others 71 73 74 ----- ----- ----- Total 100 % 100 % 100 %
Approximately 43% of the merchandise purchased from others in Fiscal 1994 was manufactured outside the United States. Gems and precious metals used in making Tiffany 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. 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. Diamond jewelry accounted for approximately 16%, 23% and 22% of Tiffany's net sales for Fiscal 1992, 1993 and 1994, respectively. Tiffany does not purchase uncut diamonds and does not anticipate any material adverse change in the availability of cut and polished diamonds in general. The supply and price of diamonds in the principal world markets are significantly influenced by a single entity, the Central Selling Organization (the "CSO"), a marketing arm of De Beers Centenary AG, a Swiss corporation. The CSO has traditionally controlled the marketing of approximately 75-80% of the world's supply of uncut diamonds and sells uncut diamonds to worldwide diamond cutters from its London office approximately 10 times a year in quantities and at prices determined in its sole TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 12 - 13 discretion. Tiffany does not purchase diamonds directly from the CSO. The availability and price of diamonds to the CSO and Tiffany's suppliers may be, to some extent, dependent on the political situation in diamond-producing countries, such as South Africa (which currently accounts for approximately 11% of the world diamond output), Australia, Brazil, Botswana, the former Soviet Union and Zaire, and on the continuance of the prevailing supply and marketing arrangements for uncut diamonds. Sustained interruption in the supply of uncut diamonds from the producing countries could adversely affect Tiffany and the retail jewelry industry as a whole. Finished jewelry is purchased from more than 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 watches are manufactured by third party suppliers. Some watches are also assembled by third parties. Tiffany contracts with a single manufacturer to produce its silver flatware patterns from Tiffany's proprietary dies by use of Tiffany's traditional manufacturing techniques. Likewise, engraved stationery is purchased from a single manufacturer. Loss of either manufacturer could result in the unavailability of silver flatware or engraved stationery, as the case may be, during the period necessary for Tiffany to arrange for new production. As Registrant's sales have grown, management has increasingly begun to focus its attention on merchandise supply issues and has acquired additional merchandise manufacturing capabilities. In Fiscal 1989, the Company completed the acquisition of the assets and business and assumed certain liabilities of Howard H. Sweet & Son, Inc., a manufacturer of gold and silver jewelry and chains located in Attleboro, Massachusetts ("Sweet"). Tiffany operates the Sweet business as a separate subsidiary under the name and trademark HOWARD H. SWEET & SON. In Fiscal 1990, Tiffany acquired the assets and business of McTeigue & Co., a manufacturer of gold jewelry located in Pleasantville, New York. In Fiscal 1991 Tiffany completed the acquisition of the business of the late Camille Le Tallec. Located in Paris, this workshop decorates hand-painted tableware. Also in Fiscal 1991, the Company established a watch assembly, engineering and testing operation in Lussy-sur-Morges, Switzerland. In Fiscal 1992, Tiffany acquired the assets and business of Judel Glassware Co., Inc., which produces crystal glassware in Salem, West Virginia. Registrant may seek additional manufacturing capacity in certain key product categories, although there are no current plans to do so. - - PAGE 13 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 14 Competition Registrant is faced with substantial competition in all areas in which it is active, in most cases from companies that provide competition for only a portion of its diverse lines of merchandise. Competitors and the intensity of competition vary across product lines, geographic locations and channels of distribution. In the United States, TIFFANY & CO. retail stores must compete with jewelers and other retailers whose international reputations for style, integrity and expertise are well established. Tiffany must also compete with jewelers and other retailers who compete primarily on the basis of price. However, while price promotion is common in the jewelry industry, Tiffany does not compete through price promotion but rather on the basis of value -- the quality of its products and designs -- and the service provided by its store personnel. The international marketplace for TIFFANY & CO. products is characterized by highly competitive conditions. Although Registrant believes that the name TIFFANY & CO. is known and respected internationally, and although Tiffany did operate retail stores in London and Paris prior to World War II, Tiffany did not have a retail presence in Europe in the post-war era until 1986. Accordingly, consumer awareness of Tiffany and its products is not as strong in Europe as in the United States or in Japan, where Tiffany has distributed its products for many years. Registrant expects that its overseas stores have and will continue to experience intense competition from established retailers in international cities where TIFFANY & CO. stores are and may eventually be located. In direct marketing, the TIFFANY & CO. reputation and diverse product line are believed to be favorable competitive factors; nonetheless, highly competitive conditions prevail. A growing number of direct sellers compete for access to the same mailing lists of known purchasers of luxury goods, and mailing and production costs are increasing. In marketing to businesses, Tiffany faces numerous competitors who sell a wide variety of products. Employees As of January 31, 1995, the Registrant's subsidiary corporations employed an aggregate of approximately 3,306 full-time and part-time persons. Of those employees, 2,629 were employed in the United States. Of Tiffany's total employees, approximately 1,229 persons are salaried employees, 404 are engaged in manufacturing and 1,275 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 All of Tiffany's principal operating facilities are leased although Registrant does own a small glass manufacturing facility in Salem, West Virginia. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 14 - 15 New York Store Tiffany leases the land and building at 727 Fifth Avenue in New York City for use as its main retail store and executive offices. The building was constructed in 1940. Approximately 32,450 gross square feet of this 124,000 square foot building are devoted to retail selling purposes, with the balance devoted to executive and administrative offices, jewelry production and storage. The building at 727 Fifth Avenue was designed to be a retail store for Tiffany and Tiffany believes it is well configured and located for this function. The initial lease term for the New York store building expired on October 31, 1994 and has been renewed for an additional five year term expiring on October 31, 1999. It may, subject to the terms of the lease, be renewed for four more successive terms of five years each. Basic rent for the building is $7.1 million per annum. That rate will remain effective until the expiration of the current five-year renewal term. If and when Tiffany exercises additional renewal terms, the basic rent will be increased by the greater of (i) a proportional increase in accordance with a consumer price index or (ii) the fair rental value of the property as determined by an appraisal proceeding. Tiffany must also pay all costs of operating the building, including real property taxes, in addition to the basic rent. Customer Service Center Tiffany's distribution facility in Parsippany, New Jersey is 17 years old and consists of approximately 135,000 square feet of space devoted to warehousing, receipt and distribution of merchandise, order processing, silversmithing and offices. The initial term of the net lease covering this facility expires on May 31, 1997 and may be renewed thereafter for one renewal term of six months. The current basic rental is approximately $7.06 per square foot per annum, but will increase to approximately $7.65 per square foot per annum effective June 1, 1995. In April, 1993 Tiffany entered into a lease for 51,000 square feet of warehouse space in Pine Brook, New Jersey, a town adjacent to Parsippany. Management believes that its New Jersey distribution facilities will continue to be adequate but not optimal for the most efficient distribution of Tiffany's products. Accordingly, management has developed plans and is working with real estate developers towards the construction and lease of a combined warehouse, distribution, light manufacturing and office facility on a site in Parsippany, New Jersey. The combined facility will consist of approximately 269,000 square feet of space, of which approximately 96,000 square feet will be devoted to office purposes, and will consolidate all of Tiffany's New Jersey operations other than retail sales. - - PAGE 15 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 16 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): Phipps Plaza Shopping Center, Atlanta, GA, July 31, 2000 (two five-year terms); Two Rodeo Drive, Beverly Hills, CA, October 7, 2005 (two five-year terms); Copley Place, Boston, MA, July 31, 2009 (two five-year terms); 715 North Michigan Avenue, Chicago, IL, September 30, 1997 (one 10-year term); South Coast Plaza, Costa Mesa, CA, January 31, 2004 (one five-year term); The Galleria, Dallas, TX, October 31, 1997 (one five-year term); Union Square, San Francisco, CA, October 29, 2006 (one 10-year term); Galleria Post Oak Shopping Center, Houston, TX, September 30, 2001 (one five-year term); 259 Worth Avenue, Palm Beach, FL, May 31, 2007 (two five-year terms); The Bellevue, Philadelphia, PA, November 16, 2005 (one five-year term); The Paladion, San Diego, CA, May 31, 2007; Fairfax Square, Vienna, VA, March 31, 2000 (two five-year terms); The Somerset Collection, Troy, MI, September 30, 2007; Ala Moana Center, Honolulu, HI, January 31, 2000; Bal Harbour Shops, Bal Harbour, FL, May 31, 2003; Whalers Village, Maui, HI, July 31, 1999; Oakbrook Center, Oak Brook, IL, April 30, 2009 (two five-year terms); Chifley Tower, Sydney, Australia, January 31, 1999 (two five-year terms); 20 Goethestrasse, Frankfurt, Germany, January 31, 2001 (one 10-year term); 25 Old Bond Street, London, England, March 24, 2016; Residenzstrasse 11, Munich, Germany, June 30, 1998 (one four-year term); The Landmark, Hong Kong, October 31, 1997; The Peninsula, Kowloon, Hong Kong, February 28, 1997; Raffles Hotel, Singapore, September 15, 1997 (one three-year term); Regent Hotel, Taipei, Taiwan, October 6, 1995 (two five-year terms); 85 Bloor Street, Toronto, Canada, October 15, 2006 (one seven-year term); Bahnhofstrasse 14, Zurich, Switzerland, September 30, 2000; and Ngee Ann City, Singapore, September 15, 1999 (one one-year term). In addition to the leases shown above, Tiffany has entered into a 10-year lease for a 6,079 square foot retail location at The Westchester, White Plains, New York, an 8,400 square foot retail location at The Mall at Short Hills, Short Hills, New Jersey, and a 5,400 square foot retail location at Chevy Chase Plaza, Chevy Chase, Maryland. Construction of the White Plains, New York store began in January, 1995 and the store is anticipated to open in May, 1995. Construction of The Mall at Short Hills location is expected to begin in Spring 1995 and to be completed by September 1995. Construction of the Chevy Chase, Maryland store is expected to commence no later than December 1995 and to be completed within four months. Registrant also operates two FARAONE stores in Italy, one in Milan and one in Florence. The Milan store is located on Via de Montenapoleone. The present lease expires on March 31, 1999, but may, subject to certain conditions imposed by Italian law, be renewed for an additional term of six years. The Florence store is located on Via Tornabuoni. The present lease expires on June 30, 1997 and is renewable for an additional term of six years, subject to the same conditions imposed by law upon the Milan lease. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 16 - 17 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 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 and any business employing significant numbers of U.S.- based employees, such litigation can result in large monetary awards when a civil 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 results of operations or financial condition. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended January 31, 1995. - - PAGE 17 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 18 EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Registrant are:
NAME AGE POSITION YEAR JOINED TIFFANY William R. Chaney 62 Chairman of the Board of Directors, 1980 President and Chief Executive Officer Michael J. Kowalski 43 Executive Vice President 1983 James E. Quinn 43 Executive Vice President 1986 Jeanne B. Daniel 39 Senior Vice President - Merchandising 1986 Patrick B. Dorsey 44 Senior Vice President - General Counsel 1985 and Secretary James N. Fernandez 39 Senior Vice President - Finance 1983 and Chief Financial Officer Marsha S. Gewirtzman 44 Senior Vice President - Corporate 1987 Fernanda K. Gilligan 48 Senior Vice President - Public Relations 1984 John R. Loring 55 Senior Vice President - Design Director 1979 Diana Lyne 41 Senior Vice President - Marketing 1984 Thomas J. O'Neill 42 Senior Vice President - Asia-Pacific 1985 Dale S. Strohl 58 Senior Vice President - Operations 1984 Larry M. Segall 40 Vice President, Treasurer and Controller 1985
William R. Chaney. Mr. Chaney, Chairman, President and Chief Executive Officer of Tiffany since August 1984, joined Tiffany in January 1980 as a member of its Board. 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. Michael J. Kowalski. Mr. Kowalski has held a variety of merchandising management positions since joining Tiffany in 1983 as Director of Financial Planning. On March 19, 1992 he was appointed Executive Vice President with overall responsibility in the following areas: merchandising, marketing, advertising, public relations and product design. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 18 - 19 James E. Quinn. Mr. Quinn joined the Company in July 1986 as Vice President of branch sales for the Company's corporate sales operations. He was promoted to his current position as Executive Vice President responsible for all United States retail and corporate sales on March 19, 1992 and assumed responsibility for all North American retail and corporate sales in 1994. Jeanne B. Daniel. Ms. Daniel has served in a variety of merchandising management positions since joining the Company in 1986 as a merchandising management associate. She was appointed Senior Vice President with responsibility for merchandising in October 1992. Patrick B. Dorsey. Mr. Dorsey joined the Company in July 1985 as General Counsel and Secretary. James N. Fernandez. Mr. Fernandez joined Tiffany in October 1983 and has held various positions in financial planning and management since that time. He was appointed to his current position in April 1989. Marsha S. Gewirtzman. Ms. Gewirtzman joined the Company in September 1987 in a sales management capacity within the corporate sales division. On March 19, 1992 she was appointed Senior Vice President with responsibility for corporate sales. Fernanda K. Gilligan. Mrs. Gilligan joined Tiffany in October 1984 as Director of Retail Marketing. She assumed her current responsibilities in January 1990. John R. Loring. Mr. Loring has served as Design Director since joining Tiffany in 1979. Diana Lyne. Ms. Lyne joined Tiffany in July 1984 as Director of Advertising. She assumed her current responsibilities in January 1990. Thomas J. O'Neill. Dr. O'Neill joined Tiffany in February 1985 as a management associate. He assumed responsibility for sales in the Asia-Pacific region in March 1992 and assumed responsibility for sales in the Middle East in 1994. Dale S. Strohl. Mr. Strohl assumed his current responsibilities in September 1984. Larry M. Segall. Mr. Segall joined Tiffany in 1985 as Controller. He was appointed Treasurer-Controller on January 21, 1993. - - PAGE 19 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 20 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 1993 were:
Fiscal 1993 High Low First Fiscal Quarter $32.63 $24.13 Second Fiscal Quarter $33.50 $26.38 Third Fiscal Quarter $33.25 $26.25 Fourth Fiscal Quarter $38.00 $29.13
In consolidated trading, the high and low selling prices per share for shares of such Common Stock for Fiscal 1994 were:
Fiscal 1994 High Low First Fiscal Quarter $34.50 $28.50 Second Fiscal Quarter $37.50 $28.50 Third Fiscal Quarter $39.75 $33.63 Fourth Fiscal Quarter $43.63 $29.00
On March 24, 1995, the high and low selling prices quoted on such exchange were $29.88 and $29.50 respectively. On March 24, 1995 there were 2,287 record holders of Registrant's Common Stock. It is Registrant's policy to pay a quarterly dividend of $0.07 per share of Common Stock, subject to declaration of such dividend by Registrant's Board of Directors. In Fiscal 1993, dividends of $0.07 per share were paid on April 9, 1993, July 9, 1993, October 8, 1993 and January 10, 1994. In Fiscal 1994, dividends of $0.07 per share were paid on April 11, 1994, July 11, 1994, October 11, 1994 and January 10, 1995. 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, 2,135,000 shares of Registrant's Common Stock beneficially owned by Mitsukoshi Limited and 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. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 20 - 21 ITEM 6. SELECTED FINANCIAL DATA Incorporated by reference from Registrant's Annual Report to Stockholders for the fiscal year ended January 31, 1995, page 8. 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, 1995, pages 9-11. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Incorporated by reference from Registrant's Annual Report to Stockholders for the fiscal year ended January 31, 1995, pages 12-25. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE NONE PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Incorporated by reference from Registrant's Proxy Statement dated April 7, 1995, pages 2-7. ITEM 11. EXECUTIVE COMPENSATION Incorporated by reference from Registrant's Proxy Statement dated April 7, 1995, pages 8-18. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Incorporated by reference from Registrant's Proxy Statement dated April 7, 1995, pages 6-8. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Incorporated by reference from Registrant's Proxy Statement dated April 7, 1995, page 15. See also Part I, Item 1. Distribution and Marketing, International Retail, above, for a discussion of Registrant's business relationship with Mitsukoshi, Ltd., a holder of in excess of 10% of Registrant's issued and outstanding Common Stock. - - PAGE 21 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 22 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 1994 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, 1995 and 1994 Consolidated statements of operations for the years ended January 31, 1995, 1994 and 1993 Consolidated statements of stockholders' equity for the years ended January 31, 1995, 1994 and 1993 Consolidated statements of cash flows for the years ended January 31, 1995, 1994 and 1993 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: VIII. Valuation and qualifying accounts and reserves. All other schedules have been omitted since they are either not applicable or not required, or because the information required is included in the consolidated financial statements and notes thereto. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 22 - 23 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 June 23, 1989. 3.2 By-Laws of Registrant (as last amended January 19, 1995). 4.1 Form of Rights Agreement Dated as of November 17, 1988 by and between Registrant and Manufacturers Hanover Trust Company, as Rights Agent. Incorporated by reference from Exhibit 4.1 to Registrant's Report on Form 8-K dated November 18, 1988. 4.2 Amendment to Rights Agreement dated as of September 21, 1989 by and between Registrant and Manufacturers Hanover Trust Company, as Rights Agent. Incorporated by reference from Exhibit 4.2 to Registrant's Report on Form 8-K dated September 28, 1989. 4.3 Indenture dated as of March 15, 1991 between Registrant and Manufacturers Hanover Trust Company, as Trustee, in respect of Registrant's 6-3/8% Convertible Subordinated Debentures Due 2001. Incorporated by reference from Exhibit 4.3 to Registrant's Report on Form 10-K for the fiscal year ended January 31, 1992 and dated April 10, 1992. 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"). 10.15 Lease between Tiffany and Creef Gem Corporation dated May 24, 1985 for 801 Jefferson Road, Parsippany, N.J., amended as of June 1, 1995. 10.16 Lease dated October 15, 1984 between Avon Export Corporation and Tiffany for 727 Fifth Avenue, New York, N.Y. Incorporated by reference from Exhibit 10.16 to the Registration Statement.
- - PAGE 23 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 24
Exhibit Description 10.53 Distribution and Manufacturing Services Agreement between Chanel, Inc. and Tiffany and Company dated as of January 1, 1993. Incorporated by reference from Exhibit 10.53 filed with Registrant's Report on Form 10-K for the fiscal year ended January 31, 1993 and dated April 12, 1993. 10.54 Letter Agreement dated March 4, 1987 between Tiffany and Elsa Peretti. Incorporated by reference from Exhibit 10.54 to the Registration Statement. 10.56 Purchase Agreement dated as of July 18, 1988, by and between Tiffany and Chanel, Inc. Incorporated by reference from Exhibit 28.2 to the Form S-8. 10.64 Distribution Agreement dated November 28, 1988 by and between Tiffany and Mitsukoshi (U.S.A.), Inc. in respect of Hawaii. Incorporated by reference from Exhibit 10.64 to Registrant's Report on Form 10-K for the fiscal year ended January 31, 1989 and dated April 21, 1989. 10.68 Form of credit agreement entered into with certain banks. Incorporated by reference from Exhibit 10.68 to Registrant's Report on Form 10-Q for the fiscal quarter ended July 31, 1989 and dated September 13, 1989. 10.69 Form of credit agreement entered into with certain banks. Incorporated by reference from Exhibit 10.69 to Registrant's Report on Form 10-Q for the fiscal quarter ended October 31, 1989 and dated December 14, 1989. 10.82 Form of Amendment to Credit Agreement made as of April 1, 1990 with certain banks. The following banks have entered into an Amendment to Credit Agreement No. 2: BBL Bank Brussels Lambert, New York Branch; CIBC, Inc.; Credit Suisse; The Fuji Bank, Limited, Fuji Bank (Schweiz) AG, and The Fuji Bank and Trust Company; Irving Trust Company; United Jersey Bank. Incorporated by reference from Exhibit 10.82 to Registrant's Report on Form 10-Q for the fiscal quarter ending April 30, 1990 and dated June 13, 1990. 10.89 Subscription Agreement in respect of Registrant's 6-3/8% Convertible Subordinated Debentures due 2001, dated March 8, 1991 among Lehman Brothers International Limited, Credit Suisse First Boston Limited, Goldman Sachs International Limited, Merrill Lynch International Limited, The Nikko Securities Co., (Europe) Ltd., Paribas Limited, Robertson, Stephens & Company, UBS Phillips & Drew Securities Limited. Incorporated by reference from Exhibit 10.89 to Registrant's Report on Form 10-K for the fiscal year ended January 31, 1991.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 24 - 25
Exhibit Description 10.99 Form of Amendment to Credit Agreement made as of January 31, 1992 with certain banks. The following banks have entered into an Amendment to Credit Agreement No. 3: BBL Bank Brussels Lambert, New York Branch; Credit Suisse; The Fuji Bank, Limited, Fuji Bank (Schweiz) AG and The Fuji Bank and Trust Company; Bank of New York; United Jersey Bank. Incorporated by reference from Exhibit 10.99 to Registrant's Report on Form 10-K for the fiscal year ended January 31, 1992 and dated April 10, 1992. 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 and dated April 12, 1993. 10.102 Master Agreement (interest rate transfers "Swap Transactions") dated January 26, 1993 between Lehman Brothers Special Financing Inc. and Registrant, and confirmation of Swap Transaction dated February 1, 1993 for notional amount $50 million. Incorporated by reference from Exhibit 10.102 filed with Registrant's Report on Form 10-K for the fiscal year ended January 31, 1993 and dated April 12, 1993. 10.110 Inventory Purchase Agreement by and between Tiffany, Tiffany-Japan (Delaware) Inc., and Mitsukoshi dated June 25, 1992. Incorporated by reference from Exhibit 10.110 filed with Registrant's Report on Form 10-K for the fiscal year ended January 31, 1993 and dated April 12, 1993. 10.111 Agreement made June 12, 1993 by and between Tiffany-Japan (Delaware) Inc., Tiffany and Mitsukoshi Limited. Incorporated by reference from Exhibit 10.111 filed with Registrant's Report on Form 8-K dated June 12, 1993. 10.112 Amendment No.1 To Distribution Agreement (Oahu, Hawaii) made with respect to Distribution Agreement made the 28th day of November 1988 by and between Tiffany and Mitsukoshi (U.S.A.), Inc. (see Exhibit 10.64 above) entered into as of December 13, 1993 and Amendment No. 1 to License Agreement (Oahu, Hawaii) made with respect to the License made the 28th day of November 1988 by and between Tiffany and Mitsukoshi (U.S.A.), Inc. (see Exhibit 10.64 above) entered into as of December 13, 1993. Incorporated by reference from Exhibit 10.112 filed with Registrant's Report on Form 10-K for the fiscal year ended January 31, 1994 and dated April 7, 1994. 11.1 Statement re Computation of Per Share Earnings.
- - PAGE 25 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 26
Exhibit Description 13.1 Annual Report to Stockholders for Fiscal Year Ended January 31, 1995 (pages 8 through 25 of such Annual Report have been filed in electronic format). 21.1 Subsidiaries of Registrant. 23.1 Consent of Coopers & Lybrand L.L.P., independent accountants.
Executive Compensation Plans and Arrangements
Exhibit Description 10.2 Registrant's 1985 Stock Option Plan and forms of incentive stock option agreement and stock option agreement, as last amended on January 18, 1990. Incorporated by reference from Exhibit 10.3 to Registrant's Report on Form 10-K for the fiscal year ended January 31, 1990 and dated April 13, 1990. 10.3 Registrant's 1986 Stock Option Plan and form of stock option agreement, as last amended on March 19, 1992. Incorporated by reference from Exhibit 10.3 to Registrant's Report on Form 10-Q for the fiscal quarter ended April 30, 1992 and dated June 11, 1992. 10.25 Deferred Compensation Agreement between William R. Chaney and Tiffany and Company dated December 31, 1989. Incorporated by reference from Exhibit 10.25 to Registrant's Report on Form 10-K for the fiscal year ended January 31, 1990 and dated April 13, 1990. 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. Incorporated by reference from Exhibit 10.60 to Registrant's Report on Form 10-K for the fiscal year ended January 31, 1988 and dated April 18, 1988. 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 and dated April 12, 1993. 10.106 Tiffany and Company Executive Deferral Plan. Incorporated by reference from
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 26 - 27
Exhibit Description Exhibit 10.106 filed with Registrant's Report on Form 10-K for the fiscal year ended January 31, 1993 and dated April 12, 1993. 10.108 Tiffany & Co. Retirement Plan for Non-Employee Directors. Incorporated by reference from Exhibit 10.108 filed with Registrant's Report on Form 10-K for the fiscal year ended January 31, 1993 and dated April 12, 1993. 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 and dated April 12, 1993. 10.113 Tiffany and Company Pension Plan, as last amended February 16, 1994. Incorporated by Incorporated by reference from Exhibit 10.113 filed with Registrant's Report on Form 10-K for the fiscal year ended January 31, 1994 and dated April 7, 1994. 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 and dated April 7, 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.
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. (b) Reports on Form 8-K. On January 5, 1995 Registrant filed a Report on Form 8-K reporting that Registrant had announced its preliminary, unaudited sales figures for the period November 1 to December 31, 1994. The text of Registrant's announcement was included in the Report. - - PAGE 27 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 28 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 7, 1995 By: /s/ William R. Chaney ------------------------------------ William R. Chaney Chairman of the Board and President TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 28 - 29 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. By: /s/ William R. Chaney ------------------------ William R. Chaney Chairman of the Board and President (principal executive officer) (director) By: /s/ James N. Fernandez By: /s/ Charles K. Marquis -------------------------------- ------------------------------ James N. Fernandez Charles K. Marquis Senior Vice President-Finance Director (principal financial officer) By: /s/ Larry M. Segall By: /s/ James E. Quinn -------------------------------- ------------------------------ Larry M. Segall James E. Quinn Vice President Executive Vice President (principal accounting officer) (director) By: /s/ Jane A. Dudley By: /s/ Yoshiaki Sakakura -------------------------------- ------------------------------ Jane A. Dudley Yoshiaki Sakakura Director Director By: /s/ Samuel L. Hayes, III By: /s/ William A. Shutzer -------------------------------- ------------------------------ Samuel L. Hayes, III William A. Shutzer Director Director By: /s/ Michael J. Kowalski By: /s/ Geraldine Stutz -------------------------------- ------------------------------ Michael J. Kowalski Geraldine Stutz Executive Vice President Director (director)
- - PAGE 29 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994 30 [Coopers & Lybrand letterhead] REPORT OF INDEPENDENT ACCOUNTANTS The Stockholders and Board of Directors of Tiffany & Co.: Our report on the consolidated financial statements of Tiffany & Co. and Subsidiaries has been incorporated by reference in this Form 10-K from page 26 of the 1994 Annual Report to Stockholders of Tiffany & Co. and Subsidiaries. In connection with our audits of such consolidated financial statements, we have also audited the related financial statement schedule listed in Item 14(a)2 of this Form 10-K. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein. Coopers & Lybrand L.L.P. New York, New York March 6, 1995 31 TIFFANY & CO. AND SUBSIDIARIES SCHEDULE VIII - 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, 1995: Reserves deducted from assets: Accounts receivable allowances principally doubtful accounts $4,170,217 $3,640,485 $ -- $2,089,547(a) $5,721,155 Allowance for inventory liquidation and obsolescence 7,061,876 1,787,945 -- 247,339(b) 8,602,482 Allowance for inventory shrinkage 2,035,358 2,195,829 -- 1,763,054(c) 2,468,133 LIFO Reserve 8,470,000 1,300,000 -- -- 9,770,000
___________________ (a) Uncollectible accounts written off. (b) Liquidation of inventory previously written down to market. (c) Physical inventory losses. 32 TIFFANY & CO. AND SUBSIDIARIES SCHEDULE VIII - 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, 1994: Reserves deducted from assets: Accounts receivable allowances principally doubtful accounts $7,292,659 $3,119,873 $(3,000,000)(a) $3,242,315(b) $4,170,217 Allowance for inventory liquidation and obsolescence 3,527,704 3,833,000 - 298,828(c) 7,061,876 Allowance for inventory shrinkage 2,150,000 2,573,852 - 2,688,494(d) 2,035,358 LIFO Reserve 6,871,000 1,599,000 - - 8,470,000
___________________ (a) Reclassified to the product return reserve in connection with the Company's realignment of its business in Japan. (b) Uncollectible accounts written off. (c) Liquidation of inventory previously written down to market. (d) Physical inventory losses. 33 TIFFANY & CO. AND SUBSIDIARIES SCHEDULE VIII - 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, 1993: Reserves deducted from assets: Accounts receivable allowances principally doubtful accounts $4,459,864 $4,789,017 $ - $1,956,222(a) $7,292,659 Allowance for inventory liquidation and obsolescence 1,933,390 2,019,721 - 425,407(b) 3,527,704 Allowance for inventory shrinkage 1,594,000 4,194,954 - 3,638,954(c) 2,150,000 LIFO Reserve 6,521,000 350,000 - - 6,871,000
___________________ (a) Uncollectible accounts written off. (b) Liquidation of inventory previously written down to market. (c) Physical inventory losses. 34 - -------------------------------------------------------------------------------- EXHIBIT INDEX SEE PAGES 23 THROUGH 27 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 January 19, 1995) . . . . . 10.15 Amendment to Lease between Tiffany and Creef Gem Corporation dated May 24, 1985 for 801 Jefferson Road, Parsippany, N.J., as of June 1, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 Statement re Computation of Per Share Earnings . . . . . . . . . . 13.1 Annual Report to Stockholders for Fiscal Year Ended January 31, 1995 (pages 8 through 25 of such Annual Report have been filed in electronic format). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.1 Subsidiaries of Registrant. . . . . . . . . . . . . . . . . . . . 23.1 Consent of Coopers & Lybrand L.L.P., independent accountants . . . - --------------------------------------------------------------------------------
NOTE: ALL OTHER EXHIBITS HAVE BEEN INCORPORATED BY REFERENCE FROM EXHIBITS TO DOCUMENTS PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REFER TO THE LIST OF EXHIBITS ON PAGES 23 THROUGH 27 FOR REGISTRATION, FILE AND EXHIBIT NUMBERS. TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 34 -
   1
                                                                   EXHIBIT 3.2
                                RESTATED BY-LAWS
                        AS LAST AMENDED JANUARY 19, 1995
                                      -OF-
                     TIFFANY & CO., A DELAWARE CORPORATION
                       (HEREIN CALLED THE "CORPORATION")
                                    -OO0OO-


                                   ARTICLE I

                                  Stockholders


SECTION 1.01.  Annual Meeting.  The Board of Directors by resolution shall
designate the time, place and date (which shall be, in the case of the first
annual meeting, not more than 13 months after the organization of the
Corporation and, in the case of all other annual meetings not more than 13
months after the date of the last annual meeting) of the annual meeting of the
stockholders for the election of directors and the transaction of such other
business as may come before it.

SECTION 1.02.  Notice of Meetings of Stockholders.  Whenever stockholders are
required or permitted to take any action at a meeting, written notice of the
meeting shall be given (unless that notice shall be waived or unless the
meeting is to be dispensed with in accordance with the provisions of Article
SIXTH of the Certificate of Incorporation of the Corporation) which shall state
the place, date and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called.  The written notice of
any meeting shall be given, personally or by mail, not less than ten nor more
than sixty days before the date of the meeting to each stockholder entitled to
vote at such meeting.  If mailed, such notice is given when deposited in the
United States mail, postage prepaid, directed to the stockholder at his address
as it appears on the records of the Corporation.

When a meeting is adjourned to another time or place, notice need not be given
of the adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken.  At the adjourned meeting the
Corporation may transact any business which might have been transacted at the
original meeting.  If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.

   2
SECTION 1.03.  Quorum.  At all meetings of the stockholders, the holders of a
majority of the stock issued and outstanding and entitled to vote thereat,
present in person or by proxy, shall constitute a quorum for the transaction of
any business.

When a quorum is once present to organize a meeting, it is not broken by the
subsequent withdrawal of any stockholders.

The stockholders present may adjourn the meeting despite the absence of a
quorum and at any such adjourned meeting at which the requisite amount of
voting stock shall be represented, the Corporation may transact any business
which might have been transacted at the original meeting had a quorum been
there present.

SECTION 1.04.  Method of Voting.  The vote upon any question before the meeting
need not be by ballot.  All elections and all other questions shall be decided
by a plurality of the votes cast, at a meeting at which a quorum is present,
except as expressly provided otherwise by the General Corporation Law of the
State of Delaware or the Certificate of Incorporation.

SECTION 1.05.  Voting Rights of Stockholders and Proxies.  Each stockholder of
record entitled to vote in accordance with the laws of the State of Delaware,
the Certificate of Incorporation or these By-Laws, shall at every meeting of
the stockholders be entitled to one vote in person or by proxy for each share
of stock entitled to vote standing in his name on the books of the Corporation,
but no proxy shall be voted on after three years from its date, unless the
proxy provides for a longer period.

SECTION 1.06.  Ownership of its Own Stock.  Shares of its own capital stock
belonging to the Corporation or to another corporation, if a majority of the
shares entitled to vote in the election of directors of such other corporation
is held, directly or indirectly, by the Corporation, shall neither be entitled
to vote nor be counted for quorum purposes.  Nothing in this section shall be
construed as limiting the right of any corporation to vote stock, including but
not limited to its own stock, held by it in a fiduciary capacity.

SECTION 1.07.  Voting by Fiduciaries and Pledgors.   Persons holding stock in a
fiduciary capacity shall be entitled to vote the shares so held.  Persons whose
stock is pledged shall be entitled to vote, unless in the transfer by the
pledgor on the books of the Corporation he has expressly empowered the pledgee
to vote thereon, in which case only the pledgee, or his proxy, may represent
such stock and vote thereon.

If shares or other securities having voting power stand of record in the names
of two or more persons, whether fiduciaries, members of a partnership, joint
tenants, tenants in common, tenants by the entirety or otherwise, or if two or
more persons have the same


                                                                         Page 2
   3
fiduciary relationship respecting the same shares, unless the Secretary of the
Corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:

(1)      If only one votes, his act binds all;

(2)      If more than one votes, the act of the majority so voting binds all;

(3)      If more than one votes, but the vote is evenly split on any
         particular matter, each faction may vote the securities in question
         proportionally, or any person voting the shares, or a beneficiary, if
         any, may apply to the Court of Chancery or such other court as may
         have jurisdiction to appoint an additional person to act with the
         persons so voting the shares, which shall then be voted as determined
         by a majority of such persons and the person appointed by the Court.
         If the instrument so filed shows that any such tenancy is held in
         unequal interests, a majority or even-split for the purpose of this
         subsection shall be a majority or even-split in interest.

SECTION 1.08.  Fixing Date for Determination of Stockholders of Record.  In
order to determine the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive payment
of any dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board of Directors
may fix, in advance, a record date, which shall not be more than sixty nor less
than ten days before the date of such meeting, nor more than sixty days prior
to any other action.  If no record date is fixed by the Board of Directors, the
record date shall be determined in accordance with the provisions of the
General Corporation Law of the State of Delaware.

SECTION 1.09.  List of Stockholders.  The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before
every meeting of the stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order, and showing the address
of each stockholder and the number of shares registered in the name of each
stockholder.  Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least  ten days prior to the meeting, either at a place within the
city where the meeting is to be held (which place shall be specified in the
notice of the


                                                                         Page 3
   4

meeting) or, if not so specified, at the place where said meeting is to be held,
and the list shall be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who may
be present.  Upon the willful neglect or refusal of the directors to produce
such a list at any meeting for the election of directors, they shall be
ineligible for election to any office at such meeting.

SECTION 1.10.  Stockholder's Right of Inspection.  Stockholders of record, in
person or by attorney or other agent, shall have the right, upon written demand
under oath stating the purpose thereof, during the usual hours for business to
inspect for any proper purpose the Corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom.  A proper purpose shall mean a purpose reasonably related to such
person's interest as a stockholder.  In every instance where an attorney or
other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
which authorizes the attorney or other agent to so act on behalf of the
stockholder.  The demand under oath shall be directed to the Corporation at its
registered office in this State or at its principal place of business.

The stock ledger shall be the only evidence as to who are the stockholders
entitled to examine the stock ledger, the list required by Section 1.01 or the
books of the Corporation, or to vote in person or by proxy at any meeting of
the stockholders.

SECTION 1.11.  Conduct of Meetings.  Meetings of the stockholders shall be
presided over by one of the following officers in the order of seniority and if
present and acting:  the Chairman of the Board of Directors, if any, the Vice
Chairman of the Board of Directors, if any, the President, a Vice President,
or, if none of the foregoing is in office and present and acting, by a chairman
to be chosen by the stockholders.  The Secretary of the Corporation, or in his
absence, an Assistant Secretary, shall act as secretary of every meeting, but
if neither the Secretary nor an Assistant Secretary is present, the chairman of
the meeting shall appoint a secretary of the meeting.  In the conduct of a
meeting of the stockholders, all of the powers and authority vested in a
presiding officer by law or practice shall be vested in the chairman of the
meeting.

SECTION 1.12.    Advance Notice of Stockholder Proposals.  At any meeting of
the stockholders, only such business shall be conducted as shall have been
brought before the meeting (i) by or at the direction of the Board of Directors
or (ii) by any stockholder of the Corporation who complies with the notice
procedures set forth in this Section 1.12.  For business to be properly brought
before any meeting of the stockholders by a stockholder, the stockholder must
have given notice thereof in writing to the Secretary of the


                                                                         Page 4
   5

Corporation at the principal executive offices of the Corporation, which written
notice must be received by the Secretary of the Corporation not less than 60
days in advance of such meeting or, if later, the fifteenth day following the
first public disclosure of the date of such meeting (by mailing of notice of the
meeting or otherwise).  A stockholder's notice to the Secretary shall set forth
as to each matter the stockholder proposes to bring before the meeting (1) a
brief description of the business desired to be brought before the meeting and
the reasons for conducting such business at the meeting, (2) the name and
address, as they appear on the Corporation's books, of the stockholder proposing
such business, (3) the class, series and number of shares of the Corporation
that are beneficially owned by the stockholder, and (4) any material interest of
the stockholder in such business.  In addition, the stockholder making such
proposal shall promptly provide any other information reasonably requested by
the Corporation.  Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any meeting of the stockholders except in
accordance with the procedures set forth in this Section 1.12.  The Chairman of
any such meeting shall direct that any business not properly brought before the
meeting shall not be considered.



                                   ARTICLE II

                                   Directors


SECTION 2.01.  Management of Business.  The business of the Corporation shall
be managed by its Board of Directors.

The Board of Directors, in addition to the powers and authority expressly
conferred upon it herein, by statute, by the Certificate of Incorporation of
the Corporation or otherwise, is hereby empowered to exercise all such powers
as may be exercised by the Corporation, except as expressly provided otherwise
by the statutes of the State of Delaware, by the Certificate of Incorporation
of the Corporation or by these By-Laws.

Without prejudice to the generality of the foregoing, the Board of Directors,
by resolution or resolutions, may create and issue, whether or not in
connection with the issue and sale of any shares of stock or other securities
of the Corporation, rights or options entitling the holders thereof to purchase
from the Corporation any shares of its capital stock of any class or classes or
any other securities of the Corporation, such rights or options to be evidenced
by or in such instrument or instruments as shall be approved by the Board of
Directors.  The terms upon which, including the time or times, which may be
limited or unlimited in duration, at or within which, and the price or prices
at which, any


                                                                         Page 5
   6

such rights or options may be issued and any such shares or other securities may
be purchased from the Corporation upon the exercise of any such right or option
shall be such as shall be fixed and stated in the resolution or resolutions
adopted by the Board of Directors providing for the creation and issue of such
rights or options, and, in every case, set forth or incorporated by reference in
the instrument or instruments evidencing such rights or options.  In the absence
of actual fraud in the transaction, the judgment of the directors as to the
consideration for the issuance of such rights or options and the sufficiency
thereof shall be conclusive.  In case the shares of stock of the Corporation to
be issued upon the exercise of such rights or options shall be shares having a
par value, the price or prices so to be received therefor shall not be less than
the par value thereof.  In case the shares of stock to be issued shall be shares
of stock without par value, the consideration therefor shall be determined in
the manner provided in Section 153 of the General Corporation Law of the State
of Delaware.


SECTION 2.02.  Qualifications and Number of Directors.

Directors need not be stockholders.  The number of directors which shall
constitute the whole Board shall be nine (9), but such number as determined by
the Board of Directors may be increased or decreased and subsequently again
from time to time increased or decreased by an amendment to these By-Laws.  In
order to qualify for election or appointment directors shall be younger than 72
years when elected or appointed and a director may be removed by action of the
Board of Directors if such director shall have failed to submit his or her
resignation on or before the first meeting of the Board of Directors occurring
following the 72nd birthday of such director, provided that the Board of
Directors may in its discretion, by specific resolution taken without the
participation of the director in question, waive the provisions of this
sentence with respect to an individual director whose continued service is
deemed uniquely important to the Corporation.

SECTION 2.03.  Election and Term.  The directors shall be elected at the annual
meeting of the stockholders, and each director shall be elected to hold office
until his successor shall be elected and qualified, or until his earlier
resignation or removal.

SECTION 2.04.  Resignations.  Any director of the Corporation may resign at any
time by giving written notice to the Corporation.  Such resignation shall take
effect at the time specified therein, if any, or if no time is specified
therein, then upon receipt of such notice by the Corporation;  and, unless
otherwise provided therein, the acceptance of such resignation shall not be
necessary to make it effective.

SECTION 2.05.  Vacancies and Newly Created Directorships.


                                                                         Page 6
   7

Vacancies and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the directors
then in office, though less than a quorum, or by a sole remaining director, and
the directors so chosen shall hold office until their successors shall be
elected and qualified, or until their earlier resignation or removal.  When one
or more directors shall resign from the Board, effective at a future date, a
majority of the directors then in office, including those who have so resigned,
shall have power to fill such vacancy or vacancies, the vote thereon to take
effect when such resignation or resignations shall become effective, and each
director so chosen shall hold office as herein provided in the filling of other
vacancies.

SECTION 2.06.  Quorum of Directors.  At all meetings of the Board of Directors,
a majority of the entire Board, but not less than two directors, shall
constitute a quorum for the transaction of business, except that when a board
of one director is authorized, then one director shall constitute a quorum.
The act of a majority of the directors present at any meeting at which there is
a quorum shall be the act of the Board of Directors except as provided in
Sections 2.05 and 2.12 hereof.

A majority of the directors present, whether or not a quorum is present, may
adjourn any meeting of the directors to another time and place.  Notice of any
adjournment need not be given if such time and place are announced at the
meeting.

SECTION 2.07.   Annual Meeting.  The newly elected Board of Directors shall
meet immediately following the adjournment of the annual meeting of
stockholders in each year at the same place, within or without the State of
Delaware, and no notice of such meeting shall be necessary.

SECTION 2.08.   Regular Meetings.  Regular meetings of the Board of Directors
may be held at such time and place, within or without the State of Delaware, as
shall from time to time be fixed by the Board and no notice thereof shall be
necessary.

SECTION 2.09.  Special Meetings.  Special meetings may be called at any time by
the President, any Vice-President, the Treasurer or the Secretary or by
resolution of the Board of Directors.  Special meetings shall be held at such
place, within or without the State of Delaware, as shall be fixed by the person
or persons calling the meeting and stated in the notice or waiver of notice of
the meeting.

Special meetings of the Board of Directors shall be held upon notice to the
directors or waiver thereof.


                                                                         Page 7
   8

Unless waived, notice of each special meeting of the directors, stating the time
and place of the meeting, shall be given to each director by delivered letter,
by telegram or by personal communication either over the telephone or otherwise,
in each such case not later than the second day prior to the meeting, or by
mailed letter deposited in the United States mail with postage thereon prepaid
not later than the seventh day prior to the meeting.  Notices of special
meetings of the Board of Directors and waivers thereof need not state the
purpose or purposes of the meeting.

SECTION 2.10.  Action Without a Meeting.  Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in a writing or writings and the writing or
writings are filed with the minutes of proceedings of the Board or committee.

SECTION 2.11.  Compensation.  Directors shall receive such fixed sums and
expenses of attendance for attendance at each meeting of the Board or of any
committee and/or such salary as may be determined from time to time by the
Board of Directors; provided that nothing herein contained shall be construed
to preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.

SECTION 2.12.  Executive Committee.  The Board of Directors may, by resolution
or resolutions, passed by a majority of the whole Board, designate an Executive
Committee (and may discontinue the same at any time) to consist of one or more
of the directors of the Corporation.  The members shall be appointed by the
Board and shall hold office during the pleasure of the Board.  The Board may
designate one or more directors as alternate members of the Committee, who may
replace an absent or disqualified member at any meeting of the Committee.  The
Executive Committee shall have and may exercise all the powers of the Board of
Directors (when the Board is not in session) in the management of the business
and affairs of the Corporation (and may authorize the seal of the Corporation
to be affixed to all papers which may require it), except that the Executive
Committee shall have no power (a) to elect directors; (b) to alter, amend or
repeal these By-Laws or any resolution or resolutions of the directors
designating an Executive Committee; (c) to declare any dividend or make any
other distribution to the stockholders of the Corporation; or (d) to appoint
any member of the Executive Committee.  Regular meetings of the Executive
Committee may be held at such time and place, within or without the State of
Delaware, as shall from time to time be fixed by the Executive Committee and no
notice thereof shall be necessary.  Special meetings may be called at any time
by any officer of the Corporation or any member of the Executive Committee.
Special meetings shall be held at such place, within or without the State of
Delaware, as shall be fixed by the person


                                                                         Page 8
   9

calling the meeting and stated in the notice or waiver of the meeting.  A
majority of the members of the Executive Committee shall constitute a quorum for
the transaction of business and the act of a majority present at which there is
a quorum shall be the act of the Executive Committee.  Notice of each special
meeting of the Executive Committee shall be given (or waived) in the same manner
as notice of a directors' meeting.

SECTION 2.13.  Other Committees.  The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee
to consist of one or more of the directors of the Corporation.  Any such
committee, to the extent provided in the resolution of the Board and subject to
any restrictions or limitations on the delegation of power and authority
imposed by applicable Delaware law, shall have and may exercise all the powers
and authority of the Board in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it.  Any such committee shall keep written minutes of
its meetings and report such minutes to the Board at the next regular meeting
of the Board.



                                  ARTICLE III

                                    Officers


SECTION 3.01.  Number.  The officers of the Corporation shall be chosen by the
Board of Directors.  The officers shall be a President, a Secretary and a
Treasurer, and such number of Vice-Presidents, Assistant Secretaries and
Assistant Treasurers, and such other officers, if any, as the Board may from
time to time determine.  The Board may choose such other agents as it shall
deem necessary.  Any number of offices may be held by the same person.

SECTION 3.02.  Terms of Office.  Each officer shall hold his office until his
successor is chosen and qualified or until his earlier resignation or removal.
Any officer may resign at any time by written notice to the Corporation.

SECTION 3.03.  Removal.  Any officer may be removed from office at any time by
the Board of Directors with or without cause.

SECTION 3.04.  Authority.  The Secretary shall record all of the proceedings of
the meetings of the stockholders and directors in a book to be kept for that
purpose, and shall have the authority, perform the duties and exercise the
powers in the management of the Corporation usually incident to the office held
by him, and/or such other authority, duties and powers as may be assigned to
him from time to time by the Board of Directors or the President.  The other


                                                                         Page 9
   10

officers, and agents, if any, shall have the authority, perform the duties and
exercise the powers in management of the Corporation usually incident to the
offices held by them, respectively, and/or such other authority, duties and
powers as may be assigned to them from time to time by the Board of Directors or
(except in the case of the President) by the President.

SECTION 3.05.  Voting Securities Owned by the Corporation.  Powers of attorney,
proxies, waivers of notice of meeting, consents and other instruments relating
to securities owned by the Corporation may be executed in the name of and on
behalf of the Corporation by the President or any Vice-President and any such
officer may, in the name of and on behalf of the Corporation, take all such
action as any such officer may deem advisable to vote in person or by proxy at
any meeting of security holders of any corporation in which the Corporation may
own securities and at any such meeting shall possess and may exercise any and
all rights and powers incident to the ownership of such securities and which,
as the owner thereof, the Corporation might have exercised and possessed if
present.  The Board of Directors may, by resolution, from time to time confer
like powers upon any other person or persons.


                                   ARTICLE IV

                                 Capital Stock


Section 4.01.  Stock Certificates.  Every holder of stock in the Corporation
shall be entitled to have a certificate signed by, or in the name of the
Corporation by, the Chairman or Vice Chairman of the Board of Directors, or the
President or a Vice-President, and by the Treasurer or an Assistant Treasurer,
or the Secretary or an assistant Secretary, of the Corporation, certifying the
number of shares owned by him in the Corporation.  Where such certificate is
signed (1) by a transfer agent other than the Corporation or its employee, or
(2) by a registrar other than the Corporation or its employee, the signatures
of the officers of the Corporation may be facsimiles.  In case any officer who
has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer at
the date of issue.

SECTION 4.02.  Transfers.  Stock of the Corporation shall be transferable in
the manner prescribed by the laws of the State of Delaware.

SECTION 4.03.  Registered Holders.  Prior to due presentment for registration
of transfer of any security of the Corporation in registered form, the
Corporation shall treat the registered owner as the person exclusively entitled
to vote, to receive


                                                                        Page 10
   11

notifications and to otherwise exercise all the rights and powers of an owner,
and shall not be bound to recognize any equitable or other claim to, or interest
in, any security, whether or not the Corporation shall have notice thereof,
except as otherwise provided by the laws of the State of Delaware.

SECTION 4.04.  New Certificates.  The Corporation shall issue a new certificate
of stock in the place of any certificate theretofore issued by it, alleged to
have been lost, stolen or destroyed, if the owner:  (1) so requests before the
Corporation as notice that the shares of stock represented by that certificate
have been acquired by a bona fide purchaser; (2) files with the Corporation a
bond sufficient (in the judgment of the directors) to indemnify the Corporation
against any claim that may be made against it on account of the alleged loss or
theft of that certificate or the issuance of a new certificate; and (3)
satisfies any other requirements imposed by the directors that are reasonable
under the circumstances.  A new certificate may be issued without requiring any
bond when, in the judgment of the directors, it is proper so to do.


                                   ARTICLE V

                                 Miscellaneous


SECTION 5.01.  Offices.  The registered office of the Corporation in the State
of Delaware shall be at Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801.  The Corporation may also have offices at other
places within and/or without the State of Delaware.

SECTION 5.02.  Seal.  The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its incorporation and the words "Corporate Seal
Delaware."

SECTION 5.03.  Checks.  All checks or demands for money shall be signed by such
person or persons as the Board of Directors may from time to time determine.

SECTION 5.04.  Fiscal Year.  The fiscal year shall begin the first day of
February in each year and shall end on the thirty-first day of January of the
following year.

SECTION 5.05.  Waivers of Notice:  Dispensing with Notice.  Whenever any notice
whatever is required to be given under the provisions of the General
Corporation Law of the State of Delaware, of the Certificate of Incorporation
of the Corporation, or of these By-Laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.  Neither the


                                                                        Page 11
   12

business to be transacted at, nor the purose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice.

                 Attendance of a person at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.

                 Whenever any notice whatever is required to be given under the
provisions of the General Corporation Law of the State of Delaware, of the
Certificate of Incorporation of the Corporation, or of these By-Laws, to any
person with whom communication is made unlawful by any law of the United States
of America, or by any rule, regulation, proclamation or executive order issued
under any such law, then the giving of such notice to such person shall not be
required and there shall be no duty to apply to any governmental authority or
agency for a license or permit to give such notice to such person; and any
action or meeting which shall be taken or held without notice to any such
person or without giving or without applying for a license or permit to give
any such notice to any such person with whom communication is made unlawful as
aforesaid, shall have the same force and effect as if such notice had been
given as provided under the provisions of the General Corporation Law of the
State of Delaware, or under the provisions of the Certificate of Incorporation
of the Corporation or of these By-Laws.  In the event that the action taken by
the Corporation is such as to require the filing of a certificate under any of
the other sections of this title, the certificate shall state, if such is the
fact and if notice is required, that notice was given to all persons entitled
to receive notice except such persons with whom communication is unlawful.

SECTION 5.06.  Loans to and Guarantees of Obligations of Employees and
Officers.  The Corporation may lend money to or guaranty any obligation of, or
otherwise assist any officer or other employee of the Corporation or of a
subsidiary, including any officer or employee who is a director of the
corporation or a subsidiary, whenever, in the judgment of the Board of
Directors, such loan, guaranty or assistance may reasonably be expected to
benefit the Corporation.  The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the Board
of Directors shall approve, including without limitation, a pledge of shares of
stock of the Corporation.  Nothing in this Section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the Corporation
at common law or under any other statute.

SECTION 5.07.  Amendment of By-Laws.  These By-Laws may be altered, amended or
repealed at any meeting of the Board of Directors.


                                                                        Page 12
   13

SECTION 5.08.  Section Headings and Statutory References.  The headings of the
Articles and Sections of these By-Laws, and the references in brackets to
relevant sections of the General Corporation Law of the State of Delaware, have
been inserted for convenience of reference only and shall not be deemed to be a
part of these By-Laws.

                                   ARTICLE VI


SECTION 6.01.  Indemnification of Directors and Officers.  The Corporation
shall, to the fullest extent permitted by law, indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (including without limitation an action by or in the right of
the Corporation) by reason of the fact that he is or was a director or officer
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, that he had reasonable cause to believe that his conduct was
unlawful.

The right of indemnity provided herein shall not be exclusive and the
Corporation may provide indemnification to any person, by agreement or
otherwise, on such terms and conditions as the Board of Directors may approve.
Any agreement for indemnification of any director, officer, employee or other
person may provide indemnification rights which are broader or otherwise
different from those set forth herein.

No repeal or modification of this Article or of relevant provisions of the
Delaware General Corporation Law or any other applicable laws shall affect or
diminish in any way the rights of any person to indemnification under the
provisions hereof with respect to any action, suit, proceeding or investigation
arising out of, or relating to, any actions, transactions or facts occuring
prior to the final adoption of such repeal or modification.


                                                                        Page 13
   14

SECTION 6.02.  Insurance.  The Corporation may purchase and maintain insurance 
on behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as 
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him 
and incurred by him in any such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article.


                                                                        Page 14
   1
                                                                  EXHIBIT 10.15



                            FIRST AMENDMENT TO LEASE


THIS FIRST AMENDMENT TO LEASE (this "First Amendment") made as of the 1st day
of June, 1995, by and between CREEF GEM CORPORATION, a New Jersey corporation,
having an office at c/o Citibank, N.A. - Realty Investment Advisors, 909 Third
Avenue, 30th Floor, New York, New York 10043 ("Lessor"), and TIFFANY & CO.,
having an office at 727 Fifth Avenue, New York, New York 10022 ("Lessee")


                              W I T N E S S E T H:

     WHEREAS, by Lease dated as of May 24, 1985 (the "Lease"), between Lessor
and Lessee, Landlord leased to Tenant that certain office/warehouse building
known as Tiffany Warehouse located at 801 Jefferson Road, Parsippany, N.J., (the
"Premises") as more particularly described in the Lease;

     WHEREAS, the term of the Lease currently expires on May 31, 1995; and

     WHEREAS, Landlord and Tenant desire to modify and amend the Lease as
hereinafter provided.

     NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the adequacy and receipt of
which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

     1.   Section 1.1 of the Lease is hereby amended to delete May 31, 1995 from
the first sentence therein and substitute May 31, 1997 therefor.

     2.   Section 1.2 of the Lease is hereby deleted in its entirety and the
following is substituted therefor:

          "1.2.  Renewal Terms.  Lessee shall have the right, exercisable as
     hereinafter provided, to renew the term of this Lease for one period of
     six months, provided that no Event of Default shall have occurred and be
     continuing at the time of exercise or at the time of commencement of such
     renewal period and this Lease shall not have been terminated as of either
     the time of exercise or the time of commencement of such renewal period.
     Except as otherwise provided herein, such renewal term shall be upon the
     same terms and conditions as those provided in this Lease for the Primary
     Term, except that Lessee shall not have the right

   2

     to renew the term of this Lease beyond the end of such renewal period.
     Lessee may only exercise its right to renew the term by notifying Lessor in
     writing of its election to exercise its right to renew the term at least
     nine months prior to the expiration of the Primary Term.  If Lessee fails
     to notify Lessor within the time and in the manner provided in this
     section, Lessee's right of renewal shall expire.  If such option for
     renewal shall not be exercised, Lessee, at Lessor's request, shall execute
     and deliver to Lessor an instrument, in recordable form, stating that such
     renewal option has not been exercised."

     3.   Section 2.1.1. is hereby amended by adding the following paragraph (e)
at the end thereof:

          "(e)  for the period commencing June 1, 1995 to and including May 31,
     1997, at the annual rate of $1,029,600 per annum."

     4.   Section 2.1.2. is hereby deleted in its entirety and the following is
substituted therefor:

          "2.1.2.  Renewal Term.  If Lessee shall exercise its option to renew
     this Lease as provided in section 1 hereof, Lessee will pay Basic Rent
     during such renewal term, in advance, on the first day of each calendar
     month computed at the rate of $1,158,300 per annum."

     5.   The following Section 44 is hereby added to the Lease:

          "44.  Termination Option.  Notwithstanding any provision contained
     herein to the contrary, Lessee shall have the option, exercisable by
     written notice (the "Termination Notice") delivered to Lessor at any time
     prior to April 30, 1996, time being of the essence, to terminate this Lease
     effective at any date (the "Termination Date") subsequent to January 31,
     1997 and prior to May 31, 1997; provided, however, that Lessee pays to
     Lessor an amount (the "Termination Payment") equal to 50% of the Basic Rent
     that would be due to Lessor for the period commencing on the Termination
     Date and ending on May 31, 1997.  If Lessee effectively terminates this
     Lease by timely delivering the Termination Notice and paying the 
     Termination Payment, this Lease shall terminate on the Termination Date 
     as if such date was the original termination date of the Primary Term."

      6.  Section 12 clause (b) is hereby amended to read as follows:

          "(b)  on 48 hours prior notice to Lessee, exhibiting the Leased
     Premises for the purpose of lease, sale or mortgage, or for the purpose of
     displaying therein advertisements for letting or, for sale."

   3

     7.   Each party hereto covenants, warrants and represents to the other
party that it has had no dealings, conversations or negotiations with any
broker concerning the execution and delivery of this First Amendment.  Each
party hereto agrees to defend, indemnify and hold harmless the other party
against and from any claims for any brokerage commissions and all costs,
expenses and liabilities in connection therewith, including, without limitation,
reasonable attorneys' fees and disbursements, arising out of its respective
representations and warranties contained in this Paragraph 7 being untrue.

     8.   Notwithstanding anything in the contrary contained herein, if, as of
May 31, 1995, there is an Event of Default under the Lease, then, at Landlord's
option, the Lease shall expire as provided therein and this First Amendment
shall be of no force or effect.

     9.   Except as expressly set forth in this First Amendment, the terms and
conditions of the Lease including, without limitation, Section 4 thereof, shall
continue in full force and effect without any change or modification.

     10.  The terms, covenants, conditions and provisions contained in this
First Amendment shall be binding upon and inure to the benefit of Landlord and
Tenant, their respective heirs, representatives, successors and permitted
assigns.

     11.  This First Amendment shall be governed by and construed in accordance
with the laws of the State of New Jersey.

     12.  This First Amendment may not be modified, amended or terminated nor
any of its provisions waived except by an agreement in writing signed by the
party against whom enforcement of any modification, amendment or waiver is
sought.

     13.  This First Amendment shall not be binding upon either party unless and
until it is fully executed and delivered to both parties.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
as of the date and year first above written.


LANDLORD:                             TENANT:

CREEF GEM CORPORATION                 TIFFANY AND COMPANY


By: /s/ Jeffrey Weissman              By: /s/ James N. Fernandez
   -----------------------------         ----------------------------
   Name: Jeffrey Weissman                Name: James N. Fernandez
         -----------------------               ----------------------
   Title: V.P.                           Title: S.V.P. - CFO
          ----------------------                ---------------------

   1

                                                                 EXHIBIT 10.115

TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

         THIS AGREEMENT, is made as of the _____ day of _______________, 19___,
by and between Tiffany and Company ("Tiffany") and
______________________________ ("Employee").

                                   RECITALS:

         A.      Tiffany is a corporation duly organized and validly existing
                 under the laws of The State of New York with its executive
                 offices and principal place of business at 727 Fifth Avenue,
                 New York, NY 10022.

         B.      Employee is a valued and trusted employee of Tiffany.

         C.      In consideration of the faithful performance of services by
                 Employee for Tiffany, Tiffany wishes to benefit Employee by
                 entering into a split-dollar life insurance agreement in
                 accordance with the terms and conditions of this Agreement.

         D.      The split-dollar arrangement provided for in this Agreement,
                 which the parties intend to satisfy the requirements of
                 Revenue Ruling 64-328, 1964-2 C.B. 11, relates to a life
                 insurance policy number _______________ (the "Policy") to be
                 issued by Connecticut General Life Insurance Company or one of
                 its subsidiaries (the "Insurer") on the life of Employee to be
                 owned by Employee subject to a collateral assignment in favor
                 of Tiffany.

         NOW, THEREFORE, the parties mutually agree as follows:

                          1.  Acquisition of Policy.  The parties shall
                          cooperate in applying for and obtaining the Policy.
                          The Policy shall be issued to Employee as the sole and
                          exclusive owner of the Policy, subject to a collateral
                          assignment in favor of Tiffany as hereinafter
                          provided.

                          2.  Payment of Premiums.  Tiffany shall pay the
                          minimum premiums due on the Policy to the Insurer on
                          the date the premium is due or within the grace period
                          allowed by the Policy for the payment of the premium,
                          or such greater premium payment as shall be necessary
                          to keep the Policy in force without a reduction in the
                          death benefit provided under the Policy.  Tiffany
                          shall furnish an annual written statement to Employee
                          setting forth the amount of imputed income, if any,
                          reportable by the employee as a result of Tiffany's
                          payments hereunder, the death benefit payable under
                          the Policy, Aggregate Premiums Paid, as hereinafter
                          defined, and the Cash Surrender Value, as hereinafter
                          defined.
- --------------------------------------------------------------------------------




                                       1
   2

TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

                          3.  Liability of Employee.

                                  A.  Liability.  In consideration of Tiffany's
                          premium payments under this split-dollar arrangement,
                          Employee undertakes the obligation to repay such
                          premium payments to Tiffany in accordance with the
                          provisions of this Agreement.  Employee's obligation
                          to repay such premium payments (the "Liability") shall
                          equal the amount determined in accordance with the
                          following provisions of this Article 3 and Tiffany
                          shall be entitled to recover the Liability in
                          accordance with the terms and conditions of this
                          Agreement, provided, however, that (i) while Employee
                          remains living the Liability shall never exceed the
                          amount available on surrender or partial surrender of
                          the Policy and (ii) following Employee's death the
                          Liability shall never exceed the proceeds available
                          from the Policy.

                                  B.  Termination of Agreement.  Upon
                          termination of this Agreement for any reason other
                          than the death of Employee, the Liability, at such
                          time, shall be an amount equal to the lesser of (i)
                          Aggregate Premiums Paid, as hereinafter defined, or
                          (ii) the Cash Surrender Value, as hereinafter defined.

                                  C.  Death of Employee.  Upon the death of
                          Employee, the Liability shall be an amount equal to
                          Aggregate Premiums Paid as hereinafter defined.

                                  D.  Definitions.  For purposes of this
                          Agreement:

                                        (i)   The Cash Surrender Value of the
                                        Policy at any time equals at such time
                                        the guaranteed cash value under the
                                        Policy; plus any additional cash value
                                        credited to the Policy; less any amounts
                                        withdrawn from the Policy by Tiffany by
                                        means of the surrender or partial
                                        surrender of the Policy; less any policy
                                        loans to Tiffany and accrued interest
                                        thereon at such time.

                                        (ii)  The Aggregate Premiums Paid at any
                                        time equal at such time the cumulative
                                        premiums paid by Tiffany under the
                                        Policy; less any amounts withdrawn from
                                        the Policy by Tiffany by means of the
                                        surrender or partial surrender of the
                                        Policy; less any policy loans to Tiffany
                                        and accrued interest thereon at such
                                        time; less any amounts received by
                                        Tiffany from Employee for the economic
                                        benefit of the Policy.

- --------------------------------------------------------------------------------



                                       2
   3


TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

     4.  Collateral Assignment.

          A. Tiffany's Rights. As security for repayment of the Liability,
     Employee shall execute, in substantially the form attached as Exhibit A, a
     collateral assignment of the Policy to Tiffany (the "Collateral
     Assignment") and Tiffany shall have the rights set forth in the Collateral
     Assignment. As between the parties hereto, Tiffany's rights under the
     Collateral Assignment shall be subject to the limitations hereinafter
     expressed:

               (i) Tiffany's sole right to obtain, directly or indirectly, one
               or more loans or advances against the fund value of the Policy,
               shall be limited to the extent of, but not in excess of, the
               lesser of Aggregate Premiums Paid or the Cash Surrender Value,
               and Tiffany shall have the right to pledge or assign the lesser
               of Aggregate Premiums Paid or the Cash Surrender Value, as
               security for such loans or advances;

               (ii) On the exercise of Tiffany's sole right to make a full or
               partial surrender of the Policy Tiffany may realize up to the
               lesser of Aggregate Premiums Paid or the Cash Surrender Value of
               the Policy; and

               (iii) Tiffany's right to realize the proceeds of the Policy in
               the event of the death of Employee shall be limited to the extent
               of the Liability.

     Tiffany shall also have the right, as between the parties hereto, to
     increase the death benefit payable under the policy, as permitted by the
     Insurer, if it is deemed necessary, in the exercise of Tiffany's judgement,
     to reflect increases in Employee's compensation.

          B. Employee's Rights. Except for the rights granted to Tiffany in the
     Collateral Assignment or reserved to Tiffany above, Employee shall have all
     the rights of the owner under the Policy and Employee shall be entitled to
     exercise all such rights, options, and privileges without the consent of
     Tiffany. Employee's rights include:

               (i) The right to absolutely and irrevocably give a donee all of
               his/her right, title and interest in and to the Policy, subject
               to the Collateral Assignment. Employee may exercise this right by
               executing a written transfer of ownership in the form used by the
               Insurer for 

- --------------------------------------------------------------------------------

                                       3
   4
TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

               irrevocable gifts of insurance policies, and delivering this form
               to Tiffany. Upon receipt of such form, executed by Employee and
               duly accepted by the donee thereof, Tiffany shall consent thereto
               in writing, and shall thereafter treat the Employee's donee as
               the sole owner of all of Employee's right, title and interest in
               and to the Policy, subject to this Agreement and the Collateral
               Assignment. Thereafter, Employee shall have no right, title or
               interest in and to the Policy, all such rights being vested in
               and exercisable only by such assignee. Employee agrees with
               Tiffany that his/her right to assign his/her interest in the
               Policy shall be exercised only in accordance with this Section B
               (i) of Article 4; and

               (ii) The right to designate and to change the beneficiary or
               beneficiaries of the portion of the proceeds of the Policy
               payable, upon the death of Employee, to Employee's beneficiary,
               pursuant to Section B of Article 5 below; and

               (iii) The right to elect any optional form of settlement
               available with respect to the portion of the proceeds of the
               Policy payable, upon the death of Employee, to Employee's
               beneficiary, pursuant to Section B of Article 5 below.

          C. Conflict. As between the parties hereto, in the event of any
     conflict between the terms of the Collateral Assignment and this Agreement,
     the terms of this Agreement shall prevail.

     5.  Death of Employee.

          A. Tiffany's Death Benefit Portion. On the death of Employee, Tiffany
     shall be entitled to recover out of the proceeds of the Policy an amount
     equal to the Liability of Employee to Tiffany as determined under
     Subsection C of Article 3 above.

          B. Employee's Death Benefit Portion. On the death of Employee, the
     beneficiary designated under the Policy shall be entitled to receive the
     balance of the proceeds of the Policy after deducting the Liability.
     Employee and Tiffany agree to conform the beneficiary designation of the
     Policy to the provisions hereof.

- --------------------------------------------------------------------------------

                                       4
   5
TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

          C. Collection of Death Proceeds. Promptly following Employee's death,
     the parties shall take all necessary steps to collect the proceeds of the
     Policy by submitting the proper claim forms to the Insurer. Tiffany shall
     notify the Insurer, by affidavit, of the amount of Liability of Employee to
     Tiffany and the amount of proceeds payable to the beneficiary designated by
     Employee under the Policy. Such amounts shall be paid by the Insurer to
     Tiffany and the beneficiary and such payments shall be a full discharge of
     the Insurer binding on all parties claiming any interest under the Policy.

     6. Termination of Agreement.

          A. Termination Event. Subject to fulfillment of the obligations
     arising upon termination hereinafter or hereinabove set forth, this
     Agreement shall terminate on the first to occur of the following events
     (each referred to as a "Termination Event"):

               (i) The death of Employee.

               (ii) Termination of Employee's employment with Tiffany for any
               reason other than death, including retirement but excluding
               disability retirement, with or without cause.

               (iii) At age 65 for an Employee who is disabled under Article 9
               of this Agreement.

               (iv) Written notice by Tiffany to Employee.

               (v) The bankruptcy, receivership or dissolution of Tiffany.



          B. Disposition of Policy. Within (60) days following a Termination
     Event, other than death, Employee shall pay to Tiffany the Liability. Upon
     receipt of such amount from Employee, Tiffany shall take all steps
     necessary to release the Collateral Assignment so that Employee shall own
     the policy free of all encumbrances thereon in favor of Tiffany arising
     under this Agreement. If Employee does not repay Tiffany the Liability
     within sixty (60) days of a Termination Event, Tiffany, in Tiffany's sole
     discretion, shall take the following action: Tiffany shall withdraw from
     the Policy, by any means available to Tiffany under the terms of the
     Policy as Tiffany in its sole discretion deems advisable, an amount equal
     to the Liability and thereafter release the Collateral

- ------------------------------------------------------------------------------- 

                                       5
   6
TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

     Assignment and otherwise take all steps necessary to transfer its
     interest in the Policy to Employee, without further consideration.

     7.  Provisions Regarding the Insurer.

          A. Bound By Policy. The Insurer shall be bound only by the provisions
     of the Policy and any endorsement thereto.

          B. Discharge. Any payment made or actions taken by the Insurer in
     accordance with the provisions of the Policy and any endorsement thereto
     shall fully discharge the Insurer from all claims, suits, and demands of
     all persons whatsoever.

          C. Insurer Not a Party. The Insurer shall not be deemed a party to, or
     have notice of, this Agreement or the provisions hereof and shall have no
     obligations to see to the performance of the obligations of the parties
     hereunder.

     8.  Special Provisions.

     In compliance with the requirements of Employee Retirement Income Security
     Act of 1974, as amended, the parties hereby confirm:

          A. Named Fiduciary. Tiffany is the named fiduciary of the split-dollar
     life insurance plan of which this Agreement is the written instrument.

          B. Funding. The funding policy of the split-dollar life insurance plan
     is that Tiffany will pay that portion of the premiums under the Policy
     required under Article 2 above.

          C. ERISA Claim Procedure. The following claims procedure shall be
     used:

               (i) The claimant shall file a claim for benefits by notifying
               Tiffany in writing. If the claim is wholly or partially denied,
               Tiffany shall provide a written notice within ninety (90) days
               specifying the reasons for the denial, the provisions of this
               Agreement on which the denial is based, and additional material
               or information, if any, necessary for the claimant to receive
               benefits.

- -------------------------------------------------------------------------------

                                       6
   7
TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

               Such written notice shall also indicate the steps to be taken by
               the claimant if review of the denial is desired.

               (ii) If the claim is denied and review is desired, the claimant
               shall notify Tiffany in writing within sixty (60) days after
               receipt of the written notice of a denial of a claim. In
               requesting a review, the claimant may review plan documents and
               submit written issues and comments the claimant feels are 
               appropriate. Tiffany shall then review the claim and provide
               a written decision within sixty (60) days of receipt of request
               for a review.  This decision shall state the specific reasons
               for the decision and shall include references to specific 
               provisions of this Agreement, if any, upon which the decision 
               is based.

     9.  Disability

     If Employee becomes disabled in accordance with any Tiffany-sponsored
     disability benefits or disability retirement program, the Agreement shall
     continue until otherwise terminated in accordance with Article 6, Section
     A.

     10. Tiffany's Group Life Insurance Plan.

     So long as this Agreement remains effective Tiffany shall not be required
     under its Group Life Insurance Plan, or any successor plan (the "Group
     Plan"), to provide any death benefit to Employee's beneficiary or estate
     and, in the event that Employee retires from Tiffany while this Agreement
     remains effective, to provide any death benefit under the Group Plan,
     notwithstanding the benefits that would otherwise be available to employees
     or retirees under the Group Plan, and Employee hereby waives, on behalf of
     Employee and his or her beneficiaries and estate, any benefits under the
     Group Plan except as provided herein. The limitations and waiver contained
     in this Section 10 are not applicable to coverage provided under Tiffany's
     Accidental Death and Dismemberment Insurance Plan.

     11. Amendment.

     This Agreement may be altered, amended, or modified, including the addition
     of any extra policy provisions, but only by a written instrument signed by
     the parties hereto.

- --------------------------------------------------------------------------------

                                      7
   8
TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

12. Assignment.

A party may assign such party's interest and obligations under this Agreement at
any time subject to the terms and conditions of this Agreement.

13. Governing Law.

This Agreement shall be governed by the laws of the State of New York.

14. Entire Agreement.

This Agreement sets forth the entire agreement of the parties with respect to
the subject matter hereof.  Any and all prior agreements or understandings with
respect to such matters are hereby superseded.

- --------------------------------------------------------------------------------



                                       8
   9
TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

         IN WITNESS WHEREOF, the parties have signed and sealed this Agreement
as of the day and year first written above.


WITNESS:


- ------------------------------------       -------------------------------------
(Witness)                                              (Employee)



ATTEST:                                    Tiffany and Company
                                                 ("Tiffany")


                                         By
- ------------------------------------       -------------------------------------
(Witness)

- --------------------------------------------------------------------------------

                                       9




   10
TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

              RIDER NO. 1 TO SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
                          EMPLOYEE: JOHN Q. EXECUTIVE

         THIS RIDER supplements and amends that certain Split-Dollar Life
Insurance Agreement made as of the ____ day of February, 1994 by and between
Tiffany and Company ("Tiffany") and the Employee named above (the "Agreement").
This Rider shall become part of the Agreement and any term or phrase defined in
the Agreement shall have the same meaning in this Rider.  To the extent that
any term or provision of this Rider conflicts with any term or provision of the
Agreement, this Rider shall supersede and control the Agreement.

A.  DEFINED TERMS.  The following initially capitalized terms and phrases shall
have the meanings ascribed to them below:

         A "CHANGE OF CONTROL" is deemed to have occurred if (i) any person or
         group of persons acting in concert acquires thirty- five percent (35%)
         in voting power or amount of the equity securities of Tiffany & Co., a
         Delaware corporation (the "Company") (including the acquisition of any
         right, option, warrant or other right to obtain such voting power or
         amount, whether or not presently exercisable) unless such acquisition
         is authorized or approved by the Board of Directors of the Company;
         (ii) individuals who constituted the Board of Directors of the Company
         on May 19, 1994 (the "Incumbent Board") cease for any reason to
         constitute at least a majority of such Board of Directors, provided
         that any individual becoming a director subsequent to May 19, 1994
         whose election or nomination for election by the Company's
         stockholders was approved by a vote of at least three quarters of the
         directors comprising the Incumbent Board (either by a specific vote or
         by approval of the proxy statement of the Company in which such
         individual is named as a nominee for director) will be, for the
         purposes of this clause (ii), considered as though such individual
         were a member of the Incumbent Board; or (iii) any other circumstance
         with respect to a change of control of the Company occurs which the
         Board of Directors of the Company deems to be a Change of Control of
         the Company.  As used in this definition of Change of Control, the
         word "person" means an individual or an entity.

         "DISABILITY RETIREMENT" means the termination of Employee's employment
         with Tiffany as a consequence of the fact that Employee has become
         disabled in accordance with the provisions of any Tiffany-sponsored
         disability benefits or disability retirement program.

         "ENDING COMPENSATION" means Employee's mean average annual
         compensation from salary and bonuses (inclusive of amounts deferred
         pursuant to the Tiffany & Co. Executive Deferral Plan and the Tiffany
         & Co. Retirement Income and Savings Plan but exclusive of any other
         compensation, whether paid or deferred, such as, but not limited to,
         income attributable to the exercise of employee stock options and
         taxable income attributable to this Agreement or the Policy) for the
         last three consecutive calendar years of employment completed with
         Tiffany prior to Retirement; if Employee has completed less than three
         consecutive calendar years of employment with Tiffany at Retirement,
         Ending Compensation shall be Employee's annual compensation paid
         during his or her last full calendar year of employment completed; if
         Employee has completed less than one full year of





                                       1



   11

TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

         employment prior to Retirement, Ending Compensation shall be
         Employee's projected annual salary and target bonus during the year of
         Retirement.

         "INTEREST RATE" means, at any date as of which a Required
         Post-Retirement Premium Payment or the Target Surplus must be
         calculated, the higher of .32737% per month, compounded monthly (4%
         compounded yearly) or the rate most recently announced by the Insurer
         for application to the net cash value under the Policy.

         "MATURITY DATE" means March 1, _____ .

         "POLICY FACTORS" means the cost of insurance and expenses in effect
         under the Policy at any date as of which a Required Post-Retirement
         Premium Payment or the Target Surplus must be calculated.

         "POST-RETIREMENT PERIOD" means the period following Retirement and up
         to the Maturity Date.

         "REDUCED EMPLOYEE DEATH BENEFIT" means a reduced death benefit payable
         to Employee from the Policy pursuant to this Agreement equal to Two
         Hundred Percent (200%) of Ending Compensation.

         "REQUIRED POST-RETIREMENT PREMIUM PAYMENTS" means level annual premium
         payments under the Policy made on each March 1 during the Post
         Retirement Period, the schedule of such annual premium payments having
         been calculated (subject to recalculation as provided for below) to
         produce the Target Surplus as of the Maturity Date on the basis of all
         applicable provisions of the Policy and the Interest Rate and Policy
         Factors from time to time.

         "RETIREMENT" means termination of Employee's employment with Tiffany
         under the first to occur of either of the following circumstances (1)
         or (2):

                 (1) termination of Employee's employment for any reason
                 (voluntarily or involuntarily, with or without cause) other
                 than death or Disability Retirement, which termination occurs
                 (a) after the Employee has reached 65 years of age or (b)
                 after the occurrence of a Change in Control; or

                 (2) the voluntary decision of the Employee to terminate
                 his/her employment, which termination (a) occurs after
                 Employee has reached 60 years of age (but before age 65) and
                 (b) is approved by the Board of Directors of Tiffany & Co, a
                 Delaware corporation, or the Compensation Committee of such
                 Board of Directors.

         "SURPLUS" means, at any point in time, the amount, if any, by which
         the Cash Surrender Value of the Policy exceeds the Liability.  For the
         purposes of this definition, the Liability shall be calculated
         exclusive of that portion of the Liability forfeited pursuant to
         Article E below.

         "TARGET SURPLUS" means that amount of Surplus necessary so that (1)
         the owner of the Policy may continue the Policy in force on the
         Employee's life without further payment of premiums with a death
         benefit equal to the Reduced Employee Death Benefit and (2) so that
         such Policy will endow





                                       2



   12



TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

         (net cash value becomes equal to the Reduced Employee Death Benefit)
         when the Employee reaches age 95, assuming that the Interest Rate and
         Policy Factors in effect at the time that the Target Surplus is
         calculated continues in effect until the Employee reaches age 95 and
         that no further premium payments are made after the date of such
         calculation.

B.  NO TERMINATION BY NOTICE FOLLOWING CHANGE OF CONTROL.  On the occurrence of
a Change of Control, Article 6.A.(iv) of the Agreement will no longer
constitute a Termination Event with the effect that Tiffany will be no longer
be entitled to unilaterally terminate the Agreement by written notice to
Employee.

C.  TARGET SURPLUS NOT OBTAINED BY RETIREMENT.  Subject to Article E. below,
if, on Retirement, the Surplus is not equal to or in excess of the Target
Surplus, then this Agreement shall, notwithstanding the subsequent occurrence
of any Termination Event (other than the death of Employee), remain in force
until the earlier of the Maturity Date or the death of Employee and Tiffany
shall have the right, as between the parties to this Agreement, to make such
adjustments to the Policy as necessary, from time to time, so that the death
benefit payable under the Policy will equal the Reduced Employee Death Benefit
plus the projected amount of the Liability at the Maturity Date on the basis of
the then current schedule of Required Post-Retirement Premium Payments.

D.  REQUIRED POST-RETIREMENT PREMIUM PAYMENTS.  If this Agreement continues in
effect following Retirement as provided for in Article C of this Rider, Tiffany
shall, on or before March 1 of every year during the Post Retirement Period
make Required Post- Retirement Premium Payments to the Insurer.  Tiffany shall
make its initial calculation of the schedule of Required Post-Retirement
Premium Payments on the basis of the Interest Rate and Policy Factors at the
time of Retirement and provide such schedule to Employee within thirty (30)
days of Retirement.  In the event that the Insurer changes the Interest Rate
and/or the Policy Factors on one or more occasions during the Post Retirement
Period, Tiffany shall, on each such occasion, revise the schedule of Required
Post-Retirement Premium Payments within thirty (30) days after receipt of
notice of the change in Interest Rate and provide Employee with its revised
calculations.  Tiffany shall make all Required Post-Retirement Premium Payments
on the basis of the most recently revised schedule of payments.

E.  FAILURE TO MAKE REQUIRED POST-RETIREMENT PREMIUM PAYMENTS.  If Tiffany
fails to make any Required Post-Retirement Premium Payment within thirty days
of a written demand from Employee that such payment be made, then the Employee
shall have the option of terminating this Agreement and Tiffany shall, on
exercise of such option, forfeit its right to repayment of all or such portion
of the Liability sufficient so that the Surplus is made equal to the Target
Surplus as of the date of such option exercise.  Failure to exercise such
option shall not foreclose Employee from any other remedy at law or equity for
Tiffany's failure to make such payment, including specific enforcement, and the
exercise of such option shall not be deemed a waiver of Employee's right to
recover damages for Tiffany's breach if forfeiture of Tiffany's right to
repayment of the Liability does not make the Surplus equal to the Target
Surplus.

F.  DISPUTES CONCERNING CALCULATION OF REQUIRED POST-RETIREMENT PREMIUM
PAYMENTS; ATTORNEYS' FEES.  In the event of any controversy or claim arising
out of or relating to the calculation of Required Post-Retirement Premium
Payments, the Target Surplus or both, the parties to this Agreement agree that
such controversy or claim shall be settled by arbitration in accordance with
the then current Commercial





                                       3



   13



TIFFANY AND COMPANY
Split-Dollar Life Insurance Agreement

================================================================================

Arbitration Rules of the American Arbitration Association (the "Association")
to the extent that such Rules do not conflict with any provisions of this
Article F.  The arbitration shall be held at a regional office of the
Association serving the City of New York.  The arbitration shall be held before
a single arbitrator chosen from a panel of persons knowledgeable in the field
of life insurance.  The arbitrators shall interpret the Agreement in accordance
with the laws of the State of New York.  Any award, order or judgment pursuant
to such arbitration shall be deemed final and may be entered and enforced in
any state or federal court of competent jurisdiction.  Each party agrees to
submit to the jurisdiction of any such court for purposes of the enforcement of
any such award, order or judgment.  In any arbitration proceeding hereunder, or
in any judicial proceeding to enforce this Agreement or obtain damages for its
breach, the arbitrator and/or the court shall award reasonable attorneys' fees
and other costs to the prevailing party.

         IN WITNESS WHEREOF, the parties have signed and sealed this Rider as
of the ___ day of ________, 1994.

WITNESS:


- ------------------------------------       -------------------------------------
                                           (Employee)



ATTEST:                                    Tiffany and Company
                                                 ("Tiffany")


                                         By
- ------------------------------------       -------------------------------------




                                       4




   1
                                                                   EXHIBIT 11.1

Item 6.                       TIFFANY & CO. AND SUBSIDIARIES

EXHIBIT 11            STATEMENT RE COMPUTATION OF PER SHARE EARNINGS

                          (in thousands, except per share data)

Years Ended ------------------------------------------------ January 31, January 31, January 31, 1995 1994 1993 ----------- ----------- ----------- PRIMARY EARNINGS PER SHARE: Net income/(loss) on which primary earnings per share are based $29,341 $(10,242) $15,712 ======= ======== ======= Weighted average number of shares on which primary earnings are based 15,898 15,781 15,786 ======= ======== ======= Primary net income/(loss) per common share $ 1.85 $ (0.65) $ 1.00 ======= ======== ======= FULLY DILUTED EARNINGS PER SHARE: Net income/(loss) on which primary earnings per share are based $29,341 $(10,242) $15,712 Add: Interest and fees on convertible subordinated debt, net of applicable income taxes 1,712 1,844 1,945 ------- -------- -------- Net income/(loss) on which fully diluted earnings per share are based 31,053 $ (8,398) $17,657 ======= ======== ======= Weighted average number of common shares used in calculating fully diluted earnings per share 15,898 15,781 15,786 Shares assumed upon conversion of convertible debt, using the "if converted" method 893 893 893 ------- ------- ------- Weighted average number of shares used in calculating fully diluted earnings per share 16,791 16,674 16,679 ======= ======== ======== Fully diluted net income/(loss) per common share $ 1.85 $ (0.65) $ 1.00 ======= ======== ========
NOTE: As a result of the 6 3/8% Convertible Subordinated Debenture's dilutive effect in future periods, fully diluted earnings per share reflects the weighted average number of common shares outstanding under the "if converted" method which assumes conversion as of the bond issuance date of the Debentures. Since the "if converted" method had no effect on fully diluted earnings per share (antidilutive) for the years ended January 31, 1995, 1994 and 1993 primary earnings per share was used for financial statement presentation purposes.
   1
                                                                EXHIBIT 13.1


SELECTED FINANCIAL DATA

The following table sets forth selected financial data with respect to the
Company for Fiscal 1987-Fiscal 1994. All share and per share data have been
retroactively adjusted to reflect the three-for-two split of the Company's
Common Stock effected in the form of a share distribution ("stock dividend") in
Fiscal 1989.


(in thousands, except per FISCAL Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal share amounts and employees) 1994 1993 1992 1991 1990 1989 1988 1987 - ------------------------------------------------------------------------------------------------------------------------ EARNINGS DATA: Net sales $682,831 $566,501 $486,396 $491,906 $455,712 $383,964 $290,344 $230,488 Gross profit 358,202 232,882 237,033 243,009 223,600 191,683 144,511 112,140 Income/(loss) from operations 64,655 (10,029) 26,741 61,028 67,806 60,977 44,193 33,691 Income/(loss) before accounting change and extraordinary item 29,341 (10,242) 15,712 31,805 36,661 33,305 24,901 16,820 Income/(loss) per share before accounting change and extraordinary item: Primary 1.85 (0.65) 1.00 2.01 2.34 2.13 1.62 1.17 Fully diluted 1.85 (0.65) 1.00 2.01 2.34 2.13 1.62 1.17 Weighted average number of common shares (primary) 15,898 15,781 15,786 15,835 15,694 15,606 15,332 14,300 BALANCE SHEET DATA: Total assets $551,372 $504,409 $419,355 $394,882 $307,268 $237,061 $162,648 $126,669 Inventories 270,075 262,282 224,151 213,435 173,964 142,545 103,771 70,778 Working capital 234,687 212,266 199,334 159,466 131,219 112,735 81,329 66,772 Capital expenditures 18,977 18,103 22,754 41,385 24,835 14,040 9,680 1,895 Short-term borrowings 60,696 59,289 22,458 43,566 31,046 14,339 7,253 -- Long-term debt 101,500 101,500 101,500 50,000 18,226 18,226 -- -- Stockholders' equity 221,697 189,081 204,806 200,039 176,183 135,568 99,193 71,621 Book value per share 14.12 12.07 13.11 12.61 11.24 8.71 6.46 5.56 Cash dividends per share 0.28 0.28 0.28 0.28 0.26 0.18 0.10 -- Numberof employees 3,306 3,133 2,865 2,735 2,379 2,085 1,741 1,324
8 Tiffany & Co. and Subsidiaries 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The Company operates three channels of distribution: U.S. Retail includes retail sales in Company-operated stores in the U.S. and wholesale sales to independent retailers in North America; Direct Marketing includes corporate (business-to business) and catalog sales; and International Retail includes retail sales through Company-operated stores and boutiques, corporate sales, and wholesale sales to independent retailers and distributors in Asia-Pacific, Europe, Canada and the Middle East. Net sales by channel of distribution:
FISCAL Fiscal Fiscal (in thousands) 1994 1993 1992 - --------------------------------------------------------------- U.S. Retail $308,290 $268,706 $241,127 Direct Marketing 92,684 87,429 89,541 International Retail 281,857 210,366 155,728 ------------------------------ $682,831 $566,501 $486,396 ============================== (percentage of net sales) - ------------------------- U.S. Retail 45% 47% 50% Direct Marketing 14 16 18 International Retail 41 37 32 ----------------------------- 100% 100% 100% =============================
NET SALES increased 21% in Fiscal 1994 and 16% in Fiscal 1993. U.S. Retail sales increased 15% and 11% in Fiscal 1994 and 1993, and comparable store sales rose 12% and 8%. Sales in the New York store rose 11% to $130,602,000 in Fiscal 1994 after increasing 2% to $117,700,000 in Fiscal 1993, and represented 19%, 21% and 24% of total Company sales in Fiscal 1994, 1993 and 1992. Comparable branch store sales increased 14% and 13% in Fiscal 1994 and 1993. The Company opened two new U.S. TIFFANY & CO. stores in Fiscal 1994 and opened one store and closed one boutique in Fiscal 1993. Sales growth in Fiscal 1994 was primarily due to a higher volume of retail transactions, while in Fiscal 1993 it was due to an increase in the average transaction amount. In both years, higher sales were primarily generated by sales made to local-resident customers. Sales to international tourists represented 14% of retail store sales in the U.S. in Fiscal 1994, compared with 15% in both Fiscal 1993 and 1992. Wholesale trade and fragrance sales to independent retailers in North America increased in both Fiscal 1994 and 1993 and represented 8% of U.S. Retail sales in Fiscal 1994, 1993 and 1992. Direct Marketing sales increased 6% in Fiscal 1994, following a 2% decline in Fiscal 1993. Corporate sales, representing approximately two-thirds of the sales in this channel, rose 2% in Fiscal 1994 after declining 4% in Fiscal 1993. Although the number of corporate orders increased in both years, there was a decline in average order size, which management attributes to continued conservative spending by U.S. corporations. Catalog sales increased 16% and 1% in Fiscal 1994 and 1993. The Company mailed 15.0 million catalogs in Fiscal 1994, compared with 14.1 million in Fiscal 1993 and 12.9 million in Fiscal 1992. Catalog sales in Fiscal 1994 primarily benefitted from a higher catalog response rate, which resulted in an increased number of orders, while Fiscal 1993 sales were affected by a lower catalog response rate and a lower average order size. International Retail sales increased 34% in Fiscal 1994 and 35% in Fiscal 1993. Sales in the first half of Fiscal 1994 were not directly comparable with the first half of Fiscal 1993 due to the realignment of the Company's Japan business in July 1993 (discussed below). Total Japan sales increased 44% in Fiscal 1994 and 57% in Fiscal 1993. When measured in yen, comparable store sales increased 3% in Fiscal 1994 following a 14% decline in Fiscal 1993 (for comparison purposes, Fiscal 1993 and 1992 sales include retail sales made in boutiques that were operated by Mitsukoshi Ltd. prior to and in the first half of Fiscal 1993). Total Japan sales represented approximately 28%, 23% and 17% of total Company sales in Fiscal 1994, 1993 and 1992. Sales in Japan in Fiscal 1994 and 1993 were negatively affected by economic conditions in Japan and favorably affected by the Company's merchandising, marketing and publicity initiatives, including significant price reductions (discussed below). In addition, three TIFFANY & CO. boutiques, which represent 5% of retail sales in Japan, closed in January 1995 following an earthquake. Any future effect on consumer spending in Japan from the earthquake cannot be predicted, nor is it known if or when the closed boutiques may reopen, but the Company expects to open additional boutiques in Fiscal 1995. The Company also achieved sales growth in its other Asia-Pacific markets. In Europe, total sales increased 15% in Fiscal 1994 and decreased 6% in Fiscal 1993. Comparable European retail store sales, when measured in local currencies, were unchanged in Fiscal 1994 following a 2% increase in Fiscal Tiffany & Co. and Subsidiaries 9 3 1993. Three new TIFFANY & CO. international retail locations were opened in Fiscal 1994, following the opening of five locations in Fiscal 1993. In July 1993, the Company effected a realignment of its business in Japan by assuming merchandising and marketing responsibilities for each of the 29 TIFFANY & CO. boutiques previously operated by Mitsukoshi Ltd., an operator of department stores. Under the new arrangement, Mitsukoshi no longer purchases TIFFANY & CO. merchandise on a wholesale basis for resale in Japan. Instead, Mitsukoshi acts for the Company in the sale of merchandise owned by the Company, and the Company recognizes as revenues the retail price charged to the ultimate consumer in Japan (as opposed to the wholesale price previously charged to Mitsukoshi). Mitsukoshi is paid at the rate of approximately 27% of retail sales in compensation for providing boutique facilities and sales and clerical staff, as well as for the collection of receivables and security of store inventories. The new arrangement entails greater seasonality in sales for the Company than did the prior wholesale arrangement with Mitsukoshi. The Company incurs greater expenses in Japan under the new arrangement, but also records higher revenues at the retail level. In general, management believes that the Company's increased revenues and corresponding gross profit more than offset the increased expenses. As a result of the business realignment in Japan, the Company's reported sales and earnings results benefit from a strengthening Japanese yen and are adversely affected by a strengthening U.S. dollar. To reduce the potential negative impact of a significant strengthening of the dollar against the yen on the Company's financial results, in early Fiscal 1994 the Company initiated a foreign currency hedging program for merchandise purchase transactions initiated from Japan. The Company's pretax expense related to its hedging program was $991,000 in Fiscal 1994. Since the realignment, the Company has made a number of changes in its Japan business that have affected sales, gross margins, inventory levels and operating expenses. In June 1994, the Company reduced Japan retail prices by approximately 25% on products that generate approximately 55% of Japan retail sales. In October 1993, prices of solitaire diamond rings, which represent more than one-third of sales in Japan, were reduced approximately 20%. These reductions, done in part to offset the effect of a strengthening yen, were taken to make pricing for TIFFANY & CO. brand merchandise more competitive with both Japanese and imported brands in Japan by reducing the premium over New York prices to approximately 50%. In the past, retail prices of imported luxury goods in Japan typically reflected a substantial premium to "home market" prices, although a recent trend among retailers in Japan has been to reduce that premium. Other improvements made since the Japan realignment, some of which will not be fully implemented before the end of Fiscal 1995, include the establishment of processes and systems to improve merchandise availability and to expedite the flow of merchandise to the boutiques; an increase in advertising expenditures directed to Japan; and improved visual merchandising within the boutiques. GROSS MARGIN (gross profit as a percentage of net sales) was 52.5% in Fiscal 1994, compared with 51.3% (excluding the effect of the nonrecurring charge related to the Japan business realignment) in Fiscal 1993 and 48.7% in Fiscal 1992. The increases were primarily due to the effect of recording higher retail sales as part of the Japan realignment. Based on current plans, the Company's objective is to maintain full-year gross margin at approximately current levels. OPERATING EXPENSES (selling, general and administrative expenses and the provision for uncollectible accounts) increased 21% and 16% in Fiscal 1994 and 1993. The increases were largely due to the effect of the Japan realignment (staffing-related expenses and sales-related variable expenses--primarily fees paid to department stores), the weakened U.S. dollar and its effect on translating foreign operating expenses into U.S. dollars, and incremental occupancy, staffing and marketing expenses related to the Company's worldwide expansion program. As a percentage of net sales, operating expenses were 43.0% in Fiscal 1994, compared with 42.9% and 43.2% in Fiscal 1993 and 1992. INTEREST EXPENSE increased in Fiscal 1994 and 1993, primarily due to higher average short-term borrowings to support the Company's worldwide expansion program and the effect of the Japan realignment. A significant portion of the Company's short-term borrowings at January 31, 1995 and 1994 was denominated in Japanese yen and was used to support the local working capital requirements of the Company's Japan operations. Based on current plans, management expects slightly higher interest expense in Fiscal 1995. THE PROVISION/(BENEFIT) FOR INCOME TAXES resulted in an effective tax rate of 43.1% in Fiscal 1994, (43.1)% in Fiscal 1993 and 21.1% in Fiscal 1992. The disproportionate effective tax rate in Fiscal 1992 primarily resulted from an adjustment to tax reserves that had been established for the Company's 1985-1988 fiscal years (see Note O to Consolidated Financial Statements). 10 4 ACCOUNTING STANDARDS: In November 1992, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 112, "Accounting for Postemployment Benefits." The adoption of this new standard in Fiscal 1994, as required, did not have a material effect on the Company's consolidated results of operations or financial condition. FINANCIAL CONDITION LIQUIDITY AND CAPITAL RESOURCES: Management believes that the Company's financial condition at January 31, 1995 provides sufficient liquidity and resources to support current business activity and planned expansion. Working capital and the corresponding current ratio were $234,687,000 and 2.4:1 at January 31, 1995 and $212,266,000 and 2.4:1 at January 31, 1994. Accounts receivable decreased 8% in Fiscal 1994, following a 31% increase in Fiscal 1993. Accounts receivable performance in Fiscal 1994 represented improved collection productivity relative to sales growth, while the increase in Fiscal 1993 primarily reflected higher sales levels and receivables in Japan due to the business realignment. Inventories (which represent the largest component of both working capital and current assets) increased 3% in Fiscal 1994 and 17% in Fiscal 1993. In both years, the increases were due to merchandise purchases to support sales growth, new store openings and expanded product offerings. In addition, the increase in Fiscal 1994 reflected the weakened U.S. dollar and its effect on translating foreign inventories into U.S. dollars, while the increase in Fiscal 1993 reflected inventory repurchased from Mitsukoshi as part of the Japan business realignment. Inventory turnover was 0.9 times at January 31, 1995 and 1994. The Company is taking several steps to improve inventory performance: replenishment systems are being refined; merchandising management is being reorganized to increase the focus on the specialized disciplines of product development, assortment planning and inventory management; a visual merchandising group has been created to improve the presentation and management of display inventories in each store; and assortment editing by product category is being pursued. Capital expenditures were $18,977,000, $18,103,000 and $22,754,000 in Fiscal 1994, 1993 and 1992. In all three years, these expenditures were required for the opening of new stores and the expansion of certain existing stores, for the renovation and expansion of administrative office facilities and for enhanced computer operations and distribution capabilities. Based on current expansion plans, the Company expects capital expenditures in Fiscal 1995 will be approximately $30,000,000. Cash dividends of $0.28 per share of Common Stock were paid in Fiscal 1994, 1993 and 1992. The Company expects to retain the majority of its earnings to support its business and future expansion. The Company incurred a net cash inflow from operating activities of $65,574,000 in Fiscal 1994, compared with an outflow of $19,502,000 in Fiscal 1993. Net debt (short-term borrowings and long-term debt, less cash and short-term investments) was $117,878,000 and $155,795,000 at January 31, 1995 and 1994. The ratio of net debt to total capital (net debt and stockholders' equity) was 35% and 45% at January 31, 1995 and 1994. In addition, the Company had a long-term trade payable of yen 2,750,000,000 ($27,591,000) at January 31, 1995 and yen 2,750,000,000 ($25,394,000) at January 31, 1994, which relates to certain merchandise repurchased in Fiscal 1993 under the Japan business realignment and is payable to Mitsukoshi on February 28, 1998. Inventory and debt levels have been increased in recent years to support the Company's long-term, worldwide expansion strategies and the Company's Fiscal 1993 realignment of its Japan business; however, it is management's goal to improve inventory turnover, generate excess cash flow and reduce the ratio of net debt to total capital. The Company's sources of working capital are internally generated funds and funds available under a $100,000,000 revolving credit facility and a yen 2,500,000,000 ($25,100,000) line of credit. The Company's operations and expansion programs were supported with internally generated funds in Fiscal 1994, but were financed with revolving credit facility funds in Fiscal 1993. The Company is in the process of arranging for a new five-year $130,000,000 agented multicurrency revolving credit facility to replace the current $100,000,000 credit facility as well as the yen 2,500,000,000 non-collateralized line of credit, both of which expire in July 1995. The Company has received signed commitment letters from the participating lenders, subject to their satisfactory review of documentation. Management anticipates that internally generated funds and funds available under the new facility will be sufficient to support planned worldwide business expansion, as well as seasonal working capital increases typically required during the third and fourth quarters of each year. SEASONALITY: The Company's business is seasonal in nature, with the fourth quarter typically representing a proportionally greater percentage of annual sales, income from operations, net income and cash flow. Management expects such seasonality to continue in the future. 11 5 CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended January 31, -------------------------------- (in thousands, except per share amounts) 1995 1994 1993 - ------------------------------------------------------------------------------------------------------------------------ Net sales $682,831 $566,501 $486,396 Product return for Japan realignment -- (115,000) - -------------------------------- 682,831 451,501 486,396 Cost of goods sold 324,629 276,119 249,363 Cost related to product return for Japan realignment -- (57,500) -- -------------------------------- Gross profit 358,202 232,882 237,033 Selling, general and administrative expenses 291,722 240,283 209,140 Provision for uncollectible accounts 1,825 2,628 1,152 ------------------------------- Income/(loss) from operations 64,655 (10,029) 26,741 Interest expense and financing costs 12,942 9,562 7,231 Other (deductions)/income (147) 1,591 415 ------------------------------- Income/(loss) before income taxes 51,566 (18,000) 19,925 Provision/(benefit) for income taxes 22,225 (7,758) 4,213 NET INCOME/(LOSS) $ 29,341 $(10,242) $ 15,712 ================================ Net income/(loss) per share: Primary $ 1.85 $ (0.65) $ 1.00 ================================ Fully diluted $ 1.85 $ (0.65) $ 1.00 ================================ Weighted average number of common shares: Primary 15,898 15,781 15,786 Fully diluted 16,791 16,674 16,679
See notes to consolidated financial statements. 12 Tiffany & Co. and Subsidiaries 6 CONSOLIDATED BALANCE SHEETS
January 31, ------------------------- (in thousands) 1995 1994 - -------------------------------------------------------------------------------------------------------------------- ASSETS Current assets: Cash and short-term investments $ 44,318 $ 4,994 Accounts receivable, less allowances of $5,721 and $4,170 61,622 67,330 Income tax receivable 7,925 12,517 Inventories 270,075 262,282 Prepaid expenses 17,868 17,718 ------------------------- Total current assets 401,808 364,841 Property and equipment, net 103,478 97,365 Deferred income taxes 14,094 15,404 Other assets, net 31,992 26,799 ------------------------- $551,372 $504,409 ========================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: $ 60,696 $ 59,289 Short-term borrowings 84,289 79,980 Accounts payable and accrued liabilities 13,607 6,359 Income taxes payable 8,529 6,947 Merchandise and other customer credits ------------------------- Total current liabilities 167,121 152,575 Long-term trade payable 27,591 25,394 Reserve for product return 13,103 13,663 Long-term debt 101,500 101,500 Deferred income taxes 3,298 6,758 Postretirement/employment benefit obligation 16,581 14,320 Other long-term liabilities 481 1,118 Commitments and contingencies Stockholders' equity: Common Stock, $.01 par value; authorized 30,000 shares, issued 15,703 and 15,660 157 157 Additional paid-in capital 71,821 70,498 Retained earnings 151,032 126,082 Foreign currency translation adjustments (1,313) (7,656) ------------------------- Total stockholders' equity 221,697 189,081 ------------------------- $551,372 $504,409 =========================
See notes to consolidated financial statements. Tiffany & Co. and Subsidiaries 13 7 CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended January 31. -------------------------------- (in thousands) 1995 1994* 1993* - --------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income/(loss) $ 29,341 $(10,242) $ 15,712 Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: Depreciation and amortization 16,501 13,587 11,425 Provision for uncollectible accounts 1,825 2,628 1,152 Provision for product return -- 57,500 -- Reduction in reserve for product return (560) (43,837) -- Provision for inventories 1,788 3,833 2,020 Provision for operational realignment -- -- 7,000 Deferred income taxes (2,039) (7,181) (4,596) Income tax receivable 4,592 ( 12,517) -- Provision for postretirement/employment benefits 2,261 1,550 1,600 (Increase)/decrease in assets and increase/ (decrease) in liabilities, net of acquisitions: Accounts receivable 5,839 (18,264) ( 1,976) Inventories 2,630 (16,015) (17,586) Prepaid expenses 393 (7,193) 1,474 Other assets, net (7,863) (1,850) (7,278) Accounts payable (3,055) 11,384 (17,188) Accrued liabilities 5,817 3,825 6,610 Income taxes payable 6,700 3,044 (4,906) Merchandise and other customer credits 1,582 1,629 631 Other long-term liabilities (178) (1,383) 352 ------------------------------- Net cash provided by/(used in) operating activities 65,574 (19,502) (5,554) ------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (18,977) (18,103) (22,754) Acquisitions, net of cash acquired -- -- (945) Other (133) 2,450 4,310 ------------------------------- Net cash used in investing activities (19,110) (15,653) (19,389) ------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: (Decrease)/increase in short-term borrowings (4,072) 36,912 (21,200) Proceeds from debt offering -- -- 51,500 Proceeds from exercise of stock options 967 569 1,095 Tax benefit from exercise of stock options 356 377 619 Cash dividends on Common Stock (4,391) (4,381) (4,371) ------------------------------- Net cash (used in)/provided by financing activities (7,140) 33,477 27,643 ------------------------------- Net increase/(decrease) in cash and short-term investments 39,324 (1,678) 2,700 Cash and short-term investments at beginning of year 4,994 6,672 3,972 ------------------------------- Cash and short-term investments at end of year $ 44,318 $ 4,994 $ 6,672 ===============================
* Reclassified for comparative purposes. See notes to consolidated financial statements. 14 Tiffany & Co. and Subsidiaries 8 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Foreign Total Common Stock Additional Currency Treasury Stock Stockholders' ----------------- Paid-in Retained Translation ------------------- (in thousands) Equity Shares Amount Capital Earnings Adjustments Shares Amount - ----------------------------------------------------------------------------------------------------------------------------------- Balances, January 31,1992 $200,039 15,865 $159 $67,927 $129,364 $ 2,680 (299) $(91) Exercise of stock options 1,095 54 -- 1,095 -- -- -- -- Tax benefit from exercise of stock options 619 -- -- 619 -- -- -- -- Cash dividends on Common Stock (4,371) -- -- -- (4,371) -- -- -- Foreign currency translation adjustments (8,288) -- -- -- -- (8,288) -- -- Retirement of Treasury Stock -- (299) (3) (88) -- 299 91 Net income 15,712 -- -- -- 15,712 -- -- -- ---------------------------------------------------------------------------------------------- Balances, January 31,1993 204,806 15,620 156 69,553 140,705 (5,608) -- -- Exercise of stock options 569 40 1 568 -- -- -- -- Tax benefit from exercise of stock options 377 -- -- 377 -- -- -- -- Cash dividends on Common Stock (4,381) -- -- -- (4,381) -- -- -- Foreign currency translation adjustments (2,048) -- -- -- -- (2,048) -- -- Net loss (10,242) -- -- -- (10,242) -- -- -- ----------------------------------------------------------------------------------------------- Balances, January 31, 1994 189,081 15,660 157 70,498 126,082 (7,656) -- -- Exercise of stock options 967 43 -- 967 -- -- -- -- Tax benefit from exercise of stock options 356 -- -- 356 -- -- -- -- Cash dividends on Common Stock (4,391) -- -- -- (4,391) -- -- -- Foreign currency translation adjustments 6,343 -- -- -- -- 6,343 -- -- Net income 29,341 -- -- -- 29,341 -- -- -- ---------------------------------------------------------------------------------------------- BALANCES, JANUARY 31, 1995 $221,697 15,703 $157 $71,821 $151,032 $(1,313) -- -- ==============================================================================================
See notes to consolidated financial statements. Tiffany & Co. and Subsidiaries 15 9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Tiffany & Co. and all majority-owned domestic and foreign subsidiaries (the "Company") after elimination of all material intercompany balances and transactions. CASH AND SHORT-TERM INVESTMENTS AND SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Short-term investments with a maturity of 90 days or less when purchased are considered cash equivalents. The carrying amount of these instruments approximates fair value due to their short-term maturity. Supplemental cash flow information for the years ended January 31, 1995, 1994 and 1993 is as follows:
(in thousands) 1995 1994 1993 - ------------------------------------------------------------------------------------------------------- Cash paid during the year for: Interest $12,445 $8,714 $ 6,571 ------------------------------------------------- Income taxes $13,326 $5,535 $13,932 ------------------------------------------------- Details of businesses acquired in purchase transactions were as follows: Fair value of assets acquired $ -- $ -- $ 1,284 Less: Liabilities assumed -- -- 339 ------------------------------------------------- Net cash paid for acquisitions $ -- $ -- $ 945 =================================================
RECEIVABLES AND FINANCE CHARGES Accounts receivable finance charge income on retail revolving charge accounts was not material and has been included as a reduction in selling, general and administrative expenses. The Company's domestic and international presence and large diversified customer base serve to limit overall credit risk. The Company maintains reserves for potential credit losses, and such losses, in the aggregate, have not exceeded expectations. INVENTORIES Inventories are valued at the lower of cost or market with cost being determined by the LIFO (last-in, first-out) method for domestic and foreign branch inventories and the FIFO (first-in, first-out) method for inventories held by foreign subsidiaries. PROPERTY AND EQUIPMENT Property and equipment is depreciated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the useful lives of the improvements or the terms of the related leases. Expenditures for repairs and maintenance are charged to operations as incurred, and expenditures for major renewals and betterments are capitalized. PREOPENING COSTS Costs associated with the opening of new retail stores are charged to operations in the period incurred. ADVERTISING Advertising costs are expensed as incurred and aggregated $21,800,000, $18,100,000 and $19,400,000 for the years ended January 31, 1995, 1994 and 1993. INCOME TAXES The Company, its domestic subsidiaries and its foreign branches file a consolidated Federal income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income tax items. FOREIGN CURRENCY TRANSLATION In accordance with Statement of Financial Accounting Standards No. 52, assets and liabilities of foreign operations are translated into U.S. dollars using current exchange rates in effect at the balance sheet date, while revenue and expense accounts are translated at average rates of exchange prevailing during the period. Adjustments resulting from such translation are included as a separate component of stockholders' equity. The Company recognized $924,000 and $1,534,000 of net foreign currency transaction gains (included in Other (deductions)/income) related to its foreign operations for the years ended January 31, 1995 and 1994. Gains or losses resulting from foreign currency transactions were not material for the year ended January 31, 1993. REVENUE RECOGNITION The Company recognizes revenue at the "point of sale," which occurs when merchandise is taken in an "over-the-counter" transaction or upon shipment to a customer. For 16 Tiffany & Co. and Subsidiaries 10 the years ended January 31, 1995, 1994 and 1993, the largest portion of the Company's sales were denominated in U.S. dollars. GOODWILL Goodwill represents the excess of cost over fair value of net assets acquired and is being amortized over 20 years using the straight-line method. At January 31, 1995 and 1994, the remaining unamortized amounts of $6,511,000 and $6,974,000 are included in Other assets, net. B. OPERATIONAL REALIGNMENT During the year ended January 31, 1994, the Company realigned its business with Mitsukoshi Ltd. in Japan (see Note J). During the year ended January 31, 1993, the Company charged $7,000,000 to operations, which included a selective realignment of store operations and the implementation of improved organizational efficiencies leading to a reduction in worldwide staff levels. C. INVENTORIES
(in thousands) 1995 1994 - ----------------------------------------------------- Finished goods $227,412 $219,010 Raw materials 38,262 40,210 Work-in-process 6,869 5,097 ---------------------- 272,543 264,317 Reserves (2,468) (2,035) ---------------------- $270,075 $262,282 ======================
At January 31, 1995 and 1994, $189,943,000 and $177,379,000 of inventories were valued using the LIFO method. The excess of current cost over the LIFO inventory value was $9,770,000 and $8,470,000 at January 31, 1995 and 1994. The LIFO valuation method had the effect of decreasing net income by $0.05 per share for the year ended January 31, 1995, increasing net loss by $0.06 per share for the year ended January 31, 1994, and decreasing net income by $0.01 per share for the year ended January 31, 1993. D. PROPERTY AND EQUIPMENT
(in thousands) 1995 1994 - ----------------------------------------------------- Leasehold improvements $ 91,529 $ 81,214 Office equipment 31,815 26,613 Machinery and equipment 29,001 26,184 ---------------------- 152,345 134,011 Accumulated depreciation and amortization (48,867) (36,646) --------------------- $103,478 $ 97,365 ======================
For the years ended January 31, 1995, 1994 and 1993, the provision for depreciation and amortization amounted to $14,057,000, $11,947,000 and $9,928,000. E. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
(in thousands) 1995 1994 - ----------------------------------------------------- Accounts payable-trade $36,997 $40,476 Accrued rent payable 7,931 6,777 Accrued compensation and commissions 8,943 5,906 Other 30,418 26,821 --------------------- $84,289 $79,980 =====================
F. DEBT On January 29, 1993, the Company entered into an agreement with a group of lenders to issue, at par, $51,500,000 of 7.52% Senior Notes Due 2003. The Note Purchase Agreements (the "Note Agreements") require lump sum repayment upon maturity, require maintenance of specific financial covenants and ratios, and limit certain payments, investments and indebtedness, in addition to other requirements customary in such circumstances. The Note Agreements also provide that, in the event a default has occurred under any debt of the Company in excess of $1,000,000, the unpaid principal amount of these Senior Notes may become immediately due and payable. The proceeds from this loan were used entirely to repay short-term indebtedness under the Company's revolving credit facility (the "Credit Facility"). On March 19, 1991, the Company completed a Euro-offering of $50,000,000, at par, of 6 3/8% Convertible Subordinated Debentures Due 2001 (the "Debentures") issued pursuant to an Indenture (the "Indenture"), which are convertible into shares of the Company's Common Stock at a conversion price of $56.00, subject to certain adjustments, and are subordinated in right of payment to all existing and future senior indebtedness of the Company. The Debentures are redeemable at the option of either the Company or the holder under certain circumstances and require lump sum repayment upon maturity. The Indenture contains a cross-default provision relating to an event of default under any of the Company's debt agreements whereby outstanding debt in excess of $3,000,000 has been accelerated and such acceleration has not been rescinded within 10 days after notification. In addition, the Indenture requires the Debentures to be collateralized equally and ratably with any collateralized subordinated debt of the Company. 17 11 The Company also maintains a $100,000,000 Credit Facility expiring in July 1995, which it uses to support short-term borrowings. The Credit Facility entitles the Company to borrow up to $20,000,000 on a non-collateralized basis from each of five banks at interest rates based upon Eurodollar rates, a prime rate, certificate of deposit rates or money market rates. During the years ended January 31, 1995 and 1994, interest rates ranged from 2.57% to 9.78% and 1.35% to 10.95%. The weighted average interest rate for the years ended January 31, 1995 and 1994 was 3.40% and 3.70%. Each Credit Facility agreement provides for the payment of an annual commitment fee based on unused amounts and contains covenants that require maintenance of specific net worth, working capital and capital expenditure levels, in addition to other requirements customary in such circumstances. In addition, each Credit Facility agreement contains a cross-default provision relating to an event of default under any debt of the Company which exceeds $100,000. In connection with the Company's realignment of its Japan business, the Company modified certain covenants of the Note Agreements and Credit Facility and received a waiver of compliance with respect to certain of the Credit Facility's financial covenant requirements through January 31, 1995. During the year ended January 31, 1994, the Company established a yen 2,500,000,000 non-collateralized line of credit expiring in July 1995. This line of credit bears interest at a Euroyen rate plus 55 basis points. At January 31, 1995 and 1994, the Company had yen 2,500,000,000 outstanding ($25,100,000) and yen 2,000,000,000 outstanding ($18,500,000) at an average rate of 2.86% and 2.91% under this line. The Company is in the process of arranging for a new five-year $130,000,000 agented multicurrency revolving credit facility to replace the current $100,000,000 Credit Facility as well as the yen 2,500,000,000 non-collateralized line of credit, both of which expire in July 1995. The Company has received signed commitment letters from the participating lenders, subject to their satisfactory review of documentation. G. FINANCIAL HEDGING INSTRUMENTS During the year ended January 31, 1995, the Company initiated a limited-cost foreign currency hedging program intended to reduce the Company's risk on foreign-currency denominated transactions. In connection with this program, the Company will, from time to time, enter into foreign-currency-purchased put options and forward exchange contracts that are designated as hedges of commitments to purchase merchandise and settle liabilities in foreign currencies. The market value gains and losses on these foreign exchange contracts are initially deferred and then recognized in income or as adjustments of carrying amounts when the related transactions are settled. At January 31, 1995, the Company had outstanding purchased put options maturing at various dates through January 25, 1996, giving it the right, but not the obligation, to sell yen 5,068,000,000 ($50,850,000) at the predetermined contract exchange rates. If the market yen exchange rates at maturity are below the contract rates, the Company will allow the options to expire. The Company's pretax expense related to its hedging program was $991,000 for the year ended January 31, 1995. There were no material outstanding forward exchange contracts at January 31, 1995. On January 31, 1993, the Company entered into a three-year $50,000,000 interest rate swap agreement to modify the interest characteristics of its outstanding Senior Notes from a fixed to a floating rate basis. In addition to the interest on the 7.52% Senior Notes, the Company will pay the six-month LIBOR rate, adjusted every six months, and will receive a fixed rate of 5.30%. The six-month LIBOR rates at January 31, 1995 and 1994 were 6.69% and 3.56% and at July 30, 1994 and 1993 were 5.25% and 3.38%. At January 31, 1995 and 1994, there were no amounts outstanding as the terms of the underlying agreement mandate semi-annual settlements of outstanding net positions each July 31 and January 31. The interest rate swap agreement had the effect of increasing interest expense by $375,000 and decreasing interest expense by $891,000 for the years ended January 31, 1995 and 1994. H. FAIR VALUE OF FINANCIAL INSTRUMENTS The following table sets forth the carrying amounts and estimated fair values of the Company's financial instruments at January 31, 1995 and 1994:
1995 1994 ----------------------- --------------------- CARRYING FAIR Carrying Fair (in thousands) AMOUNT VALUE Amount Value - ---------------------------------------------------------------------------------- Senior Notes $51,500 $48,100 $51,500 $54,278 Convertible Subordinated Debentures 50,000 45,750 50,000 50,000 Interest Rate Swap -- 1,300 -- 198
18 12 The carrying amounts of the Company's Senior Notes and Debentures in the above table are included in Long-term debt in the consolidated balance sheets at January 31, 1995 and 1994. No carrying amount has been recognized in the financial statements for the interest rate swap agreement. The fair values of these financial instruments at January 31, 1995 and 1994 were estimated as follows: the Senior Notes were based upon the quoted market prices of comparable instruments; the Debentures were based upon their quoted market price; and the interest rate swap agreement was valued at the amount the Company would expect to pay to terminate the agreement. I. COMMITMENTS AND CONTINGENCIES The Company leases certain office, distribution, retail and manufacturing facilities. The leases, which expire at various dates through 2009, also provide for the payment of taxes, insurance and maintenance, and certain leases contain escalation clauses resulting from the pass-through of increases in operating costs, property taxes and consumer price indices. Rent-free periods granted under certain leases, and scheduled rent increases, are charged to rent expense on a straight-line basis over the related terms of such leases. Rent expense under leases, including escalations, for the years ended January 31, 1995, 1994 and 1993, amounted to $29,046,000, $26,552,000 and $24,015,000. Future minimum annual rental payments under noncancelable operating leases are as follows:
Minimum Annual Fiscal Year Ending Rental Payments January 31, (in thousands) - ------------------------------------------- 1996 $26,660 1997 26,652 1998 25,160 1999 23,356 2000 20,720 2001 and thereafter 77,532
The Company is, from time to time, involved in routine litigation incidental to the conduct of its business including proceedings to protect its trademark rights, litigation instituted by persons injured upon premises within the Company's control and litigation with present and former employees. Management believes that such pending litigation will not have a material adverse effect on the Company's consolidated results of operations or financial condition. J. RELATED PARTY TRANSACTIONS Mitsukoshi Ltd. ("Mitsukoshi"), a leading Japanese department store group, owns approximately 14% of the Company's outstanding Common Stock. Until July 1993, Mitsukoshi served as the Company's principal distributor in Japan. Pursuant to a written agreement, the Company now operates TIFFANY & CO. boutiques in Mitsukoshi's stores in exchange for a percentage of net sales and Mitsukoski continues to operate certain TIFFANY & CO. boutiques outside of Japan. Wholesale sales to Mitsukoshi amounted to $19,000,000, $42,000,000, and $74,000,000 for the years ended January 31, 1995, 1994 and 1993. There were no trade receivables due from Mitsukoshi at January 31, 1995 and 1994. During the year ended January 31, 1994, the Company realigned its primary Japanese distribution arrangement and assumed full merchandising and marketing responsibilities for 29 TIFFANY & CO. boutiques previously operated by Mitsukoshi in Japan. As part of the transaction, the Company agreed to repurchase over the next four years $115,000,000 of TIFFANY & CO. merchandise previously sold to Mitsukoshi. Accordingly, in the second quarter of 1993 the Company established a reserve for product return of $57,500,000, which had the effect of reducing net income by $32,700,000 (net of income tax benefit of $24,800,000), or $2.07 per share. Under this agreement, $35,500,000 of merchandise remains to be repurchased throughout the period ending February 28, 1998. The Company owes yen 2,750,000,000 ($27,591,000) to Mitsukoshi through a long-term trade payable agreement, due February 28, 1998, which was accounted for as a non-cash transaction. During the year ended January 31, 1993, the Company assumed the operation of seven boutiques previously operated by Mitsukoshi in non-Mitsukoshi department stores in Japan. K. STOCKHOLDERS' EQUITY PREFERRED STOCK The Board of Directors is authorized to issue, without further action by the stockholders, shares of Preferred Stock and to fix and alter the rights related to such stock. In March 1987, the stockholders authorized 2,000,000 shares of Preferred Stock, par value $0.01 per share. In November 1988, the Board of Directors designated certain shares of such Preferred Stock as Series A Junior Participating Cumulative 19 13 Preferred Stock, par value $0.01 per share, to be issued in connection with the exercise of certain stock purchase rights under the Stockholder Rights Plan (described below). At January 31, 1995 and 1994, there were no shares of Preferred Stock issued or outstanding. STOCKHOLDER RIGHTS PLAN Under the Company's Stockholder Rights Plan, each outstanding share of Common Stock has a stock purchase right, which will become exercisable should certain takeover-related events occur. The rights expire on November 17, 1998 and are subject to redemption at $0.01 per right. Following such events, but before any person has acquired beneficial ownership of 20% of the common shares, each right may be used to purchase one one-hundredth of a share of Series A Junior Participating Cumulative Preferred Stock at an exercise price of $140 (subject to adjustment); after such an acquisition, each right may be used to purchase for the exercise price common shares having a market value equal to two times such exercise price. If, after such an acquisition, a merger of the Company occurs (or 50% of the Company's assets are sold), each right may be exercised to purchase for the exercise price common shares of the acquiring corporation having a market value equal to two times the exercise price. Rights held by such a 20% owner may not be exercised. CASH DIVIDENDS Cash dividends declared and paid during the years ended January 31, 1995 and 1994 amounted to $4,391,000 and $4,381,000. On February 15, 1995, the Company's Board of Directors declared a regular quarterly dividend of $0.07 per common share, for stockholders of record on March 21, 1995, to be paid on April 11, 1995. STOCK OPTIONS Under the 1985 Stock Option Plan, options to acquire up to 360,000 shares of Common Stock may be granted to key employees of the Company at no less than 100% of fair market value on the date of grant. Certain options granted under the 1985 Plan are intended to qualify as "incentive stock options" pursuant to Section 422A of the Internal Revenue Code. Of the options granted, options for 180,000 shares became exercisable in full two years following the date of grant. The balance became exercisable in part one year following the date of grant. Options under the 1985 Plan have maximum terms of 10 or 11 years. Under the 1986 Stock Option Plan, non-qualified stock options to acquire 2,709,000 shares of Common Stock may be granted to key employees of the Company at no less than 100% of the fair market value on the date of the grant. Options granted under the 1986 Plan have a maximum term of 11 years and are exercisable in four equal installments with the first installment becoming exercisable on the first anniversary of the grant date. Under the 1988 Director Option Plan, options to acquire 150,000 shares of Common Stock may be granted to nonemployee directors of the Company at a price equal to 50% of the fair market value on the date of grant. Each director may elect to receive options in lieu of all or 50% of an annual retainer fee. Options granted under this plan have a maximum term of 15 years and are exercisable in full one year following the date of grant. Changes in options under these Plans during the years ended January 31, 1993, 1994 and 1995 were as follows:
Number of Option Price Shares Per Share - ------------------------------------------------------------------------------ Outstanding - January 31, 1992 1,074,807 $ 1.81-$52.88 Granted 433,890 $16.91-$50.94 Exercised (54,338) $ 1.81-$44.63 Canceled (57,164) $14.75-$52.88 --------- Outstanding - January 31, 1993 1,397,195 $ 1.81-$52.88 Granted 321,270 $15.88-$31.88 Exercised (39,826) $ 1.81-$26.71 Canceled (108,888) $25.21-$52.88 --------- Outstanding - January 31, 1994 1,569,751 $ 1.81-$52.88 Granted 353,260 $19.56-$42.56 Exercised (42,501) $ 1.81-$36.38 Canceled (115,385) $23.17-$52.88 --------- OUTSTANDING- JANUARY 31, 1995 1,765,125 $ 1.81-$52.88 ========= EXERCISABLE - JANUARY 31, 1995 980,554 =========
20 14 L. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS The Company provides certain health care and life insurance benefits for retired employees. Substantially all of the Company's employees may become eligible for these benefits if they reach normal or early retirement age while working for the Company. The Company's employee and retiree health care benefits are administered by an insurance company, and premiums on life insurance are based on benefits paid during the year. The Company accounts for postretirement health care and life insurance benefits under the provision of Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," which requires companies to accrue the cost of providing these benefits throughout the employees' active service periods until they attain full eligibility for those benefits. The following table sets forth the Company's cumulative postretirement benefit obligation and the amount recognized in the Company's consolidated balance sheets at January 31, 1995 and 1994:
(in thousands, except percentages) 1995 1994 - ------------------------------------------------------------------- Retirees $ 8,074 $ 9,294 Fully eligible plan participants 2,345 855 Other active plan participants 5,070 9,852 ----------------------- Total accumulated postretirement benefit obligation 15,489 20,001 Unrecognized gain/(loss) 1,232 (4,891) ----------------------- Postretirement benefit obligation $16,721 $15,110 ======================= Discount rate 8.50% 7.50% Rate of increase in compensation 5.50% 5.00% Health care cost trend* 9.50% 11.00%
*Gradually declining to 5.50% to be achieved in the year 2011. Postretirement benefit cost included the following components:
(in thousands) 1995 1994 1993 - ------------------------------------------------------------------ Service cost $1,132 $1,042 $ 988 Interest cost on projected benefit obligation 1,137 1,298 1,178 -------------------------- Total postretirement benefit cost $2,269 $2,340 $2,166 ==========================
Based on current estimates, increasing the health care cost trend rate by one percentage point would increase the Company's accumulated postretirement benefit obligation by $2,106,000 and the aggregate service and interest cost components of net periodic postretirement benefit for the year ended January 31, 1995 by $400,000. M. POSTEMPLOYMENT BENEFITS Effective February 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 112, "Accounting for Postemployment Benefits," which requires the accrual of the cost of postemployment benefits as they are earned rather than expensing the costs when incurred. These benefits include salary continuation, severance benefits, disability benefits and continuation of health care benefits and life insurance coverage for former employees after employment but before retirement. The adoption of this standard did not have a material impact on the Company's reported results of operation or financial condition. N. EMPLOYEE BENEFIT PLANS The Company has a non-contributory defined benefit pension plan (the "Plan") covering substantially all domestic salaried and full-time hourly employees. The Company accounts for pension expense under the provision of Statement of Financial Accounting Standards No. 87, "Employers' Accounting for Pensions," which requires the use of the projected unit credit actuarial method for financial reporting purposes. Plan benefits are based on the highest five consecutive years of compensation or as a percentage of actual compensation, as applicable in the circumstances, and the number of years of service. The actuarial present value of the vested benefit obligation is calculated based on the expected date of separation or retirement of the Company's eligible employees. 21 15 Net pension expense included the following components:
(in thousands, except percentages) 1995 1994 1993 - ------------------------------------------------------------------------------ Service cost-benefits earned during period $2,343 $2,076 $1,850 Interest cost on projected benefit obligation 2,625 2,493 2,299 Return on assets 877 (3,073) (1,015) Net amortization and deferrals (2,703) 1,411 (326) ----------------------------- Net periodic pension expense $3,142 $2,907 $2,808 ============================= Discount rate 7.50% 8.25% 8.50% Rate of increase in compensation 5.00% 5.50% 6.00% Long-term rate of return on assets 9.00% 9.00% 9.00%
The following table sets forth the funded status of the Plan and amounts recognized in the Company's consolidated balance sheets at January 31, 1995 and 1994:
(in thousands) 1995 1994 - -------------------------------------------------------------------- Actuarial present value of benefit obligation: Vested $25,840 $26,852 Nonvested 3,251 3,889 -------------------- Accumulated benefit obligation $29,091 $30,741 ==================== Projected benefit obligation $34,571 $36,440 Plan assets at fair value, primarily stocks and fixed income securities 30,749 30,131 -------------------- Projected benefit obligation in excess of Plan assets 3,822 6,309 Unrecognized net loss (2,968) (5,182) Unrecognized net obligation (651) (755) Recognition of minimum liability -- 237 -------------------- Pension liability recognized in the consolidated balance sheets $ 203 $ 609 ====================
The assumptions used in the calculation of the projected benefit obligation are as follows:
1995 1994 - -------------------------------------------------------------------- Discount rate 8.50% 7.50% Rate of increase in compensation 5.50% 5.00%
The Company has an Employee Profit Sharing and Retirement Savings Plan that covers substantially all U.S.-based employees of the Company. The Company's contribution for the year ended January 31, 1995 amounted to $600,000 in the form of newly issued Company Common Stock. There were no contributions for the years ended January 31, 1994 and 1993. O. INCOME TAXES Effective February 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," which requires the Company to provide for taxes based upon the tax rate at which the items of income and expense are expected to be settled in the Company's tax return. The adoption of this standard did not have a material impact on the Company's consolidated results of operations or financial condition. Prior years' financial statements have not been restated. Income/(loss) before income taxes consisted of the following:
(in thousands) 1995 1994 1993 - ----------------------------------------------------------- United States $41,894 $(31,808) $22,373 Foreign 9,672 13,808 (2,448) ------------------------------ $51,566 $(18,000) $19,925 ==============================
Components of the provision/(benefit) for income taxes are as follows:
(in thousands) 1995 1994 1993 - ------------------------------------------------------------ Current: Federal $12,171 $(9,472) $ 4,827 State and foreign 12,858 7,782 4,954 -------------------------------- 25,029 (1,690) 9,781 -------------------------------- Deferred: Federal (2,236) (2,324) (5,078) State and foreign (568) (3,744) (490) -------------------------------- (2,804) (6,068) (5,568) -------------------------------- $22,225 $(7,758) $ 4,213 ================================
The Company has an income tax receivable amounting to $7,925,000, primarily due to the recognition of a tax benefit from its year ended January 31, 1994, for domestic net operating losses and foreign tax credits that were carried back to prior tax years. 22 16 Deferred tax assets/(liabilities) as of January 31, 1995 and 1994 consisted of the following:
(in thousands) 1995 1994 - -------------------------------------------------------------------- Postretirement/employment benefits $ 7,905 $6,434 Product return reserve 5,962 6,267 State net operating loss carryforward -- 2,703 5,624 5,210 Inventory reserves Accrued expenses 2,310 2,383 Depreciation (3,601) (5,189) Pension contribution (1,439) (2,160) Undistributed earnings of foreign subsidiaries (3,701) (3,868) Other (2,264) (3,134) ------------------- $10,796 $8,646 ===================
The income tax effects of items comprising the deferred income tax benefit are as follows:
(in thousands) 1995 1994 1993 - ------------------------------------------------------------------ Postretirement/employment benefit obligation $(1,029) $ (711) $ (544) Tax audit settlement -- -- (4,196) Lease buyout provision -- 510 (510) Product return reserve 255 (6,267) -- Undistributed earnings of foreign subsidiaries (167) 1,028 1,211 State net operating loss carryforward 2,703 (2,703) -- Book/tax depreciation (1,068) 137 193 Excess pension contribution (704) 185 113 Inventory reserves (1,033) (1,946) (33) Other (1,761) 3,699 (1,802) --------------------------- $(2,804) $(6,068) $(5,568) ===========================
A reconciliation of the provision/(benefit) for income taxes at the statutory Federal income tax rate to the Company's effective tax rate as reported is as follows:
1995 1994 1993 - --------------------------------------------------------------------- Statutory Federal income tax rate 35.0% (35.0)% 34.0% Tax audit settlement -- -- (21.1) State income taxes, net of Federal benefit 5.4 (14.2) 6.1 Foreign tax rates in excess of foreign tax credits -- 4.8 -- Other 2.7 1.3 2.1 ------------------------- Effective income tax rate 43.1% (43.1)% 21.1% =========================
For the year ended January 31, 1995, the Company recognized a state income tax benefit of $2,703,000 attributable to net operating loss carryforwards. The Company has fully utilized all available foreign tax credits. During the year ended January 31, 1993, the Company was advised by the Internal Revenue Service that its audit of the Company's Federal tax returns for the 1985-1988 fiscal years was completed. The statute of limitations with respect to such fiscal periods had expired. All material proposed adjustments related to the acquisition of Tiffany and Company from Avon Products, Inc. in October 1984 and with respect to certain indebtedness incurred prior to the completion of the Company's May 1987 initial public offering were withdrawn. As a result, the provision for income taxes was reduced by $4,196,000, in order to adjust tax reserves that had been established for the Company's 1985-1988 fiscal years. During the year ended January 31, 1995, an audit of the Company's Federal income tax returns for the 1989-1992 fiscal years was completed and no material adjustments were proposed. 23 17 P. FOREIGN OPERATIONS Certain information relating to the Company's foreign operations is set forth below:
Domestic International -------------------- -------------------------- (in thousands) U.S. Export Japan Other Unallocated Total - ----------------------------------------------------------------------------------------------------------------------------------- YEAR ENDED JANUARY 31, 1995 Sales $508,928 $15,964 $189,445 $ 76,373 $ -- $790,710 Eliminations (96,037) -- -- (11,842) -- (107,879) ------------------------------------------------------------------------------------ Net sales $412,891 $15,964 $189,445 $ 64,531 $ -- $682,831 ==================================================================================== Operating profit* $ 94,760 $ 7,503 $ 16,158 $ 3,808 $ -- $122,229 Recognition of deferred gross profit** (41,445) -- 41,445 -- -- -- Eliminations (10,158) -- -- (1,706) -- (11,864) Corporate expenses -- -- -- -- (45,710) (45,710) Interest and other expenses, net -- -- -- -- (13,089) (13,089) ----------------------------------------------------------------------------------- Income before income taxes $ 43,157 $ 7,503 $ 57,603 $ 2,102 $ (58,799) $ 51,566 ==================================================================================== Identifiable assets $489,880 $ 3,900 $108,463 $109,581 $ -- $711,824 Eliminations (127,131) -- (33,229) (92) -- (160,452) ----------------------------------------------------------------------------------- Identifiable assets $362,749 $ 3,900 $ 75,234 $109,489 $ -- $551,372 ==================================================================================== YEAR ENDED JANUARY 31, 1994 Sales $418,125 $41,106 $104,963 $ 56,577 $ -- $620,771 Eliminations (49,534) -- -- (4,736) -- (54,270) ----------------------------------------------------------------------------------- Net sales $368,591 $41,106 $104,963 $ 51,841 $ -- $566,501 ==================================================================================== Operating profit* $ 60,476 $21,786 $ 13,125 $ 532 $ -- $ 95,919 Recognition of deferred gross profit** (21,684) -- 21,684 -- -- -- Eliminations (4,405) -- -- (1,773) -- (6,178) Corporate expenses -- -- -- -- (42,270) (42,270) Japan realignment -- -- -- -- (57,500) (57,500) Interest and other expenses, net -- -- -- -- (7,971) (7,971) ----------------------------------------------------------------------------------- Income/(loss) before income tax $ 34,387 $21,786 $ 34,809 $ (1,241) $(107,741) $(18,000) ==================================================================================== Identifiable assets $457,597 $ 5,867 $115,432 $102,577 $ -- $681,473 Eliminations (134,311) -- (43,320) 567 -- (177,064) ----------------------------------------------------------------------------------- Identifiable assets $323,286 $ 5,867 $ 72,112 $103,144 $ -- $504,409 ==================================================================================== YEAR ENDED JANUARY 31, 1993 Sales $362,200 $87,730 $ 13,822 $ 46,770 $ -- $510,522 Eliminations (23,633) -- -- (493) -- (24,126) ----------------------------------------------------------------------------------- Net Sales $338,567 $87,730 $ 13,822 $ 46,277 $ -- $486,396 ==================================================================================== Operating profit* $ 25,008 $46,497 $ 2,371 $ 378 $ -- $ 74,254 Recognition of deferred gross profit** (843) -- 843 -- -- -- Eliminations 2,054 -- -- (368) -- 1,686 Corporate expenses -- -- -- -- (42,199) (42,199) Operational realignment -- -- -- -- (7,000) (7,000) Interest and other expenses, net -- -- -- -- (6,816) (6,816) ----------------------------------------------------------------------------------- Income before income taxes $ 26,219 $46,497 $ 3,214 $ 10 $ (56,015) $ 19,925 ==================================================================================== Identifiable assets $417,970 $ 2,251 $ 18,640 $114,399 $ -- $553,260 Eliminations (131,039) -- (2,082) (784) -- (133,905) ----------------------------------------------------------------------------------- Identifiable assets $286,931 $ 2,251 $ 16,558 $113,615 $ -- $419,355 ====================================================================================
* Represents income from operations before corporate expenses, realignments and interest and other expenses, net. **Represents the gross profit on international transfers initially deferred in the U.S. and recognized upon sale to retail customers in Japan. 18 Q. QUARTERLY FINANCIAL DATA (UNAUDITED)
Fiscal 1994 Quarter Ended -------------------------------------------------------- (in thousands, except per share amounts) April 30 July 31 October 31 January 31 - ------------------------------------------------------------------------------------------------------------------- Net sales $131,207 $152,257 $160,091 $239,276 Gross profit 67,200 78,921 84,417 127,664 Income from operations 6,114 9,018 11,827 37,696 Net income 1,876 3,450 4,720 19,295 Net income per share: Primary $ 0.12 $ 0.22 $ 0.30 $ 1.21 ======================================================== Fully Diluted $ 0.12 $ 0.22 $ 0.30 $ 1.17 ========================================================
Fiscal 1993 Quarter Ended -------------------------------------------------------- (in thousands, except per share amounts) April 30 July 31 October 31 January 31 - ------------------------------------------------------------------------------------------------------------------- Net sales $109,481 $114,233 $134,750 $208,037 Gross profit/(loss) 50,781 (2,053)* 71,832 112,322 Income/(loss) from operations 3,705 (55,675) 7,916 34,025 Net income/(loss) 1,037 (32,550) 3,255 18,016 Net income/(loss) per share: Primary $ 0.07 $ (2.06) $ 0.21 $ 1.14 ======================================================== Fully Diluted $ 0.07 $ (2.06) $ 0.21 $ 1.11 ========================================================
* Includes a $57,500 provision related to the realignment of the Company's business in Japan. The sum of the quarterly net income/(loss) per share amounts may not equal the full year amount since the computations of the weighted average number of common and common equivalent shares outstanding for each quarter and the full year are made independently.
   1
                                                                    Exhibit 21.1

               
                                                   TIFFANY & CO. 
                                                    (Delaware) 
                                                    Registrant 
                                                    (13-3228013)

                   TIFFANY & CO.                                                TIFFANY AND COMPANY
                   INTERNATIONAL                                                                 
                    (Delaware)                                                       (New York)  
                   (06-1121421)                                                      (13-1387680)

 TIFFANY & CO.                        TIFFANY & CO.                 TIFFANY & CO.                   TIFFANY & CO.
  JAPAN INC.                       OF NEW YORK LIMITED          (NEW YORK) PTY. LTD.                  ICT, INC.
  (Delaware)                           (Hong Kong)                   (Australia)                     (Delaware)

TIFFANY-FARAONE                       TIFFANY & CO.                 TIFFCO JEWELRY             SOCIETE FRANCAISE POUR LE
   S.P.A.                          OVERSEAS FINANCE B.V.         AND CHAIN CRAFTS, INC.           DEVELOPPEMENT DE LA
  (Italy)                             (Netherlands)                   (Delaware)               PORCELAINE D'ART S.A.R.L.
                                                                                                       (France)

 TIFFANY & CO.                         TIFFANY & CO.                 TIFFANY & CO.                   TIFFANY & CO.
   PTE. LTD                                A.G.                          K.K.
  (Singapore)                          (Switzerland)                   (Japan)                      (United Kingdom)

 TIFFANY & CO.                                                        GLASSWARE
WATCH FACTORY S.A.                                                  ACQUISITION INC.
 (Switzerland)                                                      (West Virginia)

  

   1
                        [COOPERS & LYBRAND LETTERHEAD]



                      CONSENT OF INDEPENDENT ACCOUNTANTS

                            ---------------------


We consent to the incorporation by reference in the registration statement of
Tiffany & Co. and Subsidiaries on Form S-8 of our report dated March 6, 1995 on
our audits of the consolidated financial statements and financial statement
schedule of Tiffany & Co. and Subsidiaries as of January 31, 1995 and 1994, and
for each of the three years in the period ended January 31, 1995, which report
is included in the Company's Annual Report on Form 10-K.



                                        /s/ Coopers & Lybrand L.L.P.





New York, New York
April 7, 1995





 

5 YEAR JAN-31-1995 FEB-01-1994 JAN-31-1995 44,318,000 0 67,343,000 2,197,000 270,075,000 401,808,000 152,345,000 48,867,000 551,372,000 167,121,000 101,500,000 157,000 0 0 221,540,000 551,372,000 682,831,000 682,831,000 324,629,000 324,629,000 0 1,825,000 12,942,000 51,566,000 22,225,000 29,341,000 0 0 0 29,341,000 1.85 1.85