Document and Entity Information (USD $)	9 Months Ended
Document and Entity Information (USD $)	Jan. 01, 2011	Sep. 26, 2009	Feb. 04, 2011 Common stock, Class A	Feb. 04, 2011 Common stock, Class B
Entity Registrant Name	POLO RALPH LAUREN CORP
Entity Central Index Key	0001037038
Document Type	10-Q
Document Period End Date	Jan. 01, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--04-02
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$ 4,059,612,874
Entity Common Stock, Shares Outstanding			65,355,438	30,831,276

Consolidated Balance Sheets (Unaudited) (USD $) In Millions, unless otherwise specified	9 Months Ended	12 Months Ended
	Jan. 01, 2011	Apr. 03, 2010
Current assets:
Cash and cash equivalents	$ 643.4	$ 563.1
Short-term investments	599.4	584.1
Accounts receivable, net of allowances of $223.4 million and $206.1 million	338.1	381.9
Inventories	697.7	504.0
Deferred tax assets	82.3	103.0
Prepaid expenses and other	152.2	139.7
Total current assets	2,513.1	2,275.8
Non-current investments	65.5	75.5
Property and equipment, net	756.4	697.2
Deferred tax assets	137.5	101.9
Goodwill	996.7	986.6
Intangible assets, net	392.0	363.2
Other assets	147.4	148.7
Total assets	5,008.6	4,648.9
Current liabilities:
Accounts payable	176.5	149.8
Income tax payable	39.9	37.8
Accrued expenses and other	576.1	559.7
Total current liabilities	792.5	747.3
Long-term debt	275.1	282.1
Non-current liability for unrecognized tax benefits	144.7	126.0
Other non-current liabilities	383.3	376.9
Commitments and contingencies (Note 17)
Total liabilities	1,595.6	1,532.3
Equity:
Additional paid-in-capital	1,394.2	1,243.8
Retained earnings	3,381.0	2,915.3
Treasury stock, Class A, at cost (23.8 million and 19.6 million shares)	(1,545.4)	(1,197.7)
Accumulated other comprehensive income	182.0	154.0
Total equity	3,413.0	3,116.6
Total liabilities and equity	5,008.6	4,648.9
Common stock, Class A
Equity:
Common stock	0.9	0.8
Common stock, Class B
Equity:
Common stock	$ 0.3	$ 0.4

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	Jan. 01, 2011	Apr. 03, 2010
Current assets:
Allowances on accounts receivable	$ 223.4	$ 206.1
Equity:
Treasury stock, shares	23.8	19.6
Common stock, Class A
Equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	89.2	75.7
Common stock, shares outstanding	65.4	56.1
Common stock, Class B
Equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	30.8	42.1
Common stock, shares outstanding	30.8	42.1

Consolidated Statements of Operations (Unaudited) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 01, 2011	Dec. 26, 2009	Jan. 01, 2011	Dec. 26, 2009
Consolidated Statements of Operations [Abstract]
Net sales	$ 1,497.9	$ 1,195.6	$ 4,099.0	$ 3,505.2
Licensing revenue	50.1	48.3	134.4	136.6
Net revenues	1,548.0	1,243.9	4,233.4	3,641.8
Cost of goods sold(a)	(640.1)	(520.2)	(1,725.4)	(1,532.1)
Gross profit	907.9	723.7	2,508.0	2,109.7
Other costs and expenses:
Selling, general and administrative expenses(a)	(655.4)	(540.4)	(1,760.2)	(1,545.0)
Amortization of intangible assets	(6.3)	(5.3)	(18.5)	(15.7)
Impairments of assets	0	(4.9)	0	(6.6)
Restructuring reversals (charges)	0.1	(0.6)	(1.4)	(7.3)
Total other costs and expenses	(661.6)	(551.2)	(1,780.1)	(1,574.6)
Operating income	246.3	172.5	727.9	535.1
Foreign currency losses	(2.6)	(1.2)	(1.2)	(2.9)
Interest expense	(4.3)	(4.6)	(13.2)	(16.8)
Interest and other income, net	1.8	1.2	5.2	10.4
Equity in losses of equity-method investees	(2.8)	(2.4)	(4.8)	(3.9)
Income before provision for income taxes	238.4	165.5	713.9	521.9
Provision for income taxes	(70.0)	(54.4)	(219.5)	(156.5)
Net income attributable to PRLC	168.4	111.1	494.4	365.4
Net income per common share attributable to PRLC:
Basic	$ 1.76	$ 1.12	$ 5.15	$ 3.69
Diluted	$ 1.72	$ 1.10	$ 5.01	$ 3.60
Weighted average common shares outstanding:
Basic	95.5	98.8	96.0	99.1
Diluted	98.1	101.4	98.7	101.5
Dividends declared per share	$ 0.10	$ 0.10	$ 0.30	$ 0.20
(a) Includes total depreciation expense of:	$ (44.1)	$ (38.8)	$ (124.3)	$ (117.8)

Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Jan. 01, 2011	Dec. 26, 2009
Cash flows from operating activities:
Net income attributable to PRLC	$ 494.4	$ 365.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	142.8	133.5
Deferred income tax benefit	(33.2)	(17.7)
Equity in losses of equity-method investees, net of dividends received	4.8	3.9
Non-cash stock-based compensation expense	48.9	39.7
Non-cash impairments of assets	0	6.6
Non-cash provision for bad debt expense	0.7	2.1
Non-cash foreign currency (gains) losses	(2.2)	3.8
Non-cash restructuring (reversals) charges, net	(2.1)	2.6
Non-cash litigation-related reversals	(1.9)	0
Gain on extinguishment of debt	0	(4.1)
Changes in operating assets and liabilities:
Accounts receivable	47.0	218.9
Inventories	(179.4)	(5.1)
Accounts payable and accrued liabilities	31.9	40.7
Deferred income liabilities	(18.1)	(18.2)
Other balance sheet changes	60.7	32.2
Net cash provided by operating activities	594.3	804.3
Cash flows from investing activities:
Acquisitions and ventures, net of cash acquired and purchase price settlements	(67.8)	(3.7)
Purchases of investments	(1,019.5)	(846.5)
Proceeds from sales and maturities of investments	1,002.1	889.3
Capital expenditures	(171.5)	(104.3)
Change in restricted cash deposits	15.9	0.5
Net cash used in investing activities	(240.8)	(64.7)
Cash flows from financing activities:
Repayment of debt	0	(121.0)
Payments of capital lease obligations	(6.6)	(4.7)
Payments of dividends	(28.9)	(14.9)
Repurchases of common stock, including shares surrendered for tax withholdings	(347.7)	(153.4)
Proceeds from exercise of stock options	67.7	33.3
Excess tax benefits from stock-based compensation arrangements	34.2	15.3
Other financing activities	(0.5)	1.3
Net cash used in financing activities	(281.8)	(244.1)
Effect of exchange rate changes on cash and cash equivalents	8.6	(2.9)
Net increase in cash and cash equivalents	80.3	492.6
Cash and cash equivalents at beginning of period	563.1	481.2
Cash and cash equivalents at end of period	$ 643.4	$ 973.8

Description of Business

9 Months Ended

Jan. 01, 2011

Description of Business [Abstract]

Description of Business


1.	Description of Business

Polo Ralph Lauren Corporation (“PRLC”) is a global leader in the design, marketing and distribution of premium lifestyle products, including men’s, women’s and children’s apparel, accessories, fragrances and home furnishings. PRLC’s long-standing reputation and distinctive image have been consistently developed across an expanding number of products, brands and international markets. PRLC’s brand names include Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Women’s Collection, Black Label, Blue Label, Lauren by Ralph Lauren, RRL, RLX, Rugby, Ralph Lauren Childrenswear, American Living, Chaps and Club Monaco, among others. PRLC and its subsidiaries are collectively referred to herein as the “Company,” “we,” “us,” “our” and “ourselves,” unless the context indicates otherwise.

The Company classifies its businesses into three segments: Wholesale, Retail and Licensing. The Company’s wholesale sales are made principally to major department and specialty stores located throughout the U.S., Canada, Europe and Asia. The Company also sells directly to consumers through full-price and factory retail stores located throughout the U.S., Canada, Europe, South America and Asia, through concessions-based shop-within-shops located primarily in Asia, through its domestic retail e-commerce sites located at www.RalphLauren.com and www.Rugby.com and its recently launched United Kingdom retail e-commerce site located at www.RalphLauren.co.uk. In addition, the Company often licenses the right to unrelated third parties to use its various trademarks in connection with the manufacture and sale of designated products, such as apparel, eyewear and fragrances, in specified geographical areas for specified periods.

Basis of Presentation

9 Months Ended

Jan. 01, 2011

Basis of Presentation [Abstract]

Basis of Presentation


2.	Basis of Presentation

Interim Financial Statements

The interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The interim consolidated financial statements are unaudited. In the opinion of management, however, such consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial condition, results of operations and changes in cash flows of the Company for the interim periods presented. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“US GAAP”) have been condensed or omitted from this report as is permitted by the SEC’s rules and regulations. However, the Company believes that the disclosures herein are adequate to make the information presented not misleading.

The consolidated balance sheet data as of April 3, 2010 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended April 3, 2010 (the “Fiscal 2010 10-K”), which should be read in conjunction with these interim financial statements. Reference is made to the Fiscal 2010 10-K for a complete set of financial statements.

Basis of Consolidation

The unaudited interim consolidated financial statements present the financial position, results of operations and cash flows of the Company and all entities in which the Company has a controlling voting interest. The unaudited interim consolidated financial statements also include the accounts of any variable interest entities of which the Company is considered to be the primary beneficiary and such entities are required to be consolidated in accordance with US GAAP.

All significant intercompany balances and transactions have been eliminated in consolidation.

Fiscal Year

The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, fiscal year 2011 will end on April 2, 2011 and will be a 52-week period (“Fiscal 2011”). Fiscal year 2010 ended on April 3, 2010 and reflected a 53-week period (“Fiscal 2010”). Accordingly, the third quarter of Fiscal 2011 ended on January 1, 2011 and was a 13-week period. The third quarter of Fiscal 2010 ended on December 26, 2009 and was also a 13-week period.

In April 2009, the Company performed an internal legal entity reorganization of certain of its wholly owned Japan subsidiaries. As a result of the reorganization, the Company’s former Polo Ralph Lauren Japan Corporation and Impact 21 Co., Ltd. subsidiaries were merged into a new wholly owned subsidiary named Polo Ralph Lauren Kabushiki Kaisha (“PRL KK”). The financial position and operating results of the Company’s consolidated PRL KK entity are reported on a one-month lag. Accordingly, the Company’s operating results for the three-month and nine-month periods ended January 1, 2011 and December 26, 2009 include the operating results of PRL KK for the three-month and nine-month periods ended December 4, 2010 and November 30, 2009, respectively. The net effect of this reporting lag is not material to the Company’s unaudited interim consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ materially from those estimates.

Significant estimates inherent in the preparation of the consolidated financial statements include reserves for bad debt, customer returns, discounts, end-of-season markdowns and operational chargebacks; the realizability of inventory; reserves for litigation and other contingencies; useful lives and impairments of long-lived tangible and intangible assets; accounting for income taxes and related uncertain tax positions; the valuation of stock-based compensation and related expected forfeiture rates; reserves for restructuring; and accounting for business combinations.

Reclassifications

On December 31, 2009, the Company acquired certain net assets from Dickson Concepts International Limited (“Dickson”), its former licensee of Polo-branded apparel in Asia-Pacific (excluding Japan and South Korea), and assumed direct control of its business in that region (the “Asia-Pacific Licensed Operations Acquisition”). Dickson formerly conducted the Company’s business in Asia-Pacific (excluding Japan and South Korea) through a combination of freestanding owned stores, freestanding licensed stores and shop-within-shops at department stores or malls. The terms of trade for shop-within-shops were largely conducted on a concessions basis, whereby inventory continued to be owned by the Company (not the department store) until ultimate sale to the end consumer and the salespeople involved in the sales transaction were employees of the Company. As management believes that this concessions-based sales model possesses more attributes of a retail model than a wholesale model, it was determined that all concessions-based sales arrangements (including those conducted in Japan) should be classified within the Company’s Retail segment, in contrast to the historical classification within its Wholesale segment. Accordingly, effective with the closing of the Asia-Pacific Licensed Operations Acquisition at the beginning of the fourth quarter of Fiscal 2010, the Company modified its segment presentation to reclassify concessions-based sales arrangements to its Retail segment from its Wholesale segment. There have been no changes in total revenue, total operating income or total assets as a result of this change. Segment information for the three-month and nine-month periods ended December 26, 2009 has been recast to conform to the current periods’ presentation. See Note 5 for further discussion of the Company’s acquisitions and Note 18 for further discussion of the Company’s segment information.

Certain other reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation.

Seasonality of Business

The Company’s business is typically affected by seasonal trends, with higher levels of wholesale sales generated in its second and fourth quarters and higher retail sales generated in its second and third quarters. These trends result primarily from the timing of seasonal wholesale shipments and key vacation travel, back-to-school and holiday shopping periods in the Retail segment. Accordingly, the Company’s operating results and cash flows for the three-month and nine-month periods ended January 1, 2011 are not necessarily indicative of the results and cash flows that may be expected for the full Fiscal 2011.

- Definition

Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References+ Details

Summary of Significant Accounting Policies

9 Months Ended

Jan. 01, 2011

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies


3.	Summary of Significant Accounting Policies

Revenue Recognition

Revenue is recognized across all segments of the business when there is persuasive evidence of an arrangement, delivery has occurred, price has been fixed or is determinable and collectibility is reasonably assured.

Revenue within the Company’s Wholesale segment is recognized at the time title passes and risk of loss is transferred to customers. Wholesale revenue is recorded net of estimates of returns, discounts, end-of-season markdown allowances, operational chargebacks and certain cooperative advertising allowances. Returns and allowances require pre-approval from management and discounts are based on trade terms. Estimates for end-of-season markdown reserves are based on historical trends, seasonal results, an evaluation of current economic and market conditions, retailer performance and, in certain cases, contractual terms. Estimates for operational chargebacks are based on actual notifications of order fulfillment discrepancies and historical trends. The Company reviews and refines these estimates on a quarterly basis. The Company’s historical estimates of these costs have not differed materially from actual results.

Retail store and concessions-based shop-within-shop revenue is recognized net of estimated returns at the time of sale to consumers. E-commerce revenue from sales of products ordered through the Company’s retail Internet sites is recognized upon delivery and receipt of the shipment by its customers. Such revenue is also reduced by an estimate of returns.

Gift cards issued by the Company are recorded as a liability until they are redeemed, at which point revenue is recognized. The Company recognizes income for unredeemed gift cards when the likelihood of a gift card being redeemed by a customer is remote and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property.

Revenue from licensing arrangements is recognized when earned in accordance with the terms of the underlying agreements, generally based upon the higher of (a) contractually guaranteed minimum royalty levels or (b) actual sales and royalty data, or estimates thereof, received from the Company’s licensees.

The Company accounts for sales and other related taxes on a net basis, excluding such taxes from revenue.

Shipping and Handling Costs

The costs associated with shipping goods to customers are reflected as a component of selling, general and administrative (“SG&A”) expenses in the consolidated statements of operations. Shipping costs were $7.8 million and $21.8 million during the three-month and nine-month periods ended January 1, 2011, respectively, and $7.0 million and $20.0 million during the three-month and nine-month periods ended December 26, 2009, respectively. The costs of preparing merchandise for sale, such as picking, packing, warehousing and order charges (“handling costs”) are also included in SG&A expenses. Handling costs were $28.6 million and $78.4 million during the three-month and nine-month periods ended January 1, 2011, respectively, and $22.8 million and $67.9 million during the three-month and nine-month periods ended December 26, 2009, respectively. Shipping and handling costs billed to customers are included in revenue.

Net Income per Common Share

Basic net income per common share is computed by dividing the net income applicable to common shares after preferred dividend requirements, if any, by the weighted-average number of common shares outstanding during the period. Weighted-average common shares include shares of the Company’s Class A and Class B common stock. Diluted net income per common share adjusts basic net income per common share for the effects of outstanding stock options, restricted stock, restricted stock units and any other potentially dilutive financial instruments, only in the periods in which such effect is dilutive under the treasury stock method.

The weighted-average number of common shares outstanding used to calculate basic net income per common share is reconciled to those shares used in calculating diluted net income per common share as follows:


	Three Months Ended				Nine Months Ended
	January 1,		December 26,		January 1,		December 26,
	2011		2009		2011		2009
	(millions)

Basic		95.5		98.8		96.0		99.1
Dilutive effect of stock options, restricted stock and restricted stock units		2.6		2.6		2.7		2.4

Diluted shares		98.1		101.4		98.7		101.5

Options to purchase shares of common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive and therefore not included in the computation of diluted net income per common share. In addition, the Company has outstanding restricted stock units that are issuable only upon the achievement of certain service and/or performance goals. Such performance-based restricted stock units are included in the computation of diluted shares only to the extent that the underlying performance conditions (a) are satisfied prior to the end of the reporting period or (b) would be satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. As of January 1, 2011 and December 26, 2009, there was an aggregate of approximately 0.4 million and 1.2 million, respectively, of additional shares issuable upon the exercise of anti-dilutive options and the contingent vesting of performance-based restricted stock units that were excluded from the diluted share calculations.

Accounts Receivable

In the normal course of business, the Company extends credit to customers that satisfy defined credit criteria. Accounts receivable, net, as shown in the Company’s consolidated balance sheets, is net of certain reserves and allowances. These reserves and allowances consist of (a) reserves for returns, discounts, end-of-season markdowns and operational chargebacks and (b) allowances for doubtful accounts. These reserves and allowances are discussed in further detail below.

A reserve for sales returns is determined based on an evaluation of current market conditions and historical returns experience. Charges to increase the reserve are treated as reductions of revenue.

A reserve for trade discounts is determined based on open invoices where trade discounts have been extended to customers, and charges to increase the reserve are treated as reductions of revenue.

Estimated end-of-season markdown charges are included as reductions of revenue. The related markdown provisions are based on retail sales performance, seasonal negotiations with customers, historical deduction trends, an evaluation of current economic and market conditions and, in certain cases, contractual terms.

A reserve for operational chargebacks represents various deductions by customers relating to individual shipments. Charges to increase this reserve, net of expected recoveries, are included as reductions of revenue. The reserve is based on actual notifications of order fulfillment discrepancies and past experience.

A rollforward of the activity in the Company’s reserves for returns, discounts, end-of-season markdowns and operational chargebacks is presented below:


	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,
	2011			2009			2011			2009
	(millions)

Beginning reserve balance	$	202.1		$	174.9		$	186.0		$	170.4
Amount charged against revenue to increase reserve		128.6			118.8			357.2			330.3
Amount credited against customer accounts to decrease reserve		(123.9	)		(115.7	)		(337.2	)		(328.3	)
Foreign currency translation		(2.3	)		(2.1	)		(1.5	)		3.5

Ending reserve balance	$	204.5		$	175.9		$	204.5		$	175.9

An allowance for doubtful accounts is determined through analysis of periodic aging of accounts receivable, assessments of collectibility based on an evaluation of historic and anticipated trends, the financial condition of the Company’s customers, and an evaluation of the impact of economic conditions.

A rollforward of the activity in the Company’s allowance for doubtful accounts is presented below:


	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,
	2011			2009			2011			2009
	(millions)

Beginning reserve balance	$	20.1		$	20.3		$	20.1		$	20.5
Amount recorded to expense to (decrease) increase reserve^(a)		(0.6	)		0.6			0.7			2.1
Amount written off against customer accounts to decrease reserve		(0.3	)		(0.6	)		(1.6	)		(3.2	)
Foreign currency translation		(0.3	)		(0.3	)		(0.3	)		0.6

Ending reserve balance	$	18.9		$	20.0		$	18.9		$	20.0


^(a)		Amounts recorded to bad debt expense are included within SG&A expenses in the consolidated statements of operations.

Concentration of Credit Risk

The Company sells its wholesale merchandise primarily to major department and specialty stores across the U.S., Canada, Europe and Asia, and extends credit based on an evaluation of each customer’s financial capacity and condition, usually without requiring collateral. In its wholesale business, concentration of credit risk is relatively limited due to the large number of customers and their dispersion across many geographic areas. However, the Company has five key department-store customers that generate significant sales volume. For Fiscal 2010, these customers in the aggregate contributed approximately 45% of all wholesale revenues. Further, as of January 1, 2011, the Company’s five key department-store customers represented approximately 30% of gross accounts receivable.

Recently Issued Accounting Standards

9 Months Ended

Jan. 01, 2011

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards


4.	Recently Issued Accounting Standards

Consolidation of Variable Interest Entities

In June 2009, the Financial Accounting Standards Board (“FASB”) issued revised guidance for accounting for a variable interest entity (“VIE”), which has been codified within Accounting Standards Codification (“ASC”) topic 810, “Consolidation” (“ASC 810”). The revised guidance within ASC 810 changes the approach to determining the primary beneficiary of a VIE, replacing the quantitative-based risks and rewards approach with a qualitative approach that focuses on identifying which enterprise has (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the entity that could potentially be significant to the VIE. ASC 810 also now requires ongoing reassessment of whether an enterprise is the primary beneficiary of a VIE, as well as additional disclosures about an enterprise’s involvement in VIEs. The Company adopted the revised guidance for VIEs within ASC 810 as of the beginning of Fiscal 2011 (April 4, 2010). The adoption did not have an impact on the Company’s consolidated financial statements.

Proposed Amendments to Current Accounting Standards

The FASB is currently working on amendments to existing accounting standards governing a number of areas including, but not limited to, accounting for leases. In August 2010, the FASB issued an exposure draft, “Leases” (the “Exposure Draft”), which would replace the existing guidance in ASC topic 840, “Leases.” Under the Exposure Draft, among other changes in practice, a lessee’s rights and obligations under all leases, including existing and new arrangements, would be recognized as assets and liabilities, respectively, on the balance sheet. The comment period for the Exposure Draft ended on December 15, 2010 and a final standard is expected to be issued in 2011. When and if effective, this proposed standard will likely have a significant impact on the Company’s consolidated financial statements. However, as the standard-setting process is still ongoing, the Company is unable to determine the impact this proposed change in accounting will have on its consolidated financial statements at this time.

Acquisitions

9 Months Ended

Jan. 01, 2011

Acquisitions [Abstract]

Acquisitions


5.	Acquisitions

Fiscal 2011 Transactions

South Korea Licensed Operations Acquisition

On January 1, 2011, in connection with the transition of the Polo-branded apparel and accessories business in South Korea from a licensed to a wholly owned operation, the Company acquired certain net assets (including inventory) and employees from Doosan Corporation (“Doosan”) in exchange for an initial payment of approximately $25 million plus an additional aggregate payment of approximately $22 million (the “South Korea Licensed Operations Acquisition”). Doosan was the Company’s licensee for Polo-branded apparel and accessories in South Korea. The Company funded the South Korea Licensed Operations Acquisition with available cash on-hand. In conjunction with the South Korea Licensed Operations Acquisition, the Company also entered into a transition services agreement with Doosan for the provision of certain financial and information systems services for a period of up to twelve months commencing on January 1, 2011.

The Company accounted for the South Korea Licensed Operations Acquisition as a business combination during the third quarter of Fiscal 2011. The acquisition cost of $47 million (excluding transaction costs) has been allocated on a preliminary basis to the net assets acquired based on their respective fair values as follows: inventory of $8 million; property and equipment of $10 million; customer relationship intangible asset of $26 million; and other net assets of $3 million. Transaction costs of $3 million were expensed as incurred and classified within SG&A expenses in the consolidated statement of operations. The Company is in the process of completing its assessment of the fair value of assets acquired and liabilities assumed for the allocation of the purchase price. As a result, the estimated purchase price allocation is subject to change.

The customer relationship intangible asset was preliminarily valued using the excess earnings method. This approach discounts the estimated after tax cash flows associated with the existing base of customers as of the acquisition date, factoring in expected attrition of the existing customer base (the “Excess Earnings Method”). The customer relationship intangible asset is expected to be amortized over an estimated useful life of ten years.

The financial position of the Polo-branded apparel and accessories business in South Korea has been reflected in the Company’s consolidated balance sheet as of January 1, 2011. The results of operations for the acquired business are expected to be reported on a one-month lag beginning in the fourth quarter of Fiscal 2011. The net effect of this reporting lag is not expected to be material to the Company’s consolidated financial statements.

Fiscal 2010 Transactions

Asia-Pacific Licensed Operations Acquisition

On December 31, 2009, in connection with the transition of the Polo-branded apparel business in Asia-Pacific (excluding Japan and South Korea) from a licensed to a wholly owned operation, the Company acquired certain net assets from Dickson in exchange for an initial payment of approximately $20 million and other consideration of approximately $17 million. Dickson was the Company’s licensee for Polo-branded apparel in the Asia-Pacific region (excluding Japan and South Korea), which is comprised of China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan and Thailand. The Company funded the Asia-Pacific Licensed Operations Acquisition with available cash on-hand.

The Company accounted for the Asia-Pacific Licensed Operations Acquisition as a business combination during the fourth quarter of Fiscal 2010. The acquisition cost of $37 million (excluding transaction costs) has been allocated to the net assets acquired based on their respective fair values as follows: inventory of $2 million; customer relationship intangible asset of $29 million; tax-deductible goodwill of $1 million and other net assets of $5 million. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired. Transaction costs of $4 million were expensed as incurred and classified within SG&A expenses in the consolidated statement of operations.

The customer relationship intangible asset was valued using the Excess Earnings Method and is being amortized over its estimated useful life of ten years.

The results of operations for the Polo-branded apparel business in Asia-Pacific have been consolidated in the Company’s results of operations commencing on January 1, 2010.

Inventories

9 Months Ended

Jan. 01, 2011

Inventories [Abstract]

Inventories


6.	Inventories

Inventories consist of the following:


	January 1,		April 3,		December 26,
	2011		2010		2009
	(millions)

Raw materials	$	5.7	$	5.9	$	4.6
Work-in-process		1.4		1.3		1.4
Finished goods		690.6		496.8		539.1

Total inventories	$	697.7	$	504.0	$	545.1

Property and Equipment

9 Months Ended

Jan. 01, 2011

Property and Equipment [Abstract]

Property and Equipment


7.	Property and Equipment

Property and equipment, net, consist of the following:


	January 1,			April 3,
	2011			2010
	(millions)

Land and improvements	$	9.9		$	9.9
Buildings and improvements		117.2			113.8
Furniture and fixtures		547.6			515.0
Machinery and equipment		360.4			339.3
Leasehold improvements		808.7			700.0
Construction in progress		65.9			102.5

		1,909.7			1,780.5
Less: accumulated depreciation		(1,153.3	)		(1,083.3	)

Property and equipment, net	$	756.4		$	697.2

Impairments of Assets

9 Months Ended

Jan. 01, 2011

Impairments of Assets [Abstract]

Impairments of Assets


9.	Impairments of Assets

Property and equipment, along with other long-lived assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be fully recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that the estimated future undiscounted net cash flows attributable to the asset are less than its carrying amount, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value.

During the nine months ended December 26, 2009, the Company recorded non-cash impairment charges of $6.6 million to reduce the net carrying value of certain long-lived assets primarily in its Retail segment to their estimated fair value, which was determined based on discounted expected cash flows. This impairment charge was primarily related to the underperformance of certain retail stores, largely related to the Company’s Club Monaco retail business.

There were no asset impairment charges recorded during the nine months ended January 1, 2011.

Restructuring

9 Months Ended

Jan. 01, 2011

Restructuring [Abstract]

Restructuring


10.	Restructuring

The Company has recorded restructuring liabilities in recent years relating to various cost-savings initiatives, as well as certain of its acquisitions. Liabilities for restructuring costs are measured at fair value when incurred. A description of the nature of significant restructuring activities and related costs is presented below.

The Company recognized net restructuring charges of $1.4 million during the nine months ended January 1, 2011, which were primarily related to employee termination costs associated with its domestic wholesale operations and the closing of a warehouse facility, partially offset by reversals of reserves deemed no longer necessary primarily associated with previously closed retail stores. During the nine months ended December 26, 2009, the Company recognized $7.3 million of restructuring charges, primarily related to employee termination costs and the write down of an asset associated with exiting a retail store in Japan.

Income Taxes

9 Months Ended

Jan. 01, 2011

Income Taxes [Abstract]

Income Taxes


11.	Income Taxes

Uncertain Income Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for the three-month and nine-month periods ended January 1, 2011 and December 26, 2009 is presented below:


	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,
	2011			2009			2011			2009
	(millions)

Unrecognized tax benefits beginning balance	$	118.7		$	101.2		$	96.2		$	113.7
Additions related to current period tax positions		0.4			2.8			2.5			6.3
Additions related to prior period tax positions		2.7			1.9			30.0			5.1
Reductions related to prior period tax positions		(5.8	)		(2.2	)		(14.0	)		(11.3	)
Reductions related to settlements with taxing authorities		(2.1	)		(2.3	)		(2.1	)		(15.5	)
Additions (reductions) related to foreign currency		(1.0	)		(1.1	)		0.3			2.0

Unrecognized tax benefits ending balance	$	112.9		$	100.3		$	112.9		$	100.3

The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. A reconciliation of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits for the three-month and nine-month periods ended January 1, 2011 and December 26, 2009 is presented below:


	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,
	2011			2009			2011			2009
	(millions)

Accrued interest and penalties beginning balance	$	32.6		$	31.4		$	29.8		$	41.1
Net additions charged to expense		1.8			3.8			6.5			5.7
Reductions related to prior period tax positions		(2.4	)		(4.6	)		(4.5	)		(9.9	)
Reductions related to settlements with taxing authorities		—			(1.0	)		—			(7.9	)
Additions (reductions) related to foreign currency translation		(0.2	)		(0.2	)		—			0.4

Accrued interest and penalties ending balance	$	31.8		$	29.4		$	31.8		$	29.4

The total amount of unrecognized tax benefits, including interest and penalties, was $144.7 million as of January 1, 2011 and $126.0 million as of April 3, 2010 and was included within non-current liability for unrecognized tax benefits in the consolidated balance sheets. The total amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate was $109.7 million as of January 1, 2011.

Future Changes in Unrecognized Tax Benefits

The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits, excluding interest and penalties, could potentially be reduced by up to approximately $3 million during the next 12 months. However, changes in the occurrence, expected outcomes and timing of those events could cause the Company’s current estimate to change materially in the future.

The Company files tax returns in the U.S. federal and various state, local and foreign jurisdictions. With few exceptions for those tax returns, the Company is no longer subject to examinations by the relevant tax authorities for years prior to Fiscal 2004.

Debt

9 Months Ended

Jan. 01, 2011

Debt [Abstract]

Debt


12.	Debt

Euro Debt

As of January 1, 2011, the Company had outstanding €209.2 million principal amount of 4.5% notes due October 4, 2013 (the “Euro Debt”). The Company has the option to redeem all of the outstanding Euro Debt at any time at a redemption price equal to the principal amount plus a premium. The Company also has the option to redeem all of the outstanding Euro Debt at any time at par plus accrued interest in the event of certain developments involving U.S. tax law. Partial redemption of the Euro Debt is not permitted in either instance. In the event of a change of control of the Company, each holder of the Euro Debt has the option to require the Company to redeem the Euro Debt at its principal amount plus accrued interest. The indenture governing the Euro Debt (the “Indenture”) contains certain limited covenants that restrict the Company’s ability, subject to specified exceptions, to incur liens or enter into a sale and leaseback transaction for any principal property. The Indenture does not contain any financial covenants.

As of January 1, 2011, the carrying value of the Euro Debt was $275.1 million, compared to $282.1 million as of April 3, 2010.

In July 2009, the Company completed a cash tender offer and used $121.0 million to repurchase €90.8 million of principal amount of its then outstanding €300 million principal amount of 4.5% notes due October 4, 2013 at a discounted purchase price of approximately 95%. A net pretax gain of $4.1 million related to this extinguishment of debt was recorded during the second quarter of Fiscal 2010 and classified as a component of interest and other income, net in the Company’s consolidated statements of operations. The Company used its cash on-hand to fund the debt extinguishment.

Revolving Credit Facility and Term Loan

The Company has a credit facility that provides for a $450 million unsecured revolving line of credit through November 2011 (the “Credit Facility”). The Credit Facility also is used to support the issuance of letters of credit. As of January 1, 2011, there were no borrowings outstanding under the Credit Facility and the Company was contingently liable for $15.4 million of outstanding letters of credit. The Company has the ability to expand its borrowing availability to $600 million subject to the agreement of one or more new or existing lenders under the facility to increase their commitments. There are no mandatory reductions in borrowing ability throughout the term of the Credit Facility.

The Credit Facility contains a number of covenants that, among other things, restrict the Company’s ability, subject to specified exceptions, to incur additional debt; incur liens and contingent liabilities; sell or dispose of assets, including equity interests; merge with or acquire other companies; liquidate or dissolve itself; engage in businesses that are not in a related line of business; make loans, advances or guarantees; engage in transactions with affiliates; and make investments. The Credit Facility also requires the Company to maintain a maximum ratio of Adjusted Debt to Consolidated EBITDAR (the “leverage ratio”) of no greater than 3.75 as of the date of measurement for four consecutive quarters. Adjusted Debt is defined generally as consolidated debt outstanding plus 8 times consolidated rent expense for the last twelve months. EBITDAR is defined generally as consolidated net income plus (i) income tax expense, (ii) net interest expense, (iii) depreciation and amortization expense and (iv) consolidated rent expense. As of January 1, 2011, no Event of Default (as such term is defined pursuant to the Credit Facility) has occurred under the Company’s Credit Facility.

Refer to Note 14 of the Fiscal 2010 10-K for detailed disclosure of the terms and conditions of the Company’s debt.

Fair Value Measurements

9 Months Ended

Jan. 01, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements


13.	Fair Value Measurements

US GAAP establishes a three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy of a particular asset or liability depends on the inputs used in valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally derived (unobservable). The three levels are defined as follows:


	•	Level 1 — inputs to the valuation methodology based on quoted prices (unadjusted) for identical assets or liabilities in active markets.

	•	Level 2 — inputs to the valuation methodology based on quoted prices for similar assets and liabilities in active markets for substantially the full term of the financial instrument; quoted prices for identical or similar instruments in markets that are not active for substantially the full term of the financial instrument; and model-derived valuations whose inputs or significant value drivers are observable.

	•	Level 3 — inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis:


	January 1,		April 3,
	2011		2010
	(millions)

Financial assets carried at fair value:
Municipal bonds^(a)	$	39.7	$	—
Variable rate municipal securities^(a)		65.1		66.5
Auction rate securities^(b)		2.3		2.3
Other securities^(a)		0.4		0.4
Derivative financial instruments^(b)		12.8		16.6

Total	$	120.3	$	85.8

Financial liabilities carried at fair value:
Derivative financial instruments^(b)	$	9.4	$	4.2

Total	$	9.4	$	4.2


^(a)		Based on Level 1 measurements.

^(b)		Based on Level 2 measurements.

Derivative financial instruments are recorded at fair value in the Company’s consolidated balance sheets. To the extent these instruments are designated as cash flow hedges and highly effective at reducing the risk associated with the exposure being hedged, the related unrealized gains or losses are deferred in equity as a component of accumulated other comprehensive income (“AOCI”). The Company’s derivative financial instruments are valued using a pricing model, primarily based on market observable external inputs including forward and spot rates for foreign currencies, which considers the impact of the Company’s own credit risk, if any. The Company mitigates the impact of counterparty credit risk by entering into contracts with select financial institutions based on credit ratings and other factors, adhering to established limits for credit exposure and continually assessing the creditworthiness of counterparties. Changes in counterparty credit risk are considered in the valuation of derivative financial instruments.

Certain municipal bonds and variable rate municipal securities (“VRMS”) are classified as available-for-sale securities and recorded at fair value in the Company’s consolidated balance sheet based upon quoted market prices, with unrealized gains or losses deferred in equity as a component of AOCI.

Auction rate securities are classified as available-for-sale securities and recorded at fair value in the Company’s consolidated balance sheets, with unrealized gains and losses deferred in equity as a component of AOCI. Third-party pricing institutions may value auction rate securities at par, which may not necessarily reflect prices that would be obtained in the current market. When quoted market prices are unobservable, fair value is estimated based on a number of known factors and external pricing data, including known maturity dates, the coupon rate based upon the most recent reset market clearing rate, the price/yield representing the average rate of recently successful traded securities, and the total principal balance of each security.

Cash and cash equivalents, restricted cash, short-term and non-current investments classified as held-to-maturity, and accounts receivable are recorded at carrying value, which approximates fair value. The Company’s Euro Debt, which is adjusted for foreign currency fluctuations and changes in the fair value of the Company’s fixed-to-floating interest rate swap, is also reported at carrying value.

The Company’s non-financial instruments, which primarily consist of goodwill, intangible assets, and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill), non-financial instruments are assessed for impairment and, if applicable, written-down to and recorded at fair value.

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details

Financial Instruments

9 Months Ended

Jan. 01, 2011

Financial Instruments [Abstract]

Financial Instruments


14.	Financial Instruments

Derivative Financial Instruments

The Company is primarily exposed to changes in foreign currency exchange rates relating to certain anticipated cash flows from its international operations and potential declines in the fair value of reported net assets of certain of its foreign operations, as well as changes in the fair value of its fixed-rate debt relating to changes in interest rates. Consequently, the Company periodically uses derivative financial instruments to manage such risks. The Company does not enter into derivative transactions for speculative or trading purposes. All of the Company’s undesignated hedges are entered into to hedge specific economic risks.

The following table summarizes the Company’s outstanding derivative instruments on a gross basis as recorded on its consolidated balance sheets as of January 1, 2011 and April 3, 2010:


	Notional Amounts				Derivative Assets						Derivative Liabilities
					Balance			Balance			Balance				Balance
					Sheet	Fair		Sheet	Fair		Sheet	Fair			Sheet	Fair
					Line^(b)	Value		Line^(b)	Value		Line^(b)	Value			Line^(b)	Value
Derivative Instrument^(a)	January 1, 2011		April 3, 2010		January 1, 2011			April 3, 2010			January 1, 2011				April 3, 2010
	(millions)

Designated Hedges:
FC — Inventory purchases	$	269.2	$	294.0	^(c)	$	11.8	PP	$	14.5	AE	$	(1.0	)	AE	$	(2.4	)
FC — I/C royalty payments		68.0		84.4	PP		0.1	^(d)		2.1	AE		(5.5	)	ONCL		(0.1	)
FC — Interest payments		9.4		13.9	—		—	—		—	AE		(0.3	)	AE		(1.2	)
FC — Other		11.7		2.8	PP		0.4	—		—	AE		(0.2	)	AE		(0.1	)
IRS — Euro Debt		276.7		—	—		—	—		—	AE		(1.2	)	—		—
NI — Euro Debt		275.1		282.1	—		—	—		—	LTD		(288.5	)	LTD		(291.7	)^(e)

Total Designated Hedges	$	910.1	$	677.2		$	12.3		$	16.6		$	(296.7	)		$	(295.5	)

Undesignated Hedges:
FC — Other^(f)		41.7		13.6	PP		0.5	—		—	^(g)		(1.2	)	AE		(0.4	)

Total Undesignated Hedges	$	41.7	$	13.6		$	0.5		$	—		$	(1.2	)		$	(0.4	)

Total Hedges	$	951.8	$	690.8		$	12.8		$	16.6		$	(297.9	)		$	(295.9	)


^(a)		FC = Forward exchange contracts for the sale or purchase of foreign currencies; IRS = Interest Rate Swap; NI = Net Investment; Euro Debt = Euro-denominated 4.5% notes due October 4, 2013.

^(b)		PP = Prepaid expenses and other; OA = Other assets; AE = Accrued expenses and other; ONCL = Other non-current liabilities; LTD = Long-term debt.

^(c)		$10.2 million included within PP and $1.6 million included within OA.

^(d)		$1.1 million included within PP and $1.0 million included within OA.

^(e)		The Company’s Euro Debt is reported at carrying value in the Company’s consolidated balance sheets. The carrying value of the Euro Debt was $275.1 million as of January 1, 2011 and $282.1 million as of April 3, 2010.

^(f)		Primarily related to foreign currency-denominated revenues and other net operational exposures.

^(g)		$0.3 million included within AE and $0.9 million included within ONCL.

The following tables summarize the impact of the Company’s derivative instruments on its consolidated financial statements for the three-month and nine-month periods ended January 1, 2011 and December 26, 2009:


	Gains (Losses) Recognized in OCI^(b)
	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,
Derivative Instrument^(a)	2011			2009			2011			2009
				(millions)

Designated Cash Flow Hedges:
FC — Inventory purchases	$	1.2		$	1.4		$	(0.6	)	$	(20.5	)
FC — I/C royalty payments		0.7			3.2			(6.8	)		(4.9	)
FC — Interest payments		0.6			(0.3	)		0.6			(0.3	)
FC — Other		(0.3	)		(0.3	)		0.3			0.4

	$	2.2		$	4.0		$	(6.5	)	$	(25.3	)

Designated Hedge of Net Investment:
Euro Debt	$	8.5		$	9.2		$	5.8		$	(18.0	)

Total Designated Hedges	$	10.7		$	13.2		$	(0.7	)	$	(43.3	)


	Gains (Losses) Reclassified from AOCI^(b) to Earnings
	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,		Location of Gains (Losses)
Derivative Instrument^(a)	2011			2009			2011			2009		Reclassified from AOCI^(b) to Earnings
	(millions)

Designated Cash Flow Hedges:
FC — Inventory purchases	$	5.7		$	5.4		$	11.8		$	13.0	Cost of goods sold
FC — I/C royalty payments		(0.9	)		0.7			(2.1	)		—	Foreign currency losses
FC — Interest payments		(1.0	)		(1.5	)		(0.7	)		0.8	Foreign currency losses
FC — Other		(0.1	)		—			—			1.4	Foreign currency losses

Total Designated Hedges	$	3.7		$	4.6		$	9.0		$	15.2


	Gains (Losses) Recognized in Earnings
	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,		Location of Gains (Losses)
Derivative Instrument^(a)	2011			2009			2011			2009		Recognized in Earnings
	(millions)

Designated Fair Value Hedges:
IRS — Euro debt	$	(1.6	)	$	—		$	(1.2	)	$	—	Interest and other income, net

Total Designated Hedges	$	(1.6	)	$	—		$	(1.2	)	$	—

Undesignated Hedges:
FC — Inventory purchases	$	—		$	—		$	—		$	0.7	Foreign currency losses
FC — Other		(0.9	)		(0.5	)		0.4			1.0	Foreign currency losses

Total Undesignated Hedges	$	(0.9	)	$	(0.5	)	$	0.4		$	1.7


^(a)		FC = Forward exchange contracts for the sale or purchase of foreign currencies; Euro Debt = Euro-denominated 4.5% notes due October 4, 2013; IRS = Interest Rate Swap.

^(b)		AOCI, including the respective fiscal period’s other comprehensive income (“OCI”), is classified as a component of total equity.

Over the next twelve months, it is expected that approximately $4 million of net gains deferred in AOCI related to derivative financial instruments outstanding as of January 1, 2011 will be recognized in earnings. No material gains or losses relating to ineffective hedges were recognized during any of the fiscal periods presented.

The following is a summary of the Company’s risk management strategies and the effect of those strategies on the consolidated financial statements.

Foreign Currency Risk Management

Forward Foreign Currency Exchange Contracts

The Company primarily enters into forward foreign currency exchange contracts as hedges to reduce its risk from exchange rate fluctuations on inventory purchases, intercompany royalty payments made by certain of its international operations, intercompany contributions made to fund certain marketing efforts of its international operations, interest payments made in connection with outstanding debt, other foreign currency-denominated operational cash flows, and foreign currency-denominated revenues. As part of its overall strategy to manage the level of exposure to the risk of foreign currency exchange rate fluctuations, primarily to changes in the value of the Euro, the Japanese Yen, the Hong Kong Dollar, the Swiss Franc, and the British Pound Sterling, the Company hedges a portion of its foreign currency exposures anticipated over the ensuing twelve-month to two-year periods. In doing so, the Company uses foreign currency exchange forward contracts that generally have maturities of three months to two years to provide continuing coverage throughout the hedging period.

The Company records its foreign currency exchange contracts at fair value in its consolidated balance sheets. To the extent foreign currency exchange contracts designated as cash flow hedges at hedge inception are highly effective in offsetting the change in the value of the hedged item, the related gains (losses) are deferred in equity as a component of AOCI. These deferred gains (losses) are then recognized in our consolidated statements of operations as follows:


	•	Forecasted Inventory Purchases — Recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold.

	•	Intercompany Royalty Payments and Marketing Contributions — Recognized within foreign currency gains (losses) in the period in which the related royalties or marketing contributions being hedged are received or paid.

	•	Interest Payments on Euro Debt — Recognized within foreign currency gains (losses) in the period in which the recorded liability impacts earnings due to foreign currency exchange remeasurement.

To the extent that a derivative contract designated as a hedge is not considered to be effective, any changes in fair value relating to the ineffective portion are immediately recognized in earnings within foreign currency gains (losses). If it is determined that a derivative has not been highly effective, and will continue not to be highly effective at hedging the designated exposure, hedge accounting is discontinued. If a hedge relationship is terminated, the change in fair value of the derivative previously recorded in AOCI is recognized when the hedged item affects earnings consistent with the original hedging strategy, unless the forecasted transaction is no longer probable of occurring in which case the accumulated amount is immediately recognized in earnings. In addition, changes in fair value relating to undesignated foreign currency exchange contracts are immediately recognized in earnings.

Hedge of a Net Investment in Certain European Subsidiaries

The Company designated the entire principal amount of its outstanding Euro Debt as a hedge of its net investment in certain of its European subsidiaries. The changes in fair value of a derivative instrument or a non-derivative financial instrument (such as debt) that is designated as a hedge of a net investment in a foreign operation are reported in the same manner as a translation adjustment, to the extent it is effective as a hedge. As such, changes in the value of the Euro Debt resulting from changes in the Euro exchange rate have been, and continue to be, reported in equity as a component of AOCI.

Interest Rate Risk Management

Interest Rate Swap Contracts

On July 2, 2010, the Company entered into a fixed-to-floating interest rate swap designated as a fair value hedge to mitigate its exposure to changes in the fair value of the Company’s Euro Debt due to changes in the benchmark interest rate. The interest rate swap, which matures on October 4, 2013, has an aggregate notional value of €209.2 million and swaps the 4.5% fixed interest rate on the Company’s Euro Debt for a variable interest rate equal to the 3-month Euro Interbank Offered Rate plus 299 basis points. The Company’s interest rate swap meets the requirements for shortcut method accounting. Accordingly, changes in the fair value of the interest rate swap are exactly offset by changes in the fair value of the Euro Debt. No ineffectiveness has been recorded during the three-month and nine-month periods ended January 1, 2011.

Investments

The Company classifies its investments in securities at the time of purchase as held-to-maturity, available-for-sale or trading, and re-evaluates such classifications on a quarterly basis.

Held-to-maturity investments consist of debt securities that the Company has the intent and ability to retain until maturity. These securities are recorded at cost, adjusted for the amortization of premiums and discounts, which approximates fair value.

Available-for-sale investments primarily consist of municipal bonds, VRMS and auction rate securities. VRMS represent long-term municipal bonds with interest rates that reset at pre-determined short-term intervals, and can typically be put to the issuer and redeemed for cash upon demand, or shortly thereafter. Auction rate securities also have characteristics similar to short-term investments. However, the Company has classified these securities as non-current investments in its consolidated balance sheet as current market conditions call into question its ability to redeem these investments for cash within the next twelve months. Available-for-sale investments are recorded at fair value with unrealized gains or losses classified as a component of AOCI in the consolidated balance sheets, and related realized gains or losses classified as a component of interest and other income, net, in the consolidated statements of operations. No material unrealized or realized gains or losses on available-for-sale investments were recorded during any of the fiscal periods presented.

Cash inflows and outflows related to the sale and purchase of investments are classified as investing activities in the Company’s consolidated statements of cash flows.

The following table summarizes the Company’s short-term and non-current investments recorded in the consolidated balance sheets as of January 1, 2011 and April 3, 2010:


	January 1, 2011						April 3, 2010
	Short-term		Non-current				Short-term		Non-current
Type of Investment	< 1 year		1 - 3 years		Total		< 1 year		1 - 3 years		Total
	(millions)

Held-to-Maturity:
Treasury bills	$	17.1	$	—	$	17.1	$	126.6	$	—	$	126.6
Municipal bonds		86.2		37.3		123.5		102.2		67.8		170.0
Commercial paper		—		—		—		2.0		—		2.0
Other securities		—		—		—		—		5.0		5.0

Total held-to-maturity investments	$	103.3	$	37.3	$	140.6	$	230.8	$	72.8	$	303.6

Available-for-Sale:
Municipal bonds	$	14.2	$	25.5	$	39.7	$	—	$	—	$	—
Variable rate municipal securities		65.1		—		65.1		66.5		—		66.5
Auction rate securities		—		2.3		2.3		—		2.3		2.3
Other securities		—		0.4		0.4		—		0.4		0.4

Total available-for-sale investments	$	79.3	$	28.2	$	107.5	$	66.5	$	2.7	$	69.2

Other:
Time deposits and other	$	416.8	$	—	$	416.8	$	286.8	$	—	$	286.8

Total Investments	$	599.4	$	65.5	$	664.9	$	584.1	$	75.5	$	659.6

- Definition

This item represents the entity's disclosure related to: (1) derivative instruments and hedging activities, including (a) the entity's risk management strategies, (b) derivatives in hedging activities and non-hedging derivative instruments, (c) the assets, obligations, liabilities, revenues and expenses arising there from, and (d) the amounts of and methodologies and assumptions used in determining the amounts of such items; and (2) investments in certain debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values, including (a) debt securities representing creditor relationships with enterprises that are in the form of a security, such as US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper and all securitized debt instruments, and (b) equity securities representing ownership interests in enterprises or the right to acquire or dispose of ownership interests in enterprises at fixed or determinable prices, such as common stock, certain preferred stock, warrant rights, call options and put options, but not convertible debt.

+ References+ Details

Equity

9 Months Ended

Jan. 01, 2011

Equity [Abstract]

Equity


15.	Equity

Summary of Changes in Equity


	Nine Months Ended
	January 1,			December 26,
	2011			2009
	(millions)

Balance at beginning of period	$	3,116.6		$	2,735.1
Comprehensive income:
Net income attributable to PRLC		494.4			365.4
Foreign currency translation adjustments		29.0			94.1
Net realized and unrealized losses on derivatives		(0.9	)		(34.2	)
Net unrealized losses on available-for-sale investments		(0.1	)		—
Net unrealized gains on defined benefit plans		—			0.7

Total comprehensive income		522.4			426.0

Cash dividends declared		(28.7	)		(19.8	)
Repurchases of common stock		(347.7	)		(153.4	)
Shares issued and equity grants made pursuant to stock-based compensation plans		150.4			88.2

Balance at end of period	$	3,413.0		$	3,076.1

Secondary Stock Offering

On June 14, 2010, the Company commenced a secondary public offering under which approximately 10 million shares of Class A common stock were sold on behalf of its principal stockholder, Mr. Ralph Lauren, Chairman of the Board and Chief Executive Officer (the “Offering”). The Offering was made pursuant to a shelf registration statement on Form S-3 filed on the same day, and closed on June 24, 2010. Concurrent with the Offering, the Company also purchased an additional 1.0 million shares of Class A common stock under its repurchase program from Mr. Lauren at a cost of $81 million, representing the per share price of the public offering.

Class B Common Stock Conversion

In connection with the Offering and share repurchase discussed above, during the first quarter of Fiscal 2011, Mr. Lauren converted approximately 11 million shares of Class B common stock into an equal number of shares of Class A common stock pursuant to the terms of the security. Also, during the first quarter of Fiscal 2011, Mr. Lauren converted an additional 0.3 million shares of Class B common stock into an equal number of shares of Class A common stock pursuant to the terms of the security. These transactions resulted in a reclassification within equity, and had no effect on the Company’s consolidated balance sheets.

Common Stock Repurchase Program

On May 18, 2010, the Company’s Board of Directors approved an expansion of the Company’s existing common stock repurchase program that allows the Company to repurchase up to an additional $275 million of Class A common stock. On August 5, 2010, the Company’s Board of Directors approved an additional expansion of the existing common stock repurchase program that allows the Company to repurchase up to an additional $250 million in Class A common stock. Repurchases of shares of Class A common stock are subject to overall business and market conditions.

During the nine months ended January 1, 2011, 4.0 million shares of Class A common stock were repurchased by the Company at a cost of $331.0 million under its repurchase program, including a repurchase of 1.0 million shares of Class A common stock at a cost of $81.0 million in connection with the secondary stock offering discussed above. The remaining availability under the Company’s common stock repurchase program was approximately $469 million as of January 1, 2011.

In addition, during the nine months ended January 1, 2011, 0.2 million shares of Class A common stock at a cost of $16.7 million were surrendered to, or withheld by, the Company in satisfaction of withholding taxes in connection with the vesting of awards under the Company’s 1997 Long-Term Stock Incentive Plan, as amended (the “1997 Incentive Plan”).

Repurchased and surrendered shares are accounted for as treasury stock at cost and will be held in treasury for future use.

On February 8, 2011, the Company’s Board of Directors approved a further expansion of the Company’s existing common stock repurchase program that allows the Company to repurchase up to an additional $250 million of Class A common stock.

Dividends

Since 2003, the Company has maintained a regular quarterly cash dividend program on its common stock. On November 4, 2009, the Company’s Board of Directors approved an increase to the Company’s quarterly cash dividend on its common stock from $0.05 per share to $0.10 per share. The third quarter Fiscal 2011 dividend of $0.10 per share was declared on December 20, 2010, was payable to shareholders of record at the close of business on December 31, 2010, and was paid on January 14, 2011. Dividends paid amounted to $28.9 million during the nine months ended January 1, 2011 and $14.9 million during the nine months ended December 26, 2009.

On February 8, 2011, the Company’s Board of Directors approved an additional increase to the Company’s quarterly cash dividend on its common stock from $0.10 per share to $0.20 per share. In addition, the fourth quarter Fiscal 2011 dividend of $0.20 per share was declared on February 8, 2011, payable on April 15, 2011 to shareholders of record at the close of business on April 1, 2011.

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References+ Details

Stock-Based Compensation

9 Months Ended

Jan. 01, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation


16.	Stock-based Compensation

Long-term Stock Incentive Plans

On August 5, 2010, the Company’s shareholders approved the 2010 Long-Term Stock Incentive Plan (the “2010 Incentive Plan”), which replaced the Company’s 1997 Incentive Plan. The 2010 Incentive Plan provides for up to 3.0 million of new shares authorized for issuance to participants, in addition to the approximately 1.4 million shares that remained available for issuance under the 1997 Incentive Plan. In addition, any outstanding awards under the 1997 Incentive Plan that expire, are forfeited, or are surrendered to the Company in satisfaction of taxes, will be transferred to the 2010 Incentive Plan and be available for issuance. The 2010 Incentive Plan became effective immediately and no further grants will be made under the 1997 Incentive Plan. Outstanding awards as of August 5, 2010 will continue to remain subject to the terms of the 1997 Incentive Plan.

Under both the 2010 Incentive Plan and the 1997 Incentive Plan (the “Plans”), there are limits as to the number of shares available for certain awards and to any one participant. Equity awards that may be made under the Plans include, but are not limited to (a) stock options, (b) restricted stock and (c) restricted stock units (“RSUs”).

Impact on Results

A summary of the total compensation expense recorded within SG&A expenses and the associated income tax benefits recognized related to stock-based compensation arrangements is as follows:


	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,
	2011			2009			2011			2009
	(millions)

Compensation expense	$	18.1		$	15.3		$	48.9		$	39.7

Income tax benefit	$	(6.4	)	$	(5.6	)	$	(17.7	)	$	(14.6	)

The Company issues its annual grant of stock-based compensation awards in the second quarter of its fiscal year. Due to the timing of the annual grant, stock-based compensation cost recognized during the three-month and nine-month periods ended January 1, 2011 is not indicative of the level of compensation cost expected to be incurred for the full Fiscal 2011.

Stock Options

Stock options are granted to employees and non-employee directors with exercise prices equal to the fair market value of the Company’s unrestricted Class A common stock on the date of grant. Generally, the options become exercisable ratably (a graded-vesting schedule) over a three-year vesting period. The Company recognizes compensation expense for share-based awards that have graded vesting and no performance conditions on an accelerated basis.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted, which requires the input of both subjective and objective assumptions. The Company develops its assumptions by analyzing the historical exercise behavior of employees and non-employee directors. The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the nine months ended January 1, 2011 and December 26, 2009 were as follows:


	Nine Months Ended
	January 1,			December 26,
	2011			2009

Expected term (years)		4.6			4.6
Expected volatility		44.3	%		43.3	%
Expected dividend yield		0.51	%		0.46	%
Risk-free interest rate		1.6	%		2.2	%
Weighted-average option grant date fair value	$	28.16		$	21.50

A summary of the stock option activity under all plans during the nine months ended January 1, 2011 is as follows:


	Number of
	Shares
	(thousands)

Options outstanding at April 3, 2010		5,055
Granted		862
Exercised		(1,692	)
Cancelled/Forfeited		(52	)

Options outstanding at January 1, 2011		4,173

Restricted Stock and RSUs

The Company grants restricted shares of Class A common stock and service-based RSUs to certain of its senior executives and non-employee directors. In addition, the Company grants performance-based RSUs to such senior executives and other key executives, and certain other employees of the Company. The fair values of restricted stock shares and RSUs are based on the fair value of unrestricted Class A common stock, as adjusted to reflect the absence of dividends for those restricted securities that are not entitled to dividend equivalents. The Company’s weighted-average grant date fair values of restricted stock shares and RSUs granted during the nine months ended January 1, 2011 and December 26, 2009 were as follows:


	Nine Months Ended
	January 1,		December 26,
	2011		2009

Weighted-average grant date fair value of restricted stock	$	—	$	41.58
Weighted-average grant date fair value of performance-based RSUs		74.95		57.92

Generally, restricted stock grants to employees vest over a five-year period of time, subject to the executive’s continuing employment. Restricted stock shares granted to non-employee directors vest over a three-year period of time. Service-based RSUs generally vest over a five-year period of time, subject to the executive’s continuing employment. Performance-based RSUs generally vest (a) upon the completion of a three-year period of time (cliff vesting), subject to the employee’s continuing employment and the Company’s achievement of certain performance goals over the three-year period or (b) ratably, over a three-year period of time (graded vesting), subject to the employee’s continuing employment during the applicable vesting period and the achievement by the Company of certain performance goals either (i) in each year of the three-year vesting period for grants made prior to Fiscal 2008 or (ii) solely in the initial year of the three-year vesting period for grants made during and after Fiscal 2008.

A summary of the restricted stock and RSU activity during the nine months ended January 1, 2011 is as follows:


			Service-			Performance-
	Restricted Stock		based RSUs			based RSUs
	Number of		Number of			Number of
	Shares		Shares			Shares
	(thousands)

Nonvested at April 3, 2010		11		462			1,359
Granted		—		—			603
Vested		—		(120	)		(496	)
Cancelled		—		—			(33	)

Nonvested at January 1, 2011		11		342			1,433

Commitments and Contingencies

9 Months Ended

Jan. 01, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies


17.	Commitments and Contingencies

California Class Action Litigation

On October 11, 2007 and November 2, 2007, two class action lawsuits were filed by two customers in state court in California asserting that while they were shopping at certain of the Company’s factory stores in California, the Company allegedly required them to provide certain personal information at the point-of-sale in order to complete a credit card purchase. The plaintiffs purported to represent a class of customers in California who allegedly were injured by being forced to provide their address and telephone numbers in order to use their credit cards to purchase items from the Company’s stores, which allegedly violated Section 1747.08 of California’s Song-Beverly Act. The complaints sought an unspecified amount of statutory penalties, attorneys’ fees and injunctive relief. The Company subsequently had the actions moved to the United States District Court for the Eastern and Central Districts of California. Subsequently, the parties agreed to settle these claims by agreeing that the Company would issue $20 merchandise discount coupons with six month expiration dates to eligible parties and would pay the plaintiffs’ attorneys’ fees. In connection with this settlement, the Company recorded a $5 million reserve against its expected loss exposure during the second quarter of Fiscal 2009. The terms of the settlement were later approved by the Court. Accordingly, the coupons were issued in February 2010 and expired on August 16, 2010. Based on the coupon redemption experience, the Company reversed $1.7 million of its original $5.0 million reserve into income during Fiscal 2010, and the remaining $1.9 million of reserves was reversed into income during Fiscal 2011.

Wathne Imports Litigation

On August 19, 2005, Wathne Imports, Ltd. (“Wathne”), Polo’s then domestic licensee for luggage and handbags, filed a complaint in the U.S. District Court in the Southern District of New York against the Company and Ralph Lauren, its Chairman and Chief Executive Officer, asserting, among other things, federal trademark law violations, breach of contract, breach of obligations of good faith and fair dealing, fraud and negligent misrepresentation. The complaint sought, among other relief, injunctive relief, compensatory damages in excess of $250 million and punitive damages of not less than $750 million. On September 13, 2005, Wathne withdrew this complaint from the U.S. District Court and filed a complaint in the Supreme Court of the State of New York, New York County, making substantially the same allegations and claims (excluding the federal trademark claims), and seeking similar relief. On February 1, 2006, the court granted the Company’s motion to dismiss all of the causes of action, including the cause of action against Mr. Lauren, except for breach of contract related claims, and denied Wathne’s motion for a preliminary injunction. Following some discovery, the Company moved for summary judgment on the remaining claims. Wathne cross-moved for partial summary judgment. In an April 11, 2008 Decision and Order, the court granted Polo’s summary judgment motion to dismiss most of the claims against the Company, and denied Wathne’s cross-motion for summary judgment. Wathne appealed the dismissal of its claims to the Appellate Division of the Supreme Court. Following a hearing on May 19, 2009, the Appellate Division issued a Decision and Order on June 9, 2009 which, in large part, affirmed the lower court’s ruling. Discovery on those claims that were not dismissed is ongoing and a trial date has not yet been set. The Company intends to continue to contest the remaining claims in this lawsuit vigorously. Management does not expect that the ultimate resolution of this matter will have a material adverse effect on the Company’s liquidity or financial position.

California Labor Litigation

On May 30, 2006, four former employees of the Company’s Ralph Lauren stores in Palo Alto and San Francisco, California filed a lawsuit in the San Francisco Superior Court alleging violations of California wage and hour laws. The plaintiffs purported to represent a class of employees who allegedly had been injured by not properly being paid commission earnings, not being paid overtime, not receiving rest breaks, being forced to work off of the clock while waiting to enter or leave stores and being falsely imprisoned while waiting to leave stores. The complaint sought an unspecified amount of compensatory damages, damages for emotional distress, disgorgement of profits, punitive damages, attorneys’ fees and injunctive and declaratory relief. Subsequent to answering the complaint, the Company had the action moved to the United States District Court for the Northern District of California. On July 8, 2008, the United States District Court for the Northern District of California granted plaintiffs’ motion for class certification and subsequently denied the Company’s motion to decertify the class. On November 5, 2008, the District Court stayed litigation of the rest break claims pending the resolution of a separate California Supreme Court case on the standards of class treatment for rest break claims. On January 25, 2010, the District Court granted plaintiffs’ motion to sever the rest break claims from the rest of the case and denied the Company’s motion to decertify the waiting time claims. The District Court also ordered that a trial be held on the waiting time and overtime claims, which commenced on March 8, 2010. During trial, the parties reached an agreement to settle all of the claims in the litigation, including the rest break claims, for $4 million. The District Court granted preliminary approval of the settlement on May 21, 2010. Class members had 60 days from the date of preliminary approval to submit claims or object to the settlement. Only a single objection to the settlement was received from one former employee. The Court dismissed the objection and granted final approval of the settlement on August 27, 2010. In connection with this settlement, the Company recorded a $4 million reserve against its expected loss exposure during the fourth quarter of Fiscal 2010.

Other Matters

The Company is otherwise involved, from time to time, in litigation, other legal claims and proceedings involving matters associated with or incidental to its business, including, among other things, matters involving credit card fraud, trademark and other intellectual property, licensing, and employee relations. The Company believes that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on its financial condition or results of operations. However, the Company’s assessment of the current litigation or other legal claims could change in light of the discovery of facts not presently known or determinations by judges, juries or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.

Segment Information

9 Months Ended

Jan. 01, 2011

Segment Information [Abstract]

Segment Information


18.	Segment Information

The Company has three reportable segments based on its business activities and organization: Wholesale, Retail and Licensing. Such segments offer a variety of products through different channels of distribution. The Wholesale segment consists of women’s, men’s and children’s apparel, accessories, home furnishings, and related products which are sold to major department stores, specialty stores, golf and pro shops and the Company’s owned and licensed retail stores in the U.S. and overseas. The Retail segment consists of the Company’s worldwide retail operations, which sell products through its full-price and factory stores, its concessions-based shop-within-shops, as well as RalphLauren.com, Rugby.com and RalphLauren.co.uk, its e-commerce websites. The stores, concessions-based shop-within-shops and websites sell products purchased from the Company’s licensees, suppliers and Wholesale segment. The Licensing segment generates revenues from royalties earned on the sale of the Company’s apparel, home and other products internationally and domestically through licensing alliances. The licensing agreements grant the licensees rights to use the Company’s various trademarks in connection with the manufacture and sale of designated products in specified geographical areas for specified periods.

The accounting policies of the Company’s segments are consistent with those described in Notes 2 and 3 to the Company’s consolidated financial statements included in the Fiscal 2010 10-K. Sales and transfers between segments generally are recorded at cost and treated as transfers of inventory. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. Each segment’s performance is evaluated based upon operating income before restructuring charges and certain other one-time items, such as legal charges, if any. Corporate overhead expenses (exclusive of certain expenses for senior management, overall branding-related expenses and certain other corporate-related expenses) are allocated to the segments based upon specific usage or other allocation methods.

Due to changes in the Company’s segment presentation as discussed in Note 2, segment information for the three-month and nine-month periods ended December 26, 2009 has been recast to conform to the current periods’ presentation. These changes entirely related to reclassifications between the Company’s Wholesale and Retail segments, and had no impact on total revenues, total operating income or total assets.

Net revenues and operating income for each segment under the Company’s new (recasted) basis of reporting are as follows:


	Three Months Ended						Nine Months Ended
	January 1,			December 26,			January 1,			December 26,
	2011			2009			2011			2009
	(millions)

Net revenues:
Wholesale	$	676.3		$	560.3		$	2,026.1		$	1,796.4
Retail		821.6			635.3			2,072.9			1,708.8
Licensing		50.1			48.3			134.4			136.6

Total net revenues	$	1,548.0		$	1,243.9		$	4,233.4		$	3,641.8

Operating income:
Wholesale	$	130.3		$	107.5		$	475.9		$	402.0
Retail		152.9			100.4			362.0			235.7
Licensing		29.7			24.1			80.8			73.3

		312.9			232.0			918.7			711.0
Less:
Unallocated corporate expenses		(66.2	)		(58.9	)		(190.8	)		(168.6	)
Unallocated legal and restructuring charges, net^(a)		(0.4	)		(0.6	)		—			(7.3	)

Total operating income	$	246.3		$	172.5		$	727.9		$	535.1


	^(a)	Fiscal periods presented included certain unallocated restructuring charges and legal-related activity. Restructuring reversals, net for the three months ended January 1, 2011 were $0.1 million, of which $0.3 million represented the reversal of reserves deemed no longer necessary related to the Retail segment, partially offset by charges of $0.2 related to the Wholesale segment. Restructuring charges, net for the nine months ended January 1, 2011 were $1.4 million, of which $2.0 million related to the Wholesale segment, $1.2 million related to Corporate operations and $1.8 million represented the reversal of reserves deemed no longer necessary primarily related to the Retail segment. Restructuring charges of

$0.6 million for the three months ended December 26, 2009 related to the Wholesale segment. Restructuring charges for the nine months ended December 26, 2009 included $3.7 million related to the Wholesale segment, $2.6 million related to the Retail segment and $1.0 million related to Corporate operations. Legal-related activity for the three months ended January 1, 2011 consisted of legal charges of $0.5 million. Legal related activity for the nine months ended January 1, 2011 consisted of the reversals of legal accruals of $1.9 million deemed no longer necessary related to the California Class Action Litigation (see Note 17), partially offset by legal charges of $0.5 million.

Depreciation and amortization expense for each segment under the Company’s new (recasted) basis of reporting is as follows:


	Three Months Ended				Nine Months Ended
	January 1,		December 26,		January 1,		December 26,
	2011		2009		2011		2009
	(millions)

Depreciation and amortization:
Wholesale	$	9.9	$	12.3	$	36.0	$	37.4
Retail		30.6		20.4		73.3		61.0
Licensing		0.4		0.4		1.0		1.4
Unallocated corporate expenses		9.5		11.0		32.5		33.7

Total depreciation and amortization	$	50.4	$	44.1	$	142.8	$	133.5

Additional Financial Information

9 Months Ended

Jan. 01, 2011

Additional Financial Information [Abstract]

Additional Financial Information


19.	Additional Financial Information

Cash Interest and Taxes


	Three Months Ended					Nine Months Ended
	January 1,			December 26,		January 1,			December 26,
	2011			2009		2011			2009
	(millions)

Cash paid for interest	$	15.3	^(a)	$	14.6	$	18.1	^(a)	$	22.2

Cash paid for income taxes	$	56.5		$	50.0	$	180.4		$	130.5


	^(a)	Net of $0.4 million cash received related to the interest rate swap on the Company’s Euro Debt (see Note 14).

Non-cash Transactions

Significant non-cash investing activities included the capitalization of fixed assets and recognition of related obligations in the net amount of $19.2 million for the nine months ended January 1, 2011 and $14.5 million for the nine months ended December 26, 2009. Significant non-cash investing activities also included the non-cash allocation of the fair value of the net assets acquired in connection with the South Korea Licensed Operations Acquisition on January 1, 2011. See Note 5 for further discussion of the Company’s acquisitions.

Significant non-cash financing activities during the nine months ended January 1, 2011 and December 26, 2009 included the conversion of 11.3 million shares and 0.9 million shares, respectively, of Class B common stock into an equal number of shares of Class A common stock, as described further in Note 15.

There were no other significant non-cash investing or financing activities for the nine months ended January 1, 2011 or December 26, 2009.