UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 9, 2005
POLO RALPH LAUREN CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
001-13057 13-2622036
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(Commission File Number) (IRS Employer Identification No.)
650 MADISON AVENUE, NEW YORK, NEW YORK 10022
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(Address of Principal Executive Offices) (Zip Code)
(212) 318-7000
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On June 10, 2005, Polo Ralph Lauren Corporation (the "Company")
reported its results of operations for its fiscal quarter and fiscal year ended
April 2, 2005. A copy of the press release issued by the Company concerning the
foregoing results is furnished herewith as Exhibit 99.1 and is incorporated
herein by reference.
The information in this Form 8-K, including the accompanying exhibit,
is being furnished under Item 2.02 and shall not be deemed to be "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act"), or otherwise subject to the liability of such section, nor shall such
information be deemed incorporated by reference in any filing under the
Securities Act of 1933 or the Exchange Act, regardless of the general
incorporation language of such filing, except as shall be expressly set forth by
specific reference in such filing.
ITEM 4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW.
(a) On June 9, 2005, the Company's management and Audit Committee
concluded that the Company will restate certain prior period financial
statements for the following items:
1. Accounting for Leasing Transactions
On February 7, 2005, the Office of the Chief Accountant of the
Securities and Exchange Commission ("SEC") issued a letter to the
American Institute of Certified Public Accountants expressing its views
regarding certain operating lease accounting issues and their
application under accounting principles generally accepted in the
United States of America. The Company's management subsequently
initiated a review of its lease-related accounting practices and
determined that the manner in which it accounts for construction
allowances and the period over which it recognizes rent expense were
not in accordance with Financial Accounting Standards Board ("FASB")
Technical Bulletin No. 88-1 "Issues Relating to Accounting for Leases"
("FTB No. 88-1").
With respect to construction allowances, FTB No. 88-1 states that lease
incentives should be treated by the lessee as a reduction of rental
expense and amortized on a straight-line basis over the term of the
lease in accordance with FTB No. 85-3 "Accounting for Operating Leases
with Scheduled Rent Increases." Accordingly, the restatement will
reflect long-term liabilities for the unamortized portion of
construction allowances (deferred lease incentives) which are amortized
over the lease term on a straight-line basis as a reduction of rent
expense. The Company had previously recorded these allowances as a
reduction of property and
equipment and amortized them over the lease term as a reduction of
depreciation expense.
In determining the proper period over which to recognize rent expense
with free rent periods and/or rent escalation, FTB No. 88-1 considers
the lessee's possession or right to control the physical use of the
property, and requires that straight-line rent expense begin when the
lessee takes possession of or controls the use of the space. The
Company had previously recorded straight-line rent expense beginning on
the store opening date, as the Company believed that "possession" under
FTB No. 88-1 occurred on the date it took physical control of the space
through occupancy, without considering the construction build-out
period.
The impact of the construction allowance restatement on the Company's
April 3, 2004 consolidated balance sheet is an increase in property and
equipment, net of approximately $11.4 million and an increase in
deferred lease costs of approximately $20.6 million. The impact on the
Company's selling general and administrative costs is an increase of
approximately $2.9 million for fiscal 2004, a decrease of approximately
$2.4 million for fiscal 2003 and a decrease of $0.1 million for 2002.
2. R L Media Consolidation
In February 2000 Ralph Lauren Media LLC, a joint venture with National
Broadcasting Company, Inc. and certain affiliated companies ("NBC"),
was formed. Under this 30-year joint venture agreement, Ralph Lauren
Media is owned 50% by the Company and 50% by NBC. The Company has used
the equity method of accounting for this investment since inception.
The Company has determined, upon subsequent review and with the benefit
of addition interpretations of under FASB Interpretation 46R ("FIN
46R"), issued on December 24, 2003, that consolidation of Ralph Lauren
Media into the Company's financial statements was required as of April
3, 2004. The impact on the Company's balance sheet as of April 3, 2004
is to increase assets by approximately $18 million and liabilities by
approximately $9.0 million. There was no effect on prior years'
reported earnings.
The Company will restate results for fiscal 2001 through fiscal 2004
and the first three quarters of fiscal 2005. Accordingly, the financial
statements and independent auditors' reports contained in the Company's filings
with the Securities and Exchange Commission for these periods should no longer
be relied upon. These restatements will be reflected in the Company's Annual
Report on Form 10-K for fiscal 2005, which it expects to file by July 1, 2005.
The Audit Committee and management of the Company discussed with the
Company's independent registered public accounting firm the matters disclosed in
this Item 4.02(a) of this Form 8-K.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
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99.1 Press release, dated June 10, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
POLO RALPH LAUREN CORPORATION
Date: June 10, 2005 By: /s/ Tracey T. Travis
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Name: Tracey T. Travis
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
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99.1 Press release, dated June 10, 2005