Item 15. Exhibits, Financial Statement Schedules.

(a) 1., 2. Financial Statements and Financial Statement Schedules. See index on Page F-1.

3. Exhibits

Exhibit Number		Description
3.1		Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company's Registration Statement on Form S-1 (File No. 333-24733) (the "S-1"))
3.2		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Form 8-K filed August 16, 2011)
3.3		Third Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Form 8-K dated February 4, 2014)
4.1		Indenture, dated as of September 26, 2013, by and between the Company and Wells Fargo Bank, National Association (including the form of Note) (filed as Exhibit 4.1 to the Form 8-K dated September 23, 2013)
4.2		First Supplemental Indenture, dated as of September 26, 2013, by and between the Company and Wells Fargo Bank, National Association (filed as Exhibit 4.2 to the Form 8-K dated September 23, 2013)
4.3		Second Supplemental Indenture, dated as of August 18, 2015, by and between Ralph Lauren Corporation and Wells Fargo Bank, National Association (filed as Exhibit 4.2 to the Form 8-K dated August 13, 2015)
10.1		Registration Rights Agreement dated as of June 9, 1997 by and among Ralph Lauren, GS Capital Partners, L.P., GS Capital Partner PRL Holding I, L.P., GS Capital Partners PRL Holding II, L.P., Stone Street Fund 1994, L.P., Stone Street 1994 Subsidiary Corp., Bridge Street Fund 1994, L.P., and the Company (filed as Exhibit 10.3 to the S-1)
10.2		Form of Indemnification Agreement between the Company and its Directors and Executive Officers (filed as Exhibit 10.26 to the S-1)
10.3		Amended and Restated Employment Agreement, made effective as of June 26, 2012, between the Company and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K filed July 2, 2012)†
10.4		Amendment No. 1 to the Amended and Restated Employment Agreement, dated as of April 1, 2015, between Ralph Lauren Corporation and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K dated April 6, 2015)†
10.5		Amendment No. 2 to the Amended and Restated Employment Agreement, dated as of September 25, 2015, between Ralph Lauren Corporation and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K dated September 25, 2015)†
10.6		Employment Agreement, dated as of September 25, 2015, between Ralph Lauren Corporation and Stefan Larsson (filed as Exhibit 10.2 to the Form 8-K dated September 25, 2015)†
10.7		Employment Agreement, effective as of April 7, 2014, between Ralph Lauren Corporation and Valérie Hermann (filed as Exhibit 10.13 to the Company's Annual Report on Form 10-K for the fiscal year ended March 28, 2015 (the "Fiscal 2015 10-K"))†
10.8		Amendment No. 1 to the Employment Agreement, effective as of June 24, 2014, between Ralph Lauren Corporation and Valérie Hermann (filed as Exhibit 10.14 to the Fiscal 2015 10-K)†
10.9		Amendment No. 2 to the Employment Agreement, effective as of March 29, 2015, between Ralph Lauren Corporation and Valérie Hermann (filed as Exhibit 10.15 to the Fiscal 2015 10-K)†
10.10		Amended and Restated Employment Agreement, effective as of April 4, 2016, between Ralph Lauren Corporation and Valérie Hermann (filed as Exhibit 10.1 to the Form 8-K dated May 4, 2016)†
10.11		Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Robert L. Madore (filed as Exhibit 10.4 to the Form 8-K dated April 6, 2015)†
10.12		Amended and Restated Employment Agreement, effective as of November 1, 2013, between the Company and Jackwyn Nemerov (filed as Exhibit 10.2 to the Form 8-K dated September 18, 2013)†
10.13		Amendment No. 1 to the Amended and Restated Employment Agreement, effective as of March 30, 2014, between the Company and Jackwyn Nemerov (filed as Exhibit 10.6 to the Company's Annual Report on Form 10-K for the fiscal year ended March 29, 2014 (the "Fiscal 2014 10-K"))†
10.14		Amendment No. 2 to the Amended and Restated Employment Agreement, effective as of March 29, 2015, between Ralph Lauren Corporation and Jackwyn Nemerov (filed as Exhibit 10.9 to the Fiscal 2015 10-K)†
10.15		Employment Separation Agreement and Release, between Ralph Lauren Corporation and Jackwyn Nemerov (filed as Exhibit 10.1 to the Form 8-K dated October 21, 2015)†

	65

Exhibit Number		Description
10.16		Amended and Restated Employment Agreement, effective as of November 1, 2013, between the Company and Christopher H. Peterson (filed as Exhibit 10.3 to the Form 8-K dated September 18, 2013)†
10.17		Amendment No. 1 to the Amended and Restated Employment Agreement, effective as of March 30, 2014, between the Company and Christopher Peterson (filed as Exhibit 10.8 to the Fiscal 2014 10-K)†
10.18		Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Christopher H. Peterson (filed as Exhibit 10.2 to the Form 8-K dated April 6, 2015)†
10.19		Employment Separation Agreement and Release, between Ralph Lauren Corporation and Christopher Peterson (filed as Exhibit 10.1 to the Form 8-K dated February 25, 2016)†
10.20		Amended and Restated Employment Agreement, effective as of March 1, 2014, between the Company and Mitchell A. Kosh (filed as Exhibit 10.1 to the Form 8-K dated February 11, 2014)†
10.21		Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Mitchell A. Kosh (filed as Exhibit 10.3 to the Form 8-K dated April 6, 2015)†
10.22		Employment Separation Agreement and Release, between Ralph Lauren Corporation and Mitchell A. Kosh (filed as Exhibit 10.1 to the Form 8-K dated October 1, 2015)†
10.23		Non-Qualified Stock Option Agreement, dated as of June 8, 2004, between the Company and Ralph Lauren (filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended April 2, 2005 (the "Fiscal 2005 10-K"))†
10.24		Restricted Stock Unit Award Agreement, dated as of June 8, 2004, between the Company and Ralph Lauren (filed as Exhibit 10.15 to the Fiscal 2005 10-K)†
10.25		Executive Officer Annual Incentive Plan, as amended as of August 9, 2012 (filed as Appendix B to the Company's Definitive Proxy Statement dated July 2, 2012)†
10.26		1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 99.1 to the Form 8-K dated August 12, 2004)†
10.27		Amendment, as of June 30, 2006, to the 1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 10.4 to the Form 10-Q for the quarterly period ended July 1, 2006)†
10.28		Amendment No. 2, dated as of May 21, 2009, to the 1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K for the fiscal year ended March 28, 2009)†
10.29		Amended and Restated 2010 Long-Term Incentive Plan, amended as of August 8, 2013 (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended June 29, 2013)†
10.30		Cliff Restricted Performance Share Unit Award Overview containing the standard terms of cliff restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.25 to the Fiscal 2014 10-K)†
10.31		Pro-Rata Restricted Performance Share Unit Award Overview containing the standard terms of restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.26 to the Fiscal 2014 10-K)†
10.32		Stock Option Award Overview containing the standard terms of stock option awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.27 to the Fiscal 2014 10-K)†
10.33		Cliff Restricted Performance Share Unit with TSR Modifier Award Overview containing the standard terms of cliff restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.28 to the Fiscal 2014 10-K)†
10.34		Form of Performance Share Unit Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.38 to the Fiscal 2015 10-K)†
10.35		Form of Performance-Based Restricted Stock Unit Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.39 to the Fiscal 2015 10-K)†
10.36		Form of Restricted Stock Unit Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.1 to the Form 10-Q dated August 6, 2015)†
10.37*		Form of Non-Employee Director Restricted Stock Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan†
10.38		Amended and Restated Credit Agreement, dated as of February 11, 2015, among Ralph Lauren Corporation, Acqui Polo C.V., Polo Fin B.V. and Ralph Lauren Asia Pacific Limited, as the borrowers, the lenders party thereto, Bank of America, N.A., as syndication agent, Wells Fargo Bank, N.A., HSBC Bank USA, N.A. and Deutsche Bank Securities Inc., as co-documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent (the "2015 Credit Agreement") (filed as Exhibit 10.1 to the Form 8-K dated February 18, 2015)

	66

Exhibit Number		Description
10.39*		First Amendment to the 2015 Credit Agreement, dated as of March 22, 2016, among Ralph Lauren Corporation, Acqui Polo C.V., RL Finance B.V. (formerly known as Polo Fin B.V.) and Ralph Lauren Asia Pacific Limited, as the borrowers, the lenders parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents parties thereto
10.40		Amended and Restated Polo Ralph Lauren Supplemental Executive Retirement Plan (filed as Exhibit 10.1 to the Company's Form 10-Q for the quarterly period ended December 31, 2005)†
12.1*		Computation of Ratio of Earnings to Fixed Charges
14.1		Code of Ethics for Principal Executive Officers and Senior Financial Officers (filed as Exhibit 14.1 to the Company's Annual Report on Form 10-K for the fiscal year ended March 29, 2003)
14.2		Code of Business Conduct and Ethics of the Company, as amended and restated on August 6, 2015 (filed as Exhibit 14.1 to the Form 10-Q dated August 6, 2015)
21.1*		List of Significant Subsidiaries of the Company
23.1*		Consent of Ernst & Young LLP
31.1*		Certification of Stefan Larsson required by 17 CFR 240.13a-14(a)
31.2*		Certification of Robert L. Madore required by 17 CFR 240.13a-14(a)
32.1*		Certification of Stefan Larsson Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Robert L. Madore Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at April 2, 2016 and March 28, 2015, (ii) the Consolidated Statements of Income for the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014, (iii) the Consolidated Statements of Comprehensive Income for the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014, (iv) the Consolidated Statements of Cash Flows for the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014, (v) the Consolidated Statements of Equity for the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014, and (vi) the Notes to the Consolidated Financial Statements.

Exhibits 32.1 and 32.2 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.

*	Filed herewith.
†	Management contract or compensatory plan or arrangement.

	67

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		RALPH LAUREN CORPORATION
	By:	/S/ ROBERT L. MADORE
		Robert L. Madore
		Corporate Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)
Date: May 19, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature		Title		Date
/S/ RALPH LAUREN		Executive Chairman, Chief Creative Officer, and Director		May 19, 2016
Ralph Lauren
/S/ STEFAN LARSSON		President, Chief Executive Officer, and Director (Principal Executive Officer)		May 19, 2016
Stefan Larsson
/S/ ROBERT L. MADORE		Corporate Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)		May 19, 2016
Robert L. Madore
/s/ DAVID LAUREN		Executive Vice President of Global Advertising, Marketing, and Communications, and Director		May 19, 2016
David Lauren
/S/ JOHN R. ALCHIN		Director		May 19, 2016
John R. Alchin
/S/ ARNOLD H. ARONSON		Director		May 19, 2016
Arnold H. Aronson
/S/ FRANK A. BENNACK, JR.		Director		May 19, 2016
Frank A. Bennack, Jr.
/S/ DR. JOYCE F. BROWN		Director		May 19, 2016
Dr. Joyce F. Brown
/S/ JOEL L. FLEISHMAN		Director		May 19, 2016
Joel L. Fleishman
/S/ HUBERT JOLY		Director		May 19, 2016
Hubert Joly

	68

Signature		Title		Date
/S/ JUDITH MCHALE		Director		May 19, 2016
Judith McHale
/S/ ROBERT C. WRIGHT		Director		May 19, 2016
Robert C. Wright

	69

RALPH LAUREN CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

		Page
Consolidated Financial Statements:
Consolidated Balance Sheets		F-2
Consolidated Statements of Income		F-3
Consolidated Statements of Comprehensive Income		F-4
Consolidated Statements of Cash Flows		F-5
Consolidated Statements of Equity		F-6
Notes to Consolidated Financial Statements		F-7
Management's Report on Responsibility For Financial Statements		F-52
Reports of Independent Registered Public Accounting Firm		F-53
Supplementary Information:
Selected Financial Information		F-55
Quarterly Financial Information		F-57
EX-10.37
EX-10.39
EX-12.1
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101	INSTANCE DOCUMENT
EX-101	SCHEMA DOCUMENT
EX-101	CALCULATION LINKBASE DOCUMENT
EX-101	LABELS LINKBASE DOCUMENT
EX-101	PRESENTATION LINKBASE DOCUMENT
EX-101	DEFINITION LINKBASE DOCUMENT

	F-1

RALPH LAUREN CORPORATION

CONSOLIDATED BALANCE SHEETS

		April 2, 2016				March 28, 2015
		(millions)
ASSETS
Current assets:
Cash and cash equivalents		$	456			$	500
Short-term investments		629				644
Accounts receivable, net of allowances of $254 million and $251 million		517				655
Inventories		1,125				1,042
Income tax receivable		58				57
Deferred tax assets		—				145
Prepaid expenses and other current assets		268				281
Total current assets		3,053				3,324
Property and equipment, net		1,583				1,436
Deferred tax assets		119				45
Goodwill		918				903
Intangible assets, net		244				267
Other non-current assets		296				131
Total assets		$	6,213			$	6,106
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt		$	116			$	234
Accounts payable		151				210
Income tax payable		33				27
Accrued expenses and other current liabilities		898				715
Total current liabilities		1,198				1,186
Long-term debt		597				298
Non-current liability for unrecognized tax benefits		81				116
Other non-current liabilities		593				615
Commitments and contingencies (Note 16)
Total liabilities		2,469				2,215
Equity:
Class A common stock, par value $.01 per share; 101.0 million and 100.0 million shares issued; 57.0 million and 60.4 million shares outstanding		1				1
Class B common stock, par value $.01 per share; 25.9 million shares issued and outstanding		—				—
Additional paid-in-capital		2,258				2,117
Retained earnings		6,015				5,787
Treasury stock, Class A, at cost; 44.0 million and 39.6 million shares		(4,349		)		(3,849		)
Accumulated other comprehensive loss		(181		)		(165		)
Total equity		3,744				3,891
Total liabilities and equity		$	6,213			$	6,106

See accompanying notes.

	F-2

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions, except per share data)
Net sales		$	7,230			$	7,451			$	7,284
Licensing revenue		175				169				166
Net revenues		7,405				7,620				7,450
Cost of goods sold(a)		(3,218		)		(3,242		)		(3,140		)
Gross profit		4,187				4,378				4,310
Selling, general, and administrative expenses(a)		(3,389		)		(3,301		)		(3,142		)
Amortization of intangible assets		(24		)		(25		)		(35		)
Gain on acquisition of Chaps		—				—				16
Impairment of assets		(49		)		(7		)		(1		)
Restructuring and other charges		(143		)		(10		)		(18		)
Total other operating expenses, net		(3,605		)		(3,343		)		(3,180		)
Operating income		582				1,035				1,130
Foreign currency losses		(4		)		(26		)		(8		)
Interest expense		(21		)		(17		)		(20		)
Interest and other income, net		6				6				3
Equity in losses of equity-method investees		(11		)		(11		)		(9		)
Income before provision for income taxes		552				987				1,096
Provision for income taxes		(156		)		(285		)		(320		)
Net income		$	396			$	702			$	776
Net income per common share:
Basic		$	4.65			$	7.96			$	8.55
Diluted		$	4.62			$	7.88			$	8.43
Weighted average common shares outstanding:
Basic		85.2				88.2				90.7
Diluted		85.9				89.1				92.0
Dividends declared per share		$	2.00			$	1.85			$	1.70
(a) Includes total depreciation expense of:		$	(286	)		$	(269	)		$	(223	)

See accompanying notes.

	F-3

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Net income		$	396			$	702			$	776
Other comprehensive income (loss), net of tax:
Foreign currency translation gains (losses)		36				(318		)		52
Net gains (losses) on cash flow hedges		(55		)		47				(27		)
Net losses on available-for-sale investments		—				—				(5		)
Net gains (losses) on defined benefit plans		3				(8		)		—
Other comprehensive income (loss), net of tax		(16		)		(279		)		20
Total comprehensive income		$	380			$	423			$	796

See accompanying notes.

	F-4

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Cash flows from operating activities:
Net income		$	396			$	702			$	776
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		310				294				258
Deferred income tax expense (benefit)		(8		)		11				1
Equity in losses of equity-method investees		11				11				9
Non-cash stock-based compensation expense		97				81				93
Gain on acquisition of Chaps		—				—				(16		)
Non-cash impairment of assets		49				7				1
Excess tax benefits from stock-based compensation arrangements		(10		)		(8		)		(34		)
Other non-cash charges (benefits), net		40				(25		)		6
Changes in operating assets and liabilities:
Accounts receivable		129				(96		)		(104		)
Inventories		(91		)		(97		)		(77		)
Prepaid expenses and other current assets		30				(96		)		(56		)
Accounts payable and accrued liabilities		90				50				43
Income tax receivables and payables		(15		)		(22		)		59
Deferred income		(8		)		(21		)		(18		)
Other balance sheet changes, net		(13		)		103				(34		)
Net cash provided by operating activities		1,007				894				907
Cash flows from investing activities:
Capital expenditures		(418		)		(391		)		(390		)
Purchases of investments		(1,085		)		(1,398		)		(1,067		)
Proceeds from sales and maturities of investments		942				1,113				1,011
Acquisitions and ventures		(16		)		(12		)		(40		)
Change in restricted cash deposits		(6		)		(1		)		(2		)
Net cash used in investing activities		(583		)		(689		)		(488		)
Cash flows from financing activities:
Proceeds from issuance of short-term debt		4,344				2,808				—
Repayments of short-term debt		(4,463		)		(2,574		)		—
Proceeds from issuance of long-term debt		299				—				300
Repayments of current maturities of long-term debt		—				—				(269		)
Payments of capital lease obligations		(25		)		(24		)		(9		)
Payments of dividends		(170		)		(158		)		(149		)
Repurchases of common stock, including shares surrendered for tax withholdings		(500		)		(532		)		(558		)
Proceeds from exercise of stock options		34				52				52
Excess tax benefits from stock-based compensation arrangements		10				8				34
Other financing activities		(2		)		(1		)		—
Net cash used in financing activities		(473		)		(421		)		(599		)
Effect of exchange rate changes on cash and cash equivalents		5				(81		)		3
Net decrease in cash and cash equivalents		(44		)		(297		)		(177		)
Cash and cash equivalents at beginning of period		500				797				974
Cash and cash equivalents at end of period		$	456			$	500			$	797

See accompanying notes.

	F-5

RALPH LAUREN CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
									Additional								Treasury Stock
		Common Stock(a)							Paid-in				Retained				at Cost											Total
		Shares			Amount				Capital				Earnings				Shares			Amount				AOCI(b)				Equity
		(millions)
Balance at March 30, 2013		123.5			$	1			$	1,752			$	4,647			32.6			$	(2,709	)		$	94			$	3,785
Comprehensive income:
Net income													776
Other comprehensive income																								20
Total comprehensive income																												796
Dividends declared													(153		)													(153		)
Repurchases of common stock									50			(c)					3.6			(608		)						(558		)
Stock-based compensation									93																			93
Shares issued and tax benefits recognized
pursuant to stock-based compensation plans(d)		1.4			—				86																			86
Conversion of stock-based compensation awards(e)									(2		)		(13		)													(15		)
Balance at March 29, 2014		124.9			$	1			$	1,979			$	5,257			36.2			$	(3,317	)		$	114			$	4,034
Comprehensive income:
Net income													702
Other comprehensive loss																								(279		)
Total comprehensive income																												423
Dividends declared													(161		)													(161		)
Repurchases of common stock																	3.4			(532		)						(532		)
Stock-based compensation									81																			81
Shares issued and tax benefits recognized
pursuant to stock-based compensation plans(d)		1.0			—				60																			60
Conversion of stock-based compensation awards(e)									(3		)		(11		)													(14		)
Balance at March 28, 2015		125.9			$	1			$	2,117			$	5,787			39.6			$	(3,849	)		$	(165	)		$	3,891
Comprehensive income:
Net income													396
Other comprehensive loss																								(16		)
Total comprehensive income																												380
Dividends declared													(168		)													(168		)
Repurchases of common stock																	4.4			(500		)						(500		)
Stock-based compensation									97																			97
Shares issued and tax benefits recognized
pursuant to stock-based compensation plans(d)		1.0			—				44																			44
Balance at April 2, 2016		126.9			$	1			$	2,258			$	6,015			44.0			$	(4,349	)		$	(181	)		$	3,744

(a)	Includes Class A and Class B common stock. In Fiscal 2015 and Fiscal 2014, 1.0 million and 3.0 million shares, respectively, of Class B common stock were converted into an equal number of shares of Class A common stock pursuant to the terms of the Class B common stock (see Note 17).

(b)	Accumulated other comprehensive income (loss).

(c)	Relates to a $50 million payment made in March 2013 under a prepaid share repurchase program, which resulted in the delivery of the related shares at the conclusion of the repurchase term in Fiscal 2014 (see Note 17).

(d)	Includes excess tax benefits relating to stock-based compensation plans of approximately $10 million, $8 million, and $34 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively.

(e)	Includes the conversion of certain fully-vested and expensed stock-based compensation awards to cash contributions into a deferred compensation account (see Note 17).

See accompanying notes.

	F-6

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	Description of Business

Ralph Lauren Corporation ("RLC") is a global leader in the design, marketing, and distribution of premium lifestyle products, including apparel, accessories, home furnishings, and other licensed product categories. RLC's long-standing reputation and distinctive image have been consistently developed across an expanding number of products, brands, sales channels, and international markets. RLC's brand names include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph Lauren Children, Denim & Supply Ralph Lauren, Chaps, Club Monaco, and American Living, among others. RLC 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 stores and specialty stores around the world. The Company also sells directly to consumers through its integrated retail channel, which includes its retail stores, concession-based shop-within-shops, and e-commerce operations around the world. In addition, the Company licenses to unrelated third parties for specified periods the right to operate retail stores and/or to use its various trademarks in connection with the manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings.

2.	Basis of Presentation

Basis of Consolidation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") and present the consolidated financial position, income, comprehensive income, and cash flows of the Company, including all entities in which the Company has a controlling financial interest and is determined to be the primary beneficiary. 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 2016 ended on April 2, 2016 and was a 53-week period ("Fiscal 2016"). Fiscal year 2015 ended on March 28, 2015 and was a 52-week period ("Fiscal 2015"). Fiscal year 2014 ended on March 29, 2014 and was also a 52-week period ("Fiscal 2014").

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain 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, operational chargebacks, and certain cooperative advertising allowances; the realizability of inventory; reserves for litigation and other contingencies; useful lives and impairments of long-lived tangible and intangible assets; fair value measurements; accounting for income taxes and related uncertain tax positions; valuation of stock-based compensation awards and related estimated forfeiture rates; reserves for restructuring activity; and accounting for business combinations, among others.

Reclassifications

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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, the price has been fixed or is determinable, and collectability 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 markdowns, 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, actual and forecasted 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 customer notifications of order fulfillment discrepancies and historical trends. The Company reviews and refines these estimates on at least a quarterly basis. The Company's historical estimates of these costs have not differed materially from actual results.

Retail store and concession-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 e-commerce sites is recognized upon delivery of the shipment to 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 redemption 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 (i) contractually guaranteed minimum royalty levels or (ii) actual sales and royalty data, or estimates thereof, received from the Company's licensees.

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

Cost of Goods Sold and Selling Expenses

Cost of goods sold includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight-in, and import costs, as well as changes in reserves for shrinkage and inventory realizability. Gains and losses associated with forward foreign currency exchange contracts that are designated as cash flow hedges of inventory transactions are also recognized within cost of goods sold when the hedged inventory is sold. The costs of selling merchandise, including those associated with preparing merchandise for sale, such as picking, packing, warehousing, and order charges ("handling costs"), are included in selling, general, and administrative ("SG&A") expenses in the consolidated statements of income.

Shipping and Handling Costs

The costs associated with shipping goods to customers are reflected as a component of SG&A expenses in the consolidated statements of income. Shipping costs were approximately $45 million, $43 million, and $37 million in Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Handling costs (described above), also included within SG&A expenses, were approximately $181 million in each of Fiscal 2016 and Fiscal 2015, and approximately $179 million in Fiscal 2014. Shipping and handling costs billed to customers are included in revenue.

Advertising and Marketing Costs

Advertising costs, including the costs to produce advertising, are expensed when the advertisement is first exhibited. Out-of-store advertising costs paid to wholesale customers under cooperative advertising programs are expensed as an advertising cost within SG&A expenses if both the identified advertising benefit is sufficiently separable from the purchase of the Company's products by customers and the fair value of such benefit is measurable. Otherwise, such costs are reflected as a reduction of revenue. Costs of in-store advertising paid to wholesale customers under cooperative advertising programs are not included in advertising costs, but rather are reflected as a reduction of revenue since the benefits are not sufficiently separable from the purchases of the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Company's products by customers. Costs associated with the marketing and promotion of the Company's products are included within SG&A expenses.

Advertising and marketing expenses amounted to approximately $280 million, $275 million, and $256 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. Deferred advertising, marketing, and promotional costs, which principally relate to advertisements that have not yet been exhibited or services that have not yet been received, were approximately $7 million at the end of both Fiscal 2016 and Fiscal 2015, and were recorded within prepaid expenses and other current assets in the Company's consolidated balance sheets.

Foreign Currency Translation and Transactions

The financial position and operating results of the Company's foreign operations are primarily consolidated using their respective local currency as the functional currency. Local currency assets and liabilities are translated to U.S. Dollars at the rates of exchange in effect on the balance sheet date, and local currency revenues and expenses are translated to U.S. Dollars at average rates of exchange in effect during the period. The resulting translation gains or losses are included in the consolidated statements of comprehensive income as a component of other comprehensive income (loss) ("OCI") and in the consolidated statements of equity within accumulated other comprehensive income (loss) ("AOCI"). Gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature are also included within this component of equity.

The Company also recognizes gains and losses on both third-party and intercompany transactions that are denominated in a currency other than the respective entity's functional currency. Foreign currency transaction gains and losses are recognized in earnings and separately disclosed in the consolidated statements of income.

Comprehensive Income (Loss)

Comprehensive income (loss), which is reported in the consolidated statements of comprehensive income and consolidated statements of equity, consists of net income and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net income. The components of OCI for the Company consist of foreign currency translation gains (losses); net realized and unrealized gains (losses) on cash flow hedges, such as forward foreign currency exchange contracts; net realized and unrealized gains (losses) on available-for-sale investments; and net realized and unrealized gains (losses) related to the Company's defined benefit plans.

Net Income per Common Share

Basic net income per common share is computed by dividing net income attributable to common shares 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 dilutive effects of outstanding stock options, restricted stock, restricted stock units ("RSUs"), and any other potentially dilutive instruments, only in the periods in which such effects are 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 shares used to calculate diluted net income per common share as follows:

		Fiscal Years Ended
		April 2, 2016			March 28, 2015			March 29, 2014
Basic shares		85.2			88.2			90.7
Dilutive effect of stock options, restricted stock, and RSUs		0.7			0.9			1.3
Diluted shares		85.9			89.1			92.0

All earnings per share amounts have been calculated using unrounded numbers. Options to purchase shares of the Company's Class A 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 RSUs that are issuable only upon the achievement of certain service and/or performance goals. Performance-based RSUs are included in the computation of diluted shares only to the extent that the underlying performance conditions (and any

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

applicable market condition modifiers) (i) have been satisfied as of the end of the reporting period or (ii) would be considered 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 the end of Fiscal 2016, Fiscal 2015, and Fiscal 2014, there were approximately 2.6 million, 1.9 million, and 1.2 million, respectively, additional shares issuable upon exercise of anti-dilutive options and contingent vesting of performance-based RSUs, which were excluded from the diluted share calculations.

Stock-Based Compensation

The Company recognizes expense for all stock-based compensation awards granted to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures. The Company uses the Black-Scholes valuation model to estimate the grant date fair value of its stock option awards. For performance-based RSU awards that include a market condition in the form of a total shareholder return ("TSR") modifier, the Company uses a Monte Carlo simulation valuation model to estimate the grant date fair value. The fair values of restricted stock awards, service-based RSUs, and performance-based RSUs that are not subject to a TSR modifier are determined based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for those awards that are not entitled to dividend equivalents. Compensation expense for all performance-based RSUs is recognized over the requisite service period when attainment of the performance goal is deemed probable, net of estimated forfeitures. The Company recognizes compensation expense on an accelerated basis for all awards with graded vesting terms, including stock options, restricted stock, and certain RSUs. For RSU awards with cliff vesting terms, compensation expense is recognized on a straight-line basis. For certain RSU awards granted to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, the related stock-based compensation expense is recognized on an accelerated basis over a term commensurate with the period that the employee is required to provide service in order to vest in the award. See Note 19 for further discussion of the Company's stock-based compensation plans.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with original maturities of 90 days or less, including investments in debt securities and money market funds. Investments in debt securities are diversified among high-credit quality securities in accordance with the Company's risk-management policies.

Restricted Cash

The Company is periodically required to place cash in escrow with various banks as collateral, primarily to secure guarantees of corresponding amounts made by the banks to international tax authorities on behalf of the Company, such as to secure refunds of value-added tax payments in certain international tax jurisdictions or in the case of certain international tax audits. Such cash is classified as restricted cash and reported as a component of either prepaid expenses and other current assets or other non-current assets in the Company's consolidated balance sheets. The cash inflows and outflows related to restricted cash are classified as investing activities in the Company's consolidated statements of cash flows.

Investments

The Company's investment objectives include capital preservation, maintaining adequate liquidity, diversification to minimize liquidity and credit risk, and achievement of maximum returns within the guidelines set forth in the Company's investment policy.

Short-term investments consist of investments which the Company expects to convert into cash within one year, including time deposits, which have original maturities greater than 90 days. Non-current investments, which are classified within other non-current assets in the consolidated balance sheets, consist of those investments which the Company does not expect to convert into cash within one year.

The Company classifies all of its investments at the time of purchase as available-for-sale. These 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 income. 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.

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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Equity-method Investments

Investments in companies in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. Significant influence is generally presumed to exist when the Company owns between 20% and 50% of the investee.

Under the equity method of accounting, the following amounts are recorded in the Company's consolidated financial statements: the Company's investment in and amounts due to and from the investee are included in the consolidated balance sheets; the Company's share of the investee's earnings (losses) is included in the consolidated statements of income; and dividends, cash distributions, loans, or other cash received from the investee and additional cash investments, loan repayments, or other cash paid to the investee are included in the consolidated statements of cash flows.

The Company's equity-method investments include its 50% interest in the Ralph Lauren Watch and Jewelry Company, Sárl (the "RL Watch Company"), a joint venture formed with Compagnie Financière Richemont SA ("Richemont"), the Swiss luxury goods group, in March 2007. This joint venture is a Swiss corporation whose purpose is to design, develop, manufacture, sell, and distribute luxury watches and fine jewelry through Ralph Lauren stores, as well as through fine independent jewelry and luxury watch retailers around the world. Royalty payments due to the Company under the related license agreement for use of certain of its trademarks are reflected as licensing revenue within the consolidated statements of income.

Impairment Assessment

The Company evaluates investments held in unrealized loss positions, if any, for other-than-temporary impairment on a quarterly basis. Such evaluation involves a variety of considerations, including assessments of the risks and uncertainties associated with general economic conditions and distinct conditions affecting specific issuers. Factors considered by the Company include (i) the length of time and the extent to which the fair value has been below cost; (ii) the financial condition, credit worthiness, and near-term prospects of the issuer; (iii) the length of time to maturity; (iv) future economic conditions and market forecasts; (v) the Company's intent and ability to retain its investment for a period of time sufficient to allow for recovery of market value; and (vi) an assessment of whether it is more likely than not that the Company will be required to sell its investment before recovery of market value. See Note 15 for further information relating to the Company's investments.

Accounts Receivable

In the normal course of business, the Company extends credit to wholesale customers that satisfy defined credit criteria. Accounts receivable is recorded at carrying value, which approximates fair value, and is presented in the Company's consolidated balance sheets net of certain reserves and allowances. These reserves and allowances consist of (i) reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances (see the Revenue Recognition section above for further discussion of related accounting policies) and (ii) allowances for doubtful accounts.

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

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Beginning reserve balance		$	240			$	254			$	230
Amount charged against revenue to increase reserve		749				756				758
Amount credited against customer accounts to decrease reserve		(753		)		(749		)		(739		)
Foreign currency translation		4				(21		)		5
Ending reserve balance		$	240			$	240			$	254

An allowance for doubtful accounts is determined through analysis of periodic aging of accounts receivable, assessments of collectability based on an evaluation of historical and anticipated trends, the financial condition of the Company's customers, and an evaluation of the impact of economic conditions, among other factors.

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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Beginning reserve balance		$	11			$	16			$	15
Amount recorded to expense to increase reserve(a)		7				—				3
Amount written-off against customer accounts to decrease reserve		(4		)		(2		)		(3		)
Foreign currency translation		—				(3		)		1
Ending reserve balance		$	14			$	11			$	16

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

Concentration of Credit Risk

The Company sells its wholesale merchandise primarily to major department and specialty stores around the world, and extends credit based on an evaluation of each customer's financial capacity and condition, usually without requiring collateral. In the Company's 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 three key wholesale customers that generate significant sales volume. During Fiscal 2016, the Company's sales to its largest wholesale customer, Macy's, Inc. ("Macy's"), accounted for approximately 11% of total net revenues, and the Company's sales to its three largest wholesale customers (including Macy's) accounted for approximately 24% of total net revenues. As of April 2, 2016, these three key wholesale customers constituted approximately 36% of total gross accounts receivable.

Inventories

The Company holds inventory that is sold through wholesale distribution channels to major department stores and specialty retail stores. The Company also holds retail inventory that is sold in its own stores and e-commerce sites directly to consumers. Substantially all of the Company's inventories are comprised of finished goods, which are stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted-average cost basis.

The estimated realizable value of inventory is determined based on an analysis of historical sales trends of the Company's individual product lines, the impact of market trends and economic conditions, and a forecast of future demand, giving consideration to the value of current in-house orders for future sales of inventory, as well as plans to sell inventory through the Company's factory stores, among other liquidation channels. Actual results may differ from estimates due to the quantity, quality, and mix of products in inventory, consumer and retailer preferences, and market conditions. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. The Company's historical estimates of these costs and its related provisions have not differed materially from actual results.

Property and Equipment, Net

Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method based upon the estimated useful lives of depreciable assets, which range from three to seven years for furniture and fixtures, machinery and equipment, and capitalized software; and from ten to forty years for buildings and improvements. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the respective assets or the term of the related lease.

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 values may not be fully recoverable. In evaluating long-lived assets for recoverability, including finite-lived intangibles as described below, 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 estimated future undiscounted net cash flows attributable to the asset are less than its carrying value, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan for disposal are reported at the lower of carrying value or fair value, less costs to sell.

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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Goodwill and Other Intangible Assets

At acquisition, the Company estimates and records the fair value of purchased intangible assets, which typically consist of reacquired license agreements, customer relationships, non-compete agreements, and/or order backlog. The fair values of these intangible assets are estimated based on management's assessment, considering independent third-party appraisals when necessary. The excess of the purchase consideration over the fair value of net assets acquired, both tangible and intangible, is recorded as goodwill. Goodwill and certain other intangible assets deemed to have indefinite useful lives are not amortized. Rather, goodwill and such indefinite-lived intangible assets are assessed for impairment at least annually. The Company generally performs its annual goodwill and indefinite-lived intangible assets impairment analyses using a qualitative approach to determine whether it is more likely than not that the fair values of such assets are less than their respective carrying values. If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of the asset exceeds its carrying value, a quantitative test is performed. Under the quantitative test, if the carrying value of the asset exceeds its fair value, an impairment loss is recognized in the amount of the excess. The Company also periodically performs a quantitative test to assess its goodwill for impairment in lieu of using the qualitative approach in order to reassess the fair values of its reporting units.

Finite-lived intangible assets are amortized over their respective estimated useful lives and, along with other long-lived assets as noted above, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. See discussion of the Company's accounting policy for long-lived asset impairment as previously described under the caption "Property and Equipment, Net."

Income Taxes

Income taxes are provided using the asset and liability method. Under this method, income taxes (i.e., deferred tax assets and liabilities, current taxes payable/refunds receivable, and tax expense) are recorded based on amounts refundable or payable in the current year and include the results of any difference between U.S. GAAP and tax reporting. Deferred income taxes reflect the tax effect of certain net operating losses, capital losses, general business credit carryforwards, and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. The Company accounts for the financial effect of changes in tax laws or rates in the period of enactment.

In addition, valuation allowances are established when management determines that it is more likely than not that some portion or all of a deferred tax asset will not be realized. Tax valuation allowances are analyzed periodically and adjusted as events occur or circumstances change that warrant adjustments.

In determining the income tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions. If the Company considers that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, it recognizes the tax benefit. The Company measures the tax benefit by determining the largest amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. These assessments can be complex and the Company often obtains assistance from external advisors. To the extent that the Company's estimates change or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. If the initial assessment fails to result in the recognition of a tax benefit, the Company regularly monitors its position and subsequently recognizes the tax benefit if (i) there are changes in tax law or analogous case law that sufficiently raise the likelihood of prevailing on the technical merits of the position to more likely than not; (ii) the statute of limitations expires; or (iii) there is a completion of an audit resulting in a settlement of that tax year with the appropriate agency. Uncertain tax positions are classified as current only when the Company expects to pay cash within the next twelve months. Interest and penalties, if any, are recorded within the provision for income taxes in the Company's consolidated statements of income and are classified on the consolidated balance sheets together with the related liability for unrecognized tax benefits.

See Note 12 for further discussion of the Company's income taxes.

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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Leases

The Company leases certain facilities and equipment, including the vast majority of its retail stores. Certain of the Company's lease agreements contain renewal options, rent escalation clauses, and/or landlord incentives. Renewal terms generally reflect market rates at the time of renewal. Rent expense for noncancelable operating leases with scheduled rent increases and/or landlord incentives is recognized on a straight-line basis over the lease term, including any applicable rent holidays, beginning on the earlier of the lease commencement date or the date the Company takes control of the leased space. The excess of straight-line rent expense over the scheduled payment amounts and landlord incentives is recorded as a deferred rent obligation. As of the end of Fiscal 2016 and Fiscal 2015, deferred rent obligations of approximately $257 million and $251 million, respectively, were classified primarily within other non-current liabilities in the Company's consolidated balance sheets.

In certain lease arrangements, the Company is involved with the construction of the building or leasehold improvements (generally on property owned by the landlord). If the Company concludes that it has substantively all of the risks of ownership during construction of a leased property and therefore is deemed the owner of the project for accounting purposes, it records an asset and related financing obligation in the amount of the total project costs related to construction-in-progress and the fair value of the pre-existing building. Once construction is complete, the Company considers the requirements for sale-leaseback treatment, including the transfer back of all risks of ownership and whether the Company has any continuing involvement in the leased property. If the arrangement does not qualify for sale-leaseback treatment, the Company continues to amortize the financing obligation and depreciate the building over the lease term.

Derivative Financial Instruments

The Company records all derivative financial instruments on its consolidated balance sheets at fair value. For derivative instruments that qualify for hedge accounting, the effective portion of changes in their fair value is either (i) offset against the changes in fair value of the related hedged assets, liabilities, or firm commitments through earnings or (ii) recognized in equity as a component of AOCI until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge against changes in fair value or cash flows and net investments, respectively.

Each derivative instrument that qualifies for hedge accounting is expected to be highly effective at reducing the risk associated with the exposure being hedged. For each derivative instrument that is designated as a hedge, the Company formally documents the related risk management objective and strategy, including identification of the hedging instrument, the hedged item, and the risk exposure, as well as how hedge effectiveness will be assessed prospectively and retrospectively over the instrument's term. To assess hedge effectiveness, the Company generally uses regression analysis, a statistical method, to compare the change in the fair value of the derivative instrument to the change in fair value or cash flows of the related hedged item. The extent to which a hedging instrument has been and is expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed and documented by the Company on at least a quarterly basis.

As a result of its use of derivative instruments, the Company is exposed to the risk that counterparties to such contracts will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings and certain other factors, adhering to established limits for credit exposure. The Company's established policies and procedures for mitigating credit risk from derivative transactions include ongoing review and assessment of its counterparties' creditworthiness. The Company also enters into master netting arrangements with counterparties, when possible, to mitigate credit risk associated with its derivative instruments. In the event of default or termination (as such terms are defined within the respective master netting arrangement), these arrangements allow the Company to net-settle amounts payable and receivable related to multiple derivative transactions with the same counterparty. The master netting arrangements specify a number of events of default and termination, including, among others, the failure to make timely payments.

The fair values of the Company's derivative instruments are recorded on its consolidated balance sheets on a gross basis. For cash flow reporting purposes, proceeds received or amounts paid upon the settlement of a derivative instrument are classified in the same manner as the related item being hedged, primarily within cash flows from operating activities.

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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash Flow Hedges

The Company enters into forward foreign currency exchange contracts to reduce its risk related to exchange rate fluctuations on inventory transactions, intercompany royalty payments made by certain of its international operations, and other foreign currency-denominated operational cash flows. To the extent forward foreign currency exchange contracts are designated as cash flow hedges and are highly effective in offsetting changes in the value of the hedged items, the related gains or losses are initially deferred in equity as a component of AOCI and are subsequently recognized in the consolidated statements of income as follows:

•	Forecasted Inventory Transactions — recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold to a third party.

•	Intercompany Royalties — recognized within foreign currency gains (losses) generally in the period in which the related payments being hedged occur.

To the extent that a derivative instrument designated as a cash flow hedge is not considered effective, any change in its fair value relating to such ineffectiveness is immediately recognized in earnings within foreign currency gains (losses). If it is determined that a derivative instrument has not been highly effective, and will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued and further gains (losses) are immediately recognized in earnings within foreign currency gains (losses). Upon discontinuance of hedge accounting, the cumulative change in fair value of the derivative instrument previously recorded in AOCI is recognized in earnings when the related hedged item affects earnings, consistent with the originally-documented hedging strategy, unless the forecasted transaction is no longer probable of occurring, in which case the accumulated amount is immediately recognized in earnings within foreign currency gains (losses).

Hedge of a Net Investment in a Foreign Operation

Changes in the fair value of a derivative instrument or the carrying value of a non-derivative instrument 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. In assessing the effectiveness of a derivative financial instrument that is designated as a hedge of a net investment, the Company uses a method based on changes in spot rates to measure the impact of foreign currency exchange rate changes on both its foreign subsidiary net investment and the related hedging instrument. If the notional amount of the instrument designated as the hedge of a net investment is greater than the portion of the net investment being hedged, hedge ineffectiveness is recognized immediately in earnings within foreign currency gains (losses). To the extent the instrument remains effective, changes in its value are recorded in equity as foreign currency translation gains (losses), a component of AOCI, and are recognized in earnings within foreign currency gains (losses) only upon the sale or liquidation of the hedged net investment.

Fair Value Hedges

Changes in the fair value of a derivative instrument that is designated as a fair value hedge, along with offsetting changes in the fair value of the related hedged item attributable to the hedged risk, are recorded in earnings. Hedge ineffectiveness is recorded in earnings to the extent that the change in the fair value of the hedged item does not offset the change in the fair value of the hedging instrument.

Undesignated Hedges

All of the Company's undesignated hedges are entered into to hedge specific economic risks, particularly foreign currency exchange rate risk related to foreign currency-denominated balances. Changes in the fair value of undesignated derivative instruments are immediately recognized in earnings within foreign currency gains (losses).

See Note 15 for further discussion of the Company's derivative financial instruments.

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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4.	Recently Issued Accounting Standards

Improvements to Employee Share-Based Payment Accounting

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). ASU 2016-09 simplifies several aspects related to how share-based payments are accounted for and presented in the financial statements, including the accounting for forfeitures and tax-effects related to share-based payments at settlement, and the classification of excess tax benefits and shares surrendered for tax withholdings in the statement of cash flows. ASU 2016-09 is effective for the Company beginning in its fiscal year 2018, with early adoption permitted. The adoption methodology (i.e., prospective, retrospective, or modified-retrospective) varies by amendment. The Company is currently in the process of evaluating the impact that ASU 2016-09 will have on its consolidated financial statements and related disclosures.

Leases

In February 2016, the FASB issued ASU No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 requires that, among other changes to current practice, a lessee's rights and obligations under almost all leases, including existing and new arrangements, be recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. ASU 2016-02 is effective for the Company beginning in its fiscal year 2020, with early adoption permitted, and must be adopted using a modified retrospective approach which requires application of the guidance at the beginning of the earliest comparative period presented. The Company is currently in the process of evaluating the impact that ASU 2016-02 will have on its consolidated financial statements and related disclosures, but expects that it will result in a significant increase to its long-term assets and liabilities.

Balance Sheet Classification of Deferred Taxes

In November 2015, the FASB issued ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"). ASU 2015-17 requires entities to classify all deferred tax asset and liability balances, together with any related valuation allowance, as non-current on the consolidated balance sheet. ASU 2015-07 simplifies past guidance, which required entities to present deferred tax asset and liability balances as current and non-current on the consolidated balance sheet. The Company early-adopted ASU 2015-17 as of the end of its Fiscal 2016 and applied its provisions prospectively (see Note 12). As a result, the prior period was not retrospectively adjusted.

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 provides a single, comprehensive accounting model for revenues arising from contracts with customers that will supersede most existing revenue recognition guidance, including industry-specific guidance. Under this model, revenue is recognized at an amount that an entity expects to be entitled to upon transferring control of goods or services to a customer, as opposed to when risks and rewards transfer to a customer under existing revenue recognition guidance.

In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers — Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 by one year. Accordingly, ASU 2014-09 is effective for the Company beginning in its fiscal year 2019. The FASB also recently issued additional ASUs to amend and clarify certain topics within ASU 2014-09. ASU 2014-09 may be applied retrospectively to all prior periods presented or through a cumulative adjustment to the opening retained earnings balance in the year of adoption. The Company is currently in the process of evaluating the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures.

	F-16

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.	Acquisitions

Australia and New Zealand Licensed Operations Acquisition

On July 1, 2013, in connection with the transition of the Ralph Lauren-branded apparel and accessories business in Australia and New Zealand (the "Australia and New Zealand Business") from a licensed to a wholly-owned operation, the Company acquired certain net assets from Oroton Group/PRL Australia ("Oroton") in exchange for an aggregate payment of approximately $15 million (the "Australia and New Zealand Licensed Operations Acquisition"). Oroton was the Company's licensee for the Australia and New Zealand Business. The Company funded the Australia and New Zealand Licensed Operations Acquisition with available cash on-hand.

The Company accounted for the Australia and New Zealand Licensed Operations Acquisition as a business combination during the second quarter of Fiscal 2014, with the operating results of the Australia and New Zealand Business consolidated into the Company's operating results beginning on July 1, 2013. Transaction costs associated with the Australia and New Zealand Licensed Operations Acquisition were not material. The acquisition cost of $15 million was allocated to the assets acquired and liabilities assumed based on an assessment of their respective fair values, as follows (in millions):

Assets acquired and liabilities assumed:
Inventory		$	9
Fixed assets		4
Customer relationship intangible asset		3
Other assets		2
Other liabilities		(3		)
Fair value of net assets acquired		$	15

The customer relationship intangible asset was valued using the excess earnings method, which 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 customer relationship intangible asset is being amortized over an estimated useful life of nine years.

	F-17

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Chaps Menswear License Acquisition

On April 10, 2013, in connection with the transition of the North American Chaps-branded men's sportswear business ("Chaps Menswear Business") from a licensed to a wholly-owned operation, the Company entered into an agreement with The Warnaco Group, Inc. ("Warnaco"), a subsidiary of PVH Corp. ("PVH"), to acquire certain net assets in exchange for an aggregate payment of approximately $18 million (the "Chaps Menswear License Acquisition"). Warnaco was the Company's licensee for the Chaps Menswear Business. The Company funded the Chaps Menswear License Acquisition during the first quarter of Fiscal 2014 with available cash on-hand.

The Company accounted for the Chaps Menswear License Acquisition as a business combination during the first quarter of Fiscal 2014. The acquisition cost was allocated to the assets acquired and liabilities assumed based on an assessment of their respective fair values, as follows (in millions):

Assets acquired:
Inventory		$	30
Accounts receivable		19
Licensed trademark intangible asset		9
Total assets acquired		58
Liabilities assumed:
Accounts payable		(22		)
Other net liabilities		(2		)
Total net liabilities assumed		(24		)
Fair value of net assets acquired		34
Consideration paid		18
Gain on acquisition(a)		$	16

(a)	Represents the difference between the acquisition date fair value of net assets acquired and the contractually-defined purchase price under the Company's license agreement with Warnaco, which granted the Company the right to early-terminate the license upon PVH's acquisition of Warnaco in February 2013.

The licensed trademark intangible asset was valued using the excess earnings method, discounting the estimated after-tax cash flows associated with the Chaps-branded men's sportswear licensed trademark as of the acquisition date, factoring in market participant-based operating and cash flow assumptions. The reacquired licensed trademark intangible asset was amortized over a nine-month period through December 31, 2013, representing the remaining term of the prior license agreement that was terminated in connection with this acquisition.

The operating results of the Chaps Menswear Business have been consolidated into the Company's operating results beginning on April 10, 2013. Transaction costs of $3 million were expensed as incurred and classified within SG&A expenses in the consolidated statement of income during Fiscal 2014.

	F-18

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.	Property and Equipment

Property and equipment, net consists of the following:

		April 2, 2016				March 28, 2015
		(millions)
Land and improvements		$	17			$	17
Buildings and improvements		460				409
Furniture and fixtures		727				686
Machinery and equipment		359				317
Capitalized software		460				402
Leasehold improvements		1,248				1,185
Construction in progress		216				99
		3,487				3,115
Less: accumulated depreciation		(1,904		)		(1,679		)
Property and equipment, net		$	1,583			$	1,436

7.	Goodwill and Other Intangible Assets

Goodwill

The following table details the changes in goodwill for each of the Company's reportable segments during Fiscal 2016 and Fiscal 2015:

		Wholesale				Retail				Licensing				Total
		(millions)
Balance at March 29, 2014		$	617			$	210			$	137			$	964
Foreign currency translation		(46		)		(10		)		(5		)		(61		)
Balance at March 28, 2015		571				200				132				903
Foreign currency translation		11				3				1				15
Balance at April 2, 2016		$	582			$	203			$	133			$	918

Based on the results of the Company's annual goodwill impairment testing in Fiscal 2016, Fiscal 2015, and Fiscal 2014, no impairment charges were recorded.

	F-19

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other Intangible Assets

Other intangible assets consist of the following:

		April 2, 2016												March 28, 2015
		Gross Carrying Amount				Accum. Amort.				Net				Gross Carrying Amount				Accum. Amort.				Net
		(millions)
Intangible assets subject to amortization:
Re-acquired licensed trademarks		$	231			$	(122	)		$	109			$	230			$	(112	)		$	118
Customer relationships		252				(138		)		114				247				(120		)		127
Other		28				(14		)		14				28				(13		)		15
Total intangible assets subject to amortization		511				(274		)		237				505				(245		)		260
Intangible assets not subject to amortization:
Trademarks and brands		7				N/A				7				7				N/A				7
Total intangible assets		$	518			$	(274	)		$	244			$	512			$	(245	)		$	267

Amortization

Based on the balance of the Company's intangible assets subject to amortization as of April 2, 2016, the expected amortization expense for each of the next five fiscal years and thereafter is as follows:

		Amortization Expense
		(millions)
Fiscal 2017		$	24
Fiscal 2018		24
Fiscal 2019		24
Fiscal 2020		23
Fiscal 2021		21
Fiscal 2022 and thereafter		121
Total		$	237

The expected future amortization expense above reflects weighted-average estimated useful lives of 13.5 years for re-acquired licensed trademarks, 9.4 years for customer relationships, and 11.5 years for the Company's finite-lived intangible assets in total.

	F-20

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8.	Other Current and Non-Current Assets

Prepaid expenses and other current assets consist of the following:

		April 2, 2016				March 28, 2015
		(millions)
Other taxes receivable		$	112			$	93
Prepaid rent expense		37				31
Restricted cash		17				2
Derivative financial instruments		16				65
Tenant allowances receivable		13				14
Prepaid samples		9				12
Prepaid advertising and marketing		7				7
Other prepaid expenses and current assets		57				57
Total prepaid expenses and other current assets		$	268			$	281

Other non-current assets consist of the following:

		April 2, 2016				March 28, 2015
		(millions)
Non-current investments		$	187			$	8
Security deposits		32				28
Restricted cash		29				36
Derivative financial instruments		6				22
Other non-current assets		42				37
Total other non-current assets		$	296			$	131

9.	Other Current and Non-Current Liabilities

Accrued expenses and other current liabilities consist of the following:

		April 2, 2016				March 28, 2015
		(millions)
Accrued operating expenses		$	186			$	183
Accrued inventory		176				75
Accrued payroll and benefits		149				162
Other taxes payable		139				108
Accrued capital expenditures		65				62
Deferred income		50				38
Dividends payable		41				43
Restructuring reserve		40				5
Derivative financial instruments		26				18
Capital lease obligations		21				19
Other accrued expenses and current liabilities		5				2
Total accrued expenses and other current liabilities		$	898			$	715

	F-21

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other non-current liabilities consist of the following:

		April 2, 2016				March 28, 2015
		(millions)
Capital lease obligations		$	266			$	238
Deferred rent obligations		222				219
Derivative financial instruments		33				1
Deferred tax liabilities		17				87
Deferred compensation		8				9
Deferred income		1				20
Other non-current liabilities		46				41
Total other non-current liabilities		$	593			$	615

10.	Impairments of Assets

During Fiscal 2016, the Company recorded non-cash impairment charges of $49 million to write off certain fixed assets related to its domestic and international stores and shop-within-shops, of which $27 million was recorded in connection with the Global Reorganization Plan (see Note 11) and $22 million was recorded in connection with underperforming stores subject to potential future closure.

During Fiscal 2015, the Company recorded non-cash impairment charges of $7 million, primarily to write off certain fixed assets related to its domestic and international retail stores.

During Fiscal 2014, the Company recorded non-cash impairment charges of $1 million, primarily to write off certain fixed assets related to its European operations.

11.	Restructuring and Other Charges

A description of significant restructuring and other activities and related costs is included below.

Fiscal 2016

Global Reorganization Plan

On May 12, 2015, the Company's Board of Directors approved a reorganization and restructuring plan comprised of the following major actions: (i) the reorganization of the Company from its historical channel and regional structure to an integrated global brand-based operating structure, which will streamline the Company's business processes to better align its cost structure with its long-term growth strategy; (ii) a strategic store and shop-within-shop performance review conducted by region and brand; (iii) a targeted corporate functional area review; and (iv) the consolidation of certain of the Company's luxury lines (collectively, the "Global Reorganization Plan"). Actions associated with the Global Reorganization Plan were substantially completed during Fiscal 2016 and resulted in a reduction in workforce and the closure of certain stores and shop-within-shops.

	F-22

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of the charges recorded in connection with the Global Reorganization Plan during Fiscal 2016 is as follows:

		Fiscal Year Ended
		April 2, 2016
		(millions)
Cash-related restructuring charges:
Severance and benefit costs		$	64
Lease termination and store closure costs		8
Other cash charges(a)		14
Total cash-related restructuring charges		86
Non-cash charges:
Impairment of assets (see Note 10)		27
Accelerated stock-based compensation expense(b)		9
Inventory-related charges(c)		20
Total non-cash charges		56
Total charges		$	142

(a)	Other cash charges primarily consisted of consulting fees incurred in connection with the Global Reorganization Plan.

(b)	Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of income, was recorded in connection with vesting provisions associated with certain separation agreements.

(c)	Inventory-related charges are recorded within cost of goods sold in the consolidated statements of income.

The Company expects to incur additional charges of approximately $5 million during its fiscal year ending April 1, 2017 ("Fiscal 2017") in connection with the Global Reorganization Plan, consisting primarily of cash-related severance and benefit costs. In addition, the Company continues to develop and work towards finalizing its strategic growth plan for Fiscal 2017 and beyond, which once completed will likely result in additional restructuring activities and related charges.

A summary of the activity in the restructuring reserve related to the Global Reorganization Plan is as follows:

		Severance and Benefit Costs				Lease Termination and Store Closure Costs				Other Cash Charges				Total
		(millions)
Balance at March 28, 2015		$	—			$	—			$	—			$	—
Additions charged to expense		64				8				14				86
Cash payments charged against reserve		(33		)		(3		)		(11		)		(47		)
Non-cash adjustments		—				1				—				1
Balance at April 2, 2016		$	31			$	6			$	3			$	40

Other Charges

During Fiscal 2016, the Company recorded other charges of $34 million related to its pending customs audit (see Note 16) and $14 million primarily related to the settlement of certain litigation claims.

Fiscal 2015

During Fiscal 2015, the Company recorded restructuring charges of $10 million, primarily related to severance and benefit costs associated with certain of its retail, wholesale, and corporate operations. As of March 28, 2015, the related aggregate remaining restructuring liability was approximately $5 million. As of April 2, 2016, the related aggregate remaining restructuring liability was not material.

	F-23

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fiscal 2014

During Fiscal 2014, the Company recorded restructuring charges of $8 million, primarily related to severance and benefit costs associated with its corporate operations. As of both April 2, 2016 and March 28, 2015, the related aggregate remaining restructuring liability was not material.

In addition, in connection with the formation of the Office of the Chairman, the Company entered into employment agreements with certain of its executive officers, which became effective in November 2013. As a result of the new employment agreement provisions, the Company recorded $10 million of accelerated stock-based compensation expense during Fiscal 2014.

12.	Income Taxes

Taxes on Income

Domestic and foreign pretax income are as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Domestic		$	275			$	620			$	710
Foreign		277				367				386
Total income before provision for income taxes		$	552			$	987			$	1,096

Provisions (benefits) for current and deferred income taxes are as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Current:
Federal(a)		$	88			$	161			$	211
State and local(a)		(3		)		35				51
Foreign		79				78				57
		164				274				319
Deferred:
Federal		(5		)		22				(4		)
State and local		(1		)		3				1
Foreign		(2		)		(14		)		4
		(8		)		11				1
Total provision for income taxes		$	156			$	285			$	320

(a)	Excludes federal, state, and local tax benefits of approximately $10 million, $8 million, and $34 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively, resulting from stock-based compensation arrangements. Such amounts were recorded within equity.

	F-24

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Tax Rate Reconciliation

The differences between income taxes expected at the U.S. federal statutory income tax rate of 35% and income taxes provided are as set forth below:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Provision for income taxes at the U.S. federal statutory rate		$	193			$	346			$	384
Increase (decrease) due to:
State and local income taxes, net of federal benefit		11				21				29
Foreign income taxed at different rates, net of U.S. foreign tax credits		(33		)		(96		)		(89		)
Unrecognized tax benefits and settlements of tax examinations		(13		)		11				(5		)
Other		(2		)		3				1
Total provision for income taxes		$	156			$	285			$	320
Effective tax rate(a)		28.2		%		28.9		%		29.2		%

(a)	Effective tax rate is calculated by dividing the provision for income taxes by income before provision for income taxes.

The Company's effective tax rate is lower than the statutory rate principally as a result of the proportion of earnings generated in lower taxed foreign jurisdictions versus the U.S. In addition, during Fiscal 2016, the effective tax rate was favorably impacted by tax benefits associated with provision to tax return adjustments, the reversal of certain tax liabilities due to the expiration of statues of limitations, and a change in estimate related to the assessment period of certain tax liabilities, as discussed below, partially offset by the reversal of certain deferred tax assets that were determined to not be realizable. The Company's effective tax rate during both Fiscal 2015 and Fiscal 2014 was favorably impacted by tax reserve reductions associated with income tax benefits resulting from the legal entity restructurings of certain of the Company's foreign operations. The Company's effective tax rate for Fiscal 2014 also reflected tax reserve reductions associated with the conclusion of a tax examination.

During the second quarter of Fiscal 2016, the Company concluded, with the assistance of a third-party consultant, that based on recent audit settlements and taxpayer audit trends, the assessment period associated with certain tax liabilities established under ASC Topic 740, "Income Taxes," should be reduced. This change is considered a change in estimate for accounting purposes and the related impact was recorded during the second quarter of Fiscal 2016. This change lowered the Company's provision for income taxes by $8 million, including interest and penalties, and net of deferred tax asset reversals, and increased basic and diluted earnings per share by $0.09 for Fiscal 2016.

	F-25

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Deferred Taxes

The Company early-adopted ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" as of the end of its Fiscal 2016 and applied its provisions prospectively (see Note 4). As a result, the Company has classified all of its deferred tax assets and liabilities, together with any related valuation allowance, as non-current on the consolidated balance sheet as of April 2, 2016. The prior period was not retrospectively adjusted.

Significant components of the Company's net deferred tax assets (liabilities) are as follows:

		April 2, 2016				March 28, 2015
		(millions)
Current deferred tax assets:
Receivable allowances and reserves		$	—			$	64
Deferred compensation		—				32
Inventory basis difference		—				24
Other		—				15
Valuation allowance		—				—
Net current deferred tax assets(a)		—				135
Non-current deferred tax assets (liabilities):
Goodwill and other intangible assets		(217		)		(209		)
Property and equipment		(89		)		(86		)
Deferred compensation		126				76
Lease obligations		88				86
Receivable allowances and reserves		66				—
Inventory basis difference		29				—
Unrecognized tax benefits		21				30
Net operating loss carryforwards		21				19
Deferred rent		17				18
Deferred income		15				12
Accrued expenses		9				—
Cumulative translation adjustment and hedges		8				(1		)
Transfer pricing		6				14
Other		12				7
Valuation allowance		(10		)		(8		)
Net non-current deferred tax assets (liabilities)(b)		102				(42		)
Net deferred tax assets		$	102			$	93

(a)	The net current deferred tax balance as of March 28, 2015 included current deferred tax liabilities of $10 million recorded within accrued expenses and other current liabilities in the consolidated balance sheets.

(b)	The net non-current deferred tax balances as of April 2, 2016 and March 28, 2015 were comprised of non-current deferred tax assets of $119 million and $45 million, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of $17 million and $87 million, respectively, recorded within other non-current liabilities in the consolidated balance sheets.

	F-26

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has available state and foreign net operating loss carryforwards of $4 million and $71 million, respectively, for tax purposes to offset future taxable income. The net operating loss carryforwards expire beginning in Fiscal 2017.

The Company also has available state and foreign net operating loss carryforwards of $7 million and $17 million, respectively, for which no net deferred tax asset has been recognized. A full valuation allowance has been recorded against these carryforwards since management does not believe that the Company will more likely than not be able to utilize these carryforwards to offset future taxable income. Subsequent recognition of these deferred tax assets would result in an income tax benefit in the year of such recognition. The valuation allowance relating to state net operating loss carryforwards remained consistent with the prior year. The valuation allowance relating to foreign net operating loss carryforwards increased by $6 million mainly as a result of additional net operating losses in certain jurisdictions where management does not believe that the Company will more likely than not be able to utilize these carryforwards in the future.

Provision has not been made for U.S. or additional foreign taxes on $2.615 billion of undistributed earnings of foreign subsidiaries. Those historical earnings have been and are expected to continue to be permanently reinvested. These earnings could become subject to tax if they were remitted as dividends, if foreign earnings were lent to RLC, a subsidiary or a U.S. affiliate of RLC, or if the stock of the subsidiaries were sold. Determination of the amount of unrecognized deferred tax liability with respect to such earnings is not practicable. Management believes that the amount of the additional taxes that might be payable on the earnings of foreign subsidiaries, if remitted, would be partially offset by U.S. foreign tax credits.

Uncertain Income Tax Benefits

Fiscal 2016, Fiscal 2015, and Fiscal 2014 Activity

Reconciliations of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for Fiscal 2016, Fiscal 2015, and Fiscal 2014 are presented below:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Unrecognized tax benefits beginning balance		$	69			$	83			$	100
Additions related to current period tax positions		5				5				6
Additions related to prior period tax positions		7				10				12
Reductions related to prior period tax positions		(12		)		(1		)		(13		)	(b)
Reductions related to expiration of statutes of limitations		(7		)		(1		)		(2		)
Reductions related to settlements with taxing authorities		(12		)		(25		)	(a)	(23		)	(b)
Additions (reductions) related to foreign currency translation		—				(2		)		3
Unrecognized tax benefits ending balance		$	50			$	69			$	83

(a)	Includes a $20 million decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2015 for the taxable years ended April 2, 2011 and April 3, 2012.

(b)	Includes a $29 million decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2014 for the taxable years ended April 3, 2004 and April 2, 2005.

	F-27

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. Reconciliations of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits for Fiscal 2016, Fiscal 2015, and Fiscal 2014 are presented below:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Accrued interest and penalties beginning balance		$	47			$	49			$	50
Net additions charged to expense		4				6				6
Reductions related to prior period tax positions		(15		)		(1		)		(4		)
Reductions related to settlements with taxing authorities		(5		)		(5		)		(5		)
Additions (reductions) related to foreign currency translation		—				(2		)		2
Accrued interest and penalties ending balance		$	31			$	47			$	49

The total amount of unrecognized tax benefits, including interest and penalties, was $81 million and $116 million as of April 2, 2016 and March 28, 2015, respectively, and is included within the 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 $60 million and $85 million as of April 2, 2016 and March 28, 2015, respectively.

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, settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, the Company does not anticipate that the balance of gross unrecognized tax benefits, excluding interest and penalties, will change significantly during the next twelve months. However, changes in the occurrence, expected outcomes, and timing of such events could cause the Company's current estimate to change materially in the future.

The Company files a consolidated U.S. federal income tax return, as well as tax returns in various state, local, and foreign jurisdictions. The Company is generally no longer subject to examinations by the relevant tax authorities for years prior to its fiscal year ended April 1, 2006.

13.	Debt

Debt consists of the following:

		April 2, 2016				March 28, 2015
		(millions)
$300 million 2.125% Senior Notes(a)		$	301			$	298
$300 million 2.625% Senior Notes(b)		296				—
Commercial paper notes		90				234
Borrowings outstanding under credit facilities		26				—
Total debt		713				532
Less: short-term debt		116				234
Total long-term debt		$	597			$	298

(a)

During Fiscal 2016, the Company entered into an interest rate swap contract which it designated as a hedge against changes in the fair value of its fixed-rate 2.125% Senior Notes (see Note 15). Accordingly, the carrying value of the 2.125% Senior Notes as of April 2, 2016 reflects an adjustment of $2 million for the change in fair value attributable to the benchmark interest rate. The carrying value of the 2.125% Senior Notes is also net of unamortized debt issuance costs and discount of $1 million and $2 million as of April 2, 2016 and March 28, 2015, respectively.

	F-28

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(b)

During Fiscal 2016, the Company entered into an interest rate swap contract which it designated as a hedge against changes in the fair value of its fixed-rate 2.625% Senior Notes (see Note 15). Accordingly, the carrying value of the 2.625% Senior Notes as of April 2, 2016 reflects an adjustment of $2 million for the change in fair value attributable to the benchmark interest rate. The carrying value of the 2.625% Senior Notes is also net of unamortized debt issuance costs and discount of $2 million as of April 2, 2016.

Senior Notes

In September 2013, the Company completed a registered public debt offering and issued $300 million aggregate principal amount of unsecured senior notes due September 26, 2018, which bear interest at a fixed rate of 2.125%, payable semi-annually (the "2.125% Senior Notes"). The 2.125% Senior Notes were issued at a price equal to 99.896% of their principal amount. The proceeds from this offering were used for general corporate purposes, including repayment of the Company's previously outstanding €209 million principal amount of 4.5% Euro-denominated notes, which matured on October 4, 2013.

In August 2015, the Company completed a second registered public debt offering and issued an additional $300 million aggregate principal amount of unsecured senior notes due August 18, 2020, which bear interest at a fixed rate of 2.625%, payable semi-annually (the "2.625% Senior Notes"). The 2.625% Senior Notes were issued at a price equal to 99.795% of their principal amount. The proceeds from this offering were used for general corporate purposes.

The Company has the option to redeem the 2.125% Senior Notes and 2.625% Senior Notes (collectively, the "Senior Notes"), in whole or in part, at any time at a price equal to accrued and unpaid interest on the redemption date, plus the greater of (i) 100% of the principal amount of the series of Senior Notes to be redeemed or (ii) the sum of the present value of Remaining Scheduled Payments, as defined in the supplemental indentures governing such Senior Notes (together with the indenture governing the Senior Notes, the "Indenture"). The Indenture contains certain covenants that restrict the Company's ability, subject to specified exceptions, to incur certain liens; enter into sale and leaseback transactions; consolidate or merge with another party; or sell, lease, or convey all or substantially all of the Company's property or assets to another party. However, the Indenture does not contain any financial covenants.

Commercial Paper

In May 2014, the Company initiated a commercial paper borrowing program (the "Commercial Paper Program") that allowed it to issue up to $300 million of unsecured commercial paper notes through private placement using third-party broker-dealers. In May 2015, the Company expanded its Commercial Paper Program to allow for a total issuance of up to $500 million of unsecured commercial paper notes.

Borrowings under the Commercial Paper Program are supported by the Global Credit Facility, as defined below, and may be used to support the Company's general working capital and corporate needs. Maturities of commercial paper notes vary, but cannot exceed 397 days from the date of issuance. Commercial paper notes issued under the Commercial Paper Program rank equally with the Company's other forms of unsecured indebtedness. As of April 2, 2016, the Company had $90 million in borrowings outstanding under its Commercial Paper Program, with a weighted-average annual interest rate of 0.41% and a weighted-average remaining term of 3 days.

Revolving Credit Facilities

Global Credit Facility

In February 2015, the Company entered into an amended and restated credit facility (which was further amended in March 2016) that provides for a $500 million senior unsecured revolving line of credit through February 11, 2020 (the "Global Credit Facility") under terms and conditions substantially similar to those previously in effect. The Global Credit Facility is also used to support the issuance of letters of credit and the maintenance of the Commercial Paper Program. Borrowings under the Global Credit Facility may be denominated in U.S. Dollars and other currencies, including Euros, Hong Kong Dollars, and Japanese Yen. The Company has the ability to expand its borrowing availability under the Global Credit Facility to $750 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 Global Credit Facility. As of April 2, 2016, there were no borrowings outstanding under the Global Credit Facility and the Company was contingently liable for $9 million of outstanding letters of credit.

	F-29

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

U.S. Dollar-denominated borrowings under the Global Credit Facility bear interest, at the Company's option, either at (a) a base rate, by reference to the greatest of: (i) the annual prime commercial lending rate of JPMorgan Chase Bank, N.A. in effect from time to time, (ii) the weighted-average overnight Federal funds rate plus 50 basis points, or (iii) the one-month London Interbank Offered Rate ("LIBOR") plus 100 basis points; or (b) LIBOR, adjusted for the Federal Reserve Board's Eurocurrency liabilities maximum reserve percentage, plus a spread of 87.5 basis points, subject to adjustment based on the Company's credit ratings ("Adjusted LIBOR"). Foreign currency-denominated borrowings bear interest at Adjusted LIBOR.

In addition to paying interest on any outstanding borrowings under the Global Credit Facility, the Company is required to pay a commitment fee to the lenders under the Global Credit Facility with respect to the unutilized commitments. The commitment fee rate of 7 basis points under the terms of the Global Credit Facility is subject to adjustment based on the Company's credit ratings.

The Global 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; sell or dispose of assets; 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 certain investments. The Global 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 the four most recent consecutive fiscal quarters. Adjusted Debt is defined generally as consolidated debt outstanding plus four times consolidated rent expense for the four most recent consecutive fiscal quarters. Consolidated EBITDAR is defined generally as consolidated net income plus (i) income tax expense, (ii) net interest expense, (iii) depreciation and amortization expense, (iv) consolidated rent expense, (v) restructuring and other non-recurring expenses, and (vi) acquisition-related costs. As of April 2, 2016, no Event of Default (as such term is defined pursuant to the Global Credit Facility) has occurred under the Company's Global Credit Facility.

Upon the occurrence of an Event of Default under the Global Credit Facility, the lenders may cease making loans, terminate the Global Credit Facility, and declare all amounts outstanding to be immediately due and payable. The Global Credit Facility specifies a number of events of default (many of which are subject to applicable grace periods), including, among others, the failure to make timely principal, interest, and fee payments or to satisfy the covenants, including the financial covenant described above. Additionally, the Global Credit Facility provides that an Event of Default will occur if Mr. Ralph Lauren, the Company's Executive Chairman and Chief Creative Officer, and entities controlled by the Lauren family fail to maintain a specified minimum percentage of the voting power of the Company's common stock.

Pan-Asia Credit Facilities

Certain of the Company's subsidiaries in Asia have uncommitted credit facilities with regional branches of JPMorgan Chase (the "Banks") in China and South Korea (the "Pan-Asia Credit Facilities"). These credit facilities are subject to annual renewal and may be used to fund general working capital and corporate needs of the Company's operations in the respective countries. Borrowings under the Pan-Asia Credit Facilities are guaranteed by the parent company and are granted at the sole discretion of the Banks, subject to availability of the Banks' funds and satisfaction of certain regulatory requirements. The Pan-Asia Credit Facilities do not contain any financial covenants. The Company's Pan-Asia Credit Facilities by country are as follows:

•	China Credit Facility — provides Ralph Lauren Trading (Shanghai) Co., Ltd. with a revolving line of credit of up to 100 million Chinese Renminbi (approximately $16 million) through April 6, 2017, and may also be used to support bank guarantees. As of April 2, 2016, bank guarantees supported by this facility were not material.

•	South Korea Credit Facility — provides Ralph Lauren (Korea) Ltd. with a revolving line of credit of up to 47 billion South Korean Won (approximately $41 million) through October 31, 2016.

As of April 2, 2016, borrowings outstanding under the Pan-Asia Credit Facilities were $26 million, which have been classified as short-term debt in the Company's consolidated balance sheet.

	F-30

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.	Fair Value Measurements

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

The following table summarizes the Company's financial assets and liabilities that are measured and recorded at fair value on a recurring basis, excluding accrued interest components:

		April 2, 2016				March 28, 2015
		(millions)
Financial assets recorded at fair value:
Corporate bonds — non-U.S.(a)		$	8			$	8
Derivative financial instruments(b)		22				87
Total		$	30			$	95
Financial liabilities recorded at fair value:
Derivative financial instruments(b)		$	59			$	19
Total		$	59			$	19

(a)	Based on Level 1 measurements.

(b)	Based on Level 2 measurements.

To the extent the Company invests in bonds, such investments are classified as available-for-sale and recorded at fair value in its consolidated balance sheets based upon quoted prices in active markets.

The Company's derivative financial instruments are recorded at fair value in its consolidated balance sheets and are valued using pricing models that are primarily based on market observable external inputs, including spot and forward currency exchange rates, benchmark interest rates, and discount rates consistent with the instrument's tenor, and consider the impact of the Company's own credit risk, if any. Changes in counterparty credit risk are also considered in the valuation of derivative financial instruments.

The Company's cash and cash equivalents, restricted cash, and time deposits are recorded at carrying value, which approximates fair value based on Level 1 measurements.

The Company's debt instruments are recorded at their carrying values in its consolidated balance sheets, which may differ from their respective fair values. The fair values of the Senior Notes are estimated based on external pricing data, including available quoted market prices, and with reference to comparable debt instruments with similar interest rates, credit ratings, and trading frequency, among other factors. The fair values of the Company's commercial paper notes and borrowings outstanding under its credit facilities are estimated using external pricing data, based on interest rates and credit ratings for similar issuances with the same remaining term as the Company's outstanding borrowings. Due to their short-term nature, the fair values of the Company's commercial paper notes and borrowings outstanding under its credit facilities at April 2, 2016 approximate their carrying values.

	F-31

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the carrying values and the estimated fair values of the Company's debt instruments:

		April 2, 2016								March 28, 2015
		Carrying Value				Fair Value(a)				Carrying Value				Fair Value(a)
		(millions)
$300 million 2.125% Senior Notes		$	301		(b)	$	306			$	298		(b)	$	304
$300 million 2.625% Senior Notes		296			(b)	308				—				—
Commercial paper notes		90				90				234				234
Borrowings outstanding under credit facilities		26				26				—				—

(a)	Based on Level 2 measurements.

(b)	See Note 13 for discussion of the carrying values of the Company's Senior Notes as of April 2, 2016 and March 28, 2015.

Unrealized gains or losses resulting from changes in the fair value of the Company's debt do not result in the realization or expenditure of cash, unless the debt is retired prior to its maturity.

Non-financial Assets and Liabilities

The Company's non-financial assets, which primarily consist of goodwill, other 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 or whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value, considering external market participant assumptions.

During Fiscal 2016, Fiscal 2015, and Fiscal 2014, the Company recorded non-cash impairment charges to reduce the carrying values of certain long-lived store and shop-within-shop assets to their fair values. The fair values of these assets were determined based on Level 3 measurements. Inputs to these fair value measurements included estimates of the amount and timing of the stores' or shop-within-shops' net future discounted cash flows based on historical experience, current trends, and market conditions.

The following table summarizes the impairment charges recorded during Fiscal 2016, Fiscal 2015, and Fiscal 2014:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Aggregate carrying value of long-lived assets written down to fair value		$	49			$	7			$	1
Impairment charges(a)		(49		)		(7		)		(1		)

(a)	See Note 10 for details of impairment charges recorded in Fiscal 2016, Fiscal 2015, and Fiscal 2014.

No goodwill impairment charges have been recorded during any of the three fiscal years presented. In Fiscal 2016, the Company performed its annual goodwill impairment assessment as of the beginning of the second quarter of the fiscal year using a qualitative approach. In performing the assessment, the Company identified and considered the significance of relevant key factors, events, and circumstances that affected the fair values and/or carrying amounts of its reporting units. These factors included external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as the Company's actual and planned financial performance. Additionally, the results of the Company's most recent quantitative goodwill impairment test indicated that the fair values of its reporting units significantly exceeded their respective carrying values. Based on the results of its qualitative goodwill impairment assessment, the Company concluded that it is not more likely than not that the fair values of its reporting units are less than their respective carrying values, and there were no reporting units at risk of impairment.

	F-32

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15.	Financial Instruments

Derivative Financial Instruments

The Company is exposed to changes in foreign currency exchange rates, primarily relating to certain anticipated cash flows and the value of the reported net assets of its international operations, as well as changes in the fair value of its fixed-rate debt attributed to changes in the benchmark interest rate. Consequently, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not enter into derivative transactions for speculative or trading purposes.

The following table summarizes the Company's outstanding derivative instruments on a gross basis as recorded in its consolidated balance sheets as of April 2, 2016 and March 28, 2015:

		Notional Amounts								Derivative Assets												Derivative Liabilities
Derivative Instrument(a)		April 2, 2016				March 28, 2015				April 2, 2016						March 28, 2015						April 2, 2016						March 28, 2015
										Balance Sheet Line(b)		Fair Value				Balance Sheet Line(b)		Fair Value				Balance Sheet Line(b)		Fair Value				Balance Sheet Line(b)		Fair Value
		(millions)
Designated Hedges:
FC — Inventory purchases		$	532			$	587			PP		$	1			PP		$	49			AE		$	14			AE		$	9
FC — Other(c)		210				118				—		—				PP		5				AE		9				AE		1
IRS — Fixed-rate debt		600				—				ONCA		2				—		—				ONCL		2				—		—
CCS — NI		630				—				—		—				—		—				ONCL		31				—		—
Total Designated Hedges		$	1,972			$	705					$	3					$	54					$	56					$	10
Undesignated Hedges:
FC — Other(d)		$	541			$	464			(e)		$	19			(f)		$	33			AE		$	3			(g)		$	9
Total Hedges		$	2,513			$	1,169					$	22					$	87					$	59					$	19

(a)	FC = Forward foreign currency exchange contracts; IRS = Interest rate swap contracts; CCS = Cross-currency swap contracts; NI = Net investment hedges.

(b)	PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities; ONCA = Other non-current assets; ONCL = Other non-current liabilities.

(c)	Primarily includes designated hedges of foreign currency-denominated intercompany royalty payments and other operational exposures.

(d)	Primarily includes undesignated hedges of foreign currency-denominated intercompany loans and other intercompany balances.

(e)	$15 million included within prepaid expenses and other current assets and $4 million included within other non-current assets.

(f)	$11 million included within prepaid expenses and other current assets and $22 million included within other non-current assets.

(g)	$8 million included within accrued expenses and other current liabilities and $1 million included within other non-current liabilities.

	F-33

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company records and presents the fair values of all of its derivative assets and liabilities in its consolidated balance sheets on a gross basis, even though they are subject to master netting arrangements. However, if the Company were to offset and record the asset and liability balances of all of its derivative instruments on a net basis in accordance with the terms of each of its master netting arrangements, spread across eight separate counterparties, the amounts presented in the consolidated balance sheets as of April 2, 2016 and March 28, 2015 would be adjusted from the current gross presentation as detailed in the following table:

		April 2, 2016												March 28, 2015
Derivative Instrument		Gross Amounts Presented in the Balance Sheet				Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Arrangements				Net Amount				Gross Amounts Presented in the Balance Sheet				Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Arrangements				Net Amount
		(millions)
Derivative assets		$	22			$	(11	)		$	11			$	87			$	(14	)		$	73
Derivative liabilities		$	59			$	(11	)		$	48			$	19			$	(14	)		$	5

The Company's master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties. Refer to Note 3 for further discussion of the Company's master netting arrangements.

The following tables summarize the pretax impact of the effective portion of gains and losses from the Company's designated derivative instruments on its consolidated financial statements for the fiscal years presented:

		Gains (Losses) Recognized in OCI												Gains (Losses) Reclassified from AOCI to Earnings												Location of Gains (Losses) Reclassified from AOCI to Earnings
		Fiscal Years Ended												Fiscal Years Ended
Derivative Instrument		April 2, 2016				March 28, 2015				March 29, 2014				April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Designated Cash Flow Hedges:
FC — Inventory purchases		$	(7	)		$	50			$	(10	)		$	44			$	3			$	10			Cost of goods sold
FC — Other		(14		)		19				—				(5		)		14				—				Foreign currency gains (losses)
		$	(21	)		$	69			$	(10	)		$	39			$	17			$	10
Designated Hedges of Net Investments:
CCS(a)		$	(28	)		$	—			$	—			$	—			$	—			$	—
Total Designated Hedges		$	(49	)		$	69			$	(10	)		$	39			$	17			$	10

(a)	Amounts recognized in OCI would be recognized in earnings only upon the sale or liquidation of the hedged net investment.

During Fiscal 2014, the Company also recorded a foreign currency gain of $2 million associated with the discontinuance of certain cash flow hedges, as the related forecasted transactions were no longer probable of occurring.

As of April 2, 2016, it is expected that approximately $13 million of net losses deferred in AOCI related to derivative instruments will be recognized in earnings over the next twelve months. No material gains or losses relating to ineffective cash flow hedges were recognized during any of the fiscal years presented.

	F-34

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the pretax impact of gains and losses from the Company's undesignated derivative instruments on its consolidated financial statements for the fiscal years presented:

		Gains (Losses) Recognized in Earnings												Location of Gains (Losses) Recognized in Earnings
		Fiscal Years Ended
Derivative Instrument		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Undesignated Hedges:
FC — Other		$	(7	)		$	18			$	20			Foreign currency gains (losses)
Total Undesignated Hedges		$	(7	)		$	18			$	20

Risk Management Strategies

Forward Foreign Currency Exchange Contracts

The Company enters into forward foreign currency exchange contracts to reduce its risk related to exchange rate fluctuations on inventory transactions made in an entity's non-functional currency, intercompany royalty payments made by certain of its international operations, and other foreign currency-denominated operational and intercompany balances and cash flows. 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 South Korean Won, the Australian Dollar, the Canadian Dollar, the British Pound Sterling, and the Hong Kong Dollar, the Company hedges a portion of its foreign currency exposures anticipated over a two-year period. In doing so, the Company uses forward foreign currency exchange contracts that generally have maturities of two months to two years to provide continuing coverage throughout the hedging period.

Interest Rate Swap Contracts

During Fiscal 2016, the Company entered into two pay-floating rate, receive-fixed rate interest rate swap contracts which it designated as hedges against changes in the respective fair values of its fixed-rate 2.125% Senior Notes and its fixed-rate 2.625% Senior Notes attributed to changes in the benchmark interest rate (the "Interest Rate Swaps"). The Interest Rate Swaps, which mature on September 26, 2018 and August 18, 2020, respectively, both have notional amounts of $300 million and swap the fixed interest rates on the Company's 2.125% Senior Notes and 2.625% Senior Notes for variable interest rates based on 3-month LIBOR plus a fixed spread. Changes in the fair values of the Interest Rate Swaps were offset by changes in the respective fair values of the 2.125% Senior Notes and 2.625% Senior Notes attributed to changes in the benchmark interest rate, with no resulting ineffectiveness recognized in earnings during Fiscal 2016.

Cross-Currency Swap Contracts

During Fiscal 2016, the Company entered into two pay-floating rate, receive-floating rate cross-currency swap contracts, with notional amounts of €280 million and €274 million, which it designated as hedges of its net investment in certain of its European subsidiaries (the "Cross-Currency Swaps"). The Cross-Currency Swaps, which mature on September 26, 2018 and August 18, 2020, respectively, swap the U.S. Dollar-denominated variable interest rate payments based on 3-month LIBOR plus a fixed spread (as paid under the Interest Rate Swaps described above) for Euro-denominated variable interest rate payments based on the 3-month Euro Interbank Offered Rate plus a fixed spread. As a result, the Cross-Currency Swaps, in conjunction with the Interest Rate Swaps, economically convert the Company's $300 million fixed-rate 2.125% and $300 million fixed-rate 2.625% obligations to €280 million and €274 million floating-rate Euro-denominated liabilities, respectively. No material gains or losses related to the ineffective portion, or the amount excluded from effectiveness testing, were recognized in interest expense within the consolidated statement of income during Fiscal 2016.

See Note 3 for further discussion of the Company's accounting policies relating to its derivative financial instruments.

	F-35

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investments

As of April 2, 2016, the Company's short-term investments consisted of $621 million of time deposits and $8 million of non-U.S. corporate bonds, and its non-current investments consisted of $187 million of time deposits. As of March 28, 2015, the Company's short-term and non-current investments consisted of $644 million of time deposits and $8 million of non-U.S. corporate bonds, respectively. The Company's non-current investments as of both April 2, 2016 and March 28, 2015 have maturities of one to two years.

No significant realized or unrealized gains or losses on available-for-sale investments or other-than-temporary impairment charges were recorded in any of the fiscal years presented. Refer to Note 18 for further detail.

See Note 3 for further discussion of the Company's accounting policies relating to its investments.

16.	Commitments and Contingencies

Leases

The Company operates most of its retail stores under various leasing arrangements. The Company also occupies various office and warehouse facilities and uses certain equipment under numerous lease agreements. Such leasing arrangements are accounted for as either operating leases or capital leases. In this context, capital leases include leases whereby the Company is considered to have the substantive risks of ownership during construction of a leased property. Information on the Company's operating and capital leasing activities is set forth below.

Operating Leases

The Company is typically required to make minimum rental payments, and often contingent rental payments, under its operating leases. Many of the Company's retail store leases provide for contingent rental payments based upon sales, and certain rental agreements require payment based solely on a percentage of sales. Terms of the Company's leases generally contain renewal options, rent escalation clauses, and landlord incentives. Rent expense, net of sublease income, was approximately $472 million, $466 million, and $455 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. Such amounts include contingent rental charges of approximately $163 million, $172 million, and $176 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. In addition to such amounts, the Company is normally required to pay taxes, insurance, and certain occupancy costs relating to the leased real estate properties.

As of April 2, 2016, future minimum rental payments under noncancelable operating leases with lease terms in excess of one year were as follows:

		Minimum Operating Lease Payments(a)(b)
		(millions)
Fiscal 2017		$	346
Fiscal 2018		329
Fiscal 2019		305
Fiscal 2020		279
Fiscal 2021		215
Fiscal 2022 and thereafter		733
Total net minimum rental payments		$	2,207

(a)	Net of sublease income, which is not significant in any period.

(b)	Includes a $58 million operating lease obligation related to the land portion of the build-to-suit lease agreement for the Company's Polo flagship store on Fifth Avenue in New York City, as further described below.

	F-36

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Capital Leases

Assets under capital leases, including build-to-suit leases, amounted to approximately $278 million and $251 million at the end of Fiscal 2016 and Fiscal 2015, respectively, net of accumulated depreciation of approximately $53 million and $30 million, respectively. Such assets are classified within property and equipment, net in the consolidated balance sheets based on their nature.

As of April 2, 2016, future minimum rental payments under noncancelable capital leases, including build-to-suit leases, with lease terms in excess of one year were as follows:

		Minimum Capital Lease Payments(a)(b)
		(millions)
Fiscal 2017		$	30
Fiscal 2018		28
Fiscal 2019		26
Fiscal 2020		28
Fiscal 2021		27
Fiscal 2022 and thereafter		106
Total net minimum rental payments		245
Less: amount representing interest		(59		)
Present value of net minimum rental payments		$	186

(a)	Net of sublease income, which is not significant in any period.

(b)

Includes lease payments related to the Company's build-to-suit lease agreement for its Polo flagship store on Fifth Avenue in New York City. The total remaining commitment related to this lease was $185 million as of April 2, 2016, comprised of a $58 million operating lease obligation related to the land portion of the lease (included in the minimum operating lease payments table above) and a $127 million obligation related to the building portion of the lease (included in this minimum capital lease payments table).

Employee Agreements

The Company has employment agreements with certain executives in the normal course of business which provide for compensation and certain other benefits. These agreements also provide for severance payments under certain circumstances.

Other Commitments

Other off-balance sheet firm commitments amounted to approximately $1.151 billion as of April 2, 2016, including inventory purchase commitments of approximately $941 million, outstanding letters of credit of approximately $10 million, interest payments related to the Company's Senior Notes of approximately $51 million, and other commitments of approximately $149 million, comprised of the Company's legally-binding obligations under sponsorship, licensing, and other marketing and advertising agreements, distribution-related agreements, information technology-related service agreements, and pension-related obligations.

Customs Audit

In September 2014, one of the Company's international subsidiaries received a pre-assessment notice from the relevant customs officials concerning the method used to determine the dutiable value of imported inventory. The notice communicated the customs officials' assertion that the Company should have applied an alternative duty method, which could result in up to approximately $46 million in incremental duty and non-creditable value-added tax, including approximately $11 million in interest and penalties. The Company believes that the alternative duty method claimed by the customs officials is not applicable to the Company's facts and circumstances and is vigorously contesting their asserted methodology.

	F-37

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In October 2014, the Company filed an appeal of the pre-assessment notice in accordance with the standard procedures established by the relevant customs authorities. In response to the filing of the Company's appeal of the pre-assessment notice, the review committee instructed the customs officials to reconsider their assertion of the alternative duty method and conduct a re-audit to evaluate the facts and circumstances noted in the pre-assessment notice. In December 2015, the Company received the results of the re-audit conducted and a customs audit assessment notice in the amount of approximately $34 million, which the Company recorded within restructuring and other charges in its consolidated statements of income during the third quarter of Fiscal 2016 (see Note 11). Although the Company disagrees with the assessment notice, in order to secure the Company's rights, the Company was required to pay the assessment amount and then subsequently file an appeal with the customs authorities. The Company continues to maintain its original filing position and will vigorously contest any other proposed methodology asserted by the customs officials. Should the Company be successful in its merits, a full refund for the amounts paid plus interest will be required to be paid by the customs authorities. If the Company is unsuccessful in its current appeal with the customs authorities, it may further appeal this decision within the courts. At this time, while the Company believes that the customs officials' claims are not meritorious and that the Company should prevail, the outcome of the appeals process is subject to risk and uncertainty.

Other Matters

The Company is 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, importation and exportation of its products, taxation, unclaimed property, and employee relations. The Company believes at present that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on its consolidated financial statements. However, the Company's assessment of the current litigation or other legal claims could potentially 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.

In the normal course of business, the Company enters into agreements that provide general indemnifications. The Company has not made any significant indemnification payments under such agreements in the past, and does not currently anticipate incurring any material indemnification payments.

17.	Equity

Capital Stock

The Company's capital stock consists of two classes of common stock. There are 500 million shares of Class A common stock and 100 million shares of Class B common stock authorized to be issued. Shares of Class A and Class B common stock have substantially identical rights, except with respect to voting rights. Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. Holders of both classes of stock vote together as a single class on all matters presented to the stockholders for their approval, except with respect to the election and removal of directors or as otherwise required by applicable law. All outstanding shares of Class B common stock are owned by Mr. Ralph Lauren, the Company's Executive Chairman and Chief Creative Officer, and entities controlled by the Lauren family, and are convertible at any time into shares of Class A common stock on a one-for-one basis.

Class B Common Stock Conversions

During Fiscal 2015, the Lauren Family, L.L.C., a limited liability company managed by the children of Mr. R. Lauren, converted 1.0 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, which were subsequently sold on the open market as part of a pre-determined, systematic trading plan.

During Fiscal 2014, Mr. R. Lauren converted 3.0 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, which were subsequently sold in a block trade.

These transactions resulted in reclassifications within equity, and had no other effect on the Company's consolidated balance sheets.

	F-38

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Common Stock Repurchase Program

A summary of the Company's repurchases of Class A common stock under its common stock repurchase program is as follows:

	Fiscal Years Ended
	April 2, 2016				March 28, 2015				March 29, 2014
	(in millions)
Cost of shares repurchased	$	480			$	500			$	548		(a)
Number of shares repurchased	4.2				3.2				3.2			(a)

(a)

Includes a $50 million prepayment made in March 2013 under a share repurchase program with a third-party financial institution, in exchange for the right to receive shares of the Company's Class A common stock at the conclusion of the 93-day repurchase term. The $50 million prepayment was recorded as a reduction to additional paid-in capital in the Company's consolidated balance sheet as of March 30, 2013. The related 0.3 million shares were delivered to the Company during Fiscal 2014, based on the volume-weighted average market price of the Company's Class A common stock over the 93-day repurchase term, less a discount.

As of April 2, 2016, the remaining availability under the Company's Class A common stock repurchase program was approximately $100 million. On May 11, 2016, the Company's Board of Directors approved an expansion of the program that allows it to repurchase up to an additional $200 million of Class A common stock. Repurchases of shares of Class A common stock are subject to overall business and market conditions.

In addition, during Fiscal 2016, Fiscal 2015, and Fiscal 2014, 0.2 million, 0.2 million, and 0.4 million shares of Class A common stock, respectively, at a cost of $20 million, $32 million, and $60 million, respectively, 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"), and its Amended and Restated 2010 Long-Term Stock Incentive Plan (the "2010 Incentive Plan").

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

Dividends

Since 2003, the Company has maintained a regular quarterly cash dividend program on its common stock. On November 5, 2013, the Company's Board of Directors approved an increase to the Company's quarterly cash dividend on its common stock from $0.40 per share to $0.45 per share. On February 3, 2015, the Company's Board of Directors approved a further increase to the Company's quarterly cash dividend on its common stock from $0.45 per share to $0.50 per share. Dividends paid amounted to $170 million, $158 million, and $149 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively.

Conversion of Stock-based Compensation Awards

During Fiscal 2015, in connection with employment agreements with certain of its executive officers, the Company converted certain fully-vested and expensed stock-based compensation awards to a cash contribution into a deferred compensation account. Additionally, in connection with the formation of the Office of the Chairman, the Company entered into employment agreements with certain of its executive officers, which became effective during Fiscal 2014, and converted certain fully-vested and expensed stock-based compensation awards to a cash contribution into a deferred compensation account. The Company recorded the excess of both these awards' then current redemption values over their original grant-date fair values to retained earnings, with a corresponding increase to other non-current liabilities in the consolidated balance sheet.

	F-39

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18.	Accumulated Other Comprehensive Income

The following table presents OCI activity, net of tax, which is accumulated in equity:

		Foreign Currency Translation Gains (Losses)(a)				Net Unrealized Gains (Losses) on Cash Flow Hedges(b)				Net Unrealized Gains (Losses) on Available-for-Sale Investments(c)				Net Unrealized Gains (Losses) on Defined Benefit Plans(d)				Total Accumulated Other Comprehensive Income (Loss)
		(millions)
Balance at March 30, 2013		$	73			$	23			$	5			$	(7	)		$	94
Other comprehensive income (loss), net of tax:
OCI before reclassifications		52				(20		)		(4		)		—				28
Amounts reclassified from AOCI to earnings		—				(7		)		(1		)		—				(8		)
Other comprehensive income (loss), net of tax		52				(27		)		(5		)		—				20
Balance at March 29, 2014		125				(4		)		—				(7		)		114
Other comprehensive income (loss), net of tax:
OCI before reclassifications		(318		)		62				—				(9		)		(265		)
Amounts reclassified from AOCI to earnings		—				(15		)		—				1				(14		)
Other comprehensive income (loss), net of tax		(318		)		47				—				(8		)		(279		)
Balance at March 28, 2015		(193		)		43				—				(15		)		(165		)
Other comprehensive income (loss), net of tax:
OCI before reclassifications		36				(19		)		—				1				18
Amounts reclassified from AOCI to earnings		—				(36		)		—				2				(34		)
Other comprehensive income (loss), net of tax		36				(55		)		—				3				(16		)
Balance at April 2, 2016		$	(157	)		$	(12	)		$	—			$	(12	)		$	(181	)

(a)

OCI before reclassifications to earnings related to foreign currency translation gains (losses) includes income tax benefits of $11 million and $5 million for Fiscal 2016 and Fiscal 2015, respectively, and includes an income tax provision of $2 million for Fiscal 2014. OCI before reclassifications to earnings for Fiscal 2016 includes losses of $17 million (net of an $11 million income tax benefit) related to the effective portion of changes in the fair values of the Cross-Currency Swaps designated as hedges of the Company's net investment in certain of its European subsidiaries (see Note 15).

(b)	OCI before reclassifications to earnings related to net unrealized gains (losses) on cash flow hedges includes an income tax benefit of $2 million for Fiscal 2016 and an income tax provision of $7 million for Fiscal 2015. The tax effect for Fiscal 2014 activity was not material. The tax effects on amounts reclassified from AOCI to earnings are presented in a table below.

(c)	All amounts are presented net of taxes, which were not material.

(d)	OCI before reclassifications to earnings related to net unrealized gains (losses) on defined benefit plans includes an income tax benefit of $1 million for Fiscal 2015. The tax effects for both Fiscal 2016 and Fiscal 2014 were not material. The tax effects on amounts reclassified from AOCI to earnings were not material for any period presented.

	F-40

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents reclassifications from AOCI to earnings for cash flow hedges, by component:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014				Location of Gains (Losses) Reclassified from AOCI to Earnings
		(millions)
Gains (losses) on cash flow hedges(a):
FC — Inventory purchases		$	44			$	3			$	10			Cost of goods sold
FC — Other		(5		)		14				—				Foreign currency gains (losses)
Tax effect		(3		)		(2		)		(3		)		Provision for income taxes
Net of tax		$	36			$	15			$	7

(a)	FC = Forward foreign currency exchange contracts.

19.	Stock-based Compensation

Long-term Stock Incentive Plans

The Company's stock-based compensation awards are currently issued under the 2010 Incentive Plan, which was approved by its stockholders on August 5, 2010. However, any prior awards granted under the 1997 Incentive Plan remain subject to the terms of that plan. Any awards that expire, are forfeited, or are surrendered to the Company in satisfaction of taxes are available for issuance under the 2010 Incentive Plan. On September 24, 2013, the Company registered with the SEC an additional 1.7 million shares of its Class A common stock for issuance pursuant to the 2010 Incentive Plan. As of April 2, 2016, 2.5 million shares remained available for future issuance under the Company's incentive plans.

Stock-based compensation awards that may be made under the 2010 Incentive Plan include, but are not limited to, (i) stock options, (ii) restricted stock, and (iii) RSUs. In recent years, the Company's annual grants of stock-based compensation awards to its employees primarily consisted of stock options and RSUs. However, in Fiscal 2016, the annual grants consisted entirely of RSUs, as the Company elected to issue service-based RSUs in lieu of stock options. Additionally, new vesting provisions for certain awards granted to retirement-eligible employees were introduced. Specifically, beginning in Fiscal 2016, for certain service-based and performance-based RSUs granted to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, vesting continues post-retirement for all or a portion of the remaining unvested RSUs.

Impact on Results

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

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Compensation expense		$	97		(a)	$	81			$	93		(a)
Income tax benefit		$	(37	)		$	(30	)		$	(34	)

(a)	Fiscal 2016 and Fiscal 2014 include approximately $9 million and $10 million, respectively, of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of income (see Note 11). All other stock-based compensation expense was recorded within SG&A expenses.

	F-41

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 Class A common stock on the date of grant. Generally, options become exercisable ratably (graded-vesting schedule) over a three-year vesting period, subject to the employee's continuing employment. Stock options generally expire seven years from the date of grant.

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 including the following:

Expected Term — The estimate of expected term is based on the historical exercise behavior of employees and non-employee directors, as well as the contractual life of the option grants.

Expected Volatility — The expected volatility factor is based on the historical volatility of the Company's Class A common stock for a period equal to the stock option's expected term.

Expected Dividend Yield — The expected dividend yield is based on the Company's quarterly cash dividend rate in effect on the date of grant.

Risk-free Interest Rate — The risk-free interest rate is determined using the implied yield for a traded zero-coupon U.S. Treasury bond with a term equal to the option's expected term.

The Company's weighted average assumptions used to estimate the fair value of stock options granted during the fiscal years presented were as follows:

		Fiscal Years Ended
		April 2, 2016(a)		March 28, 2015			March 29, 2014
Expected term (years)		N/A		4.2			4.2
Expected volatility		N/A		30.2	%		32.9	%
Expected dividend yield		N/A		1.10	%		0.98	%
Risk-free interest rate		N/A		1.4	%		1.1	%
Weighted-average option grant date fair value		N/A		$37.91			$45.83

(a)	No stock options were granted during Fiscal 2016.

	F-42

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of stock option activity during Fiscal 2016 is as follows:

		Number of Shares			Weighted-Average Exercise Price				Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value(a)
		(thousands)							(years)		(millions)
Options outstanding at March 28, 2015		3,225			$	129.28			4.0		$	69
Granted		—			N/A
Exercised		(625	)		52.37
Cancelled/Forfeited		(182	)		163.56
Options outstanding at April 2, 2016		2,418			$	146.58			3.7		$	6
Options vested and expected to vest at April 2, 2016(b)		2,391			$	145.60			3.7		$	6
Options exercisable at April 2, 2016		1,818			$	140.34			3.3		$	6

(a)	Aggregate intrinsic value is the amount by which the market price of Class A common stock at the end of the period exceeds the exercise price of the stock option, multiplied by the number of options.

(b)	The number of options expected to vest takes into consideration expected forfeitures.

Additional information pertaining to the Company's stock option plans is as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Aggregate intrinsic value of stock options exercised(a)		$	44			$	35			$	63
Cash received from the exercise of stock options		34				52				52
Tax benefits realized on exercise of stock options		17				12				24

(a)	Aggregate intrinsic value is the amount by which the market price of Class A common stock exceeded the stock option's exercise price when exercised, multiplied by the number of options.

As of April 2, 2016, there was $5 million of total unrecognized compensation expense related to nonvested stock options expected to be recognized over a weighted-average period of one year.

Restricted Stock Awards and Service-based RSUs

Restricted shares granted to non-employee directors vest ratably over a three-year period, subject to the director's continued service to the Company. The fair values of restricted stock awards are based on the fair value of the Company's Class A common stock on the date of grant. Holders of restricted shares are entitled to receive cash dividends in connection with the payments of dividends on the Company's Class A common stock.

Service-based RSUs granted to certain of the Company's senior executives, as well as certain of its other employees, generally vest over a three-year period, subject to the employee's continuing employment (except for awards granted in Fiscal 2016 to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed). The fair values of service-based RSUs are based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for any awards not entitled to accrue dividend equivalents while outstanding.

	F-43

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of restricted stock and service-based RSU activity during Fiscal 2016 is as follows:

		Restricted Stock							Service- based RSUs
		Number of Shares			Weighted-Average Grant Date Fair Value				Number of Shares			Weighted-Average Grant Date Fair Value
		(thousands)							(thousands)
Nonvested at March 28, 2015		5			$	164.73			47			$	150.01
Granted		17			111.94				508			125.19
Vested		(7	)		153.53				(18	)		149.28
Forfeited		(1	)		139.87				(47	)		129.60
Nonvested at April 2, 2016		14			$	110.68			490			$	126.30

		Restricted Stock				Service- based RSUs
Total unrecognized compensation expense at April 2, 2016 (millions)		$	1			$	25
Weighted-average period expected to be recognized over (years)		1.8				1.5

Additional information pertaining to restricted stock and service-based RSU activity is as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
Restricted Stock:
Weighted-average grant date fair value of awards granted		$	111.94			$	162.36			$	164.76
Total fair value of awards vested (millions)		$	1			$	1			$	1
Service-based RSUs:
Weighted-average grant date fair value of awards granted		$	125.19			$	150.23			N/A
Total fair value of awards vested (millions)		$	2			$	1			$	16

Performance-based RSUs

The Company grants performance-based RSUs to senior executives and other key executives, as well as certain of its other employees. Performance-based RSUs generally vest (i) upon the completion of a three-year period of time (cliff vesting), subject to the employee's continuing employment (except for awards granted in Fiscal 2016 to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed) and the Company's achievement of certain performance goals established at the beginning of the three-year performance period or (ii) ratably, over a three-year period of time (graded vesting), subject to the employee's continuing employment during the applicable vesting period (except for awards granted in Fiscal 2016 to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed) and the achievement by the Company of certain performance goals in the initial year of the three-year vesting period. For performance-based RSUs subject to cliff vesting, the number of shares that may be earned ranges between 0% (if the specified threshold performance level is not attained) and 150% (if performance meets or exceeds the maximum achievement level) of the awards originally granted. If actual performance exceeds the pre-established threshold, the number of shares earned is calculated based on the relative performance between specified levels of achievement.

Certain of the cliff vesting performance-based RSU awards granted by the Company, in addition to being subject to continuing employment requirements and the Company's performance goals noted above, are also subject to a market condition in the form of a total shareholder return ("TSR") modifier. The actual number of shares that vest at the end of the respective three-year period is determined based on the Company's achievement of the three-year performance goals described above, as well as its TSR relative to the S&P 500 over the related three-year performance period. At the end of the three-year performance period, if the performance condition is achieved at or above the pre-established threshold, the number of shares earned is further adjusted by a TSR modifier

	F-44

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

payout percentage, which ranges between 75% and 125%, based on the Company's TSR performance relative to that of the S&P 500 index over the respective three-year period. Depending on the total level of achievement, the actual number of shares that vest for performance-based RSU awards with a TSR modifier may range from 0% to 187.5% of the awards originally granted.

The fair value of the Company's performance-based RSUs that are not subject to a TSR modifier is based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for those securities that are not entitled to dividend equivalents. The fair value of the Company's performance-based RSUs with a TSR modifier is determined on the date of grant using a Monte Carlo simulation valuation model. This pricing model uses multiple simulations to evaluate the probability of the Company achieving various stock price levels to determine its expected TSR performance ranking. The weighted-average assumptions used to estimate the fair value of performance-based RSUs with a TSR modifier granted during the fiscal years presented were as follows:

		Fiscal Years Ended
		April 2, 2016(a)		March 28, 2015			March 29, 2014
Expected term (years)		N/A		3.0			2.9
Expected volatility		N/A		29.8	%		32.6	%
Expected dividend yield		N/A		1.09	%		0.98	%
Risk-free interest rate		N/A		0.9	%		0.4	%
Weighted-average grant date fair value		N/A		$169.47			$169.14

(a)	No performance-based RSUs with a TSR modifier were granted during Fiscal 2016.

A summary of performance-based RSUs without TSR Modifier and performance-based RSUs with TSR Modifier activity during Fiscal 2016 is as follows:

		Performance-based RSUs — without TSR Modifier							Performance-based RSUs — with TSR Modifier
		Number of Shares			Weighted-Average Grant Date Fair Value				Number of Shares			Weighted-Average Grant Date Fair Value
		(thousands)							(thousands)
Nonvested at March 28, 2015		697			$	155.47			214			$	158.65
Granted		341			126.48				—			N/A
Change due to performance/market condition achievement		(8	)		137.08				(20	)		136.27
Vested		(293	)		147.26				(50	)		136.30
Forfeited		(46	)		155.61				(2	)		167.64
Nonvested at April 2, 2016		691			$	144.81			142			$	169.46

		Performance-based RSUs — without TSR Modifier				Performance-based RSUs — with TSR Modifier
Total unrecognized compensation expense at April 2, 2016 (millions)		$	25			$	3
Weighted-average period expected to be recognized over (years)		1.6				1.1

	F-45

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Additional information pertaining to performance-based RSUs without TSR Modifier and performance-based RSUs with TSR Modifier activity is as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
Performance-based RSUs — without TSR Modifier:
Weighted-average grant date fair value of awards granted		$	126.48			$	157.10			$	171.93
Total fair value of awards vested (millions)		$	38			$	65			$	109
Performance-based RSUs — with TSR Modifier:
Weighted-average grant date fair value of awards granted		N/A				$	169.47			$	169.14
Total fair value of awards vested (millions)		$	7			$	—			$	—

20.	Employee Benefit Plans

Profit Sharing Retirement Savings Plans

The Company sponsors defined contribution benefit plans covering substantially all eligible employees in the U.S. and Puerto Rico who are not covered by a collective bargaining agreement. The plans include a savings plan feature under Section 401(k) of the Internal Revenue Code. The Company makes matching contributions to the plans equal to 50% of the first 6% of salary contributed by an eligible employee. Additionally, the Company makes a supplemental matching contribution for plan years in which the Company achieves a "stretch" or a "maximum" performance target based on certain goals established at the beginning of each fiscal year, increasing the matching contribution to 75% or 100%, respectively, of the first 6% of salary contributed by eligible employees, not to exceed the maximum contribution permitted by the plan.

Under the terms of the plans, a participant becomes 100% vested in the Company's matching contributions after five years of credited service. Contributions made by the Company under these plans were $11 million in each of Fiscal 2016 and Fiscal 2015, and $10 million in Fiscal 2014.

International Defined Benefit Plans

The Company sponsors certain single-employer defined benefit plans and cash balance plans at international locations which are not considered to be material individually or in the aggregate to the Company's financial statements. Pension benefits under these plans are based on formulas that reflect the employees' years of service and compensation levels during their employment period. The aggregate funded status of the single-employer defined benefit plans reflected net liabilities of $5 million and $8 million as of April 2, 2016 and March 28, 2015, respectively, and were primarily recorded within other non-current liabilities in the Company's consolidated balance sheets. These single-employer defined benefit plans had aggregate projected benefit obligations of $65 million and aggregate fair values of plan assets of $60 million as of April 2, 2016, compared to aggregate projected benefit obligations of $60 million and aggregate fair values of plan assets of $52 million as of March 28, 2015. The asset portfolio of the single-employer defined benefit plans primarily consists of fixed income securities, which have been measured at fair value largely using Level 2 inputs, as described in Note 14. Pension expense for these plans, recorded within SG&A expenses in the Company's consolidated statements of income, was $6 million in Fiscal 2016 and $5 million in each of Fiscal 2015 and Fiscal 2014.

Union Pension Plan

The Company participates in a multi-employer pension plan and is required to make contributions to the Workers United union (which was previously known as UNITE HERE) (the "Union") for dues based on wages paid to union employees. A portion of these dues is allocated by the Union to a retirement fund which provides defined benefits to substantially all unionized workers. The Company does not participate in the management of the plan and has not been furnished with information with respect to the type of benefits provided, vested and non-vested benefits, or assets.

	F-46

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Under the Employee Retirement Income Security Act of 1974, as amended, an employer, upon withdrawal from or termination of a multi-employer plan, is required to continue funding its proportionate share of the plan's unfunded vested benefits. Such liability was assumed in conjunction with the acquisition of certain assets from a non-affiliated licensee. The Company has no current intention of withdrawing from the plan.

Other Compensation Plans

The Company had a non-qualified supplemental retirement plan for certain highly compensated employees whose benefits under the 401(k) profit sharing retirement savings plans were expected to be constrained by the operation of Internal Revenue Code limitations. These supplemental benefits vested over time and the related compensation expense was recognized over the vesting period. Effective August 2008, the Company amended this plan, resulting in a suspension of the annual contributions for substantially all plan participants. Further, affected participants were provided with a one-time election to either withdraw all benefits vested in the plan in a lump sum amount or remain in the plan and receive future distributions of benefits. As of April 2, 2016 and March 28, 2015, amounts accrued under this plan totaled approximately $8 million and $9 million, respectively, and were classified within other non-current liabilities in the consolidated balance sheets. Total compensation expense recognized related to these benefits was not material in any of the three fiscal years presented.

Additionally, the Company has available deferred compensation arrangements for certain executives that are utilized from time to time and generally provide for payments upon retirement, death, or termination of employment. The Company funds a portion of these obligations through the establishment of trust accounts on behalf of the executives participating in the plans. During Fiscal 2015, these plans were cash settled, inclusive of the cash contributions made during Fiscal 2015 and Fiscal 2014 related to the conversions of certain fully-vested and expensed stock-based compensation awards (see Note 17). Accordingly, there was no remaining amount accrued under these plans as of April 2, 2016 and March 28, 2015. Total compensation expense related to these compensation arrangements was not material in any of the three fiscal years presented.

21.	Segment Information

The Company has three reportable segments based on its business activities and organization: Wholesale, Retail, and Licensing. These segments offer a variety of products through different channels of distribution. The Wholesale segment consists of apparel, accessories, home furnishings, and related products which are sold to major department stores, specialty stores, golf and pro shops, and the Company's licensed and franchised retail stores in the U.S. and overseas. The Retail segment consists of the Company's integrated worldwide retail operations, which sell products through its retail stores, concession-based shop-within-shops, and e-commerce sites, which are purchased from the Company's licensees and suppliers. 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. Sales and transfers between segments are generally recorded at cost and treated as transfers of inventory. All intercompany revenues, including such sales between segments, 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. Certain corporate overhead expenses related to global functions, most notably the Company's executive office, information technology, finance and accounting, human resources, and legal departments, largely remain at corporate. Additionally, other costs that cannot be allocated to the segments based on specific usage are also maintained at corporate, including corporate advertising and marketing expenses, depreciation and amortization of corporate assets, and other general and administrative expenses resulting from corporate-level activities and projects.

	F-47

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net revenues for each of the Company's reportable segments are as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Net revenues:
Wholesale		$	3,297			$	3,495			$	3,486
Retail		3,933				3,956				3,798
Licensing		175				169				166
Total net revenues(a)		$	7,405			$	7,620			$	7,450

(a)	The Company's sales to its largest wholesale customer, Macy's, accounted for approximately 11% of its total net revenues in Fiscal 2016 and approximately 12% of its total net revenues in each of Fiscal 2015 and Fiscal 2014.

Operating income for each of the Company's reportable segments is as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Operating income:
Wholesale(a)		$	822			$	943			$	963
Retail(b)		359				527				572
Licensing		155				152				150
		1,336				1,622				1,685
Unallocated corporate expenses		(611		)		(577		)		(553		)
Gain on acquisition of Chaps(c)		—				—				16
Unallocated restructuring and other charges(d)		(143		)		(10		)		(18		)
Total operating income		$	582			$	1,035			$	1,130

(a)

During Fiscal 2016, the Company recorded non-cash impairment charges of $6 million, primarily to write off certain fixed assets related to its shop-within-shops in connection with the Global Reorganization Plan. During Fiscal 2014, the Company recorded non-cash impairment charges of $1 million, primarily to write off certain fixed assets related to its European wholesale operations. See Notes 10 and 11 for additional information.

(b)

During Fiscal 2016, the Company recorded non-cash impairment charges of $43 million, primarily to write off certain fixed assets related to its stores and concession-based shop-within-shops in connection with the Global Reorganization Plan. During Fiscal 2015, the Company recorded non-cash impairment charges of $7 million, primarily to write off certain fixed assets related to its domestic and international retail stores. See Notes 10 and 11 for additional information.

(c)	See Note 5 for a description of the gain on acquisition of Chaps recorded during Fiscal 2014.

(d)	The fiscal years presented included certain unallocated restructuring and other charges (see Note 11), which are detailed below:

	F-48

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

			Fiscal Years Ended
			April 2, 2016				March 28, 2015				March 29, 2014
			(millions)
	Restructuring and other charges:
	Restructuring charges:
	Wholesale-related		$	(13	)		$	(4	)		$	—
	Retail-related		(27		)		(4		)		—
	Licensing-related		(1		)		—				—
	Corporate operations-related		(54		)		(2		)		(8		)
	Unallocated restructuring charges		(95		)		(10		)		(8		)
	Other charges (see Note 11)		(48		)		—				(10		)
	Total unallocated restructuring and other charges		$	(143	)		$	(10	)		$	(18	)

The following tables summarize the Company's depreciation and amortization expense and capital expenditures for each of its reportable segments:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Depreciation and amortization:
Wholesale		$	61			$	66			$	66
Retail		157				154				125
Licensing		1				—				—
Unallocated corporate		91				74				67
Total depreciation and amortization		$	310			$	294			$	258

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Capital expenditures:
Wholesale		$	43			$	48			$	53
Retail		173				237				252
Licensing		4				4				1
Unallocated corporate		198				102				84
Total capital expenditures		$	418			$	391			$	390

	F-49

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes total assets for each of the Company's reportable segments:

		April 2, 2016				March 28, 2015
		(millions)
Total assets:
Wholesale		$	2,569			$	2,643
Retail		2,540				2,395
Licensing		188				197
Corporate		916				871
Total assets		$	6,213			$	6,106

Net revenues and long-lived assets by geographic location of the reporting subsidiary are as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Net revenues(a):
The Americas(b)		$	4,938			$	5,077			$	4,983
Europe(c)		1,573				1,627				1,580
Asia(d)		894				916				887
Total net revenues		$	7,405			$	7,620			$	7,450

		April 2, 2016				March 28, 2015
		(millions)
Long-lived assets(a):
The Americas(b)		$	1,206			$	1,106
Europe(c)		212				148
Asia(d)		165				182
Total long-lived assets		$	1,583			$	1,436

(a)	Net revenues and long-lived assets for certain of the Company's licensed operations are included within the geographic location of the reporting subsidiary which holds the respective license.

(b)	Includes the U.S., Canada, and Latin America. Net revenues earned in the U.S. were $4.688 billion, $4.827 billion, and $4.744 billion in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. Long-lived assets located in the U.S. were $1.160 billion and $1.069 billion as of April 2, 2016 and March 28, 2015, respectively.

(c)	Includes the Middle East.

(d)	Includes Australia and New Zealand.

	F-50

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

22.	Additional Financial Information

Cash Interest and Taxes

Cash paid for interest and income taxes is as follows:

		Fiscal Years Ended
		April 2, 2016				March 28, 2015				March 29, 2014
		(millions)
Cash paid for interest		$	15			$	15			$	20
Cash paid for income taxes		$	172			$	317			$	302

Non-cash Transactions

Non-cash investing activities included capital expenditures incurred but not yet paid of $65 million, $62 million, and $45 million as of the end of Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively.

Additionally, during Fiscal 2016, the Company recorded capital lease assets and corresponding capital lease obligations of $49 million within its consolidated balance sheet. During Fiscal 2014, the Company recorded a capital lease asset and a corresponding capital lease obligation of $230 million within its consolidated balance sheet in connection with the lease for the Polo flagship store in New York City (see Note 16).

Non-cash investing activities in Fiscal 2015 also included the capitalization of a fixed asset, for which a $19 million non-binding advance payment was made during Fiscal 2014 and recorded within prepaid expenses and other current assets as of March 29, 2014.

There were no other significant non-cash investing or financing activities for any of the fiscal years presented.

	F-51

MANAGEMENT'S REPORT ON RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of Ralph Lauren Corporation is responsible for the preparation, objectivity, and integrity of the consolidated financial statements and other information contained in this Annual Report. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and include some amounts that are based on management's informed judgments and best estimates.

These consolidated financial statements have been audited by Ernst & Young LLP in Fiscal 2016, Fiscal 2015, and Fiscal 2014, which is an independent registered public accounting firm. They conducted their audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and have expressed herein their unqualified opinions on those financial statements.

The Audit Committee of the Board of Directors, which oversees all of the Company's financial reporting process on behalf of the Board of Directors, consists solely of independent directors, meets with the independent registered accountants, internal auditors, and management periodically to review their respective activities and the discharge of their respective responsibilities. Both the independent registered public accountants and the internal auditors have unrestricted access to the Audit Committee, with or without management, to discuss the scope and results of their audits and any recommendations regarding the system of internal controls.

May 19, 2016

/s/ STEFAN LARSSON		/s/ ROBERT L. MADORE
Stefan Larsson		Robert L. Madore
President and Chief Executive Officer		Corporate Senior Vice President and Chief Financial Officer
(Principal Executive Officer)		(Principal Financial and Accounting Officer)

	F-52

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Ralph Lauren Corporation

We have audited the accompanying consolidated balance sheets of Ralph Lauren Corporation and subsidiaries (the "Company") as of April 2, 2016 and March 28, 2015, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended April 2, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Ralph Lauren Corporation and subsidiaries at April 2, 2016 and March 28, 2015, and the consolidated results of their operations and their cash flows for each of the three years in the period ended April 2, 2016, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of April 2, 2016, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 19, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

New York, New York

May 19, 2016

	F-53

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Ralph Lauren Corporation

We have audited Ralph Lauren Corporation and subsidiaries' (the "Company's") internal control over financial reporting as of April 2, 2016, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 2, 2016, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of April 2, 2016 and March 28, 2015, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended April 2, 2016 of the Company, and our report dated May 19, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

New York, New York

May 19, 2016

	F-54

RALPH LAUREN CORPORATION

SELECTED FINANCIAL INFORMATION

The following table sets forth selected historical financial information as of the dates and for the periods indicated.

The consolidated statement of income data for each of the three fiscal years in the period ended April 2, 2016, as well as the consolidated balance sheet data as of April 2, 2016 and March 28, 2015 have been derived from, and should be read in conjunction with, the audited financial statements, footnotes and other financial information presented elsewhere herein. The consolidated statements of income data for the fiscal years ended March 30, 2013 and March 31, 2012 and the consolidated balance sheet data at March 29, 2014, March 30, 2013, and March 31, 2012 have been derived from audited financial statements not included herein. Capitalized terms are as defined and described in the consolidated financial statements or elsewhere herein. The historical results are not necessarily indicative of the results to be expected in any future period.

		Fiscal Years Ended(a)
		April 2, 2016				March 28, 2015				March 29, 2014(b)				March 30, 2013(c)				March 31, 2012
		(millions, except per share data)
Statement of Income Data:
Net revenues:
Net sales		$	7,230			$	7,451			$	7,284			$	6,763			$	6,679
Licensing revenue		175				169				166				182				181
Net revenues		7,405				7,620				7,450				6,945				6,860
Gross profit		4,187				4,378				4,310				4,156				3,998
Depreciation and amortization expense		(310		)		(294		)		(258		)		(233		)		(225		)
Impairment of assets		(49		)		(7		)		(1		)		(19		)		(2		)
Restructuring and other charges		(143		)		(10		)		(18		)		(12		)		(12		)
Operating income		582				1,035				1,130				1,127				1,039
Interest expense, net		(15		)		(11		)		(17		)		(16		)		(13		)
Net income		$	396			$	702			$	776			$	750			$	681
Net income per common share:
Basic		$	4.65			$	7.96			$	8.55			$	8.21			$	7.35
Diluted		$	4.62			$	7.88			$	8.43			$	8.00			$	7.13
Weighted average common shares outstanding:
Basic		85.2				88.2				90.7				91.3				92.7
Diluted		85.9				89.1				92.0				93.7				95.5
Dividends declared per common share		$	2.00			$	1.85			$	1.70			$	1.60			$	0.80

(a)	Fiscal 2016 consisted of 53 weeks. All other fiscal years presented consisted of 52 weeks.

(b)	Reflects the Chaps Menswear License Acquisition effective in April 2013, which resulted in the recognition of a $16 million gain on acquisition, as well as the Australia and New Zealand Licensed Operations Acquisition effective in July 2013 (see Note 5 to the accompanying audited consolidated financial statements).

(c)	Reflects the acquisition of the Ralph Lauren-branded business in Latin America effective in June 2012, the discontinuance of the majority of products sold under the American Living brand effective with the Fall 2012 wholesale selling season, and the wind down of the Rugby brand operations during the second half of the fiscal year.

	F-55

RALPH LAUREN CORPORATION

SELECTED FINANCIAL INFORMATION (Continued)

		April 2, 2016				March 28, 2015				March 29, 2014				March 30, 2013				March 31, 2012
		(millions)
Balance Sheet Data:
Cash and cash equivalents		$	456			$	500			$	797			$	974			$	672
Investments		816				652				490				406				616
Working capital(a)		1,855				2,138				2,359				1,842				1,954
Total assets		6,213				6,106				6,088				5,418				5,416
Total debt (including current maturities of debt)		713				532				298				267				274
Equity		3,744				3,891				4,034				3,785				3,653

(a)

Working capital is calculated as total current assets less total current liabilities (including current maturities of debt). Working capital as of April 2, 2016 reflects the Company's adoption of ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes," which requires all deferred tax assets and liabilities, together with any related valuation allowances, to be classified as non-current on the consolidated balance sheet. Prior periods were not retrospectively adjusted (see Note 4 to the accompanying audited consolidated financial statements).

	F-56

RALPH LAUREN CORPORATION

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table sets forth the quarterly financial information of the Company:

		Quarterly Periods Ended(a)(b)
		June 27, 2015				September 26, 2015				December 26, 2015				April 2, 2016(c)
		(millions, except per share data)
Net revenues		$	1,618			$	1,970			$	1,946			$	1,871
Gross profit		966				1,113				1,094				1,014
Net income		64				160				131				41
Net income per common share(d):
Basic		$	0.74			$	1.87			$	1.55			$	0.49
Diluted		$	0.73			$	1.86			$	1.54			$	0.49
Dividends declared per common share		$	0.50			$	0.50			$	0.50			$	0.50
		Quarterly Periods Ended(a)
		June 28, 2014				September 27, 2014				December 27, 2014				March 28, 2015
		(millions, except per share data)
Net revenues		$	1,708			$	1,994			$	2,033			$	1,885
Gross profit		1,043				1,132				1,159				1,044
Net income		162				201				215				124
Net income per common share(d):
Basic		$	1.82			$	2.27			$	2.44			$	1.43
Diluted		$	1.80			$	2.25			$	2.41			$	1.41
Dividends declared per common share		$	0.45			$	0.45			$	0.45			$	0.50

(a)	The fourth quarter of Fiscal 2016 consisted of 14 weeks. All other fiscal quarters presented consisted of 13 weeks.

(b)

Net income and net income per common share for the three-month periods ended June 27, 2015, September 26, 2015, December 26, 2015, and April 2, 2016 have been affected by pretax charges of $45 million, $38 million, $77 million, and $52 million, respectively, recorded in connection with the Global Reorganization Plan, a pending customs audit, the settlement of certain litigation claims, and other non-cash impairment charges related to underperforming stores subject to potential future closure (see Notes 10 and 11 to the accompanying audited consolidated financial statements).

(c)	The inclusion of the 14th week in the fourth quarter of Fiscal 2016 resulted in incremental net revenues of approximately $72 million and net income of $8 million, or approximately $0.10 per diluted share.

(d)	Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average number of common shares outstanding during each period.

	F-57