Item 15. Exhibits, Financial Statement Schedules.

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Item 15. Exhibits, Financial Statement Schedules.

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

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			Fourth Amended and Restated By-laws of the Company (filed as Exhibit 3.3 to the Form 10-Q for the quarterly period ended July 1, 2017)
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 filed September 26, 2013)
4.2			Second Supplemental Indenture, dated as of August 18, 2015, by and between the Company and Wells Fargo Bank, National Association (filed as Exhibit 4.2 to the Form 8-K filed August 18, 2015)
4.3			Third Supplemental Indenture, dated as of August 9, 2018, by and between Ralph Lauren Corporation and Wells Fargo Bank, National Association (filed as Exhibit 4.2 to the Form 8-K filed August 9, 2018)
4.4			Fourth Supplemental Indenture, dated as of June 3, 2020, by and between Ralph Lauren Corporation and Wells Fargo Bank, National Association (filed as Exhibit 4.2 to the Form 8-K filed June 4, 2020)
4.5			Description of Securities Registered Under Section 12 of the Exchange Act (filed as Exhibit 4.4 to the Form 10-K for the fiscal year ended March 28, 2020 (the "Fiscal 2020 10-K"))
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, effective as of April 2, 2017, between the Company and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K filed March 31, 2017)†
10.4			Amendment No. 1 to the Amended and Restated Employment Agreement, dated June 16, 2020, between the Company and Ralph Lauren (filed as Exhibit 10.1 to the Form 10-Q filed August 4, 2020)†
10.5			Employment Agreement, dated May 13, 2017, between the Company and Patrice Louvet (filed as Exhibit 10.1 to the Form 8-K filed May 17, 2017)†
10.6			Amendment No. 1 to the Employment Agreement, dated June 30, 2017, between the Company and Patrice Louvet (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended July 1, 2017)†
10.7			Amendment No. 2 to the Employment Agreement, dated June 17, 2020, between the Company and Patrice Louvet (filed as Exhibit 10.2 to the Form 10-Q filed August 4, 2020)†


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Exhibit Number			Description
10.8			Amended and Restated Employment Agreement, effective as of April 4, 2016, between the Company and Valérie Hermann (filed as Exhibit 10.1 to the Form 8-K filed May 4, 2016)†
10.9			Amendment No. 1 to the Amended and Restated Employment Agreement, dated as of November 9, 2016, between the Company and Valérie Hermann (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended October 1, 2016)†
10.10			Employment Separation Agreement and Release, between the Company and Valérie Hermann (filed as Exhibit 10.1 to the Form 8-K filed July 19, 2019)†
10.11			Amendment No. 1 to the Employment Separation Agreement and Release, effective as of November 6, 2019, between the Company and Valérie Hermann (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended September 28, 2019)†
10.12			Amended and Restated Employment Agreement, dated February 28, 2019, between the Company and Jane Nielsen (filed as Exhibit 10.1 to the Form 8-K filed March 1, 2019)†
10.13			Amendment No. 1 to the Amended and Restated Employment Agreement, dated June 17, 2020, between the Company and Jane Nielsen (filed as Exhibit 10.3 to the Form 10-Q filed August 4, 2020)†
10.14			Amended and Restated Employment Agreement, effective as of March 31, 2019, between the Company and Howard Smith (filed as Exhibit 10.11 to the Fiscal 2020 10-K)†
10.15			Restricted Stock Unit Award Agreement, dated as of June 8, 2004, between the Company and Ralph Lauren (filed as Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal year ended April 2, 2005)†
10.16			Executive Officer Annual Incentive Plan, as amended as of August 10, 2017 (filed as Exhibit 10.2 to the Form 10-Q for the quarterly period ended July 1, 2017)†
10.17			Executive Officer Annual Incentive Plan, as amended as of May 20, 2020 (filed as Exhibit 10.14 to the Fiscal 2020 10-K)†
10.18			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 filed October 4, 2004)†
10.19			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)†
10.20			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)†
10.21			Amended and Restated 2010 Long-Term Incentive Plan, amended as of August 11, 2016 (filed as Exhibit 10.4 to the Form 10-Q for the quarterly period ended July 2, 2016)†
10.22			2019 Long-Term Stock Incentive Plan (filed as Appendix C to the Company's Definitive Proxy Statement dated June 21, 2019)†
10.23			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 Company's Annual Report on Form 10-K for the fiscal year ended March 29, 2014 (the "Fiscal 2014 10-K"))†
10.24			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)†
10.25			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)†
10.26			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)†
10.27			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 Company's Annual Report on Form 10-K for the fiscal year ended March 28, 2015 (the "Fiscal 2015 10-K"))†
10.28			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)†
10.29			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 for the quarterly period ended June 27, 2015)†
10.30			Performance Share Unit Award Overview containing the standard terms of performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended September 30, 2017)†


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Exhibit Number			Description
10.31			Performance-Based Restricted Stock Unit - Award Notification containing the standard terms of performance-based restricted stock unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.2 to the Form 10-Q for the quarterly period ended September 30, 2017)†
10.32			Restricted Stock Unit Overview containing the standard terms of restricted stock unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.3 to the Form 10-Q for the quarterly period ended September 30, 2017)†
10.33			Performance Share Unit Award Overview containing the standard terms of performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended December 29, 2018)†
10.34			Performance-Based Restricted Stock Unit - Award Notification containing the standard terms of performance-based restricted stock unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.2 to the Form 10-Q for the quarterly period ended December 29, 2018)†
10.35			Restricted Stock Unit Overview containing the standard terms of restricted stock unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.3 to the Form 10-Q for the quarterly period December 29, 2018)†
10.36			Performance Share Unit Award Overview containing the standard terms of performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.2 to the Form 10-Q for the quarterly period ended June 29, 2019)†
10.37			One-time Fiscal 2020 Performance Share Unit - Award Notification containing the standard terms of the one-time Fiscal 2020 performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.3 to the Form 10-Q for the quarterly period ended June 29, 2019)†
10.38			Restricted Stock Unit Overview containing the standard terms of restricted stock unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.4 to the Form 10-Q for the quarterly period ended June 29, 2019)†
10.39			Performance Share Unit Award Overview containing the standard terms of performance share unit awards under the 2019 Long-Term Stock Incentive Plan (filed as Exhibit 10.2 to the Form 10-Q for the quarterly period ended September 28, 2019)†
10.40			Form of Performance-Based Restricted Stock Unit Award Notification under the 2019 Long-Term Stock Incentive Plan (filed as Exhibit 10.3 to the Form 10-Q for the quarterly period ended September 28, 2019)†
10.41			Restricted Stock Unit Overview containing the standard terms of restricted stock unit awards under the 2019 Long-Term Stock Incentive Plan (filed as Exhibit 10.4 to the Form 10-Q for the quarterly period ended September 28, 2019)†
10.42			Form of Non-Employee Director Restricted Stock Unit Award Agreement under the 2019 Long-Term Stock Incentive Plan (filed as Exhibit 10.5 to the Form 10-Q for the quarterly period ended September 28, 2019)†
10.43			Form of Non-Employee Director Restricted Stock Unit Award Agreement under the 2019 Long-Term Stock Incentive Plan (filed as Exhibit 10.1 to the Form 10-Q filed November 5, 2020)†
10.44			Form of Cliff Restricted Stock Award Agreement under the 2019 Long-Term Stock Incentive Plan (filed as Exhibit 10.2 to the Form 10-Q filed November 5, 2020)†
10.45			Form of Pro-Rata Restricted Stock Unit Award Agreement under the 2019 Long-Term Stock Incentive Plan (filed as Exhibit 10.3 to the Form 10-Q filed November 5, 2020)†
10.46			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)†
10.47			Credit Agreement, dated as of August 12, 2019 and as amended by the First Amendment, dated as of May 26, 2020, among the Company, Ralph Lauren Europe Sàrl, RL Finance 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., ING Bank N.V., Dublin Branch, and Deutsche Bank Securities Inc., as co-documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.41 to the Fiscal 2020 10-K)
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 and available, as amended, on the Company's Internet site)
14.2			Code of Business Conduct and Ethics of the Company (filed as Exhibit 14.1 to the Form 10-Q for the quarterly period ended June 27, 2015 and available, as amended, on the Company's Internet site)
21.1*			List of Subsidiaries of the Company
23.1*			Consent of Ernst & Young LLP
31.1*			Certification of Principal Executive Officer pursuant to 17 CFR 240.13a-14(a)
31.2*			Certification of Principal Financial Officer pursuant to 17 CFR 240.13a-14(a)


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Exhibit Number			Description
32.1*			Certification of Principal Executive Officer 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 Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*			XBRL Taxonomy Extension Schema Document.
101.CAL*			XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*			XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*			XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*			XBRL Taxonomy Extension Presentation Linkbase Document.

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.


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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/ JANE HAMILTON NIELSEN
		Jane Hamilton Nielsen
		Chief Operating Officer and Chief Financial Officer
		(Principal Financial and Accounting Officer)
Date: May 20, 2021

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 20, 2021
Ralph Lauren

/S/ PATRICE LOUVET	President, Chief Executive Officer, and Director (Principal Executive Officer)	May 20, 2021
Patrice Louvet

/S/ JANE HAMILTON NIELSEN	Chief Operating Officer and Chief Financial Officer (Principal Financial and Accounting Officer)	May 20, 2021
Jane Hamilton Nielsen

/s/ DAVID LAUREN	Vice Chairman, Chief Innovation Officer, Strategic Advisor to the CEO, and Director	May 20, 2021
David Lauren

/s/ ANDREW HOWARD SMITH	Chief Commercial Officer and Director	May 20, 2021
Andrew Howard Smith

/S/ ANGELA AHRENDTS	Director	May 20, 2021
Angela Ahrendts

/S/ JOHN R. ALCHIN	Director	May 20, 2021
John R. Alchin

/S/ FRANK A. BENNACK, JR.	Director	May 20, 2021
Frank A. Bennack, Jr.

/S/ JOEL L. FLEISHMAN	Director	May 20, 2021
Joel L. Fleishman

/s/ MICHAEL A. GEORGE	Director	May 20, 2021
Michael A. George


			82


Signature	Title	Date

/S/ VALERIE JARRETT	Director	May 20, 2021
Valerie Jarrett

/S/ HUBERT JOLY	Director	May 20, 2021
Hubert Joly

/S/ LINDA FINDLEY KOZLOWSKI	Director	May 20, 2021
Linda Findley Kozlowski

/S/ JUDITH MCHALE	Director	May 20, 2021
Judith McHale

/S/ DARREN WALKER	Director	May 20, 2021
Darren Walker


			83

RALPH LAUREN CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


						Page
Consolidated Financial Statements:
Consolidated Balance Sheets						F-2
Consolidated Statements of Operations						F-3
Consolidated Statements of Comprehensive Inco me (L oss)						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-58
Reports of Independent Registered Public Accounting Firm						F-59


			F-1

RALPH LAUREN CORPORATION

CONSOLIDATED BALANCE SHEETS


	March 27, 2021		March 28, 2020
	(millions)
ASSETS
Current assets:
Cash and cash equivalents	$	2,579.0	$	1,620.4
Short-term investments	197.5		495.9
Accounts receivable, net of allowances of $213.8 million and $276.2 million	451.5		277.1
Inventories	759.0		736.2
Income tax receivable	54.4		84.8
Prepaid expenses and other current assets	166.6		160.8
Total current assets	4,208.0		3,375.2
Property and equipment, net	1,014.0		979.5
Operating lease right-of-use assets	1,239.5		1,511.6
Deferred tax assets	283.9		245.2
Goodwill	934.6		915.5
Intangible assets, net	121.1		141.0
Other non-current assets	86.4		111.9
Total assets	$	7,887.5	$	7,279.9
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	—	$	475.0
Current portion of long-term debt	—		299.6
Accounts payable	355.9		246.8
Income tax payable	50.6		65.1
Current operating lease liabilities	302.9		288.4
Accrued expenses and other current liabilities	875.4		717.1
Total current liabilities	1,584.8		2,092.0
Long-term debt	1,632.9		396.4
Long-term operating lease liabilities	1,294.5		1,568.3
Income tax payable	118.7		132.7
Non-current liability for unrecognized tax benefits	91.4		88.9
Other non-current liabilities	560.8		308.5
Commitments and contingencies (Note 15)
Total liabilities	5,283.1		4,586.8
Equity:
Class A common stock, par value $.01 per share; 106.1 million and 104.9 million shares issued; 48.3 million and 47.6 million shares outstanding	1.0		1.0
Class B common stock, par value $.01 per share; 24.9 million issued and outstanding	0.3		0.3
Additional paid-in-capital	2,667.1		2,594.4
Retained earnings	5,872.9		5,994.0
Treasury stock, Class A, at cost; 57.8 million and 57.3 million shares	(5,816.1)		(5,778.4)
Accumulated other comprehensive loss	(120.8)		(118.2)
Total equity	2,604.4		2,693.1
Total liabilities and equity	$	7,887.5	$	7,279.9

See accompanying notes.


			F-2

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions, except per share data)
Net revenues	$	4,400.8	$	6,159.8	$	6,313.0
Cost of goods sold	(1,539.4)		(2,506.5)		(2,427.0)
Gross profit	2,861.4		3,653.3		3,886.0
Selling, general, and administrative expenses	(2,638.5)		(3,237.5)		(3,168.3)
Impairment of assets	(96.0)		(31.6)		(25.8)
Restructuring and other charges	(170.5)		(67.2)		(130.1)
Total other operating expenses, net	(2,905.0)		(3,336.3)		(3,324.2)
Operating income (loss)	(43.6)		317.0		561.8
Interest expense	(48.5)		(17.6)		(20.7)
Interest income	9.7		34.4		40.8
Other income (expense), net	7.6		(7.4)		0.6
Income (loss) before income taxes	(74.8)		326.4		582.5
Income tax benefit (provision)	(46.3)		57.9		(151.6)
Net income (loss)	$	(121.1)	$	384.3	$	430.9

Net income (loss) per common share:
Basic	$	(1.65)	$	5.07	$	5.35
Diluted	$	(1.65)	$	4.98	$	5.27
Weighted-average common shares outstanding:
Basic	73.5		75.8		80.6
Diluted	73.5		77.2		81.7
Dividends declared per share	$	—	$	2.75	$	2.50

See accompanying notes.


			F-3

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Net income (loss)	$	(121.1)	$	384.3	$	430.9
Other comprehensive income (loss), net of tax:
Foreign currency translation gains (losses)	7.2		(11.9)		(39.2)
Net gains (losses) on cash flow hedges	(13.4)		(2.2)		36.2
Net gains (losses) on defined benefit plans	3.6		(0.7)		(1.9)
Other comprehensive loss, net of tax	(2.6)		(14.8)		(4.9)
Total comprehensive income (loss)	$	(123.7)	$	369.5	$	426.0

See accompanying notes.


			F-4

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Cash flows from operating activities:
Net income (loss)	$	(121.1)	$	384.3	$	430.9
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	247.6		269.5		281.3
Deferred income tax expense (benefit)	35.6		(168.8)		8.5
Loss on sale of property	—		—		11.6
Non-cash stock-based compensation expense	72.7		100.6		88.6
Non-cash impairment of assets, including equity method investment	96.0		38.7		25.8
Bad debt expense (benefit)	(27.6)		58.7		0.4
Other non-cash charges (benefits)	1.8		(2.3)		6.5
Changes in operating assets and liabilities:
Accounts receivable	(143.0)		57.6		10.1
Inventories	3.7		72.3		(83.6)
Prepaid expenses and other current assets	5.2		58.2		(40.5)
Accounts payable and accrued liabilities	296.8		(64.3)		(4.7)
Income tax receivables and payables	(37.8)		(42.5)		29.7
Deferred income	(3.2)		—		(16.5)
Other balance sheet changes	(45.8)		(7.4)		35.7
Net cash provided by operating activities	380.9		754.6		783.8
Cash flows from investing activities:
Capital expenditures	(107.8)		(270.3)		(197.7)
Purchases of investments	(704.6)		(1,289.7)		(3,030.8)
Proceeds from sales and maturities of investments	1,007.2		2,240.4		2,357.5
Proceeds from sale of property	—		20.8		20.0
Settlement of net investment hedges	3.7		—		(23.8)
Other investing activities	(3.5)		0.9		(4.5)
Net cash provided by (used in) investing activities	195.0		702.1		(879.3)
Cash flows from financing activities:
Proceeds from credit facility borrowings	—		475.0		—
Repayments of credit facility borrowings	(475.0)		—		(9.9)
Proceeds from the issuance of long-term debt	1,241.9		—		398.1
Repayments of long-term debt	(300.0)		—		(300.0)
Payments of finance lease obligations	(13.9)		(13.6)		(19.6)
Payments of dividends	(49.8)		(203.9)		(190.7)
Repurchases of common stock, including shares surrendered for tax withholdings	(37.7)		(694.8)		(502.6)
Proceeds from exercise of stock options	—		—		21.8
Other financing activities	(8.7)		(0.9)		(2.8)
Net cash provided by (used in) financing activities	356.8		(438.2)		(605.7)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	25.5		(15.2)		(27.8)
Net increase (decrease) in cash, cash equivalents, and restricted cash	958.2		1,003.3		(729.0)
Cash, cash equivalents, and restricted cash at beginning of period	1,629.8		626.5		1,355.5
Cash, cash equivalents, and restricted cash at end of period	$	2,588.0	$	1,629.8	$	626.5

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 31, 2018	127.9	$	1.3	$	2,383.4	$	5,752.2	46.6	$	(4,581.0)	$	(98.5)	$	3,457.4
Comprehensive income:
Net income						430.9
Other comprehensive loss											(4.9)
Total comprehensive income													426.0
Dividends declared						(198.9)							(198.9)
Repurchases of common stock								4.1	(502.6)				(502.6)
Stock-based compensation				88.6									88.6
Shares issued pursuant to stock-based compensation plans	0.9	—		21.8									21.8
Cumulative adjustment from adoption of new accounting standards						(5.1)							(5.1)
Balance at March 30, 2019	128.8	$	1.3	$	2,493.8	$	5,979.1	50.7	$	(5,083.6)	$	(103.4)	$	3,287.2
Comprehensive income:
Net income						384.3
Other comprehensive loss											(14.8)
Total comprehensive income													369.5
Dividends declared						(204.9)							(204.9)
Repurchases of common stock								6.6	(694.8)				(694.8)
Stock-based compensation				100.6									100.6
Shares issued pursuant to stock-based compensation plans	1.0	—		—									—
Cumulative adjustment from adoption of new accounting standards						(164.5)							(164.5)
Balance at March 28, 2020	129.8	$	1.3	$	2,594.4	$	5,994.0	57.3	$	(5,778.4)	$	(118.2)	$	2,693.1
Comprehensive loss:
Net loss						(121.1)
Other comprehensive loss											(2.6)
Total comprehensive loss													(123.7)
Dividends declared						—							—
Repurchases of common stock								0.5	(37.7)				(37.7)
Stock-based compensation				72.7									72.7
Shares issued pursuant to stock-based compensation plans	1.2	—		—									—
Balance at March 27, 2021	131.0	$	1.3	$	2,667.1	$	5,872.9	57.8	$	(5,816.1)	$	(120.8)	$	2,604.4

**(a)**Includes Class A and Class B common stock. In Fiscal 2020, 1.0 million shares 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 16).

**(b)**Accumulated other comprehensive income (loss).

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, footwear, accessories, home furnishings, fragrances, and hospitality. RLC's long-standing reputation and distinctive image have been 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, Chaps, and Club Monaco, 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 diversifies its business by geography (North America, Europe, and Asia, among other regions) and channel of distribution (retail, wholesale, and licensing). This allows the Company to maintain a dynamic balance as its operating results do not depend solely on the performance of any single geographic area or channel of distribution. The Company sells directly to consumers through its integrated retail channel, which includes its retail stores, concession-based shop-within-shops, and digital commerce operations around the world. The Company's wholesale sales are made principally to major department stores, specialty stores, and third-party digital partners around the world, as well as to certain third-party-owned stores to which the Company has licensed the right to operate in defined geographic territories using its trademarks. In addition, the Company licenses to third parties for specified periods the right to access its various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings.

The Company organizes its business into the following three reportable segments: North America, Europe, and Asia. In addition to these reportable segments, the Company also has other non-reportable segments. See Note 20 for further discussion of the Company's segment reporting structure.

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 (loss), comprehensive income (loss), 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 immediately before or after March 31. As such, fiscal year 2021 ended on March 27, 2021 and was a 52-week period ("Fiscal 2021"); fiscal year 2020 ended on March 28, 2020 and was a 52-week period ("Fiscal 2020"); fiscal year 2019 ended on March 30, 2019 and was a 52-week period ("Fiscal 2019"); and fiscal year 2022 will end on April 2, 2022 and will be a 53-week period ("Fiscal 2022").

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 notes 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 forfeiture rates; and reserves for restructuring activity, among others.


			F-7

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reclassifications

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

COVID-19 Pandemic

Beginning in the fourth quarter of Fiscal 2020, a novel strain of coronavirus commonly referred to as COVID-19 emerged and spread rapidly across the globe, including throughout all major geographies in which the Company operates (North America, Europe, and Asia), resulting in adverse economic conditions and business disruptions, as well as significant volatility in global financial markets. Governments worldwide have imposed varying degrees of preventative and protective actions, such as temporary travel bans, forced business closures, and stay-at-home orders, all in an effort to reduce the spread of the virus. Such factors, among others, have resulted in a significant decline in retail traffic, tourism, and consumer spending on discretionary items. Additionally, during this period of uncertainty, companies across a wide array of industries have implemented various initiatives to reduce operating expenses and preserve cash balances, including work furloughs, reduced pay, and severance actions, which could lower consumers' disposable income levels or willingness to purchase discretionary items. Further, even after such government restrictions and company initiatives are lifted, consumer behavior, spending levels, and/or shopping preferences, such as willingness to congregate in indoor shopping centers or other populated locations, could be adversely affected.

As a result of the COVID-19 pandemic, the Company has experienced varying degrees of business disruptions and periods of closure of its stores, distribution centers, and corporate facilities, as have the Company's wholesale customers, licensing partners, suppliers, and vendors. During the first quarter of Fiscal 2021, the majority of the Company's stores in key markets were closed for an average of 8 to 10 weeks due to government-mandated lockdowns and other restrictions, resulting in significant adverse impacts to its operating results. Resurgences in certain parts of the world resulted in further business disruptions periodically throughout Fiscal 2021, most notably in Europe where a significant number of the Company's stores were closed for approximately two to three months during the second half of Fiscal 2021, including during the holiday period, due to government-mandated lockdowns and other restrictions. Such disruptions have continued into the first quarter of Fiscal 2022, impacting not only the Company's businesses in Europe but also in other regions of the world (notably the Company's retail operations in Japan and its sourcing operations in India). Further, the majority of the Company's stores that are able to remain open have periodically been subject to limited operating hours and/or customer capacity levels in accordance with local health guidelines, with traffic remaining challenged. The Company's wholesale and licensing businesses have also been adversely affected, particularly in North America and Europe, as a result of store closures and lower traffic and consumer demand.

Throughout the pandemic, the Company's priority has been to ensure the safety and well-being of its employees, customers, and the communities in which it operates around the world. The Company continues to consider the guidance of local governments and global health organizations and has implemented new health and safety protocols in its stores, distribution centers, and corporate facilities. The Company has also taken various preemptive actions to preserve cash and strengthen its liquidity position, including:

amending its Global Credit Facility in May 2020 to temporarily waive its leverage ratio requirement (see Note 11);
issuing $1.250 billion of unsecured senior notes in June 2020, the proceeds of which are being used for general corporate purposes, including repayment of certain of the Company's previously outstanding borrowings (see Note 11);
temporarily suspending its quarterly cash dividend and common stock repurchase program, effective beginning in the first quarter of Fiscal 2021 (see Note 16);
temporarily reducing the base compensation of its executives and senior management team, as well as its Board of Directors, for the first quarter of Fiscal 2021;
furloughing or reducing work hours for a significant portion of its employees during the first half of Fiscal 2021;


			F-8

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

carefully managing its expense structure across all key areas of spend, including aligning inventory levels with anticipated demand, negotiating rent abatements with certain of its landlords, and postponing non-critical capital build-out and other investments and activities;
pursuing relevant government subsidy programs related to COVID-19 business disruptions; and
improving upon its cash conversion cycle largely driven by its accounts receivable collection efforts and extended vendor payment terms.

Despite the introduction of COVID-19 vaccines, the pandemic remains highly volatile and continues to evolve. Accordingly, the Company cannot predict for how long and to what extent the pandemic will impact its business operations or the global economy as a whole. The Company will continue to assess its operations location-by-location, considering the guidance of local governments and global health organizations to determine when its operations can begin returning to normal levels of business.

3. Summary of Significant Accounting Policies

Revenue Recognition

The Company recognizes revenue across all channels of the business when it satisfies its performance obligations by transferring control of promised products or services to its customers, which occurs either at a point in time or over time, depending on when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services. The amount of revenue recognized considers terms of sale that create variability in the amount of consideration that the Company ultimately expects to be entitled to in exchange for the products or services, and is subject to an overall constraint that a significant revenue reversal will not occur in future periods. Sales and other related taxes collected from customers and remitted to government authorities are excluded from revenue.

Revenue from the Company's retail business is recognized when the customer takes physical possession of the products, which occurs either at the point of sale for merchandise purchased at the Company's own retail stores and shop-within-shop locations, or upon receipt of shipment for merchandise ordered through direct-to-consumer digital commerce sites. Such revenues are recorded net of estimated returns based on historical trends. Payment is due at the point of sale.

Gift cards purchased by customers are recorded as a liability until they are redeemed for products sold by the Company's retail business, at which point revenue is recognized. The Company also estimates and recognizes revenue for gift card balances not expected to ever be redeemed (referred to as "breakage") to the extent that it does not have a legal obligation to remit the value of such unredeemed gift cards to the relevant jurisdiction as unclaimed or abandoned property. Such estimates are based upon historical redemption trends, with breakage income recognized in proportion to the pattern of actual customer redemptions.

Revenue from the Company's wholesale business is generally recognized upon shipment of products, at which point title passes and risk of loss is transferred to the customer. In certain arrangements where the Company retains the risk of loss during shipment, revenue is recognized upon receipt of products by the customer. 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 amounts have not differed materially from actual results.

Revenue from the Company's licensing arrangements is recognized over time during the period that licensees are provided access to the Company's trademarks (i.e., symbolic intellectual property) and benefit from such access through their own sales of licensed products. These arrangements require licensees to pay a sales-based royalty, which for most arrangements may be subject to a contractually-guaranteed minimum royalty amount. Payments are generally due quarterly and, depending on time of receipt, may be recorded as a liability until recognized as revenue. The Company recognizes revenue for sales-based royalty arrangements (including those for which the royalty exceeds any contractually-guaranteed minimum royalty amount) as licensed products are sold by the licensee. If a sales-based royalty is not ultimately expected to exceed a contractually-


			F-9

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

guaranteed minimum royalty amount, the minimum is generally recognized as revenue ratably over the respective contractual period. This sales-based output measure of progress and pattern of recognition best represents the value transferred to the licensee over the term of the arrangement, as well as the amount of consideration that the Company is entitled to receive in exchange for providing access to its trademarks. As of March 27, 2021, contractually-guaranteed minimum royalty amounts expected to be recognized as revenue during future periods were as follows:


	Contractually-Guaranteed Minimum Royalties(a)
	(millions)
Fiscal 2022	$	94.8
Fiscal 2023	73.4
Fiscal 2024	39.1
Fiscal 2025	11.5
Fiscal 2026	11.5
Fiscal 2027 and thereafter	12.1
Total	$	242.4

**(a)**Amounts presented do not contemplate potential contract renewals or royalties earned in excess of the contractually-guaranteed minimums.

Disaggregated Net Revenues

The following tables disaggregate the Company's net revenues into categories that depict how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors for the fiscal periods presented:


	Fiscal Year Ended
	March 27, 2021
	North America		Europe		Asia		Other		Total
	(millions)
Sales Channel(a):
Retail	$	1,214.1	$	517.1	$	968.4	$	80.2	$	2,779.8
Wholesale	778.3		648.8		59.1		12.4		1,498.6
Licensing	—		—		—		122.4		122.4
Total	$	1,992.4	$	1,165.9	$	1,027.5	$	215.0	$	4,400.8


	Fiscal Year Ended
	March 28, 2020
	North America		Europe		Asia		Other		Total
	(millions)
Sales Channel(a):
Retail	$	1,727.3	$	874.6	$	948.0	$	191.0	$	3,740.9
Wholesale	1,413.2		757.6		69.2		10.8		2,250.8
Licensing	—		—		—		168.1		168.1
Total	$	3,140.5	$	1,632.2	$	1,017.2	$	369.9	$	6,159.8


			F-10

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Fiscal Year Ended
	March 30, 2019
	North America		Europe		Asia		Other		Total
	(millions)
Sales Channel(a):
Retail	$	1,688.5	$	881.1	$	969.9	$	208.3	$	3,747.8
Wholesale	1,514.4		801.9		71.1		5.1		2,392.5
Licensing	—		—		—		172.7		172.7
Total	$	3,202.9	$	1,683.0	$	1,041.0	$	386.1	$	6,313.0

**(a)**Net revenues from the Company's retail and wholesale businesses are recognized at a point in time. Net revenues from the Company's licensing business are recognized over time.

Deferred Income

Deferred income represents cash payments received in advance of the Company's transfer of control of products or services to its customers and generally consists of unredeemed gift cards (net of breakage) and advance royalty payments from licensees. The Company's deferred income balances were $12.1 million and $14.6 million as of March 27, 2021 and March 28, 2020, respectively, and were primarily recorded within accrued expenses and other current liabilities within the consolidated balance sheets. During Fiscal 2021, the Company recognized $10.0 million of net revenues from amounts recorded as deferred income as of March 28, 2020. The majority of the deferred income balance as of March 27, 2021 is expected to be recognized as revenue within the next twelve months.

Cost of Goods Sold and Selling Expenses

Cost of goods sold includes the amounts incurred to acquire and produce inventory for sale to the Company's customers, 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 and qualifying 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 operations.

Shipping and Handling Costs

Costs associated with shipping goods to customers are accounted for as fulfillment activities and reflected as SG&A expenses in the consolidated statements of operations. Shipping and handling costs (described above) billed to customers are included in revenue. A summary of shipping and handling costs recognized during the fiscal periods presented is as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Shipping costs	$	54.8	$	46.7	$	49.1
Handling costs	138.3		154.0		153.1


			F-11

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Advertising and Marketing Costs

Advertising costs, including the costs to produce advertising, are expensed when the advertisement is first exhibited. Advertising costs paid to wholesale customers under cooperative advertising programs are not included in advertising costs, but rather are reflected as a reduction of revenue since generally the benefits are not sufficiently separable from the purchases of the 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 were $265.0 million, $278.0 million, and $272.8 million in Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively. Deferred advertising, marketing, and promotional costs, which principally relate to advertisements that have not yet been exhibited or payments made for services that have not yet been received, were $9.5 million and $10.1 million at the end of Fiscal 2021 and Fiscal 2020, respectively, 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 accounted for in their respective functional currencies, which are generally consistent with the local currency. For purposes of consolidation, local currency assets and liabilities are translated to U.S. Dollars at the spot rates of exchange prevailing 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 (loss) 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 balances that are denominated in a currency other than the respective entity's functional currency. Such foreign currency transactional gains and losses are recognized within other income (expense), net in the consolidated statements of operations, inclusive of the effects of any related hedging activities, and reflected net gains of $8.7 million in Fiscal 2021 and net losses of $1.1 million and $2.8 million in Fiscal 2020 and Fiscal 2019, respectively.

Comprehensive Income (Loss)

Comprehensive income (loss), which is reported in the consolidated statements of comprehensive income (loss) and consolidated statements of equity, consists of net income (loss) and certain other gains and losses affecting equity that, under U.S. GAAP, are excluded from net income (loss) and referred to as OCI. Components of OCI 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 (Loss) per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) 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 (loss) per common share adjusts basic net income (loss) per common share for the dilutive effects of outstanding restricted stock units ("RSUs"), stock options, and any other potentially dilutive instruments, only in the periods in which such effects are dilutive.


			F-12

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted-average number of common shares outstanding used to calculate basic net income (loss) per common share is reconciled to shares used to calculate diluted net income (loss) per common share as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020	March 30, 2019
	(millions)
Basic shares	73.5		75.8	80.6
Dilutive effect of RSUs and stock options	—	(a)	1.4	1.1
Diluted shares	73.5		77.2	81.7

**(a)**Incremental shares of 1.2 million attributable to outstanding RSUs were excluded from the computation of diluted shares for Fiscal 2021 as such shares would not be dilutive given the net loss incurred during the fiscal year.

All earnings per share amounts have been calculated using unrounded numbers. The Company has outstanding performance-based RSUs, which are included in the computation of diluted shares only to the extent that the underlying performance conditions (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. In addition, options to purchase shares of the Company's Class A common stock at an exercise price greater than the average market price of such common stock during the reporting period are anti-dilutive and therefore not included in the computation of diluted net income (loss) per common share. As of the end of Fiscal 2021, Fiscal 2020, and Fiscal 2019, there were 0.4 million, 0.8 million, and 1.4 million, respectively, of additional shares issuable contingent upon vesting of performance-based RSUs and upon exercise of anti-dilutive stock options that were excluded from the diluted shares 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 forfeitures which are estimated based on an analysis of historical experience and expected future trends. The grant date fair values of restricted stock awards, service-based RSUs, and performance-based RSUs 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 any awards for which dividend equivalent amounts do not accrue while outstanding and unvested. The grant date fair value of the Company's market-based RSU awards, for which vesting is dependent upon total shareholder return ("TSR") of its Class A common stock over a three-year performance period relative to that of a pre-established peer group, is estimated using a Monte Carlo simulation model. The Company uses the Black-Scholes valuation model to estimate the grant date fair value of any stock option awards.

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. Compensation expense for market-based RSUs, net of estimated forfeitures, is recognized over the requisite service period regardless of whether, and the extent to which, the market condition is ultimately satisfied. The Company recognizes compensation expense on an accelerated basis for all awards with graded vesting terms, including restricted stock, certain RSUs, and stock options. 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 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 18 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 time deposits and debt securities. Investments in debt securities are diversified across high-credit quality issuers in accordance with the Company's risk-management policies.


			F-13

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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, as well as to secure guarantees related to certain real estate leases. 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.

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 any time deposits and debt securities with original maturities greater than 90 days. Non-current investments, which are classified within other non-current assets in the consolidated balance sheets, consist of time deposits and debt securities which the Company does not expect to convert into cash within one year. See Note 13 for further information relating to the composition of the Company's investments.

The Company classifies such investments as available-for-sale. Accordingly, they are recorded at fair value with unrealized gains or losses generally recognized as a component of AOCI in the consolidated balance sheets, and related realized gains or losses (or unrealized credit-related impairment losses, if any) recorded within other income (expense), net, in the consolidated statements of operations. 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.

Equity-method Investments

Ownership interests that provide the Company with significant influence, but less than a controlling interest, over an investee are generally accounted for using the equity method of accounting. Significant influence is generally presumed to exist when the Company owns between 20% and 50% of the investee's common stock.

Under the equity method of accounting, the following amounts are generally recorded in the Company's consolidated financial statements: the Company's original investment, as subsequently adjusted for its share of the investee's earnings (losses) and reduced by any dividends received and other-than-temporary impairments recorded, is included in the consolidated balance sheets; the Company's share of the investee's periodic earnings (losses) is included in the consolidated statements of operations; and dividends and other cash distributions received from the investee and additional cash investments made in or other cash paid to the investee are included in the consolidated statements of cash flows.

The Company's share of equity-method investee earnings and losses is recognized within other income (expense), net, in the consolidated statements of operations, and reflected a net loss in Fiscal 2021 of $0.1 million and net gains of $0.1 million and $2.9 million in Fiscal 2020 and Fiscal 2019, respectively.

Impairment Assessment

The Company evaluates the need to recognize impairment charges for its investments that are in unrealized loss positions, if any, and its equity method investments on a quarterly basis (see Note 12). 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 or investees. Factors considered by the Company include (i) the financial condition, creditworthiness, and near-term prospects of the issuer or investee; (ii) future economic conditions and market forecasts; (iii) the length of time to maturity, if applicable, and 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; and (iv) whether events or changes in circumstances indicate that the investment's carrying amount might not be recoverable.

During Fiscal 2020, the Company recorded a $7.1 million impairment charge within other income (expense), net in the consolidated statements of operations related to an equity method investment (see Note 8).


			F-14

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounts Receivable

In the normal course of business, the Company extends credit to wholesale customers that satisfy defined credit criteria. Payment is generally due within 30 to 120 days and does not include a significant financing component. Accounts receivable is recorded at amortized cost, 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 as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Beginning reserve balance	$	204.7	$	176.5	$	202.5
Amount charged against revenue to increase reserve	280.1		580.1		543.8
Amount credited against customer accounts to decrease reserve	(317.4)		(550.3)		(563.0)
Foreign currency translation	6.3		(1.6)		(6.8)
Ending reserve balance	$	173.7	$	204.7	$	176.5

An allowance for doubtful accounts is determined through analysis of accounts receivable aging, assessments of collectability based on evaluation of historical trends, the financial condition of the Company's customers and their ability to withstand prolonged periods of adverse economic conditions, and evaluation of the impact of current and forecasted economic and market conditions over the related asset's contractual life, among other factors. The Company's allowance for doubtful accounts as of March 27, 2021 and March 28, 2020 reflects estimated impacts associated with COVID-19 business disruptions, which include declines in retail traffic, tourism, and consumer spending on discretionary items.

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


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Beginning reserve balance	$	71.5	$	15.7	$	19.7
Amount recorded to expense to increase (decrease) reserve(a)	(27.6)		58.7		0.4
Amount written-off against customer accounts to decrease reserve	(6.1)		(2.6)		(3.5)
Foreign currency translation	2.3		(0.3)		(0.9)
Ending reserve balance	$	40.1	$	71.5	$	15.7

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

Concentration of Credit Risk

The Company sells its wholesale merchandise primarily to major department stores, specialty stores, and third-party digital partners 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 2021, the Company's sales to its three largest wholesale customers accounted for approximately 14% of total net revenues. Substantially all of the Company's sales to its three largest wholesale customers related to its North America segment. As of March 27, 2021, these three key wholesale customers accounted for approximately 30% of total gross accounts receivable.


			F-15

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inventories

The Company holds inventory that is sold in its retail stores and digital commerce sites directly to consumers. The Company also holds inventory that is to be sold through wholesale distribution channels to major department stores, specialty stores, and third-party digital partners. Substantially all of the Company's inventories consist of finished goods, which are stated at the lower of cost or estimated realizable value, with cost 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 (such as those resulting from pandemic diseases and other catastrophic events), 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 actual economic and market conditions. In addition, 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 the realizable value of its inventory and its reserves for inventory shrinkage have not differed materially from actual results. However, unforeseen adverse future economic and market conditions could result in the Company's actual results differing materially from its estimates.

The Company's estimated realizable value of its inventory reflects adverse impacts associated with COVID-19 business disruptions, which include temporary closures of the Company's stores and those of its wholesale customers worldwide, as well as declines in retail traffic, tourism, and consumer spending on discretionary items.

Implementation Costs Incurred in Cloud Computing Arrangements

For cloud computing arrangements that are a service contract, the Company capitalizes certain implementation costs incurred (depending on their nature) during the application development stage of the related project, and expenses costs during the preliminary project and post-implementation stages as they are incurred. Capitalized implementation costs are expensed on a straight-line basis over the reasonably certain term of the hosting arrangement, beginning when the module is ready for its intended use. The Company's cloud computing arrangements relate to various areas, including certain retail store and digital commerce operations, and corporate and administrative functions. Capitalized amounts related to such arrangements are recorded within prepaid expenses and other current assets and within other non-current assets in the consolidated balance sheets (see Note 7). Capitalized implementation costs expensed were $8.4 million and $4.3 million during Fiscal 2021 and Fiscal 2020, respectively, and were recorded in SG&A expenses in the consolidated statements of operations. The Company did not incur any capitalized implementation costs during Fiscal 2019.

See Note 4 for discussion of the Company's adoption of a new accounting standard related to implementation costs incurred in connection with cloud computing arrangements that are a service contract as of the beginning of Fiscal 2021.

Property and Equipment, Net

Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis, 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 (see Note 12). 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 its use of the asset and its eventual disposition, where applicable. If such estimated future undiscounted net cash flows attributable to the asset are less than its carrying value, an impairment loss is recognized to the extent that such asset's carrying value exceeds its fair value, as estimated considering external market participant assumptions and discounted cash flows. Assets to be disposed of and for which there is a committed plan of disposal (commonly referred to as assets held-for-sale) are reported at the lower of carrying value or fair value, less costs to sell.


			F-16

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Leases

The Company's lease arrangements primarily relate to real estate, including its retail stores, concession-based shop-within-shops, corporate offices, and warehouse facilities and, to a lesser extent, certain equipment and other assets. The Company's leases generally have initial terms ranging from three to fifteen years and may include renewal or early-termination options, rent escalation clauses, and/or lease incentives in the form of construction allowances and rent abatements. The Company is typically required to make fixed minimum rent payments, variable rent payments based on performance (e.g., percentage-of-sales-based payments), or a combination thereof, relating to its right to use an underlying leased asset. The Company is also often required to pay for certain other costs that do not relate specifically to its right to use an underlying leased asset, but that are associated with the asset, including real estate taxes, insurance, common area maintenance fees, and/or certain other costs (referred to collectively herein as "non-lease components"), which may be fixed or variable in amount, depending on the terms of the respective lease agreement. The Company's leases do not contain significantly restrictive covenants or residual value guarantees.

The Company determines whether an arrangement contains a lease at the arrangement's inception. If a lease is determined to exist, its related term is assessed at the lease commencement date, once the underlying asset is made available by the lessor for the Company's use. The Company's assessment of the lease term reflects the non-cancellable period of the lease, inclusive of any rent-free periods, plus any periods covered by early-termination options for which the Company is not considered reasonably certain of exercising, as well as periods covered by renewal options for which it is considered reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation thereof in the consolidated statements of operations over the lease term.

For leases with a lease term exceeding 12 months, a liability is recorded on the Company's consolidated balance sheet at the lease commencement date reflecting the present value of its related fixed payment obligations over such term. A corresponding right-of-use ("ROU") asset equal to the initial lease liability is also recorded, increased by any prepaid rent and/or initial direct costs incurred in connection with execution of the lease, and reduced by any incentives provided by the lessor. The Company also includes fixed payment obligations related to non-lease components in the measurement of its ROU assets and lease liabilities, given its election to account for lease and non-lease components together as a single lease component. Variable lease payments are not included in the measurement of ROU assets and lease liabilities. ROU assets associated with finance leases are presented separately from those associated with operating leases, and are included within property and equipment, net on the Company's consolidated balance sheet. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, given that rates implicit in its leasing arrangements are not readily determinable. The Company's incremental borrowing rate reflects the rate it would pay to borrow on a secured basis an amount equal to the lease payments and incorporates the term and economic environment of the lease.

For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases, the initial ROU asset is depreciated on a straight-line basis over the lease term, along with recognition of interest expense associated with accretion of the remaining lease liability, which is ultimately reduced by the related fixed payments as they are made. For leases with a lease term of 12 months or less (referred to as a "short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term and are not recognized on the consolidated balance sheet. For all leases, variable lease cost, if any, is recognized as incurred.

ROU assets, along with any related long-lived assets, are periodically evaluated for impairment whenever events or circumstances indicate that their carrying values may not be fully recoverable (see Note 12). To the extent that such assets are ultimately determined to be impaired, they are written down accordingly on a relative carrying amount basis, with the ROU asset written down to an amount no lower than its estimated fair value. Subsequent to the recognition of any such impairment, total remaining lease cost is recognized on a front-loaded basis over the remaining lease term.

See Note 14 for further discussion of the Company's leases.

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


			F-17

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 benefit (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 benefit (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 are recorded within the income tax benefit (provision) in the Company's consolidated statements of operations and are classified on the consolidated balance sheets together with the related liability for unrecognized tax benefits.

See Note 10 for further discussion of the Company's income taxes.

Derivative Financial Instruments

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


			F-18

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Each derivative instrument that qualifies for hedge accounting is expected to be highly effective in offsetting the risk associated with the related exposure. For each instrument that is designated as a hedge, the Company 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 over the instrument's term. To assess hedge effectiveness at the inception of a hedging relationship, the Company generally uses regression analysis, a statistical method, to evaluate how changes in the fair value of the derivative instrument are expected to offset changes in the 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 by the Company on at least a quarterly basis.

Given 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 such 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 further mitigate credit risk. 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 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 for its forward foreign exchange contracts and within cash flows from investing activities for its cross-currency swap contracts, both as discussed below.

Cash Flow Hedges

The Company uses forward foreign currency exchange contracts to mitigate its risk related to exchange rate fluctuations on inventory transactions made in an entity's non-functional currency. To the extent designated as cash flow hedges, related gains or losses on such instruments are initially deferred in equity as a component of AOCI and are subsequently recognized within cost of goods sold in the consolidated statements of operations when the related inventory is sold.

If a derivative instrument is dedesignated or if hedge accounting is discontinued because the instrument is not expected to be highly effective in hedging the designated exposure, any further gains (losses) are recognized in earnings each period within other income (expense), net. Upon discontinuance of hedge accounting, the cumulative change in fair value of the derivative instrument recorded in AOCI is recognized in earnings when the related hedged item affects earnings, consistent with the hedging strategy, unless the related forecasted transaction is probable of not occurring, in which case the accumulated amount is immediately recognized within other income (expense), net.

Hedges of Net Investments in Foreign Operations

The Company periodically uses cross-currency swap contracts to reduce risk associated with exchange rate fluctuations on certain of its net investments in foreign subsidiaries. Changes in the fair values of such derivative instruments that are designated as hedges of net investments in foreign operations are recorded in equity as a component of AOCI in the same manner as foreign currency translation adjustments. In assessing the effectiveness of such hedges, the Company uses a method based on changes in spot rates to measure the impact of foreign currency exchange rate fluctuations on both its foreign subsidiary net investment and the related hedging instrument. Under this method, changes in the fair value of the hedging instrument other than those due to changes in the spot rate are initially recorded in AOCI as a translation adjustment and are amortized into earnings as interest expense using a systematic and rational method over the instrument's term. Changes in fair value associated with the effective portion (i.e., those due to changes in the spot rate) are recorded in AOCI as a translation adjustment and are released and recognized in earnings only upon the sale or liquidation of the hedged net investment.


			F-19

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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. To the extent that the change in the fair value of the hedged item does not fully offset the change in the fair value of the hedging instrument, the resulting net impact is reflected in earnings within the income statement line item associated with the hedged item.

Undesignated Hedges

The Company uses undesignated hedges primarily to hedge foreign currency exchange rate risk related to third-party and intercompany balances and exposures. Changes in the fair value of undesignated derivative instruments are recognized in earnings each period within other income (expense), net.

See Note 13 for further discussion of the Company's derivative financial instruments.

4. Recently Issued Accounting Standards

Reference Rate Reform

In March 2020 and January 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04") and ASU No. 2021-01, "Reference Rate Reform: Scope" ("ASU 2021-01"), respectively. Together, ASU 2020-04 and ASU 2021-01 provide temporary optional expedients and exceptions for the application of U.S. GAAP, if certain criteria are met, to contract modifications, hedging relationships, and other arrangements that are expected to be impacted by the global transition away from certain reference rates, such as the London Interbank Offered Rate ("LIBOR") and other interbank offered rates, towards new reference rates, such as the Secured Overnight Financing Rate ("SOFR"). The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. The Company is evaluating the impact that the guidance will have on its consolidated financial statements and related disclosures, if adopted, and currently does not expect that it would be material.

Implementation Costs Incurred in Cloud Computing Arrangements

In August 2018, the FASB issued ASU No. 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU 2018-15"). ASU 2018-15 addresses diversity in practice surrounding the accounting for costs incurred to implement a cloud computing hosting arrangement that is a service contract by establishing a model for capitalizing or expensing such costs, depending on their nature and the stage of the related project during which they are incurred. Any capitalized costs are to be expensed over the reasonably certain term of the hosting arrangement and presented in the same line within the statement of operations as the expense for the arrangement's fees. ASU 2018-15 also requires enhanced qualitative and quantitative disclosures surrounding hosting arrangements that are service contracts.

The Company adopted ASU 2018-15 as of the beginning of Fiscal 2021. Prior to adoption, the Company had already generally accounted for implementation costs incurred in connection with cloud computing arrangements in a manner consistent with the new standard. Therefore, other than the new disclosure requirements, the adoption of ASU 2018-15 did not have an impact on the Company's consolidated financial statements. See Note 3 for further discussion of the Company's accounting for cloud computing arrangements.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). ASU 2016-13, which was further updated and clarified by the FASB through issuance of additional related ASUs, amends the guidance surrounding measurement and recognition of credit losses on financial assets measured at amortized cost, including trade receivables and investments in certain debt securities, by requiring upfront recognition of an allowance for credit losses expected to be incurred over an asset's contractual life based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability. Application of this "expected loss" model results in earlier recognition of credit losses than the historical "as incurred" model, under which losses were recognized only upon occurrence of an event that gave rise to the incurrence of a probable loss. While the Company's historical bad debt write-off


			F-20

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

activity has generally been insignificant, the extent of credit losses ultimately recognized and reflected in its allowance for doubtful accounts under the ASU 2016-13 framework will depend on prevailing conditions and ongoing consideration of information and forecasts that inform the Company's assessments of collectability, similar to past practice. The Company adopted ASU 2016-13 as of the beginning of Fiscal 2021 using the modified retrospective basis. Overall, the adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements.

5. Property and Equipment

Property and equipment, net consists of the following:


	March 27, 2021		March 28, 2020
	(millions)
Land and improvements	$	15.3	$	15.3
Buildings and improvements	492.8		309.0
Furniture and fixtures	608.9		629.5
Machinery and equipment	391.8		378.8
Capitalized software	555.2		543.3
Leasehold improvements	1,207.2		1,194.5
Construction in progress	34.5		37.5
	3,305.7		3,107.9
Less: accumulated depreciation	(2,291.7)		(2,128.4)
Property and equipment, net	$	1,014.0	$	979.5

Property and equipment, net includes finance lease ROU assets, which are reflected in the table above based on their nature.

Depreciation expense was $227.4 million, $246.6 million, and $257.8 million during Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively, and is recorded primarily within SG&A expenses in the consolidated statements of operations.

6. Goodwill and Other Intangible Assets

Goodwill

The following table details the changes in goodwill for each of the Company's segments during Fiscal 2021 and Fiscal 2020:


	North America		Europe		Asia		Other Non-reportable Segments(a)		Total(a)
	(millions)
Balance at March 30, 2019	$	421.8	$	290.0	$	75.8	$	132.0	$	919.6
Foreign currency translation	—		(4.9)		0.8		—		(4.1)
Balance at March 28, 2020	421.8		285.1		76.6		132.0		915.5
Foreign currency translation	—		18.9		0.2		—		19.1
Balance at March 27, 2021	$	421.8	$	304.0	$	76.8	$	132.0	$	934.6

**(a)**The goodwill balance for each period presented is net of accumulated impairment charges of $5.2 million related to the Company's other non-reportable segments.

Based on the results of the Company's goodwill impairment testing in Fiscal 2021, Fiscal 2020, and Fiscal 2019, no goodwill impairment charges were recorded. See Note 12 for further discussion of the Company's goodwill impairment testing.


			F-21

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other Intangible Assets

Other intangible assets consist of the following:


	March 27, 2021						March 28, 2020
	Gross Carrying Amount		Accum. Amort.		Net		Gross Carrying Amount		Accum. Amort.		Net
	(millions)
Intangible assets subject to amortization:
Re-acquired licensed trademarks	$	231.7	$	(163.6)	$	68.1	$	231.6	$	(155.4)	$	76.2
Customer relationships	254.3		(211.0)		43.3		253.9		(199.0)		54.9
Other	10.1		(7.7)		2.4		10.1		(7.5)		2.6
Total intangible assets subject to amortization	496.1		(382.3)		113.8		495.6		(361.9)		133.7
Intangible assets not subject to amortization:
Trademarks and brands	7.3		N/A		7.3		7.3		N/A		7.3
Total intangible assets	$	503.4	$	(382.3)	$	121.1	$	502.9	$	(361.9)	$	141.0

Amortization Expense

Amortization expense was $20.2 million, $22.9 million, and $23.5 million during Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively, and is recorded within SG&A expenses in the consolidated statements of operations.

Based on the balance of the Company's finite-lived intangible assets subject to amortization as of March 27, 2021, the expected amortization expense for each of the next five fiscal years and thereafter is as follows:


	Amortization Expense
	(millions)
Fiscal 2022	$	17.8
Fiscal 2023	14.4
Fiscal 2024	13.2
Fiscal 2025	12.9
Fiscal 2026	10.7
Fiscal 2027 and thereafter	44.8
Total	$	113.8

The expected future amortization expense above reflects weighted-average estimated remaining useful lives of 9.0 years for re-acquired licensed trademarks, 7.7 years for customer relationships, and 8.6 years for the Company's finite-lived intangible assets in total.


			F-22

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Other Assets and Liabilities

Prepaid expenses and other current assets consist of the following:


	March 27, 2021		March 28, 2020
	(millions)
Non-trade receivables	$	28.9	$	27.0
Other taxes receivable	28.4		24.7
Prepaid software maintenance	12.9		14.8
Prepaid advertising and marketing	9.5		10.1
Tenant allowances receivable	8.7		1.8
Inventory return asset	8.3		8.9
Cloud computing arrangement implementation costs	8.2		8.4
Prepaid logistic services	7.1		6.6
Prepaid occupancy expense	6.7		6.7
Derivative financial instruments	5.6		13.7
Prepaid inventory	5.0		0.2

Other prepaid expenses and current assets	37.3		37.9
Total prepaid expenses and other current assets	$	166.6	$	160.8

Other non-current assets consist of the following:


	March 27, 2021		March 28, 2020
	(millions)
Security deposits	$	31.1	$	29.4
Derivative financial instruments	10.2		48.6
Restricted cash	7.5		8.0
Cloud computing arrangement implementation costs	5.3		4.9
Other non-current assets	32.3		21.0
Total other non-current assets	$	86.4	$	111.9

Accrued expenses and other current liabilities consist of the following:


	March 27, 2021		March 28, 2020
	(millions)
Accrued operating expenses	$	225.0	$	176.4
Accrued payroll and benefits	223.6		186.2
Accrued inventory	196.1		167.1
Restructuring reserve	99.8		25.5
Other taxes payable	64.6		47.9
Accrued capital expenditures	21.3		29.1
Finance lease obligations	19.7		9.8
Deferred income	12.0		14.6
Derivative financial instruments	0.3		6.9
Dividends payable	—		49.8
Other accrued expenses and current liabilities	13.0		3.8
Total accrued expenses and other current liabilities	$	875.4	$	717.1


			F-23

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other non-current liabilities consist of the following:


	March 27, 2021		March 28, 2020
	(millions)
Finance lease obligations	$	370.5	$	189.4
Deferred lease incentives and obligations	62.4		57.8
Derivative financial instruments	55.1		—
Accrued benefits and deferred compensation	22.4		19.5
Deferred tax liabilities	10.7		10.0
Restructuring reserve	3.6		2.0
Other non-current liabilities	36.1		29.8
Total other non-current liabilities	$	560.8	$	308.5

8. Impairment of Assets

During Fiscal 2021, the Company recorded non-cash impairment charges of $96.0 million to write-down certain long-lived assets, of which $69.4 million related to its restructuring plans (see Note 9), $17.5 million related to underperforming stores identified through its ongoing store portfolio evaluation and adverse impacts associated with COVID-19 business disruptions, and $9.1 million related to certain previously exited real estate locations for which the related lease agreements have not yet expired.

During Fiscal 2020, the Company recorded non-cash impairment charges of $31.6 million to write-down certain long-lived assets, of which $8.7 million related to its restructuring plans (see Note 9) and $22.9 million related to underperforming stores identified through its ongoing store portfolio evaluation and adverse impacts associated with COVID-19 business disruptions. These charges were recorded within impairment of assets in the consolidated statements of operations. In addition, the Company recorded a $7.1 million impairment charge within other income (expense), net in the consolidated statements of operations during Fiscal 2020 relating to an equity method investment.

During Fiscal 2019, the Company recorded non-cash impairment charges of $21.2 million to write-down certain long-lived assets, of which $10.7 million related to its restructuring plans (see Note 9) and $10.5 million related to underperforming stores identified through its ongoing store portfolio evaluation. Additionally, as a result of its decision to sell its corporate jet in connection with its cost savings initiative, the Company recorded a non-cash impairment charge of $4.6 million during Fiscal 2019 to reduce the carrying value of the asset being held-for-sale to its estimated fair value, less costs to sell.

See Note 12 for further discussion of the non-cash impairment charges recorded during the fiscal years presented.

9. Restructuring and Other Charges

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

Fiscal 2021 Strategic Realignment Plan

The Company has begun efforts to realign its resources to support future growth and profitability, and to create a sustainable cost structure. The key areas of the Company's evaluation include its: (i) team organizational structures and ways of working; (ii) real estate footprint and related costs across corporate offices, distribution centers, and direct-to-consumer retail and wholesale doors; and (iii) brand portfolio.

In connection with the first initiative, on September 17, 2020, the Company's Board of Directors approved a restructuring plan (the "Fiscal 2021 Strategic Realignment Plan") to reduce its global workforce by the end of Fiscal 2021. Additionally, during its preliminary review of its store portfolio during the second quarter of Fiscal 2021, the Company made the decision to close its Polo store on Regent Street in London.

On October 29, 2020, the Company announced the planned transition of its Chaps brand to a fully licensed business model, consistent with its long-term brand elevation strategy in connection with its third initiative. Specifically, the Company entered into a multi-year licensing partnership, taking effect on August 1, 2021 after a transition period, with an affiliate of 5 Star Apparel LLC, a division of the OVED Group, to manufacture, market, and distribute Chaps menswear and womenswear.


			F-24

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

This agreement is expected to create incremental value for the Company by enabling an even greater focus on elevating its core brands in the marketplace, reducing its direct exposure to the North America department store channel, and setting up Chaps to deliver on its potential with an experienced partner that is focused on nurturing the brand.

Additionally, on February 3, 2021, the Company's Board of Directors approved additional realignment actions related to its real estate initiative. Specifically, the Company plans to further rightsize and consolidate its global corporate offices to better align with its current organizational profile and new ways of working. The Company also expects to close certain of its stores to improve overall profitability. Additionally, the Company plans to complete the consolidation of its existing North America distribution centers in order to drive greater efficiencies, improve sustainability, and deliver a better consumer experience.

Finally, on May 13, 2021, in connection with its brand portfolio initiative, the Company announced that it has entered into an agreement to sell its Club Monaco business to Regent, L.P., a global private equity firm. The transaction is expected to close by the end of the first quarter of Fiscal 2022.

In connection with these collective realignment initiatives, the Company expects to incur total estimated pre-tax charges of approximately $300 million to $350 million, comprised of cash-related restructuring charges of approximately $185 million to $200 million and non-cash charges of approximately $115 million and $150 million. These estimated charges are subject to change based upon the completion of the sale of the Company's Club Monaco business.

A summary of the charges recorded in connection with the Fiscal 2021 Strategic Realignment Plan during the fiscal period presented (inclusive of immaterial other restructuring-related charges previously recorded during the first quarter of Fiscal 2021) is as follows:


	Fiscal Year Ended
	March 27, 2021
	(millions)
Cash-related restructuring charges:
Severance and benefit costs	$	144.2

Other cash charges	14.9
Total cash-related restructuring charges	159.1
Non-cash charges:
Impairment of assets (see Note 8)	69.4
Inventory-related charges(a)	8.3


Total non-cash charges	77.7
Total charges	$	236.8

**(a)**Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.

A summary of the activity in the restructuring reserve related to the Fiscal 2021 Strategic Realignment Plan is as follows:


	Severance and Benefit Costs		Other Cash Charges		Total
	(millions)
Balance at March 28, 2020	$	—	$	—	$	—
Additions charged to expense	144.2		14.9		159.1
Cash payments charged against reserve	(48.0)		(11.7)		(59.7)

Balance at March 27, 2021	$	96.2	$	3.2	$	99.4


			F-25

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fiscal 2019 Restructuring Plan

On June 4, 2018, the Company's Board of Directors approved a restructuring plan associated with the Company's strategic objective of operating with discipline to drive sustainable growth (the "Fiscal 2019 Restructuring Plan"). The Fiscal 2019 Restructuring Plan included the following activities: (i) rightsizing and consolidation of the Company's global distribution network and corporate offices; (ii) targeted severance-related actions; and (iii) closure of certain of its stores and shop-within-shops.

Actions associated with the Fiscal 2019 Restructuring Plan are complete and no additional charges are expected to be incurred in connection with this plan. A summary of the charges recorded in connection with the Fiscal 2019 Restructuring Plan during the fiscal periods presented, as well as the cumulative charges recorded since its inception, is as follows:


	Fiscal Year Ended				Cumulative Charges
	March 28, 2020		March 30, 2019
	(millions)
Cash-related restructuring charges:
Severance and benefit costs	$	30.1	$	60.2	$	90.3
Lease termination and store closure costs	0.5		1.8		2.3
Other cash charges	3.4		7.4		10.8
Total cash-related restructuring charges	34.0		69.4		103.4
Non-cash charges:
Impairment of assets (see Note 8)	8.7		10.3		19.0
Inventory-related charges(a)	2.2		6.0		8.2
Accelerated stock-based compensation expense(b)	3.6		—		3.6
Loss on sale of property(c)	—		11.6		11.6
Total non-cash charges	14.5		27.9		42.4
Total charges	$	48.5	$	97.3	$	145.8

**(a)**Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.

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

**(c)**Loss on sale of property, which was recorded within restructuring and other charges in the consolidated statements of operations, was incurred in connection with the sale of one of the Company's distribution centers in North America. Total cash proceeds from the sale were $20.0 million.


			F-26

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of the activity in the restructuring reserve related to the Fiscal 2019 Restructuring Plan is as follows:


	Severance and Benefit Costs		Lease Termination and Store Closure Costs		Other Cash Charges		Total
	(millions)
Balance at March 31, 2018	$	—	$	—	$	—	$	—
Additions charged to expense	60.2		1.8		7.4		69.4
Cash payments charged against reserve	(19.0)		(2.1)		(7.3)		(28.4)
Non-cash adjustments	(0.2)		0.8		—		0.6
Balance at March 30, 2019	41.0		0.5		0.1		41.6
Additions charged to expense	30.1		0.5		3.4		34.0
Cash payments charged against reserve	(47.6)		(0.6)		(2.9)		(51.1)
Non-cash adjustments(a)	—		(0.4)		—		(0.4)
Balance at March 28, 2020	23.5		—		0.6		24.1
Additions charged to expense	—		—		—		—
Cash payments charged against reserve	(20.8)		—		(0.6)		(21.4)

Balance at March 27, 2021	$	2.7	$	—	$	—	$	2.7

**(a)**Certain lease-related liabilities previously recognized in connection with the Company's closure and cessation of use of real estate locations were reclassified and reflected as reductions of the respective operating lease ROU assets initially recognized as of the beginning of Fiscal 2020, upon adoption of new lease accounting rules prescribed by ASU No. 2016-02, "Leases" ("ASU 2016-02").

Other Restructuring Plans

During Fiscal 2019, the Company recorded charges of $14.2 million in connection with its restructuring plan initiated during its fiscal year ended April 1, 2017, comprised of cash-related restructuring charges of $9.2 million and non-cash charges of $5.0 million. Actions associated with this plan are complete and no additional charges are expected to be incurred. The Company made cash payments of $2.1 million, $7.1 million, and $73.5 million during Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively, which were applied against the reserve associated with this restructuring plan. Additionally, during Fiscal 2020, $17.7 million of lease-related liabilities previously recognized in connection with the Company's closure and cessation of use of real estate locations were reclassified and reflected as reductions of the respective operating lease ROU assets initially recognized upon adoption of ASU 2016-02. As of March 27, 2021 and March 28, 2020, the remaining restructuring reserve associated with this plan was $1.3 million and $3.4 million, respectively.

Refer to Note 9 of the Fiscal 2020 10-K for additional discussion regarding this restructuring plan.

Other Charges

During Fiscal 2021, the Company recorded other charges of $11.4 million primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired.

During Fiscal 2020, the Company recorded other charges of $20.8 million related to the donation of net cash proceeds received from the sale of its corporate jet. This donation was made to the Ralph Lauren Corporate Foundation (formerly known as the Polo Ralph Lauren Foundation), a non-profit, charitable foundation that supports various philanthropic programs. Additionally, during Fiscal 2020, the Company recorded other charges of $8.8 million primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements had not yet expired.

During Fiscal 2019, the Company recorded other charges of $14.1 million related to depreciation expense associated with its former Polo store at 711 Fifth Avenue in New York City, recorded after the store closed during the first quarter of its fiscal year ended March 31, 2018 ("Fiscal 2018"). Additionally, during Fiscal 2019, the Company recorded other charges of


			F-27

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

$4.2 million primarily related to a customs audit, as well as $18.2 million primarily related to the launch of its new sabbatical leave program, which entitles eligible employees to periodic paid leave based on the attainment of certain employment tenure milestones. Other than this initial charge to establish its estimated liability for services rendered to-date, the Company does not expect there will be a significant, ongoing impact to the consolidated financial statements in future periods related to its sabbatical leave program.

10. Income Taxes

Swiss Tax Reform

In May 2019, a public referendum was held in Switzerland that approved the Federal Act on Tax Reform and AHV Financing (the "Swiss Tax Act"), which became effective January 1, 2020. The Swiss Tax Act eliminates certain preferential tax items at both the federal and cantonal levels for multinational companies and provides the cantons with parameters for establishing local tax rates and regulations. The Swiss Tax Act also provides transitional provisions, one of which allows eligible companies to increase the tax basis of certain assets based on the value generated by their business in previous years, and to amortize such adjustment as a tax deduction over a transitional period.

During the second quarter of Fiscal 2020, the Swiss Tax Act was enacted into law, resulting in an immaterial adjustment associated with the revaluation of the Company's Swiss deferred tax assets and liabilities and the then estimated annual effective tax rate. Subsequently, as a result of additional information received from the tax authorities and analyses performed related to the transitional provision noted above, the Company recorded a one-time income tax benefit and corresponding deferred tax asset of $122.9 million during Fiscal 2020, which reduced the Company's effective tax rate by 3,760 basis points.

During Fiscal 2021, the Company reduced its one-time tax benefit by $13.8 million due to new legislation enacted in connection with the European Union's anti-tax avoidance directive, which increased the Company's effective tax rate by 1,840 basis points.

U.S. Tax Reform

In January 2018, new U.S. tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "TCJA") became effective. The TCJA significantly revised U.S. tax law by, among other provisions, lowering the U.S. federal statutory income tax rate from 35% to 21%, creating a territorial tax system that includes a one-time mandatory transition tax on previously deferred foreign earnings, and eliminating or reducing certain income tax deductions.

U.S. GAAP requires that the effects of changes in tax laws be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the TCJA's provisions, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which allowed companies to record the tax effects of the TCJA on a provisional basis based on a reasonable estimate, and then, if necessary, subsequently adjust such amounts during a limited measurement period as additional information became available and further analyses were completed. The measurement period ends when a company has obtained, prepared, and analyzed the information necessary to finalize its accounting, not to extend beyond one year from enactment.

During Fiscal 2018, the Company recorded net charges of $221.4 million on a provisional basis, inclusive of measurement period adjustments. Subsequently, during Fiscal 2019, the Company completed its analyses and recorded additional net unfavorable measurement period adjustments of $27.6 million as a result of the issuance of new interpretive guidance related to stock-based compensation for certain executives and other analyses performed. These measurement period adjustments increased the Company's effective tax rate by 470 basis points during Fiscal 2019. Approximately $241 million of the cumulative TCJA enactment-related charges recorded related to the mandatory transition tax (see Note 15).

Additionally, during the fourth quarter of Fiscal 2018 the Company reevaluated its permanent reinvestment assertion and determined that undistributed foreign earnings that were subject to the one-time mandatory transition tax were no longer considered to be permanently reinvested, effective December 31, 2017. The mandatory transition tax does not apply to undistributed foreign earnings generated after December 31, 2017, and therefore the Company intends to permanently reinvest such earnings. See "Deferred Taxes" for additional discussion.


			F-28

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company also decided to account for the minimum tax on global intangible low-taxed income ("GILTI") in the period in which it is incurred and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements.

Taxes on Income

Domestic and foreign pretax income (loss) are as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Domestic	$	(285.0)	$	(82.9)	$	66.6
Foreign	210.2		409.3		515.9
Total income (loss) before income taxes	$	(74.8)	$	326.4	$	582.5

Benefits (provisions) for current and deferred income taxes are as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Current:
Federal	$	38.5	$	1.5	$	(37.3)
State and local	1.5		(19.8)		(11.9)
Foreign	(50.7)		(92.6)		(93.9)
	(10.7)		(110.9)		(143.1)
Deferred:
Federal	(19.2)		18.0		(5.0)
State and local	3.5		5.6		(6.9)
Foreign	(19.9)		145.2		3.4
	(35.6)		168.8		(8.5)
Total income tax benefit (provision)	$	(46.3)	$	57.9	$	(151.6)


			F-29

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 and income taxes provided are as follows:


	Fiscal Years Ended
	March 27, 2021			March 28, 2020			March 30, 2019
	(millions)
Benefit (provision) for income taxes at the U.S. federal statutory rate	$	15.7		$	(68.5)		$	(122.3)
Change due to:
State and local income taxes, net of federal benefit	6.1			(1.5)			(12.4)
Foreign income taxed at different rates, net of U.S. foreign tax credits	(4.8)			24.7			27.6
Unrecognized tax benefits and settlements of tax examinations	(4.6)			(9.2)			(3.4)
Changes in valuation allowance on deferred tax assets	(34.9)			(1.7)			(1.4)
TCJA enactment-related charges	—			—			(27.6)
Swiss Tax Act benefit (expense)	(13.8)			125.3			—
Compensation-related adjustments	(12.9)			(10.7)			(11.6)
Charitable contributions	7.4			0.2			0.2
Transfer pricing adjustments	(4.1)			—			—
Other	(0.4)			(0.7)			(0.7)
Total income tax benefit (provision)	$	(46.3)		$	57.9		$	(151.6)
Effective tax rate(a)	(61.9		%)	(17.7		%)	26.0		%

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

The Company's Fiscal 2021 effective tax rate was unfavorable to the U.S. federal statutory income tax rate of 21% primarily due to incremental tax expense resulting from new legislation enacted in connection with the European Union's anti-tax avoidance directive, valuation allowances recorded against certain deferred tax assets as a result of significant business disruptions attributable to COVID-19, and tax impacts on stock-based compensation and other permanent adjustments, partially offset by an income tax benefit related to charitable contributions. The Company's Fiscal 2020 effective tax rate was lower than the U.S. federal statutory income tax rate of 21% primarily due to the one-time income tax benefit recorded in connection with the Swiss Tax Act, as previously discussed, the favorable impact of the change in geographic mix of its worldwide earnings and the favorable impact of tax benefits associated with provision to tax return adjustments, partially offset by the unfavorable impact of additional income tax reserves associated with certain income tax audits. The Company's Fiscal 2019 effective tax rate was higher than the U.S. federal statutory income tax rate of 21% primarily due to the SAB 118 measurement period adjustments recorded, as previously discussed, state and local income taxes, and compensation-related adjustments, partially offset by the favorable impact of the proportion of earnings generated in lower taxed jurisdictions.


			F-30

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Deferred Taxes

Significant components of the Company's deferred tax assets and liabilities are as follows:


	March 27, 2021		March 28, 2020
	(millions)
Lease liabilities	$	406.6	$	428.9
Net operating loss carryforwards	59.6		42.6
Deferred compensation	49.7		50.2
Inventory basis difference	44.9		54.0
GILTI-related carryforwards	34.1		—
Receivable allowances and reserves	30.5		45.6
Unrecognized tax benefits	23.3		17.1
Property and equipment	22.8		3.0
Charitable contribution carryforwards	18.4		—
Accrued expenses	13.0		10.5
Transfer pricing	4.1		9.0
Cumulative translation adjustment and hedges	4.0		(17.6)
Lease right-of-use assets	(322.0)		(353.0)
Goodwill and other intangible assets	(48.2)		(30.0)
Other	4.4		12.2
Valuation allowance	(72.0)		(37.3)
Net deferred tax assets(a)	$	273.2	$	235.2

**(a)**Net deferred tax balances as of March 27, 2021 and March 28, 2020 were comprised of non-current deferred tax assets of $283.9 million and $245.2 million, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of $10.7 million and $10.0 million, respectively, recorded within other non-current liabilities in the consolidated balance sheets.

The Company has available federal, state, and foreign net operating loss carryforwards of $2.2 million, $4.0 million, and $17.7 million (all net of tax), respectively, for tax purposes to offset future taxable income. The net operating loss carryforwards expire beginning in Fiscal 2022.

The Company also has available state and foreign net operating loss carryforwards of $8.5 million and $27.4 million (both net of tax), respectively, for which no net deferred tax asset has been recognized. A full valuation allowance has been recorded against these carryforwards since the Company does not believe that it 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 increased by $0.7 million (net of tax) as a result of net operating losses in certain jurisdictions where the Company does not believe that it will more likely than not be able to utilize these carryforwards in the future. The valuation allowance relating to foreign net operating loss carryforwards decreased by $0.7 million as a result of reductions in net operating losses in certain jurisdictions.

As a result of the taxation of undistributed foreign earnings in connection with the TCJA, the Company reevaluated its permanent reinvestment assertion and determined that undistributed foreign earnings that were subject to the TCJA's one-time mandatory transition tax were no longer considered to be permanently reinvested, effective December 31, 2017. The mandatory transition tax does not apply to undistributed foreign earnings generated after December 31, 2017. Accordingly, provision has not been made for U.S. or additional foreign taxes on approximately $1.336 billion of undistributed earnings of foreign subsidiaries generated after December 31, 2017, as such earnings are expected 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.


			F-31

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Uncertain Income Tax Benefits

Fiscal 2021, Fiscal 2020, and Fiscal 2019 Activity

Reconciliations of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for Fiscal 2021, Fiscal 2020, and Fiscal 2019 are presented below:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Unrecognized tax benefits beginning balance	$	72.7	$	65.2	$	64.2
Additions related to current period tax positions	3.2		6.0		4.9
Additions related to prior period tax positions	8.8		30.5		11.7
Reductions related to prior period tax positions	(4.2)		(18.7)		(5.5)
Reductions related to expiration of statutes of limitations	(2.1)		(1.2)		(4.1)
Reductions related to settlements with taxing authorities	(9.6)		(8.8)		(3.1)
Additions (reductions) related to foreign currency translation	2.6		(0.3)		(2.9)
Unrecognized tax benefits ending balance	$	71.4	$	72.7	$	65.2

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 2021, Fiscal 2020, and Fiscal 2019 are presented below:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Accrued interest and penalties beginning balance	$	16.2	$	13.6	$	15.0
Net additions charged to expense	5.5		7.0		3.0
Reductions related to prior period tax positions	(1.7)		(1.9)		(3.4)
Reductions related to settlements with taxing authorities	(0.3)		(2.5)		(0.8)
Additions (reductions) related to foreign currency translation	0.3		—		(0.2)
Accrued interest and penalties ending balance	$	20.0	$	16.2	$	13.6

The total amount of unrecognized tax benefits, including interest and penalties, was $91.4 million and $88.9 million as of March 27, 2021 and March 28, 2020, respectively, and was 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 $68.0 million and $71.7 million as of March 27, 2021 and March 28, 2020, 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 March 30, 2013.


			F-32

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Debt

Debt consists of the following:


	March 27, 2021		March 28, 2020
	(millions)
$300 million 2.625% Senior Notes(a)	$	—	$	299.6
$400 million 3.750% Senior Notes(b)	397.1		396.4
$500 million 1.700% Senior Notes(c)	498.4		—
$750 million 2.950% Senior Notes(d)	737.4		—
Borrowings outstanding under credit facilities	—		475.0
Total debt	1,632.9		1,171.0
Less: short-term debt and current portion of long-term debt	—		774.6
Total long-term debt	$	1,632.9	$	396.4

**(a)**The carrying value of the 2.625% Senior Notes as of March 28, 2020 is presented net of unamortized debt issuance costs and original issue discount of $0.2 million and also reflects an adjustment of $0.2 million associated with a related interest rate swap contract (see Note 13).

**(b)**The carrying value of the 3.750% Senior Notes is presented net of unamortized debt issuance costs and original issue discount of $2.9 million and $3.6 million as of March 27, 2021 and March 28, 2020, respectively.

**(c)**The carrying value of the 1.700% Senior Notes is presented net of unamortized debt issuance costs and original issue discount of $1.6 million as of March 27, 2021.

**(d)**The carrying value of the 2.950% Senior Notes is presented net of unamortized debt issuance costs and original issue discount of $12.6 million as of March 27, 2021.

Senior Notes

In August 2018, the Company completed a registered public debt offering and issued $400 million aggregate principal amount of unsecured senior notes due September 15, 2025, which bear interest at a fixed rate of 3.750%, payable semi-annually (the "3.750% Senior Notes"). The 3.750% Senior Notes were issued at a price equal to 99.521% of their principal amount. The proceeds from this offering were used for general corporate purposes, including repayment of the Company's previously outstanding $300 million principal amount of unsecured 2.125% senior notes that matured September 26, 2018 (the "2.125% Senior Notes").

In June 2020, the Company completed another registered public debt offering and issued an additional $500 million aggregate principal amount of unsecured senior notes due June 15, 2022, which bear interest at a fixed rate of 1.700%, payable semi-annually (the "1.700% Senior Notes"), and $750 million aggregate principal amount of unsecured senior notes due June 15, 2030, which bear interest at a fixed rate of 2.950%, payable semi-annually (the "2.950% Senior Notes"). The 1.700% Senior Notes and 2.950% Senior Notes were issued at prices equal to 99.880% and 98.995% of their principal amounts, respectively. The proceeds from these offerings are being used for general corporate purposes, which included the repayment of $475 million previously outstanding under the Company's Global Credit Facility (as defined below) on June 3, 2020 and repayment of its previously outstanding $300 million principal amount of unsecured 2.625% senior notes that matured August 18, 2020 (the "2.625% Senior Notes").

The Company has the option to redeem the 3.750% Senior Notes, 1.700% Senior Notes, and 2.950% 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.


			F-33

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Commercial Paper

The Company has a commercial paper borrowing program that allows it to issue up to $500 million of unsecured commercial paper notes through private placement using third-party broker-dealers (the "Commercial Paper Program").

Borrowings under the Commercial Paper Program are supported by the Global Credit Facility, as defined below. Accordingly, the Company does not expect combined borrowings outstanding under the Commercial Paper Program and Global Credit Facility to exceed $500 million. Commercial Paper Program borrowings 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 in seniority with the Company's other forms of unsecured indebtedness. As of both March 27, 2021 and March 28, 2020 there were no borrowings outstanding under the Commercial Paper Program.

Revolving Credit Facilities

Global Credit Facility

In August 2019, the Company replaced its existing credit facility and entered into a new credit facility that provides for a $500 million senior unsecured revolving line of credit through August 12, 2024 (the "Global Credit Facility") under terms and conditions substantially similar to those of the previous facility. The Global Credit Facility is also used to support the issuance of letters of credit and maintenance of the Commercial Paper Program. Borrowings under the Global Credit Facility may be denominated in U.S. Dollars and certain other currencies, including Euros, Hong Kong Dollars, and Japanese Yen, and are guaranteed by all of the Company's domestic significant subsidiaries. In accordance with the terms of the agreement governing the Global Credit Facility, the Company has the ability to expand its borrowing availability under the Global Credit Facility to $1 billion, 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.

Under the Global Credit Facility as originally implemented, U.S. Dollar-denominated borrowings 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) one-month LIBOR plus 100 basis points; or (b) LIBOR, adjusted for the Federal Reserve Board's Eurocurrency liabilities maximum reserve percentage, plus a spread of 75 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 relating to the unutilized commitments. The commitment fee rate of 6.5 basis points is subject to adjustment based on the Company's credit ratings. These provisions were amended in May 2020, as discussed further below.

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. As originally implemented, the Global Credit Facility also required the Company to maintain a maximum ratio of Adjusted Debt to Consolidated EBITDAR (the "leverage ratio") of no greater than 4.25 as of the date of measurement for the four most recent consecutive fiscal quarters. Adjusted Debt is defined generally as consolidated debt outstanding, including finance lease obligations, plus all operating lease obligations. Consolidated EBITDAR is defined generally as consolidated net income plus (i) income tax expense, (ii) net interest expense, (iii) depreciation and amortization expense, (iv) operating lease cost, (v) restructuring and other non-recurring expenses, and (vi) acquisition-related costs. This requirement was amended in May 2020, as discussed below.

In May 2020, the Company entered into an amendment of its Global Credit Facility (the "Amendment"). Under the Amendment, until the earlier of (a) the date on which the Company provides the periodic reporting information required under the Global Credit Facility for the quarter ending September 30, 2021 and (b) the date on which the Company certifies that its leverage ratio as of the last day of the two most recent fiscal quarters was no greater than 4.25 (the "Ratings-Based Toggle Date"), for loans based on Adjusted LIBOR, the spread over Adjusted LIBOR will be increased to 187.5 basis points, the spread on loans based on the base rate will be 87.5 basis points and the commitment fee will be increased to 25 basis points, in each case with no adjustments based on the Company's credit ratings. The pricing will return to the original levels set forth in the Global Credit Facility on the Ratings-Based Toggle Date. Additionally, the leverage ratio requirements have been waived


			F-34

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

until the quarter ending September 30, 2021. The maximum permitted leverage ratio for that fiscal quarter would be 5.25. For the fiscal quarters ending December 31, 2021 and March 31, 2022, the maximum permitted leverage ratio would be 4.75. For each fiscal quarter ending on or after June 30, 2022, the maximum permitted leverage ratio would return to 4.25. The Amendment also (a) imposes a new requirement that would remain in effect until the Ratings-Based Toggle Date that the aggregate amount of unrestricted cash of the Company and its subsidiaries plus the undrawn amounts available under the Global Credit Facility may not be less than $750 million, (b) restricts the amount of dividends and distributions on, or purchases, redemptions, repurchases, retirements or acquisitions of, the Company's stock until the Specified Period Termination Date (as defined below), (c) until March 31, 2021, amends the material adverse change representation to disregard pandemic-related impacts to the business, and (d) until the Specified Period Termination Date, adds certain other restrictions on indebtedness incurred by the Company and its subsidiaries and investments and acquisitions by the Company and its subsidiaries. The "Specified Period Termination Date" is the earlier of (i) the date on which the Company provides the periodic reporting information required under the Global Credit Facility for the quarter ending June 30, 2022 and (ii) the date on which the Company certifies that its leverage ratio as of the last day of the two most recent fiscal quarters was no greater than 4.25.

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. As of March 27, 2021, no Event of Default (as such term is defined pursuant to the Global Credit Facility) has occurred under the Company's Global Credit Facility.

In March 2020, the Company borrowed $475.0 million under the Global Credit Facility as a preemptive action to preserve cash and strengthen its liquidity position in response to the COVID-19 pandemic. These borrowings were subsequently repaid in June 2020. As of March 27, 2021, there were no borrowings outstanding under the Global Credit Facility and the Company was contingently liable for $8.9 million of outstanding letters of credit

364 Day Facility

In May 2020, the Company entered into a new credit facility with the same lenders that are parties to the Global Credit Facility (the "364 Day Facility") as a preemptive measure to strengthen its liquidity in response to the COVID-19 pandemic. The 364 Day Facility provided for a $500 million senior unsecured revolving line of credit through May 25, 2021, provided that the maturity date may be earlier if the Company was to issue senior notes other than to refinance the previously outstanding 2.625% Senior Notes. In connection with the issuances of the 1.700% Senior Notes and the 2.950% Senior Notes in June 2020, the 364 Day Facility automatically terminated in accordance with its terms because the aggregate proceeds received upon issuance of these senior notes exceeded the amount necessary to refinance the 2.625% Senior Notes.

Pan-Asia Borrowing Facilities

Certain of the Company's subsidiaries in Asia have uncommitted credit facilities with regional branches of JPMorgan Chase in China and South Korea (the "Pan-Asia Credit Facilities"). Additionally, the Company's Japan subsidiary has an uncommitted overdraft facility with Sumitomo Mitsui Banking Corporation (the "Japan Overdraft Facility"). The Pan-Asia Credit Facilities and Japan Overdraft Facility (collectively, the "Pan-Asia Borrowing Facilities") are subject to annual renewal and may be used to fund general working capital needs of the Company's operations in the respective countries. Borrowings under the Pan-Asia Borrowing Facilities are guaranteed by the parent company and are granted at the sole discretion of the respective banks, subject to availability of the banks' funds and satisfaction of certain regulatory requirements. The Pan-Asia Borrowing Facilities do not contain any financial covenants. A summary of the Company's Pan-Asia Borrowing Facilities by country is as follows:

China Credit Facility — provides Ralph Lauren Trading (Shanghai) Co., Ltd. with a revolving line of credit of up to 50 million Chinese Renminbi (approximately $8 million) through April 3, 2022, which is also able to be used to support bank guarantees.
South Korea Credit Facility — provides Ralph Lauren (Korea) Ltd. with a revolving line of credit of up to 30 billion South Korean Won (approximately $26 million) through October 29, 2021.


			F-35

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Japan Overdraft Facility — provides Ralph Lauren Corporation Japan with an overdraft amount of up to 5 billion Japanese Yen (approximately $46 million) through April 28, 2022.

As of both March 27, 2021 and March 28, 2020 there were no borrowings outstanding under the Pan-Asia Borrowing Facilities.

12. 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:


	March 27, 2021		March 28, 2020
	(millions)
Investments in commercial paper(a)(b)	$	—	$	243.6
Derivative assets(a)	15.8		62.3
Derivative liabilities(a)	55.4		6.9

**(a)**Based on Level 2 measurements.

**(b)**Amounts are included within short-term investments in the consolidated balance sheet.

The Company's investments in commercial paper are classified as available-for-sale and recorded at fair value in its consolidated balance sheets using external pricing data, based on interest rates and credit ratings for similar issuances with the same remaining term as the Company's investments. To the extent the Company invests in bonds, such investments are also classified as available-for-sale and recorded at fair value in its consolidated balance sheets based on 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 generally 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


			F-36

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

outstanding under its credit facilities, if any, 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, if any, generally approximate their carrying values.

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


	March 27, 2021				March 28, 2020
	Carrying Value(a)		Fair Value(b)		Carrying Value(a)		Fair Value(b)
	(millions)
$300 million 2.625% Senior Notes	$	—	$	—	$	299.6	$	299.8
$400 million 3.750% Senior Notes	397.1		443.4		396.4		415.1
$500 million 1.700% Senior Notes	498.4		507.8		—		—
$750 million 2.950% Senior Notes	737.4		779.4		—		—
Borrowings outstanding under credit facilities	—		—		475.0		473.0

**(a)**See Note 11 for discussion of the carrying values of the Company's senior notes.

**(b)**Based on Level 2 measurements.

Unrealized gains or losses resulting from changes in the fair value of the Company's debt instruments 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, property and equipment, and lease-related ROU assets, are not required to be measured at fair value on a recurring basis, and instead are reported at carrying value in its consolidated balance sheet. However, on a periodic basis or whenever events or changes in circumstances indicate that they may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), the respective carrying value of non-financial assets are assessed for impairment and, if ultimately considered impaired, are adjusted and written down to their fair value, as estimated based on consideration of external market participant assumptions and discounted cash flows.

During Fiscal 2021, Fiscal 2020, and Fiscal 2019, the Company recorded non-cash impairment charges to reduce the carrying values of certain long-lived assets to their estimated fair values. The fair values of these assets were determined based on Level 3 measurements, the related inputs of which included estimates of the amount and timing of the assets' net future discounted cash flows (including any potential sublease income for lease-related ROU assets), based on historical experience and consideration of current trends, market conditions, and comparable sales, as applicable.

The following tables summarize non-cash impairment charges recorded by the Company during the fiscal years presented in order to reduce the carrying values of certain long-lived assets to their estimated fair values as of the assessment date:


	Fiscal Years Ended
	March 27, 2021				March 28, 2020				March 30, 2019
Long-Lived Asset Category	Fair Value As of Impairment Date		Total Impairments(a)		Fair Value As of Impairment Date		Total Impairments(a)		Fair Value As of Impairment Date		Total Impairments(a)
	(millions)
Property and equipment, net(b)	$	23.5	$	44.1	$	2.4	$	16.8	$	20.8	$	25.8
Operating lease right-of-use assets(c)	84.3		51.9		120.8		239.9		N/A		N/A
Equity method investment	N/A		—		1.3		7.1		N/A		—


			F-37

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

**(a)**Impairment of equity method investment is recorded within other income (expense), net in the consolidated statements of operations. All other impairment charges are recorded within impairments of assets in the consolidated statements of operations, unless otherwise noted.

**(b)**Total impairment charges for Fiscal 2019 includes $4.6 million recorded to reduce the carrying value of the Company's corporate jet being held-for-sale to its estimated fair value, less costs to sell of $20.8 million as of March 30, 2019. This balance was reclassified from property and equipment, net to prepaid expenses and other current assets in the consolidated balance sheet upon being classified as an asset held-for-sale. The asset was subsequently sold during Fiscal 2020.

**(c)**Total impairment charges for Fiscal 2020 includes $225.1 million recorded in connection with the Company's adoption of ASU 2016-02 as of the beginning of Fiscal 2020 which, net of related income tax benefits, reduced its opening retained earnings balance by $169.4 million.

See Note 8 for additional discussion regarding non-cash impairment charges recorded by the Company within the consolidated statements of operations during the fiscal years presented.

No impairment charges associated with goodwill or other intangible assets were recorded during any of the fiscal years presented. In Fiscal 2021, the Company performed its annual goodwill impairment assessment using a qualitative approach as of the beginning of the second quarter of the fiscal year. 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 with allocated goodwill. 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 expected financial performance. Additionally, the Company also considered the results of its most recent quantitative goodwill impairment test, which was performed as of the end of Fiscal 2020 and incorporated assumptions related to COVID-19 business disruptions, the results of which indicated that the fair values of these 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.

13. 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 obligations attributed to changes in benchmark interest rates. Accordingly, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not use derivatives for speculative or trading purposes.

The following table summarizes the Company's outstanding derivative instruments recorded on its consolidated balance sheets as of March 27, 2021 and March 28, 2020:


	Notional Amounts				Derivative Assets						Derivative Liabilities
Derivative Instrument(a)	March 27, 2021		March 28, 2020		March 27, 2021			March 28, 2020			March 27, 2021			March 28, 2020
					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 — Cash flow hedges	$	168.9	$	229.0	PP	$	5.0	PP	$	7.4		$	—	AE	$	0.4
IRS — Fixed-rate debt	—		300.0			—			—			—		AE	0.2
Net investment hedges(c)	723.2		683.6		ONCA	10.2		ONCA	48.6		ONCL	55.1		AE	4.0
Total Designated Hedges	892.1		1,212.6			15.2			56.0			55.1			4.6
Undesignated Hedges:
FC — Undesignated hedges(d)	242.4		473.5		PP	0.6		PP	6.3		AE	0.3		AE	2.3
Total Hedges	$	1,134.5	$	1,686.1		$	15.8		$	62.3		$	55.4		$	6.9


			F-38

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

**(a)**FC = Forward foreign currency exchange contracts; IRS = Interest rate swap contracts.

**(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)**Includes cross-currency swaps designated as hedges of the Company's net investment in certain foreign operations.

**(d)**Relates to third-party and intercompany foreign currency-denominated exposures and balances.

The Company presents the fair values of its derivative assets and liabilities recorded on its consolidated balance sheets on a gross basis, even when 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 ten separate counterparties, the amounts presented in the consolidated balance sheets as of March 27, 2021 and March 28, 2020 would be adjusted from the current gross presentation as detailed in the following table:


	March 27, 2021						March 28, 2020
	Gross Amounts Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements		Net Amount		Gross Amounts Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements		Net Amount
	(millions)
Derivative assets	$	15.8	$	(0.3)	$	15.5	$	62.3	$	(6.1)	$	56.2
Derivative liabilities	55.4		(0.3)		55.1		6.9		(6.1)		0.8

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

The following tables summarize the pretax impact 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
	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Designated Hedges:
FC — Cash flow hedges	$	(3.5)	$	24.0	$	47.5
Net investment hedges — effective portion	(35.5)		7.7		64.5
Net investment hedges — portion excluded from assessment of hedge effectiveness	(50.8)		30.7		1.6
Total Designated Hedges	$	(89.8)	$	62.4	$	113.6


	Location and Amount of Gains (Losses) from Cash Flow Hedges Reclassified from AOCI to Earnings
	Fiscal Years Ended
	March 27, 2021				March 28, 2020				March 30, 2019
	Cost of goods sold		Other income (expense), net		Cost of goods sold		Other income (expense), net		Cost of goods sold		Other income (expense), net
	(millions)
Total amounts presented in the consolidated statements of operations in which the effects of related cash flow hedges are recorded	$	(1,539.4)	$	7.6	$	(2,506.5)	$	(7.4)	$	(2,427.0)	$	0.6
Effects of cash flow hedging:
FC — Cash flow hedges	12.6		(0.3)		24.9		1.1		5.0		1.7


			F-39

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Gains (Losses) from Net Investment Hedges Recognized in Earnings						Location of Gains (Losses) Recognized in Earnings
	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Net Investment Hedges:
Net investment hedges — portion excluded from assessment of hedge effectiveness(a)	$	11.3	$	19.0	$	19.0	Interest expense
Total Net Investment Hedges	$	11.3	$	19.0	$	19.0

**(a)**Amounts recognized in OCI relating to the effective portion of the Company's net investment hedges would be recognized in earnings only upon the sale or liquidation of the hedged net investment.

As of March 27, 2021, it is estimated that $4.9 million of pretax net gains on both outstanding and matured derivative instruments designated and qualifying as cash flow hedges deferred in AOCI will be recognized in earnings over the next twelve months. Amounts ultimately recognized in earnings will depend on exchange rates in effect when outstanding derivative instruments are settled.

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
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Undesignated Hedges:
FC — Undesignated hedges	$	(0.8)	$	16.0	$	3.1	Other income (expense), net
Total Undesignated Hedges	$	(0.8)	$	16.0	$	3.1

Risk Management Strategies

Forward Foreign Currency Exchange Contracts

The Company uses forward foreign currency exchange contracts to mitigate its risk related to exchange rate fluctuations on inventory transactions made in an entity's non-functional currency, the settlement of foreign currency-denominated balances, and the translation of certain foreign operations' net assets into U.S. dollars. As part of its overall strategy for managing the level of exposure to such exchange rate risk, relating primarily to the Euro, the Japanese Yen, the South Korean Won, the Australian Dollar, the Canadian Dollar, the British Pound Sterling, the Swiss Franc, and the Chinese Renminbi, the Company generally hedges a portion of its related exposures anticipated over the next twelve months using forward foreign currency exchange contracts with maturities of two months to one year to provide continuing coverage over the period of the respective exposure.

Interest Rate Swap Contracts

The Company periodically designates pay-floating rate, receive-fixed rate interest rate swap contracts as hedges against changes in the fair value of its fixed-rate debt attributed to changes in a benchmark interest rate. To the extent of their notional amount, such contracts effectively swap the fixed interest rate on certain of the Company's fixed-rate senior notes for a variable interest rate based on the 3-month LIBOR plus a fixed spread. Changes in the fair value of the Company's interest rate swap contracts were offset by changes in the fair value of the corresponding senior notes attributed to changes in the benchmark interest rate, with no resulting net impact reflected in earnings during any of the fiscal years presented.


			F-40

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the carrying value of the hedged senior notes and the impacts of the related fair value hedging adjustments as of March 27, 2021 and March 28, 2020:


		Carrying Value of the Hedged Item			Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Item
Hedged Item	Balance Sheet Line in which the Hedged Item is Included	March 27, 2021	March 28, 2020		March 27, 2021	March 28, 2020
		(millions)
$300 million 2.625% Senior Notes(a)	Current portion of long-term debt	N/A	$	299.6	N/A	$	(0.2)

**(a)**The interest rate swap contract designated as a fair value hedge of the Company's 2.625% Senior Notes was settled during Fiscal 2021 at a loss of $0.3 million.

Cross-Currency Swap Contracts

The Company periodically designates (i) pay-floating rate, receive-floating rate cross-currency swap contracts or (ii) pay-fixed rate, receive fixed-rate cross-currency swap contracts as hedges of its net investment in certain of its European subsidiaries.

The Company's pay-floating rate, receive-floating rate cross-currency swap contracts swap U.S. Dollar-denominated variable interest rate payments based on the contract's notional amount and 3-month LIBOR plus a fixed spread (as paid under a corresponding interest rate swap contract discussed above) for Euro-denominated variable interest rate payments based on 3-month Euro Interbank Offered Rate ("EURIBOR") plus a fixed spread, which, in combination with the corresponding interest rate swap contract, economically converts a portion of the Company's fixed-rate U.S. Dollar-denominated senior note obligations to floating-rate Euro-denominated obligations.

The Company's pay-fixed rate, receive-fixed rate cross-currency swap contracts swap U.S. Dollar-denominated fixed interest rate payments based on the contract's notional amount and the fixed rate of interest payable on certain of the Company's senior notes for Euro-denominated fixed interest rate payments, thereby economically converting a portion of its fixed-rate U.S. Dollar-denominated senior note obligations to fixed-rate Euro-denominated obligations.

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

Investments

As of March 27, 2021, the Company's investments were all classified as short-term and consisted of $197.5 million of time deposits. The Company's investments as of March 28, 2020 were also all classified as short-term and consisted of $252.3 million of time deposits and $243.6 million of commercial paper.

No significant realized or unrealized gains or losses on available-for-sale investments or impairment charges were recorded in any of the fiscal years presented.

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


			F-41

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Leases

The following table summarizes ROU assets and lease liabilities recorded on the Company's consolidated balance sheet:


	March 27, 2021		March 28, 2020		Location Recorded on Balance Sheet
	(millions)
Assets:
Operating leases	$	1,239.5	$	1,511.6	Operating lease right-of-use assets
Finance leases	331.6		166.4		Property and equipment, net
Total lease assets	$	1,571.1	$	1,678.0
Liabilities:
Operating leases:
Current portion	$	302.9	$	288.4	Current operating lease liabilities
Non-current portion	1,294.5		1,568.3		Long-term operating lease liabilities
Total operating lease liabilities	1,597.4		1,856.7
Finance leases:
Current portion	19.7		9.8		Accrued expenses and other current liabilities
Non-current portion	370.5		189.4		Other non-current liabilities
Total finance lease liabilities	390.2		199.2
Total lease liabilities	$	1,987.6	$	2,055.9

The following table summarizes the composition of total lease cost during Fiscal 2021 and Fiscal 2020:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		Location Recorded in Earnings
	(millions)
Operating lease cost	$	323.5	$	322.0	(a)
Finance lease costs:
Depreciation of leased assets	20.5		18.1		SG&A expenses
Accretion of lease liabilities	9.7		8.1		Interest expense
Variable lease cost	224.7		298.0		(b)
Short-term lease cost	4.9		5.5		SG&A expenses
Sublease income	(1.8)		(2.9)		Restructuring and other charges
Total lease cost	$	581.5	$	648.8

**(a)**During Fiscal 2021, $3.4 million was included within cost of goods sold, $307.0 million was included within SG&A expenses, and $13.1 million was included within restructuring and other charges. During Fiscal 2020, $4.4 million was included within cost of goods sold, $307.3 million was included within SG&A expenses, and $10.3 million was included within restructuring and other charges.

**(b)**During Fiscal 2021, $4.5 million was included within cost of goods sold and $220.2 million was included within SG&A expenses. During Fiscal 2020, $4.7 million was included within cost of goods sold, $290.3 million was included within SG&A expenses, and $3.0 million was included within restructuring and other charges.

During Fiscal 2019, in accordance with lease accounting guidance then in effect (prior to adoption of ASU 2016-02), the Company recognized rent expense of approximately $449.3 million, net of insignificant sublease income, related to its operating leases, which included contingent rental charges of approximately $192.0 million and does not include costs related to non-lease components.


			F-42

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes certain cash flow information related to the Company's leases:


	Fiscal Year Ended
	March 27, 2021		March 28, 2020
	(millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	360.6	$	383.9
Operating cash flows from finance leases	6.7		8.0
Financing cash flows from finance leases	13.9		13.6

See Note 21 for supplemental non-cash information related to ROU assets recorded in connection with the recognition of new lease liabilities.

The following table presents a maturity analysis summary of contractual cash payments for the Company's lease liabilities recorded on the consolidated balance sheet as of March 27, 2021:


	March 27, 2021
	Operating Leases		Finance Leases
	(millions)
Fiscal 2022	$	332.7	$	33.7
Fiscal 2023	303.5		35.2
Fiscal 2024	267.0		35.5
Fiscal 2025	212.2		35.9
Fiscal 2026	150.3		36.2
Fiscal 2027 and thereafter	458.4		312.7
Total lease payments	1,724.1		489.2
Less: interest	(126.7)		(99.0)
Total lease liabilities	$	1,597.4	$	390.2

Additionally, the Company has $107.4 million of future payment obligations relating to executed lease agreements for which the related lease terms had not yet commenced as of the end of Fiscal 2021, and, therefore, are not recorded on the consolidated balance sheet as of March 27, 2021.

The following table summarizes the weighted-average remaining lease terms and weighted-average discount rates related to the Company's operating and finance leases recorded on the consolidated balance sheet as of March 27, 2021:


	March 27, 2021				March 28, 2020
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Weighted-average remaining lease term (years)	6.9		14.2		7.6		12.7
Weighted-average discount rate	2.0	%	3.3	%	2.1	%	4.1	%

See Note 3 for discussion of the Company's accounting policies related to leases.


			F-43

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Commitments and Contingencies

U.S. Tax Reform

In connection with the TCJA's provision that subjects previously deferred foreign earnings to a one-time mandatory transition tax, the Company recorded cumulative charges of approximately $241 million within its income tax provision in prior fiscal years (as described in Note 10). The remaining related income tax payable obligation of $132.7 million as of March 27, 2021, which was reduced by foreign tax credits and other federal income tax activity, is expected to be paid as follows:


	Mandatory Transition Tax Payments(a)
	(millions)
Fiscal 2022	$	14.0
Fiscal 2023	14.0
Fiscal 2024	26.2
Fiscal 2025	34.9
Fiscal 2026	43.6

Total mandatory transition tax payments	$	132.7

**(a)**Included within current and non-current income tax payable in the consolidated balance sheets based upon the estimated timing of payments.

See Note 10 for further discussion of the TCJA and its enactment-related impacts on the Company's consolidated financial statements.

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 $1.190 billion as of March 27, 2021, including inventory purchase commitments of $713.7 million, lease commitments related to lease agreements for which the related lease terms have not yet commenced of $107.4 million, outstanding letters of credit of $8.9 million, interest payments related to the Company's debt of $282.4 million, and other commitments of $77.2 million, comprised of the Company's legally-binding obligations under sponsorship, licensing, and other marketing and advertising agreements, information technology-related service agreements, and pension-related obligations.

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 any 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.


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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. 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 2020, the Lauren Family, L.L.C., a limited liability company managed by the children of Mr. Ralph 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. These conversions occurred in advance of a sales plan providing for the sale of such shares of Class A common stock pursuant to Rule 10b5-1 subject to the conditions set forth therein. These transactions resulted in a reclassification within equity and had no effect on the Company's consolidated balance sheet.

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
	March 27, 2021		March 28, 2020		March 30, 2019
	(in millions)
Cost of shares repurchased	$	—	$	650.3	$	470.0
Number of shares repurchased	—		6.2		3.8

On May 13, 2019, the Company's Board of Directors approved an expansion of the Company's existing common stock repurchase program that allowed it to repurchase up to an additional $600 million of Class A common stock. As of March 27, 2021, the remaining availability under the Company's Class A common stock repurchase program was approximately $580 million. Repurchases of shares of Class A common stock are subject to certain restrictions under the Company's Global Credit Facility and more generally overall business and market conditions. Accordingly, as a result of business disruptions related to the COVID-19 pandemic, effective beginning in the first quarter of Fiscal 2021 the Company temporarily suspended its common stock repurchase program as a preemptive action to preserve cash and strengthen its liquidity position.

In addition, during Fiscal 2021, Fiscal 2020, and Fiscal 2019, 0.5 million, 0.4 million, and 0.3 million shares of Class A common stock, respectively, at a cost of $37.7 million, $44.5 million, and $32.6 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 long-term stock incentive plans.

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

Dividends

Except as discussed below, the Company has maintained a regular quarterly cash dividend program on its common stock since 2003. On May 13, 2019, the Company's Board of Directors approved an increase to the Company's quarterly cash dividend on its common stock from $0.625 to $0.6875 per share.

As a result of business disruptions related to the COVID-19 pandemic, effective beginning in the first quarter of Fiscal 2021 the Company temporarily suspended its quarterly cash dividend program as a preemptive action to preserve cash and strengthen its liquidity position. On May 19, 2021, the Company's Board of Directors approved the reinstatement of its


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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

quarterly cash dividend program at the pre-pandemic amount of $0.6875 per share. The first quarterly dividend since such reinstatement will be payable to shareholders of record at the close of business on June 25, 2021, and will be paid on July 9, 2021.

The Company intends to pay regular dividends on its outstanding common stock. However, any decision to declare and pay dividends in the future will be made at the discretion of the Company's Board of Directors and will depend on the Company's results of operations, cash requirements, financial condition, and other factors that the Board of Directors may deem relevant, including economic and market conditions.

17. Accumulated Other Comprehensive Income (Loss)

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


	Foreign Currency Translation Gains (Losses)(a)		Net Unrealized Gains (Losses) on Cash Flow Hedges(b)		Net Unrealized Gains (Losses) on Defined Benefit Plans(c)		Total Accumulated Other Comprehensive Income (Loss)
	(millions)
Balance at March 31, 2018	$	(79.3)	$	(16.0)	$	(3.2)	$	(98.5)
Other comprehensive income (loss), net of tax:
OCI before reclassifications	(39.2)		42.2		(2.0)		1.0
Amounts reclassified from AOCI to earnings	—		(6.0)		0.1		(5.9)
Other comprehensive income (loss), net of tax	(39.2)		36.2		(1.9)		(4.9)
Balance at March 30, 2019	(118.5)		20.2		(5.1)		(103.4)
Other comprehensive income (loss), net of tax:
OCI before reclassifications	(7.0)		21.2		(1.6)		12.6
Amounts reclassified from AOCI to earnings	(4.9)		(23.4)		0.9		(27.4)
Other comprehensive loss, net of tax	(11.9)		(2.2)		(0.7)		(14.8)
Balance at March 28, 2020	(130.4)		18.0		(5.8)		(118.2)
Other comprehensive income (loss), net of tax:
OCI before reclassifications	7.2		(3.0)		3.3		7.5
Amounts reclassified from AOCI to earnings	—		(10.4)		0.3		(10.1)
Other comprehensive income (loss), net of tax	7.2		(13.4)		3.6		(2.6)
Balance at March 27, 2021	$	(123.2)	$	4.6	$	(2.2)	$	(120.8)

**(a)**OCI before reclassifications to earnings related to foreign currency translation gains (losses) includes an income tax benefit of $22.1 million for Fiscal 2021 and includes income tax provisions of $9.2 million and $10.8 million for Fiscal 2020 and Fiscal 2019, respectively. OCI before reclassifications to earnings includes a loss of $65.6 million (net of a $20.7 million income tax benefit) for Fiscal 2021 and includes gains of $29.0 million (net of a $9.4 million income tax provision) and $50.2 million (net of a $15.9 million income tax provision) for Fiscal 2020 and Fiscal 2019, respectively, related to the effective portion of changes in the fair values of instruments designated as hedges of the Company's net investment in certain foreign operations (see Note 13). Amounts reclassified from AOCI to earnings related to foreign currency translation gains (losses) during Fiscal 2020 relate to the reclassification to retained earnings of income tax effects stranded in AOCI.

**(b)**OCI before reclassifications to earnings related to net unrealized gains (losses) on cash flow hedges are presented net of an income tax benefit of $0.5 million for Fiscal 2021 and are presented net of income tax provisions of $2.8 million and $5.3 million for Fiscal 2020 and Fiscal 2019, respectively. The tax effects on amounts reclassified from AOCI to earnings are presented in a table below.

**(c)**OCI before reclassifications to earnings related to net unrealized gains (losses) on defined benefit plans are presented net of an income tax provision of $1.2 million for Fiscal 2021. The tax effects on OCI before reclassifications to earnings were immaterial for the other periods presented, and were immaterial for amounts reclassified from AOCI to earnings for all periods presented.


			F-46

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
	March 27, 2021		March 28, 2020		March 30, 2019		Location of Gains (Losses) Reclassified from AOCI to Earnings
	(millions)
Gains (losses) on cash flow hedges(a):
FC — Cash flow hedges	$	12.6	$	24.9	$	5.0	Cost of goods sold
FC — Cash flow hedges	(0.3)		1.1		1.7		Other income (expense), net
Tax effect	(1.9)		(2.6)		(0.7)		Income tax benefit (provision)
Net of tax	$	10.4	$	23.4	$	6.0

**(a)**FC = Forward foreign currency exchange contracts.

18. Stock-based Compensation

Long-term Stock Incentive Plans

On August 1, 2019, the Company's shareholders approved the 2019 Long-Term Stock Incentive Plan (the "2019 Incentive Plan"), which replaced the Company's Amended and Restated 2010 Long-Term Stock Incentive Plan (the "2010 Incentive Plan"). The 2019 Incentive Plan provided for 1.2 million of new shares authorized for issuance to the participants, in addition to the approximately 3.0 million shares that remained available for issuance under the 2010 Incentive Plan as of August 1, 2019. In addition, any outstanding awards under the 2010 Incentive Plan or the Company's 1997 Long-Term Stock Incentive Plan (the "1997 Incentive Plan") that expire, are forfeited, or are surrendered to the Company in satisfaction of taxes, will become available for issuance under the 2019 Incentive Plan. The 2019 Incentive Plan became effective August 1, 2019 and no further grants will be made under the 2010 Incentive Plan. Outstanding awards issued prior to August 1, 2019 will continue to remain subject to the terms of the 2010 Incentive Plan or 1997 Incentive Plan, as applicable. As of March 27, 2021, 3.2 million shares remained available for future issuance under the Company's incentive plans.

Stock-based compensation awards that may be made under the 2019 Incentive Plan include, but are not limited to, (i) restricted stock, (ii) RSUs, and (iii) stock options. During the fiscal periods presented, annual grants consisted entirely of restricted stock and RSUs. Additionally, for RSUs granted to retirement-eligible employees, or employees who 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 total stock-based compensation expense and the related income tax benefits recognized is as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Compensation expense(a)	$	72.7	$	100.6	$	88.6
Income tax benefit	(12.4)		(15.3)		(13.1)

**(a)**Fiscal 2020 includes $3.6 million of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of operations (see Note 9). All other stock-based compensation expense was recorded within SG&A expenses.

The Company issues its annual grants of stock-based compensation awards in the first half of each fiscal year. Due to the timing of the annual grants and other factors, including the timing and magnitude of forfeiture and performance goal achievement adjustments, as well as changes to the size and composition of the eligible employee population, stock-based compensation expense recognized during any given fiscal period is not indicative of the level of compensation expense expected to be incurred in future periods.


			F-47

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restricted Stock Awards and Service-based RSUs

Restricted stock awards 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. Effective beginning Fiscal 2019, non-employee directors are now granted service-based RSUs in lieu of restricted shares.

Service-based RSUs granted to certain of the Company's senior executives and other employees, as well as non-employee directors, generally vest over a three-year period, subject to the employee's continuing employment (except for awards granted to retirement-eligible employees, or employees who 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 for which dividend equivalent amounts do not accrue while outstanding and unvested.

A summary of restricted stock and service-based RSU activity during Fiscal 2021 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, 2020	4	$	81.78	1,094	$	100.92
Granted	—	N/A		1,351	64.55
Vested	(4)	81.78		(480)	94.95
Forfeited	—	N/A		(156)	79.30
Nonvested at March 27, 2021	—	$	—	1,809	$	77.20


	Restricted Stock		Service- based RSUs
Total unrecognized compensation expense at March 27, 2021 (millions)	$	—	$	53.6
Weighted-average period expected to be recognized over (years)	N/A		1.7

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


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
Restricted Stock:
Weighted-average grant date fair value of awards granted	N/A		N/A		N/A
Total fair value of awards vested (millions)	$	0.2	$	0.9	$	1.0
Service-based RSUs:
Weighted-average grant date fair value of awards granted	$	64.55	$	102.27	$	113.38
Total fair value of awards vested (millions)	$	33.4	$	52.5	$	50.0


			F-48

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Performance-based RSUs

The Company grants performance-based RSUs to its senior executives and other key employees. The fair values of performance-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 for which dividend equivalent amounts do not accrue while outstanding and unvested. 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 to retirement-eligible employees, or employees who 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 to retirement-eligible employees, or employees who 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, beginning with grants in Fiscal 2019, the number of shares that may be earned ranges between 0% (if the specified threshold performance level is not attained) and 200% (if performance meets or exceeds the maximum achievement level) of the awards originally granted. For such awards granted in recent years prior to Fiscal 2019, 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.

No performance-based awards were granted during Fiscal 2021 as the Company elected to temporarily issue service-based RSUs in lieu of performance-based RSUs as a result of business disruptions and uncertainty created by the COVID-19 pandemic. Additionally, performance metrics of certain cliff-vesting performance-based RSUs granted during prior years were changed during Fiscal 2021 and their related payout ranges lowered, with no resulting incremental compensation cost.

Market-based RSUs

During Fiscal 2019, the Company began granting cliff vesting RSU awards to its senior executives and other key employees, which, in addition to being subject to continuing employment requirements (except for awards granted to retirement-eligible employees, or employees who become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed), are also subject to a market condition based on a TSR performance metric. The number of shares that vest upon the completion of a three-year period of time is determined by comparing the Company's TSR relative to that of a pre-established peer group over the related three-year performance period. Depending on the Company's level of achievement against its TSR performance goals, the number of shares that ultimately vest may range from 0% to 200% of the awards originally granted.

The Company estimates the fair value of its TSR awards on the date of grant using a Monte Carlo simulation, which models multiple stock price paths of the Company's Class A common stock and that of its peer group to evaluate and determine its ultimate expected relative TSR performance ranking. Compensation expense, net of estimated forfeitures, is recorded regardless of whether, and the extent to which, the market condition is ultimately satisfied. No such awards were granted during Fiscal 2021 as the Company has elected to temporarily issue service-based RSUs in lieu of performance-based RSUs as a result of business disruptions and uncertainty created by the COVID-19 pandemic.


			F-49

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The assumptions used to estimate the fair value of TSR awards granted during Fiscal 2020 and Fiscal 2019 were as follows:


	Fiscal Year Ended
	March 28, 2020			March 30, 2019
Expected term (years)	2.6			2.6
Expected volatility	31.4		%	33.5		%
Expected dividend yield	3.2		%	1.9		%
Risk-free interest rate	1.4		%	2.6		%
Weighted-average grant date fair value	$	90.59		$	177.13

A summary of performance-based RSU activity including TSR awards during Fiscal 2021 is as follows:


	Performance-based RSUs
	Number of Shares	Weighted-Average Grant Date Fair Value
	(thousands)
Nonvested at March 28, 2020	1,168	$	89.97
Granted	—	N/A
Change due to performance and/or market condition achievement	185	69.82
Vested	(720)	71.46
Forfeited	(33)	92.11
Nonvested at March 27, 2021	600	$	105.85


	Performance-based RSUs
Total unrecognized compensation expense at March 27, 2021 (millions)	$	13.2
Weighted-average period expected to be recognized over (years)	1.0

Additional information pertaining to performance-based RSU activity including TSR awards is as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
Performance-based RSUs:
Weighted-average grant date fair value of awards granted	N/A		$	85.80	$	145.97
Total fair value of awards vested (millions)	$	55.0	$	52.8	$	31.8


			F-50

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. No stock options were granted during any of the fiscal years presented.

A summary of stock option activity during Fiscal 2021 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, 2020	518	$	169.37	0.9	$	—
Granted	—	N/A
Exercised	—	N/A
Cancelled/Forfeited	(263)	178.63
Options outstanding at March 27, 2021	255	$	159.83	0.3	$	—

Options vested at March 27, 2021(b)	255	$	159.83	0.3	$	—
Options exercisable at March 27, 2021	255	$	159.83	0.3	$	—

**(a)**Aggregate intrinsic value is the amount by which the market price of the Company's 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)**There were no nonvested stock options as of March 27, 2021. Accordingly, there was no related unrecognized compensation expense as of March 27, 2021.

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


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Aggregate intrinsic value of stock options exercised(a)	$	—	$	—	$	1.2
Cash received from the exercise of stock options	—		—		21.8
Tax benefits realized on exercise of stock options	—		—		3.7

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


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RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. Employee Benefit Plans

Defined Contribution 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 an "above target" performance level based on certain goals established at the beginning of each fiscal year, increasing the matching contribution to between 67% and 100% depending on the performance level achieved, 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 $9.8 million, $8.7 million, and $11.2 million in Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively.

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 assets of $0.7 million and net liabilities of $4.0 million as of March 27, 2021 and March 28, 2020, respectively, and were primarily recorded within other non-current assets and non-current liabilities, respectively, in the Company's consolidated balance sheets. These single-employer defined benefit plans had aggregate projected benefit obligations of $56.1 million and aggregate fair values of plan assets of $56.8 million as of March 27, 2021, compared to aggregate projected benefit obligations of $52.4 million and aggregate fair values of plan assets of $48.4 million as of March 28, 2020. 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 12. Net pension expense for these plans was $5.1 million, $5.0 million, and $4.2 million in Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively. The service cost component of $5.9 million, $4.7 million, and $4.4 million in Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively, was recorded within SG&A expenses in the Company's consolidated statements of operations. All other components of net pension expense during the fiscal years presented were recorded within other income (expense), net, in the Company's consolidated statement of operations.

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.

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 March 27, 2021 and March 28, 2020, amounts accrued under this plan totaled $1.9 million and $3.4 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 fiscal years presented.


			F-52

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20. Segment Information

The Company has three reportable segments based on its business activities and organization:

North America — The North America segment primarily consists of sales of Ralph Lauren branded apparel, footwear, accessories, home furnishings, and related products made through the Company's retail and wholesale businesses in the U.S. and Canada, excluding Club Monaco. In North America, the Company's retail business is primarily comprised of its Ralph Lauren stores, its factory stores, and its digital commerce site, www.RalphLauren.com. The Company's wholesale business in North America is comprised primarily of sales to department stores, and to a lesser extent, specialty stores.
Europe — The Europe segment primarily consists of sales of Ralph Lauren branded apparel, footwear, accessories, home furnishings, and related products made through the Company's retail and wholesale businesses in Europe, the Middle East, and Latin America, excluding Club Monaco. In Europe, the Company's retail business is primarily comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its various digital commerce sites. The Company's wholesale business in Europe is comprised of a varying mix of sales to both department stores and specialty stores, depending on the country, as well as to various third-party digital partners.
Asia — The Asia segment primarily consists of sales of Ralph Lauren branded apparel, footwear, accessories, home furnishings, and related products made through the Company's retail and wholesale businesses in Asia, Australia, and New Zealand. The Company's retail business in Asia is primarily comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its various digital commerce sites. In addition, the Company sells its products online through various third-party digital partner commerce sites. The Company's wholesale business in Asia is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.

No operating segments were aggregated to form the Company's reportable segments. In addition to these reportable segments, the Company also has other non-reportable segments, which primarily consist of (i) sales of Club Monaco branded products made through its retail and wholesale businesses in the U.S., Canada, and Europe, and its licensing alliances in Europe and Asia, and (ii) royalty revenues earned through its global licensing alliances, excluding Club Monaco. As discussed in Note 9, on May 13, 2021, the Company announced the anticipated sale of its Club Monaco business, which is expected to close by the end of the first quarter of Fiscal 2022.

The Company's segment reporting structure is consistent with how it establishes its overall business strategy, allocates resources, and assesses performance of its business. 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 are eliminated in consolidation and are not reviewed when evaluating segment performance. Each segment's performance is evaluated based upon net revenues and operating income before restructuring-related charges, impairment of assets, and certain other one-time items, 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. Asset information by segment is not utilized for purposes of assessing performance or allocating resources, and therefore such information has not been presented.


			F-53

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Net revenues:
North America	$	1,992.4	$	3,140.5	$	3,202.9
Europe	1,165.9		1,632.2		1,683.0
Asia	1,027.5		1,017.2		1,041.0
Other non-reportable segments	215.0		369.9		386.1
Total net revenues	$	4,400.8	$	6,159.8	$	6,313.0

Operating income (loss) for each of the Company's segments is as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Operating income (loss)(a):
North America	$	334.0	$	456.0	$	655.8
Europe	189.3		336.3		392.8
Asia	148.2		124.8		161.0
Other non-reportable segments	32.4		85.2		118.7
	703.9		1,002.3		1,328.3
Unallocated corporate expenses	(577.0)		(618.1)		(636.4)
Unallocated restructuring and other charges(b)	(170.5)		(67.2)		(130.1)
Total operating income (loss)	$	(43.6)	$	317.0	$	561.8

**(a)**Segment operating income during Fiscal 2021 reflects bad debt expense reversals of $22.0 million, $4.8 million, $0.3 million, and $0.5 million related to North America, Europe, Asia, and other non-reportable segments, respectively, primarily related to adjustments to reserves previously established in connection with COVID-19 business disruptions. Segment operating income during Fiscal 2020 reflects bad debt expense of $38.7 million, $15.2 million, $1.7 million, and $3.1 million related to North America, Europe, Asia, and other non-reportable segments, respectively, primarily related to adverse impacts associated with COVID-19 business disruptions. Segment operating income during Fiscal 2020 also reflects higher inventory charges of approximately $108 million, $42 million, $17 million, and $8 million as compared to the prior fiscal year related to North America, Europe, Asia, and other non-reportable segments, respectively, primarily related to adverse impacts associated with COVID-19 business disruptions. Segment operating income and unallocated corporate expenses during the fiscal years presented also included asset impairment charges (see Note 8), which are detailed below:


			F-54

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Asset impairment charges:
North America	$	(12.2)	$	(1.9)	$	(3.1)
Europe	(24.3)		—		(5.4)
Asia	(1.4)		(3.7)		(4.4)
Other non-reportable segments	(18.2)		(19.3)		(7.0)
Unallocated corporate expenses	(39.9)		(6.7)		(5.9)
Total asset impairment charges	$	(96.0)	$	(31.6)	$	(25.8)

**(b)**The fiscal years presented included certain unallocated restructuring and other charges (see Note 9), which are detailed below:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Unallocated restructuring and other charges:
North America-related	$	(22.4)	$	(1.2)	$	(27.0)
Europe-related	(30.0)		(3.3)		(14.9)
Asia-related	(7.4)		(0.9)		(0.9)
Other non-reportable segment-related	(3.3)		(0.8)		(4.5)
Corporate operations-related	(96.0)		(31.4)		(46.3)
Unallocated restructuring charges	(159.1)		(37.6)		(93.6)
Other charges (see Note 9)	(11.4)		(29.6)		(36.5)
Total unallocated restructuring and other charges	$	(170.5)	$	(67.2)	$	(130.1)

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


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Depreciation and amortization expense:
North America	$	73.4	$	74.6	$	81.8
Europe	31.6		32.8		33.6
Asia	56.3		59.3		49.1
Other non-reportable segments	4.3		5.4		7.2
Unallocated corporate	82.0		97.4		95.5
Unallocated restructuring and other charges (see Note 9)	—		—		14.1
Total depreciation and amortization expense	$	247.6	$	269.5	$	281.3


			F-55

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Capital expenditures:
North America	$	23.8	$	48.5	$	74.6
Europe	16.9		34.3		26.6
Asia	41.2		59.6		45.2
Other non-reportable segments	2.4		7.3		5.0
Unallocated corporate	23.5		120.6		46.3
Total capital expenditures	$	107.8	$	270.3	$	197.7

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


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Net revenues(a):
The Americas(b)	$	2,208.4	$	3,516.4	$	3,602.2
Europe(c)	1,164.3		1,625.3		1,668.6
Asia(d)	1,028.1		1,018.1		1,042.2
Total net revenues	$	4,400.8	$	6,159.8	$	6,313.0


	March 27, 2021		March 28, 2020
	(millions)
Long-lived assets(a):
The Americas(b)	$	1,253.6	$	1,383.6
Europe(c)	682.1		772.9
Asia(d)	317.8		334.6
Total long-lived assets	$	2,253.5	$	2,491.1

**(a)**For certain of the Company's licensed operations, net revenues and long-lived assets, which is comprised of property and equipment and lease ROU assets, 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 $2.103 billion, $3.308 billion, and $3.379 billion in Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively. Long-lived assets located in the U.S. were $1.210 billion and $1.327 billion as of March 27, 2021 and March 28, 2020, respectively.

**(c)**Includes the Middle East.

**(d)**Includes Australia and New Zealand.


			F-56

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

21. Additional Financial Information

Reconciliation of Cash, Cash Equivalents, and Restricted Cash

A reconciliation of cash, cash equivalents, and restricted cash as of March 27, 2021 and March 28, 2020 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:


	March 27, 2021		March 28, 2020
	(millions)
Cash and cash equivalents	$	2,579.0	$	1,620.4
Restricted cash included within prepaid expenses and other current assets	1.5		1.4
Restricted cash included within other non-current assets	7.5		8.0
Total cash, cash equivalents, and restricted cash	$	2,588.0	$	1,629.8

Restricted cash relates to cash held in escrow with certain banks as collateral, primarily to secure guarantees in connection with certain international tax matters and real estate leases.

Cash Interest and Taxes

Cash paid for interest and income taxes is as follows:


	Fiscal Years Ended
	March 27, 2021		March 28, 2020		March 30, 2019
	(millions)
Cash paid for interest	$	33.5	$	15.4	$	17.3
Cash paid for income taxes, net of refunds	47.8		135.5		102.0

Non-cash Transactions

Operating and finance lease ROU assets recorded in connection with the recognition of new lease liabilities were $66.7 million and $133.2 million, respectively, during Fiscal 2021, and $374.0 million and $64.0 million, respectively, during Fiscal 2020. Additionally, $55.7 million of operating lease ROU assets were reclassified and reflected as finance lease ROU assets as a result of certain lease amendments executed during Fiscal 2021.

Non-cash investing activities also included capital expenditures incurred but not yet paid of $21.3 million, $29.1 million, and $47.6 million as of the end of Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively.

Non-cash financing activities included the conversion of 1.0 million shares of Class B common stock into an equal number of shares of Class A common stock during Fiscal 2020, as discussed in Note 16.

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


			F-57

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 2021, Fiscal 2020, and Fiscal 2019, 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 20, 2021


/s/ PATRICE LOUVET									/s/ JANE HAMILTON NIELSEN
Patrice Louvet									Jane Hamilton Nielsen
President and Chief Executive Officer									Chief Operating Officer and Chief Financial Officer
(Principal Executive Officer)									(Principal Financial and Accounting Officer)


			F-58

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Ralph Lauren Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Ralph Lauren Corporation (the "Company") as of March 27, 2021 and March 28, 2020, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended March 27, 2021, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 27, 2021 and March 28, 2020, and the results of its operations and its cash flows for each of the three years in the period ended March 27, 2021, 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) (PCAOB), the Company's internal control over financial reporting as of March 27, 2021, based on the 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 20, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.


			End-of-season Markdown Reserves

Description of the Matter			As disclosed in Note 3 of the consolidated financial statements, 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. Auditing management's estimate of end-of-season markdown reserves was complex and judgmental as reserve amounts are sensitive to changes in market or economic conditions (including the effects of the global pandemic), and have a direct, material impact on the amount of revenue recognized by the Company. There is also significant estimation required to establish markdown reserve rates by brand and customer, which are based on the Company's review of the seasonal negotiations with each customer and the expected performance of the products in the customers' stores.


			F-59


How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company's process to calculate the end-of-season markdown reserves, including the consideration of historical experience, actual and forecasted seasonal results, current economic and market conditions, (including the effects of the global pandemic), retailer performance, and contractual terms as applicable. To test the estimate of end-of-season markdown reserves, we performed audit procedures that included, among others, assessing methodologies and testing the assumptions regarding seasonal negotiations with each customer which include the application of market and economic conditions to individual customers and the expected performance of the products in the customers' stores that were used by the Company to calculate the projected markdown allowances to be issued upon settlement. We compared the significant assumptions used by management to current market and economic trends, historical results and other relevant factors. We assessed the historical accuracy of management's estimates and performed sensitivity analyses of significant assumptions to substantively test the changes in the estimate that would result from reasonable changes in the assumptions.

			Estimated Realizable Value of Inventory

Description of the Matter			As of March 27, 2021, the Company's net inventory balance was $759.0 million. As described in Note 3 to the consolidated financial statements, the valuation of inventory requires management to make assumptions and judgments about the recoverability of inventory and its estimated realizable value. The estimated realizable value of inventory is determined based on an analysis of historical sales trends, market trends and economic conditions (including the effects of the global pandemic), future sales forecasts, on-hand inventory quantities, and consideration of the value of existing customer orders for future sales of inventory. Given the importance of inventory to the Company's operations and the materiality of the balance, coupled with the judgment involved in estimating future sales, auditing management's estimated realizable value involved a higher extent of testing and the involvement of more senior members of the engagement team in executing, supervising and reviewing the results of the procedures.

How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the process to determine the estimated realizable value of inventory, including controls over the inputs and assumptions used in management's calculation as described above. Our audit procedures to test the estimated realizable value of inventory included, among others, evaluating the appropriateness of management's inputs to the calculation, including testing the completeness and accuracy of the data used in management's calculation such as historical sales activity and loss rates for each class of inventory, write-off activity, on-hand inventory levels and inventory aging. Our procedures also included testing the completeness of any expected net losses on firm commitments to purchase inventory. To evaluate management's ability to accurately estimate future sales projections, which is also a key factor in the determination of the reserve, we retrospectively reviewed actual sales compared to projections and considered the impact of the global pandemic on market trends and economic conditions. We also tested the mathematical accuracy of the Company's calculation.


			F-60


			Impairment of Long-Lived Assets

Description of the Matter			As discussed in Note 8 to the consolidated financial statements, the Company recorded non-cash impairment charges of $96.0 million to write-down certain long-lived assets (property and equipment and operating lease right-of-use ("ROU") assets). The Company evaluates its long-lived assets 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, the Company uses its best estimate of future cash flows expected to result from its use of the asset and its eventual disposition, where applicable. If such estimated future undiscounted net cash flows attributable to the asset are less than its carrying value, an impairment loss is recognized to the extent that such asset's carrying value exceeds its fair value, as estimated considering external market participant assumptions and discounted cash flows. To the extent any ROU assets, along with any related long-lived assets, are ultimately determined to be impaired, they are written down accordingly on a relative carrying amount basis, with the ROU asset written down to an amount no lower than its estimated fair value. Auditing the Company's impairment assessment of long-lived assets was complex and highly judgmental due to the significant estimation required in determining the future cash flows used to assess recoverability of each long-lived asset or asset group (undiscounted) and determining the fair value (discounted). The significant assumptions used include estimated future cash flows to be generated by the Company's long-lived assets or asset groups and the discount rates used to determine fair value. Significant assumptions used in determining the fair value of ROU assets also include current market rental rates and projected escalations as well as the discount rates applied for the respective remaining lease term. These assumptions are subjective in nature and are affected by expectations about future market or economic conditions (including the effects of the global pandemic).

How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the long-lived assets impairment process, including determining the undiscounted future cash flows of the Company's long-lived assets or asset groups and the fair value of the long-lived assets for the assets that were deemed to be impaired. Our testing of the impairment charges recorded by the Company included, among other procedures, evaluating the significant assumptions and data used to calculate the estimated future cash flows and to determine the fair value of the related long-lived assets. We tested the completeness and accuracy of the data used by the Company in its analyses and we compared the significant assumptions used to determine the forecasted cash flows to historical results, current industry and economic trends and inquired of the Company's executives to understand the business initiatives supporting the assumptions in the future cash flows. We involved our internal valuation specialists to assist in evaluating the fair value of certain of the assets, which included assessing the estimated market rental rates of these leases by comparing them to rental rates for comparable leases and evaluating the applied discount rates.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2008.

New York, New York

May 20, 2021


			F-61

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Ralph Lauren Corporation

Opinion on Internal Control over Financial Reporting

We have audited Ralph Lauren Corporation's internal control over financial reporting as of March 27, 2021, 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). In our opinion, Ralph Lauren Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 27, 2021, based on the COSO criteria.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 27, 2021 and March 28, 2020, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended March 27, 2021, and the related notes and our report dated May 20, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Definition and Limitations of Internal Control Over Financial Reporting

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.

/s/ Ernst & Young LLP

New York, New York

May 20, 2021


			F-62

Previous: Item 14. Principal Accounting Fees and Services.