CAPRI HOLDINGS LTD MANAGEMENT REPORT OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

The following Management's Discussion and Analysis ("MD&A") of our Financial
Condition and Results of Operations should be read in conjunction with the
consolidated financial statements and notes thereto included as part of this
interim report. Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and projections of
the management of the Company about future events, and are therefore subject to
risks and uncertainties which could cause actual results to differ materially
from the future results expressed or implied by the forward-looking statements.
All statements other than statements of historical facts included herein, may be
forward-looking statements. Without limitation, any statements preceded or
followed by or that include the words "plans", "believes", "expects", "intends",
"will", "should", "could", "would", "may", "anticipates", "might" or similar
words or phrases, are forward-looking statements. These forward-looking
statements are not guarantees of future financial performance. Such
forward-looking statements involve known and unknown risks and uncertainties
that could significantly affect expected results and are based on certain key
assumptions, which could cause actual results to differ materially from those
projected or implied in any forward-looking statements. These risks,
uncertainties and other factors include the effect of the COVID-19 pandemic and
its potential material and significant impact on the Company's future financial
and operational results if retail stores are forced to close again and the
pandemic is prolonged, including that our estimates could materially differ if
the severity of the COVID-19 situation worsens, or if there are further supply
chain disruptions, including additional production delays and increased costs,
the length and severity of such outbreak across the globe and the pace of
recovery following the COVID-19 pandemic, levels of cash flow and future
availability of credit, compliance with restrictive covenants under the
Company's credit agreement, the Company's ability to integrate successfully and
to achieve anticipated benefits of any acquisition and to successfully execute
our growth strategies; the risk of disruptions to the Company's businesses;
risks associated with operating in international markets and our global sourcing
activities; the risk of cybersecurity threats and privacy or data security
breaches; the negative effects of events on the market price of the Company's
ordinary shares and its operating results; significant transaction costs;
unknown liabilities; the risk of litigation and/or regulatory actions related to
the Company's businesses; fluctuations in demand for the Company's products;
levels of indebtedness (including the indebtedness incurred in connection with
acquisitions); the timing and scope of future share buybacks, which may be made
in open market or privately negotiated transactions, and are subject to market
conditions, applicable legal requirements, trading restrictions under the
Company's insider trading policy and other relevant factors, and such share
repurchases may be suspended or discontinued at any time, the level of other
investing activities and uses of cash; changes in consumer traffic and retail
trends; loss of market share and industry competition; fluctuations in the
capital markets; fluctuations in interest and exchange rates; the occurrence of
unforeseen epidemics and pandemics, disasters or catastrophes; political or
economic instability in principal markets; adverse outcomes in litigation; and
general, local and global economic, political, business and market conditions,
as well as those risks set forth in Item 1A. "Risk Factors" in our Annual Report
on Form 10-K for the year ended March 27, 2021, filed with the Securities and
Exchange Commission on May 26, 2021.

Overview

Our Business
Capri Holdings Limited is a global fashion luxury group, consisting of iconic
brands that are industry leaders in design, style and craftsmanship, led by a
world-class management team and renowned designers. Our brands cover the full
spectrum of fashion luxury categories including women's and men's accessories,
footwear and ready-to-wear as well as wearable technology, watches, jewelry,
eyewear and a full line of fragrance products. Our goal is to continue to extend
the global reach of our brands while ensuring that they maintain their
independence and exclusive DNA.
Our Versace brand has long been recognized as one of the world's leading
international fashion design houses and is synonymous with Italian glamour and
style. Founded in 1978 in Milan, Versace is known for its iconic and
unmistakable style and unparalleled craftsmanship. Over the past several
decades, the House of Versace has grown globally from its roots in haute
couture, expanding into the design, manufacturing, distribution and retailing of
accessories, ready-to-wear, footwear, eyewear, watches, jewelry, fragrance and
home furnishings businesses. Versace's design team is led by Donatella Versace,
who has been the brand's artistic director for over 20 years. Versace
distributes its products through a worldwide distribution network, which
includes boutiques in some of the world's most glamorous cities, its e-commerce
sites, as well as through the most prestigious department and specialty stores
worldwide.
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Our Jimmy Choo brand offers a distinctive, glamorous and fashion-forward product
range, enabling it to develop into a leading global luxury accessories brand,
whose core product offering is women's luxury shoes, complemented by
accessories, including handbags, small leather goods, scarves and belts, as well
as a growing men's luxury shoes and accessory business. In addition, certain
categories, such as fragrances and eyewear, are produced under licensing
agreements. Jimmy Choo's design team is led by Sandra Choi, who has been the
Creative Director for the brand since its inception in 1996. Jimmy Choo products
are unique, instinctively seductive and chic. The brand offers classic and
timeless luxury products, as well as innovative products that are intended to
set and lead fashion trends. Jimmy Choo is represented through its global store
network, its e-commerce sites, as well as through the most prestigious
department and specialty stores worldwide.
Our Michael Kors brand was launched 40 years ago by Michael Kors, whose vision
has taken the Company from its beginnings as an American luxury sportswear house
to a global accessories, footwear and ready-to-wear company with a global
distribution network that has presence in over 100 countries through
Company-operated retail stores and e-commerce sites, leading department stores,
specialty stores and select licensing partners. Michael Kors is a highly
recognized luxury fashion brand in the Americas and Europe with growing brand
awareness in other international markets. Michael Kors features distinctive
designs, materials and craftsmanship with a jet-set aesthetic that combines
stylish elegance and a sporty attitude. Michael Kors offers three primary
collections: the Michael Kors Collection luxury line, the MICHAEL Michael
Kors accessible luxury line and the Michael Kors Mens line. The Michael
Kors Collection establishes the aesthetic authority of the entire brand and is
carried by select retail stores, our e-commerce sites, as well as in the finest
luxury department stores in the world. MICHAEL Michael Kors has a strong focus
on accessories, in addition to offering footwear and ready-to-wear, and
addresses the significant demand opportunity in accessible luxury goods. We have
also been developing our men's business in recognition of the significant
opportunity afforded by the Michael Kors brand's established fashion authority
and the expanding men's market. Taken together, our Michael Kors collections
target a broad customer base while retaining our premium luxury image.
Certain Factors Affecting Financial Condition and Results of Operations
COVID-19 Pandemic. See Item 1A - "The COVID-19 pandemic may continue to have a
material adverse effect on our business and results of operations" of our Annual
Report on Form 10-K for the fiscal year ended March 27, 2021 for additional
discussion regarding risks to our business associated with the COVID-19
pandemic.

Channel shift, macroeconomic factors, and demand for our accessories and related
merchandise. Our performance is affected by trends in the luxury goods industry,
global consumer spending, macroeconomic factors, overall levels of consumer
travel and spending on discretionary items as well as shifts in demographics and
changes in lifestyle preferences. Through 2019, the personal luxury goods market
grew at a 5% rate over the past 20 years, with more recent growth driven by
stronger Chinese demand from both international and local consumers and
demographic and socioeconomic shifts resulting in younger consumers purchasing
more luxury goods. However, in 2020, due to the impact of the COVID-19 crisis,
the personal luxury goods market declined 23%. Market studies indicate that the
personal luxury goods market is predicted to increase at a 10% compound annual
growth rate between 2020 and 2025, and is expected to have returned to 2019
levels by the end of 2021 or in 2022. Future growth is expected to be driven by
e-commerce, Chinese consumers and younger generations. As the personal luxury
goods market continues to evolve, Capri is committed to creating engaging luxury
experiences globally. In our view, increased customer engagement and tailoring
merchandise to customer shopping and communication preferences are key to
growing market share.

We also continue to adjust our retail operating strategy to the changing
business environment. Last year, we announced our Capri Retail Store
Optimization Program to close approximately 170 of our retail stores throughout
Fiscal 2021 and Fiscal 2022, in order to improve the profitability of our retail
store fleet. Over this time period, we initially expected to incur approximately
$75 million of one-time costs associated with these store closures, however,
based on a reassessment, we expect these costs to be approximately $25 million.
As of December 25, 2021, we have closed a total of 140 stores and recorded net
restructuring charges of $11 million relating to the program since its
inception. Collectively, we continue to anticipate ongoing savings as a result
of the store closures and lower depreciation associated with the impairment
charges being recorded.
Foreign currency fluctuation. Our consolidated operations are impacted by the
relationships between our reporting currency, the U.S. dollar, and those of our
non-U.S. subsidiaries whose functional/local currency is other than the U.S.
dollar, particularly the Euro, the British Pound, the Chinese Renminbi, the
Japanese Yen, the Korean Won and the Canadian Dollar, among others. We continue
to expect volatility in the global foreign currency exchange rates, which may
have a negative impact on the reported results of certain of our non-U.S.
subsidiaries in the future, when translated to U.S. Dollars.

Disruptions or delays in shipping and distribution and other supply chain
constraints. We have been experiencing global logistics challenges, including
delays as a result of port congestion, vessel availability, container shortages
and temporary factory closures which are expected to continue for the duration
of Fiscal 2022 and into Fiscal 2023. Our freight costs have
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increased as carrier rates for ocean and air shipments have increased
significantly, and the supply chain disruptions have caused us to increase our
use of air freight with greater frequency than in the past. Any future
disruptions in our shipping and distribution network, including impacts on our
supply chain due to temporary closures of our manufacturing partners and
shipping and fulfillment constraints, could have a negative impact on our
results of operations. See Item 1A - "Risk Factors" - "We primarily use foreign
manufacturing contractors and independent third-party agents to source our
finished goods and our business is subject to risks inherent in global sourcing
activities, including disruptions or delays in manufacturing or shipments" of
our Annual Report on Form 10-K for the fiscal year ended March 27, 2021 for
additional discussion.
Costs of manufacturing, tariffs, and import regulations. Our industry is subject
to volatility in costs related to certain raw materials used in the
manufacturing of our products. This volatility applies primarily to costs driven
by commodity prices, which can increase or decrease dramatically over a short
period of time. In addition, our costs may be impacted by sanction tariffs
imposed on our products due to changes in trade terms. For example, we have
historically received benefits from duty-free imports on certain products from
certain countries pursuant to the U.S. Generalized System of Preferences ("GSP")
program. The GSP program expired on December 31, 2020. If the GSP program is not
renewed or otherwise made retroactive, we will continue to experience
significant additional duties and our gross margin will continue to be
negatively impacted. Additionally, we are subject to government import
regulations, including U.S. Customs and Border Protection ("CBP") withhold
release orders. The imposition of taxes, duties and quotas, the withdrawal from
or material modification to trade agreements, and/or if CBP detains shipments of
our goods pursuant to a withhold release order could have a material adverse
effect on our business, results of operations and financial condition. If
additional tariffs or trade restrictions are implemented by the U.S. or other
countries, the cost of our products could increase which could adversely affect
our business. In addition, commodity prices and tariffs may have an impact on
our revenues, results of operations and cash flows. We use commercially
reasonable efforts to mitigate these effects by sourcing our products as
efficiently as possible and diversifying the countries where we produce. In
addition, manufacturing labor costs are also subject to degrees of volatility
based on local and global economic conditions. We use commercially reasonable
efforts to source from localities that suit our manufacturing standards and
result in more favorable labor driven costs to our products.
Segment Information
We operate in three reportable segments, which are as follows:
Versace
We generate revenue through the sale of Versace luxury accessories,
ready-to-wear and footwear through directly operated Versace boutiques
throughout North America (United States and Canada), certain parts of EMEA
(Europe, Middle East and Africa) and certain parts of Asia (including
Australia), as well as through Versace outlet stores and e-commerce sites. In
addition, revenue is generated through wholesale sales to distribution partners
(including geographic licensing arrangements), multi-brand department stores and
specialty stores worldwide, as well as through product license agreements in
connection with the manufacturing and sale of products, including jeans,
fragrances, watches, jewelry, eyewear and home furnishings.
Jimmy Choo
We generate revenue through the sale of Jimmy Choo luxury goods through directly
operated Jimmy Choo retail and outlet stores throughout the Americas (United
States, Canada and Latin America), certain parts of EMEA and certain parts of
Asia, through our e-commerce sites, as well as through wholesale sales of luxury
goods to distribution partners (including geographic licensing arrangements that
allow third parties to use the Jimmy Choo tradename in connection with retail
and/or wholesale sales of Jimmy Choo branded products in specific geographic
regions), multi-brand department stores and specialty stores worldwide. In
addition, revenue is generated through product licensing agreements, which allow
third parties to use the Jimmy Choo brand name and trademarks in connection with
the manufacturing and sale of products, including fragrances and eyewear.
Michael Kors
We generate revenue through the sale of Michael Kors products through four
primary Michael Kors retail store formats: "Collection" stores, "Lifestyle"
stores (including concessions), outlet stores and e-commerce, through which we
sell our products, as well as licensed products bearing our name, directly to
consumers throughout the Americas, certain parts of EMEA and certain parts of
Asia. Our Michael Kors e-commerce business includes e-commerce sites in the
U.S., Canada and EMEA and Asia. We also sell Michael Kors products directly to
department stores, primarily located across the Americas and EMEA, to specialty
stores and travel retail shops in the Americas, Europe and Asia, and to our
geographic licensees in certain parts of
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EMEA, Asia and Brazil. In addition, revenue is generated through product and
geographic licensing arrangements, which allow third parties to use the Michael
Kors brand name and trademarks in connection with the manufacturing and sale of
products, including watches, jewelry, fragrances and eyewear, as well as through
geographic licensing arrangements, which allow third parties to use the Michael
Kors tradename in connection with the retail and/or wholesale sales of our
Michael Kors branded products in specific geographic regions.
Unallocated Corporate Expenses
In addition to the reportable segments discussed above, we have certain
corporate costs that are not directly attributable to our brands and, therefore,
are not allocated to segments. Such costs primarily include certain
administrative, corporate occupancy, shared service and information systems
expenses, including ERP system implementation costs. In addition, certain other
costs are not allocated to segments, including restructuring and other charges
(including transaction and transition costs related to our acquisitions),
impairment costs and COVID-19 related charges. The segment structure is
consistent with how our chief operating decision maker plans and allocates
resources, manages the business and assesses performance. The following table
presents our total revenue and income (loss) from operations by segment for the
three and nine months ended December 25, 2021 and December 26, 2020 (in
millions):
                                                        Three Months Ended                             Nine Months Ended
                                                December 25,           December 26,           December 25,           December 26,
                                                    2021                   2020                   2021                   2020
Total revenue:
Versace                                       $      251             $         195          $         773          $         483
Jimmy Choo                                           178                       121                    457                    294
Michael Kors                                       1,180                       986                  2,932                  2,086
Total revenue                                 $    1,609             $       1,302          $       4,162          $       2,863

Income (loss) from operations:
Versace                                       $       32             $          13          $         135          $          (8)
Jimmy Choo                                            16                        (8)                    28                    (37)
Michael Kors                                         335                       281                    795                    423
Total segment income from operations                 383                       286                    958                    378
Less: Corporate expenses                             (37)                      (29)                  (123)                   (90)
Restructuring and other charges                      (14)                       (1)                   (25)                   (18)
Impairment of assets                                   -                       (90)                   (33)                  (110)
COVID-19 related charges                              (1)                        1                      7                     (2)
Total income from operations                  $      331             $      

$167,784 $158

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The following table presents our global network of retail stores and wholesale
doors by brand:
                                                                                       As of
                                                                       December 25,             December 26,
                                                                           2021                     2020
Number of full price retail stores (including concessions):
Versace                                                                      150                      160
Jimmy Choo                                                                   184                      180
Michael Kors                                                                 535                      547
                                                                             869                      887

Number of outlet stores:
Versace                                                                       62                       57
Jimmy Choo                                                                    56                       51
Michael Kors                                                                 299                      284
                                                                             417                      392

Total number of retail stores                                              1,286                    1,279

Total number of wholesale doors:
Versace                                                                      803                      790
Jimmy Choo                                                                   456                      496
Michael Kors                                                               2,931                    2,763
                                                                           4,190                    4,049

The following table shows our retail stores by geographic location:

                                                               As of                                                                      As of
                                                         December 25, 2021                                                          December 26, 2020
                                     Versace                  Jimmy Choo             Michael Kors               Versace                  Jimmy Choo             Michael Kors
Store count by region:
The Americas                             39                         46                     346                            36                         47                     364
EMEA                                     55                         74                     176                            59                         75                     177
Asia                                    118                        120                     312                           122                        109                     290
                                        212                        240                     834                           217                  231                     831

Consolidated key performance indicators and statistics We use a number of key operating results indicators to assess our performance, including the following (in millions of dollars):

                                                           Three Months Ended                                   Nine Months Ended
                                               December 25, 2021         December 26, 2020         December 25, 2021         December 26, 2020
Total revenue                                 $          1,609          $  

1,302 $4,162 $2,863 Gross profit as a percentage of total revenue

                65.1  %                   65.1  %                   67.0  %                   65.0  %
Income from operations                        $            331          $            167          $            784          $            158
Income from operations as a percent of total
revenue                                                   20.6  %                   12.8  %                   18.8  %                    5.5  %


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Seasonality

We experience certain effects of seasonality with respect to our business. We
generally experience greater sales during our third fiscal quarter, primarily
driven by holiday season sales, and the lowest sales during our first fiscal
quarter.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States ("U.S. GAAP") requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenue and
expenses during the reporting period. Critical accounting policies are those
that are the most important to the portrayal of our results of operations and
financial condition and that require our most difficult, subjective and complex
judgments to make estimates about the effect of matters that are inherently
uncertain. In applying such policies, we must use certain assumptions that are
based on our informed judgments, assessments of probability and best estimates.
Estimates, by their nature, are subjective and are based on analysis of
available information, including current and historical factors and the
experience and judgment of management. We evaluate our assumptions and estimates
on an ongoing basis. While our significant accounting policies are detailed in
Note 2 to the accompanying consolidated financial statements, our critical
accounting policies are disclosed, in full, in the MD&A section of our Annual
Report on Form 10-K for the fiscal year ended March 27, 2021. There have been no
significant changes in our critical accounting policies and estimates since
March 27, 2021.
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Results of Operations
Comparison of the three months ended December 25, 2021 with the three months
ended December 26, 2020
The following table details the results of our operations for the three months
ended December 25, 2021 and December 26, 2020, and expresses the relationship of
certain line items to total revenue as a percentage (dollars in millions):
                                                                                                                                         % of Total Revenue for
                                                Three Months Ended                                                                       the Three Months Ended
                                        December 25,           December 26,                                                     December 25,               December 26,
                                            2021                   2020               $ Change            % Change                  2021                       2020
Statements of Operations Data:
Total revenue                         $    1,609             $       1,302          $     307                  23.6  %
Cost of goods sold                           561                       454                107                  23.6  %                   34.9  %                     34.9  %
Gross profit                               1,048                       848                200                  23.6  %                   65.1  %                     65.1  %
Selling, general and administrative
expenses                                     656                       538                118                  21.9  %                   40.8  %                     41.3  %
Depreciation and amortization                 47                        52                 (5)                 (9.6) %                    2.9  %                      4.0  %
Impairment of assets                           -                        90                (90)               (100.0) %                      -  %                      6.9  %
Restructuring and other charges               14                         1                 13                       NM                    0.9  %                      0.1  %
Total operating expenses                     717                       681                 36                   5.3  %                   44.6  %                     52.3  %
Income from operations                       331                       167                164                  98.2  %                   20.6  %                     12.8  %
Other income, net                              -                        (3)                 3                (100.0) %                      -  %                     (0.2) %
Interest (income) expense, net                (7)                       10                (17)                      NM                   (0.4) %                      0.8  %
Foreign currency gain                         (4)                      (13)                 9                 (69.2) %                   (0.2) %                     (1.0) %
Income before income taxes                   342                       173                169                  97.7  %                   21.3  %                     13.3  %
Provision for (benefit from) income
taxes                                         19                        (5)                24                       NM                    1.2  %                     (0.4) %
Net income                                   323                       178                145                  81.5  %
Less: Net income (loss) attributable
to noncontrolling interest                     1                        (1)                 2                       NM
Net income attributable to Capri      $      322             $         179          $     143                  79.9  %




NM Not meaningful
Total Revenue
Total revenue increased $307 million, or 23.6%, to $1.609 billion for the three
months ended December 25, 2021, compared to $1.302 billion for the three months
ended December 26, 2020, which included net unfavorable foreign currency effects
of approximately $15 million, primarily related to the weakening of the Euro and
Japanese Yen against the U.S. Dollar for the three months ended December 25,
2021. On a constant currency basis, our total revenue increased $322 million, or
24.7%. The increase is attributable to the continued recovery from the COVID-19
pandemic and the adverse impacts related to COVID-19 in the prior fiscal year.
Gross Profit
Gross profit increased $200 million, or 23.6%, to $1.048 billion for the three
months ended December 25, 2021, compared to $848 million for the three months
ended December 26, 2020, which included net unfavorable foreign currency effects
of $10 million. Gross profit as a percentage of total revenue was 65.1% for the
three months ended December 25, 2021 and December 26, 2020. Our gross profit
margin remained flat primarily due to a higher average unit price and lower
promotional activity, offset by increases in supply chain costs for the three
months ended December 25, 2021, as compared to the three months ended
December 26, 2020.
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Total Operating Expenses
Total operating expenses increased $36 million, or 5.3%, to $717 million for the
three months ended December 25, 2021, compared to $681 million for the three
months ended December 26, 2020. Our operating expenses included a net favorable
foreign currency impact of approximately $2 million. Total operating expenses
decreased to 44.6% as a percentage of total revenue for the three months ended
December 25, 2021, compared to 52.3% for the three months ended December 26,
2020. The components that comprise total operating expenses are explained below.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $118 million, or 21.9%,
to $656 million for the three months ended December 25, 2021, compared to $538
million for the three months ended December 26, 2020, primarily due to increased
retail store, e-commerce and corporate costs for the three months ended
December 25, 2021.
Selling, general, and administrative expenses as a percentage of total revenue
decreased to 40.8% for the three months ended December 25, 2021, compared to
41.3% for the three months ended December 26, 2020, primarily due to leveraging
of operating expenses as a result of higher revenue, partially offset by an
increase in marketing expenses as a percentage of revenue for the three months
ended December 25, 2021, as compared to the three months ended December 26,
2020.
Unallocated corporate expenses, which are included within selling, general and
administrative expenses discussed above, but are not directly attributable to a
reportable segment, increased $8 million, or 27.6%, to $37 million for the three
months ended December 25, 2021 as compared to $29 million for the three months
ended December 26, 2020, primarily due to an increase in compensation expense
and ERP system implementation expenses.
Depreciation and Amortization
Depreciation and amortization decreased $5 million, or 9.6%, to $47 million for
the three months ended December 25, 2021, compared to $52 million for the three
months ended December 26, 2020. The decrease in depreciation and amortization
expense was primarily attributable to lower depreciation due to lower capital
expenditures in Fiscal 2022 and Fiscal 2021. Depreciation and amortization
decreased to 2.9% as a percentage of total revenue for the three months ended
December 25, 2021, compared to 4.0% for the three months ended December 26, 2020
primarily due to lower revenues during the prior year due to COVID-19.
Impairment of Assets
For the three months ended December 25, 2021, we did not recognize any asset
impairment charges except for the amount recorded within restructuring and other
charges (see Note 8 to the accompanying consolidated financial statements for
additional information). For the three months ended December 26, 2020, we
recognized asset impairment charges of approximately $90 million, primarily
related to operating lease right-of-use assets across our brands. See Note 11 to
the accompanying consolidated financial statements for additional information.
Restructuring and Other Charges
For the three months ended December 25, 2021, we recognized restructuring and
other charges of $14 million, which included $10 million related to our Capri
Retail Store Optimization Program and other costs of $4 million primarily
related to equity awards associated with the acquisition of Versace. See Note 8
to the accompanying consolidated financial statements for additional
information.
For the three months ended December 26, 2020, we recognized restructuring and
other charges of $1 million, which included other costs of $5 million primarily
related to equity awards associated with the acquisition of Versace and closures
of certain corporate locations, partially offset by $4 million of gains related
to our Capri Retail Store Optimization Program.
Restructuring and other charges are not evaluated as part of our reportable
segments' results (See Segment Information above for additional information).
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Income from Operations
As a result of the foregoing, income from operations increased $164 million, to
$331 million for three months ended December 25, 2021, compared to $167 million
for the three months ended December 26, 2020. Income from operations as a
percentage of total revenue increased to 20.6% for the three months ended
December 25, 2021, compared to 12.8% for the three months ended December 26,
2020. See Segment Information above for a reconciliation of our segment
operating income (loss) to total operating income.
Interest (Income) Expense, net
For the three months ended December 25, 2021, we recognized $7 million of
interest income compared to $10 million of interest expense for the three months
ended December 26, 2020. The $17 million improvement in interest (income)
expense, net, is primarily due to an increase of interest income from higher
average notional amounts outstanding and more favorable interest rates on our
net investment hedges in the current year and a decrease in interest expense
attributable to lower average borrowings outstanding (see Note 9 and Note 12 to
the accompanying consolidated financial statements for additional information).
Foreign Currency Gain
For the three months ended December 25, 2021 and December 26, 2020, we
recognized a net foreign currency gain of $4 million and $13 million,
respectively, primarily attributable to the remeasurement of dollar-denominated
intercompany loans with certain of our subsidiaries.
Provision for (Benefit from) Income Taxes
The provision for income taxes was $19 million for the three months ended
December 25, 2021, compared to a benefit of $5 million for the three months
ended December 26, 2020. Our effective tax rate was 5.6% and (2.9)% for the
three months ended December 25, 2021 and December 26, 2020, respectively. The
change in our effective tax rate was primarily related to increases in uncertain
tax positions and release of certain valuation allowances in the prior year
which were not recurring, partially offset by the favorable effect of a net
operating loss carryback claim made in the United States as a result of COVID-19
related losses. See Note 15 to the accompanying consolidated financial
statements for additional information regarding the effective tax rate for the
current fiscal year quarter.
Our effective tax rate may fluctuate from time to time due to the effects of
changes in U.S. state and local taxes and tax rates in foreign jurisdictions. In
addition, factors such as the geographic mix of earnings, enacted tax
legislation and the results of various global tax strategies, may also impact
our effective tax rate in future periods.
Net Income (Loss) Attributable to Noncontrolling Interest
For the three months ended December 25, 2021, we recorded net income of $1
million and for the three months ended December 26, 2020, we recorded a net loss
of $1 million, attributable to the noncontrolling interest in our joint
ventures. These amounts represent the share of income (loss) that is not
attributable to the Company.

Net Income Attributable to Capri
As a result of the foregoing, our net income increased $143 million to $322
million for the three months ended December 25, 2021, compared to a net income
of $179 million for the three months ended December 26, 2020.
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Segment Information
Versace
                                   Three Months Ended                                     % Change
                          December 25,             December 26,                       As         Constant

(dollars in millions)         2021                     2020          $ Change      Reported      Currency
Revenues                 $       251              $      195        $     56         28.7  %       33.8  %
Income from operations            32                      13              19              NM
Operating margin                12.7   %                 6.7   %




NM Not meaningful
Revenues
Versace revenues increased $56 million, or 28.7%, to $251 million for the three
months ended December 25, 2021, compared to $195 million for the three months
ended December 26, 2020, which included unfavorable foreign currency effects of
$10 million. On a constant currency basis, revenue increased $66 million, or
33.8%, primarily attributable to the continued recovery from the COVID-19
pandemic and the adverse impacts related to COVID-19 in the prior fiscal year.
Income from Operations
For the three months ended December 25, 2021, Versace recorded income from
operations of $32 million, compared to $13 million for the three months ended
December 26, 2020. Operating margin increased from 6.7% for the three months
ended December 26, 2020, to 12.7% for the three months ended December 25, 2021,
primarily due to higher average unit price and leveraging of operating expenses
due to higher revenue.
Jimmy Choo
                                                        Three Months Ended                                                   % Change
                                              December 25,               December 26,                                As                 Constant
(dollars in millions)                             2021                       2020             $ Change            Reported              Currency
Revenues                                     $       178                $      121           $     57                  47.1  %               43.0  %
Income (loss) from operations                         16                        (8)                24                       NM
Operating margin                                     9.0   %                  (6.6)  %




NM Not meaningful
Revenues
Jimmy Choo revenues increased $57 million, or 47.1%, to $178 million for
the three months ended December 25, 2021, compared to $121 million for the three
months ended December 26, 2020, which included favorable foreign currency
effects of $5 million. On a constant currency basis, revenue increased $52
million, or 43.0%, primarily attributable to the continued recovery from the
COVID-19 pandemic and the adverse impacts related to COVID-19 in the prior
fiscal year.
Income (Loss) from Operations
For the three months ended December 25, 2021, Jimmy Choo recorded income from
operations of $16 million, compared to a loss from operations of $8 million for
the three months ended December 26, 2020. Operating margin improved from (6.6)%
for the three months ended December 26, 2020 to 9.0% for the three months ended
December 25, 2021, primarily due to lower promotional activity and leveraging of
operating expenses due to higher revenue.
                                       40
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Michael Kors

                                Three Months Ended                          

% Change

                          December 25,      December 26,                       As          Constant
(dollars in millions)         2021              2020          $ Change       Reported      Currency
Revenues                 $    1,180        $      986        $     194         19.7  %       20.7  %
Income from operations          335               281               54         19.2  %
Operating margin               28.4   %          28.5   %


Revenues
Michael Kors revenues increased $194 million, or 19.7%, to $1.180 billion for
the three months ended December 25, 2021, compared to $986 million for the three
months ended December 26, 2020, which included unfavorable foreign currency
effects of $10 million. On a constant currency basis, revenue increased $204
million, or 20.7%, primarily attributable to the continued recovery from the
COVID-19 pandemic and the adverse impacts related to COVID-19 in the prior
fiscal year.
Income from Operations
For the three months ended December 25, 2021, Michael Kors recorded income from
operations of $335 million, compared to $281 million for the three months ended
December 26, 2020. Operating margin decreased slightly from 28.5% for the three
months ended December 26, 2020, to 28.4% for the three months ended December 25,
2021, primarily due to increases in supply chain costs, mostly offset by higher
average unit price and leveraging of expenses due to higher revenue.
                                       41
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Results of Operations
Comparison of the nine months ended December 25, 2021 with the nine months ended
December 26, 2020
The following table details the results of our operations for the nine months
ended December 25, 2021 and December 26, 2020, and expresses the relationship of
certain line items to total revenue as a percentage (dollars in millions):
                                                                                                                             % of Total Revenue for the Nine Months
                                                  Nine Months Ended                                                                           Ended
                                         December 25,           December 26,                                                   December 25,           December 26,
                                             2021                   2020              $ Change            % Change                 2021                   2020
Statements of Operations Data:
Total revenue                          $       4,162          $       2,863          $  1,299                  45.4  %
Cost of goods sold                             1,374                  1,003               371                  37.0  %                33.0  %                35.0  %
Gross profit                                   2,788                  1,860               928                  49.9  %                67.0  %                65.0  %
Selling, general and administrative
expenses                                       1,800                  1,414               386                  27.3  %                43.2  %                49.4  %
Depreciation and amortization                    146                    160               (14)                 (8.8) %                 3.5  %                 5.6  %
Impairment of assets                              33                    110               (77)                (70.0) %                 0.8  %                 3.8  %
Restructuring and other charges                   25                     18                 7                  38.9  %                 0.6  %                 0.6  %
Total operating expenses                       2,004                  1,702               302                  17.7  %                48.1  %                59.4  %
Income from operations                           784                    158               626                       NM                18.8  %                 5.5  %
Other income, net                                 (2)                    (4)                2                 (50.0) %                   -  %                (0.1) %
Interest (income) expense, net                   (11)                    39               (50)                      NM                (0.3) %                 1.4  %
Foreign currency loss (gain)                       1                    (16)               17                       NM                   -  %                (0.6) %
Income before income taxes                       796                    139               657                       NM                19.1  %                 4.9  %
Provision for income taxes                        54                     20                34                       NM                 1.3  %                 0.7  %
Net income                                       742                    119               623                       NM
Less: Net income (loss) attributable
to noncontrolling interest                         1                     (2)                3                       NM

Net income attributable to Capri $741 $121

         $    620                       NM




NM Not meaningful
Total Revenue
Total revenue increased $1.299 billion, or 45.4%, to $4.162 billion for the nine
months ended December 25, 2021, compared to $2.863 billion for the nine months
ended December 26, 2020, which included net favorable foreign currency effects
of approximately $71 million, primarily related to the strengthening of the
British Pound, Euro, Chinese Renminbi and Canadian Dollar against the
U.S. Dollar for the nine months ended December 25, 2021. On a constant currency
basis, our total revenue increased $1.228 billion, or 42.9%. The increase is
attributable to the continued recovery from the COVID-19 pandemic. In the prior
fiscal year, the Company experienced widespread, temporary store closures and a
significant decline in store traffic.
Gross Profit
Gross profit increased $928 million, or 49.9%, to $2.788 billion for the nine
months ended December 25, 2021, compared to $1.860 billion for the nine months
ended December 26, 2020, which included net favorable foreign currency effects
of $48 million. Gross profit as a percentage of total revenue increased 200
basis points to 67.0% for the nine months ended December 25, 2021, compared to
65.0% for the nine months ended December 26, 2020. The increase in gross profit
margin was primarily attributable to a higher average unit price and lower
promotional activity, partially offset by increases in supply chain costs and
unfavorable channel mix.
                                       42
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Total Operating Expenses
Total operating expenses increased $302 million, or 17.7%, to $2.004 billion for
the nine months ended December 25, 2021, compared to $1.702 billion for the nine
months ended December 26, 2020. Our operating expenses included a net
unfavorable foreign currency impact of approximately $49 million. Total
operating expenses decreased to 48.1% as a percentage of total revenue for the
nine months ended December 25, 2021, compared to 59.4% for the nine months ended
December 26, 2020. The components that comprise total operating expenses are
explained below.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $386 million, or 27.3%,
to $1.800 billion for the nine months ended December 25, 2021, compared to
$1.414 billion for the nine months ended December 26, 2020, primarily due to
increased retail store, e-commerce, corporate costs and marketing expenses for
the nine months ended December 25, 2021.
Selling, general and administrative expenses as a percentage of total revenue
decreased to 43.2% for the nine months ended December 25, 2021, compared to
49.4% for the nine months ended December 26, 2020, primarily due to leveraging
of operating expenses as a result of higher revenue.
Unallocated corporate expenses, which are included within selling, general and
administrative expenses discussed above, but are not directly attributable to a
reportable segment, increased $33 million, or 36.7%, to $123 million for the
nine months ended December 25, 2021 as compared to $90 million for the nine
months ended December 26, 2020, primarily due to an increase in compensation
expense and professional fees.
Depreciation and Amortization
Depreciation and amortization decreased $14 million, or 8.8%, to $146 million
for the nine months ended December 25, 2021, compared to $160 million for the
nine months ended December 26, 2020. The decrease in depreciation and
amortization expense was primarily attributable to lower depreciation due to
lower capital expenditures in Fiscal 2022 and Fiscal 2021. Depreciation and
amortization decreased to 3.5% as a percentage of total revenue for the nine
months ended December 25, 2021, compared to 5.6% for the nine months ended
December 26, 2020 primarily due to higher revenues for the nine months ended
December 25, 2021.
Impairment of Assets
For the nine months ended December 25, 2021 and December 26, 2020, we recognized
asset impairment charges of $33 million and $110 million, respectively, which
primarily related to operating lease right-of-use assets at certain Michael Kors
store locations. See Note 11 to the accompanying consolidated financial
statements for additional information.
Restructuring and Other Charges
For the nine months ended December 25, 2021, we recognized restructuring and
other charges of $25 million, which included other costs of $19 million
primarily related to equity awards associated with the acquisition of Versace
and $6 million related to our Capri Retail Store Optimization Program (see Note
8 to the accompanying consolidated financial statements for additional
information).
For the nine months ended December 26, 2020, we recognized restructuring and
other charges of $18 million, which included other costs of $17 million
primarily related to equity awards associated with the acquisition of Versace
and $1 million related to our Capri Retail Store Optimization Program.
Restructuring and other charges are not evaluated as part of our reportable
segments' results (see Segment Information above for additional information).
Income from Operations
As a result of the foregoing, income from operations increased $626 million, to
$784 million for the nine months ended December 25, 2021, compared to $158
million for the nine months ended December 26, 2020. Income from operations as a
percentage of total revenue increased to 18.8% for the nine months ended
December 25, 2021, compared to 5.5% for the nine months ended December 26, 2020.
See Segment Information above for a reconciliation of our segment operating
income to total operating income.
                                       43
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Interest (Income) Expense, net
For the nine months ended December 25, 2021, we recognized $11 million of
interest income compared to $39 million of interest expense for the nine months
ended December 26, 2020. The $50 million improvement in interest (income)
expense, net, is primarily due to an increase of interest income from higher
average notional amounts outstanding and more favorable interest rates on our
net investment hedges in the current year and a decrease in interest expense
attributable to lower average borrowings outstanding (see Note 9 and Note 12 to
the accompanying consolidated financial statements for additional information).
Foreign Currency Loss (Gain)
For the nine months ended December 25, 2021 and December 26, 2020, we recognized
a net foreign currency loss of $1 million and a net foreign currency gain of $16
million, respectively, primarily attributable to the remeasurement of
dollar-denominated intercompany loans with certain of our subsidiaries.
Provision for Income Taxes

For the nine months ended December 25, 2021, we recognized $54 million of income
tax expense compared to $20 million for the nine months ended December 26, 2020.
Our effective tax rate was 6.8% and 14.4% for the nine months ended December 25,
2021 and December 26, 2020, respectively. The decrease in our effective rate was
primarily due to the favorable effect of a net operating loss carryback claim
made in the United States as a result of COVID-19 related losses and a benefit
recognized as a result of recently enacted tax legislation in Italy which
allowed the Company to reduce its deferred tax liabilities. Specifically, this
change allowed the Company to step up certain intangible assets which will
result in lower future cash taxes.
Our effective tax rate may fluctuate from time to time due to the effects of
changes in U.S. state and local taxes and tax rates in foreign jurisdictions. In
addition, factors such as the geographic mix of earnings, enacted tax
legislation and the results of various global tax strategies, may also impact
our effective tax rate in future periods.
Net Income (Loss) Attributable to Noncontrolling Interest
For the nine months ended December 25, 2021, we recorded net income of $1
million and for the nine months ended December 26, 2020, we recorded a net loss
of $2 million, attributable to the noncontrolling interest in our joint
ventures. These amounts represent the share of income (loss) that is not
attributable to the Company.
Net Income Attributable to Capri
As a result of the foregoing, our net income increased $620 million to a net
income of $741 million for the nine months ended December 25, 2021, compared to
a net income of $121 million for the nine months ended December 26, 2020.
Segment Information
Versace
                                                        Nine Months Ended                                                    % Change
                                              December 25,              December 26,                                 As                 Constant
(dollars in millions)                             2021                      2020              $ Change            Reported              Currency
Revenues                                     $       773               $      483           $     290                  60.0  %               56.9  %
Income (loss) from operations                        135                       (8)                143                       NM
Operating margin                                    17.5   %                 (1.7)  %




NM Not meaningful

Revenues
Versace revenues increased $290 million, or 60.0%, to $773 million for the nine
months ended December 25, 2021, compared to $483 million for the nine months
ended December 26, 2020, which included favorable foreign currency effects of
$15 million. On a constant currency basis, revenue increased $275 million, or
56.9%, primarily attributable to the continued recovery from the COVID-19
pandemic. In the prior fiscal year, the Company experienced widespread,
temporary store closures and a significant decline in store traffic.
                                       44
--------------------------------------------------------------------------------

Income (Loss) from Operations
For the nine months ended December 25, 2021, Versace recorded income from
operations of $135 million, compared to a loss from operations of $8 million for
the nine months ended December 26, 2020. Operating margin improved from (1.7)%
for the nine months ended December 26, 2020, to 17.5% for the nine months ended
December 25, 2021, primarily due to a higher average unit price and lower
promotional activity, as well as leveraging of operating expenses due to higher
revenue.
Jimmy Choo
                                                        Nine Months Ended                                                    % Change
                                              December 25,              December 26,                                 As                 Constant
(dollars in millions)                             2021                      2020              $ Change            Reported              Currency
Revenues                                     $       457               $      294           $     163                  55.4  %               45.2  %
Income (loss) from operations                         28                      (37)                 65                       NM
Operating margin                                     6.1   %                (12.6)  %




NM Not meaningful

Revenues
Jimmy Choo revenues increased $163 million, or 55.4%, to $457 million for
the nine months ended December 25, 2021, compared to $294 million for the nine
months ended December 26, 2020, which included favorable foreign currency
effects of $30 million. On a constant currency basis, revenue increased $133
million, or 45.2%, primarily attributable to the continued recovery from the
COVID-19 pandemic. In the prior fiscal year, the Company experienced widespread,
temporary store closures and a significant decline in store traffic.
Income (Loss) from Operations
For the nine months ended December 25, 2021, Jimmy Choo recorded income from
operations of $28 million, compared to a loss from operations of $37 million for
the nine months ended December 26, 2020. Operating margin improved from (12.6)%
for the nine months ended December 26, 2020, to 6.1% for the nine months ended
December 25, 2021, primarily due to lower promotional activity and leveraging of
operating expenses due to higher revenue.
Michael Kors
                                Nine Months Ended                           

% Change

                          December 25,      December 26,                       As          Constant
(dollars in millions)         2021              2020          $ Change       Reported      Currency
Revenues                 $     2,932       $     2,086       $     846         40.6  %       39.3  %
Income from operations           795               423             372         87.9  %
Operating margin                27.1  %           20.3  %



Revenues
Michael Kors revenues increased $846 million, or 40.6%, to $2.932 billion for
the nine months ended December 25, 2021, compared to $2.086 billion for the nine
months ended December 26, 2020, which included favorable foreign currency
effects of $26 million. On a constant currency basis, revenue increased $820
million, or 39.3%, primarily attributable to the continued recovery from the
COVID-19 pandemic. In the prior fiscal year, the Company experienced widespread,
temporary store closures and a significant decline in store traffic.
Income from Operations

For the nine months ended December 25, 2021, Michael Kors recorded income from
operations of $795 million, compared to $423 million for the nine months ended
December 26, 2020. Operating margin improved from 20.3% for the nine months
ended December 26, 2020, to 27.1% for the nine months ended December 25, 2021,
primarily due to a higher average unit price and leveraging of operating
expenses due to higher revenue, partially offset by increases in supply chain
costs.


                                       45

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Liquidity and Capital Resources
Liquidity
Our primary sources of liquidity are the cash flows generated from operations,
along with borrowings available under our credit facilities (see below
discussion regarding "Revolving Credit Facilities") and available cash and cash
equivalents. Our primary use of this liquidity is to fund the ongoing cash
requirements, including our working capital needs and capital investments in our
business, debt repayments, acquisitions, returns of capital, including share
repurchases and other corporate activities. We believe that the cash generated
from operations, together with borrowings available under our revolving credit
facilities and available cash and cash equivalents, will be sufficient to meet
our working capital needs for the next 12 months and beyond, including
investments made and expenses incurred in connection with our store growth
plans, investments in corporate and distribution facilities, continued systems
development, e-commerce and marketing initiatives. We spent $85 million on
capital expenditures during the nine months ended December 25, 2021.
The following table sets forth key indicators of our liquidity and capital
resources (in millions):
                                         As of
                             December 25,       March 27,
                                 2021              2021
Balance Sheet Data:
Cash and cash equivalents   $         261      $      232
Working capital             $         320      $      (75)
Total assets                $       7,680      $    7,481
Short-term debt             $          26      $      123
Long-term debt              $         976      $    1,219


                                                                            Nine Months Ended
                                                                    December 25,           December 26,
                                                                        2021                   2020
Cash Flows Provided By (Used In):
Operating activities                                             $       713              $        545
Investing activities                                             $       (26)             $        (97)
Financing activities                                             $      (663)             $       (803)
Effect of exchange rate changes                                  $         6              $         (8)
Net increase (decrease) in cash and cash equivalents             $        30              $       (363)


Cash Provided by Operating Activities
Net cash provided by operating activities increased $168 million to $713 million
during the nine months ended December 25, 2021, as compared to $545 million for
the nine months ended December 26, 2020, as a result of an increase in our net
income after non-cash adjustments, partially offset by decreases related to
changes in our working capital. The decreases related to the changes in our
working capital are primarily attributable to an increase in our inventory
levels, an increase in income tax receivables and fluctuations in the timing of
payments and receipts when compared to the prior year.
Cash Used in Investing Activities
Net cash used in investing activities was $26 million during the nine months
ended December 25, 2021, as compared to $97 million during the nine months ended
December 26, 2020, which was primarily attributable to the settlement of certain
net investment hedges of $59 million during the nine months ended December 25,
2021.
Cash Used in Financing Activities
Net cash used in financing activities was $663 million during the nine months
ended December 25, 2021, as compared to $803 million during the nine months
ended December 26, 2020. The decrease of cash used in financing activities of
$140 million was primarily attributable to a decrease in net debt repayments of
$453 million, partially offset by a $359 million increase in cash payments to
repurchase our ordinary shares compared to prior year.
                                       46
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Debt Facilities
The following table presents a summary of our borrowing capacity and amounts
outstanding as of December 25, 2021 and March 27, 2021 (in millions):
                                                                                 As of
                                                                    December 25,           March 27,
                                                                        2021                 2021
Senior Secured Revolving Credit Facility:
Revolving Credit Facility (excluding up to a $500 million
accordion feature) (1)
Total availability                                                $       1,000          $    1,000
Borrowings outstanding (2)                                                   20                   -
Letter of credit outstanding                                                 29                  27
Remaining availability                                            $         951          $      973

Term Loan Facility ($1.6 billion)
Borrowings outstanding, net of debt issuance costs (2)            $         495          $      865
Remaining availability                                            $         

-$-

364 Credit Facility ($230 million)
Total availability                                                $           -          $      230
Remaining availability                                            $           -          $      230

Senior Notes due 2024
Borrowings outstanding, net of debt issuance costs and discount
amortization (2)                                                  $         448          $      447

Other Borrowings (3)                                              $          39          $       21

Hong Kong Uncommitted Credit Facility:
Total availability (80 million and 100 million Hong Kong Dollars) $         

ten $13

Borrowings outstanding                                                        -                   -

Remaining availability (80 million and HK$100 million)

                                                          $         

ten $13

China Uncommitted Credit Facility:
Total availability (45 million and 100 million Chinese Yuan)      $           7          $       15
Borrowings outstanding                                                        -                   -

Full and remaining availability (45 million and 100 million Chinese Yuan)

                                                     $         

seven $15

Japan Credit Facility:
Total availability (1.0 billion Japanese Yen)                     $         

9 $9
Outstanding borrowings (0.0 billion and 1.0 billion Japanese yen) (4)

                                                                           -                   9

Remaining availability (1.0 billion and 0.0 billion Japanese yen) $

$9 –

Versace Uncommitted Credit Facilities:
Total availability (48 million and 57 million Euro)               $          54          $       67
Borrowings outstanding (0 million Euro)                                       -                   -
Remaining availability (48 million and 57 million Euro)           $         

54 $67

Total borrowings outstanding (1)                                  $       1,002          $    1,342
Total remaining availability                                      $       1,031          $    1,298


                                       47

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(1)The financial covenant in our 2018 Credit Facility requiring us to maintain a
ratio of the sum of total indebtedness plus the capitalized amount of all
operating lease obligations for the last four fiscal quarters to Consolidated
EBITDAR of no greater than 3.75 to 1.00 had been waived through the fiscal
quarter ending June 26, 2021. On May 26, 2021 (the "Election Date"), the company
delivered to the administrative agent the certificate required to terminate the
Applicable Period. Effective as of the Election Date, the Company is required to
comply with the quarterly maximum net leverage ratio test of 4.00 to 1.00. As
of December 25, 2021 and March 27, 2021, we were in compliance with all
covenants related to our agreements then in effect governing our debt. See Note
9 to the accompanying consolidated financial statements for additional
information.
(2)As of December 25, 2021, all amounts are recorded as long-term debt in our
consolidated balance sheets. As of March 27, 2021, all amounts are recorded as
long-term debt, except for the current portion of $97 million outstanding under
the 2018 Term Loan Facility, which was recorded within short-term debt in our
consolidated balance sheets.
(3)The balance as of December 25, 2021 consists of $18 million related to our
supplier financing program recorded within short-term debt in our consolidated
balance sheets, $18 million related to the sale of certain Versace tax
receivables, with $8 million and $10 million, respectively, recorded within
short-term debt and long-term debt in our consolidated balance sheets and $3
million of other loans recorded as long-term debt in our consolidated balance
sheets. The balance as of March 27, 2021 consists of $17 million related to our
supplier finance program recorded within short-term debt in our consolidated
balance sheets and $4 million of other loans recorded as long-term debt in our
consolidated balance sheets.
(4)Recorded as short-term debt in our consolidated balance sheets as of
March 27, 2021.
We believe that our 2018 Credit Facility is adequately diversified with no undue
concentration in any one financial institution. As of December 25, 2021, there
were 25 financial institutions participating in the facility, with none
maintaining a maximum commitment percentage in excess of 10%. We have no reason
to believe that the participating institutions will be unable to fulfill their
obligations to provide financing in accordance with the terms of the 2018 Credit
Facility.
See Note 9 in the accompanying financial statements and Note 12 in our Fiscal
2021 Annual Report on Form 10-K for detailed information relating to our credit
facilities and debt obligations.
Share Repurchase Program
The following table presents our ordinary share repurchases during the nine
months ended December 25, 2021 and December 26, 2020 (dollars in millions):
                                                                            

Nine month period ended

                                                                      December 25,           December 26,
                                                                          2021                   2020
Cost of shares repurchased under share repurchase program            $        350          $           -

Fair value of shares withheld to cover tax liability for vested restricted stock awards

                                                        10                      1
Total cost of treasury shares repurchased                            $        360          $           1

Shares repurchased under share repurchase program                       5,934,244                      -
Shares withheld to cover tax withholding obligations                      193,322                 48,147
                                                                        6,127,566                 48,147



During the first quarter of Fiscal 2022, we reinstated our $500 million share
repurchase program, which was previously suspended during the first quarter of
Fiscal 2021 in response to the impact of the COVID-19 pandemic and the
provisions of the Second Amendment of the 2018 Credit Facility. See Note 9 in
the accompanying financial statements for additional information.

On November 3, 2021, we announced that our Board of Directors had terminated our
existing $500 million share repurchase program (the "Prior Plan"), with $250
million of availability remaining, and authorized a new share repurchase program
(the "Fiscal 2022 Plan") pursuant to which we may, from time to time, repurchase
up to $1.0 billion of our outstanding ordinary shares within a period of two
years from the effective date of the program. Share repurchases may be made in
open market or privately negotiated transactions, subject to market conditions,
applicable legal requirements, trading restrictions under our insider trading
policy and other relevant factors. The program may be suspended or discontinued
at any time.
                                       48
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See Note 13 to the accompanying consolidated financial statements for additional
information.
Contractual Obligations and Commercial Commitments
Please refer to the "Contractual Obligations and Commercial Commitments"
disclosure within the "Liquidity and Capital Resources" section of our Fiscal
2021 Form 10-K for a detailed disclosure of our other contractual obligations
and commitments as of March 27, 2021.
Off-Balance Sheet Arrangements
We have not created, and are not party to, any special-purpose or off-balance
sheet entities for the purpose of raising capital, incurring debt or operating
our business. Our off-balance sheet commitments relating to our outstanding
letters of credit were $35 million at December 25, 2021, including $6 million in
letters of credit issued outside of the 2018 Credit Facility. In addition, as of
December 25, 2021, bank guarantees of approximately $34 million were supported
by our various credit facilities. We do not have any other off-balance sheet
arrangements or relationships with entities that are not consolidated into our
financial statements that have or are reasonably likely to have a material
current or future effect on our financial condition, changes in financial
condition, revenues, expenses, results of operations, liquidity, capital
expenditures or capital resources.
Recent Accounting Pronouncements
See Note 2 to the accompanying interim consolidated financial statements for
recently issued accounting standards, which may have an impact on our financial
statements and/or disclosures upon adoption.
                                       49

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